Severance Agreement - Security Dynamics Technologies Inc. and Albert E. Sisto
TRANSITION AGREEMENT AND RELEASE
This TRANSITION AGREEMENT AND RELEASE (the "Agreement") is made as of
the 22nd day of January, 1999, by and between Security Dynamics Technologies,
Inc. (the "Company) and Albert E. Sisto (the "Employee").
WHEREAS, the parties wish to resolve amicably the Employee's transition
from active employment with the Company to inactive status;
NOW, THEREFORE, in consideration of the promises and conditions set
forth herein, the sufficiency of which is hereby acknowledged, the Company and
the Employee agree as follows:
1. TRANSITION DATE. The Employee shall become an inactive employee on
January 29, 1999 thereafter this date shall be referred to as the "Transition
Date"). Until the Transition Date, the Employee will devote his entire business
time, attention and energies to the business and interests of the Company.
2. CONSIDERATION. In consideration for the execution of this Agreement,
during the period commencing on the Transition Date and, unless extended
pursuant to the terms of Paragraph 2(d) of this Agreement, terminating on March
31, 2000 (inclusive of 160 hours or 4 weeks vacation time accrued) (the
"Wind-down Period"):
(a) The Company will pay the Employee his base salary in effect on
the Transition Date, less all applicable state and federal
taxes, and 401(k) contributions, on the same schedule as the
Employee's salary is currently paid;
(b) The Company will provide the Employee with medical, dental and
other
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insurance benefits on the same cost-sharing basis as the
Company provides such benefits to its other employees;
PROVIDED HOWEVER, that in the event that the Employee accepts
a new offer of employment during the Wind-down Period, the
Employee will give the Company notice of this event, and the
Company shall have no further obligation to provide Employee
with such benefits as of the date on which the Employee
becomes eligible to receive benefits coverage from his new
employer; and
(c) The Employee's stock options dated November 12, 1997, June 26,
1998 and July 16, 1998 will continue to vest in accordance
with the schedules set forth in Attachments A, B and C and
under the terms of their repricing effective August 12, 1999
(see Attachment D). The Employee acknowledges and agrees that
the arrangement described in this paragraph 2 (c) may result
in the conversion of Employee's incentive stock options to
nonqualified stock options, and the Company makes no
representations regarding any tax treatment of Employee's
stock options as a result of the Employee's execution of this
Agreement. These options will expire on the 91st day following
termination of the Wind-down Period.
3. EFFECT ON EMPLOYEE'S EMPLOYMENT AGREEMENT. Upon execution of this
Agreement, the Employment Agreement dated September 4, 1998 between the Employee
and the Company shall be terminated and of no further force and effect.
4. RELEASE. The Employee hereby fully, forever, irrevocably and
unconditionally releases and discharges the Company, its officers, directors,
stockholders, corporate
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affiliates, agents and employees from any and all claims, charges, complaints,
demands, actions, causes of action, suits, rights, debts, sums of money, costs,
accounts, reckonings, covenants, contracts, agreements, promises, doings,
omissions, damages, executions, obligations, liabilities, and expenses
(including attorney's fees and costs), of every kind and nature which he ever
had or now has against the Company, its officers, directors, stockholders,
corporate affiliates, agents and employees, including, but not limited to, all
claims relating to the Employment Agreement, and claims arising out of his
employment; all employment discrimination claims under Title VII of the Civil
Right Act of 1964, 42 U.S.C. ss.2000e ET SEQ., the Age Discrimination in
Employment Act, 29 U.S.C. ss.621 ET SEQ., M.G.L. c. 151B, ss.1 ET SEQ., the
Americans With Disabilities Act, 29 U.S.C. ss.706 ET SEQ., and the National
Labor Relations Act, 29 U.S.C. ss.151 ET SEQ.; damages arising out of all
employment discrimination claims; the Massachusetts Fair Employment Practices
Act, M.G.L. c.151B ss.1 ET SEQ., all claims under the Massachusetts Civil Rights
Act, the Employee Retirement Income Security Act, 29 U.S.C. ss.1001 ET SEQ., the
Family and Medical Leave Act, 29 U.S.C. ss.2601 ET SEQ., and California
Government Code ss. 19200 ET SEQ.; wrongful discharge claims, breach of contract
claims and all other statutory or common law claims and damages.
5. REPRESENTATION BY EMPLOYEE. The Employee further represents and
warrants that he has not filed any complaints, charges, or claims for relief
against the Company, its officers, directors, stockholders, corporate
affiliates, agents or employees with any local, state or federal court or
administrative agency which currently are outstanding.
6. CIVIL CODE. The Employee agrees that this Agreement is intended to
apply to
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claims not known or suspected to exist at the time of the execution of this
Agreement. After an opportunity to confer with counsel, the Employee hereby
waives all of his rights under ss. 1542 of the California Civil Code, which
states as follows:
A general release does not extend to claims, which a creditor does not
know or suspect to exist in his favor at the time of executing the
release, which if known by him must have materially affected his
settlement with the debtor.
7. NO REINSTATEMENT. The Employee understands and agrees that as a
condition for payment to him of the above-described sums, he shall not be
entitled to any employment with the Company or with any of its corporate
affiliates at any time in the future, and he will not apply for employment with
the Company or with any of its corporate affiliates.
8. NATURE OF AGREEMENT. The Employee understands and agrees that this
Agreement is a transition agreement and does not constitute an admission of
liability or wrongdoing on the part of the Company.
9. AMENDMENT. This Agreement shall be binding upon the parties and may not
be abandoned, supplemented, changed or modified in any manner, orally or
otherwise, except by an instrument in writing of concurrent or subsequent date
sighed by a duly authorized representative of the parties hereto. This Agreement
is binding upon and shall inure to the benefit of the parties and their
respective agents, assigns, heirs, executors, successors and administrators.
10. VALIDITY. Should any provision of this Agreement be declared or be
determined by any court of competent jurisdiction to be illegal or invalid, the
validity of the remaining parts, terms, or provisions shall not be affected
thereby and said illegal and
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invalid part, term or provision shall be deemed not to be a part of this
Agreement.
11. CONFIDENTIALITY. The Employee understands and agrees that the terms and
contents of this Agreement, and the contents of the negotiations and discussions
resulting in the Agreement, shall be maintained as confidential by the Employee,
his agents and representatives, and none of the above shall be disclosed except
to the extent required by federal or state law or as otherwise agreed to in
writing by the authorized agent of each party.
12. ENTIRE AGREEMENT. This Agreement contains and constitutes the entire
understanding and agreement between the parties hereto with respect to this
arrangement and cancels all previous oral and written negotiations, agreements,
commitments, and writings in connection therewith including the Employment
Agreement; PROVIDED that the Employee acknowledges that he has continuing
obligations to the Company under his "Employee Nondisclosure and Developments
Agreement" (the "Nondisclosure Agreement"), a copy of which is attached as
EXHIBIT A. Any violation by the Employee of this Agreement or the Nondisclosure
Agreement or any other agreement shall entitle the Company to cease salary and
benefits continuation and recoup any amounts paid hereunder. In addition,
Employee's stock options shall cease to vest as of the date of any such
violation.
13. APPLICABLE LAW. This Agreement shall be governed by the laws of the
Commonwealth of Massachusetts.
14. VOLUNTARY ASSENT. The Employee affirms that no other promises or
agreements of any kind have been made to or with him by any person or entity
whatsoever to cause
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him to sign this Agreement, and that he fully understands the meaning and intent
of this Agreement. The Employee states and represents that he has had an
opportunity to fully discuss and review the terms of this Agreement with an
attorney. The Employee further states and represents that he has carefully read
this Agreement and understands the contents herein, freely and voluntarily
assents to all of the terms and conditions hereof, and signs his name of his own
free act.
15. ACKNOWLEDGMENTS. The Employee acknowledges that he has been given
twenty-one (21) days to consider this Agreement and that the Company advised him
to consult with any attorney of his own choosing prior to signing this
Agreement. The Employee may revoke this Agreement for a period of seven (7) days
after the execution of this Agreement, and the Agreement shall not be effective
or enforceable until the expiration of this seven (7) day revocation period.
IN WITNESS WHEREOF, all parties have set their hand and seal to this
Agreement as of the date written above.
By: /s/ Arthur W. Coviello, Jr. Date:
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By: /s/ D. James Bidzos Date:
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