AMENDED AND RESTATED SEVERANCE PROTECTION AGREEMENT
EXHIBIT
10.12
AMENDED
AND RESTATED SEVERANCE PROTECTION AGREEMENT
THIS
AGREEMENT, made as of March 19, 2007, by and between the Company (as hereinafter
defined) and Xxxxxxx X. Bless (the “Executive”) restates that Severance
Protection Agreement between the Parties made as of January 23, 2006, and
includes amendments approved by the Compensation Committee of the Board of
Directors of the Company as of February 21, 2007.
WITNESSETH:
WHEREAS, the Board of
Directors of the Company (the “Board”) recognizes
that the possibility of a Change in Control (as hereinafter defined) exists and
that the threat or the occurrence of a Change in Control can result in
significant distractions of its key management personnel because of the
uncertainties inherent in such a situation;
WHEREAS, the Board has
determined that it is essential and in the best interest of the Company and its
stockholders to retain the services of the Executive in the event of a threat or
the occurrence of a Change in Control and to ensure his continued dedication and
efforts in such event without undue concern for his personal financial and
employment security; and
WHEREAS, the Executive is the
Executive Vice President and Chief Operating Officer of the Company and in order
to induce the Executive to remain in the employ of the Company, particularly in
the event of a threat or the occurrence of a Change in Control, the Company
desires to enter into this Agreement with the Executive to provide the Executive
with certain benefits if his employment is terminated as a result of, or in
connection with, a Change in Control;
NOW, THEREFORE, in
consideration of the respective agreements of the parties contained herein, it
is hereby agreed as follows:
1. Term of
Agreement. This Agreement shall be
effective as of January 23, 2006, and shall continue in effect until December
31, 2008; provided, however, that commencing on January 1, 2009, and on each
January 1 thereafter, the term of this Agreement shall automatically be extended
for one year, subject however, to termination as provided in the last sentence
of this Section 1; and provided further, however, that the term of this
Agreement shall not expire prior to the later of (i) the expiration of 36 months
after the occurrence of a Change in Control during the term of this Agreement,
or (ii) until such time as all benefits to be provided for hereunder have been
provided in full. Except as otherwise provided herein, this Agreement
and the rights and obligations of each party hereunder shall terminate if the
Executive or the Company terminates the Executive’s employment prior to the
occurrence of a Change in Control.
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2. Definitions.
2.1. Accrued
Compensation. For purposes of
this Agreement, “Accrued Compensation”
shall mean any and all amounts or rights earned, accrued or vested through the
Termination Date (as hereinafter defined) but not paid as of the Termination
Date, including (i) base salary, (ii) reimbursement for reasonable and necessary
expenses incurred by the Executive on behalf of the Company during the period
ending on the Termination Date, (iii) vacation pay, (iv) bonuses, incentive
compensation (other than the Pro Rata Bonus (as hereinafter defined)), and such
other benefits as may be provided in Executive’s employment agreement with the
Company.
2.2. Cause. For purposes of this
Agreement, a termination of employment is for “Cause” if the
Executive (a) has disregarded a direct, material order of the Board, the
substance of which order is (i) a proper duty of the Executive under the terms
of his employment agreement, (ii) permitted by law,
and (iii) otherwise permitted by his employment agreement, which disregard
continues after 15 days’ opportunity and failure to cure, or (b) has been
convicted of a felony or any crime involving moral turpitude.
2.3. Change in
Control. For purposes of this
Agreement, a “Change
in Control” shall mean any of the following events:
(a) An
acquisition (other than directly from the Company) of any voting securities of
the Company (the “Voting Securities”)
by any “Person”
(as the term person is used for purposes of Section 13(d) or 14(d) of the
Securities Exchange Act of 1934) immediately after which such Person has “Beneficial Ownership”
(within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act
of 1934) of 20% or more of the combined voting power of the Company’s then
outstanding Voting Securities or, in the case of Glencore International AG and
its affiliates (collectively, “Glencore”),
Beneficial Ownership of 50% or more of such Voting Securities; provided,
however, that in determining whether a Change in Control has occurred, Voting
Securities which are acquired by any Person other than Glencore in a Non-Control
Acquisition (as hereinafter defined) shall not constitute an acquisition which
would cause a Change in Control. A “Non-Control
Acquisition” shall mean an acquisition by (1) an employee benefit plan
(or a trust forming a part thereof) maintained by (x) the Company or (y) any
corporation or other Person of which a majority of its voting power or its
equity securities or equity interest is owned directly or indirectly by the
Company (a “Subsidiary”), (2) the Company or any
Subsidiary, or (3) any Person in connection with a Non-Control Transaction (as
hereinafter defined);
(b) The
individuals who, as of the date hereof, are members of the Board (the “Incumbent Board”),
cease for any reason to constitute at least two-thirds of the Board; provided,
however, that if the election, or nomination for election by the Company’s
stockholders, of any new director was approved by a vote of at least two-thirds
of the Incumbent Board, such new director shall, for purposes of this Agreement,
be considered a member of the Incumbent Board; provided further, however, that
no
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individual
shall be considered a member of the Incumbent Board if such individual initially
assumed office as a result of either an actual or threatened “Election Contest” (as
described in Rule 14a-11 promulgated under the Securities Exchange Act of 1934)
or other actual or threatened solicitation of proxies or consents by or on
behalf of a Person other than the Board (a “Proxy Contest”)
including by reason of any agreement intended to avoid or settle any Election
Contest or Proxy Contest; or
(c) Approval
by stockholders of the Company of:
(1) A
merger, consolidation or reorganization involving the Company,
unless
(i) the
stockholders of the Company, immediately before such merger, consolidation or
reorganization, own, directly or indirectly immediately following such merger,
consolidation or reorganization, at least 70% of the combined voting power of
the outstanding voting securities of the corporation resulting from such merger
or consolidation or reorganization (the “Surviving
Corporation”) in substantially the same proportion as their ownership of
the Voting Securities immediately before such merger, consolidation or
reorganization,
(ii) the
individuals who were members of the Incumbent Board immediately prior to the
execution of the agreement providing for such merger, consolidation or
reorganization constitute at least two-thirds of the members of the board of
directors of the Surviving Corporation, and
(iii) no
Person (other than the Company, any Subsidiary, any employee benefit plan (or
any trust forming a part thereof) maintained by the Company, the Surviving
Corporation or any Subsidiary, or any Person who, immediately prior to such
merger, consolidation or reorganization, had Beneficial Ownership of 15% or more
of the then outstanding Voting Securities) has Beneficial Ownership of 15% or
more of the combined voting power of the Surviving Corporation’s then
outstanding voting securities (a transaction described in clauses (i) through
(iii) above shall herein be referred to as a “Non-Control
Transaction”);
(2) A
complete liquidation or dissolution of the Company; or
(3) An
agreement for the sale or other disposition of all or substantially all of the
assets of the Company to any Person (other than a transfer to a
Subsidiary).
Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur solely because
any Person (the “Subject Person”)
acquired Beneficial Ownership of more than the permitted amount of the
outstanding Voting Securities as a result of the acquisition of Voting
Securities by the Company which, by reducing the number of
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Voting
Securities outstanding, increases the proportional number of shares Beneficially
Owned by the Subject Person; provided that if a Change in Control would occur
(but for the operation of this sentence) as a result of the acquisition of
Voting Securities by the Company, and after such share acquisition by the
Company, the Subject Person becomes the Beneficial Owner of any additional
Voting Securities which increases the percentage of the then outstanding Voting
Securities beneficially owned by the Subject Person, then a Change in Control
shall occur.
(d) Notwithstanding
anything contained in this Agreement to the contrary, if the Executive’s
employment is terminated prior to a Change in Control and the Executive
reasonably demonstrates that such termination (i) was at the request of a third
party who had indicated an intention or taken steps reasonably calculated to
effect a Change in Control and who effectuates a Change in Control (a “Third Party”) or (ii)
otherwise occurred in connection with, or in anticipation of, a Change in
Control which actually occurs, then for all purposes of this Agreement, the date
of a Change in Control with respect to the Executive shall mean the date
immediately prior to the date of such termination of the Executive’s
employment.
2.4. Company. For purposes of this
Agreement, the “Company” shall mean
Century Aluminum Company, a Delaware corporation, and shall include its
Successors and Assigns (as hereinafter defined). As used in this
Agreement, the term “affiliates” shall include any company controlled by,
controlling, or under common control with, the Company.
2.5. Disability. For purposes of this
Agreement, “Disability” shall
mean a physical or mental infirmity which impairs the Executive’s ability to
substantially perform his duties with the Company for a period of 180
consecutive days, and the Executive has not returned to his full time employment
prior to the Termination Date as stated in the Notice of Termination (as
hereinafter defined).
2.6. Good
Reason.
(a) For
purposes of this Agreement, “Good Reason” shall
mean the occurrence after a Change in Control of any of the events or conditions
described in subsections (1) through (9) hereof:
(1) a
change in the Executive’s status, title, position or responsibilities (including
reporting responsibilities) which, in the Executive’s reasonable judgment,
represents an adverse change from his status, title, position or
responsibilities as in effect at any time within one year preceding the date of
a Change in Control or at any time thereafter; the assignment to the Executive
of any duties or responsibilities which, in the Executive’s reasonable judgment,
are inconsistent with his status, title, position or responsibilities as in
effect at any time within one year preceding the date of a Change in Control or
at any time thereafter; or any removal of the Executive from or failure to
reappoint or reelect him to any of such offices or positions, except in
connection with the
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termination
of his employment for Disability, Cause, as a result of his death or by the
Executive other than for Good Reason;
(2) a
reduction in the Executive’s base salary or the failure of the Company to (i)
pay to the Executive an annual bonus in cash at least equal to the annual bonus
paid to the Executive for the most recently completed fiscal year prior to the
Change in Control, such bonus to be paid no later than the end of the third
month of the fiscal year next following the fiscal year for which the annual
bonus is awarded, unless the Executive shall elect to defer the receipt of such
annual bonus, (ii) increase the Executive’s base salary, annual bonus and any
other incentive compensation, including performance shares and options,
consistent with the Company’s practice prior to the Change in Control or, if
greater, as the same may be increased from time to time for other key executive
officers of the Company and its affiliated companies, or (iii) pay to the
Executive any compensation or benefits to which he is entitled within five days
of the date due;
(3) the
Company’s requiring the Executive to be based at any place outside a 30-mile
radius from the Company’s offices where he was based prior to the Change in
Control, except for reasonably required travel on the Company’s business which
is not materially greater than such travel requirements prior to the Change in
Control;
(4) the
failure by the Company to (A) continue in effect (without reduction in benefit
level and/or reward opportunities) any material compensation or employee benefit
plan (including, without limitation, long-term disability, medical, dental, life
insurance, flexible spending account, pre-tax insurance premiums, vacation pay,
pension and profit-sharing) in which the Executive was participating at any time
within one year preceding the date of a Change in Control or at any time
thereafter, unless such plans are replaced with plans that provide substantially
equivalent compensation or benefits to the Executive, (B) provide the Executive
with compensation and benefits, in the aggregate, at least equal (in terms of
benefit levels and/or reward opportunities) to those provided for under each
other employee benefit plan, program and practice in which the Executive was
participating at any time within one year preceding the date of a Change in
Control or at any time thereafter, or (C) permit the Executive to participate in
any or all incentive, savings, retirement plans and benefit plans, fringe
benefits, practices, policies and programs applicable generally to other key
executives of the Company and its affiliated companies;
(5) the
insolvency or the filing (by any party, including the Company) of a petition for
bankruptcy of the Company, which petition is not dismissed within 60
days;
(6) any
material breach by the Company of any provision of this
Agreement;
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(7) any
purported termination of the Executive’s employment for Cause by the Company
which does not comply with the terms of Section 2.2;
(8) the
disposition of all, or substantially all, of the assets of the Company;
or
(9) the
failure of the Company to obtain an agreement, satisfactory to the Executive,
from any Successors and Assigns to assume and agree to perform this Agreement,
as contemplated in Section 6 hereof.
(b) Any
event or condition described in Section 2.6(a) (1) through (9) above which
occurs prior to a Change in Control but which the Executive reasonably
demonstrates (1) was at the request of a Third Party, or (2) otherwise arose in
connection with, or in anticipation of, a Change in Control which actually
occurs, shall constitute Good Reason for purposes of this Agreement
notwithstanding that it occurred prior to the Change in Control.
2.7. Highest
Annual Bonus. For purposes of this
Agreement, “Highest
Annual Bonus” shall mean an amount equal to the highest bonus or bonuses
paid or payable to the Executive in any of the five most recently completed
fiscal years prior to the Change in Control (or such shorter period that the
Executive has been employed).
2.8. Highest
Base Salary. For purposes of this
Agreement, “Highest
Base Salary” shall mean the Executive’s annual base salary at the highest
rate in effect during the five-year period (or such shorter period that the
Executive has been employed) prior to the Change in Control, and shall include
all amounts of his base salary that are deferred under the qualified and
non-qualified employee benefit plans of the Company or any other agreement or
arrangement.
2.9. Notice of
Termination. For purposes of this
Agreement, following a Change in Control, “Notice of
Termination” shall mean a written notice of termination from the Company
of the Executive’s employment which indicates the specific termination provision
in this Agreement relied upon and which sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated. The Notice of
Termination shall also specify the relevant Termination Date.
2.10. Pro Rata
Bonus. For purposes of this
Agreement, “Pro Rata
Bonus” shall mean an amount equal to the Highest Annual Bonus multiplied
by a fraction, the numerator of which is the number of days elapsed in the
fiscal year through the Termination Date and the denominator of which is
365.
2.11. Successors
and Assigns. For purposes of this
Agreement, “Successors
and Assigns” shall mean a corporation or other entity acquiring all or
substantially all the assets and business of the Company (including this
Agreement) whether by operation of law or otherwise.
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2.12. Termination
Date. For purposes of this
Agreement, “Termination Date”
shall mean in the case of the Executive’s death, his date of death, in the case
of the Executive’s resignation for any reason, the last day of his employment,
and in all other cases, the date specified in the Notice of Termination;
provided, however, that if the Executive’s employment is terminated by the
Company for Cause or due to Disability, the date specified in the Notice of
Termination shall be at least 30 days after the date the Notice of Termination
is given to the Executive, provided, that in the case of Disability the
Executive shall not have returned to the full-time performance of his duties
during such period of at least 30 days.
3. Termination of
Employment.
3.1. If,
during the term of this Agreement, the Executive’s employment with the Company
shall be terminated within 36 months following a Change in Control, the
Executive shall be entitled to the following compensation and
benefits:
(a) If
the Executive’s employment with the Company shall be terminated (1) by the
Company for Cause or Disability, (2) by reason of the Executive’s death, or (3)
by the Executive other than for Good Reason, the Company shall pay to the
Executive the Accrued Compensation and, if such termination is other than by the
Company for Cause, a Pro Rata Bonus.
(b) If
the Executive’s employment with the Company shall be terminated by reason of the
Executive’s death or disability, the Executive, or his beneficiaries or personal
representatives, as the case may be, shall be entitled to receive the greater of
those amounts described in Section 3.1(a) above or such other compensation and
benefits as may be provided for in his employment and other agreements for
termination of employment under similar circumstances.
(c) If
the Executive’s employment with the Company shall be terminated for any reason
other than as specified in Section 3.1(a), the Executive shall be entitled to
the following:
(i) the
Company shall pay the Executive all Accrued Compensation and a Pro Rata
Bonus;
(ii) the
Company shall pay the Executive as severance pay and in lieu of any further
compensation for periods subsequent to the Termination Date, in a single payment
an amount in cash equal to three times the sum of (A) the Highest Base Salary
and (B) the Highest Annual Bonus, in each case calculated to include amounts
deferred under the Company’s qualified and non-qualified plans;
(iii) for
a period of 36 months after the Termination Date (the “Continuation
Period”), the Company shall, at its expense, provide to the Executive and
his dependents and beneficiaries comparable employee benefits provided (x) to
the Executive at any time during the one year
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period
prior to the Change in Control or at any time thereafter or (y) to other
similarly situated executives who continue in the employ of the Company during
the Continuation Period, including, but not limited to, long-term disability,
medical, dental, life insurance, and pre-tax insurance premiums.
The
coverage and benefits (including deductibles and costs) provided in this Section
3.1(c)(iii) during the Continuation Period shall be no less favorable to the
Executive and his dependents and beneficiaries than the most favorable of such
coverage and benefits during any of the periods referred to in clauses (x) and
(y) above. The Company’s
obligation hereunder with respect to the foregoing benefits shall be limited to
the extent that the Executive obtains any such benefits pursuant to a subsequent
employer’s benefit plans, in which case the Company may reduce the coverage of
any benefits it is required to provide the Executive hereunder as long as the
aggregate coverage and benefits of the combined benefit plans is no less
favorable to the Executive than the coverage and benefits required to be
provided hereunder. This subsection
(iii) shall not be interpreted so as to limit any benefits to which the
Executive, his dependents or beneficiaries may be entitled under any of the
Company’s employee benefit plans, programs or practices following the
Executive’s termination of employment, including, without limitation, retiree
medical and life insurance benefits;
(iv) the
Company shall credit the Executive for pension purposes with three years of
service beyond the Termination Date and shall pay to the Executive in a single
payment an amount in cash equal to the excess of (A) the Recalculated Retirement
Benefit (as provided in this Section 3.1(c)(iv)) had (w) the Executive remained
employed by the Company for the additional three complete years of credited
service, (x) his annual compensation during such period been equal to the
Highest Base Salary and the Highest Annual Bonus, (y) the benefit accrual
formulas of each retirement plan remained no less advantageous to the Executive
than those in effect immediately preceding the date on which a Change in Control
occurred and the Company made employer contributions to each defined
contribution plan in which the Executive was a participant at the Termination
Date in an amount equal to the amount of such contribution for the plan year
immediately preceding the Termination Date, and (z) he been fully (100%) vested
in his benefit under each retirement plan in which the Executive was a
participant, over (B) the lump sum actuarial equivalent of the aggregate
retirement benefit the Executive is actually entitled to receive under such
retirement plans. For purposes of
this subsection (iv), the “Recalculated Retirement
Benefit” shall mean the lump sum actuarial equivalent of the aggregate
retirement benefit the Executive would have been entitled to receive under the
Company’s qualified and non-qualified retirement plans. For purposes of
this
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subsection
(iv), the “actuarial equivalent” shall be determined in accordance with the
actuarial assumptions used for the calculation of benefits under the applicable
retirement plan as applied prior to the Termination Date in accordance with such
plan’s past practices; and
(v) (A)
the restrictions on any outstanding incentive awards (including restricted stock
and performance share units) granted to the Executive under the 1996 Stock
Incentive Plan, as amended from time to time, or under any other incentive plan
or arrangement shall lapse and such incentive awards shall become 100% vested
and all stock options granted to the Executive shall become immediately
exercisable and shall become 100% vested (and restrictions on any stock issued
upon exercise of stock options shall lapse), and Section 6.B of the 1996 Stock
Incentive Plan Implementation Guidelines notwithstanding, all performance shares
awarded to the Executive pursuant to the Guidelines shall be valued at 100% as
though the Company had achieved its target for each respective Plan Period, and
an equal number of shares of common stock shall be awarded to the Executive, and
(B) the Executive shall have the right to require the Company to purchase, for
cash, any shares of unrestricted stock or shares purchased upon exercise of any
options or received pursuant to a performance share award at a price equal to
the fair market value of such shares on the date of purchase by the
Company.
(d) The
amounts provided for in Sections 3.1(a), 3.1(c)(i), 3.1(c)(ii) and 3.1(c)(iv)
shall be paid in a single lump sum cash payment within five days after the
Executive’s Termination Date (or earlier, if required by applicable
law). Notwithstanding the foregoing, all payments made to the
Executive shall be paid in conformance with Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”)
(e) The
Executive shall not be required to mitigate the amount of any payment provided
for in this Agreement by seeking other employment or otherwise and no such
payment shall be offset or reduced by the amount of any compensation or benefits
provided to the Executive in any subsequent employment except as provided in
Section 3.1(c)(iii). Notwithstanding
the foregoing, the Executive agrees that during the Continuation Period, he
shall not (i) solicit any employees of the Company to leave the Company’s employ
to work for any company with which the Executive is employed, or (ii) employ any
employee who is employed by the Company at any time during the Continuation
Period. A
breach of either of the foregoing covenants will result in the Executive
forfeiting any further benefits to which he is entitled pursuant to Section
3.1(c)(iii), although the Executive shall not be required to return any payments
to the Company that have been made to the Executive prior to the date of such
breach.
3.2. a) Except
as otherwise provided in Section 3.1(b), the severance pay and benefits provided
for in this Section 3 shall be in lieu of any other severance
or
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termination
pay to which the Executive may be entitled under any employment agreement or any
Company severance or termination plan, program, practice or
arrangement.
(b) The
Executive’s entitlement to any other compensation benefits shall be determined
in accordance with the Company’s employee benefit plans and other applicable
programs, policies and practices then in effect.
(c) Notwithstanding
anything to the contrary in this Agreement, if the Executive is terminated by
the Company after the occurrence of a Change in Control and is subsequently
rehired by the Company at any time thereafter, the Executive shall not be
entitled to any further benefits under Section 3.1(c)(iii) of this Agreement
although the Executive shall not be required to return any payments to the
Company which have been made to the Executive prior to the date the Executive is
rehired.
4. Notice of
Termination. Following a Change in
Control, any purported termination of the Executive’s employment by the Company
shall be communicated by Notice of Termination to the Executive. For
purposes of this Agreement, no such purported termination shall be effective
without such Notice of Termination.
5. Excise Tax
Payments.
(a) If
any payment or benefit (within the meaning of Section 280G(b)(2) of the Code) to
the Executive or for his benefit paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise in connection with, or
arising out of, his employment with the Company or a change in ownership or
effective control of the Company or of a substantial portion of its assets (each
a “Payment” and
collectively, the “Payments”), would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then
the Executive will be entitled to receive an additional payment (a “Gross-Up Payment”),
such that the net amount retained by the Executive, after deduction and/or
payment of any Excise Tax on the Payments and the Gross-Up Payment and any
federal, state and local income tax on the Gross-Up Payment (including any
interest or penalties, other than interest and penalties imposed by reason of
the Executive’s failure to file timely a tax return or pay taxes shown due on
his return, imposed with respect to such taxes), shall be equal to the
Payments.
(b) An
initial determination as to whether a Gross-Up Payment is required pursuant to
this Agreement and the amount of such Gross-Up Payment shall be made at the
Company’s expense by an accounting firm selected by the Company and reasonably
acceptable to the Executive which is designated as one of the four largest
accounting firms in the United States (the “Accounting
Firm”). The Accounting Firm shall provide its determination
(the “Determination”),
together with detailed supporting calculations and documentation to the Company
and the Executive within
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five days
of the Termination Date if applicable, or such other time as requested by the
Executive (provided the Executive reasonably believes that any of the Payments
may be subject to the Excise Tax) and if the Accounting Firm determines that no
Excise Tax is payable by the Executive as provided in Section 5(a) above, it
shall furnish the Executive with an opinion reasonably acceptable to the
Executive to such effect. Within ten days of the delivery of the
Determination to the Executive, the Executive shall have the right to dispute
the Determination (the “Dispute”). The
Gross-Up Payment, if any, as determined pursuant to this Paragraph 5(b) shall be
paid by the Company to the Executive within five days of the receipt of the
Accounting Firm’s determination. The existence of the Dispute shall
not in any way affect the Executive’s right to receive the Gross-Up Payment in
accordance with the Determination. Upon the final resolution of a
Dispute, the Company shall promptly pay to the Executive any additional amount
required by such resolution. If there is no Dispute, the
Determination shall be binding, final and conclusive upon the Company and the
Executive subject to the application of Section 5(c) below.
(c) As
a result of the uncertainty in the application of Sections 4999 and 280G of the
Code, it is possible that a Gross-Up Payment (or a portion thereof) will be paid
which should not have been paid (an “Excess Payment”) or a
Gross-Up Payment (or a portion thereof) which should have been paid will not
have been paid (an “Underpayment”). An
Underpayment shall be deemed to have occurred (i) upon notice (formal or
informal) to the Executive from any governmental taxing authority that the
Executive’s tax liability (whether in respect of the Executive’s current taxable
year or in respect of any prior taxable year) may be increased by reason of the
imposition of the Excise Tax on a Payment or Payments with respect to which the
Company has failed to make a sufficient Gross-Up Payment, (ii) upon a
determination by a court, (iii) by reason of a determination by the Company
(which shall include the position taken by the Company, together with its
consolidated group, on its federal income tax return) or (iv) upon the
resolution of the Dispute to the Executive’s satisfaction. If an
Underpayment occurs, the Executive shall promptly notify the Company and the
Company shall promptly, but in any event, at least five days prior to the date
on which the applicable government taxing authority has requested payment, pay
to the Executive an additional Gross-Up Payment equal to the amount of the
Underpayment plus any interest and penalties (other than interest and penalties
imposed by reason of the Executive’s failure to file timely a tax return or pay
taxes shown due on the Executive’s return) imposed on the
Underpayment. An Excess Payment shall be deemed to have occurred upon
a Final Determination (as hereinafter defined) that the Excise Tax shall not be
imposed upon a Payment or Payments (or portion thereof) with respect to which
the Executive had previously received a Gross-Up Payment. A “Final Determination”
shall be deemed to have occurred when the Executive has received from the
applicable government taxing authority a refund of taxes or other reduction in
the Executive’s tax liability by reason of the Excess Payment and upon either
(x) the date a determination is made by, or an agreement is entered into with,
the applicable governmental taxing authority which finally and conclusively
binds the Executive and such taxing authority, or if a claim is brought before a
court of competent jurisdiction, the date upon which a final determination has
been made by such court and either all appeals have been taken
and
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finally
resolved or the time for all appeals has expired or (y) the statute of
limitations with respect to the Executive’s applicable tax return has
expired. If an Excess Payment is determined to have been made, the
amount of the Excess Payment shall be treated as a loan by the Company to the
Executive and the Executive shall pay to the Company on demand (but not less
than 10 days after the determination of such Excess Payment and written notice
has been delivered to the Executive) the amount of the Excess Payment plus
interest at an annual rate equal to the Applicable Federal Rate provided for in
Section 1274(d) of the Code from the date the Gross-Up Payment (to which the
Excess Payment relates) was paid to the Executive until the date of repayment to
the Company.
(d) Notwithstanding
anything contained in this Agreement to the contrary, if, according to the
Determination, an Excise Tax will be imposed on any Payment or Payments, the
Company shall pay to the applicable government taxing authorities as Excise Tax
withholding, the amount of the Excise Tax that the Company has actually withheld
from the Payment or Payments.
6. Successors’ Binding
Agreement.
(a) This
Agreement shall be binding upon and shall inure to the benefit of the Company,
its Successors and Assigns and the Company shall require any Successors and
Assigns to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession or assignment had taken place.
(b) Neither
this Agreement nor any right or interest hereunder shall be assignable or
transferable by the Executive, his beneficiaries or legal representatives,
except by will or by the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
legal personal representative.
7. Fees and
Expenses. The Company shall pay
all legal fees and related expenses (including the costs of experts, evidence
and counsel) incurred by the Executive as they become due as a result of (a) the
Executive’s termination of employment (including all such fees and expenses, if
any, incurred in contesting or disputing any such termination of employment),
and (b) the Executive seeking to obtain or enforce any right or benefit provided
by this Agreement (including, but not limited to, any such fees and expenses
incurred in connection with the Dispute and any other matter arising under
Section 5, including the existence and amount of any Excess Payment or
Underpayment and issues with respect to the Gross-Up Payment, whether as a
result of any applicable government taxing authority proceeding, audit or
otherwise, or by any other plan or arrangement maintained by the Company under
which the Executive is or may be entitled to receive benefits); provided,
however, that any such action by the Executive is commenced in good faith and
for good reason; provided, however, that the circumstances set forth in clauses
(a) and (b) (other than as a result of the Executive’s termination of employment
under circumstances described in Section 2.3(d)) occurred on or after a Change
in Control and that no such amounts shall be due
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1.1. and
payable by the Company after December 31 of the second calendar year following
the calendar year in which the Executive’s termination of employment
occurred.
8. Notices. For the purposes of this
Agreement, notices and all other communications provided for in the Agreement
(including the Notice of Termination) shall be in writing and shall be deemed to
have been duly given when personally delivered or sent by certified mail, return
receipt requested, postage prepaid, addressed to the respective addresses for
the parties set forth on Exhibit A hereto or
to any other addresses as the respective parties may designate by notice
delivered pursuant to this Section 8; provided that all notices to the Company
shall be directed to the attention of the Board with a copy to the Secretary of
the Company. All notices and
communications shall be deemed to have been received on the date of delivery
thereof or on the third business day after the mailing thereof, except that
notice of change of address shall be effective only upon receipt.
9. Non-Exclusivity
of Rights. Except as otherwise
provided in Section 3.2(a), nothing in this Agreement shall prevent or limit the
Executive’s continuing or future participation in any benefit, bonus, incentive
or other plan or program provided by the Company and for which the Executive may
qualify, nor shall anything herein limit or reduce such rights as the Executive
may have under any other agreements with the Company. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive under
any plan or program of the Company shall be payable in accordance with such plan
or program, except as explicitly modified by this Agreement.
10. Settlement
of Claims. The Company’s obligation
to make the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any circumstances, including,
without limitation, any set-off, counterclaim, recoupment, defense or other
right which the Company may have against the Executive or others.
11. Modification,
Waiver and Miscellaneous. No provision of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing and signed by the Executive and the
Company. 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. No
agreement or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not expressly set forth in this Agreement.
12. Governing
Law and Jurisdiction. This Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Delaware without giving effect to the conflict of laws principles
thereof. Any claims arising under or related to this Agreement shall
be settled by binding arbitration pursuant to the rules of the American
Arbitration Association or such other rules as to which the parties may
agree. The arbitration shall take place in San Francisco, California,
within 30 days
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1.2. following
service of notice of such dispute by one party on the other. The
arbitration shall be conducted before a panel of three arbitrators, one to be
selected by each of the parties and the third to be selected by the other
two. The panel of arbitrators shall have no authority to order a
modification or amendment of this Agreement. The parties agree to
abide by all awards rendered in such proceedings. Such awards shall
be final and binding on all parties, and may be filed with the clerk of one or
more courts, state or federal, having jurisdiction over the party against whom
such award is rendered or such party’s property as a basis of judgment and of
the issuance of execution for its collection.
13. Severability. The provisions of this
Agreement shall be deemed severable and the invalidity or unenforceability of
any provision shall not affect the validity or enforceability of the other
provisions hereof.
14. Entire
Agreement. Except as otherwise
provided below, this Agreement constitutes the entire agreement between the
parties hereto and supersedes all prior agreements, if any, understandings and
arrangements, oral or written, between the parties hereto with respect to the
subject matter hereof. If the Executive
and the Company have also entered into an employment agreement, and there is an
inconsistency between the terms of this Agreement and the terms of such
employment agreement, then the Agreement which provides terms most favorable to
the Executive shall govern.
IN WITNESS WHEREOF, the
Company has caused this Agreement to be executed by its duly authorized officer
and the Executive has executed this Agreement as of the day and year first above
written.
|
CENTURY
ALUMINUM COMPANY
|
EXECUTIVE
|
|
By: /s/
Xxxxx Xxxxxx
|
By: /s/
Xxxxxxx X.
Bless
|
|
Name: Xxxxx
Xxxxxx
Title: Chief
Executive Officer
|
Name: Xxxxxxx
X. Bless
|
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EXHIBIT
A
If to the
Company:
at its
principal executive offices
If to the
Executive:
Their
then designated personal address on file with the Company
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