Exhibit 10.23

 

AMENDMENT NO. 1 TO

EMPLOYMENT AGREEMENT

 

THIS AMENDMENT Number 1 to the Employment Agreement by and between Micromuse
Inc., a Delaware corporation (the “Company”), and Ian Halifax (the “Executive”)
is made as of December 13, 2005 (the “Agreement”).

 

WHEREAS, the Company and the Executive are parties an Employment Agreement dated
as of December 3, 2004 (the “Employment Agreement”);

 

WHEREAS, the parties desire to amend certain provisions of the Employment
Agreement.

 

NOW, THEREFORE, in consideration of the foregoing the parties hereby agree as
follows:

 

1. Amendment of Employment Agreement. Section 7(b) is hereby amended so that the
acceleration provided for in that Section applies to any outstanding stock
options held by Executive. Sections 6(b)(i) and 7(a) are hereby amended and
restated in their entirety, Section 6(b)(ii) is hereby deleted in its entirety
and new Sections 6(b)(v) and 6(b)(vi) are hereby added, to read as follows:

 

“6(b)(i) the Company shall pay the Executive a lump sum cash payment equal to
the sum of one times (A) Executive’s Base Compensation (at the rate in effect at
the time of termination of employment) and (B) the annual target bonus amount
described in Section 2(b) in effect at the time of termination of employment.
Such amount shall be paid on the date the release described in Section 6(a)
becomes effective, provided that such Executive shall have executed and
delivered such release and such release shall have become effective no later
than 30 days following termination of employment.

 

6(b)(v) If Subsection (b) above applies, then the Company shall reimburse the
Executive for COBRA costs for himself and his eligible dependents, for identical
coverage as was provided to the Executive immediately prior to termination (to
the maximum extent otherwise available under plans maintained by the Company),
for a period of 12 months following the termination of his Employment if he
timely elects to continue his medical coverage under COBRA.

 

6(b)(vi) The other provisions of this Section 6(b) and Section 7(a)
notwithstanding, the payments under Sections 6(b)(i) and 7(a) and the COBRA
reimbursements under Sections 6(b)(v) and 7(a) shall in no event commence prior
to the earliest date permitted by section 409A(a)(2) of the Code. If the
commencement of reimbursements under Sections 6(b)(v) or 7(a) must be delayed,
then any deferred installments shall be paid in a lump sum on the earliest
practicable date permitted by section 409A(a)(2) of the Code.

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7(a) The Executive shall be entitled to receive the severance payment specified
in Section 6(b)(i). In addition, the Company will reimburse the Executive for
COBRA costs as provided in Section 6(b)(v).”

 

2. Effective Date. This Agreement will become effective as of the date set forth
above.

 

3. Governing Law. This Amendment to the Employment Agreement shall be governed
by, and construed in accordance with, the laws of the State of California, as
such laws are applied to contracts entered into and to be performed entirely
within the State of California.

 

4. Effect of Amendment to the Employment Agreements. Except as amended hereby,
all of the terms of the Employment Agreement shall remain and continue in full
force and effect.

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IN WITNESS WHEREOF, the parties have executed this Amendment to the Employment
Agreement as of the date first above written above.

 

MICROMUSE INC.

By:

 

/s/ Nell O’Donnell

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Nell O’Donnell, Senior Vice President

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(print name and title)

EXECUTIVE

/s/ Ian Halifax

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Ian Halifax