AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
This AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT (the "Amendment"), is
entered into as of March 31, 1999, by and between CLARION TECHNOLOGIES, INC., a
Delaware corporation (the "Company"), and R. XXXXXXX XXXX, JR. ("Employee"), to
amend that certain Employment Agreement, dated April 1, 1998 (the "Employment
Agreement"), by and between CLARION HOUSE, INC., a Nevada corporation (and
predecessor of the Company) and Employee.
R E C I T A L S
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A. Pursuant to Section 6.4 of the Employment Agreement, Employee agreed
that he would not, at any time within the three-year period immediately
following the termination of his employment with the Company, directly or
indirectly engage in any activity which is directly competitive with any
activity now engaged in by the Company.
B. The Company and Employee desire to amend Sections 6.1 and 6.4 of the
Employment Agreement as specified herein.
C. The Company and Employee further desire to amend Section 4.1 of the
Employment Agreement regarding the time at which Employee's salary shall
increase to Two Hundred Ten Thousand Dollars ($210,000) per year, with the
balance of the compensation, including incentive compensation, provisions to
remain in full force and effect.
A G R E E M E N T
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1. Section 4.1 of the Employment Agreement is hereby amended to read as
follows:
4.1 SALARY. In consideration of Employee's performance of his duties
and responsibilities hereunder and his observance of the covenants, conditions
and restrictions contained herein, Employee shall be entitled to receive a
salary of One Hundred Fifty Thousand Dollars ($150,000) per annum during the
period from April 1, 1998 to March 31, 1999 and thereafter increasing to Two
Hundred Ten Thousand Dollars ($210,000) during the Term hereof, payable in
weekly or other periodic installments in accordance with the Company's payroll
procedures in effect from time to time. This 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.
2. Section 6.1 of the Employment Agreement is hereby amended to read as
follows:
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, and not otherwise:
6.1.1 Employee's conviction of a felony pertaining to the
Company's Business;
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6.1.2 The commission by Employee of any act of willful, material
dishonesty in connection with the performance of any of Employee's duties
hereunder (including, but not limited to falsification of Company records,
willfully making false statements of material facts to third parties regarding
the Company's Business, and misappropriation or embezzlement of funds against
the Company or any of its customers or suppliers);
6.1.3 any willful material breach by Employee of any of its
covenants, conditions or restrictions set forth in Sections 7, 8 or 9 or this
Agreement; and
6.1.4 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).
Employee shall have the right to notify the Company in writing within 60 days
after termination on any of the above grounds that Employee intends to contest
such termination. In such case, the Company agrees to continue to pay to
Employee, retroactive to the date of termination, the salary specified in
Section 4.1 at the level Employee was receiving on the date of termination until
the earlier of (a) twelve (12) months after the date of termination or (b) the
date upon which the validity of the termination is finally determined by a court
of law or by an arbitrator as provided in Section 10.5 hereof. Such payments
shall be made promptly following the date upon which Employee gives the notice
referred to above and shall continue to be made in the manner and with the
frequency in which Employee received such amounts prior to termination. Employee
agrees, if it delivers the notice referred to above, to contest such termination
with due diligence until final resolution and further agrees, if it is
determined that the termination was valid, to repay the Company for all amounts
received after termination.
3. Section 6.4 of the Employment Agreement is hereby amended to read as
follows:
6.4 COVENANT NOT TO COMPETE. Provided that the Company has paid
Employee the salary and Bonus (if earned) specified in Section 4 hereof in full
during Employee's employment hereunder, and has complied with such Section in
all other material respects, Employee agrees that he will not at any time within
the one-year period immediately following the termination of Employee's
employment hereunder (the "Non-Compete Term"), directly or indirectly engage in,
or have any interest in, any person, firm, corporation or business (whether as
an employee, officer, director, agent, secretary, holder, creditor, consultant
or otherwise) that engages in any activity which is directly competitive with
any activity now engaged in by the Company (or any successor or successors of
the Company) so long as the Company (or any successor) shall engage in this
activity. Stock interest of under ten percent (10%) in a public corporation
shall not be deemed to violate this Agreement. In the event of any failure of
the Company to pay Employee's salary and Bonus (if earned) and otherwise comply
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with Section 4 in all material respects during the term hereof, Employee shall
not be bound by the non-compete covenant specified in the first sentence of this
Section until such default is cured. This Section shall not apply to limit in
any way Employee's damages in the event of any breach of this Agreement by the
Company. As consideration for Employee's covenants under this Section 6.4, the
Company agrees to pay Employee, during the Non-Compete Term, (a) the salary
specified in Section 4.1 hereof, and (b) if Employee was receiving the Bonus at
the time of the termination of Employee's employment hereunder, the Bonus
specified in Section 4.2 hereof. These amounts (the "Non-Compete Payment") shall
be paid to Employee during the Non-Compete Term in the same manner and frequency
as Employee's salary and bonus was paid during Employee's employment. The
parties agree that the Non-Compete Payment provided for hereby is in
consideration for Employee's agreement to refrain from competing with Employer
as provided above, and therefore Employer's obligation to make such Non-Compete
Payment during the Non-Compete Term shall be absolute and unconditional, and
such amounts must be paid regardless of any claim or dispute which may arise
between Employer and Employee under the Employment Agreement or otherwise, so
long as Employee complies with the non-compete covenant set forth above. The
Non-Compete Payment shall be paid if Employee terminates his employment
hereunder at any time during the term of his employment hereunder, the parties
agreeing that the Company may not terminate Employee's employment hereunder for
any reason whatsoever, other than as specified in Section 6.1 hereof. Neither
party shall have any obligation under this Section 6.4 in the event of
termination pursuant to Section 6.1.
6.4.1 CERTAIN CORPORATE TRANSACTIONS. As a condition to any
merger, consolidation or sale of all or substantially all of the Company's
assets, the Company will require the surviving, resulting or transferee entity
to assume the obligations of the Company under this Employment Agreement.
4. Section 10.5 of the Employment Agreement is hereby amended to read
as follows:
10.5 ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement, except Sections 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.
5. Other than as specifically provided in this Amendment, all other
provisions of the Employment Agreement shall remain in full force and effect,
the Employment Agreement as amended by this Amendment No. 1 constituting the
sole and entire agreement between the parties as to the matters contained
herein, and superseding any and all conversations, letters and other
communications which may have been disseminated by the parties relating to the
subject matter hereof, all of which are void and of no effect.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
date first above written.
"COMPANY"
CLARION TECHNOLOGIES, INC.,
a Delaware corporation
By:___________________________________________
Xxxx X. Xxxxxxxxxx, Chief Executive Officer
"EMPLOYEE"
______________________________________________
R. XXXXXXX XXXX, JR.
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