EXECUTION
COPY
EXHIBIT 10.17
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
("Employment Agreement") dated as of April 25, 2007, among
RathGibson, Inc. (the "Company") and its affiliated companies, RGCH
Holdings Corp. ("Holdings") and RGCH Holdings LLC (the "LLC"), and
Jeffrey J. Nelb (the "Executive") (together, the "Parties").
This Employment Agreement amends and restates the Employment
Agreement entered into among the Parties, dated September 11, 2007
(the "Prior Employment Agreement"), and supersedes and replaces any
and all other prior offers, agreements, statements and
representations made, whether written or oral. Any other
agreement, arrangement or understanding between the parties hereto
shall be of no further effect.
WHEREAS, the Company desires to continue
to employ Executive, and Executive desires to continue to be
employed by the Company, as the General Manager, North Branch New
Jersey operations of the Company, in accordance with the terms and
conditions set forth herein; and
WHEREAS, the Parties each desire that the
Prior Employment Agreement be amended and restated in its entirety
as set forth in this Agreement and that this Employment Agreement
supersede the Prior Employment Agreement, and all other agreements
with respect to the subject matter hereof.
NOW, THEREFORE, in consideration of the
foregoing and the mutual covenants and promises in this Employment
Agreement, the parties agree as follows:.
Accordingly, the Parties agree as
follows:
1.
Employment and Acceptance
. The Company, Holdings and the LLC
shall employ the Executive, and the Executive shall accept
employment, subject to the terms of this Agreement, on the
Effective Date.
2.
Term . Subject to earlier termination pursuant to
Section 5 of this Agreement, the employment relationship hereunder
shall continue from September 11, 2006 (the "Effective Date") until
the first anniversary of the Effective Date (the "Initial Term")
and shall extend for successive one (1) year terms thereafter,
unless any Party shall have given ninety (90) days written notice
to the other, prior to the expiration of the Initial Term or
extended term, that it does not wish to extend the Term. As
used in this Agreement, the "Term" shall refer to the period
beginning on the Effective Date and ending on the date the
Executive's employment terminates in accordance with this Section 2
or Section 5. In the event that the Executive's employment
terminates, the Company's obligation to continue to pay all Base
Salary (defined below in Section 4.1), as adjusted, "Bonus"
(defined below in Section 4.2), and other benefits then accrued
shall terminate except as may be provided for in Section 6 of this
Agreement.
3.
Duties and Title
.
3.1
Title . The Executive shall serve in the capacity of
Vice President and General Manager, North Branch New Jersey
operations, and shall report to the Chief Executive Officer of the
Company.
3.2
Duties . The Executive will perform such executive
duties customarily performed by the Vice President and General
Manager of a company in similar lines of business as the Company,
including such duties as may be assigned to the Executive by the
Board of Directors of the LLC (the "Board") or the Chief Executive
Officer of the Company. The Executive will devote all his
full business time and attention to the performance of such duties
and to the promotion of the business and interests of the Company,
Holdings, the LLC, and their subsidiaries. This Section 3.2,
however, shall not prevent the Executive, during the Term, from
serving as a member of the board of directors of civic and
charitable organizations, provided that such membership does not
materially interfere with the Executive's performance of his duties
under this Agreement or conflict with Section 7.3 of this
Agreement.
4.
Compensation and Benefits by the
Company . As
compensation for all services rendered pursuant to this Agreement,
the Company shall provide the Executive the following during the
Term:
4.1
Base Salary . The Company will pay to the Executive an
annual base salary of $240,000 payable in accordance with the
customary payroll practices of the Company ("Base Salary"), less
applicable withholdings for federal, state, and local taxes.
The Board will review annually the Executive's Base Salary
for upward adjustment.
4.2
Bonus . The Executive shall be eligible to receive an
annual bonus of up to 100% of Base Salary ("Bonus") under a plan
established by the Company or the Board (or a Committee thereof).
The Bonus shall be pro-rated for partial fiscal years of
employment.
4.3
Signing Bonus . The Executive acknowledges and agrees that he
has received from the Company a one time bonus of $50,000, less
applicable withholdings for federal, state, and local taxes in
connection with his execution of the Prior Employment
Agreement.
4.4
Relocation . The Company shall reimburse the Executive (on
a tax neutral grossed up basis) for expenses reasonably incurred by
the Executive in connection with the Executive's relocation to the
North Branch, NJ area, including, (a) costs associated with the
packing, unpacking and moving of household goods, (b) costs
incurred in connection with the purchase of a new home; (c) closing
costs incurred in connection with the sale of Executive's existing
home, and (d) reasonable costs incurred by the Executive for
temporary living arrangements in the North Branch, NJ area, not to
exceed ninety (90) days.
4.5
Participation in Employee Benefit
Plans . The Executive
shall be entitled, if and to the extent eligible, to participate in
all of the applicable benefit plans of the Company, which may be
available to all other senior executives of the Company, pursuant
to the terms of such plans and on the same terms as all other
senior executives of the Company. Notwithstanding the
foregoing, the Executive shall not, at any time, receive any
personal loans from the Company or any of its affiliates pursuant
to any benefit plan or otherwise.
4.6
Vacation . The Executive shall be entitled to four (4)
weeks of paid vacation each fiscal year of the Company. The
carry-over of vacation days shall be in accordance with the
vacation policy of the Company. The Executive shall not be
entitled to payment for unused vacation days upon the termination
of his employment except as set forth in Section 6.2 below.
4.7
Expense Reimbursement
. The Executive shall be entitled
to receive reimbursement for all appropriate business expenses
incurred by him in connection with his duties under this Agreement
in accordance with the policies of the Company as in effect from
time to time.
5.
Termination of Employment
.
5.1
Death . The Executive's employment hereunder shall
terminate immediately upon his death.
5.2
Disability . The Company may immediately terminate the
Executive's employment due to his "Disability." For purposes
of this Agreement, "Disability" shall mean a good faith
determination by the Board in accordance with applicable law that
as a result of a physical or mental injury or illness, the
Executive is unable to perform the essential functions of his job
with or without reasonable accommodation for a period of (i) ninety
(90) consecutive days or (ii) one hundred eighty (180) days in any
twelve (12) month period.
5.3
By the Company for Cause
. The Company may immediately
terminate the Executive's employment, for "Cause" (as defined
below), by action of the Board, upon written notice by the Board to
the Executive identifying the act or acts constituting Cause.
For purposes of this Agreement, "Cause" means: (i) the
Executive’s willful and continued failure (other than as a
result of incapacity due to mental or physical impairment) to
substantially perform his duties hereunder, which is not remedied
within ten (10) days after receipt of written notice from the Board
specifying such failure; (ii) the Executive’s failure to
carry out, or comply with, any lawful and reasonable directive of
the Board or the Chief Executive Officer of the Company, which is
not remedied within thirty (30) days after receipt of written
notice from the Board or the Chief Executive Officer specifying
such failure; (iii) the Executive’s conviction of or plea of
nolo contendre to any felony or other crime involving moral
turpitude; (iv) the Executive’s knowing unlawful use or
possession of illegal drugs; or (v) the Executive’s
commission of a material bad faith act of fraud, embezzlement,
misappropriation, willful misconduct, gross negligence, or breach
of fiduciary duty, in each case against the Company, Holdings, the
LLC, or any of their subsidiaries.
5.4
By the Company without
Cause . The Company may
immediately terminate the Executive's employment without Cause at
any time without prior notice.
5.5
By the Executive
. The Executive may terminate his
employment hereunder at any time, with or without "Good Reason" (as
defined below), upon thirty (30) days prior written notice to the
Company. The Executive's employment shall terminate as of
thirty (30) days from the date notice is given, unless, with
respect to a notice regarding a termination based on Good Reason,
the Company corrects the circumstances constituting Good Reason
within such thirty (30) day period. For purposes of this
Agreement, "Good Reason" means, without the Executive's consent,
(i) a reduction in Base Salary or (ii) a material adverse
reduction
in the Executive's employee benefits;
provided, however, that Good Reason shall not include acts which
are cured by the Company within thirty (30) days following the
Company's receipt of written notice from the Executive of the
existence of circumstances constituting Good Reason. Any
notice of termination for Good Reason must be given within thirty
(30) days following the Executive's learning of circumstances
constituting Good Reason.
5.6
Removal from any Boards and
Position . If the
Executive's employment is terminated for any reason under this
Agreement, he shall be deemed to resign (i) if a member, from the
Board or any other board to which he has been appointed or
nominated by or on behalf of the Company, Holdings or the LLC or
any of their subsidiaries and (ii) from any position with the
Company, Holdings, the LLC, or any of their subsidiaries,
including, but not limited to, an officer of the
Company.
6.
Obligations upon
Termination .
6.1
By the Company for Cause or by the
Executive Without Good Reason or Due to Death or
Disability . If (i) the
Executive's employment with the Company terminates due to his
death; (ii) the Company terminates the Executive's employment with
the Company for Cause; (iii) the Company terminates the Executive's
employment with the Company due to the Executive's Disability; or
(iv) the Executive terminates his employment with the Company
without Good Reason, the Executive or the Executive's legal
representatives (as appropriate), shall be entitled to receive the
following:
(a)
the Executive's accrued but unpaid Base
Salary and benefits set forth in Section 4.5, if any, to the date
of termination (the "Accrued Benefits"); and
(b)
expenses reimbursable under Section 4.7
incurred but not yet reimbursed to the Executive to the date of
termination.
6.2
By the Company Without Cause or By the
Executive for Good Reason .
If the Company terminates the Executive's employment without
Cause or if the Executive terminates his employment for Good
Reason, the Executive shall be entitled to receive the following,
upon execution without revocation of a valid general release of all
claims against the Company, Holdings, the LLC, and Castle Harlan
Partners IV, L.P., and other affiliates, substantially in the form
attached hereto as Exhibit A :
(a)
the Accrued Benefits;
(b)
the Executive's accrued but unpaid
vacation, if any, to the date of termination;
(c)
continued Base Salary for twelve (12)
months after the date of termination, payable in monthly
installments; and
(d)
continued coverage under the Company's
medical and dental plans for twelve (12) months after the date of
termination; provided, that the Company may provide such coverage
through reimbursement of the cost of continuation of group health
coverage, pursuant to the Consolidated Omnibus Budget
Reconciliation
Act of 1986 ("COBRA"), to the extent the
Executive is eligible and subject to the terms of the plan and the
law.
6.3
By the Company Without Cause or By the
Executive for Good Reason in Connection with a Change in Control
Prior to the Second Anniversary of the Effective Date
. Notwithstanding anything in this
Employment Agreement, if a Change in Control (as defined below)
occurs prior to the second anniversary of the Effective Date and
the Company terminates the Executive's employment without Cause or
if the Executive terminates his employment for Good Reason within
twelve (12) months following such Change in Control, the Executive
shall be entitled to receive the following, upon execution without
revocation of a valid general release of all claims against the
Company, Holdings, the LLC, and Castle Harlan Partners IV, L.P.,
and other affiliates, substantially in the form attached hereto as
Exhibit A :
(a)
the Accrued Benefits;
(b)
the Executive's accrued but unpaid
vacation, if any, to the date of termination;
(c)
continued Base Salary for eighteen (18)
months after the date of termination, payable in monthly
installments; and
(d)
continued coverage under the Company's
medical and dental plans for eighteen (18) months after the date of
termination; provided, that the Company may provide such coverage
through reimbursement of the cost of continuation of group health
coverage, pursuant to COBRA, to the extent the Executive is
eligible and subject to the terms of the plan and the
law.
For the purposes of this Employment
Agreement, "Change in Control" means (i) the sale of all or
substantially all of the business and/or assets of the Company to a
person or entity that is not a subsidiary or other affiliate of the
Company, Holdings, the LLC or Castle Harlan Inc. ("CHI"), and (ii)
the merger or consolidation or other reorganization of the Company
with or into one or more entities that are not subsidiaries or
other affiliates of the Company, Holdings, the LLC or CHI, which
results in less than 50% of the outstanding equity interests of the
surviving or resulting entity immediately after the reorganization
being owned, directly or indirectly, by the holders (or affiliates
of the holders) of equity interests of the Company immediately
before such reorganization.
6.4
Election Not to Extend the
Term . In the event that
any Party elects not to extend the Term pursuant to Section 2 of
this Agreement, unless the Executive’s employment with the
Company is earlier terminated pursuant to Section 5 of this
Agreement, the Executive’s termination of employment
hereunder (whether or not the Executive continues as an employee of
the Company thereafter) shall be deemed to occur on the close of
business on the day immediately preceding the next scheduled date
on which the extension begins, and the Executive shall be entitled
to receive the Accrued Benefits. In addition to the Accrued
Benefits, the Executive shall also be entitled to receive, upon
execution without revocation of a valid general release of all
claims against the Company, Holdings, the LLC, and Castle Harlan
Partners IV, L.P., substantially in the form attached hereto as
Exhibit A , continued Base Salary for six (6) months after
the date of termination, payable in monthly installments, in the
event that the Company elects not to extend the Term pursuant to
Section 2 of this Agreement.
6.5
Nondisparagement
. Except in connection with any
legal dispute between the Parties or an order of a court or
governmental agency with jurisdiction, the Executive shall not at
any time (whether during or after the Term) publish or communicate
to any person or entity any "Disparaging" (as defined below)
remarks, comments or statements concerning the Company, Holdings,
the LLC, Castle Harlan, Inc., their parents, subsidiaries and
affiliates, and their respective present and former members,
partners, directors, officers, shareholders, employees, agents,
attorneys, successors and assigns.
7.
Restrictions and Obligations of the
Executive .
7.1
Confidentiality
. i) During the course of the
Executive's employment by the Company, the Executive has had and
will have access to certain trade secrets and confidential and
proprietary information relating to the Company, Holdings, the LLC,
and their subsidiaries (the "Protected Parties") which is not
readily available from sources outside the Company. The
confidential and proprietary information and, in any material
respect, trade secrets of the Protected Parties are among their
most valuable assets, including but not limited to, their customer,
supplier and vendor lists; databases; competitive strategies;
computer programs, frameworks, or models; marketing programs;
sales, financial, marketing, training and technical information;
product development (and proprietary product data); and any other
information, whether communicated orally, electronically, in
writing or in other tangible forms, concerning how the Protected
Parties create, develop, acquire or maintain their products and
marketing plans, target thei
