Exhibit 10.13
EMPLOYMENT
AGREEMENT
AGREEMENT made as of the 7th day of September 7, 2001 between
INTELLI-CHECK, INC. ("Company"), a Delaware Corporation having an office at 000
Xxxxxxxxx Xxxx Xxxx, Xxxxxxxx, XX 00000 and XXXXX XXXXXXX ("Employee"), residing
at 00 Xxxxxxx Xxxxx, Xxxxxxxxx, XX 00000.
WHEREAS, Company and Employee wish to enter into an Employment Agreement
pursuant to which Employee will serve as Senior Executive Vice President, Chief
Financial Officer and Treasurer of the Company.
NOW, THEREFORE, in consideration of the respective agreements hereinafter
set forth, the parties agree as follows:
Article I
Employment
1.01 Term. Company hereby employs Employee, and Employee hereby accepts
employment with Company (including also employment by, and in connection
with the business activities of any of Company's affiliates, subsidiaries
and related corporations), in the position and with the duties hereinafter
set forth, for a period (the "term") commencing on September 7, 2001 and
ending December 31, 2004 subject, however, to earlier termination in
accordance with the provisions of this Agreement. This Agreement shall
automatically renew except if the Employer gives Employee 90 days written
notice before the completion of the initial term of this Agreement.
Article II
Duties
2.01 General. Employee shall be the Senior Executive Vice President, Chief
Financial Officer and Treasurer of the Company and shall perform such
executive duties as may from time to time be assigned to him by Company's
Board of Directors. If so elected or appointed, Employee shall also serve
without additional compensation as a director and/or officer of the
Company or any of its subsidiaries. However, the Employee recognizes and
agrees that the Board may elect to amend the position and/or duties
assigned to Employee. Such amendment of position and/or duties shall be
commensurate with that of a Senior Executive Vice President with no
reduction in Fixed Salary, benefits or incentives.
2.02 Performance. During the term of his employment, Employee shall devote
substantially all his business time, best efforts and attention to the
business, operations and affairs of Company and the performance of his
duties hereunder provided, however, that during the term of his
employment, Employee may work for a non-competitive Company so long as he
devotes substantially all of his business time, best efforts and attention
to the business operations and affairs of the Company and the performance
of his duties hereunder.
2.03 Employee's Representations. Employee represents and warrants to and agrees
with Company that:
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(a) Neither the execution nor performance by Employee of this Agreement
is prohibited by or constitutes or will constitute, directly or
indirectly, a breach or violation of, or will be adversely affected
by, any written or other agreement to which Employee is or has been
a party or by which he is bound.
(b) Neither Employee nor any business or entity in which he has any
interest or from which he receives any payments has, directly or
indirectly, any interest of any kind in or is entitled to receive,
and neither Employee nor any such business or entity shall accept,
from any person, firm, corporation or other entity doing business
with Company any payments of any kind on account of any services
performed by Employee during the term of his employment.
Article III
Compensation and Related Matters
3.01(a) Fixed Salary. As compensation for Employee's services Company shall pay
Employee a salary of $135,000 (the "Fixed Salary") for the first year
of the agreement.
3.01(b) The Employee shall have the right at his election, to receive
compensation in the form of the Company's restricted Common Stock. Such
Stock shall be valued at fifty percent (50%) of the closing bid price
of the Company's Common Stock as quoted on NASDAQ/NMS (or other
established exchange) as of the date of the Employee's election. Such
election may be for all or part of the Employee's Compensation. At the
beginning of each quarter, Employee shall give the Company notice of
his election to exercise his option to receive restricted Common Stock
in lieu of cash compensation.
3.01(c) Fixed Salary Adjustment. The fixed salary may not be decreased
hereunder during the term of this agreement, and will increase by five
percent (5%) for each successive year of employment.
3.01(d) Your salary will be increased by $5,806.48 per year to provide for
the reimbursement of the Company's medical deduction for family
coverage offered to you upon your original employment date prior to the
change in policy.
3.02 Expenses. Company shall pay or reimburse Employee for all reasonable
travel, hotel, entertainment and other business expenses incurred in
the performance of Employee's duties upon submission of appropriate
vouchers and other supporting data therefore.
3.03 Stock Options. The Company will grant to the Employee an option to
purchase 75,000 shares of the Company's Common Stock at $8.04 the fair
market value on September 7, 2001 to be vested on September 7, 2006.
These options may vest earlier under the following conditions: 25,000
on January 1, 2003 should the company have profits of $500,000 for the
fiscal year ending December 31, 2002 and 25,000 on January 1, 2004
should the Company have net profits of $1,000,000 for the fiscal year
ending December 31, 2003 and 25,000 on January 1, 2005 should the
Company have net profits of $1,250,000 for the fiscal year ending
December 31, 2004. Notwithstanding vesting terms eligible as a member
of the Board of Directors, if the Company were to terminate Employee or
not renew his contract for reasons
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other than for cause, the unvested options would immediately vest. If
Employee were terminated for cause any unvested options would expire.
3.04 Benefits. Employee shall be entitled to (i) participate in all general
pension, profit-sharing, life, medical, disability and other insurance
and employee benefit plans and programs at any time in effect for
executive employees of Company, provided, however, that nothing herein
shall obligate Company to establish or maintain any employee benefit
plan or program, whether of the type referred to in this clause (i) or
otherwise, and (ii) three (3) weeks vacation during each twelve month
period of employment at mutually agreeable times. Employee shall be
entitled to the use of a Company vehicle, however, Employee may elect
to provide his own vehicle and if such election is made, Company agrees
to pay Employee One Thousand and Two Hundred Fifty Dollars ($1,250) per
month to cover cost of the vehicle, insurance, repairs and other
expenses, pertaining thereto.
Article IV
Termination for Cause; Disability; Death
4.01 For Cause. Company shall have the right to terminate the employment of
Employee hereunder at any time for Cause (as hereinafter defined)
without prior notice (except as otherwise hereinafter provided). For
purposes of this Agreement "Cause" shall mean and include the
occurrence of any of the following acts or events by or relating to the
Employee: (i) any material misrepresentation by Employee in this
Agreement; (ii) any material breach of any obligations of Employee
under this Agreement which remains uncured for more than twenty (20)
days after written notice thereof by Company to Employee or if the
default is such that it cannot be cured within such 20-day period, upon
said breach; (iii) habitual insobriety or substance abuse of Employee
while performing his duties hereunder; (iv) theft of embezzlement from
Company or any other material acts of dishonesty; (v) repeated
insubordination respecting reasonable orders or directions of Company's
Board of Directors; (vi) conviction of a crime (other than traffic
violations and minor misdemeanors) or (vii) if Employee becomes the
subject of any order, judgment, or decree, not subsequently reversed,
suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining him from, or otherwise limiting,
engaging in any activity in connection with the purchase or sale of any
security or commodity or in connection with any violation of Federal or
state securities laws or Federal commodities. In the event of
termination for Cause, Employee's fixed salary shall terminate as of
the effective date of termination of employment.
4.02 Without Cause. Company may not terminate the employment of Employee,
except for Cause not withstanding Article IV; Section 4.01 of Company's
by-laws.
4.03 Disability. If Employee, by reason of illness, mental or physical
incapacity or other disability, is unable to perform his regular duties
hereunder (as may be determined by the Board of Directors), Company
shall continue to pay half of Employee's salary for the balance of the
term of this Agreement, provided, however, in the event Employee
recovers from any such illness, mental or physical incapacity or other
disability (as may be determined by an independent physician to which
Employee shall make himself available for examination at the reasonable
request of the Board of Directors), Employee shall immediately resume
his regular duties hereunder. Any payments to Employee under any
disability insurance or plan maintained by Company shall be applied
against and shall reduce the amount of the salary payable
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by Company under this Agreement. If at any time during the year the
Employee has suffered a complete and total disability, defined as the
inability to perform his/her duties from any location, then the
provisions of paragraph 3.03 shall be pro-rated so as not to provide
for incentive compensation for the period of complete and total
disability.
4.04 Death. In the event of Employee's death, Company shall continue to pay
half of the Employee's Fixed Salary for the balance of the term of this
Agreement to Employee's surviving spouse, provided, however, that, if
Company is the beneficiary of life insurance on Employee's life, it
shall use the proceeds of such insurance promptly upon the receipt
thereof to prepay (in inverse order to maturity), half of the Fixed
Salary remaining to be paid discounted to present value using an
assumed interest rate of 8% per annum. Company shall have the right
(but not the obligation) to obtain a life insurance policy on
Employee's life. The proceeds of any such life insurance policy shall
be payable to Company. Employee shall cooperate with Company and use
his best efforts in all respects and regard to obtaining a life
insurance policy, including, without limitation, undergoing a physical
examination upon reasonable request.
Article V
Confidential Information; Non-Competition
5.01 Confidential Information. Employee shall not, at any time during or
following termination or expiration of the term of this Agreement,
directly or indirectly, disclose, publish or divulge to any person
(except in the regular course of Company's business), or appropriate,
use or cause, permit or induce any person to appropriate or use, any
proprietary, secret or confidential information of Company including,
without limitation, knowledge or information relating to its trade
secrets, business methods, the names or requirements of customers or
the prices, credit or other terms extended to its customers, all of
which Employee agrees are and will be of great value to Company and
shall at all times be kept confidential. Upon termination or expiration
of this Agreement, Employee shall promptly deliver or return to Company
all materials of a proprietary, secret or confidential nature relating
to Company together with any other property of Company which may have
theretofore been delivered to or may be in possession of Employee.
5.02 Non-Competition. During the term of this Agreement and for a period of
two years after the sooner of the expiration date of this Agreement or
the date when Employee ceases to be employed by Company as a result of
either a voluntary termination of his employment or a termination for
cause, Employee shall not, within the United States, its territories
and/or, possessions and countries in which the Company does business,
without the prior written consent of Company in each instance ,
directly or indirectly, in any manner or capacity, whether for himself
or any other person and whether as proprietor, principal, owner,
shareholder, partner, investor, director, officer, employee,
representative, distributor consultant, independent contractor or
otherwise engage or have any interest in any entity which is engaged in
any business or activity then conducted or engaged in by Company. The
two-year period referred to in the preceding sentence shall be reduced
by two months for each full year that elapses after the commencement
date of this Agreement. Notwithstanding the foregoing, however,
Employee may at any time own in the aggregate as a passive (but not
active) investment not more than 5% of the stock or other equity
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interest of any publicly-traded entity which engages in a business
competitive with Company.
5.03 Reasonableness. Employee agrees that each of the provisions of this
Section 5 is reasonable and necessary for the protection of Company;
that each such provision is and is intended to be divisible; that if
any such provision (including any sentence, clause or part) shall be
held contrary to law or invalid or unenforceable in any respect in any
jurisdiction, or as to any one or more periods of time, areas of
business activities, or any part thereof, the remaining provisions
shall not be affected but shall remain in full force and effect as to
the other and remaining parts; and that any invalid or unenforceable
provision shall be deemed, without further action on the part of the
parties hereto, modified, amended and limited to the extent necessary
to render the same valid and enforceable in such jurisdiction. Employee
further recognizes and agrees that any violation of any of his
agreements in this Section 5 would cause such damage or injury to
Company as would be irreparable and the exact amount of which would be
impossible to ascertain and that, for such reason, among others,
Company shall be entitled, as a matter of course, to injunctive relief
from any court of competent jurisdiction restraining any further
violation. Such right to injunctive relief shall be cumulative and in
addition to, and not in limitation of, all other rights and remedies
which Company may possess.
5.04 Survival. The provisions of this Section 5 shall survive the expiration
or termination of this Agreement for any reason.
Article VI
Miscellaneous
6.01 Notices. All notices under this Agreement shall be in writing and shall
be deemed to have been duly given if personally delivered against
receipt or if mailed by first class registered or certified mail,
return receipt requested, addressed to Company and to Employee at their
respective addresses set forth on the first page of this Agreement, or
to such other person or address as may be designated by like notice
hereunder. Any such notice shall be deemed to have been given on the
day delivered, if personally delivered, or on the third day after the
date of mailing if mailed.
6.02 Parties in Interest. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their
respective heirs, legal representatives, successors and, in the case of
the Company, assigns, but no other person shall acquire or have any
rights under or by virtue of this Agreement, and the obligations of
Employee under this Agreement may not be assigned or delegated.
6.03 Governing Law; Severability. This Agreement shall be governed by and
construed and enforced in accordance with the laws and decisions of the
State of New York applicable to contracts made and to be performed
therein without giving effect to the principles of conflict of laws. In
addition to the provisions of 5.03 above, the invalidity or
unenforceability of any other provision of this Agreement, or the
application thereof to any person or circumstance, in any jurisdiction
shall in no way impair, affect or prejudice the balance of this
Agreement, which shall remain in full force and effect, or the
application thereof to other persons and circumstances.
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6.04 Entire Agreement; Modification; Waiver; Interpretation. This Agreement
contains the entire agreement and understanding between the parties
with respect to the subject matter hereof and supersedes all prior
negotiations and oral understandings, if any. Neither this Agreement
nor any of its provisions may be modified, amended, waived, discharged
or terminated, in whole or in part, except in writing signed by the
party to be charged. No waiver of any such provision or any breach of
or default under this Agreement shall be deemed or shall constitute a
waiver of any other provision, breach or default. All pronouns and
words used in this Agreement shall be read in the appropriate number
and gender, the masculine, feminine and neuter shall be interpreted
interchangeably and the singular shall include the plural and vice
versa, as the circumstances may require.
6.05 Indemnification. Employee shall indemnify and hold Company free and
harmless from and against and shall reimburse it for any and all
claims, liabilities, damages, losses, judgments, costs and expenses
(including reasonable counsel fees and other reasonable out-of-pocket
expenses) arising out of or resulting from any breach or default of any
of his representations, warranties and agreements in this Agreement.
Company shall indemnify and hold Employee free and harmless from and
against and shall reimburse him for any and all claims, liabilities,
damages, losses, judgments, costs and expenses (including reasonable
counsel fees and other reasonable out-of-pocket expenses) arising out
of or resulting from any breach or default of any of its
representations, warranties and agreements in this Agreement.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
INTELLI-CHECK, INC.
By
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Xxxxx Xxxxxxxxxx, Chairman
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Xxxxx Xxxxxxx
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