EXHIBIT 10.14
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT ("Agreement") dated
as of March 3, 2006 among RathGibson, Inc. (the "Company") and its
affiliated companies, RGCH Holdings Corp. ("Holdings") and RGCH
Holdings LLC (the "LLC"), and Nick Cray (the "Employee") (together,
the "Parties").
WHEREAS, the Parties wish to establish
the terms of the Employee's employment with the Company.
Accordingly, the Parties agree as
follows:
1.
Employment and Acceptance
. The Company, Holdings and the LLC
shall employ the Employee, and the Employee shall accept
employment, subject to the terms of this Agreement, on the "Closing
Date," as defined under the Stock Purchase Agreement by and among
the Company, the
LLC, and the current holders of all capital stock of the Company,
dated as of December 6, 2005 (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 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 Employee's employment terminates in
accordance with this Section 2 or Section 5. In the event
that the Employee'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 Employee shall serve in the capacity of
Vice President of Operations of the Company, Holdings, and the LLC,
and shall report to the Chief Executive Officer of the Company.
3.2
Duties . The Employee will have the same authority and
responsibilities as he held in his position as Vice President of
Operations of the Company prior to the Effective Date and will
perform such duties customarily performed by a vice president of
operations of a company in similar lines of business as the
Company, including such duties as may be assigned to the Employee
by the Board of Directors of the LLC (the "Board") or the Chief
Executive Officer of the Company. The Employee 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 Employee, 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 Employee'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 Employee the following during the
Term:
4.1
Base Salary . The Company will pay to the Employee an
annual base salary of $215,000, 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 Employee's Base Salary for
upward adjustment.
4.2
Bonus . The Employee shall be eligible to receive an
annual bonus ("Bonus") under a plan established by the Company in
the amount determined by the compensation committee of the Board.
4.3
Participation in Employee Benefit
Plans . The Employee
shall be entitled, if and to the extent eligible, to participate in
all of the applicable benefit plans of the Company, pursuant to the
terms of such plans. Notwithstanding the foregoing, the
Employee shall not, at any time, receive any personal loans from
the Company pursuant to any benefit plan or otherwise.
4.4
Vacation . The Employee shall be entitled to twenty (20)
days of paid vacation each fiscal year of the Company. The
carry-over of vacation days shall be in accordance with the
vacation policy set forth in the Rath Manufacturing Co., Inc.
Employee Handbook dated May 2005. The Employee 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 Employee 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 Employee's employment hereunder shall
terminate immediately upon his death.
5.2
Disability . The Company may immediately terminate the
Employee'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 Employee
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 Employee's employment, for "Cause" (as defined
below), by action of the Board, upon written notice by the Board to
the Employee identifying the act or acts constituting Cause.
For purposes of this Agreement, "Cause" means: (i) the
Employee’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 Employee’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
Employee’s conviction of or plea of nolo contendre to
any felony or other crime involving moral turpitude; (iv) the
Employee’s knowing unlawful use or possession of illegal
drugs; or (v) the Employee’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 Employee's employment without Cause at
any time without prior notice.
5.5
By the Employee
. The Employee 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 Employee'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 Employee's consent, (i)
a reduction in Base Salary or (ii) a material adverse reduction in
the Employee'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 Employee of the existence of circumstances constituting
Good Reason. Any notice of termination for Good Reason must
be given within thirty (30) days following the Employee's learning
of circumstances constituting Good Reason.
5.6
Removal from any Boards and
Position . If the
Employee'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 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
Employee Without Good Reason or Due to Death or
Disability . If (i) the
Employee's employment with the Company terminates due to his death;
(ii) the Company terminates the Employee's employment with the
Company for Cause; (iii) the Company terminates the Employee's
employment with the Company due to the Employee's Disability; or
(iv) the Employee terminates his employment with the Company
without Good Reason, the Employee or the Employee's legal
representatives (as appropriate), shall be entitled to receive the
following:
(a)
the Employee'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 4.5
incurred but not yet reimbursed to the Employee to the date of
termination.
6.2
By the Company Without Cause or By the
Employee for Good Reason .
If the Company terminates the Employee's employment without
Cause or if the Employee terminates his employment for Good Reason,
the Employee 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,
Inc., substantially in the form attached hereto as Exhibit A
:
(a)
the Accrued Benefits;
(b)
the Employee'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, to the extent the Employee 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 Employee’s employment with the
Company is earlier terminated pursuant to Section 5 of this
Agreement, the Employee’s termination of employment hereunder
(whether or not the Employee 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 Employee shall be entitled
to receive the Accrued Benefits.
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 Employee 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
Employee 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 Employee. "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
Employee .
7.1
Confidentiality
. i) During the course of the
Employee's employment by the Company (prior to and during the
Term), the Employee 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 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 Employee acknowledges that such
Confidential Information constitutes valuable, highly confidential,
special and unique property of the Protected Parties. The
Employee 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 Employee during the Employee's employment by the
Company, Holdings or the LLC (prior to and during the Term) and
which shall not be or become public knowledge (other than by acts
by the Employee or representatives of the Employee in violation of
this Agreement). Except as required by law or an order of a
court or governmental agency with jurisdiction, the Employee shall
not, during the period the Employee is employed by the Company or
at any time thereafter, disclose any Confidential Information,
directly or indirectly, to any person or entity for any reason or
purpose whatsoever, nor shall the Employee use it in any way,
except in the course of the Employee's employment with, and for the
benefit of, the Protected Parties or to enforce any rights or
defend any claims hereunder, provided that such disclosure is
relevant to the enforcement of such rights or defense of such
claims and is only disclosed in the formal proceedings related
thereto. The Employee shall take all reasonable steps to
safeguard the Confidential Information and to protect it against
disclosure, misuse, espionage, loss and theft. The Employee
understands and agrees that the Employee shall acquire no rights to
any such Confidential Information.
(b)
All files, records, documents, drawings,
specifications, data, computer programs, intangible property
(incl
