Exhibit 10.21
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is dated as of December 20,
2001, (the "Effective Date") and is entered into between WEIRTON STEEL
CORPORATION, a Delaware corporation (the "Company"), and XXXX X. XXXXXX (the
"Employee").
WHEREAS, Employee and Company have previously entered into an
Employment Agreements dated as of March 13, 2000 and January 25, 2001, and
whereas the Company now desires to continue to employ the Employee as its
President and Chief Executive Officer subsequent to a restructuring and desires
to embody in this Agreement the terms and conditions of Employee's continued
employment by the Company.
NOW, THEREFORE, the parties hereby agree as follows:
1. Employment. Company hereby employs Employee and Employee
hereby accepts employment from Company upon the terms and conditions hereinafter
set forth, and all previously executed Employment Agreements between the parties
are hereby superseded and of no further force and effect.
2. Term and Termination of Employment; Survival of Obligations.
(a) Term. The term of employment under this Agreement shall
commence on the Effective Date and end on the date this Agreement is
terminated by either the Company or Employee in accordance with the
provisions of this Agreement (the "Termination Date").
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(b) Termination by Company. Company may, at its election,
terminate the employment of Employee and related obligations of Company
under this Agreement as follows:
(1) For Disability. Upon 30 days prior notice in writing in
the event Employee has been so incapacitated that he has been
unable to perform the services required of him hereunder for a
period of at least 150 of 180 consecutive calendar days and
such inability is continuing at the time of the giving of such
notice. Company, at its sole cost and expense, shall continue
to provide and keep in force during the period of incapacity
which remains after the Termination Date, but not after
Employee attains age 65, income replacement, sickness and
accident and health insurance coverages for Employee and his
dependents of the types provided by the group benefit plans of
Company for employees of the highest job classification under
Company's Program of Insurance Benefits for Salaried Employees
(the "Insurance Program"), which coverages shall be at a level
commensurate with those provided to employees in the highest
job classification.
(2) For Just Cause. "For just cause" upon notice in writing of
such termination to Employee. Termination of Employee's
employment by Company shall constitute a termination "for just
cause" only if such termination is for misfeasance,
malfeasance or nonfeasance in the performance of his duties or
for conviction of an offense involving moral turpitude.
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(3) Without Cause. Without cause upon not less than 5 days
prior notice in writing, provided that within 10 days of the
Termination Date Company shall pay to Employee a single lump
sum amount (the "Lump Sum Payment"), calculated as follows,
where:
X is 24 months of Employee's Base Salary (as
hereinafter defined); and
Y is any applicable federal, state or local tax or
liability imposed on Employee as a result of the Lump
Sum Payment, including, without limitation, social
security taxes, income taxes and excise taxes, which
amount shall be withheld by Company and paid by
Company to the appropriate agency for and on behalf
of Employee.
Then, LUMP SUM PAYMENT = X + Y.
It is the intent of the parties that the foregoing Lump Sum Payment calculation
shall result in the receipt by Employee of an amount equal to 24 months of
Employee's Base Salary net of all applicable federal, state and local taxes, and
the payment by Company to the appropriate taxing authority of any applicable
federal, state or local tax or liability imposed on Employee. Furthermore, for a
period of 24 months following the Termination Date, Company shall continue to
provide for Employee the medical, dental, life and disability insurance, which
were provided to Employee immediately prior to the giving of such notice. In the
event of a termination pursuant to this Section 2(b)(3), Employee shall be
treated as an inactive employee for 24 months after the Termination Date. If
Company terminates the employment of Employee in accordance with Section 2(b)(1)
or if Employee is at the time under an incapacity of a nature or type which
would entitle Company to terminate such employment, but for the failure of the
passage of the
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180 consecutive day period set forth in subsection (1) of Section 2(b), Company
shall not be deemed to have terminated the employment of Employee without cause
pursuant to this Section 2(b)(3).
Company shall be deemed to have agreed to a termination
without cause in accordance with this subsection (3) of Section 2(b) from and
after the date, without the consent of the Employee (which may be obtained
before or after the relevant event), (w) Employee is assigned duties other than
those of President and Chief Executive Officer, (x) Employee is required to
report other than to the Board of Directors of the Company, (y) Employee is
required to reside other than in the Weirton, West Virginia area or Greater
Pittsburgh area in order to perform his duties for Company or (z) 180 days have
elapsed from the presentation to the Company's shareholders for a vote on a
proposal involving the sale of substantially all of the Company's assets or a
merger or consolidation of the Company with one or more entities whereby the
Company would not be the surviving entity, provided that Employee notifies the
Company of his election to treat any of the above events (w), (x), (y) or (z) as
a termination without cause within 30 days of the event in writing by sending
such notice to the Company via First Class U.S. mail addressed to: Weirton Steel
Corporation, 000 Xxxxx Xxxxxxx Xxxxx, Xxxxxxx, XX 00000.
(c) Termination by Employee. Employee may terminate his employment
hereunder upon 90 days prior notice in writing thereof to Company, in which
event from and after the Termination Date, Company shall have no further
obligations under this Agreement, except as required by law or as specifically
set forth herein; provided, that upon the receipt of such notice,
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Company may without further financial obligation terminate the employment of the
Employee at any earlier date of Company's choosing after its receipt of such
notice and prior to the expiration of the 90 day notice period.
(d) Survival of Obligations. Except as otherwise specifically set
forth in this Agreement or as otherwise prohibited by law, all rights and
obligations of Employee, except such obligations as are created by Sections 6, 7
and 8 hereof, and all obligations of Company under this Agreement, shall cease
on, and as of, the Termination Date.
3. Compensation.
(a) Salary and Bonus. The Company shall pay Employee a
salary (the "Base Salary") of $395,000 per year or such greater amount as may be
from time to time be authorized by the Board or any authorized committee
thereof. The Base Salary shall be payable in such installments and at such times
as conform to the general payroll practices of Company. Employee shall be
eligible to participate in Company's Management Incentive Plan or any other
Bonus Plan (the "Bonus Plan") at a level commensurate with his position as
President and Chief Executive Officer of Company targeted to an annual incentive
payment of 50% of annual base compensation for attaining annual goals and 120%
of annual base compensation for attaining long term incentive goals as
established by the Management Development and Compensation Committee of the
Board of Directors. In the event the employment of Employee is terminated by
Company prior to the end of any fiscal year of Company, except pursuant to
Section 2(b)(2) or 2(c), the bonus, if any, payable pursuant to the Bonus Plan
for the fiscal year in which termination occurs shall be pro-rated by
multiplying the bonus amount by a fraction, the
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numerator of which is the number of days elapsed in the fiscal year to and
including the Termination Date and the denominator of which is 365. If the
employment of Employee is terminated pursuant to Section 2(b)(2) or 2(c) no
bonus shall be paid with respect to the fiscal year in which such termination
occurs.
(b) Automobile Expenses. Company shall reimburse Employee for his
business-related automobile expenses in accordance with the Company's policy
generally applicable to its Senior Executives.
(c) Other Benefit Programs. Company shall provide, during the term
hereof, coverage for Employee under the Insurance Program and its other benefit
programs, as applicable from time to time to its salaried employees of the
highest job classification. In the event that the employment of Employee is
terminated pursuant to Section 2 under circumstances where Company has an
obligation after the Termination Date to continue coverages under one or more
health care plans in the Insurance Program, or otherwise, such coverages in all
cases shall be coordinated with similar or comparable coverages thereafter
provided to Employee by any third party employer, with such third party
coverages being deemed primary and the coverages maintained by Company being
deemed secondary or supplementary, so as to be reduced on a dollar-for-dollar
basis by the amount of benefits payable under such third party coverages.
Employee shall submit to any required physical examination and shall provide any
required information in connection with the acquisition or maintenance of any
insurance pursuant to this Agreement. Employee shall be eligible for, and
participate in, such other perquisites, as are generally available to salaried
employees of Company of the highest job classification and
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commensurate with other Senior Executives, and nothing in this Agreement shall
be deemed to preclude Company from granting such additional remuneration or
benefits to Employee as it shall determine in its sole discretion. In addition
to the foregoing, once Employee has attained 10 years of service with the
Company, for purposes of the Weirton Steel Corporation Executive Healthcare
Program, effective July 1, 1999, (the "EHP"), he shall be credited with an
additional 5 years of service solely for the purposes of meeting the eligibility
requirements of Section 2.01 of the EHP.
(d) Supplemental Executive Retirement Plan. As of the Effective
Date, Employee shall be entitled to participate in the Company's Supplemental
Executive Retirement Plan and Supplemental Senior Executive Retirement Plan or
any successor plan thereto (collectively the "SERPs"). Employee shall receive
"Benefit Service" under the SERPs for his prior employment with Company and
Company shall fund the SERPs for such prior years of Benefit and for Employee's
future Benefit Service, (net of the previous funding of the SERPs paid to the
Employee in accordance with the terms of the SERPs in effect at the time of his
earlier termination of employment in 1996, all of which is reflected by the
letter from Buck Consultants dated April 23, 2001 attached hereto and made a
part hereof as Appendix "A"). It is the intent of the Company and the Employee,
upon the attainment of 10 years of Benefit Service with the Company, that
Employee shall have a vested benefit from the SERP (or SERPs as the case may be)
calculated at 70% of his Average Monthly Earnings, subject to the offsets
specified in the Senior SERP (or SERPs as the case may be) and payable as
specified in the SERPs and that in the year in which the 10th anniversary of the
Plan occurs, that Employee's account shall be
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substantially funded, subject to earlier funding in the event the Employee is
terminated pursuant to Section 2(b)(3) hereof.
(e) Stock Options. Employee shall receive an option to purchase
200,000 shares of the Company's common stock, which option shall be granted as
of the 1st day of February 2001 at a price determined in accordance with the
terms of the Company's 1998 Employee Stock Option Plan.
(f) In addition to the life insurance provided to Employee
pursuant to Paragraph 3(c) hereof (Other Benefit Programs four times annual Base
Salary subject to a maximum of $1.2 million), Company will provide additional
life insurance coverage for Employee in the amount of $1.5 million on a term
policy basis, payable to such beneficiaries as Employee may from time to time
designate. In the event of a termination of this Agreement by the Company or the
Employee, Employee may continue the insurance coverage described herein by
exercising any conversion privilege contained in said term policy.
4. Duties. Employee is engaged as President and Chief Executive
Officer of the Company and shall perform and discharge well and faithfully the
duties commensurate with such position which may be assigned to him from time to
time by Company in connection with the conduct of its business. Employee shall
serve as a director of the Company and as an officer or director any subsidiary
or affiliated entity of the Company during the term of this Agreement, without
further compensation.
5. Extent of Services. Employee shall devote his entire business
time, attention and energies to the businesses of Company and shall not during
the term of this Agreement be
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engaged in any other business activity, whether or not such business activity is
pursued for gain, profit or other pecuniary advantage; but this shall not be
construed as preventing Employee from investing his personal assets in
businesses which do not compete with Company in such form or manner as will not
require any significant services on the part of Employee in the operation of the
affairs of the companies in which such investments are made and in which his
participation is solely that of an investor, except that Employee may serve as a
director of a company having businesses which do not compete with Company or as
otherwise authorized by the Board, so long as such service does not interfere
with his duties and services hereunder, and except that Employee may purchase
securities in any corporation whose securities are regularly traded, provided
that such purchases shall not result in his collectively owning beneficially at
any time 1% or more of the equity securities of any corporation engaged in a
business competitive to that of Company, and provided, further, that such
investments and activities do not constitute violations of the Company's Code of
Ethics or its established and written policies.
6. Disclosure of Information. Employee recognizes and
acknowledges that Company's trade secrets and proprietary processes as they may
exist from time to time are valuable, special and unique assets of Company's
business, access to and knowledge of which are essential to the performance of
Employee's duties hereunder. Employee will not, during or after the term of his
employment, in whole or in part, disclose such secrets or processes acquired by
virtue of his employment hereunder or his service as a director to any person,
firm, corporation, association or other entity for any reason or purpose
whatsoever, nor shall Employee make use of any such property for his own
purposes or for the benefit of any person, firm,
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corporation or other entity (except Company) under any circumstances during or
after the term of his employment, provided, that after the term of his
employment, these restrictions shall not apply to such secrets and processes
which are then in the public domain (provided that he was not responsible,
directly or indirectly, for such secrets or processes entering the public domain
without Company's consent).
7. Inventions. Employee hereby sells, transfers and assigns to
Company or to any person, or entity designated by Company all of the right,
title and interest of Employee in and to all inventions, ideas, disclosures and
improvements, whether patented or unpatented, and copyrightable material made or
conceived by Employee, solely or jointly during the period of his employment
hereunder which relate to methods, apparatus, designs, products, processes or
devices, sold, leased, used or under consideration or development by Company, or
which otherwise relate to or pertain to the business, functions or operations of
Company. Employee shall communicate promptly and disclose to Company, in such
form as Employee may be required to do so, all information, details and data
pertaining to the aforementioned inventions, ideas, disclosures and improvements
and to execute and deliver to Company such formal transfers and assignments and
such other papers and documents as may be required of Employee to permit Company
or any person or entity designated by Company to file and prosecute the patent
applications and, as to copyrightable material, to obtain copyright thereof. Any
invention relating to the business of Company and disclosed by Employee within
one (1) year following the Termination Date shall be deemed to fall within the
provisions of this Section, unless proved by Employee to have been first
conceived and made following the Termination Date.
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For purposes of Sections 5, 6, 7 and 8, hereof unless the
context otherwise requires, the term "Company" shall include divisions,
subsidiaries and controlled affiliated entities of the Company, and "businesses"
of Company shall include businesses of any of such entities.
8. Nondisparagement. For the period commencing on the Effective
Date and continuing for 24 months following the Termination Date, Employee will
not, in any form, disparage Company, its officers or directors or otherwise make
comment adverse to Company concerning any aspect of the business or practices,
past or present, of Company
9. Injunctive Relief. If there is a breach or threatened breach
by Employee of any of the provisions of Sections 6, 7 or 8 of this Agreement,
Company shall be entitled to an injunction from a court of competent
jurisdiction restraining Employee from such breach. Nothing herein shall be
construed as prohibiting Company from pursuing any other remedies against
Employee for such breach or threatened breach.
10. Notices. Any notice required or permitted to be given under
this Agreement shall be in writing and sent by certified mail to his residence
in the case of Employee, or to the Secretary, Weirton Steel Corporation, Xxxxx
Xxxxxxx Xxxxx, Xxxxxxx, Xxxx Xxxxxxxx 00000, in the case of Company.
11. Waiver of Breach. A waiver by Company or Employee of a breach
of any provision of this Agreement by the other party shall be in writing and
shall not operate or be construed as a waiver of any subsequent breach by the
other party.
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12. Arbitration. Subject to the provisions of the first sentence
of Section 9 hereof, any dispute between Employee and Company arising under this
Agreement, whether or not a case or controversy, shall be resolved solely by
arbitration in Pittsburgh, Pennsylvania in accordance with the rules of the
American Arbitration Association, and judgment upon any award may be entered in
any court having jurisdiction thereof.
13. Legal Fees and Expenses. Company shall promptly reimburse
Employee for the reasonable legal fees and expenses incurred by Employee in
connection with enforcing any right of Employee pursuant to and afforded by this
Agreement; provided, however, that Company only will reimburse Employee for such
legal fees and expenses if, in connection with enforcing any right of Employee
pursuant to and afforded by this Agreement, either (i) a judgment has been
rendered in favor of the Employee by a duly authorized court of law; (ii) an
arbitration award in favor of the Employee has been issued; or (iii) Company and
Employee have entered into a settlement agreement providing for the payment to
Employee of any or all amounts due hereunder.
14. Entire Agreement; Governing Law. This Agreement contains the
entire agreement of the parties, superseding any prior agreement or arrangement
between the parties concerning the employment of Employee by Company, whether
written or oral, and any such agreements are null and void except that any prior
stock option agreements between the Company and the Employee shall continue to
be obligations of Company and Employee. This Agreement may be changed only by a
writing signed by the party against whom enforcement is
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sought. This Agreement shall be governed by the laws of the State of Delaware
without regard to its principles of conflicts of laws.
15. Severability. If any provision of this Agreement or the
application thereof to any circumstance shall to any extent be held invalid or
unenforceable, the remainder of this Agreement shall not be affected thereby,
and shall be valid and enforceable to the fullest extent permitted by law, but
only if and to the extent such enforcement would not materially and adversely
frustrate the parties' essential objectives as expressed herein.
IN WITNESS WHEREOF, the parties have executed this agreement as of the
day first hereinabove written.
WEIRTON STEEL CORPORATION
By
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Title
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Xxxx X. Xxxxxx
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