EXHIBIT 10(v)
EMPLOYMENT AGREEMENT between Rainbow Technologies, Inc., a Delaware corporation
(the "Corporation"), and Xxxxx Xxxxxx, (the "Executive"), dated this first day
of July 2003.
W I T N E S S E T H :
WHEREAS, the Corporation desires to engage Executive to perform
services for the Corporation, and the Executive desires to perform such
services, on the terms and conditions herein set forth.
NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Corporation and the
Executive as follows:
1. TERM. The Corporation agrees to employ Executive, and Executive
agrees to serve, on the terms and conditions stated herein for a period
commencing July 1,2003 and terminating December 31, 2003 or such shorter period
as provided for herein. The period during which Executive is employed hereunder
is hereinafter referred to as the "Term." The Term shall be automatically
renewed for successive one-year periods thereafter, unless terminated pursuant
to the provisions of this Employment Agreement (the "Agreement"). The period
during which Executive is employed hereunder is hereinafter referred to as the
"Term."
2. POSITION AND DUTIES. The Executive shall be employed in the business
of the Corporation. As of the date of this Agreement, Executive's duties include
those duties Executive is currently performing as President, eSecurity Group.
Notwithstanding the duties as described above, Executive agrees that his duties
may be, from time to time, revised or modified by the Chief Executive Officer
and/or President of the Corporation. The Executive agrees to devote his full
business time during normal business hours to the business and affairs of the
Corporation and to use his best efforts to perform faithfully and efficiently
the assigned responsibilities hereunder.
3. COMPENSATION AND BENEFITS.
3.1 BASE SALARY. The Corporation will pay Executive a base salary
("Base Salary") of $3433 per week, which will be paid in accordance with the
payroll practices of the Corporation.
3.2 ANNUAL BONUS. In addition to Base Salary, the Executive shall have
an opportunity to earn a year 2003 management bonus ("Year 2003 Management
Bonus"), in cash, as established by the Board. The Year 2003 Management Bonus
target is $102,000.
3.3 INCENTIVE, RETIREMENT AND SAVINGS PLAN. In addition to the Base
Salary and Annual Bonus, the Executive shall be entitled to participate in all
incentive, retirement and savings plans and programs ("Incentives"), if any, and
as established by the Corporation provided Executive meets the eligibility
requirements.
3.4 BENEFIT PLANS. The Executive and/or Executive's spouse and
dependents, as the case may be, shall be entitled to all benefits under all
medical, dental, vision, disability, executive life, group life, accidental
death and travel accident insurance plans and programs ("Benefit Plans"), if
any, and as established by the Corporation provided the Executive meets the
eligibility requirements.
3.5 FRINGE BENEFITS. The Executive and/or Executive's spouse and
dependents, as the case may be, shall be entitled to fringe benefits ("Fringe
Benefits"), if any, and as established by the Corporation provided the Executive
meets the eligibility requirements.
3.6 VACATION. The Executive shall be entitled to paid vacation in
accordance with the policies established from time to time by the Corporation.
4. EXPENSES. The Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred or expended by the Executive
in fulfillment of the duties hereunder. Executive shall provide documentation of
such expenses in accordance with the procedures established from time to time by
the Corporation.
5. TERMINATION.
5.1 DEATH. The Executive's employment shall terminate automatically
upon the Executive's death ("Death").
5.2 DISABILITY. The Corporation may terminate the Executive's
employment, after having established the Executive's "Disability" (as defined
below), by giving to the Executive notice of its intention to terminate
Executive's employment effective on the 90th day after such notice (the
"Disability Effective Date") if within such 90-day period the Executive fails to
return to full-time performance of his duties. For purposes of this Agreement,
"Disability" means a disability which, after the expiration of more than 26
weeks after its commencement, is determined to be total and permanent by a
physician selected by the Corporation or the insurers providing disability
insurance to the Company and consented to by the Executive or Executive's legal
representative (such consent not to be withheld unreasonably).
5.3 CAUSE. The Corporation may terminate the Executive's employment for
Cause ("Cause"). For purposes of this Agreement, "Cause" means (i) an act or
acts of dishonesty on the Executive's part which result in or are intended to
result in Executive's substantial personal enrichment at the expense of the
Corporation or (ii) repeated violations by the Executive of Executive's
obligations under Article 2 of this Agreement, which violations are demonstrably
willful and deliberate on the Executive's part and which were intended to result
in or have resulted in material injury to the Corporation.
5.4 WITHOUT CAUSE. The President or the Chief Operating Officer may
terminate the Executive's employment without cause ("Without Cause") upon 30-60
days notice.
5.5 RESIGNATION. At any time after the effective date of the Agreement,
the Executive may terminate his employment by electing resignation ("Voluntary
Resignation").
5.6 CHANGE OF CONTROL. In the event of a Change of Control, this
Agreement shall automatically terminate, and a separate Change of Control
Agreement shall become effective. For purposes of this Agreement, "Change of
Control" shall be deemed to have occurred if (i) a third person, including a
"group" as defined in Article 13(d)(3) of the Securities Exchange Act of 1934,
becomes the beneficial owner of shares of the Corporation having a 35% or more
of the total number of votes that may be cast for the election of directors as
the result of, or in connection with, any cash tender or exchange offer, merger
of other business combination (a "Transaction") and (ii) results in the persons
who were members of the Board before the Transaction ceasing to constitute a
majority of the Board or of the members of the board of directors of any
successor to the Corporation.
5.7 NOTICE OF TERMINATION. Notice of Termination shall communicate any
termination by the Corporation to the other party hereto given in accordance
with Article 11. For purposes of this Agreement, a "Notice of Termination" means
a written notice which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated and (iii) if the termination date is
other than the date of receipt of such notice, specifies the termination date of
this Agreement which date shall be in accordance with the specific termination
provision in this Agreement relied upon.
5.9 DATE OF TERMINATION. Notwithstanding any contrary provision
contained in this Agreement, (i) if the Executive is terminating this Agreement
in order to elect Voluntary Resignation, the Date of Termination shall not be
the date of receipt of such Notice of Termination but shall be a date specified
therein, which date shall be neither less than 30 days nor greater than 90 days
after giving such Notice of Termination; (ii) if the Executive's employment is
terminating due to Disability, the Date of Termination shall be the Disability
Effective Date; (iii) if the Executive's employment terminates due to the
Executive's death, the Date of Termination shall be the date of death; and (iv)
if the Executive's employment is terminated Without Cause, the Date of
Termination shall not be the date of receipt of such Notice of Termination but
shall be a date specified therein, which date shall be not less than 30 days
after giving such Notice of Termination.
6. OBLIGATIONS OF THE CORPORATION UPON TERMINATION.
6.1 DEATH. If the Executive's employment is terminated by reason of the
Executive's death, except as described in the next sentence, this Agreement
shall terminate without further obligations to the Executive's legal
representatives under this Agreement other than those obligations accrued
hereunder at the date of Executive's death. Anything in this Agreement to the
contrary notwithstanding, the Executive's spouse and dependents shall be
entitled to continue to receive the benefits under Benefit Plans and Fringe
Benefits through the Term of this agreement.
6.2 CAUSE. If the Executive's employment shall be terminated for Cause,
the Corporation shall pay the Executive his Base Salary and any other accrued
obligations through the Date of Termination. The Corporation shall have no
further obligations to the Executive under this Agreement.
6.3 VOLUNTARY RESIGNATION. The Corporation shall have no further
obligation to the Executive under this Agreement. If the Executive elects
Voluntary Resignation. The Corporation shall pay the Executive his Base Salary
and any other accrued obligations through the Date of Termination.
6.4 WITHOUT CAUSE AND DISABILITY. If the Corporation shall terminate
the Executive's employment either Without Cause or for Disability;
6.4.1 PAYMENTS. The Corporation shall pay to the Executive the
aggregate of the amounts determined pursuant to Articles 6.4.1 (i) and
6.4.1(ii):
(i) if not already paid, the Executive's Base Salary and
accrued obligations through the Date of Termination, to be paid within 30 days
after the Date of Termination;
(ii) 100% of the Executive's "Base Amount." Base Amount is the
highest three year average of the aggregate of the Executive's Annual Base
Salary and Annual Bonus paid or due to Executive in the last five fiscal years
prior to the year in which termination occurred. Said 100% of the Base Amount
shall be paid to the Executive in 12 equal monthly installments commencing
within 30 days after the Date of Termination.
6.4.2 STOCK OPTIONS. All stock options and stock appreciation
rights, if any, granted to the Executive, which are not exercisable at the Date
of Termination, shall become fully exercisable as of the Date of Termination.
6.4.3 BENEFITS. For 12 months subsequent to the Date of
Termination, the Corporation shall continue Benefit Plans and Fringe Benefits to
the Executive and/or Executive's spouse and dependents. For COBRA purposes, the
Date of Termination will be the qualifying event and the Corporation will pay 12
months of insurance premiums
6.5 CHANGE OF CONTROL. Notwithstanding anything in this Agreement to
the contrary, if the Executive's employment shall be terminated due to a Change
of Control, the Corporation shall have no further obligation to the Executive
under this Agreement.
7. FULL SETTLEMENT. The Corporation's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Corporation may have against the Executive or others.
8. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary
capacity for the benefit of the Corporation all secret or confidential
information, knowledge or data relating to the Corporation or any of its
affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during his employment by the Corporation or any of its
affiliated companies and which shall not be public knowledge. After termination
of the Executive's employment with the Corporation, he shall not, without the
prior written consent of the Corporation, communicate or divulge any such
information, knowledge or data to anyone other than the Corporation and those
designated by it.
9. COVENANT NOT TO COMPETE. In view of the fulfillment of Executive's
obligations hereunder and (i) the unique and valuable services it is expected
Executive will render to the Corporation, (ii) Executive's knowledge of the
clients, trade secrets, and other proprietary information relating to the
business of the Corporation and its customers and suppliers, and (iii) similar
knowledge Executive has regarding the Corporation, and in consideration of the
compensation to be received hereunder and as a condition to the performance by
Corporation of its obligations under this Agreement, Executive agrees that if
this Agreement is terminated due to Disability, a Change of Control or for
Without Cause that for the period of one (1) year after the Date of Termination
the Executive shall not directly or indirectly through any other person, firm or
Corporation:
(i) compete with or be engaged in the same business or "participate" in
any other business or organization which during such period competes with or is
engaged in a similar business as the Corporation in any geographical area in
which the Corporation conducts such business. The term "participate in" shall
mean: "directly or indirectly, for Executive's own benefit or for, with, or
through any other person, firm, or corporation, own, manage, operate, control,
loan money to, or participate in the ownership, management, operation, or
control of, or be connected as a director, officer, employee, partner,
consultant, agent, independent contractor, or otherwise with, or acquiesce in
the use of Executive's name. Executive will not directly or indirectly reveal
the name of, solicit or interfere with, or endeavor to entice away from the
Corporation any of its customers or employees. Executive will not directly or
indirectly employ any person who, at any time up to such cessation, was an
employee of the Corporation, within a period of one year after such person
leaves the employ of such Corporation. Executive agrees that the provisions of
this Article 9 are necessary and reasonable to protect the Corporation in the
conduct of its business. If any restriction contained in this Article 9 shall be
deemed to be invalid, illegal, or unenforceable by reason of the extent,
duration, or geographical scope thereof, or otherwise, then the court making
such determination shall have the right to reduce such extent, duration,
geographical scope, or other provisions hereof, and in its reduced form such
restriction shall then be enforceable in the manner contemplated hereby.
9.1 BREACH. If Executive commits a breach of any of the provisions of
this Article 9, Corporation shall have the right and remedy to have such
provisions specifically enforced by any court having equity jurisdiction. The
foregoing right and remedy shall be in addition to any other remedy (including
without limitation damages) to which Corporation may be entitled.
10. SUCCESSORS.
10.1 ASSIGNMENT BY EXECUTIVE. This Agreement is personal to the
Executive and shall not be assignable by the Executive otherwise than by will or
the laws of descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by the Executive's legal representatives.
10.2 ASSIGNMENT BY CORPORATION. Notwithstanding anything in this
Agreement, Executive agrees that the Corporation may assign this Agreement.
11. MISCELLANEOUS.
11.1 MODIFICATIONS. This Agreement sets forth the entire understanding
of the parties with respect to the subject matter hereof. Only a written
instrument duly executed by each party may modify this agreement.
11.2 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of California, without reference to
principles of conflict of laws. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
11.3 NOTICE. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
Xxxxx Xxxxxx
___________________________
___________________________
If to the Corporation:
Xxxxxx Xxxxxx, President
Rainbow Technologies, Inc.
00 Xxxxxxxxxx
Xxxxxx, XX 00000
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressees.
11.4 EQUITABLE RELIEF. Since a breach of the provisions of this
Agreement, particularly with respect to Article 9, could not adequately be
compensated by money damages, the Corporation shall be entitled, in addition to
any other right and remedy available to it, to an injunction restraining such
breach or a threatened breach, and in either case no bond or other security
shall be required in connection therewith, and Executive hereby consents to the
issuance of such injunction.
11.5 RELATIONSHIP OF PARTIES. Except for authority granted to Executive
by the President and/or Chief Operating Officer in order to enable Executive to
fulfill the obligations set forth in this Agreement, nothing contained in this
Agreement shall authorize, empower, or constitute Executive the agent of the
Corporation in any manner; authorize or empower Executive to assume or create
any obligation or responsibility whatsoever, express or implied, on behalf of or
in the name of the Corporation.
11.6 WAIVER. Any waiver by any party of a breach of any provision of
this Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or any breach of any
other provision of this Agreement. The failure of a party to insist upon strict
adherence to any term of this Agreement on one or more occasions shall not be a
waiver or deprive the party of the right hereunder to insist upon strict
adherence to that term or any other term of this Agreement. Any waiver must be
in writing and signed by the waiving party.
11.7 SEPARABILITY, If any provision of this Agreement is invalid,
illegal, or unenforceable, the balance of this Agreement shall remain in effect,
and if any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances,
11.8 HEADINGS, The headings in this Agreement are solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
11.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
11.10 WITHHOLDINGS. The Executive agrees that the Corporation shall
withhold from any and all payments required to be made to Executive pursuant to
this Agreement all federal, state, local and/or other taxes or contributions
which the Corporation determines are required to be withheld in accordance with
applicable statutes and/or regulations from time to time in effect provided,
however, that such withholding shall be consistent with the calculations made by
the Corporation.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and,
pursuant to the authorization from its Board of Directors, the Corporation has
caused these presents to be executed in its behalf all,as of the day and year
first above written.
/s/ Xxxxx Abbort
---------------------------- July 1, 2003
Xxxxx Abbort
ATTEST:
/s/ Xxxxxx Xxxxxx
----------------------------
Xxxxxx Xxxxxx
President
Rainbow Technologies, Inc.
