Employee Agreement dated July 8, 2019 between the Company and Patrick M. Lavelle

This Agreement supersedes the 2007 Agreement in its entirety and shall constitute the binding obligation of the Executive and the Company as of the Effective Date and shall continue for a period of five (5) years thereafter, unless the Agreement is terminated at an earlier date by either party in accordance with Section 4 (such period hereinafter referred to as the “Employment Period”).  

As of the Effective Date, the Executive shall continue to be employed by the Company as, and will perform the duties and responsibilities of, President and Chief Executive Officer of the Company, reporting solely and directly to the Board of Directors of the Company (the “Board”). In that capacity, Executive shall perform such services, acts, and functions necessary or advisable to oversee, manage and conduct the business of the Company, and shall perform such other duties and responsibilities as may be reasonably assigned by the Board. During the Employment Period, the Executive shall not render services to any other person or organization for compensation without the prior written approval of the Company. The Company hereby acknowledges and consents to Executive’s service as a member of the Board of Directors or Trustees (or similar position) on up to two (2) boards. At the present time, the Executive is serving on the Board of Trustees of Marist College and on the Executive Board of the Consumer Technology Association. The Executive’s principal work location shall be in Orlando, Florida, but the Executive shall travel to the extent, and to the places, reasonably necessary for the performance of the Executive’s duties hereunder.

During the Employment Period, the Executive shall serve as a voting member of the Board.

Base Salary. The Company shall pay the Executive a base salary of One Million Dollars ($1,000,000) per annum (the “Base Salary”), payable in accordance with the standard payroll practices of the Company as are in effect from time to time, less all deductions or withholdings required by applicable law. The Board may increase the Executive’s Base Salary at any time and from time to time.  The Executive shall remain eligible to elect to defer a portion of the Base Salary in accordance with the terms and conditions of the Company’s Deferred Compensation Plan.

Annual Cash Bonus. For each fiscal year of the Company during the Employment Period, the Executive shall be paid an annual bonus of (a) one percent (1%) of the Company’s Adjusted EBITDA up to and including Ten Million Dollars ($10,000,000), with no minimum Adjusted EBITDA required for this portion of the annual bonus to accrue and become payable; plus (b) two percent (2%) of the Company’s Adjusted EBITDA in excess of Ten Million Dollars ($10,000,000), with no maximum cap on this portion of the annual bonus payable based upon the Company’s Adjusted EBITDA ((a) and (b), collectively, the “Annual Cash Bonus”). The Annual Cash Bonus shall be determined at the end of each fiscal year of the Company in accordance with generally accepted accounting principles, as in effect from time to time in the United States of America, consistently applied. In addition, subject to the approval of the non-management members of the Board, the Ten Million Dollars ($10,000,000) threshold (the “Threshold”) set forth in subsections (a) and (b) above shall be subject to adjustment in accordance with the following:

the Threshold may only be adjusted as a result of an acquisition, divestiture or investment to the extent that the Company Adjusted EBITDA is impacted by a minimum of Five Million Dollars ($5,000,000);

in connection with any Company divestiture, the Threshold may only be adjusted to the extent that the Company Adjusted EBITDA is impacted by a cumulative minimum (across all such divestitures by the Company following the Effective Date) of Five Million Dollars ($5,000,000);

in the event of an increase or decrease in the Company’s Adjusted EBITDA as a result of an acquisition, divestiture or investment by the Company, the maximum upward or downward adjustment to the Threshold shall be the increased or decreased Adjusted EBITDA attributable to that acquisition, divestiture or investment; provided, however, that the Company may choose to increase or decrease the Threshold by a lesser amount; and

the Threshold shall not be adjusted in any manner in connection with any action the Company takes with respect to EyeLock LLC including, without limitation, changes in accounting methodology such as accounting treatment of minority interest.  

Stock Grants.

Market Stock Units.   The Company shall grant the Executive shares of the Company’s common stock, or the equivalence in cash, up to a maximum value of Five Million Dollars ($5,000,000), based on the closing NASDAQ Price exceeding $5.00/share during the five (5) year period ending on the Fifth Anniversary Date (the “Market Stock Units”) in accordance with the Market Stock Units calculation set forth on Schedule A. Other than as set forth in Section 3.5B(2) or Section 3.6 below, the form of payment of the Market Stock Units at the time of distribution shall be determined by the mutual agreement of the parties in good faith, taking into consideration (among other items not enumerated herein) the tax obligations of Executive resulting from such distribution and the current financial status of the Company.  In the absence of the mutual agreement of the parties, the Market Stock Units shall be paid in shares of the Company’s common stock.

on the third anniversary of the Effective Date (the “Third Anniversary Date”), the Executive shall become vested in Market Stock Units equal to eighty percent (80%) of the value determined under Schedule A hereto as of such date; and

on the fifth anniversary of the Effective Date (the “Fifth Anniversary Date”), the Executive shall become vested in Market Stock Units equal to twenty percent (20%) of the value determined under Schedule A hereto. as of such date.

Change in Control.

The acquisition, directly or indirectly, by any “person” (within the meaning of Section 3(a)(9) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) and used in Sections 13(d) and 14(d) thereof) of “beneficial ownership” (within the meaning of Rule 13d-3 of the Exchange Act) of securities of the Company which results in the Shalam Group owning less than fifty percent (50%) of the total combined voting power of all outstanding securities of the Company;

A merger, consolidation or reorganization in which the Company is not the surviving entity, except for a transaction in which the Shalam Group owns securities possessing fifty percent (50%) or more of the total combined voting power of all outstanding voting securities of the surviving entity immediately after such merger or consolidation;

A reverse merger in which the Company is the surviving entity but which results in the Shalam Group owning securities possessing less than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the Company;

The sale, transfer or other divestiture (in one transaction or a series of transactions) of all or substantially all of the assets of the Company to a third party;

Any other event, including but not limited to, a redemption, which results in the Shalam Group owning less than fifty percent (50%) of the total combined voting power of all outstanding voting securities of the Company. For purposes of the foregoing clause, the sale of stock of a subsidiary of the Company (or the assets of such subsidiary) shall be treated as a sale of assets of the Company;

The approval by the stockholders of a plan or proposal for the liquidation or dissolution of the Company; or

Any other event which results in the Shalam Group owning less than ten percent (10%) of the total combined voting power of all outstanding voting securities of the Company.

all Stock Grants to which the Executive would have been entitled shall become one hundred percent (100%) vested and be distributed to the Executive (subject to the Net Share provisions of Section 3.3D) and the Hold Requirement shall terminate. Notwithstanding the Executive’s right to the benefits provided under this Section 3.5B, provided the Executive remains employed by the Company, the Executive shall resume participation in all stock-based compensation programs at the Company available to employees following a Change in Control.  Any Stock Grant shares to which Executive is entitled to under this Section 3.5B shall be immediately saleable by him subject to normal federal and state Securities law limitations.

all of the Market Stock Units that have not been issued and/or not vested pursuant to the terms of Section 3.4 shall immediately fully vest and be distributed to the Executive (subject to the Net Share provisions of Section 3.3D as applicable) based on the highest of (A) the value set forth on Schedule A attributable to the High Stock Price prior to the Change in Control event, (B) the closing NASDAQ Price immediately prior to the Change in Control, or (C) the price at which the shares of stock of the Company are valued, sold or otherwise transferred for purposes of the Change in Control.

Tag-Along Right.  

Employee Benefit Plans. Except as set forth in Section 3.3A above regarding the Executive’s ineligibility to receive awards of restricted stock units under the Incentive Plan, during the Employment Period, the Executive (and, if permitted by the terms of the plans, his family) shall be eligible to participate in all retirement, deferred compensation, profit sharing, medical, disability and other welfare plans (the “Employee Benefit Plans”) applicable to senior executive officers of the Company generally in accordance with the terms of such plans as in effect from time to time. The foregoing shall not be construed to limit the ability of the Company or any of its affiliates to amend, modify or terminate any such benefit plans, policies or programs at any time or from time to time; provided that at all times the Company shall continue to maintain, either by group or separate, individual plans for the benefit of the Executive (including, to the extent permitted, his family), with not less than the level of the benefits the Executive is receiving under the Employee Benefit Plans on the Effective Date.

Executive Life Insurance. During the Employment Period, the Company shall maintain and pay all premiums on one or more term life insurance policies for the benefit of the Executive, as such policies are made available from time to time to Vice Presidents of the Company (and subject to any age-based reductions in benefits in accordance with the terms of such policies) (collectively, the “Life Insurance Policy”), payable to the Executive's designated beneficiaries.

Vacation/Paid Time Off. During the Employment Period, the Executive shall be entitled to not less than four (4) weeks paid vacation each fiscal year and Company-wide paid-time off days at such times as will not materially interfere with the performance of the Executive’s duties.

Automobile. The Company shall lease and shall pay all insurance, maintenance, repair and other charges relating to, a late model luxury automobile for use by the Executive.

Expense Reimbursement. During the Employment Period, the Executive shall be entitled to utilize Company credit cards for Company business related activities. Furthermore, the Company shall pay or promptly reimburse the Executive for all reasonable expenses, including reasonable business travel expenses, incurred by the Executive in connection with his duties and responsibilities hereunder upon submission of appropriate documentation or receipts in accordance with the policies and procedures of the Company as are in effect from time to time.

Termination Without Cause or Resignation for Good Reason.

Disability. For purposes of this Agreement, “disability” shall have the same definition of disability as triggers payments to the Executive under the Company provided disability insurance policy covering the Executive, as in effect at the time the determination of “disability” is to be made. If no such policy is then in effect, then “disability” shall mean the Executive’s inability, by reason of any physical or mental injury or illness, to substantially perform the services required by him hereunder for a period in excess of ninety (90) Business Days in any three hundred sixty (360) day period. In such event, Executive’s employment shall be deemed to have terminated by reason of disability on the last day of such ninety (90) Business Day period.

Cause Defined. For purposes of this Agreement, “Cause” shall mean a termination of the Executive’s employment by the Company due to any of the following reasons:

The entry of a final non-appealable judgment of conviction of the Executive by a court for a felony, or entry of a plea of nolo contendere by the Executive to such a felony;

The Executive’s willful failure, or gross negligence, other than by reason of his disability or legal incompetence, to substantially carry out his duties hereunder within ten (10) Business Days of written notice from the Board of Directors, specifying such failure or gross negligence; or

Executive’s willful engagement in illegal or fraudulent conduct or his willful violation of any material laws applicable to the Executive.

Good Reason. For purposes of this Agreement, a resignation for “Good Reason” shall mean the Executive’s resignation: (A) within twelve (12) months of a Change in Control; or (B) within one hundred eighty (180) days following: (1) the Executive’s not being a voting member of the Board; (2) Executive’s written notice to the Company of (i) a material reduction in the scope of the Executive’s powers, duties, title or responsibilities, (ii) the assignment to the Executive of duties materially inconsistent with this Agreement or a material adverse change in his title or authority or (iii) the Company’s material breach of this Agreement; or (3) Executive’s written notice to the Company of a change in the Executive’s primary place of work to a location that is more than fifty (50) miles from Orlando, FL, in each case which is not cured by the Company within twenty (20) Business Days of receiving such notice from the Executive.

Termination Procedure. The Company may terminate the Executive’s employment hereunder at any time without Cause on twenty (20) Business Days’ prior written notice to the Executive (the term “Business Day” meaning a day other than one on which commercial banks in New York City are permitted or required to close). The Executive may terminate his employment hereunder for Good Reason at any time on twenty (20) Business Days prior written notice to the Company (subject to the various notice and cure provisions of Section 4.1C above).  The Date of Termination in either such event shall be the twentieth (20^th) Business Day following the giving of such notice.

Accrued Obligations.  Upon the Executive’s Date of Termination (regardless of the reason for such termination), the Executive shall be entitled to receive:

his Base Salary through and including the Date of Termination,

any bonus(es) actually awarded and earned for prior completed fiscal years, but not yet paid as of the Date of Termination,

reimbursement for all expenses incurred in accordance with Section 3.11 of this Agreement, but not yet paid, as of the Date of Termination,

payment of the per diem value of any unused vacation days and paid-time off days which accrued through the Date of Termination, based upon Executive’s most recent level of Base Salary,

any and all vested benefits under the Employee Benefit Plans (including, but not limited to, awards under the Incentive Plan); and

any and all amounts the Executive has elected to defer during the Term of this Agreement (collectively (1)-(6), the “Accrued Obligations”).

Post-Employment Benefits. In addition to the Accrued Obligations, if the Company terminates the Executive’s employment hereunder without Cause (other than due to death or disability) or if the Executive terminates his employment hereunder for Good Reason, the Executive, upon execution of mutual releases reasonably satisfactory to the Executive and the Company (and the non-revocation of such release by the Executive), and provided the Executive is in compliance with his duties and obligations under Section 5 hereof, shall be entitled to receive only:

for two (2) years (the “Separation Period”), an amount equal to two (2) times the Base Salary (as of the Date of Termination), which shall be paid in equal installments on a monthly basis during the Separation Period (the “Separation Payment”);

a pro rata portion of the Average Bonus set forth in Section 4.1F(2), determined based on the numbers of full months worked in the fiscal year prior to the Date of Termination divided by twelve, times the Average Bonus, which shall be paid in equal installments on a monthly basis during the Separation Period;

an amount in cash equal to the average of the Annual Cash Bonuses awarded in the two (2) years immediately preceding the year in which the Date of Termination occurs (the “Average Bonus”), payable in equal installments on a monthly basis during the Separation Period (the “Severance Bonus”);

all stock based compensation, including all Stock Grants to which the Executive would have been entitled had his employment not been terminated, shall become one hundred percent (100%) vested and be distributed to the Executive as soon as administratively practicable following the Date of Termination (to the extent not already fully vested and distributed pursuant to the Tag Along Sale provisions or otherwise);

distribution of all Market Stock Units (as determined under Section 3.4) which have not previously vested or been distributed to Executive shall become one hundred percent (100%) vested and be distributed in their entirety to the Executive as soon as administratively practicable following the Date of Termination (to the extent not already fully vested and distributed).  For purposes of determining the number of any Market Stock Units due to the Executive not already distributed pursuant to Section 3.5B, they shall be calculated using the High Stock Price for the period immediately preceding the Date of Termination;

rights to indemnification as set forth in Section 6 of this Agreement; and

(a) continuation throughout the Separation Period of the Life Insurance Policy, and upon completion of such period, ownership of the Life Insurance Policy shall be transferred to the Executive at no cost to the Executive; and (b) continuation during the Separation Period or until the Executive begins to participate in a subsequent employer’s medical plan, of medical, disability and other health coverages at the level in effect on and at the same out-of-pocket cost to the Executive as of, the Date of Termination; it being understood that the period of coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) shall commence on the first day following the Date of Termination.

Expiration of the Agreement.

Termination.  At least six (6) months prior to the expiration of the Agreement, the Company shall have the option to provide Executive with written notification of its desire to extend the Employment Period beyond the five (5) year term set forth in Section 1.1.  Such written notification shall set forth the desired length of the Executive’s continued employment by the Company.  Upon receipt of such notice from the Company, if such notice is provided, Executive shall have the ability to accept or reject such request.  For the avoidance of doubt, if notification is not provided by the Company prior to such six (6) month date, the Agreement shall expire at the end of the Employment Period.  Upon the expiration of the Agreement, the employment relationship created pursuant to this Agreement shall immediately terminate, and no further compensation shall be payable to Executive except as provided herein in this Section 4.2.

Post-Employment Benefits.  In addition to the Accrued Obligations, upon the expiration of this Agreement, the Executive, upon execution of mutual releases reasonably satisfactory to the Executive and the Company (and the non-revocation of such release by the Executive), and provided the Executive is in compliance with his duties and obligations under Section 5 hereof, shall be entitled to receive only:

a lump sum payment equal to One Million Dollars ($1,000,000) to be made as soon as administratively practicable following the Date of Termination;

all stock based compensation previously awarded and outstanding shall be fully vested and distributed (to the extent not already fully vested and/or distributed) on a pro rata basis based on the number of days prior to the Date of Termination in the relevant performance period (excluding any requirement for continued employment to qualify for such stock based compensation);

distribution of any vested Market Stock Units (as determined under Section 3.4) which have not previously vested and distributed to Executive; and

rights to indemnification as set forth in Section 6 of this Agreement.

Termination.   Upon Executive’s death or disability during the Employment Period, the employment relationship created pursuant to this Agreement shall immediately terminate, and no further compensation shall be payable to Executive except as provided herein in this Section 4.3.

Post-Employment Benefits.  Date of Termination shall be the date of death or disability, as the case may be, and in such event, in addition to the Accrued Obligations, the Executive shall be entitled to receive only:

a pro rata portion of the Average Bonus set forth in Section 4.1F(2), determined based on the numbers of full months worked in the fiscal year prior to the Date of Termination divided by twelve, times the Average Bonus which shall be paid in Equal installments on a monthly basis during the Separation Period;

in the event of termination by reason of disability, (a) payments  equal to the Base Salary less amounts payable under the Company’s long-term disability policy during the one year period following the Date of Termination, which shall be paid in equal monthly installments during the 12 month period following the Date of Termination; (b) continuation throughout the Separation Period of the Life Insurance Policy, and upon completion of such period, ownership of the Life Insurance Policy shall be transferred to the Executive at no cost to the Executive; and (c) continuation during the Separation Period or until the Executive begins to participate in a subsequent employer’s medical plan, of medical, disability and other health coverages at the level in effect on, and at the same out-of-pocket cost to the Executive as of, the Date of Termination; it being understood that the period of coverage under COBRA shall commence on the first day following the Date of Termination;

in the event of termination by reason of death, the Company shall take the steps reasonably necessary to have all proceeds from the Life Insurance Policy promptly paid to the beneficiaries designated thereunder;

rights to indemnification as set forth in Section 6 of this Agreement;

all stock based compensation previously awarded and outstanding shall be vested (to the extent not already fully vested) on a pro rata basis based on the number of days prior to the Date of Termination in the relevant performance period (excluding any requirement for continued employment to qualify for such stock based compensation); and

distribution of any vested Market Stock Units (as determined under Section 3.4) which have not previously been distributed to Executive.

Termination. Upon the termination of Executive’s employment for Cause or the Executive resignation without Good Reason, the employment relationship created pursuant to this Agreement shall immediately terminate, and no further compensation shall be payable to Executive except as provided herein in this Section 4.4.

Post-Employment Benefits. In addition to the Accrued Obligations, if the Executive’s employment is terminated by the Company for “Cause”, or the Executive resigns from his employment hereunder for any reason other than for “Good Reason”, the Executive shall be entitled to receive only the following:

rights to indemnification as set forth in Section 6 of this Agreement;

transfer of ownership of the Life Insurance Policy to the Executive, without further obligation of the Company to pay premiums;

retention of all stock-based compensation and vested awards under the Incentive Plan previously awarded, which shall be held by the Executive until, and may be executed at any time prior to, their expiration; and

distribution of any vested Market Stock Units (as determined under Section 3.4) which have not previously been distributed to Executive.

Hearing Procedure. The existence of Cause must be confirmed by not less than a majority of the Board with the existence of a quorum at a meeting called for such purpose prior to any termination.  At the discretion of the Chair or a majority of the independent directors of the Board, such meeting will exclude management members of the Board.

Upon the Board’s confirmation of the existence of Cause (following any and all necessary investigations into its existence, as determined by the Board), the Company shall notify the Executive that the Company intends to terminate the Executive’s employment for Cause under this Section 4.4C (the “Confirmation Notice”).  The Confirmation Notice shall specify in detail the act, or acts, that the Board believes triggered the existence of Cause and the Confirmation Notice must be delivered to the Executive within fifteen (15) Business Days after the Board confirms the existence of Cause.

If the Executive notifies the Company in writing (the “Opportunity Notice”) within twenty (20) Business Days after the Executive has received the Confirmation Notice, the Executive (together with counsel) shall be provided the opportunity to meet formally with the Board (or a sufficient quorum thereof) to discuss such act or acts. The meeting with the Board shall occur at a mutually agreed upon date, but in no event more than twenty (20) Business Days after the Company receives the Opportunity Notice from the Executive, and at the Company's headquarters or mutually agreed upon location. If the Board in good faith does not rescind its confirmation of Cause at such meeting, the Company shall immediately upon the closing of such meeting, deliver to the Executive a Notice of Termination for Cause under this Section 4.4C.

If the Executive does not respond in writing to the Confirmation Notice in the manner and within the time period specified in Section 4.4C(2) above, the Company shall thereafter issue a Notice of Termination for Cause which shall set forth the date on which the Company intends to terminate the Executive’s employment.

The Date of Termination shall be the date specified in the Notice of Termination for Cause.

The procedure set forth in this Section 4.4C to determine the existence of Cause shall at all times be subject to the requirements of applicable law, regulation, regulatory bulletin or other regulatory requirements.

Resignation without Good Reason. A resignation by the Executive without Good Reason shall take effect on, and the Date of Termination shall be, the date specified in the written notice of resignation from the Executive to the Company provided that such date shall be at least ninety (90) days after the date such written notice is given.  In the event that the written notice of resignation exceeds ninety (90) days, the Board, at its sole discretion, may adjust the Date of Termination so long as the adjusted Date of Termination is no less than ninety (90) days from the date of written notice from the Executive.  The Board may elect to provide written notice to the Executive directing him not to report to the Company for service during all or any portion of the ninety (90) day notice period, during which period the Company shall continue to pay the Executive’s Base Salary and other benefits in accordance with the terms of this Agreement.  The Executive shall be entitled to the Post-Employment Benefits provided in section 4.4B above.

No Mitigation; No Offset. In the event of any termination of employment under this Section 4, except if the termination is a resignation without Good Reason, the Executive shall be under no obligation to seek other employment or to mitigate damages and there shall be no offset against any amounts due the Executive under this Agreement. Any amounts due under this Section 4 are in the nature of separation benefits, or liquidated damages, or both, and are not in the nature of a penalty. Until the Date of Termination, the Executive shall be entitled, to the extent not prohibited by applicable law, regulation, regulatory bulletin, and/or any other regulatory requirement, as the same exists or may hereafter be promulgated or amended, to be paid his then Base Salary, and otherwise to continue to receive all other benefits to be paid to him during the Employment Period, and there shall be no reduction whatsoever of any amounts payable to the Executive, hereunder.

No Obligation. Subject to the terms of this Agreement, the Company shall have no obligation to continue or maintain any Employee Welfare Benefit Plan for any other employees solely as a result of the provisions of this Agreement.

Section 409A. If the Executive is a “specified employee” (as defined in Section 409A of the Internal Revenue Code of 1986, as amended) on the Date of Termination, the Company shall not make any payments of “nonqualified deferred compensation” (for purposes of Section 409A of the Code) to the Executive pursuant to Section 4 until one day following the six month anniversary of the Date of Termination, and the amount payable on that day shall equal the sum of all amounts that would otherwise have been paid during the first six months immediately following the Date of Termination.  To the extent payments of “nonqualified deferred compensation” (for purposes of Section 409A of the Code) to be made under this Section 4 are conditioned upon the Executive’s execution and non-revocation of a release, such payments shall commence on the sixtieth (60^th) day following the Date of Termination and the payment on that date shall be inclusive of all payments of “nonqualified deferred compensation” in arrears that would have otherwise been paid during such 60 day period.

Confidential Information.

The Executive agrees and acknowledges that during the performance of his duties with the Company he will receive and have access to confidential, proprietary, and/or trade secret information concerning the Company (hereinafter “Confidential Information”). “Confidential Information” means information which has substantial value to the Company, regardless of form or characteristic, and which: (a) the Company does not make available to the public, industry, or third parties; (b) relates to the Company’s business operations, products, processes, business plans, purchasing, marketing, clients, suppliers, or service providers; and (c) may include (i) financial information and data, (ii) information pertaining to personnel and compensation, (iii) marketing plans and related information, (iv) the names, lists, contact information, and practices of clients and vendors, (v) plans, products, designs, design concepts, drawings, software, developments, memoranda, data, improvements, and methods of operation, (vi) computer software (including object code and source code), data and databases, outcome research, documentation, instructional material, inventions, processes, formulas, technology, designs, drawings, engineering, hardware, configuration information, models, manufacturing processes, sales and cost information, and (vii) business methods, techniques, plans, and the information contained therein.

During the Employment Period and thereafter, the Executive agrees that he will not publish, use or disclose Confidential Information to anyone other than authorized Company personnel. The Executive specifically agrees that he will not make use of any such Confidential Information for his own purpose, or for the benefit of any person, firm, company or other entity except for the benefit of the Company.

During the Employment Period and thereafter, the Executive agrees that he will not remove any printed, written, recorded, electronic, or graphic material, or any reproduction thereof, constituting, containing or reflecting Confidential Information from the Company's premises, except for legitimate purposes of Company business. At the time his employment with the Company ceases, and as a condition to receive any post-employment benefits under this Agreement, the Executive agrees that he will return any and all materials and/or reproductions constituting, containing or reflecting Confidential Information in his possession or under his custody or control to the Company and certify that he has done so.

The Defend Trade Secrets Act of 2016 (the “DTSA”) provides that: (1) an individual shall not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret that:  (A) is made – (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. The DTSA further provides that: an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual: (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.

Covenant Not To Compete. For purposes of the covenant in this Section 5.2, a Competitive Enterprise is any business enterprise located in the United States that engages in any activity or owns a majority voting interest in any entity that engages in any activity, that competes with the Company. The Executive hereby covenants and agrees that during the course of his employment and for 24 months thereafter (the “Restricted Period”), Executive shall not directly or indirectly (a) form, or acquire a five percent (5%) or greater equity ownership interest in, or receive economic benefit (including any economic benefit that is earned or paid on a deferred basis) from any Competitive Enterprise provided that this restriction shall not apply to a Competitive Enterprise whose securities are publicly traded; or (b) become an employee, officer, partner, director, consultant, agent or advisor of any Competitive Enterprise within the United States.

Non-Solicitation. During the Restricted Period, the Executive expressly agrees not to (1) call upon, solicit, sell or attempt to sell any product or services in competition with those offered by the Company to

any person or firm that was a customer of the Company at any time during the twelve (12) month period prior to the Date of Termination; or

any person or firm that was a prospective customer of the Company during the twelve (12) month period preceding the Date of Termination; or (2) directly or indirectly, solicit, induce, or call upon any employee of the Company to terminate his employment with the Company.

Non-Disparagement.

During the Employment Period and thereafter, the Company and Executive agree that they shall not, directly or indirectly, make or cause or assist any other person to make, any statement or other communication, regardless of form, which impugns or attacks, or is otherwise critical of the reputation, business or character of the other, including any of the officers, directors, employees, products or services of the Company.

Nothing in this Agreement is intended to or shall be interpreted:  (i) to restrict or otherwise interfere with Executive’s obligation to testify truthfully in any forum; (ii) to restrict or otherwise interfere with Executive’s right and/or obligation to contact, cooperate with, provide information in confidence to, report possible violations of federal, state or local law, ordinance or regulation – or testify or otherwise participate in any action, investigation or proceeding of – any government agency, entity or commission (including but not limited to the EEOC, the Department of Justice, the Securities and Exchange Commission, the Congress and any Agency Inspector General) or otherwise taking action or making disclosures that are protected under the whistleblower provisions of any federal, state or local law, ordinance or regulation, including, but not limited to, Rule 21F-17 promulgated under the Securities Exchange Act of 1934, as amended, in connection with which, for the avoidance of doubt,  Executive shall be entitled to make reports and disclosures or otherwise take action under this section without prior authorization from or subsequent notification to the Company; (iii) to restrict or otherwise interfere with Executive’s right and/or obligation to disclose any information or produce any documents as is required by law or legal process, (iv) to restrict Executive’s right to disclose documents and information in confidence to any attorney, financial advisor, or tax preparer or other tax professional for purposes of securing professional advice; (v) to restrict Executive’s right to use or disclose documents and information to the extent reasonably necessary in connection with enforcing or defending his legal rights; or (vi) to restrict Executive’s ability to disclose his post-employment restrictions in confidence in connection with any potential new employment or business venture.

Enforceability. Each covenant in this Section 5 shall be enforceable against the Executive during the Employment Period and during the Restricted Period. If any covenant in this Section 5 is held to be unenforceable or against public policy by the tribunal designated in Section 8 below or, if appropriate, by a court of competent jurisdiction, such covenant will be considered to be divisible with respect to scope, time and geographic area, and such lesser scope, time or geographic area, or all of them, as a court of competent jurisdiction may determine to be reasonable, will be binding and enforceable against the Executive.