Document:

ex104.htm

ECO SCIENCE SOLUTIONS, INC.

2016 EQUITY INCENTIVE PLAN

 

	
Article 1.

	
Establishment & Purpose

 

1.1 Purpose of this Plan. The purpose of this Plan is to attract, retain and motivate the officers, directors, employees and consultants of the Company and its Subsidiaries and Affiliates, as well as provide a means of compensation for consultants, and to promote the success of the Company’s business by providing them with appropriate incentives and rewards either through a proprietary interest in the long-term success of the Company or compensation based on fulfilling certain performance goals.

1.2 Effective Date of Plan.  The Plan shall become effective and Awards may be granted on and after January 1, 2016 (the “Effective Date”). Any Awards of incentive stock options granted under the Plan are granted subject to approval of the Plan by the stockholders of the Company within twelve (12) months after the Effective Date. If such approval has not been obtained within such twelve (12) month period, grants of incentive stock options shall be deemed to have been grants of non-qualified stock options.

 

	
Article 2.

	
Definitions

 

Capitalized terms used and not otherwise defined herein shall have the meanings set forth below.

2.1 “Affiliate” means, with respect to any specified Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such specified Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”), as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. Unless otherwise specifically indicated, when used herein, the term Affiliate shall refer to an Affiliate of the Company.

2.2 “Award” means any Option, Stock Appreciation Right, Restricted Stock or Other Stock-Based Award that is granted under this Plan.

2.3 “Award Agreement” means either (a) a written agreement entered into by the Company and a Participant setting forth the terms and provisions applicable to an Award, or (b) a written statement signed by an authorized officer of the Company to a Participant describing the terms and provisions of the actual grant of such Award.

2.4 “Board” means the Board of Directors of the Company.

2.8 “Code” means the U.S. Internal Revenue Code of 1986, as amended from time to time.

  

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 2.9 “Committee” means the Board, or any committee designated by the Board to administer this Plan in accordance with Article 3 of this Plan.

2.10 “Consultant” means any person who provides bona fide services to the Company or any Affiliate or Subsidiary as a consultant or advisor, excluding any Employee or Director.

2.11 “Director” means a member of the Board who is not an Employee.

2.12 “Employee” means an officer or other employee of the Company or any Subsidiary or Affiliate, including a member of the Board who is such an employee.

2.13 “Incentive Stock Option” means an Option intended to meet the requirements of an incentive stock option as defined in Section 422 of the Code and designated as an Incentive Stock Option in accordance with Article 6 of this Plan.

2.14 “Non-Restricted Employee Benefit Plan Stock” means Shares that are issued pursuant to a qualified employee benefit.

2.15 “Other Stock-Based Award” means any Award granted under Article 9 of this Plan.

2.16 “Participant” means any eligible person as set forth in Section 4.1 to whom an Award is granted.

2.17 “Person” means any natural person, sole proprietorship, general partnership, limited partnership, limited liability company, joint venture, trust, unincorporated organization, association, corporation, governmental authority or any other organization, irrespective of whether it is a legal entity and includes any successor (by merger or otherwise) of such entity.

2.18 “Restricted Stock” means any Award granted under Article 8 of this Plan.

2.19 “Restriction Period” means the period during which Restricted Stock awarded under Article 8 of this Plan is restricted.

  

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2.20 “Share” means a share of common stock of the Company, par value $0.01 per share, or such other class or kind of shares or other securities resulting from the application of Article 11 of this Plan.

2.21 “Subsidiary” means, with respect to any entity (the “parent”), any corporation, limited liability company, company, firm, association or trust of which such parent, at the time in respect of which such term is used, (i) owns directly or indirectly more than fifty percent (50%) of the equity, membership interest or beneficial interest, on a consolidated basis, or (ii) owns directly or controls with power to vote, directly or indirectly through one or more Subsidiaries, shares of the equity, membership interest or beneficial interest having the power to elect more than fifty percent (50%) of the directors, trustees, managers or other officials having powers analogous to that of directors of a corporation. Unless otherwise specifically indicated, when used herein, the term Subsidiary shall refer to a direct or indirect Subsidiary of the Company.

2.22 “Ten-Percent Shareholder” means a person who on any given date owns, either directly or indirectly (taking into account the attribution rules contained in Section 424(d) of the Code), stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or a Subsidiary or Affiliate.

 

	
Article 3.

	
Administration

 

3.1 Authority of the Committee. This Plan shall be administered by the Committee, which shall have full power to interpret and administer this Plan and full authority to select the Directors, Employees and Consultants to whom Awards will be granted and determine the type and amount of Awards to be granted to each such Director, Employee or Consultant, the terms and conditions of such Awards. Without limiting the generality of the foregoing, the Committee may, in its sole discretion, interpret, clarify, construe or resolve any ambiguity in any provision of this Plan or any Award Agreement, accelerate or waive vesting of Awards and exercisability of Awards, extend the term or period of exercisability of any Awards or waive any terms or conditions applicable to any Award, subject to the limitations set forth in Section 12.2 of this Plan. Awards may, in the discretion of the Committee, be made under this Plan in assumption of, or in substitution for, outstanding awards previously granted by the Company or an Affiliate or a company acquired by the Company or with which the Company combines. The Committee shall have full and exclusive discretionary power to adopt rules, forms, instruments and guidelines for administering this Plan as the Committee deems necessary or proper, subject to the limitations set forth in Section 12.2 of this Plan. Subject to Section 12.2, all actions taken and all interpretations and determinations made by the Committee or by the Board (or any other committee or sub-committee thereof), as applicable, shall be final and binding upon the Participants, the Company and all other interested individuals.

3.2 Delegation. The Committee may delegate to one or more of its members, one or more officers of the Company or any Subsidiary, or one or more agents or advisors such administrative duties or powers as it may deem advisable.

 

  

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Article 4.

	
Eligibility and Participation

 

4.1 Eligibility. Participants will consist of such Employees, Directors and Consultants as the Committee in its sole discretion determines and whom the Committee may designate from time to time to receive Awards under this Plan; provided, however, that Options and Stock Appreciation Rights may only be granted to those Employees, Directors and Consultants with respect to whom the Company is an “eligible issuer” within the meaning of Section 409A of the Code. The designation of an individual as a Participant in any year shall not require that the Committee designate such individual to receive an Award in any other year or to receive the same type or amount of Award in any other year.

4.2 Type of Awards. Awards under this Plan may be granted in any one or a combination of: (a) Non-Restricted Employee Benefit Plan Stock; (b) Restricted Stock; and (c) Other Stock-Based Awards. Awards granted under this Plan shall be evidenced by Award Agreements (which need not be identical) that provide additional terms and conditions associated with such Awards, including, without limitation, restrictive covenants, as determined by the Committee in its sole discretion; provided, however, that in the event of any conflict between the provisions of this Plan and any such Award Agreement, the provisions of the Plan shall prevail unless otherwise indicated in the Award Agreement.

 

	
Article 5.

	
Shares Subject to this Plan

 

5.1 Number of Shares Available. Subject to adjustment as provided in this Article 5 and Article 11 of the Plan, the maximum number of Shares available for issuance to Participants pursuant to Awards under the Plan shall be 4.9% of the issued and outstanding common stock at any one time. The Shares available for issuance under the Plan may consist, in whole or in part, of authorized and unissued Shares or treasury Shares. Any Shares tendered to or withheld by the Company as part or full payment for the purchase price, Option Price or grant price of an Award or to satisfy all or part of the Company’s tax withholding obligation with respect to an Award shall not be available for the issuance of additional Awards.

5.2 Additional Shares. In the event that any outstanding Award expires or is forfeited, cancelled or otherwise terminated without consideration (i.e., Shares or cash) therefor, the Shares subject to such Award, to the extent of any such forfeiture, cancellation, expiration or termination, shall again be available for Awards under this Plan. If the Committee authorizes the assumption under this Plan, in connection with any merger, consolidation, reorganization or acquisition of property or stock, of awards granted under another plan, such assumption shall not reduce the maximum number of Shares available for issuance under this Plan.

 

Article 6. Non-Restricted Employee Benefit Plan Stock

 

6.1 Grant of Non-Restricted Employee Benefit Plan Stock. The Committee is hereby authorized to grant Non-Restricted Employee Benefit Plan Stock. Non-Restricted Employee Benefit Plan Stock shall be evidenced by Written Agreements that shall conform to the requirements of the Plan and may contain such other provisions as the Committee shall deem advisable. Subject to the terms of the Plan and any applicable Plan, a Non-Restricted Employee Benefit may be granted under the Plan and shall confer on the holder thereof a right to receive Non-Restricted Common Stock, as the Committee shall determine in its sole discretion.

  

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Article 7.

	
Restricted Stock

 

7.1 Grant of Restricted Stock. The Committee is hereby authorized to grant Restricted Stock to Participants. An Award of Restricted Stock is a grant by the Committee of a specified number of Shares to the Participant, which Shares are subject to forfeiture upon the occurrence of specified events. Participants shall be awarded Restricted Stock in exchange for consideration not less than the minimum consideration required by applicable law. Restricted Stock shall be evidenced by an Award Agreement, which shall conform to the requirements of the Plan and may contain such other provisions as the Committee shall deem advisable.

7.2 Terms of Restricted Stock Awards. Each Award Agreement evidencing a Restricted Stock grant shall specify the Restriction Period(s), the number of Shares of Restricted Stock subject to the Award, the purchase price, if any, of the Restricted Stock, the performance, employment or other service or other conditions (including the termination of a Participant’s employment or other service, whether due to death, Disability or other reason) under which the Restricted Stock may be forfeited to the Company and such other provisions as the Committee shall determine. Any Restricted Stock granted under the Plan shall be evidenced in such manner as the Committee may deem appropriate, including book-entry registration or issuance of a stock certificate or certificates (in which case, the certificate(s) representing such Shares shall be legended as to sale, transfer, assignment, pledge or other encumbrances during the Restriction Period and deposited by the Participant, together with a stock power endorsed in blank, with the Company, to be held in escrow during the Restriction Period). At the end of the Restriction Period, the restrictions imposed hereunder and under the Award Agreement shall lapse with respect to the number of Shares of Restricted Stock as determined by the Committee, and, except as provided in Section 14.6, the legend required by this Section 8.2 shall be removed and such number of Shares delivered to the Participant (or, where appropriate, the Participant’s legal representative).

7.3 Voting and Dividend Rights. The Committee shall determine and set forth in a Participant’s Award Agreement whether or not a Participant holding Restricted Stock granted hereunder shall have the right to exercise voting rights with respect to the Restricted Stock during the Restriction Period (the Committee may require a Participant to grant an irrevocable proxy and power of substitution) and/or have the right to receive dividends on the Restricted Stock during the Restriction Period (and, if so, on what terms).

7.4 Performance Goals. The Committee may condition the grant of Restricted Stock or the expiration of the Restriction Period upon the Participant’s achievement of one or more performance goals specified in the Award Agreement. If the Participant fails to achieve the specified performance goal(s), the Committee shall not grant the Restricted Stock to such Participant or the Participant shall forfeit the Award of Restricted Stock to the Company, as applicable.

8.5 Section 83(b) Election. If a Participant makes an election pursuant to Section 83(b) of the Code concerning Restricted Stock, the Participant shall be required to file promptly a copy of such election with the Company.

	
Article 8.

	
Other Stock-Based Awards

The Committee, in its sole discretion, may grant Awards of Shares and Awards that are valued, in whole or in part, by reference to, or are otherwise based on the Fair Market Value of, Shares, including, without limitation, restricted stock units, dividend equivalent rights and other phantom awards. Such Other Stock-Based Awards shall be in such form and dependent on such conditions as the Committee shall determine, including, without limitation, the right to receive one or more Shares (or the equivalent cash value of such Shares) upon the completion of a specified period of employment or other service, the occurrence of an event and/or the attainment of performance objectives. Subject to the provisions of the Plan, the Committee shall determine to whom and when Other Stock-Based Awards will be made, the number of Shares to be awarded under (or otherwise related to) such Other Stock-Based Awards, whether such Other Stock-Based Awards shall be settled in cash, Shares or a combination of cash and Shares and all other terms and conditions of such Awards (including, without limitation, the vesting provisions thereof and provisions ensuring that all Shares so awarded and issued shall be fully paid and non-assessable). Each Other Stock-Based Award grant shall be evidenced by an Award Agreement, which shall conform to the requirements of the Plan.

 

  

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Article 9.

	
Compliance with Section 409A of the Code

 

9.1 General. The Company intends that the Plan and all Awards be construed to avoid the imposition of additional taxes, interest and penalties pursuant to Section 409A of the Code (together with all regulations, guidance, compliance programs and other interpretative authority thereunder, “Section 409A”). Notwithstanding the Company’s intention, in the event that any Award is subject to such additional taxes, interest or penalties pursuant to Section 409A, the Committee may, in its sole discretion and without a Participant’s prior consent, amend the Plan and/or Awards, adopt policies and procedures or take any other actions (including amendments, policies, procedures and actions with retroactive effect) as are necessary or appropriate to (a) exempt the Plan and/or any Award from the application of Section 409A, (b) preserve the intended tax treatment of any such Award or (c) comply with the requirements of Section 409A, including, without limitation, any such regulations, guidance, compliance programs and other interpretative authority that may be issued after the date of the grant. Neither the Company nor any of its Subsidiaries or Affiliates shall be liable for any additional tax, interest or penalties that may be imposed on a Participant under Section 409A or any damages that may be imposed on a Participant or any other Person for failing to comply with Section 409A, but only if Awards are granted, administered and settled in accordance with the terms of this Plan and the underlying Award Agreements.

9.2 Payments to Specified Employees. Notwithstanding any contrary provision in the Plan or Award Agreement, any payment(s) of nonqualified deferred compensation (within the meaning of Section 409A) that are otherwise required to be made under the Plan to a “specified employee” (as defined under Section 409A) as a result of his or her separation from service (other than a payment that is not subject to Section 409A) shall be delayed for the first six (6) months following such separation from service (or, if earlier, until the date of death of the specified employee) and shall instead be paid (in a manner set forth in the Award Agreement) on the day that immediately follows the end of such six-month period or as soon as administratively practicable thereafter. Any remaining payments of nonqualified deferred compensation shall be paid without delay and at the time or times such payments are otherwise scheduled to be made. 

9.3 Separation from Employment or Other Service. A termination of employment or other service shall not be deemed to have occurred for purposes of any provision of the Plan or any Award Agreement providing for the payment of any amounts or benefits that are considered nonqualified deferred compensation under Section 409A upon or following a termination of employment or other service, unless such termination is also a “separation from service” within the meaning of Section 409A and the payment thereof prior to a “separation from service” would violate Section 409A. For purposes of any such provision of the Plan or any Award Agreement relating to any such payments or benefits, references to a “termination,” “termination of employment,” “termination of service,” or like terms shall mean “separation from service.”

 

	
Article 10.

	
Adjustments

 

10.1 Adjustments in Authorized Shares. In the event of any corporate event or transaction involving the Company, a Subsidiary and/or an Affiliate (including, but not limited to, a change in the Shares of the Company or the capitalization of the Company), such as a merger, consolidation, reorganization, recapitalization, partial or complete liquidation, reclassification, separation, stock dividend, stock split, reverse stock split, split up, spin-off, combination of Shares, exchange of Shares, dividend in kind, cash dividend, amalgamation or other like change in capital structure, distribution of any kind or any similar corporate event or transaction, the Committee, to prevent dilution or enlargement of Participants’ rights under the Plan, shall choose, in its sole discretion, one or more of the following actions, which the Committee shall take in an equitable manner, (a) substitute or adjust the number and kind of Shares or other property that may be issued under the Plan or under particular forms of Awards, (b) substitute or adjust the number and kind of Shares or other property subject to outstanding Awards, (c) adjust the Option Price, grant price or purchase price applicable to outstanding Awards and/or other value determinations (including performance conditions) applicable to the Plan or outstanding Awards, (d) permit the holders of outstanding Awards to participate in the corporate event or transaction, or (e) issue additional Awards or Shares or make cash payments to the holders of outstanding Awards. All adjustments shall be made in good faith compliance with Section 409A. 

  

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10.2 Change of Control. Upon the occurrence of a Change of Control after the Effective Date, unless otherwise specifically prohibited under applicable laws or by the rules and regulations of any governing governmental agencies or national securities exchanges, or unless the Committee shall specify otherwise in the Award Agreement, the Committee shall choose, in its sole discretion, to make one or more of the following adjustments in the terms and conditions of outstanding Awards (which, for the avoidance of doubt, shall exclude any Options or any portions thereof for which a notice of exercise has been received by the Company): (a) continuation or assumption of such outstanding Awards under the Plan by the Company (if it is the surviving company or corporation) or by the surviving company or corporation or its parent; (b) substitution by the surviving company or corporation or its parent of awards with substantially equivalent terms for outstanding Awards; (c) accelerated exercisability, vesting and/or lapse of restrictions under outstanding Awards immediately prior to the occurrence of such event; (d) upon written notice, provision that any outstanding Awards must be exercised, to the extent then exercisable, during a reasonable period of time immediately prior to the scheduled consummation of the event or such other period as determined by the Committee (contingent upon the consummation of the event), and at the end of such period, such Awards shall terminate to the extent not so exercised within the relevant period, provided, that, the Participant is able to sell any Shares acquired upon such exercise for cash or liquid securities in the transaction that causes the Change of Control; (e) cancellation of all or any portion of a Participant’s outstanding Awards for consideration (in the form of cash or liquid securities) equal to the Fair Market Value of the Shares subject to such Award (or the portion thereof being canceled), provided, that, in the case of Options and Stock Appreciation Rights or similar Awards, the Participant shall be entitled to the excess, if any, of the aggregate Fair Market Value of the Shares subject to such outstanding Awards (or the portion thereof being canceled) over the aggregate Option Price or grant price, as applicable, with respect to such Awards or portion thereof being canceled; or (f) in the event of a sale of at least 80% of the outstanding Shares or all or substantially all of the assets of the Company, cancellation of any unvested Awards or any unvested portions of any Awards for no consideration. For the avoidance of doubt, in the event of a sale of less than 80% of the outstanding Shares or less than substantially all of the assets of the Company, as applicable, any unvested Awards or any unvested portions of any Awards will remain, subject to clauses (a) through (e) of this Section 11.2.

 

	
Article 11.

	
General Provisions

 

11.1 No Right to Employment or Other Service or Award. The granting of an Award under the Plan shall impose no obligation on the Company, any Subsidiary or any Affiliate to continue the employment or other service of a Participant and shall not lessen or affect any right that the Company, any Subsidiary or any Affiliate may have to terminate the employment or other service of such Participant. No Participant or other Person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards. The terms and conditions of Awards and the Committee’s determinations and interpretations with respect thereto need not be the same with respect to each Participant (whether or not such Participants are similarly situated).

11.2 Settlement of Awards. Each Award Agreement shall establish the form in which the Award shall be settled. The Committee shall determine whether cash, Awards, other securities or other property shall be issued or paid in lieu of fractional Shares or whether such fractional Shares or any rights thereto shall be issued, rounded, forfeited or otherwise eliminated.

11.3 Tax Withholding. The Company shall have the power and the right to deduct or withhold automatically from any amount deliverable under the Award or otherwise, or to require a Participant to remit to the Company, the minimum statutory amount to satisfy federal, state and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of the Plan. Participants may elect, subject to the approval of the Committee, in its sole discretion, to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares having a Fair Market Value equal to the minimum statutory total tax that could be imposed in connection with any such taxable event.

  

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11.4 No Guarantees Regarding Tax Treatment. Participants (or their beneficiaries) shall be responsible for all taxes with respect to any Awards under the Plan. The Committee and the Company make no guarantees to any Person regarding the tax treatment of Awards or payments made under the Plan. Neither the Committee nor the Company has any obligation to take any action to prevent the assessment of any tax on any Person with respect to any Award under Section 409A or 457A of the Code or otherwise, and none of the Company, any of its Subsidiaries or Affiliates or any of their employees or representatives shall have any liability to a Participant with respect thereto.

11.5 Non-Transferability of Awards. Unless otherwise determined by the Committee, an Award shall not be transferable or assignable by the Participant except (a) in the event of the Participant’s death (subject to the applicable laws of descent and distribution) or (b) subject to the approval of the Committee, which approval shall not be unreasonably withheld or delayed, to a family trust or other entity established for estate planning purposes, and any such purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate. No transfer shall be permitted for value or consideration. An award exercisable after the death of a Participant may be exercised by the heirs, legatees, personal representatives or distributees of the Participant. Any permitted transfer of the Awards to heirs, legatees, personal representatives or distributees of the Participant shall not be effective to bind the Company unless the Committee shall have been furnished with written notice thereof and a copy of such evidence as the Committee may deem necessary to establish the validity of the transfer and the acceptance by the transferee or transferees of the terms and conditions hereof.

11.6 Stockholders’ Agreement; Conditions and Restrictions on Shares. Shares received in connection with Awards granted hereunder shall be subject to all of the terms and conditions of the Stockholders’ Agreement, including all transfer restrictions and repurchase rights set forth therein. As a condition to receiving, exercising or settling an Award, each Participant shall sign a joinder agreement pursuant to which the Participant shall become fully bound by the terms set forth in the Stockholders’ Agreement. The certificates for Shares may include any legend that the Committee deems appropriate to reflect any conditions and restrictions applicable to such Shares.

11.7 Shares Not Registered. Shares and Awards shall not be issued under this Plan unless the issuance and delivery of such Shares and any Awards comply with (or are exempt from) all applicable requirements of law, including, without limitation, the Securities Act of 1933, as amended, the rules and regulations promulgated thereunder, state securities laws and regulations and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded. The Company shall not be obligated to file any registration statement under any applicable securities laws to permit the purchase or issuance of any Shares or any Awards under this Plan, and accordingly, any certificates for Shares or documents granting Awards may have an appropriate legend or statement of applicable restrictions endorsed thereon. If the Company deems it necessary to ensure that the issuance of securities under this Plan is not required to be registered under any applicable securities laws, each Participant with respect to whom such security would be purchased or issued shall deliver to the Company an agreement or certificate containing such representations, warranties and covenants as the Company reasonably requires.

11.8 Awards to Non-U.S. Employees or Directors. To comply with the laws in countries other than the United States in which the Company or any Subsidiary or Affiliate operates or has Employees, Directors or Consultants, the Committee, in its sole discretion, shall have the power and authority to: (a) determine which Subsidiaries or Affiliates shall be covered by the Plan; (b) determine which Employees, Directors or Consultants outside the United States are eligible to participate in the Plan; (c) modify the terms and conditions of any Award granted to Employees, Directors or Consultants outside the United States to comply with applicable foreign laws; (d) take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local government regulatory exemptions or approvals; and (e) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable, including in accordance with Appendix I attached hereto.

11.9 Rights as a Stockholder. Except as otherwise provided herein or in the applicable Award Agreement, a Participant shall have none of the rights of a stockholder with respect to Shares covered by any Award until the Participant becomes the record holder of such Shares.

  

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11.10 Severability. If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to applicable laws, or, if it cannot be so construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award, and the remainder of the Plan and any such Award shall remain in full force and effect.

11.11 Unfunded Plan. Participants shall have no right, title or interest whatsoever in or to any investments that the Company or any of its Subsidiaries or Affiliates may make to aid it in meeting its obligations under the Plan. Nothing contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Participant, beneficiary, legal representative or other Person. To the extent that any Person acquires a right to receive payments from the Company under the Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company, and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts. The Plan is not subject to the U.S. Employee Retirement Income Security Act of 1974, as amended from time to time.

11.12 No Constraint on Corporate Action. Nothing in the Plan shall be construed to (a) limit, impair or otherwise affect the Company’s right or power to make adjustments, reclassifications, reorganizations or changes of its capital or business structure or to merge, consolidate, dissolve, liquidate, sell or transfer all or any part of its business or assets; or (b) limit the right or power of the Company to take any action that it deems necessary or appropriate.

11.13 Successors. All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of all or substantially all of the business or assets of the Company.

11.14 Governing Law. This Plan and each Award Agreement and all claims or causes of action or other matters (whether in contract, tort or otherwise) that may be based upon, arise out of or relate to this Plan or any Award Agreement or the negotiation, execution or performance of this Plan or any Award Agreement shall be governed by and construed in accordance with the laws of the State of Nevada, excluding any conflict-or choice-of-law rule or principle that might otherwise refer construction or interpretation of this Plan to the substantive law of another jurisdiction.

11.15 Effective Date. The Plan shall be effective as of the date of adoption by the Board, which date is set forth below (the “Effective Date”).

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CERTIFICATION

On behalf of the Company, the undersigned hereby certifies that this Eco Science Solutions, Inc. 2016 Equity Incentive Plan has been approved by the Board of Directors of the Company as of January 1, 2016.

 

 

ECO SCIENCE SOLUTIONS, INC.

/s/Jeffery Taylor      

Jeffery Taylor, Chief Executive Officer

/s/Don Taylor       

Don Taylor, Chief Financial Officer

  

10ex10-13.htm

EXHIBIT 10.13

 

 

EMPLOYMENT AGREEMENT 

 

This Employment Agreement (this “Agreement”) is made and entered into effective as of November 23, 2016 (the “Effective Date”), by and between OLYMPIC STEEL, INC., an Ohio corporation (the “Company”), and RICHARD T. MARABITO (“Executive”). 

 

WHEREAS, the Company desires to continue to employ Executive in the position of Chief Financial Officer of the Company, and Executive desires to accept such employment, on the terms and subject to the conditions hereinafter set forth; 

 

WHEREAS, Executive has valuable knowledge and experience relating to the Company’s businesses and the industries in which it operates, and the parties desire to provide for his services to the Company on the terms set forth herein; 

 

WHEREAS, the Company and Executive currently are parties to an employment agreement, effective as of November 23, 2011 (the “Prior Agreement”) and the Management Retention Agreement, dated April 26, 2000, and amended as of March 13, 2008 and December 31, 2008 (the “Management Retention Agreement”); and

 

WHEREAS, the Company and Executive desire that this Agreement supersede and completely replace the Prior Agreement as of the Effective Date.

 

NOW, THEREFORE, in consideration of the respective covenants and agreements of the parties herein contained, the Company and Executive agree as follows: 

 

1.     Term of Employment. The Company hereby agrees to continue to employ Executive, and Executive hereby agrees to continue to serve the Company, on the terms and conditions set forth herein for the period commencing on January 1, 2017 and expiring on January 1, 2021 (the “Employment Period”). The Employment Period shall automatically be renewed on January 1, 2021 for a period of an additional three years from such date unless, not later than July 1, 2020, the Company or Executive has given notice to the other party that it or he, as the case may be, does not wish to have the Employment Period extended. Such extension shall be included in the defined term Employment Period. In any case, the Employment Period may be terminated earlier under the terms and conditions set forth herein. 

 

2.     Position and Duties. Executive is the Chief Financial Officer of the Company and reports to the Chief Executive Officer. In this position, Executive has the responsibility for the general management and operation of the Company and the performance of such other executive services and duties as shall be reasonably assigned to and requested of him by, and subject to the direction and supervision of, the Chief Executive Officer and the Board of Directors of the Company. Executive shall serve in any position and office with the Company as the Board of Directors of the Company (the “Board”) may determine from time to time. However, Executive shall always remain as Chief Financial Officer and at the level of a senior executive officer of the Company. During the Employment Period, Executive shall devote substantially all his working time and efforts to the business and affairs of the Company and serve the Company in its business and perform his duties to the best of his ability. 

 

 

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3.     Compensation. 

 

(a)     Salary. Effective January 1, 2017, Executive shall receive a base salary at the rate of Five Hundred Thousand Dollars ($500,000) per year (the “Base Salary”). Effective January 1, 2018 and for the remainder of the Employment Period thereafter, Executive shall receive a Base Salary at the rate of Five Hundred Fifty Thousand Dollars ($550,000) per year. Executive’s salary may be adjusted, including for promotion, change in title or assignment of additional duties, although any such adjustment shall be at the sole discretion of the Board of Directors of the Company or any duly authorized Committee thereof, including but not limited to the Compensation Committee. Notwithstanding the foregoing, in no event shall Executive’s salary be adjusted below the amount of the Base Salary. Such salary shall be payable in accordance with the normal policies of the Company for payment of its senior executives. 

 

(b)     Benefits Generally. During the Employment Period, Executive shall be eligible to participate in all welfare and benefit plans which are currently maintained or established, or which may be established and maintained in the future, by the Company for its senior executives generally (subject, however, to all of the terms and conditions thereof, including any eligibility requirements therefor), including but not limited to: (i) group life insurance coverage; (ii) hospitalization or disability insurance coverage, (iii) retirement plans, including but not limited to any supplemental executive retirement plan, (iv) long term incentive and equity-based plans; and (v) the reimbursement plan for financial services and tax planning. For purposes of this Agreement, no benefit shall be considered to have accrued as of any date under any welfare or benefit plan referred to in this Section 3(b) if such benefit remains subject to a discretionary determination under the terms of such plan as of such date. 

 

(c)     Expenses. The Company shall reimburse Executive for reasonable direct expenses incurred by him on behalf of the Company in the performance of his duties during the Employment Period. Executive shall furnish the Company with such documentation as is requested by the Company in order for it to comply with the Code and regulations thereunder in connection with the proper deduction of such expenses. 

 

(d)     Bonus Plan. During the Employment Period, Executive shall be eligible for an annual performance bonus (the “Annual Bonus”) under the Senior Management Cash Incentive Plan of 2016, as such plan may be amended by the Board from time to time, or such other bonus plan that replaces such plan, in such amount and based on the Company’s performance against specific target levels as is determined by the Board of Directors of the Company or any duly authorized Committee thereof, including but not limited to the Compensation Committee of the Board. 

 

If the Company is required to restate its annual financial statements for any fiscal year and such restatement would reduce the Annual Bonus payment for the period covered by such financial restatement by more than 5%, Executive shall reimburse the Company for the difference between the Annual Bonus actually paid and the Annual Bonus payable under the restated financial statement. Executive shall make such reimbursement not later than sixty (60) days after the restated financial statements have been made final and disclosed to the public. Notwithstanding anything in this Agreement to the contrary, Executive acknowledges and agrees that this Agreement and the Annual Bonus (and any severance amounts derived therefrom) described herein may be subject to the terms and conditions of the Company’s clawback policy (if any) as may be in effect from time to time, including specifically to implement Section 10D of the Securities Exchange Act of 1934, as amended, and any applicable rules or regulations promulgated thereunder (including applicable rules or regulations of any national securities exchange on which the Company’s securities may be traded) (the “Compensation Recovery Policy”), and that applicable sections of this Agreement and any related documents, including this Section 3(d) shall be deemed superseded by (to the extent necessary) and subject to the terms and conditions of the Compensation Recovery Policy from and after the effective date thereof. 

 

 

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(e)     Long Term Incentive Plan. During the Employment Period, Executive shall be eligible to participate in any long term incentive plan, as any such plan may be created or amended by the Board from time to time. 

 

4.     Termination of Employment. 

 

(a)     Events of Termination. The Employment Period shall terminate immediately upon the occurrence of any of the following events: 

 

(i)     the death of Executive; 

 

(ii)     upon receipt by Executive of the Company’s written notice of intent to terminate due to Disability (the “Disability Effective Date”); 

 

(iii)     voluntary termination by Executive of his employment with the Company; 

 

(iv)     upon receipt by the Executive of the Company’s written notice that specifies the reasons for termination for Good Cause; or 

 

(v)     thirty (30) days after Executive’s receipt of the Company’s written notice terminating Executive at any time other than for Good Cause, Death or Disability, for any reason or no reason. 

 

For purposes of Section 4, expiration of the Employment Period upon a notice of the Company under Section 1 that it does not wish to extend the Employment Period shall be deemed a termination for Good Cause, pursuant to Section 4(a)(iv) and expiration of the Employment Period upon a notice of Executive under Section 1 that he does not wish to extend the Employment Period shall be deemed a resignation of Executive pursuant to Section 4(a)(iii). 

 

(b)     Notice of Termination. Any termination by the Company for Good Cause (except for the failure by the Company to extend the Employment Period beyond January 1, 2021) shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 9. For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated and (iii) specifies the Termination Date (as defined below). The failure or omission by the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Cause shall not waive any right of the Company hereunder or preclude the Company from asserting such fact or circumstance in enforcing the Company’s rights hereunder. 

 

 

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(c)     Termination Date. “Termination Date” means (i) if Executive’s employment is terminated by the Company for Good Cause, the date of termination of employment that is set forth in the Notice of Termination (which shall not be earlier than the date on which such notice is given), (ii) if Executive’s employment is terminated by the Company other than for Good Cause or Disability, or Executive resigns, the date on which the Company or Executive notifies Executive or the Company, respectively, of such termination, or such later date as may be specified by the terminating party in such notice, and (iii) if Executive’s employment is terminated by reason of death or Disability, the date of death of Executive or the Disability Effective Date, as the case may be. 

 

5.     Obligations of the Company upon Termination. 

 

(a)     Discharge Other than for Good Cause or Disability. Executive shall be entitled to the severance benefits specified in this Section 5(a) if, during the Employment Period, the Company terminates Executive’s employment for any reason other than for Good Cause or Disability, provided that Executive shall only be entitled to the severance benefits specified in Section 5(a)(ii) if upon such a termination Executive is not entitled to any payments or benefits in connection with such termination under the Management Retention Agreement. In any such case: 

 

(i)     Accrued Benefits. Executive shall be entitled to any: 

 

(A)     incremental Base Salary at the rate then in effect otherwise payable through the Termination Date to the extent not previously paid, which shall be paid in a lump sum in cash within thirty (30) calendar days from the Termination Date; 

 

(B)     Annual Bonus which has been earned and accrued for a calendar year prior to the Termination Date but remains unpaid which shall be paid in the same form and at the same time as such Annual Bonus, if any, is paid to other senior executive officers as further provided under Section 5(a)(ii)(B); 

 

(C)     benefits provided for in Section 3(b) which have accrued up to and including the Termination Date, subject to the terms and conditions of the welfare and benefit plans referenced in Section 3(b); and 

 

(D)     reimbursement of reasonable expenses incurred up to and including the Termination Date under the terms of Section 3(c). 

 

(ii)     Continuation of Benefits. Provided Executive has executed and delivered to the Company a Release and Waiver of Claims (a copy of which the Company shall deliver to Executive on or prior to the Termination Date) within 22 days after the Termination Date and Executive refrains from revoking, rescinding or otherwise repudiating such Release and Waiver of Claims for all applicable periods during which Executive may revoke it (failure to provide such a release shall result in the forfeiture of all benefits under this subparagraph (ii)), during the period ending on the earlier of (x) the last day of the Employment Period as set forth in Section 1 above (or the last day of the extended Employment Period if this Agreement is renewed for an additional term pursuant to Section 1 above), (y) a breach by Executive of any obligation set forth in Section 6, or (z) twenty-four (24) months following termination of employment by the Company under Section 5(a), Executive shall be entitled to continue to receive:

 

 

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(A)     an amount equal to Executive’s Base Salary then in effect, which shall be paid in equal monthly or more frequent installments, on the same schedule and in accordance with the Company’s regular payroll policies for senior executives, commencing thirty (30) days after the Termination Date; 

 

(B)     an Annual Bonus, if any, determined as follows: 

 

(i)     if the other senior executive officers are not entitled to an Annual Bonus payment with respect to the fiscal year of the Company, then Executive shall not be paid an Annual Bonus for such year; or 

 

(ii)     if the other senior executive officers are entitled to an Annual Bonus payment with respect to the fiscal year of the Company, then, at the discretion of the Compensation Committee, the Executive may be paid a portion of the Annual Bonus that otherwise would have been payable to Executive had he remained employed throughout such year, in the same form and on the same date(s) as payment is made to the other senior executive officers, in an amount prorated by multiplying said amount by a fraction where the numerator equals the number of complete months in such partial year during which Executive was employed and the denominator equals twelve; and 

 

(C)     subject to the terms and conditions of the welfare and benefit plans referenced in Section 3(b), and to the extent permitted by applicable law, any benefits provided for in Section 3(b) under substantially the same terms and conditions, including the cost, if any, to Executive, subject to generally applicable changes to the level, and cost, of coverage that may be made with respect to senior executive officers, provided that such continuation shall not be required hereunder to the extent that Executive is entitled, absent any individual waivers or other arrangements, to receive during such period the same type of coverage from another employer or recipient of Executive’s services. 

 

(b)     Death or Disability. 

 

(i)     Accrued Benefits. Executive or his estate or beneficiaries, hereunder, as appropriate, in the event of the death of Executive, shall be entitled to the severance benefits specified in this Section 5(b) if, during the Employment Period, Executive’s employment with the Company terminates as a result of Executive’s death or Disability under Section 4(a)(i) or 4(a)(ii). In either such case, Executive shall be entitled to any (i) incremental Base Salary, (ii) Annual Bonus which has been earned and accrued for a calendar year prior to the Termination Date but remains unpaid which shall be paid in the same form and at the same time as such Annual Bonus, if any, is paid to other senior executive officers, (iii) benefits provided for in Section 3(b) which have accrued up to and including the Termination Date, subject to the terms and conditions of the welfare and benefit plans referenced in Section 3(b), and (iv) reimbursement of reasonable expenses incurred up to and including the Termination Date under the terms of Section 3(c). After the Termination Date, Executive shall no longer be eligible to participate in any of the welfare or benefit plans referenced in Section 3(b), except to the extent and on the terms that participation in any such plan by former employees is expressly provided for by the terms of such plan. 

 

 

5

 

 

(ii)     Continuation of Benefits. In addition to the Accrued Benefits payable under Section 5(b)(i), Executive or his estate or beneficiaries, hereunder as appropriate, in the event of the death of the Executive, but only to the extent that Executive or his estate or beneficiaries are not entitled to twelve (12) months of Base Salary in connection with Executive’s termination of employment as a result of Executive’s death or Disability under the Management Retention Agreement, shall be entitled to twelve (12) month’s Base Salary payable in equal monthly or more frequent installments, on the same schedule and in accordance with the Company’s regular payroll policies for senior executives, commencing thirty days (30) after the Termination Date. Further, Executive’s surviving spouse, if any, and minor children shall be eligible to continue to participate in the Company’s health insurance programs, at the expense of the Company for twelve (12) months after the death or Disability of Executive to the extent such continuation is permitted by applicable law. After such one-year period, Executive’s dependents shall be entitled to participate in any insurance program of the Company to the extent required by federal or state law. No provision of this Agreement shall limit any of Executive’s (or his beneficiaries’) rights under any insurance, pension or other benefit programs of the Company for which Executive shall be eligible at the time of such death or disability. 

 

(c)     Discharge for Good Cause or Resignation. If Executive’s employment with the Company is terminated by Executive on a voluntary basis under Section 4(a)(iii) or is terminated by the Company for Good Cause under Section 4(a)(iv), Executive shall be entitled to (i) payment of incremental Base Salary only through the Termination Date and thereafter such salary shall end and cease to be payable, (ii) at the discretion of the Compensation Committee, payment of any Annual Bonus which has been earned and accrued for a calendar year prior to the Termination Date but remains unpaid which shall be paid in the same form and at the same time as such Annual Bonus, if any, is paid to other senior executive officers, but in no event shall any portion of any subsequent Annual Bonus be deemed to have been earned and accrued, (iii) receive any benefits provided for in Section 3(b) which have accrued up to and including the Termination Date, subject to the terms and conditions of the welfare and benefit plans referenced in Section 3(b), and (iv) reimbursement of reasonable expenses incurred up to and including the Termination Date under the terms of Section 3(c). After the Termination Date, Executive shall no longer be eligible to participate in any of the welfare or benefit plans referenced in Section 3(b), except to the extent and on the terms that participation in any such plan by former employees is expressly provided for by the terms of such plan. 

 

(d)     No Further Obligations. Except as expressly set forth in this Section 5, Executive shall not be entitled to any other payments or benefits under this Agreement as a result of the termination of Executive’s employment. 

 

 

6

 

 

6.     Restrictive Covenants. 

 

(a)     Non-Competition. While employed by the Company and for a period of twenty-four (24) months after ceasing to be so employed (the “Restricted Period”) for whatever reason, Executive shall not, directly or indirectly, own, manage, operate, control or participate in the ownership, management, operation or control of, or be connected as an officer, partner, director, consultant or other position, or have any financial interest in with (i) any metal service center or distributor conducting business within those portions of the United States wherein the Company is conducting business on the Termination Date, or (ii) a business engaged in direct competition with any other significant business carried on by the Company on the Termination Date. In no event shall ownership of less than five (5) percent of the equity of a corporation, limited liability company or other business entity, standing alone, constitute a violation hereof. 

 

(b)     Non-Solicitation. During the Restrictive Period, Executive shall not directly, indirectly or through an affiliate: (i) solicit, induce, divert, or take away or attempt to solicit, induce, divert or take away any customer, distributor, or supplier of the Company; (ii) solicit, induce, or hire or attempt to solicit, induce, or hire any employee of the Company or any individual who was an employee of the Company on the Termination Date and who has left the employment of the Company after the Termination Date within one year of the termination of such employee’s employment with the Company, or (iii) in any way directly or indirectly interfere with such relationships. 

 

(c)     Confidentiality. 

 

(i)     Executive shall keep in strict confidence, and shall not, directly or indirectly, at any time while employed by the Company or after ceasing to be so employed, disclose, furnish, publish, disseminate, make available or, except in the course of performing his duties of employment hereunder, use for his benefit or the benefit of others any Confidential Information. Executive specifically acknowledges that all Confidential Information, in whatever media or form maintained, and whether compiled by the Company or Executive, (1) derives independent economic value from not being readily known to or ascertainable by proper means by others who can obtain economic value from its disclosure or use, (2) that reasonable efforts have been made by the Company to maintain the secrecy of such information, (3) that such information is the sole property of the Company, and (4) that any disclosure or use of such information by Executive while employed by the Company (except in the course of performing his duties and obligations hereunder for the Company) or after ceasing to be so employed shall constitute a misappropriation of the Company’s trade secrets. 

 

(ii)     Notwithstanding the provisions of Section 6(c)(i), Executive may disclose the Confidential Information to anyone outside of the Company with the Company’s express written consent, or Confidential information that: (i) is at the time of receipt or thereafter becomes publicly known through no wrongful act of Executive; or (ii) is received from a third party not under an obligation to keep such information confidential and without breach of this Agreement. 

 

(iii)     In addition to the above provisions of Section 6(c), all memoranda, notes, lists, records and other documents (and all copies thereof) made or compiled by Executive or made available to Executive concerning the business of the Company will be delivered to the Company at any time on request. 

 

 

7

 

 

7.     Amendment to Management Retention Agreement. Effective December 1, 2011, the parties hereby agree that Section 5(a) of the Management Retention Agreement is hereby amended in its entirety to provide as follows:

 

“(a)      If Employee dies during the Contract Period, the Company shall pay Employee’s designated beneficiary (or, in the event of the decease of or failure to designate a beneficiary, Employee’s personal representative) the base salary, provided for in paragraph 4(a) above for a 12-month period commencing thirty days (30) after the date of death, but without prejudice to any payments otherwise due Employee in respect of his death.”

 

Effective December 1, 2011, the parties further hereby agree that Section 7(a) of the Management Retention Agreement is hereby amended in its entirety to provide as follows:

 

“(a)     a lump-sum payment, payable within thirty (30) days after the Termination Date, equal to two and ninety nine one hundredths (2.99) times the average of the last three full calendar years’ Base Salary, Bonus and dollar value of all Employee Benefits (other than medical, dental, disability and life insurance coverage); and”

 

8.     Binding Agreement; Successors. This Agreement shall inure to the benefit of and be binding upon Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If Executive should die while any amounts would still be payable to him hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to Executive’s spouse, or if his spouse does not survive him, to Executive’s estate. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of the Company, including, without limitation, any person acquiring directly or indirectly all or substantially all of the assets of the Company, whether by merger, consolidation, sale or otherwise (and such successor shall thereafter be deemed the “Company” for the purposes of this Agreement). The Company shall require any such successor to assume and agree to perform this Agreement. 

 

9.     Notice. All notices, requests and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) when hand delivered, (b) one business day after being sent by recognized overnight delivery service, or (c) three business days after being sent by registered or certified mail, return receipt requested, postage prepaid, and in each case addressed as follows (or addressed as otherwise specified by notice under this Section): 

 

 

8

 

 

	 	
(i)
	
If to the Company, to: 

Olympic Steel, Inc. 22901 Millcreek Blvd., Suite 650 
Highland Hills, Ohio 44122 
Attention: Chief Executive Officer 

 

With a copy to: 

 

Olympic Steel, Inc. 22901 Millcreek Blvd., Suite 650 
Highland Hills, Ohio 44122 
Attention: Chairman, Compensation Committee 

 

	
 
	
(ii)
	
If to Executive, to: 

Richard T. Marabito 
7919 Sherman Road 
Gates Mills, Ohio 44040

 

10.     Withholding. The Company may withhold from any amounts payable under or in connection with this Agreement all federal, state, local and other taxes as may be required to be withheld by the Company under applicable law or governmental regulation or ruling. 

 

11.     Amendments; Waivers. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing, and is signed by Executive and an officer of the Company specifically designated by the Board of the Company or its Compensation Committee to execute such writing. No delay in exercising any right, power or privilege hereunder shall operate as a waiver thereof. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. 

 

12.     Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Ohio, without giving effect to the conflict of law principles of such State. 

 

13.     Equitable Relief. Executive and the Company acknowledge and agree that the covenants contained in Section 6 are of a special nature and that any breach, violation or evasion by Executive of the terms of Section 6 will result in immediate and irreparable injury and harm to the Company, for which there is no adequate remedy at law, and will cause damage to the Company in amounts difficult to ascertain. Accordingly, the Company shall be entitled to the remedy of injunction, as well as to all other legal or equitable remedies to which the Company may be entitled (including, without limitation, the right to seek monetary damages), for any breach, violation or evasion by Executive of the terms of Section 6. 

 

 

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14.     Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. In the event that any provision of Section 6 is found by a court of competent jurisdiction to be invalid or unenforceable as against public policy, such court shall exercise its discretion in reforming such provision to the end that Executive shall be subject to such restrictions and obligations as are reasonable under the circumstances and enforceable by the Company. 

 

15.     Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. 

 

16.     Headings; Definitions. The headings contained herein are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. Certain capitalized terms used in this Agreement are defined on Schedule A attached hereto. 

 

17.     No Assignment. This Agreement may not be assigned by either party without the prior written consent of the other party, except as provided in Section 8. 

 

18.     Entire Agreement; No Other Arrangements. This Agreement contains the entire agreement between the parties with respect to the employment of Executive and supersedes any and all other agreements, including, without limitation, the Prior Agreement, either oral or in writing, with respect to the employment of Executive, with the exception of the Management Retention Agreement, which shall remain in full force and effect. In the event of any conflict between the Agreement and the Management Retention Agreement, the terms of the Management Retention Agreement shall prevail other than with respect to Section 7 hereof. Executive acknowledges that, in executing this Agreement, he has not relied on any representations not set forth in this Agreement. Executive represents that his employment by the Company will not violate any other agreement by which Executive is bound. 

 

19.     Separation from Service. All references to “termination of employment” or forms and derivations thereof shall refer to events which constitute a “separation from service” as defined in Treasury Regulation §1.409A-1(h) and means the Executive’s separation from service with the Company and all members of the controlled group, for any reason, including without limitation, quit, discharge, or retirement, or a leave of absence (including military leave, sick leave, or other bona fide leave of absence such as temporary employment by the government if the period of such leave exceeds the greater of six months or the period for which the Executive’s right to reemployment is provided either by statute or by contract). “Separation from service” also means the permanent decrease in the Executive’s service for the Company and all controlled group members to a level that is no more than 20% of its prior level. For this purpose, whether a “separation from service” has occurred is determined based on whether it is reasonably anticipated that no further services will be performed by the Executive after a certain date or that the level of bona fide services the Executive will perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than 20% of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services if the Executive has been providing services less than 36 months).

 

 

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20.     Six-Month Delay. Notwithstanding anything to the contrary contained in this Agreement, and solely to the extent that any payment or benefit payable pursuant to this Agreement is not exempt from the requirements of Section 409A, if the Executive is a “key employee” (as defined under Code Section 416(i) without regard to paragraph (5) thereof) on the date of a separation from service, and the Company’s stock is publicly traded on an established securities market or otherwise, any such non-exempt payments under this Agreement which would otherwise have been payable within the first six (6) months shall be paid in the seventh (7th) month following Executive’s Termination Date. Notwithstanding the foregoing, payments delayed pursuant to this paragraph shall commence as soon as practicable following the date of death of the Executive prior to the end of the six (6) month period but in no event later than ninety (90) days following the date of death.

 

21.     Reimbursement and In-Kind Benefits. Any reimbursement of expenses or any in-kind benefits provided under this Agreement, that are subject to and not exempt from Code Section 409A, shall also be subject to the following additional rules: (i) any reimbursement of eligible expenses or in-kind benefits shall be paid as they are incurred (but, solely to the extent not exempt from Code Section 409A, not prior to the end of the six-month period following his termination of employment); provided that in no event shall any such payment be made later than the end of the calendar year following the calendar year in which such expense was incurred; (ii) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during any calendar year shall not affect the amount of expenses eligible for reimbursement, or in-kind benefits to be provided, during any other calendar year; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.

 

22.     Code Section 409A. It is intended that the payments and benefits provided under this Agreement shall either be exempt from application of, or comply with, the requirements of Code Section 409A and the final regulations thereunder. This Agreement shall be construed, administered, and governed in a manner that effects such intent, and the Company shall not take any action that would be inconsistent with such intent and shall make payments in such time and manner as the Company determines would minimize or reduce the risk of adverse taxation under Code Section 409A. In the event that the Company reasonably determines that any compensation or benefits payable under this Agreement may be subject to taxation under Code Section 409A, the Company, after consultation with the Executive, shall have the authority to adopt, prospectively or retroactively, such amendments to this Agreement or to take any other actions it determines necessary or appropriate to (a) exempt the compensation and benefits payable under this Agreement from Code Section 409A or (b) comply with the requirements of Code Section 409A. In no event, however, shall this section or any other provisions of this Agreement be construed to require the Company to provide any gross-up for the tax consequences of any provisions of, or payments under, this Agreement and the Company shall have no responsibility for tax consequences to Executive (or his beneficiary) resulting from the terms or operation of this Agreement. For purposes of Code Section 409A, any payments or benefits under this Agreement are intended to constitute the right to a series of separate payments or benefits.

 

 

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. 

 

	
 
	
OLYMPIC STEEL, INC.

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
By: 
	
 

	
 
	
Name:
	
Michael D. Siegal

	
 
	
Title:
	
Chief Executive Officer

	 	 	 
	 	 	 
	 	 	 
	 	RICHARD T. MARABITO
	 	(“Executive”)

 

 

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Schedule A 

 

Certain Definitions

 

As used in this Agreement, the following capitalized terms shall have the following meanings: 

 

“Affiliate” of a specified entity means an entity that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the entity specified. 

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time. 

 

“Confidential Information” means confidential business information of the Company and its customers and vendors, without limitation as to when or how Executive may have acquired such information. Such Confidential Information shall include, without limitation, the Company’s sales figures, profit or loss figures or other information related to the Company’s internal financial statements, customers, clients, suppliers, vendors and product information, sources of supply, customer lists or other information, selling and servicing methods and business techniques, product development plans, sales and distribution information, business plans and opportunities, or corporate alliances and other information concerning the Company’s actual or anticipated business or products, or which is received in confidence by or for the Company from any other person. 

 

“Disability” means the inability of Executive for a continuous period of ninety (90) days or for one hundred and eighty (180) days in the aggregate during any twelve (12) month period to perform any material portion of the duties of his position hereunder on an active full-time basis by reason of a disability condition. The Company and Executive acknowledge and agree that the material duties of Executive’s position are unique and critical to the Company and that a disability condition that causes Executive to be unable to perform the essential functions of his position under the circumstances described above will constitute an undue hardship on the Company. Notwithstanding the foregoing, Executive shall not be disabled provided that all of the following conditions have been satisfied: 

 

(a)     after receipt of the Company’s written notice of intent to terminate due to Disability, Executive shall have the right within ten (10) days to dispute the Company’s ability to terminate him under this section; 

 

(b)      within ten (10) days after exercising such right, Executive shall submit to a physical exam by the Chief of Medicine of any major hospital in the metropolitan Cleveland area; 

 

(c)      such physician shall issue his written statement to the effect that in his opinion, based upon his diagnosis, Executive is capable of resuming his employment and devoting his full time and energy in discharging his duties within ten (10) days after the date of such statement; and 

 

 

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(d)      the Executive returns to work on a full-time basis and devotes his energy in discharging his duties.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time. 

 

“Good Cause” means a reasonable determination by the Board made in good faith (without the participation of Executive) of the Company, pursuant to the exercise of its business judgment, that anyone of the following events has occurred: 

 

(a)      Executive is found by the Board to have engaged in (1) willful misconduct, (ii) willful or gross neglect, (iii) fraud, (iv) misappropriation, or (v) embezzlement in the performance of his duties hereunder; 

 

(b)      Executive has materially breached the provisions of Section 6 or any other material provision of this Agreement and fails to cure such breach within ten (l0) days following written notice from the Company specifying such breach which notice from the Company shall be provided within thirty (30) days after said breach; 

 

(c)      Executive is found by the Board to have failed to provide reasonable cooperation with any federal government or other governmental regulatory investigation, the reasonableness of such cooperation to be determined by reference to statutory and regulatory authorities, Federal Sentencing Guidelines, and relevant case law interpretations; 

 

(d)      Executive signs or certifies statements required to be made pursuant to Sarbanes-Oxley Sections 302 and 906, or other similar rules or regulations then in effect, which turn out to be false or inaccurate in any material respect; provided, however, that the Board has made a reasonable determination in good faith that the Executive knew or should have known that such statements were false or inaccurate in any material respect; 

 

(e)      Executive has been indicted by a state or federal grand jury with respect to a felony, a crime of moral turpitude or any crime involving the Company (other than pursuant to actions taken at the direction or with the approval of the Board) and a special committee of the Board, chaired by an outside director appointed by the Chair of the Audit Committee, considers the matter, makes a recommendation to the Board to terminate Executive’s employment for Good Cause, and the Board concurs in that recommendation; or 

 

(f) Executive is found by the Board to have engaged in a material violation of the Code of Conduct of the Company as then in effect. 

 

“Release and Waiver of Claims” means a written release and waiver by Executive, to the fullest extent allowable under applicable law and in form reasonably acceptable to the Company, of all claims, demands, suits, actions, causes of action, damages and rights against the Company and its Affiliates whatsoever which he may have had on account of the termination of his employment, including, without limitation, claims of discrimination, including on the basis of sex, race, age, national origin, religion, or handicapped status, and any and all claims, demands and causes of action for severance or other termination pay. Such Release and Waiver of Claims shall not, however, apply to the obligations of the Company arising under this Agreement, any indemnification agreement between Executive and the Company, any retirement plans, any stock option agreements, COBRA Continuation Coverage or rights of indemnification Executive may have under the Company’s Articles of Incorporation or Code of Regulations (or comparable charter document) or by statute. 

  

“Sarbanes-Oxley” means the Sarbanes-Oxley Act of 2002. 

 

 

14

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