Exhibit 4.1
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.
2
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.
3
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 Transferees to have any
4
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 Mineral to address the issue (or eliminate
the
5
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:
6
(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;
7
(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
8
Agreement nor any right, remedy, obligation or liability arising hereunder 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/ Xxxxxx X. Xxxxx
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
9
