EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this "Agreement") is made and entered
into effective as of April 22, 1999, by and between SENSAR CORPORATION, a Nevada
corporation ("Sensar"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ("Executive"), based on the
following:
Premises
Sensar wishes to employ Executive and Executive wishes to accept employment
on the terms set forth herein.
Agreement
NOW, THEREFORE, based on the foregoing premises, which are incorporated
herein by this reference, and for and in consideration of the mutual covenants
and agreements hereinafter set forth and the mutual benefit to the parties to be
derived herefrom, it is hereby agreed as follows:
1. Employment and Term.
(a) Sensar hereby employs Executive and Executive hereby accepts
employment upon the terms and conditions set forth herein. The initial
term of Executive's employment shall begin on April 22, 1999, and continue
through December 31, 2002. After December 31, 2001, this Agreement shall
be automatically renewed so that it always has an unexpired term of one (1)
year, unless action is taken by one of the parties to terminate this
Agreement in accordance with the other provisions of this Agreement. The
initial term, plus the automatic extension, is hereinafter referred to as
the "Employment Period."
(b) During the Employment Period, Executive will serve as chief
executive officer of Sensar. Executive also agrees to serve in such
positions with each of Sensar's subsidiaries and such other or further
offices or positions of substantially consistent rank and authority as
shall, from time to time, be determined by Sensar's board of directors.
Executive agrees to perform the duties appropriate for the chief executive
officer of Sensar as may be assigned to him from time to time by the board
of directors and as described in the bylaws of Sensar. Executive shall
serve at the pleasure of the board of directors, subject to the terms of
this Agreement.
2. Performance of Services.
(a) During the Employment Period, Executive agrees to perform
faithfully the duties assigned to him by the board of directors to the best
of his ability, to devote his full and undivided business time, attention,
and services to the business of Sensar and not to engage in any other
substantial business activities other than at the direction or with the
approval of the board of directors of Sensar; provided, however, that
Executive shall remain "of counsel" with the firm ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇,
L.L.C., and will render services to the firm in his capacity as such; and
provided further, that nothing herein shall restrict Executive from
conducting incidental personal business that does not conflict with his
obligations under the terms of this Agreement. It is also understood that
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.C., will continue to provide legal services to
Sensar and its affiliates under an arrangement pursuant to which Executive
has negotiated an initial ten percent (10%) discount with respect to such
services.
(b) All duties hereunder shall be rendered in Salt Lake County, Utah,
and, on a temporary basis, at such other places as the interests, needs,
business, and opportunities of Sensar shall require.
(c) Executive shall observe and comply with the commercially
reasonable rules and regulations of Sensar respecting its business and
shall carry out and perform such commercially reasonable orders,
directions, and policies of Sensar as they may be from time to time
communicated to Executive either orally or in writing. Executive shall
further observe and comply with all applicable rules, regulations, and laws
governing the business of Sensar known to Executive.
3. Exclusivity of Services and Nondisclosure of Confidential Information.
(a) Executive agrees that during the term of this Agreement and for a
period ending on the first anniversary of the termination of the Employment
Period:
(i) he will not engage in any activity directly competitive with
an operating business of Sensar or any of its majority-owned
subsidiaries (the "Sensar Group"), directly or indirectly, in the
market defined in subsection 3(c), whether as employer, proprietary
owner, partner, stockholder (other than the holder of less than five
percent (5%) of the stock of an entity, the securities of which are
traded on a national securities exchange or in the over-the-counter
market), director, officer, employee, consultant, or agent;
(ii) he will not solicit, in competition with the Sensar Group,
any person who is a customer of the operating businesses conducted by
the Sensar Group at the date hereof or a customer of the operating
businesses conducted by the Sensar Group at any time during the
Employment Period; and
(iii) he will not induce or attempt to persuade any employee
of the Sensar Group to terminate his or her employment relationship in
order to enter into employment with any party in competition with the
Sensar Group.
(b) Executive further agrees that he will not, at any time during the
Employment Period or at any time after the termination of this Agreement,
irrespective of the time, manner, or cause of termination, use, disclose,
copy, or assist any other person or firm in the use, disclosure, or copying
of any trade secrets or other confidential information of the Sensar Group,
except to the extent authorized in writing by Sensar. Upon termination of
his employment hereunder, Executive will surrender to Sensar all records
and other documents obtained by him or entrusted to him during the course
of his employment by Sensar (together with all copies thereof); provided,
however, that Executive may retain copies of such documents as are
necessary for Executive's personal records for income tax purposes. For
purposes of this section 3, proprietary information about the business of
the Sensar Group shall be treated as confidential until it has been
published or is generally or publicly known outside the Sensar Group or
until it has been recognized as standard practice outside the Sensar Group.
The provisions of this paragraph 3(b) shall remain in effect for a period
of three (3) years subsequent to the termination of the Employment Period.
(c) The following provisions shall apply to the covenants of
Executive contained in this section 3:
(i) The covenants contained in clauses (i) and (ii) of
subsection 3(a) shall apply to those markets in which the Sensar Group
is doing business at the termination of the Employment Period and
those markets in which the Sensar Group has publicly or internally
issued written plans to enter prior to the termination of the
Employment Period.
(ii) Executive agrees that a breach or threatened breach on his
part of any covenant contained in this section 3 will cause such
damage to Sensar as will be irreparable. Therefore, without limiting
the right of Sensar to pursue all other legal and equitable remedies
available for violation by Executive of the covenants contained in
this section 3, it is expressly agreed that remedies other than
injunctive relief cannot fully compensate the Sensar Group for such a
violation and that Sensar and the Sensar Group shall be entitled to
injunctive relief to prevent any such violation or continuing
violation thereof.
(iii) It is the intent and understanding of each party hereto
that if, in any action before any court or agency legally empowered to
enforce the covenants contained in this section 3, any term,
restriction, covenant, or promise contained therein is found to be
unreasonable and for that reason unenforceable, then such term,
restriction, covenant, or promise shall be deemed modified to the
extent necessary to make it enforceable by such court or agency.
4. Business Ideas.
(a) Executive acknowledges that Sensar will own all rights in all
"Business Ideas" (as hereinafter defined) which are originated or developed
by Executive, either alone or with employees or consultants of Sensar,
during the Employment Period.
(b) Executive agrees that, during the Employment Period, he will:
(i) assign to Sensar all Business Ideas and promptly execute all
documents which Sensar may reasonably require to protect its patent,
copyright, and other rights to such Business Ideas throughout the
world; and
(ii) promptly disclose to Sensar all information concerning all
material Business Ideas originated by Executive or any employee of
Sensar, which come to his attention and which concern the business of
Sensar.
(c) For purposes of this section 4, "Business Ideas" shall mean all
ideas, whether or not patentable, which are originated or developed by
Executive in connection with his employment by Sensar and which relate to
the business of Sensar and/or the Sensar Group.
5. Corporate Opportunities. Executive understands that Sensar is
presently seeking to identify, investigate, and, if appropriate, make
investments in or provide funding to start-up companies (a "Corporate
Opportunity"). Executive acknowledges that Sensar will own all rights to pursue
such Corporate Opportunities which he may become aware of during the term of
this Agreement. In the event Executive identifies an entity or business that
may reasonably present a Corporate Opportunity to Sensar, Executive will
immediately notify Sensar. If Executive wishes to pursue such Corporate
Opportunity, either individually or through any entity other than Sensar, he
must notify the board of directors of Sensar of such desire. The board of
directors will have 15 days to evaluate the Corporate Opportunity. If the board
of directors determines that the Corporate Opportunity would not be a suitable
investment for Sensar, they shall so notify Executive in writing. Absent such
written consent, Executive may not pursue the Corporate Opportunity.
6. Compensation and Benefits. For all services rendered by Executive
pursuant to this Agreement, Sensar shall compensate Executive as follows:
(a) As annual compensation for Executive's services hereunder, in
accordance with its normal payroll practices, Sensar agrees to pay
Executive during the Employment Period a base salary of Eight Thousand
Dollars ($8,000.00) per month.
(b) Executive shall be entitled to receive a thirty percent (30%)
participating interest in the Deferred Compensation Plan adopted by the
board of directors of Sensar. In addition, Executive may participate in
such other bonuses and incentive compensation as the board of directors may
determine.
(c) Sensar shall grant to Executive a stock option for 100,000 shares
as set forth on Exhibit "A."
(d) Sensar shall provide to Executive suitable executive offices and
facilities appropriate for Executive's position and suitable for the
performance of Executive's responsibilities.
(e) Executive shall be entitled to vacation and sick leave in
accordance with the general policy of the Sensar Group for executive level
employees. Vacations shall be taken by Executive at a time and with
starting and ending dates mutually convenient to Sensar and Executive.
Vacations or portions of vacations not used in one employment year shall
carry over to the succeeding employment year, but shall thereafter expire
if not used within such succeeding year.
(f) Sensar shall reimburse Executive for all proper expenses incurred
by him on behalf of the Company in the performance of his duties hereunder
in accordance with the policies and procedures established by Sensar.
(g) Subject to the insurability of Executive, Sensar shall provide
Executive with health, medical, and disability insurance policies on the
same terms as offered to other executive level employees of Sensar. Sensar
shall additionally provide to Executive incentive, retirement, pension,
profit sharing, stock option, or other employee benefit plans which are
consistent with and similar to such plans provided by the Sensar Group to
its executive level employees generally. Executive shall also have the
right to participate in any other employee benefit programs provided by the
Sensar Group.
(h) Sensar shall assume and pay reasonable dues of Executive in
local, state, and national societies and associations, and in such other
clubs and organizations, as shall be approved and authorized by the board
of directors of Sensar.
(i) Sensar shall withhold from Executive's compensation hereunder all
proper federal and state payroll and income taxes on compensation paid to
Executive and shall provide an accounting to Executive for such amounts
withheld.
7. Nomination to Board of Directors. Executive shall be appointed to
serve on the board of directors of Sensar until the next annual meeting of
shareholders. Sensar shall include Executive as a nominee of the Company to be
presented to the shareholders for election to a position on the board of
directors at the next annual meeting of shareholders and shall recommend his
approval by the shareholders.
8. Termination of Agreement.
(a) Termination by Sensar for Cause. Sensar shall have the right,
without further obligation to Executive other than for compensation
previously accrued, including Executive's rights under the Deferred
Compensation Plan, to terminate this Agreement for cause ("Cause") by
showing that (i) Executive has materially breached the terms hereof; (ii)
Executive, in the reasonable determination of the board of directors of
Sensar, has been grossly negligent or engaged in material willful or gross
misconduct in the performance of his duties; or (iii) Executive has
committed or been convicted of fraud, embezzlement, theft, or dishonesty or
other criminal conduct against Sensar.
(b) Termination Upon Death or Disability of Executive. This
Agreement shall terminate immediately upon Executive's death, subject to
the payment of Executive's base salary for a ninety (90) day period after
death. This Agreement shall also terminate on the continued disability of
Executive for a consecutive period of ninety (90) days. For purposes of
this paragraph "disability" shall be defined as the inability of Executive
to substantially perform his duties as president, chief executive officer,
and a member of the board of directors of Sensar.
(c) Termination Upon Change of Control. Notwithstanding any
provision of this Agreement to the contrary, Executive may terminate this
Agreement by providing written notice of such termination to Sensar within
sixty days (60) days of the occurrence of any of the following events:
(i) The sale, lease, exchange, or other transfer in one
transaction or a series of transactions of all or substantially all of
the assets of Sensar to a single purchaser that is not a wholly owned
subsidiary of Sensar or to a group of associated purchasers;
(ii) The sale, lease, exchange, or other disposition to a single
person or group of persons under common control in one transaction or
a series of related transactions resulting in such person or persons
owning, directly or indirectly, greater than twenty-five percent (25%)
of the combined voting power of the outstanding shares of Sensar's
common stock;
(iii) As a result of a merger, consolidation, sale of all or
substantially all of the assets of Sensar, a contested election, or
any combination of the foregoing, the persons who were directors of
Sensar immediately prior thereto shall cease to constitute a majority
of the board of directors of Sensar or any successor to Sensar;
(iv) The decision by Sensar to terminate its business and
liquidate its assets;
(v) The merger or consolidation of Sensar in a transaction in
which the shareholders of Sensar immediately prior to such merger or
consolidation receive less than fifty percent (50%) of the outstanding
voting securities of the new or continuing corporation; or
(vi) A person (within the meaning of Section 3(a)(9) or Section
13(d)(3), as in effect on the date hereof, of the Securities Exchange
Act of 1934 (the "Exchange Act")) shall become the beneficial owner
(within the meaning of rule 13d-3 of the Exchange Act as in effect on
the date hereof) of fifty percent (50%) or more of the outstanding
voting securities of Sensar.
If, as a result of one of the foregoing events, Sensar is not the
surviving entity, the provisions of this Agreement shall inure to the
benefit of and be binding upon the surviving or resulting entity. If as a
result of the merger, consolidation, transfer of assets, or other event
listed above, the duties of Executive are increased, then the compensation
of Executive provided for by this Agreement shall be reasonably adjusted
upward to compensate for the additional duties and responsibilities
assumed.
(d) Termination by Executive for Cause. Executive shall have the
right to terminate this Agreement in the event of (i) Sensar's intentional
breach of any covenant or term of this Agreement, but only if Sensar fails
to cure such breach within twenty (20) days following the receipt of notice
by Executive setting forth the conditions giving rise to such breach; or
(ii) the exercise of Executive's rights under subsection 8(c).
(e) Termination Payments. In the event that this Agreement is
terminated for any reason other than by Sensar for Cause, Sensar shall:
(1) Pay to Executive all amounts accrued through the date of
termination; any unreimbursed expenses incurred pursuant to this
Agreement; the participating percentage of Executive under the
Deferred Compensation Plan (provided that, such amount to be paid to
Executive shall not be less than One Million Five Hundred Thousand
Dollars ($1,500,000.00)); and any other benefits specifically provided
to Executive under any benefit plan.
(2) Pay to Executive an amount equal to the greater of (i) the
amount of salary that would otherwise accrue to Executive during the
remaining Employment Period, or (ii) the amount of Executive's base
salary for a one-year period.
(f) Exit Interview. To insure a clear understanding of this
Agreement, including but not limited to the protection of the business
interests of Sensar, Executive agrees, upon termination of this Agreement
for any reason or the expiration of the Employment Period, at no additional
expense to Executive, to engage in an exit interview with Sensar at a time
and place designated by Sensar.
9. Indemnification. Sensar shall indemnify Executive and hold Executive
harmless from liability for acts or decisions made by Executive while performing
services for Sensar to the greatest extent permitted by applicable law, except
for acts that constitute fraud, gross negligence, or willful and knowing
violations of the terms of this Agreement. Sensar shall use its best efforts to
obtain coverage for Executive under any insurance policy now in force or
hereafter obtained during the term of this Agreement insuring officers and
directors of Sensar against such liability. Executive agrees to indemnify and
to hold Sensar harmless from any and all damages, losses, claims, liabilities,
costs, or expenses arising from Executive's acts or omissions in violation of
his duties under this Agreement.
10. Notice. Any notice or request required or permitted to be given
hereunder shall be sufficient if in writing and delivered personally, sent by
facsimile transmission, or sent by registered mail, return receipt requested, to
the addresses hereinabove set forth or to any other address designated by either
of the parties hereto by notice similarly given. Such notice shall be deemed to
have been given upon such personal delivery, facsimile transmission, or mailing,
as the case may be, to the addresses set forth below:
If to Executive, to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
If to Sensar, to: Sensar Corporation
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.C.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Confirmation: (▇▇▇) ▇▇▇-▇▇▇▇
11. Assignment. Except to any successor or assignee of Sensar as provided
in subsection 8(c), neither this Agreement nor any rights or benefits hereunder
may be assigned by either party hereto without the prior written consent of the
other party.
12. Attorneys' Fees. In the event that any action, suit, arbitration, or
other proceeding is instituted concerning or arising out of this Agreement, the
prevailing party shall be entitled to recover all of such party's costs,
including reasonable attorneys' fees, incurred in each and every such action,
suit, arbitration, or other proceeding, including any and all appeals or
petitions therefrom.
13. Validity of Provisions and Severability. If any provision of this
Agreement is, or becomes, or is deemed invalid, illegal, or unenforceable in any
jurisdiction, such provision shall be deemed amended to conform to the
applicable jurisdiction, or if it cannot be so amended without materially
altering the intention of the parties, it will be stricken. However, the
validity, legality, and enforceability of any such provisions shall not in any
way be effected or impaired thereby in any other jurisdiction and the remainder
of this Agreement shall remain in full force and effect.
14. Entire Agreement. This Agreement constitutes the entire agreement and
understanding between the parties pertaining to the subject matter of this
Agreement. This Agreement supersedes all prior agreements, if any, any
understandings, negotiations, and discussions, whether oral or written. No
supplement, modification, waiver, or termination of this Agreement shall be
binding unless executed in writing by the party to be bound thereby.
15. Governing Law. This Agreement shall be governed by and construed and
interpreted in accordance with the laws of the state of Utah.
IN WITNESS WHEREOF, Sensar has caused this Agreement to be signed by its
duly authorized officer and Executive has signed this Agreement as of the date
first above written.
Sensar:
SENSAR CORPORATION
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Duly Authorized Officer
Executive:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
