SEVERANCE PROTECTION
AGREEMENT
THIS AGREEMENT, made as of March 20, 2007, by
and between the Company (as hereinafter defined) and Giulio Casello
(the “Executive”).
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 Vice President –
Alumina and Bauxite 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.
2.1.
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
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(i)
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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,
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(ii)
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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
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(iii)
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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 ”);
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(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).
(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 . The Notice of
Termination shall also specify the relevant Termination
Date.
2.10.
Pro Rata Bonus
. For purposes of this Agreement,
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