EXHIBIT (10)(iii)e
EMPLOYMENT AND CONSULTING AGREEMENT
THIS EMPLOYMENT AND CONSULTING AGREEMENT (hereinafter referred to as the
"Agreement"), dated as of the 7th day of June, 2002, by and between Xxxxxx Xxxxx
(hereinafter referred to as "Xxxxx"), a resident of San Antonio, Texas, and
Commercial Metals Company (hereinafter referred to as "CMC", which term shall
include all of CMC's direct or indirect subsidiary companies), a Delaware
corporation,
WITNESSETH:
WHEREAS Xxxxx has served in several capacities with CMC for fifty two years
including service since 1964 as a Director of CMC and, most recently, as
Chairman of the Board of the CMC Steel Group, such service periodically pursuant
to various written and oral employment and related compensation agreements and
contracts (all such agreements and contracts previously entered into between
Xxxxx and CMC being referred to collectively as the "Old Contracts"); and
WHEREAS Xxxxx and CMC desire to enter into an agreement providing for (i) the
resignation of Xxxxx as a Director and officer of CMC and subsidiaries effective
immediately, (ii) his retirement, effective at the conclusion of CMC's current
fiscal year, as an employee of Structural Metals, Inc. ("SMI") and (iii) his
continuing availability, following retirement, to provide consulting services to
CMC;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and promises contained herein, CMC and Xxxxx agree as follows:
I. STATUS, TITLE AND SUPPORT
A. RESIGNATION AS A DIRECTOR AND RETIREMENT AS AN EMPLOYEE. Effective as of the
date of this Agreement, Xxxxx resigns as a Director and officer of CMC and from
all other positions as a director or officer of any CMC subsidiary, execution of
this Agreement constituting notice and acceptance of such resignation. From the
date of this Agreement until September 1, 2002, Xxxxx shall continue his status
as an employee of SMI. Effective September 1, 2002 Xxxxx shall retire thereby
terminating his employment with SMI, execution of this Agreement evidencing
notice of such retirement and termination of employment effective as of
September 1, 2002.
B. TITLE. Effective as of the date of this Agreement and for so long as he shall
live, Xxxxx shall hold the honorary title of Chairman Emeritus of the CMC Steel
Group.
C. NECESSARY SUPPORT AND ENVIRONMENT. During the term of this Agreement, Xxxxx
shall be provided secretarial assistance utilizing his current secretary to the
extend she remains in the employment of SMI and the continued use of the
private, furnished office he presently maintains at SMI as reasonably necessary
for him to carry out those duties and responsibilities which he may be assigned
pursuant to this Agreement.
II. XXXXX'X OBLIGATIONS
A. DUTIES. From the date of this Agreement and for the remainder of Xxxxx'x
employment period and the consulting period, Xxxxx shall perform such duties and
discharge such responsibilities consistent with his status as former Chairman of
the CMC Steel Group and with due consideration for his health as may be from
time to time designated by the Board of Directors or the President and Chief
Executive Officer of CMC. Xxxxx shall not be obligated to spend any specific
amount of time in the performance of his duties.
B. NON-COMPETITION. Xxxxx recognizes and acknowledges that in performing the
duties and responsibilities of his consulting duties under this Agreement and
pursuant to his employment at CMC and his position as a Director, Xxxxx has
occupied and will occupy a position of trust and
E69-72
confidence, pursuant to which Xxxxx has developed and acquired and will develop
and acquire experience and knowledge with respect to various aspects of the
business of CMC and the manner in which such business is conducted. It is the
expressed intent and agreement of the Xxxxx and CMC that such knowledge and
experience shall be used only in the furtherance of the business interests of
CMC and not in any manner which would be detrimental to such business interests
of CMC. Xxxxx therefore agrees that, during the term of this Agreement and for a
period of two years thereafter, unless he first secures the consent of the Board
of Directors of CMC, Xxxxx will not invest, engage or participate in any manner
whatsoever, either personally or in any status or capacity (other than as a
shareholder of less than five percent [5%] of the capital stock of a publicly
owned corporation), in any business or other entity organized for profit engaged
in competition with CMC businesses as such businesses may be conducted at any
time during the term of this Agreement or within the five years prior to the
date of this Agreement including but not limited to the businesses of steel
manufacturing, steel fabrication, scrap processing and marketing and trading of
metals anywhere in the States of Texas, Arkansas, Alabama, South Carolina,
Louisiana, New Mexico, Nevada, California, Pennsylvania, Georgia, Florida, Iowa,
North Carolina, Virginia, Utah, Mississippi, Missouri, Tennessee and New Jersey.
Although Xxxxx and CMC regard such restrictions as reasonable for the purpose of
preserving the assets of CMC and its proprietary rights, in the event that the
provisions of this Paragraph II-B should ever be deemed to exceed the time or
geographic limitations permitted by applicable laws, then such provisions shall
be reformed to the maximum time or geographic limitations permitted by
applicable laws.
III. TERM
A. TERM. This Agreement shall be effective as of the date hereof and the period
of Xxxxx'x engagement as a consultant pursuant to this Agreement shall commence
September 1, 2002. and shall expire on December 31, 2004,unless terminated
pursuant to the provisions of Article V.
IV. COMPENSATION
A. AS AN EMPLOYEE. From the date of this Agreement through August 31, 2002,
Xxxxx shall continue to receive his existing salary of Thirty Two Thousand Five
Hundred Dollars ($32,500) a month.
B. AS A CONSULTANT. As compensation for the consulting services to be rendered
pursuant to this Agreement, Xxxxx shall be paid a fee of Twenty Thousand Eight
Hundred Thirty Three Dollars and thirty four cents ($20,833.34) on or before the
first business day of each month commencing with the month of September, 2002,
and ending with the payment for the month of December, 2004. It is the intent of
the parties that this monthly consulting fee shall be paid to Xxxxx as an
independent contractor and Xxxxx shall not be considered an employee of SMI or
CMC for any purpose after August 31, 2002.
C. SUPPLEMENTAL RETIREMENT BENEFIT. By letter agreement dated October 11, 1999
and agreed to by Xxxxx on October 13, 1999, (hereinafter the "Supplemental
Agreement"), CMC agreed to pay Xxxxx the sum of One Million Dollars
($1,000,000.00) plus interest as provided therein fifteen days following his
retirement from employment on or before December 31, 2004. Xxxxx and CMC agree
that as of April 30, 2002, that sum, including interest credited through April
30, 2002, was One Million One Hundred Thirty Three Thousand Six Hundred Seventy
Four Dollars and ninety-nine cents ($1,133,674.99). CMC shall make payment of
that amount with additional interest as provided for in the Supplemental
Agreement through the end of the month prior to retirement within 15 days
following Xxxxx'x retirement or other termination of employment.
D. OTHER BONUS AND BENEFIT PLANS. Xxxxx shall be eligible to continue to
participate in all SMI profit-sharing, group insurance and other benefit plans
or programs in effect for SMI managerial employees generally by virtue of his
continued employment status through August 31, 2002, including participation in
CMC's Key Employee Annual Incentive Bonus Plan, Long-Term Performance Plan and
Benefit Restoration Plan for the period ending August 31, 2002.
E69-72
Xxxxx'x participation in all other employee benefit plans shall terminate
effective August 31, 2002, or at such subsequent date as may be provided
according to the terms and conditions of such plans. CMC shall reimburse Xxxxx
for reasonable expenses incurred by him in the performance of his duties and
responsibilities hereunder.
F. TERMINATION OF OLD CONTRACTS. Xxxxx and CMC agree that all rights, duties,
obligations and payments due or arising under the Old Contracts, with the
exception of the Supplemental Agreement, have been completed by both parties and
any and all claims, if any, arising from Old Contracts, except for the
Supplemental Agreement, are hereby expressly released.
G. AUTOMOBILE. On or before September 10, 2002, CMC shall cause SMI to convey to
Xxxxx, free and clear of liens, title to the 2001 Lincoln Navigator vehicle
currently used by Xxxxx. SMI shall determine the fair market value of the
vehicle at the time of transfer and include such amount in Xxxxx'x compensation
in accordance with SMI's customary procedures. Xxxxx shall be responsible for
payment of all taxes resulting from the transfer of ownership of the vehicle.
V. TERMINATION PROVISIONS
A. EXPIRATION OR DEATH. Xxxxx'x employment or service as a consultant hereunder
shall terminate upon Xxxxx'x death without further obligation or liability of
either party hereunder, provided that in the event Xxxxx dies before September
1, 2002, the effective date of his retirement and termination as an employee of
SMI, CMC shall pay Xxxxx an amount equal to but in lieu of and without
duplication of that amount which Xxxxx would have been entitled to receive
pursuant to the Supplemental Agreement had his retirement and termination of
employment occurred as of the day prior to the date of his death.
B. TERMINATION FOR CAUSE. CMC may terminate Xxxxx'x employment or consulting
services hereunder at any time ten (10) days following delivery of written
notice to Xxxxx of consideration of such action upon the determination by a
majority of its whole Board of Directors that the Xxxxx has willfully failed and
refused to perform his duties and to discharge his responsibilities hereunder
and Xxxxx fails to cure such failure and refusal within the ten (10) day period
following his receipt of such notice. Such determination shall be final and
conclusive. If the Board of Directors of CMC makes such determination, CMC may
(a) terminate Xxxxx'x employment or consulting services effective immediately or
at a subsequent date, or (b) condition his continued employment or rendition of
consulting services upon specific requirements reasonable under the
circumstances and place a reasonable limitation upon the time within which Xxxxx
shall comply with such requirements. If termination is so effected, CMC shall
have no further liability to Xxxxx hereunder.
C. TERMINATION OF EMPLOYMENT. Xxxxx'x employment hereunder shall terminate
forthwith upon his retirement as an employee prior to September 1, 2002, without
further obligation or liability of either party with respect to such employment,
except for CMC's obligation to pay to Xxxxx all unpaid amounts accruing on or
prior to September 1, 2002, including without limitation the amount then due
Xxxxx pursuant to the Supplemental Agreement.
VI. MISCELLANEOUS
A. ASSIGNABILITY, ETC. The rights and obligations of CMC hereunder shall inure
to the benefit of and shall be binding upon the successors and assigns of CMC.
This Agreement is personal to Xxxxx and may not be assigned by him.
B. NO WAIVERS. Failure to insist upon strict compliance with any provision
hereof shall not be deemed a waiver of such provision or any other provision
hereof.
C. AMENDMENTS. This Agreement may not be modified except by an agreement in
writing executed by the parties hereto.
D. NOTICES. Any notice required or permitted to be given under this Agreement
shall be in
E69-72
writing and shall be deemed to have been given to the person affected by such
notice when personally delivered or when deposited in the United States mail,
certified mail, return receipt requested and postage prepaid, and addressed to
the party affected by such notice at the address indicated on the signature page
hereof.
E. SEVERABILITY. The invalidity or unenforceability of any provision hereof
shall not affect the validity or enforceability of any other provision hereof.
F. COUNTERPARTS. This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original but all of which taken together shall
constitute a single instrument.
G. ENTIRE AGREEMENT. This Agreement contains all of the terms and conditions
agreed upon by the parties hereto respecting the subject matter hereof, and all
other prior agreements, oral or otherwise, regarding the subject matter of this
Agreement shall be deemed to be superseded as of the date of this Agreement and
not to bind either of the parties hereto.
H. GOVERNING LAW. This Agreement shall be subject to and governed by the laws of
the State of Texas.
IN WITNESS WHEREOF, Xxxxx has set his hand hereto and CMC has caused this
Agreement to be signed in its corporate name and behalf by one of its officers
thereunto duly authorized, and its corporate seal to be affixed hereunto, all as
of the day and year first above written.
COMMERCIAL METALS COMPANY
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------
Xxxxxxx X. Xxxxx
Chairman, President & CEO
ATTEST:
/s/ Xxxxx X. Sudbury
------------------------------
Xxxxx X. Sudbury
Secretary
XXXXXX XXXXX
/s/ Xxxxxx Xxxxx
--------------------------------------------
Address: 0000 Xxxxxxxx
Xxx Xxxxxxx, Xxxxx, 00000
E69-72
