AMENDED AND RESTATED NON-EXCLUSIVE CONSULTING AGREEMENT
Exhibit 10.1
AMENDED AND RESTATED NON-EXCLUSIVE CONSULTING AGREEMENT
This Amended and Restated Non-Exclusive Consulting Agreement (“Agreement”) is entered into and
effective as of the 26th of April, 2006, to amend and restate the Non-Exclusive
Consulting Agreement entered into effective as of the 16th day of August, 2005, between Xxxxxx X.
Xxxxx (“Consultant” or “Xxxxx”), and Xxxxxx Aluminum & Chemical Corporation, a corporation with
offices located at 00000 Xxxxxxx Xxxxxxx, #000, Xxxxxxxx Xxxxx, XX 00000-0000 (“Kaiser”).
WHEREAS, effective August 15, 2005, Kaiser has terminated Consultant as a Kaiser employee
“Without Cause,” and such termination constitutes a “Pro-Rating Event” for the purposes of
determining Consultant’s entitlement to severance and termination benefits under the Key Employment
Retention Program (“KERP”) approved by the Bankruptcy Court in Xxxxxx’x chapter 11 proceedings,
including Consultant’s Severance Agreement, Retention Agreement and Change in Control Severance
Agreement (a summary listing of such benefits and the references thereto is attached to this
Agreement and incorporated herein by reference); and
WHEREAS, Consultant acknowledges that as a result of termination of Consultant’s employment
Consultant is not entitled to any benefits under his Change in Control Severance Agreement (the
“CIC Agreement”) and, in recognition of the foregoing, has, by execution of this Agreement,
permanently waived and released Kaiser from and against any and all claims for “Change in Control”
and “Tax Gross-Up” termination benefits in connection with the KERP, including any claims for
benefits under his CIC Agreement; and
WHEREAS, Kaiser desires to have Consultant perform certain services for Kaiser as set forth
herein, and Consultant is willing to perform such services;
NOW THEREFORE, in consideration of the mutual promises contained herein the parties hereto
agree as follows:
| 1. | Term |
The term of this Agreement shall commence as of August 1, 2005 and shall continue in effect
through June 30, 2006. Termination of this Agreement, except for cause, before June 30, 2006, may
occur only by mutual consent or the death or permanent and total disability of Consultant as a
result of bodily injury, disease or mental disorder. This Agreement may be renewed for such term,
and upon such terms and conditions, as the parties may agree in a further writing.
| 2. | Services |
2.1 Consultant shall perform non-exclusive consulting services for Kaiser primarily in the
nature of the services provided when consultant was Chief Restructuring Officer and Senior Vice
President of Kaiser, which employment ended on August 15, 2005. A listing of subject areas in which
Kaiser and Consultant have agreed that Consultant will provide services to the Company is attached
to this Agreement and incorporated herein by reference. To the extent any services will not be
completed by the expiration of the term of this Agreement and Consultant and Kaiser have not agreed
to the terms of an extension, Consultant shall fully cooperate with Kaiser in all matters relating
to the winding up of Consultant’s pending work on behalf of Kaiser and the orderly transfer of any
such pending work to other employees or representatives of Kaiser as may be designated by Kaiser.
2.2 Any additional services by Consultant beyond those referenced in paragraph 2.1 above shall
be performed by Consultant as agreed between Consultant and Kaiser and as authorized by Xxxxxx’x
CEO, Xxxx X. Xxxxxxx, or such other person as Consultant may agree.
2.3 Consultant shall at all times act in accordance with his own best judgment, experience and
expertise as an independent Consultant. Consultant shall routinely communicate the status and
progress of the services being performed by Consultant to Xxxxxx’x CEO, General Counsel, CFO,
senior management and outside professionals, as appropriate, and solicit input and direction with
respect to tactical and strategic decisions required to be made in connection with the services to
be performed that are likely to affect the business, operations or liabilities of Kaiser and its
affiliates both during and after emergence.
2.4 Consultant may perform consulting services for persons other than Kaiser so long as such
other consulting services do not present an actual conflict of interest for Consultant. Consultant
agrees to inform Kaiser when consulting services are being performed for others, and will provide a
certification that no conflict exists. Consultant will use his best efforts to arrange his schedule
and other work to ensure that Kaiser work remains a priority for Consultant’s work, resources and
time. Should Consultant request a waiver of any potential conflict with respect to either interest
or time, Kaiser will not unreasonably withhold its consent to waiver.
2.5 Upon the effective date of Xxxxxx’x plan of reorganization and its emergence from Chapter
11, Consultant will resign as Chief Restructuring Officer of Kaiser and the delegation of authority
granted to Consultant shall terminate and be of no further force or effect. Except as set forth in
the preceding sentence, Xxxxxx’x emergence from Chapter 11 will have no effect on this Agreement or
the consulting services to be performed.
| 3. | Fees and Reimbursements/Invoices |
3.1 For the initial term of the Agreement (through February 14, 2006),
Consultant’scompensation will be as follows:
3.1.1 A base fee of $43,200 per month (“Base Fee”), exclusive of expenses, for which
Consultant will provide up to 120 hours of services. Travel time that is not covered by other work
will be counted at one-half the number of hours, and there will be no premium for weekend or
holiday work. This amount will be pro-rated for the partial months of August 2005 and February
2006.
3.1.2 Monthly hours worked in excess of 120, up to a maximum of 200 (“Additional Fee”),
exclusive of expenses, will be billed at $360 per hour, subject to the same terms and conditions
for travel, weekend and holiday work as provided in paragraph 3.1.1.
3.1.3 Regardless of the number of hours actually worked in any month, Consultant agrees that
Kaiser will not be charged for any work in excess of 200 hours per month, exclusive of expenses.
3.2 After the initial term of the Agreement, Consultant’s compensation will be as
follows:
3.2.1 The prorated Base Fee for February 15, 2006, through February 28, 2006, shall be
$22,500, exclusive of expenses, for which Consultant will provide up to 50 hours of services.
Travel time that is not covered by other work will be counted at one-half the number of hours, and
there will be no premium for weekend or holiday work. The Additional Fee during this period for
hours worked in excess of 50, up to a maximum of 75, exclusive of expenses, will be billed at $450
per hour, subject to the same terms and conditions for travel, weekend and holiday work as provided
above.
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3.2.2 The prorated Base Fee for March 1, 2006, through March 31, 2006, shall be $33,750,
exclusive of expenses, for which Consultant will provide up to 75 hours of services. Travel time
that is not covered by other work will be counted at one-half the number of hours, and there will
be no premium for weekend or holiday work. The Additional Fee during this period for hours worked
in excess of 75, up to a maximum of 100, exclusive of expenses, will be billed at $450 per hour,
subject to the same terms and conditions for travel, weekend and holiday work as provided above.
3.2.3 The prorated Base Fee for April 1, 2006, through April 30, 2006, shall be $22,500,
exclusive of expenses, for which Consultant will provide up to 50 hours of services. Travel time
that is not covered by other work will be counted at one-half the number of hours, and there will
be no premium for weekend or holiday work. The Additional Fee during this period for hours worked
in excess of 50, up to a maximum of 75, exclusive of expenses, will be billed at $450 per hour,
subject to the same terms and conditions for travel, weekend and holiday work as provided above.
3.2.4 The prorated Base Fee for May 1, 2006 through June 30, 2006, shall be $22,500 monthly,
exclusive of expenses, for which Consultant will provide up to 50 hours of services per month.
Travel time that is not covered by other work will be counted at one-half the number of hours, and
there will be no premium for weekend or holiday work. The Additional Fee during this period for
hours worked in excess of 50 per month, up to a maximum of 75 hours per month, exclusive of
expenses, will be billed at $450 per hour, subject to the same terms and conditions for travel,
weekend and holiday work as provided above.
3.3 Both parties agree that Consultant is not an employee for state or federal tax purposes.
Consultant shall be solely responsible for payment of all FICA and federal, state and local income
taxes payable on compensation received hereunder. All travel time in connection with this Agreement
will be prorated as required and compensated at the above rates. In addition, upon submission of
proper documentation, Kaiser will reimburse Consultant for all reasonable and customary expenses
incurred while providing consulting services. The term “reasonable and customary” shall mean
expenses incurred consistent with Xxxxxx’x corporate policies on reimbursement of travel and
related expenses and also include costs for telephone, fax and mobile phone charges when used for
Kaiser business, but shall not include any costs or expenses incurred by Consultant to provide his
own working environment (office space, parking, etc.).
3.4 Consultant’s compensation and expense reimbursement shall be paid as follows:
3.4.1 Beginning in September 2005 and each month thereafter during the term of the Agreement,
Consultant’s Base Fee will be paid automatically by Kaiser by wire transfer monthly on the first
business day between the first and fifth day of the month.
3.4.2 Beginning in September 2005 and each month thereafter during the term of the Agreement,
by the fifth day of the month, Consultant will provide an invoice for the previous month that
provides a summary of time and activities as to the Base Fee, and a reasonably detailed description
of services and time, rounded up to the nearest tenth of the hour for any Additional Fee earned
during the previous month. Consultant will also submit a reasonably detailed schedule of expenses
for reimbursement including receipts. Bills and receipts may be submitted electronically.
3.4.3 Statements for services and requests for expense reimbursement shall be submitted to
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Xxxxxx. X. Xxxxx | |
Xxxxxx Aluminum & Chemical Corp
Attn: Xxxx X. Xxxxxx, Vice President and General Counsel
00000 Xxxxxxx Xxxxxxx, #000
Xxxxxxxx Xxxxx, XX 00000-0000
Fax: (000) 000-0000
xxxx.xxxxxx@xxxxxxxxxxxxxx.xxx
Attn: Xxxx X. Xxxxxx, Vice President and General Counsel
00000 Xxxxxxx Xxxxxxx, #000
Xxxxxxxx Xxxxx, XX 00000-0000
Fax: (000) 000-0000
xxxx.xxxxxx@xxxxxxxxxxxxxx.xxx
3.4.4 Kaiser will promptly review the statements submitted with respect to the Additional Fee
and requests for expense reimbursement, and will pay all undisputed Additional Fee and expense
reimbursement amounts within 30 days of Xxxxxx’x receipt of such statement. Kaiser may request
additional information concerning the content of the Base Fee description and time but may not
withhold payment of the Base Fee. Questions regarding any Additional Fee and/or expenses will be
addressed promptly with a view toward reaching an agreement, and payment for any questioned
Additional Fee and/or expense amounts will be paid on the later of 30 days after the statement was
received or 10 days after the questions are resolved.
| 4. | Independent Contractor |
4.1 Consultant shall perform services hereunder as an independent contractor and not as an
employee. He shall have no power or authority to act for, legally represent, or commit Kaiser in
any way unless Kaiser expressly authorizes him to do so.
4.2 Consultant understands and agrees that during the period of this Agreement and any
extensions thereto he is not entitled to participate in or accrue benefits, and Consultant hereby
expressly waives any claim to participate in or accrue benefits, under Xxxxxx’x employee benefit
plans, including but not limited to KRP, Plan B, Severance Pay and Benefits Continuation, Personal
Choice, Life Insurance, Sick Leave with Salary Continuation, Long Term Disability, Accidental Death
and Dismemberment, Medical and Dental plans for services performed hereunder, except as he is
entitled to receive any such benefits as a result of his termination without cause as an employee
on August 15, 2005. For the avoidance of doubt, the parties agree that any and all benefits to
which Consultant may be entitled must derive, if at all, from his term of employment at Kaiser, and
not from his service as a Consultant. In addition, Consultant is not entitled to participate in any
employee bonus plans as a result of his service as a Consultant.
| 5. | Protection of Confidential Information |
5.1 All work product of Consultant in the performance of this Agreement, including without
limitation, analyses, reports, photographs, data and other information, including any inventions or
discoveries made by Consultant, shall be the property of Kaiser and shall be considered
Confidential Information. Any information disclosed to Consultant by Kaiser or others in
connection with service for Kaiser under this Agreement shall also be considered Confidential
Information, and shall, as between Kaiser and Consultant, be the property of Kaiser.
5.2 Except as Kaiser may authorize in writing, Consultant shall not disclose
any Confidential Information or use it for any purpose other than the performance of his services
under this Agreement. Promptly upon Xxxxxx’x request, and in any event upon the termination of
this Agreement, Consultant shall deliver to Kaiser all such material (including all copies made
thereof) which Consultant has in his possession.
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5.3 Upon termination of this Agreement for any reasons, Consultant will, except as otherwise
agreed to in writing by the parties, return to Kaiser all property belonging to Kaiser, including
without limitation, computer equipment, computer programs, cellular telephones, beepers or other
property belonging to Kaiser, and documents, property and data of any nature and in any form,
including electronic or magnetic form, reflecting any confidential information described above.
| 6. | Applicable Law/Entire Agreement |
6.1 This Agreement shall in all respects be governed by and construed in accordance with the
laws of the State of Texas, except that conflicts of laws/provisions of Texas law shall not be
applied for the purpose of making other law applicable.
6.2 This Agreement, the Severance Agreement, the Retention Agreement and that certain Release
executed pursuant to the terms of the Severance Agreement constitute the entire agreement and
supersedes all prior agreements and understandings, both written and oral, between the parties
relating to Consultant’s activities as a Consultant and the termination of Consultant’s employment
with Kaiser, including, but not limited to the effect of such termination under the KERP and
related agreements. It may not be amended, supplemented or superseded except by a written
agreement signed by both parties.
| 7. | Dispute Resolution |
7.1 If a dispute arises out of or related to this Agreement, and if the dispute cannot be
settled through direct discussions, then Kaiser and Consultant agree to first endeavor to settle
the dispute in an amicable and good faith manner by mediation before a mutually agreeable mediator,
before having recourse to any other proceeding or forum.
7.2 Any controversy or claim arising out of or relating to this Agreement or the breach
thereof that cannot be resolved by good faith mediation shall on the written request of the
complaining party served on the other within thirty (30) calendar days of the event which forms the
basis of the controversy or claim, be submitted and resolved by final and binding arbitration in a
manner consistent with the rules of the American Arbitration Association. Service of the written
demand for arbitration shall be made by certified mail, with a return receipt requested. Time is
of the essence. If the request is not served within said thirty (30) days of the date a cause of
action arises, the complaining party’s claim(s) shall be forever waived and barred before any and
all forums, including, without limitation, arbitration or judicial forums. The Arbitrator shall
have no authority to alter, amend, modify or change any of the terms of the Agreement. The
decision of the Arbitrator shall be final and binding and judgment thereon may be entered in any
court having jurisdiction thereof. The parties shall equally divide all costs of the arbitration,
but the parties shall bear their own expenses for attorney’s fees and witness costs.
7.3 The parties intend that the dispute resolution procedures outlined herein are mandatory
and shall be the exclusive means of resolving all disputes, between Consultant and Kaiser and/or
Xxxxxx’x employees, directors, officers, officers or managers involving or arising out of this
Agreement. However, this provision does not prevent either Party from first seeking injunctive
relief if necessary to enforce the terms of this Agreement.
| 8. | Notices |
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Xxxxxx. X. Xxxxx | |
All notices, correspondence, consents, requests, demands, and other communications hereunder
shall be in writing and shall be deemed to have been duly given when actually received. Such
notices may be given personally, by registered or certified mail, by email, or by facsimile
transmission:
if to Consultant:
|
Xxxxxx X. Xxxxx | ||
| Emergence Strategies LLC | |||
| 000 Xxxx Xxxxxxxxxx Xxxxxx | |||
| Xxxxxxxxx XX 00000 | |||
| Fax: 000-000-0000 | |||
| Phone: 000.000.0000 | |||
| Email: xxx000@xxxxx.xxx | |||
if to Kaiser:
|
Xxxxxx Aluminum & Chemical Corp. | ||
| Attn: Xxxx X. Xxxxxx, Vice President and General Counsel | |||
| 00000 Xxxxxxx Xxxxxxx, #000 | |||
| Xxxxxxxx Xxxxx, XX 00000-0000 | |||
| Phone: (000) 000-0000 | |||
| Fax: (000) 000-0000 | |||
| xxxx.xxxxxx@xxxxxxxxxxxxxx.xxx |
or to such other address as either party shall have last designated by notice to the other party
hereto.
| 9. | Waiver |
Failure of either Kaiser or Consultant to enforce at any time any of the provisions of this
Agreement shall in no way be construed to be a waiver of such provisions nor in any way affect the
validity of this Agreement or any part thereof or the right of either party thereafter to enforce
each and every provision thereof. The waiver of any provisions of this Agreement or any breach
thereof shall not constitute waiver of any subsequent breach of the same or any other provisions of
this Agreement.
| 10. | Knowing and Voluntary Waiver |
Consultant understands and agrees that he:
| a. | Has carefully read and fully understands all of the provisions of this Agreement, the KERP and agreements entered into by Consultant under the KERP, including Consultant’s Severance Agreement, Retention Agreement and CIC Agreement and the effect of his termination of Employment under this Agreement, the KERP and Consultant’s Severance Agreement, Retention Agreement and CIC Agreement. | ||
| b. | Has had an opportunity to negotiate the terms of this Agreement. | ||
| c. | Is, through this Agreement, waiving right to employee benefits and/or any future claim to benefits set forth in paragraph 4.2 of this Agreement, stemming from activities as a Consultant during the period of this Agreement on and after August 1, 2005. | ||
| d. | Knowingly and voluntarily intends to be legally bound by the terms of this Agreement. |
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| e. | Was advised and hereby is advised in writing to consider the terms of this Agreement and consult with an attorney of his choice prior to executing this Agreement. |
| 11. | Survival |
The obligations of Consultant under Section 5, 6 and 7 of this Agreement shall survive
termination or expiration of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Consulting Agreement as of the date first
set forth above.
| CONSULTANT: | XXXXXX ALUMINUM & CHEMICAL CORP. | |||||
| By: | ||||||
Xxxxxx X. Xxxxx
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Xxxx X. Xxxxxx | |||||
| Vice President and General Counsel | ||||||
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Xxxxxx. X. Xxxxx | |
List of Subject Areas as to which Kaiser Desires and Consultant Agrees to Provide Services
n
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Regularly Scheduled Omnibus and Special bankruptcy court hearings | |
n
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Disclosure Statement, POR, Solicitation, Confirmation hearings — complete | |
n
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Hearings and appellate work relating to bankruptcy issues, including stay proceedings | |
n
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PBGC Appeal of Distress Termination | |
n
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Insurance coverage litigation and settlements | |
n
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Trentwood environmental matters and criminal investigation | |
n
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Senior/Sub Note/Gramercy Subordination Litigation and liquidating plan confirmation and appeals, including stay proceedings | |
n
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Asbestos and other Tort Claim resolution and negotiations | |
n
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Asbestos workers’ compensation | |
n
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Communications with committees and futures representatives | |
n
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C11 communications with the Board | |
n
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New Board Search Committee — complete | |
n
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Environmental reorganization matters — complete | |
n
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Claims resolution issues | |
n
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Monument Select litigation — complete | |
n
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Testimony and/or declarations as required to support particular pleadings | |
n
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Other assignments as agreed |
EFH Initials
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JMD Initials |
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Xxxxxx. X. Xxxxx | |
SUMMARY OF BENEFITS DUE AND REFERENCES
TO APPLICABLE BENEFIT AGREEMENTS
TO APPLICABLE BENEFIT AGREEMENTS
| n | All benefits that are due and payable to Consultant under the Kaiser Key Employee Retention Program (KERP), Consultant’s Severance Agreement (“Severance Agreement”), Consultant’s Retention Agreement, each as approved by the Bankruptcy Court in 2002 in Xxxxxx’x chapter 11 proceedings, for a “Termination Without Cause” and a “Pro-Rating Event,” as those terms are used in the appropriate documents that generally describe and are specific to Xxxxxx X. Xxxxx, will be paid as and when due under those plans and agreements as a result of Xx. Xxxxx’x termination effective August 15, 2005. | |||
| n | No material change or alteration to such benefits is intended from the KERP and related plans and agreements that were approved by the Bankruptcy Court | |||
| n | These severance benefits include, as of the termination on August 15, 2005 | |||
| q | Base pay times a multiplier of 2 | |||
| q | Withheld retention payments equaling $400,000 | |||
| q | “Welfare benefits” for 2 years as provided for in the Severance Agreement and all other benefits provided by the severance plan implemented at part of the KERP (note: does NOT include car lease continuation) | |||
| q | Normal end of service benefits and rights as a Kaiser employee (e.g. unused vacation days for 2005, accrued but unused for 2006) unrelated to Severance Agreement | |||
| n | Deferred benefits under the KERP/Severance program | |||
| q | LTI for 2002 through 2004 calculated and paid in accordance with the LTI program and KERP (half at emergence, half at emergence + 1 yr) | |||
| n | Other bargained for benefits | |||
| q | $25,000 one-time moving expense payment (to be paid upon the earlier of an actual move or upon termination of the Agreement) (complete) | |||
| q | 2005 Short-Term Incentive Compensation, prorated for the period from January 1 to August 15, 2005, not to exceed $25,000, to be paid before March 15, 2006. (complete) | |||
EFH Initials
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JMD Initials |
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