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Exhibit 2.2
EXECUTION COPY
MANAGEMENT SERVICES AGREEMENT
THIS AGREEMENT, dated as of September 20, 1999 by and between
Century Aluminum Company, a Delaware corporation ("Century") and Pechiney Rolled
Products LLC, a Delaware limited liability company ("PAV").
WHEREAS, simultaneously with the execution hereof, PAV has
acquired, pursuant to the terms of a Stock and Asset Purchase Agreement dated as
of July 26, 1999 among the parties hereto and certain other persons (the
"Purchase Agreement"), the Rolling Business (as such term is defined in the
Purchase Agreement).
WHEREAS, the parties have determined that it would be
appropriate for Century to provide certain consulting services of the
individuals listed on Annex A attached hereto (the "Consultants") to PAV to
facilitate a smooth transition of ownership of the Rolling Business upon the
terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties hereto agree as follows:
1. Consultants. Consultants are senior executives of Century, and, as
such, have and will continue to have, as their primary responsibility, the
management of Century. Nevertheless, for so long as such individuals are
employed by Century, and are capable of meeting their obligations hereunder
consonant with their responsibilities to Century, Century agrees to make
available the services of each of the Consultants to PAV in the capacities set
forth opposite each such Consultant's name on Annex A attached hereto (the
"Consulting Items"). In connection with their respective capacities, as set
forth on Annex A, Century shall require that such Consultants perform such
services as the designated representative of PAV (the "Designated Person") shall
reasonably request and as further described in Section 3 below. Notwithstanding
any other provision in this Agreement, the Consultants shall continue to be
employees of Century and shall not be employees of PAV.
(b) The Consultants shall make their services available in the manner
agreed upon between the Consultant and the Designated Person and as provided for
in Section 3 below.
(c) Neither Century, its affiliates or subsidiaries, nor any Consultant
(collectively, the "Protected Persons") shall be liable to PAV, its affiliates
or subsidiaries, or any third party for losses, claims or damages (whether
direct, indirect, special, consequential or otherwise), including, without
limitation, loss of profits, incurred by any such person related to or arising
from the consultancy services of the Consultants provided hereunder. PAV shall
indemnify and hold Protected Persons harmless, on demand, in respect of any
claim against, or
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expense, loss or damage (including reasonable attorney fees) incurred by, any
Protected Person related to or arising from the consulting services of the
Consultants provided hereunder.
2. Term of Agreement. The term of this Agreement shall commence on the
date hereof (the "Effective Date") and shall terminate on the earlier of (i)
December 31, 2002, or (ii) the date on which PAV or Century elects to terminate
this Agreement pursuant to Section 5 (the "Termination Date").
3. Services to be Provided. (a) For the period of time commencing on
the Effective Date, each Consultant responsible for the Consulting Items
described in Annex A shall meet with PAV personnel, as reasonably requested,
subject always to their obligations and duties to Century. Meetings may be in
person, or by conference call. Under no circumstances shall the consulting
services exceed the times set forth in Annex B. In the event that PAV requires
advice or special knowledge that call for the expertise of the Century Chief
Executive Officer, Xxxxx X. Xxxxx, Xx. Xxxxx agrees to make himself reasonably
available to provide such advice or share such knowledge (it being understood
that Xx. Xxxxx will not have a predetermined number of hours relating to such
service).
(b) All in person meetings described above shall be conducted in the
offices of Century located in Ravenswood, West Virginia, or at such other
locations in the United States as PAV shall reasonably decide.
4. Compensation and Benefits. (a) Century shall be solely responsible
for payment of each of the Consultants' compensation and benefits, and the
Consultants shall not be entitled to any compensation or benefits from PAV for
services performed for PAV.
(b) PAV shall reimburse Century pro rata for Century's cost based on
the total annual compensation (salary and bonus) of each Consultant as shown on
Century's most recent Proxy Statement from time to time, plus 30% (the "Cost"),
which shall be computed as set forth in Annex C attached hereto. PAV shall pay
Century for travel time and expenses and if travel time is for purposes in
addition to PAV consulting, theses travel costs will be fairly prorated.
(c) Unless otherwise agreed by the parties, the reimbursed Costs
payable under Section 4(b) shall be paid monthly after submission by Century to
PAV of a detailed invoice showing the hours expended and the amount owed with
respect to the applicable month.
(d) PAV shall pay to Century a fee which shall be computed by
multiplying (x) the average of the earnings before income tax, depreciation and
amortization for PAV calendar years 2001 and 2002 with respect to the Rolling
Business (the "EBITDA of the Rolling Business") and (y) 0.40, and subtracting
from such product (z) $18 million (the "Fee"). The Fee shall be paid to Century
as soon as practicable after January 1, 2003, but in no case later than July 1,
2003.
The EBITDA of the Rolling Business shall be computed by an
auditor selected by PAV (the "PAV Auditor"). Century may request a second
computation of the EBITDA of the Rolling Business by an auditor of its choice
(the "Century Auditor"), if Century reasonably believes that the EBITDA of the
Rolling Business as computed by the PAV Auditor, is in error. In the event that
the EBITDA of the Rolling Business, as computed by the Century Auditor, is
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within 10% of the EBITDA of the Rolling Business as computed by the PAV Auditor,
the parties will agree that the EBITDA of the Rolling Business to be used to
calculate the Fee shall be an average of the two. In the event that the EBITDA
of the Rolling Business, as computed by the Century Auditor, is not within 10%
of the EBITDA of the Rolling Business as computed by the PAV Auditor, the
parties will agree on a third independent auditor to calculate the EBITDA of the
Rolling Business. In such case the third auditor's calculation of the EBITDA of
the Rolling Business shall be used to calculate the Fee. Century and PAV shall
each pay all costs incurred by their respective auditors and shall each pay
one-half of the costs incurred by the third auditor.
(e) PAV shall, upon presentation of proper documentation with respect
to any Consultant, pay Century on a current basis (or pay at Century's direction
to the applicable Consultant) all reasonable business expenses incurred by the
Consultants in performing their services hereunder, in accordance with Century's
reimbursement policies generally applicable to senior executive employees
including, but not limited to, expenses for travel and accommodations.
(f) It is expressly understood between the parties that Century and the
Consultants shall be independent contractors and not engaged as employees of
PAV. It is also expressly agreed that Century shall be solely responsible for
the withholding and payment of any and all taxes and other sums required to be
withheld or paid by an employer pursuant to any and all laws applicable to the
rendering of services by the Consultants hereunder.
5. Termination of this Agreement. (a) This Agreement or the services of
any Consultant may be terminated by PAV at any time or by Century for any reason
after Period 1 without penalty. In the event of the termination of this
Agreement by PAV other than as a result of circumstances described in Section
5(b) or 5 (c) below, PAV shall (i) promptly pay all accumulated Costs hereunder
for services performed prior to the date of termination, together with business
expenses pursuant to Section 4(e), upon submission by Century to PAV of a
detailed invoice showing the hours expended and the amount owed and (ii) shall
pay to Century the Fee.
(b) In the event that (i) this Agreement is terminated by Century on or
before December 31, 2000 or (ii) on or before December 31, 2000, Xxxxxx X.
Xxxxxx or his successor, and any one of the other Consultants or their
successors are not available or materially fail to provide services hereunder,
even if such failure is consonant with their responsibilities to Century, PAV
may terminate this Agreement, and in either case, PAV shall promptly pay all
accumulated Costs and expenses hereunder for services performed prior to the
Termination date, upon submission by Century to PAV of a detailed invoice
showing the hours expended and the amount owed and no other Fee shall be
payable.
(c) If the conditions or circumstances set forth in Section 5(b) occur
after December 31, 2000, PAV shall promptly pay all accumulated Costs and
expenses hereunder for services performed prior to the Termination date, upon
submission by Century to PAV of a detailed invoice showing the hours expended
and the amount owed and shall pay to Century a pro-rata portion of the Fee,
which shall be determined by multiplying the total Fee by a fraction, the
numerator of which is the number of days between the Effective Date and the
Termination Date during which period Consultants were to have been available for
consulting, pursuant to Annex B, or actually consulted, whichever is greater,
and denominator of which is the total
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number of days Consultants were to have been available pursuant to Annex B for
all periods shown on the schedule, provided, that in no event shall such
fraction exceed one.
(d) The Fees shall be paid as provided in Section 4(d).
6. Termination of Consultants. In the event of the termination of the
services of any of the Consultants by PAV for any reason, PAV shall have no
obligation for the payment of any Costs applicable to such Consultant after the
date of such termination, and Costs allocable to services rendered by such
Consultant prior to the date of termination shall be paid after the close of the
relevant Period as described in Section 4(c) above. In the event any Consultant
shall no longer be able to perform services hereunder for any reason, Century
shall designate a substitute reasonably acceptable to PAV to perform services
hereunder in substitution for the terminated Consultant. In the event PAV shall
so approve a successor which Century has designated, Century agrees to provide
the services of the successor Consultant on the same basis as the services of
the predecessor, and as though the successor were named on Annex A in place of
the predecessor, unless the parties otherwise agree.
7. Conflict of Interest and Insurance. (a) PAV hereby expressly and
prospectively waives all claims of any conflict of interest that may arise in
connection with the Consultants' performance of their services under this
Agreement.
(b) PAV shall arrange that the Consultants, while they are physically
present on the premises owned by PAV, shall be covered for their activities
hereunder under policies of liability insurance maintained by PAV on the same
basis as officers and directors of PAV are covered.
8. Miscellaneous. (a) Any notice required or permitted under this
Agreement shall be given in writing and shall be deemed to have been effectively
made or given if personally delivered, or if mailed or faxed to the other party
at its address and fax number set forth below in this Section 8(a), or at such
other address or fax number as such party may designate by written notice to the
other party hereto:
if to PAV:
Pechiney Rolled Products LLC
0000 Xxxx Xxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxx Xxxxx
with a copy to:
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Xxxxxx X. Xxxx, Xx., Esq.
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if to Century:
Century Aluminum Company
0000 Xxxxxx Xxxx
Xxxxxxxx X, Xxxxx 000
Xxxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: General Counsel
(b) This Agreement shall be binding upon and inure to the benefit of,
and shall be enforceable by Century and PAV; provided, however, that this
Agreement shall not be assignable by either Century or PAV, and Century may not
substitute any Consultant hereunder without the written consent of PAV, and such
consent shall not be unreasonably withheld.
(c) This Agreement constitutes the entire agreement of the parties
hereto with respect to the subject matter hereof and may not be amended or
modified except by an instrument in writing signed by PAV and Century. Waiver of
any term or condition of this Agreement shall only be effective if in writing
and shall not be construed as a waiver of any subsequent breach or waiver of the
same term or condition, or a waiver of any other term or condition of this
Agreement.
(d) This Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York applicable to contracts executed in and
to be performed in that State.
(e) This Agreement may be executed in one or more counterparts, and by
the parties hereto in separate counterparts, each of which when executed shall
be deemed to be an original but all of which taken together shall constitute one
and the same agreement.
9. Dispute Resolution. (a) In the event that any dispute, claim or
controversy shall arise as to whether either party hereto shall have fulfilled
its respective obligations under this Agreement, the parties agree that within
five (5) days after notification thereof authorized representatives of the
parties shall meet to resolve such dispute, claim or controversy. If, within ten
(10) days after the authorized representatives first began such meetings the
parties have not agreed to a resolution, a PAV representative and a Century
representative (other than, in the case of each party, the aforementioned
authorized representatives) shall meet within five (5) days to resolve such
dispute, claim or controversy. If, within ten (10) days after such designated
representatives first began such meetings, the parties have not reached
agreement, the dispute, laim or controversy shall be determined in the manner
set forth in Section 9 (b) hereof.
(b) If, within five (5) business days after the date referred to in the
last sentence of Section 9 (a) hereof the dispute, claim or controversy in
question remains unresolved, such dispute, claim or controversy shall be finally
resolved by arbitration in New York City pursuant to the Rules of Conciliation
and Arbitration of the International Chamber of Commerce, and any award rendered
by an arbitral panel in accordance therewith shall be final and binding on the
parties and nonappealable. By execution of this Agreement each of the parties
consents to the jurisdiction of such arbitral panel for itself and in respect of
its properties. Any costs of the proceedings described in this Section 9 (b)
shall be borne by the parties equally.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
CENTURY ALUMINUM COMPANY
By: /s/ Xxxxxx X. Kitchen
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Name: Xxxxxx X. Kitchen
Title: Executive Vice President
PECHINEY ROLLED PRODUCTS LLC
By: /s/ X.X. Xxxxxx
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Name: X.X. Xxxxxx
Title: Vice President
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