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EXECUTIVE EMPLOYMENT AGREEMENT
This Executive Employment Agreement ("Agreement") is entered
into this 5 th day of March, 2006 by and between (1)
SURE TRACE SECURITY CORPORATION ("SSTY"), a Utah public
corporation; and (2) RICHARD A. BENDIS ("Executive").
RECITALS:
WHEREAS on March 16, 2006 or other date designated by SSTY (the
"Closing Date"), SSTY will acquire the controlling interest in a
U.S. public corporation named True Product I.D., Inc. ("Company").
SSTY intends that the Company headquarters will be based in
Philadelphia, Pennsylvania, USA and that the Company will oversee
the worldwide operations, contracts, and business of SSTY and its
subsidiaries (subject, however, to any conflicting arrangements
SSTY may have as of the Closing Date with any of its Chinese joint
venture partners and subsidiaries, including, but not limited to,
True Products I.D. Technology (Beijing) Limited).
WHEREAS SSTY seeks to hire Executive as the Chief Executive
Officer and President of the Company;
WHEREAS the Company and Executive desire to delineate the terms
and conditions on which (i) the Company shall employ Executive,
(ii) Executive shall render services to the Company, and (iii) the
Company shall compensate Executive for such services; and
WHEREAS in connection with the employment of Executive by the
Company, SSTY and the Company desire to restrict Executive's rights
to compete with the business of SSTY, the Company, and/or any of
their affiliates or joint venture partners, including, but not
limited to, Globe Staff Consulting, True Product I.D. (Beijing)
Limited, and True Product I.D. Technology Limited;
WHEREAS this Executive Employment Agreement is being entered
into between SSTY and Executive, with both parties thereto
understanding and acknowledging that this Agreement will be
formally assigned to the Company once SSTY acquires controlling
interest in the Company and/or the Company is no longer a
subsidiary of SSTY. While his consent is not required under
this Agreement, Executive consents to such an assignment;
NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements hereinafter set forth and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and Executive agree as
follows:
1.
EMPLOYMENT.
The Company hereby employs Executive and Executive hereby
accepts employment with the Company upon the terms and conditions
hereinafter set forth.
2.
TERM.
2.1
The term of this Agreement (the "Term") shall be for a three (3)
year period commencing on the Effective Date (as defined in
Subsection 2.2 below) of this Agreement, subject, however, to
termination as provided herein in Sections 7 and 8 below of this
Agreement.
2.2
The effective date of this Agreement shall be the Closing Date
or any other date agreed to by the parties hereto, provided that
such date shall be no later than April 30, 2006 (the "Effective
Date").
2.3
Executive and the Company understand and acknowledge that
Executive’s employment with the Company constitutes an
"at-will" employment. Subject to the Company’s
obligations to provide severance benefits as specified herein,
Executive and the Company acknowledge that the Company may
terminate this employment relationship at any time, upon written
notice to Executive, for any or no cause or reason.
2.4
Executive shall formally assume the role of the President and
Chief Executive Officer of the Company on a date designated by the
Company, which the Company anticipates will be the date the Company
is no longer a subsidiary of SSTY.
3.
POSITION, DUTIES AND RESPONSIBILITIES.
3.1
During the Term, Executive shall serve as the President and
Chief Executive Officer of the Company. Executive shall
report solely and directly to the Company’s Board of
Directors (the "Board") and the Chairman of the Board (the
"Chairman"). During the Term, Executive shall have such
responsibilities, duties and authorities as commensurate with
persons in similar capacities in similarly sized and situated
companies and such other duties and responsibilities as the Board
and/or the Chairman shall designate.
3.2.
In the performance of all of his responsibilities hereunder,
Executive shall be subject to all of the Company's policies, rules,
and regulations. In performing such duties, Executive will be
subject to and abide by, and will use his best efforts to cause
other employees of the Company to be subject to and abide by, all
policies and procedures developed by the Board, the Chairman, any
executive committee of the Board, or senior management of the
Company.
3.3
During the Term unless otherwise agreed by the Board and/or
Chairman, Executive shall devote his full attention and expend his
best efforts, energies, and skills on a full-time basis, to the
business of the Company and any corporation controlled by the
Company (each, a "Subsidiary"). The Company acknowledges that
Executive may from time to time be engaged in other business
activities separate from and outside the scope of the business of
the Company. The Company agrees that the devotion of
reasonable amounts of time to such other business activities will
not violate the terms of this Agreement on the conditions that (i)
such activities are not corporate opportunities of the Company; and
(ii) such activities do not
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materially interfere with the performance of Executive's duties
hereunder. For purposes of this Agreement, the term the
"Company" shall mean the Company and all Subsidiaries.
Without violating this Agreement, Executive may (i) serve in
any capacity with any professional, community, industry, civic,
educational or charitable organization, (ii) serve as a member of
corporate boards of directors on which Executive currently serves
and, with the consent of the Board (which consent shall not be
unreasonably withheld or delayed), other corporate boards of
directors and (iii) manage his and his family's personal
investments and legal affairs so long as such activities do not
materially interfere with the discharge of Executive's duties,
constitute a corporate opportunity of the Company or create a
potential business conflict or the appearance thereof. If at
any time service on any board of directors or advisory board would,
in the good faith judgment of the Board, conflict with
Executive’s fiduciary duty to the Company or create any
appearance thereof, Executive shall, as soon as reasonably
practicable considering any fiduciary duty to the other entity,
resign from such other board of directors or advisory board after
written notice of the conflict is received from the Board. Service
on the boards of directors or advisory boards disclosed by
Executive to the Company on which he is serving as of the Effective
Date are hereby approved.
3.4
The Company shall have the right to initially name Executive as
a member of the Board, which Executive shall serve without
additional compensation. Upon formalization of the
Board, the Chairman at his sole discretion shall have the right to
remove Executive from the Board without violating this Agreement or
creating a situation entitling Executive to terminate this
Agreement under Subsection 7.5 below of this Agreement.
3.5
Executive agrees to serve without additional compensation as an
officer and director of any of the Company’s subsidiaries,
affiliates, and joint venture entities and agrees that any amounts
received from such corporation may be offset against the amounts
due under this Agreement.
4.
BASE SALARY AND OTHER COMPENSATION OPPORTUNITIES.
4.1
For all services rendered by Executive under this Agreement, the
Company shall pay or cause one or more of its subsidiaries to pay
Executive during the Term a base salary at an annual rate of not
less than Five Hundred Thousand U.S. Dollars (US$500,000) (the
"Base Salary"). The Company shall pay the Base Salary to
Executive in accordance with the standard practice it develops for
payment of compensation to its employees but not less frequently
than monthly. Executive’s Base Salary shall be subject
to annual or other review by the Board (or a committee thereof) and
may be increased, but not decreased, from time to time by the
Board.
4.2.
At the end of the first year of employment or other date
designated by the Board, provided that Executive is employed by the
Company at the time, Executive shall have the opportunity to earn
an annual cash bonus for that year of up to Five Hundred Thousand
U.S. Dollars (U.S. $500,000), to be determined by the Board, in its
sole discretion based on, inter alia , its review of the
Company’s and Executive’s performance the first year,
including but not limited to the achievement of the Company’s
and Executive’s objectives the first year. At the end
of the second and third years of employment, provided that
Executive is employed by the
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Company at the time, Executive shall have an opportunity to earn
an annual cash bonus for each particular year in an amount, if any,
to be determined by the Board in its sole discretion based on the
Board’s review of the, inter alia , Company’s
and Executive’s performance that year, including but not
limited to the achievement of the Company’s and
Executive’s objectives that year.
4.3
Subject to the other conditions in this subsection 4.3, the
first year of employment, Executive shall be entitled to an award
of a number of shares of the Company’s common stock equal to
ten percent (10%) of the number of outstanding shares of the
Company existing as of the Closing Date (the "Executive Initial
Equity Compensation"). Six (6) months after the Effective
Date, provided that Executive is still employed by the Company on
such date, the Company shall authorize and issue to Executive one
half of the Executive Initial Equity Compensation (the "First Half
of the Executive Initial Equity Compensation"), which shall vest on
that date. Twelve (12) months after the Effective Date, provided
that Executive is still employed by the Company on such date, the
Company shall authorize and issue to Executive the remaining half
of the Executive Initial Equity Compensation (the "Second Half of
the Executive Initial Equity Compensation"), which shall vest on
that date. In the event that Executive is terminated without
Cause (as defined in subsection 7.4 below of this Agreement)
between the six and twelve months after the Effective Date, the
Second Half of the Executive Initial Equity Compensation, as
prorated as of the date of termination, shall immediately vest upon
the date of termination. At the end of the second, third and any
other subsequent year of employment, provided that Executive is
still employed by the Company on such date, Executive shall have an
opportunity to earn additional equity compensation for that
particular year in an amount, if any, to be determined by Board in
its sole discretion based on the Board’s review of, inter
alia , the Company’s and Executive’s performance
that year, including but not limited to the achievement of the
Company’s and Executive’s objectives that year.
Executive and the Company will review the tax implications
associated with Executive’s equity arrangements with the
Company and may reasonably modify or restructure those arrangements
in view of possible negative tax implications for
Executive.
4.4
During the Term, provided that Executive is employed by the
Company at the time, Executive shall have an opportunity to earn
compensation other than those described in Sections 4.1-4.3 above
of this Agreement to be determined by the Board in its sole
discretion based on the Board’s annual and/or other review
of, inter alia , the Company’s and Executive’s
performance, including but not limited to the achievement of the
Company’s and Executive’s objectives.
4.5
The performance targets, standards and other criteria will be
structured after Executive joins the Company and after the Board,
the Chairman, Executive and others have had the opportunity to
determine appropriate performance factors related to the Company
and Executive based on a strategic review of Company priorities and
other material issues.
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5.
EMPLOYEE AND OTHER BENEFITS
5.1
In his capacity as the President and Chief Executive Officer of
the Company, Executive shall develop for the Board’s review
and approval an employee benefit plan for the Company’s
executives and other employees which is commensurate with similarly
sized and situated companies and which is appropriate given the
Company’s financial condition.
5.2
Executive shall be entitled to participate in all employee and
executive benefit plans of the Company that the Company has adopted
or may adopt, maintain or contribute to for the benefit of its
executives and other employees at a level commensurate with his
position subject to satisfying the applicable eligibility
requirements.
5.3
Under the employee benefit plans to be developed by Executive
for the Company’s executives and other employees, as approved
by the Board, the parties hereto anticipate that Executive shall be
entitled to employee benefits, including but not limited to, those
pertaining to 401k, comprehensive health, major medical, and dental
insurance, disability insurance, life insurance, annual
comprehensive physical examinations, and other paid employee
benefits commensurate with persons in similar capacities in
similarly sized and situated companies.
5.4
The Company shall provide to Executive all employee and
executive perquisites which other senior executives of the Company
are generally entitled to receive and which will be subsequently
and mutually agreed to by the Company and Executive, in accordance
with Company policy set by the Board from time to time.
5.5
Executive shall be entitled to annual paid vacation in
accordance with the Company’s policy applicable to senior
executives, but in no event less than four (4) weeks per calendar
year (as prorated for partial years), which vacation may be taken
at such times as Executive elects with due regard to the needs of
the Company. Any paid vacation time that Executive does not
use during a calendar year shall accrue to the next year.
5.6
Upon submission of appropriate documentation in accordance with
its policies in effect from time to time, the Company shall pay or
reimburse Executive for all business expenses which Executive
incurs in performing his duties under this Agreement, including,
but not limited to, travel, entertainment, professional dues and
subscriptions, and
all dues, fees, and expenses associated with membership in
various professional, business, and civic associations and
societies in which Executive participates in accordance with the
Company's approval and policies in effect from time to time.
5.7
During the Term, the Company will assume Executive’s
existing car lease and all expenses related to that lease. .
5.8
Executive shall be entitled to travel business class for all
necessary work-related flights.
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6.
RESTRICTIVE COVENANTS.
6.1
Executive acknowledges that (i) he has a major responsibility
for the operation, administration, development and growth of the
Company's business, (ii) the Company's business is international in
scope, (iii) his work for the Company has brought him and will
continue to bring him into close contact
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