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Exhibit 10(r)
COLD METAL PRODUCTS, INC.
August 12, 1998
VIA FEDERAL EXPRESS & FAX
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Xx. Xxxxx X. Xxxxxxxx
Cold Metal Products, Inc.
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Dear Xxx:
This letter agreement sets forth the terms and conditions of your
separation from employment with Cold Metal Products, Inc. (the "Company"). We
agree as follows:
1. RESIGNATION DATE: TERMINATION. (a) Your resignation as an officer of
the Company and from the Boards of Directors of the Company and all of its
related corporations will be effective on such date as is determined by the
Board of Directors of the Company (the "Board") and communicated to you in
writing. Such date is referred to herein as the "resignation date." Your
termination of employment with the company will be effective on the last day of
the one year period beginning on the later of the resignation date or December
31, 1998, which is referred to herein as the "post-resignation period."
(b) During the post-resignation period, your only duties will be to
render such consulting, advisory and transitional services relating to the
Company's business as the Board or its designee may reasonably request, and you
will not have authority to bind or obligate the Company in any way. The Company
recognizes that you will not devote all of your working time to the performance
of such duties.
(2) OBLIGATIONS OF THE COMPANY. In consideration of the agreements,
releases and representations made by you in this Agreement:
(a) During the post-resignation period: (i) you will continue to
receive your annual salary, at the annual rate of $350,000, less lawful
withholdings and (ii) you will continue to participate in whatever employee
benefit plans and fringe benefit arrangements you now participate in, other than
the Special Incentive Compensation Plan and the 1994 Incentive Program, subject
to the Company's right to modify, amend or terminate any such plan or
arrangement. In particular: (i) for purposes of computing the amount of your
pension from the Pension Plan for Salaried Non-Bargaining Employees of Cold
Metal Products, Inc. (the "Pension Plan"), you will be credited with service for
the post-resignation period, and (ii) you will receive your accrued and unused
vacation pay for all of 1998, in the amount of $21,250, on January 4, 1999. Your
retirement under the Pension Plan will be effective on the last day of the
post-resignation period.
000 Xxxx Xxxxxx Xxxxxx - P. X. Xxx 0000 - Xxxxxxxxx, XX 00000-0000 -
(000) 000-0000 - Fax: (000) 000-0000
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(b) You will receive all amounts credited to your account under the
Company's Special Incentive Compensation Plan, including investment earnings, as
if you had "Retired," within the meaning of such plan, on the resignation date.
Payment will be made to you on January 4, 1999.
(c) Your resignation on the resignation date will be considered a
"Normal Termination" for purposes of the Company's 1994 Incentive Program, so
that your currently exercisable options to purchase 65,000 shares of Company
stock will not expire until five (5) years after the resignation date. You agree
that your employment after the resignation date will not defer or affect the
effective date of your Normal Termination for purposes of this program.
(d) At the end of the post-resignation period, the Company will
transfer title to your Company vehicle to you.
(e) The Company will reimburse you for fees incurred for outplacement,
legal and accounting services to the extent related to the subject matter of
this agreement and not in excess of an aggregate amount of $25,000.
3. PURCHASE OF STOCK. The Company agrees to purchase 208,050 shares of
the Company's restricted common stock owned by you at the stipulated price on or
within three (3) days after the later of the resignation date or January 1,
1999, subject to approval of the Company's lenders. For purposes of this
Agreement, the "stipulated price" means the higher of:
(a) the average of the closing prices of such stock on the New York
Stock Exchange over the 20 trading days preceding the resignation date; or
(b) the book value of such shares as reflected on the Company's last
quarterly balance sheet preceding the resignation date.
At the closing of such purchase, which shall be held on such date as we agree,
within the period stated above, the Company will deliver payment for the shares,
by wire transfer to an account designated by you or as you otherwise reasonably
instruct, and you will deliver certificates representing all shares, endorsed
for transfer or with duly executed stock powers attached.
4. YOUR OBLIGATIONS: GENERAL RELEASE. (a) In consideration of your
receipt of the payments and benefits described in paragraph 2 above:
(i) You release and agree not to xxx the Company, Aarque
Securities Corporation or any of their affiliates, or any of the
officers, agents or employees thereof, with respect to any claim,
whether known or unknown, which you have, or may have, related to your
employment with the Company, or termination of such employment (the
"Claims"), including all Claims of unlawful discrimination on account
of sex, race, age, disability, veteran's status, national origin or
religion; all Claims based upon any federal, state or local equal
employment opportunity law, including the Civil Rights Act of 1964, as
amended, the Age Discrimination in Employment Act, as amended by the
Older Workers Benefit Protection Act, the Americans With Disabilities
Act of 1990, the Civil
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Rights Act of 1991, all Claims for violations of the employee
Retirement Income Security Act of 1974; all Claims for violation of any
agreement or representation, express or implied, made prior to or
simultaneously with this Agreement; and all Claims based upon wrongful
termination of employment and similar or related Claims.
(ii) You will not disclose any Confidential Information in
whole or in part to any person, firm or corporation for any reason or
purpose whatsoever, or use such information in any way or in any
capacity. The term "Confidential Information" shall mean secret or
confidential information relating to the Company, its affiliates and
customers or their affiliates, which conveys a competitive advantage to
the Company or any such customer, client or affiliate, and which was
disclosed to or known by you as a consequence of or through your
employment with the Company (including information conceived,
originated, discovered or developed by you), which information is not
otherwise generally known in the relevant trade or industry or public
knowledge. The covenants set forth in this clause (ii) will be
effective until December 31, 2001.
(b) It is agreed that the general release set forth in this paragraph
4: (i) does not release the Company of its obligations under this Agreement; and
(ii) shall not adversely affect such benefits, if any, to which you may be
entitled under the Pension Plan, the Cold Metal Products, Inc. Thrift Plan, the
Cold Metal Products, Inc. Special Incentive Compensation Plan, the Cold Metal
Products, Inc. 1994 Special Incentive Program and the group benefit plan for
salaried employees, as such plans may be amended from time to time.
(c) You represent and acknowledge that you do not possess any
literature, manuals, documents, data, information, order forms, price lists,
memoranda, correspondence, computer disks or tapes, customer or prospective
customer lists, customers' orders or records, whether compiled by you, a
customer or the Company, or coming to your knowledge or custody in connection
with your activities as an employee of the Company, or any machines, parts,
equipment, or other materials received by you from the Company or from any of
its customers in connection with such activities, excluding publicly available
documents and information.
5. NON-COMPETE AGREEMENT.(a) For a period of three years beginning on
the resignation date you will not, directly or indirectly without the prior
written consent of the Company:
(i) own, manage , operate, join, control, be employed by, or
participate in the ownership, management, operation or control of
(excepting less than 5% stock holdings for investment purposes), any of
the following companies: CalStrip Corporation, Gibraltar Steel, Xxxxx
Steel, Rome Strip Steel, Xxxxxx-Whittar, The Steel Company, Steel
Technologies, Thais Precision Steel, Xxxxxxxx Steel, Xxxxxx Xxxxx
Strip, Worthington Steel, or any other company engaged in Xxxxx Xxxxxxx
(Xxxxxx Xxxxxx, Xxxxxx and Mexico) in any business whose principal
activity is the cold rolling and sale of carbon or alloy strip steel;
or
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(ii) endeavor to employ or entice away from the Company, any
employee or customer of the company, or disparage in any way the
Company or its products to any employee or customer of the Company.
(b) In consideration of the covenants set forth in this paragraph 5,
during the two-year period beginning January 1, 2000, the Company will pay you
an amount equal to $175,000 per year in equal monthly installments.
(c) The provisions of this paragraph 5 are not intended to prevent you
from obtaining other employment, but are intended to protect the Company from
the use of its trade secrets, confidential information and relationships with
customers and vendors. You agree that the covenants set forth in this paragraph
5 are reasonable. You further agree that any breach of the terms of this
paragraph 5 would result in irreparable injury and damage to the Company for
which the Company would have no adequate remedy at law, and that in the event of
any such breach the Company shall be entitled to an immediate injunction and
restraining order to prevent such breach, without having to prove damages, in
addition to any other remedies to which the Company may be entitled at law or in
equity. Should the arbitrator or a court determine, however, that any provision
of any of such covenants is unreasonable, either in period of time, geographical
area or otherwise, the parties hereto agree that the covenant shall be
interpreted and enforced to the maximum extent that such arbitrator or court
deems reasonable.
(d) In the event of any breach of the provisions of this paragraph 5,
the Company may terminate all payments and other consideration owing to you
pursuant to this agreement (including all payments and other consideration
described in paragraphs 2 and this paragraph 5), and will have no further
obligation to you arising out of your separation from employment with the
Company or this agreement, excepting only such benefits, if any, to which you
may be entitled under the Pension Plan or the Cold Metal Products, Inc. Thrift
Plan.
6. ACKNOWLEDGMENTS. By signing this Agreement, you expressly
acknowledge and agree that:
(a) You have read and full understand the terms of this Agreement;
(b) You understand that this Agreement constitutes a full, final and
binding settlement of all matters covered by this Agreement and that this
Agreement constitutes a release of all claims, known and unknown, which relate
to your employment or separation from employment including, without limitation,
claims under the Age Discrimination in Employment Act;
(c) You understand that this Agreement does not waive any rights or
claims arising after this Agreement goes into effect;
(d) The payments and benefits described above are significantly more
valuable than any payments or benefits you would be entitled to receive under
the Company's normal termination policies;
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(e) You have been advised to consult an attorney prior to signing this
Agreement.
(f) You have had adequate opportunity to request and have received all
information you need to understand this Agreement and have been offered
sufficient time, that is, at least twenty-one (21) days to consider whether to
sign this Agreement; and
(g) You have knowingly and voluntarily entered this Agreement without
any duress, coercion or undue influence by anyone.
7. ARBITRATION. We hereby agree that all disputes arising under or
relating to this agreement will be submitted to arbitration in Cleveland, Ohio
in accordance with the rules of the American Arbitration Association, before a
panel of three (3) arbitrators, one selected by each of the parties and the
third selected by the arbitrators selected by the parties. The arbitrators' fees
will be paid by the Company, but each party will pay his or its own attorney's
fees and other costs.
8. MISCELLANEOUS. (a) You and the Company agree that this Agreement
contains the complete agreement between you and the Company and that there are
no other agreements or representations relating in any way to the subject matter
of this Agreement.
(b) This Agreement will become effective on the 7th day after you sign
it. During the seven (7) days after you sign this Agreement, you may revoke it
by giving written notice to the Company, in which event this Agreement will not
go into effect.
So that there is no misunderstanding, if a signed copy of this letter
is not received by us by August 14, 1998, the special severance arrangement
described in this letter will be deemed to be withdrawn.
COLD METAL PRODUCTS, INC.
By: /s/ R. Xxxxxxx Xxxxxxxx
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ACCEPTED AND AGREED:
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
Date: August 13, 1998
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