Exhibit 10.1
STOCK OPTION GRANT
PURSUANT TO THE KAISER
1997 OMNIBUS STOCK INCENTIVE PLAN
1) GRANT OF STOCK OPTION. Kaiser Aluminum Corporation
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("KAC") and Kaiser Aluminum & Chemical Corporation ("KACC"),
both Delaware corporations (collectively, the "Company"), hereby
evidence that the Company has granted to Jack A. Hockema
('Optionee") the right, privilege and option as herein set forth
(the "Stock Option") to purchase 28,184 shares of common stock,
$.01 par value per share, of KAC (as more fully defined in
Attachment I - Definitions Applicable to Certain Terms , which
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is incorporated herein and made a part hereof, the "Option
Shares") in accordance with the terms of this document (this
"Stock Option Grant").
The Stock Option is granted pursuant to the Kaiser 1997
Omnibus Stock Incentive Plan (the "Plan") and is subject to the
provisions of the Plan, a copy of which has been furnished to
Optionee and which is hereby incorporated in and made a part of
this Stock Option Grant, as well as to the provisions of this
Stock Option Grant. By acceptance of the Stock Option, Optionee
agrees to be bound by all of the terms, provisions, conditions
and limitations of the Plan and this Stock Option Grant.
All capitalized terms used herein shall have the meanings
provided in the Plan document unless otherwise specifically
provided in this Stock Option Grant, including Attachment I. The
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Stock Option is a Nonqualified Stock Option under the Plan and
is not intended to qualify as an "incentive stock option" within
the meaning of Section 422 of the Code.
All Option Shares, when issued to Optionee upon the exercise
of this Stock Option, shall be fully paid and nonassessable.
2) OPTION TERM. Subject to earlier termination as
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provided herein, or in the Plan, the Stock Option shall expire
on February 3, 2010 ("Expiration Date"). The period during which
the Stock Option is in effect shall be referred to as the "Option
Period".
3) OPTION EXERCISE PRICE. The exercise price per Option
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Share (including any Attributable Securities, as defined in
Attachment I) (the "Option Price") at which Optionee may purchase
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such Option Shares subject to the Stock Option shall be equal to
the remainder of (i) $6.0938 per Option Share minus (ii) the
amount per Option Share of Distributed Cash Value (as defined in
Attachment I) determined as of the date of exercise. Such Option
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Price shall also be subject to adjustment as provided in the
Plan and this Stock Option Grant. The Company shall notify
Optionee within thirty (30) days of each change in the Option
Price.
4) VESTING. The Stock Option may be exercised during the
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Option Period only to the extent it has become a "Vested
Option." Subject to the terms of this Paragraph 4 and Paragraphs
6 and 7 below, the Stock Option shall become a Vested Option as
to one third of the Option Shares as of 12:01 a.m. Houston time
on February 3, 2001, as to an additional one third of the Option
Shares as of 12:01 a.m. Houston time on February 3, 2002, and as
to an additional one third of the Option Shares as of 12:01 a.m.
Houston time on February 3, 2003. However, if as of any such
vesting date Shares (as defined in Attachment I) have not traded
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at $10 or more per Share (as reported on the consolidated tape
of the New York Stock Exchange or other principal exchange on
which such securities are traded) for a period of at least 20
consecutive Trading Days during the Option Period, such vesting
date will instead be the date such condition has been met, or
February 3, 2009, whichever occurs earlier.
5) METHOD OF EXERCISE. To exercise the Stock Option,
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Optionee shall deliver written notice to the Company stating the
number of Option Shares with respect to which the Stock Option is
being exercised together with payment for such Option Shares.
Payment shall be made (i) in cash or its equivalent, (ii) by
tendering previously acquired Shares having an aggregate Fair
Market Value (as defined in the Plan) at the time of exercise
equal to the total Option Price (provided that the Shares which
are tendered must have been held by Optionee for at least six
months prior to their tender to satisfy the Option Price) or
(iii) by a combination of (i) and (ii).
6) TERMINATION OF OPTIONEE'S EMPLOYMENT. Termination of
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Optionee's employment as a regular full-time salaried employee
of KAC, a Subsidiary (as defined in Attachment I), or any branch,
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unit or division of KAC or any Subsidiary ("Employment") shall
affect Optionee's rights under the Stock Option as follows:
(1) Termination by the Company for Cause. If
Optionee's Employment is terminated by the Company for
Cause, then (i) the Option Period shall not terminate, and
(ii) the Stock Option shall be exercisable from the date
Employment is terminated through and including the end of
the Option Period, only to the extent it has become a Vested
Option as of the date Employment is terminated. Optionee shall
be terminated for "Cause" if terminated as a result of
Optionee s breach of Optionee's written employment or other
engagement agreement (if any), or if the Board of Directors
determines that Optionee is being terminated as a result of
misconduct, dishonesty, disloyalty, disobedience or action
that might reasonably be expected to injure KAC or any
Subsidiary or their business interests or reputation.
(2) Termination by the Company Other than for Cause.
If Optionee's Employment is terminated by the Company other
than as a result of termination of Optionee's Employment for
Cause, then (i) the Option Period shall not terminate and,
(ii) the Stock Option shall be exercisable as to all Option
Shares from the date Employment is terminated through and
including the end of the Option Period.
(3) Termination by Death. If Optionee's Employment is
terminated as a result of death, then (i) the Option Period
shall terminate upon the earlier of the Expiration Date or
three years from the date of death, and (ii) the Stock
Option shall be exercisable as to all Option Shares from
date of death through and including the end of such Option
Period.
(4) Termination by Retirement. If Optionee's
Employment is terminated as a result of Optionee's
retirement under any of the early or normal retirement
provisions of the Kaiser Aluminum Salaried Employees
Retirement Plan, then (i) the Option Period shall not
terminate, and (ii) the Stock Option shall be exercisable
from the date Employment is terminated through and including
the end of the Option Period, only to the extent it has
become a Vested Option as of the date Employment is
terminated.
(5) Termination by Employee. If Optionee's Employment
is terminated other than as a result of termination of
Optionee's Employment by the Company, death or retirement,
then (i) the Option Period shall not terminate, and (ii) the
Stock Option shall be exercisable from the date Employment
is terminated through and including the end of the Option
Period, only to the extent it has become a Vested Option as
of the date Employment is terminated.
The Stock Option may be exercised by Optionee or, in the
case of death, by the executor or administrator of Optionee's
estate, or the person or persons to whom Optionee's rights under
the Stock Option shall pass by will or by the applicable laws of
descent and distribution, or in the case of Disability, by
Optionee's personal representative.
7) CHANGE OF CONTROL. If KAC experiences a Change in
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Control (as defined in Attachment I), then (i) the Option Period
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shall terminate upon the earlier of the Expiration Date or one
year from the date of the Change in Control, and (ii) the Stock
Option shall immediately become a Vested Option, exercisable as
to all Option Shares through and including the end of such Option
Period.
8) REORGANIZATIONS; REPURCHASE OF STOCK OPTION.
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1. Freedom to Reorganize the Company and
Subsidiaries. The existence of the Stock Option shall not
affect in any way the right or power of the Company and its
Subsidiaries or the issuers of Attributable Securities or
its or their stockholders to make or authorize any and all
Distribution Events (as defined in Attachment I) and any and
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all other adjustments, recapitalizations, reorganizations
or other changes in the capital structure or business of the
Company or its Subsidiaries or the issuers of Attributable
Securities, any and all issuances of bonds, debentures,
common stock, preferred or prior preference stock, warrants,
rights or other securities, whether or not affecting the
Option Shares or the rights thereof, any dissolution or
liquidation of the Company or any Subsidiary, any sale or
other divestiture or transfer of all or any part of the
assets or business of the Company or any Subsidiary or any
issuer of Attributable Securities and any and all other
corporate acts or proceedings, whether of a similar
character or otherwise (collectively, including any
Distribution Events, collectively, "Reorganizations").
2. Spin-Offs. If the Board of Directors authorizes
any Distribution Event or other Reorganization as a result
of which holders of Shares become entitled, in their
capacities as holders, to receive Marketable Securities (as
defined in Attachment I), the Board of Directors shall, to
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the extent reasonably practicable, cause the Company to
provide for or require: (i) that the issuer(s) of such
Marketable Securities shall undertake to issue and deliver
to Optionee, upon any subsequent exercise of the Stock
Option, such Marketable Securities as Optionee would have
received if Optionee had so exercised the Stock Option prior
to such Distribution Event or other Reorganization and had
participated therein (and in any and all subsequent
Distribution Events or other Reorganizations) to the maximum
extent allowed to holders of Shares (including any
Attributable Securities) outstanding at the time of such
Distribution Event or other Reorganization; (ii) that such
Marketable Securities shall be so issued and delivered to
Optionee pursuant to an effective registration statement
under the Securities Act of 1933, as amended, or otherwise
free of any restriction on resale thereof by Optionee, other than
any restriction on resale arising from Optionee's being
an Affiliate or Insider (as such terms are defined in the
Plan) of such issuer; (iii) that such Marketable Securities
shall be so issued and delivered without any agreement,
condition, payment or other consideration being required of
Optionee or the Company; (iv) that such issuer(s) shall at
all times reserve for issuance a sufficient amount of such
Marketable Securities to fulfill all obligations
contemplated hereunder; and (v) that upon each such
issuance, such Marketable Securities shall be duly
authorized, validly issued, fully paid and nonassessable.
The Company shall also provide for or require that: (x) in
the event any such issuer shall fail or be unable to issue
and deliver to Optionee any Marketable Securities as
provided in the preceding sentence, such issuer shall be
obligated, in lieu of issuing and delivering such Marketable
Securities, to pay to Optionee in cash, immediately upon
exercise of the Stock Option, the Market Value of such
Marketable Securities determined as of the date of exercise
of the Stock Option; and (y) in the event the Company is
obligated to make a cash payment to Optionee pursuant to
Paragraph 9(b), such issuer shall be obligated to reimburse
the Company for a part of such payment proportionate to the
Distributed Cash Value attributable to Attributable
Securities of such issuer compared to the total amount of
Distributed Cash Value.
3. Right to Repurchase Stock Option. Upon receipt of
a notice of exercise, the Company shall have the right but
not the obligation to repurchase, and thereby to satisfy all
of the Company's obligations under, the Stock Option as to
the number of Option Shares as to which the Stock Option is
exercised by paying Optionee in cash an amount, net of any
taxes required to be withheld, equal to the sum of (A) the
product of (i) the number of Option Shares as to which the
Stock Option is exercised multiplied by (ii) the amount,
determined as of such date of exercise, equal to the
remainder of (x) the Market Value of one Option Share minus
(y) the Option Price plus (B) the amount of cash, if any,
payable to Optionee pursuant to Paragraph 9(b).
9) ADJUSTMENTS.
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(a) In the event of any one or more Distribution
Events or other Reorganizations affecting the Stock Option
not already adjusted for under Paragraph 8, the Option Price
and the number of Option Shares subject to the Stock Option
shall be appropriately adjusted by the Board of Directors.
In addition, the Board of Directors shall, as permitted by
Section 3.2, Section 16.2 and other provisions of the Plan,
construe and interpret the Plan and this Stock Option Grant
and make all appropriate adjustments in order to prevent
dilution or enlargement of the benefits or potential benefits
intended to be made available to Optionee under
this Stock Option Grant and the Plan.
(b) Without limitation to the foregoing, in the event
that the amount of Distributed Cash Value as of any date of
exercise of the Stock Option is equal to or greater than $
6.0938 per Option Share, the Option Price shall be deemed to
be $.01 per Option Share and the Company, in addition to
issuing Option Shares to Optionee, shall pay to Optionee in
respect of each Option Share as to which the Stock Option is
exercised an amount of cash equal to the remainder of (i)
such amount of Distributed Cash Value per Option Share minus
(ii) $6.0938.
10) NO RIGHTS IN OPTION SHARES. Optionee shall have no
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rights as a stockholder in respect of Option Shares until such
Optionee becomes the holder of record of such Option Shares.
11) OPTION SHARES RESERVED. The Company shall at all times
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during the Option Period reserve and keep available such number
of Shares as will be sufficient to satisfy the requirements of
this Stock Option.
12) NONTRANSFERABILITY OF STOCK OPTION. The Stock Option
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granted pursuant to this Stock Option Grant is not transferable
other than by will, the laws of descent and distribution or by
qualified domestic relations order. The Stock Option will be
exercisable during Optionee's lifetime only by Optionee or by
Optionee's guardian or legal representative. No right or benefit
hereunder shall in any manner be liable for or subject to any
debts, contracts, liabilities, or torts of Optionee.
13) AMENDMENT AND TERMINATION. No amendment or termination
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of the Stock Option shall be made by the Board of Directors or
the Committee (as defined in the Plan) at any time without the
written consent of Optionee. No amendment of the Plan will
adversely affect the rights, privileges and options of Optionee
under the Stock Option without the written consent of Optionee.
14) NO GUARANTEE OF EMPLOYMENT. The Stock Option shall not
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confer upon Optionee any right with respect to continuance of
Employment or other service with the Company or any Subsidiary or
Affiliate, nor shall it interfere in any way with any right the
Company or any Subsidiary or Affiliate would otherwise have to
terminate such Optionee's Employment or other service at any
time.
15) WITHHOLDING OF TAXES. The Company shall have the right
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to deduct or withhold, or require Optionee to remit to the
Company, an amount sufficient to satisfy all federal, state and
local taxes, domestic or foreign, required by law or regulation
to be withheld with respect to any taxable event arising under
this Stock Option Grant or any exercise or other action or event
hereunder.
16) NO GUARANTEE OF TAX CONSEQUENCES. Neither the Company
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nor any Subsidiary or Affiliate, nor the Board of Directors or
any Committee, makes any commitment or guarantee that any federal
or state tax treatment will apply or be available to any person
eligible for benefits under the Stock Option.
17) SEVERABILITY. In the event that any provision of the
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Stock Option shall be held illegal, invalid, or unenforceable
for any reason, such provision shall be fully severable, but
shall not affect the remaining provisions of the Stock Option,
and the Stock Option shall be construed and enforced as if the
illegal, invalid, or unenforceable provision had never been
included herein.
18) GOVERNING LAW. The Stock Option shall be construed in
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accordance with the laws of the State of Texas to the extent
federal law does not supersede and preempt Texas law.
Executed effective as of the 3rd day of February 2000.
"COMPANY"
KAISER ALUMINUM CORPORATION
By: /S/ Raymond J. Milchovich
Printed Name: Raymond J. Milchovich
Title: President and CEO
KAISER ALUMINUM & CHEMICAL CORPORATION
By: /S/ Raymond J. Milchovich
Printed Name: Raymond J. Milchovich
Title: President and CEO
Accepted effective as of the 3rd day of February 2000.
"OPTIONEE"
/S/ Jack A. Hockema
Jack A. Hockema
Title:
ATTACHMENT I
TIME-BASED STOCK OPTION GRANT
DEFINITIONS APPLICABLE TO CERTAIN TERMS
"AFFILIATE" - see Section 2.1 of the Plan.
"ATTRIBUTABLE SECURITIES" - see the definition of "Option Share".
"CAUSE" - see Paragraph 6(1) of this Stock Option Grant.
"CHANGE IN CONTROL" means (a) the sale, lease, conveyance, or
other disposition of all or substantially all of KAC's assets as
an entirety or substantially as an entirety to any person,
entity, or group of persons acting in concert other than in the
ordinary course of business; (b) any transaction or series of
related transactions (as a result of a tender offer, merger,
consolidation or otherwise) that results in any person (as
defined in Section 13(h)(8)(E) under the Securities Exchange Act
of 1934) becoming the beneficial owner (as defined in Rule 13d-3
under the Securities Exchange Act of 1934), directly or
indirectly, of more than 50% of the aggregate voting power of all
classes of common equity of KAC, except if such Person is (i) a
Subsidiary, (ii) an employee stock ownership plan for employees
of KAC or (iii) a company formed to hold KAC's common equity
securities and whose shareholders constituted, at the time such
company became such holding company, substantially all the
shareholders of KAC; or (c) a change in the composition of KAC's
Board of Directors over a period of thirty-six (36) consecutive
months or less such that a majority of the then current Board
members ceases to be comprised of individuals who either (x) have
been Board members continuously since the beginning of such
period, or (y) have been elected or nominated for election as
Board members during such period by at least a majority of the
Board members described in clause (x) who were still in office at
the time such election or nomination was approved by the Board.
"DISABILITY" - see Section 2.12 of the Plan.
"DISTRIBUTED CASH VALUE" means, as of any determination date, the
aggregate amount of cash (other than regular quarterly cash
dividends, if any) plus the aggregate value, as determined by the
Board of Directors as of the date of distribution, of all
property (other than cash and Attributable Securities)
distributed or set aside for distribution to the holder of one
Original Share and all Attributable Securities, if any, during
the period commencing February 3, 2000 and ending on the
determination date.
"DISTRIBUTION EVENTS" means any and all distributions, dividends,
recapitalizations, forward or reverse splits, reorganizations,
mergers, consolidations, spin-offs, combinations, repurchases,
share exchanges, or other similar or substantially equivalent
corporate transactions or events in which the holder of a
security becomes, as such, entitled to receive cash, securities
or other property in addition to or in exchange for or upon
conversion of such security.
"EMPLOYMENT" - see Paragraph 6 of this Stock Option Grant.
"INSIDER" - see Section 2.19 of the Plan.
"KAC" - see Paragraph 1 of this Stock Option Grant.
"KACC" - see Paragraph 1 of this Stock Option Grant.
"MARKET VALUE" means, as of any Trading Day, the average of the
highest and lowest sales prices as reported by the consolidated
tape (or, if such prices are not quoted, the average of the
quoted closing bid and asked prices) on such Trading Day for one
Option Share (including, as applicable, the Market Values of any
Attributable Securities). In the event that sales prices or
closing bid and asked prices are not quoted on a particular
Trading Day, the Market Value for that Trading Day shall be
deemed to be the Market Value for the immediately preceding
Trading Day. In the event that any Attributable Security shall
cease to be a Marketable Security, it shall thereupon be deemed
to have no further Market Value and shall be deemed instead to
have, as of the date it ceases to be a Marketable Security, such
Distributed Cash Value as shall be determined by the Board of
Directors.
"MARKETABLE SECURITIES" means securities (a) of a class that is
registered under the Securities Exchange Act of 1934, as amended,
(b) for which sales prices or bid and asked prices are regularly
quoted and (c) that, if issued and delivered to Optionee upon
exercise of the Stock Option, would not be subject to any
restriction on resale, other than any restriction arising from
Optionee's being an Affiliate or Insider (as such terms are
defined in the Plan) of the issuer of such Marketable Securities.
"OPTION PERIOD" - see Paragraph 2 of this Stock Option Grant.
"OPTION PRICE" - see Paragraph 3 of this Stock Option Grant.
"OPTION SHARE" means (a) one Share as constituted on February 3,
2000 (an "Original Share") and (b) in the event of any one or
more successive Distribution Events, all Marketable Securities
("Attributable Securities") into which or for which an Original
Share or any Attributable Securities may be converted or
exchanged or that a stockholder may have the right to receive in
respect of such Original Share or Attributable Securities.
"OPTIONEE" - see Paragraph 1 of this Stock Option Grant.
"ORIGINAL SHARE" - see the definition of Option Share .
"PLAN" - see Paragraph 1 of this Stock Option Grant.
"REORGANIZATION" - see Paragraph 8(1) of this Stock Option Grant.
"SHARE" means one share of common stock, par value $.01 per
share, of KAC.
"STOCK OPTION' - see Paragraph 1 of this Stock Option Grant.
"SUBSIDIARY" - see Section 2.32 of the Plan. For avoidance of
doubt, KACC shall be considered a Subsidiary of KAC so long as
KAC has a majority voting interest in KACC, and KAC shall be
considered to have a majority voting interest whether it holds
such interest directly or indirectly through one or more
Subsidiaries.
"TRADING DAY" means as to an Option Share (including any
Attributable Securities) a day when the New York Stock Exchange
(or other principal securities exchange, including NASDAQ, on
which such securities are traded) is open.