Exhibit 10.4

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

BETWEEN

 

NXT-ID, INC.

 

And

 

Gino Pereira

(Executive)

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”), originally
dated as of October 1, 2012 (the “Effective Date”) and amended as of March 11,
2013 is entered into by and between Nxt-ID, Inc., a Delaware corporation (the
“Company”), and Gino Pereira, an individual with a physical address at 51 Tram
Drive, Oxford, CT 06478, (the “Executive”) (collectively, the “Parties,”
individually, a “Party”).

 

W I T N E S S E T H:

 

WHEREAS, Employee has substantial experience in the Corporation’s business and
is currently the Corporation’s President and Chief Executive Officer; and

 

WHEREAS, the Board has determined that it is in the best interest of the
Company, its affiliates, and its stockholders to assure that the Company will
have the continued dedication of the Executive, notwithstanding the possibility,
threat, or occurrence of a Change in Control (as defined in Article Seven
herein); and

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth herein, the Parties, intending to be legally bound, hereby
agree as follows:

 

Article OnE

 

DefINItions

 

1.          Definitions. As used in this Agreement:

 

1.1          The term “Accrued Obligations,” when used in the case of the
Executive’s death or disability shall mean the sum of (1) the that portion
Executive’s Base Salary that was not previously paid to the Executive from the
last payment date through the Date of Termination, and (2) an amount equal 24
months salary at the level of the Executive’s Base Salary then in effect,

 

1.2          The term “Automatic Extension” shall have the meaning set forth in
Section 2.2 herein.

 

1.3          The term “Base Salary”, shall have the meaning set forth in Section
3.1 herein.

 

1.4          The term “Board” shall have the meaning set forth in the recitals.

 

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1.5          The term “Cause” shall have the meaning set forth in Section 4.3
herein.

 

1.6          The term “Common Stock” shall mean the Common Stock, par value
$0.001, of the Company.

 

1.7          The term “Compensation Committee” shall mean the Compensation
Committee of the Company.

 

1.8          The term “Corporate Documents” shall mean the Company’s Certificate
of Incorporation, as amended and/or its Bylaws, as amended.

 

1.9          The term “Effective Date” shall have the meaning set forth in the
preamble.

 

1.10         The term “Good Reason” shall have the meaning set forth in Section
4.4 herein.

 

1.11         The term “Initial Term” shall have the meaning set forth in Section
2.2 herein.

 

1.12         The term “Severance Benefit” shall have the meaning set forth in
Section 4.7(a)(i) herein.

 

1.13         The term “Without Cause” shall have the meaning set forth in
Section 4.3 herein.

 

1.14         The term “Without Good Reason” shall have the meaning set forth in
Section 4.5 herein.

 

Article Two

 

POSITION & DUTIES

 

2.          Employment.

 

2.1          Title. The Executive shall serve as the President and Chief
Executive Officer of the Company and agrees to perform services for the Company
and such other affiliates of the Company, as described in Section 3 herein.

 

2.2          Term. The Executive’s employment shall be for an initial term of
three (3) years (“Initial Term”), commencing on the Effective Date. The
Executive’s employment shall be automatically extended on the day after the
second year anniversary of the Effective Date (“Automatic Extension”), and on
each anniversary date thereof, for additional two (2) year periods.

 

2.3          Duties and Responsibilities. The Executive shall report to the
Board and in his capacity as an officer of the Company shall perform such duties
and services as may be appropriate and as are assigned to him by the Board.
During the term of this Agreement Executive shall, subject to the direction of
the Board of the Company, oversee and direct the operations of the Company, and
shall perform such duties as are customarily performed by the President and
Chief Executive Officer of a company such as the Company or as are otherwise
delegated to him from time to time by the Board.

 

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2.4          Performance of Duties. During the term of the Agreement, except as
otherwise approved by the Board or as provided below, the Executive agrees to
devote his full business time, effort, skill and attention to the affairs of the
Company and its subsidiaries, will use his best efforts to promote the interests
of the Company, and will discharge his responsibilities in a diligent and
faithful manner, consistent with sound business practices. The foregoing shall
not, however, preclude Executive from devoting reasonable time, attention and
energy in connection with the following activities, provided that such
activities do not materially interfere with the performance of his duties and
services hereunder:

 

(a)          serving as a director, consultant, or a member of a committee of
any company or organization, if serving in such capacity does not involve any
conflict with the business of the Company or any subsidiary and such other
company or organization is not in competition, in any manner whatsoever, with
the business of the Company or any of its subsidiaries;

 

(b)          fulfilling speaking engagements;

 

(c)          engaging in charitable and community activities;

 

(d)          managing his personal business and investments; and

 

(e)          any other activity approved of by the Board. For purposes of this
Agreement, any activity specifically listed on Schedule A shall be considered as
having been approved by the Board.

 

2.5          Representations and Warranties of the Executive with Respect to
Conflicts, Past Employers and Corporate Opportunities. The Executive represents
and warrants that:

 

(a)          his employment by the Company will not conflict with any
obligations which he has to any other person, firm or entity;

 

(b)          he has not brought to the Company (during the period before the
signing of this Agreement) and he will not bring to the Company any materials or
documents of a former or present employer, or any confidential information or
property of any other person, firm or entity; and

 

(c)          he will not, without disclosure to and approval of the Board,
directly or indirectly, assist or have an active interest in (whether as a
principal, stockholder, lender, employee, officer, director, partner, venturer,
consultant or otherwise) in any person, firm, partnership, association,
corporation or business organization, entity or enterprise that competes with or
is engaged in a business which is substantially similar to the business of the
Company; provided, however, that ownership of not more than two percent (2%) of
the outstanding securities of any class of any publicly held corporation shall
not be deemed a violation of this Section 2.5; provided, further, that any
investment specifically listed on Schedule A shall not be deemed a violation of
this Section 2.5.

 

2.6          Activities and Interests with Companies Doing Business with the
Company. In addition to those activities and interests of Executive disclosed on
Schedule A attached hereto, Executive shall promptly disclose to the Board, in
accordance with the Company’s policies, full information concerning any
interests, direct or indirect, he holds (whether as a principal, stockholder,
lender, executive, director, officer, partner, venturer, consultant or
otherwise) in any business which, as reasonably known to Executive, purchases or
provides services or products to, the Company or any of its subsidiaries,
provided that the Executive need not disclose any such interest resulting from
ownership of not more than two (2%) of the outstanding securities of any class
of any publicly held corporation.

 

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2.7          Other Business Opportunities. Nothing in this Agreement shall be
deemed to preclude the Executive from participating in other business
opportunities if and to the extent that: (a) such business opportunities are not
directly competitive with, similar to the business of the Company, or would
otherwise be deemed to constitute an opportunity appropriate for the Company;
(b) the Executive’s activities with respect to such opportunities do not have a
material adverse effect on the performance of the Executive’s duties hereunder,
and (c) the Executive’s activities with respect to such opportunity have been
fully disclosed in writing to the Board.

 

2.8          Reporting Location. For purposes of this Agreement, the Executive’s
reporting location shall be Shelton, Connecticut, which shall include the area
within a 40 mile radius from the Company’s current office.

 

Article Three

 

compensation

 

3.          Compensation.

 

3.1          Base Salary. Executive shall receive an initial annual base salary
of One Hundred and Fifty Thousand Dollars ($150,000), until such time as the
Company has developed a working prototype of the “Wocket™”. Upon the achievement
of this milestone, the base annual salary shall increase to Three Hundred
Thousand Dollars ($300,000), payable according to the Company’s normal payroll
policies and procedures (the “Base Salary”) and subject to all federal, state,
and municipal withholding requirements. The Base Salary shall be reviewed by the
Board annually for adequacy.

 

3.2          Cash Bonus. The Executive shall be eligible for a cash bonus equal
to an amount as determined by the Compensation Committee of the Board or by the
independent directors (as that term is defined by the stock exchange or market
on which the Company’s shares may be the traded).

 

3.3          Equity-Based Compensation. The Executive shall be entitled to
participate in all equity-based compensation plans offered by the Company and as
determined by the Board of Directors.

 

(a)          Upon a Change of Control, all equity-based compensation will be
deemed to have vested as of the Change of Control Effective Date (as defined by
Article 7 herein)..

 

3.4          Participation In Benefit Plans.

 

(a)          Retirement Plans. Executive shall be entitled to participate,
without any waiting or eligibility periods, in all qualified retirement plans
provided to other executive officers and other key employees.

 

(b)          Taxes. The Company shall pay, on a grossed-up basis for federal,
state, and local income taxes, the amount of any excise tax payable by Executive
as a result of any payments triggered by this Agreement, or other compensation
agreements between Executive and the Company, or any of its subsidiaries and any
income tax payable by Executive as a result of any payments in Common Stock
triggered by this Agreement or other compensation agreements between Executive
and the Company, or any of its subsidiaries, except as might otherwise be
provided such benefit plan.

 

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(c)          Life Insurance. The Company will purchase life insurance on the
life of Executive in an amount not less than $3,000,000, the benefits of which
will be payable one-half to the Executive’s beneficiary and one-half to the
Company. The Executive’s “beneficiary” is the person or persons (who may be
designated concurrently, successively or contingently) designated by the
Executive in his last effective writing filed with the Company prior to his
death, or if the Executive shall have failed to make an effective designation,
the Executive’s beneficiary is his spouse, if the Executive is married and his
spouse is living at the time of each payment, and otherwise his surviving
children. The Executive shall assist the Company in procuring such insurance by
submitting to such examinations and by signing such applications and other
instruments as may be reasonable and as may be required by the insurance
carriers to which application is made for any such insurance. The Executive
represents that, to the best of his knowledge, he is currently insurable at
standard premium rates for life insurance policies.

 

(d)           Employee Benefit Plans and Insurance. The Executive shall have the
right to participate in employee benefit plans and insurance programs of the
Company that the Company may sponsor from time to time and to receive customary
Company benefits, if those benefits are so offered. Nothing herein shall
obligate Executive to accept such benefits if and when they are offered.

 

(e)          Vacation.

 

(i)          The Executive shall be entitled to take such vacations, with pay,
as are customary among other chief executive officers of organizations of
similar size and nature, which vacation level shall be reviewed by the
Compensation Committee from time to time. No more than 1.5 times (1.5x)
Executive’s authorized annual vacation allocation may be accrued, at any given
time. In the event that Executive has reached his maximum authorized vacation
allocation, accrual will not re-commence until Executive uses some of his paid
vacation credit and thereby brings the balance below his maximum. Accrued paid
vacation credit forfeited because of an excess balance can not be retroactively
reapplied.

 

(ii)         Pay will only be provided for any unused, accrued paid vacation
credit at the time of Executive’s separation from the business by the Company
due to a reduction in force, by Executive upon retirement, or upon the death of
an employee, provided that Executive has been a regular full-time employee for
three calendar months prior to such event. Termination of employment for Cause
by the Company, or Executive’s resignation, will result in the forfeiture of any
unused paid vacation credit.

 

(f)          Paid Holidays. The Executive shall be entitled to such paid
holidays as are generally available to all employees. As of the date of this
Agreement, the Company’s employees are permitted to observe ten (10) paid
holidays.

 

3.5          Relocation and Business-related Expenses. In the event that
Executive is required to move from his primary residence and consents to such
move, then Executive shall be provided with relocation assistance as provided
below:

 

(a)          Housing and Temporary Lodging. The Company will pay the costs, for
the Executive and his family, of house-hunting trips and the cost of
transporting the Executive, his spouse, furniture, household effects, and
vehicles, to the area in which the Company will be headquartered. In addition,
the Company will pay the cost of the Executive’s travel, temporary living
expenses, including housing, whether hotel or apartment, and meals, during the
period prior to the Executive’s move to the city in which the Company will be
headquartered.

 

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(b)          Reimbursement. Executive shall be entitled to reimbursement within
a reasonable time for all properly documented and approved expenses for travel.
The Company shall reimburse business expenses of Executive directly related to
Company business, including, but not limited to, airfare, lodging, meals, travel
expenses, medical expenses while traveling not covered by insurance, business
entertainment, expenses associated with entertaining business persons, local
expenses to governments or governmental officials, tariffs, applicable taxes
outside of the United States, special expenses associated with travel to certain
countries, supplemental life insurance or supplemental insurance of any kind or
special insurance rates or charges for travel outside the United States (unless
such insurance is being provided by the Company), rental cars and insurance for
rental cars, and any other expenses of travel that are reasonable in nature or
that have been otherwise pre-approved. Executive shall be governed by the travel
and entertainment policy in effect at the Company.

 

3.6          Severance Benefit. In the event that Executive’s employment is
terminated, other than for Cause, Executive shall receive compensation pursuant
to Section 4.7 herein.

 

3.7          Payroll Procedures and Policies. All payments required to be made
by the Company to the Executive pursuant to this Article Three shall be paid on
a regular basis in accordance with the Company’s normal payroll procedures and
policies.

 

Article Four

 

Termination OF EMPLOYMENT

 

4.1          Death. The Executive’s employment shall terminate automatically
upon the Executive’s death during the Employment Term.

 

4.2          Disability. If the Company determines in good faith that the
Disability (as defined below) of the Executive has occurred during the
Employment Term, the Company may give the Executive notice of its intention to
terminate the Executive’s employment. In such event, the Executive’s employment
hereunder shall terminate effective on the 30th day after receipt of such notice
by the Executive (the “Disability Effective Date”); provided, that, within the
30-day period after such receipt, the Executive shall not have returned to
full-time performance of the Executive’s duties. For purposes of this Agreement,
“Disability” shall mean the absence of the Executive from the Executive’s duties
hereunder on a full-time basis for an aggregate of 180 days within any given
period of 270 consecutive days (in addition to any statutorily required leave of
absence and any leave of absence approved by the Company) as a result of
incapacity of the Executive, despite any reasonable accommodation required by
law, due to bodily injury or disease or any other mental or physical illness,
which will, in the opinion of a physician selected by the Company or its
insurers and acceptable to the Executive or the Executive’s legal
representative, be permanent and continuous during the remainder of the
Executive’s life.

 

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4.3          Termination by Company.

 

(a)          Termination for Cause.

 

The Company may terminate the Executive’s employment hereunder for Cause (as
defined below). For purposes of this Agreement, “Cause” shall mean:

 

(i)          the willful and continued failure of the Executive to perform
substantially the Executive’s duties hereunder (other than any such failure
resulting from bodily injury or disease or any other incapacity due to mental or
physical illness) after a written demand for substantial performance is
delivered to the Executive by the Board or the Chairman of the Company, which
specifically identifies the manner in which the Board or the Chairman of the
Company believes the Executive has not substantially performed the Executive’s
duties; or

 

(ii)         the willful engaging by the Executive in illegal conduct or gross
misconduct that is materially and demonstrably detrimental to the Company and/or
its affiliated companies, monetarily or otherwise.

 

For purposes of this provision, no act, or failure to act, on the part of the
Executive shall be considered “willful” unless done, or omitted to be done, by
the Executive in bad faith or without reasonable belief that the Executive’s
action or omission was in the best interests of the Company. Any act, or failure
to act, based upon authority given pursuant to a resolution duly adopted by the
Board, upon the instructions of the Chairman or another Board Member of Company,
or based upon the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good faith and
in the best interests of the Company and its affiliated companies. The cessation
of employment of the Executive shall not be deemed to be for Cause unless and
until there shall have been delivered to the Executive a copy of a resolution
duly adopted by the affirmative vote of not less than two-thirds of the entire
membership of the Board then in office at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before the
Board) finding that, in the good faith opinion of the Board, the Executive is
guilty of the conduct described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.

 

(iii)        the Executive’s conviction of, or plea of nolo contendere to, any
felony of theft, fraud, embezzlement or violent crime.

 

(b)          Termination without Cause.

 

All terminations by the Company that are not for Cause, shall be considered
Without Cause.

 

4.4          Termination by Executive. The Executive may terminate the
Executive’s employment hereunder at any time during the Employment Term for Good
Reason (as defined below) For purposes of this Agreement, “Good Reason” shall
mean any of the following (without the Executive’s express written consent):

 

(a)          The assignment to the Executive of any duties inconsistent in any
respect with the Executive’s position (including status, offices, titles and
reporting requirements), duties, functions, responsibilities or authority as
contemplated by Section 2.3 of this Agreement, or any other action by the
Company that results in a diminution in such position, duties, functions,
responsibilities or authority, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive;

 

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(b)          Any failure by the Company to comply with any of the provisions of
Section 2.3 of this Agreement, other than an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;

 

(c)          The Company’s requiring the Executive to be based at any office or
location other than as provided in Section 2.8 of this Agreement or the
Company’s requiring the Executive to travel on the Company’s or its affiliated
companies’ business to a substantially greater extent than during the three-year
period immediately preceding the Effective Date;

 

(d)          Any failure by the Company to comply with and satisfy Section 8.1
of this Agreement; or

 

(e)          Any purported termination by the Company of the Executive’s
employment hereunder otherwise than as expressly permitted by this Agreement,
and for purposes of this Agreement, no such purported termination shall be
effective.

 

For purposes of this Section 4.4, any good faith determination of “Good Reason”
made by the Executive shall be conclusive.

 

4.5          Notice of Termination. Any termination of the Executive’s
employment hereunder by the Company or by the Executive (other than a
termination pursuant to Section 4.1) shall be communicated by a Notice of
Termination (as defined below) to the other party hereto. For purposes of this
Agreement, a “Notice of Termination” shall mean a notice which (a) indicates the
specific termination provision in this Agreement relied upon, (b) in the case of
a termination for Disability, Cause or Good Reason, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive’s employment under the provision so indicated, and (c) specifies
the Date of Termination (as defined in Section 4.7 below); provided, however,
that notwithstanding any provision in this Agreement to the contrary, a Notice
of Termination given in connection with a termination for Good Reason shall be
given by the Executive within a reasonable period of time, not to exceed
120 days, following the occurrence of the event giving rise to such right of
termination. The failure by the Company or the Executive to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Disability, Cause or Good Reason shall not waive any right of the Company or the
Executive hereunder or preclude the Company or the Executive from asserting such
fact or circumstance in enforcing the Company’s or the Executive’s rights
hereunder.

 

4.6          Date of Termination. For purposes of this Agreement, the “Date of
Termination” shall mean the effective date of termination of the Executive’s
employment hereunder, which date shall be (a) if the Executive’s employment is
terminated by the Executive’s death, the date of the Executive’s death, (b) if
the Executive’s employment is terminated because of the Executive’s Disability,
the Disability Effective Date, (c) if the Executive’s employment is terminated
by the Company (or applicable affiliated company) for Cause or by the Executive
for Good Reason, the date on which the Notice of Termination is given, (d) if
the Executive’s employment is terminated pursuant to Section 2.2, the date on
which the Employment Term ends pursuant to Section 2.2 due to a party’s delivery
of a Notice of Termination thereunder, and (e) if the Executive’s employment is
terminated for any other reason, the date specified in the Notice of
Termination, which date shall in no event be earlier than the date such notice
is given; provided, however, that if within 30 days after any Notice of
Termination is given, the party receiving such Notice of Termination notifies
the other party that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties or by a final judgment, order or
decree of a court of competent jurisdiction (the time for appeal therefrom
having expired and no appeal having been perfected).

 

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4.7          Obligations of the Company upon Termination.

 

(a)          Good Reason or Change of Control; Other Than for Cause. If, during
the Employment Term, the Company (or applicable affiliated company) shall
terminate the Executive’s employment hereunder other than for Cause or the
Executive shall terminate the Executive’s employment either for Good Reason:

 

(i)          the Company shall pay to the Executive in a lump sum (A) the sum of
(1) Executive’s Base Salary, if any, which has been earned but not paid through
the Termination Date, (2) the product of (x) the Annual Bonus and (y) a
fraction, the numerator of which is the number of days in the current fiscal
year through the Termination Date and the denominator of which is 365, and
(3) any accrued vacation or other pay pursuant to the Corporation’s vacation
policy, to the extent not previously paid; and (B) an amount equal to the sum of
(1) an amount equal to 36 months of Executive’s Base Salary and (2) the Annual
Bonus multiplied by a factor of 3;

 

(ii)         all stock options, stock appreciation rights, and restricted stock
shall immediately vest;

 

(iii)        all stock options and stock appreciation rights shall be payable in
Common Stock;

 

(iv)        all performance share shall immediately vest and

 

(v)         the Company shall pay, on a grossed-up basis (as determined in the
same manner as under Section 3.4(b) herein the amount of any excise and income
taxes payable by Executive as a result of any payments in Common Stock triggered
by this Agreement, or other agreements between Executive and the Company, or any
of its subsidiaries.

 

to the extent not theretofore paid or provided, the Company shall timely pay or
provide to the Executive any other amounts or benefits required to be paid or
provided or which the Executive is eligible to receive under any plan, program,
policy, practice or arrangement or contract or agreement of the Company and its
affiliated companies (such other amounts and benefits hereinafter referred to as
the “Other Benefits”).

 

(b)          Death. If the Executive’s employment is terminated by reason of the
Executive’s death during the Employment Term, this Agreement shall terminate
without further compensation obligations to the Executive’s legal
representatives under this Agreement, other than for (i) payment of Accrued
Obligations (which shall be paid to the Executive’s estate or beneficiary, as
applicable, in a lump sum in cash within 90 days of the Date of Termination) and
the timely payment or settlement of any other amount pursuant the Other Benefits
and (ii) treatment of all other compensation under existing plans as provided by
the terms and rules of those plans.

 

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(c)          Disability. If the Executive’s employment is terminated by reason
of the Executive’s Disability during the Employment Term, this Agreement shall
terminate without further compensation obligations to the Executive, other than
for (i) payment of Accrued Obligations (which shall be paid to the Executive in
a lump sum in cash within 90 days of the Date of Termination) and the timely
payment or settlement of any other amount pursuant to the Other Benefits and
(ii) treatment of all other compensation under existing plans as provided by the
terms and rules of those plans.

 

(d)          Cause; Other than for Good Reason. If the Executive’s employment is
terminated for Cause during the Employment Term, this Agreement shall terminate
without further compensation obligations to the Executive other than the
obligation to pay to the Executive Base Salary through the Date of Termination
plus the amount of any compensation previously deferred by the Executive and any
accrued vacation or other pay pursuant to the Corporation’s vacation policy, in
each case to the extent theretofore unpaid. If the Executive voluntarily
terminates the Executive’s employment during the Employment Term, excluding a
termination either for Good Reason or (ii) a Change of Control, this Agreement
shall terminate without further compensation obligations to the Executive, other
than for that portion of Executive’s Base Salary that was not previously paid to
the Executive from the last payment date through the effective date of the
Executive’s voluntary termination, any accrued vacation or other pay pursuant to
the Corporation’s vacation policy and the timely payment or provision of the
Other Benefits, as provided in any applicable plan, and the Executive shall have
no further obligations nor liability to the Company. In such case, any amounts
owed to the Executive shall be paid to the Executive in a lump sum in cash
within 90 days of the Date of Termination subject to applicable laws and
regulations.

 

4.8          Continuation of Payments During Disputes. The Parties agree that in
the case of:

 

(a)          termination which the Company contends is for Cause, but Executive
claims is not for Cause; or

 

(b)          termination by Executive under Section 4.4 herein,

 

the Company shall continue to pay all compensation due to Executive hereunder
until the resolution of such dispute, but the Company shall be entitled to
repayment of all sums so paid, if it ultimately shall be determined by a court
of competent jurisdiction, in a final non-appealable decision, that the
termination was for Cause or such termination by Executive was not authorized
under Section 4.4 herein, and all sums so repaid shall bear interest at the
prime rate as published in The Wall Street Journal on the date on which such
court makes such determination. Any such reimbursement of payments by Executive
shall not include any legal fees or other loss, costs, or expenses incurred by
the Company, notwithstanding any provision of the Indemnification Agreement,
which is attached as Exhibit A and is considered a part of this Agreement.

 

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Article Five

 

indemnification

 

5.          Indemnification. The Executive shall be indemnified and held
harmless pursuant to the terms and conditions set forth in the Indemnification
Agreement substantially in the form attached as Exhibit A hereto.

 

Article Six

 

confidentiality

 

6.          Confidentially; Non-Competition; and Non-Solicitation.

 

6.1          Confidentiality. In consideration of employment by the Company and
Executive’s receipt of the salary and other benefits associated with Executive’s
employment, and in acknowledgment that (a) the Company is engaged in the oil and
gas business, (b) maintains secret and confidential information, (c) during the
course of Executive’s employment by the Company such secret or confidential
information may become known to Executive, and (d) full protection of the
Company’s business makes it essential that no employee appropriate for his or
her own use, or disclose such secret or confidential information, Executive
agrees that during the time of Executive’s employment and for a period of two
(2) years following the termination of Executive’s employment with the Company,
Executive agrees to hold in strict confidence and shall not, directly or
indirectly, disclose or reveal to any person, or use for his own personal
benefit or for the benefit of anyone else, any trade secrets, confidential
dealings, or other confidential or proprietary information of any kind, nature,
or description (whether or not acquired, learned, obtained, or developed by
Executive alone or in conjunction with others) belonging to or concerning the
Company or any of its subsidiaries, except (i) with the prior written consent of
the Company duly authorized by its Board, (ii) in the course of the proper
performance of Executive’s duties hereunder, (iii) for information (x) that
becomes generally available to the public other than as a result of unauthorized
disclosure by Executive or his affiliates or (y) that becomes available to
Executive on a nonconfidential basis from a source other than the Company or its
subsidiaries who is not bound by a duty of confidentiality, or other
contractual, legal, or fiduciary obligation, to the Company, or (iv) as required
by applicable law or legal process.

 

6.2          Non-Competition. During Executive’s employment with the Company and
for so long as Executive receives any Severance Benefit or is receiving any
Severance Amount provided under this agreement in respect of the termination of
his employment, Executive shall not be engaged as an officer or executive of, or
in any way be associated in a management or ownership capacity with any
corporation, company, partnership or other enterprise or venture which conducts
a business which is in direct competition with the business of the Company;
provided, however, that Executive may own not more than two percent (2%) of the
outstanding securities, or equivalent equity interests, of any class of any
corporation, company, partnership, or either enterprise that is in direct
competition with the business of the Company, which securities are listed on a
national securities exchange or traded in the over-the-counter market. For
purposes of this Agreement, a lump sum payment equivalent made to Executive
shall be judged in relation to his most recent annual base salary to determine
whether Executive is continuing to receive a Severance Benefit or Severance
Amount and shall be measured from the date such payment is received. It is
expressly agreed that the remedy at law for breach of this covenant is
inadequate and that injunctive relief shall be available to prevent the breach
thereof.

 

6.3          Non-Solicitation. Executive also agrees that he will not, directly
or indirectly, during the term of his employment or within one (1) year after
termination of his employment for any reason, in any manner, encourage,
persuade, or induce any other employee of the Company to terminate his
employment, or any person or entity engaged by the Company to represent it to
terminate that relationship without the express written approval of the Company.
It is expressly agreed that the remedy at law for breach of this covenant is
inadequate and that injunctive relief shall be available to prevent the breach
thereof.

 

11

 

 

Article Seven

 

Change of Control

 

7.          Certain Definitions.

 

7.1          Change of Control Effective Date. The “Change of Control Effective
Date” shall mean the first date during the Change of Control Period (as defined
in Section 7.2) on which a Change of Control occurs. Notwithstanding anything in
this Agreement to the contrary, if a Change of Control occurs and if the
Executive’s employment with the Company (or applicable affiliated company) is
terminated prior to the date on which the Change of Control occurs, and if it is
reasonably demonstrated by the Executive that such termination of employment
(i) was at the request of a third party who has taken steps reasonably
calculated to effect a Change of Control or (ii) otherwise arose in connection
with or anticipation of a Change of Control, then for all purposes of this
Agreement the “Change of Control Effective Date” shall mean the date immediately
prior to the date of such termination of employment.

 

7.2          Change of Control Period. The “Change of Control Period” shall mean
the period commencing on the date of this Agreement and ending on the third
anniversary of such date; provided, however, that commencing on the date one
year after the date hereof, and on each annual anniversary of such date (such
date and each annual anniversary thereof herein referred to as the “Renewal
Date”), the Change of Control Period shall be automatically extended so as to
terminate three years after such Renewal Date.

 

7.3          Change of Control. For purposes of this Agreement, a “Change of
Control” shall mean:

 

(a)          the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 15% or more of either (A) the then outstanding Common Shares
the Company (the “Outstanding Shares”) or (B) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally in
the election of directors (the “Outstanding Voting Securities”); provided,
however, that for purposes of this Subsection 7.3(a) the following acquisitions
shall not constitute a Change of Control: (w) Company-sponsored recapitalization
that is approved by the Incumbent Board, as defined below; (x) a capital raise
initiated by the Company where the Incumbent Board remains for at least at least
548 days after the closing date of the raise, or (y) an acquisition of another
company or asset(s) initiated by the Company and where the Company’s
shareholders immediately after the transaction own at least 51% of the shares of
the combined concern; or

 

(b)          individuals who, as of the date of this Agreement, constitute the
Company’s Board (the “Incumbent Board”) cease for any reason to constitute a
majority of such Board of Directors; provided, however , that any individual
becoming a director of the Company shareholders subsequent to the date hereof
whose election, or nomination for election by the Company’s shareholders was
approved by a vote of a majority of the directors of the Company then comprising
the Incumbent Board shall be considered as though such individual were a member
of the Incumbent Board, but excluding, for this purpose, any such individual
whose initial assumption of office occurs as a result of either an actual or
threatened election contest or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Company Board; or

 

12

 

 

(c)          consummation of a reorganization, merger, amalgamation or
consolidation of the Company, with or without approval by the shareholders of
the Company, in each case, unless, following such reorganization, merger,
amalgamation or consolidation, (i) more than 50% of, respectively, the then
outstanding shares of common stock (or equivalent security) of the company
resulting from such reorganization, merger, amalgamation or consolidation and
the combined voting power of the then outstanding voting securities of such
company entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Shares and Outstanding Voting Securities immediately prior to such
reorganization, merger, amalgamation or consolidation in substantially the same
proportions as their ownership, immediately prior to such reorganization,
merger, amalgamation or consolidation, of the Outstanding Shares and Outstanding
Voting Securities, as the case may be, (ii) no Person (excluding a parent of the
Company that may come into being after the date of this Agreement through any
transaction deliberately undertaken by the Company after an affirmative vote of
its Incumbent Directors and the Company shareholders), any employee benefit plan
(or related trust) of the Company or such company resulting from such
reorganization, merger, amalgamation or consolidation, and any Person
beneficially owning, immediately prior to such reorganization, merger,
amalgamation or consolidation, directly or indirectly, 15% or more of the
Outstanding Shares or Outstanding Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 15% or more of, respectively, the
then outstanding shares of common stock (or equivalent security) of the company
resulting from such reorganization, merger, amalgamation or consolidation or the
combined voting power of the then outstanding voting securities of such company
entitled to vote generally in the election of directors, and (ii) a majority of
the members of the board of directors of the company resulting from such
reorganization, merger, amalgamation or consolidation were members of the
Incumbent Board at the time of the execution of the initial agreement providing
for such reorganization, merger, amalgamation or consolidation; or

 

(d)          consummation of a sale or other disposition of all or substantially
all the assets of the Company, with or without approval by the shareholders of
the Company, other than to a corporation, with respect to which following such
sale or other disposition, (i) more than 50% of, respectively, the then
outstanding shares of common stock (or equivalent security) of such corporation
and the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all the
individuals and entities who were the beneficial owners, respectively, of the
Outstanding Shares and Outstanding Voting Securities immediately prior to such
sale or other disposition in substantially the same proportion as their
ownership, immediately prior to such sale or other disposition, of the
Outstanding Shares and Outstanding Voting Securities, as the case may be,
(ii) no Person (excluding the Company, any employee benefit plan (or related
trust) of the Company or such corporation, and any Person beneficially owning,
immediately prior to such sale or other disposition, directly or indirectly, 15%
or more of the Outstanding Shares or Outstanding Voting Securities, as the case
may be) beneficially owns, directly or indirectly, 15% or more of, respectively,
the then outstanding shares of common stock (or equivalent security) of such
corporation or the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election of
directors, and (C) a majority of the members of the board of directors of such
corporation were members of the Incumbent Board at the time of the execution of
the initial agreement or action of the Incumbent Board providing for such sale
or other disposition of assets of the Company; or

 

(e)          approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

 

13

 

 

Article Eight

 

miscellaneous

 

8.          Miscellaneous.

 

8.1          Benefit. This Agreement shall inure to the benefit of and be
binding upon each of the Parties, and their respective successors. This
Agreement shall not be assignable by any Party without the prior written consent
of the other Party. The Company shall require any successor, whether direct or
indirect, to all or substantially all the business and/or assets of the Company
to expressly assume and agree to perform, by instrument in a form reasonably
satisfactory to Executive, this Agreement and any other agreements between
Executive and the Company or any of its subsidiaries, in the same manner and to
the same extent as the Company.

 

8.2          Governing Law. This Agreement shall be governed by, and construed
in accordance with the laws of the State of New York without resort to any
principle of conflict of laws that would require application of the laws of any
other jurisdiction; provided, however, that Delaware law shall govern with
respect to the Executive’s rights under a Change of Control under Article Seven
herein.

 

8.3          Counterparts. This Agreement may be executed in counterparts and
via facsimile, each of which shall be deemed to constitute an original, but all
of which together shall constitute one and the same Agreement. Each such
counterpart shall become effective when one counterpart has been signed by each
Party thereto.

 

8.4          Headings. The headings of the various articles and sections of this
Agreement are for convenience of reference only and shall not be deemed a part
of this Agreement or considered in construing the provisions thereof.

 

8.5          Severability. Any term or provision of this Agreement that shall be
prohibited or declared invalid or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective only to the extent of such prohibition or
declaration, without invalidating the remaining terms and provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction, and if any term or provision of this Agreement is held by any
court of competent jurisdiction to be void, voidable, invalid or unenforceable
in any given circumstance or situation, then all other terms and provisions
hereof, being severable, shall remain in full force and effect in such
circumstance or situation, and such term or provision shall remain valid and in
effect in any other circumstances or situation.

 

8.6          Construction. Use of the masculine pronoun herein shall be deemed
to refer to the feminine and neuter genders and the use of singular references
shall be deemed to include the plural and vice versa, as appropriate. No
inference in favor of or against any Party shall be drawn from the fact that
such Party or such Party’s counsel has drafted any portion of this Agreement.

 

14

 

 

8.7          Equitable Remedies. The Parties hereto agree that, in the event of
a breach of this Agreement by either Party, the other Party, if not then in
breach of this Agreement, may be without an adequate remedy at law owing to the
unique nature of the contemplated relationship. In recognition thereof, in
addition to (and not in lieu of) any remedies at law that may be available to
the non-breaching Party, the non-breaching Party shall be entitled to obtain
equitable relief, including the remedies of specific performance and injunction,
in the event of a breach of this Agreement, by the Party in breach, and no
attempt on the part of the non-breaching Party to obtain such equitable relief
shall be deemed to constitute an election of remedies by the non-breaching Party
that would preclude the non-breaching Party from obtaining any remedies at law
to which it would otherwise be entitled.

 

8.8          Attorney’s Fees. If any Party hereto shall bring an action at law
or in equity to enforce its rights under this Agreement, the prevailing Party in
such action shall be entitled to recover from the Party against whom enforcement
is sought its costs and expenses incurred in connection with such action
(including fees, disbursements and expenses of attorneys and costs of
investigation). [In the event that Executive institutes any legal action to
enforce Executive’s legal rights hereunder, or to recover damages for breach of
this Agreement, Executive, if Executive prevails in whole or in part, shall be
entitled to recover from the Company reasonable attorneys’ fees and
disbursements incurred by Executive with respect to the claims or matters on
which Executive has prevailed.]

 

8.9          No Waiver. No failure, delay or omission of or by any Party in
exercising any right, power or remedy upon any breach or default of any other
Party, or otherwise, shall impair any such rights, powers or remedies of the
Party not in breach or default, nor shall it be construed to be a waiver of any
such right, power or remedy, or an acquiescence in any similar breach or
default; nor shall any waiver of any single breach or default be deemed a waiver
of any other breach or default theretofore or thereafter occurring. Any waiver,
permit, consent or approval of any kind or character on the part of any Party of
any provisions of this Agreement must be in writing and be executed by the
Parties and shall be effective only to the extent specifically set forth in such
writing.

 

8.10         Remedies Cumulative. All remedies provided in this Agreement, by
law or otherwise, shall be cumulative and not alternative.

 

8.11         Amendment. This Agreement may be amended only by a writing signed
by all of the Parties hereto.

 

8.12         Entire Contract. This Agreement and the documents and instruments
referred to herein constitute the entire contract between the parties to this
Agreement and supersede all other understandings, written or oral, with respect
to the subject matter of this Agreement.

 

8.13         Survival. This Agreement shall constitute a binding obligation of
the Company and any successor thereto. Notwithstanding any other provision in
this Agreement, the obligations under Articles 5 and 6 shall survive termination
of this Agreement.

 

8.14         Savings Clause. Notwithstanding any other provision of this
Agreement, if the indemnification provisions in Exhibit A hereto or any portion
thereof shall be invalidated on any ground by any court of competent
jurisdiction, then the Company shall nevertheless indemnify Executive as to
Expenses, judgments, fines, penalties and amounts paid in settlement with
respect to any Proceeding to the full extent permitted by any applicable portion
of this Agreement that shall not have been invalidated and to the fullest extent
permitted by applicable law.

 

15

 

 

8.15         Modifications and Waivers. Notwithstanding any other provision of
this Agreement, the indemnification provisions in Exhibit A hereto and the
Change of Control provisions Article Seven herein, may be amended from time to
time to reflect changes in Delaware law or for other reasons.

 

8.16         Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been given (i) when
delivered by hand or (ii) if mailed by certified or registered mail with postage
prepaid, on the third day after the date on which it is so mailed:

 

(a)          if to Executive:

 

Gino Pereira

51 Tram Drive

Oxford CT 06478 

 

(b)          if to the Company:

 

Nxt-ID, Inc.,

4 Research Drive

Suite 402

Shelton, CT 06484

 

Attn: Chairman, Compensation Committee

 

or to such other address as may have been furnished to Executive by the Company
or to the Company by Executive, as the case may be.

 

8.17         No Limitation. Notwithstanding any other provision of this
Agreement, for avoidance of doubt, the parties confirm that the foregoing does
not apply to or limit Executive’s rights under Delaware law or the Company’s
Corporate Documents.

 

16

 

 

IN WITNESS WHEREOF, the parties have set their hands and seals hereunto on the
date first above written.

 

NXT-ID, INC. EXECUTIVE

 

By: /s/ David R. Gust                      

Name: David R. Gust

Title: Independent Director

By:

Name:

[image_001.gif]

Gino Pereira

   

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17

 

 

Schedule A

 

Outside Activities

Gino Pereira

 

Company or

Project Name

Nature of Business Date Hired or Commenced Involvement Position Compensation
Annual Time Commitment,
(time away from office) N/A                                              

 

 

 

 

 

 

 

 

 

Dated: August , 2012

 

Initials: Executive: _____        Company: ______

 

 

 

 

 

 

 

 

 

 

 

18

 

 

Exhibit A

 

Indemnification Agreement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19