EXECUTION COPY
Ex 10.10
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") dated as of April 17, 2006 (the
"Effective Date"), among RathGibson, Inc. (the "Company") and its
affiliated
companies, RGCH Holdings Corp. ("Holdings") and RGCH Holdings LLC
(the "LLC"),
and Barry Nuss (the "Executive") (together, the "Parties").
WHEREAS, the Parties wish to establish the terms of the Executive's
employment with the Company.
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 the
Effective Date until the second anniversary of the Effective Date
(the "Initial
Term") and shall extend for successive two (2) 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 Chief
Financial Officer of the Company, Holdings, and the LLC, and shall
report
directly to the Chief Executive Officer of the Company.
3.2 Duties. The Executive will perform such executive duties
customarily performed by a Chief Financial Officer of a company in
similar lines
of business as the Company, including such duties as may reasonably
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
substantially 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 attending to personal matters or
from serving
as a member of the board of directors of civic and charitable
organizations,
provided that the foregoing do 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 $275,000 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 and will not reduce the
Executive's Base
Salary during the Term.
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).
4.3 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.
4.4 Vacation. The Executive shall be entitled to twenty (20)
business days 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.
4.5 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.
4.6 Relocation Expenses.
(a) The Company shall reimburse the Executive, within ten
(10) business days of demand, for all reasonable relocation
expenses
directly incurred by the Executive in relocation to the Janesville,
Wisconsin area including, but not limited to, (i) all costs of
transportation, lodging and meals related to no more than two (2)
trips
taken by the Executive and his spouse to the new location to search
for a
new house, (ii) the total costs of moving the Executive's household
possessions and automobiles to the new location, and (iii) an
amount equal
to the sum of the closing costs relating to the selling of his
primary
residence in New Jersey (including, but not limited to, attorney's
fees,
brokerage fees, etc.), (iv) an amount equal to the sum of the
closing costs
relating to the purchase of his new home in the Janesville,
Wisconsin area
(including, but not limited to, attorney's fees, mortgage points,
etc.) and
(v) the cost of temporary living expenses of the Executive's choice
for up
to ninety (90) days as approved by the Chief Executive Officer of
the
Company.
(b) The Company shall reimburse the Executive for taxes
payable in respect of any payments and reimbursements made to the
Executive
under Section 4.6(a) hereof by paying to the Executive additional
amounts
under this Section 4.6 so that the total amount paid ("X") equals
the
amount otherwise paid or reimbursable to the Executive under this
Section
4.6 ("Reimbursement") divided by one (1) minus the
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Executive's effective federal, state and local income, employment
and
excise tax rate (including interest and penalties thereon) ("TR")
by use of
the following formula:
X= Reimbursement.
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1 - TR
4.7 Dependent College Scholarship Program. The Company and the
Executive agree that the one-year waiting period otherwise imposed
under the
Company's dependent college scholarship program shall be waived
with respect to
the Executive's children.
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
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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 within ten (10) business
days
following such termination of employment:
(a) the Executive's accrued but unpaid Base Salary and
benefits set forth in Section 4.3, if any, to the date of
termination (the
"Accrued Benefits"); and
(b) expenses reimbursable under Section 4.6 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) within ten (10) business days following such termination
of employment, the Accrued Benefits and expenses reimbursable under
Section
4.6 incurred but not yet reimbursed to the Executive to the date of
termination;
(b) within ten (10) business days following such termination
of employment, 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
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(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, to the
extent the
Executive is eligible and subject to the terms of the plan and the
law.
6.3 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 and
expenses
reimbursable under Section 4.6 incurred but not yet reimbursed to
the Executive
to the date of termination. In addition to such amounts, 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.
6.4 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,
and the
Company, Holdings, the LLC, and Castle Harlan, Inc. shall not at
any time
(whether during or after the Term) publish or communicate to any
person or
entity any Disparaging remarks, comments or statements concerning
the Executive
and shall instruct their respective present members, partners,
directors, and
officers to not at any time publish or communicate to any person or
entity any
Disparaging remarks, comments or statements concerning the
Executive.
"Disparaging" remarks, comments or statements are those that impugn
the
character, honesty, integrity or morality or business acumen or
abilities in
connection with any aspect of the operation of business of the
individual or
entity being disparaged.
7. Restrictions and Obligations of the Executive.
7.1 Confidentiality. (a) 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
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how the Protected Parties create, develop, acquire or maintain
their products
and marketing plans, target their potential customers and operate
their retail
and other businesses. The Protected Parties invested, and continue
to invest,
considerable amounts of time and money in their process,
technology, and
know-how; obtaining and developing the goodwill of their customers;
their other
external relationships; their data systems and data bases; and all
the
information described above (hereinafter collectively referred to
as
"Confidential Information"), and any misappropriation or
unauthorized disclosure
of Confidential Information in any form would irreparably harm the
Protected
Parties. The Executive acknowledges that such Confidential
Information
constitutes valuable, highly confidential, special and unique
property of the
Protected Parties. The Executive shall hold in a fiduciary capacity
for the
benefit of the Protected Parties all Confidential Information
relating to the
Protected Parties and their businesses, which shall have been
obtained by the
Executive during the Executive's employment by the Company,
Holdings or the LLC
and which shall not be or become public knowledge (other than by
acts by the
Executive or representatives of the Executive in violation of this
Agreement).
Except as required by law, subpoena or an order of a court or
govern
