Employment Agreement - NetScreen Technologies Inc. and Rakesh Loonkar
August 22, 2002
Mr. Rakesh Loonkar
*****
*****
Dear Mr. Loonkar:
NetScreen Technologies, Inc. ("NetScreen") is pleased to offer you a position as
VICE PRESIDENT, STRATEGIC SALES, reporting directly to Robert Thomas, President
and Chief Executive Officer, on the terms set forth in this offer letter. You
will be paid a base salary of $8,333.33 paid twice monthly, which is equivalent
to an annual base salary of $200,000.00. In addition to your salary, you will be
eligible to receive NetScreen's corporate bonus in accordance with NetScreen
corporate policy and benefits that NetScreen customarily makes available to
employees in positions comparable to yours. As with all employees, this offer is
contingent upon your ability to show proof of eligibility for work in this
country as well as successful background and reference checks.
Please note that this offer letter is made in connection with an Agreement and
Plan of Merger (the "Merger Agreement"), by and among NetScreen, a wholly owned
subsidiary of NetScreen and OneSecure, Inc. ("OneSecure"), pursuant to which
NetScreen will acquire OneSecure (the "Merger"). This offer letter shall become
effective only upon, and the employment relationship between NetScreen and you
provided in this offer letter shall commence as of, the Effective Time, as
defined in the Merger Agreement. This offer letter shall be null and void if the
Merger Agreement or the transactions contemplated thereby have been terminated.
Unless otherwise defined herein, all capitalized terms used herein shall have
the same meanings given to such terms in the Merger Agreement.
In the Merger, your OneSecure options, will be assumed by NetScreen and will be
exercisable for shares of NetScreen Common Stock after conversion according to
an exchange ratio that will be determined at the Effective Time of the Merger.
Shortly after the Merger becomes effective, we will send you a letter with the
details of the conversion. Your existing OneSecure options will retain the
current vesting schedule set out in your existing OneSecure stock option
agreement and will continue to be governed by the terms of that agreement other
than the number of shares and exercise price, which will be converted according
to the exchange ratio that will be determined at the Effective Time of the
Merger ("OneSecure Options"). Your shares of OneSecure common stock subject to a
right of repurchase will retain the current vesting schedule set out in your
Restricted Common Stock Purchase Agreement and the enclosed Stock Vesting Waiver
Agreement and the shares will continue to be governed by the terms of those
agreements other than the number of shares and repurchase price, which will be
converted according to the exchange ratio that will be determined at the
Effective Time of the Merger.
In addition, subject to approval of the Board of Directors of NetScreen, you
will be granted an option to purchase up to 125,000 shares of NetScreen Common
Stock (the "NetScreen Options") pursuant to the terms of NetScreen's 2001 Equity
Incentive Plan. The exercise price for your NetScreen Options will be the
closing price of NetScreen's Common Stock on the date of grant. Assuming that
you remain an employee, your NetScreen Options will vest as set out in the
schedule in your stock option agreement and the options will be governed by the
terms of that agreement. Given your position with NetScreen following
***** Confidential treatment has been requested for portions of this exhibit.
The copy filed herewith omits the information subject to the
confidentiality request. Omissions are designated as *****. A complete
version of this exhibit has been filed with the Securities and Exchange
Commission.
<PAGE>
the Merger and during your employment at NetScreen, if there is a Sale of
NetScreen (as defined in Exhibit A) and your employment is terminated without
cause (also as defined in Exhibit A) in connection with a Sale of NetScreen,
then upon such termination, the option will immediately vest with respect to
fifty percent (50%) of the shares unvested at the closing of the Sale of
NetScreen. In addition, if you are terminated for cause within six months from
the date of Closing, your OneSecure Options will immediately fully vest.
Furthermore, you will be eligible to receive a cash bonus of $50,000.00, payable
twelve (12) months from the date of the Closing, provided you are still employed
by NetScreen.
NetScreen offers comprehensive medical and dental plans in which you will be
eligible on the same terms as generally available to other NetScreen employees.
Please refer to the related documents for more information on these plans. You
also will be eligible for paid time off benefits under the same terms and
conditions as other NetScreen employees, however, your date of hire with
OneSecure will be your date of hire, for purposes of paid time off accrual
rates.
NetScreen asks that you complete the enclosed Employee Confidential Information
and Inventions Agreement (the "Confidentiality Agreement") prior to commencing
employment. The Confidentiality Agreement requests that a departing employee
refrain from using or disclosing NetScreen's Proprietary Information (as defined
in the Confidentiality Agreement) in any manner which might be detrimental to,
or conflict with, the business interests of NetScreen or its employees. The
Confidentiality Agreement does not prevent a former employee from using his/her
general knowledge and experience - no matter when and how gained - in any new
field or position. It is important to stress that NetScreen expects that, during
your employment with NetScreen, you will make no use of any confidential or
proprietary information belonging to your former employers (not including
OneSecure). You should also not retain in your possession and should return to
your former employers (not including OneSecure) any materials in tangible form,
which might contain such information. If you should have any questions about the
Confidentiality Agreement, please do not hesitate to call me.
We hope that you and NetScreen will find mutual satisfaction with your
employment. Your employment is "at will", meaning employees have the right to
terminate their employment at any time with or without cause or notice, and
NetScreen reserves for itself an equal right. We both agree that any dispute
arising out of your employment or a breach of any covenant of good faith and
fair dealing related to your employment, shall be conclusively settled by
arbitration in accordance with the Voluntary Labor Arbitration Rules of the
American Arbitration Association ("AAA") at the AAA office in San Jose,
California.
This offer letter, the Noncompetition Agreement, the Stock Vesting Waiver
Agreement, your OneSecure Option Agreements, your NetScreen Option Agreement and
the Confidentiality Agreement contain the entire agreement with respect to your
employment, and your right to shares of capital stock of NetScreen and merges
and supercedes all prior proposals and agreements regarding the grant of stock
options or the issuance of shares of capital stock of NetScreen. The terms of
this offer may only be changed by written agreement, although NetScreen may from
time to time, in its sole discretion, adjust the salaries and benefits paid to
you and its other employees.
Please sign and date where indicated below and return this offer letter together
with a completed Noncompetition Agreement, the Stock Vesting Waiver Agreement,
and Confidentiality Agreement to NetScreen as soon as possible.
<PAGE>
We hope that you and NetScreen will find mutual satisfaction with your
employment. We look forward to you joining us and anticipate a mutually
rewarding relationship.
Best Regards,
/s/ Edie Rodriguez
Edie Rodriguez
Vice President of Human Resources
Accepted:
/s/ Rakesh Loonkar
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Rakesh Loonkar
August 22, 2002
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Date
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Start Date
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EXHIBIT A
"Cause" means (i) willfully engaging in gross misconduct that is materially and
demonstrably injurious to NetScreen; (ii) willful act or acts of dishonesty
undertaken by Optionee and intended to result in substantial gain or personal
enrichment for Optionee at the expense of NetScreen; or (iii) willful and
continued failure to substantially perform your duties with NetScreen or its
successor (other than incapacity due to physical or mental illness); provided
that the action or conduct described in clause (iii) above will constitute
"Cause" only if such failure continues after the Board of Directors has provided
Optionee with a written demand for substantial performance setting forth in
detail the specific respects in which it believes Optionee has willfully and not
substantially performed his duties thereof and a reasonable opportunity (to be
not less than 30 days) to cure the same. For the above purposes, a termination
by NetScreen without Cause includes a termination of employment by Optionee
within 30 days following any of the following events: (x) the assignment of any
duties to Optionee inconsistent with, or reflecting a materially adverse change
in, Optionee's position, duties or responsibilities with NetScreen (or any
successor) without Optionee's concurrence; or (y) the relocation of NetScreen's
principal executive offices, or relocating Optionee's principal place of
business, in excess of fifty (50) miles from NetScreen's current executive
offices located in Sunnyvale, California.
The term "Sale of NetScreen" means any sale or disposition of all or
substantially all of the assets of NetScreen, or any merger or consolidation of
NetScreen with or into any other corporation or corporations or other entity, or
any other corporate reorganization in which more than 50% of NetScreen's voting
power is transferred.