|
Exhibit 10.10
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this
"AGREEMENT") is entered into as of the date set forth below and
effective as of the Effective Date (defined below), by and between
Haynes International, Inc. (the "COMPANY"), a Delaware corporation,
and Francis J. Petro (the "EXECUTIVE").
PRELIMINARY STATEMENTS
WHEREAS, the Company and the Executive previously entered into
that certain Executive Employment Agreement, dated as of January 1,
2003 (the "EMPLOYMENT AGREEMENT");
WHEREAS, the Company and the Executive previously entered into
that certain Severance Agreement (the "SEVERANCE AGREEMENT") dated
as of January 29, 2000 whereby the rights and obligations of the
Executive in the event of a termination associated with a change in
control of the Company were set forth;
WHEREAS, on March 29, 2004, the Company filed a voluntary
petition for bankruptcy under Chapter 11 of Title 11 of the U.S.
Code (11 USC Section 101, ET. SEQ.) in the U.S. Bankruptcy Court
for the Southern District of Indiana (the "BANKRUPTCY"); and
WHEREAS, the Company and the Executive desire to amend and
restate the Employment Agreement on the terms and conditions set
forth herein such that this Agreement shall supersede and replace
both the Employment Agreement and the Severance Agreement and shall
address the Executive’s employment and termination of
employment with the Company following the Company’s emergence
from Bankruptcy.
NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements contained herein and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto hereby agree as
follows:
AGREEMENT
SECTION 1.
EMPLOYMENT.
(a)
PRIOR AGREEMENTS. Effective as of the effective date
of the Company’s plan of reorganization (the "PLAN OF
REORGANIZATION") as filed with the U.S. Bankruptcy Court for the
Southern District of Indiana (the "EFFECTIVE DATE"), the
Executive’s employment with the Company and benefits upon a
termination of employment shall be governed by this Agreement,
which restates and supersedes each of the Employment Agreement and
the Severance Agreement.
(b)
OFFER AND ACCEPTANCE. During the Employment Term (as
defined in SECTION 1(d) below), the Company agrees to employ the
Executive in the position of President and Chief Executive Officer
of the Company upon the terms and subject to the conditions set
forth herein, and the Executive agrees to remain in the employ of
the Company on such terms and conditions.
(c)
DUTIES. The Executive’s duties shall include
those duties that are consistent with his position as President and
Chief Executive Officer of the Company as well as those reasonably
assigned to him from time to time, in good faith, by the Board of
Directors of the Company (the "BOARD"). The Executive shall (i)
devote his working hours, on a full-time basis, to his duties under
this Agreement; (ii) faithfully, industriously and loyally serve
the Company; (iii) comply in all material respects with the lawful
and reasonable directions and instructions given to him by the
Board; and (iv) use his reasonable best efforts to promote and
serve the interests of the Company. The Executive shall comply in
all material respects with all applicable laws, rules and
regulations relating to the performance of the Executive’s
duties and responsibilities hereunder. The Executive agrees to
serve as (i) a member of the Board and on any of the board of
directors of any subsidiary or affiliate of the Company, and (ii)
as an officer of any subsidiary or affiliate of the Company,
without any additional compensation while he is employed by the
Company. Upon termination of the Executive’s employment by
the Company for any reason, the Executive shall immediately resign
from the Board and any other position as a member of the board of
directors or as an officer of any such subsidiary or affiliate of
the Company.
(d)
EMPLOYMENT TERM. The Executive’s employment by
the Company under this Agreement shall commence on the Effective
Date and shall continue thereafter and shall terminate on September
30, 2007 (the "EMPLOYMENT TERM"), unless renewed by a subsequent
written agreement of the parties. The Executive’s employment
by the Company shall be subject to termination at any time during
the Employment Term as provided in subsection (f) of this SECTION
1. As used herein, the term "EMPLOYMENT TERM" shall mean the actual
period of time during which the Executive is employed by the
Company under the terms and conditions of this
Agreement.
(e)
COMPENSATION AND BENEFITS. During the Employment
Term, the Company shall pay and provide the following compensation
and other benefits to the Executive as full compensation for all
services rendered by the Executive as an employee of the Company
under the terms and conditions of this Agreement. All payments made
to the Executive hereunder shall be subject to appropriate payroll
deductions and other withholdings required by law.
-
-
(i)
ANNUAL SALARY. During the Employment Term, the
Company shall pay to the Executive, in accordance with the then
prevailing payroll practices of the Company, a base salary (the
"ANNUAL SALARY") at the annual rate of Four Hundred Eighty Thousand
Dollars ($480,000) per year.
(ii)
BONUSES. With respect to each full fiscal year
during the Employment Term, the Executive shall be eligible to
receive an annual bonus based upon the achievement by the Company
of specific performance requirements (e.g. EBITDA benchmarks’
and/or working capital targets) which shall be determined by the
Board in its sole and absolute discretion prior to or at the
commencement of the applicable fiscal year (the "BONUS"). The
actual amount of the Bonus shall be equal to a percentage of the
Annual Salary in effect as
2
-
-
of September 30th of such fiscal year and shall
be determined by the Board in its sole and absolute discretion
prior to or at the commencement of the applicable fiscal year.
Notwithstanding the foregoing, for the 2004 fiscal year only, the
target amount for the Bonus shall be sixty percent (60%) of the
Annual Salary in effect as of September 30, 2004; provided,
however, Executive shall be eligible to receive a minimum Bonus in
an amount equal to thirty-five percent (35%) of such Annual Salary
and a maximum Bonus equal to one hundred twenty percent (120%) of
such Annual Salary, based upon the achievement of the performance
requirements, as determined by the Board in its sole and absolute
discretion. The Bonus, if earned, shall be paid to the Executive by
the Company no later than February 1 of the following calendar
year.
(iii)
BENEFITS. The Executive shall be eligible to
participate in all employee health and welfare benefit plans in
which senior executives of the Company are entitled to participate,
but participation shall be subject to all of the terms and
conditions) of such plans applicable to all such senior executives,
including all waiting periods, eligibility requirements,
contributions, exclusions and other similar conditions or
limitations. In the case of any disability plan, the Company agrees
that such plan will provide the benefits contemplated by SECTION
1(e)(iv) or in lieu of such plan participation, the Company will
provide to the Executive the disability insurance coverage
contemplated by SECTION 1(e)(iv).
(iv)
INSURANCE. The Executive shall be entitled to
receive long-term disability insurance coverage and the amount of
the benefit payments under such insurance coverage shall be not
less than sixty percent (60%) of the Annual Salary then in effect
(the "DISABILITY INSURANCE"). The Company shall pay all premiums
related to the Disability Insurance as long as the Executive is
employed by Company hereunder. In addition, the Company shall
provide the Executive with a life insurance policy in a face amount
equal to five (5) times the Annual Salary then in effect (the "LIFE
INSURANCE"), which policy shall be convertible to an individual
policy at the election of the Executive upon termination of the
Executive’s employment by the Company. The Company shall be
the owner of the Life Insurance and shall pay all premiums related
thereto prior to termination of the Executive’s employment by
the Company.
(v)
EXPENSES. The Company shall reimburse the Executive,
in accordance with the then prevailing reimbursement practices of
the Company, for all reasonable and customary business expenses
incurred by the Executive in connection with his employment by the
Company, including, but not limited to, all reasonable and
customary travel-related expenses incurred in connection with
periodic trips to Syracuse, New York, provided, in any case, that
the Executive complies with the standard reporting and
reimbursement policies as may be established by the Company from
time to time.
(vi)
VACATION. The Executive shall be entitled to five
(5) weeks of vacation, measured on a calendar year basis. The
Executive shall schedule vacation periods at reasonable times in
accordance with the Company’s vacation policy for senior
executives. The Executive shall accrue and receive full
compensation and benefits during his vacation periods. Unused
vacation leave time shall not entitle the Executive to any
additional compensation and may not be carried over to a subsequent
calendar year.
(vii)
SERP. The Executive shall be entitled to participate
in the Haynes International, Inc. Supplemental Executive Retirement
Plan on the terms and conditions
3
-
-
as set forth in the Participation Agreement
entered into by and between the Executive and the Company dated
December 13, 2002 as amended as of the date hereof (the
"SERP").
(viii)
COMPANY CAR. The Company shall provide the Executive
with the use of an automobile owned or leased by the Company at its
expense for Company-related purposes (the "COMPANY CAR"). The
Company shall pay or reimburse the Executive for all expenses
incurred in connection with the Executive’s use of the
Company Car, including, but not limited to, insurance, gasoline,
registration taxes and maintenance. The Company Car shall be a
Buick Park Avenue or an automobile of a similar class. The
Executive agrees that the use of the Company Car for
personal-related matters will result in imputed income to the
Executive and at the end of each calendar year, the Company and its
accountants shall reasonably determine the amount of such income to
be included in the Executive’s compensation in connection
with the personal use of the Company Car and the Executive agrees
that he shall be responsible for any and all taxes imposed on such
imputed income.
(ix)
COUNTRY CLUB MEMBERSHIP. The Company shall reimburse
the Executive for all regular monthly membership dues and
business-related charges incurred by the Executive in connection
with his membership at a country club. The Executive agrees that he
shall be responsible for any and all taxes imposed on the
reimbursements made pursuant to the preceding sentence.
(x)
OPTIONS. As of the Effective Date, the Company shall
establish a long-term equity incentive plan in which the Executive
is eligible to participate (the "LTIP"). During the Employment
Term, the Executive shall remain eligible to participate in the
LTIP pursuant to the terms and conditions set forth
therein.
(xi)
DEATH BENEFIT PLAN. The Executive shall be eligible
to participate in the Haynes International, Inc. Death Benefit
Plan, as amended, pursuant to the terms and conditions set forth in
such plan.
(f)
TERMINATION OF EMPLOYMENT. Subject to the terms of
Section 1(g) below, the Executive’s employment by the Company
may be terminated as follows:
-
-
(i)
TERMINATION UPON THE EXPIRATION OF THE EMPLOYMENT
TERM. Unless otherwise agreed to in writing by the Company and the
Executive, the Executive’s employment shall terminate on
September 30, 2007 unless terminated earlier pursuant to this
SECTION 1(f). In the event that the Executive’s employment
terminates upon the expiration of the Employment Term, then the
Executive shall be entitled to receive the compensation and
benefits set forth in SECTION 1(g)(i).
(ii)
TERMINATION FOR CAUSE. The Company may immediately
terminate, at any time, Executive’s employment by the Company
for "Cause." A termination for "Cause" means a termination by
reason of the Board’s good faith determination that the
Executive (i) continually failed to substantially perform his
duties with the Company (other than a failure resulting from the
Executive’s medically documented incapacity due to physical
or mental illness) including, without limitation, repeated refusal
to follow the reasonable
4
-
-
directions of the Board, knowing violation of the
law in the course of performance of the Executive’s duties
with the Company, repeated absences from work without a reasonable
excuse, or intoxication with alcohol or illegal drugs while on the
Company’s premises during regular business hours, (ii)
engaged in conduct which constituted a material breach of SECTION 2
or SECTION 3 of this Agreement, (iii) was indicted (or equivalent
under applicable law), convicted of, or entered a plea of nolo
contendere to the commission of a felony or crime involving
dishonesty or moral turpitude, or (iv) engaged in conduct which is
demonstrably and materially injurious to the financial condition,
business reputation, or otherwise of the Company or its
subsidiaries or affiliates, or (v) perpetuated a fraud or
embezzlement against the Company or its subsidiaries or affiliates,
and in each case the particular act or omission was not cured, if
curable, in all material respects by the Executive within thirty
(30) days after receipt of written notice from the Board which
shall set forth in reasonable detail the nature of the facts and
circumstances which constitute Cause. Notwithstanding the
foregoing, the Executive shall not be deemed to have been
terminated for Cause unless there shall have been delivered to the
Executive a copy of a resolution duly adopted by the Board. If the
Company has reasonable belief that the Executive has committed any
of the acts described above, it may suspend the Executive (with or
without pay) while it investigates whether it has or could have
Cause to terminate the Executive. The Company may terminate the
Executive for Cause prior to the completion of its investigation;
provided, that, if it is ultimately determined that the Executive
has not committed an act which would constitute Cause, the
Executive shall be treated as if he were terminated without
Cause.
(iii)
TERMINATION WITHOUT CAUSE. The Company may, at any
time, terminate the Executive’s employment by Company without
Cause by providing prior written notice thereof to the
Executive.
(iv)
RESIGNATION FOR GOOD REASON. The Executive may
terminate his employment by the Company for Good Reason (as defined
below) by providing written notice thereof to the Company (the
"RESIGNATION NOTICE") at least forty-five (45) days prior to the
effective date of the resignation, which notice shall set forth in
reasonable detail the nature of the facts and circumstances which
constitute Good Reason and the Company shall have thirty (30) days
after receipt of the Resignation Notice to cure in all material
respects the facts and circumstances which constitute Good Reason.
For purposes of this Agreement, "GOOD REASON" shall mean the
occurrence, during the Employment Term, of any of the following
actions or failures to act, but in each case only if it is not
consented to by the Executive in writing: (a) a material adverse
change in the Executive’s duties, reporting responsibilities,
titles or elected or appointed offices as in effect immediately
prior to the effective date of such change; (b) a material
reduction by the Company in the Executive’s Base Salary or
annual bonus opportunity in effect immediately prior to the
effective date of such reduction, not including any reduction
resulting from changes in the market value of securities or other
instruments paid or payable to the Executive; or (c) any change of
more than 50 miles in the location of the principal place of
employment of the Executive immediately prior to the effective date
of such change. For purposes of this definition, none of the
actions described in clauses (a) and (b) above shall constitute
"Good Reason" with respect to the Executive if it was an isolated
and inadvertent action not taken in bad faith by the Company and if
it is
5
-
-
remedied by the Company within thirty (30) days
after receipt of written notice thereof given by the Executive (or,
if the matter is not capable of remedy within thirty (30) days,
then within a reasonable period of time following such thirty (30)
day period, provided that the Company has commenced such remedy
within said thirty (30) day period); provided that "Good Reason"
shall cease to exist for any action described in clauses (a) and
(b) above on the sixtieth (60th) day following the later of the
occurrence of such action or the Executive’s knowledge
thereof, unless the Executive has given the Company written notice
thereof prior to such date.
(v)
RESIGNATION WITHOUT GOOD REASON. The Executive may,
at any time, terminate the Executive’s employment by the
Company without Good Reason by providing thirty (30) days’
prior written notice thereof to the Company.
(vi)
DEATH; DISABILITY OR RETIREMENT. The
Executive’s employment shall terminate immediately upon the
Executive’s death, Disability, or Retirement (each as defined
below). For purposes of this Agreement, "DISABILITY" means the
Executive is totally and permanently disabled as defined in the
Haynes International, Inc. Pension Plan and "RETIREMENT" means a
resignation by the Executive after having reached age fifty-five
(55), but in no event prior to September 30, 2007.
(g)
EFFECT OF TERMINATION.
-
-
(i)
TERMINATION UPON THE EXPIRATION OF THE EMPLOYMENT
TERM. Upon the termination of the Executive’s employment
pursuant to SECTION 1(f)(i), the Executive will be entitled to (A)
payment of that portion of the Executive’s then effective)
Annual Salary which has been earned but not yet paid through and
including the last day of the Executive’s employment (the
"TERMINATION DATE"); (B) payment of any Bonus earned by the
Executive under the terms and conditions of this Agreement prior to
the Termination Date that remains unpaid; (C) reimbursement of any
reimbursable business expenses under SECTION 1(e)(v), which were
incurred by the Executive through and including the Termination
Date; (D) continuation of benefits to which the Executive is
entitled under SECTION L(e)(iii) and SECTION 1(e)(iv) through and
including the Termination Date and; (E) the SERP that the Executive
is entitled to under SECTION 1(e)(vii). In addition, any unvested
stock options held by the Executive shall terminate immediately and
any vested stock options held by the Executive shall remain
exercisable for ninety days (90) following the Termination Date,
but in no event later than the expiration date of such stock option
as specified in the applicable grant letter.
(ii)
TERMINATION FOR CAUSE OR RESIGNATION WITHOUT GOOD
REASON. Upon the Company’s termination of the
Executive’s employment for Cause pursuant to SECTION 1(f)(ii)
or the Executive’s resignation without Good Reason pursuant
to SECTION L(f)(v), Executive will be entitled to (A) payment of
that portion of the E
|
