Employment Agreement - RSA Security Inc. and Thomas Schuster
EMPLOYMENT AGREEMENT
This Agreement is made as of the first day of April, 2000 between RSA
Security Inc., a Delaware corporation (the "COMPANY"), and Thomas Schuster, an
employee of the Company (the "EMPLOYEE").
RECITALS
The Employee is currently employed as a Senior Vice President of the
Company. The Company desires to continue to employ the Employee and the Employee
desires to continue to be employed by the Company.
WITNESSETH
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, each intending
to be legally bound hereby, agree as follows:
1. EMPLOYMENT.
(a) The Company hereby agrees to employ the Employee, and the Employee
hereby accepts employment with the Company, upon the terms set forth in this
Agreement, for the period commencing on the date hereof (the "COMMENCEMENT
DATE") and ending June 30, 2002 (the "EMPLOYMENT PERIOD"), unless sooner
terminated in accordance with the provisions of Section 4.
(b) During the Employment Period, the Company shall not:
(i) reduce the Employee's annual base salary or benefits as
provided in Section 3;
(ii) materially diminish the Employee's position, duties,
responsibilities, power, title, capacity or office in effect on the Commencement
Date in order to reduce the Employee's total compensation; provided however,
that the Company may assign the Employee to a new position within the general
function area of the Employee's prior responsibilities during the Employment
Period; or
(iii) require the Employee to relocate the Employee's principal
place of business more than 50 miles from the Employee's principal place of
business as provided in Section 2.
2. TITLE; CAPACITY. During the Employment Period, subject to the terms of
Paragraph 1(b)(ii) above, the Employee shall serve as Senior Vice President,
Worldwide Sales and Field Operations and shall have a principal place of
business at the Company headquarters located at 36 Crosby Drive, Bedford,
Massachusetts. The Employee shall be subject to the supervision of,
<PAGE> 2
and shall have such authority as is delegated to the Employee by, the Board of
Directors of the Company (the "BOARD") or such officer of the Company as may be
designated by the Board. The Employee hereby accepts such employment and agrees
to undertake the duties and responsibilities inherent in such position and such
other duties and responsibilities as the Board or its designee shall from time
to time reasonably assign to him. The Employee agrees to devote the Employee's
entire business time, attention and energies to the business and interests of
the Company during the Employment Period. The Employee agrees to abide by the
rules, regulations, instructions, personnel practices and policies of the
Company and any changes therein which may be adopted from time to time by the
Company. The Employee acknowledges receipt of copies of all such rules and
policies committed to writing as of the date of this Agreement.
3. COMPENSATION AND BENEFITS.
(a) SALARY. The Company shall pay the Employee, in semi-monthly
installments, an annual base salary of no less than $225,000. In January of each
year during the Employment Period, the Employee's base salary shall be subject
to adjustment as determined by the Board.
(b) BENEFITS. The Employee shall be entitled to participate in all
bonus and benefit programs that the Company establishes and makes available to
its employees, if any, to the extent that Employee's position, tenure, salary,
age, health and other qualifications make him eligible to participate,
including, but not limited to, health, dental, disability and life insurance.
(c) BONUS. The Employee shall be entitled to whatever incentive
payments he qualifies for under the "RSA Security Inc. 2000 Compensation Plan"
attached hereto as Exhibit A.
(d) MISCELLANEOUS. The Employee shall be entitled to a monthly car
allowance of $525 and up to $3,000 per year for the expenses of personal
financial planning. In addition, the Company shall continue to honor the
Employee's current pension scheme, whereby each year the Company will contribute
an amount equal to 10% of the sum of (i) the Employee's annual base salary and
(ii) the commission the Employee would earn if he achieved 100% of his quota, as
set forth in the Employee's compensation plan for such year, which pension
amount shall be paid in 12 monthly installments to Employee's designated
accounts.
4. EMPLOYMENT TERMINATION DURING THE EMPLOYMENT PERIOD.
(a) During the Employment Period, the employment of the Employee
by the Company pursuant to this Agreement shall terminate only upon the
occurrence of any of the following:
(i) at the election of the Company for "Cause" (as defined
below), in accordance with the terms of Paragraph 4(c) below;
(ii) upon the death or disability of the Employee;
2
<PAGE> 3
(iii) at the election of the Employee, upon thirty (30) days
prior written notice of termination; or
(iv) at the election of the Company, upon thirty (30) days
prior written notice of termination.
(b) DEFINITION OF "CAUSE." For purposes of this Agreement, "CAUSE"
for termination shall be deemed to exist upon:
(i) a good faith finding by the Company of the failure of the
Employee to perform his assigned duties for the Company, in accordance with the
process set forth in Paragraph 4(c) below; or
(ii) the conviction of the Employee of, or the entry of a
pleading of guilty or nolo contendere by the Employee to, any felony involving
dishonesty or moral turpitude; or
(iii) any material breach by the Employee of the terms of this
Agreement or of any written agreement between the Employee and the Company
relating to proprietary information, confidentiality, non-competition or
non-solicitation.
(c) DETERMINATION OF NONPERFORMANCE OF DUTIES. Within ninety (90) days
following the date set forth above, the Employee's immediate supervisor and the
Employee shall agree in writing to a set of performance metrics relating to the
Employee's duties. At any time during the Employment Period, the Employee's
immediate supervisor may, at his or her reasonable discretion, give the Employee
written notice that the Employee has not performed his duties in accordance with
such performance metrics. The Employee shall have sixty (60) days from the date
of receipt of such notice (the "CURE PERIOD") to cure such failure. Upon
expiration of the Cure Period, in the event that the Employee's immediate
supervisor makes a good faith finding that the Employee has not cured the
failure to such supervisor's reasonable satisfaction, then the Employee's
employment shall terminate on the 30th day following expiration of the Cure
Period.
(d) DEFINITION OF "DISABILITY." For purposes of this Agreement,
"DISABILITY" shall mean the inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
which can be expected to result in death or which has lasted or can be expected
to last for a continuous period of not less than 12 months.
5. TERMINATION DURING THE EMPLOYMENT PERIOD.
(a) In the event the Employee's employment with the Company is
terminated during the Employment Period: (i) for Cause, as set forth in
Paragraph 4 above, (ii) voluntarily by the Employee, or (iii) by reason of the
Employee's death or disability, the Company shall pay to the Employee or his
estate the compensation and benefits which would otherwise be payable to the
Employee through the last day of his actual employment by the Company.
3
<PAGE> 4
(b) In the event the Employee's employment with the Company is
terminated without cause, the Company shall have the following obligations:
(i) if not previously paid, the Company shall pay to the
Employee the compensation and benefits which would otherwise be payable to the
Employee through the last day of his actual employment by the Company;
(ii) the Company shall pay to the Executive, as compensation for
the Employee `s loss of employment, an amount equal to one half the Employee's
annual base salary plus one month of salary for each full year of service with
the Company, plus the amount of any bonuses accrued by the Employee at the time
of such termination (in all cases less any deductions required by law), such
amount to be paid in equal installments in accordance with the Company `s normal
payroll practices over a period of six months plus one month for each full year
of the Employee's service with the Company (the "CONTINUATION PERIOD");
(iii) during the Continuation Period the Company shall provide the
Employee with medical and dental insurance benefits identical or substantially
similar to those which the Employee was receiving immediately prior to the
written notice of termination. On the date following the termination of the
Continuation Period, the Employee shall be eligible to commence benefit coverage
in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1995,
as amended; and
(iv) the Company shall provide executive outplacement services to
the Employee, pursuant to its current policies and procedures, with a recognized
outplacement support firm or reimburse the Employee for executive outplacement
services incurred by the Employee within one year of the date of termination of
employment in an amount not to exceed $10,000.
6. GENERAL.
(a) PRIOR AGREEMENTS. This Agreement supersedes and replaces any prior
written or oral agreements between the Company and the Employee relating to the
subject matter covered hereby.
(b) GOVERNING LAW. The terms of this Agreement shall be governed by the
internal laws (and not the law of conflicts) of the Commonwealth of
Massachusetts.
(c) BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Company, its successors and assigns, including any
corporation with which or into which the Company may be merged or which may
succeed to the assets or business of the Company.
(d) ENTIRE AGREEMENT; MODIFICATION. This Agreement constitutes the
entire agreement of the parties hereto with respect to the subject matter hereof
and may not be modified or amended in any way except in writing by the parties
hereto.
4
<PAGE> 5
(e) SAVINGS CLAUSE. In case any provision of this Agreement shall be
invalid, illegal or otherwise unenforceable, the validity, legality and
enforceability of the remaining provisions shall in no way be affected or
impaired thereby.
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
hereunto executed this Agreement the day and year first written above.
RSA Security Inc.
By: /s/ Vivian Vitale
------------------------------------
Name: Vivian Vitale
Title: Senior VP, Human Resources
EMPLOYEE
/s/ Thomas Schuster
---------------------------------------
Thomas Schuster
5