CHANGE IN CONTROL AGREEMENT
A.M.
CASTLE & CO
THIS AGREEMENT (“Agreement”), made and entered
into this 9th day of August, 2007 (the “Effective Date”), by and between A.M.
Castle & Co., a Maryland corporation(the “Company”), and Xxxxxxx X. Xxxxx
(the “Executive”);
WITNESSETH THAT:
WHEREAS, the Company wishes to
assure itself of
the continuity of the Executive’s service and has determined that it is
appropriate that the Executive receive certain payments in the
event that the
Executive’s employment is involuntarily terminated following a change in
control
as more fully described below; and
WHEREAS, the Company and the Executive
accordingly desire to enter into this Agreement on the terms and
conditions set
forth below;
NOW, THEREFORE, in consideration
of the
premises and mutual covenants set forth herein, IT IS HEREBY AGREED,
by and
between the parties as follows:
1.
Relationship to Other Agreements. Unless and until a Change
of
Control (as defined in paragraph 3) occurs, no benefits or other
payments shall
be payable under this Agreement. If a Change of Control occurs during the
Term of this Agreement (as defined in paragraph 2), this Agreement
shall
supersede that certain Severance Agreement between the Company
and the
Executive, dated August 9, 2007 (the “Severance Agreement), and any and all
other agreements between the Executive and the Company regarding
the payment of
benefits upon a termination of the Executive’s employment with the
Company. If the Executive is entitled to severance pay or other benefits
pursuant to the terms of this Agreement, the Executive shall not
be eligible to
receive any severance pay or other benefits pursuant to the terms
of any other
severance agreement or arrangement of the Company (or any affiliate
of the
Company), including any arrangement of the Company (or any affiliate
of the
Company) providing benefits upon involuntary termination of employment.
2.
Agreement Term. The “Term” of this Agreement shall
begin on the
Effective Date and shall continue through the first one-year anniversary
of the
Effective Date; provided, however, that as of the first one-year
anniversary of
the Effective Date, and on each one-year anniversary thereafter,
the Term shall
automatically be extended for one additional year unless, not later
than 30 days
prior to such applicable anniversary date, either party shall have
given written
notice to the other party that it does not wish to extend the Term;
and
provided, further, that if a Change in Control shall have occurred
within 90
days of such termination dates, the Term of this Agreement shall
automatically
be deemed extended and shall continue for a period of twenty-four
calendar
months beyond the calendar month in which such Change in Control
occurs.
3.
Certain Definitions. In addition to terms otherwise
defined herein,
the following capitalized terms used in this Agreement shall have
the meanings
specified below:
(a)
Cause. The term “Cause” shall mean:
(i) Executive’s
willful theft or embezzlement, or willful attempted theft of embezzlement,
of
intangible assets or property of the Company;
(ii) Any
willful act
knowingly committed by Executive that subjects the Company or any
officer of the
Company to any criminal liability for such act;
(iii)
The
Executive’s engaging
in egregious misconduct involving serious moral turpitude to the
extent that, in
the reasonable judgment of the Company, the Executive’s credibility and
reputation no longer conform to the standard of the Company’s executives;
(iv) Gross
and willful
misconduct by Executive that results in a material injury to the
Company;
(v) Willful
dishonesty of Executive that results in a material injury to the
Company;
(vi) Willful
malfeasance by Executive, provided that such malfeasance, in fact,
has an
injurious effect on the Company;
(vii) Executive’s
willful insubordination or willful refusal to perform assigned
duties provided
that such assigned duties are consistent with the job duties of
the Executive
and that the Executive shall have an opportunity of 30 days after
notice from
the Company to cure any such act or failure to act;
(viii) Executive’s
material breach of this Agreement which continues for 30 days after notice
from the Company.
(b)
Change in Control. The term “Change in Control” shall mean any of
the following that occur after the Effective Date:
(i) Ownership,
whether direct or indirect, of shares in excess of twenty-five
percent (25%) of
the outstanding shares of common stock of the Company by a Person
(as that term
is used in Section 13(d)(3) or 14(d)(2) of the Exchange Act) other
than Xxxxxxx
Estates;
(ii) The
occurrence of any transaction relating to the Company required
to be described
pursuant to the requirements of Item 5(f) of Schedule 14(a) of
Regulation 14(a)
of the Securities Act of 1934 as promulgated by the Security and
Exchange
Commission; or
(iii) Any
change in
the composition of the Board of Directors of the Company (the “Board”) over a
two-year period which results in a majority of the then present
directors of the
Company not constituting a majority two years later, provided that
in making
such determination, directors who are elected by or upon the recommendation
of
the then current majority of the Board shall be excluded.
(c)
Code. The term “Code” means the Internal Revenue Code of 1986, as
amended.
(d)
Good Reason. The term “Good Reason” shall mean:
(i) a
material
diminution in the Executive’s base compensation;
(ii) a
material
diminution in the Executive’s authority, duties, or responsibilities;
(iii) a
material
diminution in the authority, duties, or responsibilities of the
person to whom
the Executive is required to report;
(iv) a
material
diminution in the budget over which the Executive retains authority;
(v) a
material
change in the geographic location at which the Executive must perform
services
for the Company; or
(vi) any
other
action or inaction that constitutes a material breach by the Company
of this
Agreement.
For purposes of this Agreement,
in order
for a termination of employment by the Executive to be considered
to be on
account of Good Reason, the following conditions must be met by
the
Executive:
(A) the
Executive provides written notice to the Company of the existence
of the
condition(s) described in this subparagraph (c) potentially constituting
Good
Reason within 90 days of the initial existence of such conditions,
and
(B) the
Company fails to remedy the conditions within 30 days of such notice,
and
(C) the
Executive actually terminates employment with the Company within
six months of
providing the notice described in this subparagraph (c).
(e)
Termination Date.
The
term “Termination Date” means the date on which the Executive’s employment with
the Company and its affiliates terminates for any reason, including
voluntary
resignation. If the Executive becomes employed by an entity into which the
Company has merged, or by the purchaser of substantially all of
the assets of
the Company, or by a successor to such entity or purchaser, a Termination
Date
shall not be treated as having occurred for purposes of this Agreement
until
such time as the Executive terminates employment with the successor
and its
affiliates (including, without limitation, the merged entity or
purchaser). If the Executive is transferred to employment with an
affiliate (including a successor to the Company, and regardless
of whether
before, on, or after a Change in Control), such transfer shall
not constitute a
Termination Date for purposes of this Agreement.
4.
Payments and Benefits. Subject to the terms and
conditions of this
Agreement, if the Executive’s employment is terminated during the Term of this
Agreement after a Change of Control (A) by the Company for a reason
other than
for Cause or (B) by the Executive for Good Reason, the Executive
shall be
entitled to:
(a)
lump sum severance payment equal to two times the Executive’s annual base salary
in effect immediately prior to the Termination Date.
(b)
a lump sum payment in an amount equal to the annual short-term
incentive
compensation to which the Executive would have been entitled had
he continued in
the employ of the Company through the last day of the calendar
year in which his
Termination Date occurs and had the applicable incentive target(s)
for such
calendar year been fully met, pro-rated for the number of days
during the
calendar year that the Executive was employed prior to the Termination
Date;
provided, however, that if the Executive’s Termination Date occurs after
June 30th of the calendar year, the Executive may elect, in
a
writing filed with the Company during the 7-day period immediately
following his
Termination Date, to have the amount payable to him under this
subparagraph (b)
calculated on the basis of the actual (rather than the target)
short-term
incentive compensation to which the Executive would have been entitled
had he
continued in the employ of the Company through the last day of
such calendar
year, which amount shall be pro-rated as set forth in this subparagraph
(b).
(c)
for each performance cycle for which an award to the Executive
is outstanding
under the Company’s long-term incentive compensation plan and with respect to
which the Executive has performed services at his Termination Date
for a period
greater than 50 percent of the total performance cycle, a lump
sum payment in an
amount equal to the long-term incentive compensation to which the
Executive
would have been entitled had he continued in the employ of the
Company through
the last day of such performance cycle and had the applicable incentive
targets
for such performance cycle been fully met, pro-rated for the number
of days
during the applicable performance cycle that the Executive was
employed prior to
the Termination Date.
(d)
if the Executive is vested in the Company’s tax-qualified defined benefit plan
at the time his employment terminates, he shall be entitled to
an amount equal
to the actuarial equivalent of the additional amount that Executive
would have
earned under such plan had he accumulated three(3) additional continuous
years
of service for benefit crediting purposes. Such amount shall be paid to
Executive in an actuarially equivalent cash lump sum at Executive’s normal
retirement age (as defined in such tax-qualified defined benefit
plan), unless
the Executive chooses the option provided under Code Section 409A
as outlined in
paragraph 8 herein.
(e)
continued health benefit coverage for the Executive and the Executive’s
qualified beneficiaries as provided in section 4980B of the Code
(“COBRA”)). Such COBRA continuation coverage shall be provided to the
Executive and the Executive’s qualified beneficiaries only if and to the extent
that the Executive (or his qualified beneficiaries, as applicable)
makes a
timely and proper election to be covered under COBRA and makes
timely payments
for the cost of such coverage; provided, however, that such COBRA
coverage shall
be at the Company’s expense for the period beginning on the day after the
Termination Date and ending on the earlier of (i) the first anniversary
of the
Termination Date or (ii) the date on which the Executive commences
employment
with another employer.
(f)
for the period beginning on the Termination Date and ending on
the earlier of
(i) the first anniversary of the Termination Date and (ii) the
date on which the
Executive commences employment with another employer, the Executive
shall be
permitted the use of a Company-owned or leased automobile on the
terms and
conditions set forth in the Company’s Automobile Policy.
For
the avoidance
of doubt, the Executive shall not be entitled to any benefits under
this
Agreement if his termination of employment occurs on account of
his death,
disability, or voluntary resignation (other than for Good Reason).
5.
Time of Payments. Provided that the conditions
of paragraph 6
(relating to waiver and release) have been satisfied, payments
pursuant to
subparagraphs 4(a), 4(b) and 4(c) shall be paid on March 1st of the
calendar year following the calendar year in which the Executive’s Termination
Date occurs or at such earlier date as may apply in accordance with the
following:
(a
) the payment pursuant to subparagraph 4(a) (relating to
severance pay) shall be paid within 10 days following the later
of (i) the
Executive’s Termination Date or (ii) the date on which the conditions of
paragraph 6 are satisfied; and
(b)
any payment pursuant to subparagraphs 4(b) and 4(c) (relating to
incentive
compensation) shall be made within 10 days following the later
of (i) the date
that the short-term incentive compensation would have been paid
if the
Executive’s Termination Date had not occurred, and (ii) the date on which
the
conditions of paragraph 6 are satisfied.
Notwithstanding
any other provision of this Agreement, if the requirements of paragraph
6 are
not satisfied on or before March 1st of the calendar year following
the calendar
year in which the Executive’s Termination Date occurs, the Executive shall not
be entitled to any payments or benefits under this Agreement.
6.
Waiver and Release. The Executive shall not
be entitled to any
payments or benefits under this Agreement unless and until the
Participant
executes and delivers to the Company a valid release of any and
all claims
against the Company and its affiliates in a form acceptable to
the Company and
the revocation period for such release has expired without revocation.
7.
Mitigation. The Executive shall not
be required to mitigate the
amount of any payment provided for in this Agreement by seeking
other employment
or otherwise. None of the Company or any of its affiliates shall be
entitled to set off against the amounts payable to the Executive
under this
Agreement any amounts owed to the Company or any of its affiliates
by the
Executive, any amounts earned by the Executive in other employment
after the
Termination Date, or any amounts which might have been earned by
the Executive
in other employment had he sought such other employment.
8.
Parachute Payments. The Company and the Executive
agree that
if any payment or benefit to which the Executive is entitled from
the Company,
any affiliate, or any trusts established by the Company or by any
affiliate
(whether or not payable under this Agreement) including, without
limitation, the
vesting of an option or other non-cash benefit or property (all
such payments,
benefits and vesting being referred to collectively as “Payments”) are subject
to the tax imposed by section 4999 of the Internal Revenue Code
of 1986 or any
successor provision to that section, then Executive may choose
to receive the
aggregate present value of those payments either:
(a)
three times Executive’s base amount less one dollar, or
(b)
the amount which yields the Executive the greatest after-tax amount
of payments
under this Agreement and any other plan, program or arrangement
with the Company
after taking into account all applicable taxes on those payments,
including, but
not limited to, the excise tax imposed under Section 4999 of the
Code.
(c)
The Executive shall be entitled to select the order in which payments
are to be
reduced in accordance with the preceding sentence. Determination of
whether Payments would result in the application of the tax imposed
by section
4999, and the amount of reduction that is necessary so that no
such tax would be
applied, shall be made, at the Company’s expense, by the independent accounting
firm employed by the Company immediately prior to the occurrence
of the Change
in Control.
9.
Withholding. All payments to the Executive
under this Agreement
will be subject to all applicable withholding of applicable taxes.
10.
Confidential Information. The Executive agrees that
during the
Agreement Term and at all times thereafter:
(a) Except
as may be required by the lawful order of a court or agency of
competent
jurisdiction, except as necessary to carry out his duties to the
Company and its
affiliates, or except to the extent that the Executive has express
authorization
from the Company, the Executive agrees to keep secret and confidential
indefinitely, all Confidential Information (as defined below),
and not to
disclose the same, either directly or indirectly, to any other
person, firm, or
business entity, or to use it in any way.
(b) To
the extent that any court or agency seeks to have the Executive
disclose
Confidential Information, he shall promptly inform the Company,
and he shall
take such reasonable steps to prevent disclosure of Confidential
Information
until the Company has been informed of such requested disclosure,
and the
Company has an opportunity to respond to such court or agency. To the
extent that the Executive obtains information on behalf of the
Company or any of
its affiliates that may be subject to attorney-client privilege
as to the
Company’s attorneys, the Executive shall take reasonable steps to maintain
the
confidentiality of such information and to preserve such privilege.
(c) Nothing
in the foregoing provisions of this paragraph 10 shall be construed
so as to
prevent the Executive from using, in connection with his employment
for himself
or an employer other than the Company or any of the affiliates,
knowledge which
was acquired by him during the course of his employment with the
Company and its
affiliates, and which is generally known to persons of his experience
in other
companies in the same industry.
(d) For
purposes of this Agreement, the term “Confidential Information” shall include
all non-public information (including, without limitation, information
regarding
litigation and pending litigation) concerning the Company and its
affiliates
which was acquired by or disclosed to the Executive during the
course of his
employment with the Company, or during the course of his consultation
with the
Company following the Termination Date.
(e)
This paragraph 10 shall not be construed to unreasonably restrict
the
Executive’s ability to disclose confidential information in an arbitration
proceeding or a court proceeding in connection with the assertion
of, or defense
against any claim of breach of this Agreement. If there is a dispute
between the Company and the Executive as to whether information may be disclosed
in accordance with this subparagraph (e), the matter shall be submitted
to the
arbitrators or the court (whichever is applicable) for decision.
11.
Competition. During the Term of the
Agreement and for a period of
12 months after termination of the Executive’s employment with the Company for
any reason, the Executive shall not, without the express written
consent of the
Chief Executive Officer of the Company:
(a) be
employed by, serve as a consultant to, or otherwise assist or directly
or
indirectly provide services to a Competitor (defined below) if:
(i) the services
that the Executive is to provide to the Competitor are the same
as, or
substantially similar to, any of the services that the Executive
provided to the
Company or its affiliates, and such services are to be provided
with respect to
any location in which the Company or an affiliate of the Company
has material
operations during the 12-month period prior to the Termination
Date, or with
respect to any location in which the Company or an affiliate of
the Company has
devoted material resources to establishing operations during the
12-month period
prior to the Termination Date; or (ii) the trade secrets, confidential
information, or proprietary information (including, without limitation,
confidential or proprietary methods) of the Company and its affiliates
to which
the Executive had access could reasonably be expected to benefit
the Competitor
if the Competitor were to obtain access to such secrets or information.
For purposes of this subparagraph (a), services provided by others
shall be
deemed to have been provided by the Executive if the Executive
had material
supervisory responsibilities with respect to the provision of such
services.
(b) solicit
or attempt to solicit any party who is then or, during the 12-month
period prior
to such solicitation or attempt by the Executive was (or was solicited
to
become), a customer or supplier of the Company, provided that the
restriction in
this subparagraph (b) shall not apply to any activity on behalf
of a business
that is not a Competitor.
(c) solicit,
entice, persuade or induce any individual who is employed by the
Company or its
affiliates (or was so employed within 90 days prior to the Executive’s action)
to terminate or refrain from renewing or extending such employment
or to become
employed by or enter into contractual relations with any other
individual or
entity other than the Company or its affiliates, and the Executive
shall not
approach any such employee for any such purpose or authorize or
knowingly
cooperate with the taking of any such actions by any other individual
or
entity.
(d) directly
or indirectly own an equity interest in any Competitor (other than
ownership of
5% or less of the outstanding stock of any corporation listed on
the New York
Stock Exchange or the American Stock Exchange or included in the
NASDAQ
System).
The
term
“Competitor” means any enterprise (including a person, firm or business, whether
or not incorporated) during any period in which it is materially
competitive in
any way with any business in which the Company or any of its affiliates
was
engaged during the 12-month period prior to the Executive’s termination of
employment. Upon the written request of the Executive, the Company’s Chief
Executive Officer will determine whether a business or other entity
constitutes
a “Competitor” for purposes of this paragraph and may require the Executive to
provide such information as the Chief Executive Officer determines
to be
necessary to make such determination. The current and continuing
effectiveness of such determination may be conditioned on the accuracy
of such
information, and on such other factors as the Chief Executive Officer
may
determine.
12.
Non-Disparagement. The Executive agrees that,
while he is employed
by the Company, and after his Termination Date, he shall not make
any false,
defamatory or disparaging statements about the Company, its affiliates,
or the
officers or directors of the Company or its affiliates that are
reasonably
likely to cause material damage to the Company, its affiliates,
or the officers
or directors of the Company or its affiliates. While the Executive is
employed by the Company, and after the Termination Date, the Company
agrees, on
behalf of itself and its affiliates, that neither the officers
nor the directors
of the Company or its affiliates shall make any false, defamatory
or disparaging
statements about the Executive that are reasonably likely to cause
material
damage to the Executive.
13.
Nonalienation. The interests of the Executive
under this Agreement
are not subject in any manner to anticipation, alienation, sale,
transfer,
assignment, pledge, encumbrance, attachment, or garnishment by
creditors of the
Executive or the Executive’s beneficiary.
14.
Amendment. This Agreement may be
amended or canceled only by mutual
agreement of the parties in writing without the consent of any
other
person. So long as the Executive lives, no person, other than the parties
hereto, shall have any rights under or interest in this Agreement
or the subject
matter hereof.
15.
Applicable Law. The provisions of this Agreement
shall be construed
in accordance with the laws of the State of Illinois, without regard
to the
conflict of law provisions of any state.
16.
Severability. The invalidity or unenforceability
of any provision
of this Agreement will not affect the validity or enforceability
of any other
provision of this Agreement, and this Agreement will be construed
as if such
invalid or unenforceable provision were omitted (but only to the
extent that
such provision cannot be appropriately reformed or modified).
17.
Obligation of Company. Except as otherwise specifically
provided in
this Agreement, nothing in this Agreement shall be construed to
affect the
Company’s right to modify the Executive’s position or duties, compensation, or
other terms of employment, or to terminate the Executive’s employment.
Nothing in this Agreement shall be construed to provide to Executive
any rights
upon termination of Executive’s employment with the Company other than as
specifically described in paragraph 4. If Executive’s employment is
terminated other than by the Company for Cause or by the Executive
for Good
Reason, the Executive’ benefits shall be determined in accordance with the
applicable retirement, insurance and other programs of the Company
as may then
be in effect.
18.
Waiver of Breach. No waiver by any party
hereto of a breach of any
provision of this Agreement by any other party, or of compliance
with any
condition or provision of this Agreement to be performed by such
other party,
will operate or be construed as a waiver of any subsequent breach
by such other
party of any similar or dissimilar provisions and conditions at
the same or any
prior or subsequent time. The failure of any party hereto to take any
action by reason of such breach will not deprive such party of
the right to take
action at any time while such breach continues.
19.
Successors, Assumption of
Contract. This Agreement is personal to
the Executive and may not be assigned by the Executive without
the written
consent of the Company. However, to the extent that rights or benefits
under this Agreement otherwise survive the Executive’s death, the Executive’s
heirs and estate shall succeed to such rights and benefits pursuant
to the
Executive’s will or the laws of descent and distribution. This Agreement
shall be binding upon and inure to the benefit of the Company and
any successor
of the Company and the Company will require any successor (whether
direct or
indirect, by purchase, merger, consolidation or otherwise) to all
or
substantially all of the business or assets of the Company to expressly
assume
and agree to perform this Agreement in the same manner and to the
same extent
that the Company would be required to perform it if no such succession
had taken
place.
20.
Notices. Notices and all other
communications provided for in this
Agreement shall be in writing and shall be delivered personally
or sent by
registered or certified mail, return receipt requested, postage
prepaid
(provided that international mail shall be sent via overnight or
two-day
delivery), or sent by facsimile or prepaid overnight courier to
the parties at
the addresses set forth below. Such notices, demands, claims and other
communications shall be deemed given:
(a)
in the case of delivery by overnight service with guaranteed next
day delivery,
the next day or the day designated for delivery;
(b)
in the case of certified or registered U.S. mail, five days after
deposit in the
U.S. mail; or
(c)
in the case of facsimile, the date upon which the transmitting
party received
confirmation of receipt by facsimile, telephone or otherwise;
provided,
however,
that in no event shall any such communications be deemed to be
given later than
the date they are actually received. Communications that are to be
delivered by the U.S. mail or by overnight service or two-day delivery
service
are to be delivered to the addresses set forth below:
to the Company:
A. M. Castle & Co.
0000 Xxxxx Xxxx Xxxx
Xxxxxxxx Xxxx, XX00000
Attn: Corporate Secretary
0000 Xxxxx Xxxx Xxxx
Xxxxxxxx Xxxx, XX00000
Attn: Corporate Secretary
or
to the
Executive:
Xxxxxxx
X.
Xxxxx
000 Xxxxxxxxxxx Xxxx
Xxxxxx, XX 00000
000 Xxxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Each
party, by
written notice furnished to the other party, may modify the applicable
delivery
address, except that notice of change of address shall be effective
only upon
receipt.
21.
Arbitration of All Disputes. Any controversy or claim
arising out
of or relating to this Agreement (or the breach thereof) shall
be settled by
final, binding and non-appealable arbitration in Illinois, by three
arbitrators. Except as otherwise expressly provided in this paragraph 21,
the arbitration shall be conducted in accordance with the rules
of the American
Arbitration Association (the “Association”) then in effect. One of the
arbitrators shall be appointed by the Company, one shall be appointed
by the
Executive, and the third shall be appointed by the first two arbitrators.
If the first two arbitrators cannot agree on the third arbitrator
within 30 days
of the appointment of the second arbitrator, then the third arbitrator
shall be
appointed by the Association.
22.
Survival of Agreement. Except as otherwise expressly
provided in
this Agreement, the rights and obligations of the parties to this
Agreement
shall survive the termination of the Executive’s employment with the
Company.
23.
Counterparts. This Agreement may be
executed in two or more
counterparts, any one of which shall be deemed the original without
reference to
the others.
IN WITNESS THEREOF, the Executive
has hereunto
set his hand, and the Company has caused these presents to be executed
in its
name and on its behalf, all as of the Effective Date.
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Executive:
|
|
/s/
Xxxxxxx X. Xxxxx
|
|
Chief
Operating Officer
|
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A.
M. Castle & Co.:
|
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By
/s/ Xxxxxxx X. Xxxxxxxx
|
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Its:
President & CEO
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SEVERANCE
AGREEMENT
A.M.
CASTLE & CO.
THIS AGREEMENT (“Agreement”), made and entered
into this 9th day of August, 2007 (the “Effective Date”), by and between A.M.
Castle & Co., a Maryland corporation(the “Company”), and Xxxxxxx X. Xxxxx
(the “Executive”);
WITNESSETH THAT:
WHEREAS, the Company wishes to
assure itself of
the continuity of the Executive’s service and has determined that it is
appropriate that the Executive receive certain payments in the
event of an
involuntary termination of employment; and
WHEREAS, the Company and the Executive
accordingly desire to enter into this Agreement on the terms and
conditions set
forth below;
NOW, THEREFORE, in consideration
of the
premises and mutual covenants set forth herein, IT IS HEREBY AGREED,
by and
between the parties as follows:
1.
Relationship to Other Agreements. Except as otherwise provided in
any other agreement between the Company and the Executive which
specifically
identifies this Agreement and specifically provides that it supersedes
this
Agreement, this Agreement shall supersede any and all other agreements
between
the Executive and the Company regarding the payment of benefits
upon a
termination of the Executive’s employment with the Company. If the
Executive is entitled to severance pay or other benefits pursuant
to the terms
of this Agreement, the Executive shall not be eligible to receive
any severance
pay or other benefits pursuant to the terms of any other severance
agreement or
arrangement of the Company (or any affiliate of the Company), including
any
arrangement of the Company (or any affiliate of the Company) providing
benefits
upon involuntary termination of employment.
2.
Agreement Term. The “Term” of this Agreement shall
begin on the
Effective Date and shall continue through the first one-year anniversary
of the
Effective Date; provided, however, that as of the first one-year
anniversary of
the Effective Date, and on each one-year anniversary thereafter,
the Term shall
automatically be extended for one additional year unless, not later
than 30 days
prior to such applicable anniversary date, either party shall have
given written
notice to the other party that it does not wish to extend the Term.
3.
Certain Definitions. In addition to terms otherwise
defined herein,
the following capitalized terms used in this Agreement shall have
the meanings
specified below:
(a)
Cause. The term “Cause” shall mean:
(i) Executive’s
willful theft or embezzlement, or willful attempted theft of embezzlement,
of
intangible assets or property of the Company;
(ii) Any
willful act knowingly committed by Executive that subjects the
Company or any
officer of the Company to any criminal liability for such act;
(iii) The
Executive’s engaging in egregious misconduct involving serious moral turpitude
to the extent that, in the reasonable judgment of the Company,
the Executive’s
credibility and reputation no longer conform to the standard of
the Company’s
executives;
(iv) Gross
and willful misconduct by Executive that results in a material
injury to the
Company;
(v) Willful
dishonesty of Executive that results in a material injury to the
Company;
(vi) Willful
malfeasance by Executive, provided that such malfeasance, in fact,
has an
injurious effect on the Company;
(vii) Executive’s
willful insubordination or willful refusal to perform assigned
duties provided
that such assigned duties are consistent with the job duties of
the Executive
and that the Executive shall have an opportunity of 30 days after
notice from
the Company to cure any such act or failure to act;
(viii) Executive’s
material breach of this Agreement which continues for 30 days after
notice from
the Company.
(b)
Code. The term “Code” means the Internal
Revenue Code of 1986, as
amended.
(c)
Good Reason. The term “Good Reason” shall mean:
(i) a
material diminution in the Executive’s base compensation;
(ii)
a material diminution in the Executive’s authority, duties, or
responsibilities;
(iii)
a material diminution in the authority, duties, or responsibilities
of the
person to whom the Executive is required to report;
(iv) a
material diminution in the budget over which the Executive retains
authority;
(v) a
material change in the geographic location at which the Executive
must perform
services for the Company; or
(vi) any
other action or inaction that constitutes a material breach by
the Company of
this Agreement.
For purposes of this Agreement,
in order for a
termination of employment by the Executive to be considered to
be on account of
Good Reason, the following conditions must by met by the Executive:
(A) the
Executive
provides written notice to the Company of the existence of the
condition(s)
described in this subparagraph (c) potentially constituting Good
Reason within
90 days of the initial existence of such condition(s), and
(B) the
Company
fails to remedy the conditions which the Executive outlines in
his written
notice within 30 days of such notice, and
(C) the
Executive
actually terminates employment with the Company within six months
of providing
the notice described in this subparagraph (c).
(d)
Termination Date. The term “Termination Date” means the date on
which the Executive’s employment with the Company and its affiliates terminates
for any reason, including voluntary resignation. If the Executive becomes
employed by an entity into which the Company has merged, or by
the purchaser of
substantially all of the assets of the Company, or by a successor
to such entity
or purchaser, a Termination Date shall not be treated as having
occurred for
purposes of this Agreement until such time as the Executive terminates
employment with the successor and its affiliates (including, without
limitation,
the merged entity or purchaser). If the Executive is transferred to
employment with an affiliate (including a successor to the Company),
such
transfer shall not constitute a Termination Date for purposes of
this
Agreement.
4.
Payments and Benefits. Subject to the terms and
conditions of this
Agreement, if the Executive’s employment is terminated during the Term of this
Agreement (A) by the Company for a reason other than for Cause
or (B) by the
Executive for Good Reason, the Executive shall be entitled to:
(a) a
lump sum severance payment equal to one times the Executive’s annual base salary
in effect immediately prior to the Termination Date.
(b) a
lump sum payment in an amount equal to the annual short-term incentive
compensation to which the Executive would have been entitled had
he continued in
the employ of the Company through the last day of the calendar
year in which the
Termination Date occurs and had the applicable incentive target(s)
for such
calendar year been fully met, pro-rated for the number of days
during the
calendar year that the Executive was employed prior to the Termination
Date;
provided, however, that if the Executive’s Termination Date occurs after
June 30th of the calendar year, the Executive may elect, in
a
writing filed with the Company during the 7-day period immediately
following his
Termination Date, to have the amount payable to him under this
subparagraph (b)
calculated on the basis of the actual (rather than the target)
short-term
incentive compensation to which the Executive would have been entitled
had he
continued in the employ of the Company through the last day of
such calendar
year, which amount shall be pro-rated as set forth in this subparagraph
(b).
(c)
with respect to any granted
but not awarded performance Stock pursuant to the
Company’s long term incentive plan, the 2005 to 2007 Restricted, Stock
Option
and Equity Plan, initiated on January 1, 2005 and terminating on December
31, 2007, Executive shall receive the entire lump sum of that grant
at
Termination; provided , however, that if the Executive’s Termination occurs
after June 30th of the calendar year, the Executive may elect, in
a
writing filed with the Company during the 7-day period immediately
following his
Termination Date, to have the amount payable to him under this
subparagraph (c)
calculated on the basis of the actual (rather than the target)
long-term
incentive compensation to which the Executive would have been entitled
had he
continued in the employ of the Company through the last day of
such calendar
year.
(d)
with respect to any granted
but not awarded Performance Stock or other long term
incentive compensation, a lump sum payment in an amount to which
the
Executive would have been entitled had he continued in the employ of the
Company through the last day of the calendar year in which the
Termination Date
occurs and had the applicable incentive target(s) for such calendar
year been
fully met, pro-rated for the number of days during the calendar
year that the
Executive was employed prior to the Termination Date; provided,
however, that if
the Executive’s Termination Date occurs after June 30th of the
calendar year, the Executive may elect, in a writing filed with
the Company
during the 7-day period immediately following his Termination Date,
to have the
amount payable to him under this subparagraph (c) calculated on
the basis of the
actual (rather than the target) long-term incentive compensation
to which the
Executive would have been entitled had he continued in the employ
of the Company
through the last day of such calendar year, which amount shall
be pro-rated as
set forth in this subparagraph (c).
(e) continued
health benefit coverage for the Executive and the Executive’s qualified
beneficiaries as provided in section 4980B of the Code (“COBRA”)). Such
COBRA continuation coverage shall be provided to the Executive
and the
Executive’s qualified beneficiaries only if and to the extent that the Executive
(or his qualified beneficiaries, as applicable) make a timely and
proper
election to be covered under COBRA and make timely payments for
the cost of such
coverage; provided, however, that such COBRA coverage shall be
at the Company’s
expense for the period beginning on the day after the Termination
Date and
ending on the earlier of (i) the first anniversary of the Termination
Date or
(ii) the date on which the Executive commences employment with
another
employer.
(f) for
the period beginning on the Termination Date and ending on the
earlier of (i)
the first anniversary of the Termination Date and (ii) the date
on which the
Executive commences employment with another employer, the Executive
shall be
permitted the use of a Company-owned or leased automobile on the
terms and
conditions set forth in the Company’s Automobile Policy.
For
the avoidance of doubt, the Executive shall not be entitled to
any benefits
under this Agreement if his termination of employment occurs on
account of his
death, disability, or voluntary resignation (other than for Good
Reason).
5.
Time of Payments. Provided that the conditions
of paragraph 6
(relating to waiver and release) have been satisfied, payments
pursuant to
subparagraphs 4(a) and 4(b) shall be paid no later than March 15th
of the
calendar year following the calendar year in which the Executive’s Termination
Date occurs or at such earlier date as may apply in accordance with the
following:
(a) the
payment pursuant to subparagraph 4(a) (relating to severance pay)
shall be paid
within 10 days following the later of (i) the Executive’s Termination Date or
(ii) the date on which the conditions of paragraph 6 are satisfied;
and
(b) the
payment pursuant to subparagraph 4(b) and (c)(relating to incentive
compensation) shall be made within 10 days following the later
of (i) the date
that the long-term and/or short-term incentive compensation would
have been paid
if the Participant’s Termination Date had not occurred, and (ii) the date on
which the conditions of paragraph 6 are satisfied.
Notwithstanding
any other provision of this Agreement, if the requirements of paragraph
6 are
not satisfied on or before March 1st of the calendar year following
the calendar
year in which the Executive’s Termination Date occurs, the Executive shall not
be entitled to any payments or benefits under this Agreement.
6.
Waiver and Release. The Executive shall not
be entitled to any
payments or benefits under this Agreement unless and until the
Participant
executes and delivers to the Company a valid release of any and
all claims
against the Company and its affiliates in a form acceptable to
the Company and
the revocation period for such release has expired without revocation.
7.
Mitigation. The Executive shall not
be required to mitigate the
amount of any payment provided for in this Agreement by seeking
other employment
or otherwise. None of the Company or any of its affiliates shall be
entitled to set off against the amounts payable to the Executive
under this
Agreement any amounts owed to the Company or any of its affiliates
by the
Executive, any amounts earned by the Executive in other employment
after the
Termination Date, or any amounts which might have been earned by
the Executive
in other employment had he sought such other employment.
8.
Parachute
Payments. The Company and the Executive agree that
if any payment or benefit to which the Executive is entitled from
the Company,
any affiliate, or any trusts established by the Company or by any
affiliate
(whether or not payable under this Agreement) including, without
limitation, the
vesting of an option or other non-cash benefit or property (all
such payments,
benefits and vesting being referred to collectively as “Payments”) are subject
to the tax imposed by section 4999 of the Internal Revenue Code
of 1986 or any
successor provision to that section, then the Payments shall be
reduced to the
extent required to avoid application of the tax imposed by Code
section
4999. The Executive shall be entitled to select the order in which
payments are to be reduced in accordance with the preceding sentence.
Determination of whether Payments would result in the application
of the tax
imposed by section 4999, and the amount of reduction that is necessary
so that
no such tax would be applied, shall be made, at the Company’s expense, by the
independent accounting firm employed by the Company on the Termination
Date.
9.
Withholding.
All payments
to the Executive under this Agreement
will be subject to all applicable withholding of applicable taxes.
10.
Confidential
Information. The Executive agrees that during the
Agreement Term and at all times thereafter:
(a) Except
as may be required by the lawful order of a court or agency of
competent
jurisdiction, except as necessary to carry out his duties to the
Company and its
affiliates, or except to the extent that the Executive has express
authorization
from the Company, the Executive agrees to keep secret and confidential
indefinitely, all Confidential Information (as defined below),
and not to
disclose the same, either directly or indirectly, to any other
person, firm, or
business entity, or to use it in any way.
(b) To
the extent that any court or agency seeks to have the Executive
disclose
Confidential Information, he shall promptly inform the Company,
and he shall
take such reasonable steps to prevent disclosure of Confidential
Information
until the Company has been informed of such requested disclosure,
and the
Company has an opportunity to respond to such court or agency. To the
extent that the Executive obtains information on behalf of the
Company or any of
its affiliates that may be subject to attorney-client privilege
as to the
Company’s attorneys, the Executive shall take reasonable steps to maintain
the
confidentiality of such information and to preserve such privilege.
(c) Nothing
in the foregoing provisions of this paragraph 10 shall be construed
so as to
prevent the Executive from using, in connection with his employment
for himself
or an employer other than the Company or any of the affiliates,
knowledge which
was acquired by him during the course of his employment with the
Company and its
affiliates, and which is generally known to persons of his experience
in other
companies in the same industry.
(d) For
purposes of this Agreement, the term “Confidential Information” shall include
all non-public information (including, without limitation, information
regarding
litigation and pending litigation) concerning the Company and its
affiliates
which was acquired by or disclosed to the Executive during the
course of his
employment with the Company, or during the course of his consultation
with the
Company following the Termination Date.
(e) This
paragraph 10 shall not be construed to unreasonably restrict the
Executive’s
ability to disclose confidential information in an arbitration
proceeding or a
court proceeding in connection with the assertion of, or defense
against any
claim of breach of this Agreement. If there is a dispute between the
Company and the Executive as to whether information may be disclosed
in
accordance with this subparagraph (e), the matter shall be submitted
to the
arbitrators or the court (whichever is applicable) for decision.
11.
Competition.
During
the Term of the Agreement and for a period of
12 months after termination of the Executive’s employment with the Company for
any reason, the Executive shall not, without the express written
consent of the
Chief Executive Officer of the Company:
(a) be
employed by, serve
as a consultant to, or otherwise assist or directly or indirectly
provide
services to a Competitor (defined below) if: (i) the services that
the Executive
is to provide to the Competitor are the same as, or substantially
similar to,
any of the services that the Executive provided to the Company
or its
affiliates, and such services are to be provided with respect to
any location in
which the Company or an affiliate of the Company has material operations
during
the 12-month period prior to the Termination Date, or with respect
to any
location in which the Company or an affiliate of the Company has
devoted
material resources to establishing operations during the 12-month
period prior
to the Termination Date; or (ii) the trade secrets, confidential
information, or
proprietary information (including, without limitation, confidential
or
proprietary methods) of the Company and its affiliates to which
the Executive
had access could reasonably be expected to benefit the Competitor
if the
Competitor were to obtain access to such secrets or information. For
purposes of this subparagraph (a), services provided by others
shall be deemed
to have been provided by the Executive if the Executive had material
supervisory
responsibilities with respect to the provision of such services.
(b) solicit
or attempt to
solicit any party who is then or, during the 12-month period prior
to such
solicitation or attempt by the Executive was (or was solicited
to become), a
customer or supplier of the Company, provided that the restriction
in this
subparagraph (b) shall not apply to any activity on behalf of a
business that is
not a Competitor.
(c) solicit,
entice,
persuade or induce any individual who is employed by the Company
or its
affiliates (or was so employed within 90 days prior to the Executive’s action)
to terminate or refrain from renewing or extending such employment
or to become
employed by or enter into contractual relations with any other
individual or
entity other than the Company or its affiliates, and the Executive
shall not
approach any such employee for any such purpose or authorize or
knowingly
cooperate with the taking of any such actions by any other individual
or
entity.
(d) directly
or
indirectly own an equity interest in any Competitor (other than
ownership of 5%
or less of the outstanding stock of any corporation listed on the
New York Stock
Exchange or the American Stock Exchange or included in the NASDAQ
System).
The
term
“Competitor” means any enterprise (including a person, firm or business, whether
or not incorporated) during any period in which it is materially
competitive in
any way with any business in which the Company or any of its affiliates
was
engaged during the 12-month period prior to the Executive’s termination of
employment. Upon the written request of the Executive, the Company’s Chief
Executive Officer will determine whether a business or other entity
constitutes
a “Competitor” for purposes of this paragraph and may require the Executive to
provide such information as the Chief Executive Officer determines
to be
necessary to make such determination. The current and
continuingeffectiveness of such determination may be conditioned
on the accuracy
of such information, and on such other factors as the Chief Executive
Officer
may determine.
12.
Non-Disparagement.
The Executive
agrees that, while he is employed
by the Company, and after his Termination Date, he shall not make
any false,
defamatory or disparaging statements about the Company, its affiliates,
or the
officers or directors of the Company or its affiliates that are
reasonably
likely to cause material damage to the Company, its affiliates,
or the officers
or directors of the Company or its affiliates. While the Executive is
employed by the Company, and after the Termination Date, the Company
agrees, on
behalf of itself and its affiliates, that neither the officers
nor the directors
of the Company or its affiliates shall make any false, defamatory
or disparaging
statements about the Executive that are reasonably likely to cause
material
damage to the Executive.
13.
Nonalienation.
The interests
of the Executive under this Agreement
are not subject in any manner to anticipation, alienation, sale,
transfer,
assignment, pledge, encumbrance, attachment, or garnishment by
creditors of the
Executive or the Executive’s beneficiary.
14.
Amendment.
This
Agreement may be amended or canceled only by mutual
agreement of the parties in writing without the consent of any
other
person. So long as the Executive lives, no person, other than the parties
hereto, shall have any rights under or interest in this Agreement
or the subject
matter hereof.
15.
Applicable
Law. The provisions of this Agreement shall be construed
in accordance with the laws of the State of Illinois, without regard
to the
conflict of law provisions of any state.
16.
Severability.
The invalidity
or unenforceability of any provision
of this Agreement will not affect the validity or enforceability
of any other
provision of this Agreement, and this Agreement will be construed
as if such
invalid or unenforceable provision were omitted (but only to the
extent that
such provision cannot be appropriately reformed or modified).
17.
Obligation
of Company. Except as otherwise specifically provided in
this Agreement, nothing in this Agreement shall be construed to
affect the
Company’s right to modify the Executive’s position or duties, compensation, or
other terms of employment, or to terminate the Executive’s employment.
Nothing in this Agreement shall be construed to provide to the
Executive any
rights upon termination of the Executive’s employment with the Company other
than as specifically described in paragraph 4. If the Executive’s
employment is terminated other than by the Company for Cause or
by the Executive
for Good Reason, the Executive’ benefits shall be determined in accordance with
the applicable retirement, insurance and other programs of the
Company as may
then be in effect.
18.
Waiver of
Breach. No waiver by any party hereto of a breach of any
provision of this Agreement by any other party, or of compliance
with any
condition or provision of this Agreement to be performed by such
other party,
will operate or be construed as a waiver of any subsequent breach
by such other
party of any similar or dissimilar provisions and conditions at
the same or any
prior or subsequent time. The failure of any party hereto to take any
action by reason of such breach will not deprive such party of
the right to take
action at any time while such breach continues.
19.
Successors,
Assumption of Contract. This Agreement is personal to
the Executive and may not be assigned by the Executive without
the written
consent of the Company. However, to the extent that rights or benefits
under this Agreement otherwise survive the Executive’s death, the Executive’s
heirs and estate shall succeed to such rights and benefits pursuant
to the
Executive’s will or the laws of descent and distribution. This Agreement
shall be binding upon and inure to the benefit of the Company and
any successor
of the Company and the Company will require any successor (whether
direct or
indirect, by purchase, merger, consolidation or otherwise) to all
or
substantially all of the business or assets of the Company to expressly
assume
and agree to perform this Agreement in the same manner and to the
same extent
that the Company would be required to perform it if no such succession
had taken
place.
20.
Notices.
Notices
and all other communications provided for in this
Agreement shall be in writing and shall be delivered personally
or sent by
registered or certified mail, return receipt requested, postage
prepaid
(provided that international mail shall be sent via overnight or
two-day
delivery), or sent by facsimile or prepaid overnight courier to
the parties at
the addresses set forth below. Such notices, demands, claims and other
communications shall be deemed given:
(a) in
the case of
delivery by overnight service with guaranteed next day delivery,
the next day or
the day designated for delivery;
(b) in
the case of
certified or registered U.S. mail, five days after deposit in the
U.S. mail;
or
(c) in
the case of
facsimile, the date upon which the transmitting party received
confirmation of
receipt by facsimile, telephone or otherwise;
provided,
however,
that in no event shall any such communications be deemed to be
given later than
the date they are actually received. Communications that are to be
delivered by the U.S. mail or by overnight service or two-day delivery
service
are to be delivered to the addresses set forth below:
to
the
Company:
A.M.Castle
& Co.
0000 Xxxxx Xxxx Xxxx
Xxxxxxxx Xxxx, XX00000
Attn: Corporate Secretary
0000 Xxxxx Xxxx Xxxx
Xxxxxxxx Xxxx, XX00000
Attn: Corporate Secretary
or
to the
Executive:
Xxxxxxx X.
Xxxxx
000 Xxxxxxxxxxx Xxxx
Xxxxxx, XX 00000
000 Xxxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Each
party, by
written notice furnished to the other party, may modify the applicable
delivery
address, except that notice of change of address shall be effective
only upon
receipt.
21.
Arbitration
of All Disputes. Any controversy or claim arising out
of or relating to this Agreement (or the breach thereof) shall
be settled by
final, binding and non-appealable arbitration in Illinois, by three
arbitrators. Except as otherwise expressly provided in this paragraph 21,
the arbitration shall be conducted in accordance with the rules
of the American
Arbitration Association (the “Association”) then in effect. One of the
arbitrators shall be appointed by the Company, one shall be appointed
by the
Executive, and the third shall be appointed by the first two arbitrators.
If the first two arbitrators cannot agree on the third arbitrator
within 30 days
of the appointment of the second arbitrator, then the third arbitrator
shall be
appointed by the Association.
22.
Survival
of Agreement. Except as otherwise expressly provided in
this Agreement, the rights and obligations of the parties to this
Agreement
shall survive the termination of the Executive’s employment with the
Company.
23.
Counterparts.
This
Agreement may be executed in two or more
counterparts, any one of which shall be deemed the original without
reference to
the others.
IN
WITNESS THEREOF, the Executive has hereunto set his hand, and the
Company has
caused these presents to be executed in its name and on its behalf,
all as of
the Effective Date.
|
Executive:
|
|
/s/
Xxxxxxx X. Xxxxx
|
|
Chief
Operating Officer
|
|
A.
M. Castle & Co.:
|
|
By
/s/ Xxxxxxx X. Xxxxxxxx
|
|
Its:
President & CEO
|
A.M.
CASTLE & CO.
THIS AGREEMENT (“Agreement”), made and entered
into this 9th day of August, 2007 (the “Effective Date”), by and between A.M.
Castle & Co., a Maryland corporation(the “Company”), and Xxxxxxxx X. Xxxx
(the “Executive”);
WITNESSETH THAT:
WHEREAS, the Company wishes to
assure itself of
the continuity of the Executive’s service and has determined that it is
appropriate that the Executive receive certain payments in the
event that the
Executive’s employment is involuntarily terminated following a change in
control
as more fully described below; and
WHEREAS, the Company and the Executive
accordingly desire to enter into this Agreement on the terms and
conditions set
forth below;
NOW, THEREFORE, in consideration
of the
premises and mutual covenants set forth herein, IT IS HEREBY AGREED,
by and
between the parties as follows:
1.
Relationship to Other Agreements. Unless and until a Change of
Control (as defined in paragraph 3) occurs, no benefits or other
payments shall
be payable under this Agreement. If a Change of Control occurs during the
Term of this Agreement (as defined in paragraph 2), this Agreement
shall
supersede that certain Severance Agreement between the Company
and the
Executive, dated August 9, 2007 (the “Severance Agreement), and any and all
other agreements between the Executive and the Company regarding
the payment of
benefits upon a termination of the Executive’s employment with the
Company. If the Executive is entitled to severance pay or other benefits
pursuant to the terms of this Agreement, the Executive shall not
be eligible to
receive any severance pay or other benefits pursuant to the terms
of any other
severance agreement or arrangement of the Company (or any affiliate
of the
Company), including any arrangement of the Company (or any affiliate
of the
Company) providing benefits upon involuntary termination of employment.
2.
Agreement Term. The “Term” of this Agreement shall
begin on the
Effective Date and shall continue through the first one-year anniversary
of the
Effective Date; provided, however, that as of the first one-year
anniversary of
the Effective Date, and on each one-year anniversary thereafter,
the Term shall
automatically be extended for one additional year unless, not later
than 30 days
prior to such applicable anniversary date, either party shall have
given written
notice to the other party that it does not wish to extend the Term;
and
provided, further, that if a Change in Control shall have occurred
within 90
days of such termination dates, the Term of this Agreement shall
automatically
be deemed extended and shall continue for a period of twenty-four
calendar
months beyond the calendar month in which such Change in Control
occurs.
3.
Certain Definitions. In addition to terms otherwise
defined herein,
the following capitalized terms used in this Agreement shall have
the meanings
specified below:
(a)
Cause. The term “Cause” shall mean:
(i)
Executive’s willful theft or embezzlement, or willful attempted theft of
embezzlement, of intangible assets or property of the Company;
(ii)
Any willful act knowingly committed by Executive that subjects
the Company or
any officer of the Company to any criminal liability for such act;
(iii)
The Executive’s engaging in egregious misconduct involving serious moral
turpitude to the extent that, in the reasonable judgment of the
Company, the
Executive’s credibility and reputation no longer conform to the standard
of the
Company’s executives;
(iv)
Gross and willful misconduct by Executive that results in a material
injury to
the Company;
(v)
Willful dishonesty of Executive that results in a material injury
to the
Company;
(vi)
Willful malfeasance by Executive, provided that such malfeasance,
in fact, has
an injurious effect on the Company;
(vii)
Executive’s willful insubordination or willful refusal to perform assigned
duties provided that such assigned duties are consistent with the
job duties of
the Executive and that the Executive shall have an opportunity
of 30 days after
notice from the Company to cure any such act or failure to act;
(viii)
Executive’s material breach of this Agreement which continues for 30 days
after notice from the Company.
(b)
Change in Control. The term “Change in Control” shall mean any of
the following that occur after the Effective Date:
(i)
Ownership, whether direct or indirect, of shares in excess of twenty-five
percent (25%) of the outstanding shares of common stock of the
Company by a
Person (as that term is used in Section 13(d)(3) or 14(d)(2) of
the Exchange
Act) other than Xxxxxxx Estates;
(ii)
The occurrence of any transaction relating to the Company required
to be
described pursuant to the requirements of Item 5(f) of Schedule
14(a) of
Regulation 14(a) of the Securities Act of 1934 as promulgated by
the Security
and Exchange Commission; or
(iii)
Any change in the composition of the Board of Directors of the
Company (the
“Board”) over a two-year period which results in a majority of the then
present
directors of the Company not constituting a majority two years
later, provided
that in making such determination, directors who are elected by
or upon the
recommendation of the then current majority of the Board shall
be
excluded.
(c)
Code. The term “Code” means the Internal Revenue Code of 1986, as
amended.
(d)
Good Reason. The term “Good Reason” shall mean:
(i)
a material diminution in the Executive’s base compensation;
(ii)
a material diminution in the Executive’s authority, duties, or
responsibilities;
(iii)
a material diminution in the authority, duties, or responsibilities
of the
person to whom the Executive is required to report;
(iv)
a material diminution in the budget over which the Executive retains
authority;
(v)
a material change in the geographic location at which the Executive
must perform
services for the Company; or
(vi)
any other action or inaction that constitutes a material breach
by the Company
of this Agreement.
For purposes of this Agreement,
in order
for a termination of employment by the Executive to be considered
to be on
account of Good Reason, the following conditions must be met by
the
Executive:
(D)
the Executive provides written notice to the Company of the existence
of the
condition(s) described in this subparagraph (c) potentially constituting
Good
Reason within 90 days of the initial existence of such conditions,
and
(E)
the Company fails to remedy the conditions within 30 days of such
notice, and
(F)
the Executive actually terminates employment with the Company within
six months
of providing the notice described in this subparagraph (c).
(e)
Termination Date.
The
term “Termination Date” means the date on which the Executive’s employment with
the Company and its affiliates terminates for any reason, including
voluntary
resignation. If the Executive becomes employed by an entity into which the
Company has merged, or by the purchaser of substantially all of
the assets of
the Company, or by a successor to such entity or purchaser, a Termination
Date
shall not be treated as having occurred for purposes of this Agreement
until
such time as the Executive terminates employment with the successor
and its
affiliates (including, without limitation, the merged entity or
purchaser). If the Executive is transferred to employment with an
affiliate (including a successor to the Company, and regardless
of whether
before, on, or after a Change in Control), such transfer shall
not constitute a
Termination Date for purposes of this Agreement.
4.
Payments and Benefits. Subject to the terms and
conditions of this
Agreement, if the Executive’s employment is terminated during the Term of this
Agreement after a Change of Control (A) by the Company for a reason
other than
for Cause or (B) by the Executive for Good Reason, the Executive
shall be
entitled to:
(a)
lump sum severance payment equal to two times the Executive’s annual base salary
in effect immediately prior to the Termination Date.
(b)
a lump sum payment in an amount equal to the annual short-term
incentive
compensation to which the Executive would have been entitled had
he continued in
the employ of the Company through the last day of the calendar
year in which his
Termination Date occurs and had the applicable incentive target(s)
for such
calendar year been fully met, pro-rated for the number of days
during the
calendar year that the Executive was employed prior to the Termination
Date;
provided, however, that if the Executive’s Termination Date occurs after
June 30th of the calendar year, the Executive may elect, in
a
writing filed with the Company during the 7-day period immediately
following his
Termination Date, to have the amount payable to him under this
subparagraph (b)
calculated on the basis of the actual (rather than the target)
short-term
incentive compensation to which the Executive would have been entitled
had he
continued in the employ of the Company through the last day of
such calendar
year, which amount shall be pro-rated as set forth in this subparagraph
(b).
(c)
for each performance cycle for which an award to the Executive
is outstanding
under the Company’s long-term incentive compensation plan and with respect to
which the Executive has performed services at his Termination Date
for a period
greater than 50 percent of the total performance cycle, a lump
sum payment in an
amount equal to the long-term incentive compensation to which the
Executive
would have been entitled had he continued in the employ of the
Company through
the last day of such performance cycle and had the applicable incentive
targets
for such performance cycle been fully met, pro-rated for the number
of days
during the applicable performance cycle that the Executive was
employed prior to
the Termination Date.
(d)
if the Executive is vested in the Company’s tax-qualified defined benefit plan
at the time his employment terminates, he shall be entitled to
an amount equal
to the actuarial equivalent of the additional amount that Executive
would have
earned under such plan had he accumulated three(3) additional continuous
years
of service for benefit crediting purposes. Such amount shall be paid to
Executive in an actuarially equivalent cash lump sum at Executive’s normal
retirement age (as defined in such tax-qualified defined benefit
plan), unless
the Executive chooses the option provided under Code Section 409A
as outlined in
paragraph 8 herein.
(e)
continued health benefit coverage for the Executive and the Executive’s
qualified beneficiaries as provided in section 4980B of the Code
(“COBRA”)). Such COBRA continuation coverage shall be provided to the
Executive and the Executive’s qualified beneficiaries only if and to the extent
that the Executive (or his qualified beneficiaries, as applicable)
makes a
timely and proper election to be covered under COBRA and makes
timely payments
for the cost of such coverage; provided, however, that such COBRA
coverage shall
be at the Company’s expense for the period beginning on the day after the
Termination Date and ending on the earlier of (i) the first anniversary
of the
Termination Date or (ii) the date on which the Executive commences
employment
with another employer.
(f)
for the period beginning on the Termination Date and ending on
the earlier of
(i) the first anniversary of the Termination Date and (ii) the
date on which the
Executive commences employment with another employer, the Executive
shall be
permitted the use of a Company-owned or leased automobile on the
terms and
conditions set forth in the Company’s Automobile Policy.
For
the avoidance
of doubt, the Executive shall not be entitled to any benefits under
this
Agreement if his termination of employment occurs on account of
his death,
disability, or voluntary resignation (other than for Good Reason).
5.
Time of Payments. Provided that the conditions
of paragraph 6
(relating to waiver and release) have been satisfied, payments
pursuant to
subparagraphs 4(a), 4(b) and 4(c) shall be paid on March 1st of the
calendar year following the calendar year in which the Executive’s Termination
Date occurs or at such earlier date as may apply in accordance with the
following:
(a
) the payment pursuant to subparagraph 4(a) (relating to
severance pay) shall be paid within 10 days following the later
of (i) the
Executive’s Termination Date or (ii) the date on which the conditions of
paragraph 6 are satisfied; and
(b)
any payment pursuant to subparagraphs 4(b) and 4(c) (relating to
incentive
compensation) shall be made within 10 days following the later
of (i) the date
that the short-term incentive compensation would have been paid
if the
Executive’s Termination Date had not occurred, and (ii) the date on which
the
conditions of paragraph 6 are satisfied.
Notwithstanding
any other provision of this Agreement, if the requirements of paragraph
6 are
not satisfied on or before March 1st of the calendar year following
the calendar
year in which the Executive’s Termination Date occurs, the Executive shall not
be entitled to any payments or benefits under this Agreement.
6.
Waiver and Release. The Executive shall not
be entitled to any
payments or benefits under this Agreement unless and until the
Participant
executes and delivers to the Company a valid release of any and
all claims
against the Company and its affiliates in a form acceptable to
the Company and
the revocation period for such release hasexpired without revocation.
7.
Mitigation. The Executive shall not
be required to mitigate the
amount of any payment provided for in this Agreement by seeking
other employment
or otherwise. None of the Company or any of its affiliates shall be
entitled to set off against the amounts payable to the Executive
under this
Agreement any amounts owed to the Company or any of its affiliates
by the
Executive, any amounts earned by the Executive in other employment
after the
Termination Date, or any amounts which might have been earned by
the Executive
in other employment had he sought such other employment.
8.
Parachute Payments. The Company and the Executive
agree that
if any payment or benefit to which the Executive is entitled from
the Company,
any affiliate, or any trusts established by the Company or by any
affiliate
(whether or not payable under this Agreement) including, without
limitation, the
vesting of an option or other non-cash benefit or property (all
such payments,
benefits and vesting being referred to collectively as “Payments”) are subject
to the tax imposed by section 4999 of the Internal Revenue Code
of 1986 or any
successor provision to that section, then Executive may choose
to receive the
aggregate present value of those payments either:
(a)
three times Executive’s base amount less one dollar, or
(b)
the amount which yields the Executive the greatest after-tax amount
of payments
under this Agreement and any other plan, program or arrangement
with the Company
after taking into account all applicable taxes on those payments,
including, but
not limited to, the excise tax imposed under Section 4999 of the
Code.
(c)
The Executive shall be entitled to select the order in which payments
are to be
reduced in accordance with the preceding sentence. Determination of
whether Payments would result in the application of the tax imposed
by section
4999, and the amount of reduction that is necessary so that no
such tax would be
applied, shall be made, at the Company’s expense, by the independent accounting
firm employed by the Company immediately prior to the occurrence
of the Change
in Control.
9.
Withholding. All payments to the Executive
under this Agreement
will be subject to all applicable withholding of applicable taxes.
10.
Confidential Information. The Executive agrees that
during the
Agreement Term and at all times thereafter:
(a)
Except as may be required by the lawful order of a court or agency
of competent
jurisdiction, except as necessary to carry out his duties to the
Company and its
affiliates, or except to the extent that the Executive has express
authorization
from the Company, the Executive agrees to keep secret and confidential
indefinitely, all Confidential Information (as defined below),
and not to
disclose the same, either directly or indirectly, to any other
person, firm, or
business entity, or to use it in any way.
(b)
To the extent that any court or agency seeks to have the Executive
disclose
Confidential Information, he shall promptly inform the Company,
and he shall
take such reasonable steps to prevent disclosure of Confidential
Information
until the Company has been informed of such requested disclosure,
and the
Company has an opportunity to respond to such court or agency. To the
extent that the Executive obtains information on behalf of the
Company or any of
its affiliates that may be subject to attorney-client privilege
as to the
Company’s attorneys, the Executive shall take reasonable steps to maintain
the
confidentiality of such information and to preserve such privilege.
(c)
Nothing in the foregoing provisions of this paragraph 10 shall
be construed so
as to prevent the Executive from using, in connection with his
employment for
himself or an employer other than the Company or any of the affiliates,
knowledge which was acquired by him during the course of his employment
with the
Company and its affiliates, and which is generally known to persons
of his
experience in other companies in the same industry.
(d)
For purposes of this Agreement, the term “Confidential Information” shall
include all non-public information (including, without limitation,
information
regarding litigation and pending litigation) concerning the Company
and its
affiliates which was acquired by or disclosed to the Executive
during the course
of his employment with the Company, or during the course of his
consultation
with the Company following the Termination Date.
(e)
This paragraph 10 shall not be construed to unreasonably restrict
the
Executive’s ability to disclose confidential information in an arbitration
proceeding or a court proceeding in connection with the assertion
of, or defense
against any claim of breach of this Agreement. If there is a dispute
between the Company and the Executive as to whether information
may be disclosed
in accordance with this subparagraph (e), the matter shall be submitted
to the
arbitrators or the court (whichever is applicable) for decision.
11.
Competition. During the Term of the
Agreement and for a period of
12 months after termination of the Executive’s employment with the Company for
any reason, the Executive shall not, without the express written
consent of the
Chief Executive Officer of the Company:
(a) be
employed by, serve as a consultant to, or otherwise assist or directly
or
indirectly provide services to a Competitor (defined below) if:
(i) the services
that the Executive is to provide to the Competitor are the same
as, or
substantially similar to, any of the services that the Executive
provided to the
Company or its affiliates, and such services are to be provided
with respect to
any location in which the Company or an affiliate of the Company
has material
operations during the 12-month period prior to the Termination
Date, or with
respect to any location in which the Company or an affiliate of
the Company has
devoted material resources to establishing operations during the
12-month period
prior to the Termination Date; or (ii) the trade secrets, confidential
information, or proprietary information (including, without limitation,
confidential or proprietary methods) of the Company and its affiliates
to which
the Executive had access could reasonably be expected to benefit
the Competitor
if the Competitor were to obtain access to such secrets or information.
For purposes of this subparagraph (a), services provided by others
shall be
deemed to have been provided by the Executive if the Executive
had material
supervisory responsibilities with respect to the provision of such
services.
(b) solicit
or attempt to solicit any party who is then or, during the 12-month
period prior
to such solicitation or attempt by the Executive was (or was solicited
to
become), a customer or supplier of the Company, provided that the
restriction in
this subparagraph (b) shall not apply to any activity on behalf
of a business
that is not a Competitor.
(c) solicit,
entice, persuade or induce any individual who is employed by the
Company or its
affiliates (or was so employed within 90 days prior to the Executive’s action)
to terminate or refrain from renewing or extending such employment
or to become
employed by or enter into contractual relations with any other
individual or
entity other than the Company or its affiliates, and the Executive
shall not
approach any such employee for any such purpose or authorize or
knowingly
cooperate with the taking of any such actions by any other individual
or
entity.
(d) directly
or indirectly own an equity interest in any Competitor (other than
ownership of
5% or less of the outstanding stock of any corporation listed on
the New York
Stock Exchange or the American Stock Exchange or included in the
NASDAQ
System).
The
term
“Competitor” means any enterprise (including a person, firm or business, whether
or not incorporated) during any period in which it is materially
competitive in
any way with any business in which the Company or any of its affiliates
was
engaged during the 12-month period prior to the Executive’s termination of
employment. Upon the written request of the Executive, the Company’s Chief
Executive Officer will determine whether a business or other entity
constitutes
a “Competitor” for purposes of this paragraph and may require the Executive to
provide such information as the Chief Executive Officer determines
to be
necessary to make such determination. The current and continuing
effectiveness of such determination may be conditioned on the accuracy
of such
information, and on such other factors as the Chief Executive Officer
may
determine.
12.
Non-Disparagement. The Executive agrees that,
while he is employed
by the Company, and after his Termination Date, he shall not make
any false,
defamatory or disparaging statements about the Company, its affiliates,
or the
officers or directors of the Company or its affiliates that are
reasonably
likely to cause material damage to the Company, its affiliates,
or the officers
or directors of the Company or its affiliates. While the Executive is
employed by the Company, and after the Termination Date, the Company
agrees, on
behalf of itself and its affiliates, that neither the officers
nor the directors
of the Company or its affiliates shall make any false, defamatory
or disparaging
statements about the Executive that are reasonably likely to cause
material
damage to the Executive.
13.
Nonalienation. The interests of the Executive
under this Agreement
are not subject in any manner to anticipation, alienation, sale,
transfer,
assignment, pledge, encumbrance, attachment, or garnishment by
creditors of the
Executive or the Executive’s beneficiary.
14.
Amendment. This Agreement may be
amended or canceled only by mutual
agreement of the parties in writing without the consent of any
other
person. So long as the Executive lives, no person, other than the parties
hereto, shall have any rights under or interest in this Agreement
or the subject
matter hereof.
15.
Applicable Law. The provisions of this Agreement
shall be construed
in accordance with the laws of the State of Illinois, without regard
to the
conflict of law provisions of any state.
16.
Severability. The invalidity or unenforceability
of any provision
of this Agreement will not affect the validity or enforceability
of any other
provision of this Agreement, and this Agreement will be construed
as if such
invalid or unenforceable provision were omitted (but only to the
extent that
such provision cannot be appropriately reformed or modified).
17.
Obligation of Company. Except as otherwise specifically
provided in
this Agreement, nothing in this Agreement shall be construed to
affect the
Company’s right to modify the Executive’s position or duties, compensation, or
other terms of employment, or to terminate the Executive’s employment.
Nothing in this Agreement shall be construed to provide to Executive
any rights
upon termination of Executive’s employment with the Company other than as
specifically described in paragraph 4. If Executive’s employment is
terminated other than by the Company for Cause or by the Executive
for Good
Reason, the Executive’ benefits shall be determined in accordance with the
applicable retirement, insurance and other programs of the Company
as may then
be in effect.
18.
Waiver of Breach. No waiver by any party
hereto of a breach of any
provision of this Agreement by any other party, or of compliance
with any
condition or provision of this Agreement to be performed by such
other party,
will operate or be construed as a waiver of any subsequent breach
by such other
party of any similar or dissimilar provisions and conditions at
the same or any
prior or subsequent time. The failure of any party hereto to take any
action by reason of such breach will not deprive such party of
the right to take
action at any time while such breach continues.
19.
Successors, Assumption of
Contract. This Agreement is personal to
the Executive and may not be assigned by the Executive without
the written
consent of the Company. However, to the extent that rights or benefits
under this Agreement otherwise survive the Executive’s death, the Executive’s
heirs and estate shall succeed to such rights and benefits pursuant
to the
Executive’s will or the laws of descent and distribution. This Agreement
shall be binding upon and inure to the benefit of the Company and
any successor
of the Company and the Company will require any successor (whether
direct or
indirect, by purchase, merger, consolidation or otherwise) to all
or
substantially all of the business or assets of the Company to expressly
assume
and agree to perform this Agreement in the same manner and to the
same extent
that the Company would be required to perform it if no such succession
had taken
place.
20.
Notices. Notices and all other
communications provided for in this
Agreement shall be in writing and shall be delivered personally
or sent by
registered or certified mail, return receipt requested, postage
prepaid
(provided that international mail shall be sent via overnight or
two-day
delivery), or sent by facsimile or prepaid overnight courier to
the parties at
the addresses set forth below. Such notices, demands, claims and other
communications shall be deemed given:
(a)
in the case of delivery by overnight service with guaranteed next
day delivery,
the next day or the day designated for delivery;
(b)
in the case of certified or registered U.S. mail, five days after
deposit in the
U.S. mail; or
(c)
in the case of facsimile, the date upon which the transmitting
party received
confirmation of receipt by facsimile, telephone or otherwise;
provided,
however,
that in no event shall any such communications be deemed to be
given later than
the date they are actually received. Communications that are to be
delivered by the U.S. mail or by overnight service or two-day delivery
service
are to be delivered to the addresses set forth below:
to
the
Company:
A. M. Castle & Co.
0000 Xxxxx Xxxx Xxxx
Xxxxxxxx Xxxx, XX00000
Attn: Corporate Secretary
0000 Xxxxx Xxxx Xxxx
Xxxxxxxx Xxxx, XX00000
Attn: Corporate Secretary
or
to the
Executive:
Xxxxxxxx X.
Xxxx
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX00000
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX00000
Each
party, by
written notice furnished to the other party, may modify the applicable
delivery
address, except that notice of change of address shall be effective
only upon
receipt.
21.
Arbitration of All Disputes. Any controversy or claim
arising out
of or relating to this Agreement (or the breach thereof) shall
be settled by
final, binding and non-appealable arbitration in Illinois, by three
arbitrators. Except as otherwise expressly provided in this paragraph 21,
the arbitration shall be conducted in accordance with the rules
of the American
Arbitration Association (the “Association”) then in effect. One of the
arbitrators shall be appointed by the Company, one shall be appointed
by the
Executive, and the third shall be appointed by the first two arbitrators.
If the first two arbitrators cannot agree on the third arbitrator
within 30 days
of the appointment of the second arbitrator, then the third arbitrator
shall be
appointed by the Association.
22.
Survival of Agreement. Except as otherwise expressly
provided in
this Agreement, the rights and obligations of the parties to this
Agreement
shall survive the termination of the Executive’s employment with the
Company.
23.
Counterparts. This Agreement may be
executed in two or more
counterparts, any one of which shall be deemed the original without
reference to
the others.
IN WITNESS THEREOF, the Executive
has hereunto
set his hand, and the Company has caused these presents to be executed
in its
name and on its behalf, all as of the Effective Date.
|
Executive:
|
|
/s/
Xxxxxxxx X. Xxxx
|
|
Chief
Financial Officer
|
|
A.
M. Castle & Co.:
|
|
By
/s/ Xxxxxxx X. Xxxxxxxx
|
|
Its:
President & CEO
|
SEVERANCE
AGREEMENT
A.M.
CASTLE & CO.
THIS AGREEMENT (“Agreement”), made and entered
into this 9th day of August, 2007 (the “Effective Date”), by and between A.M.
Castle & Co., a Maryland corporation(the “Company”), and Xxxxxxxx X. Xxxx
(the “Executive”);
WITNESSETH THAT:
WHEREAS, the Company wishes to assure
itself of
the continuity of the Executive’s service and has determined that it is
appropriate that the Executive receive certain payments in the event
of an
involuntary termination of employment; and
WHEREAS, the Company and the Executive
accordingly desire to enter into this Agreement on the terms and
conditions set
forth below;
NOW, THEREFORE, in consideration
of the
premises and mutual covenants set forth herein, IT IS HEREBY AGREED,
by and
between the parties as follows:
1.
Relationship to Other Agreements. Except as otherwise provided in
any other agreement between the Company and the Executive which specifically
identifies this Agreement and specifically provides that it supersedes
this
Agreement, this Agreement shall supersede any and all other agreements
between
the Executive and the Company regarding the payment of benefits upon
a
termination of the Executive’s employment with the Company. If the
Executive is entitled to severance pay or other benefits pursuant
to the terms
of this Agreement, the Executive shall not be eligible to receive
any severance
pay or other benefits pursuant to the terms of any other severance
agreement or
arrangement of the Company (or any affiliate of the Company), including
any
arrangement of the Company (or any affiliate of the Company) providing
benefits
upon involuntary termination of employment.
2.
Agreement Term. The “Term” of this Agreement shall
begin on the
Effective Date and shall continue through the first one-year anniversary
of the
Effective Date; provided, however, that as of the first one-year
anniversary of
the Effective Date, and on each one-year anniversary thereafter,
the Term shall
automatically be extended for one additional year unless, not later
than 30 days
prior to such applicable anniversary date, either party shall have
given written
notice to the other party that it does not wish to extend the Term.
3.
Certain Definitions. In addition to terms otherwise
defined herein,
the following capitalized terms used in this Agreement shall have
the meanings
specified below:
(a)
Cause. The term “Cause” shall mean:
(i)
Executive’s willful theft or embezzlement, or willful attempted theft of
embezzlement, of intangible assets or property of the Company;
(ii)
Any willful act knowingly committed by Executive that subjects the
Company or
any officer of the Company to any criminal liability for such act;
(iii)
The Executive’s engaging in egregious misconduct involving serious moral
turpitude to the extent that, in the reasonable judgment of the Company,
the
Executive’s credibility and reputation no longer conform to the standard of
the
Company’s executives;
(iv)
Gross and willful misconduct by Executive that results in a material
injury to
the Company;
(v)
Willful dishonesty of Executive that results in a material injury
to the
Company;
(vi)
Willful malfeasance by Executive, provided that such malfeasance,
in fact, has
an injurious effect on the Company;
(vii)
Executive’s willful insubordination or willful refusal to perform assigned
duties provided that such assigned duties are consistent with the
job duties of
the Executive and that the Executive shall have an opportunity of
30 days after
notice from the Company to cure any such act or failure to act;
(viii)
Executive’s material breach of this Agreement which continues for 30 days after
notice from the Company.
(b) Code.
The term “Code” means the Internal Revenue
Code of 1986, as amended.
(c) Good
Reason. The term “Good Reason” shall mean:
(i)
a material diminution in the Executive’s base compensation;
(ii)
a material diminution in the Executive’s authority, duties, or
responsibilities;
(iii)
a material diminution in the authority, duties, or responsibilities
of the
person to whom the Executive is required to report;
(iv)
a material diminution in the budget over which the Executive retains
authority;
(v)
a material change in the geographic location at which the Executive
must perform
services for the Company; or
(vi)
any other action or inaction that constitutes a material breach by
the Company
of this Agreement.
For purposes of this Agreement, in
order for
a termination of employment by the Executive to be considered to be
on
account of Good Reason, the following conditions must be met by the
Executive:
(A)
the
Executive provides written notice to the Company of the existence
of the
condition(s) described in this subparagraph (c) potentially constituting
Good
Reason within 90 days of the initial existence of such condition(s),
and
(B)
the
Company fails to remedy the conditions which the Executive outlines
in his
written notice within 30 days of such notice, and
(C)
the
Executive actually terminates employment with the Company within
six months of
providing the notice described in this subparagraph (c).
(d)
Termination Date. The term “Termination Date” means the date on
which the Executive’s employment with the Company and its affiliates terminates
for any reason, including voluntary resignation. If the Executive becomes
employed by an entity into which the Company has merged, or by the
purchaser of
substantially all of the assets of the Company, or by a successor
to such entity
or purchaser, a Termination Date shall not be treated as having occurred
for
purposes of this Agreement until such time as the Executive terminates
employment with the successor and its affiliates (including, without
limitation,
the merged entity or purchaser). If the Executive is transferred to
employment with an affiliate (including a successor to the Company),
such
transfer shall not constitute a Termination Date for purposes of
this
Agreement.
4.
Payments and Benefits. Subject to the terms and
conditions of this
Agreement, if the Executive’s employment is terminated during the Term of this
Agreement (A) by the Company for a reason other than for Cause or
(B) by the
Executive for Good Reason, the Executive shall be entitled to:
(a)
a lump sum severance payment
equal to one times the Executive’s annual base
salary in effect immediately prior to the Termination Date.
(b)
a lump sum payment in an amount
equal to the annual short-term incentive
compensation to which the Executive would have been entitled had
he continued in
the employ of the Company through the last day of the calendar year
in which the
Termination Date occurs and had the applicable incentive target(s)
for such
calendar year been fully met, pro-rated for the number of days during
the
calendar year that the Executive was employed prior to the Termination
Date;
provided, however, that if the Executive’s Termination Date occurs after
June 30th of the calendar year, the Executive may elect, in a
writing filed with the Company during the 7-day period immediately
following his
Termination Date, to have the amount payable to him under this subparagraph
(b)
calculated on the basis of the actual (rather than the target) short-term
incentive compensation to which the Executive would have been entitled
had he
continued in the employ of the Company through the last day of such
calendar
year, which amount shall be pro-rated as set forth in this subparagraph
(b).
(c)
with respect to any granted
but not awarded performance Stock pursuant to the
Company’s long term incentive plan, the 2005 to 2007 Restricted, Stock Option
and Equity Plan, initiated on January 1, 2005 and terminating on December
31, 2007, Executive shall receive the entire lump sum of that grant
at
Termination; provided , however, that if the Executive’s Termination occurs
after June 30th of the calendar year, the Executive may elect, in a
writing filed with the Company during the 7-day period immediately
following his
Termination Date, to have the amount payable to him under this subparagraph
(c)
calculated on the basis of the actual (rather than the target) long-term
incentive compensation to which the Executive would have been entitled
had he
continued in the employ of the Company through the last day of such
calendar
year.
(d)
with respect to any granted
but not awarded Performance Stock or other long term
incentive compensation initiated on a date subsequent to the 2005
to 2007
Restricted Stock Option and Equity Plan inititaion period starting
January 1,
2005, a lump sum payment in an amount to which the Executive would have
been entitled had he continued in the employ of the Company through
the last day
of the calendar year in which the Termination Date occurs and had
the applicable
incentive target(s) for such calendar year been fully met, pro-rated
for the
number of days during the calendar year that the Executive was employed
prior to
the Termination Date; provided, however, that if the Executive’s Termination
Date occurs after June 30th of the calendar year, the Executive may
elect, in a writing filed with the Company during the 7-day period
immediately
following his Termination Date, to have the amount payable to him
under this
subparagraph (c) calculated on the basis of the actual (rather than
the target)
long-term incentive compensation to which the Executive would have
been entitled
had he continued in the employ of the Company through the last day
of such
calendar year, which amount shall be pro-rated as set forth in this
subparagraph
(c).
(e) continued
health benefit coverage for the Executive and the Executive’s qualified
beneficiaries as provided in section 4980B of the Code (“COBRA”)). Such
COBRA continuation coverage shall be provided to the Executive and
the
Executive’s qualified beneficiaries only if and to the extent that the Executive
(or his qualified beneficiaries, as applicable) make a timely and
proper
election to be covered under COBRA and make timely payments for the
cost of such
coverage; provided, however, that such COBRA coverage shall be at
the Company’s
expense for the period beginning on the day after the Termination
Date and
ending on the earlier of (i) the first anniversary of the Termination
Date or
(ii) the date on which the Executive commences employment with another
employer.
(f) for
the period beginning on the Termination Date and ending on the earlier
of (i)
the first anniversary of the Termination Date and (ii) the date on
which the
Executive commences employment with another employer, the Executive
shall be
permitted the use of a Company-owned or leased automobile on the
terms and
conditions set forth in the Company’s Automobile Policy.
For
the avoidance
of doubt, the Executive shall not be entitled to any benefits under
this
Agreement if his termination of employment occurs on account of his
death,
disability, or voluntary resignation (other than for Good Reason)
before April
1, 2008, or any voluntary resignation is agreed upon by Executive,
the CEO and
Board of Directors.
5.
Time of Payments. Provided that the conditions
of paragraph 6
(relating to waiver and release) have been satisfied, payments pursuant
to
subparagraphs 4(a) and 4(b) shall be paid no later than March 15th
of the
calendar year following the calendar year in which the Executive’s Termination
Date occurs or at such earlier date as may apply in accordance with the
following:
(a) the
payment pursuant to subparagraph 4(a) (relating to severance pay)
shall be paid
within 10 days following the later of (i) the Executive’s Termination Date or
(ii) the date on which the conditions of paragraph 6 are satisfied;
and
(b) the
payment pursuant to subparagraph 4(b)and (c) (relating to incentive
compensation) shall be made within 10 days following the later of
(i) the date
that the long term and/or short-term incentive compensation would
have been paid
if the Participant’s Termination Date had not occurred, and (ii) the date on
which the conditions of paragraph 6 are satisfied.
Notwithstanding
any other provision of this Agreement, if the requirements of paragraph
6 are
not satisfied on or before March 1st of the calendar year following
the calendar
year in which the Executive’s Termination Date occurs, the Executive shall not
be entitled to any payments or benefits under this Agreement.
6.
Waiver and Release. The Executive shall not
be entitled to any
payments or benefits under this Agreement unless and until the Participant
executes and delivers to the Company a valid release of any and all
claims
against the Company and its affiliates in a form acceptable to the
Company and
the revocation period for such release has expired without revocation.
7.
Mitigation. The Executive shall not
be required to mitigate the
amount of any payment provided for in this Agreement by seeking other
employment
or otherwise. None of the Company or any of its affiliates shall be
entitled to set off against the amounts payable to the Executive
under this
Agreement any amounts owed to the Company or any of its affiliates
by the
Executive, any amounts earned by the Executive in other employment
after the
Termination Date, or any amounts which might have been earned by
the Executive
in other employment had he sought such other employment.
8.
Parachute Payments.
The Company
and the Executive agree that
if any payment or benefit to which the Executive is entitled from
the Company,
any affiliate, or any trusts established by the Company or by any
affiliate
(whether or not payable under this Agreement) including, without
limitation, the
vesting of an option or other non-cash benefit or property (all such
payments,
benefits and vesting being referred to collectively as “Payments”) are subject
to the tax imposed by section 4999 of the Internal Revenue Code of
1986 or any
successor provision to that section, then the Payments shall be reduced
to the
extent required to avoid application of the tax imposed by Code section
4999. The Executive shall be entitled to select the order in which
payments are to be reduced in accordance with the preceding sentence.
Determination of whether Payments would result in the application
of the tax
imposed by section 4999, and the amount of reduction that is necessary
so that
no such tax would be applied, shall be made, at the Company’s expense, by the
independent accounting firm employed by the Company on the Termination
Date.
9.
Withholding.
All payments
to the Executive under this Agreement
will be subject to all applicable withholding of applicable taxes.
10.
Confidential
Information. The Executive agrees that during the
Agreement Term and at all times thereafter:
(a) Except
as may be required by the lawful order of a court or agency of competent
jurisdiction, except as necessary to carry out his duties to the
Company and its
affiliates, or except to the extent that the Executive has express
authorization
from the Company, the Executive agrees to keep secret and confidential
indefinitely, all Confidential Information (as defined below), and
not to
disclose the same, either directly or indirectly, to any other person,
firm, or
business entity, or to use it in any way.
(b)
To the extent that any court
or agency seeks to have the Executive disclose
Confidential Information, he shall promptly inform the Company, and
he shall
take such reasonable steps to prevent disclosure of Confidential
Information
until the Company has been informed of such requested disclosure,
and the
Company has an opportunity to respond to such court or agency. To the
extent that the Executive obtains information on behalf of the Company
or any of
its affiliates that may be subject to attorney-client privilege as
to the
Company’s attorneys, the Executive shall take reasonable steps to maintain
the
confidentiality of such information and to preserve such privilege.
(c)
Nothing in the foregoing provisions
of this paragraph 10 shall be construed so
as to prevent the Executive from using, in connection with his employment
for
himself or an employer other than the Company or any of the affiliates,
knowledge which was acquired by him during the course of his employment
with the
Company and its affiliates, and which is generally known to persons
of his
experience in other companies in the same industry.
(d)
For purposes of this Agreement,
the term “Confidential Information” shall
include all non-public information (including, without limitation,
information
regarding litigation and pending litigation) concerning the Company
and its
affiliates which was acquired by or disclosed to the Executive during
the course
of his employment with the Company, or during the course of his consultation
with the Company following the Termination Date.
(e)
This paragraph 10 shall not
be construed to unreasonably restrict the
Executive’s ability to disclose confidential information in an arbitration
proceeding or a court proceeding in connection with the assertion
of, or defense
against any claim of breach of this Agreement. If there is a dispute
between the Company and the Executive as to whether information may
be disclosed
in accordance with this subparagraph (e), the matter shall be submitted
to the
arbitrators or the court (whichever is applicable) for decision.
11.
Competition.
During
the Term of the Agreement and for a period of
12 months after termination of the Executive’s employment with the Company for
any reason, the Executive shall not, without the express written
consent of the
Chief Executive Officer of the Company:
(a)
be employed by, serve as a consultant
to, or otherwise assist or directly or
indirectly provide services to a Competitor (defined below) if: (i)
the services
that the Executive is to provide to the Competitor are the same as,
or
substantially similar to, any of the services that the Executive
provided to the
Company or its affiliates, and such services are to be provided with
respect to
any location in which the Company or an affiliate of the Company
has material
operations during the 12-month period prior to the Termination Date,
or with
respect to any location in which the Company or an affiliate of the
Company has
devoted material resources to establishing operations during the
12-month period
prior to the Termination Date; or (ii) the trade secrets, confidential
information, or proprietary information (including, without limitation,
confidential or proprietary methods) of the Company and its affiliates
to which
the Executive had access could reasonably be expected to benefit
the Competitor
if the Competitor were to obtain access to such secrets or information.
For purposes of this subparagraph (a), services provided by others
shall be
deemed to have been provided by the Executive if the Executive had
material
supervisory responsibilities with respect to the provision of such
services.
(b)
solicit or attempt to solicit
any party who is then or, during the 12-month
period prior to such solicitation or attempt by the Executive was
(or was
solicited to become), a customer or supplier of the Company, provided
that the
restriction in this subparagraph (b) shall not apply to any activity
on behalf
of a business that is not a Competitor.
(c)
solicit, entice, persuade or
induce any individual who is employed by the
Company or its affiliates (or was so employed within 90 days prior
to the
Executive’s action) to terminate or refrain from renewing or extending such
employment or to become employed by or enter into contractual relations
with any
other individual or entity other than the Company or its affiliates,
and the
Executive shall not approach any such employee for any such purpose
or authorize
or knowingly cooperate with the taking of any such actions by any other
individual or entity.
(d)
directly or indirectly own an
equity interest in any Competitor (other than
ownership of 5% or less of the outstanding stock of any corporation
listed on
the New York Stock Exchange or the American Stock Exchange or included
in the
NASDAQ System).
The
term
“Competitor” means any enterprise (including a person, firm or business, whether
or not incorporated) during any period in which it is materially
competitive in
any way with any business in which the Company or any of its affiliates
was
engaged during the 12-month period prior to the Executive’s termination of
employment. Upon the written request of the Executive, the Company’s Chief
Executive Officer will determine whether a business or other entity
constitutes
a “Competitor” for purposes of this paragraph and may require the Executive to
provide such information as the Chief Executive Officer determines
to be
necessary to make such determination. The current and continuing
effectiveness of such determination may be conditioned on the accuracy
of such
information, and on such other factors as the Chief Executive Officer
may
determine.
12.
Non-Disparagement.
The Executive
agrees that, while he is employed
by the Company, and after his Termination Date, he shall not make
any false,
defamatory or disparaging statements about the Company, its affiliates,
or the
officers or directors of the Company or its affiliates that are reasonably
likely to cause material damage to the Company, its affiliates, or
the officers
or directors of the Company or its affiliates. While the Executive is
employed by the Company, and after the Termination Date, the Company
agrees, on
behalf of itself and its affiliates, that neither the officers nor
the directors
of the Company or its affiliates shall make any false, defamatory
or disparaging
statements about the Executive that are reasonably likely to cause
material
damage to the Executive.
13.
Nonalienation.
The interests
of the Executive under this Agreement
are not subject in any manner to anticipation, alienation, sale,
transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors
of the
Executive or the Executive’s beneficiary.
14.
Amendment.
This Agreement
may be amended or canceled only by mutual
agreement of the parties in writing without the consent of any other
person. So long as the Executive lives, no person, other than the parties
hereto, shall have any rights under or interest in this Agreement
or the subject
matter hereof.
15.
Applicable
Law. The provisions of this Agreement shall be construed
in accordance with the laws of the State of Illinois, without regard
to the
conflict of law provisions of any state.
16.
Severability.
The invalidity
or unenforceability of any provision
of this Agreement will not affect the validity or enforceability
of any other
provision of this Agreement, and this Agreement will be construed
as if such
invalid or unenforceable provision were omitted (but only to the
extent that
such provision cannot be appropriately reformed or modified).
17.
Obligation
of Company. Except as otherwise specifically provided in
this Agreement, nothing in this Agreement shall be construed to affect
the
Company’s right to modify the Executive’s position or duties, compensation, or
other terms of employment, or to terminate the Executive’s employment.
Nothing in this Agreement shall be construed to provide to the Executive
any
rights upon termination of the Executive’s employment with the Company other
than as specifically described in paragraph 4. If the Executive’s
employment is terminated other than by the Company for Cause or by
the Executive
for Good Reason, the Executive’ benefits shall be determined in accordance with
the applicable retirement, insurance and other programs of the Company
as may
then be in effect.
18.
Waiver of Breach.
No waiver
by any party hereto of a breach of any
provision of this Agreement by any other party, or of compliance
with any
condition or provision of this Agreement to be performed by such
other party,
will operate or be construed as a waiver of any subsequent breach
by such other
party of any similar or dissimilar provisions and conditions at the
same or any
prior or subsequent time. The failure of any party hereto to take any
action by reason of such breach will not deprive such party of the
right to take
action at any time while such breach continues.
19.
Successors,
Assumption of Contract. This Agreement is personal to
the Executive and may not be assigned by the Executive without the
written
consent of the Company. However, to the extent that rights or benefits
under this Agreement otherwise survive the Executive’s death, the Executive’s
heirs and estate shall succeed to such rights and benefits pursuant
to the
Executive’s will or the laws of descent and distribution. This Agreement
shall be binding upon and inure to the benefit of the Company and
any successor
of the Company and the Company will require any successor (whether
direct or
indirect, by purchase, merger, consolidation or otherwise) to all
or
substantially all of the business or assets of the Company to expressly
assume
and agree to perform this Agreement in the same manner and to the
same extent
that the Company would be required to perform it if no such succession
had taken
place.
20.
Notices.
Notices
and all other communications provided for in this
Agreement shall be in writing and shall be delivered personally or
sent by
registered or certified mail, return receipt requested, postage prepaid
(provided that international mail shall be sent via overnight or
two-day
delivery), or sent by facsimile or prepaid overnight courier to the
parties at
the addresses set forth below. Such notices, demands, claims and other
communications shall be deemed given:
(a) in
the case of delivery by overnight service with guaranteed next day
delivery, the
next day or the day designated for delivery;
(b) in
the case of certified or registered U.S. mail, five days after deposit
in the
U.S. mail; or
(c) in
the case of facsimile, the date upon which the transmitting party
received
confirmation of receipt by facsimile, telephone or otherwise;
provided,
however,
that in no event shall any such communications be deemed to be given
later than
the date they are actually received. Communications that are to be
delivered by the U.S. mail or by overnight service or two-day delivery
service
are to be delivered to the addresses set forth below:
to
the
Company:
A.M.Castle
& Co.
0000 Xxxxx Xxxx Xxxx
Xxxxxxxx Xxxx, XX00000
Attn: Corporate Secretary
0000 Xxxxx Xxxx Xxxx
Xxxxxxxx Xxxx, XX00000
Attn: Corporate Secretary
or
to the
Executive:
Xxxxxxxx
X.
Xxxx
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Each
party, by
written notice furnished to the other party, may modify the applicable
delivery
address, except that notice of change of address shall be effective
only upon
receipt.
21.
Arbitration
of All Disputes. Any controversy or claim arising out
of or relating to this Agreement (or the breach thereof) shall be
settled by
final, binding and non-appealable arbitration in Illinois, by three
arbitrators. Except as otherwise expressly provided in this paragraph 21,
the arbitration shall be conducted in accordance with the rules of
the American
Arbitration Association (the “Association”) then in effect. One of the
arbitrators shall be appointed by the Company, one shall be appointed
by the
Executive, and the third shall be appointed by the first two arbitrators.
If the first two arbitrators cannot agree on the third arbitrator
within 30 days
of the appointment of the second arbitrator, then the third arbitrator
shall be
appointed by the Association.
22.
Survival of
Agreement. Except as otherwise expressly provided in
this Agreement, the rights and obligations of the parties to this
Agreement
shall survive the termination of the Executive’s employment with the
Company.
23.
Counterparts.
This Agreement
may be executed in two or more
counterparts, any one of which shall be deemed the original without
reference to
the others.
IN
WITNESS THEREOF, the Executive has hereunto set his hand, and the
Company has
caused these presents to be executed in its name and on its behalf,
all as of
the Effective Date.
|
Executive:
|
|
/s/
Xxxxxxxx X. Xxxx
|
|
Chief
Financial Officer
|
|
A.
M. Castle & Co.:
|
|
By
/s/ Xxxxxxx X. Xxxxxxxx
|
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Its:
President & CEO
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