EXHIBIT 10.4
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT between FabriSteel Holdings Inc., a Delaware
corporation (the "Corporation") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "Executive") dated as
of October 1, 2000 (the "Agreement").
Whereas, the Corporation wishes to employ the Executive as President and
Chief Executive Officer of the Corporation on the terms set fort herein and the
Executive wishes to be employed by the Corporation on such terms;
IT IS, THEREFORE AGREED:
Article 1 Employment
1.1 Employment Period. The Corporation hereby agrees to employ the Executive,
and the Executive hereby agrees to be employed by the Corporation, for the
period commencing as of the date hereof and ending at midnight on September
30, 2003 as its President and Chief Executive Officer unless sooner
terminated as hereinafter provided (the "Employment Period") and upon such
terms and conditions herein provided; provided, that the Employment Period
shall be extended upon the same terms and conditions contained herein for
an additional two (2) year period if a written notice of extension is given
by the Corporation at least ninety (90) calendar days prior to September
30, 2003.
Article 2 Duties
2.1 Duties and Responsibilities. During the Employment Period, the Executive
agrees to devote his attention full time during normal business hours to
the business and affairs of the Corporation and to use his best efforts to
perform faithfully and efficiently such responsibilities, except for
illness, permitted vacation periods and the expenditure of time relating to
those matters specified in Exhibit A hereto, including but not limited to
serving on the board of directors of other corporations set forth on
Exhibit A, so long as such commitments do not materially interfere with the
performance of Executive's duties hereunder and such corporations do not
directly or indirectly compete with the Corporation or its subsidiaries.
The Executive shall, subject to the supervision and control of the Board of
Directors of the Corporation, perform such duties and exercise such
supervision and powers over and with regard to the business of the
Corporation as are contemplated to be performed by the President and Chief
Executive Officer pursuant to the Bylaws of the Corporation, and such
additional duties consistent with his position as may from time to time be
prescribed by the Board of Directors. Subject to the provisions of the
Corporation's Certificate of Incorporation and Bylaws and applicable
law, it is the expectation of the Corporation that the Executive will
continue to serve as a member of the Board of Directors of the Corporation
during the Employment Period.
Article 3 Compensation
3.1 Base Salary. During the Employment Period, the Executive shall receive a
base salary at an annual rate of at least $250,000 payable in accordance
with the Corporation's standard payroll policy, with any increase thereto
to be determined by the Compensation Committee of the Board of Directors
from time to time.
Article 4 Benefit Programs
4.1 Health Plans. The Corporation shall make available to Executive during the
Employment Period such other benefits as other members of senior management
of the Corporation are then generally entitled to receive, which shall, in
any event, include life, long-term disability, health and dental insurance,
and annual physical exams. During the Employment Period, the Corporation
will provide to Executive at the Corporation's cost term life insurance
with a death benefit of at least $500,000, the benefits of which are
payable upon the Executive's death to the Executive's named beneficiaries.
4.2 Moving and Relocation. The Corporation shall provide the moving and
relocation benefits set forth in this Section 4.2 to the Executive. The
benefits are: (i) temporary living expenses as required for six (6) months
from the date hereof; (ii) four (4) visits for spouse to seek housing;
(iii) one month additional pay (net after taxes) for miscellaneous moving
expenses; (iv) moving expenses for normal household goods (boats, RV's or
other extras are not included); (v) reasonable and customary closing cots
for the sale and purchase of a residence, excluding discount points; and
(vi) the taxable amounts of all reimbursements will be grossed-up for
applicable state and federal taxes.
4.3 Dues and Memberships. The Corporation will reimburse the Executive for the
costs of two (2) club memberships: including a business dining club and a
club of the Executive's choice.
4.4 Retirement. The Executive shall be permitted during the period of his
employment hereunder to participate in any qualified or non-qualified
retirement plans and similar benefits that are made available to other
senior executives of the Corporation generally, on the same terms and
conditions as such other executives, in each case to the extent that the
Executive is eligible under the terms of such plans or programs.
4.5 Deferred Compensation. The Executive shall be eligible and permitted,
during the Employment Period, to participate in any deferred compensation
plans and similar benefits that are made available to other senior
executives of this Corporation generally, on the same terms and conditions
as such other executives.
4.6 Vacation. The Executive will be entitled to an initial vacation award of
four (4) weeks of paid vacation during each twelve-month period during the
Employment Period.
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Accrued but unused vacation shall be carried over in accordance with the
Corporation's vacation policy for its senior management.
4.7 Automobile. The Executive will be permitted the use of a Corporation-owned
vehicle or entitled to car allowances and reimbursement of expenses for the
use of a vehicle commensurate with his position.
4.8 Other. Annually, the Executive will be reimbursed up to a total of $2,000
for expenses associated with yearly tax filings. Additionally, the
Executive will be reimbursed up to a total of $3,000 for financial and/or
estate planning services for the three-year period beginning October 1,
2000 and ending September 30, 2003.
Article 5 Securities Purchase
5.1 After the execution of this Agreement, the Corporation and Executive shall
enter into (i) a Stock Purchase Agreement, whereby the Corporation shall
sell to the Executive shares of the Corporation's Class A Common
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Stock, par value $.01 per share (the "Class A Common Stock"), and
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shares of the Corporation's Series [___] Preferred Stock, par value $.01
per share [to be equivalent to 2%], and (ii) a Joinder Agreement, whereby
the Executive shall agree to be a party to, and a Management Investor
under, that certain Securities Purchase and Holders' Agreement dated as of
March , 2000 by and among the Corporation and other parties
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thereto, the form of which documents are attached hereto as Exhibit B and
Exhibit C, respectively.
5.2 After execution of this Agreement, the Corporation shall adopt an
unqualified stock option plan (the "Stock Option Plan"), under which the
Corporation shall grant to the Executive non-transferable, non-qualified
options to purchase shares of the Class A Common Stock of the
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Corporation [to be equivalent to 2%] at an exercise price equal to the fair
market value of a share of Class A Common Stock at the date of grant. The
terms of the Options will be more fully set forth in a Non-qualified Stock
Option Agreement, which will be delivered to the Executive under the terms
of the Stock Option Plan, but will in any event provide that (i) the
options will vest 20 percent per year commencing one year from the date of
grant provided Executive is continuously employed by the Corporation during
such year and (ii) the vesting of the options granted to Executive shall
accelerate upon a Change in Control (as such term is defined in Exhibit C
hereof) of the Corporation.
Article 6 Annual Bonus Awards
6.1 Annual Bonus Awards. For fiscal years ending after September 30, 2000, the
Executive shall be eligible and permitted, during the Employment Period, to
participate in any annual bonus plans and similar benefits that may be
available to other senior executives of the Corporation generally, on the
dame terms and conditions as such other executives. The target bonus award
shall be 100% of base salary.
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Article 7 Termination
7.1 Death or Disability. This Agreement shall terminate automatically upon the
Executive's death. The Corporation may terminate this Agreement during the
Employment Period after having established the Executive's "Disability" as
defined below, by giving the Executive written notice of it's intention to
terminate the Executive's employment. For purposes of this Agreement,
"Disability" means the Executive's inability to substantially perform his
duties and responsibilities to the Corporation by reason of a physical or
mental disability or infirmity for a continuous period of six months. The
date of Disability shall be the day on which the Executive receives notice
of termination from the Corporation pursuant to this Section 7.1.
7.2 Cause. The Corporation shall have the right to terminate the Executive's
employment for "Cause" during the Employment Period. For purposes of this
Agreement, "Cause" shall mean (i) the willful and continued failure by the
Executive to perform substantially his duties to the Corporation or its
subsidiaries (other than any such failure resulting from his Disability)
within a reasonable period of time after a written demand for substantial
performance is delivered to the Executive by the Board of Directors, which
the Board of Directors believes that the Executive has not substantially
performed his duties, (ii) malfeasance, embezzlement or theft from or
adversely affecting the Corporation or any subsidiary or affiliate by the
Executive, (iii) the commission or perpetration by the Executive of any act
of moral turpitude or any felony, or (iv) any material and willful
violation by the Executive of his obligations under Section 2.1 hereof.
7.3 Termination By Executive. The Executive shall have the right to terminate
this Agreement during the Employment Period for "Good Reason," upon thirty
(30) days prior written notice to the Corporation or a successor of the
Corporation. For purposes of this Agreement, "Good Reason" shall mean (i) a
change in the Executive's duties and responsibilities without his consent
such that his duties and responsibilities are materially reduced or altered
in a manner unfavorable to him; or (ii) a decrease in the Executive's
salary or bonus award potential; or (iii) a material decrease in his
benefits in the aggregate; or (iv) a change in the location at which the
Executive's duties are principally carried out of more than seventy-five
(75) miles from the current location of the Corporation's principal
executive offices.
Article 8 Effect of Termination
8.1 Death or Disability. Upon termination of the Executive's employment during
the Employment Period, because of Disability as provided in Section 7.1,
the Corporation shall continue to pay the Executive as severance, (i) the
amount, payable in accordance with the Corporation's standard payroll
policy, of the Executive's annual base salary as provided in Section 3.1 at
the rate in effect immediately prior to termination of his employment for a
period of twelve (12) months, plus an amount payable in twelve (12) monthly
installments equal to the average of the previous two (2) years of bonus
plan payouts for the Executive, less the amount of any disability payments
made by the Corporation or any Corporation plan, and (ii) will afford to
the Executive at the
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Corporation's expense, health insurance benefits (including medical and
dental) and life insurance equivalent to the benefits enjoyed by the
Executive at the date of termination (the "Insurance Benefits") for a
period of twelve (12) months from the date of such termination. Upon
termination of the Executive's employment during the Employment Period
because of death, the Corporation will afford to the Executive's spouse at
the Corporation's expense, health insurance benefits (including medical and
dental) equivalent to the benefits enjoyed by the Executive at the date of
his death for a period of eighteen (18) months from the date of his death.
8.1.1 Other Termination. If the executive's employment is terminated (i) by the
Corporation during the Employment Period (other than due to death,
Disability or for Cause), (ii) by virtue of a termination by the Executive
pursuant to Section 7.3, or (iii) the Corporation has not extended the
Executive's employment at the expiration of this Agreement as contemplated
by the proviso in Section 1.1, the Corporation shall pay to the Executive
as severance, the amount, payable in accordance with the Corporation's
standard payroll policy, of Executive's annual base salary then in effect
pursuant to Section 3.1, plus an amount payable in twelve (12) monthly
installments equal to the average of the previous two (2) years of bonus
plan payouts for the Executive and shall continue to maintain the Insurance
Benefits for a period of twelve (12) months from the date of such
termination or expiration.
8.2 Vested Benefits. Nothing herein shall be deemed to restrict or reduce the
Executive's vested benefits under any of the Corporation's benefit plans as
determined in accordance with the provisions of such benefits.
8.3 Miscellaneous. No continued salary or severance shall be paid if the
Executive's employment terminates for any reason (including for Cause)
during the Employment Period other than as set forth above in this Article
8 (including but not limited to for Cause or resignation other than for
Good Reason), and in such case the Executive's entitlement to Insurance
Benefits, if any, shall be determined exclusively by the Corporation's
policies in effect at the time of the termination. Upon the termination of
employment with the Corporation for any reason, the Executive shall offer
to resign his position as a director of the Corporation and its affiliates,
effective as the date of such termination.
Article 9 Confidential Information-Non-Competition
9.1 Confidential Information. For such time as the Executive is employed by the
Corporation and following his termination for whatever reason, the
Executive shall hold in a fiduciary capacity for the benefit of the
Corporation all secret or confidential formation, knowledge or data
relating to the Corporation or its affiliates, and their limitation,
customer lists, bid, proposals, contracts, matters subject to litigation,
technology or financial information of the Corporation or its subsidiaries
and other know-how (the "Confidential Information"). The Executive shall
not, without the prior written consent of the Corporation, communicate or
divulge any Confidential Information to anyone other than the Corporation
and those designated by it in writing. Confidential Information shall not
be deemed known to the public if such information is made public
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by the Executive or his representatives. Following termination of
employment for any reason whatsoever, the Executive shall promptly return
all written Confidential Information in his possession.
9.2 Non-Competition. For a two (2) year period commencing on the date of
termination of employment (the "Noncompete Period"), the Executive will
not, directly or indirectly:
9.2.1 own, manage, operate, control or participate in the ownership, management
or control of, or be connected as an officer, employee, partner, director,
or consultant or otherwise, with, or have any financial interest in (except
for (i) ownership as of the date hereof, (ii) any ownership in the common
stock of the Corporation, or (iii) any ownership of less than 5% of the
outstanding equity interest in a publicly-traded entity) an enterprise
(other than the Corporation or successor corporation) conducting business
in activities similar to the Corporation, in each case, in any market in
which the Corporation or its affiliates conducts or solicits business;
9.2.2 solicit or contact any employee, or any person who within one (1) year of
such solicitation or contact has been an employee, of the Corporation or
its affiliates with a view to inducing or encouraging such employee to
leave the employ of the Corporation or its affiliates or be employed by the
Executive, an employer affiliated with the Executive, or any competitor of
the Corporation or any affiliate thereof; or
9.2.3 engage or participate in any effort or act to induce any customers,
suppliers, associates, or independent contractors of the Corporation or its
affiliates to take an action which might be disadvantageous to the
Corporation or its affiliates or to the business or line of business in
which any of them is engaged, including but not limited to, the
solicitation of customers, suppliers, associates, or independent
contractors of the Corporation or its affiliates to cease doing business or
their association or engagement, with the Corporation or its affiliates.
9.3 Damages & Injunctive Relief. In the event that any provision of this
Article 9 shall be determined by any court of competent jurisdiction to be
unenforceable by reason of its extending for too long a period of time or
over too large a geographical area or by reason of its being too extensive
in any other respect, it shall be interpreted to extend only over the
longest period of time for which it may be enforceable, and/or over the
largest geographical area as to which it may be enforceable and/or to the
maximum extent in all other aspects as to which it may be enforceable, all
as determined by such court in such action. The Executive acknowledges that
the provisions of this Article 9 are reasonable and necessary for the
protection of the Corporation and that the Corporation will be irrevocably
damaged if such provisions are not specifically enforced. Accordingly, the
Executive agrees that, in addition to any other relief to which the
Corporation may be entitled, the Corporation shall be entitled to seek and
obtain injunctive relief from a court of competent jurisdiction (without
the posting of a bond or other security therefore) for the purposes of
restraining the Executive from any actual or threatened breach of such
provisions. The Executive agrees that the Noncompete Period shall be tolled
during any period of violation of Section 9.2 of this Agreement and during
any period required for litigation during which the Corporation or its
affiliates seek to enforce this Agreement
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against the Executive. The Executive further agrees that if he violates any
of the covenants or agreements contained in Section 9.2, in addition to
injunctive relief, the Corporation and/or its affiliates or their
respective successors shall be entitled to such amounts as are recoverable
under applicable law.
Article 10 Successors and Assigns
10.1 Assignment. This Agreement is personal to the Executive and without the
prior written consent of the Corporation shall not be assigned by the
Executive other than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
10.2 Corporation. This Agreement shall insure to the benefit of and be binding
upon the Corporation and its successors.
Article 11 Governing Law
11.1 Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of Michigan without reference to principles of
conflict of laws.
Article 12 Notices
12.1 Notices. All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
If to the Corporation:
FabriSteel Holdings, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Chairman
cc: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Dechert
4000 ▇▇▇▇ Atlantic Tower
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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Or, to such other address as either party shall have furnished to the other
in writing in accordance herewith. Notices and communications shall be
effective when actually received by the addressee.
Article 13 Miscellaneous
13.1 Withholding. The Corporation may withhold from any amounts payable under
this Agreement such federal, state or local taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
13.2 No Waiver. The Corporation's failure to insist upon strict compliance with
any provision hereon shall not be deemed to be a waiver of such provision
or any other provision hereof. The Executive's failure to insist upon
strict compliance with any provision hereof shall not be deemed to be a
waiver of such provision hereof.
13.3 Entire Agreement. This Agreement embodies the entire agreement between the
parties with respect to the Executive's employment, and may not be changed
or terminated orally.
13.4 Counterparts. This Agreement may be executed in two counterparts, and both
such counterparts hereof shall be deemed to be an original instrument, and
both such counterparts together shall constitute but one agreement.
IN WITNESS THEREOF, the Executive has hereunto set his hand and pursuant to the
authorization from its Board of Directors the Corporation has caused these
presents to be executed in its name and on its behalf, all as of the day and
year first above written.
FabriSteel Holdings, Inc. Executive
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Chairman of the Board
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EXHIBIT A
EXPENDITURES OF TIME
1. Board of Director membership with ▇▇▇▇▇▇ and ▇▇▇▇▇ Corporation, Memphis,
Tennessee.
2. Board of Director membership with The Carbide/Grafite Group, Pittsburgh,
Pennsylvania.
3. Board of Director membership with National-Standard Company, Niles, MI.
EXHIBIT B
FORM OF STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of October
, 2000, is made by and between FabriSteel Holdings, Inc., a Delaware
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corporation (the "Corporation") and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (the "Executive").
Terms
SECTION 1. Sale of Stock. In consideration of the mutual benefits
contained in this Agreement and intending to be legally bound, the Corporation
hereby agrees to sell and assign to Executive, and Executive agrees to purchase,
all of the Stock (as defined below), free and clear of all liens, security
interests, and other encumbrances, other than pursuant to the Securities
Purchase and Holders Agreement (as defined below).
SECTION 2. Payments; Other Actions.
(a) Subject to the terms and conditions of this Agreement, the
Corporation will issue and sell to Executive shares of Class A Common
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Stock, par value $.01 per share, at a purchase price of $ per share and
---
shares of % Series Cumulative Preferred Stock, par
---------- ---- ---------
value $.01 per share, at a purchase price of $ per share (collectively,
------
the "Stock").
(b) The closing of the transaction contemplated by Section 1
hereof shall take place on the date of this Agreement. Upon execution hereof,
the Corporation shall deliver or cause to be delivered to Executive certificates
evidencing the number of shares of Stock to be purchased by Executive hereunder,
against payment of the purchase price therefor in cash, by certified or bank
cashier's check or by federal wire transfer of immediately available funds, with
confirmed receipt.
SECTION 3. Representations and Warranties.
(a) Executive represents and warrants to the Corporation as
follows:
(i) Executive, in his individual capacity, has full legal
right, power, and authority to enter into this Agreement and to perform his
obligations hereunder without the need for the consent of any other person.
(ii) This Agreement constitutes the legal, valid, and
binding obligation of Executive, enforceable against Executive in accordance
with its terms.
(b) The Corporation represents and warrants to Executive as
follows:
(i) The Corporation is a corporation validly existing and in
good standing under the laws of the State of Delaware.
(ii) The Corporation has full corporate power and corporate
authority to make, execute, deliver and perform this Agreement and to carry out
all of the transactions provided for herein.
(iii) The Corporation has taken such corporate action as is
necessary or appropriate to enable it to perform its obligations hereunder,
including, but not limited to, the issuance and sale of the Stock to be issued
by it, and this Agreement constitutes the legal, valid and binding obligation of
the Corporation, enforceable against the Corporation in accordance with the
terms hereof.
(iv) The Stock when issued in compliance with the provisions
of this Agreement will be validly issued, fully paid and non-assessable.
(v) As of the date hereof, the authorized capital stock of
the Corporation consists of (i) 2,500,000 shares of Class A Common Stock, par
value $.01 per share, of which are issued and outstanding, (ii)
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2,500,000 shares of Class B Common Stock, par value $.01 per share, of which
shares are issued and outstanding and (iii) 5,000,000 shares of
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preferred stock, par value $.01 per share, of which shares of
-----------
preferred stock are issued and outstanding. As of the date hereof, except as
previously disclosed to Executive, there are no rights, subscriptions, warrants,
options, conversion rights, or agreements of any kind outstanding to purchase
from the Corporation, or otherwise require the Corporation to issue, any shares
of capital stock of the Corporation or securities or obligations of any kind
convertible into or exchangeable for any shares of capital stock of the
Corporation.
SECTION 6. Non-Assignment. The rights and obligations of the
Corporation under this Agreement shall inure to the benefit of and shall be
binding upon its successors and assigns. Executive's rights under this Agreement
shall not, in any voluntary or involuntary manner, be assignable and may not be
pledged or hypothecated.
SECTION 7. Governing Law. The implementation and interpretation of
this Agreement shall be governed by and enforced in accordance with the laws of
the State of Delaware without giving effect to the conflicts of law provisions
thereof.
SECTION 8. Entire Agreement; Amendments. This instrument constitutes
the entire agreement with respect to the subject matter hereof between the
parties hereto and replaces and supersedes as of the date hereof any and all
prior oral or written agreements, understandings and communications between the
parties hereto. This Agreement may only be amended or modified by an agreement
in writing executed by Executive and the Corporation.
SECTION 9. Counterparts; Section Headings. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, but all of which
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together shall constitute one and the same instrument. The section headings of
this Agreement are for convenience of reference only.
SECTION 10. Other Arrangements. Nothing in this Agreement shall in any
way adversely affect the Corporation's rights under the Securities Purchase and
Holders Agreement, dated as of March , 2000 (the "Securities Purchase and
--
Holders Agreement"), among, inter alia, the Corporation, Citicorp Venture
Capital, Ltd., a New York corporation, the Continuing Investors (as defined
therein) and the other signatories thereto, as amended.
SECTION 11. No Effect on Employment. Nothing in this Agreement shall
confer on Executive the right to remain in the employ of the Corporation or any
of its subsidiaries or Affiliates.
IN WITNESS THEREOF, the Executive has hereunto set his hand and
pursuant to the authorization from its Board of Directors, the Corporation has
caused these presents to be executed in its name and on its behalf, all as of
the day and year first above written.
FabriSteel Holdings, Inc. Executive
By:
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its: Chairman of the Board
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EXHIBIT C
FORM OF JOINDER
FabriSteel Holdings, Inc.
Joinder
To Securities Purchase and Holders Agreement
FabriSteel Holdings, Inc.
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Gentlemen and Ladies:
In connection with my receipt from FabriSteel Holdings, Inc. (the "Company") of
shares of Class A Common Stock, par value $.01 per share, of the Company
-----
represented by Certificate No. and shares of % Series
----- --------- ---- ----
Cumulative Preferred Stock, par value $.01 per share and stated value $ per
-----
share, of the Company represented by Certificate No. (collectively, the
----
"Securities"), I hereby represent and warrant to, and agree and covenant with,
you as follows:
1. By this instrument I shall be bound by the terms and conditions of the
Securities Purchase and Holders Agreement, dated as of March , 2000 (the
--
"Agreement"), among, inter alia, the Company, Citicorp Venture Capital, Ltd., a
New York corporation ("CVC"), the Continuing Investors (as defined therein) and
the other signatories thereto and agree to be a "Management Investor" as such
term is defined therein, and to be subject to the rights, duties and obligations
of a Management Investor pursuant to the terms of such Agreement; provided, that
as such Agreement applies to me, (a) the term "the fifth anniversary of the
Recapitalization Date" in Sections 6.2, 6.3(a), 6.3(b), 6.4 and 6.5 of the
Agreement shall be replaced with the date "October 1, 2005"; (b) the vesting
period in section 6.3(a)(ii) of the Agreement will commence on the first
anniversary of October 1, 2000 (instead of the first anniversary of the
Recapitalization Date); (c) the term "the Recapitalization Date" in the
definition of "Repurchase Price Percentage" in section 6.3(a)(iv) of the
Agreement shall be replaced with the date "October 1, 2000" and (d) the vesting
provisions in Section 6.3(a) of the Agreement will accelerate upon a Change in
Control.
For purposes hereof:
"Change in Control" means (i) the first day on which a majority of the members
of the Board of Directors of the Company are not Continuing Directors, (ii) the
sale, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the assets of the
Company and its subsidiaries taken as a whole to any person (as that term is
used in section 13(d) (3) of the Securities Exchange Act of 1934, as amended),
other than the Company, any subsidiary of the Company, any Principal or any
Related Party or (iii) the consummation of any transaction (including, without
limitation, any merger or consolidation) the result of which is that any person
(as defined above), other than the Company, any subsidiary of the Company, any
Principal or any Related Party, becomes the beneficial owner (as that term is
used in the Securities Exchange Act of 1934, as amended), directly or
indirectly, of more than 50% of the combined voting power of the voting
securities of the Company.
"Continuing Directors" means, as of any date of determination, any member of the
Board of Directors of the Company who: (i) was a member of such Board of
Directors on the date hereof; or (ii) was nominated for election or was elected
to such Board of Directors with the approval of a majority of the Continuing
Directors who were members of such Board at the time of such nomination or
election or (iii) was designated by a Principal or a Related Party.
"Principal" means Citigroup, Citicorp Venture Capital Limited and 399 Venture
Partners, Inc., and any successor to any of the foregoing.
"Related Party" means (i) any direct or indirect subsidiary of a Principal, (ii)
any officer, director, or employee of a Principal or a person specified in
clause (i) hereof, (iii) any spouse or lineal descendant (including by adoption
and stepchildren) of a person specified in clause (ii) hereof, (iv) any trust,
corporation, partnership, limited liability company or other entity of which at
least 50% of the beneficiaries, stockholders, partners or owners of which
consist of one or more of the persons described in clause (ii) or (iii) hereof,
and (v) any charitable trust the grantor of which consists of one or more of the
persons described in clause (ii) or (iii) hereof.
2. I have read and understand each of the provisions of the Agreement.
3. I have full legal right, power and authority (including the due
authorization by all necessary corporate action) to enter into this Joinder and
to perform my obligations hereunder without the need for the consent of any
other person.
4. This Joinder has been duly authorized, executed and delivered and
constitutes my valid and binding obligation enforceable against me in accordance
with the terms hereof.
5. The Securities are being acquired by me solely for my own account for
investment and not with a view to any further distribution thereof that would
violate the Securities Act of 1933, as amended (the "Securities Act") or the
applicable securities laws of any state. I will not distribute the Securities in
violation of the Securities Act or the applicable securities laws of any state.
6. I understand that the Securities have not been registered under the
Securities Act or registered for resale under the securities laws of any state
and must be held indefinitely unless
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subsequently registered under the Securities Act and any applicable state
securities laws or unless an exemption from such registration is or becomes
available.
7. I am financially able to hold the Securities for long-term investment, I
believe that the nature and amount of the Securities being purchased are
consistent with my overall investment program and financial position, and I
recognize that there are substantial risks involved in the purchase of the
Securities.
8. I confirm that (i) I am familiar with the business of the Company and
its subsidiaries, (ii) I have had the opportunity to ask questions of the
officers and directors of the Company and its subsidiaries and to obtain (and
that I have received to my satisfaction) such information about the business and
financial condition of the Company and its subsidiaries as I have reasonably
requested, and (iii) I, either alone or with my representative (as defined in
Rule 501(h) promulgated under the Securities Act), if any, have such knowledge
and experience in financial and business matters that I am capable of evaluating
the merits and risks of the prospective investment in the Securities.
9. I reside at the address set forth below the signature line to this
letter.
10. I agree that the certificates representing the Securities shall bear
the following legend or a similar legend:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE TRANSFERRED WITHOUT REGISTRATION UNDER THE
SECURITIES ACT OR STATE SECURITIES LAWS OR AN OPINION OF COUNSEL,
SATISFACTORY TO THE COMPANY, THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ALSO SUBJECT TO THE
TERMS AND CONDITIONS OF A SECURITIES PURCHASE AND HOLDERS AGREEMENT BY
AND AMONG THE COMPANY AND THE HOLDERS SPECIFIED THEREIN, A COPY OF
WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. THE
SALE, TRANSFER OR OTHER DISPOSITION OF THE SECURITIES IS SUBJECT TO
THE TERMS OF SUCH AGREEMENT AND THE SECURITIES ARE TRANSFERABLE ONLY
UPON PROOF OF COMPLIANCE THEREWITH.
11. I agree that a notation will be made in the appropriate transfer
records of the Company with respect to the restrictions on transfer of the
Securities required under or pursuant to the Agreement.
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12. I have executed this Joinder and declare that the information contained
herein is current, complete and accurate and may be relied upon by the Company.
Very truly yours,
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Dated: October , 2000 Address:
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SSN:
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