SETTLEMENT AND RELEASE AGREEMENT
Agreement dated as of April 3, 1998 between Handy & Xxxxxx, a
New York corporation (the "Company"), WHX Corporation, a Delaware corporation
("WHX"), HN Acquisition Corp., a New York corporation (the "Purchaser"), and
Xxxxxx X. Xxxxxxxxx (the "Executive").
WHEREAS, the Purchaser has commenced a tender offer to
purchase all the issued and outstanding shares of the Company (the "Tender
Offer"), pursuant to an offer to purchase dated March 6, 1998 and a related
letter of transmittal of the same date;
WHEREAS, the Company and the Purchaser have entered into an
Agreement and Plan of Merger dated as of March 1, 1998 (as it may be amended and
modified from time to time, the "Merger Agreement"), providing for the merger of
the Purchaser with and into the Company following completion of the Tender
Offer;
WHEREAS, the Executive is entitled to certain payments from
the Company, contingent upon a change of control of the Company, the occurrence
of certain events after a change of control of the Company, or upon retirement
of the Executive from the Company, pursuant to agreements and arrangements
listed on Schedule A to this Agreement (the "Compensation Arrangements");
WHEREAS, the successful completion of the Tender Offer will
constitute a change of control of the Company for the purposes of the
Compensation Arrangements and, as a result, the amounts described in Schedule B
to this Agreement will be paid to the Executive and the payments and benefits
described in Schedule C to this Agreement will or, in certain instances may,
become payable by the Company;
WHEREAS, in order to achieve certainty in the relations among
the parties after the Purchaser accepts shares for payment pursuant to the
Tender Offer (the "Tender Closing") (the date of which is anticipated to be
April 7, 1998), and to give effect to certain agreements they have made
concerning the Compensation Arrangements, the parties wish to enter this
Settlement and Release Agreement confirming and restating the amounts which the
Executive is entitled to receive from the Company under the Compensation
Arrangements, and providing for the release, subject to the terms of this
Agreement, of the Company, the Purchaser and WHX from any obligation other than
those described in this Agreement, and of the Executive from certain obligations
to which he might otherwise be subject.
NOW THEREFORE, in consideration of the mutual covenants
contained herein, the parties agree as follows:
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1. AMOUNTS TO BE PAID ON TENDER CLOSING
The amounts specified in Schedule B to this Agreement shall be paid by
the Company to the Executive immediately prior to the Tender Closing.
2. AMOUNTS TO BE PAID AFTER TENDER CLOSING
The payments and benefits specified in Schedule C to this Agreement
shall be made and provided by the Company to the Executive, in the amounts and
at the times provided in the relevant Compensation Arrangements, following the
Tender Closing.
3. RELEASE
3.1 GENERAL RELEASES:
(a) The Executive:
(i) agrees not to xxx or file any charges of discrimination,
or any other action or proceeding with any local, state and/or
federal agency or court; and
(ii) waives, discharges and releases the Company, WHX, their
affiliates, subsidiaries, directors, officers, employees,
representatives, agents and their successors and assigns from
any and all actions, causes of action, suits, debts, dues,
sums of money, accounts, reckonings, bonds, bills,
specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, liabilities, damages,
judgments, extents, executions, claims and demands, whether
known or unknown, whatsoever, in law, admiralty or equity
arising out of or relating in any way to the Executive's employment
with the Company prior to the Tender Closing, or to the Executive's
separation from employment with the Company prior to or
contemporaneously with the Tender Closing.
The claims covered by this paragraph (a) include, without
limitation, claims under all laws, rules or regulations as currently in
effect, or as may exist from time to time, relating to employment and
related matters, including without limitation Title VII of the Civil
Rights Act of 1964; the Age Discrimination in Employment Act of 1967;
the Civil Rights Act of 1866; the Civil Rights Act of 1991; the
Rehabilitation Act of 1973; the Americans with Disabilities Act of
1990; the Worker Adjustment and Retraining Notification Act of 1988;
the Older Workers Benefit Protection Act of 1990; the Pregnancy
Discrimination Act of 1978; the Employee Retirement Income Security Act
of 1974; the Family and Medical Leave Act of 1993; Fair Labor Standards
Act; and any and all contract, tort, wrongful termination or other
retaliation claims in connection with workers' compensation claims.
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(b) The Company and WHX:
(i) agree not to xxx or file any charges or any other
action or proceeding with any local, state or federal agency
or court; and
(ii) waive, discharge and release the Executive from any and
all actions, causes of action, suits, debts, dues, sums of
money, accounts, reckonings, bonds, bills, specialties,
covenants, contracts, controversies, agreements, promises,
variances, trespasses, liabilities, damages, judgments,
extents, executions, claims and demands, whether known or
unknown, whatsoever, in law, admiralty or equity, other than
for acts of Executive constituting embezzlement, fraud, or
deliberate dishonesty
arising out of the Executive's employment with the Company prior to the
Tender Closing, relating to the payments made under this Agreement, or
arising out of the Executive's separation from employment with the
Company prior to or contemporaneously with the Tender Closing.
3.2 Nothing in the foregoing release or in this Agreement shall in any way
limit or affect the Executive's rights to indemnification (including
advancement of expenses) pursuant to (i) the Company's Certificate of
Incorporation and By-laws, (ii) Section 5.12 of the Merger Agreement,
and (iii) the provisions of the New York Business Corporation Law.
3.3 The Company and WHX waive, discharge and release the Executive from any
obligation to mitigate damages arising from breach of this Agreement,
or any payment obligation arising under this Agreement, by seeking
alternative employment or otherwise. Moreover, the Company and WHX
agree that no payment or damages arising under this Agreement shall be
reduced by any compensation received by the Executive from any employer
of the Executive other than the Company, or from any other source.
3.4 The waivers, discharges and releases made by the Executive under this
Section 3 shall be contingent upon the full and timely payment and
provision by the Company of amounts payable to and benefits receivable
by the Executive described in the Schedules to this Agreement.
3.5 EMPLOYEE-AT-WILL; RELEASE OF SEVERANCE ENTITLEMENTS: The Executive
acknowledges that following the Tender Closing and the payment of the amounts
specified in Schedule B that his status will be that of an employee-at-will and
that should his employment be terminated following the Tender Closing he will
not be entitled to any cash severance or any other payments or benefits other
than those provided in Schedule C to this Agreement or required by law unless he
enters into an agreement with the Company after the Tender Closing providing for
such a severance payment.
3.6 CONTINUING EFFECT OF COMPENSATION ARRANGEMENTS: The Compensation
Arrangements shall have no further force or effect after the Tender Closing
EXCEPT insofar as they provide for the payments and benefits listed in Schedule
C of this Agreement, in which respect they shall continue to govern the nature,
amount and timing of all such payments and benefits.
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4. RESTRICTION TO EMPLOYMENT RELATIONSHIP
The parties acknowledge that this Agreement is intended to apply only
to rights, obligations and claims arising out of the Compensation Arrangements
and the employment relationship (or its termination) between the Executive and
the Company. In particular, and without limiting the effect of the previous
sentence, this Agreement does not apply to, limit or affect any rights which the
Executive may have in relation to the Tender Offer or the Merger in his capacity
as a shareholder of the Company (including rights arising out of the ownership
of shares that were originally received by the Executive as compensation for his
services as an employee).
5. DISCLOSURE OF INFORMATION.
5.1 In the course of the Executive's employment with the Company, whether
past or in the future, the Executive has received, and will continue to receive,
information that gives the Company an advantage over its competitors, and which
is confidential and proprietary, relating to names and preferences of customers,
the costs and profits of particular lines, products and markets, technological
data, computer programs, know-how, potential acquisitions, sources of financing,
corporate operating and financing strategies, expansion plans and similar
related information (together, the "Confidential Material"). Confidential
Material shall not include any information that (i) is generally available to
the public (other than as a result of disclosure by the Executive), or (ii)
becomes available to the Executive on a non-confidential basis from a source
other than the Company, provided that such source is not known by the Executive
to be bound by a confidentiality agreement with, or other obligation of secrecy
to, the Company. At no time during the period commencing on the date first
written above and continuing through the third anniversary of the termination of
Executive's employment with the Company, shall the Executive individually or
jointly with others, for the benefit of himself or any third party, (i) in whole
or in part, disclose such Confidential Material to any person, firm,
corporation, association or other entity for any reason or purpose whatsoever or
(ii) make use of any such Confidential Material for his own purposes or for the
benefit of any person, firm, association, corporation or other entity (except
the Company) under any circumstances; provided, however, that the Executive may
disclose any Confidential Material as required by court order or which is
relevant to any dispute or proceeding between the Executive and the Company. The
Executive acknowledges that any disclosure of the Confidential Material would
cause material and irreparable harm to the Company and its business.
5.2 All papers, books and records of every kind and description relating to
the business and affairs of the Company or its affiliates, whether or not
prepared by the Executive, shall be the sole and exclusive property of the
Company, and the Executive shall surrender them to the Company at any time upon
request by the Chairman of the Board or any authorized officer.
5.3 The provisions of this Section 5 will survive the expiration or earlier
termination of the term of this Agreement.
6. ARBITRATION
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Any dispute or controversy between the Company and the Executive,
whether arising out of or relating to any of the Compensation Arrangements (to
the extent they remain in force) or this Agreement, or the breach of any of the
Compensation Arrangements or this Agreement, shall be settled by arbitration
before a single arbitrator administered by the American Arbitration Association
in accordance with its Commercial Rules then in effect and judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. Such arbitration shall take place in the New York City metropolitan
area. The arbitrator shall have the authority to award any remedy or relief that
a court of competent jurisdiction could order or grant, including, without
limitation, the issuance of an injunction. However, either party may, without
inconsistency with this arbitration provision, apply to any court having
jurisdiction over such dispute or controversy and seek interim, provisional,
injunctive or other equitable relief until the arbitration award is rendered or
the controversy is otherwise resolved. Either party may also apply to a court
for enforcement of the remedy or relief the arbitrator orders or grants. The
Company shall reimburse the Executive, upon demand, for all costs and expenses
(including without limitation attorneys' fees) reasonably incurred by the
Executive in good faith in connection with this arbitration provision, including
without limitation in connection with any such application undertaken by the
Executive in good faith, as well as for all such costs and expenses reasonably
incurred by the Executive in connection with entering or enforcing the award
rendered by the arbitrator. Except as necessary in court proceedings to enforce
this arbitration provision or an award rendered hereunder, or to obtain interim
relief, neither a party nor an arbitrator may disclose the existence, content or
results of any arbitration hereunder without the prior written consent of the
Company.
7. MISCELLANEOUS
7.1 INTERPRETATION: References to a party shall include that party's
successors and assigns, and in the case of references to the Company shall
include any entity related to WHX to which all or a substantial portion of the
business or assets of the Company are transferred at any time following the
completion of the Merger Agreement (and WHX shall cause the Company to include
an appropriate term to that effect in any agreement providing for such a
transfer), provided that any such inclusion shall not detract from the Company's
own obligations under this Agreement.
7.2 INJUNCTIVE RELIEF: If there is a breach or threatened breach of the
provisions of Section 5 of this Agreement, the Company shall be entitled to an
injunction restraining the Executive from such breach. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies for such
breach or threatened breach.
7.3 ACKNOWLEDGMENT: Executive acknowledges (i) that the provisions of
Section 5 are reasonable and necessary for the protection of the Company and
(ii) that such provisions, and the period or periods of time, geographic areas
and types and scope of restrictions on the activities specified therein are, and
are intended to be, divisible. Without affecting the generality of section 7.6
herein, if any provision of Section 5, including any sentence, clause or part
thereof, shall be deemed contrary to law or invalid or unenforceable in any
respect by a court of competent jurisdiction, the remaining provisions shall not
be affected, but shall, subject to the discretion of such court, remain in full
force and effect and any invalid and unenforceable provisions shall be deemed,
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without further action on the part of the parties hereto, modified, amended and
limited to the extent necessary to render the same valid and enforceable.
7.4 GOVERNING LAW: This Agreement shall be governed by and construed in
accordance with the laws of New York (without regard to the choice-of-law rules
thereof).
7.5 ENTIRE AGREEMENT: This Agreement (including the Schedules hereto), the
Merger Agreement and the Compensation Arrangements to the extent they remain in
force under Section 3.6 of this Agreement, constitute the entire agreement
between the parties with respect to compensation of the Executives contingent
upon, relating to, or due as a result of termination of employment
contemporaneous with, the change of control of the Company, and supersedes any
prior understandings, agreements, or representations by or among the parties,
written or oral, to the extent they related in any way to such subject matter.
7.6 SEVERABILITY: To the extent possible, this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating or affecting in any manner
whatsoever the remainder of such provision or the remaining provisions of this
Agreement.
7.7 COUNTERPARTS: This Agreement may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken together
constitute one and the same Agreement.
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SIGNED
HANDY & XXXXXX
By: /s/ Xxxxx X. Grezelecki
------------------------
As Its: Vice Chairman
WHX CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
------------------------
As Its: Assistant Treasurer
HN ACQUISITION CORP.
By: /s/ Xxxxxxx X. Xxxxx
------------------------
As Its: Vice President
/s/ Xxxxxx X. Xxxxxxxxx
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Executive
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XXXXXX XXXXXXXXX
SCHEDULE A
AGREEMENTS AND ARRANGEMENTS WITH RESPECT TO WHICH THE EXECUTIVE IS A PARTY OR A
PARTICIPANT
1. Amended and Restated Agreement dated as of 27 February, 1998 between
the Executive and the Company (the "1998 Agreement");
2. Handy & Xxxxxx Management Incentive Plan - Corporate Group Participants
(as amended) (the "MIP");
3. Handy & Xxxxxx Long-Term Incentive Plan (as amended) (the "LTIP");
4. Handy & Xxxxxx Long-Term Incentive Stock Option Plan (as amended) and
its successor, the Handy & Xxxxxx 1995 Omnibus Stock Incentive Plan (as amended)
(the "Stock Option Plans");
5. Handy & Xxxxxx Pension Plan (the "Qualified Pension Plan").
SCHEDULE B
COMPENSATION PAYABLE TO THE EXECUTIVE ON THE TENDER CLOSING
1. SEVERANCE PAYMENTS: $165,000.00
One year's salary, under Section 4(a) of the 1998
Agreement(1).
2. CASH OUT OF 6TH CYCLE RESTRICTED STOCK UNDER THE LTIP: $97,325.25
2,761 shares x $35.25 tender offer price per
share See attached Exhibit 1 for details of
awards of Restricted Stock in the sixth cycle.
The sixth cycle grants of Restricted Stock are to
be awarded pro- rata with the proportion of the
sixth cycle which will have elapsed up to 3 April
1998, the date of the Tender Closing. The sixth
cycle began on 1 January 1997 and would normally
terminate on 31 December 1999.
Note that this Agreement does not relate to stock
that was granted in earlier cycles and that has
already vested, in respect of which the Executive
will receive the tender offer price as an
ordinary stockholder.
3. INTERIM 1998 AWARD UNDER THE MIP: $21,402.00
This interim award is based on the 1997 award,
pro-rated for the period elapsed in 1998 up to
the date of the Tender Closing.
4. TOTAL OF ITEMS 1 THROUGH 4: $283,727.25
CASH OUT OF STOCK OPTIONS
CASH OUT OF STOCK OPTIONS AWARDED UNDER THE STOCK OPTION PLANS: $387,812.00
See attached Exhibit 1 for the numbers of options
granted and their exercise prices.
The value of each option is the difference
between the exercise price of the option as shown
on the attached Exhibit 1, and the $35.25 tender
offer price per share.
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(1) The references to provisions of the Compensation Arrangements in this
Schedule are explanatory and for reference only. They do not incorporate such
provisions into this Agreement, save such provisons from the effect of Section
3.6 of this Agreement, or otherwise imply that such provisions have any
continued effect.
SCHEDULE C
COMPENSATION AND BENEFITS PAYABLE TO THE EXECUTIVE AFTER THE TENDER CLOSING
1. Payment of premiums under Handy & Xxxxxx group life, medical and dental
insurance plans for one year, under Section 4(b) of the 1998 Agreement, in the
event of termination of the Executive's employment within two years following
the date of the Tender Closing by the Company other than for Cause or Disability
(as defined in the 1998 Agreement) or by the Executive for Good Reason (as
defined in the 1998 Agreement);
2. Pension under the Qualified Pension Plan, and payment under any other
qualified plans operated by Handy & Xxxxxx in which the Executive is a
participant.
