EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this ninth day of July,
1998, by and between GIBRALTAR STEEL CORPORATION, a
Delaware corporation, with offices at 0000 Xxxx Xxxxx
Xxxx, Xxxxxxx, Xxx Xxxx 00000 (the "Corporation") and
XXXXX X. XXXXX, an individual residing at 0000 Xxx Xxxx
Xxxxx Xxxx, Xxxxx, Xxx Xxxx 00000 (the "Executive").
WHEREAS, the Executive is currently employed by
the Corporation pursuant to the terms of an employment
agreement by and between the Corporation and the
Executive, dated as of November 1, 1993 (hereinafter
the "Original Employment Agreement"); and
WHEREAS, the Executive has made and is expected to
continue to make a major contribution to the
profitability, growth and financial strength of the
Corporation; and
WHEREAS, the Corporation considers the continued
services of the Executive to be in the best interests
of the Corporation and its stockholders and desires to
assure the continued services of the Executive on
behalf of the Corporation; and
WHEREAS, in connection with certain change in
control agreements entered into by the Corporation to
provide certain benefits to certain executive officers
of the Corporation upon the occurrence of a change in
control of the Corporation, the Corporation desires to
enter into a change in control agreement with the
Executive and to amend the terms of the Original
Employment Agreement to delete the provisions of such
agreement relating to the rights of the Executive upon
the occurrence of a change in control of the
Corporation and to make certain other technical changes
to the terms of the Original Employment Agreement;
NOW, THEREFORE, in consideration of the conditions
and covenants set forth in this Agreement, the parties
hereto agree as follows:
1. AGREEMENT OF EMPLOYMENT. The Corporation agrees to, and
hereby does, employ the Executive, and the Executive agrees to
and hereby accepts employment by the Corporation, as President,
Chief Executive Officer, and Chairman of the Board of the
Corporation, to perform such executive duties and
responsibilities as may be assigned from time to time by the
Board of Directors of the Corporation (the "Board") subject, at
all times, to the control of the Board. It is contemplated that
the Executive will continue to serve as President and Chief
Executive Officer and Chairman of the Corporation, subject to the
right of the Board to elect officers of the Corporation. The
Corporation shall not require the Executive to perform services
hereunder outside the Buffalo, New York metropolitan area with
such frequency or duration as would necessitate the Executive
moving his residence from the Buffalo, New York area.
2. EXECUTIVE'S DUTIES AND BENEFITS.
(a) Duties. During the period of his employment under
this Agreement, the Executive shall devote sufficient time and
energies to the supervision and management of the business and
affairs of the Corporation, and to the furtherance of its
interests. The Executive may become a director or trustee of any
corporation or entity that does not compete with the business of
the Corporation or constitute a Competitive Operation as defined
in Section 7 hereof.
(b) Vacation. The Executive shall be entitled to
reasonable vacation periods during each full year of the
Executive's employment hereunder.
(c) Benefits. The Corporation shall pay the premiums
for policies of life, medical, disability, travel and accident,
and directors' and officers' liability insurance providing
coverage and benefits at least comparable to the policies of
insurance maintained for the benefit of the Executive as of the
date of this Agreement. The Executive shall be entitled to
participate in all pension and profit sharing plans, bonus plans,
stock option plans and other employee benefit plans and receive
such other employment benefits as the Corporation may from time
to time maintain for the benefit of or provide to its executive
officers.
3. REIMBURSEMENT FOR EXPENSES. The Corporation shall
reimburse the Executive for all reasonable expenses which the
Executive may from time to time incur on behalf of the
Corporation in the performance of his responsibilities and duties
under this Agreement, provided that the Executive accounts to the
Corporation for such expenses in a manner prescribed by the
Corporation.
4. ANNUAL COMPENSATION.
(a) Salary. During the period of the Executive's
employment hereunder, the Corporation shall pay to the Executive
an annual salary (the "Base Salary") of not less than Three
Hundred Thousand Dollars ($300,000.00) payable in equal
installments according to the payroll schedule of the
Corporation. The Board, through its Compensation Committee,
shall in good faith review the Base Salary of the Executive, on
an annual basis, and increase the Base Salary of the Executive
if, in the Board's judgment, such increase is advisable.
(b) Bonuses. The Executive shall be entitled to
participate in the Gibraltar Steel Corporation Executive Bonus
Plan, and receive bonuses in accordance with the terms thereof.
The Board, in its discretion, may amend or change the Gibraltar
Steel Corporation Executive Bonus Plan or may award such
additional bonuses to the Executive as it may from time to time
determine.
5. TERM OF EMPLOYMENT; TERMINATION.
(a) Term. The term of this Agreement shall commence
effective as of July 9, 1998 ("Effective Date") and continue to
July 8, 2003. The term of this Agreement shall be
automatically extended for successive twelve-month periods
unless, at least ninety (90) days prior to the expiration of the
then current term, either party gives notice to the other that
the term of this Agreement will not be so extended.
(b) Termination. Notwithstanding anything to the
contrary contained in this Agreement, the Executive's employment
under this Agreement may be terminated as follows:
(i) Death. The Executive's employment hereunder
shall terminate upon his death.
(ii) Disability. In the event that two (2)
licensed physicians shall have certified in writing that the
Executive has been unable or will be unable to perform his duties
hereunder by reason of illness, incapacity or other physical or
mental disability for a period of twelve (12) consecutive months,
the Corporation may terminate the Executive's employment
hereunder by reason of disability.
(iii) Cause. The Corporation may terminate the
Executive's employment hereunder for cause. For the purposes of
this Agreement, the Corporation shall have "cause" to terminate
the Executive's employment hereunder upon the Executive's (A)
willful and continued failure to substantially perform his duties
hereunder, other than any such failure resulting from the
Executive's incapacity due to physical or mental illness; (B)
illegal or criminal conduct; (C) intentional falsification of
records or reports or any other act or acts of dishonesty
resulting, or intended to result, in personal gain or enrichment
of the Executive at the expense of the Corporation; (D) excessive
and/or chronic use of alcohol, narcotics or controlled substances
(other than under the supervision of a licensed physician); or
(E) willful engagement in gross misconduct materially injurious
to the Corporation.
(iv) Without Cause. The Executive's employment
under this Agreement may be terminated upon the affirmative vote
of a majority of the Board at a duly held meeting thereof.
(v) By Executive. The Executive may terminate
his employment hereunder at any time by delivering written notice
of termination to the Corporation at least ninety (90) days prior
to the effective date of such termination.
Any termination by the Corporation pursuant to Section 5(b)(ii),
5(b)(iii) or 5(b)(iv) hereof shall be communicated by written
Notice of Termination to the Executive. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice
which shall indicate the specific termination provision in this
Agreement relied upon, the date on which the termination shall be
effective (the "Termination Date"), and, if applicable, shall set
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment
under the provision so indicated.
6. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
(a) Death Benefits. If the Executive dies during
the term of his employment hereunder, in addition to any death
benefits payable under the terms of any life insurance policies
maintained by the Corporation on the life of the Executive, and
in addition to any death benefits payable on account of the death
of the Executive under the terms of any tax qualified retirement
plans maintained by the Corporation, the Corporation shall pay to
the estate of the Executive a death benefit equal to 50% of the
Executive's Base Salary at the rate in effect on the date of the
Executive's death, plus an amount equal to all the bonuses the
Executive would have received under Section 4 hereof assuming his
employment had continued through the end of the fiscal year of
the Corporation in which the Executive's death occurs.
(b) Disability. If the Executive's employment shall
be terminated pursuant to Section 5(b)(ii), the Corporation shall
pay to the Executive in equal monthly installments, for each
twelve month period beginning on the day immediately following
the date of such termination and any anniversary thereof (an
"Anniversary Date"), for the remainder of the Executive's life,
an amount equal to, his Base Salary, at the rate in effect on the
Termination Date up to a maximum of $200,000 per year (adjusted
as set forth below), less (i) the amounts payable to the
Executive pursuant to any pension, profit sharing, or disability
benefit plans maintained by the Corporation, (ii) the amounts of
all social security, retirement or disability benefits payable to
the Executive by any agency of the United States Government or
the State of New York for each such twelve month period and (iii)
the amounts payable to the Executive pursuant to any policies of
disability insurance maintained by the Corporation. On each
Anniversary Date, the $200,000 per Year limit set forth
hereinabove shall be adjusted on a cumulative basis for each
annual increase in the U. S. Department of Labor Bureau of Labor
Statistics Consumer Price Index for Urban Wage Earners and
Xxxxxxxx Xxxxxxx, Xxx Xxxx, Xxx Xxxx, 0000-00 = 100 measured
between the month prior to the first month in which such
compensation payments were made and the month prior to the
commencement of each such successive year.
(c) Cause. If the Executive's employment shall be
terminated pursuant to Section 5(b)(iii), the Corporation shall
pay the Executive any monthly installment of his Base Salary
which is accrued and unpaid as of the Termination Date at the
rate then in effect, and, thereafter, the Corporation shall have
no further obligation to pay the Executive any additional
compensation or bonuses, to provide any medical, life, disability
or other insurance benefits to the Executive hereunder, to pay
any retirement benefits to the Executive in excess of those
provided for by the terms of the tax qualified retirement plans
maintained by the Corporation as required by Section 6(f) hereof
or to pay any other benefits provided to the Executive hereunder;
(d) Without Cause. If the Executive's employment
shall be terminated pursuant to Section 5(b)(iv), the Corporation
shall pay to the Executive in one lump sum payment, an amount
equal to two and one-half (2.5) times the sum of (i) his Base
Salary at the rate then in effect and (ii) an amount equal to all
bonuses paid by the Corporation to the Executive during the
twelve (12) month period ending on the Termination Date and,
thereafter, except as otherwise provided in this Agreement, the
Corporation shall have no further obligation to pay the Executive
any additional compensation or bonuses, to pay any retirement
benefits to the Executive in excess of those provided for by the
terms of the tax qualified retirement plans maintained by the
Corporation as required by Section 6(f) hereof or to pay any
other benefits provided to the Executive hereunder;
(e) By Executive. If the Executive's employment shall be
terminated pursuant to Section 5(b)(v), the Corporation shall pay
the Executive any monthly installment of his Base Salary accrued
and unpaid as of the effective date of such termination at the
rate then in effect, and, thereafter, the Corporation shall have
no further obligation to pay the Executive any additional
compensation or bonuses, to provide any medical, life, disability
or other insurance benefits to the Executive hereunder, to pay
any retirement benefits to the Executive in excess of those
provided for by the terms of the tax qualified retirement plans
maintained by the Corporation as required by Section 6(f) hereof
or to pay any other benefits provided to the Executive hereunder.
(f) Guarantee of Pension Benefits. In addition to the
compensation and other termination benefits otherwise provided
for hereunder, unless the Executive's employment with the
Corporation is terminated pursuant to the provisions of Sections
5(b)(iii) or 5(b)(v) hereof, the Executive and/or his
beneficiaries shall be entitled to receive the retirement,
disability and death benefits they would have been entitled to
receive under the applicable provisions of the tax qualified
retirement plans maintained by the Corporation for salaried
employees including, without limitation, pension, profit sharing
or other comparable plans (individually a "Plan" and collectively
the "Plans") pursuant to the Plans' provisions as in effect at
the time of the termination of the Executive's employment but in
any event, computed without reference to (i) any limitations on
the amount of the Executive's compensation that may be taken into
account under the Plans pursuant to Section 401(a)(17) of the
Internal Revenue Code of 1986, as amended (the "Code"); and (ii)
any limitations on the amount of the annual benefit which may be
accrued by the Executive or which may be contributed on his
behalf under the Plans pursuant to Section 415 of the Code (the
restrictions described in (i) and (ii) above being hereinafter
collectively referred to as the "Restrictions"). At the time the
Executive or his beneficiaries is or are entitled to payment of
any benefits under the terms of any Plan, the Corporation shall,
unless the Executive's employment with the Corporation is
terminated pursuant to Sections 5(b)(iii) or 5(b)(v) hereof, pay
to the Executive, from its general assets, the difference between
the amount which would, but for the Restrictions, have been paid
to the Executive or his beneficiaries under the terms of such
Plan and the amount which is actually paid or payable to the
Executive or his beneficiaries under the terms of any such Plan.
Any amount payable to the Executive or his beneficiaries under
the terms of this paragraph shall be available for payment to the
Executive or his beneficiaries in any form provided for by the
applicable Plan and shall be paid to the Executive or his
beneficiaries in the form elected by the Executive or his
beneficiaries. The amount of retirement and death benefits which
would, but for the Restrictions, have been payable to the
Executive and his beneficiaries under the Plans shall be
determined using the actual number of years of service completed
by the Executive and the actual amount of compensation received
by the Executive as determined by the provisions of the
applicable Plan without regard to the Restrictions.
(g) Insurance. Subject to the provisions of the last
sentence of this Section 6(g), if the Executive's employment with
the Corporation is terminated other than pursuant to the
provisions of Sections 5(b)(iii) or 5(b)(v) hereof, the
Corporation shall pay all premiums needed to maintain policies of
(i) medical and life insurance for the benefit of the Executive
for the remainder of the Executive's life; (ii) medical insurance
for the benefit of the Executive's spouse for the remainder of
her life; and (iii) medical insurance for the benefit of the
Executive's dependents until each such dependent reaches age 21.
The amount of medical and life insurance coverage provided to the
Executive, and the amount of medical insurance coverage provided
to the Executive's spouse and dependents shall be the same as the
insurance coverage in effect for such individuals on the
Termination Date. If the Executive dies during the term of this
Agreement and his spouse or dependents are still living, the
Corporation shall continue to pay all premiums needed to continue
to provide medical insurance coverage for the Executive's spouse
for the remainder of the Executive's spouse's life, and for each
of the Executive's dependents until each such dependent reaches
age 21 at the same level of medical insurance coverage in effect
for such individuals prior to the date of the Executive's death.
For purposes of this Section 6(g), the term "dependents" shall
have the same meaning as contained in Section 152 of the Code.
The level of benefits provided hereunder (and the amount of
premiums required to provide such benefits) shall be adjusted to
reflect similar benefits provided from time to time to the
Executive, his spouse or his dependents from all other sources,
including from other employers.
7. CHANGE IN CONTROL. The Corporation and the Executive
acknowledge and agree that, pursuant to the terms of a Change in
Control Agreement made by and between the Executive and the
Corporation on and as of the date hereof (such agreement being
hereinafter referred to as the "Change in Control Agreement") the
Executive is entitled to receive certain payments following the
occurrence of a Change in Control of the Corporation (as such
term is defined in the Change in Control Agreement). The
Corporation and the Executive acknowledge and agree that nothing
in this Agreement shall be deemed or construed to limit, restrict
or otherwise impair the Executive's right to receive the payments
provided for by the Change in Control Agreement. In addition,
the Corporation and the Executive hereby acknowledge and agree
that nothing contained in the Change in Control Agreement shall
be deemed or construed to limit, restrict or otherwise impair the
Executive's rights to receive payment of the compensation and
other benefits provided by this Agreement and, accordingly, in
the even that a Change in Control (as defined in the Change in
Control Agreement) occurs, the Executive's rights to receive
payment of the compensation and benefits provided for by this
Agreement shall continue to be binding upon the Corporation (or,
if applicable, the successor to the Corporation) with the same
force and effect as if no such Change in Control had occurred.
8. NON-COMPETITION. In the event that the Corporation
terminates the Executive's employment under this Agreement
pursuant to Section 5(b)(iii) hereof or in the event the
Executive terminates his employment pursuant to Section 5(b)(v)
hereof, the Executive agrees that during a period of one (1) year
after the date of termination, the Executive will not, directly
or indirectly, own, manage, operate, control or participate in
the ownership, management, operation or control of, or be
connected as an officer, employee, partner, director or otherwise
with, or have any financial interest in, or aid or assist anyone
else in the conduct of, any business (a "Competitive Operation")
which competes with any business conducted by the Corporation or
with any group, division or subsidiary of the Corporation in any
geographic area where such business is being conducted at the
time of such termination. It is understood and agreed that, for
the purposes of the foregoing provisions of this Section 7:
(a) No business shall be deemed to be a business
conducted by the Corporation or any group, division or subsidiary
of the Corporation, unless not less than 10% of the Corporation's
consolidated gross sales and operating revenues, or net income,
is derived from, or not less than 10% of the Corporation's
consolidated assets are devoted to, such business;
No business conducted by any entity which employs the
Executive or in which he is interested or with which he is
connected or associated shall be deemed competitive with any
business conducted by the Corporation or any group, division, or
subsidiary of the Corporation unless such business is one from
which 10% or more of the Corporation's consolidated assets are
devoted; and
(b) No business which is conducted by the Corporation
at the time of the Executive's termination and which subsequently
is sold or discontinued by the Corporation shall, subsequent to
the date of such sale or discontinuance, be deemed to be a
Competitive Operation within the meaning of this Section 7.
Ownership by the Executive of 2% or less of the voting stock of
any publicly held corporation shall not constitute a violation
hereof.
9. AMENDMENTS. This Agreement may not be amended or
modified orally, and no provision hereof may be waived, except in
a writing signed by the parties hereto.
10. ASSIGNMENT. This Agreement cannot be assigned by
either party hereto except with the written consent of the other.
11. BINDING EFFECT. This Agreement shall be binding upon
and inure to the benefit of the personal representatives and
successors in interest of the Executive. In addition, this
Agreement shall be binding upon any successor (whether direct or
indirect, by purchase, merger, amalgamation or otherwise) to all
or substantially of the business and/or assets of the
Corporation. The Corporation expressly agrees that it shall have
no right, power or authority to consummate any sale of all or
substantially all the business and/or assets of the Corporation
or to consummate any merger, consolidation or other transaction
as a result of which all or substantially all the business and/or
assets of the Corporation are not owned by the Corporation or any
of its direct or indirect wholly owned subsidiaries unless the
party that will own all or substantially all the business and/or
assets of the Corporation following the consummation of such
transaction executes and delivers an agreement with the
Corporation expressly providing for the assumption by such party
of all of the Corporation's obligations under this Agreement;
provided that, notwithstanding the foregoing, no such agreement
shall be necessary to make the obligations of the Corporation
under the terms of this Agreement binding on such successor to
the business and/or assets of the Corporation.
12. CHOICE OF LAW. This Agreement shall be governed and
construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed wholly within
such slate except with respect to the internal affairs of the
Corporation and its stockholders, which shall be governed by the
Delaware General Corporation Law.
13. NOTICES. All notices and other communications given
pursuant to this Agreement shall be deemed to have been properly
given or delivered if hand-delivered, or if mailed, by certified
mail or registered mail postage prepaid, or by recognized
overnight delivery service addressed to the Executive at the
address set forth above or if to the Corporation, at the address
set forth above with a copy to the attention of Xxxxxx X. Xxxxxx,
General Counsel, 000 Xxxxxxxx Xxxxxxxx, Xxxxxxx, Xxx Xxxx 00000.
From time to time, either party may designate by written notice
any other address or party to which such notice or communication
or copies thereof shall be sent.
14. AMENDMENT OF ORIGINAL EMPLOYMENT AGREEMENT. This
Agreement amends and restates the provisions of the Original
Employment Agreement and as such, effective as of the date first
set forth above, this Agreement shall supercede the Original
Employment Agreement in its entirety and the Original Employment
Agreement shall have no further force or effect.
15. SEVERABILITY OF PROVISIONS. In case any one or more
of the provisions contained in this Agreement shall be invalid,
illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein
shall not in any way be affected or impaired thereby and this
Agreement shall be interpreted as if such invalid, illegal or
unenforceable provision was not contained herein.
IN WITNESS WHEREOF, the Executive and the Corporation have
caused this Agreement to be executed as of the day and year set
forth above.
GIBRALTAR STEEL CORPORATION
By: /x/ Xxxx X. Xxxxx
Xxxx X. Xxxxx,
Executive Vice President
/x/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
