Employment Agreement - ImageWare Software Inc. and Wayne Wetherell
IMAGEWARE SOFTWARE, INC.
EMPLOYMENT AGREEMENT
(AMENDED MARCH 1, 1999)
This EMPLOYMENT AGREEMENT ("Agreement") which was entered into as of
April 1, 1997 by and between ImageWare Software, Inc., a California
Corporation (herein the "Company") and Wayne Wetherell (herein "Wetherell")
at San Diego, California, is amended to read in full as hereinafter set forth.
It is hereby agreed as follows:
1. EMPLOYMENT AND TERM. The Company hereby employs Wetherell as the
Chief Financial Officer of the Company, and Wetherell agrees to his
employment by the Company as its Chief Financial Officer, the term of which
employment shall be a period of three years commencing March 1, 1999 and
ending April 30, 2002.
2. DUTIES. During the term of this Agreement, Wetherell shall devote
substantially all of his working time, energies and skills to day to day
significant operating matters of the Company, including managing its
financial affairs. Wetherell shall render services consistent with those of
the Chief Financial Officer of a corporation and shall perform all duties
incident to such office and all such further managerial duties that may from
time to time be assigned to him by the President and Chief Executive Officer
of the Company or its Board of Directors.
3. COMPENSATION. Wetherell's compensation under this Agreement shall
be as follows:
(a) BASE SALARY. The Company shall pay to Wetherell a base salary
(the "Base Salary") of $112,144 per year from March 1, 1999 through April 30,
2002. In addition, each year during the term of this Agreement, Wetherell
shall be reviewed for purposes of determining the appropriateness of
increasing his salary hereunder, provided that in any event, Wetherell shall
receive a cost-of-living increase equal to the percentage by which the
Consumer Price Index applicable to the San Diego area increased during the
prior fiscal year. Such Base Salary shall be payable in semi-monthly
installments in accordance with the regular employee payment practice of the
Company. All payments shall be subject to the deduction of payroll taxes and
similar assessments as required by law.
(b) BONUS. In addition to his Base Salary, Wetherell shall be
eligible to participate in any Company Bonus Plan, adopted from time to time
by the Board of Directors.
4. EXPENSES AND BENEFITS. Wetherell is authorized to incur reasonable
expenses in connection with the business of the Company, including expenses
for entertainment,
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travel and similar matters. The Company will reimburse Wetherell for such
expenses upon presentation by Wetherell of such accounts and records as the
Company shall from time to time reasonably require. The Company also agrees
to provide Wetherell with the following benefits:
(a) INSURANCE. Major medical health insurance and disability
insurance which shall provide not less than two-thirds of Wetherell's then
current Base Salary in disability payments commencing three months after
permanent or partial disability occurs and life group or term life insurance
in an amount equal two times Wetherell's Base Salary.
(b) EMPLOYEE BENEFIT PLANS. Participation in any other employee
benefit plans now existing or hereafter adopted by the Company for its
employees.
(c) VACATIONS. Wetherell shall be entitled to a paid vacation for
a period in each calendar year of not less than three weeks, to be taken at
such times as mutually agreed with the Company.
5. TERMINATION. Except as otherwise provided herein, this Agreement
shall terminate upon the first to occur of the expiration of the term
provided for in Section 1 or the death of Wetherell. However, nothing
contained in this Section 5 shall be construed to abrogate the obligations of
the Company to Wetherell, or his personal representative, or his heirs, as
the case may be, in respect of all rights which shall accrue prior or
subsequent to termination.
6. DISABILITY. In the event that Wetherell becomes permanently
disabled during the term of this Agreement, then Wetherell shall continue in
the employ of the Company, but his compensation hereunder shall be limited to
the amount of his Base Salary then in effect, as set forth in Section 3(a)
hereof, which compensation shall be reduced by any amounts which Wetherell
receives from worker's compensation, social security, state disability
programs or the disability insurance provided by the Company to Wetherell. In
such event, Wetherell's employment hereunder shall continue after his
permanent disability and until the first to occur of (a) the expiration of
the term specified in Section 1, or (b) the death of Wetherell, or (c) one
year from the date he is determined to be permanently disabled; and during
such period of time Wetherell shall not be entitled to payment of expenses or
benefits specified in Section 4 hereof, except that the Company shall
continue to provide Wetherell with the insurance benefits specified in
Section 4(b) hereof.
(a) DEFINITION OF DISABILITY. As used in this Agreement, the term
"permanent disability" shall mean three (3) months of substantially
continuous disability. Disability shall be deemed "substantially continuous"
if, as a practical matter, Wetherell by reason of his mental or physical
health, is unable to sustain reasonably long periods of substantial
performance of his duties. Frequent long illnesses, though different from the
preceding illness and though separated by relatively short periods of
performance, may be deemed to be "substantially continuous". Disability shall
be determined in good faith by a vote of not less than 75% of the Board of
Directors of the Company, whose decision shall be final and binding upon
Wetherell. Wetherell hereby consents to medical examinations by such
physicians and medical consultants as the Company shall from time to time
require.
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7. TERMINATION BY COMPANY FOR CAUSE. The Company shall have the right
to terminate Wetherell's employment as Chief Financial Officer of the Company
for "Cause," in which event no compensation shall be paid or other benefits
furnished to Wetherell after termination for Cause. Whether Cause exists
shall be determined in good faith by the Board of Directors of Company and
shall require a vote of not less than 75% of such Directors. Termination for
Cause shall be effective immediately upon notice being sent to Wetherell.
(a) DEFINITION OF CAUSE. As used in this Agreement, the term
"Cause" shall mean (1) any material act of dishonesty by Wetherell against
the Company; or (2) willful misconduct or gross negligence by Wetherell in
carrying out his duties as Chief Financial Officer of the Company; or (3)
material breach of this Agreement by Wetherell; or (4) misconduct by
Wetherell, such as intoxication on the job, use of illegal drugs,
insubordination or other misconduct which has a substantial adverse effect on
the business of the Company; or (5) other circumstances indicative of
Wetherell's failure materially to comply with the terms of his employment and
which have had or may have a substantial adverse effect on the business of
the Company.
8. TERMINATION BY COMPANY OTHER THAN FOR CAUSE. The Company shall
have the right to terminate Wetherell's employment as of or prior to the
expiration of the term of his employment provided in this Agreement, without
cause. In the event Wetherell's employment is terminated prior to the
expiration of the term of his employment, then the Company shall continue to
pay Wetherell the full amount of his Base Salary for a period of one year
from the date of his termination of employment.
9. RESIGNATION BY WETHERELL FOR CAUSE--CHANGE IN CONTROL OR DIMINUTION
IN DUTIES. In the event that there is a change in Control of the Company or
in the event that the Board of Directors materially reduces the scope and/or
authority of Wetherell's duties as Chief Financial Officer of the Company,
then Wetherell may terminate his employment by giving the Company 30 days
advance written notice. In such event, Wetherell shall be entitled to payment
of his entire unpaid Base Salary for a period of one year from the date of
his termination of employment.
(a) As used in this Agreement, the term "Change of Control" shall
mean the occurrence of any of the following events during the term hereof:
(i) Any "person" (such as that term is used in Section 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, or securities of the Company
representing 50% or more of the total voting power represented by the
Company's then outstanding voting securities; or
(ii) Any merger or consolidation of the Company with any other
corporation, other than a merger or consolidation that would result in the
voting securities
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of the Company outstanding immediately prior thereto continuing to represent
50% or more of the total voting power represented by the Company's then
outstanding voting securities (either by remaining outstanding or by being
converted into voting securities of the Company or such other surviving
entity outstanding immediately after such merger or consolidation); or
(iii) A majority of the directors of the Company which were
not nominated by the Company's management (or were nominated by management
pursuant to an agreement with persons that acquired sufficient voting
securities of the Company to de facto control it) are elected to the Board of
Directors by the Company's shareholders; or
(iv) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets.
10. INDEMNIFICATION. The Company shall enter into an Officers and
Directors Indemnification Agreement with Miller that shall provide the
Executive with the maximum amount of protection allowed under the laws of
California to the extent that they are not inconsistent with the Company's
Articles of Incorporation or Bylaws with respect to such subject matter.
11. NO PROSELYTIZING OF EMPLOYEES. During the term of Wetherell's
employment and for a period of 24 months following termination of his
employment (for whatever reason), Wetherell shall not, on his own behalf or
on behalf of any other person or entity, directly or indirectly, solicit or
encourage any person then an employee of the Company to leave the employ of
the Company for the purpose of forming or joining another business.
12. NO SOLICITATION OF CUSTOMERS. During the term of Wetherell's
employment and for a period of 24 months following termination of his
employment (for whatever reason), Wetherell shall not, on his own behalf or
on behalf of any other person or entity, directly or indirectly, solicit,
entice away or divert any person or entity then a client of customer of the
Company to become a client or customer of any other person or entity.
13. GENERAL PROVISIONS.
(a) NOTICES. Any notices to be given hereunder by either party to
the other shall be in writing and may be effected either by personal delivery
or by fax, private courier, or certified mail, postage prepaid with return
receipt requested. Mailed notices shall be addressed to the parties at the
addresses set forth below, but each party may change his or its address by
written notice in accordance with this Section 11(a). Notices delivered
personally shall be deemed communicated as of actual receipt; faxes, private
courier deliveries or mailed notices shall be deemed communicated as of one
day after faxing, delivery to a private courier or mailing.
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If to Wetherell--
Mr. Wayne Wetherell
12320 Del Mar Oaks
San Diego, California 92130
If to the Company--
ImageWare Software, Inc.
15373 Innovation Drive, Suite 120
San Diego, California 92128
(b) SEVERABILITY. If any provision in this Agreement is held by
a court of competent jurisdiction to be invalid, void, or unenforceable, the
remaining provisions shall nevertheless continue in full force without being
impaired or invalidated in any way.
(c) LAW GOVERNING AGREEMENT. This Agreement shall be governed by
and construed in accordance with the laws of the State of California.
(d) ASSIGNMENT. This Agreement shall inure to the benefit of and
bind the parties hereto and their respective legal representatives,
successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first above written.
ImageWare Software, Inc.
By /s/ S. James Miller, Jr.
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S. James Miller, Jr.
President and Chief Executive Officer
/s/ Wayne Wetherell
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Wayne Wetherell
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