Exhibit 10.46











	Exhibit 10.46 







May 1, 2006 









Mr. Leslie J.  Rechan

3720 Raboli Street 

Pleasanton, California 

94566 


Dear Les: 



Further to our recent conversations, I
am pleased to offer you employment with Cognos Incorporated as a senior officer and its
Chief Operating Officer, reporting directly to me. Your employment with us will commence
as soon as possible on a date mutually agreed upon by us, but in any event no later than
May 15, 2006 and is irrevocable by us until then on the condition that we have executed a
mutually acceptable Employment Agreement. Our offer of employment comprises the following
terms and conditions. 



Base Salary & Incentive  



Your annual base salary will be
$375,000 (all dollar amounts are in U.S. dollars unless otherwise stated). You will also
participate in the Company’s incentive plan and, at your level, will be eligible for
an annual incentive opportunity for FY07 of $375,000. The actual percentage payout of the
incentive will be based on corporate and individual performance, determined under Cognos
Share in Success (SIS) Program (or any successor program), and will be payable following
the release of audited financial statements for the FY07 fiscal year. Should you commence
employment after May 15th, 2006, your incentive payout will be pro-rated but in any event
will not be less than 75% of your pro-rated eligible incentive for FY07. Although your
compensation is denominated in US dollars, for payroll purposes your compensation will be
converted to Canadian dollars. 



Signing Bonus  



Upon joining Cognos you will be paid a
one-time signing bonus of $250,000. Should you voluntarily leave Cognos or be terminated
for “Just Cause” (as defined in your Employment Agreement) prior to the second
anniversary of your joining date, you will be required to repay the signing bonus on a
pro-rated basis. 



Stock Options  



You will be awarded options for
250,000 shares of Cognos stock. These options will be granted outside of the Cognos
Incorporated 2003-2008 Stock Option Plan (“SOP”), but will be subject
to the same terms and conditions as options granted under the SOP. These options are
subject to approval by our Board of Directors. Consistent with our stock option grant
process, the grant date of these stock options will be the third (3rd) trading day
following the next release of the our audited financial results following your start date
(“Equity Plan Award Date”). The strike price of your options will be the
closing market price the day preceding the grant date. You must be a Cognos employee on
the grant date to be eligible to receive these stock options. Those options will vest
equally on the first 4 anniversaries of grant and expire on the 6th
anniversary. 




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Mr. Leslie Rechan 

May 1, 2006



Restricted Stock Units  



You will be awarded 70,000 Restricted
Share Units (“RSUs”). The RSUs will be granted in accordance with
Cognos’ current practices and timing for such grants (i.e. during open trading
windows, etc.). These RSUs are granted under the terms of the Cognos Incorporated
2002-2015 Restricted Stock Unit Plan and are subject to approval by our Board of
Directors. Each RSU, upon vesting, is exchangeable for 1 Share of Cognos Incorporated
common stock. 



The terms of these RSU’s will be
as follows: 



(a) 45,000
will vest on the Equity Plan Award Date following the end of the fiscal           quarter
during which our reported revenue exceeds [Intentionally Omitted]          on a
trailing twelve month basis (“RSU Triggering Threshold”),           on
the condition that if Cognos does not achieve the RSU Triggering Threshold on
          or before the fifth (5th) anniversary of the grant date, these RSUs will
expire,           and 




(b) 25,000
will vest on the fourth (4th) anniversary of the grant date unless the RSU Triggering
Threshold is attained, in which case they will vest at the           same time as
those RSU’s in (a). 




If your employment with Cognos is
terminated without ‘Just Cause’ or for ‘Good Reason’ as contemplated
in your Employment Agreement then your RSU’s will continue to vest for the duration
of your severance period and if the RSU Triggering Threshold is reached, or the
RSU’s otherwise vest, before the end of that period you will be awarded the shares
underlying the RSU’s. If the RSU’s have not vested on or before the end of that
severance period then at that time: 



	  	(i)  	  	In
the case of RSU’s contemplated in paragraph (a) above, a pro-rata number
               of RSU’s will vest in an amount determined by dividing your actual
service                by 5 years (to the nearest month and including the severance
period) and                multiplying the result (x) by 45,000, to produce an adjusted
RSU Award                (“Adjusted RSU Award”) and, as a separate
calculation, (y) [Intentionally Omitted], to produce an adjusted performance
threshold                (“Adjusted RSU Triggering Threshold”). If the
Adjusted RSU                Triggering Threshold has been attained (using the same
terms as in (a)                above), then RSU’s in the amount of the Adjusted
RSU Award shall                vest as at the end of your severance period.  






	  	(ii)  	  	In
the case of RSU’s contemplated in paragraph (b) above, a pro-rata number
               will vest at the end of the severance period in an amount determined by
dividing                your service by 4 years (to the nearest month and including the
severance                period) and multiplying the result by 25,000.  






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Mr. Leslie Rechan 

May 1, 2006






If Cognos acquires an entity having
trailing twelve (12) months revenue greater than $50M as of the closing date of the
acquisition (“Trailing Revenue”), the RSU Triggering Threshold
will be increased by the acquired entity’s Trailing Revenue in excess of US$50M. 



Income Tax Protection  



As well, to ensure you do not incur
additional tax resulting from working in Canada, we will adopt a “tax
protection” approach for the first two years of your employment. Tax protection
ensures that any Canadian or US tax assessments that are in excess of the amount you would
have paid, had you remained in the United States, are borne by Cognos up to a maximum
annual amount. In your case that amount will not exceed CDN$105,000 (on a fully grossed up
basis) in each of the first two years of your employment with Cognos.   




The tax protection amount will be
determined by comparing your hypothetical U.S. tax and your actual U.S. and Canadian tax
for the relevant taxation year. The hypothetical U.S. tax is an estimate of the U.S.
federal and state income tax that is comparable to what you would pay if you remained in
California and will be based on your current salary, marital status, number of dependents
and appropriate deductions. The tax protection amount payable to you will be the amount,
if any, by which your actual U.S. and Canadian tax burden is higher than
your hypothetical tax. That amount will be grossed up to account for tax payable
on the amount itself.  



Relocation to Ottawa  



Your employment is conditional upon
your permanent relocation to Ottawa within a reasonable period, preferably within six (6)
months. In recognition of the costs associated with relocating, Cognos will provide you
with relocation assistance by reimbursing you for certain expenses, including but not
limited to the following: 



	•  	  	House-hunting
trip expenses, as required; 






	•  	  	Transportation
of your family to Ottawa and associated travel & living expenses; 






	•  	  	Temporary
accommodation for a reasonable period of time, if required; 






	• 	  	Real
estate commissions, reasonable legal fees, mortgage prepayment penalty charges for your
current principle residence and vacation property;  






	• 	  	Duplicate
carrying costs on principle residence for a reasonable period of time should you purchase
a home in Ottawa prior to selling your home in the US (i.e. duplicate mortgage costs,
home insurance, property taxes, utilities, etc.);  






	•  	  	Closing
costs associated with the purchase of a new principle residence (only) in Ottawa; 






	•  	  	Packing,
shipping, storing and unpacking of household goods, including up to 2 vehicles; 






	• 	  	Services
of Dada Destination Services to assist family with transition to new city/country; 







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Mr. Leslie Rechan 

May 1, 2006





	•  	  	Assistance
obtaining any necessary immigration approvals. 






All of the above expenses must be
approved by Cognos and supported by receipts. Cognos will consider other reasonable
relocation-related expenses provided they are approved in advance and supported by
receipts. To the extent that any of the relocation costs payable to you by Cognos are
taxable, we will pay or reimburse you on a grossed-up basis to account for those taxes. 



Should you voluntarily leave Cognos
within twenty-four (24) months of your permanent relocation, you will be required to repay
these relocation expenses on a pro-rated basis. A member of our Corporate Human Resources
team, will contact you to coordinate your move to Ottawa. 



Health Benefits  



You will be covered by all Cognos
Incorporated health benefits from your date of joining Cognos. Your family will be
entitled to such benefits when they take up residence in Canada but in the interim we will
enroll them in the health benefit program of our U.S. subsidiary, Cognos Corporation. 



Tax Advice – Pre-Employment  



To assist you in understanding the
Canadian and US tax implications of this offer, we will reimburse, or pay on your behalf,
fees incurred to retain the services of a senior tax professional, to a maximum of CDN
$15,000. It is my understanding that Ms. Martha Skeggs, Firm Director, at Deloitte &
Touche LLP has already contacted you in this regard. 



Other  



Cognos will provide you with a leased
car of your choice (to a maximum annual lease rate of CDN $26,000), including maintenance
expenses and insurance. As well, you will receive an annual membership at the Ottawa Hunt
& Golf Club. You will receive 20 days annual vacation accrual. The foregoing is
addressed in the attached Employment Agreement. 



You and your dependents will be
enrolled in the Cognos Incorporated employee benefits program. The Ontario Health
Insurance Plan (OHIP) is only effective three (3) months after your arrival in Canada. To
cover the initial three (3) months, Cognos will provide you with temporary provincial
medical coverage. Please complete the enclosed form “Ottawa High Tech OHIP
Replacement Enrollment Application” and return it with this offer letter. 



As a senior officer of Cognos, you
will be subject to the Cognos Insider Trading Policy and its Executive Stock
Ownership Guidelines. Copies of these documents are attached. You will also be
eligible for executive tax assistance. A copy of that Policy is attached. 




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Mr. Leslie Rechan 

May 1, 2006





A form of your Employment Agreement
with Cognos is enclosed and I look forward to reaching agreement on its terms as soon as
possible. The provisions of this Offer Letter will be incorporated into your Employment
Agreement. 



Les, the entire management team and I
are looking forward to having you join the Cognos team. 



Sincerely, 



COGNOS INCORPORATED 



By:   /s/  Rob Ashe       

        Rob Ashe 

        President & CEO 





I ACCEPT THE OFFER OF EMPLOYMENT SET
OUT IN THE FOREGOING LETTER.  


By:   /s/  Leslie Rechan       

        Leslie Rechan  




Date:   May 9, 2006         





	Enclosures:  	  	Employment Agreement 

RSU Plan

Stock Option Plan

Insider Trading Policy

Executive Stock Ownership Guidelines

Executive Tax Assistance Policy

Canadian Cognos Benefits Summary

OHIP Replacement Enrollment Application






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