Exhibit 10.2
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September 7, 2004
Xxxx Xxxx
Commonwealth Industries, Inc.
000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Re: Amendment to Severance Agreement
Dear Xxxx,
Pursuant to our correspondence dated as of even date herewith concerning
certain additional equity incentives and other compensation arrangements, this
letter (the "Amendment") will serve to amend your Severance Agreement dated as
of February 1, 1996 (the "Severance Agreement").
Effective upon the Closing of the merger (as defined in the Agreement and Plan
of Merger (the "Merger") among IMCO Recycling Inc., Silver Fox Acquisition
Company and the Company, dated as of June 16, 2004 (the "Merger Agreement"):
1. Section 3(a)(2) of the Severance Agreement, shall be modified and replaced
in its entirety with the following:
(2) a lump-sum cash amount equal to (i) two (2) times Executive's highest
annual rate of base salary during the 12-month period prior to the Date of
Termination, plus (ii) two (2) times the greatest of (A) the highest bonus
earned by Executive in respect of the three (3) fiscal years of the Company
immediately preceding the fiscal year in which the Change in Control occurs or
(B) Executive's target bonus for the fiscal year in which the change in Control
occurs or (C) Executive's target bonus for the fiscal year in which Executive's
Date of Termination occurs. Any amount paid pursuant to this Section 3(a)(2)
shall reduce any other amount of severance relating to salary or bonus
continuation to be received by Executive upon termination of employment of
Executive under any severance plan or policy or employment agreement of the
Company.
2. Section 3(b) of the Severance Agreement shall be modified and replaced in
its entirety with the following:
(b) If during the Termination Period the employment of Executive shall
terminate, other than by reason of a Nonqualifying Termination, the Company
shall continue to provide, for a period of two (2) years following the Date of
Termination, Executive (and Executive's dependents if applicable) with the same
level of medical, dental, accident, disability and life insurance benefits upon
substantially the same terms and conditions (including cost of coverage to
Executive) as existed immediately prior to Executive's Date of Termination (or,
if more favorable to Executive, as such benefits and terms and conditions
existed immediately prior to the Change in Control); provided, that, if
Executive cannot continue to participate in the Company plans providing such
benefits, the Company shall otherwise provide such benefits on the same
after-tax basis as if continued participation had been permitted.
Notwithstanding the foregoing, in the event Executive becomes reemployed with
another employer and becomes eligible to receive welfare benefits from such
employer, the welfare benefits described herein shall be secondary to such
benefits during the period of Executive's eligibility, but only to the extent
that the Company reimburses Executive for any increased cost and provides any
additional benefits necessary to give Executive the benefits provided hereunder.
3. Section 1(e)(6) of the Severance Agreement (with respect to your right to
payments if you terminate employment during a certain window period) shall be
void and shall have no further force or effect.
For the avoidance of doubt, the foregoing amendments will not take effect until
the closing of the merger contemplated by the Merger Agreement. This agreement
shall terminate and be of no force and effect, and no changes to the Severance
Agreement contemplated herein shall be effected, if the Merger Agreement is
terminated or if the Closing does not occur within the time contemplated in the
Merger Agreement. Except as modified herein, the Severance Agreement shall
remain in effect, including without limitation, Section 9(b) concerning
assumption of the obligations of the Severance Agreement, as amended hereby, by
a successor or transferee.
If the foregoing correctly sets forth our understanding, please execute a copy
of this letter in the space provided and return it to me.
Sincerely,
/S/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx
ACCEPTED AND AGREED
as of the date first above written
/S/ Xxxx Xxxx
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Xxxx Xxxx
