COMMONWEALTH INDUSTRIES, INC.
1997 Stock Incentive Plan
As Amended and Restated April 23, 1999
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 or unrestricted 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
and unrestricted Common Stock and shares 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.
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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 2,600,000
(of which no more than 1,350,000 shares may be issued pursuant to Awards under
which a Participant may pay less for such shares than their Fair Market Value on
the date of purchase), 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.
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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
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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
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Committee shall determine. Except in the case of a holder's incapacity, an
Option shall be exercisable only by the holder thereof.
6. Restricted and Unrestricted Stock. The Committee may from
time to time award restricted or unrestricted 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.
The transfer or sale of unrestricted shares of Common Stock
may be made on such terms and conditions as the Committee may determine, and
payment for such shares may be made in cash or in such other manner as may be
determined by the Committee, including full-recourse loans by the Company, which
may be secured by all or a portion of such shares of Common Stock.
7. Non-Employee Director Stock Options and Shares.
Nonqualified Stock Options to purchase 5,000 shares of Common Stock, the number
of shares being
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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 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 shares of Common Stock having a Fair Market Value on the date of grant
of $15,000 (with cash in lieu of fractional shares) 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 or upon earlier
termination of service of that individual as a director for any reason and shall
terminate 10 years from the date of grant.
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 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 the 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;
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(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
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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
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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
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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 Plan became effective on April 17,
1997.
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.
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