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EXHIBIT 10.36
SEVERANCE PROTECTION AGREEMENT
THIS AGREEMENT, made as of the 15th day of April 1998, by and between
the Company (as hereinafter defined) and Xxxxxxxx X. Xxxxx (the "Executive").
W I T N E S S E T H :
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 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
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Agreement with the Executive to provide the Executive with certain benefits in
the event 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 commence effective upon 15
April 1998, and shall continue in effect until January 1, 2001, provided,
however, that commencing on January 1, 2001 and on each January 1 thereafter,
the term of this Agreement shall automatically be extended for one (1) 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 eighteen (18) 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 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 an amount which shall include all amounts
earned or accrued 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,
and (iv) bonuses and incentive compensation (other than the "Pro Rata Bonus" (as
hereinafter defined)).
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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 or the Executive Committee 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 fifteen
(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 0000 Xxx) immediately after which such Person has "Beneficial Ownership"
(within the meaning of Rule 13d-3 promulgated under the 0000 Xxx) of twenty
percent (20%) or more of the combined voting power of the Company's then
outstanding Voting Securities; provided, however, that in determining whether a
Change in Control has occurred, Voting Securities which are acquired 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);
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(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 0000 Xxx) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board (a "Proxy Contest") including by reason of any agreement intended
to avoid or settle any Election Contest or Proxy Contest; or
(c) Approval by stockholders of the Company of:
(1) A merger, consolidation or
reorganization involving the Company, unless
(i) the stockholders of the Company,
immediately before such merger, consolidation or reorganization, own, directly
or indirectly immediately following such merger, consolidation or
reorganization, at least seventy percent (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,
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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 fifteen percent (15%) or more of the then
outstanding Voting Securities) has Beneficial Ownership of fifteen percent (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
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which increases the percentage of the then outstanding Voting Securities
beneficially owned by the Subject Person, then a Change in Control shall occur.
(d) Notwithstanding anything contained in this
Agreement to the contrary, if the Executive's employment is terminated prior to
a Change in Control and the Executive reasonably demonstrates that such
termination (i) was at the request of a third party who had indicated an
intention or taken steps reasonably calculated to effect a Change in Control and
who effectuates a Change in Control (a "Third Party") or (ii) otherwise occurred
in connection with, or in anticipation of, a Change in Control which actually
occurs, then for all purposes of this Agreement, the date of a Change in Control
with respect to the Executive shall mean the date immediately prior to the date
of such termination of the Executive's employment.
2.4 Company. For purposes of this Agreement, the "Company"
shall mean Century Aluminum Company, a Delaware corporation, and shall include
its Successors and Assigns (as hereinafter defined). As used in this Agreement,
the term "affiliates" shall include any company controlled by, controlling, or
under common control with, the Company.
2.5 Disability. For purposes of this Agreement, "Disability"
shall mean a physical or mental infirmity which impairs the Executive's ability
to substantially perform his duties with the Company for a period of one hundred
eighty (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).
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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 such annual bonus, (ii) increase the
Executive's base salary and annual bonus 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
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affiliated companies, or (iii) pay to the Executive any compensation or benefits
to which he is entitled within five (5) 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 principal
executive offices 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 sixty (60) days;
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(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.
(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 annual bonus
paid or payable to the Executive for 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).
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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
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terminated by the Company for Cause or due to Disability, the date specified in
the Notice of Termination shall be at least 30 days from the date the Notice of
Termination is given to the Executive, provided, that in the case of Disability
the Executive shall not have returned to the full-time performance of his duties
during such period of at least 30 days.
3. Termination of Employment.
3.1 If, during the term of this Agreement, the Executive's
employment with the Company shall be terminated within eighteen (18) 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 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
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single payment an amount in cash equal to three times the sum of (A) the Highest
Base Salary and (B) the Highest Annual Bonus;
(iii) for a period of thirty-six (36) months
after the Termination Date (the "Continuation Period"), the Company shall, at
its expense, continue on behalf of the Executive and his dependents and
beneficiaries all 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, flexible spending
account and pre-tax insurance premiums but excluding pension and profit-sharing
benefits. The coverage and benefits (including deductibles and costs) provided
in this Section 3.1(b)(iii) during the Continuation Period shall be no less
favorable to the Executive and his dependents and beneficiaries than the most
favorable of such coverages and benefits during any of the periods referred to
in clauses (x) and (y) above. The Company's obligation hereunder with respect to
the foregoing benefits shall be limited to the extent that the Executive obtains
any such benefits pursuant to a subsequent employer's benefit plans, in which
case the Company may reduce the coverage of any benefits it is required to
provide the Executive hereunder as long as the aggregate coverages and benefits
of the combined benefit plans is no less favorable to the Executive than the
coverages 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 pay to the Executive
in a single payment an amount in cash equal to the excess of (A) the
Supplemental Retirement Benefit (as defined below) had (w) the Executive
remained employed by the Company for an additional three (3)
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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 "Supplemental 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 supplemental and other retirement plans
(the "Pension Plans"). 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 Pension Plans 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 or under any other incentive plan
or arrangement shall lapse and such incentive awards shall become 100% vested
and all stock options granted to the Executive shall become immediately
exercisable and shall become 100% vested (and restrictions on any stock issued
upon exercise of stock options shall lapse), and (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 at a price
equal to the fair market value of such shares on the date of purchase by the
Company.
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(c) The amounts provided for in Sections 3.1(a),
3.1(b)(i), 3.1(b)(ii) and 3.1(b)(iv) shall be paid in a single lump sum cash
payment within five (5) days after the Executive's Termination Date (or earlier,
if required by applicable law).
(d) 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(b)(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(b)(iii), 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
of such breach.
3.2 (a) 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.
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(c) Notwithstanding anything to the contrary in this
Agreement, in the event 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(b)(iii) of this Agreement although the Executive shall not be
required to return any payments to the Company which have been made to the
Executive prior to the date the Executive is rehired.
4. Notice of Termination. Following a Change in Control, any purported
termination of the Executive's employment by the Company shall be communicated
by Notice of Termination to the Executive. For purposes of this Agreement, no
such purported termination shall be effective without such Notice of
Termination.
5. Excise Tax Payments.
(a) In the event that any payment or benefit (within the
meaning of Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended
(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
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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.
Notwithstanding the foregoing, the Company shall only be required to make a
Gross-Up Payment with respect to parachute payments (as defined in Section
280G(b)(2) of the Code) arising from or relating to the acceleration, vesting or
lapsing of restrictions of incentive awards, including without limitation, stock
options, performance share units and restricted stock; any such Gross-Up Payment
shall be made with respect to the full amount of such parachute payments without
regard to the base amount (as defined in Section 280G(b)(3) of the Code).
(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 five 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
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Determination shall be binding, final and conclusive upon the Company and the
Executive subject to the application of Section 5(c) below.
(c) As a result of the uncertainty in the application of
Sections 4999 and 280G of the Code, it is possible that a Gross-Up Payment (or a
portion thereof) will be paid which should not have been paid (an "Excess
Payment") or a Gross-Up Payment (or a portion thereof) which should have been
paid will not have been paid (an "Underpayment"). An Underpayment shall be
deemed to have occurred (i) upon notice (formal or informal) to the Executive
from any governmental taxing authority that the Executive's tax liability
(whether in respect of the Executive's current taxable year or in respect of any
prior taxable year) may be increased by reason of the imposition of the Excise
Tax on a Payment or Payments with respect to which the Company has failed to
make a sufficient Gross-Up Payment, (ii) upon a determination by a court, (iii)
by reason of a determination by the Company (which shall include the position
taken by the Company, together with its consolidated group, on its federal
income tax return) or (iv) upon the resolution of the Dispute to the Executive's
satisfaction. If an Underpayment occurs, the Executive shall promptly notify the
Company and the Company shall promptly, but in any event, at least five days
prior to the date on which the applicable government taxing authority has
requested payment, pay to the Executive an additional Gross-Up Payment equal to
the amount of the Underpayment plus any interest and penalties (other than
interest and penalties imposed by reason of the Executive's failure to file
timely a tax return or pay taxes shown due on the Executive's return) imposed on
the Underpayment. An Excess Payment shall be deemed to have occurred upon a
Final Determination (as hereinafter defined) that the Excise Tax shall not be
imposed upon a Payment or Payments (or portion thereof) with respect to which
the Executive had previously received a Gross-Up Payment. A "Final
Determination" shall be deemed to have occurred when the Executive has received
from the applicable government taxing authority a refund of taxes or other
reduction in the Executive's tax liability by reason of the Excess Payment and
upon either (x) the date a determination is made by, or an agreement is entered
into
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with, the applicable governmental taxing authority which finally and
conclusively binds the Executive and such taxing authority, or in the event that
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, in the event that, according to the Determination, an Excise Tax
will be imposed on any Payment or Payments, the Company shall pay to the
applicable government taxing authorities as Excise Tax withholding, the amount
of the Excise Tax that the Company has actually withheld from the Payment or
Payments.
6. Successors' Binding Agreement.
(e) 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.
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(f) 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), (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, and (c) the Executive's hearing
before the Board as contemplated in Section 2.2 of this Agreement; 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.
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
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shall be directed to the attention of the Board with a copy to the Secretary of
the Company. All notices and communications shall be deemed to have been
received on the date of delivery thereof or on the third business day after the
mailing thereof, except that notice of change of address shall be effective only
upon receipt.
9. Non-Exclusivity of Rights. Except as otherwise provided in Section
3.2(a), nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any benefit, bonus, incentive or other
plan or program provided by the Company and for which the Executive may qualify,
nor shall anything herein limit or reduce such rights as the Executive may have
under any other agreements with the Company. Amounts which are vested benefits
or which the Executive is otherwise entitled to receive under any plan or
program of the Company shall be payable in accordance with such plan or program,
except as explicitly modified by this Agreement.
10. Settlement of Claims. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others.
11. Modification, Waiver and Miscellaneous. No provision of this
Agreement may be modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing and signed by the Executive and the
Company. No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreement or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement.
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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 New York, New York within thirty (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 (3) 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. 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.
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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
By: /s/ Xxxxxx X. Kitchen
----------------------------------
Executive Vice President
/s/ Xxxxxxxx X. Xxxxx
----------------------------------
Xxxxxxxx X. Xxxxx
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EXHIBIT A
If to the Company:
at its principal executive offices
If to the Executive:
0000 Xxxxxxxxx Xxxxx XX
Xxxxxxx, XX 00000
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