**Exhibit 10.4**

 

**EXECUTIONCOPY**

 

**EMPLOYMENT AGREEMENT**

 

This Employment Agreement (the “Agreement”)dated as of this 5th day of March, 2003 by and between Metals USA,Inc., a Delaware corporation (the “Company”), and William R. Bennett(“Executive”).

 

**RECITALS**

 

A.            Asof the Effective Date, the Company is engaged primarily in the business ofproviding metals processing, metals fabricating, and/or specialty metalsservices; and

 

B.            Executiveis employed by the Company in a confidential relationship wherein Executive, inthe course of Executive’s employment with the Company, has and will continue tobecome familiar with and aware of information as to the Company’s customers,specific manner of doing business, including the processes, techniques andtrade secrets utilized by the Company, and future plans with respect thereto,all of which has been and will be established and maintained at great expenseto the Company; this information is a trade secret and constitutes the valuablegood will of the Company; and

 

C.            Theparties desire to agree to the various matters described herein and tomemorialize those agreements herein.

 

**NOW,THEREFORE,** in consideration of the mutual promises andcovenants set forth herein, it is hereby agreed as follows:

 

1.             Employmentand Duties.

 

(a)           EffectiveNovember 1, 2002 (the “Effective Date”), the Company hereby employs Executiveas Senior Vice President of the Company and President of the Plates &Shapes Group.  As such, Executive shallhave responsibilities, duties and authority reasonably accorded to and expectedof, and consistent with Executive’s positions and will report directly to theOffice of the Chairman of the Company until a President has been hired by theBoard of Directors of the Company (the “Board”) and then to the President,unless otherwise ordered by the Board. Executive hereby accepts this employment upon the terms and conditionsherein contained and, subject to Section 3 hereof, agrees to devote Executive’sfull business time, attention and efforts to promote and further the businessof the Company.

 

(b)           Executiveshall faithfully adhere to, execute and fulfill all policies established by theCompany, as such policies may be changed from time to time by the Company,including the Company’s Code of Conduct.

 

2.             Compensation.  For all services rendered by Executive, theCompany shall compensate Executive as follows:

 

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(a)           *Base Salary.*  As of the Effective Date, the base salarypayable to Executive shall be $280,000 per year, payable on a regular basis inaccordance with the Company’s standard payroll procedures.  On an annual basis, the Company will reviewExecutive’s performance and may make increases to such base salary if, in itsdiscretion, any such increase is warranted.

 

(b)           *ExecutivePerquisites, Benefits, Annual Bonus and Other Compensation*.  Executive shall be entitled to receiveadditional benefits and compensation from the Company in such form and to suchextent as specified below:

 

(i)            Forcalendar years 2003 and 2004, Company shall pay Executive a minimum annualbonus of $70,000, each year, pro rated for any partial year that Executiveworks and payable at the same time that the Company customarily pays annualbonuses.

 

(ii)           Admittancefor participation for Executive and Executive’s dependent family members underhealth, hospitalization, disability, dental, life and other insurance plansthat the Company may have in effect from time to time, with benefits providedto Executive under this clause (ii) to be at least equal to such benefitsprovided to Company employees generally, and participation in any seniorexecutive health plans established by the Company.

 

(iii)          Reimbursementfor all business travel and other out-of-pocket expenses reasonably incurred byExecutive in the performance of Executive’s services pursuant to thisAgreement.  All reimbursable expensesshall be appropriately documented in reasonable detail by Executive uponsubmission of any request for reimbursement, and in a format and mannerconsistent with the Company’s expense reporting policy.

 

(iv)          TheCompany shall provide Executive with executive perquisites as may be availableto or deemed appropriate for Executive by the Board, including participation inall other Company-wide employee benefits, including equity incentive plans andprograms at levels comparable to the President of the Flat Rolled Group as areavailable from time to time.

 

3.             Non-CompetitionAgreement.

 

(a)           Executiveshall not, during the term of Executive’s employment hereunder, be engaged inany other business activity pursued for gain, profit or other pecuniaryadvantage unless, in its sole discretion, the Company has determined that suchbusiness activity will not interfere with Executive’s duties andresponsibilities hereunder.  Theforegoing limitations shall not be construed as prohibiting Executive frommaking personal investments in such form or manner as will neither requireExecutive’s services in the operation or affairs of the companies orenterprises in which such investments are made nor violate the terms of this Section3.  In addition, Executive shall not,during the period of Executive’s employment by or with the Company, and for aperiod of twelve

 

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(12) months immediately following terminationof Executive’s employment pursuant to Sections 4(b)(ii), (iii), (iv) or (v) ofthis Agreement (such period to be referred to as the “Restricted Period”),directly or indirectly, for Executive or on behalf of or in conjunction withany other person, persons, company, partnership, corporation or business ofwhatever nature:

 

(i)            engage,as an officer, director, shareholder, owner, partner, joint venturer, or in amanagerial capacity, whether as an employee, independent contractor, consultantor advisor, or as a sales representative, in the business of a metal servicecenter as currently operated by the Company’s Plates and Shapes Group (“Plates& Shapes”), within 200 miles of where any Plates & Shapes entityconducts business, including any territory serviced by Plates & Shapes (the“Territory”);

 

(ii)           callupon any person who is, at that time, an employee of the Company (including itssubsidiaries) in a managerial capacity for the purpose or with the intent ofenticing such employee away from or out of the employ of the Company (includingits subsidiaries);

 

(iii)          callupon any person or entity which is, at that time, or which has been, withintwelve (12) months prior to that time, a customer of Plates & Shapes withinthe Territory for the purpose of soliciting or selling products or services incompetition with Plates & Shapes within the Territory; or

 

(iv)          callupon any prospective acquisition candidate, on Executive’s own behalf or onbehalf of any competitor, which candidate was, to Executive’s actual knowledgeafter due inquiry, either called upon by the Company (including itssubsidiaries) or for which the Company made an acquisition analysis, for thepurpose of acquiring such entity.

 

Notwithstanding the above, the foregoingcovenant shall not be deemed to prohibit Executive from acquiring as aninvestment not more than one percent (1%) of the capital stock of a competingbusiness, whose stock is traded on a national securities exchange orover-the-counter.

 

(b)           Becauseof the difficulty of measuring economic losses to the Company as a result of abreach of the covenants in this Section 3, and because of the immediate andirreparable damage that could be caused to the Company for which it would haveno other adequate remedy, Executive agrees that the foregoing covenant may beenforced by the Company in the event of breach by Executive, by injunctions andrestraining orders.

 

(c)           Itis agreed by the parties that the foregoing covenants in this Section 3 imposea reasonable restraint on Executive in light of the activities and business ofthe Company on the date of the execution of this Agreement and the currentplans of the Company but it is also the intent of the Company and Executivethat such covenants be construed and enforced in accordance with the changingactivities, business and locations

 

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of the Company throughout the term of thiscovenant, whether before or after the date of termination of the employment ofExecutive.  For example, if, during theterm of this Agreement, the Company engages in new and different activities,enters a new business or establishes new locations for its current activitiesor business in addition to or other than the activities or business enumeratedunder the Recitals above or the locations currently established therefore, thenExecutive will be precluded from soliciting the customers or employees of suchnew activities or business or from such new location and from directlycompeting with such new business within 200 miles of its then-establishedoperating location(s) through the term of this covenant.  It is further agreed by the parties heretothat, in the event that Executive shall cease to be employed hereunder, andshall enter into a business or pursue other activities not in competition withthe Company, or similar activities or business in locations the operation ofwhich, under such circumstances, does not violate clause (a) of this Section 3,and in any event such new business, activities or location are not in violationof this Section 3 or of Executive’s obligations under this Section 3, if any,Executive shall not be chargeable with a violation of this Section 3 if theCompany shall thereafter enter the same, similar or a competitive (i) business,(ii) course of activities or (iii) location, as applicable unless the businessplans of the Company or any of its subsidiaries at the time of Executive’stermination of employment include similar lines of business or activities..

 

(d)           Thecovenants in this Section 3 are severable and separate, and theunenforceability of any specific covenant shall not affect the provisions ofany other covenant.  Moreover, in theevent any court of competent jurisdiction shall determine that the scope, timeor territorial restrictions set forth are too broad or unreasonable, then it isthe intention of the parties that such restrictions be enforced to the fullestextent which the court deems reasonable, and the Agreement shall thereby bereformed.  If any portion of thisSection 3 shall be invalid or unenforceable, such invalidity orunenforceability shall in no way be deemed or construed to affect in any waythe enforceability of any other portion of this Section 3.

 

(e)           Allof the covenants in this Section 3 shall be construed as an agreementindependent of any other provision in this Agreement, and the existence of anyclaim or cause of action of Executive against the Company, whether predicatedon this Agreement or otherwise, shall not constitute a defense to theenforcement by the Company of such covenants. It is specifically agreed that the period of twelve (12) monthsfollowing termination of employment stated at the beginning of this Section 3,during which the agreements and covenants of Executive made in this Section 3shall continue to be effective, shall be computed by excluding from suchcomputation any time during which Executive is in violation of any provision ofthis Section 3.  Executive specificallyagrees that the restrictions in this Section 3 are reasonable, and that none ofthe restrictions shall cause any unreasonable hardship to Executive.

 

4.             Term;Termination; Rights on Termination.

 

(a)           *General*.  Executive’s employment under this Agreementshall begin on the Effective Date and continue for twenty six (26) months untilDecember 31, 2004 (the “Term”) unless it is terminated earlier pursuant to theprovisions of this Section 4.  Either

 

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party may elect to not renew this Agreementfor one additional year by giving the other party at least ninety (90) dayswritten notice prior to December 31, 2004 that such party will not renew thisAgreement.  Unless Executive elects notto renew this Agreement as provided above, Company shall have the option to extendthe term of this Agreement for one (1) year, on the same terms as then inexistence, provided that Company gives Executive at least ninety (90) dayswritten notice prior to December 31, 2004 (the “Renewal Term”).

 

(b)           *Termination, Non-Renewal. *This Agreement and Executive’s employment may beterminated in any one of the following ways

 

(i)            *Death.*  The death of Executive shall immediatelyterminate this Agreement with no severance compensation due to Executive’sestate.

 

(ii)           *Disability.*  If, as a result of incapacity due tophysical or mental illness or injury, Executive shall have been absent fromfull-time duties hereunder for four (4) consecutive months, or one hundredtwenty (120) days in any rolling one-year period, then thirty (30) days afterreceiving written notice (which notice may occur before or after the end ofsuch four (4) month or one hundred twenty (120) day period, but which shall notbe effective earlier than the last day of either such period), the Company mayterminate Executive’s employment hereunder provided Executive is unable toresume full-time duties with or without reasonable accommodation at theconclusion of such notice period.  Also,Executive may terminate Executive’s employment hereunder if Executive’s healthshould become impaired to an extent that makes the continued performance ofExecutive’s duties hereunder hazardous to Executive’s physical or mental healthor life, provided that Executive shall have furnished the Company with awritten statement from a qualified doctor to such effect and provided, further,that, at the Company’s request made within thirty (30) days of the date of suchwritten statement, Executive shall submit to an examination by a doctorselected by the Company who is reasonably acceptable to Executive orExecutive’s doctor.  In the event thisAgreement is terminated as a result of Executive’s disability, Executive shallreceive from the Company, in a lump-sum payment due within ten (10) days of theeffective date of termination, the base salary at the rate then in effect forwhatever time period is remaining under the Term or Renewal Term (as the casemay be) for one (1) year, whichever amount is greater; provided, however, thatany such payments shall be reduced by the amount of any disability insurancepayments payable to the Executive as a result of such disability.

 

(iii)          *Cause.*  The Company may terminate this Agreementimmediately for Cause (defined below). In the event of a termination for Cause, Executive shall have no rightto any severance compensation.

 

(iv)          *WithoutCause or by Executive for Good Reason*.  At any time after the commencement of employment, the Company mayterminate this Agreement without Cause or Executive may terminate thisAgreement for Good Reason (defined below), effective thirty (30) days afterwritten notice is provided to the

 

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other party. Should Executive be terminated by the Company without Cause or shouldExecutive terminate with Good Reason during the Term or the Renewal Term (asthe case may be), Executive shall receive from the Company, within fourteen(14) days of the effective date of termination, the greater of (a) the basesalary and bonus to be paid for the remaining Term or (b) $350,000.

 

(v)           *Resignationor Termination without Good Reason*. If Executive resigns or otherwise terminates his employment without GoodReason, Executive shall receive no severance compensation.

 

(vi)          *Non-Renewal, Extension of Non-Compete after RenewalTerm. *In the event eitherthe Company or Executive elects not to renew this Agreement for the one-yearRenewal Term as provided herein, then Executive shall not be bound by thenon-competition terms set forth in Section 3 above after the end of theTerm.  However, in the event of:  (1) a non-renewal election by either partyat the end of the Term, or (2) a termination of employment by the Companywithout Cause or by Executive for Good Reason during the Renewal Term, theCompany shall have the exclusive right to elect to pay Executive an aggregateamount of $100,000 in cash over twelve (12) months from the end of the Term orRenewal Term (as the case may be), payable in installments as determined by theparties, plus Executive shall also receive twelve (12) months of Company healthbenefits and other perquisites commencing at the end of the Term or RenewalTerm (as the case may be), on an uninterrupted basis, and Executive shall besubject to the terms and conditions of Section 3 for an additional twelve (12)months commencing at the end of the Term or Renewal Term (as the case may be).

 

(c)           *CertainTerminations.*  If Executiveis terminated without Cause or terminates his employment hereunder with GoodReason, (1) Executive shall receive twelve (12) months of Company healthbenefits and other perquisites commencing at the end of the Term or RenewalTerm (as the case may be), on an uninterrupted basis, and (2) the vestingof all of Executive’s unvested stock grants or stock options (if any are thenoutstanding) shall be immediately accelerated upon the date of termination of employmentand, with respect to any stock options, shall remain outstanding andexercisable for the period set forth in the applicable option agreement oroption plan.

 

(d)           *Effect ofAny Termination of Employment*. Upon termination of this Agreement for any reason, Executive shall beentitled to receive all earned and unpaid compensation and all benefits andreimbursements due through the effective date of termination.  Additional compensation subsequent totermination, if any, will be due and payable to Executive only to the extentand in the manner expressly provided herein. Except with respect to any benefits or payments to which Executive maybe entitled under the terms and conditions of any benefit plan or applicable law,all other rights and obligations of the Company and Executive under thisAgreement shall cease as of the effective date of termination; provided,however, that the parties agree that the Company’s obligations under thisSection 4 and Section 8, and Executive’s obligations

 

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under Sections 3, 5, 6, 7 and 15 herein shallsurvive such termination in accordance with their terms unless otherwiseprovided herein.

 

(e)           *Definitions.*

 

(i)            “Cause”shall mean any of the following:  (a)Executive’s material breach of this Agreement, including any of Company’spolicies included or applicable under Section 1(b) above; (b) Executive’snegligence in the performance or intentional nonperformance of any ofExecutive’s material duties and responsibilities hereunder after ten (10) dayswritten notice during which Executive has not cured such negligence orintentional nonperformance; (c) Executive’s dishonesty, fraud or misconductwith respect to the business or affairs of the Company which  adversely affect the operations orreputation of the Company.

 

(ii)           “GoodReason” shall mean any of the following: (a) Executive is demoted by means of an absolute reduction in authority,responsibilities or duties to a position of less stature or importance withinthe Company than the position described in Section 1 hereof; or (b) Executive’sannual base salary as determined pursuant to Section 2 hereof is reduced,unless Executive has agreed in writing to that demotion or reduction or (c)Company materially breaches this Agreement with respect to payment ofcompensation hereunder; or (d) the relocation of Executive’s office more thanfifty (50) miles from its location on the Effective Date without Executive’swritten concurrence; provided, however, that if any office relocation in excessof fifty (50) miles should result in Executive’s home at the time of therelocation being closer to the new office than prior to the relocation, suchrelocation shall not be an occurrence of “Good Reason.”

 

5.             Returnof Company Property.  All records,designs, patents, business plans, financial statements, manuals, memoranda,lists and other property delivered to or compiled by Executive by or on behalfof the Company, its subsidiaries or their representatives, vendors or customerswhich pertain to the business of the Company shall be and remain the propertyof the Company and be subject at all times to its discretion and control.  Likewise, all correspondence, reports,records, charts, advertising materials and other similar data pertaining to thebusiness, activities or future plans of the Company which is collected byExecutive shall be delivered promptly to the Company without request by it upontermination of Executive’s employment.

 

6.             Inventions.  Executive shall disclose promptly to theCompany any and all significant conceptions and ideas for inventions,improvements and valuable discoveries, whether patentable or not, which areconceived or made by Executive, solely or jointly with another, during theperiod of employment or within one (1) year thereafter, and which are directlyrelated to the business or activities of the Company or its subsidiaries andwhich Executive conceives as a result of Executive’s employment by theCompany.  Executive hereby assigns andagrees to assign all Executive’s interests therein to the Company or itsnominee.  Whenever requested to do so bythe Company, Executive shall

 

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execute any and all applications, assignmentsor other instruments that the Company shall deem necessary to apply for andobtain Letters Patent of the United States or any foreign country or tootherwise protect the Company’s interest therein.

 

7.             Confidentiality.  During the Restricted Period and thereafter,except as provided below, Executive shall not, without the written consent ofthe Board or a person authorized thereby, disclose to any person, other than anemployee of the Company or any of its subsidiaries or a person to whomdisclosure is reasonably necessary or appropriate in connection with theperformance by Executive of his duties as an executive of the Company, anyconfidential information learned by him while in the employ of the Company withrespect to the Company’s business, including but not limited to trade secrets,technology, know-how, processes, any business data, information regarding anyof the Company’s or its subsidiaries’ customers, practices, or operations, andother proprietary information, the disclosure of which Executive knows orshould know will be damaging to the business, strategy or reputation of theCompany or any of its subsidiaries; provided however, that confidentialinformation shall not include any information (i) known to Executive or inExecutive’s lawful possession at the Effective Date of this Agreement, (ii)known generally to the public (other than as a result of unauthorizeddisclosure by Executive), (iii) of a type not reasonably consideredconfidential by persons engaged in the same business or a business similar tothat conducted by the Company or any subsidiary, or (iv) which Executive may berequired to disclose by any applicable law, order, or judicial oradministrative proceeding.

 

8.             Indemnification.  In the event Executive is made a party toany threatened, pending or contemplated action, suit or proceeding, whethercivil, criminal, administrative or investigative (other than an action by theCompany against Executive or by Executive against the Company), by reason ofthe fact that Executive is or was performing services under this Agreement, thenthe Company shall indemnify Executive against all expenses (includingattorneys’ fees), judgments, fines and amounts paid in settlement, as actuallyand reasonably incurred by Executive in connection therewith.  In the event that both Executive and theCompany are made a party to the same third party action, complaint, suit orproceeding, the Company agrees to engage counsel, and Executive agrees to usethe same counsel, provided that if counsel selected by the Company shall have aconflict of interest that prevents such counsel from representing Executive,Executive may engage separate counsel and the Company shall pay all reasonableattorneys’ fees of such separate counsel. The Company shall not be required to pay the fees of more than one lawfirm except as described in the preceding sentence, and shall not be requiredto pay the fees of more than two law firms under any circumstances.  Further, while Executive is expected at alltimes to use Executive’s best efforts to faithfully discharge Executive’sduties under this Agreement, Executive cannot be held liable to the Company forerrors or omissions made in good faith where Executive has not exhibited grossnegligence, intentional nonperformance of his duties hereunder, willfuldishonesty, fraud or misconduct, or performed criminal or fraudulent acts whichmaterially damage the business of the Company.

 

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9.             NoPrior Agreements.  Executive herebyrepresents and warrants to the Company that the execution of this Agreement byExecutive and Executive’s employment by the Company and the performance ofExecutive’s duties hereunder will not violate or be a breach of any agreementwith a former employer, client or any other person or entity.  Further, Executive agrees to indemnify theCompany for any claim, including, but not limited to, attorneys’ fees andexpenses of investigation, by any such third party that such third party maynow have or may hereafter come to have against the Company based upon or arisingout of any non-competition agreement, invention or secrecy agreement betweenExecutive and such third party which was in existence as of the date of thisAgreement.

 

10.           Assignment;Binding Effect.  Executiveunderstands that Executive has been selected for employment by the Company onthe basis of Executive’s personal qualifications, experience and skills.  Executive agrees, therefore, that Executivecannot assign all or any portion of Executive’s performance under thisAgreement.  Subject to the preceding,this Agreement shall be binding upon, inure to the benefit of and beenforceable by the parties hereto and their respective heirs, legalrepresentatives, successors and assigns.

 

11.           Changein Control.

 

(a)           Executiveunderstands and acknowledges that the Company or Plates & Shapes may besold, merged or consolidated with or into another entity or that the Companymay undergo another type of Change in Control. In the event such a sale, merger or consolidation or other Change inControl is initiated and consummated prior to the end of the Term or theRenewal Term, then the provisions of this Section 11 shall be applicable.

 

(b)           Inthe event of a Change in Control, then such Change in Control shall be deemedto be a termination of this Agreement by the Company without Cause during theTerm or the Renewal Term and Executive shall be paid a lump sum payment equalto the greater of (a) the remaining amount due under this Agreement (basesalary plus bonus) as if the Term had continued; or (b) the total compensation(base salary plus one year’s bonus) paid to Executive over the previous twelve(12) months; plus Executive shall receive the benefits set forth in Section4(c) above, and Executive shall be bound by the terms of Section 3 for twelve(12) months beyond December 31, 2004 or December 31, 2005, as the case maybe.  In addition, the Company, or itssuccessor, shall retain the right until the date upon which Executive’semployment would otherwise have ended on the last day of the Term or theRenewal Term, as the case may be, to elect to extend the non-competition termsof Section 3 for (twelve) 12 months by electing to compensate Executive asprovided in Section 4(b)(vi) during the twelve-month period following the endof the Term or Renewal Term, as the case may be.

 

(c)           Theeffective date of termination will be the closing date of the transactiongiving rise to the Change in Control and all compensation, reimbursements andlump-sum payments due Executive must be paid in full by the Company at or priorto such

 

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closing. The vesting of all unvested options and grants of stock shall beimmediately accelerated upon the Change in Control, and Executive will be givensufficient time and opportunity to elect whether to exercise all or any of hisvested options and stock grants, such that he may convert the options and stockgrants to shares of the Company’s Common Stock at or prior to the closing ofthe transaction giving rise to the Change in Control, if he so desires.

 

(d)           A“Change in Control” shall be deemed to have occurred if:

 

(i)            anyperson, other than the Company or an employee benefit plan of the Company,acquires directly or indirectly the beneficial ownership (as defined in Section13(d) of the Securities Exchange Act of 1934, as amended) of any votingsecurity of the Company and immediately after such acquisition such Person is,directly or indirectly, the Beneficial Owner of voting securities representing50% or more of the total voting power of all of the then-outstandingvoting securities of the Company;

 

(ii)           thefollowing individuals no longer constitute a majority of the members of theBoard of Directors of the Company:  (A)the individuals who, as of November 1, 2002, constitute the Board of Directorsof the Company (the “Original Directors”); (B) the individuals who thereafterare elected to the Board of Directors of the Company and whose election ornomination for election, to the Board of Directors of the Company was approvedby a vote of at least two-thirds (2/3) of the Original Directors thenstill in office (such directors becoming “Additional Original Directors”immediately following their election); and (C) the individuals who are electedto the Board of Directors of the Company and whose election or nomination forelection, to the Board of Directors of the Company was approved by a vote of atleast two-thirds (2/3) of the Original Directors and Additional OriginalDirectors then still in office (such directors also becoming “AdditionalOriginal Directors” immediately following their election);

 

(iii)          theBoard and/or the Stockholders of the Company shall approve the sale orliquidation distribution of more than 50% of the “Plates and Shapes Group”operations to an entity not owned or controlled by the Company; or

 

(iv)          thestockholders of the Company shall approve a plan of complete liquidation of theCompany or an agreement for the sale or disposition by the Company of all or asubstantial portion of the Company’s assets (i.e., 50% or more of the totalassets of the Company).

 

(e)           Executivemust be notified in writing by the Company at any time that the Company or anymember of its Board anticipates that a Change in Control may take place.

 

(f)            Executiveshall be reimbursed by the Company or its successor for any excise taxes thatExecutive incurs under Section 4999 of the Internal Revenue Code of

 

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1986, as a result of any Change inControl.  Such amount will be due andpayable by the Company or its successor within ten (10) days after Executivedelivers a written request for reimbursement accompanied by a copy of his taxreturn(s) showing the excise tax actually incurred by Executive.

 

12.           CompleteAgreement.  This Agreement setsforth the entire agreement of the parties hereto relating to the subject matterhereof and supersedes any other employment agreements or understandings,written or oral, between the Company and Executive.  This Agreement is not a promise of future employment.  Executive has no oral representations,understanding or agreements with the Company or any of its officers, directorsor representatives covering the same subject matter as this Agreement.  This written Agreement is the final,complete and exclusive statement and expression of the agreement between theCompany and Executive and of all the terms of this Agreement, and it cannot bevaried, contradicted or supplemented by evidence of any prior orcontemporaneous oral or written agreement. This written Agreement may not be later modified except by writtenagreement signed by a duly authorized officer of the Company and Executive, andno term of this Agreement may be waived except by a writing signed by the partywaiving the benefit of such term.

 

13.           Notice.  Whenever any notice is required hereunder,it shall be given in writing addressed as follows:

 
| To The  Company: |   | Metals USA,  Inc.                         |
|------------------|--------|-------------------------------------------|
|             |   | Attn:  John Hageman, General Counsel |
|             |   | Three  Riverway, Suite 600                |
|             |   | Houston,  Texas  77056               |
|             |   | Telephone:  713/965-0990                  |
|             |   | Fax:  713/965-0067                   |
|             |   |                                      |
| To  Executive:   |   | William R.  Bennett                       |
|             |   | 709 Planters  Row                         |
|             |   | Wilmington,  N.C. 28405                   |

 

Notice shall be deemed given and effective onthe earlier of three (3) days after the deposit in the U.S. mail of a writingaddressed as above and sent first class mail, certified, return receiptrequested, or when actually received by means of hand delivery, delivery byFederal Express or other courier service, or by facsimile transmission.  Either party may change the address fornotice by notifying the other party of such change in accordance with thisSection 13.

 

14.           Severability;Headings.  If any portion of thisAgreement is held invalid or inoperative, the other portions of this Agreementshall be deemed valid and operative and, so far as is reasonable and possible,effect shall be given to the intent manifested by the portion held invalid orinoperative.  The Section headingsherein are for reference purposes only and are not intended in any way todescribe, interpret, define or limit the extent or intent of the Agreement orof any part hereof.

 

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15.           Arbitration.  With the exception of Sections 3, 6 and 7,any unresolved dispute or controversy arising under or in connection with thisAgreement shall be settled exclusively by arbitration, conducted before a panelof three (3) arbitrators in Wilmington, North Carolina  in accordance with the National Rules forthe Resolution of Employment Disputes of the American Arbitration Association(“AAA”) then in effect, provided that Executive shall comply with the Company’sgrievance procedures in an effort to resolve such dispute or controversy beforeresorting to arbitration, and provided further that the parties may agree touse arbitrators other than those provided by the AAA.  The arbitrators shall not have the authority to add to, detractfrom, or modify any provision hereof not to award punitive damages to anyinjured party.  The arbitrators shallhave the authority to order back-pay, severance compensation, vesting ofoptions (or cash compensation in lieu of vesting of options), reimbursement ofcosts, including those incurred to enforce this Agreement, and interest thereonin the event the arbitrators determine that Executive was terminated withoutdisability or Cause, or that the Company has otherwise materially breached thisAgreement.  A decision by a majority ofthe arbitration panel shall be final and binding.  Judgment may be entered on the arbitrator’s award in any courthaving jurisdiction.  The direct expenseof any arbitration proceeding shall be divided equally between the parties andeach party shall pay its own attorneys’ fees regardless of the outcome of thearbitration.

 

16.           GoverningLaw.  This Agreement shall in allrespects be construed according to the laws of the State of North Carolina.

 

17.           Counterparts.  This Agreement may be executedsimultaneously in two (2) or more counterparts, each of which shall be deemedan original and all of which together shall constitute but one and the sameinstrument.

 

**-SIGNATURE PAGE FOLLOWS -**

 

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IN WITNESS WHEREOF, the parties hereto haveexecuted this Agreement as of the day and year first above written.

 
|   | COMPANY:               |
|--------|------------------------|
|   |                   |
|   | METALS USA, INC.       |
|   |                   |
|   |                   |
|   | By:                    | /s/ JOHN A HAGEMAN |
|   | Name:                  | John A Hageman |
|   | Title:                 | Sr. Vice President & General Counsel |
|   |                   |
|   |                   |
|   | EXECUTIVE:             |
|   |                   |
|   |                   |
|   | /s/ WILLIAM R. BENNETT |
|   | William R. Bennett     |
|        |                        |  |  |  |

 

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