-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Tm6AbV/+ofMksnkmOPb0j8U0FiSaRec40BHgdDaaf1QlbSixeMXFS8WopdmY8ysh 0+MV7LU0htbhI5mELFZ/Tg== 0000905722-96-000007.txt : 19960814 0000905722-96-000007.hdr.sgml : 19960814 ACCESSION NUMBER: 0000905722-96-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960731 FILED AS OF DATE: 19960813 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HUNTCO INC CENTRAL INDEX KEY: 0000905722 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 431643751 STATE OF INCORPORATION: MO FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-13600 FILM NUMBER: 96610615 BUSINESS ADDRESS: STREET 1: 14323 SOUTH OUTER FORTY STREET 2: STE 600 N CITY: TOWN & COUNTRY STATE: MO ZIP: 63017 BUSINESS PHONE: 3148780155 MAIL ADDRESS: STREET 1: 14323 S OUTER FORTY STREET 2: STE 600N CITY: TOWN & COUNTRY STATE: MO ZIP: 63017 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 1996, or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ------------------- ----------------------- Commission File Number: 1-13600 ------- HUNTCO INC. ------------------------------------------------------ (Exact name of registrant as specified in its charter) MISSOURI 43-1643751 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 14323 SOUTH OUTER FORTY, SUITE 600N, TOWN & COUNTRY, MISSOURI 63017 -------------------------------------------------------------------- (Address of principal executive offices) (314) 878-0155 -------------- (Registrant's telephone number, including area code) NOT APPLICABLE ---------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No As of August 12, 1996, the number of shares outstanding of each class of the Registrant's common stock was as follows: 5,292,000 shares of Class A common stock and 3,650,000 shares of Class B common stock. HUNTCO INC. INDEX PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets July 31, 1996 (Unaudited) and April 30, 1996 (Audited) Condensed Consolidated Statements of Income Three Months Ended July 31, 1996 and 1995 (Unaudited) Condensed Consolidated Statements of Cash Flows Three Months Ended July 31, 1996 and 1995 (Unaudited) Notes to Condensed Consolidated Financial Statements (Unaudited) Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K PART I. FINANCIAL INFORMATION ----------------------------------- Item 1. Financial Statements ----------------------------------- HUNTCO INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands)
July 31, April 30, 1996 1996 ---------- ---------- (unaudited) (audited) ASSETS Current assets: Cash $ 2,128 $ 2,737 Accounts receivable, net 37,619 36,804 Inventories 74,244 53,964 Other current assets 2,789 1,926 -------- -------- 116,780 95,431 Property, plant and equipment, net 128,892 120,338 Goodwill 4,929 5,001 Other assets 1,540 1,667 -------- -------- $252,141 $222,437 ======== ======== LIABILITIES & SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $ 35,868 $ 29,003 Accrued expenses 3,104 3,934 Current maturities of long-term debt 189 189 -------- -------- 39,161 33,126 -------- -------- Long-term debt 94,019 73,066 Deferred income taxes 5,293 4,879 -------- -------- 99,312 77,945 -------- -------- Shareholders' equity: Preferred stock (issued and outstanding, none) - - Common stock: Class A (issued and outstanding, 5,292) 53 53 Class B (issued and outstanding, 3,650) 37 37 Additional paid-in-capital 86,567 86,567 Retained earnings 27,011 24,709 -------- -------- 113,668 111,366 -------- -------- $252,141 $222,437 ======== ======== See Accompanying Notes to Condensed Consolidated Financial Statements
HUNTCO INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (unaudited, in thousands, except per share amounts)
Three Months Ended July 31, 1996 1995 ------- ------- Net sales $78,430 $55,106 Cost of sales 69,437 50,332 ------- ------- Gross profit 8,993 4,774 Selling, general and administrative expenses 3,631 2,995 ------- ------- Income from operations 5,362 1,779 Other income (expense): Interest, net (1,201) (328) ------- ------- Income before income taxes 4,161 1,451 Provision for income taxes 1,591 545 ------- ------- Net income $ 2,570 $ 906 ======= ======= Earnings per share $ .29 $ .10 ===== ===== Weighted average common shares outstanding 8,953 8,941 ===== ===== See Accompanying Notes to Condensed Consolidated Financial Statements
HUNTCO INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in thousands)
Three Months Ended July 31, 1996 1995 ------- ------- Cash flows from operating activities: Net income $ 2,570 $ 906 ------- ------- Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and amortization 1,944 1,160 Other (28) - Decrease (increase) in: accounts receivable (816) 2,251 inventories (20,280) 16,813 other current assets (861) (201) other assets 65 (541) Increase (decrease) in: accounts payable 6,865 (16,723) accrued expenses (830) (190) non-current deferred taxes 413 33 ------- ------- Total adjustments (13,528) 2,602 ------- ------- Net cash provided (used) by operations (10,958) 3,508 ------- ------- Cash flows from investing activities: Acquisition of property, plant and equipment (10,403) (8,152) Proceeds from sale of property, plant and equipment 67 - ------- ------- Net cash used by investing activities (10,336) (8,152) ------- ------- Cash flows from financing activities: Net proceeds from newly-issued debt 21,000 50,000 Payments on long-term debt (47) (47,138) Common stock dividends (268) (224) ------- ------- Net cash provided by financing activities 20,685 2,638 ------- ------- Net (decrease) in cash (609) (2,006) Cash, beginning of period 2,737 3,566 ------- ------- Cash, end of period $ 2,128 $ 1,560 ======= ======= See Accompanying Notes to Consolidated Financial Statements
HUNTCO INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share amounts) ----------------------------------------------------------- 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The condensed consolidated balance sheet as of July 31, 1996 and the condensed consolidated statements of income and of cash flows for the three months ended July 31, 1996 and 1995 have been prepared by Huntco Inc. (the "Company") without audit. In the opinion of management, all adjustments (which include only normal, recurring adjustments) necessary to present fairly the financial position at July 31, 1996, and the results of operations and cash flows for the interim periods presented have been made. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted where inapplicable. A summary of the significant accounting policies followed by the Company is set forth in Note 1 to the Company's consolidated financial statements included within Item 8 to the Company's annual report on Form 10-K (the "Form 10-K"), which Form 10-K was filed with the Securities and Exchange Commission on July 26, 1996. The condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and notes thereto for the year ended April 30, 1996 included in the aforementioned Form 10-K. The results of operations for the period ended July 31, 1996 are not necessarily indicative of the operating results for the full year. 2. INVENTORIES Inventories consisted of the following as of:
July 31, April 30, 1996 1996 ------- -------- Raw materials $59,655 $39,426 Work in process 68 91 Finished goods 14,521 14,447 ------- ------- $74,244 $53,964 ======= =======
The Company classifies its inventory of cold rolled steel coils as finished goods. These cold rolled coils can either be sold as master coils, without further processing, or may be slit, blanked or cut-to-length by the Company prior to final sale. 3. DIVIDENDS The Company's Board of Directors declared a dividend of $.035 per share on its shares of Class A common stock and Class B common stock for shareholders of record on August 26, 1996, payable on September 13, 1996. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations - --------------------------------------------------------------------------- We encourage those who make use of any forward-looking data found herein to make reference to the discussion found under the title "Risk Factors - 1997 Forecast" included within Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations, of the Company's Annual Report on Form 10-K for the year ended April 30, 1996, as filed with the Securities and Exchange Commission on July 26, 1996. RESULTS OF OPERATIONS Net sales were $78.4 million, an increase of 42.3% in comparison to the prior year's first quarter net sales of $55.1 million. The Company attributes the increase in net sales to higher levels of tons processed, primarily at its cold rolling operation at its Blytheville facility, and to lower tolling tons expressed as percentage of total tons processed and sold. The Company processed and shipped a record 231,309 tons of steel in the quarter ended July 31, 1996, an increase of 34.0% in comparison to the quarter ended July 31, 1995. Approximately 23.3% of the tons processed in the first quarter of fiscal 1997 represented customer-owned material processed on a per ton, fee basis, versus a tolling percentage of 32.6% in the prior year first quarter. The Company sold 40,241 tons of cold rolled products during the quarter ended July 31, 1996, which compares to 5,687 tons in the prior year first quarter. Reflecting lower raw material costs (i.e. lower hot rolled steel prices charged by the Company's suppliers), average per ton selling values declined approximately 6.0% in the quarter ended July 31, 1996 when compared to average per ton selling values for the quarter ended July 31, 1995. Gross profit expressed as a percentage of net sales was 11.5% for the quarter ended July 31, 1996, which compares to 8.7% for the quarter ended July 31, 1995. Gross profit in the first quarter of the prior year was negatively affected by declining steel prices. As a result of competitive market circumstances, the Company was forced to lower its selling prices in advance of receiving lower cost raw materials during the first quarter of fiscal 1996. Such market factors were not in place during the first quarter of fiscal 1997. During the quarter ended July 31, 1996, the Company successfully commenced operations at its new facility in Gallatin County, Kentucky. The Company also substantially completed the relocation of its metal stamping operation from Springfield, Missouri to a new plant at the Blytheville facility, where it also installed and began operating slitting and blanking lines which will be used to process cold rolled and light gauge pickled and oiled steel both for stamping applications and direct commercial sales. Selling, general and administrative ("SG&A") expenses of $3.6 million reflect an increase of $.6 million from the prior year's first quarter. However, SG&A expenses declined as a percentage of net sales from 5.4% during the first quarter of fiscal 1996 to 4.6% of net sales during the first quarter of fiscal 1997. The increase in SG&A expenses is attributable to the higher level of business activity conducted throughout the Company, including overhead expenses related to the Company's cold rolling operation that was placed in service on August 1, 1995. Income from operations was $5.4 million in the quarter ended July 31, 1996, an increase of $3.6 million in comparison to income from operations of $1.8 million as reported for the corresponding period of the prior year. This increase reflects the factors discussed in the preceding paragraphs. Net interest expense of $1.2 million and $.3 million was incurred during the quarters ended July 31, 1996 and 1995, respectively. This increase reflects borrowings to support higher working capital levels, as well as lower capitalized interest for fiscal 1997 versus fiscal 1996. The Company capitalized $.4 million of interest costs to construction in progress in the quarter ended July 31, 1996, versus $.9 million in the comparable period of the prior year. The effective income tax rate experienced by the Company was 38.2% in the first quarter of fiscal 1996, which approximates the 37.6% and 38.8% effective income tax rates recognized during the prior year's first quarter and full year, respectively. Net income for the quarter was 2.6 million, or $.29 per share, which compares to net income of $.9 million, or $.10 per share in the prior year's first quarter. This increase reflects the factors discussed in the preceding paragraphs. LIQUIDITY AND CAPITAL RESOURCES The Company used $10.4 million and $8.2 million of cash during the quarters ended July 31, 1996 and 1995, respectively, to acquire property, plant and equipment, as expenditures continue to be made in conjunction with the Company's capital expansion projects -- most significantly the new Gallatin County, Kentucky facility and the new stamping plant in Blytheville, Arkansas during the first quarter of fiscal 1997, and the new Blytheville cold rolling mill during the first quarter of fiscal 1996. Increased borrowings on the Company's revolving credit facility provided the funds for these expenditures during the first quarter of fiscal 1997. For the first quarter of fiscal 1996, the funds used to acquire new property were obtained from a combination of cash on hand, first quarter operating activities, and a net increase in long-term debt obligations. The Company also borrowed additional funds on its revolving credit facility, which increased by a total of $21.0 million during the three months ended July 31, 1996, in order to fund increased levels of working capital. Specifically, the Company's inventory balance increased $20.3 million from April 30, 1996, to a seasonal peak of $74.2 million. Inventory levels are scheduled to decline through the second quarter of fiscal 1997 to approximately $65.0 million by the end of the Company's second quarter of fiscal 1997. The first quarter of fiscal 1996 saw a large reduction in the Company's investment in raw materials, as the Company reduced its steel inventories to more normal levels. However, the cash impact of this inventory reduction was virtually offset by a similar reduction in the Company's trade accounts payable balance. During the quarter ended July 31, 1995, the Company issued $50.0 million of ten-year term notes to a group of domestic commercial lenders. These notes bear interest at the fixed rate of 8.13% per annum and mature in equal annual installments of $7.1 million on each July 15, 1999-2005. The proceeds from the issuance of these notes were used to reduce the Company's outstanding borrowings on its line of credit facility with a group of domestic commercial banks. The Company established a policy to limit its long-term debt, inclusive of current maturities (i.e., "funded debt"), to no more than 50% of total capitalization (i.e., the sum of the Company's funded debt and total shareholders' equity). The Company formalized this policy in connection with the issuance of the 1995 Notes, agreeing with the purchasers of the 1995 Notes to a covenant limiting the Company's funded debt to no more than 50% of total capitalization. At July 31, 1996, the ratio of funded debt to total capitalization was 45.3%. As of July 31, 1996, the Company had unused borrowing capacity of $16.3 million under its $60.0 million revolving credit facility. During the second quarter of fiscal 1997, the Company intends to seek to extend the term and increase the size of its revolving credit facility. Capital expenditures were $10.4 million in the first quarter of fiscal 1997, and should approximate this level during each of the subsequent two quarters, followed by a decline to approximately $4.0 million of expenditures during the fourth quarter of fiscal 1997. The Company expects that its annealing/cold rolling expansion, the new South Carolina facility, and the second coil pickling line at Blytheville will comprise the bulk of the Company's capital spending for the balance of fiscal 1997. All of these projects are expected to be completed during fiscal 1997, except for the coil pickling line project, which is planned for completion sometime during the second quarter of fiscal 1998. The Company plans to fund these expenditures over the balance of fiscal 1997 with net cash to be provided by operations and through additional borrowings. The Company's cash position, unused borrowing capacity, and cash anticipated to be generated from operations is expected to be sufficient to meet its commitments in terms of working capital growth, capital expenditures and the payment of dividends on the outstanding shares of Class A and Class B common stock during fiscal 1997. The Company maintains the flexibility to issue additional equity in the form of Class A common stock or preferred stock if and when market circumstances should ever dictate. The Company, from time-to-time, explores financing alternatives such as increasing its borrowing capacity on its revolving credit facility, the possibility of issuing additional long-term debt, or pursuing operating lease financing for new business expansions. Beyond these financing options, the Company has traditionally maintained liquidity in its working capital accounts by availing itself of quick pay vendor discounts on much of its domestic raw material purchases. If necessary, the Company could forego these quick pay discounts in order to generate funds for general corporate purposes. PART II. OTHER INFORMATION - ----------------------------- Item 6. Exhibits and Reports on Form 8-K - -------------------------------------------- (a) See the Exhibit Index included herein. (b) Reports on Form 8-K: The Company filed a Form 8-K on May 22, 1996, which filing discussed the Company's earnings for the fiscal year ended April 30, 1996, as well as providing certain forward-looking data for the fiscal year ending April 30, 1997. ************** SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. HUNTCO INC. (Registrant) Date: August 13, 1996 By: /s/ ROBERT J. MARISCHEN ----------------------- Robert J. Marischen, Vice Chairman of the Board and Chief Financial Officer EXHIBIT INDEX These Exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K. 2: Omitted - not applicable. 4: Omitted - not applicable. 10(iii)(A)(1): Description of performance bonus arrangement for executive officers for the fiscal year ending April 30, 1997, incorporated by reference to Exhibit 10(iii)(A)(5) of the Company's Annual Report on Form 10-K filed on July 26, 1996. 10(iii)(A)(2): Huntco Inc. 1993 Incentive Stock Plan, As Amended and Restated in 1996. 11: Omitted - not applicable. 15: Omitted - not applicable. 18: Omitted - not applicable. 19: Omitted - not applicable. 22: Omitted - not applicable. 23: Omitted - not applicable. 24: Omitted - not applicable. 27: Financial Data Schedule. 99: Omitted - not applicable. EX-10 2 AMENDED AND RESTATED INCENTIVE STOCK PLAN HUNTCO INC. 1993 INCENTIVE STOCK PLAN (As Amended and Restated in 1996) 1. Purpose The Huntco Inc. Incentive Stock Plan (the "Plan") is intended to secure for Huntco Inc. (the "Company") and its shareholders the benefits of the incentive inherent in common stock ownership by the employees of the Company and its subsidiaries, who are largely responsible for the future growth and continued financial success of the Company; and to afford such persons the opportunity to obtain or increase a proprietary interest in the Company on a favorable basis. 2. Administration The Plan shall be administered by a committee of two or more directors, which the Board of Directors shall appoint as Administrator of the Plan or by the full Board of Directors. Subject to the provisions of the Plan, the Administrator shall have exclusive authority to interpret and administer the Plan, to select persons eligible to participate in the Plan, to grant Incentive Stock Options, Non-Qualified Stock Options, Restricted Shares and Stock Appreciation Rights ("SARs") in accordance with the Plan, to establish the timing, pricing, amount and other terms and conditions of such grants (which need not be uniform with respect to the various participants (the "Participant" or "Participants") or with respect to different grants to the same Participant), to establish appropriate rules relating to the Plan, to delegate some or all of its authority under the Plan and to take all such steps and make all such determinations in connection with the Plan and the Incentive Stock Options, the Non-Qualified Stock Options, the Restricted Shares and the SARs granted pursuant to this Plan as it may deem necessary or advisable. 3. Eligibility The Administrator shall from time to time determine and designate the employees and directors of the Company and its subsidiaries who shall be Participants in the Plan; and the number of Incentive Stock Options, Non-Qualified Stock Options, Restricted Shares and SARs to be awarded to each such Participant. In making any such award, the Administrator may take into account the nature of services rendered by a Participant, the capacity of the Participant to contribute to the success of the Company, and other factors that the Administrator may consider relevant. 4. Types of Benefits Benefits under the Plan may be granted in any one or any combination of (a) Incentive Stock Options; (b) Non-Qualified Stock Options; (c) SARs; and (d) Restricted Shares, as described in the Plan ("Benefits"). The Administrator may: (a) make the grant of Benefits conditional upon an election by a Participant to defer payment of a portion of his salary; (b) give a Participant a choice between two Benefits or combinations of Benefits; (c) award Benefits in the alternative so that acceptance of or exercise of one Benefit cancels the right of a Participant to another; and (d) award Benefits in any combination or combinations and subject to any condition or conditions consistent with the terms of the Plan that the Administrator in its sole discretion may determine. 5. Shares Subject to Plan Subject to the provisions of Section 9 (relating to adjustment for changes in capital stock), the maximum number of shares that may be issued under this Plan shall not exceed in the aggregate 900,000 shares of the Company's Class A Common Stock having a par value of $.01 per share (the "Class A Shares"). Such Class A Shares may be unissued Class A Shares, or issued Class A Shares that have been reacquired. If any Incentive Stock Options or Non-Qualified Stock Options granted under the Plan shall for any reason terminate or expire, or be surrendered without having been exercised in full, the Class A Shares not purchased under such options shall be available again for option or grant under the Plan. If Restricted Shares are issued pursuant hereto and are later reacquired by the Company pursuant to rights reserved on issuance, the Class A Shares subject to or reserved for any Benefit may again be used in connection with the grant of any of the Benefits described in this Plan; provided that in no event may the number of Class A Shares issued under this Plan exceed 900,000, subject to adjustment as described in Section 9. 6. Stock Options The Administrator from time to time may grant options ("Options") to Participants to purchase Class A Shares from the Company, provided, however, that the number of Class A Shares underlying Options and SARs (as provided in Section 7 hereof) which may be awarded to any Participant in any calendar year shall not exceed a total of 60,000. An Option may be granted in the form of an "Incentive Stock Option," which is intended to qualify as an incentive stock option within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), or in the form of a "Non-Qualified Stock Option," which is not intended to qualify as an incentive stock option within the meaning of Section 422 of the Code. Each Option agreement (the "Option Agreement") between the Company and a Participant shall be in such form and shall contain such provisions as the Administrator from time to time shall deem appropriate. Option Agreements need not be identical, but each Option Agreement shall include the substance of all of the provisions set forth in subsections (a) through (c) below: (a) The purchase price shall be payable in full in cash upon exercise of the Option. In lieu of cash a Participant may, to the extent permitted by and subject to the conditions contained in the terms of the Option Agreement, make payment in whole or in part by tendering Class A Shares valued at fair market value on the date of exercise, or in the form of any other property or note permitted by the Option Agreement. (b) The Administrator in its discretion may provide in any Option Agreement that the Option shall be exercisable in full at any time or from time to time during the term of the Option, or may provide for the exercise of the Option in such installments and at such times during the term of the Option as the Administrator may determine. (c) The maximum term of an Option shall be ten years from the date it was granted, except that the maximum term of an Incentive Stock Option granted to a person who owns more than ten percent (10%) of the total combined voting power of all classes of the stock of the Company shall be five years. (d) The purchase price of the Class A Shares covered by each Incentive Stock Option shall be not less than 100% of the fair market value of the stock subject to the Option at the time the Option is granted (110% if the recipient owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company, or a Subsidiary); and the purchase price of any other Option granted to a person who is subject to Section 16 of the 1934 Act shall not be less than 50% of the fair market value of the Class A Shares subject to the Option at the time such Option is granted. (e) An Incentive Stock Option (i) shall not be transferable by the individual to whom granted except by will or by the laws of descent and distribution; and (ii) may be exercised during the individual's lifetime only by such individual. (f) The aggregate fair market value (as determined by the Administrator as of the time an Incentive Stock Option is granted) of the Class A Shares covered by an Incentive Stock Option awarded a Participant under the Plan (or any plan of a parent corporation or Subsidiary) that becomes exercisable for the first time during any calendar year shall not exceed One Hundred Thousand Dollars ($100,000.00) or such other maximum applicable to Incentive Stock Options as may be in effect from time to time under the Code. (g) No Incentive Stock Option shall be awarded after the day preceding the tenth anniversary of the effective date of the Plan. (h) No person entitled to exercise any Option granted under the Plan shall have any of the rights or privileges of a shareholder of the Company with respect to the Class A Shares issuable upon exercise of such Option until certificates representing such Class A Shares shall have been issued and delivered to such person. (i) An Incentive Stock Option may be granted only to a person who is an employee of the Company at the time of the grant. 7. Stock Appreciation Rights (SARs) (a) If and only if the Administrator determines in its discretion to grant SARs in accordance with this Section, one or more Participants may be granted the right, exercisable upon such terms and conditions as the Administrator may establish at the time of the Option grant or at any time thereafter, to surrender all or part of an unexercised Option under the Plan in exchange for a distribution from the Company of all or any portion of an amount equal to the difference between (i) the fair market value (at date of surrender) of the number of Class A Shares in which the optionee is at the time vested under the surrendered Option, and (ii) the aggregate option price payable for such vested Class A Shares. The number of Class A Shares underlying Options and SARs which may be awarded to any Participant in any calendar year shall not exceed a total of 60,000. (b) No surrender of an Option pursuant to this Section shall be effective unless it is approved by the Administrator. If the surrender is so approved, then the distribution to which the optionee shall accordingly become entitled under this Section may be made in Class A Shares valued at fair market value at date of surrender, in cash, or partly in Class A Shares and partly in cash, as the Administrator shall in its sole discretion determine. (c) If the surrender of an Option is rejected by the Administrator, then the optionee shall retain whatever rights the optionee had under the surrendered Option (or surrendered portion thereof) on the date of surrender and may exercise such rights at any time prior to the later of (i) the receipt of the rejection notice, or (ii) the last day on which the Option is otherwise exercisable in accordance with the terms of the Option Agreement; however, in the case of an Incentive Stock Option, in no event may such rights be exercised at any time after ten years (or five years in the case of a 10% Shareholder) after the date of the Option grant. (d) The following additional provisions shall be applicable to any Incentive Stock Option that is to be surrendered pursuant to the provisions of Section 7(a) above: (i) The Incentive Stock Option may be surrendered only to the extent it is at the time eligible for exercise in compliance with the provisions of this Plan. (ii) The right to surrender the Incentive Stock Option may only be transferred or assigned in connection with a transfer or assignment of the Incentive Stock Option in compliance with the limitations of Section 6. (iii) The Incentive Stock Option may be surrendered only when the fair market value of the Class A Shares subject to the surrendered option exceeds the aggregate option price payable for such Class A Shares. (iv) The Incentive Stock Option may not be surrendered at any time after the expiration or termination of the option term. 8. Restricted Shares. A Restricted Share consists of a Class A Share that is subject to certain restrictions on the disposition of such share and rights of the Company to reacquire the share upon specified terms upon the occurrence of certain events during a specified period, as determined by the Administrator. Each Participant who is awarded Restricted Shares shall enter into an agreement with the Company in a form specified by the Administrator agreeing to the terms and conditions of the award and such other matters consistent with the Plan as the Administrator in its sole discretion shall determine. Restricted Shares may not be sold, transferred, pledged or otherwise encumbered during a Restricted Period. A Restricted Period shall commence on the date of the award and end at such later date as the Administrator may designate at the time of the award. A Participant shall have the entire beneficial ownership and most of the rights and privileges of a shareholder with respect to Restricted Shares awarded to him, including the right to receive dividends and the right to vote such Restricted Shares. The Administrator in its sole discretion from time to time may establish the terms and conditions under which Restricted Shares shall be forfeited by the Participant during the Restricted Period. Notwithstanding anything in this Section to the contrary, the Administrator may make an award of "phantom stock credits" to any Participant which shall serve as a basis for an award of Restricted Shares at a later point in time. The Participant shall not be entitled to delivery of the certificate representing Class A Shares until the expiration of the Restricted Period applicable to such Restricted Shares. 9. Adjustment Upon Changes in Stock If any change is made in the Class A Shares by reason of any merger, consolidation, reorganization, recapitalization, stock dividend, split up, combination of shares, exchange of shares, change in corporate structure, or otherwise, appropriate adjustments shall be made by the Administrator to the kind and maximum number of shares subject to the Plan and the kind and number of shares and price per share of stock subject to each outstanding Benefit. Any increase in the shares, or the right to acquire shares, as the result of such an adjustment shall be subject to the same terms and conditions that apply to the Benefit for which such increase was received. No fractional Class A Shares shall be issued under the Plan on account of any such adjustment, and rights to shares always shall be limited after such an adjustment to the lower full share. 10. Amendment of the Plan The Board of Directors of the Company may at any time amend the Plan, provided that the Board may not, without approval (within twelve months before or after the date of such change) of such number of the stockholders as may be required by federal income tax or federal securities laws for any particular amendment: (a) increase the maximum number of Class A Shares in the aggregate which may be issued under the Plan, except as may be permitted under the adjustment provisions of Section 9, or (b) adopt any other amendment for which shareholder approval is required by federal income tax or federal securities laws. The Board of Directors may not alter or impair any Benefit previously granted under the Plan without the consent of the person to whom the Benefit was granted. 11. Termination of the Plan The Plan shall terminate on May 18, 2003 provided, however, that the Board of Directors may terminate or suspend the Plan at any time. No Benefit shall be awarded after termination of the Plan. Rights and obligations under a Benefit awarded while the Plan is in effect shall not be altered or impaired by termination or suspension of the Plan except by consent of the person to whom the Benefit was awarded. 12. Withholding Tax The Company shall have the right to withhold with respect to any distribution made to Participants under the Plan any taxes required by law to be withheld because of such distribution (the "Tax Requirements"). The Administrator may require or permit a Participant to satisfy any Tax Requirements with Company stock. 13. Rules of Construction The terms of the Plan shall be construed in accordance with the laws of the State of Missouri, provided that the terms of the Plan as they relate to Incentive Stock Options shall be construed first in accordance with the meaning under and in a manner that will result in the Plan satisfying the requirements of the provisions of the Code governing incentive stock options. 14. Compliance with 1934 Act With respect to persons subject to Section 16 of the 1934 Act, transactions under this Plan are intended to comply with all applicable provisions of Rule 16b-3 or its successors under the 1934 Act. To the extent any action by the Administrator fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Administrator. 15. Effective Date The Plan became effective as of the date it was adopted by the Board of Directors and shareholders of the Company on May 18, 1993. This amended and restated Plan was adopted by the Board of Directors of the Company as of July 31, 1996 and shall become effective on August 15, 1996; provided, however, that the increase in the number of Class A Shares covered by the Plan as set forth in Section 5 hereof, and the limitation in the number of Class A Shares underlying Options and SARs which may be awarded to any Participant in any calendar year as set forth in Sections 6 and 7 hereof, shall be subject to approval by the holders of a majority of the outstanding voting stock of the Company within twelve months of the adoption of the amended and restated Plan by the Board of Directors. 16. Adoption The undersigned hereby certifies that this amended and restated plan was duly adopted by the Board of Directors of the Company as of the 31st day of July, 1996. HUNTCO INC. By: /s/Anthony J. Verkruyse Title: Vice President and Secretary Date: July 31, 1996 EX-27 3 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED FINANCIAL STATEMENTS AND NOTES THERETO OF HUNTCO INC. AT AND FOR THE THREE MONTHS ENDED JULY 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS APR-30-1996 JUL-31-1996 2,128 0 38,105 486 74,244 116,780 148,530 19,638 252,141 39,161 94,019 0 0 90 113,578 252,141 78,430 78,430 69,437 69,437 0 56 1,201 4,161 1,591 2,570 0 0 0 2,570 .29 .29
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