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Exhibit 10.22
EMPLOYMENT AGREEMENT
This Agreement is entered into this 17th day of May, 1996, by and
between Borror Corporation (hereinafter called the "Company") Jon M. Donnell
(hereinafter called the "Employee").
WHEREAS, the Employee has been employed by the Company since June 30,
1995, and currently serves as Executive Vice President, Chief Financial Officer
and Treasurer; and
WHEREAS, the Employee desires to continue his employment with the
Company and to continue to serve the Company as Executive Vice President, Chief
Financial Officer and Treasurer; and
WHEREAS, the Company desires to continue to retain the services of the
Employee as Executive Vice President, Chief Financial Officer and Treasurer;
and
WHEREAS, the Company and the Employee desire to enter into an
employment agreement to establish the rights and obligations of the Employee
and the Company in such employment relationship;
NOW, THEREFORE, and in consideration of the mutual covenants herein
contained, the Company and the Employee hereby mutually agree as follows:
1. EMPLOYMENT AND DUTIES. The Company hereby continues to employ the
Employee, and the Employee hereby accepts continued employment with the Company
upon the terms and conditions hereinafter set forth. The Employee shall
continue to serve the Company as Executive Vice President, Chief Financial
Officer and Treasurer. In such capacity, the Employee shall have all powers,
duties, and obligations as are normally associated with such position. The
Employee shall further perform such other duties related to the business of the
Company as may from time to time be reasonably requested of him by the
President/CEO. The Employee shall devote all of his skills, time, and attention
solely and exclusively to said position and in furtherance of the business and
interests of the Company.
2. TERM OF EMPLOYMENT. This Agreement shall be effective upon
execution by both parties and approval by the Compensation Committee of the
Company's Board of Directors. The term of employment shall begin, or be deemed
to have begun, on January 1, 1996 (the "Effective Date"). It shall continue
through the three-year period ending on the day before the third anniversary
date of the Effective Date, subject, however, to prior termination or to
extension, as herein provided.
3. COMPENSATION. For such services, the Employee shall receive an
initial annual base salary of One Hundred Fifty Thousand Dollars ($150,000.00),
which may be
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increased, but not decreased, by the Company during the term of this Agreement.
In the event that the Company increases the Employee's initial base salary, the
amount of the initial base salary, together with any increase(s), shall be his
base salary. Said base salary shall be payable in equal installments in
accordance with the Company's regular payroll practices. In addition, the
Employee shall be included in the bonus program, as described in Appendix A
which is attached hereto and made a part hereof. Notwithstanding the provisions
of Paragraph 19, Appendix A may be amended, on a calendar year basis, during
the term of this Agreement (and any extensions thereof), by the Board of
Directors of the Company.
4. FRINGE BENEFITS. The Company shall further provide the Employee
with all health and life insurance coverages, sick leave and disability
programs, tax-qualified retirement plans, stock option plans, paid holidays and
vacations, perquisites, and such other fringe benefits of employment as the
Company may provide from time to time to actively employed executives of the
Company who are similarly situated. Notwithstanding the preceding provisions of
this Paragraph 4, during the term of this Agreement (including extensions
thereof), the Employee shall be entitled to a minimum of three (3) weeks of
vacation per year.
5. EXTENSION OF TERM OF AGREEMENT. The Company and the Employee agree
that the Company's Board of Directors shall, based upon recommendations of the
Company's President/CEO, review the Employee's performance with the intent
that, if the Employee's performance so warrants, the Board may extend the term
of this Agreement for additional three-year periods. By the day preceding the
first anniversary date of the Effective Date, the Board shall notify the
Employee of its decision whether to grant an extension of this Agreement for an
additional three-year period. To the extent that the Board fails to notify the
Employee, on or before the date described in the preceding sentence, of the
extension of the term of this Agreement, the term of this Agreement shall be
automatically extended for an additional three-year period. By way of
illustration of this Paragraph 5, if, by December 31, 1996, the Board notifies
the Employee that it intends to grant an extension of the term of this
Agreement (or, if by such date, the Board fails to notify the Employee that it
does not intend to grant such an extension), the term of this Agreement shall
be extended for an additional three-year period beginning on January 1, 1997,
and ending on December 31, 2000. This Agreement shall be subject to extension
in the manner set forth in this paragraph for additional three-year periods on
the first anniversary date of the Effective Date of the immediately preceding
extension.
6. TERMINATION OF EMPLOYMENT.
a. Termination of Employment Other Than by Employee. The Employee's
employment hereunder may be terminated by the Company. However, the
Company shall be deemed to have terminated the employment for
"cause" only upon the following:
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i. Any unauthorized material disclosure by the Employee of the
Company's business practices or accounts to a competitor which
results in serious damage to the Company.
ii. Willful and wrongful misappropriation by the Employee of
funds, property, or rights of the Company which results in
serious damage to the Company.
iii. Willful and wrongful destruction of business records or other
property by the Employee, which results in serious damage to
the Company.
iv. Conviction of the Employee of a felony involving moral
turpitude, or, as the result of a plea bargain, conviction of
the Employee of a misdemeanor; provided, the Employee was
originally charged (prior to the plea bargain) with a felony
involving moral turpitude.
v. Gross and willful misconduct by the Employee which results in
serious damage to the Company.
vi. The Employee's material breach of, or inability to perform his
obligations under, this Agreement other than by reason of
Disability.
b. Termination of Employment by Employee. The Employee may terminate
his employment at any time. However, he shall be deemed to have
terminated his employment for "Good Reason" only if he terminates
his employment by giving Notice of Termination pursuant to
Paragraphs 6(d) and 6(e)(iii) within ninety (90) days after the
occurrence of any of the following events (provided the Company
does not cure such event within ten (10) days following its receipt
of the Employee's Notice of Termination):
i. The Employee's base salary is reduced for any reason other
than in connection with the termination of his employment.
ii. For any reason other than in connection with the termination
of the Employee's employment, the Company materially reduces
any fringe benefit provided to the Employee under Paragraph 4
below the level of such fringe benefit provided generally to
other actively employed similarly situated executives of the
Company, unless the Company agrees to fully compensate the
Employee for any such material reduction.
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iii. The Company assigns the Employee to duties inconsistent in any
respect with his position (including, without limitation, his
status, office, and title), authority, duties or
responsibilities as set forth by Paragraph 1, or takes any
other action that results in a material diminution in such
position, authority, duties, or responsibilities.
iv. The Company otherwise materially breaches, or is unable to
perform its obligations under this Agreement.
c. Termination of Employment Upon Death or Disability of the Employee.
The Employee's employment hereunder shall terminate upon his death,
and may be terminated by the Company in the event of his
Disability. For purposes of this Agreement, "Disability" means the
inability of the Employee due to illness, accident, or otherwise,
to perform his duties for the period of time during which benefits
are payable to the Employee under the Company's Short-Term
Disability Plan, as determined by an independent physician selected
by the Company and reasonably acceptable to the Employee (or his
legal representative), provided that the Employee does not return
to work on a substantially full-time basis within thirty (30) days
after Notice of Termination is given by the Company pursuant to the
provisions of Paragraphs 6(d) and 6(e)(ii).
d. Notice of Termination. Any termination of the Employee's employment
by the Company hereunder, or by the Employee other than termination
upon the Employee's death, shall be communicated by written Notice
of Termination to the other party. For purposes of this Agreement,
a "Notice of Termination" means a notice that shall indicate the
specific termination provision in this Agreement relied upon, and
shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Employee's
employment under the provision so indicated.
e. Date of Termination. "Date of Termination" means:
i. If the Employee's employment is terminated by his death, the
date of his death.
ii. If the Employee's employment is terminated by the Company as a
result of Disability pursuant to Paragraph 6(c), the date that
is thirty (30) days after Notice of Termination is given;
provided the Employee shall not have returned to the
performance of his duties on a full-time basis during such
thirty- (30-) day period.
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iii. If the Employee terminates his employment for Good Reason
pursuant to Paragraph 6(b), the date that is ten (10) days
after Notice of Termination is given (provided that the
Company does not cure such event during that ten- (10-) day
period).
iv. If the Employee terminates his employment other than for Good
Reason, the date that is two (2) weeks after Notice of
Termination is given; provided, in the sole discretion of the
Company, such date may be any earlier date after Notice of
Termination is given.
v. If the Employee's employment is terminated by the Company
either for Cause pursuant to Paragraph 6(a) or other than for
Cause, the date on which the Notice of Termination is given.
7. AMOUNTS PAYABLE UPON TERMINATION OF EMPLOYMENT OR DURING
DISABILITY.
a. Death. If the Employee's employment is terminated by his death, the
Employee's beneficiary (as designated by the Employee in writing
with the Company prior to his death) shall be entitled to the
following payments and benefits: (i) any base salary that is
accrued but unpaid, any vacation that is accrued but unused, and
any business expenses that are unreimbursed -- all, as of the Date
of Termination; (ii) a pro rata award under the bonus program
described in Appendix A which is applicable to the Employee at the
time of his death, with proration based on service completed during
the calendar year for which the award is determined, and payable
when the award would have been paid had the Employee's employment
not terminated; and (iii) any benefit following termination of
employment which may be provided under the fringe benefit plans,
policies and programs described in Paragraph 4. In the absence of a
beneficiary designation by the Employee, or, if the Employee's
designated beneficiary does not survive the Employee, benefits
described in this Paragraph 7(a) shall be paid to the Employee's
estate.
b. Disability.
i. During any period that the Employee fails to perform his
duties hereunder as a result of incapacity due to physical or
mental illness ("Disability Period"), the Employee shall
continue to receive his base salary at the rate then in effect
for such period until his employment is terminated pursuant to
Paragraph 6(c); provided, however, that payments of base
salary so made to the Employee shall be reduced by the sum of
the amounts, if any, that were payable to the Employee
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at or before the time of any such salary payment under any
disability benefit plan or plans of the Company and that were
not previously applied to reduce any payment of base salary.
ii. Upon his termination of employment because of Disability as
described in Paragraph 6(c), the Employee shall be entitled to
the payments and benefits described in Paragraph 7(a) as if
the Employee had died on his Date of Termination. In the event
of the Employee's death prior to the time that all payments
described in Paragraph 7(a) have been completed, such payments
and benefits shall be paid to the Employee's beneficiary [as
designated pursuant to Paragraph 7(a)], or, in the absence of
a beneficiary designation or if the designated beneficiary
does not survive the Employee, to the Employee's estate.
c. Termination by Company Without Cause, or Termination by Employee
for Good Reason. In the event that the Company terminates the
Employee's employment without Cause or the Employee terminates his
employment for Good Reason before the expiration of the term of
this Agreement, including any extension thereof, the Employee shall
be entitled to the following payments and benefits:
i. Those described in Paragraph 7(a) as if the Employee had died
on his Date of Termination.
ii. Within thirty (30) days after the Date of Termination, a lump
sum cash payment equal to eighteen (18) months of the base
salary applicable to the Employee on the Date of Termination.
iii. Within thirty (30) days after the Date of Termination, a lump
sum cash payment equal to eighteen (18) months of the premium
applicable to the Employee on the Date of Termination for the
Employee and his family (provided the Employee had family
coverage on the Date of Termination) under the Company's group
health plan.
iv. Within thirty (30) days after the Date of Termination, the
Company will remove, and will provide Employee with evidence
of its removal of, any restrictions which then exist on grants
of restricted Common Shares of the Company under the Company's
Incentive Stock Plan. This provision applies only to grants of
restricted shares, and not to options, granted under said
Plan.
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d. Termination by Employee Other Than for Good Reason, or Termination
by Company for Cause. In the event that the Employee terminates his
employment other than for Good Reason or the Company terminates his
employment for Cause, the Employee shall not be entitled to any
compensation except as set forth below:
i. Any base salary (but not bonus) that is accrued but unpaid,
any vacation that is accrued but unused, and any business
expenses that are unreimbursed -- all, as of the Date of
Termination.
ii. Any other rights and benefits (if any) provided under plans
and programs of the Company (excluding any bonus program),
determined in accordance with the applicable terms and
provisions of such plans and programs.
e. No Duty to Mitigate Damages. After any Date of Termination, the
Employee shall have no obligation to seek other employment, but
shall have the right to be otherwise employed, and any compensation
of any type whatsoever received by the Employee in connection with
such employment shall not be offset by the Company against any of
the obligations of the Company under this Agreement.
8. CHANGE IN CONTROL.
a. Occurrence of Change in Control. Immediately upon the occurrence of
a "Change in Control," the Employee shall become fully vested in
all employee benefit programs (other than any tax qualified
retirement plan, the Employee's interest in which shall vest in
accordance with such plan's terms), including without limitation,
all stock options in which he was a participant at the time of the
Change in Control. For purposes of this Agreement, the term
"Change in Control" shall mean the occurrence of any event which
results in either (a) Borror Realty Company's failing to own at
least thirty percent (30%) of the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors, or (b) both Don Borror and
Doug Borror ceasing to be directors and officers of the Company.
b. Termination of Employment. If, at any time within two (2) years
following a Change in Control, the Company terminates the
Employee's employment without Cause or the Employee terminates his
employment for Good Reason, the provisions of this Paragraph 8(b)
shall be applicable, instead of the provisions of Paragraph 7(c).
To the extent that the provisions of this
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Paragraph 8(b) are applicable, the Employee shall be entitled to
the following payments and benefits:
i. Those described in Paragraph 7(a) as if the Employee had died
on his Date of Termination; provided all cash payments
required under such paragraph shall be made within five (5)
calendar days of the Date of Termination;
ii. The lump sum payment, as described in Paragraph 7(c)(iii);
provided, such cash payment shall be made within five (5)
calendar days of the Date of Termination;
iii. A single lump sum payment, payable within five (5) calendar
days of the Date of Termination, equal to two (2) times the
Employee's annual base salary in effect upon the Date of
Termination; and
iv. Reimbursement of all expenses incurred by the Employee through
the use of any executive out-placement services to assist him
to seek other employment, which shall include, but not be
limited to (A) secretarial services, use of an office, phone,
office supplies and office services comparable to the level of
such services and supplies available to the Employee prior to
the Date of Termination and (B) all unreimbursed travel
expenses incurred by the Employee to seek other employment up
to a maximum amount of Five Thousand Dollars ($5,000).
9. NONEXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent
or limit the Employee's continuing or future participation in any incentive,
fringe benefit, deferred compensation, or other plan or program provided by the
Company and for which the Employee may qualify, nor shall anything herein limit
or otherwise affect such rights as the Employee may have under any other
agreements with the Company. Amounts that are vested benefits or that the
Employee is otherwise entitled to receive under any plan or program of the
Company at or after the Date of Termination, shall be payable in accordance
with such plan or program.
10. NONCOMPETITION COVENANT. The Employee agrees that, during the term
of this Agreement, including any extension thereof, and for a period of one (1)
year thereafter, he shall not:
a. Anywhere in the State of Ohio or in any other state in which the
Company is then conducting business, without the written consent of
the Company, provide advice with respect to, engage in or directly
or indirectly supervise
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or assist the provision of any service or sale of any product which
competes with any service or product of the Company; or
b. Anywhere in any state, accept employment with, provide advice to,
or engage in or directly or indirectly supervise or assist the
provision of any service or sale of any product by any person,
company, partnership, corporation or other entity which builds
homes, develops land, or otherwise competes with the Company in any
market, city or area in which the Company then conducts business.
Any breach of these Covenants shall be treated the same as a
termination by the Company for Cause.
The restrictions on competition provided herein may be enforced by the
Company and/or any successor thereto, by an action to recover payments made
under this Agreement, an action for injunction, and/or an action for damages.
The provisions of this Paragraph 10 constitute an essential element of this
Agreement, without which the Company would not have entered into this
Agreement. Notwithstanding any other remedy available to the Company at law or
at equity, the parties hereto agree that the Company or any successor thereto,
shall have the right, at any and all times, to seek injunctive relief in order
to enforce the terms and conditions of this Paragraph 10.
If the scope of any restriction contained in this Paragraph 10 is too
broad to permit enforcement of such restriction to its fullest extent, then
such restriction shall be enforced to the maximum extent permitted by law, and
the Employee hereby consents and agrees that such scope may be judicially
modified accordingly in any proceeding brought to enforce such restriction.
11. CONFIDENTIAL INFORMATION. The Employee shall hold in a fiduciary
capacity, for the benefit of the Company, all secret or confidential
information, knowledge, and data relating to the Company, that shall have been
obtained by the Employee during his employment with the Company and that is not
public knowledge (other than by acts by the Employee or his representatives in
violation of this Agreement). During and after termination of the Employee's
employment with the Company, the Employee shall not, without the prior written
consent of the Company, communicate or divulge any such information, knowledge,
or data to anyone other than the Company or those designated by it, unless the
communication of such information, knowledge or data is required pursuant to a
compulsory proceeding in which the Employee's failure to provide such
information, knowledge, or data would subject the Employee to criminal or civil
sanctions.
12. INTELLECTUAL PROPERTY. The Employee agrees to communicate to the
Company, promptly and fully, and to assign to the Company all intellectual
property developed or conceived solely by the Employee, or jointly with others,
during the term of
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his employment, which are within the scope of the Company's business, or which
utilized Company materials or information. For purposes of this Agreement,
"intellectual property" means inventions, discoveries, business or technical
innovations, creative or professional work product, or works of authorship. The
Employee further agrees to execute all necessary papers and otherwise to assist
the Company, at the Company's sole expense, to obtain patents, copyrights or
other legal protection as the Company deems fit. Any such intellectual property
is to be the property of the Company whether or not patented, copyrighted or
published.
13. ASSIGNMENT AND SURVIVORSHIP OF BENEFITS. The rights and
obligations of the Company under this Agreement shall inure to the benefit of,
and shall be binding upon, the successors and assigns of the Company. If the
Company shall at any time be merged or consolidated into, or with, any other
company, or if substantially all of the assets of the Company are transferred
to another company, then the provisions of this Agreement shall be binding upon
and inure to the benefit of the company resulting from such merger or
consolidation or to which such assets have been transferred, and this provision
shall apply in the event of any subsequent merger, consolidation, or transfer.
14. NOTICES. Any notice given to either party to this Agreement shall
be in writing, and shall be deemed to have been given when delivered personally
or sent by certified mail, postage prepaid, return receipt requested, duly
addressed to the party concerned, at the address indicated below or to such
changed address as such party may subsequently give notice of:
If to the Company: Borror Corporation
5501 Frantz Road
Dublin, Ohio 43017
Attn: President/CEO
If to the Employee: Jon M. Donnell
5361 Reston Park Drive
Columbus, Ohio 43235
15. INDEMNIFICATION. The Employee shall be indemnified by the Company,
to the extent provided in the case of officers under the Company's Articles of
Incorporation or Regulations, to the maximum extent permitted under applicable
law.
16. TAXES. Anything in this Agreement to the contrary notwithstanding,
all payments required to be made hereunder by the Company to the Employee shall
be subject to withholding of such amounts relating to taxes as the Company may
reasonably determine that it should withhold pursuant to any applicable law or
regulations. In lieu of withholding such amounts, in whole or in part, however,
the Company may, in its sole discretion, accept other provision for payment of
taxes, provided that it is satisfied that all
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requirements of the law affecting its responsibilities to withhold such taxes
have been satisfied.
17. ARBITRATION; ENFORCEMENT OF RIGHTS. Any controversy or claim
arising out of, or relating to this Agreement, or the breach thereof, shall be
settled by arbitration in the City of Columbus, Ohio, in accordance with the
Rules of the American Arbitration Association, and judgment upon the award
rendered by the arbitrator or arbitrators may be entered in any court having
jurisdiction thereof.
All legal and other fees and expenses, including, without limitation,
any arbitration expenses, incurred by the Employee in connection with seeking
to obtain or enforce any right or benefit provided for in this Agreement, or in
otherwise pursuing any right or claim, shall be paid by the Company, to the
extent permitted by law, provided that the Employee is successful in whole or
in part as to such claims as the result of litigation, arbitration, or
settlement.
In the event that the Company refuses or otherwise fails to make a
payment when due and is ultimately decided that the Employee is entitled to
such payment, such payment shall be increased to reflect an interest equivalent
for the period of delay, compounded annually, equal to the prime or base
lending rate used by The Huntington National Bank, and in effect as of the date
the payment was first due.
18. GOVERNING LAW/CAPTIONS/SEVERANCE. This Agreement shall be
construed in accordance with, and pursuant to, the laws of the State of Ohio.
The captions of this Agreement shall not be part of the provisions hereof, and
shall have no force or effect. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement. Except as otherwise specifically
provided in this paragraph, the failure of either party to insist in any
instance on the strict performance of any provision of this Agreement or to
exercise any right hereunder shall not constitute a waiver of such provision or
right in any other instance.
19. ENTIRE AGREEMENT/AMENDMENT. This instrument contains the entire
agreement of the parties relating to the subject matter hereof, and the parties
have made no agreement, representations, or warranties relating to the subject
matter of this Agreement that are not set forth herein. This Agreement may be
amended at any time by written agreement of both parties, but it shall not be
amended by oral agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
BORROR CORPORATION
By: /S/ Robert A. Meyer, Jr.
------------------------
Robert A. Meyer, Jr.
Senior Vice President
/S/ Jon M. Donnell
------------------------
Jon M. Donnell
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APPENDIX A
The target bonus will be an amount within a range from $70,000.00 to
$150,000.00. The determination of the amount of bonus to be awarded will be
based upon the performance of the Company in terms of achievement of its net
income goals, and the Employee's positive and meaningful impact upon it.
The determination of the amount of the bonus shall be made by the
Compensation Committee of the Board of Directors with respect to those
employees whose compensation must be specifically reported for securities law
purposes, and otherwise by the Chief Executive Officer.