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Exhibit 10.13
January 1, 2000
Xx. Xxxxxx X. Xxxxxxxx, Xx.
President and Chief Executive Officer
Xxxxxx Aluminum Corporation
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
RE: DIRECTOR AND NON-EXECUTIVE CHAIRMAN AGREEMENT
Dear Xxxxxx:
Reference is hereby made to the oral agreement that in October, 1999
was entered into by and between the Boards of Directors (the "Boards") of Xxxxxx
Aluminum Corporation ("KAC"), Xxxxxx Aluminum & Chemical Corporation ("KACC")
and you regarding the terms and conditions upon which you are to serve as a
Director and non-executive Chairman of the Boards for the period commencing
immediately after your retirement from employment by KACC in December, 1999, and
ending on the date of the annual meeting of shareholders of KAC in May, 2001.
The purpose of this letter agreement is to set forth and memorialize the terms
and conditions of our oral agreement. The terms and conditions of our agreement
are set forth below.
1. The Boards hereby engage you and you hereby agree to perform
services as a Director and non-executive Chairman of the
Boards of KAC and KACC.
2. In addition to your duties as a Director of the Boards, you
shall devote up to forty (40) hours each calendar month to the
affairs of KAC and KACC as directed by the Chief Executive
Officer (or acting Chief Executive Officer) of KAC and KACC,
with particular focus on assisting with implementation of
strategic plans that have been developed (or will be
developed) for KAC and KACC.
3. The term of this letter agreement shall commence on the date
immediately after the date of your retirement from employment
by KACC in December, 1999, and will expire on the date of the
annual meeting of shareholders of KAC in May, 2001, unless
earlier terminated by (i) your death or disability (as defined
in KAC's Long Term Disability Plan that covers executives and
directors of KAC), (ii) for cause (as defined below) or (iii)
the mutual agreement of the parties hereto. For purposes of
this letter agreement, the term "cause" shall mean:
(i) Your conviction for, or plea of nolo contendere to,
a felony; or
(ii) Your commission of an act involving fraud or
intentional dishonesty, which act is intended to
result in substantial personal enrichment at the
expense of KAC or any of its subsidiaries; or
(iii) Your material breach of any material provision of
this letter agreement which remains uncorrected for
30 days after written notice from the Boards or the
Chief Executive Officer and an opportunity to
correct; or
(iv) Your knowing and willful misconduct in the
performance of your duties, which continues for 30
days after written notice from the Board or the Chief
Executive Officer and which results in material
injury to the reputation, business or operation of
KAC or any of its subsidiaries.
The existence of "cause" shall be determined by an affirmative vote of
not less than two-thirds of the members of each of the Boards. If the
requisite affirmative vote by two-thirds of the members of each of the
Boards is not obtained, this letter agreement may not be terminated for
cause.
4. Your base compensation for services as a Director and
non-executive Chairman of both Boards shall be at a rate of
$250,000 for a full twelve consecutive month year, which
shall include an amount of $40,000 per year representing base
Director's fees, which may be deferred as described in
paragraph 5, and any amounts due for performance on any
Committees of the Boards, including the Executive Committee.
Absent any deferrals as described in paragraph 5, base
compensation shall be paid in cash in quarterly increments of
$62,500 during the first month following the completion of
the quarter in which fees were earned. Notwithstanding the
immediately preceding sentence, but subject to the following
provisions of paragraph 5, with respect to the final quarter
of the term of this letter agreement in which this letter
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agreement shall expire or terminate, the parties hereby
expressly agree that you shall be entitled to a pro rata
portion of the $62,500 quarterly increment determined by
multiplying such amount by a fraction, the numerator of which
shall be the number of hours in which you performed services
hereunder and the denominator shall be 120 hours. You shall
be solely liable and responsible for complying with all laws,
rules and regulations regarding timely payment of applicable
taxes including, without limitation, federal and state
income, self-employment and/or disability taxes that may
apply to such compensation.
5. Some or all of the following amounts attributable to your fees
as a Director may be deferred at your option into a "phantom
stock" and/or interest-bearing account to the same extent as
other Directors of KAC and KACC are permitted an election to
do so. Your deferral rights hereunder pertain to the $10,000
in quarterly payments of Director's fees as shall be due in
cash following the relevant calendar quarter for required
services rendered for an entire calendar quarter.
Notwithstanding the immediately preceding sentence, with
respect to the final quarter of the term of this
letter agreement in which this letter agreement shall expire
or terminate, the parties agree that you shall be entitled to
a pro rata portion of the $10,000 quarterly Director's fees
determined by the portion of the quarter in which you serve as
a Director.
6. You will be paid incentive compensation with a target amount
of $50,000 upon KAC's achievement of such benchmark or
benchmarks as shall be determined in the discretion of the
Board. Any such incentive compensation for the year 2000
shall be paid in cash in the first calendar quarter of 2001.
Any such incentive compensation for 2001 shall be paid in
cash in the third quarter of 2001. Notwithstanding the
immediately preceding sentence, the parties agree that any
such incentive compensation for a year in which this letter
agreement shall expire or terminate shall be determined by
multiplying the full amount of incentive compensation for the
year by a fraction, the numerator of which is the number of
hours in which you performed services hereunder and the
denominator of which shall be 480 hours. You shall be solely
liable and responsible for complying with all laws, rules and
regulations regarding timely payment of applicable taxes
including, without limitation, federal and state income,
self-employment and/or disability taxes that may apply to any
such incentive compensation payment or payments.
7. In order to further assure that your interests are aligned
with those of KAC's and KACC's stockholders, and in order to
ensure that your right to exercise the options described below
is not adversely affected by your agreement to serve as
non-executive Chairman of the Board, the following stock
option agreements are hereby amended as set forth below.
a. Each of the agreement evidencing an option grant
made as of May 18, 1993 and dated August 1993
pursuant to which you were granted an option to
purchase 100,000 shares of common stock of KAC under
the Kaiser 1993 Omnibus Stock Incentive Plan (the
"1993 Plan") and the agreement evidencing an option
grant made as of December 21, 1994 and dated April
1995 pursuant to which you were granted an option to
purchase 26,700 shares of common stock of KAC under
the 1993 Plan, is amended by providing at the end of
the fifth paragraph thereof the following sentence:
Solely for purposes of this letter
agreement, your employment shall not be
deemed to have terminated during any period
of time you serve as the salaried Chairman
of the Board of Directors of the Company,
whether or not you serve as an officer of
the Company or hold any other position with
the Company.
b. Each of the agreement effective as of January 1, 1998
pursuant to which you were granted an option to
purchase 283,000 shares of KAC common stock under the
Kaiser 1997 Omnibus Stock Incentive Plan (the "1997
Plan") and the agreement effective as of January 1,
1998 pursuant to which you were granted an option to
purchase 386,000 shares of KAC common stock under the
1997 Plan, is amended by amending the introductory
sentence of Paragraph 6 thereof to read in its
entirety as follows:
6. Termination of Optionee's
Employment. Termination of Optionee's
employment with KAC or any Subsidiary (as
defined in Attachment A), and any branch,
unit or division of KAC or any Subsidiary
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(the "KAC Group") ("Employment") prior to
March 1, 2001 shall affect Optionee's rights
under the Stock Option as provided in this
Section 6. Solely for purposes of this Stock
Option Grant (including Section 4 hereof),
Optionee's Employment shall be deemed to
have been terminated on the later of the
date: (i) Optionee no longer serves as a
regular full-time salaried employee of any
member of the KAC Group; and (ii) Optionee
no longer serves as the salaried Chairman of
the Board of Directors of the Company.
8. The relationship between the parties shall be that of
independent contracting parties and shall not constitute or be
deemed for any purpose to be that of employer and employee.
The Boards and KAC and KACC expressly acknowledge and agree
that neither shall have the right to direct you with respect
to the means or manner in which you fulfill your obligations
and responsibilities under this letter agreement. The Boards
and KAC and KACC are solely interested in the results obtained
by you in connection with your performance of services
required hereunder.
9. The parties hereby agree that the following provisions shall
generally govern this letter agreement.
a. The compensation to which you may be entitled
hereunder shall not be subject to your debts or other
obligations and shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, garnishment, or
other legal or equitable process.
b. This letter agreement shall not be construed to
confer upon you any right to receive any, or any
particular rate of, base or incentive compensation
for services rendered hereunder (other than the base
and incentive compensation payable under this letter
agreement).
c. This letter agreement contains the entire
understanding and agreement between the parties with
respect to the subject matter hereof. Accordingly,
this letter agreement supersedes any and all other
agreements, contracts, plans or other arrangements
by, between, among or involving you and KAC and KACC
whereunder you are to serve as a Director and
non-executive Chairman of KAC and KACC.
d. This letter agreement may not be amended, modified
or supplemented in any respect except by a
subsequent written agreement entered into by both
parties.
e. This letter agreement may not be terminated prior
to expiration of the specified term except as
otherwise provided in Paragraph 3 hereof.
f. This letter agreement shall be binding upon, and
shall inure to the benefit of, KAC and its successors
and assigns, KACC and its successors and assigns, and
you and your heirs, executors, administrators and
personal representatives.
g. No term or condition of this letter agreement shall
be deemed to have been waived, nor shall there be an
estoppel against the enforcement of any provision of
this letter agreement, except by written instrument
of the party charged with such waiver or estoppel.
Any waiver by either party hereto of a breach of any
provision of this letter agreement by the other party
shall not operate or be construed as a waiver by such
party of any subsequent breach thereof.
h. In the event that any provision of this letter
agreement is declared invalid and not binding on the
parties hereto in a final decree or order issued by a
court of competent jurisdiction, such declaration
shall not affect the validity of the other provisions
of this letter agreement to which such declaration of
invalidity does not relate and such other provisions
shall remain in full force and effect.
i. Any notice required or permitted to be given under
this letter agreement shall be sufficient if in
writing and hand-delivered with appropriate proof of
same, or sent by registered or certified mail, return
receipt requested, to the affected party or other
person or entity at the address last furnished by
such party, person or entity. Such notice shall be
deemed given as of the date of delivery or, if
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delivery is made by mail, as of the date shown on the
postmark on the receipt for registration or
certification.
j. This letter agreement shall be governed and
construed in accordance with the laws of the state
of Texas, without regard to principles of choice
of law.
If the foregoing accurately sets forth your understanding of our
agreement on the matters set forth herein, please indicate acceptance of this
letter agreement by signing this letter agreement in the space indicated below.
Very truly yours,
XXXXXX ALUMINUM CORPORATION
By: /S/ XXXXXXX X. XXXXXXXXXX
Printed Name: Xxxxxxx X. Xxxxxxxxxx
Title: President, CEO and COO
XXXXXX ALUMINUM & CHEMICAL
CORPORATION
By: /S/ XXXXXXX X. XXXXXXXXXX
Printed Name: Xxxxxxx X. Xxxxxxxxxx
Title: President, CEO and COO
Accepted and Agreed to as of the 22nd day of January, 2000.
/S/ XXXXXX X. XXXXXXXX, XX.
Printed Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Chairman of the Board
