Document:

Retention Bonus

  
 EXHIBIT 10.39

  
 December 17, 2004 
  
 Mr. Maurice S. Nelson, Jr. 
 President and Chief Executive Officer 
 Earle M. Jorgensen Company 
 10650 Alameda Street 
 Lynwood, California 90262 
  

	Re:	Retention Bonus; Transfer Restrictions 

  
 Dear Mr. Nelson: 
  
 The purpose of this letter is to (i) confirm the terms of the bonus which is being offered to you by Earle M. Jorgensen Company (“EMJ”)
in order to induce you to remain as President and Chief Executive Officer of EMJ following the anticipated initial public offering of shares of common stock of EMJ (the “IPO”), and (ii) set forth certain restrictions with respect to
the transfer of shares of common stock of EMJ beneficially owned by you and certain similar transactions. 
  
 1. Retention Bonus. (a) Conditioned upon the consummation of the IPO, you will be paid the sum of $3,000,000 (the “Retention
Bonus”) on March 31, 2007, subject to the condition that you have served as the President and Chief Executive Officer of EMJ for at least the consecutive two year period immediately following consummation of the IPO. 
  
 Except as described below, if this condition is not satisfied, you will not be entitled to
any portion of the Retention Bonus. However, if your employment with EMJ terminates due to (i) your death, (ii) the Board of Directors of EMJ having made a good faith determination that you have become Permanently Disabled (as defined below), (iii)
your employment having been terminated by the Company for a reason other than Cause (as defined below), or (iv) you having resigned your employment with EMJ for Good Reason (as defined below), the Retention Bonus will be paid to you (or your
beneficiary or estate representative, if applicable) within thirty (30) days after the termination of your employment, or, if later, the earliest date permitted under Section 409A of the Internal Revenue Code of 1986, as amended. 
  
 (b) As used in this Agreement: 
  
 (i) “Cause” shall mean (i) willful
malfeasance or willful misconduct by you in connection with your employment with EMJ, (ii) your continued failure or refusal to perform your duties or comply with any lawful direction of the Board of Directors of EMJ, after written notice of any
such failure or refusal was given to you, (iii) any act of personal dishonesty by you in connection with your work which has or could reasonably be expected to have a material adverse effect on EMJ or any of its affiliates, (iv) your gross
negligence in performing any of your 

  

 
duties in a manner which has or could reasonably be expected to have a material adverse affect on EMJ or any of its affiliates, (v) your commission of any
crime which involves fraud, dishonesty or moral turpitude, (vi) your willful breach of any written policy adopted by EMJ concerning conflicts of interest, standards of business conduct, fair employment practices, or any other similar matters, or
(vii) your material breach of this letter agreement. 
  
 (ii) “Good Reason” shall mean (i) a material and ongoing diminution in your title, duties or responsibilities, excluding for this purpose an isolated, insubstantial or inadvertent action not taken in bad faith, or (ii) a
material reduction in your base salary or benefits, unless similarly situated employees also suffer a concurrent and comparable reduction in their salary or benefits. 
  
 (iii) “Permanently Disabled” shall mean, with respect to you, if for a period of ninety
(90) consecutive days or one hundred and twenty (120) days during any one year period, as a result of a physical or mental incapacity, you are incapable, after reasonable accommodation, of performing your duties under this Agreement on a permanent
full time basis; provided, however, that EMJ will not exercise its right to terminate your employment as a result of your being Permanently Disabled until six months from the date of commencement of such physical or mental disability. In the event
of a dispute as to whether you are Permanently Disabled, EMJ may refer the matter to a mutually acceptable licensed practising physician, and you agree to submit to such tests and examination as such physician shall deem appropriate. 
  
 2. Transfer Restrictions. 
  
 (a) In addition to the restrictions set forth in any
applicable lock-up agreement to which you are a party or any other restrictions required by law, including Rules 144 and 145 promulgated under the Securities Act of 1933, as amended, effective as of closing of the merger and financing restructuring
and the IPO, you agree for a period of two years after the date of closing of the IPO not to (i) offer, sell, contract to sell, pledge, or otherwise dispose of, directly or indirectly, any shares of common stock of EMJ beneficially owned by you (the
“Securities”) or any securities convertible into or exchangeable or exercisable for any Securities, enter into a transaction which would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in
whole or in part, any of the economic consequences of ownership of the Securities, whether any such aforementioned transaction is to be settled by delivery of the Securities or such other securities, in cash or otherwise, or (ii) publicly disclose
the intention to make any such offer, sale, pledge or disposition or to enter into any such transaction, swap or other arrangement. Any Securities received upon the exercise of options granted to you will also be subject to this letter agreement.

  
 (b) The foregoing restrictions will not
prohibit you from transferring the Securities to any trust, corporation, limited liability company or limited partnership in connection with any bona fide estate planning transaction, provided that any Securities transferred in such a transaction
shall remain subject to such restrictions as though the transfer had not taken place, and you and any such transferee shall be liable to EMJ for any loss, damages or claims arising 

  

 - 2 - 

 
from a breach of such restrictions. In the event that you acquire additional Securities while the restrictions are in effect, other than in open market
transactions, such Securities shall be subject to such restrictions. The foregoing restrictions shall not be affected by your employment status with EMJ and shall apply notwithstanding any termination of employment. 
  
 (c) The provisions of this Paragraph 2 shall lapse and
become null and void on March 31, 2005 if the IPO shall not have closed on or prior to such date. 
  
 3. Extension of Exercise Period of Stock Options. In consideration of the transfer restrictions described above, the exercise period of the options
granted to you on January 31, 1997, is hereby extended to January 31, 2009. 
  
 4. Deduction of Taxes from Amounts Payable. EMJ may withhold any taxes (including FICA, state or federal taxes) that EMJ is legally required or permitted to withhold to protect EMJ against liability for the
payment of such withholding taxes, and out of the money so deducted, EMJ may discharge any such liability. Withholding for this purpose may come from any wages due to you or, if none, from payment of the Retention Bonus. 
  
 5. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York (other than its laws respecting choice of law). 
  
 6. Offset. Subject to applicable law, any amounts owed to EMJ by you (of whatever nature) may be offset by EMJ against the Retention Bonus, and the
Retention Bonus shall not be distributed unless and until all disputes between EMJ and you have been fully and finally resolved and you have waived all claims to such against EMJ. 
  
 7. Headings. The headings contained in this letter agreement are for reference purposes only and shall not affect the
meaning or interpretation of this letter agreement. 
  
 8.
Severability. If any provision of this letter agreement shall for any reason be held to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provision, and this letter agreement shall be construed as if
such invalid or unenforceable provision were omitted. 
  
 9.
Waiver. The failure or delay of a party to require performance by the other party of any provision of this Agreement shall not affect such party’s right to require performance unless and until such performance has been expressly waived
in writing. 
  
 10. Termination of Employment. This letter
agreement does not change the fact that either you or EMJ may end your employment with EMJ at any time for any reason, with or without Cause or Good Reason. 
  
 11. Entire Agreement; Amendments and Waivers; Eligibility For Employee Benefits. This letter agreement contains the entire agreement between EMJ
and you concerning the matters described herein, shall be binding upon EMJ’s successors and assigns and you and your heirs, personal representatives and assigns, and supercedes any earlier discussions or negotiations regarding its terms. No
change to or waiver of any term or condition of this letter 

  

 - 3 - 

 
agreement will bind EMJ or you, unless it is set forth in a written document that is signed by you and an authorized representative of EMJ. Nothing contained
in this letter agreement shall affect your eligibility for benefits under any employee benefit plan maintained by EMJ, and any right you may have hereunder is in addition to any such benefit. 
  
 12. Notices. Any notices or reports required or permitted to be given
under this letter agreement shall be given in writing and shall be delivered personally or by overnight courier. Notices shall be effective on the date received. Notices shall be sent to the parties at the following respective addresses, or to such
other address or addresses as either party shall designate in writing to the other: 
  

			
	 If to EMJ:
	  	 Earle M. Jorgensen Company
 10650 Alameda
Street
 Lynwood, California 90262
 Attn:
                                

		
	 If to You:
	  	 Maurice S. Nelson, Jr.
 Earle M. Jorgensen
Company
 10650 Alameda Street
 Lynwood, California
90262

  
 Please confirm your
agreement with the foregoing by signing and dating the enclosed duplicate copy of this letter agreement and returning that copy to me by January 15, 2005. If you fail to sign this letter agreement and return it by January 15, 2005, this letter
agreement shall be null and void and of no force and effect whatsoever. 
  

					
	 Very truly yours,

	
	 EARLE M. JORGENSEN COMPANY

			
	By:	 	 	 	 
	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

	
	 ACCEPTED AND AGREED TO
 this 17th day of December, 2004

	
	  
	 Maurice S. Nelson, Jr.

  

 - 4 -Amendment to Option Plan

  
 EXHIBIT 10.40

  
 AMENDMENT 
 TO THE 
 EARLE M. JORGENSEN HOLDING
COMPANY, INC. OPTION PLAN 
  
 WHEREAS, Earle M.
Jorgensen Holding Company, Inc. (the “Company”) sponsors the Earle M. Jorgensen Holding Company, Inc. Option Plan (the “Plan”) for the benefit of its employees and directors; and 
  
 WHEREAS, the Company will change the methodology used to value its
stock and the Company desires to preserve the value of awards granted under the Plan prior to the change in valuation methodology. 
  
 NOW, THEREFORE, BE IT RESOLVED, that pursuant to the authority granted to the Board of Directors of the Company in Section 8 of the Plan, the Plan
is hereby amended effective as of December 16, 2004 in the following particulars: 
  
 I. 
  
 Section 5.1 of the
Plan is amended to read as follows: 
  
 “5.1 NUMBER. Subject
to the provisions of Section 5.3, the number of shares of Common Stock subject to Options under the Plan may not exceed Four Million (4,000,000) shares of Common Stock. The shares to be delivered under the Plan consist, in whole or in part,
of Common Stock held in treasury or authorized but unissued Common Stock, not reserved for any other purpose.” 
  
 II. 
  
 The following shall be added as Section 5.4 to the Plan: 
  
 “5.4 ADJUSTMENT TO AWARDS RESULTING FROM CHANGE IN VALUATION METHODOLOGY. All Options that are outstanding on December 16, 2004 shall be adjusted as provided in this Section 5.4. Effective as of December 16, 2004, the adjusted exercise
price per share of Common Stock for each such Option shall be the product of the current exercise price per share of Common Stock for the Option, multiplied by 0.5669, and rounded to the nearest $0.01. Effective as of December 16, 2004, the adjusted
number of shares of Common Stock covered by each such Option that are available for exercise shall be the product of the current number of shares of Common Stock covered by the Option that are available for exercise, multiplied by 1.7641, and
rounded to the nearest whole share. The Committee is authorized to make the adjustments provided in this Section 5.4.” 
  

  
 III. 
  
 In all other respects, the Plan shall remain in full force and effect.

  
 IN WITNESS WHEREOF, the Company has caused this
Amendment to be executed by its duly authorized officer as of the day and year first above written. 
  

			
	 EARLE M. JORGENSEN
 HOLDING
COMPANY, INC.

		
	By:	 	 
		
	 Its:
	 	 

  

 2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00076-of-00352.parquet"}]]