Document:

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                                                                   Exhibit 10.12

                              EMPLOYMENT AGREEMENT

                  This EMPLOYMENT AGREEMENT is made as of November 3, 1999, by
PubliCARD, Inc., a Pennsylvania corporation (the "Employer"), and Jan-Erik
Rottinghuis, an individual (the "Executive").

                  The parties, intending to be legally bound, hereby agree as
follows:

1.       PRE-EMPLOYMENT PAYMENT

                  The Employer acknowledges that the Executive's termination of
his current employment in order to accept employment with the Employer is
causing him to forfeit valuable unvested stock options and to exercise vested
stock options and sell the stock acquired thereby currently, when market
conditions are unfavorable and when the tax consequences to him under French
legislation will also be unfavorable. In consideration of the economic losses
that the Executive is incurring as a result of these actions which he is
required to take in France and in full satisfaction of a condition set by the
Executive for leaving his present employment position, the Employer and the
Executive have agreed that the Employer shall issue to the Executive 200,000
shares of its common stock, par value $0.10 per share (the "Common Stock").
Delivery of these shares shall be made immediately upon the execution and
delivery of this Agreement or at such later date as shall be specified in
writing by the Executive, and shall be unconditional and not dependent in any
fashion on the Executive's performance of services for the Employer.

2.       EMPLOYMENT TERMS AND DUTIES

         2.1 EMPLOYMENT; DUTIES

                  The Employer hereby employs the Executive, and the Executive
hereby accepts employment by the Employer, as its President and Chief Executive
Officer, with such duties consistent with those positions as are assigned or
delegated to him by the Board of Directors of Employer or any duly authorized
committee thereof (the "Board"). The Employer will nominate the Executive to
serve as a member of the Board of Directors of Employer. The Executive will
devote his entire business time, attention, skill and energy exclusively to the
business of the Employer, will use his best efforts to promote the success of
the Employer's business, and will cooperate fully with the Board in the
advancement of the best interests of the Employer.

         2.2      TERM

                  The term of the Executive's employment under this Agreement
will be three years, beginning on December 6, 1999 and ending on the third
anniversary of such date, subject to Section 6.

         3.       COMPENSATION

         3.1      BASIC COMPENSATION

                  (a) Salary. The Executive will be paid an annual salary of
$350,000 (the "Salary"), which will be payable in equal periodic installments
according to the Employer's customary payroll practices, but no less frequently
than monthly.

                  b) Option Grants. Upon the execution of this Agreement, the
Employer will issue to the Executive (i) options to acquire 400,000 shares of
Common Stock at an exercise price of $6.75 per share, in the form of Exhibit A
and (ii) contingent options to acquire 400,000 shares of Common Stock, at an
exercise price of $6.75 per share, in the form of Exhibit B.

                  (c) Benefits. The Executive will, during the term of his
employment be entitled to participate in such pension, profit sharing, bonus,
life insurance, hospitalization, major medical and other employee benefit plans
of the Employer as may be in effect from time to time, to the extent the
Executive is eligible under the terms of those plans (collectively, the
"Benefits").

         3.2      BONUS COMPENSATION

                  The Executive shall be paid a bonus (the "Bonus") for each
calendar year during the term of his employment in an amount determined by the
Board, but not less than $100,000, in quarterly installments of $25,000 each,
with the balance, if any, payable by April 15th of the following year.
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4.       EXPENSES

         4.1      GENERAL

                  (a) The Employer will reimburse the Executive for reasonable
expenses incurred by the Executive at the request of, or on behalf of, the
Employer in the performance of his duties pursuant to this Agreement, to the
extent incurred and documented in accordance with the Employer's policies.

                  (b) The Employer will reimburse the Executive for reasonable
moving expenses incurred by the Executive in connection with (i) his move to the
United States from France, and (ii) his return to France from the United States
at the end of the term of his employment.

                  (c) The Employer will reimburse the Executive for his
reasonable temporary living expenses in the United States until the earlier of
(i) six months from the date of this Agreement, and (ii) the date on which he
establishes and takes occupancy of a residence in the United States.

                  (d) The Employer will assume the Executive's life insurance
policies (numbers 10-875-722 and 8-915-546) with Northwestern Mutual Life
Insurance Company, 720 East Wisconsin Avenue, Milwaukee WI 53202-4797, and shall
pay the premiums due on such policy during the Employment Period.

                  (e) The Employer will reimburse the Executive for the
reasonable fees of legal counsel retained by the Executive in connection with
the negotiation of this Agreement, to the extent not exceeding $15,000.

         4.2      AUTOMOBILE AND GOLF CLUB

                  The Employer will reimburse the Executive for the reasonable
rental cost of an appropriate automobile and the reasonable expense of parking,
gasoline, maintenance, insurance and other costs ancillary to the operation of
the automobile during the Employment Period, to the extent documented in
accordance with Employer's policies. In addition, the Employer will reimburse
the Executive for the reasonable dues and expenses of an appropriate golf club
membership.

         5.       VACATIONS, HOLIDAYS AND HOME LEAVE

                  5.1 The Executive will be entitled to four weeks' paid
vacation each calendar year in accordance with the vacation policies of the
Employer in effect for its executive officers from time to time.

                  5.2 The Employer will reimburse the Executive for reasonable
expenses, including business class air fare, incurred by the Executive's wife in
traveling to France once per calendar quarter, to the extent documented in
accordance with the Employer's policies.

6.       TERMINATION

         6.1      EVENTS OF TERMINATION

                  The Employment Period, the Executive's Basic Compensation,
Incentive Compensation and Bonus, and any and all other rights of the Executive
under this Agreement or otherwise as an employee of the Employer will terminate
(except as otherwise provided in this Section 6):

                  (a) upon the death of the Executive;

                  (b) upon the Disability of the Executive immediately upon
notice from either party to the other;

                  (c) For Cause, immediately upon notice from the Employer to
the Executive, or at such later time as such notice may specify; or

                  (d) For Good Reason upon not less than thirty days' prior
notice from the Executive to the Employer.

6.2      DEFINITION OF DISABILITY

                  For purposes of Section 6.1, the Executive will be deemed to
have a "Disability" if, for physical or mental reasons, the Executive is unable
to perform the Executive's duties under this Agreement for 120 consecutive days,
or 180 days during any twelve month period, as determined by the Board in good
faith. In order to assist the Board in making that determination, the Executive
will submit to a reasonable number of examinations by a medical doctor

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designated by the Board and the Executive hereby authorizes the disclosure and
release to the Employer of the results of such examinations and all supporting
medical records.

         6.3      DEFINITION OF "FOR CAUSE"

                  For purposes of Section 6.1, the phrase "For Cause" means: (a)
the Executive's breach of this Agreement in any material respect; (b) the
Executive's failure to substantially perform his assigned duties hereunder or to
adhere to any written Employer policy if such failure continues uncured for at
least ten days after notice thereof; (c) the appropriation (or attempted
appropriation) of a material business opportunity of the Employer, including
attempting to secure or securing any personal profit in connection with any
transaction entered into on behalf of the Employer; (d) the misappropriation (or
attempted misappropriation) of any of the Employer's funds or property; or (e)
the conviction of, the indictment for (or its procedural equivalent), or the
entering of a guilty plea or plea of no contest with respect to, a felony, the
equivalent thereof, or any other crime, involving fraud or falsehood, or with
respect to which imprisonment is a possible punishment; or (f) use of illegal
drugs or controlled substances or excessive and recurring consumption of
alcoholic beverages.

         6.4      DEFINITION OF "FOR GOOD REASON"

                  For purposes of Section 6.1, the phrase "For Good Reason"
means any of the following: (a) the Employer's breach of this Agreement in any
material respect that continues uncured for at least ten days after notice
thereof from the Executive; (b) the assignment of the Executive without his
consent to a position, responsibilities, or duties inconsistent with Section 2;
(c) the requirement by the Employer that the Executive's principal place of
employment be anywhere more than 75 miles from New York County, without the
Executive's consent; or (d) the assignment of Employer's rights under this
Agreement pursuant to Section 9.6, without the Executive's consent .

        6.5      TERMINATION PAY

                  Effective upon the termination of this Agreement, the Employer
will be obligated to pay the Executive (or, in the event of his death, his
estate) only such compensation as is provided in this Section 6.5, in lieu of
all other amounts and in settlement and complete release of all claims the
Executive may have against the Employer.

                  (A) TERMINATION FOR GOOD REASON OR OTHER THAN FOR CAUSE. If
         the Executive's employment pursuant to this Agreement is terminated by
         the Employer other than For Cause or by the Executive for Good Reason,
         (i) the Employer shall continue to pay to the Executive the Executive's
         Salary, Bonus and Incentive Compensation for the remainder of the term
         of this Agreement, and (during such period or, if earlier, until he
         obtains new employment providing health benefits coverage) the Employer
         shall provide such continuation of health benefits coverage, including,
         without limitation, medical and dental coverage, required to be
         provided to employees, former employees and the beneficiaries or
         dependents of such employees and former employees under Part 6 of
         Subtitle B of Title I of the Employee Retirement Income Security Act of
         1974, as amended, or, if applicable, Section 4980B of the Internal
         Revenue Code of 1986, as amended, on terms no less favorable to the
         Executive than the terms on which such coverage was provided prior to
         termination of his employment and (ii) the Executive will be entitled
         to the payment provided by Section 4.1(b)(ii).

                  (B) TERMINATION UPON DISABILITY. If the Executive's employment
         pursuant to this Agreement is terminated by either party as a result of
         the Executive's Disability, as determined under Section 5.2, (i) the
         Employer will pay the Executive his Salary through the remainder of the
         calendar month during which such termination is effective, and that
         part of the Executive's (i) Incentive Compensation, if any, for the
         calendar year during which his disability occurs, and (ii) Bonus for
         the calendar year during which his disability occurs, in each case
         prorated through the end of the calendar month during which his
         disability occurs , and (ii) the Executive will be entitled to the
         payment provided by Section 4.1(b)(ii).

                  (C) TERMINATION UPON DEATH. If the Executive's employment
         pursuant to this Agreement is terminated because of the Executive's
         death, the Executive will be entitled to receive his Salary through the
         end of the calendar month in which his death occurs, and that part of
         the Executive's (i) Incentive Compensation, if any, for the calendar
         year during which his death occurs, (ii) Bonus for the calendar year
         during which his death occurs, in each case prorated through the end of
         the calendar month during which his death occurs, and (iii) the payment
         provided by Section 4.1(b)(ii).

                  (D) BENEFITS. The Executive's accrual of, or participation in
         plans providing for, the Benefits will cease at the effective date of
         the termination of his employment pursuant to this this Agreement, and
         the Executive will be entitled to accrued Benefits pursuant to such
         plans only as provided in this Agreement or in such plans. The
         Executive shall receive upon termination of his employment payment, at
         the rate of the Salary, for unused vacation that has accrued pursuant
         to Section 5.1 through the date of such termination (pro rated for the
         calendar year in which such termination occurs). The Executive will not
         receive, as part of his

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         termination pay pursuant to this Section 6, any other payment or other
         compensation for any vacation, holiday, sick leave, or other leave
         unused on the date the notice of termination is given under this
         Agreement.

7.       NON-DISCLOSURE COVENANT; EMPLOYEE INVENTIONS

         7.1      ACKNOWLEDGMENTS BY THE EXECUTIVE

                  The Executive acknowledges that (a) during the term of and as
a part of his employment, the Executive will be afforded access to Confidential
Information; (b) public disclosure of such Confidential Information could have
an adverse effect on the Employer and its business; (c) because the Executive
possesses substantial technical expertise and skill with respect to the
Employer's business, the Employer desires to obtain exclusive ownership of each
Employee Invention, and the Employer will be at a substantial competitive
disadvantage if it fails to acquire exclusive ownership of each Employee
Invention; and (d) the provisions of this Section 6 are reasonable and necessary
to prevent the improper use or disclosure of Confidential Information and to
provide the Employer with exclusive ownership of all Employee Inventions.

                  "CONFIDENTIAL INFORMATION" shall mean any and all:

                  (a) trade secrets concerning the business and affairs of the
Employer and its subsidiaries, product specifications, data, know-how, formulae,
compositions, processes, designs, sketches, photographs, graphs, drawings,
samples, inventions and ideas, past, current, and planned research and
development, current and planned manufacturing or distribution methods and
processes, customer lists, current and anticipated customer requirements, price
lists, market studies, business plans, computer software and programs (including
object code and source code), computer software and database technologies,
systems, structures, and architectures (and related formulae, compositions,
processes, improvements, devices, know-how, inventions, discoveries, concepts,
ideas, designs and methods and information), and any other information, however
documented, that is a trade secret under applicable law; and

                  (b) information concerning the business and affairs of the
Employer and its subsidiaries (which includes historical financial statements,
financial projections and budgets, historical and projected sales, capital
spending budgets and plans, the names and backgrounds of key personnel and
personnel training and techniques and materials), however documented; and

                  (c) notes, analysis, compilations, studies, summaries, and
other material prepared by or for the Employer or any of its subsidiaries
containing or based, in whole or in part, on any information included in the
foregoing.

                  "EMPLOYEE INVENTION" shall mean any idea, invention,
technique, modification, process or improvement (whether patentable or not), any
industrial design (whether registerable or not) and any work of authorship
(whether or not copyright protection may be obtained for it) created, conceived,
or developed by the Executive, either solely or in conjunction with others,
during the term of his employment, or a period that includes a portion of the
term of his employment, that relates in any way to, or is useful in any manner
in, the business then being conducted or proposed to be conducted by the
Employer or any of its subsidiaries, and any such item created by the Executive,
either solely or in conjunction with others, following termination of the
Executive's employment with the Employer, that is based upon or uses
Confidential Information.

         7.2      COVENANTS OF THE EXECUTIVE

                  In consideration of the compensation and benefits to be paid
or provided to the Executive by the Employer under this Agreement, the Executive
covenants as follows:

                  (A)      Confidentiality.

                           (i)  During and following the term of his employment,
                  the Executive will hold in confidence the Confidential
                  Information and will not disclose it to any person except with
                  the specific prior written consent of the Employer or except
                  as otherwise expressly permitted by the terms of this
                  Agreement.

                           (ii) Any trade secrets of the Employer will be
                  entitled to all of the protections and benefits under
                  applicable law. If any information that the Employer deems to
                  be a trade secret is found by a court of competent
                  jurisdiction not to be a trade secret for purposes of this
                  Agreement, such information will, nevertheless, be considered
                  Confidential Information for purposes of this Agreement. The
                  Executive hereby waives any requirement that the Employer
                  submit proof of the economic value of any trade secret.

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                           (iii) None of the foregoing obligations and
                  restrictions applies to any part of the Confidential
                  Information that the Executive demonstrates was or became
                  generally available to the public other than as a result of a
                  disclosure by the Executive.

                           (iv) The Executive will not remove from the
                  Employer's or any of its subsidiaries' premises (except to the
                  extent such removal is for purposes of the performance of the
                  Executive's duties at home or while traveling, or except as
                  otherwise specifically authorized by the Employer) any
                  document, record, notebook, plan, model, component, device, or
                  computer software or code, whether embodied in a disk or in
                  any other form (collectively, the "Proprietary Items"). The
                  Executive ----------------- recognizes that, as between the
                  Employer and the Executive, all of the Proprietary Items,
                  whether or not developed by the Executive, are the exclusive
                  property of the Employer. Upon termination of this Agreement
                  by either party, or upon the request of the Employer during
                  the Employment Period, the Executive will return to the
                  Employer all of the Proprietary Items in the Executive's
                  possession or subject to the Executive's control, and the
                  Executive shall not retain any copies, abstracts, sketches, or
                  other physical embodiment of any of the Proprietary Items.

                  (B) Employee Inventions. Each Employee Invention will belong
         exclusively to the Employer. The Executive acknowledges that all of the
         Executive's writing, works of authorship, specially commissioned works
         and other Employee Inventions are works made for hire and the property
         of the Employer, including any copyrights, patents, or other
         intellectual property rights pertaining thereto. If it is determined
         that any such works are not works made for hire, the Executive hereby
         assigns to the Employer all of the Executive's right, title, and
         interest, including all rights of copyright, patent, and other
         intellectual property rights, to or in such Employee Inventions. The
         Executive covenants that he will promptly:

                           (i) disclose to the Employer in writing any Employee
                  Invention;

                           (ii) assign to the Employer or to a party designated
                  by the Employer, at the Employer's request and without
                  additional compensation, all of the Executive's right to the
                  Employee Invention for the United States and all foreign
                  jurisdictions;

                           (iii) execute and deliver to the Employer such
                  applications, assignments and other documents as the Employer
                  may request in order to apply for and obtain patents or other
                  registrations with respect to any Employee Invention in the
                  United States and any foreign jurisdictions;

                           (iv) sign all other papers necessary to carry out the
                  above obligations; and

                           (v) give testimony and render any other assistance in
                  support of the Employer's rights to any Employee Invention.

         7.3      DISPUTES OR CONTROVERSIES

                  The Executive recognizes that should a dispute or controversy
arising from or relating to this Agreement be submitted for adjudication to any
court, arbitration panel or other third party, the preservation of the secrecy
of Confidential Information may be jeopardized. All pleadings, documents,
testimony and records relating to any such adjudication will be maintained in
secrecy and will be available for inspection by the Employer, the Executive and
their respective attorneys and experts, who will agree, in advance and in
writing, to receive and maintain all such information in secrecy, except as may
be limited by them in writing.

8.       NON-COMPETITION AND NON-INTERFERENCE

         8.1      ACKNOWLEDGMENTS BY THE EXECUTIVE

                  The Executive acknowledges that: (a) the services to be
performed by him under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character; (b) the Employer's business is
national in scope and its products are marketed throughout the United States;
(c) the Employer competes with other businesses that are or could be located in
any part of the United States; and (d) the provisions of this Section 8 are
reasonable and necessary to protect the Employer's business.

         8.2      COVENANTS OF THE EXECUTIVE

                  In consideration of the acknowledgments by the Executive, and
in consideration of the compensation and benefits to be paid or provided to the
Executive by the Employer, the Executive covenants that he will not, directly or
indirectly:

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                  (a) during the term of his employment, except in the course of
his employment hereunder, and during the Post-Employment Period, engage or
invest in, own, manage, operate, finance, control or participate in the
ownership, management, operation, financing or control of, be employed by,
associated with, or in any manner connected with, lend the Executive's name or
any similar name to, lend Executive's credit to or render services or advice to,
any business engaged in any aspect of the Smart Card Business; provided,
however, that the Executive may purchase or otherwise acquire up to (but not
more than) one percent of any class of securities of any enterprise (but without
otherwise participating in the activities of such enterprise) if such securities
are registered under Section 12 of the Securities Exchange Act of 1934, as
amended;

                  (b) whether for the Executive's own account or for the account
of any other person, at any time during the term of his employment and the
Post-Employment Period, solicit business related to the Smart Card Business from
any person known by the Executive to be a customer of the Employer or any of its
subsidiaries, whether or not the Executive had personal contact with such person
during and by reason of the Executive's employment with the Employer;

                  (c) whether for the Executive's own account or the account of
any other person (i) at any time during the term of his employment and the
Post-Employment Period, solicit, employ or otherwise engage as an employee,
independent contractor, or otherwise, any person who is or was an employee of
the Employer or any of its subsidiaries at any time during the term of his
employment or in any manner induce or attempt to induce any employee of the
Employer or any of its subsidiaries to terminate his employment with the
Employer or any of its subsidiaries; or (ii) at any time during the term of his
employment and for three years thereafter, interfere with the Employer's or any
of its subsidiaries' relationships with any person, including any person who at
any time during the Employment Period was an employee, contractor, supplier, or
customer of the Employer or any of its subsidiaries; or

                  (d) at any time during or after the term of his employment,
disparage the Employer or any of its subsidiaries, shareholders, directors,
officers, employees or agents.

                  For purposes of this Section 8.2, (i) the term
"Post-Employment Period" means the two-year period beginning on the date of
termination of the Executive's employment with the Employer, unless the the
Executive's employment pursuant to this Agreement is terminated by the Employer
other than For Cause or by the Executive for Good Reason, in which event it
shall end on the date of termination of the Executive's employment and (ii) the
term "Smart Card Business" means the creation, development, manufacture, sale,
license or distribution of smart cards or smart card systems.

                  If any covenant in this Section 8.2 is held to be
unreasonable, arbitrary or against public policy, such covenant will be
considered to be divisible with respect to scope, time and geographic area, and
such lesser scope, time or geographic area, or all of them, as a court of
competent jurisdiction may determine to be reasonable, not arbitrary, and not
against public policy, will be effective, binding and enforceable against the
Executive.

                  The period of time applicable to any covenant in this Section
8.2 will be extended by the duration of any violation by the Executive of such
covenant.

                  The Executive will, while the covenant under this Section 8.2
is in effect, give notice to the Employer, within ten days after accepting any
other employment, of the identity of the Executive's employer. The Employer may
notify such employer that the Executive is bound by this Agreement and, at the
Employer's election, furnish such employer with a copy of this Agreement or
relevant portions thereof.

9.       GENERAL PROVISIONS

         9.1      INJUNCTIVE RELIEF AND ADDITIONAL REMEDY

                  The Executive acknowledges that the injury that would be
suffered by the Employer as a result of a breach of the provisions of this
Agreement (including any provision of Sections 7 and 8) would be irreparable and
that an award of monetary damages to the Employer for such a breach would be an
inadequate remedy. Consequently, the Employer will have the right, in addition
to any other rights it may have, to obtain injunctive relief to restrain any
breach or threatened breach or otherwise to specifically enforce any provision
of this Agreement, and the Employer will not be obligated to post bond or other
security in seeking such relief. In any action to obtain such relief, if the
Executive is the prevailing party he shall be entitled to recover from the
Employer the reasonable costs incurred by him in defending such action,
including, without limitation, reasonable attorneys' fees.

                  Without limiting the Employer's rights under this Section 9 or
any other remedies of the Employer, if the Executive breaches any of the
provisions of Section 7 or 8, the Employer will have the right to cease making
any payments otherwise due to the Executive under this Agreement. If the
Employer ceases making any such payments to the Executive by reason of the
preceding sentence and it is finally judicially determined that the Executive
had not

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breached any of the provisions of Section 7 or 8 and that the Employer's failure
to make such payments was not authorized by the preceding sentence, the
Executive shall be entitled to recover, in addition to the payments that the
Employer improperly failed to make, interest on each such payment from the date
it was due until it is made at the prime rate of The Chase Manhattan Bank.

         9.2      COVENANTS OF SECTIONS 7 AND 8 ARE ESSENTIAL AND INDEPENDENT
COVENANTS

                  The covenants by the Executive in Sections 7 and 8 are
essential elements of this Agreement, and without the Executive's agreement to
comply with such covenants, the Employer would not have entered into this
Agreement or employed or continued the employment of the Executive. The Employer
and the Executive have independently consulted their respective counsel and have
been advised in all respects concerning the reasonableness and propriety of such
covenants, with specific regard to the nature of the business conducted by the
Employer.

                  The Executive's covenants in Sections 7 and 8 are independent
covenants and the existence of any claim by the Executive against the Employer
under this Agreement or otherwise will not excuse the Executive's breach of any
covenant in Section 7 or 8.

                  If the Executive's employment hereunder expires or is
terminated, this Agreement will continue in full force and effect as is
necessary or appropriate to enforce the covenants and agreements of the
Executive in Sections 7 and 8.

         9.3      REPRESENTATIONS AND WARRANTIES BY THE EXECUTIVE

                  The Executive represents and warrants to the Employer that the
execution and delivery by the Executive of this Agreement do not, and the
performance by the Executive of the Executive's obligations hereunder will not,
with or without the giving of notice or the passage of time, or both: (a)
violate any judgment, writ, injunction or order of any court, arbitrator or
governmental agency applicable to the Executive; or (b) conflict with, result in
the breach of any provisions of or the termination of, or constitute a default
under, any agreement to which the Executive is a party or by which the Executive
is or may be bound.

         9.4      OBLIGATIONS CONTINGENT ON PERFORMANCE

                  Except as otherwise specifically provided herein, the
obligations of the Employer hereunder, including its obligation to pay the
compensation provided for herein, are contingent upon the Executive's
performance of the Executive's obligations hereunder.

         9.5      WAIVER

                  The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by either
party in exercising any right, power or privilege under this Agreement will
operate as a waiver of such right, power or privilege, and no single or partial
exercise of any such right, power or privilege will preclude any other or
further exercise of such right, power or privilege or the exercise of any other
right, power or privilege. To the maximum extent permitted by applicable law,
(a) no claim or right arising out of this Agreement can be discharged by one
party, in whole or in part, by a waiver or renunciation of the claim or right
unless in writing signed by the other party; (b) no waiver that may be given by
a party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one party will be deemed to be a waiver
of any obligation of such party or of the right of the party giving such notice
or demand to take further action without notice or demand as provided in this
Agreement.

         9.6      BINDING EFFECT; DELEGATION OF DUTIES PROHIBITED

                  This Agreement shall inure to the benefit of, and shall be
binding upon, the parties hereto and their respective successors, assigns, heirs
and legal representatives, including any entity with which the Employer may
merge or consolidate or to which all or substantially all of its assets may be
transferred. The duties and covenants of the Executive under this Agreement,
being personal, may not be delegated.

         9.7      NOTICES

                  All notices, consents, waivers, and other communications under
this Agreement must be in writing and will be deemed to have been duly given
when (a) delivered by hand (with written confirmation of receipt), (b) sent by
facsimile (with written confirmation of receipt), provided that a copy is mailed
by registered mail, return receipt requested or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt

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requested), in each case to the appropriate addresses and facsimile numbers set
forth below (or to such other addresses and facsimile numbers as a party may
designate by notice to the other parties):

                  If to Employer:

                  PubliCARD, Inc.
                  620 Fifth Avenue
                  7th Floor
                  New York, NY  10020
                  Attention: Harry I. Freund, Chairman
                  Facsimile No.:  (212) 307-5781

                  With a copy to:

                  Kaye, Scholer, Fierman, Hays & Handler, LLP
                  425 Park Avenue
                  New York, NY 10022
                  Attention: Joel I. Greenberg, Esq.
                  Facsimile No.: 212-836-8689

                  If to the Executive:
                  c/o PubliCARD, Inc.
                  620 Fifth Avenue
                  7th Floor
                  New York, NY 10020
                  Facsimile:  212-307-5781

                  With a copy to:
                  Levine & Okoshken
                  51 Avenue Montaigne
                  75008 Paris, France
                  Attention: Samuel Okoshken, Esq.
                  Facsimile 33 1 45 63 24 96

         9.8      ENTIRE AGREEMENT; AMENDMENTS

                  This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, oral or written, between the parties hereto with
respect to the subject matter hereof. This Agreement may not be amended orally,
but only by an agreement in writing signed by the parties hereto.

         9.9      GOVERNING LAW

                  This Agreement will be governed by the laws of the State of
New York without regard to conflicts of laws principles.

         9.10     JURISDICTION

                  Any action or proceeding seeking to enforce any provision of,
or based on any right arising out of, this Agreement may be brought against
either of the parties in the courts of the State of New York, County of New
York, or, if it has or can acquire jurisdiction, in the United States District
Court for the Southern District of New York, and each of the parties consents to
the jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on either party anywhere in the world.

         9.11     SECTION HEADINGS, CONSTRUCTION

                  The headings of Sections in this Agreement are provided for
convenience only and will not affect its construction or interpretation. All
references to "Section" or "Sections" refer to the corresponding Section or
Sections of this Agreement unless otherwise specified. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.

                                       8
<PAGE>   9
         9.12     SEVERABILITY

                  If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.

         9.13     COUNTERPARTS

                  This Agreement may be executed in one or more counterparts,
each of which will be deemed to be an original copy of this Agreement and all of
which, when taken together, will be deemed to constitute one and the same
agreement.

                                       9
<PAGE>   10
         IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date above first written above.

                                    PUBLICARD, INC.

                                    By:_________________________
                                         Name:   Harry I. Freund
                                         Title:  Chairman

                                    By:
                                         Name:   Jay Goldsmith
                                         Title:  Vice Chairman

                                    EXECUTIVE:

                                    ________________________________
                                       Jan-Erik Rottinghuis

Dated:  November 1, 1999

                                       10
<PAGE>   11
                                                                       Exhibit A

                                OPTION AGREEMENT

                  AGREEMENT, dated as of November __, 1999, between PubliCARD,
Inc., a Pennsylvania corporation with offices at One Post Road, Fairfield,
Connecticut 06430 (the "Corporation"), and Jan-Erik Rottinghuis (the
"Optionee").

                  NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and for other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, do hereby agree as follows:

1.       The Optionee is hereby granted an option to purchase from the
         Corporation, subject to and under the terms and conditions set forth in
         this Agreement, all or any part of 400,000 shares of common stock, par
         value $.10 per share of the Corporation (the "Common Stock"), at an
         exercise price equal to $6.75 per share (the "Exercise Price"). This
         option is not intended to be treated as an incentive stock option under
         Section 422 of the Internal Revenue Code of 1986, as amended (the
         "Code").

2.       This option shall become exercisable in accordance with the following
         schedule:

<TABLE>
<CAPTION>

                  Number of shares                   Vesting date

<S>                                                               <C>
                  133,333                            November __, 2000
                  133,333                            November __, 2001
                  133,334                            November __, 2002
</TABLE>

         If the Optionee's employment is terminated (i) by the Corporation other
         than For Cause (as defined in the employment agreement dated November
         __, 1999 (the "Employment Agreement") or (ii) by Optionee For Good
         Reason (as defined in the Employment Agreement), this option shall
         become exercisable in full.

         The Optionee may purchase all or any part of the shares then vested
         (but not fractions of a share) to which this option relates, at such
         time or times as he may desire, until this option expires. Unless
         sooner terminated as provided in this Agreement, the options granted
         shall expire at 5:00 P.M. Eastern Time on the five year anniversary of
         the date hereof (the "Expiration Time"), and any shares not purchased
         on or before such date may not thereafter be purchased hereunder.

3.       The Optionee shall exercise the option by delivering to the Corporation
         a written notice of exercise in substantially the form attached hereto
         as Exhibit I. Common Stock purchased pursuant to this Agreement shall
         be paid for in full in cash at the time of purchase or in shares of
         Common Stock surrendered to the Corporation or in a combination of cash
         and such shares. Shares of Common Stock thus surrendered shall be
         valued at their Fair Market Value (as defined in this Section 3 below)
         on the date of exercise. Upon receipt of payment and written notice of
         exercise, the Corporation shall deliver, without stock transfer tax to
         the Optionee or other person entitled to exercise the option, to the
         person exercising the option, a certificate or certificates for such
         shares. It shall be a condition to the performance of the Corporation's
         obligation to issue or transfer Common Stock upon exercise of this
         option that the person exercising this option pay, or make provision
         satisfactory to the Corporation for the payment of, any taxes (other
         than stock transfer taxes) which the Corporation is obligated to
         collect with respect to the issue or transfer of Common Stock upon
         exercise (including any federal, state or local withholding taxes).

         As used in this Agreement, the "Fair Market Value" of a share of Common
         Stock shall mean the per share value of the Common Stock as of a given
         date, determined as follows:

         a.       If the Common Stock is listed or admitted for trading on the
                  New York Stock Exchange (or if not, on another national
                  securities exchange), the Fair Market Value of the Common
                  Stock is the average of the closing quotations for such stock
                  based on composite transactions for the New York Stock
                  Exchange (or if not listed on it, such other national
                  securities exchange) for the five Trading Days (as defined
                  below) ending at the close of business on the day prior to
                  such given date.

         b.       If the Common Stock is not traded on any national securities
                  exchange, but is quoted on the National Association of
                  Securities Dealers, Inc. Automated Quotation System (NASDAQ
                  System) or any similar system of automated dissemination of
                  quotations of prices in common use, the Fair Market

                                       11
<PAGE>   12
                  Value of the Common Stock is the average of the last sales
                  price (if the stock is listed as a national market issue under
                  the NASDAQ System) or the mean between the closing
                  representative bid and asked prices (in all other cases) for
                  the stock as reported by the NASDAQ System (or such similar
                  quotation system) for the five Trading Days ending at the
                  close of business on the day prior to such given date.

         c.       If neither clause (a) nor clause (b) of this definition is
                  applicable, the Fair Market Value of the Common Stock is the
                  fair market value per share as of such valuation date, as
                  determined by the Board of Directors of the Corporation in
                  good faith and in accordance with uniform principles
                  consistently applied.

         d.       "Trading Day" shall mean a day on which the principal national
                  securities exchange on which the Common Stock is listed or
                  admitted to trading is open for the transaction of business
                  or, if the Common Stock is not listed or admitted to trading
                  on any national securities exchange, any business day.

4.       The Corporation hereby agrees that at all times there shall be reserved
         for issuance and delivery upon exercise of the option such number of
         shares of its Common Stock as shall be required for issuance and
         delivery upon the exercise of the option, and that such shares, when
         issued in accordance with the terms of this Agreement, shall be validly
         issued, fully paid, and non-assessable. The Corporation covenants and
         agrees that it will from time to time take all such action as may be
         necessary to assure that the par value per share of the Common Stock is
         at all times equal to or less than the then effective Exercise Price of
         the option.

5.       This option is not transferable other than by will or the laws of
         descent and distribution. Any other transfer of this option (including
         without limitation any purported assignment, whether voluntary or by
         operation of law, pledge, hypothecation or other disposition contrary
         to the provisions hereof, or levy of execution, attachment, trustee
         process or similar process, whether legal or equitable, of the option)
         shall be null and void and of no effect. Any shares issued pursuant to
         this option shall not be registered under the Securities Act of 1933,
         as amended (the "Act"). The Optionee may not sell or otherwise dispose
         of such shares in the absence of either a registration statement under
         the Act or an exemption from the registration provisions thereunder,
         with respect to which the Optionee shall have delivered to the
         Corporation an opinion of counsel, in form satisfactory to the
         Corporation, that, under the circumstances, registration is not
         required. The certificates representing such shares shall bear a legend
         as follows:

                           The shares represented by this certificate have not
                  been registered under the Securities Act of 1933 and may not
                  be transferred in the absence of either an effective
                  registration statement under the Securities Act of 1933, as
                  amended (the "Act") with respect to such shares, or an
                  exemption from the registration provisions of the Act, with
                  respect to which the Corporation shall have received an
                  opinion of counsel, in form satisfactory to it, that, under
                  the circumstances, registration under the Act is not required.

6.       This option shall be exercisable during the life of the Optionee only
         by the Optionee and the Optionee's guardian or legal representative and
         after death only by the Optionee's legal representative.
         Notwithstanding the following provisions of this Section 6, no option
         shall be exercisable after the Expiration Time. If the Optionee's
         consulting arrangement or employment with the Corporation terminates
         for any reason other than (i) For Cause, (ii) death or (iii)
         termination by the Optionee other than For Good Reason, the option may
         be exercised (to the extent it was exercisable immediately preceding
         such termination) until 90 days after the date of such termination. If
         the option was not exercisable immediately preceding such termination
         of employment, the option shall terminate upon such termination of
         employment.

         If the Optionee's consulting arrangement or employment with the
         Corporation is terminated For Cause or by the Optionee other than For
         Good Reason, the option shall terminate immediately upon such
         termination of the consulting arrangement or employment, regardless of
         whether the option was exercisable immediately preceding such
         termination of employment.

         Upon the death of the Optionee while in active service with the
         Corporation, the person or persons to whom the Optionee's rights under
         the option are transferred by will or the laws of descent and
         distribution may exercise the option until the expiration of 12 months
         after the date of the Optionee's death, but only to the extent the
         option was exercisable immediately preceding the Optionee's death. If
         the option was not exercisable immediately preceding the Optionee's
         death, the option shall terminate upon the Optionee's death.

7.       If dividends payable in Common Stock during any fiscal year of the
         Corporation exceed an aggregate of 5% of the Common Stock issued and
         outstanding at the beginning of such fiscal year, or if, during any
         fiscal year

                                       12
<PAGE>   13
         of the Corporation, there is one or more splits, subdivisions, or
         combinations of shares of Common Stock resulting in an increase or
         decrease by more than 5% of the shares outstanding at the beginning of
         the year, the number of shares available under this option shall be
         increased or decreased proportionately, as the case may be, without
         change in the aggregate exercise price. Common Stock dividends, splits,
         subdivisions, or combinations during any fiscal year which do not
         exceed, in the aggregate, 5% of the Common Stock issued and outstanding
         at the beginning of such year shall be ignored for purposes of this
         option. All adjustments shall be made as of the day such action
         necessitating such adjustment becomes effective.

         In case the Corporation is merged or consolidated with another
         corporation, or in case the property or stock of the Corporation is
         acquired by another corporation, or in case of a reorganization or
         liquidation of the Corporation, the Board of Directors of the
         Corporation, or the board of directors of any corporation assuming the
         obligations of the Corporation hereunder, shall either (i) make
         appropriate provisions for the protection of this option by the
         substitution on an equitable basis of appropriate stock or other
         property of the Corporation, or appropriate stock or other property of
         the merged, consolidated or otherwise reorganized corporation, provided
         only that such substitution of options or other property shall comply
         with the requirements of Section 424 of the Code, or (ii) give written
         notice to the Optionee that his options, which will become immediately
         exercisable (if not already immediately exercisable), must be exercised
         within 30 days of the date of such notice (but not later than the
         Expiration Time) or they will be terminated.

8.       The grant and exercise of this option, and the Corporation's obligation
         to sell and deliver shares upon the exercise of this option, shall be
         subject to the requirement that, if at any time the Board of Directors
         of the Corporation shall determine, in its discretion, that the
         listing, registration or qualification of the shares issuable or
         transferable upon exercise thereof upon any securities exchange or
         under any state or Federal law, or the consent or approval of any
         governmental regulatory body is necessary or desirable as a condition
         of, or in connection with, the granting of this option, the issue,
         transfer, or purchase of shares thereunder may not be exercised in
         whole or in part unless such listing, registration, qualification,
         consent or approval shall have been effected or obtained free of any
         conditions not acceptable to the Board of Directors of the Corporation.
         The Corporation shall not be obligated to sell or issue any shares of
         Common Stock in any manner in contravention of the Securities Act of
         1933, as amended or any state securities law.

9.       This Agreement shall not give the Optionee any right with respect to
         continuance as a consultant or an employee of the Corporation, nor
         shall it be a limitation in any way on any legal right which the Board
         of Directors of the Corporation, the Corporation's stockholders or an
         officer of the Corporation may have to terminate the Optionee as an
         employee at any time.

10.      The Optionee shall have no rights as a stockholder with respect to any
         shares issuable or transferable upon exercise of the option until the
         date a stock certificate is issued to the Optionee for such shares,
         and, except as otherwise expressly provided in this Agreement, no
         adjustment shall be made for dividends or other rights for which the
         record date is prior to the date such stock certificate is issued.

11.      All notices hereunder shall be in writing, and if to the Corporation,
         shall be delivered personally to the Secretary of the Corporation or
         mailed to the address provided in the preamble of this Agreement,
         addressed to the attention of the Secretary, and if to the Optionee,
         shall be delivered personally or mailed to the Optionee at the address
         provided in the preamble of this Agreement. Such addresses may be
         changed at any time by notice from one party to the other.

12.      All decisions or interpretations made by the Board of Directors of the
         Corporation with regard to any question arising hereunder shall be
         binding and conclusive on the Corporation and the Optionee.

13.      This Agreement shall bind and inure to the benefit of the parties
         hereto and the successors and assigns of the Corporation and, to the
         extent provided in Sections 6 and 8, the executors, administrators,
         legatees and heirs of the Optionee.

                                       13
<PAGE>   14
         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                      PUBLICARD, INC.

                                      By:      _______________________________
                                      Name:

                                               _______________________________
                                                   Jan-Erik Rottinghuis

                                       14
<PAGE>   15
                                                                       Exhibit I

                                 EXERCISE NOTICE

                  The undersigned, pursuant to an Option Agreement dated
November __, 1999 between the undersigned and PubliCARD, Inc. (the
"Corporation"), hereby irrevocably elects to exercise purchase rights
represented by said option agreement for, and to purchase thereunder, _______
shares of the Common Stock (the "Shares") of the Corporation covered by said
Option Agreement and herewith makes payment in full therefor pursuant to Section
3 of such Option Agreement.

                  The undersigned (i) hereby agrees, represents and warrants
that I will not dispose of the shares unless a registration statement under the
Securities Act of 1933, as amended, covering the shares is in effect or, in the
opinion of counsel to the Company, an exemption from such registration is
available, and (ii) hereby acknowledges that the number of shares hereafter
subject to the Option Agreement referred to above is hereafter reduced by the
number of shares which I have hereby elected to purchase.

                                         Very truly yours,

                                         Jan-Erik Rottinghuis

                                         Social Security Number ______________

                                         Address: ______________________

                                                        ______________________

                                         Dated:         ______________________

                                       15
<PAGE>   16
                                                                       Exhibit B

                                OPTION AGREEMENT

                  AGREEMENT, dated as of November __, 1999, between PubliCARD,
Inc., a Pennsylvania corporation with offices at One Post Road, Fairfield,
Connecticut 06430 (the "Corporation"), and Jan-Erik Rottinghuis (the
"Optionee").

                  NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and for other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties, intending
to be legally bound, do hereby agree as follows:

1.       The Optionee is hereby granted an option to purchase from the
         Corporation, subject to and under the terms and conditions set forth in
         this Agreement, all or any part of 400,000 shares of common stock, par
         value $.10 per share of the Corporation (the "Common Stock"), at an
         exercise price equal to $6.75 per share (the "Exercise Price"). This
         option is not intended to be treated as an incentive stock option under
         Section 422 of the Internal Revenue Code of 1986, as amended (the
         "Code").

2.       This option shall become exercisable in accordance with, in such
         installments as may be provide in and upon satisfaction of the
         applicable Performance Criteria for the periods specified in the
         Performance Criteria. The Performance Criteria shall be established by
         mutual agreement of the Corporation and Optionee. The parties will
         endeavor to agree upon the Performance Criteria within 90 days after
         the date hereof.

         If the Optionee's employment is terminated (i) by the Corporation other
         than For Cause (as defined in the employment agreement dated November
         __, 1999 (the "Employment Agreement") or (ii) by Optionee For Good
         Reason (as defined in the Employment Agreement), this option shall
         thereafter be exercisable for a number of shares equal to the sum of
         (i) the number of shares for which it was exercisable immediately prior
         to such termination and (ii) the number of shares for which it could
         become exercisable after such termination if all Performance Criteria
         applicable to the period after termination were met.

         The Optionee may purchase all or any part of the shares then vested
         (but not fractions of a share) to which this option relates, at such
         time or times as he may desire, until this option expires. Unless
         sooner terminated as provided in this Agreement, the options granted
         shall expire at 5:00 P.M. Eastern Time on the five year anniversary of
         the date hereof (the "Expiration Time"), and any shares not purchased
         on or before such date may not thereafter be purchased hereunder.

3.       The Optionee shall exercise the option by delivering to the Corporation
         a written notice of exercise in substantially the form attached hereto
         as Exhibit I. Common Stock purchased pursuant to this Agreement shall
         be paid for in full in cash at the time of purchase or in shares of
         Common Stock surrendered to the Corporation or in a combination of cash
         and such shares. Shares of Common Stock thus surrendered shall be
         valued at their Fair Market Value (as defined in this Section 3 below)
         on the date of exercise. Upon receipt of payment and written notice of
         exercise, the Corporation shall deliver, without stock transfer tax to
         the Optionee or other person entitled to exercise the option, to the
         person exercising the option, a certificate or certificates for such
         shares. It shall be a condition to the performance of the Corporation's
         obligation to issue or transfer Common Stock upon exercise of this
         option that the person exercising this option pay, or make provision
         satisfactory to the Corporation for the payment of, any taxes (other
         than stock transfer taxes) which the Corporation is obligated to
         collect with respect to the issue or transfer of Common Stock upon
         exercise (including any federal, state or local withholding taxes).

         As used in this Agreement, the "Fair Market Value" of a share of Common
         Stock shall mean the per share value of the Common Stock as of a given
         date, determined as follows:

         a.       If the Common Stock is listed or admitted for trading on the
                  New York Stock Exchange (or if not, on another national
                  securities exchange), the Fair Market Value of the Common
                  Stock is the average of the closing quotations for such stock
                  based on composite transactions for the New York Stock
                  Exchange (or if not listed on it, such other national
                  securities exchange) for the five Trading Days (as defined
                  below) ending at the close of business on the day prior to
                  such given date.

         b.       If the Common Stock is not traded on any national securities
                  exchange, but is quoted on the National Association of
                  Securities Dealers, Inc. Automated Quotation System (NASDAQ
                  System) or any similar system of automated dissemination of
                  quotations of prices in common use, the Fair Market

                                       16
<PAGE>   17
                  Value of the Common Stock is the average of the last sales
                  price (if the stock is listed as a national market issue under
                  the NASDAQ System) or the mean between the closing
                  representative bid and asked prices (in all other cases) for
                  the stock as reported by the NASDAQ System (or such similar
                  quotation system) for the five Trading Days ending at the
                  close of business on the day prior to such given date.

        c.        If neither clause (a) nor clause (b) of this definition is
                  applicable, the Fair Market Value of the Common Stock is the
                  fair market value per share as of such valuation date, as
                  determined by the Board of Directors of the Corporation in
                  good faith and in accordance with uniform principles
                  consistently applied.

        d.        "Trading Day" shall mean a day on which the principal national
                  securities exchange on which the Common Stock is listed or
                  admitted to trading is open for the transaction of business
                  or, if the Common Stock is not listed or admitted to trading
                  on any national securities exchange, any business day.

4.       The Corporation hereby agrees that at all times there shall be reserved
         for issuance and delivery upon exercise of the option such number of
         shares of its Common Stock as shall be required for issuance and
         delivery upon the exercise of the option, and that such shares, when
         issued in accordance with the terms of this Agreement, shall be validly
         issued, fully paid, and non-assessable. The Corporation covenants and
         agrees that it will from time to time take all such action as may be
         necessary to assure that the par value per share of the Common Stock is
         at all times equal to or less than the then effective Exercise Price of
         the option.

5.       This option is not transferable other than by will or the laws of
         descent and distribution. Any other transfer of this option (including
         without limitation any purported assignment, whether voluntary or by
         operation of law, pledge, hypothecation or other disposition contrary
         to the provisions hereof, or levy of execution, attachment, trustee
         process or similar process, whether legal or equitable, of the option)
         shall be null and void and of no effect. Any shares issued pursuant to
         this option shall not be registered under the Securities Act of 1933,
         as amended (the "Act"). The Optionee may not sell or otherwise dispose
         of such shares in the absence of either a registration statement under
         the Act or an exemption from the registration provisions thereunder,
         with respect to which the Optionee shall have delivered to the
         Corporation an opinion of counsel, in form satisfactory to the
         Corporation, that, under the circumstances, registration is not
         required. The certificates representing such shares shall bear a legend
         as follows:

                  The shares represented by this certificate have not been
                  registered under the Securities Act of 1933 and may not be
                  transferred in the absence of either an effective registration
                  statement under the Securities Act of 1933, as amended (the
                  "Act") with respect to such shares, or an exemption from the
                  registration provisions of the Act, with respect to which the
                  Corporation shall have received an opinion of counsel, in form
                  satisfactory to it, that, under the circumstances,
                  registration under the Act is not required.

6.       This option shall be exercisable during the life of the Optionee only
         by the Optionee and the Optionee's guardian or legal representative and
         after death only by the Optionee's legal representative.
         Notwithstanding the following provisions of this Section 6, no option
         shall be exercisable after the Expiration Time. If the Optionee's
         consulting arrangement or employment with the Corporation terminates
         for any reason other than (i) For Cause, (ii) death or (iii)
         termination by the Optionee other than For Good Reason, the option may
         be exercised (to the extent it was exercisable immediately preceding
         such termination) until 90 days after the date of such termination. If
         the option was not exercisable immediately preceding such termination
         of employment, the option shall terminate upon such termination of
         employment.

         If the Optionee's consulting arrangement or employment with the
         Corporation is terminated For Cause or by the Optionee other than For
         Good Reason, the option shall terminate immediately upon such
         termination of the consulting arrangement or employment, regardless of
         whether the option was exercisable immediately preceding such
         termination of employment.

         Upon the death of the Optionee while in active service with the
         Corporation, the person or persons to whom the Optionee's rights under
         the option are transferred by will or the laws of descent and
         distribution may exercise the option until the expiration of 12 months
         after the date of the Optionee's death, but only to the extent the
         option was exercisable immediately preceding the Optionee's death. If
         the option was not exercisable immediately preceding the Optionee's
         death, the option shall terminate upon the Optionee's death.

7.       If dividends payable in Common Stock during any fiscal year of the
         Corporation exceed an aggregate of 5% of the Common Stock issued and
         outstanding at the beginning of such fiscal year, or if, during any
         fiscal year

                                       17
<PAGE>   18
         of the Corporation, there is one or more splits, subdivisions, or
         combinations of shares of Common Stock resulting in an increase or
         decrease by more than 5% of the shares outstanding at the beginning of
         the year, the number of shares available under this option shall be
         increased or decreased proportionately, as the case may be, without
         change in the aggregate exercise price. Common Stock dividends, splits,
         subdivisions, or combinations during any fiscal year which do not
         exceed, in the aggregate, 5% of the Common Stock issued and outstanding
         at the beginning of such year shall be ignored for purposes of this
         option. All adjustments shall be made as of the day such action
         necessitating such adjustment becomes effective.

         In case the Corporation is merged or consolidated with another
         corporation, or in case the property or stock of the Corporation is
         acquired by another corporation, or in case of a reorganization or
         liquidation of the Corporation, the Board of Directors of the
         Corporation, or the board of directors of any corporation assuming the
         obligations of the Corporation hereunder, shall either (i) make
         appropriate provisions for the protection of this option by the
         substitution on an equitable basis of appropriate stock or other
         property of the Corporation, or appropriate stock or other property of
         the merged, consolidated or otherwise reorganized corporation, provided
         only that such substitution of options or other property shall comply
         with the requirements of Section 424 of the Code, or (ii) give written
         notice to the Optionee that his options, which will become immediately
         exercisable (if not already immediately exercisable), must be exercised
         within 30 days of the date of such notice (but not later than the
         Expiration Time) or they will be terminated.

8.       The grant and exercise of this option, and the Corporation's obligation
         to sell and deliver shares upon the exercise of this option, shall be
         subject to the requirement that, if at any time the Board of Directors
         of the Corporation shall determine, in its discretion, that the
         listing, registration or qualification of the shares issuable or
         transferable upon exercise thereof upon any securities exchange or
         under any state or Federal law, or the consent or approval of any
         governmental regulatory body is necessary or desirable as a condition
         of, or in connection with, the granting of this option, the issue,
         transfer, or purchase of shares thereunder may not be exercised in
         whole or in part unless such listing, registration, qualification,
         consent or approval shall have been effected or obtained free of any
         conditions not acceptable to the Board of Directors of the Corporation.
         The Corporation shall not be obligated to sell or issue any shares of
         Common Stock in any manner in contravention of the Securities Act of
         1933, as amended or any state securities law.

9.       This Agreement shall not give the Optionee any right with respect to
         continuance as a consultant or an employee of the Corporation, nor
         shall it be a limitation in any way on any legal right which the Board
         of Directors of the Corporation, the Corporation's stockholders or an
         officer of the Corporation may have to terminate the Optionee as an
         employee at any time.

10.      The Optionee shall have no rights as a stockholder with respect to any
         shares issuable or transferable upon exercise of the option until the
         date a stock certificate is issued to the Optionee for such shares,
         and, except as otherwise expressly provided in this Agreement, no
         adjustment shall be made for dividends or other rights for which the
         record date is prior to the date such stock certificate is issued.

11.      All notices hereunder shall be in writing, and if to the Corporation,
         shall be delivered personally to the Secretary of the Corporation or
         mailed to the address provided in the preamble of this Agreement,
         addressed to the attention of the Secretary, and if to the Optionee,
         shall be delivered personally or mailed to the Optionee at the address
         provided in the preamble of this Agreement. Such addresses may be
         changed at any time by notice from one party to the other.

12.      All decisions or interpretations made by the Board of Directors of the
         Corporation with regard to any question arising hereunder shall be
         binding and conclusive on the Corporation and the Optionee.

13.      This Agreement shall bind and inure to the benefit of the parties
         hereto and the successors and assigns of the Corporation and, to the
         extent provided in Sections 6 and 8, the executors, administrators,
         legatees and heirs of the Optionee.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.

                                      PUBLICARD, INC.

                                      By:      _______________________________
                                      Name:

                                       18
<PAGE>   19
                                               ________________________________
                                                  Jan-Erik Rottinghuis

                                       19
<PAGE>   20
                                                                       Exhibit I

                                 EXERCISE NOTICE

                  The undersigned, pursuant to an Option Agreement dated
November __, 1999 between the undersigned and PubliCARD, Inc. (the
"Corporation"), hereby irrevocably elects to exercise purchase rights
represented by said option agreement for, and to purchase thereunder, _______
shares of the Common Stock (the "Shares") of the Corporation covered by said
Option Agreement and herewith makes payment in full therefor pursuant to Section
3 of such Option Agreement.

                  The undersigned (i) hereby agrees, represents and warrants
that I will not dispose of the shares unless a registration statement under the
Securities Act of 1933, as amended, covering the shares is in effect or, in the
opinion of counsel to the Company, an exemption from such registration is
available, and (ii) hereby acknowledges that the number of shares hereafter
subject to the Option Agreement referred to above is hereafter reduced by the
number of shares which I have hereby elected to purchase.

                                         Very truly yours,

                                         Jan-Erik Rottinghuis

                                         Social Security Number _______________

                                         Address: ______________________

                                                           ____________________

                                         Dated:            ____________________

                                       20<PAGE>   1
                                                                   EXHIBIT 10.13

                                 PUBLICARD, INC.
                          1999 LONG TERM INCENTIVE PLAN

                  PubliCARD, Inc., a Pennsylvania corporation, (the "Company")
has adopted the 1999 Long-Term Incentive Plan (the "Plan"), effective as of
August 4, 1999, to (1) attract and retain key employees, (2) motivate
participants to achieve long-term goals, (3) encourage employees to acquire a
proprietary interest in the Company through the ownership of Company stock, and
(4) reward consultants to the Company who are not employees of the Company
("Consultants").

                                    ARTICLE I
                                   DEFINITIONS

                  When used herein, the following terms shall have the meaning
set forth below, unless the context clearly indicates otherwise:

         1.1      "Board" shall mean the Board of Directors of the Company.

         1.2   "Cause" shall mean (a) the conviction of the holder of a Plan
Award of a felony or a crime involving moral turpitude or (b) the commission by
the holder of a Plan Award of a public or notorious act which subjects the
Company to public disrespect, scandal or ridicule and which adversely affects
the value of the services to the Company of the holder of the Plan Award.

         1.3      "Change in Control" shall mean:

                           (i)      any person within the meaning of Sections
                                    13(d) and 14(d) of the Securities Exchange
                                    Act of 1934 (other than the Company or any
                                    Subsidiary or any trustee or other fiduciary
                                    holding securities under an employee benefit
                                    plan of the Company or any Subsidiary),
                                    becoming the beneficial owner (within the
                                    meaning of Rule 13d-3 under the Securities
                                    Exchange Act of 1934) directly or
                                    indirectly, of securities of the Company
                                    representing thirty percent (30%) or more of
                                    the combined voting power of the Company's
                                    then outstanding securities;

                           (ii)     a majority of the directors elected at any
                                    special or annual meeting of stockholders
                                    are not individuals nominated by the
                                    Company's incumbent Board, or individuals
                                    who are members of the Company's Board at
                                    any one time shall immediately thereafter
                                    cease to constitute a majority of the Board;

                           (iii)    the approval of the Company's stockholders
                                    of the merger or consolidation of the
                                    Company with another corporation, the sale
                                    of substantially all of the Company's assets
                                    or the liquidation or dissolution of the
                                    Company, unless, in the case of a merger or
                                    consolidation, at least two-thirds (2/3) of
                                    the directors in office immediately prior to
                                    such merger or consolidation constitute at
                                    least two-thirds (2/3) of the members of the
                                    board of directors of the surviving
                                    corporation of such merger and
                                    consolidation. Notwithstanding anything
                                    herein to the contrary, unless specifically
                                    provided in advance by the Board, a Change
                                    in Control shall not be deemed to have
                                    occurred as a result of any event that
                                    occurs on or after the date the Company
                                    files a voluntary petition to reorganize
                                    under Chapter 11 of the United States
                                    Bankruptcy Code or to liquidate under
                                    chapter 7 of such Code, or following the
                                    filing of an involuntary bankruptcy petition
                                    against the Company.

         1.4 "Code" shall mean the Internal Revenue Code of 1986, as amended.
<PAGE>   2
         1.5      "Committee" shall mean the Compensation Committee of the
Board, as appointed pursuant to Section 2.1 hereof.

         1.6      "Common Stock" shall mean the common stock of the Company, par
value $.10 per share.

         1.7      "Company" shall mean PubliCARD, Inc.

         1.8      "Disability" shall mean (a) the definition of "disability"
used in any employment agreement between a Participant and the Company or (b)
for any Optionee who has not entered into an employment agreement with the
Company, the inability, by reason of bodily injury or physical or mental
desease, or any combination thereof, of the Optionee to perform his customary
duties with the Company for a period of ninety (90) days (whether or not
consecutive) in any period of one hundred and eighty (180) consecutive days.

         1.9      "Employee" shall mean an officer or other employee of the
Company or any Subsidiary.

         1.10     "Fair Market Value" per share of Common Stock as of a
particular date shall mean, unless otherwise determined by the Board:

                           (i)      the closing sales price per hare of Common
                                    Stock on a national securities exchange for
                                    the business day preceding the exercise date
                                    on which there was a sale of Shares on such
                                    exchange;

                           (ii)     if clause (i) does not apply and the shares
                                    of Common Stock are then quoted on the
                                    National Association of Securities Dealers
                                    Automated Quotation system (known as
                                    "NASDAQ"), the closing price per share of
                                    Common Stock as reported on such system for
                                    the business day preceding the exercise date
                                    on which a sale was reported;

                           (iii)    if clause (i) or (ii) does not apply and the
                                    shares of Common Stock are then traded on an
                                    over-the-counter market, the closing price
                                    per share of Common Stock in such
                                    over-the-counter market for the business day
                                    preceding the exercise date; or

                           (iv)     if the shares of Common Stock are not then
                                    listed on a national securities exchange or
                                    traded in an over-the-counter market, such
                                    value as the Board in its discretion may
                                    determine.

         1.11 ""Good Reason" shall mean a significant change in the nature or
scope of the authorities, powers, functions, or duties normally attached to an
Employee's position with the Company.

         1.12     "Grantee" shall mean an Employee or Consultant who is granted
an SAR.

         1.13     "ISO" shall mean an Option which meets the requirement of
Section 422 of the Code.

         1.14     "NQSO" shall mean an Option that does not qualify as an ISO.

         1.15     "Option" shall mean either an ISO or a NQSO, as the context
requires and as reflected in the applicable Option Agreement.

         1.16     "Option Agreement" shall mean an agreement between the Company
and an Optionee setting forth the terms of any Option.

         1.17     "Optionee" shall mean the recipient of an Option.

                                        2
<PAGE>   3
         1.18     "Participant" shall mean any Employee or Consultant to whom a
Plan Award of any kind has been made.

         1.19     "Plan Award" shall mean an award of Options, restricted stock,
SARs or other equity-based award as the Committee determines.

         1.20     "SAR" shall mean a Stock Appreciation Right granted pursuant
to ArticleVI of the Plan.

         1.21     "Subsidiary" shall mean any corporation in an unbroken chain
of corporations beginning with the Company if each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50 percent
or more of the total combined voting power of all classes of stock in one of the
other corporations in such chain.

         1.22     "Termination of Employment" shall mean the date on which the
employment relationship between the Company or any Subsidiary and a Participant
terminates for any reason, including, without limitation, resignation, death,
disability or retirement, excluding, at the discretion of the Committee, a
termination of employment followed immediately by the commencement of a
consulting relationship between the Company or a Subsidiary and a former
employee.

                                   ARTICLE II
                               PLAN ADMINISTRATION

         2.1      COMMITTEE. The Plan shall be administered by the Committee
which shall consist of at least two members of the Board who shall be appointed
by and serve at the pleasure of the Board, provided that each committee member
must qualify as an "outside director" as such term is defined in Section 162(m)
of the Code, unless the Board determines otherwise, in its sole discretion. Any
vacancies in the Committee shall be filled by the Board. Committee members may
resign at any time by delivering thirty (30) days' advance written notice to the
Board, and may be removed by the Board at any time for any reason.

         2.2      DUTIES AND POWERS OF THE COMMITTEE. The Committee shall adopt
rules and regulations for carrying out the administration of the Plan as it
deems appropriate. The Committee shall have the power and the authority to
interpret and construe the Plan and the agreements pursuant to which Plan Awards
are made, and any interpretation and decision by the Committee with regard to
any question or matter arising under the Plan shall be final and binding on all
persons. Subject to the provisions hereof, the Committee from time to time shall
determine the terms and conditions of all Plan Awards, including, but not
limited to: (a) selecting the persons to whom Plan Awards are granted, (b)
determining whether the Plan Award to any individual should be Options, SARs,
Restricted Stock or any combination thereof, and the number of Options, SARs and
shares of Restricted Stock to be granted to any Employee or consultant, (c)
determining the time or times at which Plan Awards shall be granted, (d)
determining the duration of each Plan Award, (e) imposing any restrictions
applicable to Plan Awards, and (f) imposing any other terms and conditions it
deems appropriate for Plan Awards. The Committee also shall have the authority
and discretion to determine the extent to which Plan Awards will be structured
in order to comply with Section 162(m) of the Code.

         2.3      MAJORITY RULE. The Committee shall act by a majority of its
members in attendance at a meeting at which a quorum is present or by a
memorandum or other written instrument signed by all Committee members.

         2.4      COMPENSATION. Members of the Committee shall receive such
compensation for their services as may be determined by the Board, in its sole
discretion. All expenses and liabilities which any member of the Committee
incurs in connection with administering the Plan shall be borne by the Company.
The Committee may employ attorneys, consultants, accountants, appraisers,
brokers or other persons to assist them, and shall be entitled to rely on the
advice of such persons.

                                       3
<PAGE>   4
                                   ARTICLE III
                           SHARES SUBJECT TO THE PLAN

         3.1      SHARES OF STOCK SUBJECT TO THE PLAN. (a) Except as provided in
Section 10, the aggregate number of shares of Common Stock that may be issued or
transferred pursuant to Plan Awards shall not exceed 3,000,000 which may be
authorized and unissued shares or previously issued shares acquired by the
Company and held in treasury, or any combination thereof. Any shares subject to
a Plan Award which for any reason terminates, expires, or is forfeited may be
subject to a new Plan Award, to the extent consistent with applicable law. If an
Option or related SAR is exercised for stock, the shares covered by such Option
or SAR shall not thereafter be available for grant pursuant to the Plan.

                  (b) The maximum number of shares of common stock that may be
issued with respect to Options intended to be ISOs shall be 3,000,000. The
maximum number of Options that may be granted to any individual in any year
shall be 500,000.

                                   ARTICLE IV
                                      TERM

         4.1      TERM. All Plan Awards must be made within ten years from
August 4, 1999.

                                    ARTICLE V
                                  STOCK OPTIONS

         5.1      TERMS OF OPTIONS. At the time an Option is granted, the
Committee shall determine (a) the number of Options to be granted, (b) whether
the Options are to be ISOs or NQSOs, (c) the exercise price of each Option,
provided that the exercise price of any Option that is intended to be an ISO
shall be at least equal to the Fair Market Value of the Common Stock on the date
of grant; not less than 110% of Fair Market Value in the case of a grant to an
Employee who owns more than 10 percent of the total combined voting power of all
classes of stock of the Company or any Subsidiary (a "10% Stockholder"), and (d)
subject to Section 5.3 hereof, the period during which an Option shall vest, and
become exercisable; provided, however, that no Option shall be exercisable after
the tenth (10th) anniversary of the date on which it was granted (the fifth
(5th) anniversary in the case of an ISO granted to a 10% Stockholder).
Notwithstanding the foregoing or anything else herein to the contrary, the
Committee may, in its sole discretion and subject to whatever terms and
conditions it deems appropriate, accelerate the exercisability of an Option at
any time.

         5.2      MANNER OF EXERCISE. All or a portion of an exercisable Option
shall be deemed exercised upon the Optionee's delivery to the Secretary of the
Company of: (a) a written notice of exercise, delivered in person or by first
class mail to the Secretary of the Company at the Company's principal executive
office, in the form prescribed by the Committee and executed by the Optionee or
such person as is then authorized to exercise the Option, (b) payment in full of
the exercise price in cash, by check, or, if the Committee so permits, by
transferring previously owned shares of Common Stock (valued at Fair Market
Value on the exercise date) or any combination thereof, (c) such representations
and documents as the Committee, in its sole discretion, deems necessary or
advisable to effect compliance with all applicable provisions of the Securities
Act of 1933, as amended, and any other federal or state securities laws or
regulations. The Committee may, in its sole discretion, also take whatever
additional actions it deems appropriate to effect such compliance including,
without limitation, placing legends on share certificates and issuing
stop-transfer notices to agents and registrars, and (d) in the event that the
Option shall be exercised pursuant to Section 5.3 by any person or persons other
than the Optionee, appropriate proof of the right of such person or persons to
exercise the Option. Not less than one hundred (100) shares may be purchased at
any time upon the exercise of an Option unless the number of shares of Common
Stock so purchased constitutes the total number of shares then purchased under
the Option or the Committee determines otherwise in its sole discretion.

         5.3      EXERCISABILITY FOLLOWING TERMINATION OF EMPLOYMENT. Subject to
the Committee's discretion, following an Optionee's Termination of Employment,
his or her Options shall be exercisable as follows:

                                       4
<PAGE>   5
                  (a) Any Option which is not exercisable on the date of such
Termination of Employment shall not be exercisable thereafter.

                  (b) If an Optionee voluntarily resigns without Good Reason or
is terminated for Cause, all Options shall terminate as of the day before the
date of the Optionee's Termination of Employment, whether then exercisable or
not.

                  (c) If an Optionee's Termination of Employment is due to
death, Disability, or retirement on or after reaching age 60, any exercisable
Option held by the Employee shall remain exercisable for their original term,
provided that (i) any ISOs must be exercised within ninety (90) days following
Termination of Employment by reason of death or retirement and one (1) year
following Termination by reason of Disability; and (ii) any Option intended to
be an ISO that is not exercised within such period shall be treated as an NQSO
and shall remain exercisable for its original term.

                  (d) Upon an Optionee's Termination of Employment for any other
reason, any exercisable Options shall remain exercisable for a period of thirty
(30) days from the date of his Termination of Employment, but not later than the
original expiration date of the Option, and shall thereafter terminate.

                  (e) Upon a Change in Control of the Company, all Options held
by an Optionee that are not then exercisable shall become exercisable
immediately, and shall remain exercisable for their original term.

         5.4 EXERCISABILITY FOLLOWING TERMINATION OF CONSULTING ARRANGEMENT.
Upon the termination of a consulting arrangement for any reason, any Options
then held by a consultant that are not exercisable shall expire on such date and
any Options that are then exercisable shall remain exercisable for thirty (30)
days following such termination and may not thereafter be exercised, provided
that such termination was not due to the misfeasance or nonfeasance of the
consultant, in which case all Options shall be void and no longer exercisable as
of the date of termination of the arrangement.

         5.5 OPTION AGREEMENTS. Each Option shall be evidenced by a written
stock option agreement in such form, not inconsistent with the Plan, as the
Committee shall approve from time to time, in its sole discretion, which
agreements need not be identical, and shall be subject to such terms and
conditions as the Committee may prescribe, consistent with this Plan.

         5.6 RELOAD OPTIONS. The Committee shall have the authority (but not the
obligation) to include within any Option Agreement a provision entitling the
Optionee to a further Option (a "Reload Option") if the Optionee exercises the
Option evidenced by the Option Agreement, in whole or in part, by surrendering
other shares of Common Stock held by the Optionee in accordance with the terms
and conditions of the Option Agreement. Any such Reload Option shall not be an
ISO; shall be for a number of shares equal to the number of surrendered shares;
shall have an exercise price equal to the Fair Market Value of the Common Stock
on the date of exercise of the original Option; shall become exercisable if the
purchased shares are held for a period of time established by the Committee; and
shall be subject to such other terms and conditions as the Committee, in its
sole discretion, may determine.

         5.7 CONDITIONS TO ISSUANCE OF STOCK CERTIFICATE. The Company shall not
be required to issue or deliver any certificate or certificates for shares of
Common Stock purchased upon the exercise of any Option or portion thereof prior
to fulfillment of all of the following conditions:

                  (a) The admission of such shares to listing on all stock
exchanges on which such class of stock is then listed;

                  (b) The completion of any registration or other qualification
of such shares under any state or federal law, or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental
regulatory body which the Committee shall, in its sole and absolute discretion,
deem necessary or advisable;

                                       5
<PAGE>   6
                  (c) The obtaining of any approval or other clearance from any
state or federal governmental agency which the Committee shall, in its sole and
absolute discretion, determine to be necessary or advisable;

                  (d) The lapse of such reasonable period of time following the
exercise of the Option as the Committee may establish from time to time for
reasons of administrative convenience; and

                  (e) The receipt by the Company of full payment for such
shares, including payment of any applicable withholding tax.

         5.8 Rights as Stockholders. The holders of Options shall not be, nor
have any of the rights or privileges of, stockholders of the Company in respect
of any shares purchasable upon the exercise of any part of an Option unless and
until certificates representing such shares have been issued by the Company to
such holders.

                                   ARTICLE VI
                            STOCK APPRECIATION RIGHTS

         6.1 GRANT OF STOCK APPRECIATION RIGHTS. The Committee may grant a Stock
Appreciation Right (a) in connection and simultaneously with the grant of an
Option, (b) with respect to a previously granted Option, or (c) independent of
an Option. An SAR shall be subject to such terms and conditions not inconsistent
with this Plan as the Committee shall impose, and shall be evidenced by a
written Stock Appreciation Right Agreement, which shall be executed by the
Grantee and an authorized officer of the Company. The Committee, in its
discretion, may determine whether an SAR is to qualify as performance-based
compensation as described in Section 162(m) of the Code, and Stock Appreciation
Right Agreements evidencing SARs intended to so qualify shall contain such terms
and conditions as may be necessary to meet the applicable provisions of Section
162(m) of the Code. Without limiting the generality of the preceding sentence,
the Committee may, in its discretion and on such terms as it deems appropriate,
require as a condition to the grant of an SAR that the Employee or consultant
surrender for cancellation some or all of the unexercised Options, awards of
Restricted Stock, SARs, or other rights which have been previously granted to
him under this Plan or otherwise. An SAR, the grant of which is conditioned upon
such surrender, may have an exercise price lower (or higher) than the exercise
price of the surrendered Option or other award, may cover the same (or a lesser
or greater) number of shares as such surrendered Option or other award, may
contain such other terms as the Committee deems appropriate, and shall be
exercisable in accordance with its terms, without regard to the number of
shares, price, exercise period or any other term or condition of such
surrendered Option or other award.

         6.2      CHARACTERISTICS OF STOCK APPRECIATION RIGHTS.

                  (a) A SAR that is granted in connection with a particular
Option (i) may be granted for no more than the number of shares of Common Stock
subject to such Option, (ii) shall be exercisable only when and to the extent
the related Option is exercisable, and (iii) shall entitle the Grantee (or other
person entitled to exercise the Option) to surrender to the Company the
unexercised portion of any then exercisable Option to which such SAR relates and
to receive from the Company in exchange therefor an amount determined by
multiplying the difference obtained by subtracting the exercise price of the
Option from the Fair Market Value of a share of Common Stock on the date of
exercise of the SAR by the number of shares of Common Stock with respect to
which the SAR shall have been exercised, subject to any limitations the
Committee may impose.

                  (b) A SAR (i) which is independent of and not related to an
Option shall be exercisable in such installments as the Committee may determine;
shall cover such number of shares of Common Stock as the Committee may
determine; subject to Section 6.3, shall be exercisable only while the grantee
is an Employee or a Consultant, and (ii) such SAR shall entitle the Grantee (or
other person entitled to exercise the SAR) to exercise all or a specified
portion of the SAR and to receive from the Company an amount determined by
multiplying the difference obtained by subtracting the price per share at which
the SAR was granted from the Fair Market Value of a share of Common Stock on the
date of exercise of the SAR by the number of shares of Common Stock with respect
to which the SAR shall have been exercised, subject to any limitations the
Committee may impose.

                                       6
<PAGE>   7
         6.3      EXERCISE FOLLOWING TERMINATION OF EMPLOYMENT AND CONSULTANCY.
Subject to the Committee's discretion, (i) an Employee whose employment
terminates while he or she is holding exercisable SARs shall be entitled to
exercise such SARs for the same period as exercisable Options may be exercised
pursuant to Section 5.3(a)-(f) hereof (whether or not any such SARs were awarded
in connection with any Option), and (ii) any SARs held by a consultant, whether
or not exercisable, shall terminate on the date the consultancy arrangement
terminates, unless the Committee determines otherwise.

                                   ARTICLE VII
                                RESTRICTED STOCK

         7.1      AWARD OF RESTRICTED STOCK

                  (a) The Committee shall from time to time, in its sole and
absolute discretion, (i) determine the purchase price, if any, and form of
payment for Restricted Stock; provided, however, that the purchase price shall
be no less than the par value of the Common Stock at the time an award is made,
and (ii) determine any other terms and conditions applicable to such Restricted
Stock, consistent with this Plan.

                  (b) Upon the selection of an Employee or consultant to be
awarded Restricted Stock, the Committee shall instruct the Secretary of the
Company to issue such Restricted Stock and may impose such conditions on the
issuance of such Restricted Stock as it deems appropriate.

                  (c) Notwithstanding the foregoing or anything to the contrary
herein, each Restricted Stock Agreement shall provide that, upon a Change in
Control, any restrictions on Restricted Stock held by a Participant shall lapse
and be of no further force or effect, and the holder thereof shall be treated as
the owner of such Stock thereafter.

         7.2 RESTRICTIONS. All shares of Restricted Stock issued under this Plan
(including any shares received by holders thereof with respect to shares of
Restricted Stock as a result of stock dividends, stock splits or any other form
of recapitalization) shall, in the terms of each individual Restricted Stock
Agreement, be subject to such restrictions as the Committee shall provide, which
restrictions may include, without limitation, restrictions concerning voting
rights and transferability and restrictions based on duration of employment with
the Company, Company performance and individual performance; provided, however,
that the Committee may, on such terms and conditions as it may determine to be
appropriate, remove any or all of the restrictions imposed by the terms of the
Restricted Stock Agreement. Restricted Stock may not be sold or encumbered until
all restrictions terminate or expire.

         7.3 TERMINATION OF EMPLOYMENT. Except as otherwise expressly provided
for herein, any shares of Restricted Stock which are subject to restriction upon
an Employee's Termination of Employment with the Company for any reason or when
a consulting arrangement terminates, as applicable, shall be forfeited and the
Participant shall have no further rights to or with respect to such shares.

         7.4 REPURCHASE OF RESTRICTED STOCK. The Committee shall provide in the
terms of each individual Restricted Stock Agreement that upon a Termination of
Employment or, if applicable, upon a termination of any consulting relationship
between the restricted stockholder and the Company, the Company shall have the
right but not the obligation, to purchase any Restricted Stock held by such
employee or consultant at a cash price per share equal to the price paid by the
Employee or consultant for such Restricted Stock; provided, however, that
provision may be made that no such right of repurchase shall exist in the event
of a Termination of Employment or termination of consultancy without Cause, or
because of retirement, death, disability, or otherwise.

         7.5 RESTRICTED STOCK AGREEMENT. Restricted Stock shall be issued only
pursuant to a written Restricted Stock Agreement, which shall be executed by the
selected Employee or consultant and an authorized officer of the Company and
which shall contain such terms and conditions as the Committee shall determine,
consistent with this Plan.

         7.6 ESCROW. The Secretary of the Company or such other escrow holder as
the Committee may appoint shall retain physical custody of each certificate
representing Restricted Stock until all of the restrictions imposed under the
Restricted Stock Agreement with respect to the shares evidenced by such
certificate expire or shall have been

                                       7
<PAGE>   8
removed. While such shares are held by the escrow holder, the Participant shall
have, unless otherwise provided by the Committee, all the rights of a
stockholder with respect to said shares, subject to any restrictions among other
shareholders of Common Stock, including the right to receive all dividends and
other distributions paid or made with respect to the shares; provided, however,
that in the discretion of the Committee, any extraordinary distributions with
respect to the Common Stock shall be subject to the restrictions set forth in
Section 7.2.

         7.7 LEGEND. In order to enforce the restrictions imposed upon shares of
Restricted Stock hereunder, the Committee shall cause a legend or legends to be
placed on certificates representing all shares of Restricted Stock that are
still subject to restrictions under Restricted Stock Agreements, which legend or
legends shall make appropriate reference to the conditions imposed thereby.

                                  ARTICLE VIII
                   ADJUSTMENTS UPON CHANGES IN CAPITALIZATION

         8.1 CAPITAL ADJUSTMENTS. (a) If dividends payable in Common Stock
during any fiscal year of the Company exceed in the aggregate 5% of the Common
Stock issued and outstanding at the beginning of such fiscal year, or if there
is during any fiscal year of the Company one or more splits, subdivisions, or
combinations of shares of Common Stock resulting in an increase or decrease of
more than 5% of the shares outstanding at the beginning of the year, the number
of shares available under the Plan shall be increased or decreased
proportionately, as the case may be, the number of shares subject to SARs and
the related Fair Market Value thereof as of the date of grant shall be increased
or decreased proportionately, as the case may be, and the number of shares
deliverable upon the exercise thereafter of any Options theretofore granted
shall be increased or decreased proportionately, as the case may be, without
change in the aggregate purchase price. Common Stock dividends, splits,
subdivisions, or combinations during any fiscal year which do not exceed in the
aggregate 5% of the Common Stock issued and outstanding at the beginning of such
year shall be ignored for purposes of the Plan. All adjustments shall be made as
of the day such action necessitating such adjustment becomes effective.

                  (b) MERGER OR CONSOLIDATION. If the Company is merged or
consolidated with or into another corporation, or if the Common Stock or
substantially all of the Company's assets are exchanged for the stock of another
corporation, or in case of a reorganization or liquidation of the Company, the
Board, or the board of directors of any corporation assuming the obligations of
the Company hereunder, shall either (i) make appropriate provisions for the
protection of any Plan Awards by the substitution on an equitable basis of
appropriate stock or other property of the Company, or appropriate stock or
other property of the merged, consolidated, or otherwise reorganized
corporation, provided only that such substitution of options or other property
shall comply with the requirements of Section 424 of the Code for ISOs, or (ii)
terminate all restrictions relating to Restricted Stock awards and give written
notice to Optionees that their Options and any SARs or other Plan Award, will
become immediately exercisable, notwithstanding any waiting period or other
restriction otherwise prescribed by the Committee, and must be exercised within
a stated period of the date of such notice or they will be terminated.

                                   ARTICLE IX
                      TERMINATION AND AMENDMENT OF THE PLAN

         9.1 (a) The Committee shall have the right to amend or suspend the
Plan, in whole or in part, or to terminate the Plan at any time; provided,
however, that no such action shall effect or in any way impair the rights of a
recipient under any Plan Award theretofore granted; and, provided further, that,
except as provided in Article VIII, unless first duly approved by the
stockholders of the Company entitled to vote thereon at a meeting (which may be
the annual meeting) duly called and held for such purpose, or by a consent of
stockholders, no amendment or change shall be made in the Plan that: (a)
increases the total number of shares which may be issued or transferred under
the Plan; (b) changes the purchase price hereinbefore specified for the shares
subject to options; (c) extends the period during which Plan Awards may be
granted or exercised; or (d) changes the designation of persons eligible to
receive Plan Awards.

                  (b) TERMINATION DATE The Plan shall, in all events, terminate
on August 3, 2009, or on such earlier date as the Board of Directors may
determine. Any Option or SAR outstanding at the termination date shall

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remain outstanding until it has either expired or has been exercised. Any
Restricted Stock outstanding at the termination date shall remain subject to the
terms of the Plan until the restrictions thereon shall have lapsed.

                                    ARTICLE X
                            MISCELLANEOUS PROVISIONS

         10.1 EFFECTIVE DATE. The Plan shall become effective August 4, 1999,
the date of its adoption by the Board of Directors, subject, however, to
approval by the stockholders of the Company within twelve (12) months next
following such Effective Date; and if such approval is not obtained, the Plan
and any and all Plan Awards granted during such interim period shall terminate
and be of no further force or effect.

         10.2 RIGHTS AS AN EMPLOYEE. Nothing in the Plan, the grant or holding
of a Plan Award, or in any agreement entered into pursuant to the Plan shall
confer to any holder of Plan Award any right to continue in the employ of the
Company or Subsidiary or to continue a consulting arrangement with the Company
or any Subsidiary, or interfere in any way with the right of the Company or any
parent or Subsidiary of the Company to terminate a Participant's employment or a
consulting arrangement at any time.

         10.3 WITHHOLDING. It shall be a condition to the performance of the
Company's obligation with respect to any Plan Award that a Participant pay, or
make provision satisfactory to the Company for the payment of, any taxes which
the Company is obligated to collect with respect to the issuance, vesting or
exercise of any Plan Award, including any Federal, state, or local withholding
taxes.

         10.4 OWNERSHIP AND TRANSFER RESTRICTIONS. The Committee, in its sole
and absolute discretion, may impose such restrictions on the ownership and
transferability of the shares purchasable upon the exercise of an Option as it
deems appropriate, any such restriction shall be set forth in the Stock Option
Agreement and may be referred to on the certificates evidencing such shares. The
Committee may require the Employee to give the Company prompt notice of any
disposition of shares of Common Stock acquired by exercise of an ISO within (a)
two years from the date of granting such ISO to such Employee, or (b) one year
after the transfer of such shares to such Employee. The Committee may direct
that the certificates evidencing shares acquired by exercise of an Option refer
to such requirement to give prompt notice of disposition. Notwithstanding the
foregoing, with the consent of the Committee and subject to such requirements as
it shall determine, a Participant may transfer an Option for no consideration to
or for the benefit of his spouse, parents, children (including step- and
adoptive children) and grandchildren, or to a trust for the benefit of such
individuals, or to a partnership or limited liability company for one or more
such individuals.

         10.5 RIGHTS AS A STOCKHOLDER. Subject to Section 7.5, a recipient of a
Plan Award (other than a restricted stock award) shall have no rights as a
stockholder with respect to any shares issuable or transferable upon exercise
thereof until the date a stock certificate is issued to him for such shares,
and, except as otherwise expressly provided in the Plan, no adjustment shall be
made for dividends or other rights for which the record date is prior to the
date such stock certificate is issued.

         10.6 NON-ASSIGNABILITY OF PLAN AWARDS. Except as set forth in Section
10.4, no Plan Award shall be sold, pledged, assigned or transferred by the
recipient, except by will or by the laws of descent and distribution or pursuant
to a "qualified domestic relations order," as such term is defined in the Code
or Title I of the Employee Retirement Income Security Act of 1974, as amended.
During the lifetime of a recipient, Plan Awards shall be exercisable only by him
or his personal representative or guardian, except that an Option transferred
pursuant to a "qualified domestic relations order" may be exercised by the
transferee. No Plan Award or interest therein may be sold, pledged, attached, or
otherwise encumbered other than in favor of the Company, and no Plan Award shall
be liable for the debts, contracts or engagements of the holder of a Plan Award
or his or her successors in interest or shall be subject to disposition by
transfer, alienation, anticipation, encumbrance, assignment or any other means
whether such disposition may be voluntary or involuntary or by operation of law
or judgment, levy, attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy) and any attempt to do so shall be null and
void and of no force or effect.

         10.7 LEAVE OF ABSENCE. In the case of a holder of a Plan Award on an
approved leave of absence, the Committee may, if it determines that to do so
would be in the best interests of the Company, provide for continuation

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of Plan Awards during such leave of absence, such continuation to be on such
terms and conditions as the Committee determines to be appropriate.

         10.8 OTHER RESTRICTIONS. Each Plan Award shall be subject to the
requirement that, if at any time the Board of Directors or the Committee shall
determine, in its discretion, that the listing, registration, or qualification
of the shares issuable or transferable upon exercise thereof upon any securities
exchange or under any state or Federal law, or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the granting of such Plan Award or the issue, transfer, or
purchase of shares thereunder, such Plan Award may not be exercised in whole or
in part unless such listing, registration, qualification, consent, or approval
shall have been effected or obtained free of any conditions not acceptable to
the Board of Directors. The Company shall not be obligated to sell or issue any
shares of Common Stock in any manner in contravention of the Securities Act of
1933, as amended, or any state securities law.

         10.9 GOVERNING LAW. This Plan and any agreements hereunder shall be
interpreted and enforced under the internal laws of the State of New York
without regard to conflicts of law thereof.

         10.10 NO WAIVER. No modification or waiver of any of the provisions of
this Plan shall be effective unless in writing and signed by the party against
whom it is sought to be enforced.

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