Document:

exv10w8

 

Exhibit 10.8

A. M. Castle & Co.

January 25, 2006

Mr. G. Thomas McKane

1 E. Schiller, No. 14D

Chicago, IL 60610

Dear Tom:

This Letter Agreement confirms the amended terms of your employment with A.M. Castle & Co.
(“Castle”).

As of January 26, 2006, the Castle Board of Directors elected a new President and Chief Executive
Officer. You continued your employment by Castle as Chairman of the Board. Your duties, in
addition to those of Chairman of the Board, will be to participate in the preparation of Castle’s
annual report on Form 10-K, annual report to shareholders and proxy statement and in investor
relations and such other duties as may be assigned by the Board of Directors or requested by the
President and CEO of Castle.

During the period of January 26, 2006 through March 31, 2006, you will continue as a full time
employee and your base salary will remain at the level of $520,000 per annum. Your long-term
incentive, based upon the current grant of 113,700 target performance shares, will be adjusted to
reflect this level for 15/36 of the performance period and will be paid at the end of the
performance period.

After March 31, 2006, your employment duties will be at reasonable times as arranged between you
and the President and CEO of Castle and your base salary will be a the level of $100,000 per annum.
This will continue until your retirement or separation from Castle (expected to be not before the
January 2007 meeting of the Castle Board of Directors). Your long-term incentive will be based
upon a grant of 21,865 target performance shares and adjusted to reflect this level for the portion
of the performance period represented by (i) the number of months employed during the period April
1, 2006 to your final termination date, divided by (ii) 36.

Your annual management incentive opportunity for 2006 will be 62.5% of base salary at target with a
maximum of 125% of base salary, with pro rata adjustments to reflect the two periods of different
base salary as described above. All other benefits which you presently have will continue until
the termination of your employment with Castle.

Upon the termination of your employment with Castle, Castle will transfer to you, at no cost, your
company car and will extend coverage under the medical and dental benefit plans provided by Castle
from time to time for you and your wife, Mary, until each of you reaches the age of 65

3400 No. Wolf Road, Franklin Park, Illinois 60131 (847) 455-7111

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Exhibit
10.8

(coincident with COBRA benefits).If Castle’s plans do not permit such coverage, Castle will
provide you with the economic equivalent

Your existing Employment/Non-Competition Agreement is amended as provided in this Letter Agreement
and otherwise remains in full force and effect.

	 	 	 	 	 	 	 
	 	 	A.M. CASTLE & CO.	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	/s/ John McCartney	 	 
	 

	 	 	 	 
	 	 	By John McCartney, Lead Director	 	 

	 	 	 
	ACCEPTED:
	 	 
	 
	 	 
	/s/ G. Thomas McKane
	 	 
	 	 	 
	G. Thomas McKane
	 	 

77exv10w9

 

Exhibit 10.9

EXECUTIVE SEVERANCE AGREEMENT

     This Agreement is made, effective as of January 26, 2006, by and between A.M. Castle & Co., a
Maryland corporation (“Castle”) and Stephen V. Hooks (“Executive”).

     WHEREAS, Executive is a long-standing and valued employee of Castle and currently serves as
an officer of Castle; and

     WHEREAS, the Board of Directors of Castle recognizes that the efforts and cooperation of Mr.
Hooks will be important for the integration of Castle’s new Chief Executive Officer and has
determined that it is in the best interest of Castle and its stockholders to secure Executive’s
continued services;

     NOW THEREFORE, for and in connection of the premises and the covenants and agreements
herein contained, Castle and Executive hereby agree as follows:

1. Definitions. As used in this Agreement, the following terms have the
respective meanings set forth below:

     (a) “Cause” means any of the following acts by Executive:

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

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

(c) “Good Cause” means:

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

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

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Exhibit 10.9

which is not public knowledge. After termination of Executive’s employment
with Castle, Executive shall not, without the prior written consent of Castle, or as may otherwise
be required by law or legal process, communicate or divulge any such information, knowledge or
data to anyone other than Castle and those designated by it.

3. Payments upon Termination of Employment. If Castle terminates Executive’s employment
during the Effective Term without Cause, or if Executive resigns his employment within thirty (30)
days following the occurrence of a Good Cause, Executive shall be
entitled to ___ (i) a lump sum
payment equal to one (1) times Executive’s base salary, at the annual rate in effect on the date of
termination or resignation, (ii) a Management Incentive Compensation/Bonus, for the year of
termination, based on either the Target Bonus for the year of termination or the actual bonus paid
at the normal payout date, as selected by Executive within seven (7) days of the date of
termination or resignation, paid in all events at the normal payout date, (iii) with respect to any
granted but not awarded Performance Stock or other long term incentive compensation plan, a pro
rata Management Incentive Compensation/Bonus for the year of termination, based on the target award
or the actual award paid at the normal payout date, as selected by Executive within seven (7) days
of the date termination or resignation and paid in all events at the normal payout date, (iv)
continued participation for twelve (12) months in all medical, dental, and hospitalization
insurance coverages in which he and his eligible dependents were participating on the date of
termination or resignation, at Castle’s expense, until the earlier of the end of the 12-month
period following the date of termination or resignation or the date that he commences subsequent
employment; provided, however, that if any of the benefits plans do not permit his continued
participation, Castle shall provide him with the economic equivalent on an after-tax basis, and (v)
use of a Castle owned or leased automobile as set forth in the Castle’s Automobile Policy until the
earlier of the end of the 12-month period following the date of termination or resignation or the
date that he commences subsequent employment.

4. No Mitigation Obligation. In the event of any termination of Executive’s employment
hereunder, Executive shall be under no obligation to seek other employment or otherwise mitigate
the obligations of Castle under this Agreement, and there shall be no offset against amounts due
to Executive under this Agreement for amounts earned by Executive from a third party (other than
as provided in clauses (iv) and (v) above); provided, however, that Castle may offset under this
Agreement any amounts owed by Executive to Castle at the time payment would otherwise be
required under this Agreement.

5. Notice of Termination. Any purported termination of Executive’s employment by Castle or
by Executive (other than by reason of death) shall be effectively communicated to the other party
by written notice identifying the effective date of termination and the reason or cause for
termination.

6. Withholding Taxes. Castle may withhold from all payments to Executive (or his
beneficiary or estate) hereunder, all taxes required to be withheld under applicable law.

7. Term of Agreement. This Agreement shall be effective on the date hereof and shall
terminate on February 1, 2008; provided, however, that Executive’s rights to any payments to
which Executive shall have become entitled prior to such date pursuant to Section 3 shall
continue until satisfied.

8. Scope of the Agreement. Nothing in this Agreement shall be deemed to entitle Executive
to continued employment with Castle or its subsidiaries or to provide to Executive any rights upon
termination of his employment by Castle other than as described in Section 3, including upon
termination as a result of Executive’s death, disability, resignation without Good Reason or
termination for Cause.

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Exhibit 10.9

9. Successors and Assigns. This Agreement shall bind and shall inure to the benefit of
Castle and any and all of its successors and assigns. This Agreement is personal to Executive and
shall not be assignable by Executive. Castle may assign this Agreement to any entity which (i)
purchases all or substantially all of the assets of Castle or (ii) is a direct or indirect
successor (whether by merger, sale of stock or transfer of assets) of Castle. Any such assignment
shall be valid so long as the entity which succeeds to Castle expressly assumes-Castle’s
obligations hereunder and complies with its terms. This Agreement shall inure to the benefit of
and be enforceable by Executive’s personal or legal representatives, executors, administrators,
successors, heirs, distributes, devisees and legatees, if the Executive dies while any amounts
will be payable to Executive hereunder.

Waiver and Release. Payment by Castle to the Executive of severance benefits under Section
3 of this Agreement shall be in lieu of any and all other severance benefits or rights in the case
of termination of employment to which Executive might otherwise be entitled under policies or
practices of Castle or otherwise. In consideration of this Agreement, Executive, on behalf of
himself and his heirs, successors and assigns, forever releases and discharges Castle, its
officers, directors, employees, agents, affiliates and insurers from any and all known or unknown
claims, obligations or liabilities, whether in contract or tort or based on or through any federal,
state or local statute, including but not limited to the Age Discrimination in Employment Act,
relating to or arising out of Executive’s employment with Castle or the termination of that
employment. The foregoing waiver does not apply to any rights or actions under this Agreement.

11. Notice.

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

If to Executive:

Stephen V. Hooks

400 Rollingwood Lane

Joliet, Illinois 60431

If to Castle:

A.M. Castle & Co.

3400 North Wolf Road

Franklin Park, IL 60131

Attn: Corporate Secretary

Or to such other address as either party may have furnished the other in writing in accordance
herewith, except that notices of change of address shall be effective only upon receipt.

12. Arbitration. Any dispute, controversy or claim between Castle and Executive arising
out of or relating to this Agreement or the breach, termination, or invalidity hereof, shall
promptly and expeditiously be submitted to binding arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association in effect at the time of such
arbitration proceeding utilizing a single arbitrator. The arbitration shall apply the substantive
laws of Illinois and be held in Chicago, Illinois. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. Each party shall be
responsible for its own costs and expenses, including, without limitation, attorneys’ fees.
Pending the resolution of any such dispute, controversy or claim, Executive (and his
beneficiaries) shall, except to the extent that the arbitrator otherwise expressly provides,
continue to receive all payments and benefits due under this Agreement or otherwise.

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Exhibit 10.9

13. Resolution of Disputes. Any dispute or controversy arising in connection with this
Agreement shall be settled exclusively by baseball type arbitration in Chicago, Illinois by an
arbitrator effect, judgment may be entered on the arbitrator’s award in any court having
jurisdiction Castle shall bear all costs and expenses arising in connection with any
arbitration proceeding.

14. Governing Law Validity. The interpretation, construction and enforcement and
performance of this Agreement shall be governed and construed and enforced according with the
internal laws of the State of Illinois without regard to the principle of conflict of laws. The
invalidity or unenforceability of any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement which other provisions shall remain in
full force and effect.

15. Amendments. No provision of this Agreement may be modified or waived unless such
modification or waiver is agreed to in writing signed by Executive and any other duly authorized
officer of Castle. Failure to insist upon strict compliance with any of the terms, covenants or
conditions hereof shall not be deemed a waiver of such term, covenant or condition.

     IN WITNESS WHEREOF, Castle has caused this Agreement to be executed by a duly authorized
officer of Castle and Executive has executed this Agreement as of the day and year first above
written.

	 	 	 	 	 	 	 	 	 
	A.M. CASTLE & CO.	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	/s/ G. Thomas McKane
	 	 	 	/s/ Stephen V. Hooks	 	 
	 

	 	 
	 	 	 	 	 	 
	By:

	 	Chairman of the Board of Directors
	 	 	 	Stephen V. Hooks	 	 

81

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