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EXHIBIT 10.35
EMPLOYMENT AGREEMENT
Agreement, made as of the 15 day of April, 1998 by and between
Century Aluminum Company, a Delaware corporation (the "Company"), and Xxxxxxxx
X. Xxxxx (the "Executive"). RECITALS
A. The Company desires to employ Executive as Executive Vice President;
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. Position and Term of Employment. Executive's employment hereunder
shall commence as of April 15, 1998 and shall end April 14, 2001, unless
terminated sooner pursuant to Section 7 of this Agreement or extended by the
mutual agreement of the parties. During the term hereof, Executive shall be
employed as Executive Vice President 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 development and implementation of the Company's long-term
growth strategy and the Company's efforts in corporate and business development.
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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 the date hereof (the "SPA")), 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 not more than five
percent (5%) of the outstanding capital stock of any public corporation which
sells or buys from or otherwise transacts business with the Company and its
affiliates.
2.1 Base Salary. (a) (i) Executive shall be paid an
initial salary at the monthly rate of $21,666.68, 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 $260,000.
(ii) If for any reason other than Executive's
voluntary resignation or termination pursuant to Section 7(a) or (c) hereof,
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 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 such highest annual bonus. The foregoing amounts shall be paid to
Executive over the remaining term of this
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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.
(b) If Executive resigns voluntarily or ceases to be employed
by the Company (or any affiliate) for any reason described in Section 7(a) or
(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
pursuant to Section 7(b), the Company shall pay in equal monthly installments
for the then remaining balance of the term of this Agreement to Executive (or
his beneficiaries or personal representatives, as the case may be) disability
benefits at a rate per annum equal to one hundred percent (100%) of his then
current Base Salary, plus amounts equal to the highest annual bonus as provided
in clause (ii) of Section 2.1 (a), 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. Executive shall be eligible for an annual
performance bonus for calendar years beginning after December 31, 1997, in
amounts between 30 percent and 75 percent of his Base Salary upon achievement by
the Company of targets as determined by the Compensation Committee of the Board
of Directors of the Company.
2.3 Expenses. During the term hereof, the Company shall pay or
reimburse Executive in accordance with the Company's normal practices (i) any
travel, hotel and other
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expenses or disbursements reasonably incurred or paid by Executive in connection
with the services performed by Executive hereunder and (ii) reasonable expenses
incurred in connection with Executive's relocation to the Monterey, California
area; in each case upon presentation by Executive of itemized accounts of such
expenditures or such other supporting information as the Company may require.
3.1 Incentive Plan. Century will grant to Executive, effective
as of April 15, 1998, ten-year options (the "Options") to purchase shares of
Company Common Stock ("Shares") under the Company's 1996 Stock Incentive Plan
(the "Plan") as follows:
(a) Seventy five thousand (75,000) shares at an exercise price
per share equal to $15.25.
(b) In addition, Executive may be granted additional options
to purchase shares as may hereafter be determined by the Compensation Committee
of the Board of Directors of the Company under the Plan.
(c) Of the Shares described in Section 3.1(a), Options to
purchase twenty five thousand (25,000) Shares will vest effective April 15, 1998
(the "Effective Date"), Options to purchase twenty five thousand (25,000) Shares
will vest one year after the Effective Date, and Options to purchase twenty five
thousand (25,000) Shares will vest two years after the Effective Date; provided,
however, that except to the extent provided in the SPA, the Plan or in Section
3.3 hereof, such vesting shall only occur if Executive is an employee of the
Company (or any affiliate) on the relevant vesting date. The Company shall
maintain the Plan and issue the Options in a manner such that, to the maximum
extent possible, the Options are treated as
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"incentive stock options," as defined in Section 422 of the Internal Revenue
Code of 1986, as amended.
3.2 Performance Share Unit Awards. The Company hereby grants
to Executive, effective the date hereof, seventy-five thousand (75,000)
performance share units. Upon vesting of the performance share units, the
Company shall provide to Executive one Share per performance share unit. The
performance share units shall vest as follows:
(a) Twenty five thousand (25,000) performance share units on
the third anniversary of the Effective Date, twenty five thousand (25,000)
performance share units on the fourth anniversary of the Effective Date, and
twenty five thousand (25,000) performance share units on the fifth anniversary
of the Effective Date; provided, however, that, except to the extent otherwise
provided in the SPA, the Plan or Section 3.3 hereof, such vesting shall only
occur if Executive is an employee of the Company (or any affiliate) on the
relevant vesting date.
(b) In addition, Executive may be granted additional
performance share units as may hereafter be determined by the Compensation
Committee of the Board of Directors of the Company under the Plan.
3.3 Effect of Termination of Employment. (a) If Executive
shall resign voluntarily or cease to be employed by the Company (or an
affiliate) for any reason 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).
(b) If Executive shall die or become disabled, all Options and
performance shares units which have not vested will accelerate and vest
immediately, and, in the event of Executive's
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death, all Option rights provided under this Agreement will transfer to
Executive's representative. All then unexercised Options will be cancelled one
year after Executive dies or becomes disabled.
4.1 Other Benefits. Executive shall be entitled to (i)
participate in life, medical, dental, hospitalization, disability and life
insurance benefit plans made available by the Company to its salaried employees
and shall also be eligible to participate in existing retirement or pension
plans offered by the Company to its salaried employees, but, except as otherwise
provided in Section 4.2, subject in each case to the terms and requirements of
each such plan or program.
4.2 Supplemental Executive Retirement Benefit.
(a) Benefit, Service Credit and Offsets. The Company agrees to
provide Executive with a Supplemental Executive Retirement Benefit ("SERB")
providing an annual retirement benefit beginning at age sixty-two (62) or
thereafter, equal to the benefits which would have accrued to Executive under
the Salaried Employees Retirement Plan (the "Pension Plan") and the
contributions which would have been made to the Salaried Employee Defined
Contribution Retirement Plan (the "Defined Contribution Plan") on behalf of
Executive (hereinafter collectively referred to as the "Qualified Plans"),
computed as follows:
(i) The limitation on benefits and contributions with
respect to such employees under Section 415 of the Internal Revenue Code of
1986, as at any time amended, and the regulations thereunder (hereinafter the
"Code") shall not be given effect;
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(ii) Such accrued benefits and deemed contributions
shall be determined without giving effect to the one hundred and fifty thousand
dollar ($150,000) limitation of Code Section 401 (a)(17), or any successor
thereto; and
(iii) Any and all amounts due Executive under the
Qualified Plans shall be credited toward and shall reduce the benefits payable
under the SERB.
(b) Vesting. Notwithstanding the provisions of the Qualified
Plans, the SERB shall be fully vested and there shall be no reduction in the
benefits hereunder because of the number of years of service of Executive.
(c) Time and Method of Payment of Benefits. Benefit payments
hereunder 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 severance of
employment.
(d) Prohibition on Assignment. 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.
(e) Source of Payments. All benefits under this Section 4.2
shall be paid in cash from the general funds of the Company, and 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
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parties that the arrangements be unfunded for tax purposes and for purposes of
Title I of the Employee Retirement Income Security Act of 1974.
(f) Executive's Status. Executive shall have the status of a
general unsecured creditor of the Company and the SERB shall constitute a mere
promise to make benefit payments in the future.
(g) Survival of Benefit. The SERB shall survive any
termination (or non-renewal) of this Agreement, including, without limitation, a
termination pursuant to Section 7(c) hereof.
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,
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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 therefor, 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 therefor.
7. Termination.
(a) This Agreement shall terminate upon Executive's
death.
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(b) The Company may terminate Executive's employment
hereunder upon fifteen (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 one hundred and eighty (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 Executive Committee or 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 fifteen (15) days'
opportunity and failure to cure; or
(ii) Executive's conviction for a felony or
any crime involving moral turpitude.
8. 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.
9. 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
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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.
10. 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.
11. 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.
12. Complete Agreement. This document embodies the complete
agreement and understanding among the parties, written or oral, which may have
related to the subject matter hereof in any way and shall not be amended orally,
but only by the mutual agreement of the parties hereto in writing, specifically
referencing this Agreement.
13. 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/ Xxxxxx X. Kitchen
Title: Executive Vice President
/s/ Xxxxxxxx X. Xxxxx
Xxxxxxxx X. Xxxxx
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