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EXHIBIT (10)(b)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into as of the 1st day of
July, 2000, by and between LACLEDE STEEL COMPANY, debtor in possession, a
Delaware corporation ("Employer"), and XXXXX X. XXXXXX ("Executive").
WHEREAS, Executive desires to be employed by Employer and Employer
desires to employ Executive under the terms and conditions set forth in this
Employment Agreement; and
WHEREAS, it is Employer's intention to employ Executive upon the terms
and conditions herein, which recognize and compensate Executive for the
obligations of Executive undertaken hereunder, including specifically, but not
by way of limitation, the agreement of Executive not to compete with the
business of Employer, as provided in paragraph 7(b) for the period provided in
paragraph 7(a) upon the termination of Executive's employment by Employer for
any reason; it being understood and agreed that Executive is employed by
Employer to protect and expand the business of Employer;
NOW, THEREFORE, in consideration of the foregoing and the promises and
agreements herein contained, the parties agree as follows:
1. EMPLOYMENT. Employer hereby employs Executive, and Executive hereby
accepts such employment from Employer upon the terms and conditions hereinafter
set forth.
2. TERM OF EMPLOYMENT. The term of Executive's employment under this
Agreement shall be for the period commencing July 1, 2000, and continuing
through June 30 2003. Provided, that Employer may terminate Executive's
employment as of June 30, 2001 or June 30, 2002, by providing Executive at least
ninety (90) days prior written notice of such termination. In addition, this
Agreement shall terminate on the occurrence of any of the following events:
(a) Whenever Employer and Executive shall mutually agree in
writing to terminate Executive's employment by Employer;
(b) Upon the death of Executive;
(c) For "cause," which shall mean Executive's dishonesty or
unlawful acts committed in connection with the business of Employer, and which
results in substantial gain or profit to Executive.
(d) At Employer's option and by action of Employer's Board of
Directors on thirty (30) days' written notice in the event of Executive's
Disability (defined as the failure substantially to discharge Executive's duties
as defined under this Agreement for ninety (90) consecutive days or one hundred
twenty (120) days (whether or not consecutive) in any twelve (12) month period,
as a result of an injury, disease, sickness or other physical or mental
incapacity). A determination of Executive's Disability
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shall be made by a qualified medical doctor licensed to practice in the State of
Missouri chosen by Employer subject to Executive's approval, which approval
shall not be unreasonably withheld. Executive shall consent to be examined by
Employer's medical doctor and shall consent to allow Employer's medical doctor
to discuss Executive's medical condition with Employer. Notwithstanding anything
to the contrary contained herein, Executive's Disability shall not be deemed to
have commenced until full coverage with respect to such Disability shall have
been approved by Employer's disability insurance carrier and payment under
Employer's group disability policy for such Disability shall have commenced.
3. TITLE AND DUTIES OF EXECUTIVE. Executive's title shall be President
and Chief Executive Officer. Employer shall use its best efforts to cause
Executive to be elected to the Board of Directors of Employer ("Board of
Directors"). During Executive's employment by Employer, Executive shall serve
Employer to the best of Executive's ability and shall perform such duties as are
typically performed by the Chief Executive Officer of Employer. Executive agrees
to devote Executive's time and efforts to the business of Employer (except for
usual vacations and reasonable time for attention to personal affairs so long as
Executive's performance hereunder is not adversely affected thereby), and to be
loyal and faithful at all times, constantly endeavoring to improve Executive's
ability and knowledge of the business of Employer in an effort to increase the
value of Executive's services for the mutual benefit of Executive and Employer.
4. COMPENSATION AND BENEFITS.
(a) Employer agrees to pay Executive for Executive's services
during the term of Executive's employment hereunder, a base salary which shall
be at an annual rate of the greater of (i) Three Hundred Twenty-Five Thousand
Dollars ($325,000.00), or (ii) the highest annual base salary authorized by the
Board of Directors after the date hereof. Executive's base salary shall be due
and payable in twelve (12) equal monthly installments. In addition, during the
term of Executive's employment by Employer hereunder, Executive's compensation
shall be reviewed and may be increased and/or Executive may be paid additional
or special compensation including without limitation stock options, stock
appreciation rights and other incentive compensation, or bonuses from time to
time by the mutual agreement of Executive and Employer, as determined by the
Board of Directors. Without limiting the foregoing, for the period which
commences July 1, 2000 and which ends September 30, 2000, Employer shall pay
Executive a bonus of not less than twenty percent (20%) of the base salary
earned by Executive during such period. For fiscal years commencing on and after
October 1, 2000 during the term of this Agreement, Executive shall have the
opportunity to earn annual bonuses of between thirty percent (30%) and forty
percent (40%) of Executive's annual base salary rate as then in effect based
upon achieving certain strategic performance goals, such goals to be recommended
by Executive and submitted in advance to the Board of Directors for approval. In
addition, during the term of this Agreement, Executive shall receive such fringe
benefits as are made available by Employer from time to time to other senior
executives of Employer; provided however, that benefits paid to Executive in all
events shall include Executive's leased automobile, and dues and initiation fees
for a country club in the
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Metropolitan St. Louis area of Executive's choice.
Upon the confirmation of the plan of reorganization of Employer under Chapter 11
of the Federal Bankruptcy laws, Executive shall be granted an option to purchase
not less than three percent (3%) of the then outstanding stock of the
reorganized company at an option price per share equal to the value per share
which the secured creditors of Employer receive pursuant to such plan of
reorganization. One-third (1/3) of such option shall become exercisable in each
of the three (3) succeeding anniversary dates of the grant contingent upon
Executive's continued employment on each such anniversary date; provided,
however, that if, for any reason other than "cause" (as defined in paragraph
2(c)), Employer gives Executive ninety (90) days written notice of the
termination of Executive's employment as set forth in paragraph 2, then one
hundred percent (100%) of such option shall become fully exercisable as of the
date of the giving of such notice. Any unexercised portion of such option shall
expire on Executive's last day of employment. Executive shall be entitled to
five (5) weeks of paid vacation each year.
(b) In the event of the termination of Executive's employment
either (i) by Executive for any reason including death or Disability, or (ii) by
Employer without "cause" (as defined in paragraph 2(c) herein), Executive shall
be paid incentive compensation for the fiscal year in which such termination
occurred in an amount equal to the product of (a) the amount of incentive
compensation to which he would have been entitled for such fiscal year had there
been no termination of employment and (b) a fraction, the numerator of which is
the number of days of such fiscal year in which Executive remained in the
employment of Employer and the denominator of which is 365.
5. TERMINATION. In the event of the termination of Executive's
employment by Employer, without "cause" (as defined in paragraph 2(c) herein),
then, in lieu of any further salary payment pursuant to paragraph 4(a) herein,
Employer agrees to pay Executive for the remaining term of this Agreement at an
annual rate equal to the average of Executive's "compensation" for the three (3)
fiscal years (or such shorter period as Executive shall have been employed by
Employer) preceding the year of such termination. For this purpose the term
"compensation" means Executive's base salary in effect for a particular year
plus the incentive compensation received by Executive with respect to services
rendered in such year whether or not such incentive compensation is actually
paid in such year. Amounts described above due Executive under this paragraph 5
shall be due and payable for the duration of the remaining term in equal monthly
installments. In addition to the foregoing, Employer shall continue, for the
duration of the remaining term, to provide Executive with such additional fringe
benefits to which Executive was entitled as of the day immediately prior to the
date of such termination. Nothing in this paragraph 5 shall reduce or otherwise
effect Executive's right to the benefits set forth in paragraph 4(b) and (c)
herein.
6. EXTENT OF SERVICES. Executive shall devote Executive's time,
attention and energy to the business of Employer, and shall not during the term
of this Agreement, or any extension hereof, without Employer's consent, be
engaged in any other business activity whether or not such business activity is
pursued for gain, profit or other pecuniary advantage; but nothing contained
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herein shall be construed as preventing Executive from investing his assets in
such form or manner as will not require any service on the part of Executive in
the operation of the affairs of the corporations or other entities in which
Executive may invest his assets.
7. COVENANTS OF EXECUTIVE.
(a) During the term of Executive's employment with Employer,
and for a period of one (1) year after the termination of such employment, for
whatever reason, except for the termination of Executive's employment under
circumstances which constitute a violation by Employer of the provisions of this
Agreement, Executive covenants and agrees that Executive will not (except as
required in Executive's duties to Employer), in any manner directly or
indirectly:
(i) Disclose or divulge to any person, entity,
firm or company whatsoever, or use for Executive's own benefit or the benefit of
any other person, entity, firm or company directly or indirectly, in competition
with the business of Employer, as the same may exist at the date of such
cessation, any proprietary business methods, customer lists, supplier lists,
business plans or other information or data of Employer, without regard to
whether all of the foregoing matters will otherwise be deemed confidential,
material or important, the parties hereto stipulating that as between them, the
same are important, material and confidential and greatly affect the effective
and successful conduct of the business and the goodwill of Employer, and that
any breach of the terms of this subparagraph (i) shall be a material breach of
this Agreement;
(ii) Solicit, divert, take away or interfere with
any of the customers, trade, business, patronage, employees or agents of
Employer;
(iii) Engage, directly or indirectly, either
personally or as an employee, partner, associate, officer, manager, agent,
advisor, consultant or otherwise, or by means of any corporate or other entity
or device, in any business competitive with the business of Employer.
(b) For purposes hereof, a business will be deemed
competitive if such business both (i) involves the manufacture and sale of
steel, or any other business which is directly competitive, during or as of the
date of cessation of Executive's employment, with any business then being
conducted by Employer or as to which Employer has at such time formulated
definitive plans to enter; and (ii) makes substantial sales of products directly
competitive with those of Employer in any of the States of Missouri, Illinois,
Indiana, Iowa, Pennsylvania, Michigan and Ohio.
(c) All of the covenants on behalf of Executive contained in
this paragraph 7 shall be construed as agreements independent of any other
provision of this Agreement, and the existence of any claim or cause of action
against Employer, whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by Employer of these covenants.
(d) It is the intention of the parties to restrict the
activities of Executive under this paragraph 7 only to the extent necessary for
the protection of legitimate business interests of Employer, and the parties
specifically covenant and agree that should any of the clauses or provisions set
forth herein, under any set of circumstances not now foreseen by the parties, be
held by a
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court of competent jurisdiction to be illegal, invalid or unenforceable under
present or future laws effective during the term of this Agreement, then and in
that event, it is the intention of the parties hereto that, in lieu of each such
clause or provision of this paragraph 7, there shall be substituted or added,
and there is hereby substituted or added, terms to such illegal, invalid or
unenforceable clause or provision as may be legal, valid and enforceable.
8. EXPENSES. In addition to compensation paid to Executive under
paragraph 4 hereof, during the period of Executive's employment, Employer will
pay directly or reimburse Executive for reasonable and necessary expenses
incurred by Executive in the interest of the business of Employer. Without
limiting the foregoing, Employer shall (a) reimburse Executive for Executive's
reasonable commuting and local living expenses incurred in commuting between
Executive's current residence in Hermitage, Pennsylvania and St. Louis,
Missouri, until such time as Executive relocates Executive's family to St.
Louis, Missouri, or, if earlier, September 18, 2000, (b) pay the cost of the
real estate fee on the sale of Executive's current principal residence in
Hermitage, Pennsylvania, (c) pay Executive the excess, if any of Two Hundred
Eighty-Thousand Dollars ($280,000) over the gross sales price to be paid to
Executive on the arms' length sale of Executive's current principal residence in
Hermitage, Pennsylvania, and (d) reimburse Executive for Executive's reasonable
moving expenses incurred in Executive's move from Hermitage, Pennsylvania to St.
Louis, Missouri. Employer agrees that Executive may contract with Global Van
Lines to move Executive and his family's property to the St. Louis Metropolitan
Area. In addition, the Company shall pay Executive an amount equal to taxes
actually incurred and payable by Executive arising from reimbursement by the
Company of Executive's reimbursable expenses arising from Executive's sale of
his present home and Executive's family's move to the St. Louis Metropolitan
area. All such reimbursable expenses paid by Executive will be reimbursed by
Employer upon presentation by Executive, from time to time, of an itemized
account of such expenditures, accompanied by appropriate receipts or other
evidence of payment to the extent necessary to permit the deductibility thereof
for Federal income tax purposes.
9. DOCUMENTS. Executive agrees that all documents, instruments,
drawings, plans, contracts, proposals, records, notebooks, invoices, statements
and correspondence, including all copies thereof, relating to the business of
Employer, other than purely personal documents, shall be the property of
Employer; and upon the cessation of Executive's employment with Employer, for
whatever reason, all of the same then in Executive's possession, whether
prepared by Executive or others, will be left with or immediately delivered to
Employer.
10. REMEDIES. It is agreed that any material breach or evasion of any
of the terms of this Agreement by Executive will result in immediate and
irreparable injury to Employer and will authorize recourse to injunction and/or
specific performance as well as to all other legal or equitable remedies to
which Employer may be entitled. No remedy conferred by any of the specific
provisions of this Agreement is intended to be exclusive of any other remedy,
and each and every remedy shall be cumulative and shall be in addition to every
other remedy whether given hereunder or not or whether hereafter existing at law
or in equity, by statute or
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otherwise. The election of any one or more remedies by Employer or Executive
shall not constitute a waiver of the right to pursue other available remedies at
any time or cumulatively from time-to-time.
11. SEVERABILITY. All agreements and covenants herein contained are
severable, and in the event any of them shall be held to be invalid or
unenforceable by any court of competent jurisdiction, this Agreement shall
continue in full force and effect and, subject to paragraph 7(d) hereof, shall
be interpreted as if such invalid agreement or covenant were not contained
herein.
12. WAIVER OR MODIFICATION. No amendment, waiver or modification of
this Agreement or of any covenant, condition or limitation herein contained
shall be valid unless in writing and duly executed by the party to be charged
therewith, and no evidence of any amendment, waiver or modification shall be
offered or received in evidence in any proceeding, arbitration or litigation
between the parties hereto arising out of or affecting this Agreement, or the
rights or obligations of the parties hereunder, unless such amendment, waiver or
modification is in writing, duly executed as aforesaid, and the parties further
agree that the provisions of this paragraph may not be waived or modified except
as herein set forth. Failure of Executive or Employer to exercise or otherwise
act with respect to any rights granted hereunder in the event of a breach of any
of the terms or conditions hereof by the other party, shall not be construed as
a waiver of such breach, nor prevent Executive or Employer from thereafter
enforcing strict compliance with any and all of the terms and conditions hereof.
13. FEES AND EXPENSES. If Executive is the prevailing party, Employer
shall pay all of Executive's reasonable legal fees and related expenses
(including the costs of experts, evidence and counsel) incurred by Executive as
a result of (i) Executive's termination of employment (including all such fees
and expenses, if any, incurred in contesting or disputing any such termination
of employment) or (ii) Executive's seeking to obtain or enforce any right or
benefit provided by this Agreement or by any other plan or arrangement
maintained by Employer under which Executive is or may be entitled to receive
benefits.
14. NOTICES. All notices, requests, demands or other communications
hereunder ("Notice") shall be in writing and shall be given by registered or
certified mail, return receipt requested:
if to Employer to:
Laclede Steel Company
Attn: Xxxxxxx X. Xxxx
Executive Vice President and Chief Financial
Officer
000 Xxxxx Xxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
and, if to Executive, to:
Xxxxx X. Xxxxxx
0000 Xxxxxxx Xxxxx, #00
Xxxxxxxxx, Xxxxxxxxxxxx 00000
or to such other addresses as to which the parties hereto give Notice in
accordance with this paragraph 14.
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15. CONSTRUCTION. This Agreement shall be governed by and construed and
interpreted according to the laws of the State of Missouri, notwithstanding the
place of execution hereof, nor the performance of any acts in connection
herewith or hereunder in any other jurisdiction. For all purposes hereof,
reference to Employer shall include each and every subsidiary and affiliated
company of Employer.
16. ASSIGNABILITY. The services to be performed by Executive hereunder
are personal in nature and therefore Executive shall not assign his rights or
delegate his obligations under this Agreement, and any attempted or purported
assignment or delegation not herein permitted shall be null and void.
17. SUCCESSORS. Subject to the provisions of paragraph 7, this
Agreement shall be binding upon and shall inure to the benefit of Employer and
Executive and their respective heirs, executors, administrators, legal
representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
__________________________
XXXXX X. XXXXXX
LACLEDE STEEL COMPANY
By____________________________
XXXXXX X. XXXX, XX., PRESIDENT
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