SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-3855
LACLEDE STEEL COMPANY
(Exact name of Registrant as specified in its charter)
Delaware 43-0368310
(State or other jurisdiction of I.R.S. Employer
incorporation or organization) Identification No.
One Metropolitan Square, St. Louis, Missouri 63102
(Address of principal executive offices)
(Zip code)
314-425-1400
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
As of July 31, 1996 there were 4,056,140 shares of $13.33
par value common stock outstanding.<PAGE>
LACLEDE STEEL COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AND RETAINED EARNINGS
(In Thousands Except Per Share Data)
Second Quarter EndeYear to Date
June 30, June 30,
1996 1995 1996 1995
Net sales 86,436 80,858 167,411 168,185
Costs and expenses:
Cost of products sold 83,245 70,809 159,303 146,924
Selling, general and administrative 3,428 3,502 6,880 7,131
Depreciation 1,915 2,087 3,906 4,003
Interest expense, net 2,831 2,524 5,596 4,701
Gain on sale of subsidiary stock -- (728) -- (728)
Total costs and expenses 91,419 78,194 175,685 162,031
Earnings (loss) before income taxes (4,983) 2,664 (8,274) 6,154
Provision (credit) for income taxes (1,938) 882 (3,198) 2,278
Net earnings (loss) (3,045) 1,782 (5,076) 3,876
Retained earnings (deficit) at beginning (4,346) 9,916 (2,315) 7,822
Retained earnings (deficit) at end of per (7,391) 11,698 (7,391) 11,698
Net earnings (loss) per share (0.75) 0.44 (1.25) 0.96
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<PAGE>
LACLEDE STEEL COMPANY
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
(In Thousands)
Jun. 30, Dec. 31,
1996 1995
Current Assets:
Cash and cash equivalents 143 161
Accounts receivable, less allowances 42,760 37,287
Prepaid expenses 342 744
Income taxes recoverable -- 1,479
Inventories:
Finished 54,845 56,377
Semi-finished 22,504 28,683
Raw materials 9,956 8,415
Supplies 14,635 13,807
Total inventories 101,940 107,282
Total Current Assets 145,185 146,953
Non-Current Assets:
Intangible pension asset 16,409 17,409
Other intangible assets 2,335 2,407
Bond funds in trust 2,385 2,385
Prepaid pension contributions 7,735 6,586
Deferred income taxes 47,295 44,062
Notes receivable 3,600 --
Other 3,722 3,785
Total Non-Current Assets 83,481 76,634
Plant and Equipment, at cost 243,825 243,573
Less - accumulated depreciation 120,947 117,382
Net Plant and Equipment 122,878 126,191
Total Assets 351,544 349,778
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<PAGE>
LIABILITIES AND STOCKHOLDERS' EQUITY
Jun. 30, Dec. 31,
1996 1995
Current Liabilities:
Accounts payable 39,577 31,617
Accrued compensation 6,948 7,667
Current portion of long-term debt 2,459 2,459
Accrued costs of pension plans 15,449 15,449
Other 2,814 2,002
Total Current Liabilities 67,247 59,194
Non-Current Liabilities:
Accrued costs of pension plans 66,100 67,123
Accrued postretirement medical benefits 81,681 81,431
Other 6,409 6,721
Total Non-Current Liabilities 154,190 155,275
Long-Term Debt:
Bank revolving credit 85,131 84,541
Bank term loan 6,064 6,780
Revenue bonds 25,470 25,470
Other 2,000 2,000
Total Long-Term Debt 118,665 118,791
Stockholders' Equity:
Preferred stock, without par value, authorized
2,000,000 shares with none issued -- --
Common stock, $13.33 par value, authorized
5,000,000 shares with 4,056,140 shares issued 54,081 54,081
Capital in excess of par value 247 247
Retained earnings (deficit) (7,391) (2,315)
Minimum pension liability adjustment (35,495) (35,495)
Total Stockholders' Equity 11,442 16,518
Total Liabilities and Stockholders' Equity 351,544 349,778
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<PAGE>
LACLEDE STEEL COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
Six Months Ended
June 30,
1996 1995
Cash flows from operating activities:
Net earnings (loss) (5,076) 3,876
Adjustments to reconcile net earnings (loss) to
net cash provided by (used in) operating activities:
Depreciation 3,906 4,003
Gain on sale of subsidiary stock -- (728)
Change in deferred income taxes (3,233) 1,093
Changes in assets and liabilities that
provided (used) cash:
Accounts receivable (5,473) 5,432
Inventories 5,342 (12,899)
Accounts payable and accrued expenses 9,596 (5,452)
Pension cost less than funding (1,172) (1,372)
Accrued postretirement medical benefits 250 109
Other assets and liabilities 151 444
Net cash provided by (used in) operating activi 4,291 (5,494)
Cash flows used in investing activities:
Capital expenditures (8,183) (5,290)
Proceeds from sale of equipment 4,000 --
Net cash used in investing activities (4,183) (5,290)
Cash flows from financing activities:
Net borrowings under revolving credit 590 8,722
Payments on long-term debt (716) (761)
Proceeds from long term debt -- 2,000
Proceeds from sale of subsidiary stock -- 1,000
Payment of financing costs -- (177)
Net cash provided by (used in) financing activi (126) 10,784
Cash and cash equivalents:
Net increase (decrease) during the period (18) --
At beginning of year 161 159
At end of period 143 159
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<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - GENERAL
The accompanying unaudited consolidated financial statements
include the accounts of Laclede Steel Company and its wholly-owned
subsidiaries. All intercompany accounts and transactions
have been eliminated. The consolidated financial statements
reflect all adjustments (such adjustments are of a normal
recurring nature unless otherwise disclosed in these interim
financial statements) which are in the opinion of Management
necessary for a fair statement of the results for the interim
periods.
NOTE 2 - SALE OF STOCK OF SUBSIDIARY
In the second quarter of 1995 the Company completed the sale of
approximately 3% of the common stock of its subsidiary, Laclede
Mid America Inc. Accordingly a non-taxable gain of $728,000
was recognized, which represents the excess of the sales price
over the net book value of the stock sold.
NOTE 3 - EARNINGS PER SHARE
Earnings per share amounts have been calculated based on
weighted average shares outstanding of 4,056,140.
NOTE 4 - INCOME TAXES
The provision for income taxes represents an effective combined
federal and state tax rate of 39% for the six months ended June
30, 1996 and 37% for the six months ended June 30, 1995. The
lower effective rate in 1995 reflects the non-taxable gain on
sale of subsidiary stock.
NOTE 5 - PREFERRED STOCK
In July 1996 the Company issued 366,667 and 50,000 shares of
Series A 6% preferred stock to Ivaco Inc. and the executive
officers of the Company, respectively and received
approximately $6,200,000 after expenses. In connection with
the issuance of the preferred stock, the Board of Directors of
the Company has recommended to the stockholders an amendment to
the Company's Certificate of Incorporation which would reduce
the par value of each share of common stock from $13.33 per
share to $0.01 per share and increase the number of authorized
- 5 -<PAGE>
common stock shares from 5,000,000 shares to 25,000,000 shares.
If the stockholders approve the change in the par value of the
common stock, the stockholders will also be requested to
approve the recapitalization of the Company's Series A 6%
preferred stock to convertible preferred stock and the issuance
of up to 83,333 shares of Series A convertible preferred stock
to Ivaco Inc. pursuant to Ivaco Inc's. standby commitment to
purchase such shares. The preferred stock will then become
convertible into common stock at the option of the holder. If
the stockholders do not approve the reduction in the par value
of the common stock from $13.33 per share to $0.01 per share
and the increase in the number of authorized common shares from
5,000,000 shares to 25,000,000 shares, the Series A 6%
preferred stock sold to Ivaco Inc. and to the executive
officers will become 8% redeemable preferred stock effective
January 1, 1997, and will become immediately redeemable at the
option of the holder upon 30 days prior notice to the Company.
The financial results for 1996 are subject to annual audit.
- 6 -<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION & ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Liquidity and Capital Resources
In the first half of 1996 operating activities provided $4.3
million in cash. Capital expenditures were $8.2 million, and
contributions to Company pension plans totaled $6.6 million.
Increases in accounts receivable of $5.5 million were primarily
offset by decreases in inventory of $5.3 million, while accounts
payable and accrued expenses increased by $9.6 million. Proceeds
from a sale-leaseback transaction increased cash flow by $4.0
million in the second quarter. Net working capital decreased by
$9.8 million and the ratio of current assets to current
liabilities was 2.2 to 1.0 at June 30, 1996.
At June 30, 1996, $85.1 million in borrowings were outstanding
under the Company's revolving credit facility which approximates
the amount available.
In July 1996, the Company issued a total of $6.25 million in
Series A Preferred Stock to its largest stockholder, Ivaco Inc.,
and to executive officers of the Company. The Company also plans
to pursue a Rights Offering to existing holders of its common
stock. Under terms of this offering stockholders will have the
right to purchase up to $9.7 million of 6% preferred stock, which
will be convertible to common stock at a discount of 20% from the
average closing price of the common stock for the ten day period
preceding stockholder approval of the transaction. This offering
is in addition to the $6.2 million private placement of preferred
stock referred to above. The Rights Offering is subject to
review by the Securities and Exchange Commission and a favorable
vote by at least two thirds of common stockholders, which is
required to make necessary changes to the capital structure of
the Company. The stockholders' meeting to vote on this proposal
will be scheduled after review of the Company's proxy statement
by the Securities and Exchange Commission. The Rights Offering
will be made only by means of a prospectus.
The Company has amended its Loan and Security Agreement
effective June 30, 1996 modifying financial covenants relating to
operating losses and net worth. In the event further amendment
to financial covenants is necessary because operating losses
exceed the limits of the amended covenants, there can be no
assurance that the Company will be able to obtain such amendment.
Although the total revolving credit facility under the Loan and
Security Agreement was not affected by the June 30 Amendment,
amounts available based on Company inventory levels were reduced
by $2.5 million, effective June 30, 1996, and will be reduced by
an additional $4.5 million by December 31, 1996. The Company
believes that planned inventory reductions will equal or exceed
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the reduction in revolving credit availability and, thus, this
change in the terms of the Loan and Security Agreement should not
affect current availability. Maximum availability under the Loan
and Security Agreement in the fourth quarter of 1996, however, is
estimated to be approximately $85 million. During the last six
months of 1996 the Company anticipates capital expenditures of
approximately $2.5 million, and contributions to pension plans of
$9.4 million. Based on current sales prices, announced price
increases and currently anticipated productivity improvements,
normal operating activities will generate sufficient cash flow to
finance these expenditures. Without the purchase by existing
stockholders of a significant portion of the Rights
Offering, however, the Company may be required to extend payment
terms for certain suppliers, obtain additional financing or
consider the sale of certain assets.
Results of Operations
Net sales decreased by $.8 million or .4% in the first half of
1996 compared to the first half of 1995, reflecting a 13.6%
decrease in average selling prices for steel products, offset by
a 13.8% increase in steel shipments. Cost of products sold
increased by $12.4 million or 8.4% in the first half of 1996
compared to the first half of 1995. The increase in cost of
products sold reflects the increase in steel shipments. The
overall decline in selling prices resulted in a significant
reduction in product margins and was the most significant reason
for first half operating losses.
Second quarter 1996 net sales increased by $5.6 million, or
6.9% over the second quarter of 1995, reflecting a 24% increase
in steel shipments, partially offset by a decrease in average
selling prices of approximately 14%. Both the higher shipping
volume and lower average price reflect an increase in shipments
of semi-finished steel, sold at lower prices than the Company's
finished products.
Cost of products sold in the second quarter of 1996 increased
by $12.4 million or 17.5% over the comparable period of 1995.
The increase in cost of products sold was proportionately less
than the increase in shipments because of the change in product
mix referred to above. In general the Company incurred higher
production and maintenance costs per ton for its finished
products in the second quarter of 1996.
The increase in interest expense in the first half of 1996 is
primarily the result of an increase in bank borrowings and an
increase in the average interest rate of approximately 55 basis
points.
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
(4)(a) Registrant's Loan and Security Agreement dated as of
September 7, 1994. (Incorporated by reference to
Exhibit (4)(a) in Registrant's quarterly report on Form
10-Q for September 30, 1994.)
(4)(b) First Amendment dated February 15, 1995 to Registrant's
Loan and Security Agreement. (Incorporated by
reference to Exhibit (4)(b) in Registrant's Annual
Report on Form 10-K for the fiscal year ended December
31, 1994.)
(4)(c) Second Amendment dated May 10, 1995 to Registrant's
Loan and Security Agreement. (Incorporated by
reference to Exhibit (4)(c) in Registrant's Quarterly
Report on Form 10-Q for the period ended September 30,
1995.)
(4)(d) Third Amendment dated June 1, 1995 to Registrant's Loan
and Security agreement. (Incorporated by reference to
Exhibit (4)(c) in Registrant's Quarterly Report on Form
10-Q for the period ended September 30, 1995.)
(4)(e) Fourth Amendment dated December 7, 1995 to Registrant's
Loan and Security Agreement. (Incorporated by
reference to Exhibit (4)(e) in Registrant's Annual
Report on Form 10-K for the fiscal year ended December
31, 1995.)
(4)(f) Fifth Amendment dated January 26, 1996 to Registrant's
Loan and Security Agreement. (Incorporated by
reference to Exhibit (4)(f) in Registrant's Annual
Report on Form 10-K for the fiscal year ended December
31, 1995.)
(4)(g) Sixth Amendment dated June 26, 1996 to the Company's
Loan and Security Agreement.
(4)(h) Seventh Amendment dated July 30, 1996 to the Company's
Loan and Security Agreement.
- 9 -<PAGE>
(4)(i) Certificate of Designation of Series A Preferred Stock.
(10)(a) Stock Purchase Agreement dated July 30, 1996 between
Ivaco Inc. and Laclede Steel Company.
(10)(b) Management Stock Purchase Agreements dated July 30,
1996 between Laclede Steel Company and John B.
McKinney, Michael H. Lane, J. William Hebenstreit,
Larry J. Schnurbusch and H. Bruce Nethington.
(10)(c) Restated Employment Agreements dated as of July 30,
1996, between Laclede Steel Company and John B.
McKinney, Michael H. Lane, J. William Hebenstreit,
Larry J. Schnurbusch and H. Bruce Nethington.
(10)(d) Registration Rights Agreement dated July 30, 1996
between Laclede Steel Company and Ivaco, Inc., John B.
McKinney, Michael H. Lane, J. William Hebenstreit,
Larry J. Schnurbusch and H. Bruce Nethington.
(10)(e) Amendments to the Key Employee Retirement Plan dated
July 30, 1996.
Instruments with respect to long-term debt issues have
been omitted where the amount of securities authorized
under such instruments does not exceed 10% of the total
consolidated assets of the Registrant. Registrant
hereby agrees to furnish a copy of any such instrument
to the Commission upon its request.
(b) Reports on Form 8-K.
No reports on Form 8-K have been filed during the
quarter.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly
authorized.
LACLEDE STEEL COMPANY
(Registrant)
/s/ Michael H. Lane
Michael H. Lane
Vice President - Finance
Treasurer and Secretary
Duly Authorized Officer and
Principal Financial Officer
Date: August 14, 1996
<PAGE>
AMENDMENT NO. 6
TO
LOAN AND SECURITY AGREEMENT
This Amendment No. 6 to Loan and Security Agreement dated as
of June 26, 1996 (the "Amendment"), is entered into among
BANKAMERICA BUSINESS CREDIT, INC., a Delaware corporation
("BABC"), THE BANK OF NEW YORK COMMERCIAL CORPORATION, a New York
corporation ("BNYCC"), THE BOATMEN'S NATIONAL BANK OF ST. LOUIS,
a national banking association ("Boatmen's") (BABC, BNYCC and
Boatmen's and their respective successors and assigns being
sometime hereinafter referred to collectively as the "Lenders"
and each of BABC, BNYCC and Boatmen's and its successors and
assigns being sometimes hereinafter referred to individually as a
"Lender"), BANKAMERICA BUSINESS CREDIT, INC., a Delaware
corporation, as agent for the Lenders (in such capacity as agent,
the "Agent"), LACLEDE STEEL COMPANY, a Delaware corporation (the
"Parent"), and LACLEDE CHAIN MANUFACTURING COMPANY, a Delaware
corporation ("Laclede Chain"), and LACLEDE MID AMERICA INC., an
Indiana corporation ("Laclede Mid America") (the Parent, Laclede
Chain and Laclede Mid America being sometimes referred to
collectively as the "Borrowers" and each of the Parent, Laclede
Chain and Laclede Mid America being sometimes hereinafter
referred to individually as a "Borrower").
W I T N E S S E T H :
WHEREAS, the Borrowers, the Lenders and the Agent are
parties to a certain Loan and Security Agreement, dated as of
September 7, 1994 (the "Loan Agreement"); and
WHEREAS, the Loan Agreement was amended by Amendment No. 1
to Loan and Security Agreement dated as of February 15, 1995,
Amendment No. 2 to Loan and Security Agreement dated as of April
30, 1995, Amendment No. 3 to Loan and Security Agreement dated as
of June 1, 1995, Amendment No. 4 to Loan and Security Agreement
dated as of December 7, 1995, and Amendment No. 5 to Loan and
Security Agreement dated as of January 26, 1996 (the Loan
Agreement, as amended, supplemented, and modified to the date
hereof being hereinafter referred to as the "Amended Loan
Agreement"). Capitalized terms used herein but not defined
herein shall have the meanings provided in the Amended Loan
Agreement; and
WHEREAS, the Borrower, the Lender and the Agent have agreed
to further amend the Amended Loan Agreement on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises set forth
above, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Borrower,
the Lenders and the Agent hereby agree as follows:
Section 1. Amendment of Amended Loan Agreement.
Effective this date, subject to the fulfillment of the conditions precedent set
forth in Section 2 below, the Amended Loan
Agreement is hereby further amended as follows:
(a) The definition of "Restricted Investment" contained in
Section 1.1 is hereby amended by the addition of the following
clause at the end of that definition:
"and (m) a promissory note received by the Parent as partial
consideration for the sale by the Parent to SSC of the SSC
Equipment, incident to consummation of the SSC Transaction."
(b) Section 1.1 is hereby amended by the addition of three
new definitions which shall read in their entirety as follows:
"SSC" means SSC, LLP, a Missouri limited liability
partnership.
"SSC Equipment" means the ladle metallurgy facility
purchased by the Parent from EMC International, Inc., together
with ancillary equipment, which the Parent is (or will be)
conveying to SSC incident to consummation of the SSC
Transaction.
"SSC Transaction" means the sale-leaseback transaction
pursuant to which the Parent is (or will be) conveying the SSC
Equipment to SSC and simultaneously leasing it back for a term
of five (5) years, subject to the terms and conditions of that
certain Operating Lease dated as of June 26, 1996, between and
among the Parent, SSC, and to the limited extent provided
therein, Energy Capital Partners Limited Partnership, a
Delaware limited partnership.
(c) Section 8.9(a) is hereby amended by the addition of the
following clause at the end of that paragraph:
", and (viii) for a sale by the Parent to SSC of the SSC
Equipment, incident to consummation of the SSC Transaction."
(d) Section 8.20 is hereby amended and restated to read in
its entirety as follows:
"8.20 Sale and Leaseback Transactions. Except with respect
to (i) Fixed Assets which do not consist of Collateral, and
(ii) a sale by the Parent to SSC of the SSC Equipment, incident
to consummation of the SSC Transaction, neither the Parent nor
any of its Subsidiaries shall, directly or indirectly, enter
into any arrangement with any Person providing for the Parent
or such Subsidiary to lease or rent property that the Parent or
such Subsidiary has sold or will sell or otherwise transfer to
such Person."
(e) Section 8.23 is hereby amended and restated to read in
its entirety as follows:
"8.23 Operating Lease Obligations. Except incident to
consummation of the SSC Transaction, neither the Parent nor any
of its Subsidiaries shall enter into any lease of real or
personal property as lessee or sublessee (other than a Capital
Lease), if, after giving effect thereto, the aggregate amount
of Rentals (as hereinafter defined) payable by the Parent and
its Subsidiaries on a consolidated basis in any Fiscal year in
respect of such lease and all such leases would exceed
$4,000,000 (such amount being referred to herein as "Permitted
Rentals"). The term "Rentals" means all payments due from the
lessee or sublessee under a lease, including, without
limitation, basic rent, percentage rent, property taxes,
utility or maintenance costs, and insurance premiums."
(f) Subsection 10.1(c)(i) is hereby amended and restated to
read in its entirety as follows:
"(i) any failure by the Borrowers to comply with the
covenant contained in Section 8.24 as of the end of any fiscal
quarter, the covenant contained in Section 8.25 as of the end
of any calendar month, or the covenant contained in Section
8.28 as of the end of any period indicated therein, to the
extent that the Borrowers shall not obtain from the Agent and
the Majority Lenders, within eighty-five (85) days following
the last day of the period covered by the Financial Statement
which disclosed such failure, a waiver of their right to deem
such failure an Event of Default hereunder;"
Section 2. Conditions of Amendment. This Amendment
shall become effective upon the receipt by the Agent of the
following:
(a) Six counterparts of this Amendment, executed by each
Borrower and each Lender;
(b) Cash proceeds of the sale of the SSC Equipment in an
amount not less than $4,000,000, with instructions to apply such
proceeds as a prepayment of the Revolving Loans; and
(c) A pledge of the promissory note referred to in clause
(m) of Section 1.1 hereof together with an assignment of the
Security Agreement which secures repayment of such note.
Section 3. Representations and Warranties. Each
Borrower hereby represents and warrants that (a) this Amendment
constitutes a legal, valid and binding obligation of such
Borrower, enforceable against such Borrower in accordance with
its terms, (b) the representations and warranties contained in
the Amended Loan Agreement are correct in all material respects
as though made on and as of the date of this Amendment, and (c)
no Event of Default has occurred and is continuing.
<PAGE>
Section 4. Reference to and Effect on the Amended Loan
Agreement.
(a) Upon the effectiveness of this Agreement, each
reference in the Amended Loan Agreement to "this Agreement,"
"hereunder," "hereof," "herein," or words of like import shall
mean and be a reference to the Amended Loan Agreement, as amended
hereby, and each reference to the Amended Loan Agreement in any
other document, instrument or agreement executed and/or delivered
in connection with the Amended Loan Agreement shall mean and be a
reference to the Amended Loan Agreement, as amended hereby.
(b) Except as specifically amended above, the Amended Loan
Agreement and all other documents, instruments, and agreements
executed and/or delivered in connection therewith shall remain in
full force and effect and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power, or
remedy of the Agent or the Lenders under the Amended Loan
Agreement, nor constitute a waiver of any provision of the
Amended Loan Agreement, except as specifically set forth herein.
Section 5. Execution of Counterparts. This Amendment
may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all
of which taken together shall constitute but one and the same
instrument.
Section 6. Governing Law. This Amendment shall be
governed by and construed in accordance with the internal laws
(as opposed to the conflicts of laws provisions) of the State of
Illinois.
Section 7. Legal Fees. Borrower agrees to pay to the
Agent, for its benefit, on demand, all costs and expenses that
the Agent pays or incurs in connection with the negotiation,
preparation, consummation, administration, enforcement, and
termination of this Amendment, including, without limitation, the
allocated costs of Agent's in-house counsel fees.
Section 8. Section Titles. The section titles contained
in this Amendment are and shall be without substance, meaning or
content of any kind whatsoever and are not a part of the
agreement between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered as of June __, 1996.
LACLEDE STEEL COMPANY
By:_____________________________________
Michael H. Lane, Vice President
<PAGE>
LACLEDE CHAIN MANUFACTURING COMPANY
By:_____________________________________
Michael H. Lane, Vice President
LACLEDE MID AMERICA INC.
By:_____________________________________
Michael H. Lane, Vice President
BANKAMERICA BUSINESS CREDIT, INC.,
as the Agent
By:_____________________________________
Steven W. Sharp, Vice President
BANKAMERICA BUSINESS CREDIT, INC.,
as a Lender
By:_____________________________________
Steven W. Sharp, Vice President
THE BANK OF NEW YORK COMMERCIAL
CORPORATION, as a Lender
By:_____________________________________
Robert V. Love
Assistant Vice President
THE BOATMEN'S NATIONAL BANK OF
ST. LOUIS, as a Lender
By:_____________________________________
Debra Jansma, Vice President
AMENDMENT NO. 7
TO
LOAN AND SECURITY AGREEMENT
DATED AS OF SEPTEMBER 7, 1994
THIS AMENDMENT NO. 7 dated as of July 30, 1996 (this
"Amendment") is entered into among BANKAMERICA BUSINESS CREDIT,
INC., a Delaware corporation ("BABC"), THE BANK OF NEW YORK
COMMERCIAL CORPORATION, a New York corporation ("BNYCC"), THE
BOATMEN'S NATIONAL BANK OF ST. LOUIS, a national banking
association ("Boatmen's") (BABC, BNYCC and Boatmen's and their
respective successors and assigns being sometimes hereinafter
referred to collectively as the "Lenders" and each of BABC, BNYCC
and Boatmen's and its successors and assigns being sometimes
hereinafter referred to individually as a "Lender"), BANKAMERICA
BUSINESS CREDIT, INC., a Delaware corporation, as agent for the
Lenders (in such capacity as agent, the "Agent"), LACLEDE STEEL
COMPANY, a Delaware corporation (the "Parent"), LACLEDE CHAIN
MANUFACTURING COMPANY, a Delaware corporation ("Laclede Chain"),
and LACLEDE MID AMERICA INC., an Indiana corporation ("Laclede
Mid America") (the Parent, Laclede Chain and Laclede Mid America
being sometimes hereinafter referred to collectively as the
"Borrowers" and each of the Parent, Laclede Chain and Laclede Mid
America being sometimes hereinafter referred to individually as a
"Borrower").
W I T N E S S E T H:
WHEREAS, the Borrowers, the Lenders and the Agent are
parties to a certain Loan and Security Agreement dated as of
September 7, 1994 (the "Loan Agreement"); and
WHEREAS, the Loan Agreement was amended by (a) Amendment No.
1 dated as of February 15, 1995, (b) Amendment No. 2 dated as of
May 10, 1995, (c) Amendment No. 3 dated as of June 1, 1995, (d)
Amendment No. 4 dated as of December 7, 1995, (e) Amendment No. 5
dated as of January 26, 1996, and (f) Amendment No. 6 dated as of
June 26, 1996 (the Loan Agreement, as so amended, being
hereinafter referred to as the "Amended Loan Agreement,"
capitalized terms used herein without definition having the
meanings given such terms in the Amended Loan Agreement); and
WHEREAS, the Borrowers, the Lenders and the Agent have
agreed to amend the Amended Loan Agreement on the terms and
conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises set forth
above, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Borrowers,
the Lenders and the Agent hereby agree as follows:
Section 1. Amendment of the Amended Loan Agreement.
Effective as of June 30, 1996, subject to the fulfillment of the
conditions precedent set forth in Section 2 below, the Amended
Loan Agreement is amended as follows:
(a) Section 1.1 is amended to add the following definitions
in alphabetical order:<PAGE>
"Convertible Preferred Stock" means the Parent's six
percent (6.0%) convertible preferred capital stock, no par
value per share, to be issued in connection with the
Recapitalization, a portion of which would be exchanged for
the Redeemable Preferred Stock.
"Recapitalization" means a transaction pursuant to
which the Parent would (a) reduce the par value of the
Parent's common stock to $0.01 per share and authorize
20,000,000 additional shares of common stock, (b) issue the
Convertible Preferred Stock, (c) exchange the Redeemable
Preferred Stock for a portion of the Convertible Preferred
Stock, and (d) receive equity contributions from the sale of
additional Convertible Preferred Stock, the sum of which,
when aggregated with the sum of the equity contributions
received from the sale of the Redeemable Preferred Stock,
would be at least $7,500,000; each of the foregoing
transactions to be in accordance with all applicable laws
and pursuant to agreements, instruments and documents of
which copies shall have been delivered to the Agent and each
Lender and which shall be acceptable in form and substance
to the Agent and each Lender
"Redeemable Preferred Stock" means the Parent's six
percent (6.0%) redeemable preferred capital stock, no par
value per share, 416,667 shares of which were issued on
__________, 1996.
(b) The definition of "Eligible Inventory" contained in
Section 1.1 is amended to delete the date of "September 30, 1996"
contained therein and to substitute "the earlier of (1) the date
on which the Recapitalization shall be consummated, and (2)
December 31, 1996" therefor.
(c) The proviso contained in Subsection (1)(a)(ii) of the
definition of "Individual Maximum Revolver Amount" is amended and
restated as follows:
provided, however, that (1) at no time shall the sum of the
outstanding Revolving Loans to the Parent based upon the
value of Eligible Inventory exceed the following amounts
during the periods indicated:
Amount Period
$71,500,000 prior to 3/31/96
$67,500,000 3/31/96 to and including 6/29/96
$62,500,000 6/30/96 to and including 7/30/96
$61,750,000 7/31/96 to and including 8/30/96
$61,000,000 8/31/96 to and including 9/29/96
<PAGE>
$60,250,000 9/30/96 to and including 10/30/96
$59,500,000 10/31/96 to and including 11/29/96
$58,750,000 11/30/96 to and including 12/30/96
$58,000,000 12/31/96 to and including 1/30/97
$57,250,000 1/31/97 to and including 2/27/97
$56,500,000 2/28/97 to and including 3/30/97
$55,750,000 3/31/97 to and including 4/29/97
$55,000,000 4/30/97 to and including 5/30/97
$54,250,000 5/31/97 to and including 6/29/97
$53,500,000 6/30/97 to and including 7/30/97
$52,750,000 7/31/97 to and including 8/30/97
$52,500,000 8/31/97 and thereafter;
and (2) at no time shall the sum of the outstanding
Revolving Loans to the Parent based upon the value of Spare
Parts and Packing Inventory exceed the following amounts
during the periods indicated:
Amount Period
$ 5,000,000 prior to 6/30/96
$ 4,000,000 6/30/96 to and including 7/31/96
$ 3,900,000 August 1996
$ 3,800,000 September 1996
$ 3,700,000 October 1996
$ 3,600,000 November 1996
$ 3,000,000 December 1996
$ 0 thereafter;
provided, that notwithstanding the foregoing sentence, from
and after the date on which the Recapitalization shall be
consummated, there shall be no outstanding Revolving Loans
to the Parent based upon the value of Spare Parts and
Packing Inventory.
(d) The proviso contained in Subsection (a)(ii) of the
definition of "Maximum Revolver Amount" is amended and restated
as follows:<PAGE>
provided, (1) at no time shall the sum of the outstanding
Revolving Loans based upon the value of Eligible Inventory
exceed the following amounts during the periods indicated:
Amount Period
$71,500,000 prior to 3/31/96
$67,500,000 3/31/96 to and including 6/29/96
$62,500,000 6/30/96 to and including 7/30/96
$61,750,000 7/31/96 to and including 8/30/96
$61,000,000 8/31/96 to and including 9/29/96
$60,250,000 9/30/96 to and including 10/30/96
$59,500,000 10/31/96 to and including 11/29/96
$58,750,000 11/30/96 to and including 12/30/96
$58,000,000 12/31/96 to and including 1/30/97
$57,250,000 1/31/97 to and including 2/27/97
$56,500,000 2/28/97 to and including 3/30/97
$55,750,000 3/31/97 to and including 4/29/97
$55,000,000 4/30/97 to and including 5/30/97
$54,250,000 5/31/97 to and including 6/29/97
$53,500,000 6/30/97 to and including 7/30/97
$52,750,000 7/31/97 to and including 8/30/97
$52,500,000 8/31/97 and thereafter;
and (2) at no time shall the sum of the outstanding
Revolving Loans to the Parent based upon the value of Spare
Parts and Packing Inventory exceed the following amounts
during the periods indicated:
Amount Period
$ 5,000,000 prior to 6/30/96
$ 4,000,000 6/30/96 to and including 7/31/96
$ 3,900,000 August 1996
$ 3,800,000 September 1996<PAGE>
$ 3,700,000 October 1996
$ 3,600,000 November 1996
$ 3,000,000 December 1996
$ 0 thereafter;
provided, that notwithstanding the foregoing sentence, from
and after the date on which the Recapitalization shall be
consummated, there shall be no outstanding Revolving Loans
to the Parent based upon the value of Spare Parts and
Packing Inventory."
(e) Section 5.7 is amended to delete "twenty-fifth (25th)"
appearing in clause (e) thereof and to substitute "twentieth
(20th)" therefor.
(f) Section 5.10(b) is amended (i) to delete "twenty-one
(21) months following the Closing Date" appearing in the first
sentence thereof and to substitute "December 31, 1996" therefor,
and (ii) to delete "within twenty-one (21) months following the
Closing Date" appearing in the third sentence thereof and to
substitute "on or before December 31, 1996" therefor.
(g) The first sentence of Section 7.7 is amended and
restated as two sentences as follows:
Prior to the Recapitalization, the Parent's authorized
capital stock consists of (a) 5,000,000 shares of common
stock, par value $13.33 per share, of which 4,056,140 shares
are validly issued and outstanding, fully paid and non-assessable, and (b)
2,000,000 shares of the Redeemable
Preferred Stock, of which 416,667 shares are validly issued
and outstanding, fully paid and non-assessable. From and
after the Recapitalization, the Parent's authorized capital
stock shall consist of (1) 25,000,000 shares of common
stock, par value $0.01 per share, and (2) the shares of the
Convertible Preferred Stock (i) exchanged for shares of the
Redeemable Preferred Stock and (ii) purchased pursuant to
the Recapitalization.
(h) Section 8.10(a) is amended to add the following as the
second and third sentences thereof:
In addition to the foregoing, the Parent may (1) redeem the
Redeemable Preferred Stock in accordance with its terms in
the event that the Parent's shareholders shall not approve
the Recapitalization on or prior to October 31, 1996, and
(2) declare and pay dividends on the Redeemable Preferred
Stock and Convertible Preferred Stock to the extent
dividends would have been permitted to be paid under that
certain Indenture of Trust dated as of October 1, 1976,
between the City of Alton, Illinois, and St. Louis Union
Trust Company, as Trustee, as in effect on July 30, 1996, with
respect to the Pollution Control Bonds. Nothing
contained in this Section 8.10 or elsewhere in this
Agreement shall be construed to permit the redemption by the
Parent of any of the Convertible Preferred Stock during the
term of this Agreement.
(i) Section 8.24 is amended to delete "0.65 to 1.00"
appearing in the table contained therein and to substitute "No
required ratio" therefor.
(j) Section 8.25 is hereby amended and restated as follows:
8.25 Consolidated Adjusted Net Worth. The Borrowers
will maintain a Consolidated Adjusted Net Worth, determined
as of the last day of each fiscal quarter in each Fiscal
Year, in an amount which is not less than (a) the aggregate
amount of any contributions to the capital of the Parent
made on the date on which Amendment No. 7 to this Agreement
became effective, or thereafter, including, without
limitation, proceeds received from the sale of the
Redeemable Preferred Stock and Convertible Preferred Stock,
plus (b) the amount indicated opposite each of the following
dates, minus (c) the aggregate amount of redemptions of the
Redeemable Preferred Stock made in accordance with Section
8.10(a):
Quarter Ending Date Amount
12/31/95 $32,000,000
03/31/96 $29,400,000
06/30/96 $27,400,000
09/30/96 $26,300,000
12/31/96 $27,000,000
03/31/97 $27,000,000
06/30/97 $27,000,000
09/30/97 $27,000,000
12/31/97 $27,000,000
Beginning with the fiscal quarter ending March 31, 1998, the
Borrowers will maintain a Consolidated Adjusted Net Worth,
calculated as of the last day of each fiscal quarter in each
Fiscal Year, of not less than the sum of (a) the aggregate
amount of any contributions to the capital of the Parent
made on the date on which Amendment No. 7 to this Agreement
became effective, or thereafter, including, without
limitation, proceeds received from the sale of the
Redeemable Preferred Stock and Convertible Preferred Stock,
plus (b) $27,000,000, minus (c) the aggregate amount of
redemptions of the Redeemable Preferred Stock made in
accordance with Section 8.10(a), plus (d) an amount (to the
extent greater than zero and without deduction for any
losses) equal to fifty percent (50.0%) of Consolidated Net
Earnings for the Fiscal Year ending on December 31, 1997,
and fifty percent (50.0%) of the Consolidated Net Earnings
for each Fiscal Year thereafter.
<PAGE>
(k) Section 8.28 is hereby amended and restated as follows:
8.28 Consolidated Pretax Loss Amount. The Borrowers
shall not permit the Consolidated Pretax Loss, calculated as
of the last day of each period specified below, to exceed
for the period indicated the amount indicated opposite such
period:
Period Amount
01/01/96 - 03/31/96 ($ 4,300,000)
01/01/96 - 06/30/96 ($ 9,000,000)
01/01/96 - 09/30/96 ($12,000,000)
01/01/96 - 12/31/96 ($11,500,000)
(l) Section 10.1 is amended to (1) delete the word "or" at
the end of paragraph (r) thereof, (2) delete the period at the
end of paragraph (s) thereof and substitute "; or" therefor, and
(3) add the following as paragraph (t) thereof:
(t) The proxy statement in connection with the
Recapitalization shall not have been distributed to the
Parent's shareholders on or prior to September 30, 1996, the
Parent's shareholders shall not have approved the
Recapitalization on or prior to October 31, 1996, or the
Recapitalization shall not have been consummated on or prior
to December 31, 1996.
Section 2. Conditions to Amendment. This Amendment shall
become effective upon the satisfaction of the following
conditions precedent:
(a) The Agent shall have received, in immediately available
funds, for the ratable account of the Lenders, an accommodation
fee in the amount of $150,000, which accommodation fee shall be
fully earned on the date on which this Amendment shall become
effective.
(b) The Parent shall have received capital contributions in
the aggregate amount of $6,250,000 in cash equivalents,
consisting of the proceeds of the sale to (1) Ivaco of
$5,500,000 of the Redeemable Preferred Stock, and (2) certain
members of the Parent's management of $750,000 of the
Redeemable Preferred Stock.
(c) The Agent shall have received a favorable legal opinion
from Bryan Cave, L.L.P., with respect to that certain Stock
Purchase Agreement dated as of July 30, 1996 between Ivaco and
the Parent, which opinion shall be in form and substance
satisfactory to the Agent and the Lenders.
(d) The Agent shall have received a certificate from the
Parent as to the provisions relating to restrictions on
Distributions contained in that certain Indenture of Trust
dated as of October 1, 1976, between the City of Alton,
Illinois, and St. Louis Union Trust Company, as Trustee, with respect to
the Pollution Control Bonds, in effect on the date
on which this Amendment shall become effective.
(e) The Agent shall have received six counterparts of this
Amendment, executed by each Borrower and each Lender, and the
Agent shall have executed this Amendment.
Section 3. Representations and Warranties. Each Borrower
hereby represents and warrants that (i) this Amendment
constitutes a legal, valid and binding obligation of such
Borrower, enforceable against such Borrower in accordance with
its terms, (ii) the representations and warranties contained in
the Amended Loan Agreement are correct in all material respects
as though made on and as of the date of this Amendment, and (iii)
no Event of Default has occurred and is continuing.
Section 4. Reference to and Effect on the Amended Loan
Agreement.
(a) Upon the effectiveness of this Amendment, each
reference in the Amended Loan Agreement to "this Agreement",
"hereunder", "hereof", "herein", or words of like import shall
mean and be a reference to the Amended Loan Agreement, as amended
hereby, and each reference to the Amended Loan Agreement in any
other document, instrument or agreement executed and/or delivered
in connection with the Amended Loan Agreement shall mean and be a
reference to the Amended Loan Agreement, as amended hereby.
(b) Except as specifically amended above, the Amended Loan
Agreement and all other documents, instruments and agreements
executed and/or delivered in connection therewith shall remain in
full force and effect and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment shall not operate as a waiver of any right, power or
remedy of the Agent or the Lenders under the Amended Loan
Agreement, nor constitute a waiver of any provision of the
Amended Loan Agreement, except as specifically set forth herein.
Section 5. Execution in Counterparts. This Amendment may
be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all
of which taken together shall constitute but one and the same
instrument.
Section 6. Governing Law. This Amendment shall be governed
by and construed in accordance with the internal laws (as opposed
to the conflicts of laws provisions) of the State of Illinois.
Section 7. Legal Fees. The Borrowers agree to pay to the
Agent, for its benefit, on demand, all costs and expenses that
the Agent pays or incurs in connection with the negotiation,
preparation, consummation, administration, enforcement and
termination of this Amendment, including, without limitation, the
allocated costs of the Agent's in-house counsel fees.<PAGE>
Section 8. Section Titles. The section titles contained in
this Amendment are and shall be without substance, meaning or
content of any kind whatsoever and are not a part of the
agreement between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered as of July 30, 1996.
LACLEDE STEEL COMPANY
By:________________________________
Vice President
LACLEDE CHAIN MANUFACTURING COMPANY
By:________________________________
Vice President
LACLEDE MID AMERICA INC.
By:________________________________
Vice President
BANKAMERICA BUSINESS CREDIT, INC., as
the Agent
By:________________________________
Vice President
BANKAMERICA BUSINESS CREDIT, INC., as a
Lender
By:________________________________
Vice President
THE BANK OF NEW YORK COMMERCIAL
CORPORATION, as a Lender
<PAGE>
By:________________________________
Vice President
THE BOATMEN'S NATIONAL BANK OF ST.
LOUIS, as a Lender
By:________________________________
Vice President
<PAGE>
CERTIFICATE OF DESIGNATIONS,
PREFERENCES, AND RIGHTS OF
SERIES A PREFERRED
STOCK OF LACLEDE STEEL COMPANY.
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
We, the undersigned, (i) President and Chief Executive
Officer and (ii) Vice President - Finance, Treasurer and
Secretary, respectively, of Laclede Steel Company (the
"Company"), a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "General
Corporation Law"), in accordance with Sections 141(f) and 151(g)
thereof, hereby certify that the Board of Directors of the
Company, at a meeting duly convened and held on July 19, 1996,
and by written consent dated July 30, 1996, pursuant to authority
expressly vested in the Board of Directors by the Company's
Certificate of Incorporation, adopted the following resolutions:
RESOLVED, that the Board of Directors of the Company (the
"Board") hereby approves and authorizes the creation, issuance
and sale, either in one or more public offerings or private
placements, of up to One Million Sixty Four Thousand Thirty Six
(1,064,036) shares of Series A Preferred Stock which shall be
senior to all other classes of equity securities of the Company;
and
RESOLVED FURTHER, that in connection with the issuance of
the Series A Preferred Stock, the Board designates a committee
(the "Committee") consisting of John B. McKinney, a director of
the Company, to fix the designations and any of the preferences
or rights ("Terms") of the shares of Series A Preferred Stock
relating to dividends, redemption, dissolution, any distribution
of assets of the Company or the conversion into, or the exchange
of such shares for, shares of any other class or classes or any
other series of the same or any other class or classes of stock
of the Company or fix the number of shares of any series of stock
or authorize the increase or decrease of the shares of any
series; provided that the Committee shall fix the Terms of the
Series A Preferred Stock as outlined at this meeting, with each
share of Series A Preferred Stock (a) having no voting power, (b)
having a dividend rate of 6% per annum, (c) to be recapitalized
upon stockholder approval (the "Recapitalization") such that such
shares would be convertible, at the option of the holders of such
Series A Preferred Stock, into Common Stock of the Company (with
a conversion price equal to 80% of the closing price of the
Company's Common Stock for the ten trading days prior to
stockholder approval), (d) having a dividend rate of 8% per annum
if the Recapitalization is not approved by stockholders and (e)
being redeemable if the Recapitalization is not approved by the
stockholders; and
We, the undersigned, (i) President and Chief Executive
Officer and (ii) Vice President - Finance, Treasurer and
Secretary, respectively, of the Company, in accordance with
Sections 141(f) and 151(g) of the General Corporation Law, hereby
certify that the Committee, at a meeting duly convened and held
on July 19, 1996, pursuant to authority expressly vested in the
Committee by the Board of Directors, adopted the following
resolution:
RESOLVED, that pursuant to the authority expressly granted
to and vested in the Committee by the Board of Directors of the
Company and the provisions of the Certificate of Incorporation of
the Company, as amended, this Committee hereby creates and
authorizes the issuance of a series of One Million Sixty-Four
Thousand and Thirty-Six (1,064,036) shares of the Company's
Series A Preferred Stock, no par value per share, and hereby
fixes the designation, dividend rate, redemption provisions,
voting powers, rights on liquidation or dissolution, and other
preferences and relative, participating, optional or other
special rights, and the qualifications, limitations, or
restrictions thereof, as follows:
1. Designation; Rank.
(A) The series of preferred stock of the Company, no
par value per share (the "Preferred Stock"), created and
authorized hereby shall be designated as the "Series A Preferred
Stock" (the "Series A Preferred Stock"). The number of shares of
Series A Preferred Stock shall be One Million Sixty-Four Thousand
and Thirty-Six (1,064,036).
(B) The Series A Preferred Stock, with respect to
dividend rights and rights upon liquidation, dissolution or
winding up of the Company, shall rank senior to the Common Stock
and to all other classes and series of equity securities of the
Company. Except as contemplated in Section 4.B, no other classes
or series of equity securities of the Company subsequently issued
shall rank senior to or on a parity with the Series A Preferred
Stock as to dividend rights and rights upon liquidation,
dissolution or winding up of the Company. The Series A Preferred
Stock shall be junior to indebtedness issued from time to time,
including debentures.
2. Dividends and Distributions.
(A) Holders of shares of Series A Preferred Stock are
entitled to receive, if, when and as declared by the Board of
Directors of the Company out of assets of the Company legally
available for payment, cumulative cash dividends, payable
quarterly, at the rate of 6% per annum, or $0.90 per share per
annum, from the date of issuance and for each quarterly dividend
period thereafter. Dividends on the Series A Preferred Stock are
payable quarterly in arrears to holders of record on the last day
of March, June, September and December of each year to be paid on
the 10th day thereafter; provided, however, that the first
dividend will be payable to holders of record on December 31,
1996, prorated from the date of issuance, and there will be no
dividend payable on September 30, 1996. Each such dividend is
payable to holders of record as they appear on the books of the
Company. Dividends on the Series A Preferred Stock are
cumulative and accrue on a daily basis from the date of original
issuance of the shares.
(B) The Company shall not declare or pay or set apart
for payment any dividends or other distribution on any series of
its preferred stock, or any other class of capital stock of the
Company ranking, as to dividends or upon liquidation, dissolution
or winding up, on a parity with or junior to the Series A
Preferred Stock for any period (other than dividends payable in
Common Stock or another stock ranking junior to the Series A
Preferred Stock as to dividends and upon liquidation), unless
full cumulative dividends have been paid or declared and a sum
sufficient for payment thereof is set apart for payment for all
dividends on the Series A Preferred Stock. When dividends are
not paid in full upon the Series A Preferred Stock and any other
series of preferred stock ranking on a parity therewith as to
dividends with the Series A Preferred Stock, all dividends
declared upon shares of Series A Preferred Stock and any other
series of preferred stock ranking on a parity therewith as to
dividends shall be declared pro rata so that the amount of
dividends declared per share on the Series A Preferred Stock and
such other series of preferred stock ranking on a parity
therewith shall in all cases bear to each other the same ratio
that the accrued dividends per share of the shares of Series A
Preferred Stock and such other series of preferred stock bear to
each other. No interest shall be payable in respect of any
dividend payment on the Series A Preferred Stock in arrears.
Unless full cumulative dividends on the Series A Preferred Stock
have been paid for all past dividend payment periods or declared
and set apart for payment, no Common Stock or any other stock of
the Company ranking junior to or on a parity with the Series A
Preferred Stock can be redeemed, purchased, retired or otherwise
acquired for consideration by the Company, except by conversion
into or exchange for stock of the Company ranking junior to the
Series A Preferred Stock as to dividends and upon liquidation,
dissolution or winding up.
(C) The Company shall not permit any subsidiary of the
Company to purchase or otherwise acquire for consideration any
shares of stock of the Company unless the Company could, under
paragraph (B) of this Section 2, purchase or otherwise acquire
such shares at such time and in such manner.
3. Optional Redemption. Subject to the approval by the
Company's stockholders of the Recapitalization as set forth in
Section 11 hereof:
(A) (i) After September 15, 2005, the Company
may, at its sole option, redeem any or all of the outstanding
shares of Series A Preferred Stock, at a cash redemption price
per share of $15.00, plus accrued and unpaid dividends (whether
or not earned or declared) thereon (the "Redemption Price"),
subject to the Common Stock having a Current Average Closing
Price equal to at least 200% of the Initial Average Closing
Price. The term "Current Average Closing Price" shall mean the
average closing price for 20 consecutive trading days prior to
the date of notice of redemption on the principal national
securities exchange on which the Common Stock is listed or if
such stock is not then so listed, the closing price of the Common
Stock as shown by the NASDAQ National Market System or, if no
such closing price is available, at the average of the
representative last bid and asked prices of such Common Stock in
the over-the-counter market, as shown by the NASDAQ System Level
1 (or comparable system). The term "Initial Average Closing
Price" shall mean the average closing price of the Common Stock
on the NASDAQ National Market System for the ten trading days
prior to the date on which the holders of shares of Common Stock
of the Company approve and authorize the Recapitalization. At
least two (2) business days prior to redemption, the Company
shall deposit in escrow an amount sufficient to satisfy the
redemption obligation.
(ii) In the event that full dividends on the
Series A Preferred Stock have not been paid or declared and set
apart for payment for all past dividend periods, the Series A
Preferred Stock may not be redeemed by the Company.
(iii) The Company shall notify the holders of
shares of the Series A Preferred Stock to be redeemed, at their
respective addresses as the same appear upon the books of the
corporation, not less than thirty (30) or more than sixty (60)
business days prior to the date fixed for redemption; provided,
however, that no defect in the notice to a holder shall affect
the ability of the Company to redeem the shares of Series A
Preferred Stock pursuant to this Section 3.(A). Payment of the
redemption price of the shares of Series A Preferred Stock
redeemed shall be made at such place or places of redemption as
shall be determined by the Board of Directors of the Company and
shall be made against the surrender for cancellation of the
certificates for the shares redeemed. The notice of redemption
provided for herein shall be irrevocable.
(iv) If less than all of the outstanding
shares of the Series A Preferred Stock are to be redeemed
pursuant to this Section 3.(A), the Company will select the
shares redeemed pro rata, provided that only whole shares shall
be selected for redemption.
(v) If the notice of redemption shall have
been made as hereinbefore provided and if on or before the
redemption date specified in such notice all funds necessary for
such redemption shall have been set aside by the Company pursuant
to this Section 3.(A) so as to be available for the benefit of
the holders of the shares so called for such redemption, then
from and after the date fixed for redemption the shares of Series
A Preferred Stock so called for such redemption, notwithstanding
that any certificate therefor shall not have been surrendered or
cancelled, shall no longer be deemed outstanding, dividends
thereon shall cease to accrue and all rights of the holders with
respect to such shares (including, without limitation, the
conversion rights provided for in Section 13) shall cease and
terminate, except only the right of the holders thereof to
receive upon surrender of the certificates therefor the amount
payable upon redemption thereof, but without interest.
(B) The Company may not redeem any shares of
Series A Preferred Stock prior to September 15, 2005. Except as
set forth in Section 11(A), a holder of shares of Series A
Preferred Stock has no right to cause the Company to redeem such
shares.
4. Voting Rights.
(A) The holders of the Series A Preferred Stock
shall not, except as otherwise required by law or as set forth
herein, have any right or power to vote on any matter or in any
proceeding or to be represented on any matter or in any
proceeding or to be represented at, or to receive notice of, any
meeting of stockholders.
(B) Each holder of the Series A Preferred Stock
shall be entitled to one vote for each share standing in his name
on the transfer books of the Company as of the record date fixed
for such purpose, on any matter as to which they shall be
entitled to vote. Without the vote of the holders of at least
two-thirds (2/3) of the number of shares of Series A Preferred
Stock then outstanding, the Company shall not (i) amend, alter or
repeal any of the preferences or rights of the holders of the
Series A Preferred Stock so as to adversely affect such
preferences and rights, or (ii) issue any shares of capital stock
ranking senior to or on a parity with the Series A Preferred
Stock with respect to the payment of dividends and the
distribution of assets upon the liquidation, dissolution or
winding-up of the Company.
5. Liquidation Rights.
(A) In the event of any liquidation, dissolution
or winding-up of the Company, the holders of the shares of the
Series A Preferred Stock shall be entitled to receive out of the
assets of the Company available for distribution to stockholders,
before any distribution of assets is made to holders of Common
Stock or any other stock of the Company ranking junior to the
Series A Preferred Stock as to liquidation, dissolution or
winding-up of the Company, distributions in an amount equal to
$15.00 per share (the "Liquidation Preference"), plus an amount
equal to the accrued and unpaid dividends thereon.
(B) If upon the voluntary or involuntary
liquidation, dissolution or winding-up of the Company, the
amounts available with respect to the Series A Preferred Stock
and any other shares or series of capital stock of the Company
(the "Liquidation Parity Shares") ranking as to any distribution
upon the voluntary or involuntary liquidation, dissolution or
winding-up of the Company on a parity with the Series A Preferred
Stock are insufficient to pay in full the respective preferential
amounts to which holders of shares of the Series A Preferred
Stock and the Liquidation Parity Shares are entitled upon such
liquidation, dissolution or winding-up, the holders of the Series
A Preferred Stock and the Liquidation Parity Shares shall share
ratably in any distribution of assets of the Company in
proportion to the full respective preferential amounts to which
they are entitled upon such liquidation, dissolution, or winding-up.
(C) Neither the consolidation of nor merging of
the Company with or into any other corporation or corporations,
nor the sale of all or substantially all of the assets of the
Company shall be deemed to be a liquidation, dissolution or a
winding-up of the Company within the meaning of any of the
provisions of this Section 5.
6. "Common Stock" Defined. References to "Common
Stock" in Sections other than Sections 12.(A) and 12.(B) hereof
shall mean any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or
winding-up of the Company and which is not subject to redemption
by the Company. References to "Common Stock" in Sections 12.(A)
and 12.(B) hereof shall include only shares of the class
designated as Common Stock as of the date of the original
issuance of shares of the Series A Preferred Stock, or shares of
the Company of any class or classes resulting from any
reclassification or reclassifications thereof and which have no
preference in respect of dividends or of amounts payable in the
event of any voluntary or involuntary liquidation, dissolution or
winding-up of the Company and which are not subject to redemption
by the Company; provided that if at any time there shall be more
than one such resulting class, the shares of each such class then
so issuable shall be substantially in the proportion which the
total number of shares of such class resulting from such
reclassification bears to the total number of shares of all
classes resulting from all such reclassifications.
7. No Preemptive Rights. The holders of the Series A
Preferred Stock shall not have any preemptive rights.
8. Holders. The term "holders" as used herein shall
mean, in all cases, holders of record.
9. Extension of Time Periods. To the extent there
are any time periods specified for action by the Company or the
holders of Series A Preferred Stock, such time periods shall be
extended to the extent required by applicable law, rule or
regulatory requirement.
10. Reacquired Shares. Any shares of Series A
Preferred Stock converted, redeemed, purchased or otherwise
acquired by the Company in any manner whatsoever shall be retired
and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation, and upon the filing of an
appropriate certificate with the Secretary of State of the State
of Delaware, become authorized but unissued shares of Preferred
Stock, no par value, of the Company subject to the conditions or
restrictions on issuance set forth herein.
11. Recapitalization of Shares of Series A Preferred
Stock.
(A) If the requisite holders of shares of Common
Stock of the Company do not approve and authorize, on or before
October 31, 1996, (i) in order to comply with NASD requirements
regarding stockholder approval, the terms and conditions of
Section 12 hereof (whether at a stockholders meeting or by
written consent or otherwise), (ii) an increase in the number of
authorized shares of the Company's Common Stock from 5,000,000 to
25,000,000, and (iii) a reduction of the par value per share of
Common Stock from $13.33 per share to $0.01 per share
(collectively, the "Recapitalization"), then (1) the per annum
dividend rate of the Series A Preferred Stock shall automatically
be increased by 2% percent to 8% per annum, or $1.20 per share
per annum, from January 1, 1997 and for each quarterly dividend
period thereafter and (2) each holder of shares of Series A
Preferred Stock shall automatically be granted the right to have
the Company redeem all of its shares of Series A Preferred Stock
upon 30 days prior notice to the Company at the Redemption Price.
(B) If the holders of shares of Common Stock of
the Company approve and authorize, on or before December 31,
1996, the Recapitalization, each share of the Series A Preferred
Stock owned by such holder shall, without any further action by
the Company or such holder, be automatically recapitalized and,
in addition to the designations, rights, qualifications,
limitations and/or restrictions set forth above, the Series A
Preferred Stock shall be subject to the additional terms set
forth in Section 12 hereof.
(C) The term "Recapitalization Approval Date"
shall mean the date on which the holders of shares of Common
Stock of the Company approve and authorize the Recapitalization.
12. Conversion into Common Stock.
(A) Upon the Recapitalization Approval Date, each
share of Series A Preferred Stock shall be immediately
convertible, at the option of the holders thereof, at the office
of the Company or any transfer agent for the Series A Preferred
Stock, into the number of shares of Common Stock determined by
dividing 15 by the Conversion Price. The term "Conversion Price"
shall mean 80 percent of the Initial Average Closing Price. The
Conversion Price is subject to adjustment as provided in this
Section 12. Upon the conversion of any shares of Series A
Preferred Stock into shares of Common Stock, all declared,
accrued but unpaid dividends on shares of converted Series A
Preferred Stock shall be paid in cash by the Company to the
holders of such converted Series A Preferred Stock, subject to
adjustment as provided in this Section 12.
(B) If the Company
(i) pays a dividend or makes a distribution
on its outstanding shares of Common Stock, in shares of its
Common Stock;
(ii) subdivides its outstanding shares (by
reclassification or otherwise) of Common Stock into a greater
number of shares;
(iii) combines, consolidates, or reclassifies
its outstanding shares of Common Stock into a smaller number of
shares; or
(iv) issues by reclassification of its
Common Stock any shares of its capital stock;
then the Conversion Price in effect immediately before such
action shall be adjusted so that the holder of the Series A
Preferred Stock thereafter exchanged will be entitled to receive,
upon the exchange thereof, the number of shares of capital stock
of the Company which he would have been entitled to receive
immediately prior to such action if the Series A Preferred Stock
had been exchanged immediately before the record date (or, if no
record date, the effective date) for such action.
The adjustment shall become effective immediately after
the close of business on the record date in the case of a
dividend or distribution and immediately after the close of
business on the effective date in the case of a subdivision,
combination or reclassification.
If as a result of an adjustment, a holder of the Series
A Preferred Stock upon exchange of the Series A Preferred Stock
may receive shares of two or more classes of capital stock of the
Company, the Company shall determine the allocation of the
adjusted Conversion Price between the classes of capital stock.
After such allocation, the Conversion Price of each class of
capital stock shall thereafter be subject to adjustment on terms
comparable to those applicable to Common Stock contained in this
Section 12.
(C) Other than in situations provided for in
Section 12(A), if the Company issues or sells (or in accordance
with this Section 12 is deemed to have issued or sold) any shares
of its Common Stock for a consideration per share less than the
Conversion Price in effect immediately prior to the time of such
issue or sale and/or the Company issues or sells (or in
accordance with this Section 12 is deemed to have issued or sold)
any shares of its Common Stock for a consideration per share less
than the then current market price on the date of such issue or
sale, then, forthwith upon such issue or sale, the Conversion
Price shall be reduced to the lower of the prices (calculated to
the nearest cent) determined as follows:
(I) by dividing (i) an amount equal to the
sum of (a) the number of shares of Common Stock outstanding
immediately prior to such issue or sale (including as outstanding
all shares of Common Stock issuable upon exchange of the then
outstanding shares of Series A Preferred Stock) multiplied by the
then existing Conversion Price, and (b) the consideration, if
any, received by the Company upon such issue or sale, by (ii) the
total number of shares of Common Stock outstanding immediately
after such issue or sale (including as outstanding all shares of
Common Stock issuable upon exchange of the then outstanding
shares of Series A Preferred Stock); and
(II) by multiplying the Conversion Price in
effect immediately prior to the time of such issue or sale by a
fraction, the numerator of which shall be the sum of (i) the
number of shares of Common Stock outstanding immediately prior to
such issue or sale (including as outstanding all shares of Common
Stock issuable upon exchange of the then outstanding shares of
Series A Preferred Stock) multiplied by the then current market
price immediately prior to such issue or sale plus (ii) the
consideration received by the Company upon such issue or sale,
and the denominator of which shall be the product of (iii) the
total number of shares of Common Stock outstanding immediately
after such issue or sale (including as outstanding all shares of
Common Stock issuable upon exchange of the then outstanding
shares of Series A Preferred Stock), multiplied by (iv) the then
current market price immediately prior to such issue or sale.
(D) If the Company in any manner grants, issues
or sells (whether directly or by assumption in a merger or
otherwise) any rights to subscribe for or to purchase, or any
options or warrants for the purchase of, Common Stock or any
stock or securities convertible into or exchangeable for Common
Stock (such rights or options or warrants being herein called
"Options" and such convertible or exchangeable stock or
securities being herein called "Convertible Securities") whether
or not such Options or the right to convert or exchange any such
Convertible Securities are immediately exercisable, and the price
per share for which Common Stock is issuable upon the exercise of
such Options or upon conversion or exchange of such Convertible
Securities (determined by dividing (I) the total amount, if any,
received or receivable by the Company as consideration for the
granting, issuance or sale of such Options, plus the minimum
aggregate amount of additional consideration payable to the
Company upon the exercise of all such Options, plus, in the case
of such Options which relate to Convertible Securities, the
minimum aggregate amount of additional consideration, if any,
payable upon the issue or sale of such Convertible Securities and
upon the conversion or exchange thereof, by (II) the total
maximum number of shares of Common Stock issuable upon the
exercise of such Options or upon the conversion or exchange of
all such Convertible Securities issuable upon the exercise of
such Options) shall be less than the Conversion Price in effect
immediately prior to the time of the granting, issuance or sale
of such Options (or less than the then current market price per
share of Common Stock, determined as of the date of granting,
issuance or sale of such Options, as the case may be), then the
total maximum number of shares of Common Stock issuable upon the
exercise of such Options or upon conversion or exchange of the
total maximum amount of such Convertible Securities issuable upon
the exercise of such Options shall be deemed to have been issued
for such price per share as of the date of granting, issuance or
sale of such Options and thereafter shall be deemed to be
outstanding. Except as otherwise provided in Section 12(F), no
adjustment of the Conversion Price shall be made upon the actual
issue of such Common Stock or of such Convertible Securities upon
exercise of such Options or upon the actual issue of such Common
Stock upon conversion or exchange of such Convertible Securities.
(E) If the Company in any manner issues (whether
directly or by assumption in a merger or otherwise) or sells any
Convertible Securities, whether or not the rights to exchange or
convert thereunder are immediately exercisable, and the price per
share for which Common Stock is issuable upon such conversion or
exchange (determined by dividing (I) the total amount received
and receivable by the Company as consideration for the issue or
sale of such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, payable to the
Company upon the conversion or exchange thereof, by (II) the
total maximum number of shares of Common Stock issuable upon the
conversion or exchange of all such Convertible Securities) shall
be less than the Conversion Price in effect immediately prior to
the time of such issue or sale (or less than the then current
market price, determined as of the date of such issue or sale of
such Convertible Securities, as the case may be), then the total
maximum number of shares of Common Stock issuable upon conversion
or exchange of all such Convertible Securities shall be deemed to
have been issued for such price per share as of the date of the
issue or sale of such Convertible Securities and thereafter shall
be deemed to be outstanding, provided that except as otherwise
provided in Section 12(F) below, no adjustment of the Conversion
Price shall be made upon the actual issue of such Common Stock
upon conversion or exchange of such Convertible Securities, and
if any such issue or sale of such Convertible Securities is made
upon exercise of any Option to purchase any such Convertible
Securities for which adjustments of the Conversion Price have
been or are to be made pursuant to other provisions of this
Section 12, no further adjustment of the Conversion Price shall
be made by reason of such issue or sale.
(F) Upon the happening of any of the following
events, namely, if the purchase price provided for in any Option
referred to in Section 12(D), the additional consideration, if
any, payable upon the conversion or exchange of any Convertible
Securities referred to in Section 12(D) or Section 12(E), or the
rate at which any Convertible Securities referred to in Section
12(D) or Section 12(E) are convertible into or exchangeable for
Common Stock shall change at any time (other than under or by
reason of provisions designed to protect against dilution), the
Conversion Price in effect at the time of such event shall
forthwith be readjusted to the Conversion Price which would have
been in effect at the time of such event had such Options or
Convertible Securities remaining outstanding at the time of such
event provided for such changed purchase price, additional
consideration or conversion rate, as the case may be, at the time
initially granted, issued or sold: and on the expiration of any
such Option or the termination of any such right to convert or
exchange such Convertible Securities, the Conversion Price then
in effect hereunder shall forthwith be increased to the
Conversion Price which would have been in effect at the time of
such expiration or termination had such Option or Convertible
Security, to the extent outstanding immediately prior to such
expiration or termination, never been issued, and the Common
Stock issuable thereunder shall no longer be deemed to be
outstanding. If the purchase price provided for in any such
Option referred to in Section 12(D) or the rate at which any
Convertible Securities referred to in Section 12(D) or 12(E) are
convertible into or exchangeable for Common Stock shall be
reduced at any time under or by reason of provisions with respect
thereto designed to protect against dilution, then in case of the
delivery of Common Stock upon the exercise of any such Option or
upon conversion or exchange of any such Convertible Security, the
Conversion Price then in effect hereunder shall forthwith be
adjusted to such respective amount as would have been obtained
had such Option or Convertible Security never been issued as to
such Common Stock and had adjustments been made upon the issuance
of the shares of Common Stock delivered as aforesaid (provided
that the current market price used in such determination shall be
the current market price on the date of issue of such Option or
Convertible Security), but only if as a result of such adjustment
the Conversion Price then in effect hereunder is thereby reduced.
(G) Other than in situations provided for in
Section 12(B), if the Company declares a dividend, or makes any
other distribution, upon any stock of the Company payable in
Common Stock, Options or Convertible Securities, any Common
Stock, Options or Convertible Securities, as the case may be,
issuable in payment of such dividend or distribution shall be
deemed to have been issued or sold without consideration.
(H) If any shares of Common Stock, Options or
Convertible Securities are issued or sold for cash, the
consideration received therefor shall be deemed to be the amount
received by the Company therefor, without deduction therefrom of
any expenses incurred or any underwriting commissions or
concessions paid or allowed by the Company in connection
therewith. If any shares of Common Stock, Options or Convertible
Securities shall be issued or sold for a consideration other than
cash, the amount of the consideration other than cash received by
the Company shall be deemed to be the fair value of such
consideration as determined by the Board of Directors of the
Company, without deduction of any expenses incurred or any
underwriting commissions or concessions paid or allowed by the
Company in connection therewith. In case any Options shall be
issued in connection with the issue and sale of other securities
of the Company, together comprising one integral transaction in
which no specific consideration is allocated to such Options by
the parties thereto, such Options shall be deemed to have been
issued without consideration. In case any shares of Common
Stock, Options or Convertible Securities shall be issued in
connection with any merger or consolidation in which the Company
is the surviving corporation and the rights of the holders of
Common Stock are not affected, the amount of consideration
therefor shall be deemed to be the fair value as determined by
the Board of Directors of the Company of such portion of the
assets and business of the non-surviving corporation as such
Board shall determine to be attributable to such Common Stock,
Options or Convertible Securities, as the case may be.
(I) In case the Company shall take a record of
the holders of its Common Stock for the purpose of entitling them
(i) to receive a dividend or other distribution payable in Common
Stock, Options or Convertible Securities, or (ii) to subscribe
for or purchase Common Stock, Options or Convertible Securities,
then such record date shall be deemed to be the date of the issue
or sale of the shares of Common Stock deemed to have been issued
or sold upon the declaration of such dividend or the making of
such other distribution or the date of the granting of such right
of subscription or purchase, as the case may be.
(J) The number of shares of Common Stock
outstanding at any given time shall not include shares owned or
held by or for the account or in the treasury of the Company, and
the disposition of any such shares shall be considered an issue
or sale of Common Stock for the purposes of this Section 12.
(K) In case of any consolidation or merger of the
Company (other than a merger or consolidation in which the
Company is the surviving corporation and the rights of the
holders of Common Stock are not affected) or in the event of any
sale of all or substantially all of the assets of the Company,
the holder of each share of the Series A Preferred Stock then
outstanding shall have the right thereafter, subject to the terms
and conditions of this Section 12, to exchange such share into
the kind and amount of shares of stock and other securities and
property receivable upon such consolidation, merger, or sale by a
holder of the number of shares of Common Stock into which such
share of Series A Preferred Stock would have been entitled to be
exchanged into immediately prior to such consolidation, merger,
or sale; and effective provision shall be made in the Certificate
of Incorporation or Charter of the resulting or surviving
corporation or otherwise so that the provisions set forth in this
Section 12 shall thereafter be applicable, as nearly as
practicable, to any such other shares of stock and other
securities and property deliverable upon exchange of the Series A
Preferred Stock remaining outstanding or other exchangeable or
convertible preferred stock received by the holders in place
thereof; and any such resulting or surviving corporation shall
expressly assume the obligation to deliver, upon the exercise of
the exchange privilege, such shares, securities or property as
the holders of the Series A Preferred Stock remaining
outstanding, or other exchangeable or convertible preferred stock
received by the holders in place thereof, may be entitled to, and
to make provisions for the protection of the exchange right as
provided (unless such resulting or surviving corporation assumes
such obligation). In case securities or property other than
shares of Common Stock shall be issuable or deliverable upon
exchange as aforesaid, then all reference in this Section (K)
shall be deemed to apply, so far as appropriate and as nearly as
practicable, to such other securities or property. The
provisions of this Section (K) shall similarly apply to
successive consolidations, mergers, or sales.
(L) For the purpose of any computation under this
Section 12, the current market price per share of Common Stock at
any date shall be deemed to be the average closing price of the
Company's Common Stock for any 30 consecutive trading days within
the 45 trading days immediatley prior to the date in question.
The closing price for each day shall be the last reported sale of
Common Stock on the principal national securities exchange on
which the Common Stock may be listed or if such stock is not then
so listed, the closing price of the Common Stock as shown by the
NASDAQ National Market System or, if no such closing price is
available, at the average of the representative last bid and
asked prices of such Common Stock in the over-the-counter market,
as shown by the NASDAQ System Level 1 (or comparable system) or
in the absence of any of the foregoing, the fair market value as
determined by the Board of Directors (whose determination made in
good faith shall be conclusive).
(M) The Company may at its option elect not to
issue fractional shares of Common Stock upon any exchange, in
which case, the Company shall pay in cash an amount equal to the
current market price per share plus all accrued but unpaid
dividends multiplied by such fractional interest. Any
determination that the Company or the Board of Directors makes
regarding fractional shares is conclusive.
(N) (a) Notwithstanding the provisions of this
Section 12,
(i) no adjustment of the Conversion Price
shall be required for three years after the Recapitalization
Approval Date unless such adjustment would require an increase or
decrease of at least 1% in the Conversion Price then in effect,
but in such case any adjustment that would otherwise be required
then to be made shall be carried forward and shall be made at the
time of and together with the next subsequent adjustment. All
calculations under this Section 12 shall be made and rounded to
the nearest one-hundredth of a share or the nearest one ten-millionth of a
fraction in the case of the Conversion Price, as the case may be:
(ii) no adjustment need be made for sales of
Common Stock pursuant to a plan for reinvestment of dividends or
interest and no adjustment need be made for a change in the par
value of the Common Stock;
(iii) no adjustment need be made in
connection with the issuance of shares of Common Stock upon
exchange of the Series A Preferred Stock;
(iv) no adjustment need be made in
connection with the issuance of any rights or shares of Common
Stock in connection with the Company's rights offering pursuant
to which rights to purchase Series A Preferred Stock will be
distributed to the Company's stockholders;
(v) no adjustment need be made by virtue of
the issue of any additional securities of the Company in
accordance with the terms of such securities (by way of dividend
or otherwise); and
(vi) no adjustment need be made by virtue
of the exercise of presently outstanding employee stock options
which are exercisable at a cash price per share equal to or
greater than the then current market price per share of Common
Stock at the date of issuance of such options.
(b) The Board of Directors shall have the
power to resolve any ambiguity or correct any error in this
Section 12 and its action in so doing, as evidenced by a Board
resolution, shall be final and conclusive.
(c) The certificate of any independent firm
of public accountants of recognized national standing selected by
the Board of Directors shall be satisfactory evidence of the
correctness of any computation made in this Section 12.
(O) Whenever there is an adjustment requiring a
change in the Conversion Price, a statement signed by the
Secretary of the Company describing specifically the event giving
rise to such adjustment and stating the adjustment which shall be
made to the Conversion Price shall be filed at the principal
office of the Company. The statement so filed shall be open to
inspection by any holder of record of shares of the Series A
Preferred Stock. The Company shall at the time of filing any
such statement mail notice to the same effect to holders of
shares of the Series A Preferred Stock at their addresses
appearing on the books of the Company or supplied by them to the
Company for the purpose of notice. In addition, the Company
shall include a notice of Conversion Price with each dividend
payment on the Series A Preferred Stock or otherwise give notice
thereof promptly after the due date for each such dividend,
whenever there has been a change in the Conversion Price since
the last previous dividend due date.
(P) In order to convert any shares of Series A
Preferred Stock, a holder shall deliver to the Company at the
office of the Company, or at such other place or places, if any,
as the Board of Directors of the Company may determine (after
giving written notice thereof to all holders), certificates, duly
endorsed to the Company or in blank, of the shares of Series A
Preferred Stock to be converted, together with appropriate
evidence of the payment of any transfer or similar tax, if
required to be paid by the holder thereof pursuant to the last
sentence of this paragraph, and instructions in writing to the
Company to exchange such shares and specifying the name and
address of the person, corporation, firm or other entity to whom
such shares are to be issued, whereupon the Company will issue
(i) the number of shares of Common Stock issuable on exchange
thereof as of the time of such surrender and as promptly as
practicable thereafter will deliver certificates for such shares
of Common Stock, (ii) cash for any remaining fraction of a share
if the Company so elects, as provided in Section 12(M) above, and
(iii) cash in an amount equal to all accrued but unpaid
dividends, with respect to each share of Series A Preferred Stock
exchanged. The Company shall pay any documentary, stamp or
similar issue or transfer tax due on the issue of shares of
Common Stock upon exchange; provided, however, that the holder
shall pay any such tax which is due because such shares are to be
issued in a name other than that of such holder.
If for any reason the Company is unable to pay any
unpaid dividends on the shares of Series A Preferred Stock being
exchanged, the Company will pay such unpaid dividends to the
exchanging holder as soon thereafter as funds of the Company are
legally available for such payment. At the request of any such
exchanging holder, the Company will provide such holder with
written evidence of its obligation to such holder.
The Company shall from and after the Recapitalization
Approval Date take all necessary corporate action to reserve for
issuance upon exchange of the Series A Preferred Stock a
sufficient number of shares out of the authorized Common Stock
for the exchange of each outstanding share of Series A Preferred
Stock in accordance with its terms.
(Q) If
(i) the Company takes any action that would
require an adjustment in the Conversion Price pursuant to this
Section 12; or
(ii) there is a voluntary or involuntary
liquidation, dissolution or winding-up of the Company;
the Company shall provide notice of such action in the manner set
forth in Section 12(O), stating therein the proposed record date
for a distribution or the effective date of a reclassification,
consolidation, merger, lease, transfer, liquidation, dissolution
or winding-up, at least fifteen (15) days in advance of such
date. Failure to mail the notice or any defect therein shall not
affect the validity of the transaction.
(R) Before taking any action which would cause an
adjustment reducing the Conversion Price below the then par value
(if any) of the Common Stock deliverable upon exchange of the
Series A Preferred Stock, the Company will take any corporate
action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid
and non-assessable shares of Common Stock at such adjusted
Conversion Price.
(S) The Company from time to time may decrease
the Conversion Price by an amount for any period of time if the
period is at least 20 days and if the decrease is irrevocable
during the period. Whenever the Conversion Price is decreased,
the Company shall give notice of the decrease at least 15 days
prior to the date the decreased Conversion Price takes effect, in
the manner set forth in Section 12(O) above, which notice shall
state the decreased Conversion Price and the period it will be in
effect. A decrease in the Conversion Price pursuant to this
Section 12(S) shall not otherwise change or adjust the Conversion
Price otherwise in effect for purposes of this Section 12.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this
Certificate of Designation, Preferences, and Rights of Series A
Preferred Stock of the Company to be duly executed this 30th day
of July, 1996.
LACLEDE STEEL COMPANY
John B. McKinney
President and Chief Executive Officer
ATTEST:
Michael H. Lane
Vice President - Finance, Treasurer and Secretary
(Corporate Seal)
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is
entered into as of July 30, 1996, by and between Ivaco Inc., a
Canadian corporation ("Ivaco"), and Laclede Steel Company, a
Delaware corporation (the "Company").
RECITALS
A. Ivaco agrees to purchase from the Company, on the
following terms and conditions, 366,667 shares (the "Series A
Shares") of the Company's Series A Preferred Stock, no par value,
(the "Series A Preferred Stock") at a price of $15.00 per share.
B. The Company agrees to sell to Ivaco, on the
following terms and conditions, the Series A Shares.
C. The Form of Certificate of Designation of the
Company's Series A Preferred Stock is attached hereto as Exhibit
A.
NOW, THEREFORE, in consideration of the recitals and
the mutual covenants, representations, warranties, conditions,
and agreement hereinafter expressed, the Parties agree as
follows:
ARTICLE 13.
PURCHASE AND SALE OF SERIES A SHARES
(A) The Series A Shares. Upon the terms and subject
to the conditions set forth in this Agreement, at Closing, the
Company shall sell and deliver to Ivaco and Ivaco shall purchase
and accept from the Company the Series A Shares, free and clear
of all security interests, claims, and restrictions.
(B) Consideration. The consideration that Ivaco shall
pay the Company for the Series A Shares shall be Five Million
Five Hundred Thousand Five Dollars ($5,500,005.00) ("Purchase
Price").
(C) Closing. The consummation of the transactions
contemplated hereby ("Closing") shall take place at the offices
of the Company at 9:00 a.m. local time on the date hereof
("Closing Date").
(D) Deliveries of the Company at Closing. The Company
shall issue and deliver to Ivaco a certificate or certificates
evidencing the Series A Shares and the other agreements,
certificates and other instruments referred to in this Agreement
to be executed at or prior to the Closing. In addition, Bryan
Cave LLP, counsel to the Company, shall deliver its opinion in
the form of Exhibit B.
(E) Deliveries of Ivaco at Closing. At Closing, Ivaco
shall wire in immediately-available funds, to an account
designated by the Company, the Purchase Price.
<PAGE>
(F) Restricted Nature of Series A Shares. Ivaco
acknowledges that the Series A Shares, in its hands, will be
restricted securities which may not be sold or offered for sale
in the absence of an effective registration statement as to such
Series A Shares under the Securities Act of 1933, as amended, or
an opinion of counsel satisfactory to the Company that such
registration is not required. In this regard, at Closing, the
parties hereto shall enter into a Registration Rights Agreement,
substantially in the form of Exhibit C hereto.
ARTICLE 14.
REPRESENTATIONS AND WARRANTIES
(A) Representations and Warranties of the Company. The Company
represents and warrants to and agrees with Ivaco that:
(i) The Company is a corporation duly organized
and validly existing, is in good standing under the laws of the
State of Delaware, and has all requisite corporate power and
authority to carry on its business as described in the draft
prospectus attached hereto as Exhibit D (the "Prospectus"). The
Company is duly qualified as a foreign corporation and is in good
standing in all other jurisdictions in which such qualification
is required, provided however, that the Company need not be
qualified in a jurisdiction in which its failure to qualify would
not have a material adverse effect on its operations or financial
condition.
(ii) The Company has full corporate power and
authority to enter into and deliver this Agreement, to perform
its obligations hereunder, and to consummate the transactions
contemplated hereby.
(iii) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms.
(iv) The holders of outstanding shares of capital
stock of the Company and warrants, options or other securities to
purchase shares of capital stock of the Company are not entitled
to any preemptive rights to subscribe for the Series A Shares.
(v) Since the quarterly report on Form 10-Q for
the quarter ended March 31, 1996, there has been no material
adverse change in the condition or general affairs, business,
operations, assets or properties of the Company and its
subsidiaries, financial or otherwise, other than as referred to
in the Prospectus.
(vi) The Series A Shares have been duly
authorized, and when issued and paid for, will be validly issued,
fully paid and non-assessable, and upon stockholder approval of
the (i) decrease in par value of the Company's common stock, par
value $13.33 per share ("Common Stock"), (ii) increase in
authorized shares of Common Stock, and (iii) recapitalization of Series A
Preferred Stock into convertible preferred stock as
contemplated by Section 11 of the Certificate of Designation for
such series, the Common Stock issuable upon conversion of the
Series A Shares will be duly authorized, and when issued, will be
validly issued, fully paid and non-assessable.
(vii) The Board of Directors has authorized
the (i) decrease in par value of the Common Stock, (ii) increase
in authorized shares of Common Stock, and (iii) in order to
comply with NASD requirements regarding stockholder approval,
recapitalization of the Series A Preferred Stock into convertible
preferred stock as contemplated by Section 11 of the Certificate
of Designation for such series (the "Recapitalization"), and
recommended such items to the stockholders of the Company for
approval.
(viii) The Series A Shares and 50,000 shares of
Series A Preferred Stock sold to members of management of the
Company simultaneously with the execution of this Agreement are
the only shares of Series A Preferred Stock issued and
outstanding.
(ix) As of June 30, 1996, the Company's net assets
total $11,442,000, its retained earnings (deficit) totals
($7,391,000), its stated capital totals $54,081,000 and its
capital in excess of par totals $247,000. All such amounts are
subject to audit.
(x) The issuance of the Series A Shares and the
execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and the compliance with the
terms of this Agreement will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a
default under, or give rise to rights of termination under, any
deed of trust, lease, sublease, the Certificate of Incorporation
or by-laws of the Company or any of its subsidiaries, or any
indenture, mortgage, or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries, or its or their property is
bound, or any applicable law, rule, regulation, judgment, order
or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company
or any of its subsidiaries, or the properties or operations of
any of them.
(xi) The computation as to the availability by the
Company to make dividend payments under the terms of the two
Financing Agreements, each dated October 1, 1976 between the City
of Alton, Illinois and the Company attached hereto as Exhibit E
is true and correct as of the date calculated and listed thereon.
(xii) Certain members of management of the
Company have executed the stock purchase agreement for Series A
Preferred Stock attached hereto as Exhibit F and will purchase an
aggregate amount of $750,000 of the Company's Series A Preferred
Stock simultaneously with the Closing.
<PAGE>
(xiii) The Company's Board of Directors has
authorized, subject to approval by the stockholders of the
Company of the reduction of the par value per share of the
Company's common stock from $13.33 per share to $0.01 per share,
subject to the requirements of the Delaware General Corporation
Law, the reduction of capital by $54,027,784 and transfer such
amount to surplus.
(xiv) There are no restrictions or limitations
on the payment of dividends on the Series A Preferred Stock which
are more onerous than the limitations under the Financing
Agreements dated October 1, 1976, between the City of Alton,
Illinois and the Company except under the Delaware General
Corporation Law.
(xv) The amendments and waivers with respect to
the Loan and Security Agreement among certain financial
institutions named therein, Bank America Business Credit, Inc.,
as Agent, the Company and certain subsidiaries of the Company,
dated as of September 7, 1994, as amended (the "Loan Agreement"),
attached hereto as Exhibit G either have become effective or
shall become effective simultaneously with the Closing.
(xvi) All existing employment agreements
between the Company and its executive officers (the "Employment
Agreements"), copies of which are attached hereto as Exhibit H,
have been amended to eliminate the provisions regarding payments
to be made upon a change in control.
(xvii) Except as disclosed in public filings,
the Company has no agreements or arrangements with its management
or directors.
(xviii) No event of default is existing under
any indebtedness for borrowed money of the Company or any or its
subsidiaries or under any indenture, mortgage, or other agreement
or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries, or
any of their property is bound.
(xix) The Prospectus does not and all
documents filed by the Company with the Securities and Exchange
Commission since January 1, 1994, did not at the time of filing,
contain any untrue statement of material fact or omit to state a
material fact necessary in order to make the statements contained
therein not misleading.
(xx) No consent is necessary for the consummation
of the transactions contemplated hereby which has not been
obtained.
(xxi) The Company has not given registration
rights to any person other than Ivaco and certain members of
management in connection with the purchase of 50,000 shares of
Series A Preferred Stock contemporaneously with the execution
hereof.
<PAGE>
(xxii) Immediately prior and without giving
effect to the transactions contemplated hereby, the authorized
capital stock of the Company consists of (i) 5,000,000 shares of
common stock, par value $13.33 per share, of which 4,056,140
shares are issued and outstanding, and (ii) 2,000,000 shares of
preferred stock, no par value, of which 1,064,036 are designated
Series A Preferred Stock, and none of which are issued and
outstanding.
(B) Representations and Warranties of Ivaco. Ivaco
represents and warrants to the Company that the purchase of the
Series A Shares has been duly authorized and this Agreement
represents the legal, valid and binding obligation of Ivaco,
enforceable in accordance with its terms and conditions.
ARTICLE 15.
COVENANTS OF THE COMPANY
In further consideration of the agreements of Ivaco
herein contained, the Company covenants as follows:
(A) Nomination of Directors. As long as Ivaco or Ivaco
together with any person with which Ivaco is acting in concert in
connection with its investment in the Company is the beneficial
owner, within the meaning of Section 13(d) of the Securities
Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Exchange Act"), of 40% or greater of
the Company's Common Stock calculated by dividing (i) the number
of shares of Common Stock owned by Ivaco plus the number of
shares of Common Stock into which the Series A Preferred Stock
owned by Ivaco, if converted, would be converted, by (ii) the
total number of shares of Common Stock outstanding plus the
number of shares of Common Stock into which the Series A
Preferred Stock owned by Ivaco, if converted, would be converted,
Ivaco shall have the right to cause the Company to use its best
efforts to cause its Board of Directors to nominate four persons
designated by Ivaco to serve on the Company's Board of Directors
and to use its best efforts to cause the stockholders of the
Company to elect such Directors, and the Company will not change
the number of Directors on the Board of Directors to a number
higher than nine (9). The failure of Ivaco to exercise its
rights under this Section 3.1 at any time shall in no way be
construed to limit the right of Ivaco to exercise its rights
under this Section 3.1 at a later date.
(B) Stockholder Approvals. The Company will use its
best efforts to cause its stockholders to approve and authorize,
as soon as possible and in any event on or before September 30,
1996, (a) an increase in the number of authorized shares of the
Company's common stock from 5,000,000 to 25,000,000, (b) a
reduction of the par value per share of common stock from $13.33
per share to $0.01 per share and (c) in order to comply with NASD
requirements regarding stockholder approval, the
Recapitalization.
<PAGE>
(C) Rights Offering. The Company will prepare and
file a registration statement with the Securities and Exchange
Commission with respect to a rights offering to all of the
Company stockholders (the "Rights Offering"), entitling all such
stockholders to subscribe, pro rata (excluding the right of Ivaco
to subscribe for the amount of Series A Preferred Stock purchased
by Ivaco hereunder), for 647,369 shares of the Company's Series A
Preferred Stock. The Company shall prepare documentation
regarding the Rights Offering in a form which is reasonably
satisfactory to Ivaco and shall use its best efforts to
consummate the Rights Offering prior to December 31, 1996.
(D) Employment Agreements. As long as Ivaco or Ivaco
together with any person with which Ivaco is acting in concert in
connection with its investment in the Company is the beneficial
owner, within the meaning of Section 13(d) of the Exchange Act
of 40% or greater of the Company's Common Stock calculated by
dividing (i) the number of shares of Common Stock owned by Ivaco
plus the number of shares of Common Stock into which the Series A
Preferred Stock owned by Ivaco, if converted, would be converted,
by (ii) the total number of shares of Common Stock outstanding
plus the number of shares of Common Stock into which the Series A
Preferred Stock owned by Ivaco, if converted, would be converted,
the Employment Agreements shall not be amended without the prior
written consent of Ivaco.
(E) No Purchases From Management. The Company will not
purchase, directly or indirectly, or redeem any Series A
Preferred Stock from officers or directors of the Company or any
transferee of such persons unless the Company also offers to
purchase shares of Series A Preferred Stock from Ivaco on a pro
rata basis on the same terms and conditions.
(F) No Dilutive Action. The Company will take no
action prior to the date upon which the stockholders of the
Company approve the Recapitalization which would cause an
adjustment under Section 12 of the Certificate of Designation for
the Series A Preferred Stock if such action was taken after the
date upon which the stockholders of the Company approve the
Recapitalization.
(G) Listing of Securities. The Company will use its
best efforts to list the Series A Preferred Stock, if eligible,
on the principal national securities exchange on which the Common
Stock is listed or if such stock is not then so listed, the
NASDAQ National Market System, if eligible, or the over-the-counter market, as
designated on the NASDAQ System Level 1 (or
comparable system), if eligible.
(H) Expenses of Ivaco. The Company shall pay all
actual out-of-pocket expenses incurred by Ivaco in connection
with the negotiation and execution of this Agreement and the
purchase of the Series A Preferred Stock; provided, however, that
the Company's obligation under this Section 3.8 shall be limited
to $50,000, regardless of the total amount of expenses incurred
by Ivaco. <PAGE>
(I) Specific Performance. Because the breach or
anticipated breach of the covenants provided for in this Section
3 will result in immediate and irreparable harm and injury to
Ivaco, for which it will not have an adequate remedy at law, the
Company agrees that Ivaco shall be entitled to relief in equity,
including but not limited to specific performance, to remedy such
breach or anticipated breach and to seek any and all other legal
and equitable remedies to which Ivaco may be entitled.
ARTICLE 16.
COVENANTS OF IVACO
In further consideration of the agreements of the
Company herein contained, Ivaco covenants as follows:
(A) Rights Offering. Prior to the effectiveness of
a registration statement with respect to the Rights Offering and
delivery of the prospectus contained therein to the stockholders
of the Company, Ivaco shall execute the Standby Agreement
attached hereto as Exhibit I.
ARTICLE 17.
MISCELLANEOUS PROVISIONS
(A) Notice. All notices, requests, demands, and other
communications required or permitted under this Agreement shall
be in writing and shall be deemed to have been duly given and
made upon being delivered either by courier or fax delivery to
the party for whom it is intended, provided that a copy thereof
is deposited, postage prepaid, certified or registered mail,
return receipt requested, in the United States mail, bearing the
address shown in this Section 5.1 for, or such other address as
may be designated in writing hereafter by, such party:
If to Ivaco:
Ivaco Inc.
Place Mercantile
770 Rue Sherbrooke Ouest
Montreal, Quebec,
Canada H3A 1G1
Attention: Paul Ivanier
With a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004-1980
Attention: Jeffrey Bagner
<PAGE>
If to the Company:
Laclede Steel Company
One Metropolitan Square
211 North Broadway
St. Louis, Missouri 63102-2738
Attention: Michael H. Lane
With a copy to:
Bryan Cave LLP
One Metropolitan Square, Suite 3600
St. Louis, Missouri 63102
Attention: Frank P. Wolff, Jr.
(B) Entire Agreement. This Agreement embodies the
entire agreement and understanding of the parties hereto with
respect to the subject matter hereof, and supersede all prior and
contemporaneous agreements and understandings relative to such
subject matter.
(C) Counterparts. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be
deemed an original, but all of which taken together shall
constitute one and the same instrument.
(D) Headings; Interpretation. The article and section
headings contained in this Agreement are inserted for convenience
only and shall not affect in any way the meaning or
interpretation of the Agreement. Each reference in this
Agreement to an Article, Section, or Exhibit, unless otherwise
indicated, shall mean an Article or a Section of this Agreement
or an Exhibit attached to this Agreement, respectively.
References herein to "days", unless otherwise indicated, are to
consecutive calendar days. Both parties have participated
substantially in the negotiation and drafting of this Agreement
and agree that no ambiguity herein should be construed against
the draftsman.
(E) Assignment. This Agreement and all the various
rights and obligations arising hereunder shall inure to the
benefit of and be binding upon Ivaco, its successors and assigns.
Ivaco's right under Section 3.1 and Section 3.4 hereof can be
assigned by Ivaco to anyone who becomes the beneficial owner of
40% or greater of the Company's Common Stock (as defined in
Section 3.1 and Section 3.4 hereof) as a result of the Common
Stock or Series A Preferred Stock transferred by Ivaco to such
successors and assigns.
(F) Governing Law. This Agreement shall in all
respects be construed in accordance with and governed by the
substantive laws of the State of Delaware, without reference to
its choice of law rules.
<PAGE>
IN WITNESS WHEREOF, each of the Parties hereto has
caused this Agreement to be executed as of the date first above
written.
IVACO INC.
By:
Name: Paul Ivanier
Title: President and Chief Executive
Officer
LACLEDE STEEL COMPANY
By:
Name: John B. McKinney
Title: President and Chief Executive
Officer
<PAGE>
MANAGEMENT STOCK PURCHASE AGREEMENT
THIS MANAGEMENT STOCK PURCHASE AGREEMENT (the
"Agreement") is entered into as of July 30, 1996, by and between
John B. McKinney, an individual residing at 19 Picardy, St.
Louis, Missouri 63124 ("Purchaser"), and Laclede Steel Company, a
Delaware corporation (the "Company").
RECITALS
A. Purchaser agrees to purchase from the Company, on
the following terms and conditions, 13,333 shares (the "Series A
Shares") of the Company's Series A Preferred Stock, no par value,
(the "Series A Preferred Stock") at a price of $15.00 per share.
B. The Company agrees to sell to Purchaser, on the
following terms and conditions, the Series A Shares.
C. The Form of Certificate of Designation of the
Company's Series A Preferred Stock is attached hereto as Exhibit
A.
NOW, THEREFORE, in consideration of the recitals and
the mutual covenants, representations, warranties, conditions,
and agreement hereinafter expressed, the Parties agree as
follows:
ARTICLE I
PURCHASE AND SALE OF SERIES A SHARES
1.1 The Series A Shares. Upon the terms and subject
to the conditions set forth in this Agreement, at Closing, the
Company shall sell and deliver to Purchaser and Purchaser shall
purchase and accept from the Company the Series A Shares, free
and clear of all security interests, claims, and restrictions.
1.2 Consideration. The consideration that Purchaser
shall pay the Company for the Series A Shares shall be TWO
HUNDRED THOUSAND DOLLARS ($200,000) ("Purchase Price").
1.3 Closing. The consummation of the transactions
contemplated hereby ("Closing") shall take place at the offices
of the Company at 9:00 a.m. local time on the date hereof
("Closing Date").
1.4 Deliveries of the Company at Closing. The Company
shall issue and deliver to Purchaser a certificate or
certificates evidencing the Series A Shares and the other
agreements, certificates and other instruments referred to in
this Agreement to be executed at or prior to the Closing. In
addition, Bryan Cave LLP, counsel to the Company, shall deliver
its opinion in the form of Exhibit B.
1.5 Deliveries of Purchaser at Closing. At Closing,
Purchaser shall wire in immediately-available funds, to an
account designated by the Company, the Purchase Price.<PAGE>
1.6 Restricted Nature of Series A Shares. Purchaser
acknowledges that the Series A Shares, in its hands, will be
restricted securities which may not be sold or offered for sale
in the absence of an effective registration statement as to such
Series A Shares under the Securities Act of 1933, as amended, or
an opinion of counsel satisfactory to the Company that such
registration is not required. In this regard, at Closing, the
parties hereto shall enter into a Registration Rights Agreement,
substantially in the form of Exhibit C hereto.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Company. The Company
represents and warrants to and agrees with Purchaser that:
(a) The Company is a corporation duly organized
and validly existing, is in good standing under the laws of the
State of Delaware, and has all requisite corporate power and
authority to carry on its business as described in the draft
prospectus attached hereto as Exhibit D (the "Prospectus"). The
Company is duly qualified as a foreign corporation and is in good
standing in all other jurisdictions in which such qualification
is required, provided however, that the Company need not be
qualified in a jurisdiction in which its failure to qualify would
not have a material adverse effect on its operations or financial
condition.
(b) The Company has full corporate power and
authority to enter into and deliver this Agreement, to perform
its obligations hereunder, and to consummate the transactions
contemplated hereby.
(c) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms;
(d) The holders of outstanding shares of capital
stock of the Company and warrants, options or other securities to
purchase shares of capital stock of the Company are not entitled
to any preemptive rights to subscribe for the Series A Shares.
(e) Since the quarterly report on Form 10-Q for
the quarter ended March 31, 1996, there has been no material
adverse change in the condition or general affairs, business,
operations, assets or properties of the Company and its
subsidiaries, financial or otherwise, other than as referred to
in the Prospectus.
(f) The Series A Shares have been duly
authorized, and when issued and paid for, will be validly issued,
fully paid and non-assessable, and upon stockholder approval of
the (i) decrease in par value of the Company's common stock, par
value $13.33 per share ("Common Stock"), (ii) increase in
authorized shares of Common Stock, and (iii) recapitalization of
Series A Preferred Stock into convertible preferred stock as
contemplated by Section 11 of the Certificate of Designation for
such series, the Common<PAGE>
Stock issuable upon conversion of the Series A Shares
will be duly authorized, and when issued, will be validly issued, fully
paid and non-assessable.
(g) The Board of Directors has authorized the (i)
decrease in par value of the Common Stock, (ii) increase in
authorized shares of Common Stock, and (iii) in order to comply
with NASD requirements regarding stockholder approval, the
recapitalization of the Series A Preferred Stock into convertible
preferred stock as contemplated by Section 11 of the Certificate
of Designation for such series (the "Recapitalization"), and
recommended such items to the stockholders of the Company for
approval.
(h) The Series A Shares and 50,000 shares of
Series A Preferred Stock sold to members of management of the
Company simultaneously with the execution of this Agreement are
the only shares of Series A Preferred Stock issued and
outstanding.
(i) As of June 30, 1996, the Company's net assets
total $11,442,000, its retained earnings (deficit) totals
($7,391,000) its stated capital totals $54,081,000 and its
capital in excess of par totals $247,000. All such amounts are
subject to audit.
(j) The issuance of the Series A Shares and the
execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and the compliance with the
terms of this Agreement will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a
default under, or give rise to rights of termination under, any
deed of trust, lease, sublease, the Certificate of Incorporation
or by-laws of the Company or any of its subsidiaries, or any
indenture, mortgage, or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries, or its or their property is
bound, or any applicable law, rule, regulation, judgment, order
or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company
or any of its subsidiaries, or the properties or operations of
any of them.
(k) The computation as to the availability by the
Company to make dividend payments under the terms of the two
Financing Agreements, each dated October 1, 1976 between the City
of Alton, Illinois and the Company attached hereto as Exhibit E
is true and correct as of the date calculated and listed thereon.
(l) Certain members of management of the Company
have executed the stock purchase agreement for Series A Preferred
Stock attached hereto as Exhibit F and will purchase an aggregate
amount of $750,000 of the Company's Series A Preferred Stock
simultaneously with the Closing.
(m) The Company's Board of Directors has
authorized, subject to approval by the stockholders of the
Company of the reduction of the par value per share of the
Company's common stock from $13.33 per share to $0.01 per share,
subject to the requirements of the Delaware General Corporation
Law, the reduction of capital by $54,027,784 and transfer such
amount to surplus. <PAGE>
(n) There are no restrictions or limitations on
the payment of dividends on the Series A Preferred Stock which
are more onerous than the limitations under the Financing
Agreements dated October 1, 1976, between the City of Alton,
Illinois and the Company except under the Delaware General
Corporation Law.
(o) The amendments and waivers with respect to
the Loan and Security Agreement among certain financial
institutions named therein, Bank America Business Credit, Inc.,
as Agent, the Company and certain subsidiaries of the Company,
dated as of September 7, 1994, as amended (the "Loan Agreement"),
attached hereto as Exhibit G either have become effective or
shall become effective simultaneously with the Closing.
(p) All existing employment agreements between
the Company and its executive officers (the "Employment
Agreements"), copies of which are attached hereto as Exhibit A,
have been amended to eliminate the provisions regarding payments
to be made upon a change in control.
(q) Except as disclosed in public filings, the
Company has no agreements or arrangements with its management or
directors.
(r) No event of default is existing under any
indebtedness for borrowed money of the Company or any or its
subsidiaries or under any indenture, mortgage, or other agreement
or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries, or
any of its or their property is bound.
(s) The Prospectus does not and all documents
filed by the Company with the Securities and Exchange Commission
since January 1, 1994, did not at the time of filing, contain any
untrue statement of material fact or omit to state a material
fact necessary in order to make the statements contained therein
not misleading.
(t) No consent is necessary for the consummation
of the transactions contemplated hereby which has not been
obtained.
(u) The Company has not given registration rights
to any person other than Ivaco, Purchaser and certain other
members of management in connection with the purchase of 50,000
shares of Series A Preferred Stock contemporaneously with the
execution hereof.
(v) Immediately prior and without giving effect
to the transactions contemplated hereby, the authorized capital
stock of the Company consists of (i) 7,000,000 shares of common
stock, par value $13.33 per share, of which 4,056,140 shares are
issued and outstanding, and (ii) 2,000,000 shares of preferred
stock, no par value, of which 1,064,036 are designated Series A
Preferred Stock, and none of which are issued and outstanding.
<PAGE>
ARTICLE III
COVENANTS OF THE COMPANY
In further consideration of the agreements of Purchaser
herein contained, the Company covenants as follows:
3.1 Stockholder Approvals. The Company will use its
best efforts to cause its stockholders to approve and authorize,
as soon as possible and in any event on or before September 30,
1996, (a) an increase in the number of authorized shares of the
Company's common stock from 5,000,000 to 25,000,000, (b) a
reduction of the par value per share of common stock from $13.33
per share to $0.01 per share and (c) in order to comply with NASD
requirements regarding stockholder approval, the
Recapitalization.
3.2 Rights Offering. The Company will prepare and
file a registration statement with the Securities and Exchange
Commission with respect to a rights offering to all of the
Company stockholders (the "Rights Offering"), entitling all such
stockholders to subscribe, pro rata (excluding the right of Ivaco
to subscribe for the amount of Series A Preferred Stock purchased
by Ivaco pursuant to the Stock Purchase Agreement dated as of the
date hereof between the Company and Ivaco) for 647,369 shares of
the Company's Series A Preferred Stock. The Company shall
prepare documentation regarding the Rights Offering in a form
which is reasonably satisfactory to Purchaser and shall use its
best efforts to consummate the Rights Offering prior to December
31, 1996.
3.3 No Dilutive Action. The Company will take no
action prior to the Recapitalization Approval Date which would
cause an adjustment under Section 12 of the Certificate of
Designation for the Series A Preferred Stock if such action was
taken after the Recapitalization Approval Date
3.4 Listing of Securities. The Company will use its
best efforts to list the Series A Preferred Stock, if eligible,
on the principal national securities exchange on which the Common
Stock is listed or if such stock is not then so listed, the
NASDAQ National Market System, if eligible, or the over-the-counter market, as
designated on the NASDAQ System Level 1 (or comparable system), if eligible.
3.5 Specific Performance. Because the breach or
anticipated breach of the covenants provided for in this Section
3 will result in immediate and irreparable harm and injury to
Purchaser, for which it will not have an adequate remedy at law,
the Company agrees that Purchaser shall be entitled to relief in
equity, including but not limited to specific performance, to
remedy such breach or anticipated breach and to seek any and all
other legal and equitable remedies to which Purchaser may be
entitled.
<PAGE>
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.1 Notice. All notices, requests, demands, and other
communications required or permitted under this Agreement shall
be in writing and shall be deemed to have been duly given and
made upon being delivered either by courier or fax delivery to
the party for whom it is intended, provided that a copy thereof
is deposited, postage prepaid, certified or registered mail,
return receipt requested, in the United States mail, bearing the
address shown in this Section 4.1 for, or such other address as
may be designated in writing hereafter by, such party:
If to Purchaser:
John B. McKinney
19 Picardy
St. Louis, Missouri 63124
If to the Company:
Laclede Steel Company
One Metropolitan Square
211 North Broadway
St. Louis, Missouri 63102-2738
Attention: Michael H. Lane
With a copy to:
Bryan Cave LLP
One Metropolitan Square, Suite 3600
St. Louis, Missouri 63102
Attention: Frank P. Wolff, Jr.
4.2 Entire Agreement. This Agreement embodies the
entire agreement and understanding of the parties hereto with
respect to the subject matter hereof, and supersedes all prior
and contemporaneous agreements and understandings relative to
such subject matter.
4.3 Counterparts. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be
deemed an original, but all of which taken together shall
constitute one and the same instrument.
4.4 Headings; Interpretation. The article and section
headings contained in this Agreement are inserted for convenience
only and shall not affect in any way the meaning or
interpretation of the Agreement. Each reference in this
Agreement to an Article, Section, or Exhibit, unless otherwise
indicated, shall mean an Article or a Section of this Agreement
or an Exhibit attached to this Agreement, respectively.
References herein to "days", unless otherwise indicated, are to
consecutive calendar days. Both parties have participated<PAGE>
substantially in the
negotiation and drafting of this Agreement
and agree that no ambiguity herein should be construed against
the draftsman.
4.5 Assignment. This Agreement and all the various
rights and obligations arising hereunder shall inure to the
benefit of and be binding upon Purchaser, its successors and
assigns.
4.6 Governing Law. This Agreement shall in all
respects be construed in accordance with and governed by the
substantive laws of the State of Delaware, without reference to
its choice of law rules.
IN WITNESS WHEREOF, each of the Parties hereto has
caused this Agreement to be executed as of the date first above
written.
PURCHASER
John B. McKinney
LACLEDE STEEL COMPANY
By:
Name: Michael H. Lane
Title: Vice President-Finance, Treasurer
and Secretary
<PAGE>
MANAGEMENT STOCK PURCHASE AGREEMENT
THIS MANAGEMENT STOCK PURCHASE AGREEMENT (the
"Agreement") is entered into as of July 30, 1996, by and between
Michael H. Lane, an individual residing at 3708 Sunset Chase
Drive, Sunset Hills, Missouri 63127 ("Purchaser"), and Laclede
Steel Company, a Delaware corporation (the "Company").
RECITALS
A. Purchaser agrees to purchase from the Company, on
the following terms and conditions, 5,000 shares (the "Series A
Shares") of the Company's Series A Preferred Stock, no par value,
(the "Series A Preferred Stock") at a price of $15.00 per share.
B. The Company agrees to sell to Purchaser, on the
following terms and conditions, the Series A Shares.
C. The Form of Certificate of Designation of the
Company's Series A Preferred Stock is attached hereto as Exhibit
A.
NOW, THEREFORE, in consideration of the recitals and
the mutual covenants, representations, warranties, conditions,
and agreement hereinafter expressed, the Parties agree as
follows:
ARTICLE I
PURCHASE AND SALE OF SERIES A SHARES
1.1 The Series A Shares. Upon the terms and subject
to the conditions set forth in this Agreement, at Closing, the
Company shall sell and deliver to Purchaser and Purchaser shall
purchase and accept from the Company the Series A Shares, free
and clear of all security interests, claims, and restrictions.
1.2 Consideration. The consideration that Purchaser
shall pay the Company for the Series A Shares shall be SEVENTY
FIVE THOUSAND DOLLARS ($75,000) ("Purchase Price").
1.3 Closing. The consummation of the transactions
contemplated hereby ("Closing") shall take place at the offices
of the Company at 9:00 a.m. local time on the date hereof
("Closing Date").
1.4 Deliveries of the Company at Closing. The Company
shall issue and deliver to Purchaser a certificate or
certificates evidencing the Series A Shares and the other
agreements, certificates and other instruments referred to in
this Agreement to be executed at or prior to the Closing. In
addition, Bryan Cave LLP, counsel to the Company, shall deliver
its opinion in the form of Exhibit B.
1.5 Deliveries of Purchaser at Closing. At Closing,
Purchaser shall wire in immediately-available funds, to an
account designated by the Company, the Purchase Price.<PAGE>
1.6 Restricted Nature of Series A Shares. Purchaser
acknowledges that the Series A Shares, in its hands, will be
restricted securities which may not be sold or offered for sale
in the absence of an effective registration statement as to such
Series A Shares under the Securities Act of 1933, as amended, or
an opinion of counsel satisfactory to the Company that such
registration is not required. In this regard, at Closing, the
parties hereto shall enter into a Registration Rights Agreement,
substantially in the form of Exhibit C hereto.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Company. The Company
represents and warrants to and agrees with Purchaser that:
(a) The Company is a corporation duly organized
and validly existing, is in good standing under the laws of the
State of Delaware, and has all requisite corporate power and
authority to carry on its business as described in the draft
prospectus attached hereto as Exhibit D (the "Prospectus"). The
Company is duly qualified as a foreign corporation and is in good
standing in all other jurisdictions in which such qualification
is required, provided however, that the Company need not be
qualified in a jurisdiction in which its failure to qualify would
not have a material adverse effect on its operations or financial
condition.
(b) The Company has full corporate power and
authority to enter into and deliver this Agreement, to perform
its obligations hereunder, and to consummate the transactions
contemplated hereby.
(c) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms;
(d) The holders of outstanding shares of capital
stock of the Company and warrants, options or other securities to
purchase shares of capital stock of the Company are not entitled
to any preemptive rights to subscribe for the Series A Shares.
(e) Since the quarterly report on Form 10-Q for
the quarter ended March 31, 1996, there has been no material
adverse change in the condition or general affairs, business,
operations, assets or properties of the Company and its
subsidiaries, financial or otherwise, other than as referred to
in the Prospectus.
(f) The Series A Shares have been duly
authorized, and when issued and paid for, will be validly issued,
fully paid and non-assessable, and upon stockholder approval of
the (i) decrease in par value of the Company's common stock, par
value $13.33 per share ("Common Stock"), (ii) increase in
authorized shares of Common Stock, and (iii) recapitalization of
Series A Preferred Stock into convertible preferred stock as
contemplated by Section 11 of the Certificate of Designation for
such series, the Common<PAGE>
Stock issuable upon conversion of the Series A Shares
will be duly authorized, and when issued, will be validly issued, fully
paid and non-assessable.
(g) The Board of Directors has authorized the (i)
decrease in par value of the Common Stock, (ii) increase in
authorized shares of Common Stock, and (iii) in order to comply
with NASD requirements regarding stockholder approval, the
recapitalization of the Series A Preferred Stock into convertible
preferred stock as contemplated by Section 11 of the Certificate
of Designation for such series (the "Recapitalization"), and
recommended such items to the stockholders of the Company for
approval.
(h) The Series A Shares and 50,000 shares of
Series A Preferred Stock sold to members of management of the
Company simultaneously with the execution of this Agreement are
the only shares of Series A Preferred Stock issued and
outstanding.
(i) As of June 30, 1996, the Company's net assets
total $11,442,000, its retained earnings (deficit) totals
($7,391,000) its stated capital totals $54,081,000 and its
capital in excess of par totals $247,000. All such amounts are
subject to audit.
(j) The issuance of the Series A Shares and the
execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and the compliance with the
terms of this Agreement will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a
default under, or give rise to rights of termination under, any
deed of trust, lease, sublease, the Certificate of Incorporation
or by-laws of the Company or any of its subsidiaries, or any
indenture, mortgage, or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries, or its or their property is
bound, or any applicable law, rule, regulation, judgment, order
or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company
or any of its subsidiaries, or the properties or operations of
any of them.
(k) The computation as to the availability by the
Company to make dividend payments under the terms of the two
Financing Agreements, each dated October 1, 1976 between the City
of Alton, Illinois and the Company attached hereto as Exhibit E
is true and correct as of the date calculated and listed thereon.
(l) Certain members of management of the Company
have executed the stock purchase agreement for Series A Preferred
Stock attached hereto as Exhibit F and will purchase an aggregate
amount of $750,000 of the Company's Series A Preferred Stock
simultaneously with the Closing.
(m) The Company's Board of Directors has
authorized, subject to approval by the stockholders of the
Company of the reduction of the par value per share of the
Company's common stock from $13.33 per share to $0.01 per share,
subject to the requirements of the Delaware General Corporation
Law, the reduction of capital by $54,027,784 and transfer such
amount to surplus. <PAGE>
(n) There are no restrictions or limitations on
the payment of dividends on the Series A Preferred Stock which
are more onerous than the limitations under the Financing
Agreements dated October 1, 1976, between the City of Alton,
Illinois and the Company except under the Delaware General
Corporation Law.
(o) The amendments and waivers with respect to
the Loan and Security Agreement among certain financial
institutions named therein, Bank America Business Credit, Inc.,
as Agent, the Company and certain subsidiaries of the Company,
dated as of September 7, 1994, as amended (the "Loan Agreement"),
attached hereto as Exhibit G either have become effective or
shall become effective simultaneously with the Closing.
(p) All existing employment agreements between
the Company and its executive officers (the "Employment
Agreements"), copies of which are attached hereto as Exhibit A,
have been amended to eliminate the provisions regarding payments
to be made upon a change in control.
(q) Except as disclosed in public filings, the
Company has no agreements or arrangements with its management or
directors.
(r) No event of default is existing under any
indebtedness for borrowed money of the Company or any or its
subsidiaries or under any indenture, mortgage, or other agreement
or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries, or
any of its or their property is bound.
(s) The Prospectus does not and all documents
filed by the Company with the Securities and Exchange Commission
since January 1, 1994, did not at the time of filing, contain any
untrue statement of material fact or omit to state a material
fact necessary in order to make the statements contained therein
not misleading.
(t) No consent is necessary for the consummation
of the transactions contemplated hereby which has not been
obtained.
(u) The Company has not given registration rights
to any person other than Ivaco, Purchaser and certain other
members of management in connection with the purchase of 50,000
shares of Series A Preferred Stock contemporaneously with the
execution hereof.
(v) Immediately prior and without giving effect
to the transactions contemplated hereby, the authorized capital
stock of the Company consists of (i) 7,000,000 shares of common
stock, par value $13.33 per share, of which 4,056,140 shares are
issued and outstanding, and (ii) 2,000,000 shares of preferred
stock, no par value, of which 1,064,036 are designated Series A
Preferred Stock, and none of which are issued and outstanding.
<PAGE>
ARTICLE III
COVENANTS OF THE COMPANY
In further consideration of the agreements of Purchaser
herein contained, the Company covenants as follows:
3.1 Stockholder Approvals. The Company will use its
best efforts to cause its stockholders to approve and authorize,
as soon as possible and in any event on or before September 30,
1996, (a) an increase in the number of authorized shares of the
Company's common stock from 5,000,000 to 25,000,000, (b) a
reduction of the par value per share of common stock from $13.33
per share to $0.01 per share and (c) in order to comply with NASD
requirements regarding stockholder approval, the
Recapitalization.
3.2 Rights Offering. The Company will prepare and
file a registration statement with the Securities and Exchange
Commission with respect to a rights offering to all of the
Company stockholders (the "Rights Offering"), entitling all such
stockholders to subscribe, pro rata (excluding the right of Ivaco
to subscribe for the amount of Series A Preferred Stock purchased
by Ivaco pursuant to the Stock Purchase Agreement dated as of the
date hereof between the Company and Ivaco) for 647,369 shares of
the Company's Series A Preferred Stock. The Company shall
prepare documentation regarding the Rights Offering in a form
which is reasonably satisfactory to Purchaser and shall use its
best efforts to consummate the Rights Offering prior to December
31, 1996.
3.3 No Dilutive Action. The Company will take no
action prior to the Recapitalization Approval Date which would
cause an adjustment under Section 12 of the Certificate of
Designation for the Series A Preferred Stock if such action was
taken after the Recapitalization Approval Date
3.4 Listing of Securities. The Company will use its
best efforts to list the Series A Preferred Stock, if eligible,
on the principal national securities exchange on which the Common
Stock is listed or if such stock is not then so listed, the
NASDAQ National Market System, if eligible, or the over-the-counter market, as
designated on the NASDAQ System Level 1 (or comparable system), if eligible.
3.5 Specific Performance. Because the breach or
anticipated breach of the covenants provided for in this Section
3 will result in immediate and irreparable harm and injury to
Purchaser, for which it will not have an adequate remedy at law,
the Company agrees that Purchaser shall be entitled to relief in
equity, including but not limited to specific performance, to
remedy such breach or anticipated breach and to seek any and all
other legal and equitable remedies to which Purchaser may be
entitled.
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.1 Notice. All notices, requests, demands, and other
communications required or permitted under this Agreement shall
be in writing and shall be deemed to have been duly given and
made upon being delivered either by courier or fax delivery to
the party<PAGE>
for whom it is intended, provided that a copy thereof is
deposited, postage prepaid, certified or registered mail, return
receipt requested, in the United States mail, bearing the address
shown in this Section 4.1 for, or such other address as may be
designated in writing hereafter by, such party:
If to Purchaser:
Michael H. Lane
3708 Sunset Chase Drive
Sunset Hills, Missouri 63127
If to the Company:
Laclede Steel Company
One Metropolitan Square
211 North Broadway
St. Louis, Missouri 63102-2738
Attention: Michael H. Lane
With a copy to:
Bryan Cave LLP
One Metropolitan Square, Suite 3600
St. Louis, Missouri 63102
Attention: Frank P. Wolff, Jr.
4.2 Entire Agreement. This Agreement embodies the
entire agreement and understanding of the parties hereto with
respect to the subject matter hereof, and supersedes all prior
and contemporaneous agreements and understandings relative to
such subject matter.
4.3 Counterparts. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be
deemed an original, but all of which taken together shall
constitute one and the same instrument.
4.4 Headings; Interpretation. The article and section
headings contained in this Agreement are inserted for convenience
only and shall not affect in any way the meaning or
interpretation of the Agreement. Each reference in this
Agreement to an Article, Section, or Exhibit, unless otherwise
indicated, shall mean an Article or a Section of this Agreement
or an Exhibit attached to this Agreement, respectively.
References herein to "days", unless otherwise indicated, are to
consecutive calendar days. Both parties have participated
substantially in the negotiation and drafting of this Agreement
and agree that no ambiguity herein should be construed against
the draftsman.
<PAGE>
4.5 Assignment. This Agreement and all the various
rights and obligations arising hereunder shall inure to the
benefit of and be binding upon Purchaser, its successors and
assigns.
4.6 Governing Law. This Agreement shall in all
respects be construed in accordance with and governed by the
substantive laws of the State of Delaware, without reference to
its choice of law rules.
IN WITNESS WHEREOF, each of the Parties hereto has
caused this Agreement to be executed as of the date first above
written.
PURCHASER
Michael H. Lane
LACLEDE STEEL COMPANY
By:
Name: John B. McKinney
Title: President and Chief Executive
Officer
<PAGE>
MANAGEMENT STOCK PURCHASE AGREEMENT
THIS MANAGEMENT STOCK PURCHASE AGREEMENT (the
"Agreement") is entered into as of July 30, 1996, by and between
J. William Hebenstreit, an individual residing at #10 Hunter's
Point, O'Fallon, Illinois 62269 ("Purchaser"), and Laclede Steel
Company, a Delaware corporation (the "Company").
RECITALS
A. Purchaser agrees to purchase from the Company, on
the following terms and conditions, 21,667 shares (the "Series A
Shares") of the Company's Series A Preferred Stock, no par value,
(the "Series A Preferred Stock") at a price of $15.00 per share.
B. The Company agrees to sell to Purchaser, on the
following terms and conditions, the Series A Shares.
C. The Form of Certificate of Designation of the
Company's Series A Preferred Stock is attached hereto as Exhibit
A.
NOW, THEREFORE, in consideration of the recitals and
the mutual covenants, representations, warranties, conditions,
and agreement hereinafter expressed, the Parties agree as
follows:
ARTICLE I
PURCHASE AND SALE OF SERIES A SHARES
1.1 The Series A Shares. Upon the terms and subject
to the conditions set forth in this Agreement, at Closing, the
Company shall sell and deliver to Purchaser and Purchaser shall
purchase and accept from the Company the Series A Shares, free
and clear of all security interests, claims, and restrictions.
1.2 Consideration. The consideration that Purchaser
shall pay the Company for the Series A Shares shall be THREE
HUNDRED TWENTY FIVE THOUSAND DOLLARS ($325,000) ("Purchase
Price").
1.3 Closing. The consummation of the transactions
contemplated hereby ("Closing") shall take place at the offices
of the Company at 9:00 a.m. local time on the date hereof
("Closing Date").
1.4 Deliveries of the Company at Closing. The Company
shall issue and deliver to Purchaser a certificate or
certificates evidencing the Series A Shares and the other
agreements, certificates and other instruments referred to in
this Agreement to be executed at or prior to the Closing. In
addition, Bryan Cave LLP, counsel to the Company, shall deliver
its opinion in the form of Exhibit B.
1.5 Deliveries of Purchaser at Closing. At Closing,
Purchaser shall wire in immediately-available funds, to an
account designated by the Company, the Purchase Price.
1.6 Restricted Nature of Series A Shares. Purchaser
acknowledges that the Series A Shares, in its hands, will be
restricted securities which may not be sold or offered for sale
in the absence of an effective registration statement as to such
Series A Shares under the Securities Act of 1933, as amended, or
an opinion of counsel satisfactory to the Company that such
registration is not required. In this regard, at Closing, the
parties hereto shall enter into a Registration Rights Agreement,
substantially in the form of Exhibit C hereto.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Company. The Company
represents and warrants to and agrees with Purchaser that:
(a) The Company is a corporation duly organized
and validly existing, is in good standing under the laws of the
State of Delaware, and has all requisite corporate power and
authority to carry on its business as described in the draft
prospectus attached hereto as Exhibit D (the "Prospectus"). The
Company is duly qualified as a foreign corporation and is in good
standing in all other jurisdictions in which such qualification
is required, provided however, that the Company need not be
qualified in a jurisdiction in which its failure to qualify would
not have a material adverse effect on its operations or financial
condition.
(b) The Company has full corporate power and
authority to enter into and deliver this Agreement, to perform
its obligations hereunder, and to consummate the transactions
contemplated hereby.
(c) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms;
(d) The holders of outstanding shares of capital
stock of the Company and warrants, options or other securities to
purchase shares of capital stock of the Company are not entitled
to any preemptive rights to subscribe for the Series A Shares.
(e) Since the quarterly report on Form 10-Q for
the quarter ended March 31, 1996, there has been no material
adverse change in the condition or general affairs, business,
operations, assets or properties of the Company and its
subsidiaries, financial or otherwise, other than as referred to
in the Prospectus.
(f) The Series A Shares have been duly
authorized, and when issued and paid for, will be validly issued,
fully paid and non-assessable, and upon stockholder approval of
the (i) decrease in par value of the Company's common stock, par
value $13.33 per share ("Common Stock"), (ii) increase in
authorized shares of Common Stock, and (iii) recapitalization of
Series A Preferred Stock into convertible preferred stock as
contemplated by Section 11 of the Certificate of Designation for
such series, the Common Stock issuable upon conversion of the
Series A Shares will be duly authorized, and when issued, will be
validly issued, fully paid and non-assessable.
(g) The Board of Directors has authorized the (i)
decrease in par value of the Common Stock, (ii) increase in
authorized shares of Common Stock, and (iii) in order to comply
with NASD requirements regarding stockholder approval, the
recapitalization of the Series A Preferred Stock into convertible
preferred stock as contemplated by Section 11 of the Certificate
of Designation for such series (the "Recapitalization"), and
recommended such items to the stockholders of the Company for
approval.
(h) The Series A Shares and 50,000 shares of
Series A Preferred Stock sold to members of management of the
Company simultaneously with the execution of this Agreement are
the only shares of Series A Preferred Stock issued and
outstanding.
(i) As of June 30, 1996, the Company's net assets
total $11,442,000, its retained earnings (deficit) totals
($7,391,000) its stated capital totals $54,081,000 and its
capital in excess of par totals $247,000. All such amounts are
subject to audit.
(j) The issuance of the Series A Shares and the
execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and the compliance with the
terms of this Agreement will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a
default under, or give rise to rights of termination under, any
deed of trust, lease, sublease, the Certificate of Incorporation
or by-laws of the Company or any of its subsidiaries, or any
indenture, mortgage, or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries, or its or their property is
bound, or any applicable law, rule, regulation, judgment, order
or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company
or any of its subsidiaries, or the properties or operations of
any of them.
(k) The computation as to the availability by the
Company to make dividend payments under the terms of the two
Financing Agreements, each dated October 1, 1976 between the City
of Alton, Illinois and the Company attached hereto as Exhibit E
is true and correct as of the date calculated and listed thereon.
(l) Certain members of management of the Company
have executed the stock purchase agreement for Series A Preferred
Stock attached hereto as Exhibit F and will purchase an aggregate
amount of $750,000 of the Company's Series A Preferred Stock
simultaneously with the Closing.
(m) The Company's Board of Directors has
authorized, subject to approval by the stockholders of the
Company of the reduction of the par value per share of the
Company's common stock from $13.33 per share to $0.01 per share,
subject to the requirements of the Delaware General Corporation
Law, the reduction of capital by $54,027,784 and transfer such
amount to surplus.
(n) There are no restrictions or limitations on
the payment of dividends on the Series A Preferred Stock which
are more onerous than the limitations under the Financing
Agreements dated October 1, 1976, between the City of Alton,
Illinois and the Company except under the Delaware General
Corporation Law.
(o) The amendments and waivers with respect to
the Loan and Security Agreement among certain financial
institutions named therein, Bank America Business Credit, Inc.,
as Agent, the Company and certain subsidiaries of the Company,
dated as of September 7, 1994, as amended (the "Loan Agreement"),
attached hereto as Exhibit G either have become effective or
shall become effective simultaneously with the Closing.
(p) All existing employment agreements between
the Company and its executive officers (the "Employment
Agreements"), copies of which are attached hereto as Exhibit A,
have been amended to eliminate the provisions regarding payments
to be made upon a change in control.
(q) Except as disclosed in public filings, the
Company has no agreements or arrangements with its management or
directors.
(r) No event of default is existing under any
indebtedness for borrowed money of the Company or any or its
subsidiaries or under any indenture, mortgage, or other agreement
or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries, or
any of its or their property is bound.
(s) The Prospectus does not and all documents
filed by the Company with the Securities and Exchange Commission
since January 1, 1994, did not at the time of filing, contain any
untrue statement of material fact or omit to state a material
fact necessary in order to make the statements contained therein
not misleading.
(t) No consent is necessary for the consummation
of the transactions contemplated hereby which has not been
obtained.
(u) The Company has not given registration rights
to any person other than Ivaco, Purchaser and certain other
members of management in connection with the purchase of 50,000
shares of Series A Preferred Stock contemporaneously with the
execution hereof.
(v) Immediately prior and without giving effect
to the transactions contemplated hereby, the authorized capital
stock of the Company consists of (i) 7,000,000 shares of common
stock, par value $13.33 per share, of which 4,056,140 shares are
issued and outstanding, and (ii) 2,000,000 shares of preferred
stock, no par value, of which 1,064,036 are designated Series A
Preferred Stock, and none of which are issued and outstanding.
ARTICLE III
COVENANTS OF THE COMPANY
In further consideration of the agreements of Purchaser
herein contained, the Company covenants as follows:
3.1 Stockholder Approvals. The Company will use its
best efforts to cause its stockholders to approve and authorize,
as soon as possible and in any event on or before September 30,
1996, (a) an increase in the number of authorized shares of the
Company's common stock from 5,000,000 to 25,000,000, (b) a
reduction of the par value per share of common stock from $13.33
per share to $0.01 per share and (c) in order to comply with NASD
requirements regarding stockholder approval, the
Recapitalization.
3.2 Rights Offering. The Company will prepare and
file a registration statement with the Securities and Exchange
Commission with respect to a rights offering to all of the
Company stockholders (the "Rights Offering"), entitling all such
stockholders to subscribe, pro rata (excluding the right of Ivaco
to subscribe for the amount of Series A Preferred Stock purchased
by Ivaco pursuant to the Stock Purchase Agreement dated as of the
date hereof between the Company and Ivaco) for 647,369 shares of
the Company's Series A Preferred Stock. The Company shall
prepare documentation regarding the Rights Offering in a form
which is reasonably satisfactory to Purchaser and shall use its
best efforts to consummate the Rights Offering prior to December
31, 1996.
3.3 No Dilutive Action. The Company will take no
action prior to the Recapitalization Approval Date which would
cause an adjustment under Section 12 of the Certificate of
Designation for the Series A Preferred Stock if such action was
taken after the Recapitalization Approval Date
3.4 Listing of Securities. The Company will use its
best efforts to list the Series A Preferred Stock, if eligible,
on the principal national securities exchange on which the Common
Stock is listed or if such stock is not then so listed, the
NASDAQ National Market System, if eligible, or the over-the-counter market, as
designated on the NASDAQ System Level 1 (or comparable system), if eligible.
3.5 Specific Performance. Because the breach or
anticipated breach of the covenants provided for in this Section
3 will result in immediate and irreparable harm and injury to
Purchaser, for which it will not have an adequate remedy at law,
the Company agrees that Purchaser shall be entitled to relief in
equity, including but not limited to specific performance, to
remedy such breach or anticipated breach and to seek any and all
other legal and equitable remedies to which Purchaser may be
entitled.
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.1 Notice. All notices, requests, demands, and other
communications required or permitted under this Agreement shall
be in writing and shall be deemed to have been duly given and
made upon being delivered either by courier or fax delivery to
the party for whom it is intended, provided that a copy thereof
is deposited, postage prepaid, certified or registered mail,
return receipt requested, in the United States mail, bearing the
address shown in this Section 4.1 for, or such other address as
may be designated in writing hereafter by, such party:
If to Purchaser:
J. William Hebenstreit
#10 Hunter's Point
O'Fallon, Illinois 62269
If to the Company:
Laclede Steel Company
One Metropolitan Square
211 North Broadway
St. Louis, Missouri 63102-2738
Attention: Michael H. Lane
With a copy to:
Bryan Cave LLP
One Metropolitan Square, Suite 3600
St. Louis, Missouri 63102
Attention: Frank P. Wolff, Jr.
4.2 Entire Agreement. This Agreement embodies the
entire agreement and understanding of the parties hereto with
respect to the subject matter hereof, and supersedes all prior
and contemporaneous agreements and understandings relative to
such subject matter.
4.3 Counterparts. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be
deemed an original, but all of which taken together shall
constitute one and the same instrument.
4.4 Headings; Interpretation. The article and section
headings contained in this Agreement are inserted for convenience
only and shall not affect in any way the meaning or
interpretation of the Agreement. Each reference in this
Agreement to an Article, Section, or Exhibit, unless otherwise
indicated, shall mean an Article or a Section of this Agreement
or an Exhibit attached to this Agreement, respectively.
References herein to "days", unless otherwise indicated, are to
consecutive calendar days. Both parties have participated
substantially in the negotiation and drafting of this Agreement
and agree that no ambiguity herein should be construed against
the draftsman.
4.5 Assignment. This Agreement and all the various
rights and obligations arising hereunder shall inure to the
benefit of and be binding upon Purchaser, its successors and
assigns.
4.6 Governing Law. This Agreement shall in all
respects be construed in accordance with and governed by the
substantive laws of the State of Delaware, without reference to
its choice of law rules.
IN WITNESS WHEREOF, each of the Parties hereto has
caused this Agreement to be executed as of the date first above
written.
PURCHASER
J. William Hebenstreit
LACLEDE STEEL COMPANY
By:
Name: John B. McKinney
Title: President and Chief Executive
Officer
<PAGE>
MANAGEMENT STOCK PURCHASE AGREEMENT
THIS MANAGEMENT STOCK PURCHASE AGREEMENT (the
"Agreement") is entered into as of July 30, 1996, by and between
Larry J. Schnurbusch, an individual residing at 12248 Winrock
Drive, Creve Coeur, Missouri 63141 ("Purchaser"), and Laclede
Steel Company, a Delaware corporation (the "Company").
RECITALS
A. Purchaser agrees to purchase from the Company, on
the following terms and conditions, 5,000 shares (the "Series A
Shares") of the Company's Series A Preferred Stock, no par value,
(the "Series A Preferred Stock") at a price of $15.00 per share.
B. The Company agrees to sell to Purchaser, on the
following terms and conditions, the Series A Shares.
C. The Form of Certificate of Designation of the
Company's Series A Preferred Stock is attached hereto as Exhibit
A.
NOW, THEREFORE, in consideration of the recitals and
the mutual covenants, representations, warranties, conditions,
and agreement hereinafter expressed, the Parties agree as
follows:
ARTICLE I
PURCHASE AND SALE OF SERIES A SHARES
1.1 The Series A Shares. Upon the terms and subject
to the conditions set forth in this Agreement, at Closing, the
Company shall sell and deliver to Purchaser and Purchaser shall
purchase and accept from the Company the Series A Shares, free
and clear of all security interests, claims, and restrictions.
1.2 Consideration. The consideration that Purchaser
shall pay the Company for the Series A Shares shall be SEVENTY
FIVE THOUSAND DOLLARS ($75,000) ("Purchase Price").
1.3 Closing. The consummation of the transactions
contemplated hereby ("Closing") shall take place at the offices
of the Company at 9:00 a.m. local time on the date hereof
("Closing Date").
1.4 Deliveries of the Company at Closing. The Company
shall issue and deliver to Purchaser a certificate or
certificates evidencing the Series A Shares and the other
agreements, certificates and other instruments referred to in
this Agreement to be executed at or prior to the Closing. In
addition, Bryan Cave LLP, counsel to the Company, shall deliver
its opinion in the form of Exhibit B.
1.5 Deliveries of Purchaser at Closing. At Closing,
Purchaser shall wire in immediately-available funds, to an
account designated by the Company, the Purchase Price.
1.6 Restricted Nature of Series A Shares. Purchaser
acknowledges that the Series A Shares, in its hands, will be
restricted securities which may not be sold or offered for sale
in the absence of an effective registration statement as to such
Series A Shares under the Securities Act of 1933, as amended, or
an opinion of counsel satisfactory to the Company that such
registration is not required. In this regard, at Closing, the
parties hereto shall enter into a Registration Rights Agreement,
substantially in the form of Exhibit C hereto.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Company. The Company
represents and warrants to and agrees with Purchaser that:
(a) The Company is a corporation duly organized
and validly existing, is in good standing under the laws of the
State of Delaware, and has all requisite corporate power and
authority to carry on its business as described in the draft
prospectus attached hereto as Exhibit D (the "Prospectus"). The
Company is duly qualified as a foreign corporation and is in good
standing in all other jurisdictions in which such qualification
is required, provided however, that the Company need not be
qualified in a jurisdiction in which its failure to qualify would
not have a material adverse effect on its operations or financial
condition.
(b) The Company has full corporate power and
authority to enter into and deliver this Agreement, to perform
its obligations hereunder, and to consummate the transactions
contemplated hereby.
(c) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms;
(d) The holders of outstanding shares of capital
stock of the Company and warrants, options or other securities to
purchase shares of capital stock of the Company are not entitled
to any preemptive rights to subscribe for the Series A Shares.
(e) Since the quarterly report on Form 10-Q for
the quarter ended March 31, 1996, there has been no material
adverse change in the condition or general affairs, business,
operations, assets or properties of the Company and its
subsidiaries, financial or otherwise, other than as referred to
in the Prospectus.
(f) The Series A Shares have been duly
authorized, and when issued and paid for, will be validly issued,
fully paid and non-assessable, and upon stockholder approval of
the (i) decrease in par value of the Company's common stock, par
value $13.33 per share ("Common Stock"), (ii) increase in
authorized shares of Common Stock, and (iii) recapitalization of
Series A Preferred Stock into convertible preferred stock as
contemplated by Section 11 of the Certificate of Designation for
such series, the Common Stock issuable upon conversion of the
Series A Shares will be duly authorized, and when issued, will be
validly issued, fully paid and non-assessable.
(g) The Board of Directors has authorized the (i)
decrease in par value of the Common Stock, (ii) increase in
authorized shares of Common Stock, and (iii) in order to comply
with NASD requirements regarding stockholder approval, the
recapitalization of the Series A Preferred Stock into convertible
preferred stock as contemplated by Section 11 of the Certificate
of Designation for such series (the "Recapitalization"), and
recommended such items to the stockholders of the Company for
approval.
(h) The Series A Shares and 50,000 shares of
Series A Preferred Stock sold to members of management of the
Company simultaneously with the execution of this Agreement are
the only shares of Series A Preferred Stock issued and
outstanding.
(i) As of June 30, 1996, the Company's net assets
total $11,442,000, its retained earnings (deficit) totals
($7,391,000) its stated capital totals $54,081,000 and its
capital in excess of par totals $247,000. All such amounts are
subject to audit.
(j) The issuance of the Series A Shares and the
execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and the compliance with the
terms of this Agreement will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a
default under, or give rise to rights of termination under, any
deed of trust, lease, sublease, the Certificate of Incorporation
or by-laws of the Company or any of its subsidiaries, or any
indenture, mortgage, or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries, or its or their property is
bound, or any applicable law, rule, regulation, judgment, order
or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company
or any of its subsidiaries, or the properties or operations of
any of them.
(k) The computation as to the availability by the
Company to make dividend payments under the terms of the two
Financing Agreements, each dated October 1, 1976 between the City
of Alton, Illinois and the Company attached hereto as Exhibit E
is true and correct as of the date calculated and listed thereon.
(l) Certain members of management of the Company
have executed the stock purchase agreement for Series A Preferred
Stock attached hereto as Exhibit F and will purchase an aggregate
amount of $750,000 of the Company's Series A Preferred Stock
simultaneously with the Closing.
(m) The Company's Board of Directors has
authorized, subject to approval by the stockholders of the
Company of the reduction of the par value per share of the
Company's common stock from $13.33 per share to $0.01 per share,
subject to the requirements of the Delaware General Corporation
Law, the reduction of capital by $54,027,784 and transfer such
amount to surplus.
(n) There are no restrictions or limitations on
the payment of dividends on the Series A Preferred Stock which
are more onerous than the limitations under the Financing
Agreements dated October 1, 1976, between the City of Alton,
Illinois and the Company except under the Delaware General
Corporation Law.
(o) The amendments and waivers with respect to
the Loan and Security Agreement among certain financial
institutions named therein, Bank America Business Credit, Inc.,
as Agent, the Company and certain subsidiaries of the Company,
dated as of September 7, 1994, as amended (the "Loan Agreement"),
attached hereto as Exhibit G either have become effective or
shall become effective simultaneously with the Closing.
(p) All existing employment agreements between
the Company and its executive officers (the "Employment
Agreements"), copies of which are attached hereto as Exhibit A,
have been amended to eliminate the provisions regarding payments
to be made upon a change in control.
(q) Except as disclosed in public filings, the
Company has no agreements or arrangements with its management or
directors.
(r) No event of default is existing under any
indebtedness for borrowed money of the Company or any or its
subsidiaries or under any indenture, mortgage, or other agreement
or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries, or
any of its or their property is bound.
(s) The Prospectus does not and all documents
filed by the Company with the Securities and Exchange Commission
since January 1, 1994, did not at the time of filing, contain any
untrue statement of material fact or omit to state a material
fact necessary in order to make the statements contained therein
not misleading.
(t) No consent is necessary for the consummation
of the transactions contemplated hereby which has not been
obtained.
(u) The Company has not given registration rights
to any person other than Ivaco, Purchaser and certain other
members of management in connection with the purchase of 50,000
shares of Series A Preferred Stock contemporaneously with the
execution hereof.
(v) Immediately prior and without giving effect
to the transactions contemplated hereby, the authorized capital
stock of the Company consists of (i) 7,000,000 shares of common
stock, par value $13.33 per share, of which 4,056,140 shares are
issued and outstanding, and (ii) 2,000,000 shares of preferred
stock, no par value, of which 1,064,036 are designated Series A
Preferred Stock, and none of which are issued and outstanding.
ARTICLE III
COVENANTS OF THE COMPANY
In further consideration of the agreements of Purchaser
herein contained, the Company covenants as follows:
3.1 Stockholder Approvals. The Company will use its
best efforts to cause its stockholders to approve and authorize,
as soon as possible and in any event on or before September 30,
1996, (a) an increase in the number of authorized shares of the
Company's common stock from 5,000,000 to 25,000,000, (b) a
reduction of the par value per share of common stock from $13.33
per share to $0.01 per share and (c) in order to comply with NASD
requirements regarding stockholder approval, the
Recapitalization.
3.2 Rights Offering. The Company will prepare and
file a registration statement with the Securities and Exchange
Commission with respect to a rights offering to all of the
Company stockholders (the "Rights Offering"), entitling all such
stockholders to subscribe, pro rata (excluding the right of Ivaco
to subscribe for the amount of Series A Preferred Stock purchased
by Ivaco pursuant to the Stock Purchase Agreement dated as of the
date hereof between the Company and Ivaco) for 647,369 shares of
the Company's Series A Preferred Stock. The Company shall
prepare documentation regarding the Rights Offering in a form
which is reasonably satisfactory to Purchaser and shall use its
best efforts to consummate the Rights Offering prior to December
31, 1996.
3.3 No Dilutive Action. The Company will take no
action prior to the Recapitalization Approval Date which would
cause an adjustment under Section 12 of the Certificate of
Designation for the Series A Preferred Stock if such action was
taken after the Recapitalization Approval Date
3.4 Listing of Securities. The Company will use its
best efforts to list the Series A Preferred Stock, if eligible,
on the principal national securities exchange on which the Common
Stock is listed or if such stock is not then so listed, the
NASDAQ National Market System, if eligible, or the over-the-counter market, as
designated on the NASDAQ System Level 1 (or comparable system), if eligible.
3.5 Specific Performance. Because the breach or
anticipated breach of the covenants provided for in this Section
3 will result in immediate and irreparable harm and injury to
Purchaser, for which it will not have an adequate remedy at law,
the Company agrees that Purchaser shall be entitled to relief in
equity, including but not limited to specific performance, to
remedy such breach or anticipated breach and to seek any and all
other legal and equitable remedies to which Purchaser may be
entitled.
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.1 Notice. All notices, requests, demands, and other
communications required or permitted under this Agreement shall
be in writing and shall be deemed to have been duly given and
made upon being delivered either by courier or fax delivery to
the party for whom it is intended, provided that a copy thereof
is deposited, postage prepaid, certified or registered mail,
return receipt requested, in the United States mail, bearing the
address shown in this Section 4.1 for, or such other address as
may be designated in writing hereafter by, such party:
If to Purchaser:
Larry J. Schnurbusch
12248 Winrock Drive
Creve Coeur, Missouri 63141
If to the Company:
Laclede Steel Company
One Metropolitan Square
211 North Broadway
St. Louis, Missouri 63102-2738
Attention: Michael H. Lane
With a copy to:
Bryan Cave LLP
One Metropolitan Square, Suite 3600
St. Louis, Missouri 63102
Attention: Frank P. Wolff, Jr.
4.2 Entire Agreement. This Agreement embodies the
entire agreement and understanding of the parties hereto with
respect to the subject matter hereof, and supersedes all prior
and contemporaneous agreements and understandings relative to
such subject matter.
4.3 Counterparts. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be
deemed an original, but all of which taken together shall
constitute one and the same instrument.
4.4 Headings; Interpretation. The article and section
headings contained in this Agreement are inserted for convenience
only and shall not affect in any way the meaning or
interpretation of the Agreement. Each reference in this
Agreement to an Article, Section, or Exhibit, unless otherwise
indicated, shall mean an Article or a Section of this Agreement
or an Exhibit attached to this Agreement, respectively.
References herein to "days", unless otherwise indicated, are to
consecutive calendar days. Both parties have participated
substantially in the negotiation and drafting of this Agreement
and agree that no ambiguity herein should be construed against
the draftsman.
4.5 Assignment. This Agreement and all the various
rights and obligations arising hereunder shall inure to the
benefit of and be binding upon Purchaser, its successors and
assigns.
4.6 Governing Law. This Agreement shall in all
respects be construed in accordance with and governed by the
substantive laws of the State of Delaware, without reference to
its choice of law rules.
IN WITNESS WHEREOF, each of the Parties hereto has
caused this Agreement to be executed as of the date first above
written.
PURCHASER
Larry J. Schnurbusch
LACLEDE STEEL COMPANY
By:
Name: John B. McKinney
Title: President and Chief Executive
Officer
<PAGE>
MANAGEMENT STOCK PURCHASE AGREEMENT
THIS MANAGEMENT STOCK PURCHASE AGREEMENT (the
"Agreement") is entered into as of July 30, 1996, by and between
H. Bruce Nethington, an individual residing at 1130 South Geyer
Road, Kirkwood, Missouri 63122 ("Purchaser"), and Laclede Steel
Company, a Delaware corporation (the "Company").
RECITALS
A. Purchaser agrees to purchase from the Company, on
the following terms and conditions, 5,000 shares (the "Series A
Shares") of the Company's Series A Preferred Stock, no par value,
(the "Series A Preferred Stock") at a price of $15.00 per share.
B. The Company agrees to sell to Purchaser, on the
following terms and conditions, the Series A Shares.
C. The Form of Certificate of Designation of the
Company's Series A Preferred Stock is attached hereto as Exhibit
A.
NOW, THEREFORE, in consideration of the recitals and
the mutual covenants, representations, warranties, conditions,
and agreement hereinafter expressed, the Parties agree as
follows:
ARTICLE I
PURCHASE AND SALE OF SERIES A SHARES
1.1 The Series A Shares. Upon the terms and subject
to the conditions set forth in this Agreement, at Closing, the
Company shall sell and deliver to Purchaser and Purchaser shall
purchase and accept from the Company the Series A Shares, free
and clear of all security interests, claims, and restrictions.
1.2 Consideration. The consideration that Purchaser
shall pay the Company for the Series A Shares shall be SEVENTY
FIVE THOUSAND DOLLARS ($75,000) ("Purchase Price").
1.3 Closing. The consummation of the transactions
contemplated hereby ("Closing") shall take place at the offices
of the Company at 9:00 a.m. local time on the date hereof
("Closing Date").
1.4 Deliveries of the Company at Closing. The Company
shall issue and deliver to Purchaser a certificate or
certificates evidencing the Series A Shares and the other
agreements, certificates and other instruments referred to in
this Agreement to be executed at or prior to the Closing. In
addition, Bryan Cave LLP, counsel to the Company, shall deliver
its opinion in the form of Exhibit B.
1.5 Deliveries of Purchaser at Closing. At Closing,
Purchaser shall wire in immediately-available funds, to an
account designated by the Company, the Purchase Price.
1.6 Restricted Nature of Series A Shares. Purchaser
acknowledges that the Series A Shares, in its hands, will be
restricted securities which may not be sold or offered for sale
in the absence of an effective registration statement as to such
Series A Shares under the Securities Act of 1933, as amended, or
an opinion of counsel satisfactory to the Company that such
registration is not required. In this regard, at Closing, the
parties hereto shall enter into a Registration Rights Agreement,
substantially in the form of Exhibit C hereto.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties of the Company. The Company
represents and warrants to and agrees with Purchaser that:
(a) The Company is a corporation duly organized
and validly existing, is in good standing under the laws of the
State of Delaware, and has all requisite corporate power and
authority to carry on its business as described in the draft
prospectus attached hereto as Exhibit D (the "Prospectus"). The
Company is duly qualified as a foreign corporation and is in good
standing in all other jurisdictions in which such qualification
is required, provided however, that the Company need not be
qualified in a jurisdiction in which its failure to qualify would
not have a material adverse effect on its operations or financial
condition.
(b) The Company has full corporate power and
authority to enter into and deliver this Agreement, to perform
its obligations hereunder, and to consummate the transactions
contemplated hereby.
(c) This Agreement has been duly authorized,
executed and delivered by the Company and constitutes the legal,
valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms;
(d) The holders of outstanding shares of capital
stock of the Company and warrants, options or other securities to
purchase shares of capital stock of the Company are not entitled
to any preemptive rights to subscribe for the Series A Shares.
(e) Since the quarterly report on Form 10-Q for
the quarter ended March 31, 1996, there has been no material
adverse change in the condition or general affairs, business,
operations, assets or properties of the Company and its
subsidiaries, financial or otherwise, other than as referred to
in the Prospectus.
(f) The Series A Shares have been duly
authorized, and when issued and paid for, will be validly issued,
fully paid and non-assessable, and upon stockholder approval of
the (i) decrease in par value of the Company's common stock, par
value $13.33 per share ("Common Stock"), (ii) increase in
authorized shares of Common Stock, and (iii) recapitalization of
Series A Preferred Stock into convertible preferred stock as
contemplated by Section 11 of the Certificate of Designation for
such series, the Common Stock issuable upon conversion of the
Series A Shares will be duly authorized, and when issued, will be
validly issued, fully paid and non-assessable.
(g) The Board of Directors has authorized the (i)
decrease in par value of the Common Stock, (ii) increase in
authorized shares of Common Stock, and (iii) in order to comply
with NASD requirements regarding stockholder approval, the
recapitalization of the Series A Preferred Stock into convertible
preferred stock as contemplated by Section 11 of the Certificate
of Designation for such series (the "Recapitalization"), and
recommended such items to the stockholders of the Company for
approval.
(h) The Series A Shares and 50,000 shares of
Series A Preferred Stock sold to members of management of the
Company simultaneously with the execution of this Agreement are
the only shares of Series A Preferred Stock issued and
outstanding.
(i) As of June 30, 1996, the Company's net assets
total $11,442,000, its retained earnings (deficit) totals
($7,391,000) its stated capital totals $54,081,000 and its
capital in excess of par totals $247,000. All such amounts are
subject to audit.
(j) The issuance of the Series A Shares and the
execution and delivery of this Agreement, the consummation of the
transactions herein contemplated and the compliance with the
terms of this Agreement will not conflict with or result in a
breach of any of the terms or provisions of, or constitute a
default under, or give rise to rights of termination under, any
deed of trust, lease, sublease, the Certificate of Incorporation
or by-laws of the Company or any of its subsidiaries, or any
indenture, mortgage, or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries, or its or their property is
bound, or any applicable law, rule, regulation, judgment, order
or decree of any government, governmental instrumentality or
court, domestic or foreign, having jurisdiction over the Company
or any of its subsidiaries, or the properties or operations of
any of them.
(k) The computation as to the availability by the
Company to make dividend payments under the terms of the two
Financing Agreements, each dated October 1, 1976 between the City
of Alton, Illinois and the Company attached hereto as Exhibit E
is true and correct as of the date calculated and listed thereon.
(l) Certain members of management of the Company
have executed the stock purchase agreement for Series A Preferred
Stock attached hereto as Exhibit F and will purchase an aggregate
amount of $750,000 of the Company's Series A Preferred Stock
simultaneously with the Closing.
(m) The Company's Board of Directors has
authorized, subject to approval by the stockholders of the
Company of the reduction of the par value per share of the
Company's common stock from $13.33 per share to $0.01 per share,
subject to the requirements of the Delaware General Corporation
Law, the reduction of capital by $54,027,784 and transfer such
amount to surplus.
(n) There are no restrictions or limitations on
the payment of dividends on the Series A Preferred Stock which
are more onerous than the limitations under the Financing
Agreements dated October 1, 1976, between the City of Alton,
Illinois and the Company except under the Delaware General
Corporation Law.
(o) The amendments and waivers with respect to
the Loan and Security Agreement among certain financial
institutions named therein, Bank America Business Credit, Inc.,
as Agent, the Company and certain subsidiaries of the Company,
dated as of September 7, 1994, as amended (the "Loan Agreement"),
attached hereto as Exhibit G either have become effective or
shall become effective simultaneously with the Closing.
(p) All existing employment agreements between
the Company and its executive officers (the "Employment
Agreements"), copies of which are attached hereto as Exhibit A,
have been amended to eliminate the provisions regarding payments
to be made upon a change in control.
(q) Except as disclosed in public filings, the
Company has no agreements or arrangements with its management or
directors.
(r) No event of default is existing under any
indebtedness for borrowed money of the Company or any or its
subsidiaries or under any indenture, mortgage, or other agreement
or instrument to which the Company or any of its subsidiaries is
a party or by which the Company or any of its subsidiaries, or
any of its or their property is bound.
(s) The Prospectus does not and all documents
filed by the Company with the Securities and Exchange Commission
since January 1, 1994, did not at the time of filing, contain any
untrue statement of material fact or omit to state a material
fact necessary in order to make the statements contained therein
not misleading.
(t) No consent is necessary for the consummation
of the transactions contemplated hereby which has not been
obtained.
(u) The Company has not given registration rights
to any person other than Ivaco, Purchaser and certain other
members of management in connection with the purchase of 50,000
shares of Series A Preferred Stock contemporaneously with the
execution hereof.
(v) Immediately prior and without giving effect
to the transactions contemplated hereby, the authorized capital
stock of the Company consists of (i) 7,000,000 shares of common
stock, par value $13.33 per share, of which 4,056,140 shares are
issued and outstanding, and (ii) 2,000,000 shares of preferred
stock, no par value, of which 1,064,036 are designated Series A
Preferred Stock, and none of which are issued and outstanding.
ARTICLE III
COVENANTS OF THE COMPANY
In further consideration of the agreements of Purchaser
herein contained, the Company covenants as follows:
3.1 Stockholder Approvals. The Company will use its
best efforts to cause its stockholders to approve and authorize,
as soon as possible and in any event on or before September 30,
1996, (a) an increase in the number of authorized shares of the
Company's common stock from 5,000,000 to 25,000,000, (b) a
reduction of the par value per share of common stock from $13.33
per share to $0.01 per share and (c) in order to comply with NASD
requirements regarding stockholder approval, the
Recapitalization.
3.2 Rights Offering. The Company will prepare and
file a registration statement with the Securities and Exchange
Commission with respect to a rights offering to all of the
Company stockholders (the "Rights Offering"), entitling all such
stockholders to subscribe, pro rata (excluding the right of Ivaco
to subscribe for the amount of Series A Preferred Stock purchased
by Ivaco pursuant to the Stock Purchase Agreement dated as of the
date hereof between the Company and Ivaco) for 647,369 shares of
the Company's Series A Preferred Stock. The Company shall
prepare documentation regarding the Rights Offering in a form
which is reasonably satisfactory to Purchaser and shall use its
best efforts to consummate the Rights Offering prior to December
31, 1996.
3.3 No Dilutive Action. The Company will take no
action prior to the Recapitalization Approval Date which would
cause an adjustment under Section 12 of the Certificate of
Designation for the Series A Preferred Stock if such action was
taken after the Recapitalization Approval Date
3.4 Listing of Securities. The Company will use its
best efforts to list the Series A Preferred Stock, if eligible,
on the principal national securities exchange on which the Common
Stock is listed or if such stock is not then so listed, the
NASDAQ National Market System, if eligible, or the over-the-counter market, as
designated on the NASDAQ System Level 1 (or comparable system), if eligible.
3.5 Specific Performance. Because the breach or
anticipated breach of the covenants provided for in this Section
3 will result in immediate and irreparable harm and injury to
Purchaser, for which it will not have an adequate remedy at law,
the Company agrees that Purchaser shall be entitled to relief in
equity, including but not limited to specific performance, to
remedy such breach or anticipated breach and to seek any and all
other legal and equitable remedies to which Purchaser may be
entitled.
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.1 Notice. All notices, requests, demands, and other
communications required or permitted under this Agreement shall
be in writing and shall be deemed to have been duly given and
made upon being delivered either by courier or fax delivery to
the party for whom it is intended, provided that a copy thereof
is deposited, postage prepaid, certified or registered mail,
return receipt requested, in the United States mail, bearing the
address shown in this Section 4.1 for, or such other address as
may be designated in writing hereafter by, such party:
If to Purchaser:
H. Bruce Nethington
1130 South Geyer Road
Kirkwood, Missouri 63122
If to the Company:
Laclede Steel Company
One Metropolitan Square
211 North Broadway
St. Louis, Missouri 63102-2738
Attention: Michael H. Lane
With a copy to:
Bryan Cave LLP
One Metropolitan Square, Suite 3600
St. Louis, Missouri 63102
Attention: Frank P. Wolff, Jr.
4.2 Entire Agreement. This Agreement embodies the
entire agreement and understanding of the parties hereto with
respect to the subject matter hereof, and supersedes all prior
and contemporaneous agreements and understandings relative to
such subject matter.
4.3 Counterparts. This Agreement may be executed
simultaneously in multiple counterparts, each of which shall be
deemed an original, but all of which taken together shall
constitute one and the same instrument.
4.4 Headings; Interpretation. The article and section
headings contained in this Agreement are inserted for convenience
only and shall not affect in any way the meaning or
interpretation of the Agreement. Each reference in this
Agreement to an Article, Section, or Exhibit, unless otherwise
indicated, shall mean an Article or a Section of this Agreement
or an Exhibit attached to this Agreement, respectively.
References herein to "days", unless otherwise indicated, are to
consecutive calendar days. Both parties have participated
substantially in the negotiation and drafting of this Agreement
and agree that no ambiguity herein should be construed against
the draftsman.
4.5 Assignment. This Agreement and all the various
rights and obligations arising hereunder shall inure to the
benefit of and be binding upon Purchaser, its successors and
assigns.
4.6 Governing Law. This Agreement shall in all
respects be construed in accordance with and governed by the
substantive laws of the State of Delaware, without reference to
its choice of law rules.
IN WITNESS WHEREOF, each of the Parties hereto has
caused this Agreement to be executed as of the date first above
written.
PURCHASER
H. Bruce Nethington
LACLEDE STEEL COMPANY
By:
Name: John B. McKinney
Title: President and Chief Executive
Officer
<PAGE>
RESTATED EMPLOYMENT
AGREEMENT
THIS RESTATED EMPLOYMENT AGREEMENT is made and
entered into as of the 30th day of July, 1996, by and between
LACLEDE STEEL COMPANY, a Delaware corporation ("Employer"), and
JOHN B. McKINNEY ("Employee").
WHEREAS, Employee and Employer previously entered into
an employment agreement as of the 19th day of October, 1994 (the
"Original Employment Agreement"); and
WHEREAS, Employer and Employee desire to amend and
restate the Original Employment Agreement in its entirety,
pursuant to this Restated Employment Agreement; and
WHEREAS, Employee desires to be employed by Employer
and Employer desires to employ Employee under the terms and
conditions set forth in this Restated Employment Agreement; and
WHEREAS, it is Employer's intention to employ
Employee upon the terms and conditions herein, which recognize
and compensate Employee for the obligations of Employee
undertaken hereunder, including specifically, but not by way of
limitation, the agreement of Employee not to compete with the
business of Employer, as provided in paragraph 8(a)(iii) (see
page 8), for the period provided in paragraph 8(a) upon the
termination of Employee's employment by Employer for any reason;
it being understood and agreed that Employee is employed by
Employer to protect and expand the business of Employer;
NOW, THEREFORE, in consideration of the foregoing
and the promises and agreements herein contained, the parties
agree as follows:
1. Employment. Employer hereby employs Employee,
and Employee hereby accepts such employment from Employer upon
the terms and conditions hereinafter set forth. This Restated
Employment Agreement supercedes the Original Employment
Agreement.
2. Term of Employment. The term of Employee's
employment under this Restated Employment Agreement shall be for
the period commencing July 30, 1996, and continuing through
August 2, 1999, or upon the earlier occurrence of any of the
following events:
(a) Whenever Employer and Employee shall
mutually agree in writing to terminate Employee's employment by
Employer;
(b) Upon the death of Employee;
(c) For "cause," which shall mean Employee's
dishonesty or unlawful acts committed in connection with the
business of Employer, and which results in substantial gain or
profit to Employee.
(d) At Employer's option and by action of
Employer's Board of Directors on thirty (30) days' written notice
in the event of Employee's Disability (defined as the failure
substantially to discharge Employee's duties as defined under
this Agreement for ninety (90) consecutive days or one hundred
twenty (120) days (whether or not consecutive) in any twelve (12)
month period, as a result of an injury, disease, sickness or
other physical or mental incapacity). A determination of
Employee's Disability shall be made by a qualified medical doctor
licensed to practice in the State of Missouri chosen by Employer
subject to Employee's approval, which approval shall not be
unreasonably withheld. Employee shall consent to be examined by
Employer's medical doctor and shall consent to allow Employee's
medical doctor to discuss Employee's medical condition with
Employer. Notwithstanding anything to the contrary contained
herein, Employee's Disability shall not be deemed to have
commenced until full coverage with respect to such Disability
shall have been approved by Employer's disability insurance
carrier and payment under Employer's group disability policy for
such Disability shall have commenced.
3. Duties of Employee. During Employee's
employment by Employer, Employee shall serve Employer to the best
of Employee's ability and shall perform such duties as are
typically performed by a president and chief executive officer of
a steel manufacturing corporation with operations similar to
Employer. Employee agrees to devote Employee's time and efforts
to the business of Employer (except for usual vacations and
reasonable time for attention to personal affairs so long as
Employee's performance hereunder is not adversely affected
thereby), and to be loyal and faithful at all times, constantly
endeavoring to improve Employee's ability and knowledge of the
business of Employer in an effort to increase the value of
Employee's services for the mutual benefit of Employee and
Employer.
4. Compensation.
(a) Employer agrees to pay Employee for
Employee's services during the term of Employee's employment
hereunder. Employee's base salary shall be the greater of (i) an
annual rate of Three Hundred Sixty-Four Thousand Five Hundred
($364,500.00) or (ii) the highest annual base salary authorized
by the Board of Directors after the date hereof. Employee's base
salary shall be due and payable in twelve (12) equal monthly
installments. Additionally, during the term of Employee's
employment by Employer hereunder, Employee's compensation shall
be reviewed and may be increased and/or Employee may be paid
additional or special compensation including without limitation
stock options, stock appreciation rights and other incentive
compensation, or bonuses (based on the earnings of Employer, the
performance of Employee or otherwise) from time to time by the
mutual agreement of Employee and Employer, as determined by the
Board of Directors of Employer. In addition, during the term of
this Agreement, Employee shall receive such fringe benefits as
are made available by Employer from time to time to other
employees of Employer at Employee's level of employment.
(b) In the event of the termination of
Employee's employment either (i) by Employee for any reason
including death or Disability, or (ii) by Employer without
"cause" (as defined in paragraph 2 herein), Employee shall be
paid incentive compensation for the fiscal year in which such
termination occurred in an amount equal to the product of (a) the
amount of incentive compensation to which he would have been
entitled for such fiscal year had there been no termination of
employment and (b) a fraction, the numerator of which is the
number of days of such fiscal year in which Employee remained in
the employment of Employer and the denominator of which is 365.
5. Life Insurance Benefits.
(a) During the term of this Agreement,
Employer shall be obligated to keep in force life insurance on
the life of Employee in the amount of One Million Seven Hundred
Ten Thousand Seven Hundred Twenty Dollars ($1,710,720.00), Eight
Hundred Thousand Dollars ($800,000.00) of which will consist of
permanent insurance on the life of Employee owned by Employee or
his designee.
(b) In the event of the termination of
Employee's employment either (i) by Employee for any reason, or
(ii) by Employer without "cause" (as defined in paragraph 2
herein), Employer agrees to keep in force the permanent life
insurance set forth in subparagraph (a) of this paragraph 5 for
the duration of Employee's life. Employer may fulfill this
obligation by satisfying the premium requirement so that such
permanent insurance is fully paid under the terms of such
permanent insurance policy. Employer's obligation to pay
permanent life insurance premiums under this subparagraph (b)
will survive the term of this Agreement.
(c) In the event of the termination of
Employee's employment by Employer for "cause" (as defined in
paragraph 2 herein), then Employer's obligation to pay premiums
under this paragraph 5 will cease.
(d) Employer agrees to reimburse Employee
for any tax due on the annual permanent insurance premium paid by
Employer.
(e) The amount of insurance described in
subparagraph (a) may be increased by the Board of Directors.
6. Termination. In the event of the termination
of Employee's employment by Employer, without "cause" (as defined
in paragraph 2 herein), then, in lieu of any further salary
payment pursuant to paragraph 4(a) herein, Employer agrees to pay
Employee for the remaining term of this Agreement at an annual
rate equal to the average of Employee's "compensation" for the
three fiscal years preceding the year of such termination. For
this purpose the term "compensation" means Employee's base
salary in effect for a particular year plus the incentive
compensation received by Employee with respect to services
rendered in such year whether or not such incentive compensation
is actually paid in such year. Amounts described above due
Employee under this paragraph 6 shall be due and payable for the
duration of the remaining term in equal monthly installments. In
addition to the foregoing, Employer shall continue, for the
duration of the remaining term, to provide Employee with such
additional fringe benefits to which Employee was entitled as of
the day immediately prior to the date of such termination.
7. Extent of Services. Employee shall devote
Employee's time, attention and energy to the business of
Employer, and shall not during the term of this Agreement, or any
extension hereof, without Employer's consent, be engaged in any
other business activity whether or not such business activity is
pursued for gain, profit or other pecuniary advantage; but
nothing contained herein shall be construed as preventing
Employee from investing his assets in such form or manner as will
not require any service on the part of Employee in the operation
of the affairs of the corporations or other entities in which
Employee may invest his assets.
8. Covenants of Employee.
(a) During the term of Employee's employment
with Employer, and for a period of one (1) year after the
termination of such employment, for whatever reason, except for
the termination of Employee's employment under circumstances
which constitute a violation by Employer of the provisions of
this Agreement, Employee covenants and agrees that Employee will
not (except as required in Employee's duties to Employer), in any
manner directly or indirectly:
(i) Disclose or divulge to any person,
entity, firm or company whatsoever, or use for Employee's own
benefit or the benefit of any other person, entity, firm or
company directly or indirectly, in competition with the business
of Employer, as the same may exist at the date of such cessation,
any proprietary business methods, customer lists, supplier lists,
business plans or other information or data of Employer, without
regard to whether all of the foregoing matters will otherwise be
deemed confidential, material or important, the parties hereto
stipulating that as between them, the same are important,
material and confidential and greatly affect the effective and
successful conduct of the business and the goodwill of Employer,
and that any breach of the terms of this subparagraph (i) shall
be a material breach of this Agreement;
(ii) Solicit, divert, take away or
interfere with any of the customers, trade, business, patronage,
employees or agents of Employer;
(iii) Engage, directly or indirectly,
either personally or as an employee, partner, associate, officer,
manager, agent, advisor, consultant or otherwise, or by means of
any corporate or other entity or device, in any business
competitive with the business of Employer.
(b) For purposes hereof, a business will be
deemed competitive if (i) such business involves the manufacture
and sale of steel, or any other business which is competitive,
during or as of the date of cessation of Employee's employment,
with any business then being conducted by Employer or as to which
Employer has at such time formulated definitive plans to enter;
and (ii) such business makes substantial sales of products
competitive with those of Employer in any of the States of
Missouri, Illinois, Indiana, Iowa, Michigan and Ohio.
(c) All of the covenants on behalf of
Employee contained in this paragraph 8 shall be construed as
agreements independent of any other provision of this Agreement,
and the existence of any claim or cause of action against
Employer, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Employer of
these covenants.
(d) It is the intention of the parties to
restrict the activities of Employee under this paragraph 8 only
to the extent necessary for the protection of legitimate business
interests of Employer, and the parties specifically covenant and
agree that should any of the clauses or provisions set forth
herein, under any set of circumstances not now foreseen by the
parties, be held by a court of competent jurisdiction to be
illegal, invalid or unenforceable under present or future laws
effective during the term of this Agreement, then and in that
event, it is the intention of the parties hereto that, in lieu of
each such clause or provision of this paragraph 8, there shall be
substituted or added, and there is hereby substituted or added,
terms to such illegal, invalid or unenforceable clause or
provision as may be legal, valid and enforceable.
9. Expenses. In addition to compensation paid to
Employee under paragraph 4 hereof, during the period of
Employee's employment, Employer will pay directly or reimburse
Employee for reasonable and necessary expenses incurred by
Employee in the interest of the business of Employer. All such
expenses paid by Employee will be reimbursed by Employer upon
presentation by Employee, from time to time, of an itemized
account of such expenditures, accompanied by appropriate receipts
or other evidence of payment to the extent necessary to permit
the deductibility thereof for Federal income tax purposes.
10. Documents. Employee agrees that all
documents, instruments, drawings, plans, contracts, proposals,
records, notebooks, invoices, statements and correspondence,
including all copies thereof, relating to the business of
Employer, other than purely personal documents, shall be the
property of Employer; and upon the cessation of Employee's
employment with Employer, for whatever reason, all of the same
then in Employee's possession, whether prepared by Employee or
others, will be left with or immediately delivered to Employer.
11. Remedies. It is agreed that any material
breach or evasion of any of the terms of this Agreement by
Employee will result in immediate and irreparable injury to
Employer and will authorize recourse to injunction and/or
specific performance as well as to all other legal or equitable
remedies to which Employer may be entitled. No remedy conferred
by any of the specific provisions of this Agreement is intended
to be exclusive of any other remedy, and each and every remedy
shall be cumulative and shall be in addition to every other
remedy whether given hereunder or not or whether hereafter
existing at law or in equity, by statute or otherwise. The
election of any one or more remedies by Employer or Employee
shall not constitute a waiver of the right to pursue other
available remedies at any time or cumulatively from time-to-time.
12. Severability. All agreements and covenants
herein contained are severable, and in the event any of them
shall be held to be invalid or unenforceable by any court of
competent jurisdiction, this Agreement shall continue in full
force and effect and, subject to paragraph 8(d) hereof, shall be
interpreted as if such invalid agreement or covenant were not
contained herein.
13. Waiver or Modification. No amendment, waiver
or modification of this Agreement or of any covenant, condition
or limitation herein contained shall be valid unless in writing
and duly executed by the party to be charged therewith, and no
evidence of any amendment, waiver or modification shall be
offered or received in evidence in any proceeding, arbitration or
litigation between the parties hereto arising out of or affecting
this Agreement, or the rights or obligations of the parties
hereunder, unless such amendment, waiver or modification is in
writing, duly executed as aforesaid, and the parties further
agree that the provisions of this paragraph may not be waived or
modified except as herein set forth. Failure of Employee or
Employer to exercise or otherwise act with respect to any rights
granted hereunder in the event of a breach of any of the terms or
conditions hereof by the other party, shall not be construed as a
waiver of such breach, nor prevent Employee or Employer from
thereafter enforcing strict compliance with any and all of the
terms and conditions hereof.
14. Fees and Expenses. If Employee is the
prevailing party, Employer shall pay all of Employee's reasonable
legal fees and related expenses (including the costs of experts,
evidence and counsel) incurred by Employee as a result of (i)
Employee's termination of employment (including all such fees and
expenses, if any, incurred in contesting or disputing any such
termination of employment) or (ii) Employee's seeking to obtain
or enforce any right or benefit provided by this Agreement or by
any other plan or arrangement maintained by Employer under which
Employee is or may be entitled to receive benefits.
15. Notices. All notices, requests, demands or
other communications hereunder ("Notice") shall be in writing and
shall be given by registered or certified mail, return receipt
requested:
if to Employer to:
Laclede Steel Company
Attn: Michael H. Lane
15th Floor
One Metropolitan Square
St. Louis, Missouri 63102
and, if to Employee, to:
John B. McKinney
19 Picardy
St. Louis, Missouri 63124
or to such other addresses as to which the parties hereto give
Notice in accordance with this paragraph 15.
16. Construction. This Agreement shall be
governed by and construed and interpreted according to the laws
of the State of Missouri, notwithstanding the place of execution
hereof, nor the performance of any acts in connection herewith or
hereunder in any other jurisdiction. For all purposes hereof,
reference to Employer shall include each and every subsidiary and
affiliated company of Employer.
17. Assignability. The services to be performed
by Employee hereunder are personal in nature and therefore
Employee shall not assign his rights or delegate his obligations
under this Agreement, and any attempted or purported assignment
or delegation not herein permitted shall be null and void.
18. Successors. Subject to the provisions of
paragraph 17, this Agreement shall be binding upon and shall
inure to the benefit of Employer and Employee and their
respective heirs, executors, administrators, legal
representatives, successors and assigns.
19. Prior Employment Agreements. Any prior
Employment Agreement between Employer and Employee is hereby
terminated by mutual agreement.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day and year first above
written.
______________________________
JOHN B. McKINNEY
"Employee"
LACLEDE STEEL COMPANY
By____________________________
Michael H. Lane,
Vice President,
Treasurer and Secretary
"Employer"
<PAGE>
RESTATED EMPLOYMENT
AGREEMENT
THIS RESTATED EMPLOYMENT AGREEMENT is made and
entered into as of the 30th day of July, 1996, by and between
LACLEDE STEEL COMPANY, a Delaware corporation ("Employer"), and
MICHAEL H. LANE ("Employee").
WHEREAS, Employee and Employer previously entered into
an employment agreement as of the 19th day of October, 1994 (the
"Original Employment Agreement"); and
WHEREAS, Employee and Employer desire to amend and
restate the Original Employment Agreement in its entirety,
pursuant to this Restated Employment Agreement; and
WHEREAS, Employee desires to be employed by
Employer and Employer desires to employ Employee under the terms
and conditions set forth in this Restated Employment Agreement;
and
WHEREAS, it is Employer's intention to employ
Employee upon the terms and conditions herein, which recognize
and compensate Employee for the obligations of Employee
undertaken hereunder, including specifically, but not by way of
limitation, the agreement of Employee not to compete with the
business of Employer, as provided in paragraph 8(a)(iii) (see
page 8), for the period provided in paragraph 8(a) upon the
termination of Employee's employment by Employer for any reason;
it being understood and agreed that Employee is employed by
Employer to protect and expand the business of Employer;
NOW, THEREFORE, in consideration of the foregoing
and the promises and agreements herein contained, the parties
agree as follows:
1. Employment. Employer hereby employs Employee,
and Employee hereby accepts such employment from Employer upon
the terms and conditions hereinafter set forth. This Restated
Employment Agreement supercedes the Original Employment
Agreement.
2. Term of Employment. The term of Employee's
employment under this Agreement shall be for the period
commencing July 30, 1996, and continuing through August 2, 1999
or upon the earlier occurrence of any of the following events:
(a) Whenever Employer and Employee shall
mutually agree in writing to terminate Employee's employment by
Employer;
(b) Upon the death of Employee;
(c) For "cause," which shall mean Employee's
dishonesty or unlawful acts committed in connection with the
business of Employer, and which results in substantial gain or
profit to Employee.
(d) At Employer's option and by action of
Employer's Board of Directors on thirty (30) days' written notice
in the event of Employee's Disability (defined as the failure
substantially to discharge Employee's duties as defined under
this Agreement for ninety (90) consecutive days or one hundred
twenty (120) days (whether or not consecutive) in any twelve (12)
month period, as a result of an injury, disease, sickness or
other physical or mental incapacity). A determination of
Employee's Disability shall be made by a qualified medical doctor
licensed to practice in the State of Missouri chosen by Employer
subject to Employee's approval, which approval shall not be
unreasonably withheld. Employee shall consent to be examined by
Employer's medical doctor and shall consent to allow Employee's
medical doctor to discuss Employee's medical condition with
Employer. Notwithstanding anything to the contrary contained
herein, Employee's Disability shall not be deemed to have
commenced until full coverage with respect to such Disability
shall have been approved by Employer's disability insurance
carrier and payment under Employer's group disability policy for
such Disability shall have commenced.
3. Duties of Employee. During Employee's
employment by Employer, Employee shall serve Employer to the best
of Employee's ability and shall perform such duties as are
typically performed by the Vice President/Finance and Chief
Financial Officer of Employer. Employee agrees to devote
Employee's time and efforts to the business of Employer (except
for usual vacations and reasonable time for attention to personal
affairs so long as Employee's performance hereunder is not
adversely affected thereby), and to be loyal and faithful at all
times, constantly endeavoring to improve Employee's ability and
knowledge of the business of Employer in an effort to increase
the value of Employee's services for the mutual benefit of
Employee and Employer.
4. Compensation.
(a) Employer agrees to pay Employee for
Employee's services during the term of Employee's employment
hereunder. Employee's base salary shall be the greater of (i) an
annual rate of Two Hundred Forty-Three Thousand Five Hundred
Dollars ($243,500.00) or (ii) the highest annual base salary
authorized by the Board of Directors after the date hereof.
Employee's base salary shall be due and payable in twelve (12)
equal monthly installments. Additionally, during the term of
Employee's employment by Employer hereunder, Employee's
compensation shall be reviewed and may be increased and/or
Employee may be paid additional or special compensation including
without limitation stock options, stock appreciation rights and
other incentive compensation, or bonuses (based on the earnings
of Employer, the performance of Employee or otherwise) from time
to time by the mutual agreement of Employee and Employer, as
determined by the Board of Directors of Employer. In addition,
during the term of this Agreement, Employee shall receive such
fringe benefits as are made available by Employer from time to
time to other employees of Employer at Employee's level of
employment.
(b) In the event of the termination of
Employee's employment either (i) by Employee for any reason
including death or Disability, or (ii) by Employer without
"cause" (as defined in paragraph 2 herein), Employee shall be
paid incentive compensation for the fiscal year in which such
termination occurred in an amount equal to the product of (a) the
amount of incentive compensation to which he would have been
entitled for such fiscal year had there been no termination of
employment and (b) a fraction, the numerator of which is the
number of days of such fiscal year in which Employee remained in
the employment of Employer and the denominator of which is 365.
5. Life Insurance Benefits.
(a) During the term of this Agreement,
Employer shall be obligated to keep in force life insurance on
the life of Employee in the amount of One Million Fourteen
Thousand Dollars ($1,014,000.00), Six Hundred Thousand Dollars
($600,000.00) of which will consist of permanent insurance on the
life of Employee owned by Employee or his designee.
(b) In the event of the termination of
Employee's employment either (i) by Employee for any reason, or
(ii) by Employer without "cause" (as defined in paragraph 2
herein), Employer agrees to keep in force the permanent life
insurance set forth in subparagraph (a) of this paragraph 5 for
the duration of Employee's life. Employer may fulfill this
obligation by satisfying the premium requirement so that such
permanent insurance is fully paid under the terms of such
permanent insurance policy. Employer's obligation to pay
permanent life insurance premiums under this subparagraph (b)
will survive the term of this Agreement.
(c) In the event of the termination of
Employee's employment by Employer for "cause" (as defined in
paragraph 2 herein), then Employer's obligation to pay premiums
under this paragraph 5 will cease.
(d) Employer agrees to reimburse Employee
for any tax due on the annual permanent insurance premium paid by
Employer.
(e) The amount of insurance described in
subparagraph (a) may be increased by the Board of Directors.
6. Termination. In the event of the termination
of Employee's employment by Employer, without "cause" (as defined
in paragraph 2 herein), then, in lieu of any further salary
payment pursuant to paragraph 4(a) herein, Employer agrees to pay
Employee for the remaining term of this Agreement at an annual
rate equal to the average of Employee's "compensation" for the
three fiscal years preceding the year of such termination. For
this purpose the term "compensation" means Employee's base salary
in effect for a particular year plus the incentive compensation
received by Employee with respect to services rendered in such
year whether or not such incentive compensation is actually paid
in such year. Amounts described above due Employee under this
paragraph 6 shall be due and payable for the duration of the
remaining term in equal monthly installments. In addition to the
foregoing, Employer shall continue, for the duration of the
remaining term, to provide Employee with such additional fringe
benefits to which Employee was entitled as of the day immediately
prior to the date of such termination.
7. Extent of Services. Employee shall devote
Employee's time, attention and energy to the business of
Employer, and shall not during the term of this Agreement, or any
extension hereof, without Employer's consent, be engaged in any
other business activity whether or not such business activity is
pursued for gain, profit or other pecuniary advantage; but
nothing contained herein shall be construed as preventing
Employee from investing his assets in such form or manner as will
not require any service on the part of Employee in the operation
of the affairs of the corporations or other entities in which
Employee may invest his assets.
8. Covenants of Employee.
(a) During the term of Employee's employment
with Employer, and for a period of one (1) year after the
termination of such employment, for whatever reason, except for
the termination of Employee's employment under circumstances
which constitute a violation by Employer of the provisions of
this Agreement, Employee covenants and agrees that Employee will
not (except as required in Employee's duties to Employer), in any
manner directly or indirectly:
(i) Disclose or divulge to any person,
entity, firm or company whatsoever, or use for Employee's own
benefit or the benefit of any other person, entity, firm or
company directly or indirectly, in competition with the business
of Employer, as the same may exist at the date of such cessation,
any proprietary business methods, customer lists, supplier lists,
business plans or other information or data of Employer, without
regard to whether all of the foregoing matters will otherwise be
deemed confidential, material or important, the parties hereto
stipulating that as between them, the same are important,
material and confidential and greatly affect the effective and
successful conduct of the business and the goodwill of Employer,
and that any breach of the terms of this subparagraph (i) shall
be a material breach of this Agreement;
(ii) Solicit, divert, take away or
interfere with any of the customers, trade, business, patronage,
employees or agents of Employer;
(iii) Engage, directly or indirectly,
either personally or as an employee, partner, associate, officer,
manager, agent, advisor, consultant or otherwise, or by means of
any corporate or other entity or device, in any business
competitive with the business of Employer.
(b) For purposes hereof, a business will be
deemed competitive if (i) such business involves the manufacture
and sale of steel, or any other business which is competitive,
during or as of the date of cessation of Employee's employment,
with any business then being conducted by Employer or as to which
Employer has at such time formulated definitive plans to enter;
and (ii) such business makes substantial sales of products
competitive with those of Employer in any of the States of
Missouri, Illinois, Indiana, Iowa, Michigan and Ohio.
(c) All of the covenants on behalf of
Employee contained in this paragraph 8 shall be construed as
agreements independent of any other provision of this Agreement,
and the existence of any claim or cause of action against
Employer, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Employer of
these covenants.
(d) It is the intention of the parties to
restrict the activities of Employee under this paragraph 8 only
to the extent necessary for the protection of legitimate business
interests of Employer, and the parties specifically covenant and
agree that should any of the clauses or provisions set forth
herein, under any set of circumstances not now foreseen by the
parties, be held by a court of competent jurisdiction to be
illegal, invalid or unenforceable under present or future laws
effective during the term of this Agreement, then and in that
event, it is the intention of the parties hereto that, in lieu of
each such clause or provision of this paragraph 8, there shall be
substituted or added, and there is hereby substituted or added,
terms to such illegal, invalid or unenforceable clause or
provision as may be legal, valid and enforceable.
9. Expenses. In addition to compensation paid to
Employee under paragraph 4 hereof, during the period of
Employee's employment, Employer will pay directly or reimburse
Employee for reasonable and necessary expenses incurred by
Employee in the interest of the business of Employer. All such
expenses paid by Employee will be reimbursed by Employer upon
presentation by Employee, from time to time, of an itemized
account of such expenditures, accompanied by appropriate receipts
or other evidence of payment to the extent necessary to permit
the deductibility thereof for Federal income tax purposes.
10. Documents. Employee agrees that all
documents, instruments, drawings, plans, contracts, proposals,
records, notebooks, invoices, statements and correspondence,
including all copies thereof, relating to the business of
Employer, other than purely personal documents, shall be the
property of Employer; and upon the cessation of Employee's
employment with Employer, for whatever reason, all of the same
then in Employee's possession, whether prepared by Employee or
others, will be left with or immediately delivered to Employer.
11. Remedies. It is agreed that any material
breach or evasion of any of the terms of this Agreement by
Employee will result in immediate and irreparable injury to
Employer and will authorize recourse to injunction and/or
specific performance as well as to all other legal or equitable
remedies to which Employer may be entitled. No remedy conferred
by any of the specific provisions of this Agreement is intended
to be exclusive of any other remedy, and each and every remedy
shall be cumulative and shall be in addition to every other
remedy whether given hereunder or not or whether hereafter
existing at law or in equity, by statute or otherwise. The
election of any one or more remedies by Employer or Employee
shall not constitute a waiver of the right to pursue other
available remedies at any time or cumulatively from time-to-time.
12. Severability. All agreements and covenants
herein contained are severable, and in the event any of them
shall be held to be invalid or unenforceable by any court of
competent jurisdiction, this Agreement shall continue in full
force and effect and, subject to paragraph 8(d) hereof, shall be
interpreted as if such invalid agreement or covenant were not
contained herein.
13. Waiver or Modification. No amendment, waiver
or modification of this Agreement or of any covenant, condition
or limitation herein contained shall be valid unless in writing
and duly executed by the party to be charged therewith, and no
evidence of any amendment, waiver or modification shall be
offered or received in evidence in any proceeding, arbitration or
litigation between the parties hereto arising out of or affecting
this Agreement, or the rights or obligations of the parties
hereunder, unless such amendment, waiver or modification is in
writing, duly executed as aforesaid, and the parties further
agree that the provisions of this paragraph may not be waived or
modified except as herein set forth. Failure of Employee or
Employer to exercise or otherwise act with respect to any rights
granted hereunder in the event of a breach of any of the terms or
conditions hereof by the other party, shall not be construed as a
waiver of such breach, nor prevent Employee or Employer from
thereafter enforcing strict compliance with any and all of the
terms and conditions hereof.
14. Fees and Expenses. If Employee is the
prevailing party, Employer shall pay all of Employee's reasonable
legal fees and related expenses (including the costs of experts,
evidence and counsel) incurred by Employee as a result of (i)
Employee's termination of employment (including all such fees and
expenses, if any, incurred in contesting or disputing any such
termination of employment) or (ii) Employee's seeking to obtain
or enforce any right or benefit provided by this Agreement or by
any other plan or arrangement maintained by Employer under which
Employee is or may be entitled to receive benefits.
15. Notices. All notices, requests, demands or
other communications hereunder ("Notice") shall be in writing and
shall be given by registered or certified mail, return receipt
requested:
if to Employer to:
Laclede Steel Company
Attn: John B. McKinney
15th Floor
One Metropolitan Square
St. Louis, Missouri 63102
and, if to Employee, to:
Michael H. Lane
3708 Sunset Chase Drive
Sunset Hills, Missouri 63127
or to such other addresses as to which the parties hereto give
Notice in accordance with this paragraph 15.
16. Construction. This Agreement shall be
governed by and construed and interpreted according to the laws
of the State of Missouri, notwithstanding the place of execution
hereof, nor the performance of any acts in connection herewith or
hereunder in any other jurisdiction. For all purposes hereof,
reference to Employer shall include each and every subsidiary and
affiliated company of Employer.
17. Assignability. The services to be performed
by Employee hereunder are personal in nature and therefore
Employee shall not assign his rights or delegate his obligations
under this Agreement, and any attempted or purported assignment
or delegation not herein permitted shall be null and void.
18. Successors. Subject to the provisions of
paragraph 17, this Agreement shall be binding upon and shall
inure to the benefit of Employer and Employee and their
respective heirs, executors, administrators, legal
representatives, successors and assigns.
19. Prior Employment Agreements. Any prior
Employment Agreement between Employer and Employee is hereby
terminated by mutual agreement.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day and year first above
written.
______________________________
MICHAEL H. LANE
"Employee"
LACLEDE STEEL COMPANY
By____________________________
John B. McKinney, President
"Employer"
<PAGE>
RESTATED EMPLOYMENT
AGREEMENT
THIS RESTATED EMPLOYMENT AGREEMENT is made and
entered into as of the 30th day of July, 1996, by and between
LACLEDE STEEL COMPANY, a Delaware corporation ("Employer"), and
JOSEPH W. HEBENSTREIT ("Employee").
WHEREAS, Employee and Employer previously entered into
an employment agreement as of the 19th day of October, 1994 (the
"Original Employment Agreement"); and
WHEREAS, Employee and Employer desire to amend and
restate the Original Employment Agreement in its entirety,
pursuant to this Restated Employment Agreement; and
WHEREAS, Employee desires to be employed by
Employer and Employer desires to employ Employee under the terms
and conditions set forth in this Restated Empployment Agreement;
and
WHEREAS, it is Employer's intention to employ
Employee upon the terms and conditions herein, which recognize
and compensate Employee for the obligations of Employee
undertaken hereunder, including specifically, but not by way of
limitation, the agreement of Employee not to compete with the
business of Employer, as provided in paragraph 8(a)(iii) (see
page 8), for the period provided in paragraph 8(a) upon the
termination of Employee's employment by Employer for any reason;
it being understood and agreed that Employee is employed by
Employer to protect and expand the business of Employer;
NOW, THEREFORE, in consideration of the foregoing
and the promises and agreements herein contained, the parties
agree as follows:
1. Employment. Employer hereby employs Employee,
and Employee hereby accepts such employment from Employer upon
the terms and conditions hereinafter set forth. This Restated
Employment Agreement supercedes the Original Employment
Agreement.
2. Term of Employment. The term of Employee's
employment under this Agreement shall be for the period
commencing July 30, 1996, and continuing through August 2, 1999,
or upon the earlier occurrence of any of the following events:
(a) Whenever Employer and Employee shall
mutually agree in writing to terminate Employee's employment by
Employer;
(b) Upon the death of Employee;
(c) For "cause," which shall mean Employee's
dishonesty or unlawful acts committed in connection with the
business of Employer, and which results in substantial gain or
profit to Employee.
(d) At Employer's option and by action of
Employer's Board of Directors on thirty (30) days' written notice
in the event of Employee's Disability (defined as the failure
substantially to discharge Employee's duties as defined under
this Agreement for ninety (90) consecutive days or one hundred
twenty (120) days (whether or not consecutive) in any twelve (12)
month period, as a result of an injury, disease, sickness or
other physical or mental incapacity). A determination of
Employee's Disability shall be made by a qualified medical doctor
licensed to practice in the State of Missouri chosen by Employer
subject to Employee's approval, which approval shall not be
unreasonably withheld. Employee shall consent to be examined by
Employer's medical doctor and shall consent to allow Employee's
medical doctor to discuss Employee's medical condition with
Employer. Notwithstanding anything to the contrary contained
herein, Employee's Disability shall not be deemed to have
commenced until full coverage with respect to such Disability
shall have been approved by Employer's disability insurance
carrier and payment under Employer's group disability policy for
such Disability shall have commenced.
3. Duties of Employee. During Employee's
employment by Employer, Employee shall serve Employer to the best
of Employee's ability and shall perform such duties as are
typically performed by the Employer's executive officer with
principal responsibility of managing the Employer's manufacturing
operations. Employee agrees to devote Employee's time and
efforts to the business of Employer (except for usual vacations
and reasonable time for attention to personal affairs so long as
Employee's performance hereunder is not adversely affected
thereby), and to be loyal and faithful at all times, constantly
endeavoring to improve Employee's ability and knowledge of the
business of Employer in an effort to increase the value of
Employee's services for the mutual benefit of Employee and
Employer.
4. Compensation.
(a) Employer agrees to pay Employee for
Employee's services during the term of Employee's employment
hereunder. Employee's base salary shall be the greater of (i) an
annual rate of Two Hundred Forty-Three Thousand Five Hundred
Dollars ($243,500.00) or (ii) the highest annual base salary
authorized by the Board of Directors after the date hereof.
Employee's base salary shall be due and payable in twelve (12)
equal monthly installments. Additionally, during the term of
Employee's employment by Employer hereunder, Employee's
compensation shall be reviewed and may be increased and/or
Employee may be paid additional or special compensation including
without limitation stock options, stock appreciation rights and
other incentive compensation, or bonuses (based on the earnings
of Employer, the performance of Employee or otherwise) from time
to time by the mutual agreement of Employee and Employer, as
determined by the Board of Directors of Employer. In addition,
during the term of this Agreement, Employee shall receive such
fringe benefits as are made available by Employer from time to
time to other employees of Employer at Employee's level of
employment.
(b) In the event of the termination of
Employee's employment either (i) by Employee for any reason
including death or Disability, or (ii) by Employer without
"cause" (as defined in paragraph 2 herein), Employee shall be
paid incentive compensation for the fiscal year in which such
termination occurred in an amount equal to the product of (a) the
amount of incentive compensation to which he would have been
entitled for such fiscal year had there been no termination of
employment and (b) a fraction, the numerator of which is the
number of days of such fiscal year in which Employee remained in
the employment of Employer and the denominator of which is 365.
5. Life Insurance Benefits.
(a) During the term of this Agreement,
Employer shall be obligated to keep in force life insurance on
the life of Employee in the amount of One Million Fourteen
Thousand Dollars ($1,014,000.00), Six Hundred Thousand Dollars
($600,000.00) of which will consist of permanent insurance on the
life of Employee owned by Employee or his designee.
(b) In the event of the termination of
Employee's employment either (i) by Employee for any reason, or
(ii) by Employer without "cause" (as defined in paragraph 2
herein), Employer agrees to keep in force the permanent life
insurance set forth in subparagraph (a) of this paragraph 5 for
the duration of Employee's life. Employer may fulfill this
obligation by satisfying the premium requirement so that such
permanent insurance is fully paid under the terms of such
permanent insurance policy. Employer's obligation to pay
permanent life insurance premiums under this subparagraph (b)
will survive the term of this Agreement.
(c) In the event of the termination of
Employee's employment by Employer for "cause" (as defined in
paragraph 2 herein), then Employer's obligation to pay premiums
under this paragraph 5 will cease.
(d) Employer agrees to reimburse Employee
for any tax due on the annual permanent insurance premium paid by
Employer.
(e) The amount of insurance described in
subparagraph (a) may be increased by the Board of Directors.
6. Termination. In the event of the termination
of Employee's employment by Employer, without "cause" (as defined
in paragraph 2 herein), then, in lieu of any further salary
payment pursuant to paragraph 4(a) herein, Employer agrees to pay
Employee for the remaining term of this Agreement at an annual
rate equal to the average of Employee's "compensation" for the
three fiscal years preceding the year of such termination. For
this purpose the term "compensation" means Employee's base salary
in effect for a particular year plus the incentive compensation
received by Employee with respect to services rendered in such
year whether or not such incentive compensation is actually paid
in such year. Amounts described above due Employee under this
paragraph 6 shall be due and payable for the duration of the
remaining term in equal monthly installments. In addition to the
foregoing, Employer shall continue, for the duration of the
remaining term, to provide Employee with such additional fringe
benefits to which Employee was entitled as of the day immediately
prior to the date of such termination.
7. Extent of Services. Employee shall devote
Employee's time, attention and energy to the business of
Employer, and shall not during the term of this Agreement, or any
extension hereof, without Employer's consent, be engaged in any
other business activity whether or not such business activity is
pursued for gain, profit or other pecuniary advantage; but
nothing contained herein shall be construed as preventing
Employee from investing his assets in such form or manner as will
not require any service on the part of Employee in the operation
of the affairs of the corporations or other entities in which
Employee may invest his assets.
8. Covenants of Employee.
(a) During the term of Employee's employment
with Employer, and for a period of one (1) year after the
termination of such employment, for whatever reason, except for
the termination of Employee's employment under circumstances
which constitute a violation by Employer of the provisions of
this Agreement, Employee covenants and agrees that Employee will
not (except as required in Employee's duties to Employer), in any
manner directly or indirectly:
(i) Disclose or divulge to any person,
entity, firm or company whatsoever, or use for Employee's own
benefit or the benefit of any other person, entity, firm or
company directly or indirectly, in competition with the business
of Employer, as the same may exist at the date of such cessation,
any proprietary business methods, customer lists, supplier lists,
business plans or other information or data of Employer, without
regard to whether all of the foregoing matters will otherwise be
deemed confidential, material or important, the parties hereto
stipulating that as between them, the same are important,
material and confidential and greatly affect the effective and
successful conduct of the business and the goodwill of Employer,
and that any breach of the terms of this subparagraph (i) shall
be a material breach of this Agreement;
(ii) Solicit, divert, take away or
interfere with any of the customers, trade, business, patronage,
employees or agents of Employer;
(iii) Engage, directly or indirectly,
either personally or as an employee, partner, associate, officer,
manager, agent, advisor, consultant or otherwise, or by means of
any corporate or other entity or device, in any business
competitive with the business of Employer.
(b) For purposes hereof, a business will be
deemed competitive if (i) such business involves the manufacture
and sale of steel, or any other business which is competitive,
during or as of the date of cessation of Employee's employment,
with any business then being conducted by Employer or as to which
Employer has at such time formulated definitive plans to enter;
and (ii) such business makes substantial sales of products
competitive with those of Employer in any of the States of
Missouri, Illinois, Indiana, Iowa, Michigan and Ohio.
(c) All of the covenants on behalf of
Employee contained in this paragraph 8 shall be construed as
agreements independent of any other provision of this Agreement,
and the existence of any claim or cause of action against
Employer, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Employer of
these covenants.
(d) It is the intention of the parties to
restrict the activities of Employee under this paragraph 8 only
to the extent necessary for the protection of legitimate business
interests of Employer, and the parties specifically covenant and
agree that should any of the clauses or provisions set forth
herein, under any set of circumstances not now foreseen by the
parties, be held by a court of competent jurisdiction to be
illegal, invalid or unenforceable under present or future laws
effective during the term of this Agreement, then and in that
event, it is the intention of the parties hereto that, in lieu of
each such clause or provision of this paragraph 8, there shall be
substituted or added, and there is hereby substituted or added,
terms to such illegal, invalid or unenforceable clause or
provision as may be legal, valid and enforceable.
9. Expenses. In addition to compensation paid to
Employee under paragraph 4 hereof, during the period of
Employee's employment, Employer will pay directly or reimburse
Employee for reasonable and necessary expenses incurred by
Employee in the interest of the business of Employer. All such
expenses paid by Employee will be reimbursed by Employer upon
presentation by Employee, from time to time, of an itemized
account of such expenditures, accompanied by appropriate receipts
or other evidence of payment to the extent necessary to permit
the deductibility thereof for Federal income tax purposes.
10. Documents. Employee agrees that all
documents, instruments, drawings, plans, contracts, proposals,
records, notebooks, invoices, statements and correspondence,
including all copies thereof, relating to the business of
Employer, other than purely personal documents, shall be the
property of Employer; and upon the cessation of Employee's
employment with Employer, for whatever reason, all of the same
then in Employee's possession, whether prepared by Employee or
others, will be left with or immediately delivered to Employer.
11. Remedies. It is agreed that any material
breach or evasion of any of the terms of this Agreement by
Employee will result in immediate and irreparable injury to
Employer and will authorize recourse to injunction and/or
specific performance as well as to all other legal or equitable
remedies to which Employer may be entitled. No remedy conferred
by any of the specific provisions of this Agreement is intended
to be exclusive of any other remedy, and each and every remedy
shall be cumulative and shall be in addition to every other
remedy whether given hereunder or not or whether hereafter
existing at law or in equity, by statute or otherwise. The
election of any one or more remedies by Employer or Employee
shall not constitute a waiver of the right to pursue other
available remedies at any time or cumulatively from time-to-time.
12. Severability. All agreements and covenants
herein contained are severable, and in the event any of them
shall be held to be invalid or unenforceable by any court of
competent jurisdiction, this Agreement shall continue in full
force and effect and, subject to paragraph 8(d) hereof, shall be
interpreted as if such invalid agreement or covenant were not
contained herein.
13. Waiver or Modification. No amendment, waiver
or modification of this Agreement or of any covenant, condition
or limitation herein contained shall be valid unless in writing
and duly executed by the party to be charged therewith, and no
evidence of any amendment, waiver or modification shall be
offered or received in evidence in any proceeding, arbitration or
litigation between the parties hereto arising out of or affecting
this Agreement, or the rights or obligations of the parties
hereunder, unless such amendment, waiver or modification is in
writing, duly executed as aforesaid, and the parties further
agree that the provisions of this paragraph may not be waived or
modified except as herein set forth. Failure of Employee or
Employer to exercise or otherwise act with respect to any rights
granted hereunder in the event of a breach of any of the terms or
conditions hereof by the other party, shall not be construed as a
waiver of such breach, nor prevent Employee or Employer from
thereafter enforcing strict compliance with any and all of the
terms and conditions hereof.
14. Fees and Expenses. If Employee is the
prevailing party, Employer shall pay all of Employee's reasonable
legal fees and related expenses (including the costs of experts,
evidence and counsel) incurred by Employee as a result of (i)
Employee's termination of employment (including all such fees and
expenses, if any, incurred in contesting or disputing any such
termination of employment) or (ii) Employee's seeking to obtain
or enforce any right or benefit provided by this Agreement or by
any other plan or arrangement maintained by Employer under which
Employee is or may be entitled to receive benefits.
15. Notices. All notices, requests, demands or
other communications hereunder ("Notice") shall be in writing and
shall be given by registered or certified mail, return receipt
requested:
if to Employer to:
Laclede Steel Company
Attn: John B. McKinney
15th Floor
One Metropolitan Square
St. Louis, Missouri 63102
and, if to Employee, to:
Joseph W. Hebenstreit
10 Hunter's Point
O'Fallon, Illinois 62269-0452
or to such other addresses as to which the parties hereto give
Notice in accordance with this paragraph 15.
16. Construction. This Agreement shall be
governed by and construed and interpreted according to the laws
of the State of Missouri, notwithstanding the place of execution
hereof, nor the performance of any acts in connection herewith or
hereunder in any other jurisdiction. For all purposes hereof,
reference to Employer shall include each and every subsidiary and
affiliated company of Employer.
17. Assignability. The services to be performed
by Employee hereunder are personal in nature and therefore
Employee shall not assign his rights or delegate his obligations
under this Agreement, and any attempted or purported assignment
or delegation not herein permitted shall be null and void.
18. Successors. Subject to the provisions of
paragraph 17, this Agreement shall be binding upon and shall
inure to the benefit of Employer and Employee and their
respective heirs, executors, administrators, legal
representatives, successors and assigns.
19. Prior Employment Agreements. Any prior
Employment Agreement between Employer and Employee is hereby
terminated by mutual agreement.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day and year first above
written.
______________________________
JOSEPH W. HEBENSTREIT
"Employee"
LACLEDE STEEL COMPANY
By____________________________
John B. McKinney, President
"Employer"
RESTATED EMPLOYMENT
AGREEMENT
THIS RESTATED EMPLOYMENT AGREEMENT is made and
entered into as of the 30th day of July, 1996, by and between
LACLEDE STEEL COMPANY, a Delaware corporation ("Employer"), and
LARRY J. SCHNURBUSCH ("Employee").
WHEREAS, Employee and Employer previously entered into
an employment agreement as of the 19th day of October, 1994 (the
"Original Employment Agreement"); and
WHEREAS, Employee and Employer desire to amend and
restate the Original Employment Agreement in its entirety,
pursuant to this Restated Employment Agreement; and
WHEREAS, Employee desires to be employed by
Employer and Employer desires to employ Employee under the terms
and conditions set forth in this Agreement; and
WHEREAS, it is Employer's intention to employ
Employee upon the terms and conditions herein, which recognize
and compensate Employee for the obligations of Employee
undertaken hereunder, including specifically, but not by way of
limitation, the agreement of Employee not to compete with the
business of Employer, as provided in paragraph 8(a)(iii) (see
page 8), for the period provided in paragraph 8(a) upon the
termination of Employee's employment by Employer for any reason;
it being understood and agreed that Employee is employed by
Employer to protect and expand the business of Employer;
NOW, THEREFORE, in consideration of the foregoing
and the promises and agreements herein contained, the parties
agree as follows:
1. Employment. Employer hereby employs Employee,
and Employee hereby accepts such employment from Employer upon
the terms and conditions hereinafter set forth. This Restated
Employment Agreement supercedes the Original Employment
Agreement.
2. Term of Employment. The term of Employee's
employment under this Agreement shall be for the period
commencing July 30, 1996, and continuing through August 2, 1999,
or upon the earlier occurrence of any of the following events:
(a) Whenever Employer and Employee shall
mutually agree in writing to terminate Employee's employment by
Employer;
(b) Upon the death of Employee;
(c) For "cause," which shall mean Employee's
dishonesty or unlawful acts committed in connection with the
business of Employer, and which results in substantial gain or
profit to Employee.
(d) At Employer's option and by action of
Employer's Board of Directors on thirty (30) days' written notice
in the event of Employee's Disability (defined as the failure
substantially to discharge Employee's duties as defined under
this Agreement for ninety (90) consecutive days or one hundred
twenty (120) days (whether or not consecutive) in any twelve (12)
month period, as a result of an injury, disease, sickness or
other physical or mental incapacity). A determination of
Employee's Disability shall be made by a qualified medical doctor
licensed to practice in the State of Missouri chosen by Employer
subject to Employee's approval, which approval shall not be
unreasonably withheld. Employee shall consent to be examined by
Employer's medical doctor and shall consent to allow Employee's
medical doctor to discuss Employee's medical condition with
Employer. Notwithstanding anything to the contrary contained
herein, Employee's Disability shall not be deemed to have
commenced until full coverage with respect to such Disability
shall have been approved by Employer's disability insurance
carrier and payment under Employer's group disability policy for
such Disability shall have commenced.
3. Duties of Employee. During Employee's
employment by Employer, Employee shall serve Employer to the best
of Employee's ability and shall perform such duties as are
typically performed by Employer's employee responsible for its
engineering, purchasing and energy policies. Employee agrees to
devote Employee's time and efforts to the business of Employer
(except for usual vacations and reasonable time for attention to
personal affairs so long as Employee's performance hereunder is
not adversely affected thereby), and to be loyal and faithful at
all times, constantly endeavoring to improve Employee's ability
and knowledge of the business of Employer in an effort to
increase the value of Employee's services for the mutual benefit
of Employee and Employer.
4. Compensation.
(a) Employer agrees to pay Employee for
Employee's services during the term of Employee's employment
hereunder. Employee's base salary shall be the greater of (i) an
annual rate of One Hundred Seventy-Eight Thousand Dollars
($178,000.00) or (ii) the highest annual base salary authorized
by Employer for Employee after the date hereof. Employee's base
salary shall be due and payable in twelve (12) equal monthly
installments. Additionally, during the term of Employee's
employment by Employer hereunder, Employee's compensation shall
be reviewed and may be increased and/or Employee may be paid
additional or special compensation including without limitation
stock options, stock appreciation rights and other incentive
compensation, or bonuses (based on the earnings of Employer, the
performance of Employee or otherwise) from time to time by the
mutual agreement of Employee and Employer, as determined by
Employer. In addition, during the term of this Agreement,
Employee shall receive such fringe benefits as are made available
by Employer from time to time to other employees of Employer at
Employee's level of employment.
(b) In the event of the termination of
Employee's employment either (i) by Employee for any reason
including death or Disability, or (ii) by Employer without
"cause" (as defined in paragraph 2 herein), Employee shall be
paid incentive compensation for the fiscal year in which such
termination occurred in an amount equal to the product of (a) the
amount of incentive compensation to which he would have been
entitled for such fiscal year had there been no termination of
employment and (b) a fraction, the numerator of which is the
number of days of such fiscal year in which Employee remained in
the employment of Employer and the denominator of which is 365.
5. Life Insurance Benefits.
(a) During the term of this Agreement,
Employer shall be obligated to keep in force life insurance on
the life of Employee in the amount of Six Hundred Twenty-Two
Thousand Dollars ($622,000.00), Three Hundred Thousand Dollars
($300,000.00) of which will consist of permanent insurance on the
life of Employee owned by Employee or his designee.
(b) In the event of the termination of
Employee's employment either (i) by Employee for any reason, or
(ii) by Employer without "cause" (as defined in paragraph 2
herein), Employer agrees to keep in force the permanent life
insurance set forth in subparagraph (a) of this paragraph 5 for
the duration of Employee's life. Employer may fulfill this
obligation by satisfying the premium requirement so that such
permanent insurance is fully paid under the terms of such
permanent insurance policy. Employer's obligation to pay
permanent life insurance premiums under this subparagraph (b)
will survive the term of this Agreement.
(c) In the event of the termination of
Employee's employment by Employer for "cause" (as defined in
paragraph 2 herein), then Employer's obligation to pay premiums
under this paragraph 5 will cease.
(d) Employer agrees to reimburse Employee
for any tax due on the annual permanent insurance premium paid by
Employer.
(e) The amount of insurance described in
subparagraph (a) may be increased by the Board of Directors.
6. Termination. In the event of the termination
of Employee's employment by Employer, without "cause" (as defined
in paragraph 2 herein), then, in lieu of any further salary
payment pursuant to paragraph 4(a) herein, Employer agrees to pay
Employee for the remaining term of this Agreement at an annual
rate equal to the average of Employee's "compensation" for the
three fiscal years preceding the year of such termination. For
this purpose the term "compensation" means Employee's base salary
in effect for a particular year plus the incentive compensation
received by the Employee with respect to services rendered in
such year whether or not such incentive compensation is actually
paid in such year. Amounts described above due Employee under
this paragraph 6 shall be due and payable for the duration of the
remaining term in equal monthly installments. In addition to the
foregoing, Employer shall continue, for the duration of the
remaining term, to provide Employee with such additional fringe
benefits to which Employee was entitled as of the day immediately
prior to the date of such termination.
7. Extent of Services. Employee shall devote
Employee's time, attention and energy to the business of
Employer, and shall not during the term of this Agreement, or any
extension hereof, without Employer's consent, be engaged in any
other business activity whether or not such business activity is
pursued for gain, profit or other pecuniary advantage; but
nothing contained herein shall be construed as preventing
Employee from investing his assets in such form or manner as will
not require any service on the part of Employee in the operation
of the affairs of the corporations or other entities in which
Employee may invest his assets.
8. Covenants of Employee.
(a) During the term of Employee's employment
with Employer, and for a period of one (1) year after the
termination of such employment, for whatever reason, except for
the termination of Employee's employment under circumstances
which constitute a violation by Employer of the provisions of
this Agreement, Employee covenants and agrees that Employee will
not (except as required in Employee's duties to Employer), in any
manner directly or indirectly:
(i) Disclose or divulge to any person,
entity, firm or company whatsoever, or use for Employee's own
benefit or the benefit of any other person, entity, firm or
company directly or indirectly, in competition with the business
of Employer, as the same may exist at the date of such cessation,
any proprietary business methods, customer lists, supplier lists,
business plans or other information or data of Employer, without
regard to whether all of the foregoing matters will otherwise be
deemed confidential, material or important, the parties hereto
stipulating that as between them, the same are important,
material and confidential and greatly affect the effective and
successful conduct of the business and the goodwill of Employer,
and that any breach of the terms of this subparagraph (i) shall
be a material breach of this Agreement;
(ii) Solicit, divert, take away or
interfere with any of the customers, trade, business, patronage,
employees or agents of Employer;
(iii) Engage, directly or indirectly,
either personally or as an employee, partner, associate, officer,
manager, agent, advisor, consultant or otherwise, or by means of
any corporate or other entity or device, in any business
competitive with the business of Employer.
(b) For purposes hereof, a business will be
deemed competitive if (i) such business involves the manufacture
and sale of steel, or any other business which is competitive,
during or as of the date of cessation of Employee's employment,
with any business then being conducted by Employer or as to which
Employer has at such time formulated definitive plans to enter;
and (ii) such business makes substantial sales of products
competitive with those of Employer in any of the States of
Missouri, Illinois, Indiana, Iowa, Michigan and Ohio.
(c) All of the covenants on behalf of
Employee contained in this paragraph 8 shall be construed as
agreements independent of any other provision of this Agreement,
and the existence of any claim or cause of action against
Employer, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Employer of
these covenants.
(d) It is the intention of the parties to
restrict the activities of Employee under this paragraph 8 only
to the extent necessary for the protection of legitimate business
interests of Employer, and the parties specifically covenant and
agree that should any of the clauses or provisions set forth
herein, under any set of circumstances not now foreseen by the
parties, be held by a court of competent jurisdiction to be
illegal, invalid or unenforceable under present or future laws
effective during the term of this Agreement, then and in that
event, it is the intention of the parties hereto that, in lieu of
each such clause or provision of this paragraph 8, there shall be
substituted or added, and there is hereby substituted or added,
terms to such illegal, invalid or unenforceable clause or
provision as may be legal, valid and enforceable.
9 Expenses. In addition to compensation paid to
Employee under paragraph 4 hereof, during the period of
Employee's employment, Employer will pay directly or reimburse
Employee for reasonable and necessary expenses incurred by
Employee in the interest of the business of Employer. All such
expenses paid by Employee will be reimbursed by Employer upon
presentation by Employee, from time to time, of an itemized
account of such expenditures, accompanied by appropriate receipts
or other evidence of payment to the extent necessary to permit
the deductibility thereof for Federal income tax purposes.
10. Documents. Employee agrees that all
documents, instruments, drawings, plans, contracts, proposals,
records, notebooks, invoices, statements and correspondence,
including all copies thereof, relating to the business of
Employer, other than purely personal documents, shall be the
property of Employer; and upon the cessation of Employee's
employment with Employer, for whatever reason, all of the same
then in Employee's possession, whether prepared by Employee or
others, will be left with or immediately delivered to Employer.
11. Remedies. It is agreed that any material
breach or evasion of any of the terms of this Agreement by
Employee will result in immediate and irreparable injury to
Employer and will authorize recourse to injunction and/or
specific performance as well as to all other legal or equitable
remedies to which Employer may be entitled. No remedy conferred
by any of the specific provisions of this Agreement is intended
to be exclusive of any other remedy, and each and every remedy
shall be cumulative and shall be in addition to every other
remedy whether given hereunder or not or whether hereafter
existing at law or in equity, by statute or otherwise. The
election of any one or more remedies by Employer or Employee
shall not constitute a waiver of the right to pursue other
available remedies at any time or cumulatively from time-to-time.
12. Severability. All agreements and covenants
herein contained are severable, and in the event any of them
shall be held to be invalid or unenforceable by any court of
competent jurisdiction, this Agreement shall continue in full
force and effect and, subject to paragraph 8(d) hereof, shall be
interpreted as if such invalid agreement or covenant were not
contained herein.
13 Waiver or Modification. No amendment, waiver
or modification of this Agreement or of any covenant, condition
or limitation herein contained shall be valid unless in writing
and duly executed by the party to be charged therewith, and no
evidence of any amendment, waiver or modification shall be
offered or received in evidence in any proceeding, arbitration or
litigation between the parties hereto arising out of or affecting
this Agreement, or the rights or obligations of the parties
hereunder, unless such amendment, waiver or modification is in
writing, duly executed as aforesaid, and the parties further
agree that the provisions of this paragraph may not be waived or
modified except as herein set forth. Failure of Employee or
Employer to exercise or otherwise act with respect to any rights
granted hereunder in the event of a breach of any of the terms or
conditions hereof by the other party, shall not be construed as a
waiver of such breach, nor prevent Employee or Employer from
thereafter enforcing strict compliance with any and all of the
terms and conditions hereof.
14. Fees and Expenses. If Employee is the
prevailing party, Employer shall pay all of Employee's reasonable
legal fees and related expenses (including the costs of experts,
evidence and counsel) incurred by Employee as a result of (i)
Employee's termination of employment (including all such fees and
expenses, if any, incurred in contesting or disputing any such
termination of employment) or (ii) Employee's seeking to obtain
or enforce any right or benefit provided by this Agreement or by
any other plan or arrangement maintained by Employer under which
Employee is or may be entitled to receive benefits.
15. Notices. All notices, requests, demands or
other communications hereunder ("Notice") shall be in writing and
shall be given by registered or certified mail, return receipt
requested:
if to Employer to:
Laclede Steel Company
Attn: John B. McKinney
15th Floor
One Metropolitan Square
St. Louis, Missouri 63102
and, if to Employee, to:
Larry J. Schnurbusch
12248 Winrock
St. Louis, Missouri 63141
or to such other addresses as to which the parties hereto give
Notice in accordance with this paragraph 15.
16. Construction. This Agreement shall be
governed by and construed and interpreted according to the laws
of the State of Missouri, notwithstanding the place of execution
hereof, nor the performance of any acts in connection herewith or
hereunder in any other jurisdiction. For all purposes hereof,
reference to Employer shall include each and every subsidiary and
affiliated company of Employer.
17. Assignability. The services to be performed
by Employee hereunder are personal in nature and therefore
Employee shall not assign his rights or delegate his obligations
under this Agreement, and any attempted or purported assignment
or delegation not herein permitted shall be null and void.
18. Successors. Subject to the provisions of
paragraph 17, this Agreement shall be binding upon and shall
inure to the benefit of Employer and Employee and their
respective heirs, executors, administrators, legal
representatives, successors and assigns.
19. Prior Employment Agreements. Any prior
Employment Agreement between Employer and Employee is hereby
terminated by mutual agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day and year first above
written.
______________________________
LARRY J. SCHNURBUSCH
"Employee"
LACLEDE STEEL COMPANY
By____________________________
John B. McKinney, President
"Employer"
<PAGE>
RESTATED EMPLOYMENT
AGREEMENT
THIS restated EMPLOYMENT AGREEMENT is made and
entered into as of the 30th day of July, 1996, by and between
LACLEDE STEEL COMPANY, a Delaware corporation ("Employer"), and
H. BRUCE NETHINGTON ("Employee").
WHEREAS, Employee and Employer previously entered into
an employment agreement as of the 19th day of October, 1994 (the
"Original Employment Agreement"); and
WHEREAS, Employee and Employer desire to amend and
restate the Original Employment Agreement in its entirety,
pursuant to this Restated Employment Agreement; and
WHEREAS, Employee desires to be employed by
Employer and Employer desires to employ Employee under the terms
and conditions set forth in this Agreement; and
WHEREAS, it is Employer's intention to employ
Employee upon the terms and conditions herein, which recognize
and compensate Employee for the obligations of Employee
undertaken hereunder, including specifically, but not by way of
limitation, the agreement of Employee not to compete with the
business of Employer, as provided in paragraph 8(a)(iii) (see
page 8), for the period provided in paragraph 8(a) upon the
termination of Employee's employment by Employer for any reason;
it being understood and agreed that Employee is employed by
Employer to protect and expand the business of Employer;
NOW, THEREFORE, in consideration of the foregoing
and the promises and agreements herein contained, the parties
agree as follows:
1. Employment. Employer hereby employs Employee,
and Employee hereby accepts such employment from Employer upon
the terms and conditions hereinafter set forth. This Restated
Employment Agreement supercedes the Original Employment
Agreement.
2. Term of Employment. The term of Employee's
employment under this Agreement shall be for the period
commencing July 30, 1996, and continuing through August 2, 1999,
or upon the earlier occurrence of any of the following events:
(a) Whenever Employer and Employee shall
mutually agree in writing to terminate Employee's employment by
Employer;
(b) Upon the death of Employee;
(c) For "cause," which shall mean Employee's
dishonesty or unlawful acts committed in connection with the
business of Employer, and which results in substantial gain or
profit to Employee.
(d) At Employer's option and by action of
Employer's Board of Directors on thirty (30) days' written notice
in the event of Employee's Disability (defined as the failure
substantially to discharge Employee's duties as defined under
this Agreement for ninety (90) consecutive days or one hundred
twenty (120) days (whether or not consecutive) in any twelve (12)
month period, as a result of an injury, disease, sickness or
other physical or mental incapacity). A determination of
Employee's Disability shall be made by a qualified medical doctor
licensed to practice in the State of Missouri chosen by Employer
subject to Employee's approval, which approval shall not be
unreasonably withheld. Employee shall consent to be examined by
Employer's medical doctor and shall consent to allow Employee's
medical doctor to discuss Employee's medical condition with
Employer. Notwithstanding anything to the contrary contained
herein, Employee's Disability shall not be deemed to have
commenced until full coverage with respect to such Disability
shall have been approved by Employer's disability insurance
carrier and payment under Employer's group disability policy for
such Disability shall have commenced.
3. Duties of Employee. During Employee's
employment by Employer, Employee shall serve Employer to the best
of Employee's ability and shall perform such duties as are
typically performed by Employer's employee responsible for Human
Resources, Collective Bargaining and Labor Relations. Employee
agrees to devote Employee's time and efforts to the business of
Employer (except for usual vacations and reasonable time for
attention to personal affairs so long as Employee's performance
hereunder is not adversely affected thereby), and to be loyal and
faithful at all times, constantly endeavoring to improve
Employee's ability and knowledge of the business of Employer in
an effort to increase the value of Employee's services for the
mutual benefit of Employee and Employer.
4. Compensation.
(a) Employer agrees to pay Employee for
Employee's services during the term of Employee's employment
hereunder. Employee's base salary shall be the greater of (i) an
annual rate of One Hundred Sixty-Seven Thousand Five Hundred
Dollars ($167,500.00) (ii) the highest annual base salary
authorized by Employer for Employee after the date hereof.
Employee's base salary shall be due and payable in twelve (12)
equal monthly installments. Additionally, during the term of
Employee's employment by Employer hereunder, Employee's
compensation shall be reviewed and may be increased and/or
Employee may be paid additional or special compensation including
without limitation stock options, stock appreciation rights and
other incentive compensation, or bonuses (based on the earnings
of Employer, the performance of Employee or otherwise) from time
to time by the mutual agreement of Employee and Employer, as
determined by Employer. In addition, during the term of this
Agreement, Employee shall receive such fringe benefits as are
made available by Employer from time to time to other employees
of Employer at Employee's level of employment.
(b) In the event of the termination of
Employee's employment either (i) by Employee for any reason
including death or Disability, or (ii) by Employer without
"cause" (as defined in paragraph 2 herein), Employee shall be
paid incentive compensation for the fiscal year in which such
termination occurred in an amount equal to the product of (a) the
amount of incentive compensation to which he would have been
entitled for such fiscal year had there been no termination of
employment and (b) a fraction, the numerator of which is the
number of days of such fiscal year in which Employee remained in
the employment of Employer and the denominator of which is 365.
5. Life Insurance Benefits.
(a) During the term of this Agreement,
Employer shall be obligated to keep in force life insurance on
the life of Employee in the amount of Three Hundred Ninety-Five
Thousand Dollars ($395,000.00), Three Hundred Thousand Dollars
($300,000.00) of which will consist of permanent insurance on the
life of Employee owned by Employee or his designee.
(b) In the event of the termination of
Employee's employment either (i) by Employee for any reason, or
(ii) by Employer without "cause" (as defined in paragraph 2
herein), Employer agrees to keep in force the permanent life
insurance set forth in subparagraph (a) of this paragraph 5 for
the duration of Employee's life. Employer may fulfill this
obligation by satisfying the premium requirement so that such
permanent insurance is fully paid under the terms of such
permanent insurance policy. Employer's obligation to pay
permanent life insurance premiums under this subparagraph (b)
will survive the term of this Agreement.
(c) In the event of the termination of
Employee's employment by Employer for "cause" (as defined in
paragraph 2 herein), then Employer's obligation to pay premiums
under this paragraph 5 will cease.
(d) Employer agrees to reimburse Employee
for any tax due on the annual permanent insurance premium paid by
Employer.
(e) The amount of insurance described in
subparagraph (a) may be increased by the Board of Directors.
6. Termination. In the event of the termination of
Employee's employment by Employer without "cause" (as defined in
paragraph 2 herein), then, in lieu of any further salary payment
pursuant to paragraph 4(a) herein, Employer agrees to pay
Employee for the remaining term of this Agreement at an annual
rate equal to the average of Employee's "compensation" for the
three fiscal years preceding the year of such termination. For
this purpose the term "compensation" means Employee's base salary
in effect for a particular year plus the incentive compensation
received by Employee with respect to services rendered in such
year whether or not such incentive compensation is actually paid
in such year. Amounts described above due Employee under this
paragraph 6 shall be due and payable for the duration of the
remaining term in equal monthly installments. In addition to the
foregoing, Employer shall continue, for the duration of the
remaining term, to provide Employee with such additional fringe
benefits to which Employee was entitled as of the day immediately
prior to the date of such termination.
7. Extent of Services. Employee shall devote
Employee's time, attention and energy to the business of
Employer, and shall not during the term of this Agreement, or any
extension hereof, without Employer's consent, be engaged in any
other business activity whether or not such business activity is
pursued for gain, profit or other pecuniary advantage; but
nothing contained herein shall be construed as preventing
Employee from investing his assets in such form or manner as will
not require any service on the part of Employee in the operation
of the affairs of the corporations or other entities in which
Employee may invest his assets.
8. Covenants of Employee.
(a) During the term of Employee's employment
with Employer, and for a period of one (1) year after the
termination of such employment, for whatever reason, except for
the termination of Employee's employment under circumstances
which constitute a violation by Employer of the provisions of
this Agreement, Employee covenants and agrees that Employee will
not (except as required in Employee's duties to Employer), in any
manner directly or indirectly:
(i) Disclose or divulge to any person,
entity, firm or company whatsoever, or use for Employee's own
benefit or the benefit of any other person, entity, firm or
company directly or indirectly, in competition with the business
of Employer, as the same may exist at the date of such cessation,
any proprietary business methods, customer lists, supplier lists,
business plans or other information or data of Employer, without
regard to whether all of the foregoing matters will otherwise be
deemed confidential, material or important, the parties hereto
stipulating that as between them, the same are important,
material and confidential and greatly affect the effective and
successful conduct of the business and the goodwill of Employer,
and that any breach of the terms of this subparagraph (i) shall
be a material breach of this Agreement;
(ii) Solicit, divert, take away or
interfere with any of the customers, trade, business, patronage,
employees or agents of Employer;
(iii) Engage, directly or indirectly,
either personally or as an employee, partner, associate, officer,
manager, agent, advisor, consultant or otherwise, or by means of
any corporate or other entity or device, in any business
competitive with the business of Employer.
(b) For purposes hereof, a business will be
deemed competitive if (i) such business involves the manufacture
and sale of steel, or any other business which is competitive,
during or as of the date of cessation of Employee's employment,
with any business then being conducted by Employer or as to which
Employer has at such time formulated definitive plans to enter;
and (ii) such business makes substantial sales of products
competitive with those of Employer in any of the States of
Missouri, Illinois, Indiana, Iowa, Michigan and Ohio.
(c) All of the covenants on behalf of
Employee contained in this paragraph 8 shall be construed as
agreements independent of any other provision of this Agreement,
and the existence of any claim or cause of action against
Employer, whether predicated on this Agreement or otherwise,
shall not constitute a defense to the enforcement by Employer of
these covenants.
(d) It is the intention of the parties to
restrict the activities of Employee under this paragraph 8 only
to the extent necessary for the protection of legitimate business
interests of Employer, and the parties specifically covenant and
agree that should any of the clauses or provisions set forth
herein, under any set of circumstances not now foreseen by the
parties, be held by a court of competent jurisdiction to be
illegal, invalid or unenforceable under present or future laws
effective during the term of this Agreement, then and in that
event, it is the intention of the parties hereto that, in lieu of
each such clause or provision of this paragraph 8, there shall be
substituted or added, and there is hereby substituted or added,
terms to such illegal, invalid or unenforceable clause or
provision as may be legal, valid and enforceable.
9 Expenses. In addition to compensation paid to
Employee under paragraph 4 hereof, during the period of
Employee's employment, Employer will pay directly or reimburse
Employee for reasonable and necessary expenses incurred by
Employee in the interest of the business of Employer. All such
expenses paid by Employee will be reimbursed by Employer upon
presentation by Employee, from time to time, of an itemized
account of such expenditures, accompanied by appropriate receipts
or other evidence of payment to the extent necessary to permit
the deductibility thereof for Federal income tax purposes.
10. Documents. Employee agrees that all
documents, instruments, drawings, plans, contracts, proposals,
records, notebooks, invoices, statements and correspondence,
including all copies thereof, relating to the business of
Employer, other than purely personal documents, shall be the
property of Employer; and upon the cessation of Employee's
employment with Employer, for whatever reason, all of the same
then in Employee's possession, whether prepared by Employee or
others, will be left with or immediately delivered to Employer.
11. Remedies. It is agreed that any material
breach or evasion of any of the terms of this Agreement by
Employee will result in immediate and irreparable injury to
Employer and will authorize recourse to injunction and/or
specific performance as well as to all other legal or equitable
remedies to which Employer may be entitled. No remedy conferred
by any of the specific provisions of this Agreement is intended
to be exclusive of any other remedy, and each and every remedy
shall be cumulative and shall be in addition to every other
remedy whether given hereunder or not or whether hereafter
existing at law or in equity, by statute or otherwise. The
election of any one or more remedies by Employer or Employee
shall not constitute a waiver of the right to pursue other
available remedies at any time or cumulatively from time-to-time.
12. Severability. All agreements and covenants
herein contained are severable, and in the event any of them
shall be held to be invalid or unenforceable by any court of
competent jurisdiction, this Agreement shall continue in full
force and effect and, subject to paragraph 8(d) hereof, shall be
interpreted as if such invalid agreement or covenant were not
contained herein.
13 Waiver or Modification. No amendment, waiver
or modification of this Agreement or of any covenant, condition
or limitation herein contained shall be valid unless in writing
and duly executed by the party to be charged therewith, and no
evidence of any amendment, waiver or modification shall be
offered or received in evidence in any proceeding, arbitration or
litigation between the parties hereto arising out of or affecting
this Agreement, or the rights or obligations of the parties
hereunder, unless such amendment, waiver or modification is in
writing, duly executed as aforesaid, and the parties further
agree that the provisions of this paragraph may not be waived or
modified except as herein set forth. Failure of Employee or
Employer to exercise or otherwise act with respect to any rights
granted hereunder in the event of a breach of any of the terms or
conditions hereof by the other party, shall not be construed as a
waiver of such breach, nor prevent Employee or Employer from
thereafter enforcing strict compliance with any and all of the
terms and conditions hereof.
14. Fees and Expenses. If Employee is the
prevailing party, Employer shall pay all of Employee's reasonable
legal fees and related expenses (including the costs of experts,
evidence and counsel) incurred by Employee as a result of (i)
Employee's termination of employment (including all such fees and
expenses, if any, incurred in contesting or disputing any such
termination of employment) or (ii) Employee's seeking to obtain
or enforce any right or benefit provided by this Agreement or by
any other plan or arrangement maintained by Employer under which
Employee is or may be entitled to receive benefits.
15. Notices. All notices, requests, demands or
other communications hereunder ("Notice") shall be in writing and
shall be given by registered or certified mail, return receipt
requested:
if to Employer to:
Laclede Steel Company
Attn: John B. McKinney
15th Floor
One Metropolitan Square
St. Louis, Missouri 63102
and, if to Employee, to:
H. Bruce Nethington
1130 South Geyer Road
St. Louis, Missouri 63122
or to such other addresses as to which the parties hereto give
Notice in accordance with this paragraph 15.
16. Construction. This Agreement shall be
governed by and construed and interpreted according to the laws
of the State of Missouri, notwithstanding the place of execution
hereof, nor the performance of any acts in connection herewith or
hereunder in any other jurisdiction. For all purposes hereof,
reference to Employer shall include each and every subsidiary and
affiliated company of Employer.
17. Assignability. The services to be performed
by Employee hereunder are personal in nature and therefore
Employee shall not assign his rights or delegate his obligations
under this Agreement, and any attempted or purported assignment
or delegation not herein permitted shall be null and void.
18. Successors. Subject to the provisions of
paragraph 17, this Agreement shall be binding upon and shall
inure to the benefit of Employer and Employee and their
respective heirs, executors, administrators, legal
representatives, successors and assigns.
19. Prior Employment Agreements. Any prior
Employment Agreement between Employer and Employee is hereby
terminated by mutual agreement.
IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the day and year first above
written.
______________________________
H. BRUCE NETHINGTON
"Employee"
LACLEDE STEEL COMPANY
By____________________________
John B. McKinney, President
"Employer"
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this
"Agreement"), dated July 30, 1996, is made and entered into by
and between LACLEDE STEEL COMPANY, a Delaware corporation (the
"Company"), IVACO INC., a Canadian corporation ("Ivaco"), JOHN B.
McKINNEY, MICHAEL H. LANE, J. WILLIAM HEBENSTREIT, LARRY J.
SCHNURBUSCH and H. BRUCE NETHINGTON (collectively, the
"Management Purchasers").
RECITALS
A. The Company and Ivaco have entered into a
Stock Purchase Agreement dated as of July 30,1996 (the "Stock
Purchase Agreement"), whereby Ivaco has purchased 366,667 shares
of the Company's Series A Preferred Stock, no par value, (the
"Series A Preferred Stock") at a price of $15.00 per share;
A. The Company and each of the Management
Purchasers separately entered into a Management Stock Purchase
Agreement dated as of July 30,1996 (the "Management Stock
Purchase Agreements"), whereby the Management Purchasers have
purchased an aggregate of 50,000 shares of Series A Preferred
Stock at a price of $15.00 per share;
B. Upon approval by the stockholders of the
Company of (1) a reduction of the par value per share of the
Company's common stock from $13.33 per share to $0.01 per share
and (2) an increase in the number of authorized shares of the
Company's common stock from 5,000,000 to 25,000,000, and (3) the
recapitalization of Series A Preferred Stock, each share of
Series A Preferred Stock will become convertible at the option of
the holder into shares of the Company's common stock as
contemplated by Section 11 of the Certificate of Designation for
such series.
C. Pursuant to a standby purchase agreement,
Ivaco may also purchase certain additional shares of Series A
Preferred Stock.
D. Ivaco may desire, in the future, to sell to
the public some or all of the shares of Series A Preferred Stock,
and/or any common stock issued upon conversion of Series A
Preferred Stock.
E. The Company therefore deems it to be in its
best interest to set forth the rights of Ivaco in connection with
public offerings and sales of such shares of Series A Preferred
Stock and common stock issued upon conversion of Series A
Preferred Stock.
NOW, THEREFORE, in consideration of the premises
and mutual covenants and obligations hereinafter set forth, and
intending to be legally bound hereby, the Company and Ivaco
hereby agree as follows:
1. Definitions. As used in this Agreement, the following
terms shall have the following meanings:
"Effective Date" shall mean the date of this
Agreement.
"Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.
The terms "register," "registered," and
"registration" shall mean a registration effected by
the preparation and filing of a Registration Statement
in compliance with the Securities Act, and the
declaration or ordering of effectiveness of such
Registration Statement by the SEC.
"Holder(s)" shall mean Ivaco and the
Management Purchasers, so long as it or they hold any
Registrable Securities, and any person owning
Registrable Securities who is a permitted assignee of
rights under Section 12 of this Agreement.
"Registrable Securities" shall mean the
shares of (1) any Series A Preferred Stock issued to
Ivaco pursuant to the Stock Purchase Agreement and any
common stock issued upon conversion of such Series A
Preferred Stock, (2) any Series A Preferred Stock
issued to the Management Purchasers pursuant to the
Management Purchase Agreements and any common stock
issued upon conversion of such Series A Preferred
Stock, and (3) any Series A Preferred Stock issued to
Ivaco pursuant to the Standby Agreement which is
attached as Exhibit E to the Stock Purchase Agreement
and any common stock issued upon conversion of such
Series A Preferred Stock, and, in each case, all shares
of common stock or other securities issued as (or
issuable upon the conversion or exercise of any
warrant, right or other security which is issued as) a
dividend or other distribution with respect to, in
exchange for, or in replacement of any shares of Series
A Preferred Stock. The term "Registrable Securities"
excludes, however, any security (i) the sale of which
has been effectively registered under the Securities
Act and which has been disposed of in accordance with a
Registration Statement, (ii) that has been sold in a
transaction exempt from the registration and prospectus
delivery requirements of the Securities Act under
Section 4(1) thereof (including, without limitation,
transactions pursuant to Rules 144 and 144A of the
Securities Act) such that the further disposition of
such securities by the transferee or assignee is not
restricted under the Securities Act, (iii) that have
been sold in a transaction in which such rights are
not, or cannot be, assigned, or (iv) for which the
Registration Rights have expired pursuant to Section 11
of this Agreement.
"Registration Expenses" shall mean all
expenses incident to the Company's performance of or
compliance with this Agreement, including, without
limitation, all (i) registration, qualification and
filing fees; (ii) fees and expenses of compliance with
securities or blue sky laws (including reasonable fees
and disbursements of counsel in connection with blue
sky qualifications of any Registrable Securities being
registered); (iii) printing expenses; (iv) internal
expenses of the Company (including, without limitation,
all salaries and expenses of officers and employees of
the Company performing legal or accounting duties); (v)
fees and disbursements of counsel for the Company and
fees and expenses for independent certified public
accountants retained by the Company (including the
expenses of any comfort letters or costs associated
with the delivery by independent certified public
accountants of comfort letters customarily requested by
underwriters); and (vi) fees and expenses of listing
any Registrable Securities on any national securities
exchange.
"Registration Rights" shall mean the rights
of the Holders to cause the Company to register
Registrable Securities pursuant to Sections 2 and 3 of
this Agreement.
"Registration Statement" shall mean any
registration statement or similar document that covers
any of the Registrable Securities pursuant to the
provisions of this Agreement, including the prospectus
or preliminary prospectus included therein, all
amendments and supplements to such Registration
Statement, including post-effective amendments, all
exhibits to such Registration Statement and all
material incorporated by reference in such Registration
Statement.
"SEC" shall mean the Securities and Exchange
Commission.
"Securities Act" shall mean the Securities
Act of 1933, as amended, and the rules and regulations
promulgated thereunder.
1. Demand Registration.
(a) If the Company shall receive at any time
on or after September 15, 1996, a written request from any
Holder(s) of Registrable Securities (collectively, the
"Initiating Holder") representing at least twenty percent (20%)
of the Registrable Securities or the amount of Registrable
Securities equivalent to 50,000 shares of Series A Preferred
Stock in the case of Ivaco, that the Company file a Registration
Statement covering the registration of no less than twenty
percent (20%) of the Registrable Securities or the amount of
Registrable Securities equivalent to 50,000 shares of Series A
Preferred Stock in the case of Ivaco, as specified in the written
request of the Initiating Holder (the "Registration Request"),
then the Company shall (i) within five (5) days of the receipt of
such Registration Request, give written notice of such
Registration Request to Ivaco, and (ii) use its reasonable best
efforts to as promptly as practicable file a Registration
Statement covering the registration of all Registrable Securities
with respect to which the Company receives, within the twenty
(20) days immediately following the Registration Request, a
request for inclusion in the registration from the Holder(s)
thereof (an "Inclusion Request") and the Company shall effect as
soon as practicable the registration of such Registrable
Securities. Each Inclusion Request shall also specify the
aggregate number of shares of Registrable Securities proposed to
be registered. Ivaco shall have the right to effect up to three
(3) demand registrations pursuant to this Section 2. Holders
other than the Initiating Holder shall have the right to
participate in any registration pursuant to this Section 2.
(b) the Company shall not be obligated (i)
to effect more than three registrations pursuant to this
Section 2 requested by Ivaco, (ii) to effect any registration
pursuant to this Section 2 within one (1) year after the
effective date of any registration of Registrable Securities
pursuant to a demand registration or any other registration of
Registrable Securities which the Holders were afforded the
opportunity to register all Registrable Securities under the
Securities Act which the Holders desired to register, (iii) to
effect any registration pursuant to this Section 2 if, in the
written opinion of counsel to the Company, reasonably
satisfactory to the requesting Holder, the sale or disposition of
such Holder's Registrable Securities, in the manner proposed by
such Holder, may be effected without registering such Securities
under the Securities Act.
(c) If any demand registration is an
underwritten offering the Holders of a majority of the
Registrable Securities to be included in such demand registration
will select a managing underwriter or underwriters to administer
the offering, which underwriter or underwriters shall be
reasonably satisfactory to the Company.
2. Incidental Registration. In the event that
(but without any obligation to do so), after the Effective Date,
the Company proposes to register any shares of Registrable
Securities in connection with the underwritten public offering of
such shares solely for cash on any form of Registration Statement
in which the inclusion of Registrable Securities is appropriate
(other than a registration (i) relating solely to the sale of
securities to participants in a Company stock plan, (ii) pursuant
to a Registration Statement on Form S-4 or Form S-8 (or any
successor forms) or any form that does not include substantially
the same information, other than information relating to the
selling shareholders or their plan of distribution, as would be
required to be included in a demand registration statement under
Section 2 covering the sale of Registrable Securities, (iii) in
connection with any dividend reinvestment or similar plan or
(iv) for the sole purpose of offering securities to another
entity or its security holders in connection with the acquisition
of assets or securities of such entity or any similar
transaction, the Company shall promptly give Ivaco written notice
of such registration at least thirty (30) days before the
anticipated filing date of any such Registration Statement. Upon
the written request of any Holder within fifteen (15) days after
the date of such notice from the Company, the Company shall cause
to be registered under the Securities Act all of the Registrable
Securities that such Holder has so requested to be registered on
such Registration Statement. The Company shall not be required
to proceed with, or maintain the effectiveness of, any
registration of its securities after giving the notice herein
provided, and the right of any Holder to have Registrable
Securities included in such Registration Statement shall be
conditioned upon participation in any underwriting to the extent
provided herein. The Company shall not be required to include
any Registrable Securities in such underwriting unless the
Holders thereof enter into an underwriting agreement with the
underwriter(s) selected by the Company in customary form, and
upon terms and conditions agreed upon between the Company and
such underwriter(s). In the event that the underwriter(s) shall
advise the Company that marketing or other factors require that
less than 100% of the Registrable Securities requested by the
Holder or Holders of Registrable Securities be underwritten, then
the Company shall so advise all Holders of Registrable Securities
that would otherwise be underwritten pursuant hereto. The
underwriter(s) may exclude some or all of the Registrable
Securities from such underwriting to the extent and in the amount
that the underwriter(s) advise the Company that less than 100% of
the Registrable Securities requested to be registered can be
marketed and the number of Registrable Securities, if any, that
may be included in the underwriting shall be allocated among all
Holders thereof in proportion (as nearly as practicable) to the
number of Registrable Securities which each Holder requested be
included in such registration; provided, however, that the number
of Registrable Securities requested to be registered by the
Management Purchasers shall be reduced to zero before the number
of Registrable Securities requested to be registered by Ivaco
shall be reduced by any amount. Nothing in this Section 3 is
intended to or shall diminish the number of securities to be
included by the Company in such underwriting. The Company and
the underwriter(s) selected by the Company shall make all
determinations with respect to the timing, pricing and other
matters related to the offering of securities pursuant to this
Section 3.
3. Registration Procedure. Whenever required
under this Agreement to effect the registration of the
Registrable Securities, the Company shall as expeditiously as
reasonably possible:
(a) prepare and file with the SEC, as soon
as practicable, a Registration Statement with respect
to such Registrable Securities and use its reasonable
best efforts to cause such Registration Statement to
become effective, and keep such Registration Statement
effective for up to one hundred eighty (180) days or
such shorter period as shall be required to sell all of
the Registrable Securities covered by such Registration
Statement; notwithstanding the foregoing, the Company
shall have no obligation to cause any Registration
Statement to become effective prior to the date the
Company has published its financial results for the
third fiscal quarter of 1996. If the Holders of a
majority of the Registrable Securities to be included
in such registration statement notify the Company in
writing that they have selected one firm of attorneys
("Sellers Counsel") to represent them in connection
with such registration, then at least five business
days before filing with the Commission such
registration statement, the Company will furnish to
Sellers Counsel copies of such registration statement
as proposed to be filed, and thereafter will furnish to
each seller of Registrable Securities such number of
copies of such registration statement, each amendment
and supplement thereto, the prospectus included in such
registration statement (including each preliminary
prospectus) and such other documents as such seller may
reasonably request in order to facilitate the
disposition of the Registrable Securities owned by such
seller and to change the registration statement (but
not including any document incorporated therein by
reference) as it relates to such seller or Sellers
Counsel as requested by such seller or Sellers Counsel
on a timely basis, and to reasonably consider other
changes to the registration statement (but not
including any document incorporated therein by
reference) reasonably requested by such seller or
Sellers Counsel on a timely basis, in light of the
requirements of the Securities Act and any other
applicable laws and regulations;
(b) prepare and file with the SEC such
amendments, post-effective amendments and supplements
to such Registration Statement and the prospectus used
in connection with such Registration Statement as may
be necessary to comply with the provisions of the
Securities Act with respect to the disposition of all
Registrable Securities covered by such Registration
Statement;
(c) furnish to the Holders, without charge,
such number of copies of a prospectus, including a
preliminary prospectus, and any amendments or
supplements thereto as such Holders may reasonably
request and a reasonable number of copies of the then-effective
Registration Statement and any post-effective
amendment thereto, including financial statements and
schedules, all documents incorporated therein by
reference and all exhibits (including those
incorporated by reference);
(d) promptly after the filing of any
document that is to be incorporated by reference into a
Registration Statement or prospectus, provide copies of
such document to Ivaco;
(e) make every reasonable effort to obtain
the withdrawal of any order suspending the effectiveness of a
registration statement at the earliest possible moment and to
prevent the entry of such an order;
(f) use its reasonable best efforts to
register and qualify the securities covered by such
Registration Statement under such other securities or
blue sky laws of such jurisdictions as shall be
reasonably requested by the Holders; provided, however,
that the Company shall not be required to qualify to do
business, file a general consent to service of process
or subject itself to taxation in any such states or
jurisdictions where it would not otherwise be required
to so qualify to do business or consent to service of
process or subject itself to taxation;
(g) if it knows thereof, notify the Holders
of shares covered by such Registration Statement, at
any time when a prospectus relating thereto is required
to be delivered under the Securities Act, of the
occurrence of any event as a result of which in its
judgment the prospectus included in such Registration
Statement, as then in effect, includes an untrue
statement of a material fact or omits to state a
material fact required to be stated therein or
necessary to make the statements therein not misleading
in the light of the circumstances then existing;
(h) use its reasonable best efforts to cause
all Registrable Securities covered by the Registration
Statement to be listed on each national securities
exchange on which shares of the Company's Common Stock
are then listed, if eligible, or if the Common Stock is
not then so listed, the NASDAQ National Market System,
if eligible, or in the over-the-counter market, as
shown by the NASDAQ System Level 1 (or comparable
system), if eligible;
(i) cooperate with the Holders to facilitate
the timely preparation and delivery of certificates
representing Registrable Securities to be sold and not
bearing any restrictive legends, and enable such
Registrable Securities to be in such denominations and
registered in such names as the Holders may request at
least two (2) business days prior to any sale of
Registrable Securities; and
(j) pay or cause to be paid all Registration
Expenses.
4. Right to Withdraw Registration Request. The
Holders may withdraw a request for registration or inclusion
hereunder at any time but shall lose one (1) of their rights to
cause the Company to register the Registrable Securities pursuant
to Section 2 hereof if a request for registration under Section 2
was withdrawn; provided, however, that if the request is
withdrawn as a result of information concerning the business or
financial condition of the Company which materially and adversely
differs from information regarding the Company publicly available
on the date on which such registration was requested, the
foregoing provisions shall not be applicable.
5. Right to Withdraw Registration.
Notwithstanding anything herein to the contrary, the Company may
delay, suspend or withdraw any registration or qualification of
Registrable Securities required pursuant to this Agreement if the
Company in good faith determines that any such registration would
adversely affect an offering of any securities of the Company
which is then in process or if the Company is aware of other
pending developments or any material corporate event and the
Company is not in a position to timely prepare and file such
Registration Statement, or to move forward with the processing of
such Registration Statement by the SEC. If the Company exercises
its right to withdraw a registration pursuant to this Section 6
or the registration fails to become effective for any reason, the
related request to register shall not be counted as an exercise
of a demand registration right under Section 2 hereof.
6. Obligation of Holders to Furnish Information.
It shall be a condition precedent to the obligations of the
Company to take any action pursuant to this Agreement with
respect to the Registrable Securities that the Holders thereof
furnish to the Company such information regarding themselves, the
Registrable Securities held by them, and the intended method of
disposition of such Registrable Securities as shall be required
under the Securities Act or the Exchange Act to effect the
registration of the Holders' Registrable Securities.
The Holders agree that, upon receipt of any notice
from the Company of the occurrence of any event of the kind
described in Section 4(f) hereof, the Holders shall forthwith
discontinue disposition of the Registrable Securities pursuant to
the then current prospectus until (i) the Holders are advised in
writing by the Company that a new Registration Statement covering
the offer of Registrable Securities has become effective under
the Securities Act, or (ii) the Holders receive copies of a
supplemented or amended prospectus contemplated by Section 4
hereof, or (iii) until the Holders are advised in writing by the
Company that the use of the then current prospectus may be
resumed. The Company shall use its reasonable best efforts to
limit the duration of any discontinuance of disposition of
Registrable Securities pursuant to this paragraph.
7. Effectiveness of Registration.
Notwithstanding the obligation of the Company to effect no more
than three (3) registrations requested pursuant to Section 2
hereof, a registration requested pursuant to Section 2 hereof
shall not be deemed to have been effected if (i) the Registration
Statement has not been kept effective for the period required
under Section 4(a) of this Agreement, or (ii) the offering of
Registrable Securities pursuant to such registration does not
commence due to any reason other than withdrawal by the Holder.
8. Indemnification and Contribution.
(a) Indemnification by the Company. In the
event any Registrable Securities are included in a
Registration Statement pursuant to this Agreement, the
Company hereby agrees to indemnify and hold harmless
the Holders, their partners, officers, employees and
directors and each person who controls such Holder
(within the meaning of the Securities Act) and any
agent thereof against all losses, claims, damages,
liabilities or expenses (including reasonable expenses
of investigation), joint or several, or actual or
threatened actions in respect thereof (collectively,
"Losses") to which such Holders may become subject
under the Securities Act, or otherwise, to the extent
such Losses arise out of, or are based upon, any untrue
statement or alleged untrue statement of any material
fact contained in such Registration Statement, any
related preliminary, final or summary prospectus, or
any amendment or supplement thereto, or any document
incorporated by reference into any of the foregoing, or
arise out of, or are based upon, the omission or
alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse
the Holders for any legal or other expenses reasonably
incurred by them in connection with investigating or
defending any such Losses; provided, however, that the
Company will not be so liable to the extent that any
such Losses arise out of, or are based upon, an untrue
statement or alleged untrue statement of a material
fact or an omission or alleged omission to state a
material fact in such Registration Statement, such
preliminary, final or summary prospectus, or any such
amendment or supplement thereto, or any such document
incorporated by reference into any of the foregoing, in
reliance upon, and in conformity with, information
furnished in writing to the Company by or on behalf of
the Holders expressly for use in such document;
provided, further, that the Company shall not be
liable, and this indemnification agreement shall not
apply, to the extent that any such Losses are
attributable to the failure of the Holders (or agent
acting on their behalf) to deliver a final prospectus
(or amendment or supplement thereto) that corrects a
material misstatement or omission contained in the
preliminary prospectus (or final prospectus) or to any
misstatement or omission of the Holders' selling
broker(s). In connection with an underwritten
offering, the Company will indemnify the underwriters
thereof, their partners, officers, employees and
directors and each person who controls such
underwriters (within the meaning of the Securities Act)
and any agent thereof at least to the same extent as
provided above with respect to the indemnification of
the Holders of Registrable Securities.
(b) Indemnification by the Holders of
Registrable Securities. With respect to written
information furnished to the Company expressly for use
in connection with any registration pursuant to the
terms of this Agreement by or on behalf of any Holder
for use in a Registration Statement, any related
preliminary, final or summary prospectus, or any
supplement or amendment thereto, or any document
incorporated by reference into any of the foregoing,
the Holders whose shares are being registered pursuant
to the Registration Statement shall agree in writing to
severally, and not jointly, indemnify and hold harmless
the Company, and its directors, officers and employees
and each person, if any, who "controls" (within the
meaning of the Securities Act) the Company (the "the
Company Indemnitees") against any Losses to which the
Company or such other person entitled to
indemnification hereunder may become subject under the
Securities Act, or otherwise, insofar as such Losses
arise out of, or are based upon, any untrue statement
or alleged untrue statement of any material fact
contained in such Registration Statement, such
preliminary, final or summary prospectus, or any such
amendment or supplement thereto, or any such document
incorporated by reference into any of the foregoing, or
arise out of, or are based upon, the omission or
alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading; and such Holders
shall reimburse the Company Indemnitees for any legal
or other expenses reasonably incurred by it or them in
connection with investigating or defending any such
Losses, in each case to the extent, but only to the
extent, that the same arises out of, or is based upon,
an untrue statement or alleged untrue statement of a
material fact or an omission or alleged omission to
state a material fact in such Registration Statement,
such preliminary, final or summary prospectus, any such
amendment or supplement thereto, or any such document
incorporated by reference into any of the foregoing, in
reliance upon, and in conformity with, such
information.
(c) Conduct of Indemnification Proceedings.
Promptly after receipt by an indemnified party
hereunder of notice of any claim or the commencement of
any action by a claimant not an indemnified party
hereunder ("Third-Party Claim"), the indemnified party
shall, if a claim for indemnification in respect
thereof is expected to be made by such indemnified
party against an indemnifying party, promptly notify
such indemnifying party in writing of such Third-Party
Claim as soon as is reasonably practicable after said
claim is actually known to the indemnified party;
provided, however, that the right of an indemnified
party to be indemnified hereunder in respect of Third-Party Claims
shall not be adversely affected by such
indemnified party's failure to notify the indemnifying
party of such Third-Party Claim unless, and then only
to the extent that, an indemnifying party is actually
damaged or suffers any Loss or incurs any additional
expense as a result thereof. The omission so to notify
the indemnifying party will not relieve the
indemnifying party from any liability that it may have
to any indemnified party under law or otherwise than
under this Section 9. If any such Third-Party Claim is
brought against an indemnified party, and it promptly
notifies the indemnifying party thereof, the
indemnifying party shall be entitled to assume the
defense thereof with counsel selected by the
indemnifying party and reasonably satisfactory to the
indemnified party provided that the indemnifying party
notifies the indemnified party of its election to
assume the defense of such claim within twenty (20)
days of receipt of notice of the claim from the
indemnified party. After the indemnifying party gives
notice to the indemnified party of its election to
assume the defense of such Third-Party Claim,
(i) except as set forth below, the indemnifying party
shall not be liable to the indemnified party for any
legal or other expense subsequently incurred by the
indemnified party in connection with the defense
thereof, (ii) the indemnifying party shall not be
liable for the costs and expenses of any settlement of
such claim or action unless such settlement was
effected with the written consent of the indemnifying
party, which shall not be unreasonable withheld, or the
indemnified party waived any rights to indemnification
hereunder in writing, in which case the indemnified
party may effect a settlement without such consent at
its own cost and expense, and (iii) the indemnified
party shall be obligated to cooperate with the
indemnifying party in the investigation of such claim
or action and shall not unreasonably prejudice the
indemnifying party's subrogation rights. The
indemnified party will have the right to employ its
counsel in any such action, but the fees and expenses
of such counsel will be at the expense of such
indemnified party unless (i) the employment of counsel
by the indemnified party has been authorized in writing
by the indemnifying party, (ii) the indemnified party
has reasonably concluded that there may be a conflict
of interest between the indemnifying party and the
indemnified party in the conduct of the defense of such
action (in which case the indemnifying party will not
have the right to direct the defense of such action on
behalf of the indemnified party) or (iii) the
indemnifying party has not in fact employed counsel to
assume the defense of such action within twenty (20)
days after receiving notice of the commencement of the
action, in each of which cases the fees and expenses of
counsel will be at the expense of the indemnifying
party or parties. All such fees and expenses will be
reimbursed promptly as they are incurred.
(d) Contribution. If for any reason the
indemnification provided for in Sections 9(a) or (b)
hereof is unavailable to an indemnified party or is
insufficient to hold it harmless as contemplated
therein, then the indemnifying party shall contribute
to the amount paid or payable by the indemnified party
as a result of such Loss in such proportion as is
appropriate to reflect not only the relative benefits
received by the indemnifying party and the indemnified
party, but also the relative fault of the indemnifying
party and the indemnified party, as well as any other
relevant equitable considerations. With respect to any
claim, no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities
Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent
misrepresentation.
(e) Survival of Indemnification. The
obligations under this Section 9 shall survive the
completion of any offering of Registrable Securities in
a Registration Statement pursuant to this Agreement,
and otherwise.
(f) Limitation. Anything to the contrary
contained in this Section 9 hereof notwithstanding, no
Holder of Registrable Securities shall be liable for
indemnification and contribution payments aggregating
an amount in excess of the maximum amount received by
such holder in connection with any sale of Registrable
Securities as contemplated herein.
9. Amendment of Registration Rights. Any
provision of this Agreement may be amended or the observance
thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively), only with
the written consent of the Company and Ivaco. Any amendment or
waiver effected in accordance with this Section 10 shall be
binding upon each Holder of any Registrable Securities and the
Company.
10. Assignment of Registration Rights. The
Registration Rights may be assigned by Ivaco to a permitted
transferee or assignee of Registrable Securities and such
transferee or assignee shall be deemed a Holder for purposes
hereof, provided that (i) the Company is, promptly upon such
transfer, furnished with written notice of the name and address
of such transferee or assignee and the Registrable Securities
with respect to which such Registration Rights are being
assigned, (ii) the transfer of such Registrable Securities is
effected in accordance with all applicable securities laws, (iii)
immediately following such transfer the further disposition of
such Registrable Securities by the transferee or assignee is
restricted to comply with the Securities Act, and (iv) the
transferee executes and agrees to be bound by this Agreement, a
counterpart of which executed by transferee shall be furnished to
the Company.
11. Information Confidential. The Holders may
not use any information received by them pursuant to this
Agreement in violation of the Exchange Act or reproduce,
disclose, or disseminate such information to any other person
(other than its employees or agents having a need to know the
contents of such information and its attorneys), except to the
extent reasonably related to the exercise of rights under this
Agreement, unless such information has been made available to the
public generally (other than by such recipient in violation of
this Section 12) or such recipient is required to disclose such
information by a governmental body or regulatory agency or by law
in connection with a transaction that is not otherwise prohibited
hereby.
12. Notices. All notices, requests, demands, and
other communications required or permitted under this Agreement
shall be in writing and shall be deemed to have been duly given
and made upon being delivered either by courier or fax delivery
to the party for whom it is intended, provided that a copy
thereof is deposited, postage prepaid, certified or registered
mail, return receipt requested, in the United States or Canadian
mail, bearing the address shown in this Section for, or such
other address as may be designated in writing hereafter by, such
party:
If to the Company:
Laclede Steel Company
One Metropolitan Square
211 North Broadway
St. Louis, Missouri 63102-2738
Attention: Michael H. Lane
With a copy to:
Bryan Cave LLP
One Metropolitan Square, Suite 3600
St. Louis, Missouri 63102
Attention: Frank P. Wolff, Jr.
Telephone: (314) 259-2000
Facsimile: (314) 259-2020
If to Ivaco:
Ivaco Inc.
Place Mercantile
770 Rue Sherbrooke Ouest
Montreal, Quebec,
Canada H3A 1G1
With a copy to:
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004-1980
Attention: Jeffrey Bagner
13. Earnings Statement. The Company will make
generally available to its security holders as soon as possible,
but no later than 45 days after the close of the period covered
thereby (or 90 days if the period ends December 31), an earnings
statement (in form complying with the provisions of Rule 158 of
the regulations promulgated under the Securities Act) covering a
twelve-month period beginning not later than the first day of the
Company's fiscal quarter next following the effective date (as
defined in said Rule 158) of the Registration Statement.
14. Successors. This Agreement shall inure to
the benefit of and be binding upon the successors of each of the
parties and the assigns of Ivaco.
15. Counterparts. This Agreement may be executed
in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall be
deemed to be an original and all of which taken together shall
constitute one and the same agreement.
16. Headings. The headings to sections and
paragraphs in this Agreement are for convenience of reference
only and shall not limit or otherwise affect the meaning or
interpretation hereof.
17. Governing Law. This Agreement shall be
governed by and construed and interpreted in accordance with the
substantive laws of the State of Delaware, without reference to
its principles of choice of law.
18. Severability. In the event that any one or
more of the provisions contained herein, or the application
thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any
such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired
thereby.
19. Entire Agreement. This Agreement is intended
by the parties as a final expression of their agreement and is
intended to be a complete and exclusive statement of the
agreement and understanding of the parties hereto in respect of
the subject matter contained herein. This Agreement supersedes
all prior agreements and understandings between the parties with
respect to such subject matter.
IN WITNESS WHEREOF, the parties hereto have
executed this Registration Rights Agreement as of the date first
written above.
IVACO INC.
By:
Name: Paul Ivanier
Title: President and Chief Executive Officer
LACLEDE STEEL COMPANY
By:
Name: John B. McKinney
Title: President and Chief Executive Officer
<PAGE>
ELEVENTH AMENDMENT TO THE
LACLEDE STEEL COMPANY
KEY EMPLOYEE RETIREMENT AGREEMENT
THIS AGREEMENT, made and entered into on the 30th
day of July, 1996 by and between LACLEDE STEEL COMPANY, a
corporation organized under the laws of Delaware ("Company") and
JOHN B. McKINNEY (the "Key Employee").
WHEREAS, the Key Employee and the Company
previously entered into a Key Employee Retirement Agreement (the
"Agreement") pursuant to the Laclede Steel Company Key Employee
Retirement Plan which Agreement has been amended ten times
previously; and
WHEREAS, the Key Employee and the Company desire
to amend the Agreement effective as of July 30, 1996, to adjust
the amount of required Company contributions in respect of
investment of Key Employee Trust assets in Company securities;
NOW, THEREFORE, effective as of July 30, 1996, the
Agreement is amended as follows:
I.
The following sentence is added at the end of
Section 4.1(c):
For purposes of this Section 4.1(c), the fair market
value of the assets of a Key Employee Trust shall be determined
without regard to any diminution in value of any Company stock in
which such Trust invests, after the date of such investment.
The Amendment was adopted and agreed to this 30th
day of July, 1996.
LACLEDE STEEL COMPANY
By:
John B. McKinney
ELEVENTH AMENDMENT TO THE
LACLEDE STEEL COMPANY
KEY EMPLOYEE RETIREMENT AGREEMENT
THIS AGREEMENT, made and entered into on the 30th
day of July, 1996 by and between LACLEDE STEEL COMPANY, a
corporation organized under the laws of Delaware ("Company") and
J. WILLIAM HEBENSTREIT (the "Key Employee").
WHEREAS, the Key Employee and the Company
previously entered into a Key Employee Retirement Agreement (the
"Agreement") pursuant to the Laclede Steel Company Key Employee
Retirement Plan which Agreement has been amended ten times
previously; and
WHEREAS, the Key Employee and the Company desire
to amend the Agreement effective as of July 30, 1996, to adjust
the amount of required Company contributions in respect of
investment of Key Employee Trust assets in Company securities;
NOW, THEREFORE, effective as of July 30, 1996, the
Agreement is amended as follows:
I.
The following sentence is added at the end of
Section 4.1(c):
For purposes of this Section 4.1(c), the fair market
value of the assets of a Key Employee Trust shall be determined
without regard to any diminution in value of any Company stock in
which such Trust invests, after the date of such investment.
The Amendment was adopted and agreed to this 30th
day of July, 1996.
LACLEDE STEEL COMPANY
By:
J. William Hebenstreit
ELEVENTH AMENDMENT TO THE
LACLEDE STEEL COMPANY
KEY EMPLOYEE RETIREMENT AGREEMENT
THIS AGREEMENT, made and entered into on the 30th
day of July, 1996 by and between LACLEDE STEEL COMPANY, a
corporation organized under the laws of Delaware ("Company") and
MICHAEL H. LANE (the "Key Employee").
WHEREAS, the Key Employee and the Company
previously entered into a Key Employee Retirement Agreement (the
"Agreement") pursuant to the Laclede Steel Company Key Employee
Retirement Plan which Agreement has been amended ten times
previously; and
WHEREAS, the Key Employee and the Company desire
to amend the Agreement effective as of July 30, 1996, to adjust
the amount of required Company contributions in respect of
investment of Key Employee Trust assets in Company securities;
NOW, THEREFORE, effective as of July 30, 1996, the
Agreement is amended as follows:
I.
The following sentence is added at the end of
Section 4.1(c):
For purposes of this Section 4.1(c), the fair market
value of the assets of a Key Employee Trust shall be determined
without regard to any diminution in value of any Company stock in
which such Trust invests, after the date of such investment.
The Amendment was adopted and agreed to this 30th
day of July, 1996.
LACLEDE STEEL COMPANY
By:
Michael H. Lane
TWELFTH AMENDMENT TO THE
LACLEDE STEEL COMPANY
KEY EMPLOYEE RETIREMENT PLAN
WHEREAS, Laclede Steel Company ("Company")
previously adopted the Laclede Steel Company Key Employee
Retirement Plan ("Plan") for the benefit of eligible employees
which Plan has been amended eleven times previously; and
WHEREAS, the Company desires to amend the Plan
effective as of July 30, 1996, to adjust the amount of required
Company contributions in respect of investment of Key Employee
Trust assets in Company securities;
NOW, THEREFORE, effective as of July 30, 1996, the
Plan is amended as follows:
I.
The following sentence is added at the end of
Section 5.1(c):
For purposes of this Section 5.1(c), the fair market
value of the assets of a Key Employee Trust shall be determined
without regard to any diminution in value of any Company stock in
which such Trust invests, after the date of such investment.
The Amendment was adopted and agreed to this 30th
day of July, 1996.
LACLEDE STEEL COMPANY
By:
THIRD AMENDMENT TO THE
LACLEDE STEEL COMPANY
KEY EMPLOYEE RETIREMENT AGREEMENT
THIS AGREEMENT, made and entered into on the 30th
day of July, 1996 by and between LACLEDE STEEL COMPANY, a
corporation organized under the laws of Delaware ("Company") and
H. BRUCE NETHINGTON (the "Key Employee").
WHEREAS, the Key Employee and the Company
previously entered into a Key Employee Retirement Agreement (the
"Agreement") pursuant to the Laclede Steel Company Key Employee
Retirement Plan which Agreement has been amended two times
previously; and
WHEREAS, the Key Employee and the Company desire
to amend the Agreement effective as of July 30, 1996, to adjust
the amount of required Company contributions in respect of
investment of Key Employee Trust assets in Company securities;
NOW, THEREFORE, effective as of July 30, 1996, the
Agreement is amended as follows:
I.
The following sentence is added at the end of
Section 4.1(c):
For purposes of this Section 4.1(c), the amount of
assets in a Key Empaloyee Trust as of the end of a year and the
fair market value of the assets of such Trust shall be determined
without regard to any diminution in value of any Company stock in
which such Trust invests, after the date of such investment.
The Amendment was adopted and agreed to this 30th
day of July, 1996.
LACLEDE STEEL COMPANY
By:
H. Bruce Nethington
THIRD AMENDMENT TO THE
LACLEDE STEEL COMPANY
KEY EMPLOYEE RETIREMENT AGREEMENT
THIS AGREEMENT, made and entered into on the 30th
day of July, 1996 by and between LACLEDE STEEL COMPANY, a
corporation organized under the laws of Delaware ("Company") and
LARRY J. SCHNURBUSCH (the "Key Employee").
WHEREAS, the Key Employee and the Company
previously entered into a Key Employee Retirement Agreement (the
"Agreement") pursuant to the Laclede Steel Company Key Employee
Retirement Plan which Agreement has been amended two times
previously; and
WHEREAS, the Key Employee and the Company desire
to amend the Agreement effective as of July 30, 1996, to adjust
the amount of required Company contributions in respect of
investment of Key Employee Trust assets in Company securities;
NOW, THEREFORE, effective as of July 30, 1996, the
Agreement is amended as follows:
I.
The following sentence is added at the end of
Section 4.1(c):
For purposes of this Section 4.1(c), the amount of
assets in a Key Empaloyee Trust as of the end of a year and the
fair market value of the assets of such Trust shall be determined
without regard to any diminution in value of any Company stock in
which such Trust invests, after the date of such investment.
The Amendment was adopted and agreed to this 30th
day of July, 1996.
LACLEDE STEEL COMPANY
By:
Larry J. Schnurbusch<PAGE>
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<PERIOD-START> JAN-1-1996
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