<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 21, 1999
REGISTRATION NO. 333-76699
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
Amendment No. 4 to
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------------
AMERICAN NATIONAL CAN GROUP, INC.
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 3411 36-4287015
(State or Other Jurisdiction of (Primary Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)
</TABLE>
ALAN H. SCHUMACHER
AMERICAN NATIONAL CAN GROUP, INC.
8770 W. BRYN MAWR AVENUE
CHICAGO, ILLINOIS 60631
TELEPHONE (773) 399-3000
(Address and telephone number of Registrant's principal executive offices)
------------------------------------
COPIES TO:
<TABLE>
<S> <C>
ROBERT C. TREUHOLD, ESQ. JOHN D. BRINITZER, ESQ.
SHEARMAN & STERLING CLEARY, GOTTLIEB, STEEN & HAMILTON
114, AVENUE DES CHAMPS-ELYSEES ONE LIBERTY PLAZA
75008 PARIS, FRANCE NEW YORK, NEW YORK 10006
</TABLE>
------------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable on or after the effective date of this Registration
Statement.
------------------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, please check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
- ---------
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
- ---------
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ]
- ---------
If delivery of the Prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
OF SECURITIES TO BE REGISTERED REGISTERED(1) PER SECURITY OFFERING PRICE(2) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock, nominal value $0.01
per share........................ 34,500,000 $24.00 $828,000,000 $230,184(3)
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</TABLE>
(1) Includes (i) shares of common stock to cover the Underwriters'
over-allotment option and (ii) shares of common stock which are to be
offered outside the United States but that may be resold from time to time
in the United States during the distribution. The shares of common stock
registered hereby are not being registered for the purpose of sales outside
of the United States.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457 under the Securities Act.
(3) Previously paid.
------------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
An itemized statement of the estimated amount of all expenses in connection
with the distribution of the Securities registered hereby is as follows:
<TABLE>
<S> <C>
Securities and Exchange Commission Registration Fee......... $ 230,184
New York Stock Exchange Listing Fee......................... 172,000
National Association of Securities Dealers, Inc. Filing
Fee....................................................... 30,500
Transfer Agent and Registration Fee......................... 5,000
Printing Expenses........................................... 250,000
Legal Fees and Expenses..................................... 1,000,000*
Accounting Fees and Expenses................................ 2,500,000*
Miscellaneous............................................... 25,000
----------
Total....................................................... $4,212,684
==========
</TABLE>
- -------------------------
* To be paid by the selling stockholder.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("DGCL") provides that
a corporation may indemnify any person who was or is a party or is threatened to
be made a party to any threatened, pending or completed action, suit or
proceeding whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation) by reason of the fact that the
person is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by the person in
connection with such action, suit or proceeding if the person acted in good
faith and in a manner the person reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe the person's conduct was
unlawful. Section 145 further provides that a corporation similarly may
indemnify any such person serving in any such capacity who was or is a party or
is threatened to be made a party to any threatened, pending or completed action
or suit by or in the right of the corporation to procure a judgement in its
favor, against expenses (including attorneys' fees) actually and reasonably
incurred in connection with the defense or settlement of such action or suit if
the person acted in good faith and in a manner the person reasonably believed to
be in or not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Delaware Court of Chancery or such other
court in which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Court of Chancery or such other court shall deem proper.
Section 102(b)(7) of the DGCL permits a corporation to include in its
certificate of incorporation a provision eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, provided that such provision
shall not eliminate or limit the liability of a director (i) for any breach of
the director's duty of loyalty to the corporation or its stockholders, (ii) for
acts or omission not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the DGCL (relating to
liability for unlawful payment of dividends and unlawful stock purchase and
redemption) or (iv) for any transaction from which the director derived an
improper personal benefit.
II-1
<PAGE> 3
The Company's Certificate of Incorporation provides that the Company's
directors shall not be liable to the Company or its stockholders for monetary
damages for breach of fiduciary duty as a director to the fullest extent
permitted by the DGCL as it existed on the date of, or is or has been amended
from time to time after, the filing of the Certificate of Incorporation. The
Certificate of Incorporation and the Company's By-Laws further provide that the
Company shall indemnify its directors and officers to the fullest extent
permitted by the DGCL.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
In connection with the formation of the Company and the reorganization of
Pechiney's packaging operations, American National Can Group, Inc. will issue
shares to Pechiney. The consideration for this issuance will be the transfer to
the Company by Pechiney of all its beverage can operations.
In the foregoing transaction, the securities will be offered and sold
pursuant to section 4(2) of the Securities Act of 1933, as amended. No
underwriting discounts or commissions will be paid in connection with such
transaction.
ITEM 16. EXHIBITS AND FINANCIAL DATA SCHEDULE.
(a) EXHIBITS
<TABLE>
<C> <S>
1 Form of Underwriting Agreement+
3.1 Certificate of Incorporation of the Registrant+
3.2 By-Laws of the Registrant+
4.1 Form of Registration Rights Agreement+
4.2 Specimen of stock certificate for the common stock of the
Company+
5.1 Amended opinion of Shearman & Sterling as to the legality of
the securities being offered+
8.1 Opinion of Shearman & Sterling with respect to certain U.S.
federal income tax matters+
8.2 Opinions of PricewaterhouseCoopers LLP+
8.3 Opinion of Kronish, Lieb, Weiner & Hellman LLP+
10.1 Aluminum Purchase/Sales Supply Agreement between American
National Can Company and Alcan Rolled Products Company
(confidential treatment of certain portions requested.
Confidential material has been separately filed with the
Securities and Exchange Commission under an application for
confidential treatment)
10.2 Aluminum Purchase Agreement between American National Can
Company and Aluminum Company of America (confidential
treatment of certain portions requested. Confidential
material has been separately filed with the Securities and
Exchange Commission under an application for confidential
treatment)
10.3 Can Supply Agreement between American National Can Company
and Coca-Cola Enterprises Inc. (confidential treatment of
certain portions requested. Confidential material has been
separately filed with the Securities and Exchange Commission
under an application for confidential treatment)
10.4 Form of Shared Services Agreement with Pechiney Plastic
Packaging, Inc.+
10.5 Form of Reciprocal Corporate Services Agreement with
Pechiney Plastic Packaging, Inc.+
10.6 Form of Master Netting and Amendment Agreement+
10.7 Form of Contribution, Assignment and Assumption Agreement+
10.8 Form of Beer Bottle Technology Agreement+
10.9 Form of ANC Technology Option Agreement+
10.10 Form of Director Nomination Agreement+
10.11 Form of Stock Purchase Agreement+
10.12 Form of Pechiney Guarantee+
10.13 Form of FEEP Contribution Agreement+
10.14 Form of Foreign Subsidiary Stock Transfer Agreements+
10.15 Form of Indemnification Agreement+
10.16 American National Can Group 1999 Long-Term Incentive Plan+
10.17 American National Can Group Annual Incentive Plan+
</TABLE>
II-2
<PAGE> 4
<TABLE>
<C> <S>
10.18 American National Can Group Directors Stock Plan+
10.19 American National Can Group Stock Compensation Conversion
Plan+
10.20 Employment Agreement dated January 1, 1996 between American
National Can Company and Jean-Pierre Rodier+
10.21 Employment Agreement dated May 28, 1999 between American
National Can Company and Edward A Lapekas+
10.22 Employment Agreement dated May 28, 1999 between American
National Can Company and Michael D. Herdman+
10.23 Employment Agreement dated May 28, 1999 between American
National Can Company and Alan H. Schumacher+
10.24 Employment Agreement dated May 28, 1999 between American
National Can Company and Dennis R. Bankowski+
10.25 Pechiney 1998 Stock Option Plan -- Summary of Plan Terms+
10.26 Term sheet regarding $1.3 billion credit facility+
10.27 Translation of Pension Agreement+
10.28 Limited License of Pechiney name+
10.29 Netting Agreement+
10.30 Sublease to Pechiney Plastic Packaging, Inc.+
10.31 Pension Benefits Agreement with Pechiney Plastic Packaging,
Inc.+
21 Subsidiaries of the Registrant+
23.1 Consent of Shearman & Sterling (included in Exhibit 5.1)+
23.2 Consent of PricewaterhouseCoopers LLP+
23.3 Consent of Coca Cola Enterprises+
23.4 Revised consent of Can Manufacturers' Institute+
23.5 Consent of Beverage Can Makers Europe+
23.6 Revised consent of Beverage Marketing Corporation+
23.7 Consent of Container Consulting+
23.8 Consent of Canadean+
23.9 Consent of Kronish, Lieb, Weiner & Hellman LLP+
23.10 Consent of PricewaterhouseCoopers LLP relating to Exhibit
8.2+
23.11 Consent of Kronish, Lieb, Weiner & Hellman LLP relating to
Exhibit 8.3+
24 Powers of Attorney (included on page II-4 of the original
filing)+
27 Financial Data Schedule+
</TABLE>
- ------------------
+ Previously filed.
ITEM 17. UNDERTAKINGS.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under "Item 14, Indemnification
of Directors and Officers" above, or otherwise, the Registrant has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as
part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the Registrant pursuant to
Rule 424(b)(1) or (4) or
II-3
<PAGE> 5
497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
(3) It will provide to the underwriter at the closing specified in the
underwriting agreement, certificates in such denominations and
registered in such names as required by the underwriter to permit
prompt delivery to each purchaser.
II-4
<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 4 to the registration statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in
Chicago, Illinois on July 21, 1999.
AMERICAN NATIONAL CAN GROUP, INC.
By: *
--------------------------------------
Jean-Pierre Rodier
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman of the Board and July 9, 1999
- --------------------------------------------- Chief Executive Officer
Jean-Pierre Rodier
/s/ EDWARD A. LAPEKAS President and Chief Operating Officer July 9, 1999
- ---------------------------------------------
Edward A. Lapekas
* Senior Vice President and July 9, 1999
- --------------------------------------------- Chief Financial Officer
Alan H. Schumacher
* Vice President, Controller and July 9, 1999
- --------------------------------------------- Chief Accounting Officer
John G. LaBahn
* Director July 9, 1999
- ---------------------------------------------
Christel Bories
* Director July 9, 1999
- ---------------------------------------------
Frank W. Considine
* Director July 9, 1999
- ---------------------------------------------
Ronald J. Gidwitz
* Director July 9, 1999
- ---------------------------------------------
George D. Kennedy
* Director July 9, 1999
- ---------------------------------------------
Homer J. Livingston, Jr.
* Director July 9, 1999
- ---------------------------------------------
Roland H. Meyer, Jr.
</TABLE>
II-5
<PAGE> 7
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
Director July 9, 1999
- ---------------------------------------------
James J. O'Connor
Director July 9, 1999
- ---------------------------------------------
Alain Pasquier
* Director July 9, 1999
- ---------------------------------------------
Jean-Dominique Senard
* Director July 9, 1999
- ---------------------------------------------
James R. Thompson
* Director July 9, 1999
- ---------------------------------------------
Jack H. Turner
</TABLE>
- ---------------
* -- Signed by Edward A. Lapekas as Attorney-in-Fact.
II-6
<PAGE> 8
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBITS PAGE NUMBER
- -------- -----------
<C> <S> <C>
1 Form of Underwriting Agreement+.............................
3.1 Certificate of Incorporation of the Registrant+.............
3.2 By-Laws of the Registrant+..................................
4.1 Form of Registration Rights Agreement+......................
4.2 Specimen of stock certificate for the common stock of the
Company+....................................................
5.1 Amended opinion of Shearman & Sterling as to the legality of
the securities being offered+...............................
8.1 Opinion of Shearman & Sterling with respect to certain U.S.
federal income tax matters+.................................
8.2 Opinions of PricewaterhouseCoopers LLP+.....................
8.3 Opinion of Kronish, Lieb, Weiner & Hellman LLP+.............
10.1 Aluminum Purchase/Sales Supply Agreement between American
National Can Company and Alcan Rolled Products Company
(confidential treatment of certain portions requested.
Confidential material has been separately filed with the
Securities and Exchange Commission under an application for
confidential treatment).....................................
10.2 Aluminum Purchase Agreement between American National Can
Company and Aluminum Company of America (confidential
treatment of certain portions requested. Confidential
material has been separately filed with the Securities and
Exchange Commission under an application for confidential
treatment)..................................................
10.3 Can Supply Agreement between American National Can Company
and Coca-Cola Enterprises Inc. (confidential treatment of
certain portions requested. Confidential material has been
separately filed with the Securities and Exchange Commission
under an application for confidential treatment)............
10.4 Form of Shared Services Agreement with Pechiney Plastic
Packaging, Inc.+............................................
10.5 Form of Reciprocal Corporate Services Agreement with
Pechiney Plastic Packaging, Inc.+...........................
10.6 Form of Master Netting and Amendment Agreement+.............
10.7 Form of Contribution, Assignment and Assumption
Agreement+..................................................
10.8 Form of Beer Bottle Technology Agreement+...................
10.9 Form of ANC Technology Option Agreement+....................
10.10 Form of Director Nomination Agreement+......................
10.11 Form of Stock Purchase Agreement+...........................
10.12 Form of Pechiney Guarantee+.................................
10.13 Form of FEEP Contribution Agreement+........................
10.14 Form of Foreign Subsidiary Stock Transfer Agreements+.......
10.15 Form of Indemnification Agreement+..........................
10.16 American National Can Group 1999 Long-Term Incentive
Plan+.......................................................
10.17 American National Can Group Annual Incentive Plan+..........
10.18 American National Can Group Directors Stock Plan+...........
10.19 American National Can Group Stock Compensation Conversion
Plan+.......................................................
10.20 Employment Agreement dated January 1, 1996 between American
National Can Company and Jean-Pierre Rodier+................
10.21 Employment Agreement dated May 28, 1999 between American
National Can Company and Edward A Lapekas+..................
10.22 Employment Agreement dated May 28, 1999 between American
National Can Company and Michael D. Herdman+................
10.23 Employment Agreement dated May 28, 1999 between American
National Can Company and Alan H. Schumacher+................
</TABLE>
<PAGE> 9
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBITS PAGE NUMBER
- -------- -----------
<C> <S> <C>
10.24 Employment Agreement dated May 28, 1999 between American
National Can Company and Dennis R. Bankowski+...............
10.25 Pechiney 1998 Stock Option Plan -- Summary of Plan Terms+...
10.26 Term sheet regarding $1.3 billion credit facility+..........
10.27 Translation of Pension Agreement+...........................
10.28 Limited License of Pechiney name+...........................
10.29 Netting Agreement+..........................................
10.30 Sublease to Pechiney Plastic Packaging, Inc.+...............
10.31 Pension Benefits Agreement with Pechiney Plastic Packaging,
Inc.+.......................................................
21 Subsidiaries of the Registrant+.............................
23.1 Consent of Shearman & Sterling (included in Exhibit 5.1)+...
23.2 Consent of PricewaterhouseCoopers LLP+......................
23.3 Consent of Coca Cola Enterprises+...........................
23.4 Revised consent of Can Manufacturers' Institute+............
23.5 Consent of Beverage Can Makers Europe+......................
23.6 Revised consent of Beverage Marketing Corporation+..........
23.7 Consent of Container Consulting+............................
23.8 Consent of Canadean+........................................
23.9 Consent of Kronish, Lieb, Weiner & Hellman LLB+.............
23.10 Consent of PricewaterhouseCoopers LLP relating to Exhibit
8.2+........................................................
23.11 Consent of Kronish, Lieb, Weiner & Hellman LLP relating to
Exhibit 8.3+................................................
24 Powers of Attorney (included on page II-4 of the original
filing)+....................................................
27 Financial Data Schedule+....................................
</TABLE>
- ------------------
+ Previously filed.
<PAGE> 1
CONFIDENTIAL
TREATMENT
REQUESTED*
Exhibit 10.1
ALUMINUM PURCHASE/SUPPLY AGREEMENT
This Agreement is made this 5th day of July, 1995 between American
National Can Company (ANC) and Alcan Rolled Products Company (ALCAN).
Whereas, ANC and ALCAN entered into a Memorandum of Agreement dated
December 21, 1992 (the "framework agreement") providing for ALCAN's supply of
aluminum can stock to ANC on a worldwide basis over a three year term expiring
at the end of 1995; and
Whereas, the parties are desirous of entering into a new long-term
Supply Agreement (the "LTSA") covering ANC's North American requirements to take
affect upon the expiration of the framework agreement; and
Whereas, the parties are desirous of establishing in the LTSA pricing
within a cost-based "band" which the parties expect will, over time, (a) provide
a reasonable return to ALCAN for metal over the business cycle, while also
eliminating extreme market volatility, and (b) when combined with market-based
fabrication conversion charges, will allow ANC to negotiate can pricing with its
customers within specified predictable parameters.
- --------
* Terms for which confidential treatment has been requested have been
omitted and are marked with an asterisk [*]. Confidential material has
been separately filed with the U.S. Securities and Exchange Commission
under an application for confidential treatment.
STRICTLY CONFIDENTIAL
<PAGE> 2
2
Now, therefore, in consideration of the mutual covenants set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
1. GENERAL PROVISIONS
1.1 DEFINITIONS: Aluminum can-stock means aluminum beverage can body-stock and
aluminum beverage can end-stock that comply with ANC's standards and
specifications applied in a consistent manner to all its aluminum can-stock
suppliers.
1.2 TERM AND TERMINATION: This LTSA will be effective with shipments beginning
January 1, 1996, will run through December 31, 2000 (five years) and will be
subject to successive three-year extensions, provided that both parties agree on
terms and conditions to be applicable during such extension periods at least
twelve (12) months prior to the termination of the initial five-year term or any
extension period, and provided further that if, during at least 3/4 of the
period of six months preceding the time limit for agreement at the end of the
initial term (i.e., between July 1, 1999 and December 31, 1999), the Midwest
delivered metal price is out of the "band" defined in Article 3.4, Sub-section
c, or, if during the initial term of this Agreement, ALCAN should request a
fabrication increase substantially beyond the initial 32ct. and 70ct.
fabrication components including adjustments for the applicable cost increases
and PPI increases which were previously incorporated as described in Section
3.4d of this Agreement, then the Agreement will automatically be extended for
one additional year beyond the initial five-year term. In addition, ANC shall
have the right to extend, at its sole option, this Agreement for a period of one
additional year following the automatic extension year, provided that they
exercise this additional option year no later than October 1 of the automatic
STRICTLY CONFIDENTIAL
<PAGE> 3
3
extension year and also that the band prices in existence in the year 2000
average at least 70ct./lb. on the metal component floor plus applicable cost and
PPI increases covered in Section 3.4c and that the fabrication component on CBS
is at least 32ct./lb. and CES is at least 72ct./lb. plus applicable cost and PPI
increases covered in Section 3.4d and, further, that all of these specific terms
and conditions have been and continue to be adhered to by ANC. Should ANC invoke
this additional unilateral extension year, it shall be limited to a maximum of
one-third (1/3) of the annual volume of the 50% share of ANC's business sourced
with ALCAN in the prior contract year. The terms and conditions of the remaining
two-thirds (2/3) of the volume would be decided upon by negotiations between the
parties. The intent of this extension is to preclude a major "run up" in the
price of aluminum can sheet at the end of the Agreement without providing ANC
and their customers with time to elect other options or alternative materials.
1.3 GLOBAL SUPPLY: The intent of this Agreement is for ALCAN to supply a minimum
of 50% of ANC's can-stock purchases in North America (United States, Canada and
Mexico). In addition, ALCAN shall have a right of first refusal for up to 50% of
the can stock requirements of ANC, its subsidiaries and affiliates in Central
and South America. Conditions of eventual supply in Central and South America
will be discussed on a case-by-case basis, and the parties shall be free to
reach an agreement on competitive terms and conditions as to such other
locations which may be different than the agreements set forth herein.
1.4 COST INITIATIVES: ALCAN and ANC will work aggressively (and cooperatively,
where appropriate) to lower system costs wherever possible without injury or
hardship to each other.
STRICTLY CONFIDENTIAL
<PAGE> 4
4
1.5 FORCE MAJEURE: The obligations of each party hereunder shall be excused in
the event that party's performance is prevented or impeded by strikes, work
stoppages and slowdowns, war, insurrection, government action (including levies,
etc.), casualty (including, without limitation, fire, flood, accident and
explosion), acts of God and any other similar or different circumstance beyond
the reasonable control of such party (any of the foregoing events being referred
to as an event of "force majeure"). The party affected by an event of force
majeure shall promptly notify the other party, identifying the event and
estimated duration.
2. QUALITY
2.1 ALCAN warrants that all can-stock delivered under the LTSA will meet or
exceed ANC standards, which standards are being reasonably applied in a
consistent manner to all of its can-stock suppliers.
2.2 ALCAN and ANC commit to work together to continually improve system quality
and service.
2.3 In the event that ALCAN is disqualified at any plant, ANC commits to work
with due diligence with ALCAN to requalify. If the parties are not successful in
achieving requalification in a reasonable time and the supply pattern cannot be
altered to other plants, ANC's volume and commitments hereunder for the period
when ALCAN was disqualified may be, at ANC's option, reduced accordingly until
ALCAN is able to requalify its material.
3. PURCHASE AND SALE OF CAN-STOCK
3.1 QUANTITIES: ANC will purchase from ALCAN, and ALCAN will supply to ANC,
annually, a minimum of 50% of ANC's North American (United States, Canada, and
Mexico) aluminum
STRICTLY CONFIDENTIAL
<PAGE> 5
5
can-stock requirements designated for processing in ANC's facilities for that
year. It is the intent of the parties to include in such requirements the needs
of all of ANC's aluminum beverage-can facilities in North America. However,
ALCAN recognizes that specific circumstances (joint ventures, acquisitions
subject to previous supply commitments, new facilities outside the continental
United States, etc.) may prevent ANC, during a period of time, from including
certain facilities in the requirements covered by the 50%. It is the intent of
the parties to include the volumes corresponding to such specific circumstances
into the requirements covered by the 50% as soon as practically possible. The
parties agree that, in the event that ANC's overall volume is reduced (for
whatever reason), the initial ten percentage points of lost volume will not
affect ALCAN's volume. Thereafter, should additional volume be lost, ANC will
reduce supplier share on whatever basis it feels is appropriate, provided that
ALCAN will not be cut more than 50% of any additional lost volume.
3.2 SCHEDULING: ANC will advise ALCAN no later than November 15 of the preceding
year of its estimated aluminum can-stock requirements for the following year, by
type, based on the 50% supply commitment. Should ANC require additional volumes
substantially above the 50% supply commitment, a request for such additional
volumes shall be transmitted to ALCAN prior to November 15 of the preceding year
(but as soon as possible), in order for ALCAN to attempt to accommodate it. The
parties agree that, as far as practically possible, they will dedicate specific
entire lines (ANC) to specific mills (ALCAN), and specific mills (ALCAN) to
specific entire lines (ANC). Each calendar month (M), ANC will provide ALCAN
with an estimate of its requirements by type of can-stock and by delivery
location for months M + 2 and M + 3.
STRICTLY CONFIDENTIAL
<PAGE> 6
6
3.3 TOLLING:
a. To lessen the amount of metal which is required to be hedged, ANC agrees that
a minimum of [*] of ALCAN's annual North American aluminum can-sheet shipments
to ANC will be provided by toll conversion of Class I and Class III process
scrap supplied by ANC. The parties agree that some portion of Class II and Class
IV scrap may be utilized to fulfill such [*] requirement. If ALCAN is not in a
position to toll Class II and Class IV directly, it shall offer to toll it in
slab form. If process recovery at ANC's facility improves, the parties will meet
to decrease the [*] figure accordingly. Scrap will be returned to ALCAN and
tolled in proportion to its generation by ANC facilities (i.e., [*] Class I, [*]
Class II, [*] Class III and Class IV).
b. Due to the nature of the pricing conditions below, the only other tolling
options available to ANC are limited to UBC and ingot, as indicated in paragraph
3.4 or 3.5 below (ingot toll would apply on the non-banded portion of ANC's
business unless mutually agreed upon). ANC must advise ALCAN, no later than
November 15 of the preceding year, of the amount of UBC and/or ingot tolling (if
any) ANC elects to undertake during the subsequent year. Once a toll option is
selected by ANC, the volume of the toll and the toll price become firm and are
part of the annual supply agreement and not subject to change during the
corresponding year.
c. Toll conversion into aluminum can-stock shall be made on a pound-for-pound
basis with all in-bound freight paid by ANC.
3.4 PRICES:
a. Prices for non toll-converted can-stock hereunder shall consist of a metal
component plus a fabrication conversion component.
STRICTLY CONFIDENTIAL
<PAGE> 7
7
b. The metal component price for that portion of the volume to be purchased
under the "band" concept described in Sub-paragraph (c) below will be derived
from the average of the daily Platt's Metals Week transaction prices (the
average official LME cash settlement price and the midwest premium) for a
six-month period. This average price shall be established twice each year during
the term of this Agreement as follows: (i) during the period January 1 to April
1 of the initial contract year (1996), the metal component price will be the
average of the transaction settlement prices for the period June 1 to November
30, 1995; (ii) during the period April 1 to September 30, the metal component
price will be the average of the daily Platt's Metals Week transaction prices
for the September 1 to February 28 of the preceding period immediately prior to
the April 1 date; and (iii) during the period October 1 to March 31, the metal
component price will be the average of the daily Platt's Metals Week transaction
prices for the March 1 to August 31 period immediately preceding the October 1
date. Once established, volume and price for the relevant six-month period shall
become firm for both parties, provided that ANC's actual releases and
corresponding receipts during the period may vary between 95% (minimum) and 100%
(maximum) of the committed "band" volume. The parties recognize that significant
volume shifts from one six-month period to another would be costly and
disruptive and, to avoid this, the parties agree that ALCAN will not be required
to provide ANC more than 55% of ANC's annual volume in either of the six-month
periods.
c. Notwithstanding Sub-paragraph (b) above, the metal component price (as
defined above) will be "banded" within the range of not less than 70ct./lb. and
not more than [*] during the initial five-year period of this contract, except
as outlined below. As the parties have discussed, this is strategic
STRICTLY CONFIDENTIAL
<PAGE> 8
8
to both parties and constitutes a critical component of this LTSA. Specifically,
it is understood that ALCAN will forego metal increases beyond the top of the
"band" throughout the contract duration, and ANC will forego metal decreases
below the bottom of the "band" throughout the contract duration. It is
specifically understood that the terms and conditions of the "band" are binding
on both parties, regardless of the approach taken by other aluminum can-stock
suppliers or can makers regarding "band" pricing. Prior to August 31, 1995,
should Alcoa (and this applies only to Alcoa) establish a metal band which is
different from the 70-[*] metal component, which ALCAN and ANC have adopted,
then the parties will meet to discuss the Alcoa band vs. the ALCAN band. It is
understood that neither ALCAN nor ANC would be obligated to adopt the Alcoa
band. Further, ANC will discuss with and obtain from its customers an agreement
of support for the terms and conditions of this band concept. The form and
substance of the agreement of support must be acceptable to both ALCAN and ANC.
On or before August 31, 1995, ANC will advise ALCAN of the percentage of
business to be purchased under the "band" concept based on the commitments that
it has received up to that date from its beverage can customers for the
five-year period of this Agreement. ANC will only purchase under the "band"
concept the volumes of metal necessary to fulfill these customer commitments.
Any and all other volumes of metal not covered by the "band" will be purchased
by ANC to fulfill its 50% purchase commitment to ALCAN either (i) from ALCAN at
the prevailing first-tier market prices and terms and pricing methodologies
existing during the term of this Agreement, subject to the provisions hereof; or
(ii) from other metal sources (such as UBC, process scrap, ingot, etc.) and then
provided to ALCAN for tolling subject to the tolling terms and conditions of
this Agreement.
STRICTLY CONFIDENTIAL
<PAGE> 9
9
For each successive year following the initial year, the upper and
lower levels of the "band" (i.e., initially [*] and 70ct./lb.) will be subject
to an inflation adjustment to cover substantial noncontrollable cost increases.
The parties agree that one-half (1/2) of the year-over-year changes in the
Producer Price Index for Intermediate Materials (PPI) will be added to both the
upper and lower limits of the "band" each year, beginning on January 1, 1997 and
continuing thereafter on January 1 of 1998, 1999 and 2000.
d. The price for the conversion component for body stock for the year 1996 will
be 32ct./lb. based on 0.0114" gauge; different gauged body stock will be priced
based on ALCAN's current published conversion price list at the date of the
execution hereof. The 32ct./lb. fabrication conversion charge will be adjusted
after 1996 based on one-half of the previous year's changes in the PPI (i.e.,
1997 adjustment will be based on one-half of the 1996 over 1995 PPI changes).
(In the event of significant increases in cost items which were not included in,
or a component of, the change in the PPI, the parties agree to make appropriate
adjustments for these items in the conversion component.) Notwithstanding the
foregoing, the conversion component shall in no event be higher than the price
charged for conversion of similar products from other first-tier aluminum
suppliers to ANC on a weighted average basis. First-tier suppliers shall mean,
for the purposes of this agreement, ALCOA, REYNOLDS and KAISER ALUMINUM (DC cast
and rolled material) and shall only apply while they are pricing under a
multi-year band pricing concept containing metal plus fabrication pricing.
The price for the conversion component for end stock for the year 1996
will be our current 70ct./lb. based on 0.0110 gauge, clear soft drink beverage;
different gauged end stock or beer end
STRICTLY CONFIDENTIAL
<PAGE> 10
10
stock will be priced based on ALCAN's current published conversion price list at
the date of the execution hereof. However, both parties agreed that fabrication
conversion charges for 1996 are anticipated to increase to 72ct. per pound based
on coating cost increases to be made effective January 1, 1996 or on January 1,
1996, should coating costs increase prior to that date. Should such coating
increases occur, the conversion component will reflect them on their effective
date. Adjustments to this price after 1996 will be handled in the same manner as
adjustments to body stock described above. Notwithstanding the foregoing, the
conversion component shall in no event be higher than the price charged for
conversion of similar products from other first-tier aluminum suppliers to ANC
on a weighted average basis. First-tier suppliers shall mean, for the purposes
of this agreement, ALCOA, REYNOLDS and KAISER ALUMINUM (DC cast and rolled
material) and shall only apply while they are pricing under a long-term band
price of metal plus fabrication.
e. Tolling prices into can body-stock (gauge 0.0114") (and in the case of Class
II below can end stock toll at 0.0110" gauge clear soft drink) for the year 1996
are as follows:
Toll and Metal Component
<TABLE>
<S> <C> <C> <C>
Metal Component: [*] [*] [*]
Class I Scrap [*] [*] [*]
Class III Scrap [*] [*] [*]
UBC [*] [*] [*]
Class 11 Scrap [*] [*] [*]
CBS Sheet Ingot [*] [*] [*]
</TABLE>
STRICTLY CONFIDENTIAL
<PAGE> 11
11
Metal component shall be calculated based on the average of the daily
Platt's Metals Week transaction prices for the month of product shipment.
Tolling prices into can end stock (gauge 0.0110" clear soft drink
beverage) for the year 1996 are as follows:
P1020* [*]**
CES Sheet Ingot [*]**
* P1020, for the purpose of this Agreement, shall be defined as good western
production in T or sow form (1,500 pounds).
** Tolling prices into can end stock for 1996 are anticipated to increase to
72ct./lb. and 64ct./lb. respectively based on coating cost increases to be made
effective January 1, 1996.
Metal units for tolling are to be delivered to Midwest locations agreed
upon by ALCAN and ANC, freight prepaid by ANC. Exact tolling prices will be
based on the specification ordered with differentials based on ALCAN's published
fabrication conversion price list. In the event that ANC desires to toll end
stock with ALCAN from sheet ingot and ALCAN is short of sheet ingot in its
system and desires to toll the sheet ingot, then ANC and ALCAN will meet to
agree upon the appropriate market spread to be charged by ALCAN.
The toll conversion prices listed above will be adjusted after 1996
based on one-half of the previous year's changes in the PPI for intermediate
materials (i.e., 1997 adjustment will be based on one-half of the 1996 over 1995
PPI changes). In the event of significant increases in cost items which were not
included in, or a component of, the change in the PPI, the parties agree to make
appropriate adjustments for these items in the toll conversion component.
Notwithstanding the foregoing,
STRICTLY CONFIDENTIAL
<PAGE> 12
12
the toll conversion price shall in no event be higher than the price charged for
toll conversion of similar products from other first-tier aluminum suppliers to
ANC on a weighted average basis. First-tier suppliers shall mean, for the
purposes of this agreement, ALCOA, REYNOLDS and KAISER ALUMINUM (DC cast and
rolled material) and shall only apply while they are pricing under a long-term
band price of metal plus fabrication.
f. ALCAN agrees to provide ANC with conversion and tolling prices equal to or
less than any such prices provided by ALCAN to any other can stock customer for
delivery in North America. ALCAN will certify to ANC at the beginning of each
year, by letter from ALCAN Rolled Products' Chief Financial Officer, that this
provision has been met during the preceding year. This certification will be
applicable to the conversion/tolling component only and will exclude any
investment-oriented discounts. Should ALCAN's total can sheet sales to its North
American can stock customers be greater than 90% under "band" pricing, and
should ALCAN quote any incremental business opportunities at a price which is
lower than ANC is paying hereunder, then ALCAN agrees to offer such lower prices
to ANC. Incremental business opportunities shall mean any sales to North
American can sheet users for North American consumption other than "annual"
volume contracts.
g. PAYMENT TERMS: ANC's payment terms are net 30 days with payment as follows:
Invoices shall be grouped from the 10th of the month to the 9th of the following
month and paid by wire transfer on the first working day of the month next
following.
3.5 UBC ACQUISITION: ANC will provide ALCAN with UBCs equal to [*] of its can
body sheet (CBS) purchases from ALCAN each year (i.e., CBS sales of 400 MM lbs.
= [*] of UBC). The parties agree that the price will be the market price;
however, the price on UBCs equal to [*] of the
STRICTLY CONFIDENTIAL
<PAGE> 13
13
CBS will be capped at [*] delivered during the term of the contract (i.e., CBS
sales of 400 MM lbs. @ [*] of UBCs price capped). The remaining UBCs shall be
purchased at market price; however, ALCAN shall have the right, at its sole
option, to refuse to buy UBCs above the cap price. It is agreed that ANC shall
not be obligated, in any month, to provide ALCAN with UBCs, at a capped price of
[*] delivered, any more than 1/12th of ANC's annual obligation stated above.
Should ANC wish to toll UBC volume, subject to the conditions listed in
paragraph 3.3b., the toll pounds would first displace the ANC capped UBCs.
UBC volumes, if a toll option has been selected, must be reasonably
level on a monthly basis throughout the period. If the UBC toll option is
selected, both the toll volume and toll price shall become firm for the
following year.
Each year, the parties will review the situation of the spread between
UBC and ingot. If the evolution of the spread during a calendar year has changed
substantially enough to create an economic problem to one of the parties, the
parties will meet to find a way to reduce the magnitude of the problem,
including but not limited to reducing the quantity of UBCs to be processed by
ALCAN under this Article 3.5. If this is not practical, the parties will meet to
decide how to reasonably share in the temporary burden created by the spread
situation. If sharing is required, it is the intent of the parties that they
share on a 50-50 basis.
BENCHMARK
<TABLE>
<S> <C> <C> <C> <C>
METAL [*] [*] [*] [*]
SPREAD REQUIRED* [*] [*] [*] [*]
</TABLE>
* Delivered price would include freight and administration fee.
STRICTLY CONFIDENTIAL
<PAGE> 14
14
4. SUCCESSION CLAUSE All of the covenants, obligations, terms, provisions and
conditions of this Agreement shall apply to, bind, and inure to the benefit of
any successor, assign, or ultimate transferee through the transfer (by sale,
merger, consolidation, conveyance or otherwise) of all or substantially all of
the assets of ANC for which aluminum can stock is used in production ("the
Assets") or the transfer of securities of ANC, and ANC shall transfer this
Agreement and all of the covenants, obligations, terms, provisions and
conditions of this Agreement as a part of any agreement providing for any
transfer of all or substantially all of the Assets or securities of ANC. In
connection therewith, ANC shall obtain the written assumption by the ultimate
transferee of all of the obligations of ANC under this Agreement, provided that
ANC shall not be relieved from those obligations should such transferee not
perform.
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Ohio, USA without giving effect to the
principles of conflict of laws thereof.
5. CONFIDENTIALITY Except to the extent that disclosures to other persons of
confidential information relating to this Agreement may be required by law or
such confidential information becomes public, ANC and ALCAN agree to keep
strictly secret and confidential and not to disclose to any person, any or all
pricing and cost information or other confidential or proprietary information
provided pursuant to this Agreement.
6. NOTICES All legal notices and other legal communications provided for
hereunder shall be in writing and given by registered or certified mail, or
responsible overnight courier, addressed as provided below, with acknowledgment
of receipt requested, or by telex, telegram, cable or facsimile, sent or
delivered to the addressee below, or, as to each party, at such addresses as
shall be designated
STRICTLY CONFIDENTIAL
<PAGE> 15
15
by such party hereafter in a written notice to the other. All such legal notices
and legal communications shall be effective when hand delivered or, in the case
of notice by facsimile, on the day of receipt if received prior to 5:00 p.m. EST
on a working day or on the next working day if received after 5:00 p.m. EST on a
working day, provided that the sender's copy includes the appropriate
acknowledgment of receipt by the receiver's facsimile machine.
If to ALCAN: IF to ANC:
Alcan Rolled Products Company American National Can Company
100 Erieview Plaza 8770 West Bryn Mawr
Cleveland, OH 44114 Chicago, Illinois 60631
Attn: Vice President and Attn: Corporate Secretary
General Manager - Sheet Products
7. AUDITS ANC shall be entitled to make physical inventory audits of its metal
units in ALCAN's possession for toll conversion at any time, upon reasonable
notice, during ALCAN's normal business hours. ALCAN manages its scrap/metal
units on a fully integrated, system-wide (multi-plant) basis. As a result, this
inventory is in no way segregated, once it enters the system. Therefore, the
metal units delivered by ANC must be viewed as fungible, from an
access-at-a-later-date perspective. Due to the multi-location ALCAN system and
fungible inventory, ALCAN could provide access to ANC at a location other than
where the physical metal was originally delivered.
In addition, ANC may perform reasonable quality audits of ALCAN's
systems, procedures, and processes to assure than can stock produced hereunder
meets the specifications and other requirements contained in this Agreement.
The foregoing Memorandum of Agreement has been accepted and agreed to
by the parties as of this 5th day of July, 1995.
STRICTLY CONFIDENTIAL
<PAGE> 16
16
ALCAN ALUMINUM LIMITED AMERICAN NATION CAN COMPANY
By: /s/ Jacques Bougie By: /s/ Jean-Pierre Rodier
---------------------------- ---------------------------------
Jacques Bougie Jean-Pierre Rodier
President and CEO Chairman and CEO
Alcan Aluminum Limited American National Can Company
ALCAN ROLLED PRODUCTS COMPANY
By: /s/ Robert L. Ball By: /s/ Gerard Hauser
---------------------------- ---------------------------------
Robert L. Ball Gerard Hauser
Executive VP, Alcan Aluminum Ltd. COO, Beverage Sector
President, Alcan Aluminum American National Can Company
Corporation
President, Alcan Rolled Products
By: /s/ Brian W. Sturgell By: /s/ Richard M. Deneau
---------------------------- ---------------------------------
Brian W. Sturgell Richard M. Deneau
Vice President and General Manager Senior Vice President
Alcan Rolled Products Beverage Cans Americas
American National Can Company
STRICTLY CONFIDENTIAL
<PAGE> 17
(AMERICAN NATIONAL CAN LETTERHEAD)
BERT F. LARSSON
Vice President, Purchasing
Beverage Cans Americas
January 29, 1996
Mr. Brian Sturgell
ALCAN ROLLED PRODUCTS COMPANY
6060 Parkland Blvd.
Mayfield Heights, OH 44124-4185
Dear Brian:
Subject: 1998 - 2000 BAND VOLUME OFFER
Now that we have finalized our sales commitments under the band concept, we need
to insure that the offered can sheet volume flexibility for the years 1998
through 2000 remains in place.
Please confirm by signing below that Alcan has an ongoing offer to supply to
ANC, additional can sheet under the band program based on the following
commitment timeframes: If up to
1) 200 - 250mm pounds required per year, ANC must declare by April 1, 1997,
and
2) 150 - 200mm pounds declare by July 1, 1997, and
3) 100 - 150mm pounds declare by October 1, 1997.
This additional volume is understood by both parties to be above and beyond the
percentage of band volume currently contracted for the 5 year period beginning
January 1, 1996 and the band requirements and provisions would be the same.
Very truly yours,
Bert F. Larsson
cc: Mr. E. Daugherty - Alcan Rolled Products Company
Mr. R. Nunn - American National Can
Brian W. Sturgell
<PAGE> 18
ADDENDUM TO ALUMINUM PURCHASE/SUPPLY AGREEMENT
DATED JULY 5,1995
WHEREAS, Coca-Cola Enterprises ("CCE") and The Coca-Cola
Company ("TCCC") have requested that the current five year can supply agreement
(the "can supply agreement") between ANC and CCE be modified for the years 1998
through 2000 to provide for the awarding by CCE/TCCC to ANC of can volumes
(incremental volumes) in excess of the 7 billion cans (the base volume) which
CCE is required to purchase annually under the can supply agreement. CCE/TCCC
has requested that the can sheet required for any such incremental volume be
awarded in its entirety to Alcan Rolled Products ("Alcan") under the same terms
and conditions as the base volume. Since the purchase of the can sheet for this
incremental volume is being directed by and credited to CCE/TCCC, the purchase
of this volume will be, in essence, a soft toll, which is to say that it will be
purchased by ANC, but negotiated by and credited to CCE/TCCC; and
WHEREAS, ANC is willing to modify its can supply agreement
with CCE effective January 1, 1998 for the remaining term of such supply
agreement (i.e., through December 31, 2000) based on ANC's knowledge and belief
that the arrangements relating to the purchase of such incremental can sheet and
the modifications to ANC's agreement with CCE have been reviewed with and
approved by Alcan. However, ANC believes that the purchase by ANC from Alcan of
100% of such incremental volume in the years 1998 through 2000 would result in
ANC's breach of its agreements with its other can sheet suppliers; and
WHEREAS, ANC does not intend to break its other can sheet
supply agreements for the 1998 through 2000 period, but nonetheless wishes to
satisfy the CCE/TCCC requests delineated above; and
WHEREAS, Alcan is willing to accommodate ANC's concerns by
entering into the agreements set forth below.
NOW, THEREFORE, in consideration of the mutual promises set
forth hereinbelow and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Alcan and ANC agree to the
following addendum to the Aluminum Purchase/Supply Agreement dated July 5, 1995:
1. ANC agrees to award to Alcan 50% of any incremental volume in
excess of 7 billion cans which may be awarded to ANC by CCE/TCCC in the years
1998 through 2000. The remaining 50% of such incremental can sheet volume will
be accrued and awarded to Alcan in the first quarter of the calendar year 2001
prior to any other volume commitments made by ANC in that year. It is understood
that such accrued volume will be incremental to whatever volume commitment is
negotiated between ANC and Alcan for the year 2001. Tolling and pricing terms
and conditions for such accrued volume will be those in effect at the time of
shipment with the metal component to be equal to that charged for aluminum ingot
in the fourth quarter of the year 2000. If the parties
<PAGE> 19
mutually agree to spread the volume accrued over the first half of the year
2001, metal pricing during the second quarter of 2001 would be based on the
average of the daily Platt's Metals Week U.S. transaction prices for the period
September 1, 2000 through February 28, 2001. Any investment related discount to
ANC for the accrued volume would only be rebated to ANC if there is an agreement
in place between ANC and Alcan regarding such a discount during the year 2001.
2. Providing that ANC does receive incremental volume during the period
January 1, 1998 through December 31, 2000, Alcan agrees to (a) provide to ANC
50% of such incremental volume in each year that such incremental volume is
awarded by CCE/TCCC; (b) accrue the remaining 50% until the year 2001 as
provided above; and (c) credit CCE/TCCC annually for 100% of the incremental
(i.e., soft toll) volume awarded to ANC. ANC will advise Alcan by November 15 of
each year beginning in 1997 of the forecasted incremental can volume awarded to
ANC by CCE/TCCC for the following year and the corresponding can sheet tonnages
involved. ANC will then advise Alcan by January 15 of each year beginning in
1999 of the actual incremental can volume shipped to CCE/TCCC in excess of 7
billion cans during the previous year and the corresponding can sheet volume.
3. Alcan and ANC hereby confirm to one another that the conditions
spelled out in this Agreement are to be kept confidential and not shared with
anyone outside either the Alcan or ANC organizations unless specifically
approved in advance by both parties hereto.
4. Except as expressly stated above, and except as previously amended,
all other terms and conditions in the Aluminum Purchase/Supply Agreement dated
July 5, 1995 remain unchanged and in full force and effect.
EXECUTED and ACKNOWLEDGED this 9th day of July, 1997.
AMERICAN NATIONAL CAN COMPANY ALCAN ROLLED PRODUCTS
By: /s/ Edward A. Lapekas By: /s/ R.E. Daugherty
-------------------------------- ----------------------------
Title: Senior Executive Vice Title: Vice President -
----------------------------- --------------------------
President and Chief Worldwide Can
Operating Officer Sales
Beverage Worldwide
<PAGE> 20
(AMERICAN NATIONAL CAN LETTERHEAD)
May 6,1997
Mr. R. Edward Daugherty
Vice-President, Sales
Alcan Rolled Products Company
6060 Parkland Boulevard
Cleveland, OH 44124-4185
Dear Ed:
With the transfer of the UBC acquisition activity from American National Can
Company ("ANC") to Pechiney World Trade ("PWT") now complete, we want to
reconfirm the required changes to the can sheet supply contract dated July 5,
1995 related to this transfer, now that PWT will act as ANC's agent in securing
and supplying the UBC metal units. The contract should be amended as follows:
3.3 Tolling: The original contract provided that ANC would supply annually a
minimum of [*] of the total Aluminum can-stock purchased (body, end and tab) as
class scrap metal units (combination of CL1, CL2 and CL3) and another [*] of the
total Aluminum can-stock as UBC metal units. We have mutually agreed to revise
this as follows:
The total metal unit minimum requirement of 40% annually of the total
Aluminum can-stock purchased will be a combination of:
o UBC's of [*] regardless of total Aluminum can-stock purchases.
o Class Scrap of [*]. Percentage is fixed regardless of UBC's
returned.
o ANC may supply a greater percentage of combined metal units by
increasing the amount of Class Scrap to be tolled by mutual
agreement with Alcan.
3.5 UBC Acquisition: The original agreement under which ANC would supply band
priced UBC for [*] of the total Aluminum can-stock purchased needs to be amended
as follows:
ANC will, through PWT, supply ALCAN with UBC's under band pricing
equal to [*] per year [*] per month).
ALCAN will retain the option to purchase from PWT additional
non-banded UBC's up to [*] of ANC's annual total Aluminum can-stock
purchases.
Pricing of UBC: The intent of our original agreement regarding pricing of the
banded UBC's had four components:
<PAGE> 21
- 2 -
> formula pricing with a ceiling provided for in Section 3.5,
> floor price per the 9/18/95 amendment,
> a sharing review in each year if the pricing created an economic
problem for one party per Section 3.5,
> formula sharing beyond the one penny in actual gains or losses
per S. Fehling's 1/11/96 fax and the minutes of our 1/24/96 joint
meeting.
Although PWT has expressed concern regarding the formula used, the
ceiling and floor concept will be retained as well as the annual
review of each others economic problems. However, since PWT will be
hedging this activity both in their premium book and in their LME
book, the computation of gains or losses will ultimately require some
modifications. Alcan and PWT, as ANC's UBC agent, will discuss and
attempt to agree upon a modification to this computation and will
provide a further written amendment to the can sheet supply agreement
once this modification has been agreed upon.
[*]
If you are in agreement with the above delineated changes to our can sheet
supply contract, please so indicate by signing the copy of this letter in the
space provided below, and return to ANC Purchasing.
Yours truly,
/s/ Bert F. Larsson
-------------------
Bert F. Larsson
Enclosure
cc: R. Nunn -08Z
J. Sasso -08Z
S. Fehling-Alcan/Cleveland
J-P. Lacor-PWT
ACCEPTED AND AGREED TO:
ALCAN ROLLED PRODUCTS COMPANY AMERICAN NATIONAL CAN COMPANY
BY: /s/ BRIAN STURGELL BY: /s/ EDWARD A. LAPEKAS
---------------------------- ----------------------
BRIAN STURGELL EDWARD A. LAPEKAS
<PAGE> 22
(AMERICAN NATIONAL CAN LETTERHEAD)
July 25, 1995
Mr. Brian W. Sturgell
ALCAN ROLLED PRODUCTS COMPANY
100 Erieview Plaza
P.O. Box 6977
Cleveland, OH 44114
Subject: AMERICAN NATIONAL CAN GLOBAL SOURCING STRATEGY
Dear Brian:
This is to confirm that it is the intent of American National Can Company (ANC)
to source approximately 40% of its worldwide can sheet requirements from Alcan
Rolled Products Company (Alcan).
With the signing of the North American Supply Agreement, ANC and Alcan have
shown their willingness to enter into a mutually beneficial multi-year
commitment. It is the intent of ANC to enter into a similar kind of an agreement
with your Alcan Deutschland group covering our European can sheet requirements.
The realization of such an agreement for our European operations will be
predicated on the mutual acceptability of the terms and conditions required in
that market.
ANC also intends to offer Alcan an opportunity to supply up to 40% of its can
sheet requirements in South and Central America, as that market develops, under
conditions and terms which are competitive in those specific markets.
Sincerely,
/s/ Gerard Hauser
-----------------------------
Gerard Hauser
C.O.O. Beverage Sector
American National Can Company
cc: Mr. R. Ball - Alcan
Mr. R. Deneau - American National Can
Mr. M. Herdman - American National Can
Mr. B. Larsson - American National Can
<PAGE> 23
(ALCAN ROLLED PRODUCTS COMPANY'S LETTERHEAD)
December 12, 1995
Mr. Richard M. Deneau
Senior Vice President
Beverage Cans, North America
American National Can
8770 West Bryn Mawr
Chicago, IL 60631
Dear Rick:
This is to confirm that, for purposes of the multi-year can sheet supply
contract with Alcan, American National Can has elected to take advantage of the
"band" concept, as outlined in Paragraph C of the pricing provisions of that
contract, with respect to a volume equivalent to 50% of their annual usage of
can sheet. American National Can understands that, based on its decision to take
advantage of the "band" concept for this volume, Alcan will be taking steps to
secure metal positions or otherwise will be acting in reliance on that decision.
While American National Can's contracting decisions with its customers are
matters that have been negotiated solely between American National Can and its
customers, American National Can nonetheless confirms that it is contractually
committed to one or more of its customers in ways that provide American National
Can the comfort to make the foregoing commitment to Alcan. In that regard,
American National Can is ordering under the band concept only the metal that is
supported by such customer contracts.
I would appreciate your confirming this commitment by countersigning the
enclosed extra copy of this letter and returning it to me. By doing so, American
National Can reaffirms its commitment to the multi-year can sheet supply
contract, including the pricing provisions of that contract.
Sincerely,
/s/ Brian W. Sturgell /s/ Richard M. Deneau
- ----------------------------------- ------------------------------
Brian W. Sturgell Richard M. Deneau
Vice President and General Manager Senior Vice President
Sheet Products Beverage Cans, North America
American National Can
<PAGE> 24
(ALCAN ROLLED PRODUCTS COMPANY LETTERHEAD)
CONFIDENTIAL
August 7, 1995
Mr. Bert F. Larsson
American National Can
8770 West Bryn Mawr
Chicago, IL 60631
RE: Aluminum RCS Support
Dear Bert:
This letter is to confirm our agreement that Alcan Rolled Products will support
American National Can's plans to grow the use of aluminum cans in North, Central
and South America by expanding the current market and developing new markets.
Specifically, Alcan agrees to provide financial support to ANC, to partially
offset the ANC costs associated with growing and developing the aluminum can,
during the five-year agreement between the parties, while Alcan holds a 50% can
sheet supply position with ANC in the North American region.
In order to continue to grow and develop the aluminum can business, Alcan will
provide financial support [*] per pound on all can sheet pounds sold to ANC in
North America. This support shall be payable to ANC at the end of the first year
of the agreement and at the end of each year of the initial contract duration
thereafter, provided that:
o ANC has invested in the growth and development of the aluminum
can during the year in question such that the volume of ANC's
business to Alcan (50%) will be increased as a direct result of
the investment during that year from what it otherwise would have
been had the investment by ANC not been made during that year
(i.e., tooling for new can sizes, expansion of a can plant to
meet demand, new can designs for marketing purposes, etc.).
o ANC continues to give Alcan a minimum of 50% of their can sheet
(body and end) business in North, Central and South America,
unless Alcan elects not to participate in any particular piece of
business, which would then reduce accordingly the 50% share in
that region.
o The fabrication component being charged by Alcan to ANC is at
market or at 32ct./lb. on body sheet and 72ct./lb. on coated
beverage end sheet throughout the year in
<PAGE> 25
question, adjusted by cost increases or by PPI, as described in
Section 3.4d of the agreement.
o The metal price component being charged to ANC is 70ct./lb. or
greater throughout the year.
o It is understood that this support would not apply to
expenditures by ANC which involve cost reduction,
rationalization, etc., but would apply to expenditures to grow
and develop the can market in North, Central and South America.
These conditions having been met, Alcan will support ANC's growth plans with
financial support [*] per pound on all can sheet sales in North America sold to
ANC by Alcan.
An example would be that on a 50% market share of [*] million pounds sold by
Alcan to ANC in North America ([*] billion ANC total volume x 50% to Alcan),
Alcan would pay, subject to the above conditions, [*] with proper documentation
to verify the Alcan market share as well as the amount and nature of the
investment support. It is understood between the parties that if any one of the
above conditions is not satisfied throughout the calendar year in question,
Alcan will not be required to pay the support during that year of the contract.
This agreement is to be held in strict confidence between the parties.
Sincerely,
/s/ R. Edward Daugherty
R. Edward Daugherty
Vice President - Sales
RED/kjd
<PAGE> 1
CONFIDENTIAL
TREATMENT
REQUESTED*
Exhibit 10.2
ALUMINUM PURCHASE AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of the 10th day of January, 1995, by
and between AMERICAN NATIONAL CAN CORPORATION, a Delaware corporation
(hereinafter referred to as "ANC") and ALUMINUM COMPANY OF AMERICA, a
Pennsylvania corporation (hereinafter referred to as "ALCOA").
W I T N E S S E T H:
WHEREAS, ANC is a world leader in the sale and manufacturing of aluminum
beverage cans;
WHEREAS, ALCOA is a world leader in the sale and manufacturing of (aluminum
can-stock) used in the manufacturing of beverage cans; and
WHEREAS, ANC and ALCOA desire to enter into an agreement for the long-term
supply of (aluminum can-stock) for use in the manufacturing of aluminum beverage
cans;
NOW, THEREFORE, in consideration of the mutual promises of each of the parties
set forth below and for other valuable considerations, which both ANC and ALCOA
acknowledge receiving from one another, the parties agree as follows:
___________________
* Terms for which confidential treatment has been requested have been omitted
and are marked with an asterisk [*]. Confidential material has been
separately filed with the U.S. Securities and Exchange Commission under an
application for confidential treatment.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 1/27
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<PAGE> 2
ARTICLE 1: DEFINITIONS
1.1/ALUMINUM CAN-STOCK. Aluminum can-stock (hereinafter referred to as
"can-stock") shall mean body-stock, end-stock and tab-stock, collectively, that
comply with ANC's standards and specifications set forth in Exhibits A-1, A-2
and A-3.
1.2/ALUMINUM CAN BODY-STOCK. Aluminum can body-stock (hereinafter referred to as
"body-stock') shall mean coiled aluminum sheet stock for aluminum beverage can
bodies, conforming to ANC's standards and specifications attached hereto as
Exhibit A-1.
1.3/ALUMINUM CAN END-STOCK. Aluminum can end-stock (hereinafter referred to as
"end-stock") shall mean coiled aluminum sheet stock for aluminum beverage can
ends which has either been treated by ALCOA with a coating (hereinafter referred
to as "coated end-stock"), or has not been so treated by ALCOA (hereinafter
referred to as "bare end-stock"), and conforming to ANC's standards and
specifications attached hereto as Exhibit A-2.
1.4/ALUMINUM CAN TAB STOCK. Aluminum can tab stock (hereinafter referred to as
"tab-stock") shall mean coiled aluminum sheet stock for aluminum beverage can
end tabs, conforming to ANC's standards and specifications attached hereto as
Exhibit A-3.
ANC may change its aluminum can-stock standards and specifications from time to
time, as set forth in Article 7, Section 7.1.
ARTICLE II: TERM AND TERMINATION
2.1/TERM. This Agreement shall take effect as of March 1, 1995, and shall
continue in full force and effect through December 31, 1997.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 2/27
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<PAGE> 3
2.2/TERMINATION. This Agreement shall extend automatically from year to year
after expiration of the initial term, unless and until terminated by one of the
parties by giving notice to the other party at least twelve months prior to the
expiration of the initial term or any extended term.
ARTICLE III: QUANTITIES
3.1/QUANTITY FOR YEAR 1995. For the calendar year 1995, ANC agrees to purchase
and ALCOA agrees to supply a quantity of 140 million pounds, consisting of 75
million pounds of body-stock and 65 million pounds of end-stock.
3.2/QUANTITY FOR YEARS 1996 AND 1997. For calendar year 1996, ANC agrees to
purchase, and ALCOA agrees to supply, 25% of ANCs on-going total requirements of
aluminum can-stock in North America. For calendar year 1997, ANC agrees to
purchase, and ALCOA agrees to supply, 30% of ANCs on-going total requirements of
aluminum can-stock in North America. A letter from ANC to ALCOA, attached to
this contract as Exhibit F, will give indications about the potential order of
magnitude of the corresponding quantities.
3.3/ON-GOING REQUIREMENTS. ANCs on-going total requirements of aluminum
can-stock in North America shall mean the aluminum can-stock requirements of the
current (as of January 1, 1994) beverage can manufacturing facilities of ANC in
the United States, Canada and Mexico, and the requirements of any new plant,
line or product to be eventually added by ANC to its manufacturing capacity by
any means (acquisition, construction, or other), provided that: (I) new plant
volume already covered by aluminum can-stock purchase commitments at the time of
the addition to ANC's facilities will be included only upon the earliest date
when such contracts expire or are terminated by ANC; (II) if another supplier
makes an offer to support new plant volume in consideration of an aluminum
purchase commitment from that new plant that would prevent ANC from acquiring
the above-referenced shares (25% in 1996 and 30% in 1997) of its additional
aluminum can-stock requirements from ALCOA, and ALCOA elects not to make a
comparable offer to ANC, then this
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 3/27
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<PAGE> 4
new plant volume covered by the commitment shall be included as part of ANC's
total requirements under this section only upon the earliest date when such
commitment expires or is terminated by ANC. A list of ANC's current beverage can
manufacturing facilities in North America as of January 1, 1994, is attached to
this Agreement as Exhibit D.
3.4/MIX ALLOCATION. For years 1996 and 1997, the specific mix allocation between
body-stock, end-stock and tab-stock for each year will be as agreed upon by the
parties. A letter from ANC to ALCOA, attached to this contract as Exhibit F,
will give indications about the potential order of magnitude of the
corresponding quantities.
3.5/ADDITIONAL QUANTITIES.
a/Nothing in this Agreement shall prevent, or be construed to prevent, ANC's
right to bid in the marketplace, for years 1996 and 1997, part or all of the
portion of ANCs on-going total requirements of aluminum can-stock in North
America, in excess of the commitments to ALCOA defined in article 3, paragraph
3.2 above. Nothing in this Agreement shall prevent, or be construed to prevent,
ALCOA from offering to supply those additional quantities.
b/If another supplier of can-stock to ANC fails or is unable to supply ANC the
quantities agreed to by that supplier for a reason other than an ANC default, at
ANC's request, ALCOA will use its best commercial efforts to supply the other
suppliers deficiency on terms and conditions to be agreed upon. ANC shall give
ALCOA as much advance notice of such a circumstance as possible.
c/Until incorporated into the annual contract volume by an amendment to this
contract, the "additional quantities" described in Article 5, Section 3.5-a and
3.5-b above shall be referred to as Incremental Contract Volume.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 4/27
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<PAGE> 5
ARTICLE IV: TOLLING
4.1/GENERAL LIMITATION OF TOLLING. Any can-stock quantity already priced for
delivery during the next year with a ceiling metal component, a minimum-maximum
metal component, or a fixed price metal component established prior to November
1st cannot be tolled under the provisions of Article 4, Section 4.2 and 4.3
below.
4.2/TOLLING OF SCRAP. At its sole option, during the entire duration of this
agreement, ANC shall have the right to ask ALCOA to deliver the quantities set
forth in article 3 above, under a straight sale arrangement, or a combination of
both a straight sale and a scrap tolling arrangements, with the quantity
limitations set forth below. With the exception of year 1995, ANC must notify
ALCOA of its election before November 1st of the preceding calendar year. Such
election shall be made for an entire calendar year, and cannot then be changed,
unless an agreement to the contrary is reached between the parties. For year
1995, ALCOA shall be given notice within ten (10) days after execution of this
Agreement.
ALCOA will accept shipments from ANC of Class I and Class III aluminum can-stock
scrap from ANC's North American facilities. Deliveries shall be made at ANC's
expense to Midwest locations designated by ALCOA and shall conform to ALCOA's
specifications. The specific volumes for each form are:
- -Class I scrap: up to 20% of ALCOA's body-stock shipments to ANC North American
facilities.
- -Class III scrap: up to 4% of ALCOA's body-stock shipments to ANC's North
American facilities.
4.3/TOLLING OF INGOT. Provided that, at the date that the election is made, the
LME aluminum ingot future average price for the period of election is equal to
or greater than 80 ct./lb., at ANC's sole option, starting with year 1996, and
in addition to the tolling of scrap covered by Article 4, Section 4.1 above, ANC
shall have the right to ask ALCOA to deliver the quantities set forth in article
3 above, under a straight sale arrangement, or a combination of both a straight
sale and an
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 5/27
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<PAGE> 6
ingot (P1020) tolling arrangement, with the quantity limitations set forth
below. ANC must notify ALCOA of its election before November 1st of the
preceding calendar year. Such election shall be made for an entire calendar
year, and cannot then be changed, unless an agreement to the contrary is reached
between the parties.
Deliveries of ingot (P1020) shall be made at ANC's expense to Midwest locations
designated by ALCOA and shall conform to ALCOA's specifications.
The specific volumes of acceptable tolling under this Article 4, Section 4.2,
for each form of can-stock, are:
- -up to 30% of ALCOA's body-stock shipments to ANC North American facilities.
- -up to 75% of ALCOA's end-stock and tab-stock shipments to ANC's North American
facilities.
4.4/DELIVERY OF METAL UNITS FOR TOLLING. [*] ALCOA shall deliver to ANC by the
end of each calendar month during the term a quantity of can-stock equal to, and
in return for, the quantity of metal units delivered to ALCOA for tolling at
least 30 days prior to the requested delivery date of the corresponding
can-stock. ALCOA shall weigh the railcars and/or trailers containing the metal
units received from ANC. The weight recorded by ALCOA shall be the weight
delivered to ALCOA unless a discrepancy occurs between ALCOA's and ANC's
recorded weights. Should such a discrepancy occur, the parties shall meet and
negotiate an agreeable resolution of the discrepancy. The scales used by ALCOA
shall be inspected and certified in accordance with applicable state law. Scale
tickets shall be kept by ALCOA and made available to ANC upon request. ALCOA
shall supply to ANC a monthly status report (format to be defined by ANC)
showing, by product class, the weight of metal units received by ALCOA from ANC
and of can-stock shipped to ANC by ALCOA. If ALCOA's receipt of metal units from
ANC exceeds the current month's receipt of can-stock by ANC, the balance of the
metal units must be tolled by ALCOA in the following month.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 6/27
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<PAGE> 7
4.5/BAILMENT. Toll transactions contemplated by Article 4 shall be considered as
bailments involving the manipulation of the goods. ANC shall retain title to,
and risk of loss for, the metal units delivered to ALCOA for conversion into
can-stock pursuant to this Agreement. ALCOA shall exercise such care in regard
to the metal units as a reasonable careful person would exercise under like
circumstances and ALCOA shall insure such metal while it is in ALCOA's care,
custody and control. ALCOA shall assume liability for loss or damage of metal
units caused by its failure to exercise such care.
4.6/COMMINGLING. ALCOA reserves the right to commingle metal units delivered by
ANC with any other metal units in ALCOA's possession, and, if so commingled, ANC
shall have an undivided interest therein. ALCOA further reserves the right to
substitute metal units in ALCOA's possession for those metal units delivered by
ANC, provided that the toll converted can-stock delivered by ALCOA to ANC is in
conformity with the appropriate specifications set forth in Exhibits A-1, A-2,
and A-3.
ARTICLE V: PRICING
5.1/PRICING CONDITIONS. Provisions of this article shall apply to both tolling
and straight sales.
Deliveries of can-stock by ALCOA shall be made F.O.B. destination within the
continental United States, as designated by ANC. Additional transportation cost
outside the continental United States shall be paid for by ANC. Title to and
risk of loss for can-stock shall pass to ANC upon delivery to ANC's plant. In
the case of tolling, ANC shall be responsible for the cost of transportation of
metal units to the designated ALCOA facility.
ANC shall pay for can-stock supplied and delivered under this Agreement by wire
transfer,[*].. Actual payments shall be disbursed by ANC on or before the
expiration of the payment periods for
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 7/27
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<PAGE> 8
each type of can-stock determined in accordance with the applicable provisions
of this Agreement. Payment shall be made to the address supplied to ANC by
written notice from ALCOA.
All prices and fees covered in this Agreement will be for the reference
specifications set forth below:
- --------------------------------------------------------------------------------
body-stock 3xxx-H19 0.0114" x base width
coated end-stock (clear beverage) 5182-H19 0.0108" x base width
bare tab-stock 5042-H19 0.0110" x base width
- --------------------------------------------------------------------------------
5.2/STRAIGHT SALE PRICING MECHANISMS. At ANC's option, ANC may place all or any
portion of its annual contract straight sale priced contract volume using one or
more of the following four pricing mechanisms defined and delineated below:
-ceiling pricing,
-minimum-maximum pricing,
-fixed pricing,
-spot pricing.
For fixed pricing, ceiling and minimum-maximum pricing, prices for the metal
component, as well as any applicable risk premiums, shall be fixed for periods
of one (1) month increments, but in no event shorter than one month for any one
period. The distribution among the pricing mechanisms, and the choice of the
pricing period shall be entirely at ANC's option. Any annual contract volume not
priced by either a fixed, ceiling or minimum-maximum price by the last day of
the month two months prior to the scheduled month of delivery shall be priced by
the spot pricing mechanism. At ANC's option, ANC may at anytime, but effective
only starting after the current month, and for a maximum of twenty-four (24)
months after the current month, move from spot pricing to fixed, ceiling or
minimum-maximum pricing. However, once a fixed, ceiling or minimum-maximum price
is established, period, volume and price are firm, and ANC cannot switch between
these mechanisms, or to a spot price, or to tolling, for the corresponding
volumes.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 8/27
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<PAGE> 9
5.3/CEILING PRICING. The ceiling price is the sum of a ceiling price risk
premium, a metal component and a conversion component. Payment of a ceiling
price risk premium entitles ANC to a price no greater than a maximum for the
specific volume of can-stock priced at a ceiling price.
a/Ceiling price risk premium. The ceiling price risk premium reflects the cost
of securing an option to purchase metal at a maximum future price for a
specified delivery period. The ceiling price risk premium is established at the
same time as the ceiling metal component.
b/Ceiling metal component, The ceiling metal component is the sum of the LME's
London Clearing House (LCH) aluminum high-grade futures contracts price
corresponding to the above mentioned option for the agreed future delivery
period, plus the applicable Midwest market delivered premium at the time of
order acceptance. The notification day and placement period are as defined below
in Article 5, Section 5.3-e.
c/Actual metal component price. The metal component price payable by ANC shall
be the lower of the ceiling metal component and the average Midwest spot price
for aluminum high-grade ingot for the month prior to delivery.
d/Conversion component. For each product (body-stock, end-stock, tab-stock), and
specification, the conversion component of the ceiling price shall be the lower
of (I) ALCOA's published conversion price at the time of shipment, or (II) the
competitive market conversion price. The competitive market conversion price
shall be the lower of (I) for delivery within the continental United States,
ALCOA's lowest weighted average conversion price charged to another customer of
ALCOA for delivery within continental United States, for the same specification
during the same period, and for delivery in Mexico or Canada, ALCOA's lowest
weighted average conversion price charged to another customer of ALCOA for
delivery respectively into Mexico or Canada, for the same specification during
the same period or: (II) the lowest weighted average conversion price for the
same specification during the same period, available to ANC from KAISER and/or
ALCAN, if those competitors are committed to, or are offering to supply,
individually at least 15% of ANC's North American requirements for the relevant
type of can stock.
e/Procedure for establishing a ceiling price. ANC shall advise ALCOA in writing
of the volume and delivery period for which the ceiling price will be
established [Example: on the first Tuesday of the
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 9/27
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<PAGE> 10
second month of the second quarter of year Y, at 4:00 p.m. EST, ANC advises
ALCOA of their intention to purchase 105 million pounds of body-stock using the
ceiling price mechanism]. ALCOA will confirm in writing to ANC the details of
the intended metal coverage program, provided that the quantity to be hedged on
any one day shall not exceed 40 million pounds in the aggregate for all pricing
mechanisms, unless specifically agreed upon by the parties. The notification day
ends at 5:00pm East Standard Time (EST) on the day ANC instructs ALCOA to fix
the ceiling of the metal component for the requested delivery period. In the
event that ANC places more than forty (40) million pounds of volume on any one
day, in order to establish the ceiling of the metal component price, ALCOA will
use the weighted average of the closing prices for the next "X" LME working days
(the placement period), plus the contangoes or backwardations applicable to the
future delivery period, where "X" is the total volume placed divided by forty
(40) million pounds, and rounded up to the whole number of days [Example: ALCOA
will indicate the ceiling premium expected for Wednesday (40 million pounds),
Thursday (40 million pounds), Friday (25 million pounds), immediately following
the notification Tuesday]. ANC will immediately instruct ALCOA whether or not to
implement the program. After completion, ALCOA will notify ANC as to the actual
metal component ceiling price, and the corresponding option premiums. Option
premiums will be invoiced immediately by ALCOA, and paid by ANC net 30 days.
5.4/MINIMUM-MAXIMUM PRICING. The minimum-maximum price is the sum of a
minimum-maximum price risk premium, a metal component and a conversion
component. Payment of a minimum-maximum price risk premium entitles ANC to a
price no greater than a maximum and no lower than a minimum for the specific
volume of can-stock priced at a minimum-maximum price.
a/Minimum-maximum price risk premium. The minimum-maximum price risk premium
reflects the cost of securing an option to purchase metal at a maximum future
price for the agreed future delivery period, less the revenue of selling an
option to sell metal at a minimum future price for the agreed future delivery
period. The minimum-maximum price risk premium is established at the same time
as the minimum-maximum metal components.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 10/27
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<PAGE> 11
b/Minimum-maximum metal components. The minimum-maximum metal components are the
LME's London Clearing House (LCH) aluminum high-grade futures contracts prices
corresponding to the above mentioned options for the agreed future delivery
period, plus the applicable Midwest market delivered premium at the time of
order acceptance. The notification day and placement period are as defined below
in Article 5, Section 5.4-e.
c/Actual metal component. The metal component price payable by ANC shall be the
average Midwest spot price for aluminum high-grade ingot for the month prior to
delivery, provided that if this average is greater than the maximum metal
component, the actual metal component shall be equal to this maximum metal
component, and provided that if this average is lower than the minimum metal
component, the actual metal component shall be equal to this minimum metal
component.
d/Conversion component. For each product (body-stock, end-stock, tab-stock), and
specification, the conversion component of the minimum-maximum price shall be
the lower of (I) ALCOA's published conversion price at the time of shipment, or
(II) the competitive market conversion price. The competitive market conversion
price shall be the lower of (I) for delivery within the continental United
States, ALCOA's lowest weighted average conversion price charged to another
customer of ALCOA for delivery within continental United States, for the same
specification during the same period, and for delivery in Mexico or Canada,
ALCOA's lowest weighted average conversion price charged to another customer of
ALCOA for delivery respectively into Mexico or Canada, for the same
specification during the same period or: (II) the lowest weighted average
conversion price for the same specification during the same period, available to
ANC from KAISER and/or ALCAN, if those competitors are committed to, or are
offering to supply, individually at least 15% of ANC's North American
requirements for the relevant type of can stock.
e/Procedure for establishing a minimum-maximum price. ANC shall advise ALCOA in
writing of the volume and delivery period for which the minimum-maximum price
will be established [Example: on the first Tuesday of the second month of the
second quarter of year Y, at 4:00 p.m. EST, ANC advises ALCOA of their intention
to purchase 105 million pounds of body-stock using the minimum-maximum price
mechanism]. ALCOA will confirm in writing to ANC the details of
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 11/27
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<PAGE> 12
the intended metal coverage program, provided that the quantity to be hedged on
any one day shall not exceed 40 million pounds, in the aggregate for all pricing
mechanisms, unless specifically agreed upon by the parties. The notification day
ends at 5:00pm East Standard Time (EST) on the day ANC instructs ALCOA to fix
the minimum and maximum of the metal component for the requested delivery
period. In the event that ANC places more than forty (40) million pounds of
volume on any one day, in order to establish the ceiling of the metal component
price, ALCOA will use the weighted average of the closing prices for the next
"X" LME working days (the placement period), plus the contangoes or
backwardations applicable to the future delivery periods, where "X" is the total
volume placed divided by forty (40) million pounds, and rounded up to the whole
number of days [Example: ALCOA will indicate the minimum/maximum premium
expected for Wednesday (40 million pounds), Thursday (40 million pounds), Friday
(25 million pounds), immediately following the notification Tuesday]. ANC will
immediately instruct ALCOA whether or not to implement the program. After
completion, ALCOA will notify ANC as to the actual metal component
minimum-maximum price, and the corresponding option premiums. Option premiums
will be invoiced immediately by ALCOA, and paid by ANC net 30 days.
5.5/FIXED PRICING. The fixed price is the sum of a metal component fixed price
and a conversion component.
a/Metal component fixed price. The metal component fixed price is the LME's
London Clearing House (LCH) aluminum high-grade futures contracts closing price
for the agreed future delivery period, plus the applicable Midwest market
delivered premium at the time of order acceptance. The notification day and
placement period are as defined below in Article 5, Section 5.5-d.
b/Actual metal component price. The metal component price payable by ANC is
equal to the metal component fixed price.
c/Conversion component. For each product (body-stock, end-stock, tab-stock), and
specification, the conversion component of the fixed price shall be the lower of
(I) ALCOA's published conversion price at the time of shipment, or (II) the
competitive market conversion price. The competitive market conversion price
shall be the lower of (I) for delivery within the continental United States,
ALCOA's lowest weighted average conversion price charged to another customer of
ALCOA for
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<PAGE> 13
delivery within continental United States, for the same specification during the
same period, and for delivery in Mexico or Canada, ALCOA's lowest weighted
average conversion price charged to another customer of ALCOA for delivery
respectively into Mexico or Canada, for the same specification during the same
period or: (II) the lowest weighted average conversion price for the same
specification during the same period, available to ANC from KAISER and/or ALCAN,
if those competitors are committed to, or are offering to supply, individually
at least 15% of ANC's North American requirements for the relevant type of can
stock.
d/Procedure for establishing a fixed price. ANC shall advise ALCOA in writing of
the volume and delivery period for which the fixed price will be established.
ALCOA will confirm in writing to ANC the details of the intended metal coverage
program, provided that the quantity to be fixed on any one day shall not exceed
40 million pounds, in aggregate for all pricing mechanisms, unless specifically
agreed upon by the parties. The notification day ends at 5:00pm East Standard
Time on the day ANC instructs ALCOA to fix the price of the metal component for
the requested delivery period. In the event that ANC places more than forty (40)
million pounds of volume on any one day, in order to establish the metal
component price, ALCOA will use the average of the LME cash settlement prices
for the next "X" LME working days (the placement period), plus the contangoes or
backwardations applicable to the future delivery periods, where "X" is the total
volume placed divided by forty (40) million pounds, and rounded up to the whole
number of days. ANC will immediately instruct ALCOA whether or not to implement
the program. After completion, ALCOA will notify ANC as to the actual metal
component fixed price.
5.6/SPOT PRICING. The spot price is the sum of the metal component price and the
conversion price.
a/Metal component. The spot price metal component is the average of the LME's
London Clearing House (LCH) aluminum high-grade contracts closing prices for the
month prior to delivery, plus the average applicable Midwest market delivered
premium for the same month.
b/Conversion component. For each product (body-stock, end-stock, tab-stock), and
specification, the conversion component
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 13/27
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<PAGE> 14
of the spot price shall be the lower of (I) ALCOA's published conversion price
at the time of shipment, or (II) the competitive market conversion price. The
competitive market conversion price shall be the lower of (I) for delivery
within the continental United States, ALCOA's lowest weighted average conversion
price charged to another customer of ALCOA for delivery within continental
United States, for the same specification during the same period, and for
delivery in Mexico or Canada, ALCOA's lowest weighted average conversion price
charged to another customer of ALCOA for delivery respectively into Mexico or
Canada, for the same specification during the same period or: (II) the lowest
weighted average conversion price for the same specification during the same
period, available to ANC from KAISER and/or ALCAN, if those competitors are
committed to, or are offering to supply, individually at least 15% of ANC's
North American requirements for the relevant type of can stock.
5.7/CONVERSION COMPONENT OF TOLLING PRICES.
The tolling fee for Class I scrap is established for year 1995 at [*] above the
body-stock conversion price defined in Article 5, Section 5.3-d above. The
tolling fee for Class III scrap is established for year 1995 at [*] above the
body-stock conversion price defined in Article 5, Section 5.3-d above. Both
tolling fees are subject to yearly adjustment by multiplication by the ratio of
the Producer Price Index of September of the preceding year by the Producer
Price Index of September 1994 [Example: if the PPI index of September 1994 is
324, and the PPI index of September 1995 is 337, and provided that the
body-stock conversion fee is [*], the maximum tolling fee for Class I scrap for
year 1996 shall be [*] x (337/324) = [*], but may not be higher than the
competitive tolling market fee. The competitive tolling market fee shall be the
lower of (I) for delivery within the continental United States, ALCOA's lowest
weighted average tolling fee charged by ALCOA to another customer for delivery
within the continental United States, for the same specifications during the
same period, and for delivery in Mexico or Canada, ALCOA's lowest weighted
average tolling fee charged by ALCOA to another customer for delivery
respectively within Mexico or Canada, or: (II) the weighted average tolling fee
for the same specifications during the same period, available to
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 14/27
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<PAGE> 15
ANC from KAISER and/or ALCAN if those competitors are committed to, or are
offering to supply, individually, at least 15% of ANC's North American
requirements for the relevant product.
5.8/ADJUSTMENT OF THE CONVERSION COMPONENT TO MEET COMPETITION.
a/Should ANC at any time provide ALCOA with evidence that ANC has a bona fide
offer from KAISER and/or ALCAN with a conversion price and/or tolling fees more
favorable than those ANC gets from ALCOA, ALCOA will adjust its relevant
conversion prices and/or tolling fees to the level of the competitive offer at
the effective date of such offer, subject to the provisions of Article 5,
Sections 5.8-c and 5.8-d.
b/Once the price for can-stock has been established, this price shall be
adjusted only for changes in conversion prices or tolling fees pursuant to
Article 5, Section 5.8-a above, or to reflect the difference in specification of
an order to the base specification. The price shall not be adjusted for any
changes in metal, contango, backwardation, ceiling risk premium, minimum-maximum
risk premium or delivery premiums during the period.
c/Should ANC at any time provide ALCOA with evidence that ANC has a bona fide
offer from KAISER and/or ALCAN to sell can-stock in the United States, Mexico or
Canada on a straight sale pricing more favorable than the pricing being charged
by ALCOA hereunder, and the conversion price is not explicitly stated, then the
competitive conversion price for that country will be derived by subtracting the
Midwest price for the metal for the relevant period of the offer on the date of
the competitive offer from the competitor's straight sale price. If ALCOA elects
to meet this competitive situation, at ALCOA's option, ALCOA may meet either the
outright sales price, or the derived matched conversion price.
Because of the volatility of the metal market, both parties agree to act on a
timely basis to ensure that all competitive price comparisons are
contemporaneous. ALCOA will advise ANC within thirty (30) working days of the
terms of any sale made by ALCOA to any customer for delivery in continental
United States, Mexico and Canada, as appropriate, that reflects a conversion
price lower than the last price offer made by ALCOA to ANC, and will adjust
ANC's price to the date of the relevant sale.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 15/27
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<PAGE> 16
ANC will advise ALCOA within five (5) working days that ANC has a bona fide
offer from ALCAN or KAISER individually to sell at least 15% of ANC's relevant
can-stock product requirements on either a total pricing or a conversion price
basis more favorable than the price charged by ALCOA, and ANC will give ALCOA
ten (10) working days to match, at ALCOA's option, either the conversion price
or the total straight sale price. If ANC doesn't receive ALCOA's agreement to
match the competitive offer within the ten (10) working days period, then ANC
shall be entitled, without any liability beyond the metal component price
liability described in Article 5, Section 5.10 below, to purchase the quantity
of can-stock offered by the other supplier with a corresponding reduction in
ANC's committed volume to ALCOA.
d/For competitive straight sale and/or conversion price offers which ALCOA is
required to meet, or bring to ANC, any of the following price arrangements shall
be excluded from consideration in determining the value of the offer:
- -unique systems savings programs,
- -specific promotional prices or promotional tolling fees,
- -spot pricing or toll fees for incremental business,
- -annual or multi-year pricing based on or tolling fees derived from forward
metal prices or hedges,
- -multi-year pricing or tolling fees arrangements made prior to the execution of
this contract
- -any special discounts to ANC off "the best or lowest market price", including
any discount offered off the ALCOA price list by any reliable supplier to ANC
for a fixed long-term volume.
In the event ANC's competitive price offer is below ALCOA's price by more than
$0.005 per pound, at ALCOA's request, ANC will confirm that the offer does not
contain any of the excluded arrangements set forth above in this Article 5,
Section 5.8-d.
5.9/LIQUIDATION OF METAL POSITIONS. After ANC and ALCOA have agreed upon a
contract volume for a period, and if for any reason, permitted by this Agreement
or by ALCOA, any amount of that commitment is not purchased by ANC, ALCOA shall,
with the agreement of both parties, either liquidate any metal future position
relating to this volume at ANC's sole expense, or apply such metal position
against the next available scheduled shipment volume until all such metal is
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 16/27
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<PAGE> 17
consumed. In the event ALCOA liquidates any futures or option positions, ANC
shall forfeit any prepaid fees and shall be obligated to pay any reasonable
expenses incurred in the liquidation.
5.10/CHANGE IN MARKET CONDITIONS. If, during the life of this Agreement, the
contractual price mechanisms described hereinabove no longer reflect the
announced ALCOA price mechanisms, the price mechanism available to ANC from
ALCAN or KAISER, or the price mechanism currently being offered to other ALCOA's
customers by ALCOA, ANC and ALCOA agree to meet and discuss these changes and
their impact on this Agreement, with the goal not to disadvantage either party.
5.11/INVOICING AND CREDIT PROCEDURES. For all pricing mechanisms, the invoice
price is the sum of the actual metal component defined in Article 5, Sections
5.3-c, 5.4-c, 5.5-c, and 5.6-c, plus the published ALCOA conversion revenue. In
the event that during any shipment month, an agreed upon conversion price
competitive situation exists, then ALCOA will issue to ANC a credit for the
difference between the published conversion price, and the competitive
conversion price during the month following shipment. If appropriate, the
parties may agree on more specific procedures for a defined period of time.
ARTICLE VI: SCHEDULING.
6.1/ONE LINE-ONE MILL. The parties agree that, as far as practically possible,
they will dedicate specific entire lines (ANC) to specific mills (ALCOA), and
specific mills (ALCOA) to specific entire lines (ANC). The list of lines to be
serviced by ALCOA under this Article 6, Section 6.1, in 1995, is set forth in
Exhibit B. The list of lines to be serviced by ALCOA under this Article 6,
Section 6.1, for subsequent years, will be agreed upon each year by the parties.
6.2/ANNUAL FORECASTS. As soon as practicable and for the first time within two
(2) weeks after the effective date of this Agreement, and thereafter by November
1 of each subsequent year, ANC shall
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 17/27
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<PAGE> 18
provide ALCOA with a schedule showing ANC's annual estimates for purchase of
each type of can-stock for the following year of the Agreement.
6.3/MONTHLY COMMITMENTS. ANC will use its best commercial efforts to schedule
and release in equal monthly shipments, with seasonality not to exceed plus or
minus 5%. Each calendar month (M), ANC will provide ALCOA with an estimate of
its requirements by type of can-stock and by delivery location for months M+2
and M+3. The estimate for month M+2 shall be considered as a firm commitment for
ALCOA to ship and for ANC to take delivery that can be modified only by
agreement between the parties. [Example: by the end of June, ANO shall give
ALCOA an estimate of can-stock delivery for the months of August (M+2) and
September (M+3). August volume will be firm delivery schedule, while September
shall still be considered an estimate.]
ARTICLE VII: QUALITY
7.1/SPECIFICATIONS. Specifications for can-stock to be delivered to ANC are set
forth in Exhibits A-1, A-2, and A-3. ANC may at any time change its
specifications for any type of can-stock provided ALCOA does not object in
writing to ANC, with a detailed explanation of the reasons for the objection,
within thirty (30) days of ANC's notification to ALCOA of the requested new
specifications. ALCOA may not object if ANC's specifications are within
specifications generally available to other aluminum container manufacturers
from ALCOA at the time of the change. A specification change shall be effective
for orders to be delivered sixty (60) days after the date of such change.
Can-stock covered by this Agreement shall meet ANC's specifications and
standards set forth in Exhibits A-1, A-2, and A-3, as modified from time to time
hereafter in accordance with this Article 7, Section 7.1.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 18/27
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7.2/REJECTIONS. Aluminum can-stock shall be subject to rejection by ANC if: (1)
it fails to meet ANC's specifications and standards, or (2) it fails to run in
comparably equipped ANC's plants in accordance with the standards typically
applied by ANC to its other can-stock suppliers at that or other plants, as more
generally described in Exhibit E. ALCOA and ANC shall work together in good
faith to determine whether the rejection was the fault of ALCOA or ANC, and, if
determined to be the fault of ALCOA, to agree upon the appropriate disposition
of the rejected material. In resolving the issues of responsibility and
disposition, the parties shall utilize the customs and procedures currently
utilized between them. Should ANC reject aluminum can-stock supplied by ALCOA
because of ALCOA's failure as described above, ANC shall, as agreed to by the
parties, either receive replacement aluminum can-stock of an equivalent type and
for the same amount of metal units, or a cash refund (or credit) in the full
amount of the purchase price or toll fee of the rejected can-stock. If ANC
receives a refund or a credit, the volume of rejected can-stock, whether
purchased on a straight sale or tolling basis, shall be at ANC's sole option
credited against ANC's volume commitment hereunder. At ALCOA's option, ANC will
either return such rejected aluminum can-stock to ALCOA, or ALCOA shall deduct
the scrap value of such can-stock received by ANC. If rejected can-stock was
acquired on a toll basis, and ANC receives a refund or credit, the parties shall
also agree upon an appropriate adjustment to such refund or credit to reflect
the value of the original scrap. ALCOA shall, on a case by case basis, give
consideration to reimbursing ANC for (1) ANC's reasonable direct cost associated
with the processing by ANC of defective material in accordance with practices
and procedures currently in place between the parties, (2) if relevant, ANC's
replacement of defective and/or rejected material with comparable substitute
material from another qualified supplier.
Attached hereto as Exhibit E is the procedure under which ALCOA may be
disqualified as a supplier of aluminum to ANC as a result of ALCOA's supply of
material which does not meet ANC's specifications and standards. Should ALCOA be
disqualified at any plant location pursuant to the attached procedure, ALCOA
will, within a three-month period after such disqualification, be given the
opportunity to re-qualify through ANC's normal re-qualification procedure
provided that ALCOA
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 19/27
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<PAGE> 20
has given reasonable assurances to ANC that the quality problem that gave rise
to ALCOA's disqualification has been resolved. In such event, ANC will be
relieved from the obligation to purchase the quantity of metal that would
normally have been purchased from ALCOA during the period of disqualification
(such quantity of metal being defined as the percentage of the annual volume for
that year that the period of disqualification bears to one year).
ARTICLE VIII: WARRANTY
8.1/WARRANTY. ALCOA warrants that the can-stock supplied hereunder will conform
to ANC's standards and specifications set forth in Exhibits A-1, A-2, and A-3,
as modified from time to time hereafter as provided in Article 7, Section 7.1,
that it will convey good title thereto, and that such can-stock will be
delivered from any lawful security interest or any other lien or encumbrance.
ALCOA makes no warranty that the can-stock shall be merchantable or fit for any
particular purpose. ALCOA makes no warranty, express or implied, except such as
is expressly set forth herein. ALCOA shall not be liable to ANC for any
incidental or consequential damage from any breach of this Agreement.
ARTICLE IX: FORCE MAJEURE. If the full or partial performance of this Agreement
by either party hereto (other than the payment of money due hereunder) is
delayed, interrupted, or prevented by reason of any strike, labor difficulty,
lockout, fire, explosion, fight, mobilization, war (declared or undeclared),
hostilities, riots, rebellion, revolution, blockade, act of any government or
agency or subdivision thereof, acts of public enemies, or other acts of God or
any other cause, whether or not of the nature or character specifically
enumerated above, which is beyond the reasonable control of such party, then:
(a) such party shall give notice to the other of the existence of the Force
Majeure event and the impact of the event on its North American facilities;
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 20/27
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<PAGE> 21
(b) such party shall be excused from the performance of this Agreement (other
than the payment of monies due hereunder) while and to the extent that such
party is delayed, interrupted or prevented from so performing by one or more of
such causes; and
(c) the performance of this Agreement shall be resumed as soon as practicable
after such disability is removed.
If a party is only partially disabled by an event of force Majeure, the disabled
party's obligations shall be partially reduced by the amount of the
proportionate effect of the disabling event on all of that party's North
American facilities.
ARTICLE X: DEFAULT
10.1/UNEXCUSED FAILURE TO SUPPLY. Unless otherwise excused due to Force Majeure,
if ALCOA fails to supply can-stock to ANC in accordance with the terms of an
acknowledged order, and, as a result of this failure, ALCOA either misses a
delivery or delivers non-conforming can-stock to ANC, ANC shall notify ALCOA
within ten (10) business days of this failure. Upon receipt of this notice,
ALCOA and ANC shall meet and discuss the prompt replacement shipment of
can-stock meeting the specification from ALCOA's facilities. In the event that
the parties cannot work out satisfactory arrangements for replacement can-stock,
the parties shall discuss arrangements for substitute can-stock from third
parties if necessary to avoid production interruptions of ANC's facilities. The
replacement of can-stock by ALCOA or substitute of can-stock from third parties
shall constitute ANC's exclusive remedy for ALCOA's un-excused failure to supply
can-stock pursuant to the terms of an acknowledged order. The non-conforming
can-stock shall then be returned to ALCOA at ALCOA's cost and expense.
10.2/OTHER DEFAULT. Any other material failure of either party to perform or
observe its obligations under this Agreement shall be a default of this
Agreement. Unless this default is excused by Force
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 21/27
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<PAGE> 22
Majeure or diligent action is taken to remedy this failure within thirty (30)
days after notice by the non-defaulting party to the defaulting party specifying
the default, then the non-defaulting party shall have such remedy or remedies as
are provided by statute, or by law, equity or in bankruptcy or insolvency
proceedings.
10.3/EFFECT ON PARTIES. Subject to and without limitation of paragraph 10.4
below, in the event of such a termination:
(a) ALCOA shall return to ANC any property belonging to ANC at ALCOA's
manufacturing facilities; the cost of such return shall be the responsibility of
ALCOA in the event of an ALCOA default and ANC in the event of an ANC default;
(b) The parties shall pay one another any amounts that may be due and unpaid
within thirty (30) days after any such termination.
10.4/NO PREJUDICE. Except as otherwise provided in this Article 10, termination
of this Agreement under the preceding paragraphs shall be without prejudice to
any right or remedy available to either party under the provisions of this
Agreement, or any law, statute or regulation. Upon termination of this Agreement
by either of the parties, any payment to be made under this Agreement shall
become due immediately.
ARTICLE XI: MISCELLANEOUS
11.1/INTEGRATION AND MODIFICATION. This Agreement forms the entire agreement
between the parties as to the subject matter of this Agreement, and all prior
agreements (including without limitation the Supply Agreement dated June 1,
1990), commitments, representations, writings, and discussions are merged into
and superseded by this Agreement. This Agreement may not be released,
discharged, changed, or modified in any manner except by an instrument in
writing signed by a duly authorized officer or representative of each of the
parties.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 22/27
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<PAGE> 23
11.2/PURCHASE AND SALES FORMS. No printed terms or conditions appearing on any
sales acknowledgment of ALCOA or shipment release or purchase order forms of ANC
shall govern the purchase hereunder, and the terms and conditions of this
Agreement shall be controlling.
11.3/WAIVERS. The failure of either 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
such provisions nor in any way to affect the validity of this Agreement or any
part thereof, nor the right of any party thereafter to enforce each and every
such provision. No waiver of any breach of this Agreement shall be held to be a
waiver of any other or subsequent breach.
11.4/ASSIGNMENT AND DELEGATION. This Agreement shall inure to the benefit of and
be binding upon the parties hereto and their respective successors and assigns.
Neither party may assign this Agreement or any right arising hereunder, nor
delegate any duty or obligation arising hereunder, without the prior written
consent of the other party.
11.5/NOTICES. All notices and other communications provided for hereunder shall
be in writing and given by registered or certified mail, or responsible
overnight courier, addressed as provided below, with acknowledgment of receipt
requested, or by telex, telegram, cable or facsimile, sent or delivered to the
addressee below, or, as to each party, at such addresses as shall be designated
by such party hereafter in a written notice to the other. All such notices and
communications shall be effective when hand delivered or, in the case of notice
by facsimile, on the day of receipt if received prior to 5:00p.m. EST on a
working day or on the next working day if received after 5:00p.m. EST on a
working day, provided that the sender's copy includes the appropriate
acknowledgment of receipt by the receiver's facsimile machine.
<TABLE>
<S> <C>
If to ALCOA: Aluminum Company of America If to ANC: American National Can Co.
Rigid Packaging Division 8770 West Bryn Mawr
1100 Riverview Tower Chicago, Illinois 60631
900 South Gay Street Attention: Corporate Secretary
KNOXVILLE, TN 37902
</TABLE>
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 23/27
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<PAGE> 24
Attention: President
11.6/AUDITS. ANC shall be entitled to make physical inventory audits of its
property in ALCOA's possession at any time, upon reasonable notice, during
ALCOA's normal business hours. In addition, ANC may perform reasonable quality
audits of ALCOA's systems, procedures and processes to assure that can-stock
produced hereunder meets the specifications and other requirements contained in
this Agreement.
11.7/CONFIDENTIALITY. ALCOA shall hold in confidence during and for a period of
10 years after the term of this Agreement, shall not disclose to anyone other
than employees of ALCOA who have a need to know, and shall use only for ANC's
benefit, any confidential technical information (including, without limitation,
specifications, drawings, designs, samples and models) furnished by ANC in
connection with this Agreement; provided that no document furnished to ALCOA by
ANC shall be deemed to be confidential unless it is marked "CONFIDENTIAL" or the
equivalent when furnished.
ANC shall hold in confidence during and for a period of 10 years after the term
of this Agreement, shall not disclose to anyone other than employees of ANC who
have a need to know, and shall use only for ALCOA's benefit, any confidential
technical information (including, without limitation, specifications, drawings,
designs, samples and models) furnished by ALCOA in connection with this
Agreement; provided that no document furnished to ANC by ALCOA shall be deemed
to be confidential unless it is marked "CONFIDENTIAL", "STRICTLY PRIVATE", or
the equivalent when furnished.
Neither party shall have liability for disclosures of information otherwise
prohibited under this Section if the information:
(a) was already in the public domain when disclosed; or
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 24/27
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<PAGE> 25
(b) was obtained lawfully from a third party not under a confidentiality
obligation to either ANC or ALCOA; or
(c) was disclosed in accordance with requirements imposed by any applicable law,
rule or regulation or by any court or regulatory agency with jurisdiction over
the disclosing party, provided that the disclosing party reasonably assisted and
cooperated with the other party in attempting to preserve the confidentiality of
the information involved, including without limitation
(I) immediately notifying the other party upon learning of any such
disclosure requirement and
(II) not disclosing the information earlier than required.
For purposes of this Agreement, subject to the exceptions set forth in the
preceding sentence, information regarding a party's pricing, production, raw
materials, labor and other costs, suppliers, customers and technology, whether
or not labeled or described by such party as "confidential," shall be considered
confidential information and subject to this Section in addition to any other
information identified from time to time by such party as "confidential."
(d) is independently developed by the recipient.
11.8/HEADINGS. The captions, titles and headings described in this Agreement
have been inserted as a matter of convenience and reference only and do not
limit or describe the scope of this Agreement or otherwise control or affect the
interpretation of this Agreement.
11.9/APPLICABLE LAW. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Illinois.
11.10/SEVERABILITY. In the event any provision of this Agreement (whether a
paragraph, sentence or a portion thereof) is determined by a court of competent
jurisdiction to be null and void or unenforceable, such provision shall be
deemed to be severed, and the remaining provisions of this Agreement shall
remain in full force and effect.
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11.11/INDEPENDENCE OF PARTIES, FURTHER ASSURANCES AND CERTAIN REPRESENTATIONS.
(a) The parties acknowledge that the contractual relationship established
hereunder shall be one of independent contractors. ANC and ALCOA shall not, by
execution of this Agreement, be deemed partners, joint venturers or agents for
one another for any purpose whatsoever.
(b) Each party warrants to the other that:
(I) it has the corporate power and authority to enter into this Agreement
and to carry out the transactions contemplated hereby, and
(II) this Agreement has been duly executed and delivered on its behalf.
(c) Each of the parties agrees to furnish to the other such additional documents
and instruments as shall be reasonably requested to effectuate the purposes of
this Agreement.
11.12/LEGISLATIVE INCREASES. During the term of this Agreement, federal, state
or local legislative changes could have a material impact on ALCOA's costs of
supplying can-stock to ANC. All prices and fees are subject to increase by ALCOA
to reflect these cost increases, provided and only to the extent that these
costs increases are also reflected in the prices of can-stock available in the
market, and subject to the provisions of Article 5, Sections 5.3-d, 5.4-d,
5.5-d, 5.6-d, 5.7 and 5.8 above. The parties shall meet and discuss the impact
of such changes and the actions to be taken to minimize the cost of compliance.
11.13/HARDSHIP. If at any time or from time to time during the term of this
Agreement, without default of the party concerned, an intervening event or
change of circumstances occurs which is beyond the said party's control, when
acting reasonably and prudently, such that the consequences and effects of which
create a set of circumstances which are fundamentally different from what was
contemplated by the parties at the time of entering into this Agreement. Upon
the occurrence of such an event, the party claiming that it is placed in such a
position may, by notice, request the other to meet to determine if said
occurrence has happened and, if so, agree upon what, if any, adjustment in the
price then in force under this Agreement and/or other terms and conditions
hereof is justified under the circumstances, in fairness to the parties, to
alleviate the consequences and effects of said occurrence.
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<PAGE> 27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first written above.
WITNESS ALUMINUM COMPANY OF AMERICA
/s/ Illegible BY: /s/ George Bergerson
WITNESS AMERICAN NATIONAL CAN COMPANY
/s/ Illegible BY: /s/ Edward Lapekas
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) 27/27
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<PAGE> 28
LIST OF EXHIBITS IDENTIFIED IN THIS AGREEMENT
Exhibit A-1 - ANC standards and specifications for body-stock.
Exhibit A-2 - ANC standards and specifications for end-stock.
Exhibit A-3 - ANC standards and specifications for tab-stock.
Exhibit B - Ship to locations for year 1995.
Exhibit C - ALCOA's specifications for each type of metal unit used for toll
conversion into can-stock.
Exhibit D - List of ANC's current beverage can manufacturing facilities in North
America as of January 1st, 1994.
Exhibit E - Disqualification procedure.
Exhibit F - Letter from ANC to ALCOA giving certain indications in relationship
with potential volumes and mix allocation for years 1996 and 1997.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 29
EXHIBITS A-1, A-2, AND A-3: ANC STANDARDS AND SPECIFICATIONS
Exhibit A-1 - ANC standards and specifications for body-stock (attached).
Exhibit A-2 - ANC standards and specifications for end-stock (attached).
Exhibit A-3 - ANC standards and specifications for tab-stock (attached).
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 30
EXHIBIT A-1
ANC STANDARDS AND SPECIFICATIONS FOR BODY-STOCK
Exhibit A-1-a: 3004 Alloy H19 Temper (1 page, attached)
Exhibit A-1-b: 3104 Alloy Hl9 Temper (1 page, attached)
Exhibit A-1-c: 3204 Alloy Hl9 Temper (1 page, attached)
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 31
NUMBER: RD/S-88-005A Page 1 of 1
DATE: 09/23/88
REVISED: 12/07/93
EXHIBIT A-1-a
AMERICAN NATIONAL CAN
CORPORATE R&D
MATERIALS SPECIFICATION SHEET
<TABLE>
<CAPTION>
Final After Signature Approvals
====================================================================================================================
Material Identification (Name, Code, Mfgr. Etc.)
- ------------------------------------------------
Aluminum: 3004 Alloy H19 Temper. Application: Drawn and Ironed Beverage Can Bodies.
====================================================================================================================
Primary (Fixed) Specifications:
- ------------------------------
<S> <C>
1. Tolerances:
a) Gauge: plus/minus 0.0002"
b) Coil Width: -0.000", +0.125"
d) Camber: 0.015" maximum in 30", 1/4" maximum in 10 ft.
2. Mechanical Properties:
a) Yield Strength: 42.5 ksi maximum as received and 36.0 ksi minimum after 400 degrees F
bake for 10 minutes.
b) Elongation in 2": 3% minimum as received
3. Earing: 2.5% maximum at a 42% draw reduction using a controlled gap hold down to
minimize pinching of ears.
4. Surface Roughness: 15-25 microinches (AA).
5. Chemical Composition (% maximum unless shown otherwise): 0.30 Si, 0.70 Fe, 0.25 Cu, 1.0-1.5 Mn, 0.8-1.3 Mg,
0.25 Zn, 0.0001 Be, others 0.05 each and 0.15 total, balance A1.
====================================================================================================================
Secondary (Variable) Specifications:
- -----------------------------------
1. Coils are to be relubed with DTI 5600 PL at 25 plus/minus 10 mg/sq.ft./side. Forest Park requires Nalco
6468AB at 25 plus/minus 10 mg/sq.ft./side. Other relubes may only be supplied when approved by Development
and/or Materials Process Engineering.
====================================================================================================================
Remarks:
- -------
1. Presence of oxides, inclusions, laminations, slivers, rolled-over scratches, rolled-in dirt, abrasions,
pinholes, water stain corrosion and stains may be cause for rejection.
2. Material with inadequate formability for drawing and ironing is subject to rejection.
3. Flatness/shape inadequate to permit feeding in the cupper press is subject to rejection.
4. ASTM B557 and E8 apply.
====================================================================================================================
Approvals (As Applicable)
====================================================================================================================
Development CREG MFOP MTMG
====================================================================================================================
By /s/ Illegible By /s/ Illegible By /s/ Illegible By /s/ Illegible
------------------------ ------------------------ ------------------------ ------------------------
Date 12/14/93 Date 2/9/94 Date 1/7/94 Date 12/14/93
---------------------- ---------------------- ---------------------- ----------------------
====================================================================================================================
====================================================================================================================
</TABLE>
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 32
NUMBER: RD/S-88-005A Page 1 of 1
DATE: 09/23/88
REVISED: 12/07/93
EXHIBIT A-1-b
AMERICAN NATIONAL CAN
CORPORATE R&D
MATERIALS SPECIFICATION SHEET
<TABLE>
<CAPTION>
Final After Signature Approvals
====================================================================================================================
Material Identification (Name, Code, Mfgr. Etc.)
- ------------------------------------------------
Aluminum: 3004 Alloy H19 Temper. Application: Drawn and Ironed Beverage Can Bodies.
====================================================================================================================
Primary (Fixed) Specifications:
- ------------------------------
<S> <C>
1. Tolerances:
a) Gauge: plus/minus 0.0002"
b) Coil Width: -0.000", +0.125"
d) Camber: 0.015" maximum in 30", 1/4" maximum in 10 ft.
2. Mechanical Properties:
a) Yield Strength: 42.5 ksi maximum as received and 36.0 ksi minimum after 400 degrees F
bake for 10 minutes.
b) Elongation in 2": 3% minimum as received
3. Earing: 2.5% maximum at a 42% draw reduction using a controlled gap hold down to
minimize pinching of ears.
4. Surface Roughness: 15-25 microinches (AA).
5. Chemical Composition (% maximum unless shown otherwise): 0.60 Si, 0.80 Fe, 0.05-0.25 Cu, 0.8-1.4 Mn, 1.3-1.5
Mg, 0.25 Zn, 0.10 Ti, 0.0001 Be, others 0.05 each and 0.15 total, balance A1.
====================================================================================================================
Secondary (Variable) Specifications:
- -----------------------------------
1. Coils are to be relubed with DTI 5600 PL at 25 plus/minus 10 mg/sq.ft./side. Forest Park requires Nalco
6468AB at 25 plus/minus 10 mg/sq.ft./side. Other relubes may only be supplied when approved by Development
and/or Materials Process Engineering.
====================================================================================================================
Remarks:
- -------
1. Presence of oxides, inclusions, laminations, slivers, rolled-over scratches, rolled-in dirt, abrasions,
pinholes, water stain corrosion and stains may be cause for rejection.
2. Material with inadequate formability for drawing and ironing is subject to rejection.
3. Flatness/shape inadequate to permit feeding in the cupper press is subject to rejection.
4. ASTM B557 and E8 apply.
====================================================================================================================
Approvals (As Applicable)
====================================================================================================================
Development CREG MFOP MTMG
====================================================================================================================
By /s/ Illegible By /s/ Illegible By /s/ Illegible By /s/ Illegible
------------------------ ------------------------ ------------------------ ------------------------
Date 12/14/93 Date 2/9/94 Date 1/7/94 Date 12/14/93
---------------------- ---------------------- ---------------------- ----------------------
====================================================================================================================
</TABLE>
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 33
NUMBER: RD/S-88-005A Page 1 of 1
DATE: 01/02/93
REVISED: 12/07/93
EXHIBIT A-1-c
AMERICAN NATIONAL CAN
CORPORATE R&D
MATERIALS SPECIFICATION SHEET
<TABLE>
<CAPTION>
Final After Signature Approvals
====================================================================================================================
Material Identification (Name, Code, Mfgr. Etc.)
- ------------------------------------------------
Aluminum: 3004 Alloy H19 Temper. Application: Drawn and Ironed Beverage Can Bodies.
====================================================================================================================
Primary (Fixed) Specifications:
- ------------------------------
<S> <C>
1. Tolerances:
a) Gauge: plus/minus 0.0002"
b) Coil Width: -0.000", +0.125"
d) Camber: 0.015" maximum in 30", 1/4" maximum in 10 ft.
2. Mechanical Properties:
a) Yield Strength: 44.0 ksi maximum as received and 37.5 ksi minimum after 400 degrees F
bake for 10 minutes.
b) Elongation in 2": 3% minimum as received
3. Earing: 2.5% maximum at a 42% draw reduction using a controlled gap hold down to
minimize pinching of ears.
4. Surface Roughness: 15-25 microinches (AA).
5. Chemical Composition (% maximum unless shown otherwise): 0.60 Si, 0.80 Fe, 0.05-0.25 Cu, 0.8-1.4 Mn, 1.3-1.5
Mg, 0.25 Zn, 0.10 Ti, 0.0001 Be, others 0.05 each and 0.15 total, balance A1.
====================================================================================================================
Secondary (Variable) Specifications:
- -----------------------------------
1. Coils are to be relubed with DTI 5600 PL at 25 plus/minus 10 mg/sq.ft./side. Forest Park requires Nalco
6468AB at 25 plus/minus10 mg/sq.ft./side. Other relubes may only be supplied when approved by Development
and/or Materials Process Engineering.
====================================================================================================================
Remarks:
- -------
1. Presence of oxides, inclusions, laminations, slivers, rolled-over scratches, rolled-in dirt, abrasions,
pinholes, water stain corrosion and stains may be cause for rejection.
2. Material with inadequate formability for drawing and ironing is subject to rejection.
3. Flatness/shape inadequate to permit feeding in the cupper press is subject to rejection.
4. ASTM B557 and E8 apply.
====================================================================================================================
Approvals (As Applicable)
====================================================================================================================
Development CREG MFOP MTMG
====================================================================================================================
By /s/ Illegible By /s/ Illegible By /s/ Illegible By /s/ Illegible
------------------------ ------------------------ ------------------------ ------------------------
Date 12/14/93 Date 2/9/94 Date 1/10/93 Date 12/14/93
---------------------- ---------------------- ---------------------- ----------------------
====================================================================================================================
</TABLE>
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 34
EXHIBIT A-2
ANC STANDARDS AND SPECIFICATIONS FOR END-STOCK
Exhibit A-2-a: 5182 Alloy H19 Temper Coated (2 pages, attached)
Exhibit A-2-b: 5182 Alloy H19 Temper Bare (1 page, attached)
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 35
NUMBER: RD/S-88-013A Page 1 of 2
DATE: 09/23/88
REVISED: 01/02/93
EXHIBIT A-2-a
AMERICAN NATIONAL CAN
CORPORATE R&D
MATERIALS SPECIFICATION SHEET
<TABLE>
<CAPTION>
Final After Signature Approvals
====================================================================================================================
Material Identification (Name, Code, Mfgr. Etc.)
- ------------------------------------------------
Aluminum: 5182 Alloy H19 Temper and Coil Coated.
Application: Coil Coated Beer/Beverage End Stock for Wide Shell Press.
====================================================================================================================
Primary (Fixed) Specifications:
- ------------------------------
<S> <C>
1. Tolerances:
a) Gauge: plus/minus 0.0002"
b) Coil Width: -0", +1/8"
c) Edge Burr: 0.002" maximum
d) Camber: 0.015" maximum in 30", 0.250" maximum in 10 ft.
e) Flatness: 1/8" maximum height for cycles up to 18" long.
f) Edge Wave: Any cycle less than 5" is unacceptable.
g) Crossbow: A rise exceeding 0.125" is unacceptable.
2. Mechanical Properties (After Coil Coating):
a) Yield Strength: 47-52 ksi*
b) Elongation in 2": 6% minimum
*Yield strength when measured at 45 degrees to rolling direction.
3. Chemical Composition (% maximum unless shown otherwise):
0.20 Si, 0.35 Fe, 0.15 Cu, 0.20-0.50 Mn, 4.00-5.00 Mg, 0.10 Cr, 0.25 Zn, 0.10 Ti, 0.0001 Be, others 0.05 each
and 0.15 total, balance A1.
====================================================================================================================
Secondary (Variable) Specifications:
- -----------------------------------
1. Coil coated aluminum beer/beverage end stock is supplied, cleaned and chemically treated with chromate-
phosphate treatment at a weight of 4-9 mg/sq.ft./side or titanium based treatment prior to coil coating.
2. Organic coatings should be as follows (including qualified equivalents with same dried film):
Application/Color Exterior Coat (mg/4 sq.in.) Interior Coat (mg/4 sq.in.)
----------------- --------------------------- ---------------------------
Beverage Clear V S9835-007 @ 8, -2, +4 V S9835-007 @ 32, -3, +6
V S6839-020 @ 8, -2, +4 D 8800-A04M @ 32, -3, +6
Coke Gold V 90X043 @ 8, -2, +4 V S9835-007 @ 32, -3, +6
V S6839-535 @ 8, -2, +4 D 8800-A04M @ 32, -3, +6
Pepsi Gold V S9835-512 @ 8, -2, +4 V S9835-007 @ 32, -3, +6
V S9829-521 @ 8, -2, +4 D 8800-A04M @ 32, -3, +6
7-Up Gold V 85X005 @ 8, -2, +4 D 8800-A04M @ 32, -3, +6
====================================================================================================================
</TABLE>
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 36
NUMBER: RD/S-88-013A Page 2 of 2
DATE: 09/23/88
REVISED: 01/02/93
EXHIBIT A-2-a
AMERICAN NATIONAL CAN
CORPORATE R&D
MATERIALS SPECIFICATION SHEET
<TABLE>
<CAPTION>
Final After Signature Approvals
====================================================================================================================
Secondary (Variable) Specifications: (Continued)
- -----------------------------------
Application/Color Exterior Coat (mg/4 sq.in.) Interior Coat (mg/4 sq.in.)
----------------- --------------------------- ---------------------------
<S> <C> <C>
Beer Clear V S9835-007 @ 8, -2, +4 V S9835-007 @ 8, -2, +4
V S6839-020 @ 8, -2, +4 V S6839-020 @ 8, -2, +4
P (E) Coat @ 8, -2, +4 P (E) Coat @ 8, -2, +4
Heileman Gold V 90X044 @ 8, -2, +4 V S9835-007 @ 8, -2, +4
V 85X005 @ 8, -2, +4 V S6839-020 @ 8, -2, +4
Miller Gold V S9835-512 @ 8, -2, +4 V S9835-007 @ 8, -2, +4
V S9429-521 @ 8, -2, +4 V S6839-020 @ 8, -2, +4
Pabst Gold V S9835-512 @ 8, -2, +4 V S9835-007 @ 8, -2, +4
V S9429-521 @ 8, -2, +4 V S6839-020 @ 8, -2, +4
Genesee Gold V S9835-512 @ 10, -2, +4 V S9835-007 @ 8, -2, +4
V S9429-521 @ 10, -2, +4 V S6839-020 @ 8, -2, +4
AB Gold P (E) Coat @ 8, -2, +4 P (E) Coat @ 8, -2, +4
Note: V = Valspar; D = Dexter; P = PPG
3. Exterior Lubricant:
Petrolatum at 10 plus/minus 5 mg/sq.ft./side for pigmented gold coatings only.
Petrolatum at 6 plus/minus 3 mg/sq.ft./side for all others.
====================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================
Remarks:
- -------
<S> <C>
1. Presence of oxides, inclusions, large carbides, laminations, slivers, rolled-over scratches or gouges,
rolled-in defects, abrasions, pinholes and stains, etc., may be cause for rejection.
2. Material must be able to be fed into shell press, formed into basic ends and converted into finished ends
without fracturing.
3. ASTM B557 and E8 apply.
====================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
====================================================================================================================
Approvals (As Applicable)
====================================================================================================================
READ CREG MFOP MTMG
====================================================================================================================
<S> <C> <C> <C>
By /s/ Illegible By /s/ Illegible By /s/ Illegible By /s/ Illegible
------------------------ ------------------------ ------------------------ ------------------------
Date 12/21/92 Date 1/4/93 Date 12/19/92 Date 1/6/93
---------------------- ---------------------- ---------------------- ----------------------
====================================================================================================================
</TABLE>
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 37
NUMBER: RD/S-88-012A Page 1 of 1
DATE: 09/23/88
REVISED: 01/02/93
EXHIBIT A-2-b
AMERICAN NATIONAL CAN
CORPORATE R&D
MATERIALS SPECIFICATION SHEET
<TABLE>
<CAPTION>
Final After Signature Approvals
====================================================================================================================
Material Identification (Name, Code, Mfgr. Etc.)
- ------------------------------------------------
Aluminum: 5182 Alloy H19 Temper. Application: Plain Beer/Beverage End Stock for Coil or Sheet
Coating.
====================================================================================================================
Primary (Fixed) Specifications:
- ------------------------------
<S> <C>
1. Tolerances:
a) Gauge: plus/minus 0.0002"
b) Coil Width: -0.000", +0.125"
c) Edge Burr: 0.002" maximum
d) Camber: 0.015" maximum in 30", 0.250" maximum in 10 ft.
e) Flatness: 1/8" maximum height for cycles up to 18" long.
f) Edge Wave: Any cycle less than 5" is unacceptable.
g) Crossbow: A rise exceeding 1/8" is unacceptable.
2. Mechanical Properties (After 10 Minutes at 360 degrees F):
a) Yield Strength: 47-52 ksi*
b) Elongation in 2": 6% minimum
*Yield strength when measured at 45 degrees to rolling direction.
3. Chemical Composition (% maximum unless shown otherwise):
0.20 Si, 0.35 Fe, 0.15 Cu, 0.20-0.50 Mn, 4.0-5.00 Mg, 0.10 Cr, 0.25 Zn, 0.10 Ti, 0.0001 Be, others 0.05 each
and 0.15 total, balance A1.
====================================================================================================================
Secondary (Variable) Specifications:
- -----------------------------------
Plain aluminum beverage end stock is supplied, cleaned, chemically treated with A272A or equivalent chromate-
phosphate treatment at a weight of 3-9 mg/sq.ft./side and is DOS reoiled at 0.9 plus/minus 0.3 mg/sq.ft./side.
====================================================================================================================
Remarks:
- -------
1. Presence of oxides, inclusions, slivers, rolled-over scratches, rolled-in dirt, abrasions, pinholes and
stains may be cause for rejection.
2. Material must be able to be formed into basic ends and converted into finished ends without fracturing,
otherwise it will be subject to rejection.
3. ASTM B557 and E8 apply.
====================================================================================================================
Approvals (As Applicable)
====================================================================================================================
READ CREG MFOP MTMG
====================================================================================================================
By /s/ Illegible By /s/ Illegible By /s/ Illegible By /s/ Illegible
------------------------ ------------------------ ------------------------ ------------------------
Date 12/21/92 Date 1/4/93 Date 12/17/92 Date 1/4/93
---------------------- ---------------------- ---------------------- ----------------------
====================================================================================================================
</TABLE>
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 38
EXHIBIT A-3
ANC STANDARDS AND SPECIFICATIONS FOR TAB-STOCK
Exhibit A-3-a: 5042 Alloy H19 Temper (1 page, attached)
Exhibit A-3-b: 5082 Alloy H19 and H251 Temper (1 page, attached)
Exhibit A-3-c: 5182 Alloy H19 Temper (2 pages, attached)
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 39
NUMBER: RD/S-88-001A Page 1 of 1
DATE: 09/23/88
REVISED: 01/02/93
EXHIBIT A-3-a
AMERICAN NATIONAL CAN
CORPORATE R&D
MATERIALS SPECIFICATION SHEET
<TABLE>
<CAPTION>
Final After Signature Approvals
====================================================================================================================
Material Identification (Name, Code, Mfgr, Etc.)
- ------------------------------------------------
Aluminum: 5042 Alloy H19 Temper.
Application: Plain Tab Stock for Beverage Ends.
====================================================================================================================
Primary (Fixed) Specifications:
- ------------------------------
<S> <C>
1. Tolerances:
a) Gauge: plus/minus 0.0003 for 0.0140" and lower gauges
-0.0003", +0.0004" for gauges over 0.0140"
b) Coil Width: plus/minus 0.007"
c) Edge Burr: 0.002" maximum
d) Camber: 0.050" maximum in 30", 0.250" maximum in 10 ft.
2. Mechanical Properties (As-Received) H19 Temper:
Yield Strength: 44-52 ksi
Tensile Strength: 48-58 ksi
Elongation in 2": 2% minimum
3. Chemical Composition (% maximum unless shown otherwise):
0.20 Si, 0.35 Fe, 0.15 Cu, 0.20-0.50 Mn, 3.0-4.0 Mg, 0.10 Cr, 0.25 Zn, 0.10 Ti, 0.0001 Be, others 0.05 each
and 0.15 total, balance A1.
====================================================================================================================
Secondary (Variable) Specifications:
- -----------------------------------
1. Plain aluminum tab stock is supplied cleaned of residual rolling oils and other soils and is DOS reoiled at
0.8 plus/minus 0.4 mg/sq.ft./side.
====================================================================================================================
Remarks:
- -------
1. Presence of oxides, inclusions, laminations, slivers, rolled-over scratches, rolled-in dirt, abrasions,
pinholes and stains may be cause for rejection.
2. ASTM B557 and E8 apply.
====================================================================================================================
Approvals (As Applicable)
====================================================================================================================
READ CREG MFOP MTMG
====================================================================================================================
By /s/ Illegible By /s/ Illegible By /s/ Illegible By /s/ Illegible
------------------------ ------------------------ ------------------------ ------------------------
Date 12/21/92 Date 1/4/93 Date 12/17/92 Date 1/4/93
---------------------- ---------------------- ---------------------- ----------------------
====================================================================================================================
</TABLE>
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 40
NUMBER: RD/S-88-002A Page 1 of 1
DATE: 09/23/88
REVISED: 01/02/93
EXHIBIT A-3-b
AMERICAN NATIONAL CAN
CORPORATE R&D
MATERIALS SPECIFICATION SHEET
<TABLE>
<CAPTION>
Final After Signature Approvals
====================================================================================================================
Material Identification (Name, Code, Mfgr, Etc.)
- ------------------------------------------------
Aluminum: 5082 Alloy H19 Temper and H251 Temper.
Application: Plain Tab Stock for Beverage Ends.
====================================================================================================================
Primary (Fixed) Specifications:
- ------------------------------
<S> <C>
1. Tolerances:
a) Gauge: plus/minus 0.0003" for 0.0140" and lower gauges
-0.0003", +0.0004" for gauges over 0.0140"
b) Coil Width: plus/minus 0.007"
c) Edge Burr: 0.002" maximum
d) Camber: 0.050" maximum in 30", 0.250" maximum in 10 ft.
2. Mechanical Properties (As-Received) H19 Temper: H251 Temper
----------- -----------
a) Yield Strength: 48-58 ksi 29-37 ksi
b) Tensile Strength: 52-62 ksi 42-50 ksi
c) Elongation in 2": 2% minimum 10% minimum
3. Chemical Composition (% maximum unless shown otherwise):
0.20 Si, 0.35 Fe, 0.15 Cu, 0.15 Mn, 4.0-5.0 Mg, 0.15 Cr, 0.25 Zn, 0.10 Ti, 0.0001 Be, others 0.05 each and
0.15 total, balance A1.
====================================================================================================================
Secondary (Variable) Specifications:
- -----------------------------------
1. Plain aluminum tab stock is supplied cleaned of residual rolling oils and other soils and is DOS reoiled at
0.8 plus/minus 0.4 mg/sq.ft./side.
====================================================================================================================
Remarks:
- -------
1. Presence of oxides, inclusions, laminations, slivers, rolled-over scratches, rolled-in dirt, abrasions,
pinholes and stains may be cause for rejection.
2. ASTM B557 and E8 apply.
====================================================================================================================
Approvals (As Applicable)
====================================================================================================================
READ CREG MFOP MTMG
====================================================================================================================
By /s/ Illegible By /s/ Illegible By /s/ Illegible By /s/ Illegible
------------------------ ------------------------ ------------------------ ------------------------
Date 12/21/92 Date 1/4/93 Date 12/17/92 Date 1/3/93
---------------------- ---------------------- ---------------------- ----------------------
====================================================================================================================
</TABLE>
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 41
NUMBER: RD/S-93-015A (Page 1 of 2)
DATE: 06/14/93
REVISED:
EXHIBIT A-3-c
AMERICAN NATIONAL CAN
MATERIAL SPECIFICATION SHEET
<TABLE>
<CAPTION>
Final After Signature Approvals
====================================================================================================================
Material Identification (Name, Code, Mfgr, Etc.)
- ------------------------------------------------
Aluminum: 5182 Alloy H19 Temper. USA
Application: CAT99 Tab Stock for Beverage and Beer Ends.
====================================================================================================================
Primary (Fixed) Specifications:
- ------------------------------
<S> <C>
1. Tolerances (inch):
a) Gauge: plus/minus 0.0003"
b) Coil Width: plus/minus 0.007"
c) Edge Burr: 0.002 maximum
d) Camber: 0.050 maximum in 30"
0.250 maximum in 10 ft.
2. Mechanical Properties (As-Received):
H19 Temper: Yield Strength: 49-55.5 ksi
Tensile Strength: 55-62 ksi
Elongation in 2": 5% minimum
3. Chemical Composition (% maximum unless shown otherwise):
0.20 Si, 0.35 Fe, 0.15 Cu, 0.20-0.50 Mn, 4.0-5.0 Mg, 0.10 Cr, 0.25 Zn, 0.10 Ti, 0.0001 Be, others 0.05 each
and 0.15 total, balance A1.
====================================================================================================================
Secondary (Variable) Specifications:
- -----------------------------------
1. Plain aluminum tab stock is supplied cleaned of residual rolling oils and other soils and is DOS reoiled at
0.8 plus/minus 0.4 mg/sq.ft./side.
====================================================================================================================
Amendments:
- ----------
Alcoa C232-H3E30 is an acceptable replacement for 5182-H19 (in the H3E30 temper only).
Remarks:
- -------
1. Presence of oxides, inclusions, laminations, slivers, rolled-over scratches, rolled-in dirt, abrasions,
pinholes and stains may be cause for rejection.
2. ASTM B557 and E8 apply.
====================================================================================================================
Approvals (As Applicable)
====================================================================================================================
BTEC CREG MFOP MTMG
====================================================================================================================
/s/ Illegible /s/ Illegible /s/ Illegible /s/ Illegible
- -------------------------- -------------------------- -------------------------- --------------------------
Signature Signature Signature Signature
Date 7/1/93 Date 9/1/93 Date 8/12/93 Date 7/1/93
---------------------- ---------------------- ---------------------- ----------------------
====================================================================================================================
</TABLE>
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 42
EXHIBIT B: list of 1995 ANC's ship-to locations
CHICAGO, IL
MEMPHIS, TE
McINTYRE, CO
BIRMINGHAM, AL
St. LOUIS, MO
VALPARAISO, IN
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 43
EXHIBIT C: ALCOA's specifications for each type of metal unit
used for toll conversion into can-stock
INGOT (P1020A)
Chemical composition:
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
element element
-------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Al less than 99.7% Ga less than 0.04%
Si less than 0.10% As less than 0.0050%
Fe less than 0.20% Na less than 0.004%
Be less than 0.0001% Va less than 0.03%
Zn less than 0.010% Li less than 0.0001%
Pb less than 0.0015%
Cd less than 0.0003% others (each) less than or equal to 0.03%
Hg less than 0.0001% others (total) less than or equal to 0.10%
-------------------------------------------------------------------------------------------
</TABLE>
Aspect ratio:
P1020A ingot in sow or tee form shall have an aspect ratio (ratio of second
smallest dimension divided by smallest dimension) of not less than 3.
SCRAP
Attached (7 pages)
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 44
Aluminum Company of America EFFECTIVE 1993-01-01
Rigid Container Sheet Scrap SUPERSEDES PREVIOUS PAGE DATED 1986-01-01
SELF-GENERATED SCRAP - SECTION RPD941C
TABLE OF CONTENTS
Page
SCRAP - SELF GENERATED
General Information...............................................3
Packing........................................................3, 4
Loading - Rail....................................................5
Loading - Truck...................................................6
Shipment Notice, Manifest and Bill of Lading...................7, 8
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 45
Aluminum Company of America EFFECTIVE 1993-01-01
Rigid Container Sheet Scrap SUPERSEDES PREVIOUS PAGE DATED 1986-01-01
SELF-GENERATED SCRAP - SECTION RPD941C
SELF-GENERATED SCRAP
GENERAL
The customer must contact the ALCOA Knoxville Office (615) 594-4859 to
obtain approval to return scrap. Scrap must be commercially free of dirt, iron,
and other contaminants. Material should be stored indoors and free of moisture.
Lead levels in excess of .0100 as an alloy constituent are not acceptable.
Freight charges and all other charges regarding rejected scrap will be for the
account of the customer.
SCRAP LOADING AND PACKING
METHOD OF PREPARATION
Acceptable methods of preparation are:
Class I (3000)............ Briquetted Only
Class II (5000)........... Briquetted or Baled
Class III (3000).......... Briquetted or Baled
Class IV (5000)........... Gaylord boxes or loose
Max. of up to 20% when
mixed with Class II
Sheet Scrap............... Strapped to skids
No fibre cartons, fibre or metal drums or metal or wood boxes are to be
used as packages. Under no circumstances should surplus skids be returned in any
load. 5000 series alloys may be mixed in a given package. Class 2 & 4 may be
shipped in the same railcar/trailer providing classes are segregated. All other
classes must be segregated and returned separately.
BALES
Bales must separate into sections when banding or wire is cut. Material
must be banded with 6 minimum to 10 maximum 3/4 in. x .030 in.
(5056-H36) aluminum or 5/8 in. x .020 in. steel or 6 minimum to 10
maximum 10-gauge (5056-0) aluminum or 13-gauge steel. Bands or wires of
other material are not acceptable. Use of support sheets of any
material is not acceptable. Skids should not be used. Bales uniform in
size are preferred. Composite bales of two or more individual bales
banded together to meet size specifications are not acceptable (see
Figure 1).
Class 2 (5000 Series): The density of bales should not exceed 40 pounds
per cubic foot. Minimum bale size is 30 cubic feet. Acceptable range
dimensions are 24 to 36 in. x 30 to 48 in. x 40 to 72 in.
Class 3 (3000 Series): The density of bales should not exceed 40 pounds
per cubic foot. Minimum bale size is 30 cubic feet. Acceptable range
dimensions are 24 to 40 in. x 30 to 52 in. x 40 to 72 in.
BRIQUETTES
The density of hydraulic briquettes should be a minimum of 50 pounds
per cubic foot. Briquettes uniform in size are preferred. Optimum
dimensions are 12 in. x 12 in. x 12 in. A minimum of two steel straps
parallel to runners and under deckboards, two steel straps
perpendicular to runners and under deckboards and one horizontal strap
per layer must be used. All steel straps must be a minimum of 5/8 in. x
.020 in. or aluminum straps 3/4 in. x .030 in. (5052-H36). Bands of
other materials are not acceptable. The maximum metal stack height is
48 in., and the briquettes must not overhang the pallet. Briquettes
should not have aluminum flat sheet or any other support material
between briquette layers or between bottom layer of briquettes and skid
(see Figure 2).
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 46
Aluminum Company of America EFFECTIVE 1993-01-01
Rigid Container Sheet Scrap SUPERSEDES PREVIOUS PAGE DATED 1986-01-01
SELF-GENERATED SCRAP - SECTION RPD941C
SELF-GENERATED SCRAP
SCRAP LOADING AND PACKING DATA
METHOD OF PREPARATION
SHEET SCRAP
Material should be packed on skids. Minimum weight per skid is 1,500
pounds and maximum weight per skid is 6,000 pounds. Sheet scrap should
be secured with not less than 3/4 in. x .025 in. steel straps or 4 3/4
in. x .030 in. aluminum straps (see Figures 3 and 4). (Extra straps may
be required to prevent metal stacks from shifting during transit).
LOOSE
Only spoiled compound ends (Class 4) and tab skeletons and particles
(Class 2) should be loaded loose or in Gaylord boxes. A maximum of up
to 20% loose scrap may be returned with briquettes or bales.
[PICTURE] [PICTURE]
Figure 1, Bale Figure 2, Skid of
Briquettes
[PICTURE] [PICTURE]
Figure 3, Skid of Coiled Figure 4, Skid of Flat Sheet
Sheet Scrap Scrap
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 47
Aluminum Company of America EFFECTIVE 1993-01-01
Rigid Container Sheet Scrap SUPERSEDES PREVIOUS PAGE DATED 1986-01-01
SELF-GENERATED SCRAP - SECTION RPD941C
SELF-GENERATED SCRAP
SCRAP LOADING AND PACKING DATA
LOADING PROCEDURES - RAIL
Scrap is to be loaded to at least 60,000 pounds minimum per car. Cars
assigned or stenciled for return to a specific ALCOA plant should not be used.
All scrap returned by rail must be loaded in railcars having minimum 10 foot
wide doors and minimum height of 9 foot 6 inches. Railcars with double doors are
preferred. Interior equipment, such as gates or other bracing components, if not
being used to restrain the lading, must be stored in the ends of the car.
Nothing should be piled against the doors which inhibits door opening.
Facilities do not permit prior selection of the side to be unloaded; therefore,
the railcar lading must be easily accessible from either side. Shipper should
assure that any railcar being loaded is clean, in good shape, and free of holes
in the floor which could jeopardize unloading operations.
BALES
Loading throughout the car must be such that the long horizontal
dimension is presented to unloading equipment, i.e., long dimension
must be perpendicular to the forks of an approaching truck. Material
should be loaded to prevent shifting in transit. To facilitate
unloading, bales should not be jammed against the roof, sides or doors.
There should be a minimum clearance of 1 foot (see Figure 5).
BRIQUETTES
Skids in the ends of the car are loaded with runners parallel to the
sides of the car. Skids loaded in the doorway are loaded with runners
perpendicular to the sides of the car. Two-high stacking of briquettes
is acceptable if the pallets are uniform in size (consistent height and
width dimensions) and loaded solid from end to end with fixed bracing
to fill any center void. Stacking three skids or more is not
acceptable. All loads must be sufficiently braced for delivery of
entire pallets. Do not load loose or partial unrestrained pallets (see
Figure 6).
LOOSE SCRAP
If necessary to load 60,000 pounds in a car, loose scrap is permitted
in the doorway providing the car contains only loose scrap. Both
doorways must be protected with grain doors. Compounded ends are to be
segregated and loaded in one end of the car. Cars containing loose
scrap are preferred with the doorway area free of scrap (see Figure 7).
MIXED LOADS
Cars that are loaded with more than one class of baled and briquetted
scrap are subject to ALCOA approval. Contact the ALCOA Knoxville Office
for instructions. Loose scrap is to be loaded in either end or both
ends of the car and bales, or palletized briquettes are to be used to
hold loose scrap in place. Loads must be braced so as to prevent
package from being broken apart and to keep loose scrap from the
doorway area (see Figure 8).
[PICTURE] [PICTURE]
Figure 5, Bales Figure 6, Briquetted
Loaded Solid for Length of Car Skidded
[PICTURE] [PICTURE]
Figure 7, Loose Scrap Figure 8, Mixed Car of Baled
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 48
Aluminum Company of America EFFECTIVE 1993-01-01
Rigid Container Sheet Scrap SUPERSEDES PREVIOUS PAGE DATED 1986-01-01
SELF-GENERATED SCRAP - SECTION RPD941C
SELF-GENERATED SCRAP
SCRAP LOADING AND PACKING DATA
LOADING PROCEDURES - TRUCK
All scrap shipments by truck must meet the same size, quality, density,
and contaminant standards as rail shipments. Minimum shipments of Class 1, 2, or
3 via truck is 40,000 pounds. All trailers used for scrap returns must have
sliding tandems, swing out doors (no roll up doors) and be of van type (no drop
deck or moving van trailers) or flatbed side-loaded. Trailers should be loaded
to allow at least 4 inches of clearance between the bales and the sides of the
trailer and 12 inches of clearance between the bales and rear door and roof.
Nothing should be piled against the doors which prohibits the opening of them.
ALCOA reserves the right to refuse shipments which are not loaded properly or do
not meet specifications. Shipper should assure that any truck being loaded is
clean, in good shape, and free of holes in the floor which could jeopardize
unloading operations.
BALES
Stack bales placing bales one atop the other so that the maximum amount
(100% if possible) rests on their largest face. Do not load bales on
end or on edge. A bale resting on its largest face is in a position of
maximum stability. Material should be loaded to prevent shifting in
transit (see Figure 9).
BRIQUETTES
Skids are to be loaded with the runners parallel to the side of the
trailers. Briquettes should not be double stacked. Briquettes should be
loaded either single or double wide from nose of trailer to end of
trailer. All loads must be sufficiently braced. Do not load loose,
partial, or unrestrained pallets. If the shipment is loaded down the
middle of the trailer, the pallets must be blocked and/or braced to
avoid shifting while in transit (see Figure 10).
[PICTURE] [PICTURE]
Figure 9, Bale Truckloaded Figure 10, Briquettes Truckloaded
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 49
Aluminum Company of America EFFECTIVE 1993-01-01
Rigid Container Sheet Scrap SUPERSEDES PREVIOUS PAGE DATED 1986-01-01
SELF-GENERATED SCRAP - SECTION RPD941C
SELF-GENERATED SCRAP
SCRAP LOADING AND PACKING DATA
RAIL/TRUCK
SHIPMENT NOTICE, MANIFEST AND BILL OF LADING
SHIPMENT NOTICE
At the time of shipment, the customer is to phone (615) 594-4859 or fax
(615) 594-4655 "ship to" location and furnish the following information
to ALCOA Knoxville Office:
<TABLE>
<S> <C>
A. Railcar/trailer number E. Seal number used on railcar/trailer
B. Date shipped F. Estimated aluminum weight
C. Type of scrap G. Weight of dunnage
D. Number of bales/briquettes H. Shipping location
</TABLE>
NOTE: Seals will be inspected at the ALCOA locations or
designated ALCOA agent locations and will be placed on a
"hold" status in the result of a discrepancy or broken
seal. The shipment will remain on "hold" until approval
is obtained from customer to unload.
MANIFEST
The information shown above for the shipment notice is to be shown on a
shipment manifest which should be taped to the inside of the door. In
addition, the manifest should include ALCOA SPT number.
BILL OF LADING
The bill of lading for shipment is to be completed as shown in Figure
11 and Figure 12 (See attached). Note that:
A. The ALCOA SPT number is to be included on the "consigned to"
line.
B. The "Description of Articles" is to indicate "Scrap
Aluminum, for Remelting Purposes Only."
C. Indicate actual scale weight or an estimated weight, which
be marked "Estimated."
D. Duplicate bill of lading is required at receiving location.
CERTIFICATION
The following "certification" is to be applied to the bill of lading
and MUST BE SIGNED BY THE CONSIGNOR OR HIS AGENT:
"This shipment is being transported for the purposes of
RECYCLING as defined in applicable tariffs containing such
provisions."
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 50
Aluminum Company of America EFFECTIVE 1993-01-01
Rigid Container Sheet Scrap SUPERSEDES PREVIOUS PAGE DATED 1986-01-01
SELF-GENERATED SCRAP - SECTION RPD941C
SELF-GENERATED SCRAP
SCRAP LOADING AND PACKING DATA
[PICTURE]
SAMPLE BILL OF LADING - RAIL
Figure 11
[PICTURE]
SAMPLE BILL OF LADING - TRUCK
Figure 12
Shipper will be given specific routing information by Scrap Central and must
adhere to those instructions.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 51
EXHIBIT D: LIST OF ANC'S CURRENT BEVERAGE CAN MANUFACTURING
FACILITIES IN NORTH AMERICA AS OF JANUARY 1ST, 1994
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
CAN PLANTS NUMBER OF LINES CAN SIZES
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Bishopville, SC 3 12oz.
Brunswick, NJ 2 12oz.
Chatsworth, CA 3 12oz.
Chicago, IL 2 12oz.
Danbury, CT 1 12oz.
Fairfield, CA 2 12oz.
Forest Park, GA 2 12oz.
Fremont, OH 3 12oz.
Gateway, MO 4 12oz., 16oz.
Houston, TX 2 10oz., 12oz., 16oz.
Jacksonville, FL 3 12oz.
Kent, WA 4 12oz.
Longview, TX 4 10oz., 12oz.
Memphis, TE 3 12oz.
Oklahoma City, OK 2 12oz.
Phoenix, AZ 3 12oz.
Piscataway, NJ 3 12oz.
Puerto Rico 1 10oz., 12oz.
St. Paul, MN 3 12oz.
Whitehouse, OH 3 12oz., 24oz.
Winston-Salem, NC 6 12oz., 14oz., 16oz.
- -------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------
END PLANTS MODULES SIZES
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Birmingham, AL 4 *202, *204, *206, *209
St. Louis, MO 2 *206
San Leandro, CA 1 *202, *206
Valparaiso, IN 4 *206
- -------------------------------------------------------------------------------------------------
</TABLE>
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 52
EXHIBIT E: DISQUALIFICATION PROCEDURE
Procedure for disqualification of an aluminum supplier ("Supplier")
Disqualification by ANC of a supplier at any ANC location may occur under the
following circumstances:
1/Criteria:
1.1/As a result of mutually agreed metal defects, for a 5 day period, can
structure and appearance (i.e., split flanges, pin holes, low buckles, loopers,
streakers, etc ... ) directly attributed to metal defects exceed current ANC
qualifications limits, as set forth in table below:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CUPPER PERFORMANCE cupperjam less than l per coil acceptable
(confirmed coil related) greater than 1 per coil unacceptable
- ----------------------------------------------------------------------------------------------------------------
BODYMAKER PERFORMANCE tearoffs less than l per 300,000 cans acceptable
(confirmed coil related) greater than 1 per 300,000 cans unacceptable
- ----------------------------------------------------------------------------------------------------------------
CAN INTEGRITY cracked flanges (confirmed coil less than l per 300,000 cans acceptable
related) greater than 1 per 300,000 cans unacceptable
- ----------------------------------------------------------------------------------------------------------------
PINHOLES basecoated cans less than l per 1,000,000 cans acceptable
(confirmed coil related) greater than 1 per 1,000,000 cans unacceptable
------------------------------------------------------------------------------------
non basecoated cans less than l per 300,000 cans acceptable
greater than 1 per 300,000 cans unacceptable
- ----------------------------------------------------------------------------------------------------------------
BUCKLE STRENGTH minimum 90 lb.
- ----------------------------------------------------------------------------------------------------------------
DOME GROWTH AT 90 PSIG maximum 0.064 inches
- ----------------------------------------------------------------------------------------------------------------
COLUMN STRENGTH minimum 250 lb.
- ----------------------------------------------------------------------------------------------------------------
CAN APPEARANCE looper lines, scratches, draw marks, and any other surface defect attributable
to metal can be cause for rejection
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Measurements and evaluations will be performed by qualified ANC personnel, in
accordance with ANC qualification trial procedures.
1.2/As a result of mutually agreed metal defects, for a 30-day period,
production efficiency is less than 98% of the previous 30-day average of the
efficiency obtained with metal from the same or another supplier.
1.3/Total spoilage, directly attributable to metal, for a 30-day period, exceeds
the previous 30-day average by 1 percent or more.
1.4/Metal related HFI (hold for inspection), for a 30-day period, exceed the
metal total monthly usage (number of coils) by 3 percent or more.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 53
1.5/Tooling usage, directly attributable to metal, for a 30-day period, exceeds
the previous 30-day history by 5 percent or more.
1.6/A disruption in the plant operations occurs, which is directly attributable
to defective metal deliveries or service.
2/Procedure: if a supplier's metal performance violates any four of the above
six criteria, the plant to which the metal is being supplied may request of ANC
management that a disqualification proceeding be initiated by ANC.
If ANC decides to proceed with such a disqualification proceeding, the supplier
will then be advised of its poor performance and an immediate corrective action
will be requested. This corrective action plan will be promptly forwarded by the
supplier to ANC. It will then be implemented promptly by the supplier, who must
then demonstrate improvement within a 45-day period.
At the end of the 45-day period, if little or no improvement has been observed,
ANC may decide to disqualify the supplier at the plant in question.
In the event of a catastrophic problem, ANC shall have the right to immediately
suspend the supplier, as an aluminum can-stock supplier at that plant. If it is
determined that the supplier metal was the cause of the catastrophic problem,
the supplier may be disqualified at that location.
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 54
EXHIBIT F: LETTER FROM ANC TO ALCOA GIVING CERTAIN INDICATIONS IN RELATIONSHIP
WITH POTENTIAL VOLUMES AND MIX ALLOCATION FOR YEARS 1996 AND 1997.
Attached (1 page)
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 55
AMERICAN NATIONAL CAN Pechiney Group
- --------------------------------------------------------------------------------
CHICAGO, December 13, 1994
GUY CHARDON
Sr. Vice President - Purchasing
Mr. Robert F.DAVIS
ALUMINUM COMPANY of AMERICA
Rigid Packaging Division
1100 Riverview Tower
900 South Gay Street
KNOXVILLE, TE 37902
Dear Bob,
This letter is intended to clarify certain points discussed during our 12/13/94
meeting in CHICAGO in relationship with the ANC - ALCOA multi-year agreement.
Estimated volume for year 1996 should be 300 million pounds, and estimated
volume for year 1997 should be 350 million pounds. Those volume are indicative,
and for production capacity reservation only. The actual volumes will be derived
from ANC's contractual commitment of 25% of ANC's on-going total requirements of
aluminum can-stock in North America for year 1996, and 30% of ANC's on-going
total requirements of aluminum can-stock in North America for year 1997,
on-going total requirements being defined in the agreement. However, should the
actual volume exceed 330 million pounds in 1996, or 385 million pounds in 1997,
ANC agrees to meet with ALCOA as soon as this situation is known, in order to
find an acceptable solution for both parties.
As mentioned in the agreement, mix allocation for year 1995 is 75 million pounds
of body-stock and 65 million pounds of coated end-stock. As an indication,
requirements of coated end-stock for year 1996 and 1997 should range between 65
and 90 million pounds.
Best regards,
Guy CHARDON
ALUMINUM PURCHASE AGREEMENT (ANC-ALCOA) Exhibit
STRICTLY PRIVATE
<PAGE> 56
ALUMINUM COMPANY OF AMERICA ALCOA
- --------------------------------------------------------------------------------
08 January 1997
Mr. Bert Larsson
Vice President, Purchasing
American National Can Corporation
8770 West Bryn Mawr, M/S 8Z
Chicago, Illinois 60631
Dear Bert,
In light of the flurry of recent discussions, it seems advisable to confirm our
agreements on ANC's 1997 Class I scrap toll requirements under the Aluminum
Purchase Agreement between Aluminum Company of America ("Alcoa") and American
National Can Company ("ANC") dated January 10, 1995, as amended by our letter
agreement dated February 1, 1996 (as amended, the "Agreement"), (unless
otherwise indicated, capitalized terms used in this letter have the meanings
specified in the Agreement) and other matters. They are:
1. Alcoa agrees to waive ANC's Class I scrap toll obligation for the
first quarter of 1997 of 11 million pounds.
2. ANC agrees to toll [*] million pounds of P1020 with Alcoa during the
first quarter of 1997 for tolling fee of [*] (.0112" gauge).
3. ANC agrees to toll [*] million pounds of Class I Scrap with Alcoa
spread over the second, third, and fourth quarters of 1997 (level loaded) for a
tolling fee of [*] above published conversion prices (ANC pays transportation
fees).
4. ANC agrees to purchase from Alcoa [*] million pounds of tab-stock
during 1997 at published book pricing (Alcoa Price Data, September 15, 1995) and
the metal component per the Agreement. This quantity of tab-stock is part of
Alcoa's thirty percent (30%) share of ANC's total 1997 purchases, estimated to
be [*] million pounds, i.e. is not incremental business in 1997.
5. [*] or the termination of the time period for doing so, whichever
first occurs, ANC will provide Alcoa with notice of all the terms of the most
favorable offer for this volume, and Alcoa, within 20 working days, will then
notify ANC of its decision to match or to decline to match such offer.
Except as modified by this letter agreement, the terms and conditions of the
Agreement shall continue in full force and effect.
<PAGE> 57
Mr. Edward A. Lapekas
6 January 1997
Page 2
Please confirm ANC's agreement to the above by executing where indicated below
and returning one fully executed copy of this letter to me.
Sincerely,
ALUMINUM COMPANY OF AMERICA, AMERICAN NATIONAL CAN
Rigid Packaging Division COMPANY
By: /s/ George Bergerson By: /s/ Edward Lapekas
--------------------------------- -------------------------------
President Senior Executive Vice President
Chief Operating Officer,
Beverage Cans Worldwide
<PAGE> 58
ALUMINUM COMPANY OF AMERICA ALCOA
- --------------------------------------------------------------------------------
6 January 1997
Mr. Edward A. Lapekas
Chief Operating Officer
American National Can Company
8770 West Bryn Mawr
Chicago, Illinois 60631
Dear Ed:
In connection with the Aluminum Purchase Agreement between Aluminum Company of
America ("Alcoa") and American National Can Company ("ANC") dated January 10,
1995, as amended by our letter agreement dated February 1, 1996 (as amended, the
"Agreement"), (unless otherwise indicated, capitalized terms used in this letter
have the meanings specified in the Agreement), ANC has recently triggered
Alcoa's right of refusal with regard to the supply of a percentage of ANC's
on-going total annual can-stock purchases in North America during each of
calendar years 1998, 1999, and 2000.
ANC has been advised by Pepsi Cola Company ("COBO") not to make can-stock
purchase commitments in connection with its purchases from ANC. If COBO
hereafter decides to have ANC purchase the can-stock requirements for its
purchases from ANC, these requirements shall be subject to Alcoa's first right
of refusal under the Agreement, and ANC and Alcoa shall promptly meet thereon.
Alcoa's share of the COBO can-stock requirements is approximately 40 million
pounds. ANC further advises Alcoa that it is currently unaware of any other ANC
customer volume that is subject to be purchased directly by any of ANC's
customers during the period in question, i.e., calendar years 1998, 1999, and
2000.
Alcoa will be supplying, in the aggregate, thirty percent (30%) of ANC's
presently available on-going can-stock purchase requirements for North America,
during calendar years 1998, 1999 and 2000. Alcoa is willing to commit to supply
an amount of can-stock (the "Ceiling Volume") during calendar years 1998, 1999,
2000 on the terms set forth in the Attachment hereto (the "Attachment"). The
Ceiling Volume will be calculated as follows:
Ceiling Volume equals the difference between (i) thirty
percent (30%) of [ANC's total on-going can-stock purchase
requirements for North America for the year in question less
the COBO volume as discussed above] and (ii) 100 million
pounds (firm volume commitment) which will be supplied to ANC
under the terms of the Agreement and the Letter Agreement
between ANC and Alcoa dated September 5, 1996.
<PAGE> 59
Mr. Edward A. Lapekas
6 January 1997
Page 2
example:
Ceiling Volume = [0.30 x (ANC Total Purchases - COBO Volume)] - 100 MM lb.
ANC shall specify the Ceiling Volume (in millions of pounds) by January 10, 1997
for deliveries in each of 1998, 1999 and 2000, which Alcoa will then use to
determine appropriate metal hedging positions. If ANC's can-stock purchases
during any of the calendar years 1998, 1999, or 2000 are not equal to or greater
than 90% of this specified volume, ANC will pay Alcoa's associated costs for
option premiums on any shortage below 90% volume. Any reduction in ANC's
purchases from Alcoa during 1998, 1999, or 2000 shall be consistent in term and
proportion with reductions of ANC's purchases from it's other can-stock
suppliers. Further, if ANC purchases from Alcoa during any of the calendar years
1998, 1999, or 2000 exceed the 110% volume, the metal component price for that
incremental volume will be based on current market conditions at the time a firm
commitment for volume is made.
If the above reflects our agreement on the matters covered, please execute where
indicated below, and return one fully executed copy to me.
Sincerely,
ALUMINUM COMPANY OF AMERICA,
Rigid Packaging Division
By: /s/ George E. Bergerson
--------------------------------------
George E. Bergerson
President
READ AND AGREED TO THIS 10TH DAY OF JANUARY, 1997
AMERICAN NATIONAL CAN COMPANY
By: /s/ Edward A. Lapekas
--------------------------------------
Edward A. Lapekas, Senior Executive Vice President and
Chief Operating Officer, Beverage Cans Worldwide
<PAGE> 60
ALCOA/ANC
1998, 1999, 2000 CEILING PRICING
- - Base Midwest Metal Ceiling (No Floor) at no cost to ANC
1998, 1999, 2000 Ceiling @ [*]
- - Actual invoiced metal is the ceiling price, or when metal is below the
ceiling will be at the reference price for that period. The pricing periods
will be identical to those currently in force under the provisions of the
Alcoa/ANC amendment dated February 1, 1996 (i.e., September 1st to February
28th, for can sheet shipments April 1st to September 30th, and March 1st to
August 31st, for shipments October 1st to March 31st.). When at or above
the ceiling, actual invoiced metal will be at [*]
- - Book Conversion pricing for ceiling priced material
.0114" Body Stock $.32/lb.
.0110" Soft Drink End Stock $.73/lb.
- Adjusted annually for 1/2 PPI starting, with 1998, based on 1997 vs.
1996 full year averages.
- Price for changes from reference specifications based on Alcoa's
published schedules dated 15 September 1995.
- - This ceiling price offer is for the Ceiling Volume, which is the difference
between (i) thirty percent (30%) of [ANC's total on-going can-stock
purchase requirements for North America for the year in question less the
120 million pound COBO volume as discussed above] and (ii) 100 million
pounds (firm volume commitment) which will be supplied to ANC under the
terms of the Agreement and the Letter Agreement between ANC and Alcoa dated
September 5, 1996.
- - ANC to specify the Ceiling Volume (in millions of pounds) by January 10,
1997 for deliveries in each of 1998, 1999, and 2000, which Alcoa will then
use to secure metal hedging positions. If ANC's can stock purchases during
any of the calendar years 1998, 1999, or 2000 are not equal to or greater
than ninety percent (90%) of this specified volume, ANC will pay Alcoa's
associated costs for option premiums on any shortage below the 90% volume.
If ANC's purchases from Alcoa during any of the calendar years 1998, 1999,
or 2000 exceed the one hundred ten percent (110%) volume, the metal
component price for that incremental volume will be based on current market
conditions at the time a firm commitment for volume is made.
- - Mutually agreed upon ship-to locations.
- - [*]
- - Except as otherwise provided in this Attachment and the letter to which it
is attached, the terms and conditions of the Agreement shall apply.
<PAGE> 61
SCRAP PURCHASE AGREEMENT
THIS SCRAP PURCHASE AGREEMENT is entered into as of the 10th day of
January, 1997 by and between AMERICAN NATIONAL CAN COMPANY, a Delaware
corporation ("ANC") and Rigid Packaging Division of ALUMINUM COMPANY OF AMERICA,
a Pennsylvania corporation ("Alcoa").
In consideration of mutual undertakings the parties agree as follows:
1. QUANTITY. ANC agrees to sell and Alcoa agrees to buy an amount of
"3004 can manufacturing plant generated scrap," commonly designated as Class I
scrap ("Class Scrap") equal to three and two tenths percent (3.2%) of ANC's
total annual can-stock purchases for use in North America during each calendar
year of the term of this Agreement; provided, however, that any amount of such
ANC purchases for Pepsi Cola Corporation which is not purchased from Alcoa, and
the quantity of can-stock supplied by Alcoa pursuant to the September 5, 1996
letter agreement between the parties, shall both be excluded from "ANC's total
annual can-stock purchases for use in North America" for purposes of this
Section 1.
2. TERM. This Agreement shall become effective on January 1, 1998 and
shall remain in effect until December 31, 2000.
3. PRICE. The FOB customer can plant price per pound of Class Scrap
shall be[*]. The deductor shall be adjusted by one half (1/2) of the annual
change in the Producer Price Index beginning on January 1, 1998 as follows:
- --------------------------------------------------------------------------------
PURCHASE PERIOD: REFERENCE PERIOD:
- --------------------------------------------------------------------------------
Ql, 1998 March 1997 - August 1997
- --------------------------------------------------------------------------------
Q2/Q3, 1998 September 1997 - February 1998
- --------------------------------------------------------------------------------
Q4,1998 / Q1, 1999 March 1998 - August 1998
- --------------------------------------------------------------------------------
Q2/Q3, 1999 September 1998 - February 1999
- --------------------------------------------------------------------------------
Q4, 1999/Q1, 2000 March 1999 - August 1999
- --------------------------------------------------------------------------------
Q2/Q3,2000 September 1999 - February 2000
- --------------------------------------------------------------------------------
Q4, 2000 March 2000 - August 2000
- --------------------------------------------------------------------------------
<PAGE> 62
2
4. PAYMENT TERMS. Payments shall be due net 30 days from receipt of
Class Scrap and shall be made on the first business day of each month.
5. SHIPMENTS. The projected annual quantity of Class Scrap to be
purchased hereunder shall be shipped in approximately equal monthly shipments.
6. SPECIFICATIONS. Class Scrap to be purchased hereunder shall conform
to Alcoa's Class I Specifications in effect at the time of shipment. In the
event that nonconforming Class Scrap is shipped by ANC, the parties shall seek
to agree to a revision of the purchase price, failing which ANC will, at its
sole expense, replace the nonconforming Class Scrap with conforming Class Scrap
at the Alcoa designated destination.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized representatives as of the date first above
written.
ALUMINUM COMPANY OF AMERICA, AMERICAN NATIONAL CAN
RIGID PACKAGING DIVISION COMPANY
By: /s/ George Bergerson By: /s/ Edward Lapekas
-------------------------- -------------------------------
Title: President Title: Senior Executive Vice President and
Chief Operating Officer, Beverage
Cans Worldwide
<PAGE> 63
ALUMINUM COMPANY OF AMERICA ALCOA
- --------------------------------------------------------------------------------
1996 September 5
Mr. Edward A. Lapekas
Senior Vice President
Beverage Cans Americas
American National Can Corporation
8770 W. Bryn Mawr
Chicago IL 60631
Dear Edward:
In connection with the Aluminum Purchase Agreement between Aluminum Company of
America ("Alcoa") and American National Can Corporation ("ANC") dated January
10, 1995, as amended by our letter agreement dated February 1, 1996 (as amended.
the "Agreement"), ANC has recently triggered Alcoa's right of refusal with
regard to the supply of 100 million pounds of can-stock during each of calendar
years 1998, 1999 and 2000. ANC has asked Alcoa to agree to supply or to decline
to supply this quantity on the banded price basis set forth in the Attachment
hereto (the "Attachment"). (Unless otherwise indicated, capitalized terms used
in this letter have the meanings specified in the Agreement.)
Alcoa is willing to commit to supply 100 million pounds of can-stock to ANC in
each of calendar years 1998, 1999 and 2000 as part of its contract share of
ANC's on-going annual requirements on the banded price basis and other terms set
forth in the Attachment. ANC and its customer for which ANC is securing the
above quantity specifically understand that the metal price component of the
price for this quantity will be no less than the agreed minimum price set forth
on the Attachment of $0.70 per pound as adjusted per the Attachment regardless
of the market price of aluminum at the time of delivery or at any other time
and/or any other competitive conditions. Alcoa specifically understands that the
metal price component of the price for this same quantity will be no more than
the agreed maximum price of [*] per pound as set forth and adjusted per the
attachment regardless of the market price of aluminum at the time of delivery or
any other competitive conditions.
If you are willing to proceed on this basis, please execute where indicated
below. ask your customer to execute the attached letter, and return one fully
executed copy of both to me.
Sincerely,
ALUMINUM COMPANY OF AMERICA,
Rigid Packaging Division
By: /s/ George E. Bergerson
-----------------------------
George E. Bergerson
President
READ AND AGREED TO THIS 9TH DAY OF SEPTEMBER, 1996
AMERICAN NATIONAL CAN CORPORATION
By: /s/ Edward Lapekas
-----------------------------
Edward Lapekas
Title: Senior Vice President
<PAGE> 64
Mr. Edward A. Lapekas
1996 September 5
Page 2
Aluminum Company of America
Rigid Packaging Division
1100 Riverview Tower
900 South Gay Street
Knoxville, TN 37902
Attention: George E. Bergerson,
President
Gentlemen:
The undersigned entity hereby acknowledges and agrees to the conditions of the
Attachment and specifically understands that the metal price component for the
100 million pounds of aluminum can-stock which American National Can Corporation
("ANC") has contracted for with Aluminum Company of America ("Alcoa") for each
of calendar years 1998, 1999 and 2000 in connection with our purchase obligation
with ANC for those years shall not be less than $0.70 per pound as set forth and
adjusted per the Attachment agreed to by ANC and Alcoa, regardless of the market
price of aluminum at the time of delivery or at any other time or any other
competitive conditions. Alcoa specifically understands that the metal price
component of the price for this same quantity will be no more than the agreed
maximum price of [*] per pound as set forth and adjusted per the attachment
regardless of the market price of aluminum at the time of delivery or any other
competitive conditions.
- ---------------------------------
By:
------------------------------
Title:
---------------------------
Date:
----------------------------
- ---------------------------------
By: George E. Bergerson
------------------------------
Title: President
---------------------------
Date:
----------------------------
<PAGE> 65
Alcoa / ANC
1998, 1999, 2000 Banded Price
- - Base Midwest Metal Band at no cost to ANC
1996 max [*]
min $0.70
The band will be adjusted annually based on 1/2 the change in PPI over the
prior 12 months, i.e., January 1 through December 31, and implemented on
April 1st of the following year. (Index is the PPI for intermediate
materials as reported by the US Department of Labor - March 1996 base is
124.9.)
- - Actual invoiced metal is the maximum, the minimum or when metal is within
the band, at the referenced price for that pricing period. The pricing
period will be September 1st to February 28th, for can sheet shipments
April 1st to September 30th and March 1st to August 31st, for can sheet
shipments October 1st to March 31st.
- - Conversion price for banded material
.0114" Bare $.32
.0110" Soft Drink End $.73
.0110" Tab (H19) $.633
- Price for changes from reference specifications based on Alcoa's
published schedules dated 15 September 1995
- Adjusted annually on April 1st based on 1/2 of the PPI average
12-month period from January 1 through December 1 of the prior year.
- - Annual quantity-100 million pounds, fixed volume commitment Volume is
specifically dedicated to BACI (Beverage Associates Cooperative, Inc.)
- - Alcoa agreed upon ship-to locations
- - [*]
- - Other conditions per our Supply Agreement dated 10 January 1995.
<PAGE> 66
AMERICAN NATIONAL CAN PECHINEY GROUP
- --------------------------------------------------------------------------------
February 1, 1996
Via Federal Express
- -------------------
Mr. George E. Bergerson
President
Aluminum Company of America
Rigid Packaging Division
1100 Riverview Tower
900 South Gay Street
Knoxville, Tennessee 37902
Dear George:
As a result of discussions we have had over the last four months, Aluminum
Company of America ("Alcoa") and American National Can Company ("ANC") have
agreed to clarify and amend the Aluminum Purchase Agreement between them dated
January 10, 1995 (the "Agreement") as set forth below. Unless otherwise defined,
terms defined in the Agreement shall have the same meanings herein.
1. ANC agrees to purchase and Alcoa agrees to supply (i) twenty-five
percent (25%) of ANC's on-going total purchases of aluminum can-stock in North
America during 1996, which are currently estimated to be approximately two
hundred fifty (250) million pounds; and (ii) thirty percent (30%) of ANC's
on-going total purchases of aluminum can-stock in North America during 1997,
which are currently estimated to be approximately two hundred ninety (290)
million pounds. The foregoing purchase commitments are exclusive of ANC's can
volume for Coors Brewing Company, ANC's currently existing plants in Mexico, and
twenty-four (24) ounce cans, all of which are subject to preexisting agreements
as of the date hereof. Any addition to ANC's on-going requirements or extensions
to these two purchase commitments will be treated per Section 3.3 of the
Agreement.
2. ANC accepts Alcoa's Two Year Ceiling Price Contract Pricing
Alternative Offer dated September 15, 1995 (the "Offer"), a copy of which is
attached hereto, for one hundred fifty (150) million pounds of aluminum
can-stock in 1996 and one hundred seventy (170) million pounds of aluminum
can-stock in 1997.
3. The quantities of aluminum can-stock to be purchased by ANC in 1996
and 1997 pursuant to the Offer shall be priced on the following basis
(quantities are in millions of pounds):
<PAGE> 67
Mr. George E. Bergerson
February 1, 1996
Page 2
<TABLE>
<CAPTION>
TIER 1:
- ---------------------------------------------------------------------------------------------------------------------
1996 1997
---- ----
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
150 170 Total volume included in Tier 1
- ---------------------------------------------------------------------------------------------------------------------
9 12 Volume of Class I scrap to be tolled at the conversion
component contained in the Offer
- ---------------------------------------------------------------------------------------------------------------------
141 158 Volume to be ceiling priced by Alcoa per the Offer
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TIER 2:
- ---------------------------------------------------------------------------------------------------------------------
1996 1997
---- ----
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
100 120 Total volume included in Tier 2
- ---------------------------------------------------------------------------------------------------------------------
12 32 Volume of Class I scrap to be tolled at the conversion
component contained in the Offer
- ---------------------------------------------------------------------------------------------------------------------
88 88 Volume priced by Alcoa using the conversion component and
the Midwest spot average price for metal for the pricing
periods, both as outlined in the Offer.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
TIER 3:
- ---------------------------------------------------------------------------------------------------------------------
1996 AND 1997 VOLUMES PRICING
--------------------- -------
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
Remaining volume based on share and any incremental Per existing Agreement pricing mechanisms and contract
contract volume above share. provisions.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
For 1996 and 1997, Tier 1 and Tier 2 volumes will be allocated proportionally on
a monthly basis.
4. ANC represents and warrants that it has or will secure metal hedging
positions of high grade aluminum in 1996 and 1997 to cover their Tier 2
positions. ANC has or will take such positions in its own name and as a
principal, not as an agent for any other party. Alcoa has no direct or indirect
interest in or liability with respect to such positions, and ANC shall make no
claims or demands, and shall indemnify and hold Alcoa harmless against any
claims or demands, arising from or in connection with such positions.
5. If ANC purchases less than one hundred fifty (150) million pounds
and/or less than one hundred seventy (170) million pounds of can-stock under
Tier 1 in 1996 and/or 1997,
<PAGE> 68
Mr. George E. Bergerson
February 1, 1996
Page 3
respectively, under the Agreement as amended hereby (the "Amended Agreement")
due to a decline in the beverage can market, ANC will pay Alcoa's actual hedging
costs, if any, associated with the shortage. For the purpose of calculating
ANC's maximum liability under this section only, these costs will not exceed
$0.05 per pound for either 1996 or 1997; provided, however, that ANC shall be
entitled to any Alcoa profit resulting under these circumstances from any actual
Alcoa hedge positions taken in the financial markets in connection with the
Offer during 1996 and/or 1997, as the case may be. Any reduction in ANC
purchases covered by this paragraph shall be consistent in term and proportion
with reductions of ANC's purchases from its other can stock suppliers, except
for one preexisting contract as of the date hereof , where ANC has committed to
purchase a specific volume from a particular supplier which represents less than
20 percent of ANC's total volume.
6. ANC will give due consideration to Alcoa's request to provide one
hundred percent (100%) of ANC/Coors E-Coat(R) end-stock requirements for use by
the Coors Brewing Company, which requirements currently approximate twenty-five
(25) million pounds annually. In consideration of such purchases, Alcoa shall
waive its [*] per pound slitting charge on shipments of E-Coat(R) beer end-stock
for use at Coors' Golden plant until its narrow presses are replaced with wide
presses tooled to run the maximum width of E-Coat(R) end-stock produced at
Alcoa's Warrick, Indiana facility. Once such narrow presses are replaced with
wide width capabilities, ANC shall continue to purchase its Coors E-Coat(R) end
stock volume from Alcoa for so long as Alcoa keeps ANC competitive with respect
to the direct cost inefficiencies resulting from ANC's use of E-Coat(R) material
which is "one-out" narrower than the press and tools are capable of running.
7. ANC will give due consideration to Alcoa's request to supply to
preferred ship-to locations and not to be disadvantaged as compared to other
suppliers of can-stock in this regard.
8. ANC grants to Alcoa a first right of refusal on thirty percent (30%)
of its total purchases of aluminum can-stock in North America for each of
calendar years 1998, 1999 and 2000 in accordance with the terms of the Offer.
This first right of refusal is exclusive of ANC's can volume purchases for Coors
Brewing Company, ANC's currently existing plants in Mexico, and twenty-four (24)
ounce cans if these preexisting agreements are still in effect at that time. Any
addition to ANC's on-going requirements will be treated per Section 3.3 of the
Agreement. ANC shall provide Alcoa with prompt notice of all of the material
terms of the most favorable offers (including without limitation, any band
pricing offers) it receives after the date this letter amendment is fully
executed from a supplier of can-stock to supply at least fifteen percent (15%)
of its total requirements of aluminum can-stock in North America over one or
more years during 1998, 1999 and/or 2000. Alcoa shall have fifteen (15) working
days to notify ANC of its decision to match or to decline to match such offer
and, for any offer extending beyond 2000, but
<PAGE> 69
Mr. George E. Bergerson
February 1, 1996
Page 4
including 1998, 1999 or 2000, its decision to match or decline to match such
offer during those years. If Alcoa declines to match such offer or makes an
alternative offer unacceptable to ANC and ANC accepts the other supplier's
offer, ANC shall be entitled to reduce Alcoa's right of refusal quantity for the
year or years in question commensurately.
9. For contracts or commitments of supply covering the period of the
Offer, if Alcoa agrees or has agreed, on or after January 10, 1995: (i) to sell
to any can sheet purchaser for delivery in North America (whether to meet a
competitive offer or otherwise) under a "metal plus conversion" based agreement
or under any other pricing formula that includes "below market" support on the
risk premium that results in economic value in excess of the risk premium
support that Alcoa previously provided to ANC or (ii) to provide to any can
sheet purchaser in North America for use in North America, any incentive
program, subsidy or the like, which constitutes either a discount or below
market support on the metal components or the conversion component and/or any
other type of financial support on one or more RCS products of the type supplied
by Alcoa to ANC for use in North America, then Alcoa will offer the equivalent
incremental economic value of this support to ANC. This "below market" support
could be in the form of a risk premium discount, or a discount to the London
Metal Exchange metal component, the contango component, the Midwest Premium
component, the conversion component, or any other terms or conditions designed
to deliver economic value. Alcoa shall adjust the price for Tier 1 and priced
Tier 2 volume by the amount of the support or discount, as the case may be, and
shall offer to supply any unpriced Tier 3 volume on such terms; provided,
however, that such adjustment or offer, as the case may be, shall only apply to
ANC deliveries made while Alcoa is supplying can stock to such other purchaser
on those terms. ANC shall notify Alcoa within fifteen days of its acceptance or
rejection of such offer, failing which such offer shall be deemed to have been
rejected. Alcoa will make adjustments to meet the terms of any such offer, but
shall in no event be obligated to make adjustments for any changes in the London
Metal Exchange component, the contango component, the Midwest premium component
or the risk premium component resulting from the market changes. By the end of
January 1997 and January 1998, the Chief Financial Officer of Alcoa will confirm
in writing to the Chief Financial Officer of American National Can that Alcoa is
in compliance with the pricing provisions of this paragraph.
10. Except as expressly modified by this letter amendment, the terms
and conditions of the Agreement shall continue in full force and effect.
11. For purposes of calculating the Midwest Spot price for the
reference periods captured in the Offer, Alcoa will use the average monthly U.S.
transaction prices as quoted in Platt's Metals Week.
<PAGE> 70
Mr. George E. Bergerson
February 1, 1996
Page 5
If the foregoing reflects your understanding of our agreement, please execute
this letter where indicated below and return one fully executed copy of the
letter to me for our files.
Sincerely,
AMERICAN NATIONAL CAN COMPANY
By: /s/ Gerard Hauser
-----------------------------------------
Gerard Hauser
Senior Executive Vice President
Chief Operating Officer - Beverage Sector
READ AND AGREED TO THIS 6TH DAY OF FEBRUARY, 1996.
ALUMINUM COMPANY OF AMERICA,
Rigid Packaging Division
By: /s/ George Bergerson
-----------------------------------------
George Bergerson
Title: President
<PAGE> 71
ALCOA 2 YEAR CEILING PRICE
CONTRACT PRICING ALTERNATIVE OFFER
- - BASE CEILING PRICES FOR RCS REFERENCE SPECIFICATIONS FOR 1996 AND 1997 ARE
Reference Spec* Ceiling Price
-------------- -------------
Body .0114" $1.220
Soft drink end .0110" $1.630
Bare tab .0110" $1.533
*Prices for changes to reference specifications are adjusted
according to ALCOA's published price schedules dated
September 15, 1995
- - COST TO CUSTOMER IS $.02 PER POUND PER YEAR FOR VOLUME PLACED USING THIS
PRICE MECHANISM, PAID NET 30 DAYS AFTER CEILING PRICE VOLUME COMMITMENT
- - CEILING PRICE WILL BE ADJUSTED DOWNWARD TO REFLECT ACTUAL AVERAGE MIDWEST
SPOT (MWS) IF MWS IS LESS THAN $0.90 PER POUND AS FOLLOWS:
Price Period Reference Period for MWS
------------ ------------------------
Jan 1, 1996 - Mar 31, 1996 June 1, 1995 - Nov 30, 1995
Apr 1, 1996 - Sept 30, 1996 Sep 1, 1995 - Feb 29, 1996
Oct 1, 1996 - Mar 31, 1997 Mar 1, 1996 - Aug 31, 1997
Apr 1, 1997 - Sep 30, 1997 Sep 1, 1996 - Feb 28, 1997
Oct 1, 1997 - Dec 31, 1997 Mar 1, 1996 - Aug 31, 1997
- - CONVERSION FEE FOR CEILING PRICE MATERIAL
.0114 body $.32
.0110 soft drink end $.73
.0110 tab (HI9) $.663
- - 1/2 of PPI adjustment on total ceiling price effective 1/l/97, based on PPI
12 month period Oct 95 - Sept 96.
- - FIXED MINIMUM VOLUMES FOR 1996 & 1997
-- can place 0 - 100% of fixed volume with ceiling price
-- once volume is fixed, must take during annual period
-- no meet competition provisions on the ceiling price material during
1996 and 1997
-- any volume in excess of the fixed volume commitment and any volume
not placed with this proposed mechanism can be placed with existing
price mechanisms with existing meet competition requirements for
conversion fees
-- the ALCAN banded price offer and other competitive responses to the
ALCAN offer are excluded from meet competition requirements
- - CLASS I TOLL
-- 15% of body stock shipments at 114 over body stock conversion price
- - SHIPMENTS TO US & CANADA ONLY
- - ALCOA AGREED UPON SHIP-TO LOCATIONS AND PRODUCT MIX
<PAGE> 72
- - ALCOA HAS RIGHT OF REFUSAL ON FIXED SHARE/VOLUME FOR 1998, 1999, 2000
-- No obligation to meet competitive offers/contracts in existence
prior to January 10, 1995
- - DEADLINE TO ACCEPT THIS PROPOSAL IS 9/22/95 AND TO ADVISE THE VOLUMES AT
CEILING PRICE IS NLT 9/29/95
- - OFFER IS VALID DURING OFFER PERIOD ONLY IF LME IS LESS THAN $1850/TONNE
DURING OFFER PERIOD
<PAGE> 1
CONFIDENTIAL
TREATMENT
REQUESTED*
EXHIBIT 10.3
CAN SUPPLY AGREEMENT
This Agreement is made this 20th day of November, 1995 between AMERICAN
NATIONAL CAN COMPANY, a Delaware corporation, with its principal offices at 8770
W. Bryn Mawr Avenue, Chicago, Illinois 60631 ("ANC"), and COCA-COLA ENTERPRISES
INC., with its principal offices at P.O. Box 723040, Atlanta, GA 31139-0040
("Buyer"), and covers the manufacture and supply by ANC to Buyer and the
purchase by Buyer of two-piece aluminum beverage can bodies and ends (herein
collectively referred to as "cans" or "containers") of the specifications and
quantities referred to hereinbelow.
WHEREAS, the parties are desirous of entering into a long-term supply
agreement covering certain of Buyers requirements of Containers; and
WHEREAS, the parties are desirous of establishing pricing for the
containers to be purchased and sold hereunder, with a floor and ceiling cost for
aluminum ingot ("Ingot Band") which will, over the term of this Agreement, limit
the extreme volatility which both parties have experienced in the recent past
with respect to can pricing and particularly with respect to aluminum costs; and
WHEREAS, in order to accomplish this goal of predictability of pricing,
the parties are willing to commit themselves to purchase and sell, as the case
may be, the quantity of containers stated herein utilizing aluminum covered by
an Ingot Band, and the parties recognize that each of them has the ability to
protect itself against the fluctuation in the cost of aluminum above or below
the Ingot Band by purchasing the appropriate downside or upside protection,
which is available in the marketplace.
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree as
follows:
- --------------------------
* Terms for which confidential treatment has been requested have been
omitted and are marked with an asterisk [*]. Confidential material has
been separately filed with the U.S. Securities and Exchange Commission
under an application for confidential treatment.
<PAGE> 2
2
1. Description of Products. This Agreement relates to containers of the
specifications set forth on Exhibit A attached hereto, required by Buyer at its
can filling location(s) set forth on Exhibit B (and at any additional or
substitute facilities designated by Buyer where Buyer may fill cans).
2. Term. The initial term of this Agreement shall be five (5) years
commencing January 1, 1996 and terminating December 31, 2000. This Agreement
shall be automatically extended for one additional year beyond the initial term
(i.e., until December 31, 2001) if, during the period July 1, 1999 through
December 31, 1999, the daily London Metal Exchange cash settlement price for
aluminum ingot plus the Midwest premium for that ingot (the "Midwest Ingot
Price") is outside of the Ingot Band (i.e., above the ceiling cost or below the
floor cost) referenced on Exhibit C attached hereto, on more than 75% of the
dates when the market is open.
3. Volume.
(a) Buyer agrees to buy and ANC agrees to sell, in each calendar year
during the term of this Agreement, 7 billion cans. Can bodies and ends shall be
purchased by Buyer and supplied by ANC in substantially equal volumes.
(b) The foregoing annual volume of containers to be purchased hereunder
may not be changed by Buyer during the terms of this Agreement without the
written consent of ANC although ANC will use its commercially reasonable best
efforts to accommodate year over year changes hereafter requested by Buyer in
its annual volume.
(c) ANC will not be required to provide more than 57% of Buyers annual
band-priced volume hereunder in either of the following six month periods
throughout the term hereof: (i) April 1 through September 30; (ii) October 1
through March 31.
(d) Buyers annual forecasts of volume, provided for under paragraph 6
below, shall each contain a breakdown of forecasted volumes for each location
set forth on Exhibit B (and any additional or substitute Buyer filling
locations), which forecasts shall remain in effect until adjusted by Buyer upon
reasonable advance notice to ANC; provided, however, that such adjustments shall
not affect Buyers purchase commitment set forth in Paragraph 3(a) above.
4. Pricing.
(a) Prices under this Agreement shall be established and adjusted in
accordance with the terms, conditions and limitations set forth on Exhibit C
attached hereto. In addition to the price adjustment mechanisms set forth on
Exhibit C, any changes in the specifications of containers supplied hereunder
may result in an upward or downward price adjustment.
<PAGE> 3
3
(b) ANC will in no event be required to meet competitive band formulas
or other competitive offers driven by lower metal costs; however, and
notwithstanding the foregoing, ANC intends to be competitive with specific
offers not driven by lower metal costs.
(c) Buyer and ANC recognize and agree that fluctuations in the price of
aluminum may drive the spot price of aluminum above the ceiling price or below
the floor price of the Ingot Band, as such ceiling and floor prices may be
adjusted from time to time in accordance with Exhibit C. However, Buyer and ANC
agree to purchase and sell the quantities agreed to hereunder with aluminum
ingot costs no higher than such ceiling prices nor lower than such floor prices
notwithstanding any such fluctuations. The parties recognize that protection
against any such market fluctuation is available to be purchased in the
marketplace.
(d) Buyer and ANC agree to share equally in any savings resulting from
reductions in the amount of metal used to make cans. Buyers share of such
savings will be passed along to Buyer only after ANC has recovered the cost of
any expenditures made by it in connection with the implementation of such metal
reductions.
5. Payment Terms. Payment terms shall be: 1% 10, net 30 days. Interest
shall be assessed on all past-due amounts at the annual rate of two (2%) percent
above the prime rate of interest at the First National Bank of Chicago, Chicago,
Illinois.
6. Delivery. Buyer shall advise ANC, prior to October 31, of its annual
requirements of containers under this Agreement for the upcoming calendar year
(the "Forecasted Volume"). ANC shall not be required under any circumstances to
sell band priced containers to Buyer in excess of such Forecasted volume. If the
Forecasted Volume is in excess of or less than the volume referred to in
subparagraph 3(a) above, ANC shall only be required to use its commercially
reasonable best efforts to provide such excess to Buyer or accommodate such
shortfall. In the event that the Forecasted Volume is in excess of the volume
referenced in subparagraph 3(a), ANC shall first attempt to secure metal within
the then current band pricing range. If ANC is unsuccessful in securing band
pricing for such excess, then ANC shall so advise Buyer and Buyer shall notify
ANC whether ANC should purchase metal to satisfy such excess requirements. If
Buyer requests ANC to purchase such metal, the metal price shall be based on the
Midwest Ingot Price on the date ANC purchases the metal.
7. Effect of Termination. Upon termination of this Agreement, for any
reason, Buyer shall accept all completed, specially fabricated or lithographed
containers and related items previously ordered, acquired or committed for by
ANC in reasonable quantities in anticipation of Buyer's normal can requirements.
8. Warranties, Claims and Limitation of Liability.
<PAGE> 4
4
(a) ANC hereby warrants to Buyer that the containers to be manufactured
and sold to Buyer hereunder shall be free from defects in workmanship and
materials, and shall conform to the specifications set forth in Exhibit A
attached hereto. EXCEPT AS EXPRESSLY STATED ABOVE, THERE ARE NO OTHER WARRANTIES
OF ANY KIND, EXPRESS OR IMPLIED INCLUDING, BUT NOT LIMITED TO, THE IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
(b) ANC shall not be liable to Buyer or to any other person where the
claimed damages result from: (1) Buyers faulty assembly or closure of the can
body and loose end; (2) rust or outside corrosion on containers occurring after
Buyers receipt, except when caused by ANCs faulty workmanship or imperfect
materials; (3) the failure of Buyer (or any other party excluding ANC from time
to time having custody or control of allegedly defective goods) to exercise
reasonable care in conveying, warehousing, using, packing, handling,
distributing or storing filled or unfilled containers; or (4) the failure of
empty or filled containers exported or used in foreign countries unless a
special warranty has been specifically approved by ANC to cover such exported
containers.
(c) Seller shall give immediate consideration to settlement of Buyer's
claims, but in no event shall Seller be liable on any claim unless notice
thereof is received by ANC promptly following Buyer's discovery of an alleged
defect in a container.
(d) ANC's liability to Buyer hereunder shall be limited to Buyer=s cost
of the defective containers, cost of the contents of the containers lost as a
direct result of the defect, and the reasonable cost of recovery and disposition
of defective containers (but as to the latter, only to the extent reasonably
required). ANC shall also be responsible for claims by third parties (including
governmental entities) to the extent arising out of a container defect provided
that ANC is given adequate notice of such claim and the opportunity to defend
such claim by counsel of its own choosing.
9. Force Majeure. Except for the payment of money due hereunder, ANC
and Buyer shall be excused for failure to perform under this Agreement where
such failure results from circumstances beyond the affected parties reasonable
control including, without limitation, such circumstances as fire, storm, flood,
earthquake, strikes, work stoppages or slowdowns, delay or failure of
transportation or suppliers, acts of the public enemy, acts of God or acts,
regulations, priorities or actions of the United States, a state or any local
government or agents or instrumentalities thereof.
10. Notices. All notices, requests or other communications shall be in
writing, and shall be deemed given when delivered personally or deposited in the
United States mail, postage prepaid, or to a courier service and properly
addressed to Buyer at: P.O. Box 723040, Atlanta, GA 31139-0040, Attention
Raymond J. Malone, Director of Purchasing and Lowry F. Kline, General Counsel,
and to ANC at: 8770 W. Bryn Mawr Ave., Chicago, IL 60631, Attention:
<PAGE> 5
5
Sales Department, or to such other address as either party may, from time to
time, designate to the other in writing.
11. Assignability. This Agreement shall be binding upon and inure to
the benefit of the successors and assigns of the parties hereto including,
without limitation, a subsidiary, a purchaser, transferee or successor by merger
of substantially all of the business or assets of either Buyer or ANC. Buyer
hereby agrees to require the purchaser or transferee of all or any portion of
its can filling operations to assume that portion of this requirements contract
that relates to the portion of its operations being sold or transferred.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
AMERICAN NATIONAL CAN COMPANY COCA-COLA ENTERPRISES INC.
By: /s/ James R. Turner By: /s/ Henry A. Schimberg
------------------------ ------------------------------
James R. Turner Henry A. Schimberg
Title: Senior Vice President, Sales Title: President and Chief Operating
Officer
<PAGE> 6
EXHIBIT A
12 Ounce Aluminum Can Body
- 4 prints on metal
202 Diameter Aluminum Stay-On-Tab Ends
Cans must meet or exceed specifications, performance and quality criteria as
mandated by The Coca-Cola Company as they may change from time to time.
<PAGE> 7
EXHIBIT B
BUYER'S FILLING LOCATION(S)
1. Downey, CA
2. College Park, GA
3. Houston, TX
4. Eagan, MN
5. Baltimore, MD
6. San Leandro, CA
7. Orlando, FL
8. Cincinnati, OH
9. Lenexa, KS
10. Twinsburg, OH
11. Ft. Worth, TX
12. Phoenix, AZ
13. Hollywood, FL
14. West Memphis, AR
15. Bellevue, WA
16. Needham Heights, MA
17. Dallas, TX
18. Cleveland, TN
19. Jacksonville, FL
20. Detroit, MI
21. Sandston, VA
22. Denver, CO
23. Mattoon, IL
24. Gretna, LA
25. Wilsonville, OR
26. Maryland Heights, MO
27. San Diego, CA
28. Grand Rapids, MI
29. Austin, TX
30. Little Rock, AR
31. Flint, MI
32. Honolulu, HI
33. Wichita, KS
34. McAllen, TX
<PAGE> 8
EXHIBIT C
================================================================================
MECHANISMS FOR ADMINISTRATION OF PRICING OF CONTAINERS
================================================================================
1. Can Price Components. Prices of cans to be purchased and sold
hereunder will be determined by reference to changes in the following 3 cost
components:
(a) Cost of aluminum ingot ("ingot cost");
(b) Cost of conversion of ingot into can, end or tab sheet ("ingot
conversion cost"); and
(c) Cost of conversion of can, end and tab sheet into finished
containers ("can sheet conversion cost").
2. Initial Can Price. Effective January 1, 1996, the base price for cans
to be supplied to you under this agreement will be * per thousand 12 ounce cans
and 202 ends. This price is based upon an ingot cost of * per pound, an ingot
conversion cost of * per pound for * gauge body stock, * per pound for * gauge
clear soft drink end stock and * per pound for tab stock. This base price will
be adjusted as of January 1, 1996 to reflect any changes in the above ingot cost
and ingot conversion cost assumptions as follows: the ingot cost will be
determined based upon the average of the daily Platt's Metals Week transaction
prices (i.e., the straight arithmetic average official London Metal Exchange
(LME) cash settlement prices plus the Midwest Premium on such prices) during the
period June 1, 1995 through November 30, 1995. The ingot conversion cost is not
yet set but is expected to change by about * per pound to cover increases in the
cost of coating materials on ends and tabs only. Changes by Buyer to the
specifications set forth in Exhibit A prior to January 1, 1996 may also result
in an adjustment to the base price.
An example of the January 1, 1996 base price calculation is set forth
in Attachment 1.
3. Adjustments to Can And End Pricing Within The Band. Prices for all
Containers (cans and ends) covered by this Agreement will be adjusted every six
months on April 1 and October 1, with the first such adjustment taking place on
April 1, 1996. These price adjustments will be driven by changes in the cost of
the three components described in paragraph 1 above as follows:
(a) Price adjustments reflecting changes in ingot cost will be
determined by reference to the average of the daily Platt's Metals Week
transaction prices (i.e., the straight arithmetic average official London Metal
Exchange cash settlement prices plus the Midwest Premium on such prices) during
a six-month period prior to the particular adjustment date (the Average Ingot
Price). For the April 1 adjustment date, the six-month averaging period will be
between September 1 and February 28 immediately preceding such April 1 date. For
the October 1 adjustment date, the averaging period will be from March 1 to
August 31 immediately preceding such October 1 date (i.e., for the April 1, 1996
adjustment date, the relevant averaging period will be September 1, 1995 to
February 28, 1996 and for the October 1, 1996 adjustment date, the
<PAGE> 9
2
relevant averaging period will be from March 1, 1996 to August 31, 1996). An
example of the impact of an ingot cost change on the can price is shown in
Attachment 2.
Notwithstanding the foregoing and subject to the adjustments described
below, ingot cost, inclusive of the Midwest Premium for such ingot, will never
be higher than a ceiling cost of * per pound or lower than a floor cost of $0.70
per pound (the "ingot band"). Such ingot band will remain fixed until April 1,
1997, at which time such band will be adjusted in the amount of * of the
percentage change in the monthly average Producer Price Index for Intermediate
Materials, Supplies and Components as reported in Table 1 of the monthly
"Summary Data From the Producer Price Index News Release" (hereafter called the
Producer Price Index) for the period January 1, 1996 through December 31, 1996
over the average for the January 1, 1995 through December 31, 1995 period. The
ingot band will be similarly adjusted on April 1 of 1998, 1999, 2000 and 2001 if
this Agreement is extended in accordance with the term of this Agreement. All
adjustments will be based on the changes in the Producer Price Index for the
calendar year immediately preceding the adjustment date. An example of a
calculation of the ingot band adjustment is set forth below:
EXAMPLE OF CALCULATION OF INDEX CHANGE:
<TABLE>
<S> <C>
Index Average for the period January 1, 1995 to December 31, 1995 102.0 (Straight average of each monthly index for period
January 1, 1995 to December 31, 1995)
Index Average for the period January 1, 1996 to December 31, 1996 104.0 (Straight average of each monthly index for period
January 1, 1996 to December 31, 1996)
Percentage Change 1.96%
Half of Percentage Change 0.98%
</TABLE>
EFFECT OF ABOVE INDEX CHANGE ON FLOOR AND CEILING INGOT COSTS:
Ingot Cost per Pound Prior Effective April 1, 1997
-------------------- ----- -----------------------
Floor Price $0.70 x 1.0098 = $0.707
Ceiling Price * x 1.0098 = *
(b) Price adjustments reflecting changes in both the ingot conversion
cost and the can sheet conversion cost will not be implemented until April 1,
1997. At that time, increases in such conversion costs will be no more than * of
the year over year Producer Price Index increase described in paragraph 3(a)
above with reference to adjustments to the ingot band. This adjustment procedure
will be repeated on April 1 of 1998, 1999, 2000, and 2001 if this contract is
extended for an additional year. An example of the impact of conversion cost
changes on the can price is set forth in Attachment 3.
(c) The parties agree that in the event of significant chances in the
cost of items which are not reflected in the Producer Price Index, the parties
will meet to discuss making appropriate adjustments for these items.
(d) All price adjustments reflecting changes in costs shall be
supported by detailed documentation reasonably acceptable to Buyer.
<PAGE> 10
========================================================
BAND PRICE FORMULA -----------------
ATTACHMENT 1
AMERICAN NATIONAL CAN CO. -----------------
========================================================
ASSUMPTIONS FOR JANUARY 1, 1996:
AVERAGE MIDWEST INGOT JUNE 1 TO NOVEMBER 30, 1995 IS $.83 PER POUND
COST TO CONVERT END AND TAB INGOT INCREASES $.02 PER POUND
<TABLE>
<S> <C> <C>
EXAMPLE ONLY
- --------------------------------------------------------------------------------------------------------------------------
BASE PRICE FOR 1996 CARBONATED SOFT DRINK
12 OZ ALUMINUM CAN AND 202 END $71.82
------
- --------------------------------------------------------------------------------------------------------------------------
FORMULA FOR CHANGES
- --------------------------------------------------------------------------------------------------------------------------
1) CHANGE IN ALUMINUM INGOT PRICE (LME PLUS MIDWEST PREMIUM)
PRIOR NEW CHANGE
----- --- ------
* * * PER POUND X 25 PER M CANS ($0.50)
* * * PER POUND X 6 PER M ENDS ($0.12)
2) CHANGE IN PRICE TO CONVERT INGOT TO COILED SHEET
PRIOR NEW CHANGE
----- --- ------
* * * PER POUND X 31 PER M CANS 0.0112 $0.00
* * * PER POUND X 6 PER M ENDS 0.0086 $0.12
* * * PER POUND X 1 PER M TABS 0.0100 $0.02
3) CHANGE IN ANC'S PRICE TO MANUFACTURE AND DELIVER FINISHED PRODUCT
PRIOR NEW CHANGE
----- --- ------
* * * PER THOUSAND (* OF PPI INDEX CHANGE AS DEFINED) $0.00
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
NEW CONTAINER PRICE $71.34
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 11
========================================================
BAND PRICE FORMULA -----------------
ATTACHMENT 2
AMERICAN NATIONAL CAN CO. -----------------
========================================================
ASSUMPTIONS FOR APRIL 1, 1996:
AVERAGE MIDWEST INGOT JUNE 1 TO NOVEMBER 30, 1995 TO FEBRUARY 28, 1996
IS $.82 PER POUND
<TABLE>
<S> <C> <C>
EXAMPLE ONLY
- --------------------------------------------------------------------------------------------------------------------------
JANUARY 1, 1996 PRICE CARBONATED SOFT DRINK (SEE ATTACHMENT 1)
12 OZ ALUMINUM CAN AND 202 END $71.34
------
- --------------------------------------------------------------------------------------------------------------------------
FORMULA FOR CHANGES
- --------------------------------------------------------------------------------------------------------------------------
1) CHANGE IN ALUMINUM INGOT PRICE (LME PLUS MIDWEST PREMIUM)
PRIOR NEW CHANGE
----- --- ------
* * * PER POUND X 25 PER M CANS ($0.25)
* * * PER POUND X 6 PER M ENDS ($0.06)
2) CHANGE IN PRICE TO CONVERT INGOT TO COILED SHEET
PRIOR % NEW CHANGE
----- --- --- ------
* * * * PER POUND X 31 PER M CANS 0.0112 $0.00
* * * * PER POUND X 6 PER M ENDS 0.0086 $0.00
* * * * PER POUND X 1 PER M TABS 0.0100 $0.00
3) CHANGE IN ANC'S PRICE TO MANUFACTURE AND DELIVER FINISHED PRODUCT
PRIOR % NEW CHANGE
----- --- --- ------
* * * * * PER THOUSAND (* OF PPI INDEX CHANGE AS DEFINED) $0.00
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
NEW CONTAINER PRICE $71.03
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 12
========================================================
BAND PRICE FORMULA -----------------
ATTACHMENT 3
AMERICAN NATIONAL CAN CO. -----------------
========================================================
ASSUMPTIONS FOR APRIL 1, 1997:
AVERAGE MIDWEST INGOT SEPTEMBER 1, 1995 TO FEBRUARY 28, 1996 IS $.80
PER POUND PPI INDEX INCREASES 2%, THEREFORE FORMULA FACTOR CHANGES BY 1%
<TABLE>
<S> <C> <C>
EXAMPLE ONLY
- --------------------------------------------------------------------------------------------------------------------------
APRIL 1, 1996 CARBONATED SOFT DRINK
12 OZ ALUMINUM CAN AND 202 END $71.03
------
- --------------------------------------------------------------------------------------------------------------------------
FORMULA FOR CHANGES
- --------------------------------------------------------------------------------------------------------------------------
1) CHANGE IN ALUMINUM INGOT PRICE (LME PLUS MIDWEST PREMIUM)
PRIOR NEW CHANGE
----- --- ------
* * * PER POUND X 25 PER M CANS ($0.50)
* * * PER POUND X 6 PER M ENDS ($0.12)
2) CHANGE IN PRICE TO CONVERT INGOT TO COILED SHEET
PRIOR % NEW CHANGE
----- --- --- ------
* * * * PER POUND X 31 PER M CANS 0.0112 $0.10
* * * * PER POUND X 6 PER M ENDS 0.0086 $0.05
* * * * PER POUND X 1 PER M TABS 0.0100 $0.01
3) CHANGE IN ANC'S PRICE TO MANUFACTURE AND DELIVER FINISHED PRODUCT
PRIOR % NEW CHANGE
----- --- --- ------
* * * * PER THOUSAND (* OF PPI INDEX CHANGE AS DEFINED) $0.28
- --------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------
NEW CONTAINER PRICE $70.85
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 13
[ANC Letterhead]
January 4, 1996
Mr. Ray Malone
Coca-Cola Enterprises, Inc.
P.O. Box 723040
Atlanta, Georgia 31139-0040
Dear Ray:
This letter will serve as an addendum to Exhibit C of the can supply agreement
sent to you on October 6, 1995.
1. Your invoice price effective January 1, 1996 will be * per
thousand based on * per pound aluminum as defined in the
agreement. This will not change during 1996.
2. Notwithstanding paragraph 1 above, your price will be
adjusted, effective January 1, 1996, to * per thousand based
on * as outlined above. Price adjustments due to changes in
the metal cost from the * per pound base will be handled on a
credit-memo basis consistent with the other credits referred
to in this memo.
3. Your payment terms are *.
4. Beginning on January 1, 1996, * will be credited based upon
all purchases made by you from us under the agreement or
otherwise.
5. Beginning on January 1, 1998, * purchased by you from us will
be credited based upon all purchases by you under the
agreement or otherwise (so that the total rebate due you for
cans and ends purchased on and after January 1, 1998 pursuant
to items 4 and 5 will be *).
<PAGE> 14
ADDENDUM TO EXHIBIT C OF THE CAN SUPPLY AGREEMENT OF 10/06/95
Page 2
6. During the term of our band agreement, if the Floor Ingot Cost
as defined in such agreement is in effect, we will rebate to
you *.
All of the above rebates will be remitted to you through the issuance of
quarterly credit memos. Should you have any questions, please feel free to call
me.
Very truly yours,
/s/ James R. Turner
--------------------------------------
James R. Turner
Senior Vice President, Sales
Beverage Cans Americas
American National Can Company
