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EXHIBIT 10.3
CLOSE CORPORATION AND SHAREHOLDERS' AGREEMENT
This Close Corporation and Shareholder's Agreement (the
"Agreement") made to be effective as of the 24th day of March, 1994, by and
among Xxxx Xxxx Tinplate America Corp. ("Xxxx Xxxx America"), a California
corporation, Wheeling-Pittsburgh Corporation ("Wheeling-Pittsburgh"), a Delaware
corporation, Nittetsu Shoji America, Inc. ("Nittetsu"), a California
corporation, and Ohio Coatings Company ("Coating Company"), an Ohio corporation.
RECITALS:
(A) The Shareholders own all 100% of the issued and
outstanding Common and Preferred Shares of the Coating Company and are its only
Shareholders. Xxxx Xxxx America owns 600 shares of common, Wheeling-Pittsburgh
owns 600 shares of common and Nittetsu owns 300 preferred shares.
(B) The Shareholders desire to enter into an agreement
regulating certain aspects of (i) the internal affairs of the Coating Company,
(ii) the operations of the Coating Company and (iii) the relations among the
Shareholders, directors and officers of the Coating Company and each other
person who may thereafter become the holder of Shares of the Coating Company.
(C) The Shareholders and the Coating Company further desire to
enter into an agreement in respect of the issuance, sale, transfer,
distribution, encumbrance or other distribution of Shares of the Coating
Company.
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NOW, THEREFORE, in consideration of the premises and of their
mutual covenants set forth hereinafter, and subject to the fulfillment of the
remaining terms and conditions precedent set forth in the Letter of Intent dated
June 21, 1994, the parties hereto make the following agreement, intending to be
legally bound thereby.
ARTICLE ONE
Definitions
Section 1.01. Defined Terms. Each term with the initial letter
capitalized in this Agreement shall have the meaning specified herein, when used
in this Agreement, including the exhibits and schedules hereto.
Section 1.02. Articles. "Articles" means the Articles of
Incorporation of the Coating Company as in effect from time to time.
Section 1.03. Change in Control. "Change in Control" means,
with respect to Wheeling-Pittsburgh, the transfer to persons other than a
holding company of a majority of the capital stock of Wheeling-Pittsburgh Steel
Corporation or any transfer of substantially all of the assets of
Wheeling-Pittsburgh Steel Corporation, and means, with respect to Xxxx Xxxx
America or its parent, Xxxx Xxxx Tinplate Ind. Co., Ltd. ("Xxxx Xxxx"), the
transfer to persons who are not immediate members of the Xxxx family of a
majority of the capital stock of Xxxx Xxxx, any transfer of substantially all of
the assets of Xxxx Xxxx, or a change in ownership of Xxxx Xxxx America.
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Section 1.04. Code of Regulations. "Regulations" means the
Code of Regulations of the Coating Company as in effect from time to time.
Section 1.05. Impasse. "Impasse" means the inability of Xxxx
Xxxx America and Wheeling-Pittsburgh to agree on a Major Corporate Decision as
contemplated by Section 3.05(C) after the procedures set forth in this Section
1.05 have been exhausted:
A. If Wheeling-Pittsburgh and Xxxx Xxxx America disagree on a
Major Corporate Decision in the Coating Company's business, either may give
notice to the other that it believes that an Impasse is possible, whereupon
Wheeling-Pittsburgh and Xxxx Xxxx shall through their designees negotiate in
good faith, for a period of thirty (30) days from the date such notice was
given, a resolution of their disagreement.
B. If the disagreement has not been resolved within such
thirty (30) day period, then either:
(1) Wheeling-Pittsburgh and Xxxx Xxxx America shall
agree to defer the decision giving rise to the disagreement for a fixed period
of time and extend (if necessary) the Raw Materials Supply Agreement or other
long term agreements in which event no Impasse shall be deemed to have occurred;
or
(2) Wheeling-Pittsburgh and Xxxx Xxxx America shall
select an independent mediator and attempt to resolve the disagreement through
mediation. If the disagreement has not been resolved within seventy-five (75)
days after notice was given under Section 1.05(A), an Impasse shall be deemed to
have occurred.
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Section 1.06. Fair Market Value. "Fair Market Value" means a
value or price negotiated at arm's length between the affected parties. If the
parties cannot agree on a Fair Market Value for purposes of Sections 6.02 and
6.03, then it shall be determined by a certified appraiser selected by the
parties and, if the parties cannot agree, then by the Arbitrator.
Section 1.07. Shareholder. "Shareholder" means Xxxx Xxxx
America, Nittetsu and Wheeling-Pittsburgh, or their successors or assigns, but
excludes a purported transferee of any Shares of the Coating Company pursuant to
any transaction that contravenes the terms and conditions of this Agreement and
"Shareholders" means more than one Shareholder.
Section 1.08. Share. "Share" means any share of any class of
shares of the Coating Company.
Section 1.09. Common Share. "Common Share" means any of the
common Shares of the Coating Company.
Section 1.10. Preferred Share. "Preferred Share" means any
share of the non-voting (cumulative) preferred shares of the Coating Company.
Section 1.11. Substrate. "Substrate" shall mean the black
plate or cold rolled steel coils which will be converted to tin mill product by
the Coating Company.
Section 1.12. Toll Processing. "Toll Processing" means the
process of coating steel or other metal coils of another for a service charge.
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Section 1.13. Raw Materials Supply Agreement. "Raw Materials
Supply Agreement" refers to a long term agreement by the Coating Company to
purchase a substantial amount of its substrate requirements from
Wheeling-Pittsburgh Steel Corporation.
Section 1.14. Start-Up Date. The Start-Up Date shall mean the
date on which the line is first in service, producing commercially acceptable
product.
Section 1.15. Wheeling-Pittsburgh. "Wheeling-Pittsburgh" means
Wheeling-Pittsburgh Corporation, its subsidiaries, affiliates and related
entities.
Section 1.16. Out-of-Pocket Expenses. For purposes of Section
4.04, the term "Out-of-Pocket Expenses" shall mean the ordinary and necessary
business expenses incurred by personnel incident to their performance of
services, but shall not include normal living expenses.
ARTICLE TWO
Close Corporation Agreement
Section 2.01. Close Corporation Agreement. This Agreement is
to be a close corporation instrument governed by Section 1701.591 of the Ohio
Revised Code, and is a close corporation agreement as that term is defined in
Section 1701.01(X) of the Ohio Revised Code. This Agreement shall regulate
aspects of the internal affairs of the Coating Company and the relations of the
Shareholders, Directors and Officers of the Coating Company between themselves
to the extent set forth herein and, if the Articles or Regulations of Coating
Company shall be inconsistent
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with this Agreement, such inconsistent provision of the Articles and the
Regulations shall be suspended during the term of this Agreement and the
provisions of this Agreement shall be controlling. To the extent not
inconsistent with the provisions of this Agreement, the Articles and Regulations
of the Coating Company, as amended from time to time, shall regulate aspects of
the internal affairs of the Coating Company and the relations of the
Shareholders and Directors of the Coating Company among themselves.
ARTICLE THREE
Corporate Governance
Section 3.01. Shareholders' Authority. The Shareholders and
the Coating Company agree that there shall be one (1) regular meeting of the
Shareholders of the Coating Company to be held within three (3) months of the
end of the Coating Company's fiscal year. The parties to this Agreement agree to
hold other Shareholders meetings only when requested in writing by one of the
Common Shareholders or only when required by the Ohio Revised Code.
Section 3.02. Directors' Authority. The parties agree that
there shall be two (2) regular meetings of the board of directors ("Board") of
the Coating Company held semi-annually. Other meetings shall be held only upon
the written request of four or more directors ("Directors") of the Coating
Company. All actions of the Board shall require the affirmative vote of five (5)
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members in order for the action to be effective. The Directors of the Coating
Company shall exercise the authority of Coating Company as provided in the Ohio
Revised Code, subject to the terms and conditions of this Agreement, including,
but not limited to, the requirement that all actions require five (5)
affirmative votes of the members of the Board.
If any action proposed by any member of the Board concerning
the operations of the Coating Company, other than the Major Corporate Decisions
described in Section 3.05(C) hereof, does not receive five (5) affirmative
votes, any four (4) directors may request arbitration of this action as provided
in Section 11.16 hereof.
Section 3.03. Election and Number of Directors. The Board of
the Coating Company shall be comprised of eight (8) Directors. No action shall
be taken by the Board of the Coating Company except at a meeting of the
Directors at which a quorum of the Directors are present, or, alternatively,
pursuant to a unanimous action in writing as provided in the Ohio Revised Code.
Xxxx Xxxx America shall have the right to elect four (4) Directors of the
Coating Company and Wheeling-Pittsburgh shall have the right to elect four (4)
Directors of the Coating Company. Any Director appointed or selected by a
Shareholder(s) may be removed by that Shareholder at any time with or without
cause. Any vacancy on the Board shall be filled within thirty (30) days after it
occurs, by the Shareholder(s) who originally designated the Director whose seat
on the Board is vacant.
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Section 3.04. Selection of Officers and Authority of Officers.
Notwithstanding any provision of the Ohio Revised Code to the contrary, the
officers of the Coating Company and their duties, responsibilities and authority
shall be as follows:
A. The Chairman of the Board shall be elected by Xxxx
Xxxx America and shall chair the meetings of the
Board.
B. The President and Chief Executive Officer shall be
elected by Wheeling-Pittsburgh and shall have the
authority to conduct the day-to-day operations of the
business as is consistent with the normal authority
of a President of a corporation.
C. An Executive Vice President elected by Xxxx Xxxx
America to whom the Vice President of Administration
and Treasurer and Secretary will report. D. A Vice
President of Administration and Treasurer shall be
elected by Wheeling-Pittsburgh and shall have such
authority and responsibility for the administrative,
human resources, accounting and financial affairs of
the Coating Company as the President shall prescribe
through the Executive Vice President. E. A Secretary
and Assistant Secretary shall be elected by
Wheeling-Pittsburgh and Xxxx Xxxx America
respectively and shall be responsible for
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maintaining the business and corporate records of the
Coating Company and shall report to the Executive
Vice President.
Section 3.05. Director Authority and Major Corporate
Decisions.
A. Limitation on Officers. No officer shall have the
authority to exercise any Director's Authority
(hereinafter defined) including but not limited to
any activity outside the ordinary course of the
business of the Coating Company which has not been
previously approved by the Directors of the Coating
Company.
B. Action by a Majority of the Directors. Except as
provided in Section 3.05(C) hereof, the Board by the
affirmative vote of five (5) members may authorize
the taking of any Director Authority or any action of
the Coating Company not specifically prohibited by
subparagraph (C) of Section 3.05 hereof. Director
Authority shall mean all authority of the Board as
provided in the Ohio Revised Code except for the
actions described in subparagraph (C) of Section 3.05
hereof.
C. Major Corporate Decisions. (a) All major corporate
decisions (as hereinafter defined) shall require the
affirmative vote of Common Shareholders owning
sixty-six and two-thirds percent (66 2/3%) of the
voting power of the Common Shares.
(b) For the purposes of this Agreement,
"Major Corporate Decisions" shall be the following:
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i. A decision to engage in any business other
than the manufacture for sale or Toll
Processing of tin mill products for
customers, including, but not limited to,
the decision to add additional coating lines
or engage in a different line of product or
business;
ii. Selling, leasing, assigning, exchanging,
disposing or transferring all or
substantially all of the assets, with or
without goodwill, of the Coating Company;
iii. Acquiring all or substantially all of the
assets or stock of another corporation or
business entity, merging or consolidating
with another corporation or business entity,
or entering into any other business
combination with another corporation or
business entity;
iv. Dissolving or liquidating the Coating
Company;
v. Selling or issuance by the Coating Company
of any of its Shares or other securities,
including treasury Shares, or creating or
issuing new classes of Shares or other
securities;
vi. Amending the Coating Company's Articles or
Regulations, provided, however, that no
amendment to Article 4 purporting to change
the rights of Preferred Shareholders shall
be
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made without the consent of the preferred
shareholders;
vii. Assigning, transferring, settling,
compromising, cancelling or releasing any
claim of, or debt owed to, the Coating
Company in excess of Two Hundred Fifty
Thousand Dollars ($250,000) (in the
aggregate in any one calendar year) or any
customer debt in excess of five percent (5%)
of the Coating Company's gross revenues for
any one calendar year without receiving full
payment by the Coating Company;
viii. Making,executing or delivering any general
assignment for the benefit of creditors or
any bond,guaranty, indemnity bond, or
surety bond, or filing any petition for
bankruptcy or similar proceeding under any
state law or deciding not to contest any
involuntary petition in bankruptcy;
ix. Confessing a judgment;
x. Providing for or changing the compensation,
including bonuses, of any officer or
Director of the Coating Company;
xi. Authorizing any stock split, including any
reverse stock split;
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xii. Authorizing, approving or entering into any
agreement or agreements with or for the
benefit of any Shareholder, Director or
officer of the Coating Company, or any
person who is related to or affiliated,
directly or indirectly, with any
Shareholder, Director or officer of the
Coating Company;
xiii. Creating, continuing or contributing to any
pension or profit sharing plan;
xiv. Incurring or modifying the terms of any
bank, governmental or other debt;
xv. Agreeing to cease doing business or dissolve
the Coating Company;
xvi. Purchasing any Shares of the Coating Company
from any Shareholder;
xvii. Entering into any agreement that provides
for any of the matters described in
Paragraphs (i) through (xvi) above.
Section 3.06. Effect of Bankruptcy.
Notwithstanding anything to the contrary stated hereinabove,
in the event that a party files a petition of bankruptcy, Chapter 7 or 11, or
insolvency or similar process and consequently thereafter rejects its
obligations hereunder and fails to perform, then the other party shall have the
power to appoint any and all directors and officers of the corporation.
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ARTICLE FOUR
Agreements Concerning Construction, Development,
Operation and Funding of the Coating Company
Section 4.01. Funding and Contribution of Land Equipment, etc.
A. Wheeling-Pittsburgh Contributions. Depending upon the best
tax consequences, Wheeling-Pittsburgh shall either contribute or lease to the
Coating Company the land necessary to develop the Coating Company and the
processing equipment it currently owns. The land and equipment are described on
Exhibit 4.01 hereof and shall be contributed at their fair market value as
determined by an arms-length appraisal. The land and equipment described on
Exhibit 4.01 shall be part of Wheeling- Pittsburgh's capital contribution to the
Coating Company and Wheeling-Pittsburgh shall contribute the difference between
the fair market value of the land and equipment and Six Million Dollars
($6,000,000) in cash as its additional share of the capital of the Coating
Company. These contributions of assets and cash shall be Wheeling-Pittsburgh's
total equity contribution to the Coating Company and shall entitle
Wheeling-Pittsburgh to fifty percent (50%) of the 1200 Common Shares of the
Coating Company.
B. Xxxx Xxxx America's Contributions. Xxxx Xxxx America shall
contribute Six Million Dollars ($6,000,000) in cash to the Coating Company as
its share of the capital of the Coating Company and shall be entitled to fifty
percent (50%) of the 1200 Common Shares of the Coating Company.
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C. Nittetsu's Contributions. Nittetsu shall contribute Three
Million Dollars ($3,000,000) in cash to the Coating Company as its share of
capital and shall be entitled to 100% of the 300 non-voting cumulative Preferred
Shares of the Coating Company.
Section 4.02. Guaranty and Other Securitization of Loans and
Financing. The parties acknowledge and agree that the development of the
tinplating line by the Coating Company shall cost approximately Sixty-Eight
Million Dollars ($68,000,000). In addition to the capital contributions
described in Section 4.01 hereof, the parties acknowledge and agree that they
will attempt to obtain a Ten Million Dollar ($10,000,000) loan from the State of
Ohio (secured by a lien on the land and building of the Coating Company), a
Sixteen Million Five Hundred Thousand Dollar ($16,500,000) loan provided by or
through Xxxx Xxxx America, and an additional Sixteen Million Five Hundred
Thousand Dollar ($16,500,000) loan provided by or through Wheeling-Pittsburgh.
Both Xxxx Xxxx America and Wheeling-Pittsburgh shall be responsible for securing
or guaranteeing their respective loans described in the preceding sentence if
required. Additional financing in approximately the amount of Ten Million
Dollars ($10,000,000) secured, if necessary, by liens on the Coating Company's
equipment will be sought from other sources.
In addition to the capital contributions described above,
Wheeling-Pittsburgh and Xxxx Xxxx America agree to contribute any additional
funds (to cover cost overruns) and working capital (by capital contribution or
loan) that the Coating Company is unable to
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secure independently from third parties. Such additional contributions or loans
shall be made in proportion to their ownership of Common Shares.
Section 4.03. Design of Line, Provision of Expertise, Purchase
of Equipment, Etc.. Xxxx Xxxx America and Wheeling- Pittsburgh agree (i) to be
responsible for designing the tin mill line (the "Line") to be constructed by
the Coating Company and (ii) to provide whatever additional expertise is
required to design the Line, purchase the equipment and materials to develop the
Line, and install and operate the Line.
The Line shall be designed to produce tin mill products within
the ranges specified in Exhibit 4.03.
Section 4.04. Construction of the Facility. Xxxx Xxxx America
and Wheeling-Pittsburgh agree to designate a project manager for the development
of the building, the Line and the improvements necessary to develop the Line
(the "Facility) and he will have responsibility and authority to develop the
Facility. Both Xxxx Xxxx America and Wheeling-Pittsburgh agree to provide,
during the construction phase, management and technical assistance to the
Coating Company by contributing qualified personnel at no charge. Only the
actual Out-of-Pocket Expenses incurred by the personnel so contributed shall be
reimbursed by the Coating Company. All Out-of-Pocket Expenses will be subject to
audit by the Coating Company.
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ARTICLE FIVE
Restrictions on Transfer, Issuance
or Repurchase of Shares
Section 5.01. Shareholder Transfer Restrictions. In addition
to the requirements of Article NINE, no Shareholder shall, except as otherwise
expressly provided elsewhere in this Agreement, pledge, hypothecate, otherwise
encumber, give, sell, transfer or otherwise distribute (hereinafter collectively
"Transfer"), any Shares of the Coating Company unless such Transfer shall have
been previously approved by the holders of Shares entitling them to exercise not
less than sixty-six and two-thirds percent (66 2/3%) of the voting power of the
Common Shares of the Coating Company.
Section 5.02. Issuance Restriction on the Coating Company. The
Coating Company shall not issue, sell or otherwise distribute ("Issuance") any
of its Shares (whether authorized but unissued Shares or treasury Shares) to any
person, firm, corporation, partnership, trust or other entity unless (i) such
Issuance shall have been previously approved by the holders of not less than
sixty-six and two-thirds percent (66 2/3%) of the issued and outstanding Common
Shares of the Coating Company and (ii) such person shall simultaneously become
bound by the terms and conditions of this Agreement by executing an amendment to
this Agreement satisfactory to all of the Common Shareholders.
Section 5.03. Repurchase Restrictions. The Coating Company
shall not purchase, and no Shareholder shall sell to the Coating Company, any of
Coating Company's own Shares, whether pursuant to the exercise by the Coating
Company of a purchase right
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or otherwise, if immediately thereafter, its assets would be less than its
liabilities plus its stated (paid in) capital, if any, or if it is insolvent, or
if there is a reasonable ground to believe by such persons it would be rendered
insolvent. For the purposes of this Section 5.03, the term "Insolvent" means
that the Coating Company is unable to pay its obligations as they become due in
the usual course of its business.
Section 5.04. Reasonable Restriction. Each Shareholder and the
Coating Company agree and acknowledge that the restrictions on Transfer and
Issuance imposed by this Agreement are imposed to accomplish legitimate purposes
of the Coating Company, and that such restrictions are not more restrictive than
necessary to accomplish those purposes.
Section 5.05. Unauthorized Transfers are Null and Void. If any
Shareholder shall make a purported Transfer of all or any part of the Shares of
the Coating Company held by it in a transaction that contravenes this Agreement
(hereinafter called the "Breach Shares"), such purported Transfer ("Breach")
shall be void and of no effect whatsoever.
ARTICLE SIX
Share Purchase Option After a Change in Control,
Buyout Offer After an Impasse, and Preferred Share Buyback
Section 6.01. Notice of Change in Control. Promptly after a
Change in Control has occurred with respect to Wheeling-Pittsburgh,
Wheeling-Pittsburgh shall notify Xxxx Xxxx America in writing of such
occurrence. Promptly after a Change in Control has
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occurred with respect to Xxxx Xxxx America or its parent company, Xxxx Xxxx
America shall notify Wheeling-Pittsburgh in writing of such occurrence.
Section 6.02. Purchase Option After a Change in Control. For
forty-five (45) days after a party receives notice from the other party pursuant
to Section 6.01 hereof that a Change in Control of the other party has occurred,
the party receiving the notice shall have the right and option to purchase all,
but not less than all, of the Shares owned by the other party at a price equal
to the original Purchase Price of $10,000 per share plus (a) 10% interest
compounded from the date of original issuance of the Shares to be purchased, or
(b) Fair Market Value, whichever is greater. The holder of the option shall
exercise it by providing to the other party written notice, as provided in this
Agreement, of such exercise within such forty-five (45) day period.
Section 6.03. Buyout Offer After an Impasse. If an Impasse
shall be deemed to have occurred, then Xxxx Xxxx America and Wheeling-Pittsburgh
shall each have the right to negotiate a buyout of the other's Shares on terms
that are mutually acceptable to both. Both Xxxx Xxxx America and
Wheeling-Pittsburgh recognize that any buyout offer made pursuant to this
Section 6.03 must be based on a Purchase Price of $10,000 per share plus (a) 10%
interest compounded from the date of original issuance of the Common Shares to
be purchased, or (b) Fair Market Value, whichever is greater.
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Section 6.04. Buyback of Preferred Shares. If (a) Nittetsu, in
its capacity as distributor, terminates its Distribution Agreement with Coating
Company pursuant to Section 4(a) thereof, or (b) the Coating Company elects not
to renew Nittetsu's Distribution Agreement after the expiration of the original
term or any renewal term, or (c) Nittetsu elects not to renew the Distribution
Agreement after the expiration of the original term or any renewal term, then,
in any event, Coating Company shall buy back Nittetsu's Preferred Shares. The
obligation to repurchase under parts (a) and (b) of this Section becomes
effective when the event of termination or expiration becomes effective. The
obligation to repurchase under part (c) of this Section becomes effective two
(2) years after the placement of the last purchase order. The buyback price
shall be equal to the initial purchase price plus accumulated dividends payable
in accordance with Article 4 of Coating Company's Articles of Incorporation.
Once effective, the buyback shall be carried out within 90 days of the
qualifying event.
Section 6.05. Payment Term. The payment terms for the purchase
of Shares pursuant to Article Six shall be as provided in Article Eight of this
Agreement.
Section 6.06. Closing. The closing of the purchase of Shares
pursuant to Article Six shall be held in Martins Ferry, Ohio on or before sixty
(60) days after the date written notice of exercise of the option or impasse is
given.
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ARTICLE SEVEN
Purchase Price
Section 7.01. Purchase Price. The initial purchase price to be
paid for each Common Share of the Coating Company pursuant to this Agreement
shall be Ten Thousand Dollars ($10,000.00) per Share. The initial purchase price
to be paid for each Preferred Share shall be Ten Thousand Dollars ($10,000) per
Preferred Share.
Section 7.02. Books and Records. The Coating Company shall
maintain its books and records of account in accordance with generally accepted
accounting principles, consistently applied, subject to the continuation of any
such accounting practices as are approved by all (100%) of the Common
Shareholders.
ARTICLE EIGHT
Payment for Shares
Section 8.01. Payment Terms. The initial share purchases shall
be made in accordance with Schedule A attached hereto. Unless otherwise agreed
by the purchaser and the seller, payment for all Shares subsequently purchased
pursuant to this Agreement shall be made in full at the closing in either cash
or other immediately available funds.
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ARTICLE NINE
Securities Law Restrictions and Provisions
Section 9.01. Restrictive Legend. Except as provided in
Section 9.02 of this Agreement, each certificate representing (a) the Shares and
(b) any other securities issued in respect of the Shares upon any stock split,
stock dividend, merger, recapitalization, consolidation or similar event shall
bear a legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR
UNDER THE SECURITIES LAW OF ANY STATE AND MAY NOT BE SOLD,
ASSIGNED, CONVEYED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED EXCEPT: (1) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT REGISTERING THE SHARES UNDER APPLICABLE SECURITIES
LAWS; OR (2) PURSUANT TO AN OPINION OF COUNSEL, WHICH HAS BEEN
OBTAINED BY THE HOLDER AND WHICH IS IN ALL RESPECTS
SATISFACTORY TO THE COATING COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED FROM SUCH HOLDER TO LAWFULLY EFFECT SUCH SALE,
ASSIGNMENT, CONVEYANCE, PLEDGE, HYPOTHECATION OR OTHER
TRANSFER.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS, PROVISIONS AND RESTRICTIONS (INCLUDING RESTRICTIONS ON
TRANSFER) CONTAINED IN THE AMENDED AND RESTATED CLOSE
CORPORATION AND SHAREHOLDER'S AGREEMENT DATED AS OF MARCH 24,
1994 AS THE SAME MAY BE AMENDED FROM TIME TO TIME WHICH WAS
DULY ASSENTED TO BY ALL THE SHAREHOLDERS OF THE CORPORATION AS
PROVIDED IN SECTION 1701.591 OF THE OHIO REVISED CODE.
THE CORPORATION WILL MAIL TO THE HOLDER OF THE SHARES
REPRESENTED BY THIS CERTIFICATE A COPY OF THE CLOSE
CORPORATION AND SHAREHOLDER'S AGREEMENT AND OF THE EXPRESS
TERMS OF THE SHARES REPRESENTED BY THE CERTIFICATE AND OF THE
OTHER CLASS OR CLASSES AND OF SERIES SHARES, IF ANY, WHICH THE
COATING COMPANY IS AUTHORIZED TO ISSUE, WITHIN FIVE (5) DAYS
AFTER RECEIPT OF WRITTEN REQUEST THEREFOR.
THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS
AGREEMENT HAS NO BEEN QUALIFIED WITH THE
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COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND
THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF
ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH
QUALIFICATION IS LAWFUL, UNLESS THE SALE OF SECURITIES IS
EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105
OF THE CALIFORNIA SECURITIES ACT. THE RIGHTS OF ALL PARTIES TO
THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH
QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE
NOT BEEN REGISTERED UNDER THE DELAWARE SECURITIES ACT AND MAY
NOT BE SUBSEQUENTLY TRANSFERRED OR SOLD UNLESS SUCH TRANSFER
OR SALE IS PROPERLY REGISTERED OR EXEMPTED UNDER THE DELAWARE
SECURITIES ACT.
Each Shareholder consents to the Coating Company making a notation on its
records and giving instructions to any transfer agent of the Shares in order to
implement the restrictions on transfer established in this Agreement.
Section 9.02. Exception to Legend Requirement. A certificate
representing Shares shall not be required to bear the portion of the restrictive
legend relating to the securities law as set forth in Section 9.01 if, in the
opinion of counsel for the Coating Company, such legend is not required in order
to establish compliance with the Securities Act of 1933, as amended (the
"Securities Act") and applicable state securities law.
Section 9.03. Notice of Proposed Transfer. Unless there is in
effect a registration statement under the Securities Act or under the applicable
state securities law, prior to making any transfer of Shares bearing the legend
specified in 9.01, the Shareholder shall at its expense provide the Coating
Company: (i) an unqualified written opinion of legal counsel (which shall be,
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reasonably satisfactory to the Coating Company) addressed to the Coating Company
and to the effect that such Transfer may be effected without registration under
the Securities Act and under applicable state securities laws; and (ii) such
other information as the Coating Company may reasonably request regarding the
proposed Transfer.
ARTICLE TEN
Voting of Shares Subject to Purchase Rights
Section 10.01. Voting of Shares Subject to Purchase Rights.
Any Shareholder or its legal representative whose Shares are being purchased
pursuant to the exercise of one or more of the purchase rights provided for in
this Agreement shall promptly cause each Share certificate evidencing any such
Shares to be appropriately endorsed and delivered to the purchaser thereof.
During the period commencing on the exercise of one or more of such purchase
rights and ending upon the delivery of the Share certificate or certificates
and/or upon delivery of the documents required by the regulations for a lost or
destroyed certificate, each of such Shares evidenced by a certificate which
shall not have been so endorsed and delivered shall be voted by the purchaser
thereof as if he had received the certificates. In connection with such
determination any resulting fractional Share votes shall be counted and given
effect rather than rounded.
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ARTICLE ELEVEN
Miscellaneous
Section 11.01. Financial Information. Upon the request of any
Shareholder, the Coating Company will deliver the following reports to such
Shareholder, provided, however, that no Shareholder shall be provided with any
confidential or proprietary commercial information such as customer lists or
marketing plans:
(a) As soon as practicable after the end of each fiscal year
but, in any event, within 90 days thereafter, consolidated balance sheets of the
Coating Company and its subsidiaries, if any, as of the end of such fiscal year,
and consolidated statements of income, consolidated statements of shareholders'
equity and consolidated statements of cash flow of the Coating Company and its
subsidiaries, if any, for such year, prepared in accordance with the accrual
method of accounting and setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail. These statements
shall be audited by independent, certified public accountants.
(b) As soon as practicable after the end of the first, second
and third quarterly accounting periods in each fiscal year of the Coating
Company but, in any event, within forty-five (45) days thereafter, consolidated
statements of income and consolidated statements of cash flows, of the Coating
Company and its subsidiaries, if any, for such period and for the current fiscal
year to date, prepared in accordance with the accrual method of accounting and
setting forth in each case in comparative form the
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figures for the corresponding period during the previous fiscal year, all in
reasonable detail.
(c) Within thirty (30) days prior to the beginning of each
fiscal year, an annual plan approved by the Directors of the Coating Company as
provided in Section 3.02 hereof, setting forth full and complete forecasted
consolidated balance sheets, consolidated statements of income, and consolidated
statements of cash flow for such fiscal year and for each quarter within that
year and summarizing the marketing, production, research and development,
organization and staffing, and financial strategies which support the annual
plan's forecasted figures.
Section 11.02. Additional Information. Upon the request of any
Shareholder, the Coating Company will deliver or provide to such Shareholder:
(a) With reasonable promptness, such other information and
data with respect to the Coating Company and its subsidiaries, if any, as any
such Shareholder may from time to time reasonably request, provided, however,
that no Shareholder shall be provided with any confidential or proprietary
commercial information such as customer lists or marketing plans.
(b) The right, at its expense, no more often than one time per
calendar quarter, to visit and inspect any of the property of the Coating
Company, to examine and copy its books of account and records, and to discuss
its affairs, finances and accounts with the Coating Company officers, all at
such reasonable times with reasonable notice.
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Section 11.03. Notices. Any notices, demands or other
communications (collectively, "Notices") required or permitted to be given by
any party to another under this Agreement shall be in writing, either delivered
by hand to the other party at that party's address set forth below, or sent by
postage prepaid certified mail, return receipt requested, or sent via facsimile
transmission, or by courier to the other party at that party's address set forth
below. A Notice delivered by hand shall be deemed to have been given when it is
received by the party to whom it is being given. A Notice sent by certified mail
or courier shall be deemed to have been given upon the signing of the notice of
receipt or refusal after such Notice has been mailed/sent to the Notice address
of the recipient. The facsimile copy shall be deemed received when acknowledged
by the receiver. The Notice addresses of the parties are as follows:
If to the Coating Company:
Ohio Coatings Company
P. O. Xxx 000
Xxxxxxx Xxxxx, Xxxx 00000
If to Xxxx Xxxx America:
Xxxx Xxxx Tinplate America Corp.
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
If to Wheeling-Pittsburgh:
Attn: President
Wheeling-Pittsburgh Corporation
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
with a copy to:
Attn: Xxxxx X. Xxxxxxx
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Wheeling-Pittsburgh Steel Corporation
0000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxx Xxxxxxxx 00000
If to Nittetsu:
Nittetsu Shoji America, Inc.
Citicorp Plaza, Suite 1860
000 X. Xxxxxxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Any change in the Notice address of a party for the purpose of Notice under this
Section 11.03 may be effected only by Notice given to all of the other parties.
Section 11.04. Successors, Assigns, etc. The terms and
provisions hereof shall bind and inure to the benefit of the parties and their
respective heirs, successors and permitted assigns (including successive, as
well as immediate, successors and assigns).
Section 11.05. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Ohio.
Section 11.06. Waiver. The failure of any party hereto to
enforce at any time any of the provisions of this Agreement shall in no way be
construed to be a waiver of any such provision, nor in any way affect the
validity of this Agreement or any part hereof or the right of such party
thereafter to enforce each and every such provision. No waiver of any breach of
or non-compliance with this Agreement shall be held to be a waiver of any other
or subsequent breach or non-compliance.
Section 11.07. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed
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to be an original, but all of which together shall constitute one and the same
agreement.
Section 11.08. Tolling of Time. The running of any period of
time during which, under this Agreement, any right may be exercised or any
obligation must be performed shall be tolled for as long as the order of any
court shall prohibit the exercise of any such right or the performance of any
such obligation.
Section 11.09. Amendment or Termination of this Agreement;
Action by Shareholders. Without the written consent of Shareholders owning at
least eighty percent (80%) of the Shares then outstanding, (i) this Agreement
may not be amended or terminated, provided, however, that no section of this
Agreement describing the rights and/or obligations of Preferred Shareholders
shall be amended or terminated without the consent of such Preferred
Shareholder. Neither the Coating Company nor any shareholder shall do or cause
to be done anything that would result in the invalidation of this Agreement,
including causing the Coating Company to become a public company.
Section 11.10. Entire Agreement. This Agreement along with the
Letter of Intent dated June 21, 1994, which refers to the Raw Materials Supply
Agreement, Equipment Supply Agreement, the loan agreements provided for in
Section 4.02 and Distribution Agreement(s) are the entire and exclusive
statement of the parties' agreement and they supersede all prior agreements,
understandings, negotiations and discussions among the parties, whether oral or
written, including, without limitation, prior letters of intent.
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Section 11.11. Provisions Severable. If any provision of this
Agreement or the application of any such provision to any person or any
circumstance shall be determined to be invalid or unenforceable, then such
determination shall not affect any other provisions of this Agreement or the
application of such provisions to any other person or circumstance, all of which
other provisions shall remain in full force and effect; and, if any provision of
this Agreement is capable of two constructions, one of which would render the
provision invalid, then such provision shall have the meaning which renders it
valid.
Section 11.12. Effect of Invalidation and Termination. If all
of the terms and conditions precedent set forth in the Letter of Intent dated
June 21, 1994 have not been satisfied or waived prior to the expiration date set
forth therein, or any extensions thereof, then this Shareholder's Agreement
shall terminate and the Coating Company shall unwind all prior transactions and
return all equity contributions to their respective contributors.
In the event of any invalidation of this Agreement pursuant to
the provisions of Section 1701.591 of the Ohio Revised Code or the termination
of this Agreement pursuant to any provision set forth herein, the entire
Agreement shall be of no further effect and all aspects of the internal affairs
of the Coating Company and the regulations of the holders of the Common Shares
and Preferred Shares among themselves shall be governed by the Articles and
Regulations of the Corporation as then in effect.
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Section 11.13. Pronouns. When used in this Agreement, each
pronoun and the term "Person" shall be deemed to mean one or more individuals,
firms, corporations (non-profit or for profit), trusts, partnerships,
unincorporated societies or associations, governmental bodies or any agency or
subdivision thereof, or any other entities, as the context or circumstances may
indicate.
Section 11.14. Captions. The captions contained in this
Agreement were included only for convenience or reference and do not define,
limit, explain or modify this Agreement or its interpretation, construction or
meaning and are in no way to be construed as a part of this Agreement.
Section 11.15. Exhibits Incorporated by Reference. All
exhibits attached hereto are incorporated by reference as if fully rewritten
herein.
Section 11.16. Mandatory Arbitration. Any dispute that may
arise regarding the rights or duties of the parties established pursuant to the
provisions of this Agreement, except pursuant to the provisions of Section
3.05(C)(b)(1), or regarding the enforcement of such provisions, shall be subject
to the provisions of this Section 11.16. In the event that any such dispute
shall arise, the parties shall in good faith attempt to amicably resolve said
dispute. In the event that a resolution cannot be reached within fifteen (15)
days, any party to the dispute may submit such dispute to arbitration in
Pittsburgh, Pennsylvania or in another mutually acceptable location in
accordance with the rules of the American Arbitration Association then
prevailing; provided,
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however, such dispute shall be arbitrated and a decision rendered within a sixty
(60) day period. The arbitrator may issue any order or provide any remedy
existing in law or equity and his or her decision shall be final and binding.
Each party to the arbitration shall be responsible for its pro rata share of the
arbitration costs, including the fee of the arbitrator.
Section 11.17. Approval of Agreement. The effectiveness of
this agreement is subject to the approval of the respective Boards of Directors
of each of Xxxx Xxxx, Wheeling-Pittsburgh, Nittetsu Shoji and the Coating
Company on or before September 21, 1994.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by its duly authorized officer to be effective as of
the date first above written.
WITNESSETH: XXXX XXXX TINPLATE AMERICA CORP.
______________________ By:________________________________
Its:
Date: February 21, 1995
WHEELING-PITTSBURGH CORPORATION
______________________ By:________________________________
Xxxxx X. Xxxxxxx
Its: President
Date: February 21, 1995
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NITTETSU SHOJI AMERICA, INC.
______________________ By:________________________________
Its:
Date: February 21, 1995
OHIO COATINGS COMPANY
______________________ By:________________________________
Its: President & CEO
Date: February 21, 0000
XXXXX XX XXXX XXXXXXXX,
XXXXXX XX XXXX:
I, Xxxxx X. Xxxxxx, Notary of said County and State, do
certify that _________________________, who signed the writing hereto annexed
bearing date the _______ day of ________________, 1995, for XXXX XXXX TINPLATE
AMERICA CORP., has this day acknowledged the said writing to be the act and deed
of said corporation.
Given under my hand and official seal this _______ day of
________________, 1995.
__________________________________
Notary Public
My Commission Expires:
October 28, 0000
XXXXX XX XXXX XXXXXXXX,
XXXXXX XX XXXX:
I, Xxxxx X. Xxxxxx, Notary of said County and State, do
certify that Xxxxx X. Xxxxxxx, who signed the writing hereto
annexed bearing date the _______ day of ________________, 1995, for
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WHEELING-PITTSBURGH CORPORATION has this day acknowledged the said writing to be
the act and deed of said corporation.
Given under my hand and official seal this _______ day of
________________, 1995.
____________________________________
Notary Public
My Commission Expires:
October 28, 0000
XXXXX XX XXXX XXXXXXXX,
XXXXXX XX XXXX:
I, Xxxxx X. Xxxxxx, Notary of said County and State, do
certify that , who signed the writing hereto annexed bearing date the _______
day of ________________, 1995, for NITTETSU SHOJI AMERICA, INC., has this day
acknowledged the said writing to be the act and deed of said corporation.
Given under my hand and official seal this _______ day of
________________, 1995.
___________________________________
Notary Public
My Commission Expires:
October 28, 0000
XXXXX XX XXXX XXXXXXXX,
XXXXXX XX XXXX:
I, Xxxxx X. Xxxxxx, Notary of said County and State, do
certify that ____________________________, who signed the writing hereto annexed
bearing date the _______ day of ________________, 1995, for OHIO COATINGS
COMPANY, has this day acknowledged the said writing to be the act and deed of
said corporation.
Given under my hand and official seal this _______ day of
________________, 1995.
___________________________________
Notary Public
My Commission Expires:
October 28, 1997
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INDEX
Page
----
ARTICLE ONE Definitions.......................................... 2
Section 1.01 Defined Terms........................................ 2
Section 1.02 Articles............................................. 2
Section 1.03 Change in Control.................................... 2
Section 1.04 Code of Regulations.................................. 3
Section 1.05 Impasse.............................................. 3
Section 1.06 Fair Market Value.................................... 4
Section 1.07 Shareholder.......................................... 4
Section 1.08 Share................................................ 4
Section 1.09 Common Share......................................... 4
Section 1.10 Preferred Share...................................... 4
Section 1.11 Substrate............................................ 4
Section 1.12 Toll Processing...................................... 4
Section 1.13 Raw Materials Supply Agreement....................... 5
Section 1.14 Start-Up Date........................................ 5
Section 1.15 Wheeling-Pittsburgh.................................. 5
Section 1.16 Out-of-Pocket Expenses............................... 5
ARTICLE TWO Close Corporation Agreement.......................... 5
Section 2.01 Close Corporation Agreement.......................... 5
ARTICLE THREE Corporate Governance................................. 6
Section 3.01 Shareholders' Authority.............................. 6
Section 3.02 Directors' Authority................................. 6
Section 3.03 Election and Number of
Directors............................................ 7
Section 3.04 Selection of Officers and
Authority of Officers................................ 8
Section 3.05 Director Authority and Major
Corporate Decisions.................................. 9
Section 3.06 Effect of Bankruptcy.................................12
ARTICLE FOUR Agreements Concerning Construction,
Development, Operation and Funding
of the Coating Company...............................13
Section 4.01 Funding and Contribution of
Land Equipment, etc.................................13
Section 4.02 Guaranty and Other Securi-
tization of Loans and
Financing...........................................14
Section 4.03 Design of Line, Provision of
Expertise, Purchase of
Equipment, Etc......................................15
Section 4.04 Construction of the Facility.........................15
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Page
----
ARTICLE FIVE Restrictions on Transfer, Issuance
or Repurchase of Shares..............................16
Section 5.01 Shareholder Transfer
Restrictions........................................16
Section 5.02 Issuance Restriction on the
Coating Company.....................................17
Section 5.03 Repurchase Restrictions..............................17
Section 5.04 Reasonable Restriction...............................18
Section 5.05 Unauthorized Transfers are Null
and Void............................................18
ARTICLE SIX Share Purchase Option After a Change
in Control and Buyout Offer After an
Impasse..............................................18
Section 6.01 Notice of Change in Control..........................18
Section 6.02 Purchase Option After a
Change in Control...................................18
Section 6.03 Buyout Offer After an
Impasse.............................................19
Section 6.04 Buyback of Preferred Shares..........................19
Section 6.05 Payment Term.........................................20
Section 6.06 Closing..............................................20
ARTICLE SEVEN Purchase Price.......................................20
Section 7.01 Purchase Price.......................................20
Section 7.02 Books and Records....................................20
ARTICLE EIGHT Payment for Shares...................................21
Section 8.01 Payment Terms........................................21
ARTICLE NINE Securities Law Restrictions and
Provisions..........................................21
Section 9.01 Restrictive Legend...................................21
Section 9.02 Exception to Legend Requirement......................23
Section 9.03 Notice of Proposed Transfer..........................23
ARTICLE TEN Voting of Shares Subject to Purchase
Rights...............................................23
Section 10.01 Voting of Shares Subject to
Purchase Rights.....................................23
ARTICLE ELEVEN Miscellaneous........................................24
Section 11.01 Financial Information................................24
Section 11.02 Additional Information...............................25
Section 11.03 Notices..............................................26
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Section 11.04 Successors, Assigns, etc.............................28
Section 11.05 Governing Law........................................28
Section 11.06 Waiver...............................................28
Section 11.07 Counterparts.........................................28
Section 11.08 Tolling of Time......................................28
Section 11.09 Amendment or Termination of
this Agreement; Action by
Shareholders.........................................29
Section 11.10 Entire Agreement.....................................29
Section 11.11 Provisions Severable.................................29
Section 11.12 Effect of Invalidation and
Termination.........................................30
Section 11.13 Pronouns.............................................30
Section 11.14 Captions.............................................30
Section 11.15 Exhibits Incorporated by
Reference...........................................31
Section 11.16 Mandatory Arbitration................................31
Section 11.17 Approval of Agreement................................31
EXHIBITS
4.01 Description of Non-Cash Contributions
4.03 Description of Product Ranges
SCHEDULES
A. Initial Equity Contributions
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00
XXXXX XXXXXXXXXXX
AND SHAREHOLDERS' AGREEMENT
between
Xxxx Xxxx Tinplate America Corp.
and
Nittetsu Shoji America, Inc.
and
Wheeling-Pittsburgh Corporation
and
Ohio Coatings Company
38
DESCRIPTION OF NON-CASH CONTRIBUTIONS
Exhibit 4.01
to the
CLOSE CORPORATION
AND SHAREHOLDERS' AGREEMENT
between
Xxxx Xxxx Tinplate America Corp.
and
Nittetsu Shoji America, Inc.
and
Wheeling-Pittsburgh Corporation
and
Ohio Coatings Company
39
DESCRIPTION OF PRODUCT RANGES
Exhibit 4.03
to the
CLOSE CORPORATION
AND SHAREHOLDERS' AGREEMENT
between
Xxxx Xxxx Tinplate America Corp.
and
Nittetsu Shoji America, Inc.
and
Wheeling-Pittsburgh Corporation
and
Ohio Coatings Company
40
EQUITY CONTRIBUTION SCHEDULE
Schedule A
to the
CLOSE CORPORATION
AND SHAREHOLDERS' AGREEMENT
between
Xxxx Xxxx Tinplate America Corp.
and
Nittetsu Shoji America, Inc.
and
Wheeling-Pittsburgh Corporation
and
Ohio Coatings Company
