-----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, S46QKULIY3JwY92hMvpkow1kYzimWvsZPuj9wDSbe062UZCZolmjdnmuoeybjGFx 9n2FI5Gre64j38B5qrOE6w== 0000934747-97-000006.txt : 19970509 0000934747-97-000006.hdr.sgml : 19970509 ACCESSION NUMBER: 0000934747-97-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970508 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMMONWEALTH INDUSTRIES INC/DE/ CENTRAL INDEX KEY: 0000934747 STANDARD INDUSTRIAL CLASSIFICATION: ROLLING DRAWING & EXTRUDING OF NONFERROUS METALS [3350] IRS NUMBER: 133245741 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-25642 FILM NUMBER: 97598007 BUSINESS ADDRESS: STREET 1: 500 WEST JEFFERSON STREET STREET 2: 19TH FLOOR CITY: LOUISVILLE STATE: KY ZIP: 40202-2823 BUSINESS PHONE: 502-589-8100 MAIL ADDRESS: STREET 1: 500 WEST JEFFERSON STREET STREET 2: 19TH FLOOR CITY: LOUISVILLE STATE: KY ZIP: 40202-2823 FORMER COMPANY: FORMER CONFORMED NAME: COMMONWEALTH ALUMINUM CORP DATE OF NAME CHANGE: 19941228 10-Q 1 FORM 10-Q ================================================================================ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q --------- [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1997 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 No. 0-25642 COMMONWEALTH INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Delaware 13-3245741 (State of incorporation) (I.R.S. Employer Identification No.) 500 West Jefferson Street 19th Floor Louisville, Kentucky 40202-2823 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (502) 589-8100 ---------- 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 proceeding 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. Yes X No ____ The registrant had 10,207,500 shares of common stock outstanding at May 1, 1997. ================================================================================ COMMONWEALTH INDUSTRIES, INC. FORM 10-Q For the Quarter Ended March 31, 1997 INDEX Part I - Financial Information Item 1. Financial Statements (unaudited) Page Number Condensed Consolidated Balance Sheets as of March 31, 1997 and December 31, 1996 3 Condensed Consolidated Statements of Income for the three months ended March 31, 1997 and 1996 4 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 1997 and 1996 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition 7-8 and Results of Operations Part II - Other Information Item 1. Legal Proceedings 9 Item 6. Exhibits and Reports on Form 8-K 9 Signatures 10 COMMONWEALTH INDUSTRIES, INC. Condensed Consolidated Balance Sheets (in thousands except share data)
March 31, December 31, 1997 1996 ------------- ------------- Assets Current assets: Cash and cash equivalents $ - $ 1,944 Accounts receivable, net 190,196 146,091 Inventories 162,546 173,911 Prepayments and other current assets 13,009 10,056 ------------- ------------- Total current assets 365,751 332,002 Property, plant and equipment, net 271,012 274,095 Goodwill, net 176,901 175,146 Other noncurrent assets 12,958 13,339 ------------- ------------- Total assets $ 826,622 $ 794,582 ============= ============= Liabilities Current liabilities: Current portion of long-term debt $ 7,500 $ 6,250 Accounts payable 84,505 82,340 Accrued liabilities 32,540 36,351 ------------- ------------- Total current liabilities 124,545 124,941 Long-term debt 362,000 336,000 Other long-term liabilities 18,205 14,584 Accrued pension benefits 10,707 10,610 Accrued postretirement benefits 81,922 81,224 ------------- ------------- Total liabilities 597,379 567,359 ------------- ------------- Commitments and contingencies - - Stockholders' Equity Common stock, $.01 par value, 50,000,000 shares authorized, 10,207,500 and 10,197,500 shares outstanding at March 31, 1997 and December 31, 1996, respectively 102 102 Additional paid-in capital 301,467 301,289 Accumulated deficit (70,530) (72,188) Unearned compensation (1,796) (1,980) ------------- ------------- Total stockholders' equity 229,243 227,223 ------------- ------------- Total liabilities and stockholders' equity $ 826,622 $ 794,582 ============= ============= See notes to condensed consolidated financial statements.
COMMONWEALTH INDUSTRIES, INC. Condensed Consolidated Statements of Income (in thousands except per share amounts)
Three months ended March 31, ---------------------------------------- 1997 1996 -------------- -------------- Net sales $ 272,191 $ 167,544 Cost of goods sold 248,145 157,733 -------------- -------------- Gross profit 24,046 9,811 Selling, general and administrative expenses 11,803 5,976 Amortization of goodwill 1,119 - -------------- -------------- Operating income 11,124 3,835 Other income (expense), net 179 (238) Interest expense, net (8,333) (679) -------------- -------------- Income before income taxes 2,970 2,918 Income tax expense 802 525 -------------- -------------- Net income $ 2,168 $ 2,393 ============== ============== Net income per share $ 0.21 $ 0.23 ============== ============== Weighted average shares outstanding 10,206 10,193 ============== ============== Dividends per share $ 0.05 $ 0.05 ============== ============== See notes to condensed consolidated financial statements.
COMMONWEALTH INDUSTRIES, INC. Condensed Consolidated Statements of Cash Flow (in thousands)
Three months ended March 31, ----------------------------------- 1997 1996 ------------ ------------ Cash flows from operating activities: Net income $ 2,168 $ 2,393 Adjustments to reconcile net income to net cash provided by operations: Depreciation and amortization 9,170 4,317 Issuance of common stock in connection with stock awards 84 - Changes in assets and liabilities: (Increase) in accounts receivable, net (44,105) (12,472) Decrease in inventories 11,365 9,882 (Increase) in prepayments and other current assets (3,361) (906) Decrease in other noncurrent assets 381 105 Increase in accounts payable 2,165 10,369 (Decrease) in accrued liabilities (3,811) (1,812) Increase (decrease) in other liabilities 4,416 (386) ------------ ------------ Net cash (used in) provided by operating activities (21,528) 11,490 ------------ ------------ Cash flows from investing activities: Net cash and cash equivalents (outflow) from acquisition (2,874) - Additions to property, plant and equipment (4,367) (1,877) Disposals of property, plant and equipment 3 206 ------------ ------------ Net cash (used in) investing activities (7,238) (1,671) ------------ ------------ Cash flows from financing activities: Proceeds from short-term borrowings - 4,000 Repayments of short-term borrowings - (8,000) Proceeds from long-term debt 28,500 - Repayments of long-term debt (1,250) (1,875) Proceeds from issuance of common stock 82 - Cash dividends paid (510) (510) ------------ ------------ Net cash provided by (used in) financing activities 26,822 (6,385) ------------ ------------ Net (decrease) increase in cash and cash equivalents (1,944) 3,434 Cash and cash equivalents at beginning of period 1,944 2,665 ------------ ------------ Cash and cash equivalents at end of period $ - $ 6,099 ============ ============ See notes to condensed consolidated financial statements.
COMMONWEALTH INDUSTRIES, INC. Notes to Condensed Consolidated Financial Statements (unaudited) 1. Basis of Presentation The accompanying condensed consolidated financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all the disclosures normally required by generally accepted accounting principles. The condensed consolidated financial statements have been prepared in accordance with Commonwealth Industries, Inc.'s (the "Company's") customary accounting practices and have not been audited. In the opinion of management, all adjustments necessary to fairly present the results of operations for the reporting interim periods have been made and were of a normal recurring nature. 2. Acquisition On September 20, 1996, the Company acquired CasTech Aluminum Group Inc. ("CasTech") for a purchase price of $285 million. The excess of the purchase price over the acquired net assets of $179 million was recorded as goodwill and is being amortized over 40 years. The acquisition was recorded under the purchase method of accounting and accordingly, the results of operations of CasTech prior to the date of acquisition have not been included in the accompanying consolidated financial statements. 3. Inventories The Company uses the first-in, first-out (FIFO) and the last-in, last-out (LIFO) methods for valuing its inventories. (in thousands) March 31, 1997 December 31, 1996 - -------------- --------------- ----------------- Raw materials $ 23,515 $ 29,458 Work in process 76,286 82,205 Finished goods 51,302 46,959 Expendable parts and supplies 15,702 15,338 --------- --------- 166,805 173,960 LIFO reserve (4,259) (49) --------- --------- $ 162,546 $ 173,911 ========= ========= Inventories of approximately $41 million and $38 million, included in the above totals at March 31, 1997 and December 31, 1996, respectively, are accounted for under the LIFO method of accounting. On March 31, 1997, the Company had deferred realized losses of $0.1 million on closed futures contracts which are recorded as an increase to the carrying value of inventory. The Company had deferred realized gains of $0.4 million at December 31, 1996. 4. Provision for Income Taxes The effective income tax rate for the quarter ended March 31, 1997 is greater than the rate for the quarter ended March 31, 1996 as a result of the expected increase in the Company's taxable income for the year 1997 compared to the year 1996. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion contains statements which are forward-looking rather than historical fact. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and involve risks and uncertainties that could render them materially different, including, but not limited to, the effect of global economic conditions, the impact of competitive products and pricing, product development and commercialization, availability and cost of critical raw materials, the rate of technological change, product demand and market acceptance risks, capacity and supply constraints or difficulties, and other risks detailed in the Company's various Securities and Exchange Commission filings. Overview The Company manufactures non-heat treat coiled aluminum sheet for the transportation, construction and consumer durables end use markets and electrical flexible conduit and prewired armored cable for the non-residential construction and renovation markets. The Company's principal raw materials are aluminum scrap and primary aluminum. Trends in the demand for aluminum sheet products in the United States and in the prices of aluminum primary metal and scrap affect the business of the Company. The Company's operating results also are affected by factors specific to the Company, such as the margins between selling prices for its aluminum sheet and its cost of metal ("material margins") and its unit cost of converting metal into aluminum sheet products ("conversion cost"). While changes in aluminum prices can cause the Company's net sales to change significantly from period to period, net income is more directly impacted by the fluctuation in material margins. During the first quarter of 1997, shipments of the Company's products, both aluminum sheet and electrical conduit and cable, continued to increase as demand for those products remained strong. Increased sales of electrical conduit and cable were supported by additional production capacity which was brought on line in the first quarter. In the aluminum sheet industry, customers remain cautious toward inventory levels. The Company believes that the aluminum sheet order rate is indicative of the underlying demand for aluminum products and remains strong. The cash price of primary aluminum on the London Metal Exchange increased during the quarter from $0.69 per pound on December 31, 1996 to $0.73 per pound on March 31, 1997. In response to these increases, the Company announced price increases in February and March which maintained material margin levels comparable to those earned in the fourth quarter of 1996. On September 20, 1996, the Company acquired CasTech Aluminum Group Inc. ("CasTech") in a transaction that was accounted for under the purchase method of accounting. CasTech was the nation's leading manufacturer of continuous cast aluminum sheet and a leading manufacturer of electrical flexible conduit and prewired armored cable. Concurrent with the acquisition, the Company prepaid its existing indebtedness and that of CasTech. The acquisition and prepayment were financed with a new $325 million senior secured bank credit facility and the proceeds from the issue and sale of $125 million principal amount of 10.75% Senior Subordinated Notes Due 2006. Results of Operations for the three months ended March 31, 1997 and 1996 Net Sales. Net sales for the quarter ended March 31, 1997, increased 62% to $272 million from $168 million for the same period in 1996. The increase is due to the CasTech acquisition along with increased sales volumes at all facilities. Average selling prices for aluminum sheet for the quarter ended March 31, 1997, were $1.04 per pound, a decrease of 2% from $1.06 per pound for the quarter ended March 31, 1996. Unit sales volume of aluminum increased 65% to 261.3 million pounds for the first quarter of 1997 from 157.9 million pounds for the first quarter of 1996. Gross Profit. Gross profit for the quarter ended March 31, 1997, increased to $24.0 million from $9.8 million for the same period in 1996. This increase was attributable to increased unit sales volumes, the CasTech acquisition and lower manufacturing unit costs. The Company's unit manufacturing costs decreased compared to the same period in 1996 as a result of the higher unit volumes and mill optimization practices. Operating Income. The Company produced operating income of $11.1 million for the first quarter of 1997 compared with $3.8 million for the first quarter of 1996. Selling, general and administrative expenses during the first quarter of 1997 were $11.8 million, compared with $6.0 million for the same period in 1996. This increase along with the amortization of goodwill recorded in the first quarter of 1997 of $1.1 million is due to the CasTech acquisition. Contributing to the increase are corporate relocation, severance and other costs related to the integration of the businesses. Net Income. Net income was $2.2 million for the quarter ended March 31, 1997, compared with $2.4 million for the same period in 1996. Interest expense was $8.3 million for the quarter ended March 31, 1997 and $0.7 million for the comparable period in 1996. The increase in the Company's interest expense is due to borrowings associated with the CasTech acquisition. Income tax expense was $0.8 million in the first quarter of 1997 compared to $0.5 million for the same period in 1996. Liquidity and Capital Resources The Company's sources of liquidity are cash flows from operations and borrowings under its $225 million revolving credit facility. The Company believes these sources will be sufficient to fund its working capital requirements, capital expenditures, debt service and dividend payments at least through 1998. Capital expenditures were $4.4 million during the quarter ended March 31, 1997. At March 31, 1997, the Company had commitments of $8.9 million for the purchase or construction of capital assets. Total capital expenditures for the year 1997 are expected to be approximately $28 million, principally related to upgrading the Company's manufacturing and other facilities and meeting environmental requirements . Risk Management The Company offers its customers multiple pricing methods, including fixed firm prices. Purchases of metal for forward delivery as well as hedging with futures contracts and options are used to reduce the Company's aggregate exposure to the risk of changes in metal prices. This is accomplished by establishing at the time of a customer's order a fixed margin between the cost of the metal and the Company's price of the product to the customer. Gains and losses resulting from changes in the market value of these futures contracts and options increase or decrease cost of sales at the time of revenue recognition. At March 31, 1997, the Company held purchase and sales commitments through 1997 totaling $66 million and $280 million, respectively. The Company held futures contracts, marked-to-market at March 31, 1997, with a net unrealized loss of $1.4 million. Before entering into futures contracts and options, the Company reviews the credit rating of the counterparty and assesses any possible credit risk. While the Company is exposed to certain losses in the event of non-performance by the counterparties to these agreements, the Company does not anticipate non-performance by such counterparties. The Company has entered into interest rate swap agreements with a notional amount of $117 million. With respect to these agreements, the Company pays a fixed rate of interest and receives a LIBOR-based floating rate. Recently Issued Accounting Pronouncements During February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS No. 128"). The Company will adopt SFAS No. 128 during the fourth quarter of 1997 as required and does not expect the Statement to have a material impact on the calculation of net income per share. PART II OTHER INFORMATION Item 1. Legal Proceedings The Company is a party to non-environmental legal proceedings and administrative actions all of which are of an ordinary routine nature incidental to the operations of the Company. Although it is impossible to predict the outcome of any legal proceeding, in the opinion of management such proceedings and actions should not, individually or in aggregate, have a material adverse effect on the Company's financial condition, results of operations or cash flows, although resolution in any year or quarter could be material to the results of operation for that period. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 3.1 Restated Certificate of Incorporation, effective April 18, 1997. 10.1 1995 Stock Incentive Plan as amended and restated April 17, 1997. 10.2 1997 Stock Incentive Plan. 11 Computation of Net Income Per Share. 27 Financial Data Schedule. (b) Reports on Form 8-K There were no reports on Form 8-K filed during the quarter ended March 31, 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. COMMONWEALTH INDUSTRIES, INC. By: /s/ Donald L. Marsh, Jr. ------------------------- Donald L. Marsh, Jr. Executive Vice President, Chief Financial Officer and Secretary Date: May 8, 1997 EX-3.1 2 EXHIBIT 3.1 NY12532: 194680.3 RESTATED CERTIFICATE OF INCORPORATION OF COMMONWEALTH INDUSTRIES, INC. Commonwealth Industries, Inc., a Delaware corporation, hereby certifies as follows: FIRST. The name of the corporation is Commonwealth Industries, Inc. The date of filing of its original certificate of incorporation with the Secretary of State of the State of Delaware was December 10, 1984 and the name under which it was originally incorporated was Comalco (U.S.) Holding, Inc. SECOND. This restated certificate of incorporation has been duly adopted in accordance with the provisions of Section 245 of the General Corporation Law of the State of Delaware. It only restates and integrates and does not further amend the provisions of the certificate of incorporation of the corporation as heretofore amended or supplemented and there is no discrepancy between those provisions and the provisions of this restated certificate. THIRD. The text of the certificate of incorporation is hereby restated to read in its entirety as follows: ARTICLE I Name The name of the corporation is Commonwealth Industries, Inc. ARTICLE II Registered Office; Registered Agent The address of the corporation's registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. ARTICLE III Purpose The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware. ARTICLE IV Shares The total number of shares of all classes of stock which the corporation shall have authority to issue is 51,000,000, of which 50,000,000 shares of the par value of $.01 per share shall be designated as Common Stock and 1,000,000 shares of the par value of $.01 per share shall be designated as Preferred Stock. Shares of Preferred Stock may be issued in series from time to time by the board of directors, and the board of directors is expressly authorized to fix by resolution or resolutions the designations and the powers, preferences and rights, and the qualifications, limitations and restrictions thereof, of the shares of each series of Preferred Stock, including without limitation the following: (a) the distinctive serial designation of such series which shall distinguish it from other series; (b) the number of shares included in such series, which number may be increased or decreased from time to time unless otherwise provided by the board of directors in the resolution or resolutions providing for the issue of such series; (c) the dividend rate (or method of determining such rate) payable to the holders of the shares of such series, any conditions upon which such dividends shall be paid and the date or dates upon which such dividends shall be payable; (d) whether dividends on the shares of such series shall be cumulative and, in the case of shares of any series having cumulative dividend rights, the date or dates or method of determining the date or dates from which dividends on the shares of such series shall be cumulative; (e) the amount or amounts which shall be payable out of the assets of the corporation to the holders of the shares of such series upon voluntary or involuntary liquidation, dissolution or winding up the corporation; (f) the price or prices at which, the period or periods within which and the terms and conditions upon which the shares of such series may be redeemed, in whole or in part, at the option of the corporation or at the option of the holder or holders thereof or upon the happening of a specified event or events; (g) the obligation, if any, of the corporation to purchase or redeem shares of such series pursuant to a sinking fund or otherwise and the price or prices at which, the period or periods within which and the terms and conditions upon which the shares of such series shall be redeemed or purchased, in whole or in part, pursuant to such obligation; (h) whether or not the shares of such series shall be convertible or exchangeable, at any time or times at the option of the holder or holders thereof or at the option of the corporation or upon the happening of a specified event or events, into shares of any other class or classes or any other series of the same or any other class or classes of stock of the corporation, and the price or prices or rate or rates of exchange or conversion and any adjustments applicable thereto; and (i) the voting rights, if any, of the holders of the shares of such series. ARTICLE V By-Laws The board of directors of the corporation is expressly authorized to adopt, amend or repeal by-laws of the corporation. ARTICLE VI Directors Elections of directors need not be by written ballot except and to the extent provided in the by-laws of the corporation. The number of directors of the corporation shall be fixed from time to time pursuant to the by-laws of the corporation. The directors of the corporation shall be divided into three classes, as nearly equal in number as reasonably possible, as determined by the board of directors, with the initial term of office of the first class of such directors to expire at the annual meeting of stockholders in 1996, the initial term of office of the second class of such directors to expire at the first annual meeting of stockholders thereafter and the initial term of office of the third class of such directors to expire at the second annual meeting of stockholders thereafter, with each class of directors to hold office until their successors have been duly elected and qualified. At each annual meeting of stockholders directors elected to succeed the directors whose terms expire at such annual meeting shall be elected to hold office for a term expiring at the annual meeting of stockholders in the third year following the year of their election and until their successors have been duly elected and qualified. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain or attain a number of directors in each class as nearly equal as reasonably possible, but no decrease in the number of directors may shorten the term of any incumbent director. No director may be removed except for cause. This Article VI may not be amended, modified or repealed except by the affirmative vote of the holders of not less than 80% of the voting power of all outstanding shares of capital stock of the corporation entitled to vote generally in the election of directors, considered for purposes hereof as a single class. In the event that the holders of any class or series of stock of the corporation shall be entitled, voting separately as a class, to elect any directors of the corporation, then the number of directors that may be elected by such holders shall be in addition to the number fixed pursuant to the by-laws and, except as otherwise expressly provided in the terms of such class or series, the terms of the directors elected by such holders shall expire at the annual meeting of stockholders next succeeding their election without regard to the classification of the remaining directors. ARTICLE VII Stockholder Action by Written Consent Any action required or permitted to be taken by the holders of Common Stock of the corporation, including but not limited to the election of directors, may be taken by written consent or consents but only if such consent or consents are signed by all holders of Common Stock entitled to vote on such action. ARTICLE VIII Limitation of Liability of Directors A director of the corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent that such exemption from liability or limitation thereof is not permitted under the General Corporation Law of the State of Delaware. No amendment, modification or repeal of this Article VIII shall adversely affect any right or protection of a director that exists at the time of such amendment, modification or repeal. IN WITNESS WHEREOF, Commonwealth Industries, Inc. has caused this certificate to be signed by Mark V. Kaminski, its President, on the 17th day of April, 1997. /s/ MARK V. KAMINSKI Mark V. Kaminski EX-10.1 3 EXHIBIT 10.1 NY12532: 194672.10 COMMONWEALTH INDUSTRIES, INC. 1995 Stock Incentive Plan As Amended and Restated on April 17, 1997 1. General. Pursuant to the terms and conditions of the Commonwealth Industries, Inc. (formerly Commonwealth Aluminum Corporation) 1995 Stock Incentive Plan (the "Plan") hereinafter set forth, the Committee specified in Section 2 from time to time granted or awarded to eligible employees (a) options to purchase shares of the Common Stock, par value $.01 per share ("Common Stock"), of Commonwealth Industries, Inc. (the "Corporation") and (b) restricted Common Stock. Options to purchase Common Stock also were granted to non-employee directors of the Corporation in accordance with Section 16 of the Plan. No further grants or awards shall be made under the Plan after April 17, 1997. The purpose of the Plan is to enhance the ability of the Corporation and its subsidiaries to attract and retain employees and directors of outstanding ability and to provide employees and directors with an interest in the Corporation parallel to that of the Corporation's stockholders. 2. Administration. The Plan shall be administered by the Management Development and Compensation Committee of the Board of Directors (the "Board") of the Corporation, or any successor committee appointed by the Board (the "Committee"); which Committee shall at all times consist of two or more directors, each of whom is a "Non-Employee Director" within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934 (the "Exchange Act"). The Committee shall have full and final authority, in each case subject to and consistent with the provisions of the Plan, to determine the type, number and other terms and conditions of, and all matters relating to, grants and awards, to prescribe grant and award agreements and rules and regulations for the administration of the Plan and such agreements, to construe and interpret the Plan and grant and award agreements and to correct defects, supply omissions or reconcile inconsistencies therein, and to make all other decisions and determinations as the Committee may deem necessary or advisable for the administration of the Plan. Any action of the Committee shall be final, conclusive and binding on all persons, including the Corporation and its subsidiaries and stockholders, employees of the Corporation or its subsidiaries who have received grants or awards ("Participants") and persons claiming rights from or through a Participant. The Committee may delegate to officers or managers of the Corporation or any subsidiary, or committees thereof, and to service providers, the authority, subject to such terms as the Committee shall determine, to perform administrative functions with respect to the Plan and grant and award agreements. The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to the Committee by any officer or employee of the Corporation or a subsidiary, the Corporation's independent public accountants or any other adviser, consultant or service provider assisting in the administration of the Plan. Members of the Committee and any officer or employee of the Corporation or a subsidiary acting at the direction of, or on behalf of, the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified by the Corporation with respect to any such action or determination. 3. Eligibility. Individuals eligible to receive awards under the Plan were the officers and other key employees of the Corporation and its subsidiaries selected by the Committee and all non-employee directors. However, except as provided in Section 16 hereof, no grant or award was made to a director who was not an employee of the Corporation or its subsidiaries. 4. Shares Subject to the Plan. The total of the number of shares of Common Stock which may be acquired upon the exercise of options granted under the Plan and the number of shares of Common Stock awarded as restricted Common Stock under the Plan shall not exceed 600,000; provided, that for purposes of this limitation any option which is canceled or expires without exercise, and any restricted Common Stock which is forfeited to the Corporation pursuant to the terms of the award thereof, shall thereafter be deemed not to have been granted or awarded. No employee shall be granted in any calendar year options to purchase more than 100,000 shares of Common Stock. Shares of Common Stock available for issue or distribution under the Plan shall be authorized and unissued shares or shares acquired by the Corporation and held in treasury. 5. Stock Options. The Committee from time to time granted options under the Plan to eligible employees. None of the options granted were intended to be incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986. The Committee established the option price at the time each option was granted. The option price was not less than the fair market value of the Common Stock on the date of grant. Unless otherwise determined by the Committee, the fair market value of the Common Stock, as used in this Section 5 and elsewhere in the Plan, as of any given date shall be the mean between the highest and lowest reported sales prices on that date of the Common Stock on the New York Stock Exchange Composite Tape or, if not listed on such exchange, on any other national securities exchange on which the Common Stock is listed or on NASDAQ, or, if no Common Stock was traded on that date, on the next preceding day on which there was such a trade. Except as otherwise provided herein, options granted shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee, but in no event may options be exercisable for a period of more than 10 years after their date of grant. The Committee may alter or waive, at any time, any term or condition of an option that is not mandatory under the Plan. The option price of each share as to which an option is exercised shall be paid in full at the time of such exercise. The payment shall be made (a) in cash, (b) by surrender of shares of Common Stock owned by the holder of the option for at least six months prior to exercise of the option, (c) to the extent authorized by the Committee, by surrender of shares of Common Stock owned by the holder of the option for less than six months prior to the exercise of the option (including shares of Common Stock otherwise receivable upon exercise of the option), (d) through simultaneous sale through a broker of shares acquired upon exercise, as permitted under Regulation T of the Federal Reserve Board, (e) through additional methods prescribed by the Committee or (f) by a combination of any such methods. Any shares of Common Stock so delivered in payment shall be valued at their fair market value on the exercise date, or on such other date as determined by the Committee for administrative convenience. Except as otherwise determined by the Committee at or subsequent to grant, any option granted to an employee and outstanding at the time of the termination of employment of that employee shall remain exercisable as follows: (a) In the event of the termination of employment of the employee by reason of retirement on or after normal retirement date pursuant to a retirement plan of the Corporation or any of its subsidiaries or total and permanent disability, the holder may, at any time within one year after that termination, but not later than the date of expiration of the option, exercise the option to the same extent, if any, as the option was exercisable at the date of termination under the terms of the option. The option shall expire upon the termination of employment to the extent it was not then exercisable, and otherwise upon the earlier of the expiration of the one-year period or the date of expiration of the option. (b) In the event of the termination of employment by reason of death of the employee, any person or persons (including the legal representatives of the estate of the employee) who is the holder of the option or to whom the option shall pass by will or by the laws of descent and distribution may, at any time within one year after the date of death but not later than the date of expiration of the option, exercise the option to the same extent, if any, as the option was exercisable at the date of death under the terms of the option. The option shall expire on the date of death to the extent it was not then exercisable, and otherwise upon the expiration of the earlier of the one-year period or the date of expiration of the option. (c) In the event of the termination of employment for any reason other than retirement, disability or death as aforesaid, the option shall expire upon the termination of employment. For purposes of the Plan a leave of absence, authorized in writing by the Corporation or a subsidiary of the Corporation, for military service or illness, or for any other purpose if the period of such leave does not exceed 90 days, or for any other purpose if the leave exceeds 90 days but reemployment is guaranteed by law or contract, shall not be deemed a termination of employment. No option may be transferred except by will or the laws of descent and distribution, provided that the Committee may determine that an option may be transferred pursuant to a qualified domestic relations order within the meaning of Section 414(p) of the Code or by a Participant to one or more members of the Participant's immediate family, or to trusts or partnerships or limited liability companies established for such family members. For this purpose, immediate family means, except as otherwise defined by the Committee, the Participant's children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brothers and sisters), in-laws and persons related by reason of legal adoption. Such transferees may transfer an option only by will or the laws of descent or distribution. An option transferred pursuant to this paragraph shall remain subject to the provisions of the Plan, including, but not limited to, the provisions of this Section 5 relating to the exercise of the option upon the termination of employment of the Participant and shall be subject to such other rules as the Committee shall determine. Except in the case of a holder's incapacity, an option shall be exercisable only by the holder thereof. 6. Restricted Common Stock. The Committee from time to time awarded to eligible employees restricted Common Stock. The employment conditions and the length of the period for vesting of restricted Common Stock were established by the Committee at the time of award, except that each restriction period was and shall be not less than 12 months. Except as restricted under the terms of the Plan and any agreement related to the restricted Common Stock, a Participant awarded restricted Common Stock has all the rights of a stockholder including, without limitation, the right to vote restricted Common Stock. If a stock certificate is issued in respect of shares of restricted Common Stock, the certificate shall be registered in the name of the Participant but shall be held by the Corporation for the account of the employee until the end of the restriction period. 7. Change in Control. In the event of a Change in Control, as hereafter defined: (a) Any option outstanding as of the date such Change in Control is determined to have occurred and not then exercisable in full shall become fully exercisable; and (b) The restrictions applicable to all shares of restricted Common Stock shall lapse and such shares shall be deemed fully vested. A "Change in Control" means the occurrence of any of the following events: (a) individuals who on April 17, 1997 constitute the Board together with those individuals who first become directors after that date (other than as a result of an actual or threatened election contest for directors or an actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board) and whose election or nomination for election to the Board was approved by a vote of at least two-thirds of the directors then in office who either were directors on April 17, 1997 or whose election or nomination for election was previously so approved (the "Continuing Directors") cease for any reason to constitute a majority of the Board; (b) any person (as defined in Section 3(a)(9) and used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) ("Person"), other than the Corporation, a subsidiary of the Corporation, an employee benefit plan sponsored or maintained by the Corporation or a subsidiary of the Corporation or an underwriter temporarily holding securities pursuant to an offering of such securities, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act)("Beneficial Owner") of securities of the Corporation representing 20% or more of the combined voting power of the Corporation's then outstanding securities eligible to vote for the election of directors (the "Corporation Voting Securities") unless the Person became such a Beneficial Owner as a result of a purchase of Corporation Voting Securities directly from the Corporation in a transaction approved by a majority of the Continuing Directors or pursuant to a transaction which complies with clauses (i), (ii) and (iii) of paragraph (c) of this definition; (c) the approval by the stockholders of the Corporation of a reorganization, merger, consolidation, exchange of shares or sale or other disposition of all or substantially all the assets of the Corporation, or the consummation of any such transaction if stockholder approval is not required or obtained, other than any such transaction pursuant to which (i) the Beneficial Owners of the Corporation Voting Securities outstanding immediately prior to the transaction will be the Beneficial Owners of more than 60% of the outstanding securities eligible to vote for the election of directors of the corporation resulting from such transaction or of any corporation of which such corporation is a wholly-owned subsidiary ("Parent Corporation"), (ii) no Person, other than the corporation resulting from such transaction or Parent Corporation, a subsidiary of such corporation or Parent Corporation or an employee benefit plan sponsored or maintained by such corporation or Parent Corporation or a subsidiary thereof, will become the Beneficial Owner of securities of such corporation or Parent Corporation representing 20% or more of the combined voting power of the then outstanding securities eligible to vote for the election of directors of such corporation or Parent Corporation except to the extent that such ownership existed with respect to the Corporation Voting Securities prior to such transaction and (iii) individuals who are Continuing Directors will constitute at least a majority of the members of the board of directors of the corporation resulting from the transaction or Parent Corporation; or (d) the approval by stockholders of the Corporation of a complete liquidation or dissolution of the Corporation. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person acquires Beneficial Ownership of more than 20% of the Corporation Voting Securities as a result of the acquisition of Corporation Voting Securities by the Corporation which, by reducing the number of Corporation Voting Securities outstanding, increases the percentage of shares beneficially owned by such Person, provided that if a Change in Control would occur as a result of such an acquisition by the Corporation (if not for the operation of this sentence), and after the Corporation's acquisition such Person becomes the Beneficial Owner of additional Corporation Voting Securities that increases the percentage of outstanding Corporation Voting Securities beneficially owned by such person, then a Change in Control shall occur. 8. Grant or Award Agreement. Each grant or award under the Plan shall be evidenced by an agreement setting forth the terms and conditions, as determined by the Committee, which shall apply to such grant or award, in addition to the terms and conditions specified in the Plan. 9. Withholding. The Corporation may deduct from any payment to be made pursuant to the Plan the amount of any taxes required by law to be withheld therefrom, or require a Participant to pay to the Corporation in cash such amount required to be withheld prior to the issuance or delivery of any shares of Common Stock or the payment of cash under the Plan. Such taxes may be paid in cash, by surrender of shares of Common Stock or with shares of Common Stock otherwise to be issued or delivered to the Participant, or by a combination thereof, or in any other manner satisfactory to the Committee. Any shares of Common Stock so delivered shall be valued at the fair market value thereof on the day immediately prior to exercise or payment of a grant or award. 10. No Right to Employment. Nothing contained in the Plan or in any grant of award under the Plan shall confer upon any employee any right with respect to the continuation of employment with the Corporation or any of its subsidiaries, or interfere in any way with the right of the Corporation to terminate his or her employment at any time. Nor shall anything contained in the Plan confer upon any employee or other person any claim or right to any grant or award under the Plan. 11. Governmental Compliance. Each grant and award under the Plan shall be subject to the requirement that if at any time the Committee shall determine that the listing, registration or qualification of any shares issuable or deliverable thereunder upon any securities exchange or under any Federal or state law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition thereof or in connection therewith, such grant or award may not be exercised and no shares may be delivered upon the exercise or payment thereof unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee. The Committee may require any person acquiring shares pursuant to a grant or award to represent to and agree with the Corporation that such person is acquiring the shares for investment and without a view to the distribution thereof. All certificates for shares of Common Stock delivered under the Plan pursuant to a grant or award shall be subject to such stock-transfer orders and other restrictions as the Committee may deem advisable under any federal or state law or regulation or the requirements of any stock exchange or NASDAQ, and the Committee may cause a legend or legends to be endorsed upon any such certificate to make reference to such restrictions. It is intended that the Plan satisfy the requirements of Rule 16b-3 under the Exchange Act so that Participants will be entitled to the benefit of that Rule or any other rule promulgated under Section 16 of the Exchange Act and will not be subject to short-swing liability under Section 16. Accordingly, if the operation of any provision of the Plan would conflict with this intent, such provision to the extent possible shall be interpreted or deemed amended so as to avoid such conflict. 12. Adjustments. In the event of any change in the outstanding shares of Common Stock by reason of any stock dividend or split, recapitalization, merger, consolidation, spinoff, combination or exchange of shares or other corporate change, or any distribution to holders of Common Stock other than regular cash dividends, the number or kind of shares available for options and awards under the Plan (including the calendar year limit on option grants) may be adjusted by the Committee as it shall in its sole discretion deem equitable and the number and kind of shares subject to any outstanding options granted under the Plan and the purchase price thereof may be adjusted by the Committee as it shall in its sole discretion deem equitable to preserve the value of such outstanding options. 13. Amendment. The Board may amend, suspend or terminate the Plan or any portion thereof at any time, provided that (a) no amendment shall be made without stockholder approval if such approval is necessary to satisfy any applicable tax or regulatory law or regulation and the Board determines it is appropriate to seek stockholder approval, and (b) upon or following the occurrence of a Change in Control no amendment may adversely affect the rights of any person in connection with a grant or award previously granted. 14. Governing Law. The Plan and any agreement evidencing a grant or award shall be construed and its provisions enforced and administered in accordance with the laws of the State of Delaware. 15. Effective Date. The Plan became effective on March 17, 1995. Subject to earlier termination pursuant to Section 13, the Plan shall have a term of 10 years from its effective date. 16. Director Stock Options. Nonqualified options to purchase 1,000 shares of Common Stock (2,500 shares in the case of a non-employee Chairman of the Board) were granted automatically to each director of the Corporation who was a director but was not an employee of the Corporation or its subsidiaries on the date of grant (a) upon the date such director joined the Board and (b) on each succeeding January 1. The option price for each option was the fair market value of the Common Stock on the date of grant of that option. Each such option shall become exercisable one year from the date of the grant thereof. Each such option shall terminate 10 years from the date of grant unless sooner terminated by reason of termination of service as a director. An option granted to a non-employee director pursuant to this Section 16 and outstanding at the time of the termination of service of that individual as a director for any reason shall be exercisable at any time within one year following such termination of service, whether or not otherwise exercisable, but in no event beyond the term of the option, and shall thereafter terminate. Except as expressly provided in this Section, any option granted hereunder shall be subject to the terms and conditions of the Plan as if the grant were made pursuant to Section 5 hereof. 17. No Rights Until Certificates Delivered. Except as otherwise provided by the Committee in the applicable grant or award agreement, no person shall have rights as a stockholder with respect to any shares of Common Stock as a result of any grant or award until a certificate or certificates evidencing such shares shall have been delivered to that person and, subject to Section 12, no adjustment shall be made for dividends or distributions or other rights in respect of any share for which the record date is prior to the date on which such person shall become the holder of record thereof. EX-10.2 4 EXHIBIT 10.2 NY12532: 197818.1 COMMONWEALTH INDUSTRIES, INC. 1997 Stock Incentive Plan 1. Purpose. Pursuant to the terms and conditions of the Commonwealth Industries, Inc. 1997 Stock Incentive Plan (the "Plan") hereinafter set forth, the Committee specified in Section 2 may from time to time award to eligible employees (a) options ("Options") to purchase shares of the Common Stock, par value $.01 per share ("Common Stock"), of Commonwealth Industries, Inc. (the "Company") and (b) restricted Common Stock. In addition, Options and shares of Common Stock shall be granted to non-employee directors of the Company as provided in Section 7. All such Options, restricted Common Stock and shares of Common Stock are referred to herein as "Awards." The purpose of the Plan is to enhance the ability of the Company and its subsidiaries to attract and retain employees and directors of outstanding ability and to provide employees and directors with an interest in the Company parallel to that of the Company's stockholders. 2. Administration. The Plan shall be administered by the Management Development and Compensation Committee of the Board of Directors (the "Board") of the Company, or any successor committee appointed by the Board (the "Committee"). It is intended that the Committee shall at all times consist of two or more directors, each of whom is a non-employee director within the meaning of Rule 16b-3 under the Securities Exchange Act of 1934 (the "Exchange Act") and an outside director within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"). The Committee shall have full and final authority, in each case subject to and consistent with the provisions of the Plan, to select employees of the Company or its subsidiaries who are to receive Awards, to make Awards, to determine the type, number and other terms and conditions of, and all matters relating to, Awards, to prescribe Award agreements and rules and regulations for the administration of the Plan and such agreements, to construe and interpret the Plan and Award agreements and to correct defects, supply omissions or reconcile inconsistencies therein, and to make all other decisions and determinations as the Committee may deem necessary or advisable for the administration of the Plan. Any action of the Committee shall be final, conclusive and binding upon all persons, including the Company and its subsidiaries and stockholders, employees and directors who have been granted an Award ("Participants") and persons claiming rights from or through a Participant. The Committee may delegate to officers or managers of the Company or a subsidiary of the Company, or committees thereof, and to service providers, the authority, subject to such terms as the Committee shall determine, to perform administrative functions with respect to the Plan and to Award agreements. The Committee and each member thereof shall be entitled, in good faith, to rely or act upon any report or other information furnished to the Committee by any officer or employee of the Company or a subsidiary of the Company, the Company's independent public accountants or any other adviser, consultant or service provider assisting in the administration of the Plan. Members of the Committee and any officer or employee of the Company or a subsidiary of the Company acting at the direction of, or on behalf of, the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan or any Award agreement, and shall, to the extent permitted by law, be fully indemnified by the Company with respect to any such action or determination. 3. Eligibility. Individuals eligible to receive Awards shall be the officers and other key employees of the Company and its subsidiaries selected by the Committee and, solely as provided in Section 7, each member of the Board who is not an employee of the Company or a subsidiary of the Company ("Non-Employee Director"). 4. Shares Subject to the Plan. The maximum number of shares of Common Stock available for the grant of Awards under the Plan shall be 600,000, subject to adjustment pursuant to Section 13 and to the following provisions. If an Award granted under the Plan or the Company's 1995 Stock Incentive Plan ("1995 Plan") shall be canceled or expire without exercise of the Award, the shares subject to such Award shall be added to the shares available for Awards under the Plan. Any shares surrendered or withheld in payment of the exercise price of an Option granted under the Plan or the 1995 Plan or in satisfaction of any tax liabilities resulting from an Award under the Plan or the 1995 Plan, shall also be added to the number of shares available for Awards under the Plan. Shares of Common Stock may be made available under the Plan from authorized but unissued shares or from shares reacquired by the Company. The number of shares of Common Stock with respect to which Options may be granted to any Participant during any calendar year shall not exceed 100,000, subject to adjustment under Section 13. 5. Stock Options. The Committee may from time to time grant Options under the Plan to eligible employees. Options may be either nonqualified Options ("Nonqualified Stock Options") or Options which are intended to qualify under Section 422 of the Code ("Incentive Stock Options"). The price at which shares may be purchased upon exercise of an Option granted to an employee shall be fixed by the Committee, but shall be not less than the Fair Market Value of the Common Stock on the day of grant. Unless otherwise determined by the Committee, the "Fair Market Value" of the Common Stock, as used in this Section 5 and elsewhere in the Plan, as of any day, shall be the mean between the highest and lowest reported sales price for that day of the Common Stock on the New York Stock Exchange Composite Tape or, if not listed on such exchange, on any other national securities exchange on which the Common Stock is listed or on NASDAQ, or, if no Common Stock was traded on that day, on the next preceding day on which there was such a trade. Options granted to employees shall be exercisable at such time or times and subject to such terms and conditions as shall be determined by the Committee, but no Option shall be exercisable after the expiration of 10 years from the date of grant. The Committee may alter or waive at any time any term or condition of an Option that is not mandatory under the Plan. The Option price of each share as to which an Option is exercised shall be paid in full at the time of such exercise. The payment shall be made (a) in cash, (b) by surrender of shares of Common Stock owned by the holder of the Option for at least six months prior to exercise of the Option, (c) to the extent authorized by the Committee, by surrender of shares of Common Stock owned by the holder of the Option for less than six months prior to the exercise of the Option (including shares of Common Stock otherwise receivable upon exercise of the Option), (d) through simultaneous sale through a broker of shares acquired upon exercise, as permitted under Regulation T of the Federal Reserve Board, (e) through additional methods prescribed by the Committee or (f) by a combination of any such methods. Any shares of Common Stock so delivered in payment shall be valued at their Fair Market Value on the exercise date, or on such other date as determined by the Committee for administrative convenience. Except as otherwise determined by the Committee at or subsequent to grant, any Option granted to an employee and outstanding at the time of the termination of employment of that employee shall remain exercisable as follows: (a) In the event of the termination of employment of the employee by reason of retirement on or after normal retirement date pursuant to a retirement plan of the Company or any of its subsidiaries or total and permanent disability, the holder may, at any time within one year after that termination, but not later than the date of expiration of the Option, exercise the Option to the same extent, if any, as the Option was exercisable at the date of termination under the terms of the Option. The Option shall expire upon the termination of employment to the extent it was not then exercisable, and otherwise upon the earlier of the expiration of the one-year period or the date of expiration of the Option. (b) In the event of the termination of employment by reason of death of the employee, any person or persons (including the legal representatives of the estate of the employee) who is the holder of the Option or to whom the Option shall pass by will or by the laws of descent and distribution may, at any time within one year after the date of death but not later than the date of expiration of the Option, exercise the Option to the same extent, if any, as the Option was exercisable at the date of death under the terms of the Option. The Option shall expire on the date of death to the extent it was not then exercisable, and otherwise upon the expiration of the earlier of the one-year period or the date of expiration of the Option. (c) In the event of the termination of employment for any reason other than retirement, disability or death as aforesaid, the Option shall expire upon the termination of employment. For purposes of the Plan a leave of absence, authorized in writing by the Company or a subsidiary of the Company, for military service or illness, or for any other purpose if the period of such leave does not exceed 90 days, or for any other purpose if the leave exceeds 90 days but reemployment is guaranteed by law or contract, shall not be deemed a termination of employment. No Option may be transferred except by will or the laws of descent and distribution, provided that the Committee may determine that an Option may be transferred pursuant to a qualified domestic relations order within the meaning of Section 414(p) of the Code or by a Participant to one or more members of the Participant's immediate family, or to trusts or partnerships or limited liability companies established for such family members. For this purpose, immediate family means, except as otherwise defined by the Committee, the Participant's children, stepchildren, grandchildren, parents, stepparents, grandparents, spouse, siblings (including half brothers and sisters), in-laws and persons related by reason of legal adoption. Such transferees may transfer an Option only by will or the laws of descent or distribution. An Option transferred pursuant to this paragraph shall remain subject to the provisions of the Plan, including, but not limited to, the provisions of this Section 5 relating to the exercise of the Option upon the termination of employment of the Participant and shall be subject to such other rules as the Committee shall determine. Except in the case of a holder's incapacity, an Option shall be exercisable only by the holder thereof. 6. Restricted Stock. The Committee may from time to time award restricted Common Stock under the Plan to eligible employees. Shares of restricted Common Stock may not be sold, assigned, transferred or otherwise disposed of, or pledged or hypothecated as collateral for a loan or as security for the performance of any obligation or for any other purpose, for such period (the "Restricted Period") as the Committee shall determine, except that the Restricted Period shall not be less than 12 months. The Committee may define the Restricted Period in terms of the passage of time or in any other manner it deems appropriate. The Committee may alter or waive at any time any term or condition of restricted Common Stock that is not mandatory under the Plan. Unless otherwise determined by the Committee, upon termination of a Participant's employment for any reason prior to the end of the Restricted Period, the restricted Common Stock shall be forfeited and the Participant shall have no right with respect to the Award. Except as restricted under the terms of the Plan and any Award agreement, any employee awarded restricted Common Stock shall have all the rights of a stockholder including, without limitation, the right to vote restricted Common Stock. If a stock certificate is issued in respect of shares of restricted Common Stock, the certificate shall be registered in the name of the employee but shall be held by the Company for the account of the employee until the end of the Restricted Period. The Committee may also award restricted Common Stock in the form of restricted Common Stock units having a value equal to an identical number of shares of Common Stock. Payment of restricted Common Stock units shall be made in shares of Common Stock or in cash or in a combination thereof (based upon the Fair Market Value of Common Stock on the day the Restricted Period expires), all as determined by the Committee in its sole discretion. 7. Non-Employee Director Stock Options and Shares. Nonqualified Stock Options to purchase 1,000 shares of Common Stock (2,500 shares in the case of a Non-Employee Director who is Chairman of the Board), the number of shares being in each case subject to adjustment pursuant to Section 13, shall be granted automatically to each Non-Employee Director (a) upon the date such director joins the Board or becomes a Non-Employee Director (or, in respect of the Option for the additional 1,500 shares (such number of shares being subject to adjustment under Section 13) in the case of a Non-Employee Director who is Chairman of the Board, becomes the Chairman) and (b) on each succeeding January 1 which is not less than 90 days after the date referred to in clause (a). In addition, a grant of 1,000 shares of Common Stock shall be made automatically to each Non-Employee Director (a) upon the date such director joins the Board or becomes a Non-Employee Director and (b) on each succeeding January 1 which is not less than 90 days after the date referred to in clause (a). The price at which shares may be purchased upon exercise of an Option granted to a Non-Employee Director shall be the Fair Market Value of the Common Stock on the day of grant. Options granted to Non-Employee Directors shall become exercisable one year from the date of the grant thereof. Each such Option shall terminate 10 years from the date of grant unless sooner terminated by reason of termination of service as a director. Any Option granted to a Non-Employee Director and outstanding at the time of the termination of service of that individual as a director for any reason, to the extent exercisable at the date of termination, shall be exercisable for one year following such termination of service, but in no event beyond the term of the Option, and shall thereafter terminate. Except as expressly provided in this Section 7, any Option granted to a Non-Employee Director under the Plan shall be subject to the general terms and conditions of the Plan. 8. Change in Control. In the event of a Change in Control, as hereinafter defined, (a) all Options shall become vested and exercisable in full, (b) the restrictions applicable to all shares of restricted Common Stock shall lapse and (c) all restricted Common Stock granted in the form of share units shall be paid out in shares of Common Stock. The Committee may, in its discretion, include such further provisions and limitations in any Award agreement as it may deem equitable, and may, in its sole discretion, make payments with respect to restricted Common Stock units in cash in an amount equal to the Fair Market Value of the Award as of the Change in Control. A "Change in Control" means the occurrence of any of the following events: (a) individuals who on the Effective Date of the Plan constitute the Board together with those individuals who first become directors after that date (other than as a result of an actual or threatened election contest for directors or an actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board) and whose election or nomination for election to the Board was approved by a vote of at least two-thirds of the directors then in office who either were directors on the Effective Date or whose election or nomination for election was previously so approved (the "Continuing Directors") cease for any reason to constitute a majority of the Board; (b) any person (as defined in Section 3(a)(9) and used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) ("Person"), other than the Company, a subsidiary of the Company, an employee benefit plan sponsored or maintained by the Company or a subsidiary of the Company or an underwriter temporarily holding securities pursuant to an offering of such securities, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange Act)("Beneficial Owner") of securities of the Company representing 20% or more of the combined voting power of the Company's then outstanding securities eligible to vote for the election of directors (the "Company Voting Securities") unless the Person became such a Beneficial Owner as a result of a purchase of Company Voting Securities directly from the Company in a transaction approved by a majority of the Continuing Directors or pursuant to a transaction which complies with clauses (i), (ii) and (iii) of paragraph (c) of this definition; (c) the approval by the stockholders of the Company of a reorganization, merger, consolidation, exchange of shares or sale or other disposition of all or substantially all the assets of the Company, or the consummation of any such transaction if stockholder approval is not required or obtained, other than any such transaction pursuant to which (i) the Beneficial Owners of the Company Voting Securities outstanding immediately prior to the transaction will be the Beneficial Owners of more than 60% of the outstanding securities eligible to vote for the election of directors of the corporation resulting from such transaction or of any corporation of which such corporation is a wholly-owned subsidiary ("Parent Corporation"), (ii) no Person, other than the corporation resulting from such transaction or Parent Corporation, a subsidiary of such corporation or Parent Corporation or an employee benefit plan sponsored or maintained by such corporation or Parent Corporation or a subsidiary thereof, will become the Beneficial Owner of securities of such corporation or Parent Corporation representing 20% or more of the combined voting power of the then outstanding securities eligible to vote for the election of directors of such corporation or Parent Corporation except to the extent that such ownership existed with respect to the Company Voting Securities prior to such transaction and (iii) individuals who are Continuing Directors will constitute at least a majority of the members of the board of directors of the corporation resulting from the transaction or Parent Corporation; or (d) the approval by stockholders of the Company of a complete liquidation or dissolution of the Company. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person acquires Beneficial Ownership of more than 20% of the Company Voting Securities as a result of the acquisition of Company Voting Securities by the Company which, by reducing the number of Company Voting Securities outstanding, increases the percentage of shares beneficially owned by such Person, provided that if a Change in Control would occur as a result of such an acquisition by the Company (if not for the operation of this sentence), and after the Company's acquisition such Person becomes the Beneficial Owner of additional Company Voting Securities that increases the percentage of outstanding Company Voting Securities beneficially owned by such person, then a Change in Control shall occur. 9. Award Agreement. Each Award under the Plan shall be evidenced by an agreement setting forth the terms and conditions, as determined by the Committee, in addition to those set forth in the Plan, which shall apply to such Award. 10. Withholding. The Company may deduct from any payment to be made pursuant to the Plan the amount of any taxes required by law to be withheld therefrom, or require a Participant to pay to the Company in cash such amount required to be withheld prior to the issuance or delivery of any shares of Common Stock or the payment of cash under the Plan. Such taxes may be paid in cash, by surrender of shares of Common Stock or with shares of Common Stock otherwise to be issued or delivered to the Participant, or by a combination thereof, or in any other manner satisfactory to the Committee. Any shares of Common Stock so delivered shall be valued at the Fair Market Value thereof on the day immediately prior to exercise or payment of an Award. 11. No Right of Continued Employment. Nothing contained in the Plan or in any Award shall confer upon any employee any right with respect to the continuation of employment with the Company or any of its subsidiaries or interfere in any way with the right of the Company to terminate his or her employment at any time. Nor shall anything contained in the Plan confer upon any employee or other person any claim or right to any Award under the Plan. 12. Governmental Compliance. Each Award granted under the Plan shall be subject to the requirement that if at any time the Committee shall determine that the listing, registration or qualification of any shares issuable or deliverable thereunder upon any securities exchange or under any Federal or state law, or the consent or approval of any governmental regulatory body, is necessary or desirable as a condition thereof or in connection therewith, such Award may not be exercised and no shares may be delivered upon the exercise or payment thereof unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee. The Committee may require any person acquiring shares pursuant to an Award to represent to and agree with the Company that such person is acquiring the shares for investment and without a view to the distribution thereof. All certificates for shares of Common Stock delivered under the Plan pursuant to an Award shall be subject to such stock-transfer orders and other restrictions as the Committee may deem advisable under any federal or state law or regulation or the requirements of any stock exchange or NASDAQ, and the Committee may cause a legend or legends to be endorsed upon any such certificate to make reference to such restrictions. It is intended that the Plan satisfy the requirements of Rule 16b-3 under the Exchange Act so that Participants will be entitled to the benefit of that Rule or any other rule promulgated under Section 16 of the Exchange Act and will not be subject to short-swing liability under Section 16. Accordingly, if the operation of any provision of the Plan would conflict with this intent, such provision to the extent possible shall be interpreted or deemed amended so as to avoid such conflict. 13. Adjustments. In the event of any change in the outstanding shares of Common Stock (including, but not limited to, the number thereof) by reason of any stock dividend or split, recapitalization, merger, consolidation, spinoff, combination or exchange of shares or other corporate change, or of any distribution to holders of Common Stock other than regular cash dividends, the number or kind of shares available for Awards under the Plan (including the calendar year limit on certain Awards) and the number of Options and shares to be issued to Non-Employee Directors may be adjusted by the Committee as it shall in its sole discretion deem equitable and the number and kind of shares subject to any outstanding Awards and the exercise price thereof may be adjusted by the Committee as it shall in its sole discretion deem equitable to preserve the value of such Awards. 14. No Segregation of Cash or Shares. The Plan is intended to be an "unfunded" plan for incentive and deferred compensation. Nothing contained herein shall give any person any rights greater than those of a general creditor of the Company. The Committee may, in its sole discretion, authorize the creation of trusts or other arrangements to meet the obligations created under the Plan to deliver Common Stock or payments with respect to Awards, provided that the existence of such trusts or other arrangements is consistent with the unfunded status of the Plan. 15. No Rights Until Certificates Delivered. Except as otherwise provided by the Committee in the applicable Award agreement, no person shall have rights as a stockholder with respect to any shares of Common Stock as a result of any Award until a certificate or certificates evidencing such shares shall have been delivered to that person and, subject to Section 13, no adjustment shall be made for dividends or distributions or other rights in respect of any share for which the record date is prior to the date on which such person shall become the holder of record thereof. 16. Amendment. The Board may amend, suspend or terminate the Plan or any portion thereof at any time, provided that (a) no amendment shall be made without stockholder approval if such approval is necessary to satisfy any applicable tax or regulatory law or regulation and the Board determines it is appropriate to seek stockholder approval, and (b) upon or following the occurrence of a Change in Control no amendment may adversely affect the rights of any person in connection with an Award previously granted. 17. Governing Law. The Plan and any Award agreement shall be construed and its provisions enforced and administered in accordance with the laws of the State of Delaware. 18. Effective Date. The effective date of the Plan shall be the date upon which it is approved by the stockholders of the Company (the "Effective Date"). 19. Term of Plan. Subject to earlier termination pursuant to Section 16, the Plan shall have a term of 10 years from its Effective Date. EX-11 5 EXHIBIT 11 Exhibit 11 Commonwealth Industries, Inc. Calculation of Net Income Per Share (In thousands except per share data) Three months ended March 31, 1997 1996 - ---------------------------- ---- ---- Weighted average shares of common stock outstanding (a) 10,206 10,193 ====== ====== Net income $2,168 $2,393 ====== ====== Net income per share $0.21 $0.23 ====== ====== Note: (a) Common equivalent shares relating to stock options are not material. EX-27 6 EXHIBIT 27
5 1,000 3-mos Dec-31-1997 Jan-31-1997 Mar-31-1997 0 0 192,439 2,243 162,546 365,751 499,658 228,646 826,622 124,545 362,000 0 0 102 229,141 826,622 272,191 272,191 248,145 248,145 0 75 8,333 2,970 802 2,168 0 0 0 2,168 0.21 0.21
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