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ISS GROUP, INC. EXHIBIT 10.5
AMENDED AND RESTATED AGREEMENT REGARDING ACCELERATION OF
VESTING OF FUTURE OPTIONEES
This Amended and Restated Agreement Regarding Acceleration of
Vesting of Future Optionees (this "Agreement") is made as of this 24th day of
February, 1998, between ISS Group, Inc., a Delaware corporation (the "Company"),
and Greylock Equity Limited Partnership ("Greylock"), Sigma Partners III, L.P.,
Sigma Associates III, L.P. and Sigma Investors III, L.P. (collectively,
"Sigma"), AT&T Venture Fund II, L.P. and Venture Fund I, L.P. (together,
"AT&T"), and Xxxxxxx Xxxxxxx Xxxxxxxx & Xxxxx VIII, KPCB Information Sciences
Zaibatsu Fund II and KPCB Java Fund (collectively, "KPCB").
WHEREAS, the parties signatory to that certain Agreement
Regarding Acceleration of Vesting of Future Optionees, dated February 2, 1996,
by and among Internet Security Systems, Inc. ("ISS"), Greylock and Sigma (the
"First Vesting Agreement") desire to amend and restate the First Vesting
Agreement in its entirety and combine it with the Second Vesting Agreement (as
hereinafter defined); and
WHEREAS, parties signatory to that certain Agreement Regarding
Acceleration of Vesting of Future Optionees, dated February 14, 1997, by and
among ISS, AT&T and KPCB (the "Second Vesting Agreement") desire to amend and
restate the Second Vesting Agreement in its entirety and combine it with the
First Vesting Agreement; and
WHEREAS, the Company is the successor to ISS' obligations
under the First Vesting Agreement and Second Vesting Agreement pursuant to that
certain Stock Exchange Agreement dated December 9, 1997 by and among the
Company, ISS and the shareholders of ISS;
NOW, THEREFORE, it is hereby agreed as follows:
A. Waiver. Greylock, Sigma, AT&T and KPCB hereby waive the observance of
the terms of the First Vesting Agreement and the Second Vesting Agreement with
respect to options granted by the Board of Directors of ISS and ISS Group under
the Company's 1995 Stock Incentive Plan (as amended and restated) to the extent
such option grants may violate Section 1 of either the First Vesting Agreement
or the Second Vesting Agreement during the last vesting period of such option
grants.
B. Combination, Amendment and Restatement. Greylock, Sigma, AT&T, KPCB and
the Company hereby agree to combine, amend and restate the First Vesting
Agreement and the Second Vesting Agreement, so that the resultant agreement
reads in its entirety as follows:
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1. Acceleration. The Company agrees that when granting any Options to any
future Optionee, the Company may execute an agreement with such Optionee
containing provisions to the following effect:
"in the event that both the Conditions Precedent to Acceleration set
forth in Section 2 below arise, and this agreement is not rendered void
by the provisions of Section 3 below, not more than the greater of (i)
fifty percent (50%) of the Options held by such Optionee which have not
yet vested, or (ii) the Options which would be vested in such
Optionee's next vesting installment may become exercisable immediately,
if the Conditions Precedent to Acceleration set forth in Section 2 have
occurred.
Conditions Precedent to Acceleration
(a) whenever the Company sells, conveys or otherwise disposes
of all or substantially all of its property or business, or merges into
or effects a reorganization with any corporation (other than a
wholly-owned subsidiary corporation) in which the shareholders of the
Company immediately prior to the transaction possess less than 50% of
the voting power of the surviving entity (or its parent) (together the
"Surviving Entity") immediately after the transaction (a "Change in
Control"); and
(b) the Optionee is not offered a position with the Surviving
Entity which: (i) offers compensation equivalent to or greater than
that provided to the Optionee by the Company immediately prior to the
Change in Control; and (ii) offers duties and responsibilities
comparable to those associated with the position held by the Optionee
with the Company immediately prior to the Change in Control such that
the duties and responsibilities of the Optionee with the Surviving
Entity are not materially diminished from those of the Optionee at the
Company."
The parties agree that nothing herein shall in any way effect existing vesting
provisions of current option holders.
2. Invalidity of this Agreement in the Event of Certain Business Combinations.
In the event that it is determined by the Board of Directors of the Company (the
"Board"), upon receipt of a written opinion of the Company's independent public
accountants, that the enforcement of this Agreement would preclude accounting
for any proposed business combination of the Company involving a Change in
Control as a pooling of interests, and the Board otherwise desires to approve 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, this
Agreement shall be null and void, but only if the absence of enforcement of this
Agreement would preserve treatment of the proposed business combination as a
pooling of interests."
3. Miscellaneous.
3.1 Notices. Any notice required or permitted to be given to a party
pursuant to this
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Agreement shall be in writing and shall be effective upon personal delivery or
five (5) business days after deposit in the U.S. Mail, postage prepaid and
properly addressed to the party to be notified.
3.2 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Delaware without regard to choice of law rules.
3.3 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
3.4 Successors and Assigns. Except as otherwise expressly provided in
this Agreement, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors and assigns of the parties hereto.
3.5 Amendments and Waivers. Any term hereof may be amended and the
observance of any term hereof may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of Greylock, Sigma, AT&T and Xxxxxxx. Any amendment or waiver so
effected shall be binding upon the Company.
3.6 Termination. All parties' rights under this Agreement will
terminate upon the earliest to occur of (i) the date on which this Agreement is
terminated by a writing executed by Greylock, Sigma, AT&T and Xxxxxxx, or (ii)
the dissolution of the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year hereinabove first written.
ISS GROUP, INC.
By:
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Xxxxxx X. Xxxxxx
President
GREYLOCK EQUITY LIMITED PARTNERSHIP
By: Greylock Equity GP Limited Partnership
Its General partner
By:
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Name:
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Title:
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AT & T VENTURE FUND II, L.P.
By:
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Name:
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Title:
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VENTURE FUND I, L.P.
By:
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Name:
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Title:
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SIGMA ASSOCIATES III, L.P.
By: Sigma Management III, L.P.
Its General Partner
By:
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Name:
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Title:
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SIGMA INVESTORS III, L.P.
By: Sigma Management III, L.P.
Its General Partner
By:
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Name:
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Title:
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SIGMA PARTNERS III, L.P.
By: Sigma Management III, L.P.
Its General Partner
By:
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Name:
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Title:
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XXXXXXX XXXXXXX XXXXXXXX & XXXXX VIII
By: KPCB VIII Associates
By:
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Name:
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Title:
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KPCB INFORMATION SCIENCES
ZAIBATSU FUND II
By: KPCB VII Associates
By:
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Name:
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Title:
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KPCB JAVA FUND
By: KPCB VIII Associates
By:
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Name:
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Title:
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