EXECUTIVE EMPLOYMENT AGREEMENT
This
EMPLOYMENT AGREEMENT (this “
Agreement ”)
is made as of
May ___, 2008 (“
Effective Date ”)
by and between INNOVATIVE CARD TECHNOLOGIES, INC., a Delaware
corporation (the “
Company ”),
and Vincent M. Schiavo (“
Executive ”),
with reference to the following facts:
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:
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
May ____, 2008.
2.
Duties .
Subject
to the terms and provisions of this Agreement, Executive is hereby
employed by the Company as Senior Vice President Global Sales of
the Company. Executive shall have full responsibility and authority
for such duties as customarily are associated with service as
Senior Vice President Global Sales of the Company at the direction
of the Chief Executive Officer of the Company (the “
CEO ”).
Executive shall faithfully and diligently perform such duties
assigned to Executive and shall report directly to the
CEO.
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 Employment .
Executive
understands and acknowledges that his employment with Company is
"AT WILL", meaning that either Executive or Company may terminate
the employment relationship
at any time with or without cause .
Upon termination of the employment relationship by either Executive
or Company, Company shall have no obligations to Executive other
than those expressed in this Agreement or provided by law.
Notwithstanding that certain time periods are expressed herein,
such time periods are contingent upon Executive remaining employed
by Company and are not intended by either party to create any
express or implied term of employment, as Executive shall at all
times be employed on an “AT WILL” basis with no term of
employment.
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Agreement - Vincent M. Schiavo
5.
Compensation .
5.1
Salary .
Executive's annual compensation ("
Base Compensation ")
under this Agreement shall be Two Hundred Fifty Thousand Dollars
($250,000) 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 eligible for a bonus targeted at one hundred
percent (100%) of Executive’s Base Compensation. The CEO, in
his sole discretion, shall create a performance plan that will
permit Executive’s performance to be measured and his bonus,
if any, calculated pursuant to the numerical performance of the
Company. The performance plan shall include criteria based on sales
of DisplayCards and Clamshells; revenue; and gross profit margin
performance targets. Any bonus due to Executive shall be paid
quarterly within forty five (45) days after the end of each
calendar quarter and seventy five days (75) after the calendar year
end, provided Employee is employed at the time of the bonus
payment. Executive shall be given the opportunity to meet with the
Board and Chief Executive Officer to discuss the evaluation and
provide input. Payment of the bonus, if any, shall be subject to
all appropriate federal and state income and employment
taxes.
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 in effect from time to time
5.4
Options .
The Executive shall be eligible to participate in the
Company’s Stock Incentive Plan, and receive option grant(s)
thereunder 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 three hundred fifty thousand
(350,000) Options to be issued and priced at the closing price of
the effective date subject to formal approval of the option grants
by the Company’s Board of Directors. Vesting of the Options
granted to the Executive shall vest as follows: a) no options shall
vest if Executive’s employment with Company terminates prior
to one year after the Effective Date (the “Anniversary
Date”); b) Eighty Seven Thousand Five Hundred (87,500) shares
on the Anniversary Date; c) Fourteen Thousand Five Hundred Eighty
Four (14,584) shares every sixty (60) days thereafter, with the
exception of the last vesting period being Fourteen Thousand Five
Hundred Seventy Two (14,572) shares, provided Executive is employed
by Company on each said sixtieth (60
th) day
for the next eighteen periods.
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 CEO or its designee. The Executive shall be
entitled to carry forward from year to year not more than one (1)
week of unused vacation days (such limitation shall preclude
Executive from having more than five (5) available weeks of
vacation in any one year). All unused vacation days shall be
determined annually and provided such days exceed one (1) week,
Executive shall be paid for such excess unused days and may only
carry forward one (1) week per year.
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5.6
Other Rights and Benefits .
Executive
and his dependents (identified as ________________) 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. However,
notwithstanding the foregoing, Company’s maximum
reimbursement obligation to Executive shall be limited to One
Thousand Five Hundred Dollars ($1,500) per month.
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 .
Executive’s employment may be terminated as
follows:
7.1
Termination for Death .
Executive’s employment shall terminate immediately upon
Executive’s death.
7.2
Termination Upon Disability .
Executive’s employment shall terminate if Executive should
become totally and permanently disabled. For purposes of this
Agreement, Executive shall be considered “totally and
permanently disabled” if Executive is treated as permanently
“disabled” under any permanent disability insurance
policy maintained by the Company and is entitled to full benefits
payable under such policy upon a total and permanent disability. In
the event any such policy is either not in force or the benefits
are not available under such policy, then “total and
permanent disability” shall mean the inability of Executive,
as a result of substance abuse, any mental, nervous or psychiatric
disorder, or physical condition, injury or illness to perform
substantially all of his current duties on a full-time basis for a
period of six (6) consecutive months, as determined by a licensed
physician selected by the Board.
7.3
Termination by Company for “Cause”
.
The Company may terminate this Agreement for “Cause”
upon three (3) days written notice so long as the Company has given
Executive written notice describing the Cause and Executive has not
cured such Cause within a reasonable time, but not less than twenty
(20) days nor more than forty (40) days, as determined in
Company’s reasonable subjective discretion. However, if such
“Cause” is not reasonably capable of cure, Company
shall not be obligated to provide a cure period. For purposes of
this Agreement, “Cause” shall mean the existence or
occurrence of any of the following:
(a)
Executive’s conviction for or pleading of nolo contendre to
any felony involving the Company or moral turpitude.
(b)
Executive’s misappropriation of Company assets.
(c)
Executive’s willful violation of a Company policy or a
directive of the Board previously delivered to him in
writing.
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Agreement - Vincent M. Schiavo
(d)
Executive’s material breach of his obligations, warranties or
representations set forth in this Agreement.
(e)
Any willful neglect or material breach of duty by Executive under
this Agreement, or any material failure by Executive to perform
under this Agreement.
The
“Cause” provisions for termination are solely for
purposes of determining Executive’s severance pursuant
to paragraph 9 herein, and shall not create any implied right
to termination solely for “Cause” as
Executive’s employment at all times shall be on an
“AT WILL” basis not requiring cause or notice
prior to termination.
8.
Change in Control .
For purposes of this Agreement, a “
Change in Control ”
means
a change in ownership or control of the Company after the Effective
Date effected through any of the following:
(a)
the acquisition, directly or indirectly, by any person or related
group of persons (other than the Company or a person that directly
or indirectly controls, is controlled by, or is under common
control with, the Company) of beneficial ownership of
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