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Exhibit 10.4
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is dated as of January ___,
2000, and is entered into between WEIRTON STEEL CORPORATION, a Delaware
corporation (the "Company"), and XXXXX X. XXXXXXXXX (the "Employee").
WHEREAS, Employee and the Company desire to embody in this Agreement
the terms and conditions of Employee's employment by the Company;
NOW, THEREFORE, the parties hereby agree as follows:
1. Employment. The Company hereby employs the Employee and the Employee
hereby accepts employment from the Company upon the terms and conditions
hereinafter set forth.
2. Term. (a) The term of employment under this Agreement shall commence
on the date hereof and end on the date this Agreement is terminated by either
the Company or the Employee as hereinafter provided in this Section 2 or in
Section 17.
(b) The Company may, at its election, terminate the employment
of the Employee and related obligations of the Company under this Agreement as
follows:
(1) For Disability. Upon 30 days prior notice in the event the
Employee has been so incapacitated that he has been unable to perform the
services required of him hereunder for a period of 150 of 180 consecutive days
and such inability is continuing at the time of such notice. The Company, at its
sole cost and expense, shall continue to provide and keep in force during the
period of incapacity which remains after such termination, but not after age 65,
such income replacement, sickness and accident and health insurance coverages
for the Employee and his dependents of the types provided by the group benefit
plans of the Company for employees of
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the highest job classification under the Company's Program of Insurance Benefits
for Salaried Employees (the "Insurance Program"), which coverages shall be at a
level commensurate with other executive vice presidents.
(2) For Just Cause. "For just cause" upon notice of such
termination to the Employee. Termination of the Employee's employment by the
Company shall constitute a termination "for just cause" only if such termination
is for one of the following reasons: (i) conviction of a felony punishable by a
prison sentence of more than one year; (ii) habitual use of drugs without a
prescription or habitual, excessive use of alcohol to the extent that any of
such uses materially interferes with the Employee's performance of his duties;
(iii) refusal or failure, after written notice, by the Employee to perform or
discharge duties and responsibilities appropriate to his position as Executive
Vice President, Human Resources and Corporate Law which are properly assigned to
him by the Chief Executive Officer of the Company or the Board of Directors,
which refusal or failure amounts to an extended and gross neglect of his duties
to the Company; (iv) breach of Section 8 of this Agreement; or (v) breach of any
confidentiality Agreement between the Company and the Employee. Except as
otherwise specifically set forth in this Agreement or as otherwise prohibited by
law, all rights and obligations of the Employee, except such obligations as are
created by Sections 6, 7 and 8 hereof, and all obligations of the Company under
this Agreement, shall cease and terminate on, and as of, the date of termination
of employment for just cause.
(3) Without Cause. Without cause by not less than five days
prior notice in writing, provided that within 10 days of the effective date of
such termination the
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Company shall pay to the Employee a single lump sum amount (the "Lump Sum
Payment"), calculated as follows, where:
X is 24 months of Employee's base salary; 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 Corporation and paid by
Corporation to the appropriate agency for and on
behalf Employee.
Then, LUMP SUM PAYMENT = X + Y.
It is the intent of the parties that the foregoing
Lump Sum Payment calculation shall result in Employee's receipt of an amount
equal to 24 months of Employee's Base Salary net of all applicable federal,
state and local taxes, and Corporation's payment 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 date of
termination, Company shall continue to provide for the Employee the medical,
dental, life and disability insurance, which were provided to the Employee
immediately prior to such notice. Employee shall be treated as an inactive
employee for 24 months after the date of termination. If the Company is entitled
to terminate the employment of the Employee in accordance with subsection (1) or
if the Employee is at the time under an incapacity of a nature or type which
would entitle the Company to terminate such employment but for the passage of
the 180 consecutive day period set forth in subsection (1), the Company shall
not be deemed to have terminated his employment pursuant to this subsection (3).
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The Company shall be deemed to have agreed to a termination in
accordance with this subsection (3) from and after the date, without the consent
of the Employee (which may be obtained before or after the relevant event), (x)
the Employee is assigned duties other than those of Executive Vice President,
Human Resources and Corporate Law, (y) the Employee is required to report other
than to the Chief Executive Office or the Board of Directors of the Company, or
(z) the employee is required to reside other than in Weirton, West Virginia or
the Greater Pittsburgh Area in order to perform his duties for the Company.
(c) The Employee may terminate his employment hereunder upon
90 days notice thereof to the Company, and from and after the date of such
termination, the 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 written notice, the Company may terminate the
employment of the Employee at any earlier date of its choosing after receipt of
such written notice and prior to the expiration of the 90 day notice period.
3. Compensation.
(a) Salary and Bonus. The Company shall pay the Employee a
salary (the "Base Salary") of $240,000 per year as may be from time to time
increased by the Board of Directors of the Company (the "Board") or any
authorized committee thereof, provided that such increase shall be commensurate
with those granted to any other Executive Vice President of the Company. The
Base Salary shall be payable in such installments and at such times as conform
to the general payroll practices of the Company. The Employee shall be eligible
to participate in the Company's Performance Incentive Plan (the "Bonus Plan") at
a level commensurate with other Executive Vice President of the Company. In the
event the Employee's employment is
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terminated prior to the end of any fiscal year of the 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 numerator of which is the number
of days elapsed in the fiscal year to and including the date termination becomes
effective and the denominator of which is 365. If the Employee's employment 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 and Expenses. The Company shall make available
to the Employee an automobile in accordance with the Company's automobile policy
generally applicable to Executive Vice Presidents.
(c) Life Insurance. The Company will provide to the Employee
life insurance which shall pay to any beneficiary designated by the Employee an
amount equal to four (4) times the Base Salary in effect at the time of death
while the Employee is actively employed or subject to the post-termination
benefit extension provisions of Section 2(b)(3). Upon termination in accordance
with Section 2(b)(1) or, after Employee is age 59-1/2, in accordance with
Section 2(b)(3) or 2(c), or, if later, the expiration of the benefit extension
provisions of Section 2(b)(3), the Company will deliver to the Employee a fully
paid life insurance policy which shall pay to any beneficiary designated by the
Employee an amount equal to $250,000 and which shall be owned by the Employee.
(d) Other Benefit Programs. The Company shall provide, during
the term hereof, coverage for the Employee under the Insurance Program as
applicable from time to time to its salaried employees of the highest job
classification and commensurate with
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coverage of other Executive Vice Presidents. In the event that employment is
terminated pursuant to Section 2 under circumstances where the Company has an
obligation after the date of termination 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 the Employee by any third party employer, with such third party
coverages being deemed primary and the coverages maintained by the 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. The
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. The Employee shall be eligible for, and
participate in, such other fringe benefits, including club dues, as are
generally available to salaried employees of the Company of the highest job
classification and commensurate with other executive vice presidents, and
nothing in this Agreement shall be deemed to preclude the Company from granting
such additional remuneration or benefits to the Employee as it shall determine
in its sole discretion. If this Agreement is terminated in accordance with
Section 2(b)(1) or after the Employee is age 59-1/2, in accordance with Section
2(b)(3) or 2(c), then the Company shall provide to Employee and his dependents
medical benefits commensurate with the medical benefits provided to retired
employees at Class 56 and above. The Employee shall not receive compensation
pursuant to the Profit Sharing Plan of the Company.
(e) Supplemental Executive Retirement Plan. The Employee shall
be entitled to participate in the Company's Supplemental Executive Retirement
Plan ("SERP"),
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established in 1994 for management employees in Job Class 56 and above, upon
Employee's commencement of employment. the Company shall (x) credit the Employee
with five (5) years of "Benefit Service" (as defined in the SERP) under the SERP
and (y) fund the trust related to the SERP for such years of Benefit Service,
upon Employee's commencement of employment.
(f) Stock Option. From time to time, the Company shall cause
to be granted to the Employee stock options to purchase common stock of the
Company or, in lieu thereof or in addition thereto, stock appreciation rights,
in amounts and at such times as are commensurate with those granted to executive
vice presidents of the Company.
(g) Vacation. The Company shall grant the Employee four (4)
weeks of fully compensated vacation per year under this Agreement.
4. Duties. The Employee is engaged as the Executive Vice President,
Human Resources and Corporate Law 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 the Chief Executive Officer or the Board in
connection with the conduct of its business, including, but not limited to,
management of the Human Resources, Legal, Economic Development and Public and
Community Relations functions. If the Employee is elected or appointed a
director or officer of the Company or any subsidiary thereof during the term of
this Agreement, the Employee will serve in such capacity without further
compensation.
5. Extent of Services. The Employee shall devote his entire business
time, attention and energies to the businesses of the Company and shall not
during the term of this Agreement be 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
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preventing the Employee from investing his personal assets in businesses which
do not compete with the Company in such form or manner as will not require any
significant services on the part of the 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 the Employee may serve
as a director of a company having businesses which do not compete with the
Company or as otherwise authorized by the Board of Directors, so long as such
service does not interfere with his duties and services hereunder, and except
that the 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 the Company.
6. Disclosure of Information. The Employee recognizes and acknowledges
that the Company's trade secrets and proprietary processes as they may exist
from time to time are valuable, special and unique assets of the Company's
business, access to and knowledge of which are essential to the performance of
the Employee's duties hereunder. The 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 the Employee make use of any such property for his
own purposes or for the benefit of any person, firm, corporation or other entity
(except the 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
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(provided that he was not responsible, directly or indirectly, for such secrets
or processes entering the public domain without the Company's consent).
7. Inventions. The Employee hereby sells, transfers and assigns to the
Company or to any person, or entity designated by the Company all of the entire
right, title and interest of the Employee in and to all inventions, ideas,
disclosures and improvements, whether patented or unpatented, and copyrightable
material made or conceived by the 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 the Company, or which otherwise relate to or pertain to the
business, functions or operations of the Company. The employee shall communicate
promptly and disclose to the Company, in such form as the 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 the Company such formal transfers and assignments and such other
papers and documents as may be required of the Employee to permit the Company or
any person or entity designated by the Company to file and prosecute the patent
applications and, as to copyrightable material, to obtain copyright thereof. Any
invention relating to the business of the Company and disclosed by the Employee
within one (1) year following the termination of employment shall be deemed to
fall within the provisions of this Section unless proved to have been first
conceived and made following such termination.
For purposes of Sections 5, 6, 7 and 8, unless the context otherwise
requires, the term "Company" shall include divisions, subsidiaries and
controlled affiliated entities of the Company, and "businesses" of the Company
shall include businesses of any of such entities.
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"Significant Competitive Acts" shall consist of any of the following acts: (i)
inducing employees to leave the employ of the Company or (ii) tortuously
interfering with any business relationship of the Company, including, without
limitation, relationships with customers, vendors, suppliers, lessors or
lessees.
8. Nondisparagement. For the period commencing on the termination of
this Agreement and continuing for one year thereafter, the Employee will not, in
any form, disparage the Company, its officers or directors or otherwise make
comment adverse to the Company concerning any aspect of the business or
practices, past or then present, of the 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, the
Company shall be entitled to an injunction from a court of competent
jurisdiction restraining the Employee from such breach. Subject to Section 13,
nothing herein shall be construed as prohibiting the Company from pursuing any
other remedies 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 registered mail to his residence in
case of the Employee, or to the Secretary, Weirton Steel Corporation, Xxxxx
Xxxxxxx Xxxxx, Xxxxxxx, Xxxx Xxxxxxxx 00000, in the case of the Company.
11. Waiver of Breach. A waiver by the Company or the 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 the Employee and the 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 judgement upon any award may be entered in
any court having jurisdiction thereof.
13. Legal Fees and Expenses. The Company shall promptly reimburse the
Employee for the reasonable legal fees and expenses incurred by the Employee in
connection with enforcing any right of the Employee pursuant to and afforded by
this Agreement; provided, however, that the Company only will reimburse the
Employee for such legal fees and expenses if, in connection with enforcing any
right of the 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 made or
(iii) the Company and the Employee have entered into a settlement agreement
providing for the payment to the Employee of any or all amounts due hereunder.
14. Entire Agreement; Governing Law. This instrument contains the
entire agreement of the parties, superseding any prior agreement or arrangement,
whether written or oral. It may be changed only by a writing signed by the party
against whom enforcement is sought. This Agreement shall be governed by the laws
of the State of Delaware without regard to its principles of conflicts of laws.
15. Prior Employment Agreements. This Agreement supersedes any and all
employment agreements between the Company and the Employee and such agreements
are null
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and void except that any stock option agreements between the Company and the
Employee shall continue to be obligations of the Company and the Employee.
16. 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.
17. Termination of Term of Agreement. If the Employee, in the
reasonable opinion of the of the Company, breaches Section Eight of this
Agreement by disparaging the Company, its officers or directors or breaches a
confidentiality agreement between the Company and the Employee, which are
respectively defined as events of just cause in Sections 2(b)(2)(iv) and (v),
the Company, in its sole discretion and without waiving any other right it has
or may have at law, under this Agreement or under any other agreement or policy
applicable to the Employee, may provide written notice to the Employee that the
term of this Agreement is ended immediately upon delivery of such notice. The
termination of the term of this Agreement shall not be deemed an assignment of
other duties or a change in reporting relationships under Sections 2(b)(3)(x) or
(y) of this Agreement and the termination of the term shall not be constructive
or actual discharge of the Employee from employment with the Company for
purposes of this Agreement. No Lump Sum Payment under Section 2(b)(3) of this
Agreement will be due or payable in connection with or as a result of delivery
of the notice ending the term of this Agreement. If a notice of the termination
of the term of this Agreement is delivered to the Employee, the Employee will be
an employee at will of the Company without benefit of this or
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any other employment agreement or representation of continued employment,
express or implied.
IN WITNESS WHEREOF, the parties have executed this agreement as of the
day first hereinabove written.
WEIRTON STEEL CORPORATION
By /s/ Xxxxxxx X. Xxxxxxxx
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Title President and CEO
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/s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
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