8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):    December 1, 2004

Mercury Interactive Corporation

(Exact name of registrant as specified in its charter)

Delaware	0-22350	77-0224776
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer Identification No.)

379 North Whisman Road, Mountain View, California 94043

(Address of Principal Executive Offices)

(Registrant’s Telephone Number, Including Area Code)

(650) 603-5200

(former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Solicitation material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 241.14a-12)

¨ Pre-commencement communications pursuant to rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement

The disclosure set forth in Item 5.02 below relating to appointment of a principal officer is incorporated herein by reference.

Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers

Effective December 1, 2004, the Board of Directors of Mercury Interactive Corporation (the “Company”) elected Anthony Zingale as President and Chief Operating Officer of the Company.

Mr. Anthony Zingale, age 49, has been one of the Company’s directors since July 2002. From March 1998 to March 2000, Mr. Zingale served as president and chief executive officer of Clarify, Inc., a supplier of front-office software and service solutions, and from March 2000 to March 2001, he served as president of the eBusiness Solutions Group of Nortel Networks, Inc., a telecommunications equipment company, following its acquisition of Clarify in March 2000. Mr. Zingale retired in April 2001. From January 1996 to December 1997, Mr. Zingale was senior vice president of worldwide marketing at Cadence Design Systems, Inc., an electronic design automation company, and he served in various other management roles at Cadence from 1989 to January 1996. He currently serves on the Board of Directors of Interwoven, Inc., a provider of enterprise content management solutions, Biz360 Inc., a privately held enterprise software company and Blazent, Inc., a privately held business-intelligence software company.

On December 1, 2004, the Company entered into an Employment Agreement with Anthony Zingale whereby Mr. Zingale will serve as the Company’s President and Chief Operating Officer. Under the terms of the Employment Agreement, Mr. Zingale will (i) receive an initial annual base salary of $500,000 and be eligible to receive a target bonus equal to 100% of his annual base salary, (ii) receive an initial stock option grant for 400,000 shares of the Company’s common stock, and (iii) as part of the Company’s annual refresh grants to other executives during 2005, be eligible to receive an option to purchase 50,000 shares of the Company’s common stock. Each of these options will have an exercise price equal to the fair market value of the common stock on the date of grant and a ten-year term, will vest at 1/48 per month over four years and will remain exercisable for a period of 7 months after termination of Mr. Zingale’s employment for any reason. Mr. Zingale will also participate in other employee benefit programs and receive any perquisites available to other executives of the Company.

If Mr. Zingale’s employment is terminated by the Company without “cause” or by Mr. Zingale for “good reason” (as those terms are defined in the Employment Agreement), Mr. Zingale will (i) receive a severance payment equal to one year (or two years, if he has been employed for more than four years at the time of termination) of base salary and target bonus in effect as of the date of termination, (ii) continued coverage under the Company’s health, life, dental and other insurance programs for the one- or two-year severance pay period, and (iii) have accelerated vesting of his outstanding options that would have vested, absent the end of employment, during the 12-month period following termination.

In addition, effective December 1, 2004, Mr. Zingale entered into a Change of Control Agreement with the Company that provides upon the involuntary termination (including resigning for good reason) or termination of Mr. Zingale’s employment as a result of disability or death within 18 months following a change of

control of the Company, Mr. Zingale will be entitled to (i) severance pay equal to 12 months (or 24 months if he has been employed for more than four years at the time of termination) of his base compensation as of the date his employment ceases (ii) continued coverage under the Company’s health, life, dental and other insurance programs for the for the 12-month or 24-month severance pay period, and (iii) accelerated vesting of all stock options and other forms of long-term compensation held by Mr. Zingale at the time of termination, with all outstanding vested stock options remaining exercisable for 7 months after the termination of Mr. Zingale’s employment.

The foregoing descriptions of Mr. Zingale’s Employment Agreement and Change of Control Agreement do not purport to be complete and are qualified in their entirety by reference to such agreements (including any schedules and exhibits thereto), copies of which are filed as Exhibits 10.1 and 10.2 hereto and are incorporated by reference herein.

Item 7.01 Regulation FD Disclosure

On December 1, 2004, the Company issued a press release announcing the hiring of Mr. Zingale. A copy of this press release is attached as Exhibit 99.1

Item 9.01 Financial Statements and Exhibits

(c) Exhibits.

10.1	Employment Agreement, dated December 1, 2004, between Mercury Interactive Corporation and Anthony Zingale.
10.2	Change of Control Agreement, dated December 1, 2004, between Mercury Interactive Corporation and Anthony Zingale.
10.3	Form of Notice of Grant and Stock Option Agreement.
99.1	Press release dated December 1, 2004

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: December 3, 2004	MERCURY INTERACTIVE CORPORATION
	By:	/s/ Susan J. Skaer
	Name:	Susan J. Skaer
		Vice President, General Counsel and Secretary

EX-10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT (“Agreement”) dated as of December 1, 2004 (the “Effective Date”) by and between Mercury Interactive Corporation (the “Company”) and Anthony Zingale (“Executive”).

WHEREAS, the Company considers it in the best interests of its stockholders to employ Executive as its President and Chief Operating Officer;

WHEREAS, Executive is willing to accept employment with the Company on the terms hereinafter set forth in this Agreement;

WHEREAS, simultaneously with the execution of this Agreement, Executive and the Company are entering into a Change of Control Agreement (the “Change of Control Agreement”);

NOW THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements of the parties set forth in this Agreement, and of other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

ARTICLE 1

POSITION; TERM OF AGREEMENT

Section 1.01. Position. (a) As of and following the Effective Date, Executive shall serve as President and Chief Operating Officer of the Company and shall report to the Chief Executive Officer. Executive shall have such duties and authority, consistent with such position, as shall be determined from time to time by the Company. The Board of Directors of the Company shall nominate Executive to be a Director of the Company for as long as Executive is the Company’s President.

(b) During his employment with the Company, Executive will devote substantially all of his business time to the performance of his duties under this Agreement and will not engage in any other business, profession or occupation for compensation or otherwise which would conflict with the rendition of such services either directly or indirectly, without the prior written consent of the Company’s Board of Directors (the “Board”). Notwithstanding the foregoing, Executive shall be permitted to continue his service as a member of the board of directors of Biz360, Inc., Blazent, Inc., and Interwoven, Inc., provided that such companies do not compete with the Company. Executive may engage in civic and not-for-profit activities so long as such activities do not interfere with the performance of his duties hereunder.

ARTICLE 2

COMPENSATION AND BENEFITS

Section 2.01. Base Salary. Commencing on the Effective Date, the Company shall pay Executive an initial annual base salary (the “Base Salary”) at the annual rate of $500,000, payable in accordance with the payroll practices of the Company from time to time. Executive’s compensation package shall be subject to periodic review by the Company.

Section 2.02. Bonus. Executive shall be eligible to participate in an executive bonus plan in accordance with the terms and conditions of such plan. Executive’s initial target bonus for 2005 (the “Target Bonus”) shall be 100% of Base Salary, subject to the Company’s performance and other terms and conditions of the bonus plan as determined by the Board in its sole discretion, including continued employment until the end of the applicable year.

Section 2.03. Stock Options. Subject to approval of the Board or its Compensation Committee, Executive shall receive an option to purchase 400,000 shares of the Company’s common stock (the “Common Stock”) promptly after the Effective Date (the “Option”). The Option shall have a per share exercise price equal to the fair market value of the Common Stock on the date of grant, shall vest monthly in equal installments over a period of four years and shall remain exercisable for a period of seven (7) months after termination of Executive’s employment for any reason. Except as provided for in this paragraph, the Option shall be subject to the terms and conditions of the Company’s stock plan and form of award agreement.

Subject to approval of the Board or its Compensation Committee, as part of the Company’s annual refresh grants to other executives during 2005, Executive will be eligible to receive an option to purchase 50,000 shares of the Company’s Common Stock (the “ 2005 Option”). The 2005 Option shall have a per share exercise price equal to the fair market value of the Common Stock on the date of grant, shall vest monthly in equal installments over a period of four years and shall remain exercisable for a period of seven months after termination of Executive’s employment for any reason. Except as provided for in this paragraph, the 2005 Option shall be subject to the terms and conditions of the Company’s stock plan and form of award agreement.

Section 2.04. Executive Benefits. During the Employment Term, Executive shall be eligible for employee benefits (including fringe benefits, vacation and health, accident and disability insurance, and retirement plan participation) substantially similar to those benefits made available generally to similarly situated employees of the Company; provided, however, that Executive will earn 30 days of paid-time off per year (equivalent to 6 weeks). This paid-time off will include both sick leave and vacation. In addition, Executive shall be entitled to all perquisites that are currently or may in the future be provided to any officer of the Company other than the Chief Executive Officer, including, but not limited to, bonus plans, life insurance, deferred compensation, club dues, car allowance or lease, car service, first-class airline travel, charter jet travel, financial planning, and tax and estate planning services, as applicable. Executive shall be entitled to fly first class (or, if not available, business class) on all Company-related travel.

Section 2.05. Long-Term Incentive Plan. During the Employment Term, if the Company adopts a Long-Term Incentive Plan, Executive will be eligible to participate in such plan, according to the terms and conditions of such plan.

Section 2.06. Business And Travel Expenses. Reasonable travel, entertainment and other business expenses incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the Company in accordance with the Company’s policies as in effect from time to time.

ARTICLE 3

SEVERANCE BENEFITS

Section 3.01. Certain Events of Termination. (a) In the event that Executive’s employment is terminated by the Company without Cause (as defined below) or by Executive for Good Reason (as defined below) during the Employment Term, but not including termination by reason of death or disability, Executive shall be entitled to the following benefits:

(i) The Company shall pay Executive during the Severance Period (as defined below) an amount equal to Executive’s Base Salary and Target Bonus in effect as of the date of termination, payable in accordance with the Company’s standard payroll practices or, at the Company’s option, in a lump sum;

(ii) Executive shall be provided with continued coverage under the Company’s health, life, dental and other insurance programs for the Severance Period (which may be provided by the Company paying for Executive’s continued coverage under COBRA at the same cost to Executive as before his termination of employment or payment of an amount sufficient to purchase comparable benefits) until the earlier of (A) the end of the Severance Period or (B) the date Executive becomes eligible for group health coverage with another employer with similar standards of benefits excluding Execucare benefits;

(iii) Executive shall be credited immediately with 12 months of vesting under each outstanding stock option held by Executive on the date of termination;

provided that (A) receipt of the foregoing shall be subject to (x) Executive signing and not revoking a release of claims in a form reasonably acceptable to the Company and (y) Executive’s continued compliance with the covenants set forth in Section 4.01 hereof and in the Proprietary Agreement (as defined below) and (B) if Executive’s employment terminates during a Change of Control Period (as defined in the Change of Control Agreement), Executive’s benefits, if any, shall be determined under the terms of the Change of Control Agreement instead of under this Agreement.

(b) “Cause” means the occurrence of any one or more of the following:

(i) any act of personal dishonesty taken by Executive in connection with Executive’s responsibilities as an employee and intended to result in substantial personal enrichment;

(ii) Executive being convicted of a felony; or

(iii) a willful act by Executive which constitutes gross misconduct and which is materially injurious to the Company.

(c) “Good Reason” means any of the following without Executive’s consent:

(i) Executive’s assignment to any duties or the significant reduction of Executive’s duties, either of which is inconsistent with Executive’s position or title with the Company and responsibilities in effect immediately prior to such assignment, or Executive’s removal from such position and responsibility, or a reduction in Executive’s title;

(ii) a greater than 10% reduction by the Company in Executive’s base compensation as in effect immediately prior to such reduction, unless substantially all executive officers of the Company agree to an equivalent reduction in base compensation;

(iii) relocation of Executive’s principal place of employment by more than 50 miles;

(iv) the appointment of a new chief executive officer other than Executive to replace Amnon Landan; or

(v) any material breach by the Company of any material provision of this Agreement if such breach is not cured by the Company within 30 days after written notice to the Company by Executive of such breach.

(d) “Severance Period” shall mean 12 months after termination of employment, except that if termination of employment occurs after the fourth anniversary of the Effective Date, the Severance Period shall mean 24 months.

Section 3.02. Indemnification. Following termination of his employment, the Company shall provide Executive with indemnification rights pursuant to the terms of his indemnification agreement with the Company and directors’ and officers’ insurance, if any, consistent with the rights and coverage provided for the same periods of time to the Company’s then-current executive officers and members of the Board.

Section 3.03 At-Will Employment Status. Nothing contained in this Agreement shall interfere with the at-will employment status of Executive or with the Company’s or Executive’s right to terminate Executive’s employment with the Company at any time, with or without Cause, upon written notice to the other party, subject to Section 3.01 if applicable.

ARTICLE 4

COVENANTS AND REPRESENTATIONS

Section 4.01. Proprietary Agreement. Executive agrees to execute, or has previously executed, the Company’s standard form of Proprietary Information and Arbitration Agreement (the “Proprietary Agreement”) and agrees to comply with the obligations thereunder during and after his employment with the Company as set forth therein, including but not limited to the non-solicitation and confidentiality covenants in Sections 2 and 8 thereof; provided that Executive agrees to comply with the non-solicitation covenant in Section 8 of the Proprietary Agreement for not less than the Severance Period.

Section 4.02. Enforceability. If any provision of this Agreement or the Proprietary Agreement is determined by a court of competent jurisdiction not to be enforceable in the manner set forth herein or therein, the Company and Executive agree that it is the intention of the parties that such provision should be enforceable to the maximum extent possible under applicable law and that such court shall reform such provision to make it enforceable in accordance with the intent of the parties.

Section 4.03. Executive Representation. Executive expressly represents and warrants to the Company that Executive is not a party to any contract or agreement and is not otherwise obligated in any way, and is not subject to any rules or regulations, whether governmentally imposed or otherwise, which will or may restrict in any way Executive’s ability to fully perform Executive’s duties and responsibilities under this Agreement.

ARTICLE 5

SUCCESSORS AND ASSIGNMENTS

Section 5.01. Assignments. Except for an assignment in the event of a change in control, this Agreement shall not be assignable by the Company without the written consent of Executive. This Agreement shall not be assignable by Executive.

Section 5.02. Successors; Binding Agreement. This Agreement shall inure to the benefit of and be binding upon personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees, and legatees.

ARTICLE 6

MISCELLANEOUS

Section 6.01. Attorneys’ Fees. The Company shall reimburse Executive for reasonable attorney fees in an amount not to exceed $10,000 incurred in negotiating and finalizing this Agreement.

Section 6.02. Notices. Any notice required to be delivered hereunder shall be in writing and shall be addressed:

(i) if to the Company, to:

Mercury Interactive Corporation

379 N. Whisman Road

Mountain View, California 94043

Fax: 650-584-3572

Attention: General Counsel

(ii) if to Executive, to Executive’s last known address as reflected on the books and records of the Company;

or, in each case, to such other address as such party may hereafter specify for the purpose by written notice to the other party hereto. Any such notice shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. in the place of receipt and such day is a business day in the place of receipt. Otherwise, any such notice shall be deemed not to have been received until the next succeeding business day in the place of receipt.

Section 6.03. Dispute Resolution. (a) In consideration of Executive’s employment with the Company, the Company’s promise to arbitrate all employment-related disputes and Executive’s receipt of the compensation, pay raises and any and all other benefits paid to Executive by the Company, at present and in the future, Executive agrees that any and all controversies, claims or disputes with anyone, including any employee, manager, officer, shareholder or benefit plan or administrator of the Company, arising from or relating to or resulting from Executive’s employment with the Company, including any breach of this Agreement, shall be subject to and resolved by binding arbitration. Binding arbitration pursuant to this Agreement shall be pursuant to California law, including California Code of Civil Procedure Section 1280 through 1294.2, including Section 1283.05. Executive understands that this agreement to arbitrate also applies to any disputes that the Company may have with Executive. In agreeing to arbitrate any and all claims, EXECUTIVE AGREES TO WAIVE ANY RIGHT TO TRIAL BY JURY, INCLUDING ANY STATUTORY CLAIMS UNDER STATE AND FEDERAL LAW, INCLUDING BUT NOT LIMITED TO, CLAIMS UNDER TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, THE AMERICANS WITH DISABILITIES ACT OF 1990, THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, THE OLDER WORKERS BENEFIT PROTECTION ACT, THE CALIFORNIA FAIR EMPLOYMENT AND HOUSING ACT, THE CALIFORNIA LABOR CODE, CLAIMS OF SEXUAL OR

OTHER UNLAWFUL HARASSMENT, DISCRIMINATION OR WRONGFUL TERMINATION, ANY STATUTORY CLAIMS, AND ANY CLAIMS FOR BREACH OF CONTRACT, TORT, OR ANY OTHER BASES IN STATE, FEDERAL OR LOCAL LAWS.

(b) Executive agrees that any arbitration will be administered by the American Arbitration Association (“AAA”) and that a neutral arbitrator will be selected in a manner consistent with its National Rules for the Resolution of Employment Disputes (the “Rules”). Executive agrees that the arbitration shall take place in Santa Clara County, California and that the arbitrator shall conduct and administer any arbitration in a manner consistent with the Rules, and with California law, including the power to conduct adequate discovery, decide any motions brought by any parties, and to award any remedies, including attorneys’ fees and costs, available under applicable law. Executive agrees that the arbitrator shall issue a binding written award that sets forth the essential findings and conclusions on which the award is based. Executive understands that the Company shall pay for all fees charged by the arbitrator and by the AAA, regardless of the party initiating the arbitration. The Company will reimburse Executive in any arbitration up to a maximum of $2,000 for travel expenses incurred for travel to the Santa Clara County area in connection with the arbitration hearing if Executive resides more than 300 miles from the location selected in Santa Clara County for the arbitration.

(c) Arbitration shall be the sole, exclusive and final remedy for any dispute between the Company and Executive. Accordingly, neither the Company nor Executive will be permitted to pursue court action regarding claims that are subject to arbitration. However, nothing in this Agreement will prohibit either party from seeking provisional relief, and Executive agrees that any party may petition the court for injunctive relief where either party alleges a violation of any of the covenants set forth herein. Executive further agrees that no bond or other security shall be required in obtaining such equitable relief and Executive hereby consents to the issuance of such injunction and to the ordering of specific performance. In the event either party seeks injunctive relief, the prevailing party shall be entitled to recover reasonable costs and attorneys’ fees.

(d) This Agreement does not prohibit Executive from pursuing an administrative claim with a local, state or federal administrative body or agency, such as the Department of Fair Employment and Housing, the Equal Employment Opportunities Commission, or the Workers’ Compensation Board. This Agreement does, however, prohibit Executive from seeking or pursuing court action regarding any such claim.

Section 6.04. Unfunded Agreement. The obligations of the Company under this Agreement represent an unsecured, unfunded promise to pay benefits to Executive and/or Executive’s beneficiaries, and shall not entitle Executive or such beneficiaries to a preferential claim to any asset of the Company.

Section 6.05. Entire Agreement. This Agreement (together with the Proprietary Agreement and, if applicable, any option award agreement) represents the entire agreement between Executive and the Company and its affiliates with respect to the matters referred to herein, and supersedes all prior discussions, negotiations, agreements,

and plans concerning such matters, other than the Change of Control Agreement; provided, however, that any amounts payable to Executive hereunder shall be reduced by any payments or notice period required by applicable law in connection with any termination of Executive’s employment.

Section 6.06. Tax Withholding. Notwithstanding anything in this Agreement to the contrary, the Company shall withhold from any amounts payable under this Agreement all federal, state, city, or other taxes as are legally required to be withheld.

Section 6.07. Waiver Of Rights. The waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a continuing waiver or as a consent to or waiver of any subsequent breach hereof.

Section 6.08. Amendment. This Agreement may not be modified, altered or changed except upon the express written consent of both parties.

Section 6.09. Severability. In the event any provision of this Agreement shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of this Agreement, and this Agreement shall be construed and enforced as if the illegal or invalid provision had not been included.

Section 6.10. Indemnification Agreement. The Company shall enter into an indemnification agreement with Executive providing Executive with indemnification for his acts as a corporate officer as provided in the Company’s standard form of indemnification agreement that has been provided to Executive. The Company shall provide Executive with directors’ and officers’ insurance coverage as of the date of this Agreement in such amounts as provided to the chief executive officer.

Section 6.11 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without reference to principles of conflict of laws.

Section 6.12. Counterparts. This Agreement may be signed in several counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were on the same instrument.

IN WITNESS WHEREOF, the Company and Executive have executed this Agreement, to be effective as of the day and year first written above.

MERCURY INTERACTIVE CORPORATION
By:	/s/ Amnon Landan
Name:	Amnon Landan
Title:	Chief Executive Officer
EXECUTIVE:
/s/ Anthony Zingale
Anthony Zingale

EX-10.2

Exhibit 10.2

December 1, 2004

Re: Change of Control Agreement

Dear Anthony Zingale:

Mercury Interactive Corporation (the “Company”) has agreed to extend certain benefits to you in the event your employment with the Company is terminated within eighteen months of a “Change of Control” of the Company. This letter sets out the terms of our agreement (the “Letter”). Capitalized terms are defined on Exhibit A, attached.

1. Severance Benefits. If you or the Company terminate your employment at any time within the Change of Control Period, then you will be entitled to receive severance benefits as follows:

(a) Voluntary Resignation; Termination for Cause. If you terminate your employment by reason of voluntary resignation (other than by Involuntary Termination) or if you are terminated for Cause, then you will not be entitled to receive severance or other benefits. All outstanding vested stock options shall remain exercisable for seven months after the termination of your employment.

(b) Involuntary Termination. If your employment is terminated or you terminate your employment as a result of Involuntary Termination, you will be entitled to receive the following benefits:

(i) severance pay, equal to your base compensation as of the date your employment ceases, for the Severance Period and according to normal Company payroll practices and commencing with the month immediately after the month in which your employment so ceases;

(ii) coverage under the Company’s health, life, dental and other insurance programs for the Severance Period; and

(iii) accelerated vesting of all stock options and other forms of long-term compensation held by you, including those granted after this Letter, with all outstanding vested stock options remaining exercisable for seven months after the termination of your employment.

(c) Disability; Death. If the Company terminates your employment as a result of your Disability (as defined below) or such employment is terminated by your death, then such termination shall be treated as if it were an Involuntary Termination, and the severance and other benefits shall be provided, in accordance with subsection (b) above.

2. 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 Letter and agree expressly to perform the obligations under this Letter 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 Letter, 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 Section 3 or which becomes bound by the terms of this Letter by operation of law.

3. Law Governing; Arbitration. This Letter shall be governed by and construed in accordance with the laws of the State of California. Any dispute or controversy arising under or in connection with this Letter shall be settled exclusively in arbitration conducted in Sunnyvale, California, in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. Punitive damages shall not be awarded. In any arbitration proceeding, the party determined to be the prevailing party shall be entitled to receive, in addition to any other award, its attorneys’ fees and expenses of the proceeding.

4. Employment and Income Taxes. All payments made pursuant to this Letter will be subject to withholding of employment taxes.

5. Golden Parachute Excise Tax.

a. Notwithstanding anything in the foregoing to the contrary, if any of the payments to you (prior to any reduction described in this paragraph) provided for in this Agreement, together with any other payments which you have the right to receive from the Company or any corporation which is a member of an “affiliated group” as defined in Section 1504(a) of the Internal Revenue Code of 1986, as amended (“Code”), without regard to Section 1504(b) of the Code, of which the Company is a member (the “Payments”) would constitute a “parachute payment” (as defined in Section 280G(b)(2) of the Code) and if the Safe Harbor Amount is greater than the Taxed Amount, then the total amount of such Payments shall be reduced to the Safe Harbor Amount. The “Safe Harbor Amount” is the largest portion of the Payments that would result in no portion of the Payments being subject to the excise tax set forth at Section 4999 of the Code (“Excise Tax”). The “Taxed Amount” is the total amount of the Payments (prior to any reduction as described in this paragraph) notwithstanding that all or some portion of the Payments may be subject to the Excise Tax. Solely for the purpose of comparing which of the Safe Harbor Amount and the Taxed Amount is greater, the determination of each such amount, shall be made on an after-tax basis, taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all of which shall be computed at the highest applicable marginal rate). If a reduction of the Payments to the Safe Harbor Amount is necessary, then the reduction shall occur in the following order unless you elect in writing a different order (provided, however, that such election shall be subject to Company approval if made on or after the date on which the event that

triggers the Payments occurs): reduction of cash payments; cancellation of accelerated vesting of stock awards; reduction of employee benefits. In the event that acceleration of vesting of a stock award is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of your stock awards unless you elect in writing a different order for cancellation.

b. The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change of Control transaction shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change of Control, or the Company otherwise determines such accounting firm should not be engaged for purposes of making the determinations required hereunder, the Company may appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder.

c. The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to the Company and you within 15 calendar days after the date on which your right to a Payment is triggered (if requested at that time by the Company or you) or such other time as requested by the Company or you upon written notice that a payment related to a change of control of the Company has been or is to be made.

By your signature below, you indicate that you agree to the terms set out in this Letter.

Very truly yours,

MERCURY INTERACTIVE CORPORATION
/s/ Amnon Landan
By:	Amnon Landan
Title:	Chief Executive Officer
ACKNOWLEDGED AND AGREED:
/s/ Anthony Zingale
Anthony Zingale

Date: December 1, 2004

EXHIBIT A

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

“Cause” means (i) any act of personal dishonesty taken by you in connection with your responsibilities as an employee and intended to result in substantial personal enrichment; (ii) your being convicted of a felony; or (iii) a willful act by you which constitutes gross misconduct and which is materially injurious to the Company.

“Change of Control” means the occurrence of any of the following events:

(a) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), excluding existing beneficial owners as of the date of this Letter, is or becomes the “beneficial owner” (as defined in Section 13d-3 of 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, excluding conversion of any convertible securities issued as of the date of this Letter;

(b) The composition of the Board of Directors changes during any period of 36 months such that individuals who at the beginning of the period were members of the Board of Directors (the “Continuing Directors”) cease for any reason to constitute at least a majority thereof; unless at least 66-2/3% of the Continuing Directors has either (i) approved the election of the new Directors, (ii) if the election of the new Directors is voted on by shareholders, recommended that the shareholders vote for approval, or (iii) otherwise determined that such change in composition does not constitute a Change of Control, even if the Continuing Directors do not constitute a quorum of the whole Board (it being understood that this requirement shall not be capable of satisfaction unless there is at least one Continuing Director);

(c) The shareholders of the Company approve 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 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 shareholders of the Company approve a plan of complete liquidation of the Company or an agreement for the sale, exclusive license or disposition by the Company of all or substantially all of the Company’s assets;

(d) Any other provision of this subsection notwithstanding, the term Change of Control shall not include either of the following events undertaken at the election of the Company:

(i) Any transaction, the sole purpose of which is to change the state of the Company’s incorporation; or

(ii) A transaction, the result of which is to sell all or substantially all of the assets of the Company to another corporation (the “surviving corporation”) provided that the surviving corporation is owned directly or indirectly by the shareholders of the Company immediately following such transaction in substantially the same proportions as their ownership of the Company’s common stock immediately preceding such transaction.

“Change of Control Period” means the period beginning with the date that a Change of Control has occurred (as determined by the Board of Directors of the Company) and ending eighteen months later.

“Disability” means that you suffer from a physical or mental disability to an extent that renders it impracticable for you to continue performing your duties hereunder. You shall be deemed to be so disabled if (i) a physician selected by the Company (and the Company will use its best efforts to coordinate such determination by the physician with the Company’s long term disability insurance carrier) advises the Company that your physical or mental condition will render you unable to perform your duties for a period exceeding three consecutive months, or (ii) due to a physical or mental condition, you have not substantially performed your duties hereunder for a period of three consecutive months.

“Involuntary Termination” means without your consent (i) your assignment to any duties or the significant reduction of your duties, either of which is inconsistent with your position or title with the Company and responsibilities in effect immediately prior to such assignment, or your removal from such position and responsibility, or a reduction in your title; (ii) a greater than 10% reduction by the Company in your base compensation as in effect immediately prior to such reduction; provided, however, that such reduction shall not apply if substantially all executive officers of the Company agree to an equivalent reduction in base compensation; (iii) any purported termination of you by the Company (other than a voluntary termination initiated by the you) which is not effected for Disability or for Cause; (iv) relocation of your principal place of employment by more than 50 miles; (v) the failure of any successor entity to the Company to assume this agreement or your employment agreement and (vi) any material breach by the Company of any material provision of your employment agreement with the Company which has not been cured within 30 days of written notice to the Company by you of such breach.

“Severance Period” means the 12-month period following your termination of employment, except that if termination of employment occurs after the fourth anniversary of the commencement of your employment, the Severance Period shall mean the 24-month period following such termination of employment.

EX-10.3

Exhibit 10.3

MERCURY INTERACTIVE CORPORATION

AMENDED AND RESTATED 1999 STOCK OPTION PLAN

NOTICE OF STOCK OPTION GRANT

[optionee]

[address]

You have been granted an Option, consisting of the Stock Option Agreement attached hereto as Exhibit A, Notice of Stock Option Beneficiary(ies) attached hereto as Exhibit B and this Notice of Stock Option Grant (together, the “Option Agreement”) to purchase Common Stock of MERCURY INTERACTIVE CORPORATION (the “Company”) as follows:

Date of Grant	[date]
Vesting Commencement Date	[date]
Option Price Per Share	$ [exercise price]
Total Number of Shares Granted	[shares]
Total Price of Shares Granted	$ [total price]
Type of Option	¨   Incentive Stock Option
	x   Nonqualified Stock Option
Term/Expiration Date	10 years/

Exercise Schedule:

This Option may be exercised in whole or in part, in accordance with the Vesting Schedule set out below.

Vesting Schedule

Monthly on the last day of each month, 1/48 (            ) of the total number of Shares until fully vested. In the event of fractional Shares, the monthly number of Shares shall be adjusted accordingly to the nearest whole Share.

Termination Period:

Option may be exercised for seven (7) months after termination of employment (but in no event later than the Expiration Date).

Form of Exercise:

Exercise of this Option shall be on a properly executed Exercise Notice in the form provided by the Company, along with (i) cash, (ii) check or (iii) if by broker sale, delivery of such documentation as the Plan Administrator and the broker shall require to effect delivery of the sale or loan proceeds required to pay the exercise price and any tax withholding resulting from such exercise.

OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THIS OPTION IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY’S AMENDED AND RESTATED 1999 STOCK OPTION PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH HIS RIGHT OR THE COMPANY’S RIGHT TO TERMINATE HIS EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE.

Optionee acknowledges receipt of a copy of the Plan and certain information related to it and represents that he or she is familiar with the terms and provisions of the Plan and this Option Agreement. Optionee accepts this Option Agreement subject to all such terms and provisions. Optionee has reviewed the Plan and this Option Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Option Agreement and fully understands all provisions of the Option Agreement.

By your signature and the signature of the Company’s representative below, you and the Company agree that this Option is granted under and governed by the terms and conditions of the AMENDED AND RESTATED 1999 STOCK OPTION PLAN and the Option Agreement, each of which are attached and made a part of this document.

OPTIONEE:		MERCURY INTERACTIVE CORPORATION, a Delaware corporation
/s/	By:	/s/
Signature
	Title:
Print Name
Dated:	Dated:

I am unmarried or reside in a separate property state             .

Spousal consent attached             .

I am married and have previously filed a spousal consent with the Company             .

EXHIBIT A TO NOTICE OF GRANT

STOCK OPTION AGREEMENT

FOR THE MERCURY INTERACTIVE CORPORATION

AMENDED AND RESTATED 1999 STOCK OPTION PLAN

1. Grant of Option. Mercury Interactive Corporation, a Delaware corporation (“the Company”), has granted to the Optionee named in the Notice of Grant (the “Optionee”), an option (the “Option”) to purchase a total number of shares of Common Stock (the “Shares”) set forth in the Notice of Grant, at the exercise price per share set forth in the Notice of Grant (the “Exercise Price”), and in all respects subject to the terms, definitions and provisions of the Amended and Restated 1999 Stock Option Plan (the “Plan”) adopted by the Company, which is incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings herein.

If designated an Incentive Stock Option, this Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code.

2. Exercise of Option. This Option shall be exercisable during its term in accordance with the provisions of Section 9 of the Plan as follows:

(a) Right to Exercise.

(i) Subject to subsections 2 (a) (ii), (iii) and (iv) below, this Option shall be exercisable cumulatively, as set forth in the Notice of Grant; provided, however, that the vesting schedule shall temporarily cease during any period of time that the Optionee’s employment is subject to an approved leave of absence in excess of thirty (30) days and recommences thereafter. This Option may be exercised in whole or in part at any time as to Shares which have not yet vested under the vesting schedule; provided, however, that the Optionee shall execute as a condition to such exercise of this Option, the Restricted Stock Purchase Agreement attached hereto as Exhibit A.

(ii) This Option may not be exercised for a fraction of a share.

(iii) In the event of Optionee’s death, disability or other termination of employment, the exercisability of the Option is governed by Sections 5, 6 and 7 below, subject to the limitations contained in subsection 2(a)(iv).

(iv) In no event may this Option be exercised after the date of expiration of the term of this Option as set forth in Section 9 below.

(b) Method of Exercise. This Option shall be exercisable by written notice which shall state the election to exercise the Option, the number of Shares in respect of which the Option is being exercised, and such other representations and agreements with respect to such Shares of Common Stock as may be required by the Company pursuant to the provisions of the Plan. Such written notice shall be signed by the Optionee and shall be delivered in person or by certified mail to the Secretary of the Company. The written notice shall be accompanied by payment of the Exercise Price. This Option shall be deemed to be exercised upon the receipt by the Company of such written notice accompanied by the Exercise Price.

No share will be issued pursuant to the exercise of an Option unless such issuance and such exercise shall comply with all relevant provisions of law and the requirements of any stock

exchange upon which the Shares may then be listed. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to the Optionee on the date on which the Option is exercised with respect to such Shares.

3. Method of Payment.

(a) Forms of Consideration Authorized. Payment of the Exercise Price shall consist of: (i) cash; (ii) check; (iii) by means of a Cashless Exercise, as defined in this Section 3(b); or (iv) by any combination of the foregoing.

(b) A “Cashless Exercise” means the assignment in a form acceptable to the Company of the proceeds of a sale or loan with respect to some or all of the shares of Stock acquired upon the exercise of the Option pursuant to a program or procedure approved by the Company (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System). The Company reserves, at any and all times, the right, in the Company’s sole and absolute discretion, to decline to approve or terminate any such program or procedure.

4. Restrictions on Exercise. This Option may not be exercised until such time as the Plan has been approved by the stockholders of the company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any applicable federal or state securities or other law or regulation, including any rule under Part 207 of Title 12 of the Code of Federal Regulations (“Regulation G”) as promulgated by the Federal Reserve Board. As a condition to the exercise of this Option, the Company may require Optionee to make any representation and warranty to the Company as may be required by any applicable law or regulation.

5. Termination of Status as an Employee. In the event of termination of Optionee’s Continuous Status as an Employee, the Optionee may, but only within seven (7) months after the date of such termination (but in no event later than the date of expiration of the term of this Option as set forth in Section 9 below), exercise this Option to the extent exercisable at the date of such termination. To the extent this Option was not exercisable at the date of such termination, or if the Optionee does not exercise this Option within the time specified herein, the Option shall terminate.

6. Disability of Optionee. Notwithstanding the provisions of Section 5 above, in the event of termination of Optionee’s Continuous Status as an Employee as a result of Optionee’s total and permanent disability (as defined in Section 22 (e) (3) of the Code), the Optionee may, but only within seven (7) months from the date of termination of employment (but in no event later than the date of expiration of the term of this Option as set forth in Section 9 below), exercise this Option to the extent exercisable at the date of such termination. To the extent that the Option was not exercisable at the date of termination, or if the Optionee does not exercise such Option within the time specified herein, the Option shall terminate.

7. Death of Optionee. In the event of the death of Optionee:

(a) during the term of this Option and while an Employee of the Company and having been in continuous status as an Employee since the date of grant of the Option, the Option may be exercised in full even as to shares which otherwise would not have been vested, at any time within seven (7) months following the date of death (but in no event later than the date of expiration of the term of this Option as set forth in Section 9 below), by Optionee’s estate or by a person who acquired the right to exercise; or

(b) within thirty days after the termination of Optionee’s Continuous Status as an Employee, the Option may be exercised, at any time within seven (7) months following the date of death (but in no event later than the date of expiration of the term of this Option as set forth in Section 9 below), by Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent of the right to exercise what had accrued at the date of termination.

8. Non-Transferability of Option; Successors and Assigns. This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by him. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of the Optionee.

9. Term of Option. This Option may not be exercised more than ten (10) years (five years if Optionee owns, immediately before this Option is granted, stock representing more than 10 percent of the total combined voting power of all classes of stock of the Company or of any Parent or Subsidiary) from the date of grant of this Option, and may be exercised during such term only in accordance with the Plan and the terms of this Option.

10. Taxation Upon Exercise of Option. Optionee understands that, upon exercising a Nonstatutory Stock Option, he or she will recognize income for tax purposes in an amount equal to the excess of the then fair market value of the Shares over the Exercise Price, and that if the Optionee is an employee, the Company will be required to withhold federal and state taxes from Optionee’s compensation, or collect withholding taxes from Optionee at the time of exercise. Optionee understands that if the Option qualifies as an ISO, upon the exercise of the Option, the excess, if any, of the fair market value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to the alternative minimum tax for federal tax purposes and may subject the Optionee to the alternative minimum tax in the year of exercise. Optionee acknowledges that he or she has been given the opportunity to consult and is relying solely on tax and legal counsel of his or her own choosing with regard to the exercise of his or her Option.

11. Notice of Disqualifying Disposition of ISO Shares. If the Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise disposes of any of the Shares acquired pursuant to ISO on or before the later of (1) the date two years after the Date of Grant, or (2) the date one year after the date of exercise, Optionee hereby agrees to notify the Company in writing within 30 days after the date of any such disposition. Optionee agrees that Optionee may be subject to income tax withholding by the Company on the compensation income recognized by the Optionee from the early disposition by payment in cash or out of the current earnings paid to the Optionee. Optionee understands that if he disposes of such shares at any time after the expiration of such two-year and one-year holding periods, any gain on such sale will be taxed as long-term capital gain.

12. Section 83 (b) Election For Alternative Minimum Tax for Incentive Stock Options. Optionee hereby acknowledges that Optionee has been informed that if he or she exercises an incentive stock option as to “unvested shares,” unless an 83 (b) election is filed by the Optionee with the Internal Revenue Service within 30 days of the purchase of the Shares, the Optionee will be required to include (for alternative minimum tax purposes only) an amount equal to the excess, if any of the fair market value of the Shares at the time the shares vest over the Exercise Price for such shares. For this purpose, “unvested” shares include shares purchased by certain persons who are subject to Section 16 of the Securities Exchange Act of 1934 and shares as to which the Company retains a right to repurchase unvested shares at the Optionee’s cost upon the Optionee’s termination of employment with the Company. Optionee is encouraged and advised to consult tax advisors in connection with the purchase of the

Shares as to the advisability of filing an election for alternative minimum tax purposes under Section 83 (b). OPTIONEE HEREBY ASSUMES ALL RESPONSIBILITY FOR FILING SUCH ELECTION AND PAYING ANY TAXES RESULTING FROM SUCH ELECTION OR THE VESTING LAPSE OF SUCH SHARES.

13. Designation of Beneficiary . The Employee shall have the right to appoint any individual or legal entity in writing, on Exhibit B to the Notice of Grant, as his or her beneficiary to receive any Option (to the extent not previously exercised or forfeited) under this Agreement upon the Employee’s death. Such designation under this Agreement may be revoked by the Employee at any time and a new beneficiary may be appointed by the Employee by execution and submission to the Stock Administration Department of the Company of a revised Exhibit B to this Agreement. In order to be effective, a designation of beneficiary must be completed by the Employee on Exhibit B and received by the Stock Administration Department of the Company, prior to the date of the Employee’s death. In the absence of such designation, the Employee’s beneficiary shall be the person designated under the Employee’s will or as defined by the applicable state laws of the decedent’s distribution.

OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES SUBJECT TO THIS OPTION IS EARNED ONLY BY CONTINUING EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY’S STOCK OPTION PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH HIS OR HER RIGHT OR THE COMPANY’S RIGHT TO TERMINATE HIS OR HER EMPLOYMENT AT ANY TIME, WITH OR WITHOUT CAUSE.

EX-99.1

Exhibit 99.1

Editorial Contacts:

Judith Meinhalt, 650.603.5557

Mercury

jmeinhalt@mercury.com

Amy Swanson, 415.392.8282

OutCast Communications

aswanson@outcastpr.com

For Immediate Release

MERCURY APPOINTS TONY ZINGALE PRESIDENT & CHIEF OPERATING OFFICER

Industry Veteran and Mercury Board Member Joins Executive Team

MOUNTAIN VIEW, CALIF., – DECEMBER 1, 2004 – Today, Mercury Interactive Corporation (NASDAQ: MERQ), the global leader in business technology optimization (BTO), announced that industry veteran and member of Mercury’s board of directors, Tony Zingale, has joined the company’s executive management team as president and chief operating officer.

“Tony is an extraordinary addition to Mercury’s executive team,” said Amnon Landan, chairman and chief executive officer at Mercury. “Tony is a highly sought after leader who brings a strong track record of success to the company. The significant growth opportunity we have demands a deep and talented management team. I am very pleased to have him join us in this new role.”

Mr. Zingale has more than twenty years of experience building profitable, high growth information technology companies. He was president and chief executive officer of Clarify, a publicly traded enterprise technology company that was a leader in customer relationship management market from 1997 until it was acquired by Nortel Networks, Inc. in 2000. During his tenure, Clarify’s revenue grew more than three hundred percent to more than $260 million. Following the acquisition, he served as president of Nortel’s billion-dollar eBusiness Solutions Group.

Previously, Mr. Zingale spent more than 10 years at Cadence Design Systems, Inc., the world’s leading supplier of electronic design products and services, in a succession of executive management positions leading to his role as senior vice president of worldwide marketing. He served on the executive team that grew Cadence from approximately $40 million in revenue to more than $1.2 billion.

“Mercury is one of the fastest growing software companies and the global leader in the BTO market,” said Tony Zingale, president and chief operating officer at Mercury. “It is clear that Mercury has a unique growth opportunity. I am looking forward to partnering with Amnon and the executive team as we strive to build one of the most important software companies in the world.”

Mr. Zingale holds a Bachelor of Science degree in electrical and computer engineering and a Bachelor of Arts degree in business administration from the University of Cincinnati. He currently serves on the Board of Directors of Interwoven, a leading provider of enterprise content management solutions, and Blazent, a privately held technology company. Mr. Zingale will continue to serve on Mercury’s Board of

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Directors, but will leave his positions on the nominating and corporate governance and compensation committees and his role as lead outside director. Mercury’s board of directors has elected Clyde Ostler as lead outside director.

ABOUT MERCURY

Mercury Interactive (NASDAQ: MERQ), the global leader in business technology optimization (BTO), is committed to helping customers optimize the business value of information technology. Founded in 1989, Mercury conducts business worldwide and is one of the fastest growing enterprise software companies today. Mercury provides software and services to govern the priorities, people, and processes of IT; deliver and manage applications; and integrate IT strategy and execution. Customers worldwide rely on Mercury offerings to improve quality and performance of applications and manage IT costs, risks and compliance. Mercury BTO offerings are complemented by technologies and services from global business partners. For more information, please visit www.mercury.com.

# # #

Mercury, Mercury Interactive and the Mercury logo are trademarks or registered trademarks of Mercury Interactive Corporation or its subsidiaries in the United States and/or other countries. All other company, brand and product names are marks of their respective holders.

MERCURY

379 North Whisman Road

Mountain View, California 94043

Tel: (650) 603-5200

Fax: (650) 603-5300

www.mercury.com

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