[Senior Executive and Manager
Grants]
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Nonqualified Stock Option Award
Agreement
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Under the 2006 Equity and
Performance
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Kaiser Aluminum
Corporation
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Kaiser Aluminum Corporation
2006 Equity and
Performance Incentive Plan
Nonqualified Stock Option Award Agreement
You have been
selected to receive an option to purchase shares (the “Common
Shares”) of common stock, par value $0.01 per share
(“Common Stock”), of Kaiser Aluminum Corporation, a
Delaware corporation (the “Company”), pursuant to the
Kaiser Aluminum Corporation 2006 Equity and Performance Incentive
Plan (the “Plan”), as specified below:
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Number of
Common Shares for which Option is Exercisable
:
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Option
Price: $______ per share
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Vesting of
Option : Except as hereinafter provided, the Option shall vest
and become exercisable as follows:
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Cumulative Number of Shares
for
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Number of Shares for
Which
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Which Option is
Exercisable
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Date
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Option Becomes
Exercisable
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(assuming no prior
exercise)
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THIS NONQUALIFIED
STOCK OPTION AWARD AGREEMENT, effective as of the Date of Grant set
forth above (this “Agreement”), represents the grant of
an option to purchase Common Shares by the Company to the Optionee
named above, pursuant to the provisions of the Plan (the
“Option”).
The Plan provides
a complete description of the terms and conditions governing the
Option. If there is any inconsistency between the terms of this
Agreement and the terms of the Plan, the Plan’s terms shall
completely supersede and replace the conflicting terms of this
Agreement. All capitalized terms shall have the meanings ascribed
to them in the Plan, unless specifically set forth otherwise
herein. The parties hereto agree as follows:
1. Employment with the Company . Except as may
otherwise be provided in Sections 5 or 6 of this Agreement,
the Option granted hereunder is granted on the condition that the
Optionee remains an Employee of the Company from the Date of Grant
through (and including) the date or dates on which the Option vests
as set forth in the table above.
1
This grant of the
Option shall not confer any right to the Optionee (or any other
Optionee) to be granted Option Rights or other Awards in the future
under the Plan.
2. Type
of Option . The Option is intended to be a nonqualified stock
option and shall not be treated as an “incentive stock
option” within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended.
3. Exercise and Payment of Option .
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(a)
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To
the extent exercisable, the Option may be exercised in whole or in
part from time to time. The Option Price shall be payable
(i) in cash or by check acceptable to the Company or by wire
transfer of immediately available funds, (ii) in Common Shares
(excluding shares of Restricted Stock) owned by the Optionee for at
least 6 months (which Common Shares shall be valued for such
purpose based on the Market Value per Share on the date of
exercise), or (iii) by a combination of such methods of
payment; provided, however, that the payment method in Common
Shares will not be available at any time that the Company is
prohibited from purchasing or otherwise acquiring Common
Shares.
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(b)
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To
the extent permitted by law, the payment of the Option Price may be
deferred and payable by the Optionee from the proceeds of a sale
through a bank or broker on a date satisfactory to the Company of
some or all of the Common Shares to which such exercise
relates.
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4. Termination of Option . Notwithstanding any other
provision of this Agreement, the Option shall terminate ten years
from the Date of Grant (the “Termination Date”) unless
terminated earlier pursuant to Section 5.
5. Termination of Employment .
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(a)
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By Death . In the event the Optionee ceases
to be an Employee of the Company by reason of death prior to the
Termination Date, the unexercised portion of the Option held by the
Optionee at the time of death shall become fully vested and
immediately exercisable by such Person or Persons as shall have
been named as the Optionee’s beneficiary, or by such Persons
that have acquired the Optionee’s rights under the Option by
will or the laws of descent and distribution. The Option shall
terminate on the earlier of (i) the second anniversary of the
death of the Optionee and (ii) the Termination
Date.
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(b)
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By Disability
. In the event the
Optionee ceases to be an Employee of the Company by reason of
Disability (as defined in this Section 5(b)) prior to the
Termination Date, the unexercised portion of the Option held by the
Optionee at the time of disability of the Optionee shall become
fully vested and immediately exercisable. The Option shall
terminate on the earlier of (i) the second anniversary of the
Optionee ceases to be an Employee of the Company by reason of
Disability and (ii) the Termination Date.
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“Disability” shall be
defined as a total and permanent disability as a result of
bodily
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2
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injury, disease or mental disorder
which results in the Optionee’s entitlement to long-term
disability benefits under the Kaiser Aluminum Self-Insured Welfare
Plan or the Kaiser Aluminum Salaried Employees Retirement
Plan.
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(c)
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Involuntary Termination Other Than
for Cause or Detrimental Activity; Termination for Good
Reason . In
the event the Optionee ceases to be an Employee of the Company
prior to the Termination Date because either (i) the Company
or any of its Subsidiaries terminates such employment for any
reason other than a termination for Cause or other Detrimental
Activity or (ii) the Optionee terminates his or her employment
for Good Reason, any unexercised portion of the Option shall become
fully vested and immediately exercisable. The Option shall
terminate on the earlier of (i) the second anniversary of the
date on which the Optionee ceases to be an Employee of the Company
for any reason set forth in this Section 5(c) and (ii) the
Termination Date.
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(d)
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For Other Reasons
. In the event the
Optionee ceases to be an Employee of the Company prior to the
Termination Date for any reason other than the reasons set forth in
Section 5(a), 5(b) or 5(c) of this Agreement prior to the
Termination Date, any unvested portion of the Option held by the
Optionee at the time of employment termination shall be forfeited
by the Optionee. Any portion of the Option that is vested but
unexercised prior to the termination of employment pursuant to this
Section 5(d), shall terminate on the earlier of (i) the
date that is ninety (90) days after the Optionee ceases to be an
employee and (ii) the Termination Date.
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6. Change
in Control . Notwithstanding anything to the contrary in this
Agreement, in the event of a Change in Control of the Company prior
to the Termination Date while the Optionee is an Employee of the
Company, any unexercised portion of the Option shall become fully
vested and immediately exercisable by the Optionee.
7. Restrictions on Transfer . The Option may not be
sold, transferred, pledged, assigned or otherwise alienated or
hypothecated (a “Transfer”), other than by will or the
laws of descent and distribution or pursuant to a qualified
domestic relations order. If any Transfer, whether voluntary or
involuntary, of the Option is made other than in accordance with
this Agreement or the Plan, or if any attachment, execution,
garnishment or lien shall be issued against or placed upon the
Option, the Optionee’s right to the Option shall be
immediately forfeited by the Optionee and all obligations of the
Company under this Agreement shall terminate.
8. Detrimental Activity . If the Optionee, either
during employment by the Company or a Subsidiary or within one
(1) year after termination of such employment, shall engage in
any Detrimental Activity, and the Committee shall so find,
forthwith upon notice of such finding, the Optionee
shall:
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(a)
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Forfeit any unexercised portion of
the Option;
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(b)
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Return to the Company, in exchange
for payment by the Company of any cash amount actually paid in
exercise of any portion of the Option by the Optionee (unless such
payment is prohibited by law), all Common Shares that the Optionee
has not disposed of that were acquired by the Optionee following
exercise of the
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Option within one (1) year
prior to the date of the commencement of such Detrimental Activity;
and
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(c)
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With respect to any Common Shares so
acquired upon exercise of the Option that the Optionee has disposed
of, pay to the Company in cash the difference between:
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(i)
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any
cash amount actually paid therefor by the Optionee pursuant to the
Plan, and
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(ii)
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the
Market Value per Share of the Common Shares on the date of such
acquisition.
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To the extent
that such amounts are not paid to the Company, the Company may, to
the extent permitted by law, set off the amounts so payable to it
against any amounts that may be owing from time to time by the
Company or a Subsidiary to the Optionee, whether as wages, deferred
compensation or vacation pay or in the form of any other benefit or
for any other reason.
9. Beneficiary Designation . The Optionee may, from
time to time, name any beneficiary or beneficiaries (who may be
named contingently or successively) to whom any benefit under this
Agreement is to be paid in case of the Optionee’s death
before the Optionee receives all of such benefit. Each such
designation shall revoke all prior designations by the Optionee,
shall be in a form prescribed by the Company, and will be effective
only when filed by the Optionee in writing with the Vice President
Human Resources of the Company during the Optionee’s
lifetime. In the absence of any such designation, benefits
remaining unpaid at the Optionee’s death shall be paid to the
Optionee’s estate.
10. Continuation of Employment . This Agreement shall
not confer upon the Optionee any right with respect to continuance
of employment with the Company or any Subsidiary, nor shall this
Agreement interfere in any way with any right the Company or any
Subsidiary would otherwise have to terminate the Optionee’s
employment or other service at any time.
11. Adjustments . The Committee may make or provide for
such adjustments in the numbers of Common Shares covered by this
Agreement, and in the kind of shares covered hereby, as the
Committee, in its sole discretion, exercised in good faith, may
determine is equitably required to prevent dilution or enlargement
of the rights of the Optionee that otherwise would result from (i)
any stock dividend, stock split,
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