EMPLOYMENT AGREEMENT


 


EMPLOYMENT AGREEMENT
("Agreement") made as of this 25th day of July, 2011 by and between Document Capture Technologies, Inc., a Delaware corporation,
having an office at 4255 Burton Drive, Santa Clara, California 95054 (hereinafter referred to as "Employer") and Jacques
vonBechmann, an individual with a business address c/o Employer at 4255 Burton Drive, Santa Clara, California 95054
(hereinafter referred to as "Employee");


 


WITNESSETH:


 


WHEREAS, Employer
desires to employ directly or through a co-employment agreement with a Professional Employer Organization (PEO) licensed in the
State of California, Employee as Senior Vice President of Sales of Employer; and


 


WHEREAS, Employee
is willing to be employed as the Senior Vice President of Sales of Employer in the manner provided for herein, and to perform the
duties of the Senior Vice President of Sales of Employer upon the terms and conditions herein set forth;


 


NOW, THEREFORE,
in consideration of the promises and mutual covenants herein set forth it is agreed as follows:


 





1.        
  Employment of Senior Vice President of Sales of Employer. Employer hereby employs Employee
as the Senior Vice President of Sales of Employer.


 


2.            Term.







 


a.         Subject
to Section 9 and Section 10 below, the term of this Agreement shall be for a period of twenty-four (24) months commencing on July
25, 2011 (the Term). The Term of this Agreement shall be automatically extended for additional one (1) year periods, unless either
party notifies the other in writing at least ninety (90) days prior to the expiration of the then existing Term of its intention
not to extend the Term. During the Term, Employee shall devote all of his business time and efforts to Employer and its subsidiaries
and affiliates.


 


3.          Duties.
The Employee shall perform those functions generally performed by persons of such title and position, shall attend all meetings
of the stockholders and the Board (if invited to attend), shall perform any and all related duties and shall have any and all powers
as may be prescribed by resolution of the Board, and shall be available to confer and consult with and advise the officers and
directors of Employer at such times that may be required by Employer. Employee shall report directly to the Chief Executive Officer
of Employer.


  


4.           Compensation.


 




              a.          
(i) Employee shall be paid a base pay of $150,000 per year (“Base Compensation”) during the Term of this Agreement.
Employee shall be paid periodically in accordance with the policies of the Employer during the term of this Agreement, but not
less than twice a month.


 


(ii)          Employee
is eligible to earn quarterly bonuses with an aggregate annual target of 100% of Employee’s Base Compensation, which Employee
shall earn in the event that Employer attains certain performance milestones. The compensation committee shall review such performance
milestones and shall in its sole discretion authorize Employer to pay all of such quarterly bonuses earned promptly after its determination
that the performance milestones have been met. Employee shall also be entitled to additional annual option grants at the discretion
of the compensation committee of the board of directors. The compensation committee of the board of directors may from time to
time approve additional bonus plans, grants or awards for Employee, in each case as such committee deems appropriate in its sole
discretion.


 



    	 



    	 



    

 


b.          On
April 6, 2011 Employer granted and issued Employee 500,000 options (“Options”) to purchase shares of the Company’s
common stock at an exercise price of $0.40 per which shall be exercisable for a period of ten (10) years, upon execution of this
Agreement. The Options shall be incentive stock options (“ISO’s) as defined in Employer’s 2010 Stock Option Plan,
subject to any required shareholder approval (which Employer shall use its best efforts to obtain), and shall vest and become exercisable
as follows:


 


		(1)	166,666 Options shall vest and become exercisable on April 6, 2012;



		(2)	166,666 Options shall vest and become exercisable on April 6, 2013; and



		(3)	166,667 Options shall vest and become exercisable on April 6, 2014.



 


provided, however, that Employee shall
be entitled to receive pro rata vesting of the Options through the date of termination in the event that termination of employment
is attributable to: (x) termination by Employee pursuant to Section 9(b)(i) or (y) termination by Employer for any reason other
than Cause (as defined in Section 9(a)(i)).


 


c.        Employer
shall include Employee in its health insurance program, payment of premiums in accordance with company policy.


 


d. Employee shall have
the right to participate in any other employee benefit plans established by Employer and PEO maintained generally for other senior
executives, including but not limited to any matching 401(k) plan.


 


e.      (i) In the event
of a "Change of Control" whereby:


 


(A) A person (other
than a person who is an officer or a Director of Employer on the effective date hereof), including a "group" as defined
in Section 13(d)(3) of the Securities Exchange Act of 1934, after execution of this Agreement becomes, or obtains the right to
become, the beneficial owner of Employer securities having 30% or more of the combined voting power of then outstanding securities
of the Employer that may be cast for the election of directors of the Employer; provided, however, that with respect to Richard
Dietl and NCR Corporation the aforementioned percentage shall be 50% (not 30%);


 


(B) At any time, a
majority of the Board-nominated slate of candidates for the Board is not elected;


 


(C) Employer consummates
a merger in which it is not the surviving entity;


 


(D) Substantially all
Employer's assets are sold; or


 


(E) Employer's stockholders
approve the dissolution or liquidation of Employer; then


 


(ii)        All stock options
and/or warrants ("Rights") granted by Employer to Employee under any plan or otherwise prior to the effective date of
the Change of Control, shall become vested, accelerate and become immediately exercisable; any time within twelve months after
the effective date of the change of control, adjusted for any stock splits and capital reorganizations having a similar effect,
subsequent to the effective date hereof. In the event Employee owns or is entitled to receive any unregistered securities of Employer,
then Employer shall use its best efforts to effect the registration of all such securities as soon as practicable, but no later
than 120 days after the Change of Control; provided, however, that such period may be extended or delayed by Employer for one period
of up to 60 days if, upon the advice of counsel at the time such registration is required to be filed, or at the time Employer
is required to exercise its best efforts to cause such registration statement to become effective, such delay is advisable and
in the best interests of Employer because of the existence of non-public material information, or to allow Employer to complete
any pending audit of its financial statements.


 


f.          Employee
shall be entitled to four weeks of paid vacation per year, all of which shall vest on the six month anniversary date of his first
day of employment with the Employer. For each year subsequent to the first year of the Term, Employee shall be entitled to four
weeks of paid vacation, all of which shall vest immediately on such anniversary date.


 



    	 



    	 



    

 


5.          Expenses.
Employee shall be reimbursed for all of his actual out-of-pocket expenses incurred in the performance of his duties hereunder,
provided such expenses are reasonably acceptable to Employer, which approval shall not be unreasonably withheld by Employer, for
business related travel and entertainment expenses. Employee shall submit to Employer detailed receipts, according to IRS guidelines,
with respect thereto. Employer shall also reimburse Employee for Employee’s monthly cell phone, PDA and wireless services
and blackberry expenses, all to be used for business purposes related to Employer.


 


6.       Intentionally
left blank.


 


7.       Secrecy.
At no time shall Employee disclose to anyone any confidential or secret information (not already constituting information available
to the public) concerning (a) internal affairs or proprietary business operations of Employer or (b) any trade secrets, new product
developments, patents, programs or programming, especially unique processes or methods.


 


8.       Covenant
Not to Compete.


 


(a) Subject to, and
limited by, Section 10(b), Employee will not, at any time, during the term of this Agreement, and for one (1) year thereafter,
either directly or indirectly, engage in, with or for any enterprise, institution, whether or not for profit, business, or company,
competitive with the business (as identified herein) of Employer as such business may be conducted on the date thereof, as a creditor,
guarantor, or financial backer, stockholder, director, officer, consultant, advisor, employee, member, inventor, producer, director,
or otherwise of or through any corporation, partnership, association, sole proprietorship or other entity; provided, that an investment
by Employee, his spouse or his children is permitted if such investment is not more than four percent (4%) of the total debt or
equity capital of any such competitive enterprise or business and further provided that said competitive enterprise or business
is a publicly held entity whose stock is listed and traded on a national stock exchange or through the NASDAQ Stock Market. As
used in this Agreement, the business of Employer shall be deemed to include the manufacturing and marketing of imaging systems.


 


(b) For a period of
one year from the date of termination of this agreement Employee shall not contact for the purpose of solicitation or solicit any
of Employer’s, or its subsidiaries, customers, employees or suppliers.


 


(c) During the entire
time of employment, any outside business opportunities must receive the written approval of the compensation committee, established
by the board of directors, or any other committee of the board of directors serving such function.


 


9. Termination.


 


a. Termination by
Employer (i) Employer may terminate this Agreement upon written notice for Cause. For purposes hereof, "Cause" shall
mean (A) Employee's misconduct as could reasonably be expected to have a material adverse effect on the business and affairs of
Employer, (B) the Employee's disregard of lawful instructions of Employers Chief Executive Officer and/or Board of Directors consistent
with Employee's position relating to the business of Employer or neglect of duties or failure to act, which, in each case, could
reasonably be expected to have a material adverse effect on the business and affairs of Employer,(C) engaging by the Employee in
conduct that constitutes activity in competition with Employer, including any unapproved activities identified in section 8(c)
of this agreement; (D) the conviction of Employee for the commission of a felony; and/or (E) the habitual abuse of alcohol or controlled
substances. Notwithstanding anything to the contrary in this Section 9(a)(i), Employer may not terminate Employee's employment
under this Agreement for Cause unless Employee shall have first received notice from the Board advising Employee of the specific
acts or omissions alleged to constitute Cause, and such acts or omissions continue after Employee shall have had a reasonable opportunity
(at least 10 days from the date Employee receives the notice from the Board) to correct the acts or omissions so complained of.
In no event shall alleged incompetence of Employee in the performance of Employee's duties be deemed grounds for termination for
Cause.


 


If Employer terminates Employee for Cause, both parties agree
as follows:


(A) Before such termination shall become effective, the matter
shall be submitted to a binding arbitration conducted at a location in San Jose, California to be determined by an arbitrator selected
by the initiating party and in accordance with the then existing Rules of Practice and Procedure of the American Arbitration Association.


 



    	 



    	 



    

 


(B) The number of arbitrators shall be three; one selected by
Employee, one selected by Employer, and one selected by the two selected arbitrators. Each arbitrator shall be impartial and independent
and shall perform his or her duties with diligence and in good faith.


(C) Any party may be represented by counsel or other authorized
representatives during the arbitration hearings. No party shall communicate ex parte with a selected or candidate arbitrator.


(D) The arbitrators shall, by majority decision, determine the
fairness and validity of Employer’s reasons for terminating Employee for Cause and such determination shall be final and
binding upon the parties. If the termination is determined to be invalid or unfair, Employer shall be deemed to have breached the
Agreement and Section 10 of the Agreement shall apply.


(E) Each party shall bear its expenses, costs and attorney fees
relating to the arbitration.


(F) Until such time as a final binding arbitration award is
entered into, Employee shall be placed on administrative leave and shall continue to receive his full compensation (including salary,
bonus, stock options and benefits) as if he remained an Employee of the Company.


 


(ii)       This
agreement automatically shall terminate upon the death of Employee, except that Employee's estate shall be entitled to receive
any amounts that Employee would have been entitled to receive under Section 9(a)(iii) below if his employment had terminated pursuant
to Section 9(a)(i) above.


 


(iii) In the event that
Employee’s employment is terminated pursuant to Section 9(a)(i) above, Employee shall be entitled to receive: (a) payment
of all earned/accrued Base Compensation, (b) unreimbursed business expenses, (c) accrued/unused vacation time, (d) a pro rata portion
of Employee’s annual bonus for the termination year, all of (a) – (d) shall be measured through the termination date
in accordance with Section 9(a)(i) above. Additionally, Employee shall have ninety (90) days to exercise all vested options, which
thereafter shall immediately expire.


 


b.          Termination
by Employee


 


(i) Employee shall have
the right to terminate his employment under this Agreement upon 30 days' notice to Employer given within 90 days following the
occurrence of any of the following events (A) through (F) or within three years following the occurrence of event (G):


 


(A)      Employee
is not appointed or retained as Senior Vice President of Sales (or a substantially similar position).


 


(B)      Employer
acts to materially reduce Employee's duties and responsibilities hereunder. Employee's duties and responsibilities shall not be
deemed materially reduced for purposes hereof solely by virtue of the fact that Employer is (or substantially all of its assets
are) sold to, or is combined with, another entity, provided that Employee shall continue to have the same duties and responsibilities
with respect to Employer's business, and Employee shall report directly to the board of directors of the entity (or individual)
that acquires Employer or its assets.


 


(C) Employer acts to
change the geographic location of the performance of Employee’s duties from the San Jose area. For purposes of this Agreement,
the San Jose area shall be deemed to be the area within 60 miles of San Jose, California.


 


(D)      A
Material Reduction (as hereinafter defined) in Employee's rate of base compensation, or Employee's other benefits. "Material
Reduction" shall mean a ten percent (10%) differential;


 


(E)       A
failure by Employer to obtain the assumption of this Agreement by any successor;


 


(F)       A
material breach of this Agreement by Employer, which is not cured within thirty (30) days of written notice of such breach by Employer;


 



    	 



    	 



    

 


(G)       A Change of
Control.


 


(ii)   Anything
herein to the contrary notwithstanding, Employee may terminate this Agreement upon thirty (30) days written notice to Employer.


 


(iii)   If
Employee shall terminate this Agreement under Section 9(b)(i), Employee shall be entitled to receive: (a) twelve (12) months salary
at Employee’s then current yearly salary rate, (the “Severance Payment”), (b) reimbursement by Employer
of 100% of the C.O.B.R.A. premiums for twelve (12) months after such termination, (c) payment of all unpaid earned Base Compensation
as of the date of termination, (d) payment of all unreimbursed business expenses incurred through the date of termination, (e)
payment for all unused vacation time accrued through the date of termination, (f) payment of a pro rata portion of Employee’s
annual bonus as of the date of termination for the termination year, and (g) the right to exercise all vested options within 90
days of the date of termination, all of which shall expire thereafter. Other than the payments described in (a)-(g) of this section
9(b)(iii), Employer shall have no further obligation to compensate Employee pursuant to Section 4 above.
 


 


(iv) If Employee
shall terminate this Agreement pursuant to Section 9(b)(ii), Employee shall only be entitled to receive the compensation set forth
in 9(b)(iii)(c), (d), (f) and (g) above and Employer shall have no further obligation to compensate Employee pursuant to Section
4 above. 


 


		10.	Consequences of Breach by Employer;



Employment Termination
 


 


a. If the Employer
shall terminate Employee's employment under this Agreement in any way that is a breach of this Agreement by Employer, the following
shall apply:


 


(i)      Employee
shall be entitled to receive the compensation set forth in Section 9(b)(iii) above and Employer shall have no further obligation
to compensate Employee pursuant to Section(s) 4 or 9 above.


 


b.      In
the event of termination of Employee's employment pursuant to Section 9(b)(i) of this Agreement, Sections 8(a) and 8(b) shall apply
to Employee for twelve (12) months after such termination.


 


11.        Remedies


 


Employer recognizes
that because of Employee's special talents, in the event of termination by Employer hereunder (except under Section 9(a)(i) or
(iii), or in the event of termination by Employee under Section 9(b)(i) before the end of the agreed term, the Employer acknowledges
and agrees that the provisions of this Agreement regarding further payments of base salary, bonuses and the exercisability of Rights
constitute fair and reasonable provisions for the consequences of such termination, do not constitute a penalty, and such payments
and benefits shall not be limited or reduced by amounts' Employee might earn or be able to earn from any other employment or ventures
during the remainder of the agreed term of this Agreement.


 


12.        Excise
Tax.       In the event that any payment or benefit received or to be received by Employee
in connection with a termination of his employment with Employer would constitute a "parachute payment" within the meaning
of Code Section 280G or any similar or successor provision to 280G and/or would be subject to any excise tax imposed by Code Section
4999 or any similar or successor provision then Employer shall assume all liability for the payment of any such tax and Employer
shall immediately reimburse Employee on a "grossed-up" basis for any income taxes attributable to Employee by reason
of such Employer payment and reimbursements.


 


13.        Attorneys'
Fees and Costs. If any action at law or in equity is necessary to enforce or interpret the terms of this Agreement, the
prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief
to which he may be entitled.


 



    	 



    	 



    

 


14.       Entire
Agreement; Survival. This Agreement contains the entire agreement between the parties with respect to the transactions
contemplated herein and supersedes, effective as of the date hereof any prior agreement or understanding between Employer and Employee
with respect to Employee's employment by Employer. The unenforceability of any provision of this Agreement shall not effect the
enforceability of any other provision. This Agreement may not be amended except by an agreement in writing signed by the Employee
and the Employer, or any waiver, change, discharge or modification as sought. Waiver of or failure to exercise any rights provided
by this Agreement and in any respect shall not be deemed a waiver of any further or future rights.


 


b.       
The provisions of Sections 4, 7, 8, 9(a)(ii), 9(a)(iii), 9(b)(iii), 10, 11, 12, 13, 14, 16, 17 and 18 shall survive the termination
of this Agreement.


 


15.      Assignment.
This Agreement shall not be assigned to other parties.


 


16.       Governing
Law. This Agreement and all the amendments hereof, and waivers and consents with respect thereto shall be governed by the
laws of the State of California, without regard to the conflicts of laws principles thereof.


 


17.       Notices.
All notices, responses, demands or other communications under this Agreement shall be in writing and shall be deemed to have been
given when


 


a.       delivered
by hand;


 


b.       sent
be telex or telefax, (with receipt confirmed), provided that a copy is mailed by registered or certified mail, return receipt requested;
or


 


c. received by the
addressee as sent by express delivery service (receipt requested)


 


in each case to the appropriate addresses,
telex numbers and telefax numbers indicated below or to such other address as such party may designate for itself by notice to
the other parties; provided that any change of address furnished by Employee to Employer for purposes of updating Employer’s
payroll records shall be deemed to constitute notice of address change under this Agreement unless otherwise specifically requested
in writing by Employee:


 


(i) if to the Employer:


Document Capture Technologies,
Inc.


4255 Burton Drive


Santa Clara, CA 95054


Telefax:(408)-490-2801


Telephone:(408)-436-9888


 


(ii) if to the Employee:


Jacques vonBechmann


1225 Vancouver Avenue


Burlingame, CA 94010


 


18.       Severability
of Agreement. Should any part of this Agreement for any reason be declared invalid by a court of competent jurisdiction,
such decision shall not affect the validity of any remaining portion, which remaining provisions shall remain in full force and
effect as if this Agreement had been executed with the invalid portion thereof eliminated, and it is hereby declared the intention
of the parties that they would have executed the remaining portions of this Agreement without including any such part, parts or
portions which may, for any reason, be hereafter declared invalid.


[SIGNATURE PAGE FOLLOWS]


 



    	 



    	 



    

 


IN WITNESS WHEREOF,
the undersigned have executed this agreement as of the day and year first above written.


 


Employee


 


	Signature:	 	 	 
	 	 
	Printed Name: Jacques vonBechmann	 
	 	 
	Date: July 25, 2011	 


 


DOCUMENT CAPTURE TECHNOLOGIES, INC.


 


	By:	 	 	 
	 	 
	Name: David P. Clark	 
	 	 
	Title: Chief Executive Officer	 
	 	 
	Date: July 25, 2011	 


 


[SIGNATURE PAGE TO EMPLOYMENT AGREEMENT DATED July 25, 2011]