EXECUTIVE AGREEMENT
THIS EXECUTIVE AGREEMENT (this “Agreement”) is made effective as of the 2nd day of April
2007, by and between webMethods, Inc., a Delaware corporation (the “Company”), and Xxxxxxx X.
Xxxxx (the “Executive”).
WHEREAS, the Executive is presently employed by the Company;
WHEREAS, the Board of Directors of the Company (the “Board”) recognizes that the Executive’s
contribution to the growth and success of the Company has been and continues to be substantial;
WHEREAS, the Board desires to provide for certain arrangements in the event that the
Executive’s employment with the Company is terminated under certain circumstances; and
WHEREAS, the Company and the Executive desire to enter into this Agreement on the terms and
conditions set forth below.
NOW, THEREFORE, in consideration of the promises and the respective covenants and agreements
of the parties herein contained, and of the continued employment of the Executive by the Company,
the parties hereto, intending to be legally bound, do hereby agree as follows:
1. Definitions. For purposes of this Agreement:
(a) “Cause” shall mean the Executive’s (i) theft, fraud, material dishonesty or gross
negligence in the conduct of the Company’s business, (ii) continuing neglect of
the Executive’s duties and responsibilities that has a material adverse effect on the Company
(which neglect is not cured within fifteen (15) days after receipt of written notice by the
Executive specifying the particulars of such neglect), or (iii) conviction of a felony (not
involving an automobile). For purposes of this Agreement, any purported termination of the
Executive’s employment shall be presumed to be other than for Cause, unless the Notice of
Termination includes a copy of a resolution duly adopted by the Board which finds Cause to
exist and specifies the particulars thereof in detail.
(b) “Good Reason” shall mean (i) a decrease in the Executive’s base salary, (ii) a
material reduction or material adverse change in the Executive’s authorities, duties or
job responsibilities (which material reduction or material adverse change is not cured within
fifteen (15) days after written notice by the Executive specifying the particulars of such
reduction or change in such authorities, duties or job responsibilities, the notice of which
is given to the Company within fifteen (15) days of such reduction or change), or (iii) a
geographic relocation of the Executive without the Executive’s consent more than thirty (30)
miles from the current location of the Executive’s office as of the date hereof.
(c) A “Change in Control” shall be deemed to have occurred if (A) any person (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), is or becomes the “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the Company’s then outstanding securities,
(B) during any period of two (2) consecutive years during the term of this Agreement, individuals
who at the beginning of such period constitute the Board cease for any reason to constitute at
least a majority thereof, unless the election of each director who was not a director at the
beginning of such period has been approved in advance by directors representing at least two-thirds
of the directors then in office who were directors at the beginning of the period, (C) the
shareholders of the Company approve a merger or consolidation involving the Company that would
result in a change of ownership of a majority of the outstanding shares of capital stock of the
Company, or (D) the shareholders of the Company approve a plan of liquidation or dissolution of the
Company or the sale or disposition by the Company of all or substantially all the Company’s assets.
(d) The “Date of Termination” with respect to any purported termination of the
Executive’s employment means the date specified as such in the Notice of Termination. In the
case of termination of the Executive’s employment (i) by the Company for Cause or (ii) by the
Executive for any reason, the Date of Termination shall be a date not less than seven (7)
days from the date the Notice of Termination is given. In the case of termination of the
Executive’s employment by the Company without Cause, the Date of Termination shall be a date
not less than thirty (30) days from the date the Notice of Termination is given.
(e) “Notice of Termination” means a written notice of termination of employment by the
terminating party, which notice shall specify a Date of Termination and the particular facts
and circumstances of such termination, including the existence of Cause or Good Reason.
2. Termination of Employment.
(a) The Executive’s employment may be terminated at any time by the Company, with or
without Cause, by delivery of a Notice of Termination to the Executive. The Executive’s
employment may be terminated at any time by the Executive without Good Reason by delivery of
a Notice of Termination to the Company. The Executive’s employment may be terminated by the
Executive for Good Reason by delivery of a Notice of Termination to the Company within thirty
(30) days of the later occurrence of the event constituting Good Reason or the termination of
the Company’s cure period, if any, with respect to the event constituting Good Reason.
(b) In the event the Company terminates the Executive’s employment without Cause, or in
the event the Executive terminates the Executive’s employment for Good Reason, then the
Company shall pay the Executive’s base salary through the date of such termination and shall
continue to pay to the Executive the Executive’s base salary, plus all benefits provided
to the Executive immediately prior to the date of the Notice of Termination until the
first anniversary
of the Date of Termination; provided, however, that the Company’s
obligations under this Section 2(b) shall cease upon the Executive’s commencement of
full-time employment
with another employer; and provided, further that should the
Company be unable to provide for any such benefits under the terms of the benefit plans, or
by law, the Company shall pay the Executive an amount equal to the premiums the Company would
have paid for such
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benefits under such plans. The Company’s obligations under this Section 2(b), if any, shall be
contingent upon the Executive executing a general release of all claims in favor of the Company,
and its officers, directors and affiliates, in a form provided by the Company.
(c) If there is a Change in Control of the Company or there has been a
public announcement
of a Change in Control of the Company (provided, however, that
consummation of the Change in Control of the Company shall be a condition precedent to the
effectiveness of this provision) and at any time within one (1) year after the consummation
of a Change in Control (i) the Company terminates the Executive’s employment without Cause,
or (ii) the Executive terminates the Executive’s employment for Good Reason, then the Company
shall (x) pay the Executive’s base salary through the Date of Termination, (y) pay to the
Executive, in a lump sum in cash within ten (10) business days after the Date of Termination,
an amount equal to one (1) times the sum of (A) the Executive’s base salary in effect
immediately prior to the occurrence of the circumstance giving rise to the Notice of
Termination given in respect thereof and (B) the maximum bonus or incentive compensation
amount for which the Executive is eligible to be awarded pursuant to any bonus or incentive
compensation plan, calculated based upon the bonus period in which the Date of Termination
and annualized to the extent that such bonus period does not reflect a twelve (12) month
period and (C) for a twelve (12) month period after the Date of Termination, the Company
shall administer and pay for the Executive’s life, disability, accident and health insurance
benefits substantially similar to those which Executive is receiving immediately prior to the
Notice of Termination; provided, however, that should the Company be unable to
provide for any such benefits under the terms of the benefit plans, or by law, the Company
shall pay the Executive an amount equal to the premiums the Company would have paid for such
benefits under such plans. The Company’s obligations under this Section 2(c), if any, shall
be contingent upon the Executive executing a general release of all claims in favor of the
Company, and its officers, directors and affiliates, in a form provided by the Company.
(d) In the event of the death of the Executive, this Agreement shall terminate, and
shall be of no further force or effect; provided, however, that notwithstanding the
foregoing, the death of the Executive shall not in any way affect any payment obligations of
the Company pursuant to Section 2(b) or Section 2(c) hereof which exist at the time of such
death.
3. Successors; Binding Agreement. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns. In furtherance of the foregoing,
this Agreement and all rights of the Executive hereunder shall inure to the benefit of and
be enforceable by the Executive’s personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the Executive
should die while any amounts would still be payable to the Executive hereunder if the
Executive had continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or
other designee or, if there be no such designee, to the Executive’s estate.
4. Notice. For the purposes of this Agreement, notices, demands and all
other communications provided for in this Agreement shall be in writing and shall be deemed
to have been duly given when delivered by hand delivery or via reputable overnight delivery
service, or (unless otherwise specified) mailed by United States registered mail, return
receipt requested,
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postage prepaid, addressed, if to the Executive, to the Executive’s home address as it appears on
the records of the Company, and if to the Company, to the Company’s executive headquarters, or to
such other address as either party may have furnished to the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.
5. Prior Agreement. All prior agreements between the Company and the Executive
with respect to the subject matter hereof (except for stock option agreements) are hereby
superseded and terminated effective as of the date hereof and shall be without further force
or effect. This Agreement is intended to be, and shall be, a complete integration of all
prior agreements and discussions between the Company and the Executive with respect to the
subject matter hereof (except as set forth in stock option agreements between the Company and
the Executive).
6. Employment of Executive. Nothing in this Agreement shall be construed
as constituting a commitment, guarantee, agreement or understanding of any kind or nature
that the Company shall continue to employ the Executive, nor shall this Agreement affect in
any way the right of the Company to terminate the employment of the Executive at any time and
for any reason. By the Executive’s execution of this Agreement, the Executive acknowledges
and agrees that the Executive’s employment is “at will.” No change of the Executive’s duties
as an employee of the Company shall result in, or be deemed to be, a modification of any of
the terms of this Agreement.
7. No Mitigation. The Company agrees that, if the Executive’s employment
is terminated during the term of this Agreement, the Executive is not required to seek
other employment or to attempt in any way to reduce any amounts payable to the Executive by
the Company. Further, the amount of any payment provided hereunder shall not be reduced by
any compensation earned by the Executive.
8. Miscellaneous. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in writing signed by
the Executive and a duly authorized officer of the Company. No waiver by either party hereto
at any time of any breach by the other hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or implied, with respect
to the subject matter hereof have been made by either party which are not set forth expressly
in this Agreement. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the Commonwealth of Virginia, without regard to
provisions thereof relating to choice of law or conflicts of law. This Agreement may be
executed in two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. This Agreement may be executed
by facsimile signatures.
9. Validity. The invalidity or unenforceability of any provision or provisions
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
[Signatures appear on following page.]
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IN WITNESS WHEREOF, the parties have executed this Executive Agreement on the date and year
first above written.
| WEBMETHODS, INC., a Delaware corporation | ||||||
| By: | /s/ Xxxxx Xxxxxxxx
|
|||||
| Name: | Xxxxx Xxxxxxxx | |||||
| Title: | CEO | |||||
| EXECUTIVE: | ||||||
| /s/ Xxxxxxx X. Xxxxx | ||||||
| Xxxxxxx X. Xxxxx | ||||||
