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Exhibit (10) - (53)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT ("Agreement") is made this 3rd day of April,
2001, between XXXX X. XXXXXX, a resident of the Commonwealth of Pennsylvania
(the "Executive"), THE LTV CORPORATION, a Delaware corporation ("LTV") and
COPPERWELD CORPORATION, a Delaware corporation ("Copperweld") (LTV and
Copperweld are sometimes referred in collectively as the "Corporation" and the
term "Corporation" shall be deemed to refer to LTV and Copperweld jointly and
severally).
W I T N E S S E T H:
WHEREAS, the Executive, LTV and Copperweld are currently parties to an
Employment Agreement (the "Current Agreement"); and
WHEREAS, in accordance with the provisions of Section 5(b)(1)(i) of the
Current Agreement, on March 20, 2000, the Executive delivered to the Corporation
written notice of his intent to quit or retire from service with the Corporation
after March 20, 2001 (the "Written Notice"); and
WHEREAS, on December 29, 2000, LTV and Copperweld filed petitions in
bankruptcy (In re: LTV Steel Company, Inc., a New Jersey corporation, ET XX.,
Xxxx Xx. 00-00000, Xxxxxx Xxxxxx Bankruptcy Court, Northern District of Ohio,
Eastern Division) (the "Bankruptcy Proceeding"); and
WHEREAS, LTV and Copperweld believe that the Executive is essential to
the future of LTV and Copperweld and that his efforts on their behalf are, and
will continue to be, of critical importance to the future direction of LTV and
Copperweld and to the development and confirmation of a plan of reorganization
(a "Plan") for the Corporation; and
WHEREAS, LTV and Copperweld have requested that the Executive withdraw
the Written Notice and agree to enter into this Agreement in recognition of the
crucial role that they believe the Executive has in their future and, in
consideration therefor, LTV and Copperweld have agreed that the Current
Agreement will be terminated in its entirety as of the effective date of this
Agreement and replaced by this Agreement.
NOW, THEREFORE, in consideration of the mutual obligations and other
consideration contained herein, the parties hereto, intending to be legally
bound, agree as follows:
1. EMPLOYMENT.
(a) The Executive hereby withdraws the Written Notice. The
Corporation hereby employs the Executive to render services to LTV as an
Executive Vice President and as Chief Operating Officer of LTV and LTV Steel
Company, Inc. ("LTV Steel") and to render services to Copperweld as the
President of Copperweld. The Executive shall devote his full time and attention
to rendering his services in the general management of the business of the
Corporation and assisting the Corporation in the strategic allocation of its
assets and general long-term strategic planning, with reporting responsibility
for LTV Steel, Copperweld, VP
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Buildings and information technology functions. The Executive shall report to
the Chief Executive Officer of LTV and perform such other duties commensurate
with his positions as may be specified from time to time by the Chief Executive
Officer of LTV.
(b) The Executive hereby accepts such employment and agrees
that he will during the continuance hereof devote his full time and attention
and best talents and abilities to the duties of employment hereby accepted by
him.
(c) The Executive agrees, if nominated and elected, to serve
without additional compensation as a Director or member of any committee of the
Board of Directors of the Corporation, provided that the Executive is reasonably
satisfied that the Corporation is able to provide adequate indemnification
and/or insurance coverage for the Executive for so long as he serves in such
capacities.
2. TERM. The term of the Executive's employment under this Agreement
shall commence upon the execution of this Agreement (hereinafter called
"Effective Date") and continue until January 1, 2003, unless earlier terminated
as set forth herein (the "Term"). This Agreement shall be effective and binding
on the Effective Date. Unless specifically set forth herein to the contrary, the
Executive's rights and the Corporation's corresponding rights or obligations
under this Agreement shall not terminate on the end of the Term but shall
continue until all amounts due Executive or the Corporation hereunder are paid
in full and all obligations of the parties are satisfied.
3. PLACE OF EMPLOYMENT. The Corporation agrees that the Executive will
have his principal office at and will perform his principal duties at
Copperweld's headquarters office, Four Gateway Center, Pittsburgh, Pennsylvania,
or LTV's headquarters, 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx, or at such other
address to which Copperweld's headquarters or LTV's headquarters may be removed
during the Term. Notwithstanding the foregoing, the Executive acknowledges that
it will be necessary for him to spend a substantial proportion of his working
week in Cleveland, Ohio, and that it may be necessary from time to time for him,
in the performance of his duties, to travel on behalf of the Corporation and to
perform such duties while temporarily away (for unpredictable periods of time)
from his principal office.
4. COMPENSATION. As compensation to the Executive for his performance
of the services to be rendered hereunder and for his performance of all the
additional obligations of employment imposed by common law or statutory law with
respect to his positions and offices with the Corporation, the Corporation
agrees to pay to the Executive, and the Executive agrees to accept, the
following salary, other compensation and benefits, in addition to the other
compensation and benefits provided under this Agreement:
(a) During the Term, the Corporation shall pay the Executive,
in equal monthly installments, a salary at an annual rate of $600,000 or greater
(the "Annual Salary"). Such rate shall be reviewed annually in accordance with
the Corporation's policies to determine whether Executive's Annual Salary should
be increased.
(b) During the Term, the Executive shall be entitled to
participate in an annual incentive bonus program with an annual target incentive
heavily weighted towards integrated
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steel of not less than sixty percent (60%) of his Annual Salary. In addition, if
the Corporation awards its executive class of officers bonuses and/or incentive
compensation in addition to an annual incentive bonus, the Executive shall be
entitled to participate equitably in such bonuses and/or additional incentive
compensation.
(c) During the Term, the Executive shall be entitled to
participate in any and all of the Corporation's present or future employee
benefit plans, including without limitation pension plans, profit-sharing plans,
insurance plans, and other benefits, which are generally applicable to the
Corporation's executives; provided, however, that the accrual and/or receipt by
the Executive of benefits under and pursuant to any such present or future
employee benefit plan shall be determined and controlled by the provisions of
such plan, and, provided further, that the Executive shall not participate in
any nonqualified pension benefit plan of the Corporation, including, without
limitation, the Copperweld Corporation Senior Executive Retirement Plan. Without
limiting the foregoing, the Corporation agrees to provide not less than the
amount of split-dollar whole life insurance on the life of the Executive as in
effect on the Effective Date. The parties hereto acknowledge that the matter of
split-dollar insurance on the Executive's life is subject to and covered by an
Amended, Merged and Restated Split Dollar Life Insurance Agreement, dated
December 13, 1996, between Copperweld and the Executive (the "Split Dollar
Agreement"), which Split Dollar Agreement is controlling. The Split Dollar
Agreement may not be amended or terminated without the consent of the parties
thereto.
(d) During the Term, the Corporation shall provide the
Executive with a suitable apartment, including all utilities, in Cleveland,
Ohio, with any taxes imposed on income imputed to the Executive as a result of
the provision of such apartment and utilities grossed up.
5. RETENTION PAYMENT.
Should the Executive continue in the employ of the Corporation until
the dates of payment provided below in this Section 5, the Corporation shall pay
to the Executive in cash a retention payment (the "Retention Payment") equal to
the Deferral Account (as defined below), subject to the terms and conditions
provided below:
(a) CALCULATION AND PAYMENT. One million five hundred thousand
dollars ($1,500,000) of deferred compensation has previously been credited by
the Corporation to an account (the "Deferral Account") for the Executive in the
LTV Corporation Executive Deferred Compensation Plan (the "EDC Plan"). The
Deferral Account has been hypothetically invested in accordance with the terms
of the EDC Plan and has been credited and debited with investment gains and
losses. On March 20, 2001 the balance in the Deferral Account was $1,458,070.
Subject to the provisions of Section 7(b) below, the Executive
shall be paid the Retention Payment first by the Corporation until the Trust (as
defined below) has sufficient funds to make all remaining payments pursuant to
this Section 5(a) and Section 6(a) below, and then from the Trust, but if the
Trust has insufficient funds, then by the Corporation, according to the
following schedule:
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Date of Payment Amount of Payment
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June 30, 2001 25% of the then balance in the Deferral
Account;
January 1, 2002 33 1/3% of the balance in the Deferral
Account on December 31, 2001;
The earlier of June 30, 2002 or 50% of the then balance in the Deferral
confirmation of a Plan Account;
The earlier of January 1, 2003 or 100% of the then balance in the Deferral
confirmation of a Plan Account
subject, in each case, to the Executive's continued employment by the
Corporation on such date of payment.
(b) ACCELERATION OF PAYMENTS: Anything in this Agreement to
the contrary notwithstanding, the entire unpaid balance of the Deferral Account
shall be payable immediately upon any of the following events:
(1) the death of the Executive;
(2) the permanent incapacity of the Executive
(determined in accordance with Section 9 of this Agreement);
(3) the involuntary termination of the Executive's
employment by the Corporation for any reason;
(4) the confirmation of a Plan;
(5) the sale of substantially all the combined assets
or combined stock of LTV Steel and Copperweld; or
(6) the voluntary termination by the Executive of his
employment after the appointment of a new Chief Executive Officer of LTV (or its
successor), other than the Executive, provided that in the event of such
appointment the Executive shall have given six (6) months' prior written notice
to the Chief Executive Officer of LTV of his intention to so terminate.
(c) RETENTION PAYMENT NOT PENSIONABLE. The Retention Payment
shall not be taken into account for purposes of any pension or other benefit
calculations under any plan, policy, program or arrangement of the Corporation,
including, but not limited to the supplemental pension benefits provided for in
Section 6.
6. SUPPLEMENTAL PENSION PAYMENTS.
(a) CALCULATION AND PAYMENT. (1) Should the Executive continue
in the employ of the Corporation until January 1, 2003, the Corporation shall
pay to the Executive in cash a lump sum (the "Supplemental Pension Payment")
that is actuarially equivalent (using the
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Copperweld Corporation Pension Plan definition of Actuarial Equivalent benefit
for purposes of calculating lump sum (for non-periodic) benefit payments in
effect on the date of this Agreement) in present value to a supplemental pension
benefit, beginning January 1, 2003, payable to the Executive in monthly
installments for his lifetime equal to the difference between (A) all amounts
which the Executive will receive as Primary Social Security benefits, plus the
employer-provided retirement income benefits that will become payable under the
qualified and non-qualified defined benefit plans and defined contribution plans
of the Corporation, including Copperweld and the Xxxxx & Xxxxxxxx Steel Company,
or any successor corporation (such defined benefit plans and defined
contribution plans are collectively referred to as the "Pension Plan") and
(unless waived by the Corporation as more fully set forth at the end of this
Section 6(a)) under the qualified defined benefit plans, qualified defined
contribution plans and/or qualified money purchase plans of other employers, and
(B) forty-three and eighty-three and one-third one hundredths percent (43.8334%)
of the average of the highest annual compensation paid by the Corporation to him
in any three consecutive calendar years of the ten most recently completed
calendar years ending on December 31, 2002 (the "Average Annual Compensation").
In determining the Executive's annual compensation, the amounts to be included
in this calculation shall be limited to his Annual Base Salary and his yearly
bonus and/or additional yearly incentive compensation (and for this purpose, the
Executive's yearly bonus and/or additional yearly incentive compensation, if
any, shall be deemed to have been paid, and shall be included in his annual
compensation, in the year that they are earned, even if they are paid in a
subsequent year), and shall exclude all other compensation and other benefits
received by the Executive including, but not limited to, the Deferral Account,
the Retention Payment and long-term incentive bonuses such as stock option
rights and restricted stock. In addition, and for the purpose of this
calculation, the amount of the Executive's annual compensation shall not be
reduced by the amount of salary, bonus or yearly incentive compensation the
receipt of which the Executive elects to defer pursuant to a plan or arrangement
approved by and participated in by the Corporation.
For purposes of the offsets referred to above, the phrase
"employer-provided retirement income benefits payable under the qualified and
non-qualified defined benefit plans and defined contribution plans of the
Corporation and under the qualified defined benefit plans, qualified defined
contribution plans, and/or qualified money purchase plans of other employers,"
shall mean those benefits that will become payable to the Executive under all
such plans on December 31, 2002, provided that, in the case of a defined benefit
pension plan (C) in the event that the Executive is married on December 31,
2002, the amount of the offset with respect to any such plan shall not be less
than the amount he would receive as a qualified joint and survivor benefit, or
(D) in the form of a single life annuity if the Executive is not married. In the
case of a qualified defined contribution plan or a qualified money purchase
plan, the amount of the offset shall be the Executive's account value on
December 31, 2002. Also for purposes of the offsets referred to above, the
phrase "employer-provided retirement income benefits payable under the qualified
and non-qualified defined benefit plans and defined contribution plans of the
Corporation and under the qualified defined benefit plans, qualified defined
contribution plans, and/or qualified money purchase plans of other employers"
shall not include any retirement income benefits attributable to employer
contributions made as a result of the Executive's election to reduce or defer
the receipt of his salary pursuant to a qualified cash or deferred arrangement
under Section 401(k) of the Code or pursuant to any comparable arrangement
permitted under current or subsequent law.
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The Executive shall have the right to request that the offsets
hereinabove set forth for amounts attributable to the qualified defined benefit
plans, qualified defined contribution plans, and/or the qualified money purchase
plans of other employers be waived, so that such amounts would not be taken into
account in calculating the amount of the supplemental pension benefit hereunder.
Such request for waiver shall be in writing and shall be addressed to all the
members of the Compensation and Organization Committee (the "Committee") of the
Board of Directors of LTV (or the successor in function to the Committee). The
Committee shall render its decision on the Executive's request as soon as
practicable following receipt thereof. The Committee's decision will be final
and not subject to appeal.
(2) Notwithstanding the provisions of Section 6(a)(1) above,
(A) in the event the Executive terminates employment prior to January 1, 2003
for one of the reasons specified in Section 6(c) below, then the percentage of
Average Annual Compensation specified in Section 6(a)(1)(B) shall be reduced by
eight and one-third one-hundredths of one percent (.08334%) for each full
calendar month that such termination precedes January 1, 2003; and (B) in no
event shall the Supplemental Pension Payment exceed the sum of Four Million
Seven Hundred Thousand Dollars ($4,700,000).
(b) PAYMENT OF SUPPLEMENTAL PENSION PAYMENT FROM TRUST.
Subject to the provisions of Section 7(b) below, the Executive shall be paid the
Supplemental Pension Payment from the Trust (as defined below), but if the Trust
has insufficient funds, then the balance of such payment shall be paid by the
Corporation.
(c) ACCELERATION OF PAYMENTS. Anything in this Agreement to
the contrary notwithstanding, the Supplemental Pension Benefit shall be payable
immediately upon any of the following events:
(1) the death of the Executive;
(2) the permanent incapacity of the Executive
(determined in accordance with Section 9 of this Agreement);
(3) the involuntary termination of the Executive's
employment by the Corporation for any reason;
(4) the confirmation of a Plan; or
(5) the sale of substantially all of the combined
stock or combined assets of LTV Steel and Copperweld; or
(6) the voluntary termination by the Executive of his
employment after the appointment of a new Chief Executive Officer of LTV (or its
successor), other than the Executive, provided that in the event of such
appointment the Executive shall have given six (6) months' prior written notice
to the Chief Executive Officer of LTV of his intention to so terminate.
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7. ESTABLISHMENT OF TRUST.
(a) SECURITY FOR PAYMENTS. The Corporation's obligations under
Section 5 and Section 6 shall be secured by the establishment of a trust for the
benefit of the Executive (the "Trust") with Mellon Bank, N.A., as trustee (the
"Trustee") in accordance with an agreement of trust between the Corporation and
the Trustee in the form attached hereto as Exhibit A (the "Trust Agreement").
Upon the establishment of the Trust, which shall occur on the Effective Date
contemporaneously with the execution of this Agreement, the Corporation shall
deposit by wire transfer to an account with the Trustee an amount equal to the
sum of (1) the assets in the Trust Under Copperweld Corporation Supplemental
Pension Plan, established under an agreement dated November 10, 1999 between
Copperweld and Mellon Bank, N.A., as Trustee, (2) the assets in the Trust Under
Copperweld Corporation for Employment Agreement with Xxxx X. Xxxxxx, established
under an agreement dated November 10, 1999 between Copperweld and Mellon Bank,
N.A., as Trustee, and (3) the assets attributable to the Deferral Account held
in the Trust Agreement dated December 16, 1994 between LTV and Mellon Bank, as
Trustee, such amount to be held by the Trustee in accordance with the Trust
Agreement and this Agreement. The Corporate Representative (as defined below)
shall direct the Trustee to pay the Retention Payment to the Executive as
provided in Section 5(a), subject to the provisions of Section 7(b) below, and
to pay the Supplemental Pension Payment as provided in Section 6(a) to the
Executive, subject to the provisions of Section 7(b) below. The Corporation
hereby appoints the Chairman of the Compensation and Organization Committee of
LTV to act as the representative of the Corporation (the "Corporate
Representative") for the purpose of sending and receiving notices on behalf of
the Corporation under the Trust and providing directions to the Trustee,
including, without limitation, directions to pay the amounts required to be
distributed to the Executive under the Trust or this Agreement. In the event of
the resignation, removal, death or incapacity of the Corporate Representative,
the Corporation shall, with the approval of the Executive, appoint a successor
to the Corporate Representative, which approval shall not be unreasonably
withheld. If the Executive or his beneficiary, estate or personal representative
of the Executive is entitled to accelerated payments as provided in Section 5(b)
and Section 6(c) above, then the Corporate Representative shall immediately give
notice of such event to the Trustee and direct the Trustee to immediately pay to
the Executive (or the designated beneficiary, estate or personal representative
of the Executive, as the case may be) the balance of the Retention Payment and
the Supplemental Pension Payment, or if less, the total amount held in the
Trust.
(b) FORFEITURE OF PAYMENTS. If the Executive voluntarily
terminates his employment with the Corporation for reasons other than those set
forth in Sections 5(b)(4), 5(b)(5) or 5(b)(6) or Sections 6(c)(4), 6(c)(5) or
6(c)(6) above, the Executive shall forfeit his right to receive any of the
amounts in the Trust as of the date of such voluntary termination, and the
Corporate Representative shall give written notice to the Trustee directing the
Trustee that such amounts shall revert back to the Corporation and that the
Trust shall be terminated.
(c) REIMBURSEMENT FOR TRUST EXPENSES. The Corporation agrees
to pay all costs and expenses relating to the administration of the Trust,
including, without limitation, investment fees, administrative costs, legal fees
or costs of indemnification ("Trust Expenses"). To the extent the Trust is
charged with Trust Expenses, the Corporation shall immediately
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reimburse the Trust, or if a distribution has been made to the Executive from
the Trust, to the Executive the full amount of such Trust Expenses.
8. COVENANT AGAINST COMPETITION.
(a) The Executive agrees that (1) at all times during the
Term, (2) for two years after the Executive retires or is terminated for any
reason, or voluntarily terminates his employment, and (c) any time in which the
Executive is receiving an Annual Salary from the Corporation, or the equivalent
of his Annual Salary from the Corporation, after the end of the Term (but for
purposes of this Section 8, the payment of any form of pension or retirement
benefits to the Executive in connection with his retirement from the Corporation
or under any qualified or nonqualified plans which provide retirement benefits
in accordance with the Corporation's policies regarding the retirement of senior
executives shall not be considered to be Annual Salary or its equivalent), the
Executive will not directly or indirectly engage in any business which is
competitive with any business then actively conducted by Copperweld or LTV or
any affiliate of LTV, either as owner, partner, officer or employee of such a
business, and the Executive will not consult with any such competitive business;
provided, however, that ownership by the Executive of not more than five percent
(5%) of the outstanding shares of stock of any national stock exchange shall not
be deemed to be a violation of this covenant. Notwithstanding anything in this
Section 8 to the contrary, the covenant not to compete in this Section 8 shall
be void and of no further effect if, prior to or following such termination, (3)
there is a Change in Control (as defined below) of Copperweld or LTV or (4) the
Corporation fails or has failed to pay the Executive any amounts due to the
Executive hereunder.
If the Executive is first elected to be a director of any
business enterprise after the Effective Date, neither such election nor the
Executive's service as a director of such business enterprise shall be deemed to
be a violation of this covenant if, prior to accepting any such directorship,
the Executive seeks and secures the prior approval of the Board of Directors of
LTV. Notwithstanding the foregoing, the Executive is expressly permitted to
continue to serve as a director of any business enterprise of which he was
serving as a director as of the Effective Date, and he shall not be deemed to be
in violation of the foregoing covenant by continuing such service from and after
the Effective Date.
(b) For purposes of this Agreement a "Change in Control" means
the occurrence of any of the following events:
(i) The acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) (a "Person") of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 15% or more of the
combined voting power of the then outstanding Voting Stock of LTV;
provided, however, that for purposes of this Paragraph, the following
acquisitions shall not constitute a Change in Control: (A) any
acquisition directly from LTV that is approved by the Incumbent Board,
(B) any acquisition by LTV, (C) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by LTV or any
Subsidiary, or (D) any acquisition by any Person pursuant to a Business
Combination that complies with clauses (I), (II) and (III) of Paragraph
(iii) of this definition; or
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(ii) individuals who, as of the date hereof,
constitute the Board of Directors of LTV (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by LTV's
shareholders, was approved by a vote of at least two-thirds of the
directors then comprising the Incumbent Board (either by a specific
vote or by approval of the proxy statement of LTV in which such person
is named as a nominee for director, without objection to such
nomination) shall be deemed to have been a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or
threatened election contest (within the meaning of Rule 14a-11 of the
Exchange Act) with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(iii) consummation of (A) a reorganization, merger or
consolidation of LTV, (B) a sale or other disposition of all or
substantially all of the assets of LTV, (C) a reorganization, merger or
consolidation of LTV Steel Company, Inc. ("LTV Steel"), (D) a sale or
other disposition of all or substantially all of the assets of LTV
Steel, (E) a reorganization, merger or consolidation of Copperweld, or
(F) a sale or other disposition of the capital stock or of all or
substantially all the assets of Copperweld (each, a "Business
Combination"), unless, in each case, immediately following such
Business Combination, (I) all or substantially all of the individuals
and entities who were the beneficial owners of Voting Stock of LTV
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 66 2/3% of the then outstanding
shares of common stock (or comparable equity interests) and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors (or comparable
governing persons) of the entity resulting from such Business
Combination (including, without limitation, an entity which as a result
of such transaction owns LTV, Copperweld, LTV Steel, all or
substantially all of the assets of LTV, LTV Steel or Copperweld either
directly or through one or more subsidiaries) in substantially the same
proportions relative to each other as their ownership, immediately
prior to such Business Combination, of the Voting Stock of LTV, (II) no
Person (other than LTV, such entity resulting from such Business
Combination, or any employee benefit plan (or related trust) sponsored
or maintained by LTV, any Subsidiary or such entity resulting from such
Business Combination) beneficially owns, directly or indirectly, 20% or
more of the then outstanding shares of common stock (or comparable
equity interests) of the entity resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors (or
comparable governing persons) of such entity, and (III) at least a
majority of the members of the board of directors (or comparable
governing persons) of the entity resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement or of the action of the Board
providing for such Business Combination; or
(iv) approval by the shareholders of LTV or
Copperweld of a complete liquidation or dissolution of LTV or
Copperweld, except pursuant to a Business
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Combination that complies with clauses (I), (II) and (III) of Paragraph
(iii) of this definition.
9. DISABILITY.
(a) If, because of illness or otherwise, the Executive should
become disabled from performing his duties hereunder, the Executive shall be
entitled to a leave of absence from the Corporation for the duration of any such
disability for a period or periods of up to, but not exceeding, one (1) year in
the aggregate during the Term. During any such leave of absence, the Executive's
compensation and status as an employee hereunder shall continue as provided
herein; provided, however, that amounts, if any, payable to the Executive under
any Disability Income Plan of the Corporation will be offset against the
Executive's compensation which is payable under this Agreement.
(b) The Executive shall be deemed to be permanently
incapacitated only if and when either (i) such leaves of absence for disability
shall have continued for more than one (1) year in the aggregate during the
Term, or (ii) a single leave of absence for disability shall have continued for
a period of six (6) consecutive months and thereafter, upon impartial medical
advice which shall have been certified to the Corporation that the disability
under either (i) or (ii) above is such that it will substantially impair the
Executive's ability to perform his duties hereunder.
(c) In calculating the period of six consecutive months
referred to in subsection (b) hereof, that period shall be deemed to begin on
the first day of the calendar month in which the Executive is first absent on
account of the state or condition which leads to his permanent incapacity
hereunder.
(d) If the Executive becomes permanently incapacitated, as
specified in Section 9(b) above, the Corporation may terminate the employment of
the Executive hereunder by giving the Executive (or his personal representative)
written notice of such termination during the continuance of such disability
and, in lieu of any further salary, the Corporation shall pay to the Executive
as soon as practicable, as a disability allowance, a sum equivalent to three (3)
years' salary at the Annual Salary rate in effect at the date of the permanent
incapacity, which sum shall be payable to the Executive or to his estate
(incompetent's or decedent's) in thirty-six (36) equal monthly installments. The
monthly installments described in the preceding sentence shall be reduced by the
monthly amounts (if any) payable to the Executive under any disability income
plan of the Corporation after the date of the permanent incapacity therein
described. Such termination shall not affect the Corporation's obligations
hereunder apart from salary including, without limitation, the Corporation's
obligations, if any, under Sections 5, 6 and 7 hereof.
10. BENEFIT IN EVENT OF DEATH DURING THE TERM. If the Executive should
die during the Term, then an amount equal to three times the Annual Salary in
effect at the date of the Executive's death shall be paid in thirty-six (36)
equal monthly installments to the beneficiary or beneficiaries designated by the
Executive to the Corporation in writing or absent such a designation, to his
estate, which payments will begin as soon as practicable after his death.
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11. WITHHOLDING OF APPROPRIATE TAXES. It is understood and agreed by
the parties hereto that the Corporation shall withhold appropriate taxes from
compensation and with respect to any other economic benefits herein provided
when such withholding is, in the reasonable judgment of the Corporation,
required by law or regulation.
12. INVOLUNTARY TERMINATION OF EMPLOYMENT.
(a) The Executive agrees that he is an at-will employee of the
Corporation, and that, subject to the terms of this Agreement, the Employee may
be terminated by the Corporation with or without cause.
(b) The Corporation may terminate the employment of the
Executive for cause at any time, in which event this Agreement shall
automatically terminate in its entirety (except for the obligations of the
Executive set forth in Section 8 and the obligations of the Corporation to make
the payments set forth in Sections 5, 6 and 7, which shall immediately become
due), and no further payments whatsoever shall be due to the Executive or to any
beneficiary or his estate hereunder, except for the payment obligations of the
Corporation under Sections 5, 6 and 7. Termination shall be deemed to be "for
cause" only if such termination is by reason of conviction of a felony or by
reason of any act, or failure to act, by the Executive, in bad faith and to the
material detriment of the Corporation, as determined by the Board of Directors
of LTV acting reasonably upon the substantial evidence before it.
Notwithstanding the foregoing, the Board of Directors of LTV may, in its
discretion, if it feels warranted under the circumstances, award some
termination payment to the Executive.
(c) If, during the Term, the Executive's employment is
terminated other than for the reasons set forth in Sections 9(d), 10 or 12(b) of
this Agreement, in addition to the payments under Sections 5, 6 and 7, the
Corporation shall pay to the Executive from its general funds, an amount equal
to two (2) times the amount of the Executive's Annual Salary in equal monthly
installments for twenty-four (24) months. In the event of the Executive's death
before payment in full, the remaining payments shall be made to the beneficiary
or beneficiaries designated by the Executive to the Corporation in writing or,
absent such a designation, to his estate. If the Corporation terminates the
Executive's employment under this Section 12(c), it shall also provide the
following benefits to the Executive: (i) continuation for the Executive and his
dependents for a period of three years of that group medical, dental and life
insurance coverage which is generally applicable to the Corporation's salaried
employees and dependents; (ii) continuation of the split dollar life insurance
program described in Section 4(c) of this Agreement; (iii) transfer to the
Executive of title to the vehicle which the Executive is then using, free and
clear of any liens (but the Executive shall pay all taxes associated with the
transfer); (iv) executive outplacement services consistent with the level of
such services provided to other senior executives; and (v) the payment of the
portion of any annual incentive bonus award to which the Executive would have
been entitled for the year in which the termination occurs, prorated based upon
the date of termination.
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13. CIRCUMSTANCES WHICH EXECUTIVE MAY CONCLUSIVELY DEEM TO BE A
TERMINATION WITHOUT CAUSE.
Notwithstanding any provision of this Agreement to the
contrary, the Executive shall be entitled to resign voluntarily upon written
notice to the Chief Executive Officer of LTV within sixty (60) days of any of
the following events, but only if any such event shall have occurred on or prior
to November 1, 2002, and to have such resignation treated as a termination by
the Corporation without cause, thereby entitling the Executive to all benefits
under this Agreement arising from such termination:
(a) a material adverse change or announcement of a material
adverse change in the Executive's position and offices with Copperweld
or LTV set forth in Section 1;
(b) a material adverse change in the authority, duties or
responsibilities of the Executive;
(c) a reduction in the Executive's Annual Salary or annual
incentive opportunity from its then current level; or
(d) a material breach of this Agreement or the Trust Agreement
by the Corporation which has not been cured within thirty (30) days
after the Corporation has received notice of such breach from the
Executive, except for a failure by the Corporation to pay any amounts
due hereunder or under the Trust Agreement, in which case the cure
period shall be ten (10) days after such notice;
provided, however, that a sale of substantially all of the assets or stock of
LTV or Copperweld which does not constitute the sale of substantially all the
combined assets or combined stock of LTV Steel and Copperweld shall not be
deemed to cause a material adverse change for purposes of (a) or (b) of this
Section 13.
14. SUPERSEDING EFFECT; ENTIRE AGREEMENT; WAIVER OF PREPETITION CLAIMS.
(a) This Agreement supersedes any prior agreements or
understandings, oral or written, with respect to employment of the Executive,
including the Current Agreement, which is terminated in its entirety as of the
Effective Date, and constitutes the entire agreement with respect thereto. It
cannot be changed or terminated orally and may be modified only by a subsequent
written agreement executed by both the parties hereto.
(b) The Executive irrevocably waives and releases any debt,
right or claim he has under the Current Agreement that arose prior to the
Bankruptcy Proceeding.
15. APPLICABLE LAW. This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Pennsylvania.
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13
16. NON-ASSIGNABILITY BY EXECUTIVE. The parties agree and understand
that this Agreement may not be assigned by any party hereto under applicable law
without the express prior written consent of the other parties. Any assignment
in violation of this covenant shall be null and void.
17. SUCCESSORS AND ASSIGNS. Except as otherwise provided in Section 16
of this Agreement, this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their successors and assigns.
18. PAYMENT OF LEGAL FEES AND COSTS.
(a) The Corporation shall reimburse the Executive for his
reasonable legal fees and expenses incurred in connection with the negotiation
of this Agreement and the Trust Agreement, with any taxes imposed on any income
imputed to the Executive, net of any available deductions, grossed-up.
(b) The Corporation hereby agrees to reimburse the Executive
or his designated beneficiary, estate or personal representatives to the fullest
extent permitted by law, for any legal and other fees and expenses that
Executive or his designated beneficiary, estate or personal representatives may
reasonably incur in connection with any action taken or contest threatened or
implemented relating to the enforcement, validity or interpretation of any
provision of this Agreement or the Trust Agreement, including actions brought to
establish entitlement to payments or benefits hereunder, regardless of the
outcome thereof, plus in the case of any money judgment obtained under this
Agreement against the Corporation, interest at the rate of ten percent (10%) per
annum. The Executive or his designated beneficiary, estate or personal
representatives shall present to the Corporation an itemized statement, together
with reasonable proofs of payment required by the Corporation, of all legal fees
and expenses for which Executive or his designated beneficiary, estate or
personal representatives requests reimbursement. The Corporation shall reimburse
Executive or his designated beneficiary, estate or personal representatives
within ten (10) days of receipt of such itemized statement and documentation.
19. CERTAIN ADDITIONAL PAYMENTS BY THE CORPORATION. Anything in this
Agreement to the contrary notwithstanding, if it shall be determined (as
hereafter provided) that any payment (other than the Gross-Up payments provided
for in this Section 19) or distribution by the Corporation or any of its
affiliates to or for the benefit of the Executive, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement, policy, plan, program
or arrangement, including without limitation the Trust, any stock option,
performance share, performance unit, stock appreciation fight or similar right,
or the lapse or termination of any restriction on or the vesting or
exercisability or any of the foregoing (a "Payment), would be subject to the
excise tax imposed by Section 4999 of the Code by reason of being considered
"contingent on a change in ownership or control" of LTV or Copperweld, within
the meaning of Section 280G of the Code or to any similar tax imposed by state
or local law, or any interest or penalties with respect to such tax (such tax or
taxes, together with any such interest and penalties, being hereafter
collectively referred to as the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment or payments (collectively, a "Gross-Up
Payment") from the Corporation.
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The Gross-Up Payment shall be in an amount such that, after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including any Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Payment.
IN WITNESS WHEREOF, the Executive has signed and sealed this
Agreement and LTV and Copperweld have each caused this Agreement to bc executed
by a duly authorized person and its corporate seal to be hereunto affixed the
day and year first above written.
WITNESS: EXECUTIVE:
/s/ Xxxxx X. Xxxxxxxxxx /s/ Xxxx X. Xxxxxx
----------------------------- -----------------------------
Xxxx X. Xxxxxx
ATTEST: THE LTV CORPORATION
/s/ Xxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxx
----------------------------- ----------------------------
(SEAL)
ATTEST COPPERWELD CORPORATION
/s/ Xxxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxx
----------------------------- ----------------------------
(SEAL)
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Exhibit A
TRUST AGREEMENT
THIS AGREEMENT made this 3rd day of April, 2001, by and between THE LTV
CORPORATION ("LTV"), COPPERWELD CORPORATION ("Copperweld") (collectively, and
jointly and severally, the "Company") and MELLON BANK, N.A. ("Trustee").
WHEREAS, LTV, Copperweld and XXXX X. XXXXXX ("Executive") have
contemporaneously herewith entered into an Employment Agreement dated April 3,
2001 ("Employment Agreement");
WHEREAS, the Company expects to incur liability to Executive under the
terms of the Employment Agreement; and
WHEREAS, it is a condition of the Employment Agreement that the Company
establish this trust (the "Trust") and to contribute to the Trust the assets
that shall be held therein, until paid to Executive and his beneficiary in such
manner and at such times as specified in the Employment Agreement.
NOW THEREFORE, the parties do hereby establish the Trust and agree that
the Trust shall be comprised, held and disposed of as follows:
SECTION 1. ESTABLISHMENT OF TRUST.
(a) The Company hereby establishes the Trust with the Trustee,
consisting of such sums of money and other property acceptable
to the Trustee as from time to time shall be paid and
delivered to and accepted by the Trustee from the Company. The
Trustee may accept, purchase and hold only those assets which
satisfy the investment guidelines set forth in Exhibit A. The
Trustee shall have no duty to determine or collect
contributions under the Employment Agreement and shall have no
responsibility for any property until it is received and
accepted by the Trustee. The Company shall have the sole duty
and responsibility for the determination of the
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accuracy or sufficiency of the contributions to be made under
the Employment Agreement.
All such money and other property paid or delivered to and accepted by
the Trustee shall become the principal of the Trust to be held, administered and
disposed of by the Trustee as provided in this Trust Agreement.
(b) The Trust hereby established shall be irrevocable.
(c) The Trust is intended to be a grantor trust, of which the
Company is the grantor, within the meaning of subpart E, part
I, subchapter J, chapter 1, subtitle A of the Internal Revenue
Code of 1986, as amended, and shall be construed accordingly.
(d) The principal of the Trust, and any earnings thereon shall be
held separate and apart from other funds of the Company and
shall be used exclusively as herein set forth.
(e) The Company, in its sole discretion, may at any time, or from
time to time, make additional deposits of cash or other
property in trust with the Trustee to augment the principal to
be held, administered and disposed of by the Trustee as
provided in this Trust Agreement.
SECTION 2. PAYMENTS TO EXECUTIVE AND HIS BENEFICIARIES.
(a) Within two (2) business days following execution of this
Agreement, the Company shall deliver to the Trustee a schedule
(the "Payment Schedule") approved by Executive that indicates
the amounts payable to and in respect of the Executive (and
his beneficiaries), that provides for any required withholding
of income or other payroll taxes imposed on Executive (and his
beneficiaries), that provides instructions acceptable to the
Trustee for determining the amounts so payable, the form in
which such amount is to be paid, and the time for payment of
such amounts (as provided for under the Employment Agreement).
Except as otherwise provided herein, the Trustee shall make
payments to the Executive and his beneficiaries in accordance
with such Payment Schedule.
(b) It is the intent of the Company and the Trustee that the
Company shall be responsible for determining and effecting all
federal, state and local tax aspects of the Employment
Agreement and the Trust, including without limitation income
taxes payable on the Trust's income, if any, any required
withholding of income or other payroll taxes in connection
with the payment of benefits from the Trust pursuant to the
Employment Agreement, and all reporting required in connection
with any such taxes. To the extent that the Company is
required by applicable law to pay or withhold such taxes or to
file such reports, such obligation shall be the responsibility
of the Company; provided, however, that the Trustee shall
reimburse the Company for any income or payroll taxes imposed
on
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Executive (and his beneficiaries) as a result of payments
pursuant to the Payment Schedule and paid by the Company. To
the extent the Trustee is required by applicable law to pay or
withhold such taxes or to file such reports, the Company shall
inform the Trustee of such obligation, shall direct the
Trustee with respect to the performance of such obligations
and shall provide the Trustee with all information required by
the Trustee to meet such obligations.
(c) The entitlement of Executive or his beneficiaries to benefits
under the Employment Agreement shall be determined under the
Employment Agreement, and any claim for such benefits shall be
considered and reviewed under the dispute resolution
procedures set out in the Employment Agreement. The Company
and Executive shall notify the Trustee of such determination
and shall direct commencement of payments of such benefits.
(d) The Company may make payment of benefits directly to the
Executive or his beneficiaries as they become due under the
terms of the Employment Agreement. The Company shall notify
the Trustee of its decision to make payment of benefits
directly prior to the time amounts are payable to the
Executive or his beneficiaries. In addition, if the principal
of the Trust, together with any earnings thereon, are not
sufficient to make payments of benefits in accordance with the
terms of the Employment Agreement, the Company shall make up
the balance of each such payment as it falls due. The Trustee
shall notify the Company when principal and earnings are not
sufficient.
SECTION 3. PAYMENTS TO COMPANY.
Except as otherwise provided herein, the Company shall have no right or
power to direct the Trustee to return to the Company or to divert to others any
of the Trust assets before all payment of benefits have been made to Executive
and his beneficiaries pursuant to the terms of the Employment Agreement (as
certified to the Trustee by the Company and Executive or his beneficiaries).
SECTION 4. INVESTMENT AND ADMINISTRATIVE AUTHORITY.
The Trustee shall invest the Trust Fund in accordance with investment
guidelines attached hereto as Exhibit A, which shall be broad guidelines and
shall not restrict the Trustee's investment discretion with respect to the
selection of Trust assets within such investment guidelines. The Company and
Executive may change the investment guidelines from time to time by providing
the Trustee with new written guidelines signed by both the Company and
Executive. Subject to the previous sentences of this Section 4, the Trustee
shall have the powers described below:
(a) The Trustee may invest and reinvest the principal and income
of the Trust and keep it invested, without distinction between
principal and income as
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permitted under Exhibit A, in any security or property as it,
in its sole discretion, deems advisable; provided, however,
that in no event may the Trustee invest in (i) securities
(including stock or rights to acquire stock) or obligations
issued by the Company, other than a de minimis amount held in
common investment vehicles in which the Trustee invests, (ii)
any assets settled or held in safe keeping outside the United
States or (iii) real estate. For this purpose, "real estate"
includes, but is not limited to, real property, leaseholds,
mineral interests, and any form of asset which is secured by
any of the foregoing. All rights associated with assets of the
Trust shall be exercised by the Trustee or the person
designated by the Trustee, and shall in no event be
exercisable by or rest with Executive or the Company.
(b) The Trustee may collect and receive any and all money and
other property due the Trust and give full discharge therefor.
(c) The Trustee may deposit cash into interest bearing accounts in
the banking department of the Trustee or an affiliated banking
organization;
(d) The Trustee may settle, compromise or submit to arbitration
any claims, debt or damages due or owing to or from the Trust;
the Trustee may also commence or defend suits or legal
proceedings to protect any interest of the Trust, and may
represent the Trust in all suits or legal proceedings in any
court or before any other body or tribunal.
(e) The Trustee may take all action necessary to pay for
authorized transactions, including borrowing or raising monies
from any lender, including the Trustee, in its corporate
capacity in conjunction with its duties under this Agreement
and upon such terms and conditions as the Trustee may deem
advisable to settle security purchases and securing the
repayments thereof by pledging all or any part of the Trust.
(f) The Trustee may appoint custodians, subcustodians or
subtrustees (including affiliates of the Trustee), as to part
or all of the Trust. The Trustee shall not be responsible or
liable for any losses or damages suffered by the Company
arising as a result of the insolvency of any custodian,
subcustodian or subtrustee, except to the extent the Trustee
was negligent in its selection or continued retention of such
agent.
(g) The Trustee may hold property in nominee name, in bearer form,
or in book entry form, in a clearinghouse corporation or in a
depository (including an affiliate of the Trustee), so long as
the Trustee's records clearly indicate that the assets held
are a part of the Trust. The Trustee shall not be responsible
for any losses resulting from the deposit or maintenance of
securities or other property (in accordance with market
practice, custom, or regulation) with any recognized clearing
facility,
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book-entry system, centralized custodial depository, or
similar organization.
(h) The Trustee may generally do all acts, whether or not
expressly authorized, which the Trustee may deem necessary or
desirable for the protection of the Trust.
(i) The Company shall have the right at any time, and from time to
time in its sole discretion, to substitute assets of equal
fair market value for any asset held by the Trust. This right
is exercisable by the Company in a nonfiduciary capacity
without the approval or consent of any person in a fiduciary
capacity. The Trustee shall have no control, liability or
responsibility for any such substitution of assets.
SECTION 5. CONTRACTUAL SETTLEMENT AND INCOME; MARKET PRACTICE SETTLEMENTS
(a) In accordance with the Trustee's standard operating procedure,
the Trustee shall credit the Trust with income and maturity
proceeds on securities on contractual payment date net of any
taxes or upon actual receipt. To the extent the Trustee
credits income on contractual payment date, the Trustee may
reverse such accounting entries to the contractual payment
date if the Trustee reasonably believes that such amount will
not be received.
(b) In accordance with the Trustee's standard operating procedure,
the Trustee will attend to the settlement of securities
transactions on the basis of either contractual settlement
date accounting or actual settlement date accounting. To the
extent the Trustee settles certain securities transactions on
the basis of contractual settlement date accounting, the
Trustee may reverse to the contractual settlement date any
entry relating to such contractual settlement if the Trustee
reasonably believes that such amount will not be received.
(c) Settlements of transactions may be effected in trading and
processing practices customary in the jurisdiction or market
where the transaction occurs. The Company acknowledges that
this may, in certain circumstances, require the delivery of
cash or securities (or other property) without the concurrent
receipt of securities (or other property) or cash. In such
circumstances, the Trustee shall have no responsibility for
nonreceipt of payment (or late payment) or nondelivery of
securities or other property (or late delivery) by the
counterparty, except as a result of the Trustee's own
negligence or willful misconduct.
SECTION 6. DISPOSITION OF INCOME.
During the term of this Trust, all income received by the Trust shall
be accumulated and reinvested.
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SECTION 7. ACCOUNTING BY TRUSTEE.
The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions required to be
made, including such specific records as shall be agreed upon in writing among
the Company, Executive and the Trustee. Within 15 days following the close of
each calendar month and within 15 days after the removal or resignation of the
Trustee, the Trustee shall deliver to the Company and Executive a written
account of its administration of the Trust during such month or during the
period from the close of the last preceding month to the date of such removal or
resignation, setting forth all investments, receipts, disbursements and other
transactions affected by it, including a description of all securities and
investments purchased and sold with the cost or net proceeds of such purchases
or sales (accrued interest paid or receivable being shown separately), and
showing all cash, securities and other property held in the Trust at the end of
such month or as of the date of such removal or resignation, as the case may be.
If, within ninety (90) days after the receipt by the Company and Executive of a
statement with respect to the Trust, the Company or Executive has not given the
Trustee written notice of any exception or objection thereto, the statement
shall be deemed to have been approved, and in such case, the Trustee shall not
be liable for any matters in such statements.
SECTION 8. RESPONSIBILITY OF TRUSTEE.
(a) The Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a
prudent person acting in like capacity and familiar with such
matters would use in the conduct of an enterprise of a like
character and with like aims, provided, however, that the
Trustee shall incur no liability to any person for any action
taken pursuant to a direction, request or approval given by
the Company or Executive which is contemplated by, and in
conformity with, the terms of the Employment Agreement (as
certified to the Trustee by the Company and Executive) or this
Trust and is given in writing by the Company and Executive. In
the event of a dispute between the Company and Executive or
the Company or Executive and a third party, the Trustee may
apply to a court of competent jurisdiction to resolve the
dispute.
(b) The Trustee is not a party to, and has no duties or
responsibilities under, the Employment Agreement other than
those that may be expressly contained in this Agreement. As it
relates to the Trustee only, in any case in which a provision
of this Agreement conflicts with any provision in the
Employment Agreement, this Agreement shall control.
(c) The Trustee shall not be responsible for the title, validity
or genuineness of any property or evidence of title thereto
received by it or delivered by it pursuant to this Agreement
and shall be held harmless in acting upon any notice, request,
direction, instruction, consent, certification or other
instrument believed by it to be genuine and delivered by the
proper party or parties.
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(d) The Company agrees to indemnify and hold harmless the Trustee,
its parent, subsidiaries and affiliates, and each of their
respective officers, directors, employees and agents from and
against all liability, loss and expense, including reasonable
attorneys' fees and expenses incurred by the Trustee or any of
the foregoing indemnitees arising out of or in connection with
this Agreement, except as a result of the Trustee's own
negligence or willful misconduct. This indemnification shall
survive the termination of this Agreement.
(e) If the Trustee undertakes or defends any litigation arising in
connection with this Trust, the Company agrees to indemnify
the Trustee against the Trustee's costs, expenses and
liabilities (including, without limitation, attorneys' fees
and expenses) relating thereto and to be primarily liable for
such payments. If the Company does not pay such costs,
expenses and liabilities in a reasonably timely manner, the
Trustee may obtain payment from the Trust.
(f) The Trustee may consult with legal counsel (who may not be
counsel for the Company or Executive) with respect to any of
its duties or obligations hereunder and as a part of its
reimbursable expenses under Section 9 of this Agreement, pay
counsel's reasonable compensation and expenses. The Trustee
shall be entitled to rely on and may act upon advice of
counsel on all matters, and shall be without liability for any
action reasonably taken or omitted pursuant to such advice.
(g) The Trustee may hire agents, accountants, actuaries,
investment advisors, financial consultants or other
professionals to assist it in performing any of its duties or
obligations hereunder, and shall be part of its reimbursable
expenses under Section 9 of this Agreement.
(h) The Trustee shall have without exclusion, all powers conferred
on Trustees by applicable law, unless expressly provided
otherwise herein, provided, however, that if an insurance
policy is held as an asset of the Trust, the Trustee shall
have no power to name a beneficiary of the policy other than
the Trust, to assign the policy (as distinct from conversion
of the policy to a different form) other than to a successor
Trustee, or to loan to any person the proceeds of any
borrowing against such policy.
(i) Notwithstanding any powers granted to the Trustee pursuant to
this Trust Agreement or to applicable law, the Trustee shall
not have any power that could give this Trust the objective of
carrying on a business and dividing the gains therefrom,
within the meaning of Section 301.7701-2 of the Procedure and
Administrative Regulations promulgated pursuant to the
Internal Revenue Code.
(j) Notwithstanding anything in this Agreement to the contrary
contained herein, the Trustee shall not be responsible or
liable for its failure to
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perform under this Agreement or for any losses to the Trust
resulting from any event beyond the reasonable control of the
Trustee, its agents or custodians, including but not limited
to nationalization, strikes, expropriation, devaluation,
seizure, or similar action by any governmental authority, de
facto or de jure; or enactment, promulgation, imposition or
enforcement by any such governmental authority of currency
restrictions, exchange controls, levies or other charges
affecting the Trust's property; or the breakdown, failure or
malfunction of any utilities or telecommunications systems; or
any order or regulation of any banking or securities industry
including changes in market rules and market conditions
affecting the execution or settlement of transactions; or acts
of war, terrorism, insurrection or revolution; or acts of God;
or any other similar event. This Section shall survive the
termination of this Agreement.
(k) The Trustee shall not be liable for any act or omission of any
other person in carrying out any responsibility imposed upon
such person and under no circumstances shall the Trustee be
liable for any indirect, consequential, or special damages
with respect to its role as Trustee.
SECTION 9. COMPENSATION AND EXPENSES OF TRUSTEE.
The Company shall pay all administrative and Trustee's fees and
expenses. If not so paid, the fees and expenses shall be paid from the
Trust. The Trustee shall be entitled to fees for services as mutually
agreed. The Company acknowledges that as part of the Trustee's
compensation, the Trustee may earn interest on balances including
disbursement balances and balances arising from purchase and sale
transactions. If the Trustee advances cash or securities to the Trust
for any purpose, or in the event that the Trustee shall incur or be
assessed taxes, interest, charges, expenses, assessments, or other
liabilities in connection with the performance of this Agreement,
except such as may arise from its own negligent action, negligent
failure to act or willful misconduct, any property at any time held in
the Trust Fund shall be security therefor and if the Company does not
pay or reimburse the Trustee therefore after reasonable notice (with a
copy to Executive), the Trustee shall be entitled to collect from the
Trust sufficient cash for reimbursement, and if such cash is
insufficient, dispose of the assets of the Trust Fund to the extent
necessary to obtain reimbursement. To the extent the Trustee advances
funds to the Trust for disbursements or to effect the settlement of
purchase transactions, the Trustee shall be entitled to collect from
the Trust, an amount equal to what would have been earned on the sums
advanced (an amount approximating the "federal funds" interest rate).
SECTION 10. RESIGNATION AND REMOVAL OF TRUSTEE.
(a) The Trustee may resign at any time by written notice to the
Company and Executive, which shall be effective 60 days after
receipt of such notice unless the Company, Executive and the
Trustee agree otherwise.
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(b) The Trustee may be removed by the Company and Executive acting
jointly on 60 days written notice or upon shorter written
notice accepted by the Trustee.
(c) If the Trustee resigns or is removed, a successor shall be
appointed in accordance with Section 11 hereof by the
effective date of resignation or removal under paragraphs (a)
or (b) of this Section. If no such appointment has been
validly made, the Trustee shall apply to a court of competent
jurisdiction for appointment of a successor or for
instructions, and the resignation or removal shall not be
effective until a successor trustee is validly appointed. All
expenses of the Trustee in connection with the proceeding
shall be allowed as administrative expenses of the Trust and
paid in accordance with Section 9 of this Agreement.
SECTION 11. APPOINTMENT OF SUCCESSOR.
(a) If the Trustee resigns or is removed in accordance with
Section 10(a) or (b) hereof, the Company and Executive acting
jointly shall appoint a bank or trust company authorized to
provide trust services, as a successor to replace the Trustee
upon such resignation or removal. The appointment shall be
effective when accepted in writing by the new Trustee, who
shall have all of the rights and powers of the former Trustee,
including ownership rights in the Trust assets. The former
Trustee shall execute any instrument necessary or reasonably
requested by the Company or the successor Trustee to evidence
the transfer.
(b) The successor Trustee need not examine the records and acts of
any prior Trustee and may retain or dispose of existing Trust
assets, subject to Section 8 hereof. The successor Trustee
shall not be responsible for and the Company shall indemnify
and defend the successor Trustee from any claim or liability
resulting from any action or inaction of any prior Trustee or
from any other past event, or any condition existing at the
time it becomes successor Trustee.
SECTION 12. AMENDMENT OR TERMINATION.
(a) This Trust Agreement may be amended by a written instrument
executed by Trustee, Executive and the Company.
Notwithstanding the foregoing, no such amendment shall
conflict with the terms of the Employment Agreement (as
certified to the Trustee by the Company and Executive) or
shall make the Trust revocable.
(b) The Trust shall not terminate until the date on which
Executive and his beneficiaries are no longer entitled to
benefits pursuant to the terms of the Employment Agreement (as
certified to the Trustee by the Company and Executive).
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(c) Upon written approval of the Executive or beneficiaries
entitled to payment of benefits pursuant to the terms of the
Employment Agreement, the Company may terminate this Trust
prior to the time all benefit payments under the Employment
Agreement have been made.
(d) Upon termination of the Trust pursuant to Section 12(b) or
Section 12(c) any assets remaining in the Trust shall be
returned to the Company.
SECTION 13. MISCELLANEOUS.
(a) Neither the Company nor the Trustee may assign this Agreement
without the prior written consent of the other and Executive,
except that the Trustee may assign its rights and delegate its
duties hereunder to any corporation or entity which directly
or indirectly is controlled by, or is under common control
with, the Trustee. This Agreement shall be binding upon, and
inure to the benefit of, the Company and the Trustee and their
respective successors and permitted assigns and to Executive,
his beneficiaries, heirs and personal representatives. Any
entity which shall by merger, consolidation, purchase, or
otherwise, succeed to substantially all the trust business of
the Trustee shall, upon such succession and without any
appointment or other action by the Company, be and become
successor Trustee hereunder, upon notification to the Company.
(b) Any provision of this Trust Agreement prohibited by law shall
be ineffective to the extent of any such prohibition, without
invalidating the remaining provisions hereof.
(c) Benefits payable to Executive and his beneficiaries under this
Trust Agreement may not be anticipated, assigned (either at
law or in equity), alienated, pledged, encumbered or subjected
to attachment, garnishment, levy, execution or other legal or
equitable process.
(d) Notwithstanding anything to the contrary contained elsewhere
in this Trust Agreement, any reference to the Employment
Agreement or Employment Agreement provisions which require
knowledge or interpretation of the Employment Agreement shall
impose a duty upon the Company to communicate such knowledge
or interpretation to the Trustee. The Trustee shall have no
obligation to know or interpret any portion of the Employment
Agreement and shall in no way be liable for any proper action
taken contrary to the Employment Agreement.
(e) This Trust Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
The parties hereby expressly waive, to the full extent
permitted by applicable law, any right to trial by jury with
respect to any judicial proceeding arising from or related to
this Agreement.
10
25
SECTION 14. RELIANCE ON REPRESENTATIONS.
(a) The Company and the Trustee each acknowledge that the other
will be relying, and shall be entitled to rely, on the
representations, undertakings and acknowledgments of the other
as set forth in this Agreement. The Company and the Trustee
each agree to notify the other promptly if any of its
representations, undertakings, or acknowledgments set forth in
this Agreement ceases to be true.
(b) The Company and the Trustee hereby each represent and warrant
to the other that it has full authority to enter into this
Agreement upon the terms and conditions hereof and that the
individual executing this Agreement on their behalf has the
requisite authority to bind the Company and the Trustee to
this Agreement.
SECTION 15. EFFECTIVE DATE.
The effective date of this Trust Agreement shall be the 3rd day of
April, 2001.
THE LTV CORPORATION
BY:
-----------------------------
NAME:
---------------------------
TITLE:
--------------------------
AND
BY:
-----------------------------
NAME:
---------------------------
TITLE:
--------------------------
11
26
COPPERWELD CORPORATION
BY:
-----------------------------
NAME:
---------------------------
TITLE:
--------------------------
AND
BY:
-----------------------------
NAME:
---------------------------
TITLE:
--------------------------
MELLON BANK, N.A.
BY:
-----------------------------
NAME:
---------------------------
TITLE:
--------------------------
AND
BY:
-----------------------------
NAME:
---------------------------
TITLE:
--------------------------
12
27
EXHIBIT A
Investment Guidelines
Objective:
---------
In view of the relatively short investment horizon, the primary investment
objective is preservation of capital, with maximization of return as the
secondary objective.
Allowable Investments:
---------------------
Allowable investments are as follows:
- Cash
- Money market funds
- Registered under the Investment Company Act of 1940, as
amended
- In compliance with the Securities and Exchange Rule 2a-7
- With a maximum ninety day average maturity
Background:
----------
The assets may be required for distribution as follows:
------------------------------------------------------------------------------------------------------
POTENTIAL DISTRIBUTION
------------------------------------------------------------------------------------------------------
Appr. % of Total No. of Months from
Trust Assets Dates Inception of Trust (3/31/00)
------------ ----- ----------------------------
------------------------------------------------------------------------------------------------------
7 6/30/01 3
------------------------------------------------------------------------------------------------------
7 1/1/02 9
------------------------------------------------------------------------------------------------------
6/30/02 3* - 15
7 or earlier
------------------------------------------------------------------------------------------------------
1/1/03 3* - 33
79 or earlier
------------------------------------------------------------------------------------------------------
100
------------------------------------------------------------------------------------------------------
*Assuming not needed before 6/30/01
------------------------------------------------------------------------------------------------------
The majority of the assets could be required for disbursement in as little as
three months, or a most thirty-three months from inception of the trust.
28
Payment Schedule under Trust Agreement dated April 3, 2001
between The LTV Corporation ("LTV"), Copperweld Corporation
("Copperweld") (collectively, and jointly and severally, the "Company")
and Mellon Bank, N.A. ("Trustee") f/b/o Xxxx X. Xxxxxx ("Executive"),
established pursuant to the Employment Agreement dated
April 3, 2001 among LTV, Copperweld and the Executive
I. Retention Bonus
PAYMENT DATES AND AMOUNTS: DATE AMOUNT
------------------------- ---- ------
June 30, 2001 25% of Deferral Account balance on such
date, less any amount paid directly to
Executive by the Company and identified as a
payment pursuant to Section 5 of the
Employment Agreement
January 1, 2002 33% of Deferral Account balance on such
date, less any amount paid directly to
Executive by the Company and identified as
a payment pursuant to Section 5 of the
Employment Agreement
Earlier of June 30, 50% of Deferral Account balance on such date,
2002 or confirmation of less any amount paid directly to Executive
plan of reorganization by the Company and identified as
a payment pursuant to Section 5 of the
Employment Agreement
The entire balance of the Deferral Account on the earliest to occur of:
1. January 1, 2003;
2. Confirmation of a plan of reorganization
of LTV and Copperweld pursuant to the
bankruptcy proceeding now pending in
United States Bankruptcy Court,
Youngstown, Ohio;
3. The sale of substantially all the
combined assets or combined stock of LTV
Steel Company, Inc. or Copperweld;
4. The Executive's death;
5. The Executive's permanent incapacity, as
defined in the Employment Agreement;
29
6. Involuntary termination of the
Executive's employment by the Company
for any reason; or
7. The voluntary termination by the
Executive of his employment after the
appointment of a new Chief Executive
Officer of LTV (or its successor), other
than the Executive, provided that in the
event of such appointment the Executive
shall have given six (6) months' prior
written notice to the Chief Executive
Officer of his intention to so
terminate;
provided, in each event, that the Executive
is then employed by the Company.
II. Supplemental Pension Benefit
PAYMENT DATE: The earliest to occur of:
------------
1. January 1, 2003;
2. Confirmation of a plan of reorganization of
LTV and Copperweld pursuant to the
bankruptcy proceeding now pending in United
States Bankruptcy Court, Youngstown, Ohio;
3. The sale of substantially all the combined
assets or combined stock of LTV Steel
Company, Inc. or Copperweld;
4. The Executive's death;
5. The Executive's permanent incapacity, as
defined in the Employment Agreement;
6. Involuntary termination of the Executive's
employment by the Company for any reason; or
7. The voluntary termination by the Executive
of his employment after the appointment of a
new Chief Executive Officer of LTV (or its
successor), other than the Executive,
provided that in the event of such
appointment the Executive shall have given
six (6) months' prior written notice to the
Chief Executive Officer of his intention to
so terminate;
provided, in each event, that the Executive is then employed by the
Company.
PAYMENT AMOUNT: A lump sum equal to the present value on the payment
-------------- date of the Executive's supplemental pension benefit
as provided in Section 6 of the Employment
Agreement, as certified as of the payment date by
LTV, Copperweld and the Executive.
30
III. Withholding: All Federal, Pennsylvania and Ohio state and local
income and insurance contribution taxes, as
certified as of the payment date by Copperweld and
the Executive.
Approved this ____ day of April, 2001
----------------------------------
Xxxx X. Xxxxxx
The LTV Corporation
By:
------------------------------
Its:
Copperweld Corporation
By:
------------------------------
Its:
