JPE, INC.
775 Technology Drive
Suite 200
Ann Arbor, Michigan 48018
May 27, 1999
Mr. Richard Chrysler
775 Technology Drive
Suite 200
Ann Arbor, MI 48018
Re: Your Employment Agreement with JPE, Inc.
Dear Mr. Chrysler:
We are pleased to offer you the position of President and Chief Executive
Officer of JPE, Inc. upon the following terms:
1. Background. As you know, pursuant to an Investment Agreement dated April
28, 1999 (the "Investment Agreement") among JPE, Inc., a Michigan corporation
("JPE"), ASC Holdings LLC, a Michigan limited liability company ("ASC"), and
Kojaian Holdings LLC, a Michigan limited liability company ("Kojaian"), each of
ASC and Kojaian are, among other things, today subscribing for a controlling
number of Common Shares and Preferred Shares of JPE. This employment agreement
(the "Agreement"), is being entered into pursuant to Section 6.2(h) of the
Investment Agreement. All capitalized terms not otherwise defined in this
Agreement shall have the meanings given them in the Investment Agreement.
2. Duties. During the Employment Term (as defined in paragraph 4), you
shall be employed as the President and Chief Executive Officer of JPE and such
JPE Companies as determined by JPE (collectively, the "Companies"). Subject to
direct reporting to and supervision by the Chairman of the Board of Directors of
JPE, your duties shall include the duties to be performed by the President and
Chief Executive Officer of the Companies. During the Employment Term you shall
devote your full working time and attention to the duties described in this
paragraph 2.
3. Compensation. Your annual salary as President and Chief Executive
Officer of the Companies shall be $300,000 payable in accordance with payroll
practices of the Companies in effect from time to time. All compensation and
benefits shall be subject to applicable federal, State and local withholding
taxes.
4. Term. The term of your employment (the "Employment Term") shall continue
until the earlier of (a) your death; (b) JPE's termination of your employment
with the Companies; (c) your voluntary termination of your employment with the
Companies; and (d) the two year anniversary of this Agreement.
5. Benefits. During the Employment Term:
(a) You shall be entitled to four (4) weeks paid vacation and you shall be
eligible to participate in the employee benefits coverages of JPE on the same
basis as other employees of JPE.
(b) The Companies shall reimburse you for all necessary and reasonable
business, travel and entertainment expenses incurred by you in the course of
performing your duties for the Companies. Reimbursement shall occur upon your
submission of written vouchers or expense statements indicating the amount of
the expense, the date the expense was incurred, the place the expense was
incurred, the purpose of the expense and when entertaining any client, the
referral source, prospective client or prospective referral source, and
identification of persons (including the names of the individuals present and
their businesses).
6. Termination; Termination Benefits.
(a) JPE is free to terminate your employment with the Companies for any
reason whatsoever, with fourteen (14) days' prior written notice to you. The
termination benefits described in this paragraph 6 shall be in lieu of any
termination or severance benefits required by the policy of the Companies or
applicable law, and shall constitute your sole and exclusive rights and remedies
with respect to the termination of your employment with the Companies. The
Companies may withhold from any payments made to you under this paragraph 6 all
federal, State, city or other taxes to the extent required by law.
(b) Upon your termination without Cause (as defined below), you shall
receive the difference between (1) $600,000 minus (2) the total salary paid to
you pursuant to this Agreement prior to the last day of your employment under
this Agreement, payable as if your employment continued throughout the full
Employment Term.
(c) If JPE terminates your employment for Cause, you shall receive the pro
rata portion of your salary under Paragraph 3 through the date of your
employment.
(d) For purposes of this Agreement:
(i) Termination for "Cause" means termination for (A) your material
breach of this Agreement, (B) fraud, (C) theft, (D) any other intentional
act or omission of moral turpitude which you know or reasonably should have
known would materially injure one or more of the Companies, or (E) any
deliberate action (or omission) by you which, in the reasonable
determination of JPE, you should have known constitutes malfeasance,
dereliction of duty, insubordination or refusal to follow direct, explicit
instructions or policies of one or more of the Companies; and
(ii) "Disability" means your inability, whether mental or physical, to
render services reasonably requested by JPE consistent with your positions
for two (2) consecutive months or eight (8) weeks during any four (4) month
period. If JPE and you are unable to agree whether you are Disabled, the
question shall be decided by a physician mutually agreed upon by JPE and
you and paid by JPE, whose determination shall be final and binding. If you
and JPE are unable to agree on a physician, you and JPE shall each choose
one physician who shall mutually choose a third physician, whose
determination shall be final and binding (which decision shall not be
subject to collateral attack for any reason absent manifest error, perjury
or misconduct) and which shall be enforceable by any Michigan Circuit
Court, which such court may render a judgment thereon.
(e) Notwithstanding anything in this Agreement to the contrary, upon the
termination of your employment you shall execute a release in the form of
Exhibit I to this Agreement (the "Release"); and you shall not be entitled to
receive any termination benefits under this paragraph 6 or otherwise unless you
have executed and delivered the Release.
7. Confidential Information.
(a) You recognize the unique value of the Companies' business and its
clients and agree that at such time as your employment with the Companies
terminate, you shall not for a period of one (1) year after the date of
termination (i) engage or attempt to engage, directly or indirectly, in the
solicitation of any business competitive with the business of the Companies,
(ii) divert (directly or indirectly) or attempt to divert in any manner
whatsoever from the Companies any business, employees, representatives, agents,
clients, suppliers or customers, distributors, or (iii) influence the Companies'
business relationships with any of its customers, employees or agents.
Notwithstanding the foregoing, if your employment was terminated for reasons
other than Cause, you may engage in the activities set forth in clause
(a)(i)-(ii) (other than the diversion or attempted diversion in any manner
whatsoever from the Companies of any employees, representatives or agents), upon
the earlier of (I) your notice to the Company to end any further payments under
paragraph 6(b) (and upon such notice, the Company shall be released from any
payments due and outstanding under paragraph 6(b)), or (II) upon the full
payment to you of the termination benefits set forth in paragraph 6(b).
Additionally, you shall not, at any time, either during or subsequent to the
termination of your employment by the Companies, disclose or use, directly or
indirectly, any confidential or proprietary information of the Companies which
you gained by reason of your employment, relating to the property, business and
affairs of the Companies, including, but not limited to, information concerning
the Companies' marketing and business methods, procedures and strategies,
products, services, manufacturing techniques, operations, businesses,
representatives, suppliers, distributors, employees, customers, fees, rates,
clients, mailing lists, trade secrets, plans for the development of new
services, and plans for the expansion into new areas or markets, financial
records, data, results of operations, billings and Propertiary Rights (the
"Confidential and Proprietary Information").
(b) Because of the special and unique character of the matters addressed in
paragraph 7(a), the violation of such paragraph may cause irreparable injury to
the Companies, the amount of which shall be extremely difficult, if not
impossible to determine and may not be adequately compensable by monetary
damages alone. Accordingly, the Companies may, in addition to pursuing its other
remedies, seek to obtain equitable and injunctive relief (including, but not
limited to, preliminary and permanent injunctions) from any court of competent
jurisdiction, as may be necessary to enjoin any such violation of the foregoing
restraints, and further, no bond or other security shall be required to obtain
such relief and shall be entitled to receive from you all costs associated with
its enforcement of such paragraph (including Fees and Costs).
8. Inventions, etc.
(a) Any inventions, improvements, discoveries, formulas or processes
relating to the business or products of the Companies, which you discover or
learn while employed by the Companies, at any time, shall be the sole and
absolute property of the applicable Company, which shall be the sole and
absolute owner of all patents and other rights associated therewith. In
addition, you shall assign to the applicable Company, all right, title and
interest to any and all information and ideas relating to the business and
products of such Company, discovered or learned by you while employed by such
Company.
(b) Because of the special and unique character of the matters addressed in
paragraph 8(a), the violation of such paragraph may cause irreparable injury to
the Companies, the amount of which shall be extremely difficult, if not
impossible to determine and may not be adequately compensable by monetary
damages alone. Accordingly, the Companies may, in addition to pursuing its other
remedies, seek to obtain equitable and injunctive relief (including, but not
limited to, preliminary and permanent injunctions) from any court of competent
jurisdiction, as may be necessary to enjoin any such violation of the foregoing
restraints, and further, no bond or other security shall be required to obtain
such relief.
9. Arbitration.
(a) The arbitration procedure set forth in this paragraph 9 shall be the
sole and exclusive method for resolving and remedying monetary claims arising
out of disputes regarding this Agreement (the "Disputes"); provided that nothing
in this paragraph 9 shall prohibit a party from instituting litigation to
enforce any Final Determination (as defined below) or to obtain injunctive
relief. Except as otherwise provided in this paragraph 9 or in the Commercial
Arbitration Rules of the American Arbitration Association as in effect at the
pertinent time, the arbitration procedures and any Final Determination hereunder
shall be governed by, and shall be enforced pursuant to, the Uniform Arbitration
Act.
(b) In the event that either party asserts that there exists a Dispute,
such party shall deliver a written notice to the other party specifying the
nature of the asserted Dispute and requesting a meeting to attempt to resolve
the same. If no such resolution is reached within ten (10) business days after
such delivery of such notice, the party delivering such notice of Dispute (the
"Disputing Person") may, within forty-five (45) business days after delivery of
such notice, commence arbitration by delivering to the other party a notice of
arbitration (a "Notice of Arbitration"). Such Notice of Arbitration shall
specify the matters as to which arbitration is sought, the nature of any
Dispute, the claims of the party and shall specify the amount and nature of any
damages, if any, sought to be recovered as a result of any alleged claim, and
any other matters required by the Commercial Arbitration Rules of the American
Arbitration Association as in effect at the pertinent time to be included
therein, if any.
(c)(i) The parties shall in good faith select one arbitrator to arbitrate
the dispute who shall resolve the dispute according to the procedures set forth
in this paragraph 9.
(c)(ii) If the parties are unable to agree upon an arbitrator pursuant to
paragraph 9(c)(i) within fifteen (15) business days, then each party shall
select one arbitrator within the next fifteen (15) business days. In the event
that either party fails to select an arbitrator as provided in this paragraph
9(c)(ii), then the matter shall be resolved by the arbitrator selected by the
other party. If each party chooses an arbitrator, then those arbitrators shall
select a third independent, neutral arbitrator expert in the subject matter of
the dispute, and the three arbitrators so selected shall resolve the matter
according to the procedures set forth in this paragraph 9. If the arbitrators
selected by the parties are unable to agree on a third arbitrator within fifteen
(15) business days, after their selection, the third arbitrator shall be
selected by the President of the American Arbitration Association.
(d) The arbitration shall be conducted in Ann Arbor, Michigan, under the
Commercial Arbitration Rules of the American Arbitration Association as in
effect from time to time, except as modified by the written agreement of the
parties, to this Agreement. The arbitrator(s) shall so conduct the arbitration
that a final result, determination, finding, judgment and/or award (the "Final
Determination") shall be made or rendered as soon as practicable, but in no
event later than one hundred (100) business days after the delivery of the
Notice of Arbitration nor later than ten (10) business days following completion
of the arbitration. The Final Determination must be agreed upon and signed by
the sole arbitrator or by at least two of the three arbitrators (as applicable).
The Final Determination shall be final and binding on all parties and there
shall be no appeal from or reexamination of the Final Determination, except for
fraud, perjury, or misconduct by an arbitrator prejudicing the rights of any
party and to correct manifest clerical errors. The prevailing party or parties
shall be entitled to Fees and Costs.
(e) Judgment may be entered upon the Final Determination by any court of
competent jurisdiction.
10. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with
the laws of the State of Michigan without regard to principles of conflicts of
law.
(b) The provisions of this Agreement shall be severable, and if any part of
any provision is held illegal, void, unreasonable in scope or otherwise
unenforceable, such provision may be changed or construed to the extent
reasonably necessary to make the provision, as so changed, legal, valid and
binding. If any provision of this Agreement is held illegal, void or invalid in
its entirety, the remaining provisions of this Agreement shall not in any way be
affected or impaired but shall remain binding in accordance with their terms.
(c) There is not, nor shall there be, unless in writing signed by both of
us, any express or implied agreement as to your continued employment with any of
the Companies after the Employment Term, as applicable, and any employment after
such Term shall be "at will" (i.e., terminable by either of us at any time with
or without cause or notice), with your position, salary, duties, and benefits to
be as we may mutually determine.
(d) This Agreement is personal to you and cannot be sold, assigned or
pledged by you; this Agreement may be assigned by JPE, provided that no such
assignment will relieve JPE of its obligations under this Agreement.
(e) Upon termination of your employment with JPE for any reason, you shall
immediately deliver and return to the Companies all memoranda, notes, records,
agreements, documents and other materials constituting Confidential and
Proprietary Information.
(f) This Agreement, the Investment Agreement and the Related Agreements (as
defined in the Investment Agreement), constitute the entire agreement between
the parties in connection with the subject matter addressed by this Agreement,
supercedes any and all other agreements, either oral or written, between the
parties with respect to the subject matter so addressed, and this Agreement may
not be modified orally, and no modification shall be effective unless in writing
and signed by JPE and you.
(g) This Agreement may be executed in counterparts, both of which together
shall be deemed to be an original of this Agreement.
(i) Paragraphs 6-10 shall survive the expiration of the Employment Term.
Again, we are pleased to offer you the employment and consultant positions
and hope to receive a positive response from you. Please indicate your
acceptance of this Agreement by dating and signing below.
Sincerely,
JPE, INC.,
a Michigan corporation
By: /s/ David L. Treadwell
---------------------------------
Name: David L. Treadwell
Its: Chairman
Dated: May 27, 1999
Accepted and Agreed to:
May 27, 1999
/s/ Richard R. Chrysler
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Richard Chrysler
EXHIBIT I
SEPARATION AGREEMENT
AND RELEASE OF ALL LIABILITY
This Separation Agreement and Release of All Liability (this
"Agreement") is made on [________], between (i) Richard Chrysler ("Chrysler")
and (ii) JPE, Inc., a Michigan corporation. As used in this agreement, "JPE"
means JPE, Inc., its predecessors, successors, Subsidiaries, Divested
Subsidiaries, ASC, Kojaian, assigns, parents, subsidiaries, divisions and/or
affiliates (whether incorporated or unincorporated), and all of the past and
present directors, officers, trustees, employees and agents (in their individual
and representative capacities) of each and any and all persons acting by,
through, or in concert with any of them. All capitalized terms not defined in
this Agreement shall have the meanings given them in the Investment Agreement
dated April 28, 1999 among JPE, Inc., ASC Holdings LLC, a Michigan limited
liability company, and Kojaian Holdings LLC, a Michigan limited liability (the
"Investment Agreement"). This Agreement is being delivered pursuant to paragraph
6(e) of the Employment Agreement.
RECITALS
A. Chrysler has worked in the employ of JPE in various capacities.
B. Chrysler's employment with JPE terminated on [____________] (the
"Termination Date").
C. In consideration of certain payments to be made, and benefits to be
provided, by JPE to Chrysler, Chrysler has agreed to release JPE from any
liability to Chrysler.
Therefore, Chrysler and JPE agree as follows:
1. Chrysler resigned from all his positions with JPE, effective on the
Termination Date.
2. As Chrysler's sole and exclusive consideration, payments and benefits
with respect to the termination of his employment, he shall receive (a)
$________, payable as provided in paragraph 6(a) of the Employment Agreement,
plus (b) $1,000.00, which he acknowledges is sufficient consideration.
3. For the consideration described in this Agreement, Chrysler hereby fully
and forever releases, acquits and discharges JPE from all suits, claims or
actions, or any pending actions, claims or suits, in law or in equity, against
JPE on account of any employment related action or cause of action based upon
any facts, whether known or unknown, including all claims for wrongful
discharge, breach of contract, violation of the penal statutes, negligence of
any kind, intentional infliction of emotional distress, defamation and/or
discrimination on account of sex, age, race, disability, religion or nationality
which has or could have been alleged under any Law, including: Title VII of the
Civil Rights Act of 1964; the Age Discrimination in Employment Act; the
Rehabilitation Act of 1973; the Older Workers Benefit Protection Act; the
Americans With Disabilities Act; the Family and Medical Leave Act of 1993; and
all analogous Michigan Laws, including the Elliot-Larsen Civil Rights Act; and
any and all amendments to any of the foregoing. Chrysler is completely able to
perform the duties of his position at JPE, and has no disability recognized
under the Workers' Compensation Act or otherwise.
4. Except for actions or suits based upon breaches of the terms of this
Agreement, Chrysler hereby shall fully and forever refrain from commencing any
suits, claims or actions, or prosecuting any pending actions, claims or suits,
in law or in equity, against JPE on account of any employment related action or
cause of action based upon any facts, whether known or unknown, including all
claims for wrongful discharge, breach of contract, violation of the penal
statutes, negligence of any kind, intentional infliction of emotional distress,
defamation and/or discrimination on account of sex, age, race, handicap or
nationality which has or could have been alleged under any Law, including: Title
VII of the Civil Rights Act of 1964; the Age Discrimination in Employment Act;
the Rehabilitation Act of 1973; the Older Workers Benefit Protection Act; the
Americans With Disabilities Act; the Family and Medical Leave Act of 1993; and
all analogous Michigan Laws including the Elliot-Larsen Civil Rights Act; and
any and all amendments to any of the foregoing.
5. Chrysler shall maintain for all time as confidential, all Confidential
and Proprietary Information of JPE.
6. To the fullest extent permitted by Law, Chrysler shall not assist, aid
or communicate with, either orally or in writing, in any manner whatsoever, any
other person, corporation, firm, partnership or other entity, in or about any
action, cause of action, suit, claim, proceeding, litigation or other matter
against JPE unless required by lawfully issued subpoena power or court order. In
the event Chrysler is served with a subpoena or is required by court order to
testify in any type of proceeding involving JPE, Chrysler shall immediately
notify JPE by providing written notice within three (3) days in the manner and
to the addresses for ASC, Kojaian and JPE set forth for the delivery of notices
in the Investment Agreement.
7. This Agreement, which shall be effective and irrevocable immediately
upon the time limits described herein, reflects the entire agreement of Chrysler
and JPE relative to the subject matter hereof, and supersedes any previous
employment, consulting or similar agreement and other prior or contemporaneous
oral or written understandings, statements, representations or promises.
8. Chrysler understands that by this Agreement he is waiving any rights he
may presently have under the Age Discrimination in Employment Act, as amended.
Chrysler enters into this Agreement freely and voluntarily without any duress or
coercion, and after he has carefully and completely read all of the terms and
provisions of this Agreement. He has been advised to consult with legal counsel
and understands he shall be allowed to consider this Agreement for 21 days prior
to signing it. Chrysler understands that this Agreement shall not become
effective for seven days following the date it is signed, during which time he
may revoke this Agreement by written notice to ASC, Kojaian and JPE at the
addresses and in the manner set forth in the Investment Agreement. Chrysler
understands that payments to be made to him as provided in this Agreement shall
not commence until the expiration of such seven days.
9. Arbitration.
(a) The arbitration procedure set forth in this paragraph 9 shall be the
sole and exclusive method for resolving and remedying monetary claims arising
out of disputes regarding this Agreement (the "Disputes"); provided that nothing
in this paragraph 9 shall prohibit a party from instituting litigation to
enforce any Final Determination (as defined below) or to obtain injunctive
relief. Except as otherwise provided in this paragraph 9 or in the Commercial
Arbitration Rules of the American Arbitration Association as in effect at the
pertinent time, the arbitration procedures and any Final Determination hereunder
shall be governed by, and shall be enforced pursuant to, the Uniform Arbitration
Act.
(b) In the event that either party asserts that there exists a Dispute,
such party shall deliver a written notice to the other party specifying the
nature of the asserted Dispute and requesting a meeting to attempt to resolve
the same. If no such resolution is reached within ten (10) business days after
such delivery of such notice, the party delivering such notice of Dispute (the
"Disputing Person") may, within forty-five (45) business days after delivery of
such notice, commence arbitration by delivering to the other party a notice of
arbitration (a "Notice of Arbitration"). Such Notice of Arbitration shall
specify the matters as to which arbitration is sought, the nature of any
Dispute, the claims of the party and shall specify the amount and nature of any
damages, if any, sought to be recovered as a result of any alleged claim, and
any other matters required by the Commercial Arbitration Rules of the American
Arbitration Association as in effect at the pertinent time to be included
therein, if any.
(c)(i) The parties shall in good faith select one arbitrator to arbitrate
the dispute who shall resolve the dispute according to the procedures set forth
in this paragraph 9.
(c)(ii) If the parties are unable to agree upon an arbitrator pursuant to
paragraph 9(c)(i) within fifteen (15) business days, then each party shall
select one arbitrator within the next fifteen (15) business days. In the event
that either party fails to select an arbitrator as provided in this paragraph
9(c)(ii), then the matter shall be resolved by the arbitrator selected by the
other party. If each party chooses an arbitrator, then those arbitrators shall
select a third independent, neutral arbitrator expert in the subject matter of
the dispute, and the three arbitrators so selected shall resolve the matter
according to the procedures set forth in this paragraph 9. If the arbitrators
selected by the parties are unable to agree on a third arbitrator within fifteen
(15) business days, after their selection, the third arbitrator shall be
selected by the President of the American Arbitration Association.
(d) The arbitration shall be conducted in Ann Arbor, Michigan, under the
Commercial Arbitration Rules of the American Arbitration Association as in
effect from time to time, except as modified by the written agreement of the
parties, to this Agreement. The arbitrator(s) shall so conduct the arbitration
that a final result, determination, finding, judgment and/or award (the "Final
Determination") shall be made or rendered as soon as practicable, but in no
event later than one hundred (100) business days after the delivery of the
Notice of Arbitration nor later than ten (10) business days following completion
of the arbitration. The Final Determination must be agreed upon and signed by
the sole arbitrator or by at least two of the three arbitrators (as applicable).
The Final Determination shall be final and binding on all parties and there
shall be no appeal from or reexamination of the Final Determination, except for
fraud, perjury, or misconduct by an arbitrator prejudicing the rights of any
party and to correct manifest clerical errors. The prevailing party or parties
shall be entitled to Fees and Costs.
(e) Judgment may be entered upon the Final Determination by any court of
competent jurisdiction.
10. Nothing in this Agreement shall be construed as an admission of
liability by JPE of any wrongdoing and all liability is hereby expressly denied
by JPE.
11. Chrysler shall not disparage JPE or articulate in any manner any
negative fact or opinion concerning JPE.
12. If any provision of this Agreement is deemed invalid or illegal, all
other provisions shall remain in full force and effect.
13. This Agreement shall be construed in accordance with and governed by
the Laws of the State of Michigan.
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Richard Chrysler
Date: --------------------------
JPE, Inc.,
a Michigan corporation
By:
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Name:
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Title:
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Date:
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