<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section240.14a-11(c) or Section240.14a-12
CENTURY ALUMINUM COMPANY
(Name of Registrant as Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement if other than Registrant)
Payment of Filing Fee (check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(2) and 0-11
1) Title of each class of securities to which transaction applies: N/A
2) Aggregate Number of securities to which transaction applies: N/A
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined): N/A
4) Proposed maximum aggregate value of transaction: N/A
5) Total fee paid: N/A
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid: N/A
2) Form, Schedule or Registration Statement No.: N/A
3) Filing Party: N/A
4) Date Filed: N/A
<PAGE> 2
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD MAY 13, 1997
TO THE STOCKHOLDERS:
The Annual Meeting of Stockholders of Century Aluminum Company (the
"Company") will be held at 9:00 A.M. on Tuesday, May 13, 1997 at The Peninsula
Hotel, 700 Fifth Avenue, New York, New York, for the following purposes:
1. To elect two directors to serve for a term of three years
expiring at the Annual Meeting of Stockholders to be held in 2000;
2. To consider and act upon a proposal to ratify the
appointment of Deloitte & Touche LLP as the Company's independent
auditors for the fiscal year ending December 31, 1997; and
3. To transact such other business as may properly come before
the Annual Meeting or at any adjournments or postponements thereof.
The Board of Directors has fixed the close of business on March 17,
1997 as the record date for the determination of the stockholders entitled to
notice of and to vote at the Annual Meeting of Stockholders and at any
adjournments or postponements thereof.
By Order of the Board of Directors,
/s/ Gerald J. Kitchen
Gerald J. Kitchen
Executive Vice President,
General Counsel and
Chief Administrative Officer
Pacific Grove, California
April 11, 1997
- --------------------------------------------------------------------------------
YOUR VOTE IS IMPORTANT
IF YOU DO NOT EXPECT TO ATTEND THE ANNUAL MEETING, OR IF YOU DO PLAN TO
ATTEND BUT WISH TO VOTE BY PROXY, PLEASE COMPLETE, SIGN, DATE AND
RETURN PROMPTLY THE ENCLOSED PROXY CARD IN THE ENCLOSED POSTAGE-PAID
ENVELOPE.
- --------------------------------------------------------------------------------
<PAGE> 3
CENTURY ALUMINUM COMPANY
-----------------
PROXY STATEMENT
----------------
ANNUAL MEETING OF STOCKHOLDERS
MAY 13, 1997
GENERAL
This Proxy Statement is being furnished in connection with the solicitation
by the Board of Directors of Century Aluminum Company, a Delaware corporation
(the "Company"), of proxies for use at the Annual Meeting of Stockholders to be
held on May 13, 1997, commencing at 9:00 A.M., at The Peninsula Hotel, 700 Fifth
Avenue, New York, New York, and at any adjournments or postponements thereof.
The matters to be considered and acted upon at the meeting are described below
in this Proxy Statement.
The principal executive offices of the Company are located at 1200 Piedmont
Avenue, Suite 200, Pacific Grove, California 93950. The approximate mailing date
of this Proxy Statement and the accompanying proxy is April 11, 1997.
VOTING RIGHTS AND VOTES REQUIRED
Only stockholders of record at the close of business on March 17, 1997 will
be entitled to notice of and to vote at the Annual Meeting. As of such record
date, the Company had outstanding 20,000,000 shares of common stock. Each
stockholder is entitled to one vote for each share of common stock held. The
holders of a majority of the outstanding shares will constitute a quorum for the
transaction of business at the meeting. Shares of common stock present in person
or represented by proxy (including shares which abstain or do not vote with
respect to one or more of the matters presented for stockholder approval) will
be counted for purposes of determining whether a quorum exists at the meeting.
The affirmative vote of the holders of a plurality of the shares of common
stock present or represented at the meeting is required for the election of
directors. The affirmative vote of the holders of a majority of the shares of
common stock present or represented at the meeting and entitled to vote is
required for the ratification of the appointment of Deloitte & Touche LLP as the
Company's independent auditors for the current fiscal year. Abstentions will be
treated as shares that are present and entitled to vote for purposes of
determining the number of shares present and entitled to vote with respect to
any particular matter, but will not be counted as a vote in favor of such
matter. Accordingly, an abstention from voting on a matter will have the same
legal effect as a vote against the matter. If a broker or nominee holding stock
in "street name" indicates on the proxy that it does not have discretionary
authority to vote as to a particular matter, those shares will not be considered
as present and entitled to vote with respect to such matter.
The accompanying proxy may be revoked at any time before it is exercised by
giving a later proxy, notifying the Secretary of the Company in writing, or
voting in person at the meeting.
<PAGE> 4
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information concerning the
beneficial ownership of the Company's common stock as of February 28, 1997
(except as otherwise noted) by (i) each person known by the Company to be the
beneficial owner of five percent or more of the outstanding shares of common
stock, (ii) each director of the Company, (iii) each executive officer of the
Company named in the Summary Compensation Table under the heading "Executive
Compensation" below, and (iv) all directors and executive officers of the
Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENTAGE OF CLASS
- ------------------------ ----------------------- -------------------
<S> <C> <C>
Glencore International AG................................... 7,925,000(2) 39.6
Wellington Management Company, LLP.......................... 2,403,700(3) 12.0
Vanguard/Windsor Fund, Inc.................................. 2,000,000(4) 10.0
The Equitable Companies Incorporated........................ 1,279,500(5) 6.4
The Crabbe Huson Group, Inc................................. 1,160,900(6) 5.8
David W. Beckley............................................ 53,408(7) *
Roman A. Bninski............................................ 6,666(8) *
Craig A. Davis.............................................. 100,288(9) *
John C. Fontaine............................................ 3,583(10) *
William R. Hampshire........................................ 18,166(11) *
Gerald J. Kitchen........................................... 53,419(12) *
Gerald A. Meyers............................................ 66,666(13) *
Steven R. Sedberry.......................................... 33,407(14) *
Willy R. Strothotte......................................... 3,333(15) *
All directors and executive officers as a group (9 persons). 338,936(16) 1.7
</TABLE>
- -------------------------------------
* Less than one percent.
(1) Each individual or entity has sole voting and investment power, except
as otherwise indicated.
(2) Based upon information as of December 31, 1996 set forth in a Schedule
13G filing dated February 10, 1997. According to its filing, Glencore
International AG ("Glencore International") beneficially owns such
shares through its subsidiaries, Glencore AG ("Glencore AG"), which
directly owns 2,742,214 shares, and Vialco Holdings Ltd. ("Vialco"),
which directly owns 5,182,786 shares. The business address of each of
Glencore International, Glencore AG and Vialco is Baarermattstrasse 3,
P.O. Box 555, CH 6341, Baar, Switzerland.
(3) Based upon information as of December 31, 1996 set forth in a Schedule
13G filing dated January 24, 1997. According to its filing, Wellington
Management Company, LLP ("Wellington"), through its subsidiary,
Wellington Trust Company, N.A. ("Wellington Trust"), has shared voting
power with respect to 204,400 shares and shared investment power with
respect to 2,403,700 shares. The business address of Wellington and
Wellington Trust is 75 State Street, Boston, Massachusetts 02109.
(4) Based upon information as of December 31, 1996 set forth in a Schedule
13G filing dated February 7, 1997. The Vanguard/Windsor Fund, Inc.
("Vanguard") has shared investment power with respect to such shares.
Some or all of these shares are reported as beneficially owned by
Wellington. The business address of Vanguard is 100 Vanguard Blvd.,
P.O. Box 2600, Malvern, Pennsylvania 19355.
(5) Based upon information as of December 31, 1996 set forth in a Schedule
13G filing dated February 12, 1997. According to its filing, pursuant
to a Joint Filing Agreement among The Equitable Companies Incorporated,
Alpha Assurances I.A.R.D. Mutuelle, Alpha Assurances Vie Mutuelle, AXA
Assurances I.A.R.D. Mutuelle, AXA Assurances Vie Mutuelle, AXA Courtage
Assurance Mutuelle, and AXA (collectively, the "Equitable Reporting
Persons"), each of the Equitable Reporting Persons reports sole voting
power with respect to 1,248,600 shares and sole investment power with
respect to 1,279,500 shares. The business addresses of the Equitable
Reporting Persons are, respectively: 787 Seventh Avenue, New York, New
York 10019; 100-101 Terrasse Boieldieu, 92042 Paris, France; 100-101
Terrasse Boieldieu, 92042 Paris, France; 21, rue de Chateaudun, 75009
Paris, France; 21, rue de Chateaudun, 75009 Paris, France; 26, rue Lois
le Grand, 75002 Paris, France; and 23, avenue Matignon, 75008 Paris,
France. (Footnotes continued on following page)
-2-
<PAGE> 5
- ---------------------------
(Footnotes continued from previous page)
(6) Based upon information as of December 31, 1996 set forth in a Schedule
13G filing dated February 7, 1997. According to its filing, The Crabbe
Huson Group, Inc. ("Crabbe Huson") has shared voting and investment
power with respect to such shares. Crabbe Huson Small Cap Fund ("Small
Cap") and The Crabbe Huson Special Fund, Inc. ("Special Fund"),
registered investment companies managed by Crabbe Huson, share voting
and investment power with respect to 56,100 shares and 464,400 shares,
respectively. The business address of each of Crabbe Huson, Small Cap
and Special Fund is 121 SW Morrison, Suite 1400, Portland, Oregon
97204.
(7) Includes 53,333 shares which are subject to options presently
exercisable or exercisable within 60 days.
(8) Includes 6,666 shares which are subject to options presently
exercisable or exercisable within 60 days.
(9) Includes 100,000 shares which are subject to options presently
exercisable or exercisable within 60 days. Excludes 7,925,000 shares
beneficially owned by Glencore International, of which Mr. Davis is a
director.
(10) Includes 250 shares owned jointly with Mr. Fontaine's wife. Also
includes 3,333 shares which are subject to options presently
exercisable.
(11) Includes 16,666 shares which are subject to options presently
exercisable or exercisable within 60 days. Also includes 1,200 shares
owned by Mr. Hampshire's wife and 300 shares owned by Mr. Hampshire's
grandchildren, as to which shares Mr. Hampshire disclaims beneficial
ownership.
(12) Includes 53,333 shares which are subject to options presently
exercisable or exercisable within 60 days.
(13) Includes 66,666 shares which are subject to options presently
exercisable or exercisable within 60 days.
(14) Includes 33,333 shares which are subject to options presently
exercisable or exercisable within 60 days.
(15) Includes 3,333 shares which are subject to options presently
exercisable. Excludes 7,925,000 shares beneficially owned by Glencore
International, of which Mr. Strothotte is the Chairman and Chief
Executive Officer.
(16) Includes 333,330 shares which are subject to options presently
exercisable or exercisable within 60 days. Excludes 7,925,000 shares
beneficially owned by Glencore International.
1. ELECTION OF DIRECTORS
At the Annual Meeting, two directors are to be elected, for terms
expiring in 2000. If no direction is given to the contrary, all proxies received
by the Board of Directors will be voted "FOR" the election as directors of each
of the following nominees. In the event that any nominee declines or is unable
to serve, the proxy solicited herewith may be voted for the election of another
person in his stead at the discretion of the proxies. The Board of Directors has
no reason to believe that any of the nominees will not be available to serve.
Set forth below is certain information concerning the two nominees for election
and the other directors of the Company with unexpired terms of office. Each
nominee is currently a director of the Company.
NOMINEES FOR ELECTION AT THE 1997 ANNUAL MEETING FOR TERMS TO EXPIRE IN 2000
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE AND PRINCIPAL OCCUPATION OR DIRECTOR TERM TO
NAME AND AGE EMPLOYMENT DURING PAST 5 YEARS; OTHER DIRECTORSHIPS SINCE EXPIRE
- ------------ --------------------------------------------------- ----- ------
<S> <C> <C> <C>
Roman A. Bninski(1) ................. Partner of Curtis, Mallet-Prevost, Colt & Mosle, 1996 1997
50 New York, New York since 1984; Secretary of
Ravenswood Aluminum Corporation (a
subsidiary of the Company) from April
1992 through February 1996.
Willy R. Strothotte.................. Chief Executive Officer of Glencore International 1996 1997
52 since 1993 and Chairman of the Board of Glencore
International since 1994; Director of
Sudelektra Holding AG since 1990.
</TABLE>
-3-
<PAGE> 6
DIRECTORS CONTINUING IN OFFICE FOLLOWING THE 1997 ANNUAL MEETING
<TABLE>
<CAPTION>
BUSINESS EXPERIENCE AND PRINCIPAL OCCUPATION OR DIRECTOR TERM TO
NAME AND AGE EMPLOYMENT DURING PAST 5 YEARS; OTHER DIRECTORSHIPS SINCE EXPIRE
- ------------ --------------------------------------------------- ----- ------
<S> <C> <C> <C>
John C. Fontaine(1) (2)............... President and director of Knight-Ridder, Inc. 1996 1998
65 since July 1995; Senior Vice President and
General Counsel of Knight-Ridder,
Inc. from 1987 to January 1994, and
Executive Vice President from January
1994 to July 1995; Chairman of the
Samuel H. Kress Foundation; member of
the Trustees' Council of the National
Gallery of Art; Chairman of the
Governing Council of the Florida
Philharmonic.
Gerald A. Meyers...................... President and Chief Operating Officer of the 1995 1998
47 Company since August 1995; President and Chief
Operating Officer of Ravenswood
Aluminum Corporation (a subsidiary of
the Company) since January 1993 and
director of Ravenswood Aluminum
Corporation since April 1994;
Operations Manager of Logan Aluminum
(joint venture between Alcan Aluminum
Limited and Atlantic Richfield
Company) from November 1988 to
December 1992.
Craig A. Davis(1)..................... Chairman and Chief Executive Officer of the 1995 1999
56 Company since August 1995; Chairman and Chief
Executive Officer of Ravenswood
Aluminum Corporation (a subsidiary of
the Company) since August 1995;
Chairman and acting Chief Executive
Officer of Ravenswood from April 1992
through July 1995; Director of
Glencore International since December
1993 and Executive of Glencore
International and Glencore AG from
September 1990 to June 1996; former
Executive Vice President of Alumax
Inc.
William R. Hampshire(2)............... Vice-Chairman of the Company since August 1995; 1995 1999
69 President and Chief Operating Officer of
Ravenswood Aluminum Corporation (a
subsidiary of the Company) from April
1992 through January 1993 and
director of Ravenswood Aluminum
Corporation since June 1993;
Independent consultant since 1990;
former President and Chief Executive
Officer of Howmet Aluminum
Corporation.
</TABLE>
- -------------------------------------
(1) Member of Audit Committee.
(2) Member of Compensation Committee.
BOARD AND COMMITTEE MEETINGS; DIRECTORS' COMPENSATION
The Board of Directors met three times during 1996. Each director attended
all of the meetings of the Board and the Board Committees on which such director
served. The Board Committees include an Audit Committee and a Compensation
Committee. The Company does not have a standing Nominating Committee of the
Board of Directors.
-4-
<PAGE> 7
The members of the Audit Committee are Messrs. Davis, Bninski and
Fontaine. The Audit Committee oversees the financial reporting process for which
management is responsible, reviews the services provided by the Company's
independent auditors, consults with the independent auditors on audits and
proposed audits of the Company, and reviews the need for internal auditing
procedures and the adequacy of the Company's internal control systems. In 1996,
the Audit Committee held two meetings.
The members of the Compensation Committee are Mr. Hampshire and Mr.
Fontaine. The Compensation Committee administers the Company's stock incentive
plans, and reviews and recommends compensation levels of the Company's executive
officers. In 1996, the Compensation Committee held one meeting.
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 $20,000 for their services,
except that the Vice-Chairman receives an annual retainer of $25,000, and a fee
of $750 for each Board or Committee meeting attended. In addition, each
Committee member receives an annual fee of $750. All directors are reimbursed
for their travel and other expenses incurred in attending Board and Committee
meetings. Under the Company's Non-Employee Directors Stock Option Plan, each
director who is not an employee of the Company received a one-time grant of
options to purchase 10,000 shares of common stock, and the Vice-Chairman
received a one-time grant of options to purchase 25,000 shares of common stock.
Such grants became effective upon the consummation of the Company's initial
public offering at an exercise price equal to the initial public offering price,
except in the cases of Mr. Fontaine and Mr. Strothotte whose grants became
effective upon their election as directors at an exercise price equal to the
market price of the common stock at such time. The options vested one-third on
the grant date, and an additional one-third will vest on each of the first and
second anniversary dates. In addition, the Non-Employee Directors Stock Option
Plan provides for automatic annual grants of options to purchase 1,500 shares of
common stock at fair market value to each non-employee director continuing in
office after the annual meeting of stockholders in each year beginning after
1996.
Mr. Strothotte was designated to serve as a director of the Company by
Glencore International.
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table sets forth information with respect to the
compensation paid or awarded by the Company to the Chief Executive Officer and
the four other most highly compensated executive officers (collectively, the
"Named Executive Officers") for services rendered in all capacities during 1996.
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS/PAYOUTS
------------------- ----------------------------------------
RESTRICTED NUMBER OF SHARES ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) STOCK AWARDS ($)(1) UNDERLYING OPTIONS(#) COMPENSATION($)(2)
- --------------------------- ---- --------- -------- ------------------- ------------------ ------------------
<S> <C> <C> <C> <C> <C> <C>
Craig A. Davis(3) 1996 $320,833 $440,000 $2,043,750 150,000 $53,249
Chairman and Chief
Executive Officer
Gerald A. Meyers 1996 $250,000 $143,750 $1,362,500 100,000 $ 547
President and Chief
Operating Officer
Gerald J. Kitchen 1996 $200,000 $105,000 $1,090,000 80,000 $ 6,324
Executive Vice
President, General
Counsel and Chief
Administrative
Officer
</TABLE>
(Table continued on following page)
-5-
<PAGE> 8
(Table continued from previous page)
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION AWARDS/PAYOUTS
------------------- -------------------------------------------
RESTRICTED NUMBER OF SHARES ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) STOCK AWARDS ($)(1) UNDERLYING OPTIONS(#) COMPENSATION($)(2)
- --------------------------- ---- --------- -------- ------------------- --------------------- ------------------
<S> <C> <C> <C> <C> <C> <C>
David W. Beckley 1996 $200,000 $105,000 $1,090,000 80,000 $108,203
Executive Vice President
and Chief Financial
Officer
Steven R. Sedberry 1996 $150,000 $ 93,750 $ 681,250 50,000 $ 82,404
Vice President of Sales
and Marketing
</TABLE>
- ---------------
(1) The amounts reported in this column represent the dollar value of the
award of unvested performance share units, calculated by multiplying
the closing market price of the Company's common stock on March 29,
1996 (the first day of trading of the common stock) by the number of
performance share units. Performance share units entitle the grantee to
receive one share of Company common stock per performance share unit
upon vesting of the performance share units. Performance share units
vest one-third on each of March 28, 1999, March 28, 2000 and March 28,
2001. The aggregate number and value (based upon the last reported sale
price of $17.25 of the Company's common stock on the Nasdaq National
Market on December 31, 1996) of unvested performance share units held
by each of the Named Executive Officers as of December 31, 1996 was as
follows: Craig A. Davis, 150,000 ($2,587,500); Gerald A. Meyers,
100,000 ($1,725,000); Gerald J. Kitchen, 80,000 ($1,380,000); David W.
Beckley, 80,000 ($1,380,000); and Steven R. Sedberry, 50,000
($862,500). Dividends are not paid on unvested performance share units.
(2) 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, with the exception of Mr.
Meyers. Those contributions were $5,700 for Messrs. Davis, Beckley and
Kitchen and $5,400 for Mr. Sedberry. Also includes Company paid life
insurance premiums in the amounts of $1,716, $547, $624, $624, and $374
for Messrs. Davis, Meyers, Kitchen, Beckley and Sedberrry,
respectively. In the case of Messrs. Davis, Beckley and Sedberry, the
amounts include $45,833, $101,879 and $76,630, respectively, for
one-time relocation adjustments relating to their relocations to
Pacific Grove, California.
(3) Salary was paid to Mr. Davis for the period June 1, 1996 through
December 31, 1996.
Option Grants Table
The following table sets forth information regarding options granted
during the fiscal year ended December 31, 1996 by the Company to each of the
Named Executive Officers.
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO EXERCISE OR OPTION TERM(1)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION ------------------------------
NAME GRANTED (#) FISCAL YEAR ($/SHARE) DATE 5%($) 10%($)
- ---- ----------- ----------- --------- ---------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Craig A. Davis 150,000(2) 30.74% $13.00 3/28/2006 $ 1,226,345 $3,107,798
Gerald A. Meyers 100,000(2) 20.49% $13.00 3/28/2006 $ 817,563 $2,071,865
Gerald J. Kitchen 80,000(2) 16.39% $13.00 3/28/2006 $ 645,050 $1,657,492
David W. Beckley 80,000(2) 16.39% $13.00 3/28/2006 $ 645,050 $1,657,492
Steven R. Sedberry 50,000(2) 10.25% $13.00 3/28/2006 $ 408,782 $1,035,933
</TABLE>
(Footnotes on following page)
-6-
<PAGE> 9
(Footnotes from previous page)
- -----------
(1) The potential realizable value of the options reported was calculated
by assuming 5% and 10% compounded annual rates of appreciation of the
common stock from the date of grant of the options until the expiration
of the options, based upon the initial public offering price of the
common stock. These assumed annual rates of appreciation were used in
compliance with the rules of the Securities and Exchange Commission and
are not intended to forecast future price appreciation of the common
stock.
(2) One-third of these options vested on March 28, 1996, and an additional
one-third will vest on each of March 28, 1997 and March 28, 1998.
Fiscal Year End Option Value Table
The following table sets forth information regarding the aggregate
number and value of options held by the Named Executive Officers as at December
31, 1996. No options were exercised by any of the Named Executive Officers in
1996.
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED OPTIONS IN-THE-MONEY OPTIONS
AT DECEMBER 31, 1996(#) AT DECEMBER 31, 1996($)(1)
------------------------------ ------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Craig A. Davis.................. 50,000 100,000 $212,500 $425,000
Gerald A. Meyers................ 33,333 66,667 $141,665 $283,335
Gerald J. Kitchen............... 26,666 53,334 $113,331 $226,670
David W. Beckley................ 26,666 53,334 $113,331 $226,670
Steven R. Sedberry.............. 16,666 33,334 $ 70,831 $141,670
</TABLE>
- ----------
(1) The last reported sale price for the Company's common stock on the
Nasdaq National Market on December 31, 1996 was $17.25 per share. Value
is calculated on the basis of the difference between the respective
option exercise prices and $17.25, multiplied by the number of shares
of common stock underlying the respective options.
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 following table 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.
<TABLE>
<CAPTION>
YEARS OF CREDITED SERVICE
------------------------------------------------------------------------------------------
REMUNERATION 5 10 15 20 25 30 35 40
- ------------ ------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 100,000....... $ 6,000 $ 12,000 $ 18,000 $ 24,000 $ 30,000 $ 36,000 $ 42,000 $ 48,000
$ 200,000....... $12,000 $ 24,000 $ 36,000 $ 48,000 $ 60,000 $ 72,000 $ 84,000 $ 96,000
$ 300,000....... $18,000 $ 36,000 $ 54,000 $ 72,000 $ 90,000 $108,000 $126,000 $144,000
$ 400,000....... $24,000 $ 48,000 $ 72,000 $ 96,000 $120,000 $144,000 $168,000 $192,000
$ 500,000....... $30,000 $ 60,000 $ 90,000 $120,000 $150,000 $180,000 $210,000 $240,000
$ 600,000....... $36,000 $ 72,000 $108,000 $144,000 $180,000 $216,000 $252,000 $288,000
$ 700,000....... $42,000 $ 84,000 $126,000 $168,000 $210,000 $252,000 $294,000 $336,000
$ 800,000....... $48,000 $ 96,000 $144,000 $192,000 $240,000 $288,000 $336,000 $384,000
$ 900,000....... $54,000 $108,000 $162,000 $216,000 $270,000 $324,000 $378,000 $432,000
$1,000,000....... $60,000 $120,000 $180,000 $240,000 $300,000 $360,000 $420,000 $480,000
$1,100,000....... $66,000 $132,000 $198,000 $264,000 $330,000 $396,000 $462,000 $528,000
$1,200,000....... $72,000 $144,000 $216,000 $288,000 $360,000 $432,000 $504,000 $576,000
$1,300,000....... $78,000 $156,000 $234,000 $312,000 $390,000 $468,000 $546,000 $624,000
</TABLE>
-7-
<PAGE> 10
The plan provides lifetime monthly benefits at age 62 equal to the
greater of (i) 1.2% 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 consecutive monthly average (36, 48 or 60 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, except that the Named Executive Officers are
immediately vested. Benefits are also available as a 30-year pension, an early
retirement benefit (actuarially reduced beginning at age 55), and as a
disability benefit.
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 Sedberry at December 31, 1996 were approximately 1,4,1,1, and 2
years, respectively.
EMPLOYMENT AGREEMENTS
The Company entered into employment agreements with each of Messrs.
Gerald A. Meyers, Gerald J. Kitchen, David W. Beckley and Steven R. Sedberry,
effective January 1, 1996 and with Mr. Craig A. Davis, effective June 1, 1996,
providing for terms of employment of three years. The agreements provide for
base salaries in the amounts set forth in the Summary Compensation Table above,
subject to increases established from time to time by the Board of Directors. In
addition, the executives are entitled to bonuses in accordance with the
Company's annual incentive plan. The agreements provide for incentive bonuses
ranging from 35% to 100% of base compensation, based upon achievement by the
Company of targets established by the Compensation Committee and the stock
option grants and performance share unit awards set forth in the Summary
Compensation Table. The agreements also provide that the executives will receive
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 and as if the executives were
fully vested in the qualified retirement plan benefits. 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 the Named Executive Officers. The agreements provide that if within 18
months following a change of control of the Company, the executive's employment
is terminated either (i) by the Company for other than cause or disability or
(ii) by such 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 of control, the exercisability of stock
options and the vesting of performance share units 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 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 acceleration of the exercisability of stock options and the
vesting of performance share units held by the executive caused by the change of
control.
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<PAGE> 11
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1996, the members of the Board's Compensation Committee were Mr.
William R. Hampshire and Mr. John C. Fontaine. Mr. Hampshire served as President
and Chief Operating Officer of Ravenswood Aluminum Corporation from April 1992
through January 1993.
CERTAIN TRANSACTIONS AND RELATIONSHIPS
In connection with the Company's initial public offering, the Company
entered into certain agreements to govern ongoing relationships between the
Company and Glencore International and its subsidiaries (collectively, the
"Glencore Group"). The Company entered into a one-year Services and Marketing
Agreement (the "Services and Marketing Agreement"), with Glencore Ltd., the U.S.
branch of Glencore AG, effective January 1, 1996, pursuant to which Glencore
Ltd. furnished training and marketing assistance in connection with the
Company's ownership of a reduction facility (the "Mt. Holly Facility") located
in Mt. Holly, South Carolina. Glencore Ltd. was paid as compensation for its
services a fee in an amount equal to $500,000 for the twelve-month period
beginning January 1, 1996 and ending December 31, 1996.
Immediately prior to the closing of the public offering, the Company
made a special distribution (the "Special Distribution") in the form of a pro
rata redemption of shares held by Glencore AG and Vialco, comprised of the
Company's holdings in businesses unrelated to the continuing aluminum operations
of the Company, consisting principally of an inactive oil trading business, a
distributor of ferro alloys and a finance business whose principal activity
consisted of providing financing to entities within the Glencore Group. The
Company entered into a Tax Sharing Agreement with Glencore AG and Vialco,
pursuant to which Glencore AG and Vialco are responsible for all taxes relating
to the businesses comprising the Special Distribution for periods through the
date of the Special Distribution. In addition, the Company entered into a
Disaffiliation Agreement with Glencore International, pursuant to which the
Company and the Glencore Group agreed to share 50% each all losses, liabilities,
costs and expenses relating to a lawsuit relating to the Company's
previously-owned alumina refining facility located in the U.S. Virgin Islands,
and claims relating thereto. The Disaffiliation Agreement also obligates
Glencore International to indemnify the Company for any losses arising from the
prior operations of the businesses and the assets and liabilities comprising the
Special Distribution.
In 1996, the Company purchased primary aluminum and alumina from
Glencore Ltd. Such purchases, which were made at market prices, aggregated $89.5
million (of which $83.4 million was for primary metal and $6.1 million was for
alumina). The Company has continued to purchase primary aluminum from Glencore
Ltd. in 1997. In 1996, the Company also sold primary and scrap aluminum to
Glencore Ltd. Such sales, at market prices, excluding sales of the Mt. Holly
Facility production described below, aggregated $47.1 million. The primary
aluminum products the Company has purchased and is purchasing from Glencore Ltd.
are different products from those it has sold or is selling to Glencore Ltd. The
Company entered into a series of hedge contracts at market with Glencore Ltd.,
effective January 1, 1996, which contracts were subsequently changed to a
forward physical sale, pursuant to which Glencore Ltd. purchased approximately
106 million pounds of primary aluminum products (comprised of T-ingot, extrusion
billet, rolling ingot and foundry ingot) for shipment during 1996. The Company
sold an additional eight million pounds at market to Glencore Ltd. through other
forward sales in 1996. The sales constituted substantially all of the Company's
share of the primary aluminum production of the Mt. Holly Facility. Sales under
these contracts amounted to $91.6 million during 1996.
As of December 31, 1996, the Company had entered into forward sales
contracts with Glencore Ltd. for 116 million pounds of primary aluminum to hedge
1997 and 1998 production. In addition, as of such date, the Company had
outstanding forward purchase contracts with Glencore Ltd. for 27.9 million
pounds of primary aluminum. The Company intends to continue to enter into
hedging arrangements with Glencore Ltd. in the future.
Mr. Craig A. Davis, Chairman and Chief Executive Officer of the
Company, is a director of Glencore International and was an executive of
Glencore International and Glencore AG from 1990 until June 1996. Mr. Willy R.
Strothotte, a director of the Company, is Chairman and Chief Executive Officer
of Glencore International.
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<PAGE> 12
Mr. Roman A. Bninski, a director of the Company, is a partner of
Curtis, Mallet-Prevost, Colt & Mosle, which furnishes legal services to the
Company.
REPORT OF THE COMPENSATION COMMITTEE
General
The Compensation Committee of the Board of Directors (the "Committee")
is comprised of Messrs. John C. Fontaine and William R. Hampshire, both of whom
are independent directors. The Committee reviews and recommends to the Board of
Directors compensation for the Company's executive officers, and it administers
the Company's Stock Incentive Plan, including the awarding of grants thereunder.
Compensation Philosophy
The Company's compensation programs are designed to enable the Company
and its subsidiaries to attract and retain talented executives and management
personnel. In order to do this, the Company believes it must be able to provide
management personnel with opportunities for total compensation which is
competitive with compensation which would be available from employers with whom
the Company competes and companies which are seeking to hire and retain
management personnel of similar quality.
In connection with the Company's initial public offering, the Company
utilized the services of an independent consultant to recommend base salary,
bonus, and long-term incentive compensation levels for the Company's executive
officers. The goal of the Company in utilizing the consultant was to obtain an
independent perspective on existing practices in order to enable the Company to
achieve the above-stated objectives. Pursuant to the recommendations of its
consultant, the Company entered into employment agreements with each of the
Named Executive Officers. The employment agreements provided for base salary,
annual incentive cash bonus opportunities, and long-term incentive compensation
in the form of stock option grants and performance share unit awards. See
"Employment Agreements."
Base Salary
Base salary levels in the employment agreements of the Named Executive
Officers were set at levels comparable to and competitive with the salary levels
of executives of peer corporations or other employers hiring equivalent
executive personnel. The Committee annually reviews the salary of executive
officers. Actual salary adjustments for each individual will vary based upon a
subjective assessment of individual performance, experience, level of
responsibility and potential contribution to the Company's future growth. The
Committee has not found it practicable to assign relative weights to specific
factors in determining base salary adjustments, and the specific factors used
may vary among individual executives.
Annual Incentive Awards
The Company's annual incentive award program is designed to reward
management and other key employees of the Company principally on the basis of
individual performance (awards may be limited by Company performance). Under
this program, executive officers (including the Chief Executive Officer) receive
a percentage of their base salary based upon the achievement of personal levels
of performance. For the Chief Executive Officer, the bonus range set by his
employment agreement was between 50% and 100% of base salary. During 1996, the
Company achieved a number of business and operational objectives, including the
successful transition to operating as an independent public company. In
addition, substantial gains were made in production productivity at the
Company's Ravenswood operations, the product mix at Ravenswood was modified to
emphasize more profitable, but harder to manufacture, value-added products, some
significant cost savings were achieved, and the Company's marketing and sales
efforts resulted in sales of a broader mix of higher value-added products to a
broader base of stronger customers. At the same time, however, the overall
performance of the Company was adversely affected by the cyclical nature of the
aluminum industry. Consequently, the Committee set bonus amounts at
approximately the midpoint of the ranges provided for by the employment
agreements.
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<PAGE> 13
Long-term Incentive Compensation
The Committee believes option grants and performance share unit awards
align executive interests with stockholder interests by creating a direct link
between compensation and stockholder return. In connection with the Company's
initial public offering, the Company, after consultation with the independent
consultant regarding incentive compensation practices in connection with public
offerings, granted the Named Executive Officers options and performance share
units based upon the officer's position and a subjective determination of the
officer's expected contribution to the success of the Company. In 1996, 460,000
options were granted to the Named Executive Officers. The Company also awarded
460,000 performance share units to the Named Executive Officers in order to
create an ownership interest in the Company which will vest in the future but
which provides a present motivation to enhance stockholder value. See "Executive
Compensation -- Summary Compensation Table." Future option grants and
performance share unit awards will be made from time to time to executives whose
contributions have or will have a significant impact on the Company's long-term
performance. The Committee's determination whether option grants or performance
share unit awards are appropriate each year will be made with regard to
competitive considerations, and each executive's actual grant will be based upon
the criteria described in the preceding paragraphs. The size of previous grants
and the number of options and the number of performance share units held will
not be determinative of future grants.
Compensation of the Chief Executive Officer
Compensation of the Chief Executive Officer was determined in
accordance with the criteria set forth above and in recognition of the
accomplishments described under Annual Incentive Awards. The Committee notes
particularly the success of the Chief Executive Officer in transitioning the
Company to operate as an independent public company, in building a new
management team with significant experience in the aluminum industry and in
continuing to develop strong relationships with Ravenswood employees represented
by the United Steelworkers. The Committee believes that Chief Executive Officer
compensation was appropriate based upon the Company's circumstances and the
goals and objectives that the Chief Executive Officer had been directed to
accomplish.
Compliance with Internal Revenue Code Section 162(m)
Section 162(m) of the Code places a limit of $1,000,000 on the amount
of compensation that may be deducted by the Company in any one year with respect
to each of the Company's five most highly paid executive officers. However,
subject to certain limitations, Section 162(m) provides that the deduction limit
does not apply to any remuneration paid pursuant to compensation agreements or
plans entered into prior to the consummation of the Company's initial public
offering. Consequently, to the extent the compensation paid to the Named
Executive Officers is paid pursuant to such agreements, it is currently exempt
from the Section 162(m) deduction limits.
John C. Fontaine William R. Hampshire
PERFORMANCE GRAPH
The following line graph compares the Company's cumulative total return
to stockholders since the common stock became publicly traded on March 29, 1996
with the cumulative total return of the S&P 500 Index and the Media General
Aluminum Refining Group Index during the period from March 29, 1996 through
December 31, 1996. These comparisons assume the investment of $100 on March 29,
1996 and the reinvestment of dividends.
-11-
<PAGE> 14
CENTURY ALUMINUM COMPANY
Comparison of Cumulative Total Return to Stockholders
March 29, 1996 through December 31, 1996
[GRAPH OF CUMULATIVE TOTAL RETURN]
<TABLE>
<CAPTION>
3/29/96 4/30/96 5/31/96 6/28/96 7/31/96 8/30/96 9/30/96 10/31/96 11/29/96 12/31/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
S&P 500 Index 100.00 101.47 104.09 104.49 99.87 101.98 107.72 110.69 119.05 116.70
Media General Aluminum 100.00 97.64 98.68 91.96 91.42 97.81 93.95 97.47 104.28 102.68
Refining Group Index
Century Aluminum Company 100.00 108.26 111.01 115.06 107.34 117.43 108.62 99.42 114.14 127.42
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's directors and executive officers, and persons owning more
than ten percent of a registered class of the Company's equity securities, to
file with the Securities and Exchange Commission reports of ownership and
changes in ownership of equity securities of the Company. Such persons are also
required to furnish the Company with copies of all such forms.
Based solely upon a review of the copies of such forms furnished to the
Company and, in certain cases, written representations that no Form 5 filings
were required, the Company believes that, with respect to the 1996 fiscal year,
all required Section 16(a) filings were made, except that Mr. Hampshire reported
late the purchase of 1,200 shares by his wife.
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Deloitte & Touche LLP to act as
the Company's independent auditors for the current fiscal year, subject to the
ratification of such appointment by the stockholders at the Annual Meeting. If
no direction is given to the contrary, all proxies received by the Board of
Directors will be voted "FOR" ratification of the appointment of Deloitte &
Touche LLP as the Company's independent auditors for the current fiscal year.
Representatives of Deloitte & Touche LLP are expected to be present at
the Annual Meeting and will be available to respond to appropriate questions
from stockholders and to make a statement if they desire to do so.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE "FOR"
RATIFICATION OF THE APPOINTMENT OF DELOITTE & TOUCHE LLP AS THE COMPANY'S
INDEPENDENT AUDITORS FOR THE CURRENT FISCAL YEAR.
-12-
<PAGE> 15
OTHER MATTERS
As of the date of this Proxy Statement, the Board of Directors does not
know of any other matters which may come before the Annual Meeting. If any other
matters properly come before the meeting, the accompanying proxy confers
discretionary authority with respect to any such matters, and the persons named
in the accompanying proxy intend to vote in accordance with their best judgment
on such matters.
All expenses in connection with the solicitation of proxies will be
borne by the Company. In addition to this solicitation, officers, directors and
regular employees of the Company, without any additional compensation, may
solicit proxies by mail, telephone or personal contact. Morrow & Co., Inc. has
been retained to assist in the solicitation of proxies for a fee of $4,000, plus
reasonable out-of-pocket expenses. The Company will, upon request, reimburse
brokerage houses and other nominees for their reasonable expenses in sending
proxy materials to their principals.
STOCKHOLDER PROPOSALS
Stockholder proposals for inclusion in the proxy materials for the 1998
Annual Meeting should be addressed to the Company's Secretary, 1200 Piedmont
Avenue, Suite 200, P.O. Box 51130, Pacific Grove, California 93950, and must be
received no later than December 15, 1997. In addition, the Company's By-laws
currently require that for business to be properly brought before an annual
meeting by a stockholder, regardless of whether included in the Company's proxy
statement, the stockholder must give written notice of his or her intention to
propose such business to the Secretary of the Company, which notice must be
delivered to, or mailed and received at, the Company's principal executive
offices not less than sixty (60) days and not more than ninety (90) days prior
to the scheduled annual meeting (except that if less than seventy (70) days'
notice of the date of the scheduled annual meeting is given, notice by the
stockholder may be delivered or received not later than the tenth (10th) day
following the day on which such notice of the date of the scheduled annual
meeting is mailed). Such notice must set forth as to each matter the stockholder
proposes to bring before the annual meeting: (i) a brief description of the
business desired to be brought before the meeting and the reasons for conducting
such business at the meeting, (ii) the name and address of the stockholder
proposing such business, (iii) the class and number of shares which are
beneficially owned by the stockholder, and (iv) any material interest of the
stockholder in such proposal. The By-laws further provide that the chairman of
the annual meeting may refuse to permit any business to be brought before an
annual meeting without compliance with the foregoing procedures.
By Order of the Board of Directors,
/s/ Gerald J. Kitchen
Gerald J. Kitchen
Executive Vice President,
General Counsel and
Chief Administrative Officer
Pacific Grove, California
April 11, 1997
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON SOLICITED
HEREBY, UPON THE WRITTEN REQUEST OF ANY SUCH PERSON, A COPY OF THE COMPANY'S
ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996, AS FILED
WITH THE SECURITIES AND EXCHANGE COMMISSION (WITHOUT EXHIBITS). REQUESTS SHOULD
BE MADE TO MR. GERALD J. KITCHEN, EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND
CHIEF ADMINISTRATIVE OFFICER, 1200 PIEDMONT AVENUE, P.O. BOX 51130, PACIFIC
GROVE, CALIFORNIA 93950.
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<PAGE> 16
PROXY
CENTURY ALUMINUM COMPANY
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR ANNUAL MEETING, MAY 13, 1997
The undersigned hereby appoints Craig A. Davis and Gerald J.
Kitchen the proxies (each with power to act alone and with power of
substitution) of the undersigned to vote at the Annual Meeting of
Stockholders of Century Aluminum Company to be held on May 13, 1997,
and at any adjournment, all shares of stock which the undersigned is
entitled to vote thereat upon all matters properly brought before the
meeting.
Dated:______________________, 1997
__________________________________
__________________________________
Signature of Stockholder
THIS PROXY MUST BE SIGNED
EXACTLY AS NAME APPEARS HEREON.
Executors, administrators, trustees, etc.,
should give full title as such. For joint
accounts, each owner should sign. If the
signer is a corporation, please sign full
corporate name by duly authorized officer.
(over)
(Continued from other side)
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
HEREIN BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
1. Election of Directors for term to expire in 2000. The nominees
are:
Roman A. Bninski Willy R. Strothotte
(Mark only one)
/ / VOTE FOR all nominees listed above, except vote withheld from
following nominees (if any):
_______________________________________________________________________
_______________________________________________________________________
/ / VOTE WITHHELD from all nominees.
2. Proposal to ratify the appointment of Deloitte & Touche LLP.
FOR AGAINST ABSTAIN
/ / / / / /
3. In their discretion, upon such other matters as may properly
come before the meeting.
----------------------------------------------------
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY
CARD PROMPTLY USING THE ENCLOSED ENVELOPE
----------------------------------------------------
