Exhibit 10.10
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is entered into effective as
of April 1, 2004 (the "Effective Date"), by and between Xxxxxxx X. Xxxxxxx
("Executive") and International Steel Group Inc., a Delaware corporation.
R E C I T A L S:
A. Executive serves as the Chief Financial Officer and Secretary, and is a
key corporate officer of ISG.
B. ISG desires to employ Executive, and Executive desires to accept such
employment, under the terms and conditions of this Agreement.
C. The Directors have also determined that it is in the best interests of
the stockholders and ISG to promote stability among key officers.
IN CONSIDERATION OF THE FOREGOING, the mutual covenants contained herein,
and other good and valuable consideration, receipt of which is hereby
acknowledged, the parties agree as follows:
1. Definitions.
1.1 "Base Salary" has the meaning set forth in Section 6.1.
1.2 "Board" means the board of directors of ISG.
1.3 "Cause" means (A) the commission by Executive of (i) a felony or (ii)
any serious crime involving fraud, dishonesty or breach of trust; (B) gross
negligence or intentional misconduct by Executive with respect to ISG or in the
performance of his duties to ISG; (C) failure to follow a reasonable, lawful and
specific direction of the Chief Executive Officer after notice that such failure
will result in termination for Cause; or (D) breach by Executive of any material
provision of this Agreement, which breach is not corrected by Executive within
ten (10) calendar days after receipt by Executive of written notice from ISG of
such breach.
1.4 "Disability" or "Disabled" means the absence of Executive from
Executive's duties with the Company on a full time basis for 180 consecutive
business days as a result of incapacity due to mental or physical illness which
is determined to be total and permanent by a physician selected by the Company
or its insurers and reasonably acceptable to Executive or Executive's legal
representative.
1.5 "ISG" means International Steel Group Inc. and each of the
affiliates of International Steel Group Inc. (meaning any entity that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, International Steel Group
Inc.), along with all successors and assigns of each of such entities.
1.6 "Good Reason" means the termination of Executive's employment by
Executive for any of the following reasons:
(A) Involuntary reduction in Executive's Base Salary unless such
reduction occurs simultaneously with a company-wide reduction in officers'
salaries;
(B) Involuntary discontinuance or reduction in bonus award
opportunities for Executive under ISG's Officer's Cash and Stock Bonus
Plan unless a company-wide reduction of all officers' bonus awards occurs
simultaneously with such discontinuance or reduction;
(C) Involuntary discontinuance of Executive's participation in any
employee benefit plans maintained by ISG unless such plans are
discontinued by reason of law or loss of tax deductibility to ISG with
respect to contributions to such plans, or are discontinued as a matter of
ISG policy applied equally to all participants in such plans;
(D) Failure to obtain an assumption of ISG's obligations under this
Agreement by any successor to ISG, regardless of whether such entity
becomes a successor to ISG as a result of a merger, consolidation, sale of
assets of ISG, or other form of reorganization;
1.7 "Officer's Cash and Stock Bonus Plan" has the meaning set forth in
Section 6.2 hereof.
1.8 "Plan" has the meaning set forth in Section 7.4.
1.9 "Restricted Customers" shall mean all the specific customer accounts,
whether within or outside of the Restricted Territory, with which Executive had
any contact or for which Executive had any responsibility (either direct or
supervisory) at the time of termination of Executive's employment and at any
time during the two year period prior to such termination.
1.10 "Restricted Territory" means the geographic area(s) within a 50 mile
radius of any and all ISG location(s) in, to, or for which Executive worked, to
which Executive was assigned or had any responsibility (either direct or
supervisory) at the time of termination of Executive's employment and at any
time during the two-year period prior to such termination.
1.11 "Term" has the meaning set forth in Section 5.
1.12 "Termination Date" means the date on which the termination of
Executive's employment with ISG becomes effective.
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2. Termination of Prior Agreements.
The parties hereto acknowledge and agree that, effective as of the date
hereof, all prior employment agreements are terminated and each and every
provision of each of such agreements is rendered void and of no further force or
effect whatsoever.
3. Employment.
ISG hereby employs Executive, and Executive hereby accepts employment,
according to the terms and conditions set forth in this Agreement and for the
period specified in Section 5 of this Agreement.
4. Duties.
During the Term, Executive shall serve ISG as its Chief Financial Officer
and Secretary in accordance with reasonable and lawful directions from ISG's
Chief Executive Officer and in accordance with ISG's Articles of Incorporation
and Amended Bylaws, as both may be amended from time to time. Executive will
report directly to the Chief Executive Officer. While Executive is employed by
ISG as a full-time employee, Executive shall serve ISG, faithfully, diligently,
competently and to the best of his ability, and will exclusively devote his full
time, energy and attention to the business of ISG and to the promotion of its
interests. Executive shall not, without the written consent of the Chief
Executive Officer of ISG render services to or for any person, firm, corporation
or other entity or organization in exchange for compensation, regardless of the
form in which such compensation is paid and whether or not it is paid directly
or indirectly to Executive. Nothing in this Section 4 shall preclude Executive
from managing his personal investments and affairs, provided that such
activities in no way interfere with the proper performance of his duties and
responsibilities as Chief Financial Officer and Secretary.
5. Term of Employment.
Subject to Article 9, the term of this Agreement (the "Term") shall
commence on the Effective Date and end on December 31, 2005. The Term shall
automatically be extended by one year on each December 31 unless not later than
September 30 of such year ISG notifies Executive, or Executive notifies ISG,
that it or he, as the case may be, does not desire to have the Term extended.
6. Compensation.
6.1 Base Salary. While employed under this Agreement, Executive will
receive as his compensation for the performance of his duties and obligations to
ISG under this Agreement a Base Salary of Three Hundred Thousand Dollars
($300,000.00) per year, which will be payable in semi-monthly installments, and
which will be subject to annual review by the Compensation Committee as approved
by the Board of Directors (the base salary, as it may be increased from time to
time, is referred to herein as the "Base Salary").
6.2 Bonus. In addition to the Base Salary, Executive will receive with
respect to each
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calendar year a bonus in accordance with ISG's Officer's Cash and Stock Bonus
Plan (the "Officer's Cash and Stock Bonus Plan"), a copy of which has been
delivered to Executive. Executive will receive for 2004 the greater of 60% of
annual salary (minimum bonus amount) or the calculated bonus amount under the
Officer's Cash and Stock Bonus Plan.
6.3 Withholding. All compensation payable to Executive pursuant to this
Section 6 shall be paid net of amounts withheld for federal, state, municipal or
local income taxes, Executive's share, if any, of any payroll taxes and such
other federal, state, municipal or local taxes as may be applicable to amounts
paid by an employer to its employee or to the employer/employee relationship.
7. Other Benefits of Employment.
7.1 Retirement Benefits. Executive will be eligible to participate in the
ISG 401(k) Plan, a copy of which has been provided to Executive, in accordance
with the provisions of the 401(k) Plan, as amended from time to time.
7.2 Disability. Executive will be entitled to participate in ISG's Long
Term Disability program applicable to executive level employees of ISG, and in
ISG's Short Term Illness Program, all in accordance with the provisions of such
programs as they may be amended from time to time.
7.3 Miscellaneous Benefits. Executive will be entitled to participate in
such hospitalization, life insurance, and other employee benefit plans and
programs, if any, as may be adopted by ISG from time to time, in accordance with
the provisions of such plans and programs and on the same basis as other
full-time salaried employees of ISG who participate in such employee benefit
plans (except to the extent that the benefits provided under any of such plans
or programs are expressly offset by any of the benefits provided under or
pursuant to this Agreement).
7.4 Stock Options and Grants. Executive shall continue to be eligible to
receive awards of stock options and restricted stock in accordance with the
provisions of the 2002 Stock Option Plan of International Steel Group Inc (the
"Plan"), as they may be amended or superseded from time to time. The terms of
such awards shall be determined by the Board of Directors in accordance with the
Plan, provided, however, that notwithstanding any provision of the Plan to the
contrary, in the event of any termination of Executive's employment for any
reason other than for Cause pursuant to Section 9.3, or for termination of
employment other than for Good Reason pursuant to Section 9.5, any stock options
granted to Executive prior to such Termination Date shall immediately vest and
be exercisable by Executive under the Plan.
7.5 Taxes and Withholding. Executive shall be responsible for paying all
federal, state, municipal or local taxes payable by him with respect to any
benefits provided under this Section 7, and ISG will, when required by law or
when otherwise appropriate or customary, withhold from the benefits or other
compensation amounts sufficient to satisfy such taxes.
7.6 Vacation. Executive will be entitled to four (4) weeks paid
vacation and ISG recognized holidays.
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8. Termination.
8.1 Termination by ISG.
(A) This Agreement shall automatically terminate effective upon (i)
the date of Executive's death; (ii) the date that Executive is determined
to be permanently Disabled or (iii) the date of Executive's retirement.
(B) ISG may terminate this Agreement, and Executive's employment
with ISG, without Cause upon ninety (90) days' prior written notice to
Executive or ISG may elect to not renew the term of the Agreement in
accordance with Section 5.
(C) ISG may terminate this Agreement, and Executive's employment
with ISG, with Cause effective immediately and without the requirement of
prior notice to Executive.
8.2 Termination by Executive. Executive may terminate this Agreement, and
his employment with ISG, with or without Good Reason, upon ninety (90) days'
prior written notice to ISG or may elect to not renew the term of the Agreement
in accordance with Section 5.
8.3 Notice. Any purported termination of this Agreement by ISG or
Executive shall be communicated by written notice of termination to the other
party. Such notice shall indicate the specific termination provision in this
Agreement relied upon, shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provisions so indicated, shall specify the Termination Date
(which shall not be earlier than the date of the notice).
9. Compensation and Benefits Upon Termination of Employment.
9.1 Termination of Employment upon Death. If Executive's employment is
terminated by reason of death, his estate shall be entitled to receive only the
Base Salary to which Executive was entitled through the date of death, any
accrued unpaid bonus compensation (calculated on a pro rata basis) due to
Executive with respect to the calendar year prior to and the calendar year in
which the Termination Date occurs, and such other benefits as may be available
to Executive or his estate through ISG's benefit plans and policies.
9.2 Termination of Employment upon Disability. If Executive's employment
is terminated due to his Disability, Executive shall be entitled to receive only
the Base Salary to which he was entitled through the date of termination due to
Disability, any unpaid bonus or incentive compensation (calculated on a pro rata
basis) due to Executive with respect to the calendar year prior and the calendar
year in which the Termination Date occurs, and such other benefits as may be
available to Executive through ISG's benefit plans and policies.
9.3 Termination of Employment by ISG for Cause. If Executive's employment
is terminated for Cause as provided in Section 8.1(C), Executive shall be
entitled to receive the Base Salary to which he was entitled through the
Termination Date, accrued unpaid bonus compensation
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(calculated on pro rata basis), due to Executive with respect to the calendar
year prior and the calendar year in which the Termination Date occurs and such
other benefits as may be available to him through ISG's benefit plans and
policies in effect on the Termination Date.
9.4 Termination Without Cause or Termination For Good Reason. If ISG
terminates Executive's employment without Cause pursuant to Section 8.1(B) or if
Executive terminates his employment for Good Reason pursuant to Section 8.2,
Executive shall receive: (A) severance pay equal to two (2) times his Base
Salary and bonus compensation in the amount of two (2) times the average of
Executive's previous three years annual bonus; and (B) health care and major
medical coverage, shall continue for a period of two (2) years from the
Termination Date. In the event that Executive has been employed for less than
three calendar years, then the bonus payment shall be two times the average of
the bonus earned in those years. At Executive's discretion, said severance and
bonus payment shall be made in a lump sum payment within thirty (30) days of the
Termination Date. Executive agrees that he shall not be entitled any additional
compensation or benefits other than what is set out in this Section 9.4.
Executive and ISG agree that the receipt of severance benefits as defined in
this Section 9.4 are conditioned upon and subject to Executive and ISG executing
a valid mutual release agreement releasing any and all claims which either of
them have or may have against the other arising out of Executive's employment
(other than enforcement of this Agreement).
9.5 Termination of Employment other than for Good Reason. If Executive
terminates employment with ISG pursuant to Section 8.2 other than for Good
Reason or elects to not renew the agreement for an additional term, Executive
shall be entitled to receive only the Base Salary to which he was entitled
through the Termination Date, accrued unpaid bonus compensation (calculated on a
pro rata basis) due to Executive for the calendar year prior and the calendar
year in which the Termination Date occurs and such other benefits as may be
available to him through ISG's benefit plans and policies.
9.6 Effect of Termination. Upon termination of Executive's employment, the
obligations of each of the parties under this Agreement shall expire as of the
Termination Date, including, without limitation, the obligations of ISG to pay
any compensation to Executive, except to the extent otherwise specifically
provided in this Agreement. Notwithstanding the foregoing, the obligations
contained in Section 10 of this Agreement and the provisions hereof relating to
the obligations of ISG described in the preceding sentence, shall survive the
termination or expiration of this Agreement in accordance with the terms set
forth therein.
10. Confidentiality, Non-Compete, and Non-Solicitation.
10.1 Non-Disclosure. Executive expressly covenants and agrees that he will
not reveal, use, divulge or make known to any person, firm, company or
corporation any secret or confidential information of any nature concerning ISG
or its business, or anything connected therewith.
10.2 Return of Materials. Executive agrees to deliver or return to ISG
upon termination or expiration of this Agreement or as soon thereafter as
possible, all written information and any other similar items furnished by ISG
or prepared by Executive in connection with his services hereunder.
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Executive will retain no copies thereof after termination of this Agreement or
Executive's employment with ISG.
10.3 Non-Competition. In the event of termination or non-renewal of this
Agreement by either ISG or Executive, for any reason, Executive shall not
(except as an officer, director, employee, agent or consultant of ISG) during
the two (2) year period following the Termination Date, directly or indirectly,
own, manage, operate, join, or have a financial interest in, control or
participate in the ownership, management, operation or control of, or be
employed as an employee, agent or consultant, or in any other individual or
representative capacity whatsoever, or use or permit his name to be used in
connection with, or be otherwise connected in any manner with any business or
enterprise that is actively engaged in any business which is in competition with
ISG or any of its subsidiaries or affiliates (a) within the Restricted Territory
or (b) with any Restricted Customers; provided that the foregoing restriction
shall not be construed to prohibit the ownership by Executive of not more than
one percent (1%) of any class of securities of any corporation which is engaged
in any of the foregoing businesses, having a class of securities registered
pursuant to the Securities Exchange Act of 1934, which securities are publicly
owned and regularly traded on any national exchange or in the over-the-counter
market, provided, further, that such ownership represents a passive investment
and that neither Executive nor any group of persons including Executive in any
way, either directly or indirectly, manages or exercises control of any such
corporation, guarantees any of its financial obligations, otherwise takes part
in its business other than exercising his rights as a shareholder, or seeks to
do any of the foregoing.
10.4 No Solicitation. In addition to the limitation imposed by Section
10.3, Executive hereby further agrees and covenants that during the term of this
Agreement, and for a period of two (2) years thereafter, he shall not, directly
or indirectly, on his own behalf or with others (A) induce or attempt to induce
any employee of ISG to leave the employ of ISG, or in any way interfere with the
relationship between ISG and any employee; (B) knowingly hire any employee of
ISG; or (C) induce or attempt to induce any referral source, customer, or other
business relation of ISG not to do business with ISG, or to cease doing business
with ISG, or in any way interfere with the relationship between any such
referral source, customer, or business relation and ISG.
10.5 Injunctive Relief. Executive acknowledges that it is impossible to
measure in money the damages that will accrue to ISG by reason of Executive's
failure to observe any of the obligations imposed on him by this Section 10.
Accordingly, if ISG shall institute an action to enforce the provisions hereof,
Executive hereby waives the claim or defense that an adequate remedy at law is
available to ISG, and Executive agrees not to urge in any such action the claim
or defense that such remedy at law exists. Further, if a final determination is
made by a court having competent jurisdiction that the time or territory or any
other restriction contained in Section 10.3 is an unenforceable restriction on
Executive's activities, the provisions of Section 10.3 shall not be rendered
void but shall be deemed amended to apply such maximum time and territory and
such other restrictions as such court may judicially determine or otherwise
indicate to be reasonable.
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11. Miscellaneous.
11.1 Assignment. This Agreement shall be binding upon the parties hereto,
their respective heirs, personal representatives, executors, administrators and
successors; provided, however, that Executive shall not assign this Agreement.
11.2 Governing Law. This Agreement shall be construed under and governed
by the internal laws of the State of Ohio without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of Ohio or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Ohio.
11.3 Entire Agreement. This Agreement, together with the Officer
Indemnification Agreement between Executive and ISG, set forth the entire
agreement of the parties concerning the employment of Executive by ISG, and any
other oral or written statements, representations, agreements, or understandings
made or entered into prior to or contemporaneously with the execution of this
Agreement, are hereby rescinded, revoked, and rendered null and void by the
parties. Both parties hereto have participated in the selection of the words and
phrases set forth in this Agreement in order to express their joint intentions
in entering into this employment relationship, and the parties hereto agree that
there shall not be strict interpretation against either party in connection with
any review of this Agreement in which interpretation thereof is an issue.
11.4 Notices. Any notice required or permitted under this Agreement shall
be deemed to have been effectively made or given if in writing and personally
delivered, or mailed properly addressed in a sealed envelope, postage prepaid by
certified or registered mail, delivered by a reputable overnight delivery
service or sent by facsimile. Unless otherwise changed by notice, notice shall
be properly addressed to Executive if addressed to the address of Executive on
the books and records of ISG at the time of the delivery of such notice, and
properly addressed to ISG if addressed to:
Xxxxx X Xxxxx
Vice President, Human Resources
International Steel Group Inc.
0000 Xxxxxxxxxx Xxxxx - 0xx Xxxxx
Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
11.5 Severability. Wherever there is any conflict between any provision of
this Agreement and any statute, law regulation or judicial precedent, the latter
shall prevail, but in such event the provisions of this Agreement thus affected
shall be curtailed and limited only to the extent necessary to bring them within
the requirements of law. In the event that any provision of this Agreement shall
be held by a court of competent jurisdiction to be indefinite, invalid, void or
voidable or otherwise unenforceable, the balance of this Agreement shall
continue in full force and effect unless such construction would clearly be
contrary to the intentions of the parties or would result in an unconscionable
injustice.
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11.6 Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed the day and year first above written.
INTERNATIONAL STEEL GROUP INC.
By: /s/ Xxxxxx X. Xxxx
-------------------------------
Name: Xxxxxx X. Xxxx
Its: President & Chief Executive
Officer
/s/ Xxxxxxx X.Xxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxx
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