-----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, BDgrRz8MrReIkvKWoGSYBMMM6xeQjdI05OV6ecnGHOx3ova3W3+AJdCKGLa3gjO+ sjHTMe5efsTfkF1WWU4/aw== 0000950123-02-005887.txt : 20020607 0000950123-02-005887.hdr.sgml : 20020607 20020604153515 ACCESSION NUMBER: 0000950123-02-005887 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020604 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTURY ALUMINUM CO CENTRAL INDEX KEY: 0000949157 STANDARD INDUSTRIAL CLASSIFICATION: ROLLING DRAWING & EXTRUDING OF NONFERROUS METALS [3350] IRS NUMBER: 133070826 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-27918 FILM NUMBER: 02670015 BUSINESS ADDRESS: STREET 1: 2511 GARDEN ROAD STREET 2: BUILDING A SUITE 200 CITY: MONTEREY STATE: CA ZIP: 93940 BUSINESS PHONE: 3042736000 MAIL ADDRESS: STREET 1: 2511 GARDEN ROAD STREET 2: BUILDING A SUITE 200 CITY: MONTEREY STATE: CA ZIP: 93940 10-K/A 1 y61269ke10vkza.txt 10-K/A ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------- FORM 10-K/A AMENDMENT NO. 2 (Mark One) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2001 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER 0-27918 ------- CENTURY ALUMINUM COMPANY (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) DELAWARE 13-3070826 (STATE OR OTHER JURISDICTION OF (IRS EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 2511 GARDEN ROAD BUILDING A, SUITE 200 MONTEREY, CALIFORNIA 93940 (ADDRESS OF REGISTRANT'S PRINCIPAL (ZIP CODE) OFFICES) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (831) 642-9300 SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED ------------------- ----------------------------------------- COMMON STOCK, $0.01 PAR VALUE PER SHARE NASDAQ
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. Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in a definitive proxy or information statement incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] As of April 30, 2002, 20,554,302 shares of common stock of the registrant were issued and outstanding. Based upon the NASDAQ National Market closing price on April 29, 2002, the aggregate market value of the common stock held by non-affiliates of the registrant was $183,240,355. DOCUMENTS INCORPORATED BY REFERENCE: None. ================================================================================ EXPLANATORY NOTE: This Amendment No. 2 on Form 10-K/A to Century Aluminum Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2001, amends and restates in its entirety the information provided under: (i) Part III, Item 11 in Amendment No. 1 on Form 10-K/A, as filed with the Securities and Exchange Commission (the "SEC") on April 30, 2002, and (ii) Part IV, Item 14 on Form 10-K as filed with the SEC on March 27, 2002. Item 11 has been amended to correct the number of performance shares and estimated future common stock payouts for each Named Executive Officer for the three-year period from 2002 through 2004, as set forth in the "Long-Term Incentive Plan Awards Table" included therein. Item 14 has been amended for the purpose of filing an updated Exhibit 10.26, to reflect the current "Century Aluminum Company 1996 Stock Incentive Plan Implementation Guidelines," as amended by the board of directors of Century Aluminum Company in December 2001. ITEM 11. EXECUTIVE COMPENSATION Directors' Compensation Directors who are full-time salaried employees of the Company are not compensated for their service on the Board or on any Board Committee. Non-employee directors receive an annual retainer of $26,000 for their services, except that the Vice-Chairman receives an annual retainer of $31,000. In addition, each non-employee director receives a fee of $1,000 for each Board or Committee meeting attended. All directors are reimbursed for their travel and other expenses incurred in attending Board and Committee meetings. Under the Company's Non-Employee Directors Stock Option Plan, each director who is not an employee of the Company received a one-time grant of options to purchase 10,000 shares of common stock, and the Vice-Chairman received a one-time grant of options to purchase 25,000 shares of common stock. Such grants became effective upon the consummation of the Company's initial public offering at an exercise price equal to the initial public offering price, except in the cases of Messrs. Fontaine, Schreiber, Strothotte and O'Brien, whose grants became effective upon their election as directors at an exercise price equal to the market price of the Company's common stock at such times. The options vested one-third on the grant date, with an additional one-third vesting on each of the first and second anniversaries of the grant date. In addition, the Non-Employee Directors Stock Option Plan provides for automatic annual grants to each non-employee director continuing in office after the annual meeting of stockholders in each year of options to purchase 2,000 shares of Company common stock at an exercise price equal to the market price of such shares on the date of the grant. Summary Compensation Table The following table sets forth information with respect to the compensation paid or awarded by the Company to the Chief Executive Officer and the four other most highly compensated executive officers (collectively, the "Named Executive Officers") for services rendered in all capacities during 1999, 2000 and 2001.
LONG-TERM COMPENSATION ANNUAL COMPENSATION AWARDS/PAYOUTS ----------------------------------- -------------- OTHER ANNUAL COMPEN- ALL OTHER NAME AND PRINCIPAL SATION RESTRICTED STOCK COMPENSATION POSITION YEAR SALARY ($) BONUS ($) ($)(1) AWARDS ($)(2) ($)(3) -------- ---- ---------- --------- ------ ------------- ------ Craig A. Davis 2001 $ 695,179 $ 486,000 -0- -0- $ 6,120 Chairman and Chief 2000 $ 651,598 $ 540,000 -0- -0- $ 16,975 Executive Officer 1999 $ 615,442 $ 800,000 -0- -0- $ 8,442 Gerald A. Meyers 2001 $ 312,689 $ 157,500 $ 31,038 -0- $ 7,925 President and Chief 2000 $ 294,812 $ 175,000 -0- -0- $ 9,984 Operating Officer 1999 $ 278,829 $ 350,000 -0- -0- $ 7,165
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LONG-TERM COMPENSATION ANNUAL COMPENSATION AWARDS/PAYOUTS ----------------------------------- -------------- OTHER ANNUAL COMPEN- ALL OTHER NAME AND PRINCIPAL SATION RESTRICTED STOCK COMPENSATION POSITION YEAR SALARY ($) BONUS ($) ($)(1) AWARDS ($)(2) ($)(3) -------- ---- ---------- --------- ------ ------------- ------ Gerald J. Kitchen 2001 $ 248,939 $ 122,500 $ 25,586 -0- $ 9,585 Executive Vice 2000 $ 233,683 $ 136,000 -0- -0- $ 13,218 President, General 1999 $ 221,064 $ 285,000 -0- -0- $ 6,888 Counsel, Chief Administrative Officer and Secretary David W. Beckley 2001 $ 246,720 $ 121,250 $ 25,589 -0- $ 9,920 Executive Vice 2000 $ 231,855 $ 134,500 $ 21,267 -0- $ 8,950 President and Chief 1999 $ 220,611 $ 165,000 -0- -0- $ 6,888 Financial Officer E. Jack Gates 2001 $ 182,292 $ 129,914(4) -0- -0- $ 82,456 Vice President 2000 $ 12,329(5) -0- -0- -0- -0-
- ---------- (1) Represents reimbursement of interest expense incurred in connection with funds borrowed to pay estimated taxes on the value of common shares issued upon vesting of performance share grants. (2) The Company made restricted share awards in March of 1996 in the following amounts to the following Named Executive Officers: Craig A. Davis, 150,000; Gerald A. Meyers, 100,000; Gerald J. Kitchen, 80,000; and David W. Beckley, 80,000. Restricted shares vested one-third on March 28, 1999, one-third on March 28, 2000 and the final one-third vested on March 28, 2001. Dividend equivalents accrued on restricted shares from the date of grant and became payable upon vesting. The aggregate amount of accrued dividend equivalents paid to the following Named Executive Officers upon the final vesting of their restricted shares on March 28, 2001 was as follows: Craig A. Davis, $50,000; Gerald A. Meyers, $33,334; Gerald J. Kitchen, $26,668; and David W. Beckley, $26,668. (3) All other compensation is comprised of the Company's matching contributions under the Company's Defined Contribution Retirement Plan for each of the Named Executive Officers. In 2001, those contributions were $6,120 for each of Messrs. Davis, Meyers, Kitchen and Beckley and $5,744 for Mr. Gates. All other compensation also includes Company paid life insurance premiums in 2001 in the amounts of $1,805, $3,465, $3,800 and $962 for Messrs. Meyers, Kitchen, Beckley and Gates, respectively. Includes, for Mr. Gates, one-time relocation and related costs in the amount of $75,750 relating to Mr. Gates' relocation to Owensboro, Kentucky. (4) Includes $34,782 which represents the dollar value of a special stock grant of 2,645 shares made by the Company to Mr. Gates on December 14, 2001, based on the average sales price of the Company's common stock on the NASDAQ National Market of $13.15 per share on January 2, 2002, the date the shares vested. Also includes accrued dividend equivalents of $132 on such shares which was paid to Mr. Gates upon vesting. (5) Mr. Gates joined the Company in December 2000. 3 Fiscal Year End Option Value Table The following table sets forth information regarding the aggregate number and value of options held by the Named Executive Officers as of December 31, 2001.
NUMBER OF SHARES UNDERLYING UNEXERCISED OPTIONS VALUE OF UNEXERCISED OPTIONS AT DECEMBER 31, 2001 (#)(1) AT DECEMBER 31, 2001 ($)(2) ----------------------------- ----------------------------- NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE - ---- ----------- ------------- ----------- ------------- Craig A. Davis 150,000 0 $54,000 -- Gerald A. Meyers 100,000 0 $36,000 -- Gerald J. Kitchen 61,666 0 $22,200 -- David W. Beckley 80,000 0 $28,800 -- E. Jack Gates 6,666 13,334 $42,062 $84,138
- ---------- (1) The options shown in the table for Messrs. Davis, Meyers, Kitchen and Beckley were granted in March 1996, at an exercise price of $13.00 per share. The options became exercisable in three installments: one-third on the date of grant and one-third on each of the first and second anniversaries of the date of grant. The options shown in the table for Mr. Gates were granted in December 2000 at an exercise price of $7.05 per share. One-third became exercisable in June 2001, and the remaining options will become exercisable one-third in June 2002 and one-third in June 2003. (2) Value is calculated by multiplying: (i) the amount by which the option exercise price is less than $13.36, the last reported sale price of the Company's common stock on the NASDAQ National Market on December 31, 2001, by (ii) the number of shares underlying the respective options. Long-Term Incentive Plan Awards Table The following table sets forth information with respect to performance shares awarded to Messrs. Craig A. Davis, Gerald A. Meyers, Gerald J. Kitchen, David W. Beckley and E. Jack Gates under the Company's 1996 Stock Incentive Plan (the "Plan"). In accordance with guidelines adopted under the Plan, performance shares were awarded for 1998, the two-year period from 1998 through 1999, and thereafter, for rolling three-year periods beginning with 1998 through 2000. Because the earnings before taxes targets established for the two-year period ending in 1999 and the three-year periods ending in 2000 and 2001 were not met, all of the performance shares for those periods were forfeited. In 2001, the Board of Directors approved an amendment to the guidelines under the Plan that expanded the scope of the Company's performance targets to include, in addition to the achievement of financial targets, achievement of specific operating targets and long-term strategic targets (collectively, the "Award Targets"). The new performance guidelines were implemented beginning with the three-year period 2001 through 2003. LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
PERFORMANCE OR ESTIMATED FUTURE COMMON STOCK PAYOUTS OTHER PERIOD UNDER NON-STOCK PRICE-BASED PLANS PERFORMANCE MATURATION OR ---------------------------------------------------- NAME SHARES (#)(1) PAYOUT THRESHOLD (#) TARGET (#)(4)(5) MAXIMUM (#)(5) ---- ------------- ------ ------------- ---------------- -------------- Craig A. Davis -0- 2000-2002(2) -- -- -- 73,686 2001-2003 -0- 73,686 110,529 58,909 2002-2004 -0- 58,909 73,636
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PERFORMANCE OR ESTIMATED FUTURE COMMON STOCK PAYOUTS OTHER PERIOD UNDER NON-STOCK PRICE-BASED PLANS PERFORMANCE MATURATION OR ---------------------------------------------------- NAME SHARES (#)(1) PAYOUT THRESHOLD (#) TARGET (#)(4)(5) MAXIMUM (#)(5) ------------- ---------------- -------------- Gerald A. Meyers -0- 2000-2002(2) -- -- -- 32,440 2001-2003 -0- 32,440 48,660 25,166 2002-2004 -0- 25,166 31,458 Gerald J. Kitchen -0- 2000-2002(2) -- -- -- 19,765 2001-2003 -0- 19,765 29,618 15,586 2002-2004 -0- 15,586 19,483 David W. Beckley -0- 2000-2002(2) -- -- -- 19,564 2001-2003 -0- 19,564 29,618 15,420 2002-2004 -0- 15,420 19,275 E. Jack Gates 5,102 2000-2002 2,551(3) 5,102 7,653 11,170 2001-2003 -0- 11,170 16,755 9,502 2002-2004 -0- 9,502 11,878
- ---------- (1) Performance shares represent shares of Company common stock that, upon vesting, are issued to the award recipient. Except as described herein, performance shares are forfeited if the award recipient is not employed full-time by the Company at the end of the award cycle period. In the event of death, disability or retirement, the award recipient will receive a pro rata award based upon the number of weeks employed during the award cycle period. Dividend equivalents accrue on performance shares and are paid upon vesting. (2) In connection with their participation in the Enhanced Supplemental Retirement Plan (see the description under the heading "Enhanced Supplemental Retirement Plan" below), Messrs. Davis, Meyers, Kitchen and Beckley relinquished their entitlement to performance shares under the Plan for the three-year period 2000 through 2002. (3) For Mr. Gates, the threshold payouts represent the minimum number of shares that will vest during the three-year period from 2000 through 2002 if the Company meets a minimum percentage of a target level of earnings before taxes for the period or exceeds industry return on invested capital criteria. If the Company does not meet either of these performance criteria, no shares will vest. (4) Target payouts represent the target number of shares that will vest if the Company achieves its Award Targets in their entirety for the period. The Compensation Committee of the Board of Directors has retained full discretion to modify awards under the guidelines. If Award Targets are not achieved in their entirety, awards may be adjusted downward or eliminated in their entirety. In addition, regardless of performance against Award Targets, the Compensation Committee's discretion includes the right to determine that, should circumstances warrant, no award would be payable. For Mr. Gates only, the target payouts for the three-year period from 2000 through 2002 represent the target number of shares that will vest if the Company meets 100% of the target level of earnings before taxes for the period. (5) Maximum payouts represent the maximum number of shares that the Compensation Committee is authorized to award if the Company exceeds all of its Award Targets. For Mr. Gates only, the maximum payouts for the three-year period from 2000 through 2002 represent the maximum number of shares that will vest if the Company reaches 125% of the target level of earnings before taxes for the period. In cases where the target is exceeded, the number of shares vested in excess of the target number of shares is calculated by converting the excess award into cash and reconverting the excess award into shares at the greater of the share price calculated at the time of the award or the average share price for the month preceding the month in which the shares vest. 5 Pension Plan Table The Company maintains a non-contributory defined benefit pension plan for salaried employees of the Company who meet certain eligibility requirements. The table on the following page shows estimated annual benefits payable upon retirement in specified compensation and years of service classifications. The figures shown include supplemental benefits payable to the Named Executive Officers, exclusive of benefits payable to participants under the enhanced supplemental retirement plan described below. PENSION PLAN TABLE
YEARS OF CREDITED SERVICE ------------------------------------------------------------------------------------------ REMUNERATION 5 10 15 20 25 30 35 40 ----------- ------- --------- --------- --------- --------- --------- --------- --------- $ 100,000 $ 7,500 $ 15,000 $ 22,500 $ 30,000 $ 37,500 $ 45,000 $ 52,500 $ 60,000 $ 200,000 $15,000 $ 30,000 $ 45,000 $ 60,000 $ 75,000 $ 90,000 $ 105,000 $ 120,000 $ 300,000 $22,500 $ 45,000 $ 67,500 $ 90,000 $ 112,500 $ 135,000 $ 157,500 $ 180,000 $ 400,000 $30,000 $ 60,000 $ 90,000 $ 120,000 $ 150,000 $ 180,000 $ 210,000 $ 240,000 $ 500,000 $37,500 $ 75,000 $ 112,500 $ 150,000 $ 187,500 $ 225,000 $ 262,500 $ 300,000 $ 600,000 $45,000 $ 90,000 $ 135,000 $ 180,000 $ 225,000 $ 270,000 $ 315,000 $ 360,000 $ 700,000 $52,500 $ 105,000 $ 157,500 $ 210,000 $ 262,500 $ 315,000 $ 367,500 $ 420,000 $ 800,000 $60,000 $ 120,000 $ 180,000 $ 240,000 $ 300,000 $ 360,000 $ 420,000 $ 480,000 $ 900,000 $67,500 $ 135,000 $ 202,500 $ 270,000 $ 337,500 $ 405,000 $ 472,500 $ 540,000 $1,000,000 $75,000 $ 150,000 $ 225,000 $ 300,000 $ 375,000 $ 450,000 $ 525,000 $ 600,000 $1,100,000 $82,500 $ 165,000 $ 247,500 $ 330,000 $ 412,500 $ 495,000 $ 577,500 $ 660,000 $1,200,000 $90,000 $ 180,000 $ 270,000 $ 360,000 $ 450,000 $ 540,000 $ 630,000 $ 720,000 $1,300,000 $97,500 $ 195,000 $ 292,500 $ 390,000 $ 487,500 $ 585,000 $ 682,500 $ 780,000 $1,400,000 $105,000 $ 210,000 $ 315,000 $ 420,000 $ 525,000 $ 630,000 $ 735,000 $ 840,000
The plan provides lifetime annual benefits starting at age 62 equal to twelve (12) multiplied by the greater of: (i) 1.5% of final average monthly compensation multiplied by years of credited service (up to 40 years), or (ii) $22.25 multiplied by years of credited service (up to 40 years), less the total monthly vested benefit payable as a life annuity at age 62 under plans of a predecessor. Final average monthly compensation means the highest monthly average for 36 consecutive months in the 120-month period ending on the last day of the calendar month completed at or prior to a termination of service. Participants' pension rights vest after a five-year period of service. An early retirement benefit (actuarially reduced beginning at age 55) and a disability benefit are also available. The compensation covered by the plan includes all compensation, subject to certain exclusions, before any reduction for 401(k) contributions, subject to the maximum limits under the Internal Revenue Code of 1986, as amended (the "Code"). The years of credited service for Messrs. Davis, Meyers, Kitchen, Beckley and Gates at December 31, 2001, were approximately 9, 9, 6, 6 and 1, respectively. Enhanced Supplemental Retirement Plan The Company adopted an enhanced supplemental retirement benefit plan (the "Enhanced SRP") in 2001 in order to permit selected senior executives to achieve estimated levels of retirement income when, due to the executive's age and potential years of service at normal retirement age, benefits under the Company's existing qualified and nonqualified defined benefit pension plans are projected to be less than a specified percentage of the executive's estimated final average annual pay. Messrs. Davis, Meyers, Kitchen and Beckley were selected to participate in this plan at fifty percent (50%) of their estimated final average compensation during each executive's final five years of service. The Company believes this level of retirement benefit is commensurate with retirement benefits paid to senior executives of comparable companies. Under the Enhanced SRP, these senior executives will be entitled to receive an annual supplemental retirement benefit in the following amounts if they remain employed 6 by the Company from January 1, 2001, for a period of four years in the case of Mr. Davis and five years in the cases of Messrs. Meyers, Kitchen and Beckley: Craig A. Davis, $425,000; Gerald A. Meyers, $200,000; Gerald J. Kitchen, $145,000; and David. W. Beckley, $145,000. If an executive's employment is terminated prior to the end of the requisite period, the annual supplemental retirement benefit will be reduced pro rata for each year of employment less than the required four or five years. However, an executive will receive the full benefit in the event of disability, change in control or termination of employment without cause. The Company intends to invest funds to meet the Enhanced SRP obligations through the purchase of key-man life insurance policies on the lives of the participating executives. The policies will be owned by the Company and will be placed in Rabbi Trusts to secure the Company's payment obligations. EMPLOYMENT AGREEMENTS The Company entered into employment agreements with each of Messrs. Craig A. Davis, Gerald A. Meyers, Gerald J. Kitchen and David W. Beckley, effective January 1, 2002, providing for terms of employment of three years. Under the agreements, the base salaries of Messrs. Meyers, Kitchen and Beckley may not be reduced below $340,000, $258,000 and $255,250, respectively. Mr. Davis will cease to be Chief Executive Officer effective January 1, 2003, but he will remain Chairman of the Board of Directors through 2004. Mr. Davis' employment agreement provides for a base salary of $718,500 for 2002 and $500,000 for 2003 and 2004. The agreements provide that the base salaries may be subject to increases established from time to time by the Board of Directors. In addition, the executives are eligible for bonuses in accordance with the Company's annual incentive plan and stock option grants and performance share awards under the Company's 1996 Stock Incentive Plan. The agreements also provide that the executives will receive, in addition to the Enhanced SRP described above, unfunded supplemental executive retirement benefits in addition to any benefits received under the Company's qualified retirement plans. The supplemental benefit for each executive will be equal to the amount that would normally be paid under the Company's qualified retirement plans if there were no limitations under Sections 415 and 401(a)(17) of the Code. In the event of termination of employment "without cause," the terminated executive will be entitled to receive termination payments equal to 100% of his base salary and bonus (based on the highest annual bonus payment within the prior three years) for the remainder of the term of the agreement (with a minimum of one year's salary plus bonus). Any termination payments under the employment agreements may not be duplicated under the severance compensation agreements described below. SEVERANCE COMPENSATION ARRANGEMENTS The Company has entered into severance compensation agreements with each of Messrs. Craig A. Davis, Gerald A. Meyers, Gerald J. Kitchen and David W. Beckley. The agreements provide that if within 36 months following a change in control of the Company, the executive's employment is terminated either: (i) by the Company for other than cause or disability, or (ii) by the executive for good reason, then such executive will receive a lump sum payment equal to three times the aggregate of the highest base salary and the highest bonus received by such executive in any of the most recent five years. Also, in the event of a change in control, the exercisability of stock options and the vesting of performance shares held by such executives will be accelerated. The Code imposes certain excise taxes on, and limits the deductibility of, certain compensatory payments made by a corporation to or for the benefit of certain individuals if such payments are contingent upon certain changes in the ownership or effective control of the corporation or the ownership of a substantial portion of the assets of the corporation, provided that such payments to the individual have an aggregate present value in excess of three times the individual's annualized includible compensation for the base period, as defined in the Code. The severance compensation agreements provide for additional payments to the executives in order to fully offset any excise taxes payable by an executive as a result of the payments and benefits provided in the agreements. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION During 2001, the members of the Compensation Committee were Messrs. John C. Fontaine, William R. Hampshire, John P. O'Brien and Stuart M. Schreiber. Mr. Hampshire served as President and Chief Operating Officer of Century Aluminum of West Virginia, Inc. (formerly Ravenswood Aluminum Corporation and a subsidiary of the Company) from April 1992 through January 1993. 7 PART IV. ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) (1) LIST OF FINANCIAL STATEMENTS The "Consolidated Financial Statements of Century Aluminum Company" and the "Independent Auditors' Report" are included in Part II, Item 8 of the Company's Form 10-K for the fiscal year ended December 31, 2001, filed on March 27, 2002. (a) (2) LIST OF FINANCIAL STATEMENT SCHEDULES The "Independent Auditors' Report" and "Schedule II -- Valuation and Qualifying Accounts for the years ended December 31, 2001, 2000 and 1999" are included in the Company's Form 10-K for the fiscal year ended December 31, 2001, filed on March 27, 2002. (a) (3) LIST OF EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT ------ ---------------------- 2.1 Stock and Asset Purchase Agreement dated July 26, 1999 by and among Century Aluminum Company, Century Aluminum of West Virginia, Inc. and Pechiney Rolled Products LLC. (f) 2.2 Management Services Agreement dated as of September 21, 1999 by and between Century Aluminum Company and Pechiney Rolled Products LLC. (f) 2.3 Molten Aluminum Purchase Agreement dated as of September 21, 1999 by and between Century Aluminum of West Virginia, Inc. and Pechiney Rolled Products LLC. (f) 2.4 Amended and Restated Shared Facilities and Services Agreement dated as of September 21, 1999 by and between Century Aluminum of West Virginia, Inc. and Pechiney Rolled Products LLC. (f) 2.5 Stock Purchase Agreement, dated August 31, 2001, among Century Aluminum Company and Southwire Company. (h) 2.6 Asset Purchase Agreement, dated as of April 2, 2001, among Century Aluminum Company, Century Kentucky, Inc., NSA, Ltd. and Glencore AG. (h) 3.1 Restated Certificate of Incorporation of Registrant. (a) 3.2 Amended and Restated Bylaws of Registrant, dated March 5, 1999. (e) 3.3 Certificate of Designation for the Company's 8% Cumulative Convertible Preferred Stock, par value $.01 per share, dated March 28, 2001. (h) (i) 4.1 Form of Stock Certificate. (a) 4.2 Purchase Agreement, dated March 28, 2001, among Century Aluminum Company, Century Aluminum of West Virginia, Inc., Berkeley Aluminum, Inc., Century Kentucky, Inc. and Virgin Islands Alumina Corporation LLC and Credit Suisse First Boston Corporation and Fleet Securities, Inc., as Initial Purchasers. (h) 4.3 Indenture, dated April 2, 2001, among Century, the Guarantors party thereto and Wilmington Trust Company, as trustee. (h) 4.4 Registration Rights Agreement, dated April 2, 2001, among Century Aluminum Company, the Guarantors party thereto and Credit Suisse First Boston Corporation and Fleet Securities, Inc., as Initial Purchasers. (h) 4.5 Mortgage, Assignment of Leases and Rents, Security Agreement and Financing Statement, dated as of April 2, 2001, from NSA, Ltd. for the benefit of Wilmington Trust Company, as collateral agent. (h) 4.6 Deed of Trust, Assignment of Leases and Rents, Security Agreement, Financing Statement and Fixture Filing, dated as of April 2, 2001, from Century Aluminum of West Virginia, Inc. for the benefit of Wilmington Trust Company, as collateral agent. (h)
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EXHIBIT NUMBER DESCRIPTION OF EXHIBIT ------ ---------------------- 4.7 Pledge and Security Agreement, dated as of April 2, 2001, by Century Aluminum Company as Pledgor and the other Pledgors party thereto in favor of Wilmington Trust Company, as collateral agent. (h) 4.8 Convertible Preferred Stock Purchase Agreement, dated as of April 2, 2001, between Century Aluminum Company and Glencore AG. (h) 4.9 Form of Convertible Preferred Stock Certificate. (h) 10.1 Agreement between Ravenswood Aluminum Corporation and United Steelworkers of America AFL-CIO, Local 5668, dated November 30, 1994. (a) 10.2 Agreement between Ravenswood Aluminum Corporation and United Steelworkers of America AFL-CIO, Local 5668, dated June 12, 1992. (a) 10.3 Employment Agreement between Century Aluminum Company and Craig A. Davis. (b) (e) 10.4 Employment Agreement between Century Aluminum Company and Gerald A. Meyers. (b) (e) 10.5 Employment Agreement between Century Aluminum Company and Gerald J. Kitchen. (b) (e) 10.6 Employment Agreement between Century Aluminum Company and David W. Beckley. (b) (e) 10.7 Form of Severance Agreement between Century Aluminum Company and Craig A. Davis. (a) (b) 10.8 Amendment to Severance Protection Agreement between Century Aluminum Company and Craig A. Davis. (b)(e) 10.9 Form of Severance Agreement between Century Aluminum Company and Gerald A. Meyers. (a) (b) 10.10 Amendment to Severance Protection Agreement between Century Aluminum Company and Gerald A. Meyers. (b)(e) 10.11 Form of Severance Agreement between Century Aluminum Company and Gerald J. Kitchen. (a) (b) 10.12 Amendment to Severance Protection Agreement between Century Aluminum Company and Gerald J. Kitchen. (b)(e) 10.13 Form of Severance Agreement between Century Aluminum Company and David W. Beckley. (a) (b) 10.14 Amendment to Severance Protection Agreement between Century Aluminum Company and David W. Beckley. (b)(e) 10.15 1996 Stock Incentive Plan as amended through June 28, 2001. (b) (j) 10.16 Non-Employee Directors Stock Option Plan. (a) (b) 10.17 Amended and Restated Asset Purchase Agreement between Kaiser Aluminum & Chemical Corporation and Ravenswood Acquisition Corporation, dated as of December 13, 1988. (a) 10.18 Acquisition Agreement between Virgin Islands Alumina Corporation and St. Croix Alumina, L.L.C., dated July 19, 1995. (a) 10.19 Ravenswood Environmental Services Agreement between Kaiser Aluminum & Chemical Corporation and Ravenswood Aluminum Corporation, dated as of February 7, 1989. (a) 10.20 Asset Purchase Agreement between Xstrata Aluminum Corporation and Berkeley Aluminum, Inc. dated as of March 31, 2000. (g) 10.21 Form of Tax Sharing Agreement. (a) 10.22 Form of Disaffiliation Agreement. (a) 10.23 Amended and Restated Owners Agreement between Alumax of South Carolina, Inc., Berkeley Aluminum, Inc. and Glencore Primary Aluminum Company LLC, dated as of January 26, 1996. (a) 10.24 Limited Term Firm Power Supply Agreement between Ravenswood Aluminum Corporation and Ohio Power Company dated as of July 1, 1996. (c) 10.25 Amendment No. 1 to the Limited Term Firm Power Supply Agreement between Ravenswood Aluminum Corporation and Ohio Power Company dated as of January 13, 1997. (c) 10.26 Century Aluminum Company 1996 Stock Incentive Plan Implementation Guidelines. (b) 10.27 Century Aluminum Company Incentive Compensation Plan. (b) (d)
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EXHIBIT NUMBER DESCRIPTION OF EXHIBIT ------ ---------------------- 10.28 Revolving Credit Agreement, dated as of April 2, 2001, among Century Aluminum Company, Century Aluminum of West Virginia, Inc., Berkeley Aluminum, Inc., Century Kentucky, Inc., Metalsco, Ltd. And NSA, Ltd., as borrowers, the lending institutions listed on Schedule 1 thereto as Lenders, Fleet Capital Corporation as Agent, Fleet Securities Inc. as Arranger, and Credit Suisse First Boston, Inc. as Syndication Agent. (j) 10.29 Collective Bargaining Agreement, effective April 2, 2001, between Century Aluminum of Kentucky, LLC and the United Steelworkers of America, AFL-CIO-CLC. (j) 10.30 Owners Agreement, dated as of April 2, 2001, between NSA, Ltd., Glencore Acquisition I LLC and Century Aluminum of Kentucky, LLC. (j) 10.31 Shared Services Agreement, dated April 2, 2001, by and between Century Aluminum Company, NSA, Ltd., Glencore Acquisition I LLC and Southwire Company. (j) 21.1 List of Subsidiaries.* 23.1 Consent of Deloitte & Touche LLP.*
- ---------- * Included in Century Aluminum Company's Form 10-K for the fiscal year ended December 31, 2001, filed on March 27, 2002. (a) Incorporated by reference to the Registrant's Form S-1 Registration Statement, as amended, Registration No. 33-95486. (b) Management contract or compensatory plan. (c) Incorporated by reference to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1996. (d) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998. (e) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 1999. (f) Incorporated by reference to the Registrant's Report on Form 8-K dated October 6, 1999. (g) Incorporated by reference to the Registrant's Report on Form 8-K dated April 20, 2000. (h) Incorporated by reference to the Registrant's Report on Form 8-K dated April 17, 2001. (i) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2001. (j) Incorporated by reference to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 30, 2001. (b) REPORTS ON FORM 8-K: NONE 10 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Form 10-K/A to be signed on its behalf by the undersigned, thereunto duly authorized. CENTURY ALUMINUM COMPANY By: /s/ CRAIG A. DAVIS ----------------------- Craig A. Davis Chairman and Chief Executive Officer Dated: June 4, 2002 Pursuant to the requirements of the Securities Exchange Act of 1934, this Form 10-K/A has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ Craig A. Davis Chairman and Chief Executive Officer June 4, 2002 ----------------------------------- Craig A. Davis /s/ Gerald A. Meyers President, Chief Operating Officer June 4, 2002 ----------------------------------- and Director Gerald A. Meyers /s/ David W. Beckley Executive Vice President and June 4, 2002 ----------------------------------- Chief Financial Officer David W. Beckley /s/ Gerald J. Kitchen Executive Vice President, General June 4, 2002 ----------------------------------- Counsel, Chief Administrative Officer and Gerald J. Kitchen Secretary /s/ Roman A. Bninski Director June 4, 2002 ----------------------------------- Roman A. Bninski /s/ John C. Fontaine Director June 4, 2002 ----------------------------------- John C. Fontaine /s/ John P. O'Brien Director June 4, 2002 ----------------------------------- John P. O'Brien /s/ Willy R. Strothotte Director June 4, 2002 ----------------------------------- Willy R. Strothotte
EX-10.26 3 y61269kexv10w26.txt 1996 STOCK INCENTIVE PLAN IMPLEMENTATION GUIDELINE Exhibit 10.26 CENTURY ALUMINUM COMPANY 1996 STOCK INCENTIVE PLAN IMPLEMENTATION GUIDELINES [PERFORMANCE SHARE AWARDS] (AS AMENDED DECEMBER 14, 2001) 1. PURPOSE These guidelines ("Guidelines") are intended to provide direction for implementation of the Century Aluminum Company's (the "Company") 1996 Stock Incentive Plan (the "Plan") with respect to Performance Share Awards. The Plan is intended to advance the interests of the Company by enabling Executive Officers and other key employees of the Company and its Subsidiaries to acquire proprietary interests in the Company, which interests, to the extent deemed reasonably possible by the Committee, are "performance-based compensation" within Section 162(m) of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder, through achievement by the Company of specified future performance and earnings goals. 2. BACKGROUND AND GENERAL CONSIDERATIONS The Company is a relatively small new entrant in a highly volatile commodity business. Its goals are to grow and to achieve financial results that meet or exceed those attained by its best-performing competitors. The Company began its public existence in 1996 with several competitive disadvantages. It was small, its principal production facilities were high cost and approximately 40 years old, and it inherited the dual financial burdens of funding one of the nation's most under-funded pension plans and infusing needed capital into facilities badly in need of the same. Faced with these goals and challenges, Management has completed several important projects that will contribute to reaching the Company's goals. It has profitably divestited its non-profitable, capital-intensive, rolling business, acquired interests in the lower-cost Mt. Holly and Hawesville reduction plants and funded the pension plan, among other things. In retrospect, and looking forward, it is clear Managements' performance goals and objectives, and the weighting of those goals and objectives, appropriately may vary widely in importance from time-to-time. In order for the Implementation Guidelines to fulfill the purposes described above, then, the Goals established by the Committee likewise might vary in importance and weighting from time-to-time. Furthermore, in order to deal with the uncertainties of the volatile aluminum market, these Guidelines should provide flexibility to encourage the Company to manage through commodity cycles, not manage to them. In general, Guideline Goals (as defined below) might include some or all of the following, or other factors determined by the Committee to be of material importance to the growth and profitability of the Company, weighted or valued as determined by the Committee: A. Strategic performance Goals, such as completing an acquisition, disposing of non-performing assets, achieving a strategic restructuring, competitively securing a key resource (e.g., electrical power or alumina) or developing key management through recruiting, training and succession planning; B. Cost reductions, such as lowering cash operating costs by targeted amounts, or meeting other operational improvement performance objectives such as successfully completing capital expenditure programs or contributing to the growth of the Company through research, processing or manufacturing improvements and marketing gains; and C. Meeting financial performance targets that may be the aggregate of each annual profit plan in any Plan Period or may be expressed in terms of (i) earnings per Share, (ii) pre-tax profits (either at the Company or business unit level), (iii) net earnings or net worth, (iv) return on equity or assets, (v) any combination of the foregoing, or (vi) any other standard or standards deemed appropriate by the Committee. 3. DEFINITIONS A. "Award" shall be as defined in Section 5. B. "Award Targets" generally shall include elements of all of the following, with the relative weighting of each element to be as determined by the Committee; however, the Committee retains full discretion to include fewer than all of these elements in an Award Target: (1) The achievement of one or more strategic or other Goals of the sort described in Section 2. A.; and (2) The accomplishment of cost improvements or other operational performance Goals as generally described in Section 2. B; and (3) The attainment by the Company of specified financial performance Goals as described in Section 2. C. Page 2 Goals set for Award Target purposes shall be guided by (but need not be the same as) the goals and objectives for the Company as contained in and submitted to the Board annually in Company three-year business plans. C. "Board" shall mean the Board of Directors of the Company. D. "Committee" shall mean the Compensation Committee of the Board of Directors of the Company, two members or more of whom shall be "outside directors" within the meaning of Internal Revenue Code Section 162(m). E. "Company" shall mean Century Aluminum Company. F. "Participant" shall mean any full-time salaried employee of the Company or a Subsidiary designated as a Participant by the Committee. G. "Performance Shares" shall have the meaning set forth in the Plan and shall entitle the grantee to receive one share of the Company's common stock for each Performance Share awarded. H. "Plan Periods" shall mean overlapping periods of three consecutive calendar years each, the first of which commenced January 1, 2001, and will end December 31, 2003. I. "Section" shall mean a section of these Guidelines. J. "Subsidiary" shall mean any corporation the voting stock of which is 50% or more is owned, directly or indirectly, by the Company. 4. TERM Implementation of these Guidelines shall commence with the Plan Period that commenced as of January 1, 2001, and shall continue until such time as terminated by the Board. 5. AWARD A. AWARD. The Committee, on or before each May 15 during each of the Plan Periods, shall make an award of Performance Shares to each Participant, which award shall be communicated in writing to each Participant by the Chief Executive Officer of the Company. Initially, Awards shall not be granted in amounts that exceed the Page 3 applicable percentages set forth below (i.e., 45% to 100%). Awards may be increased above those amounts only at the end of a Plan Period, and then only in the event (and to the extent) that the Committee determines the Company has exceeded its Target or Targets. For an Award to be granted at 150% of the applicable percentage, the Committee must determine that the Company has exceeded every one of its Targets for the applicable Plan Period. Awards will be issued as provided in Section 6. The Award for each Participant shall be determined by creating a monetary award, and converting that monetary award to Performance Share units. The monetary award shall be a percentage of such Participant's base salary (within the allowable range), which percentage shall be established by the Committee at the beginning of each of the Plan Periods. The allowable percentages are as follows: PARTICIPANT'S POSITION RANGE OF ALLOWABLE PERCENTAGES ---------------------- ------------------------------ (of Base Salary) CEO; President 45% to 100% Executive VPs 45% to 80% All Other VPs 45% to 60% Business Unit Head and Senior Staff 15% to 45% The number of Performance Shares in a Participant's Award shall be determined by dividing the Participant's monetary award by the average closing price for the Company's common stock for the month preceding the month in which the grant is made. B. AWARD TARGET; ADJUSTED AWARD; AMENDING TARGET ASSUMPTIONS. (1) COMMITTEE DISCRETION. Notwithstanding any other provision of these Guidelines, the Committee shall have full and complete discretion to modify any award otherwise payable hereunder in light of considerations deemed appropriate by the Committee. This discretion shall include the right to determine that no award should be payable. (2) AWARD TARGET. If the Award Targets are achieved in their entirety within the expectations of the Committee, then Participants shall be issued the number of shares equal to the number of Performance Share units in Participants' Awards initially granted as provided in Section 5. A. Page 4 (3) ADJUSTED AWARD. If some or all of the Award Targets are exceeded, the Committee may approve Awards in excess of the initial grants; however, the Committee may not approve Awards at the 150% level unless all of the Award Targets have been exceeded. If the Award Targets are not achieved in their entirety, Awards shall be adjusted downward from the initial Awards or eliminated entirely, at the discretion of the Committee, and Participants shall be issued proportionally reduced number of shares, or none at all. (4) AMENDING AWARD TARGET ASSUMPTIONS. Achievement of specified financial Award Targets under Section 3. C. may depend on the accuracy of the Company's forecasts of LME primary aluminum prices. In such cases, to the extent average LME prices vary, plus or minus, by more than $50 from forecasted LME aluminum prices in any year of a Plan Period, the Committee will have the discretion to appropriately amend the Award Target to more accurately reflect LME aluminum prices for such year, and the Company's performance will be measured against such amended Award Target. 6. ISSUANCE OF AWARDS A. On or before March 15 of each calendar year (or, if required, such later date when the annual audited financial statement of the Company are available) the Company shall, with respect to the Plan Period that has just ended, issue to each Participant Performance Shares in an amount equal to such Participant's Award or Adjusted Award. B. Except as provided in Section 6.C., no payment with respect to any Award shall be made to a Participant who is not employed full time by the Company or a Subsidiary on the 31st day of December preceding the date of issuance provided in Section 5.A. C. In the event of death, permanent disability or retirement of a Participant in any year following an Award, the Participant or his representative or designated beneficiaries shall be entitled to receive a portion of the amount calculated under Section 6.A., and payable in the year following death, permanent disability or retirement, determined by multiplying such amount by a fraction, the numerator of which is the number of weeks of full employment during any Plan Period and the denominator of which is 156 for any Plan Period. Page 5 D. If an employee is selected as a Participant at any time other than the beginning of any Plan Period, such Participant shall be entitled to receive a portion of the amount calculated under Section 6.A. by multiplying such amount by a fraction the numerator of which is the number of weeks that such employee was a Participant under the plan during any Plan Period and the denominator of which is 156. For the purposes of this Section 6.D. an employee shall be deemed to have been a Participant under the Plan as of January 1 of the calendar year in which such employee was first selected as a Participant if such selection occurred on or before May 15 of such calendar year, and if such selection occurred after May 15 of any calendar year the employee shall be deemed to have first become a Participant on January 1 of the calendar year immediately following the employee's election as a Participant. 7. ADMINISTRATION A. Each grant of a Performance Share shall be evidenced by an agreement executed on behalf of the Company by an officer designated by the Compensation Committee and accepted by the recipient. Such agreement shall state that such award is subject to all the terms and provisions of the Plan. B. Full power and authority to amend, modify, terminate, construe, interpret and administer these Guidelines shall be vested in the Committee. Any interpretation of these Guidelines by the Committee or any administrative act by the Committee shall be final and binding on all Participants. 8. NON-ASSIGNABILITY Nothing in these Guidelines shall be deemed to make rights granted pursuant hereto assignable or transferable by a Participant except pursuant to the laws of descent and distribution. No rights under these Guidelines may be hypothecated or encumbered in any manner whatsoever, and creditors of Participants shall have no right or power to obtain all or any portion of grants made hereunder. Any attempted assignment, hypothecation or encumbrance by a Participant shall be null and void. Each Participant may, however, designate one or more beneficiaries under the Plan on a form to be supplied by the Secretary of the Company. Page 6 Adopted by the Board on December 14, 2001. /s/ Craig A. Davis ------------------------------ Craig A. Davis, Chairman /s/ Gerald J. Kitchen - ----------------------------------- Gerald J. Kitchen, Secretary Page 7 -----END PRIVACY-ENHANCED MESSAGE-----