EXHIBIT 1.2
EXECUTION COPY
ARCH COAL, INC.
(a Delaware corporation)
Common Stock
Warrants to Purchase Common Stock
Preferred Stock
Warrants to Purchase Preferred Stock
Depositary Shares
Debt Securities
Warrants to Purchase Debt Securities
TERMS AGREEMENT
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May 2, 2001
To: Arch Coal, Inc.
CityPlace One
Suite 000
Xx. Xxxxx, XX 00000
Ladies and Gentlemen:
We understand that Arch Coal, Inc., a Delaware corporation (the "Company"),
proposes to issue and sell 8,500,000 shares of its common stock, par value $.01
per share (the "Common Stock") (such securities also being hereinafter referred
to as the "Initial Underwritten Securities"). Subject to the terms and
conditions set forth or incorporated by reference herein, the underwriters named
below (the "Underwriters") offer to purchase severally and not jointly, the
number of Underwritten Securities opposite their names set forth below at the
purchase price set forth below, and a proportionate share of Option Underwritten
Securities set forth below, to the extent any are purchased.
Number of
---------
Underwriter Initial Underwritten Securities
----------- -------------------------------
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx
Incorporated 5,100,000
Bear, Xxxxxxx & Co. Inc. 850,000
X. X. Xxxxxx Securities Inc. 850,000
Xxxxxx Brothers Inc. 850,000
Xxxxxx Xxxxxxx & Co. Incorporated 850,000
----------
Total 8,500,000
==========
The Underwritten Securities shall have the following terms:
Title: Common Stock of Arch Coal, Inc. par value $.01 per share
Number of shares: 8,500,000
Number of Option Underwritten Securities: 1,275,000
Initial public offering price per share: $33.00
Purchase price per share: $31.38
Listing requirements: NYSE-approved
Black-out provisions: During a period of 90 days from the date of this Terms
Agreement, the Company will not, without the prior written consent of Xxxxxxx
Xxxxx, (i) directly or indirectly, offer, pledge, sell, contract to sell, sell
any option or contract to purchase, purchase any option or contract to sell,
grant any option, right or warrant to purchase or otherwise transfer or dispose
of any share of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock or file any registration statement under the
1933 Act with respect to any of the foregoing or (ii) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part, directly
or indirectly, the economic consequence of ownership of the Common Stock,
whether any such swap or transaction described in clause or (ii) above is to be
settled by delivery of Common Stock or such other securities, in cash or
otherwise. The foregoing sentence shall not apply to: (A) the Securities to be
sold hereunder; (B) any shares of Common Stock issued or options to purchase
Common Stock granted pursuant to existing employee benefit plans of the Company
referred to in the Prospectus; or (C) any shares of Common Stock issued pursuant
to any non-employee director stock plan or dividend reinvestment plan in effect
as of the date of the Prospectus.
Lock-up provisions: The following persons will sign lockup letters on or prior
to the date of this Terms Agreement: Xxxxxx X. Xxxx, Xxxxxx X. Xxxxxx, Xxxxxxx
X. Xxxxxxxx, Xxxx Xxxxx, Xxxxx X. Xxxx, Xxxxx X. Xxxxx, Xx., Xxxxxxx Xxxxxxxxx
Xxxxxxx, Xxxxxx X. Xxxxx, Xxxxxxx X. Xxxx, Xxxxx X. Xxxxxx, X. Xxxxxxx Xxxxx,
Xxxxxx X. Xxxxxx and Xxxxxxxx X. Xxxxx.
Closing date and location: May 8, 2001, Xxxxxxx, Swaine & Xxxxx, 000 Xxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
All of the provisions contained in the document attached as Annex I hereto
entitled "ARCH COAL, INC--Common Stock, Warrants to Purchase Common Stock,
Preferred Stock, Warrants to Purchase Preferred Stock, Depositary Shares, Debt
Securities and Warrants to Purchase Debt Securities--Underwriting Agreement" are
hereby incorporated by reference in their entirety herein and shall be deemed to
be a part of this Terms Agreement to the same extent as if such provisions had
been set forth in full herein. Terms defined in such document are used herein
as therein defined.
Please accept this offer no later than 7 o'clock P.M. (New York City time)
on May 2, 2001, by signing a copy of this Terms Agreement in the space set forth
below and returning the signed copy to us.
Very truly yours,
XXXXXXX LYNCH, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By /s/ Xxxxx Xxxxxx
----------------------------------
Authorized Signatory
Acting on behalf of itself and the other named
Underwriters.
Accepted:
ARCH COAL, INC.
By /s/ Xxxxxx X. Xxxxxx
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Name:
Title:
