-




                                   DATED 1998





                              PSC BAR CODE LIMITED


                                     - and -


                                  N P DAVIS ESQ


                      -------------------------------------

                                SERVICE AGREEMENT

                      -------------------------------------


                                   Penningtons
                                    Highfield
                                  Brighton Road
                                    Godalming
                                     Surrey
                                     GU7 1NS






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THIS AGREEMENT is made the day of ____________________ 1998

BETWEEN:

(1)     PSC BAR CODE LIMITED  (registered no 2668056) whose registered office is
        at Peter House, St Peter's Square, Manchester M1 5BH("the Company"); and

(2)     NIGEL  PHILIP  DAVIS of  95  Hungerford  Drive,   Maidenhead, Berkshire,
        SL6 7UU  ("the Executive").


WHEREAS, in order to enhance the Executive's continued service to the Company in
an  effective  manner  without  distraction  by reason of the  possibility  of a
termination  of  employment by the Company or a change in control of the Company
and in order to assure both the  Company  and the  Executive  of  continuity  of
management  in the event of any  actual or  threatened  change in control of the
Company,  the Company wishes to provide in this Agreement for severance benefits
to the Executive in the event of a termination of employment by the Company or a
change in control of the Company.

NOW,  THEREFORE,  in consideration of the premises and of Executive  agreeing to
continue to serve as an employee of the  Company,  the parties  hereto  agree as
follows:

1.    Interpretation

1.1   In this Agreement  unless the context  otherwise  requires the  following
      expressions shall have the following meanings:

     "associated  company" the Holding Company and any subsidiary of the Holding
Company,  any company the equity  share  capital of which (as defined in Section
744 of the Companies  Act, 1985) is owned as to 50% or less but more than 25% by
such Holding  Company or by any of its  subsidiaries or by the Company or any of
its  subsidiaries  as the case may be and shall  include  any  subsidiary  of an
associated company;

     the "Board" the  directors of the Company from time to time present (in any
manner  permitted by the Articles of Association of the Company) at a meeting of
the directors or of a committee of the directors duly convened and held;

     "Change in  Control" a Change in Control as defined in Clause  19.1 of this
Agreement;


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     the "Employment" the employment of the Executive by the Company pursuant to
this Agreement;

     "Good Reason" Good Reason as defined in Clause 19.2 of this Agreement;

     the "Group" the Company and its subsidiaries and associated  companies from
time to time (and the expression  "Group Company" and "Group Companies" shall be
construed accordingly);

     "Holding  Company" PSC Inc and any other holding  company of the company as
defined by Section 736 of the Companies Act 1985;

     "Intellectual  Property"  letters  patent trade marks service models design
rights  applications  for  registration of any of the foregoing and the right to
apply for them in any part of the world inventions  drawings  computer  programs
confidential   information  know-how  and  rights  of  like  nature  arising  or
subsisting  anywhere in the world in relation  to all of the  foregoing  whether
registered or unregistered;

     "Severance  Benefits"  cash and other  benefits  payable under Clause 18 of
this Agreement;

     "Subsidiary"  a subsidiary as defined by Section 736 of the Companies  Act,
1985;

     "Termination  Date"  the  termination  date of the  Employment  under  this
Agreement howsoever terminated.

     "Termination  for Cause"  termination  of this  appointment  by the Company
pursuant to Clause 17.2 of this Agreement.

1.2  All  references  to a statutory  provision  shall be construed as including
     references to any statutory  modification,  consolidation  or  re-enactment
     (whether  before or after the date of this Agreement) for the time being in
     force.

2.   Appointment and duration

2.1  The Company  appoints the Executive  and the  Executive  agrees to serve as
     Vice President Europe, Middle East and Africa (VP EMEA).


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2.2  The appointment  shall be deemed to have commenced on 12 May 1997 and shall
     continue  (subject to earlier  termination  as provided in this  Agreement)
     until  terminated  by the  Company  giving to the  Executive  not less than
     twelve  calendar  months  prior  notice or by the  Executive  giving to the
     Company not less than three  calendar  months prior  notice.  Provided that
     this Agreement shall automatically terminate on the Executive's sixty fifth
     birthday.

2.3  The  Company  may  at  its  absolute  discretion  elect  to  terminate  the
     employment  of  the  Executive  with  immediate  effect  by  paying  to the
     Executive salary and other benefits under this Agreement in lieu of notice.

3.   Duties of the Executive

     During the Employment:

3.1  the Executive shall undertake and diligently pursue such duties in relation
     to the  Company  as the Board  shall  from time to time  entrust to him and
     shall obey and observe  all the lawful and  reasonable  resolutions  of the
     Board  from time to time given or made and,  shall  devote the whole of his
     time and attention during business hours (except holidays) to the discharge
     of his duties  hereunder  and to the benefit of the Company and shall carry
     out his duties in a loyal and efficient manner;

3.2  the Executive may be required in pursuance of his duties hereunder to serve
     not only the Company but also any other Group Company;

3.3  the  Executive  shall promote the trade and business of the Company and the
     Group to the best of his ability knowledge and power;

3.4  the  Executive  shall not  willingly  do anything to the  prejudice  of the
     Company or any other Group  Company or of the Group as a whole or any trade
     or business  in which the  Company or any other  Group  Company may for the
     time being be directly or indirectly interested;

3.5  if the Executive  becomes  aware of any facts,  matters,  circumstances  or
     information  which may relate to or affect the  Company or any other  Group
     Company or any trade or  business  in which the  Company or any other Group
     Company is for the time being interested he shall forthwith communicate the
     same in writing to the Board  giving  full  particulars  of the  matters of
     which he is aware;

3.6  without  prejudice to the generality of clause 3.5 if the Executive becomes
     aware of any of the following:-

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                  (a)       all matters  relating to any misconduct,  dishonesty
                            or  other  conduct  on  the  part  of  employees  or
                            directors of the Company or any other Group  Company
                            which  may  be  in  breach  of  their  contracts  of
                            employment  or may  adversely  affect the Company or
                            any one or more members of the Group; and/or

                  (b)       any  details  relating  to  any  secret  process  or
                            confidential information which is or may be relevant
                            to the  business  of the  Company or any one or more
                            members of the Group;

     then he shall immediately communicate the same to the Board;

3.7  the Executive shall at all times keep the Board promptly and fully informed
     of  the   business  and  affairs  of  the  Company  and  provide  all  such
     explanations as the Board may require; and

3.8  the Executive  shall not at any time make any untrue  statement in relation
     to the Company or any other Group  Company and in addition  shall not after
     the termination of the Employment represent himself as being employed by or
     connected with the Company or any other Group Company.

4.   Place of work and residence

     The Executive  shall  initially  carry out his duties at Axis 3 Rhodes Way,
Watford, Herts WD2 4YW

5.   Pay

5.1  During his  appointment  the Company  shall pay to the  Executive an annual
     salary at the rate of  (pound)110,000.  Such salary shall accrue day-to-day
     and be payable by equal monthly instalments in arrears. The salary shall be
     deemed to include any fees receivable by the Executive as a Director of the
     Company or any Group  Company,  or of any other  company or  unincorporated
     body in which he holds office as nominee or  representative  of the Company
     or any Group Company.

5.2  The  Executive's  salary  shall be notified to the  Executive  by the Board
     following  adoption  by the Board of the  accounts  of the  Company for the
     immediately  preceding  financial  period  and the  rate of  salary  may be
     increased by the Company with effect from 1 January in the succeeding  year
     by such amount if any as it shall think fit.

5.3  In addition the Executive shall be entitled to participate in the Company's
     Business  Incentive  Scheme under which the Executive may be entitled to be
     paid  monthly  incentive  payments of such  amounts (if any) and subject to
     such conditions as the Board may in its absolute discretion decide.


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6.   Medical Insurance and Life Assurance

6.1  The  Company  shall so long as the  Executive  is  employed  by the Company
     contribute to a life assurance  policy on the life of the Executive for the
     benefit of the Executive.  The Executive  agrees to submit to such physical
     examinations  as  may  be  required  from  time  to  time  by  assurers  or
     prospective  assurers in connection with such policy. The Company agrees to
     pay any costs or  expenses  that may be  payable  in  connection  with such
     physical examination.

6.2  The Executive shall be entitled to participate at the Company's  expense in
     the Company's  long term  disability  insurance  scheme and for himself his
     wife and  dependent  children in the  Company's  private  medical  expenses
     insurance scheme (or schemes).

6.3  In the event of the Executive (or, where  relevant,  members of his family)
     not being acceptable to the relevant  insurers referred to in Clause 6.1 or
     6.2 at standard rates of premium,  the Executive agrees to reimburse to the
     Company  forthwith  on demand the amount of any excess  over such  standard
     rates.

7.      Expenses

7.1  The  Company  shall  reimburse  to the  Executive  on a  monthly  basis all
     travelling,  hotel, entertainment and other expenditure reasonably incurred
     by him in the proper performance of his duties subject to the production to
     the  Company of such  vouchers or other  evidence of actual  payment of the
     expenses as the Company may reasonably require.

7.2  Where the Company issues a company  sponsored  credit or charge card to the
     Executive he shall use such card only for  expenditure  reimbursable  under
     clause 7.1  above,  and shall  return it to the  Company  forthwith  on the
     termination of his employment.

7.3  The Company shall reimburse the Executive all home and mobile telephone and
     facsimile bills to the extent that the same are properly incurred by him in
     the course of the Employment and are supported by evidence of payment.

8.   Pension

8.1  The Executive is eligible to join the PSC BCL Group Personal Pension Scheme
     subject to the terms of its Rules from time to time.

8.2  A contracting out certificate  under the Social Security  Pensions Act 1975
     is not in force in respect of the Executive's employment.


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9.   Car

9.1  Subject  to the  Executive  holding a current  full  driving  licence,  the
     Company shall  provide the  Executive  with a car of such make and model as
     the Board shall decide for his sole  business and private use in respect of
     which the Company  shall pay or reimburse  the  Executive  all standing and
     running costs (including petrol,  insurance, tax, servicing and repairs but
     excluding the cost of petrol consumed during holiday periods).

9.2  The  Executive  shall always comply with all  regulations  laid down by the
     Company from time to time with  respect to company  cars,  shall  forthwith
     notify the  Company of any  accidents  involving  his  company  car and, on
     termination  of his  appointment  whether  lawfully  or  unlawfully,  shall
     forthwith return the car and its keys to the Company.

9.3  The  Executive  shall not  permit  such car to be taken  out of the  United
     Kingdom without the written consent of the Finance Director.

10.  Holiday

10.1 In addition to English  public  holidays  the  Executive  is entitled to 25
     working  days paid  holiday  in each  holiday  year  from 1  January  to 31
     December  to be taken at such time or times as are  agreed  with the Board.
     The  Executive  shall not carry  forward  any  unused  part of his  holiday
     entitlement to a subsequent year.

10.2 For the year during  which his  appointment  commences or  terminates,  the
     Executive  is  entitled to 2.08  working  days  holiday  for each  complete
     calendar  month of his  employment by the Company  during that year. On the
     termination of his appointment for whatever reason,  the Executive shall be
     entitled to pay in lieu of  outstanding  holiday  entitlement  and shall be
     required to repay to the Company any salary  received for holiday  taken in
     excess of his actual entitlement. The basis for payment and repayment shall
     be 1/253 x of the Executive's annual basic salary for each day.

11.  Incapacity

11.1 If the Executive is absent because of sickness  (including mental disorder)
     or injury he shall report this fact  forthwith  to the Company  Secretary's
     office and if the Executive is so prevented  for seven or more  consecutive
     days he shall provide a medical practitioner's  statement on the eighth day
     and weekly  thereafter  so that the whole period of absence is certified by
     such statements. Immediately following his return to work after a period of
     absence the Executive  shall complete a  Self-Certification  form available
     from the Company Secretary's office detailing the reason for his absence.

11.2 If the  Executive  shall  be  absent  due  to  sickness  (including  mental
     disorder) or injury duly  certified in  accordance  with the  provisions of
     sub-clause 11.1 hereof,  he shall be paid his full  remuneration  hereunder
     for up to 30 working days' absence in any period of 12  consecutive  months
     and thereafter such  remuneration,  if any, as the Board shall from time to
     time determine  provided that such  remuneration  shall be inclusive of any
     Statutory  Sick Pay to which the Executive is entitled under the provisions
     of the  Social  Security  and  Housing  Benefits  Act 1982  and any  Social
     Security  Sickness  Benefit or other benefits  recoverable by the Executive
     (whether or not recovered) may be deducted therefrom.


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11.3 For Statutory Sick Pay purposes the  Executive's  qualifying  days shall be
     his normal working days.

11.4 At any time during the period of his  appointment,  (but not normally  more
     often than every  second  year),  the  Executive  shall at the  request and
     expense of the  Company  permit  himself  to be  examined  by a  registered
     medical practitioner to be selected by the Company and shall authorise such
     medical  practitioner to disclose to and discuss with the Company's medical
     adviser the results of such examination and any matters which arise from it
     in order that the Company's  medical  adviser can notify the Company of any
     matters  which,  in his opinion,  might hinder or prevent the Executive (if
     during a period of incapacity) from returning to work for any period or (in
     other circumstances) from properly performing any duties of his appointment
     at any time.

12.  Non-disclosure and Non-use of Confidential Information

     The Executive  acknowledges that the Executive's work as an employee of the
     Company  has exposed  the  Executive  to  Confidential  Information  of the
     Company and of Group Companies and that the Executive's  continuing service
     to the  Company  may expose  him to  additional  Confidential  Information.
     "Confidential  Information"  includes, but is not limited to, matters which
     are not readily available to the public which are:

     a)       of a  technical  nature,  such as, but not  limited  to,  methods,
              know-how, formulae, compositions, drawings, blueprints, compounds,
              processes,  discoveries,  machines, inventions,  computer programs
              and similar items;

     b)       of a business  nature,  such as, but not limited  to,  information
              about  sales or lists or  customers,  prices,  costs,  purchasing,
              profits, markets,  strengths and weaknesses of products,  business
              processes,   business  and  marketing  plans  and  activities  and
              employee and personnel records;

     c)       pertaining  to future  developments,  such as, but not limited to,
              research and development,  future marketing or merchandising plans
              or ideas.

       The  Executive  agrees that during the period of the  Employment  and for
       five years  thereafter,  the Executive will not,  directly or indirectly,
       except to the extent  required by law: (1) reveal,  divulge,  make known,
       sell, exchange, give away or otherwise dispose of, to any person, firm or
       company any Confidential  Information of the Company or any Group Company
       or its or  their  business,  whether  the same  shall  or may  have  been
       designed,  developed or originated by the Executive or otherwise;  or (2)
       reveal, divulge or make known to any person, firm or company, the name of
       any customers of the Company or any Group Company.  This obligation shall
       not apply to information which (i) is acquired from a third party who, to


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       the  best  of  the  Executive's  knowledge,  is  not  in  default  of any
       obligation  to the  Company  or any  Group  Company  in  disclosing  such
       information  or (ii) is  already  in the  public  domain  or known to the
       Company's  competitors or the public generally or that becomes  available
       to the public  generally  or the  Company's  competitors  other than as a
       result of the Executive's breach of this Agreement.  All records (whether
       in hard copy or digital  form),  books and computer discs relating in any
       manner  whatsoever  to the  Company  or any  Group  Company  shall be the
       exclusive property of the Company or such Group Company regardless of who
       actually  prepared the original  record or book. The Executive  shall not
       copy or cause to have  copied any such  records  and books  except in the
       ordinary  course  of  business.  All  such  records  and  books  shall be
       immediately  returned to the Company by the Executive on the  Termination
       Date.

13.     Intellectual property

13.1 The Executive shall forthwith  communicate to the Company in confidence all
     Intellectual  Property  which the  Executive  may make or originate  either
     solely or jointly with another or others during the Employment.

13.2 In the  case  of  such  Intellectual  Property  as is  made  or  originated
     hereunder  wholly or substantially in the course of his normal duties or in
     the course of duties  specifically  assigned to him and which relate to the
     affairs of the Company or any Group  Company the  following  subclauses  of
     this clause shall apply.

13.3 Such Intellectual Property (or in the case of Intellectual Property made or
     originated  by the  Executive  jointly  with  another or others to the full
     extent of the Executive's  interest therein so far as the law allows) shall
     be and  become  the  exclusive  property  of the  Company  and shall not be
     disclosed to any other person,  firm or company  without the consent of the
     Company  being  previously  obtained  which  if  given  may be  subject  to
     conditions.

13.4 The Executive  shall if and when required by the Company and at the expense
     of the Company do and/or combine with others in doing all acts and sign and
     execute all applications and other documents  (including Powers of Attorney
     in favour of nominees of the Company)  necessary or incidental to obtaining
     maintaining  or  extending  patent or other  forms of  protection  for such
     Intellectual  Property  in the UK and in any other part of the world or for
     transferring  to or vesting in the Company or its nominees the  Executive's
     entire right title and interest to and in such Intellectual  Property or to
     and in any application,  patent or other form of protection or copyright as
     the case may be including the right to file applications in the name of the
     Company or its  nominees  for patent or other  forms of  protection  or for
     registration of copyright in any country claiming priority from the date of
     filing of any  application or other date from which priority may run in any
     other country.

13.5 The  provisions  of this  clause  shall  remain in full  force  and  effect
     notwithstanding  that after the Executive  has made or originated  any such
     Intellectual Property the Employment may have ceased or been determined for
     any reason whatsoever with the intention that the same shall bind the heirs
     of and/or assigns of the Executive.



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14.  Restrictions on the Executive

     During the Employment the Executive  shall not without the written  consent
     of the  Board  (and  other  than  in  relation  to a Group  Company  or the
     Company's holding company) directly or indirectly be engaged,  concerned or
     interested  in any  other  business  either  alone  or  jointly  with or as
     director,  manager,  agent or servant of any other person,  firm or company
     and whether inside or outside his usual hours of work.

15.  Non-competition/Non-solicitation

15.1 In light of the  special  and  unique  services  that have been and will be
     furnished to the Company by the Executive and the Confidential  Information
     that has been and will be disclosed to the Executive during the Executive's
     relationship  with  the  Company,  and in  consideration  of the  Company's
     undertaking to make the severance  payments and benefits pursuant to Clause
     19.1 below the  Executive  agrees that during the period the  Executive  is
     employed by the Company and during the period the  Executive  is  receiving
     those severance payments and benefits (the "Non-Competition  Period"),  the
     Executive will not, without the written consent of the Company, directly or
     indirectly,  whether as principal,  agent, officer,  director,  consultant,
     employee,  partner,  stockholder  or owner of or in any  capacity  with any
     company, partnership, business, firm, individual, or any entity located any
     where in the world  engage in, or assist  another to engage in, any work or
     activity  in any way  competitive  with the  Business  of the  Company  (as
     hereinafter defined).  However,  nothing herein shall prevent the Executive
     from owning not more than five percent (5%) of the equity share  capital of
     any company as to which  company the Executive  has no  relationship  other
     than as a shareholder.  In addition, during the Non-Competition Period, the
     Executive will not,  directly or indirectly (a) induce or attempt to induce
     any officer or  employee  of the Company or any Group  Company to leave the
     employment  of the Company or any Group  Company , or in any way  interfere
     with the  relationship  between  the  Company or any Group  Company and any
     officer, employee, director or shareholder thereof, or (b) hire directly or
     through  another entity any person who is an employee of the Company or any
     Group Company on the date of termination of employment of the Executive, or
     (c) induce or attempt to induce any customer,  dealer, supplier or licensee
     to cease doing  business with the Company or any Group  Company,  or in any
     way interfere  with the  relationship  between any such  customer,  dealer,
     supplier or licensee and the Company or any Group Company .

15.2 The Executive specifically agrees that because of his special expertise and
     the special and unique  services  that the  Executive  has been and will be
     furnishing the Company,  and because of the  Confidential  Information that
     has been  acquired by the  Executive or will be disclosed to the  Executive
     during the Executive's  employment,  the above stated  geographic areas and
     time period,  in and during which the  Executive  will not compete with the
     Company,  are  reasonable in scope and duration and are necessary to afford
     the Company just and adequate  protection  against the  irreparable  damage
     which would result to the Company from any  activities  prohibited  by this
     Clause.


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15.3 If the  Executive  in any way breaches  the  obligations  specified in this
     Clause, the Company shall have the right, in addition to any other remedies
     available to it, to terminate the further  payment of any amounts due under
     Clause 18 hereof.

15.4 For  purposes  of this  Agreement,  the  "Business  of the  Company" is the
     development,  manufacturing  and  marketing of  technologies,  products and
     services for the automatic  identification and keyless data entry industry,
     and  includes,  but is not limited to,  products,  services,  applications,
     systems  and  technologies  relating  to bar coded  data,  magnetic  stripe
     encoded data, radio frequency  communications of bar coded or related data,
     optical character recognition, machine vision as applied to the recognition
     of bar coded data and electronic  interchange of bar coded or related data.
     The  Business of the Company  shall also  include any business in which the
     Company or any Group Company is actually engaged or as to which it is doing
     research and development during the Employment.

16.  Delivery of documents and property

     The  Executive  shall  upon  request  at any time and in any event upon the
     termination of the  Executive's  employment  immediately  deliver up to the
     Company or its authorised  representative all keys, security passes, credit
     cards, plans, statistics, documents, records, papers, magnetic disks, tapes
     or other software storage media and all property of whatsoever nature which
     may be in his  possession  or control or relate in any way to the  business
     affairs of the Company and any Group Company and the  Executive  shall not,
     without the written consent of the Company, retain any copies thereof.

17.  Termination of Agreement

17.1 Automatic termination

     This Agreement shall automatically terminate:

     (i)       on the Executive reaching his 65th birthday; or

     (ii)      if he resigns his office.

17.2 Immediate dismissal

     The Company may by notice terminate this Agreement with immediate effect if
the Executive:

(i)  has failed or  refused  to  perform  such  services  as may  reasonably  be
     delegated or assigned to him by the Board; or

(ii) if the Executive becomes prohibited by law from being a director; or


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(iii)commits any act of gross  misconduct or repeats or continues (after written
     warning) any other serious breach of his obligations  under this Agreement;
     or

(iv) is guilty  of any  conduct  which in the  reasonable  opinion  of the Board
     brings him, the Company or any Group Company into serious disrepute; or

(v)  if the office of director of the Company  held by the  Executive is vacated
     pursuant to the Company's Articles of Association; or

(vi) is convicted  of any  criminal  offence  (excluding  an offence  under road
     traffic legislation in the United Kingdom or elsewhere); or

(vii)commits any act of dishonesty  whether  relating to the Company,  any Group
     Company, any of its or their employees or otherwise; or

(viii)  becomes  bankrupt  or makes  any  arrangement  or  composition  with his
     creditors generally; or

(ix) is in the reasonable opinion of the Board incompetent in the performance of
     his duties;

     provided that in the case of paragraphs  (ii), (v), (vi) and (viii) of this
     Clause 17.2 the Company may only  terminate  this  Agreement with immediate
     effect if the Board in its absolute discretion  reasonably believes that as
     a consequence  of any such event the  Executive  would no longer be able to
     perform his duties under this Agreement.

17.3 Dismissal on short notice

     The Company may terminate this Agreement notwithstanding clause 11.2 by not
     less than 3 months'  prior notice given at any time while the  Executive is
     incapacitated  by ill-health or accident from  performing  his duties under
     this  Agreement  and has  been so  incapacitated  for a period  or  periods
     aggregating 180 days in the preceding 12 months

17.4 Notice

     If notice is served by either the Executive or the Company to terminate the
     Employment the Company shall at any time  thereafter be entitled to require
     the Executive either:


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(i)  to work such notice (or the remainder thereof); or

(ii) not to enter the  premises of the Company or any Group  Company  during the
     applicable  notice period except by prior  appointment with the Chairman of
     the Board nor to contact or communicate with customers/clients, prospective
     clients,   suppliers,   distributors,   agents,  employees  or  independent
     contractors  of the  Company  or of any  Group  Company  without  the prior
     approval of the Chairman of the Board;

     and in the latter case the  Executive  will  continue to be paid his salary
     (at the rate then current) for the unexpired portion of the duration of the
     Employment or entitlement to notice as the case may be.

17.5 Miscellaneous

     At any  time  at  the  request  of the  Company  and  in any  event  on the
     termination  of this  Agreement for whatever  reason,  the Executive  shall
     resign  from all and any  offices  which he may hold as a  Director  of the
     Company or of any Group Company and from all other  appointments or offices
     which he holds as nominee  or  representative  of the  Company or any Group
     Company  and if he should  fail to do so within  seven days the  Company is
     hereby irrevocably authorised to appoint some person in his name and on his
     behalf to sign any  documents  or do any things  necessary  or requisite to
     effect such resignation(s) and/or transfer(s).

18. Severance Payment

18.1 Termination of Employment - In General

     In the event of the  termination  of the  Employment by the Company for any
     reason other than Termination for Cause,  death,  disability or a Change in
     Control, the Company will continue to pay the Executive for a period of one
     year following the Termination Date an amount equal to the aggregate of:-

(x)  the  Executive's  salary at the  annual  rate in effect on the  Termination
     Date; and

(y)  the highest  annual  incentive  payments  paid to the  Executive  under the
     Company's current Business  Incentive Scheme or any successor scheme in the
     three full financial years preceding the Termination Date,; and

(z)  an amount  equal to the annual cost to the  Company of  providing a company
     car for the Executive;

     Provided that the Company may in its absolute discretion choose to continue
     to  provide  the  Executive  with a car for a period of one year  after the
     Termination Date on the terms contained in Clause 9 above in which case the
     amount in (z) above shall not be included  in the above  calculation.  Such
     amount shall be payable monthly. In addition,  the Company will provide the
     Executive with the  Executive's  then current medical  expenses  insurance,
     long term disability  insurance and life assurance benefits for a period of
     one year following the  Termination  Date. In the event of the  Executive's
     death while receiving severance payments hereunder, all remaining severance
     instalment  payments  otherwise payable to the Executive  hereunder will be
     paid in the same amounts and in the same manner to the Executive's personal
     representatives.  All  payments  made to the  Executive  hereunder  will be
     subject to all applicable employment and withholding taxes.


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18.2  Termination of Employment - Change in Control

     In the  event of the  termination  of the  Employment  within  the two year
     period  following a Change in Control,  and such  termination is (i) by the
     Company  for  any  reason  other  than  Termination  for  Cause,  death  or
     disability,  or (ii) by the Executive for "Good  Reason",  the Company will
     pay the Executive a total amount equal to the aggregate of:-

(x)  an amount equal to the  Executive's  salary at the annual rate in effect on
     the Termination Date multiplied by 2.9; and

(y)  an  amount  equal to the  highest  annual  incentive  payments  paid to the
     Executive  under the Company's  current  Business  Incentive  Scheme or any
     successor   scheme  in  the  three  full  financial   years  preceding  the
     Termination Date multiplied by 2.9; and

(z)  an amount  equal to the annual cost to the  Company of  providing a company
     car for the Executive;

     Provided that the Company may in its absolute discretion choose to continue
     to  provide  the  Executive  with a car for a period of one year  after the
     Termination  Date on the  terms  contained  in  Clause 9 above in which the
     amount  in (z)  above  shall  not be  included  in the  above  calculation.
     Payments  of such total  amount will be made by equal  monthly  instalments
     over a period of three years following the  Termination  Date. In addition,
     the Executive will be entitled to exercise any share options granted to him
     by the Company or any Group Company  notwithstanding  that the  contractual
     date for the  exercise of such share  options may not have been reached and
     the Company will  continue to provide the  Executive  with the  Executive's
     then current medical expenses insurance, long term disability insurance and
     life assurance  benefits for a period of three years.  All payments made to
     the Executive  hereunder will be subject to all  applicable  employment and
     withholding taxes.


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18.3 Limitations

     Notwithstanding  anything in this  Agreement to the  contrary,  the maximum
     amount  of cash and  other  benefits  payable  under  this  Clause 18 shall
     include  all  compensation  to which the  Executive  may be entitled in the
     event of his successfully  claiming unfair dismissal and shall also include
     all  damages to which the  Executive  may be  entitled  in the event of his
     successfully  claiming that the Employment has been  wrongfully  terminated
     and shall  include all  redundancy  payments to which he may be entitled in
     the event of his redundancy.

19.     Certain Additional Definitions

19.1 Change in Control

     A "Change in Control" shall be deemed to have occurred (i) on the date that
     any person or group deemed a person under Sections  3(a)(9) and 13(d)(3) of
     the US Securities  Exchange Act of 1934, other than the Holding Company, in
     a transaction or series of transactions,  has become the beneficial  owner,
     directly or indirectly (with beneficial ownership as determined as provided
     in Rule 13d-3, or any successor rule under such Act), of 30% or more of the
     outstanding  voting securities of the Holding Company;  or (ii) on the date
     on which one third or more of the members of the Board of  Directors of the
     Holding Company shall consist of persons other than Current  Directors (for
     these  purposes,  "Current  Director" shall mean any member of the Board of
     Directors of the Holding  Company elected at or continuing in office after,
     the 1997  Annual  Meeting  of  Shareholders  of the  Holding  Company,  any
     successor of a Current  Director who has been approved by a majority of the
     Current  Directors then on the Board of the Holding Company,  and any other
     person who has been approved by a majority of the Current Directors then on
     the Board of the Holding Company);  or (iii) on the date of approval of (x)
     the merger or consolidation of the Holding Company with another corporation
     where the  shareholders of the Holding  Company,  immediately  prior to the
     merger or consolidation,  would not beneficially own, immediately after the
     merger or consolidation,  shares entitling such shareholders to 50% or more
     of all votes (without  consideration of the rights of any class of stock to
     elect directors by a separate class vote) to which all  shareholders of the
     corporation  would be entitled in the  election of  directors  or where the
     members of the Board of Directors of the Holding Company, immediately prior
     to the merger or  consolidation,  would not immediately after the merger or
     consolidation,  constitute  a  majority  of the Board of  Directors  of the
     corporation  issuing cash or securities in the merger or  consolidation  or
     (y) on the date of  approval  of the sale or  other  disposition  of all or
     substantially all the assets of the Holding Company.


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19.2 Good Reason

     Good Reason shall mean the  occurrence or existence of any of the following
     with respect to the Executive: (i) the Executive's annual rate of salary is
     reduced from the annual rate then  currently  in effect or the  Executive's
     other employee benefits are in the aggregate  materially reduced from those
     then  currently  in effect  (unless  such  reduction  of employee  benefits
     applies to employees of the Company  generally),  or (ii) the  Executive is
     assigned duties that are demeaning or are otherwise materially inconsistent
     with the duties then  currently  performed by the  Executive,  or (iii) the
     Executive's place of work is moved more than 25 miles from its then current
     location.  Before the  Executive  may  terminate  the  Employment  for Good
     Reason, he must notify the Company in writing of his intention to terminate
     and the Company shall have 15 days after  receiving  such written notice to
     remedy the situation, if possible.

20.  General

20.1 Other terms

     The provisions of the Company's standard terms and conditions of employment
     (as amended from time to time) shall be terms of the Executive's employment
     except to the extent that they are inconsistent with this Agreement.

20.2 Statutory particulars

     The further particulars of terms of employment not contained in the body of
     this Agreement which must be given to the Executive in compliance with Part
     1 of the Employment  Protection  (Consolidation)  Act 1978 are given in the
     Schedule.

20.3 Prior agreements

     This Agreement is in substitution for any previous  contracts of employment
     or for services  between the Company or any of its Group  Companies and the
     Executive  (which  shall  be  deemed  to have  been  terminated  by  mutual
     consent).

20.4 Accrued rights

     The expiration or termination of this Agreement  however  arising shall not
     operate to affect such of the provisions of this Agreement as are expressed
     to operate or have effect after then and shall be without  prejudice to any
     accrued rights or remedies of the parties.

20.5 Proper law

     The  validity  construction  and  performance  of this  Agreement  shall be
     governed by and construed  under English law and each of the parties hereto
     submits to the non-exclusive  jurisdiction of the English Courts as regards
     any claim or matter arising under this Agreement.


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20.6 Benefit of Obligations

     The Company hereby declares itself trustee of the obligations and covenants
     given in this  Agreement by the Executive  insofar as they are expressed to
     be for the benefit of any Group Company and holds the said  obligations and
     covenants  insofar as they are  expressed to be for the benefit of any such
     company  upon  trust  for the  absolute  benefit  of such  company  and the
     Executive hereby covenants with the Company in its capacity as such trustee
     to observe and perform each of the said obligations and covenants.

20.7 Notices

     Any notice to be given hereunder shall be served in the case of a notice to
     be served on the Executive by being delivered  either  personally to him or
     sent by  prepaid  first  class post  addressed  to him at his usual or last
     known  place of abode  or,  in the case of a  notice  to be  served  on the
     Company,  be  delivered  at or  sent by  prepaid  first  class  post to its
     registered office for the time being and any such notice so posted shall be
     deemed served on the second day following that on which it was posted.

AS WITNESS the hands of the parties hereto the day and year first above written.


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                                    SCHEDULE 

              Part 1 Employment Protection (Consolidation) Act 1978

The following  information is given to supplement the  information  given in the
body of the Agreement in order to comply with the  requirements of Part 1 of the
Act.

1.      The  Executive's  employment  by the  Company  commenced  on the date of
        this Agreement.

2.      The Executive's period of continuous  employment with the Company began 
        on 12 May 1997.

3.      The Executive's hours of work are the normal hours of the Company from 9
        am to 5.30 pm Monday to Friday each week together  with such  additional
        hours as may be necessary so as properly to fulfil his duties.

4.      The  Executive  is  subject  to the  Company's  Disciplinary  Rules  and
        Disciplinary   Procedures  copies  of  which  have  been  given  to  the
        Executive, but has no contractual entitlement in those respects.

5.      If the  Executive has any grievance  relating to his  employment  (other
        than one  relating  to a  disciplinary  decision)  he should  refer such
        grievance  to the  Chairman  of the  Board and if the  grievance  is not
        resolved  by  discussion  with him it will be  referred to the Board for
        resolution.


SIGNED by                                               )
on behalf of PSC BAR CODE LIMITED                       )
in the  presence of:-                                   )


Witness:

Address:


Occupation:

SIGNED by NIGEL PHILIP           )
 DAVIS in the presence of:-      )


Witness:

Address:

Occupation: