3. Certain Definitions. In addition to terms otherwise defined herein, the followingcapitalized 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 ofembezzlement, of intangible assets or property of the Company;(ii) Any willful act knowingly committed by Executive that subjects the Company orany officer of the Company to any criminal liability for such act;(iii) The Executive’s engaging in egregious misconduct involving serious moralturpitude to the extent that, in the reasonable judgment of the Company, theExecutive’s credibility and reputation no longer conform to the standard of theCompany’s executives;(iv) Gross and willful misconduct by Executive that results in a material injury tothe 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, hasan injurious effect on the Company;(vii) Executive’s willful insubordination or willful refusal to perform assignedduties provided that such assigned duties are consistent with the job duties of theExecutive and that the Executive shall have an opportunity of 30 days after noticefrom the Company to cure any such act or failure to act;(viii) Executive’s material breach of this Agreement which continues for 30 daysafter notice from the Company.     (b) Change in Control. The term “Change in Control” shall mean any of thefollowing that occur after the Effective Date:(i) Ownership, whether direct or indirect, of shares in excess of twenty-fivepercent (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) otherthan Simpson Estates;(ii) The occurrence of any transaction relating to the Company required to bedescribed pursuant to the requirements of Item 5(f) of Schedule 14(a) of Regulation14(a) of the Securities Act of 1934 as promulgated by the Security and ExchangeCommission; 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 presentdirectors of the Company not constituting a majority two years later, provided thatin making such determination, directors who are elected by or upon therecommendation of the then current majority of the Board shall be excluded. (a) Code. The term “Code” means the Internal Revenue Code of 1986, asamended.  (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, orresponsibilities of the person to whom the Executive is required to report;  (iv) a material diminution in the budget over which the Executiveretains authority;  (v) a material change in the geographic location at which theExecutive must perform services for the Company; or  (vi) any other action or inaction that constitutes a materialbreach by the Company of this Agreement.For purposes of this Agreement, in order for a termination of employment by theExecutive to be considered to be on account of Good Reason, the followingconditions must be met by the Executive: (A) the Executive provides written notice tothe Company of the existence of the condition(s) described in thissubparagraph (c) potentially constituting Good Reason within 90 daysof the initial existence of such conditions, and  (B) the Company fails to remedy the conditionswithin 30 days of such notice, and  (C) the Executive actually terminatesemployment with the Company within six months of providing the noticedescribed in this subparagraph (c).  (e)Termination Date.
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The term “Termination Date” means the date on which the Executive’s employment withthe Company and its affiliates terminates for any reason, including voluntaryresignation. If the Executive becomes employed by an entity into which the Companyhas 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 betreated as having occurred for purposes of this Agreement until such time as theExecutive terminates employment with the successor and its affiliates (including,without limitation, the merged entity or purchaser). If the Executive istransferred to employment with an affiliate (including a successor to the Company,and regardless of whether before, on, or after a Change in Control), such transfershall not constitute a Termination Date for purposes of this Agreement except ifthe termination of the Executive is for Good Reason, as provided herein.     4.  Payments and Benefits. Subject to the terms and conditions of this Agreement, ifthe Executive’s employment is terminated during the Term of this Agreement after a Change ofControl (A) by the Company for a reason other than for Cause or (B) by the Executive for GoodReason, the Executive shall be entitled to: (a) lump sum severance payment equal to two times the Executive’s annualbase salary in effect immediately prior to the Termination Date.  (b) a lump sum payment in an amount equal to the annual short-termincentive compensation to which the Executive would have been entitled had hecontinued in the employ of the Company through the last day of the calendar yearin 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 thecalendar year that the Executive was employed prior to the Termination Date. (c) for each performance cycle for which an award to the Executive isoutstanding under the Company’s long-term incentive compensation plan and with respectto which the Executive has performed services to his Termination Date, a lump sumpayment in an amount equal to the target number of shares granted to the Executive inthe long-term incentive compensation plan to which the Executive would have beenentitled had he continued in the employ of the Company through the last day of suchperformance cycle multiplied by the fair market value of the shares on the TerminationDate, pro-rated for the number of days during the applicable performance cycle thatthe Executive was employed prior to the Termination Date.  (d) if the Executive is vested in the Company’s tax-qualified defined benefitplan at the time his employment terminates, he shall be entitled to an amount equal tothe actuarial equivalent of the additional amount that Executive would have earnedunder such plan had he accumulated three(3)
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   additional continuous years of service for benefit crediting purposes. Such amountshall be paid to Executive in an actuarially equivalent cash lump sum atExecutive’s normal retirement age (as defined in such tax-qualified defined benefitplan), unless the Executive chooses the option provided under Code Section 409A asoutlined in paragraph 8 herein.  (e) continued health benefit coverage for the Executive and the Executive’squalified beneficiaries as provided in section 4980B of the Code (“COBRA”)). SuchCOBRA continuation coverage shall be provided to the Executive and the Executive’squalified beneficiaries only if and to the extent that the Executive (or his qualifiedbeneficiaries, as applicable) makes a timely and proper election to be covered underCOBRA and makes timely payments for the cost of such coverage; provided, however, thatsuch COBRA coverage shall be at the Company’s expense for the period beginning on theday after the Termination Date and ending on the earlier of (i) the first anniversaryof the Termination Date or (ii) the date on which the Executive commences employmentwith 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 theExecutive commences employment with another employer, the Executive shall be permittedthe use of a Company-owned or leased automobile on the terms and conditions set forthin the Company’s Automobile Policy.For the avoidance of doubt, the Executive shall not be entitled to any benefits under thisAgreement if his termination of employment occurs on account of his death, disability, or voluntaryresignation (other than for Good Reason).     5.  Time of Payments. payments pursuant to subparagraphs 4(a), 4(b) and 4(c) shallbe paid as follows:(a) the payment pursuant to subparagraph 4(a) (relating to severancepay) shall be paid within 10 days following the later of (i) the Executive’sTermination Date and (ii) the date on which the conditions of paragraph 6 aresatisfied; and(b) any payment pursuant to subparagraphs 4(b) and 4(c) (relating to equity incentivecompensation) shall be made within 10 days following the later of the Executive’sTermination Date , and (ii) the date on which the conditions of paragraph 6 aresatisfied.Notwithstanding any other provision of this Agreement, if the requirements of paragraph 6 are notsatisfied on or before March 1st of the calendar year following the calendar year in which theExecutive’s Termination Date occurs, the Executive shall not be entitled to any payments orbenefits under this Agreement.
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     6.  Waiver and Release. The Executive shall not be entitled to any payments orbenefits under this Agreement unless and until the Participant executes and delivers to the Companya valid release of any and all claims against the Company and its affiliates in a form acceptableto 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 anypayment provided for in this Agreement by seeking other employment or otherwise. None of theCompany or any of its affiliates shall be entitled to set off against the amounts payable to theExecutive under this Agreement any amounts owed to the Company or any of its affiliates by theExecutive, any amounts earned by the Executive in other employment after the Termination Date, orany amounts which might have been earned by the Executive in other employment had he sought suchother employment.     8. Parachute Payments. The Company and the Executive agree that if any payment orbenefit to which the Executive is entitled from the Company, any affiliate, or any trustsestablished 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 (allsuch payments, benefits and vesting being referred to collectively as “Payments”) are subject tothe tax imposed by section 4999 of the Internal Revenue Code of 1986 or any successor provision tothat section, then Executive may choose to receive the aggregate present value of those paymentseither: (a) three times Executive’s base amount less one dollar, or  (b) the amount which yields the Executive the greatest after-tax amount ofpayments under this Agreement and any other plan, program or arrangement with theCompany 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 tobe reduced in accordance with the preceding sentence. Determination of whetherPayments would result in the application of the tax imposed by section 4999, and theamount of reduction that is necessary so that no such tax would be applied, shall bemade, at the Company’s expense, by the independent accounting firm employed by theCompany immediately prior to the occurrence of the Change in Control.     9. Withholding. All payments to the Executive under this Agreement will be subject toall applicable withholding of applicable taxes.     10. Confidential Information. The Executive agrees that during the Agreement Term andat all times thereafter:
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 (a) Except as may be required by the lawful order of a court or agency ofcompetent jurisdiction, except as necessary to carry out his duties to the Company andits affiliates, or except to the extent that the Executive has express authorizationfrom the Company, the Executive agrees to keep secret and confidential indefinitely,all Confidential Information (as defined below), and not to disclose the same, eitherdirectly or indirectly, to any other person, firm, or business entity, or to use it inany way.  (b) To the extent that any court or agency seeks to have the Executive discloseConfidential Information, he shall promptly inform the Company, and he shall take suchreasonable steps to prevent disclosure of Confidential Information until the Companyhas been informed of such requested disclosure, and the Company has an opportunity torespond to such court or agency. To the extent that the Executive obtains informationon behalf of the Company or any of its affiliates that may be subject toattorney-client privilege as to the Company’s attorneys, the Executive shall takereasonable steps to maintain the confidentiality of such information and to preservesuch privilege.  (c) Nothing in the foregoing provisions of this paragraph 10 shall be construedso as to prevent the Executive from using, in connection with his employment forhimself or an employer other than the Company or any of the affiliates, knowledgewhich was acquired by him during the course of his employment with the Company and itsaffiliates, and which is generally known to persons of his experience in othercompanies in the same industry.  (d) For purposes of this Agreement, the term “Confidential Information” shallinclude all non-public information (including, without limitation, informationregarding litigation and pending litigation) concerning the Company and its affiliateswhich was acquired by or disclosed to the Executive during the course of hisemployment with the Company, or during the course of his consultation with the Companyfollowing the Termination Date.  (e) This paragraph 10 shall not be construed to unreasonably restrict theExecutive’s ability to disclose confidential information in an arbitration proceedingor a court proceeding in connection with the assertion of, or defense against anyclaim of breach of this Agreement. If there is a dispute between the Company and theExecutive as to whether information may be disclosed in accordance with thissubparagraph (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 aftertermination 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 ExecutiveOfficer of the Company: (a) be employed by, serve as a consultant to, or otherwise assist or directly orindirectly provide services to a Competitor (defined below) if: (i) the services thatthe Executive is to provide to the Competitor are the same as, or substantiallysimilar to, any of the services that the Executive provided to the Company or itsaffiliates, and such services are to be provided with respect to any location in whichthe Company or an affiliate of the Company has material operations during the 12-monthperiod prior to the Termination Date, or with respect to any location in which theCompany or an affiliate of the Company has devoted material resources to establishingoperations during the 12-month period prior to the Termination Date; or (ii) the tradesecrets, confidential information, or proprietary information (including, withoutlimitation, confidential or proprietary methods) of the Company and its affiliates towhich the Executive had access could reasonably be expected to benefit the Competitorif the Competitor were to obtain access to such secrets or information. For purposesof this subparagraph (a), services provided by others shall be deemed to have beenprovided by the Executive if the Executive had material supervisory responsibilitieswith respect to the provision of such services.  (b) solicit or attempt to solicit any party who is then or, during the 12-monthperiod prior to such solicitation or attempt by the Executive was (or was solicited tobecome), a customer or supplier of the Company, provided that the restriction in thissubparagraph (b) shall not apply to any activity on behalf of a business that is not aCompetitor.  (c) solicit, entice, persuade or induce any individual who is employed by theCompany or its affiliates (or was so employed within 90 days prior to the Executive’saction) to terminate or refrain from renewing or extending such employment or tobecome employed by or enter into contractual relations with any other individual orentity other than the Company or its affiliates, and the Executive shall not approachany such employee for any such purpose or authorize or knowingly cooperate with thetaking of any such actions by any other individual or entity for 12 months after theTermination Date.  (d) directly or indirectly own an equity interest in any Competitor (other thanownership of 5% or less of the outstanding stock of any corporation listed on the NewYork 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 notincorporated) during any period in which it is materially competitive in any way with any businessin 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 writtenrequest of the Executive, the Company’s Chief Executive Officer will determine whether a businessor other entity constitutes a “Competitor” for purposes of this paragraph and may require theExecutive to provide such information as the Chief Executive Officer determines to be necessary tomake such determination. The current and continuing effectiveness of such determination may beconditioned on the accuracy of such information, and on such other factors as the Chief ExecutiveOfficer may determine.     12. Non-Disparagement. The Executive agrees that, while he is employed by theCompany, and after his Termination Date, he shall not make any false, defamatory or disparagingstatements about the Company, its affiliates, or the officers or directors of the Company or itsaffiliates that are reasonably likely to cause material damage to the Company, its affiliates, orthe officers or directors of the Company or its affiliates. While the Executive is employed by theCompany, and after the Termination Date, the Company agrees, on behalf of itself and itsaffiliates, that neither the officers nor the directors of the Company or its affiliates shall makeany false, defamatory or disparaging statements about the Executive that are reasonably likely tocause material damage to the Executive.     13. Nonalienation. The interests of the Executive under this Agreement are notsubject 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 ofthe parties in writing without the consent of any other person. So long as the Executive lives, noperson, other than the parties hereto, shall have any rights under or interest in this Agreement orthe subject matter hereof.     15. Applicable Law. The provisions of this Agreement shall be construed in accordancewith the laws of the State of Illinois, without regard to the conflict of law provisions of anystate.     16. Severability. The invalidity or unenforceability of any provision of thisAgreement 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 thisAgreement, nothing in this Agreement shall be construed to affect the Company’s right to modify theExecutive’s position or duties, compensation, or other terms of employment, or to terminate theExecutive’s employment. Nothing in this Agreement shall be construed to provide to Executive anyrights upon termination of Executive’s employment with the Company other than as specificallydescribed in paragraph 4. If Executive’s employment is terminated other than by the Company forCause or by the
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Executive for Good Reason, the Executive’ benefits shall be determined in accordance with theapplicable 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 ofthis Agreement by any other party, or of compliance with any condition or provision of thisAgreement to be performed by such other party, will operate or be construed as a waiver of anysubsequent breach by such other party of any similar or dissimilar provisions and conditions at thesame or any prior or subsequent time. The failure of any party hereto to take any action by reasonof such breach will not deprive such party of the right to take action at any time while suchbreach continues.     19. Successors, Assumption of Contract. This Agreement is personal to the Executiveand may not be assigned by the Executive without the written consent of the Company. However, tothe 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 theExecutive’s will or the laws of descent and distribution. This Agreement shall be binding upon andinure to the benefit of the Company and any successor of the Company and the Company will requireany successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to allor substantially all of the business or assets of the Company to expressly assume and agree toperform this Agreement in the same manner and to the same extent that the Company would be requiredto perform it if no such succession had taken place.     20. Notices. Notices and all other communications provided for in this Agreementshall 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 viaovernight or two-day delivery), or sent by facsimile or prepaid overnight courier to the parties atthe addresses set forth below. Such notices, demands, claims and other communications shall bedeemed given: (a) in the case of delivery by overnight service with guaranteed next daydelivery, the next day or the day designated for delivery;  (b) in the case of certified or registered U.S. mail, five days after deposit inthe U.S. mail; or  (c) in the case of facsimile, the date upon which the transmitting party receivedconfirmation of receipt by facsimile, telephone or otherwise;provided, however, that in no event shall any such communications be deemed to be given later thanthe date they are actually received. Communications that are to be delivered by the U.S. mail orby overnight service or two-day delivery service are to be delivered to the addresses set forthbelow:to the Company:
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A. M. Castle & Co.