EXHIBIT 4.4
EMPLOYMENT AGREEMENT
WITH XXXXXX X. XXXXXXX
THIS EMPLOYMENT AGREEMENT ("Agreement"), is made and entered into as
of the 15th day of April 1996, to be effective as of July 1, 1996 (the
"Effective Date") by and between CONSOLIDATED STAINLESS, INC., a Delaware
corporation (the "Company"), having its principal office at 0000 Xxxx Xxxxx Xxxx
000, Xxxxx 000, Xxxxxxxx, Xxxxxxx 00000 and XXXXXX X. XXXXXXX, an individual
(the "Employee"), residing at 0000 Xxxx Xxxxx Xxxx, Xxxxxxxx, Xxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, the Employee has served as a financial consultant to the
Company; and
WHEREAS, the Company desires to obtain the services of the Employee to
serve as the Executive Vice-President and Chief Financial Officer of the
Company, as of the Effective Date; and
WHEREAS, the Employee is willing to serve as the Executive
Vice-President and Chief Financial Officer of the Company, all upon the terms
and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises, and the mutual
covenants herein contained, the parties hereby agree as follows:
PART A. EMPLOYMENT.
1. Throughout the term of this Agreement, the Company shall employ
the Employee and the Employee shall render services to the Company in the
capacity and with the title of Executive Vice-President and Chief Financial
Officer of the Company. In such capacity, the Employee, subject at all times to
the direction of the President and/or the Chairman and Chief Executive Officer,
and the Board of Directors of the Company, shall supervise all financial
policies of and planning for the Company and its subsidiaries, become a member
of the Audit Committee and shall perform other duties (including, without
limitation, activities concerning public and private financings, preparation of
annual and periodic financial statements, the filing of reports under the
Securities Act of 1933, as amended, and the Securities and Exchange Act of 1934,
as amended, the financial aspects of acquisitions and financial relationships
with the investment community), with such general powers and duties in respect
of the Company as are usually vested in the Executive Vice-President and Chief
Financial Officer of a corporation.
2. Throughout the period of his employment hereunder, the Employee
shall devote all of his business time, attention, knowledge and skills in order
to perform his duties hereunder faithfully, diligently and to the best of his
abilities; PROVIDED, that, during the twelve month period following the
Effective Date, the Employee shall be permitted to devote a portion of his time
to consummating the sale of his accounting practice.
3. Throughout the period of his employment hereunder, the Employee
shall, at the request of the Chairman of the Board or the President of the
Company, attend all meetings of the Board of Directors of the Company and its
subsidiaries.
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PART B. TERM OF EMPLOYMENT; TERMINATION OF AGREEMENT.
1. Subject to the earlier termination of this Agreement in
accordance with the provisions hereof, the term of this Agreement shall commence
with the July 1, 1996 Effective Date and shall continue through and including
June 30, 2001 (the "Termination Date").
2. Anything contained in Section 1 of this PART B to the contrary
notwithstanding, this Agreement may be terminated at the option of the Board of
Directors of the Company for "Cause" (as hereinafter defined), effective upon
the giving of written notice of termination to the Employee. As herein used,
the term "Cause" shall mean and be limited to:
(a) any act committed by the Employee against the Company, its
parent or subsidiaries or divisions constituting: (A) fraud, (B)
misappropriation of corporate opportunity, breach of fiduciary duties or
non-disclosure of conflicts of interest, (C) self-dealing, (D) embezzlement of
funds, (E) felony conviction for conduct involving moral turpitude or other
criminal conduct or (F) the continued disregard by the Employee of the
reasonable directions of the Chief Executive Officer and/or President of the
Company, or the Board of Directors of the Company; or
(b) the breach or default by the Employee in the performance of
any material provision of this Agreement; or
(c) chronic alcoholism or any other form of addiction which
impairs the Employee's ability to perform his duties hereunder.
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3. Anything contained in Section 1 of this PART B to the contrary
notwithstanding, this Agreement may be terminated by the Company: (i) upon the
death of the Employee, or (ii) on thirty (30) days' prior written notice to the
Employee, in the event that the Employee shall be physically or mentally
disabled or impaired so as to prevent him from continuing the normal and proper
performance of his duties and responsibilities hereunder for a period of nine
(9) consecutive months. The initial determination as to whether the Employee is
disabled or impaired shall be made by the physician regularly treating the
condition causing the disability. The Company shall have the right to require
the Employee to be examined by a physician duly licensed to practice medicine in
the state in which the Employee has his primary residence to determine such
physician's opinion as to the Employee's disability. If such physician's
opinion differs from that of the physician treating the Employee, or a physician
thereafter retained by the Employee, they shall forthwith select a third
physician so licensed whose opinion on Employee's disability or impairment,
after examination and review of available information, shall be conclusive and
binding upon all parties hereto. All costs of the physician regularly treating
or thereafter retained by the Employee shall be paid by the Employee. All costs
of the physician retained by the Company shall be paid by the Company. If a
third physician is required, then the costs of that physician shall be paid by
the Company.
4. Upon any termination of this Agreement by the Company for Cause
pursuant to Section 2 of this PART B above, neither the Company nor any parent,
subsidiary or division thereof shall be liable for or shall pay or cause to be
paid to the Employee any further remuneration, compensation or other benefits
hereunder. Upon any termination of this Agreement by the Company as a result of
the death or permanent disability of the Employee, as
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provided in Section 3 of this PART B, the Employee or his estate or legal
representatives (as the case may be) shall be entitled to receive all
compensation which the Employee would have earned in the Fiscal Year in which
such death or permanent disability occurred.
5. If the Company terminates Employee for any reason, OTHER than:
(a) for "Cause", as provided in PART B, Section 2, (b) in the event of the
Employee's death or disability, as provided in PART B, Section 3, or (c) as a
result of the Employee's voluntary resignation of his employment with the
Company (not constituting a constructive discharge), the Company shall be
obligated to pay or shall cause to be paid to Employee his "Base Salary" (as
hereinafter defined) in respect of each annual period hereunder or Anniversary
Year (as hereinafter defined), as applicable, for the remaining employment term
specified in Section 1 of this PART B, as, if and when the same would have
otherwise become due and payable hereunder, but for such termination of
employment of the Employee, and shall provide (or pay for the provision of the
equivalent of) all benefits as provided under the terms of this Agreement which
are in effect with respect to the Employee on the date of termination as, if and
when the same would have been provided hereunder but for such termination of
employment of the Employee
PART C. COMPENSATION; EXPENSES; FRINGE BENEFITS.
1. BASE SALARY. As compensation for his services to be rendered
hereunder, the Company shall pay to the Employee from the Effective Date and
thereafter throughout the term of this Agreement an annual salary (the "Base
Salary") which: (a) shall be in the annual amounts for each of the five (5)
consecutive twelve (12) month periods following the Effective Date (each an
"Anniversary Period") as are set forth below; and (b) shall be payable bi-weekly
in twenty-six (26) equal installments during each such Anniversary Period:
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ANNIVERSARY PERIOD ANNUAL BASE SALARY
------------------ ------------------
July 1, 1996 to June 30, 1997 $187,500
July 1, 1997 to June 30, 1998 $195,000
July 1, 1998 to June 30, 1999 $205,000
July 1, 1999 to June 30, 2000 $215,000
July 1, 2000 to June 30, 2001 $225,000
In addition to the Base Salary, the Employee shall be entitled to any
bonuses authorized, from time to time, by the Board of Directors. The Company
is hereby authorized to make all necessary payroll deductions, including FICA,
from such amount, as are customarily made with respect to the salaries of other
senior executive officers of the Company.
2. EXPENSES. In addition to the remuneration set forth above,
throughout the period of the Employee's employment hereunder, the Company (and
any Parent) shall provide a company credit card and shall also reimburse, or
cause to be reimbursed to the Employee, upon presentment by the Employee to the
Company of appropriate receipts and vouchers therefor, for any reasonable
business expenses, including air and other travel expenses, incurred by the
Employee in connection with the performance of his duties and responsibilities
hereunder. In addition to the foregoing, the Company shall provide a mobile
phone and shall lease an auto of the Employee's choice, which is also acceptable
to the Company, for the Employee. In addition to the auto lease payments
referred to above, the Company shall pay for all costs of tags, insurance,
repairs, fuel, and maintenance for such leased auto.
(a) RELOCATION EXPENSES. If relocation of the Employee is
required, the Company shall reimburse the Employee for all of Employee's
expenses customarily incurred in connection with (i) selling the Employee's
present primary residence (including reimbursement for any loss incurred by
Employee in connection with such sale), (ii) purchasing and occupying a new
primary residence (including reimbursement for any costs incurred by Employee in
connection
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with rental of temporary residence), and (iii) moving the Employee, the
Employee's family and the Employee's physical assets, such expenses not to
exceed, in the aggregate, $___________. In the event that Employee's employment
by the Company shall terminate by reason of Employee's failure to relocate at
the request of the Company, such termination of employment shall be deemed a
termination OTHER than for "Cause", as provided in PART B, Section 2 hereof.
3. FRINGE BENEFITS. The Company (and any Parent) shall also make
available, or cause to be made available, to the Employee, throughout the period
of his employment hereunder, such benefits, including, but not limited to,
Employee's existing disability policies, AICPA $1,000,000 term life insurance
policy, any disability, hospitalization, medical benefit plan, pension plan or
other benefits or policies, as are put into effect by the Company (and any
Parent) for their other executive employees. The Company shall pay for all
licenses, fees, continuing professional education and other costs associated
with the Employee retaining his licensure as a Certified Public Accountant in
the State of Florida. In addition to the foregoing, the Employee shall be
entitled to receive not less than three (3) weeks of paid vacation in each
Anniversary Period during the Term of this Agreement.
4. STOCK OPTIONS. The Company hereby acknowledges that the Board of
Directors of the Company has authorized the Company to negotiate and to enter
into a written Consulting Agreement with Employee (the "Consulting Agreement")
for the period commencing on April __, 1996 and terminating on the Effective
Date (the "Consulting Period"), pursuant to which Employee shall provide
specified financial consulting, business development, and non-tax accounting
services to the Company, and for which services the Employee shall be
compensated solely with the granting of options (the "Options") to purchase an
aggregate of Fifty Thousand
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(50,000) shares of common stock of the Company, $.01 par value (the "Common
Stock"), at an exercise price equal to the fair market value of such shares on
the date upon which the Consulting Agreement is entered into by the Company and
Employee, with fair market value being based upon the last sales price of a
share of Common Stock on such date as reported by The Nasdaq National Market. By
his execution of this Agreement, Employee agrees to use his best efforts, in
good faith, to negotiate and execute the Consulting Agreement. The Company does
hereby acknowledge that Employee shall be entitled to receive cash compensation
from the Company, in addition to the Options, in connection with his provision
of additional services to the Company during the Consulting Period, principally
tax accounting and other tax related services, which are not covered by the
Consulting Agreement. The Options shall be exercisable five (5) year period
from the date of grant, and shall be exercisable in full immediately. The
Company does hereby agree to use its good faith reasonable efforts to file with
the Securities and Exchange Commission prior to the end of the Consulting Period
a registration statement on Form S-8 in order to register the distribution to
Employee of the shares of Common Stock underlying the Options; and the Company
does hereby further agree that to the extent that it fails to file such a
registration it will grant to Employee "piggyback" registration rights with
respect to the shares of Common Stock underlying the Options. Employee
acknowledges that unless the distribution to Employee of the shares of Common
Stock underlying the Option is registered with the Securities and Exchange
Commission, when issued upon Option exercise such shares will constitute
"restricted securities" (within the meaning of the Securities Act of 1933, as
amended), and can not be transferred by Employee in the absence of subsequent
registration or the existence of an exemption from registration applicable to
their distribution.
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Part D. CONFIDENTIALITY; NON-COMPETITION. As a material inducement to
cause the Company to enter into this Employment Agreement, the Employee hereby
covenants and agrees, as follows:
1. CONFIDENTIAL INFORMATION; PERSONAL RELATIONSHIPS. The
Employee agrees that for so long as he is employed by the Company, or any
subsidiary of the Company or any Parent (the "Restricted Period"), he shall keep
secret and retain in strictest confidence all confidential matters of the
Company, or any subsidiary of the Company or any Parent (collectively, for
purposes of PART D of this Agreement, the "Company"), and the "know-how", trade
secrets, confidential client lists, details of client, subcontractor or
consultant contracts, pricing policies, operational methods, marketing plans or
strategies, project development, acquisition or bidding techniques or plans,
business acquisition plans, new personnel acquisition plans, technical
processes, inventions and research projects of the Company learned by the
Employee heretofore and hereafter (collectively, the "Confidential
Information"), unless (i) such Confidential Information is generally available
to the public without restriction, (ii) Employee obtains confidentiality
agreements acceptable to the Company from those parties to whom such
Confidential Information is disclosed, (iii) Employee is requested by the Board
of Directors of the Company or a committee thereof to disclose such confidential
information, (iv) such Confidential Information is provided to a customer of the
Company pursuant to a request received from such customer in the ordinary course
of business, or (v) Employee is under compulsion of either a court order or a
governmental agency's or authority's inquiry, order or request to so disclose
such Confidential Information.
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2. PROPERTY OF THE COMPANY.
(a) Except as otherwise provided herein, all lists, records and
other non-personal documents or papers (and all copies thereof), including such
items stored in computer memories, on microfiche or by any other means, made or
compiled by or on behalf of the Employee, or made available to the Employee
relating to the Company, are and shall be the property of the Company and shall
be delivered to the Company on the date of termination of this Agreement.
(b) All inventions, including any procedures, formulas, methods,
processes, uses, apparatuses, patterns, designs, drawings, devises or
configurations of any kind, any and all improvements to them which are
developed, discovered, made, or produced, trade secrets, or information used by
any or all of the Company shall be the exclusive property of the Company, and
shall be delivered to the Company as applicable, on the earlier of the
expiration or the termination of this Agreement.
3. EMPLOYEES OF THE COMPANY. If the Company terminates Employee:
(i) for Cause, as provided in PART B, Section 2, (ii) as a result of Employee's
death or permanent disability, as provided in PART B, Section 3, or (iii) in the
event of the Employee's voluntary resignation of employment, not constituting a
constructive discharge (herein referred to as a "Justified Termination"), the
Employee shall not, directly or indirectly, until the LATER to occur of: (A) the
termination of his employment with the Company or (B) June 30, 2001, solicit any
employee of the Company other than Employee's personal secretary or encourage
any such employee to leave such employment without the prior written approval of
the Company as applicable.
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4. NON-COMPETITION. For a period commencing on the date hereof and
terminating on a date which is the LATEST to occur of any of the following
events (the "Non-Competition Period"):
(a) the date that the Employee ceases to render services to the
Company or any of its subsidiaries (whether under this Agreement or otherwise);
(b) one (1) year following the date of termination of this
Agreement as a result of Termination for Cause, but under no circumstances later
than ninety (90) days after the end of the Fiscal Year of the Company and/or its
Parent ending in 2001; or
(c) the expiration of such period with respect to which the
Employee shall be receiving an amount equal to his Base Salary, the Employee
shall not, directly or indirectly, whether individually or as an employee,
stockholder, partner, joint venturer, agent or other representative of any other
person firm or corporation, engage in any business which is competitive with the
businesses of the Company at any time during the Non-Competition Period. As
used herein, the term "business which is competitive with the businesses of the
Company" shall mean any business conducted by any person, firm or corporation
whose principal operating facilities are located in the Continental United
States, and ten (10%) or more of the net revenues of which are derived from any
or all of the manufacture, sale or distribution of stainless steel pipe,
flanges, tubing, fittings, nipples and related products, including steel
products that contain high-nickel or "exotic" alloys.
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5. SEVERABILITY OF COVENANTS.
The Employee acknowledges and agrees that the provisions of this PART
D (including Section 4 above) are reasonable and valid in all respects. If any
tribunal having jurisdiction determines that any of the provisions of this
Section 4 or any part thereof, is invalid or unenforceable because of the
duration or geographic scope of such provision, such tribunal shall have the
power to reduce the duration or scope (including but not limited to geographic
scope) of such provision. In its reduced form, such provision shall then be
enforceable.
PART E. BINDING EFFECT.
All of the terms and conditions of this Agreement shall be binding
upon and inure to the benefit of the Employee and the Company and any
successor-in-interest to any of them.
PART F. NOTICES.
Except as herein provided, any notice, request, demand or other
communication required or permitted under this Agreement shall be in writing and
shall be deemed to have been given when delivered personally or when mailed by
certified mail, return receipt requested, addressed to a party at the address of
such party first set forth above, or at such other address as such party may
hereafter have designated by notice.
If to the Company at the address first above written with copies to:
Xxxxxxxxx Xxxxxxx Xxxxxxx Xxxxxx Xxxxx & Xxxxxxx
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxx X. Xxxxxxxx, Esq.
or to any other address as shall be designated from time to time by the Company.
If to Employee at the address first above written, with copies to any
attorney designated by the Employee.
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PART G. MISCELLANEOUS.
1. Neither this Agreement nor any of the terms or conditions hereof
may be waived, amended or modified except by means of a written instrument duly
executed by the party to be charged therewith.
2. The captions and paragraph headings used in this Agreement are
for convenience of reference only, and shall not affect the construction or
interpretation of this Agreement or any of the provisions hereof.
3. This Agreement, and all matters or disputes relating to the
validity, construction, performance or enforcement hereof, shall be governed and
construed under the laws of the State of Florida.
4. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original hereof, but all of which
together shall constitute one and the same instrument.
5. Any dispute involving the interpretation or application of this
Agreement shall be resolved by final and binding arbitration before one or more
arbitrators designated by the American Arbitration Association in Orlando,
Florida, unless mutually agreed to otherwise. The award of such arbitrator(s)
may be enforced in any court of competent jurisdiction.
6. This Agreement is intended for the sole and exclusive benefit of
the parties hereto and their respective heirs, executors, administrators,
personal representatives, successors and permitted assigns, and no other person
or entity shall have any right to rely on this Agreement or to claim or derive
any benefit herefrom absent the express written consent of the party to be
charged with such reliance or benefit.
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7. Until the Effective Date, the Employee shall continue to render
financial consulting services to the Company and its subsidiaries on the same
terms and conditions as previously provided by the Employee.
IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Employment Agreement on and as of the date first set forth above, to be
effective as of July 1, 1996.
ATTEST: CONSOLIDATED STAINLESS, INC.
/s/Xxxx Xxxx By:/s/Xxxxxx X. Xxxxx
----------------- ------------------
Xxxxxx X. Xxxxx, President
/s/Xxxxxx X.Xxxxxxx
-------------------
XXXXXX X. XXXXXXX
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