1
EXHIBIT 10.17
PENN-AKRON CORPORATION
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT (hereinafter referred to as the
"Agreement") made as of January 1, 2000, between XXXXXXX X. XXXXXX, an
individual residing at 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx 00000
(hereinafter referred to as the "Executive") and Penn-Akron Corporation, a
Nevada corporation, with Georgia offices at 0000 Xxxxxxx Xxxx Xxxx X.X.,
Xxxxxxxx, XX 00000 (hereinafter referred to as the "Employer").
RECITALS:
WHEREAS, the Employer desires to employ the Executive, and the
Executive desires to serve as an Executive of the Employer on the terms and
conditions hereinafter set forth.
NOW THEREFORE, in consideration of the mutual covenants and promises of
the parties hereto, the Employer and the Executive agree as follows:
TERMS OF AGREEMENT:
1. Employment: The Employer hereby agrees to employ the Executive
as President to perform managerial and executive functions of the Employer, and
the Executive hereby agrees to perform such services for the Employer on the
terms and conditions hereinafter stated, subject to the directives of the Board
of Directors of the Employer.
2. Term of Employment: The term of this Agreement shall begin on
January 1, 2000 and shall continue in full force and effect until April 1, 2002;
provided, however, that this Agreement shall be automatically renewed on a
year-to-year basis thereafter unless terminated by either party on at least six
(6) months prior written notice during any given year, unless sooner terminated
as provided herein. Notwithstanding the foregoing, the Employer may terminate
this Agreement at any time without cause upon one (1) days written notice to
Executive in which event the Employer shall pay severance to Executive pursuant
to Section 8(g) hereof.
3. Compensation:
(a) Base Compensation - During the term of this Agreement, for
all services rendered by Executive under this Agreement, the Employer shall pay
the Executive an annual base salary of One Hundred Ten Thousand Dollars
($110,000.00) per annum, payable at a rate of Four Thousand Five Hundred Eighty
Three and Thirty Three Cents ($4,583.33) on the fifteenth and last day of each
month. It is understood that foregoing base salary is the base salary in effect
for the Employer's 2000 fiscal year and that such base salary may be increased
by the Board of Directors from time to time in its sole and absolute discretion.
(b) Special Compensation - The Executive will receive
additional quarterly cash/stock performance bonuses at the sole and absolute
discretion of the Board of Directors of the Employer.
4. Stock Option: During the term of this agreement, Executive
shall have the right to participate in any Stock Option Plan or other Stock
Incentive plan that may currently be offered or may be offered in the future.
5. Fringe Benefits: During the term of this agreement, Executive
shall have the right to participate in any Fringe benefits that the Employer may
currently offer or offer to its Employees in the future.
6. Duties and Extent of Services: Upon the execution of this
Agreement and throughout its term, the Executive shall assume the position of
President for the Employer and shall undertake all of the duties incident to
2
PENN-AKRON CORPORATION
EMPLOYMENT AGREEMENT FOR: XXXXXXX X. XXXXXX
JANUARY 1, 2000
PAGE 2 OF 6
such office in addition to rendering all such other management duties as the
Board of Directors may reasonably request. The parties hereto shall take
whatever action is necessary to cause the election or appointment of the
Executive to such position. The Executive shall exert his best efforts and shall
devote his full time and attention to the affairs of the Employer and shall not
be engaged in or concerned with any other duties or pursuits whatsoever for
pecuniary gain requiring his personal services without the prior written consent
of the Employer.
7. Vacation: During each year of the term of this Agreement, the
Executive shall be entitled to Three (3) weeks vacation, the time of which shall
be subject to the prior approval of the Chief Executive Officer of the Employer.
8. Termination: Unless renewed as provided herein, the
Executive's employment hereunder shall terminate on April 1, 2002, or sooner
upon the occurrence of any of the following events:
(a) The Executive's death;
(b) The termination of the Executive's employment hereunder by
the Employer, at its option, to be exercised by written notice from the Employer
to the Executive, upon the Executive's incapacity or inability to perform his
services as contemplated herein for a period of at least forty-five (45)
consecutive days or an aggregate of Sixty (60) non-consecutive days during any
Three (3)-month period during the term hereof due to the fact that his physical
or mental health shall have become impaired so as to make it impossible or
impractical for him to perform the duties and responsibilities contemplated for
him hereunder; or
(c) The termination for cause of the Executive's employment
hereunder by the Employer, at its option, to be exercised by written notice from
the Employer to the Executive in the event the Executive is derelict in his
duties or commits any misconduct with respect to the Employer's affairs and such
dereliction or misconduct shall continue for a period of Five (5) days after the
Employer shall have given the Executive written notice specifying such
dereliction or misconduct, and advising him that the Employer shall have the
right to terminate his employment hereunder in the event such misconduct
continues through such Five (5) day period.
(d) In the event that the Executive commits an act
constituting common law fraud or any crime, which could reasonably be expected
to have an adverse impact on the Employer, its business or assets.
(e) In the event that the Executive should fail (otherwise
than on account of illness or other incapacity) or refuse to carry out the
reasonable directives of the Board of Directors of the Employer, and such
failure or refusal shall continue for a period of Five (5) days after the
Employer shall have given the Executive written notice specifying such
directives and wherein the Executive has failed or refused to carry out the
same, and advising him that the Employer shall have the right to terminate his
employment hereunder in the event such failure or refusal continues through such
Five (5) day period.
(f) Cessation of the Employer's business.
(g) If (i) the Employer terminates this Agreement pursuant to
Section 2 hereof without cause or (ii) there is a Change in Control (as
hereinafter defined) that occurs prior to the expiration or termination of this
Agreement and, within Three (3) months after the Change in Control, (A)
Executive's employment is terminated by the Employer otherwise than for the
reasons set forth in Sections (8)(a), (b), (c), (d), (e) and/or (f) hereof or
(B) Executive terminates his employment for Good Reason (as hereinafter
defined), then Employer shall pay to Executive as severance pay, a total amount
equal to (i) his annual base salary, payable in Twelve (12) equal consecutive
monthly installments (without interest) beginning One (1) month after such
termination plus (ii) the fringe benefits described in Section 5(a) for the
Twelve (12)-month period commencing on the effective date of such termination.
Executive expressly understands that payment of such severance pay and
benefits (or portion thereof if such payments terminate pursuant to the last
sentence of this paragraph) represents liquidated damages in full and final
settlement of any and all amounts owed by Employer to Executive under this
Agreement or otherwise except for the accrued portion, if any, of any bonus,
stock option, commission, vacation or other benefit to which Executive is
expressly entitled pursuant to any formal, written plan or agreement maintained
by the Employer.
3
PENN-AKRON CORPORATION
EMPLOYMENT AGREEMENT FOR: XXXXXXX X. XXXXXX
JANUARY 1, 2000
PAGE 3 OF 6
(h) As used in this Agreement, the following terms have the
meanings set forth below:
(i) "Affiliate" of a person means any person directly
or indirectly controlling, controlled by or under common control with the first
person.
(ii) "Associate" has the meaning ascribed thereto in
Rule 12b-2 under the Exchange Act as in effect on the date hereof.
(iii) "Change in Control" means the occurrence of any
of the following events:
(A) A consolidation, merger, combination or
other transaction between Parent or Employer, and any other corporation or
other legal entity (other than an Affiliate of Parent or Employer) in which
shares of common stock of Parent or Employer are exchanged for or changed into
other stock or securities, cash and/or other property, if as a result of such
transaction less than fifty percent (50.0%) of the combined voting power of the
common stock (or other securities entitled to vote generally in the election of
directors) of the surviving or resulting entity is beneficially owned (as
hereinafter defined) by the beneficial owners of the Parent's or Employer's
common stock as the case may be as of the date hereof ("Current Shareholders")
and the number of persons serving on the Board of Directors of the surviving or
resulting entity who are Affiliates, Associates, designees or nominees of any
single "person" (as defined in Section 13(d)(3) of the Exchange Act) other than
the Current Shareholders is greater than the number of persons serving on such
Board of Directors who are Affiliates, Associates, designees or nominees of the
Current Shareholders;
(B) A sale of all or at least seventy
percent (70.0%) (measured by book value as of the most recent annual or
quarterly balance sheet) of the assets of Parent or Employer to another
corporation or other legal entity (other than one of the Current Shareholders or
any Affiliate of Parent or Employer); and
(C) A sale or other disposition of shares of
common stock of Parent or Employer by the Current Shareholders to any
corporation or other legal entity (other than one of the Current Shareholders or
any Affiliate of Parent or Employer) as a result of which less than fifty
percent (50.0%) of the then-outstanding common stock of Parent or Employer is
beneficially owned (as hereinafter defined) by the Current Shareholders and the
number of persons serving on Parent's or Employer's Board of Directors who are
Affiliates, Associates, designees or nominees of any single "person" (as defined
in Section 13(d)(3) of the Exchange Act) other than the Current Shareholders is
greater than the number of persons serving on Parent's or Employer's Board of
Directors who are Affiliates, Associates, designees or nominees of the Current
Shareholders.
Beneficial ownership will be determined by applying the definition set
forth in Rule 13d-3 under the Exchange Act as in effect on the date hereof.
Also, for purposes of this Agreement, any person who, on the date on which a
Change in control occurs, is serving on Parent's or Employer's Board of
Directors will deemed to be an Affiliate, Associate, designee or nominee of the
Current Shareholders after the Change in Control for as long as such person
serves as a director of Parent or Employer or of any entity that survives or
results from a transaction described in Section 8(h)(iii).
(iv) "Employer" includes any successor to all or
substantially all of the business or assets of the Employer.
(v) "Exchange Act" means the Securities Exchange Act
of 1934, as amended form time to time.
(vi) "Good Reason" means that, following a Change in
Control and without Executive's written consent, (A) there has been a material
and significant adverse change in the nature or scope of Executive's authority,
duties or responsibilities in effect immediately prior to the Change in Control;
(B) there has been a reduction in Executive's annual base salary in effect
immediately prior to the Change in Control or an adverse change in Executive's
total compensation such that Executive's compensation and benefits in the
aggregate are not materially comparable to his aggregate compensation and
benefits in effect immediately prior to the Change in Control; or (C) the
principal place of Executive's employment is relocated to a place that is more
than one hundred (100) miles from the principal place of Executive's employment
immediately prior to the Change in Control or Executive is required to be away
from his office in the course of discharging his duties and responsibilities
materially and significantly more than was required prior to the Change in
Control.
4
PENN-AKRON CORPORATION
EMPLOYMENT AGREEMENT FOR: XXXXXXX X. XXXXXX
JANUARY 1, 2000
PAGE 4 OF 6
In the event of any termination (other than by the Employer without
cause on thirty (30) days' notice pursuant to Section 2), the Employer shall pay
to the Executive such portion of his annual base salary payable to the date such
termination becomes effective (reduced by any amount payable pursuant to any
disability insurance policies), and thereafter the Executive shall have no claim
for any further compensation hereunder; provided, however, that in the event of
the Executive's death, his death shall be deemed to have occurred on the last
day of the month in which he dies. Upon any termination Executive shall also
receive all the benefits to which he is entitled under the Consolidated Omnibus
Budget Reconciliation Act ("COBRA"), provided that if the Executive is entitled
to receive severance and fringe benefits described in Section 8(g), COBRA
benefits shall commence at the expiration of the twelve (12) month (or such
shorter period) as is provided in such Section.
9. Restrictions On The Executive: During the period commencing on
the date hereof and ending one year after the termination of the Executive's
employment by the Employer for any reason, the Executive shall not directly or
indirectly induce or attempt to induce any of the Executives of the Employer to
leave the employ of Employer.
10. Covenant Not To Compete: During the period commencing on the
date hereof, and ending twelve months after the termination of the Executive's
employment for any reason, the Executive shall not, except as a passive investor
in publicly held companies, engage in, or own or control any interest in, or act
as principal, director, officer or Executive of, or consultant to, any firm or
corporation which is in direct competition with the Employer.
11. Proprietary Information:
(a) For purposes of this Agreement, "proprietary information"
shall mean any proprietary information relating to the business of the Employer
or its Parent or any entity in which the Employer or its Parent has a
controlling interest that has not previously been publicly released by duly
authorized representatives of the Employer and shall include (but shall not be
limited to) information encompassed in all proposals, marketing and sales plans,
financial information, costs, pricing information, computer programs (including
without limitation source code, object code, algorithms and models), customer
information, customer lists, and all methods, concepts, know-how or ideas in or
reasonably related to the business of Employer or any entity in which the
Employer has a controlling interest. The Executive agrees to regard and preserve
as confidential all proprietary information, whether he has such information in
his memory or in writing or other tangible or intangible form. The Executive
will not, without written authority from the Employer to do so, directly or
indirectly, use for his benefit or purposes, nor disclose to others, either
during the term of his employment hereunder or thereafter, any proprietary
information except as required by the conditions of his employment hereunder or
pursuant to court order (in which case Executive shall give the Employer prompt
written notice so that the Employer may seek a protective order or other
appropriate remedy and/or waive compliance with the provisions of this
Agreement. The Executive agrees not to remove from the premises of the Employer
or any subsidiary or affiliate of the Employer, except as an Executive of the
Employer in pursuit of the business of the Employer or any of its subsidiaries,
affiliates or any entity in which the Employer has a controlling interest, or
except as specifically permitted in writing by the Employer, any document or
object containing or reflecting any proprietary information. The Executive
recognizes that all such documents and objects, whether developed by him or by
someone else, are the exclusive property of the Employer. Proprietary
information shall not include information which is presently in the public
domain or which comes into the public domain through no fault of the Executive
or which is disclosed to the Executive by a third party lawfully in possession
of such information with a right to disclose same.
(b) All proprietary information and all of the Executive's
interest in trade secrets, trademarks, computer programs, customer information,
customer lists, Executive lists, products, procedure, copyrights, patents and
developments hereafter to the end of the period of employment hereunder
developed by the Executive as a result of, or in connection with, his employment
hereunder, shall belong to the Employer; and without further compensation, but
at the Employer's expense, forthwith upon request of the Employer, Executive
shall execute any and all such assignments and other documents and take any and
all such other action as Employer may reasonably
5
PENN-AKRON CORPORATION
EMPLOYMENT AGREEMENT FOR: XXXXXXX X. XXXXXX
JANUARY 1, 2000
PAGE 5 OF 6
request in order to vest in Employer all the Executive's right, title and
interest in and to all of the aforesaid items, free and clear of liens, charges
and encumbrances.
(c) The Executive expressly agrees that the covenants set
forth in Sections 9, 10 and 11 of this Agreement are being given to Employer in
connection with the employment of the Executive by Employer and that such
covenants are intended to protect Employer against the competition by the
Executive, within the terms stated, to the fullest extent deemed reasonable and
permitted in law and equity. In the event that the foregoing limitations upon
the conduct of the Executive are beyond those permitted by law, such
limitations, both as to time and geographical area, shall be, and be deemed to
be, reduced in scope and effect to the maximum extent permitted by law.
12. Injunctive Relief: The Executive acknowledges that the injury
to the Employer resulting from any violation by him of any of the covenants
contained in this Agreement will be of such a character that it cannot be
adequately compensated by money damages, and, accordingly, the Employer may, in
addition to pursuing its other remedies, obtain an injunction from any court
having jurisdiction of the matter restraining any such violation.
13. Representation of Executive: The Executive represents and
warrants that neither the execution and delivery of this Agreement nor the
performance of his duties hereunder violates the provisions of any other
agreement to which he is a party or by which he is bound.
14. Parties; Non-Assignability: As used herein, the term the
"Employer" shall mean and include the Employer, its Parent and any subsidiary
thereof and any successor thereto unless the context indicates otherwise. Any
assignment of this Agreement shall be subject to the provisions of Section 8(g).
This Agreement and all rights hereunder are personal to the Executive and shall
not be assignable by him and any purported assignment shall be null and void and
shall not be binding on the Employer.
15. Entire Agreement: This Agreement contains the entire agreement
between the parties hereto with respect to the transactions contemplated herein
and supersedes all previous representations, negotiations, commitments, and
writing with respect thereto.
16. Amendment or Alteration: No amendment or alteration of the
terms of this Agreement shall be valid unless made in writing and signed by all
of the parties hereto.
17. Choice of Law: This Agreement shall be governed by the laws of
the State of Georgia.
18. Arbitration: Any controversy, claim, or breach arising out of
or relating to this Agreement or the breach thereof shall be settled by
arbitration in Marietta Georgia in accordance with the rules of the American
Arbitration Association and the judgment upon the award rendered shall be
entered by consent in any court having jurisdiction thereof.
19. Notices: Any notices required or permitted to be given under
this Agreement shall be sufficient if in writing, and if sent by registered mail
to the residence of the Executive, or to the principal office of the Employer,
respectively.
20. Waiver of Breach: The waiver by any party hereto of a breach
of any provision of this Agreement shall not operate or be construed as a waiver
of any subsequent breach by any of the parties hereto.
21. Binding Effect: The terms of this Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
personal representatives, heirs, administrators, successors, and permitted
assigns.
6
PENN-AKRON CORPORATION
EMPLOYMENT AGREEMENT FOR: XXXXXXX X. XXXXXX
JANUARY 1, 2000
PAGE 6 OF 6
22. Gender: Pronouns in any gender shall be construed as
masculine, feminine, or otherwise as the context requires in this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.
PENN-AKRON CORPORATION
By:
----------------------------
Xxxxxxx X. Xxxxxx
Chairman of the Board of Directors, President
EXECUTIVE:
By:
----------------------------
Xxxxxxx X. Xxxxxx
