exv10w1






Exhibit 10.1




EMPLOYMENT AGREEMENT




     This Employment Agreement (the “Agreement”) dated June 11, 2008, is made by and between
Sourcefire, Inc., a Delaware corporation (the “Company”), and John C. Burris (the “Executive”).



          Whereas, the Company desires to employ the Executive, and the Executive is willing to
serve in the employ of the Company upon the terms and conditions provided in this Agreement; and



          Whereas, the Executive and the Company desire to enter into this Agreement effective
as of July 14, 2008 (the “Effective Date”).



          Now Therefore, in consideration of the promises and mutual covenants herein and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Executive agree as follows:



     1. Term of Employment. Subject to the provisions of Section 8 of this Agreement,
Executive shall be employed by the Company for the period commencing on the Effective Date and
continuing for an indefinite term (such period, the “Employment Term”) on the terms and subject to
the conditions set forth in this Agreement.



     2. Position.



          2.1 During the Employment Term, Executive shall serve as the Company’s Chief Executive Officer
and a member of the Board of Directors of the Company (the “Board”). In such position, Executive
shall have such duties and authority as shall be determined from time to time by the Board.
Executive shall continue to serve as a member of the Board without additional compensation for so
long as he remains the Chief Executive Officer of the Company.



          2.2 During the Employment Term, Executive will devote Executive’s full business time and
reasonable best efforts to the performance of Executive’s duties hereunder and will not engage in
any other business, profession or occupation for compensation or otherwise which would conflict or
interfere with the rendition of such services either directly or indirectly, without the prior
written consent of the Board; provided that nothing herein shall preclude Executive (i)
subject to the prior approval of the Board, from accepting appointment to or from continuing to
serve on any board of directors or trustees of any business corporation or any charitable
organization, (ii) managing his personal investments and affairs or (iii) continuing to serve in
his current capacity as a member of the board of directors of Artifact Software; provided
in each case, and in the aggregate, that such activities do not conflict or interfere with the
performance of Executive’s duties hereunder or conflict with Section 9 of this Agreement.



     3. Base Salary. During the Employment Term, the Company shall pay Executive a base
salary at the annual rate of $400,000, payable in regular installments in accordance with the
Company’s usual payment practices. Executive shall be entitled to such increases (but not
decreases) in Executive’s base salary, if any, as may be determined on an annual basis in the sole
discretion of the Board. Executive’s annual base salary, as in effect from time to time, is
hereinafter referred to as the “Base Salary.”



 









 





     4. Bonus Opportunity. With respect to each full fiscal year during the Employment Term
Executive shall be eligible to earn an annual performance bonus of up to 100% of Executive’s Base
Salary (the “Target Bonus”) under the Company’s Annual Executive Incentive Plan (“AIP”), though at
the sole discretion of the Company’s Compensation Committee Executive may be entitled to an annual
performance bonus in excess of the Target Bonus pursuant to the AIP. Any bonuses awarded under the
AIP shall be payable at the time and in the manner specified in the AIP. A copy of the 2008
Executive Annual Incentive Plan and the Executive’s AIP Participation Agreement for 2008 is
attached as Exhibit A hereto. Executive will also be paid a one-time signing bonus of
$25,000 payable in accordance with the Company’s ordinary payroll practices.



     5. Equity Arrangements.



          5.1 Subject to the approval of the Compensation Committee of the Board (the “Compensation
Committee”), Executive shall be awarded an initial grant of 495,000 options to purchase shares of
Common Stock of the Company (the “Initial Time-Based Option Grant”), subject to the vesting
schedule and the other terms and conditions set forth in a stock option agreement between Executive
and the Company in the form substantially similar to Exhibit B1 attached hereto. The
Initial Time-Based Option Grant shall vest 25% on the one-year anniversary of the Effective Date
and 1/48 monthly thereafter.



          5.2 Subject to the approval of the Compensation Committee, Executive shall be awarded an
initial grant of 99,924 options to purchase shares of Common Stock of the Company (the “Initial
Performance-Based Option Grant”), subject to the vesting schedule and the other terms and
conditions set forth in a stock option agreement between Executive and the Company in the form
substantially similar to Exhibit B2 attached hereto. The Initial Performance-Based Option
Grant stock option agreement shall provide for vesting based upon the trading value of the
Company’s Common Stock.



          5.3 Subject to the approval of the Compensation Committee, Executive shall be awarded an
initial grant of 50,000 shares of restricted Common Stock of the Company at a per share purchase
price of $0.001 (the “Initial Time-Based Restricted Stock Award” and, together with the Initial
Time-Based Option Grant and the Initial Performance-Based Option Grant, the “Initial Awards”),
subject to the vesting schedule, repurchase right and the other terms and conditions set forth in a
restricted stock agreement between Executive and the Company in the form substantially similar to
Exhibit B3 attached hereto. The Initial Time-Based Restricted Stock Award restricted stock
agreement will provide that the percentage of the restricted stock that the Company will be
entitled to repurchase shall begin at 100 percent and decrease by 25 percent after one (1) year
from the Effective Date, with a subsequent decrease by 25 percent each anniversary thereafter, such
that the right of repurchase shall be reduced to zero percent by the fourth anniversary of the
Effective Date. Executive’s current equity award of 27,538 shares for Executive’s service on the
Board is not affected by the Initial Awards.



          5.4 Beginning with the Fiscal Year 2010 compensation cycle, during the Employment Term,
Executive shall be entitled to participate in the Company’s equity arrangements as in effect from
time to time on the same basis as those equity arrangements are generally made available to other
senior executives of the Company.



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     6. Employee Benefits.



          6.1 During the Employment Term, Executive shall be entitled to participate in the Company’s
employee benefit plans as in effect from time to time (collectively “Employee Benefits”), on the
same basis as those benefits are generally made available to other senior executives of the
Company. Executive shall be eligible to accrue up to 20 days of paid time off (“PTO”) per calendar
year, pro-rated for partial years of service, in accordance with the Company’s policy on PTO
accrual and use applicable to senior executives. In addition, Executive shall be entitled to
receive the Company-paid supplemental death benefits set forth in Exhibit C. The Company
further agrees to take commercially reasonable efforts to increase Executive’s coverage under the
Company’s long-term disability plan, directly or through the use of a supplemental policy, to a non
taxable monthly benefit of $28,000, provided, however, that the premium for such coverage does not
exceed an amount five times the amount of the Company’s current premium.



          6.2 Executive shall use his commercially reasonable efforts to relocate and establish his
principal residence within sixty (60) miles of the Company’s headquarters located at 9770 Patuxent
Woods Drive, Columbia, Maryland 21046, as soon as reasonably practicable, provided,
however, that if Executive is unable to sell his current principal residence within three (3)
months of the Effective Date without incurring a substantial loss, upon approval by the
Compensation Committee the Company shall provide to the Executive, at the Company’s expense, a
short-term corporate apartment until he is able to sell his residence, for a period up to one (1)
year. The Company shall provide to Executive a payment of up to 50% of the Selling Cost of
Executive’s current principal residence, not to exceed $100,000 (the “Selling Cost Payment”). The
Selling Cost Payment vests monthly over a four-year period. If, during the four-year vesting
period, Executive terminates his employment without Good Reason (as defined below) or if Executive
is terminated for Cause (as defined below), Executive shall reimburse the Company the amount of the
unvested portion of the Selling Cost Payment. For purposes of this Agreement, “Selling Cost” shall
mean the actual and necessary selling costs which may include brokerage commission, title
insurance, escrow fees, prepayment penalties, taxes, charges and fees fixed by a local authority to
consummate the sale of the residence and customary miscellaneous seller’s costs.



          6.3 The Company shall also provide an additional $60,000 payment to off-set Executive’s
anticipated costs in relocating his principal residence (the “Relocation Payment”); provided,
however, that any taxes payable with respect to the Relocation Payment shall be the
responsibility of Executive.



     7. Business Expenses. During the Employment Term, reasonable business expenses
incurred by Executive in the performance of Executive’s duties hereunder shall be reimbursed by the
Company in accordance with Company policies and practices applicable to senior executives.



     8. Termination. The Employment Term and Executive’s employment hereunder may be
terminated by either party at any time and for any reason. Executive’s rights upon termination of
employment with the Company and its affiliates shall be governed by the Agreement.



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          8.1 By the Company For Cause, By Executive’s Resignation Without Good Reason or Upon Death
or Disability.



               (a) The Employment Term and Executive’s employment hereunder may be terminated by the Company
for Cause (as defined below) or as a result of Executive’s Disability (as defined below), and shall
terminate automatically upon Executive’s death or his resignation without Good Reason (as defined
below).



               (b) If Executive’s employment is terminated by the Company for Cause, or as a result of
Executive’s Disability or death, or if Executive resigns without Good Reason (as defined below),
Executive shall be entitled to receive:



                    (i) the Base Salary through the date of termination;



                    (ii) an amount representing any accrued, but unused PTO;



                    (iii) any Target Bonus earned, but unpaid, as of the date of termination for the immediately
preceding fiscal period, payable in accordance with the applicable AIP Participation Agreement;



                    (iv) reimbursement for any unreimbursed business expenses properly incurred by Executive, in
each case, in accordance with Company policy on or prior to the date of Executive’s termination;
provided claims for such reimbursement (accompanied by appropriate supporting
documentation) are submitted to the Company within 90 days following the date of Executive’s
termination of employment; and



                    (v) such Employee Benefits, if any, as to which Executive may be entitled under the employee
benefit plans of the Company (the amounts described in clauses 8.1(b)(i) through (v) hereof,
reduced by any amounts owed to the Company by Executive, being referred to as the “Accrued
Rights”).


Following such termination of Executive’s employment by the Company for Cause, or on account of
Executive’s Disability, upon Executive’s death, or by Executive without Good Reason, Executive
shall have no further rights to any compensation or any other benefits under this Agreement except
as set forth in this Section 8.1.




          8.2 By the Company Without Cause or Resignation by Executive for Good Reason.



               (a) The Employment Term and Executive’s employment hereunder may be terminated by the Company
without Cause or by Executive’s resignation for Good Reason.



               (b) If Executive’s employment is terminated by the Company without Cause (and other than by
reason of death or Disability) or if Executive resigns for Good Reason, in either case other than
in the one month period prior to, or the 13 month period following a Change in Control (as defined
below), Executive shall be entitled to receive:



                    (i) the Accrued Rights; and



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                    (ii) subject to Executive’s (x) delivery of a valid and irrevocable general release of all
claims against the Company and its affiliates, substantially in the form attached hereto as
Exhibit D, as may be modified to take into account any changes in law or the underlying
circumstances (the “General Release”), and (y) continued compliance, in all material respects, with
the restrictive covenants set forth in Sections 9 and 10 below):



                         (A) continued payment of the Base Salary in accordance with the Company’s normal payroll
practices for a period of 12 months following the date of such termination; and



                         (B) (i) subject to Executive’s continued co-payment of premiums in the same amount as
Executive paid immediately prior to termination, continued participation (to the extent permitted
under applicable law and the terms of such plan) for Executive and his then-eligible dependents in
the Company’s group health plan in which they were participating at the time of termination for the
first 12 months following termination at the Company’s expense, or if such coverage is not
permitted by the terms of the Company’s group health plan as in effect at the relevant time,
continuation coverage under the Consolidated Budget Omnibus Reconciliation Act of 1985, as amended
(“COBRA”) and any state or local law of similar effect, at the same out-of-pocket cost to the
Executive as would have otherwise been applicable, for a period of 12 months, and (ii) following
such 12 month period the right to continuation coverage under COBRA and any state or local law of
similar effect;



                         (C) the unvested stock options under the Initial Time-Based Option Grant shall accelerate and
become vested; by twenty-five percent (25%) of the total shares originally under the Initial
Time-Based Option Grant; and



                         (D) the unvested restricted stock under the Initial Time-Based Restricted Stock Award shall
accelerate and become vested by twenty-five percent (25%) of the total shares originally under the
Initial Time-Based Restricted Stock Award.


The aggregate amount described in this Section 8.2 shall be reduced by the present value of any
other severance or termination benefits payable to Executive under any other plans, programs or
arrangements of the Company or its affiliates. Following Executive’s termination of employment by
the Company without Cause (other than by reason of Executive’s death or Disability) or by
Executive’s resignation for Good Reason, except as set forth in this Section 8.2, Executive shall
have no further rights to any compensation or any other benefits under this Agreement.




          8.3 By the Company Without Cause or Resignation by Executive for Good Reason in Connection
With a Change in Control.



               (a) The Employment Term and Executive’s employment hereunder may be terminated by the Company
without Cause or by Executive’s resignation for Good Reason, in either case within one month prior
to, or within 13 months following, the consummation of a Change in Control.



               (b) If Executive’s employment is terminated by the Company without Cause (and other than by
reason of death or Disability) or if Executive resigns for Good Reason,



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in either case in the one month period prior to or the 13 month period following the
consummation of a Change in Control, Executive shall be entitled to receive:



                    (i) the Accrued Rights; and



                    (ii) subject to Executive’s (i) delivery of a valid and irrevocable General Release in the
form attached hereto as Exhibit D, and (ii) continued compliance, in all material respects,
with the restrictive covenants set forth in Sections 9 and 10 below:



                         (A) a single cash payment equal to Executive’s annual Base Salary and Target Bonus amount;



                         (B) (i) subject to Executive’s continued co-payment of premiums in the same amount as
Executive paid immediately prior to termination, continued participation (to the extent permitted
under applicable law and the terms of such plan) for Executive and his then-eligible dependents in
the Company’s group health plan in which they were participating at the time of termination for the
first 12 months following termination at the Company’s expense, or if such coverage is not
permitted by the terms of the Company’s group health plan as in effect at the relevant time,
continuation coverage under the Consolidated Budget Omnibus Reconciliation Act of 1985, as amended
(“COBRA”) and any state or local law of similar effect, at the same out-of-pocket cost to the
Executive as would have otherwise been applicable, for a period of 12 months, and (ii) following
such 12 month period the right to continuation coverage under COBRA and any state or local law of
similar effect;



                         (C) the unvested stock options under the Initial Time-Based Option Grant shall accelerate and
become fully vested; and



                         (D) the unvested restricted stock under the Initial Time-Based Restricted Stock Award shall
accelerate and become fully vested.


The aggregate amount described in this Section 8.3 shall be reduced by the present value of any
other severance or termination benefits payable to Executive under any other plans, programs or
arrangements of the Company or its affiliates. Following Executive’s termination of employment by
the Company without Cause (other than by reason of Executive’s death or Disability) or by
Executive’s resignation for Good Reason, except as set forth in this Section 8.3, Executive shall
have no further rights to any compensation or any other benefits under this Agreement.




          8.4 Definitions.



               (a) For purposes of this Agreement, “Cause” shall mean (i) theft, fraud, material dishonesty
or gross negligence in the conduct of the Company’s business, (ii) continuing neglect of the
Executive’s duties and responsibilities that has a material adverse effect on the Company, (iii)
engaging in personal conduct that would constitute grounds for liability for sexual harassment or
discrimination (as proscribed by the U.S. Equal Employment Opportunity Commission Guidelines or any
other applicable state or local regulatory body), (iv) conviction of, or plea of guilty or nolo
contendere to, a felony (other than a violation of traffic or motor vehicle laws), or (v) willful
and continued material breach by the Executive of his or her



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“Assignment of Inventions, Non-Disclosure, Non-Solicitation and Non-Competition Agreement” or
of any other employment-related agreements (including, without limitation, any employment agreement
or offer letter) between the Executive and the Company that has a material adverse effect on the
Company; provided, however, that for purposes of the Plan, any purported termination of the
Executive’s employment shall be presumed to be other than for Cause, unless (A) the Company first
provides written notice to the Executive which includes a copy of a resolution duly adopted by the
Board at a meeting of the Board called and held for the purpose of considering such termination
which finds “Cause” to exist and specifies the particulars of such conduct, and (B) the Executive
has been provided a period of at least thirty (30) days after receipt of the Company’s notice
during which to cure, rescind or otherwise remedy the actions, events, or circumstances described
in the Company’s notice to the extent they are based on clauses (ii), (iii) or (v) above.



               (b) For purposes of this Agreement, “Disabled” or “Disability” shall have the meaning set
forth in the Company’s long-term disability plan applicable to senior executives.



               (c) For purposes of this Agreement, “Good Reason” shall mean (i) a material decrease in the
Executive’s Base Salary, (ii) a material reduction or material adverse change in the Executive’s
authority, duties, title or, job responsibilities, or reporting structure, (iii) a geographic
relocation of the Executive without his or her consent more than thirty (30) miles from the current
location of his or her office as of the date hereof), or (iv) a willful and continued material
breach by the Company of this Agreement or the “Assignment of Inventions, Non-Disclosure,
Non-Solicitation and Non-Competition Agreement” that has a material adverse effect on the
Executive; provided, however, that any proposed termination of employment by the Executive shall be
presumed to be other than for Good Reason, unless the Executive first provides written notice to
the Company within ninety (90) days following the effective date of such event, and the Company has
been provided a period of at least thirty (30) days after receipt of the Executive’s notice during
which to cure, rescind or otherwise remedy the actions, events, or circumstances described in such
notice. The Executive’s termination of employment shall not be considered to be for Good Reason
unless it occurs no more than one hundred and twenty (120) days following the initial occurrence of
the purported Good Reason event(s) as described above.



               (d) For purposes of this Agreement, “Change in Control” shall mean (A) the direct or indirect
acquisition by any person or related group of persons (other than an acquisition from or by the
Company or by a Company sponsored employee benefit plan or by a person that directly or indirectly
controls, is controlled by, or is under common control with, the Company) of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act)) of securities possessing more than fifty percent (50%) of the total combined voting power of
the Company’s outstanding securities pursuant to a tender or exchange offer made directly to the
Company’s stockholders which a majority of the Continuing Directors who are not Affiliates or
Associates of the offeror do not recommend such stockholders accept; (B) a change in the
composition of the Board over a period of twelve (12) months or less such that a majority of the
Board members (rounded up to the next whole number) ceases, by reason of one or more contested
elections for Board membership, to be comprised of individuals who are Continuing Directors; (C) a
merger or consolidation in which the Company is not the surviving entity, except for a transaction
the principal purpose of which



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is to change the state in which the Company is incorporated; (D) the sale, transfer or other
disposition of all or substantially all of the assets of the Company; (E) the complete liquidation
or dissolution of the Company; (F) any reverse merger or series of related transactions culminating
in a reverse merger (including, but not limited to, a tender offer followed by a reverse merger) in
which the Company is the surviving entity but (i) the shares of the Company’s common stock
outstanding immediately prior to such merger are converted or exchanged by virtue of the merger
into other property, whether in the form of securities, cash or otherwise, or (ii) in which
securities possessing more than fifty percent (50%) of the total combined voting power of the
Company’s outstanding securities are transferred to a person or persons different from those who
held such securities immediately prior to such merger or the initial transaction culminating in
such merger, and excluding any such transaction or series of related transactions that the Company
determines shall not be a Change in Control; or (G) acquisition in a single or series of related
transactions by any person or related group of persons (other than the Company or by a
Company-sponsored employee benefit plan) of beneficial ownership (within the meaning of Rule 13d-3
of the Exchange Act) of securities possessing more than fifty percent (50%) of the total combined
voting power of the Company’s outstanding securities. As used herein, “Continuing Directors” means
members of the Board who either (i) have been Board members continuously for a period of at least
twelve (12) months or (ii) have been Board members for less than twelve (12) months and were
elected or nominated for election as Board members by at least a majority of the Board members
described in clause (i) who were still in office at the time such election or nomination was
approved by the Board. As used herein, “Affiliate” and “Associate” shall have the respective
meanings ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act. Notwithstanding
the foregoing, no payment of amounts subject to Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code’) shall be triggered by any Change of Control that does not constitute a
“change in the ownership or effective control, or in the ownership of a substantial portion of the
assets,” each as defined in Section 409A of the Code and its related Treasury regulations.



          8.5 No Mitigation or Offset. The amount of any payment or benefit provided for in
Section 8 shall not be reduced, offset or subject to recovery by the Company or any of its
subsidiaries or affiliates by reason of any compensation earned by Executive as the result of
employment by another employer after Executive’s employment with the Company terminates for any
reason. In addition, Executive shall be under no obligation to seek other employment or to take any
other actions to mitigate the amounts payable under Section 8.



          8.6 Section 4999



               (a) In the event of a Change in Control, or other event constituting a change in the ownership
or effective control of the Company or ownership of a substantial portion of the assets of the
Company described in Section 280G(b)(2)(A)(i) of the Code, the Company, at its sole expense, shall
cause its independent auditors promptly to review all payments, accelerations, distributions and
benefits that have been made to or provided to, and are to be made, or may be made, to or provided
to, the Executive under this Agreement, and any other agreement or plan benefiting the Executive
(collectively the “Original Payments”), to determine the applicability of Section 4999 of the Code
to the Executive in connection with such event (other than under this Section 8.6(a)). If the
Company’s independent auditors determine that the Original Payments are subject to excise taxes
under Section 4999 of the Code (the “Excise Tax”), then:



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                    (i) If (A) the aggregate Original Payments exceed an amount (the “Parachute Threshold”) equal
to two hundred ninety nine percent (299%) of the Executive’s “base amount,” as defined in Section
280G(b)(3) of the Code, and (B) such excess is equal to four and six-tenths percent (4.6%) of the
Parachute Threshold or less, the Original Payments shall be reduced to an aggregate amount that is
two hundred ninety-nine percent (299%) of the Executive’s “base amount”; or



                    (ii) If (A) the aggregate Original Payments exceed the Parachute Threshold, and (B) such
excess is equal to more than four and six-tenths percent (4.6%) of the Parachute Threshold, then an
additional amount shall be paid to the Executive (the “Gross-Up Amount”) such that the net proceeds
of the Gross-Up Amount to the Executive, after deduction of the Excise Tax (including interest and
penalties) and any federal, state and local income taxes and employment taxes (including interest
and penalties) upon the Gross-Up Amount, shall be equal to the Excise Tax on the Original Payments.



               (b) The Company’s independent auditors will perform the calculations in conformity with the
foregoing provisions and will provide the Executive with a copy of their calculations. The intent
of the parties is that, except as set forth in Section 8.6(a)(i), the Company shall be solely
responsible for, and shall pay, any Excise Tax on the Original Payments and Gross-Up Amount and any
income and employment taxes (including, without limitation, penalties and interest) imposed on any
Gross-Up Amount payable hereunder.



               (c) If no determination by the Company’s independent auditors is made prior to the time the
Executive is required to file a tax return reflecting Excise Taxes on any portion of the Original
Payments, the Executive will be entitled to receive a Gross-Up Amount calculated on the basis of
the Excise Tax that the Executive reports in such tax return, within thirty (30) days after the
filing of such tax return. The Executive agrees that, for the purposes of the foregoing sentence,
the Executive is not required to file a tax return until the Executive has obtained the maximum
number and length of filing extensions available, and Executive shall have provided a copy of the
relevant portions of such tax return to the Company not less than ten (10) days prior to filing
such tax return. If, subsequent to the Executive’s filing of such tax return but within one
hundred eighty (180) days thereafter, the Company’s independent auditors determine that the
aggregate Original Payments should be reduced pursuant to Section 8.6(a)(i), the Executive shall
reimburse the Company the amount of such reduction, promptly file an amended tax return reflecting
such reduction, and promptly take any steps reasonably required to obtain a refund of any Excise
Tax paid with respect to the Original Payments.



               (d) If any tax authority finally determines that a greater Excise Tax should be imposed upon
the Original Payments or the Gross-Up Amount than is determined by the Company’s independent
auditors or reflected in the Executive’s tax returns, the Executive shall be entitled to receive an
additional Gross-Up Amount calculated on the basis of the additional amount of Excise Tax
determined to be payable by such tax authority (including related penalties and interest) from the
Company within thirty (30) days after such determination. The Executive shall cooperate with the
Company as it may reasonably request to permit the Company (at its sole expense) to contest the
determination of such taxing authority in order to minimize the amount payable under this Section
8.6.



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               (e) If any tax authority finally determines the Excise Tax payable by the Executive to be less
than the amount taken into account hereunder in calculating the Gross-Up Amount, the Executive
shall repay to the Company, within thirty (30) days after the Executive’s receipt of a tax refund
resulting from that determination, to the extent of such refund, the portion of the Gross-Up Amount
attributable to such reduction (including the refunded portion of Gross-Up Amount attributable to
the Excise Tax and federal, state and local income and employment taxes imposed on the Gross-Up
Amount being repaid, less any additional income tax resulting from receipt of such refund).



               (f) Notwithstanding the foregoing, if on the date of the Executive’s termination, the
Executive is a “specified employee” within the meaning of Section 409A of the Code and any Original
Payments are made on account of the Executive’s termination of employment, any Gross-Up Amount that
would otherwise be due under this Section 8.6 and that would constitute deferred compensation
within the first six (6) months following the Executive’s termination of employment shall instead
be subject to the six (6) month delay to the extent required by Section 11.8 below.



               (g) The Executive’s receipt of a Gross-Up Amount for Excise Tax due in one taxable year shall
not affect the Executive’s eligibility for a Gross-Up Amount for Excise Tax due in another taxable
year. The Executive’s rights under this Section 8.6 are not subject to liquidation or exchange for
another benefit.



          8.7 Board/Committee Resignation. Upon termination of Executive’s employment for any
reason, Executive agrees to resign, as of the date of such termination and to the extent
applicable, from all positions he holds with the Company or its affiliates, including any position
on the Board (and any committees thereof).



     9. Proprietary Information, Inventions, and Non-Competition Agreement. As a condition
to his employment with the Company, Executive shall execute and comply with the Company’s Employee
Proprietary Information, Inventions, and Non-Competition Agreement, in the form attached hereto as
Exhibit E.



     10. Specific Performance. Executive acknowledges and agrees that the Company’s
remedies at law for a breach or threatened breach of any of the provisions of Section 9 or the
Employee Proprietary Information, Inventions, and Non-Competition Agreement would be inadequate and
the Company would suffer irreparable damages as a result of such breach or threatened breach. In
recognition of this fact, Executive agrees that, in the event of such a breach or threatened
breach, in addition to any remedies at law, the Company, without posting any bond, shall be
entitled to cease making any payments or providing any benefit otherwise required by this Agreement
and obtain equitable relief in the form of specific performance, temporary restraining order,
temporary or permanent injunction or any other equitable remedy which may then be available.



     11. Miscellaneous.



          11.1 Governing Law; Jurisdiction. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without regard to conflicts of laws
principles thereof. Any and all disputes between the parties which may arise pursuant to



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this Agreement shall be heard and determined before an appropriate state or federal court
serving Howard County, Maryland. The parties acknowledge that such courts have jurisdiction to
interpret and enforce the provisions of this Agreement, and the parties consent to, and waive any
and all objections that they may have as to, personal jurisdiction and/or venue in such courts.



          11.2 Expenses. In the event of any dispute between the Company and Executive as to
the interpretation, terms, validity or enforceability of (including any dispute about the amount of
any payment pursuant to) this Agreement, the prevailing party shall be entitled to recover from the
non-prevailing party any and all of such prevailing party’s costs and expenses incurred in
connection with any such dispute, including reasonable attorneys’ fees.



          11.3 Entire Agreement; Amendments. This Agreement, together with the Exhibits hereto,
contains the entire understanding of the parties with respect to the employment of Executive by the
Company. There are no restrictions, agreements, promises, warranties, covenants or undertakings
between the parties with respect to the subject matter herein other than those expressly set forth
herein. This Agreement may not be altered, modified, or amended except by written instrument signed
by the parties hereto.



          11.4 No Waiver. The failure of a party to insist upon strict adherence to any term of
this Agreement on any occasion shall not be considered a waiver of such party’s rights or deprive
such party of the right thereafter to insist upon strict adherence to that term or any other term
of this Agreement.



          11.5 Severability. In the event that any one or more of the provisions of this
Agreement shall be or become invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions of this Agreement shall not be affected
thereby.



          11.6 Assignment. This Agreement and all of Executive’s rights and duties hereunder,
shall not be assignable or delegable by Executive; except to the extent permitted by the Company in
writing. Any purported assignment or delegation by Executive in violation of the foregoing shall be
null and void ab initio and of no force and effect. This Agreement may be assigned by the Company
to a person or entity which is a successor in interest to substantially all of the business
operations of the Company. Upon such assignment, the rights and obligations of the Company
hereunder shall become the rights and obligations of such successor person or entity.



          11.7 Set Off. The Company’s obligation to pay Executive the amounts provided for in
Section 8 hereunder shall be subject to set-off, counterclaim or recoupment of amounts owed by
Executive to the Company or its affiliates.



          11.8 Compliance with IRC Section 409A. Notwithstanding any other provision of this
Agreement whatsoever, the Company shall have the right, after consulting with and securing the
approval of Executive, to provide for the application and effects of Section 409A of the Code
(relating to deferred compensation arrangements) and any related regulatory or administrative
guidance issued by the Internal Revenue Service such that the severance and other benefits provided
under this Agreement shall not trigger the additional tax, interest, and any related penalties
imposed by Section 409A(l)(B) of the Code. Further, if at the time of



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Executive’s termination of employment with the Company Executive is a “specified employee” as
defined in Section 409A of the Code and the deferral of the commencement of any payments or
benefits otherwise payable hereunder as a result of such termination of employment is necessary in
order to prevent any accelerated or additional tax under Section 409A of the Code, then the Company
will defer the commencement of the payment of any such payments or benefits hereunder (without any
reduction in such payments or benefits ultimately paid or provided to Executive) until the date
that is six months following Executive’s termination of employment with the Company (or the
earliest date as is permitted under Section 409A of the Code without the imposition of any
accelerated or additional tax). The Company shall consult with Executive in good faith regarding
the implementation of the provisions of this Section 11.8; provided that neither the Company nor
any of its employees or representatives shall have any liability to Executive with respect to
thereto.



          11.9 Successors; Binding Agreement. This Agreement shall inure to the benefit of and
be binding upon personal or legal representatives, executors, administrators, successors, assigns,
agents, affiliates, heirs, distributees, devisees and legatees. The Company shall require any
successor to all or substantially all of the assets or business of the Company to agree to assume
the Agreement.



          11.10 Notice. For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have been duly given when
delivered by hand or overnight courier or three days after it has been mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the respective addresses
set forth below in this Agreement, or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that notice of change of address shall be
effective only upon receipt.



          If to the Company:




          Sourcefire, Inc.

          9770 Patuxent Woods Drive

          Columbia, Maryland 21046

          Attention: General Counsel




          If to Executive:




               To the most recent address of Executive set forth in the personnel records of
the Company.



          11.11 Executive Representation. Executive hereby represents to the Company that the
execution and delivery of this Agreement by Executive and the performance by Executive of
Executive’s duties hereunder shall not constitute a breach of, or otherwise contravene, the terms
of any employment agreement or other agreement or policy to which Executive is a party or otherwise
bound.



          11.12 Prior Agreements. This Agreement supersedes all prior agreements and
understandings (including verbal agreements) between Executive and the Company and/or its



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affiliates regarding the terms and conditions of Executive’s employment with the Company
and/or its affiliates.



          11.13 Cooperation. Executive shall provide Executive’s reasonable cooperation in
connection with any action or proceeding (or any appeal from any action or proceeding) which
relates to events occurring during Executive’s employment hereunder; provided that the Company
reimburses Executive for any costs or expenses reasonably incurred in connection with such
cooperation. This provision shall survive any termination of this Agreement.



          11.14 Withholding Taxes. The Company may withhold from any amounts payable under this
Agreement such Federal, state and local taxes as may be required to be withheld pursuant to any
applicable law or regulation, including, without limitation, any payments pursuant to Section 6
above.



          11.15 Legal Fees. The Company shall reimburse Executive for all reasonable legal fees
and costs incurred in connection with the negotiation and initial execution of this Agreement, its
exhibits and attachments, and any other agreements contemplated hereby.



          11.16 Counterparts. This Agreement may be signed in counterparts, each of which shall
be an original, with the same effect as if the signatures thereto and hereto were upon the same
instrument.



          11.17 Dispute Resolution. Any dispute, difference, controversy or claim arising in
connection with or related or incidental to, or question occurring under, this Agreement or the
subject matter hereof shall be finally settled under the Commercial Arbitration Rules (the “Rules”)
of the American Arbitration Association (“AAA”), unless otherwise agreed, by an arbitral tribunal
composed of one (1) arbitrator. The arbitrator shall be a neutral arbitrator and subject to Rule
19 of the Rules. The arbitrator shall not have the authority to add to, detract from, or modify
any provision hereof. A decision by the arbitrator shall be final, conclusive and binding. The
arbitrator shall deliver a written and reasoned award with respect to the dispute to each of the
parties, who shall promptly act in accordance therewith. Any arbitration proceeding shall be held
in Howard County, Maryland. Any decision as to the scope and nature of Executive’s duties shall be
made by the Board, in its sole discretion, and shall not be subject to dispute resolution.



[Signatures appear on following page.]




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     In Witness Whereof, the parties hereto have duly executed this Agreement as of the
day and year first above written.



	 	 	 	 	 
	 	SOURCEFIRE, INC.

 	 
	 	By:  	/s/ Todd P. Headley          6/11/08
 	 
	 	 	Name:  	Todd P. Headley 	 
	 	 	Title:  	Chief Financial Officer and Treasurer 	 
	 
	 	 	 
	 	                                              /s/ John C. Burris          6/11/08
 	 
	 	John C. Burris 	 
	 	 	 
	 




 









 





EXHIBIT C




SOURCEFIRE, INC.

DEATH BENEFITS



As provided in Section 6.1 of the Agreement, promptly following the date hereof, the Company, after
consulting with and securing the approval of Executive, shall adopt an arrangement (the
“Arrangement”) providing for death insurance benefits in an amount equal to five (5) times
Executive’s annual compensation as reported on the Form W-2 issued to Executive from time to time
by the Company but excluding any amounts attributable to equity compensation awards (the
“Benefits”). The costs of providing the Benefits shall be borne by the Company; provided,
however, that Executive shall be responsible for any applicable taxes associated with the provision
of the Benefits.



In the event of Executive’s death during the Employment Term, the Arrangement shall provide for the
payment of the Benefits, less an amount equal to the premiums paid by the Company to maintain the
Benefits, to Executive’s estate. If Executive’s employment with the Company terminates prior to
Executive’s Retirement (as defined below) for any reason other than his death, no Benefits shall be
payable to Executive; for purposes of the Agreement, Executive’s Retirement shall mean his
termination of employment with the Company on or after attaining age sixty five (65). Following
Executive’s termination of employment for any reason, he shall be entitled to purchase any
insurance policy through which the Benefits are provided for its then-current cash surrender value.



The parties agree to cooperate to structure the Arrangement in a manner intended to minimize the
tax effects associated with the provision of the Benefits; provided, however, that the Company
makes no undertaking that the Arrangement will, in fact, result in any particular tax treatment for
the Benefits.