Exhibit 10.88

 

LOGO [g13536image001.jpg]    Borland    831-431-1000    100 Enterprise way   
Fax: 831-431-4113    Scotts Valley, CA 95066-3249    www.borland.com

July 5, 2006

Michael Sullivan

[Address omitted]

RE: Employment Terms

Dear Mike,

On behalf of Borland Software Corporation (“Borland”), I am pleased to promote
you to the position of Principal Accounting Officer reporting to Tod Nielsen.
This letter sets out the terms of your employment with Borland. This offer is
contingent upon successful completion of an employee background check.

From July 5, 2006, in consideration for your service to Borland, you will be
paid a base salary of $7,692.31 every two weeks (which equals $200,000.00 per
year), less applicable taxes and other withholdings in accordance with Borland’s
standard payroll practices. In addition, you will be eligible to participate in
various Borland fringe benefit plans, including: Group Health Insurance. For the
duration of your assignment in the role of Principal Accounting Officer you will
be covered by Borland’s Director and Officer Policy. Borland reserves the right
to modify employee benefit plans and policies, as it deems necessary.

In addition, Borland considers you to be a key person and wants to ensure your
commitment to the organization. As such, you will also be eligible to earn a
retention bonus of $150,000.00 (the “Retention Bonus”). To earn the Retention
Bonus you must be (a) an employee in good standing with Borland through
October 19, 2006 and (b) complete the goals and objectives (the “Criteria”)
established by Borland’s President and Chief Executive Officer (“CEO”) in
consultation with you. If the CEO reasonably determines that such Criteria have
been met, the Retention Bonus will be deemed earned. However, if you voluntarily
resign from your position or if your employment is terminated for “cause”1 prior
to earning the Retention Bonus, as set forth above, you will not be entitled to
any part of the Retention Bonus. In the event that Borland terminates your
employment without Cause before October 19, 2006, the Retention Bonus will be
considered earned and therefore you will be paid the full retention bonus of
$150,000.00. Once earned, the Retention Bonus will be paid in the next practical
payroll run. The Retention Bonus is subject to all applicable withholdings and
deductions as reasonably determined by the Borland payroll department.

 

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1 For purposes of this Agreement, termination for “cause” shall mean termination
of your employment relationship with Borland for any of the following reasons:
(i) theft, embezzlement, misconduct, misappropriation of funds or property, or
fraud against, or with respect to the business of Borland; (ii) breach by you of
any material term of any agreement between you and Borland, if such breach is
capable of being cured, the failure by you to cure such breach within ten
(10) business days of written notice of such breach; (iii) your conviction of
any crime that impairs your performance of duties for Borland; (iv) as a result
of your reckless or willful misconduct, you commit any act that causes, or
knowingly fails to take reasonable and appropriate action to prevent, any
material injury to the financial condition or business reputation of Borland or
(v) after written notice to you, and a reasonable opportunity to correct, your
failure or inability to perform any of your assigned duties for Borland.

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Pursuant to the Segue Software, Inc. (“Segue”) Special Termination and Vesting
Plan, (“the Plan”), the Change of Control provision will remain in effect in
accordance with the Plan. Specifically, in the event of a Terminating Event (as
defined in Segue Software Inc.’s Special Termination and Vesting Plan) if you
are terminated from your employment with Borland, within one (1) year of the
Change of Control (defined herein as April 19, 2006, the date of Borland’s
acquisition of Segue), notwithstanding anything to the contrary contained in
Segue’s Amended and Restated Incentive and Non-qualified Stock Option Plan, any
option agreement granted under the Segue Option Plan or any other agreements
between Segue and covered employee pursuant to which options to purchase shares
of Stock of Segue have been granted (including, without limitation, the
definition of “cause” contained therein), upon such Terminating Event, you shall
be entitled to payment of the Unvested Option Consideration (as that term is
defined in Section 2.9(a) of the Agreement and Plan of Merger by and among
Borland Software Corporation, Beta Merger Sub, Inc. and Segue Software, Inc.
dated as of February 7, 2006) with respect to the number of your unvested Segue
Stock Options that would have become vested and exercisable as of the effective
date of such Terminating Event. Nothing in this paragraph is intended to give
you a Change of Control Plan for any Borland stock options you have been granted
or may be granted in the future.

Upon termination of your employment, you will be eligible for a severance
package under the terms and conditions of the Plan (except as modified by this
agreement). Pursuant to and in accordance with the Terminating Event benefits
set forth in the Plan, you will be eligible for twelve (12) months of base
salary (calculated at a base salary of $175,000) and twelve (12) months of COBRA
benefits provided your employment ends within one year of the Change in Control
(April 19, 2006). In addition to the severance under the Plan but consistent
with the terms and conditions of such Plan, you will also be eligible for an
additional four (4) months of base salary (calculated at a base salary of
$200,000) as severance. Borland will also arrange to provide you with
outplacement services as well, to assist you in searching for new employment.
Please note that receipt of severance benefits is conditioned upon signing a
standard release agreement acceptable to Borland. All severance payments will be
subject to tax withholding and deductions per standard Borland payroll policy,
and they will be paid in one lump sum within one (1) week of the effective date
of your signed release.

In the event Borland reasonably determines that any payments or other
compensation to you under this agreement, the Plan, or a written employee
benefit plan subject to ERISA, fail to satisfy the distribution requirement of
Section 409A(a)(2)(A) of the Internal Revenue Code (the “Code”) as a result of
Section 409A(a)(2)(B)(i) of the Code, then the payment of such benefits shall
not be made pursuant to the payment schedules provided herein and instead the
payment of such benefits shall be delayed or otherwise restructured to the
minimum extent necessary so that such benefits are not subject to the provisions
of Section 409A(a)(1) of the Code.

Despite the Retention Bonus opportunity, your employment with Borland is “at
will”; it is for no specified term, and may be terminated by you or Borland at
any time, with or without cause or advance notice. Any contrary representations
that may have been made to you are superseded by this offer. This is the full
and complete agreement between you and Borland on the terms and conditions of
your employment. The “at will” nature of your employment may only be changed in
an express written agreement signed by you and Borland’s President and CEO.

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By accepting employment with Borland, you represent that you will not be acting
in breach of any agreement with any of your previous employers. Should you
accept this offer, I would like to remind you that it is Borland’s policy to
avoid situations where information or materials might come into our hands that
are considered proprietary by individuals or companies other than Borland. We
are interested in employing you because of your skills and abilities, not
because of any trade secrets you have learned elsewhere. You represent and
warrant that you are not acting in breach of any non-competition, employment or
other agreements with any of your previous employers.

You understand that Borland may provide you with one or more types of equipment
to help you perform your duties for Borland, including, but not limited to,
computers, cellular telephones and wireless messaging devices. You further
understand that it is your obligation to take proper care of all such equipment
during your employment, and to return such equipment to Borland in good working
order immediately upon the termination of your employment with Borland for any
reason. If you fail to return any such equipment to Borland upon the termination
of your employment, you hereby authorize Borland to deduct the cost of any
unreturned equipment from your final paycheck.

Like all Borland employees, you will be required, as a condition to your
employment with Borland, to sign Borland’s standard Employee Confidentiality and
Assignment of Inventions Agreement, a copy of which is included with this
letter.

To ensure the timely and economical resolution of disputes that arise in
connection with your employment with Borland, you and Borland agree that any and
all disputes, claims, or causes of action (collectively, “Claims”) arising from
or relating to the enforcement, breach, performance or interpretation of this
Agreement, your employment, or the termination of your employment (including,
but not limited to, any Claims for compensation, benefits, stock or stock
options, fraud or age, sex, race, disability or other discrimination or
harassment), shall be resolved to the fullest extent permitted by law by final,
binding and confidential arbitration, by a single arbitrator, in Santa Clara
County, California, conducted by Judicial Arbitration and Mediation Services,
Inc. (“JAMS”) under the applicable JAMS employment rules, or other arbitrator or
arbitration rules to which you and Borland mutually agree. To determine the
resolution of any disputes, as described above, the laws of the State where you
reside shall apply. By agreeing to this arbitration procedure, both you and
Borland waive the right to resolve any such dispute through a trial by jury or
judge or administrative proceeding. The arbitrator shall: (a) have the authority
to compel adequate discovery for the resolution of the dispute and to award such
relief as would otherwise be permitted by law; and (b) issue a written
arbitration decision, to include the arbitrator’s essential findings and
conclusions and a statement of the award. The arbitrator shall be authorized to
award any or all remedies that you or Borland would be entitled to seek in a
court of law. Borland shall pay all arbitrator and arbitration administrative
fees in excess of the amount of court fees that would be required if the dispute
were decided in a court of law. Nothing in this Agreement is intended to prevent
either you or Borland from obtaining injunctive relief in court to prevent
irreparable harm pending the conclusion of any such arbitration.

With the exception of any agreement with Segue Software, Inc. pertaining to
proprietary, trade secret or other confidential information and/or the ownership
of inventions or non-competes, which shall remain in full force and effect and
is unaffected by this Agreement, this agreement and the other agreements
referred to above constitute the entire agreement between you and Borland
regarding the terms and conditions of your employment, and they supersede all
prior negotiations, representations or agreements, whether oral or written,
between you and Borland. This agreement may only be modified by a document
signed by you and the Senior Vice President of Human Resources of Borland.

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We look forward to working with you at Borland. Please sign and date this letter
on the spaces provided below to acknowledge your acceptance of the terms of this
offer.

 

  Sincerely,  

 

Borland Software Corporation

 

By:

 

/s/ Jonathan Schoonmaker

  Jonathan Schoonmaker   Senior Vice President, Human Resources

I have read the above employment offer and accept employment with Borland on the
terms and conditions set forth in this agreement.

 

Date: July 5, 2006  

    /s/ Michael Sullivan        

 

  Michael Sullivan