Document:

exhibit10_2.htm

 

 

 

 

SECOND AMENDED AND RESTATED SEVERANCE PROTECTION AGREEMENT

 

THIS SECOND AMENDED AND RESTATED SEVERANCE PROTECTION AGREEMENT (this “Agreement”) is made as of the 2nd day of June, 2011, by and between the Company (as hereinafter defined), and Logan W. Kruger (the “Executive”).

WITNESSETH:

WHEREAS, the Board of Directors of the Company (the “Board”) recognizes that the possibility of a Change in Control (as hereinafter defined) exists and that the threat or the occurrence of a Change in Control can result in significant distractions of its key management personnel because of the uncertainties inherent in such a situation;

WHEREAS, the Board has determined that it is essential and in the best interest of the Company and its stockholders to retain the services of the Executive in the event of a threat or the occurrence of a Change in Control and to ensure his continued dedication and efforts in such event without undue concern for his personal financial and employment security; and

WHEREAS, the Executive is the President and Chief Executive Officer of the Company and in order to induce the Executive to remain in the employ of the Company, particularly in the event of a threat or the occurrence of a Change in Control, the Company desires to amend and restate the existing Amended and Restated Severance Protection Agreement by and between the Company and the Executive, dated March 19, 2007, and amended on December 1, 2008 (the “Existing SPA”), as set forth herein to provide the Executive with certain benefits if his employment is terminated as a result of, or in connection with, a Change in Control.

NOW, THEREFORE, in consideration of the respective agreements of the parties contained herein, it is hereby agreed as follows:

  

  

  

1. Term of Agreement.   This initial term of this Agreement shall be effective until December 31, 2013; provided, however, that commencing on January 1, 2012, and on each January 1 thereafter, the term of this Agreement shall automatically be extended for one year, subject however, to termination as provided in the last sentence of this Section 1; and provided further, however, that the term of this Agreement shall not expire prior to the later of (i) the expiration of 36 months after the occurrence of a Change in Control during the term of this Agreement, or (ii) until such time as all benefits to be provided for hereunder have been provided in full.  Except as otherwise provided herein, this Agreement and the rights and obligations of each party hereunder shall terminate if the Executive or the Company terminates the Executive’s employment prior to the occurrence of a Change in Control.

2.  Definitions.

2.1.  Accrued Compensation.   For purposes of this Agreement, “Accrued Compensation” shall mean any and all amounts or rights earned, accrued or vested through the Termination Date (as hereinafter defined) but not paid as of the Termination Date, including (i) base salary, (ii) reimbursement for reasonable and necessary expenses incurred by the Executive on behalf of the Company during the period ending on the Termination Date, (iii) vacation pay, (iv) bonuses, incentive compensation (other than the Pro Rata Bonus (as hereinafter defined)), and (v) such other benefits as may be provided in Executive’s employment agreement with the Company.

  

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2.2.  Cause.   For purposes of this Agreement, a termination of employment is for “Cause” if the Executive (a) has disregarded a direct, material order of the Board, the substance of which order is (i) a proper duty of the Executive under the terms of his employment agreement, (ii) permitted by law, and (iii) otherwise permitted by his employment agreement,

which disregard continues after 15 days’ opportunity and failure to cure, or (b) has been convicted of a felony or any crime involving moral turpitude.

2.3.  Change in Control.  For purposes of this Agreement, a “Change in Control” shall mean any of the following events:

(a)  An acquisition of any voting securities of the Company (the “Voting Securities”) by any “Person” (as the term person is used for purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934) immediately after which such Person has “Beneficial Ownership” (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934) of 20% or more of the combined voting power of the Company’s then outstanding Voting Securities or, in the case of Glencore International AG and its affiliates (collectively, “Glencore”), Beneficial Ownership of 50% or more of such Voting Securities; provided, however, that in determining whether a Change in Control has occurred, Voting Securities which are acquired by any Person other than Glencore in a Non-Control Acquisition (as hereinafter defined) shall not constitute an acquisition which would cause a Change in Control.  A “Non-Control Acquisition” shall mean an acquisition by (1) an employee benefit plan (or a trust forming a part thereof) maintained by (x) the Company or (y) any corporation or other Person of which a majority of its voting power or its equity securities or equity interest is owned directly or indirectly by the Company (a “Subsidiary”), (2) the Company or any Subsidiary, or (3) any Person in connection with a Non-Control Transaction (as hereinafter defined); 

  

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(b)  The individuals who, as of the date hereof, are members of the Board (the “Incumbent Board”), cease for any reason to constitute at least two-thirds of the Board; provided, however, that if the election, or nomination for election by the Company’s stockholders, of any new director was approved by a vote of at least two-thirds of the Incumbent Board, such new

director shall, for purposes of this Agreement, be considered a member of the Incumbent Board; provided further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened “Election Contest” (as described in Rule 14a-11 promulgated under the Securities Exchange Act of 1934) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (a “Proxy Contest”) including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or

(c)  Approval by stockholders of the Company of:

(1)  A merger, consolidation or reorganization involving the Company, unless

(i)  the stockholders of the Company, immediately before such merger, consolidation or reorganization, own, directly or indirectly immediately following such merger, consolidation or reorganization, at least 70% of the combined voting power of the outstanding voting securities of the corporation resulting from such merger or consolidation or reorganization (the “Surviving Corporation”) in substantially the same proportion as their ownership of the Voting Securities immediately before such merger, consolidation or reorganization,

(ii)  the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such merger, consolidation or reorganization constitute at least two-thirds of the members of the board of directors of the Surviving Corporation, and

  

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(iii)  no Person (other than the Company, any Subsidiary, any employee benefit plan (or any trust forming a part thereof) maintained by the Company, the Surviving Corporation or any Subsidiary, or any Person who, immediately prior to such merger, consolidation or reorganization, had Beneficial Ownership of 15% or more of the then outstanding Voting Securities) has Beneficial Ownership of 15% or more of the combined voting power of the Surviving Corporation’s then outstanding voting securities (a transaction described in clauses (i) through (iii) above shall herein be referred to as a “Non-Control Transaction”);

(2)  A complete liquidation or dissolution of the Company; or

(3)  An agreement for the sale or other disposition of all or substantially all of the assets of the Company to any Person (other than a transfer to a Subsidiary).

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person (the “Subject Person”) acquired Beneficial Ownership of more than the permitted amount of the outstanding Voting Securities as a result of the acquisition of Voting Securities by the Company which, by reducing the number of Voting Securities outstanding, increases the proportional number of shares Beneficially Owned by the Subject Person; provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of Voting Securities by the Company, and after such share acquisition by the Company, the Subject Person becomes the Beneficial Owner of any additional Voting Securities which increases the percentage of the then outstanding Voting Securities beneficially owned by the Subject Person, then a Change in Control shall occur.

  

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(d)  Notwithstanding anything contained in this Agreement to the contrary, if the Executive’s employment is terminated prior to a Change in Control and the Executive reasonably demonstrates that such termination (i) was at the request of a third party who had indicated an intention or taken steps reasonably calculated to effect a Change in Control and who effectuates a Change in Control (a “Third Party”) or (ii) otherwise occurred in connection with, or in anticipation of, a Change in Control which actually occurs, then for all purposes of this Agreement, the date of a Change in Control with respect to the Executive shall mean the date immediately prior to the date of such termination of the Executive’s employment.

2.4.  Company.   For purposes of this Agreement, the “Company” shall mean Century Aluminum Company, a Delaware corporation, and shall include its Successors and Assigns (as hereinafter defined).   As used in this Agreement, the term “affiliates” shall include any company controlled by, controlling, or under common control with, the Company.

2.5.  Disability.   For purposes of this Agreement, “Disability” shall mean a physical or mental infirmity which impairs the Executive’s ability to substantially perform his duties with the Company for a period of 180 consecutive days, and the Executive has not returned to his full time employment prior to the Termination Date as stated in the Notice of Termination (as hereinafter defined).

2.6.  Good Reason.

(a)  For purposes of this Agreement, “Good Reason” shall mean the occurrence after a Change in Control of any of the events or conditions described in subsections (1) through (9) hereof:

  

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(1)  a change in the Executive’s status, title, position or responsibilities (including reporting responsibilities) which, in the Executive’s reasonable judgment, represents an adverse change from his status, title, position or responsibilities as in effect at any time within one year preceding the date of a Change in Control or at any time thereafter; the assignment to the Executive of any duties or responsibilities which, in the Executive’s reasonable judgment, are inconsistent with his status, title, position or responsibilities as in effect at any time within one year preceding the date of a Change in Control or at any time thereafter; or any removal of the Executive from or failure to reappoint or reelect him to any of such offices or positions, except in connection with the termination of his employment for Disability, Cause, as a result of his death or by the Executive other than for Good Reason;

(2)  a reduction in the Executive’s base salary or the failure of the Company to (i) pay to the Executive an annual bonus in cash at least equal to the annual bonus paid to the Executive in respect of the most recently completed fiscal year prior to the Change in Control, such bonus to be paid no later than the end of the third month of the fiscal year next following the fiscal year for which the annual bonus is awarded, unless the Executive shall elect to defer the receipt of such annual bonus, (ii) increase the Executive’s base salary, annual bonus and any other incentive compensation, including performance shares and options, consistent with the Company’s practice prior to the Change in Control or, if greater, as the same may be increased from time to time for other key executive officers of the Company and its affiliated companies, or (iii) pay to the Executive any compensation or benefits to which he is entitled within five days of the date due;

  

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(3)  the Company’s requiring the Executive to be based at any place outside a 30-mile radius from the Company’s offices where he was based prior to the Change in Control, except for reasonably required travel on the Company’s business which is not materially greater than such travel requirements prior to the Change in Control;

(4)  the failure by the Company to (A) continue in effect (without reduction in benefit level and/or reward opportunities) any material compensation or employee benefit plan (including, without limitation, long-term disability, medical, dental, life insurance, flexible spending account, pre-tax insurance premiums, vacation pay, pension and profit-sharing) in which the Executive was participating at any time within one year preceding the date of a Change in Control or at any time thereafter, unless such plans are replaced with plans that provide substantially equivalent compensation or benefits to the Executive, (B) provide the Executive with compensation and benefits, in the aggregate, at least equal (in terms of benefit levels and/or reward opportunities) to those provided for under each other employee benefit plan, program and practice in which the Executive was participating at any time within one year preceding the date of a Change in Control or at any time thereafter, or (C) permit the Executive to participate in any or all incentive, savings, retirement plans and benefit plans, fringe benefits, practices, policies and programs applicable generally to other key executives of the Company and its affiliated companies;

(5)  the insolvency or the filing (by any party, including the Company) of a petition for bankruptcy of the Company, which petition is not dismissed within 60 days;

(6)  any material breach by the Company of any provision of this Agreement;

  

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(7)  any purported termination of the Executive’s employment for Cause by the Company which does not comply with the terms of Section 2.2;

(8)  the disposition of all, or substantially all, of the assets of the Company; or

(9)  the failure of the Company to obtain an agreement, satisfactory to the Executive, from any Successors and Assigns to assume and agree to perform this Agreement, as contemplated in Section 6 hereof.

(b)  Any event or condition described in Section 2.6(a) (1) through (9) above which occurs prior to a Change in Control but which the Executive reasonably demonstrates (1) was at the request of a Third Party, or (2) otherwise arose in connection with, or in anticipation of, a Change in Control which actually occurs, shall constitute Good Reason for purposes of this Agreement notwithstanding that it occurred prior to the Change in Control.

2.7.  Highest Annual Bonus.   For purposes of this Agreement, “Highest Annual Bonus” shall mean an amount equal to the highest bonus or bonuses paid or payable to the Executive in respect of any of the five most recently completed fiscal years prior to the Change in Control (or such shorter period that the Executive has been employed).

2.8.  Highest Base Salary.   For purposes of this Agreement, “Highest Base Salary” shall mean the Executive’s annual base salary at the highest rate in effect during the five-year period (or such shorter period that the Executive has been employed) prior to the Change in Control, and shall include all amounts of his base salary that are deferred under the qualified and non-qualified employee benefit plans of the Company or any other agreement or arrangement.

  

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2.9.  Notice of Termination.   For purposes of this Agreement, following a Change in Control, “Notice of Termination” shall mean a written notice of termination from the Company of the Executive’s employment which indicates the specific termination provision in this Agreement relied upon and which sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated.   The Notice of Termination shall also specify the relevant Termination Date.

2.10.  Pro Rata Bonus.   For purposes of this Agreement, “Pro Rata Bonus” shall mean an amount equal to the Highest Annual Bonus multiplied by a fraction, the numerator of which is the number of days elapsed in the fiscal year through the Termination Date and the denominator of which is 365.

2.11. Successors and Assigns.   For purposes of this Agreement, “Successors and Assigns” shall mean a corporation or other entity acquiring all or substantially all the assets and business of the Company (including this Agreement) whether by operation of law or otherwise.

2.12. Termination Date.   For purposes of this Agreement, “Termination Date” shall mean in the case of the Executive’s death, his date of death, in the case of the Executive’s resignation for any reason, the last day of his employment, and in all other cases, the date specified in the Notice of Termination; provided, however, that if the Executive’s employment is terminated by the Company for Cause or due to Disability, the date specified in the Notice of Termination shall be at least 30 days after the date the Notice of Termination is given to the Executive, provided, that in the case of Disability the Executive shall not have returned to the full-time performance of his duties during such period of at least 30 days.

  

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3.  Termination of Employment.

3.1.  If, during the term of this Agreement, the Executive’s employment with the Company shall be terminated within 36 months following a Change in Control, the Executive shall be entitled to the following compensation and benefits:

(a)  If the Executive’s employment with the Company shall be terminated (1) by the Company for Cause or Disability, (2) by reason of the Executive’s death, or (3) by the Executive other than for Good Reason, the Company shall pay to the Executive the Accrued Compensation and, if such termination is other than by the Company for Cause, a Pro Rata Bonus.

(b)  If the Executive’s employment with the Company shall be terminated by reason of the Executive’s death or disability, the Executive, or his beneficiaries or personal representatives, as the case may be, shall be entitled to receive the greater of those amounts described in Section 3.1(a) above or such other compensation and benefits as may be provided for in his employment and other agreements for termination of employment under similar circumstances.

(c)  If the Executive’s employment with the Company shall be terminated for any reason other than as specified in Section 3.1(a), the Executive shall be entitled to the following:

(i)  the Company shall pay the Executive all Accrued Compensation and a Pro Rata Bonus;

  

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(ii)  the Company shall pay the Executive as severance pay and in lieu of any further compensation for periods subsequent to the Termination Date, in a single payment an amount in cash equal to three times the sum of (A) the Highest Base Salary and (B) the Highest Annual Bonus, in each case calculated to include amounts deferred under the Company’s qualified and non-qualified plans;

(iii) for a period of 36 months after the Termination Date (the “Continuation Period”), the Company shall, at its sole expense, provide to the Executive and his dependents and beneficiaries comparable employee benefits provided (x) to the Executive at any time during the one year period prior to the Change in Control or at any time thereafter or (y) to other similarly situated executives who continue in the employ of the Company during the Continuation Period, including, but not limited to, long-term disability, medical, dental, life insurance, and pre-tax insurance premiums.

The coverage and benefits (including deductibles and costs) provided in this Section 3.1(c)(iii) during the Continuation Period shall be no less favorable to the Executive and his dependents and beneficiaries than the most favorable of such coverage and benefits during any of the periods referred to in clauses (x) and (y) above.  The Company’s obligation hereunder with respect to the foregoing benefits shall be limited to the extent that the Executive obtains any such benefits pursuant to a subsequent employer’s benefit plans, in which case the Company may reduce the coverage of any benefits it is required to provide the Executive hereunder as long as the aggregate coverage and benefits of the combined benefit plans is no less favorable to the Executive than the coverage and benefits required to be provided hereunder. 

  

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This subsection (iii) shall not be interpreted so as to limit any benefits to which the Executive, his dependents or beneficiaries may be entitled under any of the Company’s employee benefit plans, programs or practices following the Executive’s termination of employment, including, without limitation, retiree medical and life insurance benefits.

In the case of the continuing medical and dental benefits coverage and the continuing long term disability benefits coverage to be provided pursuant to this Section 3.1(c)(iii) under any self-funded benefit plan, the Company shall impute as taxable income to the Executive an amount equal to the full actuarial cost of such coverage for each period in which such coverage is so provided to the Executive and his dependents and beneficiaries. In the case of the continuing long-term disability benefits coverage to be provided pursuant to this Section 3.1(c)(iii) under any insured disability benefit plan, the Company shall impute as taxable income to the Executive an amount equal to the full premium cost of such benefit coverage, for each period in which such coverage is so provided to the Executive and his beneficiaries.

Notwithstanding the foregoing, the continuing benefit coverages to be provided under this Section 3.1(c)(iii) shall be provided only to the extent permitted under the terms of the applicable benefit plans or insurance policies as in effect on the date of this Agreement. If  as a result of the preceding sentence or because prevented by any change in applicable law occurring after the date of this Agreement the Company cannot provide to the Executive any such continuing  benefit coverage  for any portion of the Continuation Period, then, within 30 days following the Executive’s Termination Date (or if later, the date on which the Company ceases to

provide the Executive with such continuing benefit coverage),

  

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the Company shall pay to the Executive, in a cash lump sum, an amount equal to the actuarial present value of what would have  been the Company’s obligation  to provide such benefit coverage for the Continuation Period, or the remaining portion thereof, as applicable. For purposes of the foregoing, the actuarial present value of such obligation shall be determined in accordance with generally accepted accounting principles, using a discount rate equal to 120 percent of the applicable Federal rate determined under section 1274(d) of the Code (as defined below) and the regulations thereunder, compounded semiannually;

(iv)  the Company shall credit the Executive for pension purposes with three years of service beyond the Termination Date and shall pay to the Executive in a single payment an amount in cash equal to the excess of (A) the Recalculated Retirement Benefit (as provided in this Section 3.1(c)(iv)) had (w) the Executive remained employed by the Company for the additional three complete years of credited service, (x) his annual compensation during such period been equal to the Highest Base Salary and the Highest Annual Bonus, (y) the benefit accrual formulas of each retirement plan remained no less advantageous to the Executive than those in effect immediately preceding the date on which a Change in Control occurred and the Company made employer contributions to each defined contribution plan in which the Executive was a participant at the Termination Date in an amount equal to the amount of such contribution for the plan year immediately preceding the Termination Date, and (z) he been fully (100%) vested in his benefit under each retirement plan in which the Executive was a participant, over (B) the lump sum actuarial equivalent of the aggregate retirement benefit the Executive is actually entitled to receive under such retirement plans.  For purposes of this subsection (iv), the “Recalculated Retirement Benefit” shall mean the lump sum actuarial equivalent of the aggregate

  

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retirement benefit the Executive would have been entitled to receive under the Company’s qualified and non-qualified retirement plans (as clarified in the Executive’s employment agreement).  For purposes of this subsection (iv), the “actuarial equivalent” shall be determined in accordance with the actuarial assumptions used for the calculation of benefits under the applicable retirement plan as applied prior to the Termination Date in accordance with such plan’s past practices; and

(v)  (A) the restrictions on any outstanding incentive awards (including restricted stock and “Performance Shares” (as such term is defined in the Company’s 1996 Stock Incentive Plan, as amended from time to time) ) granted to the Executive under the 1996 Stock Incentive Plan, as amended from time to time, or under any other incentive plan or arrangement shall lapse and such incentive awards shall become immediately 100% vested and all stock options granted to the Executive shall become immediately exercisable and shall become immediately 100% vested (and restrictions on any stock issued upon exercise of stock options shall lapse), and notwithstanding anything to the contrary stated in the applicable plan documents or award agreements, all performance awards awarded to the Executive shall be valued at 100% as though the Company had achieved its target for each respective plan period, and an equal number of unrestricted shares of common stock or cash (as applicable) shall be awarded to the Executive; provided, that this paragraph shall not apply to any awards granted to the Executive pursuant to the Century Aluminum Company Long Term Transformational Incentive Plan (the “LTTIP”), which awards shall be governed solely and exclusively by the provisions of the LTTIP, as amended from time to time, and (B) the Executive shall have the right to require the Company to purchase, for cash, any shares of unrestricted stock or shares purchased upon

  

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exercise of any options or received pursuant to a Performance Share award at a price equal to the fair market value of such shares on the date of purchase by the Company.

(d)  The amounts provided for in Sections 3.1(a), 3.1(c)(i), 3.1(c)(ii) and 3.1(c)(iv) shall be paid in a single lump sum cash payment within five days after the Executive’s Termination Date (or earlier, if required by applicable law).  Notwithstanding the foregoing, all payments made to the Executive shall be paid in conformance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), to the extent subject thereto.

(e)  The Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment or otherwise and no such payment shall be offset or reduced by the amount of any compensation or benefits provided to the Executive in any subsequent employment except as provided in Section 3.1(c)(iii).  Notwithstanding the foregoing, the Executive agrees that during the Continuation Period, he shall not (i) solicit any employees of the Company to leave the Company’s employ to work for any company with which the Executive is employed, or (ii) employ any employee who is employed by the Company at any time during the Continuation Period.  A breach of either of the foregoing covenants will result in the Executive forfeiting any further benefits to which he is entitled pursuant to Section 3.1(c)(iii), although the Executive shall not be required to return any payments to the Company that have been made to the Executive prior to the date of such breach.

(f)   Protection of Confidential Information.

(i)  The Executive acknowledges that his work for the Company will give him access to highly confidential information not available to the public or competitors, including, without limitation, information relating to research and development, marketing plans, copyrightable material, trade secrets and other proprietary or strategic information, which it

  

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would be impracticable for the Company to effectively protect and preserve in the absence of this Section 3.1(f) and the disclosure or misappropriation of which could materially adversely affect the Company.  Accordingly, the Executive hereby agrees:

(A)  Except as specifically permitted by this Section 3.1(f), the Executive will not communicate or divulge to or use for the benefit of himself or any other person, firm, association, or corporation, without the prior written consent of the Company, any Confidential Information (as defined herein) that may be communicated to, acquired by or learned of by the Executive in the course of, or as a result of, the Executive’s employment with the Company or any of its affiliates.  As used herein, “Confidential Information” shall mean information not generally known about the Company and its affiliates, services and products, whether written or not, including, without limitation, information relating to research, development, purchasing, marketing plans, computer software or programs, any copyrightable material, trade secrets and proprietary information, including, but not limited to, customer lists.

(B)  All Confidential Information which is communicated to, acquired by or learned of by the Executive shall remain the sole property of the Company or its affiliates.

(ii)  The confidentiality obligations in this Section 3.1(f) shall not apply to Confidential Information which is or becomes generally available to the public other than as a result of disclosure by the Executive.  If the Executive is required to make disclosure of information subject to this Section 3.1(f) under any court order, subpoena, or other judicial process, then, except as prohibited by law, the Executive will promptly notify the Company thereof, 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.

  

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(iii)  Upon request by the Company, the Executive agrees to deliver promptly to the Company at the termination of the Executive’s employment, or at such other times as the Company may request, all memoranda, notes, plans, records, reports and other documents (and all copies thereof) containing Confidential Information which the Executive may then possess or have under his control.

3.2.  a)  Except as otherwise provided in Section 3.1(b), the severance pay and benefits provided for in this Section 3 shall be in lieu of any other severance or termination pay to which the Executive may be entitled under any employment agreement (other than retirement benefits) or any Company severance or termination plan, program, practice or arrangement.

(b)  The Executive’s entitlement to any other compensation benefits shall be determined in accordance with the Company’s employee benefit plans and other applicable programs, policies and practices then in effect.

(c)  Notwithstanding anything to the contrary in this Agreement, if the Executive is terminated by the Company after the occurrence of a Change in Control and is subsequently rehired by the Company at any time thereafter, the Executive shall not be entitled to any further benefits under Section 3.1(c)(iii) of this Agreement although the Executive shall not be required to return any payments to the Company which have been made to the Executive prior to the date the Executive is rehired.

4.  Notice of Termination.   Following a Change in Control, any purported termination of the Executive’s employment by the Company shall be communicated by Notice of Termination to the Executive.  For purposes of this Agreement, no such purported termination shall be effective without such Notice of Termination.

  

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5.  Excise Tax Payments.

(a)  If any payment or benefit (within the meaning of Section 280G(b)(2) of the Code) to the Executive or for his benefit paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise in connection with, or arising out of, his employment with the Company or a change in ownership or effective control of the Company or of a substantial portion of its assets (each a “Payment” and collectively, the “Payments”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the “Excise Tax”), then the Executive will be entitled to receive an additional payment (a “Gross-Up Payment”), such that the net amount retained by the Executive, after deduction and/or payment of any Excise Tax on the Payments and the Gross-Up Payment and any federal, state and local income and employment tax on the Gross-Up Payment (including any interest or penalties, other than interest and penalties imposed by reason of the Executive’s failure to file timely a tax return or pay taxes shown due on his return, imposed with respect to such taxes), shall be equal to the Payments.

(b)  An initial determination as to whether a Gross-Up Payment is required pursuant to this Agreement and the amount of such Gross-Up Payment shall be made at the Company’s expense by an accounting firm selected by the Company and reasonably acceptable to the Executive which is designated as one of the four largest accounting firms in the United States (the “Accounting Firm”).  The Accounting Firm shall provide its determination (the “Determination”), together with detailed supporting calculations and documentation to the Company and the Executive within five days of the Termination Date if applicable, or such other time as requested by the Executive (provided the Executive reasonably believes that any of the

  

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Payments may be subject to the Excise Tax) and if the Accounting Firm determines that no Excise Tax is payable by the Executive as provided in Section 5(a) above, it shall furnish the Executive with an opinion reasonably acceptable to the Executive to such effect.  Within ten days of the delivery of the Determination to the Executive, the Executive shall have the right to dispute the Determination (the “Dispute”).  The Gross-Up Payment, if any, as determined pursuant to this Paragraph 5(b) shall be paid by the Company to the Executive within five days of the receipt of the Accounting Firm’s determination.  The existence of the Dispute shall not in any way affect the Executive’s right to receive the Gross-Up Payment in accordance with the Determination.  Upon the final resolution of a Dispute, the Company shall promptly pay to the Executive any additional amount required by such resolution.  If there is no Dispute, the Determination shall be binding, final and conclusive upon the Company and the Executive subject to the application of Section 5(c) below.

(c)  As a result of the uncertainty in the application of Sections 4999 and 280G of the Code, it is possible that a Gross-Up Payment (or a portion thereof) will be paid which should not have been paid (an “Excess Payment”) or a Gross-Up Payment (or a portion thereof) which should have been paid will not have been paid (an “Underpayment”).  An Underpayment shall be deemed to have occurred (i) upon notice (formal or informal) to the Executive from any governmental taxing authority that the Executive’s tax liability (whether in respect of the Executive’s current taxable year or in respect of any prior taxable year) may be increased by reason of the imposition of the Excise Tax on a Payment or Payments with respect to which the Company has failed to make a sufficient Gross-Up Payment, (ii) upon a determination by a court, (iii) by reason of a determination by the Company (which shall include the position taken by the Company, together with its consolidated group, on its federal income tax return) or (iv)

  

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upon the resolution of the Dispute to the Executive’s satisfaction.  If an Underpayment occurs, the Executive shall promptly notify the Company and the Company shall promptly, but in any event, at least five days prior to the date on which the applicable government taxing authority has requested payment, pay to the Executive an additional Gross-Up Payment equal to the amount of the Underpayment plus any interest and penalties (other than interest and penalties imposed by reason of the Executive’s failure to file timely a tax return or pay taxes shown due on the Executive’s return) imposed on the Underpayment.  An Excess Payment shall be deemed to have occurred upon a Final Determination (as hereinafter defined) that the Excise Tax shall not be imposed upon a Payment or Payments (or portion thereof) with respect to which the Executive had previously received a Gross-Up Payment.  A “Final Determination” shall be deemed to have occurred when the Executive has received from the applicable government taxing authority a refund of taxes or other reduction in the Executive’s tax liability by reason of the Excess Payment and upon either (x) the date a determination is made by, or an agreement is entered into with, the applicable governmental taxing authority which finally and conclusively binds the Executive and such taxing authority, or if a claim is brought before a court of competent jurisdiction, the date upon which a final determination has been made by such court and either all appeals have been taken and finally resolved or the time for all appeals has expired or (y) the statute of limitations with respect to the Executive’s applicable tax return has expired.  If an Excess Payment is determined to have been made, the amount of the Excess Payment shall be treated as a loan by the Company to the Executive and the Executive shall pay to the Company on demand (but not less than 10 days after the determination of such Excess Payment and written notice has been delivered to the Executive) the amount of the Excess Payment plus interest at an annual rate equal to the Applicable Federal

  

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Rate provided for in Section 1274(d) of the Code from the date the Gross-Up Payment (to which the Excess Payment relates) was paid to the Executive until the date of repayment to the Company.

(d)  Notwithstanding anything contained in this Agreement to the contrary, if, according to the Determination, an Excise Tax will be imposed on any Payment or Payments, the Company shall pay to the applicable government taxing authorities as Excise Tax withholding, the amount of the Excise Tax that the Company has actually withheld from the Payment or Payments.

6.  Successors’ Binding Agreement.

(a)  This Agreement shall be binding upon and shall inure to the benefit of the Company, its Successors and Assigns and the Company shall require any Successors and Assigns to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place.

(b)  Neither this Agreement nor any right or interest hereunder shall be assignable or transferable by the Executive, his beneficiaries or legal representatives, except by will or by the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by the Executive’s legal personal representative.

7.  Fees and Expenses.   The Company shall pay all legal fees and related expenses (including the costs of experts, evidence and counsel) incurred by the Executive as they become due as a result of (a) the Executive’s termination of employment (including all such fees and expenses, if any, incurred in contesting or disputing any such termination of employment), and (b) the Executive seeking to obtain or enforce any right or benefit provided by this Agreement

  

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(including, but not limited to, any such fees and expenses incurred in connection with the Dispute and any other matter arising under Section 5, including the existence and amount of any Excess Payment or Underpayment and issues with respect to the Gross-Up Payment, whether as a result of any applicable government taxing authority proceeding, audit or otherwise, or by any other plan or arrangement maintained by the Company under which the Executive is or may be entitled to receive benefits); provided, however, that any such action by the Executive is commenced in good faith and for good reason; provided, however, that the circumstances set forth in clauses (a) and (b) (other than as a result of the Executive’s termination of employment under circumstances described in Section 2.3(d)) occurred on or after a Change in Control and that no such amounts shall be due and payable by the Company after December 31 of the second calendar year following the calendar year in which the Company has satisfied any and all obligations owed to the Executive under this Agreement.

8.  Notices.   For the purposes of this Agreement, notices and all other communications provided for in the Agreement (including the Notice of Termination) shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, addressed to the respective addresses for the parties set forth on Exhibit A hereto or to any other addresses as the respective parties may designate by notice delivered pursuant to this Section 8; provided that all notices to the Company shall be directed to the attention of the Board with a copy to the Secretary of the Company.  All notices and communications shall be deemed to have been received on the date of delivery thereof or on the third business day after the mailing thereof, except that notice of change of address shall be effective only upon receipt.

  

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9.  Non-Exclusivity of Rights.   Except as otherwise provided in Section 3.2(a), nothing in this Agreement shall prevent or limit the Executive’s continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company and for which the Executive may qualify, nor shall anything herein limit or reduce such rights as the Executive may have under any other agreements with the Company.   Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Company shall be payable in accordance with such plan or program, except as explicitly modified by this Agreement.

10.  Settlement of Claims.   The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company may have against the Executive or others.

11.  Modification, Waiver and Miscellaneous.   No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and the Company.  No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.   No agreement or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.

12.  Governing Law and Jurisdiction.   This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware without giving

  

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effect to the conflict of laws principles thereof.  Any claims arising under or related to this Agreement shall be settled by binding arbitration pursuant to the rules of the American Arbitration Association or such other rules as to which the parties may agree.  The arbitration shall take place in San Francisco, California, within 30 days following service of notice of such dispute by one party on the other.  The arbitration shall be conducted before a panel of three arbitrators, one to be selected by each of the parties and the third to be selected by the other two.  The panel of arbitrators shall have no authority to order a modification or amendment of this Agreement.  The parties agree to abide by all awards rendered in such proceedings.  Such awards shall be final and binding on all parties, and may be filed with the clerk of one or more courts, state or federal, having jurisdiction over the party against whom such award is rendered or such party’s property as a basis of judgment and of the issuance of execution for its collection.

13.  Severability.   The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

14.  Entire Agreement.   Except as otherwise provided below, this Agreement constitutes the entire agreement between the parties hereto and supersedes all prior agreements, if any, understandings and arrangements, oral or written, between the parties hereto with respect to the subject matter hereof, including the Existing SPA.  If the Executive and the Company have also entered into an employment agreement, and there is an inconsistency between the terms of this Agreement and the terms of such employment agreement, then the agreement which provides terms most favorable to the Executive shall govern.

  

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15.  Section 409A.

(a)  To the fullest extent applicable, amounts and other benefits payable under this Agreement are intended to be exempt from the definition of “nonqualified deferred compensation” under Section 409A of the Code including the rulings, notices and other guidance issued by the Internal Revenue Service interpreting the same (collectively, “Section 409A”) in accordance with one or more of the exemptions available under Section 409A.  In this regard, each such payment hereunder that may be treated as payable in the form of “a series of installment payments,” as defined in Treas. Reg. §1.409A-2(b)(2)(iii) shall be deemed a separate payment for purposes of Section 409A.

(b)  To the extent that any amounts or benefits payable under this Agreement are or become subject to Section 409A due to a failure to qualify for an exemption from the definition of nonqualified deferred compensation under Section 409A, this Agreement is intended to comply with the applicable requirements of Section 409A with respect to such amounts or benefits.  This Agreement shall be interpreted and administered to the extent possible in a manner consistent with the foregoing statement of intent.

(c)  Notwithstanding anything in this Agreement or elsewhere to the contrary, if the Executive is a “Specified Employee” (within the meaning of Section 409A(a)(2)(B)(i) of the Code, as determined by the Company’s Compensation Committee) on the date of his termination of employment, and the Company reasonably determines that any amount or other benefit payable under this Agreement on account of the Executive’s “separation from service,” within the meaning of Section 409A(a)(2)(A)(i) of the Code, constitutes nonqualified deferred compensation (after taking into account all exclusions applicable to such payments under Section

  

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409A) that will violate the requirements of Section 409A(a)(2) of the Code if paid or provided at the time specified in the Agreement, then the payment or provision thereof shall be postponed to the first business day after the expiration of six months from the date of the Executive’s termination of employment or, if earlier, the date of the Executive’s death (the “Delayed Payment Date”), and the remaining amounts or benefits shall be paid at the times otherwise provided under the Agreement.  The Company and the Executive may agree to take other actions to avoid a violation of Section 409A at such time and in such manner as permitted under Section 409A.  If this Section 15(c) requires a delay of any payment, such payment shall be accumulated and paid in a single lump sum on the Delayed Payment Date together with interest for the period of delay, compounded monthly, equal to and calculated at the prime rate as set forth in the Eastern edition of the Wall Street Journal on the date of termination.  If a benefit subject to the delayed payment rules of this Section 15(c) is to be provided other than by the payment of money to the Executive, then the provision of such benefit prior to the Delayed Payment Date is conditioned on pre-payment by the Executive to the Company of the full taxable value of the benefit and on the first business day following the Delayed Payment Date, the Company shall repay the Executive for the payments made by the Executive pursuant to the terms of this sentence which would otherwise not have been required of the Executive.

(d)  Notwithstanding anything to the contrary herein, subject to Section 15(c), and to the extent required to comply with Section 409A, a portion of the amount provided for in Section 3.1(c)(ii) shall be paid at the same time and in the same form as required for the payment of severance under the Executive’s employment agreement, rather than a single lump sum, to the extent such portion would have been payable in such alternative form under the Executive’s employment agreement in the absence of a Change in Control, and the Executive’s date of

  

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termination does not occur within two years following a Change in Control that satisfies the requirements for a change in the ownership or effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company, under Section 409A, as determined pursuant to the applicable guidance thereunder.  If payment cannot be made in a lump sum pursuant to this provision, each installment payment shall include interest for the period of delay, compounded monthly, equal to the prime rate as set forth in the Eastern edition of the Wall Street Journal on the date when the lump sum payment would otherwise have been made.

(e)  Notwithstanding any provision of this Agreement to the contrary, the time of payment of any performance shares that are subject to Section 409A as “nonqualified deferred compensation” and that vest pursuant to this Agreement shall not be accelerated unless such acceleration complies with the requirements of Section 409A, as determined pursuant to applicable guidance issued thereunder.  If the payment of vested performance shares cannot be accelerated pursuant to this provision, payment shall include interest for the period of delay, compounded monthly, equal to the prime rate as set forth in the Eastern edition of the Wall Street Journal on the date when payment of the vested performance shares would otherwise have been made.

(f)  The date of the Executive’s “separation from service,” as defined in Section 409A (and as determined by applying the default presumptions in Treas. Reg. §1.409A-1(h)(1)(ii)) shall be treated as the date of his termination of employment for purposes of determining the time of payment of any amount that becomes payable to the Executive hereunder upon his termination of employment and that is properly treated as a deferral of compensation subject to Section 409A after taking into account all exclusions applicable to such payment under

  

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Section 409A and for purposes of determining whether the Executive is a “Specified Employee” on the date of his termination of employment.

(g)  To the extent that the reimbursement of any expenses or the provision of any in-kind benefits under any provision of this Agreement is subject to Section 409A (after taking into account all exclusions applicable to such payments or benefits under Section 409A), (i) the amount of such expenses eligible for reimbursement, or in-kind benefits to be provided, during any one calendar year shall not affect the amount of such expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (ii) reimbursement of any such expense shall be made by no later than December 31 of the year next following the calendar year in which such expense is incurred; and (iii) Executive’s right to receive such reimbursements or in-kind benefits shall not be subject to liquidation or exchange for another benefit.  Any tax gross-up payment (if applicable) and to the extent subject to Section 409A, will be made by the end of the calendar year next following the calendar year in which the Executive remits the related taxes, and any required reimbursement of expenses incurred due to a tax audit or litigation addressing the existence or amount of a tax liability will be made by the end of the calendar year next following the calendar year in which the taxes that are the subject of the audit or litigation are remitted to the taxing authority, or where as a result of such audit or litigation no taxes are remitted, the end of the calendar year next following the calendar year in which such audit is completed or there is a final and nonappealable settlement or other resolution of the litigation, in each case subject to any earlier required deadline for payment otherwise applicable under this Agreement,  In addition, to the extent subject to Section 409A, the right to reimbursement or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit, notwithstanding any contrary provision of this Agreement.

  

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(h)  To the extent the Company is required pursuant to this Agreement to provide continued employee benefits following termination of employment, the provision of such benefits shall be structured in a manner that complies with Section 409A.   Any offset of the Company’s obligation to provide benefits under this Agreement as a result of the provision of benefits pursuant to a subsequent employer’s benefit plans, and any offset of the Company’s obligation to provide severance or termination pay under other agreements or arrangements as a result of the provision of pay and benefits under this Agreement, shall be structured in a manner that does not result in a change in the time or form of payment of non-qualified deferred compensation that violates Section 409A.

(i)  The Executive consents to be bound by the terms of the Supplemental Retirement Income Benefit Plan as amended by the Company prior to the date hereof for purposes of Section 409A. 

  

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and delivered by a duly authorized officer, and the Executive has duly executed and delivered this Agreement, as of the date first written above.

	  	
CENTURY ALUMINUM COMPANY

	  	  
	  	
/s/ William J. Leatherberry

	  	
By:  William J. Leatherberry

	  	
Title:  Executive Vice President and Secretary

	  	  
	  	
EXECUTIVE:

	  	  
	  	
/s/ Logan W. Kruger

	  	
Logan W. Kruger

  

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EXHIBIT A

 

If to the Company:

at its principal executive offices

 

If to the Executive:

His then designated personal address on file with the Companyexhibit10_3.htm

 

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is made as of the 3rd day of June, 2011, by and between Century Aluminum Company, a Delaware corporation (the “Company”), and Michael A. Bless (the “Executive”).

RECITALS

A. The Company and the Executive previously entered into an Employment Agreement, dated January 23, 2006 (the “Original Agreement”), as amended on each of March 19, 2007, August 30, 2007 and December 1, 2008 (the “Amendments”), pursuant to which the Executive serves as the Executive Vice President and Chief Financial Officer of the Company.

B.  The Company and the Executive desire to amend and restate the Original Agreement to incorporate the terms of the Original Agreement and each of the Amendments into a single document and to make certain other changes, in each case as set forth in this Agreement.

C. The Executive is willing to remain employed by the Company on the terms and conditions set forth in this Agreement, effective as of the date hereof.

THE PARTIES AGREE as follows:

1.1  Position and Term of Employment.  

A.           Position.  Executive shall be employed as the Executive Vice President and Chief Financial Officer of the Company and shall devote his full business time, skill, attention and best efforts in carrying out his duties and promoting the best interests of the Company.  Executive shall also serve as a director and/or officer of one or more of the Company’s subsidiaries as may be requested from time to time by the Board of Directors of the Company (the “Board of Directors”).  Subject always to the instructions and control of the Board of Directors, Executive shall report to the Chief Executive Officer of the Company and shall be responsible for the day

  

  

  

to day financial affairs of the Company and for the development of the Company’s short and long term financial plans.

B.           Executive shall not at any time while employed by the Company or any of its affiliates (as defined in the Second Amended and Restated Severance Protection Agreement between the Company and Executive dated as of the date hereof (as amended and restated, from time to time, the “SPA”), incorporated in this Agreement by this reference), without the prior consent of the Board of Directors, knowingly acquire any financial interests, directly or indirectly, in or perform any services for or on behalf of any business, person or enterprise which undertakes any business in substantial competition with the business of the Company and its direct affiliates or sells to or buys from or otherwise transacts business with the Company and its direct affiliates; provided that Executive may acquire and own a de minimis amount of the outstanding capital stock of any public corporation, including any public corporation which  sells or buys from or otherwise transacts business with the Company and its direct affiliates.

C.           Initial Term.  The initial term of this Agreement shall be effective until December 31, 2013 (the “Initial Term”); provided, however, that unless earlier terminated in accordance with the terms of this Agreement, and subject, however, to termination as provided in Section 1.1.D, commencing on January 1, 2012, and on each January 1 thereafter, the Initial Term of this Agreement shall automatically be extended for one year (each then-extended year of this Agreement being an “Extended Term”).  The Initial Term as may be extended by each Extended Term is hereinafter referred to as the “term of this Agreement.”  For the second and each subsequent year during the term of this Agreement, Executive shall be employed at a salary not less than Executive’s salary in the immediately preceding year, and on other terms and conditions at least as favorable to Executive as those applicable to Executive during the

  

  

  

immediately preceding year, or as may otherwise be agreed to by the Company and Executive in writing.

D.           Termination of Renewal.  Either party may give effective written notice to the other party of such notifying party’s intention not to renew this Agreement beyond the then-current term of this Agreement (“Notice of Non-Renewal”), provided that such notice is given by the notifying party not less than 30 months prior to the end of the then-current term of this Agreement (or such shorter term as may be agreed to by the Company and Executive in writing).  If a party delivers a Notice of Non-Renewal, the term of this Agreement will end as of the last day of the then-current term of this Agreement, or as may otherwise be agreed to by the Company and Executive in writing.

 

2.1  Base Salary.

(a)            (i)  Executive shall be paid an annual salary of $443,000, which shall be paid in accordance with the Company’s normal payroll practice with respect to salaried employees, subject to applicable payroll taxes and deductions (the “Base Salary”).  Executive’s Base Salary shall be subject to review and possible change in accordance with the usual practices and policies of the Company.  However, Executive’s base annual salary shall not be reduced to less than $375,000.

(ii) If Executive (a) voluntarily terminates his employment for Good Reason (as defined in the SPA, and as modified by one of the certain letters (both letters together, the “Letter”) (the Letter is incorporated in this Agreement by this reference), to Executive from the Company dated February 17, 2010, “Good Reason”) or (b) does not continue to be employed by the Company for any reason other than (i) his voluntary resignation without Good Reason, (ii) his termination for disability as determined pursuant to Section 7(b), (iii) his death, or (iv) his

  

  

  

termination for cause pursuant to Section 7(c), Executive shall in the circumstances contemplated under Sections 2.1(a)(ii)(a) or (b), above continue to receive an amount equal to his then current Base Salary plus an annual performance bonus equal to the highest annual bonus payment Executive has received in the previous three years (“Highest Annual Bonus”) for the then remaining balance of the term of this Agreement.  In no event shall such payment be less than one year’s Base Salary plus Highest Annual Bonus.  The foregoing amounts shall be paid to Executive over the remaining term of this Agreement or one year (whichever is applicable) in accordance with the Company's payroll and bonus payment policies.  Notwithstanding the foregoing, no payments under this Section 2.1(a)(ii) shall be made if the Company makes all payments to Executive required to be made, if any, under the SPA in the event of a “Change in Control” (as defined in the SPA).

(b) If Executive resigns voluntarily (without Good Reason) or ceases to be employed by reason of his death or by the Company (or any affiliate) for cause as described in Section 7(c) of this Agreement, all benefits described in Sections 2 and 4 hereof shall terminate (except as otherwise provided herein or to the extent previously earned or vested).

(c) If Executive’s employment shall have been terminated as a result of Executive’s disability pursuant to Section 7(b), the Company shall pay in equal monthly installments for the then remaining balance of the term of this Agreement or one year, whichever is greater, to Executive (or his beneficiaries or personal representatives, as the case may be) disability benefits at a rate per annum equal to one hundred percent (100%) of his then current Base Salary, plus amounts equal to the Highest Annual Bonus, less the amount of any bona fide “disability pay” (within the meaning of Treas. Reg. §1.409A-1(a)(5)) paid to Executive, provided that such bona fide disability pay is provided pursuant to a disability plan or “sick leave” plan sponsored by the

  

  

  

Company that (i) covers a substantial number of employees of the Company and (ii) was established prior to the date of Executive’s disability, and provided further that such reduction does not otherwise affect the time of payment of any deferred compensation subject to Section 409A (other than a forfeiture due to the reduction) (“Bona Fide Disability Pay”).

2.2  Bonuses. Executive shall be eligible for an annual performance bonus in amounts between 0 and 100 percent of his Base Salary based upon his individual performance and achievement by the Company of overall objectives as determined by the compensation committee of the Board of Directors (“Compensation Committee”). The target range for Executive’s performance bonus will be between 35% and 100% of the Base Salary.

 

2.3  Expenses. The Company shall pay or reimburse Executive in accordance with the Company’s normal practices any travel, hotel and other expenses or disbursements reasonably incurred or paid by Executive hereunder in connection with the services performed by Executive, in each case upon presentation by Executive of itemized accounts of such expenditures or such other supporting information as the Company may require.

 

3.1  Incentive Plan. Executive shall be eligible for grants of awards under the Company’s long-term incentive plans as in effect from time to time.

 

3.2   Effect of Termination of Employment or Change in Control.

(a) If Executive shall resign voluntarily (other than for Good Reason) or cease to be employed by the Company (or an affiliate) for cause as described in Section 7(c) of this Agreement, except as provided in the SPA, all benefits described in Section 3 hereof shall terminate (except to the extent previously earned or vested and, if Executive retires (unless otherwise stated herein, for the purposes of this Agreement, the terms “retire,” “retirement” or similar shall have the meaning assigned to such (or similar) term(s) in the resolution of the

  

  

  

Compensation Committee of the Board of Directors, dated May 20, 2011 (i.e., voluntary termination of employment for any reason on or after attainment of age 62)), those which may become vested upon retirement pursuant to the terms of any employee benefit plan, program or arrangement in which Executive participates or is a party).

(b) If Executive (i) voluntarily terminates his employment for Good Reason, or (ii) dies or becomes disabled, or (iii) does not continue to be employed by the Company for any reason other than (a) his voluntary resignation without Good Reason, or (b) his death or disability as determined pursuant to Section 7(b) of this Agreement, or (c) his termination for cause pursuant to Section 7(c), all options to purchase shares of the Company’s common stock held by Executive (“Options”) which have not vested as of the date of such voluntary termination, or death or disability, or such non-continuation of employment, as the case may be, will accelerate and vest immediately as of such date, and, in the event of Executive’s death, all such Option rights will transfer to Executive’s representative.  If Executive’s employment terminates by reason of death or disability, Executive or Executive’s representative may exercise all unexercised Options within three years after such death or disability or the expiration date of the Option, whichever is sooner.

(c) If Executive (i) voluntarily terminates his employment for Good Reason, or (ii) dies or becomes disabled, or (iii) does not continue to be employed by the Company for any reason other than (a) his voluntary resignation without Good Reason, or (b) his death or disability as determined pursuant to Section 7(b) of this Agreement, or (c) his termination for cause pursuant to Section 7(c), or (iv) retires, all outstanding and unvested “Performance Shares” (as defined in the Company’s Amended and Restated 1996 Stock Incentive Plan) shall immediately vest, but be

  

  

  

valued and awarded at the times and in the manner awarded to other plan participants pursuant to the terms of the documents governing such Performance Shares.

(d) If there is a Change in Control (as defined in the SPA), then all Options and Performance Shares that have not vested will accelerate and vest immediately.  Performance Shares shall be valued at 100 percent as though the Company had achieved its target for each relevant plan period.  The Executive shall be entitled to receive one share of the Company’s common stock upon the vesting of each such Performance Share.  Upon a Change in Control, the Executive shall have the right to require the Company to purchase, for cash, and at fair market value, any shares of the Company’s common stock purchased upon exercise of any Option or received upon the vesting of any Performance Share.

 

4.1  Other Benefits. Executive shall be entitled to participate in life, medical, dental, hospitalization, disability and life insurance benefit plans made available by the Company to its senior executives and shall also be eligible to participate in existing retirement or pension plans offered by the Company to its senior executives, but, except as otherwise provided in Section 4.2, subject in each case to the terms and requirements of each such plan or program; and

 

4.2  Pension Benefits. Executive shall be entitled to receive retirement benefits as follows:

(a) Qualified Plan Benefits. The Executive shall be entitled to receive payments under the Century Aluminum Employees’ Retirement Plan (the “Qualified Plan”), computed and payable as set forth in that plan.

(b) Supplemental Executive Retirement Benefits. In addition to payments the Executive is entitled to receive under the Qualified Plan, Executive also shall be entitled to receive supplemental retirement benefits as set forth in this Agreement and in the Century Aluminum Amended and Restated Supplemental Retirement Income Benefit Plan (the “SRIB Plan”), which

  

  

  

benefits are an amount equal to the difference between the amount Executive would receive under the Qualified Plan and the amount he would be entitled to receive had his benefit under the Qualified Plan not been subject to the limitations on benefits and contributions set forth in Sections 401 (a)(17) and 415 of the Code.

(c) Vesting. The Qualified Plan benefit and the supplemental retirement benefit described in Section 4.2(b) shall be fully vested as of December 13, 2005. Upon the termination of Executive’s employment he shall be entitled to receive all such benefits as provided in the Qualified Plan and SRIB Plan.

(d) Prohibition on Assignment. Other than pursuant to the laws of descent and distribution, Executive’s right to benefit payments under this Section 4.2 are not subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by creditors of Executive or Executive’s beneficiary.

(e) Source of Payments. Subject to Section 10 of the SRIB Plan (“Section 10”), all benefits under Section 4.2(b) shall be paid in cash from the general funds of the Company, and, except as set forth below, no special or separate fund shall be established or other segregation of assets made to assure such payments; provided, however, that the Company may establish a bookkeeping reserve to meet its obligations hereunder. It is the intention of the parties that the arrangements be unfunded for tax purposes and for purposes of Title I of the Employee Retirement Income Security Act of 1974. In the event of a possible Change in Control, and before a Change in Control occurs, the Company shall contribute to the Trust described in Section 10, and in the manner described therein, those amounts necessary to cause the present value of the Trust assets to be no less than the present value of the future benefits payable under the SRIB Plan.

  

  

  

(g) Executive’s Status. Executive shall have the status of a general unsecured creditor of the Company, and the SRIB Plan shall constitute a mere promise to make benefit payments in the future.

(h) Survival of Benefit. The supplemental retirement benefits described in Section 4.2(b) shall not be reduced during the term of this Agreement or thereafter, and Executive’s rights with respect to these benefits shall survive any termination (or non-renewal) of this Agreement, including, without limitation, a termination pursuant to Section 7(c), or any amendment or termination of the SRIB Plan, to the full extent necessary to protect the interests of Executive under this Agreement and under the terms of the SRIB Plan.

5.  Confidential Information. Except as specifically permitted by this Section 5, and except as required in the course of his employment with the Company, while in the employ of the Company or thereafter, Executive will not communicate or divulge to or use for the benefit of himself or any other person, firm, association, or corporation without the prior written consent of the Company, any Confidential Information (as defined herein) owned, or used by the Company or any of its affiliates that may be communicated to, acquired by or learned of by Executive in the course of, or as a result of, Executive’s employment with the Company or any of its affiliates. All Confidential Information relating to the business of the Company or any of its affiliates which Executive shall use or prepare or come into contact with shall become and remain the sole property of the Company or its affiliates.

“Confidential Information” means information not generally known about the Company and its affiliates, services and products, whether written or not, including information relating to research, development, purchasing, marketing plans, computer software or programs, any

  

  

  

copyrightable material, trade secrets and proprietary information, including, but not limited to, customer lists.

Executive may disclose Confidential Information to the extent it (i) becomes part of the public domain otherwise than as a result of Executive’s breach hereof or (ii) is required to be disclosed by law. If Executive is required by applicable law or regulation or by legal process to disclose any Confidential Information, Executive will provide the Company with prompt notice thereof so as to enable the Company to seek an appropriate protective order.

Upon request by the Company, Executive agrees to deliver to the Company at the termination of Executive’s employment, or at such other times as the Company may request, all memoranda, notes, plans, records, reports and other documents (and all copies thereof) containing Confidential Information that Executive may then possess or have under his control.

 

6.  Assignment of Patents and Copyrights. Executive shall assign to the Company all inventions and improvements within the existing or contemplated scope of the Company’s business made by Executive while in the Company’s employ, together with any such patents or copyrights as may be obtained thereon, both domestic and foreign. Upon request by the Company and at the Company’s expense, Executive will at any time during his employment with the Company and after termination regardless of the reason therefore, execute all proper papers for use in applying for, obtaining and maintaining such domestic and foreign patents and/or copyrights as the Company may desire, and will execute and deliver all proper assignments therefore.

 

7.  Termination.

(a) This Agreement shall terminate upon Executive’s death.

  

  

  

(b) The Company may terminate Executive’s employment hereunder upon fifteen (15) days’ written notice if in the opinion of the Board of Directors, Executive’s physical or mental disability has continued or is expected to continue for one hundred and eighty (180) consecutive days and as a result thereof, Executive will be unable to continue the proper performance of his duties hereunder. For the purpose of determining disability, Executive agrees to submit to such reasonable physical and mental examinations, if any, as the Board of Directors may request and hereby authorizes the examining person to disclose his findings to the Board of Directors.

(c) The Company may terminate Executive’s employment hereunder “for cause” (as hereinafter defined). If Executive’s employment is terminated for cause, Executive’s salary and all other rights not then vested under this Agreement shall terminate upon written notice of termination being given to Executive. As used herein, the term “for cause” means the occurrence of any of the following:

(i) Executive’s disregard of a direct, material order of the Board of Directors, the substance of which order is (a) a proper duty of Executive pursuant to this Agreement, (b) permitted by law and (c) otherwise permitted by this Agreement, which disregard continues after fifteen (15) days’ opportunity and failure to cure; or

(ii) Executive’s conviction for a felony or any crime involving moral turpitude.

 

8.  Additional Remedies. Executive recognizes that irreparable injury will result to the Company and to its business and properties in the event of any breach by Executive of the non-compete provisions of Section 1, the confidentiality provisions of Section 5 or the assignment provisions of Section 6 and that Executive’s continued employment is predicated on the covenants made by him pursuant to such Sections. In the event of any breach by Executive of his obligations under said provisions, the Company shall be entitled, in addition to any other

  

  

  

remedies and damages available, to injunctive relief to restrain any such breach by Executive or by any person or persons acting for or with Executive in any capacity whatsoever and other equitable relief.

 

9.  Successors and Assigns. This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive and the Company and their respective legal representatives, successors and assigns. Neither this Agreement nor any of the duties or obligations hereunder shall be assignable by Executive.

 

10.  Governing Law; Jurisdiction. This Agreement shall be interpreted and construed in accordance with the laws of the State of California. Each of the Company and Executive consents to the jurisdiction of any state or federal court sitting in California, in any action or proceeding arising out of or relating to this Agreement.

 

11.  Headings. The paragraph headings used in this Agreement are for convenience of reference only and shall not constitute a part of this Agreement for any purpose or in any way affect the interpretation of this Agreement.

 

12.  Severability. If any provision, paragraph or subparagraph of this Agreement is adjudged by any court to be void or unenforceable in whole or in part, this adjudication shall not affect the validity of the remainder of this Agreement.

 

13.  Complete Agreement. This Agreement, the SPA and the Letter embody the complete agreement and understanding among the parties, written or oral, which may have related to the subject matter hereof in any way and none of these documents shall be amended orally, but only by the mutual agreement of the parties in writing, specifically referencing this Agreement, the Letter or the SPA, as the case may be. To the extent there is an inconsistency between the terms of this Agreement, the Letter and the terms of the SPA, the terms which provides terms most

  

  

  

favorable to the Executive shall govern.  The Original Agreement and the Amendments shall no longer be effective as of the date hereof.

14.  Counterparts. This Agreement may be executed in one or more separate counterparts, all of which taken together shall constitute one and the same Agreement.

 

15.Section 409A.

(a)  To the fullest extent applicable, amounts and other benefits payable under this Agreement are intended to be exempt from the definition of “nonqualified deferred compensation” under Section 409A of the Code, including the rulings, notices and other guidance issued by the Internal Revenue Service interpreting the same (collectively, “Section 409A”) in accordance with one or more of the exemptions available under Section 409A.  In this regard, each such payment hereunder that may be treated as payable in the form of “a series of installment payments,” as defined in Treas. Reg. §1.409A-2(b)(2)(iii) shall be deemed a separate payment for purposes of Section 409A.

(b)  To the extent that any amounts or benefits payable under this Agreement are or become subject to Section 409A due to a failure to qualify for an exemption from the definition of nonqualified deferred compensation under Section 409A, this Agreement is intended to comply with the applicable requirements of Section 409A with respect to such amounts or benefits.  This Agreement shall be interpreted and administered to the extent possible in a manner consistent with the foregoing statement of intent.

(c)  Notwithstanding anything in this Agreement or elsewhere to the contrary, if the Executive is a “Specified Employee” (within the meaning of Section 409A(a)(2)(B)(i) of the Code, as determined by the Compensation Committee) on the date of his termination of employment, and the Company reasonably determines that any amount or other benefit payable

  

  

  

under this Agreement on account of the Executive’s “separation from service,” within the meaning of Section 409A(a)(2)(A)(i) of the Code, constitutes nonqualified deferred compensation (after taking into account all exclusions applicable to such payments under Section 409A) that will violate the requirements of Section 409A(a)(2) if paid at the time specified in the Agreement, then the payment thereof shall be postponed to and paid on the first business day after the expiration of six months from the date of Executive’s termination of employment or, if earlier, the date of the Executive’s death (the “Delayed Payment Date”), and the remaining amounts or benefits shall be paid at the times otherwise provided under the Agreement. The Company and the Executive may agree to take other actions to avoid a violation of Section 409A at such time and in such manner as permitted under Section 409A.  If this Section 15(c) requires a delay of any payment, such payment shall be accumulated and paid in a single lump sum on the Delayed Payment Date together with interest for the period of delay, compounded monthly, and calculated at the prime rate as set forth in the Eastern edition of the Wall Street Journal on the date of termination. If a benefit subject to the delayed payment rules of this Section 15(c) is to be provided other than by the payment of money to the Executive, then the provision of such benefit prior to the Delayed Payment Date is conditioned on pre-payment by the Executive to the Company of the full taxable value of the benefit and on the first business day following the Delayed Payment Date, the Company shall repay the Executive for the payments made by the Executive pursuant to the terms of this sentence which would otherwise not have been required of the Executive.

(d)  The date of the Executive’s “separation from service,” as defined in Section 409A (and as determined by applying the default presumptions in Treas. Reg. §1.409A-1(h)(1)(ii)), shall be treated as the date of his termination of employment for purposes of determining the

  

  

  

time of payment of any amount that becomes payable to the Executive hereunder upon his termination of employment and that is properly treated as a deferral of compensation subject to Section 409A after taking into account all exclusions applicable to such payment under Section 409A and for purposes of determining whether the Executive is a “Specified Employee” on the date of his termination of employment.

(e)  Notwithstanding any provision of this Agreement to the contrary, the time of payment of any Performance Share awards that are subject to Section 409A as “nonqualified deferred compensation” and that vest on an accelerated basis pursuant to this Agreement shall not be accelerated unless such acceleration is permissible under Section 409A.  If the payment of vested Performance Share awards cannot be accelerated pursuant to this provision, payment shall include interest for the period of delay, compounded monthly, equal to the prime rate as set forth in the Eastern edition of the Wall Street Journal on the date when payment of the vested Performance Share awards would otherwise have been made.

(f)  Notwithstanding any provision of this Agreement to the contrary, to the extent that the reimbursement of any expenses or the provision of any in-kind benefits under any provision of this Agreement is subject to Section 409A (after taking into account all exclusions applicable to such payments or benefits under Section 409A), (i) the amount of such expenses eligible for reimbursement, or in-kind benefits to be provided, during any one calendar year shall not affect the amount of such expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (ii) reimbursement of any such expense shall be made by no later than December 31 of the year next following the calendar year in which such expense is incurred; and (iii)  Executive’s right to receive such reimbursements or in-kind benefits shall not be subject to liquidation or exchange for another benefit.

  

  

  

(g) Notwithstanding any provision of this Agreement to the contrary, if Executive becomes entitled to the payment of severance benefits pursuant to this Agreement upon termination of employment as a result of Executive’s disability, the Company shall pay such disability benefits in accordance with the Company’s payroll policy (whether or not such payroll policy provides for monthly payments) for the period otherwise specified under this Agreement.

(h)  Notwithstanding any provision of this Agreement to the contrary, benefit payments under the SRIB Plan shall be made to Executive in the manner provided under the SRIB Plan, as amended by the Company to comply with Section 409A of the Code.  Except as otherwise provided in the SRIB Plan, no benefits shall be payable under Section 4.2(b) prior to death, disability or termination of employment.

  

  

  

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and delivered by a duly authorized officer, and the Executive has duly executed and delivered this Agreement, as of the date first written above.

	  	
CENTURY ALUMINUM COMPANY

	  	  
	  	
/s/ William J. Leatherberry

	  	
By:  William J. Leatherberry

	  	
Title:  Executive Vice President and Secretary

	  	  
	  	
EXECUTIVE:

	  	  
	  	
/s/ Michael A. Bless

	  	
Michael A. Bless

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