Document:

exv10w18

 

Exhibit 10.18

EXECUTIVE EMPLOYMENT AGREEMENT

     This Employment Agreement (this “Agreement”) is made as of May 1, 2005 (the “Effective Date”),
by and between BMC Software, Inc., a Delaware corporation (the “Employer”), and Harold I. Goldberg
(the “Executive”). The Employer and the Executive are each a “party” and are together “parties” to
this Agreement.

RECITALS

     WHEREAS, the Employer desires to employ the Executive, and the Executive wishes to accept such
employment, upon the terms and conditions set forth in this Agreement; and

     WHEREAS, the Executive acknowledges that a substantial portion of his employment duties will
be undertaken in the state of Texas at the corporate headquarters of the Employer. In addition to
Executive’s physical presence in the state of Texas while undertaking his employment duties, all or
a substantial portion of his employment undertakings outside the state of Texas relate to the
business of the corporate headquarters located in Houston, Texas. Executive acknowledges the
substantial nexus between his employment and the state of Texas.

AGREEMENT

     NOW THEREFORE, in consideration of the employment compensation to be paid to the Executive and
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties, intending to be legally bound, agree as follows:

	1.	 	DEFINITIONS

     For the purposes of this Agreement, the following terms have the meanings specified or
referred to in this Section 1.

     “Agreement” refers to this Employment Agreement, including all Exhibits attached hereto, as
amended from time to time.

     “Benefits” as defined in Section 3.1(b).

     “Board of Directors” refers to the board of directors of the Employer.

     “Change of Control” refers to (i) the acquisition of at least 50% of Employer’s outstanding
voting stock; (ii) an unapproved change in the majority of the Employer’s board of directors; (iii)
a merger, consolidation, or similar corporate transaction in which the Company’s shareholders
immediately prior to the transaction do not own more than 60% of the voting stock of the surviving
corporation in the transaction; and (iv) shareholder approval of the company’s liquidation,
dissolution, or sale of substantially all of its assets.

     “Confidential Information” means any and all:

 

 

	 	a.	 	trade secrets (as defined herein) concerning the business and
affairs of the Employer, product specifications, data, know-how, formulae,
compositions, processes, designs, sketches, photographs, graphs, drawings,
samples, inventions and ideas, past, current, and planned research and
development, current and planned manufacturing or distribution methods and
processes, customer lists, current and anticipated customer requirements, price
lists, market studies, business plans, computer software and programs
(including object code and source code), computer software and database
technologies, systems, structures, and architectures (and related formulae,
compositions, processes, improvements, devices, know-how, inventions,
discoveries, concepts, ideas, designs, methods and information), and any other
information, however documented, that is a trade secret;
	 
	 	b.	 	information concerning the business and affairs of the Employer
(which includes historical financial statements, financial projections and
budgets, historical and projected sales, capital spending budgets and plans,
the names and backgrounds of key personnel, personnel training and techniques
and materials), however documented; and
	 
	 	c.	 	notes, analysis, compilations, studies, summaries, and other
material prepared by or for the Employer containing or based, in whole or in
part, on any information included in the foregoing.

     “Disability” as defined in Section 6.2.

     “Effective Date” is the date stated in the first paragraph of the Agreement.

     “Employee Invention” shall mean any idea, invention, technique, modification, process, or
improvement (whether patentable or not), any industrial design (whether registerable or not), any
mask work, however fixed or encoded, that is suitable to be fixed, embedded or programmed in a
semiconductor product (whether recordable or not), and any work of authorship (whether or not
copyright protection may be obtained for it) created, conceived, or developed by the Executive,
either solely or in conjunction with others, during the Employment Period, or a period that
includes a portion of the Employment Period, that relates in any way to, or is useful in any manner
in, the business then being conducted or proposed to be conducted by the Employer, and any such
item created by the Executive, either solely or in conjunction with others, following termination
of the Executive’s employment with the Employer, that is based upon or uses Confidential
Information.

     “Employment Period” is the term of the Executive’s employment under this Agreement.

     “Fiscal Year” shall mean the Employer’s fiscal year, which shall end on March 31 of each year,
or as changed from time to time.

     “for cause” as defined in Section 6.3.

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     “Good Reason” as defined in Section 6.3.

     “person” is any individual, corporation (including any non-profit corporation), general or
limited partnership, limited liability company, joint venture, estate, trust, association,
organization, or governmental body.

     “Proprietary Items” as defined in Section 7.2(a)(iv).

     “Salary” as defined in Section 3.1(a).

     “trade secrets” shall mean the whole or any part of any scientific or technical information,
design, process, procedure, formula, or improvement that has value and that the owner has taken
measures to prevent from becoming available to persons other than those selected by the owner to
have access for limited purposes.

	2.	 	EMPLOYMENT TERMS AND DUTIES

	 	2.1	 	EMPLOYMENT

     The Employer hereby employs the Executive, and the Executive hereby accepts employment by the
Employer, upon the terms and conditions set forth in this Agreement.

	 	2.2	 	EMPLOYMENT PERIOD

     Subject to the provisions of Section 6, the term of the Executive’s employment under this
Agreement will commence upon the Effective Date and shall continue in effect through the third
anniversary of the Effective Date (the “Employment Period”). The Employment Period may be further
extended by mutual agreement of the parties.

	 	2.3	 	DUTIES

     The Executive will have such duties as are assigned or delegated to the Executive by the Chief
Executive Officer of Employer, and will initially serve as the Employer’s Vice President of
Worldwide Marketing. The Executive will devote his entire business time, attention, skill, and
energy exclusively to the business of the Employer, will use his best efforts to promote the
success of the Employer’s business, and will cooperate fully with the Chief Executive Officer of
Employer, in the advancement of the best interests of the Employer. The Executive’s employment
will be subject to the policies maintained and established by the Employer, from time to time.
Nothing in this Section 2.3, however, will prevent the Executive from engaging in additional
activities in connection with passive personal investments and community affairs that are not
inconsistent with the Executive’s duties under this Agreement. Additionally, nothing in this
Section 2.3 will prevent the Executive from serving on the Board of Directors of other companies or
organizations, or engaging in other activities, so long as such participation does not conflict
with the interests or business of Employer or require such involvement as to interfere with the
performance of the Executive’s duties hereunder and has been expressly approved by the

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Chief Executive Officer of Employer. If the Executive is elected as a director of the Employer or
as a director or officer of any of its affiliates, the Executive will fulfill his duties as such
director or officer without additional compensation. The Executive acknowledges and agrees that he
owes a fiduciary duty of loyalty, fidelity and allegiance to act at all times in the best interests
of the Employer.

	3.	 	COMPENSATION

	 	3.1	 	COMPENSATION

	 	a.	 	Salary. During the Employment Period, the Executive
will be paid an annual base salary of $300,000 (the “Salary”), which will be
payable in twenty-four (24) equal installments according to the Employer’s
customary payroll practices. Executive may be subject to such increases in
Salary as deemed appropriate in the sole discretion of the Chief Executive
Officer who will review Executive’s salary on at least an annual basis.
	 
	 	b.	 	Benefits. The Executive will, during the Employment
Period, be permitted to participate in such pension, profit sharing, life
insurance, hospitalization, major medical, and other employee benefit plans of
the Employer that may be in effect from time to time, to the extent the
Executive is eligible under the terms of those plans (collectively, the
“Benefits”).
	 
	 	c.	 	Cash Bonus. Executive will be eligible for a cash
bonus as described in Attachment A incorporated herein by reference.

	4.	 	FACILITIES AND EXPENSES

	 	4.1	 	FACILITIES.

     The Employer will furnish the Executive office space, equipment, supplies, and such
other facilities and personnel as the Employer deems necessary or appropriate for the
performance of the Executive’s duties under this Agreement, including furnishing office
space at Employer’s headquarters in Houston, TX and at Employer’s facility in Sunnyvale, CA.

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	 	4.2	 	EXPENSES.

     The Employer will pay on behalf of the Executive (or reimburse the Executive for)
reasonable expenses incurred by the Executive at the request of, or on behalf of, the
Employer in the performance of the Executive’s duties pursuant to this Agreement, and in
accordance with the Employer’s employment policies, including reasonable travel and
entertainment expenses incurred by the Executive in attending business meetings, in
appropriate business entertainment activities, and for promotional expenses. The Executive
must file expense reports with respect to such expenses in accordance with the Employer’s
policies then in effect.

	5.	 	VACATIONS AND HOLIDAYS

     The Executive will be entitled to paid vacation during the term of the Agreement in accordance
with the vacation policies of the Employer in effect for its employees from time to time. The
Executive will also be entitled to the paid holidays and other paid leave set forth in the
Employer’s policies.

	6.	 	TERMINATION

	 	6.1	 	EVENTS OF TERMINATION

     The Employment Period, the Executive’s Salary and any and all other rights of the Executive
under this Agreement or otherwise as an employee of the Employer will terminate (except as
otherwise provided in this Section 6):

	 	a.	 	upon the death of the Executive;
	 
	 	b.	 	upon the Disability (as defined in Section 6.2) of the
Executive immediately upon notice from either party to the other;
	 
	 	c.	 	upon termination by the Employer for cause (as defined in
Section 6.3);
	 
	 	d.	 	upon the voluntary retirement from or voluntary resignation of
employment by the Executive for any reason other than those set forth in
Section 6.1(f) below;
	 
	 	e.	 	upon termination by the Employer for any reason other than
those set forth in Section 6.1(a) through 6.1(d) above; or
	 
	 	f.	 	upon voluntary resignation of employment by the Executive
within 30 days of the occurrence of an event that constitutes Good Reason, as
defined in Section 6.3 below.

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     Upon termination of the Employment Period, as provided above or otherwise, Executive’s rights
respecting Benefits, stock options, and Cash Bonus will be determined under the applicable plan or
program providing the same.

	 	6.2	 	DEFINITION OF DISABILITY

     For purposes hereof, the term “Disability” shall mean an incapacity by accident, illness or
other circumstance which renders the Executive mentally or physically incapable of performing the
duties and services required of the Executive hereunder on a full-time basis for a period of at
least 180 consecutive days.

	 	6.3	 	DEFINITION OF “FOR CAUSE” AND “GOOD REASON”

	 	a.	 	For purposes of Section 6.1, the phrase “for cause” means:(i)
the Executive’s continued and material failure to perform his obligations under
this Agreement ; (ii) the Executive’s material failure to adhere to any
Employer policy or code of conduct; (iii) the appropriation (or attempted
appropriation) of a material business opportunity of the Employer, including
attempting to secure or securing any personal profit in connection with any
transaction entered into on behalf of the Employer; (iv) the Executive’s
engaging in conduct that is materially injurious to the Employee, (v) the
misappropriation (or attempted misappropriation) of any of the Employer’s funds
or property; (vi) the conviction of or the entering of a guilty plea or plea of
no contest with respect to, a felony, the equivalent thereof, or any other
crime with respect to which imprisonment is a punishment or. ; (vii) the
conviction of the Executive by a court of competent jurisdiction of a crime
involving moral turpitude. The determination of whether the Executive’s
employment is terminated for cause shall be made solely by the Employer, which
shall act in good faith in making such determination.
	 
	 	b.	 	“Good Reason” means:
	 
	 	 	 	The occurrence, within 12 months after the date upon which a Change of
Control occurs, of any one or more of the following events without
Executive’s express written consent: (i) a material diminution of
Executive’s duties without reasonable business basis so as to cause
humiliation or disgrace of the Executive; (ii) a reduction by the Employer
or a subsidiary thereof in Executive’s Salary as in effect immediately prior
to the Change of Control or as the same may be increased from time to time
or a change in the eligibility requirements or performance criteria under
any bonus, incentive or compensation plan, program or arrangement under
which Executive is covered immediately prior to the Change of Control which
adversely affects Executive; (iii) the Employer or a subsidiary thereof
requiring Executive to be permanently based anywhere other than within 50
miles of either Houston, Texas or Sunnyvale,

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	 	 	 	California; (iv) without replacement by a plan providing benefits to
Executive equal to or greater than those discontinued, the failure by the
Employer or a subsidiary thereof to continue in effect, within its maximum
stated term, any pension, bonus, incentive, stock ownership, purchase,
option, life insurance, health, accident, disability, or any other employee
benefit plan, program or arrangement in which Executive is participating at
the time of the Change of Control, or the taking of any action by the
Employer or a subsidiary thereof that would adversely affect Executive’s
participation or materially reduce Executive’s benefits under any of such
plans; or (v) if Executive’s primary employment duties are with a subsidiary
of the Employer, the sale, merger, contribution, transfer or any other
transaction in conjunction with which the Employer’s ownership interest in
the subsidiary decreases below a majority interest.

	 	6.4	 	SEVERANCE

     Should the Executive’s employment with the Employer be terminated during the Employment Period
pursuant to Section 6.1(e) above, the Executive shall be entitled to:

	 	a.	 	a lump-sum payment equal to one year of his then current
Salary; and

	 	b.	 	a lump-sum payment equal to one times his then current cash
bonus target amount.

     Such payments under this section will be made no later than 30 days following the termination
from employment. Severance payments do not constitute continued employment beyond the termination
date.

	 	6.5	 	CHANGE OF CONTROL

     If, within 12 months of a Change of Control, the Executive’s position is eliminated or the
Executive is terminated pursuant to Section 6.1(e) or 6.1(f) above, regardless of whether such
termination event occurs during or after the Employment Period, the Executive shall be entitled to:

	 	a	 	a lump-sum payment equal to one year of his then current Salary;
	 
	 	b	 	a lump-sum payment equal to one times his then current cash
bonus target amount;
	 
	 	c	 	Monthly payments for twelve months of COBRA premiums paid by
the Employer to continue the health coverage and dental coverage immediately
prior to the termination date; and

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	 	d.	 	potential vesting of stock option awards, subject to the terms
and conditions of each stock option award agreement.

     Severance payments do not constitute continued employment beyond the termination date.

     Notwithstanding anything to the contrary in this Agreement, if the Executive is a
“disqualified individual” (as defined in Section 280G(c) of the Internal Revenue Code of
1986, as amended (the “Code”)), and the severance benefits provided for in this Section
6.5, together with any other payments and benefits which the Executive has the right to
receive from the Employer and its affiliates, would constitute a “parachute payment” (as
defined in Section 280G(b)(2) of the Code), then the severance benefits provided hereunder
(beginning with any benefit to be paid in cash hereunder) shall be either (1) reduced (but
not below zero) so that the present value of such total amounts and benefits received by
the Executive will be one dollar ($1.00) less than three times the Executive’s “base
amount” (as defined in Section 280G of the Code) and so that no portion of such amounts and
benefits received by the Executive shall be subject to the excise tax imposed by Section
4999 of the Code or (2) paid in full, whichever produces the better net after-tax position
to the Executive (taking into account any applicable excise tax under Section 4999 of the
Code and any other applicable taxes). The determination as to whether any such reduction
in the amount of the severance benefit is necessary shall be made initially by the Employer
in good faith. If a reduced severance benefit is paid hereunder in accordance with clause
(1) of the first sentence of this paragraph and through error or otherwise that payment,
when aggregated with other payments and benefits from the Employer (or its affiliates) used
in determining if a “parachute payment” exists, exceeds one dollar ($1.00) less than three
times the Executive’s base amount, then the Executive shall immediately repay such excess
to the Employer upon notification that an overpayment has been made.

	 	6.6	 	NO MITIGATION

Any remuneration received by the Executive from a third party following the Employment Period shall
not apply to reduce the Employer’s obligations to make payments hereunder.

	 	6.7	 	LIQUIDATED DAMAGES

Due to the difficulties in estimating damages for an early termination of the Employment Period,
the Employer and the Executive agree that the payments, if any, to be received by the Executive
hereunder shall be received as liquidated damages.

	7.	 	NON-DISCLOSURE COVENANT; EMPLOYEE INVENTIONS

	 	7.1	 	ACKNOWLEDGMENTS BY THE EXECUTIVE

     The Executive acknowledges that (a) prior to and during the Employment Period and as a

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part of his employment, the Executive has been and will be afforded access to Confidential
Information; (b) public disclosure of such Confidential Information could have an adverse effect on
the Employer and its business; (c) because the Executive possesses substantial technical expertise
and skill with respect to the Employer’s business, the Employer desires to obtain exclusive
ownership of each Employee Invention, and the Employer will be at a substantial competitive
disadvantage if it fails to acquire exclusive ownership of each Employee Invention; and (d) the
provisions of this Section 7 are reasonable and necessary to prevent the improper use or disclosure
of Confidential Information and to provide the Employer with exclusive ownership of all Employee
Inventions.

	 	7.2	 	AGREEMENTS OF THE EXECUTIVE

     In consideration of the compensation and benefits to be paid or provided to the Executive by
the Employer under this Agreement, the Executive covenants the following:

	 	a.	 	Confidentiality.

	 	i.	 	The Executive will hold in confidence the
Confidential Information and will not disclose it to any person except
with the specific prior written consent of the Employer or except as
otherwise expressly permitted by the terms of this Agreement.
	 
	 	ii.	 	Any trade secrets of the Employer will be
entitled to all of the protections and benefits under any applicable
law. If any information that the Employer deems to be a trade secret
is found by a court of competent jurisdiction not to be a trade secret
for purposes of this Agreement, such information will, nevertheless, be
considered Confidential Information for purposes of this Agreement.
The Executive hereby waives any requirement that the Employer submit
proof of the economic value of any trade secret or post a bond or other
security.
	 
	 	iii.	 	None of the foregoing obligations and
restrictions applies to any part of the Confidential Information that
the Executive demonstrates was or became generally available to the
public other than as a result of a disclosure by the Executive that was
known by Executive prior to his employment with Employer, is disclosed
to Executive on a non-confidential basis from a third party having the
right to make such disclosures, or is required to be communicated
pursuant to legal process. .
	 
	 	iv.	 	The Executive will not remove from the
Employer’s premises (except to the extent such removal is for purposes
of the performance of the Executive’s duties at home or while
traveling, or except as otherwise specifically authorized by the
Employer) any document, record, notebook, plan, model, component,
device,

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	 	 	 	or computer software or code, whether embodied in a disk or in any
other form (collectively, the “Proprietary Items”). The Executive
recognizes that, as between the Employer and the Executive, all of
the Proprietary Items, whether or not developed by the Executive, are
the exclusive property of the Employer. Upon termination of this
Agreement by either party, or upon the request of the Employer during
the Employment Period, the Executive will return to the Employer all
of the Proprietary Items in the Executive’s possession or subject to
the Executive’s control, and the Executive shall not retain any
copies, abstracts, sketches, or other physical embodiment of any of
the Proprietary Items.

	 	b.	 	Employee Inventions. Each Employee Invention will
belong exclusively to the Employer. The Executive acknowledges that all of the
Executive’s writing, works of authorship, and other Employee Inventions are
works made for hire and the property of the Employer, including any copyrights,
patents, or other intellectual property rights pertaining thereto. If it is
determined that any such works are not works made for hire, the Executive
hereby assigns to the Employer all of the Executive’s right, title, and
interest, including all rights of copyright, patent, and other intellectual
property rights, to or in such Employee Inventions. The Executive covenants
that he will promptly:

	 	i.	 	disclose to the Employer in writing any
Employee Invention;
	 
	 	ii.	 	assign to the Employer or to a party designated
by the Employer, at the Employer’s request and without additional
compensation, all of the Executive’s right to the Employee Invention
for the United States and all foreign jurisdictions;
	 
	 	iii.	 	execute and deliver to the Employer such
applications, assignments, and other documents as the Employer may
request in order to apply for and obtain patents or other registrations
with respect to any Employee Invention in the United States and any
foreign jurisdictions;
	 
	 	iv.	 	sign all other papers necessary to carry out
the above obligations; and
	 
	 	v.	 	give testimony and render any other assistance
in support of the Employer’s rights to any Employee Invention.

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	 	c.	 	Notice of Intent to Resign. Executive agrees to
provide Employer with 90 days advance notice of his intention to resign
(“Notice Period”); provided, that in the event of a resignation for Good
Reason, Executive agrees to provide Employer with 30 days advance notice within
30 days of the occurrence of the event constituting Good Reason. During the
Notice Period, Executive shall continue in the diligent fulfillment of all
duties of his position and this Agreement. Should Executive fail to provide
Employer with the full Notice Period, Executive shall forfeit that portion of
his earned pro-rata yearly cash bonus as follows:
	 
	 	 	 	(90 — (number of full days of advance notice) / 90) X(times) pro-rata
earned yearly cash bonus = amount forfeited by Executive.
	 
	 	 	 	Pro-rata earned yearly cash bonus is: (unconditional portion of yearly cash
bonus, if any, targeted for Executive in the current Fiscal Year) / (number
of full months worked in the current Fiscal Year / 12).
	 
	 	d.	 	NonDisparagement. Executive shall not disparage the
Employer or any of its shareholders, directors, officers, employees, or agents.
	 
	 	e.	 	Creative Works. Executive shall not create, assist
with or consult on any creative works which discuss, describe or reference
Employer or any executive of Employer. Creative works includes but is not
limited to novels, nonfiction writings, any authored work, plays, screenplays,
musicals                or                 the                 like.

	 	7.3	 	DISPUTES OR CONTROVERSIES

     The Executive recognizes that should a dispute or controversy arising from or relating to this
Agreement be submitted for adjudication to any court, arbitration panel, or other third party, the
preservation of the secrecy of Confidential Information may be jeopardized. All pleadings,
documents, testimony, and records relating to any such adjudication will be maintained in secrecy
and will be available for inspection by the Employer, the Executive, and their respective attorneys
and experts, who will agree, in advance and in writing, to receive and maintain all such
information in secrecy, except as may be limited by them in writing.

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	8.	 	NON-COMPETITION AND NON-INTERFERENCE

	 	8.1	 	ACKNOWLEDGMENTS BY THE EXECUTIVE

     The Executive acknowledges that: (a) the services to be performed by him under this Agreement
are of a special, unique, unusual, extraordinary, and intellectual character; (b) a significant
portion of the services to be performed by him shall be performed at the Employer’s world
headquarters located in Houston, Texas; (c) the Employer’s business is international in scope and
its products are marketed throughout the United States and the world; (d) the Employer competes
with other businesses that are or could be located in any part of the United States or the world;
(d) the provisions of this Section 8 are reasonable and necessary to protect the Employer’s
business; and (f) in connection with the fulfillment of his duties hereunder and as an employee of
the Employer, the Employer will provide Executive with Confidential Information necessitating the
execution of the covenants contained in this Section 8.

	 	8.2	 	COVENANTS OF THE EXECUTIVE

     In consideration of the acknowledgments by the Executive, and in consideration of the
compensation and benefits to be paid or provided to the Executive by the Employer, the Executive
covenants that during and for one (1) year following the Employment Period he will not, directly or
indirectly:

	 	a.	 	except in the course of his employment hereunder, engage or
invest in, own, manage, operate, finance, control, or participate in the
ownership, management, operation, financing, or control of, be employed by,
associated with, or in any manner connected with, lend the Executive’s name or
any similar name to, lend Executive’s credit to or render services or advice
to, any business whose products or activities compete in whole or in part with
the products or activities of the Employer anywhere in the world, provided,
however, that the Executive may purchase or otherwise acquire up to (but not
more than) five percent (5%) of any class of securities of any enterprise (but
without otherwise participating in the activities of such enterprise) if such
securities are listed on any national or regional securities exchange or have
been registered under Section 12(g) of the Securities Exchange Act of 1934, as
amended;
	 
	 	b.	 	whether for the Executive’s own account or for the account of
any other person, solicit business of the same or similar type being carried on
by the Employer, from any person known by the Executive to be a customer or a
potential customer of the Employer, whether or not the Executive had personal
contact with such person during and by reason of the Executive’s employment
with the Employer; or
	 
	 	c.	 	whether for the Executive’s own account or the account of any
other person, (i) solicit, employ, or otherwise engage as an employee,

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	 	 	 	independent contractor, or otherwise, any person who is an employee (or was
an employee within one (1) year of the date of the prohibited activity in
question) of the Employer at any time during the Employment Period or in any
manner induce any employee of the Employer to terminate his employment with
the Employer; or (ii) interfere with the Employer’s relationship with any
person, including any person who at any time during the Employment Period
was an employee, contractor, supplier, or customer of the Employer.

     If any covenant in this Section 8.2 is held to be unreasonable, arbitrary, or against public
policy, such covenant will be considered to be divisible with respect to scope, time, and
geographic area, and such lesser scope, time, or geographic area, or all of them, as a court of
competent jurisdiction may determine to be reasonable, not arbitrary, and not against public
policy, will be effective, binding, and enforceable against the Executive.

     The period of time applicable to any covenant in this Section 8.2 will be extended by the
duration of any violation by the Executive of such covenant.

	9.	 	GENERAL PROVISIONS

	 	9.1	 	INJUNCTIVE RELIEF AND ADDITIONAL REMEDY

     The Executive acknowledges that the injury that would be suffered by the Employer as a result
of a breach of the provisions of this Agreement (including any provision of Sections 7 and 8) would
be irreparable and that an award of monetary damages to the Employer for such a breach would be an
inadequate remedy. Consequently, the Employer will have the right, in addition to any other rights
it may have, to obtain injunctive relief to restrain any breach or threatened breach or otherwise
to specifically enforce any provision of this Agreement, and the Employer will not be obligated to
post bond or other security in seeking such relief.

	 	9.2	 	COVENANTS OF SECTIONS 7 AND 8 ARE ESSENTIAL AND INDEPENDENT COVENANTS

     The covenants by the Executive in Sections 7 and 8 are essential elements of this Agreement,
and without the Executive’s agreement to comply with such covenants, the Employer would not have
entered into this Agreement or employed the Executive. The Employer and the Executive have
independently consulted with their respective counsel and have been advised in all respects
concerning the reasonableness and propriety of such covenants, with specific regard to the nature
of the business conducted by the Employer.

     If the Executive’s employment hereunder expires or is terminated, this Agreement will continue
in full force and effect as is necessary or appropriate to enforce the covenants and agreements of
the Executive in Sections 7 and 8.

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	 	9.3	 	REPRESENTATIONS AND WARRANTIES BY THE EXECUTIVE

     The Executive represents and warrants to the Employer that the execution and delivery by the
Executive of this Agreement do not, and the performance by the Executive of the Executive’s
obligations hereunder will not, with or without the giving of notice or the passage of time, or
both: (a) violate any judgment, writ, injunction, or order of any court, arbitrator, or
governmental agency applicable to the Executive; or (b) conflict with, result in the breach of any
provisions of or the termination of, or constitute a default under, any agreement to which the
Executive is a party or by which the Executive is or may be bound. The Executive further
specifically represents and warrants that he is not subject to, nor will he violate, any agreement
not to compete upon the execution and delivery by him of this Agreement.

     The Executive represents and warrants that he will not utilize or divulge any proprietary
materials or information from his previous employers and acknowledges that Employer has prohibited
Executive from bringing any such materials on to Employer’s premises and has advised Executive that
Executive’s failure to adhere to these prohibitions will subject Executive to immediate
termination.

	 	9.4	 	OBLIGATIONS CONTINGENT ON PERFORMANCE

     The obligations of the Employer hereunder, including its obligation to pay the compensation
provided for herein, are contingent upon the Executive’s performance of the Executive’s obligations
hereunder.

	 	9.5	 	WAIVER

     The rights and remedies of the parties to this Agreement are cumulative and not alternative.
Neither the failure nor any delay by either party in exercising any right, power, or privilege
under this Agreement will operate as a waiver of such right, power, or privilege, and no single or
partial exercise of any such right, power, or privilege will preclude any other or further exercise
of such right, power, or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement can
be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right
unless in writing signed by the other party; (b) no waiver that may be given by a party will be
applicable except in the specific instance for which it is given; and (c) no notice to or demand on
one party will be deemed to be a waiver of any obligation of such party or of the right of the
party giving such notice or demand to take further action without notice or demand as provided in
this Agreement.

14

 

	 	9.6	 	BINDING EFFECT; DELEGATION OF DUTIES PROHIBITED

     This Agreement shall inure to the benefit of, and shall be binding upon, the parties hereto
and their respective successors, assigns, heirs, and legal representatives, including any entity
with which the Employer may merge or consolidate or to which all or substantially all of its assets
may be transferred. The duties and covenants of the Executive under this Agreement, being
personal, may not be delegated or assigned.

	 	9.7	 	NOTICES

     All notices, consents, waivers, and other communications under this Agreement must be in
writing and will be deemed to have been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by facsimile (with written confirmation of receipt), provided
that a copy is mailed by registered mail, return receipt requested and signed for by the party
required to receive notice, or (c) when received by the addressee, if sent by a nationally
recognized overnight delivery service (receipt requested), in each case to the appropriate
addresses and facsimile numbers set forth below (or to such other addresses and facsimile numbers
as a party may designate by notice to the other parties):

If to Employer:

BMC Software, Inc.

2101 CityWest Blvd

Houston, Texas 77042

Telephone No.: (713) 918-8800

Facsimile No.: (713) 918-1110

Attn: General Counsel

If to the Executive:

Harold I. Goldberg

2101 CityWest Blvd.

Houston, Texas 77042

Telephone No: 713-918-2870

E-mail Address: Harold_goldberg@bmc.com

	 	9.8	 	ENTIRE AGREEMENT; AMENDMENTS

     Except as provided in (a) plans and programs of the Employer referred to in Sections 3.1(b)
through (d), and (b) any signed written agreement contemporaneously or hereafter executed by the
Employer and the Executive, this Agreement contains the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements and understandings, oral
or written, between the parties hereto with respect to the subject matter hereof. Notwithstanding
the foregoing, this Agreement shall not be construed to supersede any stock option agreements or
restricted stock agreements entered into between Executive and Employer at any time prior to the
execution of this Agreement. This Agreement may not be amended orally, but only by an agreement in
writing signed by the parties hereto.

15

 

	 	9.9	 	GOVERNING LAW

     This Agreement will be governed by the laws of the State of Texas without regard to conflicts
of laws principles.

	 	9.10	 	ARBITRATION

     In the event that there shall be any dispute arising out of or in any way relating to this
Agreement, the contemplated transactions, any document referred to or incorporated herein by
reference or centrally related to the subject matter hereof, or the subject matter of any of the
same, the parties covenant and agree as follows:

	 	a.	 	The parties shall first use their reasonable best efforts to
resolve such dispute among themselves, with or without mediation.
	 
	 	b.	 	If the parties are unable to resolve such dispute among
themselves, such dispute shall be submitted to binding arbitration in Houston,
Texas, under the auspices of, and pursuant to the rules of, the American
Arbitration Association’s Commercial Arbitration Rules as then in effect, or
such other procedures as the parties may agree to at the time, before a
tribunal of three (3) arbitrators, one of which shall be selected by the
Executive, one of which shall be selected by the Employer, and the third of
which shall be selected by the two (2) arbitrators so selected. Any award
issued as a result of such arbitration shall be final and binding between the
parties, and shall be enforceable by any court having jurisdiction over the
party against whom enforcement is sought. A ruling by the arbitrators shall be
non-appealable. The parties agree to abide by and perform any award rendered
by the arbitrators. If either the Executive or Employer seeks enforcement of
the terms of this Agreement or seeks enforcement of any award rendered by the
arbitrators, then the prevailing party (designated by the arbitrators) to such
proceeding(s) shall be entitled to recover its costs and expenses (including
applicable travel expenses) from the non-prevailing party, in addition to any
other relief to which it may be entitled. If a dispute arises and one party
fails or refuses to designate an arbitrator within thirty (30) days after
receipt of a written notice that an arbitration proceeding is to be held, then
the dispute shall be resolved solely by the arbitrator designated by the other
party and such arbitration award shall be as binding as if three (3)
arbitrators had participated in the arbitration proceeding. Either the
Executive or the Employer may cause an arbitration proceeding to commence by
giving the other party notice in writing of such arbitration. Executive and
the Employer covenant and agree to act as expeditiously as practicable in order
to resolve all disputes by arbitration. Notwithstanding anything in this
section to the contrary, neither Executive nor the Employer shall be precluded
from seeking court action in the event the action sought is either injunctive
action, a

16

 

	 	 	 	restraining order or other equitable relief. The arbitration proceeding
shall be held in English.
	 
	 	c.	 	Legal process in any action or proceeding referred to in the
preceding section may be served on any party anywhere in the world.
	 
	 	d.	 	Except as expressly provided herein and except for injunctions
and other equitable remedies that are required in order to enforce this
Agreement, no action may be brought in any court of law and EACH OF THE PARTIES
WAIVES ANY RIGHTS THAT IT MAY HAVE TO BRING A CAUSE OF ACTION IN ANY COURT OR
IN ANY PROCEEDING INVOLVING A JURY TO THE MAXIMUM EXTENT PERMITTED BY LAW.
Each party acknowledges that it has been represented by legal counsel of its
own choosing and has been advised of the intent, scope and effect of this
Section 9.10 and has voluntarily entered into this Agreement and this Section
9.10.
	 
	 	e.	 	Excluded from this Section 9.10 are any claims for temporary
injunctive relief to enforce Sections 7 and 8 of this Agreement.

	 	9.11	 	SECTION HEADINGS, CONSTRUCTION

     The headings of Sections in this Agreement are provided for convenience only and will not
affect its construction or interpretation. All references to “Section” or “Sections” refer to the
corresponding Section or Sections of this Agreement unless otherwise specified. All words used in
this Agreement will be construed to be of such gender or number as the circumstances require.
Unless otherwise expressly provided, the word “including” does not limit the preceding words or
terms.

	 	9.12	 	SEVERABILITY

     If any provision of this Agreement is held invalid or unenforceable by any court of competent
jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.

	 	9.13	 	COUNTERPARTS

     This Agreement may be executed in one or more counterparts, each of which will be deemed to be
an original copy of this Agreement and all of which, when taken together, will be deemed to
constitute one and the same agreement.

	 	9.14	 	WAIVER OF JURY TRIAL

     THE PARTIES HERETO HEREBY WAIVE A JURY TRIAL IN ANY LITIGATION WITH RESPECT TO THIS AGREEMENT.

17

 

	 	9.15	 	WITHHOLDING OF TAXES AND OTHER EMPLOYEE DEDUCTIONS

     The Employer may withhold from any payments and benefits made pursuant to this Agreement all
federal, state, city, and other taxes as may be required pursuant to any law or governmental
regulation or ruling and all other normal deductions made with respect to the Employer’s employees
generally.

     IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date
first written above.

EMPLOYER:

BMC Software, Inc.

By: /s/ JEROME ADAMS

Name: Jerome Adams

Title: SVP of Administration

EXECUTIVE:

/s/ HAROLD I. GOLDBERG

Harold I. Goldberg

18

 

			
	 	 	 
	Harold I. Goldberg
	 	Attachment A

BMC SOFTWARE, INC.

Executive Employment Agreement

Cash Bonus Description

     The Executive will, during the Employment Period, be permitted to participate in the BMC
Global Incentive Compensation Plan (“GICP”) that may be in effect from time to time. During the
employment period, the Executive will be eligible to receive a target incentive, which is 100% of
base salary. The actual amount received is not guaranteed and is dependent on the performance of
the Company and the Executive in accordance with the GICP established for each fiscal year during
the employment period.

     Each fiscal year, the Executive will receive a detailed description of the Annual Incentive
Plan and the targeted measures and objectives for that year.

19exv10w39

 

Exhibit 10.39

Form of Restricted Stock Unit Standard Terms and Conditions

THE ADVISORY BOARD COMPANY

STANDARD TERMS AND CONDITIONS FOR

RESTRICTED STOCK UNITS

These Standard Terms and Conditions apply to any Award of restricted stock units granted to an
employee of the Company under The Advisory Board Company 2005 Stock Incentive Plan (the “Plan”),
which are evidenced by a RSU Agreement or an action of the Administrator that specifically refers
to these Standard Terms and Conditions.

	 	1	 	TERMS OF RESTRICTED STOCK UNITS
	 
	 	 	 	THE ADVISORY BOARD COMPANY, a Delaware corporation (the “Company”), has granted to the
Participant named in the Restricted Stock Unit Agreement provided to said Participant
herewith (the “RSU Agreement”) an award of a number of restricted stock units (the “Award”)
specified in the RSU Agreement. Each restricted stock unit represents the right to receive
one share of the Company’s Common Stock, $0.01 par value per share (the “Common Stock”), upon
the terms and subject to the conditions set forth in the RSU Agreement, these Standard Terms
and Conditions, and the Plan, each as amended from time to time. For purposes of these
Standard Terms and Conditions and the RSU Agreement, any reference to the Company shall,
unless the context requires otherwise, include a reference to any Subsidiary, as such term is
defined in the Plan.
	 
	 	2	 	VESTING OF RESTRICTED STOCK UNITS
	 
	 	 	 	The Award shall not be vested as of the Grant Date set forth in the RSU Agreement and shall
be forfeitable unless and until otherwise vested pursuant to the terms of the RSU Agreement
and these Standard Terms and Conditions. After the Grant Date, subject to termination or
acceleration as provided in these Standard Terms and Conditions and the Plan, the Award shall
become vested as described in the RSU Agreement with respect to that number of restricted
stock units as set forth in the RSU Agreement; provided that (except as set forth in Section
5 below) the Participant does not experience a Termination of employment (as defined in the
Plan). Each date on which restricted stock units subject to the Award vest is referred to
herein as a “Vesting Date.” Notwithstanding anything herein or in the RSU Agreement to the
contrary, if a Vesting Date is not a business day, the applicable portion of the Award shall
vest on the next following business day. Restricted stock units granted under the Award that
have vested and are no longer subject to forfeiture are referred to herein as “Vested Units.”
Restricted stock units granted under the Award that are not vested and remain subject to
forfeiture are referred to herein as “Unvested Units.” The vesting period of an Award shall
be suspended by the Administrator during any period in which the Participant is on an
approved leave of absence.
	 
	 	3	 	SETTLEMENT OF RESTRICTED STOCK UNITS
	 
	 	 	 	Each Vested Unit will be settled by the delivery of one share of Common Stock or cash in an
amount equivalent to the value of one share of Common Stock (or any combination of cash and
Common Stock as may be determined in the sole discretion of the Administrator), subject to
adjustment under Section 12 of the Plan, to the Participant or, in the event of the
Participant’s death, to the Participant’s estate, heir or beneficiary, following the
applicable Vesting Date; provided that the Participant has satisfied all of the tax
withholding obligations described in Section 7 below, and that the Participant has completed,
signed and returned any documents and taken any additional action that the Company deems
appropriate to enable it to accomplish the delivery of the shares of Common Stock and/or
cash. The issuance of any shares of Common Stock hereunder may be effected by the issuance of
a stock certificate, recording shares on the stock records of the Company or by crediting
shares in an account established on the Participant’s behalf with a brokerage firm or other
custodian, in each case as determined by the Company. Fractional shares will not be issued
pursuant to the Award.
	 
	 	 	 	Notwithstanding the above, (i) for administrative or other reasons, the Company may from time
to time temporarily suspend the issuance of shares of Common Stock in respect of Vested
Units, (ii) the Company shall not be obligated to deliver any shares of the Common Stock
during any period when the Company determines that the delivery of shares hereunder would
violate any federal, state or other applicable laws, (iii) the Company may issue shares of
Common Stock hereunder subject to any restrictive legends that, as determined by the
Company’s counsel, are necessary to comply with securities or other regulatory requirements,
and (iv) the date on which shares are issued hereunder may include a delay in order to
provide the Company such time as it determines appropriate to address tax withholding and
other administrative matters.

 

 

	 	4	 	RIGHTS AS STOCKHOLDER
	 
	 	 	 	Prior to any issuance of shares of Common Stock in settlement of the Award, no shares of
Common Stock will be reserved or earmarked for the Participant or the Participant’s account
nor shall the Participant have any of the rights of a stockholder with respect to such
shares. The Participant will not be entitled to any privileges of ownership of the shares of
Common Stock (including, without limitation, any voting or dividend rights) underlying Vested
Units and/or Unvested Units unless and until shares of Common Stock are actually delivered to
the Participant hereunder.
	 
	 	5	 	TERMINATION OF EMPLOYMENT
	 
	 	 	 	Upon the date of the Participant’s Termination of employment (as defined in the Plan) for any
reason, except as provided in this Section 5, all Unvested Units shall be forfeited by the
Participant and cancelled and surrendered to the Company without payment of any consideration
to the Participant.

	 	A.	 	Upon the date of the Participant’s Termination of employment as a result
of the death, disability or retirement of the Participant, the Award shall be deemed
to have vested immediately prior to such Termination of employment.
	 
	 	B.	 	If, after a Change of Control (as defined in Section 20 hereof) of the
Company, the Participant’s incurs a Termination of employment for any reason other
than for Cause (as defined in Section 20 hereof) or voluntary resignation by the
Participant, the Award shall be deemed to have become fully vested immediately prior
to such Termination of employment.

	 	6	 	RESTRICTIONS ON RESALES OF SHARES
	 
	 	 	 	The Company may impose such restrictions, conditions or limitations as it determines
appropriate as to the timing and manner of any resales by the Participant or other subsequent
transfers by the Participant of any shares of Common Stock issued in respect of Vested Units,
including without limitation (a) restrictions under an insider trading policy, (b)
restrictions designed to delay and/or coordinate the timing and manner of sales by
Participant and other holders and (c) restrictions as to the use of a specified brokerage
firm for such resales or other transfers.
	 
	 	7	 	INCOME TAXES
	 
	 	 	 	The Participant will be subject to federal and state income and other tax withholding
requirements on a date (generally, the Vesting Date) determined by applicable law (any such
date, the “Taxable Date”), based on the fair market value of the shares of Common Stock
underlying the Vested Units that vest on the Vesting Date. The Participant will be solely
responsible for the payment of all U.S. federal income and other taxes, including any state,
local or non-U.S. income or employment tax obligation that may be related to the Vested
Units, including any such taxes that are required to be withheld and paid over to the
applicable tax authorities (the “Tax Withholding Obligation”). The Participant will be
responsible for the satisfaction of such Tax Withholding Obligation in a manner acceptable to
the Company in its sole discretion.
	 
	 	 	 	By accepting the Award the Participant agrees that, unless the Company specifies that the
Participant must otherwise satisfy any withholding obligations, the Company is authorized to
withhold from the shares of Common Stock issuable or cash equivalent value payable to the
Participant in respect of Vested Units the whole number of shares or cash equivalent having a
value (as determined by the Company consistent with any applicable tax requirements) on the
Taxable Date or the first trading day before the Taxable Date sufficient to satisfy the
applicable Tax Withholding Obligation. If the withheld shares are not sufficient to satisfy
the Participant’s Tax Withholding Obligation, the Participant agrees to pay to the Company as
soon as practicable any amount of the Tax Withholding Obligation that is not satisfied by the
withholding of shares of Common Stock described above.
	 
	 	 	 	The Company may refuse to issue any shares of Common Stock to the Participant until the
Participant satisfies the Tax Withholding Obligation. The Participant acknowledges that the
Company has the right to retain without notice from shares issuable under the Award or from
salary or other amounts payable to the Participant, shares or cash having a value sufficient
to satisfy the Tax Withholding Obligation.

	 	 	 	The Participant is ultimately liable and responsible for all taxes owed by the Participant in
connection with the Award, regardless of any action the Company takes or any transaction
pursuant to this Section 7 with respect to any tax withholding obligations that arise in
connection with the Award. The Company makes no representation or undertaking regarding the
treatment of any tax withholding in connection with the grant, issuance, vesting or
settlement of the Award or the subsequent
sale of any of the shares of Common Stock underlying Vested Units. The Company does not
commit and is under no obligation to structure the Award to reduce or eliminate the
Participant’s tax liability.

 

 

	 	8	 	NON-TRANSFERABILITY OF AWARD
	 
	 	 	 	Unless otherwise provided by the Administrator, the Participant may not assign, transfer or
pledge the Award, the shares of Common Stock subject thereto or any right or interest therein
to anyone other than by will or the laws of descent and distribution. The Company may cancel
the Participant’s Award if the Participant attempts to assign or transfer it in a manner
inconsistent with this Section 7.
	 
	 	9	 	THE PLAN AND OTHER AGREEMENTS
	 
	 	 	 	In addition to these Terms and Conditions, the Award shall be subject to the terms of the
Plan, which are incorporated into these Standard Terms and Conditions by this reference. In
the event of a conflict between the terms and conditions of these Standard Terms and
Condition and the Plan, the Plan controls. Certain capitalized terms not otherwise defined
herein are defined in the Plan.
	 
	 	 	 	The RSU Agreement, these Standard Terms and Conditions and the Plan constitute the entire
understanding between the Participant and the Company regarding the Award. Any prior
agreements, commitments or negotiations concerning the Award are superseded.
	 
	 	10	 	LIMITATION OF INTEREST IN SHARES SUBJECT TO AWARD
	 
	 	 	 	Neither the Participant (individually or as a member of a group) nor any beneficiary or other
person claiming under or through the Participant shall have any right, title, interest, or
privilege in or to any shares of Common Stock allocated or reserved for the purpose of the
Plan or subject to the RSU Agreement or these Standard Terms and Conditions except as to such
shares of Common Stock, if any, as shall have been issued to such person in respect of Vested
Units.
	 
	 	11	 	NOT A CONTRACT FOR EMPLOYMENT.
	 
	 	 	 	Nothing in the Plan, in the RSU Agreement, these Standard Terms and Conditions or any other
instrument executed pursuant to the Plan shall confer upon the Participant any right to
continue in the Company’s employ or service nor limit in any way the Company’s right to
terminate the Participant’s employment at any time for any reason.
	 
	 	12	 	NO LIABILITY OF COMPANY
	 
	 	 	 	The Company and any affiliate which is in existence or hereafter comes into existence shall
not be liable to the Participant or any other person as to: (a) the non-issuance or sale of
shares of Common Stock as to which the Company has been unable to obtain from any regulatory
body having jurisdiction the authority deemed by the Company’s counsel to be necessary to the
lawful issuance and sale of any shares hereunder; and (b) any tax consequence expected, but
not realized, by the Participant or other person due to the receipt, vesting or settlement of
any Award granted hereunder.
	 
	 	13	 	NOTICES
	 
	 	 	 	All notices, requests, demands and other communications pursuant to these Standard Terms and
Conditions shall be in writing and shall be deemed to have been duly given if personally
delivered, telexed or telecopied to, or, if mailed, when received by, the other party at the
following addresses (or at such other address as shall be given in writing by either party to
the other):

If to the Company to:

The Advisory Board Company

2445 M Street, N.W.

Washington, D.C. 20037

Attention: Administrator of 2005 Stock Incentive Plan

If
to the Participant, to the address set forth below the Participant’s signature on the RSU Agreement.

 

 

	 	14	 	SEPARABILITY.
	 
	 	 	 	In the event that any provision of these Standard Terms and Conditions is declared to be
illegal, invalid or otherwise unenforceable by a court of competent jurisdiction, such
provision shall be reformed, if possible, to the extent necessary to render it legal, valid
and enforceable, or otherwise deleted, and the remainder of these Standard Terms and
Conditions shall not be affected except to the extent necessary to reform or delete such
illegal, invalid or unenforceable provision.
	 
	 	15	 	HEADINGS.
	 
	 	 	 	The headings preceding the text of the sections hereof are inserted solely for convenience of
reference, and shall not constitute a part of these Standard Terms and Conditions, nor shall
they affect its meaning, construction or effect.
	 
	 	16	 	FURTHER ASSURANCES.
	 
	 	 	 	Each party shall cooperate and take such action as may be reasonably requested by another
party in order to carry out the provisions and purposes of these Standard Terms and
Conditions.
	 
	 	17	 	BINDING EFFECT.
	 
	 	 	 	These Standard Terms and Conditions shall inure to the benefit of and be binding upon the
parties hereto and their respective permitted heirs, beneficiaries, successors and assigns.
	 
	 	18	 	DISPUTES
	 
	 	 	 	All questions arising under the Plan or under these Standard Terms and Conditions shall be
decided by the Administrator in its total and absolute discretion. In the event the
Participant or other holder of an Award believes that a decision by the Administrator with
respect to such person was arbitrary or capricious, the Participant or other holder may
request arbitration with respect to such decision in accordance with Section 23 of the Plan.
The review by the arbitrator shall be limited to determining whether the Administrator’s
decision was arbitrary or capricious. This arbitration shall be the sole and exclusive
review permitted of the Administrator’s decision, and the Participant and any other holder
hereby explicitly waive any right to judicial review.
	 
	 	19	 	ELECTRONIC DELIVERY
	 
	 	 	 	The Company may, in its sole discretion, decide to deliver any documents related to any
awards granted under the Plan by electronic means or to request the Participant’s consent to
participate in the Plan by electronic means. By accepting the Award, the Participant consents
to receive such documents by electronic delivery and, if requested, to agree to participate
in the Plan through an on-line or electronic system established and maintained by the Company
or another third party designated by the Company, and such consent shall remain in effect
throughout the Participant’s term of employment or service with the Company and thereafter
until withdrawn in writing by the Participant.
	 
	 	20	 	DEFINITIONS
	 
	 	 	 	For purposes of these Standard Terms and Conditions, the terms set forth below shall have the
following meanings:

	 	A.	 	“Cause” means (i) the commission of an act of fraud or theft against the
Company; (ii) conviction for any felony; (iii) conviction for any misdemeanor
involving moral turpitude which might, in the Company’s reasonable opinion, cause
embarrassment to the Company; (iv) a significant violation of any material Company
policy; (v) willful or repeated non-performance or substandard performance of
material duties which is not cured within thirty (30) days after written notice
thereof to the Participant; or (vi) violation of any material District of Columbia,
state or federal laws, rules or regulations in connection with or during performance
of the Participant’s work which, if such violation is curable, is not cured within
thirty (30) days after notice thereof to the Participant.
	 
	 	B.	 	“Change of Control” means the occurrence of any of the following:

	 	(i)	 	the “acquisition” by a “person” or “group” (as those terms
are used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and the rules promulgated thereunder),
other than by Permitted Holders, of beneficial ownership (as defined in
Exchange Act Rule 13d-3) directly or indirectly, of any securities of the
Company or any successor of the Company immediately after which such person or group owns securities representing 50%
or more of the combined voting power of the Company or any successor of the
Company;

 

 

	 	 	 	 
	 	(ii)	 	approval by the stockholders of the Company of any merger,
consolidation or reorganization involving the Company, unless either (A) the
stockholders of the Company immediately before such merger, consolidation or
reorganization own, directly or indirectly immediately following such merger,
consolidation or reorganization, at least 60% of the combined voting power of
the company(ies) resulting from such merger, consolidation or reorganization
in substantially the same proportion as their ownership immediately before
such merger, consolidation or reorganization, or (B) the stockholders of the
Company immediately after such merger, consolidation or reorganization include
Permitted Holders;
	 
	 	(iii)	 	approval by the stockholders of the Company of a transfer of
50% or more of the assets of the Company or a transfer of assets that during
the current or either of the prior two fiscal years accounted for more than
50% of the Company’s revenues or income, unless the person to which such
transfer is made is either (A) a Subsidiary of the Company, (B) wholly owned
by all of the stockholders of the Company, or (C) wholly owned by Permitted
Holders; or
	 
	 	(iv)	 	approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.

	 	C.	 	“Permitted Holders” means:

	 	(i)	 	the Company;
	 
	 	(ii)	 	any Subsidiary;
	 
	 	(iii)	 	any employee benefit plan of the Company or any Subsidiary;
and
	 
	 	(iv)	 	any group which includes or any person who is wholly or
partially owned by a majority of the individuals who immediately prior to a
Change of Control are executive officers (as defined in Exchange Act Rule
3b-7) of the Company or any successor of the Company; provided that
immediately prior to and for six months following such Change of Control such
executive officers of the Company are beneficial owners (as defined in
Exchange Act Rule 16a-1(a)(2)) of the common stock of the Company or any
successor to the Company; and provided further that such executive officers’
employment is not terminated by the Company or any successor of the Company
(other than as a result of death or disability) during the six months
following such Change of Control. If, as a result of a transaction, a Change
of Control would have been deemed to have occurred but for the fact that the
requirements of this clause (iv) had been satisfied at the time of such
transaction and the requirements of this clause (iv) cease to be satisfied on
a date within six-months of such transaction, a Change of Control shall be
deemed to have occurred on such date.

	 	D.	 	“Subsidiary” means any corporation in which the Company owns, directly or
indirectly, stock possessing 50% or more of the total combined voting power of all
classes of stock in such corporation.

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