EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”), effective the 1st day of October,
2017 (the “Effective Date”), is entered into by and between Document Security
Systems, Inc., having a business address at 200 Canal View Boulevard, Suite 300,
Rochester, NY 14623 (the “Company”) and Fai H. Chan, having a business address
at 7 Temasek Boulevard #29-01B, Suntec Tower One, Singapore 038987 (the
“Executive”).

 

1. Term of Employment. The Company agrees to employ the Executive, and the
Executive agrees to work for the Company, upon the terms set forth in this
Agreement, for the period commencing on the date hereof (the “Commencement
Date”) and ending on the three (3) year anniversary hereof (the “Term”). This
Agreement shall terminate in accordance with the provisions of Section 4, below.

 

2. Title; Capacity.

 

2.1 Position. The Company will employ the Executive, and the Executive agrees to
serve as the Chief Executive Officer of the Company’s subsidiary DSS
International Inc. (“DSS International”) and DSS International’s subsidiary DSS
Asia Limited (“DSS Asia”), to perform the duties and responsibilities inherent
in such position and such other duties and responsibilities consistent with such
position as the Executive Committee (the “Executive Committee”) of the DSS
International Board of Directors shall from time to time assign to him. The
Executive shall report directly to the Executive Committee and shall be subject
to the supervision of, and shall have such authority as is delegated to him by,
the Executive Committee, which authority shall be sufficient to perform his
duties hereunder. In addition, the Executive shall be delegated authority to
research, develop and negotiate potential mergers and acquisitions and capital
raising transactions for the Company and its subsidiaries, in each case subject
to the oversight of the Executive Committee and subject to the approval of the
Company’s Board of Directors (the “Board”).

 

2.2 Goals. The goals of the Executive shall be to (i) grow DSS International,
including but not limited to through mergers and acquisitions; (ii) to increase
the net asset value of the Company; (iii) to increase the Company’s profits; and
(iv) to raise such capital for the Company and DSS International as shall be
necessary and proper to advance these goals.

 

2.3 Other Positions. The Executive shall be a part-time employee, and the
parties hereto hereby acknowledge and agree that the Executive shall devote the
majority of his business time to the performance of other duties, including but
not limited to his service as the Chief Executive Officer of Singapore
eDevelopment Limited. The Company hereby acknowledges that the Executive’s other
business activities may present the Executive with potential opportunities which
the Company or members of its Board may perceive as appropriate for the Company;
however, the Company agrees to waive any opposition to the Executive’s failure
to present such opportunities to the Company and the Executive’s decision to
pursue such business opportunities, whether on behalf of Singapore eDevelopment
Limited, its subsidiaries and affiliates, or on his own behalf. The Company
acknowledges and agrees that this Agreement shall in no way limit the ability of
the Executive or Singapore eDevelopment Limited to pursue any business
opportunity of any nature or kind. In the event that the Executive shall be
subject to any lawsuit or threatened lawsuit from a shareholder of the Company
for any use of a opportunity claimed by such shareholder to be suitable for the
Company, the Company hereby agrees to indemnify the Executive for any damages or
reasonable legal fees incurred in the defense of such lawsuit to the fullest
extent permitted by law. In the event of such lawsuit, the Executive shall have
the right to retain counsel at the expense of the Company and request the
advance of reasonable legal fees as required by such counsel.

 

INITIALS:_____/_____

 

 

 

 

3. Compensation, Benefits and Equity.

 

3.1 Salary. The Company shall pay the Executive an annual base salary of $1.

 

3.2 Budget. During the term of this Agreement, the Company agrees that DSS
International shall be provided adequate financial and human resources support
to conduct its operations as mutually agreed by the Executive Committee and the
Executive, which shall include but not be limited to the following: a one-time
investment by the Company into DSS International of no less than One Million
($1,000,000) U.S. Dollars (the “Initial Contribution”) shall be made within
thirty (30) business days of the date hereof, with such funds to be used
primarily for investment in DSS International and the growth and development of
DSS International. The Company hereby covenants and agrees that the Initial
Contribution shall not be withdrawn, borrowed or otherwise reallocated by the
Company from DSS International during the term of this Agreement, and the
Initial Contribution may not be used to make any reimbursement or pay any
obligation of the Company not directly related to DSS International unless
required by court order. The Initial Contribution, or any equipment or other
property acquired with funds from the Initial Contribution may not serve as
collateral for any loan during the term of this Agreement without the consent of
the Executive. The Executive agrees to provide DSS International with sufficient
office space for the operations of one (1) employee in each of Singapore and
Hong Kong. The Company hereby acknowledges that the Executive shall not be
required to invest any additional capital into the Company or any other
subsidiary thereof.

 

3.3 Authority. The Company and the Executive hereby agree that it is the
intention of the Company to empower the Executive, to the fullest extent
permitted by applicable State and Federal law, to implement a business strategy
which shall pursue the growth and development of DSS International (including
but not limited to its subsidiary DSS Asia) outside of the United States. The
Executive shall have all necessary and proper discretion over the Initial
Contribution, and may use such funds for the employment of staff, the
acquisition of equipment and other necessary and proper business expenses. The
Executive may utilize the Initial Contribution to establish such office in New
York City or elsewhere in the United States as the Executive may deem advisable.
The Executive, together with either the Company’s Chief Executive Officer or
Chief Financial Officer, shall have co-signing authority for a bank account for
DSS International, at the Executive’s discretion.

 

3.4 Expenses. The Company shall reimburse the Executive for reasonable travel,
entertainment, mileage, and other business expenses incurred by the Executive in
the performance of his duties hereunder in accordance with the Company’s general
policies, as amended from time to time. If a business expense reimbursement is
not exempt from Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”), any reimbursement in one calendar year shall not affect the amount
that may be reimbursed in any other calendar year, and a reimbursement (or right
thereto) may not be exchanged or liquidated for another benefit or payment. Any
business expense reimbursements subject to Section 409A of the Code shall be
made no later than the end of the calendar year following the calendar year in
which such business expense is incurred by the Executive.

 

4. Termination of Agreement. This Agreement shall expire three (3) years from
its Commencement Date without the necessity of a formal notice by either party,
unless the Company and the Executive elect to extend the Term of this Agreement,
on the same or different terms, upon mutual written agreement of the parties.
The Executive may terminate this Agreement at any time upon notice to the
Company. In the event of any termination of this Agreement, the Company shall
reimburse the Executive for expenses incurred prior to termination in accordance
with Section 3.4.

 

INITIALS:_____/_____

 

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5. Nondisclosure.

 

5.1 Proprietary Information.

 

(a) The Executive agrees that all information and know-how, whether or not in
writing, of a private, secret or confidential nature concerning the Company’s
business or financial affairs (collectively, “Proprietary Information”) is and
shall be the exclusive property of the Company. The Executive will not disclose
any Proprietary Information to others outside the Company except in the
performance of his duties without the approval of an officer of the Company,
unless and until such Proprietary Information has become public knowledge or
generally known within the industry without fault by the Executive, or unless
otherwise required by law.

 

(b) The Executive agrees that all files, letters, memoranda, reports, records,
data, sketches, drawings, laboratory notebooks, program listings, or other
written, photographic, electronic or other material containing Proprietary
Information, whether created by the Executive or others, which shall come into
his custody or possession, shall be and are the exclusive property of the
Company.

 

(c) Nothing in this Agreement prohibits the Executive from reporting possible
violations of law or regulation to any governmental agency or enforcement
entity, whether in the United States or elsewhere, or from making other
disclosures that are protected under applicable whistleblower provisions of law
and regulation.

 

6. Notices. All notices required or permitted under this Agreement shall be in
writing and shall be deemed effective upon (a) the date of receipt, if sent by
personal delivery (including delivery by reputable overnight courier), or (b)
the date of receipt or refusal, if deposited in the United States Post Office,
by registered or certified mail, postage prepaid and return receipt requested,
or (c) the date of receipt if sent by e-mail PDF or facsimile transmission to
the e-mail address or facsimile number of record of the Executive or the
Company, or at such other place as may from time to time be designated by either
party in writing.

 

7. Entire Agreement. This Agreement, and those documents referenced herein,
constitute the entire agreement between the parties and supersede all prior
agreements and understandings, including prior employment agreements, whether
written or oral relating to the subject matter of this Agreement. Signatures
affixed to this Agreement may be delivered in e-mail PDF form and any such
signatures shall be deemed original signatures for purposes of the validity and
enforceability of this Agreement.

 

8. Amendment. This Agreement may be amended or modified only by a written
instrument executed by both the Company and the Executive.

 

9. Assumption by Successors. Any successor of the Company shall succeed to all
of the Company’s duties, obligations, rights and benefits hereunder. The
obligations of the Executive are personal and shall not be assigned by him.

 

10. No Waiver. No delay or omission by a party in exercising any right under
this Agreement shall operate as a waiver of that or any other right. A waiver or
consent given by a party on any one occasion shall be effective only in that
instance and shall not be construed as a bar or waiver of any right on any other
occasion.

 

11. Severability. In case any provision of this Agreement shall be invalid,
illegal or otherwise unenforceable, the validity, legality and enforceability of
the remaining provisions shall in no way be affected or impaired thereby.

 

12. Survival. Upon the termination of the Term and any termination of this
Agreement, the obligations of the parties under Sections 4 and 5 shall survive
and continue in effect in accordance with their terms.

 

[Signature Page Follows]

 

INITIALS:_____/_____

 

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IN WITNESS WHEREOF, the undersigned parties have executed this Agreement
effective on the date and year first above written.

 

  EXECUTIVE:           /s/ Fai H. Chan   Name: Fai H. Chan

 

  DOCUMENT SECURITY SYSTEMS, INC.       By: /s/ Jeffrey Ronaldi   Name: Jeffrey
Ronaldi   Title: Chief Executive Officer

 

INITIALS:_____/_____

 

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