Exhibit 10(viii)
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of November 21, 2000.
B E T W E E N :
CO-STEEL INC.
(hereinafter referred to as the "Corporation")
OF THE FIRST PART
- AND -
XXXXX X. XXXXXX
(hereinafter referred to as the "Executive")
OF THE SECOND PART
WHEREAS the Corporation and the Executive have agreed to enter into this
Employment Agreement to formalize in writing the terms and conditions governing
the Executive's employment;
NOW THEREFORE in consideration of the covenants and agreements herein
contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties, the parties
hereto agree as follows:
ARTICLE 1
COMMENCEMENT AND TERM
1.1 TERM.
This Agreement shall commence on the date hereof and shall continue for an
indefinite period thereafter subject to termination in accordance with Article
5 hereof.
ARTICLE 2
ASSIGNMENT
2.1 POSITION.
The Executive shall be employed by the Corporation as President and Chief
Executive Officer and in that capacity shall perform such duties and exercise
such powers and responsibilities as specified by the board of directors of the
Corporation.
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2.2 RESPONSIBILITY.
The Executive's full time and attention shall be devoted to the business
and affairs of the Corporation. The Executive shall discharge the
responsibilities assigned to the Executive and use the Executive's reasonable
best efforts to perform faithfully and efficiently such responsibilities.
ARTICLE 3
REMUNERATION
3.1 BASE SALARY, BONUSES, BENEFITS AND PERQUISITES.
The Executive shall be entitled to receive from the Corporation the base
salary, bonuses, benefits and perquisites set out in Schedule "A" to this
Agreement. The salary, bonuses and perquisites may be increased by the
Compensation Committee of the Board from time to time.
3.2 VACATION.
The Executive shall be entitled to the annual vacation specified in
Schedule "A".
3.3 EXPENSES.
The Corporation agrees to reimburse the Executive for all expenses
reasonably incurred in connection with the performance of the Executive's duties
to the Corporation upon being provided with proper vouchers or receipts in
connection therewith.
ARTICLE 4
COVENANTS OF THE PARTIES
4.1 CONFIDENTIALITY.
The Executive shall not at any time during the term of this Agreement or
thereafter, without the consent of the Corporation, disclose to any person any
material confidential information obtained by the Executive while employed by
the Corporation, the disclosure of which could be materially damaging to the
Corporation unless the disclosure of such information is required by law, or
made in connection with the performance of the Executive's duties with the
Corporation. For the purposes of this Agreement, "confidential information"
shall not include any information (i) known generally to the public; (ii)
accessible to a third party on a unrestricted basis; or (iii) of the type not
generally considered confidential by persons engaged in the same business or
businesses similar to that conducted by the Corporation.
4.2 NON-COMPETE
(a) The Executive agrees that he will not be associated directly or indirectly
with any steel business in North America whether as an officer, director,
consultant, employee, investor, creditor, shareholder, partner or otherwise for
a period of one year following the termination of his employment hereunder for
any reason. This clause shall not prevent the holding by the Executive or any
related party of up to 1/2 of 1% in the aggregate of the outstanding shares of a
corporation engaged in the steel business.
(b) The Executive agrees not to solicit for employment directly or indirectly
any officer of employee of the Corporation or any subsidiaries or related
entities for a period of two years following the termination of his employment
hereunder for any reason.
ARTICLE 5
TERMINATION OF EMPLOYMENT
5.1 TERMINATION BY THE CORPORATION FOR CAUSE.
(a) The Corporation may terminate this Agreement at any time for Cause,
without payment of any compensation either by way of anticipated
earnings or damages of any kind.
(b) For purposes of this Agreement, "Cause" shall mean:
(i) a wilful act of dishonesty, theft, breach of trust, or
misappropriation of the Corporation"s property; or
(ii) The failure by the Executive to abide by any resolution of the
board of directors of the Corporation, provided that
resolution is not for an improper purpose, is reasonable in
the circumstances and is not an event which would constitute
Good Reason (as defined in paragraph 5.4 hereof).
5.2 TERMINATION FOR OTHER REASONS
This Agreement shall terminate without payment of any compensation in
respect of such termination in the following events:
(a) the death of the Executive:
(b) the permanent incapacity of the Executive qualifying the Executive to
payments under any permanent disability insurance policy carried by or
for the benefit of the Executive;
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(d) the resignation of the Executive.
5.3 TERMINATION BY THE CORPORATION WITHOUT CAUSE.
If the Executive's employment is terminated by the Corporation for any
reason other than for Cause, the Corporation shall advise the Executive in
writing (a "Termination Notice"). In such event, the following terms shall
apply:
(i) the Corporation shall pay the Executive forthwith a lump sum amount
equal to the multiple (the "Multiple") set forth on Schedule "A" of
the aggregate of:
i) the Executive's annual base salary at the date of termination;
and
ii) the average of annual incentive paid over the preceding three
years.
No amount paid in respect of long-term incentives shall be included
in such calculations.
(ii) the Corporation shall continue to pay the premiums associated with
the continuation of health and welfare benefits covered at the time
of termination (excluding pension, life insurance, and disability
insurance) for the lesser of: until new employment is commenced,
normal retirement, retiree benefits can be activated, or the period
covered by the Multiple.
(iii) Additional years of service will be credited under the
Supplementary Executive Retirement Plans (S.E.R.P.) equal to the
Multiple; no additional years of service (or compensation in
respect thereof) will be credited under any registered plan.
(iv) the terms of any loans from the Corporation or its subsidiaries to
the Executive shall remain unchanged; and
(v) the Corporation shall pay the Executive for all accrued vacation
pay to the date of termination.
5.4 CONSEQUENCES OF GOOD REASON.
(a) The Executive may terminate this Agreement upon written notice to the
Corporation at any time within 90 days of the occurrence of any Good
Reason and, in such event, the Executive shall be entitled to the same
payments, benefits and entitlements that would be provided to the
Executive as if the Corporation had terminated the Executive's
employment without cause pursuant to Section 5.3 of this Agreement.
The termination shall become effective 30 days after the date of
notice.
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(b) For the purposes of this Agreement:
(i) "Good Reason" shall mean the occurrence of any of the
following without the Executive's express written consent:
(A) a change (other than a change consistent with a
promotion) in the Executive's status, position, duties,
responsibilities, title or office;
(B) a reduction of the Executive's salary, benefits or other
remuneration received from the Corporation in a manner
that is not consistent with contemporaneous salary,
benefits or other remuneration reductions for other
senior executives of the Corporation; or
(C) a Change of Control.
(ii) "Change of Control" shall mean any of the following
occurrences:
a) the acquisition by any one shareholder, or group of
shareholders acting jointly or in concert, of more than
50% of the outstanding voting shares of Co-Steel;
b) a sale by Co-Steel of all or substantially all of its
assets to an unrelated third party, or other liquidation
or dissolution;
c) a change in the composition of the Board of Directors of
Co-Steel involving at least one-half of the Board which
occurs at the same time or within a 60 day period; or
d) a merger, consolidation, or other reorganization of
Co-Steel which results in Co-Steel's shareholders owning
less than 50% of the voting shares of the resulting
entity;
5.5 PAYMENT TO DATE OF TERMINATION.
Regardless of the reasons for the termination, the Corporation shall make
payment to the Executive to the effective date of termination.
5.6 RETURN OF PROPERTY.
Upon any termination of employment with the Corporation, the Executive
shall deliver or cause to be delivered to the Corporation all books, documents,
or other property belonging to the Corporation or for which the Corporation is
liable to others, which are in the possession, charge, control or custody of
the Executive.
5.7 NO MITIGATION
All amounts referred to in this Agreement, specifically including the
Corporation's payment obligations pursuant to this Article 5, shall constitute a
debt owed by the Corporation to the Executive. The Executive shall not be
required to mitigate damages by seeking other employment or otherwise, nor shall
the amount provided for under this Agreement be reduced if the Executive shall
secure a new position or not reasonably pursue alternative employment following
the termination of the Executive's employment with the Corporation.
5.8 NO SET-OFF
The Corporation's obligations to make the payments provided for in this
Agreement or otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, defence or any other claim, right or
action which the Corporation may have or allege to have against the Executive.
5.9 LEGAL FEES.
The Corporation agrees to pay all reasonable legal fees and expenses which the
Executive may incur as a result of any contest (regardless of the outcome
thereof) by the Corporation or others of the validity or enforceability of, or
liability under, any provision of this Agreement or as a result of any action
by the Executive to enforce the Executive's rights under the Agreement.
ARTICLE 6
DIRECTORS AND OFFICERS
6.1 RESIGNATION.
If the Executive is a director or officer at the relevant time, the
Executive agrees that after termination of the Executive's employment with the
Corporation the Executive will tender the Executive's resignation from any
position the Executive may hold as an officer or director of the Corporation or
any of its affiliated or associated companies.
6.2 OTHER DIRECTORSHIPS.
The Executive agrees that the Executive shall not become a director of any
corporation which is not an affiliate or an associate of the Corporation
without the prior approval of the Compensation Committee of the Corporation's
board of directors.
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ARTICLE 7
CONTRACT PROVISIONS
7.1 HEADINGS.
The headings of the articles and paragraphs herein are inserted for
convenience of reference only and shall not affect the meaning or construction
hereof.
7.2 INDEPENDENT ADVICE.
The Corporation and the Executive acknowledge that they have each
(i) obtained independent legal advice in connection with this Agreement and
(ii) have read all of the terms hereof.
7.3 GENDER.
Words denoting any gender include both genders.
7.4 GOVERNING LAW.
This Agreement shall be construed and interpreted in accordance with the
laws of the Province of Ontario and the federal laws of Canada applicable
therein. Each of the parties hereby irrevocably attorns to the jurisdiction of
the courts of the Province of Ontario with respect to any matters arising out
of this Agreement.
7.5 ENTIRE AGREEMENT.
This Agreement, together with Schedule "A", constitute the whole agreement
of the parties hereto with reference to any of the matters herein provided for.
7.6 NOTICE.
Any notice required or permitted to be given under this Agreement shall be
in writing and shall be properly given if personally delivered, delivered by
facsimile transmission (with confirmation of receipt) or mailed by prepaid
registered mail addressed as follows:
(a) in the case of the Corporation
Co-Steel Inc.
000 Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xx. X. X. Xxxxxxxx, Vice-President, Human Resources
(b) in the case of the Executive:
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX
X0X 0X0
or to the last address of the Executive in the records of the Corporation or to
such other address as the parties may from time to time specify by notice given
in accordance herewith. Any notice so given shall be conclusively deemed to have
been given or made on the day of delivery, if personally delivered, or if
delivered by facsimile transmission or mailed as aforesaid, upon the date shown
on the facsimile confirmation of receipt or on the postal return receipt as the
date upon which the envelope containing such notice was actually received by the
addressee.
7.7 SUCCESSORS.
This Agreement and all rights of the Executive hereunder shall enure to the
benefit of and be enforceable by the Executive and the Executive's personal or
legal representatives, heirs, executors, administrators and successors and shall
be binding on the Corporation and its successors.
7.8 TAXES.
All payments under this Agreement shall be subject to withholding of such
amounts relating to tax or other payroll deductions as the Corporation may
reasonably determine that it should withhold pursuant to any applicable law or
regulation.
7.9 COUNTERPARTS.
This Agreement may be executed in counterparts, each of which shall be
deemed to be an original, but all of which together shall constitute one and the
same instrument.
IN WITNESS WHEREOF the parties have executed this Agreement as of the day
and year first above written.
CO-STEEL INC.
Per: [SIGNATURE] cs
--------------------------------
SIGNED, SEALED AND DELIVERED )
in the presence of )
)
)
)
[SIGNATURE] ) /s/ Xxxxx X. Xxxxxx ls
---------------------------- ) --------------------------------
SCHEDULE "A"
XXXXX X. XXXXXX
Base Salary: $500,000
Annual Incentive: As attached as "Exhibit A"
Long-Term Incentive: As attached as "Exhibit B"
Benefits: Participates in the Co-Steel Lasco Salary
Benefit Program
Annual Vacation: Five weeks
Club Membership and Professional, business and golf and fitness club
Professional Fees: membership fees
Car: Leased vehicle plus operating costs (including
parking), as per Co-Steel Inc. Automobile Policy
Pension: Attached Schedule "B"
Multiple: 3
SCHEDULE "B"
CO-STEEL INC. EXECUTIVE RETIREMENT ARRANGEMENTS FOR XX. XXXXX XXXXXX
The pension arrangements for Xx. Xxxxxx consist of two tiers:
1. THE FIRST TIER IS THE "CO-STEEL LASCO PENSION PLAN FOR SALARIED EMPLOYEES"
2. THE SECOND TIER IS THE "SUPPLEMENTARY EXECUTIVE RETIREMENT PLAN" SERP
BETWEEN XX. XXXXXX AND CO-STEEL INC.
o Currently an unfunded arrangement. A secured letter of credit is held
with the current custodian - C.I.B.C. Mellon to secure the pension
obligations of the S.E.R.P.
o Indexed to 80% of the change in CPI (to a cap of 4%).
o 2.5% per service year of best consecutive 3 years' base pay to a maximum
of 70%. Pension is joint and survivor 60%.
o A complete S.E.R.P. agreement was executed by Xx. Xxxxxx and The Company
on January 30, 1998.
