Exhibit 10.11
EXECUTION VERSION
Management Equity Investment and Incentive Term Sheet

     
Name:
  Kyle D. Lorentzen (“you”).
 
   
Effective Date:
  May 5, 2008.
 
   
Term:
  Two years, commencing on the Effective Date, subject to earlier termination by
either party; term of employment shall automatically be renewed for consecutive
one-year terms at the end of the initial term unless either party gives at least
90 days written notice of its intention not to renew prior to the expiration of
a term.
 
   
Position:
  Chief Operating Officer of Noranda Aluminum, Inc. (the “Company”).
 
   
Base Salary:
  $310,000. 
 
   
Annual Bonus:
  Targeted annual bonus amount is 65% of base salary, with target payout
primarily dependent upon achievement of the targets set forth for you in the
Company’s bonus plan.
 
   
Employee Benefits:
  You will participate in the employee benefit plans made available to senior
executives of the Company.
 
   
Vacation:
  You will be entitled to four weeks per annum of paid vacation.
 
   
Severance:
  In the event that your employment is terminated by the Company without Cause
or you resign your employment for Good Reason, subject to your execution and
non-revocation of a release, the Company will pay you (i) severance in an amount
equal to your then-current base salary for a period of 12 months (the “Severance
Period”), and (ii) a pro rata portion of your annual bonus with respect to the
portion of the year in which your termination occurs based on the Company’s
actual performance for such full year and payable at such time as annual bonuses
are otherwise paid by the Company. Amounts owed under (i) of this paragraph
shall be payable in accordance with the Company’s regular payroll practices in
the same amounts per payroll cycle in effect immediately prior to termination
until the end of the calendar year in which termination occurs and then in a
lump sum payable in the first month of the year following termination. The
Company will also provide you (and your eligible dependants) continued health
benefits during any notice period as if you were covered by the Company’s
general severance plan for executives.
 
   
 
  You will not be entitled to any severance (other than accrued and

 

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  unpaid Base Salary) in the event that your employment with the Company is
terminated for Cause or you resign without Good Reason.
 
   
Initial Share Grant:
  As soon as practicable following the date hereof, Noranda Aluminum Holding
Corporation (the “Parent”) will grant you 25,000 shares of Parent common stock
(such shares, the “Initial Shares”). The Initial Shares shall not be taken into
account in computing any benefits or entitlements under any benefit or incentive
plan of the Company, the Parent or their respective affiliates or agreement
between the Company, the Parent or any of their respective affiliates and you
including, without limitation, this term sheet.
 
   
Initial Option Grant:
  As soon as practicable following the date hereof, you will be granted options
to purchase 50,000 shares of Parent common stock (the “Initial Options”). The
Initial Options will have an exercise price equal to the fair market value of
Parent common stock on the date of grant (which is currently $20.00 per share of
Parent common stock).

The Initial Options will vest in two categories, provided that you are employed
with the Company and its subsidiaries through each applicable vesting date:

  (i)   50% of the Initial Options (“Tranche A Options”) will vest in equal
tranches on each of the 12th, 24th, 36th, 48th and 60th month anniversaries of
the Effective Date; and     (ii)   50% of the Initial Options (“Tranche B
Options”) will vest at such time as the Investor realizes at least a 25%
annualized rate of return from the Effective Date (when taking into account the
equity value of the Parent as of immediately after the Effective Date), based on
cash proceeds received by the Investor.

     
 
  In the event of a sale of the Parent, all unvested Tranche A Options shall
vest on the earlier of (i) the 18-month anniversary of the consummation of such
sale or (ii) termination of your employment without Cause or for Good Reason
during such 18-month period. Your unvested Tranche A options will otherwise
continue to vest in accordance with the schedule set forth above.
 
   
 
  The Initial Options will generally have a 90-day post-termination exercise
period (180 days for death or disability), except that all options are forfeited
on a termination for Cause.
 
   
 
  The Initial Options will have a scheduled term of no less than 10

 

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  years.
 
   
Subsequent Share
Purchase:
  During your employment with the Company, you will have the right, upon notice
to the Company of not less than 1 business day, to purchase an additional number
of shares of Parent common stock equal to the quotient of $250,000 divided by
the fair market value of Parent common stock on the date that you purchase the
Subsequent Shares (the number of shares of Parent common stock you actually
purchase, the “Subsequent Shares”). Your purchase price per share of the
Subsequent Shares (the “Subsequent Shares Purchase Price”) will be equal to the
fair market value of Parent common stock on the date that you purchase the
Subsequent Shares (such date, the “Subsequent Shares Grant Date”). The
Subsequent Share purchase shall be conditioned upon your execution of a
subscription agreement in substantially the form customarily used by the
Company.
 
   
Subsequent Options
Grant:
  In the event that you purchase the Subsequent Shares, the Company shall grant
to you a number of options to purchase shares of Parent common stock equal to
the number of Subsequent Shares you purchase (such options, the “Subsequent
Options”). The Subsequent Options will have an exercise price equal to the
Subsequent Shares Purchase Price.
 
   
 
  The Subsequent Options shall be subject to the terms of an option agreement in
substantially the form customarily used by the Company.
 
   
 
  The Subsequent Options will vest at such time as the Investor realizes at
least a 30% annualized rate of return from the Subsequent Shares Grant Date
(when taking into account the equity value of the Parent as of immediately after
the Subsequent Shares Grant Date), based on cash proceeds received by the
Investor, provided that you are employed with the Company and its subsidiaries
through such vesting date.
 
   
 
  The Subsequent Options will generally have a 90-day post-termination exercise
period (180 days for death or disability), except that all options are forfeited
on a termination for Cause.
 
   
 
  The Subsequent Options will have a scheduled term of no less than 10 years.
 
   
Right to Repurchase:
  In the event that the Company, or its applicable subsidiary, terminates your
employment for Cause or you terminate your employment without Good Reason prior
to May 29, 2014, each of Apollo Management VI, LP and Apollo Alternative Assets,

 

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  L.P. (collectively, the “Investor”) and the Parent shall each have the right
to repurchase all of your common stock (including common stock that you acquire
due to the exercise of Initial Options or Subsequent Options) at the lesser of
(i) fair market value (as determined by the Board of Directors of the Parent in
good faith) and (ii) your original purchase price (or, with respect to the
Initial Shares, the fair market value on the date of grant). If your employment
is terminated or you resign for any reason other than the reasons set forth in
the prior sentence, the Investor and the Parent shall each have the right to
repurchase all of your common stock (including common stock that you acquire due
to the exercise of Initial Options or Subsequent Options) at fair market value.
 
   
 
  These repurchase rights must generally be exercised within 90 days following
your termination of employment. However, if necessary to avoid liability
accounting, the repurchase of shares you receive in settlement of Initial
Options or Subsequent Options will not take place until six months and one day
following the exercise of such Initial Options or Subsequent Options. Repurchase
rights will expire on an IPO.
 
   
Company Shareholder
Agreement:
  You will be party to the existing Parent securityholders agreement (with
respect to which you will enter into an adoption agreement), a subscription
agreement, and an option agreement providing for, among other things:

  •   customary tag-along rights (subject to customary underwriter cutbacks in
an IPO) that will permit you to sell your shares of common stock, on a pro rata
basis, in any transaction following which the Investor disposes of at least 10%
of its position;     •   customary drag-along rights which will require you to
sell your shares of common stock, on a pro rata basis, in any transaction
following which the Investor disposes of at least 10% of its position;     •  
piggy back registration rights entitling you to register your shares of Common
Stock (or other applicable securities) in connection with registered offerings,
subject to customary limitations (such as compliance with underwriter cutbacks,
no right to participate in registrations statements on Form S-4 or S-8, etc.).
Piggyback registration rights shall not apply in an IPO unless the Investor is
selling shares in the IPO;

 

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  •   permitted transfers for estate-planning purposes; and     •  
non-compete/non-solicitation provisions.

     
Restrictive Covenants:
  Noncompetition with the Company or any of its affiliates and no hire and
nonsolicitation of the Company’s and its affiliates’ employees, independent
contractors or customers (including former employees and independent
contractors) as set forth in Section 9 of Parent’s securityholders agreement,
except that the “Restricted Period” shall apply while you are employed by the
Company and for a period of one year after termination of employment for any
reason (two years with respect to any rolled aluminum manufacturer). Standard
ongoing confidentiality obligation will apply. For the avoidance of doubt, the
restrictive covenants shall survive termination of the term of employment.
 
   
Cause:
  For purposes of the foregoing, “Cause” means a termination of your employment
by the Company or any of its subsidiaries based on (i) your commission of a
felony crime or a crime of moral turpitude, (ii) your willful commission of a
material act of dishonesty involving the Company or any of its affiliates or
subsidiaries, (iii) your material breach of your obligations under any agreement
entered into between you and the Company or any of its subsidiaries and
affiliates, (iv) your willful or continued failure to perform your material
duties, (v) your material breach of the policies or procedures of the Company or
any of its subsidiaries, or (vi) any other willful misconduct which causes
material harm to the Company or any of its affiliates or subsidiaries or their
business reputations, including due to any adverse publicity provided, however,
that none of the events described in the foregoing clauses (iii), (iv), (v) or
(vi) shall constitute Cause unless the Company, or its applicable subsidiary
that employs you, has notified you in writing describing the events which
constitute Cause and then only if you fail to cure such events within fifteen
(15) days after receipt of such written notice (provided that, in the event such
breach is not curable, no notice period shall be required).
 
   
Good Reason:
  For purposes of the foregoing, “Good Reason” means your voluntary resignation
after any of the following actions are taken by the Company or any of its
subsidiaries without your consent (i) a material reduction in your base salary
or bonus potential (but not including any diminution related to an
across-the-board compensation reduction applying to senior management of the
Company and its subsidiaries generally), (ii) a material reduction or adverse
change in your title, duties, or responsibilities each as in effect immediately
after the Effective Date, or (iii) a notice by

 

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  the Company of non-extension of the term of employment; provided, however,
that none of the events described in the foregoing clauses (i), (ii) or (iii)
shall constitute Good Reason unless you have notified the Company, or its
applicable subsidiary that employs you, in writing describing the events which
constitute Good Reason and then only if the Company or such subsidiary fails to
cure such events within thirty (30) days after receipt of such written notice.

 

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By signing below, the parties agree that this term sheet will be binding upon
the parties and constitutes a binding commitment on the part of the undersigned
executive to purchase the Purchased Equity.

                  NORANDA ALUMINUM, INC.    
 
           
 
  BY:   /s/ Alan Brown    
 
     
 
Name: Alan Brown    
 
      Title: Vice President – Human Resources    
 
                NORANDA ALUMINUM HOLDING CORPORATION    
 
           
 
  BY:   /s/ Alan Brown     
 
           
 
      Name: Alan Brown    
 
      Title: Secretary and General Counsel    

    /s/ Kyle D. Lorentzen   Kyle D. Lorentzen