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                                                                   EXHIBIT 10.18

                                   RETEK INC.

                 RETENTION AND SEVERANCE PLAN FOR KEY EMPLOYEES

      1.    PURPOSE.

      The Board of Directors of Retek Inc., a corporation organized under the
laws of the State of Delaware, has recognized that the possibility of a Change
in Control (as hereinafter defined) exists and that the threat or the occurrence
of a Change in Control can result in significant distractions to its key
management personnel because of the uncertainties inherent in such a situation.
The Board has determined that it is essential and in the best interest of Retek
Inc. and its stockholders to retain the services of certain key employees (the
"KEY EMPLOYEES") in the event of a threat or occurrence of a Change in Control
and to ensure such Key Employees' continued dedication and efforts. Therefore,
in order to induce the Key Employees to remain in the employ of Retek Inc.,
particularly in the event of a threat or the occurrence of a Change in Control,
the Board has adopted this Retention and Severance Plan for Key Employees.
Capitalized terms that are not otherwise defined in the context in which they
first appear are defined in Section 2 below.

      2.    DEFINITIONS.

      "BOARD" shall mean the Board of Directors of the Company.

      "CAUSE" shall mean a Participant's (i) conviction of a felony (from which
no further appeals have been or can be taken), or (ii) gross misconduct as an
employee of the Company that is materially injurious to the financial status or
reputation of the Company. No act or failure to act on a Participant's part
shall be deemed to be a termination for Cause if done, or omitted to be done, in
good faith, and with the reasonable belief that the action or omission was in
the best interests of the Company.

      "CHANGE IN CONTROL" shall mean any of the following events:

            (i)   a dissolution or liquidation of the Company;

            (ii)  a merger or consolidation in which the Company is not the
      surviving corporation (other than a merger or consolidation with a
      wholly-owned subsidiary, a reincorporation of the Company in a different
      jurisdiction, or other transaction in which there is no substantial change
      in the stockholders of the Company or their relative stock holdings);

            (iii) a merger in which the Company is the surviving corporation but
      after which the stockholders of the Company (other than any stockholder
      which merges (or which owns or controls another corporation which merges)
      with the Company in such merger) cease to own their shares or other equity
      interests in the Company;

            (iv)  the sale of all or substantially all of the assets of the
      Company; or

            (v)   the acquisition, sale or transfer of more than 50% of the
      outstanding common
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      stock of the Company by tender offer or similar transaction.

      "CHANGE IN CONTROL DATE" shall mean the date of the consummation of a
Change in Control.

      The "COMPANY" shall mean Retek Inc., a corporation organized under the
laws of the State of Delaware, and shall include the "Successors and Assigns" of
Retek Inc. (as such term is hereinafter defined).

      "COMPENSATION COMMITTEE" shall mean the Compensation Committee of the
Board.

      "CONSULTING PERIOD" shall mean either (i) the period beginning on the
Employment Termination Date and continuing until the second anniversary of such
date if a Participant is employed by the Company on a Change in Control Date or
(ii) the period beginning on the Change in Control Date and continuing until the
second anniversary of such date if a Participant is on an approved leave of
absence, as described under Section 3(d) below, on such Change in Control Date.

      "DISABILITY" shall mean, with respect to any period of the Term prior to
the Employment Termination Date, a physical or mental infirmity which impairs a
Participant's ability to substantially perform such Participant's duties as an
employee with the Company for one hundred eighty (180) days or more during any
twelve (12) month period and such Participant has not returned to full time
employment prior to the Employment Termination Date.

      "EFFECTIVE DATE" shall mean the date that the Retention Plan is approved
by the Compensation Committee.

      "EMPLOYMENT TERMINATION DATE" shall mean the date of a Participant's
Involuntary Termination.

      The "EQUITY PLAN" shall mean the Retek, Inc. 1999 Equity Incentive Plan,
as amended from time to time, and any successor plan.

      "GOOD REASON" shall mean the occurrence of any of the events or conditions
described in subsections (i) through (vi) below; PROVIDED, HOWEVER, that a
Participant gives the Company thirty (30) days' written notice of his or her
intent to resign for Good Reason (during which time the Company will have an
opportunity to correct the condition constituting "Good Reason"):

            (i)   A Participant's good faith determination that any of the
      following has occurred:

                  (1)   the assignment to a Participant of any duties or
            responsibilities which are substantially inconsistent with a
            Participant's responsibilities as in effect immediately prior to
            such assignment; or

                  (2)   any removal of a Participant from or failure to
            reappoint or reelect a Participant to any of such offices or
            positions, except in connection with the termination of a
            Participant's employment for Disability, Cause, as a result of a
            Participant's death, or by a Participant other than for Good Reason;

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                  (ii)  a reduction in a Participant's base salary;

                  (iii) the relocation by the Company of a Participant's
      principal workplace to a location that is more than 50 miles from the
      location of such principal workplace as of the Effective Date;

                  (iv)  a material reduction by the Company in the kind or level
      of employee benefits (other than salary) to which a Participant is
      entitled as of the Effective Date;

                  (v)   any material breach by the Company of any provision of
      this Retention Plan or any employment agreement between the Company and a
      Participant; or

the failure of the Company to obtain an agreement from any Successors and
Assigns to assume this Retention Plan, as contemplated in Section 9(d) hereof.

      "INVOLUNTARY TERMINATION" shall mean the termination of a Participant's
employment with the Company either (i) by the Company due to a Participant's
Disability, (ii) by the Company for reasons other than for Cause, (iii) by a
Participant for Good Reason or (iv) as a consequence of a Participant's death.

      "PARTICIPANT" a person designated by the Plan Committee and approved by
the Compensation Committee as a participant in the Retention Plan; PROVIDED,
HOWEVER, that the Plan Committee, with the approval of the Compensation
Committee, may cancel any Participant's participation in the Retention Plan
subject to and in accordance with the terms of Section 7 hereof.

      "PLAN COMMITTEE" shall mean a committee consisting of the Company's Chief
Executive Officer, Chief Financial Officer, Chief Operating Officer, and Vice
President -- Human Resources.

      "POTENTIAL CHANGE IN CONTROL PERIOD" means the period beginning on the
date of execution of an agreement with respect to a transaction the consummation
of which would constitute or result in a Change in Control, and ending on either
the date immediately following the Change in Control Date or the date on which
such agreement is terminated or the transaction contemplated therein otherwise
is abandoned; PROVIDED, HOWEVER, any Potential Change in Control Period must
commence prior to the seventh anniversary of the Effective Date. In the event
that any Potential Change in Control Period does not result in a Change in
Control, a subsequent Potential Change in Control may occur during the Term.

      "RETENTION PLAN" shall mean this Retek Inc. Retention and Severance Plan
for Key Employees, as amended from time to time.

      "SUCCESSORS AND ASSIGNS" shall mean either a successor corporation or
entity or a corporation or other entity acquiring all or substantially all of
the assets and business of the Company (including this Retention Plan) whether
by operation of law or otherwise.

      "TERM" shall mean the period beginning on the Effective Date and
continuing, as applicable, until either (i) the seventh anniversary of the
Effective Date, if a Change in Control Date has not occurred prior to such
anniversary and a Potential Change in Control Period is not in effect on such
anniversary date, (ii) the second anniversary of a Change in Control Date, or
(iii) such later date as

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the Plan Committee shall determine; PROVIDED, HOWEVER, that in the event that
there is a Potential Change in Control Period in effect on the seventh
anniversary of the Effective Date, the Term shall extend until either (i) such
Potential Change in Control Period ends without the occurrence of a Change in
Control or (ii) the second anniversary of a Change in Control that occurs in
connection with such Potential Change in Control Period. The end of the Term
shall not, in any way, adversely impact any Participant's right to receive the
payments and benefits set forth in this Retention Plan according to its terms.

      "WAIVER AND RELEASE" shall have the meaning set forth in Section 3(c)
below.

      3.    ENTITLEMENTS.

            (a)   GENERAL. During the Term, each Participant in the Retention
Plan will be entitled to the payments and benefits described in this Section 3
in accordance to the terms and provisions set forth below.

            (b)   UPON THE OCCURRENCE OF A CHANGE IN CONTROL DATE WHEN A
PARTICIPANT IS AN EMPLOYEE. If, during the Term, a Change in Control occurs and
a Participant is employed by the Company on the Change in Control Date, with
respect to any stock options held by such Participant, one of the following
shall apply:

            (i)   If the acquiring entity otherwise agrees to assume the
      Participant's outstanding stock options or provide the Participant with
      substitute stock options that are subject to substantially the same terms
      as the options exchanged therefore, immediately prior to the Change in
      Control Date, any stock options held by such Participant that would have
      become vested on or before the first anniversary of the Change in Control
      Date shall become immediately vested and exercisable.

            (ii)  If the acquiring entity does not assume the Participant's
      outstanding stock options or provide the Participant with substitute stock
      options that are subject to substantially the same terms as the options
      exchanged therefore, immediately prior to the Change in Control Date, all
      stock options held by such Participant shall become immediately vested and
      exercisable.

            (c)   UPON THE OCCURRENCE OF AN INVOLUNTARY TERMINATION ON OR AFTER
THE CHANGE IN CONTROL DATE. In the event that a Participant suffers an
Involuntary Termination during the period beginning on the Change in Control
Date and ending on the second anniversary of such date, such Participant shall
be entitled to the payments and benefits described in this Section 3(c);
PROVIDED, HOWEVER, that, except as provided in Section 3(c)(iv) below, unless a
Participant becomes deceased prior to the time he or she is able to execute the
waiver and release, the Participant's entitlement to the payments and benefits
described in this Section 3(c) shall be contingent upon execution by the
Participant of a valid and enforceable mutual waiver and release of claims and
restrictive covenant agreement in substantially the form set forth at Exhibit A
hereto (the "WAIVER AND RELEASE").

            (i)   As of the Employment Termination Date, all Company stock
      options held by the Participant shall become fully vested and exercisable.

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            (ii)  As of the Employment Termination Date, the Participant's
      employment with the Company shall terminate and the Participant shall
      become, as of such date, a consultant for the Company. The Participant
      shall continue to serve as a consultant of the Company until the end of
      the Consulting Period. During the Consulting Period, the Participant shall
      have the duties and responsibilities set forth in Section 4 below and such
      other duties and responsibilities as may otherwise be agreed by the
      Participant. The parties hereto acknowledge and agree that the Participant
      shall continue in the service of the Company during the Consulting Period
      for purposes of any unexercised stock options held by the Participant as
      of the Employment Termination Date and such stock options shall remain
      exercisable throughout the Consulting Period in accordance with the terms
      of the Equity Plan.

            (iii) Subject to the terms of Section 3(c)(iv) below, as soon as
      practicable after the execution by a Participant of the Waiver and
      Release, the Company shall pay the Participant:

                  (A)   a lump sum cash amount equal to his or her then
            effective annual base salary multiplied by 1.5; plus

                  (B)   a lump sum cash amount equal to his or her then
            effective annual target bonus multiplied by 1.5.

            (iv)  In the event that the Company does not provide a Participant
      with a Waiver and Release on the Employment Termination Date or within
      five working days thereafter, such Participant will immediately become
      entitled to the payments and benefits described in Sections 3(c)(i)
      through 3(c)(iii) above even though the Participant has not executed a
      Waiver and Release.

            (v)   Beginning on the Employment Termination Date and continuing
      until the end of the eighteenth month occurring thereafter, a Participant
      shall continue to participate in all benefit plans (to the extent possible
      under the terms of such plans) and to receive all fringe benefits from the
      Company to which he or she was entitled on the Change in Control Date,
      PROVIDED that if the Participant obtains subsequent employment and such
      employment provides the Participant substantially similar or more generous
      fringe benefits, the Company's obligations in this regard shall cease on
      the date that the Participant becomes entitled to receive such benefits
      from his or her subsequent employer.

            (vi)  In the event that a Participant dies during the Consulting
      Period, the Participant's beneficiary or estate shall be entitled to the
      benefits set forth in this Section 3(c), to the extent possible under the
      terms of each applicable benefit plan, for the remainder of the Consulting
      Period, including, without limitation, the continued exerciseability of
      any stock options held by the Participant prior to this death. For
      purposes of this Agreement, any reference to the Participant shall be
      deemed to refer to the Participant's beneficiary or estate, as applicable,
      after the Participant's death.

            (vii) Except as expressly set forth in this Section 3(c) or in
      connection with the services the Participant performs in compliance with
      his or her obligations under Section 4

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      below, neither the Participant nor the Participant's estate shall be
      entitled to any compensation or benefits from the Company during the
      Consulting Period.

            (d)   UPON A CHANGE IN CONTROL DATE OCCURRING SUBSEQUENT TO AN
ASSESSMENT PERIOD OR AN INVOLUNTARY TERMINATION (OTHER THAN DUE TO DEATH) DURING
A POTENTIAL CHANGE IN CONTROL PERIOD. If at any time after the Effective Date
and prior to a Change in Control Date a Participant suffers an Involuntary
Termination (other than an Involuntary Termination due to death), such
Participant will become subject to the terms and conditions of this Section
3(d).

            (i)   If a Participant suffers an Involuntary Termination (other
      than an Involuntary Termination due to the Participant's death) at any
      time on or after the Effective Date, and the Employment Termination Date
      is not within a Potential Change in Control Period, during the six-month
      period after the Employment Termination Date (the "ASSESSMENT PERIOD") the
      Participant shall be deemed to be on an unpaid approved leave of absence,
      including, without limitation, for purposes of the Equity Plan. During the
      Assessment Period, the vesting of the Participant's stock options under
      the Equity Plan shall be suspended. If the Compensation Committee, in its
      sole discretion, reinstates the Participant's employment with the Company
      during the Assessment Period, the Participant's stock options will be
      vested, as of the date of rehire, in the same manner as if such vesting
      had not been suspended during the Assessment Period. If a Potential Change
      in Control Period does not begin during the Assessment Period and the
      Participant is not rehired by the Company on or before the end of the
      Assessment Period, the Participant's service with the Company shall
      terminate for all purposes, including for purposes of the Equity Plan, on
      the last day of the Assessment Period. If, at any time after the Effective
      Date, the Participant suffers an Involuntary Termination (other than an
      Involuntary Termination due to the Participant's death), either (A) during
      a Potential Change in Control Period or (B) during an Assessment Period
      which ends with the commencement of a Potential Change in Control Period,
      the Participant shall be deemed to be on an unpaid approved leave of
      absence, including, without limitation, for purposes of the Equity Plan,
      beginning on the Employment Termination Date and continuing until the end
      of the Potential Change in Control Period.

            (ii)  In the event that a Change in Control occurs in connection
      with a Potential Change in Control Period during which a Participant is on
      an approved leave of absence as described above, such Participant shall be
      entitled to the payments and benefits described in this Section 3(d)(ii);
      PROVIDED, HOWEVER, that, except as provided in Section 3(d)(ii)(D) below,
      unless a Participant becomes deceased prior to the time he or she is able
      to execute the Waiver and Release, the Participant's entitlement to the
      payments and benefits described in this Section 3(d) shall be contingent
      upon execution by the Participant of a valid and binding Waiver and
      Release.

                  (A)   Immediately prior to the Change in Control Date, all
            stock options exercisable for Company stock held by the Participant
            shall become fully vested and exercisable; PROVIDED, HOWEVER, that
            in the event that for any reason the Change in Control Date does not
            occur the status of the Participant's stock options shall revert to
            their unvested condition as in effect prior to such acceleration.

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                  (B)   As of the Change in Control Date, the Participant's
            approved leave of absence and employment with the Company shall
            terminate and the Participant shall become, as of such date, a
            consultant for the Company. The Participant shall continue to serve
            as a consultant of the Company until the end of the Consulting
            Period. During the Consulting Period, the Participant shall have the
            duties and responsibilities set forth in Section 4 below and such
            other duties and responsibilities as may otherwise be agreed by the
            Participant. The parties hereto acknowledge and agree that the
            Participant shall continue in the service of the Company during the
            Consulting Period for purposes of any unexercised stock options held
            by the Participant as of the Change in Control Date and such stock
            options shall remain exercisable throughout the Consulting Period in
            accordance with the terms of the Equity Plan.

                  (C)   Subject to the terms of Section 3(d)(ii)(D) below, as
            soon as practicable after the execution by a Participant of the
            Waiver and Release, the Company shall pay the Participant:

            (i)   a lump sum cash amount equal to his or her annual base salary,
      as in effect on the Employment Termination Date, multiplied by 1.5; plus

            (ii)  a lump sum cash amount equal to his or her annual target
      bonus, as in effect on the Employment Termination Date, multiplied by 1.5.

                  (D)   In the event that the Company does not provide a
            Participant with a Waiver and Release on the Change in Control Date
            or within five working days thereafter, such Participant will
            immediately become entitled to the payments and benefits described
            in Section 3(d)(ii) even though the Participant has not executed a
            Waiver and Release.

                  (E)   Beginning on the Change in Control Date and continuing
            until the end of the eighteenth month occurring thereafter, a
            Participant shall continue to participate in all benefit plans (to
            the extent possible under the terms of such plans) and to receive
            all fringe benefits from the Company to which he or she was entitled
            on the Employment Termination Date, PROVIDED that if the Participant
            obtains subsequent employment and such employment provides the
            Participant substantially similar or more generous fringe benefits,
            the Company's obligations in this regard shall cease on the date
            that the Participant becomes entitled to receive such benefits from
            his or her subsequent employer.

                  (F)   In the event that a Participant dies during the
            Consulting Period, the Participant's estate shall be entitled to the
            benefits set forth in this Section 3(d), to the extent possible
            under the terms of each applicable benefit plan, for the remainder
            of the Consulting Period, including, without limitation, the
            continued exerciseability of any stock options held by the
            Participant prior to this death. For purposes of this Agreement, any
            reference to the Participant shall be deemed to refer to the
            Participant's beneficiary or estate, as applicable, after the
            Participant's death.

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                  (G)   Except as expressly set forth in this Section 3(d) or in
            connection with the services the Participant performs in compliance
            with his or her obligations under Section 4 below, neither the
            Participant nor the Participant's estate shall be entitled to any
            compensation or benefits from the Company during the Consulting
            Period.

            (e)   INVOLUNTARY TERMINATION DUE TO DEATH DURING A POTENTIAL CHANGE
IN CONTROL PERIOD. In the event that a Participant dies during a Potential
Change in Control Period, the terms of this Section 3(e) shall apply to the
Participant's estate or beneficiary, as applicable.

            (i)   If the Participant dies during a Potential Change in Control
      Period, as of the time of the Participant's death all his or her
      outstanding stock options shall become immediately vested (the portion of
      the Participant's stock options that becomes accelerated upon his or her
      death shall hereinafter be referred to as the "ACCELERATED OPTIONS");
      PROVIDED, HOWEVER, the Accelerated Options shall not be exercisable until
      immediately prior to the occurrence of a Change in Control Date in
      connection with such Potential Change in Control Period exercisable; and
      PROVIDED FURTHER, HOWEVER, that in the event that for any reason the
      Change in Control Date does not occur the status of the Participant's
      Accelerated Options shall revert to their unvested condition as in effect
      prior to such acceleration.

            (ii)  In the event that the Potential Change in Control Period
      results in a Change in Control, the Participant's beneficiary or estate
      shall be entitled to the benefits described in this Section 3(e)(ii).

                  (A)   Immediately prior to the Change in Control Date, the
            Accelerated Options shall become exercisable and shall remain
            exercisable until the second anniversary of the Change in Control
            Date.

                  (B)   As soon as practicable after the Change in Control Date,
            the Company shall pay the Participant's beneficiary or estate:

                        (I)   a lump sum cash amount equal to the Participant's
                  base salary as in effect on the date of death multiplied by
                  1.5; plus

                        (II)  a lump sum cash amount equal to the Participant's
                  target annual bonus as in effect on date of death multiplied
                  by 1.5.


            (f)   MITIGATION. The Participants shall not be required to mitigate
the amount of any payment provided for in this Retention Plan by seeking other
employment or otherwise, and no such payment shall be offset or reduced by the
amount of any compensation or benefits provided to any Participant in any
subsequent employment, PROVIDED that if a Participant obtains subsequent
employment and such employment provides the Participant substantially similar or
more generous fringe benefits, the Company's obligations in this regard shall
cease on the date that the Participant becomes entitled to receive such benefits
from his or her subsequent employer.

            (g)   NO LIMITATION ON ADDITIONAL BENEFITS. Except as expressly
provided in Section 3(h) below, the compensation and benefits provided for in
this Section 3 shall not limit any additional benefits to which a Participant
may be entitled (except pursuant to any severance or termination policies,
plans, programs or practices).

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            (h)   SPECIAL TERMS APPLICABLE TO NON-US PERSONS. If a Participant
is subject to the laws of a jurisdiction other than the United States of America
and such jurisdiction provides the Participant with any statutory rights to
compensation or benefits in the event of his or her Involuntary Termination or
upon a Change in Control, the Participant or the Participant's estate, as the
case may be, shall be entitled to receive the compensation and benefits set
forth in this Agreement only to the extent that such compensation and benefits
exceed what the Participant is otherwise entitled to receive under such
statutes. The Company hereby agrees to use its best efforts to equitably
determine the benefits that the Participant shall be entitled to receive under
this Agreement in the event that the Participant is subject to this Section
3(h).

      4.    CONSULTING SERVICES TO THE COMPANY.

      During the Consulting Period, the Company may contact the Participant for
brief consultations by telephone or email, not to exceed one hour per month in
the aggregate.

      5.    TAX GROSS-UP PAYMENTS.

            (a)   ENTITLEMENT. In the event that any of the payments or benefits
due to a Participant (including, without limitation, any accelerated vesting of
equity-based awards) provided for in this Agreement or any other payments or
benefits due to a Participant (individually, a "PAYMENT", and collectively,
"PAYMENTS") (i) constitute "parachute payments" within the meaning of Section
280G of the Internal Revenue Code of 1986, as amended (the "CODE"), and (ii) but
for this Section, would be subject to the excise tax imposed by Section 4999 of
the Code (the "EXCISE TAX"), then the Participant shall receive a full gross-up
("TAX GROSS-UP") for any and all Excise Taxes imposed.

            (b)   DETERMINATION OF AMOUNT. An initial determination as to
whether the Excise Tax will be imposed, the amount of the Excise Tax and the
calculated Tax Gross-up shall be made, at the Company's expense, by the
accounting firm that is the Company's independent accounting firm as of the date
of the Change in Control (the "ACCOUNTING FIRM"). The Accounting Firm shall
provide its determination (the "DETERMINATION"), together with detailed
supporting calculations and documentation, to the Company and the Participant
within ten (10) days of the Employment Termination Date, if applicable, or such
other time as requested by the Company or by the Participant (provided the
Participant reasonably believes that any of the Payments may be subject to the
Excise Tax) and, if the Accounting Firm determines that no Excise Tax is payable
by the Participant with respect to a Payment or Payments, it shall furnish the
Participant with an opinion reasonably acceptable to the Participant that no
Excise Tax will be imposed with respect to any such Payment or Payments. Within
ten (10) days of the delivery of the Determination to the Participant, the
Participant shall have the right to dispute the Determination (the "DISPUTE").
If there is no Dispute, the Determination shall be binding, final and conclusive
upon the Company and the Participant.

            (c)   OVERPAYMENTS AND UNDERPAYMENTS. As a result of uncertainty in
the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Tax Gross-Up
payments not made by the Company should have been made ("UNDERPAYMENT"), or that
Tax Gross-Up payments will have been made by the

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Company which should not have been made ("OVERPAYMENTS"). In either such event,
the Accounting Firm shall determine the amount of the Underpayment or
Overpayment that has occurred. In the case of an Underpayment, the amount of
such Underpayment shall be promptly paid by the Company to or for the benefit of
the Participant. In the case of an Overpayment, the Participant shall, at the
direction and expense of the Company, take such steps as are reasonably
necessary (including the filing of returns and claims for refund), follow
reasonable instructions from, and procedures established by, the Company, and
otherwise reasonably cooperate with the Company to correct such Overpayment.

      6.    EMPLOYMENT TAXES.

      All payments made pursuant to this Retention Plan will be subject to
applicable withholdings of income and employment taxes.

      7.    ADMINISTRATION.

            (a)   GENERAL. Except where the Retention Plan provides otherwise,
the Retention Plan shall be administered by the Plan Committee, which shall have
full authority to interpret the Retention Plan, to establish rules and
regulations relating to the Retention Plan, and to make all other determinations
and take all other actions necessary or appropriate for the proper
administration of the Retention Plan. The Plan Committee's interpretation of the
Retention Plan, and all actions taken within the scope of its authority, shall
be final and binding on members of the Company, Participants, employees, former
employees and beneficiaries.

            (b)   SELECTION OF PARTICIPANTS; REMOVAL OF PARTICIPANTS. The Plan
Committee shall, subject to the approval of the Compensation Committee and
subject to the terms of Section 7(d) below, determine who shall participate in
the Retention Plan. The Plan Committee shall present the name or names of any
proposed Participant(s) to the Compensation Committee in writing and the
Compensation Committee shall select which of such proposed Participants shall
become Participants in the Retention Plan. Conversely, the Plan Committee, in
its sole discretion but subject to the approval of the Compensation Committee
and the terms of Section 7(d) below, may discontinue any Participant's
participation in the Retention Plan at any time for any reason.

            (c)   AMENDMENTS TO THE RETENTION PLAN. The Plan Committee may,
subject to the approval of the Compensation Committee and subject to the terms
of Section 7(d) below, amend, modify or terminate this Retention Plan, in whole
or in part, at any time and from time to time, including, without limitation,
with respect to increasing or decreasing the payments and benefits provided
under this Retention Plan.

            (d)   MODIFICATIONS/CHANGE IN PARTICIPANTS PROHIBITED AND VOID
DURING CERTAIN PERIODS. No amendment or modification and no addition or removal
of Participants may be effected during a Potential Change in Control Period or
at any time on or after a Change in Control Date. In addition, any modification,
amendment, addition of Participants or removal of and Participants that occurs
during the six-month period prior to the commencement of a Change in Control
Period shall be void AB INITIO upon the commencement of such Potential Change in
Control Period.

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      8.    DESIGNATION OF BENEFICIARY.

      A Participant may designate a beneficiary or beneficiaries who, in the
event of the Participant's death prior to the payment of any Payment that is
otherwise due hereunder, shall receive payment of any such payment due under the
Retention Plan. Such designation shall be made by the Participant on a form
prescribed by the Company. The Participant may, at any time, change or revoke
such designation. A beneficiary designation, or revocation of a prior
beneficiary designation, will be effective only if it is made in writing on a
form provided by the Company, signed by the Participant and received by its the
Company's General Counsel. If the Participant does not designate a beneficiary
or the beneficiary dies prior to receiving the entire amount of any payment
payable under the Retention Plan, such amount shall be paid to the Participant's
estate. If the beneficiary dies after receiving any payment of a payment, any
amounts remaining to be paid shall be paid to the beneficiary's estate.

      9.    MISCELLANEOUS PROVISIONS.

            (a)   VOLUNTARY ARRANGEMENT. This Retention Plan is completely
voluntary on the part of the Company. No employee or other person shall have any
claim or right to participate in this Retention Plan other than as provided
hereunder. Neither the establishment of this Retention Plan, nor any action
taken hereunder, shall be construed as giving any employee any right to be
retained in the employ of the Company or shall affect the terms and conditions
of any Participant's employment with the Company. Furthermore, except as
expressly set forth in the Retention Plan, a Participant may be removed from
participation in the Retention Plan by the Plan Committee, with the approval of
the Compensation Committee, at any time and for any reason.

            (b)   NON-TRANSFERABILITY. A Participant's right and interest under
the Retention Plan may not be assigned or transferred, except as provided in
Section 8 hereof, and any attempted assignment or transfer shall be null and
void and shall extinguish, in the Plan Committee's sole discretion, the
Company's obligation under the Retention Plan to make any payment with respect
to such Participant.

            (c)   UNFUNDED ARRANGEMENT. The Retention Plan shall be unfunded and
any payments made hereunder shall be paid from the general assets of the
Company. The Company shall not be required to establish any special or separate
fund, or to make any other segregation of assets, to assure payment of the
payments.

            (d)   SUCCESSORS. The Retention Plan shall be binding upon and inure
to the benefit of any successor or successors of the Company and the heirs and
beneficiaries of each Participant. In addition, the Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization, recapitalization or otherwise) to all or substantially all of
the business, assets or liabilities of the Company expressly to assume and to
agree to perform its obligations under the Retention Plan in the same manner and
to the same extent that the Company would be required to perform such
obligations if no such succession has taken place. Any reference to the Company
hereunder shall include any successor(s) to the Company.

            (e)   NOTICE. For the purposes of this Retention Plan, notices and
all other communications provided for in the Retention Plan shall be in writing
and shall be deemed to have been duly given when personally delivered or sent by
certified mail, return receipt requested,

                                       11
<PAGE>
postage prepaid, addressed to the respective addresses last given by each party
to the other, provided that all notices to the Company shall be directed to the
attention of the Chief Executive Officer. All notices and communications shall
be deemed to have been received on the date of delivery thereof or on the third
business day after the mailing thereof, except that notice of change of address
shall be effective only upon receipt.

            (f)   GOVERNING LAW. The Retention Plan shall be construed,
interpreted and governed in accordance with the laws of the State of Delaware
without reference to rules relating to conflicts of law.

            (g)   EFFECTIVE DATE. This Retention Plan shall be effective as of
the Effective Date.






                                       12
<PAGE>
EXHIBIT A

                      FORM OF WAIVER AND RELEASE OF CLAIMS

                              (COMPANY LETTERHEAD)

                                     [DATE]

[NAME]
[ADDRESS]


Dear [NAME]:

            This  letter agreement (the "AGREEMENT") reflects our mutual
agreement concerning the termination of your employment with Retek Inc., a
corporation organized under the laws of Delaware (the "COMPANY").

            1.    [STATE DATE OF TERMINATION--CHANGE IN CONTROL DATE OR
TERMINATION OF EMPLOYMENT] (the "EMPLOYMENT TERMINATION DATE").

            2.    Consideration. Subject to your execution of this Agreement and
your compliance with its terms and provided that you do not revoke your
acceptance of this Agreement during the Revocation Period described in Section 5
below, the Company agrees to pay and provide you with the payments and benefits
set forth in the Retek Inc. Retention and Severance Plan for Key Employees (the
"PLAN") in the manner set forth in the Plan and subject to the terms of the
Plan.

            3.    Mutual Release. For purposes of this mutual release, "EMPLOYEE
PARTIES" means, individually and collectively, you, your family members, your
estate, your beneficiaries, your heirs and your assigns and the estate,
beneficiaries, heirs and assigns of each of the foregoing and "COMPANY PARTIES"
means, individually and collectively, the Company, its present, former and
future shareholders, partners, limited partners, affiliates, direct and indirect
parents, subsidiaries, successors, directors, officers, employees, agents,
attorneys, heirs and assigns. The Employee Parties and the Company Parties
together shall hereinafter be referred to as the "RELEASED PARTIES".

            (a)   General Waiver and Release. In exchange for the mutual
consideration set forth herein, the receipt and adequacy of which are herein
acknowledged, and intending to be legally bound hereby, the Company, on the one
hand, and you, on the other hand, do hereby release and forever discharge the
Employee Parties and the Company Parties, respectively, from any and all claims,
actions, causes of action, suits, costs, controversies, judgments, decrees,
verdicts, damages, liabilities, attorneys' fees, covenants, contracts, and
agreements that you may have against the Company Parties or the Company may have
against the Employee Parties, or in the future may possess based on events
occurring during the term of your employment with the Company arising out of (i)
your employment relationship with or service as an employee or officer of the
Company or the termination of such relationship or service or (ii) any event,
condition, circumstance or obligation that occurred, existed or arose on or
prior to the date you sign this Agreement, with respect to each other,
including, but not limited to, any claims arising under Title VII of the Civil
Rights Act of 1964, the Rehabilitation Act of 1973, the Americans with
Disabilities Act of 1990, the
<PAGE>
Civil Rights Act of 1866, the Civil Rights Act of 1991, the Employee Retirement
Income Security Act of 1974, the Family Medical Leave Act of 1993, or any other
federal or state or local law or any foreign jurisdiction, whether such claim
arises under statute, common law or in equity, and whether or not any of the
Released Parties are presently aware of the existence of such claim, damage,
action or cause of action, suit or demand (collectively, including claims,
actions and causes of action set forth in Section 3(b) below, the "Claims"). You
and the Company also do forever release, discharge and waive any right you or
the Company may have to recover in any proceeding brought by any federal, state
or local agency against the Company Parties and the Employee Parties,
respectively, to enforce any laws. Each of the parties hereto agrees that the
value received as described in this Agreement shall be in full satisfaction of
any and all claims, actions or causes of action for payment or other benefits of
any kind that you may have against the Company Parties and that the Company may
have against the Employee Parties.

            (b)   ADEA Release. In further recognition of the above, you hereby
release and forever discharge each of the Company Parties from any and all
claims, actions and causes of action that you may have as of the date you sign
and deliver to the Company this Agreement arising under the federal Age
Discrimination in Employment Act of 1967, as amended, and the applicable rules
and regulations promulgated thereunder ("ADEA").

            (c)   No Impact on Obligations Under This Agreement. The releases
contained in this Section 3 do not, are not intended to and shall not be
interpreted to serve as a release or waiver by you or the Company with respect
to the respective rights and obligations set forth in this Agreement.

            (d)   No Impact on Indemnification Rights. The releases contained in
this Section 3 do not, are not intended to and shall not be interpreted to serve
as a release or waiver by you with respect to any indemnification rights you
have and such indemnification rights shall not be effected, modified or
extinguished by your execution of this Agreement.

            (e)   No Pending Litigation. You hereby represent and agree that you
have not filed, and will not file, any action, complaint, charge, grievance or
arbitration against any Company Party. The Company hereby represents and agrees
that the Company has not filed, and will not file, any action, complaint,
charge, grievance or arbitration against any Employee Party.

            (f)   No Right to Commence any Legal Action. You will not commence
or join any legal action, which term includes, without limitation, any demand
for arbitration proceedings and any complaint to any federal, state or local
agency, court or other tribunal, to assert any Claim released by you under
Section 3 against a Company Party. If you commence or join any such legal action
against a Company Party, you will promptly indemnify such Company Party for its
reasonable costs and attorneys' fees incurred in defending such action as well
as any monetary judgment obtained by you against any Company Party in such
action. Similarly, the Company will not commence or join any legal action, which
term includes, without limitation, any demand for arbitration proceedings and
any complaint to any federal, state or local agency, court or other tribunal, to
assert any Claim released by the Company under Section 3 against an Employee
Party. If the Company commences or joins any such legal action against an
Employee Party, the Company will promptly indemnify such Employee Party for its
reasonable costs and attorneys' fees incurred in defending such action as well
as any monetary judgment obtained by the Company against any Employee Party in
such action.

                                      A-2
<PAGE>
            (g)   Acknowledgment. By signing this Agreement, you hereby
acknowledge and confirm that you are providing the release and discharge set
forth in this Section 3 in exchange for consideration in addition to anything of
value to which you are already entitled. By signing this Agreement, you hereby
acknowledge and confirm that (i) you are hereby advised in writing by the
Company in connection with your resignation to consult with an attorney of your
choice prior to signing the Agreement and to have such attorney explain to you
the terms of the Agreement, including, without limitation, the terms relating to
your release of Claims arising under ADEA; (ii) you have read the Agreement
carefully and completely and understand each of the terms thereof; and (iii) you
were given not less than twenty-one (21) days to consider the terms of the
Agreement and to consult with an attorney of your choosing with respect thereto,
and that for a period of seven (7) days following your signing of this
Agreement, you have the option to revoke this Agreement in accordance with the
terms set forth in Section 5 below.

            4.    Incentive Stock Options. You hereby acknowledge and agree that
under the terms of the Plan, as of the expiration of the Revocation Period any
stock options you hold that are intended to be "incentive stock options," as
such term is defined in Section 422 of the Internal Revenue Code of 1986, as
amended, shall automatically convert to nonqualified stock options.

            5.    Restrictive Covenants

            (a)   Non-Solicitation. During the period commencing on the date of
this Agreement and continuing until the first anniversary thereof, you agree
that you shall not directly or indirectly, personally or through others, solicit
or attempt to solicit (on the your own behalf or on behalf of any other person
or entity) either (i) the employment of any employee of the Company or any of
the Company's affiliates or (ii) the business of any customer of the Company or
any of the Company's affiliates with whom the you had contact during your
employment with the Company.

            (b)   Non-Disclosure. You hereby acknowledge and agree that the
services performed by you on behalf of the Company were special, unique and
extraordinary in that, by reason of such employment, you have acquired
confidential information and trade secrets concerning the operation of the
Company, the use or disclosure of which could cause the Company substantial
losses and damages which could not be readily calculated and for which no remedy
at law would be adequate. Accordingly, you hereby covenant and agree with the
Company that you will not at any time, except with the prior written consent of
the Company, directly or indirectly, either disclose to any person, or use for
your personal benefit, any secret or confidential information that your have
learned by reason of your association with the Company. The term "CONFIDENTIAL
INFORMATION" means any information not previously disclosed or otherwise
available to the public or to the trade with respect to the Company's products,
facilities and methods, trade secrets and other intellectual property, systems,
procedures, manuals, confidential reports, product price lists, customer lists,
financial information, business plans, prospects or opportunities.

            6.    Successors. The rights and obligations under this Agreement
shall inure to any and all successors of the Company.

            7.    Revocation. You have the right to revoke this Agreement during
the seven-day period commencing immediately following the date you sign and
deliver this Agreement to the Company (the "REVOCATION PERIOD"). The period
shall expire at 5:00 p.m., Eastern [Standard] Time, on the last day of the
seven-day period; PROVIDED, HOWEVER, that if such seventh day is not a business
day, the period shall extend to 5:00 p.m. on the next succeeding business day.
In the event of any such revocation by you, the obligations of the Company under
this Agreement shall terminate

                                      A-3
<PAGE>
and be of no further force and effect as of the date of such revocation. No such
revocation by you shall be effective unless it is in writing and signed by you
and received by a representative of the Company prior to the expiration of the
Revocation Period.

            8.    Counterparts. The Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.

            Your  signature on the line below constitutes your agreement with
each provision contained herein.

                                             RETEK INC.


                                             By:
                                                 -------------------------------
                                             Name:
                                             Title:


ACCEPTED AND AGREED:


------------------------
[NAME]
Address:
Dated:                  , 20
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                                      A-4