Exhibit 99.5
SHAREHOLDERS' AGREEMENT
THIS DEED is made May 10, 1996
BETWEEN:
(1) ALCOA INTERNATIONAL HOLDINGS COMPANY, a company incorporated in the
State of Delaware, United States of America and having its principal
place of business at 0 Xxxxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx, Xxxxxx
Xxxxxx of America ("AIHC"); and
(2) WMC LIMITED ACN 004 820 419, a company incorporated in the State of
Victoria, Australia and having its principal place of business at 00
Xxxx Xxxx, Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxx (formerly called Western
Mining Corporation Holdings Limited) ("WMC").
RECITALS:
A. AIHC and WMC (both of which are hereinafter collectively called the
"Principal Shareholders" and each of which is hereinafter individually
called a "Shareholder") are the principal shareholders in the Company
(as hereinafter defined) each beneficially owning ordinary voting
shares in the Company as follows:
Shareholder Shares Percentage
AIHC 249,240,000 60.0%
WMC 163,044,500 39.25%
B. The balance of the issued capital in the Company, namely 3,115,500
ordinary shares representing point seven five per centum (0.75%) of the
issued capital, is held by QBE Securities Pty Limited (0.50%) and QBE
Nominees Pty Limited (0.25%).
C. Pursuant to the terms of a Master Agreement made 16 December 1987
between Aluminum Company of America ("ACOA") (a company incorporated in
the Commonwealth of Pennsylvania, United Sates of America and the
ultimate holding company of AIHC) and WMC (the "1987 Master
Agreement"), AIHC and WMC entered into a Deed in December 1987 (the
"Existing Shareholders' Agreement") which constituted a shareholders'
agreement between them governing certain matters of mutual interest.
D. Since the date of the Existing Shareholders' Agreement:
(i) WMC has acquired certain shares in the Company from
institutional investors;
(ii) ACOA and WMC have agreed to combine their interests in bauxite
mining, alumina refining and the ACOA inorganic industrial
chemicals operations as well as certain integrated aluminum
fabricating and smelting operations to form a world-wide
enterprise and have signed (inter alia) a document described
as the Charter of the Strategic Council (the "Charter") which
sets forth certain principles and policies for the management
of the entities and operations comprising the world-wide
enterprise and concerning the rights and obligations of ACOA
and WMC with regard to their respective interests in those
entities and operations; and
(iii) in connection with the formation of the worldwide enterprise,
WMC has transferred to AIHC 37,386,000 ordinary shares in the
Company, representing nine percent (9%) of the issued capital
in the Company.
E. Pursuant to the terms of the 1987 Master Agreement, ACOA, Alcoa
Securities Corporation ("ASC") (a company incorporated in the State of
Delaware, United States of America) and WMC entered into a further Deed
in December 1987 (the "AIHC Right of First Refusal Deed") which
provided among other matters of mutual interest that ACOA and ASC will
not dispose of their shares in AIHC without first offering them to WMC
in accordance with the terms of that Deed.
F. The Principal Shareholders now wish to enter into a new shareholders'
agreement to govern certain matters of mutual interest on the terms and
conditions following and to terminate the Existing Shareholders'
Agreement.
G. Pursuant to clause 4 thereof the AIHC Right of First Refusal Deed will
cease to have force and effect upon termination of the Existing
Shareholders' Agreement.
THE PARTIES HEREBY AGREE AND DECLARE as follows:
1. DEFINITIONS
1.1 In this Deed:
"Affiliate" means, in relation to a Shareholder, any entity, directly
or indirectly, controlling, controlled by, or under common control with
that Shareholder. Without limiting the generality of the foregoing, an
entity shall be deemed to be in control of or to be controlled by
another entity if such entity holds fifty percent (50%) or more of the
outstanding voting equity interest in such other entity or such other
entity holds fifty percent (50%) or more of its outstanding voting
equity interest;
"Charter" means the charter of the Strategic council of the Enterprise
dated December 21, 1994 between ACOA and WMC, described further in
Recital D (ii);
the "Company" means Alcoa of Australia Limited ACN 004 879 298, a
company incorporated in the State of Victoria, Australia, and having
its principal place of business at 000 Xxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx, Xxxxxxxxx;
"Competitor" shall mean any person or entity engaged in the mining of
bauxite or in the processing of alumina, inorganic chemicals or
production of primary aluminium, whether directly or indirectly through
any company in which it holds, whether legally or beneficially, ten
percent (10%) or more of the issued capital or such number of shares in
the issued capital or any class of shares in the issued capital which
entitles it to ten percent (10%) or more of the voting power of the
share in that company;
"Enterprise" means the contractual arrangement by which WMC and ACOA
shall cause the Enterprise Companies to take actions in a coordinated
manner, through which WMC and ACOA will combine their respective
current interests in bauxite mining, alumina refining and the ACOA
inorganic chemicals operations as well as ACOA's shipping operations
and certain integrated aluminium fabricating and smelting operations;
"Enterprise Companies" means those Affiliates of ACOA or WMC that own
and operate the combination of ACOA's and WMC's respective current
interests in bauxite mining, alumina refining and the ACOA inorganic
chemicals operations as well as ACOA's shipping operations and certain
integrated aluminium fabricating and smelting operations;
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"Interest" means in relation to a shareholder of the Company the total
number of issued ordinary shares in the Company which are beneficially
owned by that shareholder;
"Percentage Interest" means, with respect to any shareholder and with
respect to any point in time, the proportion, expressed as a
percentage, which that shareholder's Interest bears to the total number
of issued ordinary shares in the Company, determined without reference
to any other class or classes of shares;
"Scope of Company" means the scope of the Company as referred to in
clause 2; and
"Strategic Council" means the council formed by ACOA and WMC to
coordinate the activities of the Enterprise.
1.2 In this Deed, unless the context otherwise requires:
(a) the singular includes the plural and vice versa;
(b) a reference to an individual or person includes a corporation,
partnership, joint venture, association, authority, trust,
state or government and vice versa;
(c) a reference to any gender includes all genders;
(d) a reference to a recital, clause or schedule, is to a recital,
clause or schedule of or to this Deed;
(e) a recital or schedule forms part of this Deed;
(f) a reference to any agreement or document is to that agreement
or document (and, where applicable, any of its provisions) as
amended, notated, supplemented or replaced from time to time;
(g) a reference to any part to this Deed or any other document or
arrangement includes that party's administrators, substitutes,
successors and permitted assigns;
(h) where an expression defined, another part of speech or
grammatical form of that expression has a corresponding
meaning; and
(i) words and phrases defined in the recitals or elsewhere in this
Deed have the meaning there ascribed to them.
2. SCOPE OF THE COMPANY
The Scope of the Company shall be limited to the Scope of the
Enterprise as set forth in Section 5 of the Charter.
3. NOMINATION OF DIRECTORS
The board of directors of the Company shall consist of six directors, A
director may be any natural person who may, but need not, be an
employee of any of the Principal Shareholders or the Company. The
Principal Shareholders agree that four directors shall be individuals
nominated by AIHC, and two directors shall be individuals nominated by
WMC. Each Shareholder agrees to vote its Interest to elect as directors
the individuals nominated by the other Shareholder. In the case of the
death, resignation or removal of a director each Shareholder further
agrees to vote its Interest to appoint as his or her replacement an
individual nominated by the Shareholder which had nominated the
director whose death, resignation or removal is the cause of the
vacancy.
4. DECISIONS REQUIRING APPROVAL OF BOTH THE PRINCIPAL SHAREHOLDERS
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4.1 The Principal Shareholders agree that a resolution relating to any of
the matters described in clause 4.3 shall be adopted, only if both
Principal Shareholders are in favour of the resolution. If one of the
Principal Shareholders informs the other Principal Shareholder in
writing that it intends to vote against a resolution, the other
Principal Shareholder shall vote against the resolution or shall
obstain from voting.
4.2 The Principal Shareholders shall use their best endeavours to procure
that a resolution of the directors of the Company relating to any of
the matters described in clause 4.3 shall be adopted, whether at a
meeting of directors of otherwise, only if both Principal Shareholders
are in favour of the resolution. If one of the Principal Shareholders
informs the other Principal Shareholder writing that it is opposed to
the resolution, the other Principal Shareholder shall use its best
endeavours to procure that the directors appointed by that Shareholder
vote against the resolution.
4.3 Clauses 4.1 and 4.2 apply to any resolution concerning:
(a) change of the Scope of the Company;
(b) change in the dividend policy of the Company;
(c) equity requests to the Principal Shareholders on behalf of the
Company totaling in any one year more than US$ 1 billion;
(d) sale of all or a majority of the assets of the Company (such
assets to be valued for this purpose at the Company book
value); or
(e) loans (whether directly or indirectly) to ACOA or WMC or their
Affiliates by the Company or any of its Affiliates.
4.4 Subject to clauses 4.1 to 4.3 inclusive and the requirements of
Australian law, questions arising at any meeting of the directors or of
the members of the Company shall be decided by a majority of votes
cast, in accordance with the articles of association of the Company.
4.5 The Principal Shareholders hereby authorise the board of directors of
the Company to manage, on a daily basis, the business and affairs of
the Company on behalf of the Principal Shareholders in a manner
consistent with this Agreement, the applicable law, the Articles of
Association of the Company and the direction of the Strategic Council.
5. LEVERAGING POLICY
The Principal Shareholders agree that the Company will maintain a limit
of debt (net of cash) in the aggregate equalling 30% of the total
capital of the Company Plus any minority interest plus shareholder
equity.
6. DIVIDEND POLICY
Subject to the requirements of Australian law, the Principal
Shareholders shall join together to cause the Company to distribute by
way of dividends at least 30% of the net income of the Company as
calculated in accordance with United States generally accepted
accounting principles and as certified by the auditor of the Company of
the prior year in each financial year unless the Strategic Council
agrees by a vote of 80% of the appointed members that the Company
should pay a smaller dividend and so directs the Principal
Shareholders. The Principal Shareholders will endeavour to cause the
Company to distribute dividends above 30% of the net income of the
Company consistent with prudent financial management and in the
context of the strategic and business objectives of the Enterprise.
Subject to the requirements of Australian law, distributions by the
Company are subject to the dividend policy set forth in Section 10 of
the Charter of the Strategic Council.
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7. RESTRICTIONS ON TRANSFER
7.1 General Restrictions of Transfer
(a) Transfers Other than to Affiliates of Principal Shareholders.
Except as otherwise provided in subclause (b) of this clause
7.1 (relating to permitted transfers to Affiliates of
Principal Shareholders), no Principal Shareholder may sell,
transfer or assign (hereinafter in this clause 7 referred to
interchangeably as "Transfer") to any individual or entity
(each a "Transferee") all or any portion of an Interest unless
(I) such Transfer is expressly permitted under this clause 7,
and (ii) such Transferee first executes a deed, reasonably
satisfactory to the other Principal Shareholder, accepting and
agreeing to all of the terms and conditions of this Deed
(including specifically, without limitation, of clause 7).
(b) Notwithstanding the provisions of subclause (a) of this clause
7.1, any Principal Shareholder may, without the consent of the
other Principal Shareholder, and without first making any
Offer to the other Principal Shareholder as described in
clause 7.3 hereof. Transfer all or any portion of such
Principal Shareholder's Interest to an Affiliate of such
Principal Shareholder, provided, however, that such Affiliate
must satisfy all of the requirements of subclause (a) of this
clause 7.1 that are applicable to Transfers to a Transferee
that is not an Affiliate of a Principal Shareholder.
7.2 Permissible Transfers by AIHC
(a) Passive Investor.
Notwithstanding the provisions of clause 7.1(a) hereof, if, at
any time, AIHC desires to Transfer a portion of its Interest
that is a nine percent (9%) or less Percentage Interest in the
Company to an investor who will not be entitled to manage or
bind the Company nor be represented on the board of a
Shareholder or on any Affiliate boards, consent to such
Transfer by WMC shall not be required and AIHC shall not be
required to make any Offer to the other Principal Shareholder
as described in clause 7.3 hereof. Such investor shall only
receive business information about the Company that is
required by the law governing the Company, plus additional
information as is believed reasonable by AIHC as being
appropriate for the particular investor and consented to by
WMC, which consent may be withheld in its sole discretion.
Said investor shall be entitled to share in the distributions
of the Company in proportion to its Percentage Interest in the
Company. AIHC shall give not less than thirty (30) days prior
written notice to WMC of its intent to so transfer such part
of its Interest.
(b) Active Investor.
Notwithstanding the provisions of clause 7.1(a) hereof, if
an any time AIHC desires to Transfer a portion of its
Interest that is a nine percent (9%) or less Percentage
Interest in the Company to an investor (other than as
described in clause 7.2(a)), AIHC must first obtain the
consent of WMC to such Transfer, which consent shall not be
unreasonably withheld, but AIHC shall not be required to
make any Offer to the other Principal Shareholder as
described in clause 7.3
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hereof, and WMC shall not have any right pursuant to clause
7.3 hereof, and WMC shall not have any right pursuant to
clause 7.3 hereof to purchase any part of such portion of the
Interest of AIHC. AIHC shall specify a time and a place of
closing not less than ten (10) nor more than twenty (20)
business days following the date of consent by WMC and AIHC
shall deliver to such investor at the closing all requisite
and duly executed forms of transfer against payment for the
portion of the Interest being Transferred.
(c) Aggregate 9% Transfers.
Notwithstanding the foregoing provisions of this clause 7.2,
the aggregate Percentage Interest that may be Transferred by
AIHC under both subclause (a) and subclause (b) of this clause
7.2 shall not exceed a nine percent (9%) Percentage Interest
in the Company.
7.3 Offers to the Other Principal Shareholder
Except as otherwise provided in clause 7.1(b) or clause 7.2 hereof, if
at any time during the term of this Agreement any Principal Shareholder
desires to Transfer all or any portion of its Interest, such Principal
Shareholder shall first make an offer in writing delivered to the other
Principal Shareholder (an "Offer") to sell such Interest or portion
thereof to the other Principal Shareholder in accordance with the
provisions of clause 7.4 and 7.5 hereof.
7.4 Options
For a period of forty-five (45) days from and after the receipt of an
Offer from a Principal Shareholder (the "Transferring Member"), the
other Principal Shareholder (a "Purchasing Member"), shall have the
option (an `Option") either to: (a) purchase (either directly or by an
Affiliate of the Purchasing Member) the Transferring Member's Interest
available for sale upon the same terms and conditions as specified in
the Offer: or (b) decline to purchase the Transferring Member's
Interest so available. During the foregoing forty-five (45) day period,
the Transferring Member shall furnish to the other Principal
Shareholder such further evidence as it may reasonably require to
enable it to establish the bona fides of the Offer.
7.5 Election of Options
(a) Purchase by Other Principal Shareholder
If a Purchasing Member elects to purchase the Transferring
Member's Interest available for sale pursuant to clause 7.2
hereof: (a) such Purchasing Member shall specify a time and a
place of closing not less than ten (10) nor more than sixty
(60) business days following the mailing of the notice of
exercise of the Option to purchase or at such later time as
agreed to by the Transferring Member and such Purchasing
Member: and (b) the Transferring Member shall deliver to the
Purchasing Member, or to its designee (which must be an
Affiliate of the Purchasing Member), at the closing all
requisite and duly executed forms or
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transfer against payment for the Transferring Member's
Interest being sold upon the same terms as set forth in the
Offer.
(b) Election Not to Purchase.
If the Purchasing Member does not exercise its Option to
purchase all of the Transferring Member's Interest that is the
subject of the Offer pursuant to subclause (a) of this clause
7.5 or fails to elect any Option granted in clause 7.4 above
within the said forty-five (45) days period, then the
Transferring Member may sell its Interest that is the subject
of the Offer to a third party upon the same or more stringent
terms and conditions as specified in the Offer, provided that
the prospective purchaser is not a Competitor: provided,
however, that the prospective purchaser, concurrently with
such sale, agrees in a written undertaking, in form and
substance reasonably acceptable to the Purchasing Member, to
be bound by the terms of this Deed and the Charter and to be a
party to this Deed in place of the Transferring Member. The
closing of the sale to a third party must take place within
sixty (60) days of the expiration of the aforementioned
forty-five (45) day period. If the prospective purchaser is a
competitor, the Transferring Member shall only be entitled to
sell its Interest to the Competitor if the Purchasing Member
consents to the sale of the Transferring Member's Interest
upon the terms and conditions specified in the Offer, which
consent the Purchasing Member may withhold in its sole
discretion. If a Purchasing member withholds consent to the
sale of the Transferring Member's Interest to a Competitor,
then the Transferring Member shall not sell its Interest to
such Competitor, and the Purchasing Member shall not be liable
to the Transferring Member for any liability incurred by the
Transferring Member in connection with the Offer.
If the Transferring Member does not sell its Interest as
provided in this clause 7.5, the Transferring Member's
Interest shall not be free from the restrictions contained in
this clause 7, and such Transferring Member's Interest shall
not thereafter be sold unless the provisions of this clause 7
shall again be complied with.
7.6 Recognition by Company of Transfers.
No Transfer, or any part thereof, that is in breach of this clause 7
shall be valid or effective, and the Principal Shareholders shall not,
and shall use their best endeavours to procure that the board of
directors of the Company shall not, recognise the same for the purpose
of making any distributions to members with respect to such Interest of
part thereof. The Company, the non-transferring Shareholders and the
board of directors of the Company shall incur no liability as a result
of refusing to make any such distributions to the Transferee of any
such invalid transfer.
8. DISPUTE RESOLUTION
8.1 Board
All disputes, differences, controversies or claims between either of
the Principal Shareholders related to the Company shall be initially
discussed by the board of directors of the Company (the "Board"). A
Principal Shareholder may refer a matter to the Board with a view to
resolution by delivering written notice describing the matter to all
members of the Board. Unless the notice identifies the matter to be
one of such urgency that a special meeting of the Board is required.
The matter shall be taken up at the next regularly scheduled meeting
of the Board following receipt of notice of the dispute. The Board
shall attempt to resolve the dispute through amicable conciliation,
and may consult outside experts for assistance in attempting to
resolve the dispute.
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8.2 Strategic Council
If the Board is unable to resolve the dispute by unanimous consent
within sixty (60) days, either Principal Shareholder may refer the
matter for further resolution to the Strategic Council by delivering
written notice describing the matter to all members of the Strategic
Council. Unless the notice identifies the matter to be one of such
urgency that a special meeting of the Strategic Council is required,
the matter shall be taken up at the next regularly scheduled meeting of
the Strategic Council following receipt of notice of the dispute. The
Strategic Council shall attempt to resolve the dispute through amicable
conciliation, and may consult outside experts for assistance in
attempting to resolve the dispute.
8.3 Final Resolution
If the Strategic Council is unable to resolve the dispute by unanimous
consent within sixty (60) days, either Principal Shareholder may refer
the matter for further resolution pursuant to the procedures set forth
in Section 11 of the Charter.
9. AMENDMENT OF ARTICLES OF ASSOCIATION
The Principal Shareholders hereby agree to cause a general meeting of
members of the Company to be held as soon as practicable for the
purpose of adopting, in substitution for the existing Articles of
Association of the Company, the Articles of Association set out in the
Annexure to this Deed, and to vote at that meeting in favour of
adopting those new Articles of Association.
10. TERMINATION OF EXISTING SHAREHOLDERS' AGREEMENT
From the date of this deed the Existing Shareholders' Agreement shall
no longer have any force or effect and shall be terminated and the
respective rights, duties and obligations of AIHC and WMC thereunder
shall from such date cease to exist.
11. TERMINATION OF AIHC RIGHT OF FIRST REFUSAL DEED
The parties acknowledge that pursuant to clause 4 thereof, the AIHC
right of First Refusal Deed will cease to have force and effect upon
termination of the Existing Shareholders' Agreement from the date of
this Deed.
12. MISCELLANEOUS
12.1 The benefit of any rights conferred by this Deed on any Shareholder
shall not be assignable at law or in equity without the prior written
agreement of all parties to this Deed. Such agreement shall not be
unreasonably withheld in the case of an assignment by a Shareholder to
an Affiliate, PROVIDED THAT the Affiliate enters into a deed comparable
hereto by which it undertakes to observe and perform all the
obligations of that Shareholder which are contained in this Deed.
12.2 This Deed shall be construed in accordance with, and be governed by,
the laws of the State of Victoria.
12.3 If any one or more of the provisions of this Deed should at any time be
invalid, illegal or unenforceable in any respect, the invalidity,
illegality or unenforceability shall not affect the
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operation, construction or interpretation of any other provision of
this Deed, to the intent that the invalid, illegal or unenforceable
provisions shall be treated for all purposes as severed from this
Deed.
12.4 No modification, variation, wavier or amendment of this Deed shall be
of any force or effect unless such modification, variation or amendment
is in writing and has been signed by all of the parties of this Deed.
12.5 Any notice or other communication which is required under this Deed
shall be given either:
(a) by airmail, with postage fully pre-paid;
(b) by delivery by hand; or
(c) by facsimile transmission;
properly addressed to the party at the address set forth below or to
such changed addresses as may be designated by such party by notice to
the other party;
if to AIHC:
Vice President
Alcoa International Holdings Company
0 Xxxxxxxxxx Xxxxxx
XX Xxx 0000 Xxxxxxxxxx XX 00000-0000
X.X.X.
Facsimile No: (000) 000 0000
if to WMC:
The Managing Director
WMC Limited
00 Xxxx Xxxx
Xxxxxxxxx, 0000
Xxxxxxxx, Xxxxxxxxx
Facsimile No. (00) 0000 0000
Any such notice given by airmail shall be deemed to have been given:
(a) on the tenth (10th) day after having been mailed in the manner
provided above;
(b) when delivered, if delivered by hand; and
(c) if given by facsimile transmission, on the day on which it is
sent.
Either party may change its address by giving the other party written
notice of such change in the manner provided above.
EXECUTED as a Deed.
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ALCOA INTERNATIONAL HOLDINGS COMPANY
By:
-----------------------------------
Xxxx X. Xxxxxx Xx.
Vice President
and its corporate seal was hereto affixed in the presence of:
--------------------------------------
THE COMMON SEAL OF WMC )
LIMITED was affixed in the presence )
of, and sealing is attested by: )
-------------------------------------- ---------------------------------
Secretary Director
Name (printed): Name (printed):
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