EMPLOYMENT AGREEMENT

Exhibit 10.5

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is made as of this 5 ^th day of December, 2008 (“Effective Date”), by and between Veritec, Inc., a Nevada Corporation having its principal offices at 2445 Winnetka Ave. N., Suite #201, Golden Valley, Minnesota 55427 (hereinafter, “Veritec”), and Thomas McPherson, an individual (hereinafter, “Employee”).

Veritec and Employee are sometimes individually referred to herein as “Party” and sometimes collectively referred to herein as “The Parties”.

WHEREAS, Veritec is engaged in the business of designing, developing, marketing and licensing its proprietary matrix symbol multi-dimensional bar code data storage technology; and

WHEREAS, The Parties intend by this Agreement to define an employer-employee relationship on the terms and subject to the conditions set forth herein and intend that this Agreement shall establish a basis of their relationship and define their respective rights, duties and obligations.

NOW THEREFORE, in consideration of the mutual promises, covenants, warranties and agreements set forth herein, The Parties agree as follows:

I.

Definitions

As used in this Agreement, each of the following words and terms shall have the following meaning:

“ Competitive Business ” means directly or indirectly designing, developing, making, promoting, offering, soliciting, selling, leasing, licensing, transferring or otherwise making Competitive Products available to third parties.

“ Competitive Products ” mean single or multi-dimensional bar code products manufactured or sold by anyone other than Veritec that are used for the same purposes as Veritec Products.

“ Confidential Information ” means any information that is not generally known to or readily available to other persons or entities by ordinary means. Confidential Information includes information of any nature which would have economic value, including but not be limited to: algorithms, compilations, devices, formulas, images, methods, patterns, processes, programs, specifications, source codes, techniques, financial forecasts or results, sales forecasts or results, marketing plans or strategies, strategic plans, new products, information related to existing our prospective customers and suppliers, including customer and supplier lists. Confidential Information also includes any trade secrets as defined in Minnesota’s Uniform Trade Secrets Act codified as Minn. Stat. § 325C.01 et seq. “Confidential Information” shall not include any information which (a) the recipient can prove that at the time of disclosure was published or otherwise in the public domain; (b) after disclosure becomes part of the public domain through means other than a breach of this Agreement by the recipient; (c) the recipient can reasonably substantiate by documentary evidence was known to the recipient prior to its receipt from the provider; or (d) was or is independently developed by the recipient without the utilization of any Confidential Information supplied by the provider. Additionally, a recipient hereunder shall not be deemed to have disclosed Confidential Information in violation of this Agreement if, and then only to the extent that, the recipient can reasonably demonstrate that the recipient was required to make such disclosure pursuant to any applicable law, regulation or governmental order, or pursuant to any judgment, order, decree or award of a court of competent jurisdiction, and the recipient provided the provider with at least ten (10) days written notice (or if the circumstances do not permit such advance written notice, such advance notice as is reasonably practicable under the circumstances) prior to making such disclosure.

“ Inventions” and “ Works of Authorship ”: “Inventions” means all new concepts, ideas and discoveries of novel things and uses associated with, or for use with Veritec Products, as well as, all concepts, ideas and discoveries of improvements to Veritec Products from whatever source derived (whether or not patentable). “Works of Authorship” means all writings, drawings, images, brochures, presentations, videos and “white papers” whether printed or in electronic formats, software and software source code from whatever source derived (whether or not copyrightable), including all modifications and derivative works based thereon. These terms shall include all forms of original expression fixed in any tangible medium, created in the past at the request of Veritec, or created hereafter by anyone at the request of Veritec, or created by Employee individually or in concert with others that relate in any manner to the present or prospective business of Veritec if learned, or was conceived by Employee or those employed or retained by Employee during the course and scope of his employment. All such Inventions and Works of Authorship are hereby deemed to be the sole and separate property of Veritec.

NOTICE — The parties understand that Inventions and Works of Authorship do not include an invention for which no equipment, supplies, facility, or trade secret information of Veritec was used and which was developed entirely on the Employee’s own time, and (1) which does not relate (a) directly to the business of Veritec, or (b) to Veritec’s actual or demonstrably anticipated research or development, or (2) which does not result from any work performed by the Employee for Veritec.

“ Veritec ” means Veritec, Inc. and its subsidiaries whether existing or hereafter formed and any successors in interest of the same.

“ Veritec Customers ” mean persons, governmental or commercial entities that purchase Veritec Products. Veritec’s customer lists are and always shall be the property of Veritec.

“ Veritec Products ” mean the matrix symbol multi-dimensional bar code data storage technology, together with the technology and know-how for application thereof to any substrate, the design, use and application of hardware and software for the encoding and decoding thereof for retrieval of data as presently designed, developed, invented, written or owned by Veritec, or hereafter designed, developed, invented, written or owned by or for Veritec.

“ Vesting Date(s) ” mean that date or those dates on which Employee’s restricted stock and options to purchase common stock vest.

II.

Duties, Obligations and Rights of The Parties

2.01. Position of Employment — Title — Supervision . Veritec hereby offers to employ and Employee hereby accepts employment together with the duties and responsibilities associated with being Veritec’s Vice President, General Counsel and Secretary. Employee shall only be subject to general supervision, advice and direction of the Board of Directors, Committees of the Board of Directors and the President and Chief Executive Officer of Veritec.

2.02. Best Efforts — Duties of Employee . Employee agrees to perform faithfully, industriously, and to the best of Employee’s ability, experience and talents all of the duties that may be reasonably requested by Veritec.

2.03. Compensation to Employee . In order to induce Employee to accept the offer of employment subject to the express terms and conditions set forth herein, Veritec hereby promises, covenants, warrants and agrees to pay Employee the following forms and amounts of compensation: