Exhibit 10-GG
11-20-96
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
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THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT is dated and effective
as of the 11th day of December, 1996 ("Effective Date"), and is by and between
National Steel Corporation, a Delaware corporation (the "Company"), and Xxxxxx
X. Xxxxxxx ("Executive"). In consideration of the mutual covenants contained
herein, and other good and valuable consideration (including the Termination
Benefits and the Special Termination Benefits) the receipt and adequacy of which
the Company and Executive each hereby acknowledge, the Company and Executive
hereby agree as follows:
1. Employment and Term
Executive is or may be employed by the Company pursuant to one or more
contracts or letter agreements (the "Prior Agreement"). The Company hereby
agrees to employ Executive as a Vice President of the Company and Executive
hereby agrees to accept such employment and serve in such capacity on a full-
time basis during the Term and upon the terms and conditions set forth in this
Amended and Restated Employment Agreement (this "Agreement"). Executive shall
report to an officer of the Company designated by the Company's Chief Executive
Officer and Executive will have such responsibilities, duties and authorities as
are determined by the officer to whom Executive reports. The term of employment
of Executive under this Agreement shall be the period commencing on the
Effective Date and terminating on January 31, 1998 (the "Term"). The respective
rights and obligations of the parties hereunder shall survive any termination of
employment to the extent necessary to achieve the intended preservation of
rights and obligations.
2. Salary and Annual Incentive Compensation.
Executive's annual base salary as in effect on the Effective Date shall be
the Executive's annual base salary hereunder as of the Effective Date, payable
in consecutive equal monthly installments. The term "base salary" as utilized
in this Agreement shall refer to the then current base salary as adjusted from
time to time. Executive shall also be eligible to receive annual incentive
compensation pursuant to the Company's Management Incentive Compensation Program
or any successor plan (the "MICP") during the Term and as determined in
accordance with the terms and conditions of the MICP. Executive's MICP target
annual incentive compensation for 1996 shall be 35% of base salary. The Company
will maintain in effect, for each year during the Term, the MICP or an
equivalent plan under which Executive will be eligible for an award not less
than the prior year opportunity level available to Executive. Any such annual
incentive compensation payable to Executive shall be paid in accordance with the
Company's usual practices with respect to payment of incentive compensation of
senior executives.
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3. Benefit and Compensation Plans.
(a) Executive shall be entitled during the Term to participate in all
executive compensation plans, and other employee and executive benefits,
practices, policies and programs of the Company, as presently in effect or as
they may be modified or added to by the Company from time to time ("Benefit
Plans"); and during the Term, the Company will pay the cost of financial and
tax planning services, up to a maximum amount in effect on the Effective Date of
this Agreement. Such services shall be furnished by a provider selected by
Executive.
(b) During the Term, the Company will provide Executive with coverage by
long-term disability insurance and benefits; and group or individual life
insurance or a combination thereof, all in accordance with the plans, policies,
programs and arrangements as presently in effect or as they may be modified or
added to by the Company from time to time.
(c) During the Term, Executive will participate in the Company's Executive
Deferred Compensation Plan, ERISA Parity Plan, and any other supplemental
retirement plans, benefits, practices, programs, or policies of the Company, as
in effect on the Effective Date or as they may be modified or added to by the
Company from time to time ("Compensation Plans").
4. Non-Compete Agreement
Executive hereby agrees that if Executive terminates his employment with
the Company without Good Reason, then for a period of two (2) years after the
Date of Termination, but in any event only as long as the Company satisfies its
obligations under this Agreement, (the "Restricted Period"), Executive will not
engage (either as owner, investor, partner, stockholder, employer, employee,
consultant, advisor or director) in any "Competitive Business" in the
continental United States (the "Territory"). The term "Competitive Business"
means the making, producing, manufacturing or finishing of steel products which
products are in direct competition with steel products that are made, produced,
manufactured or finished by the Company on the Date of Termination. It is
agreed that the ownership of not more than one percent of the equity securities
of any company having securities listed on an exchange or regularly traded in
the over-the-counter market shall not be deemed inconsistent with this Section
4. If any court of competent jurisdiction shall deem any obligation of this
Section 4 too lengthy or the Territory too extensive, the other provisions of
this Section shall nevertheless stand, the Restricted Period shall be deemed to
be the longest period such court deems not to be too lengthy and the Territory
shall be deemed to comprise the portion of the United States east of the
Mississippi River (or such other portion of the United States that such court
deems not to be too extensive).
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5. Non-Inducement
Executive hereby agrees that for a period commencing with the Date of
Termination and ending on the second anniversary of the Date of Termination,
Executive shall not induce, or attempt to influence, any employee of the Company
who reports either directly to the Company's Chief Executive Officer or to
another employee who reports directly to the Company's Chief Executive Officer,
to terminate his employment with the Company.
6. Non-Disclosure
For a period commencing on the Date of Termination and ending on the fifth
anniversary of the Date of Termination, Executive shall keep secret and retain
in strictest confidence, and shall not furnish, make available or disclose to
any third party or use for the benefit of himself or any third party, any
Confidential Information. As used in this Section, "Confidential Information"
shall mean any information relating to the business or affairs of the Company,
including but not limited to information relating to financial statements,
customer identities, customer needs, potential customers, employees, suppliers,
servicing methods, equipment, programs, strategies and information, analyses,
profit margins or other proprietary information used by the Company in
connection with its business; provided, however, that Confidential Information
shall not include any information which is in the public domain or becomes known
in the industry through no wrongful act on the part of Executive. Executive
acknowledges that the Confidential Information is vital, sensitive, confidential
and proprietary to the Company.
7. No Unfavorable Publicity
Subsequent to Executive's Date of Termination, Executive agrees not to make
statements or communications and not to issue any written communications or
release any other written materials which would likely be materially damaging to
the Company's reputation or standing, whether in the investor or financial
community, the steel industry or otherwise.
8. Cooperation With the Company
Executive agrees to cooperate with the Company for a reasonable period of
time after the Term of this Agreement by making himself available to testify on
behalf of the Company, in any action, suit, or proceeding. In addition, for a
reasonable period of time, Executive agrees to be available at reasonable times
to meet and consult with the Company on matters reasonably within the scope of
his prior duties with the Company so as to facilitate a transition to his
successor. The Company agrees to reimburse Executive, on an after-tax basis,
for all expenses actually incurred in connection with his provision of testimony
or consulting assistance.
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9. Release of Employment Claims
Executive and the Company agree that in the event Executive receives
Special Termination Benefits (as defined in Section 11(e)), he and the Company
will execute a mutual release agreement releasing any and all claims which
either of them have or may have against the other arising out of Executive's
employment (other than enforcement of this Agreement). The Executive agrees
that in the event the Executive's employment with the Company terminates or is
terminated, the Executive's sole and exclusive remedy shall be, and the
Company's liability shall be limited to, damages equal to the payments and
benefits to be provided by the Company hereunder and to payment or reimbursement
of Executive's costs and expenses in accordance with Section 13(b).
10. Remedies
Executive acknowledges and agrees that the covenants set forth in Sections
4 through 8 will continue to apply and be applicable regardless of whether the
termination of Executive's employment with the Company occurs during the Term or
following expiration of the Term. Executive also agrees that such covenants are
reasonable and necessary for the protection of the Company's business interests,
that irreparable injury will result to the Company if Executive breaches any of
the terms of such covenants, and that in the event of Executive's actual or
threatened breach of any such covenants, the Company will have no adequate
remedy at law. Executive accordingly agrees that in the event of any actual or
threatened breach by him of any of such covenants, the Company shall be entitled
to immediate temporary injunctive and other equitable relief, without the
necessity of showing actual monetary damages, subject to hearing as soon
thereafter as possible. Nothing contained herein shall be construed as
prohibiting the Company from pursuing any other remedies available to it for
such breach or threatened breach, including the recovery of any damages which it
is able to prove.
11. Termination of Employment.
(a) Termination During the Term Due to Death or Disability. Upon an
Executive's Date of Termination during the Term due to death or disability, the
Company will pay Executive (or his beneficiaries, dependents or estate), and
Executive (or his beneficiaries, dependents or estate) will be entitled to
receive, the Termination Benefits (as defined in Section 11(d)).
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(b) Termination During or After the Term by the Company for Cause and
Termination by Executive During the Term without Good Reason. Upon Executive's
Date of Termination (i) during or after the Term by the Company for Cause, or
(ii) by Executive during the Term without Good Reason the Company shall pay
Executive (or his beneficiaries, dependents or estate), and Executive (or his
beneficiaries, dependents or estate) shall be entitled to receive, the
Termination Benefits (as defined in Section 11(d)), except that, in the event of
termination of Executive's employment by the Company for Cause or by Executive
without Good Reason, no amount shall be paid and no right accrued in respect of
Executive under Section 11(d)(i)(B).
(c) Termination During the Term by the Company Without Cause and
Termination by Executive for Good Reason. Upon Executive's Date of Termination
during the Term either by the Company without Cause or by Executive for Good
Reason the Company shall pay Executive (or his beneficiaries, dependents or
estate), and Executive (or his beneficiaries, dependents or estate) shall be
entitled to receive, the Termination Benefits (as defined in Section 11(d)) and
the Special Termination Benefits (as defined in Section 11(e)), except that in
the event Executive is age 64 or older on the Date of Termination, the "two
times" multipliers set forth in Section 11(e)(i) shall be reduced in accordance
with the schedule set forth below:
Age Multiplier
--- ----------
64 One times
65 or older Zero
(cc) Termination Following Expiration of the Term. Upon termination of
employment following expiration of the Term, whether by the Executive with or
without Good Reason, or by the Company, without Cause: (i) the Company shall pay
Executive (or his beneficiaries, dependents, or estate), and Executive (or his
beneficiaries, dependents, or estate) shall be entitled to receive, the
Termination Benefits (as defined in Section 11(d)); except that no amount shall
be paid and no right accrued in respect of Executive under Section 11(d)(i)(B),
and a lump sum severance payment in an amount equal to Executive's then current
annual base salary; and (ii) Executive shall be eligible to receive incentive
compensation based on the Company's performance for the preceding year (to the
extent not previously paid), if and when any such incentive compensation for
such year is paid to eligible employees generally pursuant to the Company's
MICP. Amounts payable to Executive under this Section 11(cc) are in lieu of,
and not in addition to, amounts described in Sections 11(d) and 11(e) of this
Agreement.
(d) "Termination Benefits". "Termination Benefits" means the aggregate of
all of the following:
(i) A single sum cash payment by the Company to Executive within thirty
(30) days after the Date of Termination of
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(A) Executive's then current annual base salary pro rata through the Date
of Termination to the extent not theretofore paid; (B) the product of (y) the
greater of (aa) the average annual incentive compensation paid to Executive in
the three fiscal years immediately preceding the fiscal year of the Date of
Termination (or all fiscal years Executive was employed if less than three, and
annualized in the event Executive was not employed by the Company for the whole
of any such fiscal year), and (bb) Executive's target incentive compensation
percentage payable under the MICP multiplied by Executive's then current base
salary and (z) a fraction, the numerator of which is the number of days in the
current fiscal year through the Date of Termination, and the denominator of
which is 365; and (C) any accrued vacation pay to the extent not theretofore
paid.
(ii) All vested amounts owing or accrued at the Date of Termination under
any compensation and benefit plans, programs, and arrangements set forth or
referred to in this Agreement, including, but not limited to, Sections 2 and 3
hereof; and if the Date of Termination is due to Disability or death, Executive
or his estate or other beneficiaries shall receive the Disability or death
benefits described in Section 3(b);
(iii) Reasonable business expenses and disbursements incurred by Executive
prior to such Date of Termination will be fully reimbursed within ten (10) days
after the Date of Termination.
(e) "Special Termination Benefits". "Special Termination Benefits" means
the aggregate of all of the following:
(i) The Company shall pay to Executive, in a single sum in cash within
thirty (30) days after the Date of Termination, an amount equal to (y) two times
the Executive's annual base salary (immediately preceding the Date of
Termination), plus (z) in the event a Change of Control has previously occurred,
an additional amount equal to two times the greater of (aa) the average annual
incentive compensation paid to Executive in the three fiscal years immediately
preceding the fiscal year of the Date of Termination (or all fiscal years
Executive was employed if less than three, and annualized in the event Executive
was not employed by the Company for the whole of any such fiscal year), or (bb)
Executive's most recent target incentive compensation percentage payable under
the MICP multiplied by his then current base salary; provided, however, that
notwithstanding the foregoing, in the event a Change of Control has previously
occurred, the maximum aggregate amount payable under this Section 11(e)(i) shall
not exceed three times the Executive's annual base salary (immediately preceding
the Date of Termination).
(ii) For two years after Executive's Date of Termination, if Executive is
less than age 64 on his Date of Termination, or such longer period as may be
provided by the terms of the appropriate plan, program, arrangement, practice or
policy, the Company shall continue benefits to Executive and/or Executive's
dependents at least equal to those which would have been provided to them in
accordance with the Benefit Plans or this Agreement if Executive's employment
had not been terminated
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or, if more favorable to Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and their
dependents; provided, however, that if Executive is eligible to receive health
benefits under another employer-provided plan, the health benefits described
herein shall be secondary to those provided under such other plan during such
applicable period of eligibility; and provided, further, that if Executive shall
later become ineligible for health benefits under another employer-provided
plan, the health benefits provided by the Company shall be primary. If Executive
is age 64 or older on his Date of Termination, the period of "two years" in the
first line of this Section 11(e)(ii) shall be reduced to the period set forth
below:
Age Period
--- ------
64 One year
65 or older Zero
For purposes of determining vesting, eligibility and benefit accrual (for both
age and service but not the time of commencement of benefits) of Executive for
retiree benefits pursuant to such Benefit Plans, Executive shall be considered
to have remained employed until the lesser of (a) two years after the Date of
Termination or (b) age 65, and to have retired on the last day of such period.
If such Benefit Plans do not allow Executive's continued participation,
Executive shall be paid within thirty (30) days after the Date of Termination a
cash payment actuarially equivalent on an after-tax basis to the value of the
additional benefits which Executive would have received under such employee
benefit plans, programs, and arrangements in which Executive was participating
immediately prior to the Date of Termination, as if Executive had received
credit under such plans, programs, and arrangements for service, age and
compensation with the Company during the periods previously described following
Executive's Date of Termination, with such benefits payable by the Company at
the same times and in the same manner as such benefits would have been received
by Executive under such plans, programs and arrangements. The value of any
insurance-provided benefits will be based on the premium cost to Executive,
which shall not exceed the highest risk premium charged by a carrier having an
investment grade or better credit rating.
(iii) Outplacement services, the scope and provider of which shall be
selected by Executive in his sole discretion, provided by the Company at its
sole expense as incurred.
(iv) Stock options held by Executive as of the date of this Agreement will
continue to vest as if Executive had remained an employee of the Company and
shall remain fully exercisable for the lesser of (a) the entire period that
would have been available for exercise had Executive continued in the employ of
the Company through the original option term or (b) two years; such stock
options shall otherwise be governed by the plans and programs (and the
agreements and other documents thereunder) pursuant to which such stock options
were granted.
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12. Special Provisions on Change of Control.
In the event of a Change of Control, the provisions of this Section shall
apply, and the Agreement shall be interpreted and applied consistently with the
provisions of this Section.
(a) Benefit and Compensation Plans. In no event shall Benefit Plans or
Compensation Plans provide Executive with benefits or compensation, in each
case, less favorable, in the aggregate, than the most favorable of those
provided by the Company for Executive under Benefit Plans or Compensation Plans
as in effect at any time during the 120-day period immediately preceding the
Change of Control or if more favorable to Executive, those provided generally at
any time after the Change of Control to other peer executives of the Company.
If after a Change of Control (i) Executive terminates his employment with the
Company with Good Reason, or (ii) Executive's employment with the Company is
terminated without Cause, the actuarially equivalent value of nonqualified
unfunded retirement benefits under any plan, program or arrangement of the
Company shall be paid to Executive in a single sum within thirty (30) days after
Executive is no longer employed by the Company.
(b) Tax Matters. If Executive becomes entitled to one or more payments
(with a "payment" including, without limitation, any Termination Benefits,
Special Termination Benefits, the vesting of an option or other cash or non-cash
benefit or property), whether pursuant to the terms of this Agreement or any
other plan, program, policy, practice, arrangement, or agreement with the
Company (the "Benefit Payments"), which are or may become subject to the tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the
"Code") (or any similar tax that may hereafter be imposed) (the "Excise Tax"),
the Company shall indemnify and hold the Executive harmless on an after-tax
basis from the Excise Tax and any additional federal, state, and local income
tax, employment tax and penalties and interest thereon, and the Company shall
pay to Executive at the time of the Benefit Payments (or at the time the Excise
Tax is imposed, if earlier) an additional amount which shall equal and include
the Excise Tax, reimbursement for any penalties and interest that may accrue in
respect of any Excise Tax (including any penalties or interest thereon) and any
federal, state and local income or employment tax and Excise Tax on such
additional amount, including any penalties or interest thereon (collectively,
the "Additional Amounts"), but before reduction for any federal, state, or local
income or employment tax on the Benefit Payments, so that after payment of the
previously mentioned taxes (including penalties and interest thereon) Executive
retains an amount equal to the sum of (a) the Benefit Payments, and (b) an
amount equal to the product of any deductions disallowed for federal, state, or
local income tax purposes because of the inclusion of the Additional Amounts in
Executive's adjusted gross income multiplied by the highest applicable marginal
rate of federal, state, or local income taxation, respectively, for the calendar
year in which payment of the Additional Amounts is to be made.
The Benefit Payments shall be treated as "parachute payments" within the
meaning of Section 280G(b)(2) of the Code, and all "excess parachute payments"
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within the meaning of Section 280G(b)(1) of the Code shall be treated as subject
to the Excise Tax, unless, and except to the extent independent legal counsel or
independent compensation consultants or independent certified public accountants
of nationally recognized standing mutually selected by the Company and Executive
("Independent Advisors") provide a written opinion acceptable to Executive that
the Benefit Payments (in whole or in part) are not subject to Excise Tax because
they do not constitute parachute payments, or such excess parachute payments (in
whole or in part) represent reasonable compensation for services actually
rendered within the meaning of Section 280G(b)(4) of the Code in excess of the
base amount within the meaning of Section 280G(b)(3) of the Code or are
otherwise not subject to the Excise Tax;
For purposes of determining the amount of the Additional Amounts, Executive
shall be deemed (A) to pay federal income taxes at the highest marginal rate of
federal income taxation for the calendar year in which the payment of the
Additional Amounts is to be made; (B) to pay any applicable state and local
income taxes at the highest marginal rate of taxation for the calendar year in
which the payment of the Additional Amounts is to be made, net of the maximum
reduction in federal income taxes which could be obtained from deduction of such
state and local taxes if paid in such year (determined without regard to
limitations on deductions based upon the amount of Executive's adjusted gross
income); and (C) to have otherwise allowable deductions for federal, state, and
local income tax purposes at least equal to those disallowed because of the
inclusion of the Additional Amounts in Executive's adjusted gross income.
The Company shall have the right to contest any claim by the Internal
Revenue Service relating to the Excise Tax; provided, however, that the Company
shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest and shall
indemnify and hold Executive harmless, on an after-tax basis, for any Excise
Tax, federal, state and local income or employment tax (including interest and
penalties with respect thereto) imposed and payment of costs and expenses.
The Company shall bear all of its own expenses and the expense of the
Independent Advisors, and the legal, consulting and accounting expenses of
Executive incurred by Executive for any reason under or with respect to this
Section.
13. Governing Law; Disputes; Arbitration.
(a) Governing Law. This Agreement is governed by and is to be construed,
administered, and enforced in accordance with the laws of the State of Indiana,
without regard to Indiana conflicts of law principles, except insofar as the
Delaware General Corporation Law and federal laws and regulations may be
applicable. If under the governing law, any portion of this Agreement is at any
time deemed to be in conflict with any applicable statute, rule, regulation,
ordinance, or other principle of law, such portion shall be deemed to be
modified or altered to the extent necessary to conform thereto or, if that is
not possible, to be omitted from this Agreement. The
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invalidity of any such portion shall not affect the force, effect, and validity
of the remaining portion hereof.
(b) Reimbursement of Expenses in Enforcing Rights. All costs and expenses
(including, without limitation, fees and disbursements of actuaries, accountants
and counsel) incurred by Executive in seeking in good faith to enforce rights
pursuant to this Agreement shall be paid on behalf of or reimbursed to Executive
promptly by the Company, whether or not Executive is successful in asserting
such rights. If there shall be any dispute between the Company and Executive,
the Company shall pay or provide, as applicable, all undisputed amounts or
benefits as are then payable to Executive or Executive's beneficiaries or
dependents pursuant to this Agreement. Any amounts that have become payable
pursuant to the terms of this Agreement or any decision by arbitrators or
judgment by a court of law, but which are not timely paid shall bear interest,
payable by the Company, at the lower of (A) the highest lawful rate or (B) the
prime rate in effect at the time such payment first becomes payable, as quoted
by The Wall Street Journal.
(c) Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration in Chicago,
Illinois, in accordance with the rules of the American Arbitration Association
in effect at the time of submission to arbitration, by three (3) arbitrators,
one of which shall be chosen by the Company, one of which shall be chosen by
Executive, and one of which shall be chosen by the arbitrators chosen by Company
and Executive. Judgment may be entered on the arbitrators' award in any court
having jurisdiction. For purposes of entering any judgment upon an award
rendered by the arbitrators, the Company and Executive hereby consent to the
jurisdiction of any or all of the following courts: (i) the United States
District Court for the Northern District of Indiana; (ii) any of the courts of
the State of Indiana, or (iii) any other court having jurisdiction. The Company
and Executive further agree that any service of process or notice requirements
in any such proceeding shall be satisfied if the rules of such court relating
thereto have been substantially satisfied. The Company and Executive hereby
waive, to the fullest extent permitted by applicable law, any objection which it
may now or hereafter have to such jurisdiction and any defense of inconvenient
forum. The Company and Executive hereby agree that a judgment upon an award
rendered by the arbitrators may be enforced in other jurisdictions by suit on
the judgment or in any other manner provided by law. The Company shall bear all
costs and expenses arising in connection with any arbitration proceeding.
Notwithstanding any provision in this Section 13(c), Executive shall be entitled
to seek specific performance of Executive's right to be paid during the pendency
of any dispute or controversy arising under or in connection with this
Agreement.
14. Definitions
Certain terms in this Agreement are defined the first time they appear;
other terms which are capitalized are not defined the first time they appear,
but unless the context indicates otherwise, have the meanings set forth below:
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(a) "Cause". For purposes of this Agreement, "Cause" shall mean
Executive's gross misconduct (as defined herein) or willful and material breach
of this Agreement. For purposes of this definition, "gross misconduct" shall
mean (A) a felony conviction or a plea of nolo contendere to a felony charge in
a court of law under applicable federal or state laws which results in material
damage to the Company, or (B) willfully engaging in one or more acts which is
demonstrably and materially damaging to the Company. Notwithstanding the
foregoing, Executive may not be terminated for Cause unless and until there
shall have been delivered to him, within six months after the Board (A) had
knowledge of conduct or an event allegedly constituting Cause and (B) had reason
to believe that such conduct or event could be grounds for Cause, a copy of a
resolution duly adopted by a majority affirmative vote of the entire membership
of the Company's Board of Directors (excluding Executive if a member of
Company's Board of Directors), at a meeting of the Board called and held for
such purpose (after giving Executive reasonable notice specifying the nature of
the grounds for such termination and not less than 30 days to correct the acts
or omissions complained of, if correctable, and affording Executive the
opportunity, together with his counsel, to be heard before the Board) finding
that, in the good faith opinion of the Board, Executive was guilty of conduct
set forth above in this Section 14(a).
(b) "Change of Control". For the purpose of this Agreement, a "Change of
Control" shall mean:
(i) (A) If any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") acquires (by purchase, tender offer or otherwise)
or becomes the "beneficial owner" (as defined in rule 13d-3 under the Exchange
Act) of thirty percent (30%) or more of the combined voting power of the then-
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities") and (B) NKK
Corporation ceases to be the beneficial owner, directly or indirectly, of more
than fifty percent (50%) of the total voting power of all the then Outstanding
Company Voting Securities; provided, however, that for purposes of this
subsection (i), the following acquisitions shall not constitute a Change of
Control: (1) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company, or (2) any acquisition by any entity
pursuant to a transaction which complies with each of clauses (A), (B) and (C)
of subsection (iii) of this paragraph (b).
(ii) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or
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threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board;
(iii) Consummation of a reorganization, recapitalization, merger,
acquisition of securities or assets by the Company or consolidation or sale or
other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (A) the individuals and entities who were the beneficial owners,
respectively, of the then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") and Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than fifty percent (50%) of, respectively, the then-outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Business Combination
(including, without limitation, the Company or a corporation which as a result
of such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock and Outstanding
Company Voting Securities, as the case may be and (B) no Person (excluding any
corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, thirty percent
(30%) or more of, respectively, the then outstanding shares of common stock of
the corporation resulting from such Business Combination, or the combined voting
power of the then outstanding voting securities of such corporation except to
the extent that such ownership existed prior to the Business Combination and (C)
at least two-thirds of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action of the
Board, providing for such Business Combination; or
(iv) Approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.
(c) "Date of Termination". "Date of Termination" means (i) if Executive's
employment is terminated by the Company for Cause, or by Executive for Good
Reason, the date of receipt of the Notice of Termination or any later date
specified therein, as the case may be; (ii) if Executive's employment is
terminated by the Company without Cause, the Date of Termination shall be the
date on which the Company notifies Executive of such Date of Termination; and
(iii) if Executive's employment is terminated by reason of death or Disability,
or is terminated by Executive without Good Reason, the Date of Termination shall
be the date of death of Executive, the Disability Effective Date, or the date
Executive notifies the Company that Executive's employment will terminate, as
the case may be. If the Company determines in good faith that the Disability of
Executive has occurred during the Term of the Agreement (pursuant to the
definition of Disability set forth in Section 14(d)), it may give to Executive
written notice in accordance with Section
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14(f) of this Agreement of its intention to terminate Executive's employment. In
such event, Executive's Date of Termination is effective on the date that is six
months after receipt of such notice by Executive (the "Disability Effective
Date"), provided that, within such six month period, Executive shall not have
returned to full-time performance of Executive's duties. Any termination by the
Company for Cause, or by Executive for Good Reason, shall be communicated by
Notice of Termination to the other party hereto given in accordance with Section
14(f) of this Agreement.
(d) "Disability". "Disability" means the failure of Executive to render
and perform the services required of him under this Agreement, for a total of
180 days or more during any consecutive 12 month period, because of any physical
or mental incapacity or disability as determined by a physician or physicians
selected by the Company and reasonably acceptable to Executive, unless, within
six (6) months after Executive has received written notice from the Company of a
proposed Date of Termination due to such absence, Executive shall have returned
to the full performance of his duties hereunder and shall have presented to the
Company a written certificate of Executive's good health prepared by a physician
selected by Executive and reasonably acceptable to the Company.
(e) "Good Reason". For purposes of this Agreement, "Good Reason" shall
mean the occurrence of any of the following, without Executive's prior written
consent:
(i) any reduction in Executive's then current base salary or in Executive's
then current target incentive compensation opportunity under the MICP;
(ii) any reduction in benefits under the Retirement Plan, the Retirement
Equalization Benefit, the ERISA Parity Plan or the Supplemental Pension payable
to Executive under the Company's Executive Deferred Compensation Plan unless
such reduction under any tax-qualified employee benefit plan is required by law;
provided, further, that if any such reduction is required by law, "Good Reason"
shall still exist unless the Company promptly makes Executive whole for any such
reduction through equal accruals under a non-tax qualified plan;
(iii) any failure other than provided in Section 14(e)(ii) by the Company
to comply with any of the provisions of this Agreement, including but not
limited to Sections 2 and 3 of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by
Executive;
(iv) any failure by the Company to perform any obligation under, or breach
by the Company of any provision of, this Agreement;
(v) any purported termination by the Company of Executive's employment
otherwise than as expressly permitted by this Agreement; or
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(vi) any failure by the Company to comply with and satisfy Section 15(c) of
this Agreement.
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(f) "Notice of Termination". "Notice of Termination" means a written
notice which (i) indicates the specific termination provision in this Agreement
relied upon, (ii) to the extent applicable, sets forth the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provision so indicated and (iii) if the Date of Termination
is other than the date of receipt of such notice, specifies the Date of
Termination. The failure by Executive or the Company to set forth in the Notice
of Termination any fact or circumstance which contributes to a showing of Good
Reason or Cause shall not waive any right of Executive or the Company,
respectively, hereunder or preclude Executive or the Company, respectively, from
asserting such fact or circumstance in enforcing Executive's or the Company's
rights hereunder.
(g) "Board" or "Board of Directors". "Board" or "Board of Directors"
means the full board of directors of the Company as it may be constituted in
accordance with applicable law from time to time, and any committee of the board
shall not be deemed to be the Board or Board of Directors for purposes of this
Agreement.
15. Miscellaneous.
(a) Integration. This Agreement modifies and supersedes any and all prior
employment agreements (including but not limited to the Prior Agreement, if
any). This Agreement constitutes the entire agreement among the parties with
respect to the matters herein provided, and no modification or waiver of any
provision hereof shall be effective unless in writing and signed by the parties
hereto. Notwithstanding the foregoing, all stock options granted to Executive
pursuant to such Prior Agreement shall remain outstanding, and to the extent
applicable, Section 11(e)(iv) shall apply to such stock options and shall also
apply to such other stock options granted to Executive prior to the Effective
Date of this Agreement.
(b) Nonexclusivity of Rights.
Nothing in this Agreement shall prevent or limit Executive's continuing or
future participation in any plan, program, policy or practice provided by the
Company or any of its affiliated companies and for which Executive may qualify,
nor shall anything herein limit or otherwise affect such rights as Executive may
have under any contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which Executive is otherwise
entitled to receive under any plan, policy, practice or program of or any
contract or agreement with the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance with such
plan, policy, practice or program or contract or agreement except as explicitly
modified by this Agreement. In the event of any conflict between the terms and
provisions of this Agreement and any of the Company's plans, policies,
practices, programs, contracts or agreements, the terms and provisions of
whichever is more favorable to the Executive shall prevail.
(c) Non-Transferability. Neither this Agreement nor the rights or
obligations hereunder of the parties hereto shall be transferable or assignable
by Executive,
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except in accordance with the laws of descent and distribution or as specified
in Section 15(d). The Company may, but only with the consent of Executive,
assign this Agreement and the Company's rights and obligations hereunder, and
the Company shall, as a condition of the succession, require such Successor to
assume (jointly and severally with the Company) the Company's obligations and be
bound by this Agreement. Any such assignment shall not release the Company of
any of its obligations under this Agreement. For purposes of this Agreement,
"Successor" shall mean any person that succeeds to, or has the practical ability
to control (either immediately or with the passage of time), the Company's
business directly, by merger or consolidation, or indirectly, by purchase of the
Company's voting securities or all or substantially all of its assets, or
otherwise.
(d) Beneficiaries. Executive shall be entitled to designate (and change,
to the extent permitted under applicable law) a beneficiary or beneficiaries to
receive any compensation or benefits payable hereunder following Executive's
death. If Executive should die while any amount would still be payable to him
hereunder had Executive continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
his devisee, legatee or other designee or, if there is no such designee, to his
estate.
(e) Notices. Whenever under this Agreement it becomes necessary to give
notice, such notice shall be in writing, signed by the party or parties giving
or making the same, and shall be served on the person or persons for whom it is
intended or who should be advised or notified, by overnight courier service or
by certified or registered mail, return receipt requested, postage prepaid and
addressed to such party at the address set forth below or at such other address
as may be designated by such party by like notice:
If to the Company: With copies to:
Senior Vice President - Administration Senior Vice President &
National Steel Corporation General Counsel
0000 Xxxxxx Xxxxx Xxxxxxx National Steel Corporation
Xxxxxxxxx, Xxxxxxx 00000-0000 0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxxxxxx, Xxxxxxx 00000-0000
If to Executive at his then current address reflected in the Company's
records.
If the parties by mutual agreement supply each other with telecopier numbers for
the purposes of providing notice by facsimile, such notice shall also be proper
notice under this Agreement when sent. In the case of overnight courier
service, such notice or advice shall be effective when sent, and, in the cases
of certified or registered mail, shall be effective 2 days after deposit into
the mails by delivery to the U.S. Post Office. If the person to receive the
notice (or a copy thereof) for the Company is Executive, then notice to the
Company shall be sent to the Chief Executive Officer of the Company at the above
address rather than to the officer previously named.
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(f) Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.
(g) No General Waivers. The failure of any party at any time to require
performance by any other party of any provision hereof or to resort to any
remedy provided herein or at law or in equity shall in no way affect the right
of such party to require such performance or to resort to such remedy at any
time thereafter, nor shall the waiver by any party of a breach of any of the
provisions hereof be deemed to be a waiver of any subsequent breach of such
provisions. No such waiver shall be effective unless in writing and signed by
the party against whom such waiver is sought to be enforced.
(h) No Obligation To Mitigate. Executive shall not be required to seek
other employment or otherwise to mitigate Executive's damages on or after
Executive's Date of Termination, and the amount of any payment or benefit
provided for in this Agreement shall not be reduced by any compensation or
benefits earned by Executive as the result of employment by another employer or
by retirement benefits; provided, however, that, the health benefits that
Executive is entitled to receive after the Date of Termination may be reduced in
accordance with the terms of Section 11(e)(ii).
(i) Offsets; Withholding. The amounts required to be paid by the Company
to Executive pursuant to this Agreement shall not be subject to offset. The
foregoing and other provisions of this Agreement notwithstanding, all payments
to be made to Executive under this Agreement, including under Sections 11 and
12, or otherwise by the Company, will be subject to required withholding taxes
and other required deductions.
(j) Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of Executive, his heirs, executors, administrators and
beneficiaries, and shall be binding upon and inure to the benefit of the Company
and its permitted successors and assigns as provided in Section 15(c). This
Agreement is a personal contract and the rights and interests of Executive
hereunder may not be sold, transferred, assigned, pledged, encumbered, or
hypothecated by him, except as otherwise expressly permitted by the provisions
of this Agreement. This Agreement shall inure to the benefit of and be
enforceable by Executive and his personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
(k) Actuarially Equivalent Value Calculation. For the purpose of
determining an actuarially equivalent value under the terms of this Agreement,
the interest rate specified in Section 417(e)(3) of the Internal Revenue Code of
1986, or any successor section thereto, as of the date of such determination,
and the 1994 Group Annuitants Mortality Table, shall be used and for purposes of
determining present
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value under the terms of this Agreement, the interest rate specified immediately
above shall be used. All calculations shall be made at the expense of the
Company, by the independent auditors of the Company. As soon as practicable
after the need for such calculation arises, the Company shall provide to its
auditors all information needed to perform such calculations.
IN WITNESS WHEREOF, Executive has hereunto set his hand and the Company has
caused this instrument to be duly executed as of the day and year first above
written.
NATIONAL STEEL CORPORATION
By: /s/ Osamu Sawaragi
---------------------------------
Name: Osamu Sawaragi
Title: Chairman of the Board and
Chief Executive Officer
/s/ Xxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxx
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