V-ONE CORPORATION
00000 Xxxxxxx Xxxx.
Xxxxx 000
Xxxxxxxxxx, XX 00000
November 21, 1997
Employment Agreement
V-One Corporation, a Delaware corporation (the "Company"), and Xxxxx X. Xxxxxx
agree as follows:
1. POSITIONS AND RESPONSIBILITIES
1.1 You shall serve in the executive capacity as President and Chief
Executive Officer and perform the duties customarily associated with such
capacity from time to time and at such place or places as the Company shall
designate or as shall be appropriate and necessary in connection with such
employment.
1.2. You will, to the best of your ability, devote your full
professional time and best efforts to the performance of your duties hereunder
and the business and affairs of the Company.
1.3. You will duly, punctually and faithfully perform and observe any
and all rules and regulations which the Company may now or shall hereafter
reasonably establish governing the conduct of its business.
1.4. Subject to confirmation by the present Board of Directors, in
accordance with the Charter and Bylaws of the Company, you will be elected as a
director to fill a term expiring at the annual meeting of shareholders in the
year 2000; provided, however, that in the event you employment as CEO should
terminate for any reason, you hereby irrevocably agree to resign as a director
effective upon such termination.
2. TERM OF EMPLOYMENT
2.1. The term of your employment agreement shall commence on November
21st 1997 and terminate in two years, subject to automatic renewal for
successive one-year terms unless either party shall have notified the other in
writing not less than 30 days prior to the then current expiration date of this
Agreement of such party's determination not to renew this Agreement.
2.2. The Company shall have the right, on written notice to you,
(a) to terminate your employment immediately at any time for
cause, or
(b) to terminate your employment at any time after November
21st 1997, or to not renew the Agreement at any time, without cause provided the
Company shall be obligated in either case to pay to you as severance pay an
amount equal to one year's base salary (or, if greater than one year, base
salary for the remainder of the period from the date of termination to November
21st 1999) less applicable taxes and other required withholding and any amount
you may owe to the Company, payable in full immediately upon such termination.
2.3. For purposes of Section 2,2, you may be terminated for cause if,
in the reasonable determination of the Company's Board of Directors, you are
convicted of any felony or of any crime involving moral turpitude, or
participate in fraud against the Company, or wrongfully disclose any trade
secrets or other confidential information of the Company to any of its
competitors, or materially breach Section 5 of this Agreement or any provisions
of the Proprietary Information Agreement (as defined in Section 6 hereof)
between you and the Company.
3. COMPENSATION; STOCK OPTIONS; RELOCATION
3.1. The Company shall pay to you for the services to be rendered
hereunder a base salary at an annual rate of $200,000 subject to increase, in
accordance with the policies of the Company as determined by its Board of
Directors from time to time, payable in installments in accordance with Company
policy.
(a) The Compensation Committee of the Board of Directors will
review the base salary from time to time, no less frequently than annually, and
may in its sole discretion adjust the base salary upward but not downward, to
reflect performance, appropriate industry guideline data and other factors.
(b) If certain performance goals reasonably established from
time to time by the Board of Directors of the Company are met, you will be
entitled to a cash performance bonus of 40% of base salary, with respect to each
fiscal year. The amount of such bonus percentage may be increased but not
decreased by the Board of Directors of the Company. Performance in excess of
100% of plan objectives will be rewarded at an incrementally higher percentage.
Metrics will also be reasonably established to measure and compensate
appropriately for performance below the plan goals.
3.2. You shall also be entitled to all rights and benefits for which
you shall be eligible under deferred bonus, pension, group insurance,
profit-sharing or other Company benefits which may be in force from time to time
and provided for the Company's executives generally.
3.3. You will be reimbursed for reasonable expenses incurred on behalf
of the Company upon presentation of appropriate receipts.
3.4 Stock Options
You have been granted option to purchase 800,000 shares of V-One
Corporation Common Stock. The purchase price per share is $3.125 The option
vests over four years at a rate of one-fourth per year on each of November 21st
1998, 1999, 2000 and 2001. In the event that the Company should terminate you
without case, then the option for the year in which such termination occurs
shall fully vest and shall be exercisable within 90 days. All unvested options
will also immediately vest in full upon the declaration of an Change in Control
as set forth in Paragraph 2.06 of the V-One 1996 Incentive Stock Plan.
The options granted will be ISO's as defined by the Internal Revenue
Code to the maximum extent possible. Options above that limit will issued as
non-qualified stock options.
Unvested warrants/options will expire in the event your employment is
terminated voluntarily by you, or in the event your employment is terminated by
the Company for cause.
3.5 Relocation
The Company will pay for your direct relocation expenses, including the
reasonable and customary cost of moving your household goods and reasonable and
customary closing costs for the sale of your present home and the purchase of a
new home, such as real estate brokers' commissions, together with an additional
Amount of cash sufficient to pay any personal income taxes payable as a result
of the Company's payment of your direct relocation expenses. In the interim, the
Company will also provide you a furnished apartment, or suitable living
quarters, in the general vicinity of the Company's corporate headquarters. The
total amount of moving & living expenses associated with your relocation will be
limited to $60,000.
4. BOARD OF DIRECTORS
Subject to the provisions of the Company's charter and bylaws, one
directorship (in addition to your own) shall be reserved for election of a
person nominated by you and approved by a majority of the directors. In
addition, a committee of the Board, consisting of you, Xxxxx X. Xxxx, and one
other director agreed upon by you and Xxxxx X. Xxxx will be formed to make
recommendations for replacement of members of the Board of Directors during the
first twelve months of your tenure. Notwithstanding the foregoing, however, it
is understood and agreed that no action concerning the composition of the Board
of Directors shall be taken except in strict conformity with the charter and
bylaws of the Company. It is further understood that the charter presently
provides that a director may not be removed from office except for cause and
upon a vote of at least 67% of the outstanding shares of the capital stock of
the Company entitled to vote generally in the election of directors cast at a
meeting called for that purpose.
5. OTHER ACTIVITIES DURING EMPLOYMENT
5.1 Except as stated herein or with the prior written consent of the
Company's Board of Directors, you will not during the term of this Agreement
undertake or engage in any other employment, occupation or business enterprise
other than ones in which you are a passive investor with the exception of your
current position on the Board of Directors of Progressive Systems which all
parties acknowledge is not in competition with the Company.
5.2. Except as permitted by Section 5.3, you will not acquire, assume
or participate in, directly or indirectly, any position, investment or interest
adverse or antagonistic to the Company, its business or prospects, financial or
otherwise, or take any action toward or looking toward any of the foregoing.
5.3. During the term of your employment by the Company except on behalf
of the Company or its subsidiaries, you will not directly or indirectly, whether
as an officer, director, stockholder, partner, proprietor, associate,
representative, consultant, or otherwise become or be interested in any other
person, Corporation, firm, partnership or other entity whatsoever which
manufactures, markets, sells, distributes or provides consulting services
concerning products or services which compete with those of the Company or any
of its subsidiaries. However, nothing in this Section 5.3 shall preclude you
from holding less than ten percent of the outstanding capital stock of any
corporation required to file periodic reports with the Securities and Exchange
Commission under Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, the securities of which are listed on any Securities exchange, quoted
on the National Association of Securities Dealers Automated Quotation System or
traded in the over-the-counter market. During the term of your employment with
the Company you will also not directly or indirectly intentionally solicit,
endeavor to entice away from he Company, or any of its subsidiaries, or
otherwise interfere with the relationship of the Company, or any of its
subsidiaries with, any person who is employed by or otherwise engaged to perform
services for the Company, or any of its subsidiaries (including, but not limited
to, any independent sales representatives or organizations), or any person or
entity who is, or was within the then most recent 12-month period, a customer or
client of the Company, or any of its subsidiaries, whether for your own account
or for the account of any other person, corporation, firm, partnership or other
entity whatsoever.
6. FORMER EMPLOYMENT
6.1. You represent and warrant that your employment by the Company will
not conflict with and will not be constrained by any prior employment or
consulting agreement or relationship. You represent and warrant that you do not
possess confidential information arising out of prior employment which, in your
best judgment, could be utilized in connection with your employment by the
company in the absence of Section 6.2.
6.2. If, in spite of the second sentence of Section 6.1, you should
find that confidential information belonging to any former employer might be
usable in connection with the company's business, you will not intentionally
disclose to the Company or use on behalf of the Company any confidential
information belonging to any other former employers; but during your employment
by the company you will use in the performance of your duties all information
which is generally known and used by persons with training and experience
comparable to your own and all information which is common knowledge in the
industry or otherwise legally in the public domain.
7. PROPRIETARY INFORMATION AND INVENTIONS You agree to be bound by the
provisions of the Proprietary Information Agreement dated the date of this
Agreement between you and the Company (the 'Proprietary Information Agreement').
8. SURVIVAL Your duties under the Proprietary Information Agreement shall
survive termination of your employment with the Company to the extent provided
under such Proprietary Information Agreement.
9. ASSIGNMENT This Agreement and the rights and obligations of the parties
hereto bind and inure to the benefit of any successor or successors of the
Company by way reorganization, or merger and any assignee of all or
substantially all or its business and properties, but, except as to any such
successor or assignee of the Company, neither this Agreement nor any rights or
benefits hereunder may be assigned by the Company or by you.
10. INTERPRETATION In case any one or more of the provisions contained in the
agreement shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
the other provision of this agreement; and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein. If, moreover, any one or more of the provisions contained in this
Agreement shall for any reason be held to be excessively broad as to duration,
geographical scope, activity or subject, it shall be construed by limiting and
reducing it so as to be enforceable to the extent compatible with the applicable
law as it shall then appear.
11. NOTICES Any notice which the Company is required or may desire to give to
you shall be given by personal delivery or registered or certified mail, return
receipt requested, addressed to you at the address of record with the Company,
or at such other place as you may from time to time designate in writing. Any
notice which you are required or may desire to give to the Company hereunder
shall be given by personal delivery or by registered or certified mail return
receipt requested, addressed to the Company at its principal office, or at such
other office as the Company may from time to time designate in writing, to the
attention of the Chairman of the Compensation Committee. The date of personal
delivery or the date of mailing such notice shall be deemed to be the date of
delivery thereof.
12. WAIVER If either party should waive any breach of any provisions of this
Agreement, he or it shall not thereby be deemed to have waived any preceding or
succeeding breach of the same or any other provisions of this Agreement
13. COMPLETE AGREEMENT AMENDMENTS The foregoing, together with a proprietary
Information Agreement between you and the Company, is the entire agreement of
the parties with respect to the subject matter thereof and supersedes all prior
understandings. This Agreement may not be amended, supplemented canceled or
discharged except by written instrument executed by both parties hereto.
14. APPLICABLE LAW This agreement has been negotiated in, and shall be governed
by the laws of the State of Maryland, without giving effect to conflict of law
principles.
15. HEADING The heading of the sections hereof are inserted for convenience only
and deemed to constitute a part hereof nor to affect the meaning thereof.
V-One Corporation
By /s/ Xxxxxxx X. Xxxx
--------------------------
Chairman, Compensation Committee
Board of Directors
Accepted and agreed as of the
21st Day of November 1997
/s/ Xxxxx X. Xxxxxx
------------------------
Xxxxx X. Xxxxxx
