Employment Agreement - Secure Computing Corp. and Glenn Mackintosh
EMPLOYMENT AGREEMENT
This Agreement is made as of _____________, 1996 by and
between Secure Computing Corporation, a Delaware corporation (the "Company"),
and Glenn Mackintosh (the "Executive").
W I T N E S S E T H :
WHEREAS the Company desires to employ Executive in accordance
with the terms and conditions stated in this Agreement; and
WHEREAS Executive desires to accept that employment
pursuant to the terms and conditions of this Agreement;
NOW THEREFORE, in consideration of the covenants and
agreements contained herein, the parties hereto agree as follows:
I. EMPLOYMENT
1.1 Employment As Executive. The Company hereby agrees to employ
Executive as Vice President and General Manager of the Firewall Division,
reporting directly to the Chief Executive Officer of the Company, commencing the
date hereof and continuing until the earlier of (i) the third anniversary of the
date hereof, or (ii) the date his employment terminates pursuant to Article III
hereof. Executive accepts such employment pursuant to the terms of this
Agreement. Executive shall perform such duties and responsibilities as may be
determined from time to time by the Board of Directors of the Company. Executive
shall relocate (the "Relocation") from Toronto, Ontario to the Minneapolis-St.
Paul, Minnesota metropolitan area (the "Twin Cities").
1.2 Exclusive Services. Executive agrees to devote his full working
time, attention and energy to performing his duties and responsibilities to the
Company under this Agreement during the term of this Agreement.
II. COMPENSATION, BENEFITS AND PERQUISITES
2.1 Base Salary. During the period this Agreement is in effect, the
Company shall pay Executive a base salary at a rate equal to U.S. $125,000 per
year. The base salary shall be payable bi-weekly. The Board of Directors of the
Company will review the base salary from time to time, no less frequently than
annually, and may in its sole discretion adjust it upward, but not downward, to
reflect performance, appropriate industry guideline data and other factors.
2.2 Relocation. The Company will reimburse Executive for all reasonable
documented expenses relating to the Relocation; provided that such expenses
shall not include any costs, fees, losses or expenses associated with the sale
or purchase of a residence, except that the Company will pay a customary real
estate brokerage commission on the sale of Executive's present primary residence
and closing costs associated with the purchase of Executive's new residence. The
Company will also cover all reasonable documented expenses relating to trips
that Executive and his significant other take from Toronto to the Twin Cities
for house hunting and other purposes related to the Relocation. The Company will
also cover the cost of temporary housing in the Twin Cities as needed; provided,
however, that the terms of such temporary housing, including the duration of
time therefor, are authorized and approved in writing by the Chief Executive
Officer of the Company.
2.3 Bonuses. If certain performance goals established from time to time
by the Board of Directors of the Company are met, the Executive will be entitled
to a performance bonus of 35% of base salary following each anniversary of the
date hereof. The amount of such bonus may be increased, but not decreased, by
the Board of Directors of the Company.
2.4 Stock Options. The Compensation Committee of the Board of Directors
of the Company has granted to the Executive, subject to completion of the
amalgamation of Border Network Technologies Inc. with a subsidiary of the
Company and the execution and delivery of this Agreement, an option to purchase
shares of common stock, par value $0.01 per share, of the Company ("Shares") as
follows: a non-statutory stock option under the Company's 1995 Omnibus Stock
Plan (the "Plan") to purchase 40,000 Shares at an exercise price of U.S. $27.00
per share. Such option shall vest and become exercisable as to one-third of such
shares on each of the first, second and third anniversaries of the date hereof.
Additional awards under the Plan may be made to the Executive in the discretion
of the Compensation Committee.
2.5 Vacations. Executive shall be entitled to vacation in accordance
with policies of the Company; provided that Executive shall be entitled to not
less than three weeks of paid vacation, increasing consistent with Company
policy.
2.6 Employee Benefits. Executive shall be entitled to the benefits and
perquisites which the Company generally provides to its other employees under
the applicable Company plans and policies, and to future benefits and
perquisites made generally available to employees of the Company. Executive's
participation in such benefit plans shall be on the same basis as applies to
other employees of the Company. Executive shall pay any contributions which are
generally required of employees to receive any such benefits.
2.7 Employment Taxes and Withholding. Executive recognizes that the
compensation, benefits and other amounts provided by the Company under this
Agreement may be subject to United States and/or Canadian federal, state,
provincial or local income taxes. It is expressly understood and agreed that all
such taxes shall be the responsibility of the Executive. To the extent that
United States and/or Canadian federal, state, provincial or local law requires
withholding of taxes on compensation, benefits or other amounts provided under
this Agreement, the Company shall withhold the necessary amounts from the
amounts payable to Executive under this Agreement.
2.8 Legal Limits on Benefits. The parties recognize that the Internal
Revenue Code of 1986, as amended, the Income Tax Act (Canada), and other laws
and regulations place limits on the benefits the Company can provide for its
employees. The benefits for Executive under this Agreement shall be reduced to
the extent necessary to comply with any such laws and regulations currently in
effect or enacted in the future, including any reductions that may be necessary
to preserve the tax-favored status of a benefit, to preserve the Company's tax
deduction for the costs of a benefit, or to avoid the imposition of excise taxes
on the Company or Executive.
2.9 Company Responsibility for Insured Benefits. In this Article II,
the Company is agreeing to provide certain benefits which are provided in the
form of premiums of insurance coverage. The Company is not itself promising to
pay the benefit an insurance company is obligated to pay under the policy the
insurance company has issued. If an insurance company becomes insolvent and
cannot pay benefits it owes to Executive or his beneficiaries under the
insurance policy, neither Executive nor his personal representative or
beneficiary shall have any claim for benefits against the Company.
2.10 Expenses. During the term of his employment hereunder, Executive
shall be entitled to receive prompt reimbursement from the Company (in
accordance with the policies and procedures in effect for the Company's
employees) for all reasonable travel and other expenses incurred by him in
connection with his services hereunder.
III. TERMINATION OF EXECUTIVE'S EMPLOYMENT
3.1 Termination of Employment.
(a) Executive's employment under this Agreement may be
terminated by the Company at any time for any reason; provided,
however, that (i) if Executive's employment is terminated by the
Company prior to the first anniversary of the date hereof for a reason
other than for cause, he shall be entitled to continue to receive his
base salary under Section 2.1 for the remainder of the period through
the second anniversary of the date hereof, and (ii) if Executive's
employment is terminated by the Company after the first anniversary of
the date hereof for a reason other than for cause, he shall be entitled
to continue to receive his base salary under Section 2.1 for the
remainder of the period ending on the first anniversary of the date of
termination of Executive's employment hereunder.
(b) Executive's employment under this Agreement may be
terminated by Executive at any time for any reason.
(c) The termination shall be effective as of the date
specified by the party initiating the termination in a written notice
delivered to the other party, which date shall not be earlier than the
date such notice is delivered to the other party. This Agreement shall
terminate in its entirety immediately upon the death of Executive.
Except as expressly provided to the contrary in this section or
applicable law, Executive's rights to pay and benefits shall cease on
the date his employment under this Agreement terminates.
3.2 Cause. For purposes of this Article III, "cause" shall mean only
the following: (i) indictment or conviction of a felony; (ii) theft or
embezzlement of Company property or commission of similar acts involving moral
turpitude; (iii) if Executive fails to relocate within a reasonable time as
provided in Section 1.1, recognizing that the Relocation involves an
international move; or (iv) the willful failure by Executive to substantially
perform his material duties under this Agreement as determined by the Board of
Directors (excluding nonperformance resulting from Executive's disability) which
willful failure is not cured within thirty (30) days after written notice from
the Chief Executive Officer of the Company specifying the act of willful
nonperformance or within such longer period (but no longer than ninety (90) days
in any event) as is reasonably required to cure such willful nonperformance.
3.3 Disability. If Executive has become disabled from performing his
duties under this Agreement and the disability has continued for a period of
more than ninety (90) days, the Board of Directors of the Company may, in its
discretion, determine that Executive will not return to work and terminate his
employment under this Agreement. Upon any such termination for disability,
Executive shall be entitled to such disability, medical, life insurance, and
other benefits as may be provided generally for disabled employees of the
Company during the period he remains disabled.
IV. NON-COMPETITION; CONFIDENTIALITY AND TRADE SECRETS; INVENTIONS
4.1 Agreement Not to Compete. Executive agrees that, on or before the
date which is the later of (i) two years from the date of this Agreement, and
(ii) one year after the date Executive's employment terminates, he will not,
unless he receives the prior approval of the Board of Directors of the Company,
directly or indirectly engage in any of the following actions:
(a) Own an interest in (except as provided below), manage,
operate, join, control, lend money or render financial or other
assistance to, or participate in or be connected with, as an officer,
employee, partner, stockholder, proprietor, consultant or otherwise,
any business or entity whose products or services or proposed products
or services compete or would compete directly or indirectly with those
of the Company, or any of its subsidiaries (a "Competitive
Corporation"). However, nothing in this subsection (a) shall preclude
Executive from holding less than one percent of the outstanding capital
stock of any Competitive Corporation required to file periodic reports
with the Securities and Exchange Commission under Section 13 or 15(d)
of the Securities Exchange Act of 1934, as amended, the securities of
which are listed on any securities exchange, quoted on the National
Association of Securities Dealers Automated Quotation System or traded
in the over-the-counter market or any Competitive Corporation which is
a "reporting issuer" as defined in the Securities Act (Ontario) or
other similar provincial securities legislation.
(b) Intentionally solicit, endeavor to entice away from the
Company, or any its subsidiaries, or otherwise interfere with the
relationship of the Company, or any of its subsidiaries with, any
person who is employed by or otherwise engaged to perform services for
the Company, or any of its subsidiaries (including, but not limited to,
any independent sales representatives or organizations), or any person
or entity who is, or was within the then most recent 12-month period, a
customer or client of the Company, or any of its subsidiaries, whether
for Executive's own account or for the account of any other individual,
partnership, firm, corporation or other business organization.
If the scope of the restrictions in this section are determined by a court of
competent jurisdiction to be too broad to permit enforcement of such
restrictions to their full extent, then such restrictions shall be construed or
rewritten (blue-lined) so as to be enforceable to the maximum extent permitted
by law, and Executive hereby consents, to the extent he may lawfully do so, to
the judicial modification of the scope of such restrictions in any proceeding
brought to enforce them.
4.2 Non-Disclosure of Information.
(a) The Executive agrees that, except as required in the
performance of his duties for the Company, or as authorized by the
Company in writing or as required by law, he will not during the course
of employment by the Company or at any time thereafter use or disclose
to others proprietary or trade secret information of the Company, or
others, including but not limited to customer furnished information
which has been provided to the Company with restrictions on its use or
further disclosure, and classified information of the United States.
Proprietary or trade secret information of the Company is information
used or useful in the conduct of the business of the Company which is
not generally known to the public or in a relevant industry, such as,
but not limited to, information regarding the Company's research,
development, manufacturing, purchasing, finances, acquisition activity,
accounting, engineering, marketing, merchandising, selling and present
and prospective customers (including listing of, proposals to,
agreements with, and relationships with such customers).
(b) The Executive agrees that in the performance of his duties
and responsibilities for the Company, he will not disclose, publish or
use any confidential information, proprietary data, or trade secrets
that he may have obtained from any previous employer or association.
(c) The Executive agrees that he will return to the Company
and stop using upon request or upon termination of his employment, all
papers, notebooks, reports, manuals, computer files, software,
vehicles, tool, keys and entry cards, identification cards or badges,
credit authorization, apparatus, computer user identifiers, passwords
and other property furnished to him by the Company, or which was
prepared or made in whole or in part by him in connection with his
employment by the Company.
4.3 Inventions. Executive agrees that he will promptly disclose to the
Company all product, process, hardware and software inventions, designs,
computer programs and related documentation, other works of authorship and mask
works ("Developments") relating to the business of the Company which he made
individually, or jointly with others, while employed by the Company or within a
period of six months following termination of his employment. The Executive
hereby assigns and agrees to assign all interest in such Developments to the
Company, and upon the request and at the expense of the Company, do all other
acts reasonably necessary to assist it in obtaining and enforcing rights in
Developments in any and all countries; provided, however, this Section 4.3 shall
not apply to Developments for which no equipment, supplies, facility or trade
secret information of the Company was used and which is developed entirely on
the Executive's own time and (a) which does not relate (i) directly to the
business of the Company or (ii) to the actual or demonstrably anticipated
research or development of the Company, or (b) which does not result from any
work performed by the Executive for the Company. The Executive acknowledges and
agrees that the provisions of this Section 4.3 shall apply whether or not the
Executive receives or is considered for the award of any additional compensation
for any Development. This Section 4.3 does not apply to Developments in which
the Executive claims an interest which were made before his employment with the
Company. Attached hereto as Attachment I is a list identifying such Developments
made before the date hereof.
4.4 Remedies. Executive acknowledges that the Company's remedy at law
for any breach or threatened breach by Executive of the provisions of Section
4.1, 4.2 or 4.3 will be inadequate. Therefore, the Company shall be entitled to
injunctive and other equitable relief to enforce such provisions, in addition to
any other remedies that may be available to the Company under this Agreement or
applicable law.
V. MISCELLANEOUS
5.1 Amendment. This Agreement may be amended only in writing, signed by
both parties.
5.2 Entire Agreement. This Agreement contains the entire understanding
of the parties with regard to all matters contained herein. There are no other
agreements, conditions or representations, oral or written, expressed or
implied, with regard thereto. This Agreement supersedes all prior agreements
relating to the employment of Executive by the Company.
5.3 Company Policies and Handbooks. Any policies or handbooks of the
Company which may from time to time be applicable to the Executive shall be a
guide regarding the Executive's employment but shall not constitute or imply an
agreement between the Executive and the Company nor shall any representations
made to the Executive, before or during his employment, which are not made in
writing and authorized by the Company, constitute an agreement.
5.4 Assignment. The Company may in its sole discretion assign this
Agreement to any entity which succeeds to some or all of the business of the
Company through merger, consolidation, a sale of some or all of the assets of
the Company, or any similar transaction. Executive acknowledges that the
services to be rendered by him are unique and personal. Accordingly, Executive
may not assign any of his rights or obligations under this Agreement.
5.5 Successors. Subject to Section 5.4, the provisions of this
Agreement shall be binding upon the parties hereto, upon any successor to or
assign of the Company, and upon Executive's heirs and the personal
representative of Executive or Executive's estate.
5.6 Notices. Any notice required to be given under this Agreement shall
be in writing and shall be delivered either in person or by certified or
registered mail, return receipt requested. Any notice by mail shall be addressed
as follows:
If to the Company, to:
Secure Computing Corporation
2675 Long Lake Road
Roseville, Minnesota 55113
USA
Attention: Chief Executive Officer
If to Executive, to:
Glenn Mackintosh
95 Prince Arthur Street
Suite 701
Toronto, Ontario M5R 3P6
Canada
or to such other addresses as either party may designate in writing to the other
party from time to time.
5.7 Waiver of Breach. Any waiver by either party of compliance with any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any other provision of this Agreement, or of any subsequent
breach by such party of a provision of this Agreement. No waiver by the Company
shall be valid unless in writing and signed by the Chief Executive Officer of
the Company.
5.8 Severability. If any one or more of the provisions (or portions
thereof) of this Agreement shall for any reason be held by a final determination
of a court of competent jurisdiction to be invalid, illegal, or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions (or portions of the provisions) of this Agreement, and the
invalid, illegal or unenforceable provisions shall be deemed replaced by a
provision that is valid, legal and enforceable and that comes closest to
expressing the intention of the parties hereto.
5.9 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF MINNESOTA APPLICABLE TO
CONTRACTS EXECUTED AND FULLY PERFORMED WITHIN THE STATE OF MINNESOTA. EXCEPT TO
THE EXTENT MANDATORILY GOVERNED BY ONTARIO LAW, EXECUTIVE HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF ANY MINNESOTA STATE OR FEDERAL COURT SITTING IN
THE CITY OF MINNEAPOLIS, HENNEPIN COUNTY, IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT, AND EXECUTIVE HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH MINNESOTA STATE COURT OR SUCH FEDERAL COURT. EXECUTIVE HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT HE MAY EFFECTIVELY DO SO, THE DEFENSE
OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING. EACH
OF THE COMPANY AND EXECUTIVE HEREBY IRREVOCABLY CONSENTS TO THE SERVICE OF
COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN
ANY SUCH ACTION OR PROCEEDING BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, OR BY
DELIVERING OF A COPY OF SUCH PROCESS TO OF THE COMPANY OR EXECUTIVE, AS THE CASE
MAY BE, AT THE RESPECTIVE ADDRESS SPECIFIED IN SECTION 5.6 OR BY ANY OTHER
METHOD PROVIDED BY LAW. EACH OF THE COMPANY AND EXECUTIVE AGREES THAT A FINAL
JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR BY ANY OTHER MANNER
PROVIDED BY LAW.
5.10 Headings. The headings of articles and sections herein are
included solely for convenience and reference and shall not control the meaning
or interpretation of any of the provisions of this Agreement.
5.11 Counterparts. This Agreement may be executed by the parties hereto
in counterparts, each of which shall be deemed to be an original, but all such
counterparts shall constitute a single instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement
effective as of the date set forth above.
EXECUTIVE
_________________________________________________
Glenn Mackintosh
SECURE COMPUTING CORPORATION
By _____________________________________________
President and Chief Executive Officer
ATTACHMENT I
PRE-EMPLOYMENT INVENTIONS AND WRITINGS
NONE