EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as
of this 1st day of January, 1999, by and between CLARION TECHNOLOGIES, INC., a
Delaware corporation ("Company") and XXXX X. XXXXXXXXXX ("Employee").
R E C I T A L S
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A. The Company is engaged in the business of custom injection molding,
assembly, tooling, product design, advanced engineering and program management
(the "Business").
B. The Company wishes to employ Employee, and Employee agrees to serve,
as Chairman of the Board and Chief Executive Officer of the Company subject to
the terms and conditions set forth below.
A G R E E M E N T
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NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed as follows:
1. RECITALS. The recitals set forth above shall constitute and shall be
deemed to be an integral part of this Agreement.
2. DUTIES. Employee shall serve in the capacity of Chairman of the
Board and Chief Executive Officer of the Company. Employee's principal duties
and responsibilities shall consist of primary responsibility for the general and
active supervision and management of the business activities and functions of
the Company and its subordinate officers, agents and employees. Employee shall
perform such other services and duties as may from time to time be assigned to
Employee by the Company's Board of Directors provided that such other services
and duties are not inconsistent with any other term of this Agreement. Except
during vacation periods or in accordance with the Company's personnel policies
covering executive leaves and reasonable periods of illness or other
incapacitation, Employee shall devote his services to the Company's Business and
interests in a manner consistent with Employee's title and office and the
Company's needs for his services. Employee agrees to perform his duties pursuant
to this Agreement in good faith and in a manner which he honestly believes to be
in the best interests of the Company, and with such care, including reasonable
inquiry, as an ordinary prudent person in a like position would use under
similar circumstances. Employee agrees to observe a duty of loyalty to the
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Company placing the interests of the Company ahead of his own. Such duties shall
be rendered at such place or places as the Company shall require in accordance
with the best interests, needs, business and opportunities of the Company.
However, in no event, shall the Company require Employee to move his principal
residence. Employee shall at all times be subject to and shall observe and carry
out such reasonable rules, regulations, policies, directions and restrictions as
may be established from time to time by the Company.
3. LIMITATIONS ON OTHER EMPLOYMENT. Throughout the Term (as defined
below) of Employee's employment under this Agreement, Employee shall not enter
into the services of or be employed in any capacity or for any purposes
whatsoever, whether directly or indirectly, by any person, firm, corporation or
entity other than the Company, and will not, during said period of time, be
engaged in any business, enterprise or undertaking other than employment by the
Company except for such other activities that do not detract from the full
discharge of Employee's duties hereunder or as otherwise consented to in writing
by the Company.
4. COMPENSATION AND BENEFITS.
4.1 BASE SALARY. In consideration of Employee's performance of all of
his duties and responsibilities hereunder and his observance of all of the
covenants, conditions and restrictions contained herein, Employee shall be
entitled to receive a base salary of Ten Thousand Dollars ($10,000) per month
("Base Salary"), payable in weekly or other periodic installments in accordance
with the Company's payroll procedures in effect from time to time. The Base
Salary shall be paid to Employee retroactive to the date that Employee was
appointed as Chairman of the Company's Board of Directors (i.e., November 11,
1998). The Base Salary has been expressed in terms of a gross amount, and the
Company is or may be required to withhold from such gross amount deductions in
respect of federal, state or local income taxes, FICA and the like. Employee's
Base Salary for any renewal term hereof shall be determined by the Compensation
Committee of the Company's Board of Directors and shall be based on the
performance of the Company.
4.2 OPTIONS. Upon the commencement of Employee's employment term,
Employee shall be granted options to purchase an aggregate of Five Hundred
Thousand (500,000) shares of the Company's $.001 par value common stock ("Common
Stock"), at an exercise price of One Dollar ($1.00) per share (the "Options").
4.3 MEDICAL AND DENTAL INSURANCE, VACATION. Throughout the term of
Employee's employment under this Agreement, Employee shall be entitled to
receive Company paid medical insurance and dental insurance. Employee shall be
entitled to three weeks of paid vacation (to be taken at such time or times as
is reasonably convenient to the Company).
4.4 EXPENSES. Employee may incur reasonable expenses in performing his
services hereunder which shall be reimbursed by the Company, in accordance with
the Company's standard expense reimbursement policies for approved expenses,
upon presentation by Employee of supporting documentation (e.g., receipts and
vouchers) for such expenditures which meet IRS guidelines.
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4.5 LIFE AND DISABILITY INSURANCE AND 401(K) PLAN. Employee shall also
be entitled to Short Term Disability, Long Term Disability and Life Insurance
and a 401(k) plan, subject to the review and approval of the Board of Directors.
4.6 OTHER FRINGE BENEFITS. Employee shall also be entitled to all other
employee benefits generally provided by the Company.
5. TERM OF EMPLOYMENT. The Company hereby employs Employee, and
Employee hereby accepts employment with the Company, for a period of two (2)
years terminating on December 31, 2000 (the "Term"); provided that this
Agreement shall be automatically renewed for successive one (1) year terms
unless either party elects not to renew this Agreement by delivering written
notice of its election to the other party no later than sixty (60) days prior to
the end of the current term. Notwithstanding anything in this Section 5 to the
contrary, this Agreement may be terminated at any time in accordance with
Section 6.
6. TERMINATION.
6.1 BY THE COMPANY FOR CAUSE. Employee's employment under this
Agreement may be terminated immediately by the Company upon the occurrence of
one or more of the following causes:
A. Employee's conviction of any criminal act involving moral
turpitude or which otherwise tends to bring disrepute upon the Company;
B. The commission by Employee of any act of dishonesty in
connection with the performance of any of Employee's duties hereunder
(including, but not limited to falsification of Company records, making false
statements of material facts to third parties regarding the Company's Business,
fraud, and misappropriation or embezzlement against the Company or any of its
customers or suppliers);
C. Any willful material breach by Employee of any of the covenants,
conditions or restrictions set forth in this Agreement, including, but not
limited to, the restrictions set forth in Sections 7, 8 or 9 of this Agreement;
D. The material failure to perform Employee's duties, and/or to
observe the written rules, regulations, policies, directions or restrictions
adopted by the Company from time to time to the extent such rules, regulations,
policies, directions or restrictions are not inconsistent with the terms of this
Agreement, provided that such failure shall not have been cured within ten (10)
days after Employee is given specific notice and an opportunity to cure such
failure;
E. If Employee dies or becomes disabled (Employee shall be deemed
"disabled" for purposes of this Agreement if he is unable, by reason of illness,
accident, or other physical or mental incapacity, to perform substantially all
of his regular duties for a continuous period of one hundred twenty (120) days);
and F. Repeated abuse of alcohol or illegal narcotics which results in the
failure of Employee to perform his duties hereunder.
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6.2 BY THE COMPANY WITHOUT CAUSE. The Company may terminate Employee's
employment hereunder on sixty (60) days written notice to Employee.
6.3 BY EMPLOYEE UPON BREACH BY THE COMPANY. Upon a breach by the
Company of the terms of this Agreement, Employee shall have the right to
terminate his employment hereunder, provided that the Company has first been
afforded thirty (30) days written notice and an opportunity to cure such breach.
6.4 BY EMPLOYEE WITHOUT CAUSE. Employee may voluntarily terminate his
employment hereunder on sixty (60) days written notice to the Company.
6.5 EFFECT OF TERMINATION. Upon termination of Employee's employment by
the Company under Section 6.1, except for a termination resulting from the
disability of Employee, Employee shall be entitled to all compensation accrued
but unpaid to the date of termination, but Employee shall have no further rights
to any Base Salary, benefits or other compensation of any kind or nature.
Upon termination of Employee's employment by the Company under
Section 6.2, by the Company under Section 6.1 as a result of the disability of
Employee or by Employee under Section 6.3, Employee shall be entitled to
continue to receive all base salary for a period of six (6) months following
termination and an amount each month equal to the amount which the Company is
then paying for health insurance for Employee on the same dates that he would
have received such Base Salary had such termination of employment not occurred,
less any sums which Employee receives from disability insurance maintained by
the Company.
Upon termination of Employee's employment pursuant to Section 6.4,
Employee shall be entitled to continue to receive one-half (1/2) of the Base
Salary for a period of six (6) months following termination on the same dates
that he would have received such Base Salary had such termination of employment
not occurred.
Upon any termination of Employee's employment pursuant to Section
6.1, 6.2, 6.3 or 6.4, Employee shall be entitled to compensation for any accrued
and unused vacation hours as provided by applicable law and to any rights under
COBRA or other comparable rights as provided by law.
7. DISCLOSURE OR USE OF CONFIDENTIAL INFORMATION.
7.1 CONFIDENTIALITY AND APPROPRIATION OF CONFIDENTIAL INFORMATION.
During the term of Employee's employment under this Agreement and thereafter,
Employee will keep confidential and will not directly or indirectly reveal,
divulge or make known in any manner to any person or entity (except as required
by applicable law or in connection with the performance of his duties and
responsibilities as an employee hereunder) nor use or otherwise appropriate for
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Employee's own benefit, or on behalf of any other person or entity by whom
Employee might subsequently be employed or otherwise associated or affiliated
with, any Confidential Information (as hereinafter defined). Confidential
Information shall include information (not readily compiled from publicly
available sources) which is made available to Employee or obtained by Employee
during the course of his employment relating or pertaining to the Company's
business and franchise operations, including trade secrets, business and
financial information, operations information, projects, products, customers,
supplier names, addresses and pricing policies, company pricing policies,
computer programs and software or unpublished know-how, whether patented or
unpatented. Employee agrees to cooperate with the Company to maintain the
secrecy of and limit the use of such Confidential Information. Employee further
agrees that he is under no obligation to any former employer which is in any way
inconsistent with this Agreement or which imposes any restriction on the
Company.
7.2 PREVENTION OF UNAUTHORIZED RELEASE OF COMPANY INFORMATION. Employee
agrees to promptly advise the Company of any knowledge which he may have of any
unauthorized release or use of any Confidential Information, and shall take
reasonable measures to prevent unauthorized persons or entities from having
access to, obtaining or being furnished with any Confidential Information.
8. PROPRIETARY RIGHTS AND MATERIALS. All documents, memoranda, reports,
notebooks, correspondence, files, lists and other records, and the like,
designs, drawings, specifications, computer software and computer equipment,
computer printouts, computer disks, and all photocopies or other reproductions
thereof, affecting or relating to the business of the Company, which Employee
shall prepare, use, construct, observe, possess or control ("Company
Materials"), shall be and remain the sole property of the Company. Upon
termination of this Agreement, Employee shall deliver promptly to the Company
all such Company Materials.
9. INVENTIONS AND DISCOVERIES. Employee hereby assigns to the Company
all of Employee's rights, title and interest in and to all inventions,
discoveries, processes, standards, procedures, designs and other intellectual
property (hereinafter collectively referred to as the "Inventions"), and all
improvements on existing Inventions made or discovered by Employee during the
Term of Employee's employment hereunder. Promptly upon the making of any such
Invention or improvement thereon, Employee shall disclose the same to Company
and shall execute and deliver to Company such reasonable documents as Company
may request to confirm the assignment of Employee's rights therein and, if
requested by Company, shall assist Company in applying for and prosecuting any
patents which may be available in respect thereof. Inventions originated by
Employee shall be considered by the Board of Director's Compensation Committee
in determining salary and incentive compensation.
10. REMEDIES.
10.1 INJUNCTIVE RELIEF. The Company and Employee recognize and
acknowledge that Employee is employed under this Agreement as an employee in a
position where Employee will be rendering personal services of a special,
unique, unusual and extraordinary character requiring extraordinary ingenuity
and effort by Employee. Employee hereby acknowledges that compliance with the
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provisions of Sections 7, 8 and 9 of this Agreement (which shall survive the
termination of this Agreement in all respects) is necessary to protect the
goodwill and other proprietary interests of the Company and that the Company
would suffer continuing and irreparable injury which injury is not adequately
compensable in monetary damages or at law. Accordingly Employee agrees that the
Company, its successors and assigns may obtain injunctive relief against the
breach or threatened breach of the foregoing provisions, in addition to any
other legal remedies which may be available to it under this Agreement
(including money damages), and that any such breach or threatened breach may be
preliminarily enjoined by the Company without bond.
10.2 OTHER REMEDIES. However, no remedy conferred by any of the
specific provisions of this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in addition
to every other remedy given hereunder or now or hereafter existing at law or in
equity or by statute or otherwise. The election of any one or more remedies by
the Company shall not constitute a waiver of the right to pursue other available
remedies.
10.3 ACCOUNTING FOR PROFITS. Employee covenants and agrees that if he
violates the provisions of Sections 7, 8 or 9, the Company shall be entitled to
an accounting and repayment of all profits, compensation, commissions,
remuneration or other benefits that Employee has realized and may realize as a
result of or in connection with any such violation. These remedies shall be in
addition and not in limitation of any injunctive relief or other rights or
remedies to which the Company is or may be entitled at law, in equity or under
this Agreement.
10.4 ATTORNEYS' FEES. If litigation arises under this Agreement between
Company and Employee, the prevailing party in such litigation shall be entitled
to recover its reasonable attorneys' and paralegal's fees, court costs and
out-of-pocket litigation expenses from the non-prevailing party.
10.5 ARBITRATION. Any controversy or claim arising out of or relating
to this Agreement, except Sections 7, 8 and 9, shall be resolved by arbitration
in accordance with the Commercial Rules of the American Arbitration Association
then in effect. The decision of the arbitrator shall be final and binding upon
the parties hereto, and judgment upon the award rendered by the arbitrator may
be entered in any court of competent jurisdiction. There shall be a single
arbitrator, the situs of the arbitration shall be in the County of Xxxx, State
of Illinois, and the prevailing party (or parties) shall also recover from the
losing party (or parties) reasonable attorneys' fees and the costs of
arbitration as part of the judgment rendered.
10.6 CUMULATIVE REMEDIES. The remedies described in this Section 10 are
in addition to and not in substitution for any other remedies available under
the law.
11. SEVERABILITY. It is the desire of the parties that the provisions
and restrictions of this Agreement be enforced to the fullest extent permissible
under the laws and public policies in each jurisdiction in which enforcement
might be sought. Thus, whenever possible, each provision or restriction of this
Agreement shall be interpreted in such manner as to be effective under
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applicable law. If any section or portion of this Agreement or the application
thereof to any party or circumstance shall be prohibited by or invalid under
applicable law, the invalidity or unenforceability of that section or portion of
this Agreement shall not invalidate any other section or portion, nor shall it
affect the application of such section or portion to other parties or other
circumstances. If in any judicial proceeding, a court shall refuse to enforce
this Agreement, whether because the time limit is too long or because the
restrictions contained herein are more extensive (whether as to geographic area,
scope of business or otherwise) than is necessary to protect the business and
goodwill of the Company, it is expressly understood and agreed between the
parties hereto that this Agreement is deemed modified to the extent necessary to
permit this Agreement to be enforced in any such proceedings.
12. CONTINUING OBLIGATIONS. Employee's obligations pursuant to Sections
7 and 8 of this Agreement and the rights and remedies of the Company hereunder
shall continue in effect beyond the term of this Agreement.
13. WAIVER OR MODIFICATION. No waiver or modification of this Agreement
or of any covenant, condition, or limitation herein contained shall be valid
unless in writing and duly executed by the party to be charged therewith.
Furthermore, no evidence of any modification or waiver shall be offered or
received as evidence in any litigation between the parties arising out of or
affecting this Agreement or the rights or obligations of any party hereunder,
unless such waiver or modification is in writing, duly executed as aforesaid.
The provisions of this Section may not be waived except as herein set forth.
14. ENTIRE AGREEMENT. This written Agreement contains the sole and
entire agreement between the parties as to the matters contained herein, and
supersedes any and all other agreements between them. The parties acknowledge
and agree that neither of them has made any representation with respect to such
matters of this Agreement or any representations except as are specifically set
forth herein, and each party acknowledges that he or it has relied on his or its
own judgment in entering into this Agreement. The parties further acknowledge
that statements or representations that may have been heretofore made by either
of them to the other are void and of no effect and that neither of them has
relied thereon in connection with his or its dealing with the other.
15. CHOICE OF LAW. This Agreement and the performance hereunder and all
suits and special proceedings hereunder shall be construed in accordance with
the laws of the State of Illinois.
16. BINDING EFFECT OF AGREEMENT; ASSIGNMENT; MERGER; DISSOLUTION. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their heirs, successors, assigns and legal representatives. This Agreement
shall be construed as a contract for personal services by Employee to the
Company and shall not be assignable by Employee. In the event of the sale,
merger or consolidation of the Company, Employee agrees that the Company may
assign its rights and obligations hereunder to its successor or purchaser.
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17. NOTICES. All notices, requests, demands and other communications
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given when delivered by hand or when mailed by certified registered
mail, return receipt requested, with postage prepaid to their current address or
to such other address as they request in writing.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first written above.
"Company"
CLARION TECHNOLOGIES, INC.,
a Delaware corporation
By:_________________________________________
Xxxxxx X. Xxxxxx, Chief Financial Officer
"Employee"
____________________________________________
XXXX X. XXXXXXXXXX
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