EXHIBIT 10.12
AGREEMENT AND GENERAL RELEASE
This AGREEMENT AND GENERAL RELEASE (the "Agreement") is made by and between
Xxxxxx X. Xxx ("Executive") and Corrpro Companies, Inc. for itself and for its
subsidiary companies, (collectively herein referred to, unless the context
requires otherwise, as "Corrpro" or the "Company") and is effective on the 8th
calendar day after Executive signs this Agreement (the "Effective Date").
WHEREAS, Executive and the Company are parties to an employment agreement
effective as of March 31, 2004 (the "Employment Agreement").
WHEREAS, the Company has offered to make the payments and perform the
obligations of this Agreement in exchange for Executive's agreement to amend the
Employment Agreement, to enter into the general release set forth in this
Agreement, and to perform the obligations of this Agreement, all as provided
below.
WHEREAS, Corrpro and Executive freely and voluntarily have agreed to enter into
this Agreement.
THEREFORE, in consideration of the above recitals and promises contained in this
Agreement, Corrpro and Executive agree as follows:
1. CONSIDERATION AND OTHER COMPENSATION.
a. Consideration. In consideration of Executive's promises and
obligations hereunder, including, without limitation, those related to Age
Claims, Corrpro and Executive agree:
(i) SEVERANCE. Corrpro shall pay to Executive severance
payments for a period of two (2) years, which shall be paid in
consecutive periodic payments commencing on the first pay day
following the Effective Date in the aggregate amount (net of any
required withholdings) equal to twenty-four (24) months of
Executive's Base Compensation of $285,000, for an aggregate payment
under this subsection 1.a.(i) of $570,000, provided that in the
event of Executive's death prior to the receipt of all payments, any
remaining payments shall be made in a lump sum to Executive's
designated beneficiary or, if none, to Executive's estate.
(ii) BENEFITS. Executive shall continue to participate at the
expense of the Company for a period of twenty-four (24) months in
the same or comparable hospital, medical, accident, disability and
life insurance benefits as Executive now participates in as of the
Effective Date unless by law, by the terms of any insurance policy
or by the terms of the applicable benefit plans, continued coverage
is not permitted, provided that the Company at its sole option may
elect at any time subsequent to termination of Executive's
employment to pay Executive (x) the amount of premium actually being
paid by Executive for
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April 30, 2004
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equivalent coverage, provided Executive submits reasonable
substantiation therefore, or (y) if such substantiation is not
submitted, the equivalent of the amount of the monthly premiums
(determined by reference to the amount charged generally for
continuation coverage for terminated employees). Executive and his
eligible dependents may continue coverage under such benefit plan
for subsequent periods and subject to applicable premium
contributions, to the extent permitted by law or by such plans. Any
subsequent modification, substitution, or termination of any such
benefits, generally, shall also apply to Executive and to the
benefits available to Executive.
(iii) FISCAL 2005 ANNUAL BONUS PLAN. Executive shall be
eligible to earn and be paid 1/12 year's participation in the
Company's annual bonus plan in effect during the fiscal year ending
March 31, 2005, to be paid within the time period prescribed by such
plan. For purposes of the fiscal 2005 annual bonus plan, Executive
shall be eligible for 1/12 of Executive's fiscal 2005 target bonus,
which target bonus the parties agree shall be $100,000. Accordingly,
upon the attainment of the corporate performance measures of such
bonus plan, Executive would be entitled to a bonus of 1/12 of
$100,000, or $8,333. The actual amount of any actual payment earned
is subject to the provisions of the fiscal 2005 plan, including the
calculations of corporate performance targets and targeted bonuses
earned.
b. Accrued Vacation and Expenses/Fiscal 2004 Bonus
Plan/Retirement Income/Adequacy of Consideration/Acknowledgement.
(i) Corrpro and Executive agree that Corrpro shall pay
Executive in accordance with the following:
(a) SALARY/UNUSED VACATION. Any unpaid amount of
Executive's Base Compensation earned through the date of
Executive's termination and $4,385 which represents a lump sum
payment for four (4) days of unused vacation (five
carryforward days from fiscal 2004 plus two vacation days
accrued in fiscal 2005 less three vacation days used in fiscal
2005) in accordance with Company policy. Such amounts shall be
paid on or before the next regularly scheduled pay-date after
the effective date of Executive's termination;
(b) FISCAL 2004 BONUS PLAN. Executive shall be paid an
amount equal to a full year's participation in the annual
bonus plan in effect during the Company's fiscal year ended
March 31, 2004 in accordance with, and subject to the
attainment of the performance targets contained in the fiscal
2004 annual bonus plan. The Company shall make any payment
earned under such plan within the time period prescribed by
such plan.
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April 30, 2004
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(c) RETIREMENT INCOME. Executive shall be paid the
retirement income provided in Section 2.7 of the Employment
Agreement, payable in accordance with, and subject to the
provisions (including certain forfeiture provisions) of
Section 2.7 of the Employment Agreement.
(d) EXPENSE REIMBURSEMENT. In accordance with Company
policy, Executive's outstanding reimbursable business expenses
within two (2) weeks of submission by Executive; provided
Executive submits such expenses within two (2) weeks after the
Effective Date.
(ii) Executive's continued eligibility for benefits under
Corrpro's group welfare plans, such as health, life insurance and
disability, shall be in accordance with applicable plan documents
and all applicable laws.
c. Sufficiency of Consideration/No Admission of Liability. Except
for amounts payable set forth in the immediately preceding two
subsections, 2.b.(i) and 2.b.(ii), the amounts paid under this Agreement
represent payments or consideration in addition to those to which
Executive would be entitled if this Agreement were not executed. Executive
agrees and acknowledges that the sums payable and other consideration
provided by Corrpro under this Agreement are sufficient and adequate to
support the amendment to the Employment Agreement and Executive's general
release and other obligations under this Agreement. It is further
understood and agreed that Executive's desire and willingness to enter
this Agreement are not to be construed or treated as an admission of
liability of any kind whatsoever at any time or in any manner upon the
part of any Released Party for any purpose, and any liability is hereby
expressly denied.
d. Indemnification Agreement. Corrpro and Executive acknowledge
that the provisions of the Indemnification Agreement dated as of November
2, 2000 shall remain in full force and effect as provided therein.
e. Receipt of Compensation, Amounts, and Consideration. Except
for (1) the amounts set forth or referenced in this Agreement, (2) the
Retirement Income referred to in Section 2.7 of the Employment Agreement,
and (3) the consideration set forth in that certain Amendment and
Termination Agreement executed by and between the Company and Executive in
October 2003 in connection with the termination of Executive's Change in
Control Agreement, Executive has received from the Released Parties all
compensation, amounts and consideration to which Executive is entitled
under all arrangements, programs, policies, and plans of the Released
Parties (subject to, in the case of the Company's 401(k) retirement
savings plan and other Company medical and welfare benefit plans,
application by Executive for distribution of such benefits in accordance
with the terms of such plans), including but not limited to vacation
policies, incentive plans, stock option plans (subject to Executive's
taking such actions required under such plans to exercise exercisable
options), bonus arrangements, fringe benefit policies and reimbursement
policies.
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April 30, 2004
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f. Amendment of Employment Agreement.
(i) Term of Employment Agreement. Corrpro and
Executive agree that the Employment Agreement is hereby
amended to provide that its term shall expire on the Effective
Date.
(ii) Severance. Corrpro and Executive agree that the
Employment Agreement is hereby amended to provide that no
severance payments shall be made to Executive under the
Employment Agreement. It is expressly understood and
acknowledged by Executive that the payments under this
Agreement are in lieu of any severance payments or severance
benefits otherwise provided for in the Employment Agreement.
(iii) Continuing Obligations under Employment Agreement.
Executive acknowledges and agrees that other provisions of the
Employment Agreement that have not been amended by this
Agreement, including but not limited to the provisions
relating to Competitive Activity/Other Restrictions (Section
4) Proprietary Information/Intellectual Property (Section 5),
Post Termination Consulting and Cooperation (Section 11), and
Breaches and Remedies (Section 12), survive the termination of
Executive's employment with the Company.
g. Continuing Service on Corrpro Board of Directors. Unless
otherwise agreed to by the Company in writing, Executive agrees to
continue to serve on Corrpro's Board of Directors, and to stand for
re-election, without additional compensation. Executive agrees to execute
the Waiver of Director's Compensation in substantially the form attached
hereto as Exhibit A. The Company agrees to reimburse Executive for his
ordinary and reasonable expenses incurred in furtherance of his
performance of his duties as a Board member. The provisions, relating to
the exercisability of Executive's stock options, of that certain Amendment
and Termination Agreement executed by and between the Company and
Executive in October 2003 in connection with the termination of
Executive's Change in Control Agreement shall continue to apply in
accordance with their terms.
2. GENERAL RELEASE.
a. General Release. In consideration of the payments and promises
made by Corrpro in this Agreement, Executive hereby releases and forever
discharges Corrpro and its subsidiaries, Xxxxxxx Partners III, LP and its
affiliates, and all of their officers, directors, employees, insurers,
stockholders, predecessors, successors, and assigns (collectively the
"Released Parties"), from any and all actions, causes of action, claims or
liabilities of any kind which could be asserted against the Released
Parties, including but not limited to those arising out of or related to
Executive's employment with and/or separation from employment with the
Released Parties, and any other events and
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April 30, 2004
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occurrences up to and including the Effective Date. These released claims
include, but are not limited to:
(i) claims, actions, causes of action or liabilities arising
under the Age Discrimination in Employment Act, as amended (29
U.S.C. Section 621-634), and any other federal, state or municipal
employment discrimination statutes pursuant to which claims based on
age may be asserted against the Company (the claims referred to in
this subsection 2.a.(i) are referred to in this Agreement and
General Release as "Age Claims"); and/or
(ii) claims, actions, causes of action or liabilities arising
under any federal, state or municipal employment discrimination
statutes, including, but not limited to Title VII of the Civil
Rights Act of 1964, 42 U.S.C. Section 2000e et seq., the Americans
With Disabilities Act, 42 U.S.C. Section 12101 et seq., the Family
and Medical Leave Act, 29 U.S.C. Section 2601 et seq., the Labor
Management Relations Act, 29 U.S.C. 141 et seq., the Ohio Civil
Rights Act, Ohio Rev. Code Section 4112.01 et seq., the Ohio
Whistleblower Protection Act, Ohio Rev. Code 4113.51 et seq., all as
amended.
(iii) any other claim whatsoever, including, but not limited
to, claims based on and any and all claims for wrongful termination
of employment, public policy wrongful discharge, retaliatory
discharge, fraud, misrepresentation, defamation, libel, slander,
infliction of emotional distress, breach of contract, breach of the
implied covenant of good faith and fair dealing, invasion of
privacy, attorneys' fees, and any and all other claims or causes of
action, however denominated. Executive specifically releases, by way
of example, any claim he may have sounding in breach of the parties'
Employment Agreement.
(iv) It is expressly understood by Corrpro and Executive that
Executive does not waive rights or claims that may arise after the
Effective Date and which are not the subject of this Agreement.
b. Agreement not to Xxx or Initiate Actions. Executive
represents, promises and agrees that: (i) neither he nor any agent acting
on his behalf has commenced or prosecuted or will commence or prosecute
any complaint, lawsuit or proceeding in any court against any of the
Released Parties on the basis of any claims, causes of action, or other
matters within the scope of Section 2.a. above; (ii) if Executive does
file such a complaint, lawsuit or proceeding, he will not oppose a motion
to dismiss filed by any of the Released Parties based on this Agreement;
and (iii) if any federal, state or local administrative agency assumes
jurisdiction over any complaint or charge against any of the Released
Parties, Executive will request the withdrawal of such complaint or
charge, and will refuse to accept any relief offered or obtained as a
result of such an action. Provided, however, that Executive does not waive
or release his right to challenge the validity of this Agreement under the
Older Workers Benefit Protection Act of 1990, 29 U.S.C. Section 626(f), in
an appropriate proceeding. Executive acknowledges that neither this
paragraph nor this Agreement as a whole are intended to be retaliatory.
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April 30, 2004
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c. Reinstatement or Future Employment. Executive forever gives
up, waives, and releases any right or claim to reinstatement or future
employment by the Released Parties after the separation of his employment
from Corrpro.
3. CONTINUING OBLIGATIONS.
a. Return of Information. Except for confidential information
reasonably necessary for Executive's continuing service on the Corrpro
Board of Directors, which Confidential Information Executive agrees to
return upon request of the Company, Executive represents and warrants that
Executive has returned to Corrpro all confidential information of the
Company, including, without limitation, information received under
confidential conditions as well as other technical, business or financial
information the use or disclosure of which by Executive might reasonably
be construed to be contrary to the interest of the Released Parties. In
connection with and in addition to such confidential information, to the
extent not already returned and except as reasonably necessary for
Executive's continuing service on the Corrpro Board of Directors,
Executive will by the Effective Date return to Corrpro all related
reports, files, memoranda, records, software, credit cards, door and file
keys, and instructional manuals and other physical or personal or
intangible property (including any magnetic or other media such as
computer files, video or audio tape) which Executive received, prepared or
helped prepare in connection with his employment with Corrpro. Except as
provide above, Executive agrees that he will not keep any copies or
excerpts of any above items.
b. Confidentiality/Disparagement/Public Relations. Executive and
Corrpro acknowledge and agree that the terms and facts of the Agreement
will be kept confidential and that Executive and Corrpro will not
hereafter disclose any information concerning this Agreement to any third
person except (i) Executive may disclose information to Executive's
immediate family, his attorney and his professional advisors provided such
persons agree to keep such information confidential, (ii) Corrpro may
disclose information to Corrpro's employees, lenders, or representatives
who need to know, or (iii) as required by law, including in applicable
filings with the Securities and Exchange Commission. Executive agrees to
refrain from making disparaging remarks or comments regarding Corrpro's or
the Released Parties' business, products, services, management, or
personnel, or Executive's employment relationship with the Company or the
termination thereof.
4. OTHER PROVISIONS.
a. Representations. Except as specifically set forth in this
Agreement, Executive acknowledges and agrees that in signing this
Agreement he does not rely and has not relied on any representation or
statement by any of the Released Parties or by any of the Released
Parties' agents, representatives or attorneys, with regard to the subject
matter, basis or effect of this Agreement or otherwise.
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April 30, 2004
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b. Binding Effect. This Agreement represents the entire agreement
between the parties and shall be binding upon Executive and upon his
heirs, administrators, representatives, executors, successors, and
assigns, and shall inure to the benefit of Released Parties and each of
them, and their heirs, administrators, representatives, executors,
successors, and assigns. This Agreement may not be assigned by Executive
without Corrpro's written consent.
c. Governing Law/Dispute Resolution/Headings. This Agreement
shall in all respects be interpreted, enforced and governed under the laws
of the State of Ohio. The parties agree that any dispute arising out of
this Agreement, except for disputes arising under Section 2.b. of this
Agreement or Sections 4 and 5 of the Employment Agreement which survive
its termination, shall be settled by 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. Costs of such arbitration,
including Executive's attorneys fees (to the extent such fees are
reasonable), shall be borne equally. Discovery shall be permitted in the
arbitration and the arbitrator shall have the authority to grant such
remedies as are available under applicable law. With respect to disputes
arising under Sections 4 and 5 of the Employment Agreement, Executive and
the Company consent and submit themselves to the jurisdiction of the
courts of the State of Ohio. Headings and titles in this Agreement are for
the convenience of the parties.
d. Severability. Should any provisions of the Agreement be
declared or be determined by any court of competent jurisdiction to be
illegal or invalid or unenforceable, the validity of the remaining parts,
terms or provisions shall not be affected thereby, and said illegally
invalid part, term, or provision shall be deemed not to be part of this
Agreement, it being the intention of the parties that their Agreement be
reformed to be enforceable to the fullest extent allowable.
e. Remedies for Breach. In the event Executive breaches Section
2.b. (agreement not to xxx or initiate actions) of this Agreement, 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, be entitled to enforce the provisions of Section 2.b. by
injunction or other equitable relief, without having to prove irreparable
harm or inadequacy of money damages or posting a bond or other financial
security therefore. In addition, in the event that Executive has been
found by a court of competent jurisdiction or pursuant to a binding
arbitration proceeding to have breached Section 2.b. (agreement not to xxx
or initiate actions) or Section 3 (Return of Information;
Confidentiality/Disparagement/Public Relations), other than in an
immaterial fashion, the Company shall be granted an award that Executive
shall return to the Company all payments made under Sections 1.a.(i) and
1.a.(iii) above to Executive under this Agreement, and the other
provisions of this Agreement shall remain enforceable.
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April 30, 2004
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5. CONSULTATION WITH COUNSEL; EXECUTION OF AGREEMENT.
a. Consultation with Legal Counsel/Review Period. Executive
acknowledges and agrees that this Agreement constitutes written notice to
him of his right to consult with an attorney of his choosing prior to
signing the Agreement. Executive also acknowledges and agrees that he has
been given a period of twenty-one (21) days within which to consider this
Agreement prior to his signing below. If the Agreement is not signed by
Executive within 21 days after it is presented to him, and no extension of
this time period has been granted in writing by Corrpro, the Company may
withdraw this Agreement. Executive also acknowledges and agrees that he
has been given a reasonable amount of time in which to review and consider
this Agreement and its monetary terms, including, without limitation,
those terms set forth and described in Section 1 above.
b. Revocation Period. Executive may revoke this Agreement at any
time during the Revocation Period, by delivering a signed letter of
revocation addressed to Corrpro. "Revocation Period" is the period
beginning the date Executive signs this Agreement and ending seven (7)
days thereafter. If Executive revokes this Agreement, this Agreement shall
become null and void, and, upon revocation, the provisions of the
Employment Agreement shall remain in full force and effect without regard
to the amendment provisions contained in this Agreement.
c. Execution of Agreement. By signing below, Executive
acknowledges that he is entering this Agreement freely and voluntarily,
and without coercion from anyone.
Executive has read this Agreement and fully understands it, having sought the
advice of independent counsel of his choice to the extent he has deemed
necessary.
Signed this ______________ day of ___________________, 2004.
Witnesses Xxxxxx X. Xxx
/s/ Xxxxxx X. Xxx 5/10/04 /s/ Xxxxxx X. Xxx 5/10/04
_____________________________ _____________________________
date date
Corrpro Companies, Inc.
By: /s/ Xxxxxx X. Xxxxx
_______________________________________
Title: President & CEO
____________________________________
5/10/04
_____________________________
date
