**Exhibit 10.2****EXECUTIVE AGREEMENT**     **THIS EXECUTIVE AGREEMENT**(this “Agreement”) is made effective as of the 2nd day of January2007, by and between webMethods, Inc., a Delaware corporation (the “Company”), and Kenneth A.Sexton (the “Executive”).     **WHEREAS**, the Executive is presently employed by the Company;     **WHEREAS**, the Board of Directors of the Company (the “Board”) recognizes that the Executive’scontribution to the growth and success of the Company has been and continues to be substantial;     **WHEREAS**, the Board desires to provide for certain arrangements in the event that theExecutive’s employment with the Company is terminated under certain circumstances; and     **WHEREAS**, the Company and the Executive desire to enter into this Agreement on the terms andconditions set forth below.     **NOW, THEREFORE**, in consideration of the promises and the respective covenants and agreementsof the parties herein contained, and of the continued employment of the Executive by the Company,the parties hereto, intending to be legally bound, do hereby agree as follows:     1. Definitions. For purposes of this Agreement:          (a) “Cause” shall mean the Executive’s (i) theft, fraud, material dishonesty or grossnegligence in the conduct of the Company’s business, (ii) continuing neglect of the Executive’sduties and responsibilities that has a material adverse effect on the Company (which neglect is notcured within fifteen (15) days after receipt of written notice by the Executive specifying theparticulars of such neglect), or (iii) conviction of a felony (not involving an automobile). Forpurposes of this Agreement, any purported termination of the Executive’s employment shall bepresumed to be other than for Cause, unless the Notice of Termination includes a copy of aresolution duly adopted by the Board which finds Cause to exist and specifies the particularsthereof in detail.          (b) “Good Reason” shall mean (i) a decrease in the Executive’s base salary, maximum bonus orincentive compensation amount for which the Executive is eligible to be awarded pursuant to anybonus or incentive compensation plan, or aggregate allowance for reimbursable commuting costssubmitted in accordance with the Company’s standard travel policies (or other mutually agreeablearrangement), in each case as established by Employer on the date hereof, or (ii) a materialreduction or material adverse change in the Executive’s authorities, duties or job responsibilities(which material reduction or material adverse change is not cured within fifteen (15) days afterwritten notice by the Executive specifying the particulars of such reduction or change in suchauthorities, duties or job responsibilities, the notice of which is given to the Company withinfifteen (15) days of such reduction or change).
 

 
          (c) A “Change in Control” shall be deemed to have occurred if (A) any person (as such term isused in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”), is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act),directly or indirectly, of securities of the Company representing fifty percent (50%) or more ofthe combined voting power of the Company’s then outstanding securities, (B) during any period oftwo (2) consecutive years during the term of this Agreement, individuals who at the beginning ofsuch period constitute the Board cease for any reason to constitute at least a majority thereof,unless the election of each director who was not a director at the beginning of such period hasbeen approved in advance by directors representing at least two-thirds of the directors then inoffice who were directors at the beginning of the period, (C) the shareholders of the Companyapprove a merger or consolidation involving the Company that would result in a change of ownershipof a majority of the outstanding shares of capital stock of the Company or its successor, or (D)the shareholders of the Company approve a plan of liquidation or dissolution of the Company or thesale or disposition by the Company of all or substantially all the Company’s assets.          (d) The “Date of Termination” with respect to any termination of the Executive’s employmentmeans the date specified as such in the Notice of Termination. In the case of termination of theExecutive’s employment (i) by the Company for Cause or (ii) by the Executive for any reason, theDate of Termination shall be a date not less than seven (7) days from the date the Notice ofTermination is given. In the case of termination of the Executive’s employment by the Companywithout Cause, the Date of Termination shall be a date not less than thirty (30) days from the datethe Notice of Termination is given.          (e) “Notice of Termination” means a written notice of termination of employment by theterminating party, which notice shall specify a Date of Termination and the particular facts andcircumstances of such termination, including the existence of Cause or Good Reason.     2. Termination of Employment.          (a) The Executive’s employment may be terminated at any time by the Company, with or withoutCause, by delivery of a Notice of Termination to the Executive. The Executive’s employment may beterminated at any time by the Executive, without Good Reason, by delivery of a Notice ofTermination to the Company. The Executive’s employment may be terminated by the Executive for GoodReason, by delivery of a Notice of Termination to the Company within thirty (30) days of the laterof occurrence of the event constituting Good Reason or the termination of the Corporation’s cureperiod, if any, with respect to the event constituting Good Reason.          (b) In the event the Company terminates the Executive’s employment without Cause, or in theevent the Executive terminates the Executive’s employment for Good Reason, then the Company shall,subject to Section 7 hereof, pay the Executive’s base salary through the date of such terminationand shall continue to pay to the Executive the Executive’s monthly base salary, and shalladminister and pay for the Executive’s life, disability, accident and health insurance benefitssubstantially similar to those which Executive is receiving immediately prior to the Notice ofTermination, until the first anniversary of the Date of Termination; provided,
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however, that the Company’s obligations under this Section 2(b) shall cease upon theExecutive’s commencement of full-time employment with another employer. In addition, in the eventthe Company terminates the Executive’s employment without Cause, then the Company shall, subject toSection 7 hereof, pay the Executive an amount equal to the maximum bonus or incentive compensationamount for which the Executive is eligible to be awarded pursuant to any bonus or incentivecompensation plan, calculated based upon the bonus period in which the Date of Termination occursand pro rated to the extent that such bonus period does not reflect a twelve (12) month period.Notwithstanding the foregoing, (i) the Company’s obligations under this Section 2(b), if any, shallbe contingent upon the Executive executing a general release of all claims in favor of the Company,and its officers, directors and affiliates, in a form provided by the Company, and (ii) in theevent Executive’s termination of employment falls within one (1) year after the consummation of aChange in Control, the Company shall have no obligation under this Section 2(b).          (c) If there is a Change in Control of the Company or there has been a public announcement ofa Change in Control of the Company (provided, however, that consummation of theChange in Control of the Company shall be a condition precedent to the effectiveness of thisprovision) and at any time within one (1) year after the consummation of a Change in Control (i)the Company terminates the Executive’s employment without Cause, or (ii) the Executive terminatesthe Executive’s employment for Good Reason, then the Company (x) shall pay the Executive’s basesalary through the Date of Termination, (y) shall pay to the Executive, in a lump sum in cashwithin ten (10) business days after the Date of Termination, an amount equal to one and one half (11/2) times the sum of (A) the Executive’s base salary in effect immediately prior to the occurrenceof the circumstance giving rise to the Notice of Termination given in respect thereof and (B) themaximum bonus or incentive compensation amount for which the Executive is eligible to be awardedpursuant to any bonus or incentive compensation plan, calculated based upon the bonus period inwhich the Date of Termination occurs and annualized to the extent that such bonus period does notreflect a twelve (12) month period and (C) for an eighteen (18) month period after the Date ofTermination, the Company shall administer and pay for the Executive’s life, disability, accidentand health insurance benefits substantially similar to those which Executive is receivingimmediately prior to the Notice of Termination. The Company’s obligations under this Section 2(c),if any, shall be contingent upon the Executive executing a general release of all claims in favorof the Company, and its officers, directors and affiliates, in a form provided by the Company          (d) In the event of the death of the Executive, this Agreement shall terminate, and shall beof no further force or effect; provided, however, that notwithstanding theforegoing, the death of the Executive shall not in any way affect any payment obligations of theCompany pursuant to Section 2(b) or Section 2(c) hereof which exist at the time of such death.     3. Successors; Binding Agreement. This Agreement and all rights of the Executivehereunder shall inure to the benefit of and be enforceable by the Executive’s personal or legalrepresentatives, executors, administrators, successors, heirs, distributees, devisees and legatees.If the Executive should die while any amounts would still be payable to the Executive hereunder ifthe Executive had continued to live, all such amounts, unless otherwise provided herein, shall bepaid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or otherdesignee or, if there be no such designee, to the Executive’s estate.
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     4. Notice. For the purposes of this Agreement, notices, demands and all othercommunications provided for in this Agreement shall be in writing and shall be deemed to have beenduly given when delivered by hand delivery or via reputable overnight delivery service, or (unlessotherwise specified) mailed by United States registered mail, return receipt requested, postageprepaid, addressed, if to the Executive, to the Executive’s home address as it appears on therecords of the Company, and if to the Company, to the Company’s executive headquarters, or to suchother address as either party may have furnished to the other in writing in accordance herewith,except that notices of change of address shall be effective only upon receipt.     5. Prior Agreement. All prior agreements between the Company and the Executive withrespect to the subject matter hereof (except for stock option agreements), are hereby supersededand terminated effective as of the date hereof and shall be without further force or effect. ThisAgreement is intended to be, and shall be, a complete integration of all prior agreements anddiscussions between the Company and the Executive with respect to the subject matter hereof (exceptas set forth in stock option agreements between the Company and the Executive).     6. Employment of Executive. Nothing in this Agreement shall be construed asconstituting a commitment, guarantee, agreement or understanding of any kind or nature that theCompany shall continue to employ the Executive, nor shall this Agreement affect in any way theright of the Company to terminate the employment of the Executive at any time and for any reason.By the Executive’s execution of this Agreement, the Executive acknowledges and agrees that theExecutive’s employment is “at will.” No change of the Executive’s duties as an employee of theCompany shall result in, or be deemed to be, a modification of any of the terms of this Agreement.     7. Gross-Up for Excess Parachute Payments. In the event of a Change in Control, orother event constituting a change in the ownership or effective control of the Company or ownershipof a substantial portion of the assets of the Company described in Section 280G(b)(2)(A)(i) of theUnited States Internal Revenue Code of 1986, as amended (the “Code”), the Company, at its soleexpense, shall cause its independent auditors promptly to review all payments, accelerations,distributions and benefits that have been made to or provided to, and are to be made, or may bemade, to or provided to, the Executive under this Agreement, and any other agreement or planbenefiting the Executive (collectively the “Original Payments”), to determine the applicability ofSection 4999 of the Code to the Executive in connection with such event (other than under thisSection 7). If the Company’s independent auditors determine that the Original Payments are subjectto excise taxes under Section 4999 of the Code (the “Excise Tax”), then an additional amount shallbe paid to the Executive (the “Gross-Up Amount”) such that the net proceeds of the Gross-Up Amountto the Executive, after deduction of the Excise Tax (including interest and penalties) and anyfederal, state and local income taxes and employment taxes (including interest and penalties) butbefore deduction of any interest or additional tax under Sections 409A(a)(1)(B) or 409A(b)(5) ofthe Code (and any penalties related to such interest or additional taxes) (the “409A Taxes”) uponthe Gross-Up Amount, shall be equal to the Excise Tax on the Original Payments. The Company’sindependent auditors will perform the calculations in conformity with the foregoing provisions andwill provide the Executive with a copy of their calculations. The intent of the parties is thatthe Company shall be solely responsible for, and shall pay, any Excise Tax on the OriginalPayment(s) and Gross-Up Amount and any income and employment taxes other than the 409A Taxes (butincluding,
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without limitation, other penalties and interest on such income and employment taxes) imposedon any Gross-Up Amount payable hereunder. If no determination by the Company’s independentauditors is made prior to the time the Executive is required to file a tax return reflecting ExciseTaxes on any portion of the Original Payment(s), the Executive will be entitled to receive aGross-Up Amount calculated on the basis of the Excise Tax that the Executive reports in such taxreturn, within thirty (30) days after the filing of such tax return. The Executive agrees that,for the purposes of the foregoing sentence, the Executive is not required to file a tax returnuntil the Executive has obtained the maximum number and length of filing extensions available, andExecutive shall have provided a copy of the relevant portions of such tax return to the Company notless than ten (10) days prior to filing such tax return. If any tax authority finally determinesthat a greater Excise Tax should be imposed upon the Original Payments or the Gross-Up Amount thanis determined by the Company’s independent auditors or reflected in the Executive’s tax returns,the Executive shall be entitled to receive an additional Gross-Up Amount calculated on the basis ofthe additional amount of Excise Tax determined to be payable by such tax authority (includingrelated penalties and interest) from the Company within thirty (30) days after such determination.The Executive shall cooperate with the Company as it may reasonably request to permit the Company(at its sole expense) to contest the determination of such taxing authority to minimize the amountpayable under this Section 7. If any tax authority finally determines the Excise Tax payable bythe Executive to be less than the amount taken into account hereunder in calculating the Gross-UpAmount, the Executive shall repay the Company, within thirty (30) days after the Executive’sreceipt of a tax refund resulting from that determination, to the extent of such refund, theportion of the Gross-Up Amount attributable to such reduction (including the refunded portion ofGross-Up Amount attributable to the Excise Tax and federal, state and local income and employmenttaxes imposed on the Gross-Up Amount being repaid, less any additional income tax resulting fromreceipt of such refund).     8. Counsel Fees. The Company also shall pay to the Executive reimbursement for alllegal fees and expenses incurred by the Executive in disputing in good faith any issue hereunderrelating to the termination of the Executive’s employment, in seeking in good faith to obtain orenforce any benefit or right provided by this Agreement or in connection with review ofdeterminations made under Section 7, and any tax audit or proceeding to the extent attributable tothe potential application of section 4999 of the Code to any payment or benefit provided by theCompany to the Executive. Subject to Section 12, such reimbursement payments shall be made withinfive (5) days after delivery of the Executive’s written requests for payment accompanied with suchevidence of fees and expenses incurred as the Company reasonably may require.     9. No Mitigation. The Company agrees that, if the Executive’s employment isterminated during the term of this agreement, the Executive is not required to seek otheremployment or to attempt in any way to reduce any amounts payable to the Executive by the Company.Further, the amount of any payment provided hereunder shall not be reduced by any compensationearned by the Executive.     10. Miscellaneous. No provisions of this Agreement may be modified, waived ordischarged unless such waiver, modification or discharge is agreed to in writing signed by theExecutive and a duly authorized officer of the Company. No waiver by either party hereto at any
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time of any breach by the other hereto of, or compliance with, any condition or provision ofthis Agreement to be performed by such other party shall be deemed a waiver of similar ordissimilar provisions or conditions at the same or at any prior or subsequent time. No agreementsor representations, oral or otherwise, express or implied, with respect to the subject matterhereof have been made by either party which are not set forth expressly in this Agreement. Thevalidity, interpretation, construction and performance of this Agreement shall be governed by thelaws of the Commonwealth of Virginia, without regard to provisions thereof relating to choice oflaw or conflicts of law. This Agreement may be executed in two or more counterparts, each of whichshall be deemed an original, but all of which together shall constitute one and the sameinstrument. This Agreement may be executed by facsimile signatures.     11. Validity. The invalidity or unenforceability of any provision or provisions ofthis Agreement shall not affect the validity or enforceability of any other provision of thisAgreement, which shall remain in full force and effect.     12. Section 409A Compliance. Notwithstanding anything in this Agreement or any otheragreements between the Company and the Executive (“Other Agreements”) to the contrary, if, based onInternal Revenue Service guidance available as of the date the payment or provision of any amountor other benefit is required to be made under this Agreement (including, but not limited to, anypayment, accelerated vesting or benefit continuation right, Gross-Up Amount under Section 7 hereofor Counsel Fees under Section 8 hereof) or under any Other Agreements, (a) the Company reasonablydetermines that the payment or provision of such amount or other benefit at the time specified insuch agreements may subject the Executive to 409A Taxes “additional tax” and “interest” underSection 409A(a)(1)(B) of the Code (together with any interest or penalties imposed with respect to,or in connection with, such tax, the “409A Taxes”), because the Executive is a “specified employee”within the meaning of Section 409A(a)(2)(B)(i) of the Code or otherwise, and (b) payment of suchamount (or portion of such amount) or provision of such benefit (or portion of such benefit) at alater date would likely avoid any such 409A Taxes, then the payment or provision thereof shall bepostponed to the earliest business day on which the Company reasonably determines such amount orbenefit can be paid or provided without incurring any such 409A Taxes, but in no event later thanthe first business day after the six-month anniversary of the Executive’s severance from servicewithin the meaning of Section 409A(a)(2) of the Code (the “Delayed Payment Date”). In the event abenefit is to be provided during the period commencing on the Executive’s separation from serviceand ending on the Delayed Payment Date and the provision of such benefit during that period wouldbe treated as a payment of nonqualified deferred compensation in violation of Section409A(a)(2)(B)(i) of the Code, then continuation of such benefit during that period shall beconditioned on payment by the Executive of the full premium or other cost of coverage and as of theDelayed Payment Date the Company shall reimburse the Executive for the premiums or other cost ofcoverage paid by the Executive, which but for this paragraph would have been paid by the Company.On the Delayed Payment Date the Executive shall receive in a lump sum all payments which weredelayed and all remaining payments shall commence to be paid in accordance with the terms of thisAgreement or the Other Agreement. The Company and the Executive may agree to take other actions toavoid the imposition of 409A Taxes at such time and in such manner as permitted under Section 409Aof the Code. In addition, in the event that any amount or other benefit which is required to bemade under this Agreement is treated as a payment under a nonqualified deferred compensation planwithin the meaning of Section 409A
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of the Code, no acceleration of payment shall be made if such acceleration of payment wouldresult in imposition of 409A Taxes. The Company shall have no liability to the Executive for 409ATaxes (or any loss incident to the imposition of such taxes) in the event that Executive isdetermined to be liable for 409A Taxes in connection with any payment or provision of any amount orother benefit under this Agreement or Other Agreements.**[Signatures appear on following page.]**
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     **IN WITNESS WHEREOF**, the parties have executed this Executive Agreement on the date and yearfirst above written.         WEBMETHODS, INC., a Delaware corporation           By: