EXHIBIT 10.14
AMENDMENT AND TERMINATION AGREEMENT
THIS AMENDMENT AND TERMINATION AGREEMENT (this "AMENDMENT") to that
certain Change in Control Agreement by and between Corrpro Companies, Inc., an
Ohio corporation (the "COMPANY") and Xxxxxx X. Xxxxxxx (the "EXECUTIVE") dated
November 2, 2000 (the "AGREEMENT") is made and entered into this 23rd day of
October, 2003 by and between the Company and the Executive.
WHEREAS, Xxxxxxx Partners III, L.P., a Delaware limited partnership
(together with its assigns, "XXXXXXX") is a party to this Amendment for the
limited purpose of providing assurance that it will vote all of its equity
ownership in the Company after the Closing to carry out the terms of Section
1(d) hereof and for the purpose of consenting that it will not require or
request that the Company, before the Closing, take any action inconsistent or
contrary to the terms of this Agreement;
WHEREAS, Xxxxxxx and the Company executed a term sheet dated September 11,
2003 to enter into an agreement whereby Xxxxxxx proposes to purchase $13.0
million in redeemable preferred stock of the Company (the "PREFERRED STOCK"),
and Xxxxxxx would hold detachable warrants to purchase 40% of the fully diluted
common stock at a nominal cost, all the Preferred Stock would represent 51% of
the fully diluted voting power of the common stock of the Company (including
authorized but unissued options) and the holders of Preferred Stock would have
the right to elect the number of directors constituting a majority of the Board
of Directors of the Company (the "BOARD") authorized by the Company's
certificate of incorporation or bylaws (the "TRANSACTIONS"); and
WHEREAS, Xxxxxxx has made it a condition to consummation of the
Transactions that the Executive terminate the Agreement; and
WHEREAS, the Executive believes that it is in the best interest of the
Executive to terminate the Agreement in conjunction with the Transactions; and
WHEREAS, the Company and the Executive have entered into the Agreement and
desire to amend its terms in accordance with Section 5.5 of the Agreement; and
WHEREAS the Board or a designated committee thereof has approved this
Amendment in accordance with Section 5.5 of the Agreement.
NOW, THEREFORE, in consideration of the mutual promises, conditions and
covenants contained herein and in the Agreement, and other good and valuable
consideration, the adequacy of which is hereby acknowledged, the parties agree
as follows:
1. Effective immediately upon execution of this Amendment, all of the
terms and conditions of the Agreement shall be terminated in their entirety,
null and void and shall no longer be of any force or effect and the Executive
releases any right to receive any and all payments under the Agreement; provided
that if the Company fails to fulfill all of the Conditions (as defined below),
then the Agreement shall not be terminated and remain in full force and effect
and the Executive shall have the right to receive payments as provided in the
Agreement. The "CONDITIONS" shall mean:
(a) The consummation of the issuance and sale of the Preferred
Stock to Xxxxxxx (the "CLOSING") will have occurred.
(b) Prior to the Closing, the Company will not terminate, amend or
modify that certain Employment Agreement between the Executive and the
Company dated November 2,
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2000 (the "EMPLOYMENT AGREEMENT"), unless such amendment or modification
results in terms that are no less favorable to the Executive than those
that currently exist in the Employment Agreement, it being understood that
if the Employment Agreement is in effect immediately after the Closing
this condition is fully satisfied.
(c) Prior to the Closing, the Company shall execute and deliver to
the Executive an amendment to the Employment Agreement (in the form of
Exhibit A attached hereto), which amendment extends the end date of the
term of the Employment Agreement to March 31, 2006.
(d) On or before the 180th day after the Closing, the Company
will, whether by increasing the number of existing stock options that may
be granted under the current stock option plan, by establishing a new
equity incentive plan or plans or by some combination thereof, have a
total option pool (consisting of shares of common stock of the Company
issuable upon exercise of options granted (including all options described
in Sections 1(d) and 1(e) below) and options available for grant to
directors, officers and employees) equal to 15% of the fully diluted
common stock of the Company (to be calculated immediately after the
Closing).
(e) Within 180 days after the Closing, if the Executive is
employed by the Company on the date of grant or he has either been
terminated by the Company without "Good Cause" (as defined in the
Employment Agreement) or resigned for a reason permitted by Section 7 of
the Employment Agreement prior to the date of grant, the Company will
issue to the Executive an option to purchase a minimum of 100,000 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 100,000 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 Amendment, "Determination
Date" shall mean the 90th day after 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.
(f) Any options held by the Executive under the existing plan with
an exercise price greater than the fair market value of the stock on the
Determination Date shall be modified, with the Executive's consent, as
follows: (i) the exercise price of 50% of such options shall equal 100% of
the fair market value of the stock on the Determination Date, and (ii) the
exercise price of 50% of such options shall equal 200% of the fair market
value of the stock on the Determination Date; such modification may
include either a repricing of such options or, subject to review by the
Company's accountant for adverse accounting treatment, a cancellation of
such options and issuance of new options under the existing option plan or
a new option plan.
(g) Any options granted in accordance with Section 1(e) hereof or
modified (or granted) in accordance with Section 1(f) hereof shall include
the following terms: (i) vesting in 5 equal installments over 5 years
beginning on the date of grant of such option, provided, however, that in
the event of a "change of control" (as defined in the applicable plan),
such options shall become 100% vested; and (ii) a 10 year term (subject to
early termination or forfeiture in accordance with the terms of the
applicable plan). If the Executive is either terminated by the Company
without "good cause" (as defined in the Employment Agreement) or resigns
for a reason permitted by Section 7 of the Employment Agreement, any
options granted in accordance with Section 1(e) hereof shall be vested at
the greater of 50% or the percent vested according to the five year
vesting schedule.
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(h) If the Executive is employed by the Company on the date which
is 6 months after the Closing, or he has either been terminated by the
Company without Good Cause or resigned for a reason permitted by Section 7
of the Employment Agreement prior to such date, the Executive shall be
entitled to a $50,000 bonus on such date.
(i) The Company shall not modify the structure, terms or
conditions of the Company's bonus plan for the fiscal year ending March
31, 2004.
2. This Amendment shall be governed in all respects by the laws of the
State of Ohio, without giving effect to the conflicts of laws principles
thereof.
3. Except as otherwise provided herein, the provisions hereof shall
inure to the benefit of, and be binding upon, the successors, assigns, heirs,
executors, and administrators of the parties hereto, provided, however, that the
rights of any party hereto shall not be assignable without the written consent
of all the other parties to this Amendment. The Company will require that any
successor (whether direct or indirect, by purchase of stock or assets, by
merger, by consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company be liable for the obligations owed to
Executive hereunder and will require that any such successor perform this
Amendment in the same manner and to the same extent that the Company is
obligated to perform it. Any succession shall not, however, relieve or alter the
Company's continuing liability for obligations owing to Executive hereunder.
4. This Amendment and the Agreement constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof and shall supersede and cancel all other prior agreements
between the parties hereto with regard to the subject matter hereof. Neither
this Amendment nor any term hereof may be amended, waived, discharged, or
terminated other than by a written instrument signed by all the parties to this
Amendment.
5. In the event that any provision of this Amendment becomes or is
declared by a court of competent jurisdiction to be illegal, unenforceable or
void, this Amendment shall continue in full force and effect without said
provision; provided that no such severability shall be effective if it
materially changes the economic benefit of this Amendment to any party.
6. This Amendment may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Amendment, and all of which,
when taken together, shall be deemed to constitute one and the same Amendment.
The exchange of copies of this Amendment and of signature pages by facsimile
transmission shall constitute effective execution and delivery of this Amendment
as to the parties and may be used in lieu of the original Amendment for all
purposes. Signatures of the parties transmitted by facsimile shall be deemed to
be their original signatures for any purpose whatsoever.
7. The Executive acknowledges and agrees to each of the following
items:
(a) I am executing this Amendment voluntarily and without any
duress or undue influence by the Company, Xxxxxxx or anyone else; and
(b) I have carefully read this Amendment and I have asked any
questions needed for me to understand the terms, consequences and binding
effect of this Amendment and fully understand them; and
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(c) I have been advised by the Company to obtain the advice of an
attorney of my choice prior to signing this Amendment.
8. Xxxxxxx is a party to this Amendment for the limited purpose of
providing assurance that it will vote all of its equity ownership in the Company
after the Closing to carry out the terms of Section 1(d) hereof and, further,
Xxxxxxx agrees that it will not require or request that the Company, before the
Closing, take any action inconsistent or contrary to the terms of this
Agreement; if the Executive is employed by the Company on the day after Closing,
it shall be conclusively presumed that Xxxxxxx has not taken any such action.
**************
IN WITNESS WHEREOF, the parties have executed this Amendment effective as
of the day and year first set forth above.
THE EXECUTIVE:
________________________________
Name: Xxxxxx X. Xxxxxxx
THE COMPANY:
Corrpro Companies, Inc.
By: ____________________________
Name: ______________________
Title:______________________
XXXXXXX PARTNERS III, L.P.
By: ____________________________
Name: ______________________
Title:______________________
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EXHIBIT A
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS SECOND AMENDMENT (this "AMENDMENT") to that certain Employment
Agreement by and among Corrpro Companies, Inc., an Ohio corporation (the
"COMPANY") and Xxxxxx X. Xxxxxxx (the "EXECUTIVE") dated November 2, 2000 (the
"AGREEMENT") and amended by Amendment to November 2000 Agreement dated July 16,
2003 is made and entered into this 23rd day of October, 2003 by and between the
Company and the Executive.
WHEREAS, the Company and the Executive entered into a certain Amendment
and Termination Agreement dated October 23, 2003, whereby the Company agreed to
execute and deliver to the Executive an amendment to the Agreement to extend the
term of the Agreement to March 31, 2006; and
WHEREAS, the Executive believes that it is in his best interest to amend
the Agreement to extend the term of the Agreement to March 31, 2006; and
WHEREAS, the Company and the Executive have entered into the Agreement and
desire to amend its terms in accordance with Section 17 of the Agreement.
NOW, THEREFORE, in consideration of the mutual promises, conditions and
covenants contained herein and in the Agreement, and other good and valuable
consideration, the adequacy of which is hereby acknowledged, the parties agree
as follows:
1. Effective immediately upon execution of this Amendment, Section 1(a)
of the Agreement, as amended, is amended by substituting "March 31, 2006" as the
ending date of the term of the Agreement.
2. Effective immediately upon execution of this Amendment, Section 15
of this Agreement is amended by adding, following the first sentence of Section
15, the following: The Company will require that any successor (whether direct
or indirect, by purchase of stock or assets, by merger, by consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company be liable for the obligations owed to Executive hereunder and will
require that any such successor perform this Agreement in the same manner and to
the same extent that the Company is obligated to perform it. Any succession
shall not, however, relieve or alter the Company's continuing liability for
obligations owing to Executive hereunder.
3. Except as amended hereby, the Agreement shall remain in full effect.
4. The Executive acknowledges and agrees to each of the following
items:
(a) I am executing this Amendment voluntarily and without any
duress or undue influence by the Company or anyone else;
(b) I have carefully read this Amendment and I have asked any
questions needed for me to understand the terms, consequences and binding
effect of this Amendment and fully understand them; and
(c) I have been advised by the Company to obtain the advice of an
attorney of my choice prior to signing this Amendment.
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IN WITNESS WHEREOF, the parties have executed this Amendment effective as
of the day and year first set forth above.
THE EXECUTIVE:
_________________________________
Xxxxxx X. Xxxxxxx
THE COMPANY:
Corrpro Companies, Inc.
By: ____________________________
Name: ______________________
Title:______________________
Schedule to Exhibits 10.14 and 10.15. The form of amendment and termination
agreement, and amendment to executive officer employment agreement attached to
this Annual Report on Form 10-K have been executed by the Company and Xxxxx X.
Xxxxxxxx, Xxxxxx X. Xxxxxxx, Xx., Xxxxxxx X. Xxxxx, Xxxxx X. Xxxxx, Xxxxxx X.
Xxxxx and Xxxx X. Xxxxx. Messrs. Schadeck, Gehring, Baach, Kroon, Xxxxx and
Xxxxx are executive officers named in the Company's proxy statement dated
February 17, 2004. Except for Xx. Xxxxxxxx'x agreements, the provisions of the
agreements executed are substantially identical in all material respects. Xx.
Xxxxxxxx'x agreements differ from the form of agreements only to the extent of
reflecting that Commonwealth Xxxxxx Holdings, Ltd. ("CSG"), a wholly-owned
subsidiary of the Company, and Corrtech Consulting Group are parties to Xx.
Xxxxxxxx'x executive employment agreements rather than the Company.
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