MANAGEMENT
EMPLOYMENT AGREEMENT
This Management Employment Agreement (the "Agreement") by and among Metals USA,
Inc., a Delaware corporation ("Company"), and J. Xxxxxxx Xxxxxxx ("Employee") is
hereby entered into and effective as of the _____ day of ___________________,
1997, the date of the consummation of the initial public offering of the common
stock of the Company.
R E C I T A L S
A. The Company is engaged primarily in the business of metals processing,
metals fabricating and/or specialty metals services; and
B. Employee is employed hereunder by the Company in a confidential
relationship wherein Employee, in the course of his employment with the Company,
has and will continue to become familiar with and aware of information as to the
Company's customers, specific manner of doing business, including the processes,
techniques and trade secrets utilized by the Company and future plans with
respect thereto, all of which have been and will be established and maintained
at great expense to the Company, this information is a trade secret and
constitutes the valuable good will of the Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, it is hereby agreed as follows:
A G R E E M E N T S
1. EMPLOYMENT AND DUTIES.
(a) The Company hereby employs Employee as Senior Vice President and Chief
Financial Officer of the Company. As such, Employee shall have responsibilities,
duties and authority reasonably accorded to and expected of a Senior Vice
President and Chief Financial Officer of the Company and will report directly to
the Chief Executive Officer. Employee hereby accepts this employment upon the
terms and conditions herein contained and agrees to devote his full time,
attention and efforts to promote and further the business of the Company.
(b) Employee shall faithfully adhere to, execute and fulfill all policies
established by the Company, from time to time.
2. COMPENSATION. For all services rendered by Employee, the Company shall
compensate Employee as follows:
(a) BASE SALARY. Effective July 1, 1997, the base salary payable to
Employee shall be $150,000 per year, payable on a regular basis in accordance
with the Company's standard payroll procedures but not less than monthly. On at
least an annual basis, the Company will review Employee's performance and may
make increases to such base salary if, in its discretion, such increase is
warranted.
(b) EMPLOYEE PERQUISITES, BENEFITS AND OTHER COMPENSATION. Employee shall
be entitled to receive additional benefits and compensation from the Company in
such form and to such extent as specified below:
(i) Coverage for Employee and his dependent family members under
health, hospitalization, disability, dental, life and other insurance
plans that the Company may have in effect from time to time. Benefits
provided to Employee under this clause (i) shall be equal to such benefits
provided to other Company employees of the same level.
(ii) Reimbursement for all business travel and other out-of-pocket
expenses reasonably incurred by Employee in the performance of services
pursuant to this Agreement. All reimbursable expenses shall be
appropriately documented in reasonable detail by Employee upon submission
of any request for reimbursement, and in a format and manner consistent
with the Company's expense reporting policy.
(iii) The Company shall provide Employee with other employee
perquisites as may be available to or deemed appropriate for Employee by
the Company and participation in all other Company-wide employee benefits
as are available from time to time.
3. NON-COMPETITION AGREEMENT.
(a) Employee shall not, during the term of his employment hereunder, be
engaged in any other business activity pursued for gain, profit or other
pecuniary advantage if such activity interferes with Employee's duties and
responsibilities hereunder. The foregoing limitations shall not be construed as
prohibiting Employee from making personal investments in such form or manner as
will neither require his services in the operation or affairs of the companies
or enterprises in which such investments are made nor violate the terms of this
paragraph 3. Employee will not, during the period of his employment by or with
the Company, and for a period of two (2) years immediately following the
termination of his employment under this Agreement, except as provided below,
directly or indirectly, for himself or on behalf of or in conjunction with any
other person, persons, company, partnership, corporation or business of whatever
nature:
(i) engage, as an officer, director, shareholder, owner, partner,
joint venturer, or in a managerial capacity, whether as an Employee,
independent contractor, consultant or advisor, or as a sales
representative, in any metals processing, metals fabricating and/or
specialty metals services business in direct competition with the Company
within 200 miles
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of where the Company or any of its subsidiaries conduct business, including any
territory serviced by the Company or any of such subsidiaries (the "Territory");
(ii) call upon any person who is, at that time, within the
Territory, an Employee of the Company (including the respective
subsidiaries thereof) in a managerial capacity for the purpose or with the
intent of enticing such Employee away from or out of the employ of the
Company (including the respective subsidiaries thereof);
(iii) call upon any person or entity which is, at that time, or
which has been, within one (1) year prior to that time, a customer of the
Company (including the respective subsidiaries thereof) within the
Territory for the purpose of soliciting or selling products or services in
direct competition with the Company within the Territory;
(iv) call upon any prospective acquisition candidate, on Employee's
own behalf or on behalf of any competitor, which candidate was, to
Employee's actual knowledge after due inquiry, either called upon by the
Company (including the respective subsidiaries thereof) or for which the
Company made an acquisition analysis, for the purpose of acquiring such
entity.
Notwithstanding the above, the foregoing covenant shall not be deemed to
prohibit Employee from acquiring as an investment not more than one percent (1%)
of the capital stock of a competing business, whose stock is traded on a
national securities exchange or over-the-counter.
(b) Because of the difficulty of measuring economic losses to the Company
as a result of a breach of the foregoing covenant, and because of the immediate
and irreparable damage that could be caused to the Company for which they would
have no other adequate remedy, Employee agrees that the foregoing covenant may
be enforced by the Company in the event of breach by him, by injunctions and
restraining orders.
(c) It is agreed by the parties that the foregoing covenants in this
paragraph 3 impose a reasonable restraint on Employee in light of the activities
and business of the Company (including the Company's subsidiaries) on the date
of the execution of this Agreement and the current plans of the Company
(including the Company's subsidiaries); but it is also the intent of the Company
and Employee that such covenants be construed and enforced in accordance with
the changing activities, business and locations of the Company (including the
Company's subsidiaries) throughout the term of this covenant, whether before or
after the date of termination of the employment of Employee. For example, if,
during the term of this Agreement, the Company (including the Company's
subsidiaries) engages in new and different activities, enters a new business or
establishes new locations for its current activities or business in addition to
or other than the activities or business enumerated under the Recitals above or
the locations currently established therefor, then Employee will be precluded
from soliciting the customers or Employees of such new activities or business or
from such new location and from directly competing with such new business within
200 miles of its then-established operating location(s) through the term of this
covenant.
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It is further agreed by the parties hereto that, in the event that
Employee shall cease to be employed hereunder, and shall enter into a business
or pursue other activities not in competition with the Company (including the
Company's subsidiaries), or similar activities or business in locations the
operation of which, under such circumstances, does not violate clause (i) of
this paragraph 3, and in any event such new business, activities or location are
not in violation of this paragraph 3 or of Employee's obligations under this
paragraph 3, if any, Employee shall not be chargeable with a violation of this
paragraph 3 if the Company (including the Company's subsidiaries) shall
thereafter enter the same, similar or a competitive (i) business, (ii) course of
activities or (iii) location, as applicable.
(d) The covenants in this paragraph 3 are severable and separate, and the
unenforceability of any specific covenant shall not affect the provisions of any
other covenant. Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth are
unreasonable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent which the court deems reasonable, and the
Agreement shall thereby be reformed.
(e) All of the covenants in this paragraph 3 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Employee against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants. It is specifically
agreed that the period of two (2) years following termination of employment
stated at the beginning of this paragraph 3, during which the agreements and
covenants of Employee made in this paragraph 3 shall be effective, shall be
computed by excluding from such computation any time during which Employee is in
violation of any provision of this paragraph 3.
4. PLACE OF PERFORMANCE; RELOCATION RIGHTS.
(a) Employee understands that he may be requested by the Company to
relocate from his present residence to another geographic location in order to
more efficiently carry out his duties and responsibilities under this Agreement
or as part of a promotion or other increase in duties and responsibilities. In
such event, if Employee agrees to relocate, the Company will pay all relocation
costs to move Employee, his immediate family and their personal property and
effects. Such costs may include, by way of example, but are not limited to,
pre-move visits to search for a new residence, investigate schools or for other
purposes; temporary lodging and living costs prior to moving into a new
permanent residence; duplicate home carrying costs; all closing costs on the
sale of Employee's present residence and on the purchase of a comparable
residence in the new location; and added income taxes that Employee may incur if
any relocation costs are not deductible for tax purposes. The general intent of
the foregoing is that Employee shall not personally bear any out-of-pocket cost
as a result of the relocation, with an understanding that Employee will use his
best efforts to incur only those costs which are reasonable and necessary to
effect a smooth, efficient and orderly relocation with minimal disruption to the
business affairs of the Company and the personal life of Employee and his
family.
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(b) Notwithstanding the above, if Employee is requested by the Company to
relocate and Employee refuses, such refusal shall not constitute "cause" for
termination of this Agreement under the terms of paragraph 5(c).
5. TERM; TERMINATION; RIGHTS ON TERMINATION.
(a) TERM. The term of this Agreement shall begin on the date hereof and
continue for three (3) years (the "Initial Term") unless terminated sooner as
herein provided, and shall continue thereafter on a year-to-year basis on the
same terms and conditions contained herein in effect as of the time of renewal
(the "Term"). This Agreement and Employee's employment may be terminated in any
one of the followings ways:
(i) DEATH. The death of Employee shall immediately terminate this
Agreement with no severance compensation due to Employee's estate.
(ii) DISABILITY. If, as a result of incapacity due to physical or
mental illness or injury, Employee shall have been absent from his
full-time duties hereunder for four (4) consecutive months, then thirty
(30) days after receiving written notice (which notice may occur before or
after the end of such four (4) month period, but which shall not be
effective earlier than the last day of such four (4) month period), the
Company may terminate Employee's employment hereunder provided Employee is
unable to resume his full-time duties with or without reasonable
accommodation at the conclusion of such notice period. Also, Employee may
terminate his employment hereunder if his health should become impaired to
an extent that makes the continued performance of his duties hereunder
hazardous to his physical or mental health or his life, provided that
Employee shall have furnished the Company with a written statement from a
qualified doctor to such effect and provided, further, that, at the
Company's request made within thirty (30) days of the date of such written
statement, Employee shall submit to an examination by a doctor selected by
the Company who is reasonably acceptable to Employee or Employee's doctor
and such doctor shall have concurred in the conclusion of Employee's
doctor. In the event this Agreement is terminated as a result of
Employee's disability, Employee shall receive from the Company, in a
lump-sum payment due within ten (10) days of the effective date of
termination, the base salary at the rate then in effect for whatever time
period is remaining under the Initial Term of this Agreement or for one
(1) year, whichever amount is greater; provided, however, that any such
payments shall be reduced by the amount of any disability insurance
payments payable to the Employee as a result of such disability.
(iii) GOOD CAUSE. The Company may terminate the Agreement
immediately for good cause, which shall be: (1) Employee's willful,
material and irreparable breach of this Agreement; (2) Employee's gross
negligence in the performance or intentional nonperformance of any of
Employee's material duties and responsibilities hereunder; (3) Employee's
willful dishonesty, fraud or misconduct with respect to the business or
affairs of the Company which materially and adversely affects the
operations or reputation of the
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Company; (4) Employee's conviction of a felony crime; or (5) confirmed
positive illegal drug test result. In the event of a termination for good
cause, as enumerated above, Employee shall have no right to any severance
compensation.
(iv) WITHOUT CAUSE. At any time after the commencement of
employment, Employee may, without cause, terminate this Agreement and
Employee's employment, effective thirty (30) days after written notice is
provided to the Company. Should Employee be terminated by the Company
without cause during the Initial Term, Employee shall receive from the
Company, in a lump-sum payment due on the effective date of termination,
the base salary at the rate then in effect for whatever time period is
remaining under the Initial Term of this Agreement or for one (1) year,
whichever amount is greater. Should Employee be terminated by the Company
without cause after the Initial Term, Employee shall receive from the
Company, in a lump-sum payment due on the effective date of termination,
the base salary rate then in effect equivalent to one (1) year of salary.
Further, any termination without cause by the Company shall operate to
shorten the period set forth in paragraph 3(a) and during which the terms
of paragraph 3 apply to one (1) year from the date of termination of
employment. If Employee resigns or otherwise terminates his employment,
the provisions of paragraph 3 hereof shall apply, except that Employee
shall receive no severance compensation.
(b) CHANGE IN CONTROL OF THE COMPANY. In the event of a "Change in Control
of the Company" (as defined below) during the Term, paragraph 12 below shall
apply.
(c) EFFECT OF TERMINATION. Upon termination of this Agreement for any
reason provided above, Employee shall be entitled to receive all compensation
earned and all benefits and reimbursements due through the effective date of
termination. Additional compensation subsequent to termination, if any, will be
due and payable to Employee only to the extent and in the manner expressly
provided herein. All other rights and obligations of the Company and Employee
under this Agreement shall cease as of the effective date of termination, except
that the Company's obligations under paragraph 9 herein and Employee's
obligations under paragraphs 3, 6, 7, 8 and 10 herein shall survive such
termination in accordance with their terms.
(d) BREACH BY COMPANY. If termination of Employee's employment arises out
of the Company's failure to pay Employee on a timely basis the amounts to which
he is entitled under this Agreement or as a result of any other breach of this
Agreement by the Company, as determined by a court of competent jurisdiction or
pursuant to the provisions of paragraph 16 below, the Company shall pay all
amounts and damages to which Employee may be entitled as a result of such
breach, including interest thereon and all reasonable legal fees and expenses
and other costs incurred by Employee to enforce his rights hereunder. Further,
none of the provisions of paragraph 3 shall apply in the event this Agreement is
terminated as a result of a breach by the Company.
(e) CERTAIN TERMINATIONS. If Employee is terminated without cause or
terminates his employment hereunder with Good Reason, (1) the Company shall make
the insurance premium
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payments contemplated by COBRA for a period of 18 months after such termination,
(2) the Employee shall be entitled to receive a pro rated portion of any annual
bonus to which the Employee would have been entitled for the year during which
the termination occurred had the Employee not been terminated and (3) all of
Employee's options to purchase Metals stock shall vest thereupon.
(f) DEFINITION OF "GOOD REASON". Employee shall have "Good Reason" to
terminate this Agreement and his employment hereunder upon the occurrence of any
of the following events: (a) Employee is demoted by means of a reduction in
authority, responsibilities or duties to a position of less stature or
importance within the Company than the position described in Section 1 hereof;
or (b) Employee's annual base salary as determined pursuant to Section 2 hereof
is reduced to a level that is less than 90% of the base salary paid to Employee
during the prior contract year under this Agreement, unless Employee has agreed
in writing to that demotion or reduction.
6. RETURN OF COMPANY PROPERTY. All records, designs, patents, business
plans, financial statements, manuals, memoranda, lists and other property
delivered to or compiled by Employee by or on behalf of the Company or its
representatives, vendors or customers which pertain to the business of the
Company shall be and remain the property of the Company and be subject at all
times to its discretion and control. Likewise, all correspondence, reports,
records, charts, advertising materials and other similar data pertaining to the
business, activities or future plans of the Company which is collected by
Employee shall be delivered promptly to the Company without request by it upon
termination of Employee's employment.
7. INVENTIONS. Employee shall disclose promptly to the Company any and all
significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by Employee,
solely or jointly with another, during the period of employment or within one
(1) year thereafter, and which are directly related to the business or
activities of the Company and which Employee conceives as a result of his
employment by the Company. Employee hereby assigns and agrees to assign all his
interests therein to the Company or its nominee. Whenever requested to do so by
the Company, Employee shall execute any and all applications, assignments or
other instruments that the Company shall deem necessary to apply for and obtain
Letters Patent of the United States or any foreign country or to otherwise
protect the Company's interest therein.
8. TRADE SECRETS. Employee agrees that he will not, during or after the
Term of this Agreement with the Company, disclose the specific terms of the
Company's relationships or agreements with their respective significant vendors
or customers or any other significant and material trade secret of the Company,
whether in existence or proposed, to any person, firm, partnership, corporation
or business for any reason or purpose whatsoever.
9. INDEMNIFICATION. In the event Employee is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against Employee), by reason of the fact that he is or was performing services
under this Agreement, then the Company shall indemnify Employee against all
expenses
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(including attorneys' fees), judgments, fines and amounts paid in settlement, as
actually and reasonably incurred by Employee in connection therewith, to the
maximum extent permitted by applicable law. The advancement of expenses shall be
mandatory to the extent permitted by applicable law. In the event that both
Employee and the Company are made a party to the same third-party action,
complaint, suit or proceeding, the Company agrees to engage counsel, and
Employee agrees to use the same counsel, provided that if counsel selected by
the Company shall have a conflict of interest that prevents such counsel from
representing Employee, Employee may engage separate counsel and the Company
shall pay all reasonable attorneys' fees of such separate counsel. The Company
shall not be required to pay the fees of more than one law firm except as
described in the preceding sentence, and shall not be required to pay the fees
of more than two law firms under any circumstances. Further, while Employee is
expected at all times to use his best efforts to faithfully discharge his duties
under this Agreement, Employee cannot be held liable to the Company for errors
or omissions made in good faith where Employee has not exhibited gross, willful
and wanton negligence and misconduct or performed criminal and fraudulent acts
which materially damage the business of the Company.
10. NO PRIOR AGREEMENTS. Employee hereby represents and warrants to the
Company that the execution of this Agreement by Employee and his employment by
the Company and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client or any other person or
entity. Further, Employee agrees to indemnify the Company for any claim,
including, but not limited to, attorneys' fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against the Company based upon or arising out of any non-competition
agreement, invention or secrecy agreement between Employee and such third party
which was in existence as of the date of this Agreement.
11. ASSIGNMENT; BINDING EFFECT. Employee understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Employee agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement. Subject to
the preceding two (2) sentences and the express provisions of paragraph 12
below, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, legal
representatives, successors and assigns.
12. CHANGE IN CONTROL.
(a) Unless Employee elects to terminate this Agreement pursuant to (c)
below, Employee understands and acknowledges that the Company may be merged or
consolidated with or into another entity and that such entity shall
automatically succeed to the rights and obligations of the Company hereunder or
that the Company may undergo another type of Change in Control. In the event
such a merger or consolidation or other Change in Control is initiated during
the Term of this Agreement, then the provisions of this paragraph 12 shall be
applicable.
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(b) In the event of a pending Change in Control wherein the Company and
Employee have not received written notice at least five (5) business days prior
to the anticipated closing date of the transaction giving rise to the Change in
Control from the successor to all or a substantial portion of the Company's
business and/or assets that such successor is willing as of the closing to
assume and agree to perform the Company's obligations under this Agreement in
the same manner and to the same extent that the Company is hereby required to
perform, then such Change in Control shall be deemed to be a termination of this
Agreement by the Company without cause during the Initial Term and the
applicable portions of paragraph 5(d) will apply; however, under such
circumstances, the amount of the lump-sum severance payment due to Employee
shall be triple the amount calculated under the terms of paragraph 5(d) and the
non-competition provisions of paragraph 3 shall not apply whatsoever.
(c) In any Change in Control situation, Employee may, at his sole
discretion, elect to terminate this Agreement by providing written notice to the
Company at least five (5) business days prior to the anticipated closing of the
transaction giving rise to the Change in Control. In such case, the applicable
provisions of paragraph 5(a)(iv) will apply as though the Company had terminated
the Agreement without cause during the Initial Term; however, under such
circumstances, the amount of the lump-sum severance payment due to Employee
shall be double the amount calculated under the terms of paragraph 5(a)(iv) and
the non-competition provisions of paragraph 3 shall apply for a period of two
(2) years from the effective date of termination.
(d) For purposes of applying paragraph 5 under the circumstances described
in (b) and (c) above, the effective date of termination will be the closing date
of the transaction giving rise to the Change in Control and all compensation,
reimbursements and lump-sum payments due Employee must be paid in full by the
Company at or prior to such closing. Further, Employee will be given sufficient
time and opportunity to elect whether to exercise all or any of his vested
options to purchase the Company's Common Stock, including any options with
accelerated vesting under the provisions of the Company's 1997 Long-Term
Incentive Plan, such that he may convert the options to shares of the Company's
Common Stock at or prior to the closing of the transaction giving rise to the
Change in Control, if he so desires.
(e) A "Change in Control" shall be deemed to have occurred if:
(i) any person, other than the Company or an Employee benefit plan
of the Company acquires directly or indirectly the Beneficial Ownership
(as defined in Section 13(d) of the Securities Exchange Act of 1934, as
amended) of any voting security of the Company and immediately after such
acquisition such Person is, directly or indirectly, the Beneficial Owner
of voting securities representing 50% or more of the total voting power of
all of the then-outstanding voting securities of the Company;
(ii) the following individuals no longer constitute a majority of
the members of the Board of Directors of the Company: (A) the individuals
who, as of the closing date of the Company's initial public offering,
constitute the Board of Directors of the Company (the
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"Original Directors"); (B) the individuals who thereafter are elected to
the Board of Directors of the Company and whose election, or nomination
for election, to the Board of Directors of the Company was approved by a
vote of at least two-thirds (2/3) of the Original Directors then still in
office (such directors becoming "Additional Original Directors"
immediately following their election); and (C) the individuals who are
elected to the Board of Directors of the Company and whose election, or
nomination for election, to the Board of Directors of the Company was
approved by a vote of at least two-thirds (2/3) of the Original Directors
and Additional Original Directors then still in office (such directors
also becoming "Additional Original Directors" immediately following their
election).
(iii) the stockholders of the Company shall approve a merger,
consolidation, recapitalization, or reorganization of the Company, a
reverse stock split of outstanding voting securities, or consummation of
any such transaction if stockholder approval is not obtained, other than
any such transaction which would result in at least 75% of the total
voting power represented by the voting securities of the surviving entity
outstanding immediately after such transaction being Beneficially Owned by
at least 75% of the holders of outstanding voting securities of the
Company immediately prior to the transaction, with the voting power of
each such continuing holder relative to other such continuing holders not
substantially altered in the transaction; or
(iv) the stockholders of the Company shall approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or a substantial portion of the
Company's assets (i.e., 50% or more of the total assets of the Company).
(f) Employee must be notified in writing by the Company at any time that
the Company anticipates that a Change in Control may take place.
(g) Employee shall be reimbursed by the Company or its successor for any
excise taxes that Employee incurs under Section 4999 of the Internal Revenue
Code of 1986, as a result of any Change in Control. Such amount will be due and
payable by the Company or its successor within ten (10) days after Employee
delivers a written request for reimbursement accompanied by a copy of his tax
return(s) showing the excise tax actually incurred by Employee.
13. COMPLETE AGREEMENT. This Agreement sets forth the entire agreement of
the parties hereto relating to the subject matter hereof and supersedes any
other employment agreements or understandings, written or oral, between the
Company and Employee. This Agreement is not a promise of future employment.
Employee has no oral representations, understandings or agreements with the
Company or any of its officers, directors or representatives covering the same
subject matter as this Agreement. This written Agreement is the final, complete
and exclusive statement and expression of the agreement between the Company and
Employee and of all the terms of this Agreement, and it cannot be varied,
contradicted or supplemented by evidence of any prior or contemporaneous oral or
written agreements. This written Agreement may not be later modified
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except by a further writing signed by a duly authorized officer of the Company
and Employee, and no term of this Agreement may be waived except by writing
signed by the party waiving the benefit of such term.
14. NOTICE. Whenever any notice is required hereunder, it shall be given
in writing addressed as follows:
To the Company: Metals USA, Inc.
0000 Xxxxxxx, Xxxxx 000X
Xxxxxxx, Xxxxx 00000
ATTN: President
To Employee: J. Xxxxxxx Xxxxxxx
00000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Notice shall be deemed given and effective on the earlier of three (3) days
after the deposit in the U.S. mail of a writing addressed as above and sent
first class mail, certified, return receipt requested, or when actually received
by means of hand delivery, delivery by Federal Express or other courier service,
or by facsimile transmission. Either party may change the address for notice by
notifying the other party of such change in accordance with this paragraph 14.
15. SEVERABILITY; HEADINGS. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative. The
paragraph headings herein are for reference purposes only and are not intended
in any way to describe, interpret, define or limit the extent or intent of the
Agreement or of any part hereof.
16. ARBITRATION. With the exception of paragraphs 3 and 7, any unresolved
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted before a panel of three (3)
arbitrators in Houston, Texas, in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association
("AAA") then in effect, provided that Employee shall comply with the Company's
grievance procedures in an effort to resolve such dispute or controversy before
resorting to arbitration, and provided further that the parties may agree to use
arbitrators other than those provided by the AAA. The arbitrators shall not have
the authority to add to, detract from, or modify any provision hereof nor to
award punitive damages to any injured party. The arbitrators shall have the
authority to order back-pay, severance compensation, vesting of options (or cash
compensation in lieu of vesting of options), reimbursement of costs, including
those incurred to enforce this Agreement, and interest thereon in the event the
arbitrators determine that Employee was terminated without disability or good
cause, as defined in paragraphs 5(a)(ii) and 5(a)(iii), respectively, or that
the Company has otherwise materially breached this Agreement. A decision by a
majority of the
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arbitration panel shall be final and binding. Judgment may be entered on the
arbitrators' award in any court having jurisdiction. The direct expense of any
arbitration proceeding shall be borne by the Company.
17. GOVERNING LAW. This Agreement shall in all respects be construed
according to the laws of the State of Texas.
18. COUNTERPARTS. This Agreement may be executed simultaneously in two (2)
or more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
METALS USA, INC.
By:
Xxxxxx X. Xxxxxx
President and Chief Executive Officer
EMPLOYEE
J. Xxxxxxx Xxxxxxx
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