EXHIBIT 10.21
EMPLOYMENT CONTRACT
This agreement, made and effective as of the 16th day of December 2002, between
Sense Holdings, Inc. ("Sense"), a corporation, and Xxxxxx Xxxxxxxx.
This is a 24-month contract covering the period December 16, 2002 to December
16, 2004.
WHEREAS, Sense desires to secure the services of the CFO and the CFO 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 CFO agree with each other as follows:
1. The CFO will render full-time professional services to Sense in the capacity
of Chief Financial Officer of Sense corporation. 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.
Title and Job Description: As CFO, 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 CFO 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 noncompetition
agreements between the Company and the Executive and provided that such outside
activities do not interfere with the performance of Executive's duties.
2. In consideration for these services as Chief Financial Officer, Sense agrees
to pay the CFO a salary of $115,000 per annum or such 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. The amount of
$115,000 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.
b) The CFO 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 CFO 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 CFO 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 CFO for all expenses incurred by the CFO incident to attendance at approved
professional meetings and such entertainment expenses incurred by the CFO in
furtherance of Sense's interests, provided, however, that such reimbursement is
approved by the Chairman of the Board.
e) In addition, the CFO 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 CFO 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 CFO under its general liability insurance policy for all acts done
by him in good faith as Chief Financial Officer throughout the term of this
contract;
b) Provide comprehensive health and major medical insurance for the CFO and his
family, according to Sense benefit package; and,
c) Provide a car allowance of up to $ 400.00 per month, or lease.
5. The Board may at its discretion terminate the CFO's duties as Chief Financial
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 CFO 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 CFO his then monthly salary for the month in which his duties were
terminated under the terms of this paragraph as an agreed upon severance
payment. During this period, the CFO shall not be required to perform any duties
for Sense or come to Sense. Neither shall the fact that the CFO 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 CFO's group life, health and major medical insurance coverage paid up and in
effect, and the CFO 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 CFO's employment is terminated for Cause.
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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 (1) 24 months after 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
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.
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.
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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.
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 CFO's duties or authority so it
can reasonably be found that the CFO is no longer performing as the Chief
Financial Officer of Sense and/or its parent corporation, the CFO 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 CFO for Good Reason shall be entitled to the severance
payment described in Paragraph 6, 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
CFO/Chairman and been able to nominate one officer to the Board; or
(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 CFO 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 CFO 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.
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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.
(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.
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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 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.
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8. Should the CFO at his discretion elect to terminate this contract for any
other reason than as stated in Paragraph 7, he shall give the Board 90 day's
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 CFO will not be entitled to severance benefits.
9. If an event described in paragraph 5, 6, 7 or 8 occurs and the CFO accepts
any of the severance benefits or payments described therein, to the extent not
prohibited by laws, the CFO 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 CFO from bringing an action to enforce the terms of
the Agreement.
10. The CFO shall maintain confidentiality with respect to information that he
receives in the course of his employment and not disclose any such information.
The CFO 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 CFO shall not directly own, manage, operate,
join, control, or participate in or be connected with, as an officer, 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 CFO 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 CFO of this provision, Sense shall be entitled to an
injunction restraining the CFO from violation or further violation of the terms
thereof.
12. The CFO 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 CFO will
not interfere with the relationship of Sense and any of its employees and the
CFO will not attempt to divert from Sense any business in which Sense has been
actively engaged during his employment.
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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 CFO 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 CFO.
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 CFO, his
administrators, executors, legatees, heirs and assigns.
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.
This contract signed this 16th day of December, 2002.
Sense Holdings, Inc.
Witness: _____________________ ______________________________
Xxxx Xxxxx Perler (Board Member)
Witness: _____________________ ______________________________
Xxxxxx Xxxxxxxx (CFO)
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