Stock Vestlng Waiver Agreement - NetScreen Technologies Inc. and Rakesh Loonkar
STOCK VESTlNG WAIVER AGREEMENT
This Stock Vesting Waiver Agreement (this "Agreement") is made and entered
into as of August 22, 2002 by and between the undersigned ("Employee") and
NetScreen Technologies, Inc., a Delaware Corporation ("Acquirer"). This
Agreement shall be effective as of the closing of the Merger (as defined below).
RECITALS
Whereas, Employee is a party to that certain Restricted Common Stock
Purchase Agreement dated February 18, 2000 by and between the Company and
Employee (the "Purchase Agreement").
Whereas, in connection with that certain Agreement and Plan of Merger dated
August 22, 2002 (the "Merger Agreement") by and among the Company, Acquirer and
Tango Acquisition Corp., a Delaware corporation and wholly owned subsidiary of
Acquirer ("Merger Sub"), Employee hereby acknowledges and agrees that, effective
upon the effective time of the merger of Merger Sub with the Company (the
"Merger"), Employee shall commence employment with Acquirer in accordance with
that certain letter agreement dated August 22, 2002 by and between Employee and
Acquirer (the "Offer Letter").
Now, Therefore, in consideration of the foregoing and the mutual promises,
covenants and conditions contained herein, the parties hereby agree as follows:
1 Acknowledgements by Employee.
(a) Employee hereby acknowledges and agrees that, notwithstanding
Section 5.6 of the Purchase Agreement, the commencement of Employee's employment
with Acquirer, in the position and on the terms set forth in the Offer Letter,
shall not constitute a basis for Employee to leave either the Company or
Acquirer, as the case may be, for Good Reason (as defined in the Purchase
Agreement), and Employee hereby waives any lapsing of Company's or Acquirer's
right of repurchase pursuant to the provisions of Section 5 of the Purchase
Agreement in connection with the Merger or in connection with Employee's
employment with Acquirer pursuant to the terms of the Offer Letter.
(b) Employee hereby acknowledges that, notwithstanding Section 5.6 of
the Purchase Agreement, neither the Merger nor the conversion of Employee's
shares of Company common stock acquired pursuant to the Purchase Agreement into
shares of Acquirer common stock (and potentially cash) shall cause the
Repurchase Right (as defined in the Purchase Agreement) to terminate.
(c) The acknowledgements made and given by Employee in this Section 1
are made and given with respect only to the transactions contemplated by the
Merger Agreement and not with respect to any other asset purchase, stock
purchase, merger, consolidation or similar transaction involving the Company to
which Employee's rights under the Purchase Agreement would apply.
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2. Acknowledgements by Acquirer.
(a) Notwithstanding the provisions of Section 1, Acquirer hereby
acknowledges and agrees that, upon Employee's termination without Cause or
departure from Acquirer for Good Reason within three months following the
closing of the Merger, Company's and Acquirer's right of repurchase under the
Purchase Agreement shall lapse with respect to all Unvested Shares (as defined
in the Purchase Agreement).
(b) For Purposes of Section 2(c), (i) "Cause" shall have the
meaning given to such term in Section 5.6 of the Purchase Agreement and the term
"Company" shall mean NetScreen Technologies, Inc., a Delaware corporation, its
successors and assigns and (ii) "Good Reason" shall mean Employee's resignation
or departure by reason of a material adverse diminution in Employee's title,
responsibilities, duties or base salary as measured against Employee's title,
responsibilities, duties and base salary immediately following the closing of
the Merger rather than Employee's employment with the Company prior to the
closing of the Merger.
3. Miscellaneous.
(a) Entire Agreement. This Acknowledgement and the documents
referred to herein constitute the entire agreement and understanding of the
parties with respect to the subject matter of this Acknowledgement, and
supersede all prior understandings and agreements, whether oral or written,
between or among the parties hereto with respect to the specific subject matter
hereof.
(b) Construction of Agreement. This Acknowledgement has been
negotiated by the respective parties hereto and their attorneys and the language
hereof will not be construed for or against either party.
(c) Governing Law. The internal laws of the State of California
(irrespective of its choice of law principles) will govern the validity of this
Acknowledgement, the construction of its terms, and the interpretation and
enforcement of the rights and duties of the parties hereto.
(d) Severability. If any provision of this Acknowledgement, or
the application thereof, will for any reason and to any extent be invalid or
unenforceable, then the remainder of this Acknowledgement and the application of
such provision to other persons or entities or circumstances will be interpreted
so as reasonably to effect the intent of the parties hereto.
(e) Amendment and Waivers. Any term or provision of this
Acknowledgement may be amended, and the observance of any term of this
Acknowledgement may be waived (either generally or in a particular instance and
either retroactively or prospectively), only by a writing signed by the party to
be bound thereby.
<PAGE>
This Acknowledgement by Employee may be executed in counterparts, each
of which will constitute an original and all of which together will constitute
one agreement.
EMPLOYEE:
By: /s/ Rakesh Loonkar
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Print Name: Rakesh Loonkar
AGREED AND ACCEPTED:
NETSCREEN TECHNOLOGIES, INC.
By: /s/ Robert D. Thomas
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Name: Robert D. Thomas
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Title: President and Chief Executive Officer
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[Signature Page to Stock Vesting Waiver Agreement]