EMPLOYMENT AGREEMENT
EXHIBIT
10.3
THIS
AGREEMENT, effective as of March 15, 2008 (the “Effective Date”) by and between
Intelli-Check - Mobilisa, Inc., a Delaware corporation (the “Company”), and
Xxxxxx Xxxxxx (“Employee”).
WITNESSETH
THAT:
WHEREAS,
the Company desires to employ Employee as an employee on the terms hereinafter
set forth and Employee wishes to be so employed;
NOW,
THEREFORE, in consideration of the mutual covenants and promises hereinafter
set
forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Company and Employee hereby agree as
follows:
1. Employment.
Upon
the terms and subject to the conditions contained in this Agreement, the Company
agrees to employ Employee and Employee accepts such employment. Employee shall
report directly to, and be subject to the supervision and direction of, the
Board of Directors (the “Board”) of the Company.
2. Title
and Duties.
Employee will hold the title of “Chief Executive Officer.” Employee agrees to
devote substantially all of his working time, attention, skill and effort during
normal working hours to the performance of his duties to the Company. Employee
agrees to perform such duties during such time faithfully and to the best of
his
abilities. Such duties shall be ordinarily performed by Employee at the offices
of the Company, the headquarters of which shall be based at 000 Xxxx Xxxxxx,
Xxxx Xxxxxxxx, XX 00000.
3. Compensation.
For all
services rendered by Employee to the Company during the Term (as such term
is
later defined), the Company shall compensate Employee as follows:
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a.
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Salary.
Employee shall be paid a base annual salary of $220,000. Such base
annual
salary is subject to annual review by the Board, in its sole discretion.
Such salary shall be payable in accordance with the Company’s payroll
procedures for salaried employees, but not less frequently than monthly.
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b.
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Bonus.
The Company shall pay Employee an annual cash bonus in an amount
to be
determined by the Board based on such reasonable objectives established
by
the Board.
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c.
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Stock
Options.
The Company shall issue and grant Employee 25,000 stock options on
March
20, 2008, which will immediately vest. Employee shall enter into
a stock
option agreement with the Company, substantially in the form of Exhibit
B
attached hereto,
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d.
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Expense
Reimbursement.
Employee shall be reimbursed for all authorized business expenses
which
are incurred by Employee in the performance of Employee’s duties pursuant
to this Agreement in accordance with the Company’s normal expense
reimbursement policies. All such expenses shall be incurred in a
manner
consistent with the Company’s expense reimbursement policy and shall be
appropriately documented in reasonable detail by Employee upon submission
of any request for reimbursement, and in a format and manner consistent
with the Company’s expense reimbursement policy.
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e.
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Benefits.
Subject to any contribution generally required of Company executives,
Employee shall be entitled to receive all executive perquisites and
to
participate in any and all employee benefit plans, including medical
insurance and pension plans, now in existence or hereafter adopted
from
time to time by the Company which are provided to senior management
or
other comparable employees at Employee’s level.
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f.
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Withholding.
All amounts payable to Employee pursuant to this Agreement shall
be made
subject to all applicable withholding. Employee will not be entitled
to
receive any compensation other than as provided in this
Section.
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4. Non-competition
and Non-Solicitation.
In
consideration of Employee’s employment and continued employment by the Company,
concurrently with the execution and delivery of this Agreement, Employee shall
execute and deliver a Non-competition and Non-Solicitation Agreement in the
form
attached hereto as Exhibit
A
(the
“Non-competition and Non-Solicitation Agreement”). The Non-competition and
Non-Solicitation Agreement is hereby incorporated herein by reference and made
a
part hereof.
5. Term
and Termination.
The
“Term” of this Agreement shall begin on the date hereof and shall continue for a
period of two (2) years from the date hereof. Notwithstanding the previous
sentence, the Term can be terminated in any one of the followings
ways:
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a.
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Death.
The death of Employee shall immediately terminate this Agreement.
Upon
such termination, Employee shall be entitled to receive all cash
compensation earned and all reimbursements due through the effective
date
of termination.
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b.
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Disability.
If Employee is no longer able to perform his duties hereunder due
to
illness, accident or other physical or mental condition and such
disability is expected to continue with or without interruption for
a
period of ninety (90) days or longer, the Company may terminate this
Agreement. Upon such termination, Employee shall be entitled to receive
all cash compensation earned and all reimbursements due through the
effective date of termination.
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c.
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With
Company Cause.
The Company
may terminate this Agreement for Company Cause (as defined herein)
upon
written notice to Employee. “Company Cause” shall mean: (1) Employee’s
conviction in a court of law of any felony or any plea of nolo contendre
with respect thereto; (2) Employee’s continued, willful failure or refusal
to perform specific written and reasonable directives of the Board
regarding Employee’s duties and responsibilities which are consistent with
the scope and nature of Employee’s duties and responsibilities as set
forth in Section 0
hereof; (3) any flagrant act of dishonesty or disloyalty by Employee,
or
any act involving gross moral turpitude of Employee; or (4) any breach
of
the Non-competition and Non-Solicitation Agreement, which breach
is
uncured for a period of ten (10) days following written notice by
the
Company of the need to cure such breach. Upon a termination for Company
Cause, Employee shall be entitled to receive all cash compensation
earned
and all reimbursements due through the effective date of termination.
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d.
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Without
Company Cause.
This Agreement and the Term may be terminated without Company Cause
by the
Company at any time after the Initial Term upon written notice to
Employee. Upon a termination by the Company without Company Cause:
(i)
Employee shall be entitled to receive all compensation earned and
all
reimbursements due through the effective date of termination; and
(ii)
Employee shall be entitled to receive a severance payment in an amount
equal to one
year of base salary at the time of termination paid over 12 equal
monthly
payments.
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e.
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With
Employee Cause.
Employee
may terminate this Agreement for Employee Cause (as defined herein)
upon
written notice to the Company. “Employee Cause” shall mean the breach by
the Company of any covenant, agreement or condition contained in
this
Agreement which breach is uncured for a period of ten (10) days following
written notice by Employee of the need to cure such breach. Upon
a
termination for Employee Cause, Employee shall be entitled to receive
all
compensation earned and all reimbursements due through the effective
date
of termination and an amount equal to $50,000.
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f.
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Without
Employee Cause.
This Agreement and the Term may be terminated by Employee at any
time
without Employee Cause upon sixty (60) days written notice to the
Company.
Upon a termination by Employee without Employee Cause, Employee shall
be
entitled to receive all cash compensation earned and all reimbursements
due through the effective date of
termination.
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g.
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Effect
of Termination.
Upon any termination of this Agreement and the Term, all rights and
obligations of the Company and Employee under this Agreement shall
cease,
except that Employee’s obligations under Section 0
and any applicable specific payment obligations of the Company under
this
Section 0
shall remain in full force and effect in accordance with their terms.
Any
such termination shall not affect the Non-competition and Non-Solicitation
Agreement or any other agreement between the Company and Employee,
each of
which shall remain in full force and effect in accordance with its
terms.
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Upon
any
termination, Employee shall return all property, equipment and materials that
are the property of the Company and shall use his reasonable efforts to
cooperate with the Company and provide for a smooth transition of Employee’s
duties to a new employee or executive.
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6. Amendment
and Alteration.
This
Agreement constitutes the complete understanding between the parties with
respect to the employment of Employee hereunder, and no statement,
representation, warranty or covenant has been made by either party with respect
thereto except as expressly set forth herein. This Agreement shall not be
altered, modified, amended or terminated except by a written instrument signed
by each of the parties thereto.
7. Severability.
If any
covenant or other provision of this Agreement is invalid, unlawful, or incapable
of being enforced, by reason of any rule of law or public policy, it shall
be
enforceable to the maximum extent permitted by law and all other conditions
and
provisions of this Agreement which can be given effect without the invalid,
unlawful or unenforceable provision, shall be given effect.
8. Non-Assignment.
The
obligations and rights of Employee shall inure to the benefit of, and shall
be
binding upon, himself and his personal representatives, and the obligations
and
rights of the Company shall inure to the benefit of, and shall be binding upon,
it and its successors and assigns; provided,
however, that Employee shall not have the right to assign any of his obligations
under this Agreement.
9. Governing
Law.
This
Agreement shall be governed by and construed in accordance with the internal
laws of the State of New York. The parties expressly consent to the exclusive
jurisdiction of the courts (Federal and state) in the City of New York, New
York
for any judicial proceeding involving, directly or indirectly, any matter or
claim in any way arising out of, related to or connected herewith.
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IN
WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year
first above written.
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Company:
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Employee:
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INTELLI-CHECK
- MOBILISA, INC.
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XXXXXX
XXXXXX
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By:
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/s/
Xxxxxxx Xxxx
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/s/
Xxxxxx Xxxxxx
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Name:
Xxxxxxx Xxxx
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Title:
Chairman of the Board
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EXHIBIT
10.3
Exhibit
A
Form
of Non-competition and Non-Solicitation Agreement
The
undersigned, Xxxxxx Xxxxxx, in consideration for and as a condition of his
employment as an employee of the Company (the “Employee”), does hereby agree
with the Company as follows:
1. Non-competition
Covenant.
During
the period of employment as an Employee, the Employee shall devote substantially
all of his available business time and best efforts to promoting and advancing
the business of the Company. During the period of employment as an Employee
and
for a period of two (2) years after termination of such employment (for any
reason, whether voluntarily or involuntarily), the Employee agrees that he
shall
not engage in, whether alone or as a partner, member, officer, director,
consultant, agent, employee or stockholder of any commercial entity, any
activity which is or may be competitive with the products and services being
designed, conceived, marketed, provided, distributed, delivered or developed
by
the Company at the time of termination of such employment; provided,
however, that the ownership of less than 1% of the stock of any corporation
whose stock is traded on a national securities exchange or in the
over-the-counter market shall not be a violation of this Section 1. During
the
period of employment as an Employee and while all restrictions contained herein
apply, the Employee shall inform all prospective employers and business partners
of such restrictions prior to acceptance of or entering into new employment
or
other business arrangement.
2. Non-solicitation.
a. Of
Customers.
During
the period of employment as an Employee and for a period of two (2) years after
termination of such employment (for any reason, whether voluntarily or
involuntarily), the Employee shall not directly or indirectly either for himself
or for any other commercial entity, solicit, divert or perform any services
for
or attempt to solicit, divert or perform any services for, any of the Company’s
customers, prospective customers or business in existence at the time of
termination of such employment. For purposes of this Agreement, “customers”
shall include those customers that were customers of the Company within the
twelve (12) month period prior to the Employee’s termination. For purposes of
this Agreement, “prospective customers” shall include those persons and entities
with which the Company has had discussions regarding, or to which the Company
has made presentations for, business within the twelve (12) month period prior
to the Employee’s termination. During the period of employment as an Employee
and while all restrictions contained herein apply, the Employee shall inform
all
prospective employers and business partners of such restrictions prior to
acceptance of or entering into new employment or other business
arrangement.
b. Of
Employees.
During
the period of employment by the Company and for a period of two (2) years after
termination of such employment (for any reason, whether voluntarily or
involuntarily), the Employee shall not directly or indirectly either for himself
or for any commercial entity, solicit, recruit, attempt to recruit, hire or
attempt to hire any of the Company’s employees. For purposes of this Agreement,
“employees” shall include those persons employed by the Company on the date of
such termination and during the one (1) year period thereafter and employees
that were employees of the Company within the six (6) month period prior to
the
Employee’s termination. During the period of employment as an Employee and while
all restrictions contained herein apply, the Employee shall inform all
prospective employers and business partners of such restrictions prior to
acceptance of or entering into new employment or other business
arrangement.
3. Confidentiality.
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 the Company's business), or
appropriate, use or cause, permit or induce any person to appropriate or use,
any proprietary, secret or confidential information of the 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.
4. Absence
of Conflicting Agreements.
The
Employee represents that he is not bound by any agreement or any other existing
or previous business relationship that conflicts with or prevents the full
performance of the Employee’s duties and obligations to the Company during the
course of employment and while all restrictions contained herein
apply.
5. Remedies
Upon Breach.
The
Employee agrees that any breach of this Agreement by the Employee would cause
irreparable damage to the Company. The Company shall have, in addition to any
and all remedies under this Agreement and in law or equity, the right to an
injunction or other equitable relief to prevent any violation of the Employee’s
obligations hereunder, without the necessity of posting a bond or proving
special damages.
6. No
Employment Obligation.
The
Employee understands that this Agreement does not create an obligation on the
part of the Company to continue the Employee’s employment with the Company but
instead is a condition to the Employee’s initial employment, as the case may be.
7. Miscellaneous.
As used
herein, the term “Company” shall include the Company, its members, subsidiaries
and affiliates. Any waiver by the Company of a breach of any provisions of
this
Agreement shall not operate or be construed as a waiver of any subsequent breach
hereof. This Agreement contains all oral and written agreements, representations
and arrangements between the parties with respect to its subject matter, and
no
representations or warranties are made or implied, except as specifically set
forth herein. No modification, waiver or amendment of any of the provisions
of
this Agreement shall be effective unless in writing and signed by both parties
to this Agreement. If one or more of the provisions contained in this Agreement
shall for any reason be held to be excessively broad as to scope, activity
or
subject matter so as to be unenforceable at law, such provision(s) shall be
construed and reformed by the appropriate judicial body by limiting and reducing
it (or them), so as to be enforceable to the maximum extent compatible with
the
applicable law as it shall then appear. The obligations of the Employee under
this Agreement shall survive the termination of the Employee’s relationship with
the Company regardless of the manner of such termination. This Agreement may
not
be assigned by Employee. All covenants and agreements hereunder shall inure
to
the benefit of and be enforceable by the successors of the Company. This
Agreement shall be interpreted and construed pursuant to the laws of the State
of New York, regardless of the laws that might otherwise govern under applicable
principles of conflicts of law. The parties hereto hereby consent to personal
jurisdiction and venue exclusively in the City of New York, New York with
respect to any action or proceeding brought with respect to this Agreement.
Each
party will bear its own costs in respect of any disputes arising under this
Agreement. The Employee recognizes and agrees that the enforcement of this
Agreement is necessary to ensure the preservation, protection and continuity
of
the goodwill of the Company. The Employee agrees that, due to the proprietary
nature of the Company’s business, the restrictions set forth in Sections 1 and 2
of this Agreement are reasonable as to duration and scope.
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IN
WITNESS WHEREOF, the undersigned Employee and the Company have executed this
Agreement as of this day of .
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INTELLI-CHECK
- MOBILISA, INC.
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By:
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/s/
Xxxxxxx Xxxx
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Name:
Xxxxxxx Xxxx
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Title:
Chairman of the Board
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EMPLOYEE:
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/s/
Xxxxxx Xxxxxx
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Name:
Xxxxxx Xxxxxx
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Title:
Chief Executive Officer
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Exhibit
B
STOCK
OPTION AGREEMENT
Intelli-Check
- Mobilisa, Inc., a Delaware corporation (the “Company”), as of the
20th
day of
March, 2008 hereby grants to Xxxxxx Xxxxxx (“Optionee”), residing at 00
Xxxxxxxxx Xxxx, Xxxx Xxxxxx, XX 00000 in consideration of services rendered
by
Optionee to the Company, the irrevocable right and option (“Option”) to purchase
all or part of an aggregate of 25,000 shares (“Shares”) of the Company’s common
stock, par value $.01 per share (“Common Stock”), on the terms and conditions
hereinafter set forth:
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1.
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Purchase
Price.
The purchase price for the Shares shall be 110% of the closing price
on
the date of grant subject to adjustment as provided in Paragraph
5
below.
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2.
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Term
of Option: Exercise.
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(a)
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Subject
to earlier termination pursuant hereto, the Option shall terminate
ten
(10) years from the date hereof. The Option shall vest all shares
on March
20, 2008.
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(b)
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The
Option shall be exercised by fifteen (15) days written notice to
the
Secretary or Treasurer of the Company at its then principal office.
The
notice shall specify the number of Shares as to which the Option
is being
exercised and shall be accompanied by payment in full of the purchase
price for such Shares. The option price shall be payable in United
States
dollars, and may be paid in cash or by certified check on a United
States
bank or by other means acceptable to the Company. In no event shall
the
Company be required to issue any Shares (i) until counsel for the
Company
determines that the Company has complied with all applicable securities
exchange or the National Association of Security Dealers Automated
Quotation System on which the Common Stock may then be listed, and
(ii)
unless Optionee reimburses the Company for any tax withholding required
and supplies the Company with such information and data as the Company
may
deem necessary.
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(c)
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Optionee
shall not, by virtue of the granting of the Option, be entitled to
any
rights of a shareholder in the Company and shall not be considered
a
record holder of any Shares purchased by Optionee until the date
on which
Optionee shall actually be recorded as the holder of such Shares
upon the
stock records of the Company. The Company shall not be required to
issue
any fractional Share upon exercise of the Option and shall not be
required
to pay to Optionee the cash equivalent of any fractional Share
interest.
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3.
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Restrictions
on Transfer and Termination.
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(a)
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No
option shall be transferred by Optionee otherwise than by will or
by the
laws of descent and distribution. During the lifetime of Optionee
the
Option shall be exercisable only by Optionee or by Optionee’s legal
representative.
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(b)
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In
the event of the termination of Optionee’s employment by the Company at
any time for cause, the Option and all rights there under shall terminate.
Should the employee end his employment prior to the termination date
then
the Option and all rights thereunder shall be exercisable by Optionee
at
any time within three (3) months thereafter, but not later than the
termination date of the Option. Notwithstanding the foregoing, in
the
event Optionee is permanently and totally disabled (within the meaning
of
Section 105(d) (4), or any successor section, of the Internal Revenue
Code), Optionee’s Option and all rights thereunder shall be exercisable by
Optionee (or Optionee’s legal representative) at any time within six (6)
months of Optionee’s termination of employment, but not later than the
termination date of the Option.
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(c)
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If
Optionee shall die while in the employ of the Company, the Option
may be
exercised by Optionee’s designated beneficiary or beneficiaries (or if
none have been effectively designated, by Optionee’s executor,
administrator or the person to whom Optionee’s rights under the Option
shall pass by Optionee’s will or by the laws of descent and distribution)
at any time within six (6) months after the date of Optionee’s death, but
not later than the termination date of the
Option.
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(d)
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This
Option is granted pursuant to an Employment Agreement between Company
and
Optionee dated March 15, which Employment Agreement governs Optionee’s
rights and obligations as an employee including, without limitation,
Company’s right to terminate Optionee’s employment under certain
circumstances, and nothing in this Agreement shall confer upon Optionee
any additional rights with respect to the terms and conditions of
Optionee’s employment.
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Securities
Act Matters.
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(a)
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Optionee
represents that Shares issued upon any exercise of the Option will
be
acquired for Optionee’s own account for investment only and not with a
view to the distribution thereof within the meaning of the Federal
Securities Act of 1933, as amended (hereinafter, together with the
rules
and regulations thereunder, collectively referred to as the “Act”), and
that Optionee does not intend to divide Optionee’s participation with
others or transfer or otherwise dispose of all or any Shares except
as
below set forth. As herein used the terms “transfer” and “dispose” mean
and include, without limitation, any sale, offer for sale, assignment,
gift, pledge or other disposition or attempted
disposition.
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(b)
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Optionee
understands that in the opinion of the Securities and Exchange Commission
(“SEC”) Shares must be held by Optionee for an indefinite period unless
subsequently registered under the Act or unless an exemption from
registration thereunder is available; that, under Rule 144 of the
Act,
after one or more years from the date of payment for and issuance
of the
shares, certain public sales thereof (which may be limited as to
the
number of Shares) may be made in accordance with the subject to the
terms,
conditions and restrictions of Rule 144, but only if certain reporting
and
other requirements thereunder have been complied with; and that should
Rule 144 be inapplicable, registration or the availability of an
exemption
under the Act will be necessary in order to permit public distribution
of
any Shares. Optionee also understands that the Company is and will
be
under no obligation to register the Shares or to comply with any
exemption
under the Act.
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(c)
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Optionee
shall not at any time transfer or dispose of any Shares except pursuant
to
either (i) a registration statement under the Act which registration
statement has become effective as to the Shares being sold or (ii)
a
specific exemption from registration under the Act, but only after
Optionee has first obtained either a “no-action” letter from the SEC,
following full and adequate disclosure of all facts relating to such
proposed transfer, or a favorable opinion from or acceptable to counsel
to
the Company that the proposed transfer or other disposition complies
with
and is not in violation of the Act or any applicable state “blue sky” or
securities laws.
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5.
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Anti-Dilution
Provisions.
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(a)
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Subject
to the provisions of Paragraph 5(b) below, if at any time or from
time to
time prior to expiration of the Option there shall occur any change
in the
outstanding Common Stock of the Company by reason of any stock dividend,
stock split, combination or exchange of shares, merger, consolidation,
recapitalization, reorganization, liquidation or the like, then and
as
often as the same shall occur, the kind and number of Shares subject
to
the Option, or the purchase price per share, or both, shall be adjusted
by
the Board of Directors of the Company (”Board”) in such manner as it may
deem appropriate and equitable, the determination of which Board
shall be
binding and conclusive. Failure of the Board to provide for any such
adjustment shall be conclusive evidence that no adjustment is
required.
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(b)
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The
Board shall have the right to engage a firm of independent certified
public accountants, which may be the Company’s regular auditors, to make
any computation provided for in this Section, and a certificate of
that
firm showing the required adjustment shall be conclusive and binding.
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6.
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Notices.
All notices and other communications required or permitted under
this
Agreement shall be in writing and shall be given either by (i) personal
delivery or regular mail, in each case against receipt, or (ii) first
class registered or certified mail, return receipt requested. Any
such
communication shall be deemed to have been given (i) on the date
of
receipt in the cases referred to in clause (i) of the preceding sentence
and (ii) on the second day after the date of mailing in the cases
referred
to in clause (ii) of the preceding sentence. All such communications
to
the Company shall be addressed to it, to the attention of its Secretary
or
Treasurer, at its then principal office and to Optionee at the address
set
forth above or such other address as may be designated by like notice
hereunder.
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7.
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Miscellaneous.
This Agreement cannot be changed except in writing signed by the
party to
be charged. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York applicable to agreements
made and to be performed exclusively in New York. The Option has
been
granted pursuant to the Company’s 2004 Stock Option Plan. This Agreement
is in all respects subject to the terms and conditions of said Plan.
The
Option granted hereunder is intended to be a Non-Qualified Stock
Option.
Optionee acknowledges that Optionee is not holding any other stock
options
granted by the Company. Optionee shall execute this Agreement and
return
it to the Company within thirty (30) days after the mailing or delivery
by
the Company of this Agreement. If Optionee shall fail to execute
and
return this Agreement to the Company within said thirty (30) day
period,
the Option shall automatically terminate. The section headings in
this
Agreement are solely for convenience of reference and shall not affect
its
meaning or interpretation.
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IN
WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
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By:
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Optionee:
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Name
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6
