8KCompensatoryArrangementsofCertainOfficers

0001518587-14-000006.txt : 20140122 0001518587-14-000006.hdr.sgml : 20140122 20140122171657 ACCESSION NUMBER: 0001518587-14-000006 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20140115 ITEM INFORMATION: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20140122 DATE AS OF CHANGE: 20140122 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Aleris Corp CENTRAL INDEX KEY: 0001518587 STANDARD INDUSTRIAL CLASSIFICATION: SECONDARY SMELTING & REFINING OF NONFERROUS METALS [3341] IRS NUMBER: 271539594 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-35499 FILM NUMBER: 14540942 BUSINESS ADDRESS: STREET 1: 25825 SCIENCE PARK DRIVE STREET 2: SUITE 400 CITY: BEACHWOOD STATE: OH ZIP: 44122 BUSINESS PHONE: (216) 910-3400 MAIL ADDRESS: STREET 1: 25825 SCIENCE PARK DRIVE STREET 2: SUITE 400 CITY: BEACHWOOD STATE: OH ZIP: 44122 FORMER COMPANY: FORMER CONFORMED NAME: Aleris Holding Co DATE OF NAME CHANGE: 20110420 8-K 1 a8kcompensatoryarrangement.htm 8-K 8KCompensatoryArrangementsofCertainOfficers

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported): January 15, 2014

ALERIS CORPORATION

(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)



Delaware (State or other jurisdiction of incorporation)	333-185443 (Commission File Number)	27-1539594 (IRS Employer Identification No.)

25825 Science Park Drive, Suite 400, Cleveland, Ohio 44122
(Address of Principal Executive Offices, including Zip Code)

(216) 910-3400
(Registrant’s Telephone Number, Including Area Code)

Not Applicable
(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:



o		Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)



o		Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)



o		Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))



o		Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Amendments to 2010 Equity Incentive Plan

On January 15, 2014 and January 21, 2014, the Board of Directors (“Board”) of Aleris Corporation (the “Company”) approved amendments to the Company’s 2010 Equity Incentive Plan (the “Plan”) that:


•	increased the maximum aggregate number of shares of common stock reserved for issuance pursuant to awards made under the Plan;


•	increased the number of shares of common stock that may be issued pursuant to restricted stock units (“RSUs”) awards made under the Plan; and


•	modified the definitions of the terms “Initial Investors” and “Initial Investors and their affiliates” as used in the Plan, so that such terms only referred to Oaktree Capital Management, L.P. and its affiliates.

The above summary is qualified in its entirety by the Amendments to 2010 Equity Incentive Plan, which are attached as Exhibits 10.1 and 10.2.

2014 Named Executive Officer Equity Grants

Chief Executive Officer Option Grant

On January 15, 2014, the Board, acting as the Committee under the Plan, authorized a grant to the Company’s Chief Executive Officer, Mr. Steven Demetriou, calculated in accordance with the terms of his Amended and Restated Employment Agreement, and, at Mr. Demetriou’s request, the actual grant was reduced to 333,333 stock options under the Plan. The stock options were granted with an exercise price equal to the fair market value of a share of common stock on the date of grant and are scheduled to vest over a three-year period, with 25% vesting on the first and second anniversaries of the date of grant and 50% vesting on the third anniversary of the date of grant.

Under the Plan, as amended, and the stock option award agreement, upon a Change in Control (as defined in the Plan, as amended), the stock option award would vest to the extent necessary to make the aggregate percentage of all applicable stock option awards that have become vested as of the date of such Change in Control at least equal to the percentage by which the Initial Investors (as defined in the Plan, as amended) have reduced their combined common stock interest in the Company. The remaining unvested equity, if applicable, would continue to vest in accordance with their terms. If the Initial Investors’ combined common stock interest in the Company is reduced by 75% or more, then all applicable tranches of the stock option will fully vest. The applicable percentage will be measured by comparing the number of shares held collectively by the Initial Investors as of the Emergence Date (as defined in the Plan, as amended) and still held by them immediately following the Change in Control to the number of shares they held on the Emergence Date (to be adjusted for stock splits, stock dividends and similar events). The Board has also approved an amendment to equity award agreements that would become effective in connection with the Company’s proposed initial public offering (which is not guaranteed to occur), under which all outstanding awards would be subject to the terms of the amended and restated Plan (which would also become effective in connection with the effectiveness of the Company’s proposed initial public offering (which is not guaranteed to occur)).

Pursuant to the stock option award agreement, upon a voluntary termination of employment by Mr. Demetriou without Good Reason (as defined in the Plan, as amended), he would forfeit all unvested

stock options immediately and would have the lesser of 90 days or the remaining term to exercise all vested stock options. Additionally, upon a termination of employment by the Company for Cause (as defined in the Plan, as amended), Mr. Demetriou would forfeit all stock options (whether vested or unvested). Upon a termination of employment by the Company without Cause or by Mr. Demetriou for Good Reason (as defined in the Plan, as amended), pursuant to the stock option award agreement, the unvested stock options would become immediately vested with respect to 50% of the unvested amount. Mr. Demetriou would then have six months to exercise all vested stock options. If Mr. Demetriou’s employment is terminated as a result of death or disability, all unvested stock options would be forfeited immediately and Mr. Demetriou would have the shorter of one year or the length of the remaining term to exercise all vested stock options.

The above summary is qualified in its entirety by the Company’s 2014 Stock Option Award Agreement, dated January 15, 2014, to Steven J. Demetriou, which is attached as Exhibit 10.3.

Other Named Executive Officer Equity Grants

After a review of the overall executive compensation packages of each of our named executive officers other than Mr. Demetriou, and in consideration of the fact that no equity has been granted to those named executive officers since 2010, on January 21, 2014, the Board, acting as the Committee under the Plan, approved the following restricted stock units (“RSUs”) and stock option grants under the Plan, as amended:



Named Executive Officer	RSU Award	Stock Option Award
Roeloff IJ. Baan	23,100	85,700
Sean M. Stack	27,300	101,300
Thomas W. Weidenkopf	10,500	39,000
Christopher R. Clegg	12,600	46,700

The stock options were granted with an exercise price equal to the fair market value of a share of common stock on the date of grant. Both the RSUs and the stock options are scheduled to vest over a three-year period, with 25% vesting on the first and second anniversaries of the date of grant and 50% vesting on the third anniversary of the date of grant.

Under the Plan, as amended and the equity award agreements, upon a Change in Control, each RSU and stock option grant would vest to the extent necessary to make the aggregate percentage of all applicable RSU and stock option awards that have become vested as of the date of such Change in Control at least equal to the percentage by which the Initial Investors (as defined in the Plan, as amended) have reduced their combined common stock interest in the Company. The remaining unvested equity, if applicable, would continue to vest in accordance with their terms. If the Initial Investors’ combined common stock interest in the Company is reduced by 75% or more, then all applicable tranches of the stock option and the RSUs will fully vest. The applicable percentage will be measured by comparing the number of shares held collectively by the Initial Investors as of the Emergence Date (as defined in the Plan, as amended) and still held by them immediately following the Change in Control to the number of shares they held on the Emergence Date (to be adjusted for stock splits, stock dividends and similar events). The Board has also approved an amendment to the equity award agreements that would become effective in connection with the Company’s proposed initial public offering (which is not guaranteed to occur), under which all outstanding awards would be subject to the terms of the amended and restated

Plan (which would also become effective in connection with the effectiveness of the Company’s proposed initial public offering (which is not guaranteed to occur)).

Pursuant to each award agreement, upon a voluntary termination of employment by the named executive officer without Good Reason (as defined in the Plan, as amended), the named executive officer would forfeit all unvested RSUs and stock options immediately and would have the lesser of 90 days or the remaining term to exercise all vested stock options. Additionally, upon a termination of employment by the Company for Cause (as defined in the Plan, as amended), the named executive officer would forfeit all stock options (whether vested or unvested) and unvested RSUs. Upon a termination of employment by the Company without Cause or by the named executive officer for Good Reason (as defined in the Plan, as amended), pursuant to each award agreement, the unvested stock option and RSUs, as applicable, would become immediately vested with respect to 33 1/3%, of the unvested amount. Each named executive officer would then have six months to exercise all vested stock options. If the named executive officer’s employment is terminated as a result of death or disability, all unvested stock options and RSUs would be forfeited immediately and the named executive officer would have the shorter of one year or the length of the remaining term to exercise all vested stock options.

The above summary is qualified in its entirety by the Company’s Form of 2014 Executive Stock Option Award Agreement, which is attached as Exhibit 10.4; and the Company’s Form of 2014 Executive RSU Award Agreement, which is attached as Exhibit 10.5.

Amendments to Certain Employment Agreements

On January 21, 2014, the Board approved an amendment to the employment agreements with each of Messrs. Roeloff IJ. Baan, Sean M. Stack, Thomas W. Weidenkopf and Christopher R. Clegg, to acknowledge the change in the definitions of the terms “Initial Investors” and “Initial Investors and their affiliates” as used in the Plan, as amended, so that such terms only referred to Oaktree Capital Management, L.P. and its affiliates.

The above summary is qualified in its entirety by the Company’s Form of Amendment to Employment Agreement, which is attached as Exhibit 10.6.

2014 Changes in Outside Director Cash Compensation and RSU Grants

After a review of the overall compensation packages of the Company’s outside directors, on January 15, 2014, the Board:


•	increased the annual cash retainer for each outside director (including Mr. Wagoner) from $50,000 to $90,000, payable in calendar quarterly installments;


•	increased the annual cash payment for the chair of the Company’s Audit Committee from $15,000 to $18,750, payable in calendar quarterly installments; and


•	while acting as the Committee under the Plan, approved grants of 3,308 RSUs to each outside director (including Mr. Wagoner).

Each RSU grant settles at vesting through the issuance of shares of the Company’s common stock equal to the number of RSUs that have vested. On January 15, 2015, the restrictions will lapse on the RSUs and they will vest as to 100%. During the one-year vesting period, if the director is not reelected, reappointed or is removed from the Board, all RSUs of that director will vest. If Board service ceases for any other reason, all unvested RSUs are forfeited. If a director is serving on the Board at the time of a Change in Control, as defined in the Plan, as amended, his or her RSUs will vest to the extent set forth in the award agreements. The Board has also approved an amendment to the equity award agreements that

would become effective in connection with the Company’s proposed initial public offering (which is not guaranteed to occur), under which all outstanding awards would be subject to the terms of the amended and restated Plan (which would also become effective in connection with the effectiveness of the Company’s proposed initial public offering (which is not guaranteed to occur)).

The above summary is qualified in its entirety by the Company’s Form of 2014 Non-Employee Director RSU Award Agreement, attached as Exhibit 10.7.

For each of the directors designated by the Oaktree Funds (each, an “Oaktree director”), all cash and non-cash compensation paid to the Oaktree directors with respect to their service as one of the Company’s directors is turned over to an Oaktree affiliate pursuant to an agreement between Oaktree and the Oaktree director as part of his or her employment with Oaktree.

* Mr. Donald T. Misheff’s RSU award is described separately in the Amendment No. 1 on Form 8-K/A, filed on January 22, 2014, to its Current Report on Form 8-K, dated December 4, 2013, and filed on December 10, 2013.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.



10.1	Amendment to 2010 Equity Incentive Plan, effective January 15, 2014.
10.2	Amendment to 2010 Equity Incentive Plan, effective January 21, 2014.
10.3	2014 Stock Option Award Agreement, dated January 15, 2014, to Steven J. Demetriou.
10.4	Form of 2014 Executive Stock Option Award Agreement.
10.5	Form of 2014 Executive RSU Award Agreement.
10.6	Form of Amendment to Employment Agreement.
10.7	Form of 2014 Non-Employee Director RSU Award Agreement.

SIGNATURES

According to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.



		ALERIS CORPORATION





Date: January 22, 2014		/s/ Scott A. McKinley
		By: Scott A. McKinley
		Its: Senior Vice President and Controller

EXHIBIT INDEX



Exhibit No.		Description

10.1		Amendment to 2010 Equity Incentive Plan, effective January 15, 2014.
10.2		Amendment to 2010 Equity Incentive Plan, effective January 21, 2014.
10.3		2014 Stock Option Award Agreement, dated January 15, 2014, to Steven J. Demetriou.
10.4		Form of 2014 Executive Stock Option Award Agreement.
10.5		Form of 2014 Executive RSU Award Agreement.
10.6		Form of Amendment to Employment Agreement.
10.7		Form of 2014 Non-Employee Director RSU Award Agreement.

EX-10.1 2 exhibit101-amendmentto2010.htm AMENDMENT TO 2010 EQUITY INCENTIVE PLAN, EFFECTIVE JANUARY 15, 2014 Exhibit101-Amendmentto2010EquityIncentivePlaneffectiveasofJanuary152014

Exhibit 10.1

FORM OF AMENDMENT TO

ALERIS HOLDING COMPANY 2010 EQUITY INCENTIVE PLAN

The Aleris Holding Company 2010 Equity Incentive Plan, as amended (the “Plan”), is hereby amended effective as of January 15, 2014 (the “Effective Date”) as follows:

1. Amendments.


(a)	The first two sentences of Section 5(a) of the Plan shall be deleted in its entirety and replaced with the following:

Subject to the following provisions of this Section and Section 11(a) of the Plan, the maximum aggregate number of Shares that may be issued pursuant to Awards made under the Plan is 4,871,180. The maximum aggregate number of Shares that may be issued pursuant to Restricted Stock Units under the Plan is 471,762.


(b)	Section 2(u) of the Plan shall be deleted in its entirety and replaced with the following:

“Initial Investors” shall mean Oaktree Capital Management, L.P. and its affiliates.

2. Effect on the Plan. This Amendment shall not constitute a waiver, amendment or modification of any provision of the Plan not expressly referred to herein. Except as expressly amended or modified herein, the provisions of the Plan are and shall remain in full force and effect and are hereby ratified and confirmed. On and after the Effective Date, each reference in the Plan to “this Plan,” “herein,” “hereof,” “hereunder” or words of similar import shall mean and be a reference to the Plan as amended hereby. To the extent that a provision of this Amendment conflicts with or differs from a provision of the Plan, such provision of this Amendment shall prevail and govern for all purposes and in all respects.

IN WITNESS WHEREOF, the undersigned, being authorized by the Board of Directors to execute this Amendment in evidence of the adoption of this Amendment by the Board of Directors, has executed this Amendment as of the date first written above.



ALERIS CORPORATION



By:	/s/ Christopher R. Clegg
	Christopher R. Clegg
	Executive Vice President, General Counsel
	& Secretary

EX-10.2 3 exhibit102amendmentto2010e.htm AMENDMENT TO 2010 EQUITY INCENTIVE PLAN, EFFECTIVE JANUARY 21, 2014 Exhibit102Amendmentto2010EquityIncentivePlaneffectiveJanuary212014

Exhibit 10.2

FORM OF AMENDMENT TO

ALERIS HOLDING COMPANY 2010 EQUITY INCENTIVE PLAN

The Aleris Holding Company 2010 Equity Incentive Plan, as amended (the “Plan”), is hereby amended effective as of January 21, 2014 (the “Effective Date”) as follows:

1. Amendment.


(a)	The first two sentences of Section 5(a) of the Plan shall be deleted in its entirety and replaced with the following:

Subject to the following provisions of this Section and Section 11(a) of the Plan, the maximum aggregate number of Shares that may be issued pursuant to Awards made under the Plan is 5,328,875. The maximum aggregate number of Shares that may be issued pursuant to Restricted Stock Units under the Plan is 795,417.



	ALERIS CORPORATION



	By:	/s/ Christopher R. Clegg
		Christopher R. Clegg
		Executive Vice President, General Counsel & Secretary

EX-10.3 4 exhibit103-2014stockoption.htm 2014 STOCK OPTION AWARD AGREEMENT, DATED JANUARY 15, 2014, STEVEN J. DEMETRIOU Exhibit103-2014StockOptionAwardAgreementdatedJanuary152015toStevenJDemetriou

Exhibit 10.3

ALERIS CORPORATION

2010 EQUITY INCENTIVE PLAN

2014 STOCK OPTION AGREEMENT

THIS STOCK OPTION AGREEMENT (the “Agreement”) is made effective as of the date set forth on Exhibit A hereto (the “Grant Date”) between ALERIS CORPORATION, a Delaware corporation f/k/a Aleris Holding Company (together with its successors and assigns) (the “Company”), and the person named on Exhibit A hereto (the “Optionee”). Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in the Plan (as defined below).

W I T N E S S E T H:

In consideration of the mutual promises and covenants made herein and of the Optionee having entered into an amended and restated employment agreement (the “Employment Agreement”) with a subsidiary of the Company effective as of September 15, 2013, and of the mutual benefits to be derived herefrom, the parties hereto agree as follows:

1.Grant of Stock Option. Subject to the provisions of this Agreement and to the provisions of the Aleris Holding Company 2010 Equity Incentive Plan, as amended, supplemented or otherwise modified from time to time (the “Plan”), which is hereby incorporated by reference herein, to the extent set forth in Section 17 below, the Company grants to the Optionee as of the Grant Date the right and option (the “Stock Option”) to purchase shares of common stock of the Company, par value $0.01 per share (“Common Stock”). The Stock Option is granted at an exercise price per share of $27.20. Unless earlier terminated pursuant to the terms of this Agreement, the Stock Option shall (except to the extent otherwise provided in Section 10 below) expire on the tenth anniversary of the Grant Date (the “Option Period”). Subject to Section 17 below, this Agreement shall be construed in accordance with the provisions of the Plan. The Stock Option is not intended to be treated as an “incentive stock option,” as such term is defined in Section 422 of the Code. If requested by the Company, as a condition precedent to the Optionee’s exercise of any portion of the Stock Option pursuant to this Agreement prior to the effectiveness of an initial public offering of the Common Stock of the Company, the Optionee shall execute the Stockholders Agreement, if any (unless the Optionee has already done so), in which case the Optionee shall have all of the rights and obligations of a Stockholder (as such term is defined in the Stockholders Agreement) described therein in respect of any shares of Common Stock that are acquired by the Optionee pursuant to exercise of the Stock Option. For periods prior to the effectiveness of an initial public offering of the Common Stock of the Company, any shares of Common Stock received by the Optionee upon any exercise of the Stock Option shall be subject to all terms of the Stockholders Agreement (without regard to whether or not the Optionee is a party to the Stockholders Agreement).

2. Exercisability of the Stock Option.

(a) Time-Based Vesting. Subject to Section 5 of this Agreement, the Stock Option shall vest and become exercisable as follows:



Vesting Date	Vested Percentage	Cumulative Vested Percentage
January 15, 2015	25%	25%
January 15, 2016	25%	50%
January 15, 2017	50%	100%

(b) Change of Control. Notwithstanding Section 2(a) and subject to Section 4 of this Agreement, upon a Change of Control, the Stock Option shall vest and become exercisable to the extent necessary to make the aggregate percentage of the Stock Option that has become vested and exercisable as of the date of such Change of Control at least equal to the percentage by which the Initial Investors have reduced their combined Common Stock interest in the Company (measured by the number of shares of the Company’s Common Stock acquired on the Effective Date and still held immediately following the Change of Control as compared to the number of shares of the Company’s Common Stock held as of the Effective Date, in each case as adjusted for stock splits, stock dividends, and the like); provided, however, that if the Initial Investors’ combined Common Stock interest in the Company is reduced by 75% or more (as measured above), then the Stock Option shall vest, and be exercisable, in full. By way of example and for illustration purposes only, if there is a Change of Control following the second anniversary of the Effective Date when 50% of the Stock Option is vested and exercisable and the Initial Investors reduce their combined Common Stock interest in the Company by 70%, then an additional 20% of the Stock Option shall vest and become exercisable upon the Change of Control, and, subject to Section 11 of the Plan and Section 7 of this Agreement, the remaining 30% of the Stock Option shall continue to vest in accordance with Section 2(a) hereof. For purposes of this Agreement, the terms “Initial Investors” and “Initial Investors and their affiliates” as used in the Plan and in this Agreement, including, without limitation, as applied to the “Change of Control” definition under the Plan, is hereby modified so that such terms are understood to include only Oaktree Capital Management, L.P. and its Affiliates and to exclude Apollo Management VII, L.P. and its Affiliates.

3. Method of Exercise of the Stock Option.

(a) All or any portion of the Stock Option that has become vested and exercisable may be exercised by delivery to the Company of a written notice stating the number of whole Shares to be purchased pursuant to this Agreement and, except as provided in Section 3(b) below, accompanied by cash or a personal check or bank draft in the amount equal to the aggregate exercise price for such Shares. The Stock Option may not be exercised in respect of any fractional Share unless specifically consented to by the Committee in writing. The exercise of less than the entire vested and exercisable portion of the Stock Option shall not cause the expiration, termination, or cancellation of the remaining Stock Option (whether the remaining Stock Option is vested or unvested, exercisable or not exercisable). All shares of Common Stock of the Company delivered upon any exercise of the Option shall, when delivered, (i) be duly authorized, validly issued, fully paid and nonassessable, (ii) be registered for sale, and for resale, under U.S.,

State and federal securities laws to the extent that other securities of the same class are then so registered or qualified and (iii) be listed, or otherwise qualified, for trading on any securities exchange or securities market on which securities of the same class are then so listed or qualified.

(b) The Optionee shall be able to satisfy all or any portion of (i) the exercise price, and/or (ii) applicable withholding taxes due in connection with such exercise, by (A) at his election reducing the number of Shares otherwise deliverable pursuant to such exercise of the Stock Option by a number of Shares (including, where applicable, fractional shares) having a Fair Market Value on the date of exercise equal to the exercise price and/or applicable withholding taxes (provided that, unless otherwise specifically consented to by the Committee, only the number of whole Shares deliverable pursuant to the requested exercise (after giving effect to such reduction) shall be delivered to the Optionee, with any remaining fractional Share deemed unexercised and, only to the extent permitted by the terms of this Agreement, to remain outstanding and exercisable) or (B) at the sole discretion of the Committee, utilizing some other form of net physical settlement or method of cashless exercise as determined by the Committee. The Committee may, in its sole discretion, also permit payment of all or any portion of the exercise price and/or applicable withholding taxes due in connection with such exercise by surrender by the Optionee of a number of Shares that are already owned by the Optionee having a Fair Market Value equal to such portion of the exercise price and/or applicable withholding taxes. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value on the date that the Stock Option is exercised.

4. Termination of Employment.

(a) Termination for Cause or without Good Reason. If the Optionee’s employment under the Employment Agreement is terminated by his employer at any time for Cause, the Stock Option (including any exercisable portion thereof to the extent not yet exercised) shall be cancelled and forfeited in its entirety as of the Date of Termination (as defined in the Employment Agreement) without consideration therefor and expire on such date; provided that, for avoidance of doubt, the Stock Option (to the extent previously exercised), and any distribution previously made in respect of the Stock Option upon exercise or cancellation, shall be subject to forfeiture only as expressly provided elsewhere in this Agreement or in the Employment Agreement; and, provided, further, that the foregoing shall not in any way limit any other rights that either party may have with respect to the other party. If the Optionee’s employment under the Employment Agreement is terminated by the Optionee without Good Reason (as defined in the Employment Agreement), (i) the portion of the Stock Option that is unvested on the Date of Termination shall be cancelled and forfeited without consideration therefor, and (ii) subject to Section 7 of this Agreement, the portion of the Stock Option that is vested and exercisable on the date of such termination may be exercised at any time through the earlier of (a) the 90^th day following the Date of Termination and (b) the last day of the Option Period, and after which such portion shall (except to the extent otherwise provided in Section 10 below) expire.

(b) Termination without Cause or for Good Reason. If the Optionee’s employment under the Employment Agreement is terminated by his employer not for Cause (including, for avoidance of doubt, due to non-extension of the Employment Period by his employer under Section 3 of the Employment Agreement) or by the Optionee with Good Reason, the Stock Option shall vest and become exercisable on the Date of Termination with respect to 50% of the Shares covered respectively thereby that have not previously vested and become exercisable as of such date. Subject to Section 7 of this Agreement, the portion of the Stock Option that is or becomes exercisable on the Date of Termination may be exercised at any time through the earlier of (i) the six (6) month anniversary of the Date of Termination and (ii) the last day of the Option Period, and after which such portion shall (except to the extent otherwise provided in Section 10 below) expire. Notwithstanding the foregoing, if the Optionee’s employment under the Employment Agreement is terminated by his employer not for Cause or by the Optionee with Good Reason, in each case, in anticipation of or within twelve (12) months following a Change of Control, the entire Stock Option shall become vested and exercisable immediately and, subject to Section 7 of this Agreement, may be exercised at any time through the earlier of (a) the twelve (12) month anniversary of the Date of Termination, and (b) the last day of the Option Period, after which such portion shall (except to the extent otherwise provided in Section 10 below) expire. For purposes of this Section 4(b), a termination of employment will be deemed to be “in anticipation of” a Change of Control if such termination (or the Good Reason event giving rise to such termination) is done by the Company or any Subsidiary or Affiliate with the principal purpose of avoiding or evading its compensation obligations that would arise upon a termination following a Change of Control.

(c) Termination due to death or Disability. If the Optionee’s employment is terminated as a result of the Optionee’s death or Disability, (i) the portion of the Stock Option that is unvested at the time of such termination shall be cancelled and forfeited without consideration therefor, and (ii) the portion of the Stock Option that is vested and exercisable as of the Date of Termination may be exercised at any time through the earlier of (a) the one-year anniversary of the Date of Termination and (b) the last day of the Option Period, subject to Section 7 of this Agreement, after which such portion shall (except to the extent otherwise provided in Section 10 below) expire.

(d) Nothing in this Agreement or the Plan shall confer upon the Optionee any right to continue in the employ or service of the Company or any of its Subsidiaries or Affiliates or interfere in any way with the right of the Company or any of its Subsidiaries or Affiliates to terminate the Optionee’s employment or service at any time and for any reason.

5. Nontransferability of the Stock Option. The Stock Option may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner by the Optionee (other than, in the event of the Optionee’s death, or by will or the applicable laws of descent and distribution) and any purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance in violation of this Section 5 shall be void and unenforceable against the Company or any Subsidiary or Affiliate. The Stock Option may be exercised during the lifetime of the Optionee, only by such Optionee, and if exercisable after the

death of the Optionee, may be exercised by his legatees, personal representatives or distributees. Any permitted transfer of the Stock Option by will or the laws of descent and distribution shall not be effective to bind the Company unless the Committee shall have been furnished with written notice thereof and a copy of such evidence as the Committee may reasonably deem necessary to establish the validity of the transfer, the acceptance by the transferee or transferees of the terms and conditions of the Plan and this Agreement and the agreement to be bound by the acknowledgments made by the Optionee in connection with the grant of this Stock Option.

6. Rights as a Stockholder. Neither the Optionee nor any transferee of the Stock Option shall have any rights as a stockholder, including, without limitation, the right to receive dividends, with respect to any Shares covered by the Stock Option until the date when his or her purchase is entered upon the records of the Company or the duly authorized transfer agent of the Company.

7. Adjustment in the Event of Change in Stock; Change of Control.

(a) In the event of any merger, consolidation, reorganization, recapitalization, spin-off, split-up, combination, modification of securities, exchange of securities, liquidation, dissolution, share split, reverse share split, share dividend, other distribution of securities or other property in respect of shares or other securities (other than ordinary recurring cash dividends), or other change in corporate structure or capitalization affecting the rights or value of the securities and property then subject to the Stock Option, the Committee shall promptly make equitable and appropriate adjustment(s) in the number and/or kind of the securities and/or property that are subject to the Stock Option, and/or the exercise price, and/or other terms or conditions of the Stock Option, so as to avoid dilution or enlargement of the benefits or potential benefits represented by the Stock Option. Any determination made by the Committee regarding any adjustment will, to the extent reasonable and made in good faith, be final and conclusive.

(b) Effective upon a Change of Control, unless otherwise specifically prohibited under applicable laws or by the rules and regulations of any governmental agency or self-regulatory body and without in any way limiting the extent of Section 7(a), the Committee is authorized (but not obligated) to make any or all of the following adjustments (or any combination thereof) to the Stock Option:

(i) the continuation or assumption of the Stock Option by the Company (if it is the surviving corporation) or by the surviving corporation or any direct or indirect parent of either, in a manner consistent with Section 7(a) above;

(ii) the substitution by the surviving corporation, or any direct or indirect parent thereof, of the Stock Option with a stock option having substantially the same terms as the Stock Option being replaced, in a manner consistent with Section 7(a) above;

(iii) the acceleration of the vesting and exercisability of the Stock Option, so that it is fully vested and exercisable immediately prior to or as of the

date of the Change of Control, and the expiration of the Stock Option to the extent not exercised (subject to Section 10 below) as of the date of the Change of Control or other later date thereafter designated by the Committee; or

(iv) the cancellation of all or any portion of the Stock Option in exchange for a cash payment, and/or such other property (if any) as is paid as consideration to holders of Shares in the Change of Control, having an aggregate Fair Market Value equal (in each case) to the excess, if any, of the Fair Market Value of the securities and other property subject to the Stock Option or portion thereof being cancelled over the aggregate exercise price for the Stock Option or portion thereof being cancelled (and, for the avoidance of doubt, if there is no such excess, such Option may be cancelled without any payment or consideration therefor).

(c) Except as expressly provided in the Plan or this Agreement, the Optionee shall not have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or this Agreement, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares or amount of other property subject to this Agreement.

(d) Notwithstanding anything to the contrary in this Agreement or elsewhere, no adjustment shall be made to the Stock Option that would cause it, or any portion of it, to be treated as “deferred compensation” for purposes of Section 409A of the Code.

8. General Assets. Nothing contained in the Plan or this Agreement, and no action taken pursuant to their provisions, shall be construed to create a trust of any kind, nor any fiduciary relationship between the Company or any Subsidiary or Affiliate, on the one hand, and the Participant, the Participant’s beneficiary or legal representative or any other person, on the other. To the extent that any person acquires a right to receive payments or other property from the Company under the Plan or this Agreement, such right shall be no greater than the rights of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company, and all amounts and property credited to the Account under this Agreement shall continue for all purposes to be part of the general assets of the Company.

9. Responsibility for Taxes. Except to the extent otherwise provided in certain circumstances that apply with respect to the exercise of the Stock Option in Section 3(b) above, the Optionee shall be solely responsible for all taxes imposed on the Optionee (including, without limitation, applicable federal, state, provincial, territorial, local or foreign income, social security, estate or excise taxes) that may be payable as a result of the Optionee’s participation in the Plan or as a result of the grant, vesting, or exercise of the Stock Option and/or the sale, disposition or transfer of any shares of Common Stock acquired upon the Optionee’s exercise of the Stock Option, excluding,

however, for avoidance of doubt, the employer’s portion of any such taxes. Subject to any election the Optionee may have made under Section 3(b) above, as a condition of the exercise of the Stock Option, prior to the delivery of a certificate or certificates representing any share of Common Stock and immediately following the exercise of any Stock Option, the Optionee must pay to the Company, any amount that the Company determines it is required to withhold from payments to the employee (other than, for avoidance of doubt, the employer’s portion of any such taxes) under any applicable and federal, state, provincial, territorial, local or foreign tax laws upon the exercise of the Stock Option and the transfer of such Shares subject to the Stock Option. Subject to any election the Optionee may have made under Section 3(b) above, the Parties hereby acknowledge that the Company and its Subsidiaries and Affiliates shall have the right and are authorized to offset from any compensation or other amounts owing to the Optionee the amount of any required tax withholding and payroll taxes in respect of a Stock Option, its exercise or any payment or transfer under this Agreement (other than, for avoidance of doubt, the employer’s portion of any such taxes) and to take such other action as may be necessary to satisfy all obligations for the payment of such taxes.

10. Government and Other Regulations.

(a) Shares shall not be issued pursuant to the Stock Option unless the issuance and delivery of such Shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Exchange Act, the Securities Act, the rules and regulations promulgated thereunder, state securities laws and regulations and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded. No delay in issuance shall result in the expiration of the exercisability of all, or any portion of, the Stock Option. Except otherwise provided in this Agreement, the Company shall not be obligated to file any registration statement under any applicable securities laws to permit the purchase or issuance of any Shares, and, accordingly, any certificates for Shares may have an appropriate legend or statement of applicable restrictions endorsed thereon. If the Company reasonably deems it necessary to ensure that the issuance of Shares pursuant to this Stock Option is not required to be registered under any applicable securities laws, the Optionee shall deliver to the Company an agreement or certificate containing such representations, warranties and covenants as the Company reasonably determines necessary or appropriate to satisfy such requirements.

(b) The exercise of the Stock Option shall only be effective at such time as counsel to the Company shall have determined that the issuance and delivery of Shares pursuant to such exercise is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which such Shares are traded. The Company may, in its reasonable discretion, defer the effectiveness of the exercise of the Stock Option or the issuance or transfer of Shares pending or to ensure compliance under federal or state securities laws or the rules or regulations of any exchange on which such Shares are then listed for trading. The Company shall inform the Optionee in writing of its decision to defer the effectiveness of the exercise of the Stock Option or the issuance or transfer of Shares. During the period that the effectiveness of the exercise of the Stock Option has been deferred, the Optionee may, by written notice,

withdraw such exercise and obtain the refund of any amount paid with respect thereto. No delay in exercise pursuant to this Section 10(b) shall result in the expiration of all, or any portion of, the Stock Option until at least 10 business days after exercise has been permitted.

(c) As a condition to any exercise of the Stock Option, upon reasonable request by the Company, the Optionee will be required to represent, warrant and covenant as follows:

(i) The Optionee is acquiring the Shares for his own account and not with a view to, or for sale in connection with, any distribution of the shares of Common Stock in violation of the Securities Act or any rule or regulation under the Securities Act or in violation of any applicable state securities law.

(ii) The Optionee has had such opportunity as he has deemed adequate to obtain from representatives of the Company such information as is necessary to permit him to evaluate the merits and risks of his investment in the Company.

(iii) The Optionee has sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in acquiring the Shares and to make an informed investment decision with respect to such investment.

(iv) The Optionee can afford the complete loss of the value of the Shares and is able to bear the economic risk of holding such Shares for an indefinite period.

(v) The Optionee understands that, until the effectiveness of an initial public offering of the Common Stock of the Company, (I) the Shares have not been registered under the Securities Act and constitute “restricted securities” within the meaning of Rule 144 under the Securities Act; (II) the Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under the Securities Act or an exemption from registration is then available; and (III) there is now no registration statement on file with the Securities and Exchange Commission with respect to the Shares and there is no commitment on the part of the Company to make any such filing.

(vi) In addition, upon any exercise of the Stock Option, and as a condition thereof, the Optionee will make or enter into such other written representations, warranties and agreements as the Company may reasonably request in order to comply with applicable securities laws or with this Agreement.

11. Tax Reporting. Upon the exercise of all or any portion of the Stock Option in accordance with Section 3 above, the Optionee shall recognize taxable income and the Company shall report such taxable income to the appropriate taxing authorities as it determines to be necessary and appropriate.

12. Clawback/Forfeiture. Notwithstanding anything to the contrary contained herein and without limiting any other rights and remedies of the Company, if the Optionee (i) materially violates the restrictive covenants in the Employment Agreement

relating to non-competition, non-solicitation or non-disclosure or (ii) engages in fraud or other willful misconduct that contributes materially to any significant financial restatement or material loss, the Committee may, at any time up to six months after learning of such conduct, cancel the Stock Option, including any vested portions thereof, or require the Optionee to forfeit or to repay to the Company the after-tax gain realized on any previously exercised portion of the Stock Option; provided, however, that (a) except in cases of willful misconduct, the Optionee shall be provided a fifteen (15) day cure period to cease and to cure the conduct described in clause (i) of this Section 12. To the extent once vested, the Stock Option (and any proceeds received in respect of the Stock Option) shall be wholly non-forfeitable except as expressly set forth in this Agreement or the Employment Agreement; provided that the foregoing shall not in any way limit any other rights that either party may have with respect to the other party.

13. Fair Market Value. Prior to the effectiveness of an initial public offering of the Common Stock of the Company, for purposes of this Agreement, “Fair Market Value”, as of any date, shall mean fair market value as of such date determined without discount for lack of liquidity, lack of control, minority status, contractual restrictions or the like, provided that, when used in respect of Shares, for so long as (i) the Shares are not listed on a national securities exchange, (ii) the Shares are not quoted in an inter-dealer quotation system on a last sale basis and (iii) Oaktree Capital Management, L.P. or any of its affiliates (collectively, “Oaktree”) are holding Shares, then, other than in the context of a Change of Control, the Fair Market Value of such Shares shall be as determined using the same methodology that was used for the then-most-recent determination of the value of Shares reported by Oaktree to its investors; and provided further that for securities that are listed on a national securities exchange, “Fair Market Value”, as of any date, shall mean the closing sale price reported as having occurred on the primary exchange on which the security is listed and traded on such date, or, if there is no such sale on that date, then on the last preceding date on which a sale was reported; and, for securities that are not listed on any national securities exchange but are quoted in an inter-dealer quotation system on a last sale basis, “Fair Market Value”, as of any date, shall mean the average between the closing bid price and ask price reported on such date, or, if there is no such sale on that date, then on the last preceding date on which a sale was reported. For the avoidance of doubt, the foregoing valuation approach shall not be interpreted to provide the Optionee with a compensatory benefit but rather is intended by the parties to promote consistency in making determinations of the fair market value of Shares. Following the effectiveness of an initial public offering of the Common Stock of the Company, for purposes of this Agreement, “Fair Market Value” shall have the meaning ascribed to it in the Plan.

14. Notices. All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party or by facsimile, overnight courier or registered or certified mail, return receipt requested, postage prepaid, addressed as follows:


If to the Optionee:	To the address specified in Exhibit A hereto or to any updated address filed by the Executive with the Company.



With a copy to:
	Morrison Cohen LLP
	909 Third Avenue, 27th Floor
	New York, NY 10022
	Attn: Robert M. Sedgwick, Esq.

If to the Company:	Aleris Corporation
	25825 Science Park Drive, Suite 400
	Beachwood, Ohio 44122
	Attention: Christopher R. Clegg

or to such other address or facsimile number as either party shall have furnished to the other in writing in accordance with this Section 14. Notice and communications shall be effective when actually received by the addressee.

15. Stockholders Agreement. Prior to the effectiveness of an initial public offering of the Common Stock of the Company, neither the adoption of the Plan nor the grant of the Stock Option pursuant to this Agreement shall restrict in any way the adoption of any amendment, supplement or other modification of the Stockholders Agreement, if any, in accordance with the terms of such agreement.

16. Governing Law. This Agreement shall be governed by, and construed in accordance with, its express terms, and otherwise in accordance with the laws of the State of Delaware, as such laws are applied to contracts entered into and performed in such state and without regard to the principles of conflicts of laws thereof or principles of conflicts of laws of any other jurisdiction which could cause the application of the laws of any jurisdiction other than such state.

17. Stock Option Subject to the Plan. By entering into this Agreement, the Optionee agrees and acknowledges that (i) the Optionee has received and read a copy of the Plan as in effect on the date hereof, and (ii) the Stock Option is subject to the Plan, and (iii) Shares acquired upon the exercise of the Stock Option are subject to the terms of the Stockholders Agreement. In the event of a conflict between any term or provision contained in this Agreement and any term or provision of the Plan and the Stockholders Agreement, the terms and provisions of the Stockholders Agreement and then in descending order this Agreement and the Plan shall prevail. No amendment to the Plan that is inconsistent with the express terms of this Agreement and that adversely affects any of the Optionee’s rights under this Agreement shall be effective as to this Agreement without the Optionee’s prior written consent; provided, however, the Committee may amend the Plan and this Agreement to the extent necessary to comply with applicable law.

the event of a conflict between any term or provision contained in this Agreement and any term or provision of the Plan, the terms and provisions of this Agreement shall prevail. No amendment to the Plan that is inconsistent with the express terms of this Agreement and that adversely affects any of the Optionee’s rights under this Agreement shall be effective as to this Agreement without the Optionee’s prior written consent; provided, however, the Committee may amend the Plan and this Agreement to the extent necessary to comply with applicable law.”

18. Certain Specific Acknowledgments; Dispute Resolution. The Company represents and acknowledges that it has secured the approval of any person or body whose approval is necessary as of the Grant Date for it to enter into this Agreement and perform its obligations under it, and that upon execution and delivery of the Agreement by the parties, this Agreement shall be a valid and binding obligation of the Company, enforceable in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditor’s rights generally. Any dispute arising under or relating to this Agreement shall be resolved in accordance with Section 11(i) of the Employment Agreement.

19. Effect of Agreement; Entire Agreement. Except as otherwise provided hereunder, this Agreement shall be binding upon and shall inure to the benefit of any successor or successors of the Company and to any transferee or successor of the Optionee pursuant to Section 5 of this Agreement. This Agreement embodies the complete agreement and understanding among the parties hereto and supersedes and preempts any prior understandings, agreements or representations by or among the parties hereto, written or oral, which may have related to the subject matter hereof in any way.

20. Titles and Headings. The titles and headings of the sections in this Agreement are for convenience of reference only, and, in the event of any conflict, the text of this Agreement, rather than such titles or headings, shall control.

21. Amendment. This Agreement may not be modified, amended or waived to the extent it would impair the rights of the Optionee, except by an instrument in writing that specifically identifies the provision of this Agreement being modified, amended or waived and that is signed by both parties hereto. The waiver by either party of compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement or of any subsequent breach of any provision of this Agreement.

22. Code Section 409A. To the extent applicable, notwithstanding anything herein to the contrary, this Agreement and the Stock Option issued hereunder are intended not to be governed by or to be in compliance with Section 409A of the Code. To the extent applicable, this Agreement and the Stock Option shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretative guidance issued thereunder, including, without limitation, any such regulations or other guidance that may be issued after the Grant Date.

23. Relationship to Other Benefits. No payment under this Agreement shall be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company or any Subsidiary or Affiliate except as otherwise specifically provided in such other plan.

24. No Retention Rights; No Right to Incentive Award. Nothing in the Plan or this Agreement shall confer upon the Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Subsidiary or Affiliate employing or retaining the Optionee) or of the Optionee, which rights are hereby expressly reserved by each, to terminate his Service at any time and for any reason, with or without Cause. The Committee’s granting of the Stock Option or other Award to the Optionee shall neither require the Committee to grant the Stock Option or other Award to the Optionee or any other Participant in the Plan or other person at any time nor preclude the Committee from making subsequent grants to the Optionee or any other Participant in the Plan or other person.

25. Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Signatures delivered by facsimile (including by “pdf”) shall be effective for all purposes.

26. Optionee Acknowledgement. Section 2(c)(v) of the Employment Agreement provides that the Optionee shall be granted stock options in January 2014. At the sole request of the Optionee, the number of shares of Common Stock subject to this Stock Option is lower than the number of shares originally contemplated by Section 2(c)(v) of the Employment Agreement and authorized by the Committee. The Optionee accepts this Stock Option in full and complete satisfaction of the Company's obligations under said Section 2(c)(v).

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, as of the date first above written, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and the Optionee has hereunto set the Optionee’s hand.



ALERIS CORPORATION



By:	/s/ Christopher R. Clegg
	Christopher R. Clegg
	Executive Vice President, General Counsel & Secretary

	/s/ Steven J. Demetriou
	Optionee: Steven J. Demetriou
	Date:

Exhibit A to
2014 Stock Option Agreement
Aleris Corporation



Date of Option Grant:	January 15, 2014

Name and Address of Optionee:
Steven J. Demetriou
At the last known address in the Company’s personnel records



	Number of Shares	Exercise Price

Stock Option	333,333	$27.20

EX-10.4 5 exhibit104formof2014execut.htm FORM OF 2014 EXECUTIVE STOCK OPTION AWARD AGREEMENT Exhibit104Formof2014ExecutiveStockOptionAwardAgreement

Exhibit 10.4

ALERIS CORPORATION

2010 EQUITY INCENTIVE PLAN

FORM OF EXECUTIVE STOCK OPTION AGREEMENT

W I T N E S S E T H:

In consideration of the mutual promises and covenants made herein and of the Optionee having ______________ entered into _________________________ (the “Employment Agreement”) with a subsidiary of the Company effective as of ____________, and of the mutual benefits to be derived herefrom, the parties hereto agree as follows:

1.Grant of Stock Option. Subject to the provisions of this Agreement and to the provisions of the Aleris Holding Company 2010 Equity Incentive Plan, as amended, supplemented or otherwise modified from time to time (the “Plan”), which is hereby incorporated by reference herein, to the extent set forth in Section 17 below, the Company grants to the Optionee as of the Grant Date the right and option (the “Stock Option”) to purchase shares of common stock of the Company, par value $0.01 per share (“Common Stock”) in the amount set forth on Exhibit A. The Stock Option is granted at an exercise price per share as set forth on Exhibit A Unless earlier terminated pursuant to the terms of this Agreement, the Stock Option shall (except to the extent otherwise provided in Section 10 below) expire on the tenth anniversary of the Grant Date (the “Option Period”). Subject to Section 17 below, this Agreement shall be construed in accordance with the provisions of the Plan. The Stock Option is not intended to be treated as an “incentive stock option,” as such term is defined in Section 422 of the Code. If requested by the Company, as a condition precedent to the Optionee’s exercise of any portion of the Stock Option pursuant to this Agreement prior to the effectiveness of an initial public offering of the Common Stock of the Company, the Optionee shall execute the Stockholders Agreement, if any (unless the Optionee has already done so), in which case the Optionee shall have all of the rights and obligations of a Stockholder (as such term is defined in the Stockholders Agreement) described therein in respect of any shares of Common Stock that are acquired by the Optionee pursuant to exercise of the Stock Option. For periods prior to the effectiveness of an initial public offering of the Common Stock of the Company, any shares of Common Stock received by the Optionee upon any exercise of the Stock Option shall be subject to all terms of the Stockholders Agreement (without regard to whether or not the Optionee is a party to the Stockholders Agreement).

2.Exercisability of the Stock Option.

(a)Time-Based Vesting. Subject to Section 5 of this Agreement, the Stock Option shall vest and become exercisable as follows: ___________ _______________________________.

(b)Change of Control. Notwithstanding Section 2(a) and subject to Section 4 of this Agreement, upon a Change of Control, the Stock Option shall vest and become exercisable to the extent necessary to make the aggregate percentage of the Stock Option that has become vested and exercisable as of the date of such Change of Control at least equal to the percentage by which the Initial Investors have reduced their combined Common Stock interest in the Company (measured by the number of shares of the Company’s Common Stock acquired on the Effective Date and still held immediately following the Change of Control as compared to the number of shares of the Company’s Common Stock held as of the Effective Date, in each case as adjusted for stock splits, stock dividends, and the like); provided, however, that if the Initial Investors’ combined Common Stock interest in the Company is reduced by 75% or more (as measured above), then the Stock Option shall vest, and be exercisable, in full. By way of example and for illustration purposes only, if there is a Change of Control following the second anniversary of the Effective Date when 33 1/3% of the Stock Option is vested and exercisable and the Initial Investors reduce their combined Common Stock interest in the Company by 70%, then an additional 20% of the Stock Option shall vest and become exercisable upon the Change of Control, and, subject to Section 11 of the Plan and Section 7 of this Agreement, the remaining 30% of the Stock Option shall continue to vest in accordance with Section 2(a) hereof. For purposes of this Agreement, the terms “Initial Investors” and “Initial Investors and their affiliates” as used in the Plan and in this Agreement, including, without limitation, as applied to the “Change of Control” definition under the Plan, is hereby modified so that such terms are understood to include only Oaktree Capital Management, L.P. and its Affiliates and to exclude Apollo Management VII, L.P. and its Affiliates.

3.Method of Exercise of the Stock Option.

(a)All or any portion of the Stock Option that has become vested and exercisable may be exercised by delivery to the Company of a written notice stating the number of whole Shares to be purchased pursuant to this Agreement and, except as provided in Section 3(b) below, accompanied by cash or a personal check or bank draft in the amount equal to the aggregate exercise price for such Shares. The Stock Option may not be exercised in respect of any fractional Share unless specifically consented to by the Committee in writing. The exercise of less than the entire vested and exercisable portion of the Stock Option shall not cause the expiration, termination, or cancellation of the remaining Stock Option (whether the remaining Stock Option is vested or unvested, exercisable or not exercisable). All shares of Common Stock of the Company delivered upon any exercise of the Option shall, when delivered, (i) be duly authorized, validly issued, fully paid and nonassessable, (ii) be registered for sale, and for resale, under U.S., State and federal securities laws to the extent that other securities of the same class are then so registered or qualified and (iii) be listed, or otherwise qualified, for trading on any

securities exchange or securities market on which securities of the same class are then so listed or qualified.

(b)The Optionee shall be able to satisfy all or any portion of (i) the exercise price, and/or (ii) applicable withholding taxes due in connection with such exercise, by (A) at his election reducing the number of Shares otherwise deliverable pursuant to such exercise of the Stock Option by a number of Shares (including, where applicable, fractional shares) having a Fair Market Value on the date of exercise equal to the exercise price and/or applicable withholding taxes (provided that, unless otherwise specifically consented to by the Committee, only the number of whole Shares deliverable pursuant to the requested exercise (after giving effect to such reduction) shall be delivered to the Optionee, with any remaining fractional Share deemed unexercised and, only to the extent permitted by the terms of this Agreement, to remain outstanding and exercisable) or (B) at the sole discretion of the Committee, utilizing some other form of net physical settlement or method of cashless exercise as determined by the Committee. The Committee may, in its sole discretion, also permit payment of all or any portion of the exercise price and/or applicable withholding taxes due in connection with such exercise by surrender by the Optionee of a number of Shares that are already owned by the Optionee having a Fair Market Value equal to such portion of the exercise price and/or applicable withholding taxes. Such Shares shall be surrendered to the Company in good form for transfer and shall be valued at their Fair Market Value on the date that the Stock Option is exercised.

4.Termination of Employment.

(a)Termination for Cause or without Good Reason. If the Optionee’s employment under the Employment Agreement is terminated by his employer at any time for Cause, the Stock Option (including any exercisable portion thereof to the extent not yet exercised) shall be cancelled and forfeited in its entirety as of the Date of Termination (as defined in the Employment Agreement) without consideration therefor and expire on such date; provided that, for avoidance of doubt, the Stock Option (to the extent previously exercised), and any distribution previously made in respect of the Stock Option upon exercise or cancellation, shall be subject to forfeiture only as expressly provided elsewhere in this Agreement or in the Employment Agreement; and, provided, further, that the foregoing shall not in any way limit any other rights that either party may have with respect to the other party. If the Optionee’s employment under the Employment Agreement is terminated by the Optionee without Good Reason (as defined in the Employment Agreement), (i) the portion of the Stock Option that is unvested on the Date of Termination shall be cancelled and forfeited without consideration therefor, and (ii) subject to Section 7 of this Agreement, the portion of the Stock Option that is vested and exercisable on the date of such termination may be exercised at any time through the earlier of (a) the 90^th day following the Date of Termination and (b) the last day of the Option Period, and after which such portion shall (except to the extent otherwise provided in Section 10 below) expire.

(b)Termination without Cause or for Good Reason. If the Optionee’s employment under the Employment Agreement is terminated by his employer not for Cause (including, for avoidance of doubt, due to non-extension of the Employment Period by his employer under Section 3 of the Employment Agreement) or by the Optionee with Good Reason, the Stock Option shall vest and become exercisable on the Date of Termination with respect to 50% of the Shares covered respectively thereby that have not previously vested and become exercisable as of such date. Subject to Section 7 of this Agreement, the portion of the Stock Option that is or becomes exercisable on the Date of Termination may be exercised at any time through the earlier of (i) the six (6) month anniversary of the Date of Termination and (ii) the last day of the Option Period, and after which such portion shall (except to the extent otherwise provided in Section 10 below) expire. Notwithstanding the foregoing, if the Optionee’s employment under the Employment Agreement is terminated by his employer not for Cause or by the Optionee with Good Reason, in each case, in anticipation of or within twelve (12) months following a Change of Control, the entire Stock Option shall become vested and exercisable immediately and, subject to Section 7 of this Agreement, may be exercised at any time through the earlier of (a) the twelve (12) month anniversary of the Date of Termination, and (b) the last day of the Option Period, after which such portion shall (except to the extent otherwise provided in Section 10 below) expire. For purposes of this Section 4(b), a termination of employment will be deemed to be “in anticipation of” a Change of Control if such termination (or the Good Reason event giving rise to such termination) is done by the Company or any Subsidiary or Affiliate with the principal purpose of avoiding or evading its compensation obligations that would arise upon a termination following a Change of Control.

(c)Termination due to death or Disability. If the Optionee’s employment is terminated as a result of the Optionee’s death or Disability, (i) the portion of the Stock Option that is unvested at the time of such termination shall be cancelled and forfeited without consideration therefor, and (ii) the portion of the Stock Option that is vested and exercisable as of the Date of Termination may be exercised at any time through the earlier of (a) the one-year anniversary of the Date of Termination and (b) the last day of the Option Period, subject to Section 7 of this Agreement, after which such portion shall (except to the extent otherwise provided in Section 10 below) expire.

(d)Nothing in this Agreement or the Plan shall confer upon the Optionee any right to continue in the employ or service of the Company or any of its Subsidiaries or Affiliates or interfere in any way with the right of the Company or any of its Subsidiaries or Affiliates to terminate the Optionee’s employment or service at any time and for any reason.

5.Nontransferability of the Stock Option. The Stock Option may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner by the Optionee (other than, in the event of the Optionee’s death, or by will or the applicable laws of descent and distribution) and any purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance in violation of this Section 5 shall be void and unenforceable against the Company or any Subsidiary or Affiliate. The Stock Option may be exercised during the lifetime of the Optionee, only by such Optionee, and if exercisable after the

6.Rights as a Stockholder. Neither the Optionee nor any transferee of the Stock Option shall have any rights as a stockholder, including, without limitation, the right to receive dividends, with respect to any Shares covered by the Stock Option until the date when his or her purchase is entered upon the records of the Company or the duly authorized transfer agent of the Company.

7.Adjustment in the Event of Change in Stock; Change of Control.

(a)In the event of any merger, consolidation, reorganization, recapitalization, spin-off, split-up, combination, modification of securities, exchange of securities, liquidation, dissolution, share split, reverse share split, share dividend, other distribution of securities or other property in respect of shares or other securities (other than ordinary recurring cash dividends), or other change in corporate structure or capitalization affecting the rights or value of the securities and property then subject to the Stock Option, the Committee shall promptly make equitable and appropriate adjustment(s) in the number and/or kind of the securities and/or property that are subject to the Stock Option, and/or the exercise price, and/or other terms or conditions of the Stock Option, so as to avoid dilution or enlargement of the benefits or potential benefits represented by the Stock Option. Any determination made by the Committee regarding any adjustment will, to the extent reasonable and made in good faith, be final and conclusive.

(b)Effective upon a Change of Control, unless otherwise specifically prohibited under applicable laws or by the rules and regulations of any governmental agency or self-regulatory body and without in any way limiting the extent of Section 7(a), the Committee is authorized (but not obligated) to make any or all of the following adjustments (or any combination thereof) to the Stock Option:

(i)the continuation or assumption of the Stock Option by the Company (if it is the surviving corporation) or by the surviving corporation or any direct or indirect parent of either, in a manner consistent with Section 7(a) above;

(ii)the substitution by the surviving corporation, or any direct or indirect parent thereof, of the Stock Option with a stock option having substantially the same terms as the Stock Option being replaced, in a manner consistent with Section 7(a) above;

(iii)the acceleration of the vesting and exercisability of the Stock Option, so that it is fully vested and exercisable immediately prior to or as of the

(iv)the cancellation of all or any portion of the Stock Option in exchange for a cash payment, and/or such other property (if any) as is paid as consideration to holders of Shares in the Change of Control, having an aggregate Fair Market Value equal (in each case) to the excess, if any, of the Fair Market Value of the securities and other property subject to the Stock Option or portion thereof being cancelled over the aggregate exercise price for the Stock Option or portion thereof being cancelled (and, for the avoidance of doubt, if there is no such excess, such Option may be cancelled without any payment or consideration therefor).

(c)Except as expressly provided in the Plan or this Agreement, the Optionee shall not have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or this Agreement, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares or amount of other property subject to this Agreement.

(d)Notwithstanding anything to the contrary in this Agreement or elsewhere, no adjustment shall be made to the Stock Option that would cause it, or any portion of it, to be treated as “deferred compensation” for purposes of Section 409A of the Code.

8.General Assets. Nothing contained in the Plan or this Agreement, and no action taken pursuant to their provisions, shall be construed to create a trust of any kind, nor any fiduciary relationship between the Company or any Subsidiary or Affiliate, on the one hand, and the Participant, the Participant’s beneficiary or legal representative or any other person, on the other. To the extent that any person acquires a right to receive payments or other property from the Company under the Plan or this Agreement, such right shall be no greater than the rights of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company, and all amounts and property credited to the Account under this Agreement shall continue for all purposes to be part of the general assets of the Company.

9.Responsibility for Taxes. Except to the extent otherwise provided in certain circumstances that apply with respect to the exercise of the Stock Option in Section 3(b) above, the Optionee shall be solely responsible for all taxes imposed on the Optionee (including, without limitation, applicable federal, state, provincial, territorial, local or foreign income, social security, estate or excise taxes) that may be payable as a result of the Optionee’s participation in the Plan or as a result of the grant, vesting, or exercise of the Stock Option and/or the sale, disposition or transfer of any shares of Common Stock acquired upon the Optionee’s exercise of the Stock Option, excluding,

10.Government and Other Regulations.

(a)Shares shall not be issued pursuant to the Stock Option unless the issuance and delivery of such Shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Exchange Act, the Securities Act, the rules and regulations promulgated thereunder, state securities laws and regulations and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded. No delay in issuance shall result in the expiration of the exercisability of all, or any portion of, the Stock Option. Except otherwise provided in this Agreement, the Company shall not be obligated to file any registration statement under any applicable securities laws to permit the purchase or issuance of any Shares, and, accordingly, any certificates for Shares may have an appropriate legend or statement of applicable restrictions endorsed thereon. If the Company reasonably deems it necessary to ensure that the issuance of Shares pursuant to this Stock Option is not required to be registered under any applicable securities laws, the Optionee shall deliver to the Company an agreement or certificate containing such representations, warranties and covenants as the Company reasonably determines necessary or appropriate to satisfy such requirements.

(b)The exercise of the Stock Option shall only be effective at such time as counsel to the Company shall have determined that the issuance and delivery of Shares pursuant to such exercise is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which such Shares are traded. The Company may, in its reasonable discretion, defer the effectiveness of the exercise of the Stock Option or the issuance or transfer of Shares pending or to ensure compliance under federal or state securities laws or the rules or regulations of any exchange on which such Shares are then listed for trading. The Company shall inform the Optionee in writing of its decision to defer the effectiveness of the exercise of the Stock Option or the issuance or transfer of Shares. During the period that the effectiveness of the exercise of the Stock Option has been deferred, the Optionee may, by written notice,

(c)As a condition to any exercise of the Stock Option, upon reasonable request by the Company, the Optionee will be required to represent, warrant and covenant as follows:

(i)The Optionee is acquiring the Shares for his own account and not with a view to, or for sale in connection with, any distribution of the shares of Common Stock in violation of the Securities Act or any rule or regulation under the Securities Act or in violation of any applicable state securities law.

(ii)The Optionee has had such opportunity as he has deemed adequate to obtain from representatives of the Company such information as is necessary to permit him to evaluate the merits and risks of his investment in the Company.

(iii)The Optionee has sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in acquiring the Shares and to make an informed investment decision with respect to such investment.

(iv)The Optionee can afford the complete loss of the value of the Shares and is able to bear the economic risk of holding such Shares for an indefinite period.

(v)The Optionee understands that, until the effectiveness of an initial public offering of the Common Stock of the Company, (I) the Shares have not been registered under the Securities Act and constitute “restricted securities” within the meaning of Rule 144 under the Securities Act; (II) the Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under the Securities Act or an exemption from registration is then available; and (III) there is now no registration statement on file with the Securities and Exchange Commission with respect to the Shares and there is no commitment on the part of the Company to make any such filing.

(vi)In addition, upon any exercise of the Stock Option, and as a condition thereof, the Optionee will make or enter into such other written representations, warranties and agreements as the Company may reasonably request in order to comply with applicable securities laws or with this Agreement.

11.Tax Reporting. Upon the exercise of all or any portion of the Stock Option in accordance with Section 3 above, the Optionee shall recognize taxable income and the Company shall report such taxable income to the appropriate taxing authorities as it determines to be necessary and appropriate.

12.Clawback/Forfeiture. Notwithstanding anything to the contrary contained herein and without limiting any other rights and remedies of the Company, if the Optionee (i) materially violates the restrictive covenants in the Employment Agreement

13.Fair Market Value. Prior to the effectiveness of an initial public offering of the Common Stock of the Company, for purposes of this Agreement, “Fair Market Value”, as of any date, shall mean fair market value as of such date determined without discount for lack of liquidity, lack of control, minority status, contractual restrictions or the like, provided that, when used in respect of Shares, for so long as (i) the Shares are not listed on a national securities exchange, (ii) the Shares are not quoted in an inter-dealer quotation system on a last sale basis and (iii) Oaktree Capital Management, L.P. or any of its affiliates (collectively, “Oaktree”) are holding Shares, then, other than in the context of a Change of Control, the Fair Market Value of such Shares shall be as determined using the same methodology that was used for the then-most-recent determination of the value of Shares reported by Oaktree to its investors; and provided further that for securities that are listed on a national securities exchange, “Fair Market Value”, as of any date, shall mean the closing sale price reported as having occurred on the primary exchange on which the security is listed and traded on such date, or, if there is no such sale on that date, then on the last preceding date on which a sale was reported; and, for securities that are not listed on any national securities exchange but are quoted in an inter-dealer quotation system on a last sale basis, “Fair Market Value”, as of any date, shall mean the average between the closing bid price and ask price reported on such date, or, if there is no such sale on that date, then on the last preceding date on which a sale was reported. For the avoidance of doubt, the foregoing valuation approach shall not be interpreted to provide the Optionee with a compensatory benefit but rather is intended by the parties to promote consistency in making determinations of the fair market value of Shares. Following the effectiveness of an initial public offering of the Common Stock of the Company, for purposes of this Agreement, “Fair Market Value” shall have the meaning ascribed to it in the Plan.

14.Notices. All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party or by facsimile, overnight courier or registered or certified mail, return receipt requested, postage prepaid, addressed as follows:



If to the Optionee:	To the address specified in Exhibit A hereto or to any
	updated address filed by the Executive with the Company.



If to the Company:	Aleris Corporation
	25825 Science Park Drive, Suite 400
	Beachwood, Ohio 44122
	Attention: Corporate Secretary

15.Stockholders Agreement. Prior to the effectiveness of an initial public offering of the Common Stock of the Company, neither the adoption of the Plan nor the grant of the Stock Option pursuant to this Agreement shall restrict in any way the adoption of any amendment, supplement or other modification of the Stockholders Agreement, if any, in accordance with the terms of such agreement.

16.Governing Law. This Agreement shall be governed by, and construed in accordance with, its express terms, and otherwise in accordance with the laws of the State of Delaware, as such laws are applied to contracts entered into and performed in such state and without regard to the principles of conflicts of laws thereof or principles of conflicts of laws of any other jurisdiction which could cause the application of the laws of any jurisdiction other than such state.

17.Stock Option Subject to the Plan. By entering into this Agreement, the Optionee agrees and acknowledges that (i) the Optionee has received and read a copy of the Plan as in effect on the date hereof, and (ii) the Stock Option is subject to the Plan, and (iii) Shares acquired upon the exercise of the Stock Option are subject to the terms of the Stockholders Agreement. In the event of a conflict between any term or provision contained in this Agreement and any term or provision of the Plan and the Stockholders Agreement, the terms and provisions of the Stockholders Agreement and then in descending order this Agreement and the Plan shall prevail. No amendment to the Plan that is inconsistent with the express terms of this Agreement and that adversely affects any of the Optionee’s rights under this Agreement shall be effective as to this Agreement without the Optionee’s prior written consent; provided, however, the Committee may amend the Plan and this Agreement to the extent necessary to comply with applicable law.

Notwithstanding the foregoing, following the effectiveness of an initial public offering of the Common Stock of the Company, this Section 17 shall be revised to read as follows: “Stock Option Subject to the Plan. By entering into this Agreement, the Optionee agrees and acknowledges that (i) the Optionee has received and read a copy of the Plan as in effect on the date hereof, and (ii) the Stock Option is subject to the Plan. In the event of a conflict between any term or provision contained in this Agreement and any term or provision of the Plan, the terms and provisions of this Agreement shall prevail. No amendment to the Plan that is inconsistent with the express terms of this Agreement and that adversely affects any of the Optionee’s rights under this Agreement shall be effective as to this Agreement without the Optionee’s prior written consent; provided, however, the

Committee may amend the Plan and this Agreement to the extent necessary to comply with applicable law.”

18.Certain Specific Acknowledgments; Dispute Resolution. The Company represents and acknowledges that it has secured the approval of any person or body whose approval is necessary as of the Grant Date for it to enter into this Agreement and perform its obligations under it, and that upon execution and delivery of the Agreement by the parties, this Agreement shall be a valid and binding obligation of the Company, enforceable in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditor’s rights generally. Any dispute arising under or relating to this Agreement shall be resolved in accordance with Section 11(i) of the Employment Agreement.

19.Effect of Agreement; Entire Agreement. Except as otherwise provided hereunder, this Agreement shall be binding upon and shall inure to the benefit of any successor or successors of the Company and to any transferee or successor of the Optionee pursuant to Section 5 of this Agreement. This Agreement embodies the complete agreement and understanding among the parties hereto and supersedes and preempts any prior understandings, agreements or representations by or among the parties hereto, written or oral, which may have related to the subject matter hereof in any way.

20.Titles and Headings. The titles and headings of the sections in this Agreement are for convenience of reference only, and, in the event of any conflict, the text of this Agreement, rather than such titles or headings, shall control.

21.Amendment. This Agreement may not be modified, amended or waived to the extent it would impair the rights of the Optionee, except by an instrument in writing that specifically identifies the provision of this Agreement being modified, amended or waived and that is signed by both parties hereto. The waiver by either party of compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement or of any subsequent breach of any provision of this Agreement.

22.Code Section 409A. To the extent applicable, notwithstanding anything herein to the contrary, this Agreement and the Stock Option issued hereunder are intended not to be governed by or to be in compliance with Section 409A of the Code. To the extent applicable, this Agreement and the Stock Option shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretative guidance issued thereunder, including, without limitation, any such regulations or other guidance that may be issued after the Grant Date.

23.Relationship to Other Benefits. No payment under this Agreement shall be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company or any Subsidiary or Affiliate except as otherwise specifically provided in such other plan.

24.No Retention Rights; No Right to Incentive Award. Nothing in the Plan or this Agreement shall confer upon the Optionee any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Subsidiary or Affiliate employing or retaining the Optionee) or of the Optionee, which rights are hereby expressly reserved by each, to terminate his Service at any time and for any reason, with or without Cause. The Committee’s granting of the Stock Option or other Award to the Optionee shall neither require the Committee to grant the Stock Option or other Award to the Optionee or any other Participant in the Plan or other person at any time nor preclude the Committee from making subsequent grants to the Optionee or any other Participant in the Plan or other person.

25.Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Signatures delivered by facsimile (including by “pdf”) shall be effective for all purposes.

[Remainder of Page Intentionally Left Blank]



ALERIS CORPORATION


By:



	Optionee:
	Date:

[Signature Page To Executive Stock Option Agreement]

Exhibit A to

Form of Executive Stock Option Agreement

Aleris Corporation



Date of Option Grant:



Name and Address of Participant:
		At the last known address in the
		Company’s personnel records



	Number of Shares	Exercise Price ($)

_________ Stock Option	____________	_____________

A-1

EX-10.5 6 exhibit105formof2014execut.htm FORM OF 2014 EXECUTIVE RSU AWARD AGREEMENT Exhibit105Formof2014ExecutiveRSUawardagreement

Exhibit 10.5

ALERIS CORPORATION

2010 EQUITY INCENTIVE PLAN

FORM OF EXECUTIVE RESTRICTED STOCK UNIT AGREEMENT

THIS RESTRICTED STOCK UNIT AGREEMENT (the “Agreement”) is made, effective as of the date set forth on Exhibit A hereto (the “Grant Date”), between ALERIS CORPORATION, a Delaware corporation f/k/a Aleris Holding Company (together with its successors and assigns) (the “Company”), and the person named on Exhibit A hereto (the “Participant”). Capitalized terms used and not otherwise defined herein shall have the respective meanings ascribed to them in the Plan (as defined below).

W I T N E S S E T H:

In consideration of the mutual promises and covenants made herein, and of the Participant _______________ having ______ entered into ______________________________ (the “Employment Agreement”) with a subsidiary of the Company effective as of _________, and of the mutual benefits to be derived herefrom, the parties hereto agree as follows:

1.Grant of Restricted Stock Units. Subject to the provisions of this Agreement and to the provisions of the Aleris Holding Company 2010 Equity Incentive Plan, as amended, supplemented or otherwise modified from time to time (the “Plan”), which is hereby incorporated by reference herein, to the extent set forth in Section 15 below, the Company grants to the Participant as of the Grant Date the number of Restricted Stock Units as set forth on Exhibit A hereto. Such Restricted Stock Units shall be credited to a separate account maintained for the Participant on the books of the Company (the “Account”). As of the Grant Date, each Restricted Stock Unit credited to the Account shall correspond to one share of Common Stock. Thereafter, each Restricted Stock Unit shall correspond to such original share of Common Stock, plus any securities or other property received in respect of such share (or such securities and property) by the holders thereof (other than Dividend Equivalents paid under Section 5 below). The Restricted Stock Units shall vest and settle as set forth in Sections 2 and 3 below, and shall be subject to adjustment as set forth in Section 6 below. Subject to Section 15 below, this Agreement shall be construed in accordance with the provisions of the Plan. If requested by the Company, as a condition precedent to the settlement of the Restricted Stock Units pursuant to this Agreement prior to the effectiveness of an initial public offering of the Common Stock of the Company, the Participant shall execute the Stockholders Agreement, if any, (unless the Participant has already done so) in which case the Participant shall have all of the rights and obligations of a Stockholder (as such term is defined in the Stockholders Agreement) described therein in respect of any shares of Common Stock that are acquired by the Participant pursuant to the settlement of the Restricted Stock Units. For periods prior to the effectiveness of an initial public offering of the Common Stock of the Company, any shares of Common Stock received by the Participant upon settlement of the Restricted Stock Units shall be subject to all terms of the Stockholders Agreement (without regard to whether or not the Participant is a party to the Stockholders Agreement).

2. Terms and Conditions.

(a) Time-Based Vesting. Subject to Section 3 of this Agreement, the Restricted Stock Units shall vest as follows: ________________________________________

(b) Change of Control. Notwithstanding Section 2(a) and subject to Section 3 of this Agreement, the Restricted Stock Units shall vest immediately upon a Change of Control with respect to the smallest number of Restricted Stock Units necessary to make the percentage representing the total vested portion of the Restricted Stock Units granted under this Agreement (including after giving effect to this sentence) at least equal to the percentage by which the Initial Investors have reduced their combined Common Stock interest in the Company (measured by the number of shares of the Company’s Common Stock acquired on the Grant Date and still held immediately following the Change of Control as compared to the number of shares of the Company’s Common Stock held as of the Grant Date, in each case as adjusted for stock splits, stock dividends, and the like); provided, however, that, if the Initial Investors’ combined Common Stock interest in the Company is reduced by 75% or more (as measured above), then the Restricted Stock Units shall vest in full. By way of example and for illustration purposes only, if there is a Change of Control following the second anniversary of the Grant Date when 66 ²/₃% of the Restricted Stock Units are vested and the Initial Investors reduce their combined Common Stock interest in the Company by 70%, then an additional 3 ¹/₃% of the Restricted Stock Units shall vest upon the Change of Control, and, subject to Section 11 of the Plan and Section 6 of this Agreement, the remaining 30% of the Restricted Stock Units shall continue to vest in accordance with Section 2(a) hereof. For purposes of this Agreement, the terms “Initial Investors” and “Initial Investors and their affiliates” as used in the Plan and in this Agreement, including, without limitation, as applied to the “Change of Control” definition under the Plan, is hereby modified so that such terms are understood to include only Oaktree Capital Management, L.P. and its Affiliates and to exclude Apollo Management VII, L.P. and its Affiliates.

(c) Settlement. Within ten (10) business days following the vesting of any Restricted Stock Units, subject to Section 6 of this Agreement, such Restricted Stock Units shall be settled (and, upon such settlement, shall cease to be credited to the Account) by the Company: (i) unless the Participant timely provides the cash required for all withholding taxes, paying all withholding taxes due in connection with such vesting and settlement and deducting from the portion of the Account that corresponds to such Restricted Stock Units a sufficient number of Restricted Stock Units (including fractional Restricted Stock Units as necessary) such that the Fair Market Value of such deducted Restricted Stock Units equals the withholding taxes due in connection with such vesting and settlement; (ii) issuing to the Participant all securities and other property credited to such portion of the Account after the deduction specified in clause (i) (such securities, to the extent that they consist of Shares, the “RSU Shares”); (iii) accumulating any fractional Shares in the Account until the first subsequent vesting date on which a whole Share is able to be settled pursuant to this Section 2(c); provided, that, if any fractional Share is not settled within two and one-half (2 ½) months following the calendar year in which they vested, such fractional share shall be forfeited; and, (iv) with respect to the RSU Shares so issued, entering the Participant’s name as a stockholder of record on the books of the Company. All securities delivered upon any settlement of Restricted Stock Units shall, when delivered, (A) be duly authorized, validly issued, fully paid and nonassessable, (B) be registered

for sale, and for resale, under U.S., State and federal securities laws to the extent that other securities of the same class are then so registered or qualified and (C) be listed, or otherwise qualified, for trading on any securities exchange or securities market on which securities of the same class are then so listed or qualified.

3. Termination of Employment.

(a) Termination for Cause, without Good Reason, or due to death or Disability. If the Participant’s employment under the Employment Agreement is terminated by his employer at any time for Cause, or by the Participant without Good Reason (as defined in the Employment Agreement), or due to the Participant’s death or Disability, the unvested Restricted Stock Units shall be forfeited without further consideration therefor. For avoidance of doubt, vested Restricted Stock Units, and any distributions previously made in respect of Restricted Stock Units, shall be wholly non-forfeitable except as otherwise expressly provided in this Agreement or in the Employment Agreement; provided that the foregoing shall not in any way limit any other rights that either party may have with respect to the other party.

(b) Termination without Cause or for Good Reason. If the Participant’s employment under the Employment Agreement is terminated by his employer not for Cause (including, for avoidance of doubt, due to non-extension of the Employment Period by his employer under Section 3 of the Employment Agreement) or by the Participant with Good Reason, 33 1/3% of the unvested Restricted Stock Units in the Account on the Date of Termination (as defined in the Employment Agreement) shall become vested as of such date, and all vested Restricted Stock Units shall be settled in accordance with Section 2(c). Notwithstanding the foregoing, if the Participant’s employment under the Employment Agreement is terminated by his employer not for Cause or by the Participant with Good Reason, in each case, in anticipation of or within twelve (12) months following a Change of Control, all of the Restricted Stock Units shall become one hundred percent (100%) vested as of the Date of Termination. For purposes of this Section 3(b), a termination of employment will be deemed to be “in anticipation of” a Change of Control if such termination (or the Good Reason event giving rise to such termination) is done by the Company or any Subsidiary or Affiliate with the principal purpose of avoiding or evading its compensation obligations that would arise upon a termination following a Change of Control.

(c) Nothing in this Agreement or the Plan shall confer upon the Participant any right to continue in the employ or service of the Company or any of its Subsidiaries or Affiliates or interfere in any way with the right of the Company or any of its Subsidiaries or Affiliates to terminate the Participant’s employment or service at any time and for any reason.

4. Nontransferability of the Restricted Stock Units. The Restricted Stock Units granted hereunder may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner by the Participant (other than, in the event of the Participant’s death, by will or the applicable laws of descent and distribution) and any purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance in violation of this Section 4 shall be void and unenforceable against the Company or any Subsidiary or Affiliate. Any permitted transfer of the Restricted Stock Units by will or the laws of descent and distribution shall not be

effective to bind the Company unless the Committee shall have been furnished with written notice thereof and a copy of such evidence as the Committee may reasonably deem necessary to establish the validity of the transfer, the acceptance by the transferee or transferees of the terms and conditions of the Plan and this Agreement and the agreement to be bound by the acknowledgments made by the Participant in connection with the grant of the Restricted Stock Units.

5. Rights as a Stockholder; Dividend Equivalents. The Participant shall have no rights as a stockholder, including, without limitation, the right to vote, with respect to the Restricted Stock Units until the date when the issuance of the RSU Shares to the Participant is entered upon the records of the Company or the duly authorized transfer agent of the Company, except as set forth in the immediately succeeding sentence. Notwithstanding the foregoing, the Participant shall be entitled to “Dividend Equivalent Rights” (as defined in the Plan on the Grant Date) on the Restricted Stock Units.

6. Adjustment in the Event of Change in Stock; Change of Control.

(a) In the event of any merger, consolidation, reorganization, recapitalization, spin-off, split-up, combination, modification of securities, exchange of securities, liquidation, dissolution, share split, reverse share split, distribution of securities or other property (other than distributions for which Dividend Equivalent Rights are provided) in respect of securities or other property to which a Restricted Share Unit then corresponds, or other change in corporate structure or capitalization affecting the rights or value of the securities and property to which a Restricted Share Unit then corresponds, the Committee shall promptly make equitable and appropriate adjustment(s) in the number and/or kind of the securities and/or property to which a Restricted Share Unit corresponds, and/or the other terms and conditions that apply to a Restricted Share Unit, so as to avoid dilution or enlargement of the benefits or potential benefits represented by a Restricted Share Unit. Any determination made by the Committee regarding any adjustment will, to the extent reasonable and made in good faith, be final and conclusive.

(b) Effective upon a Change of Control, unless otherwise specifically prohibited under applicable laws or by the rules and regulations of any governmental agency or self-regulatory body and without in any way limiting the extent of Section 6(a), the Committee is authorized (but not obligated) to make the following adjustments (or any combination thereof) to the terms and conditions of outstanding Restricted Stock Units:

(i) the continuation or assumption of the outstanding Restricted Stock Units by the Company (if it is the surviving corporation), by the surviving corporation, or by any direct or indirect parent of either, in a manner consistent with Section 6(a);

(ii) the substitution by the surviving corporation, or by any direct or indirect parent thereof, of restricted stock unit awards with substantially the same terms as the Restricted Stock Units that are being replaced, in a manner consistent with Section 6(a);

(iii) the acceleration of the vesting of the outstanding Restricted Stock Units so that they are fully vested immediately prior to or as of the date of the Change of Control; or

(iv) the cancellation of all or any portion of the outstanding Restricted Stock Units in exchange for a cash payment, and/or such other property (if any) as is paid as consideration to holders of Shares in the Change of Control, having an aggregate Fair Market Value equal to the Fair Market Value of the securities or other property then subject to such outstanding Restricted Stock Units or portion thereof being cancelled.

(c) Except as expressly provided in the Plan or this Agreement, the Participant shall not have any rights by reason of any subdivision or consolidation of shares of stock of any class, the payment of any dividend, any increase or decrease in the number of shares of stock of any class or any dissolution, liquidation, merger or consolidation of the Company or any other corporation. Except as expressly provided in the Plan or this Agreement, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of shares or amount of other property subject to this Agreement.

(d) Notwithstanding anything in this Agreement or elsewhere to the contrary, no adjustment shall be made to the Restricted Stock Units that would cause any Restricted Stock Unit to be treated as “deferred compensation” for purposes of Section 409A of the Code.

7. General Assets. Nothing contained in the Plan or this Agreement and no action taken pursuant to their provisions, shall be construed to create a trust of any kind, nor any fiduciary relationship between the Company or any Subsidiary or Affiliate, on the one hand, and the Participant, the Participant’s beneficiary or legal representative or any other person, on the other. To the extent that any person acquires a right to receive payments or other property from the Company under the Plan or this Agreement, including the right to receive payments or other property based on Restricted Stock Units credited in the Participant’s Account, such right shall be no greater than the rights of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company, and all amounts and property credited to the Account under this Agreement shall continue for all purposes to be part of the general assets of the Company.

8. Responsibility for Taxes. Except to the extent otherwise provided in certain circumstances that apply with respect to the settlement of the Restricted Stock Units in Section 2(c) above, the Participant shall be solely responsible for all taxes imposed on the Participant (including, without limitation, applicable federal, state, provincial, territorial, local or foreign income, social security, estate or excise taxes) that may be payable as a result of the Participant’s participation in the Plan or as a result of the grant, vesting, or settlement of the Restricted Stock Units and/or the sale, disposition or transfer of any RSU Shares, excluding, however, for avoidance of doubt, the employer’s portion of any such taxes.

9. Government Regulations and Stop-Transfer Orders.

(a) Government and Other Regulations. RSU Shares shall not be issued unless the issuance and delivery of such RSU Shares comply with (or are exempt from) all applicable requirements of law, including (without limitation) the Exchange Act, the Securities Act, the rules and regulations promulgated thereunder, state securities laws and regulations and the regulations of any stock exchange or other securities market on which the Company’s securities may then be traded. Except as otherwise provided in this Agreement, the Company shall not be obligated to file any registration statement under any applicable securities laws to permit the purchase or issuance of any RSU Shares, and, accordingly, any certificates for RSU Shares may have an appropriate legend or statement of applicable restrictions endorsed thereon. If the Company reasonably deems it necessary to ensure that the issuance of RSU Shares is not required to be registered under any applicable securities laws, the Participant shall deliver to the Company an agreement or certificate containing such representations, warranties and covenants as the Company reasonably determines necessary or appropriate to satisfy such requirements.

(b) As a condition to the settlement of the Restricted Stock Units, upon reasonable request by the Company, the Participant will be required to represent, warrant and covenant as follows:

(i) The Participant is acquiring the RSU Shares for his own account and not with a view to, or for sale in connection with, any distribution of the RSU Shares in violation of the Securities Act or any rule or regulation under the Securities Act or in violation of any applicable state securities law.

(ii) The Participant has had such opportunity as he has deemed adequate to obtain from representatives of the Company such information as is necessary to permit him to evaluate the merits and risks of his investment in the Company.

(iii) The Participant has sufficient experience in business, financial and investment matters to be able to evaluate the risks involved in acquiring the RSU Shares and to make an informed investment decision with respect to such investment.

(iv) The Participant can afford the complete loss of the value of the RSU Shares and is able to bear the economic risk of holding such RSU Shares for an indefinite period.

(v) The Participant understands that, until the effectiveness of an initial public offering of the Common Stock of the Company, (I) the RSU Shares have not been registered under the Securities Act and constitute “restricted securities” within the meaning of Rule 144 under the Securities Act; (II) the RSU Shares cannot be sold, transferred or otherwise disposed of unless they are subsequently registered under the Securities Act or an exemption from registration is then available; and (III) there is now no registration statement on file with the Securities and Exchange Commission with respect to the RSU Shares and there is no commitment on the part of the Company to make any such filing.

(vi) In addition, upon the settlement of the Restricted Stock Units, and as a condition thereof, the Participant will make or enter into such other written

representations, warranties and agreements as the Company may reasonably request in order to comply with applicable securities laws or with this Agreement.

(c) Stop-Transfer Notices. Until the effectiveness of an initial public offering of the Common Stock of the Company, the Participant agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect on its own records.

(d) Refusal to Transfer. Until the effectiveness of an initial public offering of the Common Stock of the Company, the Company shall not be required (i) to transfer in its books any RSU Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such RSU Shares or to accord the right to vote or receive dividends, if applicable, to any purchaser or other transferee to whom such RSU Shares shall have been so transferred.

10. Tax Reporting.

(a) Upon the settlement of the Restricted Stock Units in accordance with Section 2(c) of this Agreement, the Participant shall recognize taxable income in respect of the RSU Shares, and the Company shall report such taxable income to the appropriate taxing authorities as it determines to be necessary and appropriate.

(b) Prior to the effectiveness of an initial public offering of the Common Stock of the Company, for purposes of this Agreement, “Fair Market Value”, as of any date, shall mean fair market value as of such date determined without discount for lack of liquidity, lack of control, minority status, contractual restrictions or the like, provided that, when used in respect of Shares, for so long as (i) the Shares are not listed on a national securities exchange, (ii) the Shares are not quoted in an inter-dealer quotation system on a last sale basis and (iii) Oaktree Capital Management, L.P. or any of its affiliates (collectively, “Oaktree”) are holding Shares, then, other than in the context of a Change of Control, the Fair Market Value of such Shares shall be as determined using the same methodology that was used for the then-most-recent determination of the value of Shares reported by Oaktree to its investors; and provided further that: for securities that are listed on a national securities exchange, “Fair Market Value”, as of any date, shall mean the closing sale price reported as having occurred on the primary exchange on which the security is listed and traded on such date, or, if there is no such sale on that date, then on the last preceding date on which a sale was reported; and, for securities that are not listed on any national securities exchange but are quoted in an inter-dealer quotation system on a last sale basis, “Fair Market Value”, as of any date, shall mean the average between the closing bid price and ask price reported on such date, or, if there is no such sale on that date, then on the last preceding date on which a sale was reported. For the avoidance of doubt, the foregoing valuation approach shall not be interpreted to provide the Participant with a compensatory benefit but rather is intended by the parties to promote consistency in making determinations of the fair market value of Shares. Following the effectiveness of an initial public offering of the Common Stock of the Company, for purposes of this Agreement, “Fair Market Value” shall have the meaning ascribed to it in the Plan.

11. Clawback/Forfeiture. Notwithstanding anything to the contrary contained herein and without limiting any other rights and remedies of the Company, if the Participant (i) materially violates the restrictive covenants in the Participant’s Employment Agreement relating to non-competition, non-solicitation or non-disclosure or (ii) engages in fraud or other willful misconduct that contributes materially to any significant financial restatement or material loss, the Committee may, at any time up to six months after learning of such conduct, cancel the Restricted Stock Units or require the Participant to forfeit to the Company the RSU Shares or to repay to the Company the after-tax value realized on the sale of the RSU Shares; provided, however, that, except in cases where the Participant’s conduct was willful or where injury to the Company or the Affiliates cannot be cured, the Participant shall be provided a fifteen (15) day cure period to cease and to cure the conduct described in clause (i) of this Section 11. All vested Restricted Stock Units, and all distributions and other proceeds received in respect of the Restricted Stock Units, shall be wholly non-forfeitable except as expressly set forth in this Agreement or the Employment Agreement; provided that the foregoing shall not in any way limit any other rights that either party may have with respect to the other party.

12. Notices. All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party or by facsimile, overnight courier or registered or certified mail, return receipt requested, postage prepaid, addressed as follows:


If to the Participant:	To the address specified in Exhibit A hereto or to any updated address filed by the Executive with the Company.

If to the Company: Aleris Corporation
25825 Science Park Drive, Suite 400

Beachwood, Ohio 44122
Attention: Christopher R. Clegg

or to such other address or facsimile number as either party shall have furnished to the other in writing in accordance with this Section 12. Notice and communications shall be effective when actually received by the addressee.

13. Stockholders Agreement. Prior to the effectiveness of an initial public offering of the Common Stock of the Company, neither the adoption of the Plan nor the grant of the Restricted Stock Units pursuant to this Agreement shall restrict in any way the adoption of any amendment, supplement or other modification of the Stockholders Agreement, if any, in accordance with the terms of such agreement.

14. Governing Law. This Agreement shall be governed by, and construed in accordance with, its express terms, and otherwise in accordance with the laws of the State of Delaware, as such laws are applied to contracts entered into and performed in such state and without regard to the principles of conflicts of laws thereof or principles of conflicts of laws of any other jurisdiction which could cause the application of the laws of any jurisdiction other than such state.

15. Restricted Stock Units Subject to the Plan. By entering into this Agreement, the Participant agrees and acknowledges that (i) the Participant has received and read a copy of the Plan as in effect on the date hereof, and (ii) the Restricted Stock Units are subject to the Plan, and (iii) the RSU Shares are subject to the terms of the Stockholders Agreement. In the event of a conflict between any term or provision contained in this Agreement and any term or provision of the Plan or the Stockholders Agreement, the terms and provisions of the Stockholders Agreement and then in descending order this Agreement and the Plan shall prevail. No amendment to the Plan or this Agreement that is inconsistent with the express terms of this Agreement and that adversely affects any of the Participant’s rights under this Agreement shall be effective as to this Agreement without the Participant’s prior written consent; provided, however, the Committee may amend the Plan and this Agreement to the extent necessary to comply with the applicable law.

Notwithstanding the foregoing, following the effectiveness of an initial public offering of the Common Stock of the Company, this Section 15 shall be revised to read as follows: “Restricted Stock Units Subject to the Plan. By entering into this Agreement, the Participant agrees and acknowledges that (i) the Participant has received and read a copy of the Plan as in effect on the date hereof, and (ii) the Restricted Stock Units are subject to the Plan. In the event of a conflict between any term or provision contained in this Agreement and any term or provision of the Plan, the terms and provisions of this Agreement shall prevail. No amendment to the Plan or this Agreement that is inconsistent with the express terms of this Agreement and that adversely affects any of the Participant’s rights under this Agreement shall be effective as to this Agreement without the Participant’s prior written consent; provided, however, the Committee may amend the Plan and this Agreement to the extent necessary to comply with the applicable law.”

16. Certain Specific Acknowledgments; Dispute Resolution. The Company represents and acknowledges that it has secured the approval of any person or body whose approval is necessary as of the Grant Date for it to enter into this Agreement and perform its obligations under it, and that upon execution and delivery of the Agreement by the parties, this Agreement shall be a valid and binding obligation of the Company, enforceable in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally. Any dispute arising under or relating to this Agreement shall be resolved in accordance with Section 11(i) of the Employment Agreement.

17. Effect of Agreement; Entire Agreement. Except as otherwise provided hereunder, this Agreement shall be binding upon and shall inure to the benefit of any successor or successors of the Company and to any transferee or successor of the Participant pursuant to Section 4 of this Agreement. This Agreement embodies the complete agreement and understanding among the parties hereto and supersedes and preempts any prior understandings, agreements or representations by or among the parties hereto, written or oral, which may have related to the subject matter hereof in any way.

18. Titles and Headings. The titles and headings of the sections in this Agreement are for convenience of reference only, and, in the event of any conflict, the text of this Agreement, rather than such titles or headings, shall control.

19. Amendment. This Agreement may not be modified, amended or waived to the extent it would impair the rights of the Participant, except by an instrument in writing that specifically identifies the provision of this Agreement being modified, amended or waived and that is signed by both parties hereto. The waiver by either party of compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement or of any subsequent breach of any provision of this Agreement.

20. Code Section 409A. To the extent applicable, notwithstanding anything herein to the contrary, this Agreement and the Restricted Stock Units issued hereunder are intended not to be governed by or to be in compliance with Section 409A of the Code. To the extent applicable, this Agreement and the Restricted Stock Units shall be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretative guidance issued thereunder, including, without limitation, any such regulations or other guidance that may be issued after the Grant Date.

21. Relationship to Other Benefits. No payment under this Agreement shall be taken into account in determining any benefits under any pension, retirement, profit sharing, group insurance or other benefit plan of the Company or any Subsidiary or Affiliate except as otherwise specifically provided in such other plan.

22. No Retention Rights; No Right to Incentive Award. Nothing in the Plan or this Agreement shall confer upon the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Subsidiary or Affiliate employing or retaining the Participant) or of the Participant, which rights are hereby expressly reserved by each, to terminate his Service at any time and for any reason, with or without Cause. The Committee’s granting of the Restricted Stock Units or other Award to the Participant shall neither require the Committee to grant Restricted Stock Units or other Award to the Participant or any other Participant in the Plan or other person at any time nor preclude the Committee from making subsequent grants to the Participant or any other Participant in the Plan or other person.

23. Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Signatures delivered by facsimile (including by “pdf”) shall be effective for all purposes.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, as of the date first above written, the Company has caused this Agreement to be executed on its behalf by a duly authorized officer and the Participant has hereunto set the Participant’s hand.



	ALERIS CORPORATION

	By:



	Participant:
	Date:

[Signature Page To Executive Restricted Stock Unit Agreement]

Exhibit A to

Form of Executive Restricted Stock Unit Agreement

Aleris Corporation

Date of Restricted Stock Unit Grant: ________________

Name and Address of Participant: ________________

At the last known address in the Company’s personnel records

Number of Shares of Common Stock

Subject to Restricted Stock Unit: ________________

A-1

EX-10.6 7 exhibit106formofamendedemp.htm FORM OF AMENDMENT TO EMPLOYMENT AGREEMENT Exhibit106FormofAmendedEmplymentAgreement

Exhibit 10.6

FORM OF AMENDMENT TO EMPLOYMENT AGREEMENT

THIS AMENDMENT No. __(the “Amendment”) to the _____________ (the “Agreement”), _____________________, by and among Aleris International, Inc., a Delaware corporation (together with its successors and assigns, the “Company”), for purposes of Section 1 only, Aleris Corporation, a Delaware corporation f/k/a Aleris Holding Company (together with its successors and assigns, the “Parent”), and __________ (the “Executive”).

WHEREAS, on ______, the Board of Directors of Parent authorized and approved an amendment to the Aleris Holding Company (n/k/a Aleris Corporation) 2010 Equity Incentive Plan (the “Plan”), that, among other things, changed the definitions of the terms “Initial Investors” and “Initial Investors and their affiliates” as used in the Plan (and in all equity awards theretofor and thereafter granted to the Executive under the Plan without any further action on the part of Executive), including, without limitation, as applied to the “Change of Control” definition under the Plan, so that such terms are understood to include only Oaktree Capital Management, L.P. and its affiliates and to exclude Apollo Management VII, L.P. and its affiliates (the “Plan Amendment”);

WHEREAS, the parties desire to amend the Agreement to acknowledge the Plan Amendment as it applies to the Executive as set forth herein; and

NOW, THEREFORE, for good and valuable consideration, the Executive and the Company agree as follows:


1.	Amendments. Section ____ is hereby added to the Agreement as follows:

____ Definition of Initial Investors. The terms “Initial Investors” and “Initial Investors and their affiliates” as used in the Plan and in all equity awards heretofore and hereafter granted to Executive under the Plan, including, without limitation, as applied to the “Change of Control” definition under the Plan and as used in this Agreement, is hereby modified, without any further action required by any party, so that such terms are understood to include only Oaktree Capital Management, L.P. and its Affiliates and to exclude Apollo Management VII, L.P. and its Affiliates.


2.	Other. Except as amended hereby, the Agreement shall remain in full force and effect.

[Signature Pages Follows]

IN WITNESS WHEREOF, the Parties have executed this Amendment as of the date first written above.



	EXECUTIVE



	ALERIS INTERNATIONAL, INC.

	By:

ACCEPTED AND AGREED as to Section 1 only as of the date first written above.



	ALERIS CORPORATION

	By:

[Signature Page to the Amendment to Employment Agreement]

EX-10.7 8 exhibit107-formofoutsidedi.htm FORM OF 2014 NON-EMPLOYEE DIRECTOR RSU AWARD AGREEMENT Exhibit107-FormofOutsideDirectorRSUAwardAgreement

Exhibit 10.7

ALERIS CORPORATION

2010 EQUITY INCENTIVE PLAN

FORM OF NON-EMPLOYEE DIRECTOR RESTRICTED STOCK UNIT AWARD AGREEMENT

TO: __________

FROM: Aleris Corporation

Re: Restricted Stock Unit Award

I am pleased to report that you have been granted Restricted Stock Units of Aleris Corporation (the “Company”). Some important information about your Restricted Stock Units is set out in this Award Agreement. The Restricted Stock Units were granted under the Company’s 2010 Equity Incentive Plan (the “Plan”), a copy of which ________________________. The Restricted Stock Units are subject in all respects to the terms and conditions of the Plan.

1. Key Terms.

(a) The Restricted Stock Units: Your Restricted Stock Units (or “RSUs”) will be credited to a separate account maintained for you on the books of the Company (the “Account”). On any given date, each Restricted Stock Unit will correspond to one Share.

(b) The RSU Shares: Common stock of the Company, par value $0.01 per share.

(d) Number of Restricted Stock Units: _____________

(e) Vesting: Subject to your continuous service as a member of the Board and the Board of Directors of Aleris International, Inc. (collectively, the “Boards”) from your Grant Date through each applicable vesting date, your Restricted Stock Units will vest as follows: ______________

___________________________________________________________________________.

However, if the stockholders of the Company do not re-elect or re-appoint you to the Boards, or if they remove you from service on the Boards (in either case, despite your willingness to continue to serve) prior to the date the Restricted Stock Units vest, then any unvested Restricted Stock Units shall vest in full upon the date your service on the Boards ends.

(f) Change of Control: If you are serving on the Boards at the time of a Change of Control, your Restricted Stock Units will vest to the extent necessary to make the cumulative percentage of the Restricted Stock Units awarded hereunder that has become vested as of such Change of Control at least equal to the percentage by which the Initial Investors have reduced their combined Common Stock interest in the Company. This percentage will be measured by

comparing the number of Shares acquired by the Initial Investors on the Effective Date and still held immediately following the Change of Control to the number of Shares they held as of the Effective Date (to be adjusted for stock splits, stock dividends, and the like). If the Initial Investors’ combined Common Stock interest in the Company is reduced by 75% or more, then your Restricted Stock Units will vest in full. By way of example and for illustration purposes only, if there is a Change of Control when 50% of the Restricted Stock Units are vested and the Initial Investors reduce their combined Common Stock interest in the Company by 70%, then an additional 20% of the Restricted Stock Units shall vest upon the Change of Control, and, subject to Section 11 of the Plan, the remaining 30% of the Restricted Stock Units shall continue to vest in accordance with Section 1(e) hereof.

(g) Dividend Equivalent Rights: You will have Dividend Equivalent Rights on your Restricted Stock Units. A Dividend Equivalent Right is the right to receive, for each Restricted Stock Unit, a payment equivalent to any dividend or distribution made in respect of the Shares underlying your Restricted Stock Units. If the Dividend Equivalent Right relates to a dividend paid in Shares, such Dividend Equivalent Right will be paid to you by multiplying the number of Restricted Stock Units in your Account on the dividend record date by the number of Shares payable as a dividend on a Share. The payment of a Dividend Equivalent Right with respect to any Restricted Stock Unit will be paid to you (without interest) if and when actual holders of the Shares receive their dividends or distributions.

2. Settlement. The Restricted Stock Units credited to your Account will be settled by the Company within ten (10) days after they vest (and, upon such settlement, will cease to be credited to your Account). At the time of settlement, the Company will issue you a number of Shares equal to the number of Restricted Stock Units that just vested (such Shares, the “RSU Shares”). The Company will in its sole discretion determine the appropriate manner of dealing with fractional shares, including cancellation without payment. The Company will enter your name as a stockholder of record on the books of the Company with respect to the RSU Shares so issued. As a condition to the settlement of your Restricted Stock Units, the RSU Shares shall be subject to all of the terms of the Stockholders Agreement. By signing below, you will have agreed to become a party to, and be bound by, the Stockholders Agreement on the first day that you acquire any RSU Shares pursuant to this Award Agreement.

3. Early Termination of the Restricted Stock Units. Except as otherwise set forth in Section 1(e) of this Award Agreement, if your service on the Boards ends for any reason, your unvested Restricted Stock Units shall be forfeited without further consideration. In addition, your Restricted Stock Units will terminate upon any cancellation, termination or expiration implemented by the Committee under Plan Section 11 (adjustments upon certain corporate transactions).

4. Company Call Right. After your Board service ends, the Company shall have the right, but not the obligation, to purchase any RSU Shares held by you (the “Call Right”). This Call Right may be exercised, in whole or in part, from time to time, by the Company providing written notice to you expressing its intent to exercise its Call Right and establishing a call settlement

date of not earlier than six (6) months after you acquired the Shares being called. If the Company exercises the Call Right, as consideration for the RSU Shares purchased by the Company, you will be paid the Fair Market Value of the RSU Shares on the call settlement date.

5. Restricted Stock Units Subject to Plan and Stockholders Agreement.

(a) Participant Acknowledgements. By entering into this Award Agreement, you agree and acknowledge that (i) the Restricted Stock Units are subject in all respects to the Plan and that the RSU Shares are subject to the Stockholders Agreement, the terms and provisions of which are each hereby incorporated herein by reference; (ii) the Restricted Stock Units are subject to Plan provisions under which, in certain circumstances, the Committee may terminate your Restricted Stock Units and/or make adjustments to the kind and/or number of shares or property underlying the Restricted Stock Units; and (iii) the Committee has discretion to interpret and administer the Plan and this Award Agreement and its judgments made in accordance with the Plan are final.

(b) Conflicts. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan and/or the Stockholders Agreement, the term or provision contained in the Plan and/or the Stockholders Agreement shall control. In the event of a conflict between any term or provision contained in the Plan and a term or provision of the Stockholders Agreement, the Committee shall resolve any such conflict in its sole discretion.

(c) Defined Terms. Capitalized terms not otherwise defined in this Award Agreement have the meanings given such terms in the Plan.

6. Federal Taxes. Upon the settlement of the Restricted Stock Units in accordance with Section 2 of this Award Agreement, you shall recognize taxable income in respect of the RSU Shares, and the Company shall report such taxable income to the appropriate taxing authorities as it determines to be necessary and appropriate. You should consult your personal tax advisor for more information concerning the tax treatment of your Restricted Stock Units.

We are excited to give you this opportunity to share in our future success. Please indicate your acceptance of the Restricted Stock Units, including the representations set forth above your signature, and that you have read and understand the terms of the Plan and this Award Agreement by signing and returning a copy of this Award Agreement to the address set forth below.

Sincerely,

Participant Acknowledgements.

By executing this Award Agreement, you acknowledge the following:

(a) You will become a party to this Award Agreement on the date hereof and, without any further action, the Stockholders Agreement on the first date that you acquire any RSU Shares pursuant to this Award Agreement. Other than the Company, no party to the Stockholders Agreement will have any obligation to you under this Award Agreement.

(b) You are acquiring the RSU Shares for investment purposes only and not with a view to, or for, distribution, resale or fractionalization thereof, in whole or in part, in each case under circumstances which would require registration thereof under the Securities Act, or any applicable state securities laws.

(c) You have not been given any oral or written information, representations or assurances by Issuer or any representative thereof in connection with your acquisition of the RSU Shares other than as set forth in this Award Agreement. You are relying on your own business judgment and knowledge concerning the business, financial condition and prospects of the Company in making the decision to acquire the RSU Shares. You acknowledge that no person or entity has been authorized to give any information or to make any representation relating to the RSU Shares or the Company, other than as contained in this Agreement and, if given or made, information received from any person and any representation, other than as aforesaid, must not be relied upon as having been authorized by Issuer or any person acting on its behalf.

(d) You are an “accredited investor” as described in Rule 501(a) of Regulation D under the Securities Act.

(e) You have sufficient knowledge and experience in financial and business matters to evaluate the merits and risks of the acquisition of the RSU Shares and the capacity to protect your own interests in connection with such acquisition.

(f) You acknowledge that the RSU Shares have not been registered under the Securities Act or any applicable state securities laws and, therefore, cannot be sold unless subsequently registered under the Securities Act or any applicable state securities laws or an exemption from such registration is available and that there are substantial restrictions on the transferability of such securities under the Stockholders Agreement and that transfers of the RSU Shares may be further restricted by applicable state and non-U.S. securities laws.

(g) You and your advisors, if any, have been afforded the opportunity to examine all documents related to and, if applicable, executed in connection with the transactions contemplated hereby, which you or your advisors, if any, have requested to examine.

Agreed to and Accepted:

______________________