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Exhibit 10.40

WIND RIVER SYSTEMS, INC.

VICE PRESIDENTS' SEVERANCE BENEFIT PLAN

Section 1. Introduction.

    The Wind River Systems, Inc. Vice Presidents' Severance Benefit Plan (the
"Plan") was established effective May 16, 2001. The purpose of the Plan is to
provide for the payment of severance benefits to certain eligible employees of
Wind River Systems, Inc. (the "Company") or an affiliate of the Company whose
employment with the Company or an affiliate of the Company is involuntarily
terminated. This Plan shall supersede any severance benefit plan, policy or
practice previously maintained by the Company or any affiliate of the Company
other than the Wind River Systems, Inc. Severance Benefit Plan, the Wind River
Systems, Inc. Directors' Severance Benefit Plan and the Wind River Systems, Inc.
Senior Directors' Severance Benefit Plan and the Wind River Systems, Inc.
Executive Officers' Change of Control Incentive and Severance Benefit Plan. This
Plan document also is the Summary Plan Description for the Plan.

Section 2. Eligibility For Benefits.

    (a) General Rules. Subject to the requirements set forth in this Section,
the Company will grant severance benefits under the Plan to Eligible Employees.

    (1) "Eligible Employees" for purposes of this Plan are all full-time and
part-time regular hire employees of the Company and its affiliates (i) who are
based in the United States, (ii) who are classified in a position at the level
of vice president or above (excluding the Chairman of the Board and the Chief
Executive Officer), (iii) whose employment is involuntarily terminated by the
Company or an affiliate of the Company, and (iv) who are notified by the Company
in writing that they are eligible for participation in this Plan. The
determination as to whether an employee is an Eligible Employee shall be made by
the Company, in its sole discretion, and such determination shall be binding and
conclusive on all persons. For purposes of this Plan, part-time employees are
those regular hire employees who are regularly scheduled to work more than
twenty (20) hours per week but less than a full-time work schedule. Regular hire
employees working twenty (20) hours per week or less and temporary employees are
not eligible for severance benefits under the Plan. Notwithstanding the
foregoing, an "Eligible Employee," as that term is defined in the Wind River
Systems, Inc. Executive Officers' Change of Control Incentive and Severance
Benefit Plan (the "Change of Control Plan") with respect to the Change of
Control Plan's severance benefits, shall not be an Eligible Employee under this
Plan, with the result that this Plan shall have no Eligible Employees for the
period of twelve (12) months following a "Change of Control," as that term is
defined in the Change of Control Plan.

    (2) In order to be eligible to receive benefits under the Plan, an Eligible
Employee must remain on the job until his or her date of termination as
scheduled by the Company.

    (3) In order to be eligible to receive benefits under the Plan, an Eligible
Employee must execute a general waiver and release in substantially the form
attached hereto as Exhibit A, Exhibit B, or Exhibit C, as appropriate, and such
release must become effective in accordance with its terms. The Company, in its
sole discretion, may modify the form of the required release to comply with
applicable state law. The Company, in its sole discretion, shall determine the
form of the required release.

    (4) In order to be eligible to receive benefits under the Plan, an Eligible
Employee must execute a non-competition agreement, in such form as the Company,
in its sole discretion, may prescribe.

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    (b) Exceptions to Benefit Entitlement. An employee who otherwise is an
Eligible Employee will not receive benefits under the Plan in any of the
following circumstances, as determined by the Company in its sole discretion:

    (1) The employee has executed an individually negotiated employment contract
or agreement with the Company relating to severance benefits that is in effect
on his or her termination date, in which case such employee's severance benefit,
if any, shall be governed by the terms of such individually negotiated
employment contract or agreement and shall be governed by this Plan only to the
extent that the reduction pursuant to Section 3(c) below does not entirely
eliminate benefits under this Plan.

    (2) The employee voluntarily terminates employment with the Company or an
affiliate of the Company. Voluntary terminations include, but are not limited
to, resignation, retirement or failure to return from a leave of absence on the
scheduled date.

    (3) The employee voluntarily terminates employment with the Company or an
affiliate of the Company in order to accept employment with another entity that
is wholly or partly owned (directly or indirectly) by the Company or an
affiliate of the Company.

    (4) The employee is involuntarily terminated for reasons related to job
performance.

    (5) The employee is offered an identical or substantially equivalent or
comparable position with the Company or an affiliate of the Company. For
purposes of the foregoing, a "substantially equivalent or comparable position"
is one that offers the employee the same level of responsibility and
compensation.

    (6) The employee is offered immediate reemployment by a successor to the
Company or by a purchaser of its assets, as the case may be, following a change
in ownership of the Company or a sale of substantially all of the assets of a
division or business unit of the Company. For purposes of the foregoing,
"immediate reemployment" means that the employee's employment with the successor
to the Company or the purchaser of its assets, as the case may be, results in
uninterrupted employment such that the employee does not incur a lapse in pay as
a result of the change in ownership of the Company or the sale of its assets.

    (7) The employee is rehired by the Company or an affiliate of the Company
prior to the date benefits under the Plan are scheduled to commence.

Section 3. Amount Of Benefit.

    (a) Benefits under the Plan, if any, shall be provided to Eligible Employees
described in Section 2 in the amount and in the manner provided in Appendix A,
as such Appendix A may be revised by the Company, in its sole discretion, from
time to time.

    (b) Notwithstanding the foregoing, the Company may, in its sole discretion,
provide benefits in addition to those pursuant to Section 3(a) to Eligible
Employees or employees who are not Eligible Employees ("Non-Eligible Employees")
chosen by the Company, in its sole discretion, and the provision of any such
benefits to an Eligible Employee or Non-Eligible Employee shall in no way
obligate the Company to provide such benefits to any other Eligible Employee or
Non-Eligible Employee, even if similarly situated. If benefits under the Plan
are provided to a Non-Eligible Employee, references in the Plan to "Eligible
Employee" (with the exception of Section 3(a)) shall be deemed to refer to such
Non-Eligible Employee.

    (c) Certain Reductions. Notwithstanding any other provision of the Plan to
the contrary, any benefits payable to an Eligible Employee under this Plan shall
be reduced by any severance benefits payable by the Company or an affiliate of
the Company to such individual under any other policy, plan, program or
arrangement, including, without limitation, a contract between the Eligible
Employee and any entity, covering such individual. Furthermore, to the extent
that any federal, state or local laws,

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including, without limitation, so-called "plant closing" laws, require the
Company to give advance notice or make a payment of any kind to an Eligible
Employee because of that Eligible Employee's involuntary termination due to a
layoff, reduction in force, plant or facility closing, sale of business, change
of control, or any other similar event or reason, the benefits payable under
this Plan shall either be reduced or eliminated. The benefits provided under
this Plan are intended to satisfy any and all statutory obligations that may
arise out of an Eligible Employee's involuntary termination of employment for
the foregoing reasons, and the Plan Administrator shall so construe and
implement the terms of the Plan.

Section 4. Time Of Payment And Form Of Benefit.

    The cash severance benefit under the Plan will be paid in a single sum
within ten (10) days following the effective date of the release described in
Section 2(a)(3); provided, however, that all such payments under the Plan will
be subject to applicable withholding for federal, state and local taxes. If a
terminating employee is indebted to the Company or an affiliate of the Company
at his or her termination date, the Company reserves the right to offset any
severance payments under the Plan by the amount of such indebtedness. In no
event shall payment of any Plan benefit be made prior to the Eligible Employee's
termination date or prior to the effective date of the release described in
Section 2(a)(3).

Section 5. Reemployment.

    (a) Repayment. In the event of an Eligible Employee's reemployment by the
Company or an affiliate of the Company during the Severance Period, as defined
below, such Eligible Employee will be required to repay to the Company a
prorated portion of the cash severance pay received under Sections 3(a) and
3(b).

    (b) Definition of "Severance Period." "Severance Period," for purposes of
this Plan, means the number of weeks in respect of which the amount of cash
severance paid to the Eligible Employee under Sections 3(a) and 3(b) was
calculated.

Section 6. Right To Interpret Plan; Amendment and Termination.

    (a) Exclusive Discretion. The Plan Administrator shall have the exclusive
discretion and authority to establish rules, forms, and procedures for the
administration of the Plan and to construe and interpret the Plan and to decide
any and all questions of fact, interpretation, definition, computation or
administration arising in connection with the operation of the Plan, including,
but not limited to, the eligibility to participate in the Plan and amount of
benefits paid under the Plan. The rules, interpretations, computations and other
actions of the Plan Administrator shall be binding and conclusive on all
persons.

    (b) Amendment or Termination. The Company reserves the right to amend or
terminate this Plan or the benefits provided hereunder at any time; provided,
however, that no such amendment or termination shall affect the right to any
unpaid benefit of any Eligible Employee whose termination date has occurred
prior to amendment or termination of the Plan. Any action amending, terminating
or extending the Plan shall be authorized by the Compensation Committee of the
Company's Board of Directors, shall be in writing, and shall be executed by the
Chief Executive Officer, President, Chief Financial Officer or Vice President of
Human Resources of the Company.

Section 7. No Implied Employment Contract.

    The Plan shall not be deemed (i) to give any employee or other person any
right to be retained in the employ of the Company or (ii) to interfere with the
right of the Company to discharge any employee or other person at any time and
for any reason, which right is hereby reserved.

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Section 8. Legal Construction.

    This Plan is intended to be governed by and shall be construed in accordance
with the Employee Retirement Income Security Act of 1974 ("ERISA") and, to the
extent not preempted by ERISA, the laws of the State of California.

Section 9. Claims, Inquiries And Appeals.

    (a) Applications for Benefits and Inquiries. Any application for benefits,
inquiries about the Plan or inquiries about present or future rights under the
Plan must be submitted to the Plan Administrator in writing. The Plan
Administrator is:

Wind River Systems, Inc.
500 Wind River Way
Alameda, CA 94501

    (b) Denial of Claims. In the event that any application for benefits is
denied in whole or in part, the Plan Administrator must notify the applicant, in
writing, of the denial of the application, and of the applicant's right to
review the denial. The written notice of denial will be set forth in a manner
designed to be understood by the employee and will include specific reasons for
the denial, specific references to the Plan provision upon which the denial is
based, a description of any information or material that the Plan Administrator
needs to complete the review and an explanation of the Plan's review procedure.

    This written notice will be given to the employee within ninety (90) days
after the Plan Administrator receives the application, unless special
circumstances require an extension of time, in which case, the Plan
Administrator has up to an additional ninety (90) days for processing the
application. If an extension of time for processing is required, written notice
of the extension will be furnished to the applicant before the end of the
initial ninety (90) day period.

    This notice of extension will describe the special circumstances
necessitating the additional time and the date by which the Plan Administrator
is to render its decision on the application. If written notice of denial of the
application for benefits is not furnished within the specified time, the
application shall be deemed to be denied. The applicant will then be permitted
to appeal the denial in accordance with the Review Procedure described below.

    (c) Request for a Review. Any person (or that person's authorized
representative) for whom an application for benefits is denied (or deemed
denied), in whole or in part, may appeal the denial by submitting a request for
a review to the Plan Administrator within sixty (60) days after the application
is denied (or deemed denied). The Plan Administrator will give the applicant (or
his or her representative) an opportunity to review pertinent documents in
preparing a request for a review. A request for a review shall be in writing and
shall be addressed to:

Wind River Systems, Inc.
500 Wind River Way
Alameda, CA 94501

    A request for review must set forth all of the grounds on which it is based,
all facts in support of the request and any other matters that the applicant
feels are pertinent. The Plan Administrator may require the applicant to submit
additional facts, documents or other material as it may find necessary or
appropriate in making its review.

    (d) Decision on Review. The Plan Administrator will act on each request for
review within sixty (60) days after receipt of the request, unless special
circumstances require an extension of time (not to exceed an additional
sixty (60) days), for processing the request for a review. If an extension for
review is required, written notice of the extension will be furnished to the
applicant within the initial sixty (60) day period. The Plan Administrator will
give prompt, written notice of its decision to the

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applicant. In the event that the Plan Administrator confirms the denial of the
application for benefits in whole or in part, the notice will outline, in a
manner calculated to be understood by the applicant, the specific Plan
provisions upon which the decision is based. If written notice of the Plan
Administrator's decision is not given to the applicant within the time
prescribed in this Subsection (d), the application will be deemed denied on
review.

    (e) Rules and Procedures. The Plan Administrator will establish rules and
procedures, consistent with the Plan and with ERISA, as necessary and
appropriate in carrying out its responsibilities in reviewing benefit claims.
The Plan Administrator may require an applicant who wishes to submit additional
information in connection with an appeal from the denial (or deemed denial) of
benefits to do so at the applicant's own expense.

    (f)  Exhaustion of Remedies. No legal action for benefits under the Plan may
be brought until the claimant (i) has submitted a written application for
benefits in accordance with the procedures described by Section 10(a) above,
(ii) has been notified by the Plan Administrator that the application is denied
(or the application is deemed denied due to the Plan Administrator's failure to
act on it within the established time period), (iii) has filed a written request
for a review of the application in accordance with the appeal procedure
described in Section 10(c) above and (iv) has been notified in writing that the
Plan Administrator has denied the appeal (or the appeal is deemed to be denied
due to the Plan Administrator's failure to take any action on the claim within
the time prescribed by Section 10(d) above).

Section 10. Basis Of Payments To And From Plan.

    All benefits under the Plan shall be paid by the Company. The Plan shall be
unfunded, and benefits hereunder shall be paid only from the general assets of
the Company.

Section 11. Other Plan Information.

    (a) Employer and Plan Identification Numbers. The Employer Identification
Number assigned to the Company (which is the "Plan Sponsor" as that term is used
in ERISA) by the Internal Revenue Service is 94-2873391. The Plan Number
assigned to the Plan by the Plan Sponsor pursuant to the instructions of the
Internal Revenue Service is 563.

    (b) Ending Date for Plan's Fiscal Year. The date of the end of the fiscal
year for the purpose of maintaining the Plan's records is December 31.

    (c) Agent for the Service of Legal Process. The agent for the service of
legal process with respect to the Plan is Wind River Systems, Inc., 500 Wind
River Way, Alameda, CA 94501.

    (d) Plan Sponsor and Administrator. The "Plan Sponsor" and the "Plan
Administrator" of the Plan is Wind River Systems, Inc., 500 Wind River Way,
Alameda, CA 94501. The Plan Sponsor's and Plan Administrator's telephone number
is (800) 545-9463. The Plan Administrator is the named fiduciary charged with
the responsibility for administering the Plan.

Section 12. Statement Of ERISA Rights.

    Participants in this Plan (which is a welfare benefit plan sponsored by Wind
River Systems, Inc.) are entitled to certain rights and protections under ERISA.
If you are an Eligible Employee, you are considered a participant in the Plan
and, under ERISA, you are entitled to:

    (a) Examine, without charge, at the Plan Administrator's office and at other
specified locations, such as work sites, all Plan documents and copies of all
documents filed by the Plan with the U.S. Department of Labor, such as detailed
annual reports;

    (b) Obtain copies of all Plan documents and Plan information upon written
request to the Plan Administrator. The Administrator may make a reasonable
charge for the copies;

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    (c) Receive a summary of the Plan's annual financial report, in the case of
a plan which is required to file an annual financial report with the Department
of Labor. (Generally, all pension plans and welfare plans with one hundred
(100) or more participants must file these annual reports.)

    In addition to creating rights for Plan participants, ERISA imposes duties
upon the people responsible for the operation of the employee benefit plan. The
people who operate the Plan, called "fiduciaries" of the Plan, have a duty to do
so prudently and in the interest of you and other Plan participants and
beneficiaries.

    No one, including your employer or any other person, may fire you or
otherwise discriminate against you in any way to prevent you from obtaining a
Plan benefit or exercising your rights under ERISA. If your claim for a Plan
benefit is denied in whole or in part, you must receive a written explanation of
the reason for the denial. You have the right to have the Plan review and
reconsider your claim.

    Under ERISA, there are steps you can take to enforce the above rights. For
instance, if you request materials from the Plan and do not receive them within
thirty (30) days, you may file suit in a federal court. In such a case, the
court may require the Plan Administrator to provide the materials and pay you up
to $110 a day until you receive the materials, unless the materials were not
sent because of reasons beyond the control of the Plan Administrator. If you
have a claim for benefits that is denied or ignored, in whole or in part, you
may file suit in a state or federal court. If it should happen that the Plan
fiduciaries misuse the Plan's money, or if you are discriminated against for
asserting your rights, you may seek assistance from the U.S. Department of
Labor, or you may file suit in a federal court. The court will decide who should
pay court costs and legal fees. If you are successful, the court may order the
person you have sued to pay these costs and fees. If you lose, the court may
order you to pay these costs and fees, for example, if it finds your claim is
frivolous.

    If you have any questions about the Plan, you should contact the Plan
Administrator. If you have any questions about this statement or about your
rights under ERISA, you should contact the nearest office of the Pension and
Welfare Benefits Administration, U.S. Department of Labor, listed in your
telephone directory or the Division of Technical Assistance and Inquiries,
Pension and Welfare Benefits Administration, U.S. Department of Labor, 200
Constitution Avenue N.W., Washington, D.C. 20210.

Section 13. Execution.

    To record the adoption of the Plan as set forth herein, effective as of
May 16, 2001, Wind River Systems, Inc. has caused its duly authorized officer to
execute the same this 16th day of May, 2001.

    WIND RIVER SYSTEMS, INC.
 
 
By:
 
/s/ Thomas St. Dennis

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Thomas St. Dennis
President and Chief Executive Officer

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For Employees Age 40 or Older
Individual Termination

Exhibit A

RELEASE AGREEMENT

    I understand and agree completely to the terms set forth in the Wind River
Systems, Inc. Vice Presidents' Severance Benefit Plan (the "Plan").

    In consideration of benefits I will receive under the Plan, I hereby
release, acquit and forever discharge Wind River Systems, Inc. (the "Company"),
its parents and subsidiaries, and their respective officers, directors, agents,
servants, employees, shareholders, successors, assigns and affiliates, of and
from any and all claims, liabilities, demands, causes of action, costs,
expenses, attorneys' fees, damages, indemnities and obligations of every kind
and nature, in law, equity, or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed (other than any claim for indemnification
I may have as a result of any third party action against me based on my
employment with the Company), arising out of or in any way related to
agreements, events, acts or conduct at any time prior to and including the date
I execute this Agreement, including but not limited to: all such claims and
demands directly or indirectly arising out of or in any way connected with my
employment with the Company or the termination of that employment, including but
not limited to, claims of intentional and negligent infliction of emotional
distress, any and all tort claims for personal injury, claims or demands related
to salary, bonuses, commissions, stock, stock options, or any other ownership
interests in the Company, vacation pay, fringe benefits, expense reimbursements,
severance pay, or any other form of compensation; claims pursuant to any
federal, state or local law or cause of action including, but not limited to,
the federal Civil Rights Act of 1964, as amended; the federal Age Discrimination
in Employment Act of 1967, as amended ("ADEA"); the federal Americans with
Disabilities Act of 1990; the California Fair Employment and Housing Act, as
amended; tort law; contract law; wrongful discharge; discrimination; fraud;
defamation; emotional distress; and breach of the implied covenant of good faith
and fair dealing.

    I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under ADEA. I also acknowledge that the consideration given
for the waiver and release in the preceding paragraph hereof is in addition to
anything of value to which I was already entitled. I further acknowledge that I
have been advised by this writing, as required by the ADEA, that: (a) my waiver
and release do not apply to any rights or claims that may arise after I execute
this Agreement; (b) I have the right to consult with an attorney prior to
executing this Agreement; (c) I have twenty-one (21) days from the date I
receive this Agreement to consider this Agreement (although I voluntarily may
choose to execute this Agreement earlier); (d) I have seven (7) days following
the execution of this Agreement to revoke the Agreement; and (e) this Agreement
shall not be effective until the later of (i) the date upon which the revocation
period has expired, which shall be the eighth (8th) day after I execute this
Agreement, and (ii) the date I return this Agreement, fully executed, to the
Company.

    I acknowledge that I have read and understand Section 1542 of the California
Civil Code which reads as follows: "A general release does not extend to claims
which the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his
settlement with the debtor." I hereby expressly waive and relinquish all rights
and benefits under that section and any law of any jurisdiction of similar
effect with respect to my release of any claims I may have against the Company,
its affiliates, and the entities and persons specified above.

    EMPLOYEE
 
 
Name:
 

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Date:
 

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For Employees Age 40 or Older
Group Termination

Exhibit B

RELEASE AGREEMENT

    I understand and agree completely to the terms set forth in the Wind River
Systems, Inc. Vice Presidents' Severance Benefit Plan (the "Plan").

    In consideration of benefits I will receive under the Plan, I hereby
release, acquit and forever discharge Wind River Systems, Inc. (the "Company"),
its parents and subsidiaries, and their respective officers, directors, agents,
servants, employees, shareholders, successors, assigns and affiliates, of and
from any and all claims, liabilities, demands, causes of action, costs,
expenses, attorneys' fees, damages, indemnities and obligations of every kind
and nature, in law, equity, or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed (other than any claim for indemnification
I may have as a result of any third party action against me based on my
employment with the Company), arising out of or in any way related to
agreements, events, acts or conduct at any time prior to and including the date
I execute this Agreement, including but not limited to: all such claims and
demands directly or indirectly arising out of or in any way connected with my
employment with the Company or the termination of that employment, including but
not limited to, claims of intentional and negligent infliction of emotional
distress, any and all tort claims for personal injury, claims or demands related
to salary, bonuses, commissions, stock, stock options, or any other ownership
interests in the Company, vacation pay, fringe benefits, expense reimbursements,
severance pay, or any other form of compensation; claims pursuant to any
federal, state or local law or cause of action including, but not limited to,
the federal Civil Rights Act of 1964, as amended; the federal Age Discrimination
in Employment Act of 1967, as amended ("ADEA"); the federal Americans with
Disabilities Act of 1990; the California Fair Employment and Housing Act, as
amended; tort law; contract law; wrongful discharge; discrimination; fraud;
defamation; emotional distress; and breach of the implied covenant of good faith
and fair dealing.

    I acknowledge that I am knowingly and voluntarily waiving and releasing any
rights I may have under ADEA. I also acknowledge that the consideration given
for the waiver and release in the preceding paragraph hereof is in addition to
anything of value to which I was already entitled. I further acknowledge that I
have been advised by this writing, as required by the ADEA, that: (a) my waiver
and release do not apply to any rights or claims that may arise after I execute
this Agreement; (b) I have the right to consult with an attorney prior to
executing this Agreement; (c) I have forty-five (45) days from the date I
receive this Agreement and the information specified in (f) below to consider
this Agreement (although I voluntarily may choose to execute this Agreement
earlier); (d) I have seven (7) days following the execution of this Agreement to
revoke the Agreement; and (e) this Agreement shall not be effective until the
later of (i) the date upon which the revocation period has expired, which shall
be the eighth (8th) day after I execute this Agreement, and (ii) the date I
return this Agreement, fully executed, to the Company; and (f) I have received
with this Agreement a detailed list of the job titles and ages of all employees
who were terminated in this group termination and the ages of all employees of
the Company and its affiliates in the same job classification or organizational
unit who were not terminated.

    I acknowledge that I have read and understand Section 1542 of the California
Civil Code which reads as follows: "A general release does not extend to claims
which the creditor does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have materially affected his
settlement with the debtor." I hereby expressly waive and relinquish all rights
and benefits under that section and any law of any jurisdiction of similar
effect with respect to my release of any claims I may have against the Company,
its affiliates, and the entities and persons specified above.

    EMPLOYEE
 
 
Name:
 

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              Date:  

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For Employees Under Age 40
Individual and Group Termination

Exhibit C

RELEASE AGREEMENT

    I understand and agree completely to the terms set forth in the Wind River
Systems, Inc. Vice Presidents' Severance Benefit Plan (the "Plan").

    In consideration of benefits I will receive under the Plan, I hereby
release, acquit and forever discharge Wind River Systems, Inc. (the "Company"),
its parents and subsidiaries, and their respective officers, directors, agents,
servants, employees, shareholders, successors, assigns and affiliates, of and
from any and all claims, liabilities, demands, causes of action, costs,
expenses, attorneys' fees, damages, indemnities and obligations of every kind
and nature, in law, equity, or otherwise, known and unknown, suspected and
unsuspected, disclosed and undisclosed (other than any claim for indemnification
I may have as a result of any third party action against me based on my
employment with the Company), arising out of or in any way related to
agreements, events, acts or conduct at any time prior to and including the date
I execute this Agreement, including but not limited to: all such claims and
demands directly or indirectly arising out of or in any way connected with my
employment with the Company or the termination of that employment, including but
not limited to, claims of intentional and negligent infliction of emotional
distress, any and all tort claims for personal injury, claims or demands related
to salary, bonuses, commissions, stock, stock options, or any other ownership
interests in the Company, vacation pay, fringe benefits, expense reimbursements,
severance pay, or any other form of compensation; claims pursuant to any
federal, state or local law or cause of action including, but not limited to,
the federal Civil Rights Act of 1964, as amended; the federal Americans with
Disabilities Act of 1990; the California Fair Employment and Housing Act, as
amended; tort law; contract law; wrongful discharge; discrimination; fraud;
defamation; emotional distress; and breach of the implied covenant of good faith
and fair dealing.

    I acknowledge that to become effective, I must sign and return this
Agreement to the Company so that it is received not later than fourteen
(14) days following the date of my employment termination. I acknowledge that I
have read and understand Section 1542 of the California Civil Code which reads
as follows: "A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor." I hereby expressly waive and relinquish all rights and benefits under
that section and any law of any jurisdiction of similar effect with respect to
my release of any claims I may have against the Company, its affiliates, and the
entities and persons specified above.

    EMPLOYEE
 
 
Name:
 

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Date:
 

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APPENDIX A

WIND RIVER SYSTEMS, INC. VICE PRESIDENTS' SEVERANCE BENEFIT PLAN

    Severance benefits provided to Eligible Employees under the Wind River
Systems, Inc. Vice Presidents' Severance Benefit Plan (the "Plan") as of May 16,
2001 are as follows:

(a)Lump Sum Cash Payment. Each Eligible Employee will receive a cash lump sum
payment equal to fifty-two (52) weeks of Base Salary. For purposes of
calculating the foregoing amount, "Base Salary" shall mean the Eligible
Employee's base pay (excluding incentive pay, premium pay, commissions,
overtime, bonuses and other forms of variable compensation), at the rate in
effect during the last regularly scheduled payroll period immediately preceding
the Eligible Employee's termination date. Notwithstanding the foregoing, for
purposes of calculating Plan benefits for an Eligible Employee who is a field
sales commission employee, "Base Salary" shall mean the target earnings at the
rate in effect during the last regularly scheduled payroll period immediately
preceding such Eligible Employee's termination date.

(b)COBRA Continuation Coverage. Each Eligible Employee who is enrolled in a
health, dental, or vision plan sponsored by the Company may be eligible to
continue coverage under such health, dental or vision plan (or to convert to an
individual policy), at the time of the Eligible Employee's termination of
employment, under the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA"). The Company will notify the Eligible Employee of any such right to
continue such coverage at the time of termination pursuant to COBRA ("COBRA
Continuation Coverage"). If COBRA Continuation Coverage is elected, the Company
will pay the first twelve (12) months COBRA Continuation Coverage premium on
behalf of the Eligible Employee, after which the Eligible Employee will be
responsible for the remaining payment of premiums required under COBRA for the
remainder of the period of COBRA Continuation Coverage. No provision of this
Plan will affect the continuation coverage rules under COBRA. Therefore, the
period during which an Eligible Employee may elect whether or not to continue
the Company's group medical, dental or vision coverage under COBRA, the length
of time during which COBRA Continuation Coverage will be made available to the
Eligible Employee, and all other rights and obligations of the Eligible Employee
under COBRA will be applied in the same manner that such rules would apply in
the absence of this Plan.

(c)Other Employee Benefits. All non-health benefits (such as life insurance,
disability insurance and 401(k) plan) will terminate as of the Eligible
Employee's termination date (except to the extent that any conversion privilege
is available under the applicable benefit plan).

(d)Certain Reductions. The Company, in its sole discretion, shall have the
authority to reduce severance benefits provided to Eligible Employees by any
other severance benefits, pay in lieu of notice, or other similar benefits
payable to Eligible Employees by the Company that become payable in connection
with an Eligible Employee's termination of employment pursuant to (a) any
applicable legal requirement, including, without limitation, the Worker
Adjustment and Retraining Notification Act (the "WARN Act"), (b) a written
employment or severance agreement with the Company, or (c) any Company policy or
practice providing for an Eligible Employee to remain on the payroll for a
limited period of time after being given notice of the termination of his or her
employment. The Company shall provide written notification to each Eligible
Employee to whom such reductions apply. The Company's decision to apply such
reductions to the severance benefits of one Eligible Employee and the amount of
such reductions shall in no way obligate the Company to apply the same
reductions in the same amounts to the severance benefits of any other Eligible
Employee, even if similarly situated.

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    The foregoing severance benefits are subject to such change as the Company,
pursuant to Section 3(a) of the Plan, may determine. Any such change in
severance benefits shall be set forth in a revised version of this Appendix A.

    Adopted: May 16, 2001    

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WIND RIVER SYSTEMS, INC.    

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By:
 
/s/ Thomas St. Dennis

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Thomas St. Dennis
President and Chief Executive Officer

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Exhibit 10.40

WIND RIVER SYSTEMS, INC. VICE PRESIDENTS' SEVERANCE BENEFIT PLAN
Exhibit A RELEASE AGREEMENT
Exhibit B RELEASE AGREEMENT
Exhibit C RELEASE AGREEMENT
APPENDIX A WIND RIVER SYSTEMS, INC. VICE PRESIDENTS' SEVERANCE BENEFIT PLAN