Document:

Waiver Letter

 EXHIBIT 10.3 
 WAIVER LETTER 
 As of April 25, 2006 
 HOOPER HOLMES, INC., as Borrower 
 170 Mount Airy Road 
 Basking Ridge, New Jersey 07920 
 BANK OF AMERICA, N.A., as Documentation Agent and Lender 
 3670 Route 9 South 
 Freehold, New Jersey 07728 
  

	 	RE:	CREDIT FACILITY (THE “FACILITY”) PROVIDED BY WACHOVIA BANK, NATIONAL ASSOCIATION (AS ADMINISTRATIVE AGENT) AND CERTAIN OTHER LENDERS FOR HOOPER HOLMES, INC.

 Ladies and Gentlemen: 
 Reference is made to the Amended and Restated Credit Agreement, dated October 29, 1999, as amended by a certain Amendment Letter Agreement dated as of July 10, 2000, as further amended by a certain Amendment thereto dated as of
May 15, 2001, further amended by a certain Amendment thereto dated as of October 30, 2003, and as further amended by a certain Amendment thereto dated as of even date herewith (said agreement as amended and as further amended from time to
time, the “Credit Agreement”) among Hooper Holmes, Inc. (the “Borrower”), Wachovia Bank, National Association (formerly known as First Union National Bank, the “Agent”), as agent and lender, and
Bank of America, N.A. (formerly known as Fleet National Bank), as documentation agent and lender. Capitalized terms used but not otherwise defined herein shall have the meanings given to such terms in the Credit Agreement. 
 Section 7.03(i) of the Credit Agreement requires the Borrower to deliver its audited financial statements for the fiscal year ended
December 31, 2005 on a before 100 days after said fiscal year end. As of the date hereof, the Borrower has not delivered said financial statements. Therefore, the Borrower is not in compliance with said reporting requirement. 

 April 25, 2006 
 Hooper
Holmes, Inc. 
 Section 8.14 of the Credit Agreement provides that the Borrower will not suffer a Consolidated Net Loss in any two
(2) fiscal quarters occurring in any period of twelve (12) consecutive months. The Borrower has informed the Agent that the Borrower has suffered a Consolidated Net Loss as of the quarters ended September 30, 2005 and
December 31, 2005. Therefore, the Borrower is not in compliance with said covenant. 
 Section 8.15 of the Credit Agreement
provides that the Borrower will not permit the Consolidated Fixed Charge Coverage Ratio to be less than 1.50 to 1.00 for the Test Period ended December 31, 2005. The Borrower has informed the Agent that the Borrower had a Consolidated Fixed
Charge Coverage Ratio of 1.10 to 1.00 for the Test Period ended December 31, 2005. Therefore, the Borrower is not in compliance with the said covenant. 
 The Borrower has requested that the Lenders waiver the aforementioned issues of non-compliance (hereafter the “Specified Violations”) for the waiver period ending December 31, 2005 (the
“Waiver Period”). 
 To induce the Lenders to grant said waiver, by their signatures below, the Borrower hereby represents
and warrants as of the date hereof as follows: 
  

	 	(i)	other than with respect to the Specified Violations, there does not exist any Default or Event of Default; 

  

	 	(ii)	the Borrower is in compliance with all other terms and conditions of the Credit Agreement and other Credit Documents; and 

  

	 	(iii)	other than as previously disclosed in writing to the Lenders, there has not occurred any event or circumstance that could reasonably be expected to have a material adverse effect on
the Borrower since the date of the Credit Agreement. 

 Based on the foregoing, and subject to the conditions set forth below,
the Lenders hereby waive the Borrower’s failure to comply with the Specified Violations for the Waiver Period. Said waiver shall pertain solely to the specific instance of non-compliance mentioned above and solely for the Waiver Period.

 As a further inducement to the Lenders to grant the waiver set forth herein, by its signatures below, the Borrower ratifies and confirms
all other terms and conditions of the Credit Agreement and other Credit Documents in all respects. The Lenders expressly reserve all of their other rights and remedies under the Credit Documents with respect to all other issues of non-compliance
with the Credit Agreement. 
 The granting by the Lenders of the waiver set forth herein shall in no way alter the existing obligations of
the Borrower under the Credit Agreement or any other Credit Document, other than as specifically contemplated herein. Under no circumstances shall said waiver be interpreted or construed as establishing a custom or course of dealings between the
Borrower and the Lenders with respect to any instance of non-compliance with the terms of the Credit 

  

 2 

 April 25, 2006 
 Hooper Holmes, Inc. 
  

 
Agreement that might arise in the future. Each Lender reserves its right to respond to such instances of non-compliance in any manner that it deems necessary
or appropriate under those specific circumstances. 
 This waiver shall not be effective unless and until (i) the Agent has received
this letter fully executed and validly delivered by all parties hereto, and (ii) the Agent is satisfied that all conditions precedent set forth in that certain Amendment (Third) to the Credit Agreement dated as of even date herewith have been
satisfied, at which time the waiver contemplated herein shall be deemed effective with no other action required of any party to the Credit Agreement in connection therewith. 
 This waiver may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto are on the
same instrument. This waiver shall be construed in accordance with the substantive laws of the State of New Jersey without reference to any conflicts of law principles. 
  

					
	 Very truly yours,
  
 WACHOVIA BANK, NATIONAL ASSOCIATION, as Agent and a Lender

		
	By:	 	/s/ James P. Petronchak
		 	Name:	 	James P. Petronchak
		 	Title:	 	SVP

  

					
	 ACCEPTED AND AGREED AS OF THE DATE FIRST WRITTEN ABOVE
  
 OTHER LENDER:
  
 BANK OF AMERICA, N.A., as Documentation Agent and a Lender

		
	By:	 	/s/ Laura H. McAulay
		 	Name:	 	Laura H. McAulay
		 	Title:	 	Senior Vice President
	
	 BORROWER:
  
 HOOPER HOLMES, INC.

		
	By:	 	/s/ Joseph A. Marone
		 	Name:	 	Joseph A. Marone
		 	Title:	 	V.P. & Acting CFO

  

 3 

 April 25, 2006 
 Hooper Holmes, Inc. 
  

					
	 GUARANTORS:
  
 HOOPER INFORMATION SERVICES, INC.

		
	By:	 	/s/ Joseph A. Marone
		 	Name:	 	Joseph A. Marone
		 	Title:	 	VP & Acting CFO
	
	 HOOPER EVALUATIONS, INC.
     (d/b/a D&D Associates, Allegiance Health,
     Michigan Evaluation Group and
Medimax)

		
	By:	 	/s/ Joseph A. Marone
		 	Name:	 	Joseph A. Marone
		 	Title:	 	VP & Acting CFO
	
	HERITAGE LABS INTERNATIONAL LLC
		
	By:	 	/s/ Joseph A. Marone
		 	Name:	 	Joseph A. Marone
		 	Title:	 	VP & Acting CFO
	
	HOOPER DISTRIBUTION SERVICES, LLC.
		
	By:	 	/s/ Joseph A. Marone
		 	Name:	 	Joseph A. Marone
		 	Title:	 	VP & Acting CFO
	
	MID-AMERICA AGENCY SERVICES, INC.
		
	By:	 	/s/ Joseph A. Marone
		 	Name:	 	Joseph A. Marone
		 	Title:	 	VP & Acting CFO
	
	TEG ENTERPRISES, INC.
		
	By:	 	/s/ Joseph A. Marone
		 	Name:	 	Joseph A. Marone
		 	Title:	 	VP & Acting CFO

  

 4EXHIBIT 10.1

OREGON STEEL MILLS

February 16, 2006

Executive Officer

Oregon Steel Mills, Inc. (which, together with its Subsidiaries, is referred to as the “Company”) considers the stability of its key management group to be essential to the best interests of the Company and its stockholders.  The Company recognizes that, as is the case with many publicly held corporations, the possibility of a Change in Control may arise and that the attendant uncertainty may result in the departure or distraction of key management personnel to the detriment of the Company and its stockholders.

Accordingly, the Board of Directors of Oregon Steel Mills, Inc. (the “Board”) has determined that appropriate steps should be taken to encourage members of the Company’s key management group to continue as employees notwithstanding the future possibility of a Change in Control of the Company.

The Board also believes it important that, in the event of a proposal for transfer of control of the Company, you be able to assess the proposal and advise the Board without being influenced by the uncertainties of your own situation.

In order to induce you to remain in the employ of the Company, this Agreement, which has been approved and authorized by the Board, sets forth the severance compensation which the Company agrees to pay to you in the event your employment with the Company is terminated subsequent to the occurrence of a Change in Control of the Company under the circumstances described below.  This Agreement also supercedes any such agreement you may currently have in place.

Capitalized terms not otherwise defined in this Agreement have the meanings set forth in Section 13.

	
  1
  	
  
Agreement   to Provide Services; Right to Terminate.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
(a)
  	
  
Termination   of Employment.    Except as otherwise provided in paragraph 1(b) of this Agreement or in   any written employment agreement between you and the Company, you are an “at   will” employee and the Company or you may terminate your employment at any   time.  If, and only if, your   employment terminates after a Change in Control of the Company, the   provisions of this Agreement regarding the payment of severance compensation   and benefits will apply.  In all other   events, this Agreement does not provide any additional severance compensation   or benefits to you.
  

	
  
 
  	
  
(b)
  	
  
Continuation   of Services Subsequent to Certain Offers.  In the event a tender offer or exchange   offer is made by a Person for more than twenty-five percent (25%) of the   Company’s Voting Securities, you agree that you will not leave the employ of   the Company (other than as a result of disability) and will render services   to the Company in the capacity in which you then serve until such tender   offer or exchange offer has been abandoned or terminated or a Change in   Control has occurred.  If, during the   period you are obligated to continue in the employ of the Company pursuant to   this Section 1(b), the Company reduces your compensation to less than 90% of   your then-current compensation, your obligations under this Section 1(b) will   automatically terminate.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(c)
  	
  
Obligations   After Change in Control.    While employed by the Company (or its successor) after a Change in   Control, you agree to devote reasonable attention and time to the business   and affairs of the Company and to use your reasonable best efforts to perform   your responsibilities faithfully and efficiently, consistent with your past   practice as an employee of the Company.
  
	
  
 
  	
  
 
  
	
  
2
  	
  
Term   of Agreement.  This   Agreement commences on the date of this Agreement and will continue in effect   until January 1, 2007; provided, however, that commencing on January 1, 2007,   and each January 1 thereafter, the term of this Agreement will automatically   be extended for one additional year unless at least 60 days prior to such   January 1, the Company or you will have given notice that this Agreement will   not be extended; and provided, further, that if a Change in Control of the   Company occurs while this Agreement is in effect, this Agreement will   automatically be extended for a period of three calendar years beyond the   calendar year in which the Change in Control occurs.  Notwithstanding the preceding sentence,   this Agreement will not extend beyond your normal retirement date under the   Company’s retirement plan.  This   Agreement will terminate if you or the Company terminates your employment   prior to a Change
in Control but such termination will be without prejudice   to any remedy the Company may have for breach of your obligations, if any,   under Section 1(b).
  
	
   
  	
  
 
  
	
  
3
  	
  
Effect   of Termination Following Change in Control.  In the event your employment with the   Company is terminated, whether by you or the Company, within three years   following the date of occurrence of any event constituting a Change in   Control (recognizing that more than one such event may occur in which case   the three-year period will run from the date of occurrence of each such   event), you will be eligible to receive the following respective benefits:
  

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(a)
  	
  
Termination   for Cause or Without Good Reason.  If your employment is terminated by the Company for Cause, or   by you other than for Good Reason, the Company will pay you your Base Salary   through the Date of Termination at the rate in effect on the Date of   Termination, together with all benefits to which you are then entitled under   Plans in which you are a participant, and the Company will have no further   obligations to you under this Agreement.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(b)
  	
  
Termination   With Good Reason or Other Than for Cause.    If your employment with the Company is terminated   (other than for disability or upon your death) by you for Good Reason by you   giving two (2) weeks prior written notice specifying the “Good Reason” or by   the Company other than for cause, then the Company will pay to you the   following amounts (the “Severance Payments”), less applicable withholding:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(i)
  	
  
Your Base Salary through the Date of Termination at   the rate in effect on the Date of Termination and a buyout of all unused and   accrued vacation.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(ii)
  	
  
In lieu of any further salary payments to you for   the periods subsequent to the Date of Termination, an amount of severance pay   equal, at the time specified in Section 8, to the following amounts:
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
(1)
  	
  
A lump sum severance payment equal to three (3)   times the combined total of your Base Salary plus your Average Last Three   Year’s Bonuses Received under the Annual Incentive Plan , both as in effect   at the Date of Termination or immediately prior to the Change in Control,   whichever is greater; and,
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
 
  	
  
(2)
  	
  
An additional amount equal to the lump sum present   actuarial value of the excess, if any, of (x) over (y) where:
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
 
  	
  
 
  	
  
(x) is the normal retirement allowance to which you   would have been entitled under the Company’s Pension Plan and SERP assuming   that you continued as an active participant fully vested under such plans,   without change in your Base Salary, until the earlier of your 65th   birthday or the 10th anniversary of the date of Change of Control;   and
  

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(y) is the normal retirement allowance to which you   are actually entitled under the Company’s Pension Plan as of the date a   Notice of Termination.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
 
  	
  
Present actuarial value shall be computed using the   current PBGC interest rate that applies to involuntary and/or distress   terminations for single employer plans and the applicable 1994 Group Annuity   Mortality Table set back two (2) years and shall reflect the value of any   applicable early retirement subsidies under the Company’s Pension Plan.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(iii)
  	
  
Your group insurance benefits (health, dental,   vision & life) substantially similar to those which you and your eligible   dependents were receiving immediately prior to a Notice of Termination at the   same cost to you as the Company charges other employees, for three   years.  Benefits otherwise receivable   by you pursuant to this subparagraph shall be reduced to the extent similar   benefits are actually received by you from any other source, and any such   similar benefits shall be reported to the Company.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  The amount of Severance Payments otherwise payable pursuant to this Agreement will be reduced by (A) amounts payable to you pursuant to any other Plan or agreement providing severance benefits to you or to the Company’s salaried employees generally and (B) amounts payable to you (after any adjustment or reduction to reflect payments described in clause (A)) as salary continuation and incentive compensation pursuant to any employment agreement between you and the Company that is in effect as of the Date of Termination.
  
	
  
 
  
	
  
 
  	
  
(c)
  	
  
Release   of Claims.  Your   receipt of Severance Payments is conditioned upon your execution and   nonrevocation of a release of claims in a form to be provided by the Company.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
4
  	
  
Additional   Payment.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
(a)
  	
  
Gross-Up.  In the event any portion   of the Total Payments will be subject to the Excise Tax, the Company will pay   you an additional amount (the “Gross-Up Payment”) equal to (1) the Excise Tax   imposed on you with respect to the portion of the Total Payments that   constitutes an “excess parachute payment” (as that term is described in   Section 280G(b)(1) of the Code), plus (2) all federal, state, and local   income taxes and Excise Tax imposed on you with respect to the Gross-Up   Payment.
  

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(b)
  	
  
Determining   Amount of Excise Tax.  For   purposes of determining whether any portion of the Total Payments will be   subject to the Excise Tax and the amount of any Excise Tax:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(i)
  	
  
The entire amount of the Total Payments will be   treated as an Excess Parachute Payment unless and to the extent, in the   written opinion of Outside Tax Counsel, the Total Payments, in whole or in   part, are not subject to the Excise Tax;
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
(ii)
  	
  
The value of any non-cash benefits or any deferred   payments that are part of the Total Payments will be determined by the   Company’s independent accountants in accordance with the requirements of   Sections 280G(d)(3) and 280G(d)(4) of the Code and any regulations   promulgated under those sections.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(c)
  	
  
Determining   Amount of Gross-Up Payment.  For purposes of determining the amount of the Gross-Up Payment:
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(i)
  	
  
You will be deemed to pay federal income taxes at   the highest marginal rate of federal income taxation applicable to   individuals (including any applicable surtaxes and taking into account any   applicable loss or reduction of deductions or exemptions) for the calendar   year in which the Gross-Up Payment is to be made; and
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(ii)
  	
  
You will be deemed to pay state and local income   taxes at the highest marginal rates of taxation applicable to individuals   (including any applicable surtaxes and taking into account any applicable   loss or reduction of deductions or exemptions) in the state and locality of   your residence at the date the Gross-Up Payment will be made.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(d)
  	
  
Subsequent   Adjustment – Repayment.  In   the event that the amount of Excise Tax you are required to pay is   subsequently determined to be less than the amount taken into account under   this Agreement, you agree that promptly after the amount of such reduction in   Excise Tax is finally determined, you will repay to the Company, at 6%   interest from the date of the Gross-Up Payment, the amount of such reduction,   plus the net federal income tax benefit, if any, you actually will receive   (in the opinion of Outside Tax Counsel) as a result of making the repayment   described in this Section 4(d).
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(e)
  	
  
Subsequent   Adjustment – Additional Payment.  In   the
event that the amount of Excise Tax you are required to pay is subsequently
determined to exceed the amount taken into account under this Agreement, the

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    Company will make an additional Gross-Up Payment in the manner set forth in this Section 4 in respect of such additional Excise Tax, plus any interest, additions to tax, or penalties payable by you with respect to the additional Excise Tax, promptly after the time that the amount can be reasonably determined.

	
  
5
  	
  
Setoff.  To the extent   permissible under applicable law, without prejudice to other remedies, the   Company may offset any amounts you owe the Company against any amounts due   upon termination or thereafter.
  
	
  
 
  	
  
 
  
	
  
6
  	
  
Notice.  For the purposes of this   Agreement, notices and all other communications provided for in the Agreement   must be in writing and will be deemed to have been duly given when delivered   or mailed by United States certified or registered mail, return receipt   requested, postage prepaid, if to the Company, addressed to it at Oregon   Steel Mills, Inc., 1000 SW Broadway #2200, Portland OR 97205, Attention:   Chairman of the Board of Directors, and if to you, addressed to you at the   address set forth on the first page of this Agreement, or to such other   address as either party may have furnished to the other in writing in   accordance with this Agreement, except that notices of change of address will   be effective only upon receipt.
  
	
   
  	
  
 
  
	
  
7
  	
  
Successors;   Binding   Agreement.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
(a)
  	
  
Successors   and Assigns.  This   Agreement will inure to the benefit of, and be binding upon, any corporate or   other successor or assignee of the Company which acquires, directly or   indirectly, by merger, consolidation or purchase, or otherwise, all or   substantially all of the business or assets of the Company.  The Company agrees to require any such   successor, by an agreement in form and substance reasonably satisfactory to   you, expressly to assume and agree to perform this Agreement in the same   manner and to the same extent as the Company would be required to perform if   no such succession had taken place.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(b)
  	
  
Personal   Representatives.  This   Agreement will inure to the benefit of and be enforceable by your personal or   legal representatives, executors, administrators, successors, heirs,   distributees, devisees, and legatees and any amounts payable to you in   accordance with the terms of this Agreement after your death will be paid to   your estate.
  
	
   
  	
  
 
  	
  
 
  
	
  
8
  	
  

Time of Payment; Estimated Payment.  Prior to the effective date of any
Change in Control, the Company will post a letter of credit for your benefit
equal to the amount of the Severance Payments that would be due you under the
terms of this agreement. The Severance Payments and any applicable Gross-Up
Payment provided for in this Agreement will be made to 
 

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you not later than the 15th business day   following the Date of Termination; provided, however, that if the amounts of   such payments cannot be finally determined on or before such day, the Company   will pay to you on such day an estimate, as determined in good faith by the   Company, of the minimum amount of such payments, and will pay the remainder   of such payments as soon as the amount of such payments can be determined.  In the event that the amount of the   estimated payments exceeds the amount subsequently determined to have been   due, such excess will be repaid by you to the Company, payable on the fifth   day after demand by the Company (together with interest at the rate of 6   percent per annum).  If the Company   fails to timely deliver your Severance Payments under the terms of this   agreement, you may exercise the letter of credit.
  
	
   
  	
  
 
  
	
  
9
  	
  
Miscellaneous.  No provision of this   Agreement may be modified, waived, or discharged unless such modification,   waiver, or discharge is specifically approved by the Board and agreed to in a   writing signed by you and the Chairman of the Board of Directors of the   Company.  No waiver by either party to   this Agreement at any time of any breach by the other party of, or of   compliance with, any condition or provision of this Agreement to be performed   by such other party will be deemed a waiver of similar or dissimilar   provisions or conditions at the same, or at any prior or subsequent, time.  No agreements or representations, oral or   otherwise, expressed or implied, with respect to the subject matter of this   Agreement have been made by either party which are not expressly set forth in   this Agreement.  The validity,   interpretation, construction, and performance of this Agreement will be   governed by the laws of the
State of Oregon.    All obligations of the Company to make payments or to provide benefits   will be subject to all applicable payroll taxes, withholding and reporting   requirements.
  
	
  
 
  	
  
 
  
	
  
10
  	
  
Legal   Fees and Expenses.  The   Company will pay or reimburse any reasonable legal fees and expenses you may   incur in connection with any legal advice or legal action to enforce your   rights under, or to defend the validity of, this Agreement (including all   such fees and expenses, if any, incurred in contesting or disputing your   termination or in seeking to obtain or enforce any right or benefit under   this Agreement).  The Company will pay   or reimburse such reasonable legal fees and expenses within 15 days of   presentation by you of a statement or statements prepared by your counsel in   accordance with its usual practices (there shall be no requirement to provide   a description of services provided by your counsel).  At your request, the Company will pay the   reasonable legal fees and expenses directly to your counsel.
  

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11
  	
  
Validity.  The invalidity or unenforceability of any   provision of this Agreement will not affect the validity or enforceability of   any other provision of this Agreement, which will remain in full force and   effect.
  
	
  
 
  	
  
 
  
	
  
12
  	
  
Dispute   Resolution.  You and   the Company agree that any dispute concerning the interpretation or   construction of this Agreement or otherwise related to this Agreement will be   resolved by confidential mediation or binding arbitration.  The parties will first attempt mediation   with a neutral mediator agreed upon by the parties.  If mediation is unsuccessful or if the parties are unable to   agree upon a mediator, the dispute will be submitted to arbitration pursuant   to the procedures of the American Arbitration Association (“AAA”) or other   procedures agreed to by the parties.    All arbitration proceedings will be conducted by a neutral arbitrator   mutually agreed upon by the parties.    The decision of the arbitrator will be final and binding on all   parties.  The costs of mediation and   arbitration will be borne by the Company as provided in Section 10 of this   Agreement.
  
	
  
 
  	
  
 
  
	
  13
  	
  
Definitions   of Certain Terms.    For the purposes of this Agreement, the terms defined below and used   in this Agreement will have the following meanings:
  
	
  
 
  	
  
 
  
	
  
 
  	
  
(a)
  	
  
Base   Salary and Average Last Three Year’s Bonuses Received under the Annual   Incentive Plan.    “Base Salary” means your annual salary which is payable in equal   periodic installments according to the Company’s customary payroll practices.  “Average Last Three Year’s   Bonuses Received under the Annual Incentive Plan” means the average of the   percentages of actual payouts for the three years prior to the Change in   Control as a percentage of your eligible Base Salary received in the year for   which each bonus was calculated, as defined under the Annual Incentive Plan,   multiplied by your Base Salary in effect at the time of the Change in   Control.  For any year in the last three   years that you were not a participant of the Annual Incentive Plan, your   Target Bonus under the Annual Incentive Plan in effect prior to the Change in   Control is substituted for the percentage of actual
payout for the   nonparticipating year in calculating the Average Last Three Year’s Bonus   Received under the Annual Incentive Plan.    “Target Bonus under the Annual Incentive Plan” means the percentage of   Base Salary set forth for you in the Annual Incentive Plan for target   performance, for the applicable year, whether or not such amount is earned or   vested.
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
(b)
  	
  
Cause.  Termination of your   employment by the Company for “Cause” means any act or omission that is: a   breach of your obligations to the Company, including but not limited to   substantial absence without cause, serious breach of confidence, criminal   offenses committed at the place of work or outside of it, personal   dishonesty, incompetence, willful
  

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misconduct, breach of fiduciary duty involving   personal profit, intentional failure to perform stated duties, willful   violation of any law, rule, or regulation (other than traffic violations or   similar offenses).  OSM may terminate   this Agreement effective as of the date a written Notice of Termination is   given specifying the cause.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(c)
  	
  
Change   in Control.  A   “Change in Control” of the Company means:
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(i)
  	
  
Any time less than a majority of the directors of   the Company are individuals who were either elected by the Board or nominated   by the Board of (or a committee of the Board) for election by the   stockholders of the Company.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(ii)
  	
  
At any time a majority of the Board are individuals   who, in connection with a single transaction or a series of related   transactions that effects a change in the ownership of the Company, were   either not elected by the Board or not nominated by the Board (or a committee   of the Board) for election by the stockholders of the Company;
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
(iii)
  	
  
Any person (other than (a) an employee benefit plan   of the Company, or (b) a corporation owned directly or indirectly, by the   stockholders of the Company in substantially the same proportions as their   ownership of stock of the Company) is or becomes the beneficial owner (as   defined in Rule 13d of the Securities Exchange Act of 1934, as amended),   directly or indirectly, of securities of the Company representing twenty-five   percent (25%) or more of the combined voting power of the Company’s then   outstanding securities; or
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(iv)
  	
  
The stockholders of the Company approve (a) a plan   of complete liquidation of the Company, other than in connection with the   complete cessation of the business activities conducted with the Company’s   operating assets, or (b) an agreement is entered for the sale or disposition   by the Company of all or substantially all of the Company’s assets except   pursuant to an order of a bankruptcy court having jurisdiction of the   Company.  For purposes of clause (b),   the term “the sale or disposition by the Company of all or substantially all   of the Company’s assets” shall mean a sale or other disposition transaction   or series of related transactions involving assets of the Company or of any   direct or indirect subsidiary of the Company (including the stock of any   direct or indirect subsidiary of the Company) in which the value of the   assets or stock being sold or otherwise disposed of (as measured by the   purchase price
being
  

9

	
  
 
  	
  
 
  	
  
 
  	
  
paid therefore or by such other method as the Board   determines is appropriate in a case where there is no readily ascertainable   purchase price) constitutes more than two-thirds (2/3) of the fair market   value of the Company (as hereinafter defined).  For purposes of the preceding sentence, the “fair market value   of the Company” shall be the aggregate market value of the Company’s   outstanding common stock (on a fully diluted basis) plus the aggregate market   value of the Company’s other outstanding equity securities, if any.  The aggregate market value of the   Company’s common stock shall be determined by multiplying the number of   shares of the Company’s common stock (on a fully diluted basis) outstanding   on the date of the execution and delivery of a definitive agreement with   respect to the transaction or series of related transactions (the “Transaction   Date”) by the average closing price
of the Company’s common stock   for the ten (10) trading days immediately preceding the Transaction   Date.  The aggregate market value of   any other equity securities of the Company shall be determined in a manner   similar to that prescribed in the immediately preceding sentence for   determining the aggregate market value of the Company’s common stock or by   such other method as the Board shall determine is appropriate; provided that,   in the event that on the Transaction Date there is no public market for such   common stock or other equity security, the fair market value of the equity   securities or common stock shall be as reasonably determined by the Board.
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	  
	  
	 A Change in Control “occurs” on the date the Change in Control first occurs; provided, however, that if (A) your employment is terminated by the Company after an offer described in the first sentence of Section 1(b) of this Agreement is made, (B) it is reasonably demonstrated that your termination was at the request of a third party who is seeking to effect a Change in Control or otherwise occurred as a result of an anticipated Change in Control, and (C) a Change in Control in fact occurs within 120 days after your termination, then for purposes of determining your right to any severance compensation and benefits under this Agreement, your termination shall be deemed to have occurred after a Change in Control.

	
  
 
  	
  
 
  
	
  
 
  	
  
(d)
  	
  
Code.  “Code” means the Internal Revenue Code of   1986, as amended, or corresponding provisions of subsequent superseding   federal revenue laws.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(e)
  	
  
Date   of Termination.  “Date   of Termination” means the date on which a Notice of Termination sets forth as   the Date of Termination.
  

10

	
  
 
  	
  
(f)
  	
  
Excise   Tax.  “Excise Tax”   means a tax imposed by Section 4999(a) of the Code, or any successor   provision, with respect to “excess parachute payments” as described in   Section 280(G)(b) of the Code.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(g)
  	
  
Good   Reason.  Termination   by you of your employment for “Good Reason” means termination based on any of   the following, without your express written consent, unless, such   circumstances are fully corrected prior to the Date of Termination specified   in the Notice of Termination given in respect thereof:
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
(i)
  	
  
a significant reduction by the Company in the duties   and responsibilities assigned to you from those assigned immediately before   the Change in Control;
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(ii)
  	
  
the unlawful harassment by the Company or the owners   thereof of you so as to adversely affect the performance of your assigned   duties and responsibilities;
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(iii)
  	
  
a reduction by the Company of 10% or more in your   annual base pay as in effect on the date the Change in Control occurs;
  
	
   
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(iv)
  	
  
a geographical relocation of you is ordered by the   Company or its successor to an area other than a 50 mile radius of your   office location immediately before the Change in Control;
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
 
  	
  
(v)
  	
  
the failure by the Company to pay any portion of   your current compensation or to pay you any portion of an installment of   deferred compensation under any deferred compensation agreement of the   Company within seven (7) days of the date of such compensation is due; or
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
 
  	
  
(vii)
  	
  
the failure by the Company to obtain from any   successor the assent to this Agreement contemplated by Section 7(a) of   this Agreement.
  
	
  
 
  	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(h)
  	
  
Gross-Up   Payment.  “Gross-Up   Payment” means a payment described in Section 4 of this Agreement with   respect to an Excise Tax.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(i)
  	
  
Notice   of Termination.  “Notice   of Termination” means a written notice communicated by the Company to you or   by you to the Company of termination of your employment with the   Company.  For purposes of this   Agreement, Notice of Termination of your employment given by the Company must   indicate the specific termination provision in this Agreement relied upon,   and must set forth in reasonable detail the facts and circumstances claimed   to provide a basis for termination of your employment under the provision so   indicated.
  

11

	
  
 
  	
  
(j)
  	
  
Outside   Tax Counsel.    “Outside Tax Counsel” means Schwabe, Williamson & Wyatt, P.C., or   in the event such counsel are unavailable by reason of conflict or for any   other reason, another law firm in Portland, Oregon, selected by you that is   reasonably satisfactory to the Company.    The Company will not unreasonably withhold its approval of counsel   selected by you as Outside Tax Counsel.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(k)
  	
  
Person.  “Person” means and includes any   individual, corporation, limited liability company, partnership, trust,   group, association, or other “person,” as such term is used in Section   13(d)(3) or 14(d) of the Securities Exchange Act of 1934, as amended.
  
	
  
 
  	
  
 
  	
  
 
  
	
   
  	
  
(l)
  	
  
Plan.  “Plan” means any compensation plan such as   a plan, program, policy, or arrangement providing for incentive or deferred   compensation, stock options, other stock or stock-related grants or awards   severance or separation benefit, any employee benefit plan such as a thrift,   investment, savings, pension, supplemental retirement plan, profit sharing,   401(k), medical, disability, long-term care, accident, life insurance,   cafeteria, or relocation plan or any other plan, program, policy, or   arrangement of the Company providing similar types of benefits to employees   of the Company.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(m)
  	
  
Severance   Payments.  “Severance   Payments” means the payments to be paid to you as described in Section 3(b)   of this Agreement.  All severance and   other payments made by the Company to you are subject to applicable tax   withholding.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
 
  	
  
(n)
  	
  
Subsidiary.  “Subsidiary” means an entity of which more   than 50 percent of the outstanding voting stock is owned, directly or   indirectly, by the Company, by one or more other Subsidiaries, or by the   Company and one or more other Subsidiaries.    For the purposes of this definition, “voting stock” means stock which   ordinarily has voting power for the election of directors or managers,   whether at all times or only so long as no senior class of stock has such   voting power by reason of any contingency.
  
	
   
  	
  
 
  	
  
 
  
	
  
 
  	
  
(o)
  	
  
Total   Payments.  “Total   Payments” means all payments or benefits payable to you in connection with a   Change in Control of the Company, including Severance Payments under this   Agreement and Other Payments.
  

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(p)
  	
  
Voting   Securities.  “Voting   Securities” means all issued and outstanding securities ordinarily having the   right to vote at elections of the Company’s directors, including without   limitation the Company shares.
  
	
  
 
  	
  
 
  	
  
 
  
	
  
If you accept and agree to the terms of this   Agreement, kindly sign and return to the Company the enclosed copy of this   Agreement, which will then constitute our agreement on this subject.
  

	
  
 
  	
  
Sincerely,
  
	
  
 
  	
  
OREGON   STEEL MILLS, INC.
  
	
  
 
  	
  
 
  
	
  
 
  	
  
 
  
	
  
 
  	
  
/s/ Carl W. Neun
  
	  
	
   

   
	
  
 
  	
  
Chairman of the Board of Directors
  
	
  
Agreed to February 16, 2006
  	
  
 
  
	
  
 
  	
  
 
  
	
  
Executive Officer
  	
  
 
  

13

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