Exhibit 10.13

EMPLOYMENT AGREEMENT

 

This Employment Agreement (this “Agreement”) is made as of September 10, 2003,
by and between TippingPoint Technologies, Inc., a Delaware corporation (the
“Company”), and James A. Hamilton (“Employee”).

 

WHEREAS, the Company desires to obtain the services of Employee, and Employee
desires to provide services to the Company, in accordance with the terms and
conditions of this Agreement;

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company and Employee agree as follows.

 

1. Employment. Effective on the Effective Date (as defined in Section 2) and
subject to the terms and conditions of this Agreement, the Company agrees to
employ Employee as its President and Chief Operating Officer. Employee agrees to
perform the duties associated with that position diligently and to the
reasonable satisfaction of the Company’s Chief Executive Officer and Board of
Directors. From the Effective Date until termination of this Agreement, Employee
will devote Employee’s full business time, attention and energies to the
business of the Company. Employee will comply with the policies and guidelines
established by the Company from time to time.

 

2. Term and Termination. Employee will be employed under this Agreement for an
initial term of one year (the “Initial Term”), beginning on the date of the
Agreement (the “Effective Date”). Notwithstanding the foregoing, either party
may terminate this Agreement at any time, with or without cause, by giving 30
days written notice of termination to the other party, and upon termination,
neither party will have any continuing obligation to the other party, except as
follows: (a) if the Company terminates this Agreement without Cause (as defined
below) prior to the end of the Initial Term, then the Company will be obligated
to pay after such notice an amount equal to three quarters of Employee’s base
annual salary in nine (9) monthly payments and supply full benefits for nine (9)
months beyond the termination date, and (b) the provisions of Sections 5, 6, 7
and 8 hereof will survive any termination of this Agreement for any reason in
accordance with their terms. As used in this Agreement, termination for “Cause”
shall mean any termination of Employee for (a) refusal to perform duties
assigned, or disobedience of orders and directives issued to Employee,
(b) violation of any rule or regulation of which Employee has notice and that
may be established from time to time for the conduct of the Company’s business,
(c) un1awful misconduct by Employee, including, without limitation, the
commission of an act of fraud or embezzlement against the Company or commission
of a crime involving moral turpitude, (d) consistent willful misconduct or
negligence in performing Employee’s duties hereunder, (e) breach of fiduciary
duty in connection with Employee’s employment by the Company, (f) a breach of
any of the terms of this Agreement or (g) failure to relocate to the Austin area
within one year of this agreement date. Sixty (60) days prior to the expiration
of the initial term, both parties agree to negotiate in good faith a subsequent
one (1) year renewal of this contract.

 

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3. Compensation. Beginning on the Effective Date and thereafter during the term
of Employee’s employment, the Company will pay Employee a base salary at the
rate of $180,000 per year, payable bi-weekly or semi-monthly in accordance with
the payroll practices of the Company in effect from time to time. Such base
salary shall be subject to review and potential adjustment at least annually, in
accordance with the compensation policies of the Company in effect from time to
time. Employee shall also, during the term of Employee’s employment hereunder,
be eligible for a quarterly performance bonus of up to $12,500. For the initial
term
(l2-months), Employee will receive a temporary living allowance of up to $2,000
per month. All of Employee’s compensation under this Agreement will be subject
to deduction and withholding authorized or required by applicable law.

 

4. Employee Benefits. Beginning on the Effective Date and thereafter during the
term of this Agreement, the Company will provide to Employee such fringe
benefits, perquisites, vacation (4 weeks) and other benefits that the Company
provides to its similarly situated employees. The Company will reimburse
Employee for reasonable out-of-pocket business expenses incurred and documented
in accordance with the policies of the Company in effect from time to time.

 

5. Assignment of Intellectual Property Rights.

 

(a) In consideration of the Company’s agreement to employ Employee and the
receipt by the Employee of Confidential Information, Employee hereby assigns to
the Company all of Employee’s rights in any Intellectual Property which Employee
makes or conceives, whether as a sole inventor or as a joint inventor, whether
made within or outside working hours or upon the premises of the Company or
elsewhere, during Employee’s employment with the Company, its subsidiaries or
affiliates. This assignment shall not apply to Intellectual Property that
Employee has an obligation to assign to a former employer. “Intellectual
Property” means any information of a technical and/or business nature such as
ideas, discoveries, inventions, trade secrets, know-how, and writings and other
works of authorship which relate in any manner to the actual or anticipated
business or research and development of the Company, its subsidiaries or
affiliates.

 

(b) During and subsequent to Employee’s employment, upon the request and at the
expense of the Company or its nominee and for no additional personal
remuneration, Employee agrees to execute any instrument which the Company
considers necessary to secure or maintain for the benefit of the Company
adequate patent and other property rights in the United States and all foreign
countries with respect to any Intellectual Property. Employee also agrees to
assist the Company as required to draft said instruments and to obtain and
enforce said rights.

 

(c) Employee agrees to promptly disclose to the Company any Intellectual
Property when conceived or made by Employee, in whole or in part, and to make
and maintain adequate and current records thereof. Upon the termination of
Employee’s employment for any reason, Employee agrees to promptly turn over to
the Company all models, prototypes, drawings, records, documents, and the like
in Employee’s possession or under Employee’s control, whether prepared by
Employee or others, relating to Intellectual Property, and any other work done
for the Company related thereto. Employee acknowledges that all such items are
the sole property of the Company.

 

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(d) Employee agrees that any Intellectual Property disclosed by Employee within
one (1) year following termination of Employee’s employment for any reason shall
be the sole property of the Company unless and until finally determined by a
court of competent jurisdiction to have been made or conceived after the
termination of Employee’s employment.

 

6. Confidential Information.

 

(a) In the course of performing services for the Company under this Agreement,
Employee may receive or have access to commercially valuable, confidential or
proprietary information. “Confidential Information” means all confidential
information, whether oral or written, now or hereafter developed, acquired or
used by the Company and relating to the business of the Company that is not
generally known to others in the Company’s area of business, including without
limitation (to the extent confidential) (i) any trade secrets, work product,
processes, analyses, know-how, software and hardware development information or
other Intellectual Property of the Company; (ii) the Company’s advertising,
product development, strategic and business plans and information; (iii)
customer lists and prices at which the Company has sold or offered to sell its
products or services; and (iv) the Company’s financial statements and other
financial information.

 

(b) Employee acknowledges and agrees that the Confidential Information (to the
extent it can be owned) is and will be the sole and exclusive property of the
Company. Employee will not use any Confidential Information for Employee’s own
benefit or disclose any Confidential Information to any third party (except in
the course of performing Employee’s authorized duties for the Company under this
Agreement), either during or subsequent to Employee’s employment with the
Company. Upon termination of Employee’s employment with the Company, Employee
will promptly deliver to the Company all documents, computer disks and other
computer storage devices and other papers and materials (including all copies
thereof in whatever form) containing or incorporating any Confidential
Information or otherwise relating in any way to the Company’s business that are
in Employee’s possession or under Employee’s control. Employee also agrees not
to disclose to the Company any Confidential Information belonging to others.

 

7. Restrictive Covenant. For purposes hereof, the “Noncompetition Period” will
begin on the Effective Date and end eighteen (18) months after the date
Employee’s employment with the Company is terminated for any reason. In
consideration of the Company’s agreement to employ Employee and the receipt by
the Employee of Confidential Information, Employee hereby agrees that, during
the Noncompetition Period, Employee will not (except in the course of performing
Employee’s authorized duties for the Company under this Agreement), directly or
indirectly, on Employee’s own behalf or as an officer, director, employee,
consultant or other agent of, or as a stockholder, partner or other investor in,
any person or entity (other than the Company or its affiliates):

 

(a) engage in any business conducted by the Company, its subsidiaries or
affiliates and any business competitive with the business conducted by the
Company, its subsidiaries or affiliates (collectively a ‘“Competing Business”)
within any geographic area in which the Company, its subsidiaries or affiliates
conducts any business, or in which businesses competitive

 

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with the businesses of the Company, its subsidiaries or affiliates are conducted
(the “Territory”), or give advice or lend credit, money or Employee’s reputation
to any natural person or entity engaged in or establishing a Competing Business
in the Territory; or

 

(b) directly or indirectly influence or attempt to influence any customer,
potential customer, supplier or accounts of the Company, its subsidiaries or
affiliates located within the Territory to purchase, sell or lease goods or
services related to a Competing Business other than from or to the Company; or

 

(c) solicit, encourage, or take any other action which is intended, directly or
indirectly, to induce any other employee of the Company to terminate such
employee’s employment with the Company, or interfere in any manner with the
contractual or employment relationship between the Company and any other
employees of the Company, or hire or attempt to hire any former emp1oyee of the
Company whose termination from employment has been effective for ninety (90)
days or less; provided, that the foregoing will not apply to any investment in
publicly traded securities constituting less than 5% of the outstanding
securities in such class. For purposes of this Agreement, the term “affiliate”
means with respect to any person or entity any other person or entity
controlling, controlled by or under common control with such person or entity.

 

8. Enforcement.

 

(a) Employee represents to the Company that Employee is willing and able to
engage in businesses other than a Competing Business within the Territory and
that enforcement of the restrictions set forth in Section 7 would not be unduly
burdensome to Employee. The Company and Employee acknowledge and agree that the
restrictions set forth in Section 7 are reasonable as to time, geographic area
and scope of activity and do not impose a greater restraint than is necessary to
protect the goodwill and other business interests of the Company, and Employee
agrees that that the Company is justified in believing the foregoing.

 

(b) If the provisions of Section 7 are found by a court of competent
jurisdiction to contain unreasonable or unnecessary limitations as to time,
geographical area or scope of activity, then such court is hereby directed to
reform such provisions to the minimum extent necessary to cause the limitations
contained therein as to time, geographical area and scope of activity to be
reasonable and enforceable.

 

(c) Employee acknowledges and agrees that the Company would be irreparably
harmed by any violation of Employee’s obligations under Sections 5, 6 and 7
hereof and that, in addition to all other rights or remedies available at law or
in equity, the Company will be entitled to injunctive and other equitable relief
to prevent or enjoin any such violation. If Employee violates Section 7, the
period of time during which the provisions thereof are applicable will
automatically be extended for a period of time equal to the time that Employee
began such violation until such violation permanently ceases.

 

9. No Obligation to Third Party. Employee represents and warrants that Employee
is not under any obligation to any person or other third party and does not have
any other interest which is inconsistent or in conflict with this Agreement, or
which would prevent, limit, or impair

 

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Employee’s performance of any of the covenants hereunder or Employee’s duties as
an employee of the Company.

 

10. Entire Agreement. This Agreement embody the complete agreement of the
parties with respect to the subject matter hereof and supersedes any prior
written, or prior or contemporaneous oral, understandings or agreements between
the parties that related in any way to the subject matter hereof. This Agreement
may be amended only in writing executed by the Company and Employee.

 

11. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the respective heirs, executors, administrators, legal
representatives and successors of the Company and Employee.

 

12. Notice. Any notice required or permitted under this Agreement must be in
writing and will be deemed to have been given when delivered personally, by
telecopy or by overnight courier service or three days after being sent by mail,
postage prepaid, to (a) if to the Company, to the Company’s principal place of
business, or (b) if to Employee, to Employee’s residence or to Employee’s latest
address then contained in the Company’s records (or to such changed address as
such person may subsequently give notice of in accordance herewith).

 

13. GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH SUBSTANTIVE LAWS OF TEXAS, WITHOUT GIVING EFFECT
TO ANY CONFLICTS OF LAW, RULE OR PRINCIPLE THAT MIGHT REQUIRE THE APPLICATION OF
THE LAWS OF ANOTHER JURISDICTION.

 

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IN WITNESS WHEREOF, the Company and Employee have executed and delivered this
Agreement as of the date first above written.

 

TippingPoint Technologies, Inc. By:   /s/    JAMES A. HAMILTON          

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Name: James A. Hamilton

President and COO

 

  By:   /s/    JOHN F. MCHALE  

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Name: John F. McHale

Chairman and CEO

 

 

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