EXECUTIVE EMPLOYMENT
AGREEMENT
This Employment
Agreement (this “Agreement”) is made as of May 1,
2005 (the “Effective Date”), by and between BMC
Software, Inc., a Delaware corporation (the
“Employer”), and Harold I. Goldberg (the
“Executive”). The Employer and the Executive are each a
“party” and are together “parties” to this
Agreement.
WHEREAS, the
Employer desires to employ the Executive, and the Executive wishes
to accept such employment, upon the terms and conditions set forth
in this Agreement; and
WHEREAS, the
Executive acknowledges that a substantial portion of his employment
duties will be undertaken in the state of Texas at the corporate
headquarters of the Employer. In addition to Executive’s
physical presence in the state of Texas while undertaking his
employment duties, all or a substantial portion of his employment
undertakings outside the state of Texas relate to the business of
the corporate headquarters located in Houston, Texas. Executive
acknowledges the substantial nexus between his employment and the
state of Texas.
NOW THEREFORE, in
consideration of the employment compensation to be paid to the
Executive and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties,
intending to be legally bound, agree as follows:
For the purposes
of this Agreement, the following terms have the meanings specified
or referred to in this Section 1.
“Agreement” refers to this Employment Agreement,
including all Exhibits attached hereto, as amended from time to
time.
“Benefits” as defined in
Section 3.1(b).
“Board
of Directors” refers to the board of directors of the
Employer.
“Change
of Control” refers to (i) the acquisition of at
least 50% of Employer’s outstanding voting stock;
(ii) an unapproved change in the majority of the
Employer’s board of directors; (iii) a merger, consolidation,
or similar corporate transaction in which the Company’s
shareholders immediately prior to the transaction do not own more
than 60% of the voting stock of the surviving corporation in the
transaction; and (iv) shareholder approval of the
company’s liquidation, dissolution, or sale of substantially
all of its assets.
“Confidential Information” means any and
all:
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a.
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trade secrets (as defined herein)
concerning the business and affairs of the Employer, product
specifications, data, know-how, formulae, compositions, processes,
designs, sketches, photographs, graphs, drawings, samples,
inventions and ideas, past, current, and planned research and
development, current and planned manufacturing or distribution
methods and processes, customer lists, current and anticipated
customer requirements, price lists, market studies, business plans,
computer software and programs (including object code and source
code), computer software and database technologies, systems,
structures, and architectures (and related formulae, compositions,
processes, improvements, devices, know-how, inventions,
discoveries, concepts, ideas, designs, methods and information),
and any other information, however documented, that is a trade
secret;
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b.
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information concerning the business
and affairs of the Employer (which includes historical financial
statements, financial projections and budgets, historical and
projected sales, capital spending budgets and plans, the names and
backgrounds of key personnel, personnel training and techniques and
materials), however documented; and
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c.
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notes, analysis, compilations,
studies, summaries, and other material prepared by or for the
Employer containing or based, in whole or in part, on any
information included in the foregoing.
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“Disability” as defined in
Section 6.2.
“Effective Date” is the date stated in the first
paragraph of the Agreement.
“Employee Invention” shall mean any idea,
invention, technique, modification, process, or improvement
(whether patentable or not), any industrial design (whether
registerable or not), any mask work, however fixed or encoded, that
is suitable to be fixed, embedded or programmed in a semiconductor
product (whether recordable or not), and any work of authorship
(whether or not copyright protection may be obtained for it)
created, conceived, or developed by the Executive, either solely or
in conjunction with others, during the Employment Period, or a
period that includes a portion of the Employment Period, that
relates in any way to, or is useful in any manner in, the business
then being conducted or proposed to be conducted by the Employer,
and any such item created by the Executive, either solely or in
conjunction with others, following termination of the
Executive’s employment with the Employer, that is based upon
or uses Confidential Information.
“Employment Period” is the term of the
Executive’s employment under this Agreement.
“Fiscal
Year” shall mean the Employer’s fiscal year, which
shall end on March 31 of each year, or as changed from time to
time.
“for
cause” as defined in Section 6.3.
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“Good
Reason” as defined in Section 6.3.
“person” is any individual, corporation
(including any non-profit corporation), general or limited
partnership, limited liability company, joint venture, estate,
trust, association, organization, or governmental body.
“Proprietary Items” as defined in
Section 7.2(a)(iv).
“Salary” as defined in
Section 3.1(a).
“trade
secrets” shall mean the whole or any part of any
scientific or technical information, design, process, procedure,
formula, or improvement that has value and that the owner has taken
measures to prevent from becoming available to persons other than
those selected by the owner to have access for limited
purposes.
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2.
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EMPLOYMENT TERMS AND
DUTIES
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The Employer
hereby employs the Executive, and the Executive hereby accepts
employment by the Employer, upon the terms and conditions set forth
in this Agreement.
Subject to the
provisions of Section 6, the term of the Executive’s
employment under this Agreement will commence upon the Effective
Date and shall continue in effect through the third anniversary of
the Effective Date (the “Employment Period”). The
Employment Period may be further extended by mutual agreement of
the parties.
The Executive will
have such duties as are assigned or delegated to the Executive by
the Chief Executive Officer of Employer, and will initially serve
as the Employer’s Vice President of Worldwide Marketing. The
Executive will devote his entire business time, attention, skill,
and energy exclusively to the business of the Employer, will use
his best efforts to promote the success of the Employer’s
business, and will cooperate fully with the Chief Executive Officer
of Employer, in the advancement of the best interests of the
Employer. The Executive’s employment will be subject to the
policies maintained and established by the Employer, from time to
time. Nothing in this Section 2.3, however, will prevent the
Executive from engaging in additional activities in connection with
passive personal investments and community affairs that are not
inconsistent with the Executive’s duties under this
Agreement. Additionally, nothing in this Section 2.3 will
prevent the Executive from serving on the Board of Directors of
other companies or organizations, or engaging in other activities,
so long as such participation does not conflict with the interests
or business of Employer or require such involvement as to interfere
with the performance of the Executive’s duties hereunder and
has been expressly approved by the
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Chief Executive
Officer of Employer. If the Executive is elected as a director of
the Employer or as a director or officer of any of its affiliates,
the Executive will fulfill his duties as such director or officer
without additional compensation. The Executive acknowledges and
agrees that he owes a fiduciary duty of loyalty, fidelity and
allegiance to act at all times in the best interests of the
Employer.
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a.
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Salary . During the Employment Period, the
Executive will be paid an annual base salary of $300,000 (the
“Salary”), which will be payable in twenty-four
(24) equal installments according to the Employer’s
customary payroll practices. Executive may be subject to such
increases in Salary as deemed appropriate in the sole discretion of
the Chief Executive Officer who will review Executive’s
salary on at least an annual basis.
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b.
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Benefits . The Executive will, during the
Employment Period, be permitted to participate in such pension,
profit sharing, life insurance, hospitalization, major medical, and
other employee benefit plans of the Employer that may be in effect
from time to time, to the extent the Executive is eligible under
the terms of those plans (collectively, the
“Benefits”).
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c.
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Cash Bonus . Executive will be eligible for a
cash bonus as described in Attachment A incorporated herein by
reference.
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4.
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FACILITIES AND
EXPENSES
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The Employer will
furnish the Executive office space, equipment, supplies, and such
other facilities and personnel as the Employer deems necessary or
appropriate for the performance of the Executive’s duties
under this Agreement, including furnishing office space at
Employer’s headquarters in Houston, TX and at
Employer’s facility in Sunnyvale, CA.
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The Employer will
pay on behalf of the Executive (or reimburse the Executive for)
reasonable expenses incurred by the Executive at the request of, or
on behalf of, the Employer in the performance of the
Executive’s duties pursuant to this Agreement, and in
accordance with the Employer’s employment policies, including
reasonable travel and entertainment expenses incurred by the
Executive in attending business meetings, in appropriate business
entertainment activities, and for promotional expenses. The
Executive must file expense reports with respect to such expenses
in accordance with the Employer’s policies then in
effect.
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5.
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VACATIONS AND
HOLIDAYS
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The Executive will
be entitled to paid vacation during the term of the Agreement in
accordance with the vacation policies of the Employer in effect for
its employees from time to time. The Executive will also be
entitled to the paid holidays and other paid leave set forth in the
Employer’s policies.
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6.1
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EVENTS OF TERMINATION
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The Employment
Period, the Executive’s Salary and any and all other rights
of the Executive under this Agreement or otherwise as an employee
of the Employer will terminate (except as otherwise provided in
this Section 6):
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a.
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upon the death of the
Executive;
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b.
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upon the Disability (as defined in
Section 6.2) of the Executive immediately upon notice from
either party to the other;
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c.
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upon termination by the Employer for
cause (as defined in Section 6.3);
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d.
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upon the voluntary retirement from
or voluntary resignation of employment by the Executive for any
reason other than those set forth in Section 6.1(f)
below;
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e.
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upon termination by the Employer for
any reason other than those set forth in Section 6.1(a)
through 6.1(d) above; or
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f.
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upon voluntary resignation of
employment by the Executive within 30 days of the occurrence
of an event that constitutes Good Reason, as defined in
Section 6.3 below.
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Upon termination
of the Employment Period, as provided above or otherwise,
Executive’s rights respecting Benefits, stock options, and
Cash Bonus will be determined under the applicable plan or program
providing the same.
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6.2
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DEFINITION OF DISABILITY
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For purposes
hereof, the term “Disability” shall mean an incapacity
by accident, illness or other circumstance which renders the
Executive mentally or physically incapable of performing the duties
and services required of the Executive hereunder on a full-time
basis for a period of at least 180 consecutive days.
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6.3
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DEFINITION OF “FOR
CAUSE” AND “GOOD REASON”
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a.
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For
purposes of Section 6.1, the phrase “for cause”
means:(i) the Executive’s continued and material failure to
perform his obligations under this Agreement ; (ii) the
Executive’s material failure to adhere to any Employer policy
or code of conduct; (iii) the appropriation (or attempted
appropriation) of a material business opportunity of the Employer,
including attempting to secure or securing any personal profit in
connection with any transaction entered into on behalf of the
Employer; (iv) the Executive’s engaging in conduct that
is materially injurious to the Employee, (v) the
misappropriation (or attempted misappropriation) of any of the
Employer’s funds or property; (vi) the conviction of or
the entering of a guilty plea or plea of no contest with respect
to, a felony, the equivalent thereof, or any other crime with
respect to which imprisonment is a punishment or. ; (vii) the
conviction of the Executive by a court of competent jurisdiction of
a crime involving moral turpitude. The determination of whether the
Executive’s employment is terminated for cause shall be made
solely by the Employer, which shall act in good faith in making
such determination.
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b.
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“Good Reason”
means:
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The
occurrence, within 12 months after the date upon which a
Change of Control occurs, of any one or more of the following
events without Executive’s express written consent:
(i) a material diminution of Executive’s duties without
reasonable business basis so as to cause humiliation or disgrace of
the Executive; (ii) a reduction by the Employer or a
subsidiary thereof in Executive’s Salary as in effect
immediately prior to the Change of Control or as the same may be
increased from time to time or a change in the eligibility
requirements or performance criteria under any bonus, incentive or
compensation plan, program or arrangement under which Executive is
covered immediately prior to the Change of Control which adversely
affects Executive; (iii) the Employer or a subsidiary thereof
requiring Executive to be permanently based anywhere other than
within 50 miles of either Houston, Texas or Sunnyvale,
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California;
(iv) without replacement by a plan providing benefits to
Executive equal to or greater than those discontinued, the failure
by the Employer or a subsidiary thereof to continue in effect,
within its maximum stated term, any pension, bonus, incentive,
stock ownership, purchase, option, life insurance, health,
accident, disability, or any other employee benefit plan, program
or arrangement in which Executive is participating at the time of
the Change of Control, or the taking of any action by the Employer
or a subsidiary thereof that would adversely affect
Executive’s participation or materially reduce
Executive’s benefits under any of such plans; or (v) if
Executive’s primary employment duties are with a subsidiary
of the Employer, the sale, merger, contribution, transfer or any
other transaction in conjunction with which the Employer’s
ownership interest in the subsidiary decreases below a majority
interest.
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Should the
Executive’s employment with the Employer be terminated during
the Employment Period pursuant to Section 6.1(e) above, the
Executive shall be entitled to:
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a.
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a
lump-sum payment equal to one year of his then current Salary;
and
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b.
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a
lump-sum payment equal to one times his then current cash bonus
target amount.
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Such payments
under this section will be made no later than 30 days
following the termination from employment. Severance payments do
not constitute continued employment beyond the termination
date.
If, within
12 months of a Change of Control, the Executive’s
position is eliminated or the Executive is terminated pursuant to
Section 6.1(e) or 6.1(f) above, regardless of whether such
termination event occurs during or after the Employment Period, the
Executive shall be entitled to:
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a
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a
lump-sum payment equal to one year of his then current
Salary;
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b
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a
lump-sum payment equal to one times his then current cash bonus
target amount;
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c
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Monthly payments for twelve months
of COBRA premiums paid by the Employer to continue the health
coverage and dental coverage immediately prior to the termination
date; and
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d.
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potential vesting of stock option
awards, subject to the terms and conditions of each stock option
award agreement.
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Severance payments
do not constitute continued employment beyond the termination
date.
Notwithstanding
anything to the contrary in this Agreement, if the Executive is a
“disqualified individual” (as defined in
Section 280G(c) of the Internal Revenue Code of 1986, as
amended (the “Code”)), and the severance benefits
provided for in this Section 6.5, together with any other payments
and benefits which the Executive has the right to receive from the
Employer and its affiliates, would cons
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