SMARTDISK CORP
EMPLOYMENT AGREEMENT-PETER J. QUINN
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<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>dex102.htm
<DESCRIPTION>EMPLOYMENT AGREEMENT-PETER J. QUINN
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<TITLE>Prepared by R.R. Donnelley Financial -- Employment Agreement-Peter J. Quinn</TITLE>
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 <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="right"><FONT FACE="Times New Roman" SIZE="2"><B>Exhibit 10.2 </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>EMPLOYMENT AGREEMENT </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">This Employment Agreement (&#147;Agreement&#148;) is made and
entered into as of April 22, 2002 by and between SmartDisk Corporation, a Delaware corporation (the &#147;Company&#148;), and Peter J. Quinn (the &#147;Executive&#148;). </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>Recitals </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;The Company desires to ensure the Executive&#146;s
continued employment with the Company and to compensate him therefor. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">B.&nbsp;&nbsp;&nbsp;&nbsp;The Board has determined that
this Agreement will reinforce and encourage the Executive&#146;s attention and dedication to the Company. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:27px"><FONT FACE="Times New Roman"
SIZE="2">C.&nbsp;&nbsp;&nbsp;&nbsp;The Executive is willing to make his services available to the Company on the terms and conditions hereinafter set forth. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>Agreement </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, the parties agree as follows: </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">1.<I>&nbsp;&nbsp;&nbsp;&nbsp;Employment</I>. </FONT></DIV> <DIV><FONT
SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">1.1<I>&nbsp;&nbsp;&nbsp;&nbsp;General</I>.&nbsp;&nbsp;&nbsp;&nbsp;The Company hereby agrees to employ the Executive, and the Executive
hereby agrees to serve the Company on the terms and conditions set forth herein. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman"
SIZE="2">1.2<I>&nbsp;&nbsp;&nbsp;&nbsp;Duties of Executive</I>.&nbsp;&nbsp;&nbsp;&nbsp;During the term of this Agreement, the Executive shall serve as a senior executive of the Company, shall diligently perform all services as may be assigned to him
by or under the direction of the Chief Executive Officer of the Company and shall exercise such power and authority as may from time to time be delegated to him by the Company&#146;s Board of Directors. The Executive shall devote substantially all
of his business time and attention to the business and affairs of the Company, render such services to the best of his ability, and use his best efforts to promote the interests of the Company. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
<DIV STYLE="text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">2.<I>&nbsp;&nbsp;&nbsp;&nbsp;Term</I>. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman"
SIZE="2">2.1<I>&nbsp;&nbsp;&nbsp;&nbsp;Initial Term</I>.&nbsp;&nbsp;&nbsp;&nbsp;The initial term of this Agreement, and the employment of the Executive hereunder, shall be for the three-year period commencing on the date hereof (the &#147;Initial
Term&#148;). </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">2.2<I>&nbsp;&nbsp;&nbsp;&nbsp;Renewal Terms</I>.&nbsp;&nbsp;&nbsp;&nbsp;The Initial Term of this
Agreement, and the employment of the Executive hereunder shall automatically be renewed for successive one year periods, unless the Company or the Executive provides written notice to the other at least 30 days prior to the expiration of the
applicable term. The terms and conditions of any renewal term shall be the same as those contained herein unless otherwise mutually agreed upon by the Company and the Executive in a written supplement to this Agreement signed by the Executive and
the Company&#146;s President (the &#147;Written Supplement&#148;). In the event that the Company delivers a notice of non-renewal, the Executive shall be entitled to the compensation and benefits as if terminated pursuant to Section 5.4 and shall be
subject to Section 6.1 as if terminated pursuant to Section&nbsp;5.4. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">3.<I>&nbsp;&nbsp;&nbsp;&nbsp;Compensation</I>.
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 <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">3.1<I>&nbsp;&nbsp;&nbsp;&nbsp;Base Salary</I>.&nbsp;&nbsp;&nbsp;&nbsp;The
Executive shall receive a base salary at the annual rate of <I>$210,000</I> (the &#147;Base Salary&#148;) during the Initial Term of this Agreement, with such Base Salary payable in installments consistent with the Company&#146;s normal payroll
schedule, subject to applicable withholding and other taxes. The Base Salary may, by action and in the sole discretion of the CEO or the Board, be increased at any time or from time to time. On January 1 of each year of this Agreement, the CEO or
the Board shall consider the performance of the Executive for a possible merit increase in Base Salary which in no event shall be less than three percent of such Base Salary; provided that any such increase shall be in the sole discretion of the CEO
or the Board. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">3.2<I>&nbsp;&nbsp;&nbsp;&nbsp;Bonus Compensation</I>.&nbsp;&nbsp;&nbsp;&nbsp;In addition to the
Base Salary, the Executive shall be entitled to receive bonus compensation (the &#147;Bonus Compensation&#148;) during the Initial Term. The CEO or the Board shall establish a performance bonus formula with respect to Bonus Compensation pursuant to
which the Executive will be able to receive a target bonus of <I>$100,000</I> per annum if the Company achieves the specified level of financial results. This target bonus amount may be increased during the initial term. </FONT></DIV> <DIV><FONT
SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">3.3<I>&nbsp;&nbsp;&nbsp;&nbsp;Signing Bonus.&nbsp;&nbsp;&nbsp;&nbsp;</I>The Executive shall be entitled to receive a signing bonus of
$25,000, less all applicable withholdings and deductions, on the first payroll period following the date the Executive joins SmartDisk. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT
FACE="Times New Roman" SIZE="2">3.4<I>&nbsp;&nbsp;&nbsp;&nbsp;Stock Options</I>.&nbsp;&nbsp;&nbsp;&nbsp;Contemporaneously herewith, SmartDisk is granting the Executive a non-qualified stock option to purchase 150,000 shares of SmartDisk&#146;s
common stock, the exercise price of which shall be established in accordance with the SmartDisk option pricing policy in effect on the date hereof. The option will be granted pursuant to the Company&#146;s 1999 Incentive Compensation Policy (the
&#147;Incentive Plan&#148;) and will be in customary form; provided that the option will vest (i.e., become exercisable) with respect to twenty-five percent (25%) of the shares issuable upon exercise of such option on the first anniversary date of
this Agreement and thereafter vest as to six and one-quarter (6.25%) of the subject shares on each subsequent quarter. For example, such option will be exercisable with respect to 37.5% of the subject shares on the 18-month anniversary of this
Agreement. In the event of a &#147;Change of Control&#148; (as defined in the Incentive Plan), fifty percent of the unvested shares underlying the option shall vest on the effective date of a Change of Control. </FONT></DIV> <DIV><FONT
SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">3.5<I>&nbsp;&nbsp;&nbsp;&nbsp;Stock.&nbsp;&nbsp;&nbsp;&nbsp;</I>The Executive shall receive 15,625 shares of SmartDisk stock as a
signing bonus. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">4.<I>&nbsp;&nbsp;&nbsp;&nbsp;Expense Reimbursement and Other Benefits</I>. </FONT></DIV> <DIV><FONT
SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">4.1<I>&nbsp;&nbsp;&nbsp;&nbsp;Reimbursable Expenses</I>.&nbsp;&nbsp;&nbsp;&nbsp;During the term of the Executive&#146;s employment
hereunder, the Company, upon the submission of proper substantiation by the Executive, shall reimburse the Executive for all reasonable expenses actually and necessarily paid or incurred by the Executive in the course of and pursuant to the business
of the Company. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">4.2<I>&nbsp;&nbsp;&nbsp;&nbsp;Other Benefits</I>.&nbsp;&nbsp;&nbsp;&nbsp;The Executive shall
be entitled to participate in all medical, dental and hospitalization, group life insurance, and any and all other plans as are presently and hereinafter provided by the Company to its executives. The Executive shall be entitled to vacations in
accordance with the Company&#146;s prevailing policy for its executives. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman"
SIZE="2">4.3<I>&nbsp;&nbsp;&nbsp;&nbsp;Working Facilities</I>.&nbsp;&nbsp;&nbsp;&nbsp;The Company shall furnish the Executive with an office, secretarial help and such other facilities and services suitable to his position and adequate for the
performance of his duties hereunder. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">4.4<I>&nbsp;&nbsp;&nbsp;&nbsp;Relocations and Other
Assistance</I>.&nbsp;&nbsp;&nbsp;&nbsp;The Executive shall be reimbursed by Company for expenses incurred with relocation from Atlanta, Georgia to Naples, Florida in accordance with existing relocation reimbursement policy, as revised by the offer
letter, dated March 19, 2002. The </FONT></DIV>

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 <DIV STYLE="margin-left:27px"><FONT FACE="Times New Roman" SIZE="2"><I></I>Executive agrees to reimburse the Company for all relocation expenses if he voluntarily resigns within one (1) year of
employment. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">4.5<I>&nbsp;&nbsp;&nbsp;&nbsp;Use of Company Car</I>.&nbsp;&nbsp;&nbsp;&nbsp;The Executive will
also have the use of a company car through the end of 2002. The Company will be responsible for the insurance and routine maintenance of the vehicle. The Executive will be responsible for normal operating expenses (i.e., fuel, oil, etc.) as well as
any personal income tax liability arising from the Executive&#146;s use of the automobile. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:27px"><FONT FACE="Times New Roman"
SIZE="2">5.<I>&nbsp;&nbsp;&nbsp;&nbsp;Termination</I>. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">5.1<I>&nbsp;&nbsp;&nbsp;&nbsp;Termination for
Cause</I>.&nbsp;&nbsp;&nbsp;&nbsp;The Company shall at all times have the right, upon written notice to the Executive, to terminate the Executive&#146;s employment hereunder for &#147;Cause&#148; (as hereinafter defined). For purposes of this
Agreement, the term &#147;Cause&#148; shall mean (i) the failure or refusal of the Executive to perform the duties or render the services reasonably assigned to him from time to time by or under direction of the Chief Executive Officer of the
Company (except during reasonable vacation periods or sick leave), which failure or refusal is not cured within 15 days of written notice by the Company; (ii) gross negligence or willful misconduct by the Executive in the performance of his duties
as an employee of the Company, (iii) the conviction of the Executive of a felony; (iv) the material breach by the Executive of any of the provisions of Section 6.1, 6.2, 6.3 or 6.4 hereof; (v) the breach by the Executive of his fiduciary duty or
duty of trust to the Company, including the commission by the Executive of an act of fraud or embezzlement against the Company, (vi) substance abuse, or (vii) any other material breach by the Executive of any of the material terms or provisions of
this Agreement or any other agreement between the Company and the Executive related to the Executive&#146;s employment, which other material breach is not cured within ten (10) business days of written notice by the Company. Upon any termination
pursuant to this Section 5.1, the Executive shall be entitled to receive any salary (other than Bonus Compensation) and employment benefits which shall have accrued prior to the date of termination, but shall not be entitled to any bonus or
severance payments, salary or employment benefits relating to periods subsequent to the date of termination, subject to Executive&#146;s rights to continue medical and dental coverage under the Company&#146;s group policy, at Executive&#146;s
expense, as may be provided by law. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">5.2<I>&nbsp;&nbsp;&nbsp;&nbsp;Disability</I>.&nbsp;&nbsp;&nbsp;&nbsp;The
Company shall at all times have the right, upon written notice to the Executive, to terminate the Executive&#146;s employment hereunder, if the Executive shall, as the result of mental or physical incapacity, illness or disability, become unable to
perform his duties hereunder for in excess of ninety (90) days in any 12-month period. Upon any termination pursuant to this Section 5.2, the Company shall pay to the Executive (i) the balance of Executive&#146;s salary and other benefits for the
remainder of the month in which disability occurs, and (ii) a pro rata portion of any Bonus Compensation to which Executive would be otherwise entitled under Section 3.2 based upon the ratio the number of months employed (calculated through the end
of the then current month) bears to the bonus period of twelve (12) months and the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination, subject,
however to the provisions of Section 4.1). </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">5.3<I>&nbsp;&nbsp;&nbsp;&nbsp;Death</I>.&nbsp;&nbsp;&nbsp;&nbsp;In
the event of the death of the Executive during the term of his employment hereunder, the Company shall pay to the estate of the deceased Executive (i) the balance of Executive&#146;s salary and other benefits for the remainder of the month in which
death occurs, and (ii) a pro rata portion of any Bonus Compensation to which Executive would be otherwise entitled under Section 3.2 based upon the ratio the number of months employed (calculated through the end of the then current month) bears to
the bonus period of twelve (12) months and the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of the Executive&#146;s death, subject, however to the
provisions of Section 4.1). </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">5.4&nbsp;&nbsp;&nbsp;&nbsp;<I>Termination by the Company Without
Cause</I>.&nbsp;&nbsp;&nbsp;&nbsp;At any time, the Company shall have the right to terminate this Agreement and Executive&#146;s employment with the Company by providing at least 30 days prior written notice to the Executive; provided, however,
that, the Company shall (i) pay to the Executive any unpaid Base Salary accrued through the effective date of termination specified in such notice, (ii) pay Executive&#146;s Base Salary in the manner set forth in Section 3.1 hereof until the date
which is </FONT></DIV>

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 <DIV STYLE="margin-left:27px"><FONT FACE="Times New Roman" SIZE="2">three months following such effective date (the &#147;Severance Date&#148;) and (iii) pay a pro rata portion of any Bonus Compensation
to which the Executive would be otherwise entitled under Section 3.2 based upon the ratio the number of months employed bears to the bonus period of twelve (12) months. Following the effective date of such termination, the Company shall continue to
pay for or provide to the Executive such benefits as may have been provided to the Executive in accordance with Section 4.2 immediately prior to such termination (subject to changes in the terms of such coverage by the provider as may be applicable
to the Company as a whole) for a period ending on the earliest of (A) the date of the Executive&#146;s employment by a third party on a substantially full-time basis, (B) the death of the Executive and (C) the Severance Date. Except as expressly
provided herein, the Company shall have no further liability hereunder (other than for reimbursement for reasonable business expenses incurred prior to the date of termination, subject, however to the provisions of Section 4.1). </FONT></DIV>
<DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">5.5<I>&nbsp;&nbsp;&nbsp;&nbsp;Termination by Employee</I>.&nbsp;&nbsp;&nbsp;&nbsp;At any time, the Executive may terminate
this Agreement and Executive&#146;s employment with the Company by providing at least 30 days prior written notice to the Company. Upon termination of this Agreement pursuant to this Section 5.5, the Executive shall be entitled to receive any salary
(other than Bonus Compensation) and employment benefits which shall have accrued prior to the date of termination, but shall not be entitled to any bonus or severance payments, salary or employment benefits relating to periods subsequent to the date
of termination, subject to Executive&#146;s rights to continue medical and dental coverage under the Company&#146;s group policy at Executive&#146;s expense, as may be provided by law. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV
STYLE="text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">6.<I>&nbsp;&nbsp;&nbsp;&nbsp;Restrictive Covenants</I>. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman"
SIZE="2">6.1<I>&nbsp;&nbsp;&nbsp;&nbsp;Non-competition</I>.&nbsp;&nbsp;&nbsp;&nbsp;While employed by the Company and for a period of one year following the later of the date his employment is terminated hereunder or, if applicable, the Severance
Date (the &#147;Restricted Period&#148;), the Executive shall not, directly or indirectly (whether as owner, principal, agent, shareholder, employee, partner, lender, venturer with or consultant to any person, firm, partnership, corporation, limited
liability company or other entity), whether or not compensation is received, engage or participate in any activity for any business or entity which is or plans to engage in the marketing and sale of any products or services which are under active
development or are marketed or sold by the Company and/or their respective subsidiaries and affiliates during the term of this Agreement anywhere in the United States; provided, however, that nothing herein shall be deemed to prevent the Executive
from acquiring through market purchases and owning, solely as an investment, less than three percent in the aggregate of the equity securities of any class of any issuer whose shares are registered under &#167;12(b) or 12(g) of the Securities
Exchange Act of 1934, as amended, and are listed or admitted for trading on any United States national securities exchange or are quoted on the National Association of Securities Dealers Automated Quotations System, or any similar system of
automated dissemination of quotations of securities prices in common use, so long as the Executive is neither involved in the management or conduct of the business affairs of such issuer nor a member of any &#147;control group&#148; (within the
meaning of the rules and regulations of the United States Securities and Exchange Commission) of any such issuer. Notwithstanding the foregoing, in the event that the Executive&#146;s employment hereunder is terminated pursuant to Section 5.4 or
Section 5.5, the Restricted Period shall terminate on the later of (a) one year after the date Executive&#146;s employment is terminated or (b) two years from the date of execution of this Agreement. The Executive acknowledges and agrees that the
covenants provided for in this Section 6.1 are reasonable and necessary in terms of time, area and line of business to protect the Company&#146;s &#147;Trade Secrets&#148; (as hereinafter defined). The Executive further acknowledges and agrees that
such covenants are reasonable and necessary in terms of time, area and line of business to protect the Company&#146;s legitimate business interests, which include their interests in protecting the Company&#146;s (i) valuable confidential business
information, (ii) substantial relationships with customers throughout the United States, and (iii) customer goodwill associated with the ongoing business of the Company. The Executive expressly authorizes the enforcement of the covenants provided
for in this Section 6.1 by (A) the Company and its subsidiaries, (B) the Company&#146;s permitted assigns, and (C) any successors to the Company&#146;s business. To the extent that the covenant provided for in this Section 6.1 may later be deemed by
a court to be too broad to be enforced with respect to its duration or with respect to any particular activity or geographic area, the court making such determination shall have the power to reduce </FONT></DIV>

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 <DIV STYLE="margin-left:27px"><FONT FACE="Times New Roman" SIZE="2"><I></I>the duration or scope of the provision, and to add or delete specific words or phrases to or from the provision. The provision
as modified shall then be enforced. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman"
SIZE="2">6.2<I>&nbsp;&nbsp;&nbsp;&nbsp;Nondisclosure</I>.&nbsp;&nbsp;&nbsp;&nbsp;Executive shall not divulge, communicate, use to the detriment of the Company or for the benefit of any other person or persons, or misuse in any way, any
&#147;Confidential Information&#148; pertaining to the Company. Any confidential information or data now known or hereafter acquired by the Executive with respect to the Company shall be deemed a valuable, special and unique asset of the Company
that is received by the Executive in confidence and as a fiduciary, and Executive shall remain a fiduciary to the Company with respect to all of such information. For purposes of this Agreement, the following terms when used in this Agreement have
the meanings set forth below: </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2"><I>&#147;Confidential Information</I>&#148; means confidential data and
confidential information relating to the business of the Company (which does not rise to the status of a Trade Secret under applicable law) which is or has been disclosed to the Executive or of which the Executive became aware as a consequence of or
through his employment with the Company and which has value to the Company and is not generally known to the competitors of the Company. Confidential Information does not include (a) information that is or becomes generally available to the public
other than as a result of the Executive&#146;s disclosure of such information, (b) information that was within the Executive&#146;s possession prior to it being furnished to the Executive by or on behalf or its affiliates, including the Company,
provided that the source of such information was not known to the Executive to be bound by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the Company or its affiliates, or any other party
with respect to such information, (c) information that becomes available to the Executive on a non-confidential basis from a source other than the Company or any of its affiliates, provided that such source is not known to the Executive to be bound
by a confidentiality agreement with or other contractual, legal or fiduciary obligation of confidentiality to the Company or its affiliates, or any other party with respect to such information, (d) information the disclosure of which is required by
applicable law or judicial process, or (e) general technical skills or general experience gained by the Executive during the Executive&#146;s employment with the Company. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV
STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2"><I>&#147;Trade Secrets</I>&#148; means information of the Company including, but not limited to, technical or nontechnical data, formulas, patterns, compilations,
programs, financial data, financial plans, product or service plans or lists of actual or potential customers or suppliers which (i) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable
by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
<DIV STYLE="text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">In addition, during the Initial Term and during the periods described in the last sentence of this Section 6.2, the Executive (a) will receive and hold all Confidential Information
and Trade Secrets (collectively &#147;Company Information&#148;) in trust and in strictest confidence, (b) will take reasonable steps to protect the Company Information from disclosure and will in no event take any action causing, or fail to take
any action reasonably necessary to prevent, any Company Information to lose its character as Company Information, and (c) except as required by the Executive&#146;s duties in the course of his employment by the Company, will not, directly or
indirectly, use, disseminate or otherwise disclose any Company Information to any third party without the prior written consent of the Company, which may be withheld in the Company&#146;s absolute discretion. The provisions of this Section 6.2 shall
survive the termination of the Executive&#146;s employment (i) for a period of five years with respect to Confidential Information, and (ii) with respect to Trade Secrets, for so long as any such information qualifies as a Trade Secret under
applicable law. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">6.3<I>&nbsp;&nbsp;&nbsp;&nbsp;Nonsolicitation of Employees and
Customers</I>.&nbsp;&nbsp;&nbsp;&nbsp;While employed by the Company and for a period of two years following the later of the date his employment is terminated hereunder by either the Company or the Executive, or, if applicable, the Severance Date,
the Executive shall not, directly or indirectly, for himself or for any other person, firm, corporation, partnership, association or other entity, (i) attempt to employ or enter into any contractual arrangement with any employee or former employee
of the Company, unless such employee or former employee has not been employed by the Company for a period in excess of three months, and/or (ii) divert or take away, or attempt to divert or </FONT></DIV>

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<I></I>take away, the business or prospects of any of the actual or targeted prospective customers or clients of the Company, nor shall the Executive make known the names and addresses of such
customers or any information relating in any manner to the Company&#146;s trade or business relationships with such customers. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT
FACE="Times New Roman" SIZE="2">6.4<I>&nbsp;&nbsp;&nbsp;&nbsp;Assignment Of Inventions</I>. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman"
SIZE="2">(a)<I>&nbsp;&nbsp;&nbsp;&nbsp;Original Development</I>.&nbsp;&nbsp;&nbsp;&nbsp;The Executive represents and warrants to the Company that all work that the Executive performs for or on behalf of the Company and its clients, and all work
product that the Executive produces in such capacity, including but not limited to software, documentation, memoranda, ideas, designs, inventions, processes, algorithms, etc. (&#147;Work Product&#148;), will not knowingly infringe upon or violate
any patent, copyright, trade secret, or other property right of any of his former employers or of any other third party. The Executive will not disclose to the Company, or use in any of his Work Product, any confidential or proprietary information
belonging to others, unless both the owner thereof and the Company have consented in writing. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman"
SIZE="2">(b)<I>&nbsp;&nbsp;&nbsp;&nbsp;Disclosure</I>.&nbsp;&nbsp;&nbsp;&nbsp;The Executive will promptly disclose to the Company all Work Product developed by him within the scope of his employment with the Company or which relates directly to, or
involve the use of, any Company Information, including but not limited to all software, concepts, ideas and designs, and all documentation, manuals, letters, pamphlets, drafts, memoranda and other writings or tangible things of any kind. The
Executive will not disclose them to anyone other than authorized Company personnel. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman"
SIZE="2">(c)<I>&nbsp;&nbsp;&nbsp;&nbsp;Copyright Ownership</I>.&nbsp;&nbsp;&nbsp;&nbsp;The Executive acknowledges and agrees that all Work Product which is made by him (solely or jointly with others) within the scope of his employment and which is
protectable by copyright is being created at the instance of the Company and is &#147;work made for hire,&#148; as that term is defined in the United States Copyright Act (17 USCA, Section 101). </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
<DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">(d)<I>&nbsp;&nbsp;&nbsp;&nbsp;Assignment</I>.&nbsp;&nbsp;&nbsp;&nbsp;The Executive hereby assigns to the Company all of his other rights, title and interest
(including but not limited to all patent, copyright and trade secret rights) in and to all Work Products prepared by him, whether patentable or not, made or conceived in whole or in part by him within the scope of his employment hereunder, or that
relates directly to, or involves the use of Company Information. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman"
SIZE="2">(e)<I>&nbsp;&nbsp;&nbsp;&nbsp;Documents</I>.&nbsp;&nbsp;&nbsp;&nbsp;The Executive agrees to execute all documents reasonably requested by the Company to further evidence the foregoing assignment and to provide all reasonable assistance to
the Company (at the Company&#146;s expense) in perfecting or protecting any or all of the Company&#146;s rights in his Work Product. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT
FACE="Times New Roman" SIZE="2">(f)<I>&nbsp;&nbsp;&nbsp;&nbsp;Pre-existing Inventions Not Assigned</I>.&nbsp;&nbsp;&nbsp;&nbsp;The Executive represents that the Executive has indicated on Annex III to this Agreement all inventions, expression of
ideas or other Work Product related to the Company&#146;s business and created prior to his employment by the Company in which the Executive has any right, title or interest that the Executive does not assign to the Company. If the Executive does
not have any such inventions, expressions of ideas, or work product to indicate, the Executive will write &#147;none&#148; on Annex III. The Executive will not assert any rights under any inventions as having been made or acquired by him prior to
his being employed by the Company, unless such inventions are identified on Annex I. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman"
SIZE="2">6.5<I>&nbsp;&nbsp;&nbsp;&nbsp;Books and Records</I>.&nbsp;&nbsp;&nbsp;&nbsp;All books, records, reports, writings, notes, notebooks, computer programs, sketches, drawings, blueprints, prototypes, formulas, photographs, negatives, models,
equipment, chemicals, reproductions, proposals, flow sheets, supply contracts, customer lists and other documents and/or things belonging to the Company or embodying or relating to any Confidential Information or Trade Secrets, whether prepared by
the Executive or otherwise coming into the Executive&#146;s possession shall not be copied, duplicated, replicated, transformed, modified or removed from the premises of the Company except pursuant to the business of the Company and shall be
returned </FONT></DIV>

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<I></I>immediately to the Company on termination of the Executive&#146;s employment hereunder or on the Company&#146;s request at any time. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV>
<DIV STYLE="margin-left:27px; text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">6.6<I>&nbsp;&nbsp;&nbsp;&nbsp;No Conflict</I>.&nbsp;&nbsp;&nbsp;&nbsp;The Executive represents to the Company that his execution and performance of this Agreement
does not violate the provisions of any employment, non-competition, confidentiality or other material agreement to which he is a party or by which he is bound. The Executive also agrees to indemnify and hold harmless the Company from any and all
damages and other obligations or liabilities incurred by the Company in connection with any breach of the foregoing representation. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:27px"><FONT FACE="Times New Roman"
SIZE="2">7.<I>&nbsp;&nbsp;&nbsp;&nbsp;Injunction</I>.&nbsp;&nbsp;&nbsp;&nbsp;It is recognized and hereby acknowledged by the parties hereto that a breach by the Executive of any of the covenants contained in Section 6 of this Agreement will cause
irreparable harm and damage to the Company, the monetary amount of which may be virtually impossible to ascertain. As a result, the Executive recognizes and hereby acknowledges that the Company shall be entitled to seek an injunction from any court
of competent jurisdiction (without posting a bond or other security) enjoining and restraining any violation of any or all of the covenants contained in Section 6 of this Agreement by the Executive or any of his affiliates, associates, partners or
agents, either directly or indirectly, and that such right to injunction shall be cumulative and in addition to whatever other remedies the Company or the Company may possess. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV
STYLE="text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">8<I>.&nbsp;&nbsp;&nbsp;&nbsp;Governing Law</I>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be governed by and construed in accordance with the laws of the State of Florida without
regard to conflicts of laws principles thereof and all questions concerning the validity and construction hereof shall be determined in accordance with the laws of said state. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV
STYLE="text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">9<I>.&nbsp;&nbsp;&nbsp;&nbsp;Entire Agreement</I>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter
hereof and, upon its effectiveness, shall supersede all prior agreements, understandings and arrangements, both oral and written, between the Executive and the Company (or any of its affiliates) with respect to such subject matter. Except for the
obligation to pay all accrued but unpaid salary due the Executive, all such prior agreements, understandings and arrangements for the provision of services by the Executive to the Company and the compensation of the Executive in any form are hereby
terminated, and the Executive hereby releases and forever discharges the Company (as well as its affiliates) from any and all liabilities and obligations of any nature arising out of or in connection with any and all such prior agreements,
understandings or arrangements. This Agreement may not be modified in any way unless by a written instrument signed by both the Company and the Executive. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:27px"><FONT
FACE="Times New Roman" SIZE="2">10<I>.&nbsp;&nbsp;&nbsp;&nbsp;Notices</I>.&nbsp;&nbsp;&nbsp;&nbsp;Any notice required or permitted to be given hereunder shall be deemed given when delivered by hand or when deposited in the United States mail, by
registered or certified mail, return receipt requested, postage prepaid, (i) if to the Company, c/o SmartDisk Corporation, 3506 Mercantile Avenue, Naples, Florida 34104, Attention: Daniel E. Reed, Vice President, and (ii) if to the Executive, to his
address as reflected on the payroll records of the Company, or to such other address as either party hereto may from time to time give notice of to the other. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:27px"><FONT
FACE="Times New Roman" SIZE="2">11<I>.&nbsp;&nbsp;&nbsp;&nbsp;Benefits; Binding Effect</I>.&nbsp;&nbsp;&nbsp;&nbsp;This Agreement shall be for the benefit of and binding upon the parties hereto and their respective heirs, personal representative,
legal representatives, successors and, where applicable, assigns, including, without limitation, any successor to the Company, whether by merger, consolidation, sale of stock, sale of assets or otherwise; provided, however that the Executive shall
not delegate his employment obligations hereunder, or any portion thereof, to any other person. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:27px"><FONT FACE="Times New Roman"
SIZE="2">12<I>.&nbsp;&nbsp;&nbsp;&nbsp;Severability</I>.&nbsp;&nbsp;&nbsp;&nbsp;The invalidity of any one or more of the words, phrases, sentences, clauses or sections contained in this Agreement shall not affect the enforceability of the remaining
portions of this Agreement or any part thereof, all of which are inserted conditionally on their being valid in law, and, in the event that any one or more of the words, phrases, sentences, clauses or sections contained in this Agreement shall be
declared invalid, this Agreement shall be construed as if such invalid word or words, phrase or phrases, sentence or sentences, clause or clauses, or section or sections had not been </FONT></DIV>

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inserted. If such invalidity is caused by length of time or size of area, or both, the otherwise invalid provision will be considered to be reduced to a period or area which would cure such
invalidity. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">13.<I>&nbsp;&nbsp;&nbsp;&nbsp;Waivers</I>.&nbsp;&nbsp;&nbsp;&nbsp;The waiver by either party hereto of a breach or
violation of any term or provision of this Agreement shall not operate nor be construed as a waiver of any subsequent breach or violation. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:27px"><FONT
FACE="Times New Roman" SIZE="2">14.<I>&nbsp;&nbsp;&nbsp;&nbsp;Damages</I>.&nbsp;&nbsp;&nbsp;&nbsp;Nothing contained herein shall be construed to prevent the Company or the Executive from seeking and recovering from the other damages sustained by
either or both of them as a result of its or his breach of any term or provision of this Agreement. In the event that either party hereto brings suit for the collection of any damages resulting from, or for the injunction of any action constituting,
a breach of any of the terms or provisions of this Agreement, then the party found to be at fault shall pay all reasonable court costs and attorneys&#146; fees of the other. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV
STYLE="text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">15.<I>&nbsp;&nbsp;&nbsp;&nbsp;Section Headings</I>.&nbsp;&nbsp;&nbsp;&nbsp;The section headings contained in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">16.<I>&nbsp;&nbsp;&nbsp;&nbsp;No Third Party
Beneficiary</I>.&nbsp;&nbsp;&nbsp;&nbsp;Nothing expressed or implied in this Agreement is intended, or shall be construed, to confer upon or give any person other than the Company, the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and assigns, any rights or remedies under or by reason of this Agreement. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV STYLE="text-indent:27px"><FONT FACE="Times New Roman" SIZE="2">IN
WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written. </FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="right">
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<TD VALIGN="top" COLSPAN="3" WIDTH="43%"> <DIV><FONT FACE="Times New Roman" SIZE="2">S<SMALL>MART</SMALL>D<SMALL>ISK</SMALL> C<SMALL>ORPORATION</SMALL></FONT></DIV> </TD> </TR>
<TR>
<TD HEIGHT="16"> </TD> </TR>
<TR>
<TD VALIGN="top" WIDTH="3%"> <DIV STYLE="margin-left:13px; text-indent:-13px"><FONT FACE="Times New Roman" SIZE="2">By:</FONT></DIV> </TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center" WIDTH="43%"> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">/<SMALL>S</SMALL>/&nbsp;&nbsp;&nbsp;&nbsp;M<SMALL>ICHAEL</SMALL> S.
B<SMALL>ATTAGLIA&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</SMALL></FONT></DIV> <HR NOSHADE COLOR="#000000" ALIGN="left"></TD> </TR>
<TR>
<TD> <FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center" WIDTH="43%"> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Michael S. Battaglia,</B></FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>President and Chief Executive
Officer</B></FONT></DIV> </TD> </TR>
<TR>
<TD HEIGHT="32"> </TD> </TR>
<TR>
<TD> <FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center" WIDTH="43%"> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">/<SMALL>S</SMALL>/&nbsp;&nbsp;&nbsp;&nbsp;P<SMALL>ETER</SMALL> J.
Q<SMALL>UINN&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</SMALL></FONT></DIV> <HR NOSHADE COLOR="#000000" ALIGN="left"></TD> </TR>
<TR>
<TD> <FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="bottom" WIDTH="3%"><FONT FACE="Times New Roman" SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center" WIDTH="43%"> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="1"><B>Peter J. Quinn</B></FONT></DIV> </TD> </TR>
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 <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2"><B>ANNEX I </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT
FACE="Times New Roman" SIZE="2"><B>PRE-EXISTING INVENTIONS </B></FONT></DIV> <DIV><FONT SIZE="1">&nbsp;</FONT></DIV> <DIV ALIGN="center"><FONT FACE="Times New Roman" SIZE="2">None </FONT></DIV>
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