Exhibit 10.1
NON-COMPETITION AGREEMENT
Non-Competition Agreement, effective as of July 11, 1997, between
Steel Of West Virginia, Inc. (the "Company") and Xx. Xxxxxx X. Xxxxxxx, Xx.
("Xx. Xxxxxxx"). In return and in consideration of Xx. Xxxxxxx'x waiver of
claims, and his covenants against competition, solicitation, disclosure and
disparagement contained herein, and in return and in consideration of the
Company's promises herein, the Company and Xx. Xxxxxxx hereby agree as follows:
1. Termination. Xx. Xxxxxxx'x resignation from all positions as an
officer and as a director with the Company and it subsidiaries shall be
effective on July 11, 1997.
2. Lump Sum Payment. On the eighth day after Xx. Xxxxxxx'x
execution of this Agreement, the Company will make a lump sum payment to Xx.
Xxxxxxx in the amount of $368,808 (being comprised of (i) 150% of Xx. Xxxxxxx'x
prior base salary, plus (ii) 5% of such amount, "grossed up" for tax purposes),
without tax withholdings, payroll or other deductions or offsets of any kind.
Xx. Xxxxxxx will be responsible for any and all taxes payable with regard to
such lump sum payment.
3. Bonus. Promptly after the Compensation and Benefits Committee of
the Company determines executive bonuses for 1997, the Company will pay to Xx.
Xxxxxxx a pro rata portion of the bonus awarded to him for 1997, calculated by
multiplying the bonus awarded
1
to him by a fraction, the numerator of which will be 192, and the denominator
of which will be 365. Such bonus payment shall be subject to tax withholdings
and other customary payroll deductions, but to no other deductions or offsets
of any kind.
4. Health Insurance. Xx. Xxxxxxx is hereby electing to take COBRA
healthcare coverage. On the eighth day after Xx. Xxxxxxx'x execution of this
Agreement, the Company will pay to Xx. Xxxxxxx $7,702, without any deductions or
offsets of any kind, such $7,702 being the amount of the premium for such
coverage ("grossed up" for tax purposes) from July 12, 1997 through January 31,
1998. Further, no later than ten days before the due date for the premium for
such coverage for the period from February 1, 1998 through the date of Xx.
Xxxxxxx'x 65th birthday, the Company will pay to Xx. Xxxxxxx an amount equal to
the premium for such coverage ("grossed up" for tax purposes) for such period,
without any deductions or offsets of any kind. Xx. Xxxxxxx will pay the
appropriate premium for his COBRA coverage to the Company's third party COBRA
administrator in accordance with the requirements of such third party
administrator. The Company's obligation to make such payments to Xx. Xxxxxxx
will terminate before said date at such time, if any, as substantially
comparable healthcare coverage is provided to Xx. Xxxxxxx from another source at
no cost to Xx. Xxxxxxx.
5. No Other Company Obligations. The Company will have no
obligations to Xx. Xxxxxxx whatsoever other than as specifically set forth in
this Agreement, and no promises have been made to Xx. Xxxxxxx other than as set
forth in this Agreement.
6. Release by Xx. Xxxxxxx. Xx. Xxxxxxx, for himself, his heirs,
executors, administrators and assigns, hereby freely relinquishes and waives any
claims and all possible claims of any kind whatsoever that Xx. Xxxxxxx ever had,
now has or may have hereafter against
2
the Company, its subsidiaries and affiliates, and its and their successors,
assigns, employees, agents, officers, directors and stockholders (the
"Releasees") which may have arisen or relate to any actual or alleged act,
omission, transaction, practice, conduct, occurrence or other matter
whatsoever, through the date of his signing of this Agreement, provided that
Xx. Xxxxxxx does not waive any claims created by the Company's breach of this
Agreement. The terms "claims and all possible claims" includes, but is not
limited to, any claims under the Age Discrimination in Employment Act, Title
VII of the Civil Rights Act of 1964, the Equal Pay Act, the Americans with
Disabilities Act, the Civil Rights Act of 1991, or any or all other laws with
the same or similar intent or scope as those acts and laws set forth above,
applicable in any jurisdiction to which the Releasees or Xx. Xxxxxxx are or
become subject, including, but not limited to, the State of West Virginia.
These laws prohibit, among other things, discrimination in employment on the
basis of sex, race, color, religion, national origin, age, marital status or
disability. This relinquishment and waiver also includes any claims for
wrongful discharge, breach of contract, infliction of emotional distress, and
all other claims arising from statute, local law, administrative regulation
or common law. This relinquishment and waiver includes claims now known to
Xx. Xxxxxxx, as well as any and all possible claims that are not now known to
him.
7. Release by the Company. The Company, for itself and its
successors and assigns, hereby freely relinquishes and waives any claims and all
possible claims of any kind whatsoever that the Company ever had, now has or may
have hereafter against Xx. Xxxxxxx which may have arisen or relate to any actual
or alleged act, omission, transaction, practice, conduct, occurrence or other
matter whatsoever, through the date of its signing of this
3
Agreement, provided that the Company does waive (a) any claim created by Xx.
Xxxxxxx'x breach of this Agreement, or (b) any claim brought by any third
party in the name or on behalf of the Company. This relinquishment and waiver
includes all claims arising from statute, local law, administrative
regulation or common law. This relinquishment and waiver includes claims now
known to the Company, as well as any and all claims that are not now known to
the Company.
8. Secrecy and Non-disclosure.
(a) Xx. Xxxxxxx agrees to treat as secret and confidential all of the
Trade Secrets (as hereinafter defined) of the Company, and Xx. Xxxxxxx agrees
further not to disclose, use, publish or in any other manner reveal, directly or
indirectly, at any time or after the term of this Agreement, any Trade Secret,
except as required by law, in which case Xx. Xxxxxxx shall provide the Company
with written notice of such requirement by law no less than five (5) days prior
to any such disclosure, or, if Xx. Xxxxxxx is required to make such disclosure
in a lesser period of time, Xx. Xxxxxxx shall provide the Company with as much
advance notice as may then be practicable.
(b) "Trade Secrets", as used in this Agreement, shall mean any and
all information regarding the business of the Company and any subsidiary (as
hereinafter defined) or affiliates (as hereinafter defined) of the Company,
including, but not limited to, information regarding operations, systems,
services, know-how, supplier lists, customer lists, customer accounts, financial
information, gross margin analysis, costing data and marketing plans to the
extent not generally available to the public.
4
(c) "Affiliates", as used in this Section 8, shall mean any person,
firm or entity that, directly or indirectly, controls, is controlled by, or is
under common control with, the Company. "Subsidiary" shall mean wholly as well
as partly-owned subsidiaries.
9. Proprietary Information and Disclosure to the Company. Xx.
Xxxxxxx will deliver to the Company all the Company property in his possession
or under his control, including, but not limited to, financial statements, mill
and production data, marketing and sales data, copies of designs, patent
applications, drawings and other documents.
10. Non-Competition.
(a) Xx. Xxxxxxx agrees that during the period commencing with the
date hereof and ending on the 18-month anniversary of the date hereof, Xx.
Xxxxxxx shall not, directly or indirectly
(i) become associated with, render services to, invest in,
represent, advise or otherwise participate as an employee, officer, director,
partner, joint venturer, shareholder, agent of or consultant for any business or
enterprise which is directly or indirectly competitive with the business engaged
in by the Company either during Xx. Xxxxxxx'x employment with the Company or at
the Termination Date, provided, however, that nothing herein shall prevent Xx.
Xxxxxxx from investing in the securities of any company listed on a national
securities exchange or quoted on the NASDAQ quotation system, provided his
involvement with any such company is solely that of a stockholder owning less
than five percent (5%) of such company;
(ii) employ or solicit the employment or engagement by himself or
others of any employees of the Company; provided, however, that this Section
10(a)(ii) shall apply only with respect to such employment or solicitation of
employment in a business or
5
venture which is directly or indirectly competitive with the business engaged
in by the Company at the Termination Date;
(iv) for himself, or as agent, employee or consultant of any
person, firm or corporation, knowingly canvass or solicit business from any of
the Company's customers; provided, however, that this Section shall apply only
with respect to such canvassing or solicitation of business which business is
directly or indirectly competitive with the business engaged in by the Company
at the Termination Date.
(b) Definitions.
(i) For purposes of this Section 10, businesses or enterprises
"similar to" or "competitive with" the Company shall mean those engaged, in
whole or substantially in part, in (A) the business of manufacturing and
distributing special steel sections, and/or (B) any new business engaged in by
the Company during the period beginning on the date hereof and ending on the
18-month anniversary of the date hereof, of which Xx. Xxxxxxx receives written
notice (which may be given prior to the Company's engaging in such business)
prior to Xx. Xxxxxxx'x engaging in such business.
(ii) For purposes of this Section 10, "the Company" shall mean
the Company and any subsidiaries and affiliates thereof.
(c) Reasonableness of Restrictions. Xx. Xxxxxxx acknowledges that
the restrictions specified under this Section 10 are reasonable, in view of the
nature of the business in which the Company is engaged and Xx. Xxxxxxx'x special
and unique skills, reputation and knowledge of the the Company's operations.
Xx. Xxxxxxx further acknowledges that his services, if used by a competitor,
could cause significant harm to the Company.
6
(d) Modification of Restrictions. Notwithstanding anything contained
in this Section 10 to the contrary, the parties hereto intend that the covenant
contained in this Section 10 hereof shall be deemed a series of separate
covenants for each state, county and city. If, in any judicial proceeding, a
court shall refuse to enforce all the separate covenants deemed included in this
Section 10, because, taken together, they cover too extensive a geographic area,
the parties hereto intend that those of such covenants (taken in order of the
cities, counties and states therein which are least populous), which, if
eliminated, would permit the remaining separate covenants to be enforced in such
proceeding, shall for the purposes of such proceedings, be deemed eliminated
from the provisions of this Section 10.
11. Consent to Equitable Relief and other Remedies. Xx. Xxxxxxx
consents and agrees that if Xx. Xxxxxxx violates or threatens to violate any of
the provisions contained in Section 8, 9, or 10 of this Agreement, the Company
shall, in addition to such other remedies as it may have at law or in equity, be
entitled to (a) an injunction to be issued by a court of competent jurisdiction
restraining and prohibiting Xx. Xxxxxxx from committing or continuing any
violation of such provision, and (b) offset any amounts payable to Xx. Xxxxxxx
under the terms of this Agreement. If the scope of any restriction contained in
this Agreement is too broad to permit enforcement to its fullest extent, then
such restriction shall be enforced to the maximum extent permitted by law.
12. Non-Disparagement.
(a) The Company will not in any way or in any forum disparage, demean
or impugn the good name or reputation of Xx. Xxxxxxx.
7
(b) Xx. Xxxxxxx will not in any way or in any forum disparage, demean
or impugn the good name or reputation or business or trade name or reputation of
the Company or any officer, director, stockholder, employee or agent of the
Company.
13. Opportunity to Review. Xx. Xxxxxxx acknowledges that his
decision to enter into this Agreement, including his relinquishment and waiver
of claims and all possible claims and his making the covenants contained herein,
in return for the benefits set forth above, were made after careful thought, and
after an opportunity to consult with an attorney of his choice, which the
Company has advised him to do. Xx. Xxxxxxx acknowledges that he has been
granted at least 21 days, which he agrees is adequate time, to thoroughly and
carefully review and consider this Agreement, and that he fully understands and
agrees to all of its terms.
14. Revocation. Xx. Xxxxxxx may revoke this Agreement within seven
days of his signing it. Revocation can be made by delivering written notice of
revocation to Xxxxxxx X. Xxxxxx, Xxxxxxxx & Xxxxxx, P.C., 00 Xxxx 00xx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000. For this revocation to be effective, the written
notice must be received by Xx. Xxxxxx'x office no later than the close of
business on the seventh day after Xx. Xxxxxxx signs this Agreement, or else Xx.
Xxxxxx'x office must be notified by telephone on that day that the written
notice has been mailed on that day. If Xx. Xxxxxxx revokes this Agreement, this
Agreement will be rescinded in its entirety, and Xx. Xxxxxxx will not receive
any of the benefits set forth herein.
15. Amendments. This Agreement may not be altered or terminated
except by a writing signed by both Xx. Xxxxxxx and a duly authorized
representative of the Company.
16. Notices. All notices, claims, requests, demands and other
communications hereunder must be in writing and will be deemed to have been duly
given on
8
the day of delivery if personally delivered or delivered by facsimile
transmission (during normal business hours, and if not delivered during normal
business hours such notice shall be deemed to have been given on the next
succeeding business day) and on the business day immediately following the
deposit thereof with a nationally recognized overnight courier for delivery to
the other party, addressed:
(a) If to the Company:
(i) Steel of West Virginia, Inc.
00xx Xxxxxx xxx 0xx Xxxxxx
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
Att: Xxxxxxx X. Xxxx
President
Fax: (000) 000-0000
(b) If to Xx. Xxxxxxx:
Xxxxxx X. Xxxxxxx
00 Xxxxx Xxxxxxxxx Xxx
Xxxxxx Xxxx, XX 00000
Fax: (000) 000-0000
or to such other address as either party may designate to the other by notice
given in accordance with this Section 16.
17. Construction of Agreement. All parts of this Agreement shall be
consulted in the context of the whole, according to their fair meaning, and
shall not be construed strictly for or against either party.
9
NOTICE
THIS AGREEMENT CONTAINS A WAIVER OF ALL KNOWN OR UNKNOWN LEGAL CLAIMS, AND
COVENANTS BY YOU AGAINST COMPETITION, SOLICITATION, DISCLOSURE AND
DISPARAGEMENT. READ THIS ENTIRE AGREEMENT CAREFULLY BEFORE SIGNING. DO NOT
SIGN THIS AGREEMENT UNLESS YOU AGREE WITH ALL OF ITS TERMS.
Steel of West Virginia, Inc.
______________________ By: _____________________
Xxxxxx X. Xxxxxxx, Xx.
Date:_________________ Date: ___________________
10
