EMPLOYMENT AGREEMENT
Exhibit
10.1
THIS
EMPLOYMENT AGREEMENT is
made
as of the 1st
day of
May, 2006, by and between Century Aluminum Company, a Delaware corporation
(the
“Company”),
and
Xxxxxx X. Xxxxxxx (the “Executive”).
RECITALS
A. The
Company desires to employ Executive as its Executive Vice President, General
Counsel and Secretary; and
B. Executive
is willing to accept such employment on the terms and conditions set forth
in
this Agreement.
THE
PARTIES AGREE as follows:
1.1 Position
and Term of Employment.
Executive’s employment hereunder shall commence as of May 1, 2006, and shall end
December 31, 2008, unless terminated sooner pursuant to Section 7 of this
Agreement or extended by the mutual agreement of the parties. Executive shall
be
employed as the Executive Vice President, General Counsel and Secretary of
the
Company and shall devote his full business time, skill, attention and best
efforts in carrying out his duties and promoting the best interests of the
Company. Executive shall also serve as a director and/or officer of one or
more
of the Company’s subsidiaries as may be requested from time to time by the Board
of Directors. Subject always to the instructions and control of the Board
of
Directors of the Company, Executive shall report to the Chief Executive Officer
of the Company and shall be responsible for all legal matters and the day
to day
administrative affairs of the Company.
Executive
shall not at any time while employed by the Company or any of its affiliates
(as
defined in the Severance Protection Agreement between the Company and Executive
dated as of May 1, 2006, (the “SPA”),
incorporated in this Agreement by this reference), without the prior consent
of
the Board of Directors, knowingly acquire any financial interests, directly
or
indirectly, in or perform any services for or on behalf of any business,
person
or enterprise which undertakes any business in substantial competition with
the
business of the Company and its affiliates or sells to or buys from or otherwise
transacts business with the Company and its affiliates; provided that Executive
may acquire and own a de minimus amount of the outstanding capital stock
of any
public corporation which sells or buys from or otherwise transacts business
with
the Company and its affiliates.
2.1 Base
Salary.
(a)
(i) Effective
as of May 1, 2006, Executive shall be paid an initial salary at the monthly
rate
of $29,166.67, which shall be paid in accordance with the Company’s normal
payroll practice with respect to salaried employees, subject to applicable
payroll taxes and deductions (the “Base
Salary”).
Executive’s Base Salary shall be subject to review and possible change in
accordance with the usual practices and policies of the Company. However,
Executive’s base annual salary shall not be reduced to less than
$350,000.
-2-
(ii) If
for
any reason other than Executive’s voluntary resignation, his death, or
termination for cause pursuant to Section 7(c), Executive does not continue
to
be employed by the Company, Executive shall continue to receive an amount
equal
to his then current Base Salary plus an annual performance bonus equal to
the
highest annual bonus payment Executive has received in the previous three
years
(“Highest
Annual Bonus”)
for
the then remaining balance of the term of this Agreement. In no event shall
such
payment be less than one year’s Base Salary plus Highest Annual Bonus. The
foregoing amounts shall be paid to Executive over the remaining term of this
Agreement or one year (whichever is applicable) in accordance with the Company’s
payroll and bonus payment policies. Notwithstanding the foregoing, no payments
under this subparagraph (ii) shall be made if the Company makes all payments
to
Executive required to be made, if any, under the SPA in the event of a Change
in
Control (as defined in the SPA).
(b) If
Executive resigns voluntarily or ceases to be employed by reason of his death
or
by the Company (or any affiliate) for cause as described in Section 7(c)
of this
Agreement, all benefits described in Sections 2 and 4 hereof shall terminate
(except to the extent previously earned or vested).
(c) If
Executive’s employment shall have been terminated as a result of Executive’s
disability pursuant to Section 7(b), the Company shall pay in equal monthly
installments for the then remaining balance of the term of this Agreement
or one
year, whichever is greater, to Executive (or his beneficiaries or personal
representatives, as the case may be) disability benefits at a rate per annum
equal to 100% of his then current Base Salary, plus amounts equal to the
Highest
Annual Bonus, less payments and benefits, if any, received under any disability
plan or insurance provided by the Company and less any “sick leave” payments
received from the Company for the applicable period.
-3-
2.2 Bonuses.
Executive shall be eligible for an annual performance bonus in amounts between
0
and 100 percent of his Base Salary based upon his individual performance
and
achievement by the Company of overall objectives as determined by the
compensation committee of the Board of Directors (“Compensation
Committee”).
The
target range for Executive’s performance bonus will be between 50% and 100% of
his base salary. The Company agrees that Executive shall be entitled to receive
a cash bonus of not less than $122,500 for his services for the full year
2006,
which shall be payable in the 2007 calendar year.
2.3 Expenses.
The
Company shall pay or reimburse Executive in accordance with the Company’s normal
practices any travel, hotel and other expenses or disbursements reasonably
incurred or paid by Executive hereunder in connection with the services
performed by Executive, in each case upon presentation by Executive of itemized
accounts of such expenditures or such other supporting information as the
Company may require.
3.1 Incentive
Plan.
Executive shall be eligible for option grants and performance share unit
awards
under the Company’s Amended and Restated 1996 Stock Incentive Plan (the
“Plan”),
and
the Guidelines adopted to implement the Plan. Upon approval by the Compensation
Committee, the Company shall grant Executive options to purchase 25,000 shares
of Company stock at an exercise price based on the price of the stock on
the
trading day immediately preceding the start date (“Start
Date”)
of his
employment, determined in accordance with the Plan and pursuant to a stock
option award agreement. The options would vest one-third on the Start Date,
one-third on the one year anniversary of the Start Date, and one-third on
the
two year anniversary of the Start Date. In addition the Compensation Committee
shall be asked to approve a grant of 15,000 restricted stock shares, which
grant
will vest one-third on the one year anniversary of the Start Date, one-third
on
the two year anniversary of the Start Date, and one-third on the three year
anniversary of the Start Date.
-4-
3.2 Effect
of Termination of Employment or Change in Control.
(a)
If
Executive shall resign voluntarily or cease to be employed by the Company
(or an
affiliate) for cause as described in Section 7(c) of this Agreement, except
as
provided in the SPA, all benefits described in Section 3 hereof shall terminate
(except to the extent previously earned or vested and, if Executive retires,
those which may become vested upon retirement pursuant to the terms of the
Guidelines).
(b)
If
Executive dies or becomes disabled, all options which have not vested will
accelerate and vest immediately, and, in the event of Executive’s death, all
option rights will transfer to Executive’s representative. If Executive’s
employment terminates by reason of death or disability, Executive or Executive’s
representative may exercise all unexercised options within three years after
such death or disability or the expiration date of the option, whichever
is
sooner.
(c)
If
Executive dies, becomes disabled or retires, performance shares awarded to
such
Executive pursuant to the Guidelines shall immediately vest, but be valued
and
awarded at the times and in the manner awarded to other plan participants
pursuant to the terms of such Guidelines.
-5-
(d) If
there
is a Change in Control, then all options and performance shares that have
not
vested will accelerate and vest immediately. Performance shares awarded to
Executive pursuant to the Guidelines shall be valued at 100 percent as though
the Company had achieved its target for each relevant plan period. The Executive
shall be entitled to receive one share of the Company’s common stock upon the
vesting of each Performance Share. Upon a Change in Control, the Executive
shall
have the right to require the Company to purchase, for cash, and at fair
market
value, any shares of stock purchased upon exercise of any option or received
upon the vesting of any Performance Share. (Terms used in this Section, unless
defined in this Employment Agreement, are as defined in the SPA.)
4.1 Other
Benefits.
Executive shall be entitled to participate in life, medical, dental,
hospitalization, disability and life insurance benefit plans made available
by
the Company to its senior executives and shall also be eligible to participate
in existing retirement or pension plans offered by the Company to its senior
executives, but, except as otherwise provided in Section 4.2, subject in
each
case to the terms and requirements of each such plan or program;
and
4.2 Pension
Benefits.
Executive shall be entitled to receive retirement benefits as
follows:
-6-
(a) Qualified
Plan Benefits.
The
Executive shall be entitled to receive, upon his retirement as provided for
in
the Company’s Employees’ Retirement Plan (the “Qualified
Plan”),
payments under the Qualified Plan computed as set forth in that
plan.
(b) Supplemental
Executive Retirement Benefits.
In
addition to payments the Executive is entitled to receive under the Qualified
Plan, Executive also shall be entitled to receive Supplemental Executive
Benefits as set forth in this Agreement and in the SERB Plan, which benefits
are
an amount equal to the difference between the amount Executive would receive
under the Qualified Plan and the amount he would be entitled to receive had
his
benefit under the Qualified Plan not been subject to the limitations on benefits
and contributions set forth in Sections 401 (a)(17) and 415 of the Internal
Revenue Code of 1986, as at any time amended, and the regulations
thereunder.
(c) Vesting.
The
Qualified Plan Benefits and the Supplemental Retirement Benefit described
in
Section 4.2 (b) shall be fully vested as of the date of this Agreement. Upon
the
termination of Executive’s employment he shall be entitled to receive all such
benefits as provided in Section 4.2 (d).
(d) Time
and Method of Payment of Benefits.
Benefit
payments under the SERB Plan shall be made to Executive in the same manner
as
provided under the Qualified Plans. Except as otherwise provided in the
Qualified Plans, no benefits shall be payable hereunder prior to death,
disability or termination of employment.
(e) Prohibition
on Assignment.
Other
than pursuant to the laws of descent and distribution, Executive’s right to
benefit payments under this Section 4.2 are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment or garnishment by creditors of Executive or Executive’s
beneficiary.
-7-
(f) Source
of Payments.
Subject
to Section 10 of the SERB Plan (“Section
10”),
all
benefits under this Section 4.2 shall be paid in cash from the general funds
of
the Company, and, except as set forth below, no special or separate fund
shall
be established or other segregation of assets made to assure such payments;
provided, however, that the Company may establish a bookkeeping reserve to
meet
its obligations hereunder. It is the intention of the parties that the
arrangements be unfunded for tax purposes and for purposes of
Title
I of the
Employee Retirement Income Security Act of 1974. In the event of a possible
Change in Control, and before a Change in Control occurs, the Company shall
contribute to the Trust described in Section 10, and in the manner described
therein, those amounts necessary to cause the present value of the Trust
assets
to be no less than the present value of the future benefits payable under
the
SERB Plan.
(g) Executive’s
Status.
Executive shall have the status of a general unsecured creditor of the Company,
and the SERB Plan shall constitute a mere promise to make benefit payments
in
the future.
(h) Survival
of Benefit.
The
Supplemental Retirement benefits described in this Section 4.2 shall not
be
reduced during the term of this Agreement or thereafter, and Executive’s rights
with respect to these benefits shall survive any termination (or non-renewal)
of
this Agreement, including, without limitation, a termination pursuant to
Section
7(c), or any amendment or termination of the SERB Plan, to the full extent
necessary to protect the interests of Executive under this Agreement and
under
the terms of the SERB Plan.
-8-
5. Confidential
Information.
Except
as specifically permitted by this Section 5, and except as required in the
course of his employment with the Company, while in the employ of the Company
or
thereafter, Executive will not communicate or divulge to or use for the benefit
of himself or any other person, firm, association, or corporation without
the
prior written consent of the Company, any Confidential Information (as defined
herein) owned, or used by the Company or any of its affiliates that may be
communicated to, acquired by or learned of by Executive in the course of,
or as
a result of, Executive’s employment with the Company or any of its affiliates.
All Confidential Information relating to the business of the Company or any
of
its affiliates which Executive shall use or prepare or come into contact
with
shall become and remain the sole property of the Company or its
affiliates.
“Confidential
Information” means information not generally known about the Company and its
affiliates, services and products, whether written or not, including information
relating to research, development, purchasing, marketing plans, computer
software or programs, any copyrightable material, trade secrets and proprietary
information, including, but not limited to, customer lists.
Executive
may disclose Confidential Information to the extent it (i) becomes part of
the
public domain otherwise than as a result of Executive’s breach hereof or (ii) is
required to be disclosed by law. If Executive is required by applicable law
or
regulation or by legal process to disclose any Confidential Information,
Executive will provide the Company with prompt notice thereof so as to enable
the Company to seek an appropriate protective order.
-9-
Upon
request by the Company, Executive agrees to deliver to the Company at the
termination of Executive’s employment, or at such other times as the Company may
request, all memoranda, notes, plans, records, reports and other documents
(and
all copies thereof) containing Confidential Information that Executive may
then
possess or have under his control.
6. Assignment
of Patents and Copyrights.
Executive shall assign to the Company all inventions and improvements within
the
existing or contemplated scope of the Company’s business made by Executive while
in the Company’s employ, together with any such patents or copyrights as may be
obtained thereon, both domestic and foreign. Upon request by the Company
and at
the Company’s expense, Executive will at any time during his employment with the
Company and after termination regardless of the reason therefore, execute
all
proper papers for use in applying for, obtaining and maintaining such domestic
and foreign patents and/or copyrights as the Company may desire, and will
execute and deliver all proper assignments therefore.
7. Termination.
(a)
This
Agreement shall terminate upon Executive’s death.
(b)
The
Company may terminate Executive’s employment hereunder upon 15 days’ written
notice if in the opinion of the Board of Directors, Executive’s physical or
mental disability has continued or is expected to continue for 180 consecutive
days and as a result thereof, Executive will be unable to continue the proper
performance of his duties hereunder. For the purpose of determining disability,
Executive agrees to submit to such reasonable physical and mental examinations,
if any, as the Board of Directors may request and hereby authorizes the
examining person to disclose his findings to the Board of Directors of the
Company.
-10-
(c)
The
Company may terminate Executive’s employment hereunder “for cause” (as
hereinafter defined). If Executive’s employment is terminated for cause,
Executive’s salary and all other rights not then vested under this Agreement
shall terminate upon written notice of termination being given to Executive.
As
used herein, the term “for cause” means the occurrence of any of the
following:
(i)
Executive’s
disregard of a direct, material order of the Board of Directors of the Company,
the substance of which order is (a) a proper duty of Executive pursuant to
this
Agreement, (b) permitted by law and (c) otherwise permitted by this Agreement,
which disregard continues after 15 days’ opportunity and failure to cure;
or
(ii)
Executive’s
conviction for a felony or any crime involving moral turpitude.
8. Additional
Remedies.
Executive recognizes that irreparable injury will result to the Company and
to
its business and properties in the event of any breach by Executive of the
non-compete provisions of Section 1, the confidentiality provisions of Section
5
or the assignment provisions of Section 6 and that Executive’s continued
employment is predicated on the covenants made by him pursuant to such Sections.
In the event of any breach by Executive of his obligations under said
provisions, the Company shall be entitled, in addition to any other remedies
and
damages available, to injunctive relief to restrain any such breach by Executive
or by any person or persons acting for or with Executive in any capacity
whatsoever and other equitable relief.
-11-
9. Successors
and Assigns.
This
Agreement is intended to bind and inure to the benefit of and be enforceable
by
Executive and the Company and their respective legal representatives, successors
and assigns. Neither this Agreement nor any of the duties or obligations
hereunder shall be assignable by Executive.
10. Governing
Law; Jurisdiction.
This
Agreement shall be interpreted and construed in accordance with the laws
of the
State of California. Each of the Company and Executive consents to the
jurisdiction of any state or federal
court sitting in California, in any action or proceeding arising out of or
relating to this Agreement.
11. Headings.
The
paragraph headings used in this Agreement are for convenience of reference
only
and shall not constitute a part of this Agreement for any purpose or in any
way
affect the interpretation of this Agreement.
12. Severability.
If any
provision, paragraph or subparagraph of this Agreement is adjudged by any
court
to be void or unenforceable in whole or in part, this adjudication shall
not
affect the validity of the remainder of this Agreement.
13. Complete
Agreement.
This
Agreement and the SPA embody the complete agreement and understanding among
the
parties, written or oral, which may have related to the subject matter hereof
in
any way and neither shall be amended orally, but only by the mutual agreement
of
the parties in writing, specifically referencing this Agreement or the SPA,
as
the case may be. To the extent there is an inconsistency between the terms
of
this Agreement and the terms of the SPA, the Agreement which provides terms
most
favorable to the Executive shall govern.
-12-
14. Counterparts.
This
Agreement may be executed in one or more separate counterparts, all of which
taken together shall constitute one and the same Agreement.
CENTURY
ALUMINUM COMPANY
|
By:
|
/s/ Xxxxx Xxxxxx |
|
/s/ Xxxxxx X. Xxxxxxx | |
| Xxxxxx X. Xxxxxxx | ||||
Title: President
and Chief Executive Officer
-13-
