CONFIDENTIAL SEVERANCE AGREEMENT
THIS AGREEMENT (this "Agreement") is entered into as of
February 12, 1999 by and between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") and ENVIROSOURCE,
INC., a Delaware corporation (the "Corporation").
R E C I T A L S:
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▇. ▇▇▇▇▇▇▇ has tendered his resignation as an employee and
officer of the Corporation and each of its subsidiary and affiliated companies,
effective February 12, 1999.
B. The Corporation desires to enter into this Agreement with
▇▇▇▇▇▇▇ to obtain certain benefits as more fully set forth herein.
A G R E E M E N T:
- - - - - - - - -
NOW, THEREFORE, in consideration of the foregoing recitals and
the covenants contained herein, the parties agree as follows:
1. Consulting Relationship. The Corporation agrees to continue
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to utilize the services of ▇▇▇▇▇▇▇, and ▇▇▇▇▇▇▇ agrees to continue to serve the
Corporation as a consultant for nine months commencing on March 1, 1999 (the
"Consulting Term") on an as-needed, non-exclusive basis on the terms set forth
in this Agreement. In particular, to fulfill his obligations as a consultant,
▇▇▇▇▇▇▇ shall be available, when requested, at reasonable times and places, upon
reasonable notice, but in any event no more than five days per month. The
Corporation and ▇▇▇▇▇▇▇ agree to cooperate in good faith in the scheduling of
▇▇▇▇▇▇▇'▇ duties so that such duties will not interfere with any full time
employment accepted by ▇▇▇▇▇▇▇ in compliance with Section 6(a).
2. Compensation and Benefits.
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(a) In return for ▇▇▇▇▇▇▇=s execution of this
Agreement and the Waiver and Release attached hereto as Exhibit "A" (the
"Release"), ▇▇▇▇▇▇▇ shall receive compensation at the rate of $15,250.00 per
month during the Consulting Term for consulting services, which shall be paid
monthly. The Corporation shall deduct from the compensation paid to ▇▇▇▇▇▇▇
under this Section 2(a) any appropriate deductions contemplated by this
Agreement.
(b) If ▇▇▇▇▇▇▇ accepts full time employment with a
new employer prior to the end of the Consulting Term, and the Corporation
asserts that by accepting such new employment ▇▇▇▇▇▇▇ would violate Section 6(a)
below, the remaining payments due hereunder shall be suspended pending
determination of the Corporation's assertion. In the event ▇▇▇▇▇▇▇ advises the
Corporation in writing that he disputes the Corporation's assertion, the
Corporation and ▇▇▇▇▇▇▇ shall as promptly as practicable submit the dispute to
expedited arbitration in the manner provided in Section 8.1. If the
Corporation's position is sustained in the arbitration, the provisions of
Section 8.2 shall apply. If the arbitration is determined in ▇▇▇▇▇▇▇'▇ favor,
the suspended payments shall be paid to ▇▇▇▇▇▇▇ promptly and any remaining
payments due to ▇▇▇▇▇▇▇ under this Agreement shall be paid as set forth in
Section 2(a).
(c) In the event ▇▇▇▇▇▇▇ dies or becomes disabled
during the Consulting Term, the Corporation shall nevertheless pay the full
amount of the payments specified in Section 2(a) to ▇▇▇▇▇▇▇ or his estate or
legal representatives in accordance with the terms of Section 2(a). For purposes
of this Section 2(c), ▇▇▇▇▇▇▇ shall be deemed disabled if, according to the
determination of a physician approved by the Corporation in its reasonable
discretion, he is unable to engage in any substantial gainful employment
substantially comparable to that in which he was engaged as an employee of the
Corporation, by reason of any medically determinable physical or mental
impairment which can be expected to result in death or which has lasted or can
be expected to last for a continuous period of not less than six months.
(d) ▇▇▇▇▇▇▇ shall not incur any reimbursable
expenses in rendering his services hereunder unless such expenses have received
the prior approval of the CEO. The Corporation shall from time to time promptly
reimburse ▇▇▇▇▇▇▇, upon receipt of proper documentation, for all reasonable
out-of-pocket pre-approved expenses that are incurred by ▇▇▇▇▇▇▇ during the
Consulting Term.
(e) ▇▇▇▇▇▇▇ shall not be entitled to receive any
compensation or benefits from the Corporation for his services during the
Consulting Term except as expressly set forth herein.
3. Other Agreements. The Corporation and ▇▇▇▇▇▇▇ further
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agree as follows:
(a) Effective as of the date hereof, during the
Consulting Term and only until the acceptance by ▇▇▇▇▇▇▇ of full time
employment, the Corporation will continue to pay for ▇▇▇▇▇▇▇'▇ current group
medical and dental benefits. The employee contribution, if applicable, toward
the cost of the coverage will continue to be deducted from ▇▇▇▇▇▇▇'▇
compensation during this period. ▇▇▇▇▇▇▇ will be entitled to convert his group
health insurance coverage under the provisions of COBRA, if he so desires, for
the statutory period provided under COBRA. A COBRA letter and the appropriate
forms will be sent to ▇▇▇▇▇▇▇ from The ▇▇▇▇▇▇ Company.
(b) The Corporation will pay ▇▇▇▇▇▇▇ for all accrued
salary and unused accrued vacation pay through the date hereof, such payment to
be made promptly after the effective date of this Agreement.
(c) The parties agree that, as of the date hereof, a
certain relocation loan made by the Corporation to ▇▇▇▇▇▇▇ in September 1997,
the outstanding principal amount of which is currently $43,325, is hereby
forgiven. Further, in connection with this forgiveness, the Corporation agrees
to deposit an aggregate of $34,018 into ▇▇▇▇▇▇▇'▇ income tax and FICA
withholding accounts.
(d) The Corporation will provide, at no expense to
▇▇▇▇▇▇▇, EXALT program outplacement services through Manchester Partners
International in accordance with the program description that has been delivered
to ▇▇▇▇▇▇▇.
4. Return of Property. ▇▇▇▇▇▇▇ represents that he has
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delivered to the Corporation all property of the Corporation, or any subsidiary
or affiliate thereof, and all documents and materials (and copies thereof), of
whatever nature in his possession, relating to the Corporation or any subsidiary
or affiliate thereof, or any of their products and/or services, including
(without limitation) information contained in or on computer files, disks or
other data storage mediums.
5. Relationship of the Parties; Certain Information and
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Statements. ▇▇▇▇▇▇▇ shall have no power hereunder to act in the name of, or on
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behalf of, the Corporation or in any way to bind the Corporation in any regard,
except as authorized in writing by the CEO of the Corporation. ▇▇▇▇▇▇▇ agrees
not to divulge to anyone any negative, untrue or defamatory information, whether
or not proprietary or confidential, concerning Envirosource. The Corporation
shall not make any statement which disparages the personal or business
reputation of ▇▇▇▇▇▇▇.
6. Noncompetition and Related Covenants.
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(a) ▇▇▇▇▇▇▇ agrees that during the Consulting Term
(the "Applicable Period"), he will not directly or indirectly: (a) own or
control any debt, equity or other interest in (except as a passive investor of
less than 1% of the capital stock or publicly traded notes or debentures of a
publicly held company), or (b) (1) act as a director, officer, manager,
employee, participant or consultant to or accept or solicit any office to act as
any of the foregoing or (2) be obligated to or connected in any advisory,
business or ownership capacity, in each case with respect to any business that
is engaged in K061 processing, slag processing, scrap yard management, slab
hauling or other related steel mill services currently engaged in by the
Corporation or any of its subsidiaries (collectively "Envirosource").
(b) During the Applicable Period, ▇▇▇▇▇▇▇ will not,
directly or indirectly, and shall not cause or assist any other person or entity
to solicit any person who was employed by the Corporation or any of its
subsidiaries (collectively, "Envirosource") on the date hereof for any purpose,
including to hire or employ such person, whether on ▇▇▇▇▇▇▇'▇ own behalf or on
behalf of a supplier, competitor or customer of Envirosource. As used herein the
word "indirectly" includes but is not limited to, attempting to induce any
employee of Envirosource to leave Envirosource for any purpose.
(c) ▇▇▇▇▇▇▇ shall cooperate in good faith with the
Corporation and the Corporation's counsel in connection with any pending
administrative proceeding, arbitration, mediation or litigation or subsequent
administrative proceeding, arbitration, mediation or litigation relating to the
time of his employment with the Corporation, including but not limited to
providing information and /or documents, participating in informal interviews(s)
and appearing for depositions(s) and/or testimony if deemed necessary by the
Corporation. Notwithstanding the foregoing, nothing in this paragraph shall
obligate ▇▇▇▇▇▇▇ to expend any sum or incur any liability in connection with
such cooperation. In the event such cooperation requires a commitment of time
beyond the limits set forth in Section 1 above, the parties shall mutually agree
on compensation to be provided ▇▇▇▇▇▇▇ for such services.
7. Confidential Information. ▇▇▇▇▇▇▇ shall not in any manner
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use (other than in the performance of services under this Agreement) or disclose
any material trade secret information with respect to customers, suppliers or
products, prices, call lists or other confidential plans, processes, procedures,
business concepts, forecasts, drawings, ideas, discoveries, material or
information concerning the operations, business or financial affairs of the
Corporation, or any subsidiary or affiliate thereof, gained during or as a
result of his employment by the Corporation. ▇▇▇▇▇▇▇ agrees that he shall not in
any manner use (other than in the performance of services under this Agreement)
or disclose any confidential third party information gained during or as a
result of his employment by the Corporation. The parties agree that the terms
and conditions of this Agreement, except with respect to Section 6(a) and 8.1,
shall remain confidential and shall not be disclosed to any other person (other
than ▇▇▇▇▇▇▇'▇ family members, attorneys, and accountants who shall be informed
of and bound by the confidentiality provisions of this Agreement) other than as
required by court order, legal process or applicable law or as otherwise agreed
to by ▇▇▇▇▇▇▇ and the Corporation. Any disclosures permitted hereunder shall not
be made in a manner derogatory to any other party hereto. The provisions of this
Section 7 shall not apply to any information which becomes generally available
to the public, other than as a result of any disclosure, direct or indirect, by
▇▇▇▇▇▇▇.
8. Miscellaneous.
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8.1 Arbitration; Injunctive Relief; Attorneys Fees.
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All controversies, claims, disputes, and matters in question arising out of, or
relating to, this Agreement or the breach thereof, shall be decided by
arbitration in accordance with the provisions of this paragraph. The arbitration
proceedings shall be conducted under the applicable rules of the American
Arbitration Association or its successor in effect at the time a demand for
arbitration under the rules is made. The arbitration board will consist of a
single arbitrator. The decision of the arbitrator, including determination of
amount of any damages suffered, shall be conclusive, final, and binding the
parties hereto, and their respective heirs, legal representatives, successors,
and assigns. The fees and costs associated with the arbitration proceeding shall
be shared equally by the parties. Such fees and costs shall not include the fees
and costs of the parties' respective attorneys and witnesses, which shall be
borne by the party incurring such fees and costs. Notwithstanding the foregoing,
and in addition to the remedy of arbitration, the parties agree that a violation
of the provisions of Section 6 and/or 7 cannot be reasonably or adequately
compensated in damages and, in addition to any other relief to which the
Corporation may be entitled by reason of such violation, the Corporation shall
also be entitled to seek permanent and temporary injunctive and equitable relief
in a court of competent jurisdiction.
8.2 Certain Breaches of Agreement. In the event
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▇▇▇▇▇▇▇ breaches Sections 6 and/or 7 hereof, the Corporation shall have no
further obligations under Section 2 of this Agreement. This Agreement shall be
null and void if ▇▇▇▇▇▇▇ cancels the Release.
8.3 Notices. Except as otherwise provided herein,
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any notice or demand which, by the provisions hereof, is required or which may
be given to or served upon the parties hereto shall be in writing and, if by
telegram, facsimile or telex, shall be deemed to have been validly served, given
or delivered when sent, if by personal delivery, shall be deemed to have been
validly served, given or delivered upon actual delivery and, if mailed, shall be
deemed to have been validly served, given or delivered three business days after
deposit in the United States mails, as registered or certified mail, with proper
postage prepaid and addressed to the party or parties to be notified, at the
following addresses (or such other address(es) as a party may designate for
itself by like notice):
If to the Corporation: Envirosource, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Executive Officer
If to ▇▇▇▇▇▇▇: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
8.4 Successors and Assigns. The parties hereto
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acknowledge that the Corporation shall have the right to assign, with absolute
discretion, any or all of its rights and obligations under this Agreement to any
of its affiliates, successors and assigns, and this Agreement shall inure to the
benefit of, and be binding upon, such respective affiliates, successors and
assigns of the Corporation, in the same manner and to the same extent as if such
affiliates, successors and assigns were original parties hereto. In the event of
a failure to perform by an assignee, the Corporation shall remain liable
hereunder. The Corporation will require any successor (whether direct or
indirect, by purchase, merger consolidation or otherwise) to all or
substantially all of the business and assets of the Corporation, expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform it whether or not such
succession had taken place. In the event of an assignment, the non-solicitation
provision of Section 6(b) shall be deemed to apply only with respect to
employees of Envirosource and its subsidiaries and the non-disparagement and
confidentiality provisions of Sections 5 and 7, respectively, shall be deemed to
apply only with respect to Envirosource and its subsidiaries. This Agreement
shall be deemed to be personal to ▇▇▇▇▇▇▇ and shall not be assignable by
▇▇▇▇▇▇▇.
8.5 Governing Law. This Agreement shall be governed
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by, and construed and interpreted in accordance with, the laws of the
Commonwealth of Pennsylvania (without regard to choice of law principles). The
arbitrator or parties agree that all actions and proceedings arising directly or
indirectly hereunder shall be litigated or otherwise resolved in the
Commonwealth of Pennsylvania and hereby waive any objection based on forum non
conveniens and any objection to venue of any action instituted hereunder.
8.6 Amendment; Waiver. This Agreement may be amended
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only by an instrument in writing executed by the parties hereto. No waiver,
expressed or implied, of any breach of any covenant, agreement or duty shall be
held or construed as a waiver of any other breach of the same or any other
covenant, agreement or duty.
8.7 Entire Agreement. This Agreement and the Release
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constitute the entire agreements of the parties hereto and fully supersede and
replace any and all prior agreements and understandings, whether oral or
written, express or implied, between the parties pertaining to the subject
matter of this Agreement and the Release.
8.8 Severability. Should any provision of this
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Agreement be declared or be determined by any arbitrator or court to be illegal
or invalid, the validity of the remaining parts, terms or provisions shall not
be affected thereby and the illegal or invalid part, term or provisions shall be
deemed not to be part of this Agreement. The parties intend this Agreement to be
enforced as written. However, if any provision, or any part thereof, is held to
be unenforceable because of the scope or duration of such provision, ▇▇▇▇▇▇▇ and
the Corporation agree that the arbitrator or court making such determination
shall have the power to reduce the scope, duration and/or area of such
provisions in order to make such provision enforceable to the fullest extent
permitted by law, and/or to delete specific words and phrases
("blue-penciling"), and in its reduced or blue-penciled form such provision
shall then be enforceable and shall be enforced.
8.9 Captions. The captions of the several sections
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and paragraphs of this Agreement are used for convenience only and shall not be
considered or referred to in resolving questions of interpretation with respect
to this Agreement.
8.10 Counterparts. This Agreement may be executed in
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counterparts, each of which will be deemed an original, and both of which
together shall constitute one and the same Agreement.
8.11 Negotiation. ▇▇▇▇▇▇▇ acknowledges that he has
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had an opportunity to negotiate with regard to the terms of this Agreement and
to receive advice of counsel with regard to it and has carefully read and
considered this Agreement and fully understands the extent and impact of its
provisions, and has executed this Agreement voluntarily and without coercion,
undue influence, threats, or intimidation of any kind or type whatsoever.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
The Corporation:
ENVIROSOURCE, INC.
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: Vice President, General Counsel and Secretary
▇▇▇▇▇▇▇:
/s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
EXHIBIT "A"
WAIVER AND RELEASE AGREEMENT
This Release is given
By the Releasor(s): ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
hereinafter referred to as "I",
To the Releasee(s): ENVIROSOURCE, INC. and its parent, divisions, subsidiary and
affiliated corporations (including predecessors and
successors) and their Officers, Directors, Employees and
Representatives
sometimes hereinafter referred to as "You."
1. Release. I hereby release and give up any and all actions, causes of actions,
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claims and rights (hereinafter "Claims") which I may have against You. This
releases all claims, including those of which I am not aware and those not
mentioned herein. This Waiver and Release Agreement ("Release") applies to
Claims resulting from anything that has happened up to now. I specifically
release any and all Claims relating in any way to my employment relationship, or
resignation from employment effective February 12, 1999, with You, including but
not limited to any Claims arising under the Age Discrimination in Employment
Act, the Older Workers Benefit Protection Act of 1990, Title VII of the Civil
Rights Act of 1964, the Equal Pay Act, the Employee Retirement Income Security
Act, the Fair Labor Standards Act, the Consolidated Omnibus Budget
Reconciliation Act of 1986, the Pennsylvania Human Relations Act, or any other
federal, state or local laws or ordinances and any common law claims under tort,
contract, or any other theories now or hereafter recognized. This Release
specifically includes, but without limitation, all Claims arising out of my
employment relationship with You.
2. Waiver. I hereby acknowledge and assume all risks or chances that the
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injuries claimed to have resulted from the above stated matter may become
greater or more extensive than now known, anticipated or expected. I understand
that this instrument shall be effective as a full and final release of all
Claims. In connection with the above waiver, I am aware that I may hereafter
discover Claims or facts in addition to or different from those I now know or
believe to exist with respect to the subject matter of this instrument or You.
However, I and my successors and assigns hereby settle and release all of the
Claims which I may have against You.
3. No Admissions. I agree and acknowledge that this Release is not to be
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construed as an admission of any violation of any federal, state or local
statutes, ordinance or regulation or any duty allegedly owed by You to me. You
specifically disclaim any liability to me on any basis.
4. Time Periods. I have been given the opportunity to take a period of at least
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twenty-one (21) days within which to consider this Release. If I choose to sign
this Release before that time period expires, I do so knowingly and voluntarily.
I also understand that I have the right to change my mind and cancel this
Release within seven (7) days following the date that I have signed it. This
Release will not be effective until the end of this seven (7) day period.
5. Consideration. In exchange for, consideration of and reliance on my execution
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of this Release, You and I have (a) executed and agreed to perform that certain
Confidential Severance Agreement dated as of February 12, 1999 ("Agreement") and
(b) You agree to commence payment to me upon the expiration of the seven (7) day
time period referred to in Paragraph 4 above, the payments pursuant to Section 2
of the Agreement. I agree that I will not seek anything further, including any
other payment from You. I further agree, in return for receipt of the foregoing
payments, to abide by all of your rules, policies and procedures applicable to
current and former employees.
6. Confidentiality. I agree that the terms and conditions of this Release shall
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remain confidential and shall not be disclosed to any other person (other than
my family members, attorneys, and accountants who shall be informed of and bound
by the confidentiality provisions of this Release) other than as required by
court order, legal process or applicable law or as otherwise agreed to by You
and me. I understand that this provision regarding confidentiality constitutes a
substantial inducement for You to enter into this Release.
7. Who is Bound. I am bound by this Release. Anyone who succeeds to my rights
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and responsibilities, such as my heirs or the executor of my estate, is also
bound by this Release. This Release is made for your benefit and that of anyone
who succeeds to your rights and responsibilities.
8. No Inducements. I further warrant that no promise or inducement for this
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Release has been made except as set forth herein, that this Release is executed
without reliance upon any statement or representation by any person or parties
released, their officers, directors, employees, agents or representatives,
concerning any fact material to my act in releasing them, and that I am legally
competent to execute this Release and accept full responsibility therefor.
9. Representations. I understand and agree that I understand the contents,
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implications, and consequences of this Release, and that I agree to the terms of
this Release and have executed it voluntarily. I have had an opportunity to
discuss the terms of this Release with individuals of my own choosing who are
not associated with You. I have been advised by You to consult with an attorney
of my own choosing.
10. Entire Agreement. This Release and the Agreement constitute the entire
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agreements between You and I concerning the subject matter hereof and supersede
all prior agreements between You and I. This Release may not be modified orally.
I understand and agree to the terms of this Release.
11. Governing Law. This Release is made and entered into in the Commonwealth of
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Pennsylvania and shall in all respects be interpreted, enforced and governed
under the laws of said Commonwealth. The language of all parts of this Release
shall cause to be construed as a whole, according to its fair meaning, and not
strictly for or against You or I.
12. Invalidity. Should any provisions of this Release be determined by any court
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to be illegal or invalid, the validity of the remaining parts, terms or
provisions shall not be affected thereby and said illegal or invalid part, term
or provision shall be deemed not to be a part of this Release.
13. Arbitration. All controversies, claims, disputes, and matters in question
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arising out of, or relating to, this Release or the breach thereof, shall be
decided by arbitration in accordance with the provisions of Section 8.1 of the
Agreement.
I ACKNOWLEDGE AND AGREE THAT I HAVE BEEN ADVISED TO CONSULT WITH AN ATTORNEY
PRIOR TO EXECUTING THIS RELEASE; THAT TO THE EXTENT I HAVE DESIRED I HAVE
AVAILED MYSELF OF THAT RIGHT; THAT I HAVE CAREFULLY READ AND UNDERSTAND ALL OF
THE PROVISIONS OF THIS RELEASE; THAT I MAY REVOKE THIS RELEASE WITHIN SEVEN (7)
DAYS AFTER YOU HAVE EXECUTED IT; AND THAT I AM VOLUNTARILY ENTERING INTO THIS
RELEASE.
IN WITNESS WHEREOF, the undersigned has executed this Release
as of the date written freely and voluntarily.
DATED AS OF: February 12, 1999 ENVIROSOURCE, INC.
By:
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DATED AS OF: February 12, 1999 ACKNOWLEDGED AND AGREED:
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇