Exhibit 10.9
EXECUTIVE SEVERANCE AGREEMENT
     This Agreement is made, effective as of January 26, 2006, by and between
A.M. Castle & Co., a Maryland corporation (“Castle”) and Stephen V. Hooks
(“Executive”).
     WHEREAS, Executive is a long-standing and valued employee of Castle and
currently serves as an officer of Castle; and
     WHEREAS, the Board of Directors of Castle recognizes that the efforts and
cooperation of Mr. Hooks will be important for the integration of Castle’s new
Chief Executive Officer and has determined that it is in the best interest of
Castle and its stockholders to secure Executive’s continued services;
     NOW THEREFORE, for and in connection of the premises and the covenants and
agreements herein contained, Castle and Executive hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms have the
respective meanings set forth below:
     (a) “Cause” means any of the following acts by Executive:

  (i)   Theft or embezzlement, or attempted theft or embezzlement, of money or
intangible assets or property of Castle;     (ii)   Any act knowingly committed
that subjects Castle or any officer of Castle to any criminal liability for such
act;     (iii)   Conviction of or a plea of nolo contendere to, a felony
involving moral turpitude;         Misconduct, dishonesty or malfeasance by
Executive that results in a material injury to Castle;     (v)   Insubordination
or refusal to perform assigned duties; provided that Executive shall have a
period of thirty (30) days after notice from Castle to cure any such act or
failure to act; and     (vi)   Executive’s material beach of his duties and
responsibilities to Castle (other than as the result of incapacity due to
disability) that continues for thirty (30) days after notice from Castle.

(b)   “Effective Term” means the period from January 26, 2006 through
January 31, 2008.

(c) “Good Cause” means:

  (i)   the assignment to Executive of duties that require a relocation of
Executive’s principal place of work to a location outside the Chicago
metropolitan area: or     (ii)   a reduction in Executive’s base salary from
that in effect as of the effective date of this Agreement; or     (iii)   a
reduction in Executive’s targeted incentive compensation (as a percentage of
base salary) from the level as of the effective date of this Agreement, other
than as a result of a change in Castle’s incentive compensation program that
affects all Castle executives comparably.

2. Obligations of Executive. Executive agrees to hold in a fiduciary capacity
for the benefit of Castle, all secret or confidential information, knowledge or
data relating to Castle or any of its subsidiaries or affiliated companies and
their respective businesses which shall have been obtained by Executive during
Executive’s employment by Castle or any of its subsidiaries or affiliated
companies

78

--------------------------------------------------------------------------------

 

Exhibit 10.9
which is not public knowledge. After termination of Executive’s employment with
Castle, Executive shall not, without the prior written consent of Castle, or as
may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than Castle and those
designated by it.
3. Payments upon Termination of Employment. If Castle terminates Executive’s
employment during the Effective Term without Cause, or if Executive resigns his
employment within thirty (30) days following the occurrence of a Good Cause,
Executive shall be entitled to ___ (i) a lump sum payment equal to one (1) times
Executive’s base salary, at the annual rate in effect on the date of termination
or resignation, (ii) a Management Incentive Compensation/Bonus, for the year of
termination, based on either the Target Bonus for the year of termination or the
actual bonus paid at the normal payout date, as selected by Executive within
seven (7) days of the date of termination or resignation, paid in all events at
the normal payout date, (iii) with respect to any granted but not awarded
Performance Stock or other long term incentive compensation plan, a pro rata
Management Incentive Compensation/Bonus for the year of termination, based on
the target award or the actual award paid at the normal payout date, as selected
by Executive within seven (7) days of the date termination or resignation and
paid in all events at the normal payout date, (iv) continued participation for
twelve (12) months in all medical, dental, and hospitalization insurance
coverages in which he and his eligible dependents were participating on the date
of termination or resignation, at Castle’s expense, until the earlier of the end
of the 12-month period following the date of termination or resignation or the
date that he commences subsequent employment; provided, however, that if any of
the benefits plans do not permit his continued participation, Castle shall
provide him with the economic equivalent on an after-tax basis, and (v) use of a
Castle owned or leased automobile as set forth in the Castle’s Automobile Policy
until the earlier of the end of the 12-month period following the date of
termination or resignation or the date that he commences subsequent employment.
4. No Mitigation Obligation. In the event of any termination of Executive’s
employment hereunder, Executive shall be under no obligation to seek other
employment or otherwise mitigate the obligations of Castle under this Agreement,
and there shall be no offset against amounts due to Executive under this
Agreement for amounts earned by Executive from a third party (other than as
provided in clauses (iv) and (v) above); provided, however, that Castle may
offset under this Agreement any amounts owed by Executive to Castle at the time
payment would otherwise be required under this Agreement.
5. Notice of Termination. Any purported termination of Executive’s employment by
Castle or by Executive (other than by reason of death) shall be effectively
communicated to the other party by written notice identifying the effective date
of termination and the reason or cause for termination.
6. Withholding Taxes. Castle may withhold from all payments to Executive (or his
beneficiary or estate) hereunder, all taxes required to be withheld under
applicable law.
7. Term of Agreement. This Agreement shall be effective on the date hereof and
shall terminate on February 1, 2008; provided, however, that Executive’s rights
to any payments to which Executive shall have become entitled prior to such date
pursuant to Section 3 shall continue until satisfied.
8. Scope of the Agreement. Nothing in this Agreement shall be deemed to entitle
Executive to continued employment with Castle or its subsidiaries or to provide
to Executive any rights upon termination of his employment by Castle other than
as described in Section 3, including upon termination as a result of Executive’s
death, disability, resignation without Good Reason or termination for Cause.

79

--------------------------------------------------------------------------------

 

Exhibit 10.9
9. Successors and Assigns. This Agreement shall bind and shall inure to the
benefit of Castle and any and all of its successors and assigns. This Agreement
is personal to Executive and shall not be assignable by Executive. Castle may
assign this Agreement to any entity which (i) purchases all or substantially all
of the assets of Castle or (ii) is a direct or indirect successor (whether by
merger, sale of stock or transfer of assets) of Castle. Any such assignment
shall be valid so long as the entity which succeeds to Castle expressly
assumes-Castle’s obligations hereunder and complies with its terms. This
Agreement shall inure to the benefit of and be enforceable by Executive’s
personal or legal representatives, executors, administrators, successors, heirs,
distributes, devisees and legatees, if the Executive dies while any amounts will
be payable to Executive hereunder.
Waiver and Release. Payment by Castle to the Executive of severance benefits
under Section 3 of this Agreement shall be in lieu of any and all other
severance benefits or rights in the case of termination of employment to which
Executive might otherwise be entitled under policies or practices of Castle or
otherwise. In consideration of this Agreement, Executive, on behalf of himself
and his heirs, successors and assigns, forever releases and discharges Castle,
its officers, directors, employees, agents, affiliates and insurers from any and
all known or unknown claims, obligations or liabilities, whether in contract or
tort or based on or through any federal, state or local statute, including but
not limited to the Age Discrimination in Employment Act, relating to or arising
out of Executive’s employment with Castle or the termination of that employment.
The foregoing waiver does not apply to any rights or actions under this
Agreement.
11. Notice.

  (a)        For purposes of this Agreement all notices and other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given or delivered (i) when delivered in person or (ii) five (5) days
after deposit in the U.S. mail, certified, return receipt requested, postage
prepaid, addressed to the following:

If to Executive:
Stephen V. Hooks
400 Rollingwood Lane
Joliet, Illinois 60431
If to Castle:
A.M. Castle & Co.
3400 North Wolf Road
Franklin Park, IL 60131
Attn: Corporate Secretary
Or to such other address as either party may have furnished the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
12. Arbitration. Any dispute, controversy or claim between Castle and Executive
arising out of or relating to this Agreement or the breach, termination, or
invalidity hereof, shall promptly and expeditiously be submitted to binding
arbitration in accordance with the Commercial Arbitration Rules of the American
Arbitration Association in effect at the time of such arbitration proceeding
utilizing a single arbitrator. The arbitration shall apply the substantive laws
of Illinois and be held in Chicago, Illinois. Judgment upon the award rendered
by the arbitrator may be entered in any court having jurisdiction thereof. Each
party shall be responsible for its own costs and expenses, including, without
limitation, attorneys’ fees. Pending the resolution of any such dispute,
controversy or claim, Executive (and his beneficiaries) shall, except to the
extent that the arbitrator otherwise expressly provides, continue to receive all
payments and benefits due under this Agreement or otherwise.

80

--------------------------------------------------------------------------------

 

Exhibit 10.9
13. Resolution of Disputes. Any dispute or controversy arising in connection
with this Agreement shall be settled exclusively by baseball type arbitration in
Chicago, Illinois by an arbitrator effect, judgment may be entered on the
arbitrator’s award in any court having jurisdiction Castle shall bear all costs
and expenses arising in connection with any arbitration proceeding.
14. Governing Law Validity. The interpretation, construction and enforcement and
performance of this Agreement shall be governed and construed and enforced
according with the internal laws of the State of Illinois without regard to the
principle of conflict of laws. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement which other provisions shall remain in
full force and effect.
15. Amendments. No provision of this Agreement may be modified or waived unless
such modification or waiver is agreed to in writing signed by Executive and any
other duly authorized officer of Castle. Failure to insist upon strict
compliance with any of the terms, covenants or conditions hereof shall not be
deemed a waiver of such term, covenant or condition.
     IN WITNESS WHEREOF, Castle has caused this Agreement to be executed by a
duly authorized officer of Castle and Executive has executed this Agreement as
of the day and year first above written.

                  A.M. CASTLE & CO.            
 
               
 
  /s/ G. Thomas McKane       /s/ Stephen V. Hooks    
 
               
By:
  Chairman of the Board of Directors       Stephen V. Hooks    

81