EXHIBIT 10.3
ENTRUST, INC.
AMENDMENT TO SEVERANCE AND CHANGE
IN CONTROL AGREEMENT
This amendment (the
“Amendment”) is made by and between Kevin Simzer (the
“Executive”), Entrust Limited (the “Entrust
Canada”), and Entrust, Inc., a Maryland corporation (the
“Company” and together with Entrust Canada and the
Executive hereinafter collectively referred to as the
“Parties”) on December 31, 2008.
WITNESSETH:
WHEREAS , the Parties previously entered into a
Severance and Change in Control Agreement, as amended and restated,
dated February 15, 2007 with Kevin Simzer (the
“Agreement”); and
WHEREAS , the Parties wish to amend the Agreement, and
bring certain terms into documentary compliance with
Section 409A of the Internal Revenue Code and the final
regulations and other official guidance thereunder (“Section
409A”) so as to avoid the imposition of any additional tax
under Section 409A, as set forth below.
NOW, THEREFORE
, for good and valuable
consideration, Executive and the Company agree that the Agreement
is hereby amended as follows:
1. Change in Control .
Section 1(d) is hereby amended in its entirety to read as
follows:
d. “ Change in Control
” shall mean the occurrence of any of the following
events:
(i) Change in Ownership of the
Company . A change in the ownership of the Company which occurs
on the date that any one person, or more than one person acting as
a group (“Person”), acquires ownership of the stock of
the Company that, together with the stock held by such Person,
constitutes more than 50% of the total voting power of the stock of
the Company, except that for purposes of this subsection (d), the
acquisition of additional securities by any one Person, who is
considered to own more than 30% of the total voting power of the
securities of the Company will not be considered a Change in
Control;
(ii) Change in Effective Control
of the Company . A change in effective control occurs either
(1) on the date on the date that any Person acquires ownership
of the stock of the Company that, together with the stock acquired
by such Person during the preceding 12 months, constitutes 30% or
more of the total voting power of the stock of the Company, except
that for purposes of this subsection (a), the acquisition of
additional securities by any one Person, who is considered to own
more than 50% of the total voting power of the securities of the
Company will not be considered a Change in Effective Control, or (2
on the date that a majority of members of the Board is replaced
during any 12 month period by directors whose appointment or
election is not endorsed by a majority of the
members of the Board prior to the
date of the appointment or election. For purposes of this
subsection (b), if any Person is considered to be in effective
control of the Company, the acquisition of additional control of
the Company by the same Person will not be considered a Change in
Control; or
(iii) Change in Ownership of a
Substantial Portion of the Company’s Assets . A change in
the ownership of a substantial portion of the Company’s
assets which occurs on the date that any Person acquires (or has
acquired during the 12 month period ending on the date of the most
recent acquisition by such person or persons) assets from the
Company that have a total gross fair market value equal to or more
than 40% of the total gross fair market value of all of the assets
of the Company immediately prior to such acquisition or
acquisitions. For purposes of this subsection (c), gross fair
market value means the value of the assets of the Company, or the
value of the assets being disposed of, determined without regard to
any liabilities associated with such assets.
For purposes of this
Section 1(d), persons will be considered to be acting as a
group if they are owners of a corporation that enters into a
merger, consolidation, purchase or acquisition of stock, or similar
business transaction with the Company.
Notwithstanding the foregoing, a
transaction will not be deemed a Change in Control unless the
transaction qualifies as a change in control event within the
meaning of Code Section 409A, as it has been and may be
amended from time to time, and any proposed or final Treasury
Regulations and Internal Revenue Service guidance that has been
promulgated or may be promulgated thereunder from time to time
(“Section 409A”).
Further and for the avoidance of
doubt, a transaction will not constitute a Change in Control if:
(1) its sole purpose is to change the state of the
Company’s incorporation, or (2) its sole purpose is to
create a holding company that will be owned in substantially the
same proportions by the persons who
