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EXHIBIT
10.7
EXECUTION
VERSION
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
This AMENDED AND RESTATED
EMPLOYMENT AGREEMENT (this “ Agreement ”) is
made as of the Effective Date (as defined below), among Metal
Services Acquisition Corp., a Delaware corporation
(“Buyer”), Tube City IMS Corporation, a Delaware
corporation (“ Company ”) and I Michael Coslov
(“ Executive ”). Any capitalized terms used
herein and not otherwise defined shall have the meanings assigned
to them in Section 4A hereof.
WHEREAS , Executive
currently serves as Chairman of the Board, and is employed as the
Chief Executive Officer of the Company pursuant to the terms of an
Employment Agreement dated as of November 18, 2004 (the
“ Current Agreement ”);
WHEREAS , upon the
closing of the transactions (the “ Closing ”)
described in a Stock Purchase Agreement, dated as of
November 10, 2006 (the “ Stock Purchase Agreement
”), by and among the Company, Mill Services Holdings, LLC, a
Delaware limited liability company, the other sellers listed on
Annex A thereto, Buyer will acquire all of the outstanding stock of
the Company; and
WHEREAS , from and
after the Closing, (the date of such Closing, the “Effective
Date”), the Company desires that Executive continue to serve
as the Chairman of the Board and Chief Executive Officer of the
Company, on the terms and subject to the conditions set forth
herein, and Executive has agreed to do so; and
WHEREAS , the Company
and Executive desire to amend and restate the Current Agreement in
its entirety, in the form of this Amended and Restated Employment
Agreement, with effect from the Effective Date;
NOW THEREFORE , in
consideration of the mutual promises made herein and other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged the Company and Executive hereby agree as
follows:
Section 1. Grant of
Restricted Stock . On the Effective Date, Executive shall
be granted shares of common stock of Buyer (the “Restricted
Stock”) pursuant to the Metal Services Acquisition Corp.
Restricted Stock Plan (“Restricted Stock Plan”). The
number of shares of Restricted Stock shall be equal to twenty
percent (20%) of the total number of shares reserved for
issuance under the Restricted Stock Plan on the Effective Date,
which shall be equal to ten percent (10%) of the total number
of shares of common stock of Buyer outstanding upon the Closing,
and such Restricted Stock shall be granted pursuant to the terms
and conditions set forth in the Restricted Stock Plan and a
Restricted Stock Agreement (as defined in the Restricted Stock
Plan). Executive shall be vested immediately as to twenty-five
percent (25%) of the shares of Restricted Stock on the
Effective Date, and fifteen percent (15%) of the shares of
Restricted Stock on each of the first five anniversaries of the
Effective Date, but only to the extent that Executive remains
continuously employed through the applicable vesting
date.
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Section 2. Terms and
Conditions of Employment Between the Company and Executive
.
2A. Employment, Duties
.
(a) The Company shall employ
Executive, and Executive hereby accepts employment with the
Company, upon the terms and conditions set forth in this Agreement
for the period beginning on the Effective Date and ending as
provided in Section 2C hereof (the “
Employment Period ”).
(b) During the Employment
Period, Executive shall serve as the Chairman of the Board, and the
Chief Executive Officer of the Company, and shall have the normal
duties, responsibilities, functions and authority of Chief
Executive Officer, subject to the power and authority of the Board.
Executive also may be appointed to serve, and agrees to serve, as
an officer and/or director of one of more subsidiaries of the
Company.
(c) During the Employment
Period, Executive shall devote his full business time and attention
to the business and affairs of the Company and its subsidiaries.
Executive may continue his historic involvement in nonprofit
activities and manage the direction of his personal and family
investments in a manner consistent with past practice, and may
serve on the board of directors of other for-profit companies
(subject to the Board of Directors’ approval of the identity
of such other company, which approval shall not be unreasonably
withheld or delayed) to the extent that such past practice or board
service does not prevent him from devoting his substantially full
business time and attention to the affairs of the Company nor
materially interfere with his ability to perform the duties of his
employment. So long as Executive is employed by the Company,
Executive shall not, without prior written consent of the Board,
accept other employment, or perform other services for
compensation.
(d) The Company shall
establish a Bonus Plan (“ Bonus Plan ”). The
performance goals under the Bonus Plan with respect to each fiscal
year shall be set in advance by the Board. The Board shall consult
with the Executive with respect to the design of the Bonus Plan,
the selection of eligible participants, the establishment of the
performance goals, and the setting of the level of target bonuses
for eligible participants.
2B. Base Salary and
Benefits
(a) During the Employment
Period, the Company shall pay Executive an annual base salary of
$1,017,640 (the “ Base Salary ”). As used
herein, references to “ Base Salary ” shall
include all subsequent increases in annual base salary during the
Employment Period. The Base Salary shall be payable in regular
installments in accordance with the Company’s general payroll
practices (as in effect from time to time).
(b) In addition to the Base
Salary, during the Employment Period, Executive will be eligible to
earn an annual bonus under the Bonus Plan, payable in accordance
with the Company’s customary practices, as determined by the
Board in its sole discretion based upon the Company’s
achievement of budgetary and other objectives set by the Board;
provided that, in determining the amount of the annual bonus, if
any, to be paid to Executive, the Board shall, in determining
whether the Company has achieved the budgetary and other goals set
by the Board, disregard any payments by the Company and its
subsidiaries to Onex (as defined below) and affiliates.
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(c) During the Employment
Period, Executive shall be entitled to participate in all of the
Company’s employee benefit programs for which senior
executives of the Company and its subsidiaries are generally
eligible. Without duplication of any employee benefits provided to
all senior executives of the Company and its subsidiaries, the
Company shall reimburse (i) Executive for the premium cost of
any life insurance policies purchased by Executive prior to the
date hereof and as scheduled on Exhibit A, (ii) club dues
for the six (6) clubs to which Executive belongs as of the
date hereof as scheduled on Exhibit A, and (iii) the cost and
expense of two (2) automobiles for use by Executive;
provided that, each benefit provided to Executive pursuant
to this subsection (c) shall (x) be on terms no less
favorable to Executive than the terms of such benefits as were
provided under the Current Agreement and (y) not be in excess
of the annual cost of such benefit provided to Executive by the
Company prior to the date hereof, subject to reasonable annual
increases to reflect increases in the cost of living.
(d) During the Employment
Period, the Company shall (without duplication of any employee
benefits provided to Executive pursuant to other provisions of this
Agreement) reimburse Executive for all reasonable business expenses
incurred by him in the course of performing his duties and
responsibilities under this Agreement which are consistent with the
Company’s policies in effect from time to time with respect
to travel, entertainment and other business expenses, subject to
the Company’s requirements with respect to reporting and
documentation of such expenses.
(e) All amounts payable or
otherwise provided to Executive pursuant to this Agreement shall be
subject to all applicable withholding and deduction
obligations.
2C. Term .
(a) The Employment Period
shall begin on the Effective Date and end on the fifth anniversary
of the Effective Date, and shall automatically be extended by one
year at each anniversary of the Effective Date on the same terms
and conditions set forth herein, as modified from time to time by
the parties hereto, unless the Company or Executive gives the other
party written notice of election not to so extend the Employment
Period at least sixty (60) days prior to any such extension
date; provided that (i) the Employment Period shall
terminate prior to such date immediately upon the death or
Disability of Executive, (ii) the Employment Period may be
terminated by the Company at any time prior to such date with or
without Cause and (iii) the Employment Period may be
terminated by Executive at any time prior to such date.
(b) If the Employment Period
is terminated (i) by the Company without Cause, or
(ii) by Executive for Good Reason, or (iii) because the
Company elects not to renew the Employment Period and as a result
Executive is no longer employed by the Company or its subsidiaries
on substantially the same terms as set forth herein, Executive
shall be entitled to receive the Base Salary through the date of
termination plus a “Severance Payment” equal to
two (2) times the Base Salary. The Severance Payment shall be
payable in equal monthly installments over a period of two
(2) years. In addition, (i) the Company shall provide
Executive with executive-level outplacement services from an
outplacement company selected by the
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Company, provided that the Company shall
not be required to spend more than Ten Thousand Dollars ($10,000)
for such services, and (ii) during the period over which the
Severance Payment is made, Executive shall be entitled to continued
health coverage on the same basis that such coverage was provided
to Executive prior to the termination of the Employment Period,
provided that coverage shall end earlier if and when Executive
becomes entitled to comparable coverage under another
employer’s health plan (and, if applicable, shall be
secondary to Medicare to the extent permitted by law). As a
condition to the Company’s obligations to make the Severance
Payments to Executive pursuant to this Section 2C (b) ,
Executive must (a) continue to comply with the restrictive
covenants contained in Section 3 , and (b) execute
and deliver a general release agreement in form and substance
reasonably satisfactory to the Company, and the Company shall
deliver a general release agreement in form and substance
reasonably satisfactory to Executive.
(c) If the Employment Period
is terminated for any reason other than (i) by the Company
without Cause or (ii) by Executive for Good Reason, or
(iii) because the Company elects not to renew the Employment
Period and as a result Executive is no longer employed by the
Company or its subsidiaries on substantially the same terms as set
forth herein, Executive shall be entitled to receive only the Base
Salary through the date of termination.
(d) Except as otherwise
provided herein, all of Executive’s rights to compensation
and benefits (including bonus compensation) which accrue or become
payable after the termination of the Employment Period shall cease
upon such termination, other than reimbursement pursuant to
Section 2B(d) . Notwithstanding the foregoing,
Executive’s continued rights with respect to outstanding
awards, including the Restricted Stock, under the Company’s
equity compensation plans shall be determined in accordance with
the terms of such plans and any related agreements, and
Executive’s continued rights under the terms of any
compensation or benefit plans (including the Company’s
vacation policy, tax-qualified and nonqualified plans, bonus plan
and welfare plans) shall be determined under the terms of such
plans. The Company may offset any amounts due and payable by
Executive to the Company or its subsidiaries against any amounts
the Company owes Executive hereunder.
Section 3. Restrictive
Covenants .
3A. Confidential
Information . Executive acknowledges that the information,
observations and data obtained by him while providing services to
the Company and its subsidiaries concerning the business or affairs
of the Company, any of its subsidiaries (“ Confidential
Informat
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