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EXHIBIT 10.1
EMPLOYMENT AGREEMENT
Agreement made as of the 8th day of May, 2000 between NS
Group, Inc., a Kentucky corporation ("Employer"), and Xxxxxxx
X. Xxxxxx, Xx. ("Employee").
WITNESSETH:
WHEREAS, Employer desires to employ Employee in an
executive position with significant executive and
administrative responsibilities and Employee desires to be
employed by Employer in such capacity upon the terms and
conditions hereinafter provided; and
WHEREAS, Employee shall serve Employer as Executive Vice-
President and Chief Operating Officer of Employer and as
President of Xxxxxx Steel Corporation and Newport Steel
Corporation, or in such other executive capacity as Employer's
Board of Directors shall specify; and
WHEREAS, in such capacity Employee will develop or have
access to all of the business methods and confidential
information relating to Employer, including, but not limited
to, its financial matters, its sales and distribution
organization and methods, its designs and procedures for the
manufacture of its products, its market development, its
personnel training and development programs and its customer
and supplier relationships; and
WHEREAS, Employee and Employer desire to enter into this
Employment Agreement which sets forth the rights and
obligations of the parties during the continuation of such
employment, as well as following any termination thereof;
NOW THEREFORE, in consideration of the mutual covenants
and promises herein contained and in pursuance of the above,
Employee and Employer agree as follows:
1. EMPLOYMENT
Employer shall employ Employee as Executive
Vice-President and Chief Operating Officer of Employer
and as President of Xxxxxx Steel Corporation and Newport
Steel Corporation or in such other executive capacity as
Employer's Board of Directors shall specify, to perform
all duties that are customarily performed by one holding
such positions or as otherwise designated by Employer's
Board of Directors, and Employee agrees to such
employment, subject to the general supervision and
direction by Employer and pursuant to the terms and
conditions hereof.
Employee covenants and agrees that he will, at all times,
faithfully and industriously perform any and all duties
conferred upon him by Employer, and Employee further
agrees that he will devote all necessary working time and
attention thereto.
2. TERM; TERMINATION
Employee's employment with Employer will commence on May
8th, 2000 (the "Effective Date") and shall continue for a
period of two (2) years. Notwithstanding the foregoing,
this Employment Agreement shall terminate upon the
earliest to occur of the following:
(a) Employer terminates this Employment Agreement for
Cause, upon thirty (30) days prior written notice
to Employee. For purposes of this Employment
Agreement, "Cause" shall be defined as (i)
commission by Employee of any felony criminal act,
a crime involving moral turpitude, or a crime of
fraud or dishonesty; (ii) acts by Employee
constituting gross negligence or willful misconduct
to the detriment of the Employer; (iii) conduct
which is detrimental to the reputation, goodwill or
business operation of Employer; (iv) Employee's
misfeasance, nonfeasance or malfeasance in the
performance of his duties; (v) Employee's failure or
refusal to comply with the lawful directions of
Employer's Board of Directors or with the policies,
standards and regulations of the Employer; or (vi)
Employee's breach of Sections 4, 5, 6, 7, and 9 of
this Employment Agreement.
In the event that Employee's employment is
terminated for Cause, Employer's obligation to pay
Employee's salary, fringe benefits or any other
element of compensation will immediately cease as of
the date of termination of employment, including but
not limited to, all payments and benefits listed in
Schedule A hereto or any amendment to this
Employment Agreement. Employer will have no further
obligation to Employee other than as set forth in
this subparagraph.
(b) Employee terminates this Employment Agreement for any
reason or no reason upon thirty (30) days prior written
notice to Employer.
In the event Employee so terminates this Employment
Agreement, Employer's obligation to pay Employee's
salary, fringe benefits or any other element of
compensation will immediately cease as of the date
of termination of employment, including but not
limited to, all payments and benefits listed in
Schedule A hereto or any amendment to this
Employment Agreement. Employer will have no further
obligation to Employee other than as set forth in
this subparagraph.
(c) At Employer's option, Employee's inability to perform
his job duties due to physical or mental disability
for a period of ninety (90) days or more.
In the event that Employee's employment is
terminated under this provision, Employer shall
continue to pay Employee's base salary and fringe
benefits (as set forth in Section 3, below, and as
may be provided in Schedule A or any amendment to
this Employment Agreement, and in accordance with
the terms of any fringe benefit plan) for a period
of one (1) year following the date of Employee's
termination of Employment with Employer.
Notwithstanding the foregoing, any salary or
benefits paid under this provision will be offset by
benefits paid under any other employee plan
providing disability pay or benefits. Employer will
have no further obligation to Employee other than as
set forth in this subparagraph.
(d) Employer terminates this Employment Agreement for any
reason or no reason prior to the end of the two (2) year
employment term by providing written notice to Employee
(hereinafter "Not for Cause Termination"). This provision
will also cover termination due to Employee's death (other
than by suicide).
In such case, Employer shall continue to pay
Employee's base salary and fringe benefits (as set
forth in Section 3 below, and as may be provided in
Schedule A or any amendment to this Agreement, and
in accordance with the terms of any fringe benefit
plan) for a period of one (1) year following the
date of Employee's termination of employment with
Employer. Employer will have no further obligation
to Employee other than as set forth in this
subparagraph.
3. COMPENSATION; EMPLOYEE BENEFITS
Employer shall pay Employee for Employee's services
hereunder a salary at the rate of not less than $250,000
per annum. Employee shall also be entitled to participate
in a bonus plan, stock option program, and other fringe
benefits available to other employees of Employer who are
similarly situated in terms of (i) position with Employer
or any of its subsidiaries, (ii) seniority and (iii)
geographical location of employment. Employer shall also
reimburse Employee for up to $10,000 for the reasonable
professional fees (including attorneys fees) incurred by
the Employee in connection with the negotiation and
execution of this Agreement and the employment
relationship between the parties. Employee's
participation in the plans, benefits and programs of
Employer shall be subject to the rules, regulations and
amendments pertaining to eligibility and participation
therein.
4. OTHER EMPLOYMENT
Employee shall devote substantially all of his normal
working time, attention, knowledge, and skills solely to
the business and interest of Employer. Employee shall
not, directly, or indirectly in any manner whatsoever,
solicit, accept or serve, on behalf of himself or any
other third party, any similar or related business
without Employer's approval. Furthermore, Employee shall
not, directly or indirectly, act for the benefit or on
behalf of any competitor of Employer or in any way
inconsistent with Employer's best interest.
This provision shall not be construed to prohibit
Employee from devoting non-business hours to the passive
pursuit of personal business interests not competitive
with the business of Employer, or any subsidiary or
affiliate of Employer, provided such interests do not
interfere with Employee's duties and responsibilities
owed to Employer.
5. REPRODUCTION OF DOCUMENTS
Except with respect to personal correspondence and other
non-business related documents and other items, Employee
shall not (except in the performance of his duties
hereunder) at any time or in any manner make or cause to
be made any copies, pictures, duplicates, facsimiles or
other reproductions or recordings or any abstracts or
summaries of any reports, studies, memoranda,
correspondence, manuals, records, plans or other written,
printed or otherwise recorded materials of any kind
whatsoever belonging to or in the possession of Employer,
or any subsidiary or affiliate of Employer. Employee
shall have no right, title or interest in any such
material and Employee agrees that (except in the
performance of his duties hereunder) he will not, without
the prior written consent of Employer, remove any such
material from any premises, of Employer, or any
subsidiary or affiliate of Employer, and that he will
surrender all such material to Employer, immediately upon
the termination of his employment or at any time prior
thereto upon the request of Employer.
6. NON-DISCLOSURE OF INFORMATION
Employee specifically agrees that he will not at any
time, whether during his employment or for a period of
two (2) years after such employment ends for any reason,
disclose or communicate to any third party, or use for
any purpose (other than during his employment by Employer
for a proper business purpose) any secret, proprietary or
confidential information, or trade secret, relating to
the business of Employer, or any subsidiary or affiliate
of Employer, including business methods and techniques,
research data, marketing and sales information, customer
lists, know-how, and any other information, process or
technique or information, customer lists, know-how, and
any other information, process or technique or
information concerning the business of Employer, or any
subsidiary or affiliate of Employer, their manner and
method of operation, their plans or other data not
disclosed to the general public or known within the
industry, regardless of whether such information or trade
secret was acquired prior to or after execution of this
Employment Agreement.
7. COVENANT NOT TO COMPETE
Employer and Employee recognize that Employer's industry
is highly competitive and that Employee will acquire
special knowledge from Employer. Employee therefore
agrees that, for twelve (12) months after the employment
relationship ends for any reason:
(a) He shall not, either directly or indirectly, by or
for himself, or as agent of another, or through
others as his agent, in any way seek to induce,
bring about, promote, facilitate or encourage the
discontinuance of or in any way solicit for himself
or others, those persons or entities who are
customers or employees of Employer, or any
subsidiary or affiliate of Employer;
(b) He shall not engage in, or become (except as a less
than five percent (5%) owner, stockholder or
investor in a publicly traded company) an owner,
stockholder, partner, lender, investor, director,
officer, employee, consultant or act in any other
capacity with respect to any entity which engages
in, a business that competes with, or is
substantially similar to, the business currently
being conducted by Employer, or any subsidiary or
affiliate of Employer, and located within North
America; and
(c) If he fails to comply with any of the provisions of
this Section 7, Employee shall forthwith pay over to
the Employer the lesser of all benefits received by
Employee or Employer's actual damages resulting from
such violation of these covenants, together with all
sums expended or costs incurred by Employer to
enforce the provisions of this covenant, including
Employer's reasonable attorneys' fees.
8. INJUNCTIVE RELIEF
In addition to, and not in lieu of, any other remedy to
which Employer may otherwise be entitled, the parties
agree that a breach by Employee of any covenant set forth
in Sections 4, 5, 6, 7, or 9 of this Employment Agreement
shall result in irreparable injury, harm and damage to
Employer for which there is no adequate remedy at law,
and the parties further agree that, in the event of any
violation or breach by Employee of any of those
provisions of this Employment Agreement, Employer shall
be entitled to an immediate injunction and restraining
order through proper action filed in a court of competent
jurisdiction to prevent such violation or breach.
Employee agrees to indemnify and hold Employer harmless
for any costs and expenses, including reasonable
attorneys' fees, which Employer may incur to remedy any
violation or breach by Employee of any covenant set forth
in Sections 4, 5, 6, 7, or 9 hereof.
9. INVENTIONS
Employee agrees that any and all inventions and
discoveries, whether or not patentable, which Employee
has conceived or may conceive and which pertain to work
or business which he has performed or may perform on
behalf of Employer, whether or not during working hours,
shall be the sole and exclusive property of Employer.
Employee further agrees to inform Employer of all
inventions and discoveries promptly after they have been
conceived or made in detail sufficient to permit Employer
to understand such inventions and discoveries and
practice them without the exercise of further inventive
skill. When requested to do so, Employee agrees, whether
during the term of this Employment Agreement or within
three (3) years thereafter, to execute any and all
documents necessary or desirable to convey title to such
inventions and discoveries to Employer and to assist
Employer in perfecting and enforcing Employer's right in
and to any such invention or discovery, including filing
patent applications regarding such inventions or
discoveries in the United States or in foreign countries.
Employee agrees that any invention, product design,
product improvements or technological innovation which
Employee, either individually or jointly with others, has
already conceived or during the term of this Employment
Agreement may conceive, develop, create or suggest that
directly results from any work which Employee does or has
done for Employer or any subsidiary or affiliate of
Employer, shall be the absolute property of Employer and
shall promptly be disclosed by Employee to Employer.
10. REPRESENTATION BY EMPLOYEE
Employee represents that he is neither restricted nor
prohibited in any manner from employment and performance
of duties on behalf of Employer as herein provided.
11. SEVERABILITY
Employer and Employee agree that should any provision of
this Employment Agreement be held to be illegal, invalid
or unenforceable for any reason, such term or provision
shall be deemed to be modified to the extent necessary to
permit its enforcement to the maximum extent permitted by
applicable law, and any court making such determination
shall have power to modify any and all such provisions,
and such provisions shall then be applicable in modified
form. If any provision of this Employment Agreement is
invalid or unenforceable for any reason, the remainder of
this Employment Agreement and all other provisions herein
shall not be affected thereby.
12. ENTIRE AGREEMENT AND AMENDMENTS
Employer and Employee agree that this Agreement
constitutes the entire agreement between them with
respect to the subject matter hereof and that any and all
prior discussions, negotiations, commitments and
understandings relating thereto are hereby superseded and
merged herein. The terms and provisions of this
Agreement shall not be changed, amended, waived, modified
or terminated in any respect whatsoever except by a
written instrument executed by Employer and Employee.
13. INTERPRETATION
This Employment Agreement shall be interpreted as written
jointly by Employer and Employee.
14. GOVERNING LAW, FORUM SELECTION AND CONSENT TO PERSONAL
JURISDICTION
Employer and Employee hereby consent that any action to
enforce any provision of this Employment Agreement shall
be brought only in a state or federal court located in
the Commonwealth of Kentucky and further consent to
personal jurisdiction in said courts. This Agreement
shall be interpreted, governed and enforced in accordance
with the laws of the Commonwealth of Kentucky.
15. ASSIGNMENT
This Employment Agreement shall be binding upon and inure
to the benefit of Employer, its successors and assigns,
and to the benefit of Employee, his heirs, administrators
and legal representatives, except that Employee's duties
to perform services and rights hereunder are non-
transferable.
16. NO WAIVER OF RIGHTS
Neither failure nor delay on the part of a party in
exercising any right, power or privilege herein contained
shall operate as a waiver thereof on the part of such
party, nor shall a single or partial exercise thereof
preclude any other or further exercise of any right,
power or privilege by a party to this Employment
Agreement.
17. DISPUTE RESOLUTION PROCEDURES
If any question shall arise in regard to the
interpretation of any provision of this Agreement or as
to the rights and obligations of either of the parties
hereunder, the Employee and a designated representative
of the Employer shall meet to negotiate and attempt to
resolve such question in good faith. The Employee and
such representative may, if they so desire, consult
outside experts for assistance in arriving at a
resolution. In the event that a resolution is not
achieved within fifteen (15) days after their first
meeting, then either party may submit the question for
final resolution by binding arbitration in accordance
with the rules and procedures of the American Arbitration
Association applicable to commercial transactions, and
judgment upon any award thereon may be entered in any
court having jurisdiction thereof. The arbitration shall
be held in Covington, Kentucky. In the event of any
arbitration, the Employee shall select one arbitrator,
the Employer shall select one arbitrator and the two
arbitrators so selected shall select a third arbitrator,
any two of which arbitrators together shall make the
necessary determinations. All out-of-pocket costs and
expenses of the parties in connection with such
arbitration, including, without limitation, the fees of
the arbitrators and any administration fees and
reasonable attorney's fees and expenses, shall be borne
by the parties in such proportions as the arbitrators
shall decide that such expenses should, in equity, be
apportioned.
Notwithstanding the foregoing, disputes arising under
Sections 4, 5, 6, 7 and 9 are excluded from this Section
17 unless the parties mutually agree in writing to elect
arbitration.
18. SCHEDULE A
More specific conditions of employment are described in
the attached Amendment A to this Employment Agreement.
I HAVE READ THIS EMPLOYMENT AGREEMENT AND, UNDERSTANDING
ALL ITS TERMS, INCLUDING THAT THIS AGREEMENT CONTAINS A
BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY
THE PARTIES, I SIGN IT AS MY FREE ACT AND DEED.
IN WITNESS WHEREOF, the Employer and Employee have agreed
upon and executed this Employment Agreement on the day and
year first written above.
WITNESSES:
/s/Xxxxxxx X. Xxxxxx, Xx.
Xxxxxxx X. Xxxxxx, Xx.
NS GROUP, INC.
By: /s/Xxxx X. Xxxxxxxxx
Xxxx X. Xxxxxxxxx
President & Chief Executive Officer
Attachment: Schedule A
SCHEDULE A TO EMPLOYMENT AGREEMENT
CONDITIONS OF EMPLOYMENT
EMPLOYMENT - In Employee's position of Executive Vice
President and Chief Operating Officer of the Employer,
Employee will be expected to optimize the combined performance
of Xxxxxx Steel and Newport Steel through each energy cycle.
Primary performance measures are revenue, return on capital
employed, EBITDA and unlevered free cash flow. Employee's
success shall be measured by improvement of those measures
relative to the historical performance of Xxxxxx and Newport
Steel and relative to Maverick Tube and Lone Star Steel.
Employee will report to the Chief Executive Officer of
Employer.
SALARY - Employee's starting base salary shall be $250,000 per
year. In addition, Employee will have a bonus opportunity
equal to 100% of his annual base salary. Through fiscal 2001,
Employee's bonus will be based on the higher of (1) the Xxxxxx
Steel Bonus Program or (2) 50% of the bonus payable under the
Xxxxxx Steel Bonus Program and 50% of the bonus payable under
the Newport Steel Bonus Program. Beginning in fiscal 2002,
Employee's bonus will be based on calculation (2) in the
preceding sentence.
SALARY CONTINUATION - Employee will be eligible for salary
continuation in accordance with and subject to the provisions
of the Salary Continuation Agreement dated May 8th, 2000.
STOCK OPTIONS - Employee will be eligible for stock options in
accordance with and subject to the provisions of the Non-
Qualified Stock Option Agreement dated May 8th, 2000.
SAVINGS PLAN - Employee will be eligible to participate in the
Employer's Salaried Employee Retirement Savings Plan.
AUTOMOTIVE STIPEND AND LIVING EXPENSES - Employee will
continue to be provided with an automotive stipend of $15,000
per year or $1,250 per month for Xxxxxx Steel work. In
addition, the Company will provide Employee a car free of
rental, insurance and maintenance expense for use in the
Newport Steel area. Employer shall furnish suitable housing
accommodations and utilities (including reasonable long
distance calling expenses to his principal residence) during
such periods that Employee is performing work at the Newport
Steel location.
OTHER FRINGE BENEFITS - Employee shall participate in the
other fringe benefit programs offered by Employer to its
employees generally (including all executive retirement
plans), including health care and dental benefits for Employee
and his family, employee life insurance, sickness and accident
salary continuation and long-term disability, supplemental
sickness and accident benefits, educational assistance, and
paid vacations and holidays. Employee shall be entitled to
three (3) weeks of paid vacation during each full calendar
year and a prorated amount of vacation for any partial
calendar year.
CHANGE OF CONTROL SEVERANCE AGREEMENT - Employee's Change of
Control Severance Agreement, dated May 8th, 2000, offering
individual financial security in the event a Change of Control
occurs, provides benefits which generally would exceed the
guarantees of this Employment Agreement. Notwithstanding any
provision of this Employment Agreement to the contrary, the
benefits provided under the Change of Control Severance
Agreement are provided in lieu of any benefits under this
Employment Agreement.
REIMBURSEMENTS - Upon proof of payment, Employer shall
reimburse Employee in accordance with Employer's policies for
all monies advanced in connection with Employee's employment
for expenses incurred by Employee on behalf of Employer. To
the extent that any such Employer payments are deemed to be
taxable income (for federal, state and/or local income tax
purposes), Employer shall reimburse Employee the amount of any
additional tax liability resulting from the operation of this
paragraph in accordance with its policies and procedures.
