FORM OF
SEVERANCE AGREEMENT
This SEVERANCE AGREEMENT dated as of _________ __, 1997 between REPUBLIC
ENGINEERED STEELS, INC., a Delaware corporation (the "Company"), and ________
________ (the "Employee").
W I T N E S S E T H :
WHEREAS, the Company recognizes continued contributions by Employees to the
growth of the Company and in appreciation and recognition of Employee's efforts,
the Company desires to provide Employee with an incentive to remain in the
Company's employ; and
WHEREAS, the Company has determined that appropriate steps should be taken
to reinforce and encourage the continued attention and dedication of the
Employee; and
WHEREAS, the Company desires to induce the Employee to remain in the
employment of the Company by providing for certain severance benefits; and
WHEREAS, the Employee desires to continue employment with the Company
subject to the terms and conditions hereinafter provided.
NOW, THEREFORE, the parties hereto intending to be legally bound hereby
agree to the following.
1. DEFINITIONS. The capitalized terms used herein shall have the
meanings ascribed to them below.
"Cause" shall mean (i) willful or gross neglect by Employee of his
duties and other obligations to the Company that is not cured within fifteen
(15) days after Employee receives notice thereof, (ii) willful misconduct in the
performance by Employee of his duties, (iii) the commission of any act of fraud,
misappropriation or embezzlement in the performance by Employee of his duties,
(iv) the diversion of any corporate opportunity of the Company, or (v) the
commission of a felony resulting in the Employee's conviction, by trial or plea,
and which, as determined in good faith by the Board of Directors of the Company,
constitutes a crime involving moral turpitude.
"Disability" shall mean Disability as defined in the Disability Plan.
"Disability Plan" shall mean the Company's Salaried Employees'
Disability Income Plan as in effect on the date hereof.
2. TERM. This Agreement shall commence on the date hereof and shall
terminate after Employee's employment has terminated and the Company has fully
performed all of its obligations resulting therefrom, if any.
3. TERMINATION AND DISABILITY.
(a) In the event the Employee becomes Disabled, the Employee shall
receive benefits that at the least are at the levels and on the terms provided
in the Disability Plan.
(a) In the event the Company wishes to terminate the Employee (which
for purposes hereof shall include a layoff for an indefinite term other than as
the result of a Disability), the Company shall communicate such termination by a
Notice of Termination and, if the termination is for Cause, the Notice of
Termination shall indicate the termination provisions in this Agreement relied
upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Employee. Termination by the
Company shall not be effective without a Notice of Termination.
(b) The termination of the Employee by the Company hereunder shall be
effective on the date on which a Notice of Termination is given (hereinafter the
"Date of Termination").
4. SEVERANCE COMPENSATION UPON CERTAIN TERMINATIONS OF EMPLOYMENT BY THE
COMPANY.
(a) In the event that the Company shall terminate the Employee's
employment other than for Disability or Cause, THEN the Company shall pay to
the Employee as severance compensation (hereinafter "Severance Compensation")
an amount equal to two (2) [three (3)] times the Employee's total
compensation for the twelve (12) month period immediately preceding the Date
of Termination. The Employee's total compensation shall mean (i) the
Employee's annual base salary in effect on the Date of Termination, which
base salary shall include for purposes of this Agreement any supplemental
amount payable under the Company's program known as "Target 60", (ii) the
annual amount then paid by the Company to lease an automobile for Employee or
the amount of any automobile allowance provided to Employee, (iii) the annual
cost of life insurance then furnished to him by the Company, and (iv) the
annual cost to the Company of any other benefits then provided to Employee
that are not required to be provided under this Agreement after the Date of
Termination (including without limitation under any cafeteria plan or other
supplemental benefit program) and the amount contributed by the Company on
behalf of the Employee for the calendar year ending immediately prior to the
Date of Termination to any pension plan of the Company The Severance
Compensation shall be due and payable in a lump sum, in cash, on the fifth
day following the Date of Termination. In addition to the payment of
Severance Compensation hereunder, in the event that the Company shall
terminate the Employee's employment other than for Disability or Cause,
Employee, together with his dependents, will continue following such
termination of employment to participate fully, with no contribution to
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the cost required of him or them, in all accident and health plans maintained or
sponsored by the Company immediately prior to the Date of Termination, or to
receive substantially the equivalent coverage (or the full value thereof in
cash) from the Company, until the second anniversary of the Date of Termination.
(b) If (1) the Employee dies during his employment, (2) the Employee
voluntarily resigns as an employee of the Company, or (3) the Company terminates
the Employee's employment for Cause (as defined herein) by a Notice of
Termination in accordance with subsection (a) of this Section, then the
Company's sole obligation hereunder shall be payment to the Employee (or his
representative) of any compensation due the Employee through the Date of
Termination, and no further payments of any kind shall thereafter be required to
be made by the Company to the Employee hereunder.
5. NO OBLIGATION TO MITIGATE DAMAGES; NO EFFECT ON OTHER CONTRACTUAL
RIGHTS.
(a) The Employee shall not be required to mitigate damages or the
amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the Employee as the
result of employment by another employer after the Date of Termination, or
otherwise.
(b) The provisions of this Agreement, and any payment provided for
hereunder, shall not reduce any amounts otherwise payable, or in any way
diminish the Employee's existing rights, or rights which would accrue solely as
a result of the passage of time, under any benefit plan, incentive plan,
securities or option plan, or bonus plan. Notwithstanding the foregoing, in the
event that Employee has any rights under the Change of Control Agreement of even
date herewith between Employee and the Company as a result of the termination of
Employee's employment, then this Agreement shall be of no force and effect with
respect to said termination and the Change of Control Agreement shall set forth
all of the rights and obligations of the parties with respect to the termination
of employment.
6. SUCCESSOR TO THE COMPANY.
(a) The Company will require any successor or assign (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and or assets of the Company, to assume and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform if no such succession or assignment had
taken place. Any failure of the Company to obtain such agreement prior to the
effectiveness of any such succession or assignment shall be a material breach of
this Agreement and shall be deemed to be a termination by the Company of
Employee's employment with the Company without Cause. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined and any
successor or assign to its business and/or assets as aforesaid which executes
and delivers the Agreement provided for in this Section 6 or which otherwise
becomes
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bound by all the terms and provisions of this Agreement by operation of law. If
at any time during the term of this Agreement the Employee is employed by any
corporation a majority of the voting securities of which is then owned by the
Company, "Company" as used in Sections 3 and 4 hereof shall in addition include
such employer. In such event, the Company agrees that it shall pay or shall
cause such employer to pay any amounts owed to the Employee pursuant to Section
4 hereof.
(b) This Agreement shall inure to the benefit of and be enforceable
by the Employee's personal and legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Employee should
die while any amounts are still payable to him hereunder, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to the Employee's devisee, legatee, or other designee or, if
there be no such designee, to the Employee's estate.
7. NOTICE. For purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered, sent by recognized overnight
delivery service, charges prepaid or mailed by United States registered mail,
return receipt requested, postage prepaid, as follows:
If to the Company:
Republic Engineered Steels
000 Xxxxxxx Xxxx, X.X.
Xxxxxxxxx, XX 00000-0000
ATTN:
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If to the Employee:
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or such other address as either party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
8. AMENDMENT, WAIVER. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by the Employee and the Company. No waiver by either party
hereto at any time of any breach of the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement.
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9. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
10. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
11. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
REPUBLIC ENGINEERED STEELS, INC.
By
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Title:
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Employee
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