Sourcefire (FIRE)

 

In February 2008, we and Mr. Jackson elected not to renew the term of the Mr. Jackson’s employment agreement described below. As a result, Mr. Jackson’s employment as our Chief Executive Officer is scheduled to expire at the close of business on May 5, 2008. Mr. Jackson has agreed, however, to continue to serve in his role as Chief Executive Officer until a successor is named. We have entered into a Transition Agreement with Mr. Jackson that governs the terms of this transition.

 

Under the terms of the Transition Agreement, upon the date that Mr. Jackson’s employment with us ends (the “Separation Date”), whether as a result of the expiration of Mr. Jackson’s current employment agreement on May 5, 2008 or otherwise as a result of the termination of Mr. Jackson’s employment by either Mr. Jackson or us, for any reason or no reason, then, if Mr. Jackson executes a release of claims and a resignation letter by which he would resign as an officer and director, he will be entitled to receive an amount equal to six months of his current annual base salary of $310,000, or $155,000, subject to standard payroll deductions and withholdings and payable through no later than March 15, 2009. In addition, if Mr. Jackson timely elects and remains eligible for continued coverage under COBRA, we will pay that portion of the COBRA premiums equal to the premiums that we were paying on Mr. Jackson’s behalf prior to the Separation Date for as long as Mr. Jackson is receiving severance payments under the Transition Agreement (or until he commences employment with another employer, whichever period is shorter).

 

The Transition Agreement also provides that, following the expiration of Mr. Jackson’s current employment term on May 5, 2008, Mr. Jackson may elect to continue serving in his role as our Chief Executive Officer during a transition period on an interim, at-will basis. Under the Transition Agreement, this transition period will continue until September 5, 2008 or such earlier date as we may determine in the event a successor commences employment as our Chief Executive Officer prior to September 5, 2008.

 

If Mr. Jackson remains employed through the full transition period, then, if Mr. Jackson executes a release of claims and a resignation letter by which he would resign as an officer and director, he will be entitled to receive an additional amount equal to six months of his current base salary, or an additional $155,000, subject to standard payroll deductions and withholdings and payable through no later than March 15, 2009. In this case, the unvested portion of all stock options and restricted stock held by Mr. Jackson as of his Separation Date would also be accelerated in their entirety. In addition, if Mr. Jackson timely elects and remains eligible for continued coverage under COBRA, we will pay that portion of the COBRA premiums equal to the premiums that we were paying on Mr. Jackson’s behalf prior to the Separation Date until the earlier of April 30, 2009, the date the coverage ends or until he commences employment with another employer.

 

If we terminate Mr. Jackson’s interim employment during the transition period for any reason other than “cause” (as defined in the Transition Agreement), death or disability during the Transition Period, then, in cases other than death if Mr. Jackson executes a release of claims and a resignation letter by which he would resign as an officer and director, Mr. Jackson would also be entitled to receive the additional six months’ severance and the stock option and restricted stock acceleration described in the preceding paragraph.

 

For purposes of the Transition Agreement, “cause” for termination means that Mr. Jackson has engaged in any of the following: (i) a material breach of any covenant or condition under the Transition Agreement; (ii) any act constituting dishonesty, fraud, immoral or disreputable conduct which is harmful to Sourcefire or its reputation; (iii) any conduct which constitutes a felony under applicable law; (iv) any act of misconduct which is injurious to Sourcefire; (v) refusal to follow or implement a clear and reasonable directive of the Board of Directors or its designee; or (vi) breach of fiduciary duty.

 

In the event that the transition period ceases prior to September 5, 2008, for any reason other than Mr. Jackson’s voluntary termination or termination of his employment by us with cause (as defined in the Transition Agreement), then Mr. Jackson would also receive an additional amount equal to additional payments he would have received had he worked through September 5, 2008, payable under the same terms.