**EXHIBIT 10.10**
CONSULTING AGREEMENT
     THIS CONSULTING AGREEMENT (this “Agreement”) is made effective for allpurposes and in all respects as of the date set forth below, by and between (i)webMethods, Inc., a Delaware corporation (the “Corporation”) and (ii) PhillipMerrick (“Consultant”).
     WHEREAS, the Corporation desires to engage Consultant to perform certainduties as shall be assigned to Consultant by the Corporation from time to time;
WHEREAS, Consultant desires to be so engaged by the Corporation;
     WHEREAS, the Corporation and Consultant desire to set forth in writing theterms and conditions of their agreements and understandings; and
     NOW, THEREFORE, in consideration of the foregoing, of the mutual promisesherein contained, and of other good and valuable consideration, the receipt andsufficiency of which are hereby acknowledged, the parties hereto, intendinglegally to be bound, hereby agree as follows:
     1. Duties of Consultant. Consultant shall undertake and assume theresponsibility of performing for and on behalf of the Corporation such dutiesas shall be assigned to Consultant by the Chief Executive Officer of theCorporation, subject to the availability of Consultant and the otherlimitations set forth herein; provided, that Consultant shall make himselfavailable for at least twenty (20) hours per month. Consultant covenants andagrees that, at all times during the term of this Agreement, Consultant shalldevote such amount of Consultant’s time as shall be required for Consultant toperform promptly, efficiently and professionally the duties assigned toConsultant by the Corporation hereunder. Consultant covenants and agrees thatConsultant shall not, directly or indirectly, engage or participate in anyactivities at any time during the term of this Agreement in conflict with thebest interests of the Corporation. Consultant shall not be required to renderany written reports to the Corporation, unless, in his sole discretion,Consultant deems written reports to be necessary.
     2. Term of Engagement. The term of Consultant’s engagement hereunder (the“Term”) shall commence as of the date hereof and shall continue for a term ofone year thereafter (unless prior to such date either the Corporation orConsultant shall provide written notice to the other of its desire to terminatesuch engagement as the result of material breach hereof by the other party tothis Agreement). Notwithstanding the foregoing, the termination ofConsultant’s engagement for any reason shall not terminate or in any way affectConsultant’s covenants and obligations set forth in Sections 5 through 11hereof.
     3. Compensation. As and for compensation for the services to be renderedto or on behalf of the Corporation by Consultant hereunder, and subject tocompliance by Consultant with all of Consultant’s representations, covenantsand agreements set forth in this Agreement, the Corporation shall payConsultant during the Term Thirty Thousand Dollars ($30,000) monthly on thelast date each month on which the Corporation normally is scheduled to payconsultants. During the Term, the Corporation shall pay premiums so thatConsultant shall continue to participate in the medical, dental and visioninsurance plans that the Corporation provides to its
 

 

then-current U.S. employees. During the Term hereof, the Corporation willprovide to Consultant the services of Consultant’s former executive assistant,or similar support in the event that the former executive assistant leaves theemployment of the Corporation.
     4. Expenses Incurred. During the Term, the Corporation shall pay orpromptly reimburse Consultant for all reasonable travel, telephone and otherbusiness expenses paid or incurred by Consultant in connection with theperformance of Consultant’s duties hereunder (which expenses must bepre-approved by the Corporation), upon presentation of expense statements,vouchers or other evidence of expenses.
     5. Treatment of Information.
          5.1 Consultant acknowledges that, in and as a result of Consultant’sengagement by the Corporation, Consultant shall or may be making use of,acquiring and adding to confidential information of a special and unique natureand value relating to such matters as the Corporation’s trade secrets; businessplans and strategies; acquisition plans, proposals and prospects; procedures;manuals; confidential reports and communications; and lists of and informationrelating to contacts and clients. Consultant further acknowledges that anyinformation and materials received by the Corporation from third parties(including, without limitation, business partners, customers and prospectivecustomers of the Corporation) in confidence (or subject to non-disclosure orsimilar covenants) shall be deemed to be and shall be confidential informationwithin the meaning of this Section 5. As a material inducement to theCorporation to engage (or to continue to engage) Consultant and to pay toConsultant compensation for such services to be rendered to the Corporation byConsultant (it being understood and agreed by the parties hereto that suchcompensation shall also be paid and received in consideration hereof),Consultant covenants and agrees that Consultant shall not, except with theprior written consent of the Corporation, or except if Consultant is acting onbehalf or as a consultant of the Corporation solely for the benefit of theCorporation in connection with the Corporation’s business and in accordancewith the Corporation’s business practices and policies, at any time during orfollowing the term of Consultant’s engagement by the Corporation, directly orindirectly, disclose, divulge, reveal, report, publish, transfer or use, forany purpose whatsoever, any of such information which has been obtained by ordisclosed to Consultant as a result of Consultant’s engagement by theCorporation, including any of the information referred to in Section 6 hereof.
          5.2 Disclosure of any such information of the Corporation shall not beprohibited if such disclosure is directly pursuant to a valid and existingorder of a court or other governmental body or agency within the United States;provided, however, that (i) Consultant shall first have given prompt notice tothe Corporation of any such possible or prospective order (or proceedingpursuant to which any such order may result) and (ii) the Corporation shallhave been afforded a reasonable opportunity to prevent or limit any suchdisclosure.
     6. Definition of Protected Information.
          6.1 For purposes of this Agreement, the term “Protected Information” shallmean all of the information referred to in Section 5 hereof and all of thematerials and information of the Corporation (whether or not reduced to writingand whether or not patentable
 

 

or protectable by copyright) which Consultant receives, receives accessto, conceives, creates or develops or has received, received access to,conceived, created or developed, in whole or in part, directly or indirectly,in connection with Consultant’s engagement by the Corporation or in the courseof Consultant’s engagement by the Corporation (in any capacity whatsoever) orthrough the use of any of the Corporation’s facilities or resources.
          6.2 Failure to mark any of the Protected Information as confidential,proprietary or Protected Information shall not affect its status as part of theProtected Information under the terms of this Agreement.
          6.3 For purposes of this Agreement, the term “Protected Information” shallnot include information which is or becomes publicly available without breachof (i) this Agreement, (ii) any other agreement or instrument to which theCorporation is a party or a beneficiary or (iii) any duty owed to theCorporation by Consultant or any third party; provided, however, thatConsultant hereby acknowledges and agrees that, except as otherwise provided inSection 5 hereof, if Consultant shall seek to disclose, divulge, reveal,report, publish, transfer or use, for any purpose whatsoever, any ProtectedInformation, Consultant shall bear the burden of proving that any suchinformation shall have become publicly available without any such breach.
     7. Ownership of Information. Consultant covenants and agrees that allright, title and interest in any Protected Information shall be and shallremain the exclusive property of the Corporation. Consultant agreesimmediately to disclose to the Corporation all Protected Information developedin whole or in part by Consultant during the term of Consultant’s engagement bythe Corporation and to assign to the Corporation any right, title or interestConsultant may have in such Protected Information. Consultant agrees toexecute any instruments and to do all other things reasonably requested by theCorporation (both during and after Consultant’s engagement by the Corporation)in order to vest more fully in the Corporation all ownership rights in thoseitems hereby transferred by Consultant to the Corporation.
     8. Materials. All notes, data, tapes, reference items, sketches,drawings, memoranda, records and other materials in any way relating to any ofthe information referred to in Sections 5 and 6 hereof (including, withoutlimitation, any Protected Information) or to the Corporation’s business shallbelong exclusively to the Corporation and Consultant agrees to turn over to theCorporation all copies of such materials in Consultant’s possession or underConsultant’s control at the request of the Corporation or, in the absence ofsuch a request, upon the termination of Consultant’s engagement with theCorporation.
     9. Severability. The provisions of this Agreement shall be deemedseverable, and the invalidity or unenforceability of any one or more of theprovisions hereof shall not affect the validity and enforceability of the otherprovisions hereof.
     10. No Prior Agreements. Consultant represents that Consultant’sperformance of all the terms of this Agreement and any services to be renderedas a consultant to the Corporation do not and shall not breach any fiduciary orother duty or any covenant, agreement or understanding (including, withoutlimitation, any agreement relating to any proprietary information, knowledge ordata acquired by Consultant in confidence, trust or otherwise prior toConsultant’s engagement by the Corporation) to which Consultant is a party orby the terms of which Consultant may be
 

 

bound. Consultant covenants and agrees that Consultant shall not discloseto the Corporation, or induce the Corporation to use, any such proprietaryinformation, knowledge or data belonging to any previous employer or client orothers. Consultant further covenants and agrees not to enter into anyagreement or understanding, either written or oral, in conflict with theprovisions of this Agreement.
     11. Independent Contractor.
          11.1 Consultant shall at all times be an independent contractor hereunder,and not a co-venturer, agent, employee or representative of the Corporation,and no act, action or omission to act of Consultant shall in any way be bindingupon or obligate the Corporation. Consultant shall serve only as a consultantand advisor to the Corporation and shall not have any authority in any othercapacity, except as specifically stated herein. Consultant covenants andagrees that he shall not represent to any third party that he is an officer,agent or employee of the Corporation. No change in Consultant’s duties as aconsultant of the Corporation shall result in, or be deemed to be, amodification of the terms of this Agreement.
          11.2 It is understood and agreed by the parties hereto that Consultantshall not be treated as an employee for Federal or state tax purposes.Consultant hereby represents and warrants to the Corporation that Consultant isan independent contractor for Federal, state and local tax purposes. Further,Consultant hereby covenants and agrees to pay any and all Federal, state andlocal taxes required by law to be paid by an independent contractor, including,without limitation, any taxes imposed by the Self Employment Contribution Act.
          11.3 The Corporation hereby acknowledges and agrees that Consultant mayengage directly or indirectly in other businesses and ventures, and shall notbe required to perform any services under this Agreement when, or for suchperiods in which, the rendering of services shall unduly interfere withConsultant’s other businesses and ventures. These undertakings of Consultantshall not permanently preempt Consultant’s availability during the Term.
     12. Burden and Benefit; the Corporation. This Agreement shall be bindingupon, and shall inure to the benefit of, the Corporation and Consultant, andtheir respective heirs, personal and legal representatives, successors andassigns. As used in this Agreement, the term “the Corporation” shall alsoinclude any corporation or entity which is a parent, subsidiary or affiliate ofthe Corporation. Consultant hereby consents to the enforcement of any and allof the provisions of this Agreement by or for the benefit of the Corporationand any such other corporation or entity as to any Protected Information.
     13. Governing Law. In view of the fact that the principal office of theCorporation is located in the Commonwealth of Virginia, it is understood andagreed that the construction and interpretation of this Agreement shall at alltimes and in all respects be governed by the substantive laws of theCommonwealth of Virginia.
     14. Notices. Any notice required to be given hereunder shall besufficient if in writing, and sent by courier service (with proof of service),facsimile transmission, hand delivery or certified or registered mail (returnreceipt requested, first-class postage prepaid), in the case of
 

 

Consultant, to Consultant’s address as shown on the Corporation’s records,and, in the case of the Corporation, to its principal office to the attentionof General Counsel.
     15. Entire Agreement. This Agreement contains the entire agreement andunderstanding by and between the Corporation and Consultant with respect to thesubject matter hereof, and no representations, promises, agreements orunderstandings, written or oral, not herein contained shall be of any force oreffect. No change or modification hereof shall be valid or binding unless thesame is in writing and signed by the party intended to be bound. No waiver ofany provision of this Agreement shall be valid unless the same is in writingand signed by the party against whom such waiver is sought to be enforced;moreover, no valid waiver of any provision of this Agreement at any time shallbe deemed a waiver of any other provision of this Agreement at such time orshall be deemed a valid waiver of such provision at any other time.
     16. Headings. The headings and other captions in this Agreement are forconvenience and reference only and shall not be used in interpreting,construing or enforcing any of the provisions of this Agreement.
     IN WITNESS WHEREOF, the Corporation and Consultant have duly executed thisAgreement as of the day and year set forth below.
Effective Date: October 3, 2004      CORPORATION:       webMethods, Inc.       /S/ DAVID MITCHELL       By: David Mitchell   Title: President and CEO       CONSULTANT:       /S/ PHILLIP MERRICK       Phillip Merrick