exv10w1



 






Exhibit 10.1




NON-EXCLUSIVE CONSULTING AGREEMENT



This Non-Exclusive Consulting Agreement (“Agreement”) is entered into and effective as of the 16th
day of August, 2005, between Edward F. Houff (“Consultant” or “Houff”), and Kaiser Aluminum &
Chemical Corporation, a corporation with offices located at 27422 Portola Parkway, #350, Foothill
Ranch, CA 92610-2831 (“Kaiser”).




     WHEREAS, effective August 15, 2005, Kaiser has terminated Consultant as a Kaiser employee
“Without Cause,” and such termination constitutes a “Pro-Rating Event” for the purposes of
determining Consultant’s entitlement to severance and termination benefits under the Key Employment
Retention Program (“KERP”) approved by the Bankruptcy Court in Kaiser’s chapter 11 proceedings,
including Consultant’s Severance Agreement, Retention Agreement and Change in Control Severance
Agreement (a summary listing of such benefits and the references thereto is attached to this
Agreement and incorporated herein by reference); and



     WHEREAS, Consultant acknowledges that as a result of termination of Consultant’s employment
Consultant is not entitled to any benefits under his Change in Control Severance Agreement (the
“CIC Agreement”) and, in recognition of the foregoing, has, by execution of this Agreement,
permanently waived and released Kaiser from and against any and all claims for “Change in Control”
and “Tax Gross-Up” termination benefits in connection with the KERP, including any claims for
benefits under his CIC Agreement; and



     WHEREAS, Kaiser desires to have Consultant perform certain services for Kaiser as set forth
herein, and Consultant is willing to perform such services;



     NOW THEREFORE, in consideration of the mutual promises contained herein the parties hereto
agree as follows:



1. Term




     The term of this Agreement shall commence as of August 1, 2005 and shall continue in effect
for six months, through February 14, 2006. Termination of this Agreement, except for cause, before
February 14, 2006, may occur only by mutual consent or the death or permanent and total disability
of Consultant as a result of bodily injury, disease or mental disorder. This Agreement may be
renewed for such term, and upon such terms and conditions, as the parties may agree in a further
writing.



2. Services




     2.1 Consultant shall perform non-exclusive consulting services for Kaiser primarily in the
nature of the services provided when consultant was Chief Restructuring Officer and Senior Vice
President of Kaiser, which employment ended on August 15, 2005. A listing of subject areas in which
Kaiser and Consultant have agreed that Consultant will provide services to the Company is attached
to this Agreement and incorporated herein by reference. To the extent any services will not be
completed by the expiration of the term of this Agreement and Consultant and Kaiser have not agreed
to the terms of an extension, Consultant shall fully cooperate with Kaiser in all matters relating
to the winding up of Consultant’s pending work on behalf of Kaiser and the orderly transfer of any
such pending work to other employees or representatives of Kaiser as may be designated by Kaiser.



     2.2 Any additional services by Consultant beyond those referenced in paragraph 2.1 above shall
be performed by Consultant as agreed between Consultant and Kaiser and as authorized by Kaiser’s
CEO, Jack A. Hockema, or such other person as Consultant may agree.



     2.3 Consultant shall at all times act in accordance with his own best judgment, experience and
expertise as an independent Consultant. Consultant shall routinely communicate the status and



 









 




progress of the services being performed by Consultant to Kaiser’s CEO, General Counsel, CFO,
senior management and outside professionals, as appropriate, and solicit input and direction with
respect to tactical and strategic decisions required to be made in connection with the services to
be performed that are likely to affect the business, operations or liabilities of Kaiser and its
affiliates both during and after emergence.




     2.4 Consultant may perform consulting services for persons other than Kaiser so long as such
other consulting services do not present an actual conflict of interest for Consultant. Consultant
agrees to inform Kaiser when consulting services are being performed for others, and will provide a
certification that no conflict exists. Consultant will arrange his schedule and other work to
ensure that Kaiser work remains the primary priority for Consultant’s work and remains the first
call on Consultant’s resources and time. Should Consultant request a waiver of any potential
conflict with respect to either interest or time, Kaiser will not unreasonably withhold its consent
to waiver.



3. Fees and Reimbursements/Invoices




     3.1 For the initial term of the Agreement, Consultant’s compensation will be as
follows:



          3.1.1 A base fee of $43,200 per month (“Base Fee”), exclusive of expenses, for which
Consultant will provide up to 120 hours of services. Travel time that is not covered by other work
will be counted at one-half the number of hours, and there will be no premium for weekend or
holiday work. This amount will be pro-rated for the partial months of August 2005 and February
2006.




          3.1.2 Monthly hours worked in excess of 120, up to a maximum of 200 (“Additional Fee”),
exclusive of expenses, will be billed at $360 per hour, subject to the same terms and conditions
for travel, weekend and holiday work as provided in paragraph 3.1.1.




          3.1.3 Regardless of the number of hours actually worked in any month, Consultant agrees that
Kaiser will not be charged for any work in excess of 200 hours per month, exclusive of expenses.




     3.2 Both parties agree that Consultant is not an employee for state or federal tax purposes.
Consultant shall be solely responsible for payment of all FICA and federal, state and local income
taxes payable on compensation received hereunder. All travel time in connection with this Agreement
will be prorated as required and compensated at the above rates. In addition, upon submission of
proper documentation, Kaiser will reimburse Consultant for all reasonable and customary expenses
incurred while providing consulting services. The term “reasonable and customary” shall mean
expenses incurred consistent with Kaiser’s corporate policies on reimbursement of travel and
related expenses and also include costs for telephone, fax and mobile phone charges when used for
Kaiser business, but shall not include any costs or expenses incurred by Consultant to provide his
own working environment (office space, parking, etc.).



     3.3 Consultant’s compensation and expense reimbursement shall be paid as follows:



          3.3.1 Beginning in September 2005 and each month thereafter during the term of the Agreement,
Consultant’s Base Fee will be paid automatically by Kaiser by wire transfer monthly on the first
business day between the first and fifth day of the month. Consultant will also be paid in
September 2005 for the pro-rated Base Fee for the period from August 16-August 31, 2005.




					
	 	 	 	 	 
	 
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	 	Non-Exclusive Consulting Agreement

Edward. F. Houff






 









 





          3.3.2 Beginning in September 2005 and each month thereafter during the term of the Agreement,
by the fifth day of the month, Consultant will provide an invoice for the previous month that
provides a summary of time and activities as to the Base Fee, and a reasonably detailed description
of services and time, rounded up to the nearest tenth of the hour for any Additional Fee earned
during the previous month. Consultant will also submit a reasonably detailed schedule of expenses
for reimbursement including receipts. Bills and receipts may be submitted electronically.




          3.3.3 Statements for services and requests for expense reimbursement shall be submitted to



Kaiser Aluminum & Chemical Corp

Attn: John M. Donnan, Vice President and General Counsel

27422 Portola Parkway, #350

Foothill Ranch, CA 92610-2831

Fax: (949) 614-1867

john.donnan@kaiseraluminum.com



          3.3.4 Kaiser will promptly review the statements submitted with respect to the Additional Fee
and requests for expense reimbursement, and will pay all undisputed Additional Fee and expense
reimbursement amounts within 30 days of Kaiser’s receipt of such statement. Kaiser may request
additional information concerning the content of the Base Fee description and time but may not
withhold payment of the Base Fee. Questions regarding any Additional Fee and/or expenses will be
addressed promptly with a view toward reaching an agreement, and payment for any questioned
Additional Fee and/or expense amounts will be paid on the later of 30 days after the statement was
received or 10 days after the questions are resolved.




4. Independent Contractor




     4.1 Consultant shall perform services hereunder as an independent contractor and not as an
employee. He shall have no power or authority to act for, legally represent, or commit Kaiser in
any way unless Kaiser expressly authorizes him to do so.



     4.2 Consultant understands and agrees that during the period of this Agreement and any
extensions thereto he is not entitled to participate in or accrue benefits, and Consultant hereby
expressly waives any claim to participate in or accrue benefits, under Kaiser’s employee benefit
plans, including but not limited to KRP, Plan B, Severance Pay and Benefits Continuation, Personal
Choice, Life Insurance, Sick Leave with Salary Continuation, Long Term Disability, Accidental Death
and Dismemberment, Medical and Dental plans for services performed hereunder, except as he is
entitled to receive any such benefits as a result of his termination without cause as an employee
on August 15, 2005. For the avoidance of doubt, the parties agree that any and all benefits to
which Consultant may be entitled must derive, if at all, from his term of employment at Kaiser, and
not from his service as a Consultant. In addition, Consultant is not entitled to participate in any
employee bonus plans as a result of his service as a Consultant.



5. Protection of Confidential Information




     5.1 All work product of Consultant in the performance of this Agreement, including without
limitation, analyses, reports, photographs, data and other information, including any inventions or



					
	 	 	 	 	 
	 
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Edward. F. Houff






 









 




discoveries made by Consultant, shall be the property of Kaiser and shall be considered
Confidential Information. Any information disclosed to Consultant by Kaiser or others in
connection with service for Kaiser under this Agreement shall also be considered Confidential
Information, and shall, as between Kaiser and Consultant, be the property of Kaiser.




     5.2 Except as Kaiser may authorize in writing, Consultant shall not disclose
any Confidential Information or use it for any purpose other than the performance of his services
under this Agreement. Promptly upon Kaiser’s request, and in any event upon the termination of
this Agreement, Consultant shall deliver to Kaiser all such material (including all copies made
thereof) which Consultant has in his possession.




     5.3 Upon termination of this Agreement for any reasons, Consultant will, except as otherwise
agreed to in writing by the parties, return to Kaiser all property belonging to Kaiser, including
without limitation, computer equipment, computer programs, cellular telephones, beepers or other
property belonging to Kaiser, and documents, property and data of any nature and in any form,
including electronic or magnetic form, reflecting any confidential information described above.



6. Applicable Law/Entire Agreement




     6.1 This Agreement shall in all respects be governed by and construed in accordance with the
laws of the State of Texas, except that conflicts of laws/provisions of Texas law shall not be
applied for the purpose of making other law applicable.



     6.2 This Agreement, the Severance Agreement, the Retention Agreement and that certain Release
executed pursuant to the terms of the Severance Agreement constitute the entire agreement and
supersedes all prior agreements and understandings, both written and oral, between the parties
relating to Consultant’s activities as a Consultant and the termination of Consultant’s employment
with Kaiser, including, but not limited to the effect of such termination under the KERP and
related agreements. It may not be amended, supplemented or superseded except by a written
agreement signed by both parties.



7. Dispute Resolution




     7.1 If a dispute arises out of or related to this Agreement, and if the dispute cannot be
settled through direct discussions, then Kaiser and Consultant agree to first endeavor to settle
the dispute in an amicable and good faith manner by mediation before a mutually agreeable mediator,
before having recourse to any other proceeding or forum.



     7.2 Any controversy or claim arising out of or relating to this Agreement or the breach
thereof that cannot be resolved by good faith mediation shall on the written request of the
complaining party served on the other within thirty (30) calendar days of the event which forms the
basis of the controversy or claim, be submitted and resolved by final and binding arbitration in a
manner consistent with the rules of the American Arbitration Association. Service of the written
demand for arbitration shall be made by certified mail, with a return receipt requested. Time is
of the essence. If the request is not served within said thirty (30) days of the date a cause of
action arises, the complaining party’s claim(s) shall be forever waived and barred before any and
all forums, including, without limitation, arbitration or judicial forums. The Arbitrator shall
have no authority to alter, amend, modify or change any of the terms of the Agreement. The
decision of the Arbitrator shall be final and binding and judgment thereon may be



					
	 	 	 	 	 
	 
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Edward. F. Houff






 









 




entered in any court having jurisdiction thereof. The parties shall equally divide all costs
of the arbitration, but the parties shall bear their own expenses for attorney’s fees and witness
costs.




     7.3 The parties intend that the dispute resolution procedures outlined herein are mandatory
and shall be the exclusive means of resolving all disputes, between Consultant and Kaiser and/or
Kaiser’s employees, directors, officers, officers or managers involving or arising out of this
Agreement. However, this provision does not prevent either Party from first seeking injunctive
relief if necessary to enforce the terms of this Agreement.



8. Notices




          All notices, correspondence, consents, requests, demands, and other communications hereunder
shall be in writing and shall be deemed to have been duly given when actually received. Such
notices may be given personally, by registered or certified mail, by email, or by facsimile
transmission:





			
	if to Consultant:	 	Edward F. Houff

420 McGowen Street

Houston TX 77006

Fax: 800-853-3676

Phone: 713-522-0835

Email: efh446@gmail.com
	 
	if to Kaiser:	 	Kaiser Aluminum & Chemical Corp.

Attn: John M. Donnan, Vice President and General Counsel

27422 Portola Parkway, #350

Foothill Ranch, CA 92610-2831

Phone: (949) 614-1767

Fax: (949) 614-1867

john.donnan@kaiseraluminum.com





or to such other address as either party shall have last designated by notice to the other party hereto.




9. Waiver




     Failure of either Kaiser or Consultant to enforce at any time any of the provisions of this
Agreement shall in no way be construed to be a waiver of such provisions nor in any way affect the
validity of this Agreement or any part thereof or the right of either party thereafter to enforce
each and every provision thereof. The waiver of any provisions of this Agreement or any breach
thereof shall not constitute waiver of any subsequent breach of the same or any other provisions of
this Agreement.



10. Knowing and Voluntary Waiver




     Consultant understands and agrees that he:




	 	a.	 	Has carefully read and fully understands all of the provisions of this
Agreement, the KERP and agreements entered into by Consultant under the KERP, including
Consultant’s Severance Agreement, Retention Agreement and CIC Agreement and the





					
	 	 	 	 	 
	 
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	 	 	 	effect of his termination of Employment under this Agreement, the KERP and
Consultant’s Severance Agreement, Retention Agreement and CIC Agreement.
	 
	 	b.	 	Has had an opportunity to negotiate the terms of this Agreement.
	 
	 	c.	 	Is, through this Agreement, waiving right to employee benefits and/or any
future claim to benefits set forth in paragraph 4.2 of this Agreement, stemming from
activities as a Consultant during the period of this Agreement on and after August 1,
2005.
	 
	 	d.	 	Knowingly and voluntarily intends to be legally bound by the terms of this
Agreement.
	 
	 	e.	 	Was advised and hereby is advised in writing to consider the terms of this
Agreement and consult with an attorney of his choice prior to executing this Agreement.





11. Survival




     The obligations of Consultant under Section 5, 6 and 7 of this Agreement shall survive
termination or expiration of this Agreement.



     IN WITNESS WHEREOF, the parties have executed this Consulting Agreement as of the date first
set forth above.



	 	 	 	 	 	 	 
	CONSULTANT:	 	KAISER ALUMINUM & CHEMICAL CORP.	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 


	 	 	 	 
	 	 
	Edward F. Houff

	 	 	 	John M. Donnan	 	 
	 

	 	 	 	Vice President and General Counsel	 	 






					
	 	 	 	 	 
	 
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Edward. F. Houff






 









 





List of Subject Areas as to which Kaiser Desires and Consultant Agrees to Provide Services



n Regularly Scheduled Omnibus and Special bankruptcy court hearings



n Disclosure Statement, POR, Solicitation, Confirmation hearings



n Hearings and appellate work relating to bankruptcy issues, including stay proceedings



n PBGC Appeal of Distress Termination



n Insurance coverage litigation and settlements



n Trentwood environmental matters



n Senior/Sub Note/Gramercy Subordination Litigation and liquidating plan confirmation and
appeals, including stay proceedings



n Asbestos and other Tort Claim resolution and negotiations



n Asbestos workers’ compensation



n Communications with committees and futures representatives



n C11 communications with the Board



n New Board Search Committee



n Environmental reorganization matters



n Claims resolution issues



n Monument Select litigation



n Testimony and/or declarations as required to support particular pleadings



n Other assignments as agreed



 



	 	 	 
	 


	 	 

	EFH Initials

	 	JMD Initials






					
	 	 	 	 	 
	 
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Edward. F. Houff






 









 





SUMMARY OF BENEFITS DUE AND REFERENCES

TO APPLICABLE BENEFIT AGREEMENTS





	n 	 	 All benefits that are due and payable to Consultant under the Kaiser Key Employee
Retention Program (KERP), Consultant’s Severance Agreement (“Severance Agreement”),
Consultant’s Retention Agreement, each as approved by the Bankruptcy Court in 2002 in
Kaiser’s chapter 11 proceedings, for a “Termination Without Cause” and a “Pro-Rating
Event,” as those terms are used in the appropriate documents that generally describe and
are specific to Edward F. Houff, will be paid as and when due under those plans and
agreements as a result of Mr. Houff’s termination effective August 15, 2005.
	 
	n 	 	 No material change or alteration to such benefits is intended from the KERP and related
plans and agreements that were approved by the Bankruptcy Court
	 
	n 	 	 These severance benefits include, as of the termination on August 15, 2005






	 	o	 	Base pay times a multiplier of 2
	 
	 	o	 	Withheld retention payments equaling $400,000
	 
	 	o	 	“Welfare benefits” for 2 years as provided for in the Severance Agreement and
all other benefits provided by the severance plan implemented at part of the KERP
(note: does NOT include car lease continuation)
	 
	 	o	 	Normal end of service benefits and rights as a Kaiser employee (e.g. unused
vacation days for 2005, accrued but unused for 2006) unrelated to Severance
Agreement






	n 	 	 Deferred benefits under the KERP/Severance program






	 	o	 	LTI for 2002 through 2004 calculated and paid in accordance with the LTI program
and KERP (half at emergence, half at emergence + 1 yr)






	n 	 	 Other bargained for benefits






	 	o	 	$25,000 one-time moving expense payment (to be paid upon the earlier of an
actual move or upon termination of the Agreement)
	 
	 	o	 	2005 Short-Term Incentive Compensation, prorated for the period from January 1
to August 15, 2005, not to exceed $25,000, to be paid before March 15, 2006.





 



	 	 	 
	 


	 	 

	EFH Initials

	 	JMD Initials






					
	 	 	 	 	 
	 
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	 	Non-Exclusive Consulting Agreement

Edward. F. Houff