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Exhibit 10.7
EMPLOYMENT AGREEMENT
This AGREEMENT made as of the 1st day of January,
2004 by and between ROBERT L. GILLELAND , an
individual residing at 61 James Towne Court, Baton Rouge, LA 70809
(the " Executive "), EDGEN ALLOY PRODUCTS GROUP,
L.L.C., a Louisiana limited liability company (the "
Company "), and EDGEN CORPORATION ,
a Nevada corporation (" Parent ").
W I T N E S S E T H
WHEREAS, the Executive serves as the President of
the Company, which is a wholly-owned subsidiary of Parent; and
WHEREAS, Parent and the Company seek to utilize the
Executive’s knowledge, experience, talents and abilities and
desire to employ the Executive as the President of the Company, and
the Executive desires to be so employed, subject to the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing
and of the respective covenants and agreements herein contained,
and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto
intending to be legally bound hereby agree as follows:
1.
Employment . Subject to the terms and conditions
hereinafter set forth, the Company and Parent hereby agree to
employ the Executive, and the Executive hereby agrees to serve as
the President of the Company, effective on January 1, 2004.
The Executive agrees to perform such services customary to such
office as shall from time to time be assigned to him by the Board
of Directors of Parent (the " Board of Directors ") and/or
by Parent’s Chief Executive Officer, or his designee
(collectively the " Chief Executive Officer "). The
Executive further agrees to use his best efforts to promote the
interests of the Company and of Parent, and to devote his full
business time and entire energies and skill to the business and
affairs of the Company and of Parent in accordance with the
directions and orders of the Board of Directors and/or the Chief
Executive Officer; provided , however , that it shall
not be a violation of this Agreement for the Executive to serve on
corporate, civic, or charitable boards or committees or manage
personal investments, as long as such activities do not interfere
in any substantial respect with the Executive’s
responsibilities hereunder.
2.
Term of Employment . The Executive’s "
Employment Term " pursuant to this Agreement shall commence
on the date hereof (the " Effective Date ") and, unless
terminated earlier pursuant to Section 4 hereof, shall terminate
upon the first anniversary of the Effective Date; provided,
however, that the Employment Term shall automatically be extended
on a day-by-day basis (so that the remaining term shall always be
one (1) year) unless either the Company or the Executive elects not
to renew such term by giving written notice (an " Employment
Expiration Notice ") thereof; provided ,
further , however , that if the Executive is
terminated pursuant to Section 4 below, there shall be no automatic
daily renewal of the Employment Term.
The Employment Term shall terminate on the one (1)
year anniversary of the date of receipt of the Employment
Expiration Notice by the Employee or the Employer, as
applicable.
3.
Compensation and Other Related Matters .
3.1.
Base Salary . As compensation for the services
rendered by the Executive hereunder, the Company shall pay, or
shall cause to be paid, to the Executive during the Employment
Term, and the Executive shall accept, compensation at the rate of
Two Hundred Ten Thousand, Seventeen Dollars ($210,017) per annum
(the " Annual Base Salary "). The Company’s
obligation to pay the Annual Base Salary shall begin to accrue on
the Effective Date and shall be paid in accordance with the
Company’s customary payroll practices which are in effect
from time to time during the Employment Term. The Annual Base
Salary may be increased at any time during the Employment Term by
recommendation of the Chief Executive Officer to the Board of
Directors. The Executive’s Annual Base Salary shall be
subject to all applicable withholding and other taxes.
3.2.
Annual Bonus . In addition to the Annual Base Salary
set forth above, during the Employment Term; the Executive shall be
entitled to receive an annual bonus (the " Annual Bonus ")
in the amount and calculated in the manner set forth on Schedule
A annexed hereto. The Annual Bonus shall be payable by
the Company to the Executive with respect to each year ending on
December 31 by March 15 of the following year.
3.3.
Other Employment Benefits . During the Employment
Term, the Executive shall be entitled to the following employment
benefits:
(a)
Four (4) weeks of paid vacation in each fiscal year of the Company
while the Executive is employed hereunder one (1) week of which, if
not used by the Executive in any given fiscal year, may be carried
over to the next fiscal year; provided , that the Executive
shall not have more than five (5) weeks of paid vacation in any
given fiscal year as a result of such carry over and sick leave in
accordance with the Company’s policies from time to time in
effect for executive officers of the Company; provided ,
that, as provided herein, vacation and/or sick leave time not used
in any year may not be carried over or transferred from one year to
another or converted to cash, except in a year in which there is a
Change of Control (as hereinafter defined) where the Executive is
no longer employed;
(b)
participation, subject to qualification requirements, in medical,
life or other insurance or hospitalization plans and long-term
disability policies which are presently in effect or hereafter
instituted by the Company and applicable to its executive officers
generally;
(c)
participation, subject to classification requirements and continued
maintenance thereof by the Company in other employee benefit plans,
such as pension and profit sharing plans, which are from time to
time applicable to the Company’s executive officers
generally; and
(d)
an automobile allowance of One Thousand Two Hundred Dollars
($1,200) per month, which shall be used by the Executive to cover
all lease and insurance payments with respect to one automobile of
the Executive’s choice for business purposes. The
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Company shall reimburse the Executive, upon the
presentation of appropriate receipts, for all maintenance, repair
and gasoline costs incurred by the Executive in connection with the
use of such automobile; provided , that such costs are
directly related to the performance by the Executive of his
obligations to the Company hereunder.
3.4.
Expenses . During the Employment Term, the Executive
shall be entitled to receive prompt reimbursement from the Company
of all travel, entertainment and out-of-pocket expenses which are
reasonably and necessarily incurred by the Executive in the
performance of his duties hereunder; provided that the
Executive properly accounts therefor in accordance with the
Company’s policies as in effect from time to time and such
expenses are approved by the Chief Executive Officer.
4.
Termination .
4.1.
Disability . In the event that at any time during the
Employment Term, the Executive, due to physical or mental injury,
illness, disability or incapacity, including "disability" within
the meaning of the disability plan(s) which the Company then has in
effect entitling the Executive to benefits thereunder ("
Disability "), shall fail to perform satisfactorily and
continuously the duties assigned to him and the services to be
performed by him hereunder for a period of three (3) consecutive
months or for a non-consecutive period of five (5) months within
any twelve (12) month period, the Company may terminate his
employment for Disability upon not less than thirty (30) days prior
written notice by delivery of a Termination Notice (as defined
below) to the Executive.
4.2.
Death . The Executive’s employment shall
terminate immediately upon the death of the Executive.
4.3.
Cause . The Company may, at any time and in its sole
discretion, terminate the Executive’s employment for Cause
(as herein defined) by delivery to the Executive of a Termination
Notice specifying the nature of such Cause, effective as of the
date (such effective date referred to herein as a " Termination
Date ") of such Termination Notice. For purposes hereof,
termination for " Cause " shall mean (i) a conviction of, a
plea of nolo contendere , a guilty plea or confession
by the Executive to an act of fraud, misappropriation or
embezzlement or to a felony; (ii) the commission of a fraudulent
act or practice by the Executive affecting the Company and/or
Parent; (iii) the willful failure by the Executive to follow the
directions of the Board of Directors or the Chief Executive
Officer; (iv) the Executive’s habitual drunkenness as
determined in the reasonable discretion of the Board of Directors
or use of illegal substances; (v) the material breach by the
Executive of this Agreement or (vi) an act of gross neglect or
gross or willful misconduct that relates to the affairs of the
Company and/or Parent which the Board of Directors of the Company
in its reasonable discretion deems to be good and sufficient cause;
provided , that the Executive shall receive a Termination
Notice with respect to a termination for Cause pursuant to
subsections (iii), (v) and/or (vi) hereof and the Executive shall
have the thirty (30) days following his receipt of the Termination
Notice to cure the breach specified therein prior to his employment
being terminated for Cause pursuant thereto.
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4.4.
Voluntary Termination by Company . The Company may, at
any time, and in its sole discretion, terminate the employment of
the Executive hereunder for any reason other than for Cause by the
delivery to the Executive of a Termination Notice, effective as of
the date of such Termination Notice.
4.5.
Termination by Company in Conjunction with a Change of
Control . For purposes of this Agreement, a " Change
of Control " means the sale of Parent whether by, merger,
consolidation, recapitalization, reorganization, sale of
securities, sale of assets or otherwise in one transaction or a
series of related transactions to a person or persons (other than
to Harvest Partners III, L.P. or to any person, persons or entities
affiliated therewith), pursuant to which such person or persons
(together with its affiliates) acquires (i) securities representing
at least a majority of the voting power of all securities of
Parent, including securities convertible, exchangeable or
exercisable for or into voting securities of Parent, assuming the
conversion, exchange or exercise of all securities convertible,
exchangeable or exercisable for or into voting securities or (ii)
all or substantially all of the consolidated assets of
Parent. The Company may terminate the employment of the
Executive hereunder in conjunction with any Change of Control in
accordance with Section 5.6 hereof by delivery to the Executive of
a Termination Notice (as defined above), effective as of the date
stated in the Termination Notice.
4.6.
Executive’s Resignation for Good Reason . After
a Change of Control, the Executive may terminate his employment for
Good Reason in accordance with Section 5.6. For purposes
hereof, " Good Reason " shall mean, without the
Executive’s consent: (i) the assignment to the Executive of
any duties inconsistent in any material respect with the
Executive’s position (including status, offices, duties and
reporting relationships), authority, duties or responsibilities as
contemplated by Section 1 hereof, or any other action by the
Company which results in a significant diminution in such position,
authority, duties, or responsibilities, excluding any isolated and
inadvertent action not taken in bad faith and which is remedied by
the Company within ten (10) days after receipt of notice thereof
from the Executive; (ii) any failure by the Company to comply with
any of the provisions of Section 3 hereof other than an isolated
and inadvertent failure not committed in bad faith and which is
remedied by the Company within ten (10) days after receipt of
notice thereof from the Executive; (iii) the Executive’s
being required to relocate to a principal place of employment more
than fifty (50) miles from his principal place of employment with
the Company as of the Effective Date or (iv) delivery by the
Company of a notice discontinuing the automatic extension provision
of Section 2 hereof.
5.
Compensation During Disability and Upon Termination .
During a Disability Period (as herein defined) or upon the
termination of the Executive’s employment hereunder, the
Executive shall be entitled to the following benefits:
5.1.
Disability . During any period (the " Disability
Period ") that the Executive, due to Disability fails to
perform satisfactorily and continuously the duties assigned to him
and the services to be performed by him hereunder, the Company
shall continue to pay to the Executive the Annual Base Salary (as
in effect at such time) in accordance with the provisions of
Section 3.1 hereof, less any compensation payable to the Executive
under the applicable disability insurance plan(s) of the Company
during such Disability Period. Thereafter, if the
Executive’s employment hereunder is terminated pursuant to
Section 4.1 hereof, the Company
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shall have no further obligations hereunder after
the Termination Date other than the payment of (a) the Annual Base
Salary (as in effect during the year of such termination) payable
in accordance with the Company’s customary payroll practices
(less any compensation payable to the Executive under the
applicable disability insurance plan(s) of the Company), for the
twelve (12) month period immediately following the Termination Date
and (b) the Executive’s pro rata portion of the Annual
Bonus due pursuant to Section 3.2 hereof for the calendar year in
which such termination occurs (based upon the number of days during
such year that the Executive was employed over 365 days prior to
termination), payable on the same date as such Annual Bonus would
have been payable for such year pursuant to Section 3.2 hereof had
the Employment Term not been so terminated.
5.2.
Death . If the Executive’s employment is
terminated pursuant to Section 4.2 hereof as a result of the
Executive’s death, the Company shall have no further
obligations hereunder after the date of the Executive’s death
other than the payment to the Executive’s estate, legal
representative, heirs or other beneficiaries of (a) the Annual Base
Salary (as in effect during the calendar year of such death)
payable in accordance with the Company’s customary payroll
practices, for the twelve (12) month period immediately following
the date of the Executive’s death, and (b) the
Executive’s pro rata portion of the Annual Bonus due
pursuant to Section 3.2 hereof for the calendar year in which such
death occurred (based upon the number of days during such year that
the Executive was employed over 365 days prior to death), payable
on the same date as such Annual Bonus would have been payable for
such year pursuant to Section 3.2 hereof had the Employment Term
not been so terminated.
5.3.
Cause . If the Executive’s employment is
terminated by the Company for Cause pursuant to Section 4.3 hereof,
the Company shall have no further obligations hereunder after the
Termination Date other than the payment to the Executive of the
Annual Base Salary accrued and unpaid through the Termination
Date. The Company shall not be obligated to make any bonus
payments to the Executive pursuant to Section 3.2 hereof for the
calendar year in which such termination occurs or to provide any of
the benefits set forth in Section 3.3 of this Agreement after the
Termination Date, except as may be required by applicable law.
5.4.
Voluntary Termination by Company . If the Company
voluntarily terminates the Executive’s employment hereunder
pursuant to Section 4.4 hereof, the Company shall have no further
obligations hereunder after the Termination Date other than the
payment of (a) (i) one (1) year of the Annual Base Salary (as in
effect during the year of such termination) payable in accordance
with the Company’s customary payroll practices, and (ii) at
no greater out-of-pocket expense to the Company than incurred prior
to termination, the Company-sponsored medical and health benefits
(or the reimbursement of COBRA premiums) previously made available
to the Executive, but only to the extent permitted by such policies
or plans, or as otherwise required by law, and (b) the Annual Bonus
due pursuant to Section 3.2 hereof for the calendar year in which
such termination occurs, payable on the same date as such
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