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EXHIBIT 10.10
NORTHWESTERN STEEL AND WIRE COMPANY
TERMINATION AND CHANGE OF CONTROL AGREEMENT
FOR CORPORATE OFFICERS
This TERMINATION AND CHANGE OF CONTROL AGREEMENT (the "Agreement") is
entered into effective as of the fifteenth day of September 1997, by and
between Northwestern Steel and Wire Company, (the "Company") and
_________________________ (the "Executive").
WHEREAS, the Executive is employed by the Company as its
_____________________ and the Executive has made valuable contributions to the
strategic planning, business operations and financial strength of the Company;
and
WHEREAS, the Executive desires to be assured of a secure minimum
compensation from the Company for his services; and
WHEREAS, the Company has determined that the Executive and the
availability of his future services are critical to the future success of the
Company; and
WHEREAS, the Company desires to provide fair and reasonable protections to
the Executive on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing, and the continued
employment of the Executive, the Company and the Executive, each intending to
be legally bound hereby, covenant and agree as follows:
1. The Company shall employ the Executive and Executive shall serve as the
Company's _________________ with the attendant responsibilities thereto.
The Executive shall receive base compensation in the amount in effect as
of the date of this Agreement and be covered by and receive the benefits
of those plans and programs providing other non-regular cash compensation
and benefits under the terms and conditions in effect as of the date of
this agreement. Nothing in this Agreement shall be deemed to supersede or
otherwise limit the rights of the Executive to any amounts to which the
Executive is entitled under any other agreement, plan, fund or program
covering the Executive.
2. In the event, following a Change of Control, the Company terminates the
Executive's employment for a reason other than "Cause" (as defined herein)
or the Executive quits his employment with the Company for "Good Reason"
(as defined herein), the Executive shall be entitled to receive in
addition to any other compensation or benefits to which the Executive may
be entitled under any other plan, program or payroll practice of the
Company not payable as a result of a termination of employment following a
Change in Control, severance pay (the "Benefit") equal to his regular base
salary for a period of ___________ (the "Payment Period").
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Such Benefit shall be paid at the same time and in the same manner as
the Executive's compensation was paid during his employment, in accordance
with the Company's regular payroll practices as in effect at the time of
payment and shall be subject to regular tax and other withholdings in
effect with respect to the Executive's compensation prior to the Payment
Period.
During the Payment Period, benefit plans and programs, in the
aggregate, shall provide Executive with benefits no less favorable than
those provided by the Company to senior executives in similar capacities.
During the Payment Period, in no event shall such plans, practices,
policies and programs provide the Executive with benefits which are less
favorable, in the aggregate, than the most favorable of such plans,
practices, policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Change of Control
Date, or, if more favorable to the Executive, those provided generally at
any time after the Change of Control Date to other peer executives of the
Company and its affiliated companies. In addition, the Executive shall be
entitled to receive a payout of his bonus under any bonus plans or
programs covering the Executive as of the Change in Control, prorated for
that portion of the year prior to separation from service, and such bonus
shall be determined utilizing Company performance during either (i) the
entire year or (ii) the portion of the year prior to the Executive's
separation from employment, whichever measurement period yields a greater
bonus.
Provided, however, such Benefit shall be reduced dollar for dollar by
any continued compensation and benefits to which the Executive is entitled
under any other agreement covering the Executive which provides for and
under which the Executive actually receives continued compensation and
benefits upon severance from employment following a Change in Control and
the Company shall not be required to provide additional accruals or
contributions under any retirement plan qualified under Section 401(a) of
the Internal Revenue Code.
3. All Benefits specified above are conditioned upon the Executive
refraining from "Competition" with the Company (as defined herein). If at
any time prior to the end of the Payment Period, the Company determines
that the Executive is engaging in Competition, the Company shall have the
right to immediately suspend further payments hereunder.
If the Executive Engages in Competition at any time during the Payment
Period, the Executive shall return all Benefits paid hereunder, and the
Company shall be entitled to the return of any Benefits previously paid.
The Executive shall have the right to appeal any benefit suspension or
request for return of benefits to the Board of Directors of the Company
and, if it is determined that the Executive has not engaged in
Competition, payment of all amounts due and unpaid shall be made as soon
as reasonably practicable after such determination.
4. The Benefits under this Agreement shall be unfunded, and the Company's
obligation under this Agreement shall constitute an unsecured promise of
severance pay.
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5. For purposes of this Agreement, the following definitions shall apply:
"Cause" means (i) fraud or willful misconduct, (ii) material breach of
fiduciary duty involving personal profit, (iii) material failure to
perform stated duties, or (iv) conviction of a felony.
"Change of Control." For the purpose of this Agreement, a "Change of
Control" shall occur if:
(a) any individual, partnership, firm, corporation,
association, trust, unincorporated organization or other entity, or
any syndicate or group deemed to be a person under Section 14(d)(2)
of the Exchange Act (other than shareholders holding more than 20% of
the Company's voting securities as of the Effective Date), is or
becomes the "beneficial owner" (as defined in Rule 13d-3 of the
General Rules and Regulations under the Exchange Act), directly or
indirectly, of securities of the Company representing 30% or more of
the combined voting power of the Company's then outstanding
securities entitled to vote in the election of directors of the
Company; or
(b) during any period of two consecutive years (not including
any period prior to the Effective Date) individuals who at the
beginning of such period constituted the Board of Directors and any
new directors, whose election by the Board of Directors or nomination
for election by the Board of Directors or nomination for election by
the stockholders of the Company was approved by a vote of at least
three quarters of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination was previously so approved, cease for any reason to
constitute at least a majority thereof; or
(c) all or substantially all of the assets of the Company are
liquidated or distributed.
"Competition" means, for the Payment Period, employment by, being a
consultant to, being an officer or director of, or being connected in any
manner with, any entity or person in the business of the Company which
competes in any market in which the Company does business, either directly
or indirectly.
"Good Reason" means (i) reduction in the compensation (regular,
incentive or other special compensation) of the Executive as in effect as
of the date of this Agreement, (ii) reduction in the Executive's
responsibilities as in effect as of the date of this Agreement, (iii) any
failure of the Company to obtain assumption of the obligation to perform
this Agreement by any successor, assignee or distributee of a majority of
the Company's stock or assets (iv) a relocation of the Executive's
location of employment more than seventy-five (75) miles from the location
as of the date of this Agreement, or (v) adoption or approval of a plan of
liquidation, dissolution, or reorganization by the Company by the
Company's Board of Directors.
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IN WITNESS WHEREOF, the parties have caused this agreement to be executed
and delivered this ___________ day of _____________, 1997.
Company Executive
Northwestern Steel and Wire Company
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By: Xxxxxx X. Xxxxxxxxx
Title: Chairman and Chief Executive Officer
