Document:

exv10w6

 

Exhibit 10.6

EMPLOYMENT AGREEMENT

     EMPLOYMENT AGREEMENT (this “Agreement”) dated as of July 6, 2006, between KAISER ALUMINUM
CORPORATION, a Delaware corporation (the “Company”), and Joseph P. Bellino (the “Executive”).

     The Company wishes to continue to employ the Executive, and the Executive wishes to continue
his employment with the Company, on the terms and conditions set forth in this Agreement.

     Accordingly, the Company and the Executive hereby agree as follows:

	1.	 	Employment; Duties and Acceptance.

     1.1.     Employment Duties. The Company hereby agrees to employ the Executive for the
Term (as defined in Section 2.1), to render exclusive and full-time services to the Company and its
and affiliates, in the capacity of executive vice president and chief financial officer of the
Company and to perform such other duties consistent with such position (including service as a
director or officer of any affiliate of the Company if elected) as may be assigned by the chief
executive officer of the Company or the Board of Directors of the Company (the “Board”); provided,
however, that the Executive may serve on the Board of Directors of one other business at any time
during the Term that does not compete with the Company and may participate in civic, charitable and
industry organizations to the extent that such participation does not materially interfere with the
performance of his duties hereunder. The Executive’s title shall be Executive Vice President and
Chief Financial Officer, or such other titles of at least equivalent level consistent with the
Executive’s duties from time to time as may be assigned to the Executive by the Board, and the
Executive shall have all authorities as are customarily and ordinarily exercised by executives in
similar positions in similar businesses in the United States. The Executive shall report to the
chief executive officer of the Company.

     1.2.     Acceptance. The Executive hereby accepts such employment and agrees to render
the services described above. During the Term, and consistent with the above, the Executive agrees
to serve the Company faithfully and to the best of the Executive’s ability, to devote the
Executive’s entire business time, energy and skill to such employment, and to use the Executive’s
best efforts, skill and ability to promote the Company’s interests.

     1.3.     Location. The duties to be performed by the Executive hereunder shall be
performed primarily at the Company’s offices in Foothill Ranch, California or such other location
as mutually agreed by the parties, subject to reasonable travel requirements consistent with the
nature of the Executive’s duties from time to time on behalf of the Company.

	2.	 	Term of Employment.

     2.1.     Term. The term of the Executive’s employment under this Agreement (the “Term”)
shall commence on the date hereof (the “Effective Date”), and shall continue until the earlier of
(i) May 15, 2009 and (ii) such earlier date on which the Term is terminated pursuant to Section 4.
The Term shall automatically be renewed and extended for successive periods of one (1) year unless
either party hereto shall have notified the other party hereto in writing that such

 

 

extension shall not take effect at least one (1) year prior to the end of the initial Term or
of any extension.

	3.	 	Compensation; Benefits.

     3.1.     Salary. As compensation for the services to be rendered pursuant to this
Agreement, the Company agrees to pay to the Executive during the Term a base salary, payable
monthly in arrears, at the initial annual rate of $350,000 (the “Base Salary”). On each
anniversary of the Effective Date or such other appropriate date as may be agreed by the parties
during the Term, the Company shall review the Base Salary and determine if, and by how much, the
Base Salary should be increased. Once the Base Salary has been increased hereunder, it shall not
be decreased without the Executive’s consent. All payments of Base Salary or other compensation
hereunder shall be less such deductions or withholdings as are required by applicable law and
regulations.

     3.2.     Bonus. In addition to the amounts to be paid to the Executive pursuant to
Section 3.1, if the Company achieves 100% or more of the Company’s target objectives for a fiscal
year of the Company, such target objectives which are recommended by the Executive and approved by
the Compensation Committee of the Board (the “Compensation Committee”) not later than March 31 of
such year, the Executive shall receive an annual bonus (an “Annual Bonus”) equal to the product of
(i) the Executive’s Base Salary at the rate in effect at the end of such fiscal year and (ii) 50%.
Should the Company achieve such target objectives in a fiscal year which are significantly beyond
expectations for the Company’s performance for such year, the 50% multiplier set forth in clause
(ii) of the preceding sentence shall be increased up to a maximum of 300% of the target bonus
opportunity (or 150% of Base Salary). A formula will be established to provide for recognition of
threshold objectives below such target objectives and for pro rata awards between the threshold
award opportunity and the maximum award opportunity. Any Annual Bonus earned hereunder shall be
payable not later than the 15th day of the third month following the end of the fiscal
year to which it relates. The Annual Bonus for 2006 shall not be prorated for the portion of the
year Executive is actually employed by the Company.

     In the event that the Executive’s employment shall terminate other than on a date which is the
last day of a fiscal year of the Company, the Executive’s target Annual Bonus with respect to the
fiscal year in which employment terminates shall be prorated for the actual number of days of the
Executive’s employment under this Agreement during the fiscal year in which occurs the Executive’s
termination of employment, and such Annual Bonus shall be payable to the Executive within ten (10)
business days following such termination of employment. Notwithstanding the foregoing, the
Executive shall be entitled to no Annual Bonus in respect of or the fiscal year of the Company in
which his Employment terminates if such termination is pursuant to Section 4.4.

     3.3.     Emergence Grant. As of the Effective Date, the Executive will be awarded a
one-time grant of 15,000 shares of restricted stock of the Company, subject to a three-year cliff
vesting schedule and other customary restrictions that shall lapse on the third anniversary of the
date of such award or earlier upon a Change of Control or the Executive’s retirement, death,
Disability, termination of employment under this Agreement other than for Cause or termination

2

 

by the Executive for Good Reason. For purposes of this Section 3.3, the term “retirement”
means the Executive’s termination of employment for any reason at or after the earlier of age 65.

     3.4.     Incentive Compensation. For fiscal year 2007 and each fiscal year thereafter,
the Executive will be eligible to receive grants of long-term incentive compensation, including,
but not limited to equity awards (such as restricted stock, stock options and performance shares)
having a target economic value of $450,000 for the fiscal year, on similar terms as grants made to
senior executives.

     3.5.     Business Expenses. The Company shall pay or reimburse the Executive for all
reasonable expenses actually incurred or paid by the Executive during the Term in the performance
of Executive’s services under this Agreement, subject to and in accordance with applicable expense
reimbursement and related policies and procedures as in effect from time to time.

     3.6.     Vacation. During each year of the Term, the Executive shall be entitled to a
paid vacation period or periods of four (4) weeks taken in accordance with applicable vacation
policy as in effect from time to time.

     3.7.     Benefits; Perquisites. During the Term, the Executive shall be entitled to
participate in those retirement plans, deferred compensation plans, group insurance, life, medical,
dental, disability and other benefit plans of the Company at the same level as those benefits are
provided by the Company from time to time to senior executives of the Company generally. Also,
during the Term, the Executive shall be entitled to fringe benefits and perquisites at the same
level as those benefits are provided by the Company from time to time to senior executives of the
Company generally. However, nothing herein shall require the Company to establish and/or maintain
any such plans. Upon the Effective Date, Executive shall be entitled to a car allowance under the
Runzheimer Car Allowance Program and a membership at the Country Club at Coto.

4. Termination.

     4.1.     General. Following any termination of the Executive’s employment, the Company
shall pay or provide to the Executive, or his estate or beneficiary, as the case may be, (i) Base
Salary earned through the date of such termination; (ii) except in the case of a termination
described in Section 4.4, any earned, but unpaid, annual cash incentive or other incentive awards,
including the Executive’s Annual Bonus earned pursuant to Section 3.2; (iii) a payment representing
the Executive’s accrued but unpaid vacation; (iv) any vested, but not forfeited benefits on the
date of such termination under the Company’s employee benefit plans, as determined in accordance
with the terms of such plans but subject to the provisions of Section 3.3 and 3.4; and (v) benefit
continuation and conversion rights to which the Executive is entitled under the Company’s employee
benefit plans.

     4.2.     Death. If the Executive shall die during the Term, the Term shall immediately
terminate and the Executive shall be entitled to no further payments or benefits hereunder, except
for those payments and benefits described in Section 4.1. All outstanding equity grants shall vest
in the manner provided in the applicable award (subject to the provisions of Section 3.3 and 3.4),

3

 

and any vested but unexercised grants shall become exercisable and shall remain so for the
period commencing on the date of such termination through the second anniversary of such
termination.

     4.3.     Disability. If during the Term the Executive shall become physically or mentally
disabled (a “Disability”), whether totally or partially, such that the Executive is unable to
perform the Executive’s principal services hereunder for a period of not less than ninety (90)
consecutive days, the Company may at any time after the last day of such period (provided that such
disability is continuing), by written notice to the Executive, terminate the Term. Upon
termination under this Section 4.3, all outstanding equity grants shall vest in the manner provided
in the applicable award (subject to the provisions of Section 3.3 and 3.4), and any vested but
unexercised grants shall become exercisable and shall remain so for the period commencing on the
date of such termination through the second anniversary of such termination. In addition to those
payments and benefits described in Section 4.1, the Executive shall be entitled to payments made to
the Executive pursuant to a Company insurance plan.

     4.4.     For Cause; Without Good Reason. If the Company terminates the Executive’s
employment for Cause or the Executive terminates his employment other than for Good Reason, the
Term shall terminate immediately and (i) the Executive shall be entitled to receive no further
amounts or benefits hereunder, except those payments and benefits described in Section 4.1 or as
required by law, (ii) all unvested equity grants pursuant to Section 3.3 and 3.4 shall be
immediately forfeited, and (iii) all vested but unexercised equity grants shall be forfeited on the
date which is ninety (90) days following such termination. For purposes of this Agreement, “Cause”
shall mean the Executive (A) being convicted of, or pleading guilty or no contest to, a felony
(except for motor vehicle violations); (B) engaging in conduct that constitutes gross misconduct or
fraud in connection with the performance of his duties to the Company, or (C) materially breaching
this Agreement which the Executive does not cure within thirty (30) days after the Company provides
written notice of such breach to the Executive. The Executive shall not terminate his employment
without Good Reason prior to the date which is thirty (30) days following the date on which the
Executive provides written notice of such termination to the Company; provided, however, that the
Company may waive such notice period in writing.

     4.5.     Without Cause; For Good Reason. If during the Term the Company terminates the
Executive’s employment without Cause or if the Executive terminates his employment with Good
Reason, the Term shall immediately terminate and the Executive shall be entitled to no further
payments or benefits hereunder other than his Accrued Benefits, except: (i) the Company shall make
a lump sum payment to the Executive within ten (10 ) business days of such termination in an amount
equal to two hundred percent (200%) of the sum of the Base Salary for the fiscal year in which
occurs the Executive’s termination of employment; (ii) continuing receipt of group insurance, life,
medical, dental, disability and other similar benefits described in Section 3.7 (to the extent to
which such are in place from time to time, but excluding perquisites) during the twenty-four month
period commencing on the date of such termination; and (iii) all outstanding equity grants shall
vest in the manner provided in the applicable award (subject to the provisions of Section 3.3 and
3.4), and any vested but unexercised grants shall become exercisable and shall remain so for the
period commencing on the date of such termination through the second anniversary of such
termination.

4

 

     For purposes of this Agreement, “Good Reason” shall mean, without the Executive’s consent, the
occurrence of any of the following during the Term: (A) any reduction in the Executive’s Base
Salary, target bonus opportunity or benefits pursuant to Section 3 of this Agreement without the
Executive’s prior consent; (B) a material change in the Executive’s position causing it to be of
materially less stature or responsibility, or a change in the Executive’s duties, authorities,
responsibilities or reporting relationship, but in each case only if the Company does not cure such
change within thirty (30) days after the Executive provides written notice of such change to the
Company; or (C) the Company materially breaches this Agreement and does not cure such breach within
thirty (30) days after the Executive provides written notice of such breach to the Company. The
Company shall not terminate the Executive’s employment without Cause prior to the date which is
thirty (30) days following the date on which the Company provides written notice of such
termination to the Executive; provided, however, that the Executive may waive such notice period in
writing.

     Notwithstanding anything to the contrary in clause (i) immediately above, if the Executive
constitutes a “key employee” as defined in Section 416(i) of the Internal Revenue Code and as
applied under Section 409A of the Internal Revenue Code at such termination, the payment under
clause (i) immediately above shall be paid on the first business day following the sixth month
anniversary of the Executive’s termination of employment if necessary to comply with Section 409A
of the Internal Revenue Code and regulations issued thereunder.

     4.6.     Change of Control.

          4.6.1     In the event of a Change of Control, the Executive shall become fully vested in all
outstanding equity grants as of the date of the Change of Control. In addition to those payments
and benefits described in Section 4.1, if during the Term the Company terminates the Executive’s
employment without Cause or the Executive terminates his employment with Good Reason, in each case
within two (2) years following a Change of Control or the Effective Date, whichever is later, the
Term shall immediately terminate and the Executive shall be entitled to no further payments or
benefits hereunder other than his Accrued Benefits, except: (i) the Company shall make a lump sum
payment to the Executive within ten (10 ) business days of such termination in an amount equal to
three hundred percent (300%) of the sum of the Base Salary plus target Annual Bonus opportunity for
the fiscal year in which occurs the Executive’s termination of employment; (ii) continuing receipt
of group insurance, life, medical, dental, disability and other similar benefits described in
Section 3.7 (to the extent to which such are in place from time to time, but excluding perquisites)
during the thirty-six month period commencing on the date of each termination; (iii) any previously
unvested grants shall become exercisable and all outstanding grants shall remain exercisable for
the period commencing on the date of such termination through the earlier the second anniversary of
such termination; and (iv) the payment required, if any, pursuant to Section 4.6.3. If the
Executive constitutes a “key employee” as defined in Section 416(i) of the Internal Revenue Code
and as applied under Section 409A of the Internal Revenue Code at such termination of employment,
the payment due under clause (i) immediately above shall be paid on the first business day
following the sixth month anniversary of Executive’s termination of employment if necessary to
comply with Section 409A of the Internal Revenue Code and regulations issued thereunder.

5

 

          4.6.2     For purposes of this Agreement, a “Change of Control” shall be deemed to occur upon: (i)
the sale, lease, conveyance or other disposition of all or substantially all of the Company’s
assets as an entirety or substantially as an entirety to any person, entity or group of persons
acting in concert other than in the ordinary course of business; (ii) any transaction or series of
related transactions (as a result of a tender offer, merger, consolidation, issuance of securities
pursuant to the Plan of Reorganization, purchase or otherwise) that results in any Person (as
defined in Section 13(h)(8)(E) under the Securities Exchange Act of 1934) other than the Union VEBA
Trust becoming the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of
1934), directly or indirectly, of 20% or more of the aggregate voting power of all classes of
common equity of the Company, except if such Person is (w) a subsidiary of the Company, (x) an
employee benefit plan for employees of the Company or (y) a company formed to hold the Company’s
common equity securities and whose shareholders constituted, at the time such company became such
holding company, substantially all the shareholders of the Company; or (iii) a change in the
composition of the Board over a period of twenty-four (24) consecutive months or less such that a
majority of the then current Board members ceases to be comprised of individuals who either (a)
have been Board members continuously since the beginning of such period, or (b) have been elected
or nominated for election as Board members during such period by at least a majority of the Board
members described in clause (a) who were still in office at the time such election or nomination
was approved by the Board. The parties recognize that a Change of Control may occur
contemporaneous with or prior to the Company’s emergence from bankruptcy or the Effective Date.

          4.6.3.     If it shall be determined that any payment or distribution of any type to or in respect
of the Executive made directly or indirectly by the Company, whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise (the “Total Payments”), is or
will be subject to the excise tax imposed by Section 4999 of the Internal Code of 1986, as amended
(the “Code”), or any interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are collectively referred to as the “Excise Tax”),
then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an
amount such that after payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes) imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Total Payments.

          4.6.4     All computations and determinations relevant to Section 4.6.3 and this 4.6.4 shall be
made by an independent accounting firm selected and reimbursed by the Company (The “Accounting
Firm”), subject to the Executive’s consent (not to be unreasonably withheld), which firm may be the
Company’s accountants. Such determination shall include whether any of the Total Payments are
“parachute payments” (within the meaning of Section 280G of the Code). In making the initial
determination hereunder as to whether a Gross-Up Payment is required, the Accounting Firm shall
determine that no Gross-Up Payment is required if the Accounting Firm is able to conclude that no
“Change of Control” has occurred (within the meaning of Section 280G of the Code). If the
Accounting Firm determines that a Gross-Up Payment is required, the Accounting Firm shall provide
its determination (the “Determination”), together with detailed supporting calculations regarding
the amount of any Gross-Up Payment and any other relevant matter both to the Company and the
Executive by no later than ten (10) days following its Determination, if applicable, or such
earlier time as is requested by the

6

 

Company or the Executive (if the Executive reasonably believes that any of the Total Payments
may be subject to the Excise Tax). If the Accounting Firm determines that no Excise Tax is payable
by the Executive, it shall furnish the Executive and the Company with a written statement that such
Accounting Firm has concluded that no Excise Tax is payable (including the reasons therefor) and
that the Executive has substantial authority not to report any Excise Tax on his federal income tax
return.

          4.6.5     If a Gross-Up Payment is determined to be payable, it shall be paid to the Executive
within twenty (20) days after the Determination (and all accompanying calculations and other
material supporting the Determination) is delivered to the Company by the Accounting Firm. Any
determination by the Accounting Firm shall be binding upon the Company and the Executive, absent
manifest error.

          4.6.6     As a result of uncertainty in the application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments
not made by the Company should have been made (“Underpayment”) or that Gross-Up Payments will have
been made by the Company which should not have been made (“Overpayments”). In either such event,
the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has
occurred. In the case of an Underpayment, the amount of such Underpayment (together with any
interest and penalties payable by the Executive as a result of such Underpayment) shall be promptly
paid by the Company to or for the benefit of the Executive.

          4.6.7     In the case of an Overpayment, the Executive shall, at the direction and expense of the
Company, take such steps as are reasonably necessary (including the filing of returns and claims
for refund), follow reasonable instructions from, and procedures established by, the Company, and
otherwise reasonably cooperate with the Company to correct such Overpayment, provided, however,
that (i) the Executive shall not in any event be obligated to return to the Company an amount
greater than the net after-tax portion of the Overpayment that he has retained or has recovered as
a refund from the applicable taxing authorities and (ii) this provision shall be interpreted in a
manner consistent with the intent of this Section 4.6, which is to make the Executive whole, on an
after-tax basis, from the application of the Excise Taxes, it being acknowledged and understood
that the correction of an Overpayment may result in the Executive repaying to the Company an amount
which is less than the Overpayment.

          4.6.8     The Executive shall notify the Company in writing of any claim by the Internal Revenue
Service relating to the possible application of the Excise Tax under Section 4999 of the Code to
any of the payments and amounts referred to herein and shall afford the Company, at its expense,
the opportunity to control the defense of such claim (for the sake of clarity, if the Internal
Revenue Service is successful in any such claim or the Executive reaches a final settlement with
the Internal Revenue Service with respect to such claim (after having afforded the Company, at its
expense, the opportunity to control the defense of such claim), the amount of the Excise Tax
resulting from such successful claim or settlement shall be determinative as to whether or not
there has been an Underpayment or an Overpayment for purposes of Section 4.6.6).

7

 

          4.6.9     Without limiting the intent of this Section 4.6.9 to make the Executive whole, on an
after-tax basis, from the application of the Excise Taxes, all determinations by the Accounting
Firm shall be made with a view to minimizing the application of Sections 280G and 4999 of the Code
of any of the Total Payments, subject, however, to the following: the Accounting Firm shall make
its determination on the basis of substantial authority and shall provide opinions to that effect
to both the Company and the Executive upon the request of either of them.

     4.7.     End of Term. If the Company notifies the Executive that the Term will not be
extended in accordance with the provisions of Section 2.1, the Executive shall be entitled to no
further payments or benefits, except for those payments and benefits described in Section 4.1. All
outstanding equity grants shall vest in the manner provided in the applicable award (subject to the
provisions of Section 3.3 and 3.4), and any vested but unexercised grants shall become exercisable
and shall remain so for the period commencing on the expiration of the Term and continuing through
the second anniversary of the end of the Term.

     4.8.     No Mitigation. Upon termination of the Executive’s employment with the Company,
the Executive shall be under no obligation to seek other employment or otherwise to mitigate the
obligations of the Company under this Agreement.

	5.	 	Protection of Confidential Information; Non-Competition.

     5.1.     The Executive acknowledges that the Executive’s services will be unique, that they will
involve the development of Company-subsidized relationships with key customers, suppliers, and
service providers as well as with key Company employees and that the Executive’s work for the
Company will give the Executive access to highly confidential information not available to the
public or competitors, including trade secrets and confidential marketing, sales, product
development and other data and information which it would be impracticable for the Company to
effectively protect and preserve in the absence of this Section 5 and the disclosure or
misappropriation of which could materially adversely affect the Company. Accordingly, the
Executive agrees:

          5.1.1     Except in the course of performing the Executive’s duties provided for in Section 1.1,
not at any time, whether before, during or after the Executive’s employment with the Company, to
divulge to any other entity or person any confidential information acquired by the Executive
concerning the Company’s or its affiliates’ financial affairs or business processes or methods or
their research, development or marketing programs or plans, or any other of its or their trade
secrets. In the event that the Executive is requested or required to make disclosure of
information subject to this Section 5.1.1 under any court order, subpoena or other judicial
process, then, except as prohibited by law, the Executive will promptly notify the Company, take
all reasonable steps requested by the Company to defend against the compulsory disclosure and
permit the Company to control with counsel of its choice any proceeding relating to the compulsory
disclosure. The Executive acknowledges that all information, the disclosure of which is prohibited
by this section, is of a confidential and proprietary character and of great value to the Company.

8

 

          5.1.2     to deliver promptly to the Company on termination of the Executive’s employment with the
Company, or at any time that the Company may so request, all confidential memoranda, notes,
records, reports, manuals, drawings, blueprints and other documents (and all copies thereof)
relating to the Company’s business and all property associated therewith, which the Executive may
then possess or have under the Executive’s control.

     5.2.     In consideration of the Company’s entering into this Agreement, the Executive agrees that
at all times during the Term and thereafter, until the first anniversary of the date of the
termination of the Term for any reason, the Executive shall not, directly or indirectly, for
himself or on behalf of or in conjunction with, any other person, company, partnership,
corporation, business, group, or other entity (each, a “Person”):

          5.2.1     provide services to a “Competitor” (as defined below), as an officer, director,
shareholder, owner, partner, joint venturer, or in any other capacity, whether as an executive,
independent contractor, consultant, advisor, or sales representative; or

          5.2.2     call upon any Person who is or that is, at such date of termination, engaged in activity
on behalf of the Company or any affiliate of the Company for the purpose or with the intent of
enticing such Person to cease such activity on behalf of the Company or such affiliate.

     For purposes of this Agreement, “Competitor” means, on any date, a person or entity that is
primarily engaged in a material line of business conducted by the Company.

     5.3.     If the Executive commits a breach of any of the provisions of Section 5.1 or 5.2 hereof,
the Company shall have the right and remedy to have the provisions of this Agreement specifically
enforced by any court having equity jurisdiction, it being acknowledged and agreed that any such
breach will cause irreparable injury to the Company and that money damages will not provide an
adequate remedy to the Company, and, if the Executive attempts or threatens to commit a breach of
any of the provisions of Section 5.1 or 5.2, the right and remedy to be granted a preliminary and
permanent injunction in any court having equity jurisdiction against the Executive with respect to
the attempted or threatened breach, it being agreed that each of such rights and remedies shall be
independent of the others and shall be severally enforceable, and that all of such rights and
remedies shall be in addition to, and not in lieu of, any other rights and remedies available to
the Company under law or in equity.

     5.4.     If any of the covenants contained in Section 5.1, 5.2 or 5.3, or any part thereof,
hereafter are construed to be invalid or unenforceable, the same shall not affect the remainder of
the covenant or covenants, which shall be given full effect, without regard to the invalid
portions.

     5.5.     The period during which the prohibitions of Section 5.2 are in effect shall be extended
by any period or periods during which the Executive is in violation of Section 5.2.

     5.6.     If any of the covenants contained in Section 5.1 or 5.2, or any part thereof are held to
be unenforceable because of the duration of such provision or the area covered thereby, the parties
agree that the court making such determination shall have the power to reduce the duration and/or
area of such provision so as to be enforceable to the maximum extent permitted by applicable law
and, in its reduced form, said provision shall then be enforceable.

9

 

     5.7.     The parties hereto intend to and hereby confer jurisdiction to enforce the covenants
contained in Sections 5.1, 5.2 and 5.3 upon the courts of any state within the geographical scope
of such covenants. In the event that the courts of any one or more of such states shall hold such
covenants wholly unenforceable by reason of the breadth of such covenants or otherwise, it is the
intention of the parties hereto that such determination not bar or in any way affect the Company’s
right to the relief provided above in the courts of any other states within the geographical scope
of such covenants as to breaches of such covenants in such other respective jurisdictions, the
above covenants as they relate to each state being for this purpose severable into diverse and
independent covenants.

	6.	 	Inventions and Patents.

     The Executive agrees that all processes, technologies and inventions (collectively,
“Inventions”), including new contributions, improvements, ideas and discoveries, whether patentable
or not, conceived, developed, invented or made by him during the Term shall belong to the Company,
provided that such Inventions grew out of the Executive’s work with the Company or any of its
subsidiaries or affiliates, are related in any manner to the business (commercial or experimental)
of the Company or any of its subsidiaries or affiliates or are conceived or made on the Company’s
time or with the use of the Company’s facilities or materials. The Executive shall further (a)
promptly disclose such Inventions to the Company; (b) assign to the Company, without additional
compensation, all patent and other rights to such Inventions for the United States and foreign
countries; (c) sign all papers necessary to carry out the foregoing; and (d) give testimony in
support of the Executive’s inventorship.

	7.	 	Intellectual Property.

     Notwithstanding and without limiting the provisions of Section 6, the Company shall be the
sole owner of all the products and proceeds of the Executive’s services hereunder, including, but
not limited to, all materials, ideas, concepts, formats, suggestions, developments, arrangements,
packages, programs and other intellectual properties that the Executive may acquire, obtain,
develop or create in connection with or during the Term, free and clear of any claims by the
Executive (or anyone claiming under the Executive) of any kind or character whatsoever (other than
the Executive’s right to receive payments hereunder), the Executive shall, at the request of the
Company, execute such assignments, certificates or other instruments as the Company may from time
to time deem necessary or desirable to evidence, establish, maintain, perfect, protect, enforce or
defend its right, title or interest in or to any such properties.

	8.	 	Indemnification.

     In addition to any rights to indemnification to which the Executive is entitled under the
Company’s charter and by-laws, to the extent permitted by applicable law, the Company will
indemnify, from the assets of the Company supplemented by insurance in an amount customary for
corporations similar in size and value to the Company and engaged in business activities similar to
the business activities of the Company, the Executive at all times, during and after the Term, and,
to the maximum extent permitted by applicable law, shall pay the Executive’s expenses (including
reasonable attorneys’ fees and expenses, which shall be paid in advance by the Company as incurred,
subject to recoupment in accordance with applicable law) in

10

 

connection with any threatened or actual action, suit or proceeding to which the Executive may
be made a party, brought by any shareholder of the Company directly or derivatively or by any third
party by reason of any act or omission or alleged act or omission in relation to any affairs of the
Company or any subsidiary or affiliate of the Company of the Executive as an officer, director or
employee of the Company or of any subsidiary or affiliate of the Company. The Company shall
maintain during the Term and thereafter insurance coverage sufficient to satisfy any
indemnification obligation of the Company arising under this Section 8.

	9.	 	Notices.

     All notices, requests, consents and other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to have been duly given if delivered personally,
one day after sent by overnight courier or three days after mailed first class, postage prepaid, by
registered or certified mail as follows (or to such other address as either party shall designate
by notice in writing to the other in accordance herewith):

     If to the Company, to:

	 	 	 
	Kaiser Aluminum Corporation

27422 Portola Parkway, Suite 350

Foothill Ranch, California 92610

Attn: General Counsel

     If to the Executive, to the Executive’s principal residence as reflected in the records of the
Company.

	10.	 	General.

     10.1.     This Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of Delaware applicable to agreements made between residents thereof and to be
performed entirely in Delaware.

     10.2.     The section headings contained herein are for reference purposes only and shall not in
any way affect the meaning or interpretation of this Agreement.

     10.3.     This Agreement sets forth the entire agreement and understanding of the parties relating
to the subject matter hereof and supersedes all prior agreements, arrangements and understandings,
written or oral, relating to the subject matter hereof, including that certain Employment Agreement
effective as of May 15, 2006, between Executive and Kaiser Aluminum & Chemical Corporation, a
Delaware corporation. No representation, promise or inducement has been made by either party that
is not embodied in this Agreement, and neither party shall be bound by or liable for any alleged
representation, promise or inducement not so set forth.

     10.4.     This Agreement, and the Executive’s rights and obligations hereunder, may not be
assigned by the Executive, nor may the Executive pledge, encumber or anticipate any payments or
benefits due hereunder, by operation of law or otherwise. The Company may assign its rights,
together with its obligations, hereunder (i) to any affiliate or (ii) to a third party in
connection with any sale, transfer or other disposition of all or substantially all of any business
to which the

11

 

Executive’s services are then principally devoted, provided that no assignment pursuant to
clause (ii) shall relieve the Company from its obligations hereunder to the extent the same are not
timely discharged by such assignee. In this regard, the parties acknowledge that Executive shall
be employed by the Company’s subsidiary, Kaiser Aluminum Fabricated Products, LLC, a Delaware
limited liability company (“KAFP”), and that while Executive is employed by KAFP, KAFP shall assume
the payment obligations of the Company under this Agreement subject to the proviso set forth above
in the preceding sentence which states that the Company shall not be relieved of its obligations
hereunder to the extent that the obligations assumed by KAFP are not timely discharged by KAFP.

     10.5.     The respective rights and obligations of the parties hereunder shall survive any
termination of this Agreement or the Term to the extent necessary to the intended preservation of
such rights and obligations.

     10.6.     This Agreement may be amended, modified, superseded, canceled, renewed or extended and
the terms or covenants hereof may be waived, only by a written instrument executed by both of the
parties hereto, or in the case of a waiver, by the party waiving compliance. The failure of either
party at any time or times to require performance of any provision hereof shall in no manner affect
the right at a later time to enforce the same. No waiver by either party of the breach of any term
or covenant contained in this Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing waiver of any such
breath, or a waiver of the breach of any other term or covenant contained in this Agreement.

     10.7.     This Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original but all of which together will constitute one and the same instrument.

	11.	 	Dispute Resolution.

     Subject to the rights of the Company pursuant to Section 5.3 above, any controversy, claim or
dispute arising out of or relating to this Agreement, the breach thereof, or the Executive’s
employment by the Company shall be settled by arbitration with one arbitrator. The arbitration
will be administered by the American Arbitration Association in accordance with its National Rules
for Resolution of Employment Disputes. The arbitration proceeding shall be confidential, and
judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction.
Any such arbitration shall take place in the Orange County, California, or in any other mutually
agreeable location. In the event any judicial action is necessary to enforce the arbitration
provisions of this Agreement, sole jurisdiction shall be in the federal and state courts, as
applicable, located in California. Any request for interim injunctive relief or other provisional
remedies or opposition thereto shall not be deemed to be a waiver of the right or obligation to
arbitrate hereunder. The Company shall pay or promptly reimburse the Executive for all reasonable
costs, fees and expenses relating to such dispute, including reasonable legal fees.

12

 

	12.	 	Subsidiaries; Affiliates; and Benefits.

     As used herein, the term “subsidiary” shall mean any corporation or other business entity
controlled directly or indirectly by the corporation or other business entity in question; and the
term “affiliate” shall mean and include any corporation or other business entity directly or
indirectly controlling, controlled by or under common control with the corporation or other
business entity in question; and references to “benefits” and “benefit plans” shall include the
benefits provided by the Company and the Company’s subsidiaries from time to time to senior
executives of the Company generally and the underlying plans.

13

 

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

	 	 	 	 	 
	 	KAISER ALUMINUM CORPORATION

 	 
	 	By:  	/s/ John M. Donnan
 	 
	 	 	Name:  	John M. Donnan 	 
	 	 	Title:  	Vice President, Secretary & General Counsel 	 
	 

	 	 	 	 	 
	 	 	 
	 	                      /s/ Joseph P. Bellino
 	 
	 	Joseph P. Bellino 	 
	 	 	 
	 

14exv10w7

 

Exhibit 10.7

EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”) is made effective as of July 6, 2006 between
Kaiser Aluminum Corporation, a Delaware corporation (the “Company”), and Daniel D. Maddox (the
“Executive”).

     WHEREAS, the parties acknowledge and affirm that Executive is a participant in the Kaiser
Aluminum & Chemical Corporation Key Employee Retention Plan and Retention Agreement for Executive,
both effective September 3, 2002 (collectively, the “KERP”), Severance Agreement and Plan, both
effective September 3, 2002 (collectively, the “Severance Plan”), the Kaiser Aluminum & Chemical
Corporation Change in Control Severance Plan and Change in Control Severance Agreement dated
November 18, 2002 (collectively “CIC Agreement”), and the Long Term Incentive Plan (“LTI Plan”),
each of which have been assigned by Kaiser Aluminum & Chemical Corporation to the Company’s
subsidiary, Kaiser Aluminum Fabricated Products, LLC, a Delaware limited liability company
(“KAFP”);

     WHEREAS, the KERP, Severance Plan, CIC Agreement and LTI Plan have not been “materially
modified” (as that term is defined in Section 409A of the Internal Revenue Code of 1986, as amended
(“Section 409A”) and guidance existing on the date of this Agreement) after October 3, 2004;

     WHEREAS, it is contemplated that Executive will be a participant in the Kaiser Aluminum
Corporation 2006 Equity and Performance Incentive Plan (the “2006 Incentive Plan”) and that
Executive will be awarded restricted shares under the 2006 Incentive Plan pursuant to the terms of
Executive’s Kaiser Aluminum Corporation 2006 Equity and Performance Incentive Plan Restricted Stock
Award Agreement (the “Award Agreement”); and

     WHEREAS, the Company desires to secure the continuing services of Executive as Vice President
and Controller of the Company, and Executive desires to perform such services for the Company, on
the terms and conditions as set forth herein.

     NOW THEREFORE, in consideration of the premises and of the covenants and agreements set forth
below, it is mutually agreed as follows:

     1.     Effective Date, Term and Duties. The term of this Agreement shall begin on the
effective date set forth above and unless earlier terminated pursuant to Section 4, continue
through the earlier of (a) a mutually agreed termination date, or (b) March 31, 2007 (the
“Employment Period”).

     1.1     Executive shall have such duties as the Company may from time to time prescribe consistent
with his position as Vice President and Controller of the Company and its affiliates (the
“Services”).

     1.2     Executive shall report directly to the Company’s Chief Financial Officer.

 

 

     1.3     Executive shall devote his full time, attention, energies and best efforts to the business
of the Company, including the training of Executive’s successor and the transition of
responsibilities to the Company’s designee before the expiration of the terms of this Agreement.

     1.4     The Company shall maintain an office for Executive in Houston, Texas, if requested by
Executive; provided, however that Executive agrees and acknowledges that routine travel to the
Company’s headquarters will be required at least one or more times monthly.

     2.     Compensation. The Company shall pay and Executive shall accept as full
consideration for the Services, compensation and benefits described in this Agreement.

     2.1     Base Salary. An annual base salary of $225,000, payable in installments in
accordance with the Company’s normal payroll practices. The foregoing adjustment to Executive base
salary shall be effective as of February 1, 2006.

     2.2     Short Term Incentive. An annual short term incentive bonus target of $75,000
pro-rated for partial years. The annual short term incentive bonus will be paid at the same time
that all executive annual short term incentive bonus amounts are paid (but in no event later than
March 31 of the following year) and will be based on a formula resulting from performance similar
to the formula used with other senior executive incentives.

     2.3     Long-Term Incentive. A long term incentive award upon emergence in the form of
11,334 shares of restricted common stock of the Company issued under the 2006 Incentive Program.
Such shares shall vest upon Executive’s termination of employment for any reason other than
termination by the Company for “Cause” as defined in the Severance Plan and CIC Agreement. In all
other respects, the terms of such grant of restricted shares of the Company’s common stock under
Executive’s Award Agreement will be consistent with the terms of emergence grants made to other
executives under the Company’s post-emergence equity incentive program.

     3.     Benefits and other Perquisites during Employment Period. Executive will be
eligible to participate in the Company’s employee benefit plans of general application, including,
without limitation, those plans covering retirement, 401(k) savings, medical, disability, sick
leave and life insurance in accordance with the rules established for individual participation in
any such plan and under applicable law. Executive will receive such other benefits as the Company
or its subsidiaries generally provides to other employees of comparable position and experience,
including the continuation of Executive’s car allowance.

     4.     Termination of Employment.

     4.1     This Agreement may be terminated by the Company for Cause. Upon termination for Cause,
Executive shall not be entitled to any further benefits under this Agreement.

     4.2     At the end of the end of the Employment Period, Executive may terminate his employment.
Executive’s termination of employment (other than by death or disability or by the Company for
Cause) at the expiration of the Employment Period will be considered a termination by Executive for
“Good Reason” (as that term is defined in the Severance Plan

2

 

and/or CIC Agreement, as applicable and the Award Agreement) under the Severance Plan and/or
CIC Agreement, as applicable, and the Award Agreement.

     4.3     Upon Executive’s termination of employment, Executive will be entitled to receive all
payments and benefits prescribed under the terms of the KERP, Severance Plan, CIC Agreement and/or
LTI Plan. If for any reason, a “Change-in-Control” as defined in the CIC Agreement has not
occurred or is not otherwise deemed to have occurred upon the emergence of KAC from Chapter 11,
Executive will be receive the benefits Executive would have otherwise received had such a
Change-in-Control occurred prior to Executive’s termination of his employment under Section 4.2.
These payments and benefits will be in lieu of any other severance or termination payment or
benefits provided in the Company’s benefit plans and policies.

     5.     Compliance with Section 409A.

     5.1     This Agreement shall be construed and interpreted in accordance with Section 409A and is
intended to comply with Section 409A. It is the understanding of the Company and Executive that
the Company intends to amend or modify and administer each of the Company’s existing employment,
compensation and benefits arrangements, including this Agreement, in compliance with Section 409A
to avoid adverse tax consequences to the participants; however, the Company is not responsible for
any such consequences should they occur. To the extent that any benefit under this Agreement is
subject to Section 409A, it shall be paid in a manner that will comply with Section 409A, including
proposed, temporary or final regulations or any other guidance issued by the Secretary of the
Treasury and the Internal Revenue Service with respect thereto (the “Guidance”). Any provision of
this Agreement that would cause any benefit under this Agreement to fail to satisfy Section 409A
shall have no force and effect until amended to comply with Section 409A (which amendment may be
retroactive to the extent permitted by the Guidance). Any cash payment delayed under this Section
will accrue interest during the period the payment is delayed equal to the average prime rate of JP
Morgan Chase & Co. for the period of such delay.

     5.1     No adjustment or amendment to this Agreement will be undertaken which would result in (a)
any reduction of the amount or value of any payments or benefits to be received by Executive under
this Agreement or (b) a “material modification” of this Agreement as provided in Section 409A or
the Guidance, unless specifically agreed to in writing by Executive.

     6.     Termination by Reason of Death or Disability. The Executive’s employment shall
terminate automatically upon Executive’s death during the Employment Period. If during the term of
this Agreement, Executive is unable to perform his job due to disability (as determined under the
Company’s long-term disability insurance program) for 6 months in any 12 month period, the Company
may, at its discretion, terminate Executive’s employment. In the event of Executive’s death or
disability during the Employment Period, the Company shall pay to Executive or Executive’s estate
any base salary, pro-rated guaranteed bonus and unpaid vacation accrued as of the date of
Executive’s death or disability and any other benefits payable under the Company’s then existing
benefit plans and policies in accordance with such plans and policies in effect on the date of
death or disability and in accordance with applicable law, including but not

3

 

limited to those payments and benefits available to Executive under the KERP, the Severance
Plan, the CIC Agreement and/or the LTI Plan.

     7.     Dispute Resolution. The Company and Executive agree that any dispute regarding the
interpretation or enforcement of this Agreement shall be decided by a confidential, final and
binding arbitration conducted by Judicial Arbitration and Mediation Services (“JAMS”) under the
then existing JAMS rules, rather than by litigation in court, trial by jury, administrative
proceeding or in any other forum.

     8.     Cooperation with the Company After Termination of the Employment Period. Following
termination of the Employment Period by Executive, Executive shall fully cooperate with the Company
in all matters relating to the winding up of his pending work on behalf of the Company and the
orderly transfer of any such pending work to other employees of the Company or its subsidiaries as
may be designated by the Company.

     9.     General

     9.1     Waiver. Neither party shall, by mere lapse of time, without giving notice or
taking action hereunder, be deemed to have waived any breach by the other of any of the provisions
of this Agreement. Further, the waiver by either party of a particular breach of this Agreement by
the other shall neither be construed as, nor constitute, a continuing waiver of such breach or of
other breaches by the same or any other provision of this Agreement.

     9.2     Severability. If for any reason a court of competent jurisdiction or arbitrator
finds any provision of this Agreement to be unenforceable, the provision shall be deemed amended as
necessary to conform to applicable laws or regulations, or if it cannot be so amended without
materially altering the intention of the parties, the remainder of the Agreement shall continue in
full force and effect as if the offending provision were not contained herein.

     9.3     No Mitigation. Executive shall have no duty to mitigate, by seeking other
employment following a termination of his employment, the obligations of the Company or its
subsidiaries with respect to any termination or other payments made to Executive under the terms of
this Agreement (the KERP, Severance Plan, CIC Agreement or LTI Plan), nor shall such payments be
subject to offset or reductions by reason of any compensation received by Executive from such other
employment. The obligations of the Company to make payments under this Agreement (or of the Company
or its subsidiaries under the KERP, Severance Plan, CIC Agreement or LTI Plan) shall not terminate
or otherwise be affected in the event Executive accepts other full-time employment.

     9.4     Notices. All notices and other communications required or permitted to be given
under this Agreement shall be in writing and shall be considered effective upon personal service or
upon depositing such notice in the U.S. Mail, postage prepaid, return receipt requested and
addressed to the General Counsel of the Company at its principal corporate address, and to
Executive at his most recent address shown on the Company’s corporate records, or at any other
address which he may specify in any appropriate notice to the Company.

     9.5     Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed an original and all of which taken together constitutes one and the

4

 

same instrument and in making proof hereof it shall not be necessary to produce or account for
more than one such counterpart.

     9.6     Entire Agreement. The parties hereto acknowledge that each has read this
Agreement, understands it, and agrees to be bound by its terms. The parties further agree that this
Agreement (combined with the KERP, Severance Plan, CIC Agreement and LTI Plan, as those agreements
have been made applicable to Executive in the individual agreements executed by Executive)
constitute the complete and exclusive statement of the agreement between the parties and supercede
all proposals (oral or written), understandings, representations, conditions, covenants and all
other communications between the parties relating to the subject matter hereof. For the avoidance
of doubt, nothing contained in this Agreement shall be deemed to modify or amend the provisions of
the KERP, Severance Plan, CIC Agreement or LTI Plan and in the event of any conflict with the terms
of this Agreement, the terms of the KERP, Severance Plan, CIC Agreement and LTI Plan will control.

     9.7     Governing Law. This Agreement shall be governed by the laws of the State of
California.

     9.8     Assignment. This Agreement, and the Executive’s rights and obligations hereunder,
may not be assigned by the Executive, nor may the Executive pledge, encumber or anticipate any
payments or benefits due hereunder, by operation of law or otherwise. The Company may assign its
rights, together with its obligations, hereunder (i) to any affiliate or (ii) to a third party in
connection with any sale, transfer or other disposition of all or substantially all of any business
to which the Executive’s services are then principally devoted, provided that no assignment
pursuant to clause (ii) shall relieve the Company from its obligations hereunder to the extent the
same are not timely discharged by such assignee. In this regard, the parties acknowledge that
Executive shall be employed by KAFP, and that while Executive is employed by KAFP, KAFP shall
assume the payment obligations of the Company under this Agreement subject to the proviso set forth
above in the preceding sentence which states that the Company shall not be relieved of its
obligations hereunder to the extent that the obligations assumed by KAFP are not timely discharged
by KAFP.

     9.9     Subsidiaries; Affiliates; and Benefits. As used herein, the term “subsidiary”
shall mean any corporation or other business entity controlled directly or indirectly by the
corporation or other business entity in question; the term “affiliate” shall mean and include any
corporation or other business entity directly or indirectly controlling, controlled by or under
common control with the corporation or other business entity in question; and references to
“benefits” and “benefit plans” shall include the benefits provided by the Company and the Company’s
subsidiaries from time to time to senior executives of the Company generally and the underlying
plans and policies.

     9.10     Authority to Execute. The person executing this Agreement on behalf of the
Company warrants and represents his/her authority to execute this Agreement and bind the Company,
its successors and assigns.

5

 

     IN WITNESS WHEREOF, the parties have executed this Agreement on the date first above written.

	 	 	 	 	 
	 	KAISER ALUMINUM CORPORATION

 	 
	 	By:  	/s/ John M. Donnan
 	 
	 	 	Name:  	John M. Donnan 	 
	 	 	Title: Vice President, Secretary & General Counsel 	 
	 

	 	 	 	 	 
	 	EXECUTIVE

 	 
	 	By:  	/s/ Daniel D. Maddox
 	 
	 	 	Daniel D. Maddox 	 
	 	 	 	 
	 

6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00106-of-00352.parquet"}]]