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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)*
BLISS & LAUGHLIN INDUSTRIES INC.
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(Name of Issuer)
COMMON STOCK, PAR VALUE $.01
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(Title of Class of Securities)
093546 10 9
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(CUSIP Number)
ROGER FEIN, 225 W. WACKER DRIVE, CHICAGO, ILLINOIS 60606 (312) 201-2536
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
OCTOBER 4, 1995
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box / /.
Check the following box if a fee is being paid with this statement / /. (A
fee is not required only if the reporting person: (1) has a previous statement
on file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
(Continued on following page(s))
PAGE 1 OF 5 PAGES
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CUSIP NO. 093546 10 9 PAGE 2 OF 5 PAGES
ITEM 4 PURPOSE OF TRANSACTION
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This Amendment No. 1 to Schedule 13D is being filed by fifteen individuals
and three trusts who might be deemed to comprise a group within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934. The fifteen
individuals are current or former officers of Bliss & Laughlin Industries Inc.
("BLI") or its wholly owned subsidiary, Bliss & Laughlin Steel Company ("BLS")
and the three trusts are trusts established for the benefit of certain of the
aforementioned individuals and their families. The parties making this filing
are collectively referred to herein as the "Management Stockholders".
The Management Stockholders filed a Schedule 13D on September 27, 1995 in
connection with their entering into a Stock Option Agreement dated as of
September 16, 1995 (the "First Option Agreement") with B & L Acquisition
Corporation ("BRW's Acquisition Subsidiary") and BRW Steel Corporation ("BRW")
which provided, among other things, that the Management Stockholders granted an
option to BRW's Acquisition Subsidiary to purchase an aggregate of 774,059 of
their shares of common stock of BLI (representing 19.5% of BLI's issued and
outstanding shares of common stock) for a purchase price of $7.75 per share.
The Management Stockholders, BRW's Acquisition Subsidiary and BRW entered
into Amendment No. 1 to Stock Option Agreement dated as of October 4, 1995
wherein they agreed to amend the First Option Agreement.
The Management Stockholders, BRW's Acquisition Subsidiary and BRW also
entered into an Amended Stock Option Agreement dated as of October 4, 1995 (the
"Amended Stock Option Agreement") which, among other things, raised the option
price to $9.50 per share or any higher price paid by BRW's Acquisition
Subsidiary for a share of BLI common stock in the proposed merger of BLI and
BRW's Acquisition Subsidiary or any other merger of BLI with BRW or BRW's
Acquisition Subsidiary or in a tender offer by BRW or BRW's Acquisition
Subsidiary for shares of BLI common stock.
The Management Stockholders, BRW's Acquisition Subsidiary and BRW also
entered into Amendment No. 1 dated as of October 18, 1995 to Amended Stock
Option Agreement, which amended Sections 2 and 14 of the Amended Stock Option
Agreement by deleting January 15, 1996 wherever it appears in those Sections and
substituting January 31, 1996 in lieu thereof.
The forms of the Amendment No. 1 to Stock Option Agreement, the Amended
Stock Option Agreement and Amendment No. 1 to Amended Stock Option Agreement are
attached hereto as Exhibits A, B and C, respectively.
The Management Stockholders also entered into Amendment No. 1 to the
Stockholder Escrow Agreement dated as of October 4, 1995 amending the
Stockholder Escrow Agreement dated as of September 19, 1995. A copy of the form
of the Amendment No. 1 to the Stockholder Escrow Agreement is attached hereto as
Exhibit D.
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CUSIP NO. 093546 10 9 PAGE 3 OF 5 PAGES
ITEM 6 CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS
- ------ OR RELATIONSHIPS WITH RESPECT TO SECURITIES
OF THE ISSUER
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See Item 4 above.
ITEM 7 MATERIAL TO BE FILED AS EXHIBITS
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Exhibit A. Form of Amendment No. 1 dated as of October 4,
1995 to the Stock Option Agreement and Exhibit
A thereto.
Exhibit B. Form of Amended Stock Option Agreement dated as of
October 4, 1995.
Exhibit C. Form of Amendment No. 1 dated as of
October 18, 1995 to the Amended Stock Option
Agreement.
Exhibit D. Form of Amendment No. 1 dated as of October 4,
1995 to the Stockholder Escrow Agreement.
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Date: November 2, 1995
/s/ Roger G. Fein *
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Gregory H. Parker
/s/ Roger G. Fein *
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F. Elizabeth Parker
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CUSIP NO. 093546 10 9 PAGE 4 OF 5 PAGES
/s/ Roger G. Fein
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Roger G. Fein, as Trustee of the
Gregory H. Parker Irrevocable Trust
dated October 31, 1988
/s/ Roger G. Fein *
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Anthony J. Romanovich
/s/ Roger G. Fein *
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Barbara A. Romanovich
/s/ Roger G. Fein *
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George W. Fleck
/s/ Roger G. Fein *
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Joan E. Fleck
/s/ Roger G. Fein *
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Gerald E. Brady
/s/ Roger G. Fein *
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Carole A. Brady
/s/ Roger G. Fein *
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William P. Daugherty, as Trustee
of the William P. Daugherty Trust
dated May 11, 1989
/s/ Roger G. Fein *
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Ellen L. Daugherty, as Trustee
of the Ellen L. Daugherty Trust
dated May 11, 1989
/s/ Roger G. Fein *
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Michael A. DeBias
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CUSIP NO. 093546 10 9 PAGE 5 OF 5 PAGES
/s/ Roger G. Fein *
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Richard M. Bogdon
/s/ Roger G. Fein *
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Phyllis Bogdon
/s/ Roger G. Fein *
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Carl H. Laib
/s/ Roger G. Fein *
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Richard W. Ressler
/s/ Roger G. Fein *
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Chester J. Pucilowski
/s/ Roger G. Fein *
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Geraldine Pucilowski
*By Roger G. Fein pursuant to power of attorney.
<PAGE>
AMENDMENT NO. 1 TO STOCK OPTION AGREEMENT
This is Amendment No. 1 dated as of October 4, 1995 ("Amendment No. 1") to
the Stock Option Agreement dated as of September 16, 1995 (the "First Option
Agreement"), by and among B & L Acquisition Corporation (the "Purchaser"), BRW
Steel Corporation ("Parent") and the Management Stockholders individually named
on Schedule A thereto (each an "Option Stockholder" or collectively, the "Option
Stockholders") of Bliss & Laughlin Industries Inc. (the "Company").
WHEREAS, the Purchaser, Parent and the Company have entered into an Amended
Agreement and Plan of Merger dated as of October 4, 1995 (the "Merger
Agreement"), and in connection therewith the parties hereto have agreed to amend
the First Option Agreement.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein and in the Merger Agreement, the parties hereto,
intending legally to be bound, do hereby agree as follows:
(1) Concurrently with the entering into of this Amendment No. 1, the
parties hereto agree to amend the First Option Agreement to read as
set forth in the Amended Stock Option Agreement attached hereto as
Exhibit A (the "Amended Stock Option Agreement"). Such amendments are
marked on Exhibit A by (i) underscoring words which are additions, and
(ii) indicating words eliminated by striking them through.
(2) As of the execution and delivery of this Amendment No. 1, Parent and
Purchaser shall execute and deliver an instrument releasing the Option
Stockholders and their respective affiliates, successors, assigns,
agents, representatives, advisors, attorneys and employees from any
claims, liabilities, damages and causes of action arising from any
breach or alleged breach of the First Option Agreement and the
Stockholder Escrow Agreements dated as of September 19, 1995, among
Purchaser, the Option Stockholders and LaSalle National Trust, N.A. as
Escrow Agent, in each case based upon acts or omissions occurring
prior to the date of this Amendment No. 1.
(3) The parties hereto acknowledge that prior to the date hereof William
P. Daugherty, as Trustee of the William P. Daugherty Trust dated May
11, 1989, and Ellen L. Daugherty, as Trustee of the Ellen L. Daugherty
Trust dated May 11, 1989, have deposited 33,228 and 25,450 Shares,
respectively (collectively, the "Daugherty Shares"), in escrow as
provided by the First Option Agreement. Accordingly, the Escrow Agent
has delivered to Gregory H. Parker his 58,678 Shares deposited in
escrow by him pending receipt of the Daugherty Shares.
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(4) Except as specifically provided otherwise in this Amendment No. 1, the
Amended Stock Option Agreement shall supercede and replace the First
Option Agreement.
(5) This Amendment No. 1 may be executed in counterparts, each of which
shall be deemed to be an original, but all of which shall constitute
one and the same agreement.
IN WITNESS WHEREOF, each of the parties has caused this Amendment No. 1 to
the Stock Option Agreement dated as of September 16, 1995 to be executed on its
behalf by its duly authorized representative, all as of the day and year first
above written.
BRW STEEL CORPORATION
By___________________________
Title________________________
B & L ACQUISITION CORPORATION
By___________________________
Title________________________
STOCKHOLDER
By___________________________
Title________________________
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AMENDED STOCK OPTION AGREEMENT
THIS AMENDED STOCK OPTION AGREEMENT (this "Agreement"), dated as of
October 4, 1995, by and among B&L ACQUISITION CORPORATION, a Delaware
corporation (the "Purchaser"), BRW STEEL CORPORATION, a Delaware corporation
("Parent"), and the Management Stockholders (who are individually named on
Schedule A hereto) of the Company (as defined below) who are parties to that
certain First Refusal Agreement (as defined in Section 2) (each Management
Stockholder, a "Stockholder"; collectively all the Management Stockholders, the
"Stockholders"), being the owner of certain shares of common stock, $.01 par
value per share (the "Common Stock"), of BLISS & LAUGHLIN INDUSTRIES INC., a
Delaware corporation (the "Company").
WHEREAS, the Purchaser, Parent and the Company are concurrently herewith
entering into an Amended Agreement and Plan of Merger dated as of the date
hereof (the "Merger Agreement"), which provides, upon the terms and subject to
the conditions thereof, for the merger of the Purchaser with and into the
Company (the "Merger").
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Purchaser desires to acquire an option from the Stockholders to
purchase an aggregate of 774,059 shares of Common Stock of the Company. The
number of such shares pertaining to each Stockholder is set forth opposite the
Stockholder's name on Schedule A hereto ( as to each Stockholder, the "Shares");
and in order to induce the Purchaser to proceed with the Merger, the
Stockholders desire to grant an option to the Purchaser to purchase the Shares,
all upon the terms and conditions of this Agreement.
WHEREAS, the taking of various steps which are necessary in order to
accomplish the Merger will require the Purchaser and the Company to spend
significant sums of money and use substantial amounts of time of their key
employees.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein and in the Merger Agreement, the parties hereto,
intending legally to be bound, do hereby agree as follows:
1. GRANT OF STOCK OPTION. The Stockholder hereby grants to the Purchaser
an exclusive and irrevocable option (the "Stock Option") to purchase during a
period commencing on the date hereof (the "Option Commencement Date"), subject
to the provisions of Section 3 below, and ending on the Termination Date
(hereinafter defined), the Shares at a price per share of $9.50, or any higher
price paid by Purchaser for a share of Common Stock of the Company in the Merger
or any other merger of the Company with Purchaser or Parent or in a tender offer
by Purchaser or Parent for shares of common stock of the Company, payable as
provided in Section 3 below (the "Purchase Price"). The Option Price shall be
paid in cash at the Closing (as hereinafter defined).
2. EXERCISE OF STOCK OPTION. Provided that (a) Stelco Inc. ("Stelco")
has not purchased the Shares pursuant to the exercise of Stelco's rights under
Section 3.3 or 3.4 of the Right of First Refusal and Standstill Agreement dated
May 11, 1990 (the "First Refusal
EXHIBIT A
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Agreement") (such purchase a "First Refusal Purchase"), (b) no preliminary or
permanent injunction or other order issued by any federal or state court of
competent jurisdiction in the Untied States of America shall be in effect which
would prohibit the purchase or delivery of Shares hereunder and (c) any
applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 (the "HSR Act") shall have expired with respect to such purchase and
delivery, the Purchaser may exercise the Stock Option, in whole, at any time or
from time to time, from the Option Commencement Date until that date (the
"Termination Date") which is the earlier of (i) January 15, 1996, or
(ii) termination of the Merger Agreement due to a material breach by the
Purchaser of its obligations under the Merger Agreement. Stockholder agrees
that if, prior to the first anniversary of the date of this Agreement, the
Stockholder or any assignee of the Stockholder or the Company enters into an
agreement to sell or exchange all or substantially all of the Common Stock of
the Company held by the Stockholder or any affiliate of the Stockholder to or
with a third party (including any such sale or exchange pursuant to a merger, or
a tender or exchange offer), Stockholder or any assignee of the Stockholder will
promptly pay Purchaser an amount equal to fifty percent (50%) of the difference
between the Subsequent Share Price (as defined below) received for the Shares in
such subsequent transaction and the product of $7.75 and the number of Shares.
For the purposes of this Section 2, "Subsequent Share Price" shall mean the sum
of the aggregate consideration received by the Stockholder or any assignee of
the Stockholder in the transaction reduced by the expenses and out-of-pocket
fees incurred by Stockholder or its affiliates or on their behalf in connection
with the sale of the Shares. If the Stockholder or any assignee of the
Stockholder or the Company receives consideration other than cash, the
Stockholder may elect to pay the amount due the Purchaser under this Section 2
in like kind consideration or in cash. Prior to the Termination Date, other
than as permitted in Section 4 below, the Stockholder will not take, and will
refrain from taking, any action which would have the effect of preventing or
disabling the Stockholder from delivering the Shares to the Purchaser upon
exercise of the Stock Option or from otherwise performing its obligations under
this Agreement. Anything in this Agreement to the contrary notwithstanding,
this Stock Option may not be exercised and no Stockholder may transfer his, her
or its Shares hereunder unless all Shares of all Stockholders are purchased and
acquired, it being understood and agreed that the payment of the Purchase Price
for all Shares of all Stockholders shall be an express condition to the purchase
of any Shares of any individual Stockholder hereunder.
3. DELIVERY OF SHARES; ESCROW ARRANGEMENTS; PAYMENT FOR SHARES. The
Stockholders have delivered in escrow to LaSalle National Trust, N.A. (the
"Escrow Agent") pursuant to Stockholder Escrow Agreements dated as of
September 19, 1995 by and among the Purchaser, each Stockholder and the Escrow
Agent, (i) duly executed share certificates representing the Shares accompanied
by stock powers endorsed in blank and with signatures guaranteed and such other
documents as may be reasonably necessary to transfer record ownership of Shares
into the Purchaser's name on the stock transfer books of the Company or
(ii) book confirmation of the transfer of Shares to the account of the Escrow
Agent or its nominee with the Depository Trust Company. If this Agreement is
terminated, the unpurchased Shares and any certificates for the unpurchased
shares
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and related stock powers and other documents shall be returned to the
Stockholder within two business days following such termination; provided,
however, if a cancellation fee and expenses are owed under Section 14 hereof,
the Shares shall remain in the account of the Escrow Agent until the Stockholder
has paid such cancellation fee and expenses in full. The Stockholder and
Purchaser agree to enter into an Amendment No. 1 to Stockholder Escrow Agreement
with the Escrow Agent, substantially in the form of Attachment A hereto. At any
Closing hereunder, the Purchaser shall deliver an aggregate principal amount of
$9.50, or any higher price paid by Purchaser for a share of Common Stock of the
Company in the Merger or any other merger of the Company with Purchaser or
Parent or in a tender offer by Purchaser or Parent for shares of common stock of
the Company, times the number of Shares being purchased (the "Exercised Option
Shares") in cash or a certified or cashier's check or by wire transfer of
immediately available funds to a bank account designated by the Escrow Agent
(the "Purchase Price"), for distribution to Stockholder in compliance with the
terms of the Escrow Agreement.
4. COVENANTS OF THE STOCKHOLDER. Except in accordance with the
provisions of this Agreement, the Stockholder agrees, until the Termination
Date, not to:
(a) sell, transfer, pledge, assign or otherwise dispose of, or enter
into any contract, option or other transfer, pledge, assignment or other
disposition of, any Shares, except that (i) if required by the terms of the
First Refusal Agreement, the Stockholder may sell the Shares to Stelco
pursuant to a First Refusal Purchase, or (ii) the Stockholder, upon a
minimum of three (3) days prior written notice to the Purchaser and upon
expiration of any rights Stelco may have to purchase the Shares under the
First Refusal Agreement, may sell or transfer the Shares to a purchaser or
transferee that is a citizen of the United States of America or Canada and
executes with the Purchaser an agreement containing the same terms hereof;
provided, however, that no sale or transfer shall be permitted hereunder to
any purchaser or transferee that Parent believes, in its reasonable
judgment, intends or may intend to engage in any transaction which may
involve a change of control such as a merger, reorganization or acquisition
of the Company, other than the transactions contemplated by the Merger
Agreement or this Agreement;
(b) acquire any additional shares of Common Stock without the prior
written consent of Purchaser other than pursuant to the exercise of
existing stock options or similar rights;
(c) enter into a voting agreement with respect to any Shares; or
(d) directly or indirectly, initiate discussions or engage in
negotiations with any corporation, partnership, person or other entity or
group (other than Purchaser) concerning any possible acquisition of the
Shares or any possible merger, purchase of assets, purchase of stock or
similar transactions involving the Company or any major asset of the
Company.
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5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND PARENT. The
Purchaser and Parent jointly and severally hereby represent and warrant to the
Stockholder as follows:
(a) AUTHORITY RELATIVE TO THIS AGREEMENT. The Purchaser and Parent
each is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Purchaser and Parent each has
full corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. This Agreement has
been duly authorized by all necessary corporate action on the part of the
Purchaser and Parent, has been validly executed and delivered by a duly
authorized officer of the Purchaser and Parent, and constitutes a valid and
binding agreement of the Purchaser and Parent, enforceable against the
Purchaser and Parent in accordance with its terms.
(b) NO APPROVALS OR NOTICES REQUIRED; NO CONFLICT WITH INSTRUMENTS TO
WHICH PURCHASER OR PARENT IS PARTY. The execution and delivery of this
Agreement and the performance by Parent or Purchaser of their respective
obligations hereunder will not (i) violate the charter or bylaws of Parent
or Purchaser; (ii) assuming satisfaction of the requirements set forth in
clause (iii) below, violate any provision of law applicable to Parent or
Purchaser; (iii) except for (1) requirements under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and requirements, if any,
arising out of the HSR Act, require any consent, approval, filing or notice
under any provision of law applicable to Parent or Purchaser or any of
Parent's other subsidiaries; or (iv) require any consent, approval or
notice under, or violate or constitute a default under, or permit the
termination of any provision of, or result in the acceleration of the
maturity or performance of any obligation of, or result in the creation or
imposition of any lien upon any properties, assets or businesses of, Parent
or Purchaser or any of Parent's other subsidiaries under, any note, bond,
indenture, mortgage, deed of trust, lease, franchise, permit,
authorization, license, contract, instrument or other agreement or
commitment, or any order, judgment or decree, to which Parent or Purchaser
or any of Parent's other subsidiaries is a party or by which Parent,
Purchaser or any of Parent's other subsidiaries or any of the assets or
properties of Parent, Purchaser or any of Parent's other subsidiaries is
bound or encumbered, which in any of the foregoing cases would have a
material adverse effect on Parent and its subsidiaries taken as a whole or
would prohibit or interfere with the consummation of this Agreement.
(c) DISTRIBUTION. The Purchaser will acquire the Shares upon
exercise of the Stock Option for its own account and not with a view to any
resale or distribution thereof and will not sell the Shares unless such
Shares are registered under the Securities Act of 1933 (the "Securities
Act") or unless an exemption from registration is available.
(d) RESALE PRIOR TO THE EFFECTIVE TIME. Purchaser agrees that, if
prior to the earlier of the Effective Time (as defined in the Merger
Agreement) or the first anniversary of the date of this Agreement, the
Purchaser or any assignee of the Purchaser or the Company enters into an
agreement to sell or exchange all or substantially all of
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the Common Stock of the Company held by the Purchaser or an affiliate of
the Purchaser to or with an unaffiliated third party, Purchaser or any
assignee of the Purchaser will promptly pay Stockholder an amount equal to
fifty percent (50%) of the difference between the Subsequent Share Price
(as defined below) received for such subsequent transaction and the product
of $9.50 times the number of Shares. For the purposes of this Section
5(d), "Subsequent Share Price" shall mean the sum of the aggregate
consideration received by the Purchaser or any assignee of the Purchaser in
the transaction attributable to the Shares reduced by the expenses and out
of pocket fees incurred by Purchaser or its affiliates or on their behalf
in connection with the sale of the Shares. If the Purchaser or any
assignee of the Purchaser receives consideration other than cash, the
Purchaser may elect to pay the amount due the Stockholder under this
Section 5(d) in like kind consideration or in cash.
(e) RESALE SUBSEQUENT TO THE EFFECTIVE TIME. Subsequent to the
Effective Time, Purchaser agrees that, if prior to the first anniversary of
the date of this Agreement, the Purchaser or any assignee of the Purchaser,
the Company or the Surviving Corporation (as defined in the Merger
Agreement) enters into an agreement to (i) sell or exchange all or
substantially all of the Common Stock of the Company or the Surviving
Corporation to or with, or (ii) merge or consolidate the Company or the
Surviving Corporation to, an unaffiliated third party, Purchaser or any
assignee of the Purchaser, the Company and the Surviving Corporation will
jointly promptly pay Stockholder an amount equal to fifty percent (50%) of
the product of (y) the difference between the Aggregate Transaction Value
(as defined below) received for such subsequent transaction and
$62,000,000 and (z) a fraction, the numerator of which is the number of
Shares and the denominator of which is the number equal to the total of
(1) the number of shares of Common Stock of the Company issued and
outstanding as of the Effective Time plus (2) the number of shares of
Common Stock of the Company underlying stock options for which the option
holder is entitled to payment under Section 1.3(e) of the Merger Agreement
plus (3) the number of share equivalents for which the participant under
the Directors' Deferred Compensation Plan is entitled to payment under
Section 1.3(f) of the Merger Agreement. For the purposes of this
Section 5(e), "Aggregate Transaction Value" shall mean the sum of the
aggregate consideration received by the sellers in the transaction (reduced
by the present value of any future or contingent obligations retained by
the sellers) plus the aggregate liabilities assumed by the acquiring party
in the transaction. If the Purchaser or any assignee of the Purchaser, the
Company or the Surviving Corporation receives consideration other than
cash, the Purchaser may elect to pay the amount due the Stockholder under
this Section 5(e) in like kind consideration or in cash.
6. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. The Stockholder
represents and warrants to the Purchaser the following:
(a) TITLE TO SHARES. The Stockholder has good and marketable title
to the Shares, not subject to any hypothecation, pledge or lien, with no
restrictions on voting
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rights and other incidents of record and beneficial ownership incident
thereto, and the absolute right to grant Purchaser the option to purchase
the Shares and the right to sell and transfer the Shares to the Purchaser
free and clear of all claims, liens, pledges, security interests,
restrictions or encumbrances of any nature whatsoever, except for the
restrictions under the First Refusal Agreement. Solely for the purposes of
this Agreement and the Merger, Stockholder hereby waives and agrees not to
assign his rights of first refusal under all First Refusal Agreements to
which he or it and other stockholders of the Company are parties, provided
that such waiver and agreement not to assign terminate when this Agreement
terminates. On consummation of the transactions contemplated by this
Agreement in accordance with the terms hereof, the Purchaser will acquire
good and marketable title to the Shares free and clear of all claims,
liens, pledges, security interests, resolutions or encumbrances of any
nature whatsoever except for the rights of first refusal held by other
Stockholders of the Company under First Refusal Agreements.
(b) AUTHORIZATION AND VALIDITY. The Stockholder has the power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement constitutes a valid and
binding agreement of the Stockholder, enforceable in accordance with its
terms.
(c) COMPLIANCE WITH INSTRUMENTS. Neither the execution or delivery
of this Agreement nor the consummation by the Stockholder of the
transactions contemplated hereby will violate any provisions of any law
applicable to the Stockholder or agreement to which the Stockholder is a
party, except for any rights of first refusal held by other Stockholders of
the Company under First Refusal Agreements.
(d) SUPPORT OF MERGER. The Stockholder agrees that he will vote all
of his Shares in favor of the Merger Agreement at any Stockholders Meeting
at which it is discussed, and at any adjournment thereof; provided however,
that Stockholder shall not have to vote in favor of the Merger Agreement if
it has been terminated.
7. COMPANY ACTIONS. If the Stockholder is a director of the Company or
an officer or stockholder of the Company that is a reporting person under
Section 16 of the Exchange Act, the Stockholder agrees to use his best efforts
during the term of this Agreement to prevent the Company, its Board of
Directors, its officers and its subsidiaries from:
(a) issuing additional capital stock except pursuant to existing
option plans or arrangements;
(b) approving a stock split, reverse stock split, recapitalization,
or other similar action which would result in an overall adjustment of the
number of outstanding shares of the Company's Common Stock;
(c) increasing the dividend on the Company's Common Stock;
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(d) issuing additional stock options or appreciation rights;
(e) selling any assets, except in the normal course of business and
except for assets presently under contract for sale; and
(f) issuing or incurring additional debt, except in the normal course
of business.
8. HSR FILING. Promptly after the date hereof, and from time to time
thereafter if necessary, the Purchaser and each Stockholder if required shall
file with the Federal Trade Commission and the Antitrust Division of the United
States Department of Justice all required pre-merger notification and report
forms and other documents and exhibits required to be filed under the HSR Act to
permit the purchase of the Shares subject to the Stock Option.
9. UNITARY TRANSACTION. The parties hereto intend that this Agreement
and the Merger Agreement shall constitute a single unified transaction for the
acquisition of the Company by Purchaser. In accordance with that intention,
Purchaser represents the following:
(a) Purchaser was not an affiliate of and had no affiliation with the
Company at any time prior to the execution of this Agreement and the Merger
Agreement or the prior Agreement and Plan of Merger and prior Stock Option
Agreement both dated September 16, 1995;
(b) Purchaser shall purchase all shares of Common Stock pursuant to
this Agreement and the Merger Agreement at the same price per share; and
(c) Purchaser shall make no attempt to change the management of,
alter the operation of, or exercise control over the Company prior to the
Effective Time or termination of the Merger Agreement.
10. CERTAIN UNDERTAKINGS.
(a) The Stockholder hereby agrees that, during the term of this
Agreement, at any meeting of the stockholders of the Company, however
called, and in any action by written consent of the stockholders of the
Company, the Stockholder shall (a) vote the Shares in favor of the Merger;
(b) not vote the Shares in favor of any action or agreement which would
result in a breach in any material respect of any covenant, representation
or warranty or any other obligation of the Company under the Merger
Agreement; and (c) vote the Shares against any action or agreement which
would impede, interfere with or attempt to discourage the Merger,
including, but not limited to: (i) any extraordinary corporate
transaction, such as a merger, reorganization or liquidation involving the
Company or any of its subsidiaries; (ii) a sale or transfer of a material
amount of assets of the Company or any of its subsidiaries; (iii) any
change in the management or board of directors of the Company, except as
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<PAGE>
otherwise agreed to in writing by Purchaser; (iv) any material change in
the present capitalization or dividend policy of the Company; or (v) any
other material change in the Company's corporate structure or business;
provided however, that Stockholder shall not have to take any action
specified above in this Section 10 if the Merger Agreement has been
terminated by Purchaser or Parent.
(b) Each Stockholder shall use its best efforts to cause the
restrictions on transfer and the rights of first refusal applicable to such
Stockholder's Shares under the First Refusal Agreement to terminate, so as
to cause such Stockholder's obligations under this Agreement to become
unconditional and to permit the sale to Purchaser of such Stockholder's
Shares hereunder. The Stockholders shall furnish Purchaser with copies of
all information, correspondence and other documents furnished to or by
Stelco or its counsel by or to the Stockholders, the Company or their
counsel (as the case may be), and shall promptly inform Purchaser of all
actions taken by the Stockholders or Stelco with respect to compliance with
the First Refusal Agreement, including efforts to dispose of or settle the
pending lawsuit No. 95 C 5426 in the U.S. District Court for the Northern
District of Illinois.
11. ADJUSTMENTS. In the event of any increase or decrease or other change
in the Common Stock by reason of stock dividends, split-up, recapitalizations,
combinations, exchanges of shares or the like, the number of shares of Common
Stock subject to the Stock Option and the per Share Purchase Price shall be
equitably adjusted appropriately.
12. LEGEND. As soon as practicable after the execution of this Agreement,
the Stockholder shall cause the following legend to be placed on the
certificates representing the Shares:
"The Shares of common stock represented by this certificate
are subject to an Amended Stock Option Agreement, dated as
of October 4, 1995, with B & L Acquisition Corporation and
BRW Steel Corporation."
Upon termination of this Agreement Stockholder will remove such legend on
any Shares returned to him; and Purchaser will cooperate therewith.
13. GUARANTEE: Parent hereby fully and unconditionally guarantees each
and every representation, warranty and obligation of the Purchaser hereunder and
of any assignee of the Purchaser.
14. CANCELLATION FEE. (a) If Stelco exercises its rights under the First
Refusal Agreement to purchase the Shares, or (b) if prior to January 15, 1996
the Board of Directors of the Company terminates the Merger Agreement pursuant
to Section 6.1(c)(ii) of the Merger Agreement and a transaction is subsequently
consummated, or (c) if prior to January 15, 1996 a tender or exchange
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<PAGE>
offer shall have been commenced by any party to acquire twenty percent (20%) or
more of the capital stock of the Company at a price in excess of $9.50, which
tender or exchange offer is subsequently consummated, then, upon consummation of
Stelco's purchase with respect to clause (a) above or within five (5) business
days of the consummation of the transaction in the case of clause (b) or (c)
above, the Stockholder shall pay to the Purchaser, a cash cancellation fee equal
to the product of (i) the sum of one million two hundred fifty thousand dollars
($1,250,000) plus all out of pocket fees and expenses incurred by Purchaser,
Parent or their affiliates or on their behalf in connection with the Merger and
the transactions contemplated hereby (such out of pocket fees and expenses not
to exceed two hundred fifty thousand dollars ($250,000)) and (ii) a fraction,
the numerator of which is the number of Shares and the denominator of which is
774,059.
15. REMEDIES. The parties agree that the Purchaser would be irreparably
damaged if for any reason the Stockholder failed to deliver any of the Shares
upon exercise of the Stock Option or to perform any of its other obligations
under this Agreement, and that the Purchaser would not have an adequate remedy
at law for money damages in such event. Accordingly, the Purchaser shall be
entitled to specific performance and injunctive and other equitable relief to
enforce the performance hereof by the Stockholder. This provision is without
prejudice to any other Stockholder. This provision is without prejudice to any
other rights that the Purchaser may have against the Stockholder for any failure
to perform its obligations under this Agreement.
16. ENTIRE AGREEMENT; ASSIGNMENT; AMENDMENT. This Agreement constitutes
the entire agreement of the parties with respect to the subject matter hereof
and supersedes all other prior agreements and understandings, both written and
oral, of the parties with respect to such subject matter. Purchaser may assign
any or all of its rights and obligations hereunder to any wholly-owned affiliate
of Purchaser or Parent. This Agreement may not be modified, amended, altered or
supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
17. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
18. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be furnished by hand
delivery, by telegram or telex or FAX, or by mail (registered or certified,
postage prepaid, return receipt requested) to the parties at the addresses set
forth below or, if to the Escrow Agent, at its address set forth in the Escrow
Agreement. Any such notice shall be deemed duly given upon the date it is
actually received by the party to whom notice is intended to be given or is
actually delivered at its address as shown below or, if to the Escrow Agent, at
its address set forth in the Escrow Agreement:
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<PAGE>
If to the Purchaser or Parent:
B&L Acquisition Corporation
4 Northshore Center
Pittsburgh, PA 15212
Attention: President
With a copy to:
BRW Steel Corporation
c/o Veritas Capital, Inc.
Ten East Fiftieth Street
New York, NY 10022
Attention: Co-Chairman
-and-
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, NY 10022
Attention: Robert A. Profusek, Esq.
If to the Stockholder:
At the address set forth for the Stockholder on Schedule B
hereto.
With a copy to the Company at:
Bliss & Laughlin Industries Inc.
281 East 155th Street
Harvey, IL 60426
Attention: President
With copies to:
Company's Counsel
Wildman, Harrold, Allen & Dixon
225 West Wacker Drive, #3000
Chicago, Illinois 60606
Attention: Roger G. Fein
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
19. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware, without reference to
principles of conflicts of laws.
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<PAGE>
20. DESCRIPTIVE HEADINGS. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
21. PARTIES IN INTEREST. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person or entity any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
22. TIME OF THE ESSENCE. The parties agree that time shall be of the
essence in the performance of obligations hereunder.
23. BROKERS. Each party hereby represents and warrants to the other that
no broker or finder claiming through him is entitled to a fee in connection with
the sale of Shares hereunder, except for The Chicago Corporation whose fee will
be paid by the Company.
24. AGREEMENTS WITH OTHER STOCKHOLDERS. Purchaser agrees that if it
executes a Stock Option Agreement with any other stockholder of the Company
having terms more favorable to such stockholder than the terms of this Agreement
are to Stockholder, it will promptly amend this Agreement to include such more
favorable terms. Stockholder hereby appoints as his lawful attorney-in-fact
Gregory H. Parker to execute any and all notices and other communications under
the First Refusal Agreement as such attorney-in-fact shall execute in his sole
discretion.
25. JURISDICTION. Any judicial proceeding brought against any of the
parties to this Agreement with respect to any dispute arising out of this
Agreement or any matter related hereto may be brought in the courts of the State
of Illinois located in Chicago, Illinois, or in the United States District Court
in Chicago, Illinois, and, by execution and delivery of this Agreement, each of
the parties to this Agreement accepts the exclusive jurisdiction of such courts,
and irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Agreement. The foregoing consents shall not constitute
general consents to service of process in the State of Illinois for any purpose
except as provided above and shall not be deemed to confer rights to any Person
other than the respective parties to this Agreement.
26. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.
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<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its duly authorized representative, all as of the day
and year first above written.
BRW STEEL CORPORATION
By: ____________________________
Title: ____________________________
B & L ACQUISITION CORPORATION
By: ____________________________
Title: ____________________________
STOCKHOLDER
By: ____________________________
Title: ____________________________
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<PAGE>
SCHEDULE A
NAME OF STOCKHOLDER NUMBER OF SHARES
Gregory H. Parker. . . . . . . . . . . . . . . . . . . . . . . . . . . . 142,380
Roger G. Fein, as Trustee of the Gregory H. Parker
Irrevocable Family Trust under Trust Agreement
dated October 31, 1988. . . . . . . . . . . . . . . . . . . . . . . 76,349
F. Elizabeth Parker. . . . . . . . . . . . . . . . . . . . . . . . . . . 25,450
Anthony J. Romanovich. . . . . . . . . . . . . . . . . . . . . . . . . . 80,183
Barbara A. Romanovich. . . . . . . . . . . . . . . . . . . . . . . . . . 26,976
George W. Fleck. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,222
Joan E. Fleck. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,450
Gerald E. Brady. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35,773
Carole A. Brady. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,905
William P. Daugherty, as Trustee of the
William P. Daugherty Trust dated May 11, 1989 . . . . . . . . . . . 33,228
Ellen L. Daugherty, as Trustee of the
Ellen L. Daugherty Trust dated May 11, 1989 . . . . . . . . . . . . 25,450
Michael A. DeBias. . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,677
Chester J. Pucilowski. . . . . . . . . . . . . . . . . . . . . . . . . . 29,665
Geraldine Pucilowski . . . . . . . . . . . . . . . . . . . . . . . . . . 29,013
Richard M. Bogdon. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,480
Phyllis Bogdon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,180
Carl H. Laib . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,339
Richard W. Ressler . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,339
------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 774,059
-------
-------
<PAGE>
SCHEDULE B
Gregory H. Parker
20091 Tam O Shanter
Olympia Fields, IL 60461
F. Elizabeth Parker
20091 Tam O Shanter
Olympia Fields, IL 60461
Roger G. Fein, as Trustee of the Gregory H. Parker
Irrevocable Trust dated October 31, 1988
225 W. Wacker Drive, #3000
Chicago, IL 60606
Anthony J. Romanovich
2530 Glen Eagles Drive
Olympia Fields, IL 60461
Barbara A. Romanovich
2530 Glen Eagles Drive
Olympia Fields, IL 60461
George W. Fleck
1109 Brassie
Flossmoor, IL 60422
Joan E. Fleck
1109 Brassie
Flossmoor, IL 60422
Gerald E. Brady
1745 Winola Court
Naperville, IL 60565
Carole A. Brady
1745 Winola Court
Naperville, IL 60565
William P. Daugherty, as Trustee of the
William P. Daugherty Trust dated May 11, 1989
3452 Huntington Terrace
Crete, IL 60417
<PAGE>
Ellen L. Daugherty, as Trustee of the
Ellen L. Daugherty Trust dated May 11, 1989
3452 Huntington Terrace
Crete, IL 60417
Michael A. DeBias
7132 West 64th Place
Chicago, IL 60638
Richard M. Bogdon
2029 Dorchester Lane
Schererville, IN 46375
Phyllis Bogdon
2029 Dorchester Lane
Schererville, IN 46375
Carl H. Laib
11588 96th Avenue
St. John, IN 46373
Richard W. Ressler
5156 Andrus Avenue
North Olmsted, OH 44070
Chester J. Pucilowski
860 Smokerise Drive
Medina, OH 44256
Geraldine Pucilowski
860 Smokerise Drive
Medina, OH 44256
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<PAGE>
AMENDED STOCK OPTION AGREEMENT
THIS AMENDED STOCK OPTION AGREEMENT (this "Agreement"), dated as of
October 4, 1995, by and among B&L ACQUISITION CORPORATION, a Delaware
corporation (the "Purchaser"), BRW STEEL CORPORATION, a Delaware corporation
("Parent"), and the Management Stockholders (who are individually named on
Schedule A hereto) of the Company (as defined below) who are parties to that
certain First Refusal Agreement (as defined in Section 2) (each Management
Stockholder, a "Stockholder"; collectively all the Management Stockholders, the
"Stockholders"), being the owner of certain shares of common stock, $.01 par
value per share (the "Common Stock"), of BLISS & LAUGHLIN INDUSTRIES INC., a
Delaware corporation (the "Company").
WHEREAS, the Purchaser, Parent and the Company are concurrently herewith
entering into an Amended Agreement and Plan of Merger dated as of the date
hereof (the "Merger Agreement"), which provides, upon the terms and subject to
the conditions thereof, for the merger of the Purchaser with and into the
Company (the "Merger").
WHEREAS, as a condition to its willingness to enter into the Merger
Agreement, the Purchaser desires to acquire an option from the Stockholders to
purchase an aggregate of 774,059 shares of Common Stock of the Company. The
number of such shares pertaining to each Stockholder is set forth opposite the
Stockholder's name on Schedule A hereto ( as to each Stockholder, the "Shares");
and in order to induce the Purchaser to proceed with the Merger, the
Stockholders desire to grant an option to the Purchaser to purchase the Shares,
all upon the terms and conditions of this Agreement.
WHEREAS, the taking of various steps which are necessary in order to
accomplish the Merger will require the Purchaser and the Company to spend
significant sums of money and use substantial amounts of time of their key
employees.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein and in the Merger Agreement, the parties hereto,
intending legally to be bound, do hereby agree as follows:
1. GRANT OF STOCK OPTION. The Stockholder hereby grants to the Purchaser
an exclusive and irrevocable option (the "Stock Option") to purchase during a
period commencing on the date hereof (the "Option Commencement Date"), subject
to the provisions of Section 3 below, and ending on the Termination Date
(hereinafter defined), the Shares at a price per share of $9.50, or any higher
price paid by Purchaser for a share of Common Stock of the Company in the Merger
or any other merger of the Company with Purchaser or Parent or in a tender offer
by Purchaser or Parent for shares of common stock of the Company, payable as
provided in Section 3 below (the "Purchase Price"). The Option Price shall be
paid in cash at the Closing (as hereinafter defined).
<PAGE>
2. EXERCISE OF STOCK OPTION. Provided that (a) Stelco Inc. ("Stelco")
has not purchased the Shares pursuant to the exercise of Stelco's rights under
Section 3.3 or 3.4 of the Right of First Refusal and Standstill Agreement dated
May 11, 1990 (the "First Refusal Agreement") (such purchase a "First Refusal
Purchase"), (b) no preliminary or permanent injunction or other order issued by
any federal or state court of competent jurisdiction in the Untied States of
America shall be in effect which would prohibit the purchase or delivery of
Shares hereunder and (c) any applicable waiting period under the Hart-Scott-
Rodino Antitrust Improvements Act of 1976 (the "HSR Act") shall have expired
with respect to such purchase and delivery, the Purchaser may exercise the Stock
Option, in whole, at any time or from time to time, from the Option Commencement
Date until that date (the "Termination Date") which is the earlier of
(i) January 15, 1996, or (ii) termination of the Merger Agreement due to a
material breach by the Purchaser of its obligations under the Merger Agreement.
Stockholder agrees that if, prior to the first anniversary of the date of this
Agreement, the Stockholder or any assignee of the Stockholder or the Company
enters into an agreement to sell or exchange all or substantially all of the
Common Stock of the Company held by the Stockholder or any affiliate of the
Stockholder to or with a third party (including any such sale or exchange
pursuant to a merger, or a tender or exchange offer), Stockholder or any
assignee of the Stockholder will promptly pay Purchaser an amount equal to fifty
percent (50%) of the difference between the Subsequent Share Price (as defined
below) received for the Shares in such subsequent transaction and the product of
$7.75 and the number of Shares. For the purposes of this Section 2, "Subsequent
Share Price" shall mean the sum of the aggregate consideration received by the
Stockholder or any assignee of the Stockholder in the transaction reduced by the
expenses and out-of-pocket fees incurred by Stockholder or its affiliates or on
their behalf in connection with the sale of the Shares. If the Stockholder or
any assignee of the Stockholder or the Company receives consideration other than
cash, the Stockholder may elect to pay the amount due the Purchaser under this
Section 2 in like kind consideration or in cash. Prior to the Termination Date,
other than as permitted in Section 4 below, the Stockholder will not take, and
will refrain from taking, any action which would have the effect of preventing
or disabling the Stockholder from delivering the Shares to the Purchaser upon
exercise of the Stock Option or from otherwise performing its obligations under
this Agreement. Anything in this Agreement to the contrary notwithstanding,
this Stock Option may not be exercised and no Stockholder may transfer his, her
or its Shares hereunder unless all Shares of all Stockholders are purchased and
acquired, it being understood and agreed that the payment of the Purchase Price
for all Shares of all Stockholders shall be an express condition to the purchase
of any Shares of any individual Stockholder hereunder.
3. DELIVERY OF SHARES; ESCROW ARRANGEMENTS; PAYMENT FOR SHARES. The
Stockholders have delivered in escrow to LaSalle National Trust, N.A. (the
"Escrow Agent") pursuant to Stockholder Escrow Agreements dated as of
September 19, 1995 by and among the Purchaser, each Stockholder and the Escrow
Agent, (i) duly executed share certificates representing the Shares accompanied
by stock powers endorsed in blank and with signatures guaranteed and such other
documents as may be reasonably necessary to transfer record ownership of Shares
into the Purchaser's name on the stock transfer books of the Company or
(ii) book confirmation of the transfer of Shares to the account of the Escrow
Agent or its
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<PAGE>
nominee with the Depository Trust Company. If this Agreement is terminated, the
unpurchased Shares and any certificates for the unpurchased shares and related
stock powers and other documents shall be returned to the Stockholder within two
business days following such termination; provided, however, if a cancellation
fee and expenses are owed under Section 14 hereof, the Shares shall remain in
the account of the Escrow Agent until the Stockholder has paid such cancellation
fee and expenses in full. The Stockholder and Purchaser agree to enter into an
Amendment No. 1 to Stockholder Escrow Agreement with the Escrow Agent,
substantially in the form of Attachment A hereto. At any Closing hereunder, the
Purchaser shall deliver an aggregate principal amount of $9.50, or any higher
price paid by Purchaser for a share of Common Stock of the Company in the Merger
or any other merger of the Company with Purchaser or Parent or in a tender offer
by Purchaser or Parent for shares of common stock of the Company, times the
number of Shares being purchased (the "Exercised Option Shares") in cash or a
certified or cashier's check or by wire transfer of immediately available funds
to a bank account designated by the Escrow Agent (the "Purchase Price"), for
distribution to Stockholder in compliance with the terms of the Escrow
Agreement.
4. COVENANTS OF THE STOCKHOLDER. Except in accordance with the
provisions of this Agreement, the Stockholder agrees, until the Termination
Date, not to:
(a) sell, transfer, pledge, assign or otherwise dispose of, or enter
into any contract, option or other transfer, pledge, assignment or other
disposition of, any Shares, except that (i) if required by the terms of the
First Refusal Agreement, the Stockholder may sell the Shares to Stelco
pursuant to a First Refusal Purchase, or (ii) the Stockholder, upon a
minimum of three (3) days prior written notice to the Purchaser and upon
expiration of any rights Stelco may have to purchase the Shares under the
First Refusal Agreement, may sell or transfer the Shares to a purchaser or
transferee that is a citizen of the United States of America or Canada and
executes with the Purchaser an agreement containing the same terms hereof;
provided, however, that no sale or transfer shall be permitted hereunder to
any purchaser or transferee that Parent believes, in its reasonable
judgment, intends or may intend to engage in any transaction which may
involve a change of control such as a merger, reorganization or acquisition
of the Company, other than the transactions contemplated by the Merger
Agreement or this Agreement;
(b) acquire any additional shares of Common Stock without the prior
written consent of Purchaser other than pursuant to the exercise of
existing stock options or similar rights;
(c) enter into a voting agreement with respect to any Shares; or
(d) directly or indirectly, initiate discussions or engage in
negotiations with any corporation, partnership, person or other entity or
group (other than Purchaser) concerning any possible acquisition of the
Shares or any possible merger, purchase of
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<PAGE>
assets, purchase of stock or similar transactions involving the Company or any
major asset of the Company.
5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER AND PARENT. The
Purchaser and Parent jointly and severally hereby represent and warrant to the
Stockholder as follows:
(a) AUTHORITY RELATIVE TO THIS AGREEMENT. The Purchaser and Parent
each is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Purchaser and Parent each has
full corporate power and authority to execute and deliver this Agreement
and to consummate the transactions contemplated hereby. This Agreement has
been duly authorized by all necessary corporate action on the part of the
Purchaser and Parent, has been validly executed and delivered by a duly
authorized officer of the Purchaser and Parent, and constitutes a valid and
binding agreement of the Purchaser and Parent, enforceable against the
Purchaser and Parent in accordance with its terms.
(b) NO APPROVALS OR NOTICES REQUIRED; NO CONFLICT WITH INSTRUMENTS TO
WHICH PURCHASER OR PARENT IS PARTY. The execution and delivery of this
Agreement and the performance by Parent or Purchaser of their respective
obligations hereunder will not (i) violate the charter or bylaws of Parent
or Purchaser; (ii) assuming satisfaction of the requirements set forth in
clause (iii) below, violate any provision of law applicable to Parent or
Purchaser; (iii) except for (1) requirements under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and requirements, if any,
arising out of the HSR Act, require any consent, approval, filing or notice
under any provision of law applicable to Parent or Purchaser or any of
Parent's other subsidiaries; or (iv) require any consent, approval or
notice under, or violate or constitute a default under, or permit the
termination of any provision of, or result in the acceleration of the
maturity or performance of any obligation of, or result in the creation or
imposition of any lien upon any properties, assets or businesses of, Parent
or Purchaser or any of Parent's other subsidiaries under, any note, bond,
indenture, mortgage, deed of trust, lease, franchise, permit,
authorization, license, contract, instrument or other agreement or
commitment, or any order, judgment or decree, to which Parent or Purchaser
or any of Parent's other subsidiaries is a party or by which Parent,
Purchaser or any of Parent's other subsidiaries or any of the assets or
properties of Parent, Purchaser or any of Parent's other subsidiaries is
bound or encumbered, which in any of the foregoing cases would have a
material adverse effect on Parent and its subsidiaries taken as a whole or
would prohibit or interfere with the consummation of this Agreement.
(c) DISTRIBUTION. The Purchaser will acquire the Shares upon
exercise of the Stock Option for its own account and not with a view to any
resale or distribution thereof and will not sell the Shares unless such
Shares are registered under the Securities Act of 1933 (the "Securities
Act") or unless an exemption from registration is available.
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<PAGE>
(d) RESALE PRIOR TO THE EFFECTIVE TIME. Purchaser agrees that, if
prior to the earlier of the Effective Time (as defined in the Merger
Agreement) or the first anniversary of the date of this Agreement, the
Purchaser or any assignee of the Purchaser or the Company enters into an
agreement to sell or exchange all or substantially all of the Common Stock
of the Company held by the Purchaser or an affiliate of the Purchaser to or
with an unaffiliated third party, Purchaser or any assignee of the
Purchaser will promptly pay Stockholder an amount equal to fifty percent
(50%) of the difference between the Subsequent Share Price (as defined
below) received for such subsequent transaction and the product of $9.50
times the number of Shares. For the purposes of this Section 5(d),
"Subsequent Share Price" shall mean the sum of the aggregate consideration
received by the Purchaser or any assignee of the Purchaser in the
transaction attributable to the Shares reduced by the expenses and out of
pocket fees incurred by Purchaser or its affiliates or on their behalf in
connection with the sale of the Shares. If the Purchaser or any assignee
of the Purchaser receives consideration other than cash, the Purchaser may
elect to pay the amount due the Stockholder under this Section 5(d) in like
kind consideration or in cash.
(e) RESALE SUBSEQUENT TO THE EFFECTIVE TIME. Subsequent to the
Effective Time, Purchaser agrees that, if prior to the first anniversary of
the date of this Agreement, the Purchaser or any assignee of the Purchaser,
the Company or the Surviving Corporation (as defined in the Merger
Agreement) enters into an agreement to (i) sell or exchange all or
substantially all of the Common Stock of the Company or the Surviving
Corporation to or with, or (ii) merge or consolidate the Company or the
Surviving Corporation to, an unaffiliated third party, Purchaser or any
assignee of the Purchaser, the Company and the Surviving Corporation will
jointly promptly pay Stockholder an amount equal to fifty percent (50%) of
the product of (y) the difference between the Aggregate Transaction Value
(as defined below) received for such subsequent transaction and $62,000,000
and (z) a fraction, the numerator of which is the number of Shares and the
denominator of which is the number equal to the total of (1) the number of
shares of Common Stock of the Company issued and outstanding as of the
Effective Time plus (2) the number of shares of Common Stock of the Company
underlying stock options for which the option holder is entitled to payment
under Section 1.3(e) of the Merger Agreement plus (3) the number of share
equivalents for which the participant under the Directors' Deferred
Compensation Plan is entitled to payment under Section 1.3(f) of the Merger
Agreement. For the purposes of this Section 5(e), "Aggregate Transaction
Value" shall mean the sum of the aggregate consideration received by the
sellers in the transaction (reduced by the present value of any future or
contingent obligations retained by the sellers) plus the aggregate
liabilities assumed by the acquiring party in the transaction. If the
Purchaser or any assignee of the Purchaser, the Company or the Surviving
Corporation receives consideration other than cash, the Purchaser may elect
to pay the amount due the Stockholder under this Section 5(e) in like kind
consideration or in cash.
-5-
<PAGE>
6. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. The Stockholder
represents and warrants to the Purchaser the following:
(a) TITLE TO SHARES. The Stockholder has good and marketable title
to the Shares, not subject to any hypothecation, pledge or lien, with no
restrictions on voting rights and other incidents of record and beneficial
ownership incident thereto, and the absolute right to grant Purchaser the
option to purchase the Shares and the right to sell and transfer the Shares
to the Purchaser free and clear of all claims, liens, pledges, security
interests, restrictions or encumbrances of any nature whatsoever, except
for the restrictions under the First Refusal Agreement. Solely for the
purposes of this Agreement and the Merger, Stockholder hereby waives and
agrees not to assign his rights of first refusal under all First Refusal
Agreements to which he or it and other stockholders of the Company are
parties, provided that such waiver and agreement not to assign terminate
when this Agreement terminates. On consummation of the transactions
contemplated by this Agreement in accordance with the terms hereof, the
Purchaser will acquire good and marketable title to the Shares free and
clear of all claims, liens, pledges, security interests, resolutions or
encumbrances of any nature whatsoever except for the rights of first
refusal held by other Stockholders of the Company under First Refusal
Agreements.
(b) AUTHORIZATION AND VALIDITY. The Stockholder has the power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. This Agreement constitutes a valid and
binding agreement of the Stockholder, enforceable in accordance with its
terms.
(c) COMPLIANCE WITH INSTRUMENTS. Neither the execution or delivery
of this Agreement nor the consummation by the Stockholder of the
transactions contemplated hereby will violate any provisions of any law
applicable to the Stockholder or agreement to which the Stockholder is a
party, except for any rights of first refusal held by other Stockholders of
the Company under First Refusal Agreements.
(d) SUPPORT OF MERGER. The Stockholder agrees that he will vote all
of his Shares in favor of the Merger Agreement at any Stockholders Meeting
at which it is discussed, and at any adjournment thereof; provided however,
that Stockholder shall not have to vote in favor of the Merger Agreement if
it has been terminated.
7. COMPANY ACTIONS. If the Stockholder is a director of the Company or
an officer or stockholder of the Company that is a reporting person under
Section 16 of the Exchange Act, the Stockholder agrees to use his best efforts
during the term of this Agreement to prevent the Company, its Board of
Directors, its officers and its subsidiaries from:
(a) issuing additional capital stock except pursuant to existing
option plans or arrangements;
-6-
<PAGE>
(b) approving a stock split, reverse stock split, recapitalization,
or other similar action which would result in an overall adjustment of the
number of outstanding shares of the Company's Common Stock;
(c) increasing the dividend on the Company's Common Stock;
(d) issuing additional stock options or appreciation rights;
(e) selling any assets, except in the normal course of business and
except for assets presently under contract for sale; and
(f) issuing or incurring additional debt, except in the normal course
of business.
8. HSR FILING. Promptly after the date hereof, and from time to time
thereafter if necessary, the Purchaser and each Stockholder if required shall
file with the Federal Trade Commission and the Antitrust Division of the United
States Department of Justice all required pre-merger notification and report
forms and other documents and exhibits required to be filed under the HSR Act to
permit the purchase of the Shares subject to the Stock Option.
9. UNITARY TRANSACTION. The parties hereto intend that this Agreement
and the Merger Agreement shall constitute a single unified transaction for the
acquisition of the Company by Purchaser. In accordance with that intention,
Purchaser represents the following:
(a) Purchaser was not an affiliate of and had no affiliation with the
Company at any time prior to the execution of this Agreement and the Merger
Agreement or the prior Agreement and Plan of Merger and prior Stock Option
Agreement both dated September 16, 1995;
(b) Purchaser shall purchase all shares of Common Stock pursuant to
this Agreement and the Merger Agreement at the same price per share; and
(c) Purchaser shall make no attempt to change the management of,
alter the operation of, or exercise control over the Company prior to the
Effective Time or termination of the Merger Agreement.
10. CERTAIN UNDERTAKINGS.
(a) The Stockholder hereby agrees that, during the term of this
Agreement, at any meeting of the stockholders of the Company, however
called, and in any action by written consent of the stockholders of the
Company, the Stockholder shall (a) vote the Shares in favor of the Merger;
(b) not vote the Shares in favor of any action or agreement which would
result in a breach in any material respect of any covenant, representation
or warranty or any other obligation of the Company under the Merger
-7-
<PAGE>
Agreement; and (c) vote the Shares against any action or agreement which
would impede, interfere with or attempt to discourage the Merger,
including, but not limited to: (i) any extraordinary corporate
transaction, such as a merger, reorganization or liquidation involving the
Company or any of its subsidiaries; (ii) a sale or transfer of a material
amount of assets of the Company or any of its subsidiaries; (iii) any
change in the management or board of directors of the Company, except as
otherwise agreed to in writing by Purchaser; (iv) any material change in
the present capitalization or dividend policy of the Company; or (v) any
other material change in the Company's corporate structure or business;
provided however, that Stockholder shall not have to take any action
specified above in this Section 10 if the Merger Agreement has been
terminated by Purchaser or Parent.
(b) Each Stockholder shall use its best efforts to cause the
restrictions on transfer and the rights of first refusal applicable to such
Stockholder's Shares under the First Refusal Agreement to terminate, so as
to cause such Stockholder's obligations under this Agreement to become
unconditional and to permit the sale to Purchaser of such Stockholder's
Shares hereunder. The Stockholders shall furnish Purchaser with copies of
all information, correspondence and other documents furnished to or by
Stelco or its counsel by or to the Stockholders, the Company or their
counsel (as the case may be), and shall promptly inform Purchaser of all
actions taken by the Stockholders or Stelco with respect to compliance with
the First Refusal Agreement, including efforts to dispose of or settle the
pending lawsuit No. 95 C 5426 in the U.S. District Court for the Northern
District of Illinois.
11. ADJUSTMENTS. In the event of any increase or decrease or other change
in the Common Stock by reason of stock dividends, split-up, recapitalizations,
combinations, exchanges of shares or the like, the number of shares of Common
Stock subject to the Stock Option and the per Share Purchase Price shall be
equitably adjusted appropriately.
12. LEGEND. As soon as practicable after the execution of this Agreement,
the Stockholder shall cause the following legend to be placed on the
certificates representing the Shares:
"The Shares of common stock represented by this certificate
are subject to an Amended Stock Option Agreement, dated as
of October 4, 1995, with B & L Acquisition Corporation and
BRW Steel Corporation."
Upon termination of this Agreement Stockholder will remove such legend on
any Shares returned to him; and Purchaser will cooperate therewith.
13. GUARANTEE: Parent hereby fully and unconditionally guarantees each
and every representation, warranty and obligation of the Purchaser hereunder and
of any assignee of the Purchaser.
-8-
<PAGE>
14. CANCELLATION FEE. (a) If Stelco exercises its rights under the First
Refusal Agreement to purchase the Shares, or (b) if prior to January 15, 1996
the Board of Directors of the Company terminates the Merger Agreement pursuant
to Section 6.1(c)(ii) of the Merger Agreement and a transaction is subsequently
consummated, or (c) if prior to January 15, 1996 a tender or exchange offer
shall have been commenced by any party to acquire twenty percent (20%) or more
of the capital stock of the Company at a price in excess of $9.50, which tender
or exchange offer is subsequently consummated, then, upon consummation of
Stelco's purchase with respect to clause (a) above or within five (5) business
days of the consummation of the transaction in the case of clause (b) or (c)
above, the Stockholder shall pay to the Purchaser, a cash cancellation fee equal
to the product of (i) the sum of one million two hundred fifty thousand dollars
($1,250,000) plus all out of pocket fees and expenses incurred by Purchaser,
Parent or their affiliates or on their behalf in connection with the Merger and
the transactions contemplated hereby (such out of pocket fees and expenses not
to exceed two hundred fifty thousand dollars ($250,000)) and (ii) a fraction,
the numerator of which is the number of Shares and the denominator of which is
774,059.
15. REMEDIES. The parties agree that the Purchaser would be irreparably
damaged if for any reason the Stockholder failed to deliver any of the Shares
upon exercise of the Stock Option or to perform any of its other obligations
under this Agreement, and that the Purchaser would not have an adequate remedy
at law for money damages in such event. Accordingly, the Purchaser shall be
entitled to specific performance and injunctive and other equitable relief to
enforce the performance hereof by the Stockholder. This provision is without
prejudice to any other Stockholder. This provision is without prejudice to any
other rights that the Purchaser may have against the Stockholder for any failure
to perform its obligations under this Agreement.
16. ENTIRE AGREEMENT; ASSIGNMENT; AMENDMENT. This Agreement constitutes
the entire agreement of the parties with respect to the subject matter hereof
and supersedes all other prior agreements and understandings, both written and
oral, of the parties with respect to such subject matter. Purchaser may assign
any or all of its rights and obligations hereunder to any wholly-owned affiliate
of Purchaser or Parent. This Agreement may not be modified, amended, altered or
supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto.
17. VALIDITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
18. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be furnished by hand
delivery, by telegram or telex or FAX, or by mail (registered or certified,
postage prepaid, return receipt requested) to the parties at the addresses set
forth below or, if to the Escrow Agent, at its address set forth in the Escrow
Agreement. Any such notice shall be deemed duly given upon the date it is
actually received
-9-
<PAGE>
by the party to whom notice is intended to be given or is actually delivered at
its address as shown below or, if to the Escrow Agent, at its address set forth
in the Escrow Agreement:
If to the Purchaser or Parent:
B&L Acquisition Corporation
4 Northshore Center
Pittsburgh, PA 15212
Attention: President
With a copy to:
BRW Steel Corporation
c/o Veritas Capital, Inc.
Ten East Fiftieth Street
New York, NY 10022
Attention: Co-Chairman
-and-
Jones, Day, Reavis & Pogue
599 Lexington Avenue
New York, NY 10022
Attention: Robert A. Profusek, Esq.
If to the Stockholder:
At the address set forth for the Stockholder on Schedule B
hereto.
With a copy to the Company at:
Bliss & Laughlin Industries Inc.
281 East 155th Street
Harvey, IL 60426
Attention: President
With copies to:
Company's Counsel
Wildman, Harrold, Allen & Dixon
225 West Wacker Drive, #3000
Chicago, Illinois 60606
Attention: Roger G. Fein
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
-10-
<PAGE>
19. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware, without reference to
principles of conflicts of laws.
20. DESCRIPTIVE HEADINGS. The descriptive headings herein are inserted
for convenience of reference only and are not intended to be part of or to
affect the meaning or interpretation of this Agreement.
21. PARTIES IN INTEREST. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to confer upon any other person or entity any
rights or remedies of any nature whatsoever under or by reason of this
Agreement.
22. TIME OF THE ESSENCE. The parties agree that time shall be of the
essence in the performance of obligations hereunder.
23. BROKERS. Each party hereby represents and warrants to the other that
no broker or finder claiming through him is entitled to a fee in connection with
the sale of Shares hereunder, except for The Chicago Corporation whose fee will
be paid by the Company.
24. AGREEMENTS WITH OTHER STOCKHOLDERS. Purchaser agrees that if it
executes a Stock Option Agreement with any other stockholder of the Company
having terms more favorable to such stockholder than the terms of this Agreement
are to Stockholder, it will promptly amend this Agreement to include such more
favorable terms. Stockholder hereby appoints as his lawful attorney-in-fact
Gregory H. Parker to execute any and all notices and other communications under
the First Refusal Agreement as such attorney-in-fact shall execute in his sole
discretion.
25. JURISDICTION. Any judicial proceeding brought against any of the
parties to this Agreement with respect to any dispute arising out of this
Agreement or any matter related hereto may be brought in the courts of the State
of Illinois located in Chicago, Illinois, or in the United States District Court
in Chicago, Illinois, and, by execution and delivery of this Agreement, each of
the parties to this Agreement accepts the exclusive jurisdiction of such courts,
and irrevocably agrees to be bound by any judgment rendered thereby in
connection with this Agreement. The foregoing consents shall not constitute
general consents to service of process in the State of Illinois for any purpose
except as provided above and shall not be deemed to confer rights to any Person
other than the respective parties to this Agreement.
26. COUNTERPARTS. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but all of which shall constitute one
and the same agreement.
-11-
<PAGE>
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
executed on its behalf by its duly authorized representative, all as of the day
and year first above written.
BRW STEEL CORPORATION
By:
----------------------------
Title:
----------------------------
B & L ACQUISITION CORPORATION
By:
----------------------------
Title:
----------------------------
STOCKHOLDER
By:
----------------------------
Title:
----------------------------
-12-
<PAGE>
SCHEDULE A
Name of Stockholder Number of Shares
- ------------------- ----------------
Gregory H. Parker. . . . . . . . . . . . . . . . . . . . . . . . . . . . 142,380
Roger G. Fein, as Trustee of the Gregory H. Parker
Irrevocable Family Trust under Trust Agreement
dated October 31, 1988 . . . . . . . . . . . . . . . . . . . . . . .76,349
F. Elizabeth Parker. . . . . . . . . . . . . . . . . . . . . . . . . . . .25,450
Anthony J. Romanovich. . . . . . . . . . . . . . . . . . . . . . . . . . .80,183
Barbara A. Romanovich. . . . . . . . . . . . . . . . . . . . . . . . . . .26,976
George W. Fleck. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72,222
Joan E. Fleck. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25,450
Gerald E. Brady. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35,773
Carole A. Brady. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22,905
William P. Daugherty, as Trustee of the
William P. Daugherty Trust dated May 11, 1989. . . . . . . . . . . .33,228
Ellen L. Daugherty, as Trustee of the
Ellen L. Daugherty Trust dated May 11, 1989. . . . . . . . . . . . .25,450
Michael A. DeBias. . . . . . . . . . . . . . . . . . . . . . . . . . . . .58,677
Chester J. Pucilowski. . . . . . . . . . . . . . . . . . . . . . . . . . .29,665
Geraldine Pucilowski . . . . . . . . . . . . . . . . . . . . . . . . . . .29,013
Richard M. Bogdon. . . . . . . . . . . . . . . . . . . . . . . . . . . . .21,480
Phyllis Bogdon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10,180
Carl H. Laib . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29,339
Richard W. Ressler . . . . . . . . . . . . . . . . . . . . . . . . . . . .29,339
------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 774,059
-------
-------
<PAGE>
SCHEDULE B
Gregory H. Parker
20091 Tam O Shanter
Olympia Fields, IL 60461
F. Elizabeth Parker
20091 Tam O Shanter
Olympia Fields, IL 60461
Roger G. Fein, as Trustee of the Gregory H. Parker
Irrevocable Trust dated October 31, 1988
225 W. Wacker Drive, #3000
Chicago, IL 60606
Anthony J. Romanovich
2530 Glen Eagles Drive
Olympia Fields, IL 60461
Barbara A. Romanovich
2530 Glen Eagles Drive
Olympia Fields, IL 60461
George W. Fleck
1109 Brassie
Flossmoor, IL 60422
Joan E. Fleck
1109 Brassie
Flossmoor, IL 60422
Gerald E. Brady
1745 Winola Court
Naperville, IL 60565
Carole A. Brady
1745 Winola Court
Naperville, IL 60565
William P. Daugherty, as Trustee of the
William P. Daugherty Trust dated May 11, 1989
3452 Huntington Terrace
Crete, IL 60417
<PAGE>
Ellen L. Daugherty, as Trustee of the
Ellen L. Daugherty Trust dated May 11, 1989
3452 Huntington Terrace
Crete, IL 60417
Michael A. DeBias
7132 West 64th Place
Chicago, IL 60638
Richard M. Bogdon
2029 Dorchester Lane
Schererville, IN 46375
Phyllis Bogdon
2029 Dorchester Lane
Schererville, IN 46375
Carl H. Laib
11588 96th Avenue
St. John, IN 46373
Richard W. Ressler
5156 Andrus Avenue
North Olmsted, OH 44070
Chester J. Pucilowski
860 Smokerise Drive
Medina, OH 44256
Geraldine Pucilowski
860 Smokerise Drive
Medina, OH 44256
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<PAGE>
AMENDMENT NO. 1 TO AMENDED STOCK OPTION AGREEMENT
This is Amendment No. 1 dated as of October 18, 1995 ("Amendment No. 1") to
the Amended Stock Option Agreement dated as of October 4, 1995 (the "Amended
Stock Option Agreement"), by and among B & L Acquisition Corporation (the
"Purchaser"), BRW Steel Corporation ("Parent") and the Management Stockholders
individually named on Schedule A thereto (each an "Option Stockholder" or
collectively, the "Option Stockholders") of Bliss & Laughlin Industries Inc.
(the "Company").
WHEREAS, the Purchaser, Parent and the Company have entered into Amendment
No. 1 dated as of October 18, 1995 to the Amended Agreement and Plan of Merger
dated as of October 4, 1995 (the "Merger Agreement"), to, among other things,
change the date by which certain events need to occur from January 15, 1996 to
January 31, 1996, and in connection therewith the parties hereto have agreed to
amend the Amended Stock Option Agreement to conform it to such changed date.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements set forth herein and in the Merger Agreement and Amendment No. 1
thereto, the parties hereto, intending legally to be bound, do hereby agree as
follows:
1. Sections 2 and 14 of the Amended Stock Option Agreement are
hereby amended by deleting "January 15, 1996" wherever it
appears in those Sections and substituting "January 31,
1996" in lieu thereof.
2. Except as amended by this Amendment No. 1, all the terms and
provisions of the Amended Stock Option Agreement shall
remain in full force and effect.
3. This Amendment No. 1 may be executed in counterparts, each
of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties has caused this Amendment No. 1 to
the Amended Stock Option Agreement dated as of October 4, 1995 to be executed on
its behalf by its duly authorized representative, all as of the day and year
first above written.
BRW STEEL CORPORATION B & L ACQUISITION CORPORATION
By: By:
------------------------------ -------------------------------------
Title: Title:
--------------------------- ----------------------------------
STOCKHOLDER STOCKHOLDER
By: By:
----------------------------- -------------------------------------
Title: Title:
--------------------------- ----------------------------------
<PAGE>
AMENDMENT NO. 1 TO STOCKHOLDER ESCROW AGREEMENT
This is Amendment No. 1 dated as of October 4, 1995 ("Amendment No. 1") to
the Stockholder Escrow Agreement dated as of September 19, 1995 by and among the
persons listed on Schedule A thereto ("Stockholder"), B & L Acquisition
Corporation ("Purchaser") and LaSalle National Trust, N.A., as escrow agent (the
"Escrow Agent").
WHEREAS, Stockholder, Purchaser and Escrow Agent are parties to the
Stockholder Escrow Agreement dated as of September 19, 1995 (the "Escrow
Agreement"); and
WHEREAS, Purchaser and Stockholder have entered into Amendment No. 1 dated
as of October 4, 1995 to the Stock Option Agreement dated as of September 16,
1995 and, pursuant thereto, an Amended Stock Option Agreement dated as of
October 4, 1995, and wish to conform the Escrow Agreement thereto;
NOW THEREFORE, the parties hereto agree as follows:
(1) The definition of "Option Agreement" in Recital A to, and throughout,
the Escrow Agreement hereby is amended to refer to the "Amended Stock
Option Agreement dated as of October 4, 1995."
(2) The Escrow Agent acknowledges receipt of 33,328 and 25,450 Shares,
respectively, from William P. Daugherty as Trustee of the William P.
Daugherty Trust dated May 11, 1989 and Ellen L. Daugherty, as Trustee
of the Ellen L. Daugherty Trust dated May 11, 1989 (collectively, the
"Daugherty Shares").
(3) The Escrow Agent acknowledges that prior to October 4, 1995 it
delivered to Mr. Gregory H. Parker his 58,678 Shares placed in escrow
by him pending receipt by the Escrow Agent of the Daugherty Shares.
(4) The Escrow Agent shall re-issue the share certificate of the
Stockholder that it is now holding in escrow pursuant to the Escrow
Agreement (referred to as the "Option Shares Certificate" in the
Escrow Agreement) so as to set forth thereon the legends set forth in
Exhibit 1 hereto.
(5) Except as specifically provided otherwise in this Amendment No. 1, the
parties hereby confirm all the terms and provisions of the Escrow
Agreement.
(6) This Amendment No. 1 may be executed in counterparts, each of which
shall be deemed to be an original, but all of which shall constitute
one and the same agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to
Stockholder Escrow Agreement dated as of September 19, 1995 to be executed and
delivered on the date first written above.
B & L ACQUISITION CORPORATION
By
---------------------------
Title
------------------------
Name
-------------------------
STOCKHOLDER
By
---------------------------
ESCROW AGENT
By
---------------------------
Title
------------------------
Name
-------------------------
-2-
<PAGE>
EXHIBIT 1
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A PRIVATE
PLACEMENT, WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AND IN
RELIANCE UPON THE HOLDER'S REPRESENTATION THAT SUCH SECURITIES WERE BEING
ACQUIRED FOR INVESTMENT AND NOT FOR RESALE. NO TRANSFER OF SUCH SECURITIES
MAY BE MADE ON THE BOOKS OF THE COMPANY UNLESS ACCOMPANIED BY AN OPINION OF
COUNSEL, SATISFACTORY TO THE COMPANY, THAT SUCH TRANSFER MAY PROPERLY BE MADE
WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 OR THAT SUCH SECURITIES
HAVE BEEN SO REGISTERED UNDER A REGISTRATION STATEMENT WHICH IS IN EFFECT AT
THE DATE OF SUCH TRANSFER.
THIS CERTIFICATE AND THE SHARES OF STOCK EVIDENCED HEREBY ARE SUBJECT TO THE
TERMS AND CONDITIONS OF A CERTAIN RIGHT OF FIRST REFUSAL AND STANDSTILL
AGREEMENT DATED AS OF MAY 11, 1990, BY AND AMONG THE COMPANY AND CERTAIN OF
THE SHAREHOLDERS THEREOF, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE
OF THE COMPANY, REFERENCE TO ALL THE TERMS AND CONDITIONS THEREOF BEING
HEREBY MADE, AND NO SALE, TRANSFER, ENCUMBRANCE, OR OTHER DISPOSITION OF THE
SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE MAY BE EFFECTED EXCEPT
PURSUANT TO THE TERMS AND CONDITIONS OF SAID AGREEMENT.
THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN
AMENDED STOCK OPTION AGREEMENT, DATED AS OF OCTOBER 4, 1995, WITH B & L
ACQUISITION CORPORATION AND BRW STEEL CORPORATION.
