Exhibit 10.2
CHANGE IN CONTROL AGREEMENT
A.M. CASTLE & CO.
     THIS AGREEMENT (“Agreement”), made and entered into this 24th day of July,
2008 (the “Effective Date”), by and between A.M. Castle & Co., a Maryland
corporation (the “Company”), and Scott F. Stephens (the “Executive”);
WITNESSETH THAT:
     WHEREAS, the Company wishes to assure itself of the continuity of the
Executive’s service and has determined that it is appropriate that the Executive
receive certain payments in the event that the Executive’s employment is
involuntarily terminated following a change in control as more fully described
below; and
     WHEREAS, the Company and the Executive accordingly desire to enter into
this Agreement on the terms and conditions set forth below;
     NOW, THEREFORE, in consideration of the premises and mutual covenants set
forth herein, IT IS HEREBY AGREED, by and between the parties as follows:
     1. Relationship to Other Agreements. Unless and until a Change of Control
(as defined in paragraph 3) occurs, no benefits or other payments shall be
payable under this Agreement. If a Change of Control occurs during the Term of
this Agreement (as defined in paragraph 2), this Agreement shall supersede that
certain Severance Agreement between the Company and the Executive, dated
July 24, 2008 (the “Severance Agreement), and any and all other agreements
between the Executive and the Company regarding the payment of benefits upon a
termination of the Executive’s employment with the Company. If the Executive is
entitled to severance pay or other benefits pursuant to the terms of this
Agreement, the Executive shall not be eligible to receive any severance pay or
other benefits pursuant to the terms of any other severance agreement or
arrangement of the Company (or any affiliate of the Company), including any
arrangement of the Company (or any affiliate of the Company) providing benefits
upon involuntary termination of employment.
     2. Agreement Term. The “Term” of this Agreement shall begin on the
Effective Date and shall continue through the first one-year anniversary of the
Effective Date; provided, however, that as of the first one-year anniversary of
the Effective Date, and on each one-year anniversary thereafter, the Term shall
automatically be extended for one additional year unless, not later than 30 days
prior to such applicable anniversary date, either party shall have given written
notice to the other party that it does not wish to extend the Term; and
provided, further, that if a Change in Control shall have occurred within
90 days of such termination dates, the Term of this Agreement shall
automatically be deemed extended and shall continue for a period of twenty-four
calendar months beyond the calendar month in which such Change in Control
occurs.

 

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     3. Certain Definitions. In addition to terms otherwise defined herein, the
following capitalized terms used in this Agreement shall have the meanings
specified below:

  (a)   Cause. The term “Cause” shall mean:

(i) Executive’s willful theft or embezzlement, or willful attempted theft of
embezzlement, of intangible assets or property of the Company;
(ii) Any willful act knowingly committed by Executive that subjects the Company
or any officer of the Company to any criminal liability for such act;
(iii) The Executive’s engaging in egregious misconduct involving serious moral
turpitude to the extent that, in the reasonable judgment of the Company, the
Executive’s credibility and reputation no longer conform to the standard of the
Company’s executives;
(iv) Gross and willful misconduct by Executive that results in a material injury
to the Company;
(v) Willful dishonesty of Executive that results in a material injury to the
Company;
(vi) Willful malfeasance by Executive, provided that such malfeasance, in fact,
has an injurious effect on the Company;
(vii) Executive’s willful insubordination or willful refusal to perform assigned
duties provided that such assigned duties are consistent with the job duties of
the Executive and that the Executive shall have an opportunity of 30 days after
notice from the Company to cure any such act or failure to act;
(viii) Executive’s material breach of this Agreement which continues for 30 days
after notice from the Company.
     (b) Change in Control. The term “Change in Control” shall mean any of the
following that occur after the Effective Date:
(i) Ownership, whether direct or indirect, of shares in excess of twenty-five
percent (25%) of the outstanding shares of common stock of the Company by a
Person (as that term is used in Section 13(d)(3) or 14(d)(2) of the Exchange
Act) other than Simpson Estates;
(ii) The occurrence of any transaction relating to the Company required to be
described pursuant to the requirements of Item 5(f) of Schedule 14(a) of
Regulation 14(a) of the Securities Act of 1934 as promulgated by the Security
and Exchange Commission; or

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(iii) Any change in the composition of the Board of Directors of the Company
(the “Board”) over a two-year period which results in a majority of the then
present directors of the Company not constituting a majority two years later,
provided that in making such determination, directors who are elected by or upon
the recommendation of the then current majority of the Board shall be excluded.

  (a)   Code. The term “Code” means the Internal Revenue Code of 1986, as
amended.     (b)   Good Reason. The term “Good Reason” shall mean:

  (i)   a material diminution in the Executive’s base compensation;     (ii)   a
material diminution in the Executive’s authority, duties, or responsibilities;  
  (iii)   a material diminution in the authority, duties, or responsibilities of
the person to whom the Executive is required to report;     (iv)   a material
diminution in the budget over which the Executive retains authority;     (v)   a
material change in the geographic location at which the Executive must perform
services for the Company; or     (vi)   any other action or inaction that
constitutes a material breach by the Company of this Agreement.

For purposes of this Agreement, in order for a termination of employment by the
Executive to be considered to be on account of Good Reason, the following
conditions must be met by the Executive:

  (A)   the Executive provides written notice to the Company of the existence of
the condition(s) described in this subparagraph (c) potentially constituting
Good Reason within 90 days of the initial existence of such conditions, and    
(B)   the Company fails to remedy the conditions within 30 days of such notice,
and     (C)   the Executive actually terminates employment with the Company
within six months of providing the notice described in this subparagraph (c).

    (e)Termination Date.

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The term “Termination Date” means the date on which the Executive’s employment
with the Company and its affiliates terminates for any reason, including
voluntary resignation. If the Executive becomes employed by an entity into which
the Company has merged, or by the purchaser of substantially all of the assets
of the Company, or by a successor to such entity or purchaser, a Termination
Date shall not be treated as having occurred for purposes of this Agreement
until such time as the Executive terminates employment with the successor and
its affiliates (including, without limitation, the merged entity or purchaser).
If the Executive is transferred to employment with an affiliate (including a
successor to the Company, and regardless of whether before, on, or after a
Change in Control), such transfer shall not constitute a Termination Date for
purposes of this Agreement except if the termination of the Executive is for
Good Reason, as provided herein.
     4.  Payments and Benefits. Subject to the terms and conditions of this
Agreement, if the Executive’s employment is terminated during the Term of this
Agreement after a Change of Control (A) by the Company for a reason other than
for Cause or (B) by the Executive for Good Reason, the Executive shall be
entitled to:

  (a)   lump sum severance payment equal to two times the Executive’s annual
base salary in effect immediately prior to the Termination Date.     (b)   a
lump sum payment in an amount equal to the annual short-term incentive
compensation to which the Executive would have been entitled had he continued in
the employ of the Company through the last day of the calendar year in which his
Termination Date occurs and had the applicable incentive target(s) for such
calendar year been met, pro-rated for the number of days during the calendar
year that the Executive was employed prior to the Termination Date.

  (c)   for each performance cycle for which an award to the Executive is
outstanding under the Company’s long-term incentive compensation plan and with
respect to which the Executive has performed services to his Termination Date, a
lump sum payment in an amount equal to the target number of shares granted to
the Executive in the long-term incentive compensation plan to which the
Executive would have been entitled had he continued in the employ of the Company
through the last day of such performance cycle multiplied by the fair market
value of the shares on the Termination Date, pro-rated for the number of days
during the applicable performance cycle that the Executive was employed prior to
the Termination Date.     (d)   if the Executive is vested in the Company’s
tax-qualified defined benefit plan at the time his employment terminates, he
shall be entitled to an amount equal to the actuarial equivalent of the
additional amount that Executive would have earned under such plan had he
accumulated three(3)

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      additional continuous years of service for benefit crediting purposes.
Such amount shall be paid to Executive in an actuarially equivalent cash lump
sum at Executive’s normal retirement age (as defined in such tax-qualified
defined benefit plan), unless the Executive chooses the option provided under
Code Section 409A as outlined in paragraph 8 herein.     (e)   continued health
benefit coverage for the Executive and the Executive’s qualified beneficiaries
as provided in section 4980B of the Code (“COBRA”)). Such COBRA continuation
coverage shall be provided to the Executive and the Executive’s qualified
beneficiaries only if and to the extent that the Executive (or his qualified
beneficiaries, as applicable) makes a timely and proper election to be covered
under COBRA and makes timely payments for the cost of such coverage; provided,
however, that such COBRA coverage shall be at the Company’s expense for the
period beginning on the day after the Termination Date and ending on the earlier
of (i) the first anniversary of the Termination Date or (ii) the date on which
the Executive commences employment with another employer.     (f)   for the
period beginning on the Termination Date and ending on the earlier of (i) the
first anniversary of the Termination Date and (ii) the date on which the
Executive commences employment with another employer, the Executive shall be
permitted the use of a Company-owned or leased automobile on the terms and
conditions set forth in the Company’s Automobile Policy.

For the avoidance of doubt, the Executive shall not be entitled to any benefits
under this Agreement if his termination of employment occurs on account of his
death, disability, or voluntary resignation (other than for Good Reason).
     5.  Time of Payments. payments pursuant to subparagraphs 4(a), 4(b) and
4(c) shall be paid as follows:
(a) the payment pursuant to subparagraph 4(a) (relating to severance pay) shall
be paid within 10 days following the later of (i) the Executive’s Termination
Date and (ii) the date on which the conditions of paragraph 6 are satisfied; and
(b) any payment pursuant to subparagraphs 4(b) and 4(c) (relating to equity
incentive compensation) shall be made within 10 days following the later of the
Executive’s Termination Date , and (ii) the date on which the conditions of
paragraph 6 are satisfied.
Notwithstanding any other provision of this Agreement, if the requirements of
paragraph 6 are not satisfied on or before March 1st of the calendar year
following the calendar year in which the Executive’s Termination Date occurs,
the Executive shall not be entitled to any payments or benefits under this
Agreement.

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     6.  Waiver and Release. The Executive shall not be entitled to any payments
or benefits under this Agreement unless and until the Participant executes and
delivers to the Company a valid release of any and all claims against the
Company and its affiliates in a form acceptable to the Company and the
revocation period for such release has expired without revocation.
     7. Mitigation. The Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise. None of the Company or any of its affiliates shall be entitled to set
off against the amounts payable to the Executive under this Agreement any
amounts owed to the Company or any of its affiliates by the Executive, any
amounts earned by the Executive in other employment after the Termination Date,
or any amounts which might have been earned by the Executive in other employment
had he sought such other employment.
     8. Parachute Payments. The Company and the Executive agree that if any
payment or benefit to which the Executive is entitled from the Company, any
affiliate, or any trusts established by the Company or by any affiliate (whether
or not payable under this Agreement) including, without limitation, the vesting
of an option or other non-cash benefit or property (all such payments, benefits
and vesting being referred to collectively as “Payments”) are subject to the tax
imposed by section 4999 of the Internal Revenue Code of 1986 or any successor
provision to that section, then Executive may choose to receive the aggregate
present value of those payments either:

  (a)   three times Executive’s base amount less one dollar, or     (b)   the
amount which yields the Executive the greatest after-tax amount of payments
under this Agreement and any other plan, program or arrangement with the Company
after taking into account all applicable taxes on those payments, including, but
not limited to, the excise tax imposed under Section 4999 of the Code.     (c)  
The Executive shall be entitled to select the order in which payments are to be
reduced in accordance with the preceding sentence. Determination of whether
Payments would result in the application of the tax imposed by section 4999, and
the amount of reduction that is necessary so that no such tax would be applied,
shall be made, at the Company’s expense, by the independent accounting firm
employed by the Company immediately prior to the occurrence of the Change in
Control.

     9. Withholding. All payments to the Executive under this Agreement will be
subject to all applicable withholding of applicable taxes.
     10. Confidential Information. The Executive agrees that during the
Agreement Term and at all times thereafter:

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  (a)   Except as may be required by the lawful order of a court or agency of
competent jurisdiction, except as necessary to carry out his duties to the
Company and its affiliates, or except to the extent that the Executive has
express authorization from the Company, the Executive agrees to keep secret and
confidential indefinitely, all Confidential Information (as defined below), and
not to disclose the same, either directly or indirectly, to any other person,
firm, or business entity, or to use it in any way.     (b)   To the extent that
any court or agency seeks to have the Executive disclose Confidential
Information, he shall promptly inform the Company, and he shall take such
reasonable steps to prevent disclosure of Confidential Information until the
Company has been informed of such requested disclosure, and the Company has an
opportunity to respond to such court or agency. To the extent that the Executive
obtains information on behalf of the Company or any of its affiliates that may
be subject to attorney-client privilege as to the Company’s attorneys, the
Executive shall take reasonable steps to maintain the confidentiality of such
information and to preserve such privilege.     (c)   Nothing in the foregoing
provisions of this paragraph 10 shall be construed so as to prevent the
Executive from using, in connection with his employment for himself or an
employer other than the Company or any of the affiliates, knowledge which was
acquired by him during the course of his employment with the Company and its
affiliates, and which is generally known to persons of his experience in other
companies in the same industry.     (d)   For purposes of this Agreement, the
term “Confidential Information” shall include all non-public information
(including, without limitation, information regarding litigation and pending
litigation) concerning the Company and its affiliates which was acquired by or
disclosed to the Executive during the course of his employment with the Company,
or during the course of his consultation with the Company following the
Termination Date.     (e)   This paragraph 10 shall not be construed to
unreasonably restrict the Executive’s ability to disclose confidential
information in an arbitration proceeding or a court proceeding in connection
with the assertion of, or defense against any claim of breach of this Agreement.
If there is a dispute between the Company and the Executive as to whether
information may be disclosed in accordance with this subparagraph (e), the
matter shall be submitted to the arbitrators or the court (whichever is
applicable) for decision.

     11. Competition. During the Term of the Agreement and for a period of
12 months after termination of the Executive’s employment with the Company for
any

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reason, the Executive shall not, without the express written consent of the
Chief Executive Officer of the Company:

  (a)   be employed by, serve as a consultant to, or otherwise assist or
directly or indirectly provide services to a Competitor (defined below) if:
(i) the services that the Executive is to provide to the Competitor are the same
as, or substantially similar to, any of the services that the Executive provided
to the Company or its affiliates, and such services are to be provided with
respect to any location in which the Company or an affiliate of the Company has
material operations during the 12-month period prior to the Termination Date, or
with respect to any location in which the Company or an affiliate of the Company
has devoted material resources to establishing operations during the 12-month
period prior to the Termination Date; or (ii) the trade secrets, confidential
information, or proprietary information (including, without limitation,
confidential or proprietary methods) of the Company and its affiliates to which
the Executive had access could reasonably be expected to benefit the Competitor
if the Competitor were to obtain access to such secrets or information. For
purposes of this subparagraph (a), services provided by others shall be deemed
to have been provided by the Executive if the Executive had material supervisory
responsibilities with respect to the provision of such services.     (b)  
solicit or attempt to solicit any party who is then or, during the 12-month
period prior to such solicitation or attempt by the Executive was (or was
solicited to become), a customer or supplier of the Company, provided that the
restriction in this subparagraph (b) shall not apply to any activity on behalf
of a business that is not a Competitor.     (c)   solicit, entice, persuade or
induce any individual who is employed by the Company or its affiliates (or was
so employed within 90 days prior to the Executive’s action) to terminate or
refrain from renewing or extending such employment or to become employed by or
enter into contractual relations with any other individual or entity other than
the Company or its affiliates, and the Executive shall not approach any such
employee for any such purpose or authorize or knowingly cooperate with the
taking of any such actions by any other individual or entity for 12 months after
the Termination Date.     (d)   directly or indirectly own an equity interest in
any Competitor (other than ownership of 5% or less of the outstanding stock of
any corporation listed on the New York Stock Exchange or the American Stock
Exchange or included in the NASDAQ System).

The term “Competitor” means any enterprise (including a person, firm or
business, whether or not incorporated) during any period in which it is
materially competitive in any way with any business in which the Company or any
of its affiliates was engaged

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during the 12-month period prior to the Executive’s termination of employment.
Upon the written request of the Executive, the Company’s Chief Executive Officer
will determine whether a business or other entity constitutes a “Competitor” for
purposes of this paragraph and may require the Executive to provide such
information as the Chief Executive Officer determines to be necessary to make
such determination. The current and continuing effectiveness of such
determination may be conditioned on the accuracy of such information, and on
such other factors as the Chief Executive Officer may determine.
     12. Non-Disparagement. The Executive agrees that, while he is employed by
the Company, and after his Termination Date, he shall not make any false,
defamatory or disparaging statements about the Company, its affiliates, or the
officers or directors of the Company or its affiliates that are reasonably
likely to cause material damage to the Company, its affiliates, or the officers
or directors of the Company or its affiliates. While the Executive is employed
by the Company, and after the Termination Date, the Company agrees, on behalf of
itself and its affiliates, that neither the officers nor the directors of the
Company or its affiliates shall make any false, defamatory or disparaging
statements about the Executive that are reasonably likely to cause material
damage to the Executive.
     13. Nonalienation. The interests of the Executive under this Agreement are
not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors of the
Executive or the Executive’s beneficiary.
     14. Amendment. This Agreement may be amended or canceled only by mutual
agreement of the parties in writing without the consent of any other person. So
long as the Executive lives, no person, other than the parties hereto, shall
have any rights under or interest in this Agreement or the subject matter
hereof.
     15. Applicable Law. The provisions of this Agreement shall be construed in
accordance with the laws of the State of Illinois, without regard to the
conflict of law provisions of any state.
     16. Severability. The invalidity or unenforceability of any provision of
this Agreement will not affect the validity or enforceability of any other
provision of this Agreement, and this Agreement will be construed as if such
invalid or unenforceable provision were omitted (but only to the extent that
such provision cannot be appropriately reformed or modified).
     17. Obligation of Company. Except as otherwise specifically provided in
this Agreement, nothing in this Agreement shall be construed to affect the
Company’s right to modify the Executive’s position or duties, compensation, or
other terms of employment, or to terminate the Executive’s employment. Nothing
in this Agreement shall be construed to provide to Executive any rights upon
termination of Executive’s employment with the Company other than as
specifically described in paragraph 4. If Executive’s employment is terminated
other than by the Company for Cause or by the

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Executive for Good Reason, the Executive’ benefits shall be determined in
accordance with the applicable retirement, insurance and other programs of the
Company as may then be in effect.
     18. Waiver of Breach. No waiver by any party hereto of a breach of any
provision of this Agreement by any other party, or of compliance with any
condition or provision of this Agreement to be performed by such other party,
will operate or be construed as a waiver of any subsequent breach by such other
party of any similar or dissimilar provisions and conditions at the same or any
prior or subsequent time. The failure of any party hereto to take any action by
reason of such breach will not deprive such party of the right to take action at
any time while such breach continues.
     19. Successors, Assumption of Contract. This Agreement is personal to the
Executive and may not be assigned by the Executive without the written consent
of the Company. However, to the extent that rights or benefits under this
Agreement otherwise survive the Executive’s death, the Executive’s heirs and
estate shall succeed to such rights and benefits pursuant to the Executive’s
will or the laws of descent and distribution. This Agreement shall be binding
upon and inure to the benefit of the Company and any successor of the Company
and the Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.
     20. Notices. Notices and all other communications provided for in this
Agreement shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid
(provided that international mail shall be sent via overnight or two-day
delivery), or sent by facsimile or prepaid overnight courier to the parties at
the addresses set forth below. Such notices, demands, claims and other
communications shall be deemed given:

  (a)   in the case of delivery by overnight service with guaranteed next day
delivery, the next day or the day designated for delivery;     (b)   in the case
of certified or registered U.S. mail, five days after deposit in the U.S. mail;
or     (c)   in the case of facsimile, the date upon which the transmitting
party received confirmation of receipt by facsimile, telephone or otherwise;

provided, however, that in no event shall any such communications be deemed to
be given later than the date they are actually received. Communications that are
to be delivered by the U.S. mail or by overnight service or two-day delivery
service are to be delivered to the addresses set forth below:
to the Company:

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A. M. Castle & Co.
3400 North Wolf Road
Franklin Park, IL 60131
Attn: Corporate Secretary
or to the Executive:
Scott F. Stephens
2307 Skylane Drive
Naperville, IL 60564
Each party, by written notice furnished to the other party, may modify the
applicable delivery address, except that notice of change of address shall be
effective only upon receipt.
     21. Arbitration of All Disputes. Any controversy or claim arising out of or
relating to this Agreement (or the breach thereof) shall be settled by final,
binding and non-appealable arbitration in Illinois, by three arbitrators. Except
as otherwise expressly provided in this paragraph 21, the arbitration shall be
conducted in accordance with the rules of the American Arbitration Association
(the “Association”) then in effect. One of the arbitrators shall be appointed by
the Company, one shall be appointed by the Executive, and the third shall be
appointed by the first two arbitrators. If the first two arbitrators cannot
agree on the third arbitrator within 30 days of the appointment of the second
arbitrator, then the third arbitrator shall be appointed by the Association.
     22. Survival of Agreement. Except as otherwise expressly provided in this
Agreement, the rights and obligations of the parties to this Agreement shall
survive the termination of the Executive’s employment with the Company.
     23. Counterparts. This Agreement may be executed in two or more
counterparts, any one of which shall be deemed the original without reference to
the others.
     IN WITNESS THEREOF, the Executive has hereunto set his hand, and the
Company has caused these presents to be executed in its name and on its behalf,
all as of the Effective Date.

                  /s/ Scott F. Stephens         Executive                     A.
M. Castle & Co.    
 
           
 
  By   /s/ Michael H. Goldberg    
 
     
 
   
 
  Its   President & Chief Executive Officer    
 
     
 
   

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