|
Exhibit
10.12
PRIVILEGED AND
CONFIDENTIAL
EMPLOYMENT
AGREEMENT
AGREEMENT, dated as of the
14th of November, 2005 (this “Agreement”), by and
between BEA Systems, Inc., a Delaware corporation (the
“Company”), and Richard T. Geraffo Jr. (the
“Executive”).
WHEREAS, the Board of
Directors of the Company (the “Board”), has determined
that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued
dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change in Control (as defined herein).
The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change
in Control and to encourage the Executive’s full attention
and dedication to the current Company and in the event of any
threatened or pending Change in Control, and to provide the
Executive with compensation and benefits arrangements upon a Change
in Control that ensure that the compensation and benefits
expectations of the Executive will be satisfied and that are
competitive with those of other corporations. Therefore, in order
to accomplish these objectives, the Board has caused the Company to
enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY
AGREED AS FOLLOWS:
Section 1.
Certain Definitions . (a) “Effective
Date” means the first date during the Change in Control
Period (as defined herein) on which a Change in Control occurs.
Notwithstanding anything in this Agreement to the contrary, if a
Change in Control occurs and if the Executive’s employment
with the Company is terminated prior to the date on which the
Change in Control occurs, and if it is reasonably demonstrated by
the Executive that such termination of employment (1) was at
the request of a third party that has taken steps reasonably
calculated to effect a Change in Control or (2) otherwise
arose in connection with or anticipation of a Change in Control,
then “Effective Date” means the date immediately prior
to the date of such termination of employment.
(b) “Change in Control
Period” means the period commencing on the date hereof and
ending on the third anniversary of the date hereof; provided
, however , that, commencing on the date one year after the
date hereof, and on each annual anniversary of such date (such date
and each annual anniversary thereof, the “Renewal
Date”), unless previously terminated, the Change in Control
Period shall be automatically extended so as to terminate three
years from such Renewal Date, unless, at least 60 days prior to the
Renewal Date, the Company shall give notice to the Executive that
the Change in Control Period shall not be so extended.
(c) “Affiliated
Company” means any company controlled by, controlling or
under common control with the Company.
(d) “Assume”
means that pursuant to a Change in Control either (i) the
Compensatory Award is expressly affirmed by the Company or
(ii) the contractual obligations represented by the
Compensatory Award are expressly assumed (and not simply by
operation of law)
by the successor entity or its parent in
connection with the Change in Control with appropriate adjustments
to the number and type of securities of the successor entity or its
parent subject to the Compensatory Award and the exercise or
purchase price thereof (if any) which preserves the compensation
element of the Compensatory Award existing at the time of the
Change in Control as determined in accordance with the instruments
evidencing the agreement to assume the Compensatory
Award.
(e) “Change in
Control” means the first to occur of any of the
following:
(1) The acquisition by any
individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (A) the then-outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or
(B) the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting
Securities”); provided , however , that, for
purposes of this Section 1(e), the following acquisitions
shall not constitute a Change in Control: (i) any acquisition
directly from the Company, (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any
Affiliated Company or (iv) any acquisition by any corporation
pursuant to a transaction that complies with Sections 1(e)(3)(A),
1(e)(3)(B) and 1(e)(3)(C).
(2) Individuals who, as of
the date hereof, constitute the Board (the “Incumbent
Board”) cease for any reason to constitute at least a
majority of the Board; provided , however , that any
individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the
Board.
(3) Consummation of a
reorganization, merger, statutory share exchange or consolidation
or similar corporate transaction involving the Company or any of
its subsidiaries, a sale or other disposition of all or
substantially all of the assets of the Company, or the acquisition
of assets or stock of another entity by the Company or any of its
subsidiaries (each, a “Business Combination”), in each
case unless, following such Business Combination, (A) all or
substantially all of the individuals and entities that were the
beneficial owners of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% of the then-outstanding shares of common stock and the
combined voting power of the then-outstanding voting securities
entitled to vote generally in the election of directors, as the
case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation that, as
a result of such transaction, owns the Company or all or
substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such Business
Combination of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities, as the case
2
may be, (B) no Person (excluding
any corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of, respectively, the
then-outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting
power of the then-outstanding voting securities of such
corporation, except to the extent that such ownership existed prior
to the Business Combination, and (C) at least a majority of
the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board
at the time of the execution of the initial agreement or of the
action of the Board providing for such Business Combination;
or
(4) Approval by the
shareholders of the Company of a complete liquidation or
dissolution of the Company.
Section 2.
Employment Period . The Company hereby agrees to
continue the Executive in its employ, subject to the terms and
conditions of this Agreement, for the period commencing on the
Effective Date and ending on the first anniversary of the Effective
Date (the “Employment Period”). The Employment Period
shall terminate upon the Executive’s termination of
employment for any reason.
Section 3. Terms
of Employment . (a) Position and Duties
. (1) During the Employment Period, (A) the
Executive’s position (including status, offices, titles and
reporting requirements), authority, duties and responsibilities
shall be at least commensurate in all material respects with the
most significant of those held, exercised and assigned at any time
during the 120-day period immediately preceding the Effective Date
and (B) the Executive’s services shall be performed at
the office where the Executive was employed immediately preceding
the Effective Date or at any other location less than 35 miles from
such office.
(2) During the Employment
Period, and excluding any periods of vacation and sick leave to
which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder,
to use the Executive’s reasonable best efforts to perform
faithfully and efficiently such responsibilities. During the
Employment Period, it shall not be a violation of this Agreement
for the Executive to (A) serve on corporate, civic or
charitable boards or committees, (B) deliver lectures, fulfill
speaking engagements or teach at educational institutions and
(C) manage personal investments, so long as such activities do
not significantly interfere with the performance of the
Executive’s responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly understood and
agreed that, to the extent that any such activities have been
conducted by the Executive prior to the Effective Date, the
continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective
Date shall not thereafter be deemed to interfere with the
performance of the Executive’s responsibilities to the
Company.
(b) Compensation
. (1) Base Salary . During the Employment
Period, the Executive shall receive an annual base salary (the
“Annual Base Salary”) at an annual rate at least equal
to 12 times the highest monthly base salary paid or payable,
including any base salary
3
that has been earned but deferred, to
the Executive by the Company and the Affiliated Companies in
respect of the 12-month period immediately preceding the month in
which the Effective Date occurs. The Annual Base Salary shall be
paid at such intervals as the Company pays executive salaries
generally. During the Employment Period, the Annual Base Salary
shall be reviewed at least annually, beginning no more than 12
months after the last salary increase awarded to the Executive
prior to the Effective Date. Any increase in the Annual Base Salary
during the Employment Period shall not serve to limit or reduce any
other obligation to the Executive under this Agreement. The Annual
Base Salary shall not be reduced after any such increase and the
term “Annual Base Salary” shall refer to the Annual
Base Salary as so increased.
(2) Annual Bonus
. In addition to the Annual Base Salary, the Executive shall be
awarded, for each fiscal year ending during the Employment Period,
an annual bonus (the “Annual Bonus”) in cash at least
equal to the Executive’s highest bonus earned under the
Company’s Executive Bonus Plan, or any comparable bonus under
any predecessor or successor plan, for the last three full fiscal
years prior to the Effective Date (or for such lesser number of
full fiscal years prior to the Effective Date for which the
Executive was eligible to earn such a bonus, and annualized in the
case of any bonus earned for a partial fiscal year) (the
“Recent Annual Bonus”). (If the Executive has not been
eligible to earn such a bonus for any period prior to the Effective
Date, the “Recent Annual Bonus” shall mean the
Executive’s target annual bonus for the year in which the
Effective Date occurs.) Each such Annual Bonus shall be paid no
later than the end of the third month of the fiscal year next
following the fiscal year for which the Annual Bonus is awarded,
unless the Executive shall elect to defer the receipt of such
Annual Bonus.
(3) Incentive, Savings
and Retirement Plans . During the Employment Period, the
Executive shall be entitled to participate in all cash incentive,
equity incentive, savings and retirement plans, practices,
policies, and programs applicable generally to other peer
executives of the Company and the Affiliated Companies, but in no
event shall such plans, practices, policies and programs provide
the Executive with incentive opportunities (measured with respect
to both regular and special incentive opportunities, to the extent,
if any, that such distinction is applicable), savings opportunities
and retirement benefit opportunities, in each case, less favorable,
in the aggregate, than the most favorable of those provided by the
Company and the Affiliated Companies for the Executive under such
plans, practices, policies and programs as in effect at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, those provided generally at
any time after the Effective Date to other peer executives of the
Company and the Affiliated Companies. In the event that, in
connection with a Change of Control, the party effectuating the
Change of Control does not agree to Assume any stock option,
restricted stock award, restricted stock unit award or other
equity-based award or performance award held by the Executive or
any transferee of the Executive (each, a “Compensatory
Award”) that is unvested and outstanding as of immediately
prior to the Change of Control, such Compensatory Award shall as of
immediately prior to the Change of Control vest in full and be
immediately exercisable, provided , that if the
Executive’s employment with the Company is terminated prior
to the date on which the Change in Control occurs, and if it is
reasonably demonstrated by the Executive that such termination of
employment (1) was at the request of a third party that has
taken steps reasonably calculated to effect a Change in Control or
(2) otherwise arose in connection with or anticipation of a
Change in Control, then each Compensatory Award that is unvested
and outstanding as of immediately prior to the Date of Termination
shall not be forfeited, shall remain outstanding following the Date
of Termination, and
4
shall not vest unless and until a Change
of Control occurs within one year following the Date of
Termination, in which case, immediately prior to a Change of
Control, such Compensatory Awards shall vest in full and become
immediately exercisable. In the event that a Change in Control does
not occur within one year following the Date of Termination as
described in the proviso of the preceding sentence, each unvested
Compensatory Award shall be immediately forfeited by the
Executive.
(4) Welfare Benefit
Plans . During the Employment Period, the Executive and/or
the Executive’s family, as the case may be, shall be eligible
for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company and the Affiliated Companies (including, without
limitation, medical, prescription, dental, disability, employee
life, group life, accidental death and travel accident insurance
plans and programs) to the extent applicable generally to other
peer executives of the Company and the Affiliated Companies, but in
no event shall such plans, practices, policies and programs provide
the Executive with benefits that are less favorable, in the
aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, those provided generally at
any time after the Effective Date to other peer executives of the
Company and the Affiliated Companies.
(5) Expenses .
During the Employment Period, the Executive shall be entitled to
receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the most favorable policies,
practices and procedures of the Company and the Affiliated
Companies in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
the Affiliated Companies.
(6) Fringe Benefits
. During the Employment Period, the Executive shall be entitled
to fringe benefits, including, without limitation, tax and
financial planning services, payment of club dues, and, if
applicable, use of an automobile and payment of related expenses,
in accordance with the most favorable plans, practices, programs
and policies of the Company and the Affiliated Companies in effect
for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated
Companies.
(7) Office and Support
Staff . During the Employment Period, the Executive shall
be entitled to an office or offices of a size and with furnishings
and other appointments, and to exclusive personal secretarial and
other assistance, at least equal to the most favorable of the
foregoing provided to the Executive by the Company and the
Affiliated Companies at any time during the 120-day period
immediately preceding the Effective Date or, if more favorable to
the Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated
Companies.
5
(8) Vacation .
During the Employment Period, the Executive shall be entitled to
paid vacation in accordance with the most favorable plans,
policies, programs and practices of the Company and the Affiliated
Companies as in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
the Affiliated Companies.
Section 4.
Termination of Employment . (a) Death or
Disability . The Executive’s employment shall
terminate automatically if the Executive dies during the Employment
Period. If the Company determines in good faith that the Disability
(as defined herein) of the Executive has occurred during the
Employment Period (pursuant to the definition of
“Disability”), it may give to the Executive written
notice in accordance with Section 11(b) of its intention to
terminate the Executive’s employment. In such event, the
Executive’s employment with the Company shall terminate
effective on the 30th day after receipt of such notice by the
Executive (the “Disability Effective Date”),
provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the
Executive’s duties. “Disability” means the
absence of the Executive from the Executive’s duties with the
Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness that is
determined to be total and permanent by a physician selected by the
Company or its insurers and acceptable to the Executive or the
Executive’s legal representative.
(b) Cause . The
Company may terminate the Executive’s employment during the
Employment Period for Cause. “Cause” means:
(1) the willful and continued
failure of the Executive to perform substantially the
Executive’s duties (as contemplated by
Section 3(a)(1)(A)) with the Company or any Affiliated Company
(other than any such failure resulting from incapacity due to
physical or mental illness or following the Executive’s
delivery of a Notice of Termination for Good Reason), after a
written demand for substantial performance is delivered to the
Executive by the Board or the Chief Executive Officer of the
Company that specifically identifies the manner in which the Board
or the Chief Executive Officer of the Company believes that the
Executive has not substantially performed the Executive’s
duties, or
(2) the willful engaging by
the Executive in illegal conduct or gross misconduct that is
materially and demonstrably injurious to the Company.
For purposes of this Section 4(b),
no act, or failure to act, on the part of the Executive shall be
considered “willful” unless it is done, or omitted to
be done, by the Executive in bad faith or without reasonable belief
that the Executive’s action or omission was in the best
interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board
or upon the instructions of the Chief Executive Officer of the
Company or a senior officer of the Company or based upon the advice
of counsel for the Company shall be conclusively presumed to be
done, or omitted to be done, by the Executive in good faith and in
the best interests of the Company. The cessation of employment of
the Exe
|
