SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(SERP)
This Agreement entered into this 19/th/ of September, 2000, between California
Steel Industries, Inc., a corporation having its principal place of business at
00000 Xxx Xxxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx 00000 (hereinafter called the
"Company") and Xx. Xxxxx X. Xxxx (hereinafter called "Executive").
WITNESSETH:
WHEREAS, Executive born August 24, 1954, now in the capacity of
Vice-President, Administration, has been employed by the Company since May 4,
1997, and by the reason hereof has acquired experience and knowledge of
considerable value to the Company; and
WHEREAS, the Company wishes to offer an inducement to Executive to remain
in its employ by compensating him beyond his regular salary for services which
he has rendered or will hereafter render; and
WHEREAS, Executive is willing to continue in the employ of the Company
until his retirement;
NOW THEREFORE, it is mutually agreed as follows:
(1) For the purpose of this agreement, the following terms have the meaning set
forth below:
a) "Full-time Employment" means employment on a full time basis with the
Company or any wholly owned subsidiary thereof.
b) "Termination of the Executive's Employment for Cause" means
termination of the Executive's employment after providing the Company
with materially false reports concerning the Executive's business
interests or employment-related activities; making materially false
representations relied upon by the Company in furnishing information
to shareholders; maintaining an undisclosed, unauthorized and material
conflict of interest in the discharge of duties owned by the Executive
to the Company, misconduct causing serious violation by the Company
state or federal laws; theft of Company funds or assets; conviction,
in a personal criminal case (excluding traffic violations and other
similar misdemeanors); poor and unacceptable performance determined by
the Board of Directors of the Company.
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c) "Designated Beneficiary" means the person Executive designates to
receive the benefit in case of his death.
d) "Short Term Incentive" is a variable cash reward, regulated by a
specific Company policy, which the Executive may receive yearly,
depending on his performance during the period.
e) "Salary" is the actual cash payment made by the Company in a
consistent and permanent basis to compensate the Executive job. It
excludes any variable payment such as bonus, or other indirect
payments like car allowances and its related expenses like fuel and
maintenance, life insurance, health plans, benefits, profit sharing,
etc.
(2) Executive is currently employed by Company in the capacity of Vice
President, Administration.
(3) If Executive remains in the continuous employ of Company, he shall retire
from active employment with the Company on the first day of the calendar
month following the month in which he reaches age sixty-five (65), that is
September 1, 2019.
(4) Upon said retirement the Company, commencing the first day of the month
following the date of such retirement, shall pay executive a benefit during
180 months. The monthly benefit value will be one twelfth of the
multiplication of 2.5% (two and half percent) times the length of time
measured in years since 1997, limited to 18 years, times Executive's
average annual total compensation. The average annual total compensation
means the average of its Salary plus the Short Term Incentive of the
highest 3 years of the last 5 years of activity.
(5) Effective August 24, 2000, the Executive began vesting the above benefit at
a rate of 4% a year, continuing yearly except for the year he turns 65,
when the vesting rate will be 24%. The payment of this vested benefit will
start-up at the first day of the calendar month following the month in
which he reaches age sixty-five (65).
(6) If the termination of Executive's employment is on account of death prior
to attaining age sixty-five (65), the Company agrees to pay the Executive's
designated beneficiary a benefit, equal to his vested benefit, during 180
months.
(7) Executive always can designate a beneficiary, but in the absence of such
designation, the beneficiary will be deemed to be the spouse to whom the
Executive is married on the date of his death. It is the responsibility of
the Executive to designate such beneficiary in writing, in form and manner
satisfactory to the Company, and file such designation with the Company.
The Company will issue a receipt of the designation.
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(8) If the termination of Executive's employment is on account of a long-term
disability recognized by the Social Security, the Executive will receive a
benefit, upon his termination, during 180 months, equal to his vested
benefit.
(9) If the death of Executive occurs after commencement of payments under
paragraph four above, the Company shall continue such payment in amount and
duration to the Executive's Designated Beneficiary, as if the said
Executive had survived. Such designated beneficiary shall also be empowered
to name in a signed written statement to Company a second beneficiary to
receive the balance of payments or to have such payments paid to the state.
(10) If the termination of the Executive's employment is a Termination of the
Executive's Employment for Cause as defined in Section (1)b) above, not
withstanding any other provision of this Agreement , the Executive will not
be entitled to receive any benefit under this Agreement.
(11) The SERP provided hereunder shall be in addition to Executive's annual
salary as determined by the Board of Directors of the Company and shall not
affect the right of Executive to participate in any current or future
Company retirement plan or in any supplemental compensation arrangement
which constitutes a part of the Company's regular compensation structure.
(12) It is agreed that neither Executive, nor his wife, nor any other Designated
Beneficiary, shall have any right to commute, sell, assign, transfer or
otherwise convey the right to receive any payments hereunder which payments
and the right thereto are expressly declared to be nonassignable and
nontransferable; and any attempted assignment or transfer is deemed to be
null and void by Company.
(13) If Company shall acquire an insurance policy or annuity contract or any
other asset in connection with the liabilities assumed by it hereunder it
is expressly understood and agreed that neither Executive nor any
beneficiary of Executive shall have any right with respect to, or claim
against such policy or other asset except as expressly provided by he terms
of such policy or in the title to such other asset. Such policy or asset
shall not be deemed to be held under any trust for the benefit of Executive
of his beneficiaries or to be held in any way as collateral security for
the fulfillment of the obligation of the Company under this agreement
except as may be expressly provided by the terms of such policy of title to
such other asset. It shall be and remain, a general, unpledged,
unrestricted asset of the Company.
(14) In the event of a "change of control" of Company wherein the successor does
not expressly assume all obligations and liabilities under the SERP,
Company will pay to Executive an amount of money equal to the discounted
present value of the current vested benefit. Such payment to be made in a
single lump sum within 30 days of the "change of control."
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(15) The benefits under this Agreement will be independent of, and in addition
to, any other Agreement that may exist from time to time between the
parties hereto, or any other compensation payable by Company to Executive,
whether as salary, bonus or otherwise. This Agreement will not be deemed to
constitute a contract of employment between the parties hereto, nor will
any provision hereof restrict the right of Company to discharge Executive,
or restrict the right of Executive to terminate the Executive's employment.
(16) Payment of benefits under this agreement shall cease and there shall be no
further payments if Executive becomes employed at a competing flat-rolled
steel mill physically located within any of these 13 Western states:
California, Arizona, Washington, Oregon, Alaska, Hawaii, Utah, Nevada,
Montana, Wyoming, Idaho, Colorado and New Mexico.
(17) This Agreement will be governed by the laws of the State of California.
(18) This Agreement may be revoked or amended in whole or in part by a writing
signed by both of the parties hereto.
IN WITNESS WHEREOF, Company has caused this Agreement to be signed in its
Corporate Name by its duly authorized officers, and impressed with its
corporate seal, attested by its Secretary, and Executive has hereunto set his
hand and seal, all on the day and year first above written.
ATTEST: CALIFORNIA STEEL INDUSTRIES, INC.
By: /s/ Xxxxxxx Xxxxxxxx By: /s/ C. Xxxxxxxx Xxxxxxxxx
-------------------------------------- -----------------------------
Xxxxxxx Xxxxxxxx C. Xxxxxxxx Xxxxxxxxx
Executive Vice President - Operations President & CEO
(Corporate SEAL) Executive: /s/ Xxxxx X. Xxxx
----------------------
Xxxxx X. Xxxx
Witness: /s/ [ILLEGIBLE]^^
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