EMPLOYMENT/NON-COMPETITION AGREEMENT
THIS
AGREEMENT, is made and entered into this 26th
day of January 2006, by and between A. M. CASTLE & CO., a
Maryland corporation, with offices located at 3400 North Wolf Road,
Franklin Park, Illinois 60131 (the “Company”) and
MICHAEL GOLDBERG who resides at 8 Black Oak Road, North Oaks,
Minnesota 55127 (“Executive”).
WHEREAS,
the Company desires to employ Executive and Executive desires to be
employed by the Company, all upon the terms and conditions set
forth herein.
NOW,
THEREFORE, in consideration of the mutual agreements herein set
forth, the parties agree as follows:
1.
Employment. The Company hereby employs Executive, and
Executive hereby accepts such employment with the Company, upon all
the terms and conditions set forth below. Executive represents and
warrants that he has full power and authority to enter into this
Employment Agreement and that he is not restricted in any manner
whatsoever from performing his duties hereunder.
2.
Employment Term. Unless earlier terminated as hereinafter
provided, the term of Executive’s employment under this
Agreement shall commence on the date it is fully executed by all
parties and shall continue from year to year until terminated as
hereinafter provided (“Employment Term”).
EXCEPT
AS OTHERWISE PROVIDED IN THIS AGREEMENT, THE COMPANY AND EXECUTIVE
ACKNOWLEDGE THAT EXECUTIVE’S EMPLOYMENT IS AT WILL AND CAN BE
TERMINATED BY EITHER PARTY AT ANY TIME WITH OR WITHOUT CAUSE: If
Executive’s employment terminates for any reason, with or
without cause, Executive shall not be entitled to any payments,
benefits, damages, awards or compensation other than as provided in
either this Agreement or, if applicable, the Change of Control
agreement of even date herewith between the Company and Executive
(the “Change in Control Agreement”).
3.
Position, Duties and Location.
a.
Chief Executive Officer. The Company shall employ Executive
in the position of and with the titles of President and Chief
Executive Officer. Executive shall have the responsibilities and
duties as are commensurate with the position of president and chief
executive officer of an entity comparable to the Company including,
but not limited to, the powers and duties set forth in the Bylaws
of the Company for such office. Executive shall report solely and
directly to (i) the Company’s Board of Directors (the
“Board”) or (ii) a director or group of directors
designated by the Board. The Board may assign other duties and
rights to Executive from time to time. The Board shall have the
right to modify the responsibilities of Executive from time to time
as the Board may deem necessary or appropriate. Executive shall be
provided with an office, secretarial services, and other services
commensurate with the status of his position.
b.
Manner of Employment. Executive shall faithfully, diligently
and competently perform his responsibilities and duties as
President and Chief Executive Officer. Executive shall devote his
exclusive and full efforts and time to the Company. This
Section 3, however, shall not preclude Executive, outside
normal business hours, from engaging in appropriate civic or
charitable activities, which are not in conflict with the
Company’s civic or community activities or adverse to the
policies or interests of the Company or, with prior approval from
the Board, from serving as a member of the board of directors of
another company, as long as such activities do not unduly interfere
or conflict with his responsibilities to the Company.
c.
Board. Subject to approval by the shareholders of the
Company, the Company agrees to take all corporate actions necessary
for the appointment or election of Executive to the Board within a
reasonable period of time from the date of this Agreement. If
elected to the Board of the Company, Executive shall have all the
duties and responsibilities as are commensurate with the position
of director. However, Executive shall receive no additional
compensation for serving as a director of the Company.
d.
During the Employment Term, Executive’s principal office and
principal place of employment, shall be within the Chicago
metropolitan area.
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a.
Base Compensation. The Company shall pay Executive, as
compensation for his services, base compensation in the amount of
Four Hundred Fifty Thousand Dollars ($450,000) per year, subject to
annual reviews and increases at the sole discretion of the Board
(“Base Compensation”). Base Compensation shall be paid
periodically in accordance with normal Company payroll practices.
After any such increase, the term “Base Salary” as
utilized in this Agreement shall thereafter refer to the increased
amount. Base Salary shall not be reduced at any time without the
express written consent of Executive unless as part of a Company
wide austerity program; provided, however, that in no event shall
it be reduced below $450,000.
b.
Signing Bonus . The Company shall pay Executive a signing
bonus of Fifteen Thousand Dollars ($15,000) as soon as practicable
after his signing of this Agreement and of the Change in Control
Agreement. Such bonus shall be reduced by applicable
taxes.
c.
Additional Compensation. Executive shall participate in the
management incentive/bonus plan established by the Company for
management and executive employees. Executive’s participation
shall provide for a target incentive equal to fifty percent (50%)
of his then current Base Compensation with a payout range of Zero
percent (0%) to a maximum incentive equal to One Hundred percent
(100%) of his Base Compensation, depending on performance to
targets established by the Board.
Furthermore,
with respect to calendar year 2006, Executive’s incentive
compensation/bonus shall be not less than Two Hundred Twenty Five
Thousand Dollars ($225,000) and, in determining the
Executive’s incentive compensation/bonus, the Executive shall
be treated as having performed services for the Company from
January 1, 2006 through the date of this Agreement.
Executive
shall be paid his management incentive compensation/bonus when
other management employees of the Company are paid their management
incentive compensation/bonuses, but in no event later than the
fifteenth day of the third month after the end of the performance
period for which it is attributable.
d.
Performance Stock Grant. Executive shall be granted
performance shares in the amount of Forty Five Thousand (45,000)
shares for the performance period ending December 31, 2007
under the Company’s 2005 Performance Stock Equity Plan. All
terms and payouts under this subparagraph shall be covered by the
provisions of the Company’s 2005 Performance Stock Equity
Plan. The Executive shall be given performance stock grants or
other forms of equity based incentive compensation, if any, for
performance periods thereafter in an amount to be determined by the
Board or its delegate
5.
Employment Benefits. In addition, Executive shall be
entitled to the following benefits during the Employment
Term.
a.
No less than four (4) weeks paid vacation per calendar year to
be taken at such reasonable times as requested by
Executive.
b.
Prompt reimbursement for all reasonable out-of-pocket business
expenses incurred by Executive during the regular performance of
his duties for the Company, provided Executive provides the Company
with adequate documentation of such expenses in accordance with the
Company’s policies.
c.
Participation in any insurance or other employee benefit plans or
programs maintained by the Company for its employees on
substantially the same terms and conditions as such benefits are
provided or made available to management employees of the Company,
such as family health care, pension and 401(k) plans, subject to
any general eligibility and participation provisions set forth in
such plans; provided, however, that this Agreement shall be the
sole source of severance benefits paid by the Company with respect
to any termination of Executive’s employment covered by this
Agreement.
d.
Use of a Company owned or leased automobile at a class Five
(5) as set forth in the Company’s Automobile
Policy.
e.
Payment by the Company on behalf of Executive of the initiation
fees, dues and assessments of membership at one luncheon club
located in the Chicago metropolitan area that shall be agreed upon
by the parties acting in good faith.
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f.
Payment by the Company on behalf of the Executive of two-thirds of
the initiation fee, and all of the dues and assessments of
membership at one country club in the Chicago metropolitan area
that shall be agreed upon by the parties acting in good faith;
provided, however, that Company’s contribution towards any
equity membership shall be returned to the Company immediately
following the Executive’s receipt of the proceeds upon
cancellation, sale or other disposition of such membership
interest.
g.
Relocation expenses in selling Executive’s home and moving
from North Oaks, Minnesota to the Chicago metropolitan area in
accordance with the Company’s Employee Relocation Policy. In
addition, Executive shall be entitled to (i) rental costs for
an appropriate apartment in the Chicago metropolitan area, mutually
agreed upon by the parties acting in good faith, through the
earlier of the date he moves his primary residence to the Chicago
metropolitan area or September 30, 2006, (ii) reasonable
costs for temporary living expenses, including meals and lodging,
pending the rental of the apartment referenced in clause (i), and
(iii) from the effective date of this Agreement through the
date referenced in (i) one round trip every week between
Minneapolis, Minnesota and Chicago, Illinois for Executive, or, at
Executive’s election, Executive’s spouse (including
business-class airfare, taxis, meals and lodging). All taxable
payments or reimbursements required pursuant to this Section 5(g)
that do not have a corresponding deduction shall include an
additional payment equal to 39% of any such taxable payment or
reimbursement. In the event of a subsequent relocation of the
Company’s principal offices to a new location, to which he
consents, Executive shall be reimbursed for expenses for relocation
of his residence on the same basis as provided above in this
Section 5(g).
6.
Termination and Severance Benefits.
a.
Death. The death of Executive shall automatically terminate
the Company’s obligations hereunder, provided however, the
Company shall pay to Executive’s estate or his designated
beneficiary (i) Executive’s Base Compensation through
the date of termination, (ii) a pro-rata Management Incentive
Compensation/Bonus for the year of death, based on the Target Bonus
for the year of death, payable promptly following the date of
termination but in no event later than the fifteenth day of the
third month after the date of termination, (iii) with respect
to any granted but not awarded Performance Stock or other long term
incentive plan, the amount of shares or dollar amount payable to
Executive as of the end of the performance cycle shall be the
target amount multiplied by a fraction, the numerator of which is
the number of whole completed months of service completed by
Executive and the denominator of which is the total number of
months in the performance cycle, except that, the number of shares
payable under the 2005 Performance Stock Equity Plan shall be
45,000 multiplied by a fraction, the numerator of which shall be
the number of months of completed service by the Executive and the
denominator of which shall be 24, with the Executive treated as
having performed services for the Company from January 1,
2006. The resulting product shall be paid to Executive’s
estate or his designated beneficiary as soon as practicable
following Executive’s termination of employment but in no
event later than the fifteenth day of the third month after the
date of termination, (iv) accrued vacation pay through the
date of termination or other amounts earned, accrued or owing to
Executive but not yet paid as of such date, and (v) other
benefits, if any, in accordance with applicable plans, programs and
arrangements of the Company other than Company severance
plans.
b.
Disability. If Executive is unable to render services of
substantially the kind and nature, and to substantially the extent,
required to be rendered by Executive hereunder due to illness,
injury, physical or mental incapacity or other disability, for
sixty (60) consecutive days or shorter periods aggregating at
least one hundred eighty (180) days within any twelve
(12) month period (“Disability”),
Executive’s employment may be terminated by Company and
Executive shall be entitled to (i) Base Compensation through
the date of termination, (ii) a pro-rata Management Incentive
Compensation/Bonus, for the year of termination, based on the
Target Bonus for the year of termination, payable promptly
following the date of termination but in no event later than the
fifteenth day of the third month after the date of termination,
(iii) with respect to any granted but not awarded Performance
Stock or other long term incentive compensation plan, the amount or
shares or dollar amount payable to Executive as of the end
of
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the performance cycle shall be the target amount multiplied by a
fraction, the numerator of which is the number of whole completed
months of service completed by Executive and the denominator of
which is the total number of shares payable under the 2005
Performance Stock Equity Plan shall be 45,000 multiplied by a
fraction, the numerator of which shall be the number of months of
completed service by the Executive and the denominator of which
shall be 24, with the Executive treated as having performed
services for the Company from January 1, 2006. The resulting
product shall be paid to Executive as soon as practicable following
Executive’s termination of employment, (iv) accrued
vacation pay through the date of termination or other amounts
earned, accrued or owing to Executive but not yet paid as of such
date, (v) disability benefits in accordance with the long-term
disability program then in effect for management employees of the
Company, (vi) continued participation for twelve
(12) months in all medical, dental, hospitalization and life
insurance coverages and all other employee welfare plans and
programs in which he and his eligible dependents were participating
on the date of termination at the Company’s sole expense,
provided, however, that if any of the benefits plans do not permit
his continued participation, the Company shall provide him with the
economic equivalent on an after-tax basis and provided, further,
that Executive’s right to COBRA continuation coverage under
any Company group health plan shall be reduced by the number of
months of continued coverage provided pursuant to this paragraph,
and (vii) other benefits, if any, in accordance with
applicable plans, programs and arrangements of the Company other
than Company severance plans.
c.
Resignation. If Executive resigns his employment during the
Employment Term in a situation to which Section 6(e) below does not
apply, the Company shall have no liability under this Agreement to
Executive, except that Executive shall be entitled to (i) Base
Salary through the date of termination, (ii) accrued vacation
pay through the date of termination or other amounts payable to
Executive as of the date of termination but not yet paid as of such
date and (iii) other benefits, if any, in accordance with
applicable plans, programs and arrangements of the Company (other
than Company severance plans) applicable to employees who
voluntarily resign. A r
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