Sample Business Contracts

Severance Agreement - CyberMedia Inc. and Charles M. Valentine

                                CYBERMEDIA, INC.

                               SEVERANCE AGREEMENT

          This Severance Agreement (the "Agreement") is made and entered into
effective as of September 27, 1996 (the "Effective Date"), by and between
Charles M. Valentine (the "Employee") and CyberMedia, Inc., a California
corporation (the "Company").

                                 R E C I T A L S

          A. It is expected that the Company from time to time will consider the
possibility of an acquisition by another company or other change of control. The
Board of Directors of the Company (the "Board") recognizes that such
consideration can be a distraction to the Employee and can cause the Employee to
consider alternative employment opportunities.

          B. The Board believes that it is in the best interests of the Company
and its shareholders to provide the Employee with an incentive to continue his
employment and to maximize the value of the Company upon a Change of Control for
the benefit of its shareholders.

          C. The Board believes that it is imperative to provide the Employee
with certain severance benefits upon the Employee's termination of employment
following a Change of Control and thereby provide the Employee with enhanced
financial security and sufficient encouragement to remain with the Company
notwithstanding the possibility of a Change of Control.

          D. Certain capitalized terms used in the Agreement are defined in
Section 7 below.


          In consideration of the mutual covenants herein contained, and in
consideration of the continuing employment of Employee by the Company, the
parties agree as follows:

          1.      Duties and Scope of Employment.

                  (a) Position. The Company shall employ the Employee in the
position of Vice President, Sales with such duties, responsibilities and
compensation as in effect as of the Effective Date; provided, however, that the
Board shall have the right, prior to the occurrence of a Change of Control, to
revise such responsibilities and compensation from time to time as the Board may
deem necessary or appropriate.

                  (b) Obligations. The Employee shall devote his full business
efforts and time to the Company and its subsidiaries. The foregoing, however,
shall not preclude the Employee from engaging in such activities and services as
do not interfere or conflict with his responsibilities to the Company.


<PAGE>   2

          2. At-Will Employment. The Company and the Employee acknowledge that
the Employee's employment is and shall continue to be at-will, as defined under
applicable law. If the Employee's employment terminates for any reason, the
Employee shall not be entitled to any payments, benefits, damages, awards or
compensation other than as provided by this Agreement, or as may otherwise be
available in accordance with the Company's established employee plans and
practices or other agreements with the Company at the time of termination. This
Agreement shall remain in effect for forty-eight (48) months from the Effective
Date (unless extended for an additional period or periods by the Company and the
Employee by mutual written agreement), provided that, in the event of a Change
of Control of the Company prior to such termination, the term of this Agreement
shall be extended so as to remain in effect for six months after such Change of
Control, subject in either case to earlier termination as of the date that all
obligations of the parties hereunder have been satisfied. A termination of this
Agreement pursuant to the preceding sentence shall be effective for all
purposes, except that such termination shall not affect the payment or provision
of compensation or benefits on account of a termination of employment occurring
prior to the termination of this Agreement.

          3.      Compensation and Benefits.

                  (a) Base Compensation. The Company shall pay the Employee as
compensation for services a base salary at the annualized rate agreed upon by
the Company and the Employee as of the Effective Date in effect at the time of
the Change of Control (as defined herein). Such salary shall be reviewed at
least annually and shall be increased from time to time subject to
accomplishment of such performance and contribution goals and objectives as may
be established from time to time by the Board of Directors. Such salary shall be
paid periodically in accordance with normal Company payroll practices. The
annual compensation specified in this Section 3(a), together with any increases
in such compensation that the Board may grant from time to time, is referred to
in this Agreement as "Base Compensation."

                  (b) Bonus. If a Bonus is adopted by the Board, beginning with
the Company's next fiscal year and for each fiscal year thereafter during the
term of this Agreement, the Employee shall be eligible to receive an annual
bonus (the "Bonus") based upon targets approved prior to the beginning of each
fiscal year by the Board (the "Target Bonus"). The Bonus payable hereunder shall
be paid in accordance with the Company's normal practices and policies.

                  (c) Employee Benefits. The Employee shall be eligible to
participate in the employee benefit plans and executive compensation programs
maintained by the Company applicable to other key executives of the Company,
including (without limitation) retirement plans, savings or profit-sharing
plans, deferred compensation plans, supplemental retirement or excess-benefit
plans, stock option, incentive or other bonus plans, life, disability, health,
accident and other insurance programs, paid vacations, and similar plans or
programs, subject in each case to the generally applicable terms and conditions
of the plan or program in question and to the determination of any committee
administering such plan or program.


<PAGE>   3

          4.      Severance Benefits.

                  (a) Termination Following A Change of Control. If the
Employee's employment with the Company terminates at any time within six months
(6 ) months after a Change of Control, then, subject to Section 5, the Employee
shall be entitled to receive severance benefits as follows:

                             (i) Involuntary Termination. If the Employee's
employment terminates for any reason, with or without a change of control, the
Employee shall be entitled to receive a continuation of the Employee's Base
Compensation in effect at the time of such termination for a period equal to
three (3) months. In addition, the Employee shall be entitled to a payment of a
pro-rata portion of the Target Bonus for the year in which the termination
occurs determined by multiplying 100% of such Target Bonus by a fraction, the
numerator of which shall be the number of days in which the Employee was
employed by the Company in the fiscal year in which such termination occurs, and
the denominator of which shall be the number of days in such fiscal year. Such
payment shall be made in a lump sum within ten (10) business days after the
Termination Date.

                             (ii) Voluntary Resignation; Termination For Cause.
If the Employee's employment terminates by reason of the Employee's voluntary
resignation (and is not an Involuntary Termination), or if the Employee is
terminated for Cause, then the Employee shall not be entitled to receive
severance or other benefits except for those (if any) as may then be established
under the Company's then existing severance and benefits plans and policies at
the time of such termination.

                             (iii) Disability; Death. If the Company terminates
the Employee's employment as a result of the Employee's Disability, or such
Employee's employment is terminated due to the death of the Employee, then the
Employee shall not be entitled to receive severance or other benefits except for
those (if any) as may then be established under the Company's then existing
severance and benefits plans and policies at the time of such Disability or

                  (b) Benefits. In the event the Employee is entitled to
severance benefits pursuant to subsection 4(a)(i), then in addition to such
severance benefits, the Employee shall receive 100% Company-paid health, dental
and life insurance coverage as provided to such employee immediately prior to
the Employee's termination (the "Company-Paid Coverage"). If such coverage
includes the Employee's dependents immediately prior to the Employee's
termination, such dependents shall also be covered at Company expense.
Company-Paid Coverage shall continue for the lesser of six (6) months following
such termination, or until the Employee becomes covered under another employer's
group health, dental or life insurance plan, as applicable. In addition, without
regard to the reason for termination of the Employee's employment: (i) the
Company shall pay the Employee any unpaid base salary due for periods prior to
the Termination Date; (ii) the Company shall pay the Employee all of the
Employee's accrued and unused vacation through the Termination Date; and (iii)
following submission of proper expense reports by the Employee, the Company
shall reimburse the Employee for all expenses reasonably and necessarily
incurred by the Employee in connection with the business of the Company prior to
termination. These payments shall be made promptly upon termination and within
the period of time mandated by law.


<PAGE>   4

                  (c) Options and Restricted Stock. In the event the Employee is
entitled to severance benefits pursuant to subsection 4(a)(i), upon such
termination, in addition to any portion of the Employee's stock options and/or
restricted stock that were vested immediately prior to such termination, all
outstanding options and/or restricted stock shall become vested and exercisable
as to an additional amount as though the Employee had remained continuously
employed for a period of six (6) months following such termination, for the
period prescribed in the applicable option and restricted stock purchase

          5. Limitation on Payments. In the event that the severance and other
benefits provided for in this Agreement or otherwise payable to the Employee (i)
constitute "parachute payments" within the meaning of Section 280G of the
Internal Revenue Code of 1986, as amended (the "Code") and (ii) but for this
Section, would be subject to the excise tax imposed by Section 4999 of the Code,
then the Employee's severance benefits under subsection 4(a)(i) shall be payable

                  (a) in full, or

                  (b) as to such lesser amount which would result in no portion
          of such severance benefits being subject to excise tax under Section
          4999 of the Code,

whichever of the foregoing amounts, taking into account the applicable federal,
state and local income taxes and the excise tax imposed by Section 4999, results
in the receipt by the Employee on an after-tax basis, of the greatest amount of
severance benefits under subsection 4(a)(i), notwithstanding that all or some
portion of such severance benefits may be taxable under Section 4999 of the
Code. Unless the Company and the Employee otherwise agree in writing, any
determination required under this Section 5 shall be made in writing by the
Company's independent public accountants (the "Accountants"), whose
determination shall be conclusive and binding upon the Employee and the Company
for all purposes. For purposes of making the calculations required by this
Section 5, the Accountants may make reasonable assumptions and approximations
concerning applicable taxes and may rely on reasonable, good faith
interpretations concerning the application of Sections 280G and 4999 of the
Code. The Company and the Employee shall furnish to the Accountants such
information and documents as the Accountants may reasonably request in order to
make a determination under this Section. The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations
contemplated by this Section 5.

          6. Certain Business Combinations. In the event it is determined by the
Board of Directors, upon receipt of a written opinion of the Corporation's
independent public accountants, that the enforcement of any Section or
subsection of this Agreement, including, but not limited to, Section 4(c)
hereof, which allows for the acceleration of vesting of options to purchase
shares of the Corporation's common stock upon a termination in connection with a
Change of Control, would preclude accounting for any proposed business
combination of the Corporation involving a Change of Control as a pooling of
interests, and the Board otherwise desires to approve such a proposed business
transaction which requires as a condition to the closing of such transaction
that it be accounted for as a pooling of interests, then any such Section or
subsection of this Statement shall be


<PAGE>   5

null and void. For purposes of this Section 6, the Board's determination shall
require the unanimous approval of the disinterested Board members.

          7. Definition of Terms. The following terms referred to in this
Agreement shall have the following meanings:

                  (a) Change of Control. "Change of Control" shall mean the
occurrence of any of the following events:

                             (i) Any "person" (as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended) becoming the
"beneficial owner" (as defined in Rule 13d-3 under said Act), directly or
indirectly, of securities of the Company representing 50% or more of the total
voting power represented by the Company's then outstanding voting securities,
other than in a private financing where securities are acquired directly from
the Company;

                             (ii) A change in the composition of the Board of
Directors of the Company occurring within a two-year period, as a result of
which fewer than a majority of the directors are Incumbent Directors. "Incumbent
Directors" shall mean directors who either (A) are directors of the Company as
of the date hereof, or (B) are elected, or nominated for election, to the Board
of Directors of the Company with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but shall
not include an individual not otherwise an Incumbent Director whose election or
nomination is in connection with an actual or threatened proxy contest relating
to the election of directors to the Company); or

                             (iii) The approval by shareholders of the Company
of a merger or consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or the approval by
the shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all the Company's assets.

                  (b) Involuntary Termination. "Involuntary Termination" shall
mean (i) without the Employee's express written consent, a significant reduction
of the Employee's duties, position or responsibilities, or the removal of the
Employee from such position and responsibilities, unless the Employee is
provided with a comparable position (i.e., a position of equal or greater
organizational level, duties, authority, compensation and status); (ii) without
the Employee's express written consent, a substantial reduction, without good
business reasons, of the facilities and perquisites (including office space and
location) available to the Employee immediately prior to such reduction; (iii) a
significant reduction by the Company in the Base Compensation of the Employee as
in effect immediately prior to such reduction; (iv) a material reduction by the
Company in the kind or level of


<PAGE>   6

employee benefits to which the Employee is entitled immediately prior to such
reduction with the result that the Employee's overall benefits package is
significantly reduced; (v) without the Employee's express written consent, the
relocation of the Employee to a facility or a location more than 50 miles from
the Employee's then present location; (vi) any purported termination of the
Employee by the Company which is not effected for Disability or for Cause, or
any purported termination for which the grounds relied upon are not valid; or
(vii) the failure of the Company to obtain the assumption of this Agreement by
any successors contemplated in Section 8 below.

                  (c) Cause. "Cause" shall mean (i) any act of personal
dishonesty taken by the Employee in connection with his responsibilities as an
employee and intended to result in substantial personal enrichment of the
Employee, (ii) the conviction of a felony which the Board reasonably believes
had or will have a material detrimental effect on the Company's reputation or
business, (iii) a willful act by the Employee which constitutes gross misconduct
and which is injurious to the Company, and (iv) continued violations by the
Employee of the Employee's obligations which are demonstrably willful and
deliberate on the Employee's part after there has been delivered to the Employee
a written demand for performance from the Company which describes the basis for
the Company's belief that the Employee has not substantially performed his

                  (d) Disability. "Disability" shall mean that the Employee has
been unable to perform his duties under this Agreement as the result of his
incapacity due to physical or mental illness, and such inability, at least 26
weeks after its commencement, is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to the Employee
or the Employee's legal representative (such agreement as to acceptability not
to be unreasonably withheld).

                  (e) Termination Date. "Termination Date" shall mean the date
on which either party delivers a notice of termination to the other.

          8.      Successors.

                  (a) Company's Successors. Any successor to the Company
(whether direct or indirect and whether by purchase, lease, merger,
consolidation, liquidation or otherwise) to all or substantially all of the
Company's business and/or assets shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this Agreement in
the same manner and to the same extent as the Company would be required to
perform such obligations in the absence of a succession. For all purposes under
this Agreement, the term "Company" shall include any successor to the Company's
business and/or assets which executes and delivers the assumption agreement
described in this subsection (a) or which becomes bound by the terms of this
Agreement by operation of law.

                  (b) Employee's Successors. The terms of this Agreement and all
rights of the Employee hereunder shall inure to the benefit of, and be
enforceable by, the Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.


<PAGE>   7

          9.      Notice.

                  (a) General. Notices and all other communications contemplated
by this Agreement shall be in writing and shall be deemed to have been duly
given when personally delivered or when mailed by U.S. registered or certified
mail, return receipt requested and postage prepaid. In the case of the Employee,
mailed notices shall be addressed to him at the home address which he most
recently communicated to the Company in writing. In the case of the Company,
mailed notices shall be addressed to its corporate headquarters, and all notices
shall be directed to the attention of its Secretary.

                  (b) Notice of Termination. Any termination by the Company for
Cause or by the Employee as a result of a voluntary resignation or an
Involuntary Termination shall be communicated by a notice of termination to the
other party hereto given in accordance with Section 9 of this Agreement. Such
notice shall indicate the specific termination provision in this Agreement
relied upon, shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination under the provision so indicated, and
shall specify the termination date (which shall be not more than 30 days after
the giving of such notice). The failure by the Employee to include in the notice
any fact or circumstance which contributes to a showing of Involuntary
Termination shall not waive any right of the Employee hereunder or preclude the
Employee from asserting such fact or circumstance in enforcing his rights

          10. Arbitration. At the option of either party, any and all disputes
or controversies whether of law or fact and of any nature whatsoever arising
from or respecting this Agreement shall be decided by arbitration in accordance
with the rules and regulations of the American Arbitration Association.

                  The arbitrator shall be selected as follows: in the event the
Company and the Employee agree on one arbitrator, the arbitration shall be
conducted by such arbitrator. In the event the Company and the Employee do not
so agree, the Company and the Employee shall each select one independent,
qualified arbitrator and the two arbitrators so selected shall select the third
arbitrator. The Company reserves the right to object to any individual
arbitrator who shall be employed by or affiliated with a competing organization.

                  Arbitration shall take place at Santa Clara County,
California, or any other location mutually agreeable to the parties. At the
request of either party, arbitration proceedings will be conducted in the utmost
secrecy; in such case all documents, testimony and records shall be received,
heard and maintained by the arbitrators in secrecy under seal, available for the
inspection only of the Company or the Employee and their respective attorneys
and their respective experts who shall agree in advance and in writing to
receive all such information confidentially and to maintain such information in
secrecy until such information shall become generally known. The arbitrator, who
shall act by majority vote, shall be able to decree any and all relief of an
equitable nature, including but not limited to such relief as a temporary
restraining order, a temporary and/or a permanent injunction, and shall also be
able to award damages, with or without an accounting and costs, provided that


<PAGE>   8

damages shall not be awarded. The decree or judgment of an award rendered by the
arbitrators may be entered in any court having jurisdiction thereof.

                  Reasonable notice of the time and place of arbitration shall
be given to all persons, other than the parties, as shall be required by law, in
which case such persons or those authorized representatives shall have the right
to attend and/or participate in all the arbitration hearings in such manner as
the law shall require.

          11.     Miscellaneous Provisions.

                  (a) No Duty to Mitigate. The Employee shall not be required to
mitigate the amount of any payment contemplated by this Agreement, nor shall any
such payment be reduced by any earnings that the Employee may receive from any
other source.

                  (b) Waiver. No provision of this Agreement shall be modified,
waived or discharged unless the modification, waiver or discharge is agreed to
in writing and signed by the Employee and by an authorized officer of the
Company (other than the Employee). No waiver by either party of any breach of,
or of compliance with, any condition or provision of this Agreement by the other
party shall be considered a waiver of any other condition or provision or of the
same condition or provision at another time.

                  (c) Whole Agreement. No agreements, representations or
understandings (whether oral or written and whether express or implied) which
are not expressly set forth in this Agreement have been made or entered into by
either party with respect to the subject matter hereof.

                  (d) Choice of Law. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of the State of

                  (e) Severability. The invalidity or unenforceability of any
provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision hereof, which shall remain in full force
and effect.

                  (f) No Assignment of Benefits. The rights of any person to
payments or benefits under this Agreement shall not be made subject to option or
assignment, either by voluntary or involuntary assignment or by operation of
law, including (without limitation) bankruptcy, garnishment, attachment or other
creditor's process, and any action in violation of this subsection (f) shall be

                  (g) Employment Taxes. All payments made pursuant to this
Agreement will be subject to withholding of applicable income and employment

                  (h) Assignment by Company. The Company may assign its rights
under this Agreement to an affiliate, and an affiliate may assign its rights
under this Agreement to another


<PAGE>   9

affiliate of the Company or to the Company; provided, however, that no
assignment shall be made if the net worth of the assignee is less than the net
worth of the Company at the time of assignment. In the case of any such
assignment, the term "Company" when used in a section of this Agreement shall
mean the corporation that actually employs the Employee.

                  (i) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.

                  IN WITNESS WHEREOF, each of the parties has executed this
Agreement, in the case of the Company by its duly authorized officer, as of the
day and year first above written.

COMPANY:                               CYBERMEDIA, INC.



                                          Charles M. Valentine