OLYMPIC STEEL INC
EXHIBIT 10.12
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<TYPE>EX-10.12
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<FILENAME>l08664aexv10w12.txt
<DESCRIPTION>EXHIBIT 10.12
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                                                                   EXHIBIT 10.12

                              EMPLOYMENT AGREEMENT

      This EMPLOYMENT AGREEMENT (THE "Agreement"), effective as of July 1, 2004
(the "Effective Date"), by and between OLYMPIC STEEL, INC., an Ohio corporation
("Olympic"), and MICHAEL D. SIEGAL, an individual ("Siegal").

                                    RECITALS:

      WHEREAS, Siegal has served for many years as an executive officer of
Olympic, including serving as Olympic's Chief Executive Officer since 1994; and

      WHEREAS, Olympic desires to assure itself of the continued employment of
Siegal.

      NOW, THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt, adequacy and sufficiency
of which are hereby acknowledged, the Company and Siegal agree as follows:

      1. Term. Olympic hereby employs Siegal and Siegal hereby accepts such
employment, for an initial term commencing on the Effective Date and ending on
December 31, 2006, unless sooner terminated in accordance with the provisions of
Section 4 or Section 5 (the "Initial Term"). Following expiration of the Initial
Term, such employment of Siegal will continue in accordance with the terms of
this Agreement from year to year (each, a "Renewal Term") thereafter (subject to
termination as aforesaid), unless either party notifies the other party in
writing prior to ninety (90) days before the expiration of the Initial Term or
any Renewal Term of its intention to not renew this Agreement (the Initial Term
and any Renewal Term (but not after any termination) being hereinafter
collectively referred to as the "Term").

      2. Duties. Siegal will serve as Chief Executive Officer of Olympic, and
will faithfully perform for Olympic and its subsidiaries the duties of an
executive, managerial or administrative nature as will be specified and
designated from time to time by Olympic's Board of Directors (the "Board of
Directors"). Siegal will devote substantially all of his business time and
effort to the performance of his duties hereunder

      3. Compensation.

            3.1 Salary. (a) During the Term, Olympic will pay Siegal a salary at
the rate of Five Hundred Seventy-Five Thousand Dollars ($575,000) per annum (the
"Annual Salary"). The Annual Salary may be increased by an amount as the
Compensation Committee of the Board of Directors (the "Compensation Committee")
will determine in its sole discretion. The Annual Salary will be payable in
accordance with the Company's standard payroll practices, subject to normal and
customary payroll deductions as may be required pursuant to any applicable law,
or government regulation or ruling.

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            3.2 Benefits. Siegal will be permitted during the Term to
participate in all group life, hospitalization or disability insurance plans,
health programs, retirement plans or similar benefits that are generally
available to other senior executive officers of Olympic (collectively, the
"Benefits"), on the same terms as such other executives, in each case to the
extent that Siegal is eligible under the terms of such plans or programs.

            3.3 Expenses. Olympic will pay or reimburse Siegal for all
reasonable out-of-pocket expenses actually incurred or paid by Siegal during the
Term in the performance of Siegal's services under this Agreement, provided that
Siegal submits to Olympic proof of such expenses, using properly completed forms
as prescribed from time to time by Olympic.

            3.4 Annual Bonus. During the Term, Siegal will be entitled to
participate in Olympic's Senior Management Compensation Program, in such amount
and with such target levels as is determined by the Compensation Committee (the
"Annual Bonus).

      4. Death or Disability.

            4.1 Termination of Employment. If Siegal dies during the Term, this
Agreement and Siegal's employment hereunder will terminate, and the obligations
of Olympic to or with respect to Siegal will terminate in their entirety except
as otherwise provided under this Section 4. If Siegal, by virtue of ill health
or other physical or mental disability, is unable to perform substantially and
continuously any material portion of the duties assigned to him for one hundred
eighty (180) days in the aggregate during any twelve (12) month period, or for
any ninety (90) consecutive days (in each case, a "Disability"), Olympic will
have the right to terminate the employment of Siegal upon notice in writing to
Siegal, provided, however that Siegal will have the right to, within ten (10)
days after receipt of such termination notice, dispute Olympic's ability to
terminate him for Disability under this Section 4.1. Within ten (10) days after
exercising such right, Siegal will submit to a physical examination by the Chief
of Medicine of any major hospital in the metropolitan Cleveland, Ohio area.
Unless such physician issues a written statement within ten (10) days after the
date of such physical examination to the effect that, in such physician's
opinion based on his or her diagnosis, Siegal is capable of resuming his
employment and devoting his full time and energy to discharging his duties
hereunder, Olympic will have the right to terminate Siegal under this Section
4.1 without further dispute.

            4.2 Earned and Accrued Annual Salary, Etc. Upon termination under
Section 4.1, Siegal (or Siegal's estate or beneficiaries in the case of the
death of Siegal) will be entitled to receive any Annual Salary, Annual Bonus and
other Benefits earned and accrued under this Agreement, and reimbursement under
this Agreement for expenses incurred, prior to the date of termination (for
these purposes, if such termination occurs during a fiscal year, the Annual
Bonus for such fiscal year will be prorated based upon the number of days in
such fiscal year which elapsed before such termination, and will be paid at the
time provided for in Section 3.4).

            4.3 Continuation of Annual Salary; Benefits. In addition to the
compensation payable under Section 4.2, upon any termination under Section 4.1,
Siegal

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(or his estate in the case of his death) will be entitled to payments of one (1)
year's Annual Salary, payable in a lump sum. Further, Siegal and/or his
surviving spouse, if any, and minor children (collectively, the "Dependents")
will be eligible to continue to participate in Olympic's health insurance
programs, at the expense of Olympic, for one (1) year after the date of such
termination. After such one-year period, Siegal's Dependents will 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 will limit any of Siegal's
(or his Dependants') rights under any insurance, pension or other benefit
programs of Olympic for which Siegal will be eligible at the time of such death
or Disability. Except as expressly provided in Sections 4.2 and 4.3, in the
event of a termination of Siegal's employment under 4.1, Siegal will have no
further rights, and the Company will have no further liability, under this
Agreement.

      5. Certain Terminations of Employment.

            5.1 Termination for Cause. For purposes of this Agreement, "Cause"
will be deemed to exist if Siegal: (i) is convicted of (or pleads no contest to)
a felony involving an act or acts of dishonesty by Siegal or which resulted or
intended to result directly or indirectly in substantial gain or personal
enrichment at the expense of the Company or is convicted of any crime of moral
turpitude (other than resulting from actions taken at the direction or with the
approval of the Board of Directors); (ii) is found by reasonable determination
of the Board of Directors, made in good faith, to have engaged in: (A) willful
misconduct; (B) willful or gross neglect; (C) fraud; (D) misappropriation; or
(E) embezzlement in the performance of his duties hereunder; or (iii) breaches
in any material respect the terms and provisions of this Agreement and fails to
cure such breach within ten (10) days following written notice from the Company
specifying such breach. Olympic may terminate Siegal's employment hereunder for
Cause on written notice (which notice will specify the reasons for such
termination) given to Siegal at any time following the occurrence of any of the
events described in clauses (i) through (ii) above, and on written notice given
to Siegal at any time not less than 30 days following the occurrence of any of
the events described in clause (iii) above. Upon such termination for Cause,
Siegal will be entitled to receive any Annual Salary, Annual Bonus, and other
Benefits earned and accrued under this Agreement, and reimbursement under this
Agreement for expenses incurred, prior to the date of such termination. Except
as expressly provided in this Section 5.1, in the event of a termination of
Siegal's employment for Cause, Siegal will have no further rights, and the
Company will have no further liability, under this Agreement.

            5.2 Termination by Olympic Without Cause. During the Term, Olympic
may terminate Siegal's employment hereunder for any reason on at least thirty
(30) days' written notice given to Siegal. If Olympic so terminates Siegal
during the Term, other than pursuant to Section 4, Section 5.1 (and other than
in the case of a non-renewal of the Term under Section 5.3), then Siegal will be
entitled to receive any Annual Salary, Annual Bonus, other Benefits earned and
accrued under this Agreement, and reimbursement under this Agreement for
expenses incurred, prior to the date of such termination. In addition, during
the period ending on the later of (i) the termination of

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this Agreement, or (ii) one year following the date of any such termination
under this Section 5.2, Siegal will also be entitled to:

            (A) continue to receive the Annual Salary payable in the amounts and
      at the times provided for in Section 3.1 as if such employment had not
      otherwise been so terminated;

            (B) continue to receive the Annual Bonus (if any) payable at the
      times provided for in Section 3.4 as if such employment had not otherwise
      been so terminated; and

            (C) continue to receive any Benefits to which Siegal is otherwise
      entitled hereunder on substantially the same terms and conditions;
      provided, however, that such continuation of Benefits will not be required
      hereunder to the extent that Siegal 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 Siegal's services.

      Except as expressly provided in this Section 5.2, in the event of a
termination of Siegal's employment under this Section 5.2, Siegal will have no
further rights, and the Company will have no further liability, under this
Agreement.

            5.3 Non-Renewal. Upon Olympic's notification to Siegal of its
intention not to renew this Agreement pursuant to Section 1, this Agreement and
Siegal's employment hereunder will terminate at the end of the then-occurring
Initial Term or Renewal Term, as applicable. If Olympic elects not to renew this
Agreement, then Siegal will be entitled to receive any Annual Salary, Annual
Bonus, other Benefits earned and accrued under this Agreement, and reimbursement
under this Agreement for expenses incurred, prior to the date of such
termination. In addition, during the one (1) year period immediately following
the date of any such termination under this Section 5.3, Siegal will also be
entitled to: (A) continue to receive the Annual Salary payable in the amounts
and at the times provided for in Section 3.1 as if such employment had not
otherwise been so terminated; and (B) continue to receive any Benefits to which
Siegal is otherwise entitled hereunder on substantially the same terms and
conditions; provided, however, that such continuation of Benefits will not be
required hereunder to the extent that Siegal 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 Siegal's services. Except as
expressly provided in this Section 5.3, in the event of a termination of
Siegal's employment under this Section 5.3, Siegal will have no further rights,
and the Company will have no further liability, under this Agreement.

      6. Non-Competition. During the period (the "Restrictive Period") ending
one (1) year following the date of Siegal's termination of employment for
whatever reason (the "Termination Date"), Siegal will not become a principal of
or assume control of, and

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will not take a management, consultant, or other position with: (i) any steel
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;
provided, however, that nothing in this Section 6 will preclude ownership by
Siegal of less than five percent (5%) of the equity of a corporation, limited
liability company or other business entity, and that such ownership standing
alone, will not be deemed competition with the Company within the meaning of
this Section 6.

      7. Non-Solicitation; Non-Hire. During the Restrictive Period, Siegal will
not, directly, indirectly or through an affiliate: (a) solicit, divert, take
away or attempt to solicit, divert or take away any of Olympic or any of its
subsidiaries' customers, distributors, or suppliers; or (b) hire any employee
who has left the employment of Olympic or its subsidiaries after the Effective
Date within one year of the termination of such employee's employment with
Olympic or one of its subsidiaries.

      8. Confidentiality. During the Term and all periods thereafter, Siegal
will keep secret and retain in strictest confidence, and will not use for his
benefit or the benefit of others, except in connection with the business and
affairs of Olympic and its subsidiaries, all confidential matters relating to
the business of Olympic and its subsidiaries learned by Siegal during his
employment by Olympic, including, without limitation, information with respect
to: (a) sales figures; (b) profit or loss figures; and (c) customers, clients,
suppliers, sources of supply and customer lists (collectively, the "Confidential
Company Information"). Siegal will not disclose the Confidential Company
Information to anyone outside of Olympic or its subsidiaries except with
Olympic's express written consent, except for Confidential Company Information
which: (1) is at the time of receipt or thereafter becomes publicly known
through no wrongful act of Siegal; or (2) is received from a third party not
under an obligation to keep such information confidential and without breach of
this Agreement. All memoranda, notes, lists, records and other documents (and
all copies thereof) made or compiled by Siegal or made available to Siegal
concerning the business of Olympic and its subsidiaries will be Olympic's
property and will be delivered to Olympic at any time on request.

      9. Rights and Remedies upon Breach. If Siegal breaches, or threatens to
commit a breach of, any of the provisions of Sections 6, 7 and/or 8
(collectively, the "Restrictive Covenants"), Olympic and/or its subsidiaries
will have, in addition to any and all other rights at law, and equity, the right
and remedy to have the Restrictive Covenants specifically enforced (without
posting bond) by any court having equity jurisdiction, including, without
limitation, the right to an entry against Siegal of restraining orders and
injunctions (preliminary, mandatory, temporary and permanent) against
violations, threatened or actual, and whether or not then continuing, of such
Restrictive Covenants. Siegal acknowledges and agrees that the Restrictive
Covenants are reasonable in geographical and temporal scope and in all other
respects, that any such

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breach or threatened breach of the Restrictive Covenants will cause irreparable
injury to Olympic, and that money damages will not provide an adequate remedy to
Olympic in the event of any such breach or threatened breach.

      10. Other Provisions.

            10.1 Severability. If it is determined that any of the provisions of
this Agreement, including, without limitation, any of the Restrictive Covenants,
or any part thereof, is invalid or unenforceable, the remainder of the
provisions of this Agreement will not thereby be affected and will be given full
effect, without regard to the invalid portions.

            10.2 Blue-Penciling. If any court determines that any of the
covenants contained in this Agreement, including, without limitation, any of the
Restrictive Covenants or any part thereof, is unenforceable because of the
duration or scope of such provision, then, after such determination has become
final and unappealable, the duration or scope of such provision, as the case may
be, will be reduced so that such provision becomes enforceable and, in its
reduced form, such provision will then be enforceable and will be enforced.

            10.3 Enforceability; Jurisdiction. Olympic and Siegal intend to and
hereby confer jurisdiction to enforce the Restrictive Covenants upon the courts
of any jurisdiction within the geographical scope of the Restrictive Covenants.
If the courts of any one or more of such jurisdictions hold the Restrictive
Covenants wholly unenforceable by reason of breadth of scope or otherwise, it is
the intention of Olympic and Siegal that such determination not bar or in any
way affect Olympic's right or the right of its subsidiaries to the relief
provided above in the courts of any other jurisdiction within the geographical
scope of such Restrictive Covenants, such Restrictive Covenants as they relate
to each jurisdiction being, for this purpose, severable, diverse and independent
covenants.

            10.4 Notices. Any notice or other communication required or
permitted hereunder will be in writing and will be delivered personally,
telegraphed, telexed, sent by facsimile transmission or sent by certified,
registered or express mail, postage prepaid. Any such notice will be deemed
given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, five days after the date of deposit in the United
States mails as follows:

                  (i) If to Olympic, to:

                        Olympic Steel, Inc.
                        5096 Richmond Road
                        Bedford, Ohio 44146
                        Attention:     Chairperson of the Compensation Committee
                                       of the Board of Directors

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                        With a copy to:

                        Marc H. Morgenstern, Esq.
                        Kahn Kleinman, LPA
                        1301 East Ninth Street, Suite 2600
                        Cleveland, Ohio 44114-1824

                  (ii) If to Siegal to:

                        Michael D. Siegal
                        921 West Hill Drive
                        Gates Mills, Ohio 44040

Any such person may by notice given in accordance with this Section to the other
parties hereto designate another address or person for receipt by such person of
notices hereunder.

            10.5 Entire Agreement.This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements, written or oral, with the exception of the Management
Retention Agreement entered into by and between Olympic and Siegal on or about
April 20, 2000, which shall remain in full force and effect. In the event of any
conflict between this Agreement and the Management Retention Agreement, the
terms of the Management Retention Agreement shall prevail.

            10.6 Waivers and Amendments. This Agreement may be amended,
superseded, canceled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by the parties or, in the case of a waiver,
by the party waiving compliance. No delay on the part of any part in exercising
any right, power or privilege hereunder will operate as a waiver thereof, nor
will any waiver on the part of any party of any such right, power or privilege
nor any single or partial exercise of any such right, power or privilege,
preclude any other or further exercise thereof or the exercise of any other such
right, power or privilege.

            10.7 Governing Law. This Agreement will be governed by, and
construed in accordance with, the laws of the State of Ohio without regard to
principles of conflicts of law.

            10.8 Assignment. This Agreement, and Siegal's rights and obligations
hereunder, may not be assigned by Siegal, and any purported assignment by Siegal
in violation hereof will be null and void. In the event of any sale, transfer or
other disposition of all or substantially all of Olympic's assets or business,
whether by merger, consolidation or otherwise, Olympic may assign this Agreement
and its rights hereunder.

            10.9 Binding Effect. This Agreement will be binding upon and inure
to the benefit of the parties and their respective successors, permitted
assigns, heirs, executors and legal representatives.

            10.10 Counterparts. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
will be an

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original but all such counterparts together will constitute one and
the same instrument. Each counterpart may consist of two copies hereof each
signed by one of the parties hereto.

            10.11 Headings. The headings in this Agreement are for reference
only and will not affect the interpretation of this Agreement.

      IN WITNESS WHEREOF, the parties hereto have signed their names on the
Effective Date.

                            "OLYMPIC"

                            OLYMPIC STEEL, INC.

                            By:_________________________________________
                            Print Name:  David A. Wolfort
                            Its:  President and Chief Operating Officer

                            "SIEGAL"

                            ____________________________________________
                            Michael D. Siegal

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