EXHIBIT 10.18

EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT (this “Agreement”) is made as of the Effective Date
(as defined below), among TMS International Corp., a Delaware corporation (“TMS
International”), Tube City IMS Corporation, a Delaware corporation (“Company”)
and Leon Z. Heller (“Executive”). Any capitalized terms used herein and not
otherwise defined shall have the meanings assigned to them in Section 3A hereof.

WHEREAS, Executive is currently employed as the Assistant Secretary of the
Company and the Senior Vice President and General Counsel, Mill Services Group,
and Assistant Secretary of Tube City IMS, LLC, pursuant to the terms of a Letter
Agreement, dated December 20, 2007, by and among Executive, the Company and Tube
City IMS, LLC, as amended by a First Amendment made as of November 1, 2008 and a
Second Amendment made as of February 27, 2009 (the “Current Agreement”);

WHEREAS, the Board of Directors of the Company desires to appoint Executive to
the office of Executive Vice President, General Counsel and Secretary of the
Company effective as of January 1, 2013 (the “Effective Date”), on the terms and
subject to the conditions set forth herein, and Executive has agreed to such
appointment; and

WHEREAS, the Company and Executive desire to enter into this Employment
Agreement, which shall supersede the Current Agreement, with effect from the
Effective Date.

NOW THEREFORE, in consideration of the mutual promises made herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive hereby agree as follows:

Section 1. Terms and Conditions of Employment Between the Company and Executive.

1A. Employment, Duties.

(a) The Company shall employ Executive, and Executive hereby accepts employment
with the Company, upon the terms and conditions set forth in this Agreement for
the period beginning on the Effective Date and ending as provided in Section 1C
hereof (the “Employment Period”).

(b) During the Employment Period, Executive shall report to the Chief Executive
Officer of the Company, and shall serve as the Executive Vice President, General
Counsel and Secretary of each of the Company and TMS International or in such
other senior managerial capacities of the Company or any of its subsidiaries, as
requested by the Chief Executive Officer or the Board.

(c) During the Employment Period, Executive shall devote his full business time
and attention to the business and affairs of the Company and its subsidiaries.
So long as Executive is employed by the Company, Executive shall not, without
the prior written consent of the Board, accept other employment, or perform
other services for compensation.

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(d) The Company and the Executive agree that Executive’s primary office shall be
at the Company’s place of business in Horsham, Pennsylvania, subject to
reasonable travel requirements.

1B. Base Salary and Benefits.

(a) During the Employment Period, the Company shall pay Executive an annual base
salary of Two Hundred Seventy-Five Thousand Dollars $275,000 (the “Base
Salary”). As used herein, references to “Base Salary” shall include all
subsequent increases in annual base salary during the Employment Period. The
Base Salary shall be payable in regular installments in accordance with the
Company’s general payroll practices (as in effect from time to time).

(b) In addition to the Base Salary, during the Employment Period, Executive will
be eligible to earn an annual bonus under the Tube City IMS, LLC Corporate
Incentive Compensation Plan as amended from time to time (the “Bonus Plan”).
Bonus compensation earned and payable pursuant to this Section 1B(b), if any,
shall be paid in accordance with the Bonus Plan in the calendar year following
the fiscal year for which the bonus is earned, and in no event shall such
payment be made later than December 31 of such following calendar year.

(c) During the Employment Period, Executive shall be entitled to participate in
all of the Company’s employee benefit programs for which senior executives of
the Company and its subsidiaries are generally eligible.

(d) During the Employment Period, the Company shall (without duplication of any
employee benefits provided to Executive pursuant to other provisions of this
Agreement) reimburse Executive for all reasonable business expenses incurred by
him in the course of performing his duties and responsibilities under this
Agreement which are consistent with the Company’s policies in effect from time
to time with respect to travel, entertainment and other business expenses,
subject to the Company’s requirements with respect to reporting and
documentation of such expenses.

(e) All amounts payable or otherwise provided to Executive pursuant to this
Agreement shall be subject to all applicable withholding and deduction
obligations.

1C. Employment Period.

(a) The Employment Period shall begin on the Effective Date and continue until
terminated in accordance with the following: (i) the Employment Period shall
terminate immediately upon the death or Disability of Executive, (ii) the
Employment Period may be terminated by the Company at any time with or without
Cause, and (iii) the Employment Period may be terminated by Executive at any
time (the date of termination of the Employment Period, the “Termination Date”).

(b) If the Employment Period is terminated (i) by the Company without Cause, or
(ii) by the Executive for Good Reason, Executive shall be entitled to receive
the Base Salary through the date of termination plus a “Severance Payment” equal
to the sum of

 

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(x) one (1) times the Base Salary and (y) one (1) times Executive’s annual car
allowance. The Severance Payment shall be payable in equal semi-monthly
installments over a period of one (1) year. In addition, (i) the Company shall
provide Executive with executive-level outplacement services from an
outplacement company selected by the Company, provided that the Company shall
not be required to spend more than Fifteen Thousand Dollars ($15,000) for such
services, (ii) for one (1) year following the Termination Date, Executive shall,
to the extent permitted by the non-discrimination requirements of the Patient
Protection and Affordable Care Act, without subjecting the Company to an excise
tax under the Internal Revenue Code (“Code”) and to the extent permitted by the
Company’s health insurance carrier (if applicable), be entitled to continued
health and dental coverage on the same basis that such coverage was provided to
Executive prior to the termination of the Employment Period, provided that
coverage shall end earlier if and when Executive becomes entitled to comparable
coverage under another employer’s health and dental plans (and, if applicable,
shall be secondary to Medicare to the extent permitted by law) and that
Executive acknowledges and agrees that he will be solely responsible for all
taxes imposed upon him under the Code by reason of receiving such coverage,
(iii) Executive shall be eligible to receive a bonus for the fiscal year which
includes the Termination Date in an amount equal to the product of (x) his
percentage of the then most-recent applicable annual bonus pool under the Bonus
Plan (the “Base Percentage”) and (y) the applicable bonus pool under the Bonus
Plan for the fiscal year which includes the Termination Date, and (iv) if
Executive has not received payment of any annual bonus payable pursuant to
Section 1B(b) for the fiscal year preceding the year which includes the
Termination Date, Executive shall receive a bonus for such fiscal year in an
amount equal to the product of (x) the Base Percentage and (y) the applicable
bonus pool under the Bonus Plan for such fiscal year. As a condition to the
Company’s obligations to make the payments to Executive pursuant to this
Section 1C(b), Executive must (a) continue to comply with the restrictive
covenants contained in Section 2, and (b) execute and deliver a general release
agreement in form and substance satisfactory to the Company. Executive must sign
and tender the release as described in the immediately preceding sentence not
later than sixty (60) days following Executive’s last day of employment, or such
earlier date as required by the Company, and if Executive fails or refuses to do
so, Executive shall forfeit the right to the Severance Payment as would
otherwise be due and payable. If the Severance Payment is otherwise subject to
Section 409A of the Code (“Section 409A”) and except as otherwise required by
Section 1D, the first installment shall be made on the first pay period
following the date that is sixty (60) days after Executive’s employment
terminates and shall otherwise be made on the first pay period after the release
becomes effective (with the initial salary continuation payment to include any
unpaid salary continuation payments from the date Executive’s employment
terminated), subject to Executive’s executing and tendering the release on the
terms as set forth in the immediately preceding sentence. The bonuses, if any,
payable pursuant to this Section 1C(b) shall be paid when they otherwise would
have been paid absent termination of the Employment Period.

(c) If the Employment Period is terminated for any reason other than (i) by the
Company without Cause or (ii) by the Executive for Good Reason, Executive shall
be entitled to receive only the Base Salary through the date of termination.

(d) Except as otherwise provided herein, all of Executive’s rights to
compensation and benefits (including bonus compensation) which accrue or become
payable after the termination of the Employment Period shall cease upon such
termination, other than

 

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reimbursement pursuant to Section 1B(d). Notwithstanding the foregoing,
Executive’s continued rights with respect to outstanding awards under the
Company’s equity compensation plans shall be determined in accordance with the
terms of such plans and any related agreements, and Executive’s continued rights
under the terms of any compensation or benefit plans (including the Company’s
vacation policy, tax-qualified and nonqualified plans, bonus plan and welfare
plans) shall be determined under the terms of such plans. The Company may offset
any amounts due and payable by Executive to the Company or its subsidiaries
against any amounts the Company owes Executive hereunder.

1D. Section 409A.

(a) The Company and Executive intend that the payments and benefits provided for
in this Agreement either be exempt from Section 409A, or be provided in a manner
that complies with Section 409A, and any ambiguity herein shall be interpreted
so as to be consistent with the intent of this Section 1D. In no event
whatsoever shall the Company be liable for any additional tax, interest or
penalty that may be imposed on Executive by Section 409A or damages for failing
to comply with Section 409A. Notwithstanding anything contained herein to the
contrary, all payments and benefits under Section 1 shall be paid or provided
only at the time of a termination of Executive’s employment that constitutes a
“separation from service” from the Company within the meaning of Section 409A
and the regulations and guidance promulgated thereunder (determined after
applying the presumptions set forth in Treas. Reg. Section 1.409A-1(h)(1)).
Further, if at the time of Executive’s termination of employment with the
Company, Executive is a “specified employee” as defined in Section 409A as
determined by the Company in accordance with Section 409A, and the deferral of
the commencement of any payments or benefits otherwise payable hereunder as a
result of such termination of employment is necessary in order to prevent any
accelerated or additional tax under Section 409A, then the Company will defer
the commencement of the payment of any such payments or benefits hereunder
(without any reduction in payments or benefits ultimately paid or provided to
Executive) until the date that is at least six (6) months following Executive’s
termination of employment with the Company. Thereafter, payments will commence
and continue in accordance with this Agreement until paid in full.

(b) Notwithstanding anything to the contrary in this Agreement, in-kind benefits
and reimbursements provided under this Agreement during any calendar year shall
not affect in-kind benefits or reimbursements to be provided in any other
calendar year, other than an arrangement providing for the reimbursement of
medical expenses referred to in Section 105(b) of the Code, and are not subject
to liquidation or exchange for another benefit. Notwithstanding anything to the
contrary in this Agreement, reimbursement requests must be timely submitted by
Executive and, if timely submitted, reimbursement payments shall be promptly
made to Executive following such submission, but in no event later than
December 31 of the calendar year following the calendar year in which the
expense was incurred. In no event shall Executive be entitled to any
reimbursement payments after December 31 of the calendar year following the
calendar year in which the expense was incurred. This Section 1D(b) shall only
apply to in-kind benefits and reimbursements that would result in taxable
compensation income to Executive.

 

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Section 2. Restrictive Covenants.

2A. Confidential Information. Executive acknowledges that the information,
observations and data obtained by him while providing services to the Company
and its subsidiaries concerning the business or affairs of the Company, any of
its subsidiaries (“Confidential Information”) are the property of the Company or
such subsidiary. Therefore, Executive agrees that he shall not disclose to any
unauthorized person or use for their own purposes any Confidential Information
without the prior written consent of the Board, unless and to the extent that
the aforementioned matters are or become generally known to and available for
use by the public other than as a result of Executive’s acts or omissions.
Executive shall deliver to the Company at the termination of the Employment
Period, or at any other time the Company may request, all memoranda, notes,
plans, records, reports, computer tapes, printouts and software and other
documents and data (and copies thereof) relating to the Confidential
Information, Work Product (as defined below) or the business of the Company, any
of its subsidiaries which he may then possess or have under his control.

2B. Inventions and Patents. Executive acknowledges that all inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable) which
relate to the Company’s or any of its subsidiaries’ actual or anticipated
business, research and development or existing or future products or services
and which are conceived, developed or made by Executive while providing services
the Company, its subsidiaries (“Work Product”) belong to the Company or such
subsidiary. Executive shall promptly disclose such Work Product to the Board and
perform all actions requested by the Board (whether during or after the
Employment Period) to establish and confirm such ownership (including, without
limitation, executing assignments, consents, powers of attorney and other
instruments).

2C. Non-Compete; Non-Solicitation.

(a) In further consideration of the compensation to be paid to Executive
hereunder, Executive acknowledges that in the course of his employment with the
Company he has and shall become familiar with the Company’s and its
subsidiaries’ trade secrets and with other Confidential Information and that his
services shall be of special, unique and extraordinary value to the Company and
its subsidiaries. Therefore, Executive has agreed that during the Employment
Period and continuing for twelve (12) months after termination of the Employment
Period (the “Noncompete Period”), to not directly or indirectly own any interest
in, manage, control, participate in, consult with, advise, render services for,
or in any manner engage in the business of owning, operating, managing, any
business that is competitive with the business which the Company or its
subsidiaries conducts at the time the Employment Period is terminated. Nothing
herein shall prohibit Executive from being a passive owner of not more than two
percent (2%) of the outstanding stock of any class of a corporation which is
publicly traded, so long as Executive has no active participation in the
business of such corporation.

(b) During the Employment Period and continuing for twenty-four (24) months
after termination of the Employment Period (the “Nonsolicitation Period”),
Executive shall not directly or indirectly through another entity (i) induce or
attempt to induce any employee of the Company or any of its subsidiaries to
leave the employ of the Company or

 

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such subsidiary, (ii) hire any person who was an employee of the Company or any
of its subsidiaries at any time during the twelve- (12) month period preceding
such hiring; or (iii) induce or attempt to induce any material customer,
supplier, licensee, licensor or other business relation of the Company, its
subsidiaries to cease doing business with the Company or such subsidiary, other
than in connection with ordinary course post-termination competitive activities
undertaken as permitted in Section 2C(a).

2D. Enforcement. If, at the time of enforcement of Sections 2A, 2B or 2C of this
Agreement, a court holds that the restrictions stated herein are unreasonable
under circumstances then existing, the parties hereto agree that the maximum
period, scope or geographical area reasonable under such circumstances shall be
substituted for the stated period, scope or area. Because Executive’s services
are unique and because he has access to Confidential Information and Work
Product, the parties hereto agree that money damages would not be an adequate
remedy for any breach of this Agreement by Executive. Therefore, in the event a
breach or threatened breach of this Agreement by Executive, the Company or its
subsidiaries or their respective successors or assigns may, in addition to other
rights and remedies existing in their favor apply to any court of competent
jurisdiction for specific performance and/or injunctive or other relief in order
to enforce, or prevent any violations of, the provisions hereof. In addition, in
the event of a violation by Executive of Section 2C, the Noncompete Period and
the Nonsolicitation Period shall be tolled, as applicable, until such breach or
violation has been duly cured. Executive agrees that the restrictions contained
in Section 2C are reasonable.

2E. Certain Representations. Executive hereby represents and warrants to the
Company that (i) the execution, delivery and performance of this Agreement by
him does not and will not conflict with, breach, violate or cause a default
under any contract, agreement, instrument, order, judgment or decree to which he
is a party or by which he is bound, (ii) Executive is not a party to or bound by
any employment agreement, noncompete agreement or confidentiality agreement with
any other person or entity that results in any conflict with this Agreement,
(iii) upon the execution and delivery of this Agreement by the Company, this
Agreement shall be the valid and binding obligation of Executive, enforceable in
accordance with its terms, and (iv) Executive does not own any interest in,
manage, control, participate in, consult with, render services for, or in any
manner engage in any business other than the business of the Company and its
subsidiaries, except for owning interests in companies whose stock is publicly
traded on an exchange or interests in an investment fund or similar vehicle with
respect to which Executive has no direct or indirect authority or influence over
the investments thereof. Executive hereby acknowledges and represents that he
has had the opportunity to consult with independent legal counsel regarding his
rights and obligations under this Agreement and that he fully understands the
terms and conditions contained herein. In no event shall Executive be entitled
to any payments, damages or other recoveries on the termination of the
Employment Period, other than as set forth in Section 1C of this Agreement.

2F. Survival. This Section 2 shall survive and continue in full force in
accordance with their terms notwithstanding any termination of the Employment
Period.

 

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2G. Termination of Existing Employment Agreements. Subject to Section 3D(a),
this Agreement embodies the complete agreement and understanding among the
parties relating to the terms of Executive’s employment with the Company and/or
any of its subsidiaries and affiliates and supersedes and preempts any prior
understandings, agreements or representations by or among the parties and any
direct or indirect subsidiary or affiliate of the Company, or any of their
direct or indirect subsidiaries or affiliates (or any predecessor thereof),
written or oral, which may have related to the subject matter of this Agreement
in any way, including, without limitation, the Current Agreement.

Section 3. Certain Definitions; Miscellaneous.

3A. Certain Definitions.

“Board” means the Board of Directors of the Company.

“Cause” means any of the following by Executive: (i) Executive’s conviction,
plea of no contest, plea of nolo contendere, or imposition of unadjudicated
probation for any felony or crime involving moral turpitude, dishonesty, fraud,
theft or embezzlement, (ii) conduct that brings or is reasonably likely to bring
the Company or any of its subsidiaries or affiliates into public disgrace or
disrepute and that is injurious to the Company’s or any subsidiary’s or
affiliate’s business in any material way, (iii) failure to perform duties as
reasonably directed by the Company (which, if curable, is not cured within
thirty (30) days after notice thereof to Executive by the Company), (iv) gross
negligence, willful malfeasance or material act of disloyalty with respect to
the Company or its subsidiaries or affiliates (which, if curable, is not cured
within thirty (30) days after notice thereof to Executive by the Company), or
(v) any material breach of this Agreement (which, if curable, is not cured
within thirty (30) days after notice thereof to Executive by the Board).

“Disability” means any physical or mental incapacitation which results in
Executive’s inability to perform his duties and responsibilities hereunder, as
determined by the Board in its good faith judgment, for a consecutive period of
ninety (90) days or for a period of one hundred and twenty (120) days in any
three hundred and sixty (360) day period.

“Good Reason” means (i) a material default by the Company in the performance of
its obligations under this Agreement which is not cured within thirty (30) days
after receipt of written notice from Executive describing the default in
reasonable detail; (ii) relocation of Executive without his consent from his
place of employment described in Section 1A(d) to a location that increases his
one-way commute by more than thirty-five (35) miles, (iii) a material diminution
in Executive’s duties or other material adverse change in his employment
relationship unilaterally imposed by the Company (or its successor) within
eighteen (18) months following a Sale of the Company (as defined in the TMS
International Corp. Restricted Stock Plan), after at least thirty (30) days
written notification provided by the Executive; or (iv) failure by the Company
to secure in writing the agreement of any successor entity to the Company to
assume the Agreement, including a successor to all or substantially all of the
assets of the Company.

3B. Notices. All notices, consents and other communications required or
permitted to be given under or by reason of this Agreement shall be in writing,
shall be delivered personally or by e-mail or telecopy as described below or by
reputable overnight courier, and shall be deemed given on the date on which such
delivery is made, provided, that

 

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any such delivery made on a day that is not a business day, or that is made
after 5:00 p.m. on a business day, shall be deemed to be given on the following
business day. If delivered by e-mail or telecopy, such notices or communications
shall be confirmed by a registered or certified letter (return receipt
requested), postage prepaid. Any such delivery shall be addressed to the
intended recipient at the following addresses (or at such other address for a
party as shall be specified by such party by like notice to the other parties):

3C.    Notices to Executive:

Leon Z. Heller

 

 

Notices to the Company:

Tube City IMS Corporation

c/o Onex Investment Corp.

712 Fifth Avenue

New York, New York 10019

Attention: Timothy A.R. Duncanson

Fax No.: (212) 582-0909

With copies to:

TMS International Corp.

12 Monongahela Avenue

Glassport, Pennsylvania 15045

Attention: Chief Executive Officer

and:

Kaye Scholer LLP

425 Park Avenue

New York, New York 10022

Attention: Joel I. Greenberg

Derek M. Stoldt

Fax No.: (212) 835-8211

3D.    General Provisions.

(a) Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

 

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(b) Counterparts. This Agreement may be executed in separate counterparts
(including by means of telecopied signature pages), each of which is deemed to
be an original and all of which taken together constitute one and the same
agreement.

(c) Successors and Assigns. Except as otherwise provided herein, this Agreement
shall bind and inure to the benefit of and be enforceable by Executive and the
Company and their respective successors and assigns; provided that the rights
and obligations of Executive under this Agreement shall not be assignable
without the prior written consent of the Company.

(d) Choice of Law. All issues and questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware, without
giving effect to any choice of law or conflict of law rules or provisions
(whether of the State of Delaware or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Delaware.

(e) Amendment and Waiver. The provisions of this Agreement may be amended and
waived only in a writing signed by the Company (with the prior written approval
of the Board), Executive, and TMS International.

(f) No Strict Construction. Notwithstanding that this Agreement has been drafted
or prepared by one of the parties hereto, each of the parties hereto confirm
that each party and their respective counsel have reviewed, negotiated and
adopted this Agreement as the joint agreement of the parties. The language used
in this Agreement shall be deemed to be the language chosen by the parties, and
no rule of strict construction shall be applied against any party.

*        *        *         *

 

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IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
on the date first written above.

 

TUBE CITY IMS CORPORATION By:  

/s/ Daniel E. Rosati

Its:   Executive Vice President

 

/s/ Leon Z. Heller      LEON Z. HELLER  

SIGNATURE PAGE TO HELLER EMPLOYMENT AGREEMENT

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TMS INTERNATIONAL CORP. By:   /s/ Daniel E. Rosati Its:   Executive Vice
President

SIGNATURE PAGE TO HELLER EMPLOYMENT AGREEMENT