Exhibit 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
     THIS EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made as of the
5th day of December 2011, between Progress Software Corporation, a Massachusetts
corporation (the “Company”) and Jay H. Bhatt, an individual residing at 27
Appleby Road, Wellesley, Massachusetts 02482 (the “Executive”).
R E C I T A L S
     A. The Company wishes to employ Executive, and Executive wishes to be
employed by the Company.
     B. The Board of Directors of the Company (the “Board”) has determined that
it is in the best interest of the Company and its stockholders to enter into
this Agreement setting forth the terms and conditions of Executive’s employment
with the Company.
     C. Executive accepts the terms of the Agreement.
     D. Certain capitalized terms used in this Agreement are defined in
Section 9 below.
     In consideration of the mutual covenants herein contained and in
consideration of the continuing employment of Executive by the Company, the
parties agree as follows:
     1. Duties and Scope of Employment.
          (a) Position and Duties. Effective December 5, 2011 (the “Commencement
Date”), the Company will employ Executive as President and Chief Executive
Officer of the Company, reporting directly to the Board. Executive will render
such business and professional services in the performance of his duties
commensurate with his title and position, as are reasonably assigned to him by
the Board. The period of Executive’s employment under this Agreement is referred
to herein as the “Employment Period.”
          (b) Board Membership. At the first regularly scheduled Board meeting
which follows the Commencement Date, Executive will be elected by the Board to
serve as a member of the Board. During the Employment Period, Executive will be
considered as a candidate for re-election at each annual meeting of the
Company’s stockholders.
          (c) Obligations. During the Employment Period, Executive will devote
Executive’s full business time and best efforts to the business of the Company.
Executive will at all times comply with the Company’s Code of Conduct. During
the Employment Period, Executive will not engage in any employment, occupation,
consulting or other similar activity without the Board’s prior written consent;
provided, however, that Executive may (i) serve in any capacity (consistent with
position and duties) with any professional, community, industry, civic
(including governmental boards), educational, charitable, or other non-profit
organization, (ii) serve on any for-profit entity board, with the Board’s prior
written consent, and (iii) subject

 

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to the Company’s Code of Conduct, make investments in other businesses and
manage Executive’s and Executive’s family’s personal investments and legal
affairs;provided that any such activities described in clauses (i)-(iii) above
do not interfere with the performance of Executive’s duties for the Company and
do not otherwise violate this Agreement or any other written agreement between
the Company and Executive.
     2. At-Will Employment. Executive and the Company agree that Executive’s
employment with the Company constitutes “at-will” employment. Executive and the
Company acknowledge that this employment relationship may be terminated at any
time, upon written notice to the other party, with or without good cause or for
any or no cause, at the option either of the Company or Executive. However, as
described in this Agreement, Executive shall be entitled to severance benefits
in accordance with the terms of this Agreement.
          (a) Notice of Termination. In the case of termination of Executive’s
employment by the Company for any reason, such termination may be effective
immediately or upon such future date as may specified by the Company. In the
case of Executive’s voluntary resignation (which is not an Involuntary
Termination), Executive shall provide the Company with not less than 90 days’
prior notice, which may be waived by the Company in its sole discretion (in
which case the voluntary resignation shall be effective immediately or upon a
date specified by the Company), provided that the Company shall pay and provide
Executive his continued salary and employee benefits during any such waived
period, but Executive’s unvested equity awards shall not continue to vest, and
the exercise periods of those awards shall not be extended, by the continuation
of such payments and benefits. In the case of an Involuntary Termination,
Executive’s employment with the Company shall terminate on the 31st day
following notice from Executive under Section 10(c)(ii) below (which may be
accelerated by the Company in its sole discretion to the date that such notice
is given).
          (b) Other Offices Held. Executive agrees to resign from all positions
that he holds with the Company or any affiliate, including, without limitation,
his positions as an officer or director of the Company or of any affiliate of
the Company and as a member of the Board, immediately following the termination
of his employment if the Company so requests. Executive hereby irrevocably
appoints the Company to be his attorney-in-fact to execute such documents and to
take such actions in his name and on his behalf that may be necessary to effect
Executive’s resignation and removal as a director and officer of the Company or
any affiliate, should Executive fail to resign following a request from the
Company to do so. A written notification signed by a director or duly authorized
officer of the Company that any instrument, document or act falls within the
appointment of authority conferred by this paragraph (b) will be conclusive
evidence that it does so. The Company will prepare any documents, pay any filing
fees, and bear any other expenses related to this paragraph.
     3. Compensation.
          (a) Base Salary. During the Employment Period, Executive will be paid
an annual salary of $700,000.00 as compensation for his services (the “Base
Salary”), payable on regular pay dates of the Company and subject to applicable
employment tax, income tax and

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other customary withholdings. The Board or the Compensation Committee of the
Board will review the Base Salary no less frequently than annually, with the
first review expected to occur with respect to fiscal year 2013. The Board or
the Compensation Committee of the Board may increase, but shall not decrease,
Executive’s Base Salary and if adjusted, such adjusted amount will become the
Base Salary for all purposes under this Agreement.
          (b) Annual Bonus. Executive will be entitled to participate in the
Company’s Executive and Key Contributor Bonus program at an annual (fiscal year)
target bonus of 150% of Base Salary (the “Target Bonus”). Executive’s fiscal
year 2012 Target Bonus will be payable upon achievement of performance goals to
be established in good faith by the Compensation Committee of the Board (the
“Committee”). Executive will have the opportunity to discuss such performance
goals with the Committee prior to such goals being established. Bonuses, if any,
will accrue and become payable in accordance with the Committee’s standard
practices for paying executive incentive compensation; provided, that any bonus
payable under this Section 3(b) will be earned on the last day of the Company’s
fiscal year to which it relates and will be paid within sixty (60) days after
the end of such fiscal year.
          (c) Equity Compensation. Subject to the Committee’s approval, on or as
soon as administratively practicable following the Commencement Date, Executive
will be granted a new hire equity award consisting of 900,000 stock options
(“New Hire Option Award”) and 200,000 restricted stock units (“New Hire RSU
Award”).
               (i) New Hire Option Award. The New Hire Option Award will have an
exercise price equal to the closing price of the Company’s common stock on the
NASDAQ Global Stock Market on the date of grant. Subject to continued
employment, the New Hire Option Award will vest monthly over four years
commencing on the date of grant, with vesting beginning six months after the
Commencement Date (with 12.5% of the award being vested in the first installment
on the six (6) month anniversary, and the remainder vesting in 42 equal monthly
installments). The New Hire Option Award will otherwise be subject to the
Company’s then standard terms and conditions for executive stock option grants,
except as otherwise provided in this Agreement or in the ERMA (as defined
below).
               (ii) New Hire RSU Award. Subject to continued employment, the New
Hire RSU Award will vest in accordance with the following schedule: 50,000
restricted stock units will vest on April 1, 2012 and 50,000 restricted stock
units will vest on October 1, 2012. The remaining 100,000 restricted stock units
will vest semi-annually over the subsequent two years. The New Hire RSU Award
will otherwise be subject to the Company’s then standard terms and conditions
for executive restricted stock unit awards, except as otherwise provided in this
Agreement or in the ERMA.
               (iii) Future Equity Awards. Executive shall be eligible for
additional future equity awards as customarily granted to executive officers
beginning in fiscal year 2013, determined in the sole discretion of the
Committee. Such awards if any will be granted at the same time as annual awards
are granted to other senior executives of the Company, but in no

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event later than the first meeting of the Board of Directors that follows the
annual shareholder meeting each year.
     4. Employee Benefits; Vacation. During the Employment Period, Executive
will be eligible to participate in all Company employee benefit plans, policies,
and arrangements that are applicable to other senior executives of the Company,
as such plans, policies, and arrangements may be in effect from time to time,
and subject to the terms thereof. Executive will be entitled to vacation in
accordance with the standard written policies of the Company.
     5. Expenses. The Company will reimburse Executive for reasonable travel,
entertainment, and other business expenses incurred by Executive in the
furtherance of the performance of Executive’s duties hereunder, in accordance
with the Company’s expense reimbursement policy as in effect from time to time.
     6. Indemnification. The Company agrees that if Executive is made a party,
or is threatened to be made a party or witness, to any action, suit or
proceeding, whether civil, criminal, administrative or investigative (a
“Proceeding”), by reason of the fact that Executive is or was a director,
officer or employee of the Company or is or was serving at the request of the
Company as a director, officer, member, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, including
service with respect to Company benefit plans, whether or not the basis of such
Proceeding is Executive’s alleged action in an official capacity while serving
as a director, officer, member, employee or agent, Executive will be indemnified
and held harmless by the Company to the fullest extent legally permitted or
authorized by the Company’s articles of organization or bylaws or resolutions of
the Board, or by the laws of the Commonwealth of Massachusetts, against all
costs, expenses, liabilities and losses (including attorneys’ fees, judgments,
fines, excise taxes under the Employee Retirement Income Security Act of 1974 or
the Internal Revenue Code of 1986, as amended (the “Code”), or penalties and
amounts paid or to be paid in settlement) incurred or suffered by Executive in
connection therewith, and such indemnification will continue as to Executive
even if Executive has ceased to be a director, officer, member, employee or
agent of the Company or other entity and will inure to the benefit of
Executive’s heirs, successors, personal representatives, assigns, executors and
administrators. The Company shall cause Executive to be designated as a “Covered
Person” under the Company’s Directors and Officers Liability Insurance Policy
for actions taken during the Employment Period.
     7. Severance. Simultaneously with the execution of this Agreement,
Executive and the Company are also entering into an Employee Retention and
Motivation Agreement (the “ERMA”), which provides Executive with certain
benefits upon a “Change of Control” (as defined therein). Section 8(b) below
shall be applicable in the event an Involuntary Termination (as defined below)
occurs under circumstances other than those circumstances under which the ERMA
shall be applicable. In the event an Involuntary Termination occurs during the
term of this Agreement in circumstances under which the ERMA shall be
applicable, any and all severance and other separation benefits to be paid to
Executive shall be governed by the terms and conditions of the ERMA and not
Section 8(b) below.

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     8. Termination Benefits; Severance.
          (a) If the Executive’s employment is terminated by the Company or the
Executive for any reason or no reason (except as stated in (iii) below), then
the Executive shall be entitled to the following:
               (i) All accrued but unpaid Base Salary through the Termination
Date, to be paid in a lump sum cash payment within thirty (30) days following
the Termination Date or sooner if required by law;
               (ii) Pay for any vacation time earned but not used through the
Termination Date, to be paid in a lump sum cash payment within thirty (30) days
following the Termination Date or sooner if required by law;
               (iii) Except in the event that Executive’s employment is
terminated for Cause, any bonus compensation awarded for the fiscal year
preceding that in which the termination occurs, but unpaid on the Termination
Date, to be paid and provided in accordance with Section 3(b) above;
               (iv) Any unpaid or unreimbursed business expenses incurred and
documented in accordance with the Company’s expense reimbursement policy then in
effect by the Executive, to the extent incurred during the Employment Period, to
be paid in a lump sum cash payment within thirty (30) days following the
Termination Date; and
               (v) Any accrued but unpaid benefits provided under the Company’s
employee benefit plans, to be paid and provided in accordance with the terms of
the applicable plan.
          (b) Involuntary Termination. Subject to Section 7 above, if
Executive’s employment is terminated as a result of an Involuntary Termination
and such termination also constitutes a “separation from service” within the
meaning of Section 409A of the Code, then Executive shall be entitled to the
following:
               (i) For a period of twelve (12) months after the Termination
Date, the Company will pay an amount equal to Executive’s total Target
Compensation in equal installments over such 12 months in accordance with the
Company’s normal payroll practices and procedures and subject to all applicable
deductions and withholdings. Such payments shall commence on the first payroll
date that occurs thirty (30) days or more after the Termination Date. Solely for
purposes of Section 409A of the Code, each installment payment is considered a
separate payment.
               (ii) For a period of twelve (12) months after the Termination
Date, the Company shall be obligated to provide Executive with benefits that are
substantially equivalent to Executive’s benefits (medical, dental, vision and
life insurance) that were in effect immediately prior to the Involuntary
Termination.

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               (iii) All unvested stock options held by Executive which were
granted prior to the Termination Date under the Company’s stock option or equity
incentive plans which would otherwise vest and become fully exercisable during
the twelve month period following the Termination Date shall instead accelerate
and become fully exercisable as of the Termination Date.
               (iv) All shares of restricted equity held by Executive which were
granted prior to the Termination Date under the Company’s stock option or equity
incentive plans which would otherwise become nonforfeitable and not subject to
any restrictions during the twelve month period following the Termination Date
shall instead become nonforfeitable and not subject to any restrictions as of
the Termination Date.
               (v) Notwithstanding the foregoing, in the event of an Involuntary
Termination within the twelve months immediately following the Commencement
Date, the references to “twelve (12)” in Sections 8(b)(i)-(iv) inclusive shall
be replaced with “twenty-four (24).”
          Anything in this Agreement to the contrary notwithstanding, if, during
the Employment Period, the Company shall maintain a severance plan then
applicable to members of the Company’s Executive Committee providing severance
benefits greater than those provided in this Section 8(b) with respect to an
Involuntary Termination, then Executive shall be entitled to such greater
severance benefits; provided, however, that this clause shall not apply to any
executive separation agreements between the Company and members of the Company’s
Executive Committee in effect as of the date of this Agreement.
               (vi) Anything in this Agreement to the contrary notwithstanding,
if at the time of Executive’s separation from service (within the meaning of
Section 409A of the Code), Executive is considered a “specified employee” within
the meaning of Section 409A(a)(2)(B)(i) of the Code, and if any payment that
Executive becomes entitled to under this Agreement is considered deferred
compensation subject to interest and additional tax imposed pursuant to
Section 409A(a) of the Code as a result of the application of
Section 409A(a)(2)(B)(i) of the Code, then no such payment shall be payable
prior to the date that is the earliest of (A) six months after Executive’s
“separation from service” (within the meaning of Section 409A of the Code),
(B) Executive’s death, or (C) such other date as will cause such payment not to
be subject to such interest and additional tax. If any such delayed cash payment
is otherwise payable on an installment basis, the first payment shall include a
catch-up payment covering amounts that would otherwise have been paid during the
six-month period but for the application of this provision, and the balance of
the installments shall be payable in accordance with their original schedule.
The parties agree that this Agreement may be amended, as reasonably requested by
either party and as may be necessary to comply fully with Section 409A of the
Code and all related rules and regulations in order to preserve the payments and
benefits provided hereunder without additional cost to either party.
          (c) Voluntary Resignation. If Executive’s employment terminates by
reason of Executive’s voluntary resignation (which is not an Involuntary
Termination), then Executive

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shall not be entitled to receive any severance payments or other benefits except
for such benefits (if any) as specified in Section 8(a) above or as specifically
required by applicable law, and the Company shall have no obligation to provide
for the continuation of any health and medical benefit or life insurance plans
in effect on the date of such termination, other than as specifically required
by applicable law.
          (d) Disability; Death. If the Company terminates Executive’s
employment as a result of Executive’s Disability, or Executive’s employment is
terminated due to the death of Executive, then Executive shall not be entitled
to receive any severance payments or other benefits except for those (if any) as
may then be established under the Company’s severance guidelines and benefit
plans in effect at the time of such Disability or death.
          (e) Termination for Cause. If the Company terminates Executive’s
employment for Cause, then Executive shall not be entitled to receive any
severance payments, bonus payments, or other benefits following the date of such
termination, other than such payments and benefits as specified in Section 8(a)
above or as specifically required by applicable law, and the Company shall have
no obligation to provide for the continuation of any health and medical benefit
or life insurance plans in effect on the date of such termination, other than as
specifically required by applicable law.
     9. Definition of Terms. The following terms referred to in this Agreement
shall have the following meanings:
          (a) Cause “Cause” shall mean (i) any act of personal dishonesty taken
by the Executive in connection with his responsibilities as an employee and
intended to result in substantial personal enrichment of the Executive; (ii) the
conviction of a felony; (iii) a willful act by the Executive which constitutes
gross misconduct and which is injurious to the Company; (iv) material breach of
a material provision of this Agreement or of the Proprietary Information
Agreement (which is not cured within 30 days following notice); or (v) continued
violations by Executive of his obligations as an employee of the Company which
are demonstrably willful and deliberate on the Executive’s part after there has
been delivered to Executive a written demand for performance from the Company
which describes the basis for Company’s belief that Executive has not
substantially performed his duties.
          (b) Disability. “Disability” shall mean that Executive has been unable
to perform his duties as an employee of the Company as the result of incapacity
due to physical or mental illness, and such inability, at least twenty-six
(26) weeks after its commencement, is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to Executive or
Executive’s legal representative (such agreement as to acceptability not to be
unreasonably withheld). Termination resulting from Disability may only be
effected after at least thirty (30) days’ written notice by the Company of its
intention to terminate Executive’s employment. In the event that Executive
resumes the performance of substantially all of his duties as an employee of the
Company before termination of his employment becomes effective, the notice of
intent to terminate shall automatically be deemed to have been revoked.

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          (c) Involuntary Termination “Involuntary Termination” shall mean that
either (i) that the Company has terminated Executive’s employment other than for
Cause, Disability or Executive’s death, or (ii) that the conditions set forth in
of subsections (i), (ii) and (iii) below have all occurred:
               (i) Any of the following “Events” occurs without Executive’s
prior written consent during the term of this Agreement:

  (A)   the (x) assignment to Executive of any duties or the significant
reduction of Executive’s duties, either of which is materially inconsistent with
Executive’s position with the Company and responsibilities in effect immediately
prior to such assignment, or (y) the removal of Executive from such position and
responsibilities, which is not effected for Disability or for Cause (for the
avoidance of doubt, the failure of Executive to be nominated or elected as a
member of the Board shall be a material diminution in responsibilities);     (B)
  a material reduction by the Company in the Base Salary and/or Target Bonus of
Executive as in effect immediately prior to such reduction;     (C)   the
relocation of Executive to a facility or a location more than fifty (50) miles
from Executive’s then present location, without Executive’s express written
consent;     (D)   any purported termination of Executive by the Company which
is not effected for death or disability or for Cause, or any purported
termination for Cause for which the grounds relied upon are not valid; or    
(E)   A material breach of this Agreement by the Company.

               (ii) Within sixty (60) days after the first occurrence of an
Event described in Sections 9(c)(i)(A)(y), (B), (C) or (D) or within 120 days of
an Event described in Sections 9(c)(i)(A)(x) or (E), Executive provides written
notice to the Company describing with reasonable specificity the Event and
stating his intention to resign from employment due to such Event; and
               (iii) Either the Company does not cure, or cause to be cured,
such Event within thirty (30) days after receipt of Executive’s notice or the
Company in its sole discretion concedes the occurrence of such Event and gives
notice that it does not intend to cure such Event.

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          (d) Target Compensation. “Target Compensation” shall mean the sum of
Executive’s Base Salary and Target Bonus.
          (e) Termination Date. “Termination Date” shall mean the date
Executive’s employment with the Company terminates.
     10. Conditions to Receipt of Severance. The Company’s obligation to pay any
severance pursuant to Section 8(b) will be subject to the performance by
Executive of his obligations as follows:
          (a) Separation Agreement and Release of Claims. Executive shall sign
and return to the Company (without revoking) a separation agreement and release
of claims, the form of which shall agreed upon by the parties within thirty
(30) days of the Commencement Date, by the deadline specified therein, which
shall in all events be no later than the thirtieth (30th) day following the
Termination Date. Such agreement will provide (among other things) that
Executive will not disparage the Company, its directors, or its executive
officers during the Restricted Period (as defined below). The Company will have
no obligation to make any payment under Section 8(b) or otherwise except as
specifically required by law until it has received an effective separation and
release of claims agreement, and the return of all Company property under
Section 10(b).
          (b) Return and Protection of Company Property. Executive shall return
to the Company all Company documents and property no later than five (5) days
after the Termination Date, and he shall abide by the terms of the Employee
Proprietary Information and Confidentiality Agreement being entered into by the
Company and Executive simultaneously with the execution of this Agreement (the
“Proprietary Information Agreement”).
          (c) Cooperation. Executive shall make himself available to the Company
after the Termination Date and through the end of the period with respect to
which severance is paid or payable either by telephone or in person upon
reasonable notice and with reasonable accommodation to Executive’s personal and
business affairs, to assist the Company in connection with any matter relating
to services performed by Executive on behalf of the Company prior to the
Termination Date. Executive, also upon reasonable notice and with reasonable
accommodation to his personal and business affairs, further agrees to reasonably
cooperate with the Company in the defense or prosecution of any claims or
actions now in existence or which may be brought or threatened in the future
against or on behalf of the Company, its directors, shareholders, officers, or
employees and which relates to the aforesaid services, including without
limitation, by meeting with the Company’s counsel and appearing to testify
truthfully in any proceeding without the necessity of a subpoena. The Company
shall reimburse Executive for his reasonable documented expenses incurred in
connection with such cooperation. Notwithstanding the aforesaid, Executive’s
obligations set forth above shall not apply to any proceeding in which
Executive’s interests are adverse to those of the Company. Reimbursements of
expenses shall be paid within thirty (30) days of the Company’s receipt of an
invoice from Executive or his designee for the same. Any reimbursement in one
calendar year shall not affect the amount that may be reimbursed in any other
calendar year and a

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reimbursement (or right thereto) may not be exchanged or liquidated for another
benefit or payment. Any business expense reimbursements subject to Section 409A
of the Code shall be made no later than the end of the calendar year following
the calendar year in which such business expense is incurred by Executive.
Executive shall submit any such expense requests in a sufficiently timely manner
so as to permit the Company to comply with the previous sentence.
          (d) Non-Competition.
               (i) Executive recognizes the highly competitive nature of the
Company’s business and that Executive’s position with the Company and access to
and use of the Company’s confidential records and proprietary information
renders Executive special and unique. Executive hereby agrees that for a period
of twelve (12) months from the Termination Date (the “Restricted Period”), he
shall not, directly or indirectly, own, manage, operate, join, control,
participate in, invest in or otherwise be connected or associated with, in any
manner, including as an officer, director, employee, independent contractor,
stockholder, member, partner, consultant, advisor, agent, proprietor, trustee or
investor, any Competing Business (as defined below); provided, however, that (i)
ownership of two percent (2%) or less of the stock or other securities of a
publicly traded corporation and (ii) passive ownership of less than a five
percent (5%) interest as a limited partner of a venture capital fund, private
equity fund or similar investment vehicle or ownership of shares in a mutual
fund shall not constitute a breach of this Section, in each case under this
clause (ii), with respect to which Executive has no role in the review,
selection or management of any investments. For purposes hereof, the term,
“Competing Business,” shall mean IBM/WebSphere Unit, Tibco, Informatica,
Software AG and Oracle and, in each case, their respective subsidiaries.
               (ii) Executive acknowledges that the business of the Company is
worldwide in scope and therefore understands and agrees that there is no
geographic limitation on the scope of this Section 10(d). Executive further
agrees that the nature of the Company’s confidential information and the
goodwill relationship that were developed for the Company during Executive’s
employment support the continuation of the restrictions pursuant to this Section
for twelve (12) months. Notwithstanding the foregoing, if a court determines
that the geographic scope of this Section or the length of the Restricted Period
is excessive, the parties agree that this Section should be enforced to the
maximum extent that the court determines to be permissible.
               (iii) The parties agree that, throughout his employment with the
Company, Executive has been obligated to render personal services of a special,
unique, unusual, extraordinary and intellectual character, thereby giving this
Agreement special value, and, in the event of a breach of the covenants of
Executive in this Section 10, the injury or imminent injury to the value and the
goodwill of the Company’s business could not be reasonably or adequately
compensated in damages in an action at law. Accordingly, Executive acknowledges
that, in addition to any other remedies that may be awarded, the Company shall
be entitled to receive specific performance, injunctive relief or any other
equitable remedy

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against Executive, without the posting of a bond, in the event of any breach of
any provision of this Agreement by Executive. In addition, in the event
Executive breaches this Section 10 of this Agreement, such breach will entitle
the Company, without posting of a bond, to an injunction prohibiting Executive
from violating the terms of this Section 10.
               (iv) Notwithstanding the foregoing, in the event of an
Involuntary Termination within the twelve months immediately following the
Commencement Date, the references to “twelve (12)” in this Section 10(d) shall
be replaced with “twenty-four (24)”.
          (e) Breach of Obligations. Anything to the contrary contained herein
notwithstanding, but except solely as specifically required by applicable law,
in the event that Executive materially breaches the separation agreement and
release of claims or the Proprietary Information Agreement or Executive’s
obligations under Section 10(a), (b) or (d) above, the Company: (i) shall have
no obligations to make any further payments under Section 8(b) above, or to
otherwise pay any severance or benefits otherwise owed under this Agreement
following the termination of Executive’s employment (and all such obligations
shall be terminated), and (ii) shall have the full and unfettered right to
recover from Executive all payments that may have been made under Section 8(b)
above, and all severance or severance benefits otherwise paid under this
Agreement following the termination of Executive’s employment. The termination
under this paragraph of the Company’s payment obligations or its recovery of
amounts paid shall have no effect on Executive’s continuing obligations under
this Agreement, including without limitation Executive’s obligations under
Section 10(a), (b) and (d) above.
     11. Successors.
          (a) Company’s Successors. Any successor to the Company (whether direct
or indirect and whether by purchase, lease, merger, consolidation, liquidation
or otherwise) or to all or substantially all of the Company’s business and/or
assets shall assume the obligations under (and be entitled to the benefits of
and to enforce) this Agreement and shall expressly agree to perform the
obligations under this Agreement in the same manner and to the same extent as
the Company would be required to perform such obligations in the absence of a
succession. For all purposes under this Agreement, the term “Company” shall
include any successor to the Company’s business and/or assets which executes and
delivers an assumption agreement described in this subsection (a) or which
becomes bound by the terms of this Agreement by operation of law.
          (b) Executive’s Successors. The terms of this Agreement and all rights
of Executive hereunder shall inure to the benefit of, and be enforceable by,
Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributes, devisees and legatees.
     12. Notice.

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          (a) General. Notices and all other communications contemplated by this
Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or when mailed by U.S. registered or certified mail, return
receipt requested and postage prepaid. In the case of Executive, mailed notices
shall be addressed to him or her at the home address which he or she most
recently communicated to the Company in writing. In the case of the Company,
mailed notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its General Counsel.
          (b) Notice of Termination by the Company. Any termination by the
Company of Executive’s employment with the Company shall be communicated by
notice given to Executive in accordance with Section 12(a) of this Agreement.
Such notice shall specify the termination date and whether the termination is
considered by the Company to be for Cause as defined in Section 9(a) in which
case the Company shall identify the specific subsection(s) of Section 9(a)
asserted by the Company as the basis for the termination and shall set forth in
reasonable detail the facts and circumstances relied upon by the Company in
categorizing the termination as for Cause.
     13. Miscellaneous Provisions.
          (a) No Duty to Mitigate. Executive shall not be required to mitigate
the amount of any payment contemplated by this Agreement (whether by seeking new
employment or in any other manner), nor shall any such payment be reduced by any
earnings that Executive may receive from any other source.
          (b) Waiver. No provision of this Agreement shall be modified, waived
or discharged unless the modification, waiver or discharge is agreed in writing
and signed by Executive and by an authorized officer of the Company (other than
Executive). No waiver by either party of any breach of, or non-compliance with,
any condition or provision of this Agreement by the other party shall be
considered a waiver of any other condition or provision of the same condition or
provision at another time.
          (c) Entire Agreement. This Agreement, the ERMA and the Proprietary
Information Agreement represent the entire agreement of the Company and
Executive and will supersede any and all previous term sheets, negotiations,
memoranda, contracts, arrangements, discussions or understandings between the
Company and Executive.
          (d) Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the Commonwealth
of Massachusetts. The parties each hereby (i) agree that all legal proceedings
arising out of or in connection with this Agreement shall be brought, and
(ii) irrevocably consent and agree to the exercise of personal jurisdiction,
exclusively in the appropriate state and federal courts within the Commonwealth
of Massachusetts.

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          (e) Severability. The invalidity or enforceability of any provisions
or provisions of this Agreement shall not affect the validity or enforceability
of any other provision hereof, which shall remain in full force and effect.
          (f) Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by final and binding
arbitration in Massachusetts, in accordance with the rules of the American
Arbitration Association then in effect. Judgment may be entered on the
arbitrator’s award in any court having jurisdiction.
          (g) No Assignment of Benefits. The rights of any person to payments or
benefits under this Agreement shall not be made subject to option or assignment,
either by voluntary or involuntary assignment or by operation of law, including
(without limitation) bankruptcy, garnishment, attachment or other creditor’s
process, and any action in violation of this subsection (g) shall be void.
          (h) Employment Taxes. All payments made pursuant to this Agreement
will be subject to withholding of applicable income and employment taxes.
          (i) Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together will constitute
one and the same instrument.
          (j) Acknowledgment. Executive acknowledges that he has had the
opportunity to discuss this matter with and obtain advice from his private
attorney, has had sufficient time to, and has carefully read and fully
understands all the provisions of this Agreement, and is knowingly and
voluntarily entering into this Agreement.
          (k) No Conflict of Interest. Executive confirms that Executive has
fully disclosed to the Company, to the best of his knowledge, all circumstances
under which Executive, Executive’s immediate family and other persons who reside
in Executive’s household have or may have a conflict of interest with the
Company. Executive further agrees to fully disclose to the Company any such
circumstances that might arise during Executive’s employment upon Executive’s
becoming aware of such circumstances.
          (l) Other Agreements. Executive hereby represents that his performance
of all the terms of this Agreement and the performance of Executive’s duties as
an employee of the Company does not and will not breach any agreement to keep in
confidence proprietary information, knowledge or data acquired by Executive in
confidence or in trust prior to employment with the Company. Executive also
represents that he is not a party to or subject to any restrictive covenants,
legal restrictions, policies, commitments or other agreements in favor of any
entity or person that would in any way preclude, inhibit, impair or limit
Executive’s ability to perform his obligations under this Agreement, including
noncompetition agreements or nonsolicitation agreements, and Executive further
represents that his performance of the duties and obligations under this
Agreement does not violate the terms of any agreement to which Executive is a
party.

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          (m) Legal Expenses. The Company will reimburse Executive up to $35,000
for reasonable expenses relating to legal advice obtained by him in connection
with the negotiation and execution of this Agreement. In the event of
arbitration or litigation between the parties arising under or in connection
with this Agreement, the prevailing party shall be entitled to recover its
reasonable costs and attorneys’ fees.
          (n) No Oral Modification, Waiver, Cancellation or Discharge. This
Agreement may only be amended, canceled or discharged or any obligations
thereunder waived through a writing signed by Executive and a representative of
the Company duly authorized by the Board.
     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the
case of the Company by its duly authorized officer, as of the date first above
written.

          PROGRESS SOFTWARE CORPORATION
    By:   /s/ Michael L. Mark       Name:   Michael L. Mark      Title:  
Chairman of the Board     

          EXECUTIVE
    /s/ Jay H. Bhatt     Jay H. Bhatt           

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