Exhibit 10.3

 

September 18, 2003

 

Ed Pillman

5203 Stone Arbor Court

Dallas, TX 75207

 

TRANSITION AGREEMENT AND RELEASE

 

Dear Ed:

 

This Transition Agreement and Release letter (“Agreement”) sets forth the
arrangements we have made with respect to the transition of your duties and
separation from employment with Entrust, Inc. The arrangements will be as
follows:

 

1. As used in this Agreement, the term “ENTRUST” and/or “Company” shall mean
Entrust, Inc., its parent, subsidiaries (including enCommerce, Inc.),
affiliates, successors, assigns.

 

2. Your employment status with ENTRUST and assignment as Senior Vice President,
and assignment as Senior Vice President, Global Portfolio and Services, will
change effective on the close of business on June 30, 2004. We acknowledge that
this agreement constitutes notice entitling you to the severance compensation
provided for in your offer letter of May 17, 2001, which we have included in
Section 4(1) of this Agreement.

 

3. Prior to June 30, 2004, ENTRUST shall not terminate your employment except
for “cause” as “cause” is defined in your letter of May 17, 2001. After June 30,
2004 you will be an employee for a term ending December 31, 2004 and will no
longer be entitled to any compensation for involuntary termination of employment
as stated in our letter agreement dated May 17, 2001. At the end of December 31,
2004, your employment relationship with ENTRUST will be ended and will not
resume, unless Entrust and you mutually agree to extend it beyond that date.

 

4.      

(a)    Provided that you agree to and continue to comply with all material
aspects of this Agreement, on or about July 1, 2004, you will receive a lump sum
payment equaling $206,250.00 US representing six months of base and bonus
compensation. Should you die before July 1, 2004, this sum will be paid to your
heirs.

 

  (b) Provided that you agree to and continue to comply with all material
aspects of this Agreement, on or about July 1, 2004, you will continue to be
eligible for those Company-provided benefit and insurance programs (including
health insurance) in which you are participating as of the date of this letter,
and will continue to vest in current stock options pursuant to the terms of any
controlling stock option plans and agreements until December 31, 2004.

 

  (c) Whether you execute this Agreement or not, upon your employment
relationship ending with Entrust, you will receive compensation for earned but
untaken vacation accrued through December 31, 2004.

 

  (d) All amounts to be paid under this paragraph shall be subject to legally
required and other authorized deductions and withholdings and will be paid at
such time and in such manner as is consistent with the Company’s normal payroll
practices.

 

5. You acknowledge and represent that a time period of twenty-one (21) calendar
days has been provided to you in order for you to consider the terms of this
Agreement and that the Company has advised you to consult with an attorney of
your choice prior to signing this Agreement. In addition, you acknowledge that
you will have seven (7) calendar days following the execution and return of this
document to revoke this Agreement by written notice. To be valid, Mr. Jay
Kendry, Vice President, Chief Governance Officer and Secretary, Entrust, Inc.,
16633 North Dallas Parkway, Addison, TX 75001 must receive the letter of
revocation not later than the close

 

 

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     of business seven (7) calendar days after you sign and return this
Agreement. This Agreement is effective on the eighth (8th) day after you have
signed it (the “Effective Date”), unless timely revoked as set forth above.

 

6. You shall reconcile and settle, as soon as possible, and in no event later
than January 31, 2005, any expenses incurred by you in connection with ENTRUST
business for which you may be entitled to reimbursement.

 

7. All ENTRUST-provided benefits not terminated earlier pursuant to their terms
or this Agreement shall terminate at 11:59 p.m. on December 31, 2004. Following
termination of your coverage under ENTRUST’s group health benefit plans,
continued health coverage will be offered as required by the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”), for the period required by
law.

 

8. You agree that you will not act in any manner that damages the business of
the Company. Specifically, you agree to make no disparaging statement (who makes
the determination of what is an issue of fact—if I say I don’t like your shirt
does that terminate the agreement) regarding ENTRUST, individuals or entities
affiliated with ENTRUST, of the Company’s business. You further agree that you
will not counsel or assist any attorneys or their clients in the presentation or
prosecution of any disputes, differences, grievances, claims, charges, or
complaints against the Company and/or any officer, director, employee, agent,
representative, shareholder or attorney of the Company, unless under a subpoena
or other court order to do so. You further agree to immediately notify the
Company upon receipt of any court order, subpoena, or any legal discovery device
that seeks or might require the disclosure or production of information covered
by this paragraph or revealing the existence or terms of this Agreement and to
furnish, within three (3) business days of its receipt, a copy of such order or
request to the Company.

 

9. You agree that this Agreement is a confidential document as are all the terms
and conditions expressed herein. Accordingly, you agree that you will not
directly or indirectly disclose, publicize or discuss this Agreement, including
its terms and/or conditions, with any employee and/or former employee of ENTRUST
or any other person except your immediate family members, attorney, accountant,
financial advisor, and/or outplacement advisor, unless under a subpoena or other
court order to do so. In the event that you discuss this Agreement with any of
the aforementioned individuals, it shall be your duty, responsibility and
obligation to advise said individual(s) of the confidential nature of this
Agreement and to direct them not to discuss the terms and/or conditions of this
Agreement with any other person. Notwithstanding the foregoing, this obligation
of confidentiality shall cease in respect of those parts of the Agreement that
are publicly disclosed by ENTRUST.

 

10. You re-affirm your obligations under your “Conflict of Interest” and
“Intellectual Property and Confidentiality” agreements with ENTRUST dated
September 18, 2003 and your “Non-Competition and Non-Solicitation Agreement”
with ENTRUST dated May 18, 2001 (the “Confidentiality Agreements”). You
acknowledge and agree that during your employment with ENTRUST you have received
and become acquainted with confidential, proprietary, and trade secret
information including, but not limited to, information regarding Company
investments, programs, plans, and strategies; capital sources; current and
prospective customers; technical data; business/marketing plans or results;
prospect lists; personnel matters regarding Company employees, officers, and
directors; manners of operation and services provided; negotiating positions and
strategies; and potential strategic alliances and customer information. You
hereby acknowledge that such information has been and will be developed or
acquired by the Company through the expenditure of substantial time, effort, and
money, that such information provides the Company with competitive advantages
over others who do not know or use such information, and that the Company has
implemented specific policies and practices to keep such information secret.
Accordingly, you agree that you will not directly or indirectly use or disclose
any such information, except in accordance with the Confidentiality Agreements.

 

11. You acknowledge and agree that the nature of the ENTRUST confidential
information described in the preceding paragraph makes it extremely unlikely
that, even using complete good faith, you could provide services in a similar
capacity for a competitor of ENTRUST without drawing upon and utilizing such
information. You further agree that, for purposes of the Non-Competition and
Non-Solicitation Agreement, the period of your employment with

 

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     ENTRUST will include the Consulting Period under this Agreement and
entities in competition with ENTRUST will include VeriSign, Baltimore
Technologies, RSA, Netegrity, ZixIT, Microsoft, Certicom, Entegrity, Arcot,
Valicert, Oblix, Access 360, AOL/Netscape/iPlanet, 2Init, Tumbleweed and
Waveset. You further acknowledge the time, geographic and scope limitations of
the Non-Competition and Non-Solicitation Agreement are reasonable, especially in
light of the Company’s desire to protect its confidential information, and that
you will not be precluded from gainful employment if you are obligated not to
compete with the Company as set forth therein

 

12. You acknowledge that any attempt on your part to induce others to leave
ENTRUST or any effort to interfere with ENTRUST’s relationships with its
employees and contractors would be harmful and damaging to ENTRUST. Accordingly,
you agree that for a period of one (1) year following the Effective Date of this
Agreement you will not in any way, directly or indirectly, (a) induce, attempt
to induce, or assist others in inducing any individual providing services to
ENTRUST to cease providing such services; (b) otherwise interfere with or
disrupt ENTRUST’s relationship with its employees and contractors; (c) solicit,
entice, or hire away any employee or contractor of ENTRUST; or (d) hire, engage,
or cause to be hired or engaged any current or former employee or contractor of
ENTRUST whose relationship with ENTRUST ceased less than one year before the
date of such hiring or engagement, without written consent of Entrust.

 

13. On or before January 31, 2005 you shall return to ENTRUST any and all
property of ENTRUST and/or affiliates currently in your possession and/or
subject to your control including, but not limited to, any and all computer
equipment, facsimile machine, credit cards, identification cards, and records
(including files, memoranda, correspondence, compensation surveys, drawings,
designs, financial records, customer lists, personnel files, personnel lists or
the like, whether such materials shall be written instruments or stored in
digital, electronic, or magnetic or other form).

 

14. You agree that upon receipt of the consideration described in this Agreement
represents settlement in full of all outstanding obligations owed to you by the
Company. You, on your own behalf, and on behalf of your respective heirs, family
members, executors, and assigns, hereby fully and forever release ENTRUST and
its officers, directors, employees, investors, shareholders, administrators,
affiliates, divisions, subsidiaries, predecessor and successor corporations, and
assigns, from, and agree not to sue concerning, any claim, duty, obligation or
cause of action of any kind, whether known or unknown, suspected or unsuspected,
that you may possess arising from any omissions, acts or facts that have
occurred up until and including the Effective Date including, without
limitation: any and all claims relating to or arising from your employment
relationship with the Company and the termination of that relationship; any and
all claims relating to or arising from your purchase or right to purchase shares
of stock of the Company, including, without limitation, any claims for fraud,
misrepresentation, breach of fiduciary duty, breach of duty under applicable
state corporate law, and securities fraud under any state or federal law; any
and all claims under the common law of any jurisdiction applicable to employment
relationships including, but not limited to, wrongful discharge of employment,
termination in violation of public policy, breach of contract, express or
implied, breach of a covenant of good faith and fair dealing, express or
implied, promissory estoppel, negligent or intentional infliction of emotional
distress, negligent or intentional misrepresentation, negligent or intentional
interference with contract or prospective economic advantage, unfair business
practices, defamation, libel, slander, negligence, personal injury, assault,
battery, invasion of privacy, false imprisonment, and conversion; any and all
claims for violation of any federal, state or municipal statute, including, but
not limited to, Title VII of the Civil Rights Act of 1964, the Civil Rights Act
of 1991, the Age Discrimination in Employment Act of 1967, the Americans with
Disabilities Act of 1990, the Fair Labor Standards Act, the Employee Retirement
Income Security Act of 1974, The Worker Adjustment and Retraining Notification
Act, Older Workers Benefit Protection Act, and the Texas Commission on Human
Rights Act; any and all claims for violation of the federal, or any state,
constitution; any claim for any loss, cost, damage, or expense arising out of
any dispute over the non-withholding or other tax treatment of any of the
proceeds received by you as a result of this Agreement; and any and all claims
for attorneys’ fees and costs.

 

15. The Company and you agree that the release in this section shall be a
complete general release as to the matters released. This release does not
extend to any obligations incurred under this Agreement. You acknowledge and
agree that any material breach of any provision of this Agreement by you shall
constitute a material breach of this Agreement and shall entitle the Company
immediately to recover the severance

 

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     benefits provided to you under this Agreement. You shall also be
responsible to the Company for all costs, attorneys’ fees and damages incurred
by the Company in (a) enforcing the obligation, including the bringing of any
suit to recover the monetary consideration, and (b) defending against a claim or
suit brought or pursued by you in violation of this provision.

 

16. You understand and agree that, in the event of any breach by you of the
terms of this Agreement, your right to any further payments or benefits, after
July 2, 2004, will immediately end. The cessation of further payments and
benefits on account of such breach will not, however, relieve you of your
obligations under this Agreement, nor will it limit ENTRUST’s right to any other
relief it may be entitled to seek.

 

17. YOU ACKNOWLEDGE THAT YOU HAVE READ THIS SEPARATION AGREEMENT / RELEASE AND
THAT YOU UNDERSTAND ALL OF ITS TERMS AND EXECUTE IT VOLUNTARILY WITH FULL
KNOWLEDGE OF ITS SIGNIFICANCE AND THE CONSEQUENCES THEREOF. FURTHER, YOU
ACKNOWLEDGE THAT YOU HAVE HAD AN ADEQUATE OPPORTUNITY TO REVIEW AND CONSIDER THE
TERMS OF THIS SEPARATION AGREEMENT AND RELEASE, INCLUDING, AT YOUR DISCRETION,
THE RIGHT TO DISCUSS THIS DOCUMENT WITH LEGAL COUNSEL OF YOUR CHOICE. FINALLY,
YOU HEREBY ACKNOWLEDGE THAT YOU INTEND TO GRANT TO COMPANY A FULL AND FINAL
RELEASE AS SET FORTH HEREIN.

 

18. No action taken by the Parties hereto, or either of them, either previously
or in connection with this Agreement shall be deemed or construed to be an
acknowledgment or admission by either party of any fault or liability whatsoever
to the other party or to any third party.

 

19. Except as expressly provided to the contrary or as precluded by operation of
law, this Agreement shall be binding upon, and inure to the benefit of, you and
your heirs, administrators, representative, executors, successors, and assigns
and its enforceability shall not be challenged by such individuals.

 

20. The terms and conditions of this Agreement will be open for your review and
consideration through the close of business on October 17, 2003. If you have not
returned an executed copy of this Agreement by facsimile or an original to Mr.
Jay Kendry, at the address referenced in paragraph 4 of this Agreement, by the
close of business by or on October 17, 2003, then the terms and conditions set
forth in this Agreement shall be withdrawn as of that time and date.

 

21. This Agreement constitutes the entire understanding of the parties with
respect to the subject matter hereof and there are no promises, understandings
or representations other than those set forth herein. This Agreement may be
modified only with a written instrument duly executed by each of the parties.
This Agreement supercedes all other agreements or understanding with respect to
the subject matter hereof.

 

22. The Parties agree that any dispute relating to the terms of this Agreement
or any of the matters herein released shall be subject to binding arbitration in
Colin County, Texas before the American Arbitration Association under its
Employment Dispute Resolution Rules, or by a judge to be mutually agreed upon.
The Parties agree that the prevailing party in any arbitration shall be entitled
to injunctive relief in any court of competent jurisdiction to enforce the
arbitration award. The Parties agree that the prevailing party in any
arbitration shall be awarded its reasonable attorneys’ fees and costs. The
Parties hereby agree to waive their right to have any dispute between them
resolved in a court of law by a judge or jury. This paragraph 22 will not
prevent either party from seeking injunctive relief (or any other provisional
remedy) from any court having jurisdiction over the parties and the subject
matter of their dispute relating to Employee’s obligations under this Agreement
and the agreements incorporated herein by reference.

 

23. This Agreement shall be deemed to have been executed and delivered within
the State of Texas, and it shall be construed, interpreted, governed, and
enforced in accordance with the laws of the State of Texas, without regard to
choice of law principles. Any judicial proceeding related to any provision of
this Agreement (to the extent permitted under the preceding paragraph) shall be
instituted only in courts with venue in the State of Texas, except that the
Company may seek injunctive relief in any court having jurisdiction for any
claim relating to the alleged misuse or misappropriation of the Company’s trade
secrets or confidential or proprietary information. Subject to the requirements
of paragraph 22, you hereby expressly consent to venue and personal jurisdiction
of the state and federal courts in the State of Texas for any lawsuit filed
there against you by the Company arising from or relating to this Agreement.

 

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24. If any provision of this Agreement shall be determined to be invalid,
illegal, or unenforceable, in whole or in part, neither the validity of the
remaining parts of such provision nor the validity of any other provision of
this Agreement shall in any way be affected thereby. In lieu of such invalid,
illegal, or unenforceable provision, this Agreement shall be automatically
reformed and construed to include provisions as similar in terms to such
invalid, illegal, or unenforceable provision as may be possible so as to be
valid, legal, and enforceable.

 

25. This Agreement may be executed in counterparts, and each counterpart shall
have the same force and effect as an original and shall constitute an effective,
binding agreement on the part of each of the undersigned.

 

IN WITNESS WHEREOF, intending to be legally bound, the parties have executed
this Agreement as of the day and year as set forth below.

 

Entrust, Inc.      

Ed Pillman

By:  

    /s/ James D. Kendry

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    /s/ Ed Pillman

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Title:  

    Vice President & CGO

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      Date:  

    09/23/03

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Date:  

    September 23, 2003

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EXHIBIT A

 

WAIVER AND RELEASE

 

This Waiver and Release (“Waiver”) is entered into between Entrust Inc., its
parents, subsidiaries (including enCommerce, Inc.), affiliates, successors,
assigns, officers, directors, employees, and agents (in their individual and
representative capacities) (“ENTRUST” or the “Company”) and the undersigned
employee (“Employee” or “you”).

 

  1. You acknowledge and represent that you have had, or have had the
opportunity to have, at least twenty-one (21) calendar days to consider the
subject matter of this Waiver and to sign and return this document. To be valid,
you must sign and return this Waiver to Mr. Jay Kendry, Vice President, Chief
Governance Officer and Secretary, Entrust, Inc., 16633 North Dallas Parkway,
Addison, TX 75001, no earlier than December 31, 2004 and no later than the close
of business on January 31, 2005. In addition, you acknowledge that you will have
seven (7) calendar days following execution to revoke this Waiver by written
notice. To be valid, any revocation must be received by Mr. Kendry at the
address above no later than the close of business seven (7) calendar days after
you sign this Waiver.

 

  2. YOU HEREBY FULLY AND UNCONDITIONALLY RELEASE AND FOREVER DISCHARGE ENTRUST
(EXCEPT FOR THE PROMISES AND COMMITMENTS CONTAINED HEREIN), TO THE EXTENT
PERMITTED BY LAW, FROM ANY AND ALL CLAIMS CAUSES OF ACTION, RIGHTS, OR DEMANDS,
INCLUDING, WITHOUT LIMITATION, CLAIMS FOR SALARY, INCENTIVE COMPENSATION,
VACATION PAY, BENEFITS OR OTHER COMPENSATION AND PERQUISITES; CLAIMS ARISING IN
CONTRACT OR TORT; AND CLAIMS (INCLUDING, BUT NOT LIMITED TO, YOUR RIGHT TO MAKE
A CLAIM FOR DAMAGES IN YOUR OWN RIGHT OR THROUGH A SUIT BROUGHT BY ANY THIRD
PARTY ON YOUR BEHALF) UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967,
THE CIVIL RIGHTS ACTS OF 1964 (AS AMENDED) AND 1991, THE AMERICANS WITH
DISABILITIES ACT OF 1990, THE FAMILY AND MEDICAL LEAVE ACT OF 1993, THE TEXAS
COMMISSION ON HUMAN RIGHTS ACT, OR ANY OTHER FEDERAL, STATE OR LOCAL LAW OR
ORDINANCE. THE FOREGOING WAIVER AND RELEASE EXTENDS TO ALL CLAIMS YOU MAY NOW
HAVE OR MAY HAVE HAD IN THE PAST DIRECTLY OR INDIRECTLY BASED UPON ANY FACT,
MATTER, EVENT OR CAUSE, WHETHER KNOWN OR UNKNOWN, ARISING OUT OF OR RELATING TO
YOUR EMPLOYMENT BY ENTRUST AND YOUR SEPARATION THEREFROM, OR YOUR RELATIONSHIP
WITH ENTRUST OR THE TERMS OF ANY WRITTEN OR ORAL EMPLOYMENT ARRANGEMENTS OR THE
LIKE THAT YOU MAY HAVE ENTERED INTO WITH ENTRUST. WHILE THIS WAIVER MAY NOT BE
USED TO INTERFERE WITH YOUR RIGHT TO FILE A CHARGE OR PARTICIPATE IN AN
INVESTIGATION OR PROCEEDING CONDUCTED BY THE EQUAL EMPLOYMENT OPPORTUNITY
COMMISSION OR ANY SIMILAR AGENCY, YOU UNDERSTAND AND AGREE THAT ENTRUST MAY USE
THIS WAIVER AS A DEFENSE TO ANY SUCH CHARGE YOU FILE, INVESTIGATION OR
PROCEEDING IN WHICH YOU PARTICIPATE, OR REMEDY WHICH YOU SEEK.

 

  4. YOU ACKNOWLEDGE THAT YOU HAVE READ THIS WAIVER AND THAT YOU UNDERSTAND ALL
OF ITS TERMS AND EXECUTE IT VOLUNTARILY WITH FULL KNOWLEDGE OF ITS SIGNIFICANCE
AND THE CONSEQUENCES THEREOF. FURTHER, YOU ACKNOWLEDGE THAT YOU HAVE HAD, OR
HAVE HAD THE OPPORTUNITY TO HAVE, TWENTY-ONE DAYS TO REVIEW AND CONSIDER THE
TERMS OF THIS WAIVER, INCLUDING, AT YOUR DISCRETION, THE RIGHT TO DISCUSS THIS
DOCUMENT WITH LEGAL COUNSEL OF YOUR CHOICE. FINALLY, YOU ACKNOWLEDGE THAT YOU
INTEND TO GRANT TO ENTRUST A FULL AND FINAL RELEASE AS SET FORTH HEREIN.

 

  5. This Waiver shall not be construed in any way as an admission by ENTRUST or
any party released under paragraph 3 that it has acted wrongfully with respect
to you or that you have any right to recover from ENTRUST or any such party.
ENTRUST specifically disclaims and denies any liability to or wrongful conduct
with respect to you.

 

 

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  6. You understand this Waiver shall be binding upon you and your heirs,
administrators, representatives, executors, successors, and assigns and its
enforceability shall not be challenged by such persons.

 

  7. The terms and conditions of this Waiver will be open for your review and
consideration through the close of business on January 31, 2005. If you have not
returned an executed copy of this Waiver by facsimile or an original as
prescribed in paragraph 1 of this Waiver, by the close of business on February
28, 2005, then the terms and conditions set forth in this Waiver shall be
withdrawn as of that time and date.

 

  8. You agree to indemnify and hold harmless ENTRUST and any party released
under paragraph 3 from and against any loss, cost, damage, or expense (including
attorneys fees) incurred by it or them as a result of any breach by you of this
Waiver.

 

  9. This Waiver, in combination with the Agreement to which it is ancillary,
constitutes the entire understanding of the parties with respect to the subject
matter hereof and there are no promises, understandings or representations other
than those set forth herein. This Waiver may be modified only with a written
instrument duly executed by each of the parties.

 

  10. This Waiver shall in all respects be interpreted, enforced and governed
under the laws of the State of Texas.

 

  11. If any provision of this Waiver is determined to be invalid, illegal, or
unenforceable, in whole or in part, neither the validity of the remaining parts
of such provision nor the validity of any other provision on this Waiver shall
in any way be affected thereby. In lieu of such invalid, illegal, or
unenforceable provision, there shall be added automatically as part of this
Waiver a provision as similar in terms to such invalid, illegal, or
unenforceable provision as may be possible to be valid, legal, and enforceable.

 

IN WITNESS WHEREOF, intending to be legally bound, the parties have executed
this Waiver as of the day and year as set forth below.

 

Entrust, Inc.    Ed Pillman

By:                                         
                                                                                
 

                                         
                                        
                                                      

Title:                                     
                                        
                                          

   Date:                                         
                                                                                

Date: