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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 22, 1999
KAISER VENTURES INC.
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation or organization)
0-18858 94-0594733
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(Commission file number) (I.R.S. Employer Identification No.)
3633 E. Inland Empire Boulevard, Suite 850
Ontario, CA 91764
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(Address of principal executive offices, including Zip Code)
Registrant's telephone number,
including area code (909) 483-8500
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(Former name, former address and former fiscal year, if changed since last
report)
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FORM 8-K
Current Report
Item 5. Other Items
On November 22, 1999, Kaiser Ventures Inc. (the "Company") purchased
2,730,950 and 1,693,551 shares of its common stock from The New Kaiser Voluntary
Employees' Beneficiary Association ("VEBA") and The Pension Benefit Guaranty
Corporation ("PBGC"), respectively. The shares were repurchased in accordance
with a separate Stock Purchase Agreement entered into between each seller and
the Company. The Company paid $13.00 per share in cash. In addition, VEBA and
PBGC have the opportunity, in certain circumstances, to participate in the
future success of the Company through a contingent real estate payment
calculated in accordance with an agreed upon formula if there is a bulk sale of
the Company's real estate generally before December 31, 2000; and warrants for
460,000 and 285,260 shares of the Company's stock were issued to VEBA and PBGC,
respectively. The warrants have a term of five years and an exercise price of
$17.00 per share. VEBA and the PBGC each have demand registration rights for the
shares issued upon exercise of the warrants as long as the registration can be
accomplished through the use of a Form S-3 or a comparable form, subject to the
terms and conditions of a Registration Rights Agreement.
If all currently contemplated real estate transactions are closed on their
current terms, VEBA and PBGC would receive an additional cash payment of
approximately $1.10 per share. The Company has reserved the right to distribute
to the Company's shareholders the same amount of cash that would be received by
VEBA and PBGC pursuant to the Contingent Payment Agreement with each without
adjustment of the warrant price.
In addition, the size of the Board of Directors was reduced from eleven
members to seven members, with Messrs. Gibbons, Morgan, Rabone and Stevenson
resigning from the Board.
The Company used cash on hand to fund the purchase of the stock. The cash
was generated from the cash and sales of International Speedway Corporation
stock received in the merger between Penske Motorsports, Inc. and International
Speedway Corporation.
The foregoing summary description of each Stock Purchase Agreement,
Contingent Payment Agreement, Stock Purchase Warrant, Registration Rights
Agreement, and the exhibits thereto (collectively the "Transaction Documents"),
and the transactions contemplated therein, does not purport to be complete and
is qualified in its entirety by reference to each of the Transaction Documents.
A copy of the major Transaction Documents are attached hereto and they are
incorporated herein by this reference. In addition, a copy of the Company's
press release, dated November 22, 1999, relating to the above-described
transactions is attached hereto as Exhibit 99.1.
With the repurchase of Company shares from VEBA and PBGC, the Company
issued and outstanding shares were reduced from approximately 10,699,354 to
6,274,853 (including 136,919 shares deemed outstanding but reserved for issuance
to the general unsecured creditors of Kaiser Steel Corporation).
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Item 7. Financial Statements and Exhibits
Exhibit 2.1 Stock Purchase Agreement between Kaiser Ventures Inc.
and the New Kaiser Voluntary Employees' Beneficiary
Association dated November 22, 1999.
Exhibit 2.2 Stock Purchase Agreement between Kaiser Ventures Inc.
and Pension Benefit Guaranty Corporation dated November
22, 1999.
Exhibit 4.1 Stock Purchase Warrant between Kaiser Ventures Inc. and
the New Kaiser Voluntary Employees' Beneficiary
Association dated November 22, 1999.
Exhibit 4.2 Stock Purchase Warrant between Kaiser Ventures Inc. and
Pension Benefit Guaranty Corporation dated November 22,
1999.
Exhibit 10.1 Registration Rights Agreement among Kaiser Venture Inc.
and the New Kaiser Voluntary Employees' Beneficiary
Association and Pension Benefit Guaranty Corporation
dated November 22, 1999.
Exhibit 10.2 Contingent Payment Agreement between Kaiser Ventures Inc
and the New Kaiser Voluntary Employees' Beneficiary
Association dated November 22, 1999.
Exhibit 10.3 Contingent Payment Agreement between Kaiser Ventures Inc
and Pension Benefit Guaranty Corporation dated November
22, 1999.
Exhibit 99.1 Press Release of Kaiser Ventures Inc. issued November
22, 1999 regarding the purchase of Company shares from
the New Kaiser Voluntary Employees' Beneficiary
Association and Pension Benefits Guaranty Corporation.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Kaiser Ventures Inc.
Date: November 22, 1999 /s/ Richard E. Stoddard
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Richard E. Stoddard, President &
Chief Executive Officer
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EXHIBIT 2.1
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Stock Purchase Agreement
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This STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into this
22nd day of November, 1999, by and between KAISER VENTURES INC., a Delaware
corporation, ("Kaiser") and THE NEW KAISER VOLUNTARY EMPLOYEES' BENEFICIARY
ASSOCIATION, a tax exempt trust formed pursuant to Section 501(a) and 501(c)(9)
of the Internal Revenue Code of 1986, as amended ("VEBA").
Recitals
A. VEBA owns shares of the $.03 par value common stock of Kaiser which
VEBA received in connection with the Chapter 11 bankruptcy reorganization of
Kaiser Steel Corporation.
B. The Board of Directors of Kaiser, having considered the recommendations
of its duly authorized Independent Special Committee, has determined that the
acquisition by Kaiser of the VEBA Shares (as defined below) is in the best
interests of the nonselling shareholders of Kaiser.
C. The parties desire to enter this Agreement and to pursue the
transaction contemplated hereby (the "Transaction") pursuant to which Kaiser
will purchase 2,730,950 shares of the Kaiser common stock (the "VEBA Shares")
owned by VEBA upon the terms and conditions of this Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
parties hereto agree as follows:
1. Purchase and Sale of Shares. Subject to the terms and conditions of
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this Agreement, Kaiser hereby purchases from VEBA, and VEBA hereby sells to
Kaiser, the VEBA Shares.
2. Purchase Price and Payment Terms. The purchase price payable by
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Kaiser to VEBA for the VEBA Shares (the "Purchase Price") consists of (i) a
fixed per share payment (ii) Warrants, and (iii) a contingent payment, which is
being paid as follows:
2.1 Fixed Payment. A fixed payment of $13.00 per share for a total
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fixed purchase price of $35,502,415 paid by wire transfer of immediately
available funds contemporaneously herewith.
2.2 Warrant. Contemporaneously herewith, Kaiser is delivering to
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VEBA a warrant, in the form attached hereto as Exhibit A (the "Warrant"), to
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purchase 460,000 shares of Kaiser Common Stock.
2.3 Contingent Payment. In addition, VEBA will have the right to
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receive a contingent payment (the "Contingent Payment") on the terms and
conditions of the Contingent Payment Agreement in the form attached hereto as
Exhibit B.
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3. Representations and Warranties of Kaiser. Kaiser represents and
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warrants to VEBA:
(a) Organization and Authorization. Kaiser has been duly
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incorporated, is validly existing and in good standing under the laws of the
State of Delaware. The execution, delivery and performance of this Agreement,
the Warrant, the Contingent Payment Agreement and the Registration Rights
Agreement (as hereafter defined) have been duly authorized by all requisite
action. No charter, bylaw, material agreement, material document or material
instrument of any kind of which Kaiser is a party or by which it may be bound
would be violated by the Transaction. Kaiser has full power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.
This Agreement, the Warrant, the Contingent Payment Agreement and the
Registration Rights Agreement constitute the valid and legally binding
obligation of Kaiser, enforceable in accordance with its terms and conditions,
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting or relating to creditors' rights generally. Kaiser need not give
any notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order to consummate the
transactions contemplated by this Agreement. The Transaction does not
contravene any applicable law, rule, or regulation or any order or decree
binding on Kaiser. A true and correct copy of the resolutions of the
Independent Committee of the Board of Directors of Kaiser and those of the Board
of Directors of Kaiser approving the Transaction had previously been delivered
to VEBA and are attached to the opinion of counsel provided to VEBA. Prior to
adopting those resolutions, the Independent Committee and the Board of Directors
of Kaiser received an opinion from Merrill Lynch as to the fairness of the
Transaction to the nonselling shareholders of Kaiser.
(b) Consents. Kaiser has obtained any necessary third party consent
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or approval that may be required to be obtained by it to complete the
Transaction.
(c) Brokers. Except for Merrill Lynch, whose fees shall be the sole
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obligation of Kaiser, Kaiser has not employed any broker or finder in connection
with the Transaction, and shall hold VEBA harmless from any liability or loss as
a result of or in connection with any brokerage or finder's fee or other
commission of any person retained by Kaiser in connection with the Transaction.
(d) No Material Adverse Changes. Since December 31, 1998, there has
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not been any material adverse changes in the business, financial condition,
operations, results of operations, or future prospects of Kaiser and no material
transactions involving Kaiser are pending including any material transactions
involving Mine Reclamation Corporation or Mill Site, except as disclosed (a) to
the public in press releases or filings with the Securities and Exchange
Commission or (b) to the representatives of VEBA in writing at the Board of
Directors meeting at which this Agreement was approved.
4. Representations and Warranties of VEBA. VEBA hereby represents and
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warrants to Kaiser as follows:
(a) Organization and Authorization. VEBA is a trust that has been
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duly formed, is validly existing and in good standing under California and
applicable federal laws. The execution, delivery and performance of this
Agreement and the Registration Rights Agreement have been duly authorized by all
requisite action as necessary. No trust document, bylaw, material agreement,
material document, or material instrument of any kind of which VEBA is party or
by which
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it may be bound would be violated by the Transaction. This Agreement and the
Registration Rights Agreement constitute the valid and legally binding
obligation of VEBA, enforceable in accordance with its terms and conditions,
subject to bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting or relating to creditors' rights generally. VEBA need not give
any notice to, make any filing with, or obtain any authorization, consent, or
approval of any government or governmental agency in order to consummate the
transactions contemplated by this Agreement. The Transaction does not contravene
any applicable law, rule, or regulation or any order or decree binding on VEBA.
(b) Consents. VEBA has obtained any necessary third party consent or
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approval that may be required to be obtained by it to complete the Transaction.
(c) Ownership. VEBA is the record and beneficial owner of 3,387,940
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shares of the common stock of Kaiser, including the VEBA Shares. VEBA has and
Kaiser will receive title to the VEBA Shares, free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal, agreements,
charges or other encumbrances of any nature whatsoever.
(d) Warrant Representations. The Warrant and the Shares for which it
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is being exercisable are being acquired for investment for VEBA's own account,
not as a nominee or agent, and not with a view to the sale or distribution of
all or any part thereof in violation of applicable securities laws. VEBA has
the requisite knowledge and experience to assess the relative merits and risks
of an acquisition of the Warrant and such shares. VEBA is an "accredited
investor" as that term is defined by Rule 501(a) promulgated under the
Securities Exchange Act of 1933, as amended. The VEBA understands that each
certificates for the Warrant and such shares may be legended as a result of the
application of Securities and Exchange Commission Rule 144.
(e) Brokers. VEBA has not employed any broker or finder in connection
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with the Transaction, and shall hold Kaiser harmless from any liability or loss
as a result of or in connection with any brokerage or finder's fee or other
commission of any person retained by VEBA in connection with the Transaction.
5. Other Documents.
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(a) Legal Opinion from VEBA's Counsel. Kaiser has received a legal
---------------------------------
opinion from VEBA's legal counsel to the effect that: (a) this Agreement and
the Registration Rights Agreement have been duly authorized by required legal
action on the part of VEBA; (b) the Transaction does not contravene any
applicable law, rule, or regulation or any order or decree binding on VEBA; and
(c) the completion of the Transaction on the part of VEBA does not require the
consent or authorization of any governmental authority that has not been
obtained.
(b) Legal Opinion from Kaiser's Counsel. VEBA has received a legal
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opinion from Kaiser's legal counsel to the effect that: (a) this Agreement, the
Warrant, the Contingent Payment Agreement and the Registration Rights Agreement
have been authorized by required legal action on the part of Kaiser; (b) the
Transaction does not contravene any applicable law, rule, or regulation or any
order or decree binding on Kaiser; and (c) the completion of the Transaction on
the part of Kaiser does not require the consent or authorization of any
governmental authority that has not been obtained.
6. Limited Stock Lock-Up. VEBA agrees that, without the prior written
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consent of
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Kaiser, which consent Kaiser may grant or deny in its sole and absolute
discretion, VEBA will not offer, sell, contract to sell, pledge or otherwise
dispose of ("Transfer"), directly or indirectly, any shares of: (i) Kaiser
Common Stock or (ii) any securities convertible into or exercisable or
exchangeable for Kaiser Common Stock, nor will it publicly disclose the
intention to make any such Transfer, for a period of 180 days after the dates
thereof as specified in this Agreement. Kaiser and its transfer agent and
registrar are hereby authorized by VEBA to decline to make any Transfer of
shares of Kaiser Common Stock if such Transfer would constitute a violation or
breach of this Agreement. A copy of this paragraph shall be sufficient notice of
these restrictions to Kaiser's stock transfer agent and registrar. In addition,
Kaiser and VEBA are entering into the Registration Rights Agreement in the form
attached hereto as Exhibit C (the "Registration Rights Agreement").
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7. Resignations. On execution hereof, VEBA has delivered to Kaiser an
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executed irrevocable resignation for each of four VEBA affiliated individuals
currently serving on Kaiser's Board of Directors, and the Board of Directors of
Kaiser has, subject to the execution of this Agreement, appointed the
representative designated by VEBA to the Board of Directors of Kaiser.
8. Survival of Existing Indemnities. The existing rights to
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indemnification in favor of the present or former directors, officers, employees
and agents of Kaiser (from November 1, 1988, forward only) and its subsidiaries
shall survive the Transaction and shall continue in full force and effect
following the date hereof. For at least four years after the date thereof, (i)
Kaiser shall use commercially reasonable efforts to maintain policies of
directors' and officers' liability insurance providing coverage of no less than
$15,000,000 with respect to matters existing or occurring at or prior to the
date thereof and (ii) will include the former VEBA representatives on the Board
of Directors of Kaiser as beneficiaries under any directors' and officers'
liability insurance policy which is obtained by Kaiser.
9. Nature and Survival of Representations. Subject to Paragraph 10, all
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representations, warranties and covenants made by any party in this Agreement
shall survive the closing hereunder and the consummation of the Transaction,
regardless of any facts that come to the attention of the party.
10. Right of Indemnification. Each party (the "Indemnifying Party") shall
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indemnify and hold the other party (the "Indemnified Party") harmless from and
against all costs and expenses (including reasonable attorneys' fees), damages
and losses ("Losses") arising out of or resulting from a breach of any
representation, warranty or covenant made by the Indemnifying Party in this
Agreement. Except with respect to claims for actual fraud, which may be made
without regard to any limitation, (i) each party shall be required to indemnify
the other only to the extent that the aggregate amount of Losses for which it
must provide indemnity exceeds $10,000 and (ii) the aggregate recoveries from
either party may each not exceed an aggregate of the Purchase Price as a result
of all Losses under this Agreement or with respect to the Transaction. If any
claim is asserted or any action or proceeding is brought in respect of which
indemnity may be sought, the Indemnified Party will promptly notify the
Indemnifying Party in writing of such asserted claim or the institution of such
action or proceeding; provided, however, that the Indemnified Party's failure to
so notify the Indemnifying Party will not relieve the Indemnifying Party from
any liability it might otherwise have on account of this indemnity, except to
the extent that the Indemnifying Party has been materially prejudiced by such
failure to notify. The Indemnifying Party may, at its option, undertake full
responsibility for the defense of any third-party claim which, if successful,
would result in an obligation of indemnity under this Agreement. The
Indemnifying Party may contest or settle any such claim on such terms as the
Indemnifying Party
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may choose, provided that the Indemnifying Party will not have the right,
without the Indemnified Party's prior written consent, to settle any such claim
if such settlement (i) arises from or is part of any criminal action, suit or
proceeding, (ii) contains a stipulation to, confession of judgement with respect
to, or admission or acknowledgement of, any liability or wrongdoing on the part
of the Indemnified Party, (iii) relates to any tax matters, (iv) provides for
injunctive relief, or other relief or finding other than money damages, which is
binding on the Indemnified Party, or (v) does not contain an unconditional
release of the Indemnified Party. Such defense will be conducted by reputable
attorneys retained by the Indemnifying Party at the Indemnifying Party's cost
and expense, but the Indemnified Party will have the right to participate in
such proceedings and to be separately represented by attorneys of its own
choosing. The Indemnified Party will be responsible for the costs of such
separate representation. The Indemnifying Party and the Indemnified Party shall
cooperate in determining the validity of any third-party claim for any Loss for
which a claim of indemnification may be made hereunder. Each party shall also
use all reasonable efforts to minimize all Losses.
11. Miscellaneous Provisions.
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(a) Specific Performance. The parties hereto agree that irreparable
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damage would occur in the event that any of the provisions of this Agreement
were not performed by the applicable party hereto in accordance with the
specific terms of this Agreement or were otherwise breached. Each of the
parties hereto shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement by the other and to enforce specifically the terms
and provisions hereof in addition to any other remedy to which such party is
entitled at law or in equity, and each party waives the posting of any bond or
security in connection with any proceeding related thereto.
(b) Expenses. Except as may otherwise be provided herein, no party
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hereto shall be responsible for the payment of any other party's expenses
incurred in connection with this Agreement.
(c) Third Party Beneficiaries. Except as expressly provided in this
-------------------------
Agreement, the terms and provisions of this Agreement are intended solely for
the benefit of each party hereto and its respective successors and assigns, and
it is not the intention of the parties to confer third party beneficiary rights
upon any other person or entity.
(d) Further Assurances. At any time, and from time to time, after the
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date thereof, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to VEBA Shares or otherwise to carry out the intent and purposes of this
Agreement.
(e) Waiver. Any failure on the part of any party hereto to comply
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with any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
(f) Notices. All notices and other communications hereunder shall be
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in writing and shall be deemed to have been given if delivered in person or sent
by prepaid first class registered or certified mail, return receipt requested to
the respective principal offices of the parties hereto to the respective
principal offices of the parties hereto as specified below:
If to Kaiser: Kaiser Ventures Inc.
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3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Attention: President
With a copy to:
Terry L. Cook, Esq.
Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Telephone: (909) 483-8500
Facsimile: (909) 944-6605
If to VEBA: The New Kaiser Voluntary Employees'
Beneficiary Association
9810 Sierra Avenue, Suite A
Fontana, CA 92335
Telephone: (909) 356-3663
Facsimile: (909)356-4672
Any notice or communication mailed shall also be faxed to the appropriate
number specified above.
(g) Interpretation. In this Agreement the singular included the
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plural and the plural the singular; words importing any gender include the other
genders; references to statutes are to be construed as including all statutory
provisions consolidating, amending or replacing the statute referred to;
references to "writing," include printing, typing, lithography and other means
of reproducing words in a tangible visible form; the word "including,"
"includes" and "include" are deemed to be followed by the words "but not limited
to"; and references to paragraphs (or subdivisions of paragraphs) recitals or
exhibits are to those of this Agreement unless otherwise indicated. The
language used in this Agreement will be deemed to be the language chosen by the
parties to this Agreement to express their mutual intent, and no rule of strict
construction shall be applied against any party.
(h) Counterparts. This Agreement may be executed simultaneously in
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two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(i) Governing Law. This Agreement shall be governed by, and
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interpreted in accordance with, the laws of the State of Delaware, without
regard to the conflict of law principles thereof. All actions and proceedings
arising out of or relating to this Agreement shall be heard and determined in
any state or Federal court sitting in Delaware. Each of the parties hereto (i)
consents to
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submit such party to the personal jurisdiction of any Federal court located in
the State of Delaware or any Delaware state court in the event any dispute
arises out of this Agreement or any of the transactions contemplated hereby;
(ii) agrees that such party will not attempt to deny or defeat such personal
jurisdiction by motion or other request for leave from any such court; (iii)
agrees that such party will not bring any action relating to this Agreement or
the transactions contemplated hereby in any court other than a Federal court
sitting in the State of Delaware or a Delaware state court; and (iv) waives any
right to trial by jury with respect to any claim or proceeding related to or
arising out of this Agreement or any of the transactions contemplated hereby.
(j) Binding Effect. This Agreement shall be binding upon the parties
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hereto and inure to the benefit of the parties, their respective successors and
assigns.
(k) Entire Agreement. This Agreement and the exhibits to be attached
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hereto constitute the entire agreement of the parties covering everything agreed
upon or understood in the Transaction. The parties are executing and carrying
out this Agreement in reliance solely on the representations, warranties and
covenants and agreements contained in this Agreement and in the written
documents contemplated by this Agreement. This Agreement may not be amended or
modified except by a written document executed by Kaiser and VEBA.
(l) Enforcement Costs. In the event of any legal proceeding to
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enforce any of the terms hereof, the prevailing party shall be entitled to
receive payment for its attorneys' fees and all other costs required to enforce
its rights hereunder.
(m) Regulatory Filings. Each party shall be reasonable for completing
------------------
and filing any regulatory filings that may be applicable to it, including, but
not limited to, any filings with the Securities and Exchange Commission.
(n) Good Faith. The parties agree to seek in good faith to seek to
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consummate the Transaction.
(o) Public Announcements. Neither party shall make any public
--------------------
announcements concerning this Agreement or the Transactions contemplated herein
without prior written consent of the other party except as required by law,
regulation or court order; provided however that in any case any party required
to make a public announcement shall notify the other, and shall reasonably
cooperate with that other party in making such required disclosure.
(p) Severability. The validity, legality or enforceability of the
------------
remainder of this Agreement shall not be affected even if one or more of the
provisions of this Agreement shall be held to be invalid, illegal or
unenforceable in any respect. To the extent permitted by applicable law, the
parties hereby waive any provision of law that would render any provision hereof
prohibited or unenforceable in any respect.
(q) Headings. The headings in this Agreement are inserted only as a
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matter of convenience, and in no way define, limit, or extend or interpret the
scope of this Agreement or of any particular paragraph.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the day and year first above written.
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"VEBA" "Kaiser"
New Kaiser Voluntary Employees' Kaiser Ventures Inc.
Beneficiary Association
By: /s/ Ronald E. Bitonti By: /s/ Richard E. Stoddard
---------------------------- ----------------------------
Ronald E. Bitonti Richard E. Stoddard
Chairman, Administrative Committee President, Chief Executive
Officer
& Chairman of the Board
By: Wells Fargo Bank of California, as trustee
By: /s/ Mario Gonzalez
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Mario Gonzalez
Assistant Vice President
Institutional Trust Group
By: /s/ Susanna Ryan
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Susanna Ryan
Vice President and Area Manager
Los Angeles Office
Institutional Trust Group
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EXHIBIT 2.2
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Stock Purchase Agreement
========================
This STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into this
22nd day of November, 1999, by and between KAISER VENTURES INC., a Delaware
corporation, ("Kaiser") and the Pension Benefit Guaranty Corporation ("PBGC").
Recitals
A. PBGC owns shares of the $.03 par value common stock of Kaiser which
PBGC received in connection with the Chapter 11 bankruptcy reorganization of
Kaiser Steel Corporation.
B. The Board of Directors of Kaiser, having considered the
recommendations of its duly authorized Independent Special Committee, has
determined that the acquisition by Kaiser of the PBGC Shares (as defined below)
is in the best interests of the nonselling shareholders of Kaiser.
C. The parties desire to enter this Agreement and to pursue the
transaction contemplated hereby (the "Transaction") pursuant to which Kaiser
will purchase 1,693,551 shares of the Kaiser common stock (the "PBGC Shares")
owned by PBGC upon the terms and conditions of this Agreement.
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
parties hereto agree as follows:
1. Purchase and Sale of Shares. Subject to the terms and conditions of
---------------------------
this Agreement, Kaiser hereby purchases from PBGC, and PBGC hereby sells to
Kaiser, the PBGC Shares.
2. Purchase Price and Payment Terms. The purchase price payable by
---------------------------------
Kaiser to PBGC for the PBGC Shares (the "Purchase Price") consists of (i) a
fixed per share payment (ii) Warrants, and (iii) a contingent payment, which is
being paid as follows:
2.1 Fixed Payment. A fixed payment of $13.00 per share for a total
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fixed purchase price of $22,016,163 paid by wire transfer of immediately
available funds contemporaneously herewith.
2.2 Warrant. Contemporaneously herewith, Kaiser is delivering to
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PBGC a warrant, in the form attached hereto as Exhibit A (the "Warrant"), to
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purchase 285,260 shares of Kaiser Common Stock.
2.3 Contingent Payment. In addition, PBGC will have the right to
------------------
receive a contingent payment (the "Contingent Payment") on the terms and
conditions of the Contingent Payment Agreement in the form attached hereto as
Exhibit B.
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3. Representations and Warranties of Kaiser. Kaiser represents and
----------------------------------------
warrants to PBGC:
(a) Organization and Authorization. Kaiser has been duly
------------------------------
incorporated, is
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validly existing and in good standing under the laws of the State of Delaware.
The execution, delivery and performance of this Agreement, the Warrant, the
Contingent Payment Agreement and the Registration Rights Agreement (as hereafter
defined) have been duly authorized by all requisite action. No charter, bylaw,
material agreement, material document or material instrument of any kind of
which Kaiser is a party or by which it may be bound would be violated by the
Transaction. Kaiser has full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder. This Agreement, the Warrant,
the Contingent Payment Agreement and the Registration Rights Agreement
constitute the valid and legally binding obligation of Kaiser, enforceable in
accordance with its terms and conditions, subject to bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting or relating to
creditors' rights generally. Kaiser need not give any notice to, make any filing
with, or obtain any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement. The Transaction does not contravene any applicable law, rule, or
regulation or any order or decree binding on Kaiser. A true and correct copy of
the resolutions of the Independent Committee of the Board of Directors of Kaiser
and those of the Board of Directors of Kaiser approving the Transaction had
previously been delivered to PBGC and are attached to the opinion of counsel
provided to PBGC. Prior to adopting those resolutions, the Independent Committee
and the Board of Directors of Kaiser received an opinion from Merrill Lynch as
to the fairness of the Transaction to the nonselling shareholders of Kaiser.
(b) Consents. Kaiser has obtained any necessary third party consent
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or approval that may be required to be obtained by it to complete the
Transaction.
(c) Brokers. Except for Merrill Lynch, whose fees shall be the sole
-------
obligation of Kaiser, Kaiser has not employed any broker or finder in connection
with the Transaction, and shall hold PBGC harmless from any liability or loss as
a result of or in connection with any brokerage or finder's fee or other
commission of any person retained by Kaiser in connection with the Transaction.
(d) No Material Adverse Changes. Since December 31, 1998, there has
---------------------------
not been any material adverse changes in the business, financial condition,
operations, results of operations, or future prospects of Kaiser and no material
transactions involving Kaiser are pending including any material transactions
involving Mine Reclamation Corporation or Mill Site, except as disclosed (a) to
the public in press releases or filings with the Securities and Exchange
Commission or (b) to the representatives of the PBGC in writing at the Board of
Directors meeting at which this Agreement was approved.
4. Representations and Warranties of PBGC. PBGC hereby represents and
--------------------------------------
warrants to Kaiser as follows:
(a) Organization and Authorization. PBGC is a corporation that has
------------------------------
been duly formed, is validly existing and in good standing under federal law.
The execution, delivery and performance of this Agreement and the Registration
Rights Agreement have been duly authorized by all requisite action as necessary.
No trust document, bylaw, material agreement, material document, or material
instrument of any kind of which PBGC is party or by which it may be bound would
be violated by the Transaction. This Agreement and the Registration Rights
Agreement constitute the valid and legally binding obligation of PBGC,
enforceable in accordance with its terms and conditions, subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting or
relating to creditors' rights generally. PBGC need not give any notice to, make
any filing with, or obtain any
2
<PAGE>
authorization, consent, or approval of any government or governmental agency in
order to consummate the transactions contemplated by this Agreement. The
Transaction does not contravene any applicable law, rule, or regulation or any
order or decree binding on PBGC.
(b) Consents. PBGC has obtained any necessary third party consent or
--------
approval that may be required to be obtained by it to complete the Transaction.
(c) Ownership. PBGC is the record and beneficial owner of 2,100,966
---------
shares of the common stock of Kaiser, including the PBGC Shares. PBGC has and
Kaiser will receive title to the PBGC Shares, free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal, agreements,
charges or other encumbrances of any nature whatsoever.
(d) Warrant Representations. The Warrant and the Shares for which it
-----------------------
is being exercisable are being acquired for investment for PBGC's own account,
not as a nominee or agent, and not with a view to the sale or distribution of
all or any part thereof in violation of applicable securities laws. PBGC has
the requisite knowledge and experience to assess the relative merits and risks
of an acquisition of the Warrant and such shares. PBGC is an "accredited
investor" as that term is defined by Rule 501(a) promulgated under the
Securities Exchange Act of 1933, as amended. The PBGC understands that each
certificates for the Warrant and such shares may be legended as a result of the
application of Securities and Exchange Commission Rule 144.
(e) Authority of Pacholder Associates, Inc. The PBGC has appointed
--------------------------------------
Pacholder Associates, Inc. ("Pacholder") as the PBGC's agent with respect to the
matters contemplated by this Agreement, with full authority to act on behalf of
the PBGC.
(f) Brokers. Except with respect to its agreement with Pacholder,
-------
PBGC has not employed any broker or finder in connection with the Transaction,
and shall hold Kaiser harmless from any liability or loss as a result of or in
connection with any brokerage or finder's fee or other commission of any person
retained by PBGC in connection with the Transaction.
5. Other Documents.
---------------
(a) Legal Opinion from PBGC's Counsel. Kaiser has received a legal
---------------------------------
opinion from PBGC's legal counsel to the effect that: (a) this Agreement and
the Registration Rights Agreement have been duly authorized by required legal
action on the part of PBGC; (b) the Transaction does not contravene any
applicable law, rule, or regulation or any order or decree binding on PBGC; and
(c) the completion of the Transaction on the part of PBGC does not require the
consent or authorization of any governmental authority that has not been
obtained.
(b) Legal Opinion from Kaiser's Counsel. PBGC has received a legal
-----------------------------------
opinion from Kaiser's legal counsel to the effect that: (a) this Agreement, the
Warrant, the Contingent Payment Agreement and the Registration Rights Agreement
have been authorized by required legal action on the part of Kaiser; (b) the
Transaction does not contravene any applicable law, rule, or regulation or any
order or decree binding on Kaiser; and (c) the completion of the Transaction on
the part of Kaiser does not require the consent or authorization of any
governmental authority that has not been obtained.
6. Limited Stock Lock-Up. PBGC agrees that, without the prior written
---------------------
consent of
3
<PAGE>
Kaiser, which consent Kaiser may grant or deny in its sole and absolute
discretion, PBGC will not offer, sell, contract to sell, pledge or otherwise
dispose of ("Transfer"), directly or indirectly, any shares of: (i) Kaiser
Common Stock or (ii) any securities convertible into or exercisable or
exchangeable for Kaiser Common Stock, nor will it publicly disclose the
intention to make any such Transfer, for a period of 180 days after the dates
thereof as specified in this Agreement. Kaiser and its transfer agent and
registrar are hereby authorized by PBGC to decline to make any Transfer of
shares of Kaiser Common Stock if such Transfer would constitute a violation or
breach of this Agreement. A copy of this paragraph shall be sufficient notice of
these restrictions to Kaiser's stock transfer agent and registrar. In addition,
Kaiser and PBGC are entering into the Registration Rights Agreement in the form
attached hereto as Exhibit C (the "Registration Rights Agreement").
---------
7. Resignations. On execution hereof, PBGC has delivered to Kaiser an
------------
executed irrevocable resignation for the PBGC affiliated individual currently
serving on Kaiser's Board of Directors.
8. Survival of Existing Indemnities. The existing rights to
--------------------------------
indemnification in favor of the present or former directors, officers, employees
and agents of Kaiser (from November 1, 1988, forward only) and its subsidiaries
shall survive the Transaction and shall continue in full force and effect
following the date hereof. For at least four years after the date thereof,
Kaiser (i) shall use commercially reasonable efforts to maintain policies of
directors' and officers' liability insurance providing coverage of no less than
$15,000,000 with respect to matters existing or occurring at or prior to the
date thereof and (ii) will include the former PBGC representative on the Board
of Directors of Kaiser as beneficiaries under any directors' and officers'
liability insurance policy which is obtained by Kaiser.
9. Nature and Survival of Representations. Subject to Paragraph 10, all
--------------------------------------
representations, warranties and covenants made by any party in this Agreement
shall survive the closing hereunder and the consummation of the Transaction,
regardless of any facts that come to the attention of the party.
10. Right of Indemnification. Each party (the "Indemnifying Party") shall
------------------------
indemnify and hold the other party (the "Indemnified Party") harmless from and
against all costs and expenses (including reasonable attorneys' fees), damages
and losses ("Losses") arising out of or resulting from a breach of any
representation, warranty or covenant made by the Indemnifying Party in this
Agreement. Except with respect to claims for actual fraud, which may be made
without regard to any limitation, (i) each party shall be required to indemnify
the other only to the extent that the aggregate amount of Losses for which it
must provide indemnity exceeds $10,000 and (ii) the aggregate recoveries from
either party may each not exceed an aggregate of the Purchase Price as a result
of all Losses under this Agreement or with respect to the Transaction. If any
claim is asserted or any action or proceeding is brought in respect of which
indemnity may be sought, the Indemnified Party will promptly notify the
Indemnifying Party in writing of such asserted claim or the institution of such
action or proceeding; provided, however, that the Indemnified Party's failure to
so notify the Indemnifying Party will not relieve the Indemnifying Party from
any liability it might otherwise have on account of this indemnity, except to
the extent that the Indemnifying Party has been materially prejudiced by such
failure to notify. The Indemnifying Party may, at its option, undertake full
responsibility for the defense of any third-party claim which, if successful,
would result in an obligation of indemnity under this Agreement. The
Indemnifying Party may contest or settle any such claim on such terms as the
Indemnifying Party may choose, provided that the Indemnifying Party will not
have the right, without the Indemnified
4
<PAGE>
Party's prior written consent, to settle any such claim if such settlement (i)
arises from or is part of any criminal action, suit or proceeding, (ii) contains
a stipulation to, confession of judgement with respect to, or admission or
acknowledgement of, any liability or wrongdoing on the part of the Indemnified
Party, (iii) relates to any tax matters, (iv) provides for injunctive relief, or
other relief or finding other than money damages, which is binding on the
Indemnified Party, or (v) does not contain an unconditional release of the
Indemnified Party. Such defense will be conducted by reputable attorneys
retained by the Indemnifying Party at the Indemnifying Party's cost and expense,
but the Indemnified Party will have the right to participate in such proceedings
and to be separately represented by attorneys of its own choosing. The
Indemnified Party will be responsible for the costs of such separate
representation. The Indemnifying Party and the Indemnified Party shall cooperate
in determining the validity of any third-party claim for any Loss for which a
claim of indemnification may be made hereunder. Each party shall also use all
reasonable efforts to minimize all Losses.
11. Miscellaneous Provisions.
-----------------------
(a) Specific Performance. The parties hereto agree that irreparable
--------------------
damage would occur in the event that any of the provisions of this Agreement
were not performed by the applicable party hereto in accordance with the
specific terms of this Agreement or were otherwise breached. Each of the
parties hereto shall be entitled to an injunction or injunctions to prevent
breaches of this Agreement by the other and to enforce specifically the terms
and provisions hereof in addition to any other remedy to which such party is
entitled at law or in equity, and each party waives the posting of any bond or
security in connection with any proceeding related thereto.
(b) Expenses. Except as may otherwise be provided herein, no party
--------
hereto shall be responsible for the payment of any other party's expenses
incurred in connection with this Agreement.
(c) Third Party Beneficiaries. Except as expressly provided in this
-------------------------
Agreement, the terms and provisions of this Agreement are intended solely for
the benefit of each party hereto and its respective successors and assigns, and
it is not the intention of the parties to confer third party beneficiary rights
upon any other person or entity.
(d) Further Assurances. At any time, and from time to time, after the
------------------
date thereof, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to PBGC Shares or otherwise to carry out the intent and purposes of this
Agreement.
(e) Waiver. Any failure on the part of any party hereto to comply
------
with any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
(f) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed to have been given if delivered in person or sent
by prepaid first class registered or certified mail, return receipt requested to
the respective principal offices of the parties hereto to the respective
principal offices of the parties hereto as specified below:
If to Kaiser: Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
5
<PAGE>
Suite 850
Ontario, California 91764
Attention: President
With a copy to:
Terry L. Cook, Esq.
Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Telephone: (909) 483-8500
Facsimile: (909) 944-6605
If to PBGC: Pension Benefit Guaranty Corporation
c/o Pacholder Associates, Inc., as Agent
8044 Montgomery Road, Suite 480
Cincinnati, Ohio 45236
Attention: Thomas M. Barnhart, II
Senior Vice President and
Associate General Counsel
Telephone: (513) 381-2838
Facsimile: (513) 985-3217
With a copy to:
Timothy E. Hoberg, Esq.
Taft, Stettinius & Hollister
1800 Firstar Tower
425 Walnut Street,
Cincinnati, Ohio 45202
Telephone: (513) 381-2838
Facsimile: (513) 381-0205
Any notice or communication mailed shall also be faxed to the appropriate
number specified above.
(g) Interpretation. In this Agreement the singular included the
--------------
plural and the plural the singular; words importing any gender include the other
genders; references to statutes are to be construed as including all statutory
provisions consolidating, amending or replacing the statute referred to;
references to "writing," include printing, typing, lithography and other means
of reproducing words in a tangible visible form; the word "including,"
"includes" and "include" are deemed to be followed by the words "but not limited
to"; and references to paragraphs (or subdivisions of paragraphs) recitals or
exhibits are to those of this Agreement unless otherwise indicated. The
language used in this Agreement will be deemed to be the language chosen by the
parties to this
6
<PAGE>
Agreement to express their mutual intent, and no rule of strict construction
shall be applied against any party.
(h) Counterparts. This Agreement may be executed simultaneously in
------------
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(i) Governing Law. This Agreement shall be governed by, and
-------------
interpreted in accordance with, the laws of the State of Delaware, without
regard to the conflict of law principles thereof. All actions and proceedings
arising out of or relating to this Agreement shall be heard and determined in
any state or Federal court sitting in Delaware. Each of the parties hereto (i)
consents to submit such party to the personal jurisdiction of any Federal court
located in the State of Delaware or any Delaware state court in the event any
dispute arises out of this Agreement or any of the transactions contemplated
hereby; (ii) agrees that such party will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court;
(iii) agrees that such party will not bring any action relating to this
Agreement or the transactions contemplated hereby in any court other than a
Federal court sitting in the State of Delaware or a Delaware state court; and
(iv) waives any right to trial by jury with respect to any claim or proceeding
related to or arising out of this Agreement or any of the transactions
contemplated hereby.
(j) Binding Effect. This Agreement shall be binding upon the parties
--------------
hereto and inure to the benefit of the parties, their respective successors and
assigns.
(k) Entire Agreement. This Agreement and the exhibits to be attached
----------------
hereto constitute the entire agreement of the parties covering everything agreed
upon or understood in the Transaction. The parties are executing and carrying
out this Agreement in reliance solely on the representations, warranties and
covenants and agreements contained in this Agreement and in the written
documents contemplated by this Agreement. This Agreement may not be amended or
modified except by a written document executed by Kaiser and PBGC.
(l) Enforcement Costs. In the event of any legal proceeding to
-----------------
enforce any of the terms hereof, the prevailing party shall be entitled to
receive payment for its attorneys' fees and all other costs required to enforce
its rights hereunder.
(m) Regulatory Filings. Each party shall be reasonable for completing
------------------
and filing any regulatory filings that may be applicable to it, including, but
not limited to, any filings with the Securities and Exchange Commission.
(n) Good Faith. The parties agree to seek in good faith to seek to
----------
consummate the Transaction.
(o) Public Announcements. Neither party shall make any public
--------------------
announcements concerning this Agreement or the Transactions contemplated herein
without prior written consent of the other party except as required by law,
regulation or court order; provided however that in any case any party required
to make a public announcement shall notify the other, and shall reasonably
cooperate with that other party in making such required disclosure.
(p) Severability. The validity, legality or enforceability of the
------------
remainder of this
7
<PAGE>
Agreement shall not be affected even if one or more of the provisions of this
Agreement shall be held to be invalid, illegal or unenforceable in any respect.
To the extent permitted by applicable law, the parties hereby waive any
provision of law that would render any provision hereof prohibited or
unenforceable in any respect.
(q) Headings. The headings in this Agreement are inserted only as a
--------
matter of convenience, and in no way define, limit, or extend or interpret the
scope of this Agreement or of any particular paragraph.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the day and year first above written.
"PBGC" "Kaiser"
Pension Benefit Guaranty Corporation Kaiser Ventures Inc.
By: Pacholder Associates, Inc., as Agent
By: /s/ Thomas M. Barnhart, III By: /s/ Richard E. Stoddard
-------------------------------- -------------------------
Thomas M. Barnhart, II Richard E. Stoddard
Senior Vice President and President, Chief Executive
Associate General Counsel Officer & Chairman of the
Board
8
<PAGE>
EXHIBIT 4.1
-----------
KAISER VENTURES INC.
STOCK PURCHASE WARRANT
THE WARRANTS EVIDENCED HEREBY AND THE SHARES OF STOCK ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
OFFERED OR SOLD WITHOUT REGISTRATION UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE UNDER SUCH ACT OR THE RULES OR
REGULATIONS PROMULGATED THEREUNDER
Expiration Date: September 30, 2004
WARRANT TO PURCHASE
460,000
SHARES OF COMMON STOCK
AS DESCRIBED HEREIN
This certifies that, for value received, New Kaiser Employees' Voluntary
Benefit Association, a tax exempt trust formed pursuant to Section 501(a) and
501(c)(9) of the Internal Revenue Code of 1986, as amended, or its successors
and assigns ("Holder"), is entitled to purchase from Kaiser Ventures Inc., a
Delaware corporation (the "Company"), up to and including Four Hundred Sixty
Thousand (460,000) fully paid and nonassessable shares (the "Number of Shares")
of the common stock, $.03 per share, of the Company (the "Common Stock") on the
terms set forth herein. The exercise price (the "Purchase Price") shall be
$17.00 per share. The Number of Shares and the Purchase Price may be adjusted
from time to time as described in this Warrant.
1. Exercise.
--------
Time for Exercise. This Warrant may be exercised in whole or in part at
-----------------
any time, and from time to time, during the period commencing on the date
hereof and expiring on September 30, 2004.
1.1 Manner of Exercise. This Warrant shall be exercised by delivering it to
------------------
the Company with the attached exercise form duly completed and signed,
specifying (i) the number of shares as to which the Warrant is being exercised
at that time (the "Exercise Number"), and (ii) whether the Holder wishes the
exercise to be made by "purchase" or "exchange".
1.1.1 Purchase. If the Holder elects the purchase option, the Holder
--------
shall deliver to the Company cash or a certified check in an amount equal to the
Exercise Number multiplied by the Purchase Price within five (5) business days
of the exercise, and the Holder shall be entitled to receive the full Exercise
Number of shares of Common Stock.
<PAGE>
1.1.2 Exchange. If the Holder elects the exchange option, the Holder
--------
shall be entitled (without cash payment) to receive that number of shares of
Common Stock having an aggregate Market Value on the date of exercise equal to
the difference between the Market Value of the Exercise Number of shares and the
aggregate Purchase Price thereof. For purposes of this Section 1.1.2, "Market
Value" means on any given date means (i) the average closing price of the Common
Stock for the prior ten trading days on which the stock actually traded on the
principal stock exchange on which the Common Stock is then traded or (ii) if not
so traded, the closing (or, if no closing price is available, the average of the
bid and asked prices) for such period on the NASDAQ if such the Common Stock is
listed on NASDAQ or (iii) if not listed on any exchange or quoted on the NASDAQ,
the Company's board of directors shall provide Holder with a good faith
determination of value, and Holder may either accept such determination or
request a determination by a mutually acceptable investment banking firm, whose
fees will be paid by the Holder unless the Market Price so determined exceeds
110% of that set by the Board.
1.2 Effect of Exercise. Promptly (but in any case within five business
------------------
days) after any exercise, the Company shall deliver to the Holder (i) duly
executed certificates in the name or names specified in the exercise notice
representing the aggregate number of shares issuable upon such exercise, and
(ii) if this Warrant is exercised only in part, a new Warrant of like tenor
representing the balance of the Number of Shares. Such certificates shall be
deemed to have been issued, and the person receiving them shall be deemed to be
a holder of record of such shares, as of the close of business on the date the
actions required in Section 1.1 shall have been completed or, if on that date
the stock transfer books of the Company are closed, as of the next business day.
2. Transfer of Warrants and Stock.
------------------------------
2.1 Transfer Restrictions. Neither this Warrant nor the securities issuable
---------------------
upon its exercise may be sold, transferred or pledged unless the Company shall
have been supplied with reasonably satisfactory evidence that such transfer is
not in violation of the Securities Act of 1933, as amended, and any applicable
state securities laws. The Company may place a legend to that effect on this
Warrant, any replacement Warrant and each certificate representing shares
issuable upon exercise of this Warrant. Subject to the satisfaction of this
condition only, this Warrant shall be freely transferable by the Holder.
2.2 Manner of Transfer. Upon delivery of this Warrant to the Company with
------------------
the attached assignment form duly completed and signed, the Company will
promptly (but in any case within five business days) execute and deliver to each
transferee and, if applicable, the Holder, Warrants of like tenor evidencing the
rights (i) of the transferee(s) to purchase the Number of Shares specified for
each in the assignment forms, and (ii) of the Holder to purchase any
untransferred portion, which in the aggregate shall equal the Number of Shares
of the original Warrant. The Company may decline to proceed with any partial
transfer if any new Warrant would represent the right to purchase fewer than one
thousand shares of Common Stock (such number to be adjusted as provided in
Section 4). If this Warrant is properly assigned in compliance with this Section
2, it may be exercised by an assignee without having a new Warrant issued.
2
<PAGE>
2.3 Loss, Destruction of Warrant Certificates. Upon receipt of (i) evidence
-----------------------------------------
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of any Warrant and (ii) except in the case of mutilation, an
indemnity or security reasonably satisfactory to the Company (the original
Holder's or any institutional Holder's indemnity agreed to be satisfactory), the
Company will promptly (but in any case within five business days) execute and
deliver a replacement Warrant of like tenor representing the right to purchase
the same Number of Shares.
3. Cost of Issuances. The Company shall pay all expenses, transfer taxes and
-----------------
other charges payable in connection with the preparation, issuance and delivery
of stock certificates or replacement Warrants, except for any transfer tax or
other charge imposed as a result of (i) any issuance of stock certificates in
any name other than the name of the Holder upon exercise of the Warrant or (ii)
any transfer of the Warrant. The Company shall not be required to issue or
deliver any stock certificate or Warrant until it receives reasonably
satisfactory evidence that any such tax or other charge has been paid by the
Holder.
4. Anti-Dilution Provisions. If any of the following events occur at any time
------------------------
hereafter during the life of this Warrant, then the Purchase Price and the
Number of Shares immediately prior to such event shall be changed as described
in order to prevent dilution:
4.1 Stock Splits and Reverse Splits. If at any time the outstanding shares
-------------------------------
of Common Stock are subdivided into a greater number of shares, then the
Purchase Price will be reduced proportionately and the Number of Shares will be
increased proportionately. Conversely, if at any time the outstanding shares of
Common Stock are consolidated into a smaller number of shares, then the Purchase
Price will be increased proportionately and the Number of Shares will be reduced
proportionately.
4.2 Dividends. In the event the Company declares a dividend upon the Common
---------
Stock whether in cash, property or securities (except for cash dividends not in
excess of the per share amount paid by the Company under that certain Contingent
Payment Agreement between the Company and the initial Holder dated as of
November 17, 1999), at the time of subsequent exercise of this Warrant, the
Company shall deliver both (i) the Number of Shares for which exercise is made
plus (ii) such dividends as would have been previously distributed to the Holder
if such exercise had been made on the date hereof. If the Company shall declare
a dividend payable in cash on its Common Stock and shall at substantially the
same time offer to its shareholders a right to purchase new Common Stock from
the proceeds of such dividend, or for an amount substantially equal to the
dividend, the amount of Common Stock so offered shall, for the purpose of this
Warrant, be deemed to have been issued as a stock dividend.
4.3 Effect of Reorganization and Asset Sales. If any (i) reorganization or
----------------------------------------
reclassification of the Common Stock, (ii) consolidation or merger of the
Company with or into another corporation, (iii) sale of all or substantially all
of its operating assets to another corporation, or (iv) sale of the Company
substantially as a going concern followed by a liquidation of the Company (any
such occurrence shall be an "Event"), is effected in such a way that holders of
Common Stock are entitled to receive securities and/or assets as a result of
their
3
<PAGE>
Common Stock ownership, then upon exercise of this Warrant the Holder will
have the right to receive the shares of stock, securities or assets which they
would have received if such rights had been fully exercised as of the record
date for such Event. The Company will not effect any Event unless prior to or
simultaneously with its consummation the successor corporation resulting from
the consolidation or merger (if other than the Company), or the corporation
purchasing the Company's assets, assumes the performance of the Company's
obligations under this Warrant (as appropriately adjusted to reflect such
consolidation, merger or sale such that the Holder's rights under this Warrant
remain, as nearly as practicable, unchanged) by a binding written instrument.
4.4 Other Securities Adjustments. If as a result of this Section 4, a
----------------------------
Holder is entitled to receive any securities other than Common Stock upon
exercise of this Warrant, the number and purchase price of such securities shall
thereafter be adjusted from time to time in the same manner as provided pursuant
to this Section 4 for Common Stock. To the extent that a Right receivable on
exercise of this Warrant has lapsed or been lost prior to the date of exercise,
on exercise the Company shall pay in cash an amount equal to the Market Value of
the Right which lapsed or was lost, determined as of the time which such Right
lapsed or was lost. The allocation of purchase price between various securities
shall be made in writing by the Board of Directors of the Company in good faith
at the time of the event by which the Holder become entitled to receive new
securities, and a copy sent to the Holder.
4.5 Notices.
-------
4.5.1 Notice of Adjustments. When any adjustment is required to be
---------------------
made under this Section 4, the Company shall promptly (i) determine such
adjustments, (ii) prepare and retain on file a statement describing in
reasonable detail the method used in arriving at the adjustment; and (iii) cause
a copy of such statement, together with any agreement required by Section 4.3,
to be mailed to the Holder within 10 days after the date on which the
circumstances giving rise to such adjustment occurred.
4.5.2 Notice of Events. If at any time (i) the Company declares any
----------------
dividends on the Common Stock, (ii) any Event is expected to occur, or (iii)
there is a voluntary or involuntary dissolution, liquidation or winding up of
the Company, then the Company shall give the Holder at least thirty (30) but not
more than ninety (90) days written notice of the date on which the books of the
Company will close or upon which a record will be taken with regard to such
occurrence. Such notice will also specify the date as of which the holders of
the Common Stock will participate in the dividend or will be entitled to
exchange their shares for securities or other property. The notice may state
that the record date is subject to the effectiveness of a registration statement
under the Securities Act or to a favorable vote or determination of shareholders
or of any governmental agency.
4.6 Computations and Adjustments. Upon each computation of an adjustment
----------------------------
under this Section 4, the Purchase Price shall be computed to the next lowest
cent and the Number of Shares shall be calculated to the next highest whole
share. However, the fractional amount shall be used in calculating any future
adjustments. No fractional shares of Common Stock shall be issued in connection
with the exercise of this Warrant, but the Company shall, in
4
<PAGE>
the case of the final exercise under this Warrant, make a cash payment for any
fractional shares based on the closing price on the date of exercise of a share
of Common Stock on the principal exchange or system on which the Common Stock is
listed or traded (or, if not then listed or traded thereon, the mean of the
closing bid and asked prices on an automated quotation system, or, if such
quotations are not available, such value (determined without discount for
illiquidity or minority status) as may be determined in good faith by the
Company's Board of Directors, which determination shall be conclusively binding
on the parties). Notwithstanding any changes in the Purchase Price or the Number
of Shares, this Warrant, and any Warrants issued in replacement or upon transfer
thereof, may continue to state the initial Purchase Price and the initial Number
of Shares. Alternatively, the Company may elect to issue a new Warrant or
Warrants of like tenor for the additional shares of Common Stock purchasable
hereunder or, upon surrender of the existing Warrant, to issue a replacement
Warrant evidencing the aggregate Number of Shares to which the Holder is
entitled after such adjustments.
4.7 Exercise Before Payment Date. In the event that this Warrant is
----------------------------
exercised after the record date for any event requiring an adjustment, but prior
to the actual event, the Company may elect to defer issuing to the Holder any
payment or additional securities required by such adjustment until the actual
event occurs; provided, however, that the Company shall deliver a "due bill" or
other appropriate instrument to the Holder transferable to the same extent as
the Common Stock issuable on exercise evidencing the Holder's right to receive
such additional payment or securities upon the occurrence of the event requiring
such adjustment.
5. Covenants. The Company agrees that:
---------
5.1 Reservation of Stock. During the period in which this Warrant may be
--------------------
exercised, the Company will reserve sufficient authorized but unissued
securities (and, if applicable, property) to enable it to satisfy its
obligations on exercise of this Warrant. If at any time the Company's authorized
securities shall not be sufficient to allow the exercise of this Warrant, the
Company shall take such corporate action as may be necessary to increase its
authorized but unissued securities to be sufficient for such purpose;
5.2 No Liens, etc. All securities that may be issued upon exercise of this
-------------
Warrant will, upon issuance, be validly issued, fully paid, nonassessable and
free from all taxes, liens and charges with respect to the issue thereof, and
shall be listed on any exchanges or authorized for trading on any automated
systems on which that class of securities is listed or authorized for trading;
5.3 Furnish Information. The Company will promptly deliver to the Holder
-------------------
copies of all financial statements, reports, proxy statements and other
information which the Company shall have sent to its shareholders generally; and
6. Status of Holder.
----------------
6.1 Not a Shareholder. Except as otherwise provided in this Warrant, unless
-----------------
the Holder exercises this Warrant in writing, the Holder shall not be entitled
to any rights (i) as a shareholder of the Company with respect to the shares as
to which the Warrant is exercisable
5
<PAGE>
including, without limitation, the right to vote or receive dividends or other
distributions, or (ii) to receive any notice of any proceedings of the Company.
6.2 Limitation of Liability. Unless the Holder exercises this Warrant in
-----------------------
writing, the Holder's rights and privileges hereunder shall not give rise to any
liability for the Purchase Price or as a shareholder of the Company, whether to
the Company or its creditors.
7. General Provisions.
------------------
7.1 Complete Agreement; Modifications. This Warrant and any documents
---------------------------------
referred to herein or executed contemporaneously herewith constitute the
parties' entire agreement with respect to the subject matter hereof and
supersede all agreements, representations, warranties, statements, promises and
understandings, whether oral or written, with respect to the subject matter
hereof. This Warrant may not be amended, altered or modified except by a writing
signed by the parties.
7.2 Additional Documents. Each party hereto agrees to execute any and all
--------------------
further documents and writings and to perform such other actions which may be or
become necessary or expedient to effectuate and carry out this Warrant.
7.3 Notices. All notices under this Warrant shall be in writing and shall
-------
be delivered by personal service, facsimile or certified mail (if certified mail
is not available, then by first class mail), postage prepaid, to such address as
may be designated from time to time by the relevant party, and which shall
initially be:
If to the Company: Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Attention: President
With a copy to:
Terry L. Cook, Esq.
Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Telephone: (909) 483-8500
Facsimile: (909) 944-6605
If to Holder: The New Kaiser Voluntary
Employees' Beneficiary Association
9810 Sierra Avenue, Suite A
Fontana, CA 92335
6
<PAGE>
Telephone: (909) 356-3663
Facsimile: (909) 356-4672
Any notice sent by certified mail shall be deemed to have been given three
(3) days after the date on which it is mailed. All other notices shall be
deemed given when received. No objection may be made to the manner of delivery
of any notice actually received in writing by an authorized agent of a party.
7.4 No Third-Party Benefits; Successors and Assigns. None of the
-----------------------------------------------
provisions of this Warrant shall be for the benefit of, or enforceable by, any
third-party beneficiary. Except as provided herein to the contrary, this Warrant
shall be binding upon and inure to the benefit of the parties, their respective
successors and permitted assigns. The Holder may assign its rights and
obligations under this Warrant to any third party if done so in compliance with
the requirements of Section 2. The Company may only assign its rights and
obligations this Warrant in connection with a merger, consolidation or sale of
substantially all of its operating assets to the extent expressly permitted by,
and in compliance with all the requirements of, Section 4.3.
7.5 Waivers Strictly Construed. With regard to any power, remedy or right
--------------------------
provided herein or otherwise available to any party hereunder (i) no waiver or
extension of time shall be effective unless expressly contained in a writing
signed by the waiving party, and (ii) no alteration, modification or impairment
shall be implied by reason of any previous waiver, extension of time, delay or
omission in exercise, or other indulgence.
7.6 Severability. The validity, legality or enforceability of the remainder
------------
of this Warrant shall not be affected even if one or more of its provisions
shall be held to be invalid, illegal or unenforceable in any respect.
7
<PAGE>
7.7 Attorneys' Fees. Should any litigation or arbitration be commenced
---------------
(including any proceedings in a bankruptcy court) between the parties hereto or
their representatives concerning any provision of this Warrant or the rights and
duties of any person or entity hereunder, the party or parties prevailing in
such proceeding shall be entitled, in addition to such other relief as may be
granted, to the attorneys' fees and court costs incurred by reason of such
litigation or arbitration.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
effective as of November 22, 1999.
KAISER VENTURES, INC.
By: /s/ Richard E. Stoddard
-----------------------------
Richard Stoddard
Its President
Attest:
By: /s/ Terry L. Cook
-----------------------------
Terry L. Cook
Its Secretary
8
<PAGE>
ASSIGNMENT FORM
(To Be Executed Upon Transfer of Warrant)
FOR VALUE RECEIVED, ______________________________ hereby sells, assigns and
transfers to the transferee named below [the rights to purchase ___ of the
Number of Shares under] this Warrant, together with all rights, title and
interest therein. [The rights to purchase the remaining Number of Shares shall
remain the property of the undersigned.] [This includes a transfer of the
registration rights in the Warrant.]
[NAME OF HOLDER]
Dated: _______________ By:_________________________________________
Signature
Name:_______________________________________
(Please Print)
Title:______________________________________
Address:____________________________________
____________________________________
____________________________________
Employer Identification Number,
Social Security Number or other
identifying number:_________________________
TRANSFEREE:
Name:_______________________
(Please Print)
Address:____________________
____________________
____________________
Employer Identification Number,
Social Security Number or other
identifying number:_________
9
<PAGE>
EXERCISE FORM
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby exercises the Warrant with regard to _____________
shares of Common Stock and herewith [makes payment of the purchase price in
full] [or requests that the Company exchange the Warrant as provided in Section
1.1.2 of the Warrant]. The undersigned requests that the certificate(s) for such
shares [and the Warrant for the unexercised portion of this Warrant] be issued
[to the Holder] [in the name set forth below].
[NAME OF HOLDER]
Dated: __________________ By:__________________________________________
Signature
Name:_____________________________________
(Please Print)
Title:____________________________________
Address:__________________________________
__________________________________
__________________________________
Employer Identification Number,
Social Security Number or other
identifying number:_______________________
TRANSFEREE:
Name:________________________
(Please Print)
Address:_____________________
_____________________
_____________________
Employer Identification Number,
Social Security Number or other
identifying number:__________
10
<PAGE>
EXHIBIT 4.2
-----------
KAISER VENTURES INC.
STOCK PURCHASE WARRANT
THE WARRANTS EVIDENCED HEREBY AND THE SHARES OF STOCK ISSUABLE
UPON EXERCISE THEREOF HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
OFFERED OR SOLD WITHOUT REGISTRATION UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE UNDER SUCH ACT OR THE RULES OR
REGULATIONS PROMULGATED THEREUNDER
Expiration Date: September 30, 2004
WARRANT TO PURCHASE
285,260
SHARES OF COMMON STOCK
AS DESCRIBED HEREIN
This certifies that, for value received, the Pension Benefit Guaranty
Corporation or its successors and assigns ("Holder"), is entitled to purchase
from Kaiser Ventures Inc., a Delaware corporation (the "Company"), up to and
including Two Hundred Eighty-Five Thousand Two Hundred Sixty (285,260) fully
paid and nonassessable shares (the "Number of Shares") of the common stock, $.03
per share, of the Company (the "Common Stock") on the terms set forth herein.
The exercise price (the "Purchase Price") shall be $17.00 per share. The Number
of Shares and the Purchase Price may be adjusted from time to time as described
in this Warrant.
1. Exercise.
--------
1.1 Time for Exercise. This Warrant may be exercised in whole or in part
-----------------
at any time, and from time to time, during the period commencing on the date
hereof and expiring on September 30, 2004.
1.2 Manner of Exercise. This Warrant shall be exercised by delivering it
------------------
to the Company with the attached exercise form duly completed and signed,
specifying (i) the number of shares as to which the Warrant is being exercised
at that time (the "Exercise Number"), and (ii) whether the Holder wishes the
exercise to be made by "purchase" or "exchange".
1.2.1 Purchase. If the Holder elects the purchase option, the Holder
--------
shall deliver to the Company cash or a certified check in an amount equal to the
Exercise Number multiplied by the Purchase Price within five (5) business days
of the exercise, and the Holder shall be entitled to receive the full Exercise
Number of shares of Common Stock.
<PAGE>
1.2.2 Exchange. If the Holder elects the exchange option, the Holder
--------
shall be entitled (without cash payment) to receive that number of shares of
Common Stock having an aggregate Market Value on the date of exercise equal to
the difference between the Market Value of the Exercise Number of shares and the
aggregate Purchase Price thereof. For purposes of this Section 1.2.2, "Market
Value" means on any given date means (i) the average closing price of the Common
Stock for the prior ten trading days on which the stock actually traded on the
principal stock exchange on which the Common Stock is then traded or (ii) if not
so traded, the closing (or, if no closing price is available, the average of the
bid and asked prices) for such period on the NASDAQ if such the Common Stock is
listed on NASDAQ or (iii) if not listed on any exchange or quoted on the NASDAQ,
the Company's board of directors shall provide Holder with a good faith
determination of value, and Holder may either accept such determination or
request a determination by a mutually acceptable investment banking firm, whose
fees will be paid by the Holder unless the Market Price so determined exceeds
110% of that set by the Board.
1.3 Effect of Exercise. Promptly (but in any case within five business
------------------
days) after any exercise, the Company shall deliver to the Holder (i) duly
executed certificates in the name or names specified in the exercise notice
representing the aggregate number of shares issuable upon such exercise, and
(ii) if this Warrant is exercised only in part, a new Warrant of like tenor
representing the balance of the Number of Shares. Such certificates shall be
deemed to have been issued, and the person receiving them shall be deemed to be
a holder of record of such shares, as of the close of business on the date the
actions required in Section 1.2 shall have been completed or, if on that date
the stock transfer books of the Company are closed, as of the next business day.
2. Transfer of Warrants and Stock.
------------------------------
2.1 Transfer Restrictions. Neither this Warrant nor the securities
---------------------
issuable upon its exercise may be sold, transferred or pledged unless the
Company shall have been supplied with reasonably satisfactory evidence that such
transfer is not in violation of the Securities Act of 1933, as amended, and any
applicable state securities laws. The Company may place a legend to that effect
on this Warrant, any replacement Warrant and each certificate representing
shares issuable upon exercise of this Warrant. Subject to the satisfaction of
this condition only, this Warrant shall be freely transferable by the Holder.
2.2 Manner of Transfer. Upon delivery of this Warrant to the Company with
------------------
the attached assignment form duly completed and signed, the Company will
promptly (but in any case within five business days) execute and deliver to each
transferee and, if applicable, the Holder, Warrants of like tenor evidencing the
rights (i) of the transferee(s) to purchase the Number of Shares specified for
each in the assignment forms, and (ii) of the Holder to purchase any
untransferred portion, which in the aggregate shall equal the Number of Shares
of the original Warrant. The Company may decline to proceed with any partial
transfer if any new Warrant would represent the right to purchase fewer than one
thousand shares of Common Stock (such number to be adjusted as provided in
Section 4). If this Warrant is properly assigned in compliance with this
Section 2, it may be exercised by an assignee without having a new Warrant
issued.
2
<PAGE>
2.3 Loss, Destruction of Warrant Certificates. Upon receipt of (i)
-----------------------------------------
evidence reasonably satisfactory to the Company of the loss, theft, destruction
or mutilation of any Warrant and (ii) except in the case of mutilation, an
indemnity or security reasonably satisfactory to the Company (the original
Holder's or any institutional Holder's indemnity agreed to be satisfactory), the
Company will promptly (but in any case within five business days) execute and
deliver a replacement Warrant of like tenor representing the right to purchase
the same Number of Shares.
3. Cost of Issuances. The Company shall pay all expenses, transfer taxes and
-----------------
other charges payable in connection with the preparation, issuance and delivery
of stock certificates or replacement Warrants, except for any transfer tax or
other charge imposed as a result of (i) any issuance of stock certificates in
any name other than the name of the Holder upon exercise of the Warrant or (ii)
any transfer of the Warrant. The Company shall not be required to issue or
deliver any stock certificate or Warrant until it receives reasonably
satisfactory evidence that any such tax or other charge has been paid by the
Holder.
4. Anti-Dilution Provisions. If any of the following events occur at any time
------------------------
hereafter during the life of this Warrant, then the Purchase Price and the
Number of Shares immediately prior to such event shall be changed as described
in order to prevent dilution:
4.1 Stock Splits and Reverse Splits. If at any time the outstanding shares
-------------------------------
of Common Stock are subdivided into a greater number of shares, then the
Purchase Price will be reduced proportionately and the Number of Shares will be
increased proportionately. Conversely, if at any time the outstanding shares of
Common Stock are consolidated into a smaller number of shares, then the Purchase
Price will be increased proportionately and the Number of Shares will be reduced
proportionately.
4.2 Dividends. In the event the Company declares a dividend upon the
---------
Common Stock whether in cash, property or securities (except for cash dividends
not in excess of the per share amount paid by the Company under that certain
Contingent Payment Agreement between the Company and the initial Holder dated as
of November 17, 1999), at the time of subsequent exercise of this Warrant, the
Company shall deliver both (i) the Number of Shares for which exercise is made
plus (ii) such dividends as would have been previously distributed to the Holder
if such exercise had been made on the date hereof. If the Company shall declare
a dividend payable in cash on its Common Stock and shall at substantially the
same time offer to its shareholders a right to purchase new Common Stock from
the proceeds of such dividend, or for an amount substantially equal to the
dividend, the amount of Common Stock so offered shall, for the purpose of this
Warrant, be deemed to have been issued as a stock dividend.
4.3 Effect of Reorganization and Asset Sales. If any (i) reorganization
----------------------------------------
or reclassification of the Common Stock, (ii) consolidation or merger of the
Company with or into another corporation, (iii) sale of all or substantially all
of its operating assets to another corporation, or (iv) sale of the Company
substantially as a going concern followed by a liquidation of the Company (any
such occurrence shall be an "Event"), is effected in such a way that holders of
Common Stock are entitled to receive securities and/or assets as a result of
their Common Stock ownership, then upon exercise of this Warrant the Holder will
have the right to
3
<PAGE>
receive the shares of stock, securities or assets which they would have received
if such rights had been fully exercised as of the record date for such Event.
The Company will not effect any Event unless prior to or simultaneously with its
consummation the successor corporation resulting from the consolidation or
merger (if other than the Company), or the corporation purchasing the Company's
assets, assumes the performance of the Company's obligations under this Warrant
(as appropriately adjusted to reflect such consolidation, merger or sale such
that the Holder's rights under this Warrant remain, as nearly as practicable,
unchanged) by a binding written instrument.
4.4 Other Securities Adjustments. If as a result of this Section 4, a
----------------------------
Holder is entitled to receive any securities other than Common Stock upon
exercise of this Warrant, the number and purchase price of such securities shall
thereafter be adjusted from time to time in the same manner as provided pursuant
to this Section 4 for Common Stock. To the extent that a Right receivable on
exercise of this Warrant has lapsed or been lost prior to the date of exercise,
on exercise the Company shall pay in cash an amount equal to the Market Value of
the Right which lapsed or was lost, determined as of the time which such Right
lapsed or was lost. The allocation of purchase price between various securities
shall be made in writing by the Board of Directors of the Company in good faith
at the time of the event by which the Holder become entitled to receive new
securities, and a copy sent to the Holder.
4.5 Notices.
-------
4.5.1 Notice of Adjustments. When any adjustment is required to be
---------------------
made under this Section 4, the Company shall promptly (i) determine such
adjustments, (ii) prepare and retain on file a statement describing in
reasonable detail the method used in arriving at the adjustment; and (iii) cause
a copy of such statement, together with any agreement required by Section 4.3,
to be mailed to the Holder within 10 days after the date on which the
circumstances giving rise to such adjustment occurred.
4.5.2 Notice of Events. If at any time (i) the Company declares any
----------------
dividends on the Common Stock, (ii) any Event is expected to occur, or (iii)
there is a voluntary or involuntary dissolution, liquidation or winding up of
the Company, then the Company shall give the Holder at least thirty (30) but not
more than ninety (90) days written notice of the date on which the books of the
Company will close or upon which a record will be taken with regard to such
occurrence. Such notice will also specify the date as of which the holders of
the Common Stock will participate in the dividend or will be entitled to
exchange their shares for securities or other property. The notice may state
that the record date is subject to the effectiveness of a registration statement
under the Securities Act or to a favorable vote or determination of shareholders
or of any governmental agency.
4.6 Computations and Adjustments. Upon each computation of an
----------------------------
adjustment under this Section 4, the Purchase Price shall be computed to the
next lowest cent and the Number of Shares shall be calculated to the next
highest whole share. However, the fractional amount shall be used in
calculating any future adjustments. No fractional shares of Common Stock shall
be issued in connection with the exercise of this Warrant, but the Company
shall, in the case of the final exercise under this Warrant, make a cash payment
for any fractional shares
4
<PAGE>
based on the closing price on the date of exercise of a share of Common Stock on
the principal exchange or system on which the Common Stock is listed or traded
(or, if not then listed or traded thereon, the mean of the closing bid and asked
prices on an automated quotation system, or, if such quotations are not
available, such value (determined without discount for illiquidity or minority
status) as may be determined in good faith by the Company's Board of Directors,
which determination shall be conclusively binding on the parties).
Notwithstanding any changes in the Purchase Price or the Number of Shares, this
Warrant, and any Warrants issued in replacement or upon transfer thereof, may
continue to state the initial Purchase Price and the initial Number of Shares.
Alternatively, the Company may elect to issue a new Warrant or Warrants of like
tenor for the additional shares of Common Stock purchasable hereunder or, upon
surrender of the existing Warrant, to issue a replacement Warrant evidencing the
aggregate Number of Shares to which the Holder is entitled after such
adjustments.
4.7 Exercise Before Payment Date. In the event that this Warrant is
----------------------------
exercised after the record date for any event requiring an adjustment, but prior
to the actual event, the Company may elect to defer issuing to the Holder any
payment or additional securities required by such adjustment until the actual
event occurs; provided, however, that the Company shall deliver a "due bill" or
other appropriate instrument to the Holder transferable to the same extent as
the Common Stock issuable on exercise evidencing the Holder's right to receive
such additional payment or securities upon the occurrence of the event requiring
such adjustment.
5. Covenants. The Company agrees that:
---------
5.1 Reservation of Stock. During the period in which this Warrant may be
--------------------
exercised, the Company will reserve sufficient authorized but unissued
securities (and, if applicable, property) to enable it to satisfy its
obligations on exercise of this Warrant. If at any time the Company's
authorized securities shall not be sufficient to allow the exercise of this
Warrant, the Company shall take such corporate action as may be necessary to
increase its authorized but unissued securities to be sufficient for such
purpose;
5.2 No Liens, etc. All securities that may be issued upon exercise of
-------------
this Warrant will, upon issuance, be validly issued, fully paid, nonassessable
and free from all taxes, liens and charges with respect to the issue thereof,
and shall be listed on any exchanges or authorized for trading on any automated
systems on which that class of securities is listed or authorized for trading;
5.3 Furnish Information. The Company will promptly deliver to the Holder
-------------------
copies of all financial statements, reports, proxy statements and other
information which the Company shall have sent to its shareholders generally; and
6. Status of Holder.
----------------
6.1 Not a Shareholder. Except as otherwise provided in this Warrant,
-----------------
unless the Holder exercises this Warrant in writing, the Holder shall not be
entitled to any rights (i) as a shareholder of the Company with respect to the
shares as to which the Warrant is exercisable
5
<PAGE>
including, without limitation, the right to vote or receive dividends or other
distributions, or (ii) to receive any notice of any proceedings of the Company.
6.2 Limitation of Liability. Unless the Holder exercises this Warrant in
-----------------------
writing, the Holder's rights and privileges hereunder shall not give rise to any
liability for the Purchase Price or as a shareholder of the Company, whether to
the Company or its creditors.
7. General Provisions.
------------------
7.1 Complete Agreement; Modifications. This Warrant and any documents
---------------------------------
referred to herein or executed contemporaneously herewith constitute the
parties' entire agreement with respect to the subject matter hereof and
supersede all agreements, representations, warranties, statements, promises and
understandings, whether oral or written, with respect to the subject matter
hereof. This Warrant may not be amended, altered or modified except by a writing
signed by the parties.
7.2 Additional Documents. Each party hereto agrees to execute any and all
--------------------
further documents and writings and to perform such other actions which may be or
become necessary or expedient to effectuate and carry out this Warrant.
7.3 Notices. All notices under this Warrant shall be in writing and shall
-------
be delivered by personal service, facsimile or certified mail (if certified mail
is not available, then by first class mail), postage prepaid, to such address as
may be designated from time to time by the relevant party, and which shall
initially be:
If to the Company: Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Attention: President
With a copy to:
Terry L. Cook, Esq.
Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Telephone: (909) 483-8500
Facsimile: (909) 944-6605
If to PBGC: Pension Benefit Guaranty Corporation
c/o Pacholder Associates, Inc., as Agent
8044 Montgomery Road, Suite 480
Cincinnati, Ohio 45236
6
<PAGE>
Attention: Thomas M. Barnhart, II
Senior Vice President and
Associate General Counsel
Telephone: (513) 381-2838
Facsimile: (513) 985-3217
With a copy to:
Timothy E. Hoberg, Esq.
Taft, Stettinius & Hollister
1800 Firstar Tower
425 Walnut Street,
Cincinnati, Ohio 45202
Telephone: (513) 381-2838
Facsimile: (513) 381-0205
Any notice sent by certified mail shall be deemed to have been given three
(3) days after the date on which it is mailed. All other notices shall be
deemed given when received. No objection may be made to the manner of delivery
of any notice actually received in writing by an authorized agent of a party.
7.4 No Third-Party Benefits; Successors and Assigns. None of the
-----------------------------------------------
provisions of this Warrant shall be for the benefit of, or enforceable by, any
third-party beneficiary. Except as provided herein to the contrary, this Warrant
shall be binding upon and inure to the benefit of the parties, their respective
successors and permitted assigns. The Holder may assign its rights and
obligations under this Warrant to any third party if done so in compliance with
the requirements of Section 2. The Company may only assign its rights and
obligations this Warrant in connection with a merger, consolidation or sale of
substantially all of its operating assets to the extent expressly permitted by,
and in compliance with all the requirements of, Section 4.3.
7.5 Waivers Strictly Construed. With regard to any power, remedy or right
--------------------------
provided herein or otherwise available to any party hereunder (i) no waiver or
extension of time shall be effective unless expressly contained in a writing
signed by the waiving party, and (ii) no alteration, modification or impairment
shall be implied by reason of any previous waiver, extension of time, delay or
omission in exercise, or other indulgence.
7.6 Severability. The validity, legality or enforceability of the
------------
remainder of this Warrant shall not be affected even if one or more of its
provisions shall be held to be invalid, illegal or unenforceable in any respect.
7.7 Attorneys' Fees. Should any litigation or arbitration be commenced
---------------
(including any proceedings in a bankruptcy court) between the parties hereto or
their representatives concerning any provision of this Warrant or the rights and
duties of any person or entity hereunder, the party or parties prevailing in
such proceeding shall be entitled, in addition to such
7
<PAGE>
other relief as may be granted, to the attorneys' fees and court costs incurred
by reason of such litigation or arbitration.
IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
effective as of November 22, 1999.
KAISER VENTURES, INC.
By: /s/ Richard E. Stoddard
----------------------------------
Richard Stoddard
Its President
Attest:
By: /s/ Terry L. Cook
--------------------------------
Terry L. Cook
Its Secretary
8
<PAGE>
ASSIGNMENT FORM
(To Be Executed Upon Transfer of Warrant)
FOR VALUE RECEIVED, ______________________________ hereby sells, assigns
and transfers to the transferee named below [the rights to purchase ___ of the
Number of Shares under] this Warrant, together with all rights, title and
interest therein. [The rights to purchase the remaining Number of Shares shall
remain the property of the undersigned.] [This includes a transfer of the
registration rights in the Warrant.]
[NAME OF HOLDER]
Dated: _______________ By:____________________________________
Signature
Name:__________________________________
(Please Print)
Title:_________________________________
Address:_______________________________
_______________________________
_______________________________
Employer Identification Number,
Social Security Number or other
identifying number:____________________
TRANSFEREE:
Name:______________________________
(Please Print)
Address:___________________________
___________________________
___________________________
Employer Identification Number,
Social Security Number or other
identifying number:________________
9
<PAGE>
EXERCISE FORM
(To Be Executed Upon Exercise of Warrant)
The undersigned hereby exercises the Warrant with regard to _____________
shares of Common Stock and herewith [makes payment of the purchase price in
full] [or requests that the Company exchange the Warrant as provided in Section
1.2.2 of the Warrant]. The undersigned requests that the certificate(s) for
such shares [and the Warrant for the unexercised portion of this Warrant] be
issued [to the Holder] [in the name set forth below].
[NAME OF HOLDER]
Dated: __________________ By:______________________________________
Signature
Name:_________________________________
(Please Print)
Title:________________________________
Address:______________________________
______________________________
______________________________
Employer Identification Number,
Social Security Number or other
identifying number:___________________
TRANSFEREE:
Name:__________________________
(Please Print)
Address:_______________________
_______________________
_______________________
Employer Identification Number,
Social Security Number or other
identifying number:____________
10
<PAGE>
EXHIBIT 10.1
------------
REGISTRATION RIGHTS AGREEMENT
-----------------------------
This Registration Rights Agreement (this "Agreement") is made as of
-----------
November 22, 1999 between Kaiser Ventures Inc., a Delaware corporation (the
"Company") and New Kaiser Voluntary Employees' Beneficiary Association, a tax
- ---------
exempt trust formed pursuant to Section 501(a) and 501(c)(9) of the Internal
Revenue Code of 1986, as amended ("VEBA") and the Pension Benefit Guaranty
------
Corporation ("PBGC").
------
WHEREAS, the Company, and VEBA, and the Company and PBGC, are each parties
to two separate Stock Purchase Agreements dated as of even date herewith
pursuant to which the Company is purchasing certain shares of its stock from
VEBA and from PBGC (the "Stock Purchase Agreements"). However, VEBA will be
-------------------------
receiving a warrant to purchase up to 460,000 shares of the common stock (the
"Common Stock") of the Company and PBGC will be receiving a warrant to purchase
- -------------
up to 285,260 shares of Common Stock (collectively, the "Warrants") pursuant to
--------
the Stock Purchase Agreements.
WHEREAS, pursuant to the Stock Purchase Agreements, the parties agreed to
enter into this Agreement, pursuant to which the Company will grant to VEBA and
PBGC (the "Sellers") certain registration rights with respect to the Shares and
-------
the Warrant. Unless otherwise provided in this Agreement, capitalized terms
used in this Agreement will have the meanings set forth in paragraph 8 hereof.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Company and the Sellers agree as
follows:
1. Demand Registration.
-------------------
(a) Notice of Demand. At any one time after September 30, 2001, the
----------------
Sellers may be written notice request (a "Demand Registration") that the Company
-------------------
register Registrable Securities under the Securities Act of 1933, as amended
(the "Securities Act") so long as the registration may be accomplished through
--------------
the use of a Form S-3 or comparable form. The notice shall set forth (i) the
number of shares to be included; (ii) the names of the Sellers and the amounts
to be sold by each; and (iii) the proposed manner of sale.
(b) Registration. Promptly after receipt of the notice pursuant to
------------
Section 1(a), the Company shall prepare and file with the Securities and
Exchange Commission a registration statement with respect to the Registrable
Securities specified in such notice, and use its best efforts to cause such
registration statement to become effective.
(c) Holdback. In the event that a registration is demanded pursuant
--------
to this Section 1, and in the reasonable judgment of the Company it cannot be
undertaken without serious injury to the Company (the grounds for which decision
shall be confidentially disclosed to any requesting Holder), the Company shall
have the option to require the Selling Holders to withdraw such registration
demand for a period of up to 180 days (which may be extended if such facts
continue to be in effect).
<PAGE>
2. Piggyback Registration Rights.
-----------------------------
(a) Right To Piggyback. If the Company proposes to register any of
------------------
its common stock under the Securities Act and the registration form to be used
may be used for the registration of Registrable Securities (as defined below)
("Piggyback Registration") (Piggyback Registrations and Demand Registrations are
----------------------
"Registrations"), the Company will give written notice to the Sellers of its
-------------
intention to effect such a registration and will include in such registration
all Registrable Securities with respect to which the Company has received a
written request from either Seller for inclusion therein within 15 days after
the receipt of the Company's notice, subject to subparagraph 2(c) below.
(c) Priority on Registrations. If the managing underwriters of the
-------------------------
Piggyback Registration determined in their sole but good faith discretion and
advise the Company in writing that in their reasonable opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering without adversely affecting the marketability
of the offering, the Company will include in such registration (i) first, the
securities the Company proposes to sell, (ii) second, the Registrable Securities
requested by the Sellers to be included in such registration (in proportion to
their overall holdings of Common Stock) and (iii) third, other securities
requested to be included in such registration.
3. Procedures.
----------
(a) Piggyback Expenses. The Registration Expenses (as defined below)
------------------
of the Sellers will be paid by the Company in a Registration.
(b) Remedies. Neither Seller will not seek an injunction restraining
--------
or otherwise delaying any Registration as the result of any controversy that
might arise with respect to the interpretation or implementation of this
Agreement.
(c) Availability of Documents. The Company shall furnish to the
-------------------------
Sellers such number of copies of prospectuses, including preliminary
prospectuses, reasonably necessary to conform with the requirements of the
Securities Act, and such other documents as the Sellers may reasonably request,
to facilitate the disposition of the Registrable Securities being sold by the
Sellers upon exercise of the Registration rights contained in this Agreement.
(d) Blue Sky Compliance. The Company shall use its reasonable efforts
-------------------
to register and qualify securities covered by the Registration rights contained
in this Agreement under such other securities or Blue Sky laws of such
jurisdictions as shall be reasonably appropriate for the distribution of the
securities covered by the Registration; provided, however, that the Company will
not be required to qualify as a foreign corporation or to take any action which
would subject it to the service of process in such state or jurisdiction, other
than as to matters and transactions relating to the offer and sale of the
offered securities, in any jurisdiction where it is not now so subject.
4. Holdback Agreements. Each Seller agrees not to effect any sale,
-------------------
transfer or other distribution (including sales pursuant to Rule 144 or Rule
144A) of equity securities of the
2
<PAGE>
Company, or any securities convertible into or exchangeable or exercisable for
such securities, for the period commencing seven days prior to and ending on the
first to occur of the (i) six months from the effective date of any Registration
in which Registrable Securities are included (except as part of such
underwritten registration) or (ii) the date on which any similar lock-up imposed
upon the Company in such Registration terminates, unless the underwriters
managing the registered public offering otherwise agree.
5. Conditions Of Obligation To Register Shares. The obligations of the
-------------------------------------------
Company under this Agreement are subject to the following conditions:
(a) If a Piggyback Registration is underwritten, the Company will not
be required to include any Registrable Securities in a Piggyback Registration
unless the Seller involved accepts, in writing, the terms of the underwriting as
agreed upon between the Company and the underwriters selected by the Company. If
either Seller does not accept the terms of the underwriting as agreed upon
between the Company and the underwriter, that Seller shall withdraw.
(b) Each Seller will cooperate with the Company in connection with
the preparation of the registration statement, and for so long as the Company is
obligated to file and keep effective the registration statement, will provide to
the Company, in writing, for use in the registration statement, all information
regarding that Seller as may be necessary to enable the Company to prepare the
registration statement and prospectus covering the Registrable Securities, to
maintain the currency and effectiveness thereof and otherwise to comply with all
applicable requirements of law in connection therewith.
(c) During such time as a Seller may be engaged in a distribution of
Registrable Securities, such Seller will comply with Rules 10b-7 promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
------------
pursuant thereto, the Seller will, among other things, cause to be furnished to
each broker through whom Registrable Securities may be offered, or to the
offeree if an offer is not made through a broker, such copies of the prospectus
covering the Registrable Securities and any amendment or supplement thereto and
documents incorporated by reference therein as may be required by law and the
Seller shall not bid for or purchase any shares of the Company or attempt to
induce any other person to purchase any securities of the Company other than as
permitted under Exchange Act.
6. Certain Limitation on Future Rights. From and after the date of this
-----------------------------------
Agreement, the Company shall not enter into any agreement with any other holder
or prospective holder of any securities of the Company providing for the grant
to any such prospective holder of registration rights unless such agreement
includes the substantial equivalent of (a) Section 2(c) of this Agreement as a
term of such agreement and in such section, the agreement provides that the
Sellers will have a priority with respect to Piggyback Registration superior to
any other holder of securities of the Company, excluding, in all cases, the
Company, and (b) Section 3 of this Agreement as a term of such agreement.
7. Registration Expenses. All expenses incident to the Company's
---------------------
performance of or compliance with this Agreement, including without limitation
all registration
3
<PAGE>
and filing fees, fees and expenses of compliance with securities or blue sky
laws, printing expenses, messenger and delivery expenses, and fees and
disbursements of counsel for the Company and all independent certified public
accountants, underwriters (if any) (excluding discounts and commissions) and
other Persons retained by the Company (all such expenses being herein called
"Registration Expenses"), will be borne as provided in this Agreement.
---------------------
8. Indemnification.
---------------
(a) The Company agrees to indemnify, to the extent permitted by law,
the Sellers, their trustees, officers, directors, counsel and each Person who
controls the Sellers (within the meaning of the Securities Act) against all
losses, claims, damages, liabilities and expenses caused by any untrue or
alleged untrue statement of material fact contained in any registration
statement, prospectus or preliminary prospectus or any amendment thereof or
supplement thereto or any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are caused by or contained in any
information furnished in writing to the Company by the Sellers for use therein
or by the Seller's failure to deliver a copy of the registration statement or
prospectus or any amendments or supplements thereto after the Company has
furnished the Sellers with a sufficient number of copies of the same. In
connection with an underwritten offering, the Company will indemnify such
underwriters, their officers and directors and each Person who controls such
underwriters (within the meaning of the Securities Act) to the same extent as
provided above with respect to the indemnification of the Sellers.
(b) In connection with any registration statement in which the
Sellers are participating, the Sellers will furnish to the Company in writing
such information, affidavits instruments and other documents as the Company
reasonably requests for use in connection with any such registration statement
or prospectus and, to the extent permitted by law, indemnify the Company, its
directors, officers, counsel, accountants and each Person who controls the
Company (within the meaning of the Securities Act) against all losses, claims,
damages, liabilities and expenses resulting from any untrue or alleged untrue
statement of material fact contained in the registration statement, prospectus
or preliminary prospectus or any amendment thereof or supplement thereto or any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, but only to the extent
that such untrue statement or omission is contained in any information or
affidavit so furnished in writing by the Sellers.
(c) Any Person entitled to indemnification hereunder will (i) give
prompt written notice to the indemnifying party of any claim with respect to
which it seeks indemnification and (ii) unless in such indemnified party's
reasonable judgment a conflict of interest between such indemnified and
indemnifying parties may exist with respect to such claim, permit such
indemnifying party to assume the defense of such claim with counsel reasonably
satisfactory to the indemnified party. If such defense is assumed, the
indemnifying party will not be subject to any liability for any settlement made
by the indemnified party without its consent (but such consent will not be
unreasonably withheld, conditioned or delayed). An indemnifying party who is not
entitled to, or elects not to, assume the defense of a claim will not be
obligated to pay the fees and expenses of more than one counsel for all parties
indemnified by such
4
<PAGE>
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim.
(d) The indemnification provided for under this Agreement will remain
in full force and effect regardless of any investigation made by or on behalf of
the indemnified party or any officer, director or controlling Person of such
indemnified party and will survive the transfer of securities.
9. Participation in Underwritten Registrations. No Seller may not
-------------------------------------------
participate in any registration hereunder which is underwritten unless it (a )
agrees to sell its securities on the basis provided in any underwriting
arrangements approved by the Person or Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents required
under the terms of such underwriting arrangements.
10. Definitions.
-----------
"Person" means any individual, corporation, partnership, limited liability
------
company, limited liability partnership, firm, joint venture, association, joint-
stock company, trust or unincorporated organization.
"Registrable Securities" means (i) any Common Stock issued or issuable with
----------------------
respect to the Warrants (the "Warrant Shares") and (ii) any Common Stock issued
or issuable with respect to the Warrant Shares by way of a stock dividend, stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular Registrable
Securities, such securities will cease to be Registrable Securities when they
have been distributed to the public or may be immediately sold to the public
through a broker, dealer or market maker in compliance with Rule 144 or Rule
144A under the Securities Act (or any similar rule then in force).
11. Termination. This Agreement shall automatically terminate and be of no
-----------
further force or effect upon the first to occur of (i) that Seller's failure to
participate in two underwritten public offerings in which Piggyback Registration
rights were offered to it and there was no material restriction on the number of
Registrable Securities proposed to be registered on behalf of the Company, or
(ii) the seventh anniversary date of this Agreement. The termination of this
Agreement does not eliminate any liability of the parties for prior breaches.
12. Miscellaneous.
--------------
(a) Amendments and Waivers. Except as otherwise provided herein, the
----------------------
provisions of this Agreement may be amended or waived only upon the prior
written consent of the Company and the Sellers. In any instance where a single
decision by Sellers is reasonably necessary, Sellers shall act by majority based
on the Registrable Securities then held or covered by Warrant.
5
<PAGE>
(b) Successors and Assigns. This Agreement and the respective rights
----------------------
and obligations hereunder shall not be assigned by either party except with the
prior written consent of the non-assigning party, which consent shall be subject
to the sole discretion of the non-assigning party.
(c) Severability. Whenever possible, each provision of this Agreement
------------
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement.
(d) Counterparts. This Agreement may be executed simultaneously in
------------
two or more counterparts, any one of which need not contain the signatures of
more than one party, but all such counterparts taken together will constitute
one and the same Agreement.
(e) Descriptive Headings. The descriptive headings of this Agreement
--------------------
are inserted for convenience only and do not constitute a part of this
Agreement.
(f) Governing Law. All other questions concerning the construction,
-------------
validity and interpretation of this Agreement and the exhibits and schedules
hereto will be governed by the internal law, and not the law of conflicts, of
Delaware.
(g) Notices. All notices, demands or other communications to be given
-------
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, sent to the recipient by reputable express courier service (charges
prepaid) or mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demand and other
communications will be sent to the addresses indicated below:
To: The New Kaiser Voluntary Employees' Beneficiary
Association
9810 Sierra Avenue, Suite A
Fontana, CA 92335
Telephone: (909) 356-3663
Facsimile: (909)356-4672
To: Pension Benefit Guaranty Corporation
c/o Pacholder Associates, Inc., as Agent
8044 Montgomery Road, Suite 480
Cincinnati, Ohio 45236
Attention: Thomas M. Barnhart, II
Senior Vice President and
Associate General Counsel
Telephone: (513) 381-2838
Facsimile: (513) 985-3217
6
<PAGE>
With a copy to:
Timothy E. Hoberg, Esq.
Taft, Stettinius & Hollister
1800 Firstar Tower
425 Walnut Street,
Cincinnati, Ohio 45202
Telephone: (513) 381-2838
Facsimile: (513) 381-0205
To: Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Attention: President
With a copy to: Terry L. Cook, Esq.
c/o Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Telephone: (909) 356-3663
Facsimile: (909) 356-4672
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
[Next page is signature page]
7
<PAGE>
[Signature Page to Registration Rights Agreement]
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
"VEBA" "Kaiser"
New Kaiser Voluntary Employees' Kaiser Ventures Inc.
Beneficiary Association
By: /s/ Ronald E. Bitonti By: /s/ Richard E. Stoddard
---------------------------------- ---------------------------
Ronald E. Bitonti Richard E. Stoddard
Chairman, Administrative Committee President, Chief Executive
Officer & Chairman of the
Board
By: Wells Fargo Bank of California, as trustee
By: /s/ Mario Gonzalez
-----------------------------
Mario Gonzalez
Assistant Vice President
Institutional Trust Group
By: /s/ Susanna Ryan
-----------------------------
Susanna Ryan
Vice President and Area Manager
Los Angeles Office
Institutional Trust Group
"PBGC"
Pension Benefit Guaranty Corporation
By: Pacholder Associates, Inc., as Agent
By: /s/ Thomas M. Barnhart, II
-----------------------------
Thomas M. Barnhart, II
Senior Vice President and
Associate General Counsel
8
<PAGE>
EXHIBIT 10.2
------------
Contingent Payment Agreement
============================
This CONTINGENT PAYMENT AGREEMENT ("Agreement") is made and entered into
this 22nd day of November, 1999, by and between KAISER VENTURES INC., a Delaware
corporation, ("Kaiser") and THE NEW KAISER VOLUNTARY EMPLOYEES' BENEFICIARY
ASSOCIATION, a tax exempt trust formed pursuant to Sections 501(a) and 501(c)(9)
of the Internal Revenue Code of 1986, as amended ("VEBA").
Recitals
A. The parties hereto are the parties to that certain Stock Purchase
Agreement (the "Stock Purchase Agreement") dated as of even date herewith
pursuant to which VEBA is selling to Kaiser certain shares of the $.03 par value
common stock of Kaiser, which VEBA received in connection with the Chapter 11
bankruptcy reorganization of Kaiser Steel Corporation. Certain capitalized
terms not otherwise defined in this Agreement will be defined as set out in the
Stock Purchase Agreement.
B. A portion of the consideration under the Stock Purchase Agreement is a
Contingent Payment to be made by Kaiser under certain terms and conditions.
C. This Agreement is the Contingent Payment Agreement contemplated by the
Stock Purchase Agreement under which the Contingent Payment will be made.
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
parties hereto agree as follows:
1. Contingent Payment.
------------------
(a) Contingency. In addition to the other consideration provided for
-----------
in the Stock Purchase Agreement, if (i) Kaiser is engaged in active, ongoing
discussions with a specific purchaser or purchasers at the end of the first year
from the date hereof for the sale or other transfer in a single transaction (or
a series of related transactions to one or more buyers) of at least 65% of the
approximately 592 acres of Mill Site real estate other than the NAPA lots and
the Rancho Cucamonga lots (which are excluded from this test, but not from the
calculation of the payment due hereunder), including the assumption of all or
substantially all known and unknown environmental remediation and liabilities
(including, without limitation, environmental liabilities to third parties)
associated with all such real estate whether title is actually transferred or
not (a "Bulk Real Estate Transaction"), and (ii) Kaiser in fact executes a
definitive agreement with such purchaser or its affiliates (including but not
limited to an option or other conveyance) on or before December 31, 2000
relating to the Bulk Real Estate Transaction under active negotiation at the end
of the year and (iii) that Bulk Real Estate Transaction in fact closes
(regardless of whether before or after December 31, 2000), then Kaiser will make
an additional cash payment to VEBA (the "VEBA Contingent Real Estate Payment").
The term "Mill Site" refers to the East Slag Pile and the Kaiser Commerce Center
real estate properties which are composed of the parcels commonly referred to by
Kaiser as the West End, West Slag Pile and Valley Boulevard.
<PAGE>
(b) Timing of Payment. Kaiser will make the VEBA Contingent Real
-----------------
Estate Payment within 10 business days following the closing and the receipt of
funds from the Bulk Real Estate Transaction.
(c) Calculation. The "VEBA Contingent Real Estate Payment" shall
-----------
mean 24.69% of the excess of the net after-tax proceeds received by Kaiser from
the Bulk Real Estate Transaction (net of all commissions, closing costs,
investment banking fees, Mill Site environmental remediation liabilities not
assumed by the buyer, and income taxes at the rate of 28%) above $8,073,064 as
reflected in the "Asset Valuation" contained in Exhibit I hereto. The VEBA
---------
Contingent Real Estate Payment shall be determined by utilizing the "Contingent
Real Estate Payment" model contained in Exhibit I and shall be calculated by
modifying those assumptions for the actual amounts in the Bulk Real Estate
Transaction. As an example, based upon the example assumptions shown in Exhibit
I, the VEBA Contingent Real Estate Payment would be $2,973,300.
2. Miscellaneous Provisions.
------------------------
(a) Expenses. Except as may otherwise be provided herein, no party
--------
hereto shall be responsible for the payment of any other party's expenses
incurred in connection with this Agreement.
(b) Third Party Beneficiaries. The terms and provisions of this
-------------------------
Agreement are intended solely for the benefit of each party hereto and its
respective successors and assigns, and it is not the intention of the parties to
confer third party beneficiary rights upon any other person or entity.
(c) Further Assurances. At any time, and from time to time, after the
------------------
Closing Date, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to VEBA Shares or otherwise to carry out the intent and purposes of this
Agreement.
(d) Waiver. Any failure on the part of any party hereto to comply
------
with any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
(e) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed to have been given if delivered in person or sent
by prepaid first class registered or certified mail, return receipt requested to
the respective principal offices of the parties hereto to the respective
principal offices of the parties hereto as specified below:
If to Kaiser: Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Attention: President
With a copy to:
Terry L. Cook, Esq.
Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
2
<PAGE>
Suite 850
Ontario, California 91764
Telephone: (909) 483-8500
Facsimile: (909) 944-6605
If to VEBA: The New Kaiser Voluntary Employees' Beneficiary
Association
9810 Sierra Avenue, Suite A
Fontana, CA 92335
Telephone: (909) 356-3663
Facsimile: (909)356-4672
Any notice or communication mailed shall also be faxed to the appropriate
number specified above.
(f) Interpretation. In this Agreement the singular included the
--------------
plural and the plural the singular; words importing any gender include the other
genders; references to statutes are to be construed as including all statutory
provisions consolidating, amending or replacing the statute referred to;
references to "writing," include printing, typing, lithography and other means
of reproducing words in a tangible visible form; the word "including,"
"includes" and "include" are deemed to be followed by the words "but not limited
to"; and references to paragraphs (or subdivisions of paragraphs) recitals or
exhibits are to those of this Agreement unless otherwise indicated. The
language used in this Agreement will be deemed to be the language chosen by the
parties to this Agreement to express their mutual intent, and no rule of strict
construction shall be applied against any party.
(g) Counterparts. This Agreement may be executed simultaneously in
------------
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(h) Governing Law. This Agreement shall be governed by, and
-------------
interpreted in accordance with, the laws of the State of Delaware, without
regard to the conflict of law principles thereof. All actions and proceedings
arising out of or relating to this Agreement shall be heard and determined in
any state or Federal court sitting in Delaware. Each of the parties hereto (i)
consents to submit such party to the personal jurisdiction of any Federal court
located in the State of Delaware or any Delaware state court in the event any
dispute arises out of this Agreement or any of the transactions contemplated
hereby; (ii) agrees that such party will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court;
(iii) agrees that such party will not bring any action relating to this
Agreement or the transactions contemplated hereby in any court other than a
Federal court sitting in the State of Delaware or a Delaware state court; and
(iv) waives any right to trial by jury with respect to any claim or proceeding
related to or arising out of this Agreement or any of the transactions
contemplated hereby.
(i) Binding Effect. This Agreement shall be binding upon the parties
--------------
hereto and
3
<PAGE>
inure to the benefit of the parties, their respective successors and assigns.
(j) Entire Agreement. This Agreement and the exhibits to be attached
----------------
hereto constitute the entire agreement of the parties covering everything agreed
upon or understood in the Transaction. The parties are executing and carrying
out this Agreement in reliance solely on the representations, warranties and
covenants and agreements contained in this Agreement and in the written
documents contemplated by this Agreement. This Agreement may not be amended or
modified except by a written document executed by Kaiser and VEBA.
(k) Enforcement Costs. In the event of any legal proceeding to
-----------------
enforce any of the terms hereof, the prevailing party shall be entitled to
receive payment for its attorneys' fees and all other costs required to enforce
its rights hereunder.
(l) Regulatory Filings. Each party shall be reasonable for completing
------------------
and filing any
4
<PAGE>
regulatory filings that may be applicable to it, including, but not limited to,
any filings with the Securities and Exchange Commission.
(m) Good Faith. The parties agree to seek in good faith to seek to
----------
consummate the Transaction.
(n) Severability. The validity, legality or enforceability of the
------------
remainder of this Agreement shall not be affected even if one or more of the
provisions of this Agreement shall be held to be invalid, illegal or
unenforceable in any respect. To the extent permitted by applicable law, the
parties hereby waive any provision of law that would render any provision hereof
prohibited or unenforceable in any respect.
(o) Headings. The headings in this Agreement are inserted only as a
--------
matter of convenience, and in no way define, limit, or extend or interpret the
scope of this Agreement or of any particular paragraph.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the day and year first above written.
"VEBA" "Kaiser"
New Kaiser Voluntary Employees' Kaiser Ventures Inc.
Benefit Association
By: /s/ Ronald E. Bitonti By: /s/ Richard E. Stoddard
---------------------------------- ---------------------------------
Ronald E. Bitonti Richard E. Stoddard
Chairman, Administrative Committee President, Chief Executive
Officer & Chairman of the Board
By: Wells Fargo Bank of California, as trustee
By: /s/ Mario Gonzales
----------------------------------
Mario Gonzalez
Assistant Vice President
Institutional Trust Group
By: /s/ Susanna Ryan
----------------------------------
Susanna Ryan
Vice President and Area Manager
Los Angeles Office
Institutional Trust Group
5
<PAGE>
EXHIBIT 10.3
------------
Contingent Payment Agreement
============================
This CONTINGENT PAYMENT AGREEMENT ("Agreement") is made and entered into
this 22nd day of November, 1999, by and between KAISER VENTURES INC., a Delaware
corporation, ("Kaiser") and the Pension Benefit Guaranty Corporation ("PBGC").
Recitals
A. The parties hereto are the parties to that certain Stock Purchase
Agreement (the "Stock Purchase Agreement") dated as of even date herewith
pursuant to which PBGC is selling to Kaiser certain shares of the $.03 par value
common stock of Kaiser, which PBGC received in connection with the Chapter 11
bankruptcy reorganization of Kaiser Steel Corporation. Certain capitalized
terms not otherwise defined in this Agreement will be defined as set out in the
Stock Purchase Agreement.
B. A portion of the consideration under the Stock Purchase Agreement is a
Contingent Payment to be made by Kaiser under certain terms and conditions.
C. This Agreement is the Contingent Payment Agreement contemplated by the
Stock Purchase Agreement under which the Contingent Payment will be made.
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants contained herein, and for other good and valuable consideration, the
parties hereto agree as follows:
1. Contingent Payment.
------------------
(a) Contingency. In addition to the other consideration provided for
-----------
in the Stock Purchase Agreement, if (i) Kaiser is engaged in active, ongoing
discussions with a specific purchaser or purchasers at the end of the first year
from the date hereof for the sale or other transfer in a single transaction (or
a series of related transactions to one or more buyers) of at least 65% of the
approximately 592 acres of Mill Site real estate other than the NAPA lots and
the Rancho Cucamonga lots (which are excluded from this test, but not from the
calculation of the payment due hereunder), including the assumption of all or
substantially all known and unknown environmental remediation and liabilities
(including, without limitation, environmental liabilities to third parties)
associated with all such real estate whether title is actually transferred or
not, (a "Bulk Real Estate Transaction"), and (ii) Kaiser in fact executes a
definitive agreement with such purchaser or its affiliates (including but not
limited to an option or other conveyance) on or before December 31, 2000
relating to the Bulk Real Estate Transaction under active negotiation at the end
of the year and (iii) that Bulk Real Estate Transaction in fact closes
(regardless of whether before or after December 31, 2000), then Kaiser will make
an additional cash payment to VEBA (the "VEBA Contingent Real Estate Payment").
The term "Mill Site" refers to the East Slag Pile and the Kaiser Commerce Center
real estate properties which are composed of the parcels commonly referred to by
Kaiser as the West End, West Slag Pile and Valley Boulevard.
<PAGE>
(b) Timing of Payment. Kaiser will make the PBGC Contingent Real
-----------------
Estate Payment within 10 business days following the closing and the receipt of
funds from the Bulk Real Estate Transaction.
(c) Calculation. The "PBGC Contingent Real Estate Payment" shall
-----------
mean 15.31% of the excess of the net after-tax proceeds received by Kaiser from
the Bulk Real Estate Transaction (net of all commissions, closing costs,
investment banking fees, Mill Site environmental remediation liabilities not
assumed by the buyer, and income taxes at the rate of 28%) above $8,073,064 as
reflected in the "Asset Valuation" contained in Exhibit I hereto. The PBGC
---------
Contingent Real Estate Payment shall be determined by utilizing the "Contingent
Real Estate Payment" model contained in Exhibit I and shall be calculated by
modifying those assumptions for the actual amounts in the Bulk Real Estate
Transaction. As an example, based upon the example assumptions shown in Exhibit
I, the PBGC Contingent Real Estate Payment would be $1,843,711.
2. Miscellaneous Provisions.
------------------------
(a) Expenses. Except as may otherwise be provided herein, no party
--------
hereto shall be responsible for the payment of any other party's expenses
incurred in connection with this Agreement.
(b) Third Party Beneficiaries. The terms and provisions of this
-------------------------
Agreement are intended solely for the benefit of each party hereto and its
respective successors and assigns, and it is not the intention of the parties to
confer third party beneficiary rights upon any other person or entity.
(c) Further Assurances. At any time, and from time to time, after the
------------------
Closing Date, each party will execute such additional instruments and take such
action as may be reasonably requested by the other party to confirm or perfect
title to PBGC Shares or otherwise to carry out the intent and purposes of this
Agreement.
(d) Waiver. Any failure on the part of any party hereto to comply
------
with any of its obligations, agreements or conditions hereunder may be waived in
writing by the party to whom such compliance is owed.
(e) Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed to have been given if delivered in person or sent
by prepaid first class registered or certified mail, return receipt requested to
the respective principal offices of the parties hereto to the respective
principal offices of the parties hereto as specified below:
If to Kaiser: Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Attention: President
With a copy to:
Terry L. Cook, Esq.
2
<PAGE>
Kaiser Ventures Inc.
3633 E. Inland Empire Boulevard
Suite 850
Ontario, California 91764
Telephone: (909) 483-8500
Facsimile: (909) 944-6605
If to PBGC: Pension Benefit Guaranty Corporation
c/o Pacholder Associates, Inc., as Agent
8044 Montgomery Road, Suite 480
Cincinnati, Ohio 45236
Attention: Thomas M. Barnhart, II
Senior Vice President and
Associate General Counsel
Telephone: (513) 381-2838
Facsimile: (513) 985-3217
With a copy to:
Timothy E. Hoberg, Esq.
Taft, Stettinius & Hollister
1800 Firstar Tower
425 Walnut Street,
Cincinnati, Ohio 45202
Telephone: (513) 381-2838
Facsimile: (513) 381-0205
Any notice or communication mailed shall also be faxed to the appropriate
number specified above.
(f) Interpretation. In this Agreement the singular included the
--------------
plural and the plural the singular; words importing any gender include the other
genders; references to statutes are to be construed as including all statutory
provisions consolidating, amending or replacing the statute referred to;
references to "writing," include printing, typing, lithography and other means
of reproducing words in a tangible visible form; the word "including,"
"includes" and "include" are deemed to be followed by the words "but not limited
to"; and references to paragraphs (or subdivisions of paragraphs) recitals or
exhibits are to those of this Agreement unless otherwise indicated. The
language used in this Agreement will be deemed to be the language chosen by the
parties to this Agreement to express their mutual intent, and no rule of strict
construction shall be applied against any party.
(g) Counterparts. This Agreement may be executed simultaneously in
------------
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
(h) Governing Law. This Agreement shall be governed by, and
-------------
3
<PAGE>
interpreted in accordance with, the laws of the State of Delaware, without
regard to the conflict of law principles thereof. All actions and proceedings
arising out of or relating to this Agreement shall be heard and determined in
any state or Federal court sitting in Delaware. Each of the parties hereto (i)
consents to submit such party to the personal jurisdiction of any Federal court
located in the State of Delaware or any Delaware state court in the event any
dispute arises out of this Agreement or any of the transactions contemplated
hereby; (ii) agrees that such party will not attempt to deny or defeat such
personal jurisdiction by motion or other request for leave from any such court;
(iii) agrees that such party will not bring any action relating to this
Agreement or the transactions contemplated hereby in any court other than a
Federal court sitting in the State of Delaware or a Delaware state court; and
(iv) waives any right to trial by jury with respect to any claim or proceeding
related to or arising out of this Agreement or any of the transactions
4
<PAGE>
contemplated hereby.
(i) Binding Effect. This Agreement shall be binding upon the parties
--------------
hereto and inure to the benefit of the parties, their respective successors and
assigns.
(j) Entire Agreement. This Agreement and the exhibits to be attached
----------------
hereto constitute the entire agreement of the parties covering everything agreed
upon or understood in the Transaction. The parties are executing and carrying
out this Agreement in reliance solely on the representations, warranties and
covenants and agreements contained in this Agreement and in the written
documents contemplated by this Agreement. This Agreement may not be amended or
modified except by a written document executed by Kaiser and PBGC.
(k) Enforcement Costs. In the event of any legal proceeding to
-----------------
enforce any of the terms hereof, the prevailing party shall be entitled to
receive payment for its attorneys' fees and all other costs required to enforce
its rights hereunder.
(l) Regulatory Filings. Each party shall be reasonable for completing
------------------
and filing any regulatory filings that may be applicable to it, including, but
not limited to, any filings with the Securities and Exchange Commission.
(m) Good Faith. The parties agree to seek in good faith to seek to
----------
consummate the Transaction.
(n) Severability. The validity, legality or enforceability of the
------------
remainder of this Agreement shall not be affected even if one or more of the
provisions of this Agreement shall be held to be invalid, illegal or
unenforceable in any respect. To the extent permitted by applicable law, the
parties hereby waive any provision of law that would render any provision hereof
prohibited or unenforceable in any respect.
(o) Headings. The headings in this Agreement are inserted only as a
--------
matter of convenience, and in no way define, limit, or extend or interpret the
scope of this Agreement or of any particular paragraph.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the day and year first above written.
"PBGC" "Kaiser"
Pension Benefit Guaranty Corporation Kaiser Ventures Inc.
By: Pacholder Associates, Inc., as Agent
By: /s/ Thomas M. Barnhart, II By: /s/ Richard E. Stoddard
------------------------------- ---------------------------
Thomas M. Barnhart, II Richard E. Stoddard
Senior Vice President President, Chief Executive
Officer & Chairman of the
Board
5
<PAGE>
EXHIBIT 99.1
------------
Media Contact: Investor Contact:
Terry L. Cook James F. Verhey
(909) 483-8511 (909) 483-8513
FOR IMMEDIATE RELEASE
Kaiser Ventures Inc. Repurchases Majority of Shares
Owned by its Two Largest Shareholders
(Ontario, Calif. - November 22, 1999) - Kaiser Ventures Inc. (NASDAQ:KRSC)
announced today that it has purchased 2,730,950 and 1,693,551 shares of its
common stock from the New Kaiser Voluntary Employees' Beneficiary Association
(VEBA) and from the Pension Benefit Guaranty Corporation (PBGC), respectively.
VEBA and the PBGC are the Company's two largest shareholders. The repurchase
reduced VEBA's ownership in the Company from approximately 33% to approximately
10% and the PBGC's ownership from approximately 20% to approximately 6%.
With completion of the transaction, the Company's outstanding shares of common
stock were reduced from approximately 10.7 million to approximately 6.3 million.
In addition, the size of its Board of Directors was reduced to seven members
from 11 members, with VEBA retaining a single Board representative.
The Company paid $13.00 per share in cash. In addition, the VEBA and the PBGC
will have certain limited participation in the future success of the Company.
First, if there is a qualifying sale of the Company's Mill Site real estate
generally prior to December 31, 2000, they would receive their pro rata portion
of any proceeds in excess of a certain threshold. (This contingent payment
would equal approximately $1.10 per share if the previously announced
transaction for the sale of the Company's remaining Mill Site property to
Ontario Ventures I, LLC were to close
(more)
<PAGE>
Kaiser Ventures Repurchases Majority of Shares
Page 2
on its current terms.) In addition, VEBA and the PBGC received five-year
warrants to purchase 460,000 and 285,260 shares of the Company's common stock,
respectively. The warrants have an exercise price of $17.00 per warrant. Kaiser
stock closed at $14.75 on Friday, November 19, 1999.
The cash portion of the purchase price was funded entirely from cash on hand
which was obtained as result of the merger between Penske Motorsports, Inc. and
International Speedway Corporation and subsequent sales of International
Speedway Corporation stock.
"Completing this transaction sets the stage for us to move forward into the next
phase of operations for our company," Richard E. Stoddard, Kaiser's Chairman and
Chief Executive Officer said. "After evaluating a number of alternatives, we
believe the stock repurchase is fair to and in the best interest of all
shareholders as it substantially reduces the potential overhang of stock from
VEBA and the PBGC in the market, streamlines our governance structure and allows
us to focus more time and resources on developing and growing our existing
projects and investments."
"Looking forward," Stoddard continued, "Kaiser intends to aggressively pursue
additional value-creating opportunities for each of our remaining businesses.
In the near term, our Eagle Mountain project will require substantial focus,
given the completion of the federal land exchange and our progress in the
permitting process. In addition, in the future we may explore potential growth
opportunities beyond Kaiser's existing projects and assets, which could include
opportunities in the water arena," Stoddard said.
Mr. Stoddard added, "The VEBA and PBGC have been important shareholders since
the formation of Kaiser Ventures out of the Kaiser Steel Corporation bankruptcy.
It is particularly gratifying that Kaiser's success has assisted the VEBA
(more)
<PAGE>
Kaiser Ventures Repurchases Majority of Shares
Page 3
in restoring to over 7,000 retirees the medical benefits that were lost during
the bankruptcy."
Since the bankruptcy reorganization of Kaiser Steel Corporation, the VEBA and
the PBGC have been Kaiser Ventures' two largest shareholders. The VEBA is a
medical benefits trust representing over 7,000 retirees whose health needs and
advancing age necessitated creating greater liquidity and flexibility for its
investments.
An independent committee of the Kaiser Board evaluated and negotiated the
transaction and made a determination that the transaction was fair to the
Company and other shareholders. Merrill Lynch served as financial advisor to
the Committee and rendered a fairness opinion in connection with the
transaction.
The Company will conduct an investor conference call on Monday, November 22,
1999 at 2:00 p.m. (Pacific Time). Interested participants may call (800)
967-7134. The confirmation code is 836430. A replay of the conference call will
be available for 48 hours by calling 888-203-1112. The confirmation code for the
replay is 836430.
Statements made in this release that state the Company's or
management's beliefs or expectations and which are not historical
facts or which apply prospectively are forward-looking statements.
Forward-looking statements are inherently subject to uncertainties
and other factors, which could cause actual results to differ
materially from the results stated or implied by such forward-
looking statements. Additional information concerning factors
that could cause actual results to differ materially from those in
the forward-looking statements is contained from time to time in
the Company's filings with the Securities and Exchange Commission,
including, but not limited to, the Company's 10-K Report and
subsequent 10-Q Reports. Copies of those are available from the
Company and Securities and Exchange Commission.
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