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Exhibit 10.1
EMPLOYMENT AGREEMENT
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OCTOBER 1, 1998
PAGE 1 OF 11
THIS EMPLOYMENT AGREEMENT (this Agreement) is made in Medina, Ohio and
is entered into on this 29th day of September, 1998, and effective as of October
1, 1998, by and between Corrpro Companies, Inc., an Ohio corporation (the
Company), and Xxxxxxx X. Xxxxx (Executive).
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.
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(a) TERM. The Company shall employ Executive, subject to the
provisions of this Agreement, for the period effective
October 1, 1998 and ending on March 31, 2001. This Agreement
at all times may otherwise be terminated in accordance with
the provisions of this Agreement.
(b) SUBSEQUENT TERM. Executive and the Company may, but shall be
under no obligation to, negotiate terms and conditions of
any subsequent term of employment. In the event, however,
that Executive remains in the employ of the Company after
the term of this Agreement without the parties having
entered into a new employment agreement or extending this
Agreement, then 1) the terms of this Agreement shall not be
applicable, 2) Executive shall be an employee-at-will
subject to the benefits, programs, and policies of the
Company then in effect, and 3) either party may terminate
the employment relationship at any time with or without
cause.
(c) DUTIES. During his employment pursuant to this Agreement,
Executive shall serve as Senior Vice President of Asia
Pacific and Australia of the Company, and shall be
responsible for the duties attendant to such office.
Executive shall report to the Chief Executive Officer (or
such other officer as determined by the Chief Executive
Officer), and shall be subject to the policies and
procedures adopted by the Company from time to time.
Executive agrees to serve as an officer or director of such
of the Company's subsidiaries or affiliates as the Company
may reasonably request.
(d) 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
his current positions, authority, duties, responsibilities
and status with the Company, or (ii) materially change his
title as currently in effect, or (iii) require Executive to
perform duties which would necessitate changing his present
residence, or (iv) remove him from, or fail to re-elect him
to, any of such positions, except in connection with the
termination of his employment as provided for in this
Agreement. 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.
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SECTION 2 - COMPENSATION AND BENEFITS.
(a) BASE SALARY. During his employment pursuant to this
Agreement, Executive shall receive an annual base salary of
One Hundred Thirty Five Thousand Dollars ($135,000) as
compensation for his services to the Company (the Base
Compensation), such compensation to be payable in regular
installments in accordance with Company policy for salaried
employees.
(b) SALARY ADJUSTMENTS. Effective as of the first day of each
fiscal year of the Company during Executive's employment
pursuant to this Agreement, the Base Compensation shall be
subject to review and a recommendation by the Chief
Executive Officer of the Company to the Board of Directors
(or its designated committee) and any adjustment shall be
subject to the approval of the Board or its designated
committee. In the event the Base Compensation is adjusted,
such adjusted Base Compensation (adjusted either upward or
downward) shall be payable to Executive under this Agreement
for that fiscal year; provided that any downward adjustment
shall be limited to ten percent (10%) of Base Compensation
unless the Base Compensation of all Senior Level Executives
(all persons with the title Vice President and above
employed by the Company) of the Company are similarly
affected by a reduction in excess of 10%.
(c) VACATION. Executive shall be entitled to four weeks of paid
vacation each year of this Agreement to be taken in
accordance with Company policy then in effect.
(d) ANNUAL BONUS PLAN. Executive shall be a participant in the
Company's annual bonus plan subject to the attainment of
performance objectives and other provisions of such plan as
in effect each year of this Agreement.
(e) BENEFIT PLANS. During his 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 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 of Directors of
the Company (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.
(f) 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 as other Senior
Level Executives in all
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EMPLOYMENT AGREEMENT
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OCTOBER 1, 1998
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fringe benefits provided such personnel, such as sick pay
and company car or car allowance.
(g) EXPENSE REIMBURSEMENTS. The Company shall reimburse, in
accordance with Company policy, Executive's ordinary and
reasonable business expenses, including professional dues
and expenses, incurred in furtherance of Executive's
performance of Executive's duties under this Agreement.
SECTION 3 - TIME COMMITMENT AND PERFORMANCE. Executive shall devote
his best efforts and all of his business time, attention, and skill to the
business and the operations of the Company and shall perform his duties and
conduct himself at all times in a manner consistent with his appointment as
Senior Vice President of Asia Pacific and Australia of the Company; except,
however, Executive may serve on corporate, civic, or charitable boards or
committees and manage his 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 Chief Executive Officer
reasonably informed of Executive's commitments.
SECTION 4 - COMPETITIVE ACTIVITY. From the effective date of this
Agreement and one (1) year following the later of (i) termination of Executive's
employment with the Company, or (ii) termination of any consulting agreement
which the parties may enter into immediately subsequent to termination of
Executive's employment, Executive will not, directly or indirectly, either for
himself or on behalf of any other corporation, partnership, person, group, or
entity:
(a) enter into any contract or agreement, or own, directly or
indirectly, any interest in, or engage in or conduct in any
manner or capacity (whether as shareholder, consultant,
advisor, principal, agent, partner, officer, director,
employee, or otherwise), any business competitive with any
line of business then being conducted or planned to be
conducted by the Company;
(b) attempt to divert or take away, in any manner, the business
or patronage of any customer or potential customer of the
Company or otherwise take from or deprive the Company of any
business opportunity;
(c) attempt to hire or employ, whether as an employee, agent,
independent contractor or otherwise, any employee of the
Company; or
(d) materially interfere, in any manner, with the business,
trade, good will, sources of supply, or customers of the
Company.
For purposes of this Section 4, there shall be disregarded any
interest of Executive arising solely from the ownership of less than a five
percent (5%) equity interest in a corporation whose stock is regularly traded on
any national securities exchange or regularly traded in the over-the-counter
market. Executive acknowledges and agrees that the restrictions contained in
this Section 4 are reasonable and
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OCTOBER 1, 1998
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necessary for the protection of the business
interests of the Company and that such restrictions are not unduly burdensome in
scope or duration.
SECTION 5 - PROPRIETARY INFORMATION/INVENTIONS.
(a) 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 Company employees or authorized representatives, or
in the ordinary course of business consistent with Company
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:
(a) the Company's customer or prospective
customer lists;
(b) information concerning the Company's
promotional, pricing, or marketing
practices;
(c) the Company's business records; and
(d) the Company's trade secrets and other
confidential and proprietary
information.
Upon termination of 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
which cannot be returned.
This Section 5 shall survive the termination of this Agreement.
(b) 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 and for a period of one year
thereafter, which are along the lines of the business, work
or investigations of the Company or which 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. There shall be excluded from the operation of
this Agreement the Executive's inventions and improvements,
patented and unpatented, which were made prior to
Executive's employment by the
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EMPLOYMENT AGREEMENT
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OCTOBER 1, 1998
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Company, and which, if Executive has any such inventions,
are listed on an attached exhibit.
SECTION 6 - COMPENSATION DURING DISABILITY. Executive shall receive
his Base Compensation (net of applicable withholdings) during the first ninety
(90) business days of absence due to Disability (as hereinafter defined). In the
event of Executive's Disability and a determination by the Board of Directors
that sufficient reasonable accommodations for the Disability cannot be made, the
Company may terminate Executive's employment under this Agreement. If the
Company terminates Executive's employment under this Agreement because of
Executive's Disability, the Company shall pay to Executive the amounts, and
provide to Executive the benefits, specified in Section 7 hereof. The amount of
benefits to be paid by the Company to Executive under this Section 6 or under
Section 7 shall be reduced by any amount paid or to be paid pursuant to Company
sponsored disability plans. For purposes of this Agreement, Disability shall
mean Executive's inability, through physical or mental illness or accident or
other cause, to perform his major and substantial duties on a full time basis as
determined by a physician hired by the Board of Directors for this determination
(the ACompany Physician). If the physician regularly attending Executive (the
Executive Physician) disagrees with the opinion of the Company Physician, the
Company Physician and the Executive Physician shall choose a third consulting
physician (the expense of which shall be borne by the Company), and the written
opinion of the third consulting physician shall be conclusive as to such
disability. In conjunction with this Section 6, Executive consents to such
examination, to furnish any medical information requested by any examining
physician, and to waive any applicable physician-patient privilege that may
arise because of such examination. All physicians, except the Executive
Physician, selected hereunder must be board-certified in the specialty most
closely related to the nature of the disability alleged to exist.
SECTION 7 - RESIGNATION DUE TO COMPANY FAILING TO HONOR ITS
OBLIGATIONS AND TERMINATION WITHOUT GOOD CAUSE OR DUE TO DISABILITY.
(a) GENERALLY. Executive may resign his employment and terminate
this Agreement if the Company fails to honor its
obligations, subject to the procedures as provided in this
Section 7. The Company may terminate Executive's employment
for any reason at any time upon 30 days notice to Executive,
provided that the Company pay Executive the amounts as
determined in this Section 7. Anything to the contrary
contained in this Agreement notwithstanding, (i) if 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 his 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 8), or (iii) if
Executive's employment terminates by reason of Disability as
provided for in Section 6 hereof, Executive shall be
entitled to receive and the Company shall pay to Executive
the following:
(1) SALARY. Executive's Base Compensation earned through the
date of resignation
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OCTOBER 1, 1998
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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.
(2) SEVERANCE. Severance payments for a period of one year (two
years if Executive is terminated by the Company without Good
Cause within the period three months before or twelve months
after a Change in Control as defined in EXHIBIT A) shall be
paid in consecutive periodic payments commencing on the
first pay day in the month following such resignation or
termination in the aggregate amount (net of any required
withholdings and Disability payment offsets as provided in
Section 6) equal to one year (two years if Executive is
terminated by the Company without Good Cause within the
period three months before or twelve months after a change
in Control as defined in EXHIBIT A) of Executive's Base
Compensation then in effect, provided that in the event of
Executive's death prior to the receipt of all payments, any
remaining payments shall cease to be made. During the period
which severance is payable, the Company agrees to provide,
through a group life insurance arrangement or individual
life insurance policy or otherwise, life insurance with a
death benefit at least equal to the remaining severance
payments. Upon Executive's death during the severance period
and prior to receipt of all severance payments, the death
benefit shall be payable to Executive's designated
beneficiary or, if none, to Executive's estate.
(3) BENEFITS. Following any resignation or termination for which
a payment under Section 7(a)(2) is owing, Executive, or his
spouse and eligible dependents in the event of Executive's
death, shall continue to participate at the expense of the
Company for a period of twelve (12) months following such
resignation or termination in the same or comparable
hospital, medical, accident, disability and life insurance
benefits as Executive participated in immediately prior to
resignation or termination of his employment unless by law,
the terms of any insurance policy or the terms of the
applicable benefit plans, continued coverage is not
permitted. Executive and 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. To the extent that during
Executive's employment, any such benefits were part of a
program of benefits for Senior Level Executives of the
Company, generally, then any subsequent modification,
substitution, or termination of any such benefits,
generally, shall also apply to Executive and to the benefits
available to Executive pursuant to this Section 7(a)(3).
(4) EARLY CESSATION OF BENEFITS. All benefits (other than those
with respect to which continuation is required by law) under
Section 7(a)(3) above shall cease upon the death of
Executive and his spouse.
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OCTOBER 1, 1998
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(5) ANNUAL BONUS PLANS. An amount equal to a full year's
participation in the annual bonus plan then in effect as
provided for in Section 2 hereof shall be paid to Executive
within the time period prescribed by such plan, (i.e. the
Executive will be paid based upon actual results as if the
Executive had been employed the full twelve months and had
received the full twelve month Base Compensation). In
addition, any payments due Executive under the incentive
plans then in effect as provided for in Section 2 hereof
(other than any annual bonus plans) in accordance with the
terms of such plans shall be paid to Executive within the
time period prescribed by such plans.
(b) PROCEDURES. For purposes of this Section 7, the following procedure
shall be used to determine ---------- whether the Company has failed
to honor any of its obligations under this Agreement; (i) Executive
shall submit a claim to the Company's Board of Directors specifically
identifying the nature of the failure; (ii) within thirty (30) days of
receipt of such claim, the Board of Directors shall determine whether
they agree with Executive that a failure has occurred and shall
communicate, in writing, their determination to Executive; and (iii)
if Executive disagrees with the determination of the Board of
Directors, Executive, within ten (10) days of Executives' receipt of
such determination, may submit the claim to arbitration in accordance
with the provisions of Section 16 of this Agreement, and such
determination shall be final and binding upon the Company and
Executive.
(c) SOLE REMEDY. The payments provided in this Section 7 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 7 (other than payments due to Disability) upon the
receipt of a release and covenant not to xxx in a form reasonably
satisfactory to the Company.
SECTION 8 - TERMINATION FOR GOOD CAUSE.
(a) 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 AGood Cause shall mean:
(1) personal dishonesty within the course of employment with the
Company which evidences a want of integrity or is a breach
of trust;
(2) persistent failure to abide by reasonable rules and
regulations governing the transaction of business of the
Company as the Company's Board of Directors may from time to
time adopt or approve;
(3) persistent inattention to duties, or the commission of acts
within employment
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EMPLOYMENT AGREEMENT
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OCTOBER 1, 1998
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with the Company amounting to gross negligence or willful
misconduct.
(4) misappropriation of funds or property of the Company or
committing any fraud against the Company or against any
other person or entity in the course of employment with the
Company;
(5) misappropriation of any corporate opportunity, or otherwise
obtaining personal profit from any transaction which is
adverse to the interests of the Company or to the benefits
of which the Company is entitled;
(6) The conviction of a felony; or
(7) any material violation of the terms of this Agreement.
(b) PROCEDURES. Executive's employment shall in no event be considered to
have been terminated by the Company for Good Cause if such termination
took place as the result of (i) bad judgment or negligence, or (ii)
any act or omission reasonably believed in good faith to have been in
or not opposed to the interest of the Company. Executive shall not be
deemed to have been terminated for Good Cause unless and until there
shall have been delivered to him a copy of a resolution duly adopted
by the affirmative vote of not less than a majority of the entire
membership of the Board of Directors (excluding Executive if a member
of the Board) at a meeting of the Board (after reasonable notice to
Executive and an opportunity for him, together with his 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 clauses (a)-(c),(e) and (g) 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.
(c) 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 his Base Compensation 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 9 - VOLUNTARY TERMINATION OTHER THAN SECTION 7. Executive may
voluntarily terminate his employment with the Company under this Agreement,
other than as provided in Section 7 hereof, upon not less than ninety (90) days
prior written notice to the Company. In the event that Executive terminates his
employment pursuant to this Section 9, the Company shall have no further
obligation to Executive under this Agreement except to pay his Base Compensation
and unused vacation earned through the date of resignation and to perform such
other obligations as imposed by law.
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EMPLOYMENT AGREEMENT
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SECTION 10 - TERMINATION UPON DEATH. Executive's employment under this
Agreement shall terminate upon the death of Executive. Upon such termination,
Executive's designated beneficiary, or his personal representative shall receive
the payments/benefits described below from the Company:
(a) SALARY. Executive's unpaid Base Compensation 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. An amount equal to a full year's participation in the
annual bonus plan then in effect as provided for in Section
2(d) hereof shall be paid within the time period prescribed
by such plan (i.e. the Executive will be paid based upon
actual results as if the Executive had been employed the
full twelve months and had received the full twelve month
Base Compensation).
(c) BENEFITS. Benefits will continue for Executive's spouse and
eligible dependents in accordance with Company policy and as
required by law.
SECTION 11 - POST TERMINATION CONSULTING AND COOPERATION. For a period
of six (6) months following the termination of Executive's employment under this
Agreement, regardless of whether such termination is by Executive or by the
Company or whether it is with or without Good Cause, Executive, at the sole
discretion of the Company, shall provide the Company and its designated agents,
advisors, and executives with such consultation as the Company may reasonably
require up to a maximum of twenty (20) hours per week. However, Executive shall
have no consulting obligation under this Section 11 if he resigns under
circumstances, which entitle him to payments under Section 7 hereof. Company
shall pay Executive an hourly rate of one hundred fifty dollars ($150.00) per
hour and reimburse Executive for all reasonable expenses and out-of-pocket costs
incurred in connection with fulfilling his obligations under this Section 11.
The Company shall endeavor to schedule such consulting so that Executive's
obligations under this Section 11 to assist Company shall not unreasonably
interfere with Executive's business prospects or responsibilities to a new
employer.
SECTION 12 - 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 13 - 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
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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.
SECTION 14 - 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.
SECTION 15 - 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, his 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.
SECTION 16 - 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 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 by the Company.
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.
SECTION 17 - AMENDMENT. This Agreement may be amended only by a
written document signed by both parties.
SECTION 18 - 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.
SECTION 19 - 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.
SECTION 20 - PRIOR AGREEMENTS. This Agreement supersedes in all
respects all prior agreements between the parties, whether written or oral,
regarding the subject matter hereof, including, but not limited to, the
employment agreement entered into between the parties effective April 1, 1997.
SECTION 21 - RESTRICTIONS OF PAYMENTS OR PERFORMANCE. To the extent
the Company is unable to make any of the payments or perform any of the
obligations hereunder due to restrictions imposed by law, by the Company's
Articles of Incorporation or Code of Regulations, or by loan agreements or other
contracts to which the Company is or becomes party to, the Company agrees to
take such reasonable steps as are necessary to remove such restrictions. In the
event the Company is unable to remove such restrictions, Executive and the
Company shall enter into negotiations to effect
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reasonable alternatives. The Company's obligations shall be suspended until such
time as such restrictions are removed or such reasonable alternatives are
effected.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
CORRPRO COMPANIES, INC.
By:
--------------------------------
Its:
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COMPANY
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EXECUTIVE
