BORLAND SOFTWARE CORP
INCENTIVE COMPENSATION PLAN FOR SENIOR OFFICERS
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<TYPE>EX-10.2
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<DESCRIPTION>INCENTIVE COMPENSATION PLAN FOR SENIOR OFFICERS
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<TITLE>Incentive Compensation Plan for Senior Officers</TITLE>
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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>EXHIBIT 10.2 </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Senior Officers </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>BORLAND SOFTWARE CORPORATION </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B><U>INCENTIVE COMPENSATION PLAN</U> </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B><U>FOR SENIOR OFFICERS</U> </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>I.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>PURPOSE OF THE PLAN </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">This Incentive Compensation Plan is intended to promote the interests of Borland Software Corporation, a Delaware corporation (the
&#147;Corporation&#148;), by providing eligible individuals in the Corporation&#146;s employ with the opportunity to participate in a cash bonus program tied to the attainment of personal and corporate performance objectives which will provide them
with a meaningful incentive to remain in the Corporation&#146;s employ and contribute to the Corporation&#146;s financial success. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>II.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>DEFINITIONS </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">A. &#147;<U>Actual Bonus</U>&#148; shall mean the bonus actually earned by the Participant for one or more Fiscal Quarters in the Year and/or the full
Year, as applicable. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">B. &#147;<U>Base Salary</U>&#148; shall
mean the annual rate of base salary in effect for the Participant at the start of each Year in which he or she participates in the Plan. For an individual who first becomes a Participant after the start of the Year, his or her Base Salary shall be
the annual rate of base salary in effect for him or her on the date of entry into the Plan. In the event a Participant&#146;s Base Salary is increased or decreased during the Year, such adjusted salary shall be reflected in the Fiscal Quarter
following the Fiscal Quarter in which such adjustments took effect, for purposes of calculating the subsequent bonus entitlements of such Participant under the Plan. Base Salary shall be calculated before deduction of (i) any income or employment
tax withholdings, (ii) any contributions made by the Participant to any Code Section 401(k) salary deferral plan or Code Section 125 cafeteria benefit plan now or hereafter established by the Corporation, (iii) any contributions made by the
Participant to the Corporation&#146;s Employee Stock Purchase Plan (&#147;ESPP&#148;), and (iv) any reduction to the Participant&#146;s rate of base salary as a result of any salary reduction election for the Year made by such Participant pursuant
to the Salary Investment Option Grant Program in effect under the Corporation&#146;s 2002 Stock Incentive Plan. The following items of compensation shall <B>not</B> be included in Base Salary: (i) all overtime payments, bonuses, commissions,
profit-sharing distributions and other incentive-type payments, including cash bonuses received under this Plan, (ii) the matching contributions or deferred profit-sharing contributions made by the Corporation under any Code Section 401(a) or 401(k)
plan now or hereafter established and (iii) any and all other contributions (other than Internal Revenue Code Section 401(k) or Section 125 contributions) made on the Participant&#146;s behalf by the Corporation under any employee benefit or welfare
plan now or hereafter established. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">C. &#147;<U>Board</U>&#148;
shall mean the Corporation&#146;s Board of Directors. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">D.
&#147;<U>Code</U>&#148; shall mean the U.S. Internal Revenue Code of 1986, as amended from time to time. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>



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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">E. &#147;<U>Annual Bonus Component</U>&#148; shall mean the portion of the Target Bonus that is
contingent upon the Corporation&#146;s attainment of Corporate Performance Objectives for the Year. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">F. &#147;<U>Corporate Performance Objectives</U>&#148; shall mean the financial or other performance milestones the Corporation must attain as a condition
to the Participant&#146;s entitlement to his or her Target Bonus for the applicable period. Corporate Performance Objectives may be tied to operating income, revenue, earnings per share (on a GAAP or non-GAAP basis), net profit, return on equity,
return on sales, capital or assets and other milestones established from time to time by the Plan Administrator. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">G. &#147;<U>Disability</U>&#148; shall mean the inability of the Participant to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment expected to result in death or to continue for a period of twelve (12) consecutive months or more. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">H. &#147;<U>Earn-Out Date</U>&#148; shall mean, for the Quarterly Bonus Component (if applicable), the last business day of each Fiscal Quarter in the
Year and shall be the date on which the Participant&#146;s entitlement (if any) to a payout of his or her Actual Bonus for that Fiscal Quarter shall first accrue. &#147;<U>Earn-Out Date</U>&#148; shall mean, for the Annual Bonus Component, the last
business day of the Year and shall be the date on which the Participant&#146;s entitlement (if any) to a payout of his or her Actual Bonus for that Year shall first accrue. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">I. &#147;<U>Employee Status</U>&#148; shall mean the individual&#146;s performance of services for the Corporation or any
Participating Subsidiary as a regular full-time employee. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">J.
&#147;<U>Executive Officer</U>&#148; shall mean each executive officer of the Corporation who is subject to the reporting and short-swing liability provisions of Section 16 of the Securities Exchange Act of 1934, as amended. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">K. &#147;<U>Fiscal Quarter</U>&#148; shall mean each of the fiscal quarters
within the Year in question under the Plan. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">L.
&#147;<U>Participant</U>&#148; shall mean each Executive Officer of the Corporation, and each Senior Vice President of the Company who is not an Executive Officer of the Corporation, who participates in the Plan in accordance with the eligibility
provisions of Article IV. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">M. &#147;<U>Participating
Subsidiary</U>&#148; shall mean any Subsidiary which has, with the written authorization of the Board, extended the benefits of the Plan to its eligible Participants. The Participating Subsidiaries are listed in the attached <U>Schedule I</U>, which
may be amended from time to time by the Plan Administrator. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">N.
&#147;<U>Personal Performance Objectives</U>&#148; shall mean the performance goals that the Participant must personally attain or the performance milestones which his or her business unit must attain as a condition to the Participant&#146;s
entitlement to the Quarterly Bonus Component of his or her Target Bonus for the applicable period. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">O. &#147;<U>Plan</U>&#148; shall mean this Borland Software Corporation Incentive Compensation Plan, as amended from time to time. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">2 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">P. &#147;<U>Plan Administrator</U>&#148; shall mean the Compensation Committee of the Board in its
capacity as administrator of the Plan. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Q. &#147;<U>Quarterly
Bonus Component</U>&#148; shall mean the portion of the Target Bonus that is contingent upon (i) the Corporation&#146;s attainment of Corporate Performance Objectives in effect for the Fiscal Quarter, <U>and</U> (ii) the Participant&#146;s
attainment of the Personal Performance Objectives in effect for the relevant Fiscal Quarter. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">R. &#147;<U>Subsidiary</U>&#148; shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each such corporation (other than the last
corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">S. &#147;<U>Target Bonus</U>&#148; shall mean the bonus opportunity provided
each Participant for each Year the Plan remains in effect. The Target Bonus shall be an amount equal to the percentage of the Participant&#146;s Base Salary specified as a potential bonus in the Participant&#146;s employment agreement, or otherwise
specified by the Plan Administrator. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">T.
&#147;<U>Year</U>&#148; shall mean each fiscal year of the Corporation for which the Plan remains in effect. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>III.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>ADMINISTRATION OF THE PLAN </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">A. The Compensation Committee as Plan Administrator shall have full power and authority (subject to the provisions of the Plan) to establish such rules
and regulations as it may deem appropriate for proper plan administration and to make such determinations under, and issue such interpretations of, the Plan as it may deem advisable. Decisions of the Plan Administrator shall be final and binding on
all parties with an interest in the Plan. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">B. The Plan
Administrator shall, during the course of the Year, have the discretionary authority to adjust the established Corporate Performance Objectives for the Year and for a particular Fiscal Quarter should the Plan Administrator determine, in its sole
discretion, such adjustments are required in order to maintain the objectives and purposes of the Plan. For example, if the Plan Administrator determines that a merger or acquisition will affect the Corporation&#146;s ability to achieve the
Corporate Performance Objectives, the Plan Administrator shall have the discretionary authority to adjust the established Corporate Performance Objectives for the Year and for given Fiscal Quarters should the Plan Administrator determine, in its
sole discretion, such adjustments are reasonable in light of the altered financial situation. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT
FACE="Times New Roman" SIZE="2">C. The Plan Administrator shall have the sole and exclusive responsibility to administer all aspects of the Plan with respect to the Participants; provided, however, that the Plan Administrator may delegate any or all
of those responsibilities to the Chairman of the Compensation Committee, in which event such Chairman shall have the authority to administer the Plan with respect to the delegated responsibilities. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">3 </FONT></P>


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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>IV.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>ELIGIBILITY </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Each individual who is an Executive Officer or Senior Vice President of the Corporation at the start of the Year or who is hired in such capacity within
the first twenty-one (21) days of that Year shall qualify as a Participant for that Year. Any individual hired as an Executive Officer or Senior Vice President by the Corporation after the first twenty-one (21) days of the Year shall commence
participation in the Plan on the first day of the first Fiscal Quarter in that Year in which he or she is such an Executive Officer or Senior Vice President with at least twenty one (21) days of service in such capacity. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>V.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>DETERMINATION OF TARGET BONUS </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">A. The Target Bonus shall be an amount equal to the percentage of the Participant&#146;s Base Salary specified as a potential bonus in the
Participant&#146;s employment agreement with the Corporation, or otherwise specified by the Plan Administrator. The Plan Administrator may change a Participant&#146;s level of participation for a particular Year or Fiscal Quarter to take into
account any promotion, demotion or substantial change in job responsibilities. Any such change to a Participant&#146;s level placement shall, at the Plan Administrator&#146;s sole discretion, be made either retroactive to the start of the Fiscal
Quarter in which such change to Participant&#146;s status occurs or prospective to the start of the next Fiscal Quarter. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">B. The Target Bonus shall be comprised of the Quarterly Bonus Component (Article VI) and the Annual Bonus Component (Article VII). The percentages of the
Quarterly Bonus Component and the Annual Bonus Component shall be designated by the Plan Administrator. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>VI.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>DETERMINATION OF QUARTERLY BONUS COMPONENT </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">A. If and as designated by the Plan Administrator, a Participant may earn a percentage of his or her Target Bonus on a quarterly basis. The percentage of
the Target Bonus constituting the Quarterly Bonus Component shall be designated by the Plan Administrator. The Quarterly Performance Component shall be determined as follows: </FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(i) Within thirty (30) days after the start of the Fiscal Quarter, the Plan Administrator shall establish
the Corporate Performance Objectives for the given Fiscal Quarter, and the Participant shall (in conjunction with his or her manager, which may include the Plan Administrator as applicable) establish Personal Performance Objectives. The Corporation
must achieve the Corporate Performance Objectives for the Fiscal Quarter in order for any quarterly bonus to be earned for that Fiscal Quarter. If the Corporation fails to achieve the Corporate Performance Objectives for the Fiscal Quarter, the
Participant shall not be entitled to the Quarterly Bonus Component for such Fiscal Quarter, regardless of the level of the Participant&#146;s achievement of the Personal Performance Objectives. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(ii) At the end of a Fiscal Quarter, the manager for each
Participant shall assess the percentage attainment of the Personal Performance Objectives for the Fiscal Quarter. If the Corporation achieves its Corporate Performance Objectives for the Fiscal Quarter, then the Participant shall be entitled to a
bonus for the Fiscal Quarter equal to the percentage attainment </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">4 </FONT></P>


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<FONT FACE="Times New Roman" SIZE="2">of the Personal Performance Objectives multiplied by the Target Bonus constituting the Quarterly Bonus Component for that Fiscal Quarter. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">B. In the event that the Corporation fails to achieve the Corporate
Performance Objectives for any Fiscal Quarter (such that the Quarterly Bonus Component is not paid for that quarter), but achieves the Corporate Performance Objectives for the Year, then a Participant shall receive a &#147;make-up&#148; payment of
an amount equal to the missed Quarterly Bonus Component(s). The &#147;make-up&#148; payment shall be paid at the same time as the Annual Bonus Component payment is made. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>VII.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>DETERMINATION OF ANNUAL BONUS COMPONENT </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">If and as designated by the Plan Administrator, a Participant may earn a percentage of his or her Target Bonus on an Annual Basis. The percentage of the
Target Bonus constituting the Annual Bonus Component shall be designated by the Plan Administrator. The Annual Bonus Component shall only be earned if and to the extent the Corporate Performance Objectives for the Year are achieved by the
Corporation. The Actual Bonus earned by a Participant under the Plan for a particular Year shall be determined as follows:<B></B> </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">A. Within sixty (60) days after the start of the Year, the Plan Administrator shall establish Corporate Performance Objectives for the Year and the
formula for determining the percentage of the Target Bonus attainable based on achievement of the Corporation Performance Objectives for the Year. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">B. Once the Corporate Performance Objectives for the Year are established, the Participant shall be eligible for the Annual Bonus Component if, and to the
extent that, a particular Corporate Performance Objective for the Year is achieved. If the minimum Corporate Performance Objective for the Year as established by the Plan Administrator is not achieved, the Participant shall not be entitled to any
portion of the Annual Bonus Component of the Target Bonus. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">C.
If the individual becomes a Participant after the start of the Year, then the dollar amount of his or her Annual Bonus Component for that Year shall be pro-rated by multiplying such dollar amount by a fraction, the numerator of which is the number
of calendar months of Employee Status completed by the Participant individual in such Year (rounded to the nearest whole month), and the denominator is twelve (12). </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>VIII.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>ELIGIBILITY FOR ACTUAL BONUS AND PAYOUT </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">A. A Participant shall not earn or otherwise become entitled to any Actual Bonus for a particular Fiscal Quarter or Year unless such Participant continues
in Employee Status through the Earn-Out Date for that Fiscal Quarter or Year. However, should a Participant cease Employee Status before the Earn-Out Date in a particular Fiscal Quarter or Year by reason of death or Disability, then the Participant
(or his or her estate) shall accordingly, receive a dollar amount, payable in accordance with the payment schedule set forth in Paragraph B below, equal to (i) the portion of the Actual Bonus (if any) such Participant would have otherwise earned for
that Fiscal Quarter based on his or her personal performance for the portion of the Fiscal Quarter </FONT>
</P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">5 </FONT></P>


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<FONT FACE="Times New Roman" SIZE="2">preceding his or her death or Disability, and (ii) a portion of the Actual Bonus he or she would have otherwise earned for such Year on the basis of the
actual percentage attainment of the Corporate Performance Objectives for that Year, prorated from the beginning of that particular Year to the date in which the Participant ceases Employee Status. </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">B. The Actual Bonus Payment to which each Participant becomes entitled under
the Plan shall be paid as follows: </FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(i) The
Quarterly Bonus Component (if any) shall be paid within forty-five (45) days after the close of the Fiscal Quarter for which that portion of the Actual Bonus is earned. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">(ii) The Annual Bonus Component (if any) shall be paid in one payment within forty-five (45) days after the
close of the Year for which that portion of the Actual Bonus is earned. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2">Each payment shall be subject to the collection by the Corporation (or the Participating Subsidiary) of all applicable federal, state and local income and employment taxes, and the Participant shall only be paid the amount which remains
after the collection of those taxes. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>IX.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>PLAN DURATION AND AMENDMENT </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Plan shall be in effect for the 2004 Year and for each subsequent fiscal year of the Corporation until the Plan Administrator by appropriate
resolution terminates the Plan, or adopts a new Plan. No Participant shall accrue any rights to receive an Actual Bonus for a particular Fiscal Quarter or Year for which the Plan is outstanding until the Earn-Out Date for that Fiscal Quarter or
Year. Accordingly, the Plan Administrator in its sole discretion may amend or terminate the Plan at any time prior to the Earn-Out Date in effect for a particular Fiscal Quarter or Year, and any such amendment or termination shall be applicable for
that Fiscal Quarter or Year and each subsequent Fiscal Quarter in that Year. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>X.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>NON-TRANSFERABILITY </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The right to receive an Actual Bonus under the Plan may not be transferred, assigned, pledged or encumbered. Should a Participant die before receipt of
any Actual Bonus to which he or she becomes entitled under the Plan, then that bonus shall be paid to the Participant&#146;s estate. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>XI.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>OTHER INCENTIVE PLANS </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The Plan constitutes the full and entire understanding and agreement between the Corporation and each of the Participants with respect to the subject
matter hereof, and it supersedes all prior or contemporaneous agreements and understandings, whether oral or written, relating to the subject matter of the Plan. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">6 </FONT></P>


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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>XII.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>COUNTERPARTS </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">This Plan and acknowledgements thereof may be executed in any number of counterparts, each of which shall be an original, but all of which together shall
constitute one instrument. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>XIII.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>NO EMPLOYMENT RIGHTS </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">Nothing in the Plan shall confer upon a Participant any right to continue in Executive or Employee Status for any period of specific duration or interfere
with or otherwise restrict in any way the rights of the Corporation or any Participating Subsidiary or of the Participant, which rights are hereby expressly reserved by each, to terminate the Executive or Employee Status of the Participant at any
time for any reason, with or without cause. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
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<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT FACE="Times New Roman" SIZE="2"><B>XIV.</B></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT FACE="Times New Roman" SIZE="2"><B>GOVERNING LAW </B></FONT></TD></TR></TABLE> <P STYLE="margin-top:0px;margin-bottom:-6px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman" SIZE="2">The provisions of the Plan shall be governed by and construed in accordance with the laws of the State of California without resort to the
conflict-of-laws rules thereof or of any other jurisdiction. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT FACE="Times New Roman"
SIZE="2"><B>IN WITNESS WHEREOF, </B>Borland Software Corporation has caused this instrument to be executed on by its behalf by it duly-authorized officer as of the <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> day
of <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2004. </FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P><DIV ALIGN="right">
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<TD VALIGN="top" COLSPAN="3"><FONT FACE="Times New Roman" SIZE="2"><B>BORLAND SOFTWARE CORPORATION</B></FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD></TR>
<TR>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><HR SIZE="1" NOSHADE COLOR="#000000"></TD></TR>
<TR>
<TD VALIGN="top"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Name: Timothy J. Stevens</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">Title: &nbsp;&nbsp;Senior Vice President and General</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:1px; margin-left:1.00em; text-indent:-1.00em"><FONT FACE="Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Counsel</FONT></P></TD></TR>
</TABLE></DIV> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2"><B>AGREED AND ACCEPTED</B>
</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT FACE="Times New Roman" SIZE="2">________________________________ </FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">7 </FONT></P>


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 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Senior Officers </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT
SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>SCHEDULE I </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>LIST OF PARTICIPATING SUBSIDIARIES </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P
STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>None </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P>


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