Exhibit 10.2
AGREEMENT
          This Agreement is entered into by and between SafeNet, Inc.
(“SafeNet”) and Carole Argo (“Argo”), the President and Chief Operating Officer
of SafeNet.
          In consideration of the covenants undertaken and contained herein, the
adequacy of which is herein acknowledged, the parties agree as follows:
          1. In accordance with Section 8(a) of the Employment Agreement between
Argo and SafeNet, dated June 28, 2004 (“Employment Agreement”), this Agreement
shall serve as notice of the termination of Argo’s employment under the
Employment Agreement, with such termination to become effective on December 31,
2006 (the “Separation Date”). In addition, Argo hereby resigns effective
October 17, 2006 from any and all officer positions she holds with SafeNet,
including her position as President and Chief Operating Officer of SafeNet and
her positions as an officer, employee or Board member of any SafeNet subsidiary.
In addition, Argo resigns effective October 17, 2006 from all fiduciary and
trustee responsibilities, including but not limited to any employee benefit
plans of the Company and its Affiliates, and SafeNet will take all steps
necessary to effectuate her resignations.
          2. Argo will remain as an employee of SafeNet and will consult with
SafeNet on the management transition during the period referred to in Section 1.
In consideration for those services, Safenet will pay to Argo her base salary
and provide her use of her automobile and family medical and dental, disability
and life insurance through the Separation Date. At the Separation Date, SafeNet
will pay any unpaid base salary and accrued vacation through the Separation
Date. Except as otherwise provided herein or in the Employment Agreement, as of
the Separation Date Argo will be eligible to receive the benefits provided to
former employees of SafeNet under SafeNet’s employee benefit plans, in
accordance with the terms and conditions of each such plan.
          3. Both Argo and SafeNet reserve all rights under the Employment
Agreement.
          4. SafeNet will not consider, at this time, this Agreement as a
resignation within the meaning of Section 9(b) of the Employment Agreement or,
except as expressly provided herein, for any other purpose relating to the
Employment Agreement.
          5. The Personnel Committee of the SafeNet Board of Directors will
determine by March 29, 2007 (“Decision Date”) whether Argo should be treated as
having been terminated for Cause under the Employment Agreement. None of the
periods of time set forth in the Employment Agreement within which events must
occur or actions must be taken shall begin to run until the Personnel Committee
determines whether Argo should be considered to have been terminated for Cause
(provided that any required six-month waiting period under Section 409A of the
Internal Revenue Code of 1986, as amended, shall begin to run as of the
Separation Date), except as expressly

 

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provided herein. SafeNet and Argo agree that no statutes of limitations on any
claims Argo or SafeNet may have under the Employment Agreement shall begin to
run until the Decision Date or such earlier date as the Personnel Committee
determines whether Argo should be considered to have been terminated for Cause.
Subject to the foregoing sentences of this Section 5, if the Personnel Committee
determines that Argo should be considered to have been terminated for Cause,
that determination will have the same effect under the Employment Agreement as
if Argo had been terminated for Cause as of the date of this Agreement, except
for purposes of payment of salary and benefits in Section 2. If the Personnel
Committee fails to make a decision by the Decision Date, Argo will be deemed to
have been terminated by SafeNet without Cause (or to have terminated her
employment for Good Reason) as of the date of this Agreement, with entitlement
to all the rights and the benefits provided for in the Employment Agreement,
except for purposes of payment of salary and benefits in Section 2.
          6. Any payments or benefits to which Argo may be due under Sections 5
and 9 of the Employment Agreement (other than the payments and benefits provided
by Section 2 of this Agreement and existing health care benefits subject to
COBRA, for which the Company will pay all costs, excluding Argo’s co-payment
(and that of any eligible spouse or dependents), for one year following the
Separation Date) shall not become due until ten days after the Personnel
Committee determines whether Argo should be considered to have been terminated
for Cause, and shall be due at that time only if the Personnel Committee does
not determine that Argo should be considered to have been terminated for Cause;
provided, however, that the foregoing shall not cause Argo to forfeit or waive
any claim for benefits she may have under a plan, policy or arrangement that is
an “employee benefit plan” within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended. Argo agrees that she will
not exercise any options on SafeNet stock until the Decision Date or such
earlier date on which the Personnel Committee reaches its decision under
Section 5 of this Agreement, except that with respect to any options for which
the Company does not take a compensation charge in connection with its
restatement of its 2000 through 2005 and first quarter 2006 financial results
she may participate in a Change of Control, as defined in Section 18(b) of the
Employment Agreement, or other sale of business transaction in the same manner
as other option holders. If such a Change in Control or other sale of business
transaction occurs before the Decision Date, the parties agree to negotiate
which of the options for which the change of measurement date would result in a
higher strike price Argo may exercise with the goal to avoid any unreasonable
forfeiture of unexercised options by Argo while maintaining the Company’s
interests, including receiving an option price consistent with the conclusions
of its restatement process. For purposes of Argo’s stock option agreements and
the Company’s Stock Option Plans, Argo will be deemed to have been terminated on
the Separation Date. As such, any cancellation clauses will begin to run from
the Separation Date. SafeNet agrees that the foregoing restrictions on exercise
of Argo’s stock options shall not apply to those options granted on January 1,
2000. SafeNet agrees that Argo may exercise any options for which the Company
does not take a compensation charge, once the Company has made its determination
related to its restatement of financial results.

 

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          7. Argo and SafeNet waive their right to notice of any termination for
Cause or Good Reason under Section 8(a) and 8(b) of the Employment Agreement.
          8. Argo’s resignation under this Agreement will not affect any
advancement of fees or indemnification to which she otherwise would be entitled
under applicable state law, under the Articles of Incorporation and Bylaws of
SafeNet, under the Employment Agreement, or under any other applicable
agreement. SafeNet also agrees that all such rights to indemnification shall
apply to any claims relating to or arising from her employment from the date of
this Agreement through the Separation Date.
          9. Argo and the Special Committee of the SafeNet Board of Directors
and the Personnel Committee will attempt to reach agreement on any amount to be
paid or repaid to SafeNet by Argo, and any amount to be paid by SafeNet to Argo,
in connection with the Employment Agreement and with respect to any actual or
potential claims arising out of the process of granting stock options at SafeNet
(and the accounting for and disclosure of such stock option grants) or any other
claims asserted against Argo in stockholder derivative actions and any actual or
potential claims Argo may assert against SafeNet. To the extent that any
agreement between the parties under this paragraph contains a release of claims
asserted against Argo in pending stockholder derivative actions, the parties
agree that such a release shall be subject to approval by the appropriate courts
in which stockholder derivative actions are pending.
          10. For a six-month period following the Separation Date (the
“Post-Employment Period”), Argo will refrain from directly or indirectly
soliciting the Company’s current vendors, customers or employees, or prospective
vendors, customers or employees whose identity became or becomes known to Argo
as a result of her position at SafeNet. During the Post-Employment Period, Argo
will not participate in, be employed in any capacity by, serve as a director,
consultant, agent or representative for, or have any interest, directly or
indirectly (other than a passive ownership interest of up to 5% in any publicly
traded company’s stock), in any enterprise whose primary business is encryption
based security. As of the Separation Date, the noncompetition obligations set
forth in the Employment Agreement are no longer of force and effect and are
replaced by the provisions in this Section 10.
          11. SafeNet and Argo agree that Argo shall be provided a reasonable
opportunity to review and comment on SafeNet’s proposed public statement
relating to this Agreement and her separation from SafeNet; provided that
SafeNet shall not be obligated to make any changes to such public statement
based on any comments received from Argo.
          12. Nothing contained in this Agreement shall be deemed as an
admission by any party.

 

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          13. This Agreement shall not be deemed to constitute a waiver of any
rights, claims or defenses of any of the parties to this Agreement, all of which
are expressly preserved. Preserved rights and claims include, but are not
limited to, SafeNet’s ability to assert termination for Cause and Argo’s ability
to assert termination without Cause or for Good Reason or to assert she
terminated her employment in accordance with Section 9(b) of the Employment
Agreement; provided, however, that Argo agrees that any assertion of termination
without Cause or for Good Reason shall be effective as of the date of this
Agreement, and that such assertion shall not be made before the Decision Date.
This Agreement does not constitute a release of any claims that either party may
have against the other.
          14. This Agreement can be modified only in writing signed by the
parties. The Agreement shall constitute the entire understanding between the
parties concerning the subject matter of this Agreement and supersedes and
replaces all prior negotiations, proposed agreements, and agreements, written or
oral, relating to this subject.
          15. Both parties agree to cooperate with the other in taking the
actions required under the terms of this Agreement, including without limitation
those described in paragraphs 1 and 9 hereof.
          16. Both parties have cooperated in the drafting and preparation of
this Agreement. Hence, in any construction to be made of this Agreement, the
same shall not be construed against any party on the basis that the party was
the drafter.
          17. This Agreement may be executed in one or more counterparts, each
of which shall constitute an original, and all of which shall constitute one
instrument.
          18. In entering this Agreement, the parties represent that they have
relied upon the advice of their attorneys, who are attorneys of their own
choice, and that the terms of this Agreement have been completely read and
explained to them by their attorneys, and that those terms are fully understood
and voluntarily accepted by them.
          19. To the fullest extent allowed by law, any controversy or claim
arising out of or relating to this Agreement shall be settled by binding and
non-appealable arbitration conducted in Baltimore, Maryland, or such other place
as the parties hereto agree, by an arbitrator acting in accordance with the
Employment Arbitration rules of the American Arbitration Association. To the
extent anything in this Agreement conflicts with any arbitration procedures
required by applicable law, the arbitration procedures required by applicable
law shall govern. The proceedings before the arbitrator shall be maintained in
the strictest confidence by the parties and the arbitrator, subject only to
legal requirements of disclosure. The arbitrator shall issue a written award
that sets forth the essential findings and conclusions on which the award is
based. The arbitrator shall have the authority to award any relief authorized by
law in connection with the asserted claims or disputes. The arbitration award
shall be enforceable before any court of competent jurisdiction, and shall be
subject to correction, confirmation or vacatur only on the grounds provided by
applicable law, including the Federal Arbitration Act. Nothing in this paragraph
shall be construed to apply to or affect pending stockholder derivative actions
brought on behalf of the Company.

 

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          20. SafeNet and Argo will share equally the arbitrator’s fees and any
other expense of conducting the arbitration. Each party will pay its own
attorney’s fees and costs, except that the arbitrator may award the prevailing
party reimbursement from the opposing party or parties of its reasonable fees
(including attorneys’ fees) and expenses she or it may incur in connection with
such arbitration. Any final decision of the arbitrator so chosen may be enforced
by a court of competent jurisdiction.
          Each of the undersigned have read the foregoing Agreement, and accepts
and agrees to the provisions it contains and hereby executes it voluntarily with
full understanding of its consequences.

          SafeNet, Inc.    
 
       
By:
  /s/ Walter Straub    
Title:
 
 
Personnel Committee Chairman    
 
       
Dated:
       
 
       
By:
  /s/ Andrew E. Clark    
 
       
Title:
  Special Committee Chairman    
 
       
Dated:
  October 17, 2006    
 
       
By:
  /s/ Carole Argo    
 
        Carole Argo    
 
       
Dated:
  10/16/06