United States Securities and Exchange Commission
Washington, D.C. 20549
Form 10-Q
---------
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
Commission File No. 0-25642
----------
COMMONWEALTH ALUMINUM CORPORATION
(Exact name of Registrant as specified in its Charter)
Delaware 13-3245741
(State of incorporation) (IRS employer identification number)
1200 Meidinger Tower 40202
Louisville, Kentucky (Zip code)
(Address of principal executive offices)
Registrant's telephone number, including area code (502) 589-8100
----------
The registrant had 10,200,000 shares of common stock outstanding at July 17,
1996.
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 ____
<PAGE>
COMMONWEALTH ALUMINUM CORPORATION
Index to Quarterly Report Form 10-Q
For the Quarter Ended June 30, 1996
Part I - Financial Information
Item 1 - Financial Statements (Unaudited) Page Number
Condensed Consolidated Balance Sheets as of June 30, 1996 3
and December 31, 1995
Condensed Consolidated Statements of Income for the three 4
months and six months ended June 30, 1996 and 1995
Condensed Consolidated Statements of Cash Flows for the six 5
months ended June 30, 1996 and 1995
Notes to the Condensed Consolidated 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 4 - Submission of Matters to a Vote of Security Holders 9
Item 6 - Exhibits and Reports on Form 8-K 9
Signatures 10
<PAGE>
COMMONWEALTH ALUMINUM CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
--------- -----------
(in thousands)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents .................................. $ 802 $ 2,665
Accounts receivable ........................................ 102,410 92,355
Inventories ................................................ 106,067 125,683
Due (to) from broker ....................................... (2,316) 440
Prepayments and other current assets ....................... 5,925 6,032
--------- ---------
Total current assets .................................. 212,888 227,175
Property, plant and equipment .................................. 185,669 189,562
Other noncurrent assets ........................................ 3,737 3,947
--------- ---------
Total assets .......................................... $ 402,294 $ 420,684
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings ...................................... $ -- $ 4,000
Current portion of long-term debt .......................... 6,862 10,504
Accounts payable ........................................... 36,408 44,284
Accrued liabilities ........................................ 12,907 14,655
Deferred (loss) gain ....................................... (2,316) 440
--------- ---------
Total current liabilities ............................. 53,861 73,883
Long-term debt ................................................. 30,307 33,871
Payable to Lockheed Martin ..................................... 3,492 3,492
Accrued pension benefits ....................................... 18,788 18,480
Accrued postretirement benefits ................................ 79,061 77,895
--------- ---------
Total liabilities ..................................... 185,509 207,621
--------- ---------
Commitments and contingencies .................................. -- --
Stockholders' equity:
Common stock, $.01 par value, 50,000,000 shares authorized,
10,200,000 and 10,190,000 shares outstanding at
June 30, 1996 and December 31, 1995, respectively .... 102 102
Additional paid-in capital ................................ 301,324 301,114
Accumulated deficit ....................................... (80,075) (83,549)
Unearned compensation ..................................... (2,297) (2,335)
Minimum pension adjustment ................................ (2,269) (2,269)
--------- ---------
Total stockholders' equity ............................ 216,785 213,063
--------- ---------
Total liabilities and stockholders' equity ............ $ 402,294 $ 420,684
========= =========
The accompanying notes are an integral part
of the condensed consolidated financial statements
</TABLE>
<PAGE>
COMMONWEALTH ALUMINUM CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 1996 AND 1995
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
------------------------------ ----------------------------
(in thousands, except per share amount)
<S> <C> <C> <C> <C>
Net sales $ 159,672 $ 192,229 $ 327,216 $ 366,136
Cost of goods sold 150,802 171,505 308,535 327,822
-------------- ------------ ------------ ------------
Gross profit 8,870 20,724 18,681 38,314
Selling, general and administrative expenses 6,224 5,540 12,200 11,509
-------------- ------------ ------------ ------------
Operating income 2,646 15,184 6,481 26,805
Halco income - 960 - 1,263
Other (expense) income, net (9) 3,076 (247) 2,942
Interest expense, net (443) (1,457) (1,122) (1,849)
-------------- ------------ ------------ ------------
Income before income taxes 2,194 17,763 5,112 29,161
Provision for income taxes 92 4,846 617 7,582
-------------- ------------ ------------ ------------
============== ============ ============ ============
Net income $ 2,102 $ 12,917 $ 4,495 $ 21,579
============== ============ ============ ============
Earnings per share $ 0.21 $ 1.27 $ 0.44 $ 2.12
Weighted average shares outstanding 10,196 10,190 10,196 10,190
Dividends per share $ 0.05 $ 0.05 $ 0.10 $ 0.05
The accompanying notes are an integral part
of the condensed consolidated financial statements
</TABLE>
<PAGE>
COMMONWEALTH ALUMINUM CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Six months ended June 30,
--------------------------------
1996 1995
------------ -------------
(in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,495 $ 21,579
Adjustments to reconcile net income to net cash
provided by operations:
Depreciation and amortization 8,963 9,111
Provision for losses on accounts receivable 24 4
Changes in assets and liabilities:
Increase in accounts receivable (10,079) (25,062)
Decrease (increase) in inventories 19,616 (7,148)
Decrease (increase) in prepayments
and other current assets 107 (1,360)
Decrease in accounts payable (7,876) (12,076)
(Decrease) increase in accrued liabilities (1,748) 3,484
Increase in other liabilities 1,474 1,874
------------ -------------
Net cash provided by (used for) operating activities 14,976 (9,594)
------------ -------------
Cash flows from investing activities:
Additions to property, plant and equipment (4,822) (11,330)
Disposals of property, plant and equipment 210 208
------------ -------------
Net cash used in investing activities (4,612) (11,122)
------------ -------------
Cash flows from financing activities:
Dividends paid on common stock (1,021) (509)
Proceeds from short-term borrowings 9,050 25,000
Repayments of short-term borrowings (13,050) (2,400)
Proceeds from long-term debt - 50,000
Repayments of long-term debt (7,206) (1,875)
Payment to prior sole shareholder - (50,000)
Miscellaneous receipts from prior sole shareholder - 500
------------ -------------
Net cash (used for) provided by financing activities (12,227) 20,716
------------ -------------
Decrease in cash and cash equivalents (1,863) -
Cash and cash equivalents, beginning of period 2,665 -
------------ -------------
Cash and cash equivalents, end of period $ 802 $ -
============ =============
The accompanying notes are an integral part
of the condensed consolidated financial statements
</TABLE>
<PAGE>
COMMONWEALTH ALUMINUM CORPORATION
NOTES TO THE CONDENSED CONSOLIDATED STATEMENTS
(Unaudited)
1. Basis of Presentation
The accompanying 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 statements have been prepared in accordance with
Commonwealth Aluminum Corporation'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. The adjustments made were of a normal
recurring nature.
2. Inventories
The Company uses the first-in, first-out (FIFO) method for determining
the cost of inventory.
(in thousands) June 30, 1996 December 31, 1995
Raw Materials $ 12,734 $ 26,438
Work in Process 60,685 55,585
Finished Goods 21,193 32,676
Expendable Parts and Supplies 11,455 10,984
---------- -----------
Total $ 106,067 $ 125,683
---------- -----------
On June 30, 1996, the Company had deferred realized losses of $2.4
million on closed futures contracts which are recorded as an increase to the
carrying value of inventory. The Company had deferred realized gains of $0.2
million at December 31, 1995.
3. Provision for Income Taxes
The effective rate for the quarter ended June 30, 1996 is less than the
rate for the quarter ended June 30, 1995 as a result of the increased effect
upon taxable income of the expected utilization of the Company's net operating
loss carryforward.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Overview
The Company manufactures non-heat treat coiled aluminum sheet for the
transportation, construction and consumer durables end use markets. The Company
produces coiled sheet from aluminum scrap and primary aluminum. Three factors
generally determine the financial performance of the Company, 1) sales volume,
2) material margin (the selling price of the coiled sheet less the cost of raw
materials) and 3) conversion costs (the direct cost of converting raw material
into finished product). 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 second quarter, the marketplace remained highly competitive as
material margins fell to their lowest levels in over two years. This continues a
trend that began during the third quarter of 1995, when, in anticipation of
falling metal prices, customers began shortening their lead times for new
orders. Comparing pounds shipped for the first six months of 1996 to the similar
1995 period shows a decline of 1%. By contrast, the industry experienced a
greater decline. Thus, the Company increased its market share during the first
six months. This has helped lessen the impact of lower material margins.
Results of Operations for the three months and six months ended June 30, 1996
and 1995
Net Sales. Net sales for the quarter ended June 30, 1996, decreased 17% to
$159.7 million from $192.2 million for the same period in 1995. Net sales for
the six month period ended June 30, 1996, were $327.2 million, an 11% decrease
from the year earlier comparable period. This decrease was due primarily to
lower selling prices and generally lower metal costs. Average selling prices for
the quarter ended June 30, 1996, were $1.02 per pound, a decrease of 14% from
$1.18 per pound for the quarter ended June 30, 1995. Average selling prices for
the six months ended June 30, 1996 were $1.04 per pound, a decrease of 10% from
the $1.15 per pound for the comparable year earlier period. This decrease can be
primarily attributed to lower overall demand for finished products leading to
downward pressure on prices. Unit sales volume decreased 4% to 156.6 million
pounds for the second quarter of 1996 from 162.4 million pounds for the second
quarter of 1995. There was a smaller decrease of 1% for the first half of the
year as compared to the first half of 1995.
Gross Profit. Gross profit for the quarter ended June 30, 1996, decreased to
$8.9 million from $20.7 million for the same period in 1995. Gross profit for
the six months ended June 30, 1996 was $18.7 million, a 51% decrease from the
$38.3 million in the year earlier comparable period. This decrease was
attributable primarily to the lower material margins resulting from reduced
sales prices. Material margins dropped 17% for the six months ended June 30,
1996 when compared to the year earlier period. The Company's unit costs rose, as
compared to the same period in 1995, as a result of the lower unit volumes, a
more difficult product mix, and the stable fixed cost nature of the business.
Operating Income. The Company produced operating income of $2.6 million for the
second quarter of 1996 compared with $15.2 million for the second quarter of
1995. For the six month period ended June 30, 1996, operating income was $6.5
million, down from $26.8 million for the year earlier comparable period.
Selling, general and administrative expenses during the second quarter of 1996
were $6.2 million, compared with $5.5 million for the same period in 1995 and
$12.2 million for the six months ended June 30, 1996, compared with $11.5 for
the same period in 1995. This increase generally related to staffing changes,
professional services and one-time miscellaneous payments.
<PAGE>
Net Income. Net income was $2.1 million for the quarter ended June 30, 1996,
compared with $12.9 million for the same period in 1995. Net income for the six
months ended June 30, 1996 was $4.5 million compared with $21.6 million for the
comparable year earlier period. The Company had income of $1 million during the
second quarter of 1995 and $1.3 million for the six months ended June 30, 1995
associated with an investment in Halco, which was assigned to the former parent
company when the Company went public. Also included in the second quarter of
1995 was a reversal of accrued energy taxes as a result of a tax settlement with
the Kentucky Revenue Cabinet which totaled $2.0 million of income after tax.
Interest expense was $0.4 million for the quarter ended June 30, 1996 and $1.5
million for the comparable period in 1995. This decrease is a result of the
Company's reduction of both its short-term and long-term debt. Provision for
income taxes was $0.1 million in the second quarter of 1996 and $4.8 million for
the same period in 1995, primarily due to lower pre-tax income and a lower
effective tax rate. The effective rate for the quarter ended and six months
ended June 30, 1996 is less than the rate for the quarter ended and six months
June 30, 1995 as a result of the increased impact of the tax loss carryforward
on this year's earnings.
Liquidity and Capital Resources
The Company's sources of liquidity are cash flows from operating activities and
borrowings under its $100 million revolving credit facility. There were no
borrowings outstanding under this facility on June 30, 1996. The Company
believes that these sources will be sufficient to fund its working capital
needs, capital expenditures, debt service and dividend payments in 1996.
Working capital increased to $159 million at June 30, 1996 from $153 million at
December 31, 1995.
Capital expenditures were $2.9 million during the quarter ended June 30, 1996
and $4.8 million year-to-date. At June 30, 1996, the Company had commitments of
$8.6 million for the purchase or construction of capital assets. Total capital
expenditures for the year 1996 are expected to be approximately $18 million,
principally related to upgrading the Company's manufacturing facilities.
Commodity 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 June 30, 1996, the
Company held purchase and sales commitments through 1997 totaling $32.7 million
and $84.9 million, respectively. The Company held futures contracts,
marked-to-market at June 30, 1996, with a net unrealized loss of $2.3 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.
<PAGE>
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 or 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 the Company's management, such
proceedings and actions should not, individually or in aggregate, have a
material adverse effect on the Company's financial condition or results of
operations.
Item 4. Submission of Matters to a Vote of Security Holders
At the Company's Annual Meeting of Stockholders, held April 18, 1996, the
following two matters were submitted for a vote by the security holders:
Mr. Mark V. Kaminski was elected as a Director for a term expiring in 1999.
There were 8,814,632 votes cast for and 55,494 abstentions. The terms of
office of Paul E. Lego, Catherine G. Burke, John E. Merow and Victor Torasso
continued after the meeting.
Coopers & Lybrand L.L.P. were selected to be the Company's independent
accountants for 1996. There were 8,828,607 votes cast for and 16,608 votes cast
against with 24,911 abstentions.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.1 Deferred Compensation Plan
11.1 Calculation of Earnings Per Common Share
27.1 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended June 30,
1996.
<PAGE>
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 Aluminum Corporation
By: /s/ Donald L. Marsh, Jr.
-------------------------
Donald L. Marsh, Jr.
Vice President, Chief Financial
Officer and Secretary
Date: July 17, 1996
COMMONWEALTH ALUMINUM
DEFERRED COMPENSATION PLAN
696
<PAGE>
TABLE OF CONTENTS
Article Title Page No.
1 Name 1
2 Purpose 2
3 Definitions 3
4 Operation and Administration 7
5 Eligibility for Participation 10
6 Participant Allocations 12
7 Company Allocations 14
8 Establishment of Accounts 15
9 Maintenance of Accounts and Valuation
of Plan 16
10 Funding Limitations 18
11 Vesting 19
12 Regulations Governing Distribution of
Benefits after Termination of Employment 20
13 Beneficiary Designation 26
14 Amendment and Termination 27
15 General Provisions 28
696
<PAGE>
COMMONWEALTH ALUMINUM
DEFERRED COMPENSATION PLAN
Article 1
Name
The plan set forth herein shall be known as the Commonwealth Aluminum Deferred
Compensation Plan.
696
<PAGE>
Article 2
Purpose
The plan is intended to constitute a nonqualified deferred retirement plan
which, in accordance with ERISA ss.ss. 201(2), 301(a)(3) and 401(a)(1), is
"unfunded and maintained by an employer primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees."
The purpose of the Plan is to acknowledge and reward certain key employees of
the Company for their efforts on behalf of the Company by maximizing their
ability to save on a tax-deferred basis and providing such key employees with
benefits that shall not be restricted by any qualified plan limitations and/or
requirements. Such limitations and requirements shall include, but not be
limited to, the following:
2.1 Elective Deferral Contribution Limitation
The $9,500 (1996 limit) limitation placed on elective
employee contributions in accordance with Sections 402(g)
of the Internal Revenue Code (the "Code"), which
limitation shall be adjusted annually for increases in
the cost-of-living in accordance with Section 415(d) of
the Code.
2.2 Compensation Limitation
The $150,000 (1996 limit) maximum on compensation taken
into account for all purposes under a qualified plan in
accordance with Section 401(a)(17) of the Code, which
limitation shall be adjusted for increases in the
cost-of-living in accordance with Section 401(a)(17)(B)
of the Code.
2.3 Limitation on Annual Additions
The limitation on annual additions to qualified
retirement plans in accordance with Section 415(c) of the
Code, which limitation shall be adjusted annually for
increases in the cost-of-living in accordance with
Section 415(d) of the Code.
2.4 Nondiscrimination Requirements
The nondiscrimination testing requirements under Sections
401(k) and (m) of the Code.
696
<PAGE>
Article 3
Definitions
For purposes of the Plan, the following words and phrases shall have the
following meanings unless a different meaning is plainly required by the
context. Wherever used, the masculine pronoun shall include the feminine pronoun
and the feminine pronoun shall include the masculine and the singular shall
include the plural and the plural shall include the singular.
3.1 "Account" shall mean a recordkeeping source from which Plan
benefits are provided. The specific Accounts under this Plan
are listed in Section 8.1 and described more fully in
Section 12.
3.2 "Beneficiary" shall mean the person or persons designated in
accordance with Article 13 to receive any benefits under the
Plan in the event of a Participant's death.
3.3 "Benefit Commencement Date" shall mean the date as of which
the Participant's benefit commences. Such commencement shall
occur as soon as administratively possible following the
Participant's Determination Date.
3.4 "Board of Directors" shall mean the full Board of Directors
of the Company.
3.5 "Bonus Compensation" shall mean any cash remuneration paid to
a Participant, excluding Regular Compensation, as a specific
incentive bonus or award, including Voluntary Deferral
Allocations made hereunder, the source of which is Bonus
Compensation.
3.6 "Committee" shall mean the Board of Directors or the person
or persons appointed by the Board of Directors to administer
the Plan.
3.7 "Company" shall mean Commonwealth Aluminum Corporation, or
any affiliate, subsidiary or associate company which shall
adopt the Plan for its employees with the approval of
Commonwealth Aluminum Corporation, including any successor to
the Company as a result of a statutory merger, purchase of
assets or any other form of reorganization of the business of
the Company.
3.8 "Determination Date" shall mean the date on which the
Participant's termination of employment occurs.
3.9 "Disability" or "Disabled" shall mean any physical or mental
condition which meets the definition and provisions described
696
<PAGE>
in the Company's group long-term disability contract covering
the Participants in this Plan.
3.10 "Disability Termination Date" shall mean one year following
the date on which a Participant is Disabled if the
Participant remains Disabled on such date.
3.11 "Effective Date" shall mean July 1, 1996, the date as of
which the Plan was established.
3.12 "Employee" shall mean a person who is employed by the Company
and falls under the usual common law rules applicable in
determining the employer-employee relationship.
3.13 "Key Employee" shall mean an Employee who is designated for
eligibility in the Plan by the Committee in accordance with
Section 4.2.
3.14 "Layoff" shall mean a Participant's termination of employment
(a) as part of a job elimination program initiated by the
Company; and/or
(b) as the result of the Company's need to reduce expenses.
3.15 "Participant" shall mean any Employee who is participating in
the Plan in accordance with the provisions herein set forth.
3.16 "Plan" shall mean the Commonwealth Aluminum Deferred Compensation
Plan as it may be amended from time to time.
3.17 "Plan Contributions" shall mean the total of the
Participant's Voluntary Deferral Allocations made in
accordance with Section 6.1 and the Company's Discretionary
Allocations made in accordance with Section 7.1 for the Plan
Year of reference.
3.18 "Plan Year" shall mean a period of six consecutive
months commencing on the Effective Date and ending on
December 31, 1996. Thereafter, "Plan Year" shall mean a
period of 12 consecutive months commencing on January 1, 1997
and each January 1 thereafter.
3.19 "Regular Compensation" shall mean the Participant's wages for
the Plan Year paid by the Company of the type reported in
box 1 of Form W-2 (1993). Such wages shall include amounts
within the meaning of Section 3401(a) of the Code plus any
other amounts paid to the Participant by the Company for
which the Company is required to furnish a written statement
under Section 6041(d), 6051(a)(3) and 6052 of the Code,
determined without regard to any rules that limit the amount
696
<PAGE>
required to be reported based on the nature or location of
the employment or services performed,
(a) exclusive of
(i) Bonus Compensation;
(ii) severance pay on a non payroll basis;
(iii) nonqualified plan payments; and
(iv) welfare benefits, fringe benefits
(cash and non-cash),
reimbursements of other expense
allowances and moving expenses.
(b) inclusive of
(i) any amounts deferred under any
nonqualified plan, including the Plan;
and
(ii) the amount of any contributions
made by the Company under any
salary reduction or similar
arrangement to a qualified
deferred compensation, pension or
cafeteria plan, or contributions
to a simplified employee pension
plan described in Section 408(k)
of the Code.
3.20 "Retirement" shall mean (a) or (b), whichever is applicable:
(a) "Normal Retirement" shall mean the termination of
employment of a Participant for any reason other than
Disability or death on or following his Normal Retirement
Date.
(b) "Early Retirement" shall mean the termination of employment
of a Participant for any reason other than Disability or
death on or following his Early Retirement Date.
3.21 "Retirement Date" shall mean (a) or (b), whichever is
applicable:
(a) "Normal Retirement Date" shall mean the first date
coincident with or following the date on which a
Participant attains age 65.
(b) "Early Retirement Date" shall mean the first date
coincident with or following the date on which a
Participant attains age 55, provided he has completed as
five Years of Service as of such date.
696
<PAGE>
3.21 "Retirement Date" shall mean first date coincident with or
following the date on which a Participant attains age 65.
3.22 "Trust Agreement" shall mean the instrument executed by the
Company and the Trustee fixing the rights and liabilities of
each with respect to holding and administering the Trust
Fund.
3.23 "Trustee" shall mean the Trustee or any successor Trustee,
appointed by the Board of Directors, acting in accordance
with the terms of the Trust Agreement.
3.24 "Trust Fund" shall mean all assets held by the Trustee for
the purposes of the Plan in accordance with the terms of the
Trust Agreement. The Board of Directors shall, subject to
the provisions of Article 10, establish such a Trust Fund
(known as a "rabbi trust") for the purpose of accumulating
funds to satisfy the obligations incurred by the Company
under the Plan.
3.25 "Valuation Date" shall mean the last day of each March, June,
September and December and such other dates as the Committee
may determine from time to time.
3.26 "Year of Service" shall mean the 12-month period beginning as
of the date a person was first hired by the Company and each
anniversary thereof during which such person remains in the
employ of the Company.
696
<PAGE>
Article 4
Operation and Administration of the Plan
4.1 Organization of the Committee
(a) The Board of Directors shall serve as the Committee to
administer the Plan or shall appoint a Committee to
administer the Plan, who, upon acceptance of such
appointment, shall serve at the pleasure of the Board
of Directors. Any member may resign by delivering his
written resignation to the Board of Directors and to
the Committee. Vacancies in the Committee arising
from resignation, death, or removal shall be filled by
the Board of Directors.
(b) The Committee shall act by a majority of its members
unless unanimous consent is required by the Plan or by
unanimous approval of its members if there are two or
less members in office at the time. In the event of a
Committee deadlock, the Committee shall determine the
method for resolving such deadlock. No Committee
member shall act upon any question pertaining solely
to himself, and the other member or members shall make
any determination required by the Plan in respect to
such member.
(c) The Committee may, by unanimous consent, delegate
specific authority and responsibilities to one or more
of its members. The member or members so designated
shall be solely liable, jointly and severally, for
their acts or omissions with respect to such delegated
authority and responsibilities. Committee members not
so designated shall be relieved from liability for any
act or omission resulting from such delegation.
4.2 Committee Discretion
The Committee shall, by written action, designate those Employees,
if any, who are to be Key Employees for purposes of Article 5.
Such designation shall remain in effect for all future Plan Years
unless and until removed by the Committee. Such removal must be
made in writing and communicated to the applicable Key Employee
prior to the Plan Year for which such action shall take effect.
No such change of status shall become effective during a Plan
Year in which a Key Employee is currently participating
unless the provisions of Subsection 5.4(c) apply.
696
<PAGE>
4.3 Authority and Responsibility
The Committee shall have full authority and responsibility to
interpret and construe the Plan and determine all questions of the
status and rights of the Participants and the amounts of their
allocations. Its interpretation, construction or determination, as
the case may be, shall be final and conclusive on both the Company
and the Participants and their respective successors, assigns,
personal representatives and Beneficiaries. Such authority and
responsibility shall include, but shall not be limited to, the
following:
(a) appointment of qualified accountants, consultants,
administrators, counsel, appraisers, or other persons
it deems necessary or advisable, who shall serve the
Committee as advisors only and shall not exercise any
discretionary authority, responsibility or control with
respect to the management or administration of the
Plan;
(b) determination of all benefits, and resolution of all
questions arising from the administration,
interpretation and application of the Plan;
(c) adoption of forms and regulations for the
administration of the Plan;
(d) remedy of all inequity resulting from incorrect
information received or communicated, or of
administrative error;
(e) settlement or compromise of any claims or debts arising
from the operation of the Plan and the commencement of
any legal actions or administrative proceeding.
4.4 Records and Reports
The Committee shall keep a record of its proceedings and acts and
shall keep books of account, records and other data necessary for
the proper administration of the Plan.
Following each Valuation Date, the Committee shall provide each
Participant with a detailed statement of his Account, including
all transactions affecting his Account during the calendar quarter
of reference, and reflecting the most recent valuation of his
Account.
4.5 Required Information
The Company, Participants or Beneficiaries entitled to
benefits shall furnish forms and any information or evidence
as requested by the Committee for the proper administration of the
Plan. Failure on the part of any Participant or Beneficiary to
comply with such request within a reasonable period of time shall
be sufficient grounds for delay in the payment of benefits until
the information or evidence requested is received.
696
<PAGE>
4.6 Payment of Expenses of Plan
The expenses of the Committee in connection with the
administration of the Plan shall be the responsibility of the
Company.
4.7 Indemnification
The Company shall indemnify the members of the Committee and
advance expenses as provided in the by-laws of the Company.
696
<PAGE>
Article 5
Eligibility for Participation
5.1 Initial Eligibility
(a) Each Key Employee on the Effective Date will be
eligible to participate in the Plan as of such date.
(b) Each other Key Employee will be eligible to participate
in the Plan as of the first day of the month following
the attainment of his status as a Key Employee in
accordance with Section 4.2.
5.2 Voluntary Participation
Participation in the Plan by Key Employees is entirely voluntary.
As further specified in Section 6.2, a Key Employee must sign an
election form and submit the signed form to the Committee before
the date he elects to become a Participant of the Plan.
5.3 Committee Rules and Regulations
The Committee shall, through the adoption of a set of rules and
regulations, provide for methods used in advising a Key Employee
of his eligibility in the Plan, and all forms necessary for the
Key Employee to elect to participate.
5.4 Cessation of Participation
(a) For purposes of Articles 6, 7 and 11, an individual
shall cease to be a Participant on the earliest of:
(i) the date on which he ceases to be a Key
Employee;
(ii) the date on which he terminates employment with
the Company; and
(iii) the date on which the Plan terminates.
(b) For all other Plan purposes, an individual shall cease
to be a Participant on the date the total vested value
of his Account has been paid.
(c) Notwithstanding the foregoing Subsections (a) and (b),
in the event that the Department of Labor (DOL) issues
regulations or other official notice specifically
defining the group of employees that may participate in
a plan of this type and any Participants at that
696
<PAGE>
time do not meet the criteria set forth in the DOL
regulations or notice, such Participants shall be
deemed to be individuals described under Subsection
(a)(i) as of the later of the effective date or
publication date of the notice or regulations, provided
such notice or regulations include a grandfather
provision for such Participants with respect to their
account balances on such date. In the event no such
grandfather provision is provided, the accounts of such
Participants shall be distributed in accordance with
the second paragraph of Subsection 12.1(a).
696
<PAGE>
Article 6
Participant Allocations
6.1 Voluntary Deferral Allocations
(a) Until the date of his cessation of participation in
accordance with Subsection 5.4(a), a Participant may,
as of the Effective Date or, if later, when first
eligible or any January 1 thereafter elect to reduce
his
1. Regular Compensation by any fixed percentage
("Regular Deferral Rate") for a current Plan Year
up to a maximum of 25% of such Regular
Compensation, and/or
2. Bonus Compensation by any fixed percentage ("Bonus
Deferral Rate") for a current Plan Year up to a
maximum of 100% of such Bonus Compensation,
and to have a corresponding amount credited to his
Accounts, in accordance with Section 8.1, by filing the
applicable forms in accordance with Section 6.2.
The deferral shall be made from Regular or Bonus
Compensation as the Participant shall specify; however,
to the extent the deferral is to be made from Bonus
Compensation and either no Bonus is paid or the Bonus
which is paid does not meet the minimum described in
Subsection (e)(ii), no deferral shall occur with
respect to such Bonus Compensation.
(b) A Participant's Voluntary Deferral Allocations made in
accordance with Subsection (a) shall take the form of
before tax deferrals to the Participant's Voluntary
Deferral Allocation Subaccount.
(c) Notwithstanding the foregoing, a Participant may not
make contributions to this Plan during any period for
which contributions must be suspended in accordance
with regulation section 1.401(k)-1(d)(2)(iii)(B)(3) of
the Code, as a condition of the Participant's receipt
of a hardship withdrawal from any plan of the Company
which includes a qualified cash or deferred
arrangement under section 401(k) of the Code.
(d) The amount of Compensation that a Participant elects to
defer shall be credited to the Participant's Accounts
as soon as practicable, but no longer than 30 days
following the date on which the Participant is paid the
nondeferred portion of the compensation which is the
source of the deferral.
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<PAGE>
(e) The minimum amount a Participant may defer for any
Plan Year with respect to
(i) his Regular Deferral Rate is $1,000.
(ii) his Bonus Deferral Rate is $1,000.
6.2 Forms Required
A Participant shall elect to contribute on forms and in the manner
prescribed by the Committee. A new election must be made prior to
each Plan Year for which the Participant is eligible to
participate in the Plan, even if the Participant does not elect to
contribute for such Plan Year.
6.3 Irrevocable Election
A Participant may not modify or discontinue his allocations for a
Plan Year after the first day thereof unless such discontinuance
is necessary to comply with the provisions of Subsection 6.1(c).
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<PAGE>
Article 7
Company Allocations
7.1 Discretionary Allocations
(a) The Company intends to allocate, for each Plan Year,
such amounts as shall be determined at the sole
discretion of the Committee.
(b) The Company's allocation, if made, shall be allocated
to each Participant in the employ of the Company on the
last day of the Plan Year in an amount to be determined
by the Committee.
Notwithstanding the foregoing provision, a Participant
shall be entitled to a share of the Company's
allocation to that Participant, if any, for the Plan
Year of (i) his Retirement, Disability or death, (ii)
the commencement or end of a leave of absence
authorized by the Company or (iii) his transfer to
another business entity to which such Participant had
been transferred by the Company, even if the
Participant is not in the employ of the Company on the
last business day of such Plan Year.
696
<PAGE>
Article 8
8.1 Establishment of Accounts
The following Accounts shall be established with respect to each
Participant:
(a) Retirement Account,
(b) Education Account and
(c) Fixed Period Account.
8.2 Account and Subaccount Allocation
(a) Each Participant shall submit to the Committee
before the beginning of the Plan Year of
reference a written statement specifying the
amount of the Plan Contributions which are to be
allocated to the Accounts listed in Subsection
8.1 and described more fully in Article 12.
(b) In the event that the Participant elects to
establish subaccounts under his Education and/or
Fixed Period Accounts, all allocations to such
Account(s) shall be equally divided among such
subaccounts.
(c) The minimum amount which may be allocated to each
Account and, if applicable, to each subaccount,
is $1,000.
8.3 Irrevocable Allocation
An Eligible Employee may not amend or revoke an allocation made
for or during a Plan Year.
696
<PAGE>
Article 9
Maintenance, Investment and Valuation of Accounts
9.1 Maintenance of Accounts
The Committee shall establish and maintain a separate accounting
in the name of each Participant, to which it shall credit all
amounts allocated in accordance with Articles 6 and 7 and all
investment experience as determined in accordance with Section 9.2
and 9.3.
9.2 Deemed Investment Fund Election
(a) Initial Election - Each Participant shall designate, in
multiples of 5%, one or more of the funds referenced in
Section 9.3 for the purpose of attributing investment
experience to his Accounts.
If the Participant fails to designate such funds, the
entire Account shall be deemed to be invested under the
most conservative of the funds selected by the
Committee in accordance with Section 9.3 (e.g. a money
market fund or a fixed income fund).
(b) Subsequent Election - A Participant may, by written
election prior to the date as of which an election is
to be effective, change his fund election with respect
to subsequent allocations but, until changed, a fund
election shall remain in effect for all subsequent Plan
Years.
(c) Transfer Election - A Participant may, by written
election change his fund election with respect to his
then existing Account, provided the transfers from fund
to fund are in multiples of 5%. Such change shall
become effective as soon as administratively possible.
(d) Such elections shall be the basis for the valuation of
a Participant's Account in accordance with Section 9.4
but shall not require the Company to actually place
assets in such funds or purchase any specific assets
for purposes of the Plan.
9.3 Funds
The Committee shall choose investment vehicles on which to base
the imputed investment experience of Participant Accounts.
696
<PAGE>
Prior to the beginning of each Plan Year, the Committee,
in its sole discretion, shall determine the general
fund categories and the specific investment vehicles to be offered
to Participants and shall notify the Participants of its
decisions.
9.4 Allocation of Investment Experience
(a) Each Participant's Account shall be valued based upon
the performance of the deemed investment fund or funds
selected by the Participant.
(b) The fair market value of any fund or funds shall be
determined by the Plan Administrator.
696
<PAGE>
Article 10
Funding Limitations
10.1 Benefit Status
(a) All benefits under the Plan are unfunded obligations
of the Company.
(b) At no time shall a Participant or the Participant's
Beneficiary have any right, title or interest in or to
any specific fund or assets of the Company.
(c) As to any claim for benefits under the Plan, the
Participant or the Participant's Beneficiary shall be a
creditor of the Company in the same manner as any other
creditor having a general claim for unpaid
compensation.
10.2 Investment and Benefit Payment Obligation of the Company
(a) Nothing contained herein shall require the Company to
set aside or earmark any monies or other assets
specifically for payments under the Plan.
(b) Neither the Company nor any Trustee shall be obligated
to purchase or maintain any asset, and any reference to
investments is solely for the purpose of computing the
value of benefits.
(c) Neither this Plan nor any action taken pursuant to the
terms of this Plan shall be considered to create a
fiduciary relationship between the Company and the Plan
Participants or any other persons, or to establish a
trust in which the assets are beyond the claims of any
unsecured creditor of the Company.
(d) Benefits are payable as they become due irrespective
of any actual investments the Company may make to meet
its obligations.
696
<PAGE>
Article 11
Vesting
11.1 Upon Retirement or the Attainment of his Disability
Termination Date
Upon eligibility for Retirement or the attainment of his
Disability Termination Date, a Participant shall have a 100%
vested interest in his Account.
11.2 Upon Death
Upon the death of a Participant, such Participant's Beneficiary
shall be entitled to a 100% vested interest in the Participant's
Account.
11.3 Upon Layoff
Upon Layoff, a Participant shall have a 100% vested interest in
his Account.
11.4 Upon Other Termination of Employment
Upon termination of a Participant's employment prior to his
Retirement, Layoff, Disability Termination Date or death, the
vested interest to which he shall be entitled with respect to
(a) that portion of his Account attributable his Voluntary
Deferral Allocations and any applicable investment
experience credited to such allocations shall be 100%;
(b) that portion of his Account attributable his Company
Discretionary Allocations and any applicable
investment experience credited to such allocations
shall be determined in accordance with the vesting
schedule for Company contributions and any related
provisions under the terms of the Commonwealth
Aluminum Performance Sharing Plan for Salaried
Employees.
11.5 Upon Change of Control
Upon any "Change of Control", a Participant shall have a 100%
vested in his Account.
For purposes of this Section, "Change of Control" shall have the
meaning specified in the severance agreements, dated as of
February 1, 1996, between the Company and various executive
officers, as such agreements were originally executed.
696
<PAGE>
Article 12
Regulations Governing Distribution of Benefits
12.1 Retirement Account.
(a) Commencement of Benefit.
If a Participant terminates employment for any reason,
including death, the Company shall pay such Participant
or his Beneficiary, if applicable, a benefit in the
form determined under Subsection (b), which shall be
distributed commencing on his Benefit Commencement
Date.
Notwithstanding the foregoing paragraph, if an
individual ceases to be a Participant in accordance
with Subsection 5.4(c) and the circumstances described
in the last sentence of such Subsection apply, the
total value of his Retirement Account (whether or not
vested) shall be distributed as soon as
administratively practicable following the later of the
effective date or publication date of the DOL notice or
regulations.
(b) Method of Distribution
(i) Upon Retirement
Distribution of the Participant's
Retirement Account as a result of the
Participant's Retirement shall be in one of
the following forms at the Participant's
election, subject to the rules set forth in
Subsection (d).
(A) a single lump sum.
(B) substantially equal annual
installments over a period of not
less than two nor more than ten
full years.
Notwithstanding the foregoing, if the
Participant's Retirement Account has a
value less than $5,000 at the time benefits
are to commence, then the Participant's
benefit shall be paid as a lump sum.
696
<PAGE>
(ii) Upon Death, Disability Termination or Other
Termination of Employment (other than
Retirement)
Distribution of the Participant's
Retirement Account as a result of the
Participant's death, Disability Termination
Date or other termination of employment
(other than Retirement) shall be in a
single lump sum.
(c) Determination of Benefits
(i) In the event that the Participant elects to
have his benefits distributed in accordance
with Subsection (b)(i)(A) or his benefits are
distributed in accordance with (b)(ii), he
shall receive a single lump sum equal to the
total vested value of his Account determined as
of his Determination Date, adjusted to reflect
any deemed investment experience which occurs
between such date and his Benefit Commencement
Date.
(ii) In the event that the Participant elects to have
his benefits distributed in accordance with
Subsection (b)(i)(B), the
(A) amount of the first payment shall be
determined by multiplying the vested
value of the Participant's Account as
of his Determination Date, adjusted to
reflect any deemed investment
experience which occurs between such
date and his Benefit Commencement
Date, by a fraction,
(1) the denominator of which equals
the number of years over which
the benefits are to be paid; and
(2) the numerator of which is one.
(B) amounts of the payments for
each succeeding year shall
be determined by
multiplying the vested
value of the Participant's
Account as of the
applicable anniversary of
his Determination Date by a
fraction,
(1) the denominator of which equals
the number of remaining years
over which the benefits are to
be paid; and
(2) the numerator of which is one.
696
<PAGE>
(d) Election of Form of Benefit Payment.
(i) A Participant shall elect the form in which
his benefits are payable upon Retirement in
accordance with Subsection (b).
Such elections must be made when the
Participant makes his initial election to
participate in the Plan in accordance with
Article 5.
(ii) Notwithstanding the foregoing, the Participant
may elect to change the form(s) elected in
accordance with Paragraph (i), provided such
new election is made at least one full calendar
year prior to the Participant's Retirement. If
the Participant's Retirement occurs prior to
one full calendar year following the new
election, such election shall not be honored
and the Participant's prior election shall
remain in effect.
(iii) Any election made pursuant to this Article
shall be made on forms and in the manner
prescribed by the Committee and shall be
irrevocable, except as provided in
Paragraph (ii).
12.2 Education Account.
(a) If a Participant remains continuously employed by
the Company until January 1 of the calendar year
in which an Eligible Dependent attains age 18 or
terminates employment as a result of his Normal or
Deferred Retirement during or after such time
period, the Company shall pay to the Participant a
benefit, as soon after such January 1st and each
of the next three anniversaries thereof as
administratively practicable, determined as of the
Valuation Date immediately preceding or coinciding
with each such January 1st as follows:
January 1st Percentage of Eligible
Year Dependent's Subaccount
1 25%
2 33-1/3%
3 50%
4 100%
696
<PAGE>
(b) Subject to the requirements of
Section 9.2, a Participant may establish
subaccounts under his Education Account by
designating Eligible Dependents. A Participant may
have a maximum of five such subaccounts at any
time. A Participant's election pursuant to Section
8.2 shall apply uniformly to each subaccount.
(c) If a Participant terminates his employment for any
reason other than Normal or Deferred Retirement with
a balance in his Education Account, the balance
shall be transferred to his Retirement Account and
distributed in accordance with Subsections 12.1(a)
and (b); but no later than he would have received
his benefit as provided in Subsection 12.2(a) above.
(d) Notwithstanding any provision to the contrary, if on
the January 1 of the calendar year in which an
Eligible Dependent of a Participant attains age 18,
the Eligible Dependent's subaccount has a balance of
less than $10,000, then the Plan Administrator shall
direct that the balance be paid to the Participant
in one lump sum.
(e) If an Eligible Dependent dies prior to the payment
of the full amount credited to his subaccount, the
balance shall be transferred to the Participant's
Retirement Account as soon as administratively
practicable following the Valuation Date coinciding
with or immediately following the Eligible
Dependent's death.
(f) For purposes of this Section, "Eligible Dependent"
means an individual who is a child, stepchild,
grandchild, niece or nephew, or who is otherwise
identified as a dependent of a Member for purposes of the
Code who is living at any time throughout the Enrollment
Period and who is either younger than age 14 or younger
than age 18 but for whom a subaccount was initially
established pursuant to Subsection (b) prior to his
attaining age 14.
12.3 Fixed Period Account.
(a) A benefit equal to the lump sum value of the
Participant's Fixed Period Account determined as of the
Valuation Date coinciding with or immediately preceding
the January 1 of the payment year specified by the
Participant shall be paid to him as soon as
administratively practicable thereafter.
(b) A Participant shall designate the payment year in the
written statement by which the Fixed Period Account
is established. Such payment year must not be less than
696
<PAGE>
four full calendar years subsequent to the date the Fixed
Period Account of reference is established.
Subject to the requirements of Section 8.2, a
Participant may establish subaccounts under his Fixed
Period Account, with separate payment years for each. A
Participant may have a maximum of three such subaccounts
at any time. A Participant's election pursuant to
Section 8.2 shall apply uniformly to each subaccount.
(c) If a Participant's employment terminates for any reason
and the Participant has a balance in his Fixed Period
Account, the balance shall be transferred to his
Retirement Account and be distributed in accordance with
Subsections 12.1(a) and (b); but no later than he would
have received his benefit as provided in Subsection
12.3(a) above.
12.4 Claim Procedure For Benefits
(a) Any request for specific information with respect to
benefits under the Plan must be made to the Committee
in writing by a Participant or his Beneficiary. Oral
communications will not be recognized as a formal request
or claim for benefits.
(b) The Committee shall provide adequate notice in
writing to any Participant or Beneficiary whose
claim for benefits under the Plan has been denied,
(i) setting forth the specific reasons for such
denial; specific references to pertinent plan
provisions; a description of any material and
information which had been requested but not received
by the Committee; and, (ii) advising such Participant
or Beneficiary that any appeal of such adverse
determination must be in writingto the Committee,
within such period of time designated by the Committee
but, until changed, not more than 60 days after receipt
of such notification, and must include a full description
of the pertinent issues and basis of such claim.
(c) If the Participant or Beneficiary fails to appeal
such action to the Committee in writing within the
prescribed period of time, the Committee's adverse
determination shall be final.
(d) If an appeal is filed with the Committee, the
Participant or Beneficiary shall submit such issues he
feels are pertinent and the Committee shall reexamine
all facts, make a final determination as to whether the
denial of benefits is justified under the circumstances,
and advise the Participant or Beneficiary in writing of
its decision and the specific reasons on which such
decision was based, within 60 days of receipt of such
696
<PAGE>
written request, unless special circumstances require a
reasonable extension of such 60-day period.
12.5 Substitute Payee
If a Participant or Beneficiary entitled to receive any
benefits hereunder is in his minority, or is, in the judgment of
the Committee, legally, physically, or mentally incapable of
personally receiving and receipting any distribution, the
Committee may make distributions to a legally appointed guardian
or to such other person or institution as, in the judgment of the
Committee, is then maintaining or has custody of the payee.
12.6 Satisfaction of Liability
After all benefits have been distributed in full to a
Participant or to his Beneficiary, all liability to such
Participant or to his Beneficiary under the Plan shall cease.
12.7 Nonassignability
No benefit under the Plan shall be subject in any manner
to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any such action shall be void for all
purposes of the Plan. No benefit shall in any manner be subject
to the debts, contracts, liabilities, engagements or torts of any
person, nor shall it be subject to attachments or other legal
process for or against any person, except to such extent as may
be required by law.
696
<PAGE>
Article 13
Beneficiary Designation
13.1 Each Participant, upon becoming eligible for participation
in the Plan, may designate a Beneficiary to receive the
benefits payable in the event of his death, and designate a
successor Beneficiary to receive any benefits payable in the
event of the death of any other Beneficiary.
13.2 A Participant may change his Beneficiary at any time. All
Beneficiary designations and changes shall be made on an
appropriate form as designated by the Committee and filed
with the Committee.
13.3 If no person shall be designated by the Participant, or if
the designated Beneficiary shall not survive the
Participant, payment of the Participant's Account shall be
made to the Participant's estate.
696
<PAGE>
Article 14
Amendment and Termination
14.1 Amendment
The Company may amend or otherwise modify the Plan by
resolution of its Board of Directors, in whole or in part, either
retroactively or prospectively, provided that no amendment or
modification shall, with respect to allocations already credited
or investment experience accrued, change the amount of
allocations under Article 6 or Article 7 or investment experience
under Article 9 or increase the vesting requirements under
Article 11.
14.2 Termination
The Plan may be terminated at any time at the discretion
of the Company by resolution of its Board of Directors. Written
notification of such action shall be given to each Participant,
the Trustee and the Committee. Thereafter, no further allocations
or credits shall be made to the Plan. As soon as administratively
feasible following termination of the Plan, the Committee shall
distribute the amount in each Account (whether or not vested) to
or on behalf of the Participant or, if following the
Participant's death, the Beneficiary entitled thereto.
696
<PAGE>
Article 15
General Provisions
15.1 Limitation of Rights
Neither the establishment of the Plan or the Trust
Agreement, nor any modification thereof, nor the creation of an
account, nor the payment of any benefits shall be construed as
giving any Participant, Beneficiary, or any other person
whomsoever, any legal or equitable right against the Company, the
Trustee or the Committee unless such right shall be specifically
provided for in the Plan or the Trust Agreement or conferred by
affirmative action of the Committee in accordance with the terms
and provisions of the Plan; or as giving any Participant the
right to be retained in the service of the Company, and all
Participants and other employees shall remain subject to
discharge to the same extent as if the Plan had never been
adopted.
15.2 Construction of Agreement
The Plan shall be construed according to the laws of the
State of Kentucky, and all provisions hereof shall be
administered according to, and its validity shall be determined
under, the laws of Kentucky unless preempted by Federal law.
15.3 Severability
Should any provision of the Plan or any regulations
adopted thereunder be deemed or held to be unlawful or invalid
for any reason, such fact shall not adversely affect the other
provisions or regulations unless such invalidity shall render
impossible or impractical the functioning of the Plan and, in
such case, the appropriate parties shall immediately adopt a new
provision or regulation to take the place of the one held illegal
or invalid.
15.4 Titles and Headings
The titles and headings of the Articles in this
instrument are for convenience of reference only and, in the
event of any conflict, the text rather than such titles or
headings shall control.
15.5 Binding Upon Successors
The liabilities under the Plan shall be binding upon any
successor or assign of the Company and any purchaser of the
Company or substantially all of the assets of the Company.
696
<PAGE>
EXHIBIT 11.1
COMMONWEALTH ALUMINUM CORP.
CALCULATION OF EARNINGS PER COMMON SHARE
(In Millions, Except Per Share Amounts)
Three Months Six Months
Ended June 30, Ended June 30,
-------------- --------------
1996 1995 1996 1995
---- ---- ---- ----
Earnings applicable to common shares $2.1 $12.9 $4.5 $21.6
Common shares outstanding 10.2 10.2 10.2 10.2
Earnings per common share $.21 $1.27 $.44 $2.12
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-mos
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-END> Jun-30-1996
<CASH> 802
<SECURITIES> 0
<RECEIVABLES> 102,410
<ALLOWANCES> 0
<INVENTORY> 106,067
<CURRENT-ASSETS> 212,888
<PP&E> 185,669
<DEPRECIATION> 0
<TOTAL-ASSETS> 402,294
<CURRENT-LIABILITIES> 53,861
<BONDS> 0
0
0
<COMMON> 102
<OTHER-SE> 216,785
<TOTAL-LIABILITY-AND-EQUITY> 402,294
<SALES> 327,216
<TOTAL-REVENUES> 0
<CGS> 308,535
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (247)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,122)
<INCOME-PRETAX> 5,112
<INCOME-TAX> 617
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,495
<EPS-PRIMARY> .44
<EPS-DILUTED> .44
</TABLE>
