Interim CEO Employment Agreement - William T. Coleman

EXHIBIT 10.3





BEA SYSTEMS, INC.

EMPLOYMENT AGREEMENT





THIS EMPLOYMENT AGREEMENT, is entered into as of September 28, 1995, between BEA Systems, Inc., a Delaware corporation (the "Company"), and William T. Coleman III ("Employee").



R E C I T A L S

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A. Employee has developed a business plan for the acquisition and operation of certain businesses in the transaction processing industry and Warburg, Pincus Ventures, L.P. ("Warburg") has agreed to invest up to a maximum of $50,000,000 in the Company to provide financing for the implementation of Employee's business plan pursuant to the terms of that certain Stock Purchase Agreement dated September 28, 1995 and that certain Adjustment Agreement dated September 28, 1995 among Warburg, the Company, Employee and certain other stockholders of the Company.



B. Immediately prior to the date of this Agreement, Employee owned 600,000 shares of the Common Stock of the Company and in connection with the investment by Warburg as contemplated by Recital A above, Employee has entered into that certain Restricted Stock Purchase Agreement dated September 28, 1995 (the "Stock Purchase Agreement") for the purchase of 653,414 additional shares of Common Stock in the Company.



C. Company desires to obtain the 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 employment from the Company upon the following terms and conditions.



A G R E E M E N T

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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) September 28, 1999; or (ii) the date this Agreement is terminated in accordance with Section 3 below.









(b) President and Chief Executive 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. 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 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 One Hundred Eighty Thousand Dollars ($180,000.00), 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 may become eligible to receive options under the Company's 1995 Flexible Stock Incentive Plan and such other option plans as the Company may from time to time adopt, as approved by the Board or a Committee thereof.



(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.



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. For the purposes of determining the level of bonus compensation payable pursuant to said Section 2(c), Employee's beneficiaries or estate, as appropriate, shall be eligible to receive bonus payments in accordance with Section 2(c) based upon the average of the bonuses paid to Employee for the two (2) years prior to termination; PROVIDED, THAT if Employee's Period of Employment terminates prior to September 28, 1997, then such bonus payments 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 and without notice 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), ...