EMPLOYMENT AND SUCCESSION AGREEMENT AND FULL AND COMPLETE RELEASE
EXHIBIT 10.12
EMPLOYMENT AND SUCCESSION AGREEMENT
AND
FULL AND COMPLETE RELEASE
This Employment and Succession Agreement and Full and Complete Release ("Agreement") is entered into between Xxxxxxx X. Xxxxxxxx ("Executive") and Internet Security Systems, Inc., a Delaware corporation (together with its subsidiary companies, the "Company").
Whereas, the Company and Executive desire to agree upon a fixed term of employment of Executive by the Company and provide for the successful transition of duties and separation of Executive from the Company effective April 15, 2006; and
Whereas, the Company and Executive have previously entered into an Indemnity Agreement dated 19 March 2001, and a Confidentiality, Ownership and Non-Competition Agreement dated 23 December 1997 (the "Preexisting Agreements").
Whereas, the Executive has been advised to consult with an attorney and has relied upon the advice of her attorney in signing this Agreement.
Now, therefore, in consideration for payments and benefits provided by the Company as set forth in this Agreement, the sufficiency of which is hereby acknowledged, Executive and the Company agree as follows:
- Fixed Term Employment.
- In order to assure retention of Executive through February 28, 2006, the Company will continue Executive's full-time employment through February 28, 2006. When a new Controller begins employment with the Company, the title and responsibilities of Controller and principal accounting officer will transition from Executive to the new Controller in a manner that allows the transition to coincide in a reasonable manner with a reporting period. Part-time employment of Executive will begin on March 1, 2006 and continue through April 15, 2006. Executive and the Company will execute releases in substantially the same form as contained in this Agreement upon conclusion of full-time status, and again upon conclusion of part-time employment (excluding the Indemnity Agreement and the Confidentiality, Ownership and Non-Competition Agreement).
- During full-time employment, Executive's compensation will continue on current compensation terms, including salary and incentive compensation, benefits and expense reimbursement according to policy. For the avoidance of doubt, Executive will be eligible for her Q1 2006 quarterly bonus at the rate in her current compensation plan for 2005, subject to attainment of applicable performance targets.
- Executive will devote full-time and best efforts to the business of the Company during the period of full-time employment, including continuing current responsibilities. Executive will assist with preparation of and will sign quarterly and annual reports and certifications that are required during the period of employment.
- During part-time employment, Executive's compensation will continue at the rate of $4,000 per month. Medical benefits will also continue during this period. Other employee benefits will apply only as provided in the Company's benefits plans for part-time employees. The Company will reimburse reasonable out-of-pocket expenses incurred according to the Company's policy during part-time employment. After April 15, 2006, Executive will not be entitled to any further compensation or benefits or severance payments.
- During part-time employment until April 15, 2006, Executive will be available for an aggregate of 48 hours, as needed, using best efforts to fulfill reasonably requested tasks.
- Equity incentives, such as stock options and restricted stock, will continue to vest according to the Company's incentive stock plan during full-time and part-time employment, except as provided in Section 1(i).
- During full-time and part-time employment, Executive may be terminated by the Company only for cause. "Cause" means the commission of any act of fraud, embezzlement or dishonesty, any unauthorized use or disclosure by such person of confidential information or trade secrets of the Company or any affiliated company, or any other intentional violation of the Company's Code of Conduct by Executive adversely affecting the business or affairs of the Company or any parent or subsidiary corporation in a material manner.
- Executive will report to the Chief Financial Officer during full-time and part-time employment. Executive will perform such responsibilities and duties as may be assigned consistent with her current areas of responsibility, in the Chief Financial Officer's judgment, so that the succession of the new Controller is efficient, effective and successful. Employment with others will not be entered into during full-time or part-time employment. If Executive elects to leave the Company voluntarily before conclusion of employment, then employment will terminate, compensation and benefits will cease, and equity incentives such as stock options and restricted stock will cease vesting. This Agreement is for the personal services of Executive. Executive shall receive all payments and other benefits to which Executive is entitled under this Agreement through April 15, 2006, unless Executive's employment terminates prior to such date for Cause, due to death or disability, or as otherwise provided in this Agreement, in which event compensation and benefits will cease upon employment termination.
- Provided Executive's part-time employment status continues to April 15, 2006 and for Executive's covenant not to compete with the Company, as provided in this paragraph, the Company agrees to pay Executive $60,000, subject to withholding, according to standard payroll practices. Executive covenants and agrees that from the date of this Agreement until April 15, 2007, Executive will not (whether on her own behalf or on behalf of any person or entity other than the Company) engage in or become involved in a business that directly competes with the Company in any line of business in which it is engaged as of the date of this Agreement. A list of currently competing entities has been furnished by the Company to Executive contemporaneously with the execution and delivery of this Agreement. The parties acknowledge that other businesses may have incidental activities that may compete with a business line of the Company and this covenant is not intended to prohibit employment with a business (not identified on the list) who's primary business is not competitive with the business of the Company, provided that Executive is not actively involved or directly responsible for the incidental activity that competes. This covenant does not prohibit investment (whether directly or through public or private investment funds) in securities of any entity that may compete with the Company, provided such investment does not exceed 5% of the equity securities of such entity and provided Executive is not involved in the management or operations of such competing entity. Executive acknowledges that the Company's business is global and that she has been involved with its business globally, so this restriction will apply throughout the world. Executive acknowledges that these restrictions are reasonably necessary to protect the Company's legitimate business interests, are not overbroad, overlong, or unfair (including in duration and scope), and are not the result of overreaching, duress, or coercion of any kind. Executive confirms that her observance of the covenants will not cause her any undue financial hardship, and that the enforcement of the covenants will not impair her ability to gain employment commensurate with her abilities and on terms fully acceptable to her or otherwise to receive sufficient income to support her and her family and to satisfy her debt obligations. Executive acknowledges that any violation of these covenants would cause the Company irreparable injury or loss. Executive agrees that, for any breach or threatened breach of the covenants of this provision, the Company will be entitled to immediate injunctive relief and that a restraining order and/or an injunction may issue against Executive to prevent or restrain any such breach or threatened breach, in addition to any other rights or remedies at law that the Company may have.
- Full and Complete Release.
Executive, for herself and her heirs, executors, administrators and assigns, does hereby knowingly and voluntarily release and forever discharge the Company and its affiliates, joint ventures, joint venture partners, and benefit plans, and their respective current and former directors, officers, administrators, trustees, employees, agents, and other representatives, from all debts, claims, actions, causes of action (including without limitation those arising under the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. Sec. 201 et seq.; the Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. Sec. 1001 et seq.; the Worker Adjustment and Retraining Notification Act of 1988, 29 U.S.C. Sec. 2101 et seq.; and those federal, state, local, and foreign laws prohibiting employment discrimination based on age, sex, race, color, national origin, religion, disability, veteran or marital status, sexual orientation, or any other protected trait or characteristic, or retaliation for engaging in any protected activity, including without limitation the Age Discrimination in Employment Act of 1967, 29 U.S.C. Sec. 621 et seq., as amended by the Older Workers Benefit Protection Act, P.L. 101-433; the Equal Pay Act of 1963, 9 U.S.C. Sec. 206, et seq.; Title VII of The Civil Rights Act of 1964, as amended, 42 U.S.C. Sec. 2000e et seq.; the Civil Rights Act of 1866, 42 U.S.C. Sec. 1981; the Civil Rights Act of 1991, 42 U.S.C. Sec. 1981a; the Americans with Disabilities Act, 42 U.S.C. Sec. 12101 et seq.; the Rehabilitation Act of 1973, 29 U.S.C. Sec. 791 et seq.; the Family and Medical Leave Act of 1993, 28 U.S.C. Secs. 2601 and 2611 et seq.; and comparable state, local, and foreign causes of action, whether statutory or common law), suits, dues, sums of money, accounts, reckonings, covenants, contracts, claims for costs or attorneys' fees, controversies, agreements, promises, and all liabilities of any kind or nature whatsoever, at law, in equity, or otherwise, KNOWN OR UNKNOWN, fixed or contingent, which she ever had, now has, or may have, or which she, her heirs, executors, administrators or assigns hereafter can, shall, or may have, from the beginning of time through the date on which she signs this Agreement, including without limitation those arising out of or related to her employment or separation from employment with the Company (collectively the "Released Claims"), provided nothing herein releases the Company from its obligations under this Agreement or the Preexisting Agreements, or releases any vested and accrued benefits to which Executive is entitled, or any rights which by law cannot be released.
Executive fully understands and agrees that:
- no rights or claims are released or waived that may arise after the date Executive signs this Agreement;
- Executive is advised to consult with an attorney before signing this Agreement;
- Executive has 21 days from receipt of this Agreement within which to consider whether to sign it;
- Executive has seven days following her execution of this Agreement to revoke the Agreement; and
- this Agreement shall be effective on the date executed by Executive, but Executive shall not have the right to enforce this Agreement until the revocation period of seven days has expired without any such revocation.
Executive acknowledges that some of the payments and benefits given to Executive under this Agreement are in addition to those to which she is otherwise entitled to as a matter of Company policy.
- Release of Claims Against Executive.
- Future Cooperation.
- Indemnification.
- Nondisparagement.
- Complete Agreement.
- Severability.
- Governing Law.
- Successors and Assigns.
- Amendment/Waiver.
- Acknowledgment.
The Company, for itself and its successors and assigns, does hereby knowingly and voluntarily release and forever discharge the Executive and her personal and legal representatives, executors, administrators, heirs, distributees, devisees, legatees and successors from all debts, claims, actions, causes of action, suits, dues, sums of money, accounts, reckonings, covenants, contracts, claims for costs or attorneys' fees, controversies, agreements, promises, and all liabilities of any kind or nature whatsoever, at law, in equity, or otherwise, KNOWN OR UNKNOWN, fixed or contingent, which it ever had, now has, or may have, or which it, its successors or assigns hereafter can, shall, or may have, from the beginning of time through the date on which it signs this Agreement, including without limitation those arising out of or related to Executive's employment or separation from employment with the Company, provided nothing herein precludes the Company from enforcing its rights under this Agreement or the Preexisting Agreements, or its rights related to taxes, advances or reimbursement of expenses arising in the course of Executive's employment relationship with the Company.
Executive covenants and agrees that she shall reasonably cooperate with the Company, so long as such cooperation does not unreasonably interfere with Executive's then current employment or business activities, in any pending or future matters, including without limitation any litigation, investigation, or other dispute, in which he, by virtue of her employment with the Company, has relevant knowledge or information, including, but not limited to (i) meeting with representatives of the Company to provide truthful information regarding her knowledge, (ii) acting as the Company's representative, and (iii) providing, in any jurisdiction in which the Company requests, truthful testimony relevant to said matter. The Company shall reimburse Executive for all of Executive's reasonable out-of-pocket expenses associated with such assistance, including travel expenses and attorneys' fees. If such cooperation occurs after April 15, 2006 and results in devotion of Executive's time exceeding three business days, the Company will compensate Executive for her time at an hourly rate based upon her current base salary.
Nothing in this Agreement shall affect any rights Executive may have to indemnification or advancement of expenses under Article XI of the Company's by-laws in effect as of the date of this Agreement, any written agreement between the Company and Executive, including the Indemnity Agreement, or under applicable law.
Executive will not disparage the Company, its customers or suppliers or the Company's directors, officers, or employees ("Representatives"). The Company and its Representatives will not disparage Executive. "Disparagement" means a negative oral or written statement that can be accurately demonstrated in fact to be attributable to (i) Executive or (ii) the Company or its Representatives (as applicable). Notwithstanding the foregoing, (i) no statement made by either party in the context of any legal or regulatory proceeding shall be deemed to violate the foregoing provisions, and (ii) subject to (i), all communication relating to the termination of Executive's employment with the Company shall be consistent with the Company's Current Report on Form 8-K filed with respect to this matter.
This Agreement is the complete understanding between Executive and the Company in respect of the subject matter of this Agreement and, with the exception of the Preexisting Agreements, supersedes all prior agreements relating to the same subject matter. In signing this Agreement, Executive has not relied upon any representations, promises or agreements of any kind except those set forth herein.
In the event that any provision of this Agreement should be held to be invalid or unenforceable, each and all of the other provisions of this Agreement shall remain in full force and effect. If any provision of this Agreement is found to be invalid or unenforceable, such provision shall be modified as necessary to permit this Agreement to be upheld and enforced to the maximum extent permitted by law.
This Agreement is to be governed and enforced under the laws of the State of Georgia (without regard to Georgia's conflicts of law rules that might call for the application of the law of another jurisdiction).
This Agreement is binding upon and inures to the benefit of the Company and its successors and assigns.
No amendment, modification or discharge of this Agreement shall be valid or binding unless set forth in writing and duly executed by each of the parties hereto.
Executive has carefully read this Agreement, fully understands each of its terms and conditions, and intends to abide by this Agreement in every respect. As such, Executive knowingly and voluntarily signs this Agreement.
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Executive |
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/s/ Xxxxxxx X. Xxxxxxxx Xxxxxxx X. Xxxxxxxx |
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/s/ Xxxx Xxxxx Xxxx Xxxxx |
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