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SCHEDULE 14A
(RULE 14-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant: X
Filed by a Party other than the Registrant
Check the appropriate box:
[X]Preliminary Proxy Statement
[_]Confidential, for Use of the Commission Only (as permitted by Rule 14a
6(e)(2))
[_]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to '240.14a-11(c) or '240.14a-12
BUSINESS OBJECTS S.A.
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
----------------
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X]No fee required.
[_]Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies: N/A
(2) Aggregate number of securities to which transaction applies: N/A
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined): N/A
(4) Proposed maximum aggregate value of transaction: N/A
(5) Total fee paid: N/A
[_]Fee paid previously with preliminary materials.
[_]Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid: N/A
(2) Form, Schedule or Registration Statement No.: N/A
(3) Filing Party: N/A
(4) Date Filed: N/A
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[LOGO OF BUSINESS OBJECTS APPEARS HERE]
SOCIETE ANONYME
WITH A SHARE CAPITAL OF FF 16,904,147
REGISTERED OFFICE : 1 SQUARE CHAPTAL
92300 LEVALLOIS-PERRET
R.C.S. NANTERRE B 379 821 994
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NOTICE TO ADS HOLDERS OF AN ORDINARY AND EXTRAORDINARY
GENERAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 18, 1998
NOTICE IS HEREBY GIVEN THAT an Ordinary and Extraordinary General Meeting
(the "Annual Meeting") of the shareholders of Business Objects S.A., a French
corporation (the "Company") will be held on June 18, 1998 at 9:00 a.m. at 1,
square Chaptal, 92300 Levallois-Perret (Paris) in France, in order to hear the
management report on the activities of the Company during fiscal 1997, and to
vote on the following items:
Within the authority of the Ordinary General Meeting, the following items
will be voted on:
1. To approve the financial statements of Business Objects S.A.
for the year ended on December 31, 1997.
2. To allocate the profits of the year ended December 31, 1997.
3. To renew the term of office of Arnold Silverman as a Director.
4. To renew the term of office of Albert Eisenstat as a Director.
5. To appoint Bernard Charles as a Director.
6. To approve the statutory auditors report regarding transactions
by the Company in which Directors have an interest.
Within the authority of the Extraordinary General Meeting, the following
items will be voted on:
7. To increase the number of shares reserved for issuance under
the 1994 Stock Option Plan by 750,000 shares.
8. To reserve 135,000 shares for issuance under the Employee
Savings Plan.
9. To re-affirm the price setting conditions of 53,132 shares
reserved for issuance under the 1995 International Employee
Stock Purchase Plan.
10. To increase the number of shares reserved for issuance under
the 1995 International Employee Stock Purchase Plan by 165,000
shares.
11. to 13. To authorize the issuance of securities that participate in
the share capital of the Company, with and without
preferential subscription rights.
14. To authorize capital increases in the event of a tender or
exchange offer for securities of the Company.
15. to 19. To authorize the issuance without payment of warrants to
purchase an aggregate of 70,000 shares to certain Directors
of the Company.
The foregoing items are more fully described in the Proxy Statement
accompanying this notice.
By Order of the Board of Directors
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING, YOU ARE REQUESTED TO COMPLETE
AND PROMPTLY RETURN THE ENCLOSED VOTING INSTRUCTION CARD IN THE ENVELOPE
PROVIDED. IF THE QUORUM FOR THE ORDINARY AND/OR THE EXTRAORDINARY MEETING IS
NOT MET ON JUNE 18, 1998, SHAREHOLDERS WILL BE INVITED TO VOTE AT A MEETING
ON JUNE 25, 1998, ON THE SAME AGENDA AS DESCRIBED IN THIS NOTICE.
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[LOGO OF BUSINESS OBJECTS APPEARS HERE]
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS
PROCEDURAL MATTERS
GENERAL
This Proxy Statement is being furnished in connection with the solicitation
of voting instruction cards by the Board of Directors of Business Objects S.A.
(the "Company") for use at the Annual Meeting of Shareholders (the "Annual
Meeting") to be held on June 18, 1998 at 9.00 a.m., French time, and at any
adjournment thereof, for the purposes set forth herein.
The Annual Meeting will be held at the offices of the Company located at 1
Square Chaptal, 92300 Levallois-Perret (Paris), France. The Company's
telephone number is (331) 41 25 21 21.
These solicitation materials were mailed on or about May 12, 1998, together
with the Company's 1998 Annual Report, to all ADSs holders as of April 20,
1998 (the "Record Date"). The number of shares entitled to vote at the Annual
Meeting as of the Record date is 16,915,115.
INFORMATION CONCERNING VOTING
Pursuant to a program sponsored by the Company, ordinary shares of the
Company (the "Ordinary Shares") are traded in the United States in the form of
American Depositary Shares ("ADSs"), each ADS corresponding to one Ordinary
Share placed on deposit with The Bank of New York (the "Depositary").
Holders of ADSs may vote by using the enclosed Voting Instruction Card. Such
holders who wish to directly vote the Ordinary Shares underlying the Company's
ADSs and attend the Annual Meeting must contact the Depositary in order to
become registered owners of the Shares corresponding to their ADSs prior to
June 1, 1998.
QUORUM REQUIRED UNDER FRENCH LAW
The required quorum for ordinary resolutions is one-fourth of the total
outstanding shares with voting rights. If such quorum is not met, a second
shareholders' meeting will be held. At this second meeting, no quorum is
required for ordinary resolutions.
The required quorum for extraordinary resolutions is one-third of the total
outstanding shares with voting rights. If such quorum is not met, a second
shareholders' meeting will be held. At this second meeting, the quorum
required for extraordinary resolutions is one-fourth of the total outstanding
shares with voting rights on second call.
Ordinary Shares that are voted "FOR," "AGAINST" or "ABSTAIN" from a matter
are treated as being present at the Annual Meeting for purposes of
establishing a quorum.
MAJORITY VOTE REQUIRED UNDER FRENCH LAW
Passage of ordinary resolutions requires the affirmative vote of a majority
of the shares present or represented at the Annual Meeting.
Passage of extraordinary resolutions requires the affirmative vote of two
thirds of the shares present or represented at the Annual Meeting.
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VOTING BY HOLDERS OF AMERICAN DEPOSITARY SHARES; RECORD DATE
Holders of ADSs as of April 20, 1998 (the "Record Date") are entitled to
notice of the Annual Meeting, and may vote the ordinary shares underlying
their ADSs at the Annual Meeting in one of two ways: (A) by properly
completing and returning the enclosed Voting Instruction Card to the
Depositary by no later than June 12, 1998 (the "Receipt Date"), a holder of
ADSs will cause the Depositary to vote the shares underlying the ADSs in the
manner prescribed in the Voting Instruction Card as more fully described
below; or (B) a holder of ADSs may elect to exchange their ADSs for ordinary
shares and may attend the Annual Meeting and vote the Ordinary Shares in
person. The significant differences between these two alternatives are: (i)
that a holder of ADSs will not be entitled to attend the Annual Meeting in
person but must rather rely upon the Depositary for representation; (ii) a
holder of ADSs may not have the opportunity to consider or vote on any matters
which may be presented at the Annual Meeting other than those described in
this Proxy Statement or any further solicitation made by the Company; (iii) a
holder of ADSs is not entitled to present proposals at the Annual Meeting for
consideration at such meeting; and (iv) a holder of Ordinary Shares must
actually be the registered holder of the Ordinary Shares on June 17, 1998 (and
hold such Ordinary Shares through the date of the Annual Meeting), and,
therefore, holding ADSs (or ordinary shares) on the Record Date will not be
sufficient to entitle one to attend or vote at the Annual Meeting.
Voting Through Depositary. Upon receipt by the Depositary of a properly
completed Voting Instruction Card on or before the Receipt Date, the
Depositary will, insofar as practicable and permitted under applicable
provisions of French law and the articles of association of Business Objects
S.A., vote or cause to be voted the Ordinary Shares underlying ADSs in
accordance with any non-discretionary instructions set forth in such Voting
Instruction Card. With respect to Voting Instruction Cards which are signed
but on which no voting instructions have been indicated, the Depositary will
vote or cause to be voted the Ordinary Shares in favor of each proposal
recommended by the Board of Directors of the Company and against each proposal
opposed by the Board of Directors of the Company.
The Depositary will not vote, cause to be voted or attempt to exercise the
right to vote that is attached to ADSs if the Voting Instruction Card with
respect to such ADSs is incorrectly completed or illegible. The Depositary
will take no action to impair its ability to vote or cause to be voted the
number of Shares necessary to carry out the instructions of all holders of
ADSs.
Voting Ordinary Shares. Under French law and the articles of association of
the Company, only shareholders holding registered Ordinary Shares of the
Company at least one Paris business day prior to the date of a shareholders'
meeting may vote the Shares and attend such meeting. Therefore, in order for a
holder of ADSs to attend the Annual Meeting and vote the Ordinary Shares, such
holder must first become a registered owner of Ordinary Shares underlying the
ADSs. To accomplish this, a holder of ADSs must deliver, on or before June 1,
1998, their ADSs to the Depositary for cancellation and pay the related
exchange charges of the Depositary, as provided in the Deposit Agreement. The
Depositary will then request that the Paris office of Banque Paribas as
custodian (the "Custodian") of the Ordinary Shares underlying the ADSs to
register such holder in the share register of Business Objects S.A. and will
request the Custodian to make arrangements to allow the holder of Ordinary
Shares to vote at the Annual Meeting. The Custodian will not permit any
transfer of the Ordinary Shares during the "blocked period" of June 17, 1998
to June 18, 1998.
RECEIPT DATE
The Depositary must receive the Voting Instruction Card on or before the
Receipt Date in order to vote the ADSs on behalf of such holders. The Receipt
Date is June 12, 1998.
REVOCABILITY OF VOTING INSTRUCTIONS
All ADSs holders entitled to vote and represented by properly executed
Voting Instructions Cards received prior to the Receipt Date, and not revoked,
will be voted at the Annual Meeting in accordance with the instructions
indicated on those Voting Instruction Cards. Any Voting Instructions given
pursuant to this solicitation may be revoked by the person giving it at any
time before it is voted. A Voting Instruction may be
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revoked by filing with The Bank of New York, before June 12, 1998, a written
notice of revocation or a duly executed Voting Instruction Card, in either
case later dated than the prior Voting Instruction Card relating to the same
ADSs.
EXPENSES OF SOLICITATION
All expenses of this solicitation, including the cost of preparing and
mailing this Proxy Statement, will be borne by the Company. The Company may
reimburse brokerage firms, custodians, nominees, fiduciaries and other persons
representing beneficial owners of ADSs for their reasonable expenses in
forwarding proxy material to and in soliciting such beneficial owners.
Directors, officers and employees of the Company may also solicit votes in
person or by telephone, telegram, letter, facsimile or other means of
communication. Such Directors, officers and employees will not be additionally
compensated, but they may be reimbursed for reasonable out-of-pocket expenses
in connection with such solicitation.
PROCEDURE FOR SUBMITTING SHAREHOLDER PROPOSALS
Under French corporate law, shareholders holding a defined percentage of the
Company's share capital may propose new resolutions or modifications to the
resolutions presented by the Board of Directors to the shareholders for their
approval no later than 10 days following publication of the notice of Annual
Meeting in the "Bulletin d'Annonces Legales Officiel" ("BALO"). In such case,
holders of ADSs who have given no prior instructions to vote on such new or
amended resolution shall be deemed to have voted against the new or revised
resolution. The number of Shares required to be held to propose new
resolutions for consideration at the Annual Meeting is 497,603. The Company
expects to publish a notice of the Annual Meeting in the BALO on or about May
18, 1998.
DOCUMENTS AVAILABLE UPON WRITTEN REQUEST TO THE COMPANY
Appended to this Proxy Statement are the text of the report of the Board of
Directors on the activities of the Company in fiscal 1997, a summary of the
unconsolidated accounts of Business Objects S.A. for fiscal 1997 prepared
under French GAAP, and a table showing the unconsolidated results of Business
Objects S.A. over the past five fiscal years. This Proxy Statement is being
mailed together with the Company's Annual Report for the year ended December
31, 1997, which includes the consolidated fiscal results of Business Objects
S.A. for 1997 prepared in accordance with U.S. GAAP. In addition, you may
request copies of additional information, in accordance with French law
relating to commercial companies, using the enclosed Request for Information
Form. Such additional information may include, but is not limited to, the
statutory auditor's reports on Proposals 1, 6 and 7 through 19.
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PROPOSAL 1
APPROVAL OF THE 1997 UNCONSOLIDATED FINANCIAL STATEMENTS
OF BUSINESS OBJECTS S.A.
GENERAL
French corporate law provides that the Company's financial statements,
prepared under French generally accepted accounting principles, of a fiscal
year must be approved within six months following the close of the fiscal
year. Shareholders are also required to specifically approve certain non-tax
deductible expenses which in the present case, correspond mainly to company
car expenses. At the Annual Meeting, the shareholders are being asked to
approve the financial statements and these expenses.
PROPOSAL
At the Annual Meeting, shareholders will hear the report of the statutory
auditors on the annual financial statements (unconsolidated) of Business
Objects S.A. Shareholders may also request that the report be sent to them by
using the enclosed Request for Information Form. The First Resolution sets
forth the full text of the shareholder action to which this Proposal relates.
A summary of the Company's financial statements for fiscal 1997 as required
by French law, as well as the report of the Board of Directors on these
financial statements, is appended to this Proxy Statement.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RESOLUTION
TO WHICH THIS PROPOSAL RELATES
PROPOSAL 2
ALLOCATION OF PROFITS
GENERAL
Under French corporate law, shareholders have exclusive authority to decide
upon the allocation of the profits of the prior fiscal year. Pursuant to
applicable law, after-tax profits (unconsolidated) of Business Objects S.A.
must first be allocated to a "legal reserve" of up to 5% of the annual
profits. However, additional allocations for legal reserves are no longer
required when the legal reserve reaches 10% of the issued share nominal
capital measured as of the close of the fiscal year. After the statutory
requirement for allocation to the legal reserve has been met, shareholders may
decide to declare a dividend distribution to shareholders, an allocation to
specific reserves and/or to carry the profits forward.
PROPOSAL
The Board of Directors proposes that the Company's after-tax profit of FF
9,105,875.46, be allocated as follows:
- up to FF 39,263.90 to the legal reserve which will amount, after this
allocation, to an aggregate of FF 1,677,766.30, representing 10% of
the share nominal capital of the Company as of December 31, 1997; and
-the balance of FF 9,066,611.56, to be carried forward.
Pursuant to French law, the Board of Directors reminds shareholders that the
Company has not declared any dividends during the three previous fiscal years.
The Second Resolution sets forth the full text of the shareholder action to
which this Proposal relates.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RESOLUTION
TO WHICH THIS PROPOSAL RELATES
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PROPOSALS 3 TO 5
ELECTION OF THREE DIRECTORS
GENERAL
In accordance with French law, the Company is managed by its Board of
Directors and by its Chairman, President and Chief Executive Officer, who has
full executive authority to manage the Company, subject to the prior
authorization of the Board of Directors or of the Company's shareholders for
certain decisions. The Company's Board of Directors is currently comprised of
five members. Each Director is elected for a three-year term. Directors are
elected by shareholders and serve in office until the expiration of their
respective term, or until their death or resignation, or until their removal,
with or without cause, by the shareholders. There is no limitation, other than
applicable age limits, on the number of terms that a Director may serve.
Information regarding the nominees and other Directors of the Company is set
forth on pages 21 and 22.
NOMINEES; PROPOSAL
Mr. Silverman's and Mr. Eisenstat's term of office will come to an end at
the close of this Annual Meeting. The Board of Directors proposes that their
term of office be renewed for a period of three years expiring at the end of
the Ordinary General Shareholders' Meeting called to decide upon the Company's
financial statements for the fiscal year ending on December 31, 2000, i.e., at
the Annual Meeting to be held in 2001.
Mr. Charles is proposed to be elected, for a period of three years expiring
at the end of the Ordinary General Shareholders' Meeting called to decide upon
the Company's financial statements for the fiscal year ending on December 31,
2000, i.e., at the Annual Meeting to be held in 2001.
The Third, Fourth and Fifth Resolutions set forth the full text of the
shareholder action to which these Proposals relate.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RESOLUTIONS
ELECTING THE NOMINEES LISTED ABOVE
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PROPOSAL 6
APPROVAL OF STATUTORY AUDITORS REPORT
REGARDING TRANSACTIONS WITH THE COMPANY
IN WHICH DIRECTORS HAVE AN INTEREST
GENERAL
Under applicable law, certain transactions in which a director has, directly
or indirectly, an interest must be submitted to and approved by shareholders.
The purpose of this regulation is to ensure full disclosure of potentially
conflicting relationships between a director and the company or an entity with
which the company is doing business. Such relationships include, but are not
limited to, transactions entered into between the company and a director, as
well as to agreements entered into between two companies, which have common
directors.
At the Annual Meeting, shareholders will hear the report of the statutory
auditors to the effect that no such transactions were entered into during
1997.
PROPOSAL
Shareholders are requested to acknowledge and approve that there were no new
transactions concluded in fiscal year 1997. The Sixth Resolution sets forth
the full text of the shareholder action to which this Proposal relates.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RESOLUTION
TO WHICH THIS PROPOSAL RELATES
PROPOSAL 7
INCREASE IN THE NUMBER OF SHARES AUTHORIZED FOR ISSUANCE
UNDER THE COMPANY'S 1994 STOCK OPTION PLAN
GENERAL
The 1994 Stock Option Plan (the "1994 Option Plan") was adopted by the Board
of Directors in 1994 and approved by the shareholders on June 21, 1995. The
1994 Option Plan provides for the grant of incentive stock options within the
meaning of Section 422 of the United States Internal Revenue Code of 1986, as
amended (the "Code"), and for the grant of nonstatutory stock options to
employees of the Company (including officers and employee directors) of the
Company. An aggregate of 3,000,000 shares have been reserved for issuance
under the 1994 Option Plan, of which, as of March 28, 1998, options to
purchase 2,624,599 shares were outstanding and 328,865 shares remained
available for future grants.
PROPOSAL
At the Annual Meeting, the shareholders are being requested to approve an
increase in the number of shares reserved for issuance under the 1994 Option
Plan by 750,000 shares, bringing the total number of shares reserved for
issuance thereunder to an aggregate of 3,750,000 shares. The Company believes
that the granting of stock options motivates high levels of performance and
provides an effective means of recognizing employee contributions to the
success of the Company. The Company believes that this policy is of great
value in recruiting and retaining highly qualified technical and other key
personnel who are in great demand as well as rewarding and incenting current
employees. The Board of Directors believes that the ability to grant options
will be important to the future success of the Company by allowing it to
accomplish these objectives. The proposed increase in reserved shares is
intended to provide the Company sufficient shares to meet anticipated needs
for hiring and retention purposes. The Seventh Resolution sets forth the full
text of the shareholder action to which this proposal relates.
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SUMMARY OF THE 1994 OPTION PLAN
Purpose. The purpose of the 1994 Option Plan is to attract and retain the
best available personnel for positions of substantial responsibilities, to
provide additional incentive to employees and to promote the success of the
Company's business.
Administration. The 1994 Option Plan is administered by the Board of
Directors. Subject to the other provisions of the Plan, the Board has the
power to determine the terms and conditions of the options granted, including
the exercise price, the number of shares subject to the option and the
exercisability thereof.
Eligibility. Options may be granted to employees of the Company or any
affiliated company, as well as to the Chief Executive Officer (President-
Directeur General) and Managing Directors (Directeurs Generaux). Under French
law, the Company cannot grant options to members of the Board of Directors
other than the President-Directeur General or a Directeur General.
Terms and conditions of options. Each option granted is evidenced by a
written stock option agreement between the optionee and the Company and is
subject to the following terms and conditions:
(a) Exercise price. The Board of Directors determines the exercise price at
the time the option is granted.
The exercise price may be no less than 100% of the fair market value per
share on the last trading day prior to the date of grant, provided however
that the exercise price may not be less than 110% of the fair market value
per share on the last trading day prior to the date of grant for options
granted to a U.S. beneficiary who, at the time the option is granted, owns
stock representing more than ten percent (10%) of the voting rights of all
classes of stock of the Company or an affiliate company.
The fair market value used is, as of any date, the French franc
equivalent of the U.S.$ value of the closing price of one ADS corresponding
to one share of common stock, as reported on the Nasdaq National Market,
calculated on the basis of the noon buying rate reported by the Federal
Reserve Bank of New York (expressed in francs per U.S.$ 1.00).
The exercise price may not be adjusted, except upon the occurrence of
events defined in article 208-5 of the law n(degrees)66-537 of July 24,
1966 relating to commercial companies. Such events relate to changes in
capitalization.
(b) Exercise of the Option. Each stock option agreement specifies the term
of the option and the date when the option becomes exercisable. The terms of
such vesting are determined by the Board of Directors. Options granted under
the 1994 Option Plan generally vest at a rate of 1/48th of the shares subject
to the option per month, provided the beneficiary remains continuously
employed by the Company. Due to adverse recent changes in social security
regulation in France, new options granted to France-based employees vest over
four years with 50% of the shares vesting after two years, and the remaining
shares vesting monthly over the next two following years.
(c) Termination of Employment. In the event an optionee's status as an
employee terminates for any reason other than death or disability, the
optionee may exercise his or her options, to the extent vested, within three
months from the date of such termination. Options can be exercised within
twelve months in case of death or disability.
(d) Term of Options. Options have a term of ten years, other than options
granted to employees of the United Kingdom which have a term of seven years
less one day.
(e) Non-transferability of Options. An option is not transferable by the
optionee, other than by will or the laws of descent and distribution. In the
event of the optionee's death, options may be exercised by a person who
acquires the right to exercise the option by bequest or inheritance.
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(f) Transferability of Shares. As a general rule, shares acquired pursuant
to the exercise of an option may be immediately disposed of. However, in
December 1996, the French parliament adopted a law that requires French
companies to pay, for France-based employees, French social contributions and
certain salary-based taxes, which may represent, for the Company, up to 45% of
the taxable gain, on the difference between the option price and the fair
market value of the underlying shares on the exercise date, if the beneficiary
disposes of the shares before a five-year period following the grant of the
option. For options granted after the adoption of the new law, the Board of
Directors resolved to subject such options to a minimum holding period
requirement of the underlying shares, whereby France-based optionees are not
be allowed to sell or dispose of the shares before the expiration of a 5-year
period from the grant date.
Term of Plan. The 1994 Option Plan terminates on August 16, 1999.
UNITED STATES FEDERAL TAX INFORMATION
Options granted under the Option Plan may be either "incentive stock
options," as defined in Section 422 of the Code, or "nonstatutory" options.
Incentive Stock Options. If an option granted under the 1994 Option Plan is
an incentive stock option, the optionee will recognize no income upon grant of
the incentive stock option and incur no tax liability due to the exercise
unless the optionee is subject to the alternative minimum tax. Upon the sale
or exchange of the shares more than two years after grant of the option and
one year after exercising the option, any gain or loss will be treated as long
term capital gain or loss. If these holding periods are not satisfied, the
optionee will recognize ordinary income equal to the difference between the
exercise price and the lower of (i) the fair market value of the stock at the
date of the option exercise or (ii) the sale price of the stock. A different
rule for measuring ordinary income upon such a premature disposition may apply
if the optionee is also an officer, Director or ten percent (10%) stockholder
of the Company. Under current French tax regulations, the Company is not
entitled to a deduction in the amount of the ordinary income recognized by the
optionee. Any gain or loss recognized on such a premature disposition of the
shares in excess of the amount treated as ordinary income will be
characterized as long-term or short-term capital gain or loss, depending on
the holding period.
Nonstatutory Stock Options. All other options that do not qualify as
incentive stock options are referred to as nonstatutory options. An optionee
will not recognize any taxable income at the time a nonstatutory option is
granted. However, upon exercise of a nonstatutory option, the optionee will
recognize taxable income generally measured as the excess of the then fair
market value of the shares purchased over the exercise price. Any taxable
income recognized in connection with an option exercise by an optionee who is
also an employee of the Company will be subject to income tax withholding by
the Company. Under current French tax regulations, the Company is not entitled
to a deduction in the amount of the ordinary income recognized by the
optionee. Upon a disposition of such shares by the optionee, any difference
between the sale price and the exercise price, to the extent not recognized as
taxable income as described above, will be treated as long-term or short-term
capital gain or loss, depending on the holding period.
THE FOREGOING SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION UPON
OPTIONEES WITH RESPECT TO THE GRANT AND EXERCISE OF OPTIONS UNDER THE OPTION
PLAN DOES NOT PURPORT TO BE COMPLETE, AND REFERENCE SHOULD BE MADE TO THE
APPLICABLE PROVISIONS OF THE CODE. IN ADDITION, THIS SUMMARY DOES NOT DISCUSS
THE TAX CONSEQUENCES OF THE OPTIONEE'S DEATH OR THE INCOME TAX LAWS OF ANY
MUNICIPALITY, STATE OR FOREIGN COUNTRY IN WHICH AN OPTIONEE MAY RESIDE.
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PROPOSAL NO. 8
AUTHORIZATION TO ISSUE SHARES UNDER
THE COMPANY'S EMPLOYEE SAVINGS PLAN
GENERAL
The Employee Savings Plan (the "Savings Plan") is a plan under which
employees may invest personal savings as well as profit-sharing payments, if
any received from the Company. As part of the Savings Plan, employees may
purchase securities of the Company, if and when, an offering period is opened
by the Board of Directors. The Savings Plan is intended to qualify under the
provisions of French tax regulations and is specifically designed for French-
based employees of the Company in order for them to benefit from the French
statutory and tax provisions relating to employee stock purchase plans.
The Board of Directors resolved at its meeting held on April 14, 1998, to
amend certain terms and conditions of the Savings Plan. The Savings Plan, as
amended, is more fully described below.
PROPOSAL
Shareholders are requested to approve the issuance of up to 135,000 shares
under the Savings Plan to employees of Business Objects S.A., to establish the
mechanism for setting the issue price of the shares being reserved for
issuance under the Savings Plan, and to delegate to the Board of Directors the
authority, within the limits set forth by the shareholders, to set the dates
of subscription and the conditions under which the subscribed shares will be
paid and issued. The authority to issue the shares currently reserved under
the Savings Plan will expire on the date of the Annual Meeting. The Eighth
Resolution sets forth the full text of the shareholder action to which this
Proposal relates.
This authorization would be effective for a period of two years and would
therefore expire in June 2000. Approval of this proposal constitutes a waiver
by the shareholders of their preferential subscription right with respect to
the shares to be issued under the Savings Plan.
SUMMARY OF THE EMPLOYEE SAVINGS PLAN
Purpose. The purpose of the Plan is to attract and retain the best available
personnel for positions of substantial responsibilities, to provide additional
incentive to employees and to promote the success of the Company's business.
Administration. The Board of Directors administers the Plan. Subject to the
other provisions of the Plan, the Board has full and exclusive authority to
construe, interpret and apply the terms of the Plan, and to determine
eligibility.
Eligibility and Participation. Any employee of Business Objects S.A. being
employed by the Company for at least six months is eligible to participate in
the Plan. The number of shares that a given employee may purchase is
determined as a percentage from 1% to 10% of the compensation received by said
employee over a period of six months. No employee may purchase more than the
French francs equivalent of U.S. $25,000 worth of shares for each calendar
year under all stock purchase plans of the Company. All employees
participating in the Plan have the same rights and privileges, except for the
number of shares that each employee may purchase. The right to subscribe to
the shares may be exercised only by the employee and is not transferable.
Offering Periods. The Board of Directors may, from time to time, and
provided that the price setting conditions described below are met, open
offering periods, of up to approximately six months.
9
<PAGE>
Purchase price. As the Company's ADSs are quoted on the Nasdaq National
Market, the issue price of one share is equal to the higher of (i) eighty five
percent (85%) of the closing sales price for such ADS (or the closing bid, if
no sales were registered) as quoted on such market (or the exchange with the
greatest volume of trading ADSs) on the last trading day prior to the date of
the Board of Directors called to set the opening date for subscription and
(ii) 80% of the average of the closing sales prices for an ADS (or the closing
bid, if no sales were registered) as quoted on such system or exchange (or the
exchange with the greatest volume of ADSs trading) on the twenty days of
quotation preceding the day of the decision of the Board of Directors called
to set the opening date for subscription. When the issue price of one share
determined pursuant to the foregoing price-setting conditions is in U.S.
dollars, the issue price of one share is the exchange value in French francs
of the issue price of one share in U.S. dollars calculated on the basis of the
noon buying rate on the last trading day prior to the date of the Board of
Directors meeting called to set the opening date for subscription as reported
by the Federal Reserve Bank of New York (expressed in French francs for one
U.S. dollar).
Withdrawals. Funds invested by employees cannot be disposed of for a period
of five years from the investment, except under limited circumstances defined
by French law.
Tax information. The Savings Plan is intended to qualify under the
provisions of French law regulating Employee Savings Plans, which provide for
the exemption from income tax and social security contributions on gains
realized.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RESOLUTION TO WHICH THIS
PROPOSAL RELATES
PROPOSALS 9 AND 10
RELATED TO THE
1995 INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
The 1995 International Employee Stock Purchase Plan ("IESPP") was approved
at the shareholders' meeting of June 21, 1995. The IESPP is intended to
qualify under the provisions of sections 421 and 423 of the 1986 Internal
Revenue Code of the United States, as amended.
Since its adoption, the Company issued 183,754 shares under the IESPP, of
which 83,971 were issued in fiscal 1997.
PROPOSAL 9
GENERAL
At the Annual Meeting, shareholders are being requested to re-affirm the
price setting-conditions authorized in June 1997 for the remaining shares
which have been reserved and are unissued under the IESPP.
Further to the shareholders meeting of June 19, 1997, 150,022 shares were
available for subscription, of which 96,890 have been issued as of the date of
this Proxy Statement, leaving 53,132 shares reserved and unissued under the
IESPP. The authorization to issue shares was granted by the shareholders for
two years and therefore expires in June 1999. However, pursuant to French law,
the June 1997 shareholders authorization will expire on the date of this 1998
Annual Meeting if shareholders do not vote on the issue price of the 53,132
shares left as of the date of this Proxy Statement.
PROPOSAL
In order to keep the 53,132 shares available for subscription under French
law, shareholders are requested to vote on the issue price of the shares. The
Board of Directors recommends to keep the price setting conditions
10
<PAGE>
described below unchanged. The Ninth Resolution sets forth the full text of
the shareholders action to which this Proposal relates.
PROPOSAL 10
GENERAL
Shareholders are also being requested to authorize a capital increase of
165,000 shares reserved for issuance under the IESPP. The subscription of the
shares would be limited to employees of Business Objects S.A. and the
subsidiaries in which it owns directly or indirectly at least 50% of the
voting rights.
PROPOSAL
The Board proposes to waive the preferential subscription right granted to
shareholders pursuant to French law and to reserve the 165,000 new shares of
FF 1 nominal value each to the Business Objects S.A. Employee Benefits Trust.
The authorization to issue an additional 165,000 shares under the IESPP
would be granted for a period of two years from the date of the 1998 Annual
Meeting and would therefore expire in June 2000. The aggregate number of
shares available for subscription under the IESPP, including the 53,132 shares
referred to under Proposal 9, would be 218,132 if Proposals 9 and 10 are
approved. The Tenth Resolution sets forth the full text of the shareholders
action to which this Proposal relates.
ISSUE PRICE OF SHARES
The Board of Directors will determine the issue price of these shares in
accordance with the terms and conditions of the IESPP described below.
DILUTIVE EFFECT
In accordance with French law, set forth below is an analysis of the
dilutive effect of the issuance of the 165,000 shares mentioned above and the
53,132 shares referred to in Proposal 9, based on the unconsolidated equity of
Business Objects S.A.
In the event that none of the warrants to purchase 60,000 shares issued in
June 1995 and June 1997 to certain Directors of the Company, which have not
been exercised as of the date of this Proxy Statement, are exercised, and
assuming an issue price per share of FF92, a shareholder who owns 1% of the
current outstanding shares of the Company will have, after the completion of
the capital increase, his percentage ownership changed to 0.9873%. If warrants
to purchase all of the 60,000 shares already issued were exercised, such
shareholder would have his percentage ownership changed to 0.9838%.
In each of the above-mentioned situations, a shareholder's percentage
interest in equity would decrease in the same proportion. Assuming an issue
price per share equal to FF92, such shareholder's portion of the equity
capital per share, which was FF16.81 at December 31, 1997, would change to
FF17.78 per share (before taking into account the assumed exercise of the
60,000 share warrants already issued and any shares issued subsequent to
December 31, 1997).
SUMMARY OF THE 1995 INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
Purpose. The purpose of the IESPP is to attract and retain the best
available personnel for positions of substantial responsibility, to provide
additional incentive to employees and to promote the success of the Company's
business.
11
<PAGE>
Administration. The Board of Directors administers the IESPP. Subject to the
other provisions of the IESPP, the Board has full and exclusive authority to
construe, interpret and apply the terms of the IESPP, and to determine
eligibility.
Eligibility. Any employee of the Company or a subsidiary designated by the
Board of Directors on a given enrollment date is eligible to participate in the
IESPP.
Participation. An eligible employee may become a participant in the IESPP by
completing a subscription agreement authorizing payroll deductions and filing
it with the Company or a designated subsidiary prior to the applicable
enrollment date.
Payroll Deductions. At the time a participant files his or her participation
agreement, he or she elects to have payroll deductions made on each pay day
during the offering period in an amount not to exceed 10% of the compensation
which he or she receives on each pay day during the offering period. A
participant may discontinue, or increase or decrease his or her participation
during the offering period by filing a new subscription agreement. No interest
accrues on payroll deductions.
Offering Periods. The offering period is a period of approximately six
months, commencing on the first trading day on or after April 1 and terminating
on the last trading day in the period ending September 30, or commencing on the
first trading day on or after October 1 and terminating on the last trading day
in the period ending March 31.
Purchase price. As the ADSs are quoted on the Nasdaq National Market, the
issue price of one share is equal to eighty five percent (85%) of the lowest
closing sales price for such ADS (or the closing bid, if no sales were
registered) as quoted on such market (or the exchange with the greatest volume
of trading ADSs) on the last trading day prior to the first day of the offering
period and on the last trading day of the offering period, as reported in The
Wall Street Journal or such other source the Board will deem reliable. When the
issue price of one share determined pursuant to the foregoing price-setting
conditions is in U.S. dollars, the issue price of one share is the exchange
value in French francs of the issue price of one share in U.S. dollars
calculated on the basis of the noon buying rate on the last trading day of an
offering period as reported by the Federal Reserve Bank in New York (expressed
in French francs for one U.S. dollar).
Withdrawal; Termination of Employment. A participant may withdraw all but not
less than all the payroll deductions credited to his or her account at any time
prior to the exercise date. A participant's withdrawal from an offering period
has no effect on his or her eligibility to participate in any succeeding
offering period. Upon a participant ceasing to be an employee for any reason,
he or she is deemed to have elected to withdraw from the IESPP and the payroll
deductions not yet used to exercise the option are returned to such
participant.
TAX INFORMATION
The IESPP, and the right of participants to make purchases thereunder, is
intended to qualify under the provisions of Section 423 of the Code.
Under these provisions, no income will be taxable to a participant until the
shares purchased under the IESPP are sold or otherwise disposed of. Upon sale
or other disposition of the shares, the participant will generally be subject
to tax and the amount of the tax will depend upon the holding period. If the
shares are sold or otherwise disposed of more than two years from the first day
of the offering period and more than one year from the date of the shares are
purchased, the participant will recognize ordinary income measured as the
lesser of (a) the excess of the fair market value of the shares at the time of
such sale or disposition over the purchase price, or (b) an amount equal to 15%
of the fair market value of the shares as of the first day of the offering
period. Any additional gain will be treated as long term capital gain. If the
shares are sold or otherwise disposed of before the expiration of these holding
periods, the participant will recognize ordinary income generally measured as
the excess of the fair market value of the shares on the date the shares are
purchased over the
12
<PAGE>
purchase price. Any additional gain or loss of such sale or disposition will be
long term or short term capital gain or loss, depending on the holding period.
Under current French tax regulations, the Company is not entitled to a
deduction for ordinary income recognized by participants upon a sale or
disposition of shares prior to the expiration of the holding period(s)
described above.
THE FOREGOING IS ONLY A SUMMARY OF THE EFFECT OF FEDERAL INCOME TAXATION UPON
THE PARTICIPANT AND THE COMPANY WITH RESPECT TO THE SHARES PURCHASED UNDER THE
PURCHASE PLAN. REFERENCE SHOULD BE MADE TO THE APPLICABLE PROVISIONS OF THE
CODE. IN ADDITION, THE SUMMARY DOES NOT DISCUSS THE TAX CONSEQUENCES OF A
PARTICIPANT'S DEATH OR THE INCOME TAX LAWS OF ANY STATE OR FOREIGN COUNTRY IN
WHICH THE PARTICIPANT MAY RESIDE.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RESOLUTIONS TO WHICH THESE
PROPOSALS RELATE
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<PAGE>
PROPOSALS 11 THROUGH 14
AUTHORIZATIONS TO ISSUE SECURITIES
GENERAL
Under applicable French corporate law, shareholders must pre-approve the
issuance of securities that provide, or may provide, access to the share
capital of a corporation. Such approval may be given with respect to a
specific transaction or the authority to issue such securities may be
delegated to the board of directors who may then issue without further
shareholder action subject, in certain cases, to shareholders' preferential
subscription right. A "preferential subscription right" is a statutory pre-
emptive right of a shareholder to subscribe to purchase a pro rata portion of
additional securities being issued. The right is transferable by a shareholder
during the subscription period separate from the shares upon which the right
was issued. This right may be waived automatically by law or by consent of the
shareholders depending on the securities being issued.
Proposals 11 through 14 seek to delegate to the Board of Directors the full
authority to effect, at its discretion, various securities issuances. The
requested authorizations are intended to enable the Board of Directors to
issue one or more types of securities in response to the Company's funding and
development needs.
LIMITATIONS ON ISSUANCES
Pursuant to Proposals 11 through 13, the Board of Directors proposes that it
be delegated authority to issue new securities having an aggregate nominal
value of up to FF 15,000,000 (corresponding to 15,000,000 shares). Where the
transaction involves the issuance of securities which do not themselves
represent a right to participate in the share capital of the Company but are
convertible into or exchangeable or redeemable for securities with such
rights, the FF 15,000,000 limit applies to the underlying securities providing
the right to participate in share capital.
As part of the FF 15,000,000 limit, shareholders are requested to set
specific limits applicable to the following securities:
(a) a limit of FF 1 for preferred shares (shares having preferred
dividend rights and no voting rights) and "investment certificates"
(shares having voting rights only). Given the complexity of these
two types of securities, the Board of Directors recommends that
these types of securities not be issued.
(b) A limit of FF 10,000,000 par value applicable to the issuance of
debt securities convertible into equity securities or redeemable
with equity securities of the Company.
(c) A limit of FF 10,000,000 par value applicable to the issuance of
debt securities with warrants to purchase equity securities
("Obligations a Bons de Sourscription d'Actions" or "OBSA").
PROPOSAL 11
AUTHORIZATION TO ISSUE SECURITIES GIVING IMMEDIATE OR DEFERRED ACCESS TO THE
SHARE CAPITAL, WITH PREFERENTIAL SUBSCRIPTION RIGHTS
GENERAL
Under this Proposal, the Board of Directors will be granted the right to
issue, on one or more occasions, all types of securities giving immediate or
deferred access to a portion of the share capital. Securities which could be
issued within the authority granted by this Proposal include ordinary shares,
warrants, debt securities or other securities which are convertible into,
exercisable for or redeemable with equity securities of the Company.
Owners of ordinary shares would have preferential subscription rights with
respect to any securities proposed to be issued under the authority sought in
Proposal 11. While shareholders would have the right to
14
<PAGE>
purchase convertible or similar securities in the original issuance, they
would have no right with respect to shares issuable upon later conversion,
exercise or redemption of such convertible or similar securities.
PROPOSAL
At the Annual Meeting, shareholders are being asked to: (i) delegate to the
Board of Directors the authority to issue securities which immediately
participate in, or may in the future participate in, the share capital of the
Company; and (ii) to waive preferential subscription rights with respect to
any securities that may later be issued upon exercise, conversion, redemption
or other exchange of the securites referred to in clause (i). The Eleventh
Resolution sets forth the full text of the shareholder action to which this
Proposal relates.
ISSUE PRICE
The issue price of the securities issued within the authority granted
pursuant to Proposal 11 will be determined by the Board of Directors in a way
that the sum paid or which may be later paid to the Company for each of the
shares issued or to be issued be at least equal to the nominal value of the
shares of the Company.
The authorization under Proposal 11 would be valid for a period for twenty-
six months following the Annual Meeting.
PROPOSAL 12
AUTHORIZATION TO ISSUE SECURITIES HAVING IMMEDIATE OR DEFERREDPARTICIPATION IN
THE SHARE CAPITAL, WITHOUT PREFERENTIAL SUBSCRIPTION RIGHTS
GENERAL
Under this Proposal, the Board of Directors will be granted the right to
issue, on one or more occasions, all types of securities that immediately or
in the future participate in the share capital of the Company. As with
Proposal 11, securities which could be issued within the authority granted by
this proposal include ordinary shares, warrants, debt securities or other
securities which are convertible into, exercisable for or redeemable with
equity securities of the Company.
In contrast to Proposal 11, under Proposal 12 owners of ordinary shares
would not have preferential subscription rights with respect to any securities
proposed to be issued under the authority sought in Proposal 12 or the shares
issuable upon later conversion, or redemption of convertible or similar
securities. The Board of Directors may, in its discretion, however, provide
priority rights with respect to issuances covered by Proposal 12. A "priority
right" is a right granted at the discretion of the Board of Directors to
owners of ordinary shares to purchase their pro rata portion of new securities
before such securities are offered to non-shareholders. Unlike the
preferential subscription right, a priority right is not a statutory right and
is not transferable during the subscription period.
PROPOSAL
At the Annual Meeting, shareholders are being asked to: (i) delegate to the
Board of Directors the authority to issue securities which immediately
participate in, or may in the future participate in, the share capital of the
Company, (ii) to waive preferential subscription rights with respect to the
issuance of any securities issued by the Company with the authority described
in clause (i); and (iii) to further waive preferential subscription rights
with respect to securities that may later be issued upon exercise, conversion,
redemption or other exchange of the securities referred to in clause (i). The
Twelfth Resolution sets forth the full text of the shareholder action to which
this Proposal relates.
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ISSUE PRICE
The issue price for securities issued under the authority of Proposal 12
would be set in accordance with applicable law, and would be at least equal to
the fair market value of the stock during ten consecutive days occurring
within the twenty trading day period preceding the date of issuance.
The authorization under Proposal 12 would be valid for a period of twenty-
six months following the Annual Meeting.
PROPOSAL 13
AUTHORIZATION TO ISSUE SHARES OF THE COMPANY IN CONNECTION WITH SECURITIES
ISSUANCES BY GROUP SUBSIDIARIES
Proposals 11 and 12 related to issuances of securities directly by the
Company. The Board of Directors believes that there may be circumstances where
it would be in the best interest of the Company if a subsidiary of the Company
were able to issue securities of the Company. Such issuances by a subsidiary
may include the issuance of warrants or other rights to purchase securities of
the Company. Proposal 13 therefore seeks to have shareholders delegate to the
Board of Directors full authority to issue equity securities of the Company
following the issuance of securities by Company subsidiaries.
PROPOSAL
At the Annual Meeting, shareholders are being asked to delegate to the Board
of Directors the authority to issue securities of the Company in connection
with issuances of securities by any Company subsidiary which will
automatically entail a waiver by shareholders of their preferential right to
subscribe to the shares of the Company that may be issued as described above.
The Thirteenth Resolution sets forth the full text of the shareholder action
to which this Proposal relates.
ISSUE PRICE
The exercise or conversion price of any securities issued under the
authority of Proposal 13 would be set in accordance with applicable law, and
would be at least equal to the fair market value of the stock during ten
consecutive days occurring within the twenty trading day period preceding the
date of issuance.
The authorization under Proposal 13 will be valid for a period of two years
following the Annual Meeting.
PROPOSAL 14
AUTHORIZATION TO INCREASE SHARE CAPITAL DURING THE PENDENCY OF A TENDER
EXCHANGE OFFER ON THE SECURITIES OF THE COMPANY
Under applicable law, the authority granted to the Board of Directors
pursuant to Proposals 11 and 12 is suspended during the pendancy of a tender
or exchange offer directed toward securities of the Company unless the
shareholders specifically provide that such authority shall remain in effect
during such events. The Board of Directors believes that it is in the best
interest of the Company for the authority provided to increase the share
capital of the Company by the resolutions described in Proposals 11 and 12 to
remain unaffected by a tender or exchange offer.
At the Annual Meeting, shareholders are being asked to authorize an increase
of share capital within the authority delegated by Proposals 11 and 12 during
the pendancy of a tender or exchange offer for shares of the Company's stock.
The Fourteenth Resolution sets forth the full text of the shareholder action
to which this proposal relates.
16
<PAGE>
In accordance with French corporate law, the authorization provided by
Proposal 13 will be valid only until the annual shareholders meeting called to
approve the financial statements for the fiscal year ended December 31, 1998.
The Fourteenth Resolution sets forth the full text of the shareholder action
to which this Proposal relates.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RESOLUTIONS
TO WHICH PROPOSALS 11 THROUGH 14 RELATE
17
<PAGE>
PROPOSAL NO. 15 THROUGH 19
AUTHORIZATIONS TO ISSUE WARRANTS TO CERTAIN DIRECTORS
GENERAL
Pursuant to provisions of French law at the Annual Meeting the shareholders
are being asked to approve the issuance of warrants to purchase shares of the
Company to each of the following Directors of the Company:
PROPOSAL 15: 25,000 shares to Mr. Bernard Charles, subject to the
condition precedent that shareholders approve resolution
n(degrees)5,
PROPOSAL 16: 15,000 shares to Mr. Albert Eisenstat subject to the
condition precedent that shareholders approve resolution
n(degrees)4,
PROPOSAL 17: 15,000 shares to Mr. Arnold Silverman subject to the
condition precedent that shareholders approve resolution
n(degrees)3,
PROPOSAL 18: 10,000 shares to Mr. Philippe Claude, and
PROPOSAL 19: 5,000 shares to Mr. Vincent Worms.
These proposals require that shareholders waive their preferential
subscription right related to such warrants and to the shares which may be
issued upon exercise of such warrants.
EXERCISE PRICE
The exercise price per share will be equal to the estimated market value of
one share of the Company, determined using the last closing sale price of the
Company's ADSs on the Nasdaq National Market on the last trading day prior to
the date of the Annual Meeting, multiplied by the noon buying rate for French
Francs as quoted by the Federal Reserve Bank of New York on such date.
AUDITORS REPORT
The issuance of warrants without payment as consideration may be viewed as a
"special advantage" granted to the recipients within the meaning of French
corporate law. As a result, an independent auditor appointed by the courts,
will consider, in a specific report, the nature and the consequences, if any,
on the situation of the shareholders, of the special advantages granted to the
recipients. The special advantage from which recipients of the warrants would
benefit consists of the implementing of a fixed exercise price per share on
the date of grant which may be lower than the fair market value at the time of
exercise, and the granting of such warrants without payment as consideration.
VESTING AND EXERCISE
For nominees to the Board of Directors being elected or re-elected for a
period of three years at the Annual Meeting, the right to purchase the shares
underlying the warrant will vest annually over three years starting June 18,
1998, and provided that the Director remains in office continuously during
this period.
For Mr. Claude, whose term of office expires in 2000, the right to purchase
the shares underlying the warrant will vest annually over two years starting
June 18, 1998, and provided that he remains in office continuously during this
period.
For Mr. Worms, whose term of office expires in 1999, the right to purchase
the shares underlying the warrant will fully vest on June 18, 1999, and
provided that he remains in office continuously during this period.
In case of termination of office as Director, the holder of the warrant will
be able to exercise the vested warrants as of the date of termination of
office as a Director, for ninety (90) days following the date of such
termination of office.
18
<PAGE>
In the event of a merger or other change of control of the Company, the
holder of the warrant will be notified and given the same information as if he
were a shareholder in order to exercise his right to purchase the shares
underlying the warrant. Moreover, if the total warrants are not vested at such
time, the Board of Directors may accelerate vesting.
The warrants would be exercisable in one or several lots, no later than the
earlier of the two following dates: (i) June 18, 2003, or (ii) in case of
termination of office as a Director, within 90 days of such termination date.
ADJUSTMENTS
In the event that, while the warrants have not been exercised, the Company
should proceed to one of the transactions mentioned below, the rights of the
holder of the share warrants would be preserved pursuant to the conditions
provided for in articles 171 to 174 of Decree n(degrees)67-236 of March 23,
1967, it being specified however that such preservation of rights shall be made
on the basis of the number of shares that such holder would have been entitled
to, had he exercised the vested warrants at the date of the accomplishment of
the transaction concerned.
Such transactions are listed in article L194-5 of the law n(degrees)66-537 of
July 24, 1966 on commercial companies and include:
(e) issuance of securities with shareholders' preferential right of
subscription,
(f) increase in the share capital by incorporation of reserves, profits or
issue premiums,
(g) distribution of reserves in cash or in portfolio securities, or
(h) issuance of securities convertible into shares.
In the event of share capital reduction motivated by losses, the rights of
the holder of the warrant in respect of the number of shares to receive upon
exercise of his warrant will be reduced accordingly, so as if the holder had
been a shareholder from the date of issuance of such warrant whether the
reduction of share capital be carried out by reducing the nominal value of the
shares or by reducing their number.
TRANSFERABILITY
The warrants are not transferable, except to the spouse, a direct descendant
or ascendant or a sibling of the holder.
DILUTIVE EFFECT
In accordance with French law, the following is an analysis of the dilutive
effect of the issuance of the proposed warrants, based on the unconsolidated
equity of Business Objects S.A.
In the event that none of the warrants to purchase 60,000 shares already
issued pursuant to the shareholders meetings held in June 1995 and June 1997
are exercised, and that the 70,000 warrants to be issued are exercised at the
price of FF92 per share, a shareholder holding 1% of the outstanding shares of
the Company will have, after the completion of the capital increase, his
percentage ownership changed to 0,9959%. If all of the warrants to purchase
60,000 shares already issued were exercised, before the exercise of the new
warrants mentioned above, such shareholder would have his percentage ownership
changed to 0.9924%.
In each of the above-mentioned situations, such shareholder's percentage
interest in equity would decrease in the same proportion. Assuming an issue
price per share equal to FF92, such shareholder's portion of the equity capital
per share, which was FF16.81 at December 31, 1997, would change to FF17.13 per
share (before taking into account the assumed exercise of the warrants to
purchase 60,000 shares already issued and any shares issued subsequent to
December 31, 1997).
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OTHER CONSEQUENCES OF ISSUING WARRANTS
Should Shareholders approve the issuance of the proposed warrants, the
Company shall, in accordance with French corporate law, and for as long as any
warrant will be outstanding, refrain from redeeming its share capital and
modifying the allocation of profits.
The Fifteenth, Sixteenth, Seventeenth, Eighteenth and Nineteenth Resolutions
set forth the full text of the shareholder action to which this Proposal
relates.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RESOLUTIONS
TO WHICH THESE PROPOSALS RELATE
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INFORMATION REGARDING NOMINEES, OTHER DIRECTORS AND EXECUTIVE OFFICERS
Set forth below is certain information regarding the nominees for Directors,
each other Director of the Company whose term of office continues after the
Annual Meeting, and each executive officer of the Company.
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
---- --- --------------------------------------------
<C> <C> <S>
NOMINEES
Albert Eisenstat... 67 Consultant and Private Investor. Albert Eisenstat is a
consultant and private investor, and has been since
1993. Mr. Eisenstat was a Director and Executive Vice
President for Corporate Development and Corporate
Secretary of Apple Computer Inc. from 1988 to 1993.
Mr. Eisenstat is a Director of Commercial Metals Co,
Sungard Data Systems, Benham Group of Mutual Funds and
SPL Worldgroup. Mr. Eisenstat joined the Company's
Board of Directors in June 1995, and his term on the
Board of Directors expires at this Annual Meeting.
Arnold Silverman... 59 Consultant and Private Investor. Mr. Silverman is a
consultant and private investor. Mr. Silverman was the
President of ICOT Corporation from 1979 to 1985 and a
Director of Oracle Corporation from 1984 to 1991. Mr.
Silverman is a Director in Times Ten, Luna Information
Systems, Aisys Corporation, Informatica, New Fire,
Softway System, Consensys and Liconix. Mr. Silverman
is the father-in-law of Mr. Liautaud. Mr. Silverman
joined the Company's Board of Directors in February of
1991, and his term on the Board of Directors expires
at this Annual Meeting.
Bernard Charles.... 41 President of Dassault Systemes. Mr. Charles has been
President of Dassault Systemes, a worldwide leader in
computer aided design (CAD) products with revenues of
over $320 million and 1,600 employees since September
1995. From 1988 to September 1995, he was President of
the Research & Development department, one of the
largest CAD/CAM/CAE/PIM development teams in its
market. Mr. Charles graduated as mechanical engineer
from the Ecole Normale Superieure ("ENS") in France.
He currently participates in ongoing research
activities in his field and belongs to the scientific
core of professors of the ENS. Mr. Charles is a
Director of Dassault Systemes S.A, Dassault Systems of
America, Dassault KK Japan, DENEB Inc., Enovia Corp.,
and Solidworks Corp.
OTHER DIRECTORS
Bernard Liautaud... 36 Chairman of the Board, President and Chief Executive
Officer. Mr. Liautaud is a founder of Business Objects
and has served as Chairman of the Board and Chief
Executive Officer of the Company since the Company's
inception in August 1990. Prior to the founding of
Business Objects, Mr. Liautaud was a Sales Marketing
Manager with Oracle France. Mr. Liautaud's term of
office on the Board of Directors expires in 2000. Mr.
Liautaud holds a M.S. in Engineering from Ecole
Centrale de Paris and a M.S. in Engineering Management
from Stanford University. Mr. Liautaud is the son-in-
law of Mr. Silverman, a Director of the Company.
Mr. Liautaud does not hold directorships other than in
Business Objects subsidiaries.
Philippe Claude.... 49 Venture Capitalist. Mr. Claude is a General Partner of
Atlas Venture Fund, L.P., a venture capital firm.
Prior to his nomination as a Director of the Company
in July 1994, Mr. Claude served as a representative of
Paribas Europe Investment V.O.F., a shareholder of the
Company and a member of the Board from 1991 until that
date, and as representative of Atlas Venture Fund, LP,
a shareholder of the Company and a member of the Board
from 1992 until that date. Mr. Claude is a Director of
Ilog S.A., Cosmos Bay S.A., DataMind S.A., a
subsidiary of DataMind Corporation, Spotfire A.B.,
Erli S.A., and Allo Cine S.A. Mr. Claude's term of
office on the Board of Directors expires in 2000.
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
NAME AGE PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
---- --- --------------------------------------------
<C> <C> <S>
Vincent Worms........ 45 Venture Capitalist. Mr. Worms is, since 1982, a
General Partner of Partech International Inc., a
venture capital firm. Prior to his nomination as a
Board member on July 28, 1994, Mr. Vincent Worms
served as a representative of Paribas Europe
Investment V.O.F., a shareholder of the Company a
member of the Board from 1991 until that date. Mr.
Worms is a Director of Visioneer Inc., SangStat
Medical, ConsenSys, Drug Abuse Sciences and
Informatica Corporation. Mr. Worm's term of office
on the Board of Directors expires in 1999.
EXECUTIVE OFFICERS
David Ellett......... 44 Chief Operating Officer. Mr. Ellett joined the
Company in April 1997 as Chief Operating Officer,
responsible for the Company's worldwide field sales
and services operations. Mr. Ellett has more than 16
years of experience in the technology industry, with
a special emphasis in services. Prior to joining
Business Objects, he was corporate vice president at
Oracle, in charge of their worldwide education
business. Prior to Oracle, Mr. Ellett served for 13
years at Electronic Data Systems (EDS).
Clifton Weatherford.. 51 Senior Group Vice President and Chief Financial
Officer. Mr. Weatherford joined the Company in
August 1997 as Chief Financial Officer and is
responsible for the worldwide finance and
administration organization. He has more than 25
years of financial management experience, most
recently as Chief Financial Officer of NETCOM On-
Line Communication Services, Inc. Prior to joining
NETCOM, Mr. Weatherford served as Chief Financial
Officer of Logitech, Inc. He has also held senior
financial positions at Texas Instruments, Applied
Materials, and Tandem Computers.
Alexandre Dayon...... 31 Group Vice President, Product Development. Mr. Dayon
joined the Company in 1990 and is responsible for
all product development, and quality assurance. His
responsibilities include design and specification,
product documentation, third party technical
relationships and platform support extension. He has
a master's degree in computer science from Ecole
Superieure d'Electricite in France.
David Kellogg........ 36 Group Vice President, Corporate Marketing. Mr.
Kellogg joined the Company in May 1995 and is
responsible for corporate marketing at Business
Objects, including product, product line, and
strategic marketing, as well as corporate
communications. Mr. Kellogg has more than 12 years
of experience in the database and software tools
industry. Before joining Business Objects, he was
vice president of marketing at Versant Object
Technology. Prior to that, he held a number of
technical and marketing positions with Ingres
Corporation, concluding his tenure as Director of
product marketing. Mr. Kellogg has dual bachelor's
degrees in geophysics and applied mathematics from
the University of California at Berkeley, and a
master's degree in business administration from
Saint Mary's College.
Lawrence Lieberman... 48 Group Vice President, Corporate Development. Mr.
Lieberman joined the Company in October 1996 and is
in charge of the company's global corporate
development activities, including mergers and
acquisitions, technology licensing, and strategic
initiatives. Mr. Lieberman has more than 15 years of
experience in the software industry, with a special
emphasis on finance, licensing, corporate
investments, planning, and structuring strategic
alliances. Prior to joining Business Objects, Mr.
Lieberman's activities involved senior level
positions at Kaleida Labs (joint venture of Apple
and IBM) and in Apple's Strategic Investment Group.
From 1976-1981, he served as Director of admissions
for the Stanford Business School.
</TABLE>
22
<PAGE>
BOARD MEETINGS AND COMMITTEES
The Board of Directors held a total of seven meetings (including regularly
scheduled and special meetings) during fiscal 1997. Mr. Silverman attended five
meetings out of seven. Mr. Worms attended four meetings out of seven. Mr.
Silverman and Mr. Worms attended each meeting held by the Audit Committee and
Compensation Committee, respectively. No other incumbent Director during the
last fiscal year, while a member of the Board of Directors, attended fewer than
75% of the aggregate of (i) the total number of meetings of the Board of
Directors and (ii) the total number of meetings held by all committees on which
such Director served.
The Board of Directors of the Company has two standing committees: an Audit
Committee and a Compensation Committee. It does not have a nominating committee
or a committee performing the functions of a nominating committee.
The Audit Committee, which currently consists of Messrs. Claude and
Silverman, is responsible for (i) recommending engagement of the Company's
independent auditors, (ii) approving the services performed by such auditors,
(iii) consulting with such auditors and reviewing with them the results of
their examination, (iv) reviewing and approving any material accounting policy
changes affecting the Company's operating results, (v) reviewing the Company's
control procedures and personnel, and (vi) reviewing and evaluating the
Company's accounting principles and its system of internal accounting controls.
The Audit Committee held four meetings during fiscal 1997.
The Compensation Committee, which currently consists of Messrs. Eisenstat and
Worms, is responsible for reviewing the compensation and benefits for the
Company's Chief Executive Officer and other Executive Officers. The
Compensation Committee held one meeting during fiscal 1997. Neither Mr.
Eisenstat nor Mr. Worms are an officer or employee of the Company.
Each of the Committees makes recommendations to the Board of Directors, for
final decision by the Board.
COMPENSATION OF DIRECTORS
With the exception of Mr. Liautaud, Directors received cash remuneration for
serving on the Board of Directors, consisting in fiscal 1997 of fees of
U.S.$3,000 per Board meeting attended and a U.S.$2,000 quarterly retainer.
Directors are also reimbursed for reasonable expenses incurred in attending
Board and Committee meetings.
WARRANTS ISSUED TO CERTAIN DIRECTORS
In October 1993, the Board of Directors, which held a majority of the
Company's shares, approved the issuance of warrants to purchase 30,000 shares
to Mr. Silverman with an exercise price of FF 5.518 per share that vest at a
rate of 25% per year from January 31, 1993. The warrants were issued in April
1994 after formal shareholder approval. The difference between the exercise
price and the estimated fair value of such warrants as determined in October
1993 was immaterial. As of December 31, 1997, all of such warrants were
exercised.
On April 25, 1995, the Board of Directors approved the issuance of warrants
to purchase 12,000 shares to Mr. Eisenstat with an exercise price of FF 72.7875
per share, that vest at a rate of 33.33% per year from June 22, 1995. The
warrants were issued in June 1995 after formal shareholder approval. The
difference between the exercise price and the estimated fair value of such
warrants as determined in April 1995 was immaterial. As of December 31, 1997,
all of such warrants remained outstanding.
On April 28, 1997, the Board of Directors approved the issuance of warrants
to purchase 12,000 shares to each of the following Directors: Mr. Claude, Mr.
Eisenstat, Mr. Silverman and Mr. Worms. These warrants have an exercise price
of FF 55,328 per share, and vest monthly over three years from January 1, 1997.
The warrants were issued in June 1997 after formal shareholder approval. The
difference between the exercise price and the estimated fair value of such
warrants as determined in April 1997 was immaterial. As of December 31, 1997,
all of such warrants were outstanding.
23
<PAGE>
BENEFICIAL SHARE OWNERSHIP BY
PRINCIPAL SHAREHOLDERS AND MANAGEMENT
The following table sets forth the beneficial ownership of American
Depositary Shares or Ordinary Shares (together referred to as the "Shares") of
the Company for the following: (i) each person or entity who is known by the
Company to own beneficially more than 5% of the outstanding Shares of the
Company; (ii) each of the Company's Directors; (iii) the Company's Chief
Executive Officer and each of the officers named in the Summary Compensation
Table hereof; and (iv) all Directors and executive officers of the Company as a
group. Information related to holders of more than 5% of the outstanding Shares
was obtained from Filings made with the SEC pursuant to Sections 13(d) or 13(g)
of the Exchange Act. Information related to Directors and Executive Officers
and Mr. Denis Payre is as of March 16, 1998.
<TABLE>
<CAPTION>
SHARES PERCENTAGE
5% SHAREHOLDERS, DIRECTORS AND OFFICERS BENEFICIALLY OWNED(1) BENEFICIALLY OWNED
- --------------------------------------- --------------------- ------------------
<S> <C> <C>
FMR Corp(2)........................... 1,069,900 6.4%
82 Devonshire Street,
Boston MA 02109
Denis Payre........................... 1,306,533 7.7%
DIRECTORS
Bernard Liautaud(3)................... 1,418,776 8.4%
Philippe Claude(4).................... 7,431 *
Albert Eisenstat(5)................... 15,333 *
Arnold Silverman(6)................... 146,625 *
Vincent Worms(7)...................... 5,333 *
EXECUTIVE OFFICERS
Alexandre Dayon(8).................... 53,000 *
David Ellett(9)....................... 53,948 *
David Kellogg(10)..................... 13,814 *
Lawrence Lieberman(11)................ 6,182 *
Clifton Weatherford................... -- --
All Directors and executive officers
as a group (10 persons).............. 1,720,442 10.1%
</TABLE>
- --------
* Less than 1%.
(1) The number and percentage of shares beneficially owned is determined under
rules of the Securities and Exchange Commission ("SEC"), and the
information is not necessarily indicative of beneficial ownership for any
other purpose. Under such rules, beneficial ownership includes any shares
as to which the individual has sole or shared voting power or investment
power and also any shares which the individual has the right to acquire
within sixty days of March 16 1998 through the exercise of any stock
option or other right. Unless otherwise indicated in the footnotes, each
person has sole voting and investment power (or shares such powers with
his or her spouse) with respect to the shares shown as beneficially owned.
(2) This information was obtained from filings made with the SEC pursuant to
Sections 13(d) or 13(g) of the Exchange Act.
(3) Mr. Liautaud is also Chairman of the Board, President and Chief Executive
Officer of the Company.
(4) Includes 5,332 shares issuable upon the exercise of share warrants
exercisable through May 16, 1998.
(5) Includes 13,332 shares issuable upon the exercise of share warrants
exercisable through May 16, 1998.
(6) Includes 5,332 shares issuable upon the exercise of share warrants
exercisable through May 16, 1998.
(7) Includes 5,332 shares issuable upon the exercise of share warrants
exercisable through May 16, 1998.
(8) Includes 27,268 shares issuable upon the exercise of stock options
exercisable through May 16, 1998.
(9) Includes 50,000 shares issuable upon the exercise of stock options
exercisable through May 16, 1998.
(10) Includes 13,074 shares issuable upon the exercise of stock options
exercisable through May 16, 1998.
(11) Includes 2,499 shares issuable upon the exercise of stock options
exercisable through May 16, 1998.
24
<PAGE>
EXECUTIVE OFFICER COMPENSATION
COMPENSATION TABLES
Summary Compensation Table. The following table shows certain information
concerning the compensation of (i) the Company's Chief Executive Officer, (ii)
the Company's four most highly compensated executive officers other than the
Chief Executive Officer and (iii) two additional persons who served as
Executive Officers during a portion of 1997 and whose compensation in 1997
exceeded $100,000 (collectively, the "Named Executive Officers," for the
fiscal years ended December 31, 1997, 1996 and 1995.
<TABLE>
<CAPTION>
SHARES ALL OTHER
NAME AND FISCAL OTHER ANNUAL UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY (1) BONUS (1) COMPENSATION (1)(2) OPTIONS (#) (1)(3)
------------------ ------ ---------- --------- ------------------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Bernard Liautaud........ 1997 295,435 24,312 24,991 -- 135,554
Chairman, President and 1996 195,312 83,057 30,244 -- --
Chief Executive Officer 1995 142,285 157,184 30,676 -- --
David Ellett (4)........ 1997 202,500 123,733 -- 200,000 --
Chief Operating Officer 1996 -- -- -- -- --
1995 -- -- -- -- --
Alexandre Dayon......... 1997 100,858 20,036 16,698 -- 4,167
Group Vice-President, 1996 85,937 23,803 12,188 25,000 3,336
Product Development 1995 68,337 10,597 12,505 15,000 10,210
David Kellogg........... 1997 91,346 19,549 29,547 70,000(7) 3,806
Group Vice-President, 1996 92,975 44,896 33,007 40,000 3,710
Corporate Marketing 1995 67,739 13,399 11,682 30,000 15,000
Lawrence Lieberman...... 1997 156,250 35,001 -- 80,000(8) --
Group Vice-President, 1996 38,077 -- -- 60,000 --
Corporate Development 1995 -- -- -- -- --
Denis Payre (5)......... 1997 138,549 28,616 7,509 -- --
Chief Operating Officer 1996 195,312 95,361 30,244 -- --
1995 140,281 157,184 30,675 -- --
Robert Verheecke (6).... 1997 100,925 23,995 24,721 -- 2,834
Senior Vice President & 1996 152,586 35,556 53,553 50,000 3,319
Chief Financial Officer 1995 125,356 48,865 23,145 -- --
</TABLE>
- --------
(1) All amounts are stated in U.S. dollars. For executive officers paid in
total or in part in French francs, translation of compensation into U.S.
dollars is made using the average exchange rate for the relevant year.
Executive officers paid in total or in part in French francs are Bernard
Liautaud, Alexandre Dayon, David Kellogg, Denis Payre and Robert
Verheecke. Due to the rise of the exchange rate of the U.S. dollar against
the French franc, the dollar value in this Summary Compensation Table do
not reflect actual compensation raises.
(2) Other annual compensation for Mr. Liautaud includes (i) a company car
allowance of $17,260 in 1997, $22,266, in 1996 and $22,846 in 1995, (ii)
life insurance premiums of $4,573 in 1997, $4,479 in 1996 and $4,596 in
1995, and (iii) unemployment coverage of $3,158 in 1997, $3,499 in 1996
and $3,234 in 1995. Other annual compensation for Mr. Payre includes (i) a
company car allowance of $4,880 in 1997, $22,266, in 1996 and $22,846 in
1995, (ii) life insurance premiums of $1,576 in 1997, $4,479 in 1996 and
$4,596 in 1995 and (iii) unemployment coverage of $1,053 in 1997, $3,499
in 1996 and $3,234 in 1995. Other annual compensation paid to other
executive officers corresponds to company car and housing expenses paid by
the Company on their behalf.
(3) All other compensation for Mr. Liautaud in 1997 corresponds to the portion
paid in 1997 of a total of $200,000 payable as a relocation and cost of
living allowance due to his move from France to California. All other
compensation paid to Mr. Kellogg in 1995 corresponds to a relocation
allowance related to his move to France. All other compensation paid to
other executive officers corresponds to a contingent profit-sharing
program payable to employees of Business Objects S.A in accordance with
French laws.
(4) Mr. David Ellett joined the Company in April 1997.
(5) Mr. Payre resigned as Chief Operating Officer effective April 28, 1997.
(6) Mr. Verheecke resigned as Chief Financial Officer in August 1997.
(7) These options correspond to options to purchase 30,000 shares granted in
1995 and 40,000 shares granted in 1996 which were repriced in 1997.
(8) Includes options to purchase 60,000 shares granted in 1996 and repriced in
1997.
25
<PAGE>
Option Grants in Fiscal 1997. The following table contains information
concerning the grant of stock options to the Named Executive Officers during
fiscal 1997.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (1)
---------------------------------------------------------------- ---------------------
NUMBER OF SECURITIES EXERCISE OR
UNDERLYING OPTIONS % OF TOTAL OPTIONS BASE PRICE EXPIRATION
NAME GRANTED IN FSICAL YEAR GRANTED IN FY ($/SHARE) DATE 5% ($) 10%($)
---- ---------------------- ------------------ ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Bernard Liautaud........ -- -- -- -- -- --
David Ellett............ 200,000 9.2% 9.50 04/28/07 1,194,900 3,028,111
Alexandre Dayon......... -- -- -- -- -- --
David Kellogg........... 70,000(3) 3.2% 7.875 09/02/07 346,678 878,551
Lawrence Lieberman...... 60,000(3) 2.8% 7.88 09/02/07 297,153 753,043
20,000 0.9% 12.63 11/04/07 158,796 402,420
Denis Payre............. -- -- -- -- -- --
Robert Verheecke........ -- -- -- -- -- --
</TABLE>
- --------
(1) In accordance with SEC rules, these columns show gains that might exist
for the respective options over the period of the option terms. This
valuation model is hypothetical. If the stock price does not increase over
the exercise price, compensation to the Named Executive Officer would be
zero.
(2) Represents options that were granted prior to 1997 and repriced on
September 2, 1997.
Aggregated Option Exercises in Fiscal 1997 and Fiscal Year-End Option
Values. The following table sets forth the value of in-the-money options held
by the Named Executive Officers as of December 31, 1997.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE MONEY
SHARES OPTIONS AT FY-END(#) OPTIONS AT FY-END($)(1)
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE (#) REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ------------ ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bernard Liautaud........ -- -- -- -- -- --
Alexandre Dayon......... -- -- 22,801 25,198 20,824 4,802
David Ellett............ -- -- -- 200,000 -- 227,037
Lawrence Lieberman...... -- -- 416 79,584 -- 143,135
David Kellogg........... -- -- 13,074 56,928 31,189 135,807
Denis Payre............. -- -- -- -- -- --
Robert Verheecke........ 76,000 441,464 -- -- -- --
</TABLE>
- --------
(1) These values represent the spread between the respective exercises prices
of outstanding options and the closing price of the Company's ADS on
December 31, 1997. Option prices are set in French Francs, in accordance
with French law, and are converted, for purposes of this table, at the
year-end exchange rate of French franc versus U.S. dollar.
1997 OPTION EXCHANGE PROGRAM
Competition for skilled engineers and other key employees in the software
industry is intense and the use of significant stock options for retention and
motivation of such personnel is widespread in the high technology industry.
The Company's Board of Directors believes that stock options are a critical
component of the compensation offered to promote the long-term retention of
key employees, motivate high levels of performance and recognize employee
contribution to the overall success of the Company. The market price of the
Company's ADSs trading on the Nasdaq National Market decreased substantially
from a high of $55 in May 1996 to a low of $6.75 in the third quarter of 1997.
In light of this substantial decline in the market price, the Board of
Directors believed that the large number of outstanding options with exercise
prices substantially in excess of the then-current market price were no longer
an effective tool to encourage employee retention. A first Option Exchange
26
<PAGE>
Program was implemented in November 1996 (the "1996 Option Exchange"). The 1996
Option Exchange allowed option holders to exchange their out-of-the-money
options for options with an exercise price per share of $20. All officers were
excluded from the 1996 Option Exchange. In consideration for the new lower
option price under the 1996 Option Exchange, participating optionees were
required to give back 10% of the number of the underlying option shares, i.e.,
the number of shares under the new options were equal to only 90% of the number
of shares under the old options.
The Board of Directors approved a second Option Exchange Program on July 28,
1997 (the "1997 Option Exchange"). The 1997 Option Exchange ended on September
2, 1997. All employees, including executive officers and officers, were
eligible to participate in the 1997 Option Exchange, with the exception of the
Chief Executive Officer, Chief Operating Officer and Chief Financial Officer.
Under the 1997 Option Exchange, the eligible optionees were permitted to
exchange one or more of their outstanding options with an exercise price above
$9 ("Old Options") for new options ("New Options") covering a number of shares
equal to the number of unexercised shares underlying the Old Options. Each
exchanged Old Option was cancelled. The exercise price of the New Option was
$7.875, corresponding to the closing price of the ADSs on the Nasdaq National
Market on August 29, 1997. In consideration for the new exercise price, the
number of shares vested under the New Option for the entire twelve months
following the exchange date--September 2, 1997--was determined to be equal to
only 50% of the shares vested under the Old Option as of the exchange date.
Beginning on September 2, 1998, the New Options shall be exercisable to the
same extent as the Old Option would have been, had no exchange taken place. As
a result of these restrictions on vesting, optionees who voluntarily or
unvoluntarily leave the Company prior to September 2, 1998 will not have the
opportunity to exercise their New Options to the same extent as under the Old
Options vesting schedule. Specific exercisability features of New Options
granted to French optionees were provided, in order to eliminate any potential
social security costs under French law arising from the exercise of the New
Options and disposition of underlying shares prior to the expiration of a five-
year period from the date of the Exchange. As a result, New Options granted to
French optionees are not exercisable until the expiration of a two-year period
following the exchange date, at which time the New Option becomes exercisable
to the same extent as the Old Option would have been, had no exchange taken
place. In addition, French optionees may not dispose of the shares before the
expiration of a five-year period following the exchange date.
Options repriced since inception of the Company (1990) for each of the
Company's executive officers at the end of fiscal 1997, are listed in the
following table:
<TABLE>
<CAPTION>
NUMBER OF LENGTH OF ORIGINAL
SECURITIES MARKET PRICE OF EXERCISE NEW OPTION
UNDERLYING STOCK AT TIME OF PRICE AT TIME EXERCISE TERM REMAINING
NAME DATE OPTION REPRICED REPRICING OF REPRICING PRICE AT DATE OF REPRICING
---- -------- --------------- ---------------- ------------- --------- --------------------
<S> <C> <C> <C> <C> <C> <C>
Bernard Liautaud........ -- -- -- -- --
David Ellett............ -- -- -- -- --
Alexandre Dayon......... -- -- -- -- --
David Kellogg........... 09/02/97 25,000 FF47.8406 FF80.706 FF47.8406 7 years 11 months
09/02/97 5,000 FF47.8406 FF114.4947 FF47.8406 8 years, 3 months
09/02/97 30,000 FF47.8406 FF90.9049 FF47.8406 9 years, 0 month
09/02/97 10,000 FF47.8406 FF67.7738 FF47.8406 9 years, 2 months
Lawrence Lieberman...... 09/02/97 60,000 FF47.8406 FF 93.9875 FF47.8406 9 years, 1 month
Denis Payre............. -- -- -- -- --
Robert Verheecke........ -- -- -- -- --
</TABLE>
27
<PAGE>
REPORT OF COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Company's executive pay programs are designed to attract and retain
executives who will contribute to the Company's long-term success, to mesh
executive and shareholders interests through stock option based plans and to
provide a compensation package that recognizes individual contributions and
Company performance.
At this time in the Company's growth, the Committee has determined that the
most effective means of compensation are base salaries and long-term incentives
through the Company's stock option programs.
Base Salary. The base salaries of executive officers are initially determined
by evaluating the responsibilities of the position held and the experience and
performance of the individual, with reference to the competitive marketplace
for executive talent, including a comparison to base salaries for comparable
positions in high growth, technology-based companies of reasonably similar
size. The Committee reviews executive salaries annually and adjusts them as
appropriate to reflect changes in the market conditions and individual
performance and responsibility. The Committee has engaged the services of
outside consultants from time to time to determine appropriate compensation
levels.
Stock Options. Under the Company's Option Plan, stock options may be granted
to executive officers and other employees of the Company. Upon joining the
Company, an individual's initial option grant is based on the individual's
responsibilities and position. The size of stock option awards is based
primarily on an individual's performance and responsibilities. Because of the
competitive nature of the technology industry in which the Company competes,
the Committee believes stock option grants are an effective method of incenting
executives to take a longer term view of the Company's performance and to
ensure that the executive's and the stockholder's interests are in alignment.
Bonus. The bonuses awarded to executive officers are determined based on
achievement of individual and Company performance goals and vary from 0% to 25%
of the base salary if such performance goals are met. The bonus may reach up to
40% of the base salary in the event of complete achievement of personal
objectives and over-achievement of the Company's objectives.
Other. Other elements of executive compensation include Company-wide medical
and life insurance benefits and the ability to defer compensation pursuant to a
401(k) plan. The Company does not currently match contributions under the
401(k) plan. Executive officers employed with the Company in France are
entitled to participate in a profit-sharing plan, which provides for contingent
compensation, based on the Company's achievement of certain revenues and
operating profits targets.
Chief Executive Officer Compensation for 1997
During fiscal 1997, the Chief Executive Officer's compensation was comprised
of a base salary of $295,435, a car allowance of $17,260 and a variable salary
of up to $230,000 if certain performance criteria were met. Variable salary is
a mix of personal and Company objectives. The Company objectives represented
60% of the total bonus paid to the Chief Executive Officer and was based on the
Company's achievement of certain revenues and earnings per share thresholds.
For fiscal 1997, based on objectives achieved, the Compensation Committee
determined that the final amount of the variable compensation to be awarded to
the Chief Executive Officer is $150,000 payable in 1998 after approval by the
Board of Directors. In addition to the above, the Chief Executive Officer is
entitled, due to his move from France to California in the summer of 1997, to a
temporary cost of living allowance, of $200,000, of which $135,000 was paid in
1997, and the remainder will be paid in 1998.
The Company's Chief Executive Officer has not received any other special or
additional compensation other than as described above.
The Committee has considered the potential impact of Section 162(m) of the
Code and the regulations thereunder (the "Section"). The Section disallows a
tax deduction for any publicly-held corporation for individual compensation
exceeding $1 million in any taxable year for any of the Named Executive
Officers,
28
<PAGE>
unless such compensation is performance-based. Since the cash compensation of
each of the Named Executive Officers is below the $1 million threshold and the
Committee believes that any options granted under the Option Plan will meet the
requirements of being performance-based, the Committee believes that the
Section will not reduce the tax deduction available to the Company. The
Company's policy is to qualify, to the extent reasonable, its executive
officers' compensation for deductibility under applicable tax laws. However,
the Committee believes that its primary responsibility is to provide a
compensation program that will attract, retain and reward the executive talent
necessary to the Company's success. Consequently, the Committee recognizes that
the loss of a tax deduction could be necessary in some circumstances.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Albert Eisenstat
Vincent Worms
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In June 1997, the Company loaned $200,000 to one of its executive officers.
The loan is secured by a deed of trust and bears interest at the rate of 6.23%
per annum. Principal and interest are due on July 1, 1999.
COMPENSATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION IN COMPENSATION DECISIONS
The Company's Compensation Committee currently consists of Messrs. Eisenstat
and Worms. No interlocking relationship exists between any member of the
Company's Board of Directors or Compensation Committee and any member of the
Board of Directors or compensation committee of any other Company, nor has any
such interlocking relationship existed in the past. No member of the
Compensation Committee is or was formerly an officer or an employee of the
Company or its subsidiaries.
French law prohibits the Company from entering into indemnification
agreements with its Directors providing for limitations on personal liability
for damages and other costs and expenses that may be incurred by Directors and
officers arising out of or related to acts or omissions in such capacity.
French law also prohibits the articles of association of the Company from
providing for limitation of liability of a member of the Board of Directors.
These prohibitions may adversely affect the ability of the Company to attract
and retain Directors. Generally, under French law, Directors and officers will
not be held personally liable for decisions taken diligently and in the
corporate interest of the Company.
The Company has entered into an agreement with each of its Directors, its
Chairman, President and Chief Executive Officer, its Chief Operating Officer,
its Chief Financial Officer and other members of senior management designated
by the Board of Directors pursuant to which the Company agreed to contract for
and maintain liability insurance against liabilities which may be incurred by
such persons in their respective capacities, including liabilities which may be
incurred under the U.S. federal and state securities laws, subject to certain
limitations. The Company believes that entering into such agreement and
maintaining appropriate liability insurance for its Directors and officers will
assist the Company in attracting and retaining qualified individuals to serve
as Directors and officers.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act ("Section 16(a)") requires the Company's
executive officers and Directors, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file reports of
ownership on Form 3 and changes in ownership on Form 4 or Form 5 with the
Securities and Exchange Commission (the "SEC") and the National Association of
Securities Dealers, Inc. Such officers,
29
<PAGE>
Directors and ten-percent stockholders are also required by SEC rules to
furnish the Company with copies of all such forms that they file.
Based solely on its review of the copies of such forms received by the
Company, or written representations from certain reporting persons that no
Forms 5 were required for such persons, the Company believes that during fiscal
1997 all Section 16(a) filing requirements applicable to its officers,
Directors and ten-percent stockholders were complied with.
COMPARISON OF TOTAL CUMULATIVE SHAREHOLDER RETURN
The following graph sets forth the Company's total cumulative shareholder
return as compared to the NASDAQ Market Index and the MG Group Index. The total
shareholder return assumes U.S.$100 invested on September 22, 1994 in shares of
the Company, the Nasdaq Index and the MG Group Index. Total return assumes
reinvestment of dividends. Historical stock price performance is not
necessarily indicative of future stock price performance.
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN AMONG
BUSINESS OBJECTS SA, NASDAQ MARKET INDEX
AND MG GROUP INDEX
[PERFORMANCE GRAPH APPEARS HERE]
- ---------------------------FISCAL YEAR ENDING-----------------------------
COMPANY 1994 1994 1995 1996 1997
BUSINESS OBJECTS S A 100.00 124.58 163.98 91.53 70.34
MG GROUP INDEX 100.00 107.03 159.22 197.91 245.21
NASDAQ MARKET INDEX 100.00 97.99 127.10 157.94 193.20
ASSUMES $100 INVESTED ON SEPT 23, 1994
ASSUMES DIVIDEND REINVESTED
FISCAL YEAR ENDING DEC. 31, 1997
30
<PAGE>
REPORT OF THE BOARD OF DIRECTORS ON THE FINANCIAL STATEMENTS OF THE COMPANY
DURING THE FISCAL YEAR 1997
In accordance with French corporate law, the following discussion relates to
the UNCONSOLIDATED ACCOUNTS OF BUSINESS OBJECTS S.A. (THE "COMPANY"), the
French parent company of the Business Objects group, as well as THE
CONSOLIDATED ACCOUNTS OF BUSINESS OBJECTS S.A. AND ITS SUBSIDIARIES (THE
"GROUP"). These accounts are prepared in accordance with FRENCH GAAP.
Consolidated accounts in US dollars prepared in accordance with U.S. GAAP are
not included in this report. For a discussion of the consolidated financial
statements prepared in accordance with U.S. GAAP, please see the enclosed
Annual Report.
1. RESULTS OF THE GROUP DURING THE FISCAL YEAR 1997
Consolidated financial data discussed below are derived from the consolidated
financial statements prepared in French francs in accordance with French GAAP,
audited by Ernst & Young and Mr. Pierre Dupuy, independent auditors.
TOTAL OPERATING REVENUES increased from FF436 million in 1996 to FF667
million in 1997, representing an increase of 53%. The Group generated
approximately 69% of its total revenues from licenses of BusinessObjects. The
remaining portion of the Group's total revenue was comprised of revenues from
services related to licenses of BusinessObjects.
LICENSE FEES increased from FF330 million in 1996 to FF458 million in 1997.
This increase in license fees reflected increased unit licenses of the
Company's existing software products and the expansion of the Company's product
offerings, including an increase in the number of relational databases
supported by the Company's software. The increase in license fees also resulted
from growth in all major geographic areas. License fees in the United States
grew 11% from 1996 to 1997, and represented 31% of the Group's total license
fees in 1997, as compared to 34% in 1996. License fees in Europe grew 25% from
1996 to 1997, and represented 62% of the Group's total license revenue, as
compared to 59% in 1996. License fees in Asia grew 57% from 1996 to 1997, and
represented 7% of the Group's total license fees in 1997, as compared to 6% in
1996.
REVENUES FROM SERVICES consist of consulting revenue, training revenue and
maintenance revenue. Revenues from services increased from FF106 million in
1996 to 209 million in 1997, representing respectively 24% and 31% of the
Group's total revenues. Revenues from services in 1997 increased 97% over the
prior year as compared with an increase of 80% during 1996. The increase in
revenues from services during both years was due primarily to increases in
maintenance revenues related to increases in the Company's installed customer
base and the renewal of support contracts, and increases in training and
consulting revenues.
TOTAL OPERATING EXPENSES increased from FF348 million in 1996 to FF545
million in 1997, representing respectively 80% and 82% of the total revenues.
INCOME FROM OPERATIONS decreased from FF37 million in 1996 to FF24 million in
1997, representing a decrease of 35%.
NET OTHER INCOME increased from FF9 million in 1996 to FF10 million in 1997.
The Company generated FF6 million-interest income in 1997, as compared to FF8
million in 1996. The decrease in interest income was due to a lower cash
balance and to lower interest rates available to the Company. Net exchange
gains totaled FF3.4 million in 1997, as compared to FF1.5 million in 1996. The
Company operates on a multinational basis and a significant portion of its
business is conducted in currencies other than the French franc, mainly the US
dollar, British pound sterling, German mark and Japanese yen. To date, the
Company has not undertaken hedging transactions to cover its currency
exposures.
31
<PAGE>
NET INCOME, after provision for income taxes of FF16 million, decreased from
FF27 million in 1996 to FF17 million in 1997, representing a decrease of 37%.
CONSOLIDATED BALANCE SHEET. Total assets increased from FF423 million in 1996
to FF565 million in 1997. This increase was primarily due to increase in
account receivable, which was generally consistent with the growth in revenues.
It was also due, to a lesser extent, to the increase in fixed assets, as the
Company continued investing in office equipment, hardware, software and
leasehold improvements. The increase in liabilities and shareholders' equity
was primarily due to an increase in deferred revenue and an increase in
retained earnings.
2. UNCONSOLIDATED RESULTS OF BUSINESS OBJECTS S.A. DURING THE FISCAL YEAR 1997
The financial year 1997 is the seventh financial year of the Company. In
1997, the Company recorded a 17% growth in revenue from products. Such revenues
in 1997, which consist of 67% license revenues and 33% services, reached FF267
million or FF160 million exclusive of sales to subsidiaries. In 1996, total
revenues were FF228 million or FF146 million exclusive of sales to
subsidiaries. Other revenues, including operating subsidies and cost transfers
(mainly to subsidiaries), increased operating revenues to a total amount of
FF277 million in 1997 as compared to FF231 million in 1996. Income from
operating activities amounted to FF10 million in 1997, as compared to FF44
million in 1996. Financial income amounted to FF11 million in 1997, as compared
to FF10.7 in 1996. Income before taxes and exceptional items amounted to FF21
million in 1997, as compared to FF55 million in 1996. Exceptional charges were
FF0.165 million in 1997, compared to FF21 million in 1996. Pre-tax profits for
1997 amounted to FF17 million, as compared to FF30 million in 1996, reflecting
a decrease of 45%. Corporate income tax amounted to FF8 million and after-tax
profits were therefore FF9 million, as compared to FF20 million in 1996.
32
<PAGE>
BUSINESS OBJECTS S.A.
FIVE YEAR SUMMARY FINANCIAL INFORMATION
(IN FRENCH FRANCS)
<TABLE>
<CAPTION>
1993 1994 1995 1996 1997
---------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
1. CAPITAL AT YEAR-END
Capital stock, par
value.................. 12,155,750 15,672,902 15,677,662 16,173,513 16,492,297
Number of ordinary
shares issued.......... 12,155,750 15,672,902 15,677,662 16,173,513 16,492,297
Number of preferred
shares
Maximum number of shares
to be created in the
future
by conversion of bonds
by exercise of
subscription rights.... 808,455 1,200,272 1,825,221 1,993,101 2,534,628
2. OPERATIONS AND INCOME
FOR THE YEAR
Total product revenues.. 50,915,837 98,416,577 167,644,564 227,845,192 267,371,015
Income before taxes,
profit sharing and
amortization and
provisions............. 8,553,087 23,822,326 57,008,428 37,279,585 29,190,204
Income tax benefit
(provision)............ (2,478,260) 712,773 (14,938,663) (10,045,109) (7,625,652)
Required profit
sharing................ 0 1,312,178 6,306,886 3,460,845 4,415,572
Income after taxes,
profit sharing and
amortization and
provisions............. 5,620,843 19,604,044 29,829,842 20,412,912 9,105,875
Dividends distributed... 0 0 0 0 0
3. INCOME PER ISSUED
SHARE
Income after taxes and
profit sharing but
before amortization and
provisions............. 0.50 1.48 2.28 1.47 1.04
Income after taxes,
profit sharing and
amortization and
provisions............. 0.46 1.25 1.90 1.26 0.55
Dividends distributed
per share.............. 0 0 0 0 0
4. PERSONNEL
Average number of
employees.............. 67 105 157 215 303
Total payroll and social
charges................ 18,369,643 30,477,203 50,487,712 69,866,129 88,609,212
Total social benefits... 8,538,760 14,084,056 22,723,746 31,708,537 41,610,171
</TABLE>
33
<PAGE>
BUSINESS OBJECTS S.A.
UNCONSOLIDATED STATEMENT OF OPERATIONS
(IN FRENCH FRANCS)
<TABLE>
<CAPTION>
1997 1996
------------ ------------
<S> <C> <C>
Manuals and packages................................ 3,239,632 4,354,574
Product revenues.................................... 264,131,383 223,490,618
Total product revenues.............................. 267,371,015 227,845,192
Other revenue....................................... 9,653,994 3,047,015
------------ ------------
Total Operating Revenue............................. 277,025,009 230,892,207
Purchases of goods for resale....................... (5,728,614) (6,515,699)
Change in inventory................................. 1,477,439 687,344
Other outside purchases............................. (114,122,955) (67,863,804)
Taxes............................................... (5,109,479) (3,977,274)
Salaries............................................ (88,609,212) (69,866,129)
Social charges...................................... (41,610,171) (31,708,537)
Depreciation & amortization......................... (7,618,196) (4,563,987)
Reserves against current assets..................... (2,885,667) (1,547,727)
Other expenses...................................... (2,664,073) (1,113,736)
------------ ------------
Total Operating Expenses............................ (266,870,928) (186,469,549)
------------ ------------
Operating Income.................................... 10,154,081 44,422,658
Interest income..................................... 7,271,295 11,811,158
Exchange rate gains................................. 7,688,797 544,269
------------ ------------
Financial Revenues.................................. 14,960,092 12,355,427
Reserve for exchange rate losses.................... (2,349,431) (478,260)
Interest expense.................................... (27,695) (446,830)
Exchange rate losses................................ (1,511,669) (634,398)
Bank fees...........................................
------------ ------------
Financial Expenses.................................. (3,888,795) (1,559,488)
------------ ------------
Income From Financial Activities.................... 11,071,297 10,795,939
Income Before Tax and Exceptional Items............. 21,225,378 55,218,597
Exceptional income.................................. 86,746 164,996
Exceptional expenses................................ (165,025) (21,464,727)
------------ ------------
Net Exceptional Income (Expense).................... (78,279) (21,299,731)
Profit sharing...................................... (4,415,572) (3,460,845)
------------ ------------
Net Income Before Tax............................... 16,731,527 30,458,021
Income tax benefit (provision)...................... (7,625,652) (10,045,109)
------------ ------------
Net Income.......................................... 9,105,875 20,412,912
</TABLE>
34
<PAGE>
BUSINESS OBJECTS S.A.
UNCONSOLIDATED BALANCE SHEET
(IN FRENCH FRANCS)
<TABLE>
<CAPTION>
ASSETS
1997 1996
GROSS PROVISIONS NET NET
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Intangible fixed assets....... 8,757,366 (3,542,691) 5,214,675 3,781,510
Tangible fixed assets......... 31,042,119 (10,697,081) 20,345,038 15,990,178
Equity in subsidiaries........ 92,233,952 (168,730) 92,065,222 13,176,096
Loans to subsidiaries......... 37,831,188 37,831,188 23,697,190
Deposits...................... 644,578 644 578 748,459
----------- ----------- ----------- -----------
Total Long Term Assets........ 170,509,203 (1,440,502) 156,100,701 57,393,433
Inventory..................... 2,929,305 (656,511) 2,272,794 1,198,671
Prepaid expenses.............. 10,227,685 10,227,685 4,952,164
Trade accounts receivable..... 147,433,618 (3,235,601) 144,198,017 115,396,154
Other accounts receivable..... 15,488,006 15,488,006 13,724,788
Marketable Securities......... 55,489,544 55,489,544 133,915,055
Cash & Cash equivalents....... 16,426,088 16,426,088 16,755,936
----------- ----------- ----------- -----------
Total Current Assets.......... 247,994,246 (3,892,112) 244,102,134 285,942,768
Unrealized exchange losses.... 1,536,022 1,536,022 855,397
----------- ----------- ----------- -----------
Total Assets.................. 420,039,471 (18,300,614) 401,738,857 344,191,598
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES & SHAREHOLDERS' EQUITY
1997 1996
----------- -----------
<S> <C> <C>
Capital stock, par value................................ 16,492,297 16,173,513
Paid-in capital......................................... 169,611,019 159,691,648
Legal reserves.......................................... 1,638,502 1,608,275
Prior years' retained earnings.......................... 78,715,394 58,332,709
Current year net income................................. 9,105,875 20,412,912
Investment grant........................................ 4,000,000 4,000,000
----------- -----------
Total Shareholders' Equity.............................. 279,563,087 260,219,057
Conditional loans....................................... 0 0
Provision for unrealized exchange losses................ 3,864,948 2,617,226
Bank overdrafts......................................... 2,774,513 0
Accounts payable........................................ 54,425,138 20,969,005
Accrued wages and taxes................................. 39,071,628 32,564,121
Other payables.......................................... 2,173,993 10,033,034
----------- -----------
Total Liabilities....................................... 102,310,220 66,183,386
Deferred revenue........................................ 18,209,969 16,921,336
Unrealized exchange gains............................... 1,655,581 868,001
----------- -----------
Total Liabilities & Shareholders' Equity................ 401,738,857 344,191,780
</TABLE>
35
<PAGE>
TEXT OF RESOLUTIONS SUBMITTED FOR APPROVAL
FIRST RESOLUTION
This resolution is to approve the financial statements for the 1997 fiscal
year:
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for ordinary general meetings,
WHEREAS, this general meeting has acknowledged the annual management report
of the Board of Directors on the activity and the situation of the Company
during the fiscal year ended December 31, 1997, as well as the annual report of
the statutory auditors on the performance of their duties during this fiscal
year,
RESOLVED, that the financial statements of the fiscal year ended December 31,
1997, as they have been presented, the expenses referred to in article 39-4 of
the French Tax Code amounting to FF380,906, as well as the transactions
indicated in the above-mentioned financial statements and summarized in the
above-mentioned reports are approved hereby.
SECOND RESOLUTION
This resolution is to allocate the profits for the 1997 fiscal year:
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for ordinary general meetings,
WHEREAS, it has been noted that the profits for the fiscal year ended
December 31, 1997 amount to FF9,105,875.46,
RESOLVED, that the above-mentioned profits be allocated:
--up to the limit of FF39,263.90, to the legal reserve which will amount,
after allocation, to FF1,677,766.30.
--the balance of FF9,066,611.56, to be carried forward, the balance of the
profits account carried forward thus amounting after allocation, to
FF87,782,005.38.
Pursuant to the law, it is reminded hereby that no dividends were distributed
with respect to the last three fiscal years.
THIRD RESOLUTION
This resolution is to approve the re-election of Mr. Arnold Silverman as a
Director:
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for ordinary general meetings,
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors and noted that the term of office of Mr. Arnold Silverman, Director,
expires at the end of this general meeting,
RESOLVED, that Mr. Arnold Silverman is re-elected hereby for a period of
three years expiring at the end of the ordinary general meeting which will
deliberate upon the financial statements of the fiscal year ending December 31,
2000.
FOURTH RESOLUTION
This resolution is to approve the re-election of Mr. Albert Eisenstat as a
Director:
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for ordinary general meetings,
36
<PAGE>
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors and noted that the term of office of Mr. Albert Eisenstat, Director,
expires at the end of this general meeting,
RESOLVED, that Mr. Albert Eisenstat is re-elected hereby for a period of
three years expiring at the end of the ordinary general meeting which will
deliberate upon the financial statements of the fiscal year ending December 31,
2000.
FIFTH RESOLUTION
This resolution is to elect Mr. Bernard Charles as a Director:
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for ordinary general meetings,
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors,
RESOLVED, that Mr. Bernard Charles is elected hereby Director as from June
19, 1998, to hold office for a term of three years expiring at the end of the
ordinary general meeting which will deliberate upon the financial statements of
the fiscal year ending December 31, 2000.
SIXTH RESOLUTION
This resolution is to acknowledge that no transactions in which Directors
have an interest have been entered into in fiscal 1997
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for ordinary general meetings,
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors and the special report of the statutory auditors on the transactions
referred to in article 101 of the law n(degrees)66-537 of July 24, 1966 on
commercial companies,
ACKNOWLEDGES that no transactions referred to in the said article have been
concluded during the financial year 1997.
SEVENTH RESOLUTION
This resolution is to authorize the granting of options corresponding to
750,000 shares of common stock reserved for subscription or purchase to
employees of the group under the 1994 Stock Option Plan, to cancel
shareholders' preferential subscription right to shares issued as a result of
exercise of the options, and to empower the Board of Directors to grant options
and carry out the issuance of the shares:
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for extraordinary general meetings,
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors and the special report of the statutory auditors,
RESOLVED, in accordance with articles 208-1 to 208-8 of the law n(degrees)66-
537 of July 24, 1966 and subject to the provisions of the 1994 Stock Option
Plan as approved at the shareholders' meeting held on June 21, 1995, and
amended at the shareholders meeting held on June 19, 1997, that the Board of
Directors is authorized to grant, once or severally, to employees and legal
representatives of the Company and its affiliates options to subscribe to or
purchase 750,000 shares of the Company of FF 1 nominal value each,
37
<PAGE>
RESOLVED FURTHER that this authorization is granted in addition to the
shareholders authorizations granted by the shareholders' meetings held on
August 17, 1994, June 13, 1996 and June 19, 1997, and, as a consequence, will
expire on August 16, 1999,
RESOLVED THEREFORE, that the issue or purchase price of one share subject to
an option shall be determined by the Board of Directors on the date of grant of
the option in accordance with the following:
(i) In the case of an Incentive Stock Option or Non-Statutory Stock
Option granted to a beneficiary subject to the laws of the United States of
America who, at the time the option is granted, owns stock representing
more than ten percent (10%) of the voting rights of all classes of stock of
the Company or any parent or subsidiary, to the extent such beneficiary is
permitted by the law to receive option grants, the per share exercise price
shall be no less than 110% of the Fair Market Value per share;
(ii) In the case of an Incentive Stock Option or Non-Statutory Stock
Option granted to any beneficiary other than a beneficiary described in
paragraph (i) above, the per share exercise price shall be no less than
100% of the Fair Market Value per share.
It being specified that for purposes of this resolution, Incentive Stock
Option shall mean an option intended to qualify as an incentive stock option
under section 422 of the U.S. Internal Revenue Code of 1986, as amended, and
Non-Statutory Stock Option shall mean an option which does not qualify as an
Incentive Stock Option.
RESOLVED FURTHER that the Fair Market Value of one share corresponding to one
American Depositary Share ("ADS") shall be determined by reference to the
market value of one ADS as follows:
(i) if the ADSs are listed on any established stock exchange or a
national market system, including without limitation the Nasdaq National
Market of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, the Fair Market Value of an ADS shall be the
closing sale price for such ADS (or the closing bid, if no sales were
reported) as quoted on such system or exchange (or the exchange with the
greatest volume of trading ADSs) on the last trading day prior to the day
of determination, as reported in The Wall Street Journal or such other
source as the Board of Directors deems reliable;
(ii) if the ADSs are quoted on the NASDAQ System (but not on the Nasdaq
National Market thereof) or are regularly quoted by a recognized securities
dealer but selling prices are not reported, the Fair Market Value of an ADS
shall be the mean between the high bid and low asked prices for an ADS on
the last trading day prior to the day of determination, as reported in The
Wall Street Journal or such other source as the Board of Directors deems
reliable;
(iii) in the absence of an established market for the ADSs or the common
stock, the Fair Market Value shall be determined in good faith by the Board
of Directors.
It being specified that the Fair Market Value shall be expressed in French
francs on the basis of the noon buying rate reported on the last trading day
prior to the day of determination by the Federal Reserve Bank of New York
(expressed in French francs per U.S.$ 1.00).
RESOLVED FURTHER, that the issue price determined in accordance with the
above may not be changed during the term of the option, except upon the
occurrence of changes in capitalization as defined in article 208-5 of the law
n(degrees)66-537 of July 24, 1966. In this latter case, the Board of Directors
shall adjust the option price and the number of shares subject to the option in
accordance with the laws then in effect in order to reflect the change in
capitalization, and may also decide to suspend the exercisability of the
options.
RESOLVED FURTHER, that the term of the options shall be ten years from the
date of grant, provided however that the Board of Directors is authorized to
provide for a shorter term for optionees residing in a certain country, if
required or advantageous under the laws of such country.
38
<PAGE>
RESOLVED FURTHER, that new shares issued will be subject to all provisions of
the by-laws, will be assimilated to shares issued previously and will entitle
the holder thereof to the rights attached to a share as from the first day of
the fiscal year of the final accomplishment of the capital increase.
RESOLVED FURTHER, that all powers are given to the Board of Directors in
order:
--to set the dates of grant, set the terms and conditions under which the
options are granted and exercisable, and set the issue price, including
henceforth the power to determine the purchase price for shares held as
treasury stock within the limits provided by the law relating to
commercial companies and by this resolution,
--to carry out, by itself or through an agent, all acts and formalities in
order to finalize the capital increases that could be carried out
pursuant to the authorization of the resolution hereof, and to modify the
by-laws consequently, and in general, carry out all formalities that are
necessary,
--to repurchase shares in accordance with the terms of article 217-1 of the
law n(degrees)66-537 of July 24, 1966, including through the purchase and
cancellation of American Depositary Shares to satisfy options to purchase
existing shares.
Pursuant to this authorization, shareholders expressly waive their
preferential right to subscribe the shares that will be issued as a result of
the exercise of the options.
EIGHTH RESOLUTION
This resolution is to authorize a capital increase for 135,000 new shares of
common stock to be reserved for subscription to employees of the Company under
the Employee Savings Plan, to cancel shareholders' preferential subscription
right to such shares and to delegate to the Board of Directors the power to
carry out the issuance of such shares:
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for extraordinary general meetings,
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors and the special report of the statutory auditors,
RESOLVED, that the share capital is to be increased by FF 135,000 by the
issuance of 135,000 new shares of FF 1 each payable upon subscription in cash
or by way of satisfaction of indebtedness, the subscription of which being
reserved to the employees of the Company who adhere or will adhere to the
Employee Savings Plan.
RESOLVED FURTHER, that the issue price of one share corresponding to one
American Depositary Share ("ADS") will be determined by the Board of Directors
in accordance with the following:
(a) if the ADSs are listed on any stock exchange or a national market
system, including especially the Nasdaq National Market of the National
Association of Security Dealers, Inc. Automated Quotation ("NASDAQ")
System, the issue price of one share will be the higher of
(i) eighty percent (80%) of the average of the closing sales prices
for an ADS (or the closing bid, if no sales were registered) as quoted
on such system or exchange (or the exchange with the greatest volume of
ADSs trading) on the twenty days of quotation preceding the day of the
decision of the Board of Directors called to set the opening date for
subscription, or
(ii) eighty five (85%) of the closing sale price for an ADS (or the
closing bid, if no sales were registered) as quoted on such system or
exchange (or the exchange with the greatest volume of ADSs trading) on
the last trading day preceding the day of the decision of the Board of
Directors called to set the opening date for subscription;
as reported in The Wall Street Journal or such other source the Board
will deem reliable.
39
<PAGE>
(b) if the ADSs are quoted on the NASDAQ System (but not on the Nasdaq
National Market thereof) or are regularly quoted by a recognized securities
dealer but selling prices are not reported, the issue price of one share
will be the higher of:
(i) eighty percent (80%) of the average of the means between the high
bid and low asked prices for an ADS on the twenty days of quotation
preceding the day of the decision of the Board of Directors called to
set the opening date for subscription, or
(ii) eighty five (85%) of the of the average of the means between the
high bid and low asked prices for an ADS on the last trading day
preceding the day of the decision of the Board of Directors called to
set the opening date for subscription;
as reported in The Wall Street Journal or such other source the Board will
deem reliable.
(c) in the absence of an established market quotation mentioned in
paragraphs (i) and (ii) above, the issue price of one share will be
determined by the Board according to the provisions of the last paragraph
of article 25 of the Ordonnance n(degrees)86-1134 of October 21, 1986.
It being specified that when the issue price of one share determined pursuant
to the foregoing price-setting conditions will be in U.S. dollars, the issue
price of one share will be the exchange value in French Francs of the issue
price of one share in U.S. dollars calculated on the basis of the noon buying
rate on the quotation day preceding the decision of the Board of Directors
called to set the opening date for subscription as reported by the Federal
Reserve Bank in New York (expressed in French francs for one U.S. dollar).
RESOLVED FURTHER, that the preferential subscription right of the
shareholders pursuant to article 183 of the law n(degrees)66-537 of July 24,
1966 on commercial companies be canceled and that the subscription of the
135,000 new shares to be issued be reserved to the employees of the Company who
adhere or will adhere to the Employee Savings Plan.
RESOLVED FURTHER, that the new shares will be subject to all provisions of
the by-laws, will be assimilated to shares issued previously and will entitle
the holder thereof to the rights attached to a share as from the first day of
the fiscal year of the final accomplishment of the capital increase.
RESOLVED FURTHER, to give to the Board of Directors all powers, within the
limits set above, in order, at once or severally:
--to set, subject to the law and the terms of this shareholders resolution,
the dates of subscription and the conditions under which the subscribed
shares will be paid and issued,
--to carry out, by himself or through an agent, all acts and formalities in
order to finalize the capital increases that could be carried out
pursuant to the authorization of the resolution hereof,
--to modify the by-laws consequently, and in general, carry out all
formalities that are necessary.
This authorization is granted for a period of two years as from the date of
this Meeting.
NINTH RESOLUTION
This resolution is to deliberate on the issue price of shares reserved for
issuance at the June 19, 1997 shareholders' Meeting under the 1995
International Stock Purchase Plan and to re-affirm the price setting conditions
voted on and approved on June 19, 1997.
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for extraordinary general meetings,
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors and the special report of the statutory auditors,
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RESOLVED, in accordance with article 186-3 third paragraph of the law
n(degrees)66-537 of July 24, 1966, not to change the price setting conditions
of the shares approved by the Meeting of June 19, 1997 and reserved for
issuance under the 1995 International Stock Purchase Plan.
TENTH RESOLUTION
This resolution is to authorize the issuance of 165,000 new shares under the
1995 International Stock Purchase Plan, to cancel shareholders' preferential
right to such shares, and to empower the Board of Directors to fix the terms
and conditions of the subscription of such shares and to take all appropriate
actions with respect to the same:
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for extraordinary general meetings,
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors and the special report of the statutory auditors and has noted that
the share capital has been fully paid-up,
RESOLVED that the share capital is to be increased once or more than once
within a maximum of FF165,000 by the issuance of a maximum of 165,000 new
shares of FF1 nominal value each, payable upon subscription in cash or by way
of satisfaction of indebtedness, the subscription being reserved to Business
Objects S.A. Employee Benefits Trust.
RESOLVED FURTHER, that the issue price of one share, corresponding to one
American Depositary Share ("ADS") for a given offering period will be
determined by the Board of Directors as follows:
(i) if the ADSs are listed on any stock exchange or a national market
system, including especially the Nasdaq National Market of the National
Association of Security Dealers, Inc. Automated Quotation ("NASDAQ")
System, the issue price of one share will be equal to eighty five percent
(85%) of the lowest closing sale price for such ADS (or the closing bid, if
no sales were registered) as quoted on such system or exchange (or the
exchange with the greatest volume of trading ADSs) on the last trading day
prior to the first day of the offering period and on the last trading day
of the offering period, as reported in The Wall Street Journal or such
other source the Board will deem reliable;
(ii) if the ADSs are quoted on the NASDAQ System (but not on the Nasdaq
National Market thereof) or are regularly quoted by a recognized securities
dealer but selling prices are not reported, the issue price of one share
will be equal to eighty five percent (85%) of the lowest mean between the
high bid and low asked prices for the ADSs on the last trading day prior to
the first day of the offering period and on the last trading day of the
offering period, as reported in The Wall Street Journal or such other
source the Board will deem reliable; and
(iii) in the absence of an established market quotation as mentioned in
paragraphs (i) and (ii) above, the issue price of one share will be equal
to eighty five percent (85%) of the lowest fair market value of an ADS on
the first day and on the last day of the offering period as determined in
good faith by the Board.
It being specified that when the issue price of one share determined pursuant
to the foregoing price-setting conditions will be in U.S. dollars, the issue
price of one share will be the exchange value in French francs of the issue
price of one share in U.S. dollars calculated on the basis of the noon buying
rate on the last day of the offering period (or, in the absence of a market
quotation on that date, that of the prior day of quotation) reported by the
Federal Reserve Bank of New York (expressed in French francs for one U.S.
dollar).
RESOLVED FURTHER, that the new shares will be subject to all provisions of
the by-laws, will be assimilated to shares issued previously and will entitle
the holder thereof to the rights attached to a share as from the first day of
the fiscal year of the final accomplishment of the capital increase.
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RESOLVED FURTHER, that the preferential right of subscription granted to the
shareholders pursuant to article 183 of the law n(degrees) 66-537 of July 24,
1966 on commercial companies is canceled and that the subscription of the
165,000 new shares to be issued is reserved to Business Objects S.A. Employee
Benefits Trust.
RESOLVED FURTHER, that the Board of Directors is granted hereby authority to,
once or more than once:
--fix the amount(s) of the increase(s) of the share capital, the dates of
offering periods, the terms and the conditions of the subscription and
the issue within the limits decided by this resolution, it being
specified that the shares, the issue of which will have been resolved by
the Board of Directors, must be issued, at the latest, within two years
from the date of this Meeting,
--collect the subscriptions to the new shares and the payments related
thereto,
--proceed to the anticipated closing date of the subscriptions or to the
extension of its deadline, if applicable,
--obtain from the funds depository the certificate attesting that the
capital increase has been fully paid-up,
--proceed with the withdrawal of funds after accomplishment of the capital
increase,
--carry out, directly or by proxy, all acts and formalities in view of
finalizing the share capital increase which has been decided upon in this
resolution,
--amend the articles of association as a result of the share capital
increase and, in general, to take all necessary steps in that respect.
This authorization is granted for a period of two years as from the date
of this meeting.
ELEVENTH RESOLUTION
This resolution is to delegate to the Board of Directors powers to issue
securities of the Company giving immediate or deferred access to the share
capital of the Company with preferential subscription rights:
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for extraordinary general meetings,
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors and the special report of the statutory auditors,
Pursuant to the provisions of Article 180 III of the law n(degrees) 66-537
n(degrees) 66-537 of July 24, 1966:
RESOLVED, to delegate to the Board of Directors full authority to issue
securities with preferential subscription rights, in one or more public or
private offerings, either in French Francs or a foreign currency, the Euro or
any other accounting unit established with reference to a group of currencies
in France or abroad.
RESOLVED FURTHER that the nominal value of the share capital increases which
may be carried out, either immediately or in the future, by virtue of this
delegation shall not exceed FF15,000,000 or the exchange value of this sum,
with the understanding that this amount does not take into account adjustments
which may be made in compliance with current legislation to protect the rights
of security holders.
RESOLVED FURTHER that the Board of Directors may issue
a) ordinary shares;
b) all securities, subordinated or not in the case of debentures, which
entitle the bearer, whether at any time, on a determined date or during
defined periods, through subscription, conversion, exchange, redemption,
presentation of a warrant or in any other manner, to securities which
represent a portion of the share capital of the Company, and which may take
any of the forms mentioned in articles 194-1 to 208 or 339-1 of the law
n(degrees) 66-537 of July 24, 1966;
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c) unattached warrants entitling their holders to subscribe to securities
representing a portion of the share capital of the Company. These warrants
may be distributed at no cost or for a consideration.
RESOLVED FURTHER that, for preferred shares and investment certificates, the
nominal value that may be issued by virtue of this delegation shall not exceed
FF1.
RESOLVED FURTHER that, for the securities referred to in section b) above,
the nominal value of the debt securities that may be issued by virtue of this
delegation shall not exceed FF10,000,000 on the date of issue.
RESOLVED that shareholders may exercise, under the terms and conditions
provided for by current legislation, their preferential subscription right for
new shares. Furthermore, the Board of Directors may grant shareholders the
right to purchase and additional number of shares than that to which they are
entitled as of right, in proportion to their subscription rights and limited to
the number of shares requested.
RESOLVED FURTHER that the Board of Directors may decide that the un-
subscribed balance of the share capital increase be distributed totally or
partially at its discretion, or offered to the public totally or partially, or
that the amount of the capital increase be restricted to the number of
subscription received provided that the legal requirements are met, it being
stipulated that the Board of Directors may, at its discretion, and in the order
it shall deem appropriate, exercise all the rights listed above or only some of
them.
This decision automatically entails a waiver by the Shareholders of their
preferential subscription rights with respect to other securities to which
these securities entitle them, in favor of the holders of the securities
mentioned in b) above issued by virtue of this delegation other than
convertible bonds.
RESOLVED FURTHER to waive the preferential subscription rights with respect
to shares issued upon conversion of convertible bonds and securities to which
the warrants referred to in section c) above may entitle holders.
RESOLVED to grant full authority to the Board of Directors to determine the
form and characteristics of the securities to be created, as well as the dates
and terms and conditions of the issue, to set the amount to be issued, to set,
even retroactively, the issuance date, to determine, as required the
appropriate means for protecting the rights of holders of securities providing
access to the share capital of the Company and, with the understanding that in
any event, the sum paid or which may later be paid to the company for each of
the shares issued or to be issued by virtue of this resolution must be at least
equal to the par value of the shares.
In the event of securities being issued entitling their bearers to an
allotment of securities which represent a portion of the share capital of the
Company upon presentation of a warrant, the Board of Directors shall be granted
full authority to determine the terms and conditions according to which Company
may purchase said warrants, at any time or within defined periods, in view of
their cancellation.
RESOLVED that the Board of Directors may:
--at its sole initiative and if it deems appropriate, impute all expenses,
taxes and fees incurred in relation to the issue to the total amount of
the corresponding paid-in capital, and draw from this amount the sums
necessary to bring the legal reserve to one-tenth of the new total shares
capital subsequent to each issue,
--list the securities issued, and more generally,
--take all measures, conclude all agreements and undertake all formalities
necessary in furtherance of the proposed issue, to record the resulting
increase in share capital and to amend the articles if incorporation and
bylaws accordingly.
This delegation is granted for a period of 26 months starting from this
general meeting.
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TWELFTH RESOLUTION
This resolution is to delegate to the Board of Directors powers to issue
securities of the Company giving immediate or deferred access to the share
capital of the Company without preferential subscription right:
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for extraordinary general meetings,
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors and the special report of the statutory auditors,
Pursuant to the provisions of Article 180 III of the law n(degrees) 66-537 of
July 24, 1966,
RESOLVED to delegate to the Board of Directors full authority to issue
securities with preferential subscription rights waived, in one or more public
offerings, whether in French Francs or a foreign currency, the Euro or any
other accounting unit established with reference to a group of currencies in
France or abroad.
RESOLVED FURTHER that the nominal value of the share capital increases which
may be carried out, either immediately or in the future, by virtue of this
delegation shall not exceed FF 15,000,000 or the exchange value of this sum,
with any use of this delegation being imputed to the FF 15,000,000 ceiling set
in the eleventh resolution here above, with the understanding that this ceiling
does not take into account adjustments which may be made in compliance with
legislation then in effect to protect the rights of holders of securities
giving access to a portion of the share capital of the Company.
RESOLVED FURTHER that, for preferred shares and investment certificates, the
nominal value that may be issued by virtue of this delegation shall not exceed
FF 1.
RESOLVED FURTHER that, with respect to the securities mentioned in b) here
below, the principal amount of the debt securities which may be issued by
virtue of this delegation shall not exceed FF 10,000,000 on the date of issue,
it being stipulated that any use of this delegation shall be imputed to the FF
15,000,000 ceiling set for such securities in the eleventh resolution above.
RESOLVED FURTHER that the Board of Directors may issue:
a) ordinary shares;
b) all securities, subordinated or not in the case of debentures, which
entitle the bearer, whether at any time, on a determined date or during
defined periods, through subscription, conversion, exchange, redemption,
presentation of a warrant or in any other manner, to securities which
represent a portion of the share capital of the Company, and which may take
any of the forms mentioned in articles 194-1 to 208 or 339-1 of the law
n(degrees)66-537 of July 24, 1966;
c) unattached warrants entitling their holders to subscribe to securities
which represent a portion of the share capital of the Company; these
warrants may be distributed at no cost or for a consideration.
RESOLVED FURTHER, that any sum paid or to be paid to the Company in
consideration for each of the shares issued or to be issued through the
exercise of rights attached to securities shall be determined in accordance
with article 186-1 (3(degrees)) of the law n(degrees)66-537 of July 24, 1966
and shall be at least equal to the average of the closing sale prices for the
Company's ADSs on the Nasdaq National Market for a consecutive period of ten
days chosen from among the twenty trading days preceding the issue of said
securities.
RESOLVED FURTHER, to waive the preferential right of subscription to the
securities referred to in a), b) and c) above.
The decision automatically entails a waiver by the Shareholders of their
preferential subscription right with respect to other securities to which these
securities entitle them, in favor of the holders of the securities mentioned in
b) hereabove issued by virtue of this delegation other that convertible bonds.
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For issues on a French or foreign exchange market, the Board of Directors
may implement a priority right to the benefit of shareholders, for a period
and under terms to be determined by the Board of Directors, entitling such
shareholders to subscribe securities referred to in a), b), and c) above, in
proportion to the number of shares held by each shareholder, it being
specified that the priority right shall not entail the creation of
transferable rights. Securities not subscribed by shareholders shall be
offered to the public. The priority right shall be exercisable, as the Board
of Directors deems advisable, in respect of non-reducible subscription rights
or reducible excess subscription rights.
RESOLVED FURTHER to waive the preferential subscription right with respect
to shares issued upon conversion of convertible bonds and securities to which
the warrants referred to in section c) above may entitle holders.
RESOLVED to grant full authority to the Board of Directors to determine the
form and characteristics of the securities to be created, as well as the dates
and terms and conditions of the issue, to set the amounts to be issued, to
set, even retroactively, the issuance date to determine, as required, the
appropriate means for protecting the rights of holders of securities providing
access to the share capital of the Company, it being stipulated that in the
event of an issue of shares with stock warrants, the issue price of ordinary
or priority shares issued or issuable upon presentation of said warrants shall
be shall be determined in accordance with article 186-1 (3(degrees)) of the
law n(degrees)66-537 of July 24, 1966 and shall be at least equal to the
average of the closing sale prices for the Company's ADSs on the Nasdaq
national market during the ten trading days which precede the date of
issuance, after adjustment of this average to account for the date from which
dividends are earned.
In the event of securities being issued entitling their bearers to an
allotment of securities which represent a portion of the share capital of the
Company upon presentation of a warrant, the Board of Directors shall be
granted full authority to determine the terms and conditions according to
which the Company may purchase said warrants, at any time or within defined
periods, in view of their cancellation.
RESOLVED that the Board of Directors may:
at its sole initiative and if it deems appropriate, impute all expenses,
taxes and fees incurred in relation to the issue to the total amount of
the corresponding issue premium, and draw from this amount the sums
necessary to bring the legal reserve to one-tenth of the new total share
capital subsequent to each issue;
list the securities to be issued and, more generally;
take all measures, conclude all agreements and undertake all formalities
necessary to ensure the outcome of the proposed issue, to record the
resulting increase in share capital and to amend the articles of
incorporation and bylaws accordingly.
This delegation is granted for a period of 26 months starting from this
general meeting.
THIRTEENTH RESOLUTION
This resolution is to delegate to the Board of Directors powers to issue
shares of the Company as a result of the issuance of bonds with stock warrants
and composite securities by Group subsidiaries:
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for extraordinary general meetings,
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors and the special report of the statutory auditors,
RESOLVED to delegate to the Board of Directors full authority to issue
shares to be subscribed upon presentation of the warrants mentioned in a) or
c) below and shares to which bearers of the securities mentioned in b) below
are entitled, in one or more offerings, either in French Francs or a foreign
currency, the Euro or any other accounting unit established with reference to
a group of currencies in France or abroad, in connection with
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the issuance of securities by companies in which the Company holds, directly
or indirectly, more than half of the share capital, provided that the
agreement of said companies is obtained.
RESOLVED FURTHER that the total amount of the shares issued by virtue of
this delegation shall not exceed FF 15,000,000, taking into account
adjustments which may be made as provided by law, with any use of this
delegation being imputed to the maximum ceiling increases set in the eleventh
resolution.
RESOLVED FURTHER that the Board of Directors may issue shares resulting from
the issue of:
a) bonds with Company stocks warrants,
b) all other securities, subordinated or not in the case of debentures,
which entitle the bearer whether at any time on a determined date or during
defined periods, through subscription, conversion, exchange, redemption,
presentation of a warrant or in any other manner, to shares of the Company,
c) unattached warrants entitling their holders to subscribe to shares of
the Company, these warrants may be distributed at no cost or for a
consideration.
In any event, any sum paid or to be paid to the Company in consideration for
each of the shares issued through the exercise of rights attached to
securities mentioned in a), b), and c), shall be determined in accordance with
article 186-1 (3(degrees)) of the law n(degrees)66-537 of July 24, 1966 and
shall be at least equal to the average of the closing sale prices for the
Company's ADSs on the Nasdaq National Market during the ten trading days which
precede the date of issuance.
This decision automatically entails a waiver by the shareholders of their
preferential subscription rights with respect to the shares to which they are
entitled by virtue of the warrants mentioned in a) and the securities
mentioned in(degrees)b) above, in favor of the holders of the securities
mentioned in a) and b) above.
Furthermore, the Shareholders hereby resolve to waive the preferential
subscription rights with respect to shares to which they are entitled by
virtue of the warrants mentioned in c) above.
RESOLVED FURTHER to grant full authority to the Board of Directors:
--to carry out this authorization in conjunction with executive or general
management of the issuing subsidiaries, in particular, to determine the
date from which dividends are earned, even retroactive,
--to conclude any agreements to ensure the successful outcome of the
projected issues, in compliance with laws and regulation in force and,
more generally,
--to undertake all steps and formalities required to carry out capital
increase subsequent to the projected transactions and to amend the
articles or incorporation and by-laws accordingly.
This delegation is granted for a period of two years starting from this
meeting.
FOURTEENTH RESOLUTION
This resolution is to delegate to the Board of Directors powers to increase
the share capital of the Company in the event of a tender offer on securities
of the Company:
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for extraordinary general meetings,
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors and the special report of the statutory auditors,
RESOLVED to authorize the Board of Directors to use and to delegate to the
Board of Directors full authority to use, during periods of offers of exchange
on securities of the Company, one or more of the delegations that this meeting
of shareholders has granted to said Board for the purposes of increasing the
share capital of the Company pursuant to the eleventh and twelfth resolutions.
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This delegation is granted for a period falling between the date of this
meeting and the date of the shareholders meeting called to approve the
financial statements for the fiscal year ended December 31, 1998.
FIFTEENTH RESOLUTION
This resolution is to issue warrants to subscribe 25,000 shares of the
Company to Mr. Bernard Charles without payment as consideration, to cancel
shareholders' preferential right to such warrants and to the shares resulting
from the exercise of such warrants, and to empower the Board of Directors to
take all appropriate actions with respect to the grant of the share warrants.
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for extraordinary general meetings,
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors, the special report of the statutory auditor and the report of the
special advantages auditor, and has noted that the share capital has been
fully paid-up,
RESOLVED, in accordance with article 339-5 of the law n(degrees)66-537 of
July 24, 1966, to issue 25,000 warrants, each warrant entitling to the
subscription to one share of one franc nominal value, to be subscribed in cash
or by way of compensation and to be fully paid in upon subscription,
RESOLVED FURTHER, to cancel the preferential subscription rights for the
warrants given to shareholders pursuant to article 183 of the law
n(degrees)66-537 of July 24, 1966 on commercial companies and to reserve the
subscription of the 25,000 warrants to Mr. Bernard Charles,
RESOLVED FURTHER, to authorize the increase in share capital by an amount of
FF 25,000, to be fully paid in upon subscription, either in cash or by
compensation, corresponding to the issuance of 25,000 new shares of FF 1
nominal value each, to which the exercise of the warrants entitles,
RESOLVED FURTHER, that the shareholders' preferential subscription right
pursuant to article 183 of the law n(degrees)66-537 of July 24, 1966 on
commercial companies is hereby canceled and that the subscription of the
25,000 new shares to be issued is reserved to Mr Bernard Charles,
RESOLVED FURTHER that the exercise price per share is equal to the closing
price of one American Depositary Share of the Company on NASDAQ on June 17,
1998, times the noon buying rate for French Francs as quoted by the Federal
Reserve Bank of New York on such date,
RESOLVED FURTHER, to approve the special advantages granted to the holder
consisting in (i) the granting of such warrants without payment as
consideration and (ii) the implementing of a fixed exercise per share,
RESOLVED FURTHER, that the said warrants may be exercised up to 8,333 shares
on or after June 18, 1999, up to 8,333 shares on or after June 18, 2000, and
up to the remaining 8,334 shares on or after June 18, 2001,
RESOLVED FURTHER, that in the event the holder ceases to be a Director of
the Company, the holder shall be entitled to exercise the warrants up to the
number of vested shares as of the date of termination of office as Director,
for a period of ninety (90) days as from such termination date,
RESOLVED FURTHER, that in the event of merger or other change of control of
the Company, the holder of the warrant will be notified and given the same
information as if he were a shareholder in order to exercise, if he wishes so,
his subscription rights. Moreover, had he not acquired his full rights, the
Board of Directors may, as an exception to the foregoing, decide to increase
the number of warrants, which he may exercise,
RESOLVED FURTHER, that the warrants may be exercised in one or several lots,
but at the latest on the earlier of the two following dates: (i) June 18,
2003, or (ii) in case of termination of the term of office as Director, within
90 days following such termination date,
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RESOLVED FURTHER, that given the particular advantages attached to the share
warrants, the warrants shall not be transferable, except to the spouse, a
direct descendant or ascendant, a brother or a sister of the holder,
RESOLVED FURTHER, that the new shares will be subject to all provisions of
the by-laws, will be assimilated to shares issued previously and will entitle
the holder thereof to the rights attached to a share as from the first day of
the fiscal year of the final accomplishment of the capital increases,
RESOLVED FURTHER, to give to the Board of Directors all powers, within the
limits set above, in order:
--to verify the number of shares issued following the exercise of the
warrants and proceed to all formalities resulting from the relevant
capital increases and modify the by-laws accordingly,
--to make the necessary arrangements for ensuring that the protection of
the holder of the share warrants, in the event of any financial
transaction concerning the Company, is in compliance with all statutory
and regulatory provisions in effect,
--to carry out, by itself or through an agent, all acts and formalities in
order to finalize the capital increases that could be carried out
pursuant to the authorization of the resolution hereof, and to modify the
by-laws consequently, and in general, to take all necessary steps and
carry out any formal procedure useful to this issue,
RESOLVED FURTHER, in accordance with article 55 of the decree n(degrees) 67-
236 of March 23, 1967 to insert in article 6 of the by-laws the following in
order to indicate therein the recipient's identity of special advantages and
the nature of such advantages:
"Mr. Bernard Charles, is a recipient of special advantages resulting from the
grant of 25,000 warrants giving the right to subscribe to 25,000 shares by the
shareholder meeting held on June 18, 1998. The special advantages consist in
(i) the granting of such warrants without payment as consideration and (ii) the
implementing of a fixed exercise price per share corresponding to the estimated
value of a share as of June 18, 1998".
SIXTEENTH RESOLUTION
This resolution is to issue warrants to subscribe 15,000 shares of the
Company to Mr. Albert Eisenstat without payment as consideration, to cancel
shareholders' preferential right to such warrants and to the shares resulting
from the exercise of such warrants, and to empower the Board of Directors to
take all appropriate actions with respect to the grant of the share warrants.
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for extraordinary general meetings,
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors, the special report of the statutory auditor and the report of the
special advantages auditor, and has noted that the share capital has been fully
paid-up,
RESOLVED, in accordance with article 339-5 of the law n(degrees) 66-537 of
July 24, 1966, to issue 15,000 warrants, each warrant entitling to the
subscription to one share of one franc nominal value, to be subscribed in cash
or by way of compensation and to be fully paid in upon subscription,
RESOLVED FURTHER, to cancel the preferential subscription rights for the
warrants given to shareholders pursuant to article 183 of the law n(degrees)
66-537 of July 24, 1966 on commercial companies and to reserve the subscription
of the 15,000 warrants to Mr. Albert Eisenstat,
RESOLVED FURTHER, to authorize the increase in share capital by an amount of
FF 15,000, to be fully paid in upon subscription, either in cash or by
compensation, corresponding to the issuance of 15,000 new shares of FF 1
nominal value each, to which the exercise of the warrants entitles,
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RESOLVED FURTHER, that the shareholders' preferential subscription right
pursuant to article 183 of the law n(degrees) 66-537 of July 24, 1966 on
commercial companies is hereby canceled and that the subscription of the 15,000
new shares to be issued is reserved to Mr. Albert Eisenstat,
RESOLVED FURTHER, that the exercise price per share is equal to the closing
price of one American Depositary Share of the Company on NASDAQ on June 17,
1998, times the noon buying rate for French Francs as quoted by the Federal
Reserve Bank of New York on such date,
RESOLVED FURTHER, to approve the special advantages granted to the holder
consisting in (i) the granting of such warrants without payment as
consideration and (ii) the implementing of a fixed exercise per share,
RESOLVED FURTHER, that the said warrants may be exercised up to 5,000 shares
on or after June 18, 1999, up to 5,000 shares on or after June 18, 2000, and up
to the remaining 5,000 shares on or after June 18, 2001,
RESOLVED FURTHER, that in the event the holder ceases to be a Director of the
Company, the holder shall be entitled to exercise the warrants up to the number
of vested shares as of the date of termination of office as Director, for a
period of ninety (90) days as from such termination date,
RESOLVED FURTHER, that in the event of merger or other change of control of
the Company, the holder of the warrant will be notified and given the same
information as if he were a shareholder in order to exercise, if he wishes so,
his subscription rights. Moreover, had he not acquired his full rights, the
Board of Directors may, as an exception to the foregoing, decide to increase
the number of warrants, which he may exercise,
RESOLVED FURTHER, that the warrants may be exercised in one or several lots,
but at the latest on the earlier of the two following dates: (i) June 18, 2003,
or (ii) in case of termination of the term of office as Director, within 90
days following such termination date,
RESOLVED FURTHER, that given the particular advantages attached to the share
warrants, the warrants shall not be transferable, except to the spouse, a
direct descendant or ascendant, a brother or a sister of the holder,
RESOLVED FURTHER, that the new shares will be subject to all provisions of
the by-laws, will be assimilated to shares issued previously and will entitle
the holder thereof to the rights attached to a share as from the first day of
the fiscal year of the final accomplishment of the capital increases,
RESOLVED FURTHER, to give to the Board of Directors all powers, within the
limits set above, in order:
--to verify the number of shares issued following the exercise of the
warrants and proceed to all formalities resulting from the relevant
capital increases and modify the by-laws accordingly,
--to make the necessary arrangements for ensuring that the protection of
the holder of the share warrants, in the event of any financial
transaction concerning the Company, is in compliance with all statutory
and regulatory provisions in effect,
--to carry out, by itself or through an agent, all acts and formalities in
order to finalize the capital increases that could be carried out
pursuant to the authorization of the resolution hereof, and to modify the
by-laws consequently, and in general, to take all necessary steps and
carry out any formal procedure useful to this issue,
RESOLVED FURTHER, in accordance with article 55 of the decree n(degrees) 67-
236 of March 23, 1967 to insert in article 6 of the by-laws the following in
order to indicate therein the recipient's identity of special advantages and
the nature of such advantages:
"Mr. Albert Eisenstat is a recipient of special advantages resulting from the
grant of 15,000 warrants giving the right to subscribe to 15,000 shares by the
shareholder meeting held on June 18, 1998. The special
49
<PAGE>
advantages consist in (i) the granting of such warrants without payment as
consideration and (ii) the implementing of a fixed exercise price per share
corresponding to the estimated value of a share as of June 18, 1998".
SEVENTEENTH RESOLUTION
This resolution is to issue warrants to subscribe 15,000 shares of the
Company to Mr. Arnold Silverman without payment as consideration, to cancel
shareholders' preferential right to such warrants and to the shares resulting
from the exercise of such warrants, and to empower the Board of Directors to
take all appropriate actions with respect to the grant of the share warrants.
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for extraordinary general meetings,
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors, the special report of the statutory auditor and the report of the
special advantages auditor, and has noted that the share capital has been fully
paid-up,
RESOLVED, in accordance with article 339-5 of the law n(degrees) 66-537 of
July 24, 1966, to issue 15,000 warrants, each warrant entitling to the
subscription to one share of one franc nominal value, to be subscribed in cash
or by way of compensation and to be fully paid in upon subscription,
RESOLVED FURTHER, to cancel the preferential subscription rights for the
warrants given to shareholders pursuant to article 183 of the law n(degrees)
66-537 of July 24, 1966 on commercial companies and to reserve the subscription
of the 15,000 warrants to Mr. Arnold Silverman,
RESOLVED FURTHER, to authorize the increase in share capital by an amount of
FF 15,000, to be fully paid in upon subscription, either in cash or by
compensation, corresponding to the issuance of 15,000 new shares of FF 1
nominal value each, to which the exercise of the warrants entitles,
RESOLVED FURTHER, that the shareholders' preferential subscription right
pursuant to article 183 of the law n(degrees) 66-537 of July 24, 1966 on
commercial companies is hereby canceled and that the subscription of the 15,000
new shares to be issued is reserved to Mr. Arnold Silverman,
RESOLVED FURTHER that the exercise price per share is equal to the closing
price of one American Depositary Share of the Company on NASDAQ on June 17,
1998, times the noon buying rate for French Francs as quoted by the Federal
Reserve Bank of New York on such date,
RESOLVED FURTHER, to approve the special advantages granted to the holder
consisting in (i) the granting of such warrants without payment as
consideration and (ii) the implementing of a fixed exercise per share,
RESOLVED FURTHER, that the said warrants may exercised up to 5,000 shares on
or after June 18, 1999, up to 5,000 shares on or after June 18, 2000, and up to
the remaining 5,000 shares on or after June 18, 2001,
RESOLVED FURTHER, that in the event the holder ceases to be a Director of the
Company, the holder shall be entitled to exercise the warrants up to the number
of vested shares as of the date of termination of office as Director, for a
period of ninety (90) days as from such termination date,
RESOLVED FURTHER, that in the event of merger or other change of control of
the Company, the holder of the warrant will be notified and given the same
information as if he were a shareholder in order to exercise, if he wishes so,
his subscription rights. Moreover, had he not acquired his full rights, the
Board of Directors may, as an exception to the foregoing, decide to increase
the number of warrants, which he may exercise,
50
<PAGE>
RESOLVED FURTHER, that the warrants may be exercised in one or several lots,
but at the latest on the earlier of the two following dates: (i) June 18, 2003,
or (ii) in case of termination of the term of office as Director, within 90
days following such termination date,
RESOLVED FURTHER, that given the particular advantages attached to the share
warrants, the warrants shall not be transferable, except to the spouse, a
direct descendant or ascendant, a brother or a sister of the holder,
RESOLVED FURTHER, that the new shares will be subject to all provisions of
the by-laws, will be assimilated to shares issued previously and will entitle
the holder thereof to the rights attached to a share as from the first day of
the fiscal year of the final accomplishment of the capital increases,
RESOLVED FURTHER, to give to the Board of Directors all powers, within the
limits set above, in order:
--to verify the number of shares issued following the exercise of the
warrants and proceed to all formalities resulting from the relevant
capital increases and modify the by-laws accordingly,
--to make the necessary arrangements for ensuring that the protection of
the holder of the share warrants, in the event of any financial
transaction concerning the Company, is in compliance with all statutory
and regulatory provisions in effect,
--to carry out, by itself or through an agent, all acts and formalities in
order to finalize the capital increases that could be carried out
pursuant to the authorization of the resolution hereof, and to modify the
by-laws consequently, and in general, to take all necessary steps and
carry out any formal procedure useful to this issue,
RESOLVED FURTHER, in accordance with article 55 of the decree n(degrees) 67-
236 of March 23, 1967 to insert in article 6 of the by-laws the following in
order to indicate therein the recipient's identity of special advantages and
the nature of such advantages:
"Mr. Arnold Silverman is a recipient of special advantages resulting from the
grant of 15,000 warrants giving the right to subscribe to 15,000 shares by the
shareholder meeting held on June 18, 1998. The special advantages consist in
(i) the granting of such warrants without payment as consideration and (ii) the
implementing of a fixed exercise price per share corresponding to the estimated
value of a share as of June 18, 1998".
EIGHTEENTH RESOLUTION
This resolution is to issue warrants to subscribe 10,000 shares of the
Company to Mr. Philippe Claude without payment as consideration, to cancel
shareholders' preferential right to such warrants and to the shares resulting
from the exercise of such warrants, and to empower the Board of Directors to
take all appropriate actions with respect to the grant of the share warrants.
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for extraordinary general meetings,
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors, the special report of the statutory auditor and the report of the
special advantages auditor, and has noted that the share capital has been fully
paid-up,
RESOLVED, in accordance with article 339-5 of the law n(degrees) 66-537 of
July 24, 1966, to issue 10,000 warrants, each warrant entitling to the
subscription to one share of one franc nominal value, to be subscribed in cash
or by way of compensation and to be fully paid in upon subscription,
RESOLVED FURTHER, to cancel the preferential subscription rights for the
warrants given to shareholders pursuant to article 183 of the law n(degrees)
66-537 of July 24, 1966 on commercial companies and to reserve the subscription
of the 10,000 warrants to Mr. Philippe Claude,
51
<PAGE>
RESOLVED FURTHER, to authorize the increase in share capital by an amount of
FF10,000, to be fully paid in upon subscription, either in cash or by
compensation, corresponding to the issuance of 10,000 new shares of FF1 nominal
value each, to which the exercise of the warrants entitles,
RESOLVED FURTHER, that the shareholders' preferential subscription right
pursuant to article 183 of the law n(degrees) 66-537 of July 24, 1966 on
commercial companies is hereby canceled and that the subscription of the 10,000
new shares to be issued is reserved to Mr. Philippe Claude,
RESOLVED FURTHER that the exercise price per share is equal to the closing
price of one American Depositary Share of the Company on NASDAQ on June 17,
1998, times the noon buying rate for French Francs as quoted by the Federal
Reserve Bank of New York on such date,
RESOLVED FURTHER, to approve the special advantages granted to the holder
consisting in (i) the granting of such warrants without payment as
consideration and (ii) the implementing of a fixed exercise per share,
RESOLVED FURTHER, that the said warrants may be exercised up to 5,000 shares
on or after June 18, 1999, up to the remaining 5,000 shares on or after June
18, 2000,
RESOLVED FURTHER, that in the event the holder ceases to be a Director of the
Company, the holder shall be entitled to exercise the warrants up to the number
of vested shares as of the date of termination of office as Director, for a
period of ninety (90) days as from such termination date,
RESOLVED FURTHER, that in the event of merger or other change of control of
the Company, the holder of the warrant will be notified and given the same
information as if he were a shareholder in order to exercise, if he wishes so,
his subscription rights. Moreover, had he not acquired his full rights, the
Board of Directors may, as an exception to the foregoing, decide to increase
the number of warrants, which he may exercise,
RESOLVED FURTHER, that the warrants may be exercised in one or several lots,
but at the latest on the earlier of the two following dates: (i) June 18, 2003,
or (ii) in case of termination of the term of office as Director, within 90
days following such termination date,
RESOLVED FURTHER, that given the particular advantages attached to the share
warrants, the warrants shall not be transferable, except to the spouse, a
direct descendant or ascendant, a brother or a sister of the holder,
RESOLVED FURTHER, that the new shares will be subject to all provisions of
the by-laws, will be assimilated to shares issued previously and will entitle
the holder thereof to the rights attached to a share as from the first day of
the financial year of the final accomplishment of the capital increases,
RESOLVED FURTHER, to give to the Board of Directors all powers, within the
limits set above, in order:
--to verify the number of shares issued following the exercise of the
warrants and proceed to all formalities resulting from the relevant
capital increases and modify the by-laws accordingly,
--to make the necessary arrangements for ensuring that the protection of
the holder of the share warrants, in the event of any financial
transaction concerning the Company, is in compliance with all statutory
and regulatory provisions in effect,
--to carry out, by itself or through an agent, all acts and formalities in
order to finalize the capital increases that could be carried out
pursuant to the authorization of the resolution hereof, and to modify the
by-laws consequently, and in general, to take all necessary steps and
carry out any formal procedure useful to this issue,
52
<PAGE>
RESOLVED FURTHER, in accordance with article 55 of the decree n(degrees) 67-
236 of March 23, 1967 to insert in article 6 of the by-laws the following in
order to indicate therein the recipient's identity of special advantages and
the nature of such advantages:
"Mr. Philippe Claude is a recipient of special advantages resulting from the
grant of 10,000 warrants giving the right to subscribe to 10,000 shares by the
shareholder meeting held on June 18, 1998. The special advantages consist in
(i) the granting of such warrants without payment as consideration and (ii) the
implementing of a fixed exercise price per share corresponding to the estimated
value of a share as of June 18, 1998".
NINETEENTH RESOLUTION
This resolution is to issue warrants to subscribe 5,000 shares of the Company
to Mr. Vincent Worms without payment as consideration, to cancel shareholders'
preferential right to such warrants and to the shares resulting from the
exercise of such warrants, and to empower the Board of Directors to take all
appropriate actions with respect to the grant of the share warrants.
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for extraordinary general meetings,
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors, the special report of the statutory auditor and the report of the
special advantages auditor, and has noted that the share capital has been fully
paid-up,
RESOLVED, in accordance with article 339-5 of the law n(degrees) 66-537 of
July 24, 1966, to issue 5,000 warrants, each warrant entitling to the
subscription to one share of one franc nominal value, to be subscribed in cash
or by way of compensation and to be fully paid in upon subscription,
RESOLVED FURTHER, to cancel the preferential subscription rights for the
warrants given to shareholders pursuant to article 183 of the law n(degrees)
66-537 of July 24, 1966 on commercial companies and to reserve the subscription
of the 5,000 warrants to Mr. Vincent Worms,
RESOLVED FURTHER, to authorize the increase in share capital by an amount of
FF5,000, to be fully paid in upon subscription, either in cash or by
compensation, corresponding to the issuance of 5,000 new shares of FF1 nominal
value each, to which the exercise of the warrants entitles,
RESOLVED FURTHER, that the shareholders' preferential subscription right
pursuant to article 183 of the law n(degrees) 66-537 of July 24, 1966 on
commercial companies is hereby canceled and that the subscription of the 5,000
new shares to be issued is reserved to Mr. Vincent Worms,
RESOLVED FURTHER that the exercise price per share is equal to the closing
price of one American Depositary Share of the Company on NASDAQ on June 17,
1998, times the noon buying rate for French Francs as quoted by the Federal
Reserve Bank of New York on such date,
RESOLVED FURTHER, to approve the special advantages granted to the holder
consisting in (i) the granting of such warrants without payment as
consideration and (ii) the implementing of a fixed exercise per share,
RESOLVED FURTHER, that the said warrants may be fully exercised on or after
June 18, 1999,
RESOLVED FURTHER, that in the event the holder ceases to be a Director of the
Company, the holder shall be entitled to exercise the warrants up to the number
of vested shares as of the date of termination of office as Director, for a
period of ninety (90) days as from such termination date,
53
<PAGE>
RESOLVED FURTHER, that in the event of merger or other change of control of
the Company, the holder of the warrant will be notified and given the same
information as if he were a shareholder in order to exercise, if he wishes so,
his subscription rights. Moreover, had he not acquired his full rights, the
Board of Directors may, as an exception to the foregoing, decide to increase
the number of warrants, which he may exercise,
RESOLVED FURTHER, that the warrants may be exercised in one or several lots,
but at the latest on the earlier of the two following dates: (i) June 18, 2003,
or (ii) in case of termination of the term of office as Director, within 90
days following such termination date,
RESOLVED FURTHER, that given the particular advantages attached to the share
warrants, the warrants shall not be transferable, except to the spouse, a
direct descendant or ascendant, a brother or a sister of the holder,
RESOLVED FURTHER, that the new shares will be subject to all provisions of
the by-laws, will be assimilated to shares issued previously and will entitle
the holder thereof to the rights attached to a share as from the first day of
the fiscal year of the final accomplishment of the capital increases,
RESOLVED FURTHER, to give to the Board of Directors all powers, within the
limits set above, in order:
--to verify the number of shares issued following the exercise of the
warrants and proceed to all formalities resulting from the relevant
capital increases and modify the by-laws accordingly,
--to make the necessary arrangements for ensuring that the protection of
the holder of the share warrants, in the event of any financial
transaction concerning the Company, is in compliance with all statutory
and regulatory provisions in effect,
--to carry out, by itself or through an agent, all acts and formalities in
order to finalize the capital increases that could be carried out
pursuant to the authorization of the resolution hereof, and to modify the
by-laws consequently, and in general, to take all necessary steps and
carry out any formal procedure useful to this issue,
RESOLVED FURTHER, in accordance with article 55 of the decree n(degrees) 67-
236 of March 23, 1967 to insert in article 6 of the by-laws the following in
order to indicate therein the recipient's identity of special advantages and
the nature of such advantages:
"Mr. Vincent Worms is a recipient of special advantages resulting from the
grant of 5,000 warrants giving the right to subscribe to 5,000 shares by the
shareholder meeting held on June 18, 1998. The special advantages consist in
(i) the granting of such warrants without payment as consideration and (ii) the
implementing of a fixed exercise price per share corresponding to the estimated
value of a share as of June 18, 1998".
54
<PAGE>
ANNEX A
BUSINESS OBJECTS S.A.
Societe anonyme
with a share capital of FF 16,904,147
Registered office : 1 Square Chaptal -
92300 Levallois-Perret
R.C.S. Nanterre B 379 821 994
======================
ORDINARY AND EXTRAORDINARY
GENERAL MEETING OF SHAREHOLDERS ON JUNE 18, 1998
REQUEST FOR INFORMATION FORM
I, the undersigned,
residing at
holder of [_______________] American Depositary Shares
hereby request the sending of the documents and information concerning the mixed
general meeting, as referred to in article 135 of the decree of March 23, 1967
on commercial companies.
Executed in
On
Documents to be returned to:
____________________________
____________________________
____________________________
Note : Pursuant to article 138 paragraph 3 of the decree of March 23, 1967,
shareholders may, by single request, obtain from the company the documents
mentioned in article 135 of the said decree upon the occurrence of each
subsequent general meeting of shareholders.
<PAGE>
ANNEX B
BUSINESS OBJECTS S.A.
1994 STOCK OPTION PLAN, PROPOSED TO BE AMENDED AS OF JUNE 18, 1998
In accordance with the authorization granted by the extraordinary
shareholders' meeting of August 17, 1994 the board of directors decided on
October 27, 1994 in conformity with the provisions of Articles 208-1 et. seq. of
the law No. 66-537 of July 24, 1966 concerning commercial companies, to adopt a
plan for the grant to Beneficiaries (defined below) of options giving rights to
subscribe shares of the Company. In furtherance of such decision the board of
directors has approved and adopted the Business Objects S.A. 1994 Stock Option
Plan, which was approved by the shareholders of the Company on June 21, 1995,
and amended in accordance with the resolutions adopted at the extraordinary
general meetings held on June 13, 1996, June 19, 1997 and June 18, 1998.
The terms and conditions of the Business Objects S.A. 1994 Stock Option
Plan, as amended, are set out below.
1. PURPOSES OF THE PLAN
--------------------
The purposes of this Stock Option Plan are:
- to attract and retain the best available personnel for positions of
substantial responsibility;
- to provide additional incentive to Beneficiaries; and
- to promote the success of the Company's business.
Options granted under the Plan to U.S. Beneficiaries are intended to be
Incentive Stock Options or Non-Statutory Stock Options, as determined by the
Administrator at the time of grant of an Option, and shall comply in all
respects with Applicable U.S. Laws in order that they may benefit from available
fiscal advantages.
2. DEFINITIONS. As used herein, the following definitions shall apply:
-----------
(a) "Share" means a share of the Common Stock, as adjusted from time to time in
-----
accordance with Section 11 of the Plan.
(b) "Director" means a member of the Board.
--------
(c) "ADR" means an American Depositary Receipt evidencing an American
---
Depositary Share corresponding to one Share of Common Stock.
(d) "Shareholder Authorization" means the authorizations given by the
-------------------------
shareholders of the Company in an extraordinary general meeting held on
August 17, 1994, June 13, 1996, June 19, 1997, and June 18, 1998 permitting
the Board to grant Stock Options.
(e) "Optionee" means a Beneficiary who holds at least one outstanding Option.
--------
(f) "Common Stock" means shares of common stock of the Company.
------------
(g) "Code" means the United States Internal Revenue Code of 1986, as amended.
----
(h) "Board" means the board of directors of the Company.
-----
-1-
<PAGE>
(i) "Option Agreement" means a written agreement between the Company and an
----------------
Optionee evidencing the terms and conditions of an individual Option grant.
The Option Agreement is subject to the terms and conditions of the Plan.
(j) "Notice of Grant" means a written notice evidencing certain terms and
---------------
conditions of an individual Option grant. The Notice of Grant is part of
the Option Agreement.
(k) "Beneficiary" means the Chief Executive Officer (President-Directeur
-----------
General) and Managing directors (Directeurs generaux) and any Officers or
other person employed by the Company or any Affiliated Company. Neither
service as a Director nor payment of a director's fee by the Company or an
Affiliated Company shall be sufficient to constitute "employment" by the
Company or an Affiliated Company.
(l) "U.S. Beneficiary" means a Beneficiary of the Company or an Affiliated
----------------
Company residing in the United States or otherwise subject to United
States' laws and regulations.
(m) "Exchange Act" means the United States Securities Exchange Act of 1934, as
------------
amended.
(n) "Subsidiary" means a "subsidiary corporation", whether now or hereafter
----------
existing, as defined in Section 424(f) of the Code.
(o) "Administrator" means the board of directors of the Company, as shall
-------------
administer the Plan in accordance with Section 4 of the Plan, it being
specified that pursuant to article 11.3 of the by-laws of the Company, any
board member who is eligible to receive Options is prohibited from voting
on decisions to grant Options if such board member is the Beneficiary of
such Options;
(p) "Disability" means total and permanent disability.
----------
(q) "Incentive Stock Option" means an Option granted only to U.S. Beneficiaries
----------------------
and intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code and the regulations promulgated thereunder.
(r) "Law" means French law no. 66-537 dated July 24, 1966 concerning commercial
---
companies.
(s) "Applicable U.S. Laws" means the legal requirements relating to the
--------------------
administration of stock option plans under state corporate and securities
laws and the Code in force in the United States of America.
(t) "Non-statutory Stock Option" means an Option which does not qualify as an
--------------------------
Incentive Stock Option.
(u) "Officer" means a Beneficiary who is an officer of the Company or an
-------
Affiliated Company within the meaning of Section 16 of the Exchange Act and
the rules and regulations promulgated thereunder.
(v) "Option" means a stock option granted pursuant to the Plan.
------
(w) "Plan" means this 1994 Stock Option Plan, as amended.
----
(x) "Option Exchange Program" means a program whereby outstanding Options are
-----------------------
surrendered in exchange for options with a lower exercise price.
-2-
<PAGE>
(y) "Continuous Status as a Beneficiary" means that the employment relationship
----------------------------------
with the Company or any Affiliated Company is not interrupted or
terminated. Continuous Status as a Beneficiary shall not be considered
interrupted in the case of (i) any leave of absence approved by the Company
or (ii) transfers between locations of the Company or between the Company
or any Affiliated Company, or any successor. A leave of absence approved by
the Company shall include sick leave, military leave, or any other personal
leave. For purposes of U.S. Beneficiaries and Incentive Stock Options, no
such leave may exceed ninety (90) days, unless reemployment upon expiration
of such leave is guaranteed by statute or contract, including Company
policies. If reemployment upon expiration of a leave of absence approved by
the Company is not so guaranteed, on the 91st day of such leave any
Incentive Stock Option held by a U.S. Beneficiary shall cease to be treated
as an Incentive Stock Option and shall be treated for U.S. tax purposes as
a Non-statutory Stock Option.
(z) "Company" means Business Objects S.A., a corporation organized under the
-------
laws of the Republic of France.
(aa) "Affiliated Company" means a company which conforms with the criteria set
------------------
forth in Article 208-4 of the Law as follows:
- companies of which at least one tenth (1/10) of the share capital or
voting rights is held directly or indirectly by the Company;
- companies which own directly or indirectly at least one tenth (1/10) of
the share capital or voting rights of the Company; and
- companies of which at least fifty percent (50%) of the share capital or
voting rights is held directly or indirectly by a company which owns
directly or indirectly at least fifty percent (50%) of the share capital
or voting rights of the Company.
(bb) "Parent" means a "parent corporation", whether now or hereafter existing,
------
as defined in Section 424(e) of the Code.
(cc) "Fair Market Value" means, as of any date, the French franc value of the
-----------------
U.S. $ value of one ADR corresponding to one Share of Common Stock
calculated on the basis of the noon buying rates reported by the Federal
Reserve Bank of New York (expressed in francs per $1.00).
The Fair Market Value shall be determined as follows:
(i) if the ADRs corresponding to Common Stock are listed on any
established stock exchange or a national market system, including
without limitation the Nasdaq National Market of the National
Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ")
System, the Fair Market Value of an ADR shall be the closing sales
price for such ADR (or the closing bid, if no sales were reported) as
quoted on such system or exchange (or the exchange with the greatest
volume of trading ADRs) on the last market trading day prior to the
day of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(ii) if the ADRs corresponding to Common Stock are quoted on the NASDAQ
System (but not on the Nasdaq National Market thereof) or are
regularly quoted by a recognized securities dealer but selling prices
are not reported, the Fair Market Value of an ADR shall be the mean
between the high bid and low asked prices for the ADRs
-3-
<PAGE>
on the last market trading day prior to the day of determination, as
reported in The Wall Street Journal or such other source as the
Administrator deems reliable;
(iii) in the absence of an established market for the ADRs or the Common
Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
3. STOCK SUBJECT TO THE PLAN
-------------------------
Subject to the provisions of Section 11 of the Plan, the maximum aggregate
number of Shares which may be optioned and issued under the Plan is 3,750,000
Shares.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unsubscribed Shares which were subject
thereto shall, unless the Plan shall have been terminated, become available for
future grant under the Plan.
4. ADMINISTRATION OF THE PLAN
--------------------------
(a) Procedure
---------
The Plan shall be administered by the Administrator.
(b) Powers of the Administrator. Subject to the provisions of the Law, the
---------------------------
Shareholder Authorization, the Plan and U.S. Applicable Laws, the Administrator
shall have the authority, in its discretion:
(i) to determine the Fair Market Value of the Common Stock, in accordance
with Section 2(cc) of the Plan;
(ii) to select the Beneficiaries to whom Options may be granted hereunder;
(iii) to determine whether and to what extent Options are granted
hereunder;
(iv) to determine the number of Shares of Common Stock to be covered by
each Option granted hereunder;
(v) to approve forms of agreement for use under the Plan;
(vi) to determine the terms and conditions, not inconsistent with the terms
and conditions of the Plan, of any Options granted hereunder. Such
terms and conditions include, but are not limited to, the exercise
price, the time or times when Options may be exercised (which may be
based on performance criteria), any vesting acceleration or waiver of
forfeiture restrictions, and any restriction or limitation regarding
any Option or the Shares of Common Stock relating thereto, based in
each case on such factors as the Administrator, in its sole
discretion, shall determine;
(vii) to construe and interpret the terms of the Plan and Options granted
pursuant to the Plan;
(viii) to prescribe, amend and rescind rules and regulations relating to the
Plan, including rules and regulations relating to sub-plans
established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;
-4-
<PAGE>
(ix) to modify or amend each Option (subject to Section 13(c) of the Plan),
including the discretionary authority to extend the post-termination
exercisability period of Options longer than is otherwise provided for
in the Plan;
(x) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Option previously
granted by the Administrator;
(xi) to decide and institute an Option Exchange Program;
(xii) to determine the terms and restrictions applicable to Options; and
(xiii) to make all other determinations deemed necessary or advisable for
administering the Plan.
(c) Effect of Administrator's Decision. The Administrator's decisions,
----------------------------------
determinations and interpretations shall be final and binding on all Optionees.
5. LIMITATIONS
-----------
(a) In the case of U.S. Beneficiaries, each Option shall be designated in
the Notice of Grant either as an Incentive Stock Option or as a Non-Statutory
Stock Option. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value:
(i) of Shares subject to an Optionee's Incentive Stock Options granted by
the Company or any Affiliated Company, which
(ii) become exercisable for the first time during any calendar year (under
all plans of the Company or any Affiliated Company)
exceeds $100,000, such excess Options shall be treated as Non-statutory Stock
Options. For purposes of this Section 5(a), Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market
Value of the Shares shall be determined as of the time of the grant.
(b) Neither the Plan nor any Option shall confer upon an Optionee any right
with respect to continuing the Optionee's employment with the Company or any
Affiliated Company, nor shall they interfere in any way with the Optionee's
right or the Company's or Affiliated Company's right, as the case may be, to
terminate such employment at any time, with or without cause.
(c) The following limitations shall apply to grants of Options to
Beneficiaries:
(i) No Beneficiary shall be granted, in any fiscal year of the Company,
Options to subscribe or purchase more than 150,000 Shares.
(ii) Notwithstanding the foregoing, the Company may also make additional
grants of up to 300,000 Shares to newly-hired Beneficiaries.
(iii) The foregoing limitations shall be adjusted proportionately in
connection with any change in the Company's capitalization as
described in Section 11.
(d) Other than as expressly provided hereunder, including Section 2 (a)(i)
above, no member of the Board of Directors shall be eligible to receive an
Option under the Plan.
-5-
<PAGE>
6. TERM OF PLAN
------------
The Plan is effective and Options may be granted as of October 27, 1994,
the date of the Plan's adoption by the Board. It shall continue in effect for a
term of five (5) years unless terminated earlier under Section 13 of the Plan,
so that Options may be granted hereunder until August 16, 1999.
7. TERM OF OPTION
--------------
The term of each Option shall be stated in the Notice of Grant, as ten (10)
years from the date of grant in accordance with the Shareholder Authorization.
Notwithstanding the foregoing, Options granted to Beneficiaries of the United
Kingdom subsidiary of the Company or Beneficiaries who are otherwise residents
of the United Kingdom or who are subject to the laws of the United Kingdom shall
have a term of seven (7) years less one day from the date of grant.
8. OPTION EXERCISE PRICE AND CONSIDERATION
---------------------------------------
(a) Exercise Price
--------------
The per Share exercise price for the Shares to be issued pursuant to
exercise of an Incentive Stock Option or a Non-statutory Stock Option shall be
determined by the Administrator subject to the following:
(A) In the case of an Option granted to a U.S. Beneficiary who, at the
time the Option is granted, owns stock representing more than ten percent (10%)
of the voting rights of all classes of stock of the Company or any Parent or
Subsidiary, to the extent such U.S. Beneficiary is permitted by the Law to
receive Option grants, the per Share exercise price shall be no less than 110%
of the Fair Market Value per Share.
(B) In the case of an Option granted to any Beneficiary other than a
U.S. Beneficiary described in paragraph (A) immediately above, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share.
(b) Waiting Period and Exercise Dates
---------------------------------
At the time an Option is granted, the Administrator shall fix the period
within which the Option may be exercised and shall determine any conditions
which must be satisfied before the Option may be exercised. In so doing, the
Administrator may specify that an Option may not be exercised until the
completion of a service period.
(c) Form of Consideration
---------------------
The consideration to be paid for the Shares to be issued upon exercise of
Options, including the method of payment, shall be determined by the
Administrator (and, in the case of an Incentive Stock Option, shall be
determined at the time of grant) and shall consist entirely of an amount in
French francs corresponding to the exercise price which may be paid either by :
(1) wire transfer ;
(2) check;
(3) delivery of a properly executed notice together with such other
documentation as the Administrator and the broker, if applicable,
shall require to effect exercise of the
-6-
<PAGE>
Option and delivery to the Company of the sale or loan proceeds
required to pay the exercise price; or
(4) any combination of the foregoing methods of payment.
9. EXERCISE OF OPTION
------------------
(a) Procedure for Exercise ; Rights as a Shareholder
------------------------------------------------
Any Option granted hereunder shall be exercisable according to the terms of
the Plan and at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed exercised when the Company receives : (i) written
notice of exercise (in accordance with the Option Agreement) together with a
share subscription form (bulletin de souscription) from the person entitled to
exercise the Option, and (ii) full payment for the Shares with respect to which
the Option is exercised. Full payment may consist of any consideration and
method of payment authorized by the Administrator and permitted by the Option
Agreement and the Plan. Shares issued upon exercise of an Option shall be issued
in the name of the Optionee or, if requested by the Optionee, in the name of the
Optionee and his or her spouse.
Upon exercise of any Option in accordance herewith, the Shares issued to
the Optionee shall be assimilated with all other Shares of the Company and shall
be entitled to dividends for the fiscal year in course during which the Option
is exercised.
Granting of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available for purposes of the Plan, by
the number of Shares as to which the Option is outstanding.
(b) Termination of Employment
-------------------------
Upon termination of an Optionee's Continuous Status as a Beneficiary,
other than upon the Optionee's death or Disability, the Optionee may exercise
his or her Option, but only within such period of time as is specified in the
Notice of Grant, and only to the extent that the Optionee was entitled to
exercise it at the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Notice of Grant). In
the absence of a specified time in the Notice of Grant, the Option shall remain
exercisable for ninety (90) days following the Optionee's termination of
Continuous Status as a Beneficiary. In the case of an Incentive Stock Option,
such period of time shall not exceed ninety (90) days from the date of
termination. If, at the date of termination, the Optionee is not entitled to
exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.
(c) Disability of Optionee
----------------------
In the event that an Optionee's Continuous Status as a Beneficiary
terminates as a result of the Optionee's Disability, the Optionee may exercise
his or her Option at any time within twelve (12) months from the date of such
termination, but only to the extent that the Optionee was entitled to exercise
it at the date of such termination (but in no event later than the expiration of
the term of such Option as set forth in the Notice of Grant). If, at the date of
termination, the Optionee is not entitled to exercise his or her entire Option,
the Shares covered by the unexercised portion of the
-7-
<PAGE>
Option shall revert to the Plan. If, after termination, the Optionee does not
exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan.
(d) Death of Optionee
-----------------
In the event of the death of an Optionee during the term of the
Option, the Option may be exercised at any time within twelve (12) months
following the date of death, by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent that the Optionee was entitled to exercise the Option at the date of
death. If, at the time of death, the Optionee was not entitled to exercise his
or her entire Option, the Shares covered by the unexercised portion of the
Option shall immediately revert to the Plan. If, after death, the Optionee's
estate or a person who acquired the right to exercise the Option by bequest or
inheritance does not exercise the Option within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.
10. NON-TRANSFERABILITY OF OPTIONS
------------------------------
An Option may not be sold, pledged, assigned, hypothecated, transferred or
disposed of in any manner other than by will or by laws of descent or
distribution and may be exercised, during the lifetime of the Optionee, only by
the Optionee.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, DISSOLUTION, MERGER OR ASSET
------------------------------------------------------------------------
SALE
----
(a) Changes in capitalization
-------------------------
In the event of the carrying out by the Company of any of the financial
operations pursuant to Article 208-5 of the Law as follows:
- issuance of shares to be subscribed for in cash or by set-off of
existing indebtedness offered exclusively to the shareholders;
- capitalization of reserves, profits, issuance premiums or the
distribution of free shares;
- issuance of bonds convertible or exchangeable into shares offered
exclusively to shareholders;
- distribution of reserves in cash or portfolio securities; and
- capital reduction motivated by losses;
the Administrator shall, in accordance with the conditions provided for in
Articles 174-8 et seq. of the decree n degree 67-236 of March 23, 1967
concerning commercial companies, effect an adjustment of the number and the
price of the Shares subject to Option grants.
(b) Dissolution or Liquidation
--------------------------
In the event of the proposed dissolution or liquidation of the Company, to
the extent that an Option has not been previously exercised, it will terminate
immediately prior to the consummation of such proposed action. The Administrator
may, in the exercise of its sole discretion in such instances, declare that any
Option shall terminate as of a date fixed by the Administrator and
-8-
<PAGE>
give each Optionee the right to exercise his or her Option as to which the
Option would not otherwise be exercisable.
(c) Merger or Asset Sale
--------------------
In the event of a merger of the Company with or into another
corporation, or the sale of substantially all of the assets of the Company, each
outstanding Option shall be assumed or an equivalent option or right shall be
substituted by the successor corporation or an affiliated company of the
successor corporation. The Administrator may, in lieu of such assumption or
substitution, provide for the Optionee the right to exercise the Option as to
the corresponding Shares as to which it would not otherwise be exercisable. If
the Administrator makes an Option exercisable in lieu of assumption or
substitution in the event of a merger or sale of assets, the Administrator shall
notify the Optionee that the Option shall be fully exercisable for a period of
fifteen (15) days from the date of such notice, and the Option will terminate
upon the expiration of such period. For the purposes of this paragraph, the
Option shall be considered assumed if, following the merger or sale of assets,
the Option or right confers the right to purchase, for each Share of Optioned
Stock subject to the Option immediately prior to the merger or sale of assets,
the consideration (whether stock, cash, or other securities or property)
received in the merger or sale of assets by holders of Common Stock for each
Share held on the effective date of the transaction (and if holders were offered
a choice of consideration, the type of consideration chosen by the holders of a
majority of the outstanding Shares); provided, however, that if such
consideration received in the merger or sale of assets was not solely common
stock of the successor corporation, or its Parent, the Administrator may, with
the consent of the successor corporation, provide for the consideration to be
received upon the exercise of the Option for each Share of Option Stock subject
to the Option, to be solely common stock of the successor corporation or its
Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the merger or sale of assets.
12. DATE OF GRANT
-------------
The date of grant of an Option shall be, for all purposes, the date on
which the Administrator makes the determination granting such Option, or such
other later date as is determined by the Administrator. Notice of the
determination shall be provided to each Optionee within a reasonable time after
the date of such grant.
13. AMENDMENT AND TERMINATION OF THE PLAN
-------------------------------------
(a) Amendment and Termination
-------------------------
The Administrator may at any time amend, alter, suspend or terminate
the Plan.
(b) Shareholder Approval
--------------------
The Company shall obtain shareholder approval of any Plan amendment to
the extent necessary and desirable to comply with Section 422 of the Code (or
any successor rule or statute or other applicable law, rule or regulation,
including the requirements of any exchange or quotation system on which the
Common Stock is listed or quoted). Such shareholder approval, if required, shall
be obtained in such a manner and to such a degree as is required by the
applicable law, rule or regulation.
-9-
<PAGE>
(c) Effect of Amendment or Termination
----------------------------------
No amendment, alteration, suspension or termination of the Plan shall
impair the rights of any Optionee, unless mutually agreed otherwise between the
Optionee and the Administrator, which agreement must be in writing and signed by
the Optionee and the Company.
14. CONDITIONS UPON ISSUANCE OF SHARES
----------------------------------
(a) Legal Compliance
----------------
Shares shall not be issued pursuant to the exercise of an Option
unless the exercise of such Option and the issuance and delivery of such Shares
shall comply with all relevant provisions of law including, without limitation,
the Law, the Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, Applicable U.S. Laws and the requirements of
any stock exchange or quotation system upon which the Shares may then be listed
or quoted.
(b) Investment Representations
--------------------------
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being subscribed only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is required.
15. LIABILITY OF COMPANY
--------------------
(a) Inability to Obtain Authority
-----------------------------
The inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is deemed by the Company's counsel to
be necessary to the lawful issuance of any Shares hereunder, shall relieve the
Company of any liability in respect of the failure to issue such Shares as to
which such requisite authority shall not have been obtained.
16. LAW AND JURISDICTION AND LANGUAGE
---------------------------------
This Plan shall be governed by and construed in accordance with the laws of
the Republic of France. The Tribunal de Grande Instance of Nanterre shall be
exclusively competent to determine any claim or dispute arising in connection
herewith.
The Company, the Board and the Optionees recognize that the Plan has been
prepared both in the French and the English language. The French version is the
version that binds the parties; notwithstanding this, the English version
represents an acceptable translation and, consequently, no official translation
will be required for the interpretation of the Plan.
*
* * *
-10-
<PAGE>
BUSINESS OBJECTS S.A.
1994 STOCK OPTION GRANT AGREEMENT
PART I
NOTICE OF STOCK OPTION GRANT
[Optionee's Name and Address]
You have been granted an option to subscribe Common Stock of the Company,
subject to the terms and conditions of the 1994 Stock Option Plan (the Plan) and
this Option Agreement, as follows. Unless otherwise defined herein, the terms
defined in the Plan shall have the same defined meanings in this Option
Agreement.
Grant Number: __________________
Date of Grant: __________________
Vesting Commencement Date: __________________
Exercise Price per Share: FF _______________
Total Number of Shares Granted: __________________
Total Exercise Price: FF _______________
Type of Option:/1/ [Incentive Stock Option]
[Nonstatutory Stock Option]
Term/Expiration Date: __________________
Vesting Schedule:
- ----------------
This Option may be exercised, in whole or in part, in accordance with
the following schedule:
[Specific vesting schedule to be inserted]
Termination Period:
- ------------------
This Option may be exercised for ninety (90) days after termination of
the Optionee's employment with the Company or the Affiliated Company as the case
may be. Upon the death or Disability of the Optionee, this Option may be
exercised for such longer period as provided in the Plan. Save as provided in
the Plan, in no event shall this Option be exercised later than the
Term/Expiration Date as provided above.
By your signature and the signature of the Company's representative
below, you and the Company agree that this Option is granted under and governed
by the terms and conditions of the Plan and this Option Agreement. The Optionee
has reviewed the Plan and this Option Agreement in their entirety, has had the
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understands all provisions of the Plan and Option Agreement.
The Optionee hereby agrees to accept as binding, conclusive and final all
decisions or interpretations of the Administrator upon any questions relating to
the Plan and Option Agreement. The Optionee further agrees to notify the Company
upon any change in the residence address indicated below.
The Company and the Optionee recognize that the Plan and this
Agreement have been prepared both in the French and the English language. The
French version is the version that binds the parties, which is to be signed by
the Optionee and returned to the Company; notwithstanding this, the
- ----------------------
/1/ For U.S. beneficiaries only.
-1-
<PAGE>
English version represents an acceptable translation and, consequently, no
official translation will be required for the interpretation of this agreement.
OPTIONEE: BUSINESS OBJECTS S.A.
__________________________ By:_______________________
Signature
__________________________ Title:____________________
Print Name
__________________________
Residence Address
__________________________
-2-
<PAGE>
BUSINESS OBJECTS S.A.
1994 STOCK OPTION GRANT AGREEMENT
PART II
TERMS AND CONDITIONS
1. Grant of Option. The Plan Administrator of the Company hereby
---------------
grants to the Optionee named in the Notice of Grant attached as Part I of this
Agreement (the "Optionee"), an option (the "Option") to subscribe the number of
Shares, as set forth in the Notice of Grant, at the exercise price per Share set
forth in the Notice of Grant (the "Exercise Price"), subject to the terms and
conditions of the 1994 Stock Option Plan, which is incorporated herein by
reference. Subject to Section 13(c) of the Plan, in the event of a conflict
between the terms and conditions of the Plan and the terms and conditions of
this Option Agreement, the terms and conditions of the Plan shall prevail.
If designated in the Notice of Grant as an Incentive Stock Option,
this Option is intended to qualify as an Incentive Stock Option under Section
422 of the Code. However, if this Option is intended to be an Incentive Stock
Option, to the extent that it exceeds the $100,000 rule of Code Section 422(d)
it shall be treated as a Non-statutory Stock Option.
2. Exercise of Option
------------------
(a) Right to Exercise. This Option is exercisable during its term in
-----------------
accordance with the Vesting Schedule set out in the Notice of Grant and the
applicable provisions of the Plan and this Option Agreement. In the event of
Optionee's death, Disability or other termination of Optionee's employment, the
exercisability of the Option is governed by the applicable provisions of the
Plan and this Option Agreement.
(b) Method of Exercise. This Option is exercisable by delivery of an
------------------
exercise notice, in the form attached hereto (the "Exercise Notice"), comprising
a share subscription form (bulletin de souscription) which shall state the
election to exercise the Option, the number of Shares in respect of which the
Option is being exercised (the "Exercised Shares"), and such other
representations and agreements as may be required by the Company pursuant to the
provisions of the Plan. The Exercise Notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Company or its
designated representative or by facsimile message to be immediately confirmed by
certified mail to the Company. The Exercise Notice shall be accompanied by
payment of the aggregate Exercise Price as to all Exercised Shares. This Option
shall be deemed to be exercised upon receipt by the Company of such fully
executed Exercise Notice accompanied by such aggregate Exercise Price.
No Shares shall be issued pursuant to the exercise of this Option
unless such issuance and exercise complies with all relevant provisions of law
and the requirements of any stock exchange or quotation service upon which the
Shares are then listed. Assuming such compliance, for income tax purposes the
Exercised Shares shall be considered transferred to the Optionee on the date the
Option is exercised with respect to such Exercised Shares.
Upon the issuance of the Shares, the Optionee shall be entitled to
receive such Shares in the form of American Depositary Shares by completing and
signing the appropriate box of the Exercise Notice attached hereto.
3. Method of Payment. Payment of the aggregate Exercise Price shall be by
-----------------
any of the following, or a combination thereof, at the election of the Optionee:
-3-
<PAGE>
(1) wire transfer;
(2) check;
(3) delivery of a properly executed notice together with such other
documentation as the Administrator and the broker, if applicable,
shall require to effect exercise of the Option and delivery to the
Company of the sale or loan proceeds required to pay the exercise
price; or
(4) any combination of the foregoing methods of payment.
4. Non-Transferability of Option. This Option may not be transferred in
-----------------------------
any manner otherwise than by will or by the laws of descent or distribution and
may be exercised during the lifetime of the Optionee only by the Optionee. The
terms of the Plan and this Option Agreement shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
5. Terms of Option. Subject as provided in the Plan, this Option may be
---------------
exercised only within the term set out in the Notice of Grant, and may be
exercised during such term only in accordance with the Plan and the terms of
this Option Agreement.
6. Entire Agreement; Governing Law. The Plan is incorporated herein by
-------------------------------
reference. The Plan and this Option Agreement constitute the entire agreement of
the parties with respect to the subject matter hereof and supersede in their
entirety all prior undertakings and agreements of the Company and Optionee with
respect to the subject matter hereof, and may not be modified adversely to the
Optionee's interest except by means of a writing signed by the Company and
Optionee. This agreement is governed by the laws of the Republic of France.
Any claim or dispute arising under the Plan or this Agreement shall be
subject to the exclusive jurisdiction of the Tribunal de Grande Instance of
Nanterre.
-4-
<PAGE>
CONSENT OF SPOUSE
(TO BE SIGNED BY RESIDENTS OF
CALIFORNIA AND OTHER COMMUNITY PROPERTY STATES)
The undersigned spouse of Optionee has read and hereby approves the
terms and conditions of the Plan and this Option Agreement. In consideration of
the Company's granting his or her spouse the right to subscribe Shares as set
forth in the Plan and this Option Agreement, the undersigned hereby agrees to be
irrevocably bound by the terms and conditions of the Plan and this Option
Agreement and further agrees that any community property interest shall be
similarly bound. The undersigned hereby appoints the undersigned's spouse as
attorney-in-fact for the undersigned with respect to any amendment or exercise
of rights under the Plan or this Option Agreement.
___________________________________
Spouse of Optionee
<PAGE>
BUSINESS OBJECTS S. A.
with a registered capital of French Francs 16,492,297
A Societe Anonyme
Registered office: 1 square Chaptal
92300 Levallois-Perret
France
R. C. S.: Nanterre B 379 821 994
OPTION EXERCISE NOTICE AND SUBSCRIPTION FORM
- --------------------------------------------------------------------------------
To: Client Services
AST StockPlan, Inc.
Fax to: (718) 921 8319
Then mail
original to: AST StockPlan, Inc.
40 Wall Street
New York, NY 10005
U.S.A.
Phone: (718) 921 8100
From: (Please print clearly)
- ------------------------------------- --------------------------
Name Date
Home Address
- ----------------------------- -------------- -------------------
Home Phone Business Phone Business Fax
- --------------------------------------------------------------------------------
-1-
<PAGE>
BACKGROUND EXPLANATION
Business Objects, S.A. (the "Company") has previously adopted three stock
option plans: the 1991 Option Plan, the 1993 Option Plan, and the 1994 Option
Plan (collectively, the "Plans").
The undersigned is the holder of certain options (the "Options") to purchase
the Company's Ordinary Shares (the "Shares"), nominal value of one French franc,
under the Plans. In connection with each stock option, the undersigned has
entered into a stock option agreement or agreements dated as of various grant
dates (the "Grant Dates").
The Company has previously entered into a Deposit Agreement dated September
22, 1994 with The Bank of New York, amended and reinstated on May 8, 1996.
Pursuant to this Deposit Agreement, Shares are deposited with Banque Paribas as
custodian for The Bank of New York. The Bank of New York then issues one
American Depositary Share ("ADS") for one Share. These ADSs can be held in a
brokerage account or actual certificates can be issued which are called American
Depositary Receipts ("ADRs").
The ADSs are publicly traded on the Nasdaq National Market system. Alex.
Brown & Sons Incorporated ("Alex. Brown") is a market maker in the ADSs.
Alex. Brown has agreed with the Company to facilitate the exercise of Options
and sale of ADSs by Company employees.
AST StockPlan, Inc. is a stock administration service which has been retained
by the Company to assist in the administration and monitoring of stock sales and
transfers and the exercise of Options.
# # #
Part 1 of this Option Exercise Notice and Subscription Form relates to
information required by the Company, Alex. Brown and AST StockPlan.
Part 2 of this Option Exercise Notice and Subscription Form relates to other
agreements, authorizations and representations required by U.S. and French law.
-2-
<PAGE>
=======================================
PART 1
=======================================
- -------------------------------------------------------------------------------
A. OPTIONS TO BE EXERCISED (purchased):
- -------------------------------------------------------------------------------
I hereby give notice effective as of the date set forth on the signature
page, that I wish to exercise the Option or Options granted to me at the per
share exercise prices set forth below, and to subscribe for such Shares.
<TABLE>
<CAPTION>
Plan Grant # Vested Options Granted Total
('91, '93 Date being Exercised Price per Ordinary Exercise Price
or '94) (Ordinary Shares) Share (in French Francs)
(French Francs)
<S> <C> <C> <C> <C>
X =
- ----------- --------- ----------------- -------------- -----------------
X =
- ----------- --------- ----------------- -------------- -----------------
X =
- ----------- --------- ----------------- -------------- -----------------
X =
- ----------- --------- ----------------- -------------- -----------------
</TABLE>
TOTAL NUMBER OF
OPTIONS EXERCISED:
---------------
TOTAL # OF ADSs
---------------
TOTAL EXERCISE PRICE DUE TO BUSINESS OBJECTS:
(in French Francs)
----------------
- -------------------------------------------------------------------------------
B. METHOD OF PAYMENT:
- -------------------------------------------------------------------------------
______ Cash Exercise - e.g. International Money Order or Eurocheque or Bank Wire
or Bank Draft or Personal check in French Francs. (Complete Section C1.)
I will be responsible to separately pay all applicable taxes and fees.
______ Cashless Exercise/Same-Day-Sale. I authorize Alex. Brown & Sons to
pay/loan out of my account to Business Objects the sum of (i) the total
exercise amount listed above /1/, and (ii) all applicable taxes and fees
(Complete Sections C2 and D.)
- ------------------
/1/ I understand that this amount shall be paid in U.S. dollars and will create
a temporary indebtedness owed by the Company. This temporary indebtedness
will be discharged by the issuance of the subscribed shares.
-3-
<PAGE>
- --------------------------------------------------------------------------------
C. EXERCISE (purchase) AND/OR SALE INSTRUCTIONS:
- --------------------------------------------------------------------------------
______ 1. Exercise and Hold - No Sale (Cash Exercise only).
___ Deliver ADSs to my Alex. Brown account number
______________________ and mail me acknowledgment at mailing
address indicated below.
___ Register shares in a shareholder account opened in my name with
the Company or its authorized intermediary.
___ Mail an ADR representing my ADSs to me at the mailing address
indicated below.
______ 2. Exercise and Sell - "Same Day Sale." Sell the number of ADSs per
my verbal orders to Alex. Brown. I understand that I must
------
exercise and sell enough ADSs at the market price equal to the
sum of (i) the aggregate option exercise price in Section A, and
(ii) all applicable taxes and fees. Treat the balance of the
ADSs as follows:
___ Hold the balance of my ADSs in my Alex. Brown account number
___________________ and mail me acknowledgment at mailing address
indicated below.
___ Mail the balance of my ADSs as an ADR to me at the mailing
address indicated below.
MAILING ADDRESS:
(Name) ______________________
(Address) _____________________
_____________________
-4-
<PAGE>
- --------------------------------------------------------------------------------
D. USE OF PROCEEDS FROM SALE (to be paid in U.S. $):
- --------------------------------------------------------------------------------
______ Credit my Alex. Brown money market fund account.
______ Mail proceeds from above sale to address listed below. (*)
(a U.S. $ check takes several weeks to clear internationally)
______ Wire proceeds to my bank account using the wire instructions listed
below. (**)
(there will be a US $30.00 wire charge)
(*) For Mailing:
(Name) __________________________
(Address)_________________________
_________________________
(**) For Wiring Proceeds:
(Bank Name)_______________________
(Bank Address)____________________
(Bank Code #)_____________________
(Bank Account #)__________________
-5-
<PAGE>
===============================
PART 2
===============================
- --------------------------------------------------------------------------------
E. ADS DELIVERY NOTICE:
- --------------------------------------------------------------------------------
I elect to have the Shares delivered in the form of American Depositary
Shares and instruct the Company to deposit them with The Bank of New York
pursuant to the Deposit Agreement, unless I have elected to have my Shares
registered in a shareholder account opened in my name with the Company or its
authorized intermediary.
- --------------------------------------------------------------------------------
F. REPRESENTATIONS AND WARRANTIES:
- --------------------------------------------------------------------------------
In connection with the exercise of the Option(s), I hereby represent,
warrant, covenant, acknowledge and agree as follows:
I have received and reviewed the Company's registration statement on
Form S-8 relating to the Plan(s).
I have received, read and understood the Plan(s) and the Option
Agreement(s) and agree to abide by and be bound by their terms and conditions.
My investment in the Company represented by the Shares is highly
speculative in nature and is subject to a high degree of risk of loss in whole
or in part. The amount of such investment is within my risk capital means and
is not so great in relation to my total financial resources as would jeopardize
my or my family's personal financial needs in the event such investment is lost
in whole or in part.
The Company has made no warranties or representations to me with
respect to the income tax consequences of the transactions contemplated hereby
and I am in no manner relying on the Company or its representatives for an
assessment of such tax consequences. I understand that I may suffer adverse tax
consequences as a result of my subscription or disposition of the Shares. I
have had the opportunity to consult with my tax consultant in connection with
the exercise of the options or disposition of the Shares.
Any sale of ADSs shall be made through my Alex Brown & Sons account.
I authorize Business Objects to withhold from the sales proceeds
income tax and/or social charges, if any, which I am liable for in connection
with the exercise of the options or the disposition of the Shares. In the
absence of sales proceeds, or in the event sales proceeds are not sufficient to
cover my personal income tax and/or social charges liability, I will reimburse
Business Objects for any and all amounts paid by Business Objects on my behalf.
-6-
<PAGE>
- --------------------------------------------------------------------------------
G. RIGHTS AS SHAREHOLDER:
- --------------------------------------------------------------------------------
Until the issuance (as evidenced by the appropriate entry on the books of
the Company or of an authorized intermediary on behalf of the Company) of the
Shares, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Shares, notwithstanding the exercise
of the Option. (No adjustment will be made for rights in respect of which the
record date is prior to the issuance date for the Shares, except as provided in
the Plans.)
- --------------------------------------------------------------------------------
H. ENTIRE AGREEMENT; GOVERNING LAW:
- --------------------------------------------------------------------------------
The Plan(s) and Option Agreement(s) are incorporated herein by reference.
This Exercise Notice and Subscription Form, the Plan(s) and the Option
Agreement(s) constitute the entire agreement of the parties with respect to the
subject matter hereof and supersede in their entirety all prior undertakings and
agreements of the Company and the undersigned with respect to the subject matter
hereof, and may not be modified adversely to the Optionee's interest except by
means of a writing signed by the Company and me. This agreement is governed by
the laws of the Republic of France.
I hereby understand that the instructions contained in this Option Exercise
Notice and Subscription Form are standing until changed in writing. I also
understand that all original forms needed for opening an account must be
received by Alex. Brown & Sons prior to sending out the proceeds.
NOTE: ABOVE SIGNATURE, PLEASE PRINT: "VALID FOR SUBSCRIPTION TO __________/2/
SHARES"
- ---------------------------------------- -------------------------
Employee Signature Date
- ---------------------------------------- -------------------------
Approved by Stock Administration Service Date
- ----------------
/2/ Insert total number of options being exercised from page 3.
-7-
<PAGE>
ANNEX C
BUSINESS OBJECTS S.A.
1995 INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN,
AS PROPOSED TO BE AMENDED AT THE SHAREHOLDERS MEETING OF JUNE 18, 1998
The following constitute the provisions of the 1995 International Employee
Stock Purchase Plan of Business Objects S.A, as amended pursuant to the
extraordinary general meetings of shareholders of June 13, 1996, June 19, 1997
and June 18, 1998.
1. Purpose. The purpose of the Plan is to provide employees of the Company and
-------
its Designated Subsidiaries with an opportunity to purchase Common Stock of the
Company through accumulated payroll deductions. It is the intention of the
company to have the Plan qualify as an "Employee Stock Purchase Plan" under
Section 423 of the Internal Revenue Code of 1986, as amended. The provisions of
the Plan, accordingly, shall be construed so as to extend and limit
participation in a manner consistent with the requirements of that section of
the Code.
2. Definitions.
-----------
(A) "ADR" shall mean an American Depositary Receipt evidencing
---
American Depositary Shares corresponding to shares of Common Stock.
(B) "ADS" shall mean an American Depositary Share corresponding to
---
shares of Common Stock.
(C) "Board" shall mean the Board of Directors of Business Objects S.A.
-----
(D) "Code" shall mean the Internal Revenue Code of 1986, as amended.
----
(E) "Common Stock" shall mean the Common Stock of the Company.
------------
(F) "Company" shall mean Business Objects S.A., a corporation
-------
organized under the laws of the Republic of France.
(G) "Compensation" shall mean all base straight time gross earnings
------------
and sales commissions, exclusive of payments for overtime, shift premium,
incentive compensation, incentive payments, bonuses and other compensation.
(H) "Custodian" shall mean Banque Paribas, or any successor or
---------
successors thereto.
(I) "Depositary" shall mean the Bank of New York, or any successor or
----------
successors thereto.
(J) "Designated Subsidiaries" shall mean the Subsidiaries which have
-----------------------
been designated by the Board from time to time in its sole discretion as
eligible to participate in the Plan.
(K) "Employee" shall mean any individual who is an Employee of the
--------
Company or a Designated Subsidiary for tax purposes. For purposes of the Plan,
the employment relationship shall be treated as continuing intact while the
individual is on sick leave or other leave of absence approved by the Company or
a Designated Subsidiary. Where the period of leave exceeds 90 days and the
individual's right to reemployment is not guaranteed either by statute or by
contract, the employment relationship will be deemed to have terminated on the
91st day of such leave.
(L) "Enrollment Date" shall mean the first day of each Offering
---------------
Period.
(M) "Exercise Date" shall mean the last day of each Offering Period.
-------------
1
<PAGE>
(N) "Fair Market Value" means, as of any date, the French franc value
-----------------
of the U.S. dollar value of of one ADS (or such other fraction of an ADS which
corresponds, on the last Trading Day prior to the first day of the Offering
Period, or on the last Trading Day of the Offering Period, to one Share of
Common Stock) calculated with reference to the noon buying rate reported by the
----
Federal Reserve Bank of New York (expressed in francs per $1.00) on the Exercise
Date.
The U.S. $ value of one ADS (or such other appropriate fraction of an
ADS as determined in the immediately preceding paragraph) corresponding to one
Share of Common Stock shall be determined as follows:
(1) If the ADSs corresponding to Common Stock are listed on any
established stock exchange or a national market system, including without
limitation the Nasdaq National Market of the National Association of Securities
Dealers, Inc. Automated Quotation ("NASDAQ") System, the Fair Market Value of an
ADS shall be the closing price for such ADS (or the closing bid, if no sales
were reported) as quoted on such system or exchange (or the exchange with the
greatest volume of trading ADSs) on the last Trading Day prior to the first day
of the Offering Period, or on the last Trading Day of the Offering Period, as
reported in The Wall Street Journal or such other source as the Board deems
reliable;
(2) If the ADSs corresponding to Common Stock are quoted on the
NASDAQ System (but not on the Nasdaq National Market thereof) or are regularly
quoted by a recognized securities dealer but selling prices are not reported,
the Fair Market value of an ADS shall be the mean between the high bid and low
asked prices for the ADSs on the last Trading Day prior to the first day of the
Offering Period, or on the last Trading Day of the Offering Period, as reported
in The Wall Street Journal or such other source as the Board deems reliable;
(3) In the absence of an established market for the ADSs or
the Common Stock, the Fair Market Value shall be determined in good faith by the
Board.
(O) "Offering Period" shall mean a period of approximately six (6)
---------------
months, commencing on the first Trading Day on or after April 1 and terminating
on the last Trading Day in the period ending the following September 30, or
commencing on the first Trading Day on or after October 1 and terminating on the
last Trading Day in the period ending the following March 31, at the beginning
of which an option may be granted and at the end of which an option may be
exercised pursuant to the Plan. The duration of Offering Periods may be changed
pursuant to Section 4 of this Plan.
(P) "Plan" shall mean this 1995 International Employee Stock Purchase
----
Plan.
(Q) "Purchase Price" shall mean an amount equal to 85% of the Fair
--------------
Market Value of a share of Common Stock on the last Trading Day prior to the
Enrollment Date or to 85% of the Fair Market Value of a share of Common Stock on
the Exercise Date, whichever is lower.
(R) "Reserves" shall mean the maximum number of shares of Common Stock
--------
which have been authorized for issuance under the Plan pursuant to Section 12
hereof.
(S) "Subsidiary" shall mean a corporation, domestic or foreign, of
----------
which not less than 50% of the voting rights are held by the Company or a
Subsidiary, whether or not such corporation now exists or is hereafter organized
or acquired by the Company or a Subsidiary.
(T) "Trading Day" shall mean a day on which national stock exchanges
-----------
and the National Association of Securities Dealers Automated Quotation (NASDAQ)
System are open for trading.
(U) "Trust" shall mean the trust created by the Business Objects S.A.
-----
Employee Benefits Trust Agreement, attached hereto as Exhibit C.
(V) "Trustee" shall mean the trustee or trustees of the Trust.
-------
2
<PAGE>
3. Eligibility.
-----------
(A) Any Employee (as defined in Section 2(k)), who shall be employed
by the Company or a Designated Subsidiary on a given Enrollment Date shall be
eligible to participate in the Plan.
(B) Any provisions of the Plan to the contrary notwithstanding, no
Employee shall be granted an option under the Plan (i) to the extent,
immediately after the grant, such Employee (or any other person whose stock
would be attributed to such Employee pursuant to Section 424(d) of the Code)
would own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined
voting power or value of all classes of the capital stock of the Company or of
any Subsidiary, or (ii) to the extent his or her rights to purchase stock under
all employee stock purchase plans of the Company and its Subsidiaries would
accrue at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) worth of
stock (determined with reference to the fair market value of the ADSs at the
time such option is granted) for each calendar year in which such option is
outstanding at any time.
4. Offering Periods. The Plan shall be implemented by consecutive
----------------
Offering Periods with a new Offering Period commencing on the first Trading Day
on or after April 1 and October 1 each year, or on such other date as the Board
shall determine, and continuing thereafter until terminated in accordance with
Section 19 hereof. The Board shall have the power to change the duration of
Offering Periods (including the commencement dates thereof) with respect to
future offerings without shareholder approval if such change is announced at
least fifteen (15) days prior to the scheduled beginning of the first Offering
Period to be affected thereafter.
5. Participation.
-------------
(A) An eligible Employee may become a participant in the Plan by
completing a subscription agreement authorizing payroll deductions in the form
of Exhibit A to this Plan and filing it with the Company's or a Designated
Subsidiary's payroll office prior to the applicable Enrollment Date.
(B) Payroll deductions for a participant shall commence on the first
payroll following the Enrollment Date and shall end on the last payroll in the
Offering Period to which such authorization is applicable, unless sooner
terminated by the participant as provided in Section 10 hereof.
6. Payroll Deductions.
------------------
(A) At the time a participant files his or her subscription agreement,
he or she shall elect to have payroll deductions made on each pay day during the
Offering Period in an amount, together with amounts contributed under the
Company's Plan d'Epargne d'Entreprise (the "Employee Savings Plan"), not to
exceed ten percent (10%) of the Compensation which he or she receives on each
pay day during the Offering Period.
(B) All payroll deductions made for a participant shall be credited to
his or her account under the Plan and will be withheld in whole percentages
only. After the last payday in an Offering Period such payroll deductions shall
be transferred to the Trust as soon as practicable. Funds may be advanced by a
Designated Subsidiary to the Trust, or by the Trust to the Company, as necessary
or convenient under any applicable law or regulation. A participant may not
make any additional payments into his or her account, either with the Company, a
Designated Subsidiary, or the Trust.
(C) A participant may discontinue his or her participation in the Plan
as provided in Section 10 hereof, or may increase or decrease the rate of his or
her payroll deductions during the Offering Period by filing with the Company or
a Designated Subsidiary a new subscription agreement authorizing a change in
payroll deduction rate. The Board or board of directors of a Subsidiary, as the
case may be, may, in its discretion, limit the number of participation rate
changes during any Offering Period. The change in rate shall be effective with
the first full payroll period following five (5) business days after the
Company's or Designated Subsidiary's receipt of the new subscription agreement
unless the Company or Designated Subsidiary elects to process a given change in
participation more quickly. A participant's subscription agreement shall remain
in effect for successive Offering Periods unless terminated as provided in
Section 10 hereof.
3
<PAGE>
(D) Notwithstanding the foregoing, to the extent necessary to comply
with Section 423(b)(8) of the Code and Section 3(b) hereof, a participant's
payroll deductions may be decreased to 0% at such time during any Offering
Period which is scheduled to end during the current calendar year (the "Current
Offering Period") in which the aggregate of all payroll deductions which were
previously used to purchase stock under the Plan in a prior Offering Period
which ended during that calendar year plus all payroll deductions accumulated
with respect to the Current Offering Period equal $21,250. Payroll deductions
shall recommence at the rate provided in such participant's subscription
agreement at the beginning of the first Offering Period which is scheduled to
end in the following calendar year, unless terminated by the participant as
provided in Section 10 hereof.
(E) At the time the option is exercised, in whole or in part, or at
the time some or all of the Company's Common Stock issued under the Plan is
disposed of, the participant must make adequate provision for the Company's or
Designated Subsidiary's federal, state, or other tax withholding obligations, if
any, which arise upon the exercise of the option or the disposition of the
Common Stock. At any time, the Company or Designated Subsidiary may, if
required by the laws of the country of residence of the participant, withhold
from the participant's compensation the amount necessary for the Company or
Designated Subsidiary to meet applicable withholding obligations, including any
withholding required to make available to the Company or Designated Subsidiary
any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee.
7. Grant of Option. On the Enrollment Date of each Offering Period, each
---------------
eligible Employee participating in such Offering Period shall be granted an
option to purchase on the Exercise Date of such Offering Period (at the
applicable Purchase Price) up to a number of shares of the Company's Common
Stock (in the form of ADSs) determined by dividing such Employee's payroll
deductions accumulated and transferred to the Trust on or prior to such Exercise
Date by the applicable Purchase Price; provided that in no event shall an
Employee be permitted to purchase during each Offering Period more than 5,000
shares of Common Stock, subject to adjustment as provided in Section 18 hereof;
and provided further, that such purchase shall be subject to the limitations set
forth in Sections 3(b) and 12 hereof. Exercise of the option shall occur as
provided in Section 8 hereof, unless the participant has withdrawn pursuant to
Section 10 hereof, and shall expire on the last day of the Offering Period.
8. Exercise of Option. With respect to each Exercise Date, the Company
------------------
shall issue shares of Common Stock to the Trust in accordance with Section 1.3
of the Trust, sufficient to meet its obligations to participating Employees
under the Plan. Unless a participant withdraws from the Plan as provided in
Section 10 hereof, notice of exercise of his or her option shall be deemed to
have been given by the participant and his or her option for the purchase of
shares of Common Stock (in the form of ADSs) shall be exercised automatically by
the Trustee on the Exercise Date, and the maximum number of full shares subject
to such option shall be purchased for such participant by the Trustee at the
applicable Purchase Price with the accumulated payroll deductions in his or her
account with the Trust, and transferred to the Custodian to be deposited by the
Custodian with the Depositary as ADSs; provided, however, no shares shall be
purchased which would result in the Employee receiving a fractional ADS; any
payroll deductions accumulated in a participant's account which are not
sufficient to purchase a full ADS shall be retained in the participant's account
for use in the subsequent Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10 hereof. Any other monies left over in a
participant's account (whether due to withdrawal by the participant from the
Plan pursuant to Section 10, termination of the Plan in accordance with Section
19, or otherwise) after the Exercise Date shall be returned to the participant.
During a participant's lifetime, a participant's option to purchase ADSs
hereunder is exercisable only by him or her.
9. Delivery. As promptly as practicable after each Exercise Date on which
--------
a purchase of shares occurs, the Trustee shall arrange the delivery of ADSs to
the Depositary by the Custodian representing the shares purchased upon exercise
of options by the Trustee for the participating Employees.
10. Withdrawal; Termination of Employment.
-------------------------------------
(A) A participant may withdraw all but not less than all the payroll
deductions credited to his or her account with the Company or Designated
Subsidiary at any time prior to the transfer of funds made pursuant to Section
6(b) by giving written notice to the Company or Designated Subsidiary in the
form of Exhibit B to this Plan. All of the participant's payroll deductions
credited to his or her account will be paid to such participant promptly after
receipt of notice of withdrawal and such participant's option for the Offering
Period will be automatically terminated, and no further payroll deductions for
the purchase of ADSs will be made during the Offering Period. If a participant
withdraws from an Offering Period, payroll deductions will not resume at the
beginning of
4
<PAGE>
the succeeding Offering Period unless the participant delivers to the Company or
Designated Subsidiary a new subscription agreement.
(B) Upon a participant's ceasing to be an Employee (as defined in
Section 2(k) hereof) for any reason, he or she will be deemed to have elected to
withdraw from the Plan and the payroll deductions credited to such participant's
account during the Offering Period but not yet used to exercise the option will
be returned to such participant or, in the case of his or her death, to the
person or persons entitled thereto under Section 14 hereof, and such
participant's option will be automatically terminated; provided, however, that
any payroll deductions held by the Trust in an individual account for an
Employee shall be subject to the terms of such Trust. The preceding sentence
notwithstanding, a participant who receives payment in lieu of notice of
termination of employment shall be treated as continuing to be an Employee for
the participant's customary number of hours per week of employment during the
period in which the participant is subject to such payment in lieu of notice.
(C) A participant's withdrawal from an Offering Period will not have
any effect upon his or her eligibility to participate in any similar plan which
may hereafter be adopted by the Company or a Designated Subsidiary or in
succeeding Offering Periods which commence after the termination of the Offering
Period from which the participant withdraws.
11. Interest. No interest shall accrue on the payroll deductions of a
--------
participant in the Plan.
12. Stock.
-----
(A) The maximum number of shares of the Company's Common Stock
authorized for sale under the Plan shall be 218,132 shares, subject to
adjustment upon changes in capitalization of the Company as provided in Section
18 hereof. Capital increases to meet the Company's obligations under the Plan
shall be determined and approved at extraordinary shareholders' meeting to be
held at the same time as the annual shareholders' meetings of the Company, as
necessary.
(B) The Board shall from time to time reserve and issue to the Trust a
number of shares sufficient to meet its obligations under the current Offering
Period of the Plan. If on a given Exercise Date the number of shares with
respect to which options are to be exercised exceeds the number of shares then
available under the Plan, the Company shall distribute all of the shares
remaining available for purchase under the Plan to the Trust, which shall make a
pro rata allocation to the participating Employees.
(C) The participant will have no interest or voting rights in shares
covered by his or her option until such option has been exercised.
(D) ADSs to be delivered to a participant under the Plan will be
registered in the name of the participant or in the name of the participant and
his or her spouse, or in street name to be deposited with a broker.
13. Administration.
--------------
(A) Administrative Body. The Plan shall be administered by the Board
-------------------
(or a committee thereof) or the board of directors of a participating Subsidiary
(or a committee thereof), as the case may be. Such board or committee shall
have full and exclusive discretionary authority to construe, interpret and apply
the terms of the Plan, to determine eligibility and to adjudicate all disputed
claims filed under the Plan with respect to any Employee of such Company or
Subsidiary; provided, however, that any such construction, interpretation,
application, determination and/or adjudication shall be subject to any terms,
constructions, conditions, provisions, interpretations, determinations,
adjudications, or decisions as may be adopted or made by the Board from time to
time. Every finding, decision and determination made by the Board or its
committee shall, to the full extent permitted by law, be final and binding upon
all parties.
(B) Rule 16b-3 Limitations. Notwithstanding the provisions of
----------------------
Subsection (a) of this Section 13, in the event that Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or
any successor provision ("Rule 16b-3") provides specific requirements for the
administrators of plans of this type, and Rule 16b-3 or such successor provision
is applicable to the Plan, the Plan shall be administered only by such a body
and in such a manner as shall comply with the applicable requirements of
5
<PAGE>
Rule 16b-3. Unless permitted by Rule 16b-3, no discretion concerning decisions
regarding the Plan shall be afforded to any committee or person that is not
"disinterested" as that term is used in Rule 16b-3.
14. Designation of Beneficiary.
--------------------------
(A) A participant, except for a participant who is an Employee of
Business Objects U.K., may file a written designation of a beneficiary who is to
receive any ADSs and cash, if any, from the participant's account under the Plan
in the event of such participant's death subsequent to an Exercise Date on which
the option is exercised but prior to delivery to such participant of such ADSs
and cash. In addition, a participant may file a written designation of a
beneficiary who is to receive any cash from the participant's account under the
Plan in the event of such participant's death prior to exercise of the option.
If a participant is married and the designated beneficiary is not the spouse,
spousal consent shall be required for such designation to be effective.
(B) Such designation of beneficiary may be changed by the participant
at any time by written notice. In the event of the death of a participant and
in the absence of a beneficiary validly designated under the Plan who is living
at the time of such participant's death, the Company shall cause such ADSs
and/or cash to be delivered to the executor or administrator of the estate of
the participant, or if no such executor or administrator has been appointed (to
the knowledge of the Company), the Company, in its discretion, may cause such
ADSs and/or cash to be delivered to the spouse or to any one or more dependents
or relatives of the participant, or if no spouse, dependent or relative is known
to the Company, then to such other person as the Company may designate.
15. Transferability. Neither payroll deductions credited to a
---------------
participant's account nor any rights with regard to the exercise of an option or
to receive ADSs under the Plan may be assigned, transferred, pledged or
otherwise disposed of in any way (other than by will, the laws of descent and
distribution or as provided in Section 14 hereof) by the participant. Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election to withdraw
funds from an Offering Period in accordance with Section 10 hereof.
16. Use of Funds. All payroll deductions received or held by the Company
------------
or Subsidiary under the Plan for its Employees may be used by the Company or
such Subsidiary, as the case may be, for any corporate purpose, and the Company
or Subsidiary shall not be obligated to segregate such payroll deductions.
Notwithstanding the preceding sentence, all payroll deductions transferred to
and held by the Trust shall be used solely by the Trust as specified in the
Trust agreement attached hereto as Exhibit C.
17. Reports. Individual accounts will be maintained for each
-------
participating Employee by the Company or the Designated Subsidiary as well as
the Trust. Statements of account will be given to participating Employees at
least annually, which statements will set forth the amounts of payroll
deductions, the Purchase Price, the number of ADSs purchased and the remaining
cash balance, if any, for the period covered by such statement.
18. Adjustments Upon Changes in Capitalization.
------------------------------------------
(A) Changes in Capitalization. Subject to any required action by the
-------------------------
shareholders of the Company, the Reserves shall be proportionately adjusted for
any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of shares of Common Stock effected without receipt of consideration by
the Company; provided, however, that conversion of any convertible securities of
the Company shall not be deemed to have been "effected without receipt of
consideration". Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly
provided herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or price
of shares of Common Stock subject to an option.
(B) Dissolution or Liquidation. In the event of the proposed
--------------------------
dissolution or liquidation of the Company, the Offering Period and the Plan will
terminate immediately prior to the consummation of such proposed action and any
and all accumulated payroll deductions will be returned to the participating
Employees in accordance with Section 19(a), unless otherwise provided by the
Board.
6
<PAGE>
(C) Merger or Asset Sale. In the event of a proposed sale of all or
--------------------
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, each option under the Plan shall be assumed or
an equivalent option shall be substituted by such successor corporation or a
parent or subsidiary of such successor corporation, unless the Board determines,
in the exercise of its sole discretion and in lieu of such assumption or
substitution, to shorten the Offering Period then in progress by setting a new
Exercise Date (the "New Exercise Date") or to cancel each outstanding right to
purchase and refund all sums collected from participants during the Offering
Period then in progress. If the Board shortens the Offering Period then in
progress in lieu of assumption or substitution in the event of a merger or sale
of assets, the Board shall notify each participant in writing, at least ten (10)
business days prior to the New Exercise Date, that the Exercise Date for his
option has been changed to the New Exercise Date and that his option will be
exercised automatically on the New Exercise Date, unless prior to such date he
has withdrawn from the Offering Period as provided in Section 10 hereof. For
purposes of this paragraph, an option granted under the Plan shall be deemed to
be assumed if, following the sale of assets or merger, the option confers the
right to purchase, for each share of option stock subject to the option
immediately prior to the sale of assets or merger, the consideration (whether
stock, cash or other securities or property) received in the sale of assets or
merger by holders of Common Stock for each share of Common Stock held on the
effective date of the transaction (and if such holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of
the outstanding shares of Common Stock); provided, however, that if such
consideration received in the sale of assets or merger was not solely common
stock of the successor corporation or its parent (as defined in Section 424(e)
of the Code), the Board may, with the consent of the successor corporation,
provide for the consideration to be received upon exercise of the option to be
solely common stock of the successor corporation or its parent equal in fair
market value to the per share consideration received by holders of Common Stock
and the sale of assets or merger.
The Board may, if it so determines in the exercise of its sole discretion,
also make provision for adjusting the Reserves in the event the Company effects
one or more reorganizations, recapitalization, rights offerings or other
increases or reductions of shares of its outstanding Common Stock, and in the
event of the Company being consolidated with or merged into any other
corporation.
19. Amendment or Termination.
------------------------
(A) The Board, but not the board of directors of a Subsidiary, may at
any time and for any reason terminate or amend the Plan. Except as provided in
Section 18 hereof, no such termination can affect options previously granted,
provided that an Offering Period may be terminated by the Board on any Exercise
Date if the Board determines that the termination of the Plan is in the best
interests of the Company and its shareholders. In the event that an Offering
Period is terminated (or the Plan is terminated during an Offering Period), any
and all accumulated payroll deductions shall be returned to the participating
Employees. Except as provided in Section 18 hereof, no amendment may make any
change in any option theretofore granted which adversely affects the rights of
any participant. To the extent necessary to comply with Rule 16b-3 or under
Section 423 of the Code (or any successor rule or provision or any other
applicable law or regulation), the Company shall obtain shareholder approval in
such a manner and to such a degree as required.
(B) Without shareholder consent and without regard to whether any
participant rights may be considered to have been "adversely affected," the
Board (or its committee) shall be entitled to change the Offering Periods, limit
the frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a
currency other than U.S. dollars, permit payroll withholding in excess of the
amount designated by a participant in order to adjust for delays or mistakes in
the Company's or Designated Subsidiary's processing of properly completed
withholding elections, establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that amounts applied toward
the purchase of Common Stock for each participant properly correspond with
amounts withheld from the participant's Compensation, and establish such other
limitations or procedures as the Board (or its committee) determines in its sole
discretion advisable which are consistent with the Plan.
20. Notices. All notices or other communications by a participant to the
-------
Company or Designated Subsidiary under or in connection with the Plan shall be
deemed to have been duly given when received in the form specified by the
Company or Designated Subsidiary at the location, or by the person, designated
by the Company or Designated Subsidiary for the receipt thereof.
7
<PAGE>
21. Conditions Upon Issuance. Neither ADSs nor ADRs shall be issued by
------------------------
the Depositary with respect to an option unless the exercise of such option and
the issuance and delivery of such ADSs or ADRs pursuant thereto, as well as the
issuance of shares from the Company to the Trust and the transfer of shares from
the Trust to the Custodian, shall comply with all applicable provisions of law,
domestic or foreign, including, without limitation, the Securities Act of 1933,
as amended, the Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder, French Law No. 66-537 of July 24, 1966
relating to commercial companies, and the requirements of any stock exchange
upon which the ADSs may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
As a condition to the exercise of an option, the Company or Trustee may
require the person exercising such option to represent and warrant at the time
of any such exercise that the ADSs are being purchased only for investment and
without any present intention to sell or distribute such ADSs if, in the opinion
of counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.
22. Term of Plan. The Plan shall become effective upon the earlier to
------------
occur of its adoption by the Board of Directors or its approval by the
shareholders of the Company. It shall continue in effect for a term of ten (10)
years unless sooner terminated under Section 19 hereof.
23. Governing Law and Jurisdiction. This Plan shall be governed by and
------------------------------
construed in accordance with the laws of the State of California, except for
that body of law pertaining to conflicts of laws.
8
<PAGE>
EXHIBIT A
---------
BUSINESS OBJECTS S.A.
---------------------
1995 INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
PARTICIPATION AGREEMENT
[U.S. EMPLOYEES ONLY]
_____ Original Application Enrollment Date: __________
_____ Change in Payroll Deduction Rate
_____ Change of Beneficiary(ies)
1. _____________________________________ hereby elects to participate in the
Business Objects S.A. 1995 International Employee Stock Purchase Plan (the
"International Employee Stock Purchase Plan") and to purchase ADSs of the
Company in accordance with this Participation Agreement and the
International Employee Stock Purchase Plan.
2. I hereby authorize the Company or any Designated Subsidiary of which I am
an Employee to make payroll deductions from each paycheck in the amount of
____% of my Compensation on each payday (together with amounts contributed
under the Employee Savings Plan, not to exceed 10%) during the Offering
Period in accordance with the International Employee Stock Purchase Plan.
(Please note that only whole percentages are permitted.)
3. I understand that said payroll deductions shall be accumulated for the
purchase of ADSs at the applicable Purchase Price determined in accordance
with the International Employee Stock Purchase Plan. I understand that if
I do not withdraw from an Offering Period, any accumulated payroll
deductions will be used by the Trustee to automatically exercise my option.
4. I have received a copy of the complete "International Employee Stock
Purchase Plan." I understand that my participation in the International
Employee Stock Purchase Plan is in all respects subject to the terms of the
Plan. I understand that the grant of the option by the Company under this
Participation Agreement may be subject to obtaining shareholder approval of
the International Employee Stock Purchase Plan, any Exhibit thereto and/or
any amendment thereto.
5. ADSs purchased for me under the Employee Stock Purchase Plan should be
issued in the name(s) of (Employee or Employee and Spouse Only):
__________________________________________
6. I understand that if I dispose of any ADSs received by me pursuant to the
Plan within 2 years after the Enrollment Date (the first day of the
Offering Period during which I purchased such ADSs), I will be treated for
United States federal income tax purposes (if subject to such taxes) as
having received ordinary income at the time of such disposition in an
amount equal to the excess of the fair market value of the ADSs at the time
such ADSs were purchased by me over the price which I paid for the ADSs. I
-
hereby agree to notify the Company in writing within 30 days after the date
---------------------------------------------------------------------------
of any disposition of ADSs and I will make adequate provision for Federal,
--------------------------------------------------------------------------
state or other tax withholding obligations, if any, which arise upon the
------------------------------------------------------------------------
disposition of the ADSs. The Company or any of its Subsidiaries may, but
-----------------------
will not be obligated to, withhold from my compensation the amount
necessary to meet any applicable withholding obligation including any
withholding necessary to make available to the Company or any of its
Subsidiaries any tax deductions or benefits attributable to sale or early
disposition of ADSs by me. If I dispose of such ADSs at any time after the
expiration of the 2-year holding period, I understand that I will be
treated for United States federal income tax purposes as having received
income only at the time of such disposition, and that such income will be
taxed as ordinary income only to the extent of an amount equal to the
lesser of (1) the
9
<PAGE>
excess of the fair market value of the ADSs at the time of such disposition
over the purchase price which I paid for the ADSs, or (2) 15% of the fair
market value of the ADSs on the first day of the Offering Period. The
remainder of the gain, if any, recognized on such disposition will be taxed
as capital gain.
7. I hereby agree to be bound by the terms of the International Employee Stock
Purchase Plan. The effectiveness of this Participation Agreement is
dependent upon my eligibility to participate in the International Employee
Stock Purchase Plan.
8. In the event of my death, I hereby designate the following as my
beneficiary(ies) to receive all payments and ADSs due me under the Employee
Stock Purchase Plan:
NAME: (Please print) _________________________________________________
(First) (Middle) (Last)
______________________________________________________________
Relationship to Employee (Address)
_____________________________________
(Address)
NAME: (Please print) _________________________________________________
(First) (Middle) (Last)
______________________________________________________________
Relationship to Employee (Address)
_____________________________________
(Address)
Employee's Social
Security Number: _____________________________________
Employee's Address: _____________________________________
_____________________________________
I UNDERSTAND THAT THIS PARTICIPATION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Dated: ___________________ _____________________________________
Signature of Employee
_____________________________________
Spouse's Signature
(If beneficiary other than spouse)
10
<PAGE>
EXHIBIT A-1
-----------
BUSINESS OBJECTS S.A.
---------------------
1995 INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
PARTICIPATION AGREEMENT
[NON-U.S. EMPLOYEES]
_____ Original Application Enrollment Date: __________
_____ Change in Payroll Deduction Rate
1. _____________________________________ hereby elects to participate in the
Business Objects S.A. 1995 International Employee Stock Purchase Plan (the
"International Employee Stock Purchase Plan").
2. I hereby authorize the Company or any Designated Subsidiary of which I am
an Employee to make payroll deductions from each paycheck in the amount of
____% of my Compensation on each payday (together with amounts contributed
under the Company's Employee Savings Plan, not to exceed 10%) during the
Offering Period in accordance with the International Employee Stock
Purchase Plan. (Please note that only whole percentages are permitted.)
3. I understand that said payroll deductions shall be accumulated in order to
exercise the option(s) granted to me pursuant to the International Employee
Stock Purchase Plan and to purchase ADSs representing shares of Common
Stock at the applicable Purchase Price determined in accordance with the
International Employee Stock Purchase Plan. I understand that if I do not
elect to withdraw from an Offering Period, any accumulated payroll
deductions will be used by the Trustee to automatically exercise my option.
4. I have received a copy of the complete International Employee Stock
Purchase Plan. I understand that my participation in the International
Employee Stock Purchase Plan is in all respects subject to the terms of the
Plan. I understand that the grant of the option by the Company under this
Participation Agreement may be subject to obtaining shareholder approval of
the International Employee Stock Purchase Plan, any Exhibit thereto and/or
any amendment thereto.
5. ADSs purchased for me under the Employee Stock Purchase Plan should be
issued in the name of (Employee Only):
__________________________________________
6. I understand that, notwithstanding any other provision of this
Participation Agreement or the International Employee Stock Purchase Plan:
(A) neither the International Employee Stock Purchase Plan nor this
Participation Agreement shall form any part of any contract of
employment between the Company or any Designated Subsidiary and any
Employees of any such company, and it shall not confer on any
participant any legal or equitable rights (other than those
constituting the Options themselves) against the Company or any
Designated Subsidiary, directly or indirectly, or give rise to any
cause of action in law or in equity against the Company or any
subsidiary;
(B) the benefits to participants under the Plan shall not form any part of
their wages, pay or remuneration or count as wages, pay or
remuneration for pension fund or other purposes;
(C) in no circumstances shall any Employee on ceasing to hold his or her
office or employment by virtue of which he or she is or may be
eligible to participate in the International Employee Stock Purchase
Plan be entitled to any compensation for any loss of any right or
benefit or prospective
11
<PAGE>
right or benefit under the Plan, which he might otherwise have
enjoyed, whether such compensation is claimed by way of damages for
wrongful dismissal or other breach of contract or by way of
compensation for loss of office or otherwise."
(D) the Company expressly retains the right to terminate the International
Employee Stock Purchase Plan at any time and that I will have no right
to continue to receive option grants under the International Employee
Stock Purchase Plan in such event.
7. I understand that I may be subject to taxation as a result of my
participation under the International Employee Stock Purchase Plan. I have
consulted any tax advisors in connection with my participation under the
International Employee Stock Purchase Plan that I deem advisable, and have
not relied on the Company for tax advice.
8. I hereby agree to be bound by the terms of the International Employee Stock
Purchase Plan. The effectiveness of this Participation Agreement is
dependent upon my eligibility to participate in the International Employee
Stock Purchase Plan.
I UNDERSTAND THAT THIS PARTICIPATION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.
Employee's Taxpayer
Identification Number: ___________________________________
Employee's Address: ___________________________________
___________________________________
___________________________________
Dated: ___________________ ___________________________________
Signature of Employee
12
<PAGE>
EXHIBIT B
---------
BUSINESS OBJECTS S.A.
---------------------
1995 INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
NOTICE OF WITHDRAWAL
The undersigned participant in the Offering Period of the Business Objects
S.A. 1995 International Employee Stock Purchase Plan which began on
___________ 19____ (the "Enrollment Date") hereby notifies the Company or
Designated Subsidiary that he or she hereby withdraws from the Offering Period.
He or she hereby directs the Company or Designated Subsidiary to pay to the
undersigned as promptly as practicable all the payroll deductions credited to
his or her account with the Company or Designated Subsidiary with respect to
such Offering Period. The undersigned understands and agrees that his or her
Option for such Offering Period will be automatically terminated. The
undersigned understands further that no further payroll deductions will be made
for the purchase of ADSs in the current Offering Period and the undersigned
shall be eligible to participate in succeeding Offering Periods only by
delivering to the Company or Designated Subsidiary a new Participation
Agreement.
Name and Address of Participant:
_______________________________
_______________________________
_______________________________
Signature:
_______________________________
Date: _________________________
<PAGE>
BUSINESS OBJECTS S.A.
INSTRUCTIONS TO THE BANK OF NEW YORK, AS DEPOSITARY
(MUST BE RECEIVED PRIOR TO THE CLOSE OF BUSINESS ON JUNE 12, 1998)
The undersigned Holder of American Depositary Receipts hereby requests
and instructs The Bank of New York, as Depositary, to endeavor, insofar as
practicable, to cause to be voted the Deposited Securities corresponding to
such Receipts registered in the name of the undersigned on the books of the
Depositary as of the close of business on April 20, 1998 at the Annual General
Meeting of Shareholders of Business Objects S.A. to be held in France, on June
18, 1998 in respect of the resolutions specified in the Notice of Meeting.
NOTES:
Instructions as to voting on the specified resolutions should be
indicated by an "X" in the appropriate box.
1. It is understood that if the Depositary receives a signed but unmarked
Voting Instruction Card, the Depositary will cause the Deposited
Securities to be voted as recommended by the Board of Directors of the
Company.
2. The Depositary will not vote or cause to be voted the Deposited Securities
in respect of a Voting Instruction Card which is incorrectly completed or
illegible.
3. Counter-proposals or amendments to proposals will be voted against unless
approved by the Board of Directors.
(CONTINUED AND TO BE DATED AND SIGNED ON THE REVERSE SIDE)
<PAGE>
The Bank of New York, as Depositary, has been advised by the Company that
Management recommends a vote in favor of all resolutions. The Bank of New York,
as Depositary, makes no recommendation with regard to voting on any of the
resolutions in the Annual General Meeting of Shareholders:
<TABLE>
<CAPTION>
FOR AGAINST FOR AGAINST FOR AGAINST
<S> <C> <C>
Resolution 1 [ ] [ ] Resolution 8 [ ] [ ] Resolution 15 [ ] [ ]
Resolution 2 [ ] [ ] Resolution 9 [ ] [ ] Resolution 16 [ ] [ ]
Resolution 3 [ ] [ ] Resolution 10 [ ] [ ] Resolution 17 [ ] [ ]
Resolution 4 [ ] [ ] Resolution 11 [ ] [ ] Resolution 18 [ ] [ ]
Resolution 5 [ ] [ ] Resolution 12 [ ] [ ] Resolution 19 [ ] [ ]
Resolution 6 [ ] [ ] Resolution 13 [ ] [ ]
Resolution 7 [ ] [ ] Resolution 14 [ ] [ ]
</TABLE>
The Voting Instructions must be signed by
the person in whose name the relevant
Receipt is registered on the books of the
Depositary. In the case of a Corporation,
the Voting Instructions must be executed by
a duly authorized Officer or Attorney. In
the case of joint holders, the signature of
any one will suffice.
Dated: , 1998
-----------------------------
-----------------------------------------
Signature
-----------------------------------------
Signature, if held jointly
VOTES MUST BE INDICATED (X) IN BLACK OR BLUE INK. [ ]
SIGN, DATE AND RETURN THE FORM PROMPTLY USING THE ENCLOSED ENVELOPE.
