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Exhibit 10.14
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RTI
INTERNATIONAL
METALS, INC.
November 1, 1999
Xx. Xxxxxx X. Xxxxxxxxxxxx
RTI International Metals, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx, XX 00000
Dear Xx. Xxxxxxxxxxxx:
This Letter Agreement sets forth the basis upon which I have been authorized by
the Board of Directors of RTI International Metals, Inc. ("Company") to employ
you in the executive officer position described in Paragraph 1 below for the
Employment Period (as hereinafter defined). The "Employment Period" shall
initially be the period November 1, 1999 through October 31, 2003; provided,
however, that on November 1, 2003 and each August 1 thereafter, the Employment
Period shall automatically be extended for one additional year unless, not later
than the immediately preceding July 1, either you or the Company shall have
given written notice to the other that you or it does not wish to extend the
Employment Period; and provided further that the Employment Period shall
terminate automatically when you attain age sixty-five (65). In the event this
Letter Agreement is terminated for any reason other than your death, your
obligations as set forth in Paragraph 9 shall survive and be enforceable
notwithstanding such termination.
1. During the Employment Period, you will serve as Vice President
& Controller of the Company (or on any other executive officer
portion within the Company to which you may hereafter be
elected by the Company's Board of Directors), performing all
duties and functions appropriate to that office, as well as
such additional duties as the Company's Vice President & Chief
Financial Officer or Board of Directors may, from time to
time, assign to you. During the Employment Period, you will
devote your full time and best efforts to the performance of
all such duties.
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RTI
INTERNATIONAL
METALS, INC.
Xx. Xxxxxx X. Xxxxxxxxxxxx
November 1, 1999
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2. During the Employment Period, the Company will pay you, in
equal monthly installments, as compensation for your services
an annual salary of $120,000. This annual salary may be
increased from time to time in the sole discretion of the
Company, but may only be decreased by the Company with your
written consent. Such annual salary, whether increased or
decreased, shall constitute your "Base Salary". In addition,
you may be awarded such bonuses as the Board of Directors of
the Company determines to be appropriate under the Company's
Annual Incentive Compensation Plan or any successor bonus
plan. You will also be eligible to participate in the
Company's 1995 Stock Plan, or any successor stock plan.
3. In the event of your death during the Employment Period, your
right to all compensation under this Letter Agreement
allocable to days subsequent to your death shall terminate and
no further payments shall be due to you, your personal
representative, or your estate, except for that portion, if
any, of your Base Salary that is accrued and unpaid upon the
date of your death.
4. In the event you become physically or mentally disabled, in
the sole judgment of physicians selected by the Company's
Board of Directors, such that you cannot perform the duties
and functions contracted for pursuant to this Letter
Agreement, and should such disability continue for at least
180 consecutive days (or in the judgment of such physicians,
be likely to continue for at least 180 consecutive days), the
Company may terminate your employment upon written notice to
you. If your employment is terminated because of physical or
mental disability, your right to all compensation under this
Letter Agreement allocable to days subsequent to such
termination shall terminate and no further payments shall be
due to you, your personal representative, or your estate,
except for that portion, if any, of your Base Salary that is
accrued and unpaid upon the date of termination.
5. The Company may, upon written notice to you fixing the date of
termination, terminate your services during the Employment
Period for Cause, (as Cause is defined in Paragraph 7(c)
below). In such event, your right to receive continued
compensation under this Letter Agreement will terminate and no
further installments will be paid to you, except for that
portion, if any, of your Base Salary that is accrued and
unpaid upon the date of termination.
6. In addition to your annual Base Salary as set forth in
Paragraph 2 above, you will be entitled in each calendar year
to a vacation with pay in accordance with the vacation
policies of the Company. You will also be entitled to: (1)
participate in all of the Company's existing and future
employee benefit programs applicable to officers of the
Company in accordance with the terms of such benefit program
plan documents; (2) receive one comprehensive physical
examination, at Company expense, in each calendar year, such
examination to be conducted by the Cleveland Clinic, the
Greenbrier Clinic or
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RTI
INTERNATIONAL
METALS, INC.
Xx. Xxxxxx X. Xxxxxxxxxxxx
November 1, 1999
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comparable facility; and (3) tax preparation and financial
planning advice.
7. Change of Control Provisions
(a) For purposes of this Letter Agreement, a "Change in
Control" of the Company shall mean a change in
control of a nature that would be required to be
reported by it in response to Item 6(e) of Schedule
14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (the
"Exchange Act"), whether or not the Company is then
subject to such reporting requirement; provided,
that, without limitation, such a change in control
shall be deemed to have occurred if:
(1) Any person (within the meaning of that term
as used in Sections 13(d) and 14(d) of the
Exchange Act (a "Person") is or becomes the
"beneficial owner" (as defined in Rule 13d-3
under the Exchange Act), directly or
indirectly, of securities of the Company
representing twenty percent (20%) or more
of the combined voting power of the
Company's then outstanding voting
securities; provided, however, that for
purposes of this Agreement the term "Person"
shall not include (i) the Company or any of
its majority-owned subsidiaries, (ii) a
trustee or other fiduciary holding
securities under an employee benefit plan of
the Company or any of its subsidiaries,
(iii) an underwriter temporarily holding
securities pursuant to an offering of such
securities, or (iv) a corporation owned,
directly or indirectly, by the stockholders
of the Company in substantially the same
proportions as their ownership of stock of
the Company; or
(2) The following individuals cease for any
reason to constitute a majority of the
number of directors then serving on the
Board of Directors of the Company;
individuals who, on the date hereof, are
serving as directors on the Board and any
new director (other than a director whose
initial assumption of office is in
connection with an actual or threatened
election contest, including but not limited
to a consent solicitation, relating to the
election of directors of the Company) whose
appointment or election by the Board or
nomination for election by the Company's
stockholders was approved by a vote of at
least two-thirds (2/3) of the directors then
still in office who either were directors on
the date hereof or whose appointment,
election or nomination for election was
previously so approved, or
(3) There is consummated a merger or
consolidation of the Company or a subsidiary
thereof with any other corporation, other
than a merger or consolidation which would
result in the holders of the voting
securities
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INTERNATIONAL
METALS, INC.
Xx. Xxxxxx X. Xxxxxxxxxxxx
November 1, 1999
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of the Company outstanding immediately prior
thereto holding securities which represent
immediately after such merger or
consolidation at least 50% of the combined
voting power of the voting securities of the
entity surviving the merger or
consolidation, (or the parent of such
surviving entity) or the shareholders of the
Company approve a plan of complete
liquidation of the Company, or there is
consummated the sale or other disposition of
all or substantially all of the Company's
assets.
(b) If any of the events described above constituting a
Change in Control of the Company shall have occurred,
you shall be entitled to the benefits provided in
Paragraph 7(f) hereof upon the termination of your
employment during the term of this Letter Agreement
unless such termination is (i) because of your death
or disability, (ii) by the Company for Cause, (iii)
by you other than for Good Reason, or (iv) on or
after the date that you attain age sixty-five (65).
In the event your employment with the Company is
terminated for any reason prior to the occurrence of
a Change in Control, you shall not be entitled to any
benefits under this Paragraph 7; provided, however,
that if your employment is terminated prior to a
Change in Control without Cause at the direction of a
person who has entered into an agreement with the
Company, the consummation of which will constitute a
Change in Control, your employment shall be deemed to
have terminated following a Change in Control. Your
entitlement to benefits under any of the Company's
retirement plans will not adversely affect your
rights to receive payments hereunder.
(c) Termination by the Company of your employment for
"Cause" shall mean termination upon (i) the willful
and continued failure by you to substantially perform
your duties with the Company (other than any such
failure resulting from termination by you for Good
Reason), after a demand for substantial performance
is delivered to you that specifically identifies the
manner in which the Company believes that you have
not substantially performed your duties, and you have
failed to resume substantial performance of your
duties on a continuous basis within fourteen (14)
days of receiving such demand, (ii) the willful
engaging by you in conduct which is demonstrably and
materially injurious to the Company, monetarily or
otherwise or (iii) your conviction of any felony or
conviction of a misdemeanor which impairs your
ability substantially to perform your duties with the
Company. For purposes of this paragraph, no act, or
failure to act, on your part shall be deemed
"willful" unless done, or omitted to be done, by you
not in good faith and without reasonable belief that
your action or omission was in the best interest of
the Company.
(d) For purposes of this Letter Agreement, "Good Reason"
shall mean, without your express written consent, the
occurrence after a Change in Control of the Company
of any one or more of the following:
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INTERNATIONAL
METALS, INC.
Xx. Xxxxxx X. Xxxxxxxxxxxx
November 1, 1999
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(1) The assignment to you of duties inconsistent
with your position immediately prior to the
Change in Control;
(2) A reduction or alteration in the nature of
your position, duties, status or
responsibilities from those in effect
immediately prior to the Change in Control;
(3) The failure by the Company to continue in
effect any of the Company's employee benefit
plans, programs, policies, practices or
arrangements in which you participate (or
substantially equivalent successor or
replacement employee benefit plans,
programs, policies, practices or
arrangements) or the failure by the Company
to continue your participation therein on
substantially the same basis, both in terms
of the amount of benefits provided and the
level of your participation relative to
other participants, as existed immediately
prior to the Change in Control;
(4) The failure of the Company to obtain a
satisfactory agreement from any successor to
the Company to assume and agree to perform
this Letter Agreement;
(5) Any purported termination by the Company of
your employment that is not effected
pursuant to a Notice of Termination
satisfying the requirements of Subparagraph
(e) below, and for purposes of this Letter
Agreement, no such purported termination
shall be effective; and
(6) The Company's requiring you to be based at a
location in excess of fifty (50) miles from
the location where you are based immediately
prior to the Change in Control.
(e) Any termination by the Company for Cause or by you
for Good Reason shall be communicated by Notice of
Termination to the other party hereto. For purposes
of this Letter Agreement, a "Notice of Termination"
shall mean a written notice which shall indicate the
specific termination provision in this Letter
Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed
to provide a basis for termination of your employment
under the provision so indicated.
(f) Following a Change in Control of the Company, as
defined above, upon termination of your employment
you shall be entitled to the following benefits:
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INTERNATIONAL
METALS, INC.
Xx. Xxxxxx X. Xxxxxxxxxxxx
November 1, 1999
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(1) If your employment shall be terminated by
the Company for Cause or by you other than
for Good Reason, the Company shall pay you
your full Base Salary through the date of
termination at the rate in effect at the
time Notice of Termination is given, plus
all other amounts to which you are entitled
under any compensation plan of the Company
at the time such payments are due, and the
Company shall have no further obligations to
you under this Agreement.
(2) If your employment terminates by reason of
your death or disability, your benefits
shall be determined in accordance with
Paragraphs 3 and 4 of this Letter Agreement
and the Company's retirement, survivor's
benefits, insurance and other applicable
programs and plans, then in effect.
(3) If your employment by the Company shall be
terminated (i) by the Company other than for
Cause, your death or disability, or (ii) by
you for Good Reason, you shall be entitled
to the benefits (the "Severance Payments")
provided in Paragraphs 7(f)(3), (i), (ii),
(iii), (iv) and (v) following, which
Severance Payments shall be in lieu of and
cancel any further rights you have to
receive any Base Salary that would be
otherwise due under Paragraph 2 of this
Letter Agreement:
(i) The Company shall pay you your full
Base Salary through the date of
termination at the rate in effect
at the time Notice of Termination
is given;
(ii) The Company will pay as severance
benefits to you, not later than the
fifth day following the date of
termination, a lump sum severance
payment (the "Severance Payment")
equal to the product of (1) a
fraction, the numerator of which is
equal to the lesser of (x)
thirty-six (36) or (y) the number
of full and partial months
existing between the date of
termination and your sixty-fifth
(65th) birthday and the denominator
of which is equal to twelve (12),
and (2) the sum of (x) your annual
Base Salary in effect immediately
prior to the occurrence of the
circumstances giving rise to such
termination, and (y) the amount, if
any, of the highest annual bonuses
awarded to you under any annual
bonus plan of the Company during
the four (4) years immediately
preceding date of termination;
(iii) The Options previously issued to
you under any option or incentive
plan of the Company to purchase
shares of Common
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RTI
INTERNATIONAL
METALS, INC.
Xx. Xxxxxx X. Xxxxxxxxxxxx
November 1, 1999
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Stock of the Company (Option
Shares), as well as any previously
unvested shares of Restricted Stock
granted to you, shall irrevocably
vest upon any such termination and
the stock options for such Option
Shares shall become thereafter
uncancellable by the Company;
(iv) In the event that you become
entitled to the Severance Payments,
if any of the Severance Payments or
other portion of the Total Payments
(as defined below) will be subject
to the tax (the "Excise Tax")
imposed by Section 4999 of the
Internal Revenue Code of 1986, as
amended (the "Code"), the Company
shall pay to you at the time
specified below, an additional
amount (the "Gross-Up Payment")
such that the net amount retained
by you, after deduction of (1) any
Excise Tax on the Severance
Payments and such other Total
Payments, and (2) any federal,
state and local income tax,
FICA-Health Insurance tax, and
Excise Tax upon the payment
provided for by this paragraph,
shall be equal to the Severance
Payments and such other total
Payments. For purposes of
determining whether any of the
payments will be subject to the
Excise Tax and the amount of such
Excise Tax, (1) any other payments
or benefits received or to be
received by you in connection with
a Change in Control of the Company
or your termination of employment
whether pursuant to the terms of
this Letter Agreement or any other
plan, arrangement or agreement with
the Company, any person whose
actions result in a Change of
Control of the Company or any
person affiliated with the Company
or such person (together with the
Severance Payment, the "Total
Payments") shall be treated as
"parachute payments" within the
meaning of Section 280G(b)(2) of
the Code, and all "excess parachute
payments" within the meaning of
Section 280G(b)(1) shall be treated
as subject to the Excise Tax,
except to the extent that in the
opinion of tax counsel selected by
the Company's independent auditors
and acceptable by you such other
payments or benefits (in whole or
in part) do not constitute
parachute payments, or such excess
parachute payments (in whole or in
part) represent reasonable
compensation for services actually
rendered within the meaning of
Section 280G(b)(4) of the Code in
excess of the base amount within
the meaning of Section 280G(b)(3)
of the Code, or are otherwise not
subject to the Excise Tax, (2) the
amount of the Total Payments which
shall be treated as subject to the
Excise
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INTERNATIONAL
METALS, INC.
Xx. Xxxxxx X. Xxxxxxxxxxxx
November 1, 1999
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Tax shall be equal to the lesser of
(A) the total amount of the Total
Payments or (B) the amount of
excess parachute payments within
the meaning of Section 280G(b)(1)
(after applying clause (1), above),
and (3) the value of any non-cash
benefits or any deferred payment or
benefit shall be determined by the
Company's independent auditors in
accordance with the principles of
Sections 280G(d)(3) and (4) of the
Code. For purposes of determining
the amount of the Gross-Up Payment,
you shall be deemed to pay federal
income taxes at the highest
marginal rate of federal income
taxation in the calendar year in
which the Gross-Up Payment is to be
made and state and local income
taxes at the highest marginal rate
of taxation in the state and
locality of your residence on the
date of termination, net of the
maximum reduction in federal income
taxes which could be obtained from
deduction of such state and local
taxes. In the event that the Excise
Tax is subsequently determined to
be less than the amount taken into
account hereunder at the time of
termination of your employment, you
shall repay to the Company at the
time that the amount of such
reduction in Excise Tax is finally
determined the portion of the
Gross-Up Payment attributable to
such reduction (plus the portion of
the Gross-Up Payment attributable
to the Excise Tax and federal and
state and local income tax imposed
on the Gross-Up Payment being
repaid by you if such repayment
results in a reduction in Excise
Tax and/or a federal and state and
local income tax deduction) plus
interest on the amount of such
repayment at the rate provided in
Section 1274(b)(2)(B) of the Code.
In the event that the Excise Tax is
determined to exceed the amount
taken into account hereunder at the
time of the termination of your
employment (including by reason of
any payment the existence or amount
of which cannot be determined at
the time of the Gross-Up Payment),
the Company shall make an
additional Gross-Up Payment in
respect of such excess (plus any
interest payable with respect to
such excess) at the time that the
amount of such excess is finally
determined.
The payments provided for in the
paragraph above shall be made not
later than the fifth day following
the date of termination; provided,
however, that if the amounts of
such payments cannot be finally
determined on or before such day,
the Company shall pay to you on
such day an estimate as determined
in good faith by the Company of the
minimum amount of such payments and
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INTERNATIONAL
METALS, INC.
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November 1, 1999
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shall pay the remainder of such
payments (together with interest at
the rate provided in Section
1274(b)(2)(B) of the Code) as soon
as the amount thereof can be
determined but in no event later
than the thirtieth day after the
date of termination. In the event
that the amount of the estimated
payments exceeds the amount
subsequently determined to have
been due, such excess shall
constitute a loan by the Company to
you payable on the fifth day after
demand by the Company (together
with interest at the rate provided
in Section 1274(b)(2)(B) of the
Code);
(v) The Company shall also pay to you
all legal fees and expenses
incurred by you as a result of such
termination of employment
(including all such fees and
expenses, if any, incurred in
contesting or disputing any such
termination or in seeking to obtain
or enforce any right or benefit
provided by this Letter Agreement
or in connection with any tax audit
or proceeding to the extent
attributable to the application of
Section 4999 of the Code to any
payment or benefit provided
hereunder); and
(vi) For a twenty-four (24) month period
after date of termination, the
Company will arrange to provide you
at the Company's expense with life,
disability, accident and health
insurance benefits substantially
similar to those which you were
receiving immediately prior to the
Notice of Termination; but benefits
otherwise receivable by you
pursuant to this paragraph shall be
reduced to the extent comparable
benefits are actually received by
you during the twenty-four (24)
month period following your
termination, and any such benefits
actually received by you shall be
reported to the Company.
(h) You shall not be required to mitigate the amount of
any Severance Payments provided for in this Paragraph
7 by seeking other employment or otherwise, nor,
except as provided in Paragraph (vi) above, shall the
amount of any payment or benefit provided for in this
Paragraph 7 be reduced by any compensation or benefit
earned by you as the result of employment by another
employer after the date of termination, or otherwise.
(i) The Company will require any successor (whether
direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially
all of the business and/or assets of the Company or
of any division or subsidiary thereof employing you
to expressly assume and agree to perform this Letter
Agreement in the same manner and to the same extent
that the Company would be required
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INTERNATIONAL
METALS, INC.
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November 1, 1999
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to perform it if no such succession had taken place.
Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such
succession shall be a breach of this Letter Agreement
and shall entitle you to compensation from the
Company in the same amount and on the same terms as
you would be entitled hereunder if you terminate your
employment for Good Reason.
8. This Letter Agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If you should die while any amount
would still be payable to you hereunder if you had continued
to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Letter
Agreement, to your devisee, legatee or other designee or, if
there is not such designee, to your estate.
9. As additional consideration for the compensation and benefits
provided to you pursuant to this Letter Agreement, you agree
that you will not, for a period of twenty-four (24) months
after the end of the Employment Period, or the termination of
your employment with the Company (whichever first occurs),
directly or indirectly, compete with, engage in the same
business as, be employed by, act a consultant to, or be a
director, officer, employee, owner or partner, or otherwise
participate in or assist (including, without limitation, by
soliciting customers for, or individuals to provide services
to), any business or organization which competes with the
Company; or any subsidiary or affiliate thereof. In addition,
you agree that during such 24-month period, you will not
directly or indirectly induce, or attempt to influence, any
employee of the Company or any subsidiary or affiliate thereof
to terminate his or her employment with the Company or any
subsidiary or affiliate thereof or in any manner seek to
engage or seek to employ any such employee (whether or not for
compensation) such that such employee would thereafter be
unable to devote his or her full efforts to the business then
conducted by the Company or any subsidiary or affiliate
thereof. These restrictions shall not apply if you terminate
your employment with the Company for Good Reason after a
Change in Control of the Company. For purposes of this
Paragraph 9, you will not be deemed to have breached your
commitment merely because you own, directly or indirectly, not
more than one percent (1%) of the outstanding common stock
of such a corporation if, at the time you acquire such stock,
such stock is listed on a national securities exchange or is
regularly traded in the over-the-counter market by a member of
either a national securities exchange or the National
Association of Securities Dealers, Inc. In order to protect
the interest of the Company, you will also maintain in strict
confidence and not disclose to any other person or entity any
information received from any source in the Company or
developed by you in the course of performing your duties for
the Company.
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INTERNATIONAL
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This obligation shall not extend to: (a) anything you can
establish as known to you from a source outside the Company,
(b) anything which has been published or becomes published
hereafter other than by you, or (c) anything which you receive
from a non-Company source without restriction on its
disclosure. Should you breach or threaten to breach the
commitments in this Paragraph 9, and in recognition of the
fact that the Company would not under such circumstances be
adequately compensated by money damages, the Company shall be
entitled, in addition to any other rights and remedies
available to it, to an injunction restraining you from such
breach. Further, you acknowledge and agree that the provisions
of this Paragraph 9 are necessary, reasonable, and
proportionate to protect the Company during such
non-competition period.
10. The validity, interpretation, construction and performance of
this Letter Agreement shall be governed by the laws of the
State of Ohio.
If the provisions of this Letter Agreement are acceptable to you, please sign
one original copy of this Letter Agreement and return it to me. You may retain
the second signed original for your files.
Very truly yours,
RTI International Metals, Inc.
By: /s/ XXXXXXX X. XXXXXX
-----------------------------
XXXXXXX X. XXXXXX
President & Chief Executive Officer
Attachment
CONFIRMED:
/s/ XXXXXX X. XXXXXXXXXXXX DATE: 11-1-99
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XXXXXX X. XXXXXXXXXXXX
