EXECUTIVE EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT (this
“ Agreement ”) is made as of
February __, 2009 (“ Effective Date ”) by and
between INNOVATIVE CARD TECHNOLOGIES, INC., a Delaware corporation
(the “ Company ”), and RICHARD NATHAN (“
Executive ”), with reference to the following
facts:
RECITALS
A.
Innovative Card Technologies, Inc., a
Delaware corporation (the “ Company ”), is a
public company that develops and markets secure powered cards for
payment, identification, physical and logical access
applications.
B.
The Company desires to employ the
Executive, and the Executive desires to be employed by the
Company.
NOW, THEREFORE, in consideration of
the mutual covenants and promises contained herein, and other good
and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged by the parties hereto, the parties agree as
follows:
TERMS
1.
Employment . The Company hereby employs Executive and Executive
hereby accepts such employment upon the terms and conditions
hereinafter set forth. Irrespective of the date on which this
Agreement is executed, Executive’s date of employment with
the Company is November 17, 2008.
2.
Duties . Subject to the terms and provisions of this
Agreement, Executive is hereby employed by the Company as Chief
Executive Officer and President of the Company. Executive shall
have full responsibility and authority for such duties as
customarily are associated with service as Chief Executive Officer
and President of the Company at the direction of the Board of
Directors of the Company (the “ Board ”).
Executive shall faithfully and diligently perform such duties
assigned to Executive and shall report directly to the
Board.
3.
Scope of Services
. Executive shall devote substantially
all of his business time, attention, energies, skills, learning and
efforts to the Company’s business.
4.
At-Will . Executive’s employment with the Company shall
be at all times at-will employment and Company reserves the right
to terminate Executives employment and this Agreement for any
reason with or without cause, at any time in its sole discretion as
provided for in Section 7 of the Agreement. Likewise,
Executive may terminate his employment at any time and for any
reason as provided for in Section 7 of this
Agreement.
5.1
Salary . Executive’s annual compensation (“
Base Compensation ”) under this Agreement shall be
$240,000 per year, prorated for any partial year, commencing upon
the Effective Date. The Base Compensation shall be payable in equal
bi-monthly installments on the fifteenth and end of each
month.
5.2
Bonus .
Executive shall be entitle to an annual
cash bonus equal to 3% of the increase in market capitalization of
the Company for the period commencing on January 1, 2009 and ending
on December 31, 2009. Executive shall also be entitled
to an annual cash bonus in all subsequent years in which he is
employed equal to 2% of the increase in market capitalization of
the Company during each applicable year thereafter. The
cash bonus shall be paid to Executive no later than January 31 of
the year following the year in which the bonus is
earned. At the Company’s option, the cash bonus
may be paid to Executive in four (4) equal payments, the first
payment on January 31 of the year following the year in which the
bonus is earned and the remaining three equal payments shall be
made on April 30, July 31 and October 31 of such
year. The cash bonus will be deemed earned on
December 31 of each respective year. In the event the
Company elects to make such payment in four equal installments,
such payments will be made irrespective of Executives employment at
the time such payments become due. In the
event of an acquisition, merger or other pooling of resources with
another company, the bonus will be earned based on the market
capitalization of the company at the time of the merger or
acquisition, and the bonus cash shall be paid to the Executive
within 30 days of the merger or acquisition date. For
purposes of clarification, in the event of a decrease in the market
capitalization of the Company during any applicable period,
Executive will not earn a bonus. Under no circumstance
will Executive be required to return a previously earned bonus or
pay any sums to the Company as a result of a decrease in market
capitalization.
5.3
Expenses . The Company shall reimburse Executive for all
reasonable business, entertainment and travel expenses actually
incurred or paid by Executive in the performance of his services on
behalf of the Company, in accordance with the Company’s
expense reimbursement policy as from time to time in
effect.
5.4
Options . The Executive shall be eligible to participate in
the Company’s Stock Incentive Plan, and receive option
grant(s) there under for the purchase of common stock of the
Company (“ Options ” or “ Option
”) at the discretion of the Board of Directors. The Executive
shall receive an initial issuance of one million (1,000,000)
Options to be issued and priced at the closing price on November
17, 2008, subject to formal approval of the option grants by the
Company’s Board of Directors. The Options granted to the
Executive pursuant to this Section 5.4 shall have a term of 5 years
and vest quarterly over 2 years so long as Executive remains
employed by the Company. In the event Executive is
terminated or resigns prior to the vesting of all Options, any
unvested options shall lapse 90 days after
termination.
5.5
Vacation . Executive shall be entitled to four (4) weeks paid
vacation per year; to be taken at such times as may be approved by
the Company’s Board of Directors or its designee. The
Executive shall be entitled to carry forward from year to year
unused vacation days and shall be entitled to compensation
therefore upon termination of employment.
5.6
Other Rights and Benefits
. Executive and his dependents shall
receive all medical, dental, vision, short/long term disability and
drug prescription insurance through the Company’s group plan
of insurance or reimbursement for private insurance, including any
COBRA coverage available to Executive, or private insurance if such
COBRA coverage ceases to be available, at Executive’s option.
6.
Taxation of Payments and
Benefits . The Company shall
undertake to make deductions, withholdings and tax reports with
respect to payments and benefits under this Agreement to the extent
that it reasonably and in good faith believes that it is required
to make such deductions, withholdings and tax reports. Payments
under this Agreement shall be in amounts net of any such deductions
or withholdings. Nothing in this Agreement shall be construed to
require the Company to make any payments to compensate the
Executive for any adverse tax effect associated with any payments
or benefits or for any deduction or withholding from any payment or
benefit.
7.
Termination or Resignation
. Executive’s
termination or resignation of employment shall be effective 30 days
after the termination or resignation notice is given by the Company
or Executive, respectively (“Termination Effective
Date”).
8.
Payment Upon Termination
. Upon Executive's termination
of employment by either the Company or Executive, all accrued but
unpaid compensation as provided for in Section 5 shall be paid
within five (5) days following the Termination Effective
Date. For purposes of calculating the Bonus as provided
for in Sections 5.2, the applicable measurement period shall be the
period of time from the beginning of the respective year through
the Termination Effective Date.
9.
Representations and
Warranties . Executive hereby
represents and warrants to Company that as of the date of execution
of this Agreement: (i) this Agreement will not cause or require
Executive to breach any obligation to, or agreement or confidence
with, any other person; (ii) Executive is not representing, or
otherwise affiliated in any capacity with, any other lines of
products, manufacturers, vendors or customers of the Company; and
(iii) Executive has not been induced to enter into this Agreement
by any promise or representation other than as expressly set forth
in this Agreement.
10.
Non-Solicitation and
Non-Competition.
10.1
Non-Solicitation of
Employees . Executive agrees
that he will not, while employed by the Company and for a period of
two (2) years following termination of such
employment:
(a)
directly solicit, encourage, or take any
other action which is intended to induce any other employee of the
Company to terminate his or her employment with the Company;
or
(b)
directly interfere in any manner with the
contractual or employment relationship between the Company and any
such employee of the Company.
The
foregoing shall not prohibit Executive or any entity with which
Executive may later be affiliated from hiring a former or existing
employee of the Company or any of its subsidiaries, provided that
such hiring does not result from the direct actions of Executive.
For purposes of this Section, any reference to the Company shall
include all of the Compan
