Delaware | 0-52105 | 94-3030279 | ||
(State or Other Jurisdiction | (Commission | (I.R.S. Employer | ||
of Incorporation) | File Number) | Identification No.) |
27422 Portola Parkway, Suite 350 | ||
Foothill Ranch, California | 92610-2831 | |
(Address of Principal Executive Offices) | (Zip Code) |
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)) |
Name and Position | Year | Base Salary | ||||||
Jack A. Hockema |
2011 | $ | 831,000 | |||||
President, Chief Executive Officer and Chairman of the Board |
2010 | $ | 807,000 | |||||
2009 | $ | 787,000 | ||||||
Daniel J. Rinkenberger |
2011 | $ | 355,000 | |||||
Senior Vice President and Chief Financial Officer |
2010 | $ | 325,000 | |||||
2009 | $ | 300,000 | ||||||
John Barneson |
2011 | $ | 319,000 | |||||
Senior Vice President Corporate Development |
2010 | $ | 310,000 | |||||
2009 | $ | 302,000 | ||||||
John M. Donnan |
2011 | $ | 311,000 | |||||
Senior Vice President, Secretary and General Counsel |
2010 | $ | 302,000 | |||||
2009 | $ | 295,000 | ||||||
James E. McAuliffe, Jr. |
2011 | $ | 248,000 | |||||
Senior Vice President Human Resources |
2010 | $ | 241,000 | |||||
2009 | $ | 235,000 |
Name | Below Threshold | Threshold | Target | Maximum | ||||||||||||
Jack A. Hockema |
$ | 0 | $ | 284,500 | $ | 569,000 | $ | 1,707,000 | ||||||||
Daniel J. Rinkenberger |
0 | 100,000 | 235,000 | 705,000 | ||||||||||||
John Barneson |
0 | 72,000 | 144,000 | 432,000 | ||||||||||||
John M. Donnan |
0 | 79,000 | 158,000 | 474,000 | ||||||||||||
James E. McAuliffe, Jr. |
0 | 55,500 | 111,000 | 333,000 |
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Number of Shares of | Number of | |||||||
Name | Restricted Stock (1) | Performance Shares (2) | ||||||
Jack A. Hockema |
15,533 | 65,958 | ||||||
Daniel J. Rinkenberger |
5,490 | 13,114 | ||||||
John Barneson |
4,552 | 10,874 | ||||||
John M. Donnan |
4,289 | 10,245 | ||||||
James E. McAuliffe, Jr. |
2,539 | 6,065 |
(1) | The restrictions on 100% of the shares of restricted stock granted will lapse on March 5, 2014 or earlier if the Named Executive Officers employment terminates as a result of death or disability, the Named Executive Officers employment is terminated by the Company without cause, the Named Executive Officers employment is voluntarily terminated by him for good reason, the Named Executive Officer retires at or after reaching age 65 or in the event of a change in control of the Company. | |
(2) | The table below sets forth the number of performance shares that will become vested for each of the Named Executive Officers under the 2011 2013 LTI Program at the threshold, target and maximum performance levels: |
Name | Threshold | Target | Maximum | |||||||||
Jack A. Hockema |
0 | 32,979 | 65,958 | |||||||||
Daniel J. Rinkenberger |
0 | 6,557 | 13,114 | |||||||||
John Barneson |
0 | 5,437 | 10,874 | |||||||||
John M. Donnan |
0 | 5,122 | 10,245 | |||||||||
James E. McAuliffe, Jr. |
0 | 3,032 | 6,065 |
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Exhibit | ||
Number | Description | |
10.1
|
Kaiser Aluminum Fabricated Products 2011 Short-Term Incentive Plan For Key Managers Summary. | |
10.2
|
2011 Form of Executive Officer Restricted Stock Award Agreement. | |
10.3
|
2011 Form of Executive Officer Performance Shares Award Agreement. | |
10.4
|
Kaiser Aluminum Corporation 2011 2013 Long-Term Incentive Program Management Objectives and Formula for Determining Performance Shares Earned Summary. |
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KAISER ALUMINUM CORPORATION (Registrant) |
||||
By: | /s/ John M. Donnan | |||
John M. Donnan | ||||
Senior Vice President, Secretary and General Counsel | ||||
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1. | Focus attention on value creation within Fabricated Products, our core business segment, and Corporate. | |
2. | Reward the achievement of aggressive performance goals. | |
3. | Provide incentive opportunities that are consistent with competitive market. | |
4. | Link incentive pay to performance as well as our success and ability to pay. |
| EVA will equal our pre-tax operating income of our core Fabricated Products business, including corporate expenses (PTOI) less a capital charge calculated as a percentage of our net assets (Net Assets). Both PTOI and Net Assets will be based on our financial statements and certain adjustments described in more detail below. |
o | Net Assets will equal our Total Assets less Total Liabilities reflected in the consolidated financial statements for our prior fiscal year subject to adjustments to: |
§ | Remove the secondary aluminum and hedging business units (formerly Primary Products) | ||
§ | Remove discontinued operations and legacy environmental accruals | ||
§ | Eliminate fresh start adjustments for PP&E value and intangible assets, including the write-up of pre-emergence goodwill | ||
§ | Eliminate VEBA related assets and liabilities | ||
§ | Exclude financing items | ||
§ | Exclude capex in progress | ||
§ | Add prorated value of capital projects and acquisitions larger than 1% of prior year Net Assets except to the extent necessary to avoid over-stating Net Assets | ||
§ | Exclude income tax assets and liabilities |
§ | Exclude derivative related assets or liabilities associated with Fabricated Products | ||
§ | Others as recommended by the CEO and approved by our Compensation Committee of the Board of Directors (the Compensation Committee) |
o | PTOI will be adjusted to: |
§ | Exclude non-cash LIFO inventory charges (benefits) and respective non-cash metal gains (losses) | ||
§ | Exclude non-cash mark-to-market and lower of cost or market adjustments | ||
§ | Add back depreciation associated with step-down in property, plant and equipment resulting from the implementation of fresh start accounting | ||
§ | Amortize the following non-recurring activities over three calendar years with the first year being the year of the initial charge if the value exceeds one percent of Net Assets: |
| Restructuring charges | ||
| Gains or losses resulting from asset dispositions | ||
| Labor stoppage costs | ||
| Asset impairment charges |
| Exclude discontinued operations and legacy environmental income and expenses | ||
| Exclude VEBA income and expense | ||
| Others as recommended by the CEO and approved by our Compensation Committee |
| Safety performance will be measured by Total Case Incident Rate (TCIR). |
| A monetary target incentive amount for each participant is established for the STIP based on competitive market, internal compensation balance and position responsibilities. | |
| Participants monetary incentive targets are set at the beginning of each annual STIP performance period. | |
| The participants monetary incentive target amount represents the incentive opportunity when certain financial and safety performance goals are met. |
| At the end of the year EVA will be determined and used to calculate the Award Multiple. | |
| Award Multiples calculations are audited by an auditor determined by the Compensation Committee. | |
| The Award Multiple is adjusted within a range of plus or minus 10% based upon TCIR. | |
| The maximum Award Multiple is 3.0 times target. | |
| A pool is established based upon the Award Multiple multiplied by the sum of individual monetary incentive targets for the STIP participants. | |
| The entire pool is paid to participants. |
| Each participants base award is determined as the vested monetary incentive target times Award Multiple. | |
| Based on EVA and TCIR performance. |
o | If the award multiple is 1.0 or greater, then the earnings and individual / safety performance modifier will be a percentage of the calculated award. | ||
o | If the award multiple is less than 1.0, then the earnings and individual / safety performance modifier will be a percentage of incentive target. |
| STIP awards are paid, at the Companys election, in cash, non-restricted shares of the Companys common stock or a combination of cash and non-restricted shares no later than March 15 following the end of the year. | |
| Award is conditioned on employment on date of payment unless employment is terminated: |
o | As a result of death, disability, normal retirement or full early retirement (position elimination); | ||
o | Involuntarily by the company without cause; or | ||
o | Voluntarily by the employee with good reason |
| The STIP will be reviewed annually. | |
| Annual incentive awards paid from the STIP count as additional compensation for purposes of the Companys Defined Contribution and Restoration Plans but not for other Company benefits. | |
| All applicable federal, state, local and FICA taxes will be withheld from all incentive award payments. | |
| Retirement or termination: If participant dies or retires under normal retirement at or after age 65, full early retirement (position elimination), or is involuntarily terminated due to position elimination, or becomes disabled, on a date other than December 31 of any year, a pro-rata incentive award is earned based on actual eligibility during the performance period. | |
| Leave of absence participants earn a prorated award based on the number of months of active employment. | |
| Beneficiary designation: In the event of death the deceased participants designated beneficiary will receive any payments due under the STIP. If there is no designated beneficiary on file with Human Resources, any amounts due will be paid to the surviving spouse or, if no surviving spouse, to the participants estate. | |
| Non transferability: No amounts earned under the STIP may be sold, transferred, pledged or assigned, other than by will or the laws of descent and distribution until the termination of the applicable performance period. All rights to benefits under the STIP are exercisable only by the participant or, in the case of death, by the participants beneficiary. |
| The STIP may be modified, amended or terminated by the Compensation Committee at any time. If the plan is terminated, modified or amended, then future payments from the STIP are governed by such modifications or amendments. If terminated, then a prorated award will be determined based on number of months up to termination, and paid before March 15 following the end of the year. | |
| The STIP constitutes no right to continued employment. | |
| The Chairman and CEO, with oversight from the Compensation Committee, has the discretionary authority to interpret the terms of the plan and his decisions shall be final, binding and conclusive on all persons affected. |
Date on Which | Number of Shares for | |
Restrictions Lapse | Which Restrictions Lapse | |
_________, 20__
|
____________ shares | |
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(a) | The Participant waives receipt from the Company of a certificate or certificates representing the shares of Restricted Stock granted hereunder registered in the Participants name and bearing a legend evidencing the restrictions imposed on such shares of Restricted Stock by this Agreement. The Participant acknowledges that the Company shall retain custody of such certificate or certificates until the restrictions imposed by this Agreement on the shares of Restricted Stock granted hereunder lapse. The Participant acknowledges that, alternatively, the shares of Restricted Stock granted hereunder may be credited to a book-entry account in the Participants name, with instructions from the Company to the Companys transfer agent that such shares shall remain restricted until the restrictions imposed by this Agreement on such shares lapse. The Participant will provide the Company a duly signed stock power in such form as may be requested by the Company. | ||
(b) | Except as may otherwise be provided herein and in the Plan, the shares of Restricted Stock granted hereunder shall become freely transferable by the Participant on the dates and in the numbers set forth under Lapse of Restrictions above, subject to all restrictions on transfers imposed by the Companys certificate of incorporation, bylaws or insider trading policies as in effect from time to time or by applicable federal or state securities laws. Once shares of Restricted Stock granted hereunder are no longer subject to any restrictions on transfer under this Agreement or the Plan, the Participant shall be entitled to have the legend required by Section 2 of this Agreement removed from the applicable certificates or book-entry account. |
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(a) | By Death. In the event the Participant ceases to be an Employee of the Company by reason of death during a Period of Restriction, all shares of Restricted Stock granted hereunder and held by the Participant at the time of death shall no longer be subject to the Period of Restriction and shall become freely transferable (subject, however, to all restrictions on transfer imposed by the Companys certificate of incorporation or bylaws or by applicable federal or state securities laws) by such Person or Persons that have been named as the Participants beneficiary as contemplated by Section 9 of this Agreement or by such Person or Persons that have acquired the Participants rights to such shares of Restricted Stock by will or the laws of descent and distribution. Once shares of Restricted Stock granted hereunder are no longer subject to any restrictions on transfer under this Agreement or the Plan, the Person or Persons holding such shares shall be entitled to have the legend required by Section 2 of this Agreement removed from the applicable certificates or book-entry account. | ||
(b) | By Disability. In the event the Participant ceases to be an Employee of the Company by reason of Disability (as defined in this Section 5(b)) during a Period of Restriction, all shares of Restricted Stock granted hereunder and held by the Participant at the time of employment termination shall no longer be subject to the Period of Restriction and shall become freely transferable (subject, however, to all restrictions on transfer imposed by the Companys certificate of incorporation or bylaws or by applicable federal or state securities laws) by the Participant. Once shares of Restricted Stock granted hereunder are no longer subject to any restrictions on transfer under this Agreement or the Plan, the Person holding such shares shall be entitled to have the legend required by Section 2 of this Agreement removed from the applicable stock certificates or book-entry account. | ||
Disability shall be defined as a total and permanent disability as a result of bodily injury, disease or mental disorder which results in the Participants entitlement to long-term disability benefits under the Kaiser Aluminum Self-Insured Welfare Plan or the Kaiser Aluminum Salaried Employees Retirement Plan. | |||
(c) | Involuntary Termination Other Than For Cause or Detrimental Activity; Termination For Good Reason. In the event the Participant ceases to be an Employee of the Company because either (i) the Company or any of its Subsidiaries terminates such employment for any reason other than for Cause or other Detrimental Activity or (ii) the Participant terminates his or her employment for |
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Good Reason, all shares of Restricted Stock granted hereunder and held by the Participant at the time of such employment termination shall no longer be subject to the Period of Restriction and shall become freely transferable (subject, however, to all restrictions on transfer imposed by the Companys certificate of incorporation or bylaws or by applicable federal or state securities laws) by the Participant. Once shares of Restricted Stock granted hereunder are no longer subject to any restrictions on transfer under this Agreement or the Plan, the Person holding such shares shall be entitled to have the legend required by Section 2 of this Agreement removed from the applicable stock certificates or book-entry account. | |||
(d) | Retirement. In the event the Participant ceases to be an Employee of the Company as a result of retirement at or after age 65 during a Period of Restriction, all shares of Restricted Stock granted hereunder and held by the Participant at the time of such retirement shall, subject to the forfeiture provisions contained in Sections 7 and 8 of this Agreement, become freely transferable (subject, however, to all restrictions on transfer imposed by the Companys certificate of incorporation or bylaws or by applicable federal or state securities laws) on the dates and in the number of shares set forth under Lapse of Restrictions above as more fully described in Section 3(b) above or, if earlier, on the Participants death, by the Participant or, in the event of the Participants death, by such Person or Persons that have been named as the Participants beneficiary as contemplated by Section 9 of this Agreement or by such Person or Persons that have acquired the Participants rights to such shares of Restricted Stock by will or the laws of descent and distribution. Once shares of Restricted Stock granted hereunder are no longer subject to any restrictions on transfer under this Agreement or the Plan, the Person or Persons holding such shares shall be entitled to have the legend required by Section 2 of this Agreement removed from the applicable certificates or book-entry account. | ||
(e) | For Other Reasons. In the event the Participant ceases to be an Employee of the Company for any reason other than the reasons set forth in Section 5(a), 5(b), 5(c) or 5(d) of this Agreement during a Period of Restriction, all shares of Restricted Stock granted hereunder and held by the Participant at the time of employment termination shall be forfeited by the Participant to the Company. The Company shall have the right, at the sole discretion of the Committee, to vest all or any portion of the Restricted Stock grant held by the Participant that would otherwise be forfeited. |
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(a) | Forfeit to the Company any shares of Restricted Stock granted hereunder then held by the Participant; | ||
(b) | Return to the Company, in exchange for payment by the Company of any cash amount actually paid therefor by the Participant (unless such payment is prohibited by law), all Common Shares that the Participant has not disposed of that were acquired pursuant to this Agreement within one (1) year prior to the date of the commencement of such Detrimental Activity; and | ||
(c) | With respect to any Common Shares so acquired that the Participant has disposed of, pay to the Company in cash the aggregate Market Value per Share of the Common Shares on the date of such acquisition. |
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(a) | This Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe and make all determinations necessary or appropriate to the administration of the Plan and this Agreement, all of which shall be binding upon the Participant. | ||
(b) | In accordance with Section 19 of the Plan, the Board may terminate, amend or modify the Plan. | ||
(c) | The Participant shall pay to the Company or make arrangements satisfactory to the Committee for payment of any federal, state and local taxes (including the Participants FICA obligation), whether domestic or foreign, required by law to be withheld on account of any event under this Agreement. | ||
The Participant acknowledges that the Company shall have the power and the right to deduct or withhold from the Participants compensation an amount sufficient to satisfy federal, state and local taxes (including the Participants FICA obligation), whether domestic or foreign, required by law to be withheld with respect to any event under this Agreement should Participant fail to make timely payment of all taxes due. | |||
The Participant may elect, subject to the Plan, the approval of the Committee and any procedural rules adopted by the Committee, to satisfy the withholding requirement, in whole or in part, by having the Company withhold vested shares having an aggregate Market Value per Share on the date the tax is to be determined equal to the amount required to be withheld. | |||
(d) | The Participant shall take all steps necessary to comply with all applicable provisions with respect to transfers of the Companys securities imposed by the Companys certificate of incorporation, bylaws and insider trading policies and federal and state securities laws, each as in effect from time to time, in exercising his or her rights under this Agreement. |
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(e) | All obligations of the Company under the Plan and this Agreement shall be binding on any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company. | ||
(f) | This Agreement shall be governed by and construed in accordance with the internal substantive laws of the State of Delaware. | ||
(g) | Notice hereunder shall be given to the Company at its principal place of business, and shall be given to the Participant at the address set forth below, or in either case at such address as one party may subsequently furnish to the other party in writing. | ||
(h) | If there is any inconsistency between the terms of this Agreement and the terms of a written employment agreement between the Participant and the Company or a Subsidiary of the Company (the Employment Agreement) relating to the lapse of restrictions imposed by this Agreement on the shares of Restricted Stock granted hereunder, the terms of the Employment Agreement shall completely supersede and replace the conflicting terms of this Agreement, provided that such terms of the Employment Agreement are not inconsistent with the terms of the Plan. | ||
(i) | By accepting the grant of Restricted Stock contemplated hereby, the Participant is deemed to be bound by the terms and conditions set forth in the Plan and this Agreement regardless of whether the Participant executes and delivers to the Company a copy hereof. |
(a) | Beneficial Owner or Beneficial Ownership shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act. | ||
(b) | Board or Board of Directors means the Board of Directors of the Company. | ||
(c) | Business Combination means a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another corporation or entity, or other transaction. | ||
(d) | Cause means (i) the Participants engaging in fraud, embezzlement, gross misconduct or any act of gross dishonesty with respect to the Company or its affiliates, (ii) the Participants habitual drug or alcohol use which impairs the ability of the Participant to perform his duties with the Company or its affiliates, (iii) the Participants indictment with respect to, conviction of, or plea of guilty or no contest to, any felony, or other comparable crime under applicable local law (except, in any event, for motor vehicle violations not involving personal injuries to third parties or driving while intoxicated), or the Participants incarceration with respect to any of the foregoing that, in each case, impairs the Participants ability to continue to perform his duties with the Company and its affiliates, or (iv) the Participants material breach of any written employment agreement or other agreement between |
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the Company and the Participant, or of the Companys Code of Business Conduct, or failure by the Participant to substantially perform his or her duties for the Company which remains uncorrected or reoccurs after written notice has been delivered to the Participant demanding substantial performance and the Participant has had a reasonable opportunity to correct such breach or failure to perform. |
(e) | Change in Control means the occurrence on or after the date of this Agreement of any of the following events: |
(i) | the acquisition by any Person of Beneficial Ownership of 35% or more of the combined voting power of the then-outstanding Voting Stock of the Company; provided, however, that: |
(A) | for purposes of this Section 12(e)(i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition of Voting Stock of the Company directly from the Company (x) pursuant to the POR or (y) that is approved by a majority of the Incumbent Directors, (2) any acquisition of Voting Stock of the Company by the Company or any Subsidiary, (3) any acquisition of Voting Stock of the Company by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary (other than any voluntary employee beneficiary association established in connection with the POR), and (4) any acquisition of Voting Stock of the Company by any Person pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 12(e)(iii) below; | ||
(B) | if any Person acquires Beneficial Ownership of 35% or more of combined voting power of the then-outstanding Voting Stock of the Company as a result of a transaction described in clause (A)(1) of Section 12(e)(i) and such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of the Company representing 1% or more of the then-outstanding Voting Stock of the Company, other than in an acquisition directly from the Company pursuant to the POR, in an acquisition directly from the Company in a transaction that is approved by a majority of the Incumbent Directors or other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Stock are treated equally, such subsequent acquisition shall be deemed to constitute a Change in Control; | ||
(C) | a Change in Control will not be deemed to have occurred if a Person acquires beneficial ownership of 35% or more of the Voting Stock of the Company as a result of a reduction in the number of shares of Voting Stock of the Company outstanding unless and until such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of the Company representing 1% or more of the then-outstanding Voting Stock of the Company, other than in an acquisition directly from the Company pursuant to the POR, in an |
8
acquisition directly from the Company in a transaction that is approved by a majority of the Incumbent Directors or other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Stock are treated equally; and | |||
(D) | if at least a majority of the Incumbent Directors determine in good faith that a Person has acquired beneficial ownership of 35% or more of the Voting Stock of the Company inadvertently, and such Person divests as promptly as practicable a sufficient number of shares so that such Person beneficially owns less than 35% of the Voting Stock of the Company, then no Change in Control shall have occurred as a result of such Persons acquisition; or |
(ii) | a majority of the Directors are not Incumbent Directors; or | ||
(iii) | the consummation of a Business Combination, unless, in each case, immediately following such Business Combination (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Stock of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination (including without limitation an entity which as a result of such transaction owns the Company or all or substantially all of the Companys assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from such Business Combination, any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from such Business Combination (other than any voluntary employee beneficiary association established in connection with the POR) or any Person that immediately prior to such Business Combination owns, directly or indirectly, 35% or more of the Voting Stock of the Company so long as such Person does not at such time own, directly or indirectly, more than 1% of the securities of the other corporation or other entity involved in such Business Combination to be converted into or exchanged for shares of Voting Stock of the entity resulting from such Business Combination pursuant to such Business Combination)) beneficially owns, directly or indirectly, 35% or more of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination, and (C) at least a majority of the members of the Board of Directors of the entity resulting from such Business Combination were Incumbent Directors at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or | ||
(iv) | approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 12(e)(iii). |
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(f) | Director shall mean a member of the Board of Directors of the Company. | ||
(g) | Employee of the Company means an officer or employee of the Company or one or more of its Subsidiaries. | ||
(h) | Exchange Act means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto. | ||
(i) | Good Reason means, without a Participants consent, the occurrence of any of the following events which is not cured by the Company within ten (10) business days following the Participants written notice to the Company of the event constituting Good Reason; provided, however, that, if such written notice is not received by the Company within the thirty (30) day period after the date on which the Participant first had knowledge of the occurrence of such event giving rise to Good Reason (or, in the case of multiple events, the latest to occur of such events), any such written notice shall not be effective and the Participant shall be deemed to have waived his/her right to terminate employment for Good Reason with respect to such event: |
(i) | Demotion, reduction in title, reduction in position or responsibilities, or change in reporting responsibilities or reporting level that is materially and adversely inconsistent with the Participants then position or the assignment of duties and/or responsibilities materially and adversely inconsistent with such position; or | ||
(ii) | Relocation of the Participants primary office location more than fifty (50) miles from the Participants then current office location; or | ||
(iii) | Reduction of greater than 10% in the Participants then base salary or reduction of greater than 10% in the Participants then long term or short term incentive compensation opportunity or a reduction in the Participants eligibility for participation in the Companys benefit plans that is not commensurate with a similar reduction among similarly situated employees. |
(j) | Incumbent Directors means the individuals who, as of the date hereof, are Directors of the Company and any individual becoming a Director subsequent to the date hereof whose election, nomination for election by the Companys stockholders, or appointment was approved by a vote of at least two-thirds of the then Incumbent Directors (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination); provided, however, that an individual shall not be an Incumbent Director if such individuals election or appointment to the Board occurs as a result of an actual or threatened election contest (as described in Rule 14a-12(c) of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board. |
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(k) | Person shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a group as defined in Section 13(d) thereof. | ||
(l) | POR means the Second Amended Joint Plan of Reorganization of Kaiser Aluminum Corporation, Kaiser Aluminum & Chemical Corporation and Certain of Their Debtor Affiliates, as modified, filed pursuant to Section 1121(a) of Title 11 of the United States Code and confirmed by an order of the United States Bankruptcy Court for the District of Delaware entered on February 6, 2006, which confirmation was affirmed by an order of the United States District Court for the District of Delaware entered on May 11, 2006. | ||
(m) | Voting Stock means securities entitled to vote generally in the election of directors (or similar governing bodies). |
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Kaiser Aluminum Corporation |
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By: | ||||
Name: | ||||
Title: | ||||
Participants name and address: | ||||
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Date: |
||||||
Participant |
1
(a) | The Performance Shares covered by this Agreement are granted to the Participant effective on the Date of Grant set forth above and are subject to, and granted upon, the terms, conditions and restrictions set forth in this Agreement and in the Plan. The Performance Shares granted hereunder shall be earned as set forth under Formula for Determining Performance Shares Earned above. The Performance Shares granted hereunder shall be credited to a bookkeeping entry in the Participants name established and maintained by the Company until payment or forfeiture of such Performance Shares in accordance with this Agreement. | ||
(b) | Except as may otherwise be provided herein and in the Plan, neither the Performance Shares granted hereunder nor any right or interest under this Agreement (including, without limitation, any interest in the Common Shares underlying such Performance Shares) shall be transferable prior to payment in accordance with Section 3 of this Agreement other than as contemplated by Section 8 of this Agreement or by will or the laws of descent and distribution. If Performance Shares granted hereunder or any right or interest under this Agreement (including, without limitation, any interest in the Common Shares underlying Performance Shares) are sold, transferred, pledged, assigned or otherwise alienated or hypothecated, whether voluntarily or involuntarily, other than in accordance with this Agreement or the Plan, or if any attachment, execution, garnishment or lien shall be issued against or placed upon Performance Shares granted hereunder or any right or interest under this Agreement (including, without limitation, any interest in the Common Shares underlying Performance Shares), all Performance Shares shall be immediately forfeited by the Participant and all obligations of the Company under this Agreement shall terminate. |
(a) | Each Performance Share granted hereunder that becomes vested and earned or deemed earned shall entitle the Participant to receive one (1) Common Share, subject to adjustment in accordance with Section 13 of the Plan. | ||
(b) | Except as otherwise provided in Section 5(a) of this Agreement, the Company shall issue or deliver Common Shares to the Participant to settle vested and earned Performance Shares granted hereunder as soon as practicable following the Performance Vesting Date (and in no event later than December 31 of the calendar year in which the Performance Vesting Date occurs) or, if the Performance Shares are vested and deemed earned prior thereto upon an event contemplated by Section 5(b), 5(c) or 6 of this Agreement, the date of such event (and in no event later than 2-1/2 months after the end of the calendar year in which such event occurs), with the applicable vesting date being referred to herein as the Vesting Date. Notwithstanding the foregoing, if the applicable Vesting Date is a date when trading |
2
in the Common Shares is subject to a blackout period or any other restriction on trading under the Companys trading policy, the issuance or delivery to the Participant of the Common Shares underlying the vested and earned Performance Shares shall be deferred until the end of such blackout period or other restriction on trading, provided that, in all cases, the Common Shares underlying the vested and earned Performance Shares shall be issued or delivered to the Participant no later than (i) if the Performance Shares become vested and earned on the Performance Vesting Date, December 31 of the calendar year in which the Performance Vesting Date occurs and (ii) if the Performance Shares become vested and deemed earned prior to the Performance Vesting Date, 2-1/2 months after the end of the calendar year in which the applicable Vesting Date occurs. | |||
(c) | Except to the extent determined by the Committee and permitted by the Plan, the Company may not issue or deliver Common Shares to the Participant in respect of the Performance Shares granted hereunder at a time earlier than otherwise expressly provided in this Agreement. | ||
(d) | The Companys obligations to the Participant with respect to this Agreement and the Performance Shares vested and earned hereunder shall be satisfied in full upon the issuance or delivery of Common Shares in respect of such Performance Shares. |
(a) | The Participant shall have no rights of ownership in the Performance Shares granted hereunder and shall have no voting or other ownership rights in respect of the Common Shares underlying the Performance Shares granted hereunder until the date on which such Common Shares, if any, are issued or delivered to the Participant pursuant to Section 3 of this Agreement. | ||
(b) | So long as the Performance Shares granted hereunder remain outstanding, if the Company declares a dividend or distribution on the Companys Common Shares payable other than in shares of the Companys capital stock and the record date for such dividend or distribution occurs prior to the date set forth under End of Performance Period above, the Participant shall be paid, on or as promptly as practicable after the payment date for such dividend or distribution (and, in any event, within the same calendar quarter in which such dividend or distribution is paid), the amount and type of dividend or distribution that the Participant would have received if the number of Common Shares issuable or deliverable assuming the Target Performance Shares (as defined in Section 5(a)) are vested and earned had been issued and outstanding and held of record by the Participant on such record date. So long as the Performance Shares granted hereunder remain outstanding, if the Company declares a dividend or distribution on the Companys Common Shares payable other than in shares of the Companys capital stock and the record date for such dividend or distribution occurs on or after the date set forth under End of Performance Period above but before Common Shares are issued or delivered to the Participant in settlement of any Earned Performance Shares (as defined in Section 5(a)) pursuant to Section 3 of this Agreement, the Participant shall be paid, on or as promptly as practicable after the later of the payment date for such dividend |
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or distribution and the date on which such Common Shares, if any, are so issued (and, in any event, within the same calendar year in which such dividend or distribution is paid), the amount and type of dividend or distribution that the Participant would have received if such Common Shares had been issued and outstanding and held of record by the Participant on such record date. For purposes of the time and form of payment requirements of Section 409A of the Code, such dividend equivalents shall be treated separately from the Performance Shares. | |||
(c) | The obligations of the Company under this Agreement are unfunded and unsecured, and the rights of the Participant hereunder will be no greater than those of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement. | ||
(d) | In the event (i) the Participant ceases to be an Employee of the Company prior to the Performance Vesting Date and forfeits Performance Shares pursuant to Section 5(e) of this Agreement or (ii) the Participant forfeits any Performance Shares pursuant to Section 2(b) or 7 of this Agreement, the Company shall have the right to demand that all or any portion of dividend or distribution equivalents theretofore received by the Participant in respect of such forfeited Performance Shares be repaid to the Company. Furthermore, the Company may, to the extent permitted by law, set off the amounts payable to it as a result of any such demand against any amounts that may be owing from time to time by the Company or any Subsidiary to the Participant, whether as wages or vacation pay or in the form of any other benefit or for any other reason; provided, however, that, except to the extent permitted by Treasury Regulation Section 1.409A-3(j)(4), such offset shall not apply to amounts that are deferred compensation within the meaning of Section 409A of the Code. |
(a) | By Death. In the event the Participant ceases to be an Employee of the Company by reason of death prior to the date set forth under End of Performance Period above, a number of Performance Shares granted hereunder that would become vested and earned assuming achievement of the target level of Management Objectives set forth above and assuming the Participant were an Employee of the Company from the Date of Grant through (and including) the Performance Vesting Date (Target Performance Shares) shall immediately become 100% vested and deemed earned and the Company shall issue or deliver the Common Shares underlying the Target Performance Shares as soon as practicable following the date of death (and in no event later than 2-1/2 months after the end of the calendar year in which the Participants death occurs) to the Person or Persons that have been named as the Participants beneficiary or beneficiaries, as contemplated by Section 8 of this Agreement, or to such Person or Persons that have acquired the Participants rights to such Performance Shares by will or the laws of descent and distribution. In the event the Participant ceases to be an Employee of the Company by reason of death on or after the date set forth under End of Performance Period above but on or before the Performance Vesting Date, a number of Performance Shares granted hereunder that would become vested and earned on the Performance Vesting Date assuming the Participant were an Employee of the Company from the Date of Grant |
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through (and including) the Performance Vesting Date (Earned Performance Shares) shall become 100% vested and earned upon the Performance Vesting Date and the Company shall issue or deliver the Common Shares underlying the Earned Performance Shares as soon as practicable following the Performance Vesting Date (and in no event later than December 31 of the calendar year in which the Performance Vesting Date occurs) to the Person or Persons that have been named as the Participants beneficiary or beneficiaries, as contemplated by Section 8 of this Agreement, or to such Person or Persons that have acquired the Participants rights to such Performance Shares by will or the laws of descent and distribution. Notwithstanding the foregoing, if, in connection with the events contemplated by the first sentence of this Section 5(a), the Participants death or, in connection with the events contemplated by the second sentence of this Section 5(a), the Performance Vesting Date occurs on a date when trading in the Common Shares is subject to a blackout period or any other restriction on trading under the Companys trading policy, the issuance or delivery to such Person or Persons of the Common Shares underlying the Performance Shares shall be deferred until the end of such blackout period or other restriction on trading, provided that, in all cases, the Common Shares underlying the Performance Shares shall be issued or delivered to such Person or Persons no later than (i) in connection with the events contemplated by the first sentence of this Section 5(a), 2-1/2 months after the end of the calendar year in which the Participants death occurs or (ii) in connection with the events contemplated by the second sentence of this Section 5(a), December 31 of the calendar year in which the Performance Vesting Date occurs. | |||
(b) | By Disability. In the event the Participant ceases to be an Employee of the Company by reason of Disability (as defined in this Section 5(b)) prior to the date set forth under End of Performance Period above, the Target Performance Shares shall immediately become 100% vested and deemed earned, and the Company shall issue or deliver the Common Shares underlying the Target Performance Shares to the Participant in accordance with Section 3 of this Agreement. In the event the Participant ceases to be an Employee of the Company by reason of Disability on or after the date set forth under End of Performance Period above but on or before the Performance Vesting Date, any Earned Performance Shares shall become 100% vested and earned upon the Performance Vesting Date and the Company shall issue or deliver the Common Shares underlying the Earned Performance Shares to the Participant in accordance with Section 3 of this Agreement. | ||
Disability shall be defined as a total and permanent disability as a result of bodily injury, disease or mental disorder which results in the Participants entitlement to long-term disability benefits under the Kaiser Aluminum Self-Insured Welfare Plan or the Kaiser Aluminum Salaried Employees Retirement Plan. | |||
(c) | Involuntary Termination Other Than for Cause or Detrimental Activity. In the event the Participant ceases to be an Employee of the Company prior to the date set forth under End of Performance Period above because either (i) the Company or any of its Subsidiaries terminates such employment for any reason other than for Cause or other Detrimental Activity or (ii) the Participant terminates his or her employment for Good Reason, the Target Performance Shares shall immediately |
5
become 100% vested and deemed earned and the Company shall issue or deliver the Common Shares underlying the Target Performance Shares to the Participant in accordance with Section 3 of this Agreement. In the event the Participant ceases to be an Employee of the Company on or after the date set forth under End of Performance Period above but on or before the Performance Vesting Date because either (i) the Company or any of its Subsidiaries terminates such employment for any reason other than for Cause or other Detrimental Activity or (ii) the Participant terminates his or her employment for Good Reason, any Earned Performance Shares shall become 100% vested and earned upon the Performance Vesting Date and the Company shall issue or deliver the Common Shares underlying the Earned Performance Shares to the Participant in accordance with Section 3 of this Agreement. | |||
(d) | Retirement. In the event the Participant ceases to be an Employee of the Company as a result of retirement at or after age 65 and on or before the Performance Vesting Date, the Performance Shares granted hereunder shall remain outstanding subject to the forfeiture provisions contained in Sections 2 and 7 of this Agreement and any Earned Performance Shares shall become 100% vested and earned upon the Performance Vesting Date, and the Company shall issue or deliver the Common Shares underlying the Earned Performance Shares to the Participant in accordance with Section 3 of this Agreement. | ||
(e) | For Other Reasons. In the event the Participant ceases to be an Employee of the Company prior to the Performance Vesting Date for any reason other than the reasons set forth in Sections 5(a), 5(b), 5(c) or 5(d) of this Agreement, all Performance Shares granted hereunder and any rights to dividend equivalents related thereto shall be forfeited by the Participant. The Company shall have the right, at the sole discretion of the Committee, to determine that all or any portion of the Performance Shares that would otherwise be forfeited has been vested and earned. |
6
(a) | Forfeit any Performance Shares granted hereunder; | ||
(b) | Return to the Company all Common Shares that the Participant has not disposed of that were acquired pursuant to this Agreement within one (1) year prior to the date of the commencement of such Detrimental Activity; and | ||
(c) | With respect to any Common Shares so acquired that the Participant has disposed of, pay to the Company in cash the aggregate Market Value per Share of the Common Shares on the date of such acquisition. |
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(a) | To the extent applicable, this Agreement and the Plan are intended to comply with Section 409A of the Code and all provisions of this Agreement and the Plan shall be administered, construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A of the Code. To the extent that the Performance Shares, or the issuance or delivery of the Common Shares in respect of the Performance Shares, are subject to Section 409A of the Code, the Performance Shares shall be awarded, and any Common Shares in respect thereof shall be issued or delivered, in a manner that will comply with Section 409A of the Code, including proposed, temporary or final regulations or any other guidance issued by the Secretary of the Treasury and the Internal Revenue Service with respect thereto. Notwithstanding any provision of this Agreement to the contrary, in light of the uncertainty with respect to the proper application of Section 409A of the Code, the Company reserves the right to make amendments to this Agreement as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A of the Code. In any case, the Participant shall be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed in connection with this Agreement (including any taxes and penalties under Section 409 of the Code), and neither the Company nor any Subsidiary shall have any obligation to indemnify or otherwise hold the Participant harmless from any or all of such taxes or penalties. | ||
(b) | This Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. It is expressly understood that the Committee is authorized to administer, construe and make all determinations necessary or appropriate to the administration of the Plan and this Agreement, all of which shall be binding upon the Participant. | ||
(c) | In accordance with Section 19 of the Plan, the Board may terminate, amend or modify the Plan. | ||
(d) | The Participant shall pay to the Company or make arrangements satisfactory to the Committee for payment of any federal, state and local taxes (including the Participants FICA obligation), whether domestic or foreign, required by law to be withheld on account of any event under this Agreement. | ||
The Participant acknowledges that the Company shall have the power and the right to deduct or withhold from the Participants compensation an amount sufficient to satisfy federal, state and local taxes (including the Participants FICA obligation), whether domestic or foreign, required by law to be withheld with respect to any event under this Agreement should the Participant fail to make timely payment of all taxes due. | |||
The Participant may elect, subject to the Plan, the approval of the Committee and any procedural rules adopted by the Committee, to satisfy the withholding |
8
requirement, in whole or in part, by having the Company withhold Common Shares issuable or deliverable hereunder having an aggregate Market Value per Share on the date the tax is to be determined equal to the amount required to be withheld. | |||
(e) | The Participant shall take all steps necessary to comply with all applicable provisions with respect to transfers of the Companys securities imposed by the Companys certificate of incorporation, bylaws and insider trading policies and federal and state securities laws, each as in effect from time to time, in exercising his or her rights under this Agreement. | ||
(f) | All obligations of the Company under the Plan and this Agreement shall be binding on any successor (whether direct or indirect, by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the business or assets of the Company. | ||
(g) | This Agreement shall be governed by and construed in accordance with the internal substantive laws of the State of Delaware. | ||
(h) | Notice hereunder shall be given to the Company at its principal place of business, and shall be given to the Participant at the address set forth below, or in either case at such address as one party may subsequently furnish to the other party in writing. | ||
(i) | If there is any inconsistency between the terms of this Agreement and the terms of a written employment agreement between the Participant and the Company or any Subsidiary relating to the earning or payment of the Performance Shares granted hereunder, the terms of this Agreement shall control. | ||
(j) | Notwithstanding any other provisions of this Agreement, the Company shall not be required to issue or deliver any Common Shares pursuant to this Agreement on a date on which such issuance or delivery would violate the Securities Act of 1933, as amended, or any other applicable federal or state securities laws. | ||
(k) | By accepting the grant of Performance Shares contemplated hereby, the Participant is deemed to be bound by the terms and conditions set forth in the Plan and this Agreement regardless of whether the Participant executes and delivers to the Company a copy hereof. | ||
(l) | For the avoidance of doubt, Performance Shares which are not vested and earned hereunder either (i) on the Certification Date based on the level of achievement of the Management Objectives set forth above or (ii) upon an event contemplated by Section 5 or 6 of this Agreement, shall be forfeited by the Participant on the Certification Date or the date of such event, as applicable (except as otherwise expressly provided). However, the Company shall have the right, at the sole discretion of the Committee, to determine that all or any portion of the Performance Shares that would otherwise be forfeited has been vested and earned. |
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(a) | Beneficial Owner or Beneficial Ownership shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act. | ||
(b) | Board or Board of Directors means the Board of Directors of the Company. | ||
(c) | Business Combination means a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another corporation or entity, or other similar transaction. | ||
(d) | Cause means (i) the Participants engaging in fraud, embezzlement, gross misconduct or any act of gross dishonesty with respect to the Company or its affiliates, (ii) the Participants habitual drug or alcohol use which impairs the ability of the Participant to perform his duties with the Company or its affiliates, (iii) the Participants indictment with respect to, conviction of, or plea of guilty or no contest to, any felony, or other comparable crime under applicable local law (except, in any event, for motor vehicle violations not involving personal injuries to third parties or driving while intoxicated), or the Participants incarceration with respect to any of the foregoing that, in each case, impairs the Participants ability to continue to perform his duties with the Company and its affiliates, or (iv) the Participants material breach of any written employment agreement or other agreement between the Company and the Participant, or of the Companys Code of Business Conduct, or failure by the Participant to substantially perform his or her duties for the Company which remains uncorrected or reoccurs after written notice has been delivered to the Participant demanding substantial performance and the Participant has had a reasonable opportunity to correct such breach or failure to perform. | ||
(e) | Change in Control means the occurrence on or after the date of this Agreement of any of the following events: |
(i) | the acquisition by any Person of Beneficial Ownership of 35% or more of the combined voting power of the then-outstanding Voting Stock of the Company; provided, however, that: |
(A) | for purposes of this Section 11(e)(i), the following acquisitions shall not constitute a Change in Control: (1) any acquisition of Voting Stock of the Company directly from the Company (x) pursuant to the POR or (y) that is approved by a majority of the Incumbent Directors, (2) any acquisition of Voting Stock of the Company by the Company or any Subsidiary, (3) any acquisition of Voting Stock of the Company by any employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary (other than any voluntary employee beneficiary association established in connection with the POR), and (4) any acquisition of Voting Stock of the Company by any Person pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 11(e)(iii) below; |
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(B) | if any Person acquires Beneficial Ownership of 35% or more of combined voting power of the then-outstanding Voting Stock of the Company as a result of a transaction described in clause (A)(1) of Section 11(e)(i) and such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of the Company representing 1% or more of the then-outstanding Voting Stock of the Company, other than in an acquisition directly from the Company pursuant to the POR, in an acquisition directly from the Company in a transaction that is approved by a majority of the Incumbent Directors or other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Stock are treated equally, such subsequent acquisition shall be deemed to constitute a Change in Control; | ||
(C) | a Change in Control will not be deemed to have occurred if a Person acquires beneficial ownership of 35% or more of the Voting Stock of the Company as a result of a reduction in the number of shares of Voting Stock of the Company outstanding unless and until such Person thereafter becomes the beneficial owner of any additional shares of Voting Stock of the Company representing 1% or more of the then-outstanding Voting Stock of the Company, other than in an acquisition directly from the Company pursuant to the POR, in an acquisition directly from the Company in a transaction that is approved by a majority of the Incumbent Directors or other than as a result of a stock dividend, stock split or similar transaction effected by the Company in which all holders of Voting Stock are treated equally; and | ||
(D) | if at least a majority of the Incumbent Directors determine in good faith that a Person has acquired beneficial ownership of 35% or more of the Voting Stock of the Company inadvertently, and such Person divests as promptly as practicable a sufficient number of shares so that such Person beneficially owns less than 35% of the Voting Stock of the Company, then no Change in Control shall have occurred as a result of such Persons acquisition; or |
(ii) | a majority of the Directors are not Incumbent Directors; or | ||
(iii) | the consummation of a Business Combination, unless, in each case, immediately following such Business Combination (A) all or substantially all of the individuals and entities who were the beneficial owners of Voting Stock of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than 60% of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination (including without limitation an entity which as a result of such transaction owns the Company or all or substantially all of the Companys assets either directly or through one or more subsidiaries), (B) no Person (other than the Company, such entity resulting from such Business |
11
Combination, any employee benefit plan (or related trust) sponsored or maintained by the Company, any Subsidiary or such entity resulting from such Business Combination (other than any voluntary employee beneficiary association established in connection with the POR) or any Person that immediately prior to such Business Combination owns, directly or indirectly, 35% or more of the Voting Stock of the Company so long as such Person does not at such time own, directly or indirectly, more than 1% of the securities of the other corporation or other entity involved in such Business Combination to be converted into or exchanged for shares of Voting Stock of the entity resulting from such Business Combination pursuant to such Business Combination)) beneficially owns, directly or indirectly, 35% or more of the combined voting power of the then outstanding shares of Voting Stock of the entity resulting from such Business Combination, and (C) at least a majority of the members of the Board of Directors of the entity resulting from such Business Combination were Incumbent Directors at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or | |||
(iv) | approval by the stockholders of the Company of a complete liquidation or dissolution of the Company, except pursuant to a Business Combination that complies with clauses (A), (B) and (C) of Section 11(e)(iii). |
(f) | Director shall mean a member of the Board of Directors of the Company. | ||
(g) | Employee of the Company means an officer of the Company or one or more of its Subsidiaries. | ||
(h) | Exchange Act means the Securities Exchange Act of 1934, as amended from time to time, or any successor act thereto. | ||
(i) | Good Reason means, without a Participants consent, the occurrence of any of the following events which is not cured by the Company within ten (10) business days following the Participants written notice to the Company of the event constituting Good Reason; provided, however, that, if such written notice is not received by the Company following the thirty (30) day period after the date on which the Participant first had knowledge of the occurrence of such event giving rise to Good Reason (or, in the case of multiple events, the latest to occur of such events), any such written notice shall not be effective and the Participant shall be deemed to have waived his/her right to terminate employment for Good Reason with respect to such event: |
(i) | Demotion, reduction in title, reduction in position or responsibilities, or change in reporting responsibilities or reporting level that is materially and adversely inconsistent with the Participants then position or the assignment of duties and/or responsibilities materially and adversely inconsistent with such position; or | ||
(ii) | Relocation of the Participants primary office location more than fifty (50) miles from the Participants then current office location; or |
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(iii) | Reduction of greater than 10% in the Participants then base salary or reduction of greater than 10% in the Participants then long term or short term incentive compensation opportunity or a reduction in the Participants eligibility for participation in the Companys benefit plans that is not commensurate with a similar reduction among similarly situated employees. |
(j) | Incumbent Directors means the individuals who, as of the date hereof, are Directors of the Company and any individual becoming a Director subsequent to the date hereof whose election, nomination for election by the Companys stockholders, or appointment was approved by a vote of at least two-thirds of the then Incumbent Directors (either by a specific vote or by approval of the proxy statement of the Company in which such person is named as a nominee for director without objection to such nomination); provided, however, that an individual shall not be an Incumbent Director if such individuals election or appointment to the Board occurs as a result of an actual or threatened election contest (as described in Rule 14a-12(c) of the Exchange Act) with respect to the election or removal of Directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board. | ||
(k) | Person shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a group as defined in Section 13(d) thereof. | ||
(l) | POR means the Second Amended Joint Plan of Reorganization of Kaiser Aluminum Corporation, Kaiser Aluminum & Chemical Corporation and Certain of Their Debtor Affiliates, as modified, filed pursuant to Section 1121(a) of Title 11 of the United States Code and confirmed by an order of the United States Bankruptcy Court for the District of Delaware entered on February 6, 2006, which confirmation was affirmed by an order of the United States District Court for the District of Delaware entered on May 11, 2006. | ||
(m) | Voting Stock means securities entitled to vote generally in the election of directors (or similar governing bodies). |
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Kaiser Aluminum Corporation |
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By: | ||||
Name: | ||||
Title: | ||||
Participants name and address: | ||||
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Management Objective:
|
The applicable Management Objective is average economic value added
(EVA) for 2011, 2012 and 2013 (Average 2011-2013 EVA). For each
such year, EVA will equal (1) pre-tax operating income of our core
Fabricated Products business, including corporate expenses for such
year (PTOI) less (2) 10% of net assets as of the end of the
immediately preceding year (Net Assets). In determining EVA for a particular year: |
(1) | Net Assets will equal total assets less total liabilities of our Consolidated financial statements, subject to adjustments to: |
| Remove the secondary aluminum and hedging business units (formerly Primary Products); | ||
| Remove discontinued operations and legacy environmental accruals; | ||
| Eliminate fresh start adjustments for PP&E value and intangible assets, including the write-up of pre-emergence goodwill; | ||
| Remove VEBA related assets and liabilities; | ||
| Exclude financing items; | ||
| Exclude capital expenditures in progress; | ||
| Add prorated value of capital projects and acquisitions larger than 1% of prior year Net Assets except to the extent necessary to avoid over-stating Net Assets; | ||
| Exclude income tax related assets and liabilities; | ||
| Exclude derivative assets or liabilities associated with Fabricated Products; and | ||
| Address other items as recommended by the Companys Chief Executive Officer and approved by our Committee; and |
(2) | PTOI will be adjusted to: |
| Exclude non-cash LIFO inventory charges (benefits) and respective non-cash metal gains (losses); | ||
| Exclude non-cash mark to market and lower of cost or market adjustments; | ||
| Add back depreciation associated with step-down in property, plant and equipment resulting from the implementation of fresh start accounting; |
| Amortize the following non-recurring activities over three calendar years with the first year being the year of the initial charge if the value exceeds one percent of Net Assets: |
| Restructuring charges; | ||
| Gains or losses resulting from asset dispositions; | ||
| Labor stoppage costs; and | ||
| Asset impairment charges, |
| Exclude discontinued operations and legacy environmental income and expenses | ||
| Exclude VEBA income and expense | ||
| Address other items as recommended by the Companys Chief Executive Officer and approved by our Committee. |
The 2011 2013 average annual EVA target is an amount specified by the Committee. The payout factor is calculated by dividing the average annual EVA of each year of the three year performance period by the average annual target | ||
The threshold for vesting performance shares is an annual average EVA of zero. Payout at the target level (a payout factor of 1) is 50% of the performance shares, 100% of the performance shares are earned at 2X the average annual EVA target. | ||
Determination of
Number of Performance Shares Which Are Earned: |
The number of Performance Shares which are earned will be determined as follows: |
| Following the end of each of 2011, 2012 and 2013, the Committee will certify EVA for such year based on the Companys financial statements. | ||
| Following the end of 2013, the Committee will also certify (1) the Average 2011-2013 EVA and (2) Average 2011-2013 EVA as a percentage of Target Average 2011-2013 EVA (the Payout Multiplier). | ||
| The number of Performance Shares which are earned will equal the product (rounded down to the nearest whole number) of (1) one-half of the number of Performance Shares granted hereunder (the Target Performance Shares) and (2) the Payout Multiplier; provided, however, such number will not exceed the number of Performance Shares granted hereunder. |
The Committee will certify the Average 2011-2013 EVA and the Payout Multiplier not later than March 15, 2014. | ||
Administrative
Provisions:
|
Additional administrative provisions are reflected in the terms of the applicable grant documents. |