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Exhibit 10.51
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement"), dated as of October
17, 2005, is entered into by and between Steel Dynamics, Inc. (the
"Company") and Timothy R. Duke (the "Employee"). This Agreement
will be effective as of the Effective Date (as defined below). In
the event that the Merger Agreement (as defined below) is
terminated, this Agreement shall be void ab initio and of no
further force and effect. All capitalized terms used but not
defined herein shall have the meaning set forth in the Merger
Agreement.
W I T N E S S E T H :
WHEREAS, Employee is currently serving as President and Chief
Executive Officer of Steel of West Virginia, Inc., a wholly owned
subsidiary of Roanoke Electric Steel Corporation ("RESC");
WHEREAS, the Company has entered into an Agreement of
Merger and Reorganization dated October 17, 2005, by and among the
Company, RS Acquisition Corporation ("RSAC") and RESC (the "Merger
Agreement"), pursuant to which RESC will merge with and into RSAC
with RSAC as the surviving corporation in the Merger (the "Merger")
to be effective as of the Effective Time (as defined in the Merger
Agreement);
WHEREAS, the Board of Directors of the Company (the
"Board") desire to provide for the employment of Employee by the
Company from and after the date upon which the Effective Time
occurs (the "Effective Date") pursuant to the terms and conditions
contained in this Agreement; and
WHEREAS, the Employee desires to accept such employment
pursuant to the terms and conditions contained in this
Agreement;
NOW, THEREFORE, in consideration of the premises, and of
the mutual covenants and agreements hereinafter contained, the
parties hereto agree as follows:
1.
Term. The Employee’s employment under this
Agreement shall commence on the Effective Date, and, unless sooner
terminated pursuant to Section 6 below, shall continue through
December 31, 2007 (the "Term"). Continued employment beyond the
Term shall become "at-will" employment.
2.
Title. During the Term, the Employee will serve as the
President of Steel of West Virginia, Inc. and all its
subsidiaries.
3.
Duties. During the Term, and subject to the direction and
oversight of the Company’s President and Chief Executive
Officer, the Employee will be responsible for the performance of
such duties and responsibilities as are consistent with this
position, or, to the extent not inconsistent with the requirements
of Section 6(d)(ii), as may otherwise be assigned to him from time
to time by the Chief Executive Officer of the Company. The Employee
agrees to devote his full working time, attention, skill, and
energy to the duties set forth herein and to the
business of the Company, and to use his best
efforts to promote the success of the Company’s
business.
4.
Compensation.
(a)
Base Salary. During the Term, the Employee will
receive an annual base salary of $325,000 (the "Base Salary"),
payable in accordance with the Company’s normal payroll
practices as in effect from time to time. Such Base Salary shall be
subject to periodic review, and may be increased, but may not be
decreased, from time to time at the Board’s sole discretion
upon the recommendation of the Company’s Chief Executive
Officer. For all purposes under this Agreement, "Base Salary" shall
refer to Base Salary as in effect from time to time, including any
increase in Base Salary which has taken effect.
(b)
Bonus. During the Term, the Employee shall be designated
as an "Officer Participant" under and shall be eligible for cash
and stock bonuses based upon and subject to the terms and
conditions of the Steel Dynamics, Inc. Amended and Restated Officer
and Manager Cash and Stock Bonus Plan (the "Bonus Plan"), including
Section 6 thereof, as that Bonus Plan may be modified, amended or
replaced from time to time by and in the sole discretion of the
Board. A copy of the Bonus Plan is attached hereto and incorporated
herein as Exhibit A . Any bonus payable by reason of the
Bonus Plan shall be payable retroactive to January 1, 2006 for the
calendar year 2006, even if the Effective Date is subsequent to
January 1, 2006, and for the full calendar year 2007, subject,
however, to the provisions of Section 6. The Company agrees, solely
applicable to the Term of this Agreement and not to any extensions,
renewals or replacements hereof, that, notwithstanding anything to
the contrary set forth in the Bonus Plan, in the event that the
Employee’s employment is terminated prior to the expiration
of the Term or thereafter, except for Cause, all unvested stock
bonuses granted to the Employee for services rendered during the
Term, shall immediately vest and be free of any restrictions on
sale or other disposition.
(c)
Stock Options. During the Term, the Employee shall be
eligible to participate in the Steel Dynamics, Inc. 1996 Incentive
Stock Option Plan and in any successor or replacement plan thereto
(the "Stock Option Plan"), for automatic semi-annual stock option
grants ("Stock Options") pursuant to the provisions of Article VI
of the Stock Option Plan, at the $60,000 semi-annual grant value
level. A copy of the Stock Option Plan is attached hereto and
incorporated herein as Exhibit B . The Stock Option
Plan may be modified, amended or replaced from time to time by and
in the sole discretion of the Board, in accordance with the terms
of the Stock Option Plan, and, as necessary, with stockholder
approval. Each Stock Option granted to the Employee during the Term
shall provide by its terms at the time the Stock Option is
originally awarded to the Employee that the Stock Option will
remain exercisable for a period of not less than 90 days from the
date on which the Employee’s employment terminates (or, if
earlier, the last day of the term of such Stock Option), unless the
Employee’s employment is terminated by the Company for Cause
(as defined in Section 6(c)).
(d)
Other Benefits. Employee will be eligible for those other
employee benefits, (including, but not limited to health insurance,
vacation pay, 401 (k) participation, profit sharing and any other
retirement savings plan or welfare benefit plan) made available by
the Company to
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similarly situated executives of the Company, as
such plans may be in effect or as amended from time to
time.
(e)
Reimbursement of Business Expenses. The Company will
reimburse the Employee for all reasonable and properly documented
business related expenses, in accordance with Company policies and
practices in effect from time to time, incurred or paid by him in
connection with the performance of his duties hereunder.
(f)
Withholdings. All payments made under this Agreement
shall be subject to any and all federal, state and local taxes and
other withholdings to the extent required by applicable law.
5.
Agreement to Maintain Confidentiality.
(a)
Recognition of Company’s Business Interests.
Employee acknowledges that the Company and its affiliates compete
throughout the Americas in the manufacture, marketing, research,
sale and distribution of various steel and steel related products,
including but not limited to flat rolled steel, structural steel,
steel bars and shapes, and steel joists, girders and decking
systems (the "Steel Business"). As part of Employee’s
conditions of employment, and in connection with his prior
employment with RESC, he has been, and, with the Company, will be
provided significant "Confidential Information," as defined in
Section 5(b), and will have direct contact with the Company’s
customers, as well as the customers of his predecessor employer, in
which capacity he is expected to develop a good relationship with
all such customers and prospective customers. Employee acknowledges
that the Company’s competitors would obtain an unfair
advantage if Employee disclosed Confidential Information to a
competitor or used Confidential Information on behalf of a
competitor.
(b)
Definition of Confidential Information. As used in
this Agreement, Confidential Information shall include, without
limitation, Company financial and budgetary information and
strategies; Company plant design, specifications and layouts;
Company equipment design specifications and layouts; Company
product design and specifications; Company manufacturing processes,
procedures and specifications; Company data processing or other
computer programs; Company research and development projects;
Company marketing information and strategies; Company customer
lists; Company vendor lists; Company information about customer
preferences and buying patterns; Company information about
prospective customers, vendors or business opportunities; Company
pricing information or methodologies; information concerning the
Company’s costs and cost structure; information about the
Company’s operations analyses or internal accounting systems;
information about the Company’s overall corporate business
strategy; and information concerning Company technological
innovations used in its business. For purposes of this Agreement,
all information that would constitute Confidential Information
within the meaning of this Agreement but which was acquired by
Employee during his employment with RESC shall be deemed to
constitute the Company’s Confidential Information
hereunder.
For purposes of this Agreement, information shall not be deemed
to be "Confidential Information" to the extent that the information
(i) is in the public domain, or hereafter becomes generally known
or available through no action or omission on the part of Employee
in violation
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of this Agreement, (ii) is furnished to any
person by the Company without restriction on disclosure, (iii)
becomes known to the Employee from a source other than the Company,
without a breach of any obligation hereunder, (iv) is required to
be disclosed by law (in which case the Employee will give prompt
written notice to the Company of any such required disclosure to
the extent such notice would not be prohibited by law), or (v) is
disclosed after written approval for disclosure has been granted by
the Company.
(c)
Agreement to Maintain Confidentiality. Except as may be
required to perform the Employee’s duties under this
Agreement or as required by applicable law, Employee shall not
disclose to others or use, for his own benefit or for the benefit
of any other person, entity, firm or company, any Confidential
Information. The Employee specifically acknowledges that, whether
compiled or created by Employee, the Company or any of its
affiliates or customers, the Confidential Information as
contemplated herein derives independent economic value from not
being readily known to or ascertainable by proper means by others
who could obtain economic value from the disclosure or use of the
Confidential Information, whether or not such information
independently constitutes "trade secrets" within the meaning of the
Uniform Trade Secrets Act or comparable legislation as may be in
effect and applicable from time to time. Employee also acknowledges
that reasonable efforts have been put forth by his prior employer,
RESC, and by the Company, and will continue to be put forth by the
Company, to maintain the secrecy of the Confidential Information,
all of which is and shall remain the Company’s sole
property.
(d)
Scope and Duration. The Company specifically
acknowledges that the restrictions in this Section 5 on the
Employee’s use or disclosure of Confidential Information do
not, and shall not be construed to, restrict in any way the
Employee’s ability to be employed by or otherwise associated
with any other person, entity, firm or company engaged in the Steel
Business following the employee’s termination of employment
with the Company. The Employee’s obligations under this
Section 5(c) will survive termination of Employee’s
employment hereunder.
6.
Termination of Employment.
(a)
Termination Due to Death. Employee’s employment with
the Company will automatically terminate immediately upon his
death, and Employee’s estate will be entitled to (i) any
earned but unpaid Base Salary to the date of termination, (ii) any
pro rata bonus (as and when determined and as otherwise payable
under the Bonus Plan) for the partial calendar year to the date of
Employee’s death, (iii) unpaid vacation and unreimbursed
expenses payable hereunder, and (iv) the amount set forth in
Column A of Schedule 1 attached hereto and
incorporated by reference herein, corresponding to the line
representing the calendar month in which Employee’s death
occurred. All payments shall be made within 30 days of
Employee’s termination of employment, except for the pro rata
bonus, which shall be paid within 2½ months of the end of
the fiscal year in which the termination occurred. Except for the
foregoing payment amounts or as otherwise contemplated by the
provisions of Section 6(g), Employee shall be entitled to no other
compensation, benefits or payments.
(b)
Termination Due to Disability. If, during the Term, the
Employee incurs a "Disability" as defined herein, the Company, in
the exercise of its sole discretion, shall be
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entitled to terminate Employee’s employment
hereunder, immediately upon written notice to the Employee of such
decision, subject, however, to the payment to the Employee of (i)
any earned but unpaid Base Salary to the date of termination, (ii)
any pro rata bonus (as and when determined and otherwise payable
under the Bonus Plan) for the partial calendar year to the date of
such notice, (iii) unpaid vacation and unreimbursed expenses
payable hereunder, and (iv) the amount set forth in
Column A of Schedule 1 corresponding to the line
representing the calendar month in which termination for Disability
hereunder is determined to have occurred. For purposes of this
Agreement, "Disability" shall mean a physical or mental impairment
that entitles the Employee to receive benefits under the
Company’s long-term disability plan. The Employee shall be
deemed "Disabled" for purposes of this Agreement, and his
employment with the Company shall terminate, upon receipt by the
Company of written notification from the administrator of the
Company’s long-term disability plan that the administrator
has determined that the Employee is disabled for purposes of that
plan and entitled to the payment of benefits thereunder. All
payments shall be made within 30 days of
Employee’s
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