Exhibit 10.5
CHIEF EXECUTIVE OFFICER
SEVERANCE AGREEMENT
(as amended and restated to reflect changes
adopted by the Board on September 18, 1997)
-------------------------------------------
______________, 19___
____________________
____________________
____________________
Dear _____________:
Reference is made to your Executive Officer Severance Agreement, dated
___________, 19___ (the "Agreement"), setting forth the benefits to be provided
to you in the event of the termination of your employment upon the circumstances
therein specified. Upon your execution of a counterpart of this letter, the
Agreement shall be deemed amended and, as so amended, is restated in its
entirety to read as hereinafter set forth.
AK Steel Corporation ("AKS"), since its formation, has established itself as a
strong competitor in the carbon flat rolled steel industry. Continuity of the
management of AKS is a critical factor to the continued growth and success of
AKS. The Board of Directors ("Board") of AK Steel Holding Corporation
("Holding"), of which AKS is a wholly-owned subsidiary, believes it is in the
best interest of Holding and AKS to reinforce and encourage the continued
attention and dedication of key members of management to their assigned duties.
In consideration of the mutual promises contained herein, it is hereby agreed
that Holding shall cause AKS to provide and AKS shall provide to you, and you
shall receive from AKS, the benefits set forth in this Agreement if your
employment by AKS (including, for the purposes hereof, its subsidiaries and
Affiliates, as hereinafter defined) is terminated during the term of this
Agreement as provided herein.
1 . Purpose
-------
This Agreement establishes certain basic terms and conditions relating to
your employment with AKS, and special arrangements relating to the
termination of your employment with AKS for any reason other than: (i) your
voluntary retirement; (ii) your becoming totally and permanently disabled
under the AKS long-term disability plan or policy; or (iii) your death.
This Agreement supersedes all prior agreements with AKS or any predecessor
business, as well as all other AKS severance policies and practices, except
to the extent incorporated or restated herein. Notwithstanding the
foregoing, neither the termination of your employment nor anything
contained
in this Agreement shall have any affect upon your rights under (i) any tax-
qualified "pension benefit plan", as such term is defined in the Employee
Retirement Income Security Act of 1974, as amended (ERISA), (ii) any
"welfare benefit plan" as defined in ERISA, including by way of
illustration and not limitation, any medical, surgical or hospitalization
benefit coverage or long-term disability benefit coverage, or (iii) any
non-qualified deferred compensation arrangement, including by way of
illustration and not limitation, any non-qualified pension plan or deferred
compensation plan.
2. Employment
----------
During the term of this Agreement:
(a) you will be employed by AKS (including for this purpose any direct or
indirect subsidiary or Affiliate of AKS to which you may be
transferred) in your present position or in a position that is at
least comparable to your present position in compensation,
responsibility and stature and for which you are suited by education
and background;
(b) you will continue to be eligible to participate in any employee
benefit plan of AKS in accordance with its terms; and
(c) you will be entitled to the same treatment under any generally
applicable employment policy or practice as any other key member of
management of AKS whose position in the AKS organization is at a level
of responsibility comparable to yours.
Those plans, policies and practices that generally apply to other key
members of management of AKS will be referred to in this Agreement as your
"Employment Benefits." Your Employment Benefits may be modified from time
to time after the date hereof without violation of this Agreement if the
changes apply generally to other key members of management of AKS.
3. Term of Agreement
-----------------
This Agreement shall be deemed effective as of ____________, 19___ (the
"Effective Date") and shall continue in effect through the later of: (i)
the fifth anniversary of the Effective Date or (ii) the completion of full
payment of all benefits promised hereunder. This Agreement shall be
automatically renewed annually from and after the fifth anniversary of the
Effective Date unless written notice of non-renewal is given by you or by
AKS at least ninety (90) days prior to the expiration of the term,
including any extension thereof.
2
4. Termination of Employment
-------------------------
Your employment may be terminated in accordance with any of the following
paragraphs. The date upon which the termination of your employment becomes
effective is hereinafter referred to as the "Date of Termination". The
period between the date of notice of termination and the Date of
Termination is referred to as the "Notice Period".
(a) Involuntary Termination Without Cause
-------------------------------------
AKS may terminate your employment without Cause (as defined in Section
4(b) below), but only upon written notice given to you by AKS not less
than thirty (30) days prior to the Date of Termination. During the
Notice Period, you shall continue to receive your full salary and
Employment Benefits. From and after the Date of Termination, pursuant
to this Section 4(a), you shall be entitled to those benefits provided
under Section 5.
(b) Involuntary Termination For Cause
---------------------------------
AKS may terminate your employment for Cause, but only upon written
notice, specifying the facts or circumstances constituting such Cause,
which notice may be given on or at any time prior to the Date of
Termination. For the purposes of this Section 4(b), "Cause" means a
willful engaging in gross misconduct materially and demonstrably
injurious to AKS. "Willful" means an act or omission in bad faith and
without reasonable belief that such act or omission was in or not
opposed to the best interests of AKS. From and after your Date of
Termination, pursuant to this Section 4(b), you shall only be entitled
to those benefits provided under Section 8.
(c) Voluntary Termination Without Good Reason
-----------------------------------------
You may voluntarily terminate your employment without Good Reason (as
defined in Section 4(d) below), but only upon written notice given to
AKS by you not less than thirty (30) days prior to the Date of
Termination. During the Notice Period, you shall continue to receive
your full salary and Employment Benefits, provided you satisfactorily
perform your duties during the Notice Period (unless relieved of those
duties by AKS). From and after the Date of Termination, pursuant to
this Section 4(c), you shall only be entitled to those benefits
provided under Section 8.
(d) Voluntary Termination For Good Reason
-------------------------------------
You may voluntarily terminate your employment for Good Reason (as
herein defined), but only upon written notice, specifying the facts or
circumstances constituting such Good Reason, given to AKS by you at
least thirty (30) days prior to the Date of Termination and not more
than sixty (60) days following
3
the occurrence of the circumstances constituting such Good Reason. For
the purposes of this Section 4(d), "Good Reason" shall mean the
occurrence, without your express written consent, of any of the
following circumstances (unless, in the case of clauses (i), (v),
(vi), (vii) or (viii) below, such circumstances are fully corrected
prior to the Date of Termination specified in the notice of
termination):
(i) the assignment to you of any duties inconsistent with your
position within AKS or a significant adverse alteration in the
nature or status of your responsibilities or the conditions of
your employment;
(ii) a reduction by AKS in your annual base salary provided,
however, that no such reduction shall reduce your benefits
under Section 5 if you have given timely notice pursuant to
this Section 4(d);
(iii) a requirement by AKS that you be based anywhere other than the
principal executive offices of AKS except for required travel
on AKS business to an extent substantially consistent with your
customary business travel obligations;
(iv) the failure of AKS to pay to you any portion of your
compensation within seven (7) days of the date such
compensation is due;
(v) the failure of AKS, at any time within 24 months following the
occurrence of a Change In Control (as defined in Section 7(b)
hereof), to continue in effect any compensation plan in which
you participated immediately prior to such Change In Control,
which plan is material to your total compensation, unless an
equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or
the failure of AKS to continue your participation in such
compensation plan (or in such substitute or alternative plan)
on a basis not materially less favorable to you, both in terms
of the amount of benefits provided and the level of your
participation relative to other participants, than that
existing immediately prior to such Change In Control;
(vi) any material reduction, except to the extent permitted by
Section 2 hereof, in your Employment Benefits;
(vii) the failure of AKS to obtain a satisfactory agreement from any
successor corporation to assume and agree to perform this
Agreement, as contemplated in Section 15 hereof;
(viii) any purported termination of your employment by AKS that is not
effected in compliance with the provisions of Section 4(a) or
4(b) hereof, as the case may be;
4
(ix) notice of non-renewal is given by AKS pursuant to Section 3 of
this Agreement.
If you give notice of termination for Good Reason, then, during the
Notice Period (which shall not exceed 60 days), you shall continue to
receive your full base salary and Employment Benefits as in effect
prior to the occurrence of the circumstances constituting such Good
Reason, subject to the right of AKS to make changes to your Employment
Benefits to the extent permitted by Section 2. From and after the
Date of Termination, pursuant to this Section 4(d), you shall be
entitled to those benefits provided under Section 5.
(e) Voluntary Termination After A Change In Control
-----------------------------------------------
You may voluntarily terminate your employment, with or without Good
Reason, during the thirty (30)-day period immediately following the
date on which a Change In Control occurs, but only upon written notice
given to AKS by you during such 30-day period specifying the Date of
Termination which, unless otherwise agreed by you and AKS, shall not
be less than thirty (30) days nor more than sixty (60) days following
such Change In Control. During the Notice Period, you shall continue
to receive your full salary and Employment Benefits, provided you
satisfactorily perform your duties during the Notice Period (unless
relieved of those duties by AKS). From and after the Date of
Termination, pursuant to this Section 4(e), you shall be entitled to
those benefits provided under Section 5.
5. Special Severance Benefits
--------------------------
(a) If your employment with AKS is involuntarily terminated by AKS without
Cause in accordance with Section 4(a), you voluntarily terminate your
employment for Good Reason in accordance with Section 4(d), or you
voluntarily terminate your employment after a Change In Control in
accordance with Section 4(e), then you shall receive the following
benefits:
(i) Your base salary shall be continued in effect for a period
(hereafter, the "Severance Pay Period") of (1) 36 months from the
Date of Termination, if the notice of your termination is given
within 24 months after the occurrence of a Change In Control or
(2) 24 months from your Date of Termination, if the notice of
your termination is given at any time other than within 24 months
after the occurrence of a Change In Control. The aggregate base
salary payable in accordance with this Section 5(a)(i) shall be
paid to you in a single, undiscounted, lump sum payment within
ten (10) days following the Date of Termination unless you have
requested, in writing, at any time prior to your Date of
Termination to receive payments of your
5
base salary in regular monthly payments throughout the Severance
Pay Period.
(ii) (1) Within ten (10) days following the Date of Termination, you
will receive a lump-sum payment equal in amount to the
result obtained by application of the following formula: P =
(x) times (y) times (z), where:
P = the lump-sum payment;
(x) = twelve times your monthly base salary;
(y) = the fraction obtained by dividing your annual
incentive compensation which was paid or is
payable to you for the immediately preceding
calendar year by your actual base salary for such
year; and
(z) = 3.0 (if the notice of your termination is given
within 24 months after the occurrence of a Change
In Control) or 2.0 (if the notice of your
termination is given at any time other than within
24 months after the occurrence of a Change in
Control).
(2) Within ten (10) days following the date that payment is made
to active employees of AKS, you shall receive a pro-rata
payment of the annual incentive payment you would have
received for the year in which your Date of Termination
occurs. Such payment shall be (A) pro-rated based upon your
Date of Termination and (B) otherwise calculated as an
employee in good standing at your level of participation in
effect prior to the Date of Termination and assuming 100
percent completion of any individual performance factors.
(iii) Notwithstanding any provision to the contrary in the AK Steel
Holding Corporation 1994 Stock Incentive Plan as amended or any
other similar plan of AKS or Holding (each, a "Plan"), or under
the terms of any grant, award agreement or form for exercising
any right under the Plan, you shall have the right:
(1) to exercise any stock option awarded to you under the Plan
without regard to any waiting period required by the Plan
or award agreement (but subject to a minimum six month
holding period from the date of award and any restrictions
imposed by law) from the first day of your Notice Period
until
6
the first to occur of the third anniversary of your Date
of Termination or the date the award expires by its terms,
and
(2) to the absolute ownership of any shares of stock granted to
you under the Plan, free of any restriction on your right to
transfer or otherwise dispose of the shares (but subject to
a minimum six month holding period from the date of grant
and any restrictions imposed by law), regardless of whether
entitlement to the shares is contingent or absolute by the
terms of the grant; and the Board shall take such action
within the Notice Period as is necessary or appropriate to
eliminate any restriction on your ownership of, or your
right to sell or assign, any such shares; and further
provided that if the Board should fail or refuse to take
such action, AKS shall pay you, in exchange for such shares,
no later than ten (10) days after the Date of Termination,
an amount in cash equal to the greatest aggregate market
value of the shares during the Notice Period.
You agree, for a period of six (6) months after your Termination
Date, to continue to comply with all AKS and Holding policies and
directives related to trading in Holding stock which were in
effect prior to your notice of termination. If your compliance
with such policies and directives precludes you from exercising
any stock options or selling any shares of stock described in
paragraphs (1) and (2) above for a period of more than sixty (60)
days from the first day of your Notice Period, then AKS will pay
you in cash the difference between the average share price during
the Notice Period and, if less, the actual share price received
by you at the time of sale provided you have completed such sale
within sixty (60) days from your first opportunity to do so. The
average sale price during the Notice Period will be determined by
averaging the highest share price and the lowest share price
during the Notice Period. Any such differential payment will be
paid to you within thirty (30) days after you provide written
notice to AKS requesting such payment. Such notice is to be
directed to the attention of the Secretary of AKS and contain the
relevant stock transaction dates and actual share price
information.
(iv) During the Severance Pay Period your Employment Benefits shall be
continued, subject to the right of AKS to make any changes to
your Employment Benefits permitted in accordance with Section 2;
provided, however, that you shall not:
(1) accumulate vacation pay for periods after the Date of
Termination;
7
(2) first qualify for sickness and accident plan benefits by
reason of an accident occurring or a sickness first
manifesting itself after the Date of Termination;
(3) be eligible to continue to make contributions to any
Internal Revenue Code Section 401(k) plan maintained by AKS
or qualify for a share of any employer contribution made to
any tax-qualified defined contribution plan; or
(4) be eligible to accumulate service for pension plan purposes;
and
provided, further, that if, during the Severance Pay Period,
you are (and for so long as you remain) employed by any
other employer, the obligations of AKS to continue to
provide you with life, disability and medical, hospital and
other health insurance benefits shall be limited solely to
those benefits necessary to assure that, together with the
corresponding benefits provided to you by your new employer,
you receive total benefits comparable to those to which you
were entitled at the Date of Termination.
(v) You shall qualify for full COBRA health benefit continuation
coverage upon the expiration of the Severance Pay Period.
(vi) You shall be entitled, at no cost to you, to full executive
outplacement assistance with an agency selected by AKS.
(b) If your employment with AKS is involuntarily terminated by AKS without
Cause in accordance with Section 4(a), or if at any time after a
Change In Control you voluntarily terminate your employment with AKS
(or any Affiliate, any successor of AKS, or any entity which as a
result of the completion of the transactions causing a Change In
Control becomes affiliated with AKS) for Good Reason (as defined in
Section 4(d)) or after a Change In Control in accordance with Section
4(e), within ten (10) days following the Date of Termination you will
receive, in addition to any benefits you may be entitled to under
Section 5(a) above, a lump sum payment in an amount equal to the
benefit you would be entitled to under the AK Steel Corporation
Executive Minimum and Supplemental Retirement Plan as amended (the
"EMSRP") determined as if (i) your Vesting Date (as defined under the
EMSRP) had occurred prior to the Date of Termination (if it has not
already occurred as of the Date of Termination) and (ii) you had
attained age 60 prior to the Date of Termination (if you have not
already attained age 60 as of the Date of Termination). The amount of
any such additional benefit shall be calculated as of the Date of
Termination in accordance with the benefit formula under the EMSRP (as
if you had attained
8
age 60, or your actual age if greater), and the payment of such
benefit shall be in lieu of any payment under the EMSRP.
(c) Voluntary termination of your employment with AKS for Good Reason
under Section 4(d) or Section 4(e) shall not be considered a voluntary
termination under the AK Steel Deferred Compensation Plan (the "DCP").
Accordingly, if you terminate your employment with AKS for Good Reason
under Section 4(d) or after a Change In Control under Section 4(e),
you will be fully vested in the interest credited to your account
under the DCP and will be paid your entire account at such time as
provided under the DCP.
(d) You shall not be required to mitigate the amount of any payment
provided for in this Section 5 by seeking other employment or
otherwise, nor shall the amount of any payment or benefits provided
for in this Section 5 be reduced by any compensation or benefits
earned by you as the result of employment by another employer (except
as expressly provided in Section 5(a)(iv) above) or by retirement
benefits, or be offset against any amount claimed to be owed by you to
AKS or any of its Affiliates or successors.
(e) For purposes of calculating any amount due under this Agreement the
effect of any deferral of income shall be disregarded and all sums due
shall be calculated as if no such deferral had been made.
6. Certain Tax Matters
-------------------
(a) If any of the payments provided to you pursuant to Section 5 hereof
(the "Contract Payments") or any other portion of the Total Payments
(as defined below) becomes subject at any time to the tax (the "Excise
Tax") imposed by section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), AKS shall pay to you at the time specified in
section 6(b) below, an additional amount (the "Gross-Up Payment") such
that the net amount retained by you, after deduction of the Excise Tax
on any Contract Payments and/or other Total Payments, any federal and
state and local income tax and Excise Tax upon the payment(s) provided
for by this paragraph, and any interest, penalties or additions to tax
payable by you with respect thereto, shall be equal to the present
value of the Contract Payments and such other Total Payments. For
purposes of determining whether any of the foregoing payments will be
subject to the Excise Tax and the amount of such Excise Tax, (i) any
other payments or benefits received or to be received by you in
connection with a Change In Control or the termination of your
employment (whether such payments are Contract Payments or are payable
pursuant to the terms of any other plan, arrangement or agreement with
AKS, Holding or any of their respective Affiliates or successors, any
person whose actions result in a Change In Control or any corporation
which, as a result of the completion of the transactions causing a
Change In Control, will become affiliated with AKS or Holding within
the meaning of section 1504 of the
9
Code (such other payments, together with the Contract Payments, the
"Total Payments")) shall be treated as "parachute payments" within the
meaning of section 28OG(b)(2) of the Code, and all "excess parachute
payments" within the meaning of section 28OG(b)(1) shall be treated as
subject to the Excise Tax, except to the extent that, in the opinion
of tax counsel selected by AKS' independent auditors and acceptable to
you ("Tax Counsel"), the Total Payments (in whole or in part) do not
constitute parachute payments, or such excess parachute payments are
otherwise not subject to the Excise Tax, (ii) the amount of the Total
Payments that shall be treated as subject to the Excise Tax shall be
equal to the lesser of (1) the total amount of the Total Payments or
(2) the amount of excess parachute payments within the meaning of
sections 28OG(b)(1) (after applying clause (i) hereof), and (iii) the
value of any noncash benefits or any deferred payment or benefit shall
be determined by AKS' independent auditors in accordance with the
principles of sections 28OG(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment(s), you shall be deemed
to pay federal income taxes at the highest marginal rate of federal
income taxation applicable to individuals in the calendar year in
which the Gross-Up Payment(s) is (are) to be made and state and local
income taxes at the highest marginal rates of taxation applicable to
individuals as are in effect in the state and locality of your
residence in the calendar year in which the Gross-Up Payment(s) is
(are) to be made, net of the maximum reduction in federal income taxes
that could be obtained from deduction of such state and local taxes.
In the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder, you shall repay to AKS
at the time that the amount of such reduction in Excise Tax is finally
determined the portion of the Gross-Up Payment attributable to such
reduction (plus the portion of the Gross-Up Payment attributable to
the Excise Tax and federal and state and local income tax imposed on
the Gross-Up Payment being repaid by you if such repayment results in
a federal and state and local income tax deduction), plus interest on
the amount of such repayment at the applicable federal rate (as
defined in section 1274(d) of the Code). In the event that the Excise
Tax is determined to exceed the amount taken into account hereunder
(including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-up Payment), AKS shall
make an additional gross-up payment in respect of such excess (plus
any interest payable with respect to such excess) at the time that the
amount of such excess is finally determined.
(b) The Gross-up Payment(s) provided for in section 6(a) above shall be
made not later than the tenth day following the Date of Termination
or, with respect to any portion of the Excise Tax not determined on or
before such date to be due, upon the imposition of such portion of the
Excise Tax; provided, however, that if the amounts of such payments
cannot be finally determined on or before such date, AKS shall pay to
you on such day an estimate, as determined in good faith by AKS, of
the minimum amount of such payments and shall pay the remainder of
such payments (together with interest at the
10
rate provided in section 1274(b)(2)(B) of the Code) as soon as the
amount thereof can be determined but in no event later than the
thirtieth day after the Date of Termination. In the event that the
amount of the estimated payments exceeds the amount subsequently
finally determined to have been due, such excess shall constitute a
loan by the Corporation to you, payable on the tenth day after demand
by the Corporation (together with interest at the rate provided in
section 1274(b)(2)(B) of the Code).
(c) In the event of any change in, or further interpretation of, sections
28OG or 4999 of the Code and the regulations promulgated thereunder,
you shall be entitled, by written notice to AKS, to request an opinion
of Tax Counsel regarding the application of such change to any of the
foregoing, and AKS shall use its best efforts to cause such opinion to
be rendered as promptly as practicable. All fees and expenses of Tax
Counsel incurred in connection with this Agreement shall be borne by
AKS.
7. Definitions
-----------
For purposes of this Agreement the following terms shall have the following
meanings:
(a) "Affiliate" of any specified person means (i) any other person which,
directly or indirectly, is in control of, is controlled by or is under
common control with such specified person or (ii) any other person who
is a director or officer (1) of such specified person, (2) of any
subsidiary of such specified person or (3) of any person described in
clause (i) above. For purposes of this definition, control of a
person means the power, direct or indirect, to direct or cause the
direction of the management and policies of such person whether by
contract or otherwise and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
(b) "Change In Control" means the occurrence of any of the following
events:
(i) any "Person" (as such term is used in Sections 13(d) and 14(d) of
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
is or becomes the beneficial owner (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a Person shall be
deemed to have "beneficial ownership" of all shares that any such
Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time),
directly or indirectly, of more than 40% of the total voting
power of the Voting Equity Interests of Holding; provided,
however, that a Person shall not be deemed the "beneficial owner"
of shares tendered pursuant to a tender or exchange offer made by
that Person or any Affiliate of that Person until the tendered
shares are accepted for purchase or exchange;
11
(ii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board (together
with any new directors whose election by such Board, or whose
nomination for election by the shareholders of Holding, as the
case may be, was approved by a vote of 66-2/3% of the directors
then still in office who were either directors at the beginning
of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a
majority of the Board then in office; or
(iii) Holding fails to own 100% of the outstanding stock of AKS;
provided, however, that it shall not be deemed a Change in
-------- -------
Control if Holding merges into AKS except that, in such case,
AKS shall be substituted for Holding for purposes of this
definition of "Change in Control" and this clause (iii) shall
not longer be applicable.
(c) "Voting Equity Interests" of a corporation means all classes of stock
then outstanding and normally entitled to vote in the election of
directors or other governing body of such corporation.
8. Benefits Upon Voluntary Termination or Termination for Cause
------------------------------------------------------------
Upon your Date of Termination for Cause in accordance with Section 4(b) or
your Date of Termination without Good Reason in accordance with Section
4(c), all benefits under this Agreement will be void, but, you nevertheless
shall be eligible for any benefits provided in accordance with the plans
and practices of AKS which are applicable to employees generally.
9. Arbitration
-----------
Any dispute under this Agreement (except for disputes arising under
Sections 10 and 12 below) shall be submitted to binding arbitration subject
to the rules of the American Arbitration Association. Except as
hereinafter provided, AKS and you shall each bear your own attorney's fees
and shall share equally the cost of arbitration. However, if you prevail
in a challenge by you to AKS' assertion of the existence of Cause for
termination or in a challenge by AKS to your assertion of the existence of
Good Reason for termination, you shall be reimbursed by AKS for all
reasonable costs or expenses incurred by you in such challenge, including
reasonable attorney's fees.
10. Confidentiality
---------------
You will not disclose to any person or use for the benefit of yourself or
any other person any confidential or proprietary information of AKS without
the prior written consent of an elected officer of AKS. Upon your
termination of employment, you will return to AKS all written or
electronically stored memoranda, notes, plans,
12
records, reports or other documents of any kind or description (including
all copies in any form whatsoever) relating to the business of AKS.
11. Conflicts of Interest
---------------------
You agree for so long as you are employed by AKS to avoid dealings and
situations which would create the potential for a conflict of interest with
AKS. In this regard, you agree to comply with the AKS policy regarding
conflicts of interest.
12. Covenant Not to Compete
-----------------------
During the term of this Agreement, and for a period of one year following
your Date of Termination for any reason other than for Cause pursuant to
Section 4(b) you agree not to be employed by, or serve as director of or
consultant or advisor to, any business engaged directly or indirectly in
the melting, hot rolling, cold rolling, or coating of carbon or stainless,
flat rolled steel, or that is reasonably likely to engage in such business
during the one-year period following your termination of employment;
provided however, if a Change In Control occurs, the foregoing restriction
-------- -------
applicable to the one year period following your Date of Termination shall
lapse and be null and void.
13. Notice
------
Notices required or permitted under this Agreement shall be in writing and
shall be deemed to have been given when personally delivered or mailed by
United States certified mail, return receipt requested, postage prepaid,
addressed to the intended recipient at its or his address first above
written. Notices to AKS shall be marked for the attention of the Chief
Executive Officer of AKS.
14. Modification; Waiver
--------------------
No provision of this Agreement may be waived, modified or discharged except
pursuant to a written instrument signed by you and approved by the Board.
15. Successors; Binding Agreement
-----------------------------
(a) AKS and Holding will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of AKS to expressly
assume and agree to perform this Agreement in the same manner and to
the same extent that AKS would be required to perform it if no such
succession had taken place. Failure of AKS or Holding to obtain such
assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement.
(b) This Agreement shall inure to the benefit of and be enforceable by you
and your personal or legal representatives, executors, administrators,
successors,
13
heirs, distributees, devisees and legatees. If you should die while
any amount would still be payable to you hereunder had you continued
to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to your devisee,
legatee or other designee, or, if there is no such devisee, legatee or
designee, to your estate.
16. Validity; Counterparts
----------------------
This Agreement shall be governed by and construed under the law of the
State of Delaware. The validity or unenforceability of any provision
hereof shall not affect the validity or enforceability of any other
provision hereof. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
Sincerely,
AK STEEL HOLDING CORPORATION
By:
---------------------------------
Accepted and agreed to this _____ day
______________, 19___.
By:
----------------------------------
AK STEEL CORPORATION
By:
--------------------------------
14