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                                                                    EXHIBIT 10.5

                          PROGRESS SOFTWARE CORPORATION
                 2007 FISCAL YEAR DIRECTOR COMPENSATION PROGRAM

A.   Amounts of 2007 Fiscal Year Compensation

     -    Annual Board Retainer:                 $275,000

     -    Audit Committee:                       $ 25,000 for Chair
                                                 $ 20,000 for Members

     -    Nomination and Governance Committee:   $ 10,000 for Chair
                                                 $  7,500 for Members

     -    Compensation Committee:                $ 15,000 for Chair
                                                 $ 12,500 for Members

     -    Special Committee(s):                  $ 30,000 for Chair
          (while in use)                         $ 25,000 for Members

     -    Board Chairman:                        $ 25,000

     Form of Payment: 25% in cash
                      75% in equity

     Equity:   May be in the form of fully vested deferred stock units or fully
               vested stock options. The number of option shares is determined
               by dividing the compensation amount by the grant date Black
               Scholes value. The number of deferred stock units is determined
               by dividing the compensation amount by the grant date closing
               price of the Corporation's common stock.

     Election: The election to be paid either in options or deferred stock units
               must be made prior to the start of the Corporation's fiscal year,
               within ten days of the director's initial election to the Board,
               or prior to the approval of this program.

     Timing:   Annual fiscal year compensation will be paid in two installments
               in arrears, coincident with the April and October dates of the
               broad-based employee equity grants. Amounts paid will be
               pro-rated for partial year service. Accordingly, if a director
               resigns from the Board, is removed from the Board by a vote, is
               removed from the Board due to a change in control, or dies in
               office, he or she is paid a pro-rated amount for service through
               date of termination of service. Similarly a director who joins
               the Board other than on the first day of the fiscal year will be
               paid a pro-rated amount of the annual fiscal year compensation.

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B.   Initial Director Option Grant

     Each newly elected Director shall receive an option to acquire 25,000
     shares of the Corporation's common stock at the first April or October
     grant date following his or her election to the Board. The vesting is over
     a 60-month period and begins on the first day of the month following the
     month the Director joins the Board, with full acceleration upon a change in
     control. The term of the option shall be identical to employee options.

C.   Stock Retention Guidelines

     All non-affiliate Directors must hold 10,000 shares of the Corporation's
     common stock or deferred stock units. Directors have three years to attain
     this guideline.<PAGE>

                                                                    EXHIBIT 10.6

                          DEFERRED STOCK UNIT AGREEMENT
                     UNDER THE PROGRESS SOFTWARE CORPORATION
                            1997 STOCK INCENTIVE PLAN

Name of Grantee: ________________
No. of Deferred Stock Units Granted: __________
Grant Date: ____________

     Pursuant to the Progress Software Corporation 1997 Stock Incentive Plan
(the "Plan") as amended through the date hereof, Progress Software Corporation
(the "Company") hereby grants a deferred stock award consisting of the number of
Deferred Stock Units listed above (an "Award") to the Grantee named above. Each
"Deferred Stock Unit" shall relate to one share of common stock, par value $.01
per share, of the Company (the "Stock"), subject to the conditions set forth
herein and in the Plan.

     1. Vesting of Deferred Stock Units. The Deferred Stock Units shall be fully
vested and non-forfeitable on the Grant Date.

     2. Dividend Equivalents.

          (a) If on any date the Company shall pay any cash dividend on shares
of Stock, the number of Deferred Stock Units credited to the Grantee shall, as
of such date, be increased by an amount determined by the following formula:

          W = (X multiplied by Y) divided by Z, where:

          W = the number of additional Deferred Stock Units to be credited to
          the Grantee on such dividend payment date;

          X = the aggregate number of Deferred Stock Units credited to the
          Grantee as of the record date of the dividend;

          Y = the cash dividend per share amount; and

          Z = the Fair Market Value per share of Stock (as determined under the
          Plan) on the dividend payment date.

          (b) In the case of a dividend paid on Stock in the form of shares of
Stock, including without limitation a distribution of shares of Stock by reason
of a stock dividend, stock split or otherwise, the number of Deferred Stock
Units credited to the Grantee shall be increased by a number equal to the
product of (i) the aggregate number of Deferred Stock Units that have been
awarded to the Grantee through the related dividend record date, and (ii) the
number of shares of Stock (including any fraction thereof) payable as dividend
on one share of Stock. In the case of a dividend payable in property other than
shares of Stock or cash, the per share of Stock value of such dividend shall be
determined in good faith by the Board of Directors of the

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Company and shall be converted to additional Deferred Stock Units based on the
formula in (a) above.

     3. Issuance of Shares of Stock.

          (a) As soon as practicable after the date the Grantee ceases to
provide services to the Company as a director, the Company shall issue to the
Grantee the number of full shares of Stock equal to the aggregate number of
Deferred Stock Units credited to the Grantee in full satisfaction of such
Deferred Stock Units. Any fractional Deferred Stock Unit shall be paid out in
cash.

          (b) Upon a Change of Control that constitutes a "Change in Control
Event" as defined in guidance issued by the Internal Revenue Service pursuant to
Section 409A of the Internal Revenue Code of 1986, as amended, the Company shall
issue to the Grantee the number of shares of Stock equal to the aggregate number
of Deferred Stock Units credited to the Grantee on such date (determined after
giving effect to Section 3 above) in full satisfaction of such Deferred Stock
Units; provided, however, that in the event the Company is involved in a
transaction in which shares of Stock will be exchanged for cash or other
consideration, the Grantee shall receive cash or other consideration equal in
value to the aggregate number of Deferred Stock Units credited to the Grantee on
the date of Change of Control (determined after giving effect to Section 2
above).

          (c) Immediately after the issuance of shares of Stock or cash pursuant
to this Section 3, this Agreement shall terminate and be of no further force or
effect.

     4. Incorporation of Plan. Notwithstanding anything herein to the contrary,
this Agreement shall be subject to and governed by all the terms and conditions
of the Plan, including the powers of the Administrator set forth in Section 2(b)
of the Plan. Capitalized terms in this Agreement shall have the meaning
specified in the Plan, unless a different meaning is specified herein.

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     5. Transferability of this Agreement. This Agreement is personal to the
Grantee, is non-assignable and is not transferable in any manner, by operation
of law or otherwise, other than by will or the laws of descent and distribution.

                                        PROGRESS SOFTWARE CORPORATION

                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

     The foregoing Agreement is hereby accepted and the terms and conditions
thereof hereby agreed to by the undersigned.

Dated:
       -------------------              ----------------------------------------
                                        Grantee's Signature<PAGE>

                                                                    EXHIBIT 10.7

                                                                   INITIAL GRANT

                      NON-QUALIFIED STOCK OPTION AGREEMENT
                           FOR NON-EMPLOYEE DIRECTORS
                     UNDER THE PROGRESS SOFTWARE CORPORATION
                            1997 STOCK INCENTIVE PLAN

Name of Optionee: __________

No. of Option Shares: __________

Option Exercise Price per Share: $__________

Grant Date: __________

Expiration Date: __________

     Pursuant to the Progress Software Corporation 1997 Stock Incentive Plan as
amended through the date hereof (the "Plan"), Progress Software Corporation (the
"Company") hereby grants to the Optionee named above, who is a Director of the
Company, an option (the "Stock Option") to purchase on or prior to the
Expiration Date specified above all or part of the number of shares of Common
Stock, par value $.01 per share, of the Company (the "Stock") at the Option
Exercise Price per share specified above subject to the terms and conditions set
forth herein and in the Plan. This Stock Option is not intended to be an
"incentive stock option" under Section 422 of the Internal Revenue Code of 1986,
as amended.

     1. Exercisability Schedule. This Stock Option shall be vested and
exercisable on the Grant Date with respect to ____ of the Stock Option and the
balance of the Stock Option shall be exercisable in ___ equal monthly increments
commencing on the first day of the month immediately following the Grant Date.

     Notwithstanding the foregoing, in the event of a Change of Control, this
Stock Option shall become immediately exercisable in full, whether or not
exercisable at such time.

     2. Manner of Exercise.

          (a) From time to time on or prior to the Expiration Date, the Optionee
may give written notice to the Administrator of his or her election to purchase
some or all of the Option Shares purchasable at the time of such notice. This
notice shall specify the number of Option Shares to be purchased.

     Payment of the purchase price for the Option Shares may be made by check or
any other form of payment that is permitted by Section 5(a)(iv) of the Plan.

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          (b) The shares of Stock purchased upon exercise of this Stock Option
shall be transferred to the Optionee on the records of the Company or of the
transfer agent upon compliance to the satisfaction of the Administrator with all
requirements under applicable laws or regulations in connection with such
transfer and with the requirements hereof and of the Plan. The determination of
the Administrator as to such compliance shall be final and binding on the
Optionee. The Optionee shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares of Stock subject to this
Stock Option unless and until this Stock Option shall have been exercised
pursuant to the terms hereof, the Company or the transfer agent shall have
transferred the shares to the Optionee, and the Optionee's name shall have been
entered as the stockholder of record on the books of the Company. Thereupon, the
Optionee shall have full voting, dividend and other ownership rights with
respect to such shares of Stock.

          (c) Notwithstanding any other provision hereof or of the Plan, no
portion of this Stock Option shall be exercisable after the Expiration Date
hereof.

     3. Termination as Director. If the Optionee ceases to be a Director of the
Company, the portion of the Stock Option that is not exercisable at such time
shall immediately terminate, and the period within which to exercise the portion
of the Stock Option that is exercisable at such time may be subject to earlier
termination as set forth below:

          (a) Termination by Reason of Death. If the Optionee ceases to be a
Director by reason of the Optionee's death, any portion of this Stock Option
outstanding on such date, to the extent exercisable, may be exercised by his or
her legal representative or legatee for a period of 24 months from the date of
cessation of service as a Director or until the Expiration Date, if earlier.

          (b) Termination by Reason of Cause If the Optionee ceases to be a
Director by reason of the Optionee's termination of service for Cause (as
defined in the Plan), no portion of this Stock Option may be exercised after the
last day of service as a Director.

          (c) Termination by Reason of Disability If the Optionee ceases to be a
Director by reason of the Optionee's Disability (as defined in the Plan), any
portion of this Stock Option outstanding on such date, to the extent
exercisable, may be exercised by the Optionee for a period of 12 months from the
date of cessessation as a Dirertor or until the Expiration Date, if earlier.

          (d) Other Termination If the Optionee ceases to be a Director for any
reason other than the Optionee's death or termination for Cause or Disability,
any portion of this Stock Option outstanding on such date, to the extent
exercisable, may be exercised for a period of 90 days from the date of cessation
of services as a Director or 30 days after the end of the blackout period, if
later; provided, however, that this Stock Option shall nevertheless expire on
the Expiration Date, if earlier.

     4. Incorporation of Plan. Notwithstanding anything herein to the contrary,
this Stock Option shall be subject to and governed by all the terms and
conditions of the Plan, including the powers of the Administrator set forth in
Section 2(b) of the Plan. Capitalized terms

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in this Agreement shall have the meaning specified in the Plan, unless a
different meaning is specified herein.

     5. Transferability. This Agreement is personal to the Optionee, is
non-assignable and is not transferable in any manner, by operation of law or
otherwise, other than by will or the laws of descent and distribution; provided,
however, that with the consent of the Administrator, this Stock Option may be
transferred, without payment of consideration, to a member of the Optionee's
immediate family or to a trust or partnership whose beneficiaries are members of
the Optionee's immediate family.

     6. No Obligation to Continue as a Director. Neither the Plan nor this Stock
Option confers upon the Optionee any rights with respect to continuance as a
Director.

     7. Notices. Notices hereunder shall be mailed or delivered to the Company
at its principal place of business and shall be mailed or delivered to the
Optionee at the address on file with the Company or, in either case, at such
other address as one party may subsequently furnish to the other party in
writing.

                                        PROGRESS SOFTWARE CORPORATION

                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------

     The foregoing Agreement is hereby accepted and the terms and conditions
thereof hereby agreed to by the undersigned.

Dated:
       ------------------------------   ----------------------------------------
                                        Optionee's Signature

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