THIS
EMPLOYMENT AGREEMENT is made as of the 13 day of December,
2005, by and between Century Aluminum Company, a Delaware
corporation (the “Company”), and Logan W. Kruger (the
“Executive”).
A. The
Company desires to employ Executive as its President and Chief
Executive Officer; and
B. Executive
is willing to accept such employment on the terms and conditions
set forth in this Agreement.
THE PARTIES AGREE
as follows:
1.1 Position
and Term of Employment . Executive’s employment hereunder
shall commence as of December 13, 2005, and shall end
December 31, 2008, unless terminated sooner pursuant to
Section 7 of this Agreement or extended by the mutual
agreement of the parties. Executive shall be employed as the
President and Chief Executive Officer of the Company and shall
devote his full business time, skill, attention and best efforts in
carrying out his duties and promoting the best interests of the
Company. Executive shall also serve as a director and/or officer of
the Company and 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 Board of
Directors of the
Company and
shall be responsible for the control, supervision and management of
the Company and its business affairs.
Executive shall
not at any time while employed by the Company or any of its
affiliates (as defined in the Severance Protection Agreement
between the Company and Executive dated as of December 13,
2005, (the “SPA”), incorporated in this Agreement by
this reference), without the prior consent of the Board of
Directors, knowingly acquire any financial interests, directly or
indirectly, in or perform any services for or on behalf of any
business, person or enterprise which undertakes any business in
substantial competition with the business of the Company and its
affiliates or sells to or buys from or otherwise transacts business
with the Company and its affiliates; provided that Executive may
acquire and own a de minimum amount of the outstanding capital
stock of any public corporation which sells or buys from or
otherwise transacts business with the Company and its
affiliates.
(a)
(i) Effective as of December 13, 2005, Executive shall be
paid an initial salary at the monthly rate of $62,500, 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 $750,000.
-2-
(ii) If
for any reason other than Executive’s voluntary resignation,
his death, or termination for cause pursuant to Section 7(c),
Executive does not continue to be employed by the Company,
Executive shall continue to receive an amount equal to his then
current Base Salary plus an annual performance bonus equal to the
highest annual bonus payment Executive has received in the previous
three years (“Highest Annual Bonus”) for the then
remaining balance of the term of this Agreement. In no event shall
such payment be less than one year’s Base Salary plus Highest
Annual Bonus. The foregoing amounts shall be paid to Executive over
the remaining term of this Agreement or one year (whichever is
applicable) in accordance with the Company’s payroll and
bonus payment policies. Notwithstanding the foregoing, no payments
under this subparagraph (ii) shall be made if the Company
makes all payments to Executive required to be made, if any, under
the SPA in the event of a Change in Control (as defined in the
SPA).
(b) If
Executive resigns voluntarily or ceases to be employed by reason of
his death or by the Company (or any affiliate) for cause as
described in Section 7(c) of this Agreement, all benefits described
in Sections 2 and 4 hereof shall terminate (except to the
extent previously earned or vested).
(c) If
Executive’s employment shall have been terminated as a result
of Executive’s disability pursuant to Section 7(b), the
Company shall pay in equal monthly installments for the then
remaining balance of the term of this Agreement or one year,
whichever is greater, to Executive (or his beneficiaries or
personal representatives, as the case may be) disability benefits
at a rate per annum equal to one hundred percent (100%) of his then
current Base Salary, plus amounts equal to the Highest
Annual
-3-
Bonus, less
payments and benefits, if any, received under any disability plan
or insurance provided by the Company and less any “sick
leave” payments received from the Company for the applicable
period.
(a) In
recognition of his potential contributions to the Company,
Executive shall be entitled to receive a one-time cash bonus of
$475,000 which shall be payable January 31, 2006.
(b) Executive
shall be eligible for an annual performance bonus in amounts
between 0 and 100 percent of his Base Salary based upon his
individual performance and achievement by the Company of overall
objectives as determined by the Committee. The Company agrees that
Executive shall be entitled to receive a cash bonus of not less
than $325,000 for his services for the full year 2006.
2.3
Expenses . The Company shall pay or reimburse Executive in
accordance with the Company’s normal practices any travel,
hotel and other expenses or disbursements reasonably incurred or
paid by Executive hereunder in connection with the services
performed by Executive, in each case upon presentation by Executive
of itemized accounts of such expenditures or such other supporting
information as the Company may require.
2.4 Relocation;
Housing . The Company shall pay for all reasonable and
customary relocation expenses to Monterey, California, as set forth
in the Relocation Policy attached to this Agreement. In addition,
the Company will provide, at the
-4-
Company’s
expense, temporary housing in the Monterey area for a period of six
months from the effective date of this Agreement.
3.1 Incentive
Plan . Executive shall be eligible for option grants and
performance share unit awards under the Company’s 1996 Stock
Incentive Plan (the “Plan”), and the Guidelines adopted
to implement the Plan. Upon approval by the compensation committee
of the Board of Directors (“Compensation Committee”),
the Company shall grant Executive options to purchase 100,000
shares of Company stock (the “Grant”) at an exercise
price based on the price of the stock on the day Executive signs
this Agreemet. In addition the Compensation Committee shall be
asked to approve a grant of 50,000 restricted stock shares, which
grant will vest one-half on January 1, 2007, and the other
half on January 1, 2008.
3.2 Effect of
Termination of Employment or Change in Control.
(a) If
Executive shall resign voluntarily or cease to be employed by the
Company (or an affiliate) for cause as described in Section 7(c) of
this Agreement, except as provided in the SPA, all benefits
described in Section 3 hereof shall terminate (except to the
extent previously earned or vested and, if Executive retires, those
which may become vested upon retirement pursuant to the terms of
the Guidelines).
(b) If
Executive dies or becomes disabled, all options which have not
vested will accelerate and vest immediately, and, in the event of
Executive’s death, all option rights will transfer to
Executive’s representative. If Executive’s employment
terminates by reason of death or disability, Executive or
Executive’s representative may
-5-
exercise all
unexercised options within three years after such death or
disability or the expiration date of the option, whichever is
sooner.
(c) If
Executive dies, becomes disabled or retires, performance shares
awarded to such Executive pursuant to the Guidelines shall
immediately vest, but be valued and awarded at the times and in the
manner awarded to other plan participants pursuant to the terms of
such Guidelines.
(d) If
there is a Change in Control, then all options and performance
shares that have not vested will accelerate and vest immediately.
Performance shares awarded to Executive pursuant to the Guidelines
shall be valued at 100 percent as though the Company had
achieved its target for each relevant plan period. The Executive
shall be entitled to receive one share of the Company’s
common stock upon the vesting of each Performance Share. Upon a
Change in Control, the Executive shall have the right to require
the Company to purchase, for cash, and at fair market value, any
shares of stock purchased upon exercise of any option or received
upon the vesting of any Performance Share. (Terms used in this
Section, unless defined in this Employment Agreement, are as
defined in the SPA.)
4.1 Other
Benefits . Executive shall be entitled to the
following:
|
