**EXHIBIT 10.26**

 

**EMPLOYMENT AGREEMENT**

 

THIS AGREEMENT is entered into effective as of this 1st day of November 2001 (the “EffectiveDate”), by and between IMCO Management Partnership L.P., a Texas limited partnership (the “Company”), IMCO Recycling Inc., a Delaware corporation (“IMCO”) and W. Lane Pennington residing at 4205 Amherst, Dallas, Texas 75225(the “Executive”). 

 

**WITNESS**

 

WHEREAS, the Company performs managementand administrative services for IMCO and IMCO’s subsidiaries and affiliates (hereinafter IMCO and IMCO’s subsidiaries and affiliates are collectively referred to as the “IMCO Group”) pursuant to management services agreements(the “IMCO Engagement”); 

 

WHEREAS, theCompany has employed the Executive to devote his full time, attention and energies in performing the specific duties assigned to him with respect to the IMCO Engagement and such other duties as the Company may assign him to perform; 

 

WHEREAS, as part of the IMCO Engagement, the Executive hasbeen assigned the duties and elected an Executive Vice President and appointed to the position of President, International. 

 

WHEREAS, the Company and IMCO consider an agreement related to the employment of the Executive to be in the best interests of the Companyand vital to the IMCO Engagement; 

 

WHEREAS, ifthe Executive’s employment is terminated during the Term of this Agreement, the Company also desires to retain the Executive’s services in an advisory and consulting capacity and to prevent any other business competitive with IMCO, theIMCO Group or the Company from securing his services and utilizing his experience, background and expertise during the post employment period the Executive’s services are retained; 

 

WHEREAS, the Executive considers an agreement related to his employment with the Company and the IMCOEngagement including the period during which his post employment services are retained by the Company to be in his best interests; and 

 

WHEREAS, the Company, IMCO and Executive desire that the Executive’s employment with the Company and his service as an executiveofficer of IMCO be in accordance with the provisions contained in this Agreement. 

 

NOW, THEREFORE, in consideration of the premises and the respective covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which arehereby acknowledged and confessed, the Company, IMCO and Executive agree as follows: 

 

**ARTICLE I**

**EMPLOYMENT**

 

1.1 Statement of Employment. Commencing on the Effective Date hereof, the Company and Executive agree that Executive’semployment by the Company and the performance of his duties and obligations as [a senior officer] of IMCO is governed by and subject to the agreements, representations, terms, warranties, covenants, conditions and other provisions contained herein.

 

1.2 Term. Subject to the provisions ofArticles V and IX below, this Agreement shall commence on the Effective Date, and, shall continue for a two year period until October 21, 2003, and thereafter, the term will be automatically extended for successive periods of one year, unless priorto the end of the original two-year period (or, if applicable, any successive one-year period) the Company gives the Executive at least ninety (90) days prior written notice that the Company has decided not to extend this Agreement’s term.Notwithstanding the foregoing, the Term of this Agreement (as that term is defined in Section 5.1(g)) shall not extend past that day which is the fifth (5th) anniversary date of the Effective Date; provided, that in the event that this Agreement has not sooner terminated, the Company and the Compensation Committee of the Board of Directors of IMCO willreview this Agreement regarding any additional renewal thereof during that period beginning on that day which is the fourth anniversary date of the date of the Effective Date, and that date which is ninety (90) days before the fifth anniversary dateof the Effective Date. 

 

1.3 Duties andObligations. The Executive agrees he must devote his best efforts and all of his business time and attention to the business and affairs of IMCO, the IMCO Group and the Company and that he will perform his duties as a senior officer of IMCO tothe reasonable satisfaction of (i) the President and/or the Chief Executive Officer (“CEO”) of IMCO or any other individual who is designated as his superior by the CEO or the Board of Directors of IMCO (the “Board of Directors”)(hereafter the individual(s) the Executive reports to will be referred to individually and collectively as the “Supervising Officer”) and (ii) the Board of Directors.****Subject to the direction of the Supervising Officer, theExecutive has the responsibilities and must perform such duties and exercise such power and authority as are customarily performed by one holding the position he holds with IMCO in businesses or enterprises that are similar in nature and including,without limitation, performing such duties and holding such positions within the IMCO Group as may be assigned by the Supervising Officer. The Executive agrees that he must not delegate any or all of his duties or obligations under this Agreement,except as may be authorized by the Company, the Supervising Officer or the Board of Directors. 

 

**ARTICLE II**

**SALARY**

 

2.1 Annual Base Salary. The Executive shall receive anannual base salary from the Company with the amount established based on a determination made by the Company and approved by IMCO. The annual base salary will be payable in equal semi-monthly installments (less applicable withholding) in accordancewith the customary payroll practices of the Company for the payment of executives. It is expressly understood and agreed that the Executive will not be entitled 

 

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to director’s fees for his service on the Board of Directors or any of the boards of directors of theother companies in the IMCO Group. 

 

**ARTICLE III**

**BONUSES AND INCENTIVE PAYMENTS**

 

3.1 Plan Bonuses and Incentive Payments. The Executive is eligible to receive bonuses and otherincentive payments in an amount calculated in accordance with the provisions contained in the executive incentive plans of the Company and IMCO, including IMCO’s Annual Incentive Compensation Plan adopted in 1999 and the Performance Share UnitPlan adopted in 2000 or any successor plans (hereafter individually and collectively referred to as the “Incentive Plans”). 

 

3.2 Additional Bonuses and Incentive Payments. The Company or IMCO may, in its sole and absolute discretion, grant bonuses andother incentive payments to the Executive in addition to those granted under the Incentive Plans. 

 

**ARTICLE IV**

**OTHER EXECUTIVE BENEFITS AND REIMBURSEMENTS**

 

4.1 Benefits Plan. The Executive isentitled to full participation as a senior manager in IMCO’s Benefits Plan, as amended from time to time, subject to the terms and conditions of IMCO’s Benefits Plan’s documents governing the various plans that are included withinIMCO’s Benefits Plan and applicable law (hereinafter referred to as “ IMCO’s Benefits Plan”); provided, however, that nothing contained in this Section 4.1 will be construed to obligate IMCO or the Company to provide any benefitsother than those generally provided to senior managers under IMCO’s Benefits Plan. As of the date hereof, the benefits provided to the Executive under IMCO’s Benefits Plan include: a Group Life and Accidental Death and DismembermentInsurance Program for Senior Management, a Group Long Term Disability Insurance Program, a Section “125” Plan, a Retirement Savings Plan, a major medical plan including hospital, physicians, prescription drugs and dental benefits, aneducational assistance program, a vacation policy, a relocation expense policy, a restricted duty policy, a leave of absence policy and the other benefit policies identified in IMCO’s Human Resources’ Manual that are generally available tosenior managers. Subject to Section 4.6 and Section 4.7 hereof, nothing contained herein shall affect the ability of the Company, IMCO or the IMCO Group, to terminate any IMCO Benefit Plan, or modify or amend the terms thereof. 

 

4.2 Stock Option Plans. The Executive is entitled toreceive the benefits of and to participate in IMCO’s 1992 Stock Option Plan, as amended from time to time, and the Annual Incentive Plan of IMCO adopted in 1996, subject to the terms and conditions that govern these plans (hereinaftercollectively referred to as the “Stock Option Plans”). 

 

4.3 Additional Life Insurance. The Executive is entitled to a split-dollar life insurance policy on Executive’s life, which shall pay $1,000,000 upon the death of Executive to such beneficiary or beneficiaries, asExecutive shall designate. The aforementioned insurance policy shall be in addition to the insurance benefits the Executive is entitled to under IMCO’s Group Life and 

 

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Accidental Death and Dismemberment Insurance Program and is subject to a separate agreement between theExecutive and IMCO. 

 

4.4 Annual Physical.The Executive shall be required to complete a mandatory annual physical at the Cooper Clinic in Dallas or at a comparable facility. Final payment of the annual bonus will be subject to completion of the annual physical. 

 

4.5 Expense Reimbursement. The Executive shall beentitled to reimbursement of reasonable out of pocket expenses relating to the Company’s business in accordance with policies in effect for executives generally. 

 

4.6 Generally. On a basis commensurate with his position with the Company and in accordance with theterms of the designated plan, the Executive shall be entitled to receive such benefits and to participate fully in all other plans of life, accident, medical payment, health and disability insurance, stock options or other long-term incentivecompensation awards, stock ownership, retirement, pension, perquisites and other benefit plans which generally are made available to executives of the Company or IMCO, subject to and in accordance with the terms of such plans or awards. In the eventthere is a Change in Control (as defined in Section 5.1(f)), the Executive’s benefits and participation in incentive, savings, welfare benefit (life, accident, medical payment, health and disability insurance, etc.), fringe benefit, pension,retirement and other benefit plans after the Change in Control shall be at least equal to the benefits and participation applicable to the Executive under the Company or IMCO plans that were in effect during the 120-day period prior to the Change inControl. The Executive specifically agrees that the rights and benefits granted to the Executive in the preceding sentence of this Section 4.6 when there is a Change in Control do not apply to the Stock Option Plans or any option, performance shareunit, restricted stock, share appreciation or similar plan that may be adopted after a Change in Control. 

 

4.7 Limitations. Nothing in this Agreement, including the provisions contained in Articles V and VI hereof, shall limit in any wayExecutive’s participation in, or termination of distributions and vested rights under, any pension, profit sharing, insurance, annual incentive plan, long-term incentive plan or other employee benefit plan of IMCO or the Company to which theExecutive is entitled pursuant to the terms of such plans. 

 

**ARTICLE V**

**TERMINATION OF EMPLOYMENT**

 

5.1 Certain Definitions. The following terms have therespective meanings when utilized in this Agreement: 

 

(a) “Salary” means, as of a given date, the Executive’s current annual base salary as provided for in Article II and “Bonus” means, as of a given date, any bonuses and incentive payments as provided inArticle III that are due and payable to the Executive pursuant to the terms of such incentive payments and/or outstanding grants. 

 

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(b)“Confidential Information” means all proprietary information of a special unique nature and value to IMCO, the IMCO Group, or the Company and all other information of any kind, nature, type, or description that is important, confidentialor otherwise concerns any material matter affecting or relating to the business of IMCO, the IMCO Group, or the Company, whether or not developed, devised or otherwise created in whole or in part by the efforts of the Executive, including, withoutlimiting the generality of the foregoing, information regarding and relating to rotary furnaces, sortation technologies, process flow technologies, strategic initiatives, technological summaries, trade secrets, improvements or know-how, concepts,ideas, discoveries, applications, inventions, patents, patentable information and data, software, source code, processes, products, services, plans, programs, systems, procedures, manuals, employment agreements, confidential reports, contracts,customers, sales, distribution, marketing, methods of operation, manufacturing, purchasing, suppliers, research and development, engineering, financing, buyouts, joint ventures, mergers, acquisitions, litigation and other legal matters, andaccounting and other financial information that concerns IMCO, the IMCO Group, or the Company. When used or referred to in this Agreement, Confidential Information does not include any information that is now in, or hereafter comes into, the publicdomain through no act or omission of the Executive; any information that at the time of disclosure to the Executive by IMCO, the IMCO Group, or the Company is, or thereafter becomes, through no act or omission of the Executive, generally known inthe industry in which IMCO, the IMCO Group, or the Company is or may be engaged as evidenced by general public knowledge in an integrated form; or any information that is already known to the Executive from a source other than IMCO, the IMCO Group,or the Company as of the date of the disclosure as evidenced by the Executive’s written documentation. 

 

(c) “Cause” means (i) a willful failure or refusal by the Executive to follow the reasonable instructions of the SupervisingOfficer, the Board of Directors or the Company; (ii) a theft, embezzlement, or a willful commission by the Executive of any other acts that are dishonest and materially injurious to IMCO, the Company or the IMCO Group monetarily or otherwise; (iii)the commission by the Executive of a major criminal offense or act of moral turpitude; (iv) an intentional wrongful disclosure of Confidential Information; (v) a gross neglect of the Executive’s duties; or, (vi) a material breach or violationby the Executive of any or all of the covenants, warranties, agreements and obligations set forth in this Agreement or corporate policies; provided that the Company has first notified the Executive in writing of such action or omission by theExecutive, specifying in reasonable detail the facts supporting such determination by the Company, and the Executive has not cured the particular action or omission complained of (provided that such particular action or omission is so capable ofbeing cured) within a reasonable period of time following the date of the notice. 

 

(d) “Total Disability” means any mental or physical illness, condition, disability or incapacity that prevents the Executive from reasonably discharging his duties and responsibilities to theCompany or as a senior officer of IMCO. The Board of Directors, in its sole discretion, will determine whether the Executive suffers from a Total Disability. If there is a disagreement or dispute between the Board of Directors and the Executive asto whether the Executive suffers from a Total Disability, the Executive must submit to a physical and/or mental examination by a physician licensed under the laws of the State of Texas, who will be selected by the Board of Directors, and suchphysician will make the determination whether the Executive suffers from a Total Disability. In 

 

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the absence of fraud or bad faith, the determination of such physician will be final and binding on theCompany, IMCO and the Executive. The entire cost of any such examination will be borne by the Company. Also, failure to comply with the Board of Directors’ request to submit to a physical and/or mental examination shall prevent the Executivefrom challenging the Board of Directors’ decision that the Executive suffers from a Total Disability. 

 

(e) “Resigns for Good Reason” means an Executive resignation caused by and within ninety (90) days following the occurrence ofany one of the following: (i) a transfer or proposed transfer of Executive for a consecutive period in excess of six months to a location outside the Dallas/Fort Worth, Texas metropolitan area, without the Executive’s prior written consent;(ii) the Company reduces the annual base salary of the Executive without the Executive’s prior written consent; (iii) the failure of the Company or IMCO to obtain the express written assumption and agreement to timely perform the Company’sobligations under this Agreement by any successor to the Company as required by Article IX; or (iv) without limiting the generality or effect of the foregoing, the Company’s or IMCO’s failure to materially comply with any of its principalobligations hereunder, unless such failure is caused by Executive’s breach of the terms of this Agreement, or unless such failure to comply is waived in writing by the Executive. Notwithstanding anything else to the contrary herein, theExecutive may not Resign for Good Reason for the occurrences identified in this Section 5.1(e)(i), (ii), or (iv), unless the Company has failed to cure the violation after the Executive has given the Company written notice identifying the violation.The Company shall have five (5) days from receipt of the written notice to cure the violation or, if the violation requires a longer period to cure, the Company pursues a course of action that causes the default to be cured within a reasonableperiod of time. 

 

(f) “Change inControl” means the occurrence of any of the following events: 

 

(i) An acquisition (other than directly from IMCO) of any voting securities of IMCO (the “Voting Securities”) by any “person” (as the term person is used for purposes of Section13(d) or Section 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), immediately after which such Person has “Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated under the Exchange Act)of twenty-five percent (25%) or more of the combined voting power of IMCO’s then outstanding Voting Securities; provided, however, in determining whether a Change in Control has occurred, Voting Securities which are acquired in a“Non-Control Acquisition” (as hereinafter defined) shall not constitute an acquisition which would cause a Change in Control. A “Non-Control Acquisition” shall mean an acquisition by (1) an employee benefit plan (or a trustforming a part thereof) maintained by (A) IMCO or (B) any corporation or other Person of which a majority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by IMCO (for purposes of thisdefinition, a “Subsidiary”) (2) IMCO or its Subsidiaries, or (3) any Person in connection with a “Non-Control Transaction” (as hereinafter defined); 

 

(ii) The individuals who, as of date agreement is approved by the Board of Directors aremembers of the Board of Directors (the “Incumbent Board”), cease for any reason to constitute at least a majority of the members of the Board of Directors; provided, 

 

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however, that if the election, or nomination for election by IMCO’s commonstockholders, of any new director was approved by a vote of at least two-thirds of the Incumbent Board, such new director shall, for purposes of this Plan, be considered as a member of the Incumbent Board; provided further, however, that noindividual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened “Election Contest” (i.e., a solicitation by any Person for the purpose of opposing asolicitation by the Board of Directors with respect to the election or removal of directors at any annual or special meeting of stockholders of IMCO) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person otherthan the Board of Directors (a “Proxy Contest”) including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or 

 

(iii) Approval by the stockholders of IMCO of: 

 

(1) A merger, consolidation or reorganizationinvolving IMCO, unless such merger, consolidation or reorganization is a “Non-Control Transaction.” A “Non-Control Transaction” shall mean a merger, consolidation or reorganization of IMCO where: 

 

(A) the stockholders of IMCO, immediatelybefore such merger, consolidation or reorganization, own directly or indirectly immediately following such merger, consolidation or reorganization, at least fifty-five percent (55%) of the combined voting power of the outstanding voting securitiesof the corporation resulting from such merger or consolidation or reorganization (the “Surviving Corporation”) in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, consolidationor reorganization, 

 

(B) theindividuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation or reorganization constitute at least a majority of the members of the board of directors of theSurviving Corporation, or a corporation beneficially directly or indirectly owning a majority of the Voting Securities of the Surviving Corporation, and 

 

(C) no Person other than (i) IMCO, (ii) any Subsidiary, (iii) any employee benefit plan (or any trust forming a partthereof) maintained by IMCO, the Surviving Corporation, or any Subsidiary, or (iv) any Person who, immediately prior to such merger, consolidation or reorganization had Beneficial Ownership of twenty-five percent (25%) or more of the thenoutstanding Voting Securities, has Beneficial Ownership of twenty-five percent (25%) or more of the combined voting power of the Surviving Corporation’s then outstanding voting securities. 

 

(2) A complete liquidation or dissolution ofIMCO; or 

 

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(3) An agreement for the sale or other disposition of all or substantially all of the assets of IMCO and its Subsidiaries (considered on a consolidated basis) to any Person (other than a transfer to a Subsidiary). 

 

Notwithstanding the foregoing, a Change in Control shall notbe deemed to occur solely because any Person (the “Subject Person”) acquired Beneficial Ownership of more than the permitted amount of the then outstanding Voting Securities as a result of the acquisition of Voting Securities by IMCOwhich, by reducing the number of Voting Securities then outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons, provided that if a Change in Control would occur (but for the operation of this sentence) asa result of the acquisition of Voting Securities by IMCO, and after such share acquisition by IMCO, the Subject Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the then outstanding VotingSecurities Beneficially Owned by the Subject Person, then a Change in Control shall be deemed to occur. For purposes of this Agreement, Change in Control shall also be deemed to include the earlier of the execution and delivery of a bindingagreement to effect a Change in Control or the actual occurrence as set forth above which results in the Change in Control. 

 

(g) “Term of this Agreement” shall mean the period commencing with the Effective Date and ending on the Termination Date.

 

(h) “Termination Date” means theearlier of October 31, 2003 (as such date may be extended by any extensions hereof); or the date of the Executive’s death; or the date designated in this Agreement after the Company or the Executive gives the required notice; or as otherwiseprovided in this Article V or in Article VI. 

 

5.2Death of the Executive. In the event the Executive dies during the Term of this Agreement, the Executive’s employment with the Company will automatically terminate on the date of the Executive’s death. Notwithstanding the provisionsof Article I above, in the event the Executive dies during the Term of this Agreement, within ninety (90) days after the Termination Date, the Executive’s estate, heirs, or beneficiaries, as the case may be, will receive an amount in cashpayable in a lump sum equal to the sum of (a) the Executive’s Salary and Bonus due and payable to the Executive on or before the Termination Date, plus (b) an amount equal to the product of (i) one-twelfth (1/12th) of Executive’s Salary asin effect as of the Termination Date times (ii) the lesser of (A) the number of months remaining prior to the end of the Term of this Agreement, or (B) twelve (12). The Executive’s estate, heirs or beneficiaries, as the case may be, will alsoreceive any benefits that are payable to them under the plans, policies and other provisions set forth in Article IV. 

 

5.3 Employment Terminated by the Company. Notwithstanding any other provision of this Agreement, the Company may only terminate theExecutive’s employment during the Term of this Agreement in accordance with the provisions set forth below: 

 

(a) The Company may terminate the Executive’s employment for Cause only if the determination to terminate the Executive’semployment for Cause is made by an affirmative vote of a majority of the entire Board of Directors. The Termination Date will be that date which is five (5) 

 

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days after the Company has notified the Executive of the Board of Directors’ decision to terminatethe Executive’s employment for Cause. 

 

(b)The Company may terminate the Executive’s employment if he suffers from a Total Disability for a period of more than one hundred twenty (120) consecutive days during any twelve-month period. The Termination Date will be thirty (30) days afterthe Company has notified the Executive of the Company’s decision to terminate the Executive due to a Total Disability. 

 

(c) The Company, in its sole discretion, may terminate the Executive’s employment by giving him not less than thirty (30) daysadvance written notice of the termination. A termination by the Company under this Section 5.3(c) or written notice by the Company that it has decided not to extend the term of this Agreement pursuant to Section 1.2 shall be referred to for allpurposes as being “Terminated Without Cause.” 

 

If the Executive’s employment is terminated by the Company, the Company in the ordinary and normal course of its business is obligated to continue to pay to the Executive, the Executive’s Salary and Bonus (less applicablewithholding) that are due and payable to the Executive on or before the Termination Date. Any unpaid amount of the Executive’s Salary and Bonus will be due and payable as of the Termination Date. The Executive will also receive the benefits andall other amounts that he is entitled to receive pursuant to the provisions contained in Article IV, and any amounts that the Executive is entitled to receive pursuant to the provisions that may apply to the Executive’s situation in Article VI.

 

5.4 Resignation (i.e., Termination ofEmployment) by Executive. If the Executive Resigns for Good Reason after a Change in Control, the Executive’s employment with the Company will terminate thirty (30) days after the Executive has notified the Company of his resignation. Ifthe Executive Resigns for Good Reason other than a situation involving a Change in Control, the Executive’s employment with the Company will terminate forty-five (45) days after the Executive has notified the Company of his resignation. If theExecutive resigns his employment for any other reason (including retirement), the Executive’s employment with the Company will terminate sixty (60) days after the Executive has notified the Company that he is terminating his employment. If theExecutive terminates his employment, the Company in the ordinary and normal course of its business is obligated to continue to pay to the Executive, the Executive’s Salary and Bonus (less applicable withholding) due and payable to the Executiveon or before the Termination Date. The Executive will also receive the benefits and all other amounts that he is entitled to receive pursuant to the provisions contained in Article IV and any amounts that the Executive is entitled to receivepursuant to the provisions that may apply to the Executive’s situation in Article VI. 

 

5.5 No Right to Set Off. Except as specifically provided in Section 6.7, the Company shall not be entitled to set off against the amount payable to the Executive any amounts earned by theExecutive from other employment after the Termination Date or any amounts which might have been earned by the Executive in other employment had he sought such other employment. The amounts payable to the Executive under this Agreement shall not betreated as damages but as compensation to which the Executive is entitled by reason of termination of his employment in the circumstances contemplated by this Agreement. 

 

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5.6Executive’s Remedies. In the event this Agreement is terminated pursuant to any of the provisions contained in this Article V, the Company, IMCO and/or the IMCO Group will be discharged from all of its obligations to the Executive on itspayment to the Executive of the amounts required to be paid in accordance with the provisions of the particular Sections of this Article V under which the termination occurs. The Executive’s sole and exclusive remedy for the termination of thisAgreement prior to the end of the Term of this Agreement regardless of whether the termination is initiated by the Company or by the Executive, and regardless whether the termination is for Cause, will be the payment to the Executive of the amountsrequired to be paid in accordance with the provisions of the particular Section of this Article V under which such termination occurs. 

 

5.7 Testimony and Participation Before or After Termination. The Executive agrees that both during and following the Term of thisAgreement he will be available to testify and/or participate in any proceeding (governmental or otherwise) involving the Company, IMCO and/or the IMCO Group regarding any subject matter occurring prior to the Termination Date or of which heotherwise has knowledge; provided that the foregoing shall not require the Executive to provide testimony in any respect which testimony may, in Executive’s good faith belief, self-incriminate the Executive. The Company agrees to reimburse theExecutive for the reasonable costs he incurs in connection with his testimony or participation, including reasonable attorney’s fees, unless such proceeding is due to the intentional wrongdoing or willful neglect of the Executive or to actionstaken by the Executive outside of the Executive’s authority. 

 

**ARTICLE VI**

**ADDITIONAL COMPENSATION FOR CERTAIN TERMINATIONS**

**AND POST EMPLOYMENT SERVICES**

 

6.1 Purpose; General Summary; and Post Employment Activities. 

 

(a) The Company and the Executive agree that the success and value of IMCO’s, the IMCO Group’s andthe Company’s business depend largely on the favorable reputation and good will that have been created by superior managerial skills, market position, product technology, good customer relations, a stable work force and high employee morale.The Executive recognizes and expressly acknowledges that his services are unique and extraordinary and that he plays an integral and valuable role in sustaining and enhancing the progress, reputation and good will of IMCO, the IMCO Group and/or theCompany. 

 

Executive acknowledges that as of thetime this Agreement is entered into, the Company, IMCO and the IMCO Group are providing to the Executive, on an initial and ongoing basis, now and throughout the Term of this Agreement, Confidential Information and specialized training. The Companyand the Executive also agree that access to IMCO’s, the IMCO Group’s and the Company’s customers and Confidential Information and such specialized training is essential for the most efficient performance of the Executive’s dutiesand obligations. The Executive acknowledges and expressly confirms that in the course of his employment by the Company and in furtherance of his duties and obligations as a senior officer of IMCO, the Executive has developed valuable banking andfinancial, customer and other key relationships and has acquired (and will continue to acquire) 

 

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valuable Confidential Information that would be useful to IMCO’s, the IMCO Group’s and/or theCompany’s competitors and, if so disclosed, would unreasonably harm the business of IMCO, the IMCO Group and/or the Company. 

 

The Executive further acknowledges and specifically agrees he must at all times act in a manner that would augment the reputation and goodwill of IMCO, the IMCO Group and the Company and that it is in the best interest of the Company and the Executive for the parties to reach a mutual agreement under which the Executive’s employment and post-employment activities are subject tocertain restrictions as a means of securing and protecting the reputation, good will, Confidential Information and other valuable protectable interests of IMCO, the IMCO Group and/or the Company. 

 

(b) If the Executive resigns or terminates his employment forany reason or the Executive’s employment is terminated by the Company at any time during the Term of this Agreement or the Company fails to extend the term of this Agreement pursuant to Section 1.2, the Company and the Executive expressly agreethat the Executive will be retained by the Company for a twenty-four month period following the termination of his employment to provide services in an advisory and consulting capacity and to prevent any other business competitive with IMCO, theIMCO Group or the Company from securing his services and utilizing his experience, background and expertise. During this period, the Executive shall receive, as additional compensation, the payments enumerated in this Article VI in exchange for theExecutive’s agreement to continue to actively promote, support, consult with and advise the Company during the said twenty-four month period. The Executive further agrees to abide by and be subject to the restrictions as set forth in ArticleVII regardless of whether the Executive is entitled to any of the payments enumerated in this Article VI. 

 

(c) The Executive also acknowledges, agrees, and warrants for all purposes that the restrictions imposed on his employment and postemployment activities contained in this Article VI and Article VII are reasonable and necessary for the protection of the good will, reputation, Confidential Information and other valuable protectable interests of IMCO, the IMCO Group and/or theCompany and that the additional compensation the Executive will receive, enumerated in this Article VI, is fair and reasonable. 

 

6.2 Termination Without Cause or Executive Resigns for Good Reason Involving a Change of Control. If during the Term of thisAgreement Executive is Terminated Without Cause before that date which is 90 days prior to a Change in Control, the Executive will receive an amount equal to ***1.25 times (1.25x) the Executive’s “Base Amount”*** (as that termis defined in Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”)) (the “Base Amount”), calculated as of the Termination Date. If during the Term of this Agreement (i) the Executive is Terminated WithoutCause on or after that date which is 90 days before a Change in Control, or (ii) the Executive Resigns for Good Reason during the period which begins on that date which is 90 days before a Change in Control and ends on that date which is the secondanniversary date of such Change in Control, then in either of such events, the Executive shall be entitled to receive an amount equal to ***2.00 times (2.00x) the Executive’s Base Amount calculated as of the Termination Date***.

 

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The amountsdescribed in this Section 6.2 shall be in addition to the Salary and Bonus due and payable on or before the Termination Date and all other payments and benefits the Executive is entitled to receive under this Agreement. These amounts will be paid inequal monthly installments over a twenty-three month period following the Termination Date as if the Executive’s employment had continued hereunder payable in accordance with the normal payroll procedures, as the same may be modified from timeto time. In addition: 

 

(a) For the lesser of (1)a period of eighteen (18) months subsequent to the Termination Date or (2) until the Executive obtains comparable coverage under a subsequent employer’s benefit plan or plans, IMCO will pay all of the cost incurred by the Executive for hiscontinued participation in IMCO’s Benefits Plan provided that his continued participation is permitted under the general terms and provisions of the applicable plan, program and/or policy that is included in IMCO’s Benefits Plan. In theevent the Executive’s participation in the Group Life and Accidental Death and Dismemberment Insurance Program for Senior Management, the applicable Group Long Term Disability Insurance Program, the major medical plan which includes hospital,physician, prescription drugs and dental benefits, or any such similar plan, program, or policy is not permitted the Company shall arrange to provide the Executive with benefits substantially similar to those which he is entitled to receive undersuch plans, programs, and policies. The benefits provided during the period of coverage under this Section 6.2(a) shall offset any period of coverage in which the Executive or his dependents may be entitled under the Consolidated Omnibus BudgetReconciliation Act of 1985; and 

 

(b) The Companyshall promptly (and in any event within five business days after a written request by the Executive therefor) either pay or reimburse the Executive for the reasonable costs and expenses of any executive outplacement firm selected by the Executive;provided, however, that the Company’s liability hereunder shall be limited to the first $20,000 of such expenses incurred by the Executive. The Executive shall provide the Company with reasonable documentation of the incurrence of suchoutplacement costs and expenses. 

 

6.3Resignation by Executive Not Involving a Change in Control. 

 

(a) If the Executive Resigns for Good Reason during the Term of this Agreement (other than a resignation covered under Section 6.2 above), then, in addition to all Salary and Bonus due and payable on or before theTermination Date and all other payments and benefits the Executive is entitled to receive under this Agreement, the Executive will receive an amount equal to ***1.25 times (1.25x) an amount equal to Executive’s highest annual base salary ineffect during the Term of this Agreement plus the average of the aggregate amounts of bonus paid or payable to the Executive during the three (3) completed fiscal years immediately preceding the Termination Date (or such lesser period that theExecutive has been employed by the Company).*** This additional payment will be paid in equal monthly installments over a twenty-three month period following the Termination Date as if the Executive’s employment had continued hereunderpayable in accordance with the normal payroll procedures, as the same may be modified from time to time. 

 

(b) If (i) the Executive resigns his employment during the Term of this Agreement in a situation other than when the Executive Resigns forGood Reason, or (ii) the Executive’s employment is terminated during the Term of this Agreement either by the Company or by the 

 

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Executive (other than with regards to a situation covered by Section 6.2 above), then, in addition to allSalary and Bonus due and payable on or before the Termination Date and all other payments and benefits the Executive is entitled to receive under this Agreement, the Executive will receive as additional compensation an amount equal to one half (1/2)of one month’s Salary for each month Executive has been employed during the Term of this Agreement, up to a maximum amount equal to Executive’s highest annual base salary in effect during the Term of this Agreement. This additionalcompensation payment will be paid in equal monthly installments over a twenty-three (23) month period following the Termination Date as if the Executive’s employment had continued hereunder payable in accordance with the normal payrollprocedures, as the same may be modified from time to time. 

 

6.4 Termination for Cause. If the Executive is terminated for Cause during the Term of this Agreement, then, in addition to all Salary and Bonus due and payable on or before the Termination Date and all other payments andbenefits the Executive is entitled to receive under this Agreement, the Executive will receive an amount equal to one half (1/2) of one month’s Salary for each month Executive has been employed during the Term of this Agreement, up to a maximumamount equal to Executive’s annual base salary in effect as of the Termination Date, if and only if the Board of Directors determines in good faith and in its sole discretion that the for Cause termination does not result from theExecutive’s commission of a major criminal offense. This additional compensation payment will be paid in equal installments over a twenty-three (23) month period following the Termination Date as if the Executive’s employment had continuedhereunder payable in accordance with the normal payroll procedures, as the same may be modified from time to time. If the reason for the termination for Cause is that the Executive committed a major criminal offense, the Executive shall only beentitled to such amount of Salary and Bonus not paid as of his date of termination for Cause. It is expressly agreed that if there is a termination of the Executive’s employment for Cause under the provisions of Section 5.3, the Executive willnot be entitled to receive any additional amounts payable to the Executive under Sections 6.2 or 6.3. 

 

6.5 Termination due to Total Disability. If Executive’s employment is terminated due to Total Disability, then, in addition toall Salary and Bonus due and payable on or before the Termination Date and all other payments and benefits the Executive is entitled to receive under this Agreement, the Executive or his legal guardian, as the case may be, will receive an amountequal to one-twelfth (1/12th) of Executive’s Salary times the lesser of (a) the number of months remaining prior to the expiration of the Term of this Agreement or (b) twelve (12). This additional compensation payment will be paid in a lump sumamount within ninety (90) days after the Termination Date. It is expressly agreed that if there is a termination of the Executive’s employment due to the Total Disability of the Executive under the provisions of Section 5.3, the Executive willnot be entitled to receive any additional amounts payable to the Executive under Sections 6.2 or 6.3. 

 

6.6 No Additional Payments Upon Death. It is expressly agreed that if the Executive’s employment with the Company isterminated by reason of the death of the Executive, the Executive will not be entitled to receive any additional amounts payable to the Executive under Sections 6.2 or 6.3. 

 

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6.7Mitigation of Damages. In the event the Executive is entitled to any additional amounts provided for under this Article VI, the Executive shall not be required to seek other employment in order to mitigate his damages hereunder, and nocompensation the Executive earns after any such termination shall be considered to mitigate damages the Executive has incurred or to reduce any payment the Company is obligated to make to the Executive under this Agreement unless the Executiveviolates Section 5.7, Section 6.1(b) or Article VII. Notwithstanding anything else to the contrary contained herein, if the Executive violates Section 5.7, Section 6.1(b) or Article VII, the Company shall be entitled to immediately stop making anyfurther installment payments that may be owed under Sections 6.2, 6.3 or 6.4. 

 

6.8 Timing of Payment and Deductions. Unless otherwise specifically provided for in this Agreement, any payments payable to the Executive under this Agreement shall be paid within thirty (30)days after the Termination Date. The Company and IMCO shall have the right with respect to all payments made to the Executive under this Agreement to withhold therefrom (a) all taxes which may be required to be deducted or withheld under anyprovision of applicable law (including but not limited to state and federal income taxes, Federal Insurance Contributions Act payments and any other required tax deduction) and (b) all other required non-tax deductions. The Executive shall be solelyresponsible for the state and federal income taxes, excise and other taxes imposed on the benefits provided and payments made under this Agreement. 

 

6.9 Limitations. Notwithstanding any provision contained in this Agreement to the contrary, in the event it shall be determinedthat any payment or distribution made, or benefit provided, by the Company or IMCO to or for the benefit of Executive (whether paid or payable or distributed or distributable or provided pursuant to the terms hereof or otherwise) would constitute a“parachute payment” as defined in Section 280G of the Code, then Executive may provide written notice to the Company and IMCO of Executive’s election to limit the payments under this Agreement in accordance with this Section 6.9. IfExecutive so elects to make such an election to reduce his payments hereunder, Executive must provide such notice to the Company and IMCO (or their respective successors) on or before that date which is 15 days after the Termination Date. The effectof such election shall be that any payment payable hereunder to Executive shall be reduced so that the aggregate present value of all payments in the nature of compensation to (or for the benefit of) Executive which are contingent on a change ofcontrol (as defined in Code Section 280G(b)(2)(A)) is One Dollar ($1.00) less than the amount which Executive could have received without being considered to have received any parachute payment (the amount of this reduction in such payments isreferred to herein as the “Excess Amount”). Executive may indicate in his election notification the particular payments that he desires to be reduced or eliminated to in order to effect the intention of the immediately preceding sentence.If Executive does not so indicate, the payments will be reduced or eliminated by first reducing or eliminating those payments or benefits which are payable in cash under this Agreement. The determination of the amount of any Excess Amount or anyreduction or elimination of payments contemplated under this Section 6.9 shall be made by an independent accounting firm (which may be the Company’s or IMCO’s regular independent accounting firm) selected by the Company or IMCO andacceptable to Executive, and such determination shall be conclusive and binding on the parties hereto. 

 

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**ARTICLE VII**

**CERTAIN RESTRICTIONS ON EXECUTIVE**

 

7.1 General. In consideration of the Company entering into this contract for employment, the Companyfurnishing the Executive, now and throughout the Term of this Agreement, Confidential Information and specialized training on an initial and ongoing basis, and the covenants and obligations of the Company contained in this Agreement, including thecovenants and obligations regarding the additional compensation set forth in Article VI, the Executive hereby covenants, warrants and agrees to abide by and be subject to the restrictions and agreements as set forth below in this Article VII.

 

7.2 Non-Disclosure of ConfidentialInformation. The Executive hereby covenants, warrants and specifically agrees as follows: 

 

(a) All of the Confidential Information is a valuable asset and is, will be, and shall at all times remain the sole and exclusive property of IMCO, the IMCO Group or, if applicable, the sole andexclusive property of the Company. 

 

(b) But forthe Executive’s employment by the Company, the Executive would not come into possession of, have knowledge of, or contribute to the Confidential Information. 

 

(c) All Confidential Information disclosed to the Executive or made known to the Executive (regardless ofwhen or how disclosed or made known) as a result of his employment by the Company, whether or not with the knowledge and permission of IMCO, the IMCO Group, or the Company, will be held strictly confidential and only utilized during the course ofhis employment at the Company. The Executive shall hold the said Confidential Information in a fiduciary capacity for the benefit of IMCO, the IMCO Group, and/or the Company and will not use the Confidential Information in any way detrimental toIMCO, the IMCO Group, or the Company. 

 

(d) TheExecutive will not at any time during or after the Term of this Agreement, in any fashion, form or manner, either directly or indirectly, publish, reveal, divulge, disclose, disseminate, use (or communicate to any individual, firm, partnership,corporation, association, enterprise, organization, or other entity, person or business) any Confidential Information, or otherwise make it possible for any individual, firm, partnership, corporation, association, enterprise, organization, or otherentity, person or business to have access to any Confidential Information, except (1) with the express permission of IMCO and/or the Company, (2) in performance of Executive’s duties and obligations to the Company and/or IMCO, or (3) asotherwise required to be disclosed by law, judicial or administrative process. If the Executive becomes legally compelled, as concluded by the written opinion of counsel, (by oral questions, interrogatories, request for information, or documents,subpoena, civil investigative demand or similar process) to disclose any Confidential Information, the Executive will provide the Company with prompt written notice so that the Company and/or IMCO may seek a protective order or other appropriateremedy. It is further agreed that if, in the absence of a protective order or the receipt of a waiver hereunder, the Executive is, nonetheless, in the opinion of his counsel, compelled to disclose any Confidential Information or else stand liablefor contempt or suffer other censure or penalty, such information which is legally required to be 

 

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disclosed may be disclosed but the Executive will exercise his best efforts to obtain reliable assurancesthat confidential treatment will be accorded the Confidential Information so disclosed. 

 

(e) Upon termination of the Executive’s employment with the Company for Cause or Without Cause or upon the request of the Company at any time, the Executive will promptly return to the Company,and shall retain no copies of, all Confidential Information prepared by the Executive or coming into the Executive’s possession. 

 

(f) IMCO, the IMCO Group and the Company derive a competitive advantage in the marketplace by maintaining the Confidential Information andknowledge thereof as secret and unavailable to the Company’s, IMCO’s and the IMCO Group’s competitors and the general public. 

 

7.3 Non-Competition. The Executive acknowledges that at the time this Agreement is entered into, the Company, IMCO and the IMCOGroup are furnishing the Executive, now and throughout the Term of this Agreement, Confidential Information and specialized training on an initial and ongoing basis, and that in consideration thereof, in addition to the other consideration andbenefits being provided to Executive as recited herein, the Executive covenants and specifically agrees with the Company as follows: 

 

(a) The Executive, without the prior written consent of the Company, will not at any time, during the Term of this Agreement and for aperiod of two (2) years thereafter (or for such lesser period should the Company so determine), directly or indirectly: (i) compete with IMCO, the IMCO Group or the Company in any manner within the United States, Germany, Wales, or within any othercountry, territory or possession where IMCO, the IMCO Group, or the Company operate (collectively the aforementioned geographic areas are hereinafter referred to as the “Territory”); (ii) be employed by or serve as an employee, agent,officer, representative, director of, or as a consultant to any individual, firm, partnership, corporation, association, enterprise, organization, or other entity, person or business (other than for IMCO, the IMCO Group or the Company) that competeswith IMCO, the IMCO Group or the Company in any manner within the Territory; (iii) solicit, attempt to solicit, provide goods or services to, or attempt to provide goods or services to, any of the customers or business contacts of IMCO, the IMCOGroup or the Company that exist during the Term of this Agreement; or (iv) acquire or own in any manner any interest in, or loan any amount to, any individual, firm, partnership, corporation, association, enterprise, organization, or other entity,person, or business that competes with IMCO, the IMCO Group or the Company in any manner within the Territory, except the Executive may own up to two percent (2%) of any class of issued and outstanding securities of a competitive corporation whoseshares are regularly traded on a national securities exchange or on the over-the-counter market. 

 

(b) The Executive, without the prior written consent of the Company, will not at any time, during the Term of this Agreement and for a period of two (2) years thereafter, directly or indirectly, forhimself or for any other individual, firm, partnership, corporation, association, enterprise, organization, or other entity, person, or business, solicit, or in any manner attempt to influence or induce any employee of IMCO, the IMCO Group or theCompany to leave the employment of IMCO, the IMCO Group or the Company as the case may be. 

 

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7.4Reasonableness, Revival and Reliance. 

 

(a)The provisions contained in Sections 7.2 and 7.3 are the result of specific negotiations between the Executive and the Company, and the Executive hereby specifically agrees that the provisions are reasonable under the circumstances. The Executivefurther agrees that if, despite the express agreement of the parties to this Agreement, a court should hold any portion of Sections 7.2 or 7.3 unenforceable for any reason, the maximum restrictions that are reasonable under the circumstances, asdetermined by the court, will be substituted for the restrictions held unenforceable. The Executive also expressly agrees that in the event a court of any jurisdiction within the Territory (other than a court with jurisdiction in the State of Texas)holds the covenants and agreements contained in Sections 7.2 and/or 7.3 wholly unenforceable by reason of the breadth of their scope or otherwise, it is the intention of the parties that such determination not bar or in any way affect theCompany’s right to the relief in the courts of any other jurisdiction within the Territory, as to breaches of such covenants and agreements in such other respective jurisdictions, the covenants and Agreements in Sections 7.2 and 7.3 as theyrelate to each jurisdiction within the Territory being, for this purpose, severable into diverse and independent covenants and agreements. 

 

(b) The Executive’s covenants, warranties and agreements set forth herein shall be revived continuously throughout theExecutive’s employment by the Company. 

 

(c)The Company is materially relying upon each of the Executive’s representations, covenants, warranties and agreements in entering into this Agreement and as a condition for paying the additional compensation under Article VI. 

 

7.5 Injunctions. Without intending to limit theremedies available to the Company, IMCO, or the IMCO Group, the Executive expressly recognizes and acknowledges that a breach or violation by the Executive of any of the covenants, warranties, agreements, or other provisions contained in thisArticle VII will cause material irreparable injury to the Company, IMCO and/or the IMCO Group for which there is not an adequate remedy at law, that it may not be possible to measure damages for such injuries precisely, and that in the event of sucha breach or violation or the threat thereof, the Company, IMCO, and/or the IMCO Group will be entitled to obtain a temporary restraining order and/or a preliminary or permanent injunction restraining the Executive and/or his affiliates, employees,associates, partners, or agents, either directly or indirectly, from engaging in activities prohibited by this Article VII and/or such other relief as may be required to specifically enforce any of the covenants, warranties, agreements, or otherprovisions in this Article VII. Such right to a temporary restraining order and/or injunction will be cumulative and in addition to whatever other rights or remedies the Company, IMCO and/or the IMCO Group may possess, at law or in equity. Nothingcontained in this Agreement will be construed to prevent the Company, IMCO, and/or the IMCO Group from seeking and recovering for the damages suffered by any of them or any of their employees as a result of any breach or violation by the Executiveand/or his affiliates, employees, associates, partners, or agents of the Executive’s covenants, warranties, agreements, or other provisions contained in this Agreement. The Executive by execution of this Agreement agrees to submit to thejurisdiction of the federal and state courts of the State of Texas. 

 

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**ARTICLE VIII**

**INDEMNIFICATION**

 

During the Term of this Agreement, to the fullest extent permitted by applicable law in effect on the Effective Date of this Agreement andto such greater extent as applicable law may hereafter from time to time permit, the Company shall advance and be responsible for all Expenses (as that term is defined below) and the Company specifically agrees to and shall defend, indemnify andhold harmless the Executive and his respective employees, attorneys, agents, advisors (including, without limitation, attorneys, accountants, consultants and financial advisors), successors and assigns, from and against any and all claims, losses,damages, causes of action, demands, penalties, fines, costs, expenses, suits and other liability of every kind (including, without limitation all expenses of litigation, court costs, judgments and interest thereon, and attorney fees) arising out ofor resulting from all acts or decisions made by the Executive while performing his duties and obligations in accordance with the provisions of this Agreement excepting herein any claims, losses, damages, causes of action, demands, penalties, fines,costs, expenses, suits or other liability of every kind that results from the negligence or misconduct of the Executive or involves a dispute between or among the parties to this Agreement. The Company will choose the legal counsel to defend theExecutive and will pay all attorney fees and other expenses and costs associated with such litigation. In the event that counsel of the Company’s choice must be disqualified from representing the Company and the Executive together, then theExecutive has the right to select his own counsel, whose reasonable fees will be paid by the Company. All agreements and obligations of the Company contained herein shall continue for so long as the Executive shall be, or could become, subject toany possible claim or legal proceeding in respect of which the Executive is granted rights of indemnification or advancement of Expenses hereunder. “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred inconnection with prosecuting, defending, preparing to prosecute or defend or investigating claims or legal proceedings. 

 

**ARTICLE IX**

**SUCCESSOR TO COMPANY**

 

The Company and IMCO agree to require anysuccessor, whether direct or indirect, whether by purchase, merger, consolidation or otherwise, who succeeds to all or most of the business or properties and assets of IMCO to execute and deliver to the Executive a written instrument in form and insubstance reasonably satisfactory to the Executive and his legal counsel pursuant to which the successor agrees to assume and to timely perform or to cause to be timely performed all of the Company’s and IMCO’s covenants, and agreementsset forth in this Agreement (a “Successor Agreement”). The failure of the Company or IMCO to cause any successor to execute and deliver a Successor Agreement to the Executive (a) will constitute a breach of the provisions of this Agreementby the Company and IMCO, and (b) the Executive, at his sole option, may resign and thereby terminate his employment by the Company. If the Executive resigns due to the failure of any successor to execute and deliver a Successor Agreement, thetermination of the Executive’s employment will be treated (for all purposes) as a termination where the Executive Resigns for Good Reason after a Change in Control. As used herein, the terms “the Company” and “IMCO” shallinclude any successor to their respective businesses and/or assets as aforesaid which executes and 

 

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delivers the Successor Agreement as contemplated by this Article IX or which otherwise becomes bound bythe terms and provisions hereof by operation of law. 

 

**ARTICLE X**

**ARBITRATION**

 

Except as noted below, any dispute arising out of this Agreement or the performance of its provisions shallbe settled by binding arbitration in Dallas County, Texas in accordance with the rules of the American Arbitration Association then in effect, and judgment may be entered upon the award by any court having jurisdiction over the matter. The Companyand the Executive expressly agree that this Article X does not apply to any disputes that touch or concern the provisions set forth in Section 5.7, Section 11.1, Section 11.2, or Article VII, including any action taken by the Company, IMCO and/orthe IMCO Group to specifically enforce the provisions set forth in Article VII. Disputes related to matters so excepted shall, in the absence of further agreement between the parties, be resolved in a court of competent jurisdiction located inDallas County, Texas. 

 

**ARTICLE XI**

**MISCELLANEOUS**

 

11.1 Non-Defamation. Unless authorized in writing by the Company, the CEO or the Board of Directors, the Executive expressly agreesthat he will not make or publish any statement or make any remark or comment, either orally or in writing, which is intended to or which reasonably may be expected to injure, discredit, prejudice, criticize, embarrass, disparage, besmirch or defame(a) IMCO, the IMCO Group, or the Company; (b) the stockholders, officers or directors of IMCO; or (c) IMCO’s, the IMCO Group’s and/or Company’s business, reputation, method of doing business, relationships with its customers orsuppliers or relations with creditors, regardless of whether such action by Executive would constitute a cause of action for libel, slander, false light or defamation. Executive further agrees that he will not commit damage to the property of IMCO,the IMCO Group or the Company, or otherwise engage in any misconduct, which is injurious to the business or reputation of IMCO, the IMCO Group, or the Company. 

 

11.2 Further Assurances. The Executive agrees and assures the Company that he will do all such further acts and things (andexecute, acknowledge and deliver all such further documents and instruments) that have not been specifically recited in this Agreement that may be useful or necessary to carry out the covenants, warranties, agreements and other provisions containedin this Agreement. 

 

11.3 Notices. Allnotices, requests, demands, replies, or other communications (hereinafter severally and collectively called “notice”) called for or permitted to be given, made or accepted by either party must be in writing, and shall be deemed to havebeen duly given when delivered personally or when deposited in the United States mail, postage prepaid and certified or registered and addressed to the party (or their respective heir, successor, legal representative, or assign) to be notified, withreturn receipt requested, or by a confirmed facsimile, when appropriate, addressed to the party to be notified. Notice given in any other manner shall be effective only if and when 

 

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received by the party to be notified. For purposes of notice, the addresses of the parties shall, untilchanged as herein provided, be as follows: 

 

If the Company:
  
IMCO Management Partnership, L.P.
   
5215 North O’Connor Blvd, Suite 1500
   
Irving, Texas 75039
   
Attention: Chief Executive Officer

If to IMCO:
  
IMCO Recycling Inc.
   
5215 North O’Connor Blvd, Suite 1500
   
Irving, Texas 75039
   
Attention: Chief Executive Officer

If to the Executive:
  
W. Lane Pennington
   
4205 Amherst
   
Dallas, TX 75225

 

Theparties hereto and their respective heirs, successors, legal representatives, and assigns shall have the right from time to time and at any time to change their respective addresses and each shall have the right to specify as its address any otheraddress by at least fifteen (15) days’ written notice to the other party given in the manner provided herein. 

 

11.4 Governing Law and Venue. THE PARTIES HERETO ACKNOWLEDGE AND EXPRESSLY AGREE THAT THIS AGREEMENT AND PERFORMANCE HEREUNDER, ALLSUITS AND SPECIAL PROCEEDINGS HEREUNDER, AND ALL OTHER INSTRUMENTS EXECUTED WITH IT SHALL BE GOVERNED BY, CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, THE STATE IN WHICH THE PRINCIPAL EXECUTIVE OFFICES OF THE COMPANYARE LOCATED, WITHOUT REGARD TO CONFLICT OF LAW RULES THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION, EXCEPT ONLY TO THE EXTENT THAT IT IS MANDATORY THAT THE LAW OF SOME OTHER JURISDICTION MUST APPLY. THE PARTIES EXPLICITLYAGREE THAT VENUE FOR ANY ACTION BROUGHT WITH RESPECT HERETO WILL BE IN DALLAS COUNTY, TEXAS. 

 

11.5 Entire Agreement. This Agreement constitutes the entire understanding between the parties with respect to the subject matter hereof, superseding and merging into this Agreement (whetherwritten or oral) all prior discussions, negotiations, representations, promises, statements, contracts or agreements between the parties. 

 

11.6 Amendment, Waiver, or Modifications. NO WAIVERS, VARIATIONS, MODIFICATIONS, CHANGES OR AMENDMENTS HEREIN OR HEREOF SHALL BEBINDING UPON ANY PARTY HERETO UNLESS IN WRITING AND DULY EXECUTED BY THE PARTY TO BE CHARGED THEREWITH, AND NO EVIDENCE OF WAIVER OR ANY MODIFICATION SHALL BE OFFERED OR RECEIVED IN EVIDENCE IN ANY PROCEEDING, ARBITRATION OR LITIGATION BETWEEN THEPARTIES HERETO 

 

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ARISING OUT OF OR EFFECTING THIS AGREEMENT, OR THE RIGHTS OR OBLIGATIONS OF ANY PARTY HEREUNDER, UNLESSSUCH WAIVER, VARIATION, MODIFICATION, CHANGE OR AMENDMENT IS IN WRITING, DULY EXECUTED AS AFORESAID. 

 

11.7 Successors and Assigns. Subject in all respects to the limitations on transferability by the Executive contained in thisSection 11.7, this Agreement and the promises, conditions, terms, covenants, representations, warranties, rights, obligations, indemnities, agreements, and other provisions herein contained shall extend to and be binding upon, and inure to thebenefit of, the heirs, administrators, personal representatives, successors and assigns of each of the parties hereto. The Executive acknowledges that this Agreement is a personal services contract and that he may not assign this Agreement or any ofthe rights and obligations contained herein without the prior written consent of the Company. Any assignment made by the Executive without such written consent of the Company shall be void. 

 

11.8 References, Headings, and Captions. All referencesto “Article(s),” and “Section(s)” contained herein are, unless specifically indicated otherwise, references to Articles and Sections of this Agreement. The captions, Article and Section headings in this Agreement are inserted forconvenience only; are in no way intended to define or limit the scope, extent or intent of this Agreement or any of the provisions hereof; and shall not affect the meaning, interpretation or construction of any provision of this Agreement.

 

11.9 Number, Gender and Deletions. Unlessthe context otherwise clearly indicates, the singular shall include the plural whenever and as often as may be appropriate and the neuter, masculine and feminine genders shall include each other. If any language is stricken or deleted from thisAgreement, such language shall be deemed never to have appeared herein and no other implication shall be drawn therefrom. 

 

11.10 Deemed Jointly Drafted. This Agreement is deemed to be jointly drafted by the parties for all purposes and the rules ofconstruction that a document is to be construed most strictly against the party who prepared the same will not be applied. Each party hereto acknowledges that they have read and understand all parts of this Agreement, have had the opportunity tohave the benefit of counsel of the party’s choice and an opportunity for the independent advice of their chosen counsel with regard to the preparation and execution of this Agreement. 

 

11.11 Third Parties. Except for IMCO and the IMCO Group, nothing in this Agreement is intended orshould be construed to create any right on behalf of anyone not a party. 

 

11.12 Survival of Obligations. The covenants, agreements, indemnities, warranties, rights and obligations of the Company, IMCO and the IMCO Group under this Agreement, and the covenants, agreements, indemnities,warranties, rights and obligations of the Executive under this Agreement shall survive the termination of this Agreement for any reason including, but not limited to, the termination of the Executive’s employment with the Company regardless ofwhether the Executive’s employment is terminated, voluntarily or involuntarily, by the Company or the Executive, for Cause or Without Cause, or the Executive Resigns for Good Reason. All covenants, 

 

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agreements, indemnities, warranties, rights and obligations contained herein shall continue for so long asnecessary in order for the Company, IMCO and/or the Executive to enforce their rights hereunder. 

 

11.13 Severability. If any agreement, warranty, covenant, condition, term, or other provision of this Agreement is found to be illegal by a final judgment of a court having jurisdiction, or ifthe application thereof to any party or in any circumstance shall to any extent be judicially determined to be invalid or unenforceable, (a) the remainder of this Agreement, or the application of such agreement, warranty, covenant, condition, term,or other provision to persons or in circumstances other than those to which it is held invalid or unenforceable, shall not be affected thereby, and each agreement, warranty, covenant, condition, term, and other provision of this Agreement shall bevalid and enforceable to the fullest extent permitted by law, and (b) in lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Agreement a provision that comes closest to expressing theintention of such illegal, invalid, or unenforceable provision as may be legal, valid, and enforceable. 

 

11.14 Attorney Fees. In the event that any litigation arises (including a dispute that will be settled through arbitration pursuantto Article X) between or among the parties, based, in whole or in part, on this Agreement or any or all of the provisions contained herein, the prevailing party in the litigation is entitled to recover from the losing party, and will be awarded by acourt of competent jurisdiction, any and all fees and disbursements of trial and appellate counsel paid, incurred or suffered by the prevailing party as the result of, arising from, or in connection with the litigation. 

 

11.15 Counterparts. This Agreement may also be executedin one or more counterparts, each of which, for all purposes, shall be deemed an original and all of such counterparts, taken together, shall constitute one and the same Agreement. 

 

11.16 Joint and Several Liability. Each of the obligations imposed in this Agreement on the Companyand/or IMCO are joint and several. 

 

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IN WITNESSWHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written. 

 

IMCO MANAGEMENT PARTNERSHIP, L.P.
   
EXECUTIVE

By:
 
IMCO Recycling Inc., its General Partner
    
By:
 
 
   
 

Title:
 
 
   
 

IMCO RECYCLING INC.
      
By:
 
 
      
Title:
 
 
               
 

 

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