EXHIBIT 10.11
BMC SOFTWARE, INC.
LONG-TERM INCENTIVE PERFORMANCE AWARD PROGRAM
I. PURPOSE OF PROGRAM
This BMC Software, Inc. Long-Term Incentive Performance Award Program
(the "Program") has been adopted by the Compensation Committee of the Board of
Directors of BMC Software, Inc., a Delaware corporation (the "Company"), to
implement in part the Performance Award provisions of the BMC Software, Inc.
2002 Employee Incentive Plan (as amended from time to time, the "Employee
Incentive Plan"). The Program is intended to provide a method for attracting,
motivating, and retaining key employees to assist in the development and growth
of the Company and its Affiliates. The Program and Awards hereunder shall be
subject to the terms of the Employee Incentive Plan, including the limitations
on the maximum value of Awards contained therein.
II. DEFINITIONS AND CONSTRUCTION
2.1 DEFINITIONS. Where the following words and phrases are used in the
Program, they shall have the respective meanings set forth below, unless the
context clearly indicates to the contrary:
(a) "Affiliate" means any corporation, partnership, limited liability
company or partnership, association, trust or other organization which, directly
or indirectly, controls, is controlled by, or is under common control with, the
Company.
(b) "Award" means, with respect to each Participant for a Performance
Period, such Participant's opportunity to earn a Payment Amount for such
Performance Period upon the satisfaction of the terms and conditions of the
Program. Awards hereunder constitute Performance Awards (as such term is defined
in the Employee Incentive Plan) under the Employee Incentive Plan.
(c) "Award Notice" means a written notice issued by the Company to a
Participant evidencing such Participant's receipt of an Award with respect to a
Performance Period.
(d) "Base Bonus Amount" means, with respect to each Participant for a
Performance Period, a target bonus amount assigned to such Participant by the
Committee for such Performance Period.
(e) "Board" means the Board of Directors of the Company.
(f) "Change in Control" means (i) the acquisition by any person or
entity (including a "group" as contemplated by Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended) of at least 50% of the Company's
outstanding voting stock, (ii) an unapproved change in the majority of the
Board, (iii) a merger, consolidation, or similar corporate transaction in which
the Company's shareholders immediately prior to the transaction do not own more
than
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60% of the voting stock of the surviving corporation in the transaction, or (iv)
shareholder approval of the Company's liquidation, dissolution, or sale of
substantially all of its assets.
(g) "Code" means the Internal Revenue Code of 1986, as amended.
(h) "Committee" means a committee of the Board comprised solely of two
or more outside directors (within the meaning of the term "outside directors" as
used in section 162(m) of the Code and applicable interpretative authority
thereunder and within the meaning of the term "Non-Employee Director" as defined
in Rule 16b-3). Such committee shall be the Compensation Committee of the Board
unless and until the Board designates another committee of the Board to serve as
the Committee.
(i) "Company" means BMC Software, Inc., a Delaware corporation.
(j) "Disability" or "Disabled" means, with respect to a Participant,
such Participant's disability entitling him or her to benefits under the
Company's group long-term disability plan.
(k) "Effective Date" means April 1, 2003.
(l) "Eligible Employee" means any individual who is an employee of the
Company or an Affiliate.
(m) "Employee Incentive Plan" means the BMC Software, Inc. 2002
Employee Incentive Plan, as amended from time to time.
(n) "Industry Group" means, with respect to each Performance Period,
the companies determined in accordance with the provisions of Article V for such
Performance Period.
(o) "Market Value per Share" means, with respect to each company in the
Industry Group and as of any specified date, the closing sales price of such
company's common stock on that date (or, if there are no sales on that date, the
last preceding date on which there was a sale) in the principal securities
market in which such common stock is then traded.
(p) "Participant" means an Eligible Employee who has received an Award
under the Program with respect to a Performance Period pursuant to Section 4.1.
(q) "Participation Fraction" means, with respect to each Participant
for a Performance Period:
(i) subject to clause (iii) below, if the Participant has been
continuously employed by the Company from the effective date of
his participation in the Program with respect to such Performance
Period through the last day of such Performance Period, a
fraction, the numerator of which is the number of days in the
period beginning on the effective date of the Participant's
participation in the Program with respect to such Performance
Period and ending on the last day of such Performance Period (but
excluding any days in such period during which the Participant is
on a voluntary personal leave of absence), and the denominator of
which is the number of days in such Performance Period;
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(ii) subject to clause (iii) below, if the Participant's
employment with the Company terminates during such Performance
Period by reason of death or Disability, a fraction, the
numerator of which is the number of days in the period beginning
on the effective date of the Participant's participation in the
Program with respect to such Performance Period and ending on the
date of such Participant's termination of employment (but
excluding any days in such period during which the Participant is
on a voluntary personal leave of absence), and the denominator of
which is the number of days in such Performance Period; and
(iii) if a Change in Control occurs during such Performance
Period and if the Participant has been continuously employed by
the Company from the effective date of his participation in the
Program with respect to such Performance Period through the day
immediately preceding the date upon which a Change in Control
occurs (or, if earlier, the date his employment with the Company
terminates by reason of death or Disability), a fraction, the
numerator of which is the number of days in the period beginning
on the effective date of the Participant's participation in the
Program with respect to such Performance Period and ending on the
day immediately preceding the date upon which a Change in Control
occurs (or, if earlier, the date his employment with the Company
terminates by reason of death or Disability) (but excluding any
days in such period during which the Participant is on a
voluntary personal leave of absence), and the denominator of
which is 1095 (provided, however, that the denominator shall be
549 with respect to the 18-month Performance Period commencing on
the Effective Date).
(r) "Payment Amount" means, with respect to each Participant for a
Performance Period, an amount equal to (A) such Participant's Base Bonus Amount
for such Performance Period multiplied by (B) the Payout Percentage for such
Performance Period multiplied by (C) such Participant's Participation Fraction
for such Performance Period.
(s) "Payout Percentage" means, with respect to a Performance Period, a
percentage determined in accordance with the following schedule based on the
percentile ranking of the Company for such Performance Period when comparing the
Total Shareholder Return for such Performance Period for all companies
comprising the Industry Group as of the last day of such Performance Period:
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Company's Percentile Ranking for the Payout Percentage for
Performance Period the Performance Period
------------------ ----------------------
80th Percentile or Above 150%
70th Percentile 100%
65th Percentile 75%
50th Percentile 50%
35th Percentile 25%
30th Percentile or Below 0%
Notwithstanding the above schedule, if the percentile ranking actually achieved
for the Performance Period exceeds a particular threshold set forth in the left
column of the above schedule for the Performance Period but is less than the
next highest threshold, then the Payout Percentage for the Performance Period
shall be an interpolated percentage that is between the relevant percentages set
forth in the above schedule. To illustrate, if the Company ranks in the 75th
percentile for a Performance Period, then the Payout Percentage would equal 125%
for such Performance Period.
(t) "Performance Period" means (i) the 18-month period commencing on
the Effective Date and (ii) each three-year period commencing on the Effective
Date and each anniversary of the Effective Date. Notwithstanding the foregoing,
(A) no new Performance Period shall commence on or after the date upon which a
Change in Control occurs, unless otherwise determined by the Committee, and (B)
each Performance Period that began prior to the date of a Change in Control and
which has not ended as of such date shall be deemed to have ended as of such
date as provided in Section 6.3.
(u) "Program" means this BMC Software, Inc. Long-Term Incentive
Performance Award Program, as amended from time to time.
(v) "Total Shareholder Return" means, with respect to each company in
the Industry Group and each Performance Period, the rate of return over the
Performance Period for such company from changes in the price of such company's
common stock and any dividends and other distributions paid by such company with
respect to its common stock during the Performance Period, calculated by (i)
assuming one share of such company's common stock is purchased on the first day
of the Performance Period at the Market Value per Share of such stock on such
date, (ii) adding the aggregate number of shares, if any, of such company's
common stock that would be accumulated over the Performance Period due to stock
dividends or stock splits to such initial share of stock, (iii) multiplying the
number of shares calculated in clause (ii) by the Market Value per Share of such
stock on the last day of the Performance Period and adding to such value the
aggregate amount of all, if any, cash dividends paid on a single share of stock
during the Performance Period (with the Committee adjusting as appropriate to
reflect any
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changes in capital stock of such company (e.g. stock splits, subdivision or
consolidation of shares) that occurs during the Performance Period), and (iv)
determining the rate of return over the Performance Period between the Market
Value per Share set forth in clause (i) and the value resulting from the
computation in clause (iii).
Example 1: Assume that Company X closes at $1 per share on
the first day of the Performance Period. During the Performance
Period, Company X declares two cash dividends of $.10 per share and
$.05 per share. On the last day of the Performance Period, Company X
closes at $2 per share. To determine the rate of return during the
Performance Period, compare $2.15 ($2 + $.10 + $.05) to $1 which
results in a rate of return of 115%.
Example 2: Assume Company Y closes at $1 per share on the
first day of the Performance Period. During the Performance Period,
Company Y declares a two-for-one stock split and affects the stock
split by issuing one new share for each outstanding share. Later
during the Performance Period, Company Y declares a $.15 per share
cash dividend. On the last day of the Performance Period, Company Y
closes at $1 per share. To determine the rate of return during the
Performance Period, first determine the ending Market Value per Share
by multiplying 2 shares by $1 and then adding the amount of the
dividend ($.15) to get a resulting value of $2.15. Then, compare
$2.15 to $1 which results in a rate of return of 115%.
2.2 NUMBER, GENDER, HEADINGS, AND PERIODS OF TIME. Wherever appropriate
herein, words used in the singular shall be considered to include the plural,
and words used in the plural shall be considered to include the singular. The
masculine gender, where appearing in the Program, shall be deemed to include the
feminine gender. The headings of Articles, Sections, and Paragraphs herein are
included solely for convenience. If there is any conflict between such headings
and the text of the Program, the text shall control. All references to Articles,
Sections, and Paragraphs are to this Program unless otherwise indicated. Any
reference in the Program to a period or number of days, weeks, months, or years
shall mean, respectively, calendar days, calendar weeks, calendar months, or
calendar years unless expressly provided otherwise.
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III. ADMINISTRATION
3.1 ADMINISTRATION BY THE COMMITTEE. The Program shall be administered
by the Committee.
3.2 POWERS OF THE COMMITTEE. The Committee shall supervise the
administration and enforcement of the Program according to the terms and
provisions hereof and shall have the sole discretionary authority and all of the
powers necessary to accomplish these purposes. The Committee shall have all of
the powers specified for it under the Program, including, without limitation,
the power, right, or authority: (a) to designate an Eligible Employee as a
Participant with respect to a Performance Period in accordance with Section 4.1,
(b) from time to time to establish rules and procedures for the administration
of the Program, which are not inconsistent with the provisions of the Program or
the Employee Incentive Plan, and any such rules and procedures shall be
effective as if included in the Program, (c) to construe in its discretion all
terms, provisions, conditions, and limitations of the Program and any Award, (d)
to correct any defect or to supply any omission or to reconcile any
inconsistency that may appear in the Program in such manner and to such extent
as the Committee shall deem appropriate, and (e) to make all other
determinations necessary or advisable for the administration of the Program. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in the Program or in any Award or Award Notice in the manner and
to the extent it shall deem expedient to carry it into effect.
3.3 COMMITTEE DECISIONS CONCLUSIVE; STANDARD OF CARE. The Committee
shall, in its sole discretion exercised in good faith (which, for purposes of
this Section 3.3, shall mean the application of reasonable business judgment),
make all decisions and determinations and take all actions necessary in
connection with the administration of the Program. All such decisions,
determinations, and actions by the Committee shall be final, binding, and
conclusive upon all persons. The Committee shall not be liable for any action or
determination taken or made in good faith or upon reliance in good faith on the
records of the Company or information presented to the Committee by the
Company's officers, employees, or other persons (including the Company's outside
auditors) as to matters the Committee reasonably believes are within such other
person's professional or expert competence. If a Participant disagrees with any
decision, determination, or action made or taken by the Committee, then the
dispute will be limited to whether the Committee has satisfied its duty to make
such decision or determination or take such action in good faith. No liability
whatsoever shall attach to or be incurred by any past, present or future
stockholders, officers or directors, as such, of the Company or any of its
Affiliates, under or by reason of the Program or the administration thereof, and
each Participant, in consideration of receiving benefits and participating
hereunder, expressly waives and releases any and all claims relating to any such
liability.
IV. PARTICIPATION AND AWARD NOTICES
4.1 PARTICIPATION. The Committee shall, from time to time, in its sole
discretion designate the Eligible Employees who shall become Participants in the
Program with respect to a Performance Period; provided, however, that any such
designation with respect to a Performance Period must be made on or before the
90th day of such Performance Period. The Committee shall specify the effective
date of participation in the Program for each individual who becomes a
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Participant pursuant to the preceding sentence. In addition, the Committee shall
designate the Base Bonus Amount that shall apply to each Participant with
respect to his participation in the Program.
4.2 AWARD NOTICES. The Company shall provide an Award Notice to each
Eligible Employee who becomes a Participant under the Program as soon as
administratively feasible after such Eligible Employee becomes a Participant. An
Award Notice may specify one or more Performance Periods with respect to which
the Participant may participate in the Program. Further, an Award Notice may
provide that the Participant shall continue to participate in the Program for
successive Performance Periods until notified otherwise by the Committee or, if
earlier, the date upon which he terminates employment with the Company. An Award
Notice shall specify the Participant's Base Bonus Amount, which may be changed
on a prospective basis by the Committee upon written notice to the Participant
at any time prior to the commencement of a Performance Period.
V. INDUSTRY GROUP
5.1 INITIAL DESIGNATION. The Industry Group shall consist of the
Company and such other companies as may be designated by the Committee on or
before the date that is 90 days after the Effective Date; provided, however,
that (a) on or before the date that is 90 days after the commencement of each
Performance Period that begins after the Effective Date, the Committee may in
its discretion add any company to, or remove any company (other than the
Company) from, the Industry Group for such Performance Period and (b) the
Industry Group for each Performance Period shall be subject to adjustment as
provided in Section 5.2.
5.2 ADJUSTMENT TO THE INDUSTRY GROUP DURING A PERFORMANCE PERIOD.
Except as provided in clause (a) of the proviso to Section 5.1, no company shall
be added to, or removed from, the Industry Group for a Performance Period during
such period; provided, however, that a company (other than the Company) shall be
removed from the Industry Group for a Performance Period if (a) during such
period, (i) the common stock of such company ceases to be publicly traded on an
established securities market, (ii) such company ceases to maintain publicly
available statements of operations prepared in accordance with United States
generally accepted accounting principles, consistently applied, (iii) such
company is not the surviving entity in any merger, consolidation, or other
reorganization (or survives only as a subsidiary of an entity other than a
previously wholly owned subsidiary of such company), (iv) such company sells,
leases, or exchanges all or substantially all of its assets to any other person
or entity (other than a previously wholly owned subsidiary of such company), or
(v) such company is dissolved and liquidated, or (b) more than 33% of such
company's revenues (determined on a consolidated basis based on the regularly
prepared and publicly available statements of operations of such company
prepared in accordance with United States generally accepted accounting
principles, consistently applied) for any fiscal year of such company that ends
during such Performance Period are attributable to the operation of businesses
other than such company's computer software business.
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VI. AWARD PAYMENTS
6.1 DETERMINATIONS AND CERTIFICATION BY THE COMMITTEE. As soon as
administratively feasible after the end of each Performance Period, the
Committee shall determine (a) with respect to each company comprising the
Industry Group as of the last day of such Performance Period, the Total
Shareholder Return for such company for such Performance Period, (b) the
percentile ranking of the Company for such Performance Period when comparing the
Total Shareholder Return for such Performance Period for all companies
comprising the Industry Group as of the last day of such Performance Period, (c)
the Payout Percentage for such Performance Period, and (d) the Payment Amount,
if any, with respect to such Performance Period for each Participant. The
Committee's determinations pursuant to the preceding provisions of this Section
6.1 for each Performance Period and any other material terms relating to the
payment of an Award shall be certified by the Committee in writing and delivered
to the Secretary of the Company no later than six weeks after the last day of
such Performance Period. For purposes of the preceding sentence, approved
minutes of the Committee meeting in which the certification is made shall be
treated as a written certification.
6.2 ELIGIBILITY FOR PAYMENT OF AWARDS. Upon the Committee's written
certification in accordance with Section 6.1 that a Payment Amount for a
Performance Period is due under the Program, each Participant who has received
an Award with respect to such Performance Period and who has remained
continuously employed by the Company or an Affiliate (or was on a voluntary
personal leave of absence approved by the Company) from the effective date of
such Participant's participation in the Program with respect to such Performance
Period until the last day of such Performance Period shall be entitled to the
Payment Amount applicable to such Participant's Award for such Performance
Period. Further, if a Participant received an Award with respect to such
Performance Period and his employment with the Company terminated during such
Performance Period by reason of death or Disability, then such Participant shall
be entitled to the Payment Amount applicable to such Participant's Award for
such Performance Period. Except as provided in the preceding sentence or in
Section 6.3, if a Participant's employment with the Company terminates for any
reason whatsoever prior to the last day of a Performance Period, then such
Participant shall not be entitled to receive any payment under the Program with
respect to his or her Award for such Performance Period. Without limiting the
scope of the preceding sentence, if a Participant's employment with the Company
terminates during a Performance Period by reason of death or Disability, then
such Participant shall not be entitled to any payment under the Program with
respect to any Performance Period that begins after the date of such
termination. Payment of the amount to which a Participant becomes entitled
pursuant to this Section 6.2 shall be made by the Company as soon as
administratively feasible after the Committee's written certification that a
Payment Amount is due under the Program.
6.3 CHANGE IN CONTROL. Upon the occurrence of a Change in Control, (a)
each Performance Period that began prior to the date of such Change in Control
and which has not ended as of such date shall be deemed to have ended on the
date of such Change in Control, (b) the provisions of Sections 6.1 and 6.2 shall
cease to apply with respect to each such Performance Period, and (c) the Company
shall be required to pay a Payment Amount (as determined below) for each such
Performance Period to each Participant who is employed by the Company on the day
immediately prior to the Change in Control (or who is on a voluntary
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personal leave of absence at such time that has been approved by the Company or
who has terminated employment with the Company during such Performance Period
and prior to such Change in Control by reason of death or Disability). For
purposes of this Section 6.3, the Payment Amount with respect to each such
Performance Period for each Participant who is entitled to a payment pursuant to
this Section 6.3 shall be calculated in the same manner as provided in Section
6.1 except that (i) each such Performance Period shall be deemed to have ended
on the date of such Change in Control and (ii) the Participation Fraction for
each eligible Participant for each such Performance Period shall be determined
in accordance with Section 2.1(q)(iii). The Payment Amount determined under this
Section 6.3 for each such Performance Period shall be paid to each eligible
Participant as soon as administratively feasible after the date upon which the
Change in Control occurs.
6.4 FORM OF PAYMENT OF AWARDS. All payments to be made under the
Program to a Participant with respect to an Award for a Performance Period shall
be paid in a single lump sum cash payment.
VII. TERMINATION AND AMENDMENT OF PROGRAM
The Committee may amend the Program at any time and from time to time;
provided, however, that the Program may not be amended with respect to a
Performance Period after one-third of such Performance Period has transpired in
a manner that would impair the rights of any Participant with respect to any
outstanding Award pertaining to such Performance Period without the consent of
such Participant. The Committee may at any time prior to the date upon which
one-third of a Performance Period has transpired terminate the Program (in its
entirety or as it applies to one or more specified Affiliates) with respect to
such Performance Period and subsequent Performance Periods. Notwithstanding the
foregoing, the Program may not be amended or terminated in contemplation of or
in connection with a Change in Control, nor may any Participant's participation
herein be terminated in contemplation of or in connection with a Change in
Control, unless adequate and effective provision for the making of all payments
otherwise payable pursuant to Section 6.3 of the Program with respect to such
Change in Control shall be made in connection with any such amendment or
termination. The Committee shall remain in existence after the termination of
the Program for the period determined necessary by the Committee to facilitate
the termination of the Program, and all provisions of the Program that are
necessary, in the opinion of the Committee, for equitable operation of the
Program during such period shall remain in force.
VIII. MISCELLANEOUS PROVISIONS
8.1 NO EFFECT ON EMPLOYMENT RELATIONSHIP. For all purposes of the
Program, a Participant shall be considered to be in the employment of the
Company as long as he remains employed on a full-time basis by the Company or
any Affiliate. Without limiting the scope of the preceding sentence, it is
expressly provided that a Participant shall be considered to have terminated
employment with the Company at the time of the termination of the "Affiliate"
status under the Program of the entity or other organization that employs the
Participant. Nothing in the adoption of the Program, the grant of Awards, or the
payment of amounts under the Program shall confer on any person the right to
continued employment by the Company or any Affiliate or affect in any way the
right of the Company (or an Affiliate, if applicable) to terminate such
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employment at any time. Unless otherwise provided in a written employment
agreement, the employment of each Participant shall be on an at-will basis, and
the employment relationship may be terminated at any time by either the
Participant or the Participant's employer for any reason whatsoever, with or
without cause. Any question as to whether and when there has been a termination
of a Participant's employment for purposes of the Program, and the reason for
such termination, shall be determined solely by and in the discretion of the
Committee, and its determination shall be final, binding, and conclusive on all
parties.
8.2 PROHIBITION AGAINST ASSIGNMENT OR ENCUMBRANCE. No Award or other
right, title, interest, or benefit hereunder shall ever be assignable or
transferable, or liable for, or charged with any of the torts or obligations of
a Participant or any person claiming under a Participant, or be subject to
seizure by any creditor of a Participant or any person claiming under a
Participant. No Participant or any person claiming under a Participant shall
have the power to anticipate or dispose of any Award or other right, title,
interest, or benefit hereunder in any manner until the same shall have actually
been distributed free and clear of the terms of the Program. Payments with
respect to an Award shall be payable only to the Participant (or (a) in the
event of a Disability that renders such Participant incapable of conducting his
or her own affairs, any payment due under the Program to such Participant shall
be made to his or her duly appointed legal representative and (b) in the event
of the death of a Participant, any payment due under the Program to such
Participant shall be made to his or her estate). The provisions of the Program
shall be binding on all successors and permitted assigns of a Participant,
including without limitation the estate of such Participant and the executor,
administrator or trustee of such estate, or any receiver or trustee in
bankruptcy or representative of the Participant's creditors.
8.3 UNFUNDED, UNSECURED PROGRAM. The Program shall constitute an
unfunded, unsecured obligation of the Company to make payments of incentive
compensation to certain individuals from its general assets in accordance with
the Program. Each Award granted under the Program merely constitutes a mechanism
for measuring such incentive compensation and does not constitute a property
right or interest in the Company, any Affiliate, or any of their assets. Neither
the establishment of the Program, the granting of Awards, nor any other action
taken in connection with the Program shall be deemed to create an escrow or
trust fund of any kind.
8.4 NO RIGHTS OF PARTICIPANT. No Participant shall have any security or
other interest in any assets of the Company or any Affiliate or in the
securities issued by the Company or any Affiliate as a result of participation
in the Program. Participants and all persons claiming under Participants shall
rely solely on the unsecured promise of the Company set forth herein, and
nothing in the Program, an Award or an Award Notice shall be construed to give a
Participant or anyone claiming under a Participant any right, title, interest,
or claim in or to any specific asset, fund, entity, reserve, account, or
property of any kind whatsoever owned by the Company or any Affiliate or in
which the Company or any Affiliate may have an interest now or in the future;
but each Participant shall have the right to enforce any claim hereunder in the
same manner as a general creditor. Neither the establishment of the Program nor
participation hereunder shall create any right in any Participant to make any
decision, or provide input with respect to any decision, relating to the
business of the Company or any Affiliate.
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8.5 TAX WITHHOLDING. The Company and the Affiliates shall deduct and
withhold, or cause to be withheld, from a Participant's payment made under the
Program, or from any other payment to such Participant, an amount necessary to
satisfy any and all tax withholding obligations arising under applicable local,
state, federal, or foreign laws associated with such payment. The Company and
the Affiliates may take any other action as may in their opinion be necessary to
satisfy all obligations for the payment and withholding of such taxes.
8.6 NO EFFECT ON OTHER COMPENSATION ARRANGEMENTS. Nothing contained in
the Program or any Participant's Award or Award Notice shall prevent the Company
or any Affiliate from adopting or continuing in effect other or additional
compensation arrangements affecting any Participant. Nothing in the Program
shall be construed to affect the provisions of any other compensation plan or
program maintained by the Company or any Affiliate.
8.7 AFFILIATES. The Company may require any Affiliate employing a
Participant to assume and guarantee the Company's obligations hereunder to such
Participant, either at all times or solely in the event that such Affiliate
ceases to be an Affiliate.
8.8 GOVERNING LAW. The Program shall be construed in accordance with
the laws of the State of Texas.
IN WITNESS WHEREOF, the undersigned officer of the Company acting
pursuant to authority granted to him by the Committee has executed this
instrument as of the 12th day of June, 2003, effective as of the Effective Date.
BMC SOFTWARE, INC.
By:
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Name: Jerome Adams
Title: Senior Vice President of Administration
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