EXHIBIT 10.23
EMPLOYMENT AGREEMENT
THIS AGREEMENT ("Agreement"), made and effective as of the 1st day of
April 2005, between Sense Holdings, Inc., a Florida corporation ("Sense" or
"Corporation"), and Xxxx Xxxxx Perler ("CEO" or "Executive").
This is a thirty six month contract covering the period April 1, 2005
to April 1, 2008.
WHEREAS, Sense desires to secure the services of the CEO and the CEO
desires to accept such employment.
NOW THEREFORE, in consideration of the material advantages accruing to
the two parties and the mutual covenants contained herein, and intending to be
legally and ethically bound hereby, Sense and the CEO agree with each other as
follows:
1. Duties. The CEO will render full-time professional services to Sense
in the capacity of Chief Executive Officer of Sense. He will at all times,
faithfully, industriously and to the best of his ability, perform all duties set
forth in Sense bylaws and in policy statement of the Board. As CEO, the
Executive shall always be the most senior Company officer and shall have the
duties, responsibilities and authority that are customarily associated with such
position. Executive's duties and responsibilities shall include authority for
acquisitions, divestitures, investor relations and overall management of the
company subject to Board policies or direction. Executive shall also perform
other functions consistent with the CEO position and shall report directly and
solely to the Board. Executive shall perform his job in Sunrise, Florida and
shall not have to render services at another location except on a temporary
basis. Executive shall be permitted to perform outside business endeavors,
subject to non-competition agreements between the Company and the Executive and
provided that such outside activities do not interfere with the performance of
Executive's duties.
2. Compensation. In consideration for these services as Chief Executive
Officer, Sense agrees to pay the CEO a salary of $ 137,500 per annum through May
7, 2005. The current compensation for the CEO will increase to $ 156,000 on May
7, 2005 and continue through May 7, 2006. Higher figures shall be agreed upon at
an annual review of his compensation and performance by the Board This annual
review shall occur three months prior to the end of each year of the contract
for the express purpose of considering increments. Salary amounts shall be
payable in accordance to Sense current pay period standards for employees.
(a) Incentive Compensation: In addition to the Base Salary,
the Company shall pay to Executive as incentive compensation
("Incentive Compensation") in respect of each calendar year (or portion
thereof) of the Company, an amount determined in accordance with any
bonus or short term incentive compensation program (which may be based
upon achieving certain specified performance criteria) which may be
established by the Board either for the Executive or for senior
management. The determination as to the amounts of any awards available
to the Executive under these programs shall be reviewed at least
annually by the Company's Executive Compensation Committee to ensure
that such amounts are competitive with awards granted to similarly
situated executives of publicly held companies comparable to the
Company.
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(b) The CEO shall be entitled to 10 Paid Days Off of
compensated time each of the contract years, and such other paid
holidays in accordance with Sense PDO policy, to be taken at times
mutually agreed upon between him and the Chairman of the Board.
(c) In the event of a single period of prolonged inability to
work due to the result of a sickness or an injury, the CEO will be
compensated in accordance with Sense's PDO (Paid Days Off) and
disability policies. Up to six (6) months salary continuation will be
provided in such an instance to supplement short-term disability.
(d) In addition, the CEO will be permitted to be absent from
Sense during working days to attend professional meetings and to attend
to such outside professional duties in the biometrics field as have
been mutually agreed upon between him and the Chairman of the Board.
Attendance at such approved meetings and accomplishment of approved
professional duties shall be fully compensated service time and shall
not be considered vacation time. Sense shall reimburse the CEO for all
expenses incurred by the CEO incident to attendance at approved
professional meetings and such entertainment expenses incurred by the
CEO in furtherance of Sense's interests, provided, however, that such
reimbursement is approved by the Chairman of the Board.
(e) In addition, the CEO shall be entitled to all other fringe
benefits to which all other employees of Sense are entitled.
3. Sense agrees to pay dues to professional associations and societies
and to such service organizations and clubs of which the CEO is a member,
approved by the Chairman of the Board as being in the best interests of Sense.
4. Sense agrees to:
(a) Insure the CEO under its general liability insurance
policy for all acts done by him in good faith as Chief Executive
Officer throughout the term of this contract;
(b) Provide comprehensive health and major medical insurance
for the CEO and his family, according to Sense benefit package; and,
(c) Provide a car allowance of up to $ 500.00 per month, or
lease.
5. The Board may at its discretion terminate the CEO's duties as Chief
Executive Officer. This action is termed Involuntary Termination Without Cause
or Disability. Such action shall require a majority vote of the entire Board and
become effective upon written notice to the CEO or at such later times as may be
specified in said notice. After such termination, all rights, duties and
obligations of both parties shall cease except that Sense shall continue to pay
the CEO his then monthly salary at the level for the month in which his duties
were terminated under the terms of this paragraph^. During this period, the CEO
shall not be required to perform any duties for Sense or come to Sense.
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Neither shall the fact that the CEO seeks, accepts and undertakes other
employment during this period affect such payments. Also, for the period during
which such payments are being made, Sense agrees to keep the CEO's group life,
health and major medical insurance coverage paid up and in effect, and the CEO
shall be entitled to outplacement services offered by Sense. The severance
arrangements described in this paragraph will not be payable in the event that
the CEO's employment is terminated for Cause.
(a) Involuntary Termination Without Cause or Disability: In
the event that, during the term of this Agreement, the Corporation
terminates Executive's employment for any reason other than Cause or
Disability, and such termination does not occur within six months after
a Change in Control, then the Executive shall be entitled to receive
the following payments and benefits:
(1) Severance (2x payment): The Corporation shall pay
to the Executive following the date of the employment
termination and over the succeeding 24 months, in accordance
with standard payroll procedures, an amount equal to the
following:
(i) Two hundred percent (200%) of the
Executive's Base Compensation in effect on the date
of the employment termination; plus
(ii) Two hundred percent (200%) of the
Executive's annual incentive bonus earned on a
quarterly basis as of the date of the termination,
assuming the Executive was employed on the last day
of the quarter in which termination of employment
occurred.
Any other provision of this Agreement or of the Corporation's Incentive Bonus
Plan notwithstanding, after the amount described in this Subsection (a) has been
paid to the Executive, the Executive shall have no further interest in such
Plan.
(2) Two years of Life Insurance and Health Plan
Coverage: The coverage described in this Subsection (b) shall
be provided for a "Continuation Period' beginning on the date
when the employment termination is effective and ending on the
earlier of (i) 24 months after the date when the employment
termination is effective or (ii) the date of the Executive's
death. During the Continuation Period, the Executive (and,
where applicable, the Employee's dependents) shall be entitled
to continue participation in the group term life insurance
plan and in the health care plan for employees maintained by
the Corporation as if the Executive were still an employee of
the Corporation. The coverage provided under this Subsection
(b) shall run concurrently with and shall be offset against
any continuation coverage under Part 6 of Title I of the
Employee Retirement Income Security Act of 1974, as amended.
Where applicable, the Executive's compensation for purposes of
such plans shall be deemed to be equal to the Executive's
compensation (as defined in such plans) in effect on the date
of the employment termination. To the extent that the
Corporation finds it undesirable to cover the Executive under
the group life insurance and health plans of the Corporation,
the Corporation shall provide the Executive (at its own
expense) with the same level of coverage under individual
policies.
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(3) Incentive Programs: The Continuation Period shall
be counted as employment with the Corporation for purposes of
vesting in each of the incentive awards heretofore or
hereafter granted to the Executive by the Corporation, any
contrary provisions of such awards or the applicable plan
notwithstanding. This Subsection shall not be construed to
require any member of the Corporation to grant any new awards
to the Executive during the Continuation Period. The parties
understand and agree that the Continuation Period also counts
as employment with the Corporation for purposes of determining
the expiration date of any incentive award granted by any
member of the Corporation and held by the Executive when
employment terminates.
(4) No Mitigation: The Executive shall not be
required to mitigate the amount of any payment or benefit
contemplated by this section, nor shall any such payment or
benefit be reduced by any earnings or benefits that the
Executive may receive from any other source."
(b) Cause. The Company may terminate your employment for
"Cause." "Cause" will exist in the event you are convicted of a felony
or, in carrying out your duties you are guilty of gross negligence or
gross misconduct resulting, in either case, in material harm to the
Company. In the event your employment is terminated for Cause you will
be entitled to any unpaid salary through the date of termination due
you and you will be entitled to no other compensation hereunder from
the Company and your deferred compensation will be forfeited. In the
event of any claim that the Executive has been guilty of gross
negligence or gross misconduct, notice shall be provided to Executive
in writing at the address specified herein for communications, and
Executive shall have 20 days in which to respond and defend his actions
or, if possible and feasible, cure the conduct which was the basis for
such written notice.
For these purposes, no act or failure to act shall be considered "willful"
unless it is done, or omitted to be done, in bad faith without reasonable belief
that the action or omission was in the best interest of the Company. In the
event corrective action is not satisfactorily taken by you, in each case as
determined by the Board, as described above, a final written notice of
termination shall be provided to you by the Company.
6. Should the Board in its discretion change the CEO's duties or
authority so it can reasonably be found that the CEO is no longer performing as
the Chief Executive Officer of Sense and/or its parent corporation, the CEO
shall have the right, within 90 days of such event, in his complete discretion,
to terminate this contract by written notice delivered to the Chairman of the
Board. Upon such termination, the CEO for Good Reason shall be entitled to the
severance payment described in Paragraph 5, in accordance with the same terms of
that Paragraph.
Good Reason shall mean that you, without your consent, have
either:
(i) incurred a material reduction in your title,
status, authority or responsibility at the Company; or
(ii) failed to be re-elected to the Board and
continue as the CEO/Chairman and been able to nominate one
officer to the Board; or
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(iii) incurred a reduction in your base compensation
from the Company; or
(iv) been notified that your principal place of work
will be relocated by a distance of fifty (50) miles or more;
or
(v) been required to work more than ten (10) days per
month outside of your principal offices for a six (6) month
continuous period."
7. If Sense has a Change of Control, through but not limited to,
merger, sale or closing, the CEO may terminate his employment at his discretion
or be retained as President of Sense or any successor corporation to or holding
company of Sense. If the CEO elects to terminate his employment at such time, he
shall be entitled to the same severance arrangement as would be applicable under
Paragraph 6 if Sense had terminated his employment at such time.
Any election to terminate employment under this Paragraph must
be made prior to Sense's merger, sale or closure, as applicable.
A Change in Control shall mean:
(i) The consummation of a merger or consolidation of
the Company with or into another entity or any other corporate
reorganization, if more than 50% of the combined voting power
of the continuing or surviving entity's securities outstanding
immediately after such merger, consolidation or other
reorganization is owned by persons who were not stockholders
of the Company immediately prior to such merger, consolidation
or other reorganization; or
(ii) the sale, transfer or other disposition of all
or substantially all of the Company's assets; or
(iii) A change in the composition of the Board of
Directors, as a result of which fewer than one-half of the
incumbent directors are directors who either:
(A) Had been directors of the Company
twenty-four (24) months prior to such change; or
(B) Were elected, or nominated for election,
to the Board of Directors with the affirmative votes
of at least a majority of the directors who had been
directors of the Company twenty-four (24) months
prior to such change and who were still in office at
the time of the election or nomination.
A transaction shall not constitute a Change of Control if its
sole purpose is to change the state of the Company's incorporation or
to create a holding company that will be owned in substantially the
same proportions by the persons who held the Company's securities
immediately before such transaction.
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(a) Change of Control Termination Benefits: In the event that,
during the term of this Agreement and within two years after a Change
in Control, Executive's employment terminates in a Qualifying
Termination, the Executive shall be entitled to the payments specified
in Subsections (b) through (d):
(b) Severance (2.99x payment): The Corporation shall pay to
the Executive in a lump sum, not less than 31 days nor more than 60
days following the date of the employment termination, an amount equal
to the following:
(1) 299% of the Executive's Base Compensation in
effect on the date employment termination; plus
(2) 299% of his/her prior year's incentive bonus.
Any other provision of this Agreement or of the Corporation's
incentive bonus plan notwithstanding, after the amount described in
this Subsection (b) has been paid to the Executive, the Executive shall
have no further interest in such Plan.
(c) Three Years of Life Insurance and Health Plan Coverage:
The coverage described in this Subsection (c) shall be provided for a
"Continuation Period" beginning on the date when the employment
termination is effective and ending on the earlier of (1) the third
anniversary of the date when the employment termination is effective or
(2) the date of the Executive's death. During the Continuation Period,
the Executive (and, where applicable, the Employee's dependents) shall
be entitled to continue participation in the group term life insurance
plan and in the health care plan for employees maintained by the
Corporation as if the Employee were still an employee of the
Corporation. The coverage provided under this Subsection (c) shall run
concurrently with and shall be offset against any continuation coverage
under Part 6 of Title I of the Employee Retirement Income Security Act
of 1974, as amended. Where applicable, the Executive's compensation for
purposes of such plans shall be deemed to be equal to the Executive's
compensation (as defined in such plans) in effect on the date of the
employment termination. To the extent that the Corporation finds it
undesirable to cover the Executive under the group life insurance and
health plans of the Corporation, the Corporation shall provide the
Executive (at its own expense) with the same level of coverage under
individual policies.
(d) Incentive Programs: All stock options or equity awards
granted by the Corporation shall vest 100% upon the effective date of
the Change in Control. In addition, following a Qualifying Termination,
and notwithstanding anything to the contrary in the Corporation's stock
option plans and the Executive's stock option agreements, Executive
shall have the full term set forth in the stock option agreements to
exercise such options (irrespective of termination of employment).
Excise Tax Restoration Payment: In the event that it is
determined that any payment or distribution of any type to or for the
benefit of the Executive made by the Company, by any of its affiliates,
by any person who acquires ownership or effective control or ownership
of a substantial portion of the Company's assets (within the meaning of
section 280G of the Internal Revenue Code of 1986, as amended, and the
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regulations thereunder (the "Code")) or by any affiliate of such
person, whether paid or payable or distributed or distributable
pursuant to the terms of an employment agreement or otherwise (the
"Total Payments"), would be subject to the excise tax imposed by
section 4999 of the Code or any interest or penalties with respect to
such excise tax (such excise tax, together with any such interest or
penalties, are collectively referred to as the "Excise Tax"), then the
Executive shall be entitled to receive an additional payment (an
"Excise Tax Restoration Payment") in an amount that shall fund the
payment by the Executive of any Excise Tax on the Total Payments as
well as all income taxes imposed on the Excise Tax Restoration Payment,
any Excise Tax imposed on the Excise Tax Restoration Payment and any
interest or penalties imposed with respect to taxes on the Excise Tax
Restoration or any Excise Tax.
Late or Refused Payment: If the Corporation refuses or fails
to timely pay or provide the compensation and benefits specified in
this section upon demand as provided in this Agreement and if such
refusal or failure is not corrected within 10 business days after the
Executive provides written notice to the Corporation concerning the
refusal or failure, then the Corporation shall pay immediately to the
Executive an additional amount equal to 50% of the Executive's Base
Compensation.
Notwithstanding any termination of Executive's employment
hereunder pursuant Paragraphs 5, 6 or 7 of this Agreement, Executive
shall be entitled to full indemnification from the Corporation to the
fullest extent permitted by the Florida Business Corporation Act.
8. Should the CEO at his discretion elect to terminate this contract
for any other reason than as stated in Paragraph 7, he shall give the Board 90
days' written notice of his decision to terminate. At the end of the 90 days,
all rights, duties and obligations of both parties to the contracts shall cease
and the CEO will not be entitled to severance benefits.
9. If an event described in paragraph 5, 6, 7 or 8 occurs and the CEO
accepts any of the severance benefits or payments described therein, to the
extent not prohibited by laws, the CEO shall be deemed to voluntarily release
and forever discharge Sense and its officers, directors, employees, agents, and
related corporations and their successors and assigns, both individually and
collectively and in their official capacities (hereinafter referred to
collectively as "Releasee"), from any and all liability arising out of his
employment and/or the cessation of said employment. Nothing contained in this
paragraph shall prevent the CEO from bringing an action to enforce the terms of
the Agreement.
10. The CEO shall maintain confidentiality with respect to information
that he receives in the course of his employment and not disclose any such
information. The CEO shall not, either during the term of employment or
thereafter, use or permit the use of any information of or relating to Sense in
connection with any activity or business and shall not divulge such information
to any person, firm, or corporation whatsoever, except as may be necessary in
the performance of his duties hereunder or as may be required by law or legal
process.
11. During the term of this employment and during the 12-month period
following termination of his employment, the CEO shall not directly own, manage,
operate, join, control, or participate in or be connected with, as an officer,
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employee, partner, stockholder or otherwise, any biometric company, or related
business, partnership, firm, or corporation (all of which hereinafter are
referred to as "entity") that is at the time engaged principally or
significantly in a business that is, directly or indirectly, at the time in
competition with the business of Sense. Nothing herein shall prohibit the CEO
from acquiring or holding any issue of stock or securities of any entity that
has any securities of any such entity. This covenant shall be construed as an
agreement independent of any other provision of this Agreement, and the
existence of any claim or cause of action, whether predicated on this Agreement
or otherwise, shall not constitute a defense to the enforcement by Sense of this
covenant. In the event of actual or threatened breach by the CEO of this
provision, Sense shall be entitled to an injunction restraining the CEO from
violation or further violation of the terms thereof.
12. The CEO shall not directly or indirectly through his own efforts,
or otherwise, during the term of this Agreement, and for a period of 12 months
thereafter, employ, solicit to employ, or otherwise contract with, or in any way
retain the services of any employee or former employee of Sense, if such
individual has provided professional or support services to Sense at any time
during this Agreement without the express written consent of Sense. The CEO will
not interfere with the relationship of Sense and any of its employees and the
CEO will not attempt to divert from Sense any business in which Sense has been
actively engaged during his employment.
13. Terms of a new contract shall be complete, or the decision made not
to negotiate a new contract made, not later than the end of the twenty-second
month of this contract. This contract and all its terms and conditions shall
continue in effect until its duration, or terminated according to paragraphs 5,
6, 7, 8 or 9. Should Sense not renew the contract, the CEO will be entitled to
six (6) months severance pay.
14. This contract constitutes the entire agreement between the parties
and contains all the agreements between them with respect to the subject matter
hereof. It also supersedes any and all other agreements or contracts, either
oral or written, between the parties with respect to the subject matter hereof.
15. Except as otherwise specifically provided, the terms and condition
of this contract may be amended at any time by mutual agreement of the parties,
provided that before any amendment shall be valid or effective it shall have
been reduced to writing and signed by all members of the Executive Committee of
Sense board and the CEO.
16. The invalidity or unenforceability of any particular provision of
this contract shall not affect its other provisions, and this contract shall be
construed in all respects as if such invalid or unenforceable provision had been
omitted.
17. This agreement shall be binding upon Sense, its successors and
assigns, including, without limitation, any corporation into which Sense may be
merged or by which it may be acquired, and shall insure to the benefit of the
CEO, his administrators, executors, legatees, heirs and assigns.
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18. This agreement shall be construed and enforced under and in
accordance with the laws of the State of Florida.
19. Arbitration: Any dispute or controversy arising out of this
Agreement or the Executive's employment or the termination thereof, including,
but not limited to, any claim of discrimination under state or federal law,
shall be settled exclusively by arbitration in Fort Lauderdale, Florida, in
accordance with the rules of the American Arbitration Association then in
effect; provided, however, that in the event of a claimed violation of the
Confidential Information obligations specified in this Agreement, the
Corporation or the Executive may seek injunctive relief in order to prevent
irreparable harm or preserve the status quo. Judgment may be entered on the
arbitrator's award in any court having jurisdiction and attorney fees will be
awarded to the prevailing party.
20. The term of this Agreement is for three years. In the event that
either party hereto does not signify his or its intention not to renew or extend
this contract for any additional term, which notice shall be provided not later
than 60 days prior to the termination of this Agreement or any renewal period,
this Agreement shall renew on the same terms and conditions for an additional
two-year period, with an automatic adjustment of 10% for each item of
compensation provided hereunder.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and
seals on the day and year first above written.
SENSE HOLDINGS, INC.
/s/ Xxxxxx Xxxxxxxx
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Witness Xxxxxx Xxxxxxxx (Board Member)
/s/ Xxxx Xxxxx Perler
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Witness Xxxx Xxxxx Perler (CEO)
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