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Exhibit 10.1
June 1, 2001
Xx. Xxxxxx X. Xxxxxxx
0000 Xxx Xxxx Xxxxxx
Xxxx Xxxx Xxxx, XX 00000
Re: Employment Agreement
Dear Xxxxxx:
Special Metals Corporation (the "Company") desires to employ you on the
terms set forth in this Agreement, and by your signature below you have
indicated that you desire to be employed by the Company on such terms.
Accordingly, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Duties. You shall serve as the Vice President and Chief Financial
Officer of the Company. You agree to devote your full business time, attention,
best energies and abilities to the performance of any duties assigned to you by
the President and/or Board of Directors of the Company. During the Employment
Period (as defined below), your employment hereunder shall be exclusive, and you
shall not engage in any other trade or business without the consent of the
Company. You shall report to the President and Board of Directors of the
Company.
2. Term. Your term of employment with the Company shall be for the
period commencing on June 30, 2001 (the "Commencement Date") and ending on the
third anniversary of the Commencement Date (the "Employment Period"). As of the
third anniversary of the Commencement Date, and upon each one year anniversary
date thereafter, the Employment Period shall be automatically extended for an
additional period of one year, upon the terms and conditions set forth in this
Agreement, unless (i) either party gives at least six (6) months prior written
notice of his or its intention not to extend the Employment Period, or (ii) your
employment is terminated in accordance with the terms of Section 6 of this
Agreement.
3. Base Salary. Your base salary during the Employment Period shall be
at least Two Hundred Twenty Thousand Dollars ($220,000) per annum. Your base
salary shall be payable in periodic installments in accordance with the
Company's normal payroll cycle. Periodically during the Employment Period you
will be eligible for salary increases based on your performance. Salary reviews
and increases will be in accordance with the Company's then applicable salary
review policy.
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4. Incentive Compensation.
4.1 Incentive Compensation Plan. During the Employment Period,
you will be eligible to participate in, and be subject to, the Company's Guide
to Incentive Compensation Program (as modified, amended or terminated from time
to time) at the forty percent (40%) target level as defined in the applicable
plan.
4.2 Long-Term Incentive Compensation Plan. During the
Employment Period, you will be eligible to participate in, and be subject to,
the Company's Long-Term Incentive Compensation Program (as modified, amended or
terminated from time to time). Your targeted award opportunity under this
program will be 50% of your base salary for each of the respective plan periods.
You will be able to participate in both the 2001-2002 and the 2001-2003
performance unit awards cycles, on a pro-rated basis for partial years.
5. Other Benefits
5.1 Stock Option Grants. During the Employment Period, you
will be eligible to participate in the Company's Nonqualified Stock Option
Agreement and Long-Term Stock Incentive Plan (collectively referred to herein as
the "Stock Option Plan") as modified, amended or terminated from time to time.
5.2 Employee Fringe Benefits. During the Employment Period,
you will be eligible to participate in the Company's Executive Exam Program and
any standard employee fringe benefits plans, including, without limitation,
pension, 401(k), medical, dental and life insurance and other fringe benefits,
pursuant to their respective terms and conditions as they may be modified,
amended or terminated from time to time.
5.3 Reimbursement of Business Expenses. The Company will, upon
proper substantiation, reimburse you for all reasonable expenses that you incur
in connection with the Company's business affairs. You must regularly submit to
the Company's President a statement of these expenses and comply with any
accounting and reporting requirements that the Company may from time to time
establish.
5.4 Vacation. You are entitled to four (4) weeks of vacation
per calendar year, pro rated for partial years.
5.5 Club Membership. The Company will reimburse you for one
club membership pursuant to the terms of its applicable policy relating to
memberships, with the prior approval of the President and with reimbursement at
a level consistent with Company-established practice. The Company may modify the
reimbursement arrangement from time to time.
6. Termination.
6.1 By the Company. The Company may terminate your employment
and the Employment Period:
(a) at any time, without notice, for "Cause" (as defined
below);
(b) upon your death;
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(c) in the event a disability prevents you from rendering
services to the Company consistent with your duties hereunder for a
period of six (6) consecutive months;
(d) by not extending the Employment Period pursuant to Section
2 of this Agreement; or
(e) at any time, for any reason other than the reasons set
forth in clauses (a), (b), (c) or (d) of Subsection 6.1; provided,
however, that if the Company terminates you for any reason other than
pursuant to clauses (a), (b), (c) or (d) of Subsection 6.1, the Company
shall comply with Subsection 6.3(a).
For purposes of this Agreement, "Cause" is defined as your: (i) willful neglect
of your duties hereunder; (ii) conviction or entry of a plea of guilty or nolo
contendre with respect to a felony; (iii) material, knowing and intentional
failure to comply with applicable laws with respect to the execution of the
Company's business operations; (iv) theft, fraud, embezzlement, dishonesty or
similar conduct which has resulted or is likely to result in material economic
damage to the Company or any of its affiliates or subsidiaries; (v) repeated
failure to perform the directives of the President and/or the Company's Board of
Directors; or (vi) dependence or addiction to alcohol or use of drugs (except
those legally prescribed by and administered pursuant to the directions of a
practitioner licensed to do so under the laws of the state or county of
licensure) which in the opinion of the President or the Company's Board of
Directors interferes with your ability to perform your assigned duties and
responsibilities.
6.2 By the Employee. You may terminate your employment and the
Employment Period:
(a) at any time upon ninety (90) days advance written notice;
(b) for "Good Reason," upon ninety (90) days advance written
notice and the Company's failure to cure the "Good Reason" within such ninety
(90) day period. "Good Reason" is defined as (i) any material breach of this
Agreement by the Company that is not cured within 30 days after written notice
thereof; or (ii) any material reduction in your authority or job
responsibilities which results in lower salary or less responsibility than your
assignment as Vice President and Chief Financial Officer, other than a reduction
for Cause; or
(c) by not extending the Employment Period pursuant to Section
2 of this Agreement.
6.3 Payments and Benefits upon Termination.
(a) Upon termination of your employment pursuant to
Subsections 6.1(e) or 6.2(b) of this Agreement, the Company shall provide you
with:
(i) severance pay at a rate per annum equal to your base
salary in effect as of the date of such termination, payable in
accordance with the Company's normal payroll cycle, until (A) the end
of what would have been the Employment Period but for such termination
(without giving effect to the automatic renewal provision of Section
2), or (B) one year after the date of termination, whichever is longer;
(ii) accelerated vesting of any incentive compensation, profit
sharing and stock option benefits which have been earned or accrued by
you as of the date of termination but are payable after the date of
such termination, subject to the terms of the Company's incentive
compensation and profit sharing and stock option plans, provided,
however, that your right to exercise any vested stock options shall be
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extended for a period of one (1) year following the termination,
notwithstanding any contrary language in the plan documents; and
(iii) continued coverage under the Company's health insurance
plan as in effect immediately prior to such termination, subject to the
terms of such plan (including any required contribution by you), until
(A) the end of what would have been the Employment Period but for such
termination (without giving effect to the automatic renewal provision
of Section 2), or (B) one year after the date of termination, whichever
is longer.
The payments and benefits specified in this Subsection 6.3(a) shall be in full
satisfaction of any and all claims that you may have against the Company or any
of its subsidiaries or affiliates and, as a condition to the Company making of
such payments and offering such benefits, you and the Company shall be required
to execute mutual releases of claims arising from events or occurrences prior to
the date of such termination.
(b) Upon termination of your employment by the Company
pursuant to clauses (a), (b), (c), or (d) of Subsection 6.1, or by you pursuant
to clauses (a) or (c) of Subsection 6.2, you or your estate, as the case may be,
shall not be entitled to any compensation, severance, or any other benefits
and/or payments hereunder, except for (i) base salary, bonus and profit sharing,
stock options and pension benefits earned and vested as of the date of such
termination, and (ii) the proceeds of all applicable life and disability
insurance policies in the case of termination due to your death or disability,
respectively.
7. Relocation. You agree to move to the Huntington, West Virginia area
as soon as practical, and you shall be entitled to the benefits of the Company's
executive relocation policy.
8. Non-Disclosure; Non-Competition; Non-Solicitation.
8.1 Proprietary Information.
(a) You agree that all information and know-how, whether
or not in writing, of a private, secret or confidential nature concerning the
business or financial affairs of the Company or any of its subsidiaries or
affiliates (collectively, "Proprietary Information"), is and will be the
exclusive property of the Company, or such subsidiary or affiliate, as the case
may be. By way of illustration, but not limitation, Proprietary Information
includes manufacturing methods, processes or techniques; inventions; products;
projects; developments; compositions; plans; research data; financial data;
trade secrets; patents; personnel data; computer programs; designs; and client
and supplier lists, whether or not copyrightable, trademarkable or licensable.
You shall not disclose any Proprietary Information to others outside the Group
(as defined below) or use the Proprietary Information for any unauthorized
purposes without written approval by the President of the Company, either during
or after your employment, unless and until such Proprietary Information has
become public knowledge without your fault. For purposes hereof, the "Group"
shall mean the Company and any subsidiary or affiliate of the Company.
(b) You agree that all files, letters, memoranda,
reports, records, data, sketches, drawings, notebooks, notes, specifications,
computer programs and electronic files, listings, or other written,
photographic, or other tangible or electronic material containing Proprietary
Information, whether created by you or others, which comes into your custody or
possession, is the exclusive property of the Group, to be used by you only in
the performance of your duties for the Company and will remain in the custody of
the Company if for any reason you leave your employment with the Company and it
will not be available to you after termination of your employment.
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(c) You agree that your obligation not to disclose or
use information, know-how and records of the types set forth in paragraphs (a)
and (b) above also extends to such types of information, know-how, records and
tangible property of customers of the Company or suppliers to the Company or
other third parties who may have disclosed or entrusted the same to the Company
or to you in the course of the Company's business.
8.2 Developments.
(a) You will make full and prompt disclosure to the
Company of all patents, inventions, improvements, ideas, concepts, approaches,
discoveries, methods, developments, software, and works of authorship, whether
or not copyrightable, patentable, trademarkable or licensable, which are
created, made, conceived or reduced to practice by you or under your direction
or jointly with others in connection with your employment by the Company and
relating to clients or prospective clients of the Company, whether or not during
normal working hours or on the premises of the Company (all of which are
collectively referred to in this Agreement as "Developments").
(b) You agree to cooperate fully with the Company, both
during and after your employment with the Company, with respect to the
procurement, maintenance and enforcement of patents, copyrights, licenses and
trademarks (both in the United States and foreign countries) relating to
Developments. To the extent that such cooperation requires the expenditure of
any money, the Company will be responsible for the payment of any such money. If
pursuant to this Section 8.2 you assist the Company subsequent to the
termination of your employment with the Company, the Company will compensate you
for your time at a rate to be mutually agreed upon. You will sign all papers,
including, without limitation, copyright applications, trademark applications,
patent applications, license applications, declarations, oaths, formal
assignments, assignments of priority rights and powers of attorney, which the
Company may deem necessary or desirable in order to protect its rights and
interest in any Developments.
8.3 Non-Competition.
(a) During your Employment Period with the Company and
for an additional period equal to twelve (12) months after the end of the
Employment Period or until the end of the period during which you are receiving
payments from the Company pursuant to Subsection 6.3(a) of this Agreement,
whichever is longer, and regardless of the reason for the termination of your
employment, you will not, without the Company's prior written approval, directly
or indirectly:
(i) hire any employee of the Group or recruit,
solicit or induce, or attempt to induce, any employee or
consultant of the Group to terminate his employment or
consulting relationship with, or otherwise cease his
relationship with, the Group;
(ii) solicit, divert or take away, or attempt to
divert or to take away, the business or patronage of any of
the clients, customers or accounts, or prospective clients,
customers or accounts, of the Group which were contacted,
solicited or served by the Group at any time during or prior
to the term of this Agreement; or
(iii) engage (whether for compensation or without
compensation), directly or indirectly, as an individual
proprietor, partner, stockholder, officer, employee, member,
agent, independent contractor, consultant, director, joint
venturer, investor, lender, or in any other capacity
whatsoever (other than as the holder of not more than one
percent (1%) of the total outstanding stock of a publicly-held
company), in the business of developing, producing, marketing
or selling products or services in the high performance nickel
alloy and superalloy industry throughout the world (a
"Competitive Business"). Provided, however, that this
restriction shall not preclude you from working in a
multi-division Company which has a division that is a
Competitive Business, so long as you are not engaged directly
or indirectly
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with that division for the 12 month period described in this
section and otherwise honor all of your obligations under
Section 8 of this Agreement. You acknowledge and agree that
your engagement (whether for compensation or without
compensation), directly or indirectly, as an individual
proprietor, partner, stockholder, officer, employee, member,
agent, independent contractor, consultant, director, joint
venturer, investor, lender, or in any other capacity
whatsoever (other than as the holder of not more than one
percent (1%) of the total outstanding stock of a publicly-held
company), with or for any Competitive Business shall be deemed
to constitute engagement in a Competitive Business. You
acknowledge and agree that the Group conducts business
worldwide and that the Group's business, clients, customers,
accounts or prospective business, customers or accounts are
and/or could be worldwide.
(b) If any restriction set forth in this Subsection 8.3 is
found by any court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too great a range of activities or
in too broad a geographic area, it shall be interpreted to extend only over the
maximum period of time, range of activities or geographic areas to which it may
be enforceable.
(c) The restrictions contained in this Subsection 8.3 are
necessary for the protection of the business and goodwill of the Group and are
considered by you to be reasonable for this purpose, and you acknowledge that
but for your agreement to comply with such restrictions the Company would not
have entered into this Agreement. You agree that for purposes of this paragraph
the services to be provided by you hereunder are special, unique and/or
extraordinary and that any breach of this Subsection 8.3 will cause the Group
substantial and irreparable damage and, therefore, in the event of any such
breach, in addition to such other remedies which at law or in equity may be
available, the Group will have the right to seek specific performance,
injunctive relief and attorneys' fees, costs and disbursements to enforce its
rights hereunder and without the necessity of posting any bond. The period of
time during which the restrictions contained in Subsection 8.3 are in effect
shall be extended by the length of time during which you are in breach of any
such restrictions, as determined by any court of competent jurisdiction.
8.4 Survival of Obligations. Your obligations under
Subsections 8.1, 8.2 and 8.3 will survive the termination of this Agreement.
9. Notices.
All notices under this Agreement must be in writing and must
be delivered by hand or by facsimile transmission or mailed by certified or
registered mail, postage prepaid, return receipt requested, to the parties as
follows:
If to the Company:
Special Metals Corporation
0000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000-0000
Facsimile No: (000) 000-0000
Attention: President
with a copy to (which shall not constitute notice):
Special Metals Corporation
0000 Xxxxxx Xxxxxxxxxx Xxxx
Xxx Xxxxxxxx, Xxx Xxxx 00000-0000
Facsimile No: (000) 000-0000
Attention: General Counsel
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If to you: To the address set forth on the first page of this
Agreement,
or to such other address as is specified in a notice complying with this Section
9. Any such notice is deemed given on the date delivered by hand or facsimile
transmission or three days after the date of mailing.
10. Other Agreements. You hereby represent that you are not bound by
the terms of any agreement with any previous employer or other party to refrain
from competing, directly or indirectly, with the business of such previous
employer or any other party, except as disclosed to the Company. You further
represent that your performance of all the terms of this Agreement and as an
employee of the Company does not and will not breach any agreement to keep in
confidence proprietary information, knowledge or data acquired by you in
confidence or in trust prior to your employment with the Company.
11. Miscellaneous.
11.1 Modification. This Agreement constitutes the entire
Agreement between the parties with regard to the subject matter hereof,
superseding all prior understandings and agreements, whether written or oral.
None of the Company's employee handbooks, manuals, or policy statements shall
explicitly or implicitly create any additional rights or obligations with
respect to your employment except as otherwise explicitly provided herein. This
Agreement may not be amended, modified or revised except by a writing signed by
the parties.
11.2 Successors and Assigns. This Agreement is binding upon
and inures to the benefit of both parties and their respective heirs, executors,
trustees, administrators, successors and assigns, including any corporation with
which or into which the Company may be merged or which may succeed to its assets
or business, although your obligations are personal and may be performed only by
you.
11.3 Captions. Captions have been inserted in this Agreement
solely for convenience of reference, and in no way define, limit or affect the
scope or substance of any provision of this Agreement.
11.4 Severability. The provisions of this Agreement are
severable, and invalidity of any provision does not affect the validity of any
other provision. In the event that any court of competent jurisdiction
determines that any provision of this Agreement or the application thereof is
unenforceable because of its duration or scope, the parties agree that the court
in making such determination will have the power to reduce the duration and
scope of such provision to the extent necessary to make it enforceable, and that
the Agreement in its reduced form is valid and enforceable to the full extent
permitted by law.
11.5 Delays or Omissions. No delay or omission by the Company
in exercising any right under this Agreement (including without limitation, any
failure to strictly enforce any provision hereof) shall operate as a waiver of
that or any other right. A waiver or consent given by the Company on any one
occasion shall be effective only in that instance and shall not be construed as
a bar or waiver of any right on any other occasion.
11.6 Submission to Arbitration. Each party to this Agreement
hereby irrevocably and unconditionally:
(a)(i) agrees that any controversy or claim arising out
of or relating to this Agreement or a breach of this Agreement, other than a
claim pursuant to Subsection 8.3, shall be settled by arbitration in accordance
with the rules of the American Arbitration Association ("AAA") in proceedings
conducted by the AAA within the State of New York, (ii) consents and submits to
the jurisdiction of such arbitration proceeding instituted by the other, (iii)
agrees that the parties will owe equally all fees and expenses of the AAA (not
including each party's own attorneys' fees and costs), subject to the right of
the AAA to award such fees and costs to the prevailing party as part of any
arbitration award; and (iv) the arbitration award shall be final and binding
subject to enforcement in any other jurisdictions by suit on the judgment or in
any other manner provided by law; and
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(b)(i) waives any objection which it may now or
hereafter have to the laying of venue of any arbitration proceeding arising out
of or relating to this Agreement brought as specified in Subsection 11.6(a),
(ii) waives any claim that any such proceeding has been brought in an
inconvenient forum, and (iii) agrees not to plead or claim either of the
foregoing.
11.7 Acknowledgment. You hereby acknowledge that you have read
this Agreement carefully; you have been afforded sufficient time to understand
the terms and effects of this Agreement; you have been given the opportunity to
consult with counsel and in fact have been advised by counsel as to all terms
and effects of this Agreement prior to executing this Agreement, or have
knowingly, freely and voluntarily declined to do so; any ambiguity that might be
alleged to exist herein shall not be construed against or in favor of any party
hereto; you are voluntarily entering into and executing this Agreement; neither
the Company nor its agents or representatives have made any representations
inconsistent with the terms and effects of this Agreement; no promise,
inducement, or agreement not expressed herein has been made to you; and you
fully understand and voluntarily accept the terms and conditions of this
Agreement.
11.8 Governing Law. This Agreement is to be interpreted and
construed under and governed by the laws of State of New York.
If the foregoing is acceptable to you, please execute the
duplicate original of this letter in the space provided below and return one
fully executed original to me.
Very truly yours,
SPECIAL METALS CORPORATION
By: /s/ T. Xxxxx Xxxx
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T. Xxxxx Xxxx
President
ACCEPTED AND AGREED to this
30th day of June, 2001
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
