EXHIBIT 10.24
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 Xxxxxx Xxxxxxxx ("CFO" or "CFO").
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 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. Duties. The CFO will render full-time professional services to Sense
in the capacity of Chief CFO 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 CFO, the CFO shall always
be the most senior Company officer and shall have the duties, responsibilities
and authority that are customarily associated with such position. CFO's duties
and responsibilities shall include authority for acquisitions, divestitures,
investor relations and overall management of the company subject to Board
policies or direction. CFO shall also perform other functions consistent with
the CFO position and shall report directly and solely to the Board. CFO shall
perform his job in Sunrise, Florida and shall not have to render services at
another location except on a temporary basis. CFO shall be permitted to perform
outside business endeavors, subject to non-competition agreements between the
Company and the CFO and provided that such outside activities do not interfere
with the performance of CFO's duties.
2. Compensation. In consideration for these services as Chief CFO
Officer, Sense agrees to pay the CFO a salary of $ 137,500 per annum through May
6, 2005. The current compensation for the CFO 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 amount 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 CFO 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 CFO or for senior management. The determination as
to the amounts of any awards available to the CFO under these programs
shall be reviewed at least annually by the Company's CFO Compensation
Committee to ensure that such amounts are competitive with awards
granted to similarly situated CFOs of publicly held companies
comparable to the Company.
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(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 CFO 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 $ 500.00 per month, or
lease.
5. The Board may at its discretion terminate the CFO's duties as Chief
CFO 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 at the level for the month in which his duties
were terminated under the terms of this paragraph^. 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
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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.
(a) Involuntary Termination Without Cause or Disability: In
the event that, during the term of this Agreement, the Corporation
terminates CFO'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 CFO shall be entitled to receive the
following payments and benefits:
(1) Severance (2x payment): The Corporation shall pay
to the CFO 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 CFO's
Base Compensation in effect on the date of the
employment termination; plus
(ii) Two hundred percent (200%) of the CFO's
annual incentive bonus earned on a quarterly basis as
of the date of the termination, assuming the CFO 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 CFO, the CFO 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 CFO's death.
During the Continuation Period, the CFO (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 CFO 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 CFO's compensation for purposes of such plans
shall be deemed to be equal to the CFO'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 CFO under the group life insurance
and health plans of the Corporation, the Corporation shall
provide the CFO (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 CFO by the Corporation, any contrary
provisions of such awards or the applicable plan
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notwithstanding. This Subsection shall not be construed to
require any member of the Corporation to grant any new awards
to the CFO 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 CFO when employment
terminates.
(4) No Mitigation: The CFO 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 CFO 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 CFO has been guilty of gross negligence or
gross misconduct, notice shall be provided to CFO in writing at the
address specified herein for communications, and CFO 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 CFO's duties or
authority so it can reasonably be found that the CFO is no longer performing as
the Chief CFO 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 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 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
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(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.
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, CFO's employment terminates in a Qualifying Termination,
the CFO shall be entitled to the payments specified in Subsections (b)
through (d):
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(b) Severance (2.99x payment): The Corporation shall pay to
the CFO 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 CFO'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 CFO, the CFO 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 CFO's death. During the Continuation Period, the
CFO (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 CFO's compensation for
purposes of such plans shall be deemed to be equal to the CFO'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 CFO under the group life insurance and health
plans of the Corporation, the Corporation shall provide the CFO (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 CFO's stock option agreements, CFO 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 CFO 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
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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
CFO shall be entitled to receive an additional payment (an "Excise Tax
Restoration Payment") in an amount that shall fund the payment by the
CFO 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
CFO provides written notice to the Corporation concerning the refusal
or failure, then the Corporation shall pay immediately to the CFO an
additional amount equal to 50% of the CFO's Base Compensation.
Notwithstanding any termination of CFO's employment hereunder
pursuant Paragraphs 5, 6 or 7 of this Agreement, CFO shall be entitled to full
indemnification from the Corporation to the fullest extent permitted by the
Florida Business Corporation Act.
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
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 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
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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.
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 CFO 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.
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19. Arbitration: Any dispute or controversy arising out of this
Agreement or the CFO'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 CFO
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 (CFO)
/s/ Xxxx Xxxxx Perler
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Witness Xxxx Xxxxx Perler (CEO)
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