AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
THIS AMENDMENT is made as of the 23h day of October, 1998, between Xxxx X.
Xxxxxxxxx ("Executive") and Detection Systems, Inc. ("Company").
The parties entered into an Employment Agreement dated July 14, 1998 (the
"Employment Agreement") and a Non-Competition, Disability, and Retirement
Agreement dated the same date (the "Non-Competition Agreement"). Desiring in
this Amendment No. 1 to set forth certain agreed amendments to the Employment
Agreement and the Non-Competition Agreement, the parties hereby agree as
follows:
1. Amendment of Section 7(b) of Employment Agreement . The portion of
Section 7(b) of the Employment Agreement appearing before subsection 7(b)(1) is
hereby amended in its entirety to read as follows:
"(b) If:
(i) any Change in Control of the Company occurs while this
Agreement is effective, and
(ii) Executive gives notice to the Company or the Company
(acting upon a determination of its Board of Directors)
gives notice to Executive, in either case to the effect
that the six month period called for by this Section
7(b) shall begin to run, and
(iii)Executive's employment is terminated by Executive or
by the Company (other than for Executive's death or
disability) within six months after the date the notice
provided for in (ii) above is received (in Executive's
case the termination being effected by Executive giving
notice within that six month period, effective within
30 days after the notice is given, that his employment
is terminated), regardless the reason, if any, and
regardless which party gave the notice provided for in
(ii) above, then the Company shall pay, transfer, and
provide to Executive the following amounts, benefits,
and assets:"
2. Amendment of Section 4 of Non-Competition Agreement. The first paragraph
of Section 4 of the Non-Competition Agreement is hereby amended to read in its
entirety as follows:
"4. Consulting Services. If this Agreement becomes effective upon the
occurrence of any contingency set forth in Section 19 other than subsection
19(b) or (c), beginning upon the date of that occurrence Executive shall
hold himself available to the Company for providing consulting services to
it as an independent contractor at mutually agreeable times and places; and
the Company shall have the right to call upon Executive, so long as
Executive is able, for up to 8 days of consulting services per year to
provide information concerning matters that occurred, were developed, or
were determined while Executive was a full-time or part-time employee of
the Company. Unless otherwise agreed, those consulting services shall be
rendered at a place and time mutually agreed (but within 25 miles of
Executive's residence at the time) and shall be paid at the rate of $1,500
per day (or up to 100 hours of consulting services per year at an hourly
rate to be agreed upon). Any other consulting services shall be provided
if, as, and when the parties may agree."
3. Amendment of Section 9 of Non-Competition Agreement. The portion of
Section 9 of the Non-Competition Agreement appearing before subsection 9(b) is
hereby amended to read in its entirety as follows:
"9. Retirement. The Company hereby agrees that, if not ended sooner,
the Term of Service as used in the Employment Agreement shall end at the
close of business on December 31 of the year in which Executive attains the
age of 68, and beginning on the opening of business on January 1 of the
next year (and regardless whether the Term of Service ended prior to that
December 31), the Company will pay Executive retirement benefits for his
lifetime and for his spouse's lifetime, if his spouse survives him, as
follows:
(a) a retirement wage benefit initially equal to 20% of the base
salary rate being paid to Executive at the end of his full time employment
with the Company, increased for each year after the end of his full time
employment by any increase in the CPI (as defined below), except that the
retirement wage benefit shall be equal to 60% of that base salary rate at
the end of Executive's full time employment with the Company, plus CPI
increases, effective for any retirement year after a Change in Control and
after either Executive is no longer a full time employee of the Company or
Executive or the Company has given the notice provided for in Section
20(b)(ii) below, and except that the retirement wage benefit for his spouse
shall be 75% of the amount thus calculated for each year after the year of
Executive's death;"
[Note that Section 20(b)(ii) is added in Section 4 below.]
Also, a new subsection (d) shall be added to Section 9, which shall read in
its entirety as follows:
"(d) The retirement benefits provided under this Section 9 (and,
if applicable, Section 10) shall be paid as provided herein regardless
whether the Company has any claims against Executive for default under
this Agreement or for any other breach of duty or otherwise, and, except
as otherwise provided in Section 7 above, the Company shall pay those
retirement benefits as provided and must pursue remedies for any such
default or other breach of duty or other claim separately and
independently."
4. Amendment of Section 20 of Non-Competition Agreement. The portion of
Section 20(b) of the Non-Competition Agreement appearing before subsection
20(b)(1) is hereby amended in its entirety to read as follows:
"(b) If:
(i) any Change in Control of the Company occurs while this
Agreement is effective, and
(ii) Executive gives notice to the Company or the Company
(acting upon a determination of its Board of Directors)
gives notice to Executive, in either case to the effect
that the six month period called for by this Section
20(b) shall begin to run, and
(iii)Executive's consulting services are terminated by
Executive or by the Company (other than for Executive's
death or disability) within six months after the date
the notice provided for in (ii) above is received (in
Executive's case the termination being effected by
Executive giving notice within that six month period,
effective within 30 days after the notice is given,
that his consulting services are terminated to the
extent permitted under Section 4 above), regardless the
reason, if any, and regardless which party gave the
notice provided for in (ii) above, then the Company
shall pay, transfer, and provide to Executive the
following amounts, benefits, and assets:"
5. Continuation of Agreements The parties acknowledge and agree that, as
amended by this Amendment No. 1, the Employment Agreement and the
Non-Competition Agreement remain binding and in full force and effect between
the Company and Executive.
IN WITNESS WHEREOF the Company and Executive have executed this Amendment
No. 1 as of the date set forth above.
/s/Xxxx X. Xxxxxxxxx, Executive
DETECTION SYSTEMS, INC.
By: /s/Xxxxxx X. Xxxxx, Chairman of
the Compensation Committee of
the Board of Directors
