Kaiser Aluminum Corporation
12/11/2024 | Press release | Distributed by Public on 12/11/2024 15:31
Management Change/Compensation Form 8 K
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On December 5, 2024, the Compensation Committee of the Board of Directors of Kaiser Aluminum Corporation (the "Company") approved the Kaiser Aluminum Corporation Key Employee Severance Benefit Plan (the "Plan"), which became effective on December 5, 2024.
The general intent of the Plan is to streamline the severance protection offered to certain key employees and replace the individual agreements that the Company has in place with certain of its executive officers (excluding our Chief Executive Officer). The Company is currently party to individual severance agreements or change in control agreements with each of Keith Harvey (our Chief Executive Officer), John Donnan (our Executive Vice President, Chief Administrative Officer and General Counsel), and Neal West (our Executive Vice President and Chief Financial Officer), which set forth the terms of their severance protection in the event of termination in connection with a change in control. Mr. Harvey's severance agreement also provides severance benefits for a qualifying termination outside of a change in control. In addition, the Company sponsors a severance plan which provides severance benefits outside of a change of control for salaried employees, including Messrs. Donnan, West, Jason Walsh (our Executive Vice President - Manufacturing) and Raymond Parkinson (our Senior Vice President - Advanced Engineering and Innovation). Mr. Harvey's severance agreement will not be replaced by the Plan, and Mr. Harvey will not be a participant in the Plan. The Plan is intended to replace the individual change of control agreements entered with Messrs. Donnan and West and the severance benefits provided under the salaried employee severance plan to Messrs. Donnan, West, Walsh and Parkinson.
Under the Plan, participants are entitled to certain predetermined payments in the event of certain qualifying terminations of employment, as outlined below.
If a participant's employment is terminated by the Company for any reason other than death, disability, or "cause" (as defined in the Plan), and such termination does not occur within 90 days prior to or 24 months after a "change in control" (as defined in the Plan), then the participant is eligible to receive:
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A lump sum payment equal to the sum of (i) the participant's then-current base salary and (ii) the participant's most recent short-term incentive target paid within five business days after the participant's release (described below) becomes effective;
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A prorated short-term incentive award for the year of termination, calculated based on actual performance and paid at the same time such bonuses are otherwise paid to active key employees; and
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Reimbursement for the portion of post-termination health insurance coverage premiums in excess of the amount the participant was required to pay as a monthly premium for participation in our plans immediately prior to termination, for up to 12 months post-termination.
If the participant's employment is terminated by the Company for any reason other than death, disability, or cause, or by the participant for "good reason" (as defined in the Plan), and in each case, such qualifying termination occurs within 90 days prior to or within 24 months after a change in control, then the participant is eligible to receive:
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A lump sum payment equal to the two times the sum of (i) the participant's then-current base salary (or, if higher, the participant's annual base salary in effect within the six months preceding the change in control) and (ii) the participant's most recent short-term incentive target, paid within five business days after the participant's release becomes effective;
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A prorated short-term incentive award for the year of termination, calculated based on achievement of a target level of performance and paid within five business days after the participant's release becomes effective; and
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Reimbursement for the portion of post-termination health insurance coverage premiums in excess of the amount the participant was required to pay as a monthly premium for participation in our plans immediately prior to termination, for up to 24 months post-termination.
If the payments or benefits payable under the Plan would be subject to the excise tax imposed under Section 4999 of the Internal Revenue Code of 1986, as amended, then those payments or benefits will be reduced if such reduction would result in a higher net after tax benefit to the participant.
Each participant must execute and deliver an effective release and waiver of claims and continue to comply with any applicable restrictive covenants in order to receive the payments and benefits provided for under the Plan. The Company can clawback any portion of the payments or benefits previously paid (to the fullest extent permitted by law) if the participant breaches the release or the restrictive covenants.
The foregoing description of the Plan is qualified in its entirety by reference to the full text of the Plan, which is filed as Exhibit 10.1 to this Current Report on Form 8-K.