EXHIBIT 10.46
[VIISAGE LOGO]
October 31, 2002
Mr. James P. Ebzery
58 Oldfield Drive
Sherborn, MA 01770
Dear Jim:
I am pleased to offer you the position of Senior Vice-President, Sales and
Marketing of Viisage Technology, Inc. (the "Company") commencing November 1,
2002. The terms of the offer are as follows:
1. Base Salary: $215,000 per year, subject to annual review by the
Compensation Committee of the Board of Directors.
2. Bonus: On target of $100,000 for calendar year 2003, based on performance
criteria to be mutually established by you and the CEO. Exceptional
performance as defined by the CEO and the Board could result in a bonus
payment as high as $200,000 for 2003. This bonus will be evaluated and
awarded in two equal portions on July 1, 2003 and January 1, 2004. The 2002
bonus will be prorated based upon your start date of November 1, 2002.
3. Stock Options:
(a) Upon the commencement of your employment, the Company will grant
you nonqualified options to purchase 200,000 shares of common stock of the
Company pursuant to the Company's 1996 Management Stock Option Plan, as
amended (the "Plan"), at an exercise price equal to the Nasdaq closing
price on the date of grant. These options will vest in three increments of
66,666 shares beginning on your first anniversary, commencing November 1,
2003, 66,666 shares continuing thereafter on November 1, 2004 and 66,668
shares on November 1, 2005. The exercise price for this grant will be set
at the closing market price of Viisage's common stock on 31 October 2002.
(b) Your options will accelerate upon a change in control of the
Company. A "change in control" means and shall be deemed to occur if any of
the following occurs: (i) any Person is or becomes the beneficial owner of
securities of the Company representing more than 50% of the combined voting
power of the Company's then outstanding voting securities; or (ii)
individuals comprising the Incumbent Board, or individuals approved by a
majority of the Incumbent Board; cease for any reason to constitute at
least a majority of the Board of Directors of the Company; or (iii)
approval by the stockholders of the Company of a merger or consolidation of
the Company, other than (A) a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent more than 50% of the combined voting securities of
the Company or such surviving entity outstanding immediately after such
merger or consolidation or (B) a
30 Porter Road, Littleton, Massachusetts 01460 Tel: 978-952-2200
Fax: 978-952-2225
Mr. James P. Ebzery
October 28, 2002
Page 2
merger or consolidation effected to implement a recapitalization of the
Company in which no Person acquires more than 50% of the Company's then
outstanding voting securities; or (iv) approval by the stockholders of the
Company of (A) a complete or substantial liquidation or dissolution of the
Company, or (B) the sale or other disposition of all or substantially all
of the assets of the Company. An underwritten public offering of common
stock of the Company, including the completion of any sale of common stock
pursuant to an underwriter's over-allotment option, and any offering to
employees pursuant to a registration statement on Form S-8 or other similar
offering shall not be counted toward a change in control for these
purposes. For purposes of the foregoing: "Incumbent Board" shall mean those
individuals who comprised the Board of Directors of the Company on the date
hereof; and "Person" shall have the meaning used in Sections 13(d)(3) or
14(d)(2) of the Exchange Act, provided that, it shall not include
Denis K. Berube, Joanna T. Lau, Lau Acquisition Corp., the Company, any
trustee or other fiduciary holding securities under an employee benefit
plan of the Company, or any entity owned by the stockholders of Lau
Acquisition Corp.
(c) In all cases, the vesting of your options is conditioned on your
being employed by the Company on the vesting date. Your options will expire
on the tenth anniversary of the date of grant and must be exercised within
90 days of the termination of your employment (or within one year if your
employment terminates as a result of death or disability). Your options
will be subject to the terms and conditions of the Plan and the option
agreement issued to you thereunder, which will incorporate the essential
terms set forth in this Section 3.
4. Benefits: You will participate in the Company's standard employee benefit
plans, as may be in effect from time to time, for which you qualify. A
summary of the current benefits has been furnished to you. Your annual
vacation will be calculated at the rate of four weeks annually. You will be
reimbursed for business related cellular phone charges as well as an
allowance for high-speed cable connectivity at your home. The company will
also reimburse you for a single membership in an Airline Club.
5. Severance Agreement: If (i) your employment is terminated by the Company or
(ii) the Company fails to continue you in the position of Senior Vice
President or reduces your compensation in bad faith or (iii) the Company
changes your job location by more than fifty (50) miles, and you resign as
a result of any of the above, the Company will continue to pay your then
current base salary in accordance with regular payroll practices for six
months following the termination date; provided that no severance payments
will be made if your employment with the Company is terminated for "cause."
Further, upon the termination of your employment by the Company, you will
be entitled to receive any bonus earned pursuant to Section 2 above for the
period prior to the termination date. "Cause" shall mean you have (i) been
convicted of or entered a plea of no contest relating to any illegal act
that materially and adversely reflects upon the business, affairs or
Mr. James P. Ebzery
October 28, 2002
Page 3
reputation of Viisage, or (ii) materially neglected to discharge your
responsibilities as an executive employee of Viisage, provided that any
termination under this clause (ii) shall occur only after the written
notice to you and an opportunity to cure such breach within 30 days of such
notice. For purposes of this Section 5, the term "Company" shall include
any successor to the Company's business.
6. Proprietary Rights Agreement. You will be required, as a condition of your
employment, to enter into an agreement containing provisions concerning
confidentiality, assignment of inventions, non-competition and
non-solicitation. A copy of that agreement is attached for your reference.
7. At Will Employment. Your employment with the Company will be "at will,"
meaning that you will not be obligated to remain employed at the Company
for any specific period of time, and may cease your employment for any
reason. Likewise, the Company will not be obligated to employ you for any
specific period, and may terminate your employment with or without cause.
8. Immigration. This offer is conditional upon satisfactory proof of
eligibility for employment, as required by the Immigration Reform and
Control Act of 1986. Please complete the enclosed form and return it to
Barbara Courage.
9. Miscellaneous. This agreement, along with the proprietary rights agreement
described above and any stock option agreements issued to you under the
Plan, sets forth the terms of your employment with the Company and
supersedes any prior representations or agreements, whether written or
oral. This agreement may not be modified or amended except by a written
agreement signed by you and an authorized officer of the Company. In
addition to any other remedies available to it, the Company will have the
right to seek injunctive or other equitable relief to prevent any violation
of this agreement. This agreement will be governed by the laws of the
Commonwealth of Massachusetts, without regard to choice of law provisions.
The failure of either party to exercise any right or the waiver by either
party of any breach will not prevent a subsequent exercise of such right or
be deemed a waiver of any later breach of the same or any other term of
this agreement. If any provision of this agreement is held to be invalid,
illegal, or unenforceable, such provision will only be modified to the
extent required to be enforceable under applicable law.
If this offer is acceptable, please indicate your acceptance and agreement
by countersigning below.
Very truly yours
AGREED AND ACCEPTED: /s/ Bernard C. Bailey
/s/ James P. Ebzery -------------------------------------
- ------------------------------------- Bernard C. Bailey
President and Chief Executive Officer