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EXHIBIT 10.17
EMPLOYMENT AGREEMENT
(Xxxx Xxxxxx)
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into on the _______
day of January, 1997, by and between METAL MANAGEMENT, INC., a Delaware
corporation ("Corporation") and Xxxx Xxxxxx ("Employee").
WITNESSETH:
WHEREAS, Employee desires to serve the Corporation in a position of
substantial responsibility; and
WHEREAS, the Board of Directors of the Corporation recognizes that the
efforts of certain employees identified by the Board as key management
employees will contribute to the growth and success of the Corporation; and
WHEREAS, the Board of Directors of the Corporation believes that, in the
best interests of the Corporation, it is essential that key management
employees, including Employee, be retained and that the Corporation be in a
position to rely on their dedication and commitment to render services to the
Corporation, irrespective of whether the Corporation is or may be acquired or
merged with or into another corporation.
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the Corporation and Employee agree as follows:
1. Employment. The Corporation shall employ Employee and Employee shall
serve as an employee of the Corporation for a term of Sixty (60) months from
the date hereof ("Employment Period"). The Employment Period and this
Agreement shall automatically be extended for an additional one (1) year term
following the expiration of each Employment Period unless either the
Corporation or the Employee notifies the other in writing at least thirty (30)
days prior to such expiration that the Employment Period and this Agreement
shall not be so extended. Employee shall serve as Vice President of the
Corporation and President, Chief Executive Officer and Chairman of the Board of
Directors of HouTex Metals Company, Inc., the Corporation's wholly-owned
subsidiary ("HouTex"), and shall perform the functions typically associated
with such offices. Employee shall also perform such other managerial,
administrative, technical, and other services as may be designated from time to
time by the Board of Directors of the Corporation appropriate for such officer
positions. Corporation shall not require Employee to be based at an office
location other than Xxxxxx County, Texas. Employee shall devote time and
attention to the matters of the Corporation such that Employee's services to
the Corporation constitute his sole business activity. During the Employment
Period Employee will not engage in any outside business activity, other than
purely passive investments, without obtaining the prior written consent of the
Corporation.
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2. Compensation.
(a) Employee shall initially receive as compensation for all services
performed by him hereunder an annual salary of not less than One Hundred
Thirty-Five Thousand and No/100 Dollars ($135,000). Employee's salary
hereunder shall be reviewed and may be increased by the Board of Directors of
the Corporation or HouTex from time to time. In addition to such annual base
salary, Employee shall receive such annual bonus, if any, in an amount to be
determined by the Board of Directors of the Corporation or HouTex.
(b) Employee shall be entitled to participate in all bonus, incentive,
stock option, stock purchase and other compensation plans during the Employment
Period on a basis commensurate with his position as an executive officer of the
Corporation and consistent with (but not necessarily exactly equal to) the top
executive officers of the Corporation. Specifically, Employee will receive
annual incentive bonuses and other benefits which will be determined by the
Board of Directors of the Corporation within a range of such bonuses and
benefits designated by the Board of Directors of the Corporation for its senior
executive officers who head the Corporation's regional scrap metal operating
subsidiaries or divisions.
3. Fringe Benefits. Employee shall be entitled to not less than four (4)
weeks paid vacation per year during the one year period ending on the first
anniversary date of this Agreement and shall thereafter be entitled to six (6)
weeks paid vacation for each succeeding annual period during the Employment
Period. The Corporation shall adopt a reasonable policy for sick leave and
short-term disability during which the Employee will be compensated as provided
in Section 2, above. The Corporation shall reimburse Employee for other
ordinary and necessary business expenses incurred by Employee in the course of
his employment. Employee shall also receive such other fringe benefits as the
Corporation's Board of Directors may deem appropriate, including not less than
those fringe benefits set forth on Exhibit A attached hereto. Additionally,
Employee shall be entitled to be absent from work for up to twelve (12) days
per year for purposes of observing religious holidays.
4. Termination Generally. This Agreement and Employee's employment may be
terminated by the Corporation prior to its expiration in accordance with this
Section as follows:
(a) Disability; Retirement. If, as a result of Employee's incapacity due
to physical or mental illness, Employee shall have been absent from the
performance of his duties with the Corporation for six (6) consecutive months
and, within thirty (30) days after written notice of termination is given,
Employee shall not have returned to the full-time performance of his duties,
the Corporation may terminate Employee's employment for "Disability."
Termination by the Corporation or by Employee of Employee's employment by
reason of "Retirement" shall mean termination on or after Employee's "Normal
Retirement Date" which shall be when Employee attains the age of 65, or in
accordance with any retirement arrangement established with Employee's consent
with respect to Employee.
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(b) The Corporation may terminate this Agreement and Employee's employment
for "Cause." "Cause" shall mean any one of the following:
(i) The willful and continued failure by Employee to substantially
perform his duties with the Corporation (other than any such failure resulting
from termination for Good Reason, Disability or Retirement) after a demand for
substantial performance is delivered to Employee that specifically identifies
the manner in which the Corporation believes that Employee has not
substantially performed his duties, and Employee failing to resume substantial
performance of his duties on a continuous basis within fourteen (14) days of
receiving such demand; provided, that if it is not reasonably possible for
Employee to resume such substantial performance within such fourteen (14) days,
then such fourteen (14) day time period shall be extended to that minimum
period of time during which it is reasonably possible for Employee to resume
such substantial performance;
(ii) The willful engaging by Employee in conduct which is demonstrably
and materially injurious to the Corporation, monetarily or otherwise, and
Employee's failure to cease engaging in such conduct within fourteen (14) days
after a demand for such cessation is delivered to Employee by the Corporation
that specifically identifies such conduct; provided, however, that if it is not
reasonably possible for Employee to cease such conduct within such fourteen
(14) days, then such fourteen (14) day time period shall be extended to that
minimum period of time during which it is reasonably possible for Employee to
cease such conduct; or
(iii) Employee's conviction of a felony or conviction of a misdemeanor
which materially impairs Employee's ability substantially to perform his duties
with the Corporation. For purposes of this subsection, no act, or failure to
act, on Employee's part shall be deemed "willful" unless done, or omitted to be
done, by Employee not in good faith and without reasonable belief that his
action or omission was in the best interest of the Corporation.
(c) Notice of Termination. Any termination by the Corporation for
Cause or by Employee for Good Reason shall be communicated by Notice of
Termination to the other party hereto. For purposes of this Agreement, a
"Notice of Termination" shall mean a written notice which shall indicate the
specific termination provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of Employee's employment under the provision so
indicated.
(d) Date of Termination. "Date of Termination" shall mean the date
specified in the Notice of Termination where required or, in any other case,
the date upon which Employee ceases to perform services to the Corporation;
provided that if within thirty (30) days after any Notice of Termination one
party notifies the other party that a dispute exists concerning the
termination, the Date of Termination shall be the date finally determined to be
the Date of Termination, either by mutual written agreement of the parties or
by the final, nonappealable determination of a court of competent jurisdiction.
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5. Compensation Upon Termination Generally. Employee shall be entitled
to the following benefits upon termination as set forth in Section 0 hereof, as
additional benefits under this Agreement and as additional compensation for the
Employee's strict adherence to the Covenant Not to Compete set forth in Section
0 hereof:
(a) During any portion of the Employment Period that Employee fails
to perform his full-time duties with the Corporation as a result of incapacity
due to physical or mental illness or other disability, Employee shall continue
to receive his Base Salary at the rate in effect at the commencement of any
such portion of the Employment Period, until Employee's employment is
terminated pursuant to subsection 0(a) hereof. Thereafter, Employee's benefits
shall be determined in accordance with the Corporation's retirement, insurance
and other applicable programs and plans then in effect.
(b) If Employee's employment shall be terminated by the Corporation
for Cause, the Corporation shall pay Employee his full Base Salary through the
Date of Termination at the rate in effect at the time Notice of Termination is
given or on the Date of Termination if no Notice of Termination is required
hereunder, plus all other amounts to which Employee is entitled under any
compensation plan of the Corporation at the time such payments are due, and the
Corporation shall have no further obligations to Employee under this Agreement.
(c) If Employee voluntarily terminates his employment, for any reason
Employee shall be entitled to receive only his Base Salary through the date of
termination and thereafter shall receive no further compensation from the
Corporation.
6. Restrictive Covenants. Employee agrees with the Corporation that he
will not for a period of three full years (36 months) measured from the date he
ceases to be an officer, director, employee or consultant of the Corporation or
HouTex:
(a) directly or indirectly, alone or as a partner, joint venturer,
officer, director, employee, consultant, advisor, proprietor, agent,
independent contractor, stockholder or holder of any other ownership interest
in any company or business, assist or engage in any business activity in the
State of Texas that is in Competition with the Business conducted by HouTex or
the Corporation as of the date hereof, or in any way participate in the
financing, operation, management or control of, any firm, partnership,
corporation, entity or business that engages or participates in any business
activity in the State of Texas that is in Competition with the business
conducted by HouTex or the Corporation as of the date hereof; provided,
however, that the beneficial ownership of less than five percent (5%) of the
shares of stock of any corporation having a class of equity shares actively
traded on a national securities exchange or over-the-counter market shall not
be deemed, in and of itself, to violate the prohibitions of this Section;
(b) directly or indirectly (i) induce any Person that is a customer
of HouTex or
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The Corporation as of the date hereof to patronize any business in Competition
with the Business conducted by HouTex or the Corporation; (ii) canvass, solicit
or accept from any Person that is a customer of HouTex or the Corporation, any
such Competitive business; or (iii) request or advise any Person that is a
customer of HouTex or the Corporation as of the date hereof to withdraw,
curtail or cancel any such customer's business with HouTex or the Corporation.
(c) directly or indirectly employ, or knowingly permit any company or
business directly or indirectly controlled by him, to employ, any Person who
was employed by HouTex or the Corporation at or within six months prior to the
date hereof, or in any manner solicit, encourage, or take any other action
intended or seeking to induce such Person to leave his or her employment;
For purposes of this Agreement, the term "Business" shall mean the buying,
selling, brokering, trading, processing, recycling, shipping and/or handling of
scrap metals or other metals or metal products, and the terms "Competitive" and
"Competition" shall mean a business whose primary activity is the buying,
selling, brokering, trading, processing, recycling, shipping and/or handling of
scrap metals or other metals or metal products.
Employee agrees and acknowledges that the restrictions contained herein
are reasonable in scope and duration and are necessary to protection HouTex and
the Corporation. If any provision of this Section, as applied to any party or
to any circumstance, is adjudged by a court to be invalid or unenforceable, the
same will in no way affect any other circumstance or the validity or
enforceability of this Agreement. If any such provision, or any part thereof,
is held to be unenforceable because of the duration of such provision or the
area covered thereby, the parties agree that the court making such
determination shall have the power to reduce the duration and/or area of such
provision, and/or to delete specific words or phrases, and in its reduced form,
such provision shall then be enforceable and shall be enforced. The parties
agree and acknowledge that the breach of this Section will cause irreparable
damage to HouTex and the Corporation, that it would be impossible or inadequate
to measure and calculate HouTex and the Corporation's damages from any such
breach and that upon breach of any provision of this Section, HouTex and the
Corporation shall be entitled to injunctive relief, specific performance or
other equitable relief, provided, however, that, this shall in no way limit any
other remedies which HouTex and the Corporation may have (including, without
limitation, the right to seek monetary damages). Employee further agrees that
no bond or other security shall be required in obtaining such equitable relief,
nor will proof of actual damages be required for such equitable relief.
Employee hereby expressly consents to the issuance of such injunction and to
the ordering of such specific performance. For purposes of this Section,
"Person" means an individual, partnership, corporation, business trust, joint
stock company, estate, trusts, unincorporated association, joint venture,
governmental authority or other entity, of whatever nature.
7. Confidential Information. Employee shall not, during the Employment
Period or thereafter, disclose to any person any confidential information
obtained from or regarding the Corporation or its affiliates, including,
without limitation, contracts, business plans, forms, lists,
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manuals, or any budgetary, sales, marketing, financial, procedural or
operations materials or information, or any other nonpublic information
intended to be confidential prepared by or for the benefit of the Corporation
or its affiliates. If Employee shall leave the employment of the Corporation
for any reason, the Employee agrees not to take with him any such documents,
materials or information or other data of any description or any copy or
reproduction of any of the foregoing.
8. Enforceability. The failure of either party at any time to require
performance by the other party of any provision hereunder shall in no way
affect the right of that party thereafter to enforce the same, nor shall it
affect any other party's right to enforce the same, or to enforce any of the
other provisions in this Agreement; nor shall the waiver by either party of the
breach of any provision hereof be taken or held to be a waiver of any
subsequent breach of such provision or as a waiver of the provision itself.
9. Successors; Binding Agreement.
(a) The Corporation shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation or of any
division or subsidiary thereof employing Employee to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the
Corporation would be required to perform it if no such succession had taken
place. Failure of the Corporation to obtain such assumption and agreement
prior to the effective of any such succession shall be a breach of this
Agreement and shall entitle Employee to compensation from the Corporation in
the same amount and on the same terms as Employee would be entitled hereunder
if Employee terminated his employment for Good Reason, except that, for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination.
(b) This Agreement shall inure to the benefit of and be enforceable by
Employee's personal or legal representatives, executors, administrator,
successors, heirs, distributees, devisees and legatees. If Employee should die
while any amount would still be payable to him hereunder if he had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to Employee's devisee, legatee or
other designees or, if there is no such designee, to Employee's estate.
10. Modification. This Agreement may not be canceled, changed, modified
or amended, and no cancellation, change, modification or amendment will be
effective or binding unless in writing and signed by both parties to this
Agreement.
11. Severability; Survival. In the event any provision of this Agreement
is found to be void and unenforceable by a court of competent jurisdiction, the
remaining provisions of this Agreement shall nevertheless be binding upon the
parties with the same effect as though the void or unenforceable part had been
severed and deleted.
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12. Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
conflicts of laws principles thereof.
13. Counterparts. This Agreement may be executed simultaneously in
several counterparts, each of which will be an original, but all of which
together will constitute one and the same original.
14. Entire Agreement. This Agreement represents the entire agreement
between the Corporation and the Employee with respect to the subject matter
hereof, and all prior agreements relating to the relationship between the
Employee and the Corporation, written or oral, are nullified and superseded
hereby.
15. Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
METAL MANAGEMENT, INC.
By:
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Name: Xxxxxx X. Xxxxxx
Title: Chief Executive Officer
EMPLOYEE:
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XXXX XXXXXX
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EXHIBIT A
1. $1,200 per month car allowance.
2. Car phone or cellular phone.
3. Employee shall initially be entitled to receive the same health
insurance, life insurance, and deferred compensation benefits he currently
receives from HouTex. However, prior to the end of the initial 12 months
of the Employment Period, the Corporation will propose a group health
insurance, life insurance and deferred compensation package for all of its
Senior Executives (the "Senior Executive Benefit Package") and Employee
will be entitled to participate in the Senior Executive Benefit Package in
lieu of his existing health insurance, life insurance, and deferred
compensation benefits.
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