EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT is
made
as of the 1st
day of
March, 2007 by and between Century Aluminum Company, a Delaware corporation
(the
“Company”),
and
Xxxxx Xxxx (the “Executive”).
RECITALS
A. The
Company desires to employ Executive as its Executive Vice President and Chief
Operating Officer; 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.
Executive shall be employed as an Executive Vice President and Chief Operating
Officer 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 the day-to-day operations
of
the Company and implementation of the Company’s short and long-range operating
and capital plans.
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 March 1, 2007, (as amended and restated, from time to time, 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.
1.2 Initial
Term.
Executive's employment hereunder shall commence as of March 1, 2007, and shall
end December 31, 2009 (the “Initial Term”); provided, however, that unless
earlier terminated in accordance with the terms of this Agreement, and subject,
however, to termination as provided in Section 1.3, commencing on January 1,
2008, and on each January 1 thereafter, the Initial Term of this Agreement
shall
automatically be extended for one year (each then extended year of this
Agreement being an “Extended Term”). The Initial Term as may be extended by each
Extended Term is hereinafter referred to as the “term of this Agreement.” For
the second and each subsequent year during the term of this Agreement, Executive
shall be employed at a salary not less than Executive’s salary in the
immediately preceding year, and on other terms and conditions at least as
favorable to Executive as those applicable to Executive during the immediately
preceding year, or as may otherwise be agreed to by the Company and Executive
in
writing.
1.3 Termination
of Renewal.
Either
party may give effective written notice to the other party of such notifying
party’s intention not to renew this Agreement beyond the then-current term of
this Agreement (“Notice of Non-Renewal”), provided that such notice is given by
the notifying party not less than 30 months prior to the end of the then-current
term of this Agreement (or such shorter term as may be agreed to by the Company
and Executive in writing). If a party delivers a Notice of Non-Renewal, the
term
of this Agreement will end as of the last day of the then-current term of this
Agreement, or as may otherwise be agreed to by the Company and Executive in
writing.
2.1 Base
Salary.
(a)
(i) Effective
as of March 1, 2007, Executive shall be paid an initial salary at the monthly
rate of $37,500.00, 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 $450,000.
(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.
2.2 Bonuses.
(a) Executive
will be entitled to receive a one-time cash bonus of $225,000, payable on the
last payroll pay date in March 2007, and otherwise in accordance with the
Company's payroll policies.
(b) 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 35% and 100% of his base salary.
The Company agrees that Executive shall be entitled to receive a cash bonus
of
not less than $225,000 for his services for the full year 2007, which shall
be
payable in the 2008 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.
2.4 Relocation;
Housing.
(a) Executive
shall be entitled to receive a one-time cash bonus of $75,000 payable on the
last payroll pay date in March 2007, and otherwise in accordance with the
Company's payroll policies, to compensate Executive for the expense and effort
involved in relocating Executive and his family to Monterey, California.
(b) The
Company shall pay for reasonable and customary relocation expenses to Monterey,
California, as set forth in the Relocation Policy attached to this Agreement.
In
addition, the Company will reimburse Executive for reasonable and customary
temporary housing in the Monterey area, as well as storage of Executive’s
household goods for up to 6-months from Executive’s start date. The Company will
also reimburse Executive for Reasonable and customary travel for Executive
and
Executive’s immediate family members to Monterey, California, in connection with
the relocation. Any moving, storage, transport and temporary living expense
payments by the Company will be “grossed-up” for tax purposes to the extent that
they are taxable as income to Executive.
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 50,000 shares
of Company stock at an exercise price equal to the average of the high and
low
sales price of the stock on Executive’s first date of employment (“Start
Date”),
determined in accordance with the Plan and otherwise subject to the terms of
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 25,000 service-based performance
shares, which grant will vest one-third on each of the one, two and three year
anniversaries of the Start Date.
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.
(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. 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, 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 as well as providing global healthcare
coverage for your spouse and dependents while they are residing overseas, 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:
(a) Qualified
Plan Benefits.
Executive shall be entitled to receive, upon his retirement as provided for
in
the Century Aluminum 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 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.
(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.
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.
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.
(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.
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 Executive shall govern.
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 X. Xxxxxx
/s/
Xxxxx Xxxx
Xxxxx
X.
Xxxxxx
Xxxxx
Xxxx
President
and Chief Executive Officer
CENTURY
ALUMINUM COMPANY
RELOCATION
POLICY - CORPORATE STAFF/MONTEREY
