EXHIBIT 10.45
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EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made by and between XXXXXXX
XXXXXX ("Employee") and TRANSCRYPT INTERNATIONAL, INC., a Delaware corporation
("Company") this 10th day of September 1999.
The Company wishes to employ Employee as Senior Vice President and
Chief Financial Officer on the terms set forth in this Agreement also to be
named to the Board of Directors, and Employee desires to be employed by Company
in this capacity. Company and Employee desire to set forth in writing the terms
and conditions of their agreements and understandings.
THEREFORE, in consideration of the mutual promises set forth herein, it
is mutually agreed between the parties as follows:
SECTION 1. EMPLOYMENT TERM. The Company hereby employs the Employee and
the Employee hereby accepts employment as
Senior Vice President and Chief Financial Officer on the terms of this
Agreement, commencing as of the date hereof and continuing for a period of two
(2) years, until October 15, 2001, unless terminated earlier in accordance with
the provisions set forth herein. Following the initial term of employment, this
Agreement may be renewed for additional one (1) year terms. At the expiration of
each term (the initial two year term or each one year extension period),
employment shall be automatically renewed for an additional one (1) year term
unless written notice to the contrary is given by the Company or the Employee
sixty (60) days preceding the October 15th termination date. The provisions of
the Agreement shall apply during the initial term and any renewals of the term.
SECTION 2. DUTIES AND AUTHORITY. The Employee's duties shall be as
determined by the Chief Executive Officer. The duties of Chief Financial Officer
are generally set forth in the job description for such position, and such
duties may change from time to time.
SECTION 3. COMPENSATION.
A. BASE SALARY. Employee will receive a minimum base
salary of Two Hundred Thousand ($200,000.00) per year, paid
biweekly, as long as Employee is employed with the Company.
Such base salary will be subject to annual review, taking into
consideration employee's performance during the preceding year,
base salary adjustments for the executive staff and other
internal and external factors as described in the corporate
bylaws and public document filings.
B. BONUS. Employee will receive a signing bonus of
Seventy Five Thousand ($75,000.00), upon signing his employment
agreement and Seventy five Thousand $75,000.00 on the one-year
anniversary of signing his
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employment agreement. Following the first year of employment
and if the Company meets or exceeds the annual objectives set
forth for Employee by the Chief Executive Officer, then the
Employee will receive an annual bonus at the discretion of the
Board of Directors, in line with the Company's bonus program
for executives. The bonus, if awarded, will be paid annually in
February.
C. STOCK INCENTIVE OPTIONS. The Company grants to Employee
an option to purchase Two Hundred Thousand (200,000)
Shares of Common Stock at a strike price to be set by the
Compensation Committee and per the Company's Stock Option
Incentive Program. The terms of said Option Agreement is set
forth in the Non-Qualified Stock Option Agreement, attached as
Exhibit A. In the event of any inconsistencies or conflict
between the Agreement and Exhibit A, then the terms of this
Agreement shall control. The Company will take all steps
necessary to ensure that all shares are freely transferable,
subject to any volume restrictions imposed by federal law on
the transfer of Employee's shares. Sixty Six Thousand Six
Hundred Sixty Six (66,666) of the shares will vest upon
Employee's first day of employment. One Hundred Thirty Three
Thousand Three Hundred Thirty Four (133,334) of the shares will
vest through the vesting period set forth in the Non-Qualified
Stock Option Agreement.
D. ADDITIONAL BENEFITS. Employee also will receive such
additional employee benefits commensurate with his position,
including those that the Company may from time to time make
available to its executive officers, including 4 weeks paid
vacation, qualified profit-sharing plans, employee group
insurance and disability insurance.
E. WITHHOLDINGS. All payments made to Employee pursuant to this
Agreement shall be reduced by all required federal, state
and local withholdings for taxes and similar charges and
by all contributions or payments required to be made by
Employee in connection with any employee benefit plan
maintained by the Company.
SECTION 4. LOCATION. Initial offices will be at the Company's operating
facilities in Waseca, MN or Lincoln, NE, but will be made permanent in the
greater Washington, DC area by the first quarter of calendar year 2000.
SECTION 5. REIMBURSEMENT FOR EXPENSES. Employee is expected to incur
certain expenses on behalf of the Company for travel, promotion, telephone,
entertainment and similar items. The Company will reimburse the Employee for all
ordinary, necessary and reasonable amounts of such expenses, as determined by
the Board of Directors, incurred by Employee. Such amounts shall be payable
promptly upon receipt of reasonable written documentation signed by the Employee
itemizing such expenses.
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SECTION 6. INDEMNIFICATION. Employee shall be indemnified and held
harmless by the Company to the fullest extent authorized by the General
Corporation Law of the State of Delaware, as the same exists or may hereafter be
amended (however, in the case of any such amendment, only to the extent that
such amendment permits the Company to provide broader indemnification rights
than such law permitted the Company to provide prior to such amendment). The
Company's bylaws, attached as Exhibit C, contain an indemnification procedure
for directors and officers of the Company. Generally, if Employee is made or is
threatened to be made a party to any action, suit or proceeding relating to his
employment or service as a director of the Company, he shall have the right to
select individual counsel and he shall be indemnified and held harmless by the
Company against all expenses, liability and loss reasonably incurred in
connection with such action. Employee has the right to bring suit against the
Company if a claim made in accordance with the Company's bylaws is not paid in
full within sixty (60) days after a written claim has been received, except in
the case of a claim for an advancement of expenses, in which case the applicable
period is twenty (20) days. The Company shall also maintain directors' and
officers' liability insurance in an amount sufficient to cover any claims made
against Employee.
SECTION 7. TERMINATION / SEVERANCE
A. The Company shall have the right to terminate this
Agreement, upon thirty (30) days written notice, if the
following events occur:
1. The reasonable determination by the Chief Executive Officer
that the Employee has become disabled, and cannot complete
the essential functions of the position with reasonable
accommodation and is unable to continue his service to the
Company; or
2. The Employee's death; or
3. The reasonable determination by the Chief Executive Officer
that there is "good cause" for termination of this
Agreement. For purposes of the Agreement, "good cause"
means the Employee's willful neglect of his duties under
this Agreement and the job duties as assigned by the Chief
Executive Officer, theft or misappropriation of the
Company's assets by the Employee, fraud of the Employee
or gross insubordination. The Company shall provide
Employee written notice of and a reasonable opportunity
to cure anything that the Company believes constitutes
willful neglect of duties or gross insubordination.
B. Either party may terminate this Agreement upon (60) days' prior
written notice without good cause. In the event of a
termination by the Company without good cause the Company shall
continue to provide all benefits for one year after termination
and shall pay Employee a lump sum severance payment equal to
the greater of: 1) his annual base salary (at the time of
termination) or, 2) his base
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salary (at the time of
termination) for the remaining term of the then current
Agreement. If the employee terminates the Agreement within the
first twelve- (12) months, he must repay the $75,000 signing
bonus he receives and cancel any vested options. Upon
commencement of full time employment with a different company
as described in the attached non-compete agreement, or full
time self employment, all benefits shall cease. Employee's
COBRA termination date shall be the date all benefits cease.
All cash severance amounts described in sections 7A through 7B shall be
paid to Employee upon the termination of his employment.
C. Change in Control. For the purposes of this Agreement,
"change in control" means: 1) A change in the ownership of the
shares of the Company that results in a change in a majority of
the board of directors; or, 2) a sale, assignment or transfer of
all or substantially all of the assets of the Company. If there
is a change in control, then the Company may terminate this
Agreement upon thirty (30) days written notice. If there is a
change in control and a material diminishment in the employee's
position, duties, or responsibilities, that is not mutually
agreed among the parties, then Employee may terminate this
Agreement upon thirty (30) days written notice. Upon notice of
termination by either party pursuant to this section 7C, all of
Employee's stock options shall vest immediately. Upon termination
by either party pursuant to this section 7C, the Company shall
pay to Employee a lump sum severance payment equal to two years
of base salary (at the time of termination), and shall consider
providing a transaction bonus. In addition, the Company shall
continue to provide all benefits for one year after termination.
SECTION 8. AUTOMOBILE ALLOWANCE. The Company shall pay a car allowance
of $550.00 per month during the term of this Agreement.
SECTION 9. ENTIRE AGREEMENT. This Agreement contains the entire
understanding and agreement between the Company and the Employee and supersedes
any prior agreements and negotiations between them pertaining to the Employee's
terms and conditions of employment with the Company. There are no
representations, warranties, promises, covenants or understandings between the
Company and the Employee with respect to such employment other than those
expressly set forth in this Agreement. This Agreement takes precedence over
other conflicting agreements with the Employee.
SECTION 10. GOVERNING LAW. This Agreement shall be governed by the laws
of the State of Nebraska.
SECTION 11. NON-ASSIGNABILITY; SUCCESSORS. The obligations of the
Employee under this Agreement are not assignable
by him. This Agreement is personal in nature and may not be assigned by the
Company without the written consent of the Employee, except that the consent of
the Employee shall not be reasonably withheld in connection with the sale to any
person, partnership, corporation or other entity of substantially all the assets
of the company, provided that the assignee assumes all the liabilities of the
Company hereunder. Except as provided in the immediately preceding sentence,
this Agreement shall be binding upon and inure to the benefit of the parties
hereto and their successors.
SECTION 12. NOTICES. Any notice required to be given in writing by any
party to this Agreement may be personally delivered or mailed by registered or
certified mail to the last known address
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of the party to be notified. Any such notice personally delivered shall be
effective upon delivery and any such notice mailed shall be effective four (4)
business days after the date of mailing by registered or certified mail with
postage prepaid to the last known address of the party to be notified.
SECTION 13. SEVERABILITY. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions of
this Agreement, and this Agreement shall be construed in all respects as if such
invalid or unenforceable provision were omitted.
SECTION 14. HEADINGS. The Section and other headings contained in this
Agreement are for reference purposes only and shall not affect the
interpretation of this Agreement.
SECTION 15. CONSTRUCTION. Whenever required by the context, references
to the singular shall include the plural, and the masculine gender shall include
the feminine gender.
SECTION 16. RESTRICTIVE COVENANTS. Employee shall execute, concurrently
with this Agreement, a Confidentiality and Non Compete Agreement in the form
attached as Exhibit D.
SECTION 17. AMENDMENTS. No changes, modifications, waivers, discharges,
amendments or additions to this Employment Agreement shall be binding unless it
is in writing and signed by the Company and the Employee.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf and the Employee has signed his name hereto, effective as
of the date first written above.
TRANSCRYPT INTERNATIONAL, INC., a Delaware corporation
BY: /s/ XXXXXXX X. JALBER
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Its CEO
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/S/ XXXXXXX XXXXXX
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MASSOUND SAFAVI
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