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EXHIBIT 10.12
SETTLEMENT AGREEMENT
AND MUTUAL RELEASE
THIS SETTLEMENT AGREEMENT AND MUTUAL RELEASE ("Agreement") made and
entered into by and between XXXXX X. XXXXXXXXX ("Xxxxxxxxx") and OLYMPIC STEEL,
INC. (an Ohio corporation, which together with its subsidiaries, divisions and
affiliated corporations is collectively referred to as "OSI") evidences the
following agreements:
WHEREAS, Xxxxxxxxx was employed by OSI as Vice President - Operations
and currently serves as a Director of OSI; and
WHEREAS, on or about August 29, 1997, OSI terminated the employment of
Xxxxxxxxx; and
WHEREAS, on or about December 15, 1997, Xxxxxxxxx filed suit in the
Cuyahoga County Court of Common Pleas against OSI and Xxxxxxx Xxxxxx, the same
being entitled "Xxxxx X. Xxxxxxxxx v. Olympic Steel, Inc., et al." and known as
case number 345272 alleging, among other claims, wrongful breach of his
employment contract and breach of fiduciary duty (hereinafter the "Litigation");
and
WHEREAS, OSI and Xxxxxx have expressly and continuously denied the
validity and merit of each claim that has been asserted by Xxxxxxxxx; and
WHEREAS, it is deemed prudent and advisable to avoid the uncertainty
and burden of further litigation and to settle and forever resolve disputes and
claims that Xxxxxxxxx claims or may claim in the future on account of or in
connection with any acts or omissions of OSI and/or Xxxxxxx Xxxxxx or any of its
or their privies, prior to the date of this Agreement in connection with or
arising out of Xxxxxxxxx'x employment with OSI and disputes and claims that OSI
and/or Xxxxxx claims or may claim in the future on account of or in connection
with any acts or omissions of Xxxxxxxxx prior to the date of this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and
undertakings contained herein and other valuable consideration, the receipt,
adequacy and sufficiency of which is hereby acknowledged, the parties agree as
follows:
1. RESIGNATION. Simultaneously with the execution of this Agreement,
Xxxxxxxxx shall deliver to the Secretary of OSI his written resignation as a
director of OSI effective as of the date hereof. Said resignation shall be in
the form of Exhibit "A" attached. By executing this Agreement, Xxxxxxxxx
acknowledges that he ceased to be an officer or employee of OSI
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as of August 29, 1997. In addition, Xxxxxxxxx covenants and agrees to resign as
an officer, director and/or employee of all OSI subsidiaries, divisions and
affiliates effective as of the date of this Agreement. Simultaneously with the
execution of this Agreement, Xxxxxxxxx shall also deliver his written
resignation as a Trustee of OSI's profit sharing and 401(k) plans (hereinafter
the "Plans"). Said resignation shall be in the form of Exhibit "B" attached and
will be effective as of the date hereof.
2. INDEMNITY. OSI will indemnify and hold harmless Xxxxxxxxx from and
against any loss, cost, liability, charge, expenses, claim, demand, or cause of
action resulting from, relating to or arising out of Xxxxxxxxx'x actions or
inactions as a Trustee of the Plans. OSI further confirms that, subject to the
terms therein set forth, Xxxxxxxxx shall be entitled to the benefit of Article V
of the Code of Regulations of OSI providing for indemnity and defense of a
former employee, officer and director who was or is a party or is threatened to
be made a party to any threatened, pending, or completed action, suit, or
proceeding.
3. PAYMENT OF FUNDS TO XXXXXXXXX.
a. Eight (8) days after the execution and delivery of this Agreement,
provided the same has not been revoked in writing by Xxxxxxxxx as provided in
paragraph 15 of this Agreement, OSI agrees to pay Xxxxxxxxx the sum of Seven
Hundred Fifty Thousand Dollars ($750,000.00), payable as follows:
(1) At the expiration of the revocation period stated herein,
One Hundred Seventy-Five Thousand Dollars ($175,000.00);
(2) On July 1,1998, One Hundred Twenty-Five Thousand Dollars
($125,000.00);
(3) On January 1, 1999, One Hundred Twelve Thousand Five
Hundred Dollars ($112,500.00);
(4) On July 1, 1999, One Hundred Twelve Thousand Five Hundred
Dollars ($112,500.00);
(5) On January 1, 2000, One Hundred Twelve Thousand Five
Hundred Dollars ($112,500.00); and
(6) A final payment on July 1, 2000, One Hundred Twelve
Thousand Five Hundred Dollars ($112,500.00);
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and, in the event Xxxxxxxxx shall die prior to receipt of full payment
hereunder, the unpaid installments shall be paid to Xxxxxxxxx'x wife, Xxxxx, if
living, otherwise to the executor or administrator of his estate.
x. Xxxxxxxxx understands and agrees that OSI will withhold
federal, state and local income taxes from the installment payments due
hereunder as well as any other amounts required by law.
4. FORGIVENESS OF CLAIMS BV OSI. In addition to the consideration
stated in paragraph 3 above, OSI hereby forgives any claims against Xxxxxxxxx
for receivables owed OSI, Xxxxxxxxx'x personal cellular telephone charges which
have been paid by OSI, Xxxxxxxxx'x car allowance advance, Xxxxxxxxx'x travel
allowance advance and the unamortized balance, if any, of the insurance premium
of the life insurance policy referred to in paragraph 5 on Xxxxxxxxx'x life.
5. LIFE INSURANCE. Simultaneously with the execution of this Agreement,
OSI agrees to assign to Xxxxxxxxx all of its right, title and interest, if any,
in a certain life insurance policy on Xxxxxxxxx'x life issued by the
Metropolitan Life Insurance Company in the face amount of Five Million Dollars
($5,000,000), which policy expired on December 31, 1997, the same being policy
number 960-150-024A. From and after December 31, 1997, Xxxxxxxxx shall be
responsible for all future premiums on said policy.
6. TERMINATION OF RELATIONSHIP. Xxxxxxxxx agrees that this Agreement
completely and irrevocably terminates his employment relationship with OSI and
expressly waives and relinquishes any claim for reinstatement or rehire either
on a preferential basis or otherwise.
7. MEDICAL BENEFITS/RETIREMENT PLAN BENEFITS. Xxxxxxxxx acknowledges
that he is currently participating in OSI's comprehensive health care insurance
programs or plans at Xxxxxxxxx'x cost as authorized under COBRA. Xxxxxxxxx shall
be permitted to continue participating in said programs or plans as provided by
law. OSI agrees to cooperate with Xxxxxxxxx, to do all things reasonably
necessary, consistent with the terms of the Plans and the law, and to encourage
the administrator and trustee thereof to facilitate and expedite Xxxxxxxxx'x
withdrawal and/or "rollover" of all benefits to which he is entitled under the
Plans and under any other employee pension benefit plan at any time sponsored by
OSI.
8. REPRESENTATION OF XXXXXXXXX/OSI. Xxxxxxxxx represents and warrants
to OSI that during the thirty months prior to the termination of his employment
with OSI he has not knowingly taken or omitted to take any action upon which a
material Business Related Claim, as defined herein, could be asserted against
OSI. A "Business Related Claim" shall mean and refer to a claim asserted against
OSI prior to March 1, 2000 (a) by any past or current employee alleging a
violation of any federal or state anti-discrimination laws or (b) by persons not
employed by OSI, by business entities which are not subsidiaries or affiliates
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of OSI or by any governmental agency, which claim is based solely upon acts or
omissions of Xxxxxxxxx effected without the actual knowledge and participation
of any other executive officer or director of OSI who is employed by OSI on the
date of this agreement and no other claims. A claim shall be a "Business Related
Claim" only if the amount thereof is in excess of $50,000 (the "Minimum Amount")
exclusive of claims for exemplary damages, interest, penalties, attorney fees or
costs and then only if the relevant statute of limitations has not expired at
the time such claim is asserted. A claim shall cease to be a Business Related
Claim at such time as the relevant statute of limitations has expired if prior
thereto suit has not been commenced against OSI on such claim. A claim for which
OSI maintained insurance coverage under which OSI, without regard to deductibles
or co-insurance provisions, would be entitled to indemnity against loss or
liability shall not constitute a Business Related Claim except to the extent
such insurance coverage would be substantially impaired by the release of
Xxxxxxxxx pursuant to this Agreement or to the extent of any deductible or
co-insurance (if such amount exceeds the Minimum Amount). A claim which is based
upon an act or omission of Xxxxxxxxx as a member of the Board of Directors of
OSI or as a Trustee or Co-Trustee of an employee benefit plan sponsored or
maintained by OSI, shall not constitute a Business Related Claim.
OSI shall give Xxxxxxxxx written notice of the assertion of any claim
which is or could be deemed to be a Business Related Claim within thirty days
after OSI is made aware of such claim.
Nothing set forth in this paragraph 8 shall constitute an admission of
liability by Xxxxxxxxx, a waiver of any defenses or claims which Xxxxxxxxx may
assert, or an agreement by Xxxxxxxxx to defend or indemnify OSI or a basis for
the setoff or suspension of any payments due Xxxxxxxxx under this Agreement.
OSI represents and warrants to Xxxxxxxxx that as of the date of this
Agreement it has no knowledge, actual or constructive, of any Business Related
Claim, as herein defined, or of any other claim which has been or may be
asserted against OSI arising out of or in connection with any act or omission of
Xxxxxxxxx.
9. RELEASES OF CLAIMS AND COVENANT NOT TO XXX.
a. Subject to the obligation of OSI to make the payments
required in paragraph 3, above, Xxxxxxxxx for himself and his heirs, executors,
administrators, personal representatives, successors and assigns hereby
completely and forever releases, discharges and acquits OSI, its subsidiaries,
divisions, and affiliated corporations, its or their respective officers
(including the officer named in the Litigation), directors, shareholders,
agents, employees, successors, and assigns, from any and all claims, demands,
damages, actions, causes of action or suits at law or in equity, contract or
tort, of whatsoever kind or nature, including, by way of example and not by way
of limitation, all claims which Xxxxxxxxx has,
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had or may have of whatever kind or nature arising out of Xxxxxxxxx'x employment
and/or termination of employment with OSI to the date of this Agreement;
provided, however, that this release shall not extend to any claim Xxxxxxxxx may
have against OSI resulting from a breach of any of the representations,
warranties or covenants made by OSI under this Agreement or to any claim which
Xxxxxxxxx may assert against the directors and/or officers of OSI as a
shareholder of OSI derivatively on behalf of OSI with respect to matters
occurring after the date of this Agreement. For purposes of this Agreement, "all
claims" shall include, without limitation, all claims of any kind, whether known
or unknown, anticipated or unanticipated, past or present, or contingent or
fixed as of the date of this Agreement. "All claims" shall specifically include
but is not limited to the following: (i) claims arising out of Xxxxxxxxx'x
employment and/or termination of employment with OSI; (ii) claims and causes of
action under the Age Discrimination and Employment Act, the Older Workers'
Benefit Protection Act, the Americans with Disabilities Act, Title VII of the
Civil Rights Act, the Older Benefit Workers Protection Act, the Ohio Civil
Rights Act, and claims under any other federal, state or local law, statute or
regulation, dealing with employment; (iii) claims for wrongful or unjust
discharge, breach of contract, whether express or implied, promissory estoppel,
negligence or intentional conduct; negligence or intentional infliction of
emotional distress, defamation, breach of any implied covenant of good faith or
fair dealing, at common law or otherwise; (iv) claims for compensation in the
nature of wages, salary, bonuses, commissions, director fees, trustee fees,
travel and car allowance, fringe benefits, vacation pay, severance pay, back
pay, front pay, attorney fees, costs, business or other expenses or otherwise;
(v) claims under Employment Agreement dated December 31, 1983 or any amendment
or successor agreement thereto; and (vi) claims set forth in the pending
Litigation.
x. Xxxxxxxxx covenants and agrees that he will never institute
any claim or charge of employer discrimination with any governmental agency or
xxx OSI concerning any claims relating to Xxxxxxxxx'x employment and/or
termination of employment with OSI.
c. OSI, its subsidiaries, divisions and affiliated
corporations and Xxxxxx, for himself and his heirs, executors, administrators,
personal representatives and assigns, hereby completely and forever release,
discharge and acquit Xxxxxxxxx, his heirs, executors, personal representatives,
successors and assigns from any and all claims, demands, causes of action or
suits at law or in equity, contract or tort, of whatsoever kind or nature, which
OSI and/or Xxxxxx has, had or may have against Xxxxxxxxx to the date of this
Agreement; provided, however, that this release shall not extend to any claim
OSI may have as a result of the breach of any of the representations, warranties
or covenants made by Xxxxxxxxx under this Agreement. For purposes of this
Agreement "all claims" shall include, without limitation, all claims of any
kind, whether known or unknown, anticipated or unanticipated, past or present,
or contingent or fixed as of the date of this Agreement.
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10. DISMISSAL OF PENDING LITIGATION. Subject to the provisions of
paragraph 15, Xxxxxxxxx agrees to dismiss with prejudice the above-mentioned
Litigation pending in the Cuyahoga County Court of Common Pleas. Eight (8) days
after the execution and delivery of this Agreement, provided the same has not
been revoked in writing by Xxxxxxxxx as provided in paragraph 15, Xxxxxxxxx
agrees to file, or to deliver to counsel for OSI for filing, a judgment entry of
dismissal in the form attached as Exhibit "C."
11. COSTS AND ATTORNEY FEES. Each party shall be responsible for his or
its separate costs, expenses, attorneys' fees or otherwise.
12. CONFIDENTIALITY. The parties agree to maintain the terms and
conditions of this Agreement in strict confidence and agree that the terms and
conditions of this Agreement shall not be disclosed to third parties who are not
a party to this Agreement. Notwithstanding the within, nothing herein shall
prevent the parties from furnishing such information to their or its respective
attorneys, accountants, or as may be required by court order or pursuant to a
judicial summons or subpoena, or in any filings, prospectus, action or reports
which may be required by the Securities and Exchange Commission, and/or state
securities divisions or bureaus.
13. ADEA. Xxxxxxxxx recognizes and understands that, by executing this
Agreement, he shall be releasing OSI from any and all claims that he now has, or
may have, under the federal Age Discrimination in Employment Act of 1967, 29
U.S.C. 621, et seq., as amended ("ADEA"), by reason of any matter or thing
arising out of, or in any way connected with, directly or indirectly, any acts
or omissions which have occurred prior to and including the date of this
Agreement.
14. "CONSIDERATION PERIOD". OSI hereby notifies Xxxxxxxxx of his right
to consult with his chosen legal counsel before signing this Agreement. OSI
shall afford, and Xxxxxxxxx acknowledges receiving, not less than twenty-one
(21) calendar days in which to consider this Agreement to insure that his
execution of this Agreement is knowing and voluntary. In signing below,
Xxxxxxxxx expressly acknowledges that he has had at least twenty-one (21) days
to consider this Agreement and that his execution of same is with full knowledge
of the consequences thereof and is of his own free will.
15. "REVOCATION PERIOD"; ADEA. Both OSI and Xxxxxxxxx agree and
recognize that, for a period of seven (7) calendar days following Xxxxxxxxx'x
execution of this Agreement, Xxxxxxxxx may revoke this Agreement as to his
release of ADEA claims by providing written notice revoking the same, within the
seven (7) day period, to Olympic Steel, Inc., c/o Mr. Xxxxxxx Xxxxxx, President,
0000 Xxxxxxxx Xxxx, Xxxxxxx Xxxxxxx, Xxxx 00000.
16. CONFIDENTIAL INFORMATION. Except for information which is already
in the public domain, Xxxxxxxxx shall at all times hold in strictest confidence
any and all information which
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was treated as confidential by OSI. Xxxxxxxxx shall not be deemed to have
violated the foregoing covenant based upon the use of knowledge and/or
information acquired or accumulated by him in the course of his many years of
activity in the steel business and employment by OSI.
17. COMPROMISE OF DISPUTED CLAIMS. The parties acknowledge and agree
that this Agreement is made as part of a compromise of disputed claims. The
parties further acknowledge that the acceptance of the terms of this Agreement
shall not be construed or deemed to be evidence of any admission of any fact,
liability, matter or thing and that OSI continues to deny all claims made by and
liability to Xxxxxxxxx.
18. COOPERATION. Xxxxxxxxx covenants and agrees that upon the written
request of OSI, he will timely cooperate with OSI with respect to: (a) the
provisions of any business information or data reasonably needed by OSI to
conduct its business; (b) the defense of any threatened or actual claim made by
any customer, supplier, employee or other third party against OSI; (c) he will
testify and be available for deposition in any cause as a witness, if necessary;
and (d) as may be required to comply with legal process. Xxxxxxxxx agrees to
respond to such other reasonable requests calculated to comply with the terms of
this Agreement. Further, the parties agree to execute all documents reasonably
approved by their counsel as necessary to effectuate the terms of this
Agreement.
19. NON-DISPARAGEMENT. The parties covenant and agree that neither they
nor OSI's executive officers and directors shall make any statements, written or
oral, to any third party which disparages, criticizes, discredits or otherwise
operates to the detriment of Xxxxxxxxx and/or OSI, and/or his or its business
reputation and/or goodwill.
20. NON-INTERFERENCE. Xxxxxxxxx covenants and agrees that from and
after the execution of this Agreement and until December 31, 1999, neither he
nor any business entity in which he has a financial interest, shall, without the
prior written consent of OSI, induce or attempt to induce or solicit any
employee or other representative of OSI, or of its subsidiaries, divisions
and/or affiliated corporations to terminate his, her or its employment
relationship with OSI. It is expressly agreed that the employment of a former
employee or representative of OSI by Xxxxxxxxx or a business entity in which
Xxxxxxxxx has a financial interest more than sixty days after that former
employee or representative voluntarily terminates his, her or its employment
relationship with OSI shall not be a violation of this Agreement.
21. INVALIDITY. The parties to this Agreement agree that the invalidity
or unenforceability of any one provision or part of this Agreement shall not
render any other provisions or parts hereof invalid or unenforceable and that
such other provisions or parts shall remain in full force and effect.
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22. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties hereto, and there are no understandings between the parties
other than those specifically and expressly set forth in this Agreement. This
Agreement shall not be amended or modified in any manner except upon written
agreement by the parties.
23. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same Agreement. The signature of any party
to any counterpart, including any facsimile thereof, may be appended to any
other counterpart and when so appended shall constitute an original. The parties
further agree that upon request counterparts of this Agreement bearing original
signatures (as opposed to facsimile signatures) shall be exchanged.
24. PRESS RELEASE. Except if required by law, neither party shall issue
a press release regarding the terms of this Agreement.
25. SEC REPORTS. The parties acknowledge that as a holder of more than
5% of the outstanding shares of Common Stock of OSI and as a former director and
officer of the Company, Xxxxxxxxx has and has had various reporting obligations
under the Securities Exchange Act of 1934, as amended, pertaining to his
ownership of OSI shares. Xxxxxxxxx agrees that he is solely responsible for
filing such reports and has been solely responsible for such reports since
August 31, 1997.
26. GOVERNING LAWS. This Agreement shall be governed and interpreted
pursuant to the laws of the State of Ohio.
27. BINDING EFFECT. This Agreement shall inure to the benefit of not
only the parties but their respective heirs, successors, assigns, subsidiaries,
affiliates, parents, officers, directors, employees, shareholders, agents,
attorneys, and representatives and shall be binding not only upon the parties
but also the aforesaid respective privies.
28. MISCELLANEOUS. The parties hereby acknowledge and agree that:
a. The terms and benefits stated herein constitutes sufficient
consideration for this Agreement in that there are benefits which they may not
have received had they not signed this document; and
b. They have VOLUNTARILY and KNOWINGLY signed this Agreement
with full understanding of its terms and conditions after first consulting their
respective attorneys, Xxxx X. Xxxxxx, Esq. and Xxxxxx X. Xxxxxxxxx, Esq.
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IN WITNESS WHEREOF, the parties have represented to one another that
they have carefully read the foregoing terms of this Agreement, that they know
and understand the contents of this Agreement, that they have authority to
execute this Agreement, that they have undertaken to sign the same as their own
respective free act and deed having declared their intention to be bound
contractually by all such terms and conditions, and do hereby execute and
deliver this Agreement as of the date appearing below.
WITNESSED BY:
/s/ Xxxxxx X. Xxxxxxxxx /s/ Xxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx Xxxxx X. Xxxxxxxxx
/s/ Xxxx X. Xxxxxx Date: January 30, 1998
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Xxxx X. Xxxxxx
"Xxxxxxxxx"
OLYMPIC STEEL, INC.
/s/ Xxxxx Xxxx By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxx Xxxx Xxxxxxx X. Xxxxxx, CEO
/s/ Xxxxxx X. Xxxxxxxxx Date: January 30, 1998
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Xxxxxx X. Xxxxxxxxx
"OSI"
/s/ Xxxxx Xxxx /s/ Xxxxxxx X. Xxxxxx
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Xxxxx Xxxx Xxxxxxx X. Xxxxxx
/s/ Xxxxxx X. Xxxxxxxxx Date: January 30, 1998
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Xxxxxx X. Xxxxxxxxx
"Xxxxxx"
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