<PAGE>

                                                                   Exhibit 10.26

                              BEA SYSTEMS, INC.
                            EMPLOYMENT AGREEMENT

          THIS EMPLOYMENT AGREEMENT, is entered into as of November 2, 2001,
between BEA Systems, Inc., a Delaware corporation (the "Company"), and
William T. Coleman III ("Employee").

                                   RECITALS
                                   --------

          A.     Employee entered into an Employment Agreement with the Company
dated September 1, 1999 (the "1999 Agreement"). The parties intend that this
Agreement shall supersede the 1999 Agreement in its entirety.

          B.     Company desires to obtain the continued services of Employee,
on its own behalf and on behalf of all existing and future Affiliated Companies
(defined to mean any corporation or other business entity or entities that
directly or indirectly controls, is controlled by, or is under common control
with the Company), and Employee desires to secure continued employment from the
Company upon the following terms and conditions.

                                   AGREEMENT
                                   ---------

ACCORDINGLY, THE PARTIES AGREE AS FOLLOWS:

     1. Position, Period of Employment.
        ------------------------------

          (a) Period of Employment. The Company hereby employs Employee to
              --------------------
render services to the Company in the position and with the duties and
responsibilities described in Section 1(b) for the period (the "Period of
Employment") commencing on the date of this Agreement and ending on the earlier
of (i) October 1, 2005; or (ii) the date Employee's employment or consultancy
with the Company is terminated in accordance with Section 3 below.

          (b) Position. Employee shall currently serve as the Company's Chief
              --------
Strategy Officer ("CSO") (or in such other position(s) as the Board of
Directors of the Company (the "Board") shall designate from time to time).
Employee shall devote his full time and attention and his best efforts to the
performance of the services customarily incident to such office and to the
performance of such other services as may be reasonably requested by the CEO of
the Company (the "CEO"). The Company shall retain full direction and control
of the means and methods by which Employee performs the above services and of
the place(s) at which such services are to be rendered. Employee shall also
continue as Chairman of the Board of Directors, until his death, resignation or
removal by the Board of Directors.

          (c) Other Activities. Except upon the prior written consent of the
              ----------------
Company as approved by the Board, Employee, during the Period of Employment,
will not (i) accept any other

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employment; (ii) engage, directly or indirectly, in any other business activity
(whether or not pursued for pecuniary advantage) that is or may be competitive
with, or that might place him in a competing position with that of the Company
or any Affiliated Company, as determined in the sole discretion of the Board; or
(iii) engage in any work or business activity of any kind outside those of the
Company but not including Employee's charitable or philanthropic activities.
Notwithstanding the foregoing, Employee may provide advisory services to Warburg
Pincus and its affiliated entities and portfolio companies during the Period of
Employment; provided, that such services and entities are not competitive with,
and do not place Employee in a competing position with that of, the Company or
any Affiliated Company, as determined in the sole discretion of the Board, and
that Employee has provided written notice to, and received the written approval
of, the Board to provide such services. For purposes of this Agreement,
"Affiliated Company" shall mean any person that directly or indirectly, through
one or more intermediaries, controls, is controlled by or is under common
control with the Company.

     2. Compensation, Benefits, Expenses.
        --------------------------------

          (a) Compensation. In consideration of the services to be rendered
              ------------
hereunder, including, without limitation, services to any Affiliated Company,
Employee shall be paid an annual salary of Five Hundred Thousand Dollars
($500,000.00), payable at the times and pursuant to the procedures regularly
established, and as they may be amended, by the Company during the Period of
Employment. This rate shall be reviewed in accordance with the Company's salary
review practices, and adjusted in the sole discretion of the Board to reflect
increases in the cost of living and such other increases as are awarded in
accordance with the Company's regular salary review practices for giving salary
increases to similarly situated employees.

          (b) Stock Options. Employee is eligible to receive options under the
              -------------
Company's 1997 Stock Incentive Plan (the "Option Plan") and such other option
plans as the Company may from time to time adopt, as approved by the Board or a
Committee (as defined in the Option Plan) thereof. As part of this Agreement,
Employee shall be granted an option to purchase 1,000,000 shares of the
Company's common stock pursuant to the Option Plan, twenty-five percent (25%)
of the Shares subject to the Option Plan shall vest twelve months after the
date of an Award (as defined in the Option Plan) (the "Vesting Commencement
Date"), and 1/48th of the Shares subject to the Option Plan shall vest on
each monthly anniversary of the Vesting Commencement Date thereafter. All such
options are transferable to the extent provided in the agreement evidencing
such stock option.

          (c) Bonus. During the Period of Employment, Employee shall be
              -----
eligible to participate in such bonus plans as the Company may from time to
time adopt for the benefit of similarly situated employees of the Company.
Employee's right to receive any such bonus shall be subject to the terms of any
Company bonus plan for which he may become a participant and the terms
determined by the Board or a Committee thereof designating him as a participant
or granting him an Award thereunder. Employee's current annual target bonus is
100% of salary.

          (d) Vacation. During the Period of Employment, Employee shall be
              --------
entitled to vacation in accordance with the Company's vacation policies for
similarly situated employees, as such policies may be amended from time to time.

                                      2

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          (e) Benefits. During the Period of Employment, as he becomes eligible
              --------
therefor, the Company shall provide Employee with the right to participate in
and to receive benefits from all present and future life, accident, disability,
medical, pension, and savings plans and all similar benefits made available
generally to similarly situated employees of the Company. The amount and extent
of benefits to which Employee is entitled shall be governed by the specific
benefit plan, as it may be amended from time to time.

          (f) Expenses. The Company shall reimburse Employee for reasonable
              --------
travel and other business expenses incurred by Employee in the performance of
his duties hereunder in accordance with the Company's general policies, as they
may be amended from time to time during the course of this Agreement.

     3. Termination of Employment.
        -------------------------

          (a) By Death. The Period of Employment shall terminate automatically
              --------
upon the death of the Employee; provided however that the Company shall pay to
the Employee's beneficiaries or estate, as appropriate, the compensation to
which he is entitled pursuant to Sections 2(a) and 2(c) and the benefits to
which he is entitled pursuant to Section 2(e) shall continue through the end of
the Period of Employment, on the same time schedule as if Employee were living.
The level of bonus compensation payable pursuant to said Section 2(c) during
each year following death of the Employee shall be 80% of the target bonus for
Employee for the year of termination as determined by the Board. Thereafter,
the Company's obligations hereunder shall terminate. Nothing in this Section
shall affect any entitlement of the Employee's heirs to the benefits of any
life insurance plan.

          (b) By Disability. If the Employee shall become "permanently
              -------------
disabled" as determined for purposes of the disability insurance policy
provided by the Company for Employee, then, to the extent permitted by law, the
Period of Employment shall terminate as of the date that Employee shall be
deemed to have become "permanently disabled" for purposes of such disability
insurance policy; provided, however, that the compensation to which Employee is
entitled pursuant to Sections 2(a) and 2(c) and the benefits to which he is
entitled pursuant to Section 2(e) shall continue through the end of the Period
of Employment, on the same time schedule as if Employee were not "permanently
disabled" (in each case under 2(a), 2(b) and 2(e) net of amounts paid to
Employee pursuant to said disability insurance policy). The amount of bonus
payable to Employee pursuant to this Section 3(b) shall be calculated in the
manner set forth in Section 3(a) above. Thereafter, the Company's obligations
hereunder shall terminate. Employee shall continue to receive benefits under
any disability plan in which Employee is a participant to the extent permitted
under the applicable plan.

          (c) By Company For Cause. The Company may terminate, without
              --------------------
liability, Employee's employment or consultancy for Cause (as defined below) at
any time upon advance written notice to Employee as specified below with
reasonable specificity of the details thereof. The Company shall pay Employee
the compensation to which he is entitled pursuant to Section 2(a) through the
end of the specified notice period and thereafter the Company's obligations
hereunder shall terminate. For the purposes of this Section 3(c), "Cause"
shall mean: (i) Employee's misconduct which could reasonably be expected to
have a material adverse effect

                                      3

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on the business and affairs of the Company, (ii) Employee's disregard of lawful
instructions of the Company's Board of Directors which instructions are
consistent with Employee's position and relate to the business of the Company
or Employee's neglect of duties or failure to act, which, in each case, could
reasonably be expected to have a material adverse effect on the business and
affairs of the Company; (iii) Employee is convicted of, or pleads nolo
contendere to, common law fraud, or a felony or criminal act against the
Company or any Affiliated Company thereof or any of the assets of any of them;
(iv) the Employee's abuse of alcohol or other drugs or controlled substances,
or conviction of a crime involving moral turpitude, or (v) Employee's material
breach of any of the agreements contained herein or contemplated hereby. A
termination pursuant to Section 3(c) (i), (ii), (iv) (other than as a result of
a conviction of a crime involving moral turpitude), or (v) shall take effect 10
days after the giving of the notice contemplated hereby unless the Employee
shall, during such 10-day period, remedy to the satisfaction of the Board of
Directors of the Company the misconduct, disregard, abuse or breach specified
of such notice; provided, however, that such termination shall take effect
immediately upon giving of such notice if the Board of Directors of the Company
shall have determined that such misconduct, disregard, abuse or breach is not
remediable which determination shall be stated in such notice. A determination
pursuant to Section 3(c) (iii) or (iv) (as a result of a conviction of a crime
involving moral turpitude) shall take effect immediately upon giving of the
notice contemplated hereby.

          (d) At Will by Employee. At any time and subject to Section 3(g)
              -------------------
below, Employee may terminate the Period of Employment with or without cause,
on written notice to the Company. In the event Employee elects to terminate the
Period of Employment pursuant to this Section 3(d), Employee shall give the
Company not less than two (2) weeks notice of such termination. If the Employee
terminates his employment pursuant to this Section 3(d), the Company shall pay
Employee the compensation and benefits to which he is entitled pursuant to
Section 2(a) and Section 2(c) through the end of the notice period and
thereafter all obligations of the Company shall terminate.

          (e) At Will by the Company. At any time, the Company may terminate
              ----------------------
the Period of Employment for any reason, without Cause, upon 24 hours written
notice to the Employee. In the event the Company elects to terminate the Period
of Employment pursuant to this Section 3(e), the Company shall retain Employee
as a consultant to the Company for a period commencing on the date of such
termination and continuing until the expiration of the Period of Employment
(the "Consultancy Period"), during which time Employee agrees to be available
to the Company (which may include availability via telephone) to consult with
officers and directors regarding the business of the Company, whenever so
requested, such consultancy work not to exceed 40 hours per week. Employee
shall continue to receive payment of his compensation under Sections 2(a), 2(c)
and 2(f) during the Consultancy Period and his benefits described in Section
2(e); provided that if (i) any of the events listed in paragraph (c) of this
Section 3 occur then the Company's obligations hereunder shall be governed in
accordance with the applicable paragraph or (ii) Employee breaches Sections
3(h), 3(i) or 4 hereof, including a violation of his Proprietary Information
and Inventions Agreement (described in Section 4 below), then all of the
Company's obligations hereunder shall cease immediately. The amount of bonus
payable to Employee pursuant to this Section 3(e) shall be calculated in the
manner set forth in Section 3(a) above through the end of the Consultancy
Period. Employee hereby agrees that the Company may dismiss him under this
Section 3(e) without regard (i) to any general or specific policies

                                      4

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(whether written or oral) of the Company relating to the employment or
termination of its employees, or (ii) to any statements made to Employee,
whether made orally or contained in any document, pertaining to Employee's
relationship with the Company. During the Consultancy Period, Employee agrees
not to compete with the business of the Company during such Consultancy Period
as set forth in Section 3(i) hereof.

          (f) Termination by Employee for Good Reason Following Corporate
              -----------------------------------------------------------
Transaction. At any time following a Corporate Transaction (as defined below)
-----------
and without limitation of Employee's rights under Section 3(d) above, Employee
may terminate the Period of Employment for Good Reason (as defined below) on
not less than two (2) weeks written notice to the Company. In the event of a
termination by Employee for Good Reason pursuant to this Section 3(f), the
Company shall retain Employee as a consultant to the Company for a period
commencing on the date of such termination and continuing for two (2) years
thereafter (in lieu of the Consultancy Period set forth in Section 3(e)) for
the compensation and benefits and subject to all of the terms set forth in
Section 3(e) above (other than the term for such consultancy services. A
termination by Employee shall be deemed to be for "Good Reason" if: (i) there
is an assignment to the Employee of any duties materially inconsistent with or
which constitute a material change in the Employee's position, duties,
responsibilities, or status with the Company, or a material change in the
Employee's position, duties, responsibilities, or status with the Company, or a
material change in the Employee's reporting responsibilities, title, or
offices; or removal of the Employee from or failure to reflect the Employee to
any of such positions, except in connection with the termination of the Period
of Employment for Cause, or due to disability or death; (ii) there is a
reduction by the Company in the Employee's annual salary then in effect other
than a reduction similar in percentage to a reduction generally applicable to
similarly situated employees of the Company; or (iii) the Company acts in any
way that would materially and adversely affect the Employee's participation in
or materially reduce the Employee's benefit under any benefit plan of the
Company in which the Employee is participating or deprive the Employee of any
material fringe benefit enjoyed by the Employee except those changes generally
affecting similarly situated employees of the Company.

          For purposes of this Agreement, a "Corporate Transaction" shall
include any of the following transactions to which the Company is a party: (i)
a merger or consolidation in which the Company is not the surviving entity and
securities representing more than fifty percent (50%) of the total combined
voting power of the Company's outstanding securities are transferred to holder
different from those who held such securities immediately prior to such merger;
(ii) the sale, transfer or other disposition of all or substantially all of the
assets of the Company in liquidation or dissolution of the Company; or (iii)
any reverse merger in which the Company is the surviving entity but in which
securities representing more than fifty percent (50%) of the total combined
voting power of the Company's outstanding securities are transferred to holders
different from those who held such securities immediately prior to such merger.
In addition, a Corporate Transaction shall also include a Change of Control as
such is defined in the Option Plan.

          (g) Company Right to Require Consulting Services. In the event of a
              --------------------------------------------
termination of the Period of Employment pursuant to Section 3 (c) or 3(d)
above, the Company shall have the option, exercisable on written notice to
Employee within twenty (20) days following such termination of the Period of
Employment, to require Employee to provide consulting services

                                      5

<PAGE>

upon the same terms provided in Section 3(e) above, including without
limitation, Employee's duties not to compete with the Company as provided in
Section 3(i), except that: (i) the Company may thereafter terminate the
Consultancy Period at any time on thirty (30) days notice to Employee; and (ii)
the compensation payable to Employee during the Consultancy Period shall be
equal to Employee's salary payable pursuant to Section 2(a) hereof as prorated
and reduced to be equal to an hourly rate (assuming forty (40) hours work weeks
and forty-eight (48) full weeks of service during a year), and Employee shall
be so paid by the Company at such hourly rate for such consulting services
based on the greater of: (i) the actual number of hours of consulting services
provided by Employee; and (ii) ten (10) hours per calendar month; provided,
that if the Company requires in excess of twenty (20) hours per week of
consulting, then the Company shall compensate Employee and provide benefits and
bonuses as if Employee is working full time during the Consultancy Period. The
Company may require up to a maximum of forty (40) hours per week of consulting
services. In the event that the Company requires less than forty (40) hours of
consulting services per week, then the Company may not prevent Employee from
accepting other employment or engaging in any work or other activity of any
kind during the Consultancy Period provided that such employment, work or
activity is not competitive with the business of the Company (as defined in
Section 3(i) hereof) [or exceed [20] hours per week] and Employee may accept
such other noncompetitive employment or engage in other noncompetitive work or
business activities during the Consultancy Period. The Company acknowledges
that once it chooses to require less than forty (40) hours per week of
consulting services from Employee that the Company may not later, without
Employee's consent, increase the consulting services required of Employee to
forty (40) hours per week or restrict Employee's ability to accept other
noncompetitive employment or engage in other noncompetitive work or activities
without Employee's consent, which may be withheld in Employee's discretion.

          (h) Other Termination Obligations.
              -----------------------------

               (1) Employee hereby acknowledges and agrees that all personal
property, including, without limitation, all books, manuals, records, reports,
notes, contracts, computer files and data (including electronic
correspondence), lists, blueprints, and other documents, or materials, or
copies thereof, proprietary information, and equipment furnished to or prepared
by Employee in the course of or incident to his employment, including, without
limitation, records and any other materials pertaining to the Company's
proprietary information, belong to the Company and shall be promptly returned
to the Company upon termination of the Period of Employment. Following
termination, the Employee will not retain any written or other tangible
material (including materials containing computer files or data) containing any
Proprietary Information or information pertaining to the Company's Proprietary
Information.

               (2) Upon termination of the Period of Employment, the Employee
shall be deemed to have resigned from all offices and directorships then held
with the Company or any Affiliated Company.

               (3) Employee agrees that he will not, either directly or
indirectly, for a period of two (2) years following the later of the
termination of the Period of Employment or the termination of the Consultancy
Period: (i) contact, for purposes of soliciting employment, any employee of the
Company; or, (ii) contact for the purpose of inducing any termination or breach

                                      6

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of any contractual relationship with the Company, any individual or entity that
has a contractual relationship with the Company.

          (i) Covenant not to Compete. During the Consultancy Period, Employee
              -----------------------
agrees not to compete with the business of the Company, anywhere within, from
or into the countries listed in Exhibit A and from or into any additional
countries where the Company does business at the time of termination of
Employee's employment. For purposes of this Section 3(i), Employee shall be
deemed to compete if he, as an employee, employer, consultant, agent,
principal, partner, stockholder, corporate officer, director or in any other
individual or representative capacity, engages or participates, or makes
preparations to establish, any business that conducts the same or substantially
the same business as or is competitive with the business which is conducted by
the Company on the date of Employee's termination, including, without
limitation, work relating to Encina, Unikix, CICS/9000, Enterprise Java, Web
Services, Web Application Servers, Portal Software technologies and any
activity engaged in by the Company during the twelve months immediately
preceding the date of termination of the Period of Employment or any activity
contemplated by the Company on the date of such termination. Nothing contained
in this Section 3(i) shall be construed to prohibit Employee from purchasing
and owning (directly or indirectly) up to one percent (1%) of the capital stock
or other securities of any corporation or other entity whose stock or
securities are traded on any national or regional securities exchange or the
national over-the-counter market and such ownership shall not constitute a
violation of this Section 3(i). In the event of a termination of the Period of
Employment pursuant to Section 3(c) or 3(d) above, the Company shall have the
option, exercisable on written notice to Employee within twenty (20) days
following such termination of the Period of Employment, to require Employee to
provide consulting services upon the same terms provided in Section 3(e) above,
including without limitation, Employee's duties not to compete with the Company
as provided herein.

     4. Proprietary Information Agreement. As a condition to his employment
        ---------------------------------
with the Company, Employee has executed and delivered a copy of the Company's
standard form Employee Proprietary Information and Inventions Agreement in
substantially the form of Exhibit B attached hereto and incorporated herein.
Any breach by Employee of such agreement shall be deemed a breach of this
Agreement for purposes of Section 3(c) hereof. Employee's obligations under
such Employee Proprietary Information and Inventions Agreement shall survive
any termination of the Period of Employment or this Agreement.

     5. Loan to Employee. The Company agrees to lend certain amounts to
        ----------------
Employee as provided below. The First Line of Credit (as defined below) will be
evidenced by a full recourse promissory note in substantially the form attached
hereto as Exhibit C-1.

          The Second Line of Credit (as defined below) will be
evidenced by a secured full recourse promissory note in substantially the form
attached hereto as Exhibit C-2.

          (a) Lines of Credit. Employee shall be or have been extended two(2)
              ---------------
lines of credit, the first for a maximum of Five Million Dollars
($5,000,000.00) (the "First Line of Credit") and the second for a maximum of
Twenty-Five Million Dollars ($25,000,000.00) (the "Second Line of Credit").
All advances under the First Line of Credit are subject to the review of and
approval by the Company's Chief Financial Officer. Funds shall be advanced upon
written

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notice for funds by Employee to Company (the "Advance(s)"). Under the First
Line of Credit, all funds together with interest from the date of the Advance
shall accrue at the applicable federal rate on the date of the Advance,
compounded semiannually and shall be due and payable within ninety (90) days
upon the earlier of (i) the date the prior 30 day average fair market value of
a share of the Common Stock of the Company increases by at least 50% over the
fair market value of a share of the Company's Common Stock on the date of the
Advance and (ii) the date of termination of employment pursuant to Section 3.
For purposes of this Section 5, the fair market value of a share of the Common
Stock of the Company shall mean the closing price for a share for the last
market trading day prior to the time of the determination (or, if no closing
price was reported on that date, on the last trading date on which a closing
price was reported) on the stock exchange determined by the Company to be the
primary market for the Common Stock as reported in The Wall Street Journal or
such other source as the Company deems reliable. Under the Second Line of
Credit, all Advances together with interest at the rate of 6% per annum shall
be secured by certain of Employee's real estate and other collateral as the
Company shall request and be due and payable on the earlier to occur of (i) on
or after November 2, 2002 upon ninety (90) days written demand and (ii) a
Maturity Event (as defined in the promissory note evidencing the Second Line of
Credit).

     6.      Additional Bonus. Provided that the employee continues to be
             ----------------
employed by the Company, an additional bonus amount will be paid at the end
of each calendar quarter in the amount of $9,053.83 for the duration of this
agreement.

     7.      Assignment; Successors and Assigns. Employee agrees that he will
             ----------------------------------
not assign, sell, transfer, delegate or otherwise dispose of, whether
voluntarily or involuntarily, or by operation of law, any rights or obligations
under this Agreement, nor shall Employee's rights be subject to encumbrance or
the claims of creditors. Any purported assignment, transfer, or delegation
shall be null and void. Nothing in this Agreement shall prevent the
consolidation of the Company with, or its merger into, any other corporation,
or the sale by the Company of all or substantially all of its properties or
assets, or the assignment by the Company of this Agreement and the performance
of its obligations hereunder to any successor in interest or any Affiliated
Company. Subject to the foregoing, this Agreement shall be binding upon and
shall inure to the benefit of the parties and their respective heirs, legal
representatives, successors, and permitted assigns, and shall not benefit any
person or entity other than those enumerated above. Without limitation of the
foregoing, any such successor in interest (including an entity which acquires
substantially all the assets and the business of the Company) in such
acquisition transaction or any Affiliated Company shall be bound by all of the
terms and conditions of this Agreement.

     8.      Notices. All notices or other communications required or
             -------
permitted hereunder shall be made in writing and shall be deemed to have been
duly given if delivered by hand or mailed, postage prepaid, by certified or
registered mail, return receipt requested, and addressed to the Company at:

                                        BEA Systems, Inc.
                                        2315 North First Street
                                        San Jose, CA 95151

                                      8

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                                        Attn: Chief Financial Officer

or to the Employee at:                  William T. Coleman III
                                        278 Alta Vista Ave.
                                        Los Altos, CA 94022

Notice of change of address shall be effective only when done in accordance
with this Section.

     9.      Entire Agreement. The terms of this Agreement are intended by
             ----------------
the parties to be the final expression of their agreement with respect to the
employment of Employee by the Company and may not be contradicted by evidence
of any prior or contemporaneous agreement. The parties further intend that this
Agreement shall constitute the complete and exclusive statement of its terms
and that no extrinsic evidence whatsoever may be introduced in any judicial,
administrative, or other legal proceeding involving this Agreement. The 1999
Agreement is superceded in its entirety by this Agreement.

     10.     Amendments; Waivers. This Agreement may not be modified, amended,
             -------------------
or terminated except by an instrument in writing, signed by the Employee and by
a duly authorized representative of the Company other than Employee. By an
instrument in writing similarly executed, either party may waive compliance by
the other party with any provision of this Agreement that such other party was
or is obligated to comply with or perform, provided, however, that such waiver
shall not operate as a waiver of, or estoppel with respect to, any other or
subsequent failure. No failure to exercise and no delay in exercising any
right, remedy, or power hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, remedy, or power hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, or power provided herein or by law or in equity.

     11.     Severability; Enforcement. If any provision of this Agreement, or
             -------------------------
the application thereof to any person, place, or circumstance, shall be held by
a court of competent jurisdiction to be invalid, unenforceable, or void, the
remainder of this Agreement and such provisions as applied to other persons,
places, and circumstances shall remain in full force and effect. It is the
intention of the parties that the covenants contained in Section 3(i) shall be
enforced to the greatest extent in time, area, and degree of participation as
is permitted by the law of that jurisdiction whose law is found to be
applicable to any acts allegedly in breach of these covenants.

     12.     Governing Law. The validity, interpretation, enforceability, and
             -------------
performance of this Agreement shall be governed by and construed in accordance
with the law of the State of California.

     13.     Employee Acknowledgment. Employee acknowledges (i) that he has
             -----------------------
consulted with or has had the opportunity to consult with independent counsel
of his own choice concerning this Agreement and has been advised to do so by
the Company, and (ii) that he has read and understands the Agreement, is fully
aware of its legal effect, and has entered into it freely based on his own
judgment.

                                      9

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     14.     Exclusive. Both parties agree that this Agreement shall provide the
             ---------
exclusive remedies for any breach by the Company of its terms.

             The parties have duly executed this Agreement as of the date first
             written above.

COMPANY:                                    EMPLOYEE:

BEA SYSTEMS, INC.

By:  /s/ William M. Klein                   /s/ William T. Coleman III
    ---------------------------             -----------------------------


Title:                                      William T. Coleman III
       ------------------------

                                       10

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                                    EXHIBIT A
                                       To
                              EMPLOYMENT AGREEMENT

England
France
Germany
Japan
United States

                                      11

<PAGE>

                                    EXHIBIT B

                                  October, 2001

            EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

                                 (Rev. 9/23/98)

     In consideration of my employment by BEA Systems, Inc., a Delaware
corporation (the "Company"), I hereby agree to certain restrictions placed by
the Company on my use and development of information and technology of the
Company, as more fully set out below.

1.   Proprietary Information.

     (a)     Confidential Restrictions. I understand that, in the course of my
             work as an employee of the Company, I may have access to
             Proprietary Information (as defined below) concerning the Company.
             I acknowledge that the Company has developed, compiled, and
             otherwise obtained, often at great expense, this information, which
             has great value to the Company's business. I agree to hold in
             strict confidence and in trust for the sole benefit of the Company
             all Proprietary Information and will not disclose any Proprietary
             Information, directly or indirectly, to anyone outside of the
             Company, or use, copy, publish, summarize, or remove from Company
             premises such information (or remove from the premises any other
             property of the Company) except (i) during my employment to the
             extent necessary to carry out my responsibilities as an employee of
             the Company or (ii) after termination of my employment, as
             specifically authorized in writing by a duly authorized officer of
             the Company. I further understand that the publication of any
             Proprietary Information through literature or speeches must be
             approved in advance in writing by a duly authorized officer of the
             Company.

     (b)     Proprietary Information Defined. I understand that the term
             "Proprietary Information" in this Agreement means all information
             and any idea whether disclosed to, learned by or developed by me,
             pertaining in any manner to the business of the Company or to the
             Company's affiliates, consultants, or business associates, unless
             (i) the information is or becomes publicly known through lawful
             means; (ii) the information was rightfully in my possession or part
             of my general knowledge prior to my employment by the Company; or
             (iii) the information is disclosed to me without confidential or
             proprietary restriction by a third party who rightfully possesses
             the information (without confidential or proprietary restriction)
             and did not learn of it, directly or indirectly, from the Company.
             I understand that this definition includes information or ideas in
             any form, tangible or intangible, including without limitation, all
             documents, books, papers, drawings, models, sketches, and other
             data of any kind and description, including electronic data
             recorded or retrieved by any means, that have been or will be given
             to me by the Company (or any affiliate of it), as well as written
             or verbal instructions or comments. I further understand that the
             Company considers the following

                                      12

<PAGE>

             information to be included, without limitation, in the definition
             of Proprietary Information: (A) schematics, techniques, employee
             suggestions, development tools and processes, computer printouts,
             computer programs, design drawings and manuals, electronic codes,
             formulas and improvements; (B) information about costs, profits,
             markets, sales, customers, potential customers targeted by the
             Company and bids; (C) plans for future development and new product
             concepts, business marketing plans; and (D) corporate organization,
             personnel files, salary ranges and information about the
             compensation, equity and benefits provided to other employees.

     (c)     Information Use. I agree that I will maintain at my work area or in
             other places under my control only such Proprietary Information
             that I have a current "need to know," and that I will return to the
             appropriate person or location or otherwise properly dispose of
             Proprietary Information once my need to know no longer exists. I
             agree that I will not make copies of information unless I have a
             legitimate need for such copies in connection with my work.

     (d)     Prior Actions and Knowledge. I hereby represent and warrant that
             from the time of my first contact or communication with the Company
             I have held in strict confidence and in trust for the sole benefit
             of the Company all Proprietary Information and have not disclosed
             any Proprietary Information, directly or indirectly, to anyone
             outside of the Company, or used, copied, published, or summarized
             any Proprietary Information except to the extent permitted by
             Section 1(a) above. Except as disclosed on Schedule A to this
             Agreement, I do not know anything about the Company's business or
             Proprietary Information, other than information I have learned from
             the Company in the course of being hired.

     (e)     Third Party Information. I recognize that the Company has received
             and in the future will receive from third parties their
             confidential or proprietary information subject to a duty on the
             Company's part to maintain the confidentiality of such
             information and to use it only for certain limited purposes. I
             agree that I owe the Company and such third parties, during the
             term of my employment and thereafter, a duty to hold all such
             confidential or proprietary information in the strictest
             confidence and not to disclose it to any person, firm, or
             corporation (except as necessary in carrying out my work for the
             Company consistent with the Company's agreement with such third
             party) or to use it for the benefit of anyone other than for the
             Company or such third party (consistent with the Company's
             agreement with such third party) without the express written
             authorization of a duly authorized officer of the Company.

     (f)     Interference with Business. I hereby acknowledge that pursuit of
             the activities forbidden by this paragraph 1(f) would necessarily
             involve the use or disclosure of Proprietary Information in breach
             of paragraph 1(a), but that proof of such breach would be extremely
             difficult. To forestall such disclosure, use, and breach, I agree
             that for the term of this Agreement and for a period of one (1)
             year after termination of my employment with the Company, I shall
             not, for myself or any

                                      13

<PAGE>

             third party, directly or indirectly (i) divert or attempt to divert
             from the Company (or any affiliate of it that might be formed) any
             business of any kind in which it is engaged, including, without
             limitation, the solicitation of or interference with any of its
             suppliers or customers or (ii) solicit, recruit or encourage to
             leave their employment or recommend for employment any person
             employed by the Company. Furthermore, I agree that during the
             period of my employment with the Company I shall not engage in any
             business activity that is or may be competitive with the Company,
             except where I can prove that the action was taken without the use
             in any way of Proprietary Information. I understand that this
             paragraph 1(f) does not prevent me from working for a competitor
             following termination of my employment with the Company as long as
             I am able to and do comply with the provisions of this Agreement.

2.   Inventions.

     (a)     Defined; Statutory Notice. I understand that during the term of my
             employment, there are certain restrictions on my development of
             technology, ideas, and inventions, referred to in this Agreement as
             "Invention Ideas." The term Invention Ideas means all ideas,
             processes, inventions, technology, designs, formulas, discoveries,
             patents, copyrights, and trademarks, and all improvements, rights,
             and claims related to the foregoing, that are conceived, developed,
             or reduced to practice by me alone or with others except to the
             extent that California Labor Code Section 2870 lawfully prohibits
             the assignment. I understand that Section 2870(a) provides:

             Any provision in an employment agreement which provides that an
             employee shall assign, or offer to assign, any of his or her rights
             in an invention to his or her employer shall not apply to an
             invention that the employee developed entirely on his or her own
             time without using the employer's equipment, supplies, facilities,
             or trade secret information except for those inventions that
             either:

               (1)      Relate at the time of conception or reduction to
                        practice of the invention to the employer's business,
                        or actual or demonstrably anticipated research or
                        development of the employer.

               (2)      Result from any work performed by the employee for
                        the employer.

     (b)     Disclosure. I agree to maintain adequate and current written
             records on the development of all Invention Ideas and to disclose
             promptly to the Company all Invention Ideas and relevant records,
             which records will remain the sole property of the Company. I
             further agree that all information and records pertaining to any
             idea, process, invention, technology, design, formula, discovery,
             patent, copyright or trademark, that I do not believe to be an
             Invention Idea, but is conceived, developed, or reduced to practice
             by me (alone or with others) during my period of employment or
             during the one-year period following termination of my

                                      14

<PAGE>

             employment, shall be promptly disclosed to the Company (such
             disclosure to be received in confidence). The Company shall examine
             such information to determine if in fact it is an Invention Idea
             subject to this Agreement.

     (c)     Assignment. I agree to assign to the Company, without further
             consideration, my entire right, title, and interest (throughout the
             United States and in all foreign countries), free and clear of all
             liens and encumbrances, in and to each Invention Idea, which shall
             be the sole property of the Company, whether or not copyrightable
             or patentable. In the event any Invention Idea shall be deemed by
             the Company to be copyrightable or patentable or otherwise
             registrable, I will assist the Company (at its expense) in
             obtaining letters patent or other applicable registrations thereon
             and I will execute all documents and do all other things (including
             testifying at the Company's expense) necessary or proper to
             accomplish such registrations thereon and to vest the Company with
             full title thereto. Should the Company be unable to secure my
             signature on any document necessary to apply for, prosecute,
             obtain, or enforce any patent, copyright, or other right or
             protection relating to any Invention Idea, whether due to my mental
             or physical incapacity or any other cause, I hereby irrevocably
             designate and appoint the Company and each of its duly authorized
             officers and agents as my agent and attorney-in-fact, to act for
             and in my behalf and stead, to execute and file any such document,
             and to do all other lawfully permitted acts to further the
             prosecution, issuance, and enforcement of patents, copyrights, or
             other rights or protection with the same force and effect as if
             executed and delivered by me.

     (e)     Exclusions. Except as disclosed in Schedule A attached hereto and
             incorporated herein, there are no ideas, processes, inventions,
             technology, writings, programs, designs, formulas, discoveries,
             patents, copyrights, or trademarks, or improvements to the
             foregoing, that I wish to exclude from the operation of this
             Agreement. To the best of my knowledge, there is no existing
             contract in conflict with this Agreement or any other contract to
             assign ideas, processes, inventions, technology, writings,
             programs, designs, formulas, discoveries, patents, copyrights, or
             trademarks, or improvements thereon, that is now in existence
             between me and any other person or entity.

     (a)     License for Other Inventions. If, in the course of my employment,
             with the Company, I incorporate into Company property an invention
             owned by me or in which I have an interest, the Company is granted
             a nonexclusive, royalty-free, irrevocable, perpetual, worldwide
             license to make, modify, use and sell my invention as part of and
             in connection with the Company property.

     (e)     Post-Termination Period. I acknowledge that because of the
             difficulty of establishing when something is first conceived or
             developed by me, or whether it results from access to Proprietary
             Information or the Company's equipment, facilities, and data, I
             agree that any idea, process, invention, technology, writing,
             program, design, formula, discovery, patent, copyright, or
             trademark, or any improvement, rights, or claims related to the
             foregoing, shall be presumed to be an

                                      15

<PAGE>

             Invention Idea if it is conceived, developed, used, sold,
             exploited, or reduced to practice by me or with my aid within one
             (1) year after my termination of employment with the Company. I can
             rebut the above presumption if I prove that the idea, process,
             invention, technology, writing, program, design, formula,
             discovery, patent, copyright, or trademark, or improvement, right
             or claim, is not an Invention Idea as defined in paragraph 2(a).

     (f)     California Labor Code. I understand that nothing in this Agreement
             is intended to expand the scope of protection provided me by
             Sections 2870 through 2872 of the California Labor Code.

3.   Former or Conflicting Agreements. During my employment with the Company,
     I will not disclose to the Company, or use, or induce the Company to
     use, any proprietary information or trade secrets of others. I represent
     and warrant that I have returned all property and confidential
     information belonging to all prior employers, if any. I further represent
     and warrant that my employment by the Company and my performance of the
     terms of this Agreement will not breach any agreement to keep in
     confidence proprietary information acquired by me in confidence or in
     trust prior to my employment by the Company. I have not entered into, and
     I agree I will not enter into, any oral or written agreement in conflict
     with my obligations under this Agreement.

4.   Government Contracts. I understand that the Company has or may enter
     into contracts with the government under which certain intellectual
     property rights will be required to be protected, assigned, licensed, or
     otherwise transferred and I hereby agree to execute such other documents
     and agreements as are necessary to enable the Company to meet its
     obligations under any such government contracts.

5.   Termination. I hereby acknowledge and agree that all personal property,
     including, without limitation, all source code listings, books, manuals,
     records, models, drawings, reports, notes, contracts, lists, blueprints,
     and other documents or materials or copies thereof, all equipment
     furnished to or prepared by me in the course of or incident to my
     employment, and all Proprietary Information belong to the Company and
     will be promptly returned to the Company upon termination of my
     employment with the Company. Following my termination, I will not retain
     any written or other tangible material containing any Proprietary
     Information or information pertaining to any Invention Idea. I understand
     that my obligations contained herein will survive the termination of my
     employment and that I will continue to make all disclosures required of
     me by paragraph 2(b). In the event of the termination of my employment, I
     agree, if requested by the Company, to sign and deliver the Termination
     Certificate attached as Schedule B hereto and incorporated herein. I
     agree that after the termination of my employment with the Company, I
     will not enter into any agreement that conflicts with my obligations
     under this Agreement and will inform any subsequent employers of my
     obligations under this Agreement.

2.   NO IMPLIED EMPLOYMENT RIGHTS. I RECOGNIZE THAT NOTHING IN THIS AGREEMENT
     SHALL BE CONSTRUED TO IMPLY THAT MY EMPLOYMENT IS

                                      16

<PAGE>

     GUARANTEED FOR ANY PERIOD OF TIME. EXCEPT AS OTHERWISE AGREED IN A
     WRITTEN AGREEMENT SIGNED BY A DULY AUTHORIZED OFFICER OF THE COMPANY, MY
     EMPLOYMENT IS FOR AN INDEFINITE DURATION, AND EITHER THE COMPANY OR I CAN
     TERMINATE OUR EMPLOYMENT RELATIONSHIP AT ANY TIME, WITHOUT NOTICE, AND
     FOR ANY REASON, WITH OR WITHOUT CAUSE.

6.   Remedies. I recognize that nothing in this Agreement is intended to limit
     any remedy of the Company under the California Uniform Trade Secrets Act
     and that I could face possible criminal and civil actions, resulting in
     imprisonment and substantial monetary liability, if I misappropriate the
     Company's trade secrets. In addition, I recognize that my violation of
     this Agreement could cause the Company irreparable harm, the amount of
     which may be extremely difficult to estimate, thus, making any remedy at
     law or in damages inadequate. Therefore, I agree that the Company shall
     have the right to apply to any court of competent jurisdiction for an
     order restraining any breach or threatened breach of this Agreement and
     for any other relief the Company deems appropriate. This right shall be
     in addition to any other remedy available to the Company in law or equity.

7.   Miscellaneous Provisions.

     (a)     Assignment. I agree that the Company may assign to another person
             or entity any of its rights under this Agreement.

     (b)     Governing Law; Severability. The validity, interpretation,
             enforceability, and performance of this Agreement shall be governed
             by and construed in accordance with the laws of the State of
             California. If any provision of this Agreement, or application
             thereof to any person, place, or circumstance, shall be held by a
             court of competent jurisdiction to be invalid, unenforceable, void
             or unconscionable, such provision shall be enforced to the greatest
             extent permitted by law and the remainder of this Agreement and
             such provision as applied to other persons, places, and
             circumstances shall remain in full force and effect.

     (c)     Entire Agreement. The terms of this Agreement are the final
             expression of my agreement with respect to the subject matter
             hereof and may not be contradicted by evidence of any prior or
             contemporaneous agreement. This Agreement shall constitute the
             complete and exclusive statement of its terms and no extrinsic
             evidence whatsoever may be introduced in any judicial,
             administrative, or other legal proceeding involving this Agreement.

     (a)     Amendment; Waivers. This Agreement can be amended or terminated
             only by a written agreement signed by a duly authorized officer of
             the Company and me. No failure to exercise or delay in exercising
             any right under this Agreement shall operate as a waiver thereof.

                                      17

<PAGE>

     (d)     Successors and Assigns. This Agreement shall be binding upon and
             shall inure to the benefit of me, my heirs, executors,
             administrators, and successors, as well as the Company's successors
             and assigns.

     (e)     Application of this Agreement. I hereby agree that my obligations
             set forth in Sections 1 and 2 hereof and the definitions of
             Proprietary Information and Invention Ideas contained therein shall
             be equally applicable to Proprietary Information and Invention
             Ideas relating to any work performed by me for the Company prior to
             the execution of this Agreement.

     I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE
COMPLETELY NOTED ON SCHEDULE A TO THIS AGREEMENT ANY PROPRIETARY INFORMATION,
IDEAS, PROCESSES, INVENTIONS, TECHNOLOGY, WRITINGS, PROGRAMS, DESIGNS, FORMULAS,
DISCOVERIES, PATENTS, COPYRIGHTS, OR TRADEMARKS, OR IMPROVEMENTS, RIGHTS, OR
CLAIMS RELATING TO THE FOREGOING, THAT I DESIRE TO EXCLUDE FROM THIS AGREEMENT.

Date: 11/22/01                  /s/ William T. Coleman III
--------------                  --------------------------
                                    Employee Name

                                /s/ William T. Coleman III
                                --------------------------
                                    Employee Signature

                                      18

<PAGE>

                                   SCHEDULE A

                              EMPLOYEE'S DISCLOSURE

1.   Proprietary Information. Except as set forth below, I acknowledge that at
     this time I know nothing about the business or Proprietary Information of
     BEA Systems, Inc., a Delaware corporation (the "Company"), other than
     information I have learned from the Company in the course of being hired:
     __________________________________________________________________________
     __________________________________________________________________________
     __________________________________________________________________________
     __________________________________________________________________________
     __________________________________________________________________________

2.   Prior Inventions. Except as set forth below, there are no ideas,
     processes, inventions, technology, writings, programs, designs, formulas,
     discoveries, patents, copyrights, or trademarks, or any claims, rights,
     or improvements to the foregoing, that I wish to exclude from the
     operation of this Agreement:______________________________________________
     __________________________________________________________________________
     __________________________________________________________________________
     __________________________________________________________________________
     __________________________________________________________________________
     __________________________________________________________________________
     __________________________________________________________________________
     __________________________________________________________________________
     __________________________________________________________________________

Date: 11/21/01               /s/ William T. Coleman III
     ---------               ----------------------------
                                   Employee Name

                              /s/ William T. Coleman III
                              ---------------------------
                                   Employee Signature

                                      19

<PAGE>

                                   SCHEDULE B

                       TERMINATION CERTIFICATE CONCERNING
                                BEA SYSTEMS, INC.
                     PROPRIETARY INFORMATION AND INVENTIONS

     This is to certify that I have returned all personal property of BEA
Systems, Inc., a Delaware corporation (the "Company"), including, without
limitation, all source code listings, books, manuals, records, mod els,
drawings, reports, notes, contracts, lists, blueprints, and other documents and
materials, Proprietary Information, and equipment furnished to or prepared by me
in the course of or incident to my employment with the Company, and that I did
not make or distribute any copies of the foregoing.

     I further certify that I have reviewed the Employee Proprietary Information
and Inventions Agreement signed by me and that I have complied with and will
continue to comply with all of its terms, including, without limitation, (i) the
reporting of any idea, process, invention, technology, writing, program, design,
formula, discovery, patent, copyright, or trademark, or any improvement, rights,
or claims related to the foregoing, conceived or developed by me and covered by
the Agreement and (ii) the preservation as confidential of all Proprietary
Information pertaining to the Company. This certificate in no way limits my
responsibilities or the Company's rights under the Agreement.

     On termination of my employment with the Company, I will be employed by
___________ [Name of New Employer] [in the __________ division] and I will be
working in connection with the following projects:

                        [generally describe the projects]

_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________

Date:______________                  _________________________
                                          Employee Name

                                     _________________________
                                          Employee Signature

                                      20