Exhibit 10.3
Agreement with Manoj Hippola
EMPLOYMENT AND NON-COMPETITION AGREEMENT
This AGREEMENT, effective as of the 21st day of April 2004, is made by and
between Liska Biometry, Inc., a Florida corporation (the "Company"), and Manoj
Hippola, a resident of the province of Ontario (the "Executive").
RECITALS
A. The Company is in the business of developing a Finger Print Biometrics
business (the "Business");
B. The Company desires to retain the services of the Executive;
C. The Executive is willing to be employed by the Company; and
D. The parties hereto desire to enter into this Agreement in order to set forth
the respective rights, limitations and obligations of both the Company and the
Executive with respect to the Executive's employment with the Company, the
Confidential Information, the Discoveries, and the other matters set forth
herein.
NOW THEREFORE, in consideration of the employment of the Executive by
the Company, the compensation paid to the Executive and the Company continuing
to provide Confidential Information to the Executive, as well as the other
mutual promises and consideration hereinafter contained, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Term.
Subject to the provisions for termination hereinafter provided, the Executive's
employment hereunder shall commence on the first day of the month after the
Company receives funding in the amount of US$ 100,000 (the "Employment Date")
and unless otherwise extended, end one year after the Employment Date commences
(the "Contract Termination Date"). The Contract Termination Date shall be
automatically extended for a successive one (1) year period at the end of each
contract year unless the Board of Directors of the Company (the "Board") shall
give contrary notice to the Executive, pursuant to the terms of Section 11
below, at least ninety (90) days prior to the end of the each contract year. In
the event that the Company does not receive funding in the amount of $100,000 on
or before December 31, 2004, this agreement shall become null and void.
2. Position and Duties.
During the Employment Term, the Executive shall serve as Chief Financial
Officer. The Executive will report to the Company's President and to the
Company's Board of Directors as required by law and by the Company's governance
policy in effect from time to time, and perform such employment duties,
consistent with his position, as specified in the Job Description. The Executive
shall not have the ability to enter into any agreements or contracts or
otherwise legally bind the Company without the express consent and written
approval of the President. The Executive shall devote his full productive time,
energy and ability to the proper and efficient conduct of the Company's
business. The Executive may only devote reasonable periods of time to service as
a Director of other businesses, with the prior written approval and consent of
the President, to the extent that such service does not interfere with the
performance of his obligations hereunder. Similarly, the Executive may engage in
such charitable or community activities as shall not interfere with the
performance of his obligations hereunder. The Executive shall observe and comply
with all lawful and reasonable rules of conduct set by the Board for executives
of the Company, and shall endeavor to promote the business, reputation and
interests of the Company.
3. Compensation.
Base Compensation.
As defined in further detail below, during the Employment Term the Company shall
pay the Executive a Base Compensation, subject to annual review, as the Board,
in its sole discretion, may determine. The Base Compensation shall be paid in
Canadian Dollars in accordance with the Company's normal payroll practices. The
Base Compensation paid to the Executive shall be sixty five thousand (C$ 65,000)
per year, payable bi-weekly in arrears.
Other Compensation.
Annual Bonus: The Executive shall be eligible to receive a Performance Bonus
(the "Bonus") for the achievement of the performance goals as determined by the
Board, and dependent upon the financial performance of the Company. The annual
bonus may be paid in cash, free trading stock, restricted stock, or a
combination thereof.
The Executive shall be granted 100,000 free trading shares upon signing of this
agreement.
The Executive shall be granted 1,200,000 restricted common shares upon signing
of this agreement. The Executive and the Company acknowledge that these
restricted shares of common stock have no fair market value at this time. The
Company cannot guarantee that this situation will change in the foreseeable
future. The Executive acknowledges that he has no claim on the Company for any
valuation of restricted common shares received in this regard. In the event that
it is conclusively determined by Canada Customs and Revenue Agency or the
Ontario Ministry of Revenue that this compensation has consequences that are
materially adverse to the interests of the Executive, the Executive may elect to
waive his entitlement to such shares with retroactive effect, in which case the
Company shall award the Executive an equal number of stock options under the
prevailing terms of the Company's Employee Stock Option Plan at an exercise
price equal to the value established by the Company's Board of Directors to
represent fair value of the shares as of the date of execution of this
agreement.
(iii) The Executive shall be eligible to participate in any Company incentive
plan established by the Company under the terms and conditions of the Plan.
Expenses.
The Executive shall be entitled to receive prompt reimbursement for all
reasonable business expenses pre-approved by the President (exclusive of any
commuting expenses) incurred by him in the course of his employment by the
Company.
Other Benefits.
(i) Insurance: The Executive shall be entitled to participate in or receive
benefits on the same basis as other executive officers of the Company under any
employee benefit plans and arrangements applicable to senior management
including life insurance plans, pension and profit-sharing plans, medical and
health plans or other employee welfare benefit plans, annual paid vacation, sick
leave, sick pay and short-term and long-term disability benefits and holidays,
as in effect from time to time.
(ii) Vacation: The Executive shall be entitled to receive three (3) weeks of
paid vacation per contract year, which shall accrue from April 1, 2003 to
recognize the efforts of the executive in the founding of the Company's
business. Such vacation days shall accrue and become vested on the first
anniversary day of each year of the Employment Term. This benefit shall be
reviewed by the Board of Directors and the Executive from time to time and
increased when appropriate.
(iii) Holidays: The Executive shall be entitled to the designated Company
holidays.
Termination.
The Executive's employment by the Company pursuant hereto is subject to
termination during the Employment Term as follows:
(a) Death. The Executive's employment hereunder shall terminate upon his death.
In such event, the Executive's Base Compensation and any prorated amount of the
Bonus, if any, shall be paid through the date of the Executive's death.
Eligibility for all other benefits shall be determined by the terms of any
applicable plan or program.
(b) Disability. The Company may, by written notice to the Executive, terminate
the Executive's employment if, as a result of the Executive's incapacity due to
physical or mental illness, the Executive shall have been absent from his duties
hereunder for ninety (90) consecutive days or for a total of one hundred eighty
(180) days in any three hundred sixty five (365) day period (the "Disability
Period"). In the event of such termination, the Executive shall receive the same
benefits payable in the event of death; provided however that, if the Company
should adopt a disability policy at any time during the Employment Term, the
terms of such policy shall govern.
(c) Termination by the Company for Cause or Executive's Voluntary Termination.
The Company shall be entitled to terminate the Executive's employment at any
time, by written notice to the Executive, for Cause, as defined herein:
(i) fraud or embezzlement on the part of the Executive;
(ii) conviction of or the entry of a plea of nolo contendere by the Executive to
any felony or other crime of fraud or moral turpitude;
(iii) any act of willful or negligent misconduct by the Executive which is
either intended to result in substantial personal enrichment of the Executive at
the expense of the Company or any of its subsidiaries or affiliates, or has a
material adverse impact on the business or reputation of the Company, any of its
subsidiaries or affiliates, or directors or other officers (such determination
to be made by the Company's Board of Directors in the good faith exercise of its
reasonable judgment); or
In the event of termination for Cause, the Executive's Base Compensation and
other benefits shall be paid through the Date of Termination (as hereafter
defined), and the Executive shall have no further rights to compensation or
benefits other than as determined by the terms of any applicable plan or
program. The Executive shall not be eligible to receive any portion of his
Annual Bonus.
The Executive may terminate his employment hereunder voluntarily at any time
with ninety (90) day's written notice to the Board. In the event of the
Executive's voluntary termination, the Executive shall be entitled to receive
his Base Compensation and prorated Bonus, if any, and benefits through the Date
of Termination.
(d) Without Cause. The Company may terminate the Executive's employment at any
time by giving written notice to the Executive of its intent to terminate this
Agreement without Cause. In such event:
(i) the Executive shall be paid his Base Compensation, any prorated
Bonus and other benefits to which the Executive is entitled for the remainder of
the Employment Term, provided that the Base Compensation shall represent not
less than 3 months pay in lieu of notice of termination;
(ii) all stock options held by the Executive under any stock option
plan of the Company shall become fully exercisable, and shall remain exercisable
for a period of 180 days following the Date of Termination; and
(iii) the Executive shall have such other rights in respect of any
incentive, other compensation plan or benefit plan or program as may be set
forth in such plan or program.
(e) Change in Control. Notwithstanding any other provision of this Agreement,
should a "change in control" occur, the Employee, at his sole option and
discretion, may terminate his employment under this Agreement at any time within
one (1) year after such change of control upon fifteen (15) days notice. In the
event of such termination, Company shall pay to the Employee a severance payment
("Severance Payment") equal to three (3) times the base amount as defined in
paragraph 3(a) above. The amount determined under the foregoing provisions of
this Section 4(e) shall be payable no later than one (1) month after the
effective date of the Employee's termination of employment. A change in control
means: the acquisition, without the approval of the Company's board of
directors, by any person or entity, other than Company or a "related entity," of
more than twenty percent (20%) of the outstanding shares of Company's voting
common stock through a tender offer, exchange offer or otherwise; the
liquidation or dissolution of the Company following a sale or other disposition
of all or substantially all of its assets; a merger of consolidation involving
the Company which results in the Company not being the surviving parent
corporation; or any time during any two-year (2) period in which individuals who
constituted the board of directors of Company at the start of such period (or
whose election was approved by at least two-thirds of the then members of the
board of directors of Company who were members at the start of the two-year
period) do not constitute at least fifty (50%) of the board of directors, for
any reason. A related entity is the parent, a subsidiary or any employee benefit
plan (including a trust forming a part of such a plan) maintained by the
Company, its parent or a subsidiary.
(f) Date of Termination. The date upon which a termination pursuant to this
Section 4 becomes effective (the "Date of Termination" or "Termination Date")
shall be: the date upon which the party terminating this Agreement gives the
other party written notice thereof in accordance with Section 11 hereof.
5. Confidential Information.
(a) The Executive recognizes that the services to be performed by him hereunder
are special, unique and extraordinary and that, by reason of his employment with
the Company, he may acquire Confidential Information (as hereinafter defined)
concerning the operation of the Company, the use or disclosure of which would
cause the Company substantial loss and damage which could not be readily
calculated and for which no remedy at law would be adequate. Accordingly, the
Executive agrees that he will not (directly or indirectly) at any time, whether
during or after the Employment Term:
(i) knowingly use for an improper personal benefit any Confidential
Information that he may learn or has learned by reason of his employment with
the Company; or
(ii) disclose any such Confidential Information to any person except
(A) in the performance of his obligations to the Company hereunder, (B) as
required by a court of competent jurisdiction, (C) in connection with the
enforcement of his rights under this Employment Agreement or (D) with the prior
consent of the Board.
As used herein, "Confidential Information" includes information with respect to
the Company's facilities and methods, trade secrets and other intellectual
property, systems, patents and patent applications, procedures, manuals,
confidential reports, financial information, business plans, prospects or
opportunities, personnel information or lists of customers and suppliers;
provided, however, that such term shall not include any information that is or
becomes generally known or available publicly other than as a result of
disclosure by the Executive which is not permitted as described in clause (ii)
above, or the Company discloses to others without obtaining an agreement of
confidentiality.
(b) The Executive confirms that all Confidential Information is the exclusive
property of the Company. All business records, papers and documents and
electronic materials kept or made by the Executive relating to the business of
the Company which comprise Confidential Information shall be and remain the
property of the Company during the Employment Term and at all times thereafter.
Upon the termination of his employment with the Company or upon the request of
the Company at any time, the Executive shall promptly deliver to the Company,
and, without the express consent of the Board, shall retain no copies of any
written or electronic materials, records and documents made by the Executive or
coming into his possession concerning the business or affairs of the Company and
which comprise Confidential Information.
(c) The Executive shall keep the terms of this Agreement strictly confidential,
other than as may be necessary to enforce his rights hereunder or as otherwise
required by law, or for estate planning or personal financial reasons.
6. Non-Competition.
(a) During the Employment Term and for a period of one (1)
year after the Termination Date (the "Restricted Period"), the Executive shall
not directly or indirectly, for his own account or for the account of others,
serve as an officer, director, stockholder, owner, partner, employee, promoter,
consultant, advisor, manager or otherwise participate in the promotion,
financing, ownership, operation, or management of, or assist in or carry on
through a proprietorship, corporation, partnership or other form of business
entity or otherwise that intends to compete against the Company or any of its
affiliates or customers.
Nothing in this Section 6 shall prohibit the Executive from acquiring or holding
any issue of stock or securities of any Person that has any securities
registered under Section 12 of the Exchange Act, listed on a national securities
exchange or quoted on the automated quotation system of the National Association
of Securities Dealers, Inc. so long as the Executive is not deemed to be an
"affiliate" of such Person as such term is used in paragraphs (c) and (d) of
Rule 145 under the Securities Act and the Executive, members of his immediate
family, or persons under his control do not own or hold more than five percent
(5%) of any voting securities of any such Person.
(b) During the Restricted Period, the Executive shall not, whether for his own
account or for the account of any other person (excluding the Company):
(i) solicit or contact in an effort to do business with any person who was a
customer or a potential customer of the Company during the term of this
Agreement, or any affiliate of any such person, if such solicitation or contact
is for the purpose of competition with the Company;
(ii) solicit or induce any of the Company's employees to leave their employment
with the Company or accept employment with anyone except the Company; or
(iii) interfere in a similar manner with the business of the Company.
Nothing herein shall prohibit or preclude the Executive from performing any
other types of services that are not precluded by Section 6 (a) for any other
Person.
(c) The Executive has carefully read and considered the provisions of this
Section 6 and, having done so, agrees that the restrictions set forth in this
Section 6 (including the Restricted Period, scope of activity to be restrained
and the geographical scope) are fair and reasonable and are reasonably required
for the protection of the interests of the Company, its officers, directors,
employees, creditors and shareholders. The Executive understands that the
restrictions contained in this Section 6 may limit his ability to engage in a
business similar to the Company's business, but acknowledges that he will
receive sufficiently high remuneration and other benefits from the Company
hereunder to justify such restrictions.
7. Inventions.
(a) Disclosure of Inventions: The Executive shall promptly disclose to the
Company (or any persons designated by it) all discoveries, developments,
designs, improvements, inventions, blueprints, formulae, processes, techniques,
computer programs, strategies, and data, whether or not patentable or
registerable under copyright or similar statutes, made or conceived or reduced
to practice or learned by the Executive, either alone or jointly with others,
during the period of employment that result directly from tasks assigned to the
Executive by the Company and relate specifically to the Business or result from
the use of premises or property (including computer systems and engineering
facilities) owned, leased or contracted for by the Company (all such
discoveries, developments, designs, improvements, inventions, formulae,
processes, techniques, computer programs, strategies, blueprints, know-how and
data are hereinafter referred to as "Inventions"). The Executive will also
promptly disclose to the Company, and the Company hereby agrees to receive all
such disclosures in confidence, all other discoveries, developments, designs,
improvements, inventions, formulae, processes, techniques, computer programs,
strategies, blueprints and data, whether or not patentable or registerable under
copyright or similar statutes, made or conceived or reduced to practice or
learned by the Executive, either alone or jointly with others, during the period
of employment for the purpose of determining whether they constitute
"Inventions", as defined above.
(b) Ownership of Inventions.
(i) All Inventions shall be the sole property of the Company and its
assigns, and the Company and its assigns shall be the sole owner of all patents,
copyrights, trademarks and other rights in connection therewith. The Executive
does hereby assign to the Company any rights the Executive may have or acquire
in such Inventions. The Executive shall assist the Company (at the Company's
expense) in obtaining and, from time to time, enforcing patents, copyrights,
trademarks and other rights and protections relating to said Inventions in any
and all countries. The Executive will execute all documents necessary to apply
for and obtain such patents, copyrights, trademarks and other rights and
protections on such Inventions, as the Company may request, together with any
assignments thereof to the Company or persons designated by it. The Executive's
obligation to assist the Company in obtaining and enforcing patents, copyrights,
trademarks and other rights and protections relating to such Inventions shall
continue beyond the termination of employment, but the Company shall compensate
the Executive at a reasonable rate after the Executive's termination, for time
actually spent by the Executive at the Company's request on such assistance.
(ii) In the event the Company is unable, after reasonable effort, to
secure the Executive's signature on any document or documents needed to apply
for or prosecute any patent, copyright or other right or protection relating to
an Invention, for any reason whatsoever, the Executive does hereby irrevocably
designate and appoint the Company and its duly authorized officers and agents as
his agent and attorney-in-fact, to act for and on his behalf to execute and file
any such application or applications and to do all other lawfully permitted acts
to further the prosecution and issuance of patents, copyrights or similar
protections solely with respect to Inventions with the same legal force and
effect as if executed by the Executive and the Executive does ratify, affirm and
approve all such lawfully permitted acts accordingly.
8. Specific Performance.
The Executive acknowledges that a breach of any of the covenants contained in
this agreement may result in material, irreparable injury to the Company for
which there is no adequate remedy at law, that it will not be possible to
measure damages for such injuries precisely and that, in the event of such a
breach, any payments remaining under the terms of this Agreement shall cease and
the Company, without posting any bond, shall be entitled to obtain a temporary
restraining order and a preliminary or permanent injunction restraining the
Executive from engaging in activities prohibited by this agreement or such other
relief as may be required to enforce any of the covenants contained in this
agreement.
9. Successors; Binding Agreement.
(a) The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform if no such succession had taken place. Failure of the
Company to obtain such assumption and agreement prior to the effectiveness of
any such succession shall be a material breach of this Agreement. As used in
this Employment Agreement, "Company" shall mean the Company as defined in this
Agreement and any successor to its business or assets as aforesaid which assumes
and agrees to perform this Agreement by operation of law, or otherwise.
(b) This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amount would still be payable to him hereunder if he had continued
to live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the Executive's spouse or, if
there is no such spouse, to the Executive's estate. This Agreement is personal
to the Executive and may not be assigned by him.
10. Resignation as Officer and/or Director.
In the event that the Executive's employment is terminated for any
reason whatsoever or the Executive voluntarily terminates his employment, the
Executive agrees to resign immediately as an Officer and/or Director of Company.
11. Notice.
For the purposes of this Agreement, notices and all other communications
provided for in this Agreement shall be in writing and shall be deemed to have
been duly given when delivered by hand or mailed by United States overnight
express mail, or nationally recognized private delivery service on an overnight
basis, return receipt requested, postage prepaid, addressed as follows:
If to the Executive: Manoj Hippola
123 Saphir Avenue
Ottawa, Ontario K4B 1J9
(613) 824-7424
With copies to: Virginia K. Sourlis
The Galleria
2 Bridge Avenue
Redbank, New Jersey 07701
Telephone: (732) 530-9007
Fax: (732) 530-9008
If to the Company: Liska Biometry, Inc.
Notices may also be sent to such other address as either party may have
furnished to the other in writing in accordance herewith, except that notice of
change of address shall be effective only upon receipt.
Arbitration of Disputes.
Any controversy or claim arising out of or relating to this Agreement or the
breach hereof, other than an action brought by the Company for injunctive or
other equitable relief in the enforcement of the Company's rights under Section
8 above, in which case such action may be brought in any court of competent
jurisdiction, shall be settled by arbitration in accordance with the laws of the
Province of Ontario by a single arbitrator. Such arbitration shall be conducted
in the City of Ottawa, Ontario in accordance with the rules of the ADR Institute
of Canada. Judgment upon the award rendered by the arbitrators may be entered in
any court having jurisdiction thereof. In the event that it shall be necessary
or desirable for the Executive to retain legal counsel and/or incur other costs
and expenses in connection with the enforcement of any or all of the Executive's
rights under this Agreement, the Company shall pay (or the Executive shall be
entitled to recover from the Company, as the case may be) the Executive's
reasonable attorneys' fees and other reasonable costs and expenses in connection
with the enforcement of said rights (including the enforcement of any
arbitration award in court) in the event that an arbitration award is made in
favor of the Executive, unless and to the extent that the arbitrators shall
determine that under the circumstances recovery by the Executive of all or part
of any such fees and costs and expenses would be inequitable or otherwise
unjust.
13. Attorneys' Fees.
The prevailing party in any legal or arbitration proceedings brought by
or against the other party to enforce any provision of this Agreement shall be
entitled to recover against the non-prevailing party the reasonable attorneys'
fees, court costs, arbitration fees and other expenses incurred by the
prevailing party.
14. Representations and Warranties.
The Executive hereby represents and warrants that he is willing and
able to enter into this Employment Agreement and to render his services pursuant
hereto and that neither the execution and delivery of this Employment Agreement,
nor the performance of his duties hereunder, violates the provisions of any
other agreement to which he is a party or by which he is bound. It is further
provided that the Executive shall indemnify the Company for any and all damages
and/or expenses (including attorney's fees) that may result from a breach of
such representations.
15. Expenses.
Each party shall pay its own expenses incident to the performance or
enforcement of this Agreement, including all fees and expenses of its counsel
for all activities of such counsel undertaken pursuant to this Agreement, except
as otherwise herein specifically provided.
16. Waivers and Further Agreements.
Any waiver of any terms or conditions of this Agreement shall not
operate as a waiver of any other breach of such terms or conditions or any other
term or condition, nor shall any failure to enforce any provision hereof operate
as a waiver of such provision or of any other provision hereof; provided,
however, that no such written waiver, unless it, by its own terms, explicitly
provides to the contrary, shall be construed to effect a continuing waiver of
the provision being waived and no such waiver in any instance shall constitute a
waiver in any other instance or for any other purpose or impair the right of the
party against whom such waiver is claimed in all other instances or for all
other purposes to require full compliance with such provision. Each of the
parties hereto agrees to execute all such further instruments and documents and
to take all such further action as the other party may reasonably require in
order to effectuate the terms and purposes of this Agreement.
17. Amendments.
This Agreement may not be amended, nor shall any waiver, change,
modification, consent or discharge be effected except by an instrument in
writing executed by or on behalf of the party against whom enforcement of any
waiver, change, modification, consent or discharge is sought.
18. Severability.
If any provision of this Agreement shall be held or deemed to be, or
shall in fact be, invalid, inoperative or unenforceable as applied to any
particular case in any jurisdiction or jurisdictions, or in all jurisdictions or
in all cases, because of the conflict of any provision with any constitution or
statute or rule of public policy or for any other reason, such circumstance
shall not have the effect of rendering the provision or provisions in question
invalid, inoperative or unenforceable in any other jurisdiction or in any other
case or circumstance or of rendering any other provision or provisions herein
contained invalid, inoperative or unenforceable to the extent that such other
provisions are not themselves actually in conflict with such constitution,
statute or rule of public policy, but this Employment Agreement shall be
reformed and construed in any such jurisdiction or case as if such invalid,
inoperative or unenforceable provision had never been contained herein and such
provision reformed so that it would be valid, operative and enforceable to the
maximum extent permitted in such jurisdiction or in such case.
19. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument, and in pleading or proving any provision of this
Agreement, it shall not be necessary to produce more than one of such
counterparts.
20 Survival.
Sections 3, 4, 5, 6, 7, 8, 11, 12, and 20 shall survive the termination
of this Agreement.
21. Section Headings.
The headings contained in this Agreement are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
22. Gender.
Whenever used herein, the singular number shall include the plural, the
plural shall include the singular, and the use of any gender shall include all
genders.
23. Entire Agreement.
This Agreement together with any attachments or Exhibits hereto
contains the entire agreement of the parties and there are no other promises or
conditions in any other agreement, whether oral or written. This Agreement
supersedes any prior written or oral agreements between the parties.
24. Governing Law.
This Agreement shall be governed by and construed and enforced in
accordance with the law (other than the law governing conflict of law questions)
of the State of Florida.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first above written.
Executive:
Name: ______________________
Manoj Hippola
Liska Biometry, Inc.
By: _________________________
Lam Ko Chau
President