EXHIBIT 10.20
EMPLOYMENT
AGREEMENT
(conformed)
THIS AGREEMENT
, by and between Ryerson Inc. (the
“Company”) and Neil S. Novich (the
“Executive”) effective as of December 1, 1999 (the
“Effective Date”) and as amended and restated
January 1, 2006.
WITNESSETH THAT:
WHEREAS , the Company has appointed Executive to the
position of Chairman, President and CEO, and Executive has accepted
such appointment;
WHEREAS , in connection with such appointment, the
Company and Executive desire to enter into this Agreement;
and
WHEREAS , this Agreement is amended effective
January 1, 2006 to conform to the requirements of the Internal
Revenue Code Section 409A;
NOW, THEREFORE
, in consideration of the
Executive’s appointment as Chairman, President and CEO, and
for other good and valuable consideration the receipt of which is
hereby acknowledged, it is agreed by the Executive and Company as
follows:
1. Duties . The
Executive agrees that while he is employed by the Company, he will
devote his full business time, energies and talents to serving as
the Chairman, President and CEO of the Company and providing
services for the Company at the direction of the Board of Directors
of the Company. The Executive shall have such duties and
responsibilities as may be assigned to him from time to time by the
Board of Directors, shall perform all duties assigned to him
faithfully and efficiently, subject to the direction of the Board
of Directors, and shall have such authorities and powers as are
inherent to the undertakings applicable to his position and
necessary to carry out the responsibilities and duties required of
him hereunder; provided, however, that the Executive shall not be
required to perform any duties while he is disabled. Both parties
understand and agree that the Executive may serve on boards of
directors of other businesses which are not in competition with the
Company and may engage in civic and charitable activities provided
that such service and activities do not materially interfere with
the performance of the Executive’s duties.
2. Compensation .
Subject to the terms and conditions of this Agreement, during the
Employment Period while the Executive is employed by the Company,
the Company shall compensate him for his services as
follows:
(A) The Executive shall receive, for
each twelve-consecutive month period beginning on February 8,
1999, and each anniversary thereof, an annual salary not less than
$500,000 (the “Annual Base Salary”), which Annual Base
Salary shall be payable in substantially equal bi-weekly
installments. The Executive’s rate of Annual Base Salary
shall be reviewed annually beginning in February, 2000 and may be
increased at that time with the Compensation Committee’s
approval.
(B) The Executive shall be entitled
to receive bonuses from the Company in accordance with the bonus
plans of the Company as in effect from time to time. As Chairman,
President and CEO his target bonus award percentage shall be 70% of
the median annual salary of the CEO position within the Hewitt
comparator survey, subject to annual approval of the Compensation
Committee of the Board of Directors.
(C) Except as otherwise specifically
provided to the contrary in this Agreement, the Executive shall be
provided with health, welfare and other fringe benefits to the same
extent and on the same terms as those benefits are provided by the
Company from time to time to the Company’s other senior
management executives.
(D) The Executive shall be
reimbursed by the Company, on terms and conditions that are
substantially similar to those that apply to other similarly
situated senior management executives of the Company, for
reasonable out-of-pocket expenses for entertainment, travel, meals,
lodging and similar items which are consistent with the
Company’s expense reimbursement policy and actually incurred
by the Executive in the promotion of the Company’s
business.
(E) The Company shall pay or shall
reimburse the Executive for both of his monthly club dues and
assessments;
(F) The Company shall pay the
Executive for the amount of the monthly lease payment for the
automobile that the Executive uses for business; provided, however,
that the Company shall report as income to the Executive any
amounts required by law or the policies of the Company relating to
the Executive’s personal use of such automobile.
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(G) The Executive shall be
recommended for stock awards in the future utilizing the
methodology in place for the 1999 grant. The methodology in place
for 1999 will not be changed in a manner which is less favorable to
the Executive.
(H) The Executive shall be provided
financial services counseling.
3. Rights and Payments Upon
Termination . The Executive’s right to benefits and
payments, if any, for periods after the date on which his
employment with the Company terminates for any reason (his
“Termination Date”) shall be determined in accordance
with this Section 3:
(A) Termination by the Company
for Reasons Other Than Cause; Termination by the Executive for Good
Reason . If the Executive’s termination by the
Company occurs for any reason other than Cause or is a result of
the Executive’s termination of employment for Good Reason
(and is not on account of the Executive’s death, disability,
or voluntary resignation, the mutual agreement of the parties or
any other reason), then the period (the “Benefit
Period”) commencing on his Termination Date and ending on the
earliest of (i) the thirty-sixth month after the
Executive’s Termination Date; (ii) the date on which the
Executive violates the provisions of Sections 4, 5 or 6 of this
Agreement; or (iii) the date of the Executive’s death,
the Executive shall continue to receive from the Company bi-weekly
Annual Base Salary (based on his Annual Base Salary as in effect on
his Termination Date) and “Bonus” (as defined below)
payments. Such continued bi-weekly base salary payments shall be
made on the regularly scheduled pay dates following the
Executive’s Termination Date. Notwithstanding the foregoing
provisions of this Paragraph 3(a), if the Executive is a
“specified person” (within the meaning of
Section 409A of the Internal Revenue Code of 1986, as amended
(“Code”)) on the Termination Date and payments under
this Agreement are not exempt from Code Section 409A under the
exception for separation payments on involuntary termination that
do not exceed two times the limit under Section 401(a)(17) of
the Code, then the first payment of continued Annual Base Salary
shall not be made until the first regularly scheduled pay date that
is six months after the Termination Date and shall consist of
(a) an initial payment equal to the sum of (1) the total
bi-weekly payments the Executive would have been entitled to
receive during the first six months following the Termination Date
if the Executive were not a specified person plus (2) the
first bi-weekly payment due in the seventh month following the
Termination Date, and (b) subsequent to the initial payment,
bi-weekly payments based on his or her Annual Base Salary to the
extent not paid with the initial payment.
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Benefits that will continue will
include medical, dental, basic life insurance, financial counseling
services, any optional life insurance and any optional accidental
death and dismemberment insurance. “Bonus” shall mean
three payments of the average annual amount of the award paid to
the Executive pursuant to the annual incentive plan or successor
plan with respect to the three years immediately preceding that in
which the Termination Date occurs; excluding any years in which the
bonus was zero. If all three immediately preceding bonus payments
were equal to zero, then no bonus payment would be continued for
the next three years.
Base salary payments to the
Executive during the aforementioned Benefit Period shall not
preclude the Executive’s eligibility for payments under the
Company’s severance plan.
Thirty-six months of additional age
and service credit will be provided to the Executive’s RT
Pension and the RT Supplemental Plan using the methodology
described in the Executive’s Change in Control Agreement
except that any lump sum payment will be made thirty-six months
after the Executive’s Termination Date and only if the
Executive has not violated the Confidentiality, Nonsolicitation and
Noncompetition provisions of this Agreement.
All existing unvested options as of
the Termination Date will become vested and the Executive shall be
afforded a 36 month extension period of time (but not beyond the
original Termination Date of the option) from the Termination Date
to exercise any remaining unexercised options that had not expired
before the Termination Date.
It is expected that the Executive
would have an opportunity to exercise said options in a cashless
exchange from the first window period (post earnings public release
period) after the Executive’s Termination Date and
thereafter. The Company expects that such a transaction could be
accomplished very promptly at the beginning of said window period
and thereafter. The Executive may exercise a cashless exchange of
options before the date mentioned above if the Company is in
agreement on the efficacy of such action and such agreement would
not be unreasonably withheld by the Company.
The Company will, to the maximum
extent permitted by law, defend, indemnify and hold harmless the
Executive and the Executive’s heirs, estate, executors and
administrators
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against any costs, losses, claims,
suits, proceedings, damages or liabilities to which the Executive
may become subject which arise out of, are based upon or relate to
the Executive’s employment by the Company (and any
predecessor company to the Company), or the Executive’s
service as an officer or member of the Board of Directors of the
Company (or any predecessor company to the Company), including
without limitation reimbursement for any legal or other expenses
reasonably incurred by the Executive in connection with
investigation and defending against any such costs, losses, claims,
suits, proceedings, damages or liabilities. The Company shall
maintain directors and officers liability insurance in commercially
reasonable amounts (as reasonably determined by the Board), and the
Executive shall be covered under such insurance to the same extent
as other senior management employees of the Company with respect to
matters which occurred during such period of employment.
The Executive will be provided
one-on-one Executive out placement and office services following
his Termination Date. Such services will be pa
