EXHIBIT 10.13
SEPARATION
AGREEMENT
AND
FULL AND COMPLETE
RELEASE
This Separation Agreement and Full and Complete Release
("Agreement") is entered into between H. Douglas Johns
("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 the
separation of Executive from the Company effective January 2,
2007 ("Separation Date"); and
Whereas, the Company and Executive have previously entered into
an Indemnity Agreement dated 14 July 2003, a Retention Agreement
dated 9 July 2003, and an Agreement on Confidentiality, Work
Product and Non-Solicitation dated 1 September 2002 (the
"Preexisting Agreements").
Whereas, the Executive has consulted with an attorney and has
relied upon the advice of his 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:
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Fixed Term Employment.
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Executive's employment with the Company shall terminate on the
Separation Date. Following December 31, 2005 , Executive
will begin part-time employment which will continue through the
Separation Date. Compensation and benefits will cease upon close of
business on the Separation Date. Executive will execute a release
in substantially the same form as contained in this Agreement on
the Separation Date (excluding the Indemnity Agreement and the
Confidentiality, Ownership and Non-Competition Agreement).
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During part-time employment, Executive's compensation will be at
the rate of $18,150 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. After the Separation Date, Executive will not be
entitled to any further compensation or benefits or severance
payments. For the avoidance of doubt, Executive will be eligible
for his full 2005 annual and quarterly bonuses as indicated in his
current compensation plan for 2005, subject to attainment of
applicable performance targets. During part-time employment through
the Separation Date, only salary as stated above will be payable,
i.e. no incentive compensation or bonuses are applicable. During
part-time employment through the Separation Date no minimum number
of hours is intended and availability will be as agreed between the
parties.
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Executive will report to the Chief Executive Officer and perform
such responsibilities as the Chief Executive Officer may reasonably
assign, consistent with current responsibilities. If Executive
elects to leave the Company voluntarily and begins a full-time
senior officer position at another company prior to the Separation
Date, then part-time 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 the Separation Date, unless Executive's
employment terminates prior to the Separation 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. "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.
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Equity incentives, such as stock options and restricted stock, will
continue to vest according to the Company's incentive stock plans
through the Separation Date. Under the Company's incentive stock
plans, Executive will have 90 days after the Separation Date to
exercise vested stock options.
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Provided Executive's
part-time employment status continues to January 2, 2007 and for
Executive's covenant not to compete with the Company, as provided
in this paragraph, the Company agrees that the remaining 12,500
shares of restricted stock granted to Executive on January 27, 2004
will fully vest on January 2, 2007 instead of January 27, 2007.
Executive covenants and agrees that from the date of this
Agreement until one year following the Separation Date, Executive
will not (whether on his own behalf or on behalf of any person or
entity other than the Company) hire or solicit for hire any
employee of the Company, or 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 entit
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