Exhibit 10.1
BEA SYSTEMS, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT, is entered into as of November 2, 2001, between
BEA Systems, Inc., a Delaware corporation (the "Company"), and Xxxxxxx X.
Xxxxxxx III ("Employee").
RECITALS
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A. Employee entered into an Employment Agreement with the Company dated
September 1, 1999 (the "1999 Agreement"). The parties intend that this Agreement
shall supersede the 1999 Agreement in its entirety.
B. Company desires to obtain the continued services of Employee, on its own
behalf and on behalf of all existing and future Affiliated Companies (defined to
mean any corporation or other business entity or entities that directly or
indirectly controls, is controlled by, or is under common control with the
Company), and Employee desires to secure continued employment from the Company
upon the following terms and conditions.
AGREEMENT
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ACCORDINGLY, THE PARTIES AGREE AS FOLLOWS:
1. Position, Period of Employment.
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(a) Period of Employment. The Company hereby employs Employee to render
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services to the Company in the position and with the duties and responsibilities
described in Section 1(b) for the period (the "Period of Employment") commencing
on the date of this Agreement and ending on the earlier of (i) October 1, 2005;
or (ii) the date Employee's employment or consultancy with the Company is
terminated in accordance with Section 3 below.
(b) Position. Employee shall currently serve as the Company's Chief
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Strategy Officer ("CSO") (or in such other position(s) as the Board of Directors
of the Company (the "Board") shall designate from time to time). Employee shall
devote his full time and attention and his best efforts to the performance of
the services customarily incident to such office and to the performance of such
other services as may be reasonably requested by the CEO of the Company (the
"CEO"). The Company shall retain full direction and control of the means and
methods by which Employee performs the above services and of the place(s) at
which such services are to be rendered. Employee shall also continue as Chairman
of the Board of Directors, until his death, resignation or removal by the Board
of Directors.
(c) Other Activities. Except upon the prior written consent of the
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Company as approved by the Board, Employee, during the Period of Employment,
will not (i) accept any other
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employment; (ii) engage, directly or indirectly, in any other business activity
(whether or not pursued for pecuniary advantage) that is or may be competitive
with, or that might place him in a competing position with that of the Company
or any Affiliated Company, as determined in the sole discretion of the Board; or
(iii) engage in any work or business activity of any kind outside those of the
Company but not including Employee's charitable or philanthropic activities
Notwithstanding the foregoing, Employee may provide advisory services to Warburg
Pincus and its affiliated entities and portfolio companies during the Period of
Employment; provided, that such services are not competitive with, and do not
place Employee in a competing position with that of, the Company or any
Affiliated Company, as determined in the sole discretion of the Board, and that
Employee has provided written notice to, and received the written approval of,
the Board to provide such services. For purposes of this Agreement, "Affiliated
Company" shall mean any person that directly or indirectly, through one or more
intermediaries, controls, is controlled by or is under common control with the
Company.
2. Compensation, Benefits, Expenses.
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(a) Compensation. In consideration of the services to be rendered
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hereunder, including, without limitation, services to any Affiliated Company,
Employee shall be paid an annual salary of Five Hundred Thousand Dollars
($500,000.00), payable at the times and pursuant to the procedures regularly
established, and as they may be amended, by the Company during the Period of
Employment. This rate shall be reviewed in accordance with the Company's salary
review practices, and adjusted in the sole discretion of the Board to reflect
increases in the cost of living and such other increases as are awarded in
accordance with the Company's regular salary review practices for giving salary
increases to similarly situated employees.
(b) Stock Options. Employee is eligible to receive options under the
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Company's 1997 Stock Incentive Plan (the "Option Plan") and such other option
plans as the Company may from time to time adopt, as approved by the Board or a
Committee (as defined in the Option Plan) thereof. As part of this Agreement,
Employee shall be granted an option to purchase 1,000,000 shares of the
Company's common stock pursuant to the Option Plan, twenty-five percent (25%) of
the Shares subject to the Option Plan shall vest twelve months after the date of
an Award (as defined in the Option Plan) (the "Vesting Commencement Date"), and
1/48th of the Shares subject to the Option Plan shall vest on each monthly
anniversary of the Vesting Commencement Date thereafter. All such options are
transferable to the extent provided in the agreement evidencing such stock
option.
(c) Bonus. During the Period of Employment, Employee shall be eligible
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to participate in such bonus plans as the Company may from time to time adopt
for the benefit of similarly situated employees of the Company. Employee's right
to receive any such bonus shall be subject to the terms of any Company bonus
plan for which he may become a participant and the terms determined by the Board
or a Committee thereof designating him as a participant or granting him an Award
thereunder. Employee's current annual target bonus is 100% of salary.
(d) Vacation. During the Period of Employment, Employee shall be
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entitled to vacation in accordance with the Company's vacation policies for
similarly situated employees, as such policies may be amended from time to time.
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(e) Benefits. During the Period of Employment, as he becomes eligible
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therefor, the Company shall provide Employee with the right to participate in
and to receive benefits from all present and future life, accident, disability,
medical, pension, and savings plans and all similar benefits made available
generally to similarly situated employees of the Company. The amount and extent
of benefits to which Employee is entitled shall be governed by the specific
benefit plan, as it may be amended from time to time.
(f) Expenses. The Company shall reimburse Employee for reasonable travel
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and other business expenses incurred by Employee in the performance of his
duties hereunder in accordance with the Company's general policies, as they may
be amended from time to time during the course of this Agreement.
3. Termination of Employment.
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(a) By Death. The Period of Employment shall terminate automatically
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upon the death of the Employee; provided however that the Company shall pay to
the Employee's beneficiaries or estate, as appropriate, the compensation to
which he is entitled pursuant to Sections 2(a) and 2(c) and the benefits to
which he is entitled pursuant to Section 2(e) shall continue through the end of
the Period of Employment, on the same time schedule as if Employee were living.
The level of bonus compensation payable pursuant to said Section 2(c) during
each year following death of the Employee shall be 80% of the target bonus for
Employee for the year of termination as determined by the Board. Thereafter, the
Company's obligations hereunder shall terminate. Nothing in this Section shall
affect any entitlement of the Employee's heirs to the benefits of any life
insurance plan.
(b) By Disability. If the Employee shall become "permanently disabled"
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as determined for purposes of the disability insurance policy provided by the
Company for Employee, then, to the extent permitted by law, the Period of
Employment shall terminate as of the date that Employee shall be deemed to have
become "permanently disabled" for purposes of such disability insurance policy;
provided, however, that the compensation to which Employee is entitled pursuant
to Sections 2(a) and 2(c) and the benefits to which he is entitled pursuant to
Section 2(e) shall continue through the end of the Period of Employment, on the
same time schedule as if Employee were not "permanently disabled" (in each case
under 2(a), 2(b) and 2(e) net of amounts paid to Employee pursuant to said
disability insurance policy). The amount of bonus payable to Employee pursuant
to this Section 3(b) shall be calculated in the manner set forth in Section 3(a)
above. Thereafter, the Company's obligations hereunder shall terminate. Employee
shall continue to receive benefits under any disability plan in which Employee
is a participant to the extent permitted under the applicable plan.
(c) By Company For Cause. The Company may terminate, without liability,
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Employee's employment or consultancy for Cause (as defined below) at any time
upon advance written notice to Employee as specified below with reasonable
specificity of the details thereof. The Company shall pay Employee the
compensation to which he is entitled pursuant to Section 2(a) through the end of
the specified notice period and thereafter the Company's obligations hereunder
shall terminate. For the purposes of this Section 3(c), "Cause" shall mean: (i)
Employee's misconduct which could reasonably be expected to have a material
adverse effect on the business and affairs of the Company, (ii) Employee's
disregard of lawful instructions of the
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Company's Board of Directors which instructions are consistent with Employee's
position and relate to the business of the Company or Employee's neglect of
duties or failure to act, which, in each case, could reasonably be expected to
have a material adverse effect on the business and affairs of the Company; (iii)
Employee is convicted of, or pleads nolo contendere to, common law fraud, or a
felony or criminal act against the Company or any Affiliated Company thereof or
any of the assets of any of them; (iv) the Employee's abuse of alcohol or other
drugs or controlled substances, or conviction of a crime involving moral
turpitude, or (v) Employee's material breach of any of the agreements contained
herein or contemplated hereby. A termination pursuant to Section 3(c) (i), (ii),
(iv) (other than as a result of a conviction of a crime involving moral
turpitude), or (v) shall take effect 10 days after the giving of the notice
contemplated hereby unless the Employee shall, during such 10-day period, remedy
to the satisfaction of the Board of Directors of the Company the misconduct,
disregard, abuse or breach specified of such notice; provided, however, that
such termination shall take effect immediately upon giving of such notice if the
Board of Directors of the Company shall have determined that such misconduct,
disregard, abuse or breach is not remediable which determination shall be stated
in such notice. A determination pursuant to Section 3(c) (iii) or (iv) (as a
result of a conviction of a crime involving moral turpitude) shall take effect
immediately upon giving of the notice contemplated hereby.
(d) At Will by Employee. At any time and subject to Section 3(g) below,
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Employee may terminate the Period of Employment with or without cause, on
written notice to the Company. In the event Employee elects to terminate the
Period of Employment pursuant to this Section 3(d), Employee shall give the
Company not less than two (2) weeks notice of such termination. If the Employee
terminates his employment pursuant to this Section 3(d), the Company shall pay
Employee the compensation and benefits to which he is entitled pursuant to
Section 2(a) and Section 2(c) through the end of the notice period and
thereafter all obligations of the Company shall terminate.
(e) At Will by the Company. At any time, the Company may terminate the
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Period of Employment for any reason, without Cause, upon 24 hours written notice
to the Employee. In the event the Company elects to terminate the Period of
Employment pursuant to this Section 3(e), the Company shall retain Employee as a
consultant to the Company for a period commencing on the date of such
termination and continuing until the expiration of the Period of Employment (the
"Consultancy Period"), during which time Employee agrees to be available to the
Company (which may include availability via telephone) to consult with officers
and directors regarding the business of the Company, whenever so requested, such
consultancy work not to exceed 40 hours per week. Employee shall continue to
receive payment of his compensation under Sections 2(a), 2(c) and 2(f) during
the Consultancy Period and his benefits described in Section 2(e); provided that
if (i) any of the events listed in paragraph (c) of this Section 3 occur then
the Company's obligations hereunder shall be governed in accordance with the
applicable paragraph or (ii) Employee breaches Sections 3(h), 3(i) or 4 hereof,
including a violation of his Proprietary Information and Inventions Agreement
(described in Section 4 below), then all of the Company's obligations hereunder
shall cease immediately. The amount of bonus payable to Employee pursuant to
this Section 3(e) shall be calculated in the manner set forth in Section 3(a)
above through the end of the Consultancy Period. Employee hereby agrees that the
Company may dismiss him under this Section 3(e) without regard (i) to any
general or specific policies (whether written or oral) of the Company relating
to the employment or termination of its employees, or
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(ii) to any statements made to Employee, whether made orally or contained in any
document, pertaining to Employee's relationship with the Company. During the
Consultancy Period, Employee agrees not to compete with the business of the
Company during such Consultancy Period as set forth in Section 3(i) hereof.
(f) Termination by Employee for Good Reason Following Corporate
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Transaction. At any time following a Corporate Transaction (as defined below)
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and without limitation of Employee's rights under Section 3(d) above, Employee
may terminate the Period of Employment for Good Reason (as defined below) on not
less than two (2) weeks written notice to the Company. In the event of a
termination by Employee for Good Reason pursuant to this Section 3(f), the
Company shall retain Employee as a consultant to the Company for a period
commencing on the date of such termination and continuing for two (2) years
thereafter (in lieu of the Consultancy Period set forth in Section 3(e)) for the
compensation and benefits and subject to all of the terms set forth in Section
3(e) above (other than the term for such consultancy services. A termination by
Employee shall be deemed to be for "Good Reason" if: (i) there is an assignment
to the Employee of any duties materially inconsistent with or which constitute a
material change in the Employee's position, duties, responsibilities, or status
with the Company, or a material change in the Employee's position, duties,
responsibilities, or status with the Company, or a material change in the
Employee's reporting responsibilities, title, or offices; or removal of the
Employee from or failure to reflect the Employee to any of such positions,
except in connection with the termination of the Period of Employment for Cause,
or due to disability or death; (ii) there is a reduction by the Company in the
Employee's annual salary then in effect other than a reduction similar in
percentage to a reduction generally applicable to similarly situated employees
of the Company; or (iii) the Company acts in any way that would materially and
adversely affect the Employee's participation in or materially reduce the
Employee's benefit under any benefit plan of the Company in which the Employee
is participating or deprive the Employee of any material fringe benefit enjoyed
by the Employee except those changes generally affecting similarly situated
employees of the Company.
For purposes of this Agreement, a "Corporate Transaction" shall include
any of the following transactions to which the Company is a party: (i) a merger
or consolidation in which the Company is not the surviving entity and securities
representing more than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities are transferred to holder different from
those who held such securities immediately prior to such merger; (ii) the sale,
transfer or other disposition of all or substantially all of the assets of the
Company in liquidation or dissolution of the Company; or (iii) any reverse
merger in which the Company is the surviving entity but in which securities
representing more than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities are transferred to holders different from
those who held such securities immediately prior to such merger. In addition, a
Corporate Transaction shall also include a Change of Control as such is defined
in the Option Plan.
(g) Company Right to Require Consulting Services. In the event of a
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termination of the Period of Employment pursuant to Section 3 (c) or 3(d) above,
the Company shall have the option, exercisable on written notice to Employee
within twenty (20) days following such termination of the Period of Employment,
to require Employee to provide consulting services upon the same terms provided
in Section 3(e) above, including without limitation, Employee's
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duties not to compete with the Company as provided in Section 3(i), except that:
(i) the Company may thereafter terminate the Consultancy Period at any time on
thirty (30) days notice to Employee; and (ii) the compensation payable to
Employee during the Consultancy Period shall be equal to Employee's salary
payable pursuant to Section 2(a) hereof as prorated and reduced to be equal to
an hourly rate (assuming forty (40) hours work weeks and forty-eight (48) full
weeks of service during a year), and Employee shall be so paid by the Company at
such hourly rate for such consulting services based on the greater of: (i) the
actual number of hours of consulting services provided by Employee; and (ii) ten
(10) hours per calendar month; provided, that if the Company requires in excess
of twenty (20) hours per week of consulting, then the Company shall compensate
Employee and provide benefits and bonuses as if Employee is working full time
during the Consultancy Period. The Company may require up to a maximum of forty
(40) hours per week of consulting services. In the event that the Company
requires less than forty (40) hours of consulting services per week, then the
Company may not prevent Employee from accepting other employment or engaging in
any work or other activity of any kind during the Consultancy Period provided
that such employment, work or activity is not competitive with the business of
the Company (as defined in Section 3(i) hereof) [or exceed [20] hours per week]
and Employee may accept such other noncompetitive employment or engage in other
noncompetitive work or business activities during the Consultancy Period. The
Company acknowledges that once it chooses to require less than forty (40) hours
per week of consulting services from Employee that the Company may not later,
without Employee's consent, increase the consulting services required of
Employee to forty (40) hours per week or restrict Employee's ability to accept
other noncompetitive employment or engage in other noncompetitive work or
activities without Employee's consent, which may be withheld in Employee's
discretion.
(h) Other Termination Obligations.
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(1) Employee hereby acknowledges and agrees that all personal
property, including, without limitation, all books, manuals, records, reports,
notes, contracts, computer files and data (including electronic correspondence),
lists, blueprints, and other documents, or materials, or copies thereof,
proprietary information, and equipment furnished to or prepared by Employee in
the course of or incident to his employment, including, without limitation,
records and any other materials pertaining to the Company's proprietary
information, belong to the Company and shall be promptly returned to the Company
upon termination of the Period of Employment. Following termination, the
Employee will not retain any written or other tangible material (including
materials containing computer files or data) containing any Proprietary
Information or information pertaining to the Company's Proprietary Information.
(2) Upon termination of the Period of Employment, the Employee shall
be deemed to have resigned from all offices and directorships then held with the
Company or any Affiliated Company.
(3) Employee agrees that he will not, either directly or indirectly,
for a period of two (2) years following the later of the termination of the
Period of Employment or the termination of the Consultancy Period: (i) contact,
for purposes of soliciting employment, any employee of the Company; or, (ii)
contact for the purpose of inducing any termination or breach of
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any contractual relationship with the Company, any individual or entity that has
a contractual relationship with the Company.
(i) Covenant not to Compete. During the Consultancy Period, Employee
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agrees not to compete with the business of the Company, anywhere within, from or
into the countries listed in Exhibit A and from or into any additional countries
where the Company does business at the time of termination of Employee's
employment. For purposes of this Section 3(i), Employee shall be deemed to
compete if he, as an employee, employer, consultant, agent, principal, partner,
stockholder, corporate officer, director or in any other individual or
representative capacity, engages or participates, or makes preparations to
establish, any business that conducts the same or substantially the same
business as or is competitive with the business which is conducted by the
Company on the date of Employee's termination, including, without limitation,
work relating to Encina, Unikix, CICS/9000, Enterprise Java, Web Services, Web
Application Servers, Portal Software technologies and any activity engaged in by
the Company during the twelve months immediately preceding the date of
termination of the Period of Employment or any activity contemplated by the
Company on the date of such termination. Nothing contained in this Section 3(i)
shall be construed to prohibit Employee from purchasing and owning (directly or
indirectly) up to one percent (1%) of the capital stock or other securities of
any corporation or other entity whose stock or securities are traded on any
national or regional securities exchange or the national over-the-counter market
and such ownership shall not constitute a violation of this Section 3(i). In the
event of a termination of the Period of Employment pursuant to Section 3(c) or
3(d) above, the Company shall have the option, exercisable on written notice to
Employee within twenty (20) days following such termination of the Period of
Employment, to require Employee to provide consulting services upon the same
terms provided in Section 3(e) above, including without limitation, Employee's
duties not to compete with the Company as provided herein.
4. Proprietary Information Agreement. As a condition to his employment with
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the Company, Employee has executed and delivered a copy of the Company's
standard form Employee Proprietary Information and Inventions Agreement in
substantially the form of Exhibit B attached hereto and incorporated herein. Any
breach by Employee of such agreement shall be deemed a breach of this Agreement
for purposes of Section 3(c) hereof. Employee's obligations under such Employee
Proprietary Information and Inventions Agreement shall survive any termination
of the Period of Employment or this Agreement.
5. Loan to Employee. The Company agrees to lend certain amounts to Employee
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as provided below. The First Line of Credit (as defined below) will be evidenced
by a full recourse promissory note in substantially the form attached hereto as
Exhibit C-1.
The Second Line of Credit (as defined below) will be evidenced by a
secured full recourse promissory note in substantially the form attached hereto
as Exhibit C-2.
(a) Lines of Credit. Employee shall be or have been extended two(2)
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lines of credit, the first for a maximum of Five Million Dollars ($5,000,000.00)
(the " First Line of Credit")and the second for a maximum of Twenty-Five Million
Dollars ($25,000,000.00) (the "Second Line of Credit"). All advances under the
First Line of Credit are subject to the review of and approval by the Company's
Chief Financial Officer. Funds shall be advanced upon written notice for funds
by
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Employee to Company (the "Advance(s)"). Under the First Line of Credit, all
funds together with interest from the date of the Advance shall accrue at the
applicable federal rate on the date of the Advance, compounded semiannually and
shall be due and payable within ninety (90) days upon the earlier of (i) the
date the prior 30 day average fair market value of a share of the Common Stock
of the Company increases by at least 50% over the fair market value of a share
of the Company's Common Stock on the date of the Advance and (ii) the date of
termination of employment pursuant to Section 3. For purposes of this Section 5,
the fair market value of a share of the Common Stock of the Company shall mean
the closing price for a share for the last market trading day prior to the time
of the determination (or, if no closing price was reported on that date, on the
last trading date on which a closing price was reported) on the stock exchange
determined by the Company to be the primary market for the Common Stock as
reported in The Wall Street Journal or such other source as the Company deems
reliable. Under the Second Line of Credit, all Advances together with interest
at the rate of 6% per annum shall be secured by certain of Employee's real
estate and other collateral as the Company shall request and be due and payable
on the earlier to occur of (i) on or after November 2, 2002 upon ninety (90)
days written demand and (ii) a Maturity Event (as defined in the promissory note
evidencing the Second Line of Credit).
6. Additional Bonus. Provided that the employee continues to be employed by
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the Company, an additional bonus amount will be paid at the end of each calendar
quarter in the amount of $9,053.83 for the duration of this agreement.
7. Assignment; Successors and Assigns. Employee agrees that he will not
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assign, sell, transfer, delegate or otherwise dispose of, whether voluntarily or
involuntarily, or by operation of law, any rights or obligations under this
Agreement, nor shall Employee's rights be subject to encumbrance or the claims
of creditors. Any purported assignment, transfer, or delegation shall be null
and void. Nothing in this Agreement shall prevent the consolidation of the
Company with, or its merger into, any other corporation, or the sale by the
Company of all or substantially all of its properties or assets, or the
assignment by the Company of this Agreement and the performance of its
obligations hereunder to any successor in interest or any Affiliated Company.
Subject to the foregoing, this Agreement shall be binding upon and shall inure
to the benefit of the parties and their respective heirs, legal representatives,
successors, and permitted assigns, and shall not benefit any person or entity
other than those enumerated above. Without limitation of the foregoing, any such
successor in interest (including an entity which acquires substantially all the
assets and the business of the Company) in such acquisition transaction or any
Affiliated Company shall be bound by all of the terms and conditions of this
Agreement.
8. Notices. All notices or other communications required or permitted
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hereunder shall be made in writing and shall be deemed to have been duly given
if delivered by hand or mailed, postage prepaid, by certified or registered
mail, return receipt requested, and addressed to the Company at:
BEA Systems, Inc.
0000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Chief Financial Officer
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or to the Employee at: Xxxxxxx X. Xxxxxxx III
000 Xxxx Xxxxx Xxx.
Xxx Xxxxx, XX 00000
Notice of change of address shall be effective only when done in accordance with
this Section.
9. Entire Agreement. The terms of this Agreement are intended by the
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parties to be the final expression of their agreement with respect to the
employment of Employee by the Company and may not be contradicted by evidence of
any prior or contemporaneous agreement. The parties further intend that this
Agreement shall constitute the complete and exclusive statement of its terms and
that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding involving this Agreement. The 1999
Agreement is superceded in its entirety by this Agreement.
10. Amendments; Waivers. This Agreement may not be modified, amended, or
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terminated except by an instrument in writing, signed by the Employee and by a
duly authorized representative of the Company other than Employee. By an
instrument in writing similarly executed, either party may waive compliance by
the other party with any provision of this Agreement that such other party was
or is obligated to comply with or perform, provided, however, that such waiver
shall not operate as a waiver of, or estoppel with respect to, any other or
subsequent failure. No failure to exercise and no delay in exercising any right,
remedy, or power hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, or power hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy, or
power provided herein or by law or in equity.
11. Severability; Enforcement. If any provision of this Agreement, or the
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application thereof to any person, place, or circumstance, shall be held by a
court of competent jurisdiction to be invalid, unenforceable, or void, the
remainder of this Agreement and such provisions as applied to other persons,
places, and circumstances shall remain in full force and effect. It is the
intention of the parties that the covenants contained in Section 3(i) shall be
enforced to the greatest extent in time, area, and degree of participation as is
permitted by the law of that jurisdiction whose law is found to be applicable to
any acts allegedly in breach of these covenants.
12. Governing Law. The validity, interpretation, enforceability, and
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performance of this Agreement shall be governed by and construed in accordance
with the law of the State of California.
13. Employee Acknowledgment. Employee acknowledges (i) that he has
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consulted with or has had the opportunity to consult with independent counsel of
his own choice concerning this Agreement and has been advised to do so by the
Company, and (ii) that he has read and understands the Agreement, is fully aware
of its legal effect, and has entered into it freely based on his own judgment.
14. Exclusive. Both parties agree that this Agreement shall provide the
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exclusive remedies for any breach by the Company of its terms.
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The parties have duly executed this Agreement as of the date first written
above.
COMPANY: EMPLOYEE:
BEA SYSTEMS, INC.
By: _________________________________ _______________________________
Title: ______________________________ Xxxxxxx X. Xxxxxxx III
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EXHIBIT A
to
EMPLOYMENT AGREEMENT
England
France
Germany
Japan
United States
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EXHIBIT B
October, 2001
EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
(Rev. 9/23/98)
In consideration of my employment by BEA Systems, Inc., a Delaware
corporation (the "Company"), I hereby agree to certain restrictions placed by
the Company on my use and development of information and technology of the
Company, as more fully set out below.
1. Proprietary Information.
(a) Confidential Restrictions. I understand that, in the course of my work
as an employee of the Company, I may have access to Proprietary
Information (as defined below) concerning the Company. I acknowledge
that the Company has developed, compiled, and otherwise obtained,
often at great expense, this information, which has great value to the
Company's business. I agree to hold in strict confidence and in trust
for the sole benefit of the Company all Proprietary Information and
will not disclose any Proprietary Information, directly or indirectly,
to anyone outside of the Company, or use, copy, publish, summarize, or
remove from Company premises such information (or remove from the
premises any other property of the Company) except (i) during my
employment to the extent necessary to carry out my responsibilities as
an employee of the Company or (ii) after termination of my employment,
as specifically authorized in writing by a duly authorized officer of
the Company. I further understand that the publication of any
Proprietary Information through literature or speeches must be
approved in advance in writing by a duly authorized officer of the
Company.
(b) Proprietary Information Defined. I understand that the term
"Proprietary Information" in this Agreement means all information and
any idea whether disclosed to, learned by or developed by me,
pertaining in any manner to the business of the Company or to the
Company's affiliates, consultants, or business associates, unless (i)
the information is or becomes publicly known through lawful means;
(ii) the information was rightfully in my possession or part of my
general knowledge prior to my employment by the Company; or (iii) the
information is disclosed to me without confidential or proprietary
restriction by a third party who rightfully possesses the information
(without confidential or proprietary restriction) and did not learn of
it, directly or indirectly, from the Company. I understand that this
definition includes information or ideas in any form, tangible or
intangible, including without limitation, all documents, books,
papers, drawings, models, sketches, and other data of any kind and
description, including electronic data recorded or retrieved by any
means, that have been or will be given to me by the Company (or any
affiliate of it), as well as written or verbal instructions or
comments. I further understand that the Company considers the
following information to be included, without limitation, in the
definition of
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Proprietary Information: (A) schematics, techniques, employee
suggestions, development tools and processes, computer printouts,
computer programs, design drawings and manuals, electronic codes,
formulas and improvements; (B) information about costs, profits,
markets, sales, customers, potential customers targeted by the Company
and bids; (C) plans for future development and new product concepts,
business marketing plans; and (D) corporate organization, personnel
files, salary ranges and information about the compensation, equity
and benefits provided to other employees.
(c) Information Use. I agree that I will maintain at my work area or in
other places under my control only such Proprietary Information that I
have a current "need to know," and that I will return to the
appropriate person or location or otherwise properly dispose of
Proprietary Information once my need to know no longer exists. I agree
that I will not make copies of information unless I have a legitimate
need for such copies in connection with my work.
(d) Prior Actions and Knowledge. I hereby represent and warrant that from
the time of my first contact or communication with the Company I have
held in strict confidence and in trust for the sole benefit of the
Company all Proprietary Information and have not disclosed any
Proprietary Information, directly or indirectly, to anyone outside of
the Company, or used, copied, published, or summarized any Proprietary
Information except to the extent permitted by Section 1(a) above.
Except as disclosed on Schedule A to this Agreement, I do not know
anything about the Company's business or Proprietary Information,
other than information I have learned from the Company in the course
of being hired.
(e) Third Party Information. I recognize that the Company has received and
in the future will receive from third parties their confidential or
proprietary information subject to a duty on the Company's part to
maintain the confidentiality of such information and to use it only
for certain limited purposes. I agree that I owe the Company and such
third parties, during the term of my employment and thereafter, a duty
to hold all such confidential or proprietary information in the
strictest confidence and not to disclose it to any person, firm, or
corporation (except as necessary in carrying out my work for the
Company consistent with the Company's agreement with such third party)
or to use it for the benefit of anyone other than for the Company or
such third party (consistent with the Company's agreement with such
third party) without the express written authorization of a duly
authorized officer of the Company.
(f) Interference with Business. I hereby acknowledge that pursuit of the
activities forbidden by this paragraph 1(f) would necessarily involve
the use or disclosure of Proprietary Information in breach of
paragraph 1(a), but that proof of such breach would be extremely
difficult. To forestall such disclosure, use, and breach, I agree that
for the term of this Agreement and for a period of one (1) year after
termination of my employment with the Company, I shall not, for myself
or any third party, directly or indirectly (i) divert or attempt to
divert from the Company (or any affiliate of it that might be formed)
any business of any kind in which it is engaged, including,
13
without limitation, the solicitation of or interference with any of
its suppliers or customers or (ii) solicit, recruit or encourage to
leave their employment or recommend for employment any person employed
by the Company. Furthermore, I agree that during the period of my
employment with the Company I shall not engage in any business
activity that is or may be competitive with the Company, except where
I can prove that the action was taken without the use in any way of
Proprietary Information. I understand that this paragraph 1(f) does
not prevent me from working for a competitor following termination of
my employment with the Company as long as I am able to and do comply
with the provisions of this Agreement.
2. Inventions.
(a) Defined; Statutory Notice. I understand that during the term of my
employment, there are certain restrictions on my development of
technology, ideas, and inventions, referred to in this Agreement as
"Invention Ideas." The term Invention Ideas means all ideas,
processes, inventions, technology, designs, formulas, discoveries,
patents, copyrights, and trademarks, and all improvements, rights, and
claims related to the foregoing, that are conceived, developed, or
reduced to practice by me alone or with others except to the extent
that California Labor Code Section 2870 lawfully prohibits the
assignment. I understand that Section 2870(a) provides:
Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in
an invention to his or her employer shall not apply to an invention
that the employee developed entirely on his or her own time without
using the employer's equipment, supplies, facilities, or trade secret
information except for those inventions that either:
(1) Relate at the time of conception or reduction to practice of the
invention to the employer's business, or actual or demonstrably
anticipated research or development of the employer.
(2) Result from any work performed by the employee for the employer.
(b) Disclosure. I agree to maintain adequate and current written records
on the development of all Invention Ideas and to disclose promptly to
the Company all Invention Ideas and relevant records, which records
will remain the sole property of the Company. I further agree that all
information and records pertaining to any idea, process, invention,
technology, design, formula, discovery, patent, copyright or
trademark, that I do not believe to be an Invention Idea, but is
conceived, developed, or reduced to practice by me (alone or with
others) during my period of employment or during the one-year period
following termination of my employment, shall be promptly disclosed to
the Company (such disclosure to be received in confidence). The
Company shall examine such information to determine if in fact it is
an Invention Idea subject to this Agreement.
(c) Assignment. I agree to assign to the Company, without further
consideration, my entire right, title, and interest (throughout the
United States and in all foreign
14
countries), free and clear of all liens and encumbrances, in and to
each Invention Idea, which shall be the sole property of the Company,
whether or not copyrightable or patentable. In the event any Invention
Idea shall be deemed by the Company to be copyrightable or patentable
or otherwise registrable, I will assist the Company (at its expense)
in obtaining letters patent or other applicable registrations thereon
and I will execute all documents and do all other things (including
testifying at the Company's expense) necessary or proper to accomplish
such registrations thereon and to vest the Company with full title
thereto. Should the Company be unable to secure my signature on any
document necessary to apply for, prosecute, obtain, or enforce any
patent, copyright, or other right or protection relating to any
Invention Idea, whether due to my mental or physical incapacity or any
other cause, I hereby irrevocably designate and appoint the Company
and each of its duly authorized officers and agents as my agent and
attorney-in-fact, to act for and in my behalf and stead, to execute
and file any such document, and to do all other lawfully permitted
acts to further the prosecution, issuance, and enforcement of patents,
copyrights, or other rights or protection with the same force and
effect as if executed and delivered by me.
(d) Exclusions. Except as disclosed in Schedule A attached hereto and
incorporated herein, there are no ideas, processes, inventions,
technology, writings, programs, designs, formulas, discoveries,
patents, copyrights, or trademarks, or improvements to the foregoing,
that I wish to exclude from the operation of this Agreement. To the
best of my knowledge, there is no existing contract in conflict with
this Agreement or any other contract to assign ideas, processes,
inventions, technology, writings, programs, designs, formulas,
discoveries, patents, copyrights, or trademarks, or improvements
thereon, that is now in existence between me and any other person or
entity.
(a) License for Other Inventions. If, in the course of my employment, with
the Company, I incorporate into Company property an invention owned by
me or in which I have an interest, the Company is granted a
nonexclusive, royalty-free, irrevocable, perpetual, worldwide license
to make, modify, use and sell my invention as part of and in
connection with the Company property.
(e) Post-Termination Period. I acknowledge that because of the difficulty
of establishing when something is first conceived or developed by me,
or whether it results from access to Proprietary Information or the
Company's equipment, facilities, and data, I agree that any idea,
process, invention, technology, writing, program, design, formula,
discovery, patent, copyright, or trademark, or any improvement,
rights, or claims related to the foregoing, shall be presumed to be an
Invention Idea if it is conceived, developed, used, sold, exploited,
or reduced to practice by me or with my aid within one (1) year after
my termination of employment with the Company. I can rebut the above
presumption if I prove that the idea, process, invention, technology,
writing, program, design, formula, discovery, patent, copyright, or
trademark, or improvement, right or claim, is not an Invention Idea as
defined in paragraph 2(a).
15
(f) California Labor Code. I understand that nothing in this Agreement is
intended to expand the scope of protection provided me by Sections
2870 through 2872 of the California Labor Code.
3. Former or Conflicting Agreements. During my employment with the Company, I
will not disclose to the Company, or use, or induce the Company to use, any
proprietary information or trade secrets of others. I represent and warrant
that I have returned all property and confidential information belonging to
all prior employers, if any. I further represent and warrant that my
employment by the Company and my performance of the terms of this Agreement
will not breach any agreement to keep in confidence proprietary information
acquired by me in confidence or in trust prior to my employment by the
Company. I have not entered into, and I agree I will not enter into, any
oral or written agreement in conflict with my obligations under this
Agreement.
4. Government Contracts. I understand that the Company has or may enter into
contracts with the government under which certain intellectual property
rights will be required to be protected, assigned, licensed, or otherwise
transferred and I hereby agree to execute such other documents and
agreements as are necessary to enable the Company to meet its obligations
under any such government contracts.
5. Termination. I hereby acknowledge and agree that all personal property,
including, without limitation, all source code listings, books, manuals,
records, models, drawings, reports, notes, contracts, lists, blueprints,
and other documents or materials or copies thereof, all equipment furnished
to or prepared by me in the course of or incident to my employment, and all
Proprietary Information belong to the Company and will be promptly returned
to the Company upon termination of my employment with the Company.
Following my termination, I will not retain any written or other tangible
material containing any Proprietary Information or information pertaining
to any Invention Idea. I understand that my obligations contained herein
will survive the termination of my employment and that I will continue to
make all disclosures required of me by paragraph 2(b). In the event of the
termination of my employment, I agree, if requested by the Company, to sign
and deliver the Termination Certificate attached as Schedule B hereto and
incorporated herein. I agree that after the termination of my employment
with the Company, I will not enter into any agreement that conflicts with
my obligations under this Agreement and will inform any subsequent
employers of my obligations under this Agreement.
2. NO IMPLIED EMPLOYMENT RIGHTS. I RECOGNIZE THAT NOTHING IN THIS AGREEMENT
SHALL BE CONSTRUED TO IMPLY THAT MY EMPLOYMENT IS GUARANTEED FOR ANY PERIOD
OF TIME. EXCEPT AS OTHERWISE AGREED IN A WRITTEN AGREEMENT SIGNED BY A DULY
AUTHORIZED OFFICER OF THE COMPANY, MY EMPLOYMENT IS FOR AN INDEFINITE
DURATION, AND EITHER THE COMPANY OR I CAN TERMINATE OUR EMPLOYMENT
RELATIONSHIP AT ANY TIME, WITHOUT NOTICE, AND FOR ANY REASON, WITH OR
WITHOUT CAUSE.
6. Remedies. I recognize that nothing in this Agreement is intended to limit
any remedy of the Company under the California Uniform Trade Secrets Act
and that I could face possible
16
criminal and civil actions, resulting in imprisonment and substantial
monetary liability, if I misappropriate the Company's trade secrets. In
addition, I recognize that my violation of this Agreement could cause the
Company irreparable harm, the amount of which may be extremely difficult to
estimate, thus, making any remedy at law or in damages inadequate.
Therefore, I agree that the Company shall have the right to apply to any
court of competent jurisdiction for an order restraining any breach or
threatened breach of this Agreement and for any other relief the Company
deems appropriate. This right shall be in addition to any other remedy
available to the Company in law or equity.
7. Miscellaneous Provisions.
(a) Assignment. I agree that the Company may assign to another person or
entity any of its rights under this Agreement.
(b) Governing Law; Severability. The validity, interpretation,
enforceability, and performance of this Agreement shall be governed by
and construed in accordance with the laws of the State of California.
If any provision of this Agreement, or application thereof to any
person, place, or circumstance, shall be held by a court of competent
jurisdiction to be invalid, unenforceable, void or unconscionable,
such provision shall be enforced to the greatest extent permitted by
law and the remainder of this Agreement and such provision as applied
to other persons, places, and circumstances shall remain in full force
and effect.
(c) Entire Agreement. The terms of this Agreement are the final expression
of my agreement with respect to the subject matter hereof and may not
be contradicted by evidence of any prior or contemporaneous agreement.
This Agreement shall constitute the complete and exclusive statement
of its terms and no extrinsic evidence whatsoever may be introduced in
any judicial, administrative, or other legal proceeding involving this
Agreement.
(a) Amendment; Waivers. This Agreement can be amended or terminated only
by a written agreement signed by a duly authorized officer of the
Company and me. No failure to exercise or delay in exercising any
right under this Agreement shall operate as a waiver thereof.
(d) Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of me, my heirs, executors, administrators, and
successors, as well as the Company's successors and assigns.
(e) Application of this Agreement. I hereby agree that my obligations set
forth in Sections 1 and 2 hereof and the definitions of Proprietary
Information and Invention Ideas contained therein shall be equally
applicable to Proprietary Information and Invention Ideas relating to
any work performed by me for the Company prior to the execution of
this Agreement.
I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE
COMPLETELY NOTED ON SCHEDULE A TO THIS AGREEMENT ANY
17
PROPRIETARY INFORMATION, IDEAS, PROCESSES, INVENTIONS, TECHNOLOGY, WRITINGS,
PROGRAMS, DESIGNS, FORMULAS, DISCOVERIES, PATENTS, COPYRIGHTS, OR TRADEMARKS, OR
IMPROVEMENTS, RIGHTS, OR CLAIMS RELATING TO THE FOREGOING, THAT I DESIRE TO
EXCLUDE FROM THIS AGREEMENT.
Date: _______________________ __________________________________
Employee Name
__________________________________
Employee Signature
18
SCHEDULE A
EMPLOYEE'S DISCLOSURE
1. Proprietary Information. Except as set forth below, I acknowledge that at
this time I know nothing about the business or Proprietary Information of
BEA Systems, Inc., a Delaware corporation (the "Company"), other than
information I have learned from the Company in the course of being hired:
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
2. Prior Inventions. Except as set forth below, there are no ideas, processes,
inventions, technology, writings, programs, designs, formulas, discoveries,
patents, copyrights, or trademarks, or any claims, rights, or improvements
to the foregoing, that I wish to exclude from the operation of this
Agreement: ________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
___________________________________________________________________________
Date: __________________________ _________________________________
Employee Name
_________________________________
Employee Signature
19
SCHEDULE B
TERMINATION CERTIFICATE CONCERNING
BEA SYSTEMS, INC.
PROPRIETARY INFORMATION AND INVENTIONS
This is to certify that I have returned all personal property of BEA
Systems, Inc., a Delaware corporation (the "Company"), including, without
limitation, all source code listings, books, manuals, records, models, drawings,
reports, notes, contracts, lists, blueprints, and other documents and materials,
Proprietary Information, and equipment furnished to or prepared by me in the
course of or incident to my employment with the Company, and that I did not make
or distribute any copies of the foregoing.
I further certify that I have reviewed the Employee Proprietary Information
and Inventions Agreement signed by me and that I have complied with and will
continue to comply with all of its terms, including, without limitation, (i) the
reporting of any idea, process, invention, technology, writing, program, design,
formula, discovery, patent, copyright, or trademark, or any improvement, rights,
or claims related to the foregoing, conceived or developed by me and covered by
the Agreement and (ii) the preservation as confidential of all Proprietary
Information pertaining to the Company. This certificate in no way limits my
responsibilities or the Company's rights under the Agreement.
On termination of my employment with the Company, I will be employed by
_____________________ [Name of New Employer] [in the ______________ division]
and I will be working in connection with the following projects:
[generally describe the projects]
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Date: _______________________ _______________________________
Employee Name
_______________________________
Employee Signature
20
