exv10w3






Exhibit 10.3




November 12, 2010




Norman R. Robertson

179 Main Street

Groton, MA 01450




Dear Bud:



The purpose of this letter is to confirm that your employment with Progress Software Corporation
(“Progress” or the “Company”) will terminate on May 13, 2011 (the “Termination Date”). As
discussed with you, the Company would like you to continue in your current role as Senior Vice
President, Finance & Administration and Chief Financial Officer on a full-time basis until November
15, 2010, which is the date on which the new Chief Financial Officer is expected to commence
employment. Furthermore, even after such date, the Company would like you to assist in the
completion of certain tasks, projects or other business transition items during the period
commencing on November 15, 2010 (the “Transition Commencement Date”) and ending on the Termination
Date (the “Transition Period”).




1. Transition Period Arrangements



On the Transition Commencement Date, the following terms will apply to your employment with the
Company—





	(a)	 	You will remain employed with the Company until the Termination Date.
	 
	(b)	 	Your title will be Senior Advisor, Finance and Administration and you will continue to report
to me. In this position, you will not be an officer of the Company.
	 
	(c)	 	Until December 31, 2010, you will be employed with the Company on a full-time basis. Your
base salary and benefits will remain unchanged during such period and you will continue to
accrue vacation and floating holiday time as a full-time employee pursuant to the terms of the
Company’s Vacation and Holidays Policy.
	 
	(d)	 	You will receive your bonus for the first half of the fiscal year ended November 30, 2010
(i.e., for the period from December 1, 2009 until May 31, 2010) pursuant to the Company’s
Executive and Key Contributor Bonus Program when such bonuses are paid in January/February
2011.
	 
	(e)	 	You will remain eligible to receive your bonus for the second half of the fiscal year ended
November 30, 2010 pursuant to the Company’s Executive and Key Contributor Bonus Program, such
payment, if any, to be made in accordance with the terms of, and at the time provided in, the
Program.
	 
	(f)	 	From January 1, 2011 until the Termination Date (the “Part-Time Transition Period”), you will
be employed with the Company on a part-time basis. The




 









 












	 	 	Company will expect you to commit a minimum of one full day per week performing your job
duties. During the Part-Time Transition Period, your annualized base salary will be
$64,000.00, to be paid pursuant to PSC’s standard payroll practices, policies and
procedures. During the Part-Time Transition Period, you will play an important role in
assisting our new Chief Financial Officer in critical functions of his position, including
preparation of financial statements, internal financial and accounting information and
analysis, preparation for year-end and quarterly conference calls with investors,
preparation of SEC filings, preparation of earnings releases and related matters.
	 
	(g)	 	During the Part-Time Transition Period, you will accrue vacation and floating holiday time on
a pro-rata basis, per the Company’s Vacation and Holidays Policy. You will retain all of your
currently accrued vacation and floating holiday time.
	 
	(h)	 	During the Part-Time Transition Period, your continued participation in the Company’s benefit
plans will be determined by the specific terms of such plans. For example, you (and your
former spouses) will no longer be eligible to continue to participate in the Company’s benefit
plans providing medical and dental coverage. Instead, you (and your former spouses) will be
eligible to continue medical and dental coverage by electing COBRA and the Company will pay
the COBRA premiums (less the amount you would have otherwise been required to contribute if
you (and your former spouses) had continued on the Company’s medical and dental plans as an
employee with your current coverage elections). A separate package detailing COBRA will be
mailed to your home shortly after January 1, 2011. It is important to highlight that, as
described in the attached Benefits Information Attachment, you must complete the COBRA
application you will receive from Aetna to continue your medical and dental coverage beyond
your Termination Date. Cindy Swech and Kristen Jadul will work with you to complete the
necessary paperwork to elect COBRA.
	 
	(i)	 	During the Transition Period, your unvested stock options and restricted stock units will
continue to vest in accordance with the terms and conditions of such stock options and
restricted stock units.
	 
	(j)	 	Although you will cease to be an officer of the Company on November 15, 2010, your
involvement in critical accounting and financial matters (as described in paragraph 1(f)
above) means that, during the Transition Period, you will continue to be subject to the
trading blackouts and pre-clearance requirements of the Company’s Insider Trading Policy
applicable to Directors and Officers.





2. Employment Termination Benefits



Upon the Termination Date, you will be entitled to the following, subject to the terms and
conditions of this letter:





	(a)	 	Salary: The Company will issue a payment to you on the Termination Date equal to the
total amount of your outstanding wages and unused vacation and floating holidays accrued
through such date, less applicable deductions and withholdings, in accordance with the
Company’s regular payroll practices.




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	(b)	 	Medical and Dental Benefits: If you elected COBRA as described in paragraph 1(h)
above in connection with the commencement of the Part-Time Transition Period, the provision of
your (and your former spouses) medical and dental coverage through COBRA will continue
following the Termination Date, subject to paragraph 3(b) below).
	 
	(c)	 	Outplacement. You will be entitled to outplacement services, at the Company’s
expense, as further described in the Keystone materials to be provided you on the Termination
Date. The Keystone program for which you qualify is entitled “Career Transition.”
	 
	(d)	 	Expense Reimbursement: The Company will reimburse you for all actual reasonable and
customary business expenses incurred by you (in the furtherance of Company business) on or
prior to the Termination Date in accordance with the Company’s regular expense reimbursement
policies. In order to qualify for reimbursement, reimbursement requests for all such expenses
must be submitted by June 1, 2011.
	 
	(e)	 	Laptop and Blackberry. After the Termination Date, you will be entitled to keep the
Company issued laptop (the “Laptop”) and blackberry (the “Blackberry”) for your personal use.
Prior to the Termination Date, the Company will be permitted to remove from the Laptop and the
Blackberry any and all materials, messages and other information that the Company reasonably
and in good faith determines relate to the business of the Company as well as any software
licensed or owned by the Company and you will cooperate with the Company with respect to such
removal. Following such removal, the Company shall transfer ownership of the Laptop and the
Blackberry to you.
	 
	(f)	 	Mobile Phone. After the Termination Date, you will be entitled to keep the Company
issued mobile phone (the “Phone”) for your personal use. During the thirty (30) day period
after the Termination Date, the Company will continue to pay the bills, invoices and other
charges relating to the Phone for such period. However, within thirty (30) days after the
Termination Date, you must either (a) cancel the account associated with the Phone (the “Phone
Account”), or (b) transfer the Phone Account to a personal account (i.e., you may retain the
phone number for personal use) such that the Company no longer has any responsibility for, or
connection with, any bills, invoices or other charges in connection with the Phone or the
Phone Account. If you do not accomplish either (a) or (b) above within thirty (30) days after
the Termination Date, the Company will cancel the Phone Account.
	 
	(g)	 	Other Benefits: Except as otherwise expressly stated in this letter or the enclosed
Benefits Information Attachment, all of your benefits as an employee of the Company will
terminate as of the Termination Date. You will be provided with more detailed information
concerning your conversion options with respect to certain benefits under separate cover.




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3. Severance Benefits



In addition to the benefits provided in Paragraph 2 of this letter, provided that you execute the
Separation Agreement and Release in the form attached hereto as Exhibit A (the
“SAR”), and return it to me by May 20, 2011, then, in consideration for such execution and the
rights and obligations included in the SAR, the Company will provide the following additional
payments and benefits:





	(a)	 	Salary Continuation. For a period of eighteen (18) months after the Termination Date
(the “Severance Period”), the Company will continue to pay your Target Compensation in
accordance with the Company’s normal payroll practices and procedures and subject to all
applicable deductions and withholdings. Such severance shall be paid bi-weekly in the amount
of $21,923.08, before taxes and other deductions. Such payment shall commence on the first
payroll date after the Termination Date. Solely for purposes of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), each installment payment is considered a
separate payment. For purposes of your severance, the term “Target Compensation” shall mean
the total of all fixed (which for this purpose shall mean $320,000) and variable (which for
this purpose shall mean $250,000) cash compensation due based upon one hundred percent (100%)
attainment of performance levels.
	 
	(b)	 	Medical and Dental Benefits before July 1, 2012. If you elected COBRA coverage, the
Company will pay the COBRA premiums (less the amount you would have otherwise been required to
contribute for your (and your former spouses) health benefits if you (and your former spouses)
had continued on the Company’s medical and dental plans with your current coverage elections
(the “Employee COBRA Payment”) until the earlier of (i) July 1, 2012, or (ii) the date when
you become eligible for substantially equivalent health insurance coverage in connection with
new employment or self-employment (the “COBRA Premium Payment Period”). Although your
eligibility for COBRA (as described in the Benefits Information Attachment) is not contingent
on your execution of the SAR, the Company’s obligation to pay the COBRA premiums in accordance
with this paragraph is contingent upon your execution of the SAR. Note that all cost
allocations and calculations required by this paragraph will be made in accordance with the
American Recovery and Reinvestment Act of 2009.
	 
	(c)	 	Medical and Dental Benefits after July 1, 2012. After July 1, 2012, you (and your
former spouses) will no longer be eligible (under Federal law) for COBRA coverage. From and
after July 1, 2012 until November 12, 2012 (i.e., the date that is eighteen months after your
Termination Date), provided that you are not eligible for substantially equivalent health
insurance coverage in connection with new employment or self-employment on or prior to that
date, the Company will reimburse you for the cost of health insurance coverage you obtain (for
yourself and your former spouses) during such period in an amount equal to the percentage of
COBRA Premiums paid by the Company during the COBRA Premium Payment Period.




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	(d)	 	FY11 Bonus. You will remain eligible to receive a pro-rata portion (based on the
number of days employed with the Company during FY11) of your bonus for the fiscal year ended
November 30, 2011 pursuant to the Company’s Executive and Key Contributor Bonus Program (the
“FY11 Program”), such payment, if any, to be prorated between full-time employment and
part-time employment, and otherwise made in accordance with the terms of, and at the time
provided in, the FY11 Program.
	 
	(e)	 	Stock Options. All unvested stock options held by you which were granted prior to
the Termination Date under the Company’s stock option plans which would otherwise vest and
become fully exercisable during the one year period following the Termination Date shall
instead accelerate and become fully exercisable as of the Termination Date. The vesting of
all other outstanding stock options shall cease immediately as of the Termination Date.
Unvested options will be cancelled on the Termination Date. Vested options must be exercised
on or before February 13, 2012. Vested but unexercised options will be cancelled on February
13, 2012.
	 
	(f)	 	Restricted Stock Units. All shares of restricted equity held by you which were
granted prior to the Termination Date under the Company’s stock option plans which would
otherwise become nonforfeitable and not subject to any restrictions during the one year period
following the Termination Date shall instead become nonforfeitable and not subject to any
restrictions as of the Termination Date.





4. Employee Retention and Motivation Agreement



You are a party to an Employee Retention and Motivation Agreement (the “ERMA”), which provides
severance and other benefits to you in the event of a Change in Control (as defined in the ERMA) of
the Company. In the event that a Change in Control of the Company occurs on or prior to May 13,
2011, the ERMA shall be applicable to your termination of employment on the Termination Date and
any and all post-termination severance benefits to be paid to you upon such termination of
employment shall be governed by the terms and conditions of the ERMA and not by Paragraph 3 of this
letter; provided, however, that Paragraph 2 of this letter shall continue to apply
to your termination of employment and, subject to your execution of the SAR, the following
additional terms shall apply:





	(a)	 	The number of months of severance provided pursuant to Section 3(a)(i) of the ERMA shall be
increased by three (3) months, so that the total number of months of severance is eighteen
(18) months, with such additional three months of severance being paid in accordance with the
Company’s normal payroll practices and procedures and subject to all applicable deductions and
withholdings. Such payment shall commence on the first payroll date after the Termination
Date.
	 
	(b)	 	The number of months of benefits (medical, dental, vision and life insurance) provided
pursuant to Section 3(a)(i) of the ERMA shall be increased by three (3) months, so that the
total number of months of benefits is eighteen (18) months.
	 
	(c)	 	If the outstanding stock options and shares of restricted equity held by you under the
Company’s stock option plans on the date of the Change of Control are




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	 	 	continued by the Company or assumed by its successor entity, then the acceleration
provisions of subparagraphs (e) and (f) of Paragraph 3 shall apply.
	 
	(d)	 	You will have the right to exercise vested options until February 13, 2012. Vested but
unexercised options will be cancelled on February 13, 2012.




For clarification purposes, to the extent that a Change in Control of the Company does not occur on
or prior to May 13, 2011, then the ERMA shall not apply to your termination of employment on the
Termination Date.



Except as described above, nothing in this new employment arrangement shall serve to modify — and
you shall still be bound by — the terms of the Employee Proprietary Information and
Confidentiality Agreement between you and the Company, dated December 30, 2002 (the “EPICA”).



The terms set forth in this letter, the SAR, the enclosed Benefits Information Attachment and the
ERMA, to the extent applicable, represent the entire consideration being offered to you in
connection with the termination of your employment with the Company.



Please acknowledge your acceptance of these terms by signing in the space below.




Sincerely,




	 	 	 	 	 
	/s/ Richard D. Reidy
 	 	 
	Richard D. Reidy 	 	 



ACKNOWLEDGED AND AGREED TO:




	 	 	 

	/s/ Norman R. Robertson

	 	November 12, 2010
	 

Norman R. Robertson

	 	 Date







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