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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made this 29th day of February, 1996, by and between
MCINNES STEEL COMPANY, a Pennsylvania corporation (hereinafter called
"Corporation") whose principal place of business is located at 441 E. Main
Street, Corry, Pennsylvania 16407, and ANTHONY A. MONTANI (hereafter called
"Employee"), an individual residing at 691 Wayne Street, Corry, Pennsylvania
16407.
WITNESSETH:
WHEREAS, Centrum Industries, Inc., a Delaware corporation ("Centrum"),
Employee, and other stockholders are parties to an Agreement and Plan of
Reorganization (hereafter referred to as the "Acquisition Agreement"), dated
December 5, 1995, as amended February 5, 1996, pursuant to which a subsidiary
of Centrum is to be merged into the Corporation; and
WHEREAS, Employee owns a substantial portion of the outstanding
capital stock of the Corporation and will receive direct financial benefits
from the consummation of the transactions set forth in the Acquisition
Agreement; and
WHEREAS, as a material and significant inducement to Centrum to enter
into and consummate the transactions set forth in the Acquisition Agreement,
Employee has agreed to remain in employment of the Corporation and assist
Centrum in matters relating to the change of ownership contemplated by the
Acquisition Agreement; and
WHEREAS, Employee has extensive experience and abilities which are
valuable to Centrum in assisting in the operation of the Corporation; and
WHEREAS, Centrum is desirous of having Employee employed with the
Corporation upon the terms and conditions of this Agreement, which terms and
conditions are agreeable to Employee.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and intending to be legally bound thereby, the parties agree as
follows:
1. EMPLOYMENT. For a term of three (3) years commencing February
29, 1996, and ending on February 28, 1999, the Corporation agrees to employ
Employee, and Employee agrees to serve the Corporation. During the term of his
employment, Employee shall, on a full-time basis, devote his full time,
attention and energies to the business of the Corporation; shall render
efficient, industrious and loyal services; and shall assume and perform such
responsibilities and duties in connection therewith as may be assigned to him
from time to time by the Chairman of the Board of the Corporation (hereinafter
called the "Chairman") as more particularly described in Paragraph 2 hereof.
Termination of Employee's employment for cause, as provided in Paragraph 7 of
this Agreement, or a voluntary termination by Employee, shall constitute a
failure of Employee to comply with the terms of this paragraph. Subject to
termination as hereinafter provided, this Agreement shall be automatically
renewed from year to year on the anniversary day of each year ensuing
thereafter commencing upon the expiration of the three year term of this
Agreement, unless within thirty (30) days prior to any such
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renewal date, either party to this Agreement shall notify the other in writing
that this Agreement shall terminate and end at the close of the then current
employment term.
2. DUTIES. Employee shall initially serve as President and Chief
Operating Officer of the Corporation and shall render such services as are
necessary to carry out the duties of said position and such additional duties
of an executive nature as may be assigned to him from time to time by the
Chairman.
3. COMPENSATION. During Employee's employment under this
Agreement, the Corporation agrees to pay Employee compensation of an annual
salary equal to the sum of One Hundred Forty Thousand Dollars ($140,000.00),
such salary to be increased annually as determined by the Board of Directors
and in no event less than the greater of: (x) the change in the Consumer Price
Index for Urban Wage Earners and Clerical Workers (1982-1984=100), or (y) four
percent (4%) per year.
4. EXPENSES.
(a) During the term of this Agreement, Employee shall be
entitled to continue to use at no additional expense the company car currently
driven by Employee or a similar replacement vehicle at the expiration of the
current car lease, consistent with the Corporation's practices currently in
effect. Employee shall be reimbursed for all reasonable expenses incurred in
the operation and maintenance of such car consistent with the Corporation
reimbursement procedures and practices currently in effect.
(b) The Corporation will reimburse Employee for all
reasonable and necessary expenses, including without limiting the foregoing,
travel, entertainment, and promotional expenses, incurred by Employee in
carrying out his duties under this Agreement upon the presentation to the
Corporation by Employee from time to time of an itemized account of such
expenses in such form as may be required by the Corporation.
5. FRINGE BENEFITS. During the period of his employment,
Employee shall be afforded the right to participate in any and all group
insurance, medical and health care plans and other employee benefit plans as
are generally made available to other employees of the Corporation and the
right to participate in the profit-sharing plans and stock option plans of
Centrum consistent with executives of other Centrum companies. Copies of all
such Centrum executive profit sharing plans and stock option plans, or an
appropriate detailed description of such plans has been provided to the
Employee as of the date of this Agreement. Employee shall be entitled to five
(5) weeks and one (1) personal day of paid vacation leave during each one (1)
year period of the term of this Agreement, the scheduling of which shall be
subject to the approval of the Chairman.
In addition to the foregoing fringe benefits, Employee shall be
entitled to participate in:
(a) a medical reimbursement plan for senior executives
which shall supplement the Corporation's medical and health care plans
available to other employees to reimburse Employee for medical and other health
care costs not otherwise covered by such group plans, in an amount not to
exceed Three Thousand Five Hundred Dollars ($3,500.00) per year.
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(b) Corporation-sponsored whole life insurance contract
in the amount of One Hundred Thousand Dollars ($100,000.00).
(c) payment for annual dues, membership fees and
assessments for the Aviation Country Club and the Corry Country Club.
(d) executive tax return preparation.
(e) continued participation in the Nonqualified Deferred
Compensation Agreement entered into as of December 31, 1988, in connection with
the termination of the McInnes Steel Company Salaried Employees' Defined
Pension Plan (it being understood that the Corporation is not assuming any
additional obligations other than as expressly provided for in the Nonqualified
Deferred Compensation Agreement).
(f) such sick leave, sick pay and disability benefits in
accordance with the Corporation's existing policy for key executive employees.
Pursuant to the Centrum Stock Option Plan (the "Plan"), Centrum will
grant to the Employee a stock option (the "Option"), intending to qualify as a
nonqualified option or (as described in Treas.Reg. Section 1.83-7 or any
successor regulation thereto), to purchase one hundred fifty thousand (150,000)
shares of Centrum Common Stock, Five Cents ($.05) par value per share (the
"Common Stock"), at a purchase price of One and 50/100 Dollars ($1.50) per
share, with seventy-five thousand (75,000) shares to vest after one (1) year of
the term of this Agreement and the balance of the shares to vest after two (2)
years of the term of this Agreement, all as provided in the Plan and Stock
Option Agreement entered into on the date hereof between Centrum and the
Employee; provided, however, in the event that Employee's employment with the
Corporation is terminated other than for cause prior to the first anniversary
of the term of this Agreement, options for seventy-five thousand (75,000)
shares shall vest in Employee.
6. ILLNESS, OTHER MEDICAL DISABILITY OR DEATH. If Employee
should be prevented from performing his duties by reason of incapacity or
disability for a period of six (6) months or more, service and compensation
(other than that which shall have accrued and remains unpaid) under this
Agreement will cease. When such illness or other medical disability has ended,
Employee shall resume his duties under this Agreement and again become entitled
to receive compensation hereunder. Such illness or other medical disability
shall not extend the terms of this Agreement. If Employee should be prevented
from performing his duties by reason of death, the Corporation shall pay any
salary or disability payment due for the month of Employee's death to
Employee's designated beneficiary or surviving spouse, in the order named, or
if none to the personal representative of Employee's estate, as the case may
be, and this Agreement shall be terminated and of no further force and effect
upon such payment.
7. TERMINATION FOR CAUSE. Corporation may discharge Employee at
any time for:
(a) an act of theft; embezzlement or felony related to
his employment duties with the Corporation;
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(b) conviction of a crime of moral turpitude or
dishonesty;
(c) habitual intoxication or drug addiction;
(d) any material violation of any express direction or
any reasonable rule or regulation established by the Corporation from time to
time regarding the conduct of its business; provided that the Employee shall
have received written notice of such failure and a reasonable opportunity to
discuss the matter with the Board of Directors, followed by a reasonable
opportunity for the Employee to correct his failure and comply with such rule
of the Board of Directors, or any act or omission constituting gross misconduct
which is or is intended to be injurious to the Corporation;
(e) the willful failure of Employee to perform his duties
hereunder; or
(f) any material violation by Employee of the terms and
conditions of this Agreement or any other agreement between the Corporation and
Employee,
in which event the Corporation shall have no further obligations or liabilities
hereunder after the date of such discharge, other than payment of salary,
bonus,or fringe benefits, the rights to which have accrued and remain unpaid.
8. SEVERANCE PAYMENTS. Upon the concurrence of a "Severance
Event" as hereafter defined, the Corporation shall continue to pay to Employee
for the Severance Period the monthly base salary Employee was receiving from
the Corporation immediately prior to the occurrence of such Severance Event;
provided, however, such severance payments to Employee shall be reduced by any
salary or consulting income received by Employee from any source during the
Severance Period. In the event Employee breaches any provision of this
Agreement, all obligations of the Corporation to make severance payments to
Employee pursuant to this Agreement shall cease. For purposes of this
Agreement, a "Severance Event" shall mean: (i) the termination of Employee's
employment with the Corporation by the Corporation other than a termination for
cause as provided for in paragraph 7 hereof; or (ii) the failure of the parties
to renew this Agreement at the expiration of the term specified herein or at
the expiration of any subsequent term agreed to by the parties. The "Severance
Period" shall mean a period of time equal to the remaining term of this
Agreement following a Severance Event; provided, however, in no event shall the
Severance Period be less than one (1) year.
9. NON-COMPETITION, TRADE SECRETS, ETC. As an inducement to the
Corporation to execute this Agreement,
(a) Employee covenants and agrees with the Corporation that at
all times during the term of his employment hereunder, including extensions
thereof, and for a term equal to one (1) year following his termination of
employment with the Corporation or any of its subsidiaries (the "Restrictive
Period"), within the area where the Corporation presently does business
(including, without limitation, the United States east of the Mississippi
River, the Canadian provinces of Ontario and Quebec, China and Japan), and
where the Corporation does business at the time of termination of Employee (the
"Restrictive Area"), he shall not directly or indirectly:
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(i) solicit, induce or encourage any employee of the
Corporation or any of its subsidiaries to terminate his or her relationship
with the Corporation or any of its subsidiaries; or
(ii) employ or establish a business relationship
which is competitive with the Corporation or any of its subsidiaries with any
individual who was employed by the Corporation or any of its subsidiaries
during the preceding twelve (12) month period; or
(iii) encourage or assist any individual or entity
in a business which is competitive with the Corporation or any of its
subsidiaries to employ or establish a business relationship with any individual
who was employed by the Corporation or any of its subsidiaries during the
preceding twelve (12) month period; or
(iv) solicit, induce or encourage any suppliers,
customers or prospective customers to terminate or reduce in scope their
relationship with the Corporation or any of its subsidiaries; or
(v) solicit or assist any individual or entity in the
solicitation of business from, or performance of work for, any customers or
prospective customers of the Corporation; or
(vi) engage in (as a principal, agent, consultant,
partner, director, officer, employee, stockholder, investor or otherwise),
alone or in association with any person or entity, or be financially interested
in, any business which is competitive with the Corporation. Notwithstanding the
foregoing, Employee shall be entitled to hold shares of a publicly-traded
company so long as such shares do not represent more than one percent (1%) of
the outstanding capital of such company.
(b) For purposes of paragraph 9, "customers" shall mean
those customers for whom the Corporation supplied products to or performed
services during the twelve (12) months preceding the date in question, and
"prospective customers" shall mean persons or entities whose business was
solicited by the Corporation during the twelve (12) months preceding the date
in question.
(c) Employee shall not use for his personal benefit, or
disclose, communicate or divulge to, or use for the direct or indirect benefit
of any person, firm, association or company,
(i) any information regarding the business methods,
business policies, business strategies, marketing plans, survey procedures,
statistical techniques, research or development projects or results, trade
secrets or other confidential knowledge or processes of, or developed by, the
Corporation, or
(ii) any confidential data on or relating to past,
present or prospective customers of the Corporation, or
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(iii) budgets, forecasts, pricing information or
unpublished financial information or any other confidential information
relating to or dealing with the business operations or activities of the
Corporation.
(d) Employee acknowledges and agrees that
(i) the covenants set forth herein are essential
elements of the transactions contemplated by the Acquisition Agreement, that
Employee is receiving adequate consideration hereunder, and that such covenants
are reasonable and necessary in order to protect the legitimate interests of
the Corporation;
(ii) the Corporation will not have any adequate remedy
at law if Employee violates the terms hereof or fails to perform any of his
obligations hereunder; and
(iii) the Corporation shall have the right, in addition
to any other rights either may have under applicable law, to obtain from any
court of competent jurisdiction preliminary and permanent injunctive relief to
restrain any breach or threatened breach of, or otherwise to specifically
enforce any such covenant or any other obligations of Employee under this
Agreement, as well as to obtain damages and an equitable accounting of all
earnings, profits and other benefits arising from such violation, which rights
shall be cumulative and in addition to any other rights or remedies to which
the Corporation may be entitled.
(e) If the Restrictive Period or the Restrictive Area set
forth in paragraph 9(a) should be adjudged unreasonable in any proceeding, then
the Restrictive Period shall be reduced by such number of months or the
Restrictive Area shall be reduced by the elimination of such unreasonable
portion thereof, or both, so that such restrictions may be enforceable for such
time and in the manner adjudged to be reasonable. If Employee violates any of
the restrictions contained in paragraph 9(a), then the restrictive period shall
not run in favor of Employee from the time of the commencement of any such
violation until such time as such violation shall be cured by Employee.
10. INFORMATION REGARDING AGREEMENT. During the term of this
Agreement and during the Restrictive Period, Employee shall not make the terms
and conditions of this Agreement known to any business, entity, or persons
engaged in activities competitive with the Corporation's business with which he
becomes associated subsequent to the termination of his employment with the
Corporation prior to his association with any such business, entity or persons.
The Corporation shall have the right to make the terms of this Agreement known
to third persons.
11. RETURN OF COMPANY PROPERTY. At the time of Employee's
termination of employment with the Corporation or upon demand by the
Corporation, whichever is sooner, Employee shall promptly turn over to the
Corporation all files, documents, business records and any other records,
documents, writings of any kind whatsoever, and all assets of any kind
whatsoever, that belong to the Corporation. Employee shall not copy or record
in any manner whatsoever the information contained in the foregoing materials
and shall turn over any copies or recordings of any kind whatsoever containing
information derived directly or indirectly from the aforestated materials.
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12. SURVIVAL OF COVENANTS. The covenants in Sections 9, 10 and 11
and acknowledgments of the Employee set forth in this Agreement shall survive
the termination of this Agreement, regardless of the cause therefor.
13. REMEDIES. In the event of any violation of any of the
covenants contained in Sections 9, 10 or 11, the Corporation shall be
authorized to obtain preliminary and permanent injunctive relief as well as an
equitable accounting of any profits or benefits arising out of such violation,
which rights and remedies shall be cumulative and in addition to any other
rights or remedies to which the Corporation may be entitled. In the event of
the violation of any of the restrictions contained in Sections 9, 10 or 11, the
period, if any, therein specified shall abate during the time of violation
thereof and that portion remaining at the time of commencement of any violation
shall not begin to run until such violation has been fully and finally cured.
14. WAIVER. The waiver by the Corporation of the breach of any
provision of this Agreement by Employee shall not operate or be construed as a
waiver of any subsequent breach by it. No waiver by the Corporation shall be
legally operative unless reduced to writing and executed by the President of
the Corporation.
15. NOTICES. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered if delivered personally or by recognized
overnight courier service or by facsimile to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice, except that notices of changes of address shall be effective upon
receipt):
(i) If to Employee:
Anthony A. Montani
691 Wayne Street
Corry, Pennsylvania 16407
with a COPY, given in the manner prescribed above, to:
James E. Spoden, Esq.
MacDonald, Illig, Jones & Britton
100 State Street
Suite 700
Erie, Pennsylvania 16507
Fax No.: (814) 454-4647
(ii) If to Corporation:
McInnes Steel Company
441 E. Main Street
Corry, Pennsylvania 16407
Attn: President
Fax No.: (814) 664-9452
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and
Centrum Industries, Inc.
6135 Trust Drive
Suite 104A
Holland, Ohio 43528
Attention: George H. Wells, President
and Chief Operating Officer
Fax No.: (419) 868-3442
with a COPY, given in the manner prescribed above, to:
John W. Hilbert, II, Esq.
Fuller & Henry P.L.L.
One SeaGate, Suite 1700
P.O. Box 2088
Toledo, Ohio 43603-2088
Fax No.: (419) 247-2665
16. ENTIRE AGREEMENT; AMENDMENT OR TERMINATION; WAIVER. This
Agreement (and Plan and Option Agreement referred to herein) constitutes the
entire agreement between the parties hereto with respect to the subject matter
hereof. This Agreement may not be amended or terminated except by a written
instrument, signed by each of the parties hereto, expressing such amendment or
termination. No failure on the part of any party to exercise and no delay in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power or remedy.
17. GENERAL TERMS. This Agreement is personal in nature and
(a) neither of the parties hereto shall assign or transfer
this Agreement without the written consent of the other, except that the
Corporation may assign or transfer this Agreement
(i) to any successor corporation in the event of
merger, consolidation or transfer or sale of the business of the Corporation in
which Employee is engaged; or
(ii) to a parent or subsidiary corporation which may be
organized to conduct the business of the Corporation, in which Employee is
engaged.
(b) In any of the aforesaid events, Employee shall remain
liable to the Corporation, or its successor and assignees.
18. HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
19. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania;
provided, however, that if any
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provision of this Agreement shall be deemed invalid or unenforceable under the
laws of the Commonwealth of Pennsylvania, this Agreement shall be governed by,
and construed in accordance with, the laws of the State of Ohio.
20. COUNTERPARTS. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Corporation has caused its appropriate officer
to sign this Agreement, and Employee has signed this Agreement.
MCINNES STEEL COMPANY
By /s/ George H. Wells
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EMPLOYEE
/s/ Anthony A. Montani
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WITNESS: ANTHONY A. MONTANI
/s/ John D. Gillespie /s/ James E. Spoden
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