Document:

Exhibit 10.12

 

 

 

 

 

February 2, 2004

 

Mr. Russell P. Fradin

 

Dear Russ:

 

This letter will confirm the authorization and your acceptance of the specific terms and conditions of the “Key Executive” Separation Agreement that the Compensation Committee of The BISYS Group, Inc. Board of Directors has approved for you (the “Executive”).  

 

	
            1.
 	
            Termination for Just Cause
 

 

In the event that the Company terminates the Executive’s employment for Just Cause, the Executive shall not be entitled to any additional salary, annual incentive and/or benefit continuation payments beyond the Executive’s employment termination date.

 

For the purposes of the Separation Agreement, Termination for Just Cause shall be defined as follows:  (i) any act of willful dishonesty by the Executive; (ii) the Executive’s material failure to perform the duties ordinarily performed by a person holding your executive office; (iii) activities by the Executive which are materially harmful to the reputation of the Company and/or conviction of a felony.

 

	
            2.
 	
            Termination Due to Mental and/or Physical Disability
 

 

In the event that the Executive’s employment is terminated due to the Executive’s inability to perform his job responsibilities due to physical and/or mental disability, the Executive shall be entitled to receive the following benefits:

 

	
            (a)
 	
            ninety (90) days of full income replacement benefits under the BISYS Exempt Employee Short Term Disability policy; and
 

 

	
            (b)
 	
            in addition to any amount payable under the Company’s long-term disability plan, an additional lump sum payment equal to nine (9) months of base salary pay.
 

 

Payment of the lump sum described in 2(b) above will be made at the end of the Executive’s one year of medical leave of absence and/or the termination of the Executive’s actual BISYS employment status.

 

	
            3.
 	
            Termination Other Than for Cause or Change of Control
 

 

In the event that the Executive’s employment is terminated by the Company (other than for Just Cause or Disability as described above in sections 1. and 2., the Executive shall be entitled to receive a lump sum payment equal to one and one-half (1 1/2) times the sum of the (i) Executive’s present base salary and (ii) the greater of the Executive’s present fiscal year’s annual “At Plan” incentive target amount or prior fiscal year’s annual incentive settlement amount.

 

	
            4.
 	
            Termination After A Change of Control
 

 

 

1

 

 

 

	
            (a)
 	
            In the event the Executive’s employment terminates after a Change of Control of The BISYS Group, Inc., the Executive shall be entitled to receive a lump sum payment as outlined in paragraph 4(c) below.
 

 

	
            (b)
 	
            For purposes of this Separation Agreement, a Change in Control is defined as follows:
 

 

Change of Control shall mean either (i) approval by the stockholders of The BISYS Group, Inc. of a merger, consolidation, liquidation or dissolution of The BISYS Group, Inc., or the sale of all or substantially all of the assets of The BISYS Group, Inc. in which the stockholders of The BISYS Group, Inc. immediately before the consummation of the transaction do not own at least 51% of the voting shares of the surviving successor, acquiring, or assuming corporation in such transaction, or (ii) the acquisition by any person (including a group, within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934) of beneficial ownership of 51% or more of The BISYS Group, Inc.’s then outstanding voting securities.

 

	
            (c)
 	
            Effective only after a Change of Control of The BISYS Group, Inc., the Executive may unilaterally terminate his employment hereunder within twelve (12) months after the Change of Control date and he shall receive a lump sum payment equal to three (3) times the sum of (i) the Executive’s present base salary and (ii) the greater of the Executive’s present fiscal year’s “At Plan” annual incentive target amount or prior fiscal year’s annual incentive settlement amount.
 

 

	
            (d)
 	
            After the first twelve (12) month period, and for the following twenty-four (24) month period, the Executive may terminate his employment hereunder for “Good Reason” and receive the same lump sum payment described in paragraph (c) above
 

 

For purposes of this Agreement, “Good Reason” shall mean any of the following:

 

	
            (i)
 	
            The assignment of the Executive by the Company of reduced scope of duties as compared with the Executive’s then positions, duties, responsibilities, titles or offices of any reduction in his duties or responsibilities or any removal of the Executive from or any failure to re-elect the Executive to any of such positions except in connection with the termination of the Executive’s employment For Cause, Disability, or as a result of the Executives’ death or by the Executive other than for Good Reason;
 

 

	
            (ii)
 	
            A reduction by the Company of the Executive’s base salary as then in effect prior to the Change in Control;
 

 

	
            (iii)
 	
            A reduction by the Company in any of the Executive’s annual incentive plan, minimum, “At Plan” or maximum incentive amounts.
 

 

	
            (iv)
 	
            A relocation of the Executive’s office which requires the Executive to either relocate his residence or substantially change his commute to work requirements;
 

 

	
            (v)
 	
            Failure by the Company to continue in effect any substantial benefit or base salary and/or annual incentive plan in which the Executive is then participating or plans providing the Executive with substantially similar benefits or the taking of any action by the Company which would adversely affect the Executive’s participation in or substantially reduce the Executive’s benefits under any of such plans without offsetting compensation of approximately equal value.
 

 

 

 

	
            5.
 	
            Post Employment Termination Health Insurance Continuation Benefits
 

 

 

2

 

 

 

 

	
            (a)
 	
            In the event that the Executive’s employment is terminated by the Company (other than For Just Cause) including termination of active employment due to the expiration of one year medical leave due to physical and/or medical disability, or that the Executive terminates his employment for Good Reason, the Executive and his spouse, Judith Fradin, will be eligible to continue their participation in The BISYS Group, Inc. Health Insurance Plan available to other BISYS employees for the period ending the earlier of (i) five (5) years from the date of termination of employment, or (ii) the date the Executive is eligible to participate in an alternative employer-provided group health insurance plan. 
 

 

	
            (b)
 	
            In the case of the Executive’s death prior to his termination of employment, his spouse, Judith Fradin, may continue her participation in the BISYS health plan for up to five (5) years from the date of the Executive’s death.
 

 

	
            (c)
 	
            In the case of the Executive’s death after the date of termination of his employment with BISYS, his spouse, Judith Fradin, may elect to continue her participation in the BISYS health plan for the remainder of the five-year period following the Executive’s employment termination date.
 

 

	
            6.
 	
            Accelerated Vesting of Unvested Stock Options and Restricted Shares Granted Under All BISYS Group, Inc. Stock Option and Restricted Stock Purchase Plans
 

 

	
            (a)
 	
            All Stock Options and Restricted Shares granted to the Executive under all BISYS Group, Inc. Stock Option and Restricted Stock Purchase Plans prior to the Change of Control, will undergo full and complete accelerated vesting, effective with a Change of Control, as described in this Agreement.
 

 

	
            (b)
 	
            All Stock Options granted to the Executive under all BISYS Group, Inc. Stock Option and Restricted Stock Purchase Plans prior to his death and outstanding as of the date of death, will undergo full and complete accelerated vesting, effective the date of Executive’s death.
 

 

	
            7.
 	
            Accelerated Vesting of Unvested Employer Match Funds within BISYS’ Executive Deferred Compensation Program
 

 

All unvested employer match funds within BISYS’ Executive Deferred Compensation Program will undergo full and complete accelerated vesting, effective with a Change of Control, as described in this Agreement.

 

	
            8.
 	
            Financial Planning Services
 

 

	
            (a)
 	
            In the event that the Executive’s employment is terminated (other than For Just Cause), the Executive shall be entitled to receive financial planning services from AYCO, or such other provider made available to executives by the Company, for up to two years following date of termination.
 

 

	
            (b)
 	
            In the event of the Executive’s death while employed with BISYS, Executive’s spouse, Judith Fradin, shall be entitled to receive financial planning services from AYCO, or such other provider made available to executives by the Company, for up to two years following his death.
 

   

 

3

 

 

 

	
            9.
 	
            Legal Fees
 

 

All reasonable legal fees paid or incurred by the Executive pursuant to any dispute or questions of interpretation relating to this Agreement shall be paid or reimbursed by the Company if the Executive prevails in such dispute in whole or in part.

 

	
            10.
 	
            “Triggering” Amount Option
 

 

Should the value of aggregate payments and benefits to be made to the Executive which are deemed to be parachute payments as defined in Section 280G of the Internal Revenue Code of 1986 (the “Code”), as amended or any successor thereof, be deemed to include an “excess parachute payment” under Section 280G of the Code, the Executive will receive whichever of the following two (2) described alternatives provide the Executive with the greater total payments and benefit after the payment of any applicable excise tax, as defined by Section 499S of the Code.

 

	
            (a)
 	
            The entire aggregate payments and benefits as defined by this Agreement.  The Executive will be responsible for any excise tax, as defined by Section 499S of the Code, associated with any payments which are beyond the Triggering Amount.  (Triggering amount is equal to three (3) times the Executive’s “base amount” as determined in accordance with said Section 280G of the Code.)
 

 

	
            (b)
 	
            Reduced aggregate payments and benefits equal to one dollar ($1.00) less than the Triggering Amount described in 10(a) above.  The Executive will determine the allocation of any termination payment or benefit reduction.
 

 

 

Approved on behalf of the Compensation Committee of the Board of Directors

as of February 2, 2004

 

 

	
            By: /s/ Robert J. Casale                                    
 	
             

	
             
	
            Robert J. Casale
  
			

 

 

Acknowledged and Agreed as of February 2, 2004

 

 

	
            By: /s/ Russell Fradin                                       
 	
             

	
             
	
            Russell P. Fradin
 
			

 

 

Key Executive Separation Agreement - CEO

 

 

4EX-10.1

EXHIBIT 10.1

April 24, 2006

RSA Security Inc.

174 Middlesex Turnpike

Bedford, Massachusetts 01730

Attention: Chief Executive Officer

This letter agreement is with reference to the Agreement and Plan of Merger (the
“Agreement”), dated as of April 24, 2006, by and among PassMark Security, Inc.
(“PassMark”), S&C Acquisition Corp., and RSA Security, Inc. (“Indemnitee”).

The undersigned hereby agrees to indemnify and hold harmless Indemnitee and its affiliates if
Indemnitee was or is or becomes a party to or witness or other participant in, or is threatened to
be made a party to or witness or other participant in, any threatened, pending or completed action,
suit, proceeding or alternative dispute resolution mechanism, or any hearing, inquiry or
investigation that such Indemnitee believes might lead to the institution of any such action, suit,
proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative,
investigative or other (hereinafter a “Claim”) by reason of (or arising in part out of) any
event or occurrence related to PassMark’s failure to obtain the acknowledgment set forth as Exhibit
A hereto from the individuals whose names are listed on Exhibit B hereto solely with respect to the
stock split referenced therein, including, without limitation, any and all mutual losses, claims,
damages, expenses and liabilities, joint or several (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in settlement of, any action, suit,
proceeding or any claim asserted) under any federal or state statutory law or regulation, at common
law or otherwise against any and all expenses (including attorneys’ fees and all other costs,
expenses and obligations incurred in connection with investigating, defending a witness in or
participating in (including on appeal), or preparing to defend, be a witness in or participate in,
any such action, suit, proceeding, alternative dispute resolution mechanism, hearing, inquiry or
investigation), judgments, fines, penalties and amounts paid in settlement (if such settlement is
approved in advance by the undersigned, which approval shall not be unreasonably withheld) of such
Claim (collectively, hereinafter “Expenses”). Such payment of Expenses shall be made by
the undersigned as soon as practicable but in any event no later than thirty days after written
demand by the Indemnitee therefor is presented to the undersigned.

Notwithstanding the foregoing, (i) the aggregate liability of the undersigned hereunder should
not exceed the number of shares of non-consenting optionees multiplied by the pro rata portion of
the Merger Consideration related thereto, and (ii) this indemnity shall only be available in the
event that the aggregate Damages in Section 6.1 of the Merger Agreement exceeds the Escrow Amount
set forth therein or the Indemnitee is otherwise unable to obtain indemnification under Section 6.1
of the Merger Agreement. Any indemnification hereunder shall be from the first dollar of Expenses.

1

This letter agreement shall terminate on this date twelve (12) months from the date hereof.

Sincerely,

	 	 	 
	By:

	 	/s/ William Harris
	 

	 	 
	Name:

	 	William Harris

Accepted and Agreed:

INDEMNITEE

	 	 	 
	By:

	 	/s/ Robert P. Nault
	 

	 	 
	Name:

Title:

	 	Robert P. Nault

Senior Vice President and

General Counsel

[SIGNATURE PAGE TO INDEMNITY LETTER]

2

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