SEPARATION
AGREEMENT AND GENERAL RELEASE
RathGibson, Inc. (the
“ Company ”), and its affiliated companies, RGCH
Holdings Corp. (“ Holdings ”) and RG Tube
Holdings LLC (f/k/a RGCH Holdings LLC) (the “ LLC
”), and Harley B. Kaplan (the “ Executive
”) (together, the “ Parties ”) entered
into an employment agreement, dated as of February 7, 2006, as
amended (the “ Employment Agreement ”).
Any capitalized terms used but not defined herein have the
respective meanings set forth in the Employment Agreement.
The Parties hereby agree that this Separation Agreement and
General Release (this “ Agreement ”) sets
forth their complete agreement and understanding regarding the
termination of the Executive’s employment with the
Company.
1.
Separation Date;
Consulting Period; Resignation .
(a)
The Executive’s
employment with the Company will terminate effective August 6,
2008 (the “ Separation Date ”). The
Executive shall, within thirty (30) days after the Separation Date,
return all property belonging to the Company, Holdings, the LLC,
and any of their respective subsidiaries (collectively,
the “ Affiliates ”). Except as
specifically provided below, the Executive shall not be entitled to
receive any benefits of employment following the Separation Date.
(b)
During the time period
from the Separation Date until September 15, 2008 (or such longer
period as is agreed upon in writing by the Company and the
Executive), the Executive shall act as an independent contractor to
the Company providing such transition-related consulting services
to the Company as the Company may reasonably request. The
consideration described below in Section 2 will constitute
the Executive’s sole compensation for rendering such
consulting services to the Company. The Company agrees
to reimburse the Executive for any reasonable out of pocket
expenses incurred in connection with his performance of such
consulting services, in accordance with the Company’s expense
reimbursement policy.
(c)
By his execution and
delivery of this Agreement, the Executive hereby resigns from all
positions as an officer, member of the board of directors (or any
similar governing body) and/or member of any committee of the board
of directors (or any similar governing body) of the Company and any
of the Affiliates (as applicable) . The Executive agrees to provide such
further documentation implementing such resignations as the Company
may reasonable request.
2.
Consideration of the
Company .
Termination of the Executive’s employment shall be
conclusively deemed to have been a termination of the
Executive’s employment by the Executive for Good Reason under
Section 5.5 of the Employment Agreement. Accordingly,
pursuant to Section 6.2 of the Employment Agreement and in
consideration of the releases and covenants of the Executive set
forth in this Agreement and in the Employment Agreement, the
Company will provide the Executive with the following:
(a)
the Accrued
Benefits;
(b)
the Executive’s
accrued but unpaid vacation, if any, to the Separation
Date;
(c)
continued Base Salary
for twenty-four (24) months after the Separation Date, payable in
weekly installments in accordance with the Company’s payroll
practices;
(d)
a lump sum payment of
$281,095.89, which is equal to the product of: (i) the $450,000
annual target Bonus amount payable to Executive with respect to the
2008-2009 fiscal year (which is from February 1, 2008 –
January 31, 2009); and (ii) a fraction, the numerator of which is
the number of days the Executive was employed during the 2008-2009
fiscal year (i.e., 228 days) and the denominator of which is 365,
payable twenty (20) days after the Separation Date;
(e)
continued coverage under
the Company’s medical and dental plans for twenty-four (24)
months after the Separation Date; 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; and
(f)
payment with respect to
the college tuition of the Executive’s daughter for the fall
semester of 2008 under the Company’s tuition reimbursement
policy.
3.
Executive Release of
Rights .
The Executive (defined for the purpose of this Section
3 as the Executive and the Executive’s agents,
representatives, attorneys, assigns, heirs, executors, and
administrators) irrevocably, fully, and unconditionally releases
the Released Parties (defined as the Company, the Affiliates, DLJ
Merchant Banking Partners IV, L.P., each of their respective
affiliated companies, parents, subsidiaries, predecessors,
successors, assigns, divisions, related entities and any of their
respective past or present employees, officers, agents, insurers,
attorneys, administrators, officials, directors, shareholders,
employee benefit plans, and the sponsors, fiduciaries, or
administrators of the employee benefit plans of the Company or any
of the Affiliates) from any and all liability, claims, demands,
actions, causes of action, suits, grievances, debts, sums of money,
agreements, promises, damages, back and front pay, costs, expenses,
attorneys’ fees, and remedies of any type, arising or that
may have arisen out of or in connection with the Executive’s
employment with or termination of employment from the Company or
any of the Affiliates, from the beginning of time through the date
hereof, including but not limited to claims, actions or liability
under: (1) Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1991, the Civil Rights Act of 1866, the Age
Discrimination in Employment Act, the Americans with Disabilities
Act of 1990, the Fair Labor Standards Act, the Workers’
Adjustment and Retraining Notification Act, the Employee Retirement
Income Security Act of 1974, the Internal Revenue Code, the New
York State Human Rights law, or the Administrative Code of the City
of New York, all as amended; (2) any other federal, state or local
statute, ordinance, or regulation regarding employment, termination
of employment, or discrimination in employment, and (3) the common
law relating to employment contracts, wrongful discharge,
defamation, or any other matter. Notwithstanding the
foregoing, the parties agree that the release of rights provided by
the Executive under this Section 3 shall not include or
cover any claims by the Executive relating to: (A) the
Executive’s rights under this Agreement; (B) the
Executive’s rights to benefits under the Company’s
401(k) plan (subject to the terms and conditions thereof); or (C)
the Executive’s rights with respect to his Class A Units (as
defined therein) under the Amended and Restated Limited Liability
Company Agreement of RG Tube Holdings LLC, a Delaware limited
liability company (“ RG Tube ”), dated as of
April 16, 2008, as amende
