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                                                                   Exhibit 10(u)


[RAINBOW TECHNOLOGIES LOGO]

EMPLOYMENT AGREEMENT between Rainbow Technologies, Inc., (the "Corporation"),
and Wang Chan (the "Executive"), dated this 20th day of December 2002.

                             W I T N E S S E T H :

      WHEREAS, the Corporation desires to engage Executive to perform services
for the Corporation, and the Executive desires to perform such services, on the
terms and conditions herein set forth.

      NOW THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Corporation and the
Executive as follows:

      1. AT-WILL EMPLOYMENT. Executive understands that this Agreement will also
constitute a written at-will contract that will govern Executive's employment
with the Company. Executive specifically agrees that Executive's employment is
not for a specified term and is rather at the mutual consent of Executive and
the Corporation. Executive's employment is strictly at-will, and Executive may
be discharged with or without cause at any time. Notwithstanding any other
writing, Executive understands that Executive is not employed for any specified
term. Executive may be transferred with mutual agreement by the Executive and
the President of the Corporation. Executive's at-will employment status may be
changed only if there is a written agreement to the contrary signed by both
Executive and by the President of the Corporation. Executive understands that no
oral agreement or statement of any kind can alter Executive's at-will
contractual status. This at-will contract is the entire agreement between
Executive and the Corporation regarding Executive's employment term.

      2. POSITION AND DUTIES. The Executive shall be employed in the business of
the Corporation. As of the date of this Agreement, Executive's duties include
those duties Executive is currently performing as Vice President of the
Corporation. Notwithstanding the duties as described above, Executive agrees
that his duties may be, from time to time, revised or modified by the President
of the Corporation. The Executive agrees to devote his full business time during
normal business hours to the business and affairs of the Corporation and to use
his best efforts to perform faithfully and efficiently the assigned
responsibilities hereunder.

      3. COMPENSATION AND BENEFITS.

      3.1 BASE SALARY. The Corporation will pay Executive a base salary ("Base
Salary"), which will be paid in accordance with the payroll practices of the
Corporation.

      3.2 ANNUAL BONUS. In addition to Base Salary, the Executive shall have an
opportunity to earn an annual management bonus ("Annual Bonus") as established
by the Corporation.

      3.3 INCENTIVE, RETIREMENT AND SAVINGS PLAN. In addition to the Base Salary
and Annual Bonus, the Executive shall be entitled to participate in incentive
and retirement plans and programs ("Incentives"), if any, and as established by
the Corporation provided Executive meets the eligibility requirements.

      3.4 BENEFIT PLANS. The Executive and/or Executive's spouse and dependents,
as the case may be, shall be entitled to all benefits under all medical, dental,
vision, disability, executive life, group life, accidental death and travel
accident insurance plans and programs ("Benefit Plans"), if any, and as
established by the Corporation provided the Executive meets the eligibility
requirements.

      3.5 FRINGE BENEFITS. The Executive and/or Executive's spouse and
dependents, as the case may be, shall be entitled to fringe benefits ("Fringe
Benefits"), if any, and as established by the Corporation provided the Executive
meets the eligibility requirements.

      3.6 VACATION. The Executive shall be entitled to paid vacation in
accordance with the policies established from time to time by the Corporation
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      4. EXPENSES. The Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred or expended by the Executive
in fulfillment of the duties hereunder. Executive shall provide documentation of
such expenses in accordance with the procedures established from time to time by
the Corporation.

      5. TERMINATION.

      5.1 DEATH. The Executive's employment shall terminate automatically upon
the Executive's death ("Death").

      5.2 DISABILITY. The Corporation may terminate the Executive's employment,
after having established the Executive's "Disability" (as defined below), by
giving to the Executive notice of its intention to terminate Executive's
employment effective on the 90th day after such notice (the "Disability
Effective Date") if within such 90-day period the Executive fails to return to
full-time performance of his duties. For purposes of this Agreement,
"Disability" means a disability which, after the expiration of more than 26
weeks after its commencement, is determined to be total and permanent by a
physician selected by the Corporation or the insurers providing disability
insurance to the Company and consented to by the Executive or Executive's legal
representative (such consent not to be withheld unreasonably).

      5.3 CAUSE. The Corporation may terminate the Executive's employment for
Cause ("Cause"). For purposes of this Agreement, "Cause" means (i) an act or
acts of dishonesty on the Executive's part which result in or are intended to
result in Executive's substantial personal enrichment at the expense of the
Corporation or (ii) repeated violations by the Executive of Executive's
obligations under Article 2 of this Agreement, which violations are demonstrably
willful and deliberate on the Executive's part and which were intended to result
in or have resulted in material injury to the Corporation.

      5.4 WITHOUT CAUSE. The President or member of the Corporation's Board of
Directors may terminate the Executive's employment without cause ("Without
Cause") upon 30 days notice.

      5.5 GOOD REASON. The Executive may terminate his/her employment for Good
Reason ("Good Reason"). For purposes of this Agreement, "Good Reason" is defined
as set forth in Articles 5.5.1 through 5.5.3 below.

            5.5.1 ADVERSE CHANGE. Without the express written consent of the
Executive, (i) the assignment to the Executive of any duties inconsistent in any
substantial respect with the Executive's position, authority or responsibilities
as contemplated by Article 2 of this Agreement, or (ii) any other substantial
adverse change in such position including titles, authority or responsibilities.

            5.5.2 FAILURE TO COMPLY. Any failure by the Corporation to comply
with any of the provisions of Article 3 of this Agreement, other than an
insubstantial and inadvertent failure remedied by the Corporation promptly after
receipt of notice thereof given by the Executive.

            5.5.3 FAILURE TO ASSUME. Any failure by the Corporation to obtain
the assumption and agreement to perform this Agreement by a successor as
contemplated by Article 10.

            5.5.4 DETERMINATION OF GOOD REASON. For the purposes of this
Agreement, any final determination of "Good Reason" shall be made solely by the
Corporation's independent auditors.

            5.5.5 GOOD FAITH. In the event that the Executive shall in good
faith give a "Notice of Termination," as hereinafter defined in paragraph 5.8
hereof, for Good Reason and it shall thereafter be determined that Good Reason
and it shall thereafter be determine that Good Reason did not exist, the
employment of the Executive shall, unless the Corporation and the Executive
shall otherwise mutually agree, be deemed to have terminated at the date of the
giving of such purported Notice of Termination. In such event, the Executive
shall be deemed to
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have elected Voluntary Retirement and shall be entitled to receive only those
payments and benefits which he would have been entitled to receive at such date
under Article 6.3 of this Agreement.

      5.6 RESIGNATION. At any time after the effective date of the Agreement,
the Executive may terminate his employment by electing resignation ("Voluntary
Resignation").

      5.7 NOTICE OF TERMINATION. Any termination by the Corporation shall be
communicated by Notice of Termination to the other party hereto given in
accordance with Article 11. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific termination
provision in this Agreement relied upon, (ii) sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated and (iii) if the
termination date is other than the date of receipt of such notice, specifies the
termination date of this Agreement which date shall be in accordance with the
specific termination provision in this Agreement relied upon.

      5.8 DATE OF TERMINATION. Notwithstanding any contrary provision contained
in this Agreement, (i) if the Executive is terminating this Agreement in order
to elect Voluntary Resignation, the Date of Termination shall not be the date of
receipt of such Notice of Termination but shall be a date specified therein,
which date shall be neither less than 30 days nor greater than 90 days after
giving such Notice of Termination; (ii) if the Executive's employment is
terminating due to Disability, the Date of Termination shall be the Disability
Effective Date; (iii) if the Executive's employment terminates due to the
Executive's death, the Date of Termination shall be the date of death; and (iv)
if the Executive's employment is terminated Without Cause, the Date of
Termination shall not be the date of receipt of such Notice of Termination but
shall be a date specified therein, which date shall be not less than 30 days
after giving such Notice of Termination.

      6. OBLIGATIONS OF THE CORPORATION UPON TERMINATION.

      6.1 DEATH. If the Executive's employment is terminated by reason of the
Executive's death, except as described in the next sentence, this Agreement
shall terminate without further obligations to the Executive's legal
representatives under this Agreement other than those obligations accrued
hereunder at the date of Executive's death. Anything in this Agreement to the
contrary notwithstanding, the Executive's spouse and dependents shall be
entitled to continue to receive the benefits under Benefit Plans and Fringe
Benefits through the Term of this agreement.

      6.2 CAUSE. If the Executive's employment shall be terminated for Cause,
the Corporation shall pay the Executive his Base Salary and any other accrued
obligations through the Date of Termination. The Corporation shall have no
further obligations to the Executive under this Agreement.

      6.3 VOLUNTARY RESIGNATION. The Corporation shall have no further
obligation to the Executive under this Agreement. If the Executive elects
Voluntary Resignation. The Corporation shall pay the Executive his Base Salary
and any other accrued obligations through the Date of Termination.

      6.4 GOOD REASON, WITHOUT CAUSE AND DISABILITY. If the Corporation shall
terminate the Executive's employment either Without Cause or for Disability;

            6.4.1 PAYMENTS. The Corporation shall pay to the Executive the
aggregate of the amounts determined pursuant to Articles 6.4.1 (i) and
6.4.1(ii):

            (i) if not already paid, the Executive's Base Salary and accrued
obligations through the Date of Termination, to be paid within 30 days after the
Date of Termination;

            (ii) 100% of the Executive's "Base Amount." Base Amount is the
highest three year average of the aggregate of the Executive's Annual Base
Salary, Commissions (if applicable) and Annual Bonus paid or due to Executive in
the last five fiscal years prior to the year in which termination occurred.
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Said 100% of the Base Amount shall be paid to the Executive in 12 equal monthly
installments commencing within 30 days after the Date of Termination.

            6.4.2 STOCK OPTIONS. All stock options and stock appreciation
rights, if any, granted to the Executive, which are not exercisable at the Date
of Termination, shall become fully exercisable as of the Date of Termination.
Options not exercised within 90 days from Date of Termination will expire.

            6.4.3 BENEFITS. For 12 months subsequent to the Date of Termination,
the Corporation shall continue Benefit Plans and Fringe Benefits to the
Executive and/or Executive's spouse and dependents. For COBRA purposes, the Date
of Termination will be the qualifying event and the Corporation will pay 12
months of insurance premiums.

      7. FULL SETTLEMENT. The Corporation's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Corporation may have against the Executive or others.

      8. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary
capacity for the benefit of the Corporation all secret or confidential
information, knowledge or data relating to the Corporation or any of its
affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during his employment by the Corporation or any of its
affiliated companies and which shall not be public knowledge. After termination
of the Executive's employment with the Corporation, he shall not, without the
prior written consent of the Corporation, communicate or divulge any such
information, knowledge or data to anyone other than the Corporation and those
designated by it.

      9. COVENANT NOT TO COMPETE. In view of the fulfillment of Executive's
obligations hereunder and (i) the unique and valuable services it is expected
Executive will render to the Corporation, (ii) Executive's knowledge of the
clients, trade secrets, and other proprietary information relating to the
business of the Corporation and its customers and suppliers, and (iii) similar
knowledge Executive has regarding the Corporation, and in consideration of the
compensation to be received hereunder and as a condition to the performance by
Corporation of its obligations under this Agreement, Executive agrees that if
this Agreement is terminated due to Good Reason, Disability or for Without Cause
that for the period through 12 months after the Date of Termination the
Executive shall not directly or indirectly through any other person, firm or
Corporation:

      (i) compete with or be engaged in the same or similar business (as
determined by the Corporation) or "participate" in any other business or
organization which during such period competes with or is engaged in the same or
similar business as the Corporation in any geographical area in which the
Corporation conducts such business. The term "participate in" shall mean:
"directly or indirectly, for Executive's own benefit or for, with, or through
any other person, firm, or corporation, own, manage, operate, control, loan
money to, or participate in the ownership, management, operation, or control of,
or be connected as a director, officer, employee, partner, consultant, agent,
independent contractor, or otherwise with, or acquiesce in the use of
Executive's name. Executive will not directly or indirectly reveal the name of,
solicit or interfere with, or endeavor to entice away from the Corporation any
of its customers or employees. Executive will not directly or indirectly employ
any person who, at any time up to such cessation, was an employee of the
Corporation, within a period of one year after such person leaves the employ of
such Corporation. Executive agrees that the provisions of this Article 9 are
necessary and reasonable to protect the Corporation in the conduct of its
business. If any restriction contained in this Article 9 shall be deemed to be
invalid, illegal, or unenforceable by reason of the extent, duration, or
geographical scope thereof, or otherwise, then the court making such
determination shall have the right to reduce such extent, duration, geographical
scope, or other provisions hereof, and in its reduced form such restriction
shall then be enforceable in the manner contemplated hereby.

      9.1 BREACH. If Executive commits a breach of any of the provisions of this
Article 9, Corporation shall have the right and remedy to have such provisions
specifically enforced by any court having equity
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jurisdiction. The foregoing right and remedy shall be in addition to any other
remedy (including without limitation damages) to which Corporation may be
entitled.

      10. SUCCESSORS.

      10.1 ASSIGNMENT BY EXECUTIVE. This Agreement is personal to the Executive
and shall not be assignable by the Executive otherwise than by will or the laws
of descent and distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.

      10.2 ASSIGNMENT BY CORPORATION. Notwithstanding anything in this
Agreement, Executive agrees that this agreement may be assigned by the
Corporation.

      11. MISCELLANEOUS.

      11.1 MODIFICATIONS. This Agreement sets forth the entire understanding of
the parties with respect to the subject matter hereof. This agreement may be
modified only by a written instrument duly executed by each party.

      11.2 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without reference to
principles of conflict of laws. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.

      11.3 NOTICE. All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:


If to the Executive:

  see attachment
----------------------------

----------------------------

----------------------------
If to the Corporation:
President
Rainbow Technologies, Inc.
50 Technology
Irvine, CA  92618

or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressees.

      11.4 EQUITABLE RELIEF. Since a breach of the provisions of this Agreement,
particularly with respect to Article 9, could not adequately be compensated by
money damages, the Corporation shall be entitled, in addition to any other right
and remedy available to it, to an injunction restraining such breach or a
threatened breach, and in either case no bond or other security shall be
required in connection therewith, and Executive hereby consents to the issuance
of such injunction.

      11.5 RELATIONSHIP OF PARTIES. Except for authority granted to Executive by
the President in order to enable Executive to fulfill the obligations set forth
in this Agreement, nothing contained in this Agreement shall authorize, empower,
or constitute Executive the agent of the Corporation in any manner; authorize or
empower Executive to assume or create any obligation or responsibility
whatsoever, express or implied, on behalf of or in the name of the Corporation.
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      11.6 WAIVER. Any waiver by any party of a breach of any provision of this
Agreement shall not operate as or be construed to be a waiver of any other
breach of such provision or any breach of any other provision of this Agreement.
The failure of a party to insist upon strict adherence to any term of this
Agreement on one or more occasions shall not be a waiver or deprive the party of
the right hereunder to insist upon strict adherence to that term or any other
term of this Agreement. Any waiver must be in writing and signed by the waiving
party.

      11.7 SEPARABILITY. If any provision of this Agreement is invalid, illegal,
or unenforceable, the balance of this Agreement shall remain in effect, and if
any provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and circumstances.

      11.8 HEADINGS. The headings in this Agreement are solely for convenience
of reference and shall be given no effect in the construction or interpretation
of this Agreement.

      11.9 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

      11.10 WITHHOLDINGS. The Executive agrees that the Corporation shall
withhold from any and all payments required to be made to Executive pursuant to
this Agreement all federal, state, local and/or other taxes or contributions
which the Corporation determines are required to be withheld in accordance with
applicable statutes and/or regulations from time to time in effect provided,
however, that such withholding shall be consistent with the calculations made by
the Corporation.

      IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant
to the authorization from its Board of Directors, the Corporation has caused
these presents to be executed in its name on its behalf all as of the day and
year first above written.

/s/ Wang Chan
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Wang Chan




ATTEST:


/s/ Walter Straub
-------------------------------------
Walter Straub
Rainbow Technologies, Inc.