<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K/A
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the Fiscal Year ended December 31, 1999
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 Commission file number 0-6272
DATUM INC.
(Exact name of Registrant as specified in its charter)
Delaware 95-2512237
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
9975 Toledo Way, Irvine, California 92618
(Address of principal executive offices)
Registrant's telephone number, including area code: (949) 598-7500
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
------------------- -----------------------------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK
------------
(Title of Class)
---------------------------
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of the
Registrant, based upon the closing sales price of the Common Stock as of March
20, 2000, was approximately $145,209,957
The number of outstanding shares of the Registrant's Common Stock as of March
20, 2000 was 5,897,138.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Registrant's Proxy Statement for the Annual Meeting of Stockholders
to be held on June 8, 2000 (to be filed with the Commission within 120 days of
December 31, 1999): Part III, Items 10-13.
Page 1 of ___ Pages
Exhibit Index is Located on Sequential Numbered Page __ of this Report.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this Amendment to Annual Report on
Form 10-K to be signed on its behalf by the undersigned, thereunto duly
authorized, at Irvine, California this 25th day of April, 2000.
DATUM INC.
By /s/ Erik H. van der Kaay
--------------------------------
Erik H. van der Kaay
President and Director
2
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DATUM INC.
FORM 10-K - ITEM 14(a)(3)
EXECUTIVE COMPENSATION PLANS AND ARRANGEMENTS
<TABLE>
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10.4 1984 Stock Option Plan, as amended to date (incorporated by
reference to Registrant's Registration Statements on Form
S-8 Registration numbers 2-96564, 33-10035 and 33-41709).
10.10 Form of Indemnification Agreement dated May 27, 1987 as
entered into with certain directors and officers of
Registrant (incorporated by reference to same numbered
exhibit to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1991).
10.21 Consulting Agreement dated October 9, 1992 with Louis B.
Horwitz (incorporated by reference to same numbered exhibit
to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1992).
10.21.1 First Amendment to Consulting Agreement, dated as of March
1, 1996, between Louis B. Horwitz and the Registrant
(incorporated by reference to the same numbered exhibit to
Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996).
10.29 1994 Stock Incentive Plan (incorporated by reference to
Registrant's Registration Statement on Form S-8,
Registration No. 33-79772).
10.29.1 Amendment to 1994 Stock Incentive Plan, effective March 16,
1995 (incorporated by reference to the same numbered exhibit
to Registrant's Form 10-K for the year ended December 31,
1994).
10.29.2 Second Amendment to 1994 Stock Incentive Plan, effective
June 5, 1997 (incorporated by reference to Registrant's
Registration Statement on Form S-8, Registration No.
33-79772).
10.41 Employee Stock Purchase Plan (incorporated by reference to
registrant proxy statement for its Annual Meeting of
Stockholders on June 5, 1997, filed with the commission on
May 1, 1997).
10.42 Employment Agreement, dated March 27, 1998, between the
Company and Erik H. van der Kaay (incorporated by reference
to the same numbered exhibit to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1998).
10.43 Non-qualified stock option agreement, dated April 6, 1998,
between the Company and Erik H. van der Kaay (incorporated
by reference to the same numbered exhibit to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998).
10.44 Restricted stock grant agreement, dated April 6, 1998,
between the Company and Erik H. van der Kaay (incorporated
by reference to the same numbered exhibit to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998)
10.46 Employment Agreement, dated July 29, 1999, between the
Company and Thomas Mark Hastings.*
10.47 Severance Compensation Agreement, dated October 29, 1999, by
and between the Registrant and Erik van der Kaay.
10.48 Severance Compensation Agreement, dated October 29, 1999, by
and between the Registrant and David A. Young.
10.49 Severance Compensation Agreement, dated October 29, 1999, by
and between the Registrant and Paul E. Baia.
10.50 Severance Compensation Agreement, dated October 29, 1999, by
and between the Registrant and Michael J. Patrick.
10.51 Severance Compensation Agreement, dated October 29, 1999, by
and between the Registrant and John R. Rice.
10.52 Severance Compensation Agreement, dated October 29, 1999, by
and between the Registrant and Raymond L. Waguespack.
</TABLE>
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* Previously filed
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EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
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2.2 Agreement and Plan of Merger Agreement, dated July 29, 1999,
among the Registrant, Digital Delivery, Inc., certain
stockholders of Digital Delivery and Datum Acquisition Sub,
Inc. (incorporated by reference to the Registrant's Current
Report on Form 8-K, dated July 29, 1999, as amended)
3.1 Certificate of Incorporation of Datum Inc., a Delaware
corporation, as amended to date (incorporated by reference
to the same numbered exhibit on Form 10-Q for the quarter
ended June 30, 1996). --
3.2 Bylaws of Datum Inc. as amended to date (incorporated by
reference to the exhibit 1 on Form 8-K dated November 17,
1999). --
4.2 Rights Agreement, dated as of November 8, 1999, between the
Registrant and ChaseMellon Shareholder Services, L.L.C.
(incorporated by reference to Exhibit 1 to the Company's
Registration Statement on Form 8-A, Registration No.
000-06272)
10.4 1984 Stock Option Plan, as amended to date (incorporated by
reference to Registrant's Registration Statements on Form
S-8, Registration No.'s 2-96564, 33-10035 and 33-41709). --
10.10 Form of Indemnification Agreement dated May 27, 1987 as
entered into with certain directors and officers of
Registrant (incorporated by reference to same numbered
exhibit to Registrant's Annual Report on Form 10-K for the
year ended December 31, 1991). --
10.19 Savings and Retirement Plan, as amended to date
(incorporated by reference to same numbered exhibit to
Registrant's Annual Report on Form 10-K for the year ended
December 31, 1991). --
10.21 Consulting Agreement dated October 9, 1992 with Louis B.
Horwitz (incorporated by reference to same numbered exhibit
to Registrant's Annual Report on Form 10-K for the year
ended December 31, 1992). --
10.21.1 First Amendment to Consulting Agreement, dated as of March
1, 1996, between Louis B. Horwitz and the Registrant
(incorporated by reference to the same numbered exhibit to
Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1996). --
10.29 1994 Stock Incentive Plan (incorporated by reference to
Registrant's Registration Statement on Form S-8,
Registration No. 33-79772). --
10.29.1 Amendment to 1994 Stock Incentive Plan, effective March 17,
1995. (incorporated by reference to the same numbered
exhibit on Form 10-K for the year ended December 31, 1994). --
</TABLE>
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EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------ ----------- ------------
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10.29.2 Second Amendment to 1994 Stock Incentive Plan, effective
June 5, 1997 (incorporated by reference to Registrant's
Registration Statement on Form S-8, Registration No.
33-79772). --
10.30.5 Amended and Restated Credit Agreement dated as of September
27, 1996, by and between the Registrant and Wells Fargo
Bank, N.A. (incorporated by reference to the same numbered
exhibit to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended September 30, 1996). --
10.32 Lease Agreement dated September 15, 1986 by and between The
Irvine Company and Efratom Division, Ball Corporation, for
Efratom Time and Frequency Products, Inc.'s facility at 3
Parker, Irvine, California. (incorporated by reference to
the same numbered exhibit on Form 10-K for the year ended
December 31, 1994). --
10.32.1 First Amendment to Lease dated March 15, 1995 by and between
The Irvine Company and Efratom Division, Ball Corporation
for Lease Agreement dated September 15, 1986 (Exhibit 10.32)
(incorporated by reference to the same numbered exhibit on
Form 10-K for the year ended December 31, 1994). --
10.32.2 Amendment to Leases dated May 11, 1995 between the Irvine
Company and the Registrant (incorporated by reference to the
same numbered exhibit on Form 10-Q for the quarter ended
June 30, 1995). --
10.32.4 Second Amendment to Lease dated May 11, 1995 for 3 Parker
(incorporated by reference to the same numbered exhibit on
Form 10-Q for the quarter ended June 30, 1995). --
10.34 Industrial Lease dated May 11, 1995 between the Irvine
Company and the Registrant (incorporated by reference to the
same numbered exhibit to the Registrant's Form 10-Q for the
quarter ended June 30, 1995). --
10.35 Lease Agreement dated January 4, 1996, by and between Berg &
Berg Developers and the Registrant relating to Registrant's
Facility at 6781 Via Del Oro, San Jose, California
(incorporated by reference to the same numbered exhibit to
the Registrant's Form 10-K for the year ended December 31,
1995. --
10.36 Note and Warrant Purchase Agreement, dated as of September
27, 1996, by and between The Prudential Insurance Company of
America and the Registrant (incorporated by reference to the
same numbered exhibit to the Registrant's Quarterly Report
on Form 10-Q for the quarter ended September 30, 1996. --
</TABLE>
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EXHIBIT INDEX
<TABLE>
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SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ------ ----------- ------------
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10.37 Common Stock Purchase Warrant, dated September 27, 1996
(incorporated by reference to the same numbered exhibit to
the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996). --
10.38 Series A Senior Secured Notes, dated September 27, 1996, in
favor of The Prudential Insurance Company of America
(incorporated by reference to the same numbered exhibit to
the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996). --
10.39 Series B Senior Secured Notes, dated September 27, 1996, in
favor of The Prudential Insurance Company of America
(incorporated by reference to the same numbered exhibit to
the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1996). --
10.41 Employee Stock Purchase Plan (incorporated by reference to
registrant proxy statement for its Annual Meeting of
Stockholders on June 5, 1997, filed with the commission on
May 1, 1997). --
10.42 Employee Agreement, dated March 27, 1998, between the
Company and Erik H. van der Kaay (incorporated by reference
to the same numbered exhibit to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1998). --
10.43 Non-qualified stock option agreement, dated April 6, 1998,
between the Company and Erik H. van der Kaay (incorporated
by reference to the same numbered exhibit to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998. --
10.44 Restricted stock grant agreement, dated April 6, 1998,
between the Company and Erik H. van der Kaay (incorporated
by reference to the same numbered exhibit to the
Registrant's Quarterly Report on Form 10-Q for the quarter
ended June 30, 1998. --
10.45 Agreement with Lucent Technologies Inc., signed July 2,
1998. (incorporated by reference to the same numbered
exhibit to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 1998. Portions of this Exhibit
are omitted and were filed separately with the Secretary of
the Commission pursuant to the Company's application
requesting confidential treatment under Rule 406 of the
Securities Act of 1933.)
10.46 Employment Agreement, dated July 29, 1999, between the
Company and Thomas Mark Hastings.* --
10.47 Severance Compensation Agreement, dated October 29, 1999, by
and between the Registrant and Erik van der Kaay. --
10.48 Severance Compensation Agreement, dated October 29, 1999, by
and between the Registrant and David A. Young. --
10.49 Severance Compensation Agreement, dated October 29, 1999, by
and between the Registrant and Paul E. Baia. --
10.50 Severance Compensation Agreement, dated October 29, 1999, by
and between the Registrant and Michael J. Patrick. --
10.51 Severance Compensation Agreement, dated October 29, 1999, by
and between the Registrant and John R. Rice. --
10.52 Severance Compensation Agreement, dated October 29, 1999, by
and between the Registrant and Raymond L. Waguespack. --
21 List of Subsidiaries* --
23.1 Consent of Independent Accountants* --
23.2 Consent of Independent Accountants* --
27.4 Financial Data Schedule Year Ended 1999* --
</TABLE>
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* Previously filed
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EXHIBIT 10.47
SEVERANCE COMPENSATION AGREEMENT
DATED AS OF OCTOBER 29, 1999
BETWEEN
DATUM INC., A DELAWARE CORPORATION, (THE "COMPANY")
AND
ERIK H. VAN DER KAAY (THE "EXECUTIVE")
The Company's Board of Directors (the "Board") has determined that it
is appropriate to reinforce and encourage the continued attention and dedication
of members of the Company's management, including the Executive, to their
assigned duties without distraction in potentially disturbing circumstances
arising from the possibility of a change in control of the Company.
This Agreement sets forth the severance compensation which the Company
agrees it will pay to the Executive if the Executive's employment with the
Company terminates under one of the circumstances described herein following a
"Change in Control" of the Company (as defined in Section 2).
1. Term. The term ("Term") of this Agreement shall commence on the date
hereof and, subject to earlier termination pursuant to Section 3(b), 3(c) or
3(d) hereof, shall end three (3) years following the date on which notice of
non-renewal or termination of this Agreement is given by either the Company or
Executive to the other. Thus, this Agreement shall be renewable automatically on
a daily basis so that the outstanding Term is always three (3) years following
any effective notice of non-renewal or of termination given by the Company or
Executive.
2. Change in Control. No compensation shall be payable under this
Agreement unless and until (a) there has been a Change in Control of the Company
while the Executive is still an employee of the Company and (b) the Executive's
employment by the Company terminates in the circumstances specified in Section
3(a). For purposes of this Agreement, a "Change in Control" of the Company shall
be deemed to have occurred if (i) there shall be consummated (x) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company's
Common Stock would be converted into cash, securities or other property, other
than a consolidation or merger of the Company in which the holders of the
Company's Common Stock immediately prior to the consolidation or merger have
substantially the same proportionate ownership of at least 65% of common stock
of the surviving corporation immediately after the consolidation or merger, or
(y) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all, or substantially all, of the assets of the
Company other than to a corporation in which the holders of the Company's Common
Stock immediately prior to such transaction have substantially the same
proportionate ownership of at least 65% of the common stock of such corporation,
or (ii) the stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company, or (iii) any person (as such term is
used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), shall become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of more than 35% of the Company's
outstanding shares of Common Stock, or (iv) during any period of two consecutive
years during the term of this Agreement, individuals who at the beginning of the
two year period constituted the entire Board do not for any reason constitute a
majority thereof unless the election, or the nomination for election by the
Company's stockholders,
<PAGE> 2
of each new director was approved by a vote of at least five-eighths of the
directors then still in office who were directors at the beginning of the
period.
3. Termination Following Change in Control.
(a) Termination. If a Change in Control of the Company shall have
occurred while the Executive is still an employee of the Company, the Executive
shall be entitled to the compensation provided in Section 4 upon the subsequent
termination of the Executive's employment with the Company within twenty four
(24) months of such Change in Control, whether requested by the Executive or by
the Company, unless such termination is as a result of (i) the Executive's
death; (ii) the Executive's Disability (as defined in Section (3)(b) below);
(iii) the Executive's Retirement (as defined in Section 3(c) below); (iv) the
Executive's termination by the Company for Cause (as defined in Section 3(d)
below); or (v) the Executive's decision to terminate employment other than for
Good Reason (as defined in Section 3(e) below).
(b) Death or Disability. If, as a result of the Executive's
incapacity due to physical or mental illness, the Executive is absent from his
duties with the Company on a full-time basis for six months, the Company may
elect to terminate the Executive for "Disability" by written notice to Executive
and without liability to Executive pursuant to this Agreement; provided,
however, that any such termination shall be effective only at the end of thirty
(30) days following the delivery of such notice and only if Executive fails to
return to the full-time performance of duties by the end of such 30-day notice
period. In addition, this Agreement shall terminate immediately in the event of
the death of the Executive occurring at any time during the Term hereof, and in
such event the Company shall have no liability by reason of such termination.
(c) Retirement. The Executive shall be deemed terminated
automatically, without liability to Executive pursuant to this Agreement, upon
Retirement (as hereinafter defined) of Executive without liability to the
Company pursuant to this Agreement. "Retirement" as used in this Agreement shall
be deemed to occur upon the Executive's having reached such age as shall have
been fixed in any arrangement mutually established by the Company and the
Executive.
(d) Cause. The Company may terminate the Executive, without
liability to the Executive pursuant to this Agreement, if the Executive's
employment with the Company is terminated for Cause. For purposes solely of
determining whether the Company may terminate the Executive pursuant to this
Section 3(d) without liability to the Executive, the Executive shall be deemed
to have been terminated for "Cause" only if Executive had engaged in fraud,
misappropriation or embezzlement, or any conviction or admission of a felony or
other offense involving dishonest or moral turpitude. Notwithstanding the
foregoing, the Executive shall not be deemed, for purposes of this Agreement, to
have been terminated for Cause unless and until there shall have been delivered
to the Executive a copy of a resolution duly adopted by the affirmative vote of
not less than five-eighths of the entire membership of the Company's Board at a
meeting of the Board called and held for that purpose (after reasonable notice
to the Executive and an opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board), finding that in the good
faith opinion of the Board the Executive was guilty of conduct set forth in the
second sentence of this Section 3(d) and specifying the particulars thereof in
detail.
(e) Good Reason. The Executive may terminate the Executive's
employment for Good Reason at any time after a Change in Control during the
Term. For purposes of this Agreement, "Good Reason" shall mean any of the
following:
2
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(i) The Company has materially changed the Executive's
position, duties, responsibilities, status, or offices as in effect immediately
prior to a Change in Control of the Company, or has removed the Executive from
or failed to reelect the Executive to any of such positions;
(ii) A reduction by the Company in the Executive's base salary
as in effect on the date hereof or as the same may be increased from time to
time during the Term.
(iii) Any failure by the Company to continue in effect any
benefit plan or arrangement (including, without limitation, the Company's life
insurance, accident, disability and health insurance plans, 401(k) and bonus
plans, stock options, and all other similar plans which are from time to time
made generally available to senior executives/officers of the Company) and in
which the Executive is participating at the time of a Change in Control of the
Company, unless there are substituted therefore plans or arrangements providing
the Executive with essentially equivalent and no less favorable benefits
(hereinafter referred to as "Benefit Plans"), or the taking of any action by the
Company which would adversely affect the Executive's participation in or
materially reduce the Executive's benefits under any such Benefit Plan or
deprive the Executive of any material fringe benefit enjoyed by the Executive at
the time of a Change in Control of the Company;
(iv) Any failure by the Company to continue in effect any
incentive plan or arrangement (including, without limitation, the Company's
plans enumerated in subparagraph (iii) above and similar incentive compensation
benefits) in which the Executive is participating at the time of a Change in
Control of the Company, unless there are substituted therefore plans or
arrangements providing the Executive with essentially equivalent and no less
favorable benefits (hereinafter referred to as "Incentive Plans"), or the taking
of any action by the Company which would adversely affect the Executive's
participation in any such Incentive Plan or reduce the Executive's potential
benefits under any such Incentive Plan, expressed as a percentage of his base
salary, by more than 10 percentage points in any fiscal year as compared to the
immediately preceding fiscal year;
(v) Any failure by the Company to continue in effect any plan
or arrangement to receive securities of the Company (including, without
limitation, the Company's stock option and purchase plans and any other plan or
arrangement to receive and exercise stock options, stock appreciation rights,
restricted stock or grants thereof) in which the Executive is participating at
the time of a Change in Control of the Company, unless there are substituted
therefor plans or arrangements providing the Executive with essentially
equivalent and no less favorable (hereinafter referred to as "Securities
Plans"), or the taking of any action by the Company which would adversely affect
the Executive's participation in or materially reduce the Executive's benefits
under any such Securities Plan;
(vi) A relocation of the Company's principal executive offices
to a location outside of Orange County, California, or the Executive's
relocation to any place other than the location at which the Executive performed
the Executive's duties prior to a Change in Control of the Company, except for
required travel by the Executive on the Company's business to an extent
substantially consistent with the Executive's business travel obligations during
the 12 months immediately preceding a Change of Control of the Company;
3
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(vii) Any failure by the Company to provide the Executive with
the number of paid vacation days to which the Executive is entitled at the time
of a Change of Control of the Company;
(viii) Any material breach by the Company of any provision of
this Agreement;
(ix) Any failure by the Company to obtain the assumption of
this Agreement by any successor or assignee of the Company; or
(x) Any purported termination of the Executive's employment
that is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 3(f), and for purposes of this Agreement, no such
purported termination shall be effective.
(f) Notice of Termination. Any termination of the Executive by
the Company for Disability pursuant to Section 3(b) or for Cause pursuant to
Section 3(d) shall be communicated by a Notice of Termination. For purposes of
this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate those specific termination provisions in this Agreement relied
upon and which set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provisions so indicated. For purposes of this Agreement, no such purported
termination by the Company shall be effective without such Notice of
Termination.
(g) Date of Termination. "Date of Termination" shall mean (i) if
the Executive is terminated by the Company for Disability, 30 days after Notice
of Termination is given to the Executive (provided that the Executive shall not
have returned to the performance of the Executive's duties on a full-time basis
during such 30-day period) or (ii) if the Executive is terminated by the Company
for any other reason, the date on which a Notice of Termination is given;
provided that if within 30 days after any Notice of Termination is given to the
Executive by the Company the Executive notifies the Company that a dispute
exists concerning the termination, the Date of Termination shall be the date the
dispute is finally determined, whether by mutual agreement by the parties or
upon final judgment, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been perfected).
4. Severance Compensation upon Termination of Employment. Subject to
Section 4(e) below, if, within twenty-four (24) months following a Change in
Control, the Company shall terminate the Executive's employment other than
pursuant to Section 3(b), 3(c) or 3(d), or if the Executive terminates his
employment for Good Reason pursuant to Section 3(e), then:
(a) Severance Payment. The Company shall pay to the Executive as
severance pay a lump sum, in cash, in full on the fifth day following the Date
of Termination an amount equal to (i) the Executive's highest annual base salary
in effect during the 12-month period immediately preceding the Date of
Termination, and (ii) a lump sum payment of the Executive's incentive
compensation bonus that would otherwise be payable to Executive under the
Company's Bonus Plan then in effect for the year in which the Date of
Termination occurred assuming one hundred percent (100%) satisfaction of all
performance goals established under such Bonus Plan for the Executive,
multiplied 2.99. The foregoing payment shall be in addition to any payments or
other compensation that would otherwise be payable to executives under any other
then existing Severance Plan of the
4
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Company. All payments hereunder shall be made net of withholdings required by
applicable federal, state or local laws.
(b) Stock Options. All stock options not currently exercisable
held by the Executive will accelerate and become exercisable as of the Date of
Termination.
(c) Restricted Stock. All restrictions on any restricted stock,
including without limitation any vesting requirements on any unvested stock,
held by the Executive as of the Date of Termination shall be removed.
(d) Continuation of Benefits. The Company shall continue for a
period of one year from the Date of Termination to provide the following
benefits to the Executive on the same terms as provided to the Executive on the
Date of Termination:
(i) Participation in the Company's medical, dental and vision
plans;
(ii) Long-term disability insurance;
(iii) Life Insurance.
Notwithstanding the foregoing, any benefits payable under this subsection 4(d)
shall terminate at such time as the Executive becomes eligible for similar
benefits from any subsequent employer; provided, however, that at the end of the
period of coverage hereinabove provided for, the Executive shall have the option
to have assigned to the Executive at no cost and with no apportionment of
prepaid premiums, any assignable insurance owned by the Company and relating
specifically to the Executive.
(e) Limitation. To the extent that any or all of the payments and
benefits provided for in this Agreement constitute "parachute payments" within
the meaning of Section 280G of the Internal Revenue Code (the "Code") and, but
for this Section 4(e), would be subject to the excise tax imposed by Section
4999 of the Code, then the aggregate amount of such payments and benefits shall
be reduced such that the present value thereof (as determined under the Code and
applicable regulations) is equal to 2.99 times the Executive's "base amount" (as
defined in the Code).
The determination of any reduction or increase of any payment or benefits under
this Section 4 pursuant to the foregoing provision shall be made by a nationally
recognized public accounting firm chosen by the Company in good faith, and such
determination shall be conclusive and binding on the Company and the Executive.
5. No Obligation to Mitigate Damages: No Effect on Other Contractual
Rights.
(a) No Obligation to Mitigate. The Executive shall not be
required to mitigate damages or the amount of any payment provided for under
this Agreement by seeking other employment or otherwise, nor, except as set
forth in Section 4(d), shall the amount of any payment provided for under this
Agreement be reduced by any compensation earned by the Executive as the result
of employment by another employer after the Date of Termination, or otherwise.
(b) No Effect on Other Contractual Rights. The provisions of this
Agreement, and any payment provided for hereunder, shall not reduce any amounts
otherwise payable, or in any way diminish the Executive's existing rights, or
rights which would accrue solely as a result of the
5
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passage of time, under any Benefit Plan, Incentive Plan or Securities Plan,
employment agreement or other contract, plan or arrangement.
6. Successors and Assigns.
(a) The Company. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor or assignee to its
business and/or assets as aforesaid which assumes the obligations of the Company
under this Agreement or which otherwise becomes bound by all of the terms and
provisions of this Agreement by operation of law. If at any time during the term
of this Agreement the Executive is employed by any corporation a majority of the
voting securities of which is then owned by the Company, such indirect
employment of the Executive by the Company shall not excuse the Company from
performing its obligations under this Agreement as if the Executive were
directly employed by the Company, and the Company agrees that it shall pay or
shall cause such employer to pay any amounts owed to the Executive pursuant to
Section 4 hereof, notwithstanding any such indirect employment relationship.
(b) The Executive. This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts are still payable to him
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's devisee, legatee,
or other designee or, if there be no such designee, to the Executive's estate.
7. Notice. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered, one business day after being sent
for overnight delivery by a nationally recognized overnight courier or three
business days after being mailed by United States registered mail,
return-receipt requested, postage-prepaid, addressed as follows:
If to the Company:
President and Chief Executive Officer
Datum Inc.
9975 Toledo Way
Irvine, California 92618
If to the Executive:
500 Dahlia
Corona del Mar, CA 92625
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
8. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the
6
<PAGE> 7
same or at any prior or subsequent time. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.
This Agreement shall be governed by and construed in accordance with the laws of
the State of California.
9. Validity. The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
11. Arbitration, Legal Fees and Expenses. In the event of any
controversy, claim or dispute between the parties hereto arising out of or
relating to this Agreement, the matter shall be determined by arbitration, which
shall take place in Orange County, California, under the rules of the American
Arbitration Association; and a judgment upon such award may be entered in any
court having jurisdiction thereof. Any decision or award of such arbitrator
shall be final and binding upon the parties and shall not be appealable. The
parties hereby consent to the jurisdiction of such arbitrator and of any court
having jurisdiction to enter judgment upon and enforce any action taken by such
arbitrator. The Company shall pay all legal fees and expenses that the Executive
may incur as a result of the Company's contesting the validity, enforceability
or the executive's interpretation of, or determinations under, this Agreement.
12. Confidentiality. The Executive shall retain in confidence any and
all confidential information known to the Executive concerning the Company and
its business so long as such information is not otherwise publicly disclosed.
13. Entire Agreement. This Agreement contains all of the terms agreed
upon between the Executive and the Company with respect to the subject matter
hereof and replaces and supersedes all prior severance agreements between the
Executive and the Company. The Executive and the Company agree that no term,
provision or condition of this Agreement shall be held to be altered, amended,
changed or waived in any respect except as evidenced by written agreement of the
Executive and the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
"COMPANY" "EXECUTIVE"
DATUM, INC.
By: /s/ DAN L. MCGURK By: /s/ ERIK H. VAN DER KAAY
-------------------------------- --------------------------------
Name: Dan L. McGurk Name: Erik H. van der Kaay
Title: Chairman of the Compensation Title: President and Chief
Committee Executive Officer
7
<PAGE> 1
EXHIBIT 10.48
SEVERANCE COMPENSATION AGREEMENT
DATED AS OF OCTOBER 29, 1999
BETWEEN
DATUM INC., A DELAWARE CORPORATION, (THE "COMPANY")
AND
DAVID A. YOUNG (THE "EXECUTIVE")
The Company's Board of Directors (the "Board") has determined that it
is appropriate to reinforce and encourage the continued attention and dedication
of members of the Company's management, including the Executive, to their
assigned duties without distraction in potentially disturbing circumstances
arising from the possibility of a change in control of the Company.
This Agreement sets forth the severance compensation which the Company
agrees it will pay to the Executive if the Executive's employment with the
Company terminates under one of the circumstances described herein following a
"Change in Control" of the Company (as defined in Section 2).
1. Term. The term ("Term") of this Agreement shall commence on the
date hereof and, subject to earlier termination pursuant to Section 3(b), 3(c)
or 3(d) hereof, shall end three (3) years following the date on which notice of
non-renewal or termination of this Agreement is given by either the Company or
Executive to the other. Thus, this Agreement shall be renewable automatically on
a daily basis so that the outstanding Term is always three (3) years following
any effective notice of non-renewal or of termination given by the Company or
Executive.
2. Change in Control. No compensation shall be payable under this
Agreement unless and until (a) there has been a Change in Control of the Company
while the Executive is still an employee of the Company and (b) the Executive's
employment by the Company terminates in the circumstances specified in Section
3(a). For purposes of this Agreement, a "Change in Control" of the Company shall
be deemed to have occurred if (i) there shall be consummated (x) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company's
Common Stock would be converted into cash, securities or other property, other
than a consolidation or merger of the Company in which the holders of the
Company's Common Stock immediately prior to the consolidation or merger have
substantially the same proportionate ownership of at least 65% of common stock
of the surviving corporation immediately after the consolidation or merger, or
(y) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all, or substantially all, of the assets of the
Company other than to a corporation in which the holders of the Company's Common
Stock immediately prior to such transaction have substantially the same
proportionate ownership of at least 65% of the common stock of such corporation,
or (ii) the stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company, or (iii) any person (as such term is
used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), shall become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of more than 35% of the Company's
outstanding shares of Common Stock, or (iv) during any period of two consecutive
years during the term of this Agreement, individuals who at the beginning of the
two year period constituted the entire Board do not for any reason constitute a
majority thereof unless the election, or the nomination for election by the
Company's stockholders,
<PAGE> 2
of each new director was approved by a vote of at least five-eighths of the
directors then still in office who were directors at the beginning of the
period.
3. Termination Following Change in Control.
(a) Termination. If a Change in Control of the Company shall have
occurred while the Executive is still an employee of the Company, the Executive
shall be entitled to the compensation provided in Section 4 upon the subsequent
termination of the Executive's employment with the Company within twenty four
(24) months of such Change in Control, whether requested by the Executive or by
the Company, unless such termination is as a result of (i) the Executive's
death; (ii) the Executive's Disability (as defined in Section (3)(b) below);
(iii) the Executive's Retirement (as defined in Section 3(c) below); (iv) the
Executive's termination by the Company for Cause (as defined in Section 3(d)
below); or (v) the Executive's decision to terminate employment other than for
Good Reason (as defined in Section 3(e) below).
(b) Death or Disability. If, as a result of the Executive's
incapacity due to physical or mental illness, the Executive is absent from his
duties with the Company on a full-time basis for six months, the Company may
elect to terminate the Executive for "Disability" by written notice to Executive
and without liability to Executive pursuant to this Agreement; provided,
however, that any such termination shall be effective only at the end of thirty
(30) days following the delivery of such notice and only if Executive fails to
return to the full-time performance of duties by the end of such 30-day notice
period. In addition, this Agreement shall terminate immediately in the event of
the death of the Executive occurring at any time during the Term hereof, and in
such event the Company shall have no liability by reason of such termination.
(c) Retirement. The Executive shall be deemed terminated
automatically, without liability to Executive pursuant to this Agreement, upon
Retirement (as hereinafter defined) of Executive without liability to the
Company pursuant to this Agreement. "Retirement" as used in this Agreement shall
be deemed to occur upon the Executive's having reached such age as shall have
been fixed in any arrangement mutually established by the Company and the
Executive.
(d) Cause. The Company may terminate the Executive, without
liability to the Executive pursuant to this Agreement, if the Executive's
employment with the Company is terminated for Cause. For purposes solely of
determining whether the Company may terminate the Executive pursuant to this
Section 3(d) without liability to the Executive, the Executive shall be deemed
to have been terminated for "Cause" only if Executive had engaged in fraud,
misappropriation or embezzlement, or any conviction or admission of a felony or
other offense involving dishonest or moral turpitude. Notwithstanding the
foregoing, the Executive shall not be deemed, for purposes of this Agreement, to
have been terminated for Cause unless and until there shall have been delivered
to the Executive a copy of a resolution duly adopted by the affirmative vote of
not less than five-eighths of the entire membership of the Company's Board at a
meeting of the Board called and held for that purpose (after reasonable notice
to the Executive and an opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board), finding that in the good
faith opinion of the Board the Executive was guilty of conduct set forth in the
second sentence of this Section 3(d) and specifying the particulars thereof in
detail.
(e) Good Reason. The Executive may terminate the Executive's
employment for Good Reason at any time after a Change in Control during the
Term. For purposes of this Agreement, "Good Reason" shall mean any of the
following:
2
<PAGE> 3
(i) The Company has materially changed the Executive's
position, duties, responsibilities, status, or offices as in effect immediately
prior to a Change in Control of the Company, or has removed the Executive from
or failed to reelect the Executive to any of such positions;
(ii) A reduction by the Company in the Executive's base salary
as in effect on the date hereof or as the same may be increased from time to
time during the Term.
(iii) Any failure by the Company to continue in effect any
benefit plan or arrangement (including, without limitation, the Company's life
insurance, accident, disability and health insurance plans, 40 1(k) and bonus
plans, stock options, and all other similar plans which are from time to time
made generally available to senior executives/officers of the Company) and in
which the Executive is participating at the time of a Change in Control of the
Company, unless there are substituted therefore plans or arrangements providing
the Executive with essentially equivalent and no less favorable benefits
(hereinafter referred to as "Benefit Plans"), or the taking of any action by the
Company which would adversely affect the Executive's participation in or
materially reduce the Executive's benefits under any such Benefit Plan or
deprive the Executive of any material fringe benefit enjoyed by the Executive at
the time of a Change in Control of the Company;
(iv) Any failure by the Company to continue in effect any
incentive plan or arrangement (including, without limitation, the Company's
plans enumerated in subparagraph (iii) above and similar incentive compensation
benefits) in which the Executive is participating at the time of a Change in
Control of the Company, unless there are substituted therefore plans or
arrangements providing the Executive with essentially equivalent and no less
favorable benefits (hereinafter referred to as "Incentive Plans"), or the taking
of any action by the Company which would adversely affect the Executive's
participation in any such Incentive Plan or reduce the Executive's potential
benefits under any such Incentive Plan, expressed as a percentage of his base
salary, by more than 10 percentage points in any fiscal year as compared to the
immediately preceding fiscal year;
(v) Any failure by the Company to continue in effect any plan
or arrangement to receive securities of the Company (including, without
limitation, the Company's stock option and purchase plans and any other plan or
arrangement to receive and exercise stock options, stock appreciation rights,
restricted stock or grants thereof) in which the Executive is participating at
the time of a Change in Control of the Company, unless there are substituted
therefor plans or arrangements providing the Executive with essentially
equivalent and no less favorable (hereinafter referred to as "Securities
Plans"), or the taking of any action by the Company which would adversely affect
the Executive's participation in or materially reduce the Executive's benefits
under any such Securities Plan;
(vi) A relocation of the Company's principal executive offices
to a location outside of Orange County, California, or the Executive's
relocation to any place other than the location at which the Executive performed
the Executive's duties prior to a Change in Control of the Company, except for
required travel by the Executive on the Company's business to an extent
substantially consistent with the Executive's business travel obligations during
the 12 months immediately preceding a Change of Control of the Company;
3
<PAGE> 4
(vii) Any failure by the Company to provide the Executive with
the number of paid vacation days to which the Executive is entitled at the time
of a Change of Control of the Company;
(viii) Any material breach by the Company of any provision of
this Agreement;
(ix) Any failure by the Company to obtain the assumption of
this Agreement by any successor or assignee of the Company; or
(x) Any purported termination of the Executive's employment
that is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 3(f), and for purposes of this Agreement, no such
purported termination shall be effective.
(f) Notice of Termination. Any termination of the Executive by
the Company for Disability pursuant to Section 3(b) or for Cause pursuant to
Section 3(d) shall be communicated by a Notice of Termination. For purposes of
this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate those specific termination provisions in this Agreement relied
upon and which set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provisions so indicated. For purposes of this Agreement, no such purported
termination by the Company shall be effective without such Notice of
Termination.
(g) Date of Termination. "Date of Termination" shall mean (i) if
the Executive is terminated by the Company for Disability, 30 days after Notice
of Termination is given to the Executive (provided that the Executive shall not
have returned to the performance of the Executive's duties on a full-time basis
during such 30-day period) or (ii) if the Executive is terminated by the Company
for any other reason, the date on which a Notice of Termination is given;
provided that if within 30 days after any Notice of Termination is given to the
Executive by the Company the Executive notifies the Company that a dispute
exists concerning the termination, the Date of Termination shall be the date the
dispute is finally determined, whether by mutual agreement by the parties or
upon final judgment, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been perfected).
4. Severance Compensation upon Termination of Employment. Subject to
Section 4(e) below, if, within twenty-four (24) months following a Change in
Control, the Company shall terminate the Executive's employment other than
pursuant to Section 3(b), 3(c) or 3(d), or if the Executive terminates his
employment for Good Reason pursuant to Section 3(e), then:
(a) Severance Payment. The Company shall pay to the Executive as
severance pay a lump sum, in cash, in full on the fifth day following the Date
of Termination an amount equal to (i) the Executive's highest annual base salary
in effect during the 12-month period immediately preceding the Date of
Termination, and (ii) a lump sum payment of the Executive's incentive
compensation bonus that would otherwise be payable to Executive under the
Company's Bonus Plan then in effect for the year in which the Date of
Termination occurred assuming one hundred percent (100%) satisfaction of all
performance goals established under such Bonus Plan for the Executive,
multiplied by 2.0. The foregoing payment shall be in addition to any payments or
other compensation that would otherwise be payable to executives under any other
then existing Severance
4
<PAGE> 5
Plan of the Company. All payments hereunder shall be made net of withholdings
required by applicable federal, state or local laws.
(b) Stock Options. All stock options not currently exercisable
held by the Executive will accelerate and become exercisable as of the Date of
Termination.
(c) Restricted Stock. All restrictions on any restricted stock,
including without limitation any vesting requirements on any unvested stock,
held by the Executive as of the Date of Termination shall be removed.
(d) Continuation of Benefits. The Company shall continue for a
period of one year from the Date of Termination to provide the following
benefits to the Executive on the same terms as provided to the Executive on the
Date of Termination:
(i) Participation in the Company's medical, dental and vision
plans;
(ii) Long-term disability insurance;
(iii) Life Insurance.
Notwithstanding the foregoing, any benefits payable under this subsection 4(d)
shall terminate at such time as the Executive becomes eligible for similar
benefits from any subsequent employer; provided, however that at the end of the
period of coverage hereinabove provided for, the Executive shall have the option
to have assigned to the Executive at no cost and with no apportionment of
prepaid premiums, any assignable insurance owned by the Company and relating
specifically to the Executive.
(e) Limitation. To the extent that any or all of the payments and
benefits provided for in this Agreement constitute "parachute payments" within
the meaning of Section 280G of the Internal Revenue Code (the "Code") and, but
for this Section 4(e), would be subject to the excise tax imposed by Section
4999 of the Code, then the aggregate amount of such payments and benefits shall
be reduced such that the present value thereof (as determined under the Code and
applicable regulations) is equal to 2.99 times the Executive's "base amount" (as
defined in the Code).
The determination of any reduction or increase of any payment or benefits under
this Section 4 pursuant to the foregoing provision shall be made by a nationally
recognized public accounting firm chosen by the Company in good faith, and such
determination shall be conclusive and binding on the Company and the Executive.
5. No Obligation to Mitigate Damages: No Effect on Other Contractual
Rights.
(a) No Obligation to Mitigate. The Executive shall not be
required to mitigate damages or the amount of any payment provided for under
this Agreement by seeking other employment or otherwise, nor, except as set
forth in Section 4(d), shall the amount of any payment provided for under this
Agreement be reduced by any compensation earned by the Executive as the result
of employment by another employer after the Date of Termination, or otherwise.
(b) No Effect on Other Contractual Rights. The provisions of this
Agreement, and any payment provided for hereunder, shall not reduce any amounts
otherwise payable, or in any way diminish the Executive's existing rights, or
rights which would accrue solely as a result of the
5
<PAGE> 6
passage of time, under any Benefit Plan, Incentive Plan or Securities Plan,
employment agreement or other contract, plan or arrangement.
6. Successors and Assigns.
(a) The Company. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor or assignee to its
business and/or assets as aforesaid which assumes the obligations of the Company
under this Agreement or which otherwise becomes bound by all of the terms and
provisions of this Agreement by operation of law. If at any time during the term
of this Agreement the Executive is employed by any corporation a majority of the
voting securities of which is then owned by the Company, such indirect
employment of the Executive by the Company shall not excuse the Company from
performing its obligations under this Agreement as if the Executive were
directly employed by the Company, and the Company agrees that it shall pay or
shall cause such employer to pay any amounts owed to the Executive pursuant to
Section 4 hereof, notwithstanding any such indirect employment relationship.
(b) The Executive. This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts are still payable to him
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's devisee, legatee,
or other designee or, if there be no such designee, to the Executive's estate.
7. Notice. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered, one business day after being sent
for overnight delivery by a nationally recognized overnight courier or three
business days after being mailed by United States registered mail,
return-receipt requested, postage-prepaid, addressed as follows:
If to the Company:
Vice President and Chief Financial Officer
Datum Inc.
9975 Toledo Way
Irvine, California 92618
If to the Executive:
31191 Calle Bolero
San Juan Capistrano, CA 92675
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
8. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the
6
<PAGE> 7
same or at any prior or subsequent time. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.
This Agreement shall be governed by and construed in accordance with the laws of
the State of California.
9. Validity. The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
11. Arbitration, Legal Fees and Expenses. In the event of any
controversy, claim or dispute between the parties hereto arising out of or
relating to this Agreement, the matter shall be determined by arbitration, which
shall take place in Orange County, California, under the rules of the American
Arbitration Association; and a judgment upon such award may be entered in any
court having jurisdiction thereof. Any decision or award of such arbitrator
shall be final and binding upon the parties and shall not be appealable. The
parties hereby consent to the jurisdiction of such arbitrator and of any court
having jurisdiction to enter judgment upon and enforce any action taken by such
arbitrator. The Company shall pay all legal fees and expenses that the Executive
may incur as a result of the Company's contesting the validity, enforceability
or the executive's interpretation of, or determinations under, this Agreement.
12. Confidentiality. The Executive shall retain in confidence any and
all confidential information known to the Executive concerning the Company and
its business so long as such information is not otherwise publicly disclosed.
13. Entire Agreement. This Agreement contains all of the terms agreed
upon between the Executive and the Company with respect to the subject matter
hereof and replaces and supersedes all prior severance agreements between the
Executive and the Company. The Executive and the Company agree that no term,
provision or condition of this Agreement shall be held to be altered, amended,
changed or waived in any respect except as evidenced by written agreement of the
Executive and the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
"COMPANY" "EXECUTIVE"
DATUM, INC.
By: /s/ Dan L. McGurk By: /s/ David A. Young
-------------------------------- --------------------------------
Name: Dan L. McGurk Name: David A. Young
Title: Chairman of the Compensation Title: Vice President and Chief
Committee Financial Officer
7
<PAGE> 1
EXHIBIT 10.49
SEVERANCE COMPENSATION AGREEMENT
DATED AS OF OCTOBER 29, 1999
BETWEEN
DATUM INC., A DELAWARE CORPORATION, (THE "COMPANY")
AND
PAUL E. BAIA (THE "EXECUTIVE")
The Company's Board of Directors (the "Board") has determined that it
is appropriate to reinforce and encourage the continued attention and dedication
of members of the Company's management, including the Executive, to their
assigned duties without distraction in potentially disturbing circumstances
arising from the possibility of a change in control of the Company.
This Agreement sets forth the severance compensation which the Company
agrees it will pay to the Executive if the Executive's employment with the
Company terminates under one of the circumstances described herein following a
"Change in Control" of the Company (as defined in Section 2).
1. Term. The term ("Term") of this Agreement shall commence on the date
hereof and, subject to earlier termination pursuant to Section 3(b), 3(c) or
3(d) hereof, shall end three (3) years following the date on which notice of
non-renewal or termination of this Agreement is given by either the Company or
Executive to the other. Thus, this Agreement shall be renewable automatically on
a daily basis so that the outstanding Term is always three (3) years following
any effective notice of non-renewal or of termination given by the Company or
Executive.
2. Change in Control. No compensation shall be payable under this
Agreement unless and until (a) there has been a Change in Control of the Company
while the Executive is still an employee of the Company and (b) the Executive's
employment by the Company terminates in the circumstances specified in Section
3(a). For purposes of this Agreement, a "Change in Control" of the Company shall
be deemed to have occurred if (i) there shall be consummated (x) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company's
Common Stock would be converted into cash, securities or other property, other
than a consolidation or merger of the Company in which the holders of the
Company's Common Stock immediately prior to the consolidation or merger have
substantially the same proportionate ownership of at least 65% of common stock
of the surviving corporation immediately after the consolidation or merger, or
(y) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all, or substantially all, of the assets of the
Company other than to a corporation in which the holders of the Company's Common
Stock immediately prior to such transaction have substantially the same
proportionate ownership of at least 65% of the common stock of such corporation,
or (ii) the stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company, or (iii) any person (as such term is
used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), shall become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of more than 35% of the Company's
outstanding shares of Common Stock, or (iv) during any period of two consecutive
years during the term of this Agreement, individuals who at the beginning of the
two year period constituted the entire Board do not for any reason constitute a
majority thereof unless the election, or the nomination for election by the
Company's stockholders,
<PAGE> 2
of each new director was approved by a vote of at least five-eighths of the
directors then still in office who were directors at the beginning of the
period.
3. Termination Following Change in Control.
(a) Termination. If a Change in Control of the Company shall have
occurred while the Executive is still an employee of the Company, the Executive
shall be entitled to the compensation provided in Section 4 upon the subsequent
termination of the Executive's employment with the Company within twenty four
(24) months of such Change in Control, whether requested by the Executive or by
the Company, unless such termination is as a result of (i) the Executive's
death; (ii) the Executive's Disability (as defined in Section (3)(b) below);
(iii) the Executive's Retirement (as defined in Section 3(c) below); (iv) the
Executive's termination by the Company for Cause (as defined in Section 3(d)
below); or (v) the Executive's decision to terminate employment other than for
Good Reason (as defined in Section 3(e) below).
(b) Death or Disability. If, as a result of the Executive's
incapacity due to physical or mental illness, the Executive is absent from his
duties with the Company on a full-time basis for six months, the Company may
elect to terminate the Executive for "Disability" by written notice to Executive
and without liability to Executive pursuant to this Agreement; provided,
however, that any such termination shall be effective only at the end of thirty
(30) days following the delivery of such notice and only if Executive fails to
return to the full-time performance of duties by the end of such 30-day notice
period. In addition, this Agreement shall terminate immediately in the event of
the death of the Executive occurring at any time during the Term hereof, and in
such event the Company shall have no liability by reason of such termination.
(c) Retirement. The Executive shall be deemed terminated
automatically, without liability to Executive pursuant to this Agreement, upon
Retirement (as hereinafter defined) of Executive without liability to the
Company pursuant to this Agreement. "Retirement" as used in this Agreement shall
be deemed to occur upon the Executive's having reached such age as shall have
been fixed in any arrangement mutually established by the Company and the
Executive.
(d) Cause. The Company may terminate the Executive, without
liability to the Executive pursuant to this Agreement, if the Executive's
employment with the Company is terminated for Cause. For purposes solely of
determining whether the Company may terminate the Executive pursuant to this
Section 3(d) without liability to the Executive, the Executive shall be deemed
to have been terminated for "Cause" only if Executive had engaged in fraud,
misappropriation or embezzlement, or any conviction or admission of a felony or
other offense involving dishonest or moral turpitude. Notwithstanding the
foregoing, the Executive shall not be deemed, for purposes of this Agreement, to
have been terminated for Cause unless and until there shall have been delivered
to the Executive a copy of a resolution duly adopted by the affirmative vote of
not less than five-eighths of the entire membership of the Company's Board at a
meeting of the Board called and held for that purpose (after reasonable notice
to the Executive and an opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board), finding that in the good
faith opinion of the Board the Executive was guilty of conduct set forth in the
second sentence of this Section 3(d) and specifying the particulars thereof in
detail.
(e) Good Reason. The Executive may terminate the Executive's
employment for Good Reason at any time after a Change in Control during the
Term. For purposes of this Agreement, "Good Reason" shall mean any of the
following:
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<PAGE> 3
(i) The Company has materially changed the Executive's
position, duties, responsibilities, status, or offices as in effect immediately
prior to a Change in Control of the Company, or has removed the Executive from
or failed to reelect the Executive to any of such positions;
(ii) A reduction by the Company in the Executive's base salary
as in effect on the date hereof or as the same may be increased from time to
time during the Term.
(iii) Any failure by the Company to continue in effect any
benefit plan or arrangement (including, without limitation, the Company's life
insurance, accident, disability and health insurance plans, 401(k) and bonus
plans, stock options, and all other similar plans which are from time to time
made generally available to senior executives/officers of the Company) and in
which the Executive is participating at the time of a Change in Control of the
Company, unless there are substituted therefore plans or arrangements providing
the Executive with essentially equivalent and no less favorable benefits
(hereinafter referred to as "Benefit Plans"), or the taking of any action by the
Company which would adversely affect the Executive's participation in or
materially reduce the Executive's benefits under any such Benefit Plan or
deprive the Executive of any material fringe benefit enjoyed by the Executive at
the time of a Change in Control of the Company;
(iv) Any failure by the Company to continue in effect any
incentive plan or arrangement (including, without limitation, the Company's
plans enumerated in subparagraph (iii) above and similar incentive compensation
benefits) in which the Executive is participating at the time of a Change in
Control of the Company, unless there are substituted therefore plans or
arrangements providing the Executive with essentially equivalent and no less
favorable benefits (hereinafter referred to as "Incentive Plans"), or the taking
of any action by the Company which would adversely affect the Executive's
participation in any such Incentive Plan or reduce the Executive's potential
benefits under any such Incentive Plan, expressed as a percentage of his base
salary, by more than 10 percentage points in any fiscal year as compared to the
immediately preceding fiscal year;
(v) Any failure by the Company to continue in effect any plan
or arrangement to receive securities of the Company (including, without
limitation, the Company's stock option and purchase plans and any other plan or
arrangement to receive and exercise stock options, stock appreciation rights,
restricted stock or grants thereof) in which the Executive is participating at
the time of a Change in Control of the Company, unless there are substituted
therefor plans or arrangements providing the Executive with essentially
equivalent and no less favorable (hereinafter referred to as "Securities
Plans"), or the taking of any action by the Company which would adversely affect
the Executive's participation in or materially reduce the Executive's benefits
under any such Securities Plan;
(vi) The Executive's relocation to any place other than the
location at which the Executive performed the Executive's duties prior to a
Change in Control of the Company, except for required travel by the Executive on
the Company's business to an extent substantially consistent with the
Executive's business travel obligations during the 12 months immediately
preceding a Change of Control of the Company;
(vii) Any failure by the Company to provide the Executive with
the number of paid vacation days to which the Executive is entitled at the time
of a Change of Control of the Company;
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(viii) Any material breach by the Company of any provision of
this Agreement;
(ix) Any failure by the Company to obtain the assumption of
this Agreement by any successor or assignee of the Company; or
(x) Any purported termination of the Executive's employment
that is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 3(f), and for purposes of this Agreement, no such
purported termination shall be effective.
(f) Notice of Termination. Any termination of the Executive by
the Company for Disability pursuant to Section 3(b) or for Cause pursuant to
Section 3(d) shall be communicated by a Notice of Termination. For purposes of
this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate those specific termination provisions in this Agreement relied
upon and which set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provisions so indicated. For purposes of this Agreement, no such purported
termination by the Company shall be effective without such Notice of
Termination.
(g) Date of Termination. "Date of Termination" shall mean (i) if
the Executive is terminated by the Company for Disability, 30 days after Notice
of Termination is given to the Executive (provided that the Executive shall not
have returned to the performance of the Executive's duties on a full-time basis
during such 30-day period) or (ii) if the Executive is terminated by the Company
for any other reason, the date on which a Notice of Termination is given;
provided that if within 30 days after any Notice of Termination is given to the
Executive by the Company the Executive notifies the Company that a dispute
exists concerning the termination, the Date of Termination shall be the date the
dispute is finally determined, whether by mutual agreement by the parties or
upon final judgment, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been perfected).
4. Severance Compensation upon Termination of Employment. Subject to
Section 4(e) below, if, within twenty-four (24) months following a Change in
Control, the Company shall terminate the Executive's employment other than
pursuant to Section 3(b), 3(c) or 3(d), or if the Executive terminates his
employment for Good Reason pursuant to Section 3(e), then:
(a) Severance Payment. The Company shall pay to the Executive as
severance pay a lump sum, in cash, in full on the fifth day following the Date
of Termination an amount equal to (i) the Executive's highest annual base salary
in effect during the 12-month period immediately preceding the Date of
Termination, and (ii) a lump sum payment of the Executive's incentive
compensation bonus that would otherwise be payable to Executive under the
Company's Bonus Plan then in effect for the year in which the Date of
Termination occurred assuming one hundred percent (100%) satisfaction of all
performance goals established under such Bonus Plan for the Executive,
multiplied by 1.0. The foregoing payment shall be in addition to any payments or
other compensation that would otherwise be payable to executives under any other
then existing Severance Plan of the Company. All payments hereunder shall be
made net of withholdings required by applicable federal, state or local laws.
(b) Stock Options. All stock options not currently exercisable
held by the Executive will accelerate and become exercisable as of the Date of
Termination.
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<PAGE> 5
(c) Restricted Stock. All restrictions on any restricted stock,
including without limitation any vesting requirements on any unvested stock,
held by the Executive as of the Date of Termination shall be removed.
(d) Continuation of Benefits. The Company shall continue for a
period of one year from the Date of Termination to provide the following
benefits to the Executive on the same terms as provided to the Executive on the
Date of Termination:
(i) Participation in the Company's medical, dental and vision
plans;
(ii) Long-term disability insurance;
(iii) Life Insurance.
Notwithstanding the foregoing, any benefits payable under this subsection 4(d)
shall terminate at such time as the Executive becomes eligible for similar
benefits from any subsequent employer; provided, however ,that at the end of the
period of coverage hereinabove provided for, the Executive shall have the option
to have assigned to the Executive at no cost and with no apportionment of
prepaid premiums, any assignable insurance owned by the Company and relating
specifically to the Executive.
(e) Limitation. To the extent that any or all of the payments and
benefits provided for in this Agreement constitute "parachute payments" within
the meaning of Section 280G of the Internal Revenue Code (the "Code") and, but
for this Section 4(e), would be subject to the excise tax imposed by Section
4999 of the Code, then the aggregate amount of such payments and benefits shall
be reduced such that the present value thereof (as determined under the Code and
applicable regulations) is equal to 2.99 times the Executive's "base amount" (as
defined in the Code).
The determination of any reduction or increase of any payment or benefits under
this Section 4 pursuant to the foregoing provision shall be made by a nationally
recognized public accounting firm chosen by the Company in good faith, and such
determination shall be conclusive and binding on the Company and the Executive.
5. No Obligation to Mitigate Damages: No Effect on Other Contractual
Rights.
(a) No Obligation to Mitigate. The Executive shall not be
required to mitigate damages or the amount of any payment provided for under
this Agreement by seeking other employment or otherwise, nor, except as set
forth in Section 4(d), shall the amount of any payment provided for under this
Agreement be reduced by any compensation earned by the Executive as the result
of employment by another employer after the Date of Termination, or otherwise.
(b) No Effect on Other Contractual Rights. The provisions of this
Agreement, and any payment provided for hereunder, shall not reduce any amounts
otherwise payable, or in any way diminish the Executive's existing rights, or
rights which would accrue solely as a result of the passage of time, under any
Benefit Plan, Incentive Plan or Securities Plan, employment agreement or other
contract, plan or arrangement.
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<PAGE> 6
6. Successors and Assigns.
(a) The Company. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor or assignee to its
business and/or assets as aforesaid which assumes the obligations of the Company
under this Agreement or which otherwise becomes bound by all of the terms and
provisions of this Agreement by operation of law. If at any time during the term
of this Agreement the Executive is employed by any corporation a majority of the
voting securities of which is then owned by the Company, such indirect
employment of the Executive by the Company shall not excuse the Company from
performing its obligations under this Agreement as if the Executive were
directly employed by the Company, and the Company agrees that it shall pay or
shall cause such employer to pay any amounts owed to the Executive pursuant to
Section 4 hereof, notwithstanding any such indirect employment relationship.
(b) The Executive. This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts are still payable to him
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's devisee, legatee,
or other designee or, if there be no such designee, to the Executive's estate.
7. Notice. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered, one business day after being sent
for overnight delivery by a nationally recognized overnight courier or three
business days after being mailed by United States registered mail,
return-receipt requested, postage-prepaid, addressed as follows:
If to the Company:
Vice President
Datum Inc.
Datum-Beverly
34 Tozer Road
Beverly, MA 01915
If to the Executive:
19 Pearson Drive
Byfield, MA 01915
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
8. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which
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<PAGE> 7
are not set forth expressly in this Agreement. This Agreement shall be governed
by and construed in accordance with the laws of the State of California.
9. Validity. The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
11. Arbitration, Legal Fees and Expenses. In the event of any
controversy, claim or dispute between the parties hereto arising out of or
relating to this Agreement, the matter shall be determined by arbitration, which
shall take place in Orange County, California, under the rules of the American
Arbitration Association; and a judgment upon such award may be entered in any
court having jurisdiction thereof. Any decision or award of such arbitrator
shall be final and binding upon the parties and shall not be appealable. The
parties hereby consent to the jurisdiction of such arbitrator and of any court
having jurisdiction to enter judgment upon and enforce any action taken by such
arbitrator. The Company shall pay all legal fees and expenses that the Executive
may incur as a result of the Company's contesting the validity, enforceability
or the executive's interpretation of, or determinations under, this Agreement.
12. Confidentiality. The Executive shall retain in confidence any and
all confidential information known to the Executive concerning the Company and
its business so long as such information is not otherwise publicly disclosed.
13. Entire Agreement. This Agreement contains all of the terms agreed
upon between the Executive and the Company with respect to the subject matter
hereof and replaces and supersedes all prior severance agreements between the
Executive and the Company. The Executive and the Company agree that no term,
provision or condition of this Agreement shall be held to be altered, amended,
changed or waived in any respect except as evidenced by written agreement of the
Executive and the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
"COMPANY" "EXECUTIVE"
DATUM, INC.
By: /s/ Dan L. McGurk By: /s/ Paul E. Baia
-------------------------------- --------------------------------
Name: Dan L. McGurk Name: Paul E. Baia
Title: Chairman of the Compensation Title: Vice President
Committee
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<PAGE> 1
EXHIBIT 10.50
SEVERANCE COMPENSATION AGREEMENT
DATED AS OF OCTOBER 29, 1999
BETWEEN
DATUM INC., A DELAWARE CORPORATION, (THE "COMPANY")
AND
MICHAEL J. PATRICK (THE "EXECUTIVE")
The Company's Board of Directors (the "Board") has determined that it
is appropriate to reinforce and encourage the continued attention and dedication
of members of the Company's management, including the Executive, to their
assigned duties without distraction in potentially disturbing circumstances
arising from the possibility of a change in control of the Company.
This Agreement sets forth the severance compensation which the Company
agrees it will pay to the Executive if the Executive's employment with the
Company terminates under one of the circumstances described herein following a
"Change in Control" of the Company (as defined in Section 2).
1. Term. The term ("Term") of this Agreement shall commence on the date
hereof and, subject to earlier termination pursuant to Section 3(b), 3(c) or
3(d) hereof, shall end three (3) years following the date on which notice of
non-renewal or termination of this Agreement is given by either the Company or
Executive to the other. Thus, this Agreement shall be renewable automatically on
a daily basis so that the outstanding Term is always three (3) years following
any effective notice of non-renewal or of termination given by the Company or
Executive.
2. Change in Control. No compensation shall be payable under this
Agreement unless and until (a) there has been a Change in Control of the Company
while the Executive is still an employee of the Company and (b) the Executive's
employment by the Company terminates in the circumstances specified in Section
3(a). For purposes of this Agreement, a "Change in Control" of the Company shall
be deemed to have occurred if (i) there shall be consummated (x) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company's
Common Stock would be converted into cash, securities or other property, other
than a consolidation or merger of the Company in which the holders of the
Company's Common Stock immediately prior to the consolidation or merger have
substantially the same proportionate ownership of at least 65% of common stock
of the surviving corporation immediately after the consolidation or merger, or
(y) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all, or substantially all, of the assets of the
Company other than to a corporation in which the holders of the Company's Common
Stock immediately prior to such transaction have substantially the same
proportionate ownership of at least 65% of the common stock of such corporation,
or (ii) the stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company, or (iii) any person (as such term is
used in Sections 13(d) and 1 4(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), shall become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of more than 35% of the Company's
outstanding shares of Common Stock, or (iv) during any period of two consecutive
years during the term of this Agreement, individuals who at the beginning of the
two year period constituted the entire Board do not for any reason constitute a
majority thereof unless the election, or the nomination for election by the
Company's stockholders,
<PAGE> 2
of each new director was approved by a vote of at least
five-eighths of the directors then still in office who were directors at the
beginning of the period.
3. Termination Following Change in Control.
(a) Termination. If a Change in Control of the Company shall have
occurred while the Executive is still an employee of the Company, the Executive
shall be entitled to the compensation provided in Section 4 upon the subsequent
termination of the Executive's employment with the Company within twenty four
(24) months of such Change in Control, whether requested by the Executive or by
the Company, unless such termination is as a result of (i) the Executive's
death; (ii) the Executive's Disability (as defined in Section (3)(b) below);
(iii) the Executive's Retirement (as defined in Section 3(c) below); (iv) the
Executive's termination by the Company for Cause (as defined in Section 3(d)
below); or (v) the Executive's decision to terminate employment other than for
Good Reason (as defined in Section 3(e) below).
(b) Death or Disability. If, as a result of the Executive's
incapacity due to physical or mental illness, the Executive is absent from his
duties with the Company on a full-time basis for six months, the Company may
elect to terminate the Executive for "Disability" by written notice to Executive
and without liability to Executive pursuant to this Agreement; provided,
however, that any such termination shall be effective only at the end of thirty
(30) days following the delivery of such notice and only if Executive fails to
return to the full-time performance of duties by the end of such 30-day notice
period. In addition, this Agreement shall terminate immediately in the event of
the death of the Executive occurring at any time during the Term hereof, and in
such event the Company shall have no liability by reason of such termination.
(c) Retirement. The Executive shall be deemed terminated
automatically, without liability to Executive pursuant to this Agreement, upon
Retirement (as hereinafter defined) of Executive without liability to the
Company pursuant to this Agreement. "Retirement" as used in this Agreement shall
be deemed to occur upon the Executive's having reached such age as shall have
been fixed in any arrangement mutually established by the Company and the
Executive.
(d) Cause. The Company may terminate the Executive, without
liability to the Executive pursuant to this Agreement, if the Executive's
employment with the Company is terminated for Cause. For purposes solely of
determining whether the Company may terminate the Executive pursuant to this
Section 3(d) without liability to the Executive, the Executive shall be deemed
to have been terminated for "Cause" only if Executive had engaged in fraud,
misappropriation or embezzlement, or any conviction or admission of a felony or
other offense involving dishonest or moral turpitude. Notwithstanding the
foregoing, the Executive shall not be deemed, for purposes of this Agreement, to
have been terminated for Cause unless and until there shall have been delivered
to the Executive a copy of a resolution duly adopted by the affirmative vote of
not less than five-eighths of the entire membership of the Company's Board at a
meeting of the Board called and held for that purpose (after reasonable notice
to the Executive and an opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board), finding that in the good
faith opinion of the Board the Executive was guilty of conduct set forth in the
second sentence of this Section 3(d) and specifying the particulars thereof in
detail.
(e) Good Reason. The Executive may terminate the Executive's
employment for Good Reason at any time after a Change in Control during the
Term. For purposes of this Agreement, "Good Reason" shall mean any of the
following:
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<PAGE> 3
(i) The Company has materially changed the Executive's
position, duties, responsibilities, status, or offices as in effect immediately
prior to a Change in Control of the Company, or has removed the Executive from
or failed to reelect the Executive to any of such positions;
(ii) A reduction by the Company in the Executive's base salary
as in effect on the date hereof or as the same may be increased from time to
time during the Term.
(iii) Any failure by the Company to continue in effect any
benefit plan or arrangement (including, without limitation, the Company's life
insurance, accident, disability and health insurance plans, 401(k) and bonus
plans, stock options, and all other similar plans which are from time to time
made generally available to senior executives/officers of the Company) and in
which the Executive is participating at the time of a Change in Control of the
Company, unless there are substituted therefore plans or arrangements providing
the Executive with essentially equivalent and no less favorable benefits
(hereinafter referred to as "Benefit Plans"), or the taking of any action by the
Company which would adversely affect the Executive's participation in or
materially reduce the Executive's benefits under any such Benefit Plan or
deprive the Executive of any material fringe benefit enjoyed by the Executive at
the time of a Change in Control of the Company;
(iv) Any failure by the Company to continue in effect any
incentive plan or arrangement (including, without limitation, the Company's
plans enumerated in subparagraph (iii) above and similar incentive compensation
benefits) in which the Executive is participating at the time of a Change in
Control of the Company, unless there are substituted therefore plans or
arrangements providing the Executive with essentially equivalent and no less
favorable benefits (hereinafter referred to as "Incentive Plans"), or the taking
of any action by the Company which would adversely affect the Executive's
participation in any such Incentive Plan or reduce the Executive's potential
benefits under any such Incentive Plan, expressed as a percentage of his base
salary, by more than 10 percentage points in any fiscal year as compared to the
immediately preceding fiscal year;
(v) Any failure by the Company to continue in effect any plan
or arrangement to receive securities of the Company (including, without
limitation, the Company's stock option and purchase plans and any other plan or
arrangement to receive and exercise stock options, stock appreciation rights,
restricted stock or grants thereof) in which the Executive is participating at
the time of a Change in Control of the Company, unless there are substituted
therefor plans or arrangements providing the Executive with essentially
equivalent and no less favorable (hereinafter referred to as "Securities
Plans"), or the taking of any action by the Company which would adversely affect
the Executive's participation in or materially reduce the Executive's benefits
under any such Securities Plan;
(vi) The Executive's relocation to any place other than the
location at which the Executive performed the Executive's duties prior to a
Change in Control of the Company, except for required travel by the Executive on
the Company's business to an extent substantially consistent with the
Executive's business travel obligations during the 12 months immediately
preceding a Change of Control of the Company;
(vii) Any failure by the Company to provide the Executive with
the number of paid vacation days to which the Executive is entitled at the time
of a Change of Control of the Company;
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<PAGE> 4
(viii) Any material breach by the Company of any provision of
this Agreement;
(ix) Any failure by the Company to obtain the assumption of
this Agreement by any successor or assignee of the Company; or
(x) Any purported termination of the Executive's employment
that is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 3(f), and for purposes of this Agreement, no such
purported termination shall be effective.
(f) Notice of Termination. Any termination of the Executive by
the Company for Disability pursuant to Section 3(b) or for Cause pursuant to
Section 3(d) shall be communicated by a Notice of Termination. For purposes of
this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate those specific termination provisions in this Agreement relied
upon and which set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provisions so indicated. For purposes of this Agreement, no such purported
termination by the Company shall be effective without such Notice of
Termination.
(g) Date of Termination. "Date of Termination" shall mean (i) if
the Executive is terminated by the Company for Disability, 30 days after Notice
of Termination is given to the Executive (provided that the Executive shall not
have returned to the performance of the Executive's duties on a full-time basis
during such 30-day period) or (ii) if the Executive is terminated by the Company
for any other reason, the date on which a Notice of Termination is given;
provided that if within 30 days after any Notice of Termination is given to the
Executive by the Company the Executive notifies the Company that a dispute
exists concerning the termination, the Date of Termination shall be the date the
dispute is finally determined, whether by mutual agreement by the parties or
upon final judgment, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been perfected).
4. Severance Compensation upon Termination of Employment. Subject to
Section 4(e) below, if, within twenty-four (24) months following a Change in
Control, the Company shall terminate the Executive's employment other than
pursuant to Section 3(b), 3(c) or 3(d), or if the Executive terminates his
employment for Good Reason pursuant to Section 3(e), then:
(a) Severance Payment. The Company shall pay to the Executive as
severance pay a lump sum, in cash, in full on the fifth day following the Date
of Termination an amount equal to (i) the Executive's highest annual base salary
in effect during the 12-month period immediately preceding the Date of
Termination, and (ii) a lump sum payment of the Executive's incentive
compensation bonus that would otherwise be payable to Executive under the
Company's Bonus Plan then in effect for the year in which the Date of
Termination occurred assuming one hundred percent (100%) satisfaction of all
performance goals established under such Bonus Plan for the Executive,
multiplied by 1.0. The foregoing payment shall be in addition to any payments or
other compensation that would otherwise be payable to executives under any other
then existing Severance Plan of the Company. All payments hereunder shall be
made net of withholdings required by applicable federal, state or local laws.
(b) Stock Options. All stock options not currently exercisable
held by the Executive will accelerate and become exercisable as of the Date of
Termination.
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<PAGE> 5
(c) Restricted Stock. All restrictions on any restricted stock,
including without limitation any vesting requirements on any unvested stock,
held by the Executive as of the Date of Termination shall be removed.
(d) Continuation of Benefits. The Company shall continue for a
period of one year from the Date of Termination to provide the following
benefits to the Executive on the same terms as provided to the Executive on the
Date of Termination:
(i) Participation in the Company's medical, dental and vision
plans;
(ii) Long-term disability insurance;
(iii) Life Insurance.
Notwithstanding the foregoing, any benefits payable under this subsection 4(d)
shall terminate at such time as the Executive becomes eligible for similar
benefits from any subsequent employer; provided, however, that at the end of the
period of coverage hereinabove provided for, the Executive shall have the option
to have assigned to the Executive at no cost and with no apportionment of
prepaid premiums, any assignable insurance owned by the Company and relating
specifically to the Executive.
(e) Limitation. To the extent that any or all of the payments and
benefits provided for in this Agreement constitute "parachute payments" within
the meaning of Section 280G of the Internal Revenue Code (the "Code") and, but
for this Section 4(e), would be subject to the excise tax imposed by Section
4999 of the Code, then the aggregate amount of such payments and benefits shall
be reduced such that the present value thereof (as determined under the Code and
applicable regulations) is equal to 2.99 times the Executive's "base amount" (as
defined in the Code).
The determination of any reduction or increase of any payment or benefits under
this Section 4 pursuant to the foregoing provision shall be made by a nationally
recognized public accounting firm chosen by the Company in good faith, and such
determination shall be conclusive and binding on the Company and the Executive.
5. No Obligation to Mitigate Damages: No Effect on Other Contractual
Rights.
(a) No Obligation to Mitigate. The Executive shall not be
required to mitigate damages or the amount of any payment provided for under
this Agreement by seeking other employment or otherwise, nor, except as set
forth in Section 4(d), shall the amount of any payment provided for under this
Agreement be reduced by any compensation earned by the Executive as the result
of employment by another employer after the Date of Termination, or otherwise.
(b) No Effect on Other Contractual Rights. The provisions of this
Agreement, and any payment provided for hereunder, shall not reduce any amounts
otherwise payable, or in any way diminish the Executive's existing rights, or
rights which would accrue solely as a result of the passage of time, under any
Benefit Plan, Incentive Plan or Securities Plan, employment agreement or other
contract, plan or arrangement.
5
<PAGE> 6
6. Successors and Assigns.
(a) The Company. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor or assignee to its
business and/or assets as aforesaid which assumes the obligations of the Company
under this Agreement or which otherwise becomes bound by all of the terms and
provisions of this Agreement by operation of law. If at any time during the term
of this Agreement the Executive is employed by any corporation a majority of the
voting securities of which is then owned by the Company, such indirect
employment of the Executive by the Company shall not excuse the Company from
performing its obligations under this Agreement as if the Executive were
directly employed by the Company, and the Company agrees that it shall pay or
shall cause such employer to pay any amounts owed to the Executive pursuant to
Section 4 hereof, notwithstanding any such indirect employment relationship.
(b) The Executive. This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts are still payable to him
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's devisee, legatee,
or other designee or, if there be no such designee, to the Executive's estate.
7. Notice. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered, one business day after being sent
for overnight delivery by a nationally recognized overnight courier or three
business days after being mailed by United States registered mail,
return-receipt requested, postage-prepaid, addressed as follows:
If to the Company:
Vice President
Datum Inc.
Datum-Irvine
3 Parker
Irvine, CA 92618
If to the Executive:
22852 Pocetas
Mission Viejo, CA 92692
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
8. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which
6
<PAGE> 7
are not set forth expressly in this Agreement. This Agreement shall be governed
by and construed in accordance with the laws of the State of California.
9. Validity. The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
11. Arbitration, Legal Fees and Expenses. In the event of any
controversy, claim or dispute between the parties hereto arising out of or
relating to this Agreement, the matter shall be determined by arbitration, which
shall take place in Orange County, California, under the rules of the American
Arbitration Association; and a judgment upon such award may be entered in any
court having jurisdiction thereof. Any decision or award of such arbitrator
shall be final and binding upon the parties and shall not be appealable. The
parties hereby consent to the jurisdiction of such arbitrator and of any court
having jurisdiction to enter judgment upon and enforce any action taken by such
arbitrator. The Company shall pay all legal fees and expenses that the Executive
may incur as a result of the Company's contesting the validity, enforceability
or the executive's interpretation of, or determinations under, this Agreement.
12. Confidentiality. The Executive shall retain in confidence any and
all confidential information known to the Executive concerning the Company and
its business so long as such information is not otherwise publicly disclosed.
13. Entire Agreement. This Agreement contains all of the terms agreed
upon between the Executive and the Company with respect to the subject matter
hereof and replaces and supersedes all prior severance agreements between the
Executive and the Company. The Executive and the Company agree that no term,
provision or condition of this Agreement shall be held to be altered, amended,
changed or waived in any respect except as evidenced by written agreement of the
Executive and the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
"COMPANY" "EXECUTIVE"
DATUM, INC.
By: /s/ Dan L. McGurk By: /s/ Michael J. Patrick
-------------------------------- --------------------------------
Name: Dan L. McGurk Name: Michael J. Patrick
Title: Chairman of the Compensation Title: Vice President
Committee
7
<PAGE> 1
EXHIBIT 10.51
SEVERANCE COMPENSATION AGREEMENT
DATED AS OF OCTOBER 29, 1999
BETWEEN
DATUM INC., A DELAWARE CORPORATION, (THE "COMPANY")
AND
JOHN R. RICE (THE "EXECUTIVE")
The Company's Board of Directors (the "Board") has determined that it
is appropriate to reinforce and encourage the continued attention and dedication
of members of the Company's management, including the Executive, to their
assigned duties without distraction in potentially disturbing circumstances
arising from the possibility of a change in control of the Company.
This Agreement sets forth the severance compensation which the Company
agrees it will pay to the Executive if the Executive's employment with the
Company terminates under one of the circumstances described herein following a
"Change in Control" of the Company (as defined in Section 2).
1. Term. The term ("Term") of this Agreement shall commence on the date
hereof and, subject to earlier termination pursuant to Section 3(b), 3(c) or
3(d) hereof, shall end three (3) years following the date on which notice of
non-renewal or termination of this Agreement is given by either the Company or
Executive to the other. Thus, this Agreement shall be renewable automatically on
a daily basis so that the outstanding Term is always three (3) years following
any effective notice of non-renewal or of termination given by the Company or
Executive.
2. Change in Control. No compensation shall be payable under this
Agreement unless and until (a) there has been a Change in Control of the Company
while the Executive is still an employee of the Company and (b) the Executive's
employment by the Company terminates in the circumstances specified in Section
3(a). For purposes of this Agreement, a "Change in Control" of the Company shall
be deemed to have occurred if (i) there shall be consummated (x) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company's
Common Stock would be converted into cash, securities or other property, other
than a consolidation or merger of the Company in which the holders of the
Company's Common Stock immediately prior to the consolidation or merger have
substantially the same proportionate ownership of at least 65% of common stock
of the surviving corporation immediately after the consolidation or merger, or
(y) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all, or substantially all, of the assets of the
Company other than to a corporation in which the holders of the Company's Common
Stock immediately prior to such transaction have substantially the same
proportionate ownership of at least 65% of the common stock of such corporation,
or (ii) the stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company, or (iii) any person (as such term is
used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), shall become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of more than 35% of the Company's
outstanding shares of Common Stock, or (iv) during any period of two consecutive
years during the term of this Agreement, individuals who at the beginning of the
two year period constituted the entire Board do not for any reason constitute a
majority thereof unless the election, or the nomination for election by the
Company's stockholders,
<PAGE> 2
of each new director was approved by a vote of at least five-eighths of the
directors then still in office who were directors at the beginning of the
period.
3. Termination Following Change in Control.
(a) Termination. If a Change in Control of the Company shall have
occurred while the Executive is still an employee of the Company, the Executive
shall be entitled to the compensation provided in Section 4 upon the subsequent
termination of the Executive's employment with the Company within twenty four
(24) months of such Change in Control, whether requested by the Executive or by
the Company, unless such termination is as a result of (i) the Executive's
death; (ii) the Executive's Disability (as defined in Section (3)(b) below);
(iii) the Executive's Retirement (as defined in Section 3(c) below); (iv) the
Executive's termination by the Company for Cause (as defined in Section 3(d)
below); or (v) the Executive's decision to terminate employment other than for
Good Reason (as defined in Section 3(e) below).
(b) Death or Disability. If, as a result of the Executive's
incapacity due to physical or mental illness, the Executive is absent from his
duties with the Company on a full-time basis for six months, the Company may
elect to terminate the Executive for "Disability" by written notice to Executive
and without liability to Executive pursuant to this Agreement; provided,
however, that any such termination shall be effective only at the end of thirty
(30) days following the delivery of such notice and only if Executive fails to
return to the full-time performance of duties by the end of such 30-day notice
period. In addition, this Agreement shall terminate immediately in the event of
the death of the Executive occurring at any time during the Term hereof, and in
such event the Company shall have no liability by reason of such termination.
(c) Retirement. The Executive shall be deemed terminated
automatically, without liability to Executive pursuant to this Agreement, upon
Retirement (as hereinafter defined) of Executive without liability to the
Company pursuant to this Agreement. "Retirement" as used in this Agreement shall
be deemed to occur upon the Executive's having reached such age as shall have
been fixed in any arrangement mutually established by the Company and the
Executive.
(d) Cause. The Company may terminate the Executive, without
liability to the Executive pursuant to this Agreement, if the Executive's
employment with the Company is terminated for Cause. For purposes solely of
determining whether the Company may terminate the Executive pursuant to this
Section 3(d) without liability to the Executive, the Executive shall be deemed
to have been terminated for "Cause" only if Executive had engaged in fraud,
misappropriation or embezzlement, or any conviction or admission of a felony or
other offense involving dishonest or moral turpitude. Notwithstanding the
foregoing, the Executive shall not be deemed, for purposes of this Agreement, to
have been terminated for Cause unless and until there shall have been delivered
to the Executive a copy of a resolution duly adopted by the affirmative vote of
not less than five-eighths of the entire membership of the Company's Board at a
meeting of the Board called and held for that purpose (after reasonable notice
to the Executive and an opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board), finding that in the good
faith opinion of the Board the Executive was guilty of conduct set forth in the
second sentence of this Section 3(d) and specifying the particulars thereof in
detail.
(e) Good Reason. The Executive may terminate the Executive's
employment for Good Reason at any time after a Change in Control during the
Term. For purposes of this Agreement, "Good Reason" shall mean any of the
following:
2
<PAGE> 3
(i) The Company has materially changed the Executive's
position, duties, responsibilities, status, or offices as in effect immediately
prior to a Change in Control of the Company, or has removed the Executive from
or failed to reelect the Executive to any of such positions;
(ii) A reduction by the Company in the Executive's base salary
as in effect on the date hereof or as the same may be increased from time to
time during the Term.
(iii) Any failure by the Company to continue in effect any
benefit plan or arrangement (including, without limitation, the Company's life
insurance, accident, disability and health insurance plans, 40 1(k) and bonus
plans, stock options, and all other similar plans which are from time to time
made generally available to senior executives/officers of the Company) and in
which the Executive is participating at the time of a Change in Control of the
Company, unless there are substituted therefore plans or arrangements providing
the Executive with essentially equivalent and no less favorable benefits
(hereinafter referred to as "Benefit Plans"), or the taking of any action by the
Company which would adversely affect the Executive's participation in or
materially reduce the Executive's benefits under any such Benefit Plan or
deprive the Executive of any material fringe benefit enjoyed by the Executive at
the time of a Change in Control of the Company;
(iv) Any failure by the Company to continue in effect any
incentive plan or arrangement (including, without limitation, the Company's
plans enumerated in subparagraph (iii) above and similar incentive compensation
benefits) in which the Executive is participating at the time of a Change in
Control of the Company, unless there are substituted therefore plans or
arrangements providing the Executive with essentially equivalent and no less
favorable benefits (hereinafter referred to as "Incentive Plans"), or the taking
of any action by the Company which would adversely affect the Executive's
participation in any such Incentive Plan or reduce the Executive's potential
benefits under any such Incentive Plan, expressed as a percentage of his base
salary, by more than 10 percentage points in any fiscal year as compared to the
immediately preceding fiscal year;
(v) Any failure by the Company to continue in effect any plan
or arrangement to receive securities of the Company (including, without
limitation, the Company's stock option and purchase plans and any other plan or
arrangement to receive and exercise stock options, stock appreciation rights,
restricted stock or grants thereof) in which the Executive is participating at
the time of a Change in Control of the Company, unless there are substituted
therefor plans or arrangements providing the Executive with essentially
equivalent and no less favorable (hereinafter referred to as "Securities
Plans"), or the taking of any action by the Company which would adversely affect
the Executive's participation in or materially reduce the Executive's benefits
under any such Securities Plan;
(vi) The Executive's relocation to any place other than the
location at which the Executive performed the Executive's duties prior to a
Change in Control of the Company, except for required travel by the Executive on
the Company's business to an extent substantially consistent with the
Executive's business travel obligations during the 12 months immediately
preceding a Change of Control of the Company;
(vii) Any failure by the Company to provide the Executive with
the number of paid vacation days to which the Executive is entitled at the time
of a Change of Control of the Company;
3
<PAGE> 4
(viii) Any material breach by the Company of any provision of
this Agreement;
(ix) Any failure by the Company to obtain the assumption of
this Agreement by any successor or assignee of the Company; or
(x) Any purported termination of the Executive's employment
that is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 3(f), and for purposes of this Agreement, no such
purported termination shall be effective.
(f) Notice of Termination. Any termination of the Executive by
the Company for Disability pursuant to Section 3(b) or for Cause pursuant to
Section 3(d) shall be communicated by a Notice of Termination. For purposes of
this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate those specific termination provisions in this Agreement relied
upon and which set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provisions so indicated. For purposes of this Agreement, no such purported
termination by the Company shall be effective without such Notice of
Termination.
(g) Date of Termination. "Date of Termination" shall mean (i) if
the Executive is terminated by the Company for Disability, 30 days after Notice
of Termination is given to the Executive (provided that the Executive shall not
have returned to the performance of the Executive's duties on a full-time basis
during such 30-day period) or (ii) if the Executive is terminated by the Company
for any other reason, the date on which a Notice of Termination is given;
provided that if within 30 days after any Notice of Termination is given to the
Executive by the Company the Executive notifies the Company that a dispute
exists concerning the termination, the Date of Termination shall be the date the
dispute is finally determined, whether by mutual agreement by the parties or
upon final judgment, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been perfected).
4. Severance Compensation upon Termination of Employment. Subject to
Section 4(e) below, if, within twenty-four (24) months following a Change in
Control, the Company shall terminate the Executive's employment other than
pursuant to Section 3(b), 3(c) or 3(d),or if the Executive terminates his
employment for Good Reason pursuant to Section 3(e), then:
(a) Severance Payment. The Company shall pay to the Executive as
severance pay a lump sum, in cash, in full on the fifth day following the Date
of Termination an amount equal to (i) the Executive's highest annual base salary
in effect during the 12-month period immediately preceding the Date of
Termination, and (ii) a lump sum payment of the Executive's incentive
compensation bonus that would otherwise be payable to Executive under the
Company's Bonus Plan then in effect for the year in which the Date of
Termination occurred assuming one hundred percent (100%) satisfaction of all
performance goals established under such Bonus Plan for the Executive,
multiplied by 1.0. The foregoing payment shall be in addition to any payments or
other compensation that would otherwise be payable to executives under any other
then existing Severance Plan of the Company. All payments hereunder shall be
made net of withholdings required by applicable federal, state or local laws.
(b) Stock Options. All stock options not currently exercisable
held by the Executive will accelerate and become exercisable as of the Date of
Termination.
4
<PAGE> 5
(c) Restricted Stock. All restrictions on any restricted stock,
including without limitation any vesting requirements on any unvested stock,
held by the Executive as of the Date of Termination shall be removed.
(d) Continuation of Benefits. The Company shall continue for a
period of one year from the Date of Termination to provide the following
benefits to the Executive on the same terms as provided to the Executive on the
Date of Termination:
(i) Participation in the Company's medical, dental and vision
plans;
(ii) Long-term disability insurance;
(iii) Life Insurance.
Notwithstanding the foregoing, any benefits payable under this subsection 4(d)
shall terminate at such time as the Executive becomes eligible for similar
benefits from any subsequent employer; provided, however that at the end of the
period of coverage hereinabove provided for, the Executive shall have the option
to have assigned to the Executive at no cost and with no apportionment of
prepaid premiums, any assignable insurance owned by the Company and relating
specifically to the Executive.
(e) Limitation. To the extent that any or all of the payments and
benefits provided for in this Agreement constitute "parachute payments" within
the meaning of Section 280G of the Internal Revenue Code (the "Code") and, but
for this Section 4(e), would be subject to the excise tax imposed by Section
4999 of the Code, then the aggregate amount of such payments and benefits shall
be reduced such that the present value thereof (as determined under the Code and
applicable regulations) is equal to 2.99 times the Executive's "base amount" (as
defined in the Code).
The determination of any reduction or increase of any payment or benefits under
this Section 4 pursuant to the foregoing provision shall be made by a nationally
recognized public accounting firm chosen by the Company in good faith, and such
determination shall be conclusive and binding on the Company and the Executive.
5. No Obligation to Mitigate Damages; No Effect on Other Contractual
Rights.
(a) No Obligation to Mitigate. The Executive shall not be
required to mitigate damages or the amount of any payment provided for under
this Agreement by seeking other employment or otherwise, nor, except as set
forth in Section 4(d), shall the amount of any payment provided for under this
Agreement be reduced by any compensation earned by the Executive as the result
of employment by another employer after the Date of Termination, or otherwise.
(b) No Effect on Other Contractual Rights. The provisions of this
Agreement, and any payment provided for hereunder, shall not reduce any amounts
otherwise payable, or in any way diminish the Executive's existing rights, or
rights which would accrue solely as a result of the passage of time, under any
Benefit Plan, Incentive Plan or Securities Plan, employment agreement or other
contract, plan or arrangement.
5
<PAGE> 6
6. Successors and Assigns.
(a) The Company. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor or assignee to its
business and/or assets as aforesaid which assumes the obligations of the Company
under this Agreement or which otherwise becomes bound by all of the terms and
provisions of this Agreement by operation of law. If at any time during the term
of this Agreement the Executive is employed by any corporation a majority of the
voting securities of which is then owned by the Company, such indirect
employment of the Executive by the Company shall not excuse the Company from
performing its obligations under this Agreement as if the Executive were
directly employed by the Company, and the Company agrees that it shall pay or
shall cause such employer to pay any amounts owed to the Executive pursuant to
Section 4 hereof, notwithstanding any such indirect employment relationship.
(b) The Executive. This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts are still payable to him
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's devisee, legatee,
or other designee or, if there be no such designee, to the Executive's estate.
7. Notice. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered, one business day after being sent
for overnight delivery by a nationally recognized overnight courier or three
business days after being mailed by United States registered mail,
return-receipt requested, postage-prepaid, addressed as follows:
If to the Company:
Vice President
Datum Inc.
Datum-Austin
15811 Vision Drive
Pflugerville, TX 78660
If to the Executive:
30305 Live Oak Trail
Georgetown, TX 78628
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
8. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which
6
<PAGE> 7
are not set forth expressly in this Agreement. This Agreement shall be governed
by and construed in accordance with the laws of the State of California.
9. Validity. The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
11. Arbitration, Legal Fees and Expenses. In the event of any
controversy, claim or dispute between the parties hereto arising out of or
relating to this Agreement, the matter shall be determined by arbitration, which
shall take place in Orange County, California, under the rules of the American
Arbitration Association; and judgment upon such award may be entered in any
court having jurisdiction thereof. Any decision or award of such arbitrator
shall be final and binding upon the parties and shall not be appealable. The
parties hereby consent to the jurisdiction of such arbitrator and of any court
having jurisdiction to enter judgment upon and enforce any action taken by such
arbitrator. The Company shall pay all legal fees and expenses that the Executive
may incur as a result of the Company's contesting the validity, enforceability
or the executive's interpretation of, or determinations under, this Agreement.
12. Confidentiality. The Executive shall retain in confidence any and
all confidential information known to the Executive concerning the Company and
its business so long as such information is not otherwise publicly disclosed.
13. Entire Agreement. This Agreement contains all of the terms agreed
upon between the Executive and the Company with respect to the subject matter
hereof and replaces and supersedes all prior severance agreements between the
Executive and the Company. The Executive and the Company agree that no term,
provision or condition of this Agreement shall be held to be altered, amended,
changed or waived in any respect except as evidenced by written agreement of the
Executive and the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
"COMPANY" "EXECUTIVE"
DATUM, INC.
By: /s/ Dan L. McGurk By: /s/ John R. Rice
-------------------------------- --------------------------------
Name: Dan L. McGurk Name: John R. Rice
Title: Chairman of the Compensation Title: Vice President
Committee
7
<PAGE> 1
EXHIBIT 10.52
SEVERANCE COMPENSATION AGREEMENT
DATED AS OF OCTOBER 29, 1999
BETWEEN
DATUM INC., A DELAWARE CORPORATION, (THE "COMPANY")
AND
RAYMOND L. WAGUESPACK (THE "EXECUTIVE")
The Company's Board of Directors (the "Board") has determined that it
is appropriate to reinforce and encourage the continued attention and dedication
of members of the Company's management, including the Executive, to their
assigned duties without distraction in potentially disturbing circumstances
arising from the possibility of a change in control of the Company.
This Agreement sets forth the severance compensation which the Company
agrees it will pay to the Executive if the Executive's employment with the
Company terminates under one of the circumstances described herein following a
"Change in Control" of the Company (as defined in Section 2).
1. Term. The term ("Term") of this Agreement shall commence on the date
hereof and, subject to earlier termination pursuant to Section 3(b), 3(c) or
3(d) hereof, shall end three (3) years following the date on which notice of
non-renewal or termination of this Agreement is given by either the Company or
Executive to the other. Thus, this Agreement shall be renewable automatically on
a daily basis so that the outstanding Term is always three (3) years following
any effective notice of non-renewal or of termination given by the Company or
Executive.
2. Change in Control. No compensation shall be payable under this
Agreement unless and until (a) there has been a Change in Control of the Company
while the Executive is still an employee of the Company and (b) the Executive's
employment by the Company terminates in the circumstances specified in Section
3(a). For purposes of this Agreement, a "Change in Control" of the Company shall
be deemed to have occurred if (i) there shall be consummated (x) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which shares of the Company's
Common Stock would be converted into cash, securities or other property, other
than a consolidation or merger of the Company in which the holders of the
Company's Common Stock immediately prior to the consolidation or merger have
substantially the same proportionate ownership of at least 65% of common stock
of the surviving corporation immediately after the consolidation or merger, or
(y) any sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all, or substantially all, of the assets of the
Company other than to a corporation in which the holders of the Company's Common
Stock immediately prior to such transaction have substantially the same
proportionate ownership of at least 65% of the common stock of such corporation,
or (ii) the stockholders of the Company approve any plan or proposal for the
liquidation or dissolution of the Company, or (iii) any person (as such term is
used in Sections 13(d) and 1 4(d)(2) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), shall become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of more than 35% of the Company's
outstanding shares of Common Stock, or (iv) during any period of two consecutive
years during the term of this Agreement, individuals who at the beginning of the
two year period constituted the entire Board do not for any reason constitute a
majority thereof unless the election, or the nomination for election by the
Company's stockholders,
<PAGE> 2
of each new director was approved by a vote of at least five-eighths of the
directors then still in office who were directors at the beginning of the
period.
3. Termination Following Change in Control.
(a) Termination. If a Change in Control of the Company shall have
occurred while the Executive is still an employee of the Company, the Executive
shall be entitled to the compensation provided in Section 4 upon the subsequent
termination of the Executive's employment with the Company within twenty four
(24) months of such Change in Control, whether requested by the Executive or by
the Company, unless such termination is as a result of (i) the Executive's
death; (ii) the Executive's Disability (as defined in Section (3)(b) below);
(iii) the Executive's Retirement (as defined in Section 3(c) below); (iv) the
Executive's termination by the Company for Cause (as defined in Section 3(d)
below); or (v) the Executive's decision to terminate employment other than for
Good Reason (as defined in Section 3(e) below).
(b) Death or Disability. If, as a result of the Executive's
incapacity due to physical or mental illness, the Executive is absent from his
duties with the Company on a full-time basis for six months, the Company may
elect to terminate the Executive for "Disability" by written notice to Executive
and without liability to Executive pursuant to this Agreement; provided,
however, that any such termination shall be effective only at the end of thirty
(30) days following the delivery of such notice and only if Executive fails to
return to the full-time performance of duties by the end of such 30-day notice
period. In addition, this Agreement shall terminate immediately in the event of
the death of the Executive occurring at any time during the Term hereof, and in
such event the Company shall have no liability by reason of such termination.
(c) Retirement. The Executive shall be deemed terminated
automatically, without liability to Executive pursuant to this Agreement, upon
Retirement (as hereinafter defined) of Executive without liability to the
Company pursuant to this Agreement. "Retirement" as used in this Agreement shall
be deemed to occur upon the Executive's having reached such age as shall have
been fixed in any arrangement mutually established by the Company and the
Executive.
(d) Cause. The Company may terminate the Executive, without
liability to the Executive pursuant to this Agreement, if the Executive's
employment with the Company is terminated for Cause. For purposes solely of
determining whether the Company may terminate the Executive pursuant to this
Section 3(d) without liability to the Executive, the Executive shall be deemed
to have been terminated for "Cause" only if Executive had engaged in fraud,
misappropriation or embezzlement, or any conviction or admission of a felony or
other offense involving dishonest or moral turpitude. Notwithstanding the
foregoing, the Executive shall not be deemed, for purposes of this Agreement, to
have been terminated for Cause unless and until there shall have been delivered
to the Executive a copy of a resolution duly adopted by the affirmative vote of
not less than five-eighths of the entire membership of the Company's Board at a
meeting of the Board called and held for that purpose (after reasonable notice
to the Executive and an opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board), finding that in the good
faith opinion of the Board the Executive was guilty of conduct set forth in the
second sentence of this Section 3(d) and specifying the particulars thereof in
detail.
(e) Good Reason. The Executive may terminate the Executive's
employment for Good Reason at any time after a Change in Control during the
Term. For purposes of this Agreement, "Good Reason" shall mean any of the
following:
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(i) The Company has materially changed the Executive's
position, duties, responsibilities, status, or offices as in effect immediately
prior to a Change in Control of the Company, or has removed the Executive from
or failed to reelect the Executive to any of such positions;
(ii) A reduction by the Company in the Executive's base salary
as in effect on the date hereof or as the same may be increased from time to
time during the Term.
(iii) Any failure by the Company to continue in effect any
benefit plan or arrangement (including, without limitation, the Company's life
insurance, accident, disability and health insurance plans, 401(k) and bonus
plans, stock options, and all other similar plans which are from time to time
made generally available to senior executives/officers of the Company) and in
which the Executive is participating at the time of a Change in Control of the
Company, unless there are substituted therefore plans or arrangements providing
the Executive with essentially equivalent and no less favorable benefits
(hereinafter referred to as "Benefit Plans"), or the taking of any action by the
Company which would adversely affect the Executive's participation in or
materially reduce the Executive's benefits under any such Benefit Plan or
deprive the Executive of any material fringe benefit enjoyed by the Executive at
the time of a Change in Control of the Company;
(iv) Any failure by the Company to continue in effect any
incentive plan or arrangement (including, without limitation, the Company's
plans enumerated in subparagraph (iii) above and similar incentive compensation
benefits) in which the Executive is participating at the time of a Change in
Control of the Company, unless there are substituted therefore plans or
arrangements providing the Executive with essentially equivalent and no less
favorable benefits (hereinafter referred to as "Incentive Plans"), or the taking
of any action by the Company which would adversely affect the Executive's
participation in any such Incentive Plan or reduce the Executive's potential
benefits under any such Incentive Plan, expressed as a percentage of his base
salary, by more than 10 percentage points in any fiscal year as compared to the
immediately preceding fiscal year;
(v) Any failure by the Company to continue in effect any plan
or arrangement to receive securities of the Company (including, without
limitation, the Company's stock option and purchase plans and any other plan or
arrangement to receive and exercise stock options, stock appreciation rights,
restricted stock or grants thereof) in which the Executive is participating at
the time of a Change in Control of the Company, unless there are substituted
therefor plans or arrangements providing the Executive with essentially
equivalent and no less favorable (hereinafter referred to as "Securities
Plans"), or the taking of any action by the Company which would adversely affect
the Executive's participation in or materially reduce the Executive's benefits
under any such Securities Plan;
(vi) A relocation of the Company's principal executive offices
to a location outside of Orange County, California, or the Executive's
relocation to any place other than the location at which the Executive performed
the Executive's duties prior to a Change in Control of the Company, except for
required travel by the Executive on the Company's business to an extent
substantially consistent with the Executive's business travel obligations during
the 12 months immediately preceding a Change of Control of the Company;
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(vii) Any failure by the Company to provide the Executive with
the number of paid vacation days to which the Executive is entitled at the time
of a Change of Control of the Company;
(viii) Any material breach by the Company of any provision of
this Agreement;
(ix) Any failure by the Company to obtain the assumption of
this Agreement by any successor or assignee of the Company; or
(x) Any purported termination of the Executive's employment
that is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 3(f), and for purposes of this Agreement, no such
purported termination shall be effective.
(f) Notice of Termination. Any termination of the Executive by
the Company for Disability pursuant to Section 3(b) or for Cause pursuant to
Section 3(d) shall be communicated by a Notice of Termination. For purposes of
this Agreement, a "Notice of Termination" shall mean a written notice which
shall indicate those specific termination provisions in this Agreement relied
upon and which set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provisions so indicated. For purposes of this Agreement, no such purported
termination by the Company shall be effective without such Notice of
Termination.
(g) Date of Termination. "Date of Termination" shall mean (i) if
the Executive is terminated by the Company for Disability, 30 days after Notice
of Termination is given to the Executive (provided that the Executive shall not
have returned to the performance of the Executive's duties on a full-time basis
during such 30-day period) or (ii) if the Executive is terminated by the Company
for any other reason, the date on which a Notice of Termination is given;
provided that if within 30 days after any Notice of Termination is given to the
Executive by the Company the Executive notifies the Company that a dispute
exists concerning the termination, the Date of Termination shall be the date the
dispute is finally determined, whether by mutual agreement by the parties or
upon final judgment, order or decree of a court of competent jurisdiction (the
time for appeal therefrom having expired and no appeal having been perfected).
4. Severance Compensation upon Termination of Employment. Subject to
Section 4(e) below, if, within twenty-four (24) months following a Change in
Control, the Company shall terminate the Executive's employment other than
pursuant to Section 3(b), 3(c) or3(d), or if the Executive terminates his
employment for Good Reason pursuant to Section 3(e), then:
(a) Severance Payment. The Company shall pay to the Executive as
severance pay a lump sum, in cash, in full on the fifth day following the Date
of Termination an amount equal to (i) the Executive's highest annual base salary
in effect during the 12-month period immediately preceding the Date of
Termination, and (ii) a lump sum payment of the Executive's incentive
compensation bonus that would otherwise be payable to Executive under the
Company's Bonus Plan then in effect for the year in which the Date of
Termination occurred assuming one hundred percent (100%) satisfaction of all
performance goals established under such Bonus Plan for the Executive,
multiplied by 1.0. The foregoing payment shall be in addition to any payments or
other compensation that would otherwise be payable to executives under any other
then existing Severance
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Plan of the Company. All payments hereunder shall be made net of withholdings
required by applicable federal, state or local laws.
(b) Stock Options. All stock options not currently exercisable
held by the Executive will accelerate and become exercisable as of the Date of
Termination.
(c) Restricted Stock. All restrictions on any restricted stock,
including without limitation any vesting requirements on any unvested stock,
held by the Executive as of the Date of Termination shall be removed.
(d) Continuation of Benefits. The Company shall continue for a
period of one year from the Date of Termination to provide the following
benefits to the Executive on the same terms as provided to the Executive on the
Date of Termination:
(i) Participation in the Company's medical, dental and vision
plans;
(ii) Long-term disability insurance;
(iii) Life Insurance.
Notwithstanding the foregoing, any benefits payable under this subsection 4(d)
shall terminate at such time as the Executive becomes eligible for similar
benefits from any subsequent employer; provided, however, that at the end of the
period of coverage hereinabove provided for, the Executive shall have the option
to have assigned to the Executive at no cost and with no apportionment of
prepaid premiums, any assignable insurance owned by the Company and relating
specifically to the Executive.
(e) Limitation. To the extent that any or all of the payments and
benefits provided for in this Agreement constitute "parachute payments" within
the meaning of Section 280G of the Internal Revenue Code (the "Code") and, but
for this Section 4(e), would be subject to the excise tax imposed by Section
4999 of the Code, then the aggregate amount of such payments and benefits shall
be reduced such that the present value thereof (as determined under the Code and
applicable regulations) is equal to 2.99 times the Executive's "base amount" (as
defined in the Code).
The determination of any reduction or increase of any payment or benefits under
this Section 4 pursuant to the foregoing provision shall be made by a nationally
recognized public accounting firm chosen by the Company in good faith, and such
determination shall be conclusive and binding on the Company and the Executive.
5. No Obligation to Mitigate Damages: No Effect on Other Contractual
Rights.
(a) No Obligation to Mitigate. The Executive shall not be
required to mitigate damages or the amount of any payment provided for under
this Agreement by seeking other employment or otherwise, nor, except as set
forth in Section 4(d), shall the amount of any payment provided for under this
Agreement be reduced by any compensation earned by the Executive as the result
of employment by another employer after the Date of Termination, or otherwise.
(b) No Effect on Other Contractual Rights. The provisions of this
Agreement, and any payment provided for hereunder, shall not reduce any amounts
otherwise payable, or in any way diminish the Executive's existing rights, or
rights which would accrue solely as a result of the
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passage of time, under any Benefit Plan, Incentive Plan or Securities Plan,
employment agreement or other contract, plan or arrangement.
6. Successors and Assigns.
(a) The Company. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor or assignee to its
business and/or assets as aforesaid which assumes the obligations of the Company
under this Agreement or which otherwise becomes bound by all of the terms and
provisions of this Agreement by operation of law. If at any time during the term
of this Agreement the Executive is employed by any corporation a majority of the
voting securities of which is then owned by the Company, such indirect
employment of the Executive by the Company shall not excuse the Company from
performing its obligations under this Agreement as if the Executive were
directly employed by the Company, and the Company agrees that it shall pay or
shall cause such employer to pay any amounts owed to the Executive pursuant to
Section 4 hereof, notwithstanding any such indirect employment relationship.
(b) The Executive. This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal and legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees. If the Executive should die while any amounts are still payable to him
hereunder, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's devisee, legatee,
or other designee or, if there be no such designee, to the Executive's estate.
7. Notice. For purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered, one business day after being sent
for overnight delivery by a nationally recognized overnight courier or three
business days after being mailed by United States registered mail,
return-receipt requested, postage-prepaid, addressed as follows:
If to the Company:
Vice President
Datum Inc.
9975 Toledo
Irvine, California 92612
If to the Executive:
4943 Tilos Way
Oceanside, CA 92056
or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
8. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the
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same or at any prior or subsequent time. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this Agreement.
This Agreement shall be governed by and construed in accordance with the laws of
the State of California.
9. Validity. The invalidity or unenforceability of any provisions of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
10. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
11. Arbitration, Legal Fees and Expenses. In the event of any
controversy, claim or dispute between the parties hereto arising out of or
relating to this Agreement, the matter shall be determined by arbitration, which
shall take place in Orange County, California, under the rules of the American
Arbitration Association; and a judgment upon such award may be entered in any
court having jurisdiction thereof. Any decision or award of such arbitrator
shall be final and binding upon the parties and shall not be appealable. The
parties hereby consent to the jurisdiction of such arbitrator and of any court
having jurisdiction to enter judgment upon and enforce any action taken by such
arbitrator. The Company shall pay all legal fees and expenses that the Executive
may incur as a result of the Company's contesting the validity, enforceability
or the executive's interpretation of, or determinations under, this Agreement.
12. Confidentiality. The Executive shall retain in confidence any and
all confidential information known to the Executive concerning the Company and
its business so long as such information is not otherwise publicly disclosed.
13. Entire Agreement. This Agreement contains all of the terms agreed
upon between the Executive and the Company with respect to the subject matter
hereof and replaces and supersedes all prior severance agreements between the
Executive and the Company. The Executive and the Company agree that no term,
provision or condition of this Agreement shall be held to be altered, amended,
changed or waived in any respect except as evidenced by written agreement of the
Executive and the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
"COMPANY" "EXECUTIVE"
DATUM, INC.
By: /s/ Dan L. McGurk By: /s/ Raymond L. Waguespack
-------------------------------- --------------------------------
Name: Dan L. McGurk Name: Raymond L. Waguespack
Title: Chairman of the Compensation Title: Vice President
Committee
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