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Exhibit 10.22
EMPLOYMENT AGREEMENT
This Agreement is entered into on the 24th day of June, 1994, by and
between STEEL DYNAMICS, INC. ("Employer"), an Indiana corporation, and XXXXXXX
X. XXXXX, XX. ("Employee").
In consideration of the mutual covenants and agreements set forth below,
the parties agree as follows:
ARTICLE I
Term of Employment
1.1 The Employer hereby hires the Employee and the Employee hereby accepts
employment with the Employer for a period of five (5) years, commencing with the
first date for which the Employee receives compensation hereunder, subject,
however, to prior termination of this Agreement in the event of disability
(Section 4.4), death (Section 4.5), or breach (Section 8.1). After the original
term, employment hereunder shall be on a month-to-month basis. In the event,
however, that employment is thereafter terminated or not renewed by the
Employer, without cause within the meaning of Section 8.1, the Employee shall be
entitled to receive six (6) months of severance compensation at the base salary
rate set forth in Section 3.2.
ARTICLE II
Duties of Employee
2.1 The duties to be performed by the Employee shall include (but shall
not be limited to) assisting in the design and layout, specification and
selection of machinery and equipment, contract negotiations, construction
monitoring, and overall supervision of a thin slab casting steel mill, to be
located in the Midwest (the "Mill"); shall include employee staffing, training,
and supervision; shall include troubleshooting in connection with start-up
operations; and shall include the performance of such duties as Vice President
of Rolling and Finishing of Steel Dynamics, Inc. as may be prescribed from time
to time by the Employer's Board of Directors. The Employee shall devote his full
business time, skill, energies, business judgment, knowledge and best efforts to
the advancement of the best interests of the Employer and the performance of his
executive, administrative and operational duties on behalf of the Employer.
2.2 The duties of the Employee may be changed from time to time by the
mutual consent of the Employer and Employee without affecting the other terms or
conditions of this Agreement.
2.3 At the commencement of his employment and thereafter during the term
of this Agreement, the Employee shall perform his
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duties at such place or places as the Employee and the Employer may agree,
including such necessary travel as shall be required.
ARTICLE III
Compensation
As compensation for services rendered under this Agreement, and in
addition to the additional Employee Benefits to which the Employee is entitled
pursuant to Article IV, the Employer shall pay to the Employee the following
amounts:
3.1 A one-time payment, paid previously, in the amount of Sixty-Five
Thousand Dollars ($65,000).
3.2 A base salary of One Hundred Fifty Thousand Dollars ($150,000) per
year, payable in periodic installments as shall be mutually agreeable between
the parties but not less than monthly payments of Twelve Thousand Five Hundred
Dollars ($12,500.00).
3.3 An annual bonus, two-thirds (2/3) of which shall be payable in cash
and the balance of one-third (1/3) of which shall be payable in cash or deferred
compensation pursuant to such terms and conditions as the parties may mutually
agree in advance (and which may include rights to apply all or a portion thereof
toward the purchase of Employer stock on the occurrence of certain future
events). The annual bonus shall not exceed in the aggregate two hundred percent
(200%) of the base salary described in Section 3.2. In order to calculate the
amount of such bonus, an annual bonus pool of funds equal to three percent (3%)
of the Employer's pre-tax earnings, as determined under generally accepted
accounting principles for financial accounting purposes, less an amount equal to
ten percent (10%) of the amount determined to constitute the equity investment
in the company, shall be placed into such bonus pool. Such bonus pool to be
allocated among specifically designated key executive employees, which shall
include the Employee in proportion to his respective base salaries. The
designation of key executive employees for bonus pool purposes, in addition to
the Employee, shall be made by the Management Committee of the Employer's Board
of Directors, with input from the Employee. Any funds not allocated or otherwise
in excess of the bonus cap described herein shall revert to unrestricted status.
During the original five (5) year term of this Agreement, the Employee
shall be entitled in any and all events to a bonus of the greater of sixty
percent (60%) of his base salary or the amount determined as a result of the
foregoing pre-tax earnings formula, regardless of the Employer's profitability.
For purposes of this Section 3.3, the amount of the "equity investment" in
the company shall be determined in accordance with generally accepted accounting
principles, for
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financial accounting purposes, and shall be calculated on the basis of the total
common and preferred stockholders' equity as of the beginning of the company's
fiscal (calendar) year for which the bonus is being determined.
All cash bonus payments shall be paid on or before April 1 of the year
following the Employer's fiscal (calendar) year for which the award is made.
3.4 In the event that after the expiration of the thirtieth (30th) month
following the commencement of actual compensation to the Employee hereunder, the
Employer has not received funding commitments to enable the proposed thin slab
casting steel mill to be constructed in the manner envisioned in a business plan
to be developed for presentation to prospective investors, or if the Employer
should determine that the proposed venture will not proceed (for that or any
other reason), then, in addition to and not in lieu of the remaining
compensation to which he is entitled hereunder, the Employee shall additionally
receive, in cash, an amount equal to two (2) years of his base salary, as
described in Section 3.2. This payment shall be deemed to be in exchange for the
common shares of the Employer owned by or through the Employee at such time, and
shall be conditioned upon the Employer's entitlement to a reconveyance of such
shares concurrently therewith. This payment shall likewise be in lieu of and not
in addition to any payments that may become due by reason of the operation of
Sections 6.1 or 6.2.
ARTICLE IV
Employee Benefits
4.1 The Employer agrees to provide the Employee and his family with major
medical health insurance and with long term disability insurance, with terms and
in amounts comparable to or better than Employee's coverages from his previous
employer, and Employer agrees to provide the Employee with term life insurance
in an amount equal to twice the Employee's base salary with double indemnity in
the case of death by accident.
4.2 The Employee shall be entitled to three (3) weeks vacation each year.
4.3 The Employer shall reimburse and make the Employee whole for the
reasonable relocation expenses of the Employee and his family, which
reimbursement shall include (but not necessarily be limited to) payment for
house sale fix-up expenses not to exceed $1,000, reimbursement for expenses of
sale of the Employee's home (including title insurance, survey, real estate
Commissions, out-of-pocket expenses relating to house hunting, and up to twelve
(12) months interest, insurance and taxes on the Employee's existing home
mortgage (or until such earlier time as the Employee shall have sold that home).
In addition, the Employer will reimburse and
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make the Employee whole on any loss on the sale of the Employee's current
residence, based on current value; and to determine "current value" the
Employee, at the Employer's expense, shall promptly secure a current MAI
appraisal of the fair market value of his present home, based upon a proposed
sale for cash within a period of twelve (12) months.
4.4 If, due to physical or mental disability, the Employee shall be unable
to perform substantially all of his duties for a continuous period of six (6)
months, either the Employee or the Employer may by notice terminate the
Employee's employment under this Agreement, effective as of sixty (60) days
after the date such notice is given. In the event of termination, however, the
Employer agrees to continue paying the Employee an amount equal to and in the
same periodic installments as his base salary, as provided in Section 3.2, less
any amounts payable to the Employee under any benefits paid by Workmen's
Compensation, or under any other state disability benefits program, or any other
Employer provided disability benefits, including the Employer's long-term
disability policy called for by Section 4.1, but only during the remaining
period of the original five (5) year term hereof.
4.5 In the event of the Employee's death, the Employee's employment under
this Agreement shall be deemed automatically terminated, effective as of the
date of death; provided, however, that the Employer shall thereafter continue
paying the Employee's estate or designated beneficiary an amount equal to and in
the same periodic installments as his base salary, as provided in Section 3.2,
but only during the remaining portion of the original five (5) year term hereof.
ARTICLE V
Reimbursement of Employee Expenses
5.1 The Employer will reimburse the Employee for reasonable business
expenses related to the business of the Employer, including expenditures for
entertainment, business promotion, and travel, according to policies and
guidelines to be prescribed from time to time by the Board of Directors. The
Employee shall be required to furnish to the Employer documentary evidence, as
required for tax purposes, containing sufficient information to establish the
amount, date, place, and the essential character of the expenditure.
ARTICLE VI
Post-Employment Ownership of Stock
6.1 Limited only to the original seven (7) year term hereunder, but
ending, if sooner, on the date the Employer's common shares of Steel Dynamics
Holdings, Inc. ("Holdings") are sold in an initial public offering and Holdings'
common shares are listed on
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any national securities exchange or quoted on the NASD automated quotation
system, should the Employee's employment terminate hereunder, then:
(a) If termination shall have occurred prior to one year after the
date of Mill Completion (the "First Anniversary"), for cause, as defined
in Section 8.1, Holdings shall automatically become entitled to a
reconveyance of the Employee's common shares, without the payment of any
consideration by Holdings other than the price paid by the Employee for
such shares (which shall be paid in cash); and Holdings shall be entitled
to petition any court with jurisdiction herein for the appointment of a
special master to effect such conveyance, such grant of authority herein
being deemed to constitute a proxy coupled with an interest.
(b) If termination shall have occurred, unrelated to any Employer
induced harassment or hostile work environment, because the Employee
voluntarily resigns prior to the Mill Completion, Holdings shall
automatically become entitled to the same reconveyance of the Employee's
shares, for the same consideration, and with the same power to compel the
reconveyance as set forth in Section 6.1(a). If termination shall have
occurred because of the Employee's disability (Section 4.4) or death
(Section 4.5) prior to the First Anniversary, or Employee's voluntary
resignation, after the date of Mill Completion and prior to the First
Anniversary, the Employee (or his estate) shall have the option,
exercisable within one (1) year following termination, to sell or "put"
his Common Shares to Holdings, for cash, for an amount, determined as of
the date of termination, equal to two (2) years of his base salary, as
described in Section 3.2, and with the same power to compel the
reconveyance as set forth in Section 6.1(a).
(c) If termination shall have occurred because of the Employer's
termination of Employee's employment, without cause, prior to the First
Anniversary, or because of termination by the Employer or the Employee
after the First Anniversary, or because of the Employee's disability or
death after the First Anniversary, the Employee shall have the option,
exercisable within one (1) year following termination, to sell or "put"
his common shares to Holdings (if, as, and when permitted under applicable
state corporate law), for cash, in quarterly installment over a period of
two (2) years, with interest at the Employer's prime of "reference" rate
for short-term commercial borrowing, for an amount, determined as of the
date of termination, equal to the greater of (i) two times Employee's
annual base salary or (ii) the fair market value of such shares. In the
event, however, that Holdings is precluded by applicable corporate law or
Holdings is in default or would be in default under a loan or other
covenant from making any payment hereunder, otherwise required by this
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Section 6.1(c), or if any such payment is required to be deferred, then,
Holdings shall not be required to purchase the Shares until such
restrictions lapse and at such time interests will also be paid to
Employee on such amount for the period Holdings was restricted from making
the required payment. Holdings shall use reasonable efforts to effectuate
Employee's exercise of the "put" herein, including good faith efforts to
obtain the consent of any lender or other party if a covenant or agreement
prohibits same or requires such consent. Fair market value of the shares
shall be agreed upon by Holdings' board of directors and the Employee. If
such parties are unable to agree upon such fair market value within 30
days of notice of any put or call, fair market value shall be determined
by a mutually agreeable appraiser.
For purposes of this Section 6.1 the term "Mill Completion" shall mean the
substantial completion of the steel mill and commencement of marketable
steel (prime or seconds) production therein.
(d) Notwithstanding the foregoing, the Employee shall only have the
right to "put" to Employer an amount of common shares with a fair market
value of up to a cap of $1.4 million.
6.2 In the event that Employee is no longer employed by Employer and
becomes employed by a competitor of Employer, Holdings shall have the right to
"call" or purchase the Employee's shares, at the same valuation and subject to
the same terms and limitations described in Section 6.1(c) and the same rights
to compel the reconveyance described in Section 6.1(a).
ARTICLE VII
Employee's Representations, Warranties and Covenants
The Employee hereby represents, warrants, covenants and agrees, to the
best of his knowledge and belief, that:
7.1 He has the full right, power, and authority to enter into this
Agreement and to perform his duties and obligations hereunder without breaching
or in any manner being in conflict with or in violation of any other agreements,
whether employment agreements or otherwise, to which he is a party or by which
he is bound.
7.2 He is not now subject to any covenant against competition or similar
covenant which would affect his right to perform the duties contemplated
hereunder.
7.3 He has not knowingly appropriated nor will he knowingly appropriate
any trade secrets, or confidential information belonging to his former or
current employer, whether in
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the form of papers, plans, drawings, specifications, electronic media, magnetic
tape, or other documents, or information contained therein.
7.4 During the period of his anticipated employment, he will develop and
have access to information related to the business, operations, future plans,
processes, specifications, procedures, and research and development that the
Employer will want to maintain as proprietary and not disclose publicly. The
Employee covenants that during the term of his employment and thereafter he will
keep confidential all such information and documents produced by or under his
direction, furnished or available to him through any other means in connection
with his employment, or to which he may otherwise have access in connection with
his employment, and which was not otherwise known to him, and that he will not
use such information to the Employer's disadvantage or disclose it to any other
person, except to the extent that such information or documents are or
thereafter become lawfully obtainable from other sources, are in the public
domain through no fault on his part, or are consented to in writing by the
Employer. Upon termination of his employment, the Employee shall return to the
Employer all documents, records, lists, plans, drawings, layouts,
specifications, and other documents which are in his possession, which relate to
the Employer, and which are covered hereby.
ARTICLE VIII
Termination
8.1 If the Employee willfully and knowingly commits a criminal act under
applicable state or federal law, Employer, at its option, may terminate this
Agreement for cause by giving written notice of such termination to the
Employee, without prejudice to any other remedy to which the Employer may be
entitled at law or in equity including Section 6.1(a); and in such event, all
further obligations of the Employer hereunder shall cease and terminate.
8.2 If this Agreement is terminated prior to the completion of the
original term of employment hereunder, for cause in the manner described in
Section 8.1, the Employee shall be entitled to the compensation earned prior to
the date of termination, as provided herein, computed pro rata up to and
including the date of termination.
8.3 Should employment be terminated without cause by the Employer, or,
even if the Employee voluntarily terminates but the reason therefor is related
to the Employer's creation or maintenance of a work environment that is hostile
to the Employee, the Employee shall be entitled to all of his compensation set
forth herein, subject only to the Employee's reasonable duty to mitigate his
damages, and provided that compensation payable to Employee by
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the Employer will be reduced on a dollar for dollar basis to the extent of
pre-tax compensation received by Employee from any competitor of the Employer.
If employment is terminated by the Employee for any other reason, the Employee
shall not be entitled to further compensation hereunder.
ARTICLE IX
Miscellaneous Provisions
9.1 Any notices to be given under this Agreement by either party to the
other shall be in writing and may be effected either by personal delivery or by
mail, registered or certified, postage prepaid, with return receipt requested.
All notices and communications required or permitted to be given hereunder shall
be given as follows:
If to the Employer, to: Steel Dynamics, Inc.
Attention: Xxxxx Xxxxx
00000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
With a copy to: Xxxx Xxxxxxxx, Esq.
000 X. Xxxx Xxxxxx
Xxxx Xxxxx, XX 00000
If to the Employee, to: Xxxxxxx X. Xxxxx, Xx.
0000 Xxxxxxxxxx Xxxx.
Xxxxxxxxxxxxxx, XX 00000
With a copy to: Xxxx Xxxxxxxx, Esq.
000 X. Xxxx Xxxxxx
Xxxx Xxxxx, XX 00000
or to such other address as either party shall have furnished to the other by
like notice. Notices shall be effective as of the third business day subsequent
to posting or, if earlier, at the time of actual personal service.
9.2 This Agreement supersedes all other oral and written agreements
between the parties with regard to the Employer's employment of the Employee,
including that certain Employment Agreement dated September 7, 1993 between
Employer and Employee, and this Agreement contains all of the covenants and
agreements between the parties with regard to employment hereunder. There are no
promises, representations, conditions, provisions, or terms relating thereto
other than those set forth in this Agreement.
9.3 Based upon and subject to the Employee's representations and
warranties to the Employer as set forth in Section 7.3, the Employer hereby
agrees that in the event of any claims made against the Employee by his prior
employer, including any litigation that may occur as a result thereof, or
against the
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Employer and the Employee, and in which the claim is made that the Employee
and/or the Employer has violated or is violating any agreement, undertaking, or
covenant to which the Employee is or was a party and by which the Employee is
bound, the Employer will provide the Employee with a defense against any such
claim or litigation, including attorney fees, expenses, and other costs of
defense; and the Employer will indemnify and hold the Employee harmless from and
against any damages, costs, and attorney fees, or amounts paid in settlement of
any such claims; provided, however, that this indemnity and hold harmless
agreement shall not apply to any award for punitive damages nor to the extent
that the Employee is found to have willfully or intentionally misappropriated
any trade secrets, willfully or intentionally violated any such agreement, or
misappropriated proprietary documents.
9.4 This Agreement shall be governed by and construed in accordance with
the laws of the State of Indiana.
9.5 No waiver by any party of any provision of this Agreement shall be
deemed a waiver by such party of such provision in any other instance or a
waiver of any other provision hereunder.
9.6 This Agreement cannot be modified except in writing, signed by the
party to be charged.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
EMPLOYER:
STEEL DYNAMICS, INC.
BY: /s/ Xxxxx X. Xxxxx
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XXXXX XXXXX, President
Date: June 24, 1994
EMPLOYEE:
/s/ Xxxxxxx X. Xxxxx, Xx.
-------------------------------------
XXXXXXX X. XXXXX, XX.
Date: June 24, 1994
STEEL DYNAMICS HOLDINGS INC.
BY: /s/ Xxxxx X. Xxxxx
---------------------------------
XXXXX XXXXX, President
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