Document:

exv10w2

Exhibit 10.2

EMPLOYEE RETENTION AND MOTIVATION AGREEMENT

     This agreement (the “Agreement”) is effective as of December 5, 2011 (the “Agreement Date”) by
and between (the “Covered Person”) and Progress Software Corporation, a Massachusetts corporation
(the “Company”).

R E C I T A L S

     A. The Covered Person presently serves as an employee or officer of the Company in a role that
is important to the continued conduct of the Company’s business and operations.

     B. The Board of Directors of the Company (the “Board”) has determined that it is in the best
interest of the Company and its stockholders to assure that the Company will have the continued
dedication and objectivity of the Covered Person, notwithstanding the possibility, threat or
occurrence of a Change of Control (as defined below) of the Company.

     C. The Board believes that it is imperative to provide the Covered Person with certain
benefits following a Change of Control and certain severance benefits upon the Covered Person’s
termination of employment following a Change in Control.

     D. In order to accomplish the foregoing objectives, the Board has directed the Company, upon
execution of the Agreement by the Covered Person, to commit to the terms provided herein.

     E. The Covered Party accepts the terms of the Agreement.

     F. Certain capitalized terms used in this Agreement are defined in Section 4 below. In
consideration of the mutual covenants herein contained and in consideration of the continuing
employment of the Covered Person by the Company, the parties agree as follows:

     1. Scope; Term of Agreement. Simultaneously with the execution of this Agreement, the
Company and the Covered Person are also entering into an Executive Employment Agreement (as
amended, the “Employment Agreement”), which provides the Covered Person, in addition to other
benefits set forth therein, with certain benefits in circumstances following a termination of
employment other than following a Change of Control. This Agreement shall be applicable in the
event an Involuntary Termination (as defined below) occurs upon or within twelve (12) months
following a Change of Control. The parties acknowledge that the Covered Person’s employment is at
will, as defined under applicable law, except as may otherwise be provided under the terms of the
Employment Agreement. If the Covered Person’s employment terminates for any reason, the Covered
Person shall not be entitled to any payments, benefits, damages, awards or compensation
(collectively, “recompense”) other than the maximum recompense as provided by one of the following:
(i) this Agreement, or (ii) the Employment Agreement, or (iii) the Company’s existing severance
guidelines and benefit plans which are in effect at the time of termination, or (iv) applicable
statutory provisions. The provisions of this Agreement shall terminate upon the earlier of (i) the
date that all obligations of the parties hereunder have been satisfied, or (ii) the date on which
the Covered Person is no longer employed pursuant to the Employment Agreement. A termination of
the provisions of this Agreement pursuant to the preceding sentence shall be effective for all

 

 

purposes, except that such termination shall not affect the payment or provision of
compensation or benefits on account of termination of employment occurring prior to the termination
of the provisions of this Agreement.

     2. Benefits Immediately Following Change of Control.

          (a) Treatment of Outstanding Options and Restricted Equity. Effective immediately
upon a Change of Control, unless the outstanding stock options and shares of restricted equity held
by the Covered Person under the Company’s equity incentive plans on the date of the Change of
Control are continued by the Company or assumed by its successor entity, all outstanding stock
options held by the Covered Person shall accelerate and become fully exercisable, and all shares of
restricted equity held by the Covered Person shall become nonforfeitable and all restrictions shall
lapse. If such outstanding stock options and shares of restricted equity held by the Covered
Person are continued by the Company or assumed by its successor entity, then vesting shall continue
in its usual course. Furthermore, in the event the shares of stock receivable upon the exercise of
the assumed stock options or the vesting of the assumed shares of restricted equity (as the case
may be) are for stock of a company whose shares are not regularly traded on an established national
securities exchange, the Covered Person shall upon subsequent exercise of the assumed options or
the vesting of the assumed shares of restricted equity (as the case may be) be entitled to receive
at his election either (1) cash in an amount equal to the difference between the aggregate fair
market value of the shares of common stock on the date of exercise and the aggregate exercise price
of the stock options or the aggregate fair market value of the restricted equity (as the case may
be) or (2) shares of common stock. Notwithstanding anything in this Section 2(a), at or following
the Change of Control, the successor entity will have the option in its sole discretion to
accelerate, or to cause the Company to accelerate, all stock options or shares of restricted equity
held by the Covered Person that are assumed in the Change of Control in accordance with this
Section 2(a).

          (b) Payment of Annual Bonus. Effective immediately upon a Change of Control, the
Covered Person’s annual cash bonus for the year in which the Change of Control occurs shall be
fixed at the Covered Person’s target bonus level as in effect immediately prior to the Change of
Control and the Covered Person shall be paid a pro-rated portion of such bonus, as of the date of
the Change of Control, based on the number of calendar days in the fiscal year to which the bonus
relates which have elapsed prior to the date of the Change of Control. Any payment to which the
Covered Person is entitled pursuant to this section shall be paid in a lump sum within thirty (30)
days of the event requiring such payment.

     3. Severance Benefits.

          (a) Termination Following a Change of Control. If the Covered Person’s employment
terminates after a Change of Control, then Covered Person shall be entitled to receive the
Mandatory Payments described in Section 3(a)(ii) below and, subject to Section 5 below, the
Covered Person shall be entitled to receive severance benefits as follows:

               (i) Involuntary Termination. If the Covered Person’s employment is terminated within
twelve (12) months following a Change of Control as a result of Involuntary Termination, then the
Covered Person shall be entitled to receive a lump sum severance payment

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in an amount equal to eighteen (18) months of the Covered Person’s annual Target Compensation;
and in addition, for a period of eighteen (18) months after such termination, the Company shall be
obligated to provide the Covered Person with benefits that are substantially equivalent to the
Covered Person’s benefits (medical, dental, vision and life insurance) that were in effect
immediately prior to the Change of Control. In addition, each outstanding stock option held by the
Covered Person which had been granted prior to the date of the Change of Control under the
Company’s equity incentive plans shall accelerate and become fully exercisable and all shares of
restricted equity held by the Covered Person which had been granted prior to the date of the Change
of Control under the Company’s equity incentive plans shall become nonforfeitable and all
restrictions shall lapse. Any severance payments to which the Covered Person is entitled pursuant
to this section shall be paid in a lump sum within thirty (30) days of the effective date of the
Covered Person’s termination. For purposes of this Paragraph 3(a)(i), the term “Target
Compensation” shall mean the highest level of Target Compensation applicable to the Covered Person
from the period of time immediately prior to the Change of Control through the effective date of
the Covered Person’s termination. With respect to any taxable income that the Covered Person is
deemed to have received for federal income tax purposes by virtue of the Company providing
continued employee benefits to the Covered Person (i.e medical, dental, vision and life insurance),
the Company shall make a cash payment to the Covered Person such that the net economic result to
the Covered Person will be as if such benefits were provided on a tax-free basis to the same extent
as would have been applicable had the Covered Person’s employment not been terminated. Such cash
payment shall be made no later than March 15 of the following each calendar year in which such
benefits are taxable to the Covered Person.

               Anything in this Agreement to the contrary notwithstanding, if at the time of the Covered
Person’s separation from service (within the meaning of Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”), the Covered Person is considered a “specified employee” within
the meaning of Section 409A(a)(2)(B)(i) of the Code, and if any payment that the Covered Person
becomes entitled to under this Agreement is considered deferred compensation subject to interest
and additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application
of Section 409A(a)(2)(B)(i) of the Code, then no such payment shall be payable prior to the date
that is the earliest of (A) six months after the Covered Person’s date of termination, (B) the
Covered Person’s death, or (C) such other date as will cause such payment not to be subject to such
interest and additional tax. The parties agree that this Agreement may be amended, as reasonably
requested by either party and as may be necessary to comply fully with Section 409A of the Code and
all related rules and regulations in order to preserve the payments and benefits provided hereunder
without additional cost to either party.

               (ii) Voluntary Resignation. If the Covered Person’s employment terminates by reason
of the Covered Person’s voluntary resignation (and is not an Involuntary Termination), then the
Covered Person shall not be entitled to receive any severance payments or other benefits except
that Covered Person shall be entitled to the following (the “Mandatory Payments”):

	 	(A)	 	All accrued but unpaid base
salary through the date the Covered Person’s employment is
terminated, to be paid in a

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	 	 	 	lump sum cash payment within thirty (30) days following the
termination date or sooner if required by law;
	 
	 	(B)	 	Pay for any vacation time earned
but not used through the termination date, to be paid in a lump
sum cash payment within thirty (30) days following the
termination date or sooner if required by law;
	 
	 	(C)	 	Except to the extent that the
Covered Person’s employment is terminated for Cause, any bonus
compensation awarded for the fiscal year preceding that in which
the termination occurs, but unpaid on the termination date, to
be paid and provided in accordance with the Board’s standard
policies for paying executive incentive compensation, but in no
event later than sixty (60) days after the end of such fiscal
year to which the bonus relates;
	 
	 	(D)	 	Any unpaid or unreimbursed
business expenses incurred and documented in accordance with the
Company’s expense reimbursement policy then in effect by the
Covered Person, to the extent incurred during the term of the
Covered Person’s employment, to be paid in a lump sum cash
payment within thirty (30) days following the termination date;
and
	 
	 	(D)	 	Any accrued but unpaid benefits
provided under the Company’s employee benefit plans, to be paid
and provided in accordance with the terms of the applicable
plan.

               (iii) Disability; Death. If the Company terminates the Covered Person’s employment as
a result of the Covered Person’s Disability (as defined below), or such Covered Person’s employment
is terminated due to the death of the Covered Person, then the Covered Person shall not be entitled
to receive any severance payments or other benefits, other than the Mandatory Payments or those (if
any) as may then be established under the Company’s then existing severance guidelines and benefit
plans at the time of such Disability or death.

               (iv) Termination for Cause. If the Company terminates the Covered Person’ employment
for Cause (as defined below), then the Covered Person shall not be entitled to receive any
severance payments, bonus payments or other benefits following the date of such termination, other
than the Mandatory Payments (excluding amounts under (ii)(c) above), and the Company shall have no
obligation to provide for the continuation of any health and medical benefit or life insurance
plans existing on the date of such termination, other than as specifically required by applicable
law.

          (b) Termination Other than in Connection with a Change of Control. If the Covered
Person’s employment is terminated for any reason either prior to the occurrence of a

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Change of Control or after the twelve (12) month period following a Change of Control, then
the Covered Person shall be entitled to receive severance and any other benefits provided under the
Employment Agreement.

     4. Definition of Terms. The following terms referred to in this Agreement shall have
the following meanings:

          (a) Change of Control. “Change of Control” shall mean the occurrence of any of the
following events:

               (i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more
of the total voting power represented by the Company’s then outstanding voting securities, whether
by tender offer, or otherwise; or

               (ii) A majority of the members of the Board are replaced during any twelve (12) month period
by directors whose appointment or election is not endorsed by a majority of the members of the
Board before the date of such appointment or election; or

               (iii) The consummation of a merger or consolidation of the Company with any other entity,
other than (A) a merger or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity) at least fifty percent (50%) of
the total voting power represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or (B) a merger or consolidation which
would result in the voting securities of the Company outstanding immediately prior thereto
representing less than 50% of the total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after such merger or consolidation; but
the Company is clearly the acquirer considering the totality of the circumstances, including such
factors as whether the president of the Company will continue as president of the Company or the
surviving entity, the majority of the directors of the Company or the surviving entity will be
incumbent directors, substantially all of the executive officers of the Company will be retained,
etc., all as determined immediately prior to the consummation of the merger or consolidation by the
incumbent directors.

               (iv) The sale or disposition by the Company of all or substantially all of the Company’s
assets.

          (b) Involuntary Termination. “Involuntary Termination” shall mean (i) without the
Covered Person’s express written consent, the assignment to the Covered Person of any duties or the
significant reduction of the Covered Person’s duties, either of which is materially inconsistent
with the Covered Person’s position with the Company and responsibilities in effect immediately
prior to such assignment, or the removal of the Covered Person from such position and
responsibilities, which is not effected for Disability or for Cause (for the avoidance of doubt, a
material diminution in responsibilities will be deemed to have occurred if either (A) the Covered
Person ceases to hold the position and title of Chief Executive

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Officer of the Company (or any successor entity) and its ultimate parent or (B) the failure of
the Covered Person to be nominated or elected as a member of the Board (or the Board of Directors
of any successor entity) and the Board of Directors of the Company’s (or its successor’s) ultimate
parent); (ii) a material reduction by the Company in the base salary and/or bonus of the Covered
Person as in effect immediately prior to such reduction; (iii) a material reduction by the Company
in the kind or level of employee benefits to which the Covered Person is entitled immediately prior
to such reduction with the result that the Covered Person’s overall benefit package is
significantly reduced; (iv) the relocation of the Covered Person to a facility or a location more
than fifty (50) miles from the Covered Person’s then present location, without the Covered Person’s
express written consent; (v) any purported termination of the Covered Person by the Company which
is not effected for death or Disability or for Cause, or any purported termination for Cause for
which the grounds relied upon are not valid; (vi) the failure of the Company to obtain, on or
before the Change of Control, the assumption of the terms of this Agreement by any successors
contemplated in Section 7 below; or (vii) a material breach of this Agreement by the Company. An
Involuntary Termination shall be effective upon written notice by the Covered Person.

          (c) Cause. “Cause” shall mean (i) any act of personal dishonesty taken by the Covered
Person in connection with his or her responsibilities as an employee and intended to result in
substantial personal enrichment of the Covered Person, (ii) the conviction of a felony, (iii) a
willful act by the Covered Person which constitutes gross misconduct and which is injurious to the
Company, (iv) material breach of a material provision of this Agreement or of the Proprietary
Information Agreement (which is not cured within 30 days following notice) or (v) continued
violations by the Covered Person of the Covered Person’s obligations as an employee of the Company
which are demonstrably willful and deliberate on the Covered Person’s part after there has been
delivered to the Covered Person a written demand for performance from the Company which describes
the basis for the Company’s belief that the Covered Person has not substantially performed his or
her duties.

          (d) Disability. “Disability” shall mean that the Covered Person has been unable to
perform his or her duties as an employee of the Company as the result of incapacity due to physical
or mental illness, and such inability, at least twenty-six (26) weeks after its commencement, is
determined to be total and permanent by a physician selected by the Company or its insurers and
acceptable to the Covered Person or the Covered Person’s legal representative (such agreement as to
acceptability not to be unreasonably withheld). Termination resulting from Disability may only be
effected after at least thirty (30) days’ written notice by the Company of its intention to
terminate the Covered Person’s employment. In the event that the Covered Person resumes the
performance of substantially all of his or her duties as an employee of the Company before
termination of his or her employment becomes effective, the notice of intent to terminate shall
automatically be deemed to have been revoked.

          (e) Target Compensation. “Target Compensation” shall mean the total of all fixed and
variable cash compensation due to a Covered Person based upon one hundred percent (100%) attainment
of performance levels.

     5. Limitation on Payments. In the event that the severance and other benefits
provided for in this Agreement or otherwise payable to the Covered Person (i) constitute

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“parachute payments” within the meaning of Section 280G of the Code and (ii) but for this
Section 5, would be subject to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), then the Covered Person’s severance benefits under Section 3(a)(i) shall be either

               (i) delivered in full, or

               (ii) delivered as to such lesser extent which would result in no portion of such severance
benefits subject to the Excise Tax, whichever of the foregoing amounts, taking into account the
applicable federal, state and local income taxes and the Excise Tax, results in the receipt by the
Covered Person on an after tax basis, of the greatest amount of severance payments and benefits,
notwithstanding that all or some portion of such severance payments and benefits may be taxable
under Section 4999 of the Code. Unless the Company and the Covered Person otherwise agree in
writing, any determination required under this Section 5 shall be made in writing in good faith by
the accounting firm serving as the Company’s independent public accountants immediately prior to
the Change of Control (the “Accountants”) in good faith consultation with the Covered Person. In
the event of a reduction in benefits hereunder, unless the Covered Person provides direction
otherwise (which alternative direction shall be subject to the Company’s consent, which shall not
be unreasonably withheld), such benefits shall be reduced in the following order: (a) cash payments
not subject to Section 409A of the Code; (b) cash payments subject to Section 409A of the Code; (c)
equity compensation; and (d) non-cash forms of benefit. To the extent any payment is to be made
over time, then the payment shall be reduced in reverse chronological order. For purposes of
making the calculations required by this Section 5, the Accountants, in consultation with the
Covered Person, may make reasonable assumptions and approximations concerning the applicable taxes
and may rely on reasonable good faith interpretations concerning the application of Sections 280G
and 4999 of the Code. The Company and the Covered Person shall furnish to the Accountants such
information and documents as the Accountants may reasonable request in order to make a
determination under this Section. The Company shall bear all costs the Accountants may reasonably
incur in connection with any calculations contemplated by this Section 5.

     6. Remedy. If Covered Person’s benefits are reduced to avoid the Excise Tax pursuant
to Section 5 hereof and notwithstanding such reduction, the IRS determines that the Covered Person
is liable for the Excise Tax as a result of the receipt of severance benefits from the Company,
then Covered Person shall be obligated to pay to the Company (the “Repayment Obligation”) an amount
of money equal to the “Repayment Amount.” The Repayment Amount shall be the smallest such amount,
if any, as shall be required to be paid to the Company so that the Covered Person’s net proceeds
with respect to his or her severance benefits hereunder (after taking into account the payment of
the Excise Tax imposed on such benefits) shall be maximized. Notwithstanding the foregoing, the
Repayment Amount shall be zero if a Repayment Amount of more than zero would not eliminate the
Excise Tax. If the Excise Tax is not eliminated through the performance of the Repayment
Obligation, the Covered Person shall pay the Excise Tax. The Repayment Obligation shall be
discharged within thirty (30) days of either (i) the Covered Person entering into a binding
agreement with the IRS as to the amount of Excise Tax liability, or (ii) a final determination by
the IRS or a court decision requiring the Covered Person to pay the Excise Tax from which no appeal
is available or is timely taken.

     7. Successors.

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          (a) Company’s Successors. Any successor to the Company (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise) or to all or
substantially all of the Company’s business and/or assets shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this Agreement in the same manner
and to the same extent as the Company would be required to perform such obligations in the absence
of a succession. For all purposes under this Agreement, the term “Company” shall include any
successor to the Company’s business and/or assets which executes and delivers an assumption
agreement described in this subsection (a) or which becomes bound by the terms of this Agreement by
operation of law.

          (b) Covered Person’s Successors. The terms of this Agreement and all rights of the
Covered Person’s hereunder shall inure to the benefit of, and be enforceable by, the Covered
Person’s personal or legal representatives, executors, administrators, successors, heirs,
distributes, devisees and legatees.

     8. Notice.

          (a) General. Notices and all other communications contemplated by this Agreement
shall be in writing and shall be deemed to have been duly given when personally delivered or when
mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In the
case of the Covered Person, mailed notices shall be addressed to him or her at the home address
which he or she most recently communicated to the Company in writing. In the case of the Company,
mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed
to the attention of its General Counsel.

          (b) Notice of Termination by the Company. Any termination by the Company of the
Covered Person’s employment with the Company at any time following a Change of Control shall be
communicated by notice of termination to the Covered Person at least five (5) days prior to the
date of such termination, given in accordance with Section 8(a) of this Agreement. Such notice
shall specify the termination date and whether the termination is considered by the Company to be
for Cause as defined in Section 4(c) in which case the Company shall identify the specific
subsection(s) of Section 4(c) asserted by the Company as the basis for the termination and shall
set forth in reasonable detail the facts and circumstances relied upon by the Company in
categorizing the termination as for Cause.

          (c) Notice by Covered Person of Involuntary Termination by the Company. In the event
the Covered Person determines that an Involuntary Termination has occurred at any time following a
Change of Control, the Covered Person shall give written notice that such Involuntary Termination
has occurred as set forth in this Section 8(c). Such notice shall be delivered by the Covered
Person to the Company in accordance with Section 8(a) of this Agreement within sixty (60) days
following the date on which such Involuntary Termination if such Involuntary Termination occurred
as a result of an event set forth in Section 4(b)(i)(A) or (B), (ii)-(vi) or within 120 days of an
event set forth in Section 4(b)(i) other than the parenthetical containing (A) or (B) or (vii),
shall indicate the specific provision or provisions in this Agreement upon which the Covered Person
relied to make such determination and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for such determination. The failure by the Covered Person
to include in the notice any fact or

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circumstance which contributes to a showing of Involuntary Termination shall not waive any
right of the Covered Person hereunder or preclude the Covered Person from asserting such fact or
circumstance in enforcing his or her rights hereunder.

     9. Miscellaneous Provisions.

          (a) No Duty to Mitigate. The Covered Person shall not be required to mitigate the
amount of any payment contemplated by this Agreement (whether by seeking new employment or in any
other manner), nor shall any such payment be reduced by any earnings that the Covered Person may
receive from any other source.

          (b) Waiver. No provision of this Agreement shall be modified, waived or discharged
unless the modification, waiver or discharge is agreed in writing and signed by the Covered Person
and by an authorized officer of the Company (other than the Covered Person). No waiver by either
party of any breach of, or compliance with, any condition or provision of this Agreement by the
other party shall be considered a waiver of any other condition or provision of the same condition
or provision at another time.

          (c) Entire Agreement. Except with respect to the terms of any written employment
agreement, if any, by and between the Company and the Covered Person that is signed on behalf of
the Company, no agreements, representations or understandings (whether oral or written and whether
express or implied) which are not expressly set forth in this Agreement have been made or entered
into by either party with respect to the subject matter hereof.

          (d) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the Commonwealth of Massachusetts.

          (e) Severability. The invalidity or enforceability of any provisions or provisions of
this Agreement shall not affect the validity or enforceability of any other provision hereof, which
shall remain in full force and effect.

          (f) Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by final and binding arbitration in Massachusetts, in
accordance with the rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator’s award in any court having jurisdiction. In the event the Covered
Person prevails in an action or proceeding brought to enforce the terms of this Agreement or to
enforce and collect on any non-de minimis judgment entered pursuant to this Agreement, the Covered
Person shall be entitled to recover all costs and reasonable attorney’s fees.

          (g) No Assignment of Benefits. The rights of any person to payments or benefits under
this Agreement shall not be made subject to option or assignment, either by voluntary or
involuntary assignment or by operation of law, including (without limitation) bankruptcy,
garnishment, attachment or other creditor’s process, and any action in violation of this subsection
(g) shall be void.

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          (h) Employment Taxes. Subject to Section 5, all payments made pursuant to this
Agreement will be subject to withholding of applicable income and employment taxes.

          (i) Assignment by Company. The Company may assign its rights under this Agreement to
an affiliate and an affiliate may assign its rights under this Agreement to another affiliate of
the Company or to the Company; provided, however, that no assignment shall be made if the net worth
of the assignee is less than the net worth of the Company at the time of the assignment. In the
case of any such assignment, the term “Company” when used in a section of the Agreement shall mean
the corporation that actually employs the Covered Person.

          (j) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which together will constitute one and the same instrument.

     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the date first above written.

	 	 	 	 	 	 	 	 	 

	Progress Software Corporation	 	 	 	Covered Person
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Craig Newfield
	 	 	 	By:
	 	/s/ Jay H. Bhatt
	 

	 	 
	 	 	 	 	 	 
	 

	 	Craig Newfield, S.V.P. & General Counsel
	 	 	 	 	 	Jay H. Bhatt

-10-exv10w18

Exhibit 10.18

[insert name]

Name of Participant

BROOKS AUTOMATION, INC.

AMENDED AND RESTATED 2000 EQUITY INCENTIVE PLAN

Stock Unit — Award Notice

     This award notice sets forth the terms of the award (the “Award”), described below, of
restricted Stock Units (the “RSUs”) under the Brooks Automation, Inc. Amended and Restated 2000
Equity Incentive Plan (the “Plan”) to the Participant identified below. The Award is subject to
the terms of the Plan, which are incorporated herein by reference. Any initially capitalized term
not defined herein shall have the meaning assigned to it in the Plan. The term “vest” as used in
this notice with respect to any RSU means the lapsing of the restrictions described herein with
respect to the right to payment under the Award.

	 	1.	 	Name of Participant. The Participant to whom the Award has been
granted is __________.
	 
	 	2.	 	Type and Amount of Award. Subject to such adjustments as are required
or permitted under Section 4(b) of the Plan, the Award shall consist of ____ RSUs.
	 
	 	3.	 	Grant Date. The Award was granted to the Participant on _________ (the
“Grant Date”).
	 
	 	4.	 	Nature of Award. The Award consists of the conditional right to
receive, on the terms and subject to the restrictions set forth herein and in the Plan,
one share of Common Stock for each RSU forming part of the Award.
	 
	 	5.	 	Forfeiture Risk. If the Participant ceases to be an employee for any
reason, any then outstanding and unvested RSUs shall be automatically and immediately
forfeited.
	 
	 	6.	 	Vesting of Award. The Award (unless earlier forfeited) shall vest as
follows unless earlier forfeited in accordance with Section 5 above:

	 	(a)	 	[Insert specific vesting terms];
	 
	 	(b)	 	If there is a Qualifying Termination (as defined below) of the
Participant’s employment by the Company or one of its subsidiaries that occurs
within the one-year period following a Change in Control (as defined below), any
RSUs that were unvested but outstanding immediately prior to the Qualifying
Termination shall be treated as having vested immediately prior to the Qualifying
Termination.
	 
	 	(c)	 	For purposes hereof, the following definitions shall apply:

	 	(1)	 	“Board” means the Board of Directors of the Company.
	 
	 	(2)	 	“Cause” means (i) the Participant’s willful failure to
perform, or serious negligence in the performance of, the Participant’s
duties and responsibilities for the Company or any of its subsidiaries that
remains uncured, or continues, beyond the fifteenth (15th) day following
the date on which the Company gives

 

 

	 	 	 	the Participant notice specifying in reasonable detail the nature of the
failure or negligence; (ii) fraud, embezzlement or other dishonesty with
respect to the Company or any of its subsidiaries or customers; (iii)
conviction of, or a plea of guilty or nolo contendere with respect to, a
felony or to any crime (whether or not a felony) that involves moral
turpitude; or (iv) breach of fiduciary duty or violation of any covenant of
confidentiality, assignment of rights to intellectual property,
non-competition or non-solicitation of customers or employees; provided,
that if at the time of termination of employment the Participant is party to
an employment agreement or similar agreement with the Company or any of its
subsidiaries that includes a definition of “Cause”, the definition contained
in such employment agreement or similar agreement shall apply for purposes
of this Section 6 in lieu of the definition set forth above in this clause
(2).
	 
	 	(3)	 	“Change in Control” means the occurrence of any of the
events described in subsections (A), (B), (C) or (D) below:

	 	(A)	 	Any Person acquires beneficial
ownership (within the meaning of Rule 13d 3 promulgated under
the Exchange Act) of thirty-five (35%) percent or more of either
(x) the then outstanding shares of common stock of the Company
(the “Outstanding Company Common Stock”) or (y) the combined
voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors
(the “Outstanding Company Voting Securities”); provided, that
for purposes of this subsection (3)(A) the following
acquisitions shall not constitute a Change in Control: (I) any
acquisition directly from the Company, (II) any acquisition by
the Company, (III) any acquisition by an employee benefit plan
(or related trust) sponsored or maintained by the Employer, or
(IV) any Business Combination (but except as provided in
subsection (3)(C) below a Business Combination may nevertheless
constitute a Change in Control under subsection (3)(C)); and
provided further, that an acquisition by a Person of thirty-five
percent (35%) percent or more but less than fifty (50%) percent
of the Outstanding Company Common Stock or of the combined
voting power of the Outstanding Company Voting Securities shall
not constitute a Change in Control under this subsection (3)(A)
if within fifteen (15) days of the Board’s being advised that
such ownership level has been reached, a majority of the
“Incumbent Directors” (as hereinafter defined) then in office
adopt a resolution approving the acquisition of that level of
securities ownership by such Person; or
	 
	 	(B)	 	Individuals who, as of the Grant
Date, constituted the Board (the “Incumbent Directors”) cease
for any reason to constitute at least a majority of the Board;
provided, that any individual who becomes a member of the Board
subsequent to the Grant Date and whose election or nomination
for election was approved by a vote of at least two-thirds of
the Incumbent Directors shall be treated as an Incumbent
Director unless he or she assumed office as a result of an
actual or threatened election contest with respect to the
election or removal of directors; or

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	 	(C)	 	There is consummated a
reorganization, merger or consolidation involving the Company,
or a sale or other disposition of all or substantially all of
the assets of the Company (a “Business Combination”), in each
case unless, following such Business Combination, (x) the
Persons who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and of the combined voting
power of the Outstanding Company Voting Securities immediately
prior to the Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the entity
resulting from such Business Combination in substantially the
same proportions as their ownership immediately prior to such
Business Combination of the Outstanding Company Common Stock and
of the combined voting power of the Outstanding Company Voting
Securities, as the case may be, (y) unless in connection with
such Business Combination a majority of the Incumbent Directors
then in office determine that this clause (3)(C)(y) does not
apply to such Business Combination, no Person (excluding any
entity resulting from such Business Combination or any employee
benefit plan (or related trust) of the Employer or of such
corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, thirty-five (35%)
percent or more of, respectively, the then outstanding shares of
common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally
in the election of directors, except to the extent that such
ownership existed prior to the Business Combination and (z) at
least a majority of the members of the Board resulting from such
Business Combination were Incumbent Directors at the time of the
execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or
	 
	 	(D)	 	The stockholders of the Company
approve a complete liquidation or dissolution of the Company;

	 	 	 	provided, that if any payment or benefit payable hereunder upon or following
a Change in Control would be required to comply with the limitations of
Section 409A(a)(2)(A)(v) of the Code and the guidance thereunder in order to
avoid an additional tax under Section 409A of the Code, such payment or
benefit shall be made only if such Change in Control constitutes a change in
ownership or control of the Company, or a change in ownership of the
Company’s assets, described in IRS Notice 2005-1, the proposed regulations
under Section 409A of the Code, or any successor guidance.
	 
	 	(4)	 	“Employer” means the Company and its subsidiaries.
	 
	 	(5)	 	“Exchange Act” means the Securities Exchange Act of
1934, as amended.

-3-

 

	 	(6)	 	“Person” means any individual, entity or other person,
including a group within the meaning of Sections 13(d) or 14(d) (2) of the
Exchange Act.
	 
	 	(7)	 	“Qualifying Termination” means a termination by the
Company or by a subsidiary of the Company of the Participant’s employment
with the Company and its subsidiaries, other than a termination for Cause.

	 	7.	 	Delivery of Shares. Subject to Section 11 below, the remaining
provisions of this Section 7, and Section 10 of the Plan, the Company shall deliver to
the Participant (or, in the event of the Participant’s death, to the executor or
administrator of the Participant’s estate or to the person or persons to whom the RSUs
pass by will or by the laws of descent and distribution) one share of Common Stock for
each RSU that vests. Delivery shall be made not later than thirty (30) days following
the date of vesting.
	 
	 	8.	 	Dividends, etc. The Participant shall not be entitled to any rights as
a shareholder, including rights to vote or rights to dividends or other distributions,
with respect to any RSU, except as to shares of Common Stock actually delivered under
Section 7 above.
	 
	 	9.	 	Adjustments for Stock Splits, etc. If there is any stock split,
reverse stock split, stock dividend, stock distribution or other reclassification of
the Common Stock, any and all new, substituted or additional securities to which the
Employee is entitled by reason of his ownership of the RSUs shall be immediately
subject to the risk of forfeiture and transfer restrictions described herein in the
same manner and to the same extent, if any, as such RSUs.
	 
	 	10.	 	Nontransferability. The Award is not transferable except as death in
accordance with Section 7 above.
	 
	 	11.	 	No Special Employment Rights. The grant of the Award shall not be
construed as limiting in any way the right of the Company and its Affiliates, subject
to applicable law, to terminate the Participant’s employment. Any loss of profit or
potential profit under the Award shall not be an element of damages in any claim
relating to termination of the Participant’s employment. The grant of the Award shall
not entitle the Participant to the grant of any other awards under the Plan.
	 
	 	12.	 	Certain Tax Matters. The Award consists of an unfunded and unsecured
conditional promise by the Company to deliver cash or property in the future. The
Award is intended to qualify for the “short-term deferral” exemption from coverage
under Section 409A. The Company may hold back shares otherwise deliverable under the
Award to satisfy any taxes required to be withheld in connection with the vesting of,
or any payment under, the Award, but reserves the right to take such other or
additional steps as it deems necessary to satisfy its tax withholding obligations,
including imposing as a condition to the delivery of any shares hereunder the payment
by the Participant, or other person to whom such shares are to be delivered, of cash
sufficient to satisfy such obligations.

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