AMENDED AND RESTATED SEVERANCE PROTECTION AGREEMENT
THIS
AGREEMENT, made as of March 19, 2007, by and between the
Company (as hereinafter defined) and Logan W. Kruger (the
“Executive”) restates that Severance Protection
Agreement between the Parties made as of December 13, 2005,
and includes amendments approved by the Compensation Committee
of the Board of Directors of the Company as of February 21,
2007.
WITNESSETH:
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 President and Chief Executive
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 Agreement with the Executive to provide
the Executive with certain benefits if 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 be effective as of March 20, 2007, and shall continue in
effect until December 31, 2008; provided, however, that commencing
on January 1, 2009, and on each January 1 thereafter, the term of
this Agreement shall automatically be extended for one 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 36 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 hereunder
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 any and all amounts or
rights earned, accrued or vested 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, (iv) bonuses, incentive compensation (other than the
Pro Rata Bonus (as hereinafter defined)), and such other benefits
as may be provided in Executive’s employment agreement with
the Company.
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, 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 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 Securities Exchange Act of 1934)
immediately after which such Person has “ Beneficial
Ownership ” (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934) of 20%
or more of the combined voting power of the Company’s
then outstanding Voting Securities or, in the case of Glencore
International AG and its affiliates (collectively, “
Glencore
”), Beneficial Ownership of 50% or more of such Voting
Securities; provided, however, that in determining whether a
Change in Control has occurred, Voting Securities which are
acquired by any Person other than Glencore 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);
(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 Securities Exchange Act of 1934) 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 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, 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
15% or more of the then outstanding Voting Securities) has
Beneficial Ownership of 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 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 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).
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, annual
bonus and any other incentive compensation, including
performance shares and options, 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 affiliated
companies, or (iii) pay to the Executive any compensation or
benefits to which he is entitled within five 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
offices where he was based 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 60 days;
(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
bonus or bonuses paid or payable to the Executive in 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).
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
