EXHIBIT 10.2
SEVERANCE PROTECTION AGREEMENT
THIS AGREEMENT, made as of the 23rd day of January 2006, by and between the
Company (as hereinafter defined) and Xxxxxxx X. Bless (the "Executive")
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 Financial
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.
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 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:
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(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 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.
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(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 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
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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;
(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.
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(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.
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.
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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 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
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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
pension plan (the "Qualified Plan"). For purposes of this subsection
(iv), the "actuarial equivalent" shall be determined in accordance
with the actuarial assumptions used for the calculation of benefits
under the Qualified Plan as applied prior to the Termination Date in
accordance with such plans' 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
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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 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.
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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 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.
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(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 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.
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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 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
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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 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
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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 XXXXXXX X. BLESS
By: /s/ Xxxxx X. Xxxxxx By: /s/ Xxxxxxx X. Bless
--------------------------------- -----------------------------------
Name: XXXXX X. XXXXXX Name: XXXXXXX X. BLESS
Title: PRESIDENT AND CEO Title: EXECUTIVE
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EXHIBIT 10.2
EXHIBIT A
If to the Company:
at its principal executive offices
If to the Executive:
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