Document:

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                                                                   EXHIBIT 10.15

                               BEA SYSTEMS, INC.
                              EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT, is entered into as of September 1, 1999, between
BEA Systems, Inc., a Delaware corporation (the "Company"), and Alfred S. Chuang
("Employee").

                                R E C I T A L S
                                ---------------

     A. Employee entered into an Employment Agreement with the Company dated
September 28, 1995 (the "1995 Agreement"), which expired on September 28, 1999.

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

                               A G R E E M E N T
                               -----------------

ACCORDINGLY, THE PARTIES AGREE AS FOLLOWS:

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

          (a) Period of Employment. The Company hereby employs Employee to
              --------------------
render services to the Company in the position and with the duties and
responsibilities described in Section 1(b) for the period (the "Period of
Employment") commencing on the date of this Agreement and ending the earlier of
(i) May 17, 2003; or (ii) the date this Agreement is terminated in accordance
with Section 3 below.

          (b) Position. Employee will serve as the Company's Board Member,
              --------
President, Business Operations, and Chief Operating Officer (or in such other
position(s) as the Board of Directors of the Company (the "Board") shall
designate). Employee shall devote his full time and attention and his best
efforts to the performance of the services customarily incident to such office
and to such other services as may be reasonably requested by the Board.

          (c) Other Activities. Except upon the prior written consent of the
              ----------------
Board, Employee, during the Period of Employment, will not (i) accept any other
employment; (ii) engage, directly or indirectly, in any other business activity
(whether or not pursued for pecuniary advantage) that is or may be competitive
with, or that might place him in a competing position to that of the Company or
any Affiliated Company, as determined in the discretion of the Board; or (iii)
engage in any work or business activity of any kind outside those of the
Company.

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

          (a) Compensation. In consideration of the services to be rendered
              ------------
hereunder, including, without limitation, services to any Affiliated Company,
Employee shall be paid an annual salary of Three Hundred Thousand Dollars
($300,000.00), payable at the times and pursuant to the procedures regularly
established, and as they may be amended, by the Company during the Period of
Employment. This rate shall be reviewed annually on a calendar year basis, in
accordance with the Company's salary review practices, and adjusted in the sole
discretion of the Board of the Company to reflect increases in the cost of
living and such other increases as are awarded in accordance with the Company's
regular salary review practices for giving salary increases to similarly
situated employees.

          (b) Stock Options. Employee is eligible to receive options ("Shares")
              -------------
under the Company's 1997 Flexible Stock Incentive Plan (the "Option Plan") and
such other option plans as the Company may from time to time adopt, as approved
by the Board or a Committee (as defined in the Option Plan) thereof. Twenty-five
percent (25%) of the Shares subject to the Option Plan shall vest twelve months
after the date of an Award (as defined in the Option Plan) (the "Vesting
Commencement Date"), and 1/48 of the remaining Shares subject to the Option Plan
shall vest on each monthly anniversary of the Vesting Commencement Date
thereafter. On May 17, 1999, the Board granted Employee the option to purchase
500,000 shares of the common stock of the Company ("Common Stock") at an
exercise price of $17.3125 per share. Such options are transferable to the
extent provided in the agreement evidencing a grant of an Award and such
agreement is amended as described in Exhibit E.

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

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

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

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

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

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

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

          (c) By Company For Cause. The Company may terminate, without
              --------------------
liability, the Period of Employment for Cause (as defined below) at any time
upon ten (10) days' advance written notice to Employee, unless the Company
terminates Employee's Period of Employment under Section 3(c)(ii) in which case
the Company shall provide thirty (30) days' advance written notice to Employee.
The Company shall pay Employee the compensation to which he is entitled pursuant
to Section 2(a) through the end of the notice period and thereafter the
Company's obligations hereunder shall terminate. The Company may terminate the
employment of the Employee and all of the Company's obligations under this
Agreement at any time for "cause" by giving the Employee notice of such
termination, with reasonable specificity of the details thereof. For the
purposes of this Section 3(c), "Cause" shall mean: (i) the Employee's material
misconduct which could reasonably be expected to have a material adverse effect
on the business and affairs of the Company, including but not limited to fraud,
misappropriation, embezzlement; (ii) the Employee's failure to substantially
perform his duties under this Agreement and such failure is not cured by
Employee within thirty (30) days written notice to Employee by the Board; (iii)
Employee is convicted of a felony, a crime involving moral turpitude, or
criminal act against the Company or any Affiliated Company thereof or any of the
assets of any of them; (iv) the Employee's willful breach of any material
provision of this Agreement or other agreements between the Employee and the
Company. A termination pursuant to Section 3(c) (i), (iv) shall take effect 10
days after the giving of the notice contemplated hereby unless the Employee
shall, during such 10-day period, remedy to the satisfaction of the Board of
Directors of the Company

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the misconduct or breach specified of such notice; provided, however, that such
                                                   --------  -------
termination shall take effect immediately upon giving of such notice if the
Board of Directors of the Company shall have determined that such misconduct or
breach is not remediable which determination shall be stated in such notice. A
determination pursuant to Section 3(c) (iii) shall take effect immediately upon
giving of the notice contemplated hereby.

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

          (e) At Will by the Company. At any time, the Company may terminate the
              ----------------------
Period of Employment for any reason, without cause, upon ten (10) days' written
notice to the Employee. In the event the Company elects to terminate the Period
of Employment pursuant to this Section 3(e), the Company shall retain Employee
as a consultant to the Company for a period commencing on the date of such
termination and continuing until the expiration of the Period of Employment (the
"Consultancy Period"), during which time Employee agrees to be available (which
may include availability via telephone) to perform certain consulting services
regarding the business of the Company which shall be mutually agreed upon
between the Company and Employee at mutually agreeable places and times. The
Company agrees that such consultancy work will not exceed 40 hours per week.
Employee shall continue to receive payment of his compensation under Sections
2(a), 2(c) and 2(f) during the Consultancy Period and his benefits described in
Section 2(e) as well as continued stock option vesting in accordance with
Employee's stock option agreement (unless Employee's stock options immediately
vest pursuant ot the terms of any applicable stock option agreement(s)), whether
the Company utilizes Employee's consulting services or not; provided that if (i)
                                                            -------- ----
any of the events listed in paragraph (c) of this Section 3 occur then the
Company's obligations hereunder shall be governed in accordance with the
applicable paragraph or (ii) Employee breaches Sections 3(h), 3(i) and/or 4
hereof, including a violation of his Proprietary Information and Inventions
Agreement (described at Section 4 below), then all of the Company's obligations
hereunder shall cease immediately. The amount of bonus payable to Employee
pursuant to this Section 3(e) shall be calculated in the manner set forth in
Section 3(a) above through the end of the Consultancy Period. Employee hereby
agrees that the Company may terminate the Period of Employment under this
Section 3(e) and subject to the provisions contained herein without regard (i)
to any general or specific policies (whether written or oral) of the Company
relating to the employment or termination of its employees, or (ii) to any
statements made to Employee, whether made orally or contained in any document
other than this Agreement, pertaining to Employee's relationship with the
Company. During the Consultancy Period, Employee agrees not to compete with the
business of the Company during such Consultancy Period as set forth in Section
3(i) hereof.

          (f) Termination by Employee for Good Reason Following Corporate
              -----------------------------------------------------------
Transaction. At any time following a Corporate Transaction (For purposes of this
-----------
Agreement, a "Corporate Transaction" shall include any of the following
transactions to which the Company is a party: (i)

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a merger or consolidation in which the Company is not the surviving entity and
securities representing more than fifty percent (50%) of the total combined
voting power of the Company's outstanding securities are transferred to holder
different from those who held such securities immediately prior to such merger;
(ii) the sale, transfer or other disposition of all or substantially all of the
assets of the Company in liquidation or dissolution of the Company; or (iii) any
reverse merger in which the Company is the surviving entity but in which
securities representing more than fifty percent (50%) of the total combined
voting power of the Company's outstanding securities are transferred to holder
different from those who held such securities immediately prior to such merger.
In addition, a Corporate Transaction shall also include a Change of Control as
such is defined in the Option Plan and without limitation of Employee's rights
under Section 3(d) above, Employee may terminate the Period of Employment for
Good Reason (as defined below) on not less than two (2) weeks written notice to
the Company. In the event of a termination by Employee for Good Reason pursuant
to this Section 3(f), the Company shall retain Employee as a consultant to the
Company, subject to the same terms and conditions of the Consultancy Period set
forth in Section 3(e) above. The following shall constitute a termination by
Employee for "Good Reason" if: (i) without Employee's express written consent
there is an assignment to the Employee of any duties or the reduction of the
Employee's duties, either of which is materially inconsistent with Employee's
position or responsibilities with the Company in effect immediately prior to
such assignment, except in connection with the termination of the Period of
Employment for Cause, or due to disability or death; (ii) there is a reduction
by the Company in the Employee's annual salary then in effect other than a
reduction similar in percentage to a reduction generally applicable to similarly
situated employees of the Company; or (iii) a material reduction by the Company
in the kind or level of benefits provided to Employee under any benefit plan of
the Company in which the Employee is participating, including the bonus
described in Section 2(c), with the result that Employee's overall benefits
package is significantly reduced, unless similar reductions are made to the
overall benefits package of similarly situated employees of the Company; (iv)
there is a relocation of the Employee to a facility or a location more than 50
miles from the Company's present location, without the Employee's express
written consent; or (v) any material breach by the Company of any material
provision of this Agreement.

          (g) Company Right to Require Consulting Services. In the event of a
              --------------------------------------------
termination of the Period of Employment pursuant to Section 3(c) and 3(d) above,
the Company shall have the option, exercisable on written notice to Employee
within twenty (20) days following such termination of the Period of Employment,
to require Employee to provide consulting services upon the same terms provided
in Section 3(e) above, including without limitation, Employee's duties not to
compete with the Company as provided in Section 3(i), except that: (i) the
Company may thereafter terminate the Consultancy Period on thirty (30) days
notice to Employee; and (ii) the compensation payable to Employee during the
Consultancy Period shall be equal to Employee's salary payable pursuant to
Section 2(a) hereof as prorated and reduced to be equal to an hourly rate
(assuming forty (40) hours work weeks and forty-eight (48) full weeks of service
during a year), and Employee shall be so paid by the Company at such hourly rate
for such consulting services based on the greater of: (i) the actual number of
hours of consulting services provided by Employee; and (ii) ten (10) hours per
calendar month; provided, that if the Company requires in excess of twenty (20)
hours per week of consulting, then the Company shall compensate Employee and
provide benefits and bonuses as if Employee is working full time during the
Consultancy Period. The Company may require up to a maximum of forty (40) hours

                                       5
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per week of consulting services. In the event that the Company requires less
than forty (40) hours of consulting services per week, then the Company may not
prevent Employee from accepting other employment or engaging in any work or
other activity of any kind during the Consultancy Period provided that such
employment, work or activity is not competitive with the core application server
business of the Company (as defined in Section 3(i) hereof) and Employee may
accept such other noncompetitive employment or engage in other noncompetitive
work or business activities during the Consultancy Period. The Company
acknowledges that once it chooses to require less than forty (40) hours per week
of consulting services from Employee that the Company may not later unilaterally
increase the consulting services required of Employee to forty (40) hours per
week or restrict Employee's ability to accept other noncompetitive employment or
engage in other noncompetitive work or activities without Employee's consent,
which may be withheld in Employee's discretion.

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

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

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

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

               (4) Employee agrees to comply with the covenant not to compete as
set forth in such Section 3(i).

          (i) Covenant not to Compete. During the Consultancy Period, Employee
              -----------------------
agrees not to compete with the business of the Company during such Consultancy
Period, anywhere within, from or into the countries listed in Exhibit A and from
                                                              ---------
or into any additional countries where the Company does business at the time of
termination of Employee's employment. For purposes of this Section 3(i),
Employee shall be deemed to compete if he either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer, director
or in any other individual or representative capacity engages or participates,
or makes preparations to establish, any business that conducts the same or
substantially the same business as or is

                                       6
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competitive with the business which is conducted by the Company on the date of
Employee's termination, including, without limitation, work relating to Encina,
Unikix, CICS/9000 and any activity engaged in by the Company during the twelve
months immediately preceding the date of termination of the Period of Employment
or any activity contemplated by the Company on the date of such termination.
Nothing contained in this Section 3(i) shall be construed to prohibit Employee
from purchasing and owning (directly or indirectly) up to one percent (1%) of
the capital stock or other securities of any corporation or other entity whose
stock or securities are traded on any national or regional securities exchange
or the national over-the- counter market and such ownership shall not constitute
a violation of this Section 3(i). In the event of a termination of the Period of
Employment pursuant to Section 3(c) or 3(d) above, the Company shall have the
option, exercisable on written notice to Employee within twenty (20) days
following such termination of the Period of Employment, to require Employee to
provide consulting services upon the same terms provided in Section 3(g) above,
including without limitation, Employee's duties not to compete with the Company
as provided herein.

     4. Proprietary Information Agreement. As a condition to his employment with
        ---------------------------------
the Company, Employee shall execute and deliver a copy of the Company's standard
form Employee Proprietary Information and Inventions Agreement in substantially
the form of Exhibit B attached hereto and incorporated herein. Any breach by
            ---------
Employee of such agreement shall be deemed a breach of this Agreement for
purposes of Section 3(c) hereof. Employee's obligations under such Employee
Proprietary Information and Inventions Agreement shall survive any termination
of the Period of Employment. Employee agrees to comply with the covenants
contained in Sections 3(h)(3)-(4) and 3(i) of this Agreement, in addition to any
and all covenants contained in the Employee Proprietary Information and
Inventions Agreement he executes in accordance with this Section 4.

     5. Loan to Employee. The Company agrees to lend certain amounts to Employee
        ----------------
as provided below, which loan need not be secured by assets of Employee. Each
loan will be evidenced by a full recourse promissory note in substantially the
form attached hereto as Exhibit C.
                        ---------

          (a) Line of Credit. Employee shall be extended a line of credit for a
              --------------
maximum of Five Million Dollars ($5,000,000.00) (the "Line of Credit"). All
advances are subject to the review of and approval by the Company's Chief
Financial Officer. Funds shall be advanced upon written notice for funds by
Employee to Company (the "Advance"). All funds together with interest from the
date of the Advance shall accrue at the applicable federal rate on the date of
the Advance, compounded semiannually and shall be due and payable within ninety
(90) days upon the earlier of (i) the date the prior 30 day average fair market
value of a share of the Common Stock of the Company increases by at least 50%
over the fair market value of a share of the Company's Common Stock on the date
of the Advance and (ii) the date of termination of employment pursuant to
Section 3. For purposes of this Section 5, the fair market value of a share of
the Common Stock of the Company shall mean the closing price for a share for the
last market trading day prior to the time of the determination (or, if no
closing price was reported on that date, on the last trading date on which a
closing price was reported) on the stock exchange determined by the Company to
be the primary market for the Common Stock as reported in The Wall Street
Journal or such other source as the Company deems reliable.

                                       7
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     6. Additional Bonus. Provided that the employee continues to be employed by
        ----------------
the Company, an additional bonus amount will be paid at the end of each calendar
quarter in the amount of $18,450 (gross) for the duration of this agreement.

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

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

                                         BEA Systems, Inc.
                                         2315 North First Street
                                         San Jose, CA  95151
                                         Attn: Chief Financial Officer

or to the Employee at:                   Alfred S. Chuang
                                         c/o Morrison & Foerster
                                         755 Page Mill Rd.
                                         Palo Alto, CA  94304

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

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

     10. Amendments; Waivers. This Agreement may not be modified, amended, or
         -------------------
terminated except by an instrument in writing, signed by the Employee and by a
duly authorized representative of the Company other than Employee. By an
instrument in writing similarly executed, either party may waive compliance by
the other party with any provision of this

                                       8
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Agreement that such other party was or is obligated to comply with or perform,
provided, however, that such waiver shall not operate as a waiver of, or
estoppel with respect to, any other or subsequent failure. No failure to
exercise and no delay in exercising any right, remedy, or power hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, remedy, or power hereunder preclude any other or further exercise thereof
or the exercise of any other right, remedy, or power provided herein or by law
or in equity.

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

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

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

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

                                       9
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          The parties have duly executed this Agreement as of the date first
written above.

COMPANY:                                  EMPLOYEE:

BEA SYSTEMS, INC.

By: /s/ Robert F. Donohue                /s/ Alfred S. Chuang
   _________________________________     _______________________________
                                         Alfred S. Chuang

Title: V.P., Legal & Secretary
      ______________________________

                                       10
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                                   EXHIBIT A
                                       to
                              EMPLOYMENT AGREEMENT
                              --------------------

England
France
Germany
Japan
United States

                                       11
<PAGE>

                                   EXHIBIT B
                               BEA SYSTEMS, INC.

                                September, 1999

           EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
           ---------------------------------------------------------

                                 (Rev. 9/23/98)

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

1. Proprietary Information.
   -----------------------

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

   (b)  Proprietary Information Defined.  I understand that the term
        -------------------------------
        "Proprietary Information" in this Agreement means all information and
        any idea whether disclosed to, learned by or developed by me, pertaining
        in any manner to the business of the Company or to the Company's
        affiliates, consultants, or business associates, unless (i) the
        information is or becomes publicly known through lawful means; (ii) the
        information was rightfully in my possession or part of my general
        knowledge prior to my employment by the Company; or (iii) the
        information is disclosed to me without confidential or proprietary
        restriction by a third party who rightfully possesses the information
        (without confidential or proprietary restriction) and did not learn of
        it, directly or indirectly, from the Company. I understand that this
        definition includes information or ideas in any form, tangible or
        intangible, including without limitation, all documents, books, papers,
        drawings, models, sketches, and other data of any kind and description,
        including electronic data recorded or retrieved by any means, that have
        been or will be given to me by the Company (or any affiliate of it), as
        well as written or
                                       12
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     verbal instructions or comments. I further understand that the Company
     considers the following information to be included, without limitation, in
     the definition of Proprietary Information: (A) schematics, techniques,
     employee suggestions, development tools and processes, computer printouts,
     computer programs, design drawings and manuals, electronic codes, formulas
     and improvements; (B) information about costs, profits, markets, sales,
     customers, potential customers targeted by the Company and bids; (C) plans
     for future development and new product concepts, business marketing plans;
     and (D) corporate organization, personnel files, salary ranges and
     information about the compensation, equity and benefits provided to other
     employees.

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

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

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

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

                                       13
<PAGE>

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

2.   Inventions.
     ----------

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

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

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

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

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

                                       14
<PAGE>

     received in confidence). The Company shall examine such information to
     determine if in fact it is an Invention Idea subject to this Agreement.

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

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

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

(e)  Post-Termination Period.  I acknowledge that because of the difficulty of
     -----------------------
     establishing when something is first conceived or developed by me, or
     whether it results from access to Proprietary Information or the Company's
     equipment, facilities, and data, I agree that any idea, process, invention,
     technology, writing, program, design, formula, discovery, patent,
     copyright, or trademark, or any improvement, rights, or claims related to
     the foregoing, shall be presumed to be an Invention Idea if it is
     conceived, developed, used, sold, exploited, or reduced to practice by me
     or with my aid within one (1) year after my termination of

                                       15
<PAGE>

          employment with the Company. I can rebut the above presumption if I
          prove that the idea, process, invention, technology, writing, program,
          design, formula, discovery, patent, copyright, or trademark, or
          improvement, right or claim, is not an Invention Idea as defined in
          paragraph 2(a).

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

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

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

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

6.   NO IMPLIED EMPLOYMENT RIGHTS. I RECOGNIZE THAT NOTHING IN THIS AGREEMENT
     ----------------------------
     SHALL BE CONSTRUED TO IMPLY THAT MY EMPLOYMENT IS GUARANTEED FOR ANY PERIOD
     OF TIME EXCEPT AS OTHERWISE AGREED IN A WRITTEN AGREEMENT SIGNED BY A DULY
     AUTHORIZED OFFICER OF THE COMPANY.

                                       16
<PAGE>

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

8.   Miscellaneous Provisions.
     ------------------------

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

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

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

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

     (a)

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

     (f)  Application of this Agreement. I hereby agree that my obligations set
          -----------------------------
          forth in Sections 1 and 2 hereof and the definitions of Proprietary
          Information and Invention Ideas contained therein shall be equally
          applicable to Proprietary

                                       17
<PAGE>

          Information and Invention Ideas relating to any work performed by me
          for the Company prior to the execution of this Agreement.

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

Date:      9-1-99                               ALFRED CHUANG
     ------------------------                ------------------------------
                                                   Employee Name

                                             /s/ Alfred Chuang
                                             ------------------------------
                                                   Employee Signature

                                       18
<PAGE>

                                   SCHEDULE A
                                   ----------

                             EMPLOYEE'S DISCLOSURE
                             ---------------------

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

     ------------------------------------------------------------------------

     ------------------------------------------------------------------------

     ------------------------------------------------------------------------

     ------------------------------------------------------------------------

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

     ------------------------------------------------------------------------

     ------------------------------------------------------------------------

     ------------------------------------------------------------------------

     ------------------------------------------------------------------------

Date:    9/1/99                                  Alfred Chuang
     ----------------------------              -------------------------
                                                   Employee Name

                                               /s/ Alfred Chuang
                                               -------------------------
                                                   Employee Signature

                                       19
<PAGE>

                                   SCHEDULE B
                                   ----------

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

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

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

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

                       [generally describe the projects]

      ------------------------------------------------------------------------

     ------------------------------------------------------------------------

     ------------------------------------------------------------------------

     ------------------------------------------------------------------------

Date:
      --------------------------               ------------------------
                                                   Employee Name

                                               ------------------------
                                                   Employee Signature

                                       20
<PAGE>

                          Exhibit C - PROMISSORY NOTE
                                   (Advance)

$5,000,000                                                     September 1, 1999
                                                            San Jose, California

     Pursuant to the terms of that certain Employment Agreement dated September
1, 1999 (the "Employment Agreement") between the undersigned Alfred S. Chuang
("Maker") and BEA Systems, Inc., a Delaware corporation (the " Company") at its
address 2315 North First Street San Jose, CA 95151, Maker, for value received,
promises to pay to the Company the principal sum of $5,000,000 with interest
from the date hereof at a rate of 7% per annum, compounded semiannually on the
unpaid balance of such principal sum.

     Such principal and interest shall be due and payable within ninety (90)
days upon the earlier of (i) the date on which the prior 30 day average fair
market value of a share of the Common Stock of the Company increases by at least
50% over the fair market value of a share of the Company's Common Stock on the
date of hereof, and (ii) the date of termination of employment of Maker pursuant
to Section 3 of the Employment Agreement.  The fair market value of a share of
the Common Stock of the Company shall be calculated as set forth in the
Employment Agreement.  In the event of a Corporate Transaction as defined in the
Employment Agreement, all outstanding amounts due hereunder shall be forgiven
immediately prior to the consummation of such Corporate Transaction and this
Note shall be cancelled.

     This Note evidences the Company's loan to the undersigned pursuant to the
terms of Section 5(a) of the Employment Agreement.

     Interest shall be computed on the basis of a year of 360 days. All amounts
payable under this Note are payable in lawful money of the United States,
without notice, demand, offset or deduction. For purposes of interest accrual,
checks will constitute payment upon receipt.

     The following occurrence shall constitute an "Event of Default" under this
Note: Maker shall fail to pay any payment of principal or interest, within ten
(10) days of receipt of notice of failure to pay amounts when due in accordance
with the terms hereof.

     Upon the occurrence of any Event of Default hereunder, the entire unpaid
principal balance of this Note (including accrued interest) shall, at the option
of the Company and without notice or demand of any kind to Maker or any other
person, immediately become due and payable, and the Company shall have and may
exercise any and all rights and remedies available to it at law or in equity.

     Maker promises to pay on demand all reasonable out-of-pocket costs of and
expenses of the Company in connection with the collection of amounts due
hereunder,

                                       1
<PAGE>

including, without limitation, attorneys' fees incurred in connection
therewith, whether or not any lawsuit is ever filed with respect thereto.

     Maker and any endorsers or guarantors of this Note for themselves, their
heirs, legal representatives, successors and assigns, respectively, severally
waive diligence, presentment, protest and demand and also notice of protest,
demand, dishonor and nonpayment of this Note.

     This Note shall inure to the benefit of the Company and its successors and
assigns. The obligations of Maker hereunder shall not be assignable without the
consent of the Company.

     This Note shall be governed by and construed in accordance with the laws of
the State of California. If there is a lawsuit on this Note, the parties agree
to submit to the jurisdiction of the courts of Santa Clara County, California.

     IN WITNESS WHEREOF, the undersigned has executed and delivered this Note as
of the date first above written.

                              MAKER

                              --------------------------------

                                        2
<PAGE>

                                   Exhibit E

                                   AMENDMENT

                                       TO

                               BEA SYSTEMS, INC.

                           1997 STOCK INCENTIVE PLAN

                        INCENTIVE STOCK OPTION AGREEMENT

     This Amendment is made and dated as of September 1, 1999 by and between BEA
Systems, Inc., a Delaware corporation (the "Company") and Alfred S. Chuang
("Optionee") with respect to that certain stock option agreement dated May 17,
1999, between the Company and Optionee (the "Agreement") granted under the
Company's 1997 Stock Incentive Plan (the "Plan"):

                                    RECITALS

     WHEREAS, the Company and Optionee now desire to amend the Agreement to
provide for the full vesting of the Option upon a Change in Control or Corporate
Transaction (as defined in the Plan) of the Company provided that both of the
conditions, as specified below, are met:

     1.   That the initiation (e.g. Memo of Understanding ) of a business
          combination resulting in a Change in Control occurs at least 6 months
          from the effective date of this Agreement.

     2.   That there is a substantive change of responsibilities after or as a
          result of a Change in Control.

NOW THEREFORE, the parties hereto agree as follows:

                                   AGREEMENT

     1. Vesting of Right to Exercise Option. The Vesting Schedule of the
        -----------------------------------
Agreement, as set forth in the Notice of Stock Option Grant related thereto, is
hereby amended in its entirety to read as follows:

     "Vesting Schedule:

          Twenty-five percent (25%) of the Number of Shares shall vest and may
     be exercised upon the first anniversary of the Date of Grant and an
     additional 1/48th of the Number of Shares shall vest and may be exercised
     upon the monthly anniversary of the Date of Grant thereafter; provided,
     however, that all of the Number of Shares shall vest immediately if, as a
     result of a Change in Control or Corporate Transaction (as defined in
<PAGE>

     the Plan) which occurs as a result of a Memo of Understanding or similar
     document executed by the Company and the acquiring party after March 1,
     2000, Optionee's employment is terminated by the Company or a successor
     company without "Cause" or voluntarily by the Optionee with "Good Reason"
     following the Corporate Transaction or Change in Control.

          For the purposes of this Agreement "Cause" and "Good Reason" have the
     meanings set forth in Optionee's Employment Agreement dated September 1,
     1999.

     2.  Agreement Continues.  Except as specifically modified herein, the terms
         -------------------
and conditions of the Agreement shall remain in full force and effect.

     3.  Definitions.  Capitalized terms used herein shall have the meanings set
         -----------
  forth in the Agreement, unless otherwise specifically defined herein.

     4.  Counterparts.  This Amendment may be executed in any number of
         ------------
  counterparts, each of which shall be an original, but all of which together
  shall constitute one instrument.

     IN WITNESS WHEREOF, the Company has caused this Amendment to be executed on
its behalf, and Optionee has hereunto set Optionee's hand as of the day and year
first above written.

                              BEA SYSTEMS, INC.,
                              a Delaware corporation

                              By: /s/ Robert F. Donohue
                                 ---------------------------

                              Title: V.P. Legal & Secretary
                                    -----------------------

                              Optionee:

                              /s/ Alfred S. Chuang
                              -----------------------------
                              Alfred S. Chuang

                              Address: 1305 Victoria Terrace
                                      ---------------------------

                                       Sunnyvale, CA  94082
                                      ---------------------------<PAGE>

                                                                   EXHIBIT 10.16

                               BEA SYSTEMS, INC.
                             EMPLOYMENT AGREEMENT

          THIS EMPLOYMENT AGREEMENT, is entered into as of September 1, 1999,
between BEA Systems, Inc., a Delaware corporation (the "Company"), and William
T. Coleman III ("Employee").

                                R E C I T A L S
                                ---------------

          A.  Employee entered into an Employment Agreement with the Company
dated September 28, 1995 (the "1995 Agreement"), which expires on September 28,
1999.

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

                               A G R E E M E N T
                               -----------------

ACCORDINGLY, THE PARTIES AGREE AS FOLLOWS:

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

         (a)  Period of Employment.  The Company hereby employs Employee to
              --------------------
render services to the Company in the position and with the duties and
responsibilities described in Section 1(b) for the period (the "Period of
Employment") commencing on the date of this Agreement and ending the earlier of
(i) July 31, 2003; or (ii) the date this Agreement is terminated in accordance
with Section 3 below.

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

         (c)  Other Activities.  Except upon the prior written consent of the
              ----------------
Board, Employee, during the Period of Employment, will not (i) accept any other
employment; (ii) engage, directly or indirectly, in any other business activity
(whether or not pursued for pecuniary advantage) that is or may be competitive
with, or that might place him in a competing position to that of the Company or
any Affiliated Company, as determined in the discretion of

                                       1
<PAGE>

the Board; or (iii) engage in any work or business activity of any kind outside
those of the Company.

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

         (a)  Compensation.  In consideration of the services to be rendered
              ------------
hereunder, including, without limitation, services to any Affiliated Company,
Employee shall be paid an annual salary of Three Hundred Thousand Dollars
($300,000.00), payable at the times and pursuant to the procedures regularly
established, and as they may be amended, by the Company during the Period of
Employment. This rate shall be reviewed annually on a calendar year basis, in
accordance with the Company's salary review practices, and adjusted in the sole
discretion of the Board of the Company to reflect increases in the cost of
living and such other increases as are awarded in accordance with the Company's
regular salary review practices for giving salary increases to similarly
situated employees.

         (b)  Stock Options.  Employee is eligible to receive options under
              -------------
the Company's 1997 Flexible Stock Incentive Plan (the "Option Plan") and such
other option plans as the Company may from time to time adopt, as approved by
the Board or a Committee (as defined in the Option Plan) thereof. Twenty-five
percent (25%) of the Shares subject to the Option Plan shall vest twelve months
after the date of an Award (as defined in the Option Plan) (the "Vesting
Commencement Date"), and 1/48th of the Shares subject to the Option Plan shall
vest on each monthly anniversary of the Vesting Commencement Date thereafter.
All such options are transferable to the extent provided in the agreement
evidencing a grant of an Award and such agreement is amended as described in
Exhibit E.

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

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

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

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

                                       2
<PAGE>

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

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

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

         (c)  By Company For Cause.  The Company may terminate, without
              --------------------
liability, the Period of Employment for Cause (as defined below) at any time
upon ten (10) days' advance written notice to Employee. The Company shall pay
Employee the compensation to which he is entitled pursuant to Section 2(a)
through the end of the notice period and thereafter the Company's obligations
hereunder shall terminate. The Company may terminate the employment of the
Employee and all of the Company's obligations under this Agreement at any time
for "cause" by giving the Employee notice of such termination, with reasonable
specificity of the details thereof. For the purposes of this Section 3(c),
"Cause" shall mean: (i) the Employee's material misconduct which could
reasonably be expected to have a material adverse effect on the business and
affairs of the Company, (ii) the Employee's disregard of lawful instructions of
the Company's Board of Directors consistent with the Employee's position
relating to the business of the Company or neglect of duties or failure to act,
which, in each case, could reasonably be expected to have a material adverse
effect on the business and affairs of the Company; (iii) Employee is convicted
of common law fraud, or a felony or criminal act against the Company or any
Affiliated Company thereof or any of the assets of any of them; (iv) the
Employee's abuse of alcohol or other drugs or controlled substances, or
conviction of a crime involving moral turpitude, or (v) the Employee's material
breach of any of the agreements contained herein. A termination pursuant to
Section 3(c) (i), (ii), (iv) (other than as a result of a conviction of a crime
involving moral turpitude), or (v) shall take effect 10 days after the giving of
the notice contemplated hereby unless the Employee shall, during such 10-day
period, remedy

                                       3
<PAGE>

to the satisfaction of the Board of Directors of the Company the misconduct,
disregard, abuse or breach specified of such notice; provided, however,
                                                     --------  -------
that such termination shall take effect immediately upon giving of such notice
if the Board of Directors of the Company shall have determined that such
misconduct, disregard, abuse or breach is not remediable which determination
shall be stated in such notice. A determination pursuant to Section 3(c) (iii)
or (iv) (as a result of a conviction of a crime involving moral turpitude) shall
take effect immediately upon giving of the notice contemplated hereby.

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

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

         (f)  Termination by Employee for Good Reason Following Corporate
              ------------------------------------------------------------
Transaction. At any time following a Corporate Transaction (For purposes of this
Agreement, a "Corporate Transaction" shall include any of the following
stockholder-approved transactions to which the Company is a party: (i) a merger
or consolidation in which the Company is not the surviving entity and securities
representing more than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities are transferred to holder different from
those who held such securities immediately prior to such merger; (ii) the sale,
transfer or other disposition of all or substantially all of the assets of the
Company in liquidation or dissolution of the Company; or (iii) any reverse
merger in which the Company is the surviving entity but in which securities
representing more than fifty percent (50%) of the total combined voting power of
the Company's outstanding securities are transferred to holder different from
those who

                                       4
<PAGE>

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

         (g)  Company Right to Require Consulting Services.  In the event of a
              --------------------------------------------
termination of the Period of Employment pursuant to Section 3 (c) and 3(d)
above, the Company shall have the option, exercisable on written notice to
Employee within twenty (20) days following such termination of the Period of
Employment, to require Employee to provide consulting services upon the same
terms provided in Section 3(e) above, including without limitation, Employee's
duties not to compete with the Company as provided in Section 3(i), except that:
(i) the Company may thereafter terminate the Consultancy Period on thirty (30)
days notice to Employee; and (ii) the compensation payable to Employee during
the Consultancy Period shall be equal to Employee's salary payable pursuant to
Section 2(a) hereof as prorated and reduced to be equal to an hourly rate
(assuming forty (40) hours work weeks and forty-eight (48) full weeks of service
during a year), and Employee shall be so paid by the Company at such hourly rate
for such consulting services based on the greater of: (i) the actual number of
hours of consulting services provided by Employee; and (ii) ten (10) hours per
calendar month; provided, that if the Company requires in excess of twenty (20)
hours per week of consulting, then the Company shall compensate Employee and
provide benefits and bonuses as if Employee is working full time during the
Consultancy Period. The Company may require up to a maximum of forty (40) hours
per week of consulting services. In the event that the Company requires less
than forty (40) hours of consulting services per week, then the Company may not
prevent

                                       5
<PAGE>

Employee from accepting other employment or engaging in any work or other
activity of any kind during the Consultancy Period provided that such
employment, work or activity is not competitive with the business of the Company
(as defined in Section 3(i) hereof) and Employee may accept such other
noncompetitive employment or engage in other noncompetitive work or business
activities during the Consultancy Period. The Company acknowledges that once it
chooses to require less than forty (40) hours per week of consulting services
from Employee that the Company may not later unilaterally increase the
consulting services required of Employee to forty (40) hours per week or
restrict Employee's ability to accept other noncompetitive employment or engage
in other noncompetitive work or activities without Employee's consent, which may
be withheld in Employee's discretion.

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

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

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

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

              (4)  Employee agrees to comply with the covenant not to compete as
set forth in such Section 3(i).

         (i)  Covenant not to Compete.  During the Consultancy Period, Employee
              -----------------------
agrees not to compete with the business of the Company during such Consultancy
Period, anywhere within, from or into the countries listed in Exhibit A and
                                                              ---------
from or into any additional countries where the Company does business at the
time of termination of Employee's employment. For purposes of this Section 3(i),
Employee shall be deemed to compete if he either as an employee, employer,
consultant, agent, principal, partner, stockholder, corporate officer, director
or in any other individual or representative capacity engages or participates,
or makes preparations to establish, any business that conducts the same or
substantially the same business as or is competitive with the business which is
conducted by the Company on the date of Employee's termination, including,
without limitation, work relating to Encina, Unikix,

                                       6
<PAGE>

CICS/9000 and any activity engaged in by the Company during the twelve months
immediately preceding the date of termination of the Period of Employment or any
activity contemplated by the Company on the date of such termination. Nothing
contained in this Section 3(i) shall be construed to prohibit Employee from
purchasing and owning (directly or indirectly) up to one percent (1%) of the
capital stock or other securities of any corporation or other entity whose stock
or securities are traded on any national or regional securities exchange or the
national over-the-counter market and such ownership shall not constitute a
violation of this Section 3(i). In the event of a termination of the Period of
Employment pursuant to Section 3(c) or 3(d) above, the Company shall have the
option, exercisable on written notice to Employee within twenty (20) days
following such termination of the Period of Employment, to require Employee to
provide consulting services upon the same terms provided in Section 3(e) above,
including without limitation, Employee's duties not to compete with the Company
as provided herein.

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

     5.  Loan to Employee.  The Company agrees to lend certain amounts to
         -----------------
Employee as provided below, which loan need not be secured by assets of
Employee. Each loan will be evidenced by a full recourse promissory note in
substantially the form attached hereto as Exhibit C.
                                          ---------

         (a)  Line of Credit.  Employee shall be extended a line of credit for
              --------------
a maximum of Five Million Dollars ($5,000,000.00) (the "Line of Credit"). All
advances are subject to the review of and approval by the Company's Chief
Financial Officer. Funds shall be advanced upon written notice for funds by
Employee to Company (the "Advance"). All funds together with interest from the
date of the Advance shall accrue at the applicable federal rate on the date of
the Advance, compounded semiannually and shall be due and payable within ninety
(90) days upon the earlier of (i) the date the prior 30 day average fair market
value of a share of the Common Stock of the Company increases by at least 50%
over the fair market value of a share of the Company's Common Stock on the date
of the Advance and (ii) the date of termination of employment pursuant to
Section 3. For purposes of this Section 5, the fair market value of a share of
the Common Stock of the Company shall mean the closing price for a share for the
last market trading day prior to the time of the determination (or, if no
closing price was reported on that date, on the last trading date on which a
closing price was reported) on the stock exchange determined by the Company to
be the primary market for the Common Stock as reported in The Wall Street
Journal or such other source as the Company deems reliable.

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

                                       7
<PAGE>

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

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

                                         BEA Systems, Inc.
                                         2315 North First Street
                                         San Jose, CA  95151
                                         Attn: Chief Financial Officer

or to the Employee at:                   William T. Coleman III
                                         c/o Morrison & Foerster
                                         755 Page Mill Rd.
                                         Palo Alto, CA. 94304

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

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

     10.  Amendments; Waivers.  This Agreement may not be modified, amended, or
          -------------------
terminated except by an instrument in writing, signed by the Employee and by a
duly authorized representative of the Company other than Employee.  By an
instrument in writing similarly

                                       8
<PAGE>

executed, either party may waive compliance by the other party with any
provision of this Agreement that such other party was or is obligated to comply
with or perform, provided, however, that such waiver shall not operate as a
waiver of, or estoppel with respect to, any other or subsequent failure.  No
failure to exercise and no delay in exercising any right, remedy, or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, or power hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, or power provided
herein or by law or in equity.

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

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

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

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

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

COMPANY:                             EMPLOYEE:

BEA SYSTEMS, INC.

By:  /s/  Robert F. Donohue              /s/ William T. Coleman III
    _________________________________  _______________________________

Title: VP Legal & Secretary
       ________________________________  William T. Coleman III

                                       9
<PAGE>

                                   EXHIBIT A
                                      to
                             EMPLOYMENT AGREEMENT
                             --------------------

England
France
Germany
Japan
United States

                                       10
<PAGE>

                                   EXHIBIT B

                                September, 1999

           EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
           ---------------------------------------------------------

                                 (Rev. 9/23/98)

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

1.   Proprietary Information.
     -----------------------

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

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

                                       11
<PAGE>

          Proprietary Information: (A) schematics, techniques, employee
          suggestions, development tools and processes, computer printouts,
          computer programs, design drawings and manuals, electronic codes,
          formulas and improvements; (B) information about costs, profits,
          markets, sales, customers, potential customers targeted by the Company
          and bids; (C) plans for future development and new product concepts,
          business marketing plans; and (D) corporate organization, personnel
          files, salary ranges and information about the compensation, equity
          and benefits provided to other employees.

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

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

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

     (f)  Interference with Business.  I hereby acknowledge that pursuit of the
          --------------------------
          activities forbidden by this paragraph 1(f) would necessarily involve
          the use or disclosure of Proprietary Information in breach of
          paragraph 1(a), but that proof of such breach would be extremely
          difficult. To forestall such disclosure, use, and breach, I agree that
          for the term of this Agreement and for a period of one (1) year after
          termination of my employment with the Company, I shall not, for myself
          or any third party, directly or indirectly (i) divert or attempt to
          divert from the Company (or any affiliate of it that might be formed)
          any business of any kind in which it is

                                       12
<PAGE>

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

2.   Inventions.
     ----------

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

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

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

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

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

                                       13
<PAGE>

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

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

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

     (e)  Post-Termination Period.  I acknowledge that because of the
          -----------------------
          difficulty of establishing when something is first conceived or
          developed by me, or whether it results from access to Proprietary
          Information or the Company's equipment, facilities, and data, I agree
          that any idea, process, invention, technology, writing, program,
          design, formula, discovery, patent, copyright, or trademark, or any
          improvement, rights, or claims related to the foregoing, shall be
          presumed to be an Invention Idea if it is conceived, developed, used,
          sold, exploited, or reduced to practice by me or with my aid within
          one (1) year after my termination of employment with the Company. I
          can rebut the above presumption if I prove that the idea, process,
          invention, technology, writing, program, design, formula,

                                       14
<PAGE>

          discovery, patent, copyright, or trademark, or improvement, right or
          claim, is not an Invention Idea as defined in paragraph 2(a).

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

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

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

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

2.      NO IMPLIED EMPLOYMENT RIGHTS.  I RECOGNIZE THAT NOTHING IN THIS
        -----------------------------
AGREEMENT SHALL BE CONSTRUED TO IMPLY THAT MY EMPLOYMENT IS GUARANTEED FOR ANY
PERIOD OF TIME.  EXCEPT AS OTHERWISE AGREED IN A WRITTEN AGREEMENT SIGNED BY A
DULY AUTHORIZED OFFICER OF THE COMPANY, MY EMPLOYMENT IS FOR AN INDEFINITE
DURATION, AND EITHER THE COMPANY OR I CAN TERMINATE OUR EMPLOYMENT

                                       15
<PAGE>

     RELATIONSHIP AT ANY TIME, WITHOUT NOTICE, AND FOR ANY REASON, WITH OR
     WITHOUT CAUSE.

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

7.   Miscellaneous Provisions.
     ------------------------

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

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

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

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

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

     (e)  Application of this Agreement.  I hereby agree that my
          -----------------------------
          obligations set forth in Sections 1 and 2 hereof and the definitions
          of Proprietary Information and Invention Ideas contained therein shall
          be equally applicable to Proprietary

                                       16
<PAGE>

              Information and Invention Ideas relating to any work performed by
              me for the Company prior to the execution of this Agreement.

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

Date:_____________________________      _______________________________________
                                                   Employee Name

                                            /s/  William T. Coleman III
                                        _______________________________________
                                                   Employee Signature

                                       17
<PAGE>

                                   SCHEDULE A
                                   ----------

                             EMPLOYEE'S DISCLOSURE
                             ---------------------

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

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

Date:_____________________________      ______________________________________
                                                   Employee Name

                                          /s/   William T. Coleman III
                                        ______________________________________
                                                   Employee Signature

                                       18
<PAGE>

                                   SCHEDULE B
                                   ----------

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

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

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

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

                       [generally describe the projects]

_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________

Date:___________________________      _________________________________________
                                                   Employee Name

                                      _________________________________________
                                                   Employee Signature

                                       19
<PAGE>

                          Exhibit C - PROMISSORY NOTE
                                   (Advance)

$5,000,000                                                     September 1, 1999
                                                            San Jose, California

     Pursuant to the terms of that certain Employment Agreement dated September
1, 1999 (the "Employment Agreement") between the undersigned William T. Coleman
III ("Maker") and BEA Systems, Inc., a Delaware corporation (the "Company") at
its address 2315 North First Street San Jose, CA 95151, Maker, for value
received, promises to pay to the Company the principal sum of $5,000,000 with
interest from the date hereof at a rate of 7% per annum, compounded semiannually
on the unpaid balance of such principal sum.

     Such principal and interest shall be due and payable within ninety (90)
days upon the earlier of (i) the date on which the prior 30 day average fair
market value of a share of the Common Stock of the Company increases by at least
50% over the fair market value of a share of the Company's Common Stock on the
date of hereof, and (ii) the date of termination of employment of Maker pursuant
to Section 3 of the Employment Agreement. The fair market value of a share of
the Common Stock of the Company shall be calculated as set forth in the
Employment Agreement. In the event of a Corporate Transaction as defined in the
Employment Agreement, all outstanding amounts due hereunder shall be forgiven
immediately prior to the consummation of such Corporate Transaction and this
Note shall be cancelled.

     This Note evidences the Company's loan to the undersigned pursuant to the
terms of Section 5(a) of the Employment Agreement.

     Interest shall be computed on the basis of a year of 360 days. All amounts
payable under this Note are payable in lawful money of the United States,
without notice, demand, offset or deduction. For purposes of interest accrual,
checks will constitute payment upon receipt.

     The following occurrence shall constitute an "Event of Default" under this
Note: Maker shall fail to pay any payment of principal or interest, within ten
(10) days of receipt of notice of failure to pay amounts when due in accordance
with the terms hereof.

     Upon the occurrence of any Event of Default hereunder, the entire unpaid
principal balance of this Note (including accrued interest) shall, at the option
of the Company and without notice or demand of any kind to Maker or any other
person, immediately become due and payable, and the Company shall have and may
exercise any and all rights and remedies available to it at law or in equity.

     Maker promises to pay on demand all reasonable out-of-pocket costs of and
expenses of the Company in connection with the collection of amounts due
hereunder,

                                       1
<PAGE>

including, without limitation, attorneys' fees incurred in connection therewith,
whether or not any lawsuit is ever filed with respect thereto.

     Maker and any endorsers or guarantors of this Note for themselves, their
heirs, legal representatives, successors and assigns, respectively, severally
waive diligence, presentment, protest and demand and also notice of protest,
demand, dishonor and nonpayment of this Note.

     This Note shall inure to the benefit of the Company and its successors and
assigns. The obligations of Maker hereunder shall not be assignable without the
consent of the Company.

     This Note shall be governed by and construed in accordance with the laws of
the State of California. If there is a lawsuit on this Note, the parties agree
to submit to the jurisdiction of the courts of Santa Clara County, California.

     IN WITNESS WHEREOF, the undersigned has executed and delivered this Note as
of the date first above written.

                              MAKER

                              -------------------------

                                       2
<PAGE>

                                   Exhibit E

                                   AMENDMENT

                                       TO

                               BEA SYSTEMS, INC.

                           1997 STOCK INCENTIVE PLAN

                        INCENTIVE STOCK OPTION AGREEMENT

     This Amendment is made and dated as of September 1, 1999 by and between BEA
Systems, Inc., a Delaware corporation (the "Company") and William T. Coleman
("Optionee") with respect to unvested stock options that have been previously
granted, between the Company and Optionee (the "Agreement") granted under the
Company's 1997 Stock Incentive Plan (the "Plan"):

                                    RECITALS

     WHEREAS, the Company and Optionee now desire to amend Stock Option
Agreements to provide for the full vesting of the Options upon a Change in
Control (as defined in the Plan) of the Company provided that both of the
conditions, as specified below, are met:

     1.   That the initiation (Memo of Understanding or other document that
          binds both parties) of a business combination resulting in a Change in
          Control occurs 6 months from the effective date of this Agreement.

     2.   That there is a substantive change of responsibilities after or as a
          result of a Change in Control, regardless of when the Change in
          Control occurs.

     NOW THEREFORE, the parties hereto agree as follows:

                                   AGREEMENT

     1. Vesting of Right to Exercise Option. The Vesting Schedule of the
        -----------------------------------
Agreement, as set forth in the Notice of Stock Option Grant related thereto, is
hereby amended in its entirety to read as follows:

     "Vesting Schedule:

          Twenty-five percent (25%) of the Number of Shares shall vest and may
     be exercised upon the first anniversary of the Date of Grant and an
     additional 1/48th of the Number of Shares shall vest and may be exercised
     upon the monthly anniversary of the Date of Grant thereafter; provided,
     however, that all of the Number of Shares shall vest immediately if, as a
     result of a Change in Control or Corporate Transaction (as defined in
<PAGE>

     the Plan) which takes place after March 1, 2000, Optionee's employment is
     terminated by the Company or a successor company without "Cause" or
     voluntarily by the Optionee with "Good Reason" following the Corporate
     Transaction or Change in Control.

     For the purposes of this Agreement "Cause" and "Good Reason" has the
     meanings set forth in Optionee's Employment Agreement dated September 1,
     1999.

     2. Agreement Continues. Except as specifically modified herein, the terms
        -------------------
and conditions of the Agreement shall remain in full force and effect.

     3. Definitions. Capitalized terms used herein shall have the meanings set
        -----------
forth in the Agreement, unless otherwise specifically defined herein.

     4. Counterparts. This Amendment may be executed in any number of
        ------------
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.

     IN WITNESS WHEREOF, the Company has caused this Amendment to be executed on
its behalf, and Optionee has hereunto set Optionee's hand as of the day and year
first above written.

                              BEA SYSTEMS, INC.,
                              a Delaware corporation

                              By:  Robert F. Donohue
                                 --------------------------------

                              Title: V.P., Legal and Secretary
                                    -----------------------------

                              Optionee:

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

                              Address:
                                      ---------------------------

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