EXHIBIT 10.11

EMPLOYMENT AND SUCCESSION AGREEMENT

AND

FULL AND COMPLETE RELEASE

This Employment and Succession Agreement and Full and Complete Release
("Agreement") is entered into between Richard Macchia ("Executive") and Internet
Security Systems, Inc., a Delaware corporation (together with its subsidiary
companies, the "Company").

Whereas, the Company and Executive desire to agree upon a fixed term of
employment of Executive by the Company and provide for the successful transition
of duties and separation of Executive from the Company effective July 3, 2006,
or such earlier date as Executive and the Company's Chief Executive Officer may
agree; and

Whereas, the Company and Executive have previously entered into an Indemnity
Agreement dated 17 April 1998, a Retention Agreement dated 14 July 2003, and a
Confidentiality, Ownership and Non-Competition Agreement dated 29 December 1997
(the "Preexisting Agreements").

Whereas, the Executive has consulted with an attorney and has relied upon the
advice of his attorney in signing this Agreement.

Now, therefore, in consideration for payments and benefits provided by the
Company as set forth in this Agreement, the sufficiency of which is hereby
acknowledged, Executive and the Company agree as follows:

1. Fixed Term Employment.

 a. In order to assure retention of Executive through December 31, 2005, the
    Company will continue Executive's full-time employment through December 31,
    2005. When a new Chief Financial Officer begins employment with the Company,
    which is expected to be a date prior to December 31, 2005, the title and
    responsibilities of Chief Financial Officer will transition from Executive
    to the new Chief Financial Officer. Part-time employment of Executive will
    begin on January 1, 2006 and continue through July 3, 2006. Executive and
    the Company will execute releases in substantially the same form as
    contained in this Agreement upon conclusion of full-time status (including a
    release of the Retention Agreement), and again upon conclusion of part-time
    employment (including a release of obligations under this Agreement, but not
    the Indemnity Agreement or the Confidentiality, Ownership and
    Non-Competition Agreement).
 b. During full-time employment, Executive's compensation will continue on
    current compensation terms, including salary and incentive compensation,
    benefits and expense reimbursement according to policy. For the avoidance of
    doubt, Executive will be eligible for his full 2005 annual and quarterly
    bonuses as indicated in his current compensation plan for 2005, subject to
    attainment of applicable performance targets.
 c. Executive will devote full-time and best efforts to the business of the
    Company during the period of full-time employment, including continuing
    current responsibilities. This also includes preparation and signing of
    quarterly and annual reports and certifications that are required during the
    period of full-time employment as Chief Financial Officer.
 d. During part-time employment, Executive's compensation will continue at the
    rate of $18,150 per month. Medical benefits will also continue during this
    period. Other employee benefits will apply only as provided in the Company's
    benefits plans for part-time employees. The Company will reimburse
    reasonable out-of-pocket expenses incurred according to the Company's policy
    during part-time employment. After July 3, 2006, Executive will not be
    entitled to any further compensation or benefits or severance payments.
 e. During part-time employment until March 16, 2006, Executive will be
    available for an aggregate of 210 hours, as needed, using best efforts to
    fulfill reasonably requested tasks. After March 16, 2006 through July 3,
    2006 no minimum number of hours is intended and availability will be as
    agreed between the parties.
 f. Equity incentives, such as stock options and restricted stock, will continue
    to vest according to the Company's incentive stock plan during full-time and
    part-time employment, except as provided in Section 1(i).
 g. During full-time and part-time employment, Executive may be terminated by
    the Company only for cause. "Cause" means the commission of any act of
    fraud, embezzlement or dishonesty, any unauthorized use or disclosure by
    such person of confidential information or trade secrets of the Company or
    any affiliated company, or any other intentional violation of the Company's
    Code of Conduct by Executive adversely affecting the business or affairs of
    the Company or any parent or subsidiary corporation in a material manner.
 h. Executive will report to the Chief Executive Officer during full-time and
    part-time employment. Executive will perform such responsibilities and
    duties as may be assigned consistent with his current areas of
    responsibility, in the Chief Executive Officer's judgment, so that the
    succession of the new Chief Financial Officer is efficient, effective and
    successful. Employment with others will not be entered into during full-time
    employment. If Executive elects to leave the Company voluntarily after
    December 31, 2005 and begins a full-time senior officer position at another
    company prior to March 16, 2006, then part-time employment will terminate,
    compensation and benefits will cease, and equity incentives such as stock
    options and restricted stock will cease vesting. After March 16, 2006, other
    employment opportunities may be entered into and Executive acknowledges that
    the Confidentiality, Ownership and Non-Competition Agreement will continue
    to apply. This Agreement is for the personal services of Executive.
    Executive shall receive all payments and other benefits to which Executive
    is entitled under this Agreement through July 3, 2006, unless Executive's
    employment terminates prior to July 3, 2006 for Cause, due to death or
    disability, or as otherwise provided in this Agreement, in which event
    compensation and benefits will cease upon employment termination.
 i. Provided Executive's part-time employment status continues to July 3, 2006
    and for Executive's covenant not to compete with the Company, as provided in
    this paragraph, the Company agrees that the remaining 12,500 shares of
    restricted stock granted to Executive on January 27, 2004 will fully vest on
    July 3, 2006 instead of January 27, 2007. Executive covenants and agrees
    that from the date of this Agreement until March 16, 2007, Executive will
    not (whether on his own behalf or on behalf of any person or entity other
    than the Company) engage in or become involved in a business that directly
    competes with the Company in any line of business in which it is engaged as
    of the date of this Agreement. A list of currently competing entities has
    been furnished by the Company to Executive contemporaneously with the
    execution and delivery of this Agreement. The parties acknowledge that other
    businesses may have incidental activities that may compete with a business
    line of the Company and this covenant is not intended to prohibit employment
    with a business (not identified on the list) who's primary business is not
    competitive with the business of the Company, provided that Executive is not
    actively involved or directly responsible for the incidental activity that
    competes. This covenant does not prohibit investment (whether directly or
    through public or private investment funds) in securities of any entity that
    may compete with the Company, provided such investment does not exceed 5% of
    the equity securities of such entity and provided Executive is not involved
    in the management or operations of such competing entity. Executive
    acknowledges that the Company's business is global and that he has been
    involved with its business globally, so this restriction will apply
    throughout the world. Executive acknowledges that these restrictions are
    reasonably necessary to protect the Company's legitimate business interests,
    are not overbroad, overlong, or unfair (including in duration and scope),
    and are not the result of overreaching, duress, or coercion of any kind.
    Executive confirms that his observance of the covenants will not cause him
    any undue financial hardship, and that the enforcement of the covenants will
    not impair his ability to gain employment commensurate with his abilities
    and on terms fully acceptable to him or otherwise to receive sufficient
    income to support him and his family and to satisfy his debt obligations.
    Executive acknowledges that any violation of these covenants would cause the
    Company irreparable injury or loss. Executive agrees that, for any breach or
    threatened breach of the covenants of this provision, the Company will be
    entitled to immediate injunctive relief and that a restraining order and/or
    an injunction may issue against Executive to prevent or restrain any such
    breach or threatened breach, in addition to any other rights or remedies at
    law that the Company may have.

2. Full and Complete Release.

Executive, for himself and his heirs, executors, administrators and assigns,
does hereby knowingly and voluntarily release and forever discharge the Company
and its affiliates, joint ventures, joint venture partners, and benefit plans,
and their respective current and former directors, officers, administrators,
trustees, employees, agents, and other representatives, from all debts, claims,
actions, causes of action (including without limitation those arising under the
Fair Labor Standards Act of 1938, as amended, 29 U.S.C. Sec. 201 et seq.; the
Employee Retirement Income Security Act of 1974, as amended, 29 U.S.C. Sec. 1001
et seq.; the Worker Adjustment and Retraining Notification Act of 1988, 29
U.S.C. Sec. 2101 et seq.; and those federal, state, local, and foreign laws
prohibiting employment discrimination based on age, sex, race, color, national
origin, religion, disability, veteran or marital status, sexual orientation, or
any other protected trait or characteristic, or retaliation for engaging in any
protected activity, including without limitation the Age Discrimination in
Employment Act of 1967, 29 U.S.C. Sec. 621 et seq., as amended by the Older
Workers Benefit Protection Act, P.L. 101-433; the Equal Pay Act of 1963, 9
U.S.C. Sec. 206, et seq.; Title VII of The Civil Rights Act of 1964, as amended,
42 U.S.C. Sec. 2000e et seq.; the Civil Rights Act of 1866, 42 U.S.C. Sec. 1981;
the Civil Rights Act of 1991, 42 U.S.C. Sec. 1981a; the Americans with
Disabilities Act, 42 U.S.C. Sec. 12101 et seq.; the Rehabilitation Act of 1973,
29 U.S.C. Sec. 791 et seq.; the Family and Medical Leave Act of 1993, 28 U.S.C.
Sections 2601 and 2611 et seq.; and comparable state, local, and foreign causes
of action, whether statutory or common law), suits, dues, sums of money,
accounts, reckonings, covenants, contracts, claims for costs or attorneys' fees,
controversies, agreements, promises, and all liabilities of any kind or nature
whatsoever, at law, in equity, or otherwise, KNOWN OR UNKNOWN, fixed or
contingent, which he ever had, now has, or may have, or which he, his heirs,
executors, administrators or assigns hereafter can, shall, or may have, from the
beginning of time through the date on which he signs this Agreement, including
without limitation those arising out of or related to his employment or
separation from employment with the Company (collectively the "Released
Claims"), provided nothing herein releases the Company from its obligations
under this Agreement or the Preexisting Agreements, or releases any vested and
accrued benefits to which Executive is entitled, or any rights which by law
cannot be released.

Executive fully understands and agrees that:

 a. no rights or claims are released or waived that may arise after the date
    Executive signs this Agreement;
 b. Executive is advised to consult with an attorney before signing this
    Agreement;
 c. Executive has 21 days from receipt of this Agreement within which to
    consider whether to sign it;
 d. Executive has seven days following his execution of this Agreement to revoke
    the Agreement; and
 e. this Agreement shall be effective on the date executed by Executive, but
    Executive shall not have the right to enforce this Agreement until the
    revocation period of seven days has expired without any such revocation.

Executive acknowledges that some of the payments and benefits given to Executive
under this Agreement are in addition to those to which he is otherwise entitled
to as a matter of Company policy.

3. Release of Claims Against Executive.

The Company, for itself and its successors and assigns, does hereby knowingly
and voluntarily release and forever discharge the Executive and his personal and
legal representatives, executors, administrators, heirs, distributees, devisees,
legatees and successors from all debts, claims, actions, causes of action,
suits, dues, sums of money, accounts, reckonings, covenants, contracts, claims
for costs or attorneys' fees, controversies, agreements, promises, and all
liabilities of any kind or nature whatsoever, at law, in equity, or otherwise,
KNOWN OR UNKNOWN, fixed or contingent, which it ever had, now has, or may have,
or which it, its successors or assigns hereafter can, shall, or may have, from
the beginning of time through the date on which it signs this Agreement,
including without limitation those arising out of or related to Executive's
employment or separation from employment with the Company, provided nothing
herein precludes the Company from enforcing its rights under this Agreement or
the Preexisting Agreements, or its rights related to taxes, advances or
reimbursement of expenses arising in the course of Executive's employment
relationship with the Company.

4. Future Cooperation.

Executive covenants and agrees that he shall reasonably cooperate with the
Company, so long as such cooperation does not unreasonably interfere with
Executive's then current employment or business activities, in any pending or
future matters, including without limitation any litigation, investigation, or
other dispute, in which he, by virtue of his employment with the Company, has
relevant knowledge or information, including, but not limited to (i) meeting
with representatives of the Company to provide truthful information regarding
his knowledge, (ii) acting as the Company's representative, and (iii) providing,
in any jurisdiction in which the Company requests, truthful testimony relevant
to said matter. The Company shall reimburse Executive for all of Executive's
reasonable out-of-pocket expenses associated with such assistance, including
travel expenses and attorneys' fees. If such cooperation occurs after July 3,
2006 and results in devotion of Executive's time exceeding three business days,
the Company will compensate Executive for his time at an hourly rate based upon
his current base salary.

5. Indemnification.

Nothing in this Agreement shall affect any rights Executive may have to
indemnification or advancement of expenses under Article XI of the Company's
by-laws in effect as of the date of this Agreement, any written agreement
between the Company and Executive, including the Indemnity Agreement, or under
applicable law.

6. Nondisparagement.

Executive will not disparage the Company, its customers or suppliers or the
Company's directors, officers, or employees ("Representatives"). The Company and
its Representatives will not disparage Executive. "Disparagement" means a
negative oral or written statement that can be accurately demonstrated in fact
to be attributable to (i) Executive or (ii) the Company or its Representatives
(as applicable). Notwithstanding the foregoing, (i) no statement made by either
party in the context of any legal or regulatory proceeding shall be deemed to
violate the foregoing provisions, and (ii) subject to (i), all communication
relating to the termination of Executive's employment with the Company shall be
consistent with the Company's Current Report on Form 8-K filed with respect to
this matter.

7. Complete Agreement.

This Agreement is the complete understanding between Executive and the Company
in respect of the subject matter of this Agreement and, with the exception of
the Preexisting Agreements, supersedes all prior agreements relating to the same
subject matter. In signing this Agreement, Executive has not relied upon any
representations, promises or agreements of any kind except those set forth
herein.

8. Severability.

In the event that any provision of this Agreement should be held to be invalid
or unenforceable, each and all of the other provisions of this Agreement shall
remain in full force and effect. If any provision of this Agreement is found to
be invalid or unenforceable, such provision shall be modified as necessary to
permit this Agreement to be upheld and enforced to the maximum extent permitted
by law.

9. Governing Law.

This Agreement is to be governed and enforced under the laws of the State of
Georgia (without regard to Georgia's conflicts of law rules that might call for
the application of the law of another jurisdiction).

10. Successors and Assigns.

This Agreement is binding upon and inures to the benefit of the Company and its
successors and assigns.

11. Amendment/Waiver.

No amendment, modification or discharge of this Agreement shall be valid or
binding unless set forth in writing and duly executed by each of the parties
hereto.

12. Acknowledgment.

Executive has carefully read this Agreement, fully understands each of its terms
and conditions, and intends to abide by this Agreement in every respect. As
such, Executive knowingly and voluntarily signs this Agreement.

 

 

 

 

Executive

 

 

 

 

   

    /s/ Richard Macchia

Richard Macchia

Date:

 

May 11, 2005

 

 

 

 

 

 

Internet Security Systems, Inc.

 

 

 

 

       /s/ Thomas E. Noonan

Thomas E. Noonan
President, Chief Executive Officer and Chairman

Date:

 

May 11, 2005