Document:

Exhibit
10.6

 

 

CHANGE IN CONTROL
AGREEMENT

 

BETWEEN

 

David Stewart Sutherland

 

AND

 

IPSCO
INC.

 

MADE AS OF THIS 18th DAY OF NOVEMBER
2005

CHANGE IN CONTROL
AGREEMENT

THIS IS AN AGREEMENT made as of this 18TH day of November 2005,

 

B E T W E E N:

DAVID STEWART SUTHERLAND

(hereinafter
referred to as the “Key Executive”),

OF THE FIRST PART,

- and -

IPSCO
INC.

a
corporation incorporated under the laws of Canada

(hereinafter
referred to as the “Employer”),

OF THE SECOND PART.

WHEREAS,  the Key Executive is employed by the
Employer or a subsidiary of the Employer (referred to as the “Employer” herein)
in a senior executive capacity; and

WHEREAS,
the Employer considers that the service of the Key Executive to the Employer
entitles the Key Executive to receive the benefits set forth in this Agreement
in the event of the Involuntary Termination of the Key Executive’s employment
within the Qualifying Term before or after a Change in Control; and

WHEREAS,
the Employer recognizes that the uncertainty and insecurity that may arise as a
result of the occurrence of a Change in Control could lead to the departure of
the Key Executive to the detriment of the Employer and its shareholders; and

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WHEREAS,
a Change in Control of the Employer, while not currently in contemplation, is a
possibility; and

WHEREAS,
the Employer considers it in the best interests of the Employer and its
shareholders that the Key Executive have a strong incentive to remain in the
employ of the Employer so as to maximize the value of the Employer; and

WHEREAS,
the Employer considers that in order to assist in the continued dedication of
the Key Executive to the Employer, it is important to establish contractual
arrangements that provide incentives to the Key Executive to continue in the
employ of the Employer notwithstanding the possibility or occurrence of a
Change in Control and provide financial security to the Key Executive in the
event of the Involuntary Termination of the Key Executive’s employment within
the Qualifying Term before or after a Change in Control; and

WHEREAS,
the Employer and the Key Executive acknowledge that the compensation and
benefits payable to the Key Executive hereunder and the consideration and
covenants that flow from the Key Executive to the Employer are fair and
reasonable having regard to all of the circumstances of the Key Executive’s
employment with the Employer; and

WHEREAS,
the Employer’s Board of Director’s has determined that it is in the best
interests of the Employer that, in exchange for the assurances and undertakings
provided below, it obtain from the Key Executive certain covenants which are of
significant benefit to the Employer;

NOW
THEREFORE, in consideration of the mutual covenants and
agreements contained in this Agreement, and for other good and valuable consideration,
the Employer and the Key Executive agree as follows:

ARTICLE ONE - DEFINITIONS

1.01                        Definitions

In
this Agreement, the following terms shall have the meanings set out below
unless the context requires otherwise:

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“Annual Base Salary” means the dollar value
or any cash or non-cash base salary established by the Management Resources and
Compensation Committee of the Employer to be the salary of the Key Executive,
for the financial year covered, for the purposes of calculation of any bonuses
or other benefits, including insurance benefits, 401(k) savings plan,
non-qualified compensation deferrals, or pension entitlements that relate to or
are calculated with reference to the salary or other remuneration of the Key
Executive.

“Cause” means:

(i)                                     the willful failure of the Key Executive to
carry out the Key Executive’s reasonable and lawful duties, responsibilities or
tasks after the Employer’s Board of Directors has given the Key Executive
written notice of the willful failure to do so, and the opportunity to correct
the same within a reasonable time from the date of receipt of such written
notice;

(ii)                                  Willful gross misconduct, gross negligence,
the commission of a criminal act, theft, fraud or dishonesty by the Key
Executive involving the property or affairs of the Employer or the carrying out
of the Key Executive’s duties, responsibilities and tasks; or

(iii)                               Willful engagement in conduct that is
demonstrably and materially injurious to the Employer, monetarily or otherwise.

For purposes of
this Agreement, the Key Executive’s employment shall be deemed to have
terminated for Cause if, after the Key Executive’s employment has been
terminated, facts and circumstances are discovered that would have justified a
termination for Cause.

“Change in Control”
means the occurrence at any date following execution of this Agreement of any
of the following events:

(i)                                     any change, either through the issue,
transfer, acquisition, conversion, exchange or otherwise of shares, or through
amalgamation, arrangement, merger or otherwise (the “Transaction”), as a result
of which the Employer ceases to exist as a separate legal entity and the
beneficial shareholders of the Employer immediately before such change (not
including any other party to the Transaction or any such beneficial shareholder
who was also

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 a shareholder in such other party before the
Transaction) hold less than 50% of the shares or other securities of the entity
resulting from the change entitled to vote generally in the election of the
directors of the entity;

(ii)                                  any change, either direct or indirect, in the
beneficial ownership of Common Shares as a result of which a Person or a group
of Persons acting jointly or in concert at arm’s length to the Employer, either
individually or together with its or their associates and affiliates,
beneficially owns more than 20% of all of the Common Shares.  For purposes of this clause (ii), the terms
“associate”, “affiliate” and “beneficial ownership” shall have the same
respective meanings as in the Securities Act (Ontario) as may be amended from
time to time;

(iii)                               the consummation of any transaction, whether
by way of reorganization, consolidation, arrangement, liquidation, transfer,
exchange, sale or otherwise, whereby a Person or a group of Persons acting
jointly or in concert at arm’s length to the Employer, either individually or
together with its or their affiliates, acquires legal or beneficial ownership
of all or substantially all of the assets of the Employer, other than in a
transaction that would result in:

(A)                              the
holders of Common Shares immediately prior to the completion of such
transaction (not including any such Person or any owner of such Person)
continuing to own more than 50% of the voting shares of the surviving entity
outstanding immediately following the completion of such transaction, and

(B)                                a
majority of the members of the board of directors of the surviving entity
having been members of the board of directors of the Employer immediately prior
to the completion of such transaction; or

(iv)                              the replacement by way of election at any one
time, or the appointment at any one or a series of related times, of more than
one-half of the members of the Board, if the election or appointment of such
replacement directors has not been approved by a majority of the members of the
Board in office immediately before such replacement.

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If the Key Executive is employed by IPSCO Enterprises
Inc., or a successor subsidiary of the Employee in the United States,
“Employer” for purposes of this definition of “Change in Control” shall mean
either IPSCO Inc. or such United States Subsidiary.  In no event will a Change in Control be
deemed to have occurred, with respect to the Key Executive, if an employee
benefit plan maintained by the Employer or the Key Executive is part of a
purchasing group that consummates the Change in Control transaction.  The employee benefit plan or the Key
Executive will be deemed “part of a purchasing group” for purposes of the
preceding sentence if the plan or the Key Executive is an equity participant in
the purchasing company or group (except: 
(i) passive ownership of less than two percent (2%) of the stock of the
purchasing company; or (ii) ownership of equity participation in the purchasing
company or group that is otherwise not significant, as determined prior to the
Change in Control by a majority of the non-employee continuing directors).

“Common Shares”
means the common shares or any other securities of the Employer entitled to
vote generally in the election of members of the Board as at any particular
time.

“Communication” has the meaning
given to it in Section 5.08.

“Involuntary Termination” means:

(i)                                     any termination by the Employer of the Key
Executive’s employment following any Change in Control that is not due to
Cause, which shall include a termination of the Key Executive’s Employment due
to:

(A)                              the
death of the Key Executive; or

(B)                                a
condition of total and continuing disability which renders the Key Executive
incapable of performing his essential job duties and functions for a period of
six (6) months; or

(ii)                                  any termination by the Employer of the Key
Executive’s employment, which is not due to Cause, that occurs prior to the
Change in Control at the request or direction of a potential acquirer that
ultimately participates in the Change in Control; or

(iii)                               the resignation of the Key Executive from his
employment with the Employer within 60 days of the occurrence of any of the
following events:

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(A)                              any
requirement by the Employer following any Change in Control that the Key
Executive’s position be based and principal office located outside a 40-mile
radius from the Key Executive’s principal office immediately prior to the
Change in Control;

(B)                                any
material reduction in the Key Executive’s position, reporting relationship,
overall responsibilities or authority from that in effect immediately prior to
any Change in Control, or immediately prior to any reduction thereto made in
contemplation of the Change in Control;

(C)                                any
material reduction in the Key Executive’s overall cash compensation (Annual
Base Salary plus target bonus opportunity) paid to him by the Employer as in
effect immediately prior to any Change in Control or as such overall
remuneration may have been subsequently increased from time to time; or

(D)                               any
termination or material reduction in the aggregate value of the Key Executive’s
benefit programs, including, but not limited to, any pension plan, stock award
plan, investment plan, savings plan, incentive compensation plan or life
insurance, medical plans or disability plans provided by the Employer to the
Key Executive and in which the Key Executive is participating or under which
the Key Executive is covered, all as in effect immediately prior to any Change
in Control or as such benefit programs may have been subsequently increased
from time to time, that has not been replaced by benefit programs of any other
Person which provide the Key Executive with substantially equivalent benefits
and value under substantially equivalent terms and conditions as were provided
by the benefit programs in effect immediately prior to the Change in Control.

“Person” shall
include individuals, partnerships, associations, trusts, unincorporated
organizations and corporations.

“Qualifying
Term” means the twenty-four (24) months following, or the six
(6) months preceding, a Change in Control.

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“Stock Awards”
means all options to purchase Common Shares of the Employer granted to the Key
Executive under the IPSCO Inc. Incentive Share Option Plan or any successor or
replacement of such plan, which have not been exercised by the Key Executive as
of any particular date, whether vested or unvested, and any awards of equity
interests of the Employer issued under an equity incentive plan of the
Employer.

“Termination Factor” means the
multiple that will be used to calculate the termination benefits set forth in
Section 3.02, which for the Key Executive shall equal 3.0.

“Willful” means
any act done or omitted to be done by the Key Executive intentionally and
without reasonable belief that such act or omission was in the best interests
of the Employer.  An act shall not be
Willful if taken pursuant to advice of counsel engaged to represent the
Employer.

ARTICLE TWO - KEY
EXECUTIVE’S COVENANTS

2.01                        Non-Disclosure

In
consideration for the termination benefits described in Section 3.02 (a)
through (i) hereof, the Key Executive shall not (either during the continuance
of his employment or at any time thereafter) disclose any proprietary and
confidential information of the Employer, including, without limitation, the
Employer’s financial data, business plans and trade secrets, to any person
other than for the Employer’s purposes and shall not (either during the
continuance of the employment or at any time thereafter) use for his own
purposes or for any purposes other than those of the Employer any such
information or secrets he may acquire in relation to the business of the
Employer.

2.02                        Key
Executive to Remain Employed

In
consideration for the termination benefits described in Section 3.02 (a)
through (i) hereof, if a Person effects a Change in Control, the Key Executive
shall not voluntarily leave his employment with the Employer, other than by way
of retirement pursuant to the normal retirement plans of the Employer, and
shall continue to perform his duties related to his employment until such
Person has abandoned or terminated his or its efforts to effect a Change in
Control or until after a Change in Control has occurred.  Should the Key Executive voluntarily leave
his employment with the Employer contrary to this Section, the Key Executive
shall, immediately upon the cessation of his employment with the Employer,
cease to be entitled to any of the benefits provided for under this Agreement,
but the Employer shall have no other recourse against or claim against the Key
Executive in respect of his voluntary leaving his employment contrary to this
Section 2.02.

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2.03                        Return of
Property; Assignment of Inventions

In
consideration for the termination benefits described in Section 3.02 (a)
through (i) hereof, immediately following the Involuntary Termination of the
Key Executive’s employment, the Key Executive shall at once:

(a)                                  deliver
or cause to be delivered to the Employer all books or other documents stored in
paper or electronic form, effects, money, securities or other property
belonging to the Employer or for which the Employer is liable to others, which
are in the possession, charge, control or custody of the Key Executive; and

(b)                                 assign
and transfer to the Employer, without any separate remuneration or compensation
other than the compensation already paid to the Key Executive, the Key
Executive’s entire right, title and interest in and to, together with all
United States and foreign patent rights and any other legal protection in and
with respect to, any and all Inventions (i) conceived or made by the Key Executive
while in the employ of the Employer and engaged in the Employer’s affairs; (ii)
developed using equipment, supplies, facilities or trade secrets of the
Employer; or (iii) relating to the Employer’s business or current or
anticipated research and development. 
For purposes of this Agreement, “Invention” shall include, but not be
limited to any discovery, machine, mechanism, device, apparatus, equipment,
idea, process, method, design, development, improvement, concept, application,
technique, formulation, composition of matter, product, technology,
programming, code or any combination of these whether patentable or not, and
whether reduced to practice or not, which relates to the business of the
Employer.

2.04                        Non-Competition;
Non-Solicitation

In consideration for the termination benefits
described in Section 3.02 (a) through (i) hereof, for the period which is the
lesser the termination factor for the Executive multiplied by twelve (12) or
twenty-four (24) months immediately after the Involuntary Termination of the
Key Executive’s employment with the Employer, in any state in the United States
and any country in the world outside of the United States in which Company
conducts business on the date of termination, the Key Executive shall not:

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(a)                                  invest
in (other than in a publicly traded company with a maximum investment of no
more than 1% of outstanding shares), counsel, advise, consult or be otherwise
engaged or employed by any entity engaged in the manufacturing and sale of hot
rolled coiled steel and steel plate products and steel tubular goods.

(b)                                 either
directly or indirectly, either for the Key Executive or for any other person,
firm, company or corporation, call upon, solicit, divert, or take away, or
attempt to solicit, divert or take away any of the customers, prospective
customers, business, vendors or suppliers of the Employer that the Key
Executive had dealings with, or responsibility for, or the Key Executive had
access to confidential information of, such customers, vendors or suppliers;

(c)                                  without
the prior written consent of the Employer, (i) directly or indirectly, solicit
or recruit (whether as an employee, officer, director, agent, consultant or
independent contractor) any person who was or is at any time during the
previous six (6) months an employee, representative, officer or director of the
Employer or (ii) take any action to encourage or induce any employee,
representative, officer or director of the Employer to cease their relationship
with the Employer for any reason.

2.05                        Enforcement

If any of the provisions or subparts of this Article 2
shall be held to be invalid or unenforceable by a court of competent
jurisdiction, the remaining provisions or subparts thereof shall continue to be
valid and enforceable according to their terms. 
Further, if any restriction contained in the provisions or subparts of
this Article Two is held to be overbroad or unreasonable as written, the
parties agree that the applicable provision should be considered to be amended
to reflect the maximum period, scope or geographical area deemed reasonable and
enforceable by the court and enforced as amended.

2.06                        Remedy for
Breach

Because
the Key Executive’s services are unique and because the Key Executive has
access to confidential information and trade secrets of the Employer, the
parties agree that any breach or threatened breach of this Article Two will
cause irreparable harm to the Employer and that money damages alone would be an
inadequate remedy.  The parties therefore
agree that, in the event of any breach or threatened breach of this Article

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Two, and in
addition to all other rights and remedies available to it, the Employer may
apply to any court of competent jurisdiction for specific performance and/or
injunctive or other relief, without a bond, in order to enforce or prevent any
violations of the provisions of this Article Two.  The Key Executive acknowledges and agrees
that nothing contained herein shall be construed to be an excessive remedy to
prohibit the Employer from pursuing any other remedies available to it for such
actual or threatened breach, including but not limited to the recovery of money
damages, proximately caused by Key Executive’s breach of this Article Two.

2.07                        Survival

The
provisions of this Article Two shall survive and continue in full force in
accordance with their terms notwithstanding any termination of this Agreement.

ARTICLE THREE -
TERMINATION OF EMPLOYMENT

3.01                        Conditions
Precedent to the Provision of Termination Benefits

The
termination benefits set forth in Section 3.02 (a) through (i) shall become due
and payable if and only if:

(a)                                  there
has been a Change in Control; and

(b)                                 an
Involuntary Termination of the employment of the Key Executive with the
Employer has occurred within the Qualifying Term.

3.02                        Termination
Benefits

Upon
the Involuntary Termination of the employment of the Key Executive with the
Employer, the Employer shall pay to the Key Executive the amount of any unpaid
salary earned by the Key Executive up to and including the date of such
Involuntary Termination, and any unpaid vacation pay earned by him up to and
including the date of such Involuntary Termination.  In addition, if both of the events set forth
in Section 3.01 have occurred, the Employer shall, within 30 days of the date
of the later of such events to occur:

(a)                                  pay
to the Key Executive an amount equal to his or her Annual Base Salary
(including any portion of such salary that is being deferred in accordance with
any salary or compensation deferral arrangement or agreement then in effect
between the Key Executive and the Employer) in effect immediately before the
Involuntary Termination, but disregarding any reduction in the

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 same made in contemplation of the Change in
Control, multiplied by the Termination Factor, which payment shall be deemed to
include any claim which the Key Executive may have during such period to sick
pay or short-term disability benefits and any statutory severance pay which may
be owed;

(b)                                 pay
to the Key Executive an amount equal to the Key Executive’s target bonus amount
for the fiscal year in which such Involuntary Termination occurs (or, if
greater, for the fiscal year in which the Change in Control occurs) pursuant to
any annual bonus plan maintained by the Employer, multiplied by the Termination
Factor;

(c)                                  continue
to make the Employer contributions necessary to maintain the Key Executive’s
coverage pursuant to the Employer’s benefit plans applicable to the Key
Executive for the life insurance, medical and dental benefit coverage, provided
the Key Executive continues to make the regular Key Executive contributions,
from the date of the Involuntary Termination until the earlier of (i) the
expiry of the ensuing thirty-six (36) month period or (ii) the date on which
the Key Executive receives comparable coverage under the plans and programs of
a subsequent employer; provided, however, that upon expiration of such
continued benefits, the Key Executive shall be further entitled to continued
health, dental and vision insurance benefits as required under the Consolidated
Omnibus Budget Reconciliation Act of 1985 (“COBRA”), subject to the Key
Executive’s timely election of COBRA healthcare continuation coverage;

(d)                                 credit
the Key Executive with an additional 36 months of service for the purposes of
any pension plan or pension arrangements in which the Key Executive
participated or which pertained to the Key Executive immediately prior to such
Involuntary Termination or which were in effect on the effective date of the
Change in Control, whichever were more beneficial to the Key Executive from the
date of the Involuntary Termination until the expiry of the Termination
Period.  To the extent that the Employer
is prohibited by applicable law from satisfying this covenant, the Employer
shall pay to the Key Executive, forthwith after the Change in Control, such
amount as may be necessary to provide the Key Executive with equivalent
value.  To the extent the applicable
pension plan or pension arrangement is a non-qualified, defined benefit pension
plan, the Employer shall pay to

 11
 

the Key
Executive a lump sum that is actuarially equivalent to the additional months of
service, rather than crediting additional months of service within the
operation of such plan;

(e)                                  confirm
that all stock options held by the Key Executive immediately prior to the
Involuntary Termination which have not been exercised by the Key Executive
shall continue to be exercisable for the duration of their respective exercise
periods.  All Stock Awards, including
stock options, not vested on the date of a Change in Control shall vest in
accordance with the terms of the applicable equity plan and award agreement;

(f)                                    confirm
the continuation of all salary deferral arrangements or agreements then in
effect between the Key Executive and the Employer;

(g)                                 if
any payment or benefit to or for the benefit of the Key Executive pursuant to
the terms of this Agreement, or any other plan of or arrangement or agreement
with the Employer or any affiliate of the Employer (referred to as “Total
Payments”) is subject to the Excise Tax (as hereinafter defined), the Employer
shall pay to the Key Executive an additional amount such that the net amount
retained by the Key Executive after deduction of any Excise Tax, and any
federal, state and local income and employment tax and Excise Tax imposed upon
the additional amount under this paragraph (g), shall be equal to the Total
Payments.  The term “Excise Tax” shall
mean the tax imposed by Section 4999 of the United States Internal Revenue Code
of 1986, as amended (the “Code”), and any similar tax that may hereafter be
imposed.

The
amount of the payment to the Key Executive under this paragraph (g) shall be
estimated by a nationally recognized firm of certified public accounts or
employee benefits consultants, based upon the following assumptions:

(i)                                     all
payments and benefits to or for the benefit of the Key Executive in connection
with a Change in Control of the Employer or termination of the Key Executive’s
employment following a Change in Control of the Employer shall be deemed to be
“parachute payments” within the meaning of Section 280G(b)(2) of the Code, and
all “excess parachute payments” shall be deemed to be subject to the Excise Tax
except to the extent that, in the opinion of tax counsel selected by the firm
so charged with estimating the payment to the Key Executive under this
paragraph (g), such payments or benefits are not subject to the Excise Tax; and

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(ii)                                  the
Key Executive shall be deemed to pay federal, provincial, state and local taxes
at the highest marginal rate of taxation for the applicable calendar year.

The
Employer shall pay the fees charged by such firm in preparing such estimate.

The
estimated amount of the payment due the Key Executive pursuant to this
paragraph (g) shall be paid to the Key Executive in a lump sum not later than
thirty (30) business days following the delivery of such estimate to the Key
Executive and the Employer.  In the event
that the amount of the estimated payment is less than the amount actually due
to the Key Executive under this paragraph (g), the amount of any such shortfall
shall be paid to the Key Executive within ten (10) days after the existence of
the shortfall is discovered.

(h)                                 to
the extent that any payment under this Agreement is deemed to be deferred
compensation subject to the requirements of Section 409A of the Code, the
Employer and the Key Executive shall amend this Agreement, as necessary, so
that such payments will be made in accordance with the requirements of Section
409A of the Code; provided, however, that, if any payment due to the Key
Executive is delayed as a result of Section 409A of the Code, the Key Executive
shall be entitled to be paid interest on such amount at an annual rate equal to
the prime rate, as published in the Wall Street Journal, plus 2%, in effect as
of the Key Executive’s date of termination. 
Such delayed payments will be paid at the earliest date permitted under
Section 409A of the Code.  Amendment of
the Agreement to comply with Section 409A of the Code will not result in the
Key Executive being entitled to receive any reduced or enhanced benefit under
this Agreement.  Notwithstanding the
foregoing, in the event the Key Executive is subjected to income or excise
taxes or other penalties under Section 409A of the Code by virtue of any amount
due to him, the Employer will pay an additional amount to the Key Executive to
make the Key Executive whole for such taxes. 
Such additional amount will be paid to the Key Executive not later than
the due date of the Key Executive’s tax return for the year in which the tax or
penalty is imposed; and

 

 

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(i)                                     In
the event the Key Executive’s Involuntary Termination occurs as a result of
death or disability following a Change in Control, the cash payments provided
in this Section 3.02 shall be offset by any life insurance, death, or
disability benefits payable to the Key Executive during the 36 months following
the Involuntary Termination pursuant to a life insurance, death benefit or
disability plan maintained by the Employer.

3.03                        Legal
Costs

If a
dispute arises regarding:

(a)                                  whether
or not a Change in Control or an Involuntary Termination has occurred;

(b)                                 the
validity, interpretation or enforcement of this Agreement; or

(c)                                  the
right of the Key Executive to receive any termination benefits referred to in
this Agreement;

the Employer shall
reimburse to or at the direction of the Key Executive all reasonable legal fees
and expenses incurred by the Key Executive relating to such dispute if the Key
Executive prevails in any material respect.

3.04                        Fair and
Reasonable

The
parties confirm that termination benefits described in Section 3.02 (a) through
(i) are fair and reasonable and that the termination benefits as outlined in
this Article Three are a reasonable estimate of the damages which will be
suffered by the Key Executive in the event of an Involuntary Termination within
twenty-four  (24) months following a
Change in Control and that such termination benefits shall not be construed as
a penalty.

3.05                        No Duty to
Mitigate

In
the event of an Involuntary Termination within twenty-four (24) months
following a Change in Control, the Key Executive shall not be required to
mitigate his damages by seeking other employment or otherwise, nor shall the
amount of any payment provided for under this Agreement be reduced in any
respect if the Key Executive shall not reasonably pursue alternate employment.

3.06        Security
for Payments

If a
Change in Control is anticipated to occur, the Employer shall forthwith make
such arrangements as may, in the view of the Board, be prudent and advisable to
assure the ability of the Employer to pay any amounts set forth in Section
3.02, including, without limitation, by arranging for one or more letters of
credit, depositing funds in trust or making such other arrangements as then
seem appropriate for such purpose.

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ARTICLE FOUR — RELEASE

4.01                        Release

As a
condition to receiving the termination benefits referred to in Section 3.02 (a)
through (i) hereof, the Key Executive shall execute the Release and Indemnity
in favor of the Employer in the form attached hereto as Schedule “A”.

4.02                        Rights under
Agreement

Section
4.01 shall not apply to any actions, causes of action, claims or demands which
the Key Executive may have relating to the failure or the refusal of the
Employer to comply with the terms of this Agreement.

ARTICLE FIVE — GENERAL

5.01                        Sections
and Headings

The
division of this Agreement into Articles and Sections and the insertion of
headings are for the convenience of reference only and shall not affect the
construction or interpretation of this Agreement.  The terms “this Agreement”, “hereof”,
“hereunder” and similar expressions refer to this Agreement and not to any
particular Article, Section or other portion hereof and include any agreement
or instrument supplemental or ancillary hereto. 
Unless something in the subject matter or context is inconsistent
therewith, references herein to Articles and Sections are to Articles and
Sections of this Agreement.

5.02                        Number

In
this Agreement words importing the singular number only shall include the
plural and vice versa and words importing the masculine gender shall include
the feminine and neuter genders and vice versa and words importing persons
shall include individuals, partnerships, associations, trusts, unincorporated
organizations and corporations and vice versa.

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5.03        Benefit of Agreement

This Agreement shall
inure to the benefit of and be binding upon the heirs, executors,
administrators and legal personal representatives of the Key Executive and the
successors and assigns of the Employer, respectively.  The Employer shall ensure that any Person
acquiring legal or beneficial ownership of all or substantially all of the
assets of the Employer in a transaction which constitutes a Change in Control
pursuant to paragraph (iii) of the definition of “Change in Control” agrees to
assume all of the obligations of the Employer under this Agreement, jointly and
severally with the Employer.  If the Key
Executive dies after becoming entitled to payments made hereunder but before
all such payments are made, all remaining payments will be made to the
beneficiary designated by the Key Executive pursuant to reasonable procedures
established by the Employer, or in the absence thereof, to the estate of the
Key Executive.

5.04                        Entire
Agreement

This Agreement
constitutes the entire agreement between the parties with respect to the
subject matter hereof, cancels, and supersedes any prior understandings and
agreements between the parties hereto with respect thereto.  There are no representations, warranties,
forms, conditions, undertakings or collateral agreements, express, implied or
statutory between the parties other than as expressly set forth in this
Agreement. The Key Executive waives any right to assert a claim based on any
pre-contractual representations, negligent or otherwise, made by the Employer.

5.05                        Amendments
and Waivers

No
amendment to this Agreement shall be valid or binding unless set forth in
writing and duly executed by both of the parties hereto.  No waiver of any breach of any provision of
this Agreement shall be effective or binding unless made in writing and signed
by the party purporting to give the same and, unless otherwise provided in the
written waiver, shall be limited to the specific breach waived.

5.06                        No
Assignment

This
Agreement may not be assigned by the Employer without the written consent of
the Key Executive.

 16
 

5.07        Severability

If any provision in this
Agreement is determined to be invalid or unenforceable in whole or in part,
such invalidity or unenforceability shall attach only to such provision or part
thereof and the remaining part of such provision and all other provisions
hereof shall continue in full force and effect.

5.08        Notices

Any demand, notice or
other communication (hereinafter in this Section 5.08 referred to as a
“Communication”) to be given in connection with this Agreement shall be given
in writing and may be given by personal delivery or by registered mail
addressed to the recipient as follows:

To the Key Executive:

to the address on file
with the Human Resources Department of the Employer

To the Employer:

IPSCO Inc.

650 Warrenville Road,
Ste. 500

Lisle, Illinois 60532

Attn: General Counsel

or such other address or
individual as may be designated by notice by either party to the other.  Any Communication given by personal delivery
shall be conclusively deemed to have been given on the day of actual delivery
thereof and, if made or given by registered mail, on the third day, other than
a Saturday, Sunday or statutory holiday in Illinois, following the deposit
thereof in the mail.  If the party giving
any Communication knows or ought reasonably to know of any difficulties with
the postal system, which might affect the delivery of mail, any such
Communication shall not be mailed but shall be given by personal delivery.

5.09                        Governing
Law

This
Agreement shall be governed by and construed in accordance with the law of the
State of Illinois, without regard to conflicts of law principles.

5.10                        Copy of
Agreement; Counterparts

The
Key Executive hereby acknowledges receipt of a copy of this Agreement duly
signed by the Employer.  The Agreement
may be executed in one or more counterparts, all of which together shall
constitute but one Agreement.

 17
 

5.11        Independent Legal Advice

The Key Executive hereby
acknowledges that he has had the opportunity to obtain independent legal advice
with respect to the Agreement.

IN WITNESS WHEREOF the
parties have executed this Agreement as of the day and year first above
written.

SIGNED, AND DELIVERED BY

David Stewart Sutherland

 

in the presence of:

	
  SIGNATURE OF WITNESS

  	
   

  	
  David Stewart Sutherland

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  IPSCO INC.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Per: ____________________

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
         Raymond J.
  Rarey

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Per: ____________________

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
         Leslie T.
  Lederer

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Per: ____________________

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
         Burton M.
  Joyce

  	
   

  	
   

  	
   

  

 

 

 

 18

SCHEDULE “A”

Release and Indemnity

WHEREAS,
my employment with IPSCO Inc. or any subsidiary of it was
terminated within the meaning of an Agreement dated                          ,
20     ;

WHEREAS,
I have agreed to accept the termination benefits set out in
the Agreement that is attached hereto, less all applicable deductions, and
other good and valuable consideration in full settlement of any and all claims
I may have relating to my employment with IPSCO or its subsidiary or the
termination thereof and the termination of any employment agreement between me
and my employer as a consequence thereof;

NOW,
THEREFORE, WITNESSETH, that in consideration of the terms of
settlement outlined above, I hereby release and forever discharge IPSCO Inc.
and any corporations associated therewith or related thereto and their
respective directors, officers, employees and agents (collectively referred to
as the “Releases”) from any and all actions, causes of action, claims and
demands arising from my employment with IPSCO Inc. or any corporations
associated therewith or related thereto or the termination of that employment,
including any claims pursuant to applicable statutes, including any claims for
overtime pay, public holiday pay, vacation pay, termination pay, severance pay
and pay in lieu of reasonable notice and including any and all actions, causes
of action, claims or demands arising under my employment agreement with IPSCO
Inc.

FOR
THE SAID CONSIDERATION, I further agree not to make any claim
or take any proceedings against any other individual, partnership, association,
trust, unincorporated organization or corporation with respect to any matters
which may have arisen between me and the Releases or any one of them for
contribution or indemnity or other relief over; and

FURTHERMORE,
for the aforesaid consideration, I hereby agree to indemnify and save harmless
the Releases from any and all claims or demands under any applicable income
tax, social security or insurance, pension, employment insurance or other
similar statute providing for the remittance of amounts to any governmental
authority from employment compensation, including any regulations made
thereunder and any other statute or regulations, for or in respect of any
failure on the part of the Releases to withhold income tax, social security or
insurance, pension premiums or employment insurance premiums or benefit
overpayments or any other tax, premium, payment or levy from all or any part of
the said consideration and any interest or penalties relating thereto and any
costs or expenses incurred in defending such claims or demands; and

 1
 

I
HEREBY FURTHER DECLARE that I have had the opportunity to
seek independent legal advice with respect to the terms of settlement as well
as this Release and Indemnity and I fully understand them.  I hereby voluntarily accept the said terms
for the purpose of making full and final compromise, adjustment and settlement
of all claims as aforesaid.

NOTWITHSTANDING
THE FOREGOING, this Release and Indemnity shall not apply to
any actions, causes of action, claims or demands which I may have relating to
the failure or the refusal of IPSCO Inc. to comply with the terms of the
Agreement or this Release and Indemnity.

THIS
RELEASE AND INDEMNITY shall be deemed to have been made in
and shall be construed in accordance with the laws of Illinois and the laws of
Canada applicable therein.

THIS
RELEASE AND INDEMNITY shall enure to the benefit of and be
binding upon me and the Releases and our respective heirs, executors,
administrators and legal personal representatives, successors and assigns.

IN WITNESS WHEREOF I
have executed this Release and Indemnity as of the           
day of                                  ,
20      .

SIGNED, AND DELIVERED BY

David Stewart Sutherland

 

in the presence of:

 

	
  SIGNATURE OF WITNESS

  	
   

  	
  David Stewart Sutherland

  	
   

  

 

 

 

 2Exhibit 10.7

 

 

CHANGE IN CONTROL AGREEMENT

 

BETWEEN

Vicki Lee Avril

 

AND

IPSCO INC.

MADE AS OF THIS 18th DAY OF NOVEMBER 2005

CHANGE
IN CONTROL AGREEMENT

THIS IS AN AGREEMENT made as of this 18TH day of November 2005,

B E T W E E N:

Vicki Lee
Avril

 

(hereinafter
referred to as the “Key Executive”),

OF THE FIRST PART,

- and -

IPSCO
INC.

a corporation
incorporated under the laws of Canada

 

(hereinafter
referred to as the “Employer”),

OF THE SECOND PART.

WHEREAS,  the
Key Executive is employed by the Employer or a subsidiary of the Employer
(referred to as the “Employer” herein) in a senior executive capacity; and

WHEREAS, the Employer considers that the service
of the Key Executive to the Employer entitles the Key Executive to receive the
benefits set forth in this Agreement in the event of the Involuntary
Termination of the Key Executive’s employment within the Qualifying Term before
or after a Change in Control; and

WHEREAS, the Employer recognizes that the
uncertainty and insecurity that may arise as a result of the occurrence of a
Change in Control could lead to the departure of the Key 

 1
 

Executive to the
detriment of the Employer and its shareholders; and

WHEREAS, a Change in Control of the Employer,
while not currently in contemplation, is a possibility; and

WHEREAS, the Employer considers it in the best
interests of the Employer and its shareholders that the Key Executive have a
strong incentive to remain in the employ of the Employer so as to maximize the
value of the Employer; and

WHEREAS, the Employer considers that in order to
assist in the continued dedication of the Key Executive to the Employer, it is
important to establish contractual arrangements that provide incentives to the
Key Executive to continue in the employ of the Employer notwithstanding the
possibility or occurrence of a Change in Control and provide financial security
to the Key Executive in the event of the Involuntary Termination of the Key
Executive’s employment within the Qualifying Term before or after a Change in
Control; and

WHEREAS, the Employer and the Key Executive
acknowledge that the compensation and benefits payable to the Key Executive
hereunder and the consideration and covenants that flow from the Key Executive
to the Employer are fair and reasonable having regard to all of the
circumstances of the Key Executive’s employment with the Employer; and

WHEREAS, the Employer’s Board of Director’s has
determined that it is in the best interests of the Employer that, in exchange
for the assurances and undertakings provided below, it obtain from the Key
Executive certain covenants which are of significant benefit to the Employer;

NOW
THEREFORE, in
consideration of the mutual covenants and agreements contained in this
Agreement, and for other good and valuable consideration, the Employer and the
Key Executive agree as follows:

ARTICLE ONE - DEFINITIONS

1.01                        Definitions

In
this Agreement, the following terms shall have the meanings set out below
unless the context requires otherwise:

 2
 

“Annual Base Salary” means the dollar value
or any cash or non-cash base salary established by the Management Resources and
Compensation Committee of the Employer to be the salary of the Key Executive,
for the financial year covered, for the purposes of calculation of any bonuses
or other benefits, including insurance benefits, 401(k) savings plan,
non-qualified compensation deferrals, or pension entitlements that relate to or
are calculated with reference to the salary or other remuneration of the Key
Executive.

“Cause” means:

(i)                                     the willful failure of the Key Executive to
carry out the Key Executive’s reasonable and lawful duties, responsibilities or
tasks after the Employer’s Board of Directors has given the Key Executive
written notice of the willful failure to do so, and the opportunity to correct
the same within a reasonable time from the date of receipt of such written
notice;

(ii)                                  Willful gross misconduct, gross
negligence, the commission of a criminal act, theft, fraud or dishonesty by the
Key Executive involving the property or affairs of the Employer or the carrying
out of the Key Executive’s duties, responsibilities and tasks; or

(iii)                             Willful engagement in conduct that is
demonstrably and materially injurious to the Employer, monetarily or otherwise.

For purposes of this
Agreement, the Key Executive’s employment shall be deemed to have terminated
for Cause if, after the Key Executive’s employment has been terminated, facts
and circumstances are discovered that would have justified a termination for
Cause.

 

“Change in Control” means the occurrence at any date
following execution of this Agreement of any of the following events:

(i)                                     any change, either through the issue,
transfer, acquisition, conversion, exchange or otherwise of shares, or through
amalgamation, arrangement, merger or otherwise (the “Transaction”), as a result
of which the Employer ceases to exist as a separate legal entity and the
beneficial shareholders of the Employer immediately before such change (not
including any other party to the Transaction or any such beneficial shareholder
who was also a 

 3
 

shareholder in such other party before the
Transaction) hold less than 50% of the shares or other securities of the entity
resulting from the change entitled to vote generally in the election of the
directors of the entity; 

(ii)                                  any
change, either direct or indirect, in the beneficial ownership of Common Shares
as a result of which a Person or a group of Persons acting jointly or in
concert at arm’s length to the Employer, either individually or together with
its or their associates and affiliates, beneficially owns more than 20% of all
of the Common Shares.  For purposes of
this clause (ii), the terms “associate”, “affiliate” and “beneficial ownership”
shall have the same respective meanings as in the Securities Act (Ontario) as
may be amended from time to time;             

(iii)                               the consummation of any transaction,
whether by way of reorganization, consolidation, arrangement, liquidation,
transfer, exchange, sale or otherwise, whereby a Person or a group of Persons
acting jointly or in concert at arm’s length to the Employer, either
individually or together with its or their affiliates, acquires legal or
beneficial ownership of all or substantially all of the assets of the Employer,
other than in a transaction that would result in:

(A)                              the
holders of Common Shares immediately prior to the completion of such
transaction (not including any such Person or any owner of such Person)
continuing to own more than 50% of the voting shares of the surviving entity
outstanding immediately following the completion of such transaction, and

(B)                                a
majority of the members of the board of directors of the surviving entity
having been members of the board of directors of the Employer immediately prior
to the completion of such transaction; or

(iv)                              the replacement by way of election at any
one time, or the appointment at any one or a series of related times, of more
than one-half of the members of the Board, if the election or appointment of
such replacement directors has not been approved by a majority of the members of
the Board in office immediately before such replacement.

 4
 

If
the Key Executive is employed by IPSCO Enterprises Inc., or a successor
subsidiary of the Employee in the United States, “Employer” for purposes of
this definition of “Change in Control” shall mean either IPSCO Inc. or such
United States Subsidiary.  In no event
will a Change in Control be deemed to have occurred, with respect to the Key
Executive, if an employee benefit plan maintained by the Employer or the Key
Executive is part of a purchasing group that consummates the Change in Control
transaction.  The employee benefit plan
or the Key Executive will be deemed “part of a purchasing group” for purposes
of the preceding sentence if the plan or the Key Executive is an equity
participant in the purchasing company or group (except:  (i) passive ownership of less than two
percent (2%) of the stock of the purchasing company; or (ii) ownership of
equity participation in the purchasing company or group that is otherwise not
significant, as determined prior to the Change in Control by a majority of the
non-employee continuing directors).  

“Common Shares” means the common shares or any other
securities of the Employer entitled to vote generally in the election of
members of the Board as at any particular time.

“Communication” has the meaning
given to it in Section 5.08.

“Involuntary Termination” means:

(i)                                     any termination by the Employer of the
Key Executive’s employment following any Change in Control that is not due to
Cause, which shall include a termination of the Key Executive’s Employment due
to:

(A)                              the
death of the Key Executive; or

(B)                                a
condition of total and continuing disability which renders the Key Executive
incapable of performing his essential job duties and functions for a period of
six (6) months; or

(ii)                                  any termination by the Employer of the
Key Executive’s employment, which is not due to Cause, that occurs prior to the
Change in Control at the request or direction of a potential acquirer that
ultimately participates in the Change in Control; or 

(iii)                               the resignation of the Key Executive from
his employment with the Employer within 60 days of the occurrence of any of the
following events:

 5
 

(A)                              any
requirement by the Employer following any Change in Control that the Key
Executive’s position be based and principal office located outside a 40-mile
radius from the Key Executive’s principal office immediately prior to the
Change in Control;

(B)                                any
material reduction in the Key Executive’s position, reporting relationship,
overall responsibilities or authority from that in effect immediately prior to
any Change in Control, or immediately prior to any reduction thereto made in
contemplation of the Change in Control;

(C)                                any
material reduction in the Key Executive’s overall cash compensation (Annual
Base Salary plus target bonus opportunity) paid to him by the Employer as in
effect immediately prior to any Change in Control or as such overall
remuneration may have been subsequently increased from time to time; or

(D)                               any
termination or material reduction in the aggregate value of the Key Executive’s
benefit programs, including, but not limited to, any pension plan, stock award
plan, investment plan, savings plan, incentive compensation plan or life
insurance, medical plans or disability plans provided by the Employer to the
Key Executive and in which the Key Executive is participating or under which
the Key Executive is covered, all as in effect immediately prior to any Change
in Control or as such benefit programs may have been subsequently increased
from time to time, that has not been replaced by benefit programs of any other
Person which provide the Key Executive with substantially equivalent benefits
and value under substantially equivalent terms and conditions as were provided
by the benefit programs in effect immediately prior to the Change in Control.

“Person” shall include individuals, partnerships,
associations, trusts, unincorporated organizations and corporations.

“Qualifying
Term” means the twenty-four (24) months following, or the six
(6) months preceding, a Change in Control. 

 6

“Stock Awards”
means all options to purchase Common Shares of the Employer granted to the Key
Executive under the IPSCO Inc. Incentive Share Option Plan or any successor or
replacement of such plan, which have not been exercised by the Key Executive as
of any particular date, whether vested or unvested, and any awards of equity
interests of the Employer issued under an equity incentive plan of the
Employer.

“Termination Factor” means the
multiple that will be used to calculate the termination benefits set forth in
Section 3.02, which for the Key Executive shall equal 2.5.

“Willful” means
any act done or omitted to be done by the Key Executive intentionally and
without reasonable belief that such act or omission was in the best interests
of the Employer.  An act shall not be
Willful if taken pursuant to advice of counsel engaged to represent the
Employer.

ARTICLE TWO — KEY
EXECUTIVE’S COVENANTS

2.01                        Non-Disclosure

In
consideration for the termination benefits described in Section 3.02 (a)
through (i) hereof, the Key Executive shall not (either during the continuance
of his employment or at any time thereafter) disclose any proprietary and
confidential information of the Employer, including, without limitation, the
Employer’s financial data, business plans and trade secrets, to any person
other than for the Employer’s purposes and shall not (either during the
continuance of the employment or at any time thereafter) use for his own
purposes or for any purposes other than those of the Employer any such
information or secrets he may acquire in relation to the business of the
Employer.

2.02                        Key
Executive to Remain Employed

In
consideration for the termination benefits described in Section 3.02 (a)
through (i) hereof, if a Person effects a Change in Control, the Key Executive
shall not voluntarily leave his employment with the Employer, other than by way
of retirement pursuant to the normal retirement plans of the Employer, and
shall continue to perform his duties related to his employment until such
Person has abandoned or terminated his or its efforts to effect a Change in
Control or until after a Change in Control has occurred.  Should the Key Executive voluntarily leave
his employment with the Employer contrary to this Section, the Key Executive
shall, immediately upon the cessation of his employment with the Employer,
cease to be entitled to any of the benefits provided for under this Agreement,
but the Employer shall have no other recourse against or claim against the Key
Executive in respect of his voluntary leaving his employment contrary to this
Section 2.02.

 7
 

2.03        Return of Property; Assignment of
Inventions

In
consideration for the termination benefits described in Section 3.02 (a)
through (i) hereof, immediately following the Involuntary Termination of the
Key Executive’s employment, the Key Executive shall at once:

(a)                                  deliver
or cause to be delivered to the Employer all books or other documents stored in
paper or electronic form, effects, money, securities or other property
belonging to the Employer or for which the Employer is liable to others, which
are in the possession, charge, control or custody of the Key Executive; and

(b)                                 assign
and transfer to the Employer, without any separate remuneration or compensation
other than the compensation already paid to the Key Executive, the Key
Executive’s entire right, title and interest in and to, together with all
United States and foreign patent rights and any other legal protection in and
with respect to, any and all Inventions (i) conceived or made by the Key Executive
while in the employ of the Employer and engaged in the Employer’s affairs; (ii)
developed using equipment, supplies, facilities or trade secrets of the
Employer; or (iii) relating to the Employer’s business or current or
anticipated research and development. 
For purposes of this Agreement, “Invention” shall include, but not be
limited to any discovery, machine, mechanism, device, apparatus, equipment,
idea, process, method, design, development, improvement, concept, application,
technique, formulation, composition of matter, product, technology,
programming, code or any combination of these whether patentable or not, and
whether reduced to practice or not, which relates to the business of the
Employer.

2.04                        Non-Competition;
Non-Solicitation

In consideration for the termination benefits
described in Section 3.02 (a) through (i) hereof, for the period which is the
lesser the termination factor for the Executive multiplied by twelve (12) or
twenty-four (24) months immediately after the Involuntary Termination of the
Key Executive’s employment with the Employer, in any state in the United States
and any country in the world outside of the United States in which Company
conducts business on the date of termination, the Key Executive shall not:

 8
 

(a)                                  invest
in (other than in a publicly traded company with a maximum investment of no
more than 1% of outstanding shares), counsel, advise, consult or be otherwise
engaged or employed by any entity engaged in the manufacturing and sale of hot
rolled coiled steel and steel plate products and steel tubular goods.

(b)                                 either
directly or indirectly, either for the Key Executive or for any other person,
firm, company or corporation, call upon, solicit, divert, or take away, or
attempt to solicit, divert or take away any of the customers, prospective
customers, business, vendors or suppliers of the Employer that the Key
Executive had dealings with, or responsibility for, or the Key Executive had
access to confidential information of, such customers, vendors or suppliers;

(c)                                  without
the prior written consent of the Employer, (i) directly or indirectly, solicit
or recruit (whether as an employee, officer, director, agent, consultant or
independent contractor) any person who was or is at any time during the
previous six (6) months an employee, representative, officer or director of the
Employer or (ii) take any action to encourage or induce any employee,
representative, officer or director of the Employer to cease their relationship
with the Employer for any reason.

2.05                        Enforcement

If any of the provisions or subparts of this Article
Two shall be held to be invalid or unenforceable by a court of competent
jurisdiction, the remaining provisions or subparts thereof shall continue to be
valid and enforceable according to their terms.  Further, if any restriction contained in the
provisions or subparts of this Article Two is held to be overbroad or
unreasonable as written, the parties agree that the applicable provision should
be considered to be amended to reflect the maximum period, scope or
geographical area deemed reasonable and enforceable by the court and enforced
as amended.

2.06                        Remedy for
Breach

Because
the Key Executive’s services are unique and because the Key Executive has
access to confidential information and trade secrets of the Employer, the
parties agree that any breach or threatened breach of this Article Two will
cause irreparable harm to the Employer and that money damages alone would be an
inadequate remedy.  The parties therefore
agree that, in the event of any breach or threatened breach of this Article

 9
 

Two, and in
addition to all other rights and remedies available to it, the Employer may
apply to any court of competent jurisdiction for specific performance and/or
injunctive or other relief, without a bond, in order to enforce or prevent any
violations of the provisions of this Article Two.  The Key Executive acknowledges and agrees
that nothing contained herein shall be construed to be an excessive remedy to
prohibit the Employer from pursuing any other remedies available to it for such
actual or threatened breach, including but not limited to the recovery of money
damages, proximately caused by Key Executive’s breach of this Article Two.

2.07                        Survival

The
provisions of this Article Two shall survive and continue in full force in
accordance with their terms notwithstanding any termination of this Agreement.

ARTICLE THREE -
TERMINATION OF EMPLOYMENT

3.01                        Conditions
Precedent to the Provision of Termination Benefits

The
termination benefits set forth in Section 3.02 (a) through (i) shall become due
and payable if and only if:

(a)                                  there
has been a Change in Control; and

(b)                                 an
Involuntary Termination of the employment of the Key Executive with the
Employer has occurred within the Qualifying Term.

3.02                        Termination
Benefits

Upon
the Involuntary Termination of the employment of the Key Executive with the
Employer, the Employer shall pay to the Key Executive the amount of any unpaid
salary earned by the Key Executive up to and including the date of such
Involuntary Termination, and any unpaid vacation pay earned by him up to and
including the date of such Involuntary Termination.  In addition, if both of the events set forth
in Section 3.01 have occurred, the Employer shall, within 30 days of the date
of the later of such events to occur:

(a)                                  pay
to the Key Executive an amount equal to his or her Annual Base Salary
(including any portion of such salary that is being deferred in accordance with
any salary or compensation deferral arrangement or agreement then in effect
between the Key Executive and the Employer) in effect immediately before the
Involuntary Termination, but disregarding any reduction in the

 10
 

same
made in contemplation of the Change in Control, multiplied by the Termination
Factor, which payment shall be deemed to include any claim which the Key
Executive may have during such period to sick pay or short-term disability
benefits and any statutory severance pay which may be owed;

(b)                                 pay
to the Key Executive an amount equal to the Key Executive’s target bonus amount
for the fiscal year in which such Involuntary Termination occurs (or, if
greater, for the fiscal year in which the Change in Control occurs) pursuant to
any annual bonus plan maintained by the Employer, multiplied by the Termination
Factor;

(c)                                  continue
to make the Employer contributions necessary to maintain the Key Executive’s
coverage pursuant to the Employer’s benefit plans applicable to the Key
Executive for the life insurance, medical and dental benefit coverage, provided
the Key Executive continues to make the regular Key Executive contributions,
from the date of the Involuntary Termination until the earlier of (i) the
expiry of the ensuing thirty (30) month period or (ii) the date on which the
Key Executive receives comparable coverage under the plans and programs of a
subsequent employer; provided, however, that upon expiration of such continued
benefits, the Key Executive shall be further entitled to continued health,
dental and vision insurance benefits as required under the Consolidated Omnibus
Budget Reconciliation Act of 1985 (“COBRA”), subject to the Key Executive’s
timely election of COBRA healthcare continuation coverage;

(d)                                 credit
the Key Executive with an additional 30 months of service for the purposes of
any pension plan or pension arrangements in which the Key Executive
participated or which pertained to the Key Executive immediately prior to such
Involuntary Termination or which were in effect on the effective date of the
Change in Control, whichever were more beneficial to the Key Executive from the
date of the Involuntary Termination until the expiry of the Termination
Period.  To the extent that the Employer
is prohibited by applicable law from satisfying this covenant, the Employer
shall pay to the Key Executive, forthwith after the Change in Control, such
amount as may be necessary to provide the Key Executive with equivalent
value.  To the extent the applicable
pension plan or pension arrangement is a non-qualified, defined benefit pension
plan, the Employer shall pay to

 11
 

the Key
Executive a lump sum that is actuarially equivalent to the additional months of
service, rather than crediting additional months of service within the
operation of such plan;

(e)                                  confirm
that all stock options held by the Key Executive immediately prior to the
Involuntary Termination which have not been exercised by the Key Executive
shall continue to be exercisable for the duration of their respective exercise
periods.  All Stock Awards, including
stock options, not vested on the date of a Change in Control shall vest in
accordance with the terms of the applicable equity plan and award agreement;

(f)                                    confirm
the continuation of all salary deferral arrangements or agreements then in
effect between the Key Executive and the Employer;

(g)                                 if
any payment or benefit to or for the benefit of the Key Executive pursuant to
the terms of this Agreement, or any other plan of or arrangement or agreement
with the Employer or any affiliate of the Employer (referred to as “Total
Payments”) is subject to the Excise Tax (as hereinafter defined), the Employer
shall pay to the Key Executive an additional amount such that the net amount
retained by the Key Executive after deduction of any Excise Tax, and any
federal, state and local income and employment tax and Excise Tax imposed upon
the additional amount under this paragraph (g), shall be equal to the Total
Payments.  The term “Excise Tax” shall
mean the tax imposed by Section 4999 of the United States Internal Revenue Code
of 1986, as amended (the “Code”), and any similar tax that may hereafter be
imposed.

The
amount of the payment to the Key Executive under this paragraph (g) shall be
estimated by a nationally recognized firm of certified public accounts or
employee benefits consultants, based upon the following assumptions:

(i)                                     all
payments and benefits to or for the benefit of the Key Executive in connection
with a Change in Control of the Employer or termination of the Key Executive’s
employment following a Change in Control of the Employer shall be deemed to be
“parachute payments” within the meaning of Section 280G(b)(2) of the Code, and
all “excess parachute payments” shall be deemed to be subject to the Excise Tax
except to the extent that, in the opinion of tax counsel selected by the firm
so charged with estimating the payment to the Key Executive under this
paragraph (g), such payments or benefits are not subject to the Excise Tax; and

 12
 

(ii)                                  the
Key Executive shall be deemed to pay federal, provincial, state and local taxes
at the highest marginal rate of taxation for the applicable calendar year.

The
Employer shall pay the fees charged by such firm in preparing such estimate.

The
estimated amount of the payment due the Key Executive pursuant to this
paragraph (g) shall be paid to the Key Executive in a lump sum not later than
thirty (30) business days following the delivery of such estimate to the Key
Executive and the Employer.  In the event
that the amount of the estimated payment is less than the amount actually due
to the Key Executive under this paragraph (g), the amount of any such shortfall
shall be paid to the Key Executive within ten (10) days after the existence of
the shortfall is discovered.

(h)                                 to
the extent that any payment under this Agreement is deemed to be deferred
compensation subject to the requirements of Section 409A of the Code, the
Employer and the Key Executive shall amend this Agreement, as necessary, so
that such payments will be made in accordance with the requirements of Section
409A of the Code; provided, however, that, if any payment due to the Key
Executive is delayed as a result of Section 409A of the Code, the Key Executive
shall be entitled to be paid interest on such amount at an annual rate equal to
the prime rate, as published in the Wall Street Journal, plus 2%, in effect as
of the Key Executive’s date of termination. 
Such delayed payments will be paid at the earliest date permitted under
Section 409A of the Code.  Amendment of
the Agreement to comply with Section 409A of the Code will not result in the
Key Executive being entitled to receive any reduced or enhanced benefit under
this Agreement.  Notwithstanding the
foregoing, in the event the Key Executive is subjected to income or excise
taxes or other penalties under Section 409A of the Code by virtue of any amount
due to him, the Employer will pay an additional amount to the Key Executive to
make the Key Executive whole for such taxes. 
Such additional amount will be paid to the Key Executive not later than
the due date of the Key Executive’s tax return for the year in which the tax or
penalty is imposed; and

 13

(i)                                     In
the event the Key Executive’s Involuntary Termination occurs as a result of
death or disability following a Change in Control, the cash payments provided
in this Section 3.02 shall be offset by any life insurance, death, or
disability benefits payable to the Key Executive during the 30 months following
the Involuntary Termination pursuant to a life insurance, death benefit or
disability plan maintained by the Employer.

3.03                        Legal
Costs

If a
dispute arises regarding:

(a)                                  whether
or not a Change in Control or an Involuntary Termination has occurred;

(b)                                 the
validity, interpretation or enforcement of this Agreement; or

(c)                                  the
right of the Key Executive to receive any termination benefits referred to in
this Agreement;

the Employer shall
reimburse to or at the direction of the Key Executive all reasonable legal fees
and expenses incurred by the Key Executive relating to such dispute if the Key
Executive prevails in any material respect.

3.04                        Fair and
Reasonable

The
parties confirm that termination benefits described in Section 3.02 (a) through
(i) are fair and reasonable and that the termination benefits as outlined in
this Article Three are a reasonable estimate of the damages which will be
suffered by the Key Executive in the event of an Involuntary Termination within
twenty-four  (24) months following a
Change in Control and that such termination benefits shall not be construed as
a penalty.

3.05                        No Duty to
Mitigate

In
the event of an Involuntary Termination within twenty-four (24) months
following a Change in Control, the Key Executive shall not be required to
mitigate his damages by seeking other employment or otherwise, nor shall the
amount of any payment provided for under this Agreement be reduced in any
respect if the Key Executive shall not reasonably pursue alternate employment.

 14
 

3.06        Security for Payments

If a
Change in Control is anticipated to occur, the Employer shall forthwith make
such arrangements as may, in the view of the Board, be prudent and advisable to
assure the ability of the Employer to pay any amounts set forth in Section
3.02, including, without limitation, by arranging for one or more letters of
credit, depositing funds in trust or making such other arrangements as then
seem appropriate for such purpose.

ARTICLE FOUR — RELEASE

4.01                        Release

As a
condition to receiving the termination benefits referred to in Section 3.02 (a)
through (i) hereof, the Key Executive shall execute the Release and Indemnity
in favor of the Employer in the form attached hereto as Schedule “A”.

4.02                        Rights under
Agreement

Section
4.01 shall not apply to any actions, causes of action, claims or demands which
the Key Executive may have relating to the failure or the refusal of the
Employer to comply with the terms of this Agreement.

ARTICLE FIVE — GENERAL

5.01                        Sections
and Headings

The
division of this Agreement into Articles and Sections and the insertion of
headings are for the convenience of reference only and shall not affect the
construction or interpretation of this Agreement.  The terms “this Agreement”, “hereof”,
“hereunder” and similar expressions refer to this Agreement and not to any
particular Article, Section or other portion hereof and include any agreement
or instrument supplemental or ancillary hereto. 
Unless something in the subject matter or context is inconsistent
therewith, references herein to Articles and Sections are to Articles and
Sections of this Agreement.

5.02                        Number

In
this Agreement words importing the singular number only shall include the
plural and vice versa and words importing the masculine gender shall include
the feminine and neuter genders and vice versa and words importing persons
shall include individuals, partnerships, associations, trusts, unincorporated
organizations and corporations and vice versa.

 15
 

5.03        Benefit of Agreement

This Agreement shall
inure to the benefit of and be binding upon the heirs, executors,
administrators and legal personal representatives of the Key Executive and the
successors and assigns of the Employer, respectively.  The Employer shall ensure that any Person
acquiring legal or beneficial ownership of all or substantially all of the
assets of the Employer in a transaction which constitutes a Change in Control
pursuant to paragraph (iii) of the definition of “Change in Control” agrees to
assume all of the obligations of the Employer under this Agreement, jointly and
severally with the Employer.  If the Key
Executive dies after becoming entitled to payments made hereunder but before
all such payments are made, all remaining payments will be made to the
beneficiary designated by the Key Executive pursuant to reasonable procedures
established by the Employer, or in the absence thereof, to the estate of the
Key Executive.

5.04                        Entire
Agreement

This Agreement
constitutes the entire agreement between the parties with respect to the
subject matter hereof, cancels, and supersedes any prior understandings and
agreements between the parties hereto with respect thereto.  There are no representations, warranties,
forms, conditions, undertakings or collateral agreements, express, implied or
statutory between the parties other than as expressly set forth in this
Agreement. The Key Executive waives any right to assert a claim based on any
pre-contractual representations, negligent or otherwise, made by the Employer.

5.05                        Amendments
and Waivers

No
amendment to this Agreement shall be valid or binding unless set forth in
writing and duly executed by both of the parties hereto.  No waiver of any breach of any provision of
this Agreement shall be effective or binding unless made in writing and signed
by the party purporting to give the same and, unless otherwise provided in the
written waiver, shall be limited to the specific breach waived.

5.06                        No
Assignment

This
Agreement may not be assigned by the Employer without the written consent of
the Key Executive.

 16
 

5.07        Severability

If any provision in this
Agreement is determined to be invalid or unenforceable in whole or in part,
such invalidity or unenforceability shall attach only to such provision or part
thereof and the remaining part of such provision and all other provisions
hereof shall continue in full force and effect.

5.08        Notices

Any demand, notice or
other communication (hereinafter in this Section 5.08 referred to as a
“Communication”) to be given in connection with this Agreement shall be given
in writing and may be given by personal delivery or by registered mail
addressed to the recipient as follows:

To the Key Executive:

to the address on file
with the Human Resources Department of the Employer

To the Employer:

IPSCO Inc.

650 Warrenville Road,
Ste. 500

Lisle, Illinois 60532

Attn: General Counsel

or such other address or
individual as may be designated by notice by either party to the other.  Any Communication given by personal delivery
shall be conclusively deemed to have been given on the day of actual delivery
thereof and, if made or given by registered mail, on the third day, other than
a Saturday, Sunday or statutory holiday in Illinois, following the deposit
thereof in the mail.  If the party giving
any Communication knows or ought reasonably to know of any difficulties with
the postal system, which might affect the delivery of mail, any such
Communication shall not be mailed but shall be given by personal delivery.

5.09                        Governing
Law

This
Agreement shall be governed by and construed in accordance with the law of the
State of Illinois, without regard to conflicts of law principles.

5.10                        Copy of
Agreement; Counterparts

The
Key Executive hereby acknowledges receipt of a copy of this Agreement duly
signed by the Employer.  The Agreement
may be executed in one or more counterparts, all of which together shall
constitute but one Agreement.

 17
 

5.11        Independent Legal Advice

The Key Executive hereby
acknowledges that he has had the opportunity to obtain independent legal advice
with respect to the Agreement.

IN WITNESS WHEREOF the
parties have executed this Agreement as of the day and year first above
written.

 

SIGNED, AND DELIVERED BY

Vicki Lee Avril

 

in the presence of:

 

	
  SIGNATURE OF WITNESS

  	
   

  	
  Vicki Lee Avril

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  IPSCO INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  Per:

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
  Per:

  	
   

  	
   

  	 

 

 

 

 18

SCHEDULE “A”

Release and Indemnity

WHEREAS,
my employment with IPSCO Inc. or any subsidiary of it was
terminated within the meaning of an Agreement dated
                          ,
20    ;

WHEREAS,
I have agreed to accept the termination benefits set out in
the Agreement that is attached hereto, less all applicable deductions, and
other good and valuable consideration in full settlement of any and all claims
I may have relating to my employment with IPSCO or its subsidiary or the
termination thereof and the termination of any employment agreement between me
and my employer as a consequence thereof;

NOW,
THEREFORE, WITNESSETH that in consideration of the terms of
settlement outlined above, I hereby release and forever discharge IPSCO Inc.
and any corporations associated therewith or related thereto and their
respective directors, officers, employees and agents (collectively referred to
as the “Releases”) from any and all actions, causes of action, claims and
demands arising from my employment with IPSCO Inc. or any corporations
associated therewith or related thereto or the termination of that employment,
including any claims pursuant to applicable statutes, including any claims for
overtime pay, public holiday pay, vacation pay, termination pay, severance pay
and pay in lieu of reasonable notice and including any and all actions, causes
of action, claims or demands arising under my employment agreement with IPSCO
Inc.

FOR
THE SAID CONSIDERATION, I further agree not to make any claim
or take any proceedings against any other individual, partnership, association,
trust, unincorporated organization or corporation with respect to any matters
which may have arisen between me and the Releases or any one of them for
contribution or indemnity or other relief over; and

FURTHERMORE,
for the aforesaid consideration, I hereby agree to indemnify and save harmless
the Releases from any and all claims or demands under any applicable income
tax, social security or insurance, pension, employment insurance or other
similar statute providing for the remittance of amounts to any governmental
authority from employment compensation, including any regulations made
thereunder and any other statute or regulations, for or in respect of any
failure on the part of the Releases to withhold income tax, social security or
insurance, pension premiums or employment insurance premiums or benefit
overpayments or any other tax, premium, payment or levy from all or any part of
the said 

 1
 

consideration and
any interest or penalties relating thereto and any costs or expenses incurred
in defending such claims or demands; and

I
HEREBY FURTHER DECLARE that I have had the opportunity to
seek independent legal advice with respect to the terms of settlement as well
as this Release and Indemnity and I fully understand them.  I hereby voluntarily accept the said terms
for the purpose of making full and final compromise, adjustment and settlement
of all claims as aforesaid.

NOTWITHSTANDING
THE FOREGOING, this Release and Indemnity shall not apply to
any actions, causes of action, claims or demands which I may have relating to
the failure or the refusal of IPSCO Inc. to comply with the terms of the
Agreement or this Release and Indemnity.

THIS
RELEASE AND INDEMNITY shall be deemed to have been made in
and shall be construed in accordance with the laws of Illinois and the laws of
Canada applicable therein.

THIS
RELEASE AND INDEMNITY shall enure to the benefit of and be
binding upon me and the Releases and our respective heirs, executors,
administrators and legal personal representatives, successors and assigns.

IN WITNESS WHEREOF I
have executed this Release and Indemnity as of the
         day of
                         ,
20   .

SIGNED, AND DELIVERED BY

Vicki Lee Avril

in the presence of:

 

	
  SIGNATURE OF WITNESS

  	
   

  	
  Vicki Lee Avril

  

 

 

 

 2

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