Exhibit 43
SETTLEMENT AND RELEASE AGREEMENT
Agreement dated as of April 3, 1998 between Handy & Xxxxxx, a New
York corporation (the "Company"), WHX Corporation, a Delaware corporation
("WHX"), HN Acquisition Corp., a New York corporation (the "Purchaser"),
and Xxxxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Purchaser has commenced a tender offer to purchase
all the issued and outstanding shares of the Company (the "Tender Offer"),
pursuant to an offer to purchase dated March 6, 1998 and a related letter
of transmittal of the same date;
WHEREAS, the Company and the Purchaser have entered into an
Agreement and Plan of Merger dated as of March 1, 1998 (as it may be
amended and modified from time to time, the "Merger Agreement"), providing
for the merger of the Purchaser with and into the Company following
completion of the Tender Offer;
WHEREAS, the Executive is entitled to certain payments from the
Company, contingent upon a change of control of the Company, the occurrence
of certain events after a change of control of the Company, or upon
retirement of the Executive from the Company, pursuant to agreements and
arrangements listed on Schedule A to this Agreement (the "Compensation
Arrangements");
WHEREAS, the successful completion of the Tender Offer will
constitute a change of control of the Company for the purposes of the
Compensation Arrangements and, as a result, the amounts described in
Schedule B to this Agreement will be paid to the Executive and the payments
and benefits described in Schedule C to this Agreement will or, in certain
instances may, become payable by the Company;
WHEREAS, in order to achieve certainty in the relations among the
parties after the Purchaser accepts shares for payment pursuant to the
Tender Offer (the "Tender Closing") (the date of which is anticipated to be
April 7, 1998), and to give effect to certain agreements they have made
concerning the Compensation Arrangements, the parties wish to enter this
Settlement and Release Agreement confirming and restating the amounts which
the Executive is entitled to receive from the Company under the
Compensation Arrangements, and providing for the release, subject to the
terms of this Agreement, of the Company, the Purchaser and WHX from any
obligation other than those described in this Agreement, and of the
Executive from certain obligations to which he might otherwise be subject.
NOW THEREFORE, in consideration of the mutual covenants contained
herein, the parties agree as follows:
1. AMOUNTS TO BE PAID ON TENDER CLOSING
The amounts specified in Schedule B to this Agreement shall be paid
by the Company to the Executive immediately prior to the Tender Closing.
2. AMOUNTS TO BE PAID AFTER TENDER CLOSING
The payments and benefits specified in Schedule C to this Agreement
shall be made and provided by the Company to the Executive, in the amounts
and at the times provided in the relevant Compensation Arrangements,
following the Tender Closing.
3. RELEASE
3.1 General releases:
(a) The Executive:
(i) agrees not to xxx or file any charges of discrimination, or
any other action or proceeding with any local, state and/or
federal agency or court; and
(ii) waives, discharges and releases the Company, WHX, their
affiliates, subsidiaries, directors, officers, employees,
representatives, agents and their successors and assigns from any
and all actions, causes of action, suits, debts, dues, sums of
money, accounts, reckonings, bonds, bills, specialties,
covenants, contracts, controversies, agreements, promises,
variances, trespasses, liabilities, damages, judgments, extents,
executions, claims and demands, whether known or unknown,
whatsoever, in law, admiralty or equity
arising out of or relating in any way to the Executive's employment
with the Company prior to the Tender Closing, or to the Executive's
separation from employment with the Company prior to or
contemporaneously with the Tender Closing.
The claims covered by this paragraph (a) include, without
limitation, claims under all laws, rules or regulations as currently
in effect, or as may exist from time to time, relating to employment
and related matters, including without limitation Title VII of the
Civil Rights Act of 1964; the Age Discrimination in Employment Act of
1967; the Civil Rights Act of 1866; the Civil Rights Act of 1991; the
Rehabilitation Act of 1973; the Americans with Disabilities Act of
1990; the Worker Adjustment and Retraining Notification Act of 1988;
the Older Workers Benefit Protection Act of 1990; the Pregnancy
Discrimination Act of 1978; the Employee Retirement Income Security
Act of 1974; the Family and Medical Leave Act of 1993; Fair Labor
Standards Act; and any and all contract, tort, wrongful termination or
other retaliation claims in connection with workers' compensation
claims.
(b) The Company and WHX:
(i) agree not to xxx or file any charges or any other action or
proceeding with any local, state or federal agency or court; and
(ii) waive, discharge and release the Executive from any and all
actions, causes of action, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants,
contracts, controversies, agreements, promises, variances,
trespasses, liabilities, damages, judgments, extents, executions,
claims and demands, whether known or unknown, whatsoever, in law,
admiralty or equity, other than for any acts of Executive
constituting embezzlement, fraud, or deliberate dishonesty;
arising out of the Executive's employment with the Company prior to
the Tender Closing, relating to the payments made under this
Agreement, or arising out of the Executive's separation from
employment with the Company prior to or contemporaneously with the
Tender Closing.
3.2 Nothing in the foregoing release or in this Agreement shall in any way
limit or affect the Executive's rights to indemnification (including
advancement of expenses) pursuant to (i) the Company's Certificate of
Incorporation and By-laws, (ii) Section 5.12 of the Merger Agreement,
and (iii) the provisions of the New York Business Corporation Law.
3.3 The Company and WHX waive, discharge and release the Executive from
any obligation to mitigate damages arising from breach of this
Agreement, or any payment obligation arising under this Agreement, by
seeking alternative employment or otherwise. Moreover, the Company
and WHX agree that no payment or damages arising under this Agreement
shall be reduced by any compensation received by the Executive from
any employer of the Executive other than the Company, or from any
other source.
3.4 The waivers, discharges and releases made by the Executive under this
Section 3 shall be contingent upon the full and timely payment and
provision by the Company of amounts payable to and benefits receivable
by the Executive described in the Schedules to this Agreement.
3.5 Employee-at-will; release of severance entitlements: The Executive
acknowledges that following the Tender Closing and the payment of the
amounts specified in Schedule B that his status will be that of an
employee-at-will and that should his employment be terminated following the
Tender Closing he will not be entitled to any cash severance or any other
payments or benefits other than those provided in Schedule C to this
Agreement or required by law unless he enters into an agreement with the
Company after the Tender Closing providing for such a severance payment.
3.6 Continuing effect of Compensation Arrangements: The Compensation
Arrangements shall have no further force or effect after the Tender Closing
EXCEPT insofar as they provide for the payments and benefits listed in
Schedule B (solely with respect to any adjustment to the gross-up for
golden parachute excise taxes) and Schedule C of this Agreement, in which
respect they shall continue to govern the nature, amount and timing of all
such payments and benefits.
4. RESTRICTION TO EMPLOYMENT RELATIONSHIP
The parties acknowledge that this Agreement is intended to apply only
to rights, obligations and claims arising out of the Compensation
Arrangements and the employment relationship (or its termination) between
the Executive and the Company. In particular, and without limiting the
effect of the previous sentence, this Agreement does not apply to, limit or
affect any rights which the Executive may have in relation to the Tender
Offer or the Merger in his capacity as a shareholder of the Company
(including rights arising out of the ownership of shares that were
originally received by the Executive as compensation for his services as an
employee).
5. DISCLOSURE OF INFORMATION.
5.1 In the course of the Executive's employment with the Company, whether
past or in the future, the Executive has received, and will continue to
receive, information that gives the Company an advantage over its
competitors, and which is confidential and proprietary, relating to names
and preferences of customers, the costs and profits of particular lines,
products and markets, technological data, computer programs, know-how,
potential acquisitions, sources of financing, corporate operating and
financing strategies, expansion plans and similar related information
(together, the "Confidential Material"). Confidential Material shall not
include any information that (i) is generally available to the public
(other than as a result of disclosure by the Executive), or (ii) becomes
available to the Executive on a non-confidential basis from a source other
than the Company, provided that such source is not known by the Executive
to be bound by a confidentiality agreement with, or other obligation of
secrecy to, the Company. At no time during the period commencing on the
date first written above and continuing through the third anniversary of
the Tender Closing, shall the Executive individually or jointly with
others, for the benefit of himself or any third party, (i) in whole or in
part, disclose such Confidential Material to any person, firm, corporation,
association or other entity for any reason or purpose whatsoever or (ii)
make use of any such Confidential Material for his own purposes or for the
benefit of any person, firm, association, corporation or other entity
(except the Company) under any circumstances; provided, however, that the
Executive may disclose any Confidential Material as required by court order
or which is relevant to any dispute or proceeding between the Executive and
the Company. The Executive acknowledges that any disclosure of the
Confidential Material would cause material and irreparable harm to the
Company and its business.
5.2 All papers, books and records of every kind and description relating
to the business and affairs of the Company or its affiliates, whether or
not prepared by the Executive, shall be the sole and exclusive property of
the Company, and the Executive shall surrender them to the Company at any
time upon request by the Chairman of the Board or any authorized officer.
5.3 The provisions of this Section 5 will survive the expiration or
earlier termination of the term of this Agreement.
6. COVENANTS NOT TO COMPETE OR INTERFERE.
6.1 From and after the date of the Tender Closing, for a period of thirty-
six (36) months, the Executive will not (i) directly or indirectly, own an
interest in (except for ownership of less than 5% of the outstanding equity
interest of any entity), operate, join, control, or participate in, or be
connected as an officer employee, agent, director (other than as a director
of a publicly held corporation of which the Executive is a director as of
the date hereof), independent contractor, partner, shareholder or principal
of any corporation, partnership, proprietorship, firm, association, person,
or other entity engaged in a business competitive with that of the Company
or its subsidiaries as conducted on the date of this Agreement, in any
states within the continental United States where the Company or its
subsidiaries are engaged in business, the United Kingdom, Denmark, Canada,
Panama and Bermuda (a "Competing Business") or (ii) knowingly solicit or
accept business for a Competing Business (x) from any customer of the
Company or its subsidiaries, or (y) from any prospect of the Company with
whom the Executive met to solicit or with whom the Executive discussed a
business transaction during the twelve months preceding the termination of
the Executive's employment with the Company.
6.2 For a period ending thirty-six (36) months from and after the Tender
Closing, the Executive will not directly or indirectly, as a sole
proprietor, member of a partnership or stockholder, investor, officer or
director of a corporation, or as an employee, agent, associate or
consultant of any person, firm or corporation, after reasonable
investigation, knowingly solicit any employee of the Company or its
affiliates to terminate his employment with the Company.
6.3 It is the desire and intent of the parties that the provision of this
Section 6 shall be enforced to the fullest extent permissible under the
laws and public policies applied in each jurisdiction in which enforcement
is sought. Accordingly, if any particular portion of this Section 6 shall
be adjudicated to be invalid or unenforceable, this Section 6 shall be
deemed amended to delete therefrom the portion thus adjudicated to be
invalid or unenforceable, such deletion to apply only with respect to the
operation of this Section 6 in the particular jurisdiction in which such
adjudication is made. The provisions of this Section 6 will survive the
expiration or earlier termination of the term of this Agreement.
7. ARBITRATION
Any dispute or controversy between the Company and the Executive,
whether arising out of or relating to any of the Compensation Arrangements
(to the extent they remain in force) or this Agreement, or the breach of
any of the Compensation Arrangements or this Agreement, shall be settled by
arbitration before a single arbitrator administered by the American
Arbitration Association in accordance with its Commercial Rules then in
effect and judgment on the award rendered by the arbitrator may be entered
in any court having jurisdiction thereof. Such arbitration shall take
place in the New York City metropolitan area. The arbitrator shall have
the authority to award any remedy or relief that a court of competent
jurisdiction could order or grant, including, without limitation, the
issuance of an injunction. However, either party may, without
inconsistency with this arbitration provision, apply to any court having
jurisdiction over such dispute or controversy and seek interim,
provisional, injunctive or other equitable relief until the arbitration
award is rendered or the controversy is otherwise resolved. Either party
may also apply to a court for enforcement of the remedy or relief the
arbitrator orders or grants. The Company shall reimburse the Executive,
upon demand, for all costs and expenses (including without limitation
attorneys' fees) reasonably incurred by the Executive in good faith in
connection with this arbitration provision, including without limitation in
connection with any such application undertaken by the Executive in good
faith, as well as for all such costs and expenses reasonably incurred by
the Executive in connection with entering or enforcing the award rendered
by the arbitrator. Except as necessary in court proceedings to enforce
this arbitration provision or an award rendered hereunder, or to obtain
interim relief, neither a party nor an arbitrator may disclose the
existence, content or results of any arbitration hereunder without the
prior written consent of the Company.
8. MISCELLANEOUS
8.1 Interpretation: References to a party shall include that party's
successors and assigns, and in the case of references to the Company shall
include any entity related to WHX to which all or a substantial portion of
the business or assets of the Company are transferred at any time following
the completion of the Merger Agreement (and WHX shall cause the Company to
include an appropriate term to that effect in any agreement providing for
such a transfer), provided that any such inclusion shall not detract from
the Company's own obligations under this Agreement.
8.2 Injunctive Relief: If there is a breach or threatened breach of the
provisions of Section 5 or 6 of this Agreement, the Company shall be
entitled to an injunction restraining the Executive from such breach.
Nothing herein shall be construed as prohibiting the Company from pursuing
any other remedies for such breach or threatened breach.
8.3 Acknowledgment: Executive acknowledges (i) that the provisions of
Sections 5 and 6 are reasonable and necessary for the protection of the
Company and (ii) that each provision, and the period or periods of time,
geographic areas and types and scope of restrictions on the activities
specified herein are, and are intended to be, divisible. Without affecting
the generality of section 8.6 herein, if any provision of such Sections 5
or 6, including any sentence, clause or part thereof, shall be deemed
contrary to law or invalid or unenforceable in any respect by a court of
competent jurisdiction, the remaining provisions shall not be affected, but
shall, subject to the discretion of such court, remain in full force and
effect and any invalid and unenforceable provisions shall be deemed,
without further action on the part of the parties hereto, modified, amended
and limited to the extent necessary to render the same valid and
enforceable.
8.4 Governing law: This Agreement shall be governed by and construed in
accordance with the laws of New York (without regard to the choice-of-law
rules thereof).
8.5 Entire agreement: This Agreement (including the Schedules hereto),
the Merger Agreement and the Compensation Arrangements to the extent they
remain in force under Section 3.6 of this Agreement, constitute the entire
agreement between the parties with respect to compensation of the
Executives contingent upon, relating to, or due as a result of termination
of employment contemporaneous with, the change of control of the Company,
and supersedes any prior understandings, agreements, or representations by
or among the parties, written or oral, to the extent they related in any
way to such subject matter.
8.6 Severability: To the extent possible, this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited or
invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating or
affecting in any manner whatsoever the remainder of such provision or the
remaining provisions of this Agreement.
8.7 Counterparts: This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which
taken together constitute one and the same Agreement.
SIGNED
HANDY & XXXXXX
By:________________________
As Its: ______________________
WHX CORPORATION
By:________________________
As Its: ______________________
HN ACQUISITION CORP.
By:________________________
As Its: ______________________
______________________________
Executive
SCHEDULE A
Agreements and Arrangements with respect to which the Executive is a party
or a participant
1. Agreement dated as of May 1, 1989 between the Executive and the
Company (the "1989 Agreement");
2. Amendment to the 1989 Agreement dated as of September 28, 1995 (the
"1995 Amendment");
3. Restated Amendment to the 1989 Agreement dated as of February 26, 1998
(the "1998 Amendment");
4. Supplemental Executive Retirement Plan (as amended and restated as of
January 1, 1998) (the "SERP");
5. Handy & Xxxxxx Executive Post-Retirement Life Insurance Program (the
"Life Insurance Program");
6. Handy & Xxxxxx Management Incentive Plan - Corporate Group
Participants (as amended) (the "MIP");
7. Handy & Xxxxxx Long-Term Incentive Plan (as amended) (the "LTIP");
8. Handy & Xxxxxx Long-Term Incentive Stock Option Plan and its
successor, the Handy & Xxxxxx 1995 Omnibus Stock Incentive Plan (as
amended) (the "Stock Option Plans").
9. Handy & Xxxxxx Long-Term Care Plan;
10. Handy & Xxxxxx Pension Plan (the "Qualified Pension Plan");
11. 401(k) plan maintained for the Executive by the Company.
SCHEDULE B
Compensation Payable to the Executive on the Tender Closing
1. SEVERANCE PAYMENTS:
Three year's salary plus three times 1997 MIP bonus. $2,376,000.00
Paid pursuant to Section 4.1 of the 1989 Agreement
and Section 1 of the 1998 Amendment(1).
2. LUMP SUM PAYABLE UNDER THE SERP: $2,334,092.00
Per calculations by Xxxxxx Xxxxx, attached as
Exhibit 1 hereto.
3. TENDER OF 5TH CYCLE RESTRICTED STOCK UNDER THE LTIP: $1,062,223.50
30,134 shares, to be tendered at the tender offer
price of $35.25 per share.
See attached Exhibit 2 for details of awards of
Restricted Stock in the fifth cycle.
Note that this Agreement does not relate to stock that
was granted in earlier cycles and that has already
vested, in respect of which the Executive will receive
the tender offer price as an ordinary stockholder.
4. CASH OUT OF 6TH CYCLE RESTRICTED STOCK UNDER THE LTIP: $395,963.25
11,233 shares x $35.25 tender offer price per share
See attached Exhibit 2 for details of awards of
Restricted Stock in the sixth cycle.
The sixth cycle grants of Restricted Stock are to be
awarded pro-rata with the proportion of the sixth cycle
which will have elapsed up to 3 April 1998, the date of
the Tender Closing. The sixth cycle began on 1 January
1997 and would normally terminate on 31 December 1999.
5. INTERIM 1998 MIP AWARD: $77,043.00
This interim award is based on the 1997 award, pro-rated
for the period elapsed in 1998 up to the date of the
Tender Closing.
6. TRANSFER OF LIFE INSURANCE POLICY: $172,722.75
Pursuant to Section 5(b) of the Life Insurance Program.
Cash surrender value of the policy is $97,173.82
Amount payable to the Executive includes a gross-up for
income tax.
7. OTHER: $44,475.89
(Transfer of title to the Executive's company car,
pursuant to Section 4.1(d) of the 1989 Agreement)
8. REQUIRED GROSS-UP FOR EXCISE TAX ON GOLDEN PARACHUTE $2,424,941.41
PAYMENTS (AND EXCISE AND INCOME TAXES ON GROSS-UP
AMOUNT):
Paid pursuant to Section 11 of 1989 Agreement.
See Exhibit 2 for excise tax computations.(2)
9. TOTAL OF ITEMS 1 THROUGH 8: $8,887,461.80
Cash Out of Stock Options
CASH OUT OF STOCK OPTIONS AWARDED UNDER THE STOCK OPTION PLANS: $6,898,612.00
See attached Exhibit 2 for the numbers of options granted and
their exercise prices.
The value of each option is the difference between the
exercise price of the option as shown on the attached
Exhibit 2 and the $35.25 tender offer price per share.
---------------
1 The references to provisions of the Compensation Arrangements in this
Schedule are explanatory and for reference only. They do not incorporate
such provisions into this Agreement, save such provisons from the effect
of Section 3.6 of this Agreement, or otherwise imply that such provisions
have any continued effect.
2 The payment shown in line 9 assumes that the Executive will pay the excise
tax shown in Exhibit 2. If any additional excise tax is assessed against
the Executive he shall be entitled to an additional Payment from the
Company to reimburse the Executive for such additional excise tax (plus
any interest charged) plus a gross-up payment as provided in Section 11 of
the 1989 Agreement. If a determination (as defined in section 1313 of the
Internal Revenue Code of 1986, as amended) is made that the Executive owes
less excise tax than is shown in Exhibit 1, the Executive shall pay the
amount of any refunded excise tax (and any statutory interest paid on the
refund) to the Company promptly upon receipt. The Executive shall also
pay to the Company any tax savings which the Executive realizes as a result
of the repayment of the excise tax to the Company.
SCHEDULE C
Compensation and Benefits Payable to the Executive after the Tender Closing
1. Payment of health insurance premiums of the Executive and his spouse
for their respective lives, under Section 7A of the 1989 Agreement (as
added by the 1995 Amendment);
2. Payment of group life insurance premiums for three years under Section
4.1(c) of the 1989 Agreement;
3. Payment of life insurance policy premiums, under Section 5(b) of the
Life Insurance Program;
4. Payment of long-term care health insurance premiums for life, under
the Long-Term Health Care Plan;
5. Pension under the Qualified Pension Plan, the accrued value of which
as of the date of the Tender Closing is $8,357.90 per month, and payment
under any other qualified plans operated by Handy & Xxxxxx in which the
Executive is a participant;
6. Payment of awards deferred under the MIP.
7. Payment of the balance in the Executive's 401(k) plan maintained by
the Company. The balance in that plan at March 17, 1998 was $186,257.83;
the final balance will be determined on the date of payment.
