Stockholders Agreement
This Stockholders Agreement, dated as of April 4, 1997, is among
Carboex International, Ltd., a company organized under the laws of the
Bahamas ("Carboex"), Ashland Inc., a Kentucky corporation ("Ashland"), and
Arch Mineral Corporation, a Delaware corporation ("Arch Mineral").
WHEREAS, at the Effective Time, as defined in that certain
Agreement and Plan of Merger dated April 4, 1997, among Arch Mineral,
Ashland Coal, Inc. and AMC Merger Corporation (the "Merger Agreement"),
Ashland and Carboex will each own shares of the common stock, par value
$.01 per share, of Arch Mineral ("Common Stock"); and
WHEREAS, Carboex has relied upon this Agreement in consenting to
the merger provided for in the Merger Agreement;
WHEREAS, Ashland and Carboex deem it in their best interests and
the best interest of Arch Mineral that the voting power of the Common Stock
owned by Ashland and Carboex be exercised pursuant to prior agreement to
the extent and upon the terms and conditions stated herein; and
WHEREAS, Ashland, Carboex and Arch Mineral desire to enter into
certain agreements with respect to the ownership and transfer of shares of
Common Stock owned by Ashland and Carboex and with respect to the
nomination of persons for election to the Board of Directors of Arch
Mineral; and
NOW, THEREFORE, an agreement in respect of the shares of Common
Stock owned by Ashland and Carboex is hereby established upon the following
terms and conditions to all of which the parties hereto expressly assent
and agree:
SECTION 1. DEFINITIONS. As used in this Agreement, and unless the
context requires a different meaning, the following terms (whether used in
the singular or plural) have the meanings indicated:
"Affiliate" means, with respect to any Person, any Person that
controls, is controlled by or is under common control with such Person in
question. For the purposes of this definition, ("control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, shall mean the possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policies of such Person, whether through the ownership
of voting securities or by contract or otherwise.
"Exchange Act" means the Securities Exchange Act of 1934 as
amended from time to time and the rules and regulations of the SEC
thereunder.
"Industry Buyer" means a Person engaged primarily in the business
of industrial or natural resource production, distribution or sales, as
determined by the Board of Directors of Arch Mineral. The term Industry
Buyer shall also include financial buyers, financial intermediaries,
brokers, dealers, banks, investment banks or merchant banks ("Financial
Buyer") ONLY if the sale to such Financial Buyer will result, or is
reasonably likely to result at any time during the three-month period
immediately following the sale, in at least three individuals who were
members of the Board of Directors of Arch Mineral immediately prior to such
sale no longer serving as directors by reason of such sale.
"Permitted Transferee" means in the case of a Permitted Transferee
of Ashland, the Affiliate or Affiliates of Ashland to whom Ashland has
transferred all or part of its Voting Stock, or in the case of a Permitted
Transferee of Carboex, the Affiliate or Affiliates of Carboex to whom
Carboex has transferred all or part of its Voting Stock.
"Person" means an individual, corporation, limited liability
company, partnership, trust, incorporated or unincorporated association,
joint venture, joint stock company, government (or an agency or political
subdivision thereof) or other entity of any kind.
"Public Offering" means a public offering and sale of Common Stock
for cash pursuant to (i) an effective registration statement under the
Securities Act (other than pursuant to Form S-4 or S-8) and in compliance
with all applicable state securities laws, (ii) a private offering to
certain qualified institutional buyers in accordance with Rule 144A under
the Securities Act or (iii) an offering to non-U.S. persons outside the
United States in accordance with Regulation S under the Securities Act.
"Registration Rights Agreement" means that certain registration
rights agreement among Arch Mineral, Ashland, Carboex and certain other
parties dated the same date as this Agreement.
"SEC" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act or the Exchange
Act.
"Securities Act" means the Securities Act of 1933 as amended from
time to time and the rules and regulations of the SEC thereunder.
"Voting Stock" means capital stock of any class or classes of Arch
Mineral, the holders of which are entitled, in the absence of
contingencies, to participate generally in the election of the members of
Arch Mineral's Board of Directors, and any securities of Arch Mineral
convertible into, or exercisable or exchangeable for, any such capital
stock of Arch Mineral, including, without limitation, the Common Stock;
provided, HOWEVER, that any capital stock held in the treasury of Arch
Mineral or held by any subsidiary of Arch Mineral shall not be Voting
Stock.
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SECTION 2. DIRECTOR NOMINATION AND ELECTION. (a) The parties
hereto agree with the principle that Carboex, at all times during the
effectiveness of this Agreement and subject to the terms and conditions of
this Agreement, shall be entitled to be represented by one member of the
Board of Directors of Arch Mineral. Ashland and Arch Mineral agree they
shall take the following steps to cause one representative of Carboex to be
elected to the Board of Directors of Arch Mineral:
(i) Arch Mineral shall give at least 10 days' notice to
Ashland and Carboex of any meeting of its Board of Directors (or
any committee thereof) at which the Board's nominees for election
are to be selected. Upon receipt of such notice from Arch Mineral,
Carboex shall within 10 days thereafter furnish Arch Mineral with
a written designation of one nominee for election to the Board of
Directors of Arch Mineral, with a copy thereof to Ashland. Such
notice shall be given in the manner set forth in Section 6 of this
Agreement. If no written designation of a nominee is received by
Arch Mineral within the time frame specified herein, the current
director of Arch Mineral designated by Carboex shall be a nominee
for the ensuing election.
(ii) So long as this Agreement is in effect, Arch Mineral
hereby agrees to take all actions necessary to nominate or cause
to be nominated and to solicit proxies (and if properly executed
or otherwise valid, to vote all such proxies and other shares
which Arch Mineral management is otherwise entitled to vote in
accordance with the terms and requirements of this provision) for
election as a director at each annual meeting of stockholders (or,
if applicable, at any special meeting of stockholders) of Arch
Mineral, the representative of Carboex designated by Carboex or in
favor of the current director designated by Carboex, as the case
may be, pursuant to Section 2(a)(i) above.
(iii) So long as this Agreement is in effect, Ashland in
respect of the election of the directors of Arch Mineral, agrees
to vote or cause to be voted, in person or by proxy, the number of
the shares of Voting Stock now or hereafter held or owned directly
or indirectly by it which when combined with the shares of Voting
Stock held or owned directly or indirectly by Carboex and its
Permitted Transferees and the proxies received by Arch Mineral
under Section 2(a)(ii) above, will be sufficient to elect the
person Carboex designates in writing pursuant to Section 2(a)(i)
above as a director of Arch Mineral.
In addition, so long as this Agreement is in effect, if
Ashland or its Permitted Transferees shall be the beneficial owner
(as defined in Rule 13d-3(a) under the Exchange Act) of less than
20% but more than 10% of the outstanding Voting Stock, then
Ashland shall be entitled to vote the shares of Voting Stock held
or owned directly or indirectly by Ashland in such manner as it
may, in its sole discretion, deem advisable, to elect the number
of directors of Arch Mineral that it would be entitled to elect
with cumulative voting for election of directors, and Ashland
further agrees to vote any remaining shares of its Voting Stock
for election of the Carboex representative as provided above.
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Except as specifically set forth in this Section
2(a)(iii), Ashland shall be free to vote its shares of Voting
Stock in such manner as it may, in its sole discretion, deem
advisable.
(iv) So long as this Agreement is in effect, Carboex may
designate a successor to fill any vacancy created by the death,
resignation, or incapacity of its designated nominee to the Arch
Mineral Board of Directors by giving notice to Arch Mineral in the
manner set forth in Section 6 of this Agreement setting forth the
name of the new designee. Arch Mineral will recommend to the Board
such new designee and Ashland will vote its shares in the election
of directors, if required, to cause the Board to appoint Carboex's
designee and each of Arch Mineral and Ashland will cause to be
taken all steps to assure the continued representation of Carboex
on the Arch Mineral Board of Directors contemplated by this
Section 2.
(b) Notwithstanding the foregoing Sections 2(a) (i) - (iv) , if at
any time during the term of this Agreement Arch Mineral adopts a staggered
Board of Directors, Arch Mineral and Ashland shall take all steps regarding
nomination and election of directors to ensure Carboex continues to be
represented by one member of the Board of Directors.
SECTION 3. TAG-ALONG RIGHT. (a) If at any time Ashland or any of
its Permitted Transferees desires to sell or otherwise dispose of ("sell")
50% or more of the then outstanding shares of Common Stock held by Ashland
or its Permitted Transferees, considered as a group, to an Industry Buyer,
or 20% or more of the total outstanding shares of Common Stock of Arch
Mineral at such time to an Industry Buyer, then at least 30 days prior to
selling such Common Stock to such Industry Buyer, Ashland shall deliver
written notice (the "Tag-Along Notice") to Carboex specifying (i) the
identity of the Industry Buyer, (ii) the number of shares of Common Stock
owned by Ashland and its Permitted Transferees which they propose to sell,
(iii) the proposed price per share to be paid to Ashland or its Permitted
Transferees by the Industry Buyer, (iv) the form of consideration (e.g.,
cash or notes) to be paid by such Industry Buyer and (v) any other material
terms and conditions of the proposed sale (the "Proposed Sale") . Within
15 days following its receipt of the Tag-Along Notice, Carboex may, if it
desires to exercise its Tag-Along Right, deliver a written notice (a
"Tag-Along Instruction") to Ashland stating that Carboex desires to
participate in the Proposed Sale and setting forth the number of shares of
Common Stock then held by Carboex and its Permitted Transferees to be sold
in the Proposed Sale (it being expressly agreed that Carboex may not
exercise its Tag-Along rights for less than all the Common Stock held by
Carboex and its Permitted Transferees). A Tag-Along Instruction delivered
pursuant to this Section 3(a) shall be deemed to be an irrevocable
commitment by Carboex and its Permitted Transferees to sell pursuant to the
Proposed Sale the number of shares of Common Stock held by Carboex and its
Permitted Transferees set forth in the Tag-Along Instruction. Failure to
provide a Tag-Along Instruction within the 15-day period specified in this
Section 3(a) shall constitute a waiver of the right of Carboex and its
Permitted
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Transferees to have any shares of Common Stock included in the Proposed
Sale. Carboex's Tag-Along right provided in this Section 3(a) shall not
apply to transfers by Ashland to its Permitted Transferees, to Public
Offerings or to sales of Common Stock pursuant to the Registration Rights
Agreement.
(b) In the event Carboex timely elects to exercise its Tag-Along
rights, Carboex shall deliver to Ashland, at the same time the Tag-Along
Instruction is delivered, the certificate or certificates representing the
shares of Common Stock to be sold by Carboex and its Permitted Transferees
duly endorsed in blank for transfer, free and clear of all liens other than
any liens created by action of Ashland, but without any other
representation or warranty, other than customary representations and
warranties given in transactions of this sort and with all requisite stock
transfer tax stamps attached, together with a limited power-of-attorney
authorizing Ashland to sell such shares of Common Stock in accordance with
the terms of the Tag-Along Notice. Promptly after the consummation of the
Proposed Sale, Ashland shall notify Carboex of such consummation, shall
remit to Carboex the net consideration received (less an allocable portion
of the transfer taxes and reasonable out-of-pocket expenses) for the shares
of Common Stock of Carboex and its Permitted Transferees sold pursuant to
the Proposed Sale, and shall furnish such other evidence of the completion
and time of completion of the Proposed Sale and the terms thereof as may be
reasonably requested in writing by Carboex. If the net consideration
received in the Proposed Sale is comprised of cash and non-cash proceeds,
Carboex will receive its pro rata portion of each type of net consideration
based on the percentage of the total number of shares sold represented by
the shares sold by Carboex and its Permitted Transferees. If at the end of
six months from the date of the Tag-Along Notice, Ashland has not completed
the Proposed Sale of the Common Stock of Carboex designated by a Tag-Along
Instruction to be sold to the Industry Buyer, Ashland shall return to
Carboex all certificates representing shares of Common Stock which Carboex
delivered pursuant to this Section 3, and all the rights and obligations
contained in this Agreement with respect to such shares of Common Stock
(other than Common Stock of Ashland being transferred in the Proposed Sale)
shall again be in effect and Ashland may not effect another Section 3
Proposed Sale without repeating the foregoing procedures.
(c) Notwithstanding anything contained in this Section 3 and
subject to compliance by Ashland and its Permitted Transferees with the
provisions of this Section 3, there shall be no liability on the part of
Ashland or its Permitted Transferees to Carboex or its Permitted
Transferees if the Proposed Sale pursuant to this Section 3 is not
consummated for any reason whatsoever. Any decision as to whether to sell
in the Proposed Sale shall be at Ashland's sole and absolute discretion.
SECTION 4. ENFORCEABILITY. Arch Mineral hereby represents that
this Agreement is its valid and binding obligation enforceable against it
in accordance with its terms, except to the extent that the terms may
conflict with the Bylaws of Arch Mineral. If it is determined that due to
any such conflict the obligations of any of the parties to this Agreement
are not enforceable, then Arch Mineral, Ashland and Carboex agree to use
their best efforts to effect an amendment to the Bylaws of Arch
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Mineral to address the issue (or eliminate the inconsistency) that created
the unenforceability all consistent with the principle that Carboex, at all
times during the effectiveness of this Agreement and subject to the terms
and conditions of this Agreement, shall be entitled to be represented by
one member of the Board of Directors of Arch Mineral. Except in respect of
any Arch Mineral obligation that requires it to act in a manner
inconsistent with its Bylaws, Arch Mineral represents that its obligations
hereunder comply in all respects with the provisions of the Delaware
General Corporation Law, including, without limitation, Sections 211 and
223 thereof.
SECTION 5. TERMINATION. This Agreement shall terminate upon the
earliest to occur of the following:
(a) In the event that Arch Mineral shall merge or consolidate
with any other corporation (Arch Mineral not being the surviving
corporation) and, upon consummation of such merger or
consolidation, the stockholders of Arch Mineral immediately prior
to such merger or consolidation shall not own at least 40% of the
outstanding shares of voting stock of the corporation whose
securities are exchanged in the merger, or if Arch Mineral shall
sell, lease or transfer all or substantially all the property,
assets or business of Arch Mineral; or
(b) If at any time Carboex or its Permitted Transferees shall be
the beneficial owner (as defined in Rule 13d-3(a) under the
Exchange Act) of less than 63% of the shares of Common Stock
owned by Carboex at the Effective Time (as that term is defined
in the Combination Agreement); provided that Carboex shall be
deemed to hold for this purpose any shares of Arch Mineral Common
Stock which Carboex has transferred to Arch Mineral or any
subsidiary of Arch Mineral in exchange for voting equity
securities of approximately equivalent voting power of Arch
Mineral or such subsidiary.
In addition, this Agreement shall terminate as to Ashland only but
not as to Arch Mineral or Carboex if at any time Ashland or its Permitted
Transferees shall cease to be the beneficial owner (as defined in Rule
13d-3 (a) under the Exchange Act) of 10% or more of the outstanding Voting
Stock.
SECTION 6. NOTICES. Any notice or other communication hereunder
shall be in writing and shall be duly given (i) on the date of delivery if
received in person; (ii) on the third business day after dispatch if sent
by documented overnight international delivery service such as Federal
Express; (iii) on the date of transmission if sent by facsimile
transmission, provided that a confirmation copy thereof is sent no later
than the business day following transmission by documented overnight
delivery service or certified mail, postage prepaid, return receipt
requested. Notices or other communications shall be directed to the
following addresses:
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(a) Ashland Inc.
X.X. Xxx 000
Xxxxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
(b) Carboex International, Ltd.
c/o Carboex X.X.
Xxxxx Xxxxxx Xxxxxxx
Xx. 0, Xxxxxx, 00, Xxxxx
Attention: Chairman
Fax: 000-000-000-0000
(c) Arch Mineral Corporation
Suite 000
XxxxXxxxx Xxx
Xx. Xxxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
All such notices, except those received in person, shall be deemed
received on the date of receipt by the recipient thereof if received prior
to 5 p.m. in the place of receipt and such day is a business day in the
place of receipt. Otherwise, any such notice shall be deemed not to have
been received until the next succeeding business day in the place of
receipt.
Any of the parties hereto may, by notice given in accordance with
this Section 6, specify a new address for notices under this Agreement.
SECTION 7. MISCELLANEOUS. (a) Remedies; Jurisdiction. Each of the
parties hereto acknowledge and agree that in the event of any breach of
this Agreement, the nonbreaching party or parties would be irreparably
harmed and could not be made whole by monetary damages. It is accordingly
agreed that the parties hereto will waive the defense in any action for
specific performance that a remedy at law would be adequate and that the
parties hereto, in addition to any other remedy to which they may be
entitled at law or in equity, shall be entitled to compel specific
performance of this Agreement. With respect to any suit, action or
proceeding relating to this Agreement ("Proceedings"), each party
irrevocably:
(i) submits to the exclusive jurisdiction of the courts of the
State of Delaware and the United States District Court for the District of
Delaware;
(ii) waives any objection which it may have at any time to the
laying of venue of any Proceedings brought in any such court, waives any
claim that such Proceedings have been brought in an inconvenient forum and
further waives the right to object, with respect to such Proceedings, that
such court does not have jurisdiction over such party;
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(iii) consents and agrees that the service of any and all legal
process, summons, notices and documents which may be served in any
Proceedings arising hereunder may be made by complying with the provisions
set forth in Section 6 hereof, with such service to be effective upon
receipt;
(iv) waives posting of a bond or other security; and
(v) waives any right it may have to a trial by jury.
(b) HEADINGS. The headings in this Agreement are for convenience
of reference only and shall not control or affect the meaning or
construction of any provision hereof.
(c) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and understanding of the parties hereto in respect of the subject
matter contained herein and there are no restrictions, promises,
representations, warranties, covenants or undertakings with respect to the
subject matter hereof other than those expressly set forth or referred to
herein or therein. This Agreement supersedes all prior agreements and
understandings between the parties hereto with respect to the subject
matter hereof and thereof.
(d) APPLICABLE LAW. The validity of this Agreement, or any part
hereof, and the interpretation of all provisions hereof, shall be governed
by the laws of the State of Delaware.
(e) SEVERABILITY. The invalidity, illegality or unenforceability
of any provision of this Agreement in any jurisdiction shall not affect the
validity, legality or enforceability of the remainder of this Agreement in
such jurisdiction or the validity, legality or enforceability of this
Agreement or such provision in any other jurisdiction, it being intended
that all rights and obligations of the parties hereunder shall be
enforceable to the fullest extent permitted by law.
(f) AGREEMENT TO BE BOUND. Notwithstanding anything to the
contrary contained in this Agreement, no shares of Voting Stock may be
sold, transferred or otherwise disposed of to any Permitted Transferee
unless such Permitted Transferee, prior to such sale, transfer or other
disposition, agrees in writing, in form and substance satisfactory to Arch
Mineral, to be bound by the terms of this Agreement to the same extent and
in the same manner as the transferor of such shares, a copy of which
writing shall be maintained on file with the Secretary of Arch Mineral and
shall include the address of such Permitted Transferee to which notices
hereunder shall be sent.
(g) SUCCESSORS; ASSIGNS; TRANSFEREES. The provisions of this
Agreement shall be binding upon and accrue to the benefit of the parties
hereto and their respective successors and Permitted Transferees.
Notwithstanding the foregoing, neither this Agreement nor any right,
remedy, obligation or liability arising hereunder
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or by reason hereof shall be assignable (including by pledge or other
security interest) by any of the parties hereto without the prior written
consent of Ashland and its Permitted Transferees and Carboex and its
Permitted Transferees; provided, however, that Ashland or Carboex may
assign its or their rights, remedies, obligations and liabilities in
connection with a transfer of its or their shares of Voting Stock to a
Permitted Transferee in accordance with the terms of this Agreement.
(h) AMENDMENTS; WAIVERS. This Agreement may not be amended,
modified or supplemented and no waivers of or consents to departures from
the provisions hereof may be given unless consented to in writing by each
of the parties hereto.
(i) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which, when so executed, shall be deemed to be an
original, and such counterparts shall together constitute one and the same
instrument.
(j) LIMITED LIABILITY. Notwithstanding any other provision of this
Agreement, none of the present or future directors, officers, or
stockholders of the parties hereto shall have any personal liability for
performance of any obligation of such party under this Agreement.
IN WITNESS WHEREOF, the undersigned parties have executed this
Agreement, all as of the day and year above written.
ASHLAND INC.,
By: /s/ Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President,
General Counsel and Secretary
CARBOEX INTERNATIONAL, LTD.,
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx
Title: Director
ARCH MINERAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
Name: Xxxxxxx X. Xxxxx
Title: Senior Vice President
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