EXHIBIT 10.13
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "AGREEMENT") is made in Medina, Ohio and entered
into by and between Corrpro Companies, Inc., an Ohio corporation (the "COMPANY")
and Xxxxxx X. Xxxxx ("EXECUTIVE") effective as of May 3, 2004.
WITNESSETH:
In consideration of the recitals, the mutual covenants and agreements contained
in this Agreement, and other good and valuable consideration, the parties agree
as follows
SECTION 1 - TERM AND DUTIES
1.1 TERM. The Company shall employ Executive, subject to the provisions
of this Agreement, effective May 3, 2004 and ending on April 30, 2006, unless
Executive's employment terminates earlier as provided herein.
1.2 EXTENDED TERM. Beginning on May 1, 2005, this Agreement shall be
automatically extended on each May 1 for one additional year, unless either
party provides written notice to the other party at least 30 days prior to the
applicable May 1 of any year that such party does not consent to such extension;
therefore, unless such notice is timely given, on May 1, 2005, the term shall be
extended to April 30, 2007. In the event:
(a) the Company provides written notice to Executive that it does
not consent to an extension of the Agreement, the Company may remove
Executive from Executive's position and notify Executive that the Company
will require specified limited services, or no further services, from
Executive for the remainder of the term of this Agreement, provided that
the Company shall continue to pay compensation and provide benefits (as
described in Section 2 below) to Executive until the expiration of the
term of this Agreement. If Executive (i) is employed by the Company on the
date the term of the Agreement expires; (ii) is terminated by the Company
without Good Cause (as defined in Section 7.1) prior to the date the term
of the Agreement expires; or (iii) voluntarily resigns with the written
consent of the Company prior to the date that the term of the Agreement
expires; notice from the Company that it does not consent to an extension
of the Agreement shall be deemed a termination of Executive without Good
Cause (as defined Section 7.1 below) and shall entitle Executive to
severance and benefits for a period of one (1) year following the
expiration of the term of this Agreement, payable in accordance with the
provisions of Sections 6.1(b) and 6.1(c) below that would apply if
Executive's employment was terminated on or before Xxxxx 00, 0000,
(x) Executive provides written notice to the Company that he does
not consent to an extension of the Agreement, the Company may remove
Executive from Executive's position and notify Executive that the Company
will require specified limited services, or no further services, from
Executive for the remainder of the term of this Agreement, provided that
the Company shall continue to pay compensation and provide benefits (as
described in Section 2 below) to Executive until the expiration of the
term of this Agreement. Removal of Executive from his position by the
Company and any limitation on Executive's service in accordance with the
preceding sentence shall not be deemed a termination of Executive by the
Company without Good Cause and shall not entitle Executive to any of the
benefits described in Section 6.1 below.
1.3 DUTIES. Except as otherwise provided by Section 1.4 below, during
Executive's employment pursuant to this Agreement, Executive shall serve as
Chief Executive Officer ("CEO") and
President of the Company. In his capacity as CEO, Executive will retain the
right to approve, select and/or hire employees of the Company plus have the
authority to determine and implement programs and establish direction for the
Company and shall serve at the direction of the Board of Directors of the
Company (the "BOARD") and shall be subject to the policies and procedures
adopted by the Company from time to time. In addition to the duties and
responsibilities as are customarily assigned to individuals serving in the
capacity of CEO and President and such other duties as may be specified by the
Board from time to time, Executive's duties shall also include maintaining a
regular presence in the Company's Medina, Ohio office. So long as Executive
serves as CEO, the Company shall nominate Executive to serve as a director on
the Board and shall use its best efforts to facilitate Executive's election.
Notwithstanding the foregoing, the employment of any senior level executives who
directly report to Executive shall be subject to the approval of the Board.
Executive agrees to serve as an officer or director of such of the Company's
subsidiaries or affiliates as the Company may reasonably request. Executive
agrees to resign as a director of the Company upon termination of Executive's
employment with the Company under this Agreement for any reason.
1.4 CHANGES IN STATUS. The Company agrees that it will not, without
Executive's consent, (i) assign to Executive duties materially inconsistent with
or which materially diminish Executive's current positions, authority, duties,
responsibilities and status with the Company; or (ii) materially change
Executive's title as currently in effect. Except as so limited, the powers and
duties of Executive are to be more specifically determined and set by the
Company from time to time. Notwithstanding the foregoing, in the event the
Company becomes a subsidiary of another entity, so long as Executive retains the
title of President and his duties remain customary for and consistent with those
assigned to the President of a subsidiary in a larger group of entities and the
Company remains in compliance with the other terms of this Agreement (including,
without limitation, the provisions of Section 2), then (i) the Company shall not
have been deemed to have assigned Executive duties materially inconsistent with
or which materially diminish Executive's current positions, authority, duties,
responsibilities and status with the Company and (ii) Executive's title as
currently in effect shall not be deemed to have been materially changed, even if
Executive no longer has the title of CEO or serves as a director on the Board of
the Company.
SECTION 2 - COMPENSATION AND BENEFITS
2.1 BASE SALARY. During Executive's employment pursuant to this
Agreement, Executive shall receive an annual base salary of two hundred eighty
five thousand U.S. Dollars (U.S. $285,000) as compensation for Executive's
services to the Company (the "BASE COMPENSATION"), such compensation to be
payable in regular installments in accordance with the Company's policy for
salaried employees.
2.2 SALARY ADJUSTMENTS. Effective as of May 1 of each fiscal year of the
Company during Executive's employment pursuant to this Agreement, the Base
Compensation shall be set by the Board (or its designated committee). In the
event the Base Compensation is adjusted, such adjusted Base Compensation shall
be payable to Executive under this Agreement for that fiscal year, provided that
no downward adjustment shall be made without Executive's consent.
2.3 VACATION. Executive shall be entitled to four (4) weeks of paid
vacation each year of this Agreement to be taken in accordance with the
Company's policy then in effect.
2.4 ANNUAL BONUS PLAN. For each fiscal year ending during the term of
this Agreement, Executive shall be eligible to receive an annual incentive bonus
with a target payout of 50% of his Base Compensation for such fiscal year (the
"TARGET ANNUAL BONUS"), payable after the end of each fiscal year after the
completion of the annual audit of the Company with respect to such fiscal year,
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provided that the performance objectives established by the Board for both the
Company and Executive are attained. Executive's Target Annual Bonus will be
pro-rated based on the number of full months, if less than twelve (12), that
Executive is employed in the applicable fiscal year. The Board may amend or
adjust its performance objectives to the extent reasonably necessary or
appropriate to take into account the impact of (i) a material corporate event,
such as the consummation of an acquisition, or (ii) a material one-time event,
such as a restructuring charge or refinancing; and provided further, that any
such amendment or adjustment shall be consistent with the spirit and intent of
the earlier bonus as to manner of computation and opportunity for substantially
similar amounts. After the first year of this Agreement, the Board may review
the bonus program on an annual basis to ensure that it continues to provide
appropriate compensation for performance, and to take into account any
significant change in circumstances or the structure of the Company.
2.5 AUTOMOBILE ALLOWANCE. The Company will provide Executive with an
automobile allowance of $700 per month to cover the monthly costs associated
with leasing or purchasing an automobile and the operating costs relating to
such automobile (including insurance, maintenance, toll charges, and rental of
garage space). Executive may also use the automobile for reasonable personal
use.
2.6 TEMPORARY LIVING ALLOWANCE. During Executive's first sixty (60) days
of employment pursuant to this Agreement, the Company will directly pay or, upon
presentation of appropriate documentation, will reimburse Executive for
reasonable living expenses in connection with maintaining a residence in the
Medina, Ohio area (including, but not limited to, ordinary and necessary
expenses for meals and the cost of suitable temporary housing reasonably
necessary to permit Executive to perform services for the Company in the Medina,
Ohio area).
2.7 TRAVEL TO MEDINA, OHIO. During Executive's employment pursuant to
this Agreement, the Company will directly pay or, upon presentation of
appropriate documentation, will reimburse Executive up to $20,000 per fiscal
year for his reasonable travel expenses (other than automobile rental expenses
and/or costs associated with other ground transportation, except as otherwise
provided by Section 2.5, and other than meals and lodging, except as otherwise
provided by Section 2.6 above) in connection with travel from his home in the
Houston, Texas area to the Medina, Ohio area in order to maintain a regular
presence in the Company's Medina, Ohio office as required by Section 1.3 above.
After the first year of this Agreement, the Board may review the amount
allocated for travel by Executive to Medina, Ohio set forth in this Section 2.7
on an annual basis to ensure that it is sufficient to enable Executive to
maintain a regular presence in the Company's Medina, Ohio office, and to take
into account any significant change in circumstances or the structure of the
Company.
2.8 BENEFIT PLANS. During Executive's employment pursuant to this
Agreement, subject to eligibility and applicable employee contributions, and
except as otherwise expressly provided in this Agreement, Executive shall be
entitled to participate on substantially the same terms as other senior level
executives of the Company in all employee benefit and executive benefit plans,
pension plans, medical benefit plans, group life insurance plans,
hospitalization plans, or other employee welfare plans that the Company may
adopt from time to time during Executive's employment pursuant to this
Agreement, and as such plans may be modified, amended, terminated, or replaced
from time to time. In addition, Executive shall receive such other compensation
as the Board (or a committee thereof designated by the Board) may from time to
time determine to pay Executive whether in the form of bonuses, stock options,
incentive compensation or otherwise.
2.9 EXPENSE REIMBURSEMENTS. The Company shall reimburse, in accordance
with Company policy, Executive's ordinary and reasonable business expenses,
including professional dues, expenses, and continuing education expenses for
maintaining certifications, incurred in furtherance of Executive's performance
of Executive's duties under this Agreement.
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2.10 FRINGE BENEFITS. During his employment pursuant to this Agreement,
and except as otherwise provided in this Agreement, Executive shall be entitled
to participate on substantially the same terms and conditions in the Company
sponsored fringe benefits generally provided to similarly situated personnel,
such as sick pay.
2.11 OPTIONS. Within the first six (6) months of this Agreement and
subject to approval of the Company's shareholders, the Company will issue to
Executive an option to purchase a minimum of 200,000 shares of common stock of
the Company with an exercise price equal to the fair market value of the stock
on the Determination Date and an option to purchase a minimum of 200,000 shares
of common stock of the Company with an exercise price equal to 200% of the fair
market value of the stock on the Determination Date; for purposes of this
Agreement, "Determination Date" shall mean the 90th day after the consummation
of the issuance and sale of the redeemable preferred stock of the Company to
CorrPro Investments, LLC, a Delaware limited liability company (the "CLOSING")
and "fair market value of the stock on the Determination Date" shall mean that
value of one share of the common stock of the Company calculated on the 90th day
after the Closing using the volume weighted average prices on the American Stock
Exchange of such stock for the 30 day period prior to the 90th day after the
Closing, or, if such average is not available, using the average of the closing
sale prices for such stock for the 30 day period prior to the 90th day after the
Closing. Any options granted in accordance with this Section 2.11 shall be
subject to the terms and conditions of the applicable plan and corresponding
option agreement under which such options are granted and shall include the
following terms: (i) vesting in five equal installments over five years
beginning on the date of grant of such option (subject to early termination or
forfeiture in accordance with the terms of the applicable plan); (ii) a 10 year
term (subject to early termination or forfeiture in accordance with the terms of
the applicable plan); (iii) immediate forfeiture of any options (both vested and
unvested) granted in accordance with this Section 2.11 in the event Executive
violates any of the provisions of Section 4 below; and (iv) in the event of a
"change of control" (as defined in the applicable plan), such options shall
become 100% vested. For purposes of the immediately preceding sentence,
notwithstanding the definition of "change of control" set forth in the
applicable plan, if at any time either of the following events occurs, it shall
be treated as a "change in control" for purposes of vesting any unvested options
granted in accordance with this Section 2.11: (i) any "person" (as defined in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) becomes the beneficial owner, directly or indirectly, of
securities of the Company (excluding any securities of which such person is
deemed to be the beneficial owner pursuant to Section 13d-3(d)(1)(i) of the
Exchange Act or any successor provision thereof), which comprise the then
current right to vote representing fifty-one percent (51%) or more of the
combined voting power of the Company's then outstanding voting securities (other
than by reason of the acquisition of securities by the Company or an employee
benefit plan (or any trust funding such plan) maintained by the Company, or by
reason of the new issuance of securities directly by the Company); or (ii) a
sale of all or substantially all of the Company's assets; provided that
transfers or distributions by a person to any of its affiliates, subsidiaries,
parents, stockholders, members or other interest holders shall not constitute a
"change in control."
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SECTION 3 - TIME COMMITMENT AND PERFORMANCE
Executive shall devote Executive's best efforts and all of Executive's
business time, attention, and skill to the business and the operations of the
Company and shall perform Executive's duties and conduct himself at all times in
a manner consistent with Executive's appointment as CEO and President of the
Company; except, however, Executive may serve on corporate, civic, or charitable
boards or committees and manage Executive's personal investments and affairs
provided such activities do not interfere with the performance of Executive's
duties under this Agreement and provided Executive keeps the Board reasonably
informed of Executive's commitments.
SECTION 4 - COMPETITIVE ACTIVITY/OTHER RESTRICTIONS
Executive agrees to be subject to the restrictions on competition and
other activities set forth in this Section 4 during the "Restriction Period".
For purposes of this Section 4, the "Restriction Period" is the period beginning
on the effective date of this Agreement and ending on either (i) the date one
(1) year immediately following a termination of Executive's employment under
this Agreement (other than a termination of Executive's employment on or after
May 1, 2005 that entitles Executive to severance payments in accordance with
Section 6.1(b)); or (ii) the date two (2) years immediately following any
termination of Executive's employment under this Agreement on or after May 1,
2005 that entitles Executive to severance payments in accordance with Section
6.1(b).
(a) Executive agrees that he shall not directly or indirectly
either for himself or on behalf of any other corporation, partnership,
person, group, or entity engage in the business of (i) manufacturing,
distributing, selling or providing corrosion control services, systems,
material or equipment, including without limitation cathodic protection
services and pipeline integrity services, (ii) manufacturing,
distributing, selling, or providing coatings or coating services, or (iii)
any other business in which the Company directly or indirectly engages
during the term of the Agreement; provided, however, that the restriction
in this Section 4 shall apply only to the reasonable and limited
geographic area consisting of any state or country in which the Company
directly or indirectly has offices, operations, or customers, or otherwise
conducts business. For purposes of this Section 4, Executive shall be
deemed to engage in a business if he directly or indirectly, engages or
invests in, owns, manages, operates, controls or participates in the
ownership, management, operation or control of, is employed by, associated
or in any manner connected with, or renders services or advice to, any
business engaged in (i) manufacturing, distributing, selling or providing
corrosion control services, systems, material or equipment, including
without limitation cathodic protection services and pipeline integrity
services, (ii) manufacturing, distributing, selling, or providing coatings
or coating services, or (iii) any other business in which the Company
directly or indirectly engages during the term of the Agreement; provided,
however, that Executive may invest in the securities of any enterprise
(but without otherwise participating in the activities of such enterprise)
if (x) such securities are listed on any national or regional securities
exchange or have been registered under Section 12(g) of the Securities
Exchange Act of 1934 and (y) Executive does not beneficially own (as
defined Rule 13d-3 promulgated under the Securities Exchange Act of 1934)
in excess of 5% of the outstanding capital stock of such enterprise;
(b) Executive shall not, directly or indirectly, call on, solicit
or take away any of the customers or potential customers of the Company on
whom Executive called or with whom Executive became acquainted or of which
Executive learned during employment with the Company.
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(c) Executive shall not, directly or indirectly, solicit for
employment any employee of the Company or encourage, induce, attempt to
induce, or assist another to induce or attempt to induce any employee of
the Company to terminate his employment with the Company.
(d) Executive shall not materially interfere, in any manner, with
the business, trade, goodwill, sources of supply, or customers of the
Company.
Executive agrees that if a court of competent jurisdiction determines that
the length of time or any other restriction, or portion thereof, set forth in
this Section 4 is overly restrictive and unenforceable, the court may reduce or
modify such restrictions to those which it deems reasonable and enforceable
under the circumstances, and as so reduced or modified, the parties hereto agree
that the restrictions of this Section 4 shall remain in full force and effect.
Executive further agrees that if a court of competent jurisdiction determines
that any provision of this Section 4 is invalid or against public policy, the
remaining provisions of this Section 4 and the remainder of this Agreement shall
not be affected thereby, and shall remain in full force and effect.
Executive acknowledges that the business of the Company and its affiliates
is international in scope and that the restrictions imposed by this Agreement
are legitimate, reasonable and necessary to protect the Company's and its
affiliates' investment in their businesses and the goodwill thereof. Executive
acknowledges that the scope and duration of the restrictions contained herein
are reasonable in light of the time that Executive has been engaged in the
business of the Company and its affiliates, Executive's reputation in the
markets for the Company's and its affiliates' businesses and Executive's
relationship with the suppliers, customers and clients of the Company and its
affiliates. Executive further acknowledges that the restrictions contained
herein are not burdensome to Executive in light of the consideration paid
therefor and the other opportunities that remain open to Executive. Except as
otherwise provided herein, this Section 4 shall survive the termination of this
Agreement.
SECTION 5 - PROPRIETARY INFORMATION/INTELLECTUAL PROPERTY
5.1 PROPRIETARY INFORMATION. During his employment pursuant to this
Agreement and at any time thereafter, Executive shall not disclose, or cause to
be disclosed in any manner, to any corporation, partnership, person, group, or
entity (other than to the Company's employees or authorized representatives, or
in the ordinary course of business consistent with the Company's policy
regarding trade secrets) or otherwise use for any purpose other than the
Company's business, any trade secrets or confidential or proprietary information
of the Company, including, but not limited to, the following:
(i) The Company's customer or prospective customer lists;
(ii) Information concerning the Company's promotional, pricing, or
marketing practices;
(iii) The Company's business records; and
(iv) The Company's trade secrets and other confidential and
proprietary information.
Upon termination of Executive's employment under any circumstances,
Executive or his estate or representatives, shall promptly return to the Company
all property of the Company, including any and all electronic devices and
related data storage devices and shall destroy or erase any data that cannot be
returned. This Section 5 shall survive the termination of this Agreement.
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5.2 COPYRIGHTS/TRADEMARKS. Any copyrightable works created by Executive
during this Agreement shall be deemed work for hire to the extent permitted by
law and the Company shall have the sole right to any such copyright. In the
event that any work created by Executive does not qualify as work for hire,
Executive agrees to assign his right in the work to the Company, as provided by
Section 5.4 below.
5.3 INVENTIONS. Executive will communicate to the Company promptly and
fully and hereby assigns all of Executive's rights in all inventions or
improvements made or conceived by Executive (alone or jointly with others)
during Executive's employment with the Company and for a period of one year
thereafter, which are along the lines of the business, work, or investigations
of the Company or that result from or are suggested by any work Executive may do
for the Company. Executive agrees that any such invention or improvement,
whether or not patentable, shall be and remain the sole and exclusive property
of the Company. Executive agrees to keep and maintain adequate and current
written records of all such inventions or improvements at all stages thereof,
which records shall be and remain the property of the Company. Executive agrees
to take such actions and execute such documents and instruments, including but
not limited to patent applications, as the Company requests to vest or maintain
title to such inventions or improvements in the Company or otherwise to carry
out the intent of this Agreement.
5.4 OTHER PROVISIONS/EXCLUSIONS. Executive understands, acknowledges and
agrees that all Developments (as hereinafter defined) shall be made for hire by
Executive for the Company. "Developments" means any idea, discovery, invention,
design, method, technique, improvement, enhancement, development, computer
program, machine, algorithm or other work or authorship that (i) relates to the
business or operations of the Company, or (ii) results from or is suggested by
any undertaking assigned to Executive or work performed by Executive for or on
behalf of the Company, whether created alone or with others, during or outside
working hours. All confidential or proprietary information described in Section
5.1 above and all Developments shall remain the sole property of the Company.
Executive shall acquire no proprietary interest in any confidential or
proprietary information described in Section 5.1 above or Developments developed
or acquired while Executive is required to provide services to the Company
hereunder. To the extent Executive may, by operation of law or otherwise,
acquire any right, title or interest in or to any confidential or proprietary
information described in Section 5.1 above or Development, Executive hereby
assigns to the Company all such proprietary rights. Executive shall, both during
the term of this Agreement and thereafter, upon the Company's request, promptly
execute and deliver to the Company all such assignments, certificates and
instruments, and shall promptly perform such other acts, as the Company may from
time to time in its reasonable discretion deem necessary or desirable to
evidence, establish, maintain, perfect, enforce or defend the Company's rights
in Developments and in the proprietary information, inventions, copyrights, and
trademarks otherwise described in this Section 5.
5.5 MATERIAL MADE PRIOR TO EMPLOYMENT. Notwithstanding the foregoing,
Executive's inventions and improvements, patented and unpatented, trademarks,
and copyrighted material that were made prior to Executive's employment by the
Company, and that are listed on an attached exhibit, if any, shall be excluded
from the operation of this Agreement.
SECTION 6 - RESIGNATION DUE TO COMPANY FAILING TO HONOR ITS OBLIGATIONS
AND TERMINATION WITHOUT GOOD CAUSE
6.1 GENERALLY. Executive may resign Executive's employment and terminate
this Agreement if the Company fails to honor its obligations, subject to the
procedures as provided in this Section 6. The Company may terminate Executive's
employment for any reason at any time upon thirty (30) days notice to Executive.
Anything to the contrary contained in this Agreement notwithstanding, if
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either (i) the Company fails to honor any of its obligations under this
Agreement, and if the Company does not cure the determined failure within thirty
(30) days after a determination of a failure in accordance with the procedures
set forth below and if as a result Executive resigns Executive's employment with
the Company, or (ii) the Company terminates Executive's employment with the
Company under this Agreement without Good Cause (as defined in Section 7.1),
Executive shall be entitled to receive and the Company shall pay to Executive
the following:
(a) SALARY. Executive's Base Compensation and auto allowance, if
any, earned through the date of resignation or termination and a lump sum
payment for any unused vacation shall be paid on or before the next
regularly scheduled pay-date after the effective date of the resignation
or termination.
(b) SEVERANCE. If Executive is entitled to receive benefits under
this Section 6.1(b) as a result of a resignation by Executive or
termination of Executive's employment by the Company that occurs on or
before April 30, 2005, Executive shall be entitled to payments for a
period of one (1) year, paid in consecutive periodic payments commencing
on the first pay day in the month following such resignation or
termination, in the aggregate amount equal to twelve (12) months of
Executive's Base Compensation and auto allowance, if any, then in effect,
provided that in the event of Executive's death prior to the receipt of
all payments, any remaining payments shall be made to Executive's estate.
If Executive is entitled to receive benefits under this Section 6.1(b) as
a result of a resignation by Executive or termination of Executive's
employment by the Company that occurs on or after May 1, 2005, Executive
shall be entitled to payments for a period of two (2) years, paid in
consecutive periodic payments commencing on the first pay day in the month
following such resignation or termination, in the aggregate amount equal
to twenty-four (24) months of Executive's Base Compensation and auto
allowance, if any, then in effect, provided that in the event of
Executive's death prior to the receipt of all payments, any remaining
payments shall be made to Executive's estate.
(c) BENEFITS. If Executive is entitled to receive benefits under
this Section 6.1(c) as a result of a resignation by Executive or
termination of Executive's employment by the Company that occurs on or
before April 30, 2005, Executive and his eligible dependents may continue
coverage under the Company sponsored benefit plans following such
termination for a period of up to twelve (12) months, subject to
applicable premium contributions and to the extent permitted by law or by
the terms of such plans. If Executive is entitled to receive benefits
under this Section 6.1(c) as a result of a resignation by Executive or
termination of Executive's employment by the Company that occurs on or
after May 1, 2005, Executive and his eligible dependents may continue
coverage under the Company sponsored benefit plans following such
termination for a period of up to twenty-four (24) months, subject to
applicable premium contributions and to the extent permitted by law or by
the terms of such plans. If Executive is eligible for and elects
continuation coverage under the Company's United States medical plan, then
the Company agrees to pay the same portion of Executive's individual
premiums for such coverage as the portion of said premiums that the
Company paid for Executive immediately prior to his termination of
employment, until the earlier of: (i) with respect a resignation or
termination that occurs on or before April 30, 2005, the last day of the
twelfth (12th) month following Executive's termination of employment, or
with respect to a resignation or termination that occurs on or after May
1, 2005, the last day of the twenty-fourth (24th) month following
Executive's termination of employment, or (ii) the date Executive's
coverage under the Company's United States medical plan terminates for any
reason. Thereafter, if Executive is eligible and wishes to continue his
continuation coverage and the maximum applicable continuation coverage
period has not expired, Executive may continue such coverage, provided,
however, Executive shall be solely responsible for payment of the entire
premium for such
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coverage. All benefits (other than those with respect to which
continuation is required by law) under this Section 6.1(c) shall cease no
later than the death of both Executive and his spouse.
6.2 PROCEDURES. For purposes of this Section 6, the following procedure
shall be used to determine whether the Company has failed to honor any of its
obligations under this Agreement:
(a) Executive shall submit a claim to the Board specifically
identifying the nature of the failure;
(b) within thirty (30) days of receipt of such claim, the Board
shall determine whether they agree with Executive that a failure has
occurred and shall communicate, in writing, their determination to
Executive; and
(c) if Executive disagrees with the determination of the Board,
Executive, within ten (10) days of Executive's receipt of such
determination, may submit the claim to arbitration in accordance with the
provisions of Section 11.4 of this Agreement, and such determination shall
be final and binding upon the Company and Executive.
6.3 SOLE REMEDY. The payments provided in this Section 6 shall represent
the sole remedy for any claim Executive may have arising out of the Company's
failure to honor its obligations and termination without Good Cause. The Company
may condition payment of amounts due under this Section 6 upon the receipt of a
release and covenant not to xxx in a form reasonably satisfactory to the
Company, the terms of which shall not conflict with the terms of this Agreement.
SECTION 7 - TERMINATION FOR GOOD CAUSE
7.1 GENERALLY. The Company shall have the right to terminate Executive's
employment with the Company under this Agreement for Good Cause. As used in this
Agreement, the term "GOOD CAUSE" shall mean:
(a) Any wrongful act or acts by Executive, adverse to the
interests of the Company, resulting in, or intended to result directly or
indirectly in, significant or personal enrichment of Executive;
(b) A material failure by Executive substantially to perform his
duties with the Company (other than any such failure resulting from
incapacity due to mental or physical illness), and such failure results in
demonstrably material injury to the Company;
(c) The willful, wanton, or reckless failure by Executive properly
to perform his duties with the Company (other than such failure resulting
from incapacity due to mental or physical illness); or
(d) The indictment for a crime that has caused or may be
reasonably expected to cause material injury to the Company, any of its
subsidiaries, any of its affiliates or any of their interests, or the
conviction of a felony.
7.2 NOTICE. In the event the Company seeks to terminate this Agreement
for Good Cause, the Company shall provide written notice to Executive of the
conduct which the Company believes constitutes Good Cause. Executive shall have
five (5) business days from receipt of such notice to provide the Company with a
written statement setting forth (i) reasons, if any, that such conduct does not
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constitute Good Cause or (ii) Executive's recommendation for a remedy for cure.
Within five (5) business days of receipt of such statement, the Company shall
notify Executive in writing whether it accepts Executive's statement or whether
the Company intends to proceed to terminate this Agreement for Good Cause.
During the notice periods provided in this Section 7.2, the Company may place
Executive on paid leave of absence status.
7.3 PROCEDURES. Executive shall not be deemed to have been terminated
for Good Cause unless and until there shall have been delivered to Executive a
copy of a resolution duly adopted by the affirmative vote of not less than sixty
percent (60%) of the entire membership of the Board (excluding Executive if a
member of the Board) at a meeting of the Board (after reasonable notice to
Executive and an opportunity for Executive, together with Executive's counsel,
to be heard before the Board), finding that, in the good faith opinion of the
Board, Executive was guilty of any of the conduct set forth above in Section 7.1
above. However, pending a final determination of the Board, the Board shall have
the authority to place Executive on "leave of absence status," with or without
pay in the sole discretion of the Board as determined by a majority of the
Board, provided that the Board shall make a final determination within a
reasonable time under the facts and circumstances and that if Good Cause is not
found Executive shall be paid retroactively for any unpaid leave of absence.
7.4 NO FURTHER OBLIGATIONS. In the event that the Company shall
terminate Executive's employment under this Agreement for Good Cause, the
Company shall have no further obligation to Executive under this Agreement
except to pay Executive's Base Compensation, auto allowance, if any, and unused
vacation earned through the date of termination, on or before the next regularly
scheduled pay date after termination, and to perform such other obligations as
imposed by law.
SECTION 8 - VOLUNTARY TERMINATION OTHER THAN SECTION 6, TERMINATION
DUE TO DISABILITY OR EXPIRATION OF TERM
Executive may voluntarily terminate Executive's employment with the
Company under this Agreement, other than as provided in Section 6 hereof, upon
not less than sixty (60) days prior written notice to the Company, or
Executive's employment may terminate in the event of Executive's "total and
permanent disability" (as such term is defined by the Company's long-term
disability plan). In the event that (i) Executive terminates Executive's
employment pursuant to this Section 8, (ii) Executive's employment terminates
due to his total and permanent disability, or (iii) Executive's employment
terminates upon the expiration of the term of this Agreement, the Company,
except as otherwise provided by Section 1.2(a) above, shall have no further
obligation to Executive under this Agreement except to pay Executive's Base
Compensation, auto allowance, if any, and unused vacation earned through the
date of termination and to perform such other obligations as imposed by law. In
the event of Executive's voluntary resignation, the Company may remove Executive
from Executive's position and notify Executive that the Company will require
specified limited services, or no further services, from Executive for the
remainder of the term of this Agreement, provided that the Company shall
continue to pay compensation and provide benefits (as described in Section 2
above) to Executive until the expiration of the term of this Agreement. Removal
of Executive from his position by the Company and any limitation on Executive's
service in accordance with the preceding sentence shall not be deemed a
termination of Executive by the Company without Good Cause and shall not entitle
Executive to any of the benefits described in Section 6.1 above.
SECTION 9 - TERMINATION UPON DEATH
Executive's employment under this Agreement shall terminate upon the death
of Executive. Upon such termination, Executive's designated beneficiary, or
Executive's personal representative shall receive the payments/benefits
described below from the Company:
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(a) SALARY. Executive's unpaid Base Compensation, auto allowance,
if any, earned through the date of termination and a lump sum payment for
any unused vacation shall be paid on or before the next regularly
scheduled pay date after termination.
(b) BONUS. If Executive dies prior to the payment of the annual
incentive bonus as provided by Section 2.4 above, then an amount equal to
a pro-rata share of the amount that would have been payable to Executive
based upon the number of full months Executive was actually employed
during such fiscal year shall be paid to Executive's estate at the time
such annual incentive bonus would otherwise be payable as provided by
Section 2.4 above.
(c) BENEFITS. Benefits will continue for Executive's spouse and
eligible dependents only as provided in any applicable Company policy or
as otherwise required by law.
SECTION 10 - BREACHES AND REMEDIES
Executive acknowledges and agrees that in the event that Executive
violates the undertakings set forth in Section 4 or 5 hereof, other than in an
immaterial fashion, in addition to any other rights or remedies to which it may
be entitled under law or this Agreement, the Company shall, except as prohibited
by applicable law, cease making any severance or other payments hereunder and
shall be entitled to enforce the provisions of Section 4 or 5 by injunction or
other equitable relief, without having to prove irreparable harm or inadequacy
of money damages.
SECTION 11 - MISCELLANEOUS
11.1 SEVERABILITY. The provisions contained in this Agreement are
severable and in the event any provision shall be held to be invalid,
unenforceable or overbroad, in whole or in part, by a court of competent
jurisdiction, the remainder of such provision and of this Agreement shall not be
affected thereby and shall be given full force and effect.
11.2 NOTICES. Any notices, requests, demands, or other communications
provided for by this Agreement shall be sufficient if made in writing delivered
personally or if sent by registered or certified mail, return receipt requested.
11.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Company, its successors and assigns, and to the
benefit of Executive, Executive's heirs and legal representatives, except that
Executive's duties to perform future services are expressly agreed to be
personal and not to be assignable or transferable.
11.4 APPLICABLE LAW, ARBITRATION AND JURISDICTION. This Agreement shall
be governed by and construed under the laws of the State of Ohio. The parties
agree that any dispute arising out of this employment relationship except for
disputes arising under Sections 4 and 5 of this Agreement shall be settled by
final and binding arbitration conducted in accordance with the rules of
conciliation and arbitration of the American Arbitration Association, such
arbitration to be conducted in Cleveland, Ohio, or at such other location as the
parties may agree. The decision of the arbitrator shall be final and binding
upon all parties. Executive understands that by agreeing to submit all claims to
binding arbitration, he is knowingly waiving any right to trial by jury or other
judicial forum that might otherwise exist. Each party shall be responsible for
its own costs of arbitration. Joint costs (such as the fees of the arbitrator)
shall be borne equally. Discovery shall not be permitted in the arbitration.
With respect to disputes arising under Sections 4 and 5 of this Agreement,
Executive and the Company consent and submit themselves to the jurisdiction of
the courts of the State of Ohio.
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11.5 AMENDMENT. This Agreement may be amended only by a written document
signed by both parties.
11.6 NO WAIVER. No waiver by either party at any time of any breach by
the other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same time or any prior or
subsequent time.
11.7 HEADINGS. The headings contained in this Agreement are for reference
only and shall not affect the meaning or interpretation of any provision of this
Agreement.
11.8 PRIOR AGREEMENTS. This Agreement supersedes in all respects all
prior agreements between the parties, whether written or oral, regarding the
subject matter hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
CORRPRO COMPANIES, INC.
/s/ Xxxxxx X. Xxxxx
By: __________________________
Senior Vice President
Its: __________________________
"COMPANY"
/s/ Xxxxxx X. Xxxxx
_______________________________
Xxxxxx X. Xxxxx
"EXECUTIVE"
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