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                                                                   Exhibit 10.40


                                 NETEGRITY, INC.

                          Executive Retention Agreement

      THIS EXECUTIVE RETENTION AGREEMENT by and between Netegrity, Inc., a
Delaware corporation (the "Company"), and Stephanie Feraday (the "Executive") is
made as of November 4, 2002 (the "Effective Date").

      WHEREAS, the Company recognizes that, as is the case with many
publicly-held corporations, the possibility of a change in control of the
Company exists and that such possibility, and the uncertainty and questions
which it may raise among key personnel, may result in the departure or
distraction of key personnel to the detriment of the Company and its
stockholders, and

      WHEREAS, the Board of Directors of the Company (the "Board") has
determined that appropriate steps should be taken to reinforce and encourage the
continued employment and dedication of the Company's key personnel without
distraction from the possibility of a change in control of the Company and
related events and circumstances.

      NOW, THEREFORE, as an inducement for and in consideration of the Executive
remaining in its employ, the Company agrees that the Executive shall receive the
severance benefits set forth in this Agreement in the event the Executive's
employment with the Company is terminated under the circumstances described
below subsequent to a Change in Control (as defined in Section 1.1).

      1. Key Definitions.

      As used herein, the following terms shall have the following respective
meanings:

            1.1 "Change in Control" means an event or occurrence set forth in
any one or more of subsections (a) through (d) below (including an event or
occurrence that constitutes a Change in Control under one of such subsections
but is specifically exempted from another such subsection):

                (a) the acquisition by an individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership of
any capital stock of the Company if, after such acquisition, such Person
beneficially owns (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) 50% or more of either (x) the then-outstanding shares of common
stock of the Company (the "Outstanding Company Common Stock") or (y) the
combined voting power of the then-outstanding securities of the Company entitled
to vote generally in the election of directors (the "Outstanding Company Voting
Securities"); provided, however, that for purposes of this subsection (a), the
following acquisitions shall not constitute a Change in Control: (i) any
acquisition directly from the Company (excluding an acquisition pursuant to the
exercise, conversion or exchange of any security exercisable for, convertible
into or exchangeable for common stock or voting securities of the Company,
unless the Person exercising, converting or exchanging such security acquired
such security directly from the
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Company or an underwriter or agent of the Company), (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation controlled by the
Company, or (iv) any acquisition by any corporation pursuant to a transaction
which complies with clauses (i) and (ii) of subsection (c) of this Section 1.1;
or

                (b) such time as the Continuing Directors (as defined below) do
not constitute a majority of the Board (or, if applicable, the Board of
Directors of a successor corporation to the Company), where the term "Continuing
Director" means at any date a member of the Board (i) who was a member of the
Board on the date of the execution of this Agreement or (ii) who was nominated
or elected subsequent to such date by at least a majority of the directors who
were Continuing Directors at the time of such nomination or election or whose
election to the Board was recommended or endorsed by at least a majority of the
directors who were Continuing Directors at the time of such nomination or
election; provided, however, that there shall be excluded from this clause (ii)
any individual whose initial assumption of office occurred as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents, by
or on behalf of a person other than the Board; or

                (c) the consummation of a merger, consolidation, reorganization,
recapitalization or statutory share exchange involving the Company or a sale or
other disposition of all or substantially all of the assets of the Company in
one or a series of transactions (a "Business Combination"), unless, immediately
following such Business Combination, each of the following two conditions is
satisfied: (i) all or substantially all of the individuals and entities who were
the beneficial owners of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, at least 50% of the then-outstanding
shares of common stock and the combined voting power of the then-outstanding
securities entitled to vote generally in the election of directors,
respectively, of the resulting or acquiring corporation in such Business
Combination (which shall include, without limitation, a corporation which as a
result of such transaction owns the Company or substantially all of the
Company's assets either directly or through one or more subsidiaries) (such
resulting or acquiring corporation is referred to herein as the "Acquiring
Corporation") in substantially the same proportions as their ownership,
immediately prior to such Business Combination, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, respectively; and (ii)
no Person (excluding the Acquiring Corporation or any employee benefit plan (or
related trust) maintained or sponsored by the Company or by the Acquiring
Corporation) beneficially owns, directly or indirectly, 50% or more of the then
outstanding shares of common stock of the Acquiring Corporation, or of the
combined voting power of the then-outstanding securities of such corporation
entitled to vote generally in the election of directors (except to the extent
that such ownership existed prior to the Business Combination); or

                (d) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.

            1.2 "Change in Control Date" means the first date during the Term
(as defined in Section 2) on which a Change in Control occurs.


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            1.3 "Cause" means:

                (a) the Executive's willful and continued failure to
substantially perform his or her reasonable assigned duties (other than any such
failure resulting from incapacity due to physical or mental illness or any
failure after the Executive gives notice of termination for Good Reason), which
failure is not cured within 30 days after a written demand for substantial
performance is received by the Executive from the Board of Directors of the
Company which specifically identifies the manner in which the Board of Directors
believes the Executive has not substantially performed the Executive's duties;
or

                (b) the Executive's willful engagement in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the Company.

      For purposes of this Section 1.3, no act or failure to act by the
Executive shall be considered "willful" unless it is done, or omitted to be
done, in bad faith and without reasonable belief that the Executive's action or
omission was in the best interests of the Company.

            1.4 "Good Reason" means the occurrence, without the Executive's
written consent, of any of the events or circumstances set forth in clauses (a)
through (g) below. Notwithstanding the occurrence of any such event or
circumstance, such occurrence shall not be deemed to constitute Good Reason if,
prior to the Date of Termination specified in the Notice of Termination (each as
defined in Section 3.2(a)) given by the Executive in respect thereof, such event
or circumstance has been fully corrected and the Executive has been reasonably
compensated for any losses or damages resulting therefrom (provided that such
right of correction by the Company shall only apply to the first Notice of
Termination for Good Reason given by the Executive).

                (a) a reduction in the Executive's annual base salary as in
effect on the Measurement Date or as the same was or may be increased thereafter
from time to time;

                (b) the failure by the Company to (i) continue in effect any
material compensation or benefit plan or program (including without limitation
any life insurance, medical, health and accident or disability plan and any
vacation or automobile program or policy) (a "Benefit Plan") in which the
Executive participates or which is applicable to the Executive immediately prior
to the Measurement Date, unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect to such plan or
program, (ii) continue the Executive's participation therein (or in such
substitute or alternative plan) on a basis not materially less favorable, both
in terms of the amount of benefits provided and the level of the Executive's
participation relative to other participants, than the basis existing
immediately prior to the Measurement Date or (iii) award cash bonuses to the
Executive in amounts and in a manner substantially consistent with past practice
in light of the Company's financial performance;

                (c) the failure of the Company to obtain the agreement from any
successor to the Company to assume and agree to perform this Agreement, as
required by Section 6.1;


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                (d) a purported termination of the Executive's employment which
is not effected pursuant to a Notice of Termination satisfying the requirements
of Section 3.2(a); or

                (e) any failure of the Company to pay or provide to the
Executive any portion of the Executive's compensation or benefits due under any
Benefit Plan within seven days of the date such compensation or benefits are
due, or any material breach by the Company of this Agreement or any employment
agreement with the Executive.

      The Executive's right to terminate his or her employment for Good Reason
shall not be affected by his or her incapacity due to physical or mental
illness, or the fact that the Executive at such time may have an offer of
employment from another employer or any other reason for terminating his or her
employment with the Company.

            1.5 "Disability" means the Executive's absence from the full-time
performance of the Executive's duties with the Company for 90 days, whether or
not consecutive, during any 360-day period, due to mental or physical illness
which is determined to be total and permanent by a physician selected by the
Company or its insurers and acceptable to the Executive or the Executive's legal
representative.

      2. Term of Agreement. This Agreement, and all rights and obligations of
the parties hereunder, shall take effect upon the Effective Date and shall
expire upon the first to occur of (a) the expiration of the Term (as defined
below) if a Change in Control has not occurred during the Term, (b) the
termination of the Executive's employment with the Company prior to the Change
in Control Date, (c) the date 12 months after the Change in Control Date, if the
Executive is still employed by the Company as of such later date, or (d) the
fulfillment by the Company of all of its obligations under Sections 4 and 5.2 if
the Executive's employment with the Company terminates within 12 months
following the Change in Control Date. "Term" shall mean the period commencing as
of the Effective Date and continuing in effect through December 31, 2007;
provided, however, that commencing on January 1, 2008 and each January 1
thereafter, the Term shall be automatically extended for one additional year
unless, not later than 90 days prior to the scheduled expiration of the Term (or
any extension thereof), the Company shall have given the Executive written
notice that the Term will not be extended.

      3. Employment Status; Termination Following Change in Control.

            3.1 Not an Employment Contract. The Executive acknowledges that this
Agreement does not constitute a contract of employment or impose on the Company
any obligation to retain the Executive as an employee and that this Agreement
does not prevent the Executive from terminating employment at any time. If the
Executive's employment with the Company terminates for any reason and
subsequently a Change in Control shall occur, the Executive shall not be
entitled to any benefits hereunder.

            3.2 Termination of Employment.

                (a) If the Change in Control Date occurs during the Term, any
termination of the Executive's employment by the Company or by the Executive
within 12 months following the Change in Control Date (other than due to the
death of the Executive) shall be communicated by a written notice to the other
party hereto (the "Notice of Termination"),


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given in accordance with Section 7. Any Notice of Termination shall: (i)
indicate the specific termination provision (if any) of this Agreement relied
upon by the party giving such notice, (ii) to the extent applicable, set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated and
(iii) specify the Date of Termination (as defined below). The effective date of
an employment termination (the "Date of Termination") shall be the close of
business on the date specified in the Notice of Termination (which date may not
be less than 15 days or more than 120 days after the date of delivery of such
Notice of Termination), in the case of a termination other than one due to the
Executive's death, or the date of the Executive's death, as the case may be. In
the event the Company fails to satisfy the requirements of Section 3.2(a)
regarding a Notice of Termination, the purported termination of the Executive's
employment pursuant to such Notice of Termination shall not be effective for
purposes of this Agreement.

                (b) The failure by the Executive or the Company to set forth in
the Notice of Termination any fact or circumstance which contributes to a
showing of Good Reason or Cause shall not waive any right of the Executive or
the Company, respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting any such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.

                (c) Any Notice of Termination for Cause given by the Company
must be given within 30 days of the occurrence of the event(s) or
circumstance(s) which constitute(s) Cause. Prior to any Notice of Termination
for Cause being given (and prior to any termination for Cause being effective),
the Executive shall be entitled to a hearing before the Board of Directors of
the Company at which her or she may, at his or her election, be represented by
counsel and at which he or she shall have a reasonable opportunity to be heard.
Such hearing shall be held on not less than 15 days prior written notice to the
Executive stating the Board of Directors' intention to terminate the Executive
for Cause and stating in detail the particular event(s) or circumstance(s) which
the Board of Directors believes constitutes Cause for termination. Any such
Notice of Termination for Cause must be approved by the Board of Directors.

                (d) Any Notice of Termination for Good Reason given by the
Executive must be given within 90 days of the occurrence of the event(s) or
circumstance(s) which constitute(s) Good Reason.

      4. Benefits to Executive.

            4.1 Compensation and Stock Acceleration. If the Change in Control
Date occurs during the Term and the Executive's employment with the Company
terminates within 12 months following the Change in Control Date, the Executive
shall be entitled to the following benefits:

                (a) Termination Without Cause or for Good Reason. If the
Executive's employment with the Company is terminated by the Company (other than
for Cause, Disability or death) or by the Executive for Good Reason within 12
months following the Change in Control Date, then the Executive shall be
entitled to the following benefits:


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                    (i) (A) the vesting schedule of each outstanding option to
purchase shares of Common Stock of the Company held by the Executive shall be
accelerated so that the number of shares that would otherwise have first become
vested during the two-year period following the Date of Termination shall
immediately become exercisable and shares of Common Stock of the Company
received upon exercise of any vested options will no longer be subject to a
right of repurchase by the Company, (B) the vesting schedule of each outstanding
restricted stock award shall be accelerated so that the number of shares that
would otherwise have first become free from conditions or restrictions during
the two-year period following the Date of Termination shall immediately become
free from conditions or restrictions and the aggregate number of shares free
from conditions or restrictions under such award will no longer be subject to a
right of repurchase by the Company and (C) notwithstanding any provision in any
applicable option agreement to the contrary, each such option shall continue to
be exercisable by the Executive (to the extent such option was exercisable on
the Date of Termination) for a period of six months following the Date of
Termination (or the remainder of the option term if less than six months);

                    (ii) the Company shall pay to the Executive in a lump sum in
cash within 30 days after the Date of Termination the aggregate of the following
amounts:

                        (1) the sum of (A) the Executive's base salary through
the Date of Termination, (B) the product of (x) the annual bonus paid or payable
(including any bonus or portion thereof which has been earned but deferred) for
the most recently completed fiscal year and (y) a fraction, the numerator of
which is the number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365 and (C) the amount of any
compensation previously deferred by the Executive (together with any accrued
interest or earnings thereon) and any accrued vacation pay, in each case to the
extent not previously paid (the sum of the amounts described in clauses (A),
(B), and (C) shall be hereinafter referred to as the "Accrued Obligations"); and

                        (2) the amount equal to (A) the Executive's base salary
for the six months prior to the Date of Termination plus (B) 50% of the
Executive's annual bonus opportunity under the Company's bonus plan for the most
recently completed fiscal year;

                    (iii) for 12 months after the Date of Termination, or such
longer period as may be provided by the terms of the appropriate plan, program,
practice or policy, the Company shall continue to provide benefits to the
Executive and the Executive's family at least equal to those which would have
been provided to them if the Executive's employment had not been terminated, in
accordance with the applicable Benefit Plans in effect on the Measurement Date
or, if more favorable to the Executive and his or her family, in effect
generally at any time thereafter with respect to other peer executives of the
Company and its affiliated companies; provided, however, that if the Executive
becomes reemployed with another employer and is eligible to receive a particular
type of benefits (e.g., health insurance benefits) from such employer on terms
at least as favorable to the Executive and his or her family as those being
provided by the Company, then the Company shall no longer be required to provide
those particular benefits to the Executive and his or her family;


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                    (iv) to the extent not previously paid or provided, the
Company shall timely pay or provide to the Executive any other amounts or
benefits required to be paid or provided or which the Executive is eligible to
receive following the Executive's termination of employment under any plan,
program, policy, practice, contract or agreement of the Company and its
affiliated companies (such other amounts and benefits shall be hereinafter
referred to as the "Other Benefits"); and

                    (v) for purposes of determining eligibility (but not the
time of commencement of benefits) of the Executive for retiree benefits to which
the Executive is entitled, the Executive shall be considered to have remained
employed by the Company until 12 months after the Date of Termination.

                (b) Termination for Death or Disability. If the Executive's
employment with the Company is terminated by reason of the Executive's death or
Disability within 12 months following the Change in Control Date, then the
Company shall (i) pay the Executive (or his or her estate, if applicable), in a
lump sum in cash within 30 days after the Date of Termination, the Accrued
Obligations and (ii) timely pay or provide to the Executive the Other Benefits.

                (c) Resignation without Good Reason; Termination for Cause. If
the Executive voluntarily terminates his or her employment with the Company
within 12 months following the Change in Control Date, excluding a termination
for Good Reason, or if the Company terminates the Executive's employment with
the Company for Cause within 12 months following the Change in Control Date,
then the Company shall (i) pay the Executive, in a lump sum in cash within 30
days after the Date of Termination, the sum of (A) the Executive's annual base
salary through the Date of Termination and (B) the amount of any compensation
previously deferred by the Executive, in each case to the extent not previously
paid, and (ii) timely pay or provide to the Executive the Other Benefits.

            4.2 Mitigation. The Executive shall not be required to mitigate the
amount of any payment or benefits provided for in this Section 4 by seeking
other employment or otherwise. Further, except as provided in Section
4.1(a)(iii), the amount of any payment or benefits provided for in this Section
4 shall not be reduced by any compensation earned by the Executive as a result
of employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by the Executive to the Company or otherwise.


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      5. Disputes.

            5.1 Settlement of Disputes; Arbitration. All claims by the Executive
for benefits under this Agreement shall be directed to and determined by the
Board of Directors of the Company and shall be in writing. Any denial by the
Board of Directors of a claim for benefits under this Agreement shall be
delivered to the Executive in writing and shall set forth the specific reasons
for the denial and the specific provisions of this Agreement relied upon. The
Board of Directors shall afford a reasonable opportunity to the Executive for a
review of the decision denying a claim. Any further dispute or controversy
arising under or in connection with this Agreement shall be settled exclusively
by arbitration in Boston, 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.

            5.2 Expenses. The Company agrees to pay as incurred, to the full
extent permitted by law, all legal, accounting and other fees and expenses which
the Executive may reasonably incur as a result of any claim or contest
(regardless of the outcome thereof) by the Company, the Executive or others
regarding the validity or enforceability of, or liability under, any provision
of this Agreement or any guarantee of performance thereof (including as a result
of any contest by the Executive regarding the amount of any payment or benefits
pursuant to this Agreement), plus in each case interest on any delayed payment
at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the
Internal Revenue Code of 1986, as amended.

      6. Successors.

            6.1 Successor to Company. The Company shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business or assets of the Company expressly to
assume and agree to perform this Agreement to the same extent that the Company
would be required to perform it if no such succession had taken place. Failure
of the Company to obtain an assumption of this Agreement at or prior to the
effectiveness of any succession shall be a breach of this Agreement and shall
constitute Good Reason if the Executive elects to terminate employment, except
that for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination. As used in
this Agreement, "Company" shall mean the Company as defined above and any
successor to its business or assets as aforesaid which assumes and agrees to
perform this Agreement, by operation of law or otherwise.

            6.2 Successor to Executive. This Agreement shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any amount would still
be payable to the Executive or his or her family hereunder if the Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to the executors, personal
representatives or administrators of the Executive's estate.

      7. Notice. All notices, instructions and other communications given
hereunder or in connection herewith shall be in writing. Any such notice,
instruction or communication shall be sent either (i) by registered or certified
mail, return receipt requested, postage prepaid, or (ii)


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prepaid via a reputable nationwide overnight courier service, in each case
addressed to the Company, at 52 Second Avenue, Waltham, Massachusetts 02451, and
to the Executive at the Executive's address indicated on the signature page of
this Agreement (or to such other address as either the Company or the Executive
may have furnished to the other in writing in accordance herewith). Any such
notice, instruction or communication shall be deemed to have been delivered five
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, or one business day after it is sent via a reputable
nationwide overnight courier service. Either party may give any notice,
instruction or other communication hereunder using any other means, but no such
notice, instruction or other communication shall be deemed to have been duly
delivered unless and until it actually is received by the party for whom it is
intended.

      8. Miscellaneous.

            8.1 Employment by Subsidiary. For purposes of this Agreement, the
Executive's employment with the Company shall not be deemed to have terminated
solely as a result of the Executive continuing to be employed by a wholly-owned
subsidiary of the Company.

            8.2 Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

            8.3 Injunctive Relief. The Company and the Executive agree that any
breach of this Agreement by the Company is likely to cause the Executive
substantial and irrevocable damage and therefore, in the event of any such
breach, in addition to such other remedies which may be available, the Executive
shall have the right to specific performance and injunctive relief.

            8.4 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the internal laws of the
Commonwealth of Massachusetts, without regard to conflicts of law principles.

            8.5 Waivers. No waiver by the Executive at any time of any breach
of, or compliance with, any provision of this Agreement to be performed by the
Company shall be deemed a waiver of that or any other provision at any
subsequent time.

            8.6 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but both of which together shall
constitute one and the same instrument.

            8.7 Tax Withholding. Any payments provided for hereunder shall be
paid net of any applicable tax withholding required under federal, state or
local law.

            8.8 Entire Agreement. This Agreement sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto in respect of the
subject matter contained herein; and any prior agreement of the parties hereto
in respect of


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the subject matter contained herein is hereby terminated and cancelled.
Notwithstanding the foregoing, this Agreement shall not limit, and shall be in
addition to, any rights the Executive may also have or be entitled to on the
date hereof or in the future from time to time with respect to the acceleration
of options pursuant to any equity plan of the Company or of a subsidiary of the
Company (as administered by the relevant plan administrator), any option
agreement or any other written documentation executed or assumed by or on behalf
of the Company or of a subsidiary of the Company.

            8.9 Amendments. This Agreement may be amended or modified only by a
written instrument executed by both the Company and the Executive.

            8.10 Executive's Acknowledgements. The Executive acknowledges that
he or she: (a) has read this Agreement; (b) has been represented in the
preparation, negotiation, and execution of this Agreement by legal counsel of
the Executive's own choice or has voluntarily declined to seek such counsel; (c)
understands the terms and consequences of this Agreement; and (d) understands
that the law firm of Hale and Dorr LLP is acting as counsel to the Company in
connection with the transactions contemplated by this Agreement, and is not
acting as counsel for the Executive.

                      [the next page is the signature page]


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      IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first set forth above.

                                    NETEGRITY, INC.

                                    By:   Regina O. Sommer
                                          ---------------------------------
                                             Regina O. Sommer

                                    Title: Chief Financial Officer

                                    /s/  Stephanie A. Feraday
                                    ---------------------------------------
                                            Stephanie A. Feraday

                                    Address:

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