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Exhibit 10.4
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated May 1, 2001 by and between Xxx X. Xxxxxxx
(the "Executive") and Geneva Steel Holdings Corp., a Delaware corporation, and
Geneva Steel LLC, a Delaware limited liability company (collectively, the
"Company").
WHEREAS, the Executive has been an employee of the Company; and
WHEREAS, the Company desires to continue to obtain the benefit of the
experience, supervision and services of the Executive in a new position and
desires to employ the Executive upon the terms and conditions hereinafter set
forth, and the Executive is willing and able to accept such employment on such
terms and conditions.
NOW, THEREFORE, in consideration of the premises and mutual agreements
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Executive
agree as follows:
1. Term of Employment. Subject to earlier termination as provided
herein, the Executive's employment hereunder shall commence on the date of this
Agreement and continue until the third (3rd) anniversary thereof (the "Term")
unless earlier terminated pursuant to the terms hereof, provided, however, that
on the second (2nd) anniversary thereof and each anniversary thereafter, this
Agreement will automatically be extended for a period of one (1) year unless
either party gives the other ninety (90) days written notice of termination
prior to any such anniversary.
2. Duties. During the Term, the Executive shall serve as the
President and Chief Executive Officer of the Company, subject to the direction
and control of the Board of Directors of the Company (the "Board"), and will
oversee and direct the operations of the Company and perform such other duties
as are consistent with the responsibilities of a President and Chief Executive
Officer. During the Term, the Executive shall devote substantially all of his
business time, energy, experience and talents to such employment; shall devote
his best reasonable efforts to advance the interests of the Company; and shall
not engage in any other business activities, as an employee, director,
consultant or in any other capacity (other than as an investor), whether or not
he receives any compensation therefor, without the prior written consent of the
Corporate Governance Committee, provided that the Executive shall be entitled to
serve on the board of directors (or its equivalent) of any charitable
organization and to continue to serve on the board of directors of Harnischfeger
Industries, Inc.
3. Compensation; Reimbursement. Commencing on the date hereof,
the Company shall pay or provide to the Executive as follows, in full
satisfaction for his services:
(a) Base Salary. A base salary payable in equal installments
in accordance with the Company's normal payroll practices at the rate of
$385,000 per annum during the Term ("Base Salary"). The Board will annually
review the Base Salary payable to the Executive hereunder.
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(b) Benefits. The Executive shall be entitled to continue to
participate in all health, life, disability, vacation, pension, sick leave and
to receive all other benefits, fringe benefits and perquisites he is currently
receiving as an employee of the Company and will be entitled to receive all
benefits generally made available to the Company's non-union employees during
the Term, provided that the Company shall be entitled to amend or terminate any
employee benefit plans which are applicable generally to the Company's
employees.
(c) Expenses. The Company shall pay or reimburse the Executive
for ordinary and necessary business expenses incurred by him in the performance
of his duties hereunder in accordance with the Company's usual policies.
(d) Stock Options. The Company agrees that the Compensation
Committee of the Board will review the Executive's current stock option position
within the ninety (90) days following the date hereof, and determine in its sole
discretion whether an additional grant of options should be made to him. If the
Committee resolves to grant additional stock options to the Executive, the grant
shall be embodied in a stock option agreement between the Company and the
Executive.
4. Termination. This Agreement may be terminated prior to the
expiration of the Term as follows:
(a) Disability or Death. The Executive's employment may be
terminated by the Company if the Board determines that he has incurred a
"Disability." For purposes of this Agreement, "Disability" shall mean a physical
or mental incapacity that renders the Executive unable to substantially and
competently perform his duties hereunder for a period of ninety (90) consecutive
days or for ninety (90) days during any six (6) month period during the Term. In
order to assist the Board in making this determination, the Executive shall, as
reasonably requested by the Board, (i) make himself available for medical
examinations by one or more physicians chosen by the Board and (ii) grant to any
such physicians access to all relevant medical information concerning him,
arrange to furnish copies of his medical records to such physicians and use his
reasonable best efforts to cause his own physicians to be available to discuss
his health with such physicians. This Agreement shall automatically terminate on
the date of the Executive's death.
(b) For Cause. This Agreement may be terminated at any time by
the Company for Cause, effective immediately upon the Company's delivery of
notice of termination to the Executive. For purposes of this Agreement, "Cause"
shall mean:
(i) the Executive's continued failure, whether willful,
intentional or negligent, to perform substantially his duties hereunder (other
than as a result of a Disability), provided that any such failure is not cured
within ten (10) days after the Company delivers written notice of it to the
Executive;
(ii) gross or willful misconduct or gross negligence by
the Executive in the performance of his duties hereunder, provided that such
conduct is not cured within ten (10) days after the Company delivers written
notice of it to the Executive;
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(iii) the Executive's conviction of a felony under the
laws of the United States or any state thereof; or
(iv) the Executive's material breach of any provision or
covenant contained in Sections 6 or 7 hereof.
(c) Without Cause. The Company shall have the right to
terminate the employment of the Executive without Cause at any time upon ten
(10) days written notice to the Executive, and Executive's employment shall
terminate on the date specified in such notice.
(d) Resignation Without Good Reason. The Executive shall have
the right to terminate his employment at any time for any reason, effective upon
sixty (60) days' written notice to the Company.
(e) Resignation For Good Reason. The Executive shall have the
right to terminate this Agreement at any time, effective upon sixty (60) days'
written notice to the Company, for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean and be deemed to exist, if without the Executive's
prior written consent:
(i) the Executive's Base Salary is reduced, other than in
connection with a reduction of executive compensation imposed by the Board as to
all senior executives of the Company not in excess of ten percent (10%) of base
salary in response to negative financial results or other adverse circumstances
affecting the Company or its subsidiaries;
(ii) the Executive's duties or responsibilities hereunder
are significantly reduced;
(iii) the Executive's office is relocated to one that is
more than seventy-five (75) miles from the location at which the Executive was
based immediately prior to the relocation;
(iv) the Company fails to perform substantially any
material term or provision of this Agreement; or
(v) the Executive is assigned duties and responsibilities
that are inconsistent in any material respect with the scope of the duties and
responsibilities associated with his title and position, as set forth hereunder.
Notwithstanding the foregoing, the Executive shall not have Good Reason unless
he notifies the Company of an alleged breach within thirty (30) days of its
occurrence and the Company fails to cure any such breach within ten (10) days of
its receipt of such notice.
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5. Payments following Termination.
(a) For Cause or Voluntarily. If the Executive's employment is
terminated by the Company pursuant to Section 4(b) hereof or by the Executive
other than by reason of Section 4(e), the Executive shall receive no severance,
and shall be entitled to receive, in lieu of any other payments or benefits, his
accrued but unpaid salary at the rate provided in Section 3(a) or as otherwise
increased, any accrued but unpaid bonus from a preceding year, any benefits
generally available to nonunion employees upon termination under similar
circumstances, plus any expenses that are properly reimbursable pursuant to
Section 3(c) through the date of termination (together, the "Accrued
Obligations").
(b) On Disability. If termination is due to Disability, the
Executive shall be entitled to receive, in lieu of any other payments or
benefits, any Accrued Obligations, and a pro rata portion of any annual bonus
that otherwise would have been payable with respect to the year in which
Disability occurs, but based on the ratio of the number of days he worked in
such year bears to 365. Such amounts shall be paid promptly in a cash lump sum
following the date of Disability and/or following the date the amount of the
bonus is determined, as applicable. Executive shall receive such disability
benefits as are currently available or may hereinafter be made available
pursuant to Section 3(b).
(c) Without Cause or For Good Reason. If the Company
terminates the Executive's employment without Cause or the Executive terminates
for Good Reason, in lieu of any other payments or benefits, Executive shall be
entitled to (a) the Accrued Obligations, (b) one and one-half (1-1/2) times his
(i) Base Salary and (ii) a pro rata portion of any annual bonus that otherwise
would have been payable with respect to the year in which termination occurs,
but based on the ratio of the number of days he worked in such year bears to 365
and (c) continue to participate in the Company's group medical plan for eighteen
months, to the extent participation is permitted under the terms of such plan
(if participation is not so permitted, the Company shall pay the Executive's
COBRA continuation coverage premiums for eighteen months). The payments due
under clauses (a) and (b) shall be made in a simple lump sum in cash within
thirty (30) days of the Executive's termination of employment.
(d) Release. Prior to Executive's receipt of any termination
payment under this Section 5, Executive shall issue a general release to the
Company, in such form as the Company may reasonably require, which release shall
extinguish all actual or potential claims or causes of action he has, may have
had, or hereafter may have against the Company; provided, however, that
Executive shall not release any indemnification or contribution rights or
obligations that he may have under this Agreement or any other agreement or any
rights or obligations he may have under this Agreement or at law, unless
otherwise agreed to by the parties in writing. The Company shall simultaneously
provide a release to Executive in the form mutatis mutandis given to the Company
by Executive.
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6. Protection of Confidential Information.
(a) Acknowledgment. The Executive agrees and acknowledges
that, in the course of rendering services to the Company and its customers, he
has acquired and will acquire access to and become acquainted with confidential
information about the professional, business and financial affairs of the
Company, its subsidiaries and affiliates that is non-public, confidential or
proprietary in nature. The Executive acknowledges that the Company is engaged in
a highly competitive business and the success of the Company in the marketplace
depends upon its good will and reputation for quality and dependability. The
Executive recognizes that in order to guard the legitimate interests of the
Company, it is necessary for it to protect all confidential information. The
existence of any claim or cause of action by Executive against the Company shall
not constitute and shall not be asserted as a defense to the enforcement by the
Company of this Agreement. The Executive further agrees that his obligations
under Section 6(b) shall be absolute and unconditional.
(b) Confidential Information. At all times after the Term, the
Executive shall keep secret all non-public information, matters and materials of
the Company (including subsidiaries or affiliates), including, without
limitation, know-how, trade secrets, mail order and customer lists, pricing
policies, operational methods, any information relating to the Company's
(including any subsidiaries or affiliates) products, processes, customers and
services and other business and financial affairs of the Company (collectively,
the "Confidential Information"), to which he has had or may have access and
shall not use or disclose such Confidential Information to any person other than
(i) the Company, its authorized employees and such other persons to whom the
Executive has been instructed to make disclosure by the Company, in each case
only to the extent required in the course of the Executive's service to the
Company or as otherwise expressly required in connection with court process,
(ii) as may be required by law or (iii) to the Executive's personal advisers for
purposes of enforcing or interpreting this Agreement, or to a court for the
purpose of enforcing or interpreting this Agreement, and who in each case have
been informed as to the confidential nature of such Information and, as to
advisers, their obligation to keep such information confidential. "Confidential
Information" shall not include any information which is in the public domain,
provided such information is not in the public domain as a consequence of
disclosure by the Executive in violation of this Agreement. Upon termination of
his employment for any reason, the Executive shall deliver to the Company all
documents, papers and records (including, but not limited to, electronic media)
in his possession or subject to his control that (x) belong to the Company or
(y) contain or reflect any information concerning the Company, its subsidiaries
and affiliates; provided, however, that Executive may retain and possess a "form
file" of documents and records maintained during the Term of this Agreement.
After the Term of this Agreement, Executive may utilize any such forms subject
to his obligations under this Agreement to maintain the Confidential Information
at all times.
(c) Remedies for Breach. The Company and the Executive agree
that the restrictive covenants contained in this Agreement are severable and
separate, and the unenforceability of any specific covenant herein shall not
affect the validity of any other covenant set forth herein. The Executive
acknowledges that the Company will suffer irreparable harm as a result of a
breach of such restrictive covenants by the Executive for which an adequate
monetary
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remedy does not exist and a remedy at law may prove to be inadequate.
Accordingly, in the event of any actual or threatened breach by the Executive of
any provision of this Agreement, the Company shall, in addition to any other
remedies permitted by law, be entitled to obtain remedies in equity, including,
without limitation, specific performance, injunctive relief, a temporary
restraining order, and/or a permanent injunction in any court of competent
jurisdiction, to prevent or otherwise restrain a breach of Section 6(b), without
the necessity of proving damages, posting a bond or other security. Such relief
shall be in addition to and not in substitution of any other remedies available
to the Company. The existence of any claim or cause of action of the Executive
against the Company, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Company of said covenants.
7. Intellectual Property. The Executive acknowledges that,
during the Term, he is subject to the Company's policies, whether written or
not, relating to all copyrights, trademarks, trade names, servicemarks, and
other intangible or intellectual property rights and further acknowledges that a
breach of any such policy may give rise to the remedies contemplated hereunder.
8. Notices. All notices or other communications hereunder shall
be in writing and shall be deemed to have been duly given (a) when delivered
personally, (b) upon confirmation of receipt when such notice or other
communication is sent by facsimile, (c) one day after delivery to an overnight
delivery courier, or (d) on the fifth day following the date of deposit in the
United States mail if sent first class, postage prepaid, by registered or
certified mail. The addresses for such notices shall be as follows:
(a) For notices and communications to the Company
c/o Geneva Steel Holdings Corp.
00 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Attn: General Counsel
with a copy to:
Xxxx Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxxx Xxxxxxx
(b) For notices and communications to the Executive, to
the address or facsimile set forth below his
signature hereto. Any party hereto may, by notice to
the other, change its address for receipt of notices
hereunder.
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9. Miscellaneous.
(a) Governing Law. This Agreement shall be governed by the
laws of the State of Utah, without regard to any conflicts of laws principles
thereof that would call for the application of the laws of any other
jurisdiction. Any action or proceeding seeking to enforce any provision of, or
based on any right arising out of, this Agreement may be brought against either
of the parties in the courts of the State of Utah and each of the parties hereby
consents to the jurisdiction of such courts (and of the appropriate appellate
courts) in any such action or proceeding and waives any objection to venue laid
therein.
(b) Amendment: Waiver. This Agreement may be amended,
modified, superseded, canceled, renewed or extended, and the terms hereof may
be waived, only by a written instrument executed by both of the parties hereto
or, in the case of a waiver, by the party waiving compliance. The failure of
either party at any time or times to require performance of any provision hereof
shall in no manner affect the right at a later time to enforce the same. No
waiver by either party of the breach of any term or covenant contained in this
Agreement, whether by conduct or otherwise, in any one or more instances, shall
be deemed to be, or construed as, a further or continuing waiver of any such
breach, or a waiver of the breach of any other term or covenant contained in
this Agreement.
(c) Successors and Assigns. This Agreement shall be binding
upon the Executive, without regard to the duration of his employment by the
Company or reasons for the cessation of such employment, and inure to the
benefit of his administrators, executors, heirs and assigns, although the
obligations of the Executive are personal and may be performed only by him. This
Agreement shall also be binding upon and inure to the benefit of the Company and
its subsidiaries, successors and assigns, including any corporation with which
or into which the Company or its successors may be merged or which may succeed
to its assets or business.
(d) Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be considered to have the force and effect of
an original.
(e) Entire Agreement. With the exception of any existing
option plan and options agreements, this Agreement supersedes all prior
agreements between the parties with respect to its subject matter and is
intended (with the documents referred to herein) as a complete and exclusive
statement of the terms of the agreement between the parties with respect
thereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
Geneva Steel Holdings Corp.
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: V.P. of Human Resources
Xxx X. Xxxxxxx
/s/ Xxx X. Xxxxxxx
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Address and Facsimile:
0000 Xxx Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
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