Exhibit 10.2
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
This Amended and Restated
Employment Agreement , dated as of October 27, 2006
(this “Agreement”), is by and between SenseIt
Corp. , a Delaware corporation (the “Company”), and
Christopher Toffales , an individual residing at 21 Motts
Hollow Road, Port Jefferson, New York 11777
(“Executive”).
W I T N E S S E T
H:
WHEREAS , the Company and Executive are parties to an
Employment Agreement, dated as of May 9, 2006 (the “Prior
Agreement”), which was to become effective upon the
occurrence of certain specified events; and
WHEREAS, the parties desire to amend and restate the
Prior Agreement to reflect an employment arrangement pursuant to
which the Company shall employ Executive as the Company’s
president and chief executive officer and to set forth the terms
and conditions of such employment as now contemplated by this
Agreement; and
WHEREAS, simultaneous with the execution of this
Agreement, the Company has entered into a Class A Common Stock
Purchase Agreement (the “Isonics Purchase Agreement”)
with Isonics Corporation, a California corporation
(“Isonics”), pursuant to which Isonics shall purchase
specified shares of the capital stock of the Corporation in
exchange for cash and/or other consideration, including, but not
limited to, an assignment of all of Isonics rights, title and
interest in that certain Development and Licensing Agreement, dated
as of September 28, 2005, as amended (the “Lucent
Agreement”), between Isonics and Lucent Technologies Inc.
(“Lucent”).
NOW, THEREFORE
, in consideration of the foregoing
and of the mutual premises, covenants, representations and
warranties herein contained, and for other good and valuable
consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
1.
Termination of Prior Agreement . This Agreement
supersedes all prior employment agreements and arrangements between
the parties, including the Prior Agreement, in all respects and
each of such prior employment agreements and arrangements,
including the Prior Agreement, are terminated in their entirety and
hereby made null and void with no party to such prior employment
agreements and arrangements, including the Prior Agreement, having
any rights, obligations or liabilities under such prior employment
agreements and arrangements, including, but not limited to, the
Prior Agreement.
2.
Retention of Services; Term . Effective as of the date
(the “Effective Date”) on which there shall occur the
Initial Closing under the Isonics Purchase Agreement, the Company
retains the services of Executive, and Executive agrees to furnish
such services, upon the terms and conditions set forth in this
Agreement. Subject to earlier termination on the terms and
conditions provided in section 8 of this Agreement, and subject to
certain provisions of this Agreement which shall survive any
termination of the employment of Executive, the initial
term
(the
“Initial Term”) of the employment of Executive
under this Agreement is two years. The term of the employment
of Executive under this Agreement shall automatically be extended
for an unlimited number of additional two-year terms (each, a
“Renewal Term”); provided , however ,
that either the Board of Directors or Executive may elect not to
extend the term of the employment of Executive by the Company under
this Agreement for any future Renewal Term by giving notice to the
other party at least three months prior to the commencement of such
Renewal Term. (For the purposes of this Agreement, the
Initial Term and all effective Renewal Terms are referred to in
this Agreement collectively as the “Employment
Period.”)
3.
Duties and Extent of Services During Employment
Period .
(a)
During the Employment Period, Executive shall (i) serve as the
president and chief executive officer of the Company on the terms
and conditions set forth in this Agreement, (ii) report directly to
the board of directors of the Company (the “Board of
Directors”) and (iii) exercise such authority, perform such
executive duties and functions and discharge such executive
responsibilities as are reasonably associated with the
Executive’s positions, consistent with the responsibilities
of the president and/or chief executive officer of companies
comparable to the Company, commensurate with the authority vested
in the Executive pursuant to this Agreement and consistent with the
Bylaws of the Company, including, but not limited to, supervising
the day-to-day business operations and activities of the
Company.
(b)
Notwithstanding anything to the contrary contained in this
Agreement, in his capacity as the president and chief executive
officer of the Company, Executive may act on behalf of the Company
to the fullest extent permissible for a person acting in such
capacities under applicable law and without approval of the Board
of Directors or the consent of the holders of any class of
securities of the Company, except with respect to the following
items, which shall require:
(i)
the majority vote of the Board of Directors in order to:
(A)
enter into a transaction with an affiliate of Executive, the
Company or any affiliate of Executive or the Company;
(B)
on behalf of the Company, borrow funds over $250,000 on a secured
or unsecured basis in one or more transactions, from banks or any
other person or entity;
(C)
invest or reinvest funds of the Company in an amount greater than
$250,000 in any securities, whether equity or debt, public or
private, or any similar investments, or in any other
investment;
(D)
accept any capital investment in, or issue any additional
securities of, the Company in a transaction with any person or
entity;
(E)
on behalf of the Company, (1) make a general assignment for the
benefit of creditors, (2) consent to the appointment of a receiver,
liquidator, custodian, or similar official of all or substantially
all of its properties, (3) commence any action or proceeding or
take advantage of or file under any federal or state insolvency
statute, including, without limitation, the United States
Bankruptcy Code or any political subdivision thereof, seeking to
have an order for relief entered with respect to the Company or
seeking adjudication as a bankrupt or insolvent, or (4) seek
reorganization, arrangement, adjustment, liquidation, dissolution,
administration, a voluntary arrangement, or other relief with
respect to the Company or its debts;
(F)
declare or pay a dividend on any class of securities of the
Company; and
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(G)
Fail to terminate the Lucent Agreements for convenience under
Section 4.02(a) of the Lucent Agreement at a time when the Company
does not have sufficient funds readily available to meet the
Company’s obligations to Lucent under the Lucent Agreement,
other than such time when the Company does not have such funds
readily available due to a failure by Isonics to timely purchase
securities of the Company in accordance with the Isonics Purchase
Agreement; and
(ii)
the majority vote of the Board of Directors and, until the
termination of the Stockholders’ Agreement, dated of even
date as this Agreement (the “Stockholders’
Agreement”), among the Company, Executive (in his individual
capacity and not in his capacity as an officer, director and/or
employee of the Company), Isonics and others, an affirmative vote
of the holders of a majority of the outstanding shares of each
class of securities of the Company, including, but not limited to,
the Class A Common Stock and Class B Common Stock of the Company,
in order to:
(A)
merge, consolidate or dissolve the Company or sell all or
substantially all of its assets as part of a single transaction,
series of related transactions or plan;
(B)
mortgage, pledge, or grant a security interest in any property of
the Company not in the ordinary course of business; and
(C)
on behalf of the Company, lend money to or guaranty or become
surety for the obligations of any person or entity.
(c)
Executive shall be required to devote five business days per
calendar month to the Company’s affairs, which time shall be
documented in reasonable detail and provided to the Board of
Directors upon written request by the Board of Directors.
Executive shall use his discretion in determining whether it is
necessary to devote any additional time to the Company’s
affairs beyond the required five business days per calendar month;
provided , however , that Executive provision to the
Company of additional business days in excess of two additional
business days in any calendar month shall require the pre-approval
of the Board of Directors.
(d)
Notwithstanding anything to the contrary contained in this
Agreement, during the Employment Period, Executive may (i) engage,
directly or indirectly, in any other businesses and ventures,
including providing services and otherwise being affiliated with
(A) Irvine Sensors Corporation and (B) and other persons or
entities (and their respective affiliates) with whom Executive or
CTC Aero, LLC, a New York limited liability company in which
Executive (in his individual capacity and not in his capacity as an
officer, director and/or employee of the Company) is the sole
member (“CTC Aero”), has any equity interest or any
other business or financial relationship or arrangement as of the
date of the commencement of the Employment Period, (ii) become an
employee, officer or director of, or provide consulting or other
services for, any other person or entity that is not directly
competitive with the Company and (iii) devote time, attention and
energies to reasonable community activities and public affairs,
provided such community activities and public affairs efforts shall
not in any way conflict with the amount of time required to be
devoted to the Company under this Agreement. Neither the
Company nor any of the Company’s officers, directors,
employees and stockholders shall have any right, title or interest,
by virtue of this Agreement or otherwise, to share in any of the
businesses, ventures, equity interests, business or financial
relationships or arrangements, investments or activities to which
Executive may engage or participate in pursuant to the preceding
sentence or in any
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income or revenues derived from any
of such businesses, ventures, equity interests, business or
financial relationships or arrangements, investments or
activities.
(e)
From and after the later of the Effective Date or the date of the
occurrence of a Threshold Event (as such term is defined in the
Company’s Certificate of Incorporation, as amended through
the Effective Date) and, thereafter, through the earlier of the (i)
third anniversary of the termination of the Employment Period and
(ii) the date on which Executive no longer owns any equity
securities of the Company, in any and all elections of directors of
the Company (whether at a meeting or by written consent in lieu of
a meeting), the Company shall take all steps reasonably necessary
(including, but not limited to, solicitation of proxies or written
consents) to cause Executive to be elected as a director of the
Company.
4.
Remuneration .
(a)
During the Employment Period, the Company shall pay to Executive as
compensation for his services performed under this Agreement an
amount equal to $21,000.00 per calendar month (the “Base
Salary”), which amount shall be paid in a manner consistent
with the Company’s payroll practices for executive
officers. In the event that Executive shall devote more than
five business days in any calendar month to the Company’s
affairs under this Agreement, the Company shall pay to Executive an
amount equal to $4,000 per business day (such amount to be
pro-rated accordingly for any partial days of additional services
rendered, based on an eight-hour business day). To the extent
that the first and/or last months of the Employment Period consist
of less than a full calendar month, the compensation and required
number of days devoted to the Company’s affairs shall be
pro-rated accordingly for such first and last months.
(b)
Notwithstanding the provisions of the first sentence of paragraph
4(a), for each Renewal Term, the Base Salary shall be increased for
such Renewal Term, effective as of the first day of the Renewal
Term, to an amount equal to the product resulting from multiplying
(i) the Base Salary in effect immediately prior to such increase in
the Base Salary by (ii) a fraction, (A) the numerator of which
shall be the Consumer Price Index for the New York/New Jersey
Metropolitan Area (All Employees), as published by the U.S. Bureau
of Labor Statistics (the “CPI”) for the most recent
published period prior to the effective date of any such increase,
and (B) the denominator of which shall be the CPI for the most
recent published period prior to the date of this Agreement (with
respect to the first Renewal Period) or prior to commencement of
the immediately preceding Renewal Term (with respect to all other
Renewal Terms).
5.
Employee Benefits; Expenses .
(a)
During the term of this Agreement, the Company shall provide to
Executive the right to participate in the Company’s then
existing medical and dental insurance, any retirement plan,
profit-sharing plan, savings plan, stock option plan and other
employee benefit plans and policies on the same terms as are then
generally available to the Company’s executive
officers.
(b)
The Company shall reimburse Executive for all reasonable and
necessary expenses, and other disbursements incurred by Executive
for or on behalf of the Company in the performance
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of
Executive’s duties under this Agreement, upon submission of
appropriate documentation therefor, consistent with the
Company’s expense reimbursement policies.
(c)
During the term of this Agreement, the Company shall have in effect
at all times, at its expense and no cost to Executive, one or more
directors and officers liability indemnification insurance policies
(the “D&O Policies”) covering liabilities which may
have accrued or that will be incurred by the performance of
Executive’s services on behalf of the Company in the minimum
benefit amount of $5,000,000; provided , however ,
that, in the event that the Company shall obtain D&O Policies
for any director or officer of the Company with a benefit amount
greater than $5,000,000, the minimum benefit amount under this
paragraph 5(c) shall be increased to the benefit amount provided to
such other director and officer.
(d)
Subject to the provisions of paragraph 5(e), during the term of
this Agreement, the Company shall maintain, at its expense and at
no cost to Executive but subject to Executive being insurable, a
(i) life insurance policy (the “Life Insurance Policy”)
on the life of Executive providing for a minimum death benefit of
$5,000,000 (“Life Insurance Policy”) for which
Executive shall have the right to designate the beneficiary of the
Life Insurance Policy and (ii) long-term disability insurance
policy (the “Disability Insurance Policy”) for the
benefit of Executive and providing for a minimum net benefit of
$10,000 per month after taxes.
(e)
The Company’s obligation under paragraph 5(d) to maintain the
Life Insurance Policy and Disability Insurance Policy shall be
limited to an aggregate annual premium amount of $15,000.
Should the aggregate annual premium amount for the Life Insurance
Policy and Disability Insurance Policy exceed $15,000, Executive
shall have the option to either (i) consent to a reduction in the
benefit amount(s) of the Life Insurance Policy and/or Disability
Insurance Policy so as to cause the aggregate annual premium amount
for such policies to be no greater than $15,000 or (ii) tender to
the Company (no later than five days prior to the applicable
premium payment date(s) and, to the extent that premiums are
payable in i
