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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: [_]Confidential, for Use of the
Commission Only (as Permitted by
Rule 14a-6(e)(2))
[X]Preliminary Proxy Statement
[_]Definitive Proxy Statement
[_]Definitive Additional Materials
[_]Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12
BUSINESS OBJECTS S.A.
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(Name of Registrant as Specified In Its Charter)
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(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
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(2) Aggregate number of securities to which transaction applies: N/A
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(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
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(4) Proposed maximum aggregate value of transaction: N/A
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(5) Total fee paid: N/A
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[_]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
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[BUSINESS OBJECTS LOGO]
Societe anonyme
with a share capital of FF17,255,441
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 MAY 4, 1999
NOTICE IS HEREBY GIVEN THAT an Ordinary and Extraordinary General Meeting of
the shareholders of Business Objects S.A., a French corporation (the
"Company"), will be held on May 4, 1999 at 9:00 a.m. at 1 Square Chaptal,
92300 Levallois-Perret (Paris), France, in order to hear the management report
on the activities of the Company during fiscal 1998, 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 December 31, 1998;
2. To allocate the profits of the year ended December 31, 1998;
3. To renew the term of office of Mr. Vincent Worms as Director;
4. To increase the amount of directors fees to be paid to members of the
Board of Directors;
5. To broaden the Board of Directors' authority to implement a stock
repurchase program; and
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 authorize the Board of Directors to convert the share capital of
the Company from the French franc to the Euro;
8. To approve the 1999 Stock Option Plan and to authorize 875,000 shares
reserved for issuance thereunder;
9. To re-affirm the price setting conditions of shares reserved for
issuance under the Employee Savings Plan;
10. To reserve 90,000 shares for issuance under the Employee Savings
Plan;
11. To re-affirm the price setting conditions of shares reserved for
issuance under the 1995 International Employee Stock Purchase Plan;
12. To reserve 260,000 shares for issuance under the 1995 International
Employee Stock Purchase Plan;
13. To amend articles 7, 8 and 18 of the charter document, or Statuts,
of the Company;
14. To authorize capital increases in the event of a tender or exchange
offer for securities of the Company;
15. To authorize capital reductions by cancellation of treasury shares
of the Company;
16. To authorize capital increases by incorporation of issue or
contribution premiums, reserves and profits; and
17. To authorize the issuance, without payment, of warrants to purchase
15,000 shares to Mr. Worms.
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 May 4, 1999, you will be invited to vote at a meeting on May 14,
1999, 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 May 4, 1999 at 9:00 a.m. at Levallois-Perret (Paris),
France time, and at any adjournment thereof, for the purposes set forth
herein. The Annual Meeting will comprise both an Ordinary General Meeting and
an Extraordinary General Meeting of the Company's shareholders.
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 March 29, 1999,
together with the Company's 1998 Annual Report, to all holders of ADSs (as
defined below) as of March 10, 1999 (the "Record Date"). The number of shares
entitled to vote at the Annual Meeting as of the Record Date is .
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 deposited with The Bank of New York (the "Depositary").
You may vote by using the enclosed Voting Instruction Card. If you wish to
directly vote the Ordinary Shares underlying the Company's ADSs and attend the
Annual Meeting, you must contact the Depositary in order to become a
registered owner of the Ordinary Shares corresponding to their ADSs prior to
May 3, 1999.
Quorum Required Under French Law
The required quorum for ordinary resolutions is one-fourth of the total
outstanding Ordinary 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 Ordinary 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
Ordinary 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 Ordinary Shares present or represented at the Annual Meeting.
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Passage of extraordinary resolutions requires the affirmative vote of two-
thirds of the Ordinary Shares present or represented at the Annual Meeting.
Voting by Holders of American Depositary Shares; Record Date
You are entitled to notice of the Annual Meeting, and may vote the Ordinary
Shares underlying your 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 April 28, 1999 (the "Receipt Date"), you 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) you may elect to exchange your 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 May 3, 1999 (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 Statuts 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.
If (i) Voting Instruction Cards which are signed but on which no voting
instructions are indicated, (ii) Voting Instructions Cards are improperly
completed, or (iii) no Voting Instruction Card is received by the Depositary
from an ADS holder on or before the Receipt Date, the Depositary will deem
such ADS holder to have instructed the Depositary to give a proxy to the
President of the Annual Meeting to vote 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.
Voting Ordinary Shares. Under French law and the Statuts 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 Ordinary 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 April 20,
1999, 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 May 3, 1999 to
May 4, 1999.
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 April 28, 1999.
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Revocability of Voting Instructions
All ADSs held by holders entitled to vote and represented by properly
executed Voting Instruction 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 Card may be
revoked by filing with The Bank of New York, before April 28, 1999, 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 votes from 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,
if you have given no prior instructions to vote on such new or amended
resolution, you shall be deemed to have voted against the new or amended
resolution. The number of Ordinary Shares required to be held to propose new
resolutions for consideration at the Annual Meeting as of the date of this
Proxy Statement is 506,386. New resolutions or modifications to the
resolutions by shareholders must be sent to the Company's registered office at
Business Objects S.A., 1 Square Chaptal, 92300, Levallois-Perret, France,
Attention: President, by registered mail with acknowledgement of receipt
requested. We expect to publish a notice of the Annual Meeting in the BALO on
or about April 2, 1999.
Documents Available Upon Written Request to the Company
The following documents are appended to this Proxy Statement: (i) the text
of the report of the Board of Directors on the activities of the Company in
fiscal 1998, (ii) a summary of the unconsolidated accounts of Business Objects
S.A. for fiscal year 1998 prepared under French GAAP, and (iii) 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 to Shareholders for the year ended December 31, 1998, which
includes the consolidated financial results of Business Objects S.A. for 1998
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 auditors'
reports on Proposals 5, 6, 8-12, 14, 15 and 17.
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ORDINARY GENERAL MEETING
Within the authority of the Ordinary General Meeting, the following matters
will be considered and voted upon:
PROPOSAL 1
APPROVAL OF THE 1998 UNCONSOLIDATED FINANCIAL STATEMENTS OF BUSINESS OBJECTS
S.A.
In accordance with French corporate law, the Company's financial statements,
prepared under French generally accepted accounting principles, 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. At the Annual Meeting,
the statutory auditors will present their report on the annual financial
statements (unconsolidated) of Business Objects S.A.
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 year 1998 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 APPROVE THE
FINANCIAL STATEMENTS OF BUSINESS OBJECTS S.A.
PROPOSAL 2
ALLOCATION OF PROFITS
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, to allocate a
portion to a specific reserve and/or to carry the profits forward in retained
earnings.
We propose that of the Company's after-tax profits of FF18,038,197.10,
FF47,777.80 shall be allocated to the legal reserve, and the balance to be
carried forward in retained earnings. Pursuant to French law, we remind you
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
PROPOSAL 3
RENEWAL OF THE TERM OF OFFICE OF MR. WORMS AS DIRECTOR
General
In accordance with French law, the Company is managed by its Board of
Directors and by its President, 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 with respect to certain decisions. The Company's
Board of Directors
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is currently comprised of six 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 nominee and other Directors of the Company is set
forth on pages and .
Nominee; Proposal
Mr. Worms' term of office will come to an end at the close of the 1999
Annual Meeting. The Board of Directors proposes that his term of office be
renewed for a period of three years expiring at the end of the Ordinary
General Meeting called to decide upon the Company's financial statements for
the fiscal year ending on December 31, 2001, i.e., at the Annual Meeting to be
held in 2002.
The Third 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
ELECTING THE NOMINEE LISTED ABOVE
PROPOSAL 4
INCREASE OF AUTHORIZED DIRECTORS' FEES TO DIRECTORS
Under French corporate law, only shareholders may decide the aggregate
amount of directors' fees which may be paid to members of the Board of
Directors. The Board of Directors then has full and discretionary authority to
decide the allocation of the directors' fees authorized by the shareholders
among the members of the Board.
At the shareholders' meeting held on June 19, 1997, the shareholders
authorized the payment of FF500,000 as directors' fees per year (approximately
U.S.$83,000), starting with the year ended December 31, 1997. Each non-
employee Director is currently entitled to directors' fees of up to
U.S.$20,000 per year.
Due to the addition of Mr. Charles, who was first elected as a director in
June 1998, and the possible addition of new directors, the Board proposes an
increase of the aggregate amount of annual directors' fees to FF750,000
(approximately U.S.$120,000) for the current fiscal year ending December 31,
1999, as well as for each future fiscal year, until shareholders resolve
otherwise.
The Fourth Resolution sets forth the full text of the shareholder action to
which this Proposal relates.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS RESOLUTION INCREASING THE
AGGREGATE AMOUNT OF AUTHORIZED DIRECTOR' FEES
PROPOSAL 5
TO BROADEN THE AUTHORITY OF THE BOARD OF DIRECTORS TO
IMPLEMENT A STOCK REPURCHASE PROGRAM
General
The Board of Directors currently has the authority to repurchase the
Company's Ordinary Shares only for issuance under its employee stock option
plan.
Pursuant to article 217-2 of the law n(degrees)66-537 of July 24, 1966, as
amended by the law n(degrees)98-546 of July 3, 1998, (collectively, "Article
217-2"), French companies, if listed on a "regulated market," are allowed to
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repurchase shares up to 10% of the then outstanding share capital for use
other than just issuance under such company's employee stock option plans,
provided appropriate shareholder approval has been obtained. Article 217-2
applies only to companies listed on a "regulated market." Under French law,
the term "regulated market" does not currently include the Nasdaq-Amex
National Market.
Proposal
In the event that the Company's shares are admitted for trading on a
regulated market, e.g., on a French stock exchange, it is proposed to
authorize the Board of Directors to repurchase the Company's Ordinary Shares
or ADSs in accordance with Article 217-2.
It is proposed that the maximum number of Ordinary Shares that could be
repurchased would be 1,000,000 shares of a nominal value of 1 FF each (or the
Euro equivalent of the French franc nominal value). It is further proposed
that the maximum purchase price per share shall not exceed FF177 (or
approximately U.S.$30), or the Euro equivalent; provided, however, that in
accordance with applicable law, the repurchase of shares may not be completed
in the event it would reduce the net equity of the Company to an amount lower
than the aggregate of the Company's share capital and reserves available for
distribution.
In accordance with Article 217-2, the share repurchase program could be
used, among other things, to (i) stabilize the market price of the Company's
shares, (ii) to make use of excess cash balances, (iii) to provide for shares
to be used in the context of the implementation of employee stock purchase
plans, (iv) to provide for shares to be used as a consideration in the context
of an acquisition or an exchange, or (v) to minimize the dilutive effect of a
securities issuance. Repurchased shares could also be cancelled if
shareholders approve Proposal n(degrees)15 (see below). The Company is aware,
and shareholders should be aware, that U.S. and French securities laws impose
certain restrictions on a company's repurchase of its own shares. The Company
intends to fully comply with such laws in connection with any repurchase it
may make.
In accordance with French law, repurchased shares have no voting or dividend
rights.
If this resolution is approved, the shareholders' authorization will be
valid for an eighteen-month period following this Annual Meeting.
The Fifth 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 RELATING
TO A STOCK REPURCHASE PROGRAM
PROPOSAL 6
APPROVAL OF STATUTORY AUDITORS' REPORT
REGARDING TRANSACTIONS IN WHICH DIRECTORS HAVE AN INTEREST
General
Under French 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, the statutory auditors will present their report to
the effect that no such transactions were entered into during fiscal 1998.
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Proposal
Shareholders are requested to acknowledge and approve that there were no new
transactions concluded with Directors in fiscal year 1998. 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 ACKNOWLEDGING
THAT THERE WERE NO RELATED PARTY TRANSACTIONS
EXTRA ORDINARY MEETING
Within the authority of the Extraordinary General Meeting, the following
matters will be considered and voted upon:
PROPOSAL 7
TO AUTHORIZE THE BOARD OF DIRECTORS TO CONVERT
THE SHARE CAPITAL INTO EURO
A law adopted on July 3, 1998 provides that French corporations may convert
their share capital or the nominal value of their shares into Euros beginning
on January 1, 1999. We propose that the nominal value of the Company's
Ordinary Shares be so converted into the Euro. For that purpose, it is
necessary that shareholders authorize the Board of Directors to increase the
share capital by incorporation of reserves and premiums (see Proposal
n(degrees)16) or reduce it by allocation to a non-transferable reserve
account, in order to effect the conversion and to round the nominal value of
one Ordinary Share to the nearest hundredth of a Euro.
The Seventh 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 AUTHORIZE THE
CONVERSION OF THE SHARE CAPITAL IN THE EURO
PROPOSAL 8
TO APPROVE THE 1999 STOCK OPTION PLAN AND
TO AUTHORIZE 875,000 SHARES FOR ISSUANCE THEREUNDER
The Company currently grants stock options to employees under the terms and
conditions of the 1994 Stock Option Plan (the "1994 Plan") which was adopted
in August 1994 and expires on August 16, 1999. We propose that shareholders
approve the 1999 Option Plan (the "1999 Option Plan"), the terms and
conditions of which are more fully described below. The Board of Directors
approved the 1999 Stock Option Plan at a meeting held on February 20, 1999.
An aggregate of 3,750,000 shares had been reserved for issuance under the
1994 Stock Option Plan, of which, as of March 10, 1999, options to purchase
2,657,774 shares were outstanding and 514,303 shares remained available for
future grants. Although expiration of the 1994 Plan will have no impact upon
options granted prior to expiration of the Plan, any shares remaining for
future grant at that date will no longer be available for grant.
At the Annual Meeting, the shareholders are also being requested to reserve
875,000 shares for issuance under the 1999 Option Plan. The Company believes
that the granting of stock options motivates high levels of performance,
provides an effective means of recognizing employee contributions to the
success of the Company, and is of great value in recruiting and retaining
highly qualified technical and other key personnel who are in great demand. We
believe that the ability to grant options is important to the future success
of the Company.
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The proposed number of reserved shares is intended to provide the Company
sufficient shares to meet anticipated needs for hiring and retention purposes.
The Eighth Resolution sets forth the full text of the shareholder action to
which this proposal relates.
Summary of the 1999 Option Plan
Purpose. The purpose of the 1999 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 1999 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.
If the shares of the Company are listed on a regulated market as defined
under French law, or are traded on both a regulated market and any other
established stock exchange or national market system, the exercise price may
be no less than the higher of (i) 100% of the closing price as reported on the
regulated market on the last trading day prior to the date of grant, or (ii)
80% of the average of the closing prices over the twenty trading days
preceding the grant date; provided, however, that the exercise price may not
be less than 110% of the closing price per share on the last trading day prior
to the date of grant for options, intended to qualify as incentive stock
options, granted to a U.S. beneficiary who, at the time the incentive stock
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.
If the shares of the Company are listed or traded solely on an established
stock exchange or national market system, other than a regulated market under
French law, such as the Nasdaq-Amex National Market, the exercise price may be
no less than 100% of the closing price 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 closing price per share on the last trading day prior to
the date of grant for options, intended to qualify as incentive stock options,
granted to a U.S. beneficiary who, at the time the incentive stock 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.
When an option entitles the holder to purchase shares previously repurchased
by the Company, the exercise price, notwithstanding the above provisions and
in accordance with applicable law, may not be less than eighty (80%) of the
average purchase price paid for all shares previously repurchased by the
Company.
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.
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(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 by the
Company generally vest at a rate of 25% of the shares subject to the option
after twelve months, and then 1/48th of the shares subject to the option vest
each month thereafter, provided the beneficiary remains continuously employed
by the Company. Due to adverse social security regulations in France, 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 ninety
(90) days from the date of such termination. Options can be exercised within
six 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.
(f) Transferability of Shares. As a general rule, shares acquired pursuant
to the exercise of an option may be immediately disposed of. However,
beginning in January 1997, French companies are required 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
Ordinary Shares before a five-year period following the grant of the option.
Accordingly, options granted after December 1996 are subject to a minimum
holding period requirement of the underlying Ordinary Shares, such that
France-based optionees are not be allowed to sell or dispose of such shares
before the expiration of a five-year period from the grant date.
Term of Plan. The 1999 Option Plan terminates on May 4, 2004.
United States Federal Tax Information
Options granted under the Option Plan may be either "incentive stock
options," as defined in Section 422 of the United States Internal Revenue Code
of 1986, as amended, or "nonstatutory" options.
Incentive Stock Options. If an option granted under the 1999 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 exercise of the
option 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
9
<PAGE>
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 1999
Option Plan does not purport to be complete, and reference should be made to
the applicable provisions of United States Internal Revenue Code of 1986, as
amended. 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.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RESOLUTION
APPROVING THE 1999 STOCK OPTION PLAN AND
RESERVING 875,000 SHARES FOR ISSUANCE THEREUNDER
PROPOSALS 9 AND 10
RELATED TO THE COMPANY'S FRENCH EMPLOYEE SAVINGS PLAN
General
The French Employee Savings Plan (the "Savings Plan") is a plan under which
French-based 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 to enable the French-based employees of the Company to benefit from
the French statutory and tax provisions relating to employee stock purchase
plans.
Since its adoption in 1995, the Company has issued 110,764 shares under the
Savings Plan, of which 67,812 shares were issued in fiscal 1998.
PROPOSAL 9
At the shareholders' meeting held on June 18, 1998, the shareholders
reserved 135,000 shares under the Savings Plan, of which none have been issued
as of the date of this Proxy Statement. The authorization to issue shares was
granted by the shareholders for two years, expiring in June 2000. However,
pursuant to French law, the June 1998 shareholders' authorization will expire
on the date of this Annual Meeting if shareholders do not vote on the price
setting conditions for the 135,000 shares remaining available for issuance as
of the date of this Proxy Statement.
In order to keep the shares available for subscription under French law,
shareholders are requested to vote on the price setting conditions for the
issue price of the shares. We recommend to keep the price setting conditions
described below unchanged, and to clarify that when the issue price is
expressed in U.S. dollars, the issue price shall be the exchange value in
Euros of the dollar denominated issue price, 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. The Ninth Resolution sets forth the
full text of the shareholders action to which this Proposal relates.
PROPOSAL 10
The Company anticipates that most of the 135,000 shares referred to in
Proposal 9 will be issued at the offering period ending March 31, 1999, due to
the low market price of the Company's shares at the beginning of
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the offering period. In order to allow the continuance of the Savings Plan for
the next two years, shareholders are requested to approve the issuance of an
additional 90,000 Ordinary 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
authorize the Board of Directors 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 for and issued. The Tenth Resolution sets
forth the full text of the shareholder action to which this Proposal relates.
If approved, this issuance of the additional shares would be effective for a
period of two years and would therefore expire in May 2001. 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 French Employee Savings Plan
Purpose. The purpose of the Savings 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 Savings Plan. Subject
to the other provisions of the Savings 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 Savings 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 franc 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 Savings 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.
Purchase Price. The issue price of one share is equal to the higher of (i)
eighty five percent (85%) of the closing sales price for one Ordinary Share or
one ADS corresponding to one Ordinary Share (or the closing bid, if no sales
were registered) as quoted on the system or exchange on which the shares are
listed or traded with the greatest volume of trading on the last trading day
prior to the date of the Board of Directors meeting called to set the opening
date for subscription and (ii) 80% of the average of the closing sales prices
(or the closing bid, if no sales were registered) as quoted on such system or
exchange on the twenty days of quotation preceding the day of the Board of
Directors meeting called to set the opening date for subscription.
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 Savings Plan is also intended to qualify under the provisions of
Sections 421 and 423 of the United States Internal Revenue Code of 1986, as
amended.
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<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RESOLUTIONS RELATED TO THE
SAVINGS PLAN
PROPOSALS 11 AND 12
RELATED TO THE 1995 INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
The 1995 International Employee Stock Purchase Plan ("IESPP") was approved
at the shareholders' meeting held on June 21, 1995. The IESPP is intended to
qualify under the provisions of Sections 421 and 423 of the United States
Internal Revenue Code of 1986, as amended.
Since its adoption in 1995, the Company has issued 274,706 shares under the
IESPP, of which 90,952 shares were issued in fiscal 1998.
PROPOSAL 11
General
At the shareholders' meeting of June 18, 1998, 165,000 shares were
authorized, of which none have been issued as of the date of this Proxy
Statement. The authorization to issue shares was granted by the shareholders
for two years and therefore expires in June 2000. However, pursuant to French
law, the June 1998 shareholders' authorization will expire on the date of this
Annual Meeting if shareholders do not vote on the price setting conditions for
the issue price of the shares available for subscription.
Proposal
In order to keep the shares available for subscription under French law,
shareholders are requested to vote on the price setting conditions of the
issue price of the shares. We recommend to keep the price setting conditions
described below unchanged, and to clarify that when the issue price is
expressed in U.S. dollars, the issue price shall be the exchange value in
Euros of the dollar denominated issue price, 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. The Eleventh Resolution sets forth
the full text of the shareholders' action to which this Proposal relates.
PROPOSAL 12
General
The Company anticipates that most of the shares previously approved for
issuance under the IESPP (see Proposal 11) will be issued at the end of the
current offering period ending on March 31, 1999, due to the low market price
of the stock at the beginning of the offering period. In order to continue the
IESPP for the next two years, shareholders are also being requested to
authorize a capital increase of 260,000 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
We propose to waive the preferential subscription right granted to
shareholders pursuant to French law and to reserve the 260,000 new shares for
issuance to the Business Objects S.A. Employee Benefits Trust under the IESPP.
The authorization to issue an additional 260,000 shares under the IESPP
would be granted for a period of two years from the date of this Annual
Meeting and would therefore expire in May 2001. The Twelfth Resolution sets
forth the full text of the shareholders' action to which this Proposal
relates.
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<PAGE>
Issue price of shares
The Board of Directors will determine the issue price of the shares approved
for issuance under the IESPP 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 260,000 shares referred to in this
Proposal 12, based on the unconsolidated equity of Business Objects S.A as of
December 31, 1998, after taking into account employee stock options exercised
in fiscal 1998.
In the event that none of the warrants to purchase 130,000 shares already
issued to certain Directors are exercised, and that the 260,000 additional
shares are issued at the price of FF194 per share, the percentage ownership
interest of a shareholder holding 1% of the outstanding shares of the Company
will, after the completion of the capital increase, have decreased to 0.9852%.
If all of the warrants to purchase 130,000 shares already issued were
exercised, such shareholder's percentage ownership interest would decrease to
0.9779%.
In addition, assuming an issue price per share equal to FF194, the equity
capital per share, which was FF18.55 at December 31, 1998 after taking into
account stock option exercises of fiscal 1998, would increase to FF21.15 per
share (before taking into account the assumed exercise of the warrants to
purchase 130,000 shares already issued and any shares issued subsequent to
December 31, 1998).
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.
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, 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.
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Issue Price. The issue price of one share is equal to eighty five percent
(85%) of the lowest closing sales price for one Ordinary Share or one ADS
corresponding to one Ordinary Share (or the closing bid, if no sales were
registered) as quoted on the system or exchange on which the shares are listed
or traded with the greatest volume of trading on the last trading day prior to
the first day of the offering period or on the last trading day of the
offering period.
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 United States
Internal Revenue Code of 1986, as amended.
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 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 United States Internal Revenue Code of 1986, as amended. 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 RELATED TO THE
IESPP
PROPOSAL 13
TO AMEND THE COMPANY'S STATUTS
To provide the Company additional flexibility to list, if it elects to so
do, its shares on a French stock exchange, several amendments to the Statuts
of the Company must be considered (which amendments would not become effective
unless and until such listing occurs), as follows:
a) Form of shares: It is necessary to change the form of shares so that the
shares may be held in registered or bearer form, at the shareholder's
discretion, in accordance with regulations applicable to companies listed on a
French stock exchange.
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b) Identification of shareholders:
Pursuant to the mandatory regulations applicable to companies listed on a
French stock exchange, shareholders who, through one or several entities, hold
shares or voting rights representing more than 5%, 10%, 20%, 33.33%, 50% or
66.66% must notify the Company of the total number of Ordinary Shares or
voting rights owned, within 15 days from the date these thresholds have been
reached. If a shareholder fails to comply with the notification obligation,
shares in excess of the relevant threshold are deprived from voting rights for
as long as notification has not been made and for a period of two years
thereafter.
The thresholds applicable under the above mandatory regulations may be
lowered in the Statuts, subject to shareholders' approval of a resolution to
amend the Statuts.
We propose to amend the Statuts in accordance with the above and to provide
that the notification obligation shall apply under the same conditions each
time the percentage reaches 5% of the share capital or voting rights, or any
multiple thereof. The notification obligations would also apply each time the
percentage of capital or voting rights falls under 5% or a multiple thereof.
We further propose that in the event a shareholder fails to notify the
Company, one or several shareholders holding together at least 5% of the share
capital or voting rights may request that the shares or voting right
certificates be deprived from voting rights for as long as notification is
completed and for a two-year period thereafter.
We further propose to include in the Statuts a provision whereby the Company
may request, at its expense, from the entity tracking bearer shares transfer
(SICOVAM) communication of the identity and number of shares held by holders
of bearer shares.
c) Participation at shareholders' meetings: We propose to provide in the
Statuts that, for holders of bearer Ordinary Shares, the right to participate
in a shareholders' meeting is subject to the filing, at least one business day
prior to such shareholders' meeting, of a certificate stating that shares are
not transferable until the date of such shareholders' meeting.
d) Other amendments:
Other proposed amendments to the Company's Statuts relate to provisions
which are inappropriate for a company listed on a French stock exchange (e.g.,
transfer of rights to dividends following a transfer of shares).
The Thirteenth 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
AMENDING THE STATUTS OF THE COMPANY
PROPOSAL 14
AUTHORIZATION TO INCREASE SHARE CAPITAL DURING THE PENDENCY OF A TENDER OR
EXCHANGE OFFER ON THE SECURITIES OF THE COMPANY
Under applicable French corporate law, shareholders must pre-approve the
issuance of securities of a French 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 new
shares 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.
At the shareholders' meeting held on June 18, 1998, the shareholders
authorized the Board of Directors to effect, at its discretion, various
securities issuances, with or without preferential subscription right, up to
an aggregate nominal value of up to FF15,000,000 (corresponding to 15,000,000
Ordinary Shares).
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Under applicable law, such authority granted to the Board of Directors is
suspended during the pendency 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. At the shareholders'
meeting held on June 18, 1998, the shareholders of the Company gave their
approval for a period of one year. We believe that it is in the best interest
of the Company that the authority granted to the Board to increase the share
capital of the Company remain unaffected by a tender or exchange offer. We
therefore propose that the Board's authorization to increase the share capital
during such events be renewed. In accordance with French corporate law, the
authorization will be valid only until the annual shareholders' meeting called
to approve the financial statements for the year ending December 31, 1999.
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 RESOLUTION
TO WHICH THIS PROPOSAL RELATES
PROPOSAL 15
TO AUTHORIZE CAPITAL REDUCTIONS BY CANCELLATION OF TREASURY SHARES
If the shareholders authorize the share repurchase program pursuant to the
Fifth Resolution, we also propose that shareholders authorize the Board of
Directors to reduce the share capital, on one or more occasions, by
cancellation of the treasury shares held by the Company following a repurchase
of its own shares. In accordance with applicable law, shares cancelled over a
twenty-four month period may not exceed 10% of the outstanding share capital.
The above authorization would be valid for a period of eighteen months from
the date of this Annual Meeting.
The Fifteenth 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 REDUCE THE SHARE CAPITAL BY CANCELLATION OF TREASURY SHARES
PROPOSAL 16
TO AUTHORIZE CAPITAL INCREASES BY INCORPORATION OF PREMIUMS,
PROFITS OR RESERVES
At the shareholders' meeting held on June 18, 1998, the shareholders
authorized the issuance of various securities, up to a maximum nominal value
of FF15,000,000. We propose to amend this authorization in order to expressly
provide that the Company's share capital may be increased by incorporation of
issue or contribution premiums, profits or reserves, through the issuance and
delivery of shares free of charge and/or increase of the nominal value of the
shares. Such authorization will facilitate the conversion of the nominal value
of the Company's shares in Euros, due to the rounding of shares that will be
required to complete the conversion.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RESOLUTION TO AUTHORIZE
SHARE CAPITAL INCREASES BY INCORPORATION OF PREMIUMS, PROFITS AND RESERVES
16
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PROPOSAL 17
AUTHORIZATION TO ISSUE WARRANTS TO A DIRECTOR
General
Pursuant to provisions of French law, at the Annual Meeting the shareholders
are being asked to approve the issuance of warrants to purchase an aggregate
15,000 Ordinary Shares of the Company to Mr. Vincent Worms, subject to the
condition precedent that the shareholders approve the re-election of Mr. Worms
as director pursuant to the Third Resolution.
This Proposal requires 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-Amex National Market on the last trading day
prior to the date of the Annual Meeting, multiplied by the noon buying rate
for the Euro as quoted by the Federal Reserve Bank of New York for 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 the recipient of the warrants
would benefit consists of the implementation 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
The right to purchase the shares underlying the warrants will vest
immediately, starting May 4, 1999. In the event of Mr. Worms' termination as a
Director, Mr. Worms will be able to exercise the vested warrants for ninety
(90) days following the date of such termination.
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.
Adjustments
In the event that, while the warrants are outstanding, the Company
consummates one of the transactions listed below, the rights of the holder of
the share warrants shall be preserved pursuant to the conditions provided for
in articles 171 to 174 of Decree n(degrees)67-236 of March 23, 1967. However,
such preservation of rights shall be made based on the number of shares that
such holder would have been entitled to had he exercised the vested warrants
on the date of consummation of the transaction at issue.
Such transactions are listed in article L194-5 of the law n(degrees)66-537
of July 24, 1966 on commercial companies and include:
(a) issuance of securities with shareholders' preferential right of
subscription,
(b) increase in the share capital by incorporation of reserves, profits
or issue premiums,
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(c) distribution of reserves in cash or in portfolio securities, or
(d) issuance of securities convertible into shares.
In the event of reduction in share capital due to losses, the rights of the
holder of the warrant, with respect to the number of shares to which he is
entitled to receive upon exercise of his warrant, will be reduced accordingly,
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 the number of shares issuable upon
exercise of the warrant.
Transferability
The warrants are not transferable, except to a spouse, a direct descendant
or ascendant, or a sibling of the warrant 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 130,000 shares already
issued to certain Directors are exercised, and that the 15,000 additional
warrants to be issued are exercised at the price of FF228 per share, the
percentage ownership interest of a shareholder holding 1% of the outstanding
shares of the Company will, after the completion of the capital increase, have
decreased to 0.9991%. If all of the warrants to purchase 130,000 shares
already issued were exercised, before the exercise of the new warrants
mentioned above, such shareholder would have his percentage ownership changed
to 0.9917%.
In addition, assuming an issue price per share equal to FF228, the equity
capital per share, which was FF18.55 at December 31, 1998 after taking into
account stock option exercises of fiscal 1998, would increase to FF19.18 per
share (before taking into account the assumed exercise of the warrants to
purchase 130,000 shares already issued).
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 is outstanding, refrain from redeeming its share capital and modifying
the allocation of profits.
The Seventeenth Resolution sets forth the full text of the shareholder
action to which this Proposal relates.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR"
THE ISSUANCE OF WARRANTS TO DIRECTOR
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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>
Nominee
Vincent Worms..... 46 Partner. Mr. Worms has been, 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 permanent representative of Paribas Europe
Investment V.O.F., a shareholder of the Company and a member of
the Board from 1991 until that date. Mr. Worms is a director of
SangStat Medical, DrugAbuse Sciences, Informatica Corporation,
Aptix Corporation and Decisive Technology. Mr. Worm's term of
office on the Board of Directors expires at this Annual Meeting.
Other Directors
Bernard Liautaud.. 37 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 the Sales
Marketing Manager with Oracle France. Mr. Liautaud's term of
office on the Board of Directors expires in 2000. Mr. Liautaud
is the son-in-law of Mr. Silverman, a Director of the Company.
Mr. Liautaud does not hold directorships other than in
subsidiaries of Business Objects.
Philippe Claude... 50 Partner. Mr. Claude has been a General Partner of Atlas Venture,
a venture capital firm, since 1993. Prior to his nomination as a
Director of the Company in July 1994, Mr. Claude served as a
permanent 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 permanent representative of Atlas
Venture, 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, Spotfire A.B., Temposoft, Lexiquest., and
Allo Cine S.A. Mr. Claude's term of office on the Board of
Directors expires in 2000.
Bernard Charles... 42 President of Dassault Systemes. Mr. Charles has been President
of Dassault Systemes, a worldwide leader in computer aided
design (CAD) since September 1995. From 1988 to September 1995,
he was President of the Research & Development department of
Dassault Systemes. Mr. Charles is a director in a number of
Dassault Systemes' subsidiaries, Deneb Robotics Inc., Enovia
Corp., Solidworks Corp., and Invention Machine Corp. Mr.
Charles' term of office expires in 2001.
Albert Eisenstat.. 68 Consultant and Private Investor. Albert Eisenstat has been a
consultant and private investor 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 in 2001.
</TABLE>
19
<PAGE>
<TABLE>
<CAPTION>
Name Age Principal Occupation and Business Experience
---- --- --------------------------------------------
<C> <C> <S>
Arnold Silverman..... 60 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
Time Ten Performance Software Company, Luna Information Systems,
Informatica Corporation, Exemplary Corporation and Softway
Systems. 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 in 2001.
Executive Officers
Clifton Weatherford.. 52 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.
from January 1996 to August 1997. Prior to joining NETCOM, Mr.
Weatherford served as Chief Financial Officer of Logitech, Inc.
from February 1994 to December 1995. He has also held senior
financial positions at Texas Instruments, Applied Materials, and
Tandem Computers. Mr. Weatherford does not hold directorships
other than in Business Objects subsidiaries.
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.
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
from June 1992 to April 1995. Prior to that, he held a number of
technical and marketing positions with Ingres Corporation,
concluding his tenure as Director of Product Marketing.
Lawrence Lieberman... 49 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. From 1993 to October 1996, Mr. Lieberman
served as an independent consultant and investor in the
healthcare technology and wireless communications industry. Mr.
Lieberman's experience also 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>
BOARD MEETINGS AND COMMITTEES
The Board of Directors held a total of eight meetings (including regularly
scheduled and special meetings) during fiscal 1998. Mr. Claude attended four
meetings out of eight. Mr. Charles, elected in June 1998, attended two
meetings out of three. No other incumbent Director during the last fiscal
year, while a member of the Board
20
<PAGE>
of Directors, attended in person or via conference call 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 1998.
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 1998. Neither Mr.
Eisenstat nor Mr. Worms is 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 1998 of fees of
U.S.$3,000 per quarterly 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
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 FF72.7875
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, 1998,
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 FF55,328 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 market value of
such warrants as determined in April 1997 was immaterial. As of December 31,
1998, all of such warrants were outstanding.
On April 28, 1998, the Board of Directors approved the issuance of warrants
to purchase 70,000 shares to the following Directors: Mr. Claude (10,000
shares), Mr. Eisenstat (15,000 shares), Mr. Silverman (15,000 shares), Mr.
Worms (5,000 shares) and Mr. Charles (25,000 shares). These warrants have an
exercise price of FF96.66 per share. Warrants granted to Albert Eisenstat,
Arnold Silverman and Bernard Charles vest annually over three years starting
June 18, 1998. Warrants granted to Philippe Claude vest annually over two
years starting June 18, 1998. Warrants granted to Mr. Worms will be fully
vested on June 18, 1999. The warrants were issued in June 1998 after formal
shareholder approval. The exercise price was equal to the estimated fair
market value of such warrants on the grant date in June 1998. As of December
31, 1998, all of such warrants were outstanding.
21
<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 Named Executive 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
Securities & Exchange Commission pursuant to Sections 13(d) or 13(g) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Information
related to Directors and Executive Officers is as of the Record Date.
<TABLE>
<CAPTION>
5% Shareholders, Directors and Shares Percentage
Officers Beneficially Owned (1) Beneficially Owned
- ------------------------------ ---------------------- ------------------
<S> <C> <C>
5% Shareholders
The DWS Group (2)................... 1,252,638 7.3%
Bernard Liautaud (3)................ 1,244,975 7.2%
Pilgrim & Baxter Associates, Ltd.... 873,900 5.1%
Directors
Philippe Claude (4)................. 12,231 *
Albert Eisenstat (5)................ 23,333 *
Arnold Silverman (6)................ 120,625 *
Vincent Worms (7)................... 221,701 1.3%
Bernard Charles..................... 1 *
Executive Officers
Clifton Weatherford (8)............. 18,705 *
Alexandre Dayon (9)................. 51,033 *
David Kellogg (10).................. 34,543 *
Lawrence Lieberman (11)............. 53,348 *
All Directors and executive officers
as a group (10 persons) (12)....... 1,780,495 10.3%
</TABLE>
- --------
* Less than 1%.
(1) The number and percentage of shares beneficially owned is determined
under rules of the Securities and Exchange Commission, 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 10, 1999 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) Information obtained from Beacon Hill Partners, Inc.
(3) Mr. Liautaud is also President and Chief Executive Officer and a Director
of the Company. Includes 12,500 shares issuable upon the exercise of
stock options exercisable through May 9, 1999.
(4) Includes 9,332 shares issuable upon the exercise of share warrants
exercisable through May 9, 1999.
(5) Includes 21,332 shares issuable upon the exercise of share warrants
exercisable through May 9, 1999.
(6) Includes 9,332 shares issuable upon the exercise of share warrants
exercisable through May 9, 1999.
(7) Includes 9,332 shares issuable upon the exercise of share warrants
exercisable through May 9, 1999. Also includes shares held by certain
funds affiliated with Mr. Worms, for which he disclaims beneficial
ownership except as to his pecuniary interests, as follows: AXA U.S.
Growth Fund, L.L.C. (45,000 shares), Paribas U.S. Growth Fund Partners
C.V. (70,000 shares), Double Black Diamond II L.L.C. (8,517 shares), and
Partech International S.A. (4,623 shares). Mr. Worms could be deemed to
beneficially own such shares.
(8) Includes 16,666 shares issuable upon the exercise of stock options
exercisable through May 9, 1999.
(9) Includes 39,033 shares issuable upon the exercise of stock options
exercisable through May 9, 1999.
(10) Includes 32,865 shares issuable upon the exercise of stock options
exercisable through May 9, 1999.
(11) Includes 46,250 shares issuable upon the exercise of stock options
exercisable through May 9, 1999.
(12) Includes 196,642 shares issuable upon the exercise of stock options and
warrants exercisable through May 9, 1999.
22
<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) one additional person who served as an
Executive Officer during a portion of 1998 and whose compensation in 1998
exceeded $100,000 (collectively, the "Named Executive Officers") for the
fiscal years ended December 31, 1998, 1997 and 1996.
<TABLE>
<CAPTION>
Shares
Underlying
Name and Principal Fiscal Salary Bonus Other Annual options All Other
Position Year (1) (1) Compensation (1)(2) (#) Compensation (1)(3)
- ------------------ ------ -------- -------- ------------------- ---------- -------------------
<S> <C> <C> <C> <C> <C> <C>
Bernard Liautaud........ 1998 $319,958 $249,500 $25,582 50,000 $ 66,000
Chairman, President and
Chief Executive Officer 1997 296,113 149,518 24,991 -- 135,554
1996 195,313 15,163 30,244 -- --
Clifton T. Weatherford.. 1998 250,008 112,234 -- 35,000 --
Senior Group Vice
President and 1997 85,289 20,333 -- 100,000 30,000
Chief Financial Officer
(4) 1996 -- -- -- -- --
Alexandre Dayon......... 1998 130,396 85,801 35,546 60,000 14,974
Group Vice-President, 1997 101,890 27,662 16,698 -- 3,841
Product Development 1996 87,094 14,526 12,188 25,000 4,753
David Kellogg........... 1998 134,337 100,648 29,905 50,000 15,453
Group Vice-President, 1997 92,640 42,008 29,842 70,000(6) 3,517
Corporate Marketing 1996 98,194 15,762 31,623 40,000 4,341
Lawrence Lieberman...... 1998 175,000 77,608 -- 12,500 --
Group Vice-President, 1997 156,250 35,001 -- 80,000(7) --
Corporate Development 1996 38,077 6,000 -- 60,000 --
David Ellett (5)........ 1998 164,135 39,113 -- -- 26,806
1997 202,500 123,733 -- 200,000 --
1996 -- -- -- -- --
</TABLE>
- --------
(1) All amounts are stated in U.S. dollars. For executive officers paid in
total or in part in French franc, 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 franc are Bernard
Liautaud, Alexandre Dayon, and David Kellogg. Due to the variation of the
exchange rate of the U.S. dollar against the French franc, the dollar
values 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 $18,000 in 1998, $17,260 in 1997 and $22,266, in 1996, (ii)
life insurance premiums of $4,372 in 1998, $4,573 in 1997, and $4,479 in
1996 and (iii) unemployment coverage of $3,210 in 1998, $3,158 in 1997 and
$3,499 in 1996. 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 and 1998 includes a total
of $201,554 payable as a relocation and cost of living allowance due to
his move from France to California. All other compensation for Mr. Ellett
in 1998 includes (i) a relocation allowance of $15,097 and (ii) a waiver
of interest on a company loan of $11,709. All other compensation paid to
Mr. Weatherford in 1997 corresponds to a sign-on bonus. All other
compensation paid to other executive officers corresponds to a contingent
profit-sharing program payable to employees of Business Objects S.A in
accordance with French laws.
(4) Mr. Weatherford joined the Company in August 1997.
(5) Mr. Ellett joined the Company as Chief Operating Officer in April 1997 and
resigned in June 1998.
(6) Consists of options to purchase 30,000 shares granted in 1995 and 40,000
shares granted in 1996, which were repriced in 1997.
(7) Includes options to purchase 60,000 shares granted in 1996 and repriced in
1997.
23
<PAGE>
Option Grants in Fiscal 1998. The following table contains information
concerning the grant of stock options to its Named Executive Officers during
fiscal 1998.
<TABLE>
<CAPTION>
Individuals grants
-----------------------------------------------
Potential
Realizable Value
at Assumed Annual
Rates of Stock
Number of % of Total Exercise Price
Securities Options or Base Appreciation For
Underlying granted Price Option Term (1)
Options Granted in Fiscal ($/share) Expiration -----------------
Name in Fiscal Year Year (2) Date 5% ($) 10% ($)
- ---- --------------- ---------- --------- ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Bernard Liautaud........ 50,000 3.4% 13.95 04/14/08 438,654 1,111,635
Clifton Weatherford..... 25,000 1.7% 15.375 07/07/08 241,731 612,595
10,000 0.7% 13.938 10/27/08 87,652 222,128
Alexandre Dayon......... 25,000 1.7% 13.875 02/10/08 218,148 552,829
35,000 2.4% 13.938 10/27/08 306,783 777,447
David Kellogg........... 25,000 1.7% 13.875 02/10/08 218,148 552,829
25,000 1.7% 13.938 10/27/08 219,130 555,320
Lawrence Lieberman...... 12,500 0.8% 13.938 10/27/08 109,565 277,660
</TABLE>
- --------
(1) In accordance with Securities and Exchange Commission 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) All stock options are granted at no less than the fair market value on the
last trading day prior to the date of grant, in accordance with the terms
of the Company's 1994 Stock Option Plan.
Aggregated Option Exercises in Fiscal 1998 and Fiscal Year-End Option
Values. The following table sets forth the value of in-the-money options held
by each of the Named Executive Officers as of December 31, 1998.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Underlying Unexercised In-The Money Options
Options at FY-End at FY-End ($)(1)
Shares Acquired Value ------------------------- -------------------------
Name on Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- --------------- ------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bernard Liautaud........ -- -- -- 50,000 -- 872,628
Clifton Weatherford..... -- -- 33,333 101,667 797,897 2,160,829
Alexandre Dayon......... -- -- 34,301 73,699 602,226 1,308,512
David Kellogg........... 15,000 164,057 36,367 68,633 870,523 1,348,003
Lawrence Lieberman...... -- -- 39,165 53,335 912,741 1,144,670
David Ellett............ 58,333 126,262 -- -- -- --
</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, 1998 ($32.50). 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.
24
<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 point 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 stock option plans, 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
incentivizing 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
37.5% of the base salary if such performance goals are met. The bonus may be
higher 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, with, effective January 1999, the benefit of the Company
matching employee contribution up to a maximum of $1,500 per year vesting over
three (3) years. 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 1998
During fiscal 1998, the Chief Executive Officer's compensation was comprised
of a base salary of $320,000, a car allowance of $18,000 and a variable salary
if certain performance criteria were met. Variable salary is a mix of personal
and Company objectives. The Company objectives represented fifty percent of
the total bonus payable to the Chief Executive Officer for fiscal 1998 and is
based on the Company's achievement of certain revenues and earnings per share
thresholds. For fiscal 1998, based on objectives achieved, the amount of the
variable compensation to be awarded to the Chief Executive Officer is
$249,500. 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 was 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
United States Internal Revenue Code of 1986, as amended, 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
25
<PAGE>
for any of the Named Executive Officers, 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,
David Ellett. Mr. Ellett resigned from the Company in June 1998. The loan was
secured by a deed of trust and was repaid on May 18, 1998. Interest of 6.23%
per annum was waived.
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 Statuts 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
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 requires our 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
26
<PAGE>
changes in ownership on Form 4 or Form 5 with the Securities and Exchange
Commission. Such officers, directors and ten-percent stockholders are also
required by Securities and Exchange Commission rules to furnish Business
Objects with copies of all Section 16(a) forms they file.
Based solely on our review of the copies of such forms received by it, we
believe that, for the fiscal year ended December 31, 1998, all Section 16(a)
filing requirements applicable to its officers, directors and ten-percent
stockholders were complied with except as follows: (1) Bernard Charles became a
reporting person on June 18, 1998, but did not file a Form 3 until July 10,
1998, (2) David Ellett did not file a Form 4 for a sale of shares by his wife
in October 1998, but included the transaction in a Form 5 filed in February
1999, and (3) Vincent Worms became a reporting person in September 1997, and
filed his Form 3 on a timely basis, however, he failed to include certain
shares held directly by him and indirectly through an affiliate. Mr. Worms
filed amended Form 3s in September 1998 and March 1999 to include such shares.
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 23, 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.
COMPARISON OF TOTAL CUMULATIVE SHAREHOLDER RETURN
AMONG BUSINESS OBJECTS S.A., MG GROUP INDEX AND NASDAQ MARKET INDEX
[PERFORMANCE GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
09/23/94 12/31/94 12/31/95 12/31/96 12/31/97 12/31/98
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
BUSINESS OBJECTS S.A.... 100.00 124.58 163.98 91.53 70.34 220.34
MG GROUP INDEX.......... 100.00 109.31 157.54 223.60 298.44 524.53
NASDAQ MARKET INDEX..... 100.00 97.99 127.10 157.94 193.20 272.49
</TABLE>
27
<PAGE>
REPORT OF THE BOARD OF DIRECTORS ON THE ACTIVITIES OF THE COMPANY DURING THE
FISCAL YEAR 1998
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 U.S. 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 1998
Consolidated financial data discussed below are derived from the
consolidated financial statements prepared in French franc in accordance with
French GAAP, audited by Ernst & Young and Mr. Pierre Dupuy, independent
auditors.
Total operating revenues increased from FF667 million in 1997 to FF974
million in 1998, representing an increase of 46%. The Group generated
approximately 65% 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 FF458 million in 1997 to FF635 million in 1998.
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 31% from 1997 to 1998, and represented 29% of the Group's total
license fees in 1998, as compared to 31% in 1997. License fees in Europe grew
42% from 1997 to 1998, and represented 63% of the Group's total license
revenue, as compared to 62% in 1997. License fees in Asia grew 39% from 1997
to 1998, and represented 8% of the Group's total license fees in 1998, as
compared to 7% in 1997.
Revenues from services consist of consulting revenue, training revenue and
maintenance revenue. Revenues from services increased from FF209 million in
1997 to FF339 million in 1998, representing respectively 31% and 35% of the
Group's total revenues. Revenues from services in 1998 increased 62% over the
prior year as compared with an increase of 97% during 1997. The increase in
revenues from services during both years was due primarily to increases in
maintenance revenues related to increases in the Group's installed customer
base and the renewal of support contracts, and increases in training and
consulting revenues.
Total operating expenses increased from FF545 million in 1997 to FF725
million in 1998, representing respectively 82% and 74% of the total revenues.
Income from operations increased from FF24 million in 1997 to FF91 million
in 1998, representing an increase of 279%.
Net other income increased from FF10 million in 1997 to FF12 million in
1998. The Group generated FF8 million-interest income in 1998, as compared to
FF6 million in 1997. The increase in interest income was due to a higher cash
balance. Net exchange gains totaled FF0.6 million in 1998, as compared to
FF3.4 million in 1997. 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 U.S. dollar, British pound sterling, German mark and
Japanese yen. To date, the Company has not undertaken hedging transactions to
cover its currency exposures. The Group also recognized as income the
investment grant that was awarded by the French Ministry of Commerce in 1992.
This grant became finally and fully recognizable to the Company, the total
amount is FF4 million.
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<PAGE>
Net income, after provision for income taxes of FF42 million, increased from
FF17 million in 1997 to FF59 million in 1998, representing an increase of
247%.
Consolidated balance sheet. Total assets increased from FF565 million in
1997 to FF760 million in 1998. This increase was primarily due to an increase
in cash and cash equivalents, which was due to the improvements of the
accounts receivable collection. 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 1998
The financial year 1998 is the seventh financial year of the Company. In
1998, the Company recorded a 36% growth in revenue from products. Such
revenues in 1998, which consist of 61% license revenues and 39% services,
reached FF363 million or FF188 million exclusive of sales to subsidiaries. In
1997, total revenues were FF267 million or FF160 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
FF391 million in 1998 as compared to FF277 million in 1997. Income from
operating activities amounted to FF30 million in 1998, as compared to FF10
million in 1997. Financial income amounted to FF8 million in 1998, as compared
to FF11 in 1997. Income before taxes and exceptional items amounted to FF38
million in 1998, as compared to FF21 million in 1997. Exceptional charges were
FF0.491 million in 1998, compared to FF0.165 million in 1997. Pre-tax profits
for 1998 amounted to FF28 million, as compared to FF17 million in 1997,
reflecting an increase of 70%. Corporate income tax amounted to FF10 million
and after-tax profits were therefore FF18 million, as compared to FF9 million
in 1997.
3. Research and development activities
The Group's total research and development expenses were approximately FF
113.7 million in 1998, as compared to FF 87.7 million in 1997. The Company's
research and development staff consisted of 155 employees as of December 31,
1998. As of December 31, 1998, the Company had not capitalized any software
development costs and all the research and development costs have been
expensed as incurred.
The efforts of the Company will continue to concentrate on decision support
solutions to enhance its core technology, data representation, and query
capabilities and to develop new or enhanced analysis and reporting products.
In addition, the Company plans to expand its products and services for the
internet. Version 2.0 of WebIntelligence was launched in September 1998. This
product allows end users to perform ad hoc query, reporting, and analysis over
the internet.
The Company also intends to increase its commitment to deployments on
Enterprise Resource Planning (ERP) Systems, by delivering products that
complement ERP systems, in order to leverage the decision support
opportunities that ERP deployments create. Today the Company offers several
Rapid Deployment Templates (RDTs) for various ERP systems, which allow
customers to quickly deploy Company products in conjunction with an existing
or newly installed ERP system.
4. Future orientation of the Company
The Company will continue to concentrate its product strategy on three main
domains:
Decision Support Solutions. The Company intends to consolidate its position
of market leader and to expand its market share. The Company plans to converge
its client-server products with its internet products.
29
<PAGE>
Moreover, the Company intends to enhance the reporting and analysis
capabilities of its products, as well as their functionality to access
relational and multidimensional databases and business application systems.
Decision Support Tools for Extranets. The Company intends to consolidate its
position in this domain by focusing on products that enable companies to share
their databases with their customers, partners and suppliers.
Solutions. The Company intends to offer products and services aimed at
providing companies with a full enterprise solution. The Company further
intends to improve the consulting and integration services offered to its
customers in connection with products developed by third parties.
The Company intends to continue to enhance and expand its worldwide
presence, particularly in the United States, which continues to be its most
competitive marketplace, as well as the marketplace offering better
opportunities.
The Company also intends to continue growing internally, although it may
grow externally by the acquisition of third party technology.
5. Important events that have occurred since the close of the financial year
Since the close of the financial year, the Company is not aware of any event
which would adversely affect the assets of the Company and the accuracy of the
accounts.
6. Employee Stock Options
During the 1998 financial year, stock options to purchase 1,487,725 Ordinary
Shares were granted to employees under the 1994 Stock Option Plan. During the
same year, options to acquire 635,204 shares were canceled, due to termination
of employment of optionees. As of December 31, 1998 there were options
outstanding to purchase 2,722,769 Ordinary Shares.
During the financial year 1998, 319,014 options were exercised, giving rise
to the creation of 319,014 shares of FF1 nominal value each.
7. Employee Stock Purchase Plans
The Company implemented an Employee Stock Purchase Plan (the "1995
International Employee Stock Purchase Plan") the terms of which are more fully
described under Proposal 12. In 1998, the Company issued a total of 90,952
Ordinary Shares under this Plan, of which 58,672 were issued on April 1, 1998
at a price of FF53.33 per share, and 32,280 shares were issued on October 2 at
a price of FF59.49 per share.
Under the French Employee Savings Plan, the Company also implemented an
employee stock purchase plan, intended to qualify under the provisions of
French tax regulations. This Plan, the terms of which are more fully described
under Proposal 10, is specifically designed for employees of the French parent
company, in order for them to benefit from the French statutory provisions
relating to employee savings plans. On April 1, 1998, the Company issued
67,812 Ordinary Shares under the French Employee Savings Plan at a purchase
price of FF44.06 per share.
30
<PAGE>
The impact of the above issuances on the shareholders share of
unconsolidated net equity of the Company were as follows, before taking into
account the 1998 profit of the Company:
<TABLE>
<S> <C>
As of December 31, 1997:
Net equity of the Company (unconsolidated): FF 282,188,525
Equity per share: FF 16.82
As of April 1, 1998:
Net equity of the Company (unconsolidated): FF 288,305,299
Equity per share: FF 17.05
As of October 2, 1998:
Net equity of the Company (unconsolidated): FF 290,225,638
Equity per share: FF 17.13
</TABLE>
These issuances under the Company's employee stock purchase plans
represented a dilution of 0.94%, compared to the shares outstanding as of
December 31, 1997.
Employees having exercised their options or having acquired shares under
stock purchase plans held 0.4% of the Ordinary Shares of the Company as of
December 31, 1998.
THE BOARD OF DIRECTORS
31
<PAGE>
BUSINESS OBJECTS S.A.
FIVE YEAR SUMMARY FINANCIAL INFORMATION
(In French franc)
<TABLE>
<CAPTION>
1994 1995 1996 1997 1998
---------- ----------- ----------- ----------- -----------
1. Capital at year-end
<S> <C> <C> <C> <C> <C>
Capital stock, par
value.................. 15,672,902 15,677,662 16,173,513 16,492,297 16,936,427
Number of ordinary
shares issued.......... 15,672,902 15,677,662 16,173,513 16,492,297 16,936,427
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.. 98,416,577 167,644,564 227,845,192 267,371,015 363,016,601
Income before taxes,
profit sharing and
amortization and
provisions............. 23,822,326 57,008,428 37,279,585 29,190,204 50,257,953
Income tax benefit
(provision)............ 712,773 (14,938,663) (10,045,109) (7,625,652) (10,393,458)
Required profit
sharing................ 1,312,178 6,306,886 3,460,845 4,415,572 13,370,005
Income after taxes,
profit sharing and
amortization and
provisions............. 19,604,044 29,829,842 20,412,912 9,105,875 18,038,197
Dividends distributed...
3. Income per issued share
Income after taxes and
profit sharing but
before amortization and
provisions............. 1.48 2.28 1.47 1.04 1.56
Income after taxes,
profit sharing and
amortization and
provisions............. 1.25 1.90 1.26 0.55 1.07
Dividends distributed
per share..............
4. Personnel
Average number of
employees.............. 105 157 215 303 340
Total payroll and social
charges................ 30,477,203 50,487,712 69,866,129 88,609,212 107,414,666
Total social benefits... 14,084,056 22,723,746 31,708,537 41,610,171 59,078,462
</TABLE>
32
<PAGE>
BUSINESS OBJECTS S.A.
UNCONSOLIDATED STATEMENT OF OPERATIONS
(in French francs)
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Manuals and packages................................ 4,526,809 3,239,632
Product revenues.................................... 358,489,792 264,131,383
Total product revenues.............................. 363,016,601 267,371,015
Other revenue....................................... 28,006,902 9,653,994
------------ ------------
Total operating revenue............................. 391,023,503 277,025,009
Purchases of goods for resale....................... (5,342,143) (5,728,614)
Change in inventory................................. (521,676) 1,477,439
Other outside purchases............................. (168,028,977) (114,122,955)
Taxes............................................... (6,264,548) (5,109,479)
Salaries............................................ (107,414,666) (88,609,212)
Social charges...................................... (59,078,462) (41,610,171)
Depreciation & amortization......................... (10,135,559) (7,618,196)
Reserves against current assets..................... (1,480,677) (2,885,667)
Other expenses...................................... (2,745,895) (2,664,073)
------------ ------------
Total operating expenses............................ (361,012,602) (266,870,928)
------------ ------------
Operating income.................................... 30,010,900 10,154,081
Interest income..................................... 6,493,809 7,271,295
Exchange rate gains................................. 11,591,134 7,688,797
------------ ------------
Financial revenues.................................. 18,084,945 14,960,092
Reserve for exchange rate losses.................... (2,483,688) (2,349,431)
Interest expense.................................... (93,698) (27,695)
Exchange rate losses................................ (7,239,403) (1,511,669)
------------ ------------
Financial expenses.................................. (9,816,789) (3,888,795)
------------ ------------
Income from financial activities.................... 8,268,155 11,071,297
Income before tax and exceptional items............. 38,279,055 21,225,378
Exceptional income.................................. 4,014,033 86,746
Exceptional expenses................................ (491,428) (165,025)
------------ ------------
Net exceptional income (expense).................... 3,522,605 (78,279)
Profit sharing...................................... (13,370,005) (4,415,572)
------------ ------------
Net income before tax............................... 28,431,655 16,731,527
Income tax benefit (provision)...................... (10,393,458) (7,625,652)
------------ ------------
Net income.......................................... 18,038,197 9,105,875
============ ============
</TABLE>
33
<PAGE>
BUSINESS OBJECTS S.A.
UNCONSOLIDATED BALANCE SHEET
(in French Francs)
<TABLE>
<S> <C> <C> <C> <C>
ASSETS
<CAPTION>
1998
Gross Provisions Net 1997 Net
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Intangible fixed assets...... 13,018,046 (6,549,019) 6,469,027 5,214,675
Tangible fixed assets........ 45,133,507 (17,713,567) 27,419,940 20,345,036
Equity in subsidiaries....... 98,162,927 -- 98,162,927 92,065,222
Loans to subsidiaries........ 5,043,711 -- 5,043,711 37,831,188
Deposits..................... 710,237 -- 710,237 644 578
----------- ----------- ----------- -----------
Total long-term assets....... 162,068,428 (24,262,586) 137,805,842 156,100,701
Inventory.................... 2,407,629 (1,070,941) 1,336,688 2,272,794
Prepaid expenses............. 5,726,597 -- 5,726,597 10,227,685
Trade accounts receivable.... 140,057,334 (2,022,882) 138,034,452 144,198,017
Other accounts receivable.... 9,528,179 -- 9,528,179 15,488,005
Marketable securities........ 129,674,648 -- 129,674,648 55,489,544
Cash & cash equivalents...... 39,435,210 -- 39,435,210 16,426,089
----------- ----------- ----------- -----------
Total current assets......... 327,247,234 (3,093,823) 324,153,411 244,102,134
Unrealized exchange losses... 417,638 -- 417,638 1,536,022
----------- ----------- ----------- -----------
Total assets................. 489,315,662 (27,356,408) 461,959,254 401,738,856
=========== =========== =========== ===========
LIABILITIES & SHAREHOLDERS'
EQUITY
<CAPTION>
1998 1997
----------- -----------
<S> <C> <C> <C> <C>
Capital stock, par value............................. 16,936,427 16,492,297
Paid-in capital...................................... 179,829,439 169,611,019
Legal reserves....................................... 1,677,766 1,638,502
Prior years' retained earnings....................... 87,782,005 78,715,394
current year net income.............................. 18,038,197 9,105,875
Investment grant..................................... -- 4,000,000
----------- -----------
Total shareholders' equity........................... 304,263,835 279,563,087
Conditional loans.................................... -- --
Provision for unrealized exchange losses............. 3,265,448 3,864,948
Bank overdrafts...................................... 16,042,906 2,849,721
Accounts payable..................................... 48,536,827 53,570,436
Accrued wages and taxes.............................. 59,216,841 39,071,628
Other payables....................................... 4,838,402 2,953,487
----------- -----------
Total liabilities.................................... 131,900,423 102,310,220
Deferred revenue..................................... 25,382,053 18,209,969
Unrealized exchange gains............................ 412,943 1,655,581
----------- -----------
Total liabilities & shareholders' equity............. 461,959,254 401,738,857
=========== ===========
</TABLE>
34
<PAGE>
TEXT OF RESOLUTIONS SUBMITTED FOR APPROVAL
First resolution
This resolution is to approve the Company's financial statements
(unconsolidated) for the 1998 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, 1998, 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, 1998, as they have been presented, the expenses referred to in article 39-
4 of the French Tax Code amounting to FF360,250 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 1998 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, 1998 amount to
FF18,038,197.10,
RESOLVED, that the above-mentioned profits be allocated:
--up to the limit of FF47,777.80, to the legal reserve which will amount,
after allocation, to FF1,725,544.10.
--the balance of FF17,990,419.30, to be carried forward to retained
earnings, which will amount after allocation to FF105,772,424.68.
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. Vincent Worms 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. Vincent Worms, Director,
expires at the end of this general meeting,
RESOLVED, that Mr. Vincent Worms 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, 2001.
Fourth resolution
This resolution is to increase the amount of authorized directors' fees to
the members of the Board of Directors for the fiscal year 1999 and on-going
fiscal years:
WHEREAS, this general meeting has acted in accordance with the conditions of
quorum and majority required for ordinary general meetings,
35
<PAGE>
WHEREAS, this general meeting has acknowledged the report of the Board of
Directors,
RESOLVED, to allocate directors' fees amounting to the aggregate of
FF750,000 to the Board of Directors for the fiscal year 1999 and annual
directors' fees amounting to the aggregate of FF750,000 for each future fiscal
year until the shareholders resolve otherwise; such amount to be shared among
members of the Board of Directors pursuant to a resolution of the Board.
Fifth resolution
This resolution is to broaden the authority of the Board of Directors to
carry out a stock repurchase plan.
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,
Pursuant to the provisions of Article 217-2 et. seq. of the law
n(degrees)66-537 of July 24, 1966 and subject to the condition precedent of
the admission of the Company's shares for listing on a regulated market as
defined by the law n98-546 of July 3, 1996,
RESOLVED, to authorize the Board of Directors to purchase up to 1,000,000
shares of the Company of FF1 nominal value each (or the Euro equivalent),
including through the purchase and cancellation of American Depositary Shares,
RESOLVED FURTHER, that the purchase price per share shall not exceed FF177
(or the Euro equivalent), excluding expenses and commissions,
RESOLVED FURTHER, that this authorization may be used in accordance with
article 217-2 of the law n(degrees)66-537 of July 24, 1996, including, among
other things, (i) to stabilize the market price of the Company's shares, (ii)
to make use of excess cash balances, (iii) to provide for shares to be used in
the context of the implementation of employee stock purchase plans, (iv) to
provide for shares to be used as a consideration in the context of an
acquisition or an exchange, or (v) to minimize the dilution effect of a
securities issuance.
RESOLVED FURTHER, that repurchased shares may, subject to the approval of
the fifteenth resolution, be canceled,
RESOLVED FURTHER, that the Board of Directors may purchase, sell and
transfer the repurchased shares by any means.
It shall report to the Conseil des Marches Financiers on a monthly basis, on
any purchase, sale, transfer or cancellation of shares realized.
Such authorization shall remain valid for a period of eighteen months from
the date of this meeting.
Sixth resolution
This resolution is to acknowledge that no transactions in which directors
have an interest have been entered into in fiscal 1998.
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,
36
<PAGE>
ACKNOWLEDGES that no transactions referred to in the said article have been
entered into during the financial year 1998.
Seventh resolution
This resolution is to authorize the Board of Directors to convert the share
capital of the Company into the Euro.
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,
RESOLVED, that the Board of Directors is authorized to convert the share
nominal value into Euro and to round it down or up to the nearest hundredth of
a Euro.
RESOLVED FURTHER, that, in order to complete this conversion, the Board of
Directors may either, make use of the authorization granted by the eleventh
resolution adopted at the meeting of shareholders held on June 18, 1998 and
extended pursuant to the sixteenth resolution of this Meeting, to increase the
share capital by incorporation of issue or contribution premiums ("primes
d'emission ou d'apport"), reserves or profits, or reduce the share capital by
allocation to a special reserve account.
RESOLVED FURTHER, that the Board of Directors is authorized to amend the
Statuts of the Company, as the case may be, to proceed with all formalities it
deems appropriate and to carry the intent of these resolutions.
The authorization to increase the share capital is granted for the twenty
six-month (26) period provided for in the eleventh resolution adopted at the
meeting of shareholders held on June 18, 1998.
The authorization to reduce the share capital is granted for a twenty six-
month (26) period as of this meeting.
Eighth resolution
This resolution is to approve the 1999 Option Plan, to authorize the
granting of options by the Board of Directors corresponding to 875,000
Ordinary Shares reserved for subscription or purchase to employees of the
group thereunder, 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, that the 1999 Option Plan is hereby approved,
RESOLVED FURTHER, 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 1999
Option Plan as approved at this meeting, 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 875,000
shares of the Company of FF1 nominal value each (or the Euro equivalent upon
conversion of the nominal value of one share in accordance with the seventh
resolution),
RESOLVED FURTHER, that this authorization is granted for a period of five
years and, as a consequence, will expire on May 4, 2004,
37
<PAGE>
RESOLVED FURTHER, 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 event the shares of the Company are listed either directly or in
the form of Depositary Shares ("DS") solely on a regulated market as defined
under the law n(degrees)98-546 of July 3, 1998, or both on a regulated market
and any other established stock exchange or a national market system, the
issue or purchase price shall be determined in accordance with the following:
(a) In the case of an Incentive Stock Option granted to a beneficiary
subject to the laws of the U.S. 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 the higher of (i) 110%
of the closing sale price reported on the regulated market on the last
trading day preceding the grant date, or (ii) 80% of the average closing
sales prices reported on such market over the twenty trading days preceding
the grant date; as reported in La Tribune or such other source as the Board
of Directors deems reliable.
(b) In the case of an Incentive Stock Option or Non-Statutory Stock
Option granted to any beneficiary other than a beneficiary described in
paragraph (a) above, the per share exercise price shall be no less than the
higher of (i) 100% of the closing sale price on the regulated market on the
last trading day preceding the grant date, or (ii) 80% of the average
closing sales prices reported on such market over the twenty trading days
preceding the grant date, as reported in La Tribune or such other source as
the Board of Directors deems reliable.
(ii) In the event the shares of the Company are quoted, either directly or
in the form of Depositary Shares ("DS"), on any system or exchange, other than
a regulated market, the issue or purchase price shall be determined in
accordance with the following:
(a) In the case of an Incentive Stock Option granted to a beneficiary
subject to the laws of the U.S. 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 closing sale
price for such share or DS (or the closing bid, if no sales were reported)
as quoted on the system or exchange with the greatest volume of trading
shares or DSs on the last trading day prior to the grant date, as reported
in The Wall Street Journal or such other source as the Board of Directors
deems reliable.
(b) In the case of an Incentive Stock Option or Non-Statutory Stock
Option granted to any beneficiary other than a beneficiary described in
paragraph (a) above, the per share exercise price shall be no less than
100% of the closing sale price for such share or DS (or the closing bid, if
no sales were reported) as quoted on such system or exchange with the
greatest volume of trading shares or DSs 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) It being specified that, when an option entitles the holder to
purchase shares previously repurchased by the Company, the exercise price,
notwithstanding the above provisions and in accordance with applicable law,
may not be less than eighty (80%) of the average purchase price paid for all
shares previously repurchased by the Company.
(iv) 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 Euro value of the U.S. dollar value
(which shall also be converted into French francs at the legal rate for the
period provided for by the laws and regulations in force) of one (1) share,
calculated on the basis of a noon buying rate reported by the Federal Reserve
Bank of New York (expressed in Euros per one (1) U.S. dollar) on the day
preceding the grant date (or, should there be no quotation on such day, on the
preceding day of quotation).
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(v) It being further specified that if shares are quoted in the form of DSs,
the issue price per share shall be equal to the price of one DS determined in
accordance with the above, divided or multiplied by the number of shares that
such DS represents.
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
United States 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 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.
RESOLVED FURTHER, that new shares issued will be subject to all provisions
of the Statuts and will entitle the holder thereof to the rights attached to
shares previously issued as from the first day of the fiscal year of the final
accomplishment of the capital increase.
RESOLVED FURTHER, that the Board of Directors is authorized:
--to set the dates of grant, set the terms and conditions under which the
options are granted and exercisable, and set the exercise 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
Statuts 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 DSs to satisfy options to purchase 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.
Ninth resolution
This resolution is to deliberate on the issue price of shares reserved for
issuance at the June 18, 1998 shareholders' meeting held on June 18, 1998
under the Employee Savings Plan and to re-affirm the price setting conditions
voted on and approved at such meeting.
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 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 18, 1998 and reserved for
issuance under the Employee Savings Plan, except that when the issue price of
a share determined pursuant to the price-setting conditions provided here
above is obtained in U.S. dollars, the issue price of one share shall be
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the Euro value of the U.S. dollar value (which shall also be converted into
French francs at the legal rate for the period provided for by the laws and
regulations in force) of one (1) share, calculated on the basis of a noon
buying rate reported by the Federal Reserve Bank of New York (expressed in
Euros per one (1) U.S. dollar) on the day preceding the Board of Directors'
decision to set the opening date for subscription (or, should there be no
quotation on such day, on the preceding day of quotation).
Tenth resolution
This resolution is to authorize a capital increase for 90,000 Ordinary
Shares to be reserved for subscription to employees of the Company under the
French Employee Savings Plan, to cancel shareholders' preferential
subscription right to such shares and to authorize the Board of Directors 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 way of issuance of
90,000 shares of FF1 nominal value each (or the Euro equivalent upon
conversion of the nominal value of one share in accordance with the seventh
resolution), 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 will be the higher of:
(i) eighty percent (80%) of the average of the closing sales prices for one
share or one Depositary Share ("DS") or the closing bid, if no sales were
registered) as quoted on the system or exchange with the greatest volume of
shares or DSs 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 one share or ADS (or
the closing bid, if no sales were registered) as quoted on the exchange with
the greatest volume of shares or DSs 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, La Tribune, or such other source the
Board deems reliable.
RESOLVED FURTHER, that in the absence of an established market quotation,
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 Euro value of the U.S. dollar value
(which shall also be converted into French francs at the legal rate for the
period provided for by the laws and regulation in force) of one (1) share,
calculated on the basis of a noon buying rate reported by the Federal Reserve
Bank of New York (expressed in Euros per one (1) U.S. dollar) on the day
preceding the Board of Directors' decision to set the opening date for
subscription (or, should there be no quotation on such day, on the preceding
day of quotation).
It being further specified that if the shares are quoted in the form of DSs,
the issue price per share shall be equal to the price of one DS determined in
accordance with the above, divided or multiplied by the number of Ordinary
Shares such DS represents.
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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 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 Statuts, and will entitle the holder thereof to the rights attached to
shares previously issued 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 Statuts consequently, and in general, carry out all
formalities that are necessary.
This authorization is granted for a period of two years from the date of
this meeting.
Eleventh resolution
This resolution is to deliberate on the issue price of shares reserved for
issuance at the June 18, 1998 shareholders' meeting under the 1995
International Stock Purchase Plan and to re-affirm the price setting
conditions voted on and approved on June 18, 1998.
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 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 18, 1998 and reserved for
issuance under the 1995 International Stock Purchase Plan, except that when
the issue price of one share determined pursuant to the price-setting
conditions provided here above is obtained in U.S. dollars, the issue or
purchase price of a share shall be the Euro value of the U.S. dollar value
(which shall also be converted into French francs at the legal rate for the
period provided for by the laws and regulation in force) of one (1) share,
calculated on the basis of a noon buying rate reported by the Federal Reserve
Bank of New York (expressed in Euros per one (1) U.S. dollar) on the last day
of the offering period (or, should there be no quotation on such day, on the
preceding day of quotation).
Twelfth resolution
This resolution is to authorize the issuance of 260,000 new shares under the
1995 International Stock Purchase Plan, to cancel the shareholders'
preferential right to such shares, and to authorize 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,
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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 by
way of issuance of a maximum of 260,000 shares of FF1 nominal value each (or
the Euro equivalent upon conversion of the nominal value of one share in
accordance with the seventh resolution), 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, will be equal to eighty
five percent (85%) of the lowest closing sale price for such share or
Depositary Share ("DS") (or the closing bid, if no sales were registered) as
quoted on the system or exchange with the greatest volume of trading shares or
DSs 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, La Tribune, or such other source the Board will deem reliable;
It being specified that when the issue price of one share determined
pursuant to the price-setting conditions provided here above is obtained in
U.S. dollars, the issue or purchase price of a share shall be the Euro value
of the U.S. dollar value (which shall also be converted into French francs at
the legal rate for the period provided for by the laws and regulation in
force) of one (1) share, calculated on the basis of a noon buying rate
reported by the Federal Reserve Bank of New York (expressed in Euros per one
(1) U.S. dollar) on the last day of the offering period (or, should there be
no quotation on such day, on the preceding day of quotation).
It being further specified that if the shares are quoted in the form of DSs,
the issue price per share shall be equal to the price of one DS determined in
accordance with the above, divided or multiplied by the number of shares such
DS represents.
RESOLVED FURTHER, that the new shares will be subject to all provisions of
the Statuts 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 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
260,000 new shares to be issued is reserved to Business Objects S.A. Employee
Benefits Trust.
RESOLVED FURTHER, that the Board of Directors is authorized 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 Statuts 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.
Thirteenth resolution
This resolution is to amend Articles 7, 8 and 18 of the charter document, or
Statuts, of the Company.
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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,
RESOLVED, upon the condition precedent that the shares of the Company are
traded on a regulated market as defined in the law n(degrees)98-546 of July 3,
1998, to amend Article 7 of the Statuts of the Company, which will be as
follows:
"ARTICLE 7--FORM AND TRANSFER OF SHARES--IDENTIFICATION OF SHAREHOLDERS
7.1. The fully paid-up shares must be either in the registered or
bearer form, at the shareholder's discretion, subject to, however, the
statutory provisions related to the form of shares held by some
individuals or corporations.
The shares are entered into account under the terms and conditions
provided by law and regulations in force.
However, certificates or any documents representative of shares may
be created when and as provided by law.
The shares entered into accounts are freely transferable by transfer
from one account to another.
Prior approval of the transferee is required only for partly paid-up
shares.
All costs resulting from the transfer shall be borne by the
transferee.
Shares with payments in arrears are not admitted to transfer.
7.2. Any individual or legal entity, acting alone or in concert, which
would own, either directly or indirectly, through one or several legal
entities which it controls within the meaning of Article 355-1 of the
law n(degrees)66-537 of July 24, 1966, a number of shares or voting
rights representing five percent (5%) of the share capital or voting
rights or any multiple of said percentage must notify the Company of
the total number of shares or voting rights which it owns by registered
letter with return receipt requested at the registered office within a
period of fifteen (15) days as from the date on which one of these
thresholds has been reached.
This obligation to notify the Company applies in the same conditions
each time the percentage of capital or voting rights falls under 5% or
a multiple thereof.
In the event of breach of these provisions, the shares or voting
rights certificates exceeding the threshold and subject to notification
shall be deprived of the right to vote at any shareholders' meeting
which will be held until the expiration of a two-year (2) period
following the date on which the notification has been finally sent, if
this deprival is requested by one or several shareholders holding
together or individually at least two percent (2%) of the share capital
or voting rights of the Company.
7.3 The Company is entitled under the terms and conditions provided by
law and regulations to request at any time, for consideration it shall
bear, to any entity empowered to do so, the name or, with respect to a
legal entity, the corporate name, nationality and address of the
holders of shares granting either immediately or in the future the
right to vote in its own shareholders' meetings, as well as the number
of shares held by each one of them and, as the case may be, the
restrictions to which the shares may be subject."
RESOLVED, upon the condition precedent that the shares of the Company are
traded on a regulated market as defined in the law n(degrees)98-546 of July 3,
1998, to amend the first paragraph of Article 8 of the Statuts of the Company,
which will be as follows:
"The rights and obligations attached to a share follow the share to any
transferee to whom it may be transferred."
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The rest of the Article remains unchanged.
RESOLVED, upon the condition precedent that the shares of the Company are
traded on a regulated market as defined in the law n(degrees)98-546 of July 3,
1998, to amend Article 18 of the Statuts of the Company which will be as
follows:
The third paragraph of Article 18 of the Statuts of the Company is
replaced by the following paragraph:
"The right to participate to general meeting of shareholders is subject
to:
--as regards holders of registered shares, the registration of the
shares in the name of the shareholder in the books of the Company, at
least one business day before the date of the general meeting of
shareholders;
--as regards holders of bearer shares, the receipt, one workable day
before the date of the general meeting of shareholders, under the
conditions provided by Article 136 of the decree of March 23, 1967, to
the places specified by the convening notice, of a certificate
delivered by the account holder certifying the non-transferability of
the shares registered in account until the date of the general meeting
of shareholders."
The rest of Article 18 remains unchanged.
Fourteenth resolution
This resolution is to authorize the Board of Directors 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, during periods of
offers of exchange on securities of the Company, one or more of the
delegations granted to said Board for the purposes of increasing the share
capital of the Company pursuant to the eleventh and twelfth resolutions
adopted at the meeting of shareholders held on June 18, 1998.
This authorization 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, 1999.
Fifteenth resolution
This resolution is authorize capital reduction by cancellation of treasury
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, upon the conditions precedents of (i) the admission of the
Company's shares for listing on a French stock exchange or a foreign market
assimilated to a French stock exchange ("marche reglemente"), (ii) the
approval of the fifth resolution above, and (iii) creditors of the Company do
not oppose the transaction, to authorize, for an eighteen-month (18) period,
the Board of Directors to decrease the share capital by way of cancellation of
shares held by the Company in connection with a repurchase of shares completed
pursuant to a share repurchase plan.
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RESOLVED FURTHER, that the Board of Directors is hereby authorized to offset
the capital decrease on any of the reserves accounts as it deems appropriate.
RESOLVED FURTHER, that the Board of Directors is authorized to amend the
Statuts of the Company, as the case may be, to proceed with all formalities it
deems appropriate and to carry out all formalities that are necessary.
Sixteenth resolution
This resolution is to authorize the Board of Directors to increase the share
capital of the Company by incorporation of premiums, reserves or profits:
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,
RESOLVED that, the powers delegated to the Board of Directors by the
eleventh resolution adopted at the meeting of shareholders held on June 18,
1998, may be used by the Board of Directors in order to increase the share
capital of the Company, once or more than once, upon its own deliberation, by
way of incorporation of issue or contribution premiums, reserves or profits
into the share capital, either by increase in the nominal value, or by the
creation and free allocation of shares, or by the simultaneous execution of
both procedures up to a maximal nominal amount of FF15,000,000, or the Euro
exchange value of this sum, with the understanding (i) that the increase(s) in
share capital completed pursuant to the seventh resolution shall be part of
the above FF15,000,000 limit and (ii) that the increase(s) in share capital
completed in accordance with the authorization granted by this resolution
shall be part of the FF15,000,000 limit set in the eleventh resolution adopted
at the meeting of shareholders held on June 18, 1998.
These powers are granted to the Board of Directors for the twenty-six (26)
month period provided for in the eleventh resolution adopted at the meeting of
shareholders held on June 18, 1998.
RESOLVED FURTHER, that the Board of Directors is authorized to determine all
terms and conditions of the authorized transactions, to take all measures to
ensure its successful completion, to carry out all acts and formalities in
order to finalize the increase(s) in the share capital and to amend the
Statuts of the Company accordingly.
Seventeenth resolution
This resolution is to issue warrants to subscribe 15,000 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 authorize 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,
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 upon subscription,
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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. Vincent Worms,
RESOLVED FURTHER, to authorize the increase in share capital by an amount of
FF15,000, to be fully paid upon subscription, either in cash or by
compensation, corresponding to the issuance of 15,000 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
15,000 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 ADS of the Company on Nasdaq-Amex National Market on May 3, 1999,
times the noon buying rate for French franc 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 of (i) the grant of such warrants without payment as consideration
and (ii) the implementation of a fixed exercise per share,
RESOLVED FURTHER, that said warrants may be exercised immediately starting
May 4, 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, for a
period of ninety (90) days 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 so wishes,
his subscription rights,
RESOLVED FURTHER, that given the particular advantages attached to the share
warrants, the warrants shall not be transferable, except to a spouse, a direct
descendant or ascendant, or a sibling of the holder,
RESOLVED FURTHER, that the new shares will be subject to all provisions of
the Statuts, 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, that the Board of Directors is authorized, within the
limits set above:
--to verify the number of shares issued following the exercise of the
warrants, proceed with all formalities resulting from the relevant
capital increases, and modify the Statuts 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
Statuts accordingly, and in general, to take all necessary steps and
carry out any formal procedure useful to these resolutions,
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 Statuts 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 warrants giving the right to subscribe to 15,000 shares by the
shareholder meeting held on May 4, 1999. The special advantages consist of
(i) the grant of such warrants without payment as consideration and (ii)
the implementation of a fixed exercise price per share corresponding to the
estimated value of a share as of May 3, 1999."
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ANNEX A
BUSINESS OBJECTS S.A.
Societe anonyme
with a share capital of FF17,255,441
Registered office : 1 Square Chaptal
92300 Levallois-Perret
R.C.S. Nanterre B 379 821 994
----------------
----------------
ORDINARY AND EXTRAORDINARY
GENERAL MEETING OF SHAREHOLDERS ON May 4, 1999
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.
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BUSINESS OBJECTS S.A.
1999 STOCK OPTION PLAN
In conformity with the provisions of Articles 208-1 et. seq. of the law No.
66-537 of July 24, 1966 concerning commercial companies, Business Objects S.A.
adopted a plan for the grant to Beneficiaries (defined below) of options
giving rights to subscribe or purchase shares of the Company. In furtherance
of such decision the board of directors has adopted the Business Objects S.A.
1999 Stock Option Plan which was approved by the shareholders of the Company
on May 4, 1999.
The terms and conditions of the Business Objects S.A. 1999 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 an ordinary share of the Company, 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.
(d) "Shareholder Authorization" means the authorizations given by the
shareholders of the Company in an extraordinary general meeting held on
May 4, 1999 permitting the Board to grant Stock Options.
(e) "Optionee" means a Beneficiary who holds at least one outstanding
Option.
(f) "Change in Control" shall mean, and shall be deemed to have occurred
if:
(i) any person or entity, other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company
acting in such capacity or a corporation owned directly or
indirectly by the shareholders of the Company in substantially the
same proportions as their ownership of stock of the Company,
becomes the "beneficial owner" (as defined in Rule 13d-3 under the
Securities Exchange Act of 1934, as amended), directly or
indirectly, of securities of the Company representing 50% or more
of the total voting power represented by the Company's then
outstanding voting securities, or
(ii) the shareholders of the Company approve a merger or consolidation
of the Company with any other corporation other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of
the total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after
such merger or consolidation, or
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(iii) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or
disposition by the Company of (in one transaction or a series of
related transactions) all or substantially all of the Company's
assets to an entity other than an Affiliated Company.
(g) "Code" means the United States Internal Revenue Code of 1986, as
amended.
(h) "Board" means the board of directors of the Company.
(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 1999 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.
(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
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(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" The Fair Market Value shall be determined as
follows:
(i) if the Shares are listed on a Regulated Market, the Fair Market
Value of a Share shall be the closing sales price for such Share (or
the closing bid, if no sales were reported) as quoted on such
Regulated Market on the last market trading day prior to the day of
grant, as reported in La Tribune, or such other source as the
Administrator deems reliable;
(ii) if the Shares or ADRs corresponding to Shares are quoted on any
system or exchange other than a Regulated Market, the Fair Market
Value of a Share or an ADR shall be the closing sale price for such
Share or ADR (or the closing bid, if no sales were reported) as
quoted on the system or exchange with the greatest volume of
trading shares or ADRs on the last trading day prior to the grant
date, as reported in The Wall Street Journal or such other source
as the Administrator deems reliable;
(dd) "Regulated Market" shall mean, as of any date, a stock exchange or
system on which the Shares or ADRs are traded which is deemed to be a
regulated market ("marche reglemente") under the law n 98-546 of July
3, 1998, as amended.
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 875,000
Shares.
If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unsubscribed or unpurchased 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.
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(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 Shares, 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 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
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;
(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
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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 (k)
above, no member of the Board of Directors shall be eligible to receive
an Option under the Plan.
6. Term of Plan
The Plan is effective and Options may be granted as of May 4, 1999, the date
of the Plan's adoption by the shareholders. 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 May 4, 2004.
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
(a--1) If the Shares are traded on a Regulated Market, the per Share
exercise price for the Shares to be issued or purchased 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 Incentive Stock Option granted to a U.S.
Beneficiary who, at the time the Incentive Stock 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
Incentive Stock Option grants, the per Share exercise price shall be no
less than the higher of (i) 110% of the Fair Market Value per Share or
(ii) 80% of the average Fair Market Values on the twenty trading days
preceding the grant date.
(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 the higher of (i) 100% of the
Fair Market Value per Share, or (ii) 80% of the average Fair Market
Values on the twenty trading days preceding the grant date.
(a--2) If the Shares or ADRs are traded on any system or exchange other
than a Regulated Market, the per Share exercise price for the Shares to be
issued or purchased 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 Incentive Stock Option granted to a U.S.
Beneficiary who, at the time the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the voting
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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 Incentive Stock 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.
(a--3) It being specified that, when an option entitles the holder to
purchase shares previously repurchased by the Company, the exercise price,
notwithstanding the above provisions and in accordance with the Law, may
not be less than eighty (80%) of the average purchase price paid for all
Shares or ADRs previously repurchased by the Company.
(a--4) 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 Euro value of the U.S. dollar value (which shall
be converted into French francs at the legal rate for the period provided
for by the laws and regulation in force) of one (1) share, calculated on
the basis of a noon buying rate reported by the Federal Reserve Bank of New
York (expressed in Euros per one (1) U.S. dollar) on the day preceding the
grant date (or, should there be no quotation on such day, on the preceding
day of quotation).
(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 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 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 or purchase form (bulletin d'achat ou 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.
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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 six (6) 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 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 six
(6) 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.
The Administrator may restrict the right of an Optionee to sell or otherwise
dispose of the Shares. In accordance with the Law, such restriction may not
exceed three (3) years from the exercise date.
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;
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--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(degrees)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 give
each Optionee the right to exercise his or her Option as to which the
Option would not otherwise be exercisable.
(c) Change in Control. In the event of a Change in Control 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 Change in Control, 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 Change in Control,
the Option or right confers the right to purchase, for each Share of
Optioned Stock subject to the Option immediately prior to the Change in
Control, the consideration (whether stock, cash, or other securities or
property) received in the Change in Control by holders of Shares or ADRs
for each Share or ADR 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 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
Shares or ADRs 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. 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 Shares or ADRs 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.
(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.
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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
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.
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BUSINESS OBJECTS S.A.
1999 STOCK OPTION GRANT AGREEMENT
Part I
NOTICE OF STOCK OPTION GRANT
Name:
Address:
You have been granted an option to subscribe Shares of the Company, subject
to the terms and conditions of the 1999 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:
Total Number of Shares Granted:
Total Exercise Price:
Term/Expiration Date:
Type of Option (for US Beneficiaries only): This Option is intended to be an
Incentive Stock Option ("ISO"). However, in accordance with Section 422(d) of
the Internal Revenue Code of 1986 as amended, to the extent that the aggregate
fair market value of Shares subject to Incentive Stock Options which 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
is treated as Non-statutory Stock Options ("NSO").
Vesting Schedule: [to be determined on an individual basis]
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. You have
reviewed the Plan and this Option Agreement in their entirety, had the
opportunity to obtain the advice of counsel prior to executing this Option
Agreement and fully understand all provisions of the Plan and Option
Agreement. You hereby agree to accept as binding, conclusive and final all
decisions or interpretations of the Administrator upon any questions relating
to the Plan and Option Agreement. You further agree to notify the Company upon
any change in the residence address indicated above. You acknowledge and agree
that this Option and its vesting schedule does not constitute an express or
implied promise of continued employment and shall not interfere in any way
with your right or the Company's right to terminate your employment at any
time.
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 English version
represents an acceptable translation and, consequently, no official
translation will be required for the interpretation of this agreement.
<TABLE>
<S> <C>
OPTIONEE: FOR BUSINESS OBJECTS S.A.
___________________________________________ ___________________________________________
Signature
</TABLE>
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BUSINESS OBJECTS S.A.
1999 STOCK OPTION GRANT AGREEMENT
Part II
TERMS AND CONDITION
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 1999 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.
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 : (i) wire transfer; (ii) check; (iii) 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 (iv) 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 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.
11
<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
12
<PAGE>
BUSINESS OBJECTS S.A.
A Societe Anonyme with a registered capital of French Francs 17,255,441
Registered office: 1 square Chaptal 92300 Levallois-Perret--France
R. C. S.: Nanterre B 379 821 994
OPTION EXERCISE NOTICE AND SUBSCRIPTION FORM
IMPORTANT: if your option exercise notice is illegible, incomplete or
incorrect, it will be rejected
<TABLE>
<C> <S>
Name & first name: ............................................
In capital letters
Mailing Address: ............................................
Street, city, ZIP code, country
Registered for tax purposes at: ............................................
Home Phone: .................Work Phone:................
Email address: ............................................
</TABLE>
I, the undersigned, hereby give notice, effective the date set forth below,
that I exercise the following stock options previously granted to me by
Business Objects S.A. under the 1993, 1994 and/or the 1999 Stock Option
Plan(s):
OPTION EXERCISE INFORMATION
<TABLE>
<CAPTION>
Plan # Vested Options Exercise Price
(1993, 1994 Grant Date being Exercised per Share Total Exercise Price
or 1999) (day/month/year) (# Shares) (French Francs) (French francs)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
X =
- -------------------------------------------------------------------------------
X =
- -------------------------------------------------------------------------------
X =
- -------------------------------------------------------------------------------
Total Number of Options Exercised: Options
- -------------------------------------------------------------------------------
Total Exercise Price Due To Business Objects (in French Francs):
</TABLE>
I represent that the above shares are not subject to any encumbrance or
other claims and that Business Objects S.A., B.T. Alex Brown, AST StockPlan,
and the transfer agent may rely upon this notice as a representation and
authorization for this purpose.
METHOD OF EXERCISE
1. Exercise and Hold--No Sale (Cash Exercise only).
Deliver ADSs to my BT Alex. Brown account number
Register shares in a shareholder account opened in my name with
Banque Paribas
2. Exercise and Sell--"Same Day Sale." Sell the number of ADSs per my
verbal orders to BT 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, and (ii) all applicable taxes and
fees. Hold the balance of my ADSs in my Alex. Brown account number
and mail me acknowledgment at mailing address
indicated below.
cc: B.T. Alex Brown Banque Paribas
13
<PAGE>
Page 2 Option Exercise Notice and Subscription Form Your Name:
SECURITIES LAW COMPLIANCE
I do NOT currently have access to, nor and I aware of, any material, non-
public inside information regarding Business Objects which could or has
influenced my decision to purchase and/or sell this stock. (If you are
uncertain as to whether you are a corporate insider or possess material inside
information, please contact the Chief Financial Officer of Business Objects,
prior to exercising any options, as trading stock based upon your material,
non-public inside information could subject you to personal liability.) I
acknowledge that, if I am subject to Rule 16(b) of the Securities Exchange Act
of 1934, I may be liable to Business Objects S.A. for "short-swing profits".
PAYMENT OF OPTION PRICE AND USE OF PROCEEDS
1. Exercise and Hold--No Sale (Cash Exercise only). I understand I must
pay upon exercise the option price in French Francs to Business
Objects S.A. by bank wire, bank draft or personal check.
2. Exercise and Sell--"Same Day Sale." I authorize B.T. Alex Brown to
pay the aggregate amount of the option price to Business Objects
S.A. representing the purchase price of the shares acquired upon
exercise and any withholding taxes due. The remaining proceeds will
be credited to my B. T. Alex Brown 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.
I acknowledge that I have received and understand the terms and conditions
of the 1993, 1994 and/or 1999 Business Objects Stock Option Plan(s) and the
Option Agreement, and agree to abide by and be bound by their terms and
conditions.
Note: Above signature, please print : "Valid for the subscription of
shares"
OPTIONEE SIGNATURE: DATE:
Day/month/year
AST Stock Plan Approval AST Stock Plan Approval Order number
We hereby confirm that the optionee
is entitled to exercise the We hereby confirm that the option
Option(s) indicated above, as of the price indicated above was paid in
subscription date indicated above. full to the Company on
, and that
shares may validly be issued
as of such date.
BY:
-------------------------------
Date: BY:
------------------------------ -------------------------------
Title: Date:
------------------------------ ------------------------------
Title:
------------------------------
cc: B.T. Alex Brown Banque Paribas
14
<PAGE>
BUSINESS OBJECTS S.A.
1995 INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN,
AS OF MAY 4, 1999
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, June 18, 1998 and May 4, 1999.
1. Purpose. The purpose of the Plan is to provide employees of the Company
and its Designated Subsidiaries with an opportunity to purchase Shares 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.
(B) "ADS" shall mean an American Depositary Share corresponding to Shares
(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) "Company" shall mean Business Objects S.A., a corporation organized
under the laws of the Republic of France.
(F) "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.
(G) "Custodian" shall mean Banque Paribas, or any successor or successors
thereto.
(H) "Depositary" shall mean the Bank of New York, or any successor or
successors thereto.
(I) "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.
(J) "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.
(K) "Enrollment Date" shall mean the first day of each Offering Period.
(L) "Exercise Date" shall mean the last day of each Offering Period.
(M) "Fair Market Value" means, as of any date, the closing sale price for
one Share or one ADS (or such other fraction of an ADS which corresponds to
one Share) (or the closing bid, if no sales were registered) as quoted on the
system or exchange with the greatest volume of trading of Shares or ADSs, as
reported in the Wall Street Journal, La Tribune, or such other source as the
Board deems reliable, on the last Trading Day prior to the first day of the
Offering Period, or on the last Trading Day of the Offering Period. When the
Fair Market Value is obtained in U.S. dollars, it shall be the Euro value of
the U.S. dollar value (which
1
<PAGE>
shall also be converted into French francs at the legal rate for the period
provided for by the laws and regulation in force) of one Share, calculated on
the basis of a noon buying rate reported on the Exercise Date by the Federal
Reserve Bank of New York (expressed in Euros per one (1) U.S. dollar).
(N) "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.
(O) "Plan" shall mean this 1995 International Employee Stock Purchase
Plan.
(P) "Purchase Price" shall mean an amount equal to 85% of the Fair Market
Value of a Share on the last Trading Day prior to the Enrollment Date or to
85% of the Fair Market Value of a Share on the Exercise Date, whichever is
lower.
(Q) "Shares" shall mean ordinary shares with a nominal value of French
francs 1 each, of the Company.
(E) "Reserves" shall mean the maximum number of Shares Stock which have
been authorized for issuance under the Plan pursuant to Section 12 hereof.
(F) "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.
(G) "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.
(H) "Trust" shall mean the trust created by the Business Objects S.A.
Employee Benefits Trust Agreement, attached hereto as Exhibit C.
(I) "Trustee" shall mean the trustee or trustees of the Trust.
3. Eligibility.
(A) Any Employee (as defined in Section 2(J), 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.
2
<PAGE>
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.
(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%. 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
3
<PAGE>
Employee be permitted to purchase during each Offering Period more than 500
Shares, 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 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 (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 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(J) 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.
4
<PAGE>
11. Interest. No interest shall accrue on the payroll deductions of a
participant in the Plan.
12. Stock.
(A) The maximum number of Shares authorized for issuance under the Plan
shall be [ ] 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. 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.
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
5
<PAGE>
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 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
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
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.
(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 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); provided,
however, that if such consideration received in the sale of assets or merger
was not solely common stock of the
6
<PAGE>
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.
21. Conditions Upon Issuance. Neither Shares nor ADSs or ADRs shall be
issued 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 Shares or 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.
7
<PAGE>
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]
<TABLE>
<S> <C>
___ Original Application Enrollment Date: ______________
___ Change in Payroll Deduction Rate
___ Change of Beneficiary(ies)
</TABLE>
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 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.
9
<PAGE>
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 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 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."
11
<PAGE>
(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:
13
<PAGE>
BUSINESS OBJECTS S.A.
1999 ANNUAL MEETING OF SHAREHOLDERS - MAY 4, 1999
INSTRUCTIONS TO THE BANK OF NEW YORK, AS DEPOSITARY
(MUST BE RECEIVED PRIOR TO THE CLOSE OF BUSINESS ON APRIL 28, 1999)
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 28, 1999 at the Annual Meeting
of Shareholders of Business Objects S.A. to be held in France, on May 4, 1999
(first call) and if needed for second call on May 14, 1999 and any
adjournments thereafter, 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 (i) a Voting Instruction Card which is signed but
on which no voting instructions are indicated, (ii) a Voting Instruction
Card is improperly completed, or (iii) no Voting Instruction Card is
received by the Depositary from a Holder of American Depositary Receipts
on or before April 28, 1999, the Depositary will deem such Holder to have
instructed the Depositary to give a proxy to the President of the Annual
Meeting to vote 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.
(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 Meeting of Shareholders:
<TABLE>
<CAPTION>
FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN FOR AGAINST ABSTAIN
<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 5 [ ] [ ] [ ] Resolution 12 [ ] [ ] [ ]
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: , 1999
-----------------------------
-----------------------------------------
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.
