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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
FORM 8-B
FOR REGISTRATION OF SECURITIES
OF CERTAIN SUCCESSOR ISSUERS
FILED PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
ROUGE INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 38-3340770
(State of incorporation or organization) (IRS Employer ID No.)
3001 MILLER ROAD
P.0 BOX 1699
DEARBORN, MI 48121-1699
(313) 390-6877
(Address of principal executive offices, including Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
------------------- ------------------------------
Class A Common Stock, New York Stock Exchange, Inc.
par value $0.01 per share
Securities to be registered pursuant to Section 12(g) of the Act:
NONE
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ITEM 1. GENERAL INFORMATION.
(a) Rouge Industries, Inc. (the "Registrant") was organized as a
corporation under the laws of the State of Delaware on November 12, 1996.
(b) The fiscal year of the Registrant ends on December 31.
ITEM 2. TRANSACTION OF SUCCESSION.
(a) Rouge Steel Company, a Delaware corporation, the only predecessor of
the Registrant (the "Predecessor"), had shares of class A common stock
registered pursuant to Section 12(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and listed on the New York Stock Exchange (the
"NYSE") at the time of succession.
(b) Effective as of 11:59 p.m. on July 30, 1997, the Predecessor adopted a
holding company form of organizational structure. The holding company
organizational structure was effected pursuant to an Agreement and Plan of
Merger (the "Merger Agreement") among the Predecessor, the Registrant and Rouge
Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the
Registrant ("Merger Sub"). The Merger Agreement provides for, among other
things, the merger (the "Merger") of the Predecessor with and into Merger Sub,
with the Predecessor as the surviving corporation. Pursuant to Section 251(g)
of the General Corporation Law of the State of Delaware, stockholder approval of
the Merger was not required.
As a result of the Merger, the Predecessor became a direct
wholly-owned subsidiary of the Registrant and (i) each share of class A common
stock of the Predecessor issued and outstanding was converted into and exchanged
for one share of class A common stock of the Registrant, (ii) each share of
class B common stock of the Predecessor issued and outstanding was converted
into and exchanged for one share of class B common stock of the Registrant,
(iii) each issued and outstanding share of common stock of Merger Sub was
converted into and exchanged for one share of the common stock of the
Predecessor and (iv) each share of common stock of the Registrant issued and
outstanding immediately prior to the Merger Sub was cancelled without any
consideration being paid therefor.
Also as a result of the Merger, each outstanding employee stock option
to purchase shares of the Predecessor's class A common stock granted under any
employee stock option or compensation plan or arrangement of the Predecessor was
converted into an option to purchase one share of the Registrant's class A
common stock in accordance with the provisions of such employee stock option or
compensation plan or arrangement.
ITEM 3. SECURITIES TO BE REGISTERED.
The Registrant is authorized by its Amended and Restated Certificate
of Incorporation to issue up to 80,000,000 shares of class A common stock. As
of the effective time
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Of the Merger, the Registrant will have 14,373,611 shares of class A common
stock issued and outstanding, none of which will be held by or for the account
of the Registrant.
ITEM 4. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
The description of the class A common stock set forth in Item 1 of the
Registration Statement on Form 8-A (No. 1-12852) of the Predecessor filed with
the Securities and Exchange Commission on February 25, 1994, including any
amendment or reports filed for the purpose of updating such description, is
incorporated herein by reference. Copies of the Form 8-A of the Predecessor
have been filed with the NYSE.
ITEM 5. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Pursuant to Instruction (a) of the Instructions As To Financial
Statements for Form 8-B, since the capital structure and balance sheet of the
Registrant on a consolidated basis immediately after the Merger are
substantially the same as those of the Predecessor immediately prior to the
Merger on a consolidated basis, no financial statements are being filed with
this Registration Statement.
(b) Exhibits.
2.1* Agreement and Plan of Merger, dated July 20, 1997, by and among the
Registrant, the Predecessor and Merger Sub.
3.1* Amended and Restated Certificate of Incorporation of the Registrant.
3.2* Amended and Restated By-laws of the Registrant.
3.3* Amended and Restated Certificate of Incorporation of the Predecessor.
3.4* New Article 2.16 of the Amended and Restated By-Laws of the Predecessor.
4.1 Amended and Restated Stockholders Agreement dated as of November
14, 1996 (the "Stockholders Agreement"), among the Predecessor, Carl L.
Valdiserri and Worthington Industries, Incorporated ("Worthington")
(incorporated herein by reference to Exhibit 10.3 to the Predecessor's
1996 Annual Report on Form 10-K (Commission File Number 1-12852) (the
"1996 Form 10-K"))
4.2* First Amendment to Amended and Restated Stockholders Agreement, dated
July 20, 1997, by and among the Predecessor, the Registrant, Carl L.
Valdiserri and Worthington.
10.1* Amended and Restated Credit Agreement, dated as of July 30, 1997 among
the Registrant, the Predecessor, the financial institutions party
thereto and The Chase Manhattan Bank, as Agent.
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10.2* Guaranty dated as of July 30, 1997 by the Registrant as Guarantor, in
favor of The Chase Manhattan Bank, as Agent.
10.3 Purchase and Sale Agreement dated as of December 15, 1989, between Ford
Motor Company ("Ford") and Marico Acquisition Corp. ("Marico")
(incorporated herein by reference to Exhibit 10.10 to the Predecessor's
Registration Statement on Form S-1 (registration No. 33-74698) (the
"S-1 Registration Statement")).
10.4 Oxygen, Nitrogen and Argon Supply Agreement dated as of November 16,
1993, between Praxair, Inc. and the Predecessor (incorporated herein by
reference to Exhibit 3.1 to the Predecessor's 1994 Annual Report on
Form 10-K (Commission File Number 1-12852) (the "1994 Form 10-K")).
10.5 Steel Purchase Agreement dated as of December 15, 1989, between the
Predecessor and Ford (incorporated herein by reference to Exhibit 10.16
to the S-1 Registration Statement).
10.6 Steel Products Purchase Agreement dated as of December 15, 1989,
between the Predecessor and Worthington (the "Worthington Agreement")
(incorporated herein by reference to Exhibit 10.17 to the S-1
Registration Statement).
10.7 Letter dated February 20, 1996 confirming Exercise of Option to Extend
Term of Worthington Agreement (incorporated herein by reference to
Exhibit 10.8 to the Predecessor's 1995 Annual Report on Form 10-K
(Commission File Number 1-12852) (the "1995 Form 10-K")).
10.8 Technical and Transportation Services Agreement dated as of December
15, 1989, between the Predecessor and Ford (incorporated herein by
reference to Exhibit 10.18 to the S-1 Registration Statement).
10.9 Railroad Services Agreement dated as of December 15, 1989, between the
Predecessor and Ford (incorporated herein by reference to Exhibit 10.19
to the S-1 Registration Statement).
10.10 Scrap Sale Agreement dated as of December 15, 1989, between the
Predecessor and Ford (incorporated herein by reference to Exhibit 10.20
to the S-1 Registration Statement).
10.11 Powerhouse Joint Operating Agreement dated as of December 15, 1989,
between the Predecessor and Ford (incorporated herein by reference to
Exhibit 10.21 to the S-1 Registration Statement).
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10.12 Transitional Services Agreement dated as of December 15, 1989 between
the Predecessor and Ford (incorporated herein by reference to Exhibit
10.22 to the S-1 Registration Statement).
10.13 Joint Venture Agreement dated as of November 30, 1984 (the "Joint
Venture Agreement"), between United States Steel Corporation ("USS") and
the Predecessor (incorporated herein by reference to Exhibit 10.23 to
the S-1 Registration Statement).
10.14 Amendment to Joint Venture Agreement (incorporated herein by reference
to Exhibit 10.24 to the S-1 Registration Statement).
10.15 Operating Agreement for Shiloh of Michigan, L.L.C. dated as of
January 2, 1996 by and among Shiloh of Michigan, L.L.C., the Predecessor
and Shiloh Industries, Inc. (incorporated herein by reference to Exhibit
10.16 to the 1995 Form 10-K).
10.16 Natural Gas Operating Agreement dated as of December 15, 1989 between
the Predecessor and Ford (incorporated herein by reference to Exhibit
10.25 to the S-1 Registration Statement).
10.17 Operating Agreement of Spartan Steel Coating, L.L.C. dated as of
November 14, 1996 among QS Steel Inc. and Worthington Steel of
Michigan, Inc. (incorporated herein by reference to Exhibit 10.18 to the
1996 Form 10-K).
10.18 Eveleth Mines Exit Agreement dated as of November 25, 1996 among
Oglebay Norton Company, ONCO Eveleth Company, Eveleth Taconite Company,
Eveleth Expansion Company, AK Steel Corporation, Virginia Horn Taconite
Company, the Predecessor, Stelco, Inc., Ontario Eveleth Company and
Eveleth Mines LLC (incorporated herein by reference to Exhibit 10.19 to
the 1996 Form 10-K).
10.19 Pellet Sale and Purchase Agreement dated as of January 1, 1997 by and
between Eveleth Mines LLC and the Predecessor (incorporated herein by
reference to Exhibit 10.20 to the 1996 Form 10-K).
10.20 Member Control Agreement of Eveleth Mines LLC dated as of December 2,
1996 between Virginia Horn Taconite Company, and Ontario Eveleth Company
(incorporated herein by reference to Exhibit 10.21 to the 1996 Form
10-K).
10.21 Letter Agreement dated as of October 25, 1996 between Worthington
and the Predecessor (incorporated herein by reference to Exhibit 10.22
to the 1996 Form 10-K).
10.22 Furnace Coke Supply Agreement dated as of October 31, 1996 between the
Predecessor and Bethlehem Steel Corporation (incorporated herein by
reference to Exhibit 10.23 to the 1996 Form 10-K).
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10.23 Pellet Sale and Purchase and Trade Agreement dated as of January 1,
1991 by and between The Cleveland-Cliffs Iron Company and the
Predecessor (incorporated herein by reference to Exhibit 10.31 to the
S-1 Registration Statement).
10.24 Agreement for Production, Sale and Purchase of Coal dated as of January
15, 1975 ("Coal Purchase Agreement") by and among Ford, Blackberry
Creek Coal Company ("Blackberry") and A.T. Massey Coal Company, Inc.
("Massey")( incorporated herein by reference to Exhibit 10.32 to the S-1
Registration Statement).
10.25 Amendment No. 1 to the Coal Purchase Agreement dated as of January 1,
1987 by and among the Predecessor (as successor to Ford), Blackberry
and Massey Coal Sales Company, Inc. (as successor to Massey)
(incorporated herein by reference to Exhibit 10.33 to the S-1
Registration Statement).
10.26 Coke Tolling Agreement dated December 22, 1993 between U.S.S Subsidiary
of USX Corporation and the Predecessor (incorporated herein by
reference to Exhibit 10.34 to the S-1 Registration Statement).
10.27 Agreement for the Provision of Tolled Coke dated December 22, 1992
between New Boston Coke Corporation. ad the Predecessor (incorporated
herein by reference to Exhibit 10.35 to the S-1 Registration Statement).
10.28 Purchase Agreement among Rouge Steel Company, Stelco Inc. and Ontario
Eveleth Company dated March 1, 1993 (incorporated herein by reference
to Exhibit 10.36 to the S-1 Registration Statement).
10.29* Amended and Restated Rouge Steel Company Savings Plan for the Salaried
Employees.
10.30* Amended and Restated Rouge Steel Company Tax-Efficient Savings Plan for
Hourly Employees.
10.31 Rouge Steel Company Profit Sharing Plan for Salaried Employees
(incorporated herein by reference to Exhibit 10.38 to the S-1
Registration Statement).
10.32* Amended and Restated Stock Incentive Plan.
10.33* Amended and Restated Outside Director Equity Plan.
10.34 Rouge Steel Company's Retirement Plan for Salaried Employees
(incorporated herein by reference to Exhibit 10.41 to the S-1
Registration Statement).
10.35 Rouge Steel Company Short-Term Incentive Program (incorporated herein
by reference to Exhibit 10.39 the S-1 Registration Statement).
10.36 Rouge Steel Company Long-Term Incentive Plan (incorporated herein by
reference to Exhibit 10.40 to the S-1 Registration Statement).
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10.37 Lease between Ford and the Predecessor dated January 1, 1982 (the
"Lease") (incorporated herein by reference to Exhibit 10.42 to the S-1
Registration Statement).
10.38 First Amendment to the Lease dated as of July 1, 1992 (incorporated
herein by reference to Exhibit 10.43 to the S-1 Registration
Statement).
10.39 Second Amendment to the Lease dated as of January 1, 1992 (incorporated
herein by reference to Exhibit 10.44 to the S-1 Registration
Statement).
10.40 Third Amendment to the Lease dated as of June 27, 1994 (incorporated
herein by reference to Exhibit 10.39 to the 1995 Form 10-K).
21* Subsidiaries of the Registrant
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* Filed herewith.
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the Registrant has duly caused this registration statement of be signed
on its behalf by the undersigned, thereto duly authorized.
ROUGE INDUSTRIES, INC.
Date: July 21, 1997 By: /s/ Carl L. Valdiserri
----------------------------------
Name: Carl L. Valdiserri
Title: Chief Executive Officer and
Chairman of the Board
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INDEX TO EXHIBITS
Exhibit
Number Description of Exhibit
- ------- ----------------------
2.1* Agreement and Plan of Merger, dated July 20, 1997, by and among the
Registrant, the Predecessor and Merger Sub.
3.1* Amended and Restated Certificate of Incorporation of the Registrant.
3.2* Amended and Restated By-laws of the Registrant.
3.3* Amended and Restated Certificate of Incorporation of the Predecessor.
3.4* New Article 2.16 of the Amended and Restated By-Laws of the
Predecessor.
4.1 Amended and Restated Stockholders Agreement dated as of November
14, 1996 (the "Stockholders Agreement"), among the Predecessor, Carl L.
Valdiserri and Worthington Industries, Incorporated ("Worthington")
(incorporated herein by reference to Exhibit 10.3 to the Predecessor's
1996 Annual Report on Form 10-K (Commission File Number 1-12852) (the
"1996 Form 10-K"))
4.2* First Amendment to Amended and Restated Stockholders Agreement, dated
July 20, 1997, by and among the Predecessor, the Registrant, Carl L.
Valdiserri and Worthington.
10.1* Amended and Restated Credit Agreement, dated as of July 30, 1997 among
the Registrant, the Predecessor, the financial institutions party
thereto and The Chase Manhattan Bank, as Agent.
10.2* Guaranty dated as of July 30, 1997 by the Registrant as Guarantor, in
favor of The Chase Manhattan Bank, as Agent.
10.3 Purchase and Sale Agreement dated as of December 15, 1989, between Ford
Motor Company ("Ford") and Marico Acquisition Corp. ("Marico")
(incorporated herein by reference to Exhibit 10.10 to the Predecessor's
Registration Statement on Form S-1 (registration No. 33-74698) (the
"S-1 Registration Statement")).
10.4 Oxygen, Nitrogen and Argon Supply Agreement dated as of November 16,
1993, between Praxair, Inc. and the Predecessor (incorporated herein by
reference to Exhibit 3.1 to the Predecessor's 1994 Annual Report on
Form 10-K (Commission File Number 1-12852) (the "1994 Form 10-K")).
10.5 Steel Purchase Agreement dated as of December 15, 1989, between the
Predecessor and Ford (incorporated herein by reference to Exhibit 10.16
to the S-1 Registration Statement).
10.6 Steel Products Purchase Agreement dated as of December 15, 1989,
between the Predecessor and Worthington (the "Worthington Agreement")
(incorporated herein by reference to Exhibit 10.17 to the S-1
Registration Statement).
10.7 Letter dated February 20, 1996 confirming Exercise of Option to Extend
Term of Worthington Agreement (incorporated herein by reference to
Exhibit 10.8 to the Predecessor's 1995 Annual Report on Form 10-K
(Commission File Number 1-12852) (the "1995 Form 10-K")).
10.8 Technical and Transportation Services Agreement dated as of December
15, 1989, between the Predecessor and Ford (incorporated herein by
reference to Exhibit 10.18 to the S-1 Registration Statement).
10.9 Railroad Services Agreement dated as of December 15, 1989, between the
Predecessor and Ford (incorporated herein by reference to Exhibit 10.19
to the S-1 Registration Statement).
10.10 Scrap Sale Agreement dated as of December 15, 1989, between the
Predecessor and Ford (incorporated herein by reference to Exhibit 10.20
to the S-1 Registration Statement).
10.11 Powerhouse Joint Operating Agreement dated as of December 15, 1989,
between the Predecessor and Ford (incorporated herein by reference to
Exhibit 10.21 to the S-1 Registration Statement).
10.12 Transitional Services Agreement dated as of December 15, 1989 between
the Predecessor and Ford (incorporated herein by reference to Exhibit
10.22 to the S-1 Registration Statement).
10.13 Joint Venture Agreement dated as of November 30, 1984 (the "Joint
Venture Agreement"), between United States Steel Corporation ("USS") and
the Predecessor (incorporated herein by reference to Exhibit 10.23 to
the S-1 Registration Statement).
10.14 Amendment to Joint Venture Agreement (incorporated herein by reference
to Exhibit 10.24 to the S-1 Registration Statement).
10.15 Operating Agreement for Shiloh of Michigan, L.L.C. dated as of
January 2, 1996 by and among Shiloh of Michigan L.L.C., the Predecessor
and Shiloh Industries, Inc. (incorporated herein by reference to Exhibit
10.16 to the 1995 Form 10-K).
10.16 Natural Gas Operating Agreement dated as of December 15, 1989 between
the Predecessor and Ford (incorporated herein by reference to Exhibit
10.25 to the S-1 Registration Statement).
10.17 Operating Agreement of Spartan Steel Coating, L.L.C. dated as of
November 14, 1996 among QS Steel, Inc. and Worthington Steel of
Michigan, Inc. (incorporated herein by reference to Exhibit 10.18 to the
1996 Form 10-K).
10.18 Eveleth Mines Exit Agreement dated as of November 25, 1996 among
Oglebay Norton Company, ONCO Eveleth Company, Eveleth Taconite Company,
Eveleth Expansion Company, AK Steel Corporation, Virginia Horn Taconite
Company, the Predecessor, Stelco, Inc., Ontario Eveleth Company and
Eveleth Mines LLC (incorporated herein by reference to Exhibit 10.19 to
the 1996 Form 10-K).
10.19 Pellet Sale and Purchase Agreement dated as of January 1, 1997 by and
between Eveleth Mines LLC and the Predecessor (incorporated herein by
reference to Exhibit 10.20 to the 1996 Form 10-K).
10.20 Member Control Agreement of Eveleth Mines LLC dated as of December 2,
1996 between Virginia Horn Taconite Company, and Ontario Eveleth Company
(incorporated herein by reference to Exhibit 10.21 to the 1996 Form
10-K).
10.21 Letter Agreement dated as of October 25, 1996 between Worthington
and the Predecessor (incorporated herein by reference to Exhibit 10.22
to the 1996 Form 10-K).
10.22 Furnace Coke Supply Agreement dated as of October 31, 1996 between the
Predecessor and Bethlehem Steel Corporation (incorporated herein by
reference to Exhibit 10.23 to the 1996 Form 10-K).
10.23 Pellet Sale and Purchase and Trade Agreement dated as of January 1,
1991 by and between The Cleveland-Cliffs Iron Company and the
Predecessor (incorporated herein by reference to Exhibit 10.31 to the
S-1 Registration Statement).
10.24 Agreement for Production, Sale and Purchase of Coal dated as of January
15, 1975 ("Coal Purchase Agreement") by and among Ford, Blackberry
Creek Coal Company ("Blackberry") and A.T. Massey Coal Company, Inc.
("Massey")( incorporated herein by reference to Exhibit 10.32 to the S-1
Registration Statement).
10.25 Amendment No. 1 to the Coal Purchase Agreement dated as of January 1,
1987 by and among the Predecessor (as successor to Ford), Blackberry
and Massey Coal Sales Company, Inc. (as successor to Massey)
(incorporated herein by reference to Exhibit 10.33 to the S-1
Registration Statement).
10.26 Coke Tolling Agreement dated December 22, 1993 between U.S.S Subsidiary
of USX Corporation and the Predecessor (incorporated herein by
reference to Exhibit 10.34 to the S-1 Registration Statement).
10.27 Agreement for the Provision of Tolled Coke dated December 22, 1992
between New Boston Coke Corporation. ad the Predecessor (incorporated
herein by reference to Exhibit 10.35 to the S-1 Registration Statement).
10.28 Purchase Agreement among Rouge Steel Company, Stelco Inc. and Ontario
Eveleth Company dated March 1, 1993 (incorporated herein by reference
to Exhibit 10.36 to the S-1 Registration Statement).
10.29* Amended and Restated Rouge Steel Company Savings Plan for the Salaried
Employees.
10.30* Amended and Restated Rouge Steel Company Tax-Efficient Savings Plan for
Hourly Employees.
10.31 Rouge Steel Company Profit Sharing Plan for Salaried Employees
(incorporated herein by reference to Exhibit 10.38 to the S-1
Registration Statement).
10.32* Amended and Restated Stock Incentive Plan.
10.33* Amended and Restated Outside Director Equity Plan.
10.34 Rouge Steel Company's Retirement Plan for Salaried Employees
(incorporated herein by reference to Exhibit 10.41 to the S-1
Registration Statement).
10.35 Rouge Steel Company Short-Term Incentive Program (incorporated herein
by reference to Exhibit 10.39 the S-1 Registration Statement).
10.36 Rouge Steel Company Long-Term Incentive Plan (incorporated herein by
reference to Exhibit 10.40 to the S-1 Registration Statement).
10.37 Lease between Ford and the Predecessor dated January 1, 1982 (the
"Lease") (incorporated herein by reference to Exhibit 10.42 to the S-1
Registration Statement).
10.38 First Amendment to the Lease dated as of July 1, 1992 (incorporated
herein by reference to Exhibit 10.43 to the S-1 Registration
Statement).
10.39 Second Amendment to the Lease dated as of January 1, 1992 (incorporated
herein by reference to Exhibit 10.44 to the S-1 Registration
Statement).
10.40 Third Amendment to the Lease dated as of June 27, 1994 (incorporated
herein by reference to Exhibit 10.39 to the 1995 Form 10-K).
21* Subsidiaries of the Registrant
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* Filed herewith.
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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
OF
ROUGE STEEL COMPANY
WITH
ROUGE MERGER SUB, INC.
This Agreement and Plan of Merger (this "Agreement"), dated as of July 20,
1997, is entered into by and among Rouge Steel Company, a Delaware
corporation ("Rouge Steel"), Rouge Merger Sub, Inc., a Delaware corporation
("Merger Sub") and Rouge Industries, Inc., a Delaware corporation ("Holdings").
WHEREAS, Rouge Steel has an authorized capitalization consisting of (i)
80,000,000 shares of class A common stock, par value $.01 per share ("Rouge
Steel Class A Common Stock"), of which 14,373,611 are issued and
outstanding as of July 29, 1997, (ii) 8,690,400 shares of class B common stock,
par value $.01 per share ("Rouge Class B Common Stock"), of which 7,562,400 are
issued and outstanding as of July 29, 1997, and (iii) 8,000,000 shares of
preferred stock, par value of $.01 per share, of which no shares are issued and
outstanding;
WHEREAS, Holdings has an authorized capitalization consisting of (i)
80,000,000 shares of class A common stock, par value $.01 per share ("Holdings
Class A Common Stock"), of which one (1) share is issued and outstanding and is
owned by Rouge Steel, (ii) 8,690,400 shares of class B common stock, par value
$.01 per share ("Holdings Class B Common Stock") of which no shares are issued
and outstanding and (iii) 8,000,000 shares of preferred stock, of which no
shares are issued and outstanding;
WHEREAS, Merger Sub has an authorized capitalization consisting of 1,000
shares of common stock, par value $.01 per share ("Merger Sub Common Stock"),
all of which are issued and outstanding and are owned by Holdings;
WHEREAS, Rouge Steel, Merger Sub and Holdings each desire to effect a
merger of Rouge Steel with and into Merger Sub with Rouge Steel surviving such
merger (the "Merger") pursuant to Section 251(g) of the Delaware General
Corporation Law (the "DGCL").
WHEREAS, the Board of Directors of each of Rouge Steel, Holdings and Merger
Sub has heretofore approved the Merger in accordance with the DGCL and upon the
terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereto agree as follows:
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ARTICLE I
THE MERGER
Section 1.1 The Merger. At the Effective Time (as defined in Section
1.2) and upon the terms and conditions set forth in this Agreement, Rouge Steel
shall be merged with Merger Sub in accordance with the DGCL, whereupon
the separate corporate existence of Merger Sub shall cease and Rouge Steel shall
be the surviving corporation in the Merger (the "Surviving Corporation") and
shall succeed to and assume all of the rights and obligations of Merger Sub in
accordance with the DGCL.
Section 1.2 Effective Time. The Merger shall become effective at 11:59
p.m. on the date of the filing of a certified copy of this Agreement with the
Secretary of State of the State of Delaware as required by the DGCL (the
"Effective Time").
Section 1.3 Effects of the Merger. The effects of the Merger shall be as
provided in the applicable provisions of Section 259 of the DGCL.
ARTICLE II
CAPITAL STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES
Section 2.1 Effect on Capital Stock. (a) As of the Effective Time, by
virtue of the Merger and without any action on the part of Rouge Steel, Merger
Sub or Holdings or any holder of the capital stock of Rouge Steel, Merger Sub or
Holdings, the following shall occur:
(i) each issued and outstanding share of Rouge Steel Class A
Common Stock shall be converted into the right to receive one share of
Holdings Class A Common Stock;
(ii) each issued and outstanding share of Rouge Steel Class B
Common Stock shall be converted into the right to receive one share of
Holdings Class B Common Stock;
(iii) each issued and outstanding share of Merger Sub Common Stock
shall be converted into the right to receive one share of the common stock,
par value $.01 per share, of the Surviving Corporation; and
(iv) each share of Holdings Class A Common Stock issued and
outstanding prior to the Effective Time shall be canceled without any
consideration being paid therefor.
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(b) As of the Effective Time, all shares of Rouge Steel Class A
Common Stock and Rouge Steel Class B Common Stock issued and outstanding
immediately prior to the Effective Time shall no longer be outstanding and shall
be automatically canceled and retired and shall cease to exist, and each holder
of a certificate formerly representing shares of Rouge Steel Class A Common
Stock or Rouge Steel Class B Common Stock, as the case may be (in either case, a
"Rouge Steel Certificate"), shall, to the extent such Rouge Steel Certificate
represents such shares, cease to have any rights with respect thereto, except
the right to receive shares of Holdings Class A Common Stock or Holdings Class B
Common Stock, as applicable.
Section 2.2. Exchange Procedures. (a) As soon as practicable after the
Effective Time, each holder of an outstanding Rouge Steel Certificate shall,
upon surrender of such Rouge Steel Certificate to National City Bank, as
exchange agent (the "Exchange Agent"), be entitled to receive a certificate or
certificates representing the number of shares of Holdings Class A Common Stock
or Holdings Class B Common Stock, as applicable (in either case, a "Holdings
Certificate"), into which the shares of Rouge Steel Class A Common Stock or
Rouge Steel Class B Common Stock previously represented by such Rouge Steel
Certificate have been converted pursuant to this Agreement. The Exchange Agent
shall accept such Rouge Steel Certificates upon compliance with such reasonable
terms and conditions as the Exchange Agent may impose to effect an orderly
exchange thereof in accordance with normal exchange practices.
(b) If any Holdings Certificate is to be issued to a person or
entity other than the person or entity in whose name a surrendered Rouge Steel
Certificate is registered, it shall be a condition of such issuance that (i) the
Rouge Steel Certificate so surrendered shall be properly endorsed, with
signature guaranteed or otherwise in proper form for transfer and (ii) the
person or entity requesting such delivery shall have paid to Holdings or the
Exchange Agent any transfer or other taxes required by reason of such delivery
to a person or entity other than the registered holder of the Rouge Steel
Certificate surrendered or shall have established to the satisfaction of
Holdings or the Exchange Agent that such taxes either have been paid or are not
payable.
(c) Until surrendered and exchanged in accordance with this
Section 2.2, each Rouge Steel Certificate shall be deemed at any time after the
Effective Time to represent only the right to receive upon such surrender and
exchange the shares of Holdings Class A Common Stock or Holdings Class B Common
Stock as provided for in this Agreement, without any interest thereon.
Section 2.3. Closing of Rouge Steel's Transfer Books. After the date on
which the Effective Time occurs, there shall be no further transfer on the books
of Rouge Steel or the Exchange Agent of any Rouge Steel Certificate and if any
such Rouge Steel Certificate is presented to the Surviving Corporation or the
Exchange Agent for transfer, such Rouge Steel Certificate shall be canceled and
exchanged for a Holdings Certificate in accordance with this Agreement.
Section 2.4. Stock Options. At the Effective Time, each outstanding
employee stock option to purchase Rouge Steel Class A Common Stock granted under
any employee stock option or compensation plan or arrangement of Rouge Steel
shall be converted into an option to purchase
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one (1) share of Holdings Class A Common Stock in accordance with the
provisions of such employee stock option or compensation plan or arrangement.
ARTICLE III
SURVIVING CORPORATION
Section 3.1. Certificate of Incorporation. At the Effective Time, the
Amended and Restated Certificate of Incorporation of Rouge Steel, as in effect
on the date thereof, shall be amended to read in its entirety as set forth in
Exhibit A and, as so amended, shall be the certificate of incorporation of the
Surviving Corporation after the Effective Time until thereafter changed or
amended as provided therein or by the DGCL.
Section 3.2. Bylaws. At the Effective Time, the Amended and Restated
Bylaws of Rouge Steel, as in effect on the date thereof, shall be the bylaws of
the Surviving Corporation after the Effective Time until thereafter changed or
amended as provided therein or by the DGCL.
Section 3.3. Directors. The directors of Rouge Steel immediately prior to
the Effective Time shall be, from and after the Effective Time, the directors
of the Surviving Corporation until their successors shall have been duly
elected or appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Certificate of
Incorporation and Bylaws.
Section 3.4. Officers. The officers of Rouge Steel immediately prior to
the Effective Time shall be, from and after the Effective Time, the officers of
the Surviving Corporation until their successors shall have been duly elected
or appointed and qualified or until their earlier death, resignation or removal
in accordance with the Surviving Corporation's Certificate of Incorporation and
Bylaws.
ARTICLE IV
MISCELLANEOUS
Section 4.1. Tax Free Reorganization. The Merger is intended to constitute
a tax-free reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended, and this Agreement is intended to constitute
a plan of reorganization.
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Section 4.2. Assignment. Neither this Agreement nor any right, interest
or obligation hereunder may be assigned by any of the parties hereto and any
attempt to do shall be null and void.
Section 4.3. No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties hereto to confer third-party beneficiary rights upon any other person
or entity.
Section 4.4. Amendment. This agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
Section 4.5. Waiver. Any term or condition of this Agreement may be
waived at any time by the party that is entitled to the benefit thereof, but no
such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No
waiver by any party hereto of any term or condition of this Agreement, in any
one or more instances, shall be deemed to be or construed as a waiver of the
same or any other term or condition of this Agreement.
Section 4.6. Termination. At any time prior to the Effective Time, this
Agreement may be terminated and abandoned by the parties. In the event of any
termination of this Agreement, this Agreement shall forthwith become void and
there shall be no liability on the part of any of the parties hereto or their
respective officers or directors.
Section 4.7. Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which shall constitute but one and the same instrument.
Section 4.8. Severability. Should any clause, sentence, paragraph,
subsection, Section or Article of this Agreement be judicially declared to be
invalid, unenforceable or void, such decision will not have the effect of
invalidating or voiding the remainder of this Agreement, and the part or parts
of this Agreement so held to be invalid, unenforceable or void will be deemed
to have been stricken herefrom by the parties hereto, and the remainder will
have the same force and effectiveness as if such stricken part or parts had
never been included herein.
Section 4.9. Entire Agreement. This Agreement sets forth all of the
promises, agreements, conditions, understandings, warranties and
representations among the parties hereto with respect to the transactions
contemplated hereby, and supersedes all prior agreements, arrangements and
understandings among the parties hereto, whether written, oral or otherwise.
There are no promises, agreements, conditions, understandings, warranties or
representations, oral or written, express or implied, among the parties hereto
concerning the subject matter hereof except as set forth herein.
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Section 4.10. Applicable Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT GIVING EFFECT TO THE
CONFLICT OF LAW PRINCIPLES THEREOF.
Section 4.11. Headings. The headings in the Articles and Sections of this
Agreement are inserted for convenience of reference only and shall not
constitute a part thereof.
IN WITNESS WHEREOF, each of the parties has executed this Agreement as
of the date first above written.
ATTEST: ROUGE STEEL COMPANY
/s/ Michael A. Weiss By: /s/ William E. Hornberger
- ----------------------- -----------------------------------
Secretary Name: WILLIAM E. HORNBERGER
Title: V.P. EMPLOYEE RELATIONS
AND PUBLIC AFFAIRS
ATTEST: ROUGE INDUSTRIES, INC.
/s/ Michael A. Weiss By: /s/ Gary P. Latendresse
- ------------------------ ------------------------------
Secretary Name: GARY P. LATENDRESSE
Title: VICE PRESIDENT & CFO
ATTEST: ROUGE MERGER SUB, INC.
/s/ Michael A. Weiss By: /s/ Carl L. Valdiserri
- ------------------------ -----------------------------
Secretary Name: CARL L. VALDISERRI
Title: PRESIDENT
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EXHIBIT 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ROUGE INDUSTRIES, INC.
ROUGE INDUSTRIES, INC. (the "Corporation") a corporation originally
incorporated under the name of Rouge Steel Holding Corporation on November 12,
1996 and organized and existing under and by virtue of the General Corporation
Law of the State of Delaware, DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation adopted a resolution
proposing and declaring advisable that the Certificate of Incorporation of the
Corporation be amended and restated to read in its entirety as set forth in
paragraph FOURTH of this Amended and Restated Certificate of Incorporation.
SECOND: That by written consent of the sole stockholder, the stockholder
of the Corporation approved the adoption of this Amended and Restated
Certificate of Incorporation.
THIRD: That this Amended and Restated Certificate of Incorporation was
duly adopted in accordance with the provisions of Sections 242 and 245 of the
General Corporation Law of the State of Delaware.
FOURTH: That the Certificate of Incorporation of the Corporation, as
amended and restated hereby, reads in its entirety as follows:
ARTICLE FIRST
The name of the Corporation is:
ROUGE INDUSTRIES, INC.
ARTICLE SECOND
The registered office of the Corporation shall be located at 1013 Centre
Road, in the City of Wilmington, County of New Castle, State of Delaware. The
name of its registered agent in charge thereof is Corporation Service Company,
1013 Centre Road, in the City of Wilmington, County of New Castle, State of
Delaware.
ARTICLE THIRD
The purpose of the corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware.
ARTICLE FOURTH
SECTION 1. The total authorized capital stock of the Corporation is
96,690,400 shares, consisting of 8,000,000 shares of Preferred Stock, $.01 par
value per share ("Preferred Stock"), and 88,690,400 shares of Common Stock, of
which 80,000,000 shares shall be Class A Common Stock, $.01 par value per share
("Class A Common Stock"), and 8,690,400 shares shall be Class B Common Stock,
$.01 par value per share ("Class B Common Stock").
SECTION 2. The Board of Directors is authorized, subject to any
limitations prescribed by law, to provide for the issuance of shares of
Preferred Stock in series, and by filing a certificate pursuant to the
applicable law of the State of Delaware, to establish from time to time the
number of shares to be included in each such series, and to fix the
designation, powers, preferences and rights of the shares of each such series
and any qualifications, limitations or restrictions thereof.
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SECTION 3. The Class A Common Stock and the Class B Common Stock shall be
identical in all respects and shall have equal rights and privileges, except as
otherwise provided in this Article FOURTH.
SECTION 4. Subject to the express terms of any outstanding series of
Preferred Stock, dividends may be paid in cash or otherwise upon the Class A
Common Stock and the Class B Common Stock out of the assets of the Corporation
in the relationship and upon the terms provided for below with respect to each
such class:
(1) DIVIDENDS ON CLASS A COMMON STOCK.
Dividends on Class A Common Stock may be declared and paid in cash or shares
of Class A Common Stock only to the extent of the assets of the Corporation
legally available therefor reduced by an amount equal to the paid in surplus
attributable to the Class B Common Stock. Dividends declared and paid with
respect to shares of Class A Common Stock and any adjustments to surplus
resulting from either (i) the repurchase or issuance of any shares of Class A
Common Stock or (ii) any other reason deemed appropriate by the Board of
Directors shall be subtracted from or added to the amounts available for the
payment of dividends on Class A Common Stock. Subject to the foregoing, the
declaration and payment of dividends on the Class A Common Stock, and the
amount thereof, shall at all times be solely in the discretion of the Board
of Directors of the Corporation.
(2) DIVIDENDS ON CLASS B COMMON STOCK.
Dividends on the Class B Common Stock may be declared and paid in cash or
shares of Class A Common Stock only to the extent of the assets of the
Corporation legally available therefor reduced by an amount equal to the paid
in surplus attributable to the Class A Common Stock and only to the extent a
dividend (equal to the per share dividend declared and paid to the holders of
Class B Common Stock) is declared and paid on the Class A Common Stock.
Dividends declared and paid with respect to shares of Class B Common Stock
and any adjustments to surplus resulting from either (i) the repurchase of
any shares of Class B Common Stock or (ii) any other reason deemed
appropriate by the Board of Directors shall be subtracted from or added to
the amounts available for the payment of dividends on Class B Common Stock.
Subject to the foregoing, the declaration and payment of dividends on the
Class B Common Stock, and the amount thereof, shall at all times be solely in
the discretion of the Board of Directors of the Corporation.
SECTION 5. The holders of Class A Common Stock and Class B Common Stock
shall vote together, with any other class or series of capital stock of the
Corporation entitled to vote therewith, as a single class on all matters;
provided, however, that, in addition to any other vote required, (i) any
amendment, alteration or repeal of any of the provisions of this Amended and
Restated Certificate of Incorporation which adversely affects the rights,
powers or privileges of the Class A Common Stock shall be subject to approval
by both (A) the holders of a majority of the shares of Class A Common Stock and
Class B Common Stock then outstanding, voting together, with any other class or
series of capital stock of the Corporation entitled to vote therewith, as a
single class based upon their respective voting rights, and (B) the holders of
a majority of the shares of Class A Common Stock then outstanding, voting
separately as a class; (ii) the holders of Class B Common Stock voting
separately as a class shall be entitled to approve by the vote of a majority of
the shares of Class B Common Stock then outstanding any amendment, alteration
or repeal of any of the provisions of this Amended and Restated Certificate of
Incorporation which adversely affects the rights, powers or privileges of the
Class B Common Stock; (iii) any increase in the number of authorized shares of
Class B Common Stock shall be subject to approval by both (A) the holders of a
majority of the shares of Class A Common Stock and Class B Common Stock then
outstanding, voting together, with any other class or series of capital stock
of the Corporation entitled to vote therewith, as a single class based upon
their respective voting rights, and (B) the holders of a majority of the shares
of Class B Common Stock then outstanding, voting separately as a class. Holders
of Class A Common Stock or Class B Common Stock may not act by written consent
in lieu of a meeting. Subject to adjustment pursuant to Section 10 of this
Article Fourth, each holder of Class A Common Stock shall be entitled to one
vote, in person or by proxy, for each share of Class A Common Stock outstanding
in his name on the stock transfer books of the Corporation and each holder of
Class B Common Stock shall be entitled to 2.5 votes, in person or by proxy, for
each share of Class B Common Stock outstanding in his name on the stock
transfer books of the Corporation.
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SECTION 6. The affirmative vote of the holders of at least 66 2/3 percent
of the combined voting power of the then outstanding shares of stock of all
classes and series of the Corporation entitled to vote generally in the
election of directors ("Voting Stock"), voting together as a single class,
shall be required to approve, adopt or authorize any of the following actions:
(i) a merger or consolidation of the Corporation with or into another
person or entity;
(ii) any sale, lease, exchange, mortgage, pledge, transfer, dividend or
distribution or other disposition (in one transaction or a series of
transactions) to or with any entity or person of all or substantially all the
assets of the Corporation or of any Subsidiary (as defined in Section 7);
(iii) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation;
(iv) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or consolidation
of the Corporation with any of its Subsidiaries, or any other transaction, that
in any such case has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class or series of stock
or of securities convertible into stock of the Corporation or any Subsidiary
that is directly or indirectly beneficially owned by any person or entity;
(v) any series or combination of transactions directly or indirectly
having the same effect as any of the foregoing; or
(vi) any agreement, contract or other arrangement providing directly or
indirectly for any of the foregoing.
SECTION 7. Notwithstanding any other provisions of this Amended and
Restated Certificate of Incorporation, the vote of stockholders of the
Corporation required to approve any Business Combination (as hereinafter
defined) shall be as set forth in this Section 7.
(i) In addition to any affirmative vote required by law or by this Amended
and Restated Certificate of Incorporation or any resolution or resolutions of
the Board of Directors adopted pursuant to Article Seventh of this Amended and
Restated Certificate of Incorporation, and except as otherwise expressly
provided in clause (iii) of this Section 7:
(a) any merger or consolidation of the Corporation with (1) any
Interested Stockholder or (2) any other entity (whether or not itself an
Interested Stockholder) that is, or after such merger or consolidation would
be, an Affiliate or Associate of an Interested Stockholder; or
(b) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of any Interested
Stockholder or any Affiliate or Associate of any Interested Stockholder; or
(c) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries, or any other
transaction (whether or not with or into or otherwise involving any
Interested Stockholder), that in any such case has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding shares
of any class or series of stock or securities convertible into stock of the
Corporation or any Subsidiary that is directly or indirectly beneficially
owned by any Interested Stockholder or any Affiliate or Associate of any
Interested Stockholder; or
(d) any series or combination of transactions directly or indirectly
having the same effect as any of the foregoing; or
(e) any agreement, contract or other arrangement providing directly or
indirectly for any of the foregoing;
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shall not be consummated without the affirmative vote of the holders of at
least 80 percent of the combined voting power of the then outstanding Voting
Stock (as defined above in Section 6), voting together as a single class. Such
affirmative vote shall be required notwithstanding the fact that no vote may be
required, or that a lesser percentage may be specified, by law or by this
Amended and Restated Certificate of Incorporation or any resolution or
resolutions of the Board of Directors adopted pursuant to Article Seventh of
this Amended and Restated Certificate of Incorporation or in any agreement with
any national securities exchange or otherwise.
(ii) The term "Business Combination" as used in this Section 7 shall mean
any transaction that is referred to in any one or more of paragraphs (a)
through (e) of clause (i) of this Section 7.
(iii) The provisions of clause (i) of this Section 7 shall not be
applicable to any particular Business Combination, and such Business
Combination shall require only such affirmative vote as is required by law and
any other provision of this Amended and Restated Certificate of Incorporation
and any resolution or resolutions of the Board of Directors adopted pursuant to
Article Seventh of this Amended and Restated Certificate of Incorporation, if
all the conditions specified in either of the following paragraphs (a) or (b)
are met:
(a) such Business Combination shall have been approved by a majority of
the Disinterested Directors; or
(b) all of the six conditions specified in the following clauses (1)
through (6) shall have been met:
(1) the transaction constituting the Business Combination shall
provide for a consideration to be received by holders of Common Stock in
exchange for all their shares of Common Stock, and the aggregate amount of
the cash and the Fair Market Value as of the date of the consummation of
the Business Combination of any consideration other than cash to be
received per share by holders of Common Stock in such Business Combination
shall be at least equal to the higher of the following:
(A) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid
in order to acquire any shares of Common Stock beneficially owned by the
Interested Stockholder that were acquired (I) within the two-year period
immediately prior to the Announcement Date or (II) in the transaction in
which it became an Interested Stockholder, whichever is higher; and
(B) the Fair Market Value per share of Common Stock on the
Announcement Date or on the Determination Date, whichever is higher; and
(2) the transaction constituting the Business Combination shall
provide for a consideration to be received by holders of any class or
series of outstanding Voting Stock other than Common Stock in exchange for
all their shares of such Voting Stock, and the aggregate amount of the cash
and the Fair Market Value as of the date of the consummation of the
Business Combination of any consideration other than cash to be received
per share by holders of shares of such Voting Stock in such Business
Combination shall be at least equal to the highest of the following (it
being intended that the requirements of this paragraph (b) (2) shall be
required to be met with respect to every class and series of such
outstanding Voting Stock, whether or not the Interested Stockholder
beneficially owns any shares of a particular class or series of Voting
Stock):
(A) (if applicable) the highest per share price (including any
brokerage commissions, transfer taxes and soliciting dealers' fees) paid
in order to acquire any share of such class or series of Voting Stock
beneficially owned by the Interested Stockholder that were acquired (I)
within the two-year period immediately prior to the Announcement Date or
(II) in the transaction in which it became an Interested Stockholder,
whichever is higher;
(B) (if applicable) the highest preferential amount per share to
which the holders of shares of such class or series of Voting Stock are
entitled in the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation; and
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(C) the Fair Market Value per share of such class or series of
Voting Stock on the Announcement Date or on the Determination Date,
whichever is higher; and
(3) the consideration to be received by holders of a particular class
or series of outstanding Voting Stock (including Common Stock) shall be in
cash or in the same form as was previously paid in order to acquire shares
of such class or series of Voting Stock that are beneficially owned by the
Interested Stockholder, and if the Interested Stockholder beneficially owns
shares of any class or series of Voting Stock that were acquired with
varying forms of consideration, the form of consideration to be received by
holders of such class or series of Voting Stock shall be either cash or the
form used to acquire the largest number of shares of such class or series
of Voting Stock beneficially owned by it; provided, however, that this
clause (3) shall not apply to (A) any shares of Common Stock acquired by
Worthington Industries, Incorporated ("Worthington") or its Affiliates
prior to the effective date of this Amended and Restated Certificate of
Incorporation or (B) any shares of Common Stock purchased by Worthington or
its Affiliates that would result in Worthington and its Affiliates owning
an aggregate of not more than 35% of the total number (determined on a
fully-diluted basis) of the issued and outstanding shares of Common Stock
of the Corporation; and
(4) after such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business Combination:
(A) within the two years prior to the Announcement Date except as
approved by a majority of the Disinterested Directors, there shall have
been no failure to declare and pay at the regular dates therefor the full
amount of any dividends (whether or not cumulative) payable on the
outstanding Preferred Stock or class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation;
(B) within the two years prior to the Announcement Date there shall
have been (I) no reduction in the annual rate of dividends paid on the
Common Stock (except as necessary to reflect any subdivision of the
Common Stock), except as approved by a majority of the Disinterested
Directors, and (II) an increase in such annual rate of dividends (as
necessary to prevent any such reduction) in the event of any
reclassification (including any reverse stock split), recapitalization,
reorganization or any similar transaction that has the effect of reducing
the number of outstanding shares of the Common Stock, unless the failure
so to increase such annual rate is approved by a majority of the
Disinterested Directors; and
(C) such Interested Stockholder shall not have become the beneficial
owner of any additional shares of Voting Stock except as part of the
transaction that resulted in such Interested Stockholder becoming an
Interested Stockholder; provided, however, that this subclause (C) shall
not apply to (I) any shares of Common Stock acquired by Worthington or
its Affiliates prior to the effective date of this Restated Certificate
of Incorporation or (II) any shares of Common Stock purchased by
Worthington or its Affiliates that would result in Worthington and its
Affiliates owning an aggregate of not more than 35% of the total number
(determined on a fully-diluted basis) of the issued and outstanding
shares of Common Stock of the Corporation; and
(5) after such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the
benefit, directly or indirectly (except proportionately as a stockholder
and except in the ordinary course of business or as part of a
supplier/customer relationship), of any loans, advances, guarantees,
pledges or other financial assistance or any tax credits or other tax
advantages provided by the Corporation, whether in anticipation of or in
connection with such Business Combination or otherwise; and
(6) a proxy or information statement describing the proposed Business
Combination and complying with the requirements of the Securities Exchange
Act of 1934 and the rules and regulations thereunder (or any subsequent
provisions replacing such Act, rules or regulations) shall be mailed to
public stockholders of the Corporation at least 30 days prior to the
consummation of such Business Combination (whether or not such proxy or
information statement is required to be mailed pursuant to such Act or
subsequent provisions).
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(iv) For purposes of this Section 7:
(a) A "person" shall mean any individual, firm, corporation,
partnership, trust or other entity.
(b) "Interested Stockholder" shall mean any person (other than the
Corporation or any Subsidiary) who or that:
(1) is the beneficial owner, directly or indirectly, of twenty percent
or more of the combined voting power of the then outstanding Voting Stock;
or
(2) is an Affiliate of the Corporation and at any time within the
two-year period immediately prior to the date in question was the
beneficial owner, directly or indirectly, of twenty percent or more of the
combined voting power of the then outstanding Voting Stock; or
(3) is an assignee of or has otherwise succeeded to the beneficial
ownership of any shares of Voting Stock that were at any time within the
two-year period immediately prior to the date in question beneficially
owned by an Interested Stockholder, if such assignment or succession shall
have occurred in the course of a transaction or series of transactions not
involving a public offering within the meaning of the Securities Act of
1933.
(c) A person shall be a "beneficial owner" of any Voting Stock:
(1) that such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(2) that such person or any of its Affiliates or Associates has (A)
the right to acquire (whether such right is exercisable immediately or only
after the passage of time), pursuant to any agreement, arrangement or
understanding or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (B) the right to vote or to direct
the vote pursuant to any agreement, arrangement or understanding; or
(3) that is beneficially owned, directly or indirectly, by any other
person with which such person or any of its Affiliates or Associates has
any agreement, arrangement or understanding for the purposes of acquiring,
holding, voting or disposing of any shares of Voting Stock, but excluding
any such agreement, arrangement or understanding existing on the effective
date of this Amended and Restated Certificate of Incorporation and as to
which the Corporation is a party.
(d) For the purposes of determining whether a person is an Interested
Stockholder pursuant to paragraph (b) of this clause (iv), the number of
shares of Voting Stock deemed to be outstanding shall include all shares
deemed owned by such person through application of paragraph (c) of this
clause (iv) but shall not include any other shares of Voting Stock that may
be issuable to other persons upon exercise of conversion rights, exchange
rights, warrants or options, or otherwise.
(e) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on January 1, 1994.
(f) "Subsidiary" shall mean any corporation a majority of whose
outstanding stock having ordinary voting power in the election of directors
is owned by the Corporation, by a Subsidiary or by the Corporation and one of
more Subsidiaries; provided, however, that for the purposes of the definition
of Interested Stockholder set forth in paragraph (b) of this clause (iv), the
term "Subsidiary" shall mean only a corporation of which a majority of each
class of equity security is owned by the Corporation, by a Subsidiary or by
the Corporation and one or more Subsidiaries.
(g) "Disinterested Director" means any member of the Board of Directors
of the Corporation who (1) is unaffiliated with, and not a nominee of, the
Interested Stockholder proposing to engage in the Business
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Combination, and any successor of a Disinterested Director who is
unaffiliated with, and not a nominee of, such Interested Stockholder and is
recommended to succeed a Disinterested Director by a majority of Disinterested
Directors then on the Board of Directors and (2) is not an employee of the
Corporation.
(h) "Fair Market Value" means: (1) in the case of stock, the highest
closing sale price during the 30-day period immediately preceding the date in
question of a share of such stock on the New York Stock Exchange
Composite Tape, or, if such stock is not quoted on the Composite Tape, on the
New York Stock Exchange, or, if such stock is not listed on such Exchange, on
the principal United States national securities exchange registered under the
Securities Exchange Act of 1934 on which such stock is listed, or, if such
stock is not listed on any such exchange, the highest closing sale price or
bid quotation with respect to a share of such stock during the 30-day period
immediately preceding the date in question on the National Association of
Securities Dealers, Inc. Automated Quotations System or any system then in
use, or, if no such prices or quotations are available, the fair market value
on the date in question of a share of such stock as determined by a majority
of the Disinterested Directors in good faith; and (2) in the case of property
other than cash or stock, the fair market value of such property on the date
in question as determined by a majority of the Disinterested Directors in
good faith.
(i) "Announcement Date" means the date of first public announcement of
the proposal of the Business Combination.
(j) "Determination Date" means the date on which the Interested
Stockholder became an Interested Stockholder.
(v) A majority of the Disinterested Directors of the Corporation shall
have the power and duty to determine, on the basis of information known to them
after reasonable inquiry, all facts necessary to determine compliance with this
Section 7, including, without limitation, (a) whether a person is an Interested
Stockholder, (b) the number of shares of Voting Stock beneficially owned by any
person, (c) whether a person is an Affiliate or Associate of another person and
(d) whether the requirements of clause (iii) of this Section 7 have been met
with respect to any Business Combination; and the good faith determination of a
majority of the Disinterested Directors on such matters shall be conclusive and
binding for all purposes of this Section 7.
SECTION 8. CONVERSION OF CLASS B COMMON STOCK.
(i) All or any of the shares of Class B Common Stock may be converted, at
any time or from time to time in the discretion of the holders thereof into
fully paid and nonassessable shares of Class A Common Stock in accordance with
the Conversion Rate (as defined below).
(ii) Upon the death or permanent disability (as defined in the manner set
forth below) of Carl L. Valdiserri or if Carl L. Valdiserri voluntarily ceases
to be employed as the Chairman of the Board of Directors of the Corporation,
all shares of Class B Common Stock owned by any holder of shares of Class B
Common Stock who has consented in writing to the conversion of such shares of
Class B Common Stock pursuant to this Section 8(ii) shall be converted
automatically into fully paid and nonassessable shares of Class A Common Stock
in accordance with the Conversion Rate.
(iii) Upon the Transfer (as defined below) of any shares of Class B Common
Stock, such shares of Class B Common Stock shall be converted automatically
into fully paid and nonassessable shares of Class A Common Stock in accordance
with the Conversion Rate.
(iv) For purposes of this Section 8:
(a) "Conversion Rate" shall mean the number of shares of Class A Common
Stock into which each share of Class B Common Stock shall be converted
pursuant to this Section 8 determined as follows: Each share of Class B
Common Stock shall be converted into one share of Class A Common Stock.
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(b) "Designated Transferee" means: (1) (A) members of Carl L.
Valdiserri's immediate family (including parents, siblings, spouse and
children, whether by birth or by adoption); (B) any one or more charitable or
other trusts which are established in connection with the estate planning of
Carl L. Valdiserri or in connection with Carl L. Valdiserri's estate, in each
case where the beneficiaries of such trusts are the beneficiaries of Carl L.
Valdiserri's estate; (C) any one or more trusts for the sole benefit of Carl
L. Valdiserri or one or more of the persons referred to in clause (A) of this
definition; (D) any corporation all of whose issued and outstanding voting
capital stock is held legally and beneficially and of record by Carl L.
Valdiserri; provided that in each case (i) Carl L. Valdiserri retains sole
voting power with respect to the Class B Common Stock held by any person or
entity referred to in clause (1) (A), (B), (C) or (D) of this definition and
(ii) the person or entity referred to in clause (1) (A), (B), (C) or (D) of
this definition consents to the conversion of any Class B Common Stock held
by them pursuant to and upon the occurrence of the events defined in Section
8 (ii) of this Article; and (2) any Affiliate of Worthington.
(c) "Affiliate" shall mean, as to any person, any other person that
directly or indirectly controls, or is under common control with, or is
controlled by, such person, and if such person is an individual, any member
of the immediate family (including parents, siblings, spouse and children,
whether by birth or by adoption) of such individual and any trust whose
principal beneficiary is such individual or one or more members of such
immediate family and any person who is controlled by any such member or
trust. As used in this definition, "control" (including, with its correlative
meanings, "controlled by" and "under common control with") shall mean
possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of securities or
partnership or other ownership interests, by contract or otherwise).
(d) "Transfer" shall mean the conveyance, sale, lease, assignment,
granting of any lien on or other transfer or disposition of any share of
capital stock of the Corporation (or any legal or beneficial interest
therein), in each case other than to a Designated Transferee; provided,
however, that a pledge of capital stock shall not be deemed a "Transfer"
hereunder if the pledgor retains beneficial ownership of the stock and Carl
L. Valdiserri retains sole voting power with respect to the stock, but any
Transfer by the pledgee shall be deemed a Transfer within the meaning of this
Section 8. Any shares of capital stock of the Corporation held by a
Designated Transferee that ceases to meet the definition of Designated
Transferee set forth in paragraph (b) above shall be deemed to be the subject
of a Transfer within the meaning of this Section 8 on the date such
stockholder ceases to meet the definition of Designated Transferee.
(e) A determination of permanent disability of Carl L. Valdiserri shall
be established upon (1) any final judicial determination of the permanent
disability or incapacity of Carl L. Valdiserri, (2) the delivery to the
Corporation of a certificate of a qualified medical doctor, selected by the
Board of Directors of the Corporation for such purpose, to the effect that
Carl L. Valdiserri is unable to perform such duties of his office because of
a permanent physical or mental incapacity or (3) any failure by Carl L.
Valdiserri to make himself reasonably available for an examination by such
medical doctor.
(v) No fraction of a share of Class A Common Stock shall be issued in
connection with the conversion of shares of Class B Common Stock into Class A
Common Stock, but in lieu thereof, each holder of Class B Common Stock who
would otherwise be entitled to a fractional interest of a share of Class A
Common Stock shall receive a cash payment (without interest) (the "Fractional
Payment") equal to the product of (A) the fraction of a share of Class A Common
Stock to which such holder would otherwise have been entitled and (B) the
Average Market Price Per Share of the Class A Common Stock on the Conversion
Date (as defined below).
(vi) No adjustments in respect of dividends shall be made upon the
conversion of any shares of Class B Common Stock; provided, however, that if
the Conversion Date with respect to Class B Common Stock shall be subsequent to
the record date for the payment of a dividend or other distribution thereon or
with respect thereto but prior to the payment or distribution thereof, the
registered holders of such shares at the close of business on such record date
shall be entitled to receive the dividend or other distribution payable on such
shares on the date set for payment of such dividend or other distribution
notwithstanding the conversion of such shares or the Corporation's default in
payment of the dividend or distribution due on such date.
<PAGE> 9
(vii) At such time or times as any holder of Class B Common Stock
exercises the right to cause all or any of the shares of Class B Common Stock
to be converted into Class A Common Stock in accordance with clause (i) of this
Section 8, such holder shall give notice of such conversion to the Corporation,
Attention: Secretary, by mailing by first-class mail a notice of such
conversion (the "Conversion Notice"), not less than ten (10) nor more than
thirty (30) days prior to the date fixed for such conversion (the "Conversion
Date").
(viii) Before any holder of Class B Common Stock shall be entitled to
receive certificates representing such shares of Class A Common Stock upon
conversion of shares of Class B Common Stock as provided in this Section 8,
such holder shall surrender to the Corporation certificates for such shares of
Class B Common Stock, duly endorsed to the Corporation or in blank or
accompanied by proper instruments of transfer to the Corporation or in blank,
unless the Corporation shall waive such requirement. The Corporation will, as
soon as practicable after such surrender of certificates representing such
shares of Class B Common Stock issue and deliver at the office of the transfer
agent representing the Class A Common Stock to Carl L. Valdiserri or
Worthington or any Designated Transferee, or to their nominee or nominees,
certificates representing the number of shares of Class A Common Stock to
which Carl L. Valdiserri or Worthington or any Designated Transferee shall be
entitled as aforesaid.
(ix) From and after any applicable Conversion Date or any automatic
conversion described above, all rights of a holder of shares of Class B Common
Stock which were converted into shares of Class A Common Stock shall cease
except for (a) the right to receive certificates representing shares of Class A
Common Stock as contemplated by clauses (i), (ii) and (iii) of this Section 8,
(b) the right to receive any Fractional Payment as contemplated by clause (v)
of this Section 8 and (c) the right to dividends as provided in clause (vi) of
this Section 8.
(x) At such time as any Conversion Notice is delivered with respect to any
shares of Class B Common Stock, or at the time of the Conversion Date, if
earlier, the Corporation shall have reserved and kept available, solely for the
purpose of issuance upon conversion of the outstanding shares of Class B Common
Stock, such number of shares of Class A Common Stock as shall be issuable upon
the automatic conversion of the number of shares of Class B Common Stock
provided for in clause (ii) or (iii) of this Section 8 or to be specified in
the applicable Conversion Notice, provided, that nothing contained herein shall
be construed to preclude the Corporation from satisfying its obligations in
respect of the conversion of the outstanding shares of Class B Common Stock, by
delivery of purchased shares of Class A Common Stock which are held in the
treasury of the Corporation.
(xi) The Conversion Rate shall be subject to adjustment from time to time
as follows:
(a) In case the Corporation shall (1) pay a dividend or make a
distribution on its Class A Common Stock that is paid or made (A) in other
shares of stock of the Corporation or (B) in rights to purchase stock or
other securities if such rights are not separable from the Class A Common
Stock except upon the occurrence of a contingency, (2) subdivide its
outstanding shares of Class A Common Stock into a greater number of shares or
(3) combine its outstanding shares of Class A Common Stock into a smaller
number of shares, then in each such case the Conversion Rate in effect
immediately prior thereto shall be adjusted retroactively so that the holder
of any shares of Class B Common Stock thereafter surrendered for conversion
shall be entitled to receive the number of shares of Class A Common Stock of
the Corporation and other shares and rights to purchase stock or other
securities (or, in the event of the redemption of any such shares or rights,
any cash, property or securities paid in respect of such redemption) which
such holder would have owned or have been entitled to receive after the
happening of any of the events described above had such shares of Class B
Common Stock been converted immediately prior to the happening of such event.
An adjustment made pursuant to this subparagraph (a) shall become effective
immediately after the record date in the case of a dividend or distribution
and shall become effective immediately after the effective date in the case
of a subdivision or combination.
(b) In case the Corporation shall issue rights or warrants to all
holders of its Class A Common Stock entitling them (for a period expiring
within 45 days after the date fixed for determination mentioned below) to
subscribe for or purchase shares of Class A Common Stock at a price per share
less than the current market price per share (determined as provided below)
of the Class A Common Stock on the date fixed for the determination of
stockholders entitled to receive such rights or warrants, then the Conversion
Rate in effect at
<PAGE> 10
the opening of business on the day following the date fixed for such
determination shall be increased by multiplying such Conversion Rate
by a fraction of which the numerator shall be the number of shares of Class A
Common Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Class A Common Stock so offered
for subscription or purchase and the denominator shall be the number of
shares of Class A Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Class A Common
Stock that the aggregate of the offering price of the total number of shares
of Class A Common Stock so offered for subscription or purchase would
purchase at such current market price, such increase to become effective
immediately after the opening of business on the day following the date fixed
for such determination; provided, however, in the event that all the shares
of Class A Common Stock offered for subscription or purchase are not
delivered upon the exercise of such rights or warrants, upon the expiration
of such rights or warrants the Conversion Rate shall be readjusted to the
Conversion Rate that would have been in effect had the numerator
and the denominator of the foregoing fraction and the resulting adjustment
been made based upon the number of shares of Class A Common Stock actually
delivered upon the exercise of such rights or warrants, rather than upon the
number of shares of Class A Common Stock offered for subscription or
purchase. For the purposes of this subparagraph (b), the number of shares of
Class A Common Stock at any time outstanding shall not include shares held
in the treasury of the Corporation.
(c) In case the Corporation shall, by dividend or otherwise, distribute
to all holders of its Class A Common Stock evidences of its indebtedness,
cash (excluding ordinary cash dividends paid out of retained earnings of the
Corporation), other assets or rights or warrants to subscribe for or purchase
any security (excluding those referred to in subparagraphs (a) and (b)
above), then in each such case the Conversion Rate shall be adjusted
retroactively so that the same shall equal the rate determined by multiplying
the Conversion Rate in effect immediately prior to the close of business on
the date fixed for the determination of stockholders entitled to receive such
distribution by a fraction of which the numerator shall be the current market
price per share (determined as provided below) of the Class A Common Stock on
the date fixed for such determination and the denominator shall be such
current market price per share of the Class A Common Stock less the amount of
cash and the then fair market value (as determined by the Board of Directors,
whose determination shall be conclusive and described in a resolution of the
Board of Directors) of the portion of the assets, rights or evidences of
indebtedness so distributed applicable to one share of Class A Common Stock,
such adjustment to become effective immediately prior to the opening of
business on the day following the date fixed for the determination of
stockholders entitled to receive such distribution.
(d) For the purpose of any computation under subparagraphs (b) and (c),
the current market price per share of Class A Common Stock on any date shall
be deemed to be the average of the daily closing prices for the 20
consecutive trading days commencing with the 30th trading day before the day
in question. The closing price for each day shall be the reported last sales
price regular way or, in case no such reported sale takes place on such day,
the average of the reported closing bid and asked prices regular way, in
either case on the New York Stock Exchange or, if the Class A Common Stock is
not listed or admitted to trading on such Exchange, on the principal national
securities exchange on which the Class A Common Stock is listed or admitted
to trading (based on the aggregate dollar value of all securities listed or
admitted to trading) or, if not listed or admitted to trading on any national
securities exchange, in the NASDAQ National Market System or, if the Class A
Common Stock is not listed or admitted to trading on any national securities
exchange or quoted in the NASDAQ National Market System, the average of the
closing bid and asked prices in the over-the- counter market as furnished by
any New York Stock Exchange member firm selected from time to time by the
Corporation for that purpose, or, if such prices are not available, the fair
market value set by, or in a manner established by, the Board of Directors of
the Corporation in good faith. "Trading day" shall mean a day on which the
national securities exchange or the NASDAQ National Market System used to
determine the closing price is open for the transaction of business or the
reporting of trades or, if the closing price is not so determined, a day on
which the New York Stock Exchange is open for the transaction of business.
(e) No adjustment in the Conversion Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%)
in such rate; provided, however, that the Corporation may make any such
adjustment at its election; and provided further, however, that any
adjustments which by reason
<PAGE> 11
of this subparagraph (e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this clause (xi) shall be made to the nearest cent or
to the nearest one-hundredth of a share, as the case may be.
(f) Whenever the Conversion Rate is adjusted as provided in any
provision of this clause (xi):
(1) the Corporation shall compute the adjusted Conversion Rate in
accordance with this clause (xi) and shall prepare a certificate signed by
the principal financial officer of the Corporation setting forth the
adjusted Conversion Rate and showing in reasonable detail the facts upon
which such adjustment is based, and such certificate shall forthwith be
filed with the transfer agent for the Class B Common Stock; and
(2) a notice stating that the Conversion Rate has been adjusted and
setting forth the adjusted conversion rate shall forthwith be required, and
as soon as practicable after it is required, such notice shall be mailed by
the Corporation to each holder of record of Class B Common Stock at such
holder's address as it shall appear upon the stock transfer books of the
Corporation.
(g) In the event that at any time, as a result of any adjustment made
pursuant to this clause (xi), the holder of any shares of Class B Common
Stock thereafter surrendered for conversion shall become entitled to receive
any shares of the Corporation other than shares of Class A Common Stock or to
receive any other securities, the number of such other shares or securities
so receivable upon conversion of any share of Class B Common Stock shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions contained in this clause (xi)
with respect to the Class A Common Stock.
(xii) In case of any reclassification of the Class A Common Stock, any
consolidation of the Corporation with, or merger of the Corporation into, any
other person, any merger of another person into the Corporation (other than a
merger that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Class A Common Stock), any sale or
transfer of all or substantially all of the assets of the Corporation or any
compulsory share exchange, pursuant to which share exchange the Class A Common
Stock is converted into other securities, cash or other property, then lawful
provision shall be made as part of the terms of such transaction whereby the
holder of each share of Class B Common Stock then outstanding shall have the
right thereafter, during the period such share shall be convertible, to convert
such share only into the kind and amount of securities, cash and other property
receivable upon such reclassification, consolidation, merger, sale, transfer or
share exchange by a holder of the number of shares of Class A Common Stock of
the Corporation into which such share of Class B Common Stock might have been
converted immediately prior to such reclassification, consolidation, merger,
sale, transfer or share exchange. The Corporation, the person formed by such
consolidation or resulting from such merger or that acquires such assets or
that acquires the Corporation's shares, as the case may be, shall make
provisions in its certificate or articles of incorporation or other constituent
document to establish such right. Such certificate or articles of incorporation
or other constituent document shall provide for adjustments which, for events
subsequent to the effective date of such certificate or articles of
incorporation or other constituent document, shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Section 8. The above
provisions shall similarly apply to successive reclassifications,
consolidations, mergers, sales, transfers or share exchanges.
(xiii) The Corporation shall at all times reserve and keep available, out
of its authorized and unissued stock, solely for the purpose of effecting the
conversion of the Class B Common Stock, such number of shares of its Class A
Common Stock free of preemptive rights as shall from time to time be sufficient
to effect the conversion of all shares of Class B Common Stock from time to
time outstanding. The Corporation shall from time to time, in accordance with
the laws of the State of Delaware, increase the authorized number of shares of
Class A Common Stock if at any time the number of shares of Class A Common
Stock not outstanding shall not be sufficient to permit the conversion of all
the then outstanding shares of Class B Common Stock.
If any shares of Class A Common Stock required to be reserved for purposes
of conversion of the Class B Common Stock hereunder require registration with
or approval of any governmental authority under any Federal or State law before
such shares may be issued upon conversion, the Corporation will in good faith
and as
<PAGE> 12
expeditiously as possible endeavor to cause such shares to be duly registered
approved, as the case may be. If the Class A Common Stock is
listed on the New York Stock Exchange or any other national securities
exchange, the Corporation will, if permitted by the rules of such exchange,
list and keep listed on such exchange, upon official notice of issuance, all
shares of Class A Common Stock issuable upon conversion of the Class B Common
Stock.
The Corporation will pay any and all issue or other taxes that may be
payable in respect of any issue or delivery of shares of Class A Common Stock
on conversion of the Class B Common Stock. The Corporation shall not, however,
be required to pay any tax that may be payable in respect of any transfer
involved in the issue or delivery of Class A Common Stock (or other securities
or assets) in a name other than that in which the shares of Class B Common
Stock so converted were registered, and no such issue or delivery shall be made
unless and until the person requesting such issue has paid to the Corporation
the amount of such tax or has established, to the satisfaction of the
Corporation, that such tax has been paid.
Before taking any action that would cause an adjustment reducing the
Conversion Rate, the Corporation will take any corporate action that may, in
the opinion of its counsel, be necessary in order that the Corporation may
validly and legally issue fully paid and nonassessable shares of Class A
Common Stock at the Conversion Rate as so adjusted.
(xiv) In case:
(a) the Corporation shall (1) declare any dividend (or any other
distribution) on its Class A Common Stock, other than (A) a dividend payable
in shares of Class A Common Stock or (B) a dividend payable in cash out of
its retained earnings other than any special or nonrecurring or other
extraordinary dividend or (2) declare or authorize a redemption or repurchase
of in excess of ten percent (10%) of the then outstanding shares of Class A
Common Stock; or
(b) the Corporation shall authorize the granting to the holders of Class
A Common Stock of rights or warrants to subscribe for or purchase any shares
of stock of any class or of any other rights or warrants (other than any
rights specified in paragraph (a)(1)(B) of clause (xi) of this Section 8; or
(c) of any reclassification of Class A Common Stock (other than a
subdivision or combination of the outstanding Class A Common Stock, or a
change in par value, or from par value to no par value, or from no par value
to par value), or of any consolidation or merger to which the Corporation is
a party and for which approval of any stockholders of the Corporation shall
be required, or of the sale or transfer of all or substantially all of the
assets of the Corporation or of any compulsory share exchange whereby the
Class A Common Stock is converted into other securities, cash or other
property; or
(d) of the voluntary or involuntary dissolution, liquidation or winding
up of the Corporation;
then the Corporation shall cause to be filed with the transfer agent for the
Class B Common Stock, and shall cause to be mailed to each holder of record of
the outstanding Class B Common Stock, at such holder's address as it shall
appear upon the stock transfer books of the Corporation, at least 15 days prior
to the applicable record date hereinafter specified, a notice stating (x) the
date on which a record is to be taken for the purpose of such dividend,
distribution, redemption or granting of rights or warrants or, if a record is
not to be taken, the date as of which the holders of Class A Common Stock of
record to be entitled to such dividend, distribution, redemption, rights or
warrants are to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, share exchange, dissolution, liquidation
or winding up is expected to become effective, and the date as of which it is
expected that holders of Class A Common Stock of record shall be entitled to
exchange their shares of Class A Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer,
share exchange, dissolution, liquidation or winding up (but neither the failure
so to mail such notice nor any defect therein or in the mailing thereof shall
affect the validity of the corporate action required to be specified in such
notice).
<PAGE> 13
SECTION 9. In the event of the liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, after there shall have been
paid or set apart for the holders of Preferred Stock the full preferential
amounts to which they are entitled, the holders of Class A Common Stock and
Class B Common Stock shall be entitled to receive the assets of the Corporation
remaining for distribution to its stockholders, ratably in proportion to the
number of shares held by them, respectively, together with any other
stockholder entitled to participate in such liquidation, dissolution or winding
up on a parity with the Class A Common Stock and the Class B Common Stock.
SECTION 10. SUBDIVISION OR COMBINATION.
(1) If the Corporation shall in any manner subdivide (by stock split or
otherwise) or combine (by reverse stock split or otherwise) the outstanding
shares of the Class A Common Stock or Class B Common Stock, or pay a stock
dividend in shares of any class to holders of that class, the per share
voting rights specified in Section 5 of this Article Fourth of Class B Common
Stock relative to Class A Common Stock shall be appropriately adjusted so as
to avoid any dilution in the aggregate voting rights of any class.
Distribution by the Corporation of shares of any class of its common stock as
a dividend on any other class of its common stock shall not require an
adjustment pursuant to this Section 10.
(2) The determination of any adjustment required under this Section 10
shall be made by the Corporation's Board of Directors; any such determination
shall be binding and conclusive upon all holders of shares of all classes of
the Corporation's common stock. Following any such determination, the
Secretary of the Corporation shall maintain a record of any such adjustment.
SECTION 11. Any Preferred Stock, Class A Common Stock or Class B Common
Stock, authorized hereunder or under any amendment hereof, in the discretion of
the Board of Directors, may be issued, except as herein otherwise provided, in
payment for property or services, or as bonuses to employees of the Corporation
or employees of subsidiary companies, or for other assets or securities
including cash, necessary or desirable, in the judgment of the Board of
Directors, to be purchased or acquired from time to time for the Corporation,
or for any other lawful purpose of the Corporation.
SECTION 12. If it seems desirable so to do, the Board of Directors may
from time to time issue scrip for fractional shares of stock. Such scrip shall
not confer upon the holder any right to dividends or any voting or other rights
of a stockholder of the Corporation, but the Corporation shall from time to
time, within such time as the Board of Directors may determine or without limit
of time if the Board of Directors so determines, issue one or more whole shares
of stock upon the surrender of scrip for fractional shares aggregating the
number of whole shares issuable in respect of the scrip so surrendered,
provided that the scrip so surrendered shall be properly endorsed for transfer
if in registered form.
ARTICLE FIFTH
The Corporation is to have perpetual existence.
ARTICLE SIXTH
The private property of the stockholders shall not be subject to the
payment of corporate debts to any extent whatever.
ARTICLE SEVENTH
SECTION 1. Except as otherwise fixed pursuant to the provisions of Article
Fourth hereof relating to the rights of the holders of any class or series of
stock having a preference over the Common Stock as to dividends
<PAGE> 14
or upon liquidation, the number of Directors of the Corporation shall be not
less than six and not more than nine. Subject to the rights of the holders of
any class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation, in case of any vacancy in the Board of
Directors, the remaining Directors, by affirmative vote of a majority thereof,
may, and the stockholders shall not be entitled to, elect a successor to hold
office for the unexpired portion of the term of the Director whose place is
vacant and until his successor shall be duly elected and qualified.
SECTION 2. The Directors, other than those who may be elected by the
holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation, shall be divided into three classes:
Class I, Class II and Class III. Within the limits specified in this Article
Seventh and the By-Laws of the Corporation, the number of directors in each
class shall be determined by resolution of the Board of Directors; provided,
however, that the number of Directorships shall be apportioned among the
classes so as to maintain the classes as nearly equal in number as possible.
The terms of office of the classes of Directors shall expire at the times of
the annual meetings of the stockholders as follows: Class I at the annual
meeting held in 1994, Class II at the annual meeting held in 1995 and Class III
at the annual meeting held in 1996, or thereafter in each case when their
respective successors are elected and qualified. At each subsequent annual
meeting, the Directors chosen to succeed those whose terms are expiring shall
be identified as being of the same class as the Directors whom they succeed,
and shall be elected for a term expiring at the time of the third succeeding
annual meeting of stockholders, or thereafter in each case when their
respective successors are elected and qualified. No decrease in the number of
directors constituting the Board of Directors shall shorten the term of any
incumbent director.
SECTION 3. No Director shall be personally liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
Director, except for liability (i) for any breach of the Director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174, or any successor provision thereto, of the
Delaware General Corporation Law, or (iv) for any transaction from which the
Director derived an improper personal benefit. If the Delaware General
Corporation Law is amended to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of a Director
of the Corporation shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended.
SECTION 4. If Carl L. Valdiserri voluntarily ceases to be employed as
Chief Executive Officer of the Corporation and voluntarily elects not to remain
as Chairman of the Board of Directors of the Corporation, then the first and
only the first successor to Carl L. Valdiserri as Chief Executive Officer and
Chairman of the Board shall be chosen by a vote of 75% of the entire Board of
Directors, but excluding Carl L. Valdiserri and his designees on the Board of
Directors. If Carl L. Valdiserri continues to be Chairman of the Board of
Directors of the Corporation, (i) the first and only the first successor to
Carl L. Valdiserri as the Chief Executive Officer of the Corporation shall be
chosen by a vote of 75% of the entire Board of Directors, including Carl L.
Valdiserri and his designees on the Board of Directors; and (ii) the first and
only the first successor to Carl L. Valdiserri as Chairman of the Board shall
be chosen by a vote of 75% of the entire Board of Directors, including Carl L.
Valdiserri and his designees on the Board of Directors.
SECTION 5. In furtherance, and not in limitation of the powers conferred
by law, the Board of Directors is expressly authorized:
(a) To make, alter, amend and repeal the By-Laws of the Corporation.
(b) To remove at any time any officer elected or appointed by the Board
of Directors. Any other officer or employee of the Corporation may be removed
at any time by a vote of the Board of Directors, or by any committee or
superior officer upon whom such power of removal may be conferred by the
By-Laws or by the vote of the Board of Directors.
(c) From time to time to fix and to vary the sum to be reserved over and
above its capital stock paid in before declaring any dividends; to direct and
determine the use and disposition of any surplus or net profits over and
above the capital stock paid in; to fix the time of declaring and paying any
dividend, and, unless otherwise provided in this Certificate or in the
By-Laws, to determine the amount of any dividend. All sums reserved as
working capital or otherwise may be applied from time to time to the
acquisition or purchase of its
<PAGE> 15
bonds or other obligations or shares of its own capital stock or other
property to such extent and in such manner and upon such terms as the Board
of Directors shall deem expedient and neither the stocks, bonds, or other
property so acquired shall be regarded as accumulated profits for the
purpose of declaring or paying dividends unless otherwise determined by the
Board of Directors, but shares of such capital stock so purchased or
acquired may be resold, unless such shares shall have been retired for the
purpose of decreasing the Corporation's capital stock as provided by law.
(d) From time to time to determine whether and to what extent, and at
what time and places and under what conditions and regulations the accounts
and books of the Corporation (other than the stock ledger), or any of them,
shall be open to the inspection of the stockholders; and no stockholder shall
have any right to inspect any account or book or document of Corporation,
except as conferred by statute or authorized by the Board of Directors or by
a resolution of the stockholders.
(e) The Corporation may by its By-Laws confer upon the Directors powers
and authorities additional to the foregoing and to those expressly conferred
upon them by statute.
ARTICLE EIGHTH
Both the stockholders and the Directors of the Corporation may hold their
meetings and the Corporation may have an office or offices in such place or
places outside of the State of Delaware as the By-Laws may provide, and the
Corporation may keep its books outside of the State of Delaware except as
otherwise provided by law.
ARTICLE NINTH
In addition to any requirement of law and any other provision of this
Amended and Restated Certificate of Incorporation or any resolution or
resolutions of the Board of Directors adopted pursuant to Article Seventh of
this Amended and Restated Certificate of Incorporation (and notwithstanding the
fact that a lesser percentage may be specified by law, this Amended and
Restated Certificate of Incorporation or any such resolution or resolutions),
the affirmative vote of the holders of 66 2/3 percent or more of the combined
voting power of the then outstanding shares of Voting Stock, voting together as
a single class, shall be required to amend, alter or repeal this Amended and
Restated Certificate of Incorporation. Subject to the foregoing provisions of
this Article Ninth, the Corporation reserves the right to amend, alter, change
or repeal any provision contained in this Amended and Restated Certificate of
Incorporation in the manner, now or hereafter prescribed by statute, and all
rights conferred on stockholders herein are granted subject to this
reservation.
<PAGE> 16
IN WITNESS WHEREOF, Rouge Industries, Inc. has caused this Certificate to
be signed and attested by its duly authorized officers, this 22 day of July,
1997.
By: /s/ Gary P. Latendresse
------------------------------------
Name: Gary P. Latendresse
Title: Vice President and
Chief Financial Officer
ATTEST:
/s/ Michael A. Weiss
--------------------
Secretary
<PAGE> 1
EXHIBIT 3.2
AMENDED AND RESTATED BY-LAWS
OF
ROUGE INDUSTRIES, INC.
As Amended July 20, 1997
ARTICLE I
MEETINGS OF STOCKHOLDERS, ETC.
SECTION 1.01. Annual Meeting. The annual meeting of the stockholders of
Rouge Steel Company (herein called the "Corporation") shall, unless the Board of
Directors (herein called the "Board") shall designate another time or place, be
held on the last Thursday in May in each year (or, if that day shall be a legal
holiday, then on the next preceding business day) at such hour as may be
specified in the notice thereof, in the City of Detroit, in the State of
Michigan, and at such place within said City as shall be fixed by the Board, for
the purpose of electing directors and for the transaction of such other business
as may properly be brought before such meeting. If any annual meeting shall not
be held on the day designated herein or the directors shall not have been
elected thereat, or at any adjournment thereof, the Board shall cause a special
meeting of the stockholders to be held as soon thereafter as practicable for the
election of directors. At such special meeting, the stockholders may elect
directors and transact other business with the same force and effect as at an
annual meeting of the stockholders duly called and held.
SECTION 1.02. Business to be Brought Before an Annual Meeting of
Stockholders. Any business properly brought before an annual meeting of the
stockholders of the Corporation may be transacted at such meeting. To be
properly brought before an annual meeting, business must be (i) specified in the
notice of the meeting (or any supplement thereto) given by or at the direction
of the Board, (ii) brought before the meeting by or at the direction of the
Board or (iii) otherwise properly brought before the meeting by a stockholder.
For business to be properly brought before an annual meeting by a stockholder,
the stockholder must have given such written notice of the proposed business,
either by personal delivery or by United States mail, postage prepaid, to the
Secretary of the Corporation, such that the Secretary shall receive such notice
not less than 60 nor more than 90 days prior to the anniversary date of the
immediately preceding annual meeting or not later than ten days after notice or
public disclosure of the date of the annual meeting shall be given or made to
stockholders, whichever date shall be earlier. Subject to Section 2.03 hereof,
any such notice shall set forth as to each item of business the stockholder
shall propose to bring before the annual meeting (i) a brief description of such
item of business and the reasons for conducting it at such meeting and, in the
event that such item of business shall include a proposal to amend or to
recommend the amendment of either the Restated Certificate of Incorporation of
the Corporation (which term as used herein shall include any amendments to the
Restated Certificate) or these By-laws, the text of the proposed amendment, (ii)
the name and address of the stockholder proposing such item of business, (iii) a
representation that the stockholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to propose such item of business and (iv) any material
interest of the stockholder in such item of
<PAGE> 2
business. Only business which shall have been properly brought before an
annual meeting of stockholders in accordance with these By-laws shall be
conducted at such meeting, and the Chairman of such meeting may refuse to
permit any business to be brought before such meeting which shall not have been
properly brought before it in accordance with these By-laws.
SECTION 1.03. Special Meeting. Except as otherwise required by law,
special meetings of the stockholders for any purpose or purposes may be called
only by (i) the Chairman, (ii) the Board or (iii) the holders of record of 20%
of shares of stock of the Corporation. Only such business as shall be specified
in the notice of any special meeting of the stockholders shall come before such
meeting.
SECTION 1.04. Place of Meetings. Any meeting of the stockholders for the
election of directors shall, unless the Board shall designate another place, be
held in the City of Detroit, in the State of Michigan, and at such place within
said City as shall be fixed by the Board. All other meetings of the
stockholders shall be held at such places, within or without the State of
Delaware, as may from time to time be designated by the Board or in the
respective notices or waivers of notice thereof.
SECTION 1.05. Notice of Meetings. Every stockholder shall furnish the
Secretary with an address at which notices of meetings and all other corporate
notices may be served on or mailed to him. Except as otherwise expressly
required by law, notice of each meeting of the stockholders, whether annual or
special, shall, not less than ten (10) nor more than sixty (60) days before the
date of the meeting, or such other period as may be required by law, be given to
each stockholder of record entitled to vote at such meeting by delivering a
typewritten or printed notice thereof to him personally or by depositing such
notice in the United States mail, in a postage prepaid envelope, directed to him
at his post-office address furnished by him to the Secretary for such purpose,
or, if he shall not have furnished to the Secretary his post-office address for
such purpose, but his address shall otherwise appear on the records of the
Corporation, then at his address as it shall so appear on the records of the
Corporation. If mailed, notice shall be deemed given when deposited in the
United States mail, postage prepaid. Except when expressly required by law, no
publication of any notice of a meeting of the stockholders shall be required.
Every notice of a meeting of the stockholders shall state the place, date and
hour of the meeting and, in the case of a special meeting, the purpose or
purposes for which the meeting shall be called. Notice of any adjourned meeting
of the stockholders need not be given if the time and place thereof shall be
announced at the meeting at which the adjournment shall be taken, unless such
adjournment shall be for more than 30 days or a new record date shall be fixed
for an adjourned meeting.
SECTION 1.06. Quorum. At each meeting of the stockholders, with the
exception of any meeting for the election of directors summarily ordered as
provided by the General Corporation Law of the State of Delaware, stockholders
holding of record a majority of voting interest of stock of the Corporation
entitled to be voted thereat shall be present in person or by proxy to
constitute a quorum for the transaction of business. In the absence of a quorum
at any such meeting or any adjournment or adjournments thereof, a majority in
voting interest of those present in person or by proxy and entitled to vote
thereat, or in the absence therefrom of all the stockholders, any officer
entitled to preside at, or to act as secretary of, such meeting may adjourn such
meeting from time to time. At any such adjourned meeting at which a quorum may
be present any business may be transacted which might have been transacted at
the meeting as originally called. The absence from any meeting of stockholders
holding the number of shares of stock of the Corporation required by the laws of
the State of Delaware or by the Restated Certificate of Incorporation of the
Corporation or by these By-laws for action upon any given matter shall not
prevent action at such meeting upon any other matter or matters which may
properly come before the meeting, if there shall be present thereat in person or
by proxy stockholders holding the number of shares of stock of the Corporation
required in respect of such other matter or matters.
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<PAGE> 3
SECTION 1.07. Organization. At each meeting of the stockholders the
Chairman, or, if he shall be absent therefrom, the President, or if he shall be
absent therefrom, a Vice Chairman, or, if there shall not be any Vice Chairman
in office or if all the Vice Chairman also shall be absent therefrom, a Vice
President or another officer of the Corporation chosen as chairman of such
meeting by a majority in voting interest of the stockholders present in person
or by proxy and entitled to vote thereat, or, if all the officers of the
Corporation shall be absent therefrom, a stockholder holding of record shares of
stock of the Corporation so chosen, shall act as chairman of the meeting and
preside thereat; and the Secretary, or, if he shall be absent from such meeting
or shall be required pursuant to the provisions of this Section 1.07 to act as
chairman of such meeting, the person (who shall be an Assistant Secretary, if an
Assistant Secretary shall be present thereat) whom the chairman of such meeting
shall appoint shall act as secretary of such meeting and keep the minutes
thereof.
SECTION 1.08. Order of Business. The order of business at each meeting of
the stockholders shall be determined by the chairman of such meeting.
SECTION 1.09. Voting. Except as otherwise provided by law or in the
Restated Certificate of Incorporation of the Corporation, each stockholder of
record of any class or series of stock having a preference over the Common Stock
of the Corporation as to dividends or upon liquidation shall be entitled at each
meeting of stockholders to such number of votes for each share of such stock as
may be fixed in the Restated Certificate of Incorporation or in the resolution
or resolutions adopted by the Board of Directors providing for the issuance of
such stock, and each stockholder of record of Common Stock shall be entitled to
one vote in person or by proxy for each share of stock of the Corporation held
by him and registered in his name on the books of the Corporation on the date
fixed pursuant to the provisions of Section 6.05 hereof as the record date for
the determination of stockholders of record of Common Stock who shall be
entitled to notice of and to vote at the meeting of stockholders. Any vote on
stock of the Corporation at any meeting of the stockholders by the stockholder
entitled thereto may be given in person or by his proxy appointed by an
instrument in writing subscribed by such stockholder or by his attorney
thereunto authorized and delivered to the Secretary of the Corporation or in the
case of a vote at a meeting to such Secretary or to the Secretary of the
meeting; provided, however, that no proxy shall be voted or acted upon after
three (3) years from its date, unless said proxy shall provide for a longer
period. At all meetings of the stockholders all matters, except as otherwise
provided herein or expressly regulated by law or by the Restated Certificate of
Incorporation of the Corporation, shall be decided by the affirmative vote of a
majority in voting interest of the stockholders present in person or by proxy
and entitled to vote thereat, a quorum being present. Except in the case of
votes for the election of directors, unless demanded by a stockholder of the
Corporation present in person or by proxy at any meeting of the stockholders and
entitled to vote thereat or so directed by the chairman of the meeting, the vote
thereat on any other question need not be by ballot. On a vote by ballot each
ballot shall be signed by the stockholder voting, or by his proxy, if there be
such proxy, and shall state the number of shares voted.
SECTION 1.10. List of Stockholders. It shall be the duty of the Secretary
or other officer of the Corporation who shall have charge of its stock ledger,
either directly or through another officer of the Corporation designated by him
or through a transfer agent appointed by the Board, to prepare and make, at
least ten (10) days before every meeting of the stockholders, a complete list of
the stockholders entitled to vote thereat, arranged in alphabetical order, and
showing the address of each stockholder and the number of shares registered in
the name of each stockholder. Such list shall be open to the examination of any
stockholder, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten (10) days prior to said meeting, either at a
place within the city where said meeting is to be held, which place shall be
specified in the notice of said meeting, or, if not so specified, at the place
where said meeting is to be held. The list shall also be produced and kept at
the time and place of said meeting during the whole time thereof, and may be
inspected by any stockholder who shall be present thereat. Upon the willful
neglect or refusal of the directors to produce such list at any meeting for the
election of directors, they shall be ineligible for election to any
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<PAGE> 4
office at such meeting. The stock ledger shall be the only evidence as to who
are the stockholders entitled to examine the stock ledger, such list or the
books of the Corporation, or to vote in person or by proxy at any meeting of
stockholders.
SECTION 1.2. Inspectors of Election. At each meeting of the stockholders
the chairman of such meeting may appoint one Inspector or more to act thereat.
The Inspector so appointed shall first subscribe an oath or affirmation
faithfully to execute the duties of an Inspector at such meeting with strict
impartiality and according to the best of his ability. Such Inspector, if any,
shall take charge of the proxy and ballots at such meeting and after the
balloting thereat on any question shall count the ballots cast thereon and shall
make a report in writing to the secretary of such meeting of the results
thereof. An Inspector need not be a stockholder of the Corporation, and any
officer of the Corporation may be an Inspector on any question.
ARTICLE II
BOARD OF DIRECTORS
SECTION 2.01. General Powers. The property, business and affairs of the
Corporation shall be managed by or under the direction of the Board.
SECTION 2.02. Number and Term of Office. Subject to the requirements of
the laws of the State of Delaware and of the Restated Certificate of
Incorporation of the Corporation and except as otherwise provided in any
resolution or resolutions adopted by the Board of Directors pursuant to the
provisions of the Restated Certificate of Incorporation of the Corporation
relating to the rights of the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation, the number
of directors shall be not less than six and not more than nine. Each of the
directors of the Corporation shall hold office until his successor shall be
elected and shall qualify, or until his death or until he shall resign or shall
have been removed in the manner hereinafter provided.
SECTION 2.03. Nominations for the Election of Directors. Subject to the
rights of the holders of any class or series of stock having a preference over
the Common Stock as to dividends or upon liquidation and otherwise subject to
the rights of stockholders under the General Corporation Law of the State of
Delaware, nominations for the election of directors shall be made by the Board
or by any stockholder entitled to vote for the election of directors at a
meeting but only if such stockholder complies with the requirements set forth in
the following two sentences. Written notice of the nomination by such
stockholder shall be given, either by personal delivery or by United States
mail, postage prepaid, to the Secretary of the Corporation not later than (i)
with respect to an election to be held at an annual meeting of stockholders, on
the date designated in Section 1.01 hereof, 90 days in advance of such meeting
and (ii) with respect to an election to be held at a special meeting of
stockholders for the election of directors, the close of business on the tenth
day following the date on which notice of such meeting shall first be given to
stockholders. Each such notice shall set forth: (a) the name and address of the
stockholder who shall make such recommendation and of the person or persons to
be nominated; (b) a representation that the stockholder is a holder of record of
stock of the Corporation entitled to vote at such meeting; (c) a description of
all arrangements or understandings between the stockholder and each nominee and
any other person or persons (naming such person or persons) pursuant to which
the nomination or nominations are recommended by the stockholder; (d) such other
information regarding each recommended person proposed by such stockholder as
would have been required to be included in a proxy statement filed pursuant to
the proxy rules of the Securities and Exchange Commission had each such person
been nominated, or intended to be nominated, by the Board of Directors; and (e)
the consent in writing of each
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such person to serve as a director of the Corporation if so elected. The
chairman of the meeting may refuse to acknowledge the nomination of any person
not nominated in compliance with the foregoing procedure.
SECTION 2.04. Election of Directors. At each meeting of the stockholders
entitled to vote for the election of directors at which a quorum shall be
present, directors shall be elected by a plurality of the votes of the shares
present in person or represented by proxy at such meeting and entitled to vote
on the election of directors. Such election shall be by ballot in accordance
with the provisions of Section 1.09 hereof.
SECTION 2.05. Organization. At each meeting of the Board, the Chairman
or, if he shall be absent therefrom, the President, or if he shall be absent
therefrom, a Vice Chairman or, if there shall not be any Vice Chairman in office
or if all the Vice Chairmen also shall be absent therefrom, a director chosen by
a majority of the directors present thereat shall act as chairman of such
meeting and preside thereat. The Secretary, or in case of his absence the
person whom the chairman of such meeting shall appoint, shall act as secretary
of such meeting and keep the minutes thereof.
SECTION 2.06. Resignations. Any director may resign at any time by giving
written notice of his resignation to the Corporation. Any such resignation
shall take effect at the time specified therein,or, if the time when it shall
become effective shall not be specified therein, then it shall take effect
immediately upon its receipt by the Chairman, the President, any of the Vice
Chairmen, or the Secretary; and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
SECTION 2.07. Vacancies, etc. Subject to the rights of the holders of any
class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation, in case of any increase in the number of
directors, the additional director or directors, and, in case of any vacancy in
the Board due to death, resignation, disqualification, removal or any other
cause, the successor to fill the vacancy shall be elected by a majority of the
directors then in office, though less than a quorum, or by a sole remaining
director. When one or more directors shall resign from the Board, effective at
a future date, a majority of the directors then in office, including those who
shall have so resigned, shall have the power to fill such vacancy or vacancies,
the vote thereon to take effect when such resignation or resignations shall
become effective.
SECTION 2.08. Place of Meeting, etc. The Board may hold its meeting at
such place or places within or without the State of Delaware as the Board may
from time to time by resolution determine or shall be designated in the
respective notices or waivers of notice thereof.
SECTION 2.09. First Meeting. As soon as practicable after each annual
election of directors, the Board shall meet for the purpose of organization and
the transaction of other business.
SECTION 2.10. Regular Meetings. Regular meetings of the Board shall be
held at such times as the Board shall from time to time by resolution determine
or the Chairman shall from time to time acting individually determine. If any
day fixed for a regular meeting shall be a legal holiday at the place where the
meeting is to be held, then the meeting which would otherwise be held on that
day shall be held at the same hour on the next succeeding business day. Except
as otherwise provided by law, notices of regular meetings need not be given.
SECTION 2.11. Special Meetings; Notice. Special meetings of the Board
shall be held whenever called by the Chairman or a majority of the directors at
the time in office. A notice shall be given as hereinafter in this Section 2.11
provided of each such special meeting, in which shall be stated the time and
place of such meeting, but, except as otherwise expressly provided by law or by
these By-laws, the purposes thereof need not be stated in such notice. Except as
otherwise provided by law, notice of each such meeting
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shall be mailed to each director, addressed to him at his residence or usual
place of business, at least two (2) days before the day on which such meeting is
to be held, or shall be sent addressed to him at such place by telegraph, cable,
wireless, telex, telefax or other form of recorded communication or be delivered
personally or by telephone not later than the day before the day on which such
meeting is to be held. Notice of any meeting of the Board need not, however, be
given to any director who shall attend such meeting except a director who shall
attend such meeting for the express purpose of objecting, at the beginning of
the meeting, to the transaction of any business on the grounds that the meeting
shall not have been lawfully called or convened; and, if any director shall, in
writing or by telegraph, cable, wireless, telex, telefax or other form of
recorded communication, waive notice of any meeting of the Board, notice thereof
need not be given to him.
SECTION 2.12. Quorum and Manner of Acting. Subject to the provisions of
Section 2.07 hereof, a majority of the whole Board shall be present in person at
any meeting of the Board (participation in a meeting by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other to constitute presence in
person at such meeting) in order to constitute a quorum for the transaction of
business at such meeting and, except as specified in Sections 2.07 and 3.08,
hereof, and except also as otherwise expressly provided by law or as set forth
in the Restated Certificate of Incorporation, the vote of a majority of the
directors present at any such meeting at which a quorum is present shall be the
act of the Board. In the absence of a quorum from any such meeting, a majority
of the directors present thereat may adjourn such meeting from time to time
until a quorum shall be present thereat. Notice of any adjourned meeting need
not be given. The directors shall act only as a board and the individual
directors shall have no power as such. Anything in these By-laws to the
contrary notwithstanding, any action required or permitted to be taken at any
meeting of the Board may be taken without a meeting if all members of the Board
consent thereto in writing and the writing or writings are filed with the
minutes of proceedings of the Board.
SECTION 2.13. Compensation. Unless otherwise expressly provided by
resolution adopted by the Board, neither any of the directors nor any of the
members of any committee of the Corporation contemplated by these By-laws or
otherwise provided for by resolution of the Board shall, as such, receive any
stated compensation for his services; but the Board may at any time or from time
to time by resolution provide that a specified sum shall be paid to any director
of the Corporation or to any member of any such committee who shall not
otherwise be in the employ of the Corporation or of any of its subsidiary
companies, either as his annual compensation as such director or member or as
compensation for his attendance at meetings of the Board or of such committee.
The Board may also likewise provide that the Corporation shall reimburse each
such director or member of such committee for any expenses paid by him on
account of his attendance at any such meeting. Nothing in this Section 2.14
contained shall be construed to preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor.
SECTION 2.14. Removal of Directors. A Director may be removed with cause,
at any time, by the affirmative vote of stockholders of record of the
Corporation holding of record a majority of the shares then entitled to vote at
an election of Directors. In the case of the removal of a Director for cause,
"Cause" is hereby defined as the willful and continuous failure substantially to
perform one's duties to the Corporation or the willful engaging in gross
misconduct materially and demonstrably injurious to the Corporation.
SECTION 2.15. Qualification of Directors. It shall be a qualification for
membership on the Board of Directors that a director not be a member of the
board of directors or an officer or employee of a competitor (or any affiliate
of such competitor) of the Corporation or of a 5% or more stockholder (or
affiliate of such 5% or more stockholder) of a competitor of the Corporation;
provided, however, that this Section shall not apply to Worthington Industries,
Incorporated and its affiliates.
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SECTION 2.16. Joint Meetings. Notwithstanding any provision of these
By-laws to the contrary, so long as the Corporation owns, directly or
indirectly, all of the outstanding voting capital stock of Subsidiary (as
defined below), and so long as each member of the Board of Directors of the
Corporation is also a member of the Board of Directors of Subsidiary, each
meeting of the Board of Directors of the Corporation shall constitute a Joint
Meeting (as defined below) unless otherwise specified in the notice given with
respect to such meeting in accordance with these By-laws. As used in this
Section 2.16, (a) "Subsidiary" shall mean Rouge Steel Company, a Delaware
corporation, and any entity into which Rouge Steel Company or any successor may
be merged or with which it may be consolidated or any entity resulting from any
merger or consolidation to which Rouge Steel Company or any successor shall be a
party and (b) a "Joint Meeting" shall mean a joint meeting of the respective
Boards of Directors of Subsidiary and the Corporation.
ARTICLE III
COMMITTEES
SECTION 3.01. Executive Committee; How Constituted and Powers. The Board
may designate not less than three (3) of the directors then in office, who shall
include the Chairman, to constitute an Executive Committee (herein called the
"Executive Committee") which during the intervals between meetings of the Board
of Directors shall have and may exercise all the powers of the Board to the full
extent permitted by law and as provided in said resolution or in another
resolution or other resolutions so adopted by the Board; and it shall have power
to authorize the seal of the Corporation to be affixed to all papers which may
require it.
SECTION 3.02. Organization, etc. The Chairman or, if he shall be absent
therefrom, the President shall act as chairman at all meetings of the Executive
Committee and the Secretary shall act as secretary thereof. In case of the
absence from any meeting of the Committee of the Chairman, the President, or the
Secretary, the Committee may appoint a chairman or secretary, as the case may
be, of the meeting.
SECTION 3.03. Meetings. Regular meetings of the Executive Committee, of
which notice shall not be necessary, shall be held on such days and at such
places, within or without the State of Michigan, as shall be fixed by resolution
adopted by a majority of the Committee and communicated to all its members.
Special meetings of the Committee shall be held whenever called by the Chairman
or a majority of the members of such Committee then in office. Notice of each
special meeting of the Committee shall be given by mail, telegraph, cable,
wireless, telex, telefax or other form of recorded communication or be delivered
personally or by telephone to each member of the Committee not later than the
day before the day on which such meeting is to be held. Notice of any such
meeting need not, however, be given to any member of the Committee who shall
attend such meeting except a member of the Committee who shall attend such
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business on the grounds that the meeting shall not
have been lawfully called or convened; and, if any member of the Committee
shall, in writing or by telegraph, cable, wireless, telex, telefax or other form
of recorded communication, waive notice of any meeting of the Committee, notice
thereof need not be given to him. Subject to provisions of this Article III,
the Committee, by resolution adopted by a majority of the whole Committee, shall
fix its own rules of procedure, and it shall keep a record of its proceedings
and report them to the Board at the next regular meeting thereof after such
proceedings shall have been taken.
SECTION 3.04. Quorum and Manner of Acting. A majority of the Executive
Committee shall be present in person at any meeting of the Executive Committee
(participation in a meeting by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meting can hear each other to constitute presence in person at such meeting) in
order to constitute a quorum
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for the transaction of business, and the act of a majority of those present at a
meeting thereof at which a quorum shall be present shall be the act of the
Committee.
SECTION 3.05. Resignations; Removal; Vacancies. Any member of the
Executive Committee may resign therefrom at any time by giving written notice of
his resignation to the Corporation. Any such resignation shall take effect at
the time specified therein, or, if the time when it shall become effective shall
not be specified therein, then it shall take effect immediately upon its receipt
by the Corporation; and, unless otherwise specified therein, the acceptance of
such resignation shall not be necessary to make it effective. The Board may
remove any member of the Executive Committee. Any vacancy in the Executive
Committee shall be filled by the vote of the Board.
SECTION 3.06. Other Committees. The Board may constitute a Finance
Committee, which shall consist of not less than three (3) directors, one of whom
shall be designated by the Board to act as chairman of such Committee. Subject
to any limitations prescribed by the Board, the Finance Committee shall have
authority to advise with the Board, the Executive Committee and the officers and
employees of the Corporation with respect to all activities, plans and policies
affecting the financial affairs of the Corporation.
The Board shall constitute an Audit Committee, a Compensation Committee, a
Nominating Committee and such other committees as it may determine, which shall
in each case consist of such directors and shall have and may exercise such
powers as the Board may by resolution determine and specify in the respective
resolutions appointing them; provided, however, that if any committee shall have
the power to determine the amounts of the respective fixed salaries of the
Executives of the Corporation or any of them, such committee shall consist of
not less than three (3) members and none of its members shall have any vote in
the determination of the amount that shall be paid to him as a fixed salary.
SECTION 3.07. Procedures. A majority of all the members of any Committee
organized pursuant to Section 3.06 hereof may fix its rules of procedure,
determine its action and fix the time and place whether within or without the
State of Michigan, of its meetings (participation in a meeting by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other to constitute presence
in person at such meeting) and specify what notice thereof, if any, shall be
given, unless the Board shall otherwise by resolution provide. The Board shall
have power to change the members of any committee referred to in this Section
3.07 at any time, to fill vacancies therein and to discharge any such committee,
either with or without cause, at any time.
SECTION 3.08. Action by Consent in Writing. Anything in these By-laws to
the contrary notwithstanding, any action required or permitted to be taken at
any meeting of any committee referred to in this Article III may be taken
without a meeting if all members of the committee shall consent thereto in
writing and the writing or writings shall be filed with the minutes of
proceedings of the committee.
ARTICLE IV
OFFICERS
SECTION 4.01. Number. The Corporation may have the following officers as
determined by the Board: a Chairman, a President, one or more Vice Chairmen,
one or more Vice Presidents (one or more of whom may be designated an Executive
Vice President, a Group Executive Vice President or a Senior Vice President) one
or more Assistant Vice Presidents, a Controller, one or more Assistant
Controllers, a General Counsel, a Treasurer, one or more Assistant Treasurers, a
Secretary and one or more Assistant Secretaries.
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SECTION 4.02. Election and Term of Office. The officers determined as in
Section 4.01 hereof, shall be chosen annually by the Board. Each such officer
shall hold office until his successor shall have been elected and shall qualify
or until his earlier death or his earlier resignation or removal in the manner
hereinafter provided.
SECTION 4.03. Agents, etc. In addition to the officers determined as in
Section 4.01 hereof, the Board may appoint such agents as the Board may deem
necessary or advisable, each of which agents shall have such authority and
perform such duties as are provided in these By-laws or as the Board may from
time to time determine. The Board may delegate to any officer or to any
committee the power to appoint or remove any such agents.
SECTION 4.04. Removal. Any officer may be removed, either with or without
cause, at any time, by the Board.
SECTION 4.05. Resignations. Any officer may resign at any time by giving
written notice of his resignation to the Corporation. Any such resignation
shall take effect at the time specified therein, or, if the time when it shall
become effective shall not be specified therein, then it shall take effect
immediately upon its receipt by the Corporation; and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
SECTION 4.06. Vacancies. A vacancy in any office due to death,
resignation, removal, disqualification or any other cause may be filled for the
unexpired portion of the term in the manner prescribed in these By-laws for
regular appointments or elections to such office.
SECTION 4.07. Chief Executive Officer. The Chief Executive Officer shall
be designated from time to time by the Board and shall, unless otherwise
determined by the Board, be either the Chairman or the President. He shall
have, subject to the direction and control of the Board, general and active
supervision over the business and affairs of the Corporation and over its
several officers. He shall perform all duties incident to his position and such
other duties as from time to time may be assigned to him by the Board. He shall
see that all orders and resolutions of the Board shall be carried into effect.
He may sign, execute and deliver in the name of the Corporation all deeds,
mortgages, bonds, contracts or other instruments authorized by the Board, except
in cases where the signing, execution or delivery thereof shall be expressly
delegated by the Board or by a duly authorized committee of the Board or by
these By-laws to some other officer or agent of the Corporation or where any of
them shall be required by law otherwise to be signed, executed or delivered, and
he may cause the seal of the Corporation to be affixed to any documents the
execution of which on behalf of the Corporation shall have been duly authorized.
SECTION 4.08. Chairman. The Chairman shall perform such duties as from
time to time may be assigned to him by the Board. He shall, if present, preside
at all meetings of the stockholders and at all meetings of the Board. He shall
make a report of the state of the business of the Corporation at each annual
meeting of the stockholders and from time to time he shall report to the
stockholders and to the Board all matters within his knowledge which in his
judgment the interests of the Corporation may require to be brought to their
notice.
SECTION 4.09. President. The President shall perform such duties as from
time to time may be assigned to him by the Board. At the request of the
Chairman or in the case of his absence or inability to act, the President shall
perform the duties of the Chairman and, when so acting, shall have the powers
of, and shall be subject to all restrictions upon, the Chairman.
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SECTION 4.10. Vice Chairman. Each of the Vice Chairmen shall have such
powers and perform such duties as the Chief Executive Officer or the Board may
from time to time assign to him and shall perform such other duties as may be
prescribed by these By-laws. At the request of the Chairman or the President,
or in case of their absence or inability to act, any Vice Chairman shall perform
the duties of the Chairman or the President and, when so acting, shall have the
powers of, and be subject to all the restrictions upon, the Chairman and the
President.
SECTION 4.11. Executive Office. The Chairman, the President and such
other officers as shall from time to time be designated by the Chief Executive
Officer, shall constitute the Executive Office of the Corporation. Each officer
in the Executive Office shall consult with the Chief Executive Officer as to
matters relating to the business and affairs of the Corporation, and each shall
have such powers and perform such duties as the Chief Executive Officer or the
Board may from time to time assign to him and each shall perform such other
duties as may be prescribed for him by these By-laws.
SECTION 4.12. Vice Presidents. Each of the Vice Presidents (including
each of the Executive Vice Presidents, Group Executive Vice Presidents and
Senior Vice Presidents) shall have such powers and perform such duties as the
officer in the Executive Office to whom he shall report, the Chief Executive
Officer or the Board may from time to time assign to him and shall perform such
other duties as may be prescribed by these By-laws. At the request of any
officer in the Executive Officer, or, in case of their absence or inability to
act, any Vice President (including any Executive Vice President, Group Executive
Vice President and any Senior Vice President) who shall report to an officer in
the Executive Office shall perform the duties of that officer and, when so
acting, shall have all the powers of, and be subject to all the restrictions
upon, that officer.
SECTION 4.13. Assistant Vice Presidents. At the request of any Vice
President, or in case of his absence or inability to act, the Assistant Vice
President, if there shall be one, or if there shall be more than one, any of the
Assistant Vice Presidents shall perform the duties of the Vice President to whom
he shall report, and, when so acting, shall have all the powers of, and be
subject to all the restrictions upon, that Vice President. Each of the
Assistant Vice Presidents shall perform such other duties as from time to time
may be assigned to him by the Vice President to whom he shall report, the
officer in the Executive Office to whom such Vice President shall report, the
President, the Chairman or the Board.
SECTION 4.14. Controller. The Controller shall keep or cause to be kept
correct records of the business and transactions of the Corporation and shall,
upon request, at all reasonable times exhibit or cause to be exhibited such
records to any of the directors of the Corporation at the place where such
records shall be kept. He shall perform such other duties as from time to time
may be assigned to him by the officer to whom he shall report, any officer in
the Executive Office, the Chief Executive Officer or the Board.
SECTION 4.15. Assistant Controllers. At the request of the Controller, or
in case of his absence or inability to act, the Assistant Controller, or, if
there be more than one, any of the Assistant Controllers, shall perform the
duties of the Controller, and, when so acting, shall have all the powers of, and
be subject to all the restrictions upon, the Controller. Each of the Assistant
Controllers shall perform such other duties as from time to time may be assigned
to him by the Controller, the officer to whom the Controller shall report, any
officer in the Executive office, the Chief Executive Officer or the Board.
SECTION 4.16. General Counsel. The General Counsel shall be the chief
legal officer of the Corporation and shall have, subject to the control of the
Chief Executive Officer, the officer to whom he shall report, and the Board,
general and active supervision and direction over the legal affairs of the
Corporation. He shall have such other powers and perform such other duties as
the Chief Executive Officer, the officer to
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whom he shall report, or the Board may from time to time prescribe and shall
perform such other duties as may be prescribed by these By-laws.
SECTION 4.17. Treasurer. If required by the Board, the Treasurer shall
give a bond for the faithful discharge of his duties in such sum and with such
surety or sureties as the Board shall determine. He shall:
a. have charge and custody of, and be responsible for, all funds,
securities, notes and valuable effects of the Corporation; receive and give
receipt for moneys due and payable to the Corporation from any sources
whatsoever; deposit all such moneys to the credit of the Corporation or
otherwise as any Chairman, the President, the officer to whom he shall
report, or the Board shall direct in such banks, trust companies or other
depositaries as shall be selected in accordance with the provisions of
Section 5.07 hereof; cause such funds to be disbursed by checks or drafts
on the authorized depositaries of the Corporation signed as provided in
Section 5.05 hereof; and be responsible for the accuracy of the amounts of,
and cause to be preserved proper vouchers for, all moneys so disbursed;
b. have the right to require from time to time reports or statements
giving such information as he may desire with respect to any and all
financial transactions of the Corporation from the officers or agents
transacting the same;
c. render to the Chairman, the President, the officer to whom he shall
report, or the Board, whenever they, respectively, shall request him so to
do, an account of the financial condition of the Corporation and of all his
transactions as Treasurer;
d. upon request, exhibit or cause to be exhibited at all reasonable
times, at the place where they shall be kept, his cash books and other
records to the Controller, the Chairman, the President, the officer to whom
he shall report, or the Board; and
e. in general, perform all duties incident to the office of Treasurer
and such other duties as from time to time may be assigned to him by the
Chairman, the President, the officer to whom he shall report, or the Board.
SECTION 4.18. Assistant Treasurers. If required by the Board, each of the
Assistant Treasurers shall give a bond for the faithful discharge of his duties
in such sums and with such surety or sureties as the Board shall determine. At
the request of the Treasurer, or in case of his absence or inability to act, the
Assistant Treasurer, or, if there be more than one, any of the Assistant
Treasurers, shall perform the duties of the Treasurer, and, when so acting,
shall have all the powers of, and be subject to all the restrictions upon, the
Treasurer. Each of the Assistant Treasurers shall perform such other duties as
from time to time may be assigned to him by the Treasurer, the Chairman, the
President or the Board.
SECTION 4.19. Secretary. The Secretary shall:
a. record all the proceedings of the meetings of the stockholders, the
Board, the Executive Committee and the Finance Committee in one or more
books kept for that purpose;
b. see that all notices shall be duly given in accordance with the
provisions of these By-laws or as required by law;
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c. be custodian of the seal of the Corporation, and shall see that
such seal, or, if authorized by the Board, a facsimile thereof, shall be affixed
to any documents the execution of which on behalf of the Corporation shall be
duly authorized and may attest such seal when so affixed;
d. have charge, directly or through the transfer agent or transfer
agents and registrar or registrars appointed as in Section 6.03 hereof provided,
of the issue, transfer and registration of certificates for stock of the
Corporation and of the records thereof, such records to be kept in such manner
as to show the information specified in Section 6.01 hereof;
e. upon request, exhibit or cause to be exhibited at all reasonable
times to the Board, at the place where they shall be kept, such records of the
issue, transfer and registration of the certificates for stock of the
Corporation;
f. sign with a Vice President, a Vice Chairman, the Chairman or the
President certificates for stock of the Corporation;
g. see that the books, reports, statements, certificates and all other
documents and records required by law shall be properly kept and filed;
h. see that the duties prescribed by Section 1.09 hereof shall be
performed; and
i. in general, perform all duties incident to the office of Secretary
and such other duties as from time to time may be assigned to him by the
Chairman, the President, the officer to whom he shall report, or the Board.
SECTION 4.20. Assistant Secretaries. At the request of the Secretary, or
in case of his absence or inability to act, the Assistant Secretary, or, if
there shall be more than one, any of the Assistant Secretaries, shall perform
the duties of the Secretary and, when so acting , shall have all the powers of,
and be subject to all the restrictions upon, the Secretary. Each of the
Assistant Secretaries shall perform such other duties as from time to time may
be assigned to him by the Secretary, the Chairman, the President or the Board.
SECTION 4.21. Salaries. The salaries and other forms of compensation
(other than those the fixing of which shall have been specifically delegated to
a committee of the Board) of the officers of the Corporation shall be fixed from
time to time by the Board or by any one or more committees (none of which shall
consist of less than three (3) members) appointed by the Board with power to fix
such salaries or such compensation, and none of such officers shall be prevented
from receiving a salary by reason of the fact that he shall be also a member of
the Board or of any such committee; but none of such officers who shall also be
a member of the Board or of any such committee shall have any vote in the
determination of the amount of salary that shall be paid to him.
ARTICLE V
CONTRACTS, CHECKS, DRAFTS, BANK ACCOUNTS, ETC.
SECTION 5.01. Execution of Contracts, etc. Except as otherwise required
by law or by these By- laws, any contract or other instruments may be executed
and delivered in the name of the Corporation and on its behalf by the Chairman,
the President, a Vice Chairman, a Vice President, the Treasurer or the
Secretary,
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and the Board, by resolution, or the Chairman, the President, a Vice Chairman, a
Vice President, the Treasurer or the Secretary, by an instrument in writing
filed with the Secretary, may authorize any other officer or officers or agent
or agents to execute and deliver any contract or other instrument in the name of
the Corporation and on its behalf, and such authority may be general or confined
to specific instances.
SECTION 5.02. Loans. Unless the Board shall otherwise determine, any two
(2) of the following officers, to wit: the Chairman, the President, a Vice
Chairman, a Vice President, the Treasurer and the Secretary, acting together, or
any officer or officers authorized by a resolution of the Board may effect loans
and advances at any time for the Corporation from any bank, trust company or
other institution or from any firm or individual and for such loans and advances
may make, execute and deliver promissory notes or other evidences of
indebtedness of the Corporation, but no officer or officers shall mortgage,
pledge, hypothecate or otherwise transfer for security any property whatsoever
owned or held by the Corporation except when authorized by resolution adopted by
the Board.
SECTION 5.03. Checks, Drafts, etc. All checks, drafts, orders for the
payment of money, bills of lading, warehouse receipts, obligations, bills of
exchange and insurance certificates shall be signed or endorsed (except
endorsements for collection for the account of the Corporation or for deposit to
its credit) by such officer or officers or agent or agents of the Corporation
and in such manner as shall from time to time be determined by resolution of the
Board.
SECTION 5.04. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the Corporation
or otherwise as the Board, the Chairman, the President, [any Vice Chairman,] or
the Treasurer shall direct in such banks, trust companies or other depositaries
as the Board may select or as may be selected by any officer or officers or
agent or agents of the Corporation to whom power in that respect shall have been
delegated by the Board. For the purpose of deposit and for the purpose of
collection for the account of the Corporation, checks, drafts and other orders
for the payment of money which shall be payable to the order of the Corporation
may be endorsed, assigned and delivered by any officer or agent of the
Corporation.
SECTION 5.05. General and Special Bank Accounts. The Board may from time
to time authorize the opening and keeping of general and special bank accounts
with such banks, trust companies or other depositaries as the Board may select,
or as may be selected by any officer or officers or agent or agents of the
Corporation to whom power in that respect shall have been delegated by the
Board. The Board may make such special rules and regulations with respect to
such bank accounts, not inconsistent with the provisions of these By-laws, as it
may deem expedient.
SECTION 5.06. Proxies in Respect of Stock or Other Securities of Other
Corporations. Unless otherwise provided by resolution adopted by the Board, the
Chairman, the President, a Vice Chairman, a Vice President or the Secretary may
from time to time appoint an attorney or attorneys or an agent or agents of the
Corporation to exercise in the name and on behalf of the Corporation the powers
and rights which the Corporation may have as the holder of stock or other
securities in any other corporation to vote or consent in respect of such stock
or other securities, and the Chairman, the President, a Vice Chairman, a Vice
President or the Secretary may instruct the person or persons so appointed as to
the manner of exercising such powers and rights; and the Chairman, the
President, a Vice Chairman, a Vice President or the Secretary may execute or
cause to be executed in the name and on behalf of the Corporation and under its
corporate seal, or otherwise, all such written proxies or other instruments as
he may deem necessary or proper in order that the Corporation may exercise its
said powers and rights.
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ARTICLE VI
SHARES AND THEIR TRANSFER
SECTION 6.01. Certificates for Stock. Every owner of stock of the
Corporation of any class (or, if stock of any class shall be issuable in series,
any series of such class) shall be entitled to have a certificate registered in
his name in such form as the Board shall prescribe, certifying the number of
shares of stock of the Corporation of such class, or such class and series,
owned by him. The certificates representing shares of stock of each class (or,
if there shall be more than one series of any class, each series of such class)
shall be numbered in the order in which they shall be issued and shall be signed
in the name of the Corporation by the Chairman or the President [or a Vice
Chairman] or a Vice President and by the Secretary or an Assistant Secretary.
Any of or all the signatures on any such certificate may be facsimiles. In case
any officer or officers or transfer agent or registrar of the Corporation who
shall have signed, or whose facsimile signature or signatures shall have been
placed upon, any such certificate shall cease to be such officer or officers or
transfer agent or registrar before such certificate shall have been issued, such
certificate may be issued by the Corporation with the same effect as though the
person or persons who shall have signed such certificate, or whose facsimile
signature or signatures shall have been placed thereupon, were such officer or
officers or transfer agent or registrar at the date of issue. Records shall be
kept of the amount of the stock of the Corporation issued and outstanding, the
manner in which and the time when such stock was paid for, the respective names,
alphabetically arranged, and the addresses, of the persons, firms or
corporations owning of record the stock represented by certificates for stock of
the Corporation, the number, class and series of shares represented by such
certificates, respectively, the time when each became an owner of record
thereof, and the respective dates of such certificates, and in case of
cancellation, the respective dates of cancellation. Every certificate
surrendered to the Corporation for exchange or transfer shall be canceled and a
new certificate or certificates shall not be issued in exchange for any existing
certificate until such existing certificate shall have been so canceled except
in cases provided for in Section 6.04 hereof.
SECTION 6.02. Transfers of Stock. Transfers of shares of stock of the
Corporation shall be made only on the books of the Corporation by the registered
owner thereof, or by his attorney thereunto authorized by power of attorney duly
executed and filed with the Secretary, or with a transfer agent appointed as
provided in Section 6.03, and upon surrender of the certificate or certificates
for such shares properly endorsed and payment of all taxes thereon. The person
in whose names shares of stock shall be registered on the books of the
Corporation shall be deemed the owner thereof for all purposes as regards the
Corporation. Whenever any transfer of shares shall be made for collateral
security and not absolutely, such fact shall be so expressed in the entry of
transfer if, when the certificate or certificates shall be presented to the
Corporation for transfer, both the transferor and the transferee shall in
writing request the Corporation to do so.
SECTION 6.03. Regulations. The Board may make such rules and regulations
as it may deem expedient, not inconsistent with these By-laws, concerning the
issue, transfer and registration of certificates for stock of the Corporation.
The Board may appoint, or authorize any officer or officers to appoint, one or
more transfer agents and one or more registrars, and may require all
certificates for stock to bear the signature or signatures of any of them.
SECTION 6.04. Lost, Stolen, Destroyed and Mutilated Certificates. The
registered owner of any stock of the Corporation shall immediately notify the
Corporation of any loss, theft, destruction or mutilation of the certificate
therefor, and the Corporation may issue a new certificate for stock in the place
of any certificate theretofore issued by it and alleged to have been lost,
stolen or destroyed, and the Corporation may, in its discretion, require the
registered owner of the lost, stolen or destroyed certificate or his legal
representatives to give the Corporation a bond in such sum, limited or
unlimited, and in such form and with
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such surety or sureties, as the Corporation shall in its uncontrolled
discretion determine, to indemnify the Corporation against any claim that may
be made against it on account of the alleged loss, theft or destruction of any
such certificate, or the issuance of such new certificate. The Corporation
may, however, in its discretion refuse to issue any such new certificate except
pursuant to legal proceedings under the laws of the State of Delaware in such
case made and provided.
SECTION 6.05. Fixing Date for Determination of Stockholders of Record in
Certain Case.
a. In order that the Corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, the Board may fix a record date, which record date shall
not precede the date upon which the resolution fixing the record date shall be
adopted by the Board, and which record date shall not be more than sixty (60)
nor less than ten (10) days before the date of such meeting. If no record date
shall be fixed by the Board the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice shall be
given, or, if notice shall be waived at the close of business on the day next
preceding the day on which the meeting is held. A determination of stockholders
of record entitled to notice of or to vote at a meeting of stockholders shall
apply to any adjournment of the meeting; provided, however, that the Board may
fix a new record date for the adjourned meeting.
b. In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date shall be
adopted, and which record date shall be not more than sixty (60) days prior to
such action. If no record date shall be fixed, the record date for determining
stockholders for any such purpose shall be at the close of business on the day
on which the Board shall adopt the resolution relating thereto.
ARTICLE VII
OFFICES, ETC.
SECTION 7.01. Registered Office. The registered office of the Corporation
in the State of Delaware shall be in the City of Wilmington, County of New
Castle, and the registered agent of the Corporation in said State is The
Corporation Trust Company.
SECTION 7.02. Other Offices. The Corporation may also have one or more
offices other than said registered office at such place or places, either within
or without the State of Delaware, as the Board may from time to time appoint or
as the business of the Corporation may require and may keep the books and
records of the Corporation in such place or places within or without said State
as the Board may from time to time by resolution determine.
ARTICLE VIII
DIVIDENDS, SURPLUS, ETC.
SECTION 8.01. Dividends, Surplus, Etc. Subject to the provisions of law,
of the Restated Certificate of Incorporation of the Corporation and of these
By-laws, the Board may declare and pay dividends upon the
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shares of the stock of the Corporation either (a) out of its surplus as
defined in and computed in accordance with the provisions of the laws of the
State of Delaware or (b) in case it shall not have any such surplus, out of
its net profits for the fiscal year in which the dividend shall be declared
and/or the preceding fiscal year, whenever and in such amounts as, in the
opinion of the board, the condition of the affairs of the Corporation shall
render it advisable. The Board in its discretion may use and apply any of
such surplus in purchasing or acquiring any of the shares of the stock of the
Corporation in accordance with law or from time to time may set aside from
such surplus or such net profits such sum or sums as it, in its absolute
discretion, may think proper, as a reserve fund to meet contingencies, or for
equalizing dividends, or for the purpose of maintaining or increasing the
property or business of the Corporation, or for any other purpose it may think
conducive to the best interests of the Corporation; provided, however, that
the Corporation shall not use its funds or property for the purchase of shares
of its stock when the capital of the Corporation shall be impaired or when
such use would cause any impairment of its capital. All such surplus or such
net profits, until actually declared in dividends, or used and applied as
aforesaid, shall be deemed to have been so set aside by the Board for one or
more of said purposes.
ARTICLE IX
INDEMNIFICATION OF DIRECTORS, OFFICERS
EMPLOYEES AND AGENTS
SECTION 9.01. Third Party Action.
a. The Corporation, to the full extent permitted, and in the manner
required, by the laws of the State of Delaware as in effect at the time of the
adoption of this Article IX or as such laws may be amended from time to time,
shall indemnify any person who shall have been or shall be made a party to or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding (including any appeal thereof), whether civil, criminal,
administrative or investigative (other than an action by or in the right of the
Corporation), by reason of the fact that such person shall have been or shall be
a director or officer of the Corporation, or, if at a time when he shall have
been or shall be a director or officer of the Corporation, shall have been or
shall be serving at the request of the Corporation as a director, officer,
partner, trustee, fiduciary, employee or agent (a "Subsidiary Officer") of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise (an "Affiliated Entity"), against expenses (including
attorneys' fees), costs, judgments, fines, penalties and amounts paid in
settlement actually and reasonably incurred by such person in connection with
such action, suit or proceeding if such person shall have acted in good faith
and in a manner such person shall have reasonably believed to be in or not
opposed to the best interest of the Corporation, and, with respect to any
criminal action or proceeding, shall have had no reasonable cause to believe his
or her conduct was unlawful; provided, however, that the Corporation shall not
be obligated to indemnify against any amount paid in settlement unless the
Corporation shall have consented to such settlement, which consent shall not be
unreasonably withheld. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere or its
equivalent shall not, of itself, create a presumption that the person shall not
have acted in good faith and in a manner which such person shall have reasonably
believed to be in or not opposed to the best interests of the Corporation, and,
with respect to any criminal action or proceeding, that such person shall have
had reasonable cause to believe that his conduct was unlawful. Notwithstanding
anything to the contrary in the foregoing provisions of this paragraph (a), a
person shall not be entitled, as a matter of right, to indemnification pursuant
to this paragraph (a) against costs or expenses incurred in connection with any
action, suit or proceeding commenced by such person against any person who shall
have been or shall be a director, officer, fiduciary, employee or agent of
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the Corporation or a Subsidiary Officer of an Affiliated Entity, but such
indemnification may be provided by the Corporation in any specific case as
permitted by Section 9.06 hereof.
b. The Corporation may indemnify any employee or agent of the
Corporation in the manner and to the extent that it shall indemnify any director
or officer under this Section 9.01, including indemnity in respect of service at
the request of the Corporation as a Subsidiary Officer of an Affiliated Entity.
SECTION 9.02. Derivative Actions.
a. The Corporation, to the full extent permitted, and in the manner
required, by the laws of the State of Delaware as in effect at the time of the
adoption of this Article IX or as such laws may be amended from time to time,
shall indemnify any person who shall have been or shall be made a party to or
shall be threatened to be made a party to any threatened, pending or completed
action or suit (including any appeal thereof) brought in the right of the
Corporation to procure a judgment in its favor by reason of the fact that such
person shall have been or shall be a director or officer of the Corporation, or,
if at a time when he shall have been or shall be a director or officer of the
Corporation shall have been or shall be serving at the request of the
Corporation as a Subsidiary Officer of an Affiliated Entity against expenses
(including attorneys' fees) and costs actually and reasonably incurred by such
person in connection with such action or suit if such person shall have acted in
good faith and in a manner such person shall have reasonably believed to be in
or not opposed to the best interests of the Corporation, except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless, and except to the extent that, the Court of Chancery of the State of
Delaware or the court in which such judgment shall have been rendered shall
determine upon application that despite the adjudication of liability but in
view of all the circumstances of the case, such person shall be fairly and
reasonably entitled to indemnity for such expenses and costs as the Court of
Chancery of the State of Delaware or such other court shall deem proper.
Notwithstanding anything to the contrary in the foregoing provisions of this
paragraph (a), a person shall not be entitled, as a matter of right, to
indemnification pursuant to this paragraph (a) against costs and expenses
incurred in connection with any action or suit in the right of the Corporation
commenced by such person, but such indemnification may be provided by the
Corporation in any specific case as permitted by Section 9.06 hereof.
b. The Corporation may indemnify any employee or agent of the
Corporation in the manner and to the extent that it shall indemnify any director
or officer under this Section 9.02, including indemnity in respect of service at
the request of the Corporation as a Subsidiary Officer of an Affiliated Entity.
SECTION 9.03. Determination of Entitlement to Indemnification. Any
indemnification under Section 9.01 or Section 9.02 hereof (unless ordered by a
court) shall be made by the Corporation only as authorized in the specific case
upon a determination that indemnification of the director, officer, employee or
agent is proper under the circumstances because such person has met the
applicable standard of conduct set forth in Section 9.01 or Section 9.02 hereof.
Such determination shall be made (i) by the Board of Directors by a majority
vote of a quorum consisting of directors who shall not have been and shall not
be parties to the action, suit or proceeding in respect of which indemnification
shall be sought or by majority vote of the members of a committee of the Board
of Directors composed of at least three members each of whom shall not have been
and shall not be a party to such action, suit or proceeding, or (ii) if such a
quorum shall not be obtainable and/or such a committee shall not be established
or obtainable, or, even if obtainable, if a quorum of disinterested directors
shall so direct, by independent legal counsel in a written opinion, or (iii) by
the stockholders. In the event a request for indemnification shall be made by
any person referred to in paragraph (a) of Section 9.10 hereof or paragraph (a)
of Section 9.02 hereof, the Corporation shall cause such determination to be
made not later than 60 days after such request shall be made.
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<PAGE> 18
SECTION 9.04. Right to Indemnification Upon Successful Defense and For
Service as a Witness.
a. Notwithstanding the other provisions of this Article IX to the
extent that a director, officer, employee or agent of the Corporation shall have
been successful on the merits or otherwise in defense of any action, suit or
proceeding referred to in Section 9.01 or Section 9.02 hereof or in defense of
any claim, issue or matter therein, such person shall be indemnified against
expenses (including attorneys' fees) and costs actually and reasonably incurred
by such person in connection therewith.
b. To the extent any person who shall have been or shall be a director
or officer of the Corporation shall have served or prepared to serve as a
witness in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, or in any investigation by the Corporation or
the Board of Directors thereof or a committee thereof or by any securities
exchange on which securities of the Corporation shall have been or shall be
listed on any national securities association, by reason of his services as a
director or officer of the Corporation or, if at a time when he shall have been
a director or officer of the Corporation shall have been or shall be serving at
the request of the Corporation as a Subsidiary Officer of an Affiliated Entity,
the Corporation shall indemnify such person against expenses (including
attorneys' fees) and costs actually and reasonably incurred by such person in
connection therewith within 30 days after the receipt by the Corporation from
such person of a statement requesting such indemnification, averring such
service and reasonably evidencing such expenses and costs. The Corporation may
indemnify any employee or agent of the Corporation to the same extent it is
required to indemnify any director or officer of the Corporation pursuant to the
foregoing sentence of this paragraph (b).
SECTION 9.05 Advance of Expenses
a. Expenses and costs incurred by any person referred to in paragraph
(a) of Section 9.01 hereof or paragraph (a) of Section 9.02 hereof in defending
a civil, criminal, administrative or investigative action, suit or proceeding
shall be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding upon receipt of an undertaking by or on behalf of
such person to repay such amount if it shall ultimately be determined that such
person shall not be entitled to be indemnified by the Corporation as authorized
by this Article IX.
b. Expenses and costs incurred by any person referred to in paragraph
(b) of Section 9.01 hereof or paragraph (b) of Section 9.02 hereof in defending
a civil, criminal, administrative or investigative action, suit or proceeding
may be paid by the Corporation in advance of the final disposition of such
action, suit or proceeding as authorized by the Board of Directors, a committee
thereof or an officer of the Corporation or a committee thereof authorized to so
act by the Board of Directors upon receipt of an undertaking by or on behalf of
such person to repay such amount if it shall ultimately be determined that such
person shall not be entitled to be indemnified by the Corporation as authorized
by this Article IX.
SECTION 9.06. Indemnification Not Exclusive. The provision of
indemnification to or the advancement of expenses and costs to any person under
this Article IX, or the entitlement of any person to indemnification or
advancement of expenses and costs under this Article IX, shall not limit or
restrict in any way the power of the Corporation to indemnify or advance
expenses and costs to such person in any other way permitted by law or be deemed
exclusive of any right to which any person seeking indemnification or
advancement of expenses and costs may be entitled under any law, agreement, vote
of stockholders or disinterested directors or otherwise, both as to any action
relating to such person in the capacity of an officer, director, employee or
agent of the Corporation and any action relating to him in any other capacity
while holding any such position.
18
<PAGE> 19
SECTION 9.07. Accrual of Claims; Successors. The indemnification provided
or permitted under this Article IX shall apply in respect of any expense, cost,
judgment, fine, penalty or amount paid in settlement, whether or not the claim
or cause of action in respect thereof accrued or arose before or after the
effective date of this Article IX. The right of any person who shall have been
or shall be a director, officer, employee or agent of the Corporation to
indemnification under this Article IX shall continue after he shall have ceased
to be a director, officer, employee or agent and shall inure to the benefit of
the heirs, distributees, executors, administrators and other legal
representatives of such person.
SECTION 9.08. Corporate Obligations; Reliance. This Article IX shall be
deemed to create a binding obligation on the part of the Corporation to its
current and former officers and directors and their heirs, distributees,
executors, administrators and other legal representatives, and each director or
officer in acting in such capacity shall be entitled to rely on the provisions
of this Article IX, without giving notice thereof to the Corporation.
SECTION 9.09. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who shall have been or shall be a director,
officer, employee or agent of the Corporation, or shall have been or shall be
serving at the request of the Corporation as a Subsidiary Officer of any
Affiliated Entity, against any liability asserted against such person and
incurred by such person in any such capacity, or arising out of such person's
status as such whether or not the Corporation would have had the power to
indemnify such person against such liability under the provisions of this
Article IX or applicable law.
SECTION 9.10. Definitions of Certain Terms.
a. For purposes of this Article IX, references to "the Corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its corporate existence had continued, would
have been permitted under applicable law to indemnify its directors, officers,
employees or agents, so that any person who shall have been or shall be a
director, officer, employee or agent of such constituent corporation, or shall
have been or shall be serving at the request of such constituent corporation as
a Subsidiary Officer of any Affiliated Entity shall stand in the same position
under the provisions of this Article IX with respect to the corporation if its
separate existence had continued.
b. For purposes of this Article IX, references to "fines" shall
include any excise taxes assessed on a person with respect to an employee
benefit plan; references to "serving at the request of the Corporation" shall
include any services as a director, officer, employee or agent of the
Corporation which shall impose duties on, or involves services by, such
director, officer, employee or agent with respect to an employee benefit plan,
its participants, or beneficiaries; and a person who shall have acted in good
faith and in a manner such person shall have reasonably believed to be in the
interest of the participants and beneficiaries of an employee benefit plan shall
be deemed to have acted in a manner "not opposed to the best interest of the
Corporation" as referred to in this Article IX.
SECTION 9.11. Saving Clause. In the event any provision of this Article
IX shall be held invalid by any court of competent jurisdiction, such holding
shall not invalidate any other provision of this Article IX, and the remaining
provisions of this Article IX hall be construed as if such invalid provision had
not been included in these By-laws.
19
<PAGE> 20
ARTICLE X
SEAL
SECTION 10.01. Seal. The Board shall provide a corporate seal, which
shall be in the form of a circle and shall bear the full name of the corporation
and the words and fixtures "Incorporated 1981 Delaware", or words and figures of
similar import.
ARTICLE XI
FISCAL YEAR
SECTION 11.01. Fiscal Year. The fiscal year of the Corporation shall end
on the thirty-first day of December in each year.
ARTICLE XII
WAIVER OF NOTICES
SECTION 12.01. Waiver of Notices. Whenever notice shall be required to be
given by these By- laws or by the Restated Certificate of Incorporation of the
Corporation or by the General Corporation Law of the State of Delaware, a
written waiver thereof, signed by the person or persons entitled to said notice,
whether before or after the time stated therein, shall be deemed equivalent to
notice.
ARTICLE XIII
GENDER
SECTION 13.01. Gender. Any words in the masculine gender in these By-laws
shall be deemed to include the feminine gender.
ARTICLE XIV
AMENDMENTS
SECTION 14.01. Amendments. These By-laws, as they shall be at any time,
may be amended or repealed by the Board; provided, however, that a vote of 80%
of the Board shall be required to amend, alter or repeal, or to adopt any
provision inconsistent with Sections 2.02, 2.03, 2.07, 2.14, 2.15 and 14.01 of
these By-Laws, as they shall be at any time.
20
<PAGE> 1
EXHIBIT 3.3
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
ROUGE STEEL COMPANY
ROUGE STEEL COMPANY (the "Corporation") a corporation originally
incorporated under the same name on December 10, 1981 and organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation adopted a resolution
proposing and declaring advisable that the Restated Certificate of
Incorporation of the Corporation be amended and restated to read in its
entirety as set forth in paragraph THIRD of this Amended and Restated
Certificate of Incorporation.
SECOND: That this Amended and Restated Certificate of Incorporation was
duly adopted in accordance with the provisions of Sections 242 and 245 of the
General Corporation Law of the State of Delaware.
THIRD: That the Restated Certificate of Incorporation of the Corporation,
as amended and restated hereby, reads in its entirety as follows:
ARTICLE FIRST
The name of the Corporation is:
ROUGE STEEL COMPANY
ARTICLE SECOND
The registered office of the Corporation shall be located at 1209 Orange
Street, in the City of Wilmington, County of New Castle, State of Delaware. The
name of its registered agent in charge thereof is The Corporation Trust
Company, 1209Orange Street, in the City of Wilmington, County of New Castle,
State of Delaware.
ARTICLE THIRD
The purpose of the corporation is to engage in any lawful act or activity
for which corporations may be organized under the General Corporation Law of
Delaware.
ARTICLE FOURTH
SECTION 1. The total authorized capital stock of the Corporation is 1,000
shares of Common Stock, $.01 par value per share.
SECTION 2. Dividends may be paid in cash or otherwise upon the Common
Stock out of the assets of the Corporation in the relationship and upon the
terms provided for below.
SECTION 3. Each holder of Common Stock shall be entitled to one vote, in
person or by proxy, for each share of Common Stock outstanding in his name on
the stock transfer books of the Corporation.
SECTION 4. The affirmative vote of the holders of at least 66 2/3 percent
of the combined voting power of the then outstanding shares of stock of all
classes and series of the Corporation entitled to vote generally in the
election of directors ("Voting Stock"), voting together as a single class,
shall be required to approve, adopt or authorize any of the following actions:
<PAGE> 2
(i) a merger or consolidation of the Corporation with or into another
person or entity;
(ii) any sale, lease, exchange, mortgage, pledge, transfer, dividend or
distribution or other disposition (in one transaction or a series of
transactions) to or with any entity or person of all or substantially all the
assets of the Corporation or of any Subsidiary (as defined in Section 5);
(iii) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation;
(iv) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or consolidation
of the Corporation with any of its Subsidiaries, or any other transaction, that
in any such case has the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class or series of stock or
of securities convertible into stock of the Corporation or any Subsidiary that
is directly or indirectly beneficially owned by any person or entity;
(v) any series or combination of transactions directly or indirectly having
the same effect as any of the foregoing; or
(vi) any agreement, contract or other arrangement providing directly or
indirectly for any of the foregoing.
SECTION 5. Notwithstanding any other provisions of this Amended and
Restated Certificate of Incorporation, the vote of stockholders of the
Corporation required to approve any Business Combination (as hereinafter
defined) shall be as set forth in this Section 5.
(i) In addition to any affirmative vote required by law or by this Amended
and Restated Certificate of Incorporation or any resolution or resolutions of
the Board of Directors adopted pursuant to Article Seventh of this Amended and
Restated Certificate of Incorporation, and except as otherwise expressly
provided in clause (iii) of this Section 5:
(a) any merger or consolidation of the Corporation with (1) any
Interested Stockholder or (2) any other entity (whether or not itself an
Interested Stockholder) that is, or after such merger or consolidation
would be, an Affiliate or Associate of an Interested Stockholder; or
(b) the adoption of any plan or proposal for the liquidation or
dissolution of the Corporation proposed by or on behalf of any Interested
Stockholder or any Affiliate or Associate of any Interested Stockholder; or
(c) any reclassification of securities (including any reverse stock
split), or recapitalization of the Corporation, or any merger or
consolidation of the Corporation with any of its Subsidiaries, or any other
transaction (whether or not with or into or otherwise involving any
Interested Stockholder), that in any such case has the effect, directly or
indirectly, of increasing the proportionate share of the outstanding shares
of any class or series of stock or securities convertible into stock of the
Corporation or any Subsidiary that is directly or indirectly beneficially
owned by any Interested Stockholder or any Affiliate or Associate of any
Interested Stockholder; or
(d) any series or combination of transactions directly or indirectly
having the same effect as any of the foregoing; or
(e) any agreement, contract or other arrangement providing directly or
indirectly for any of the foregoing;
shall not be consummated without the affirmative vote of the holders of at least
80 percent of the combined voting power of the then outstanding Voting Stock (as
defined above in Section 4), voting together as a single class. Such affirmative
vote shall be required notwithstanding the fact that no vote may be required, or
that a lesser percentage may be specified, by law or by this Amended and
Restated Certificate of Incorporation or any resolution or resolutions of the
Board of Directors adopted pursuant to Article Seventh of this Amended and
Restated Certificate of Incorporation or in any agreement with any national
securities exchange or otherwise.
<PAGE> 3
(ii) The term "Business Combination" as used in this Section 5 shall mean
any transaction that is referred to in any one or more of paragraphs (a) through
(e) of clause (i) of this Section 5.
(iii) The provisions of clause (i) of this Section 5 shall not be
applicable to any particular Business Combination, and such Business Combination
shall require only such affirmative vote as is required by law and any other
provision of this Amended and Restated Certificate of Incorporation and any
resolution or resolutions of the Board of Directors adopted pursuant to Article
Seventh of this Amended and Restated Certificate of Incorporation, if all the
conditions specified in either of the following paragraphs (a) or (b) are met:
(a) such Business Combination shall have been approved by a majority
of the Disinterested Directors; or
(b) all of the six conditions specified in the following clauses (1)
through (6) shall have been met:
(1) the transaction constituting the Business Combination shall
provide for a consideration to be received by holders of Common Stock
in exchange for all their shares of Common Stock, and the aggregate
amount of the cash and the Fair Market Value as of the date of the
consummation of the Business Combination of any consideration other
than cash to be received per share by holders of Common Stock in such
Business Combination shall be at least equal to the higher of the
following:
(A) (if applicable) the highest per share price (including
any brokerage commissions, transfer taxes and soliciting dealers'
fees) paid in order to acquire any shares of Common Stock
beneficially owned by the Interested Stockholder that were
acquired (I) within the two-year period immediately prior to the
Announcement Date or (II) in the transaction in which it became
an Interested Stockholder, whichever is higher; and
(B) the Fair Market Value per share of Common Stock on the
Announcement Date or on the Determination Date, whichever is
higher; and
(2) the transaction constituting the Business Combination shall
provide for a consideration to be received by holders of any class or
series of outstanding Voting Stock other than Common Stock in exchange
for all their shares of such Voting Stock, and the aggregate amount of
the cash and the Fair Market Value as of the date of the consummation
of the Business Combination of any consideration other than cash to be
received per share by holders of shares of such Voting Stock in such
Business Combination shall be at least equal to the highest of the
following (it being intended that the requirements of this paragraph
(b) (2) shall be required to be met with respect to every class and
series of such outstanding Voting Stock, whether or not the Interested
Stockholder beneficially owns any shares of a particular class or
series of Voting Stock):
(A) (if applicable) the highest per share price (including
any brokerage commissions, transfer taxes and soliciting dealers'
fees) paid in order to acquire any share of such class or series
of Voting Stock beneficially owned by the Interested Stockholder
that were acquired (I) within the two-year period immediately
prior to the Announcement Date or (II) in the transaction in
which it became an Interested Stockholder, whichever is higher;
(B) (if applicable) the highest preferential amount per
share to which the holders of shares of such class or series of
Voting Stock are entitled in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation; and
(C) the Fair Market Value per share of such class or series
of Voting Stock on the Announcement Date or on the Determination
Date, whichever is higher; and
(3) the consideration to be received by holders of a particular
class or series of outstanding Voting Stock (including Common Stock)
shall be in cash or in the same form as was previously paid in order
to acquire shares of such class or series of Voting Stock that are
beneficially owned by the Interested Stockholder, and
<PAGE> 4
if the Interested Stockholder beneficially owns shares of any class or
series of Voting Stock that were acquired with varying forms of
consideration, the form of consideration to be received by holders of
such class or series of Voting Stock shall be either cash or the form
used to acquire the largest number of shares of such class or series
of Voting Stock beneficially owned by it; provided, however, that this
clause (3) shall not apply to (A) any shares of Common Stock acquired
by Worthington Industries, Incorporated ("Worthington") or its
Affiliates prior to the effective date of this Amended and Restated
Certificate of Incorporation or (B) any shares of Common Stock
purchased by Worthington or its Affiliates that would result in
Worthington and its Affiliates owning an aggregate of not more than
35% of the total number (determined on a fully-diluted basis) of the
issued and outstanding shares of Common Stock of the Corporation; and
(4) after such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business
Combination:
(A) within the two years prior to the Announcement Date
except as approved by a majority of the Disinterested Directors,
there shall have been no failure to declare and pay at the
regular dates therefor the full amount of any dividends (whether
or not cumulative) payable on the outstanding Preferred Stock or
class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation;
(B) within the two years prior to the Announcement Date
there shall have been (I) no reduction in the annual rate of
dividends paid on the Common Stock (except as necessary to
reflect any subdivision of the Common Stock), except as approved
by a majority of the Disinterested Directors, and (II) an
increase in such annual rate of dividends (as necessary to
prevent any such reduction) in the event of any reclassification
(including any reverse stock split), recapitalization,
reorganization or any similar transaction that has the effect of
reducing the number of outstanding shares of the Common Stock,
unless the failure so to increase such annual rate is approved by
a majority of the Disinterested Directors; and
(C) such Interested Stockholder shall not have become the
beneficial owner of any additional shares of Voting Stock except
as part of the transaction that resulted in such Interested
Stockholder becoming an Interested Stockholder; provided,
however, that this subclause (C) shall not apply to (I) any
shares of Common Stock acquired by Worthington or its Affiliates
prior to the effective date of this Restated Certificate of
Incorporation or (II) any shares of Common Stock purchased by
Worthington or its Affiliates that would result in Worthington
and its Affiliates owning an aggregate of not more than 35% of
the total number (determined on a fully-diluted basis) of the
issued and outstanding shares of Common Stock of the Corporation;
and
(5) after such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received the
benefit, directly or indirectly (except proportionately as a
stockholder and except in the ordinary course of business or as part
of a supplier/customer relationship), of any loans, advances,
guarantees, pledges or other financial assistance or any tax credits
or other tax advantages provided by the Corporation, whether in
anticipation of or in connection with such Business Combination or
otherwise; and
(6) a proxy or information statement describing the proposed
Business Combination and complying with the requirements of the
Securities Exchange Act of 1934 and the rules and regulations
thereunder (or any subsequent provisions replacing such Act, rules or
regulations) shall be mailed to public stockholders of the Corporation
at least 30 days prior to the consummation of such Business
Combination (whether or not such proxy or information statement is
required to be mailed pursuant to such Act or subsequent provisions).
(iv) For purposes of this Section 5:
(a) A "person" shall mean any individual, firm, corporation,
partnership, trust or other entity.
<PAGE> 5
(b) "Interested Stockholder" shall mean any person (other than the
Corporation or any Subsidiary) who or that:
(1) is the beneficial owner, directly or indirectly, of twenty
percent or more of the combined voting power of the then outstanding
Voting Stock; or
(2) is an Affiliate of the Corporation and at any time within the
two-year period immediately prior to the date in question was the
beneficial owner, directly or indirectly, of twenty percent or more of
the combined voting power of the then outstanding Voting Stock; or
(3) is an assignee of or has otherwise succeeded to the
beneficial ownership of any shares of Voting Stock that were at any
time within the two-year period immediately prior to the date in
question beneficially owned by an Interested Stockholder, if such
assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public offering
within the meaning of the Securities Act of 1933.
(c) A person shall be a "beneficial owner" of any Voting Stock:
(1) that such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; or
(2) that such person or any of its Affiliates or Associates has
(A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or otherwise,
or (B) the right to vote or to direct the vote pursuant to any
agreement, arrangement or understanding; or
(3) that is beneficially owned, directly or indirectly, by any
other person with which such person or any of its Affiliates or
Associates has any agreement, arrangement or understanding for the
purposes of acquiring, holding, voting or disposing of any shares of
Voting Stock, but excluding any such agreement, arrangement or
understanding existing on the effective date of this Amended and
Restated Certificate of Incorporation and as to which the Corporation
is a party.
(d) For the purposes of determining whether a person is an Interested
Stockholder pursuant to paragraph (b) of this clause (iv), the number of
shares of Voting Stock deemed to be outstanding shall include all shares
deemed owned by such person through application of paragraph (c) of this
clause (iv) but shall not include any other shares of Voting Stock that may
be issuable to other persons upon exercise of conversion rights, exchange
rights, warrants or options, or otherwise.
(e) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on January 1, 1994.
(f) "Subsidiary" shall mean any corporation a majority of whose
outstanding stock having ordinary voting power in the election of directors
is owned by the Corporation, by a Subsidiary or by the Corporation and one
of more Subsidiaries; provided, however, that for the purposes of the
definition of Interested Stockholder set forth in paragraph (b) of this
clause (iv), the term "Subsidiary" shall mean only a corporation of which a
majority of each class of equity security is owned by the Corporation, by a
Subsidiary or by the Corporation and one or more Subsidiaries.
(g) "Disinterested Director" means any member of the Board of
Directors of the Corporation who (1) is unaffiliated with, and not a
nominee of, the Interested Stockholder proposing to engage in the Business
Combination, and any successor of a Disinterested Director who is
unaffiliated with, and not a nominee of, such Interested Stockholder and is
recommended to succeed a Disinterested Director by a majority of
Disinterested Directors then on the Board of Directors and (2) is not an
employee of the Corporation.
<PAGE> 6
(h) "Fair Market Value" means: (1) in the case of stock, the highest
closing sale price during the 30-day period immediately preceding the date
in question of a share of such stock on the New York Stock Exchange
Composite Tape, or, if such stock is not quoted on the Composite Tape, on
the New York Stock Exchange, or, if such stock is not listed on such
Exchange, on the principal United States national securities exchange
registered under the Securities Exchange Act of 1934 on which such stock is
listed, or, if such stock is not listed on any such exchange, the highest
closing sale price or bid quotation with respect to a share of such stock
during the 30-day period immediately preceding the date in question on the
National Association of Securities Dealers, Inc. Automated Quotations
System or any system then in use, or, if no such prices or quotations are
available, the fair market value on the date in question of a share of such
stock as determined by a majority of the Disinterested Directors in good
faith; and (2) in the case of property other than cash or stock, the fair
market value of such property on the date in question as determined by a
majority of the Disinterested Directors in good faith.
(i) "Announcement Date" means the date of first public announcement of
the proposal of the Business Combination.
(j) "Determination Date" means the date on which the Interested
Stockholder became an Interested Stockholder.
(v) A majority of the Disinterested Directors of the Corporation shall have
the power and duty to determine, on the basis of information known to them after
reasonable inquiry, all facts necessary to determine compliance with this
Section 5, including, without limitation, (a) whether a person is an Interested
Stockholder, (b) the number of shares of Voting Stock beneficially owned by any
person, (c) whether a person is an Affiliate or Associate of another person and
(d) whether the requirements of clause (iii) of this Section 5 have been met
with respect to any Business Combination; and the good faith determination of a
majority of the Disinterested Directors on such matters shall be conclusive and
binding for all purposes of this Section 5.
SECTION 6. The holders of Common Stock shall be entitled to receive the
assets of the Corporation remaining for distribution to its stockholders,
ratably in proportion to the number of shares held by them, respectively,
together with any other stockholder entitled to participate in such liquidation,
dissolution or winding up.
SECTION 7. Any Common Stock authorized hereunder or under any amendment
hereof, in the discretion of the Board of Directors, may be issued, except as
herein otherwise provided, in payment for property or services, or as bonuses to
employees of the Corporation or employees of subsidiary companies, or for other
assets or securities including cash, necessary or desirable, in the judgment of
the Board of Directors, to be purchased or acquired from time to time for the
Corporation, or for any other lawful purpose of the Corporation.
SECTION 8. If it seems desirable so to do, the Board of Directors may from
time to time issue scrip for fractional shares of stock. Such scrip shall not
confer upon the holder any right to dividends or any voting or other rights of a
stockholder of the Corporation, but the Corporation shall from time to time,
within such time as the Board of Directors may determine or without limit of
time if the Board of Directors so determines, issue one or more whole shares of
stock upon the surrender of scrip for fractional shares aggregating the number
of whole shares issuable in respect of the scrip so surrendered, provided that
the scrip so surrendered shall be properly endorsed for transfer if in
registered form.
ARTICLE FIFTH
The Corporation is to have perpetual existence.
ARTICLE SIXTH
The private property of the stockholders shall not be subject to the
payment of corporate debts to any extent whatever.
<PAGE> 7
ARTICLE SEVENTH
SECTION 1. Except as otherwise fixed pursuant to the provisions of Article
Fourth hereof relating to the rights of the holders of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation, the number of Directors of the Corporation shall be not less than
six and not more than nine. Subject to the rights of the holders of any class
or series of stock having a preference over the Common Stock as to dividends or
upon liquidation, in case of any vacancy in the Board of Directors, the
remaining Directors, by affirmative vote of a majority thereof, may, and the
stockholders shall not be entitled to, elect a successor to hold office for the
unexpired portion of the term of the Director whose place is vacant and until
his successor shall be duly elected and qualified.
SECTION 2. The Directors, other than those who may be elected by the
holders of any class or series of stock having a preference over the Common
Stock as to dividends or upon liquidation, shall be divided into three classes:
Class I, Class II and Class III. Within the limits specified in this Article
Seventh and the By-Laws of the Corporation, the number of directors in each
class shall be determined by resolution of the Board of Directors; provided,
however, that the number of Directorships shall be apportioned among the
classes so as to maintain the classes as nearly equal in number as possible.
The terms of office of the classes of Directors shall expire at the times of
the annual meetings of the stockholders as follows: Class I at the annual
meeting held in 1994, Class II at the annual meeting held in 1995 and Class III
at the annual meeting held in 1996, or thereafter in each case when their
respective successors are elected and qualified. At each subsequent annual
meeting, the Directors chosen to succeed those whose terms are expiring shall
be identified as being of the same class as the Directors whom they succeed,
and shall be elected for a term expiring at the time of the third succeeding
annual meeting of stockholders, or thereafter in each case when their
respective successors are elected and qualified. No decrease in the number of
directors constituting the Board of Directors shall shorten the term of any
incumbent director.
SECTION 3. No Director shall be personally liable to the Corporation or
its stockholders for monetary damages for breach of fiduciary duty as a
Director, except for liability (i) for any breach of the Director's duty of
loyalty to the Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174, or any successor provision thereto, of the
Delaware General Corporation Law, or (iv) for any transaction from which the
Director derived an improper personal benefit. If the Delaware General
Corporation Law is amended to authorize corporate action further eliminating or
limiting the personal liability of directors, then the liability of a Director
of the Corporation shall be eliminated or limited to the fullest extent
permitted by the Delaware General Corporation Law, as so amended.
SECTION 4. If Carl L. Valdiserri voluntarily ceases to be employed as
Chief Executive Officer of the Corporation and voluntarily elects not to remain
as Chairman of the Board of Directors of the Corporation, then the first and
only the first successor to Carl L. Valdiserri as Chief Executive Officer and
Chairman of the Board shall be chosen by a vote of 75% of the entire Board of
Directors, but excluding Carl L. Valdiserri and his designees on the Board of
Directors. If Carl L. Valdiserri continues to be Chairman of the Board of
Directors of the Corporation, (i) the first and only the first successor to
Carl L. Valdiserri as the Chief Executive Officer of the Corporation shall be
chosen by a vote of 75% of the entire Board of Directors, including Carl L.
Valdiserri and his designees on the Board of Directors; and (ii) the first and
only the first successor to Carl L. Valdiserri as Chairman of the Board shall
be chosen by a vote of 75% of the entire Board of Directors, including Carl L.
Valdiserri and his designees on the Board of Directors.
SECTION 5. In furtherance, and not in limitation of the powers conferred
by law, the Board of Directors is expressly authorized:
(a) To make, alter, amend and repeal the By-Laws of the Corporation.
(b) To remove at any time any officer elected or appointed by the
Board of Directors. Any other officer or employee of the Corporation may be
removed at any time by a vote of the Board of Directors, or by any
<PAGE> 8
committee or superior officer upon whom such power of removal may be
conferred by the By-Laws or by the vote of the Board of Directors.
(c) From time to time to fix and to vary the sum to be reserved over
and above its capital stock paid in before declaring any dividends; to
direct and determine the use and disposition of any surplus or net profits
over and above the capital stock paid in; to fix the time of declaring and
paying any dividend, and, unless otherwise provided in this Certificate or
in the By-Laws, to determine the amount of any dividend. All sums reserved
as working capital or otherwise may be applied from time to time to the
acquisition or purchase of its bonds or other obligations or shares of its
own capital stock or other property to such extent and in such manner and
upon such terms as the Board of Directors shall deem expedient and neither
the stocks, bonds, or other property so acquired shall be regarded as
accumulated profits for the purpose of declaring or paying dividends unless
otherwise determined by the Board of Directors, but shares of such capital
stock so purchased or acquired may be resold, unless such shares shall have
been retired for the purpose of decreasing the Corporation's capital stock
as provided by law.
(d) From time to time to determine whether and to what extent, and at
what time and places and under what conditions and regulations the accounts
and books of the Corporation (other than the stock ledger), or any of them,
shall be open to the inspection of the stockholders; and no stockholder
shall have any right to inspect any account or book or document of
Corporation, except as conferred by statute or authorized by the Board of
Directors or by a resolution of the stockholders.
(e) The Corporation may by its By-Laws confer upon the Directors
powers and authorities additional to the foregoing and to those expressly
conferred upon them by statute.
ARTICLE EIGHTH
Both the stockholders and the Directors of the Corporation may hold their
meetings and the Corporation may have an office or offices in such place or
places outside of the State of Delaware as the By-Laws may provide, and the
Corporation may keep its books outside of the State of Delaware except as
otherwise provided by law.
ARTICLE NINTH
In addition to any requirement of law and any other provision of this
Amended and Restated Certificate of Incorporation or any resolution or
resolutions of the Board of Directors adopted pursuant to Article Seventh of
this Amended and Restated Certificate of Incorporation (and notwithstanding the
fact that a lesser percentage may be specified by law, this Amended and Restated
Certificate of Incorporation or any such resolution or resolutions), the
affirmative vote of the holders of 66 2/3 percent or more of the combined voting
power of the then outstanding shares of Voting Stock, voting together as a
single class, shall be required to amend, alter or repeal this Amended and
Restated Certificate of Incorporation. Subject to the foregoing provisions of
this Article Ninth, the Corporation reserves the right to amend, alter, change
or repeal any provision contained in this Amended and Restated Certificate of
Incorporation in the manner, now or hereafter prescribed by statute, and all
rights conferred on stockholders herein are granted subject to this reservation.
ARTICLE TENTH
Any act or transaction by or involving the Corporation that requires for
its adoption, under the Delaware General Corporation Law or this Amended and
Restated Certificate of Incorporation, the approval of the Corporation's
stockholders shall, pursuant to Section 251(g) of the Delaware General
Corporation Law, require, in addition, the approval of the stockholders of Rouge
Industries, Inc. (or any successor by merger), by the same vote as is required
by the Delaware General Corporation Law or by this Amended and Restated
Certificate of Incorporation.
<PAGE> 9
IN WITNESS WHEREOF, Rouge Steel Company has caused this Certificate to be
signed and attested by its duly authorized officers, this 22 day of July, 1997.
By: /s/ Gary P. Latendresse
-----------------------------
Name: Gary P. Latendresse
Title: Vice President and
Chief Financial Officer
ATTEST: /s/ Michael A. Weiss
- ------------------------------------
Secretary
<PAGE> 1
EXHIBIT 3.4
AMENDMENT TO RESTATED BYLAWS OF ROUGE STEEL
SECTION 2.16 Joint Meetings. Notwithstanding any provision of these
bylaws to the contrary, so long as all of the outstanding voting capital stock
of the Corporation is owned, directly or indirectly, by Parent (as defined
below), and so long as each member of the Board of Directors of the Corporation
is also a member of the Board of Directors of Parent, (i) each meeting of the
Board of Directors of Parent (a "Parent Board Meeting") shall constitute a Joint
Meeting (as defined below) unless otherwise specified in the notice given with
respect to such Parent Board Meeting in accordance with the By-laws of Parent
and (ii) no notice of any Joint Meeting shall be required to be given to any
person in his or her capacity as a director of the Corporation. As used in this
Section 2.16, (a) "Parent" shall mean Rouge Industries, Inc., a Delaware
corporation, and any entity into which Rouge Industries, Inc. or any successor
may be merged or with which it may be consolidated or any entity resulting from
any merger or consolidation to which Rouge Industries, Inc. or any successor
shall be a party and (b) a "Joint Meeting" shall mean a joint meeting of the
respective Boards of Directors of Parent and the Corporation.
<PAGE> 1
EXHIBIT 4.2
FIRST AMENDMENT TO
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
This First Amendment to Amended and Restated Stockholders Agreement
(the "Amendment") is made as of the 20th day of July, 1997, by and among Rouge
Steel Company, a Delaware corporation ("Rouge Steel"); Carl L. Valdiserri (the
"Management Investor"); Worthington Industries, Inc., a Delaware corporation
(together with its successors, "Worthington"); and Rouge Industries, Inc., a
Delaware corporation ("Rouge Industries").
RECITALS
1. Rouge Steel, the Management Investor and Worthington entered into
an Amended and Restated Stockholders Agreement dated as of the 14th day of
November, 1996 (the "1996 Agreement"). The 1996 Agreement addresses, among
other things, the rights and obligations of the Management Investor and
Worthington in their capacities as stockholders of Rouge Steel.
2. Rouge Steel intends to adopt a holding company organizational
structure (the "Reorganization"). Upon consummation of the Reorganization,
Rouge Steel will be held as a direct, wholly-owed subsidiary of Rouge
Industries. The holding company organizational structure will be implemented
without stockholder approval pursuant to Section 251(g) of the General
Corporation Law of the State of Delaware. In connection with the
Reorganization, each issued and outstanding share of Class A Common Stock of
Rouge Steel and Class B Common Stock of Rouge Steel shall be converted into and
exchanged for a share of Class A Common Stock or Class B Common Stock, as the
case may be, of Rouge Industries having the same designations, rights, powers,
preferences, qualifications, limitations and restrictions as the shares of
Rouge Steel being converted.
3. In response to and in accordance with the Reorganization, the
parties desire to amend the 1996 Agreement in order to substitute Rouge
Industries as a party for Rouge Steel.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged and intending to be legally bound hereby, the parties hereto do
hereby agree as follows:
Section 1. Effective Date. This Amendment shall become effective upon the
consummation of the Reorganization (the "Effective Date").
Section 2. Amendment. All references in the 1996 Agreement of the "Company"
shall be deemed to be references to Rouge Industries. Rouge Industries shall
be substituted for Rouge Steel as a party to the 1996 Agreement for all
purposes. Rouge Industries agrees to be bound by all of the terms and
conditions of the 1996 Agreement, as amended hereby and Rouge Industries
assumes any and all liabilities and obligations of Rouge Steel arising out of
or in connection with
<PAGE> 2
the 1996 Agreement. Worthington and the Management Investor hereby agree to
release Rouge Steel from any and all liabilities or obligations arising out of
or in connection with the 1996 Agreement.
Section 3. Effect of Amendment. Except as expressly amended hereby, the
1996 Agreement shall remain in full force and effect in accordance with its
terms. Effective as of the Effective Date, any reference to the Amended and
Restated Stockholders Agreement shall be a reference to the 1996 Agreement, as
amended by this Amendment.
Section 4. Miscellaneous. This Amendment shall inure to the benefit of
and shall be binding upon the respective successors and assigns of the parties
hereto.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amendment as of the day and year first above written.
/s/ Carl L. Valdiserri
-----------------------------------------------
Carl L. Valdiserri
WORTHINGTON INDUSTRIES, INC.
By: /s/ John P. McConnell
----------------------------------------
Title: CHAIRMAN
----------------------------------------
ROUGE INDUSTRIES, INC.
By: /s/ Gary P. Latendresse
----------------------------------------
Title: VICE PRESIDENT & CFO
----------------------------------------
ROUGE STEEL COMPANY
By: /s/ William E. Homberger
----------------------------------------
Title: V.P. EMPLOYEE RELATIONS & PUBLIC AFFAIRS
----------------------------------------
<PAGE> 1
EXHIBIT 10.1
$100,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of July 30, 1997
among
ROUGE INDUSTRIES, INC.
ROUGE STEEL COMPANY,
the financial institutions party hereto,
and
THE CHASE MANHATTAN BANK,
as Agent
<PAGE> 2
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Terms Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 2. AMOUNT AND TERMS OF CREDIT FACILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.1 Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.2 Swingline Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 2.3 Competitive Bid Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 2.4 Notice of Borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 2.5 Disbursement of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 2.6 Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 2.7 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 2.8 Interest Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 2.9 Minimum Amount of LIBOR Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 2.10 Conversion or Continuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 2.11 Voluntary Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 2.12 Voluntary Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Section 2.13 Mandatory Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 2.14 Application of Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 2.15 Method and Place of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Section 2.16 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Section 2.17 Interest Rate Unascertainable, Increased Costs, Illegality . . . . . . . . . . . . . . . . . . . . . . 38
Section 2.18 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 2.19 Increased Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 2.20 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Section 2.21 Mitigation; Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 2.22 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
SECTION 2A. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 2A.1 Issuance of Letters of Credit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 2A.2 Participation in Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 2A.3 Reimbursement of Letter of Credit Drawings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Section 2A.4 Letter of Credit Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Section 2A.5 Increased Costs, Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 3. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 3.1 Conditions Precedent to Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Section 3.2 Conditions Precedent to All Loans and Issuance of Letters of Credit . . . . . . . . . . . . . . . . . . . 53
</TABLE>
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SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 4.1 Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 4.2 Corporate Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 4.3 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 4.4 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 4.5 Financial Statements; Financial Condition; etc . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 4.6 Projections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 4.7 Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 4.8 Use of Proceeds; Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 4.9 Governmental Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 4.10 Tax Returns and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 4.11 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
Section 4.12 Investment Company Act; Public Utility Holding Company Act . . . . . . . . . . . . . . . . . . . . . . 58
Section 4.13 No Material Adverse Effect as of Restatement Effective Date. . . . . . . . . . . . . . . . . . . . . . 59
Section 4.14 Corporate Structure; Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 4.15 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 4.16 Patents, Trademarks, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 4.17 Ownership of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 4.18 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 4.19 Licenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 4.20 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 4.21 No Burdensome Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Section 4.22 Property Rights, Services, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 4.23 Merger/Restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 5.1 Information Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Section 5.2 Books, Records and Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 5.3 Maintenance of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Section 5.4 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 5.5 Corporate Franchises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 5.6 Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 5.7 Performance of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Section 5.8 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 5.9 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 6. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Section 6.1 Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 6.2 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Section 6.3 Restriction on Fundamental Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Section 6.4 Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 6.5 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Section 6.6 Advances, Investments and Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
Section 6.7 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Section 6.8 Changes in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
</TABLE>
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Section 6.9 Certain Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 6.10 Fiscal Year; Fiscal Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 6.11 Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SECTION 7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 7.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Section 7.2 Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 8. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 8.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 8.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
Section 8.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 8.4 Reliance by the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Section 8.5 Notice of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 8.6 Non-Reliance on the Agent and Other Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Section 8.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
Section 8.8 The Agent in Its Respective Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 8.9 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 9.1 Payment of Expenses, Indemnity, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
Section 9.2 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
Section 9.3 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 9.4 Successors and Assigns; Participations; Assignments . . . . . . . . . . . . . . . . . . . . . . . . . . 91
Section 9.5 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Section 9.6 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Section 9.7 Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95
Section 9.8 Governing Law; Submission to Jurisdiction; Appointment of Agent . . . . . . . . . . . . . . . . . . . . 96
Section 9.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Section 9.10 Headings Descriptive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Section 9.11 Marshalling; Recapture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Section 9.12 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
Section 9.13 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Section 9.14 Domicile of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Section 9.15 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Section 9.16 Waiver of Trial by Jury . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
Section 9.17 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C>
Annex 1 Revolving Loan Commitments
Exhibit A-1 Form of Revolving Note
Exhibit A-2 Form of Competitive Bid Note
Exhibit A-3 Form of Swingline Note
Exhibit B Form of Competitive Bid Quote Request
Exhibit C Form of Invitation for Competitive Bid Quotes
Exhibit D Form of Competitive Bid Quote
Exhibit E Form of Notice of Acceptance/Non Acceptance
Exhibit F Form of Letter of Credit Request
Exhibit G-1 Form of Opinion of Rogers & Wells
Exhibit G-2 Form of Opinion of Skadden, Arps, Slate, Meagher & Flom LLP
Exhibit H Form of Transfer Supplement
Exhibit I Form of Holdings Guaranty
Schedule 4.4 Litigation
Schedule 4.11 ERISA Events
Schedule 4.14 Subsidiaries/Double Eagle
Schedule 4.15 Environmental Matters
Schedule 5.1(h) SEC Filings
Schedule 5.3 Insurance
Schedule 6.2 Liens
Schedule 6.3(e) Subsidiaries
Schedule 6.4 Permitted Asset Sales
Schedule 6.7 Transactions with Affiliates
</TABLE>
iv
<PAGE> 6
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of July 30, 1997,
among ROUGE INDUSTRIES, INC., a Delaware corporation ("Holdings"), ROUGE STEEL
COMPANY, a Delaware corporation (the "Borrower"), the financial institutions
which are or may become a party hereto (individually a "Bank" and collectively
the "Banks"), and THE CHASE MANHATTAN BANK, in its capacity as agent for the
Banks.
The Borrower, the Banks and the Agent are parties to a certain Credit
Agreement, dated as of November 29, 1994 (as heretofore amended, the "Existing
Credit Agreement") pursuant to which the Borrower requested that the Banks and
the Swingline Lender extend credit in order to enable the Borrower to borrow, on
the terms and subject to the conditions set forth in the Existing Credit
Agreement, Revolving Loans in an aggregate principal amount not to exceed, when
aggregated with outstanding Competitive Bid Loans, outstanding Swingline Loans
and Letter of Credit Outstandings, $100,000,000 at any time outstanding,
Competitive Bid Loans in an aggregate principal amount not to exceed $25,000,000
at any time outstanding, Swingline Loans not to exceed an aggregate principal
amount equal to $10,000,000 at any time outstanding and for the Issuing Bank to
issue Letters of Credit in an aggregate face amount not to exceed $10,000,000 at
any time outstanding.
Pursuant to a corporate restructuring intended to be consummated
concurrently with the execution and delivery of this Agreement, all of the
Borrower's outstanding capital stock shall be owned directly by Holdings. In
connection with such restructuring, the Borrower has requested that the Existing
Credit Agreement be amended and restated in its entirety pursuant to this
Agreement (as defined below) and that Holdings become a party hereto.
Accordingly, the parties hereto agree that the Existing Credit
Agreement is amended as restated in its entirety as follows:
<PAGE> 7
SECTION 1. DEFINITIONS
Section 1.1 Definitions. As used herein, the following terms shall
have the meanings herein specified unless the context otherwise requires.
Defined terms in this Agreement shall include in the singular number the plural
and in the plural number the singular.
"Absolute Rate Auction" shall mean a solicitation of Competitive Bid
Quotes setting Competitive Bid Absolute Rates pursuant to Section 2.3.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and executive officers of such Person), controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power to (x)
vote 5% or more of the securities having ordinary voting power for the election
of directors of such corporation or (y) direct or cause the direction of the
management and policies of such corporation, whether through the ownership of
voting securities, by contract or otherwise, provided, that no Bank shall be
deemed an Affiliate of the Borrower or Holdings.
"Agent" shall mean The Chase Manhattan Bank acting in its capacity as
agent for the Banks and any successor agent appointed in accordance with Section
8.9.
"Agent's Office" shall mean the office of the Agent located at 4 Chase
Metrotech Center, 13th Floor, Brooklyn, New York 11245, telephone number: (718)
242-7974; facsimile number: (718) 242-6910 Attention: New York Agency or such
other office as the Agent may hereafter designate in writing as such to the
other parties hereto.
"Agreement" shall mean this Amended and Restated Credit Agreement as
the same may from time to time hereafter be further amended, modified, restated
or otherwise supplemented.
"Annual Increase" shall mean, for any fiscal year of Holdings, an
amount equal to 50% of Net Income (but only if positive) for such Fiscal Year.
2
<PAGE> 8
"Applicable Margin" shall mean (i) with respect to Base Rate Loans, 0%
and (ii) with respect to LIBOR Loans, for the period from the Closing Date to,
but not including, the initial Margin Adjustment Date, 0.375%, and thereafter
the applicable margin set forth opposite the Leverage Ratio set forth below:
Leverage Ratio Applicable Margin
Greater than 1.50 0.675%
Equal to or less than
1.50 but greater than 1.00 0.425%
Equal to or less than 1.00 0.250%
For purposes of determining the Applicable Margin for LIBOR Loans, the
Leverage Ratio will be determined at the end of each fiscal quarter of the
Borrower (a "Margin Determination Date"). Such Applicable Margin determined on
a Margin Determination Date will be effective (a "Margin Adjustment Date")
commencing on the fifth day after Agent's receipt of the financial statements
delivered pursuant to Section 5.1(a) or (b) and the compliance certificate
executed and delivered by an Authorized Officer pursuant to Section 5.1(e)
certifying the Leverage Ratio for the previous fiscal quarter, and shall be
effective with respect to all LIBOR Loans made, continued or converted on or
after such Margin Adjustment Date. Notwithstanding the foregoing, if a lower
Applicable Margin would be effective on any Margin Adjustment Date and a Default
or Event of Default exists on such date or Holdings and/or the Borrower has
failed to deliver the financial statements and compliance certificate described
in Section 5.1(a) or (b) and 5.1(e), respectively, with respect to a fiscal
quarter or fiscal year in accordance with the provisions thereof, then such
Applicable Margin shall not be so reduced until such Default or Event of Default
shall be cured or waived or Holdings and/or the Borrower shall have delivered
such financial statements and compliance certificate in accordance with the
provisions of Section 5.1(a) or (b) and 5.1(e), as the case may be.
"Authorized Officer" shall mean, with respect to any Person, the Chief
Executive Officer, the President, any Vice President, the Chief Financial
Officer
3
<PAGE> 9
and, with respect to financial matters, the Chief Financial Officer, in each
case whose name appears on an incumbency certificate of such Person delivered to
the Agent.
"Bank" and "Banks" shall have the meaning provided in the preamble of
this Agreement.
"Bankruptcy Code" shall mean Title 11 of the United States Code
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes.
"Base Rate" shall mean, at any particular date, the higher of (a) the
Prime Rate and (b) the sum of 1/2 of 1% per annum and the Federal Funds Rate.
"Base Rate Loans" shall mean Revolving Loans made and/or being
maintained at a rate of interest based upon the Base Rate.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrowing" shall mean the incurrence of one Type of Loan of one
Facility from all the Banks having Revolving Loan Commitments for such Type of
Loan on a given date (or resulting from conversions or continuations on a given
date), having in the case of LIBOR Loans the same Interest Period.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day excluding Saturday, Sunday and any day which shall
be in New York City or Detroit, Michigan a legal holiday or a day on which
banking institutions are authorized or required by law or other government
actions to close and (ii) with respect to all notices and determinations in
connection with, conversions and continuations of, and payments of principal and
interest on, LIBOR Loans, any day which is a Business Day described in clause
(i) and which is also a day for trading by and between banks for U.S. dollar
deposits in the relevant interbank LIBOR market.
"Capitalized Lease" shall mean (a) any lease of property, real or
personal, the obligations under which are capitalized on the consolidated
balance sheet of
4
<PAGE> 10
Holdings and (b) any other such lease to the extent that the then present value
of the minimum rental commitment thereunder should, in accordance with GAAP, be
capitalized on a balance sheet of the lessee.
"Cash Equivalents" shall mean (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof), (ii) time deposits and
certificates of deposit of any Bank or any domestic commercial bank of
recognized standing having capital and surplus in excess of $500,000,000 with
maturities of not more than 90 days from the date of acquisition thereof, (iii)
money market funds, (iv) fully secured repurchase obligations for underlying
securities of the types described in clause (i) entered into with any bank
meeting the qualifications specified in clause (ii) above or entered into with
broker-dealers which have a short-term credit rating of at least A-1 or the
equivalent by S&P, at least P-1 or the equivalent by Moody's or at least TBW-1
or the equivalent by Thomson BankWatch, (v) commercial paper issued by any
financial institution or corporation which in each case is rated at least A-2 or
the equivalent thereof by S&P or at least P-2 or the equivalent thereof by
Moody's and in each case, maturing within 270 days after the date of
acquisition; (vi) commercial paper issued by corporations rated at least A-3 or
the equivalent by S&P or at least P-3 or the equivalent by Moody's and in any
case with a remaining term of not more than 91 days; (vii) medium term notes
issued by any domestic corporation which have been rated at least BBB or the
equivalent by S&P with a remaining term of not more than 540 days; (viii)
corporate bonds issued by any domestic corporation which have been rated at
least BBB or the equivalent by S&P with a remaining term of not more than 540
days; (ix) floating rate notes issued by an agency of the United States
Government and by domestic corporations rated at least A-2 or the equivalent
thereof by S&P or P-2 or the equivalent thereof by Moody's and in each case
having a remaining maturity within 540 days of the acquisition thereof; (x)
preferred stock issued by corporations rated at least BBB or the equivalent by
S&P and in each case having a remaining maturity of not more than 90 days; (xi)
auction rate preferred notes issued by corporations rated at least BBB or the
equivalent by S&P and in each case having a remaining maturity of not more
5
<PAGE> 11
than 91 days; (xii) taxable auction rate notes issued by domestic corporations
or banks meeting the qualifications specified in clause (ii) above rated at
least BBB or the equivalent by S&P and in each case having a remaining maturity
of not more than 91 days; and (xiii) municipal bonds issued by municipalities
of the United States maturing no later than one year after the acquisition
thereof.
"Cash Flow" shall mean, for any fiscal period of Holdings, on a
consolidated basis, the sum of (i) Net Income for such period, plus (ii)
Interest Expense for such period, plus (iii) to the extent deducted in the
calculation of Net Income for such period, depreciation expense and non-cash
charges, plus (iv) extraordinary losses for such period, minus (v) extraordinary
gains for such period, minus (vi) non-cash credits for such period, all
determined in accordance with GAAP.
"Change in Control" shall mean an occurrence in which (a) any person
or group (within the meaning of Rule 13d-5 of the Securities and Exchange Act of
1934, as in effect on the date hereof) other than Carl L. Valdiserri shall own,
directly or indirectly, beneficially or of record, shares representing more than
35% of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of Holdings; or (b) Holdings shall cease to own,
directly or indirectly, beneficially and of record, 100% of the issued and
outstanding common stock of the Borrower.
"Chase" shall mean The Chase Manhattan Bank.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute.
"Competitive Bid Absolute Rate" shall have the meaning provided in
Section 2.3(d).
"Competitive Bid Absolute Rate Loan" shall mean a loan made or to be
made by a Bank pursuant to an Absolute Rate Auction.
"Competitive Bid LIBOR Loan" shall mean a loan made or to be made by a
Bank pursuant to a LIBOR Auction.
6
<PAGE> 12
"Competitive Bid Loans" shall have the meaning provided in Section
2.3, and shall include a Competitive Bid LIBOR Loan and a Competitive Bid
Absolute Rate Loan.
"Competitive Bid Margin" shall have the meaning set forth in Section
2.3(d).
"Competitive Bid Note" shall have the meaning provided in Section 2.6.
"Competitive Bid Quote" shall mean an offer, substantially in the form
of Exhibit D hereto, by any Bank to make a Competitive Bid Loan in accordance
with Section 2.3.
"Competitive Bid Quote Request" shall have the meaning provided in
Section 2.3(b).
"Contingent Obligation" as to any Person shall mean any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(a) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (b) to advance or supply funds (i) for the
purchase or payment of any such primary obligation or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (c) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof; provided, however, that
the term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business and, provided further,
that the Holdings Guaranty shall not be a Contingent Obligation for purposes of
calculating financial covenants to the extent that the Indebtedness guaranteed
thereby is otherwise accounted for under this Agreement. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary
7
<PAGE> 13
obligation in respect of which such Contingent Obligation is made or, if not
stated or determinable, the reasonably anticipated maximum liability in respect
thereof as determined by the Borrower in good faith.
"Credit Exposure" shall have the meaning provided in Section 9.4(b).
"Current Assets" shall mean, at any time, the consolidated current
assets of Holdings at such time, determined in accordance with GAAP consistently
applied.
"Current Liabilities" shall mean, at any time, the consolidated
current liabilities of Holdings at such time, determined in accordance with GAAP
consistently applied.
"Current Ratio" shall mean the ratio of Current Assets to Current
Liabilities.
"Debt Service" shall mean, for any fiscal period of Holdings, the
total amount of (i) Interest Expense of Holdings on a consolidated basis, plus
(ii) scheduled repayments (or the component of rent attributable to a scheduled
repayment) of all Indebtedness for borrowed money and Indebtedness of the type
specified in subclause (ii) of the definition of Indebtedness plus (iii) all
amounts paid in respect of any redemption of any preferred stock of Holdings or
any of its consolidated Subsidiaries plus (iv) all cash dividend payments in
respect of any preferred stock of Holdings or any of its consolidated
Subsidiaries, in each case for such fiscal period.
"Debt Service Coverage Ratio" shall mean the ratio of Cash Flow to
Debt Service.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Default Rate" shall have the meaning provided in Section 2.7(e).
"Dividends" shall have the meaning provided in Section 6.5.
8
<PAGE> 14
"Domestic Lending Office" shall mean, as to any Bank, the office of
such Bank designated as such on Annex I, or such other office designated by such
Bank from time to time by written notice to the Agent and the Borrower.
"Double Eagle" shall mean Double Eagle Steel Coating Company, a
Michigan partnership.
"Environmental Affiliate" shall mean, with respect to Holdings or any
of its Subsidiaries, any other Person whose liability for any Environmental
Claim Holdings or any such Subsidiary has retained, assumed or otherwise become
liable for (contingent or otherwise), either contractually or by operation of
law.
"Environmental Approvals" shall mean any permit, license, approval,
ruling, variance, exemption or other authorization required under applicable
Environmental Laws.
"Environmental Claim" shall mean, with respect to Holdings or any of
its Subsidiaries or any of their respective Environmental Affiliates, any
notice, claim or demand by any other Person alleging potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, fines or penalties
arising out of, based on or resulting from (a) the presence, or release into the
environment, of any Material of Environmental Concern at any location, whether
or not owned by such Person or (b) circumstances forming the basis of any
violation, or alleged violation, of any Environmental Law.
"Environmental Laws" shall mean all federal, state, local and foreign
laws and regulations relating to pollution or protection of human health or the
environment (including, without limitation, ambient or indoor air, surface
water, ground water, land surface or subsurface strata), including without
limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of Materials of Environmental Concern, or otherwise relating
to the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.
9
<PAGE> 15
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time. Section references to ERISA are to ERISA,
as in effect at the date of this Agreement and any subsequent provisions of
ERISA, amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Controlled Group" shall mean a group consisting of any ERISA
Person and all members of a controlled group of corporations and all trades or
businesses (whether or not incorporated) under common control with such Person
that, together with such Person, are treated as a single employer under
regulations of the PBGC. Notwithstanding the foregoing, any liability of any
member of the ERISA Controlled Group other than Holdings, the Borrower or any of
their respective Subsidiaries shall be disregarded for all purposes of this
Agreement to the extent that such liability is not the joint and several
liability of Holdings, the Borrower or any of their respective Subsidiaries.
"ERISA Person" shall have the meaning set forth in Section 3(9) of
ERISA for the term "person."
"ERISA Plan" means (A) any Plan that (i) is not a Multiemployer Plan
and (ii) has Unfunded Benefit Liabilities in excess of $500,000 and (B) any Plan
that is a Multiemployer Plan.
"Eurocurrency Reserve Requirements" shall mean, with respect to each
day during an Interest Period for LIBOR Loans, that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Federal Reserve
Board, for determining the maximum reserves (including, without limitation,
basic, supplemental, marginal and emergency reserves) for eurocurrency funding
(currently referred to as "Eurocurrency Liabilities" in Regulation D) maintained
by a member bank of the Federal Reserve System.
"Eveleth Mines" shall mean Eveleth Mines LLC, a Minnesota limited
liability company doing business as EVTAC Mining.
"Event of Default" shall have the meaning provided in Section 7.
10
<PAGE> 16
"Facility" shall mean the Revolving Loans, Competitive Bid Loans,
Swingline Loans and Letters of Credit.
"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System as constituted from time to time.
"Fees" shall mean all amounts payable pursuant to Sections 2.16 and
2A.4.
"GAAP" shall mean generally accepted accounting principles in the
United States of America as in effect from time to time.
"Holdings" shall have the meaning provided in the preamble to this
Agreement.
"Holdings Guaranty" shall mean the Guaranty by Holdings in favor of
the Agent for the benefit of the Banks substantially in the form of Exhibit I
hereto.
"Indebtedness" shall mean with respect to any Person, without
duplication: (i) all obligations of such Person which in accordance with GAAP
would be shown on the balance sheet of such Person as a liability (including,
without limitation, obligations for borrowed money and for the deferred purchase
price of property or services, and obligations evidenced by bonds, debentures,
notes or other similar instruments); (ii) all rental obligations under leases
required to be capitalized under GAAP; (iii) all Contingent Obligations of such
Person (including, without limitation, obligations in respect of take-or-pay
contracts at the time Holdings, the Borrower
11
<PAGE> 17
or any other Subsidiary incurs, or has reason to believe, that any payment
obligation thereunder arises, or will arise, as a result of Holdings', the
Borrower's or such Subsidiary's failure, or intended failure, to take the
product or service intended to be provided thereunder); (iv) Indebtedness of
others secured by any Lien upon property owned by such Person, whether or not
assumed, but only to the extent of such property's fair market value; (v)
liabilities of such Person in respect of unfunded vested benefits under any
Plan; (vi) obligations in respect of bankers acceptances; and (vii) all payment
obligations of such Person under Interest Rate Protection Agreements.
"Interest Expense" shall mean, for any fiscal period of Holdings, the
total interest expense (including, without limitation, interest expense
attributable to Capitalized Leases in accordance with GAAP) of Holdings and its
consolidated Subsidiaries for such period determined in accordance with GAAP
consistently applied.
"Interest Period" shall have the meaning provided in Section 2.8.
"Interest Rate Protection Agreements" shall mean interest rate
protection agreements (including, without limitation, interest rate swaps, caps,
floors, collars, options and similar agreements) and currency swaps and similar
agreements.
"Invitation for Competitive Bid Quotes" shall mean a notice by the
Agent to the Banks soliciting Competitive Bid Quotes, substantially in the form
of Exhibit C hereto.
"Issuing Bank" shall mean The Chase Manhattan Bank.
"L/C Participant" shall mean each Bank in its capacity as a
participant in the Letters of Credit pursuant to Section 2A.
"Letter of Credit" shall mean a letter of credit (and any amendments
thereof) issued by, and subject to terms and conditions acceptable to, the
Issuing Bank on behalf of the Borrower, which letter of credit
12
<PAGE> 18
may be either a documentary letter of credit or a stand-by letter of credit.
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate stated amount of all outstanding Letters of Credit plus (ii)
the aggregate amount of all drawings made under any Letter of Credit for which
the Issuing Bank has not received full reimbursement from the Borrower.
"Letter of Credit Request" has the meaning specified in Section
2A.1(c).
"Leverage Ratio" shall mean the ratio of Total Liabilities to Tangible
Net Worth.
"LIBOR Auction" shall mean a solicitation of Competitive Bid Quotes
setting forth Competitive Bid Margins based on LIBOR pursuant to Section 2.3.
"LIBOR Base Rate" shall mean, with respect to an Interest Period for
LIBOR Loans or Competitive Bid LIBOR Loans, the rate per annum (rounded upwards
to the nearest whole multiple of one-sixteenth of one percent) equal to the
offered quotation to first class banks in the interbank LIBOR market by the
Reference Banks two Business Days prior to the beginning of such Interest Period
at or about 10:00 A.M., New York City time, for delivery on the first day of
such Interest Period for the number of days comprised therein and in an amount
substantially equal to the amount of the LIBOR Loan or Competitive Bid LIBOR
Loans of the Reference Banks to be outstanding during such Interest Period.
"LIBOR Lending Office" shall mean, as to any Bank, the office of such
Bank designated as such on Annex I, or such other office designated by such Bank
from time to time by written notice to the Agent and the Borrower.
"LIBOR Loans" shall mean Revolving Loans made and/or being maintained
at a rate of interest based upon the LIBOR Rate.
"LIBOR Rate" shall mean with respect to each day during an Interest
Period for LIBOR Loans or Competitive Bid LIBOR Loans, a rate per annum
determined for such day in accordance with the following formula (round-
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ed upwards to the nearest whole multiple of 1/100th of one percent):
LIBOR Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"Lien" shall mean any security interest, mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority or other security interest of any kind or nature
whatsoever, including, without limitation, any conditional sale or other title
retention agreement, and any financing lease having substantially the same
effect as any of the foregoing.
"Loan Documents" shall mean this Agreement, the Notes, the Letters of
Credit, the Holdings Guaranty and any guaranty agreement executed and delivered
by a Subsidiary pursuant to Section 6.6(i) hereof, as each may be amended,
modified, restated and in effect from time to time.
"Loans" shall mean and include the Revolving Loans, the Competitive
Bid Loans and the Swingline Loans.
"Mandatory Borrowing" shall have the meaning provided in Section
2.2(b).
"Margin Adjustment Date" shall have the meaning provided in the
definition of Applicable Margin.
"Margin Determination Date" shall have the meaning provided in the
definition of Applicable Margin.
"Margin Stock" shall have the meaning provided such term in Regulation
U and Regulation G of the Federal Reserve Board.
"Material Adverse Effect" shall mean a material adverse effect upon
(i) the business, operations, properties, assets, condition (financial or
otherwise) or liabilities of the Borrower and its Subsidiaries, taken as a whole
or Holdings and its consolidated Subsidiaries, taken as a whole or (ii) the
ability of Holdings or the Borrower to perform, or of the Agent, or any of the
Banks to enforce, any of the Obligations.
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<PAGE> 20
"Materials of Environmental Concern" shall mean and include chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum and petroleum products, coal, coke, coal tar and coal tar byproducts.
"Maturity Date" shall mean November 29, 2001.
"Merger" means the merger, pursuant to the Merger Agreement, of Merger
Sub and the Borrower, with the Borrower as the surviving corporation.
"Merger Agreement" means the Agreement and Plan of Merger dated as of
July 20, 1997, by and among Borrower and Merger Sub.
"Merger Sub" means Rouge Merger Sub, Inc., a Delaware corporation.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" shall mean a Plan which is a "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA.
"Net Income" shall mean for any period, the net income of Holdings, on
a consolidated basis, for such period, in each case taken as a single accounting
period and determined in accordance with GAAP consistently applied.
"New JV" shall have the meaning set forth in Section 6.3(b) and shall
include each partnership and joint venture which was formed prior to the
Restatement Effective Date in compliance with the terms and provisions of the
Existing Credit Agreement.
"Non-Recourse Debt" of any Person shall mean Indebtedness of such
Person for which the sole legal recourse for the collection of such Indebtedness
is solely the property or assets identified in the instruments evidencing or
securing such Indebtedness, provided such property or assets were acquired or
constructed with the proceeds of such Indebtedness and there is no recourse to
any other asset or property of such Person or any other Person.
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<PAGE> 21
"Notes" shall mean and include each Revolving Note, each Swingline
Note and each Competitive Bid Note.
"Notice of Acceptance/Non-Acceptance" shall have the meaning provided
in Section 2.3(f).
"Notice of Borrowing" shall have the meaning provided in Section 2.4.
"Notice of Conversion or Continuation" shall have the meaning provided
in Section 2.10.
"Obligations" shall mean all obligations, liabilities and indebtedness
of every nature of Holdings or the Borrower from time to time owing to the
Agent, the Issuing Bank, any Bank or any L/C Participant arising under or in
connection with this Agreement or any other Loan Document.
"Participant" shall have the meaning provided in Section 9.4(b).
"Payment Date" shall mean the last day of each March, June, September
and December of each year.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
under ERISA, or any successor thereto.
"Person" shall mean and include any individual, partnership, joint
venture, firm, corporation, association, trust or other enterprise or any
government or political subdivision or agency, department or instrumentality
thereof.
"Plan" shall mean any employee benefit plan covered by Title IV of
ERISA, the funding requirements of which:
(i) were the singular or joint (with a member of its
ERISA Controlled Group) responsibility of the Borrower or a member of its
ERISA Controlled Group at any time within the five years immediately
preceding the date hereof,
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<PAGE> 22
(ii) are currently the singular or joint (with a
member of its ERISA Controlled Group) responsibility of the Borrower or a
member of its ERISA Controlled Group, or
(iii) hereafter become the responsibility of the
Borrower or a member of its ERISA Controlled Group,
including any such plans as may have been, or may hereafter be, terminated for
whatever reason.
"Plan Assets" shall mean the fair market value of all Plan assets
allocable to all benefit liabilities under all Plans, as determined as of the
then most recent valuation date for such Plan (on the basis of assumptions used
in the most recent actuarial valuation required in connection with Internal
Revenue Service Form 5500).
"Plant" shall mean the Borrower's steel facility and Double Eagle's
electrogalvanizing facility located at Dearborn, Michigan.
"Power Plant" shall have the meaning given to such term in the
Powerhouse Joint Operating Agreement, dated as of December 15, 1989, between
Ford Motor Company, a Delaware corporation, and the Borrower, as amended and in
effect from time to time.
"Prime Rate" shall mean the rate of interest from time to time
announced by Chase at its principal office at 1 Chase Manhattan Plaza, New York,
New York 10081 as its prime commercial lending rate.
"Pro Rata Share" as to any Bank shall mean a fraction (expressed as a
percentage), the numerator of which shall be the aggregate amount of such Bank's
Revolving Loan Commitment and the denominator of which shall be the Total
Commitment.
"Purchasing Banks" shall have the meaning provided in Section 9.4(c).
"Reference Banks" shall mean Chase and NBD Bank.
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"Regulation D" shall mean Regulation D of the Federal Reserve Board as
from time to time in effect and any successor to all or any portion thereof.
"Reportable Event" shall have the meaning set forth in Section 4043(b)
of ERISA (other than a Reportable Event as to which the provision of 30 days'
notice to the PBGC is waived under applicable regulations), or is the occurrence
of any of the events described in Section 4063(a) of ERISA.
"Required Banks" shall mean Banks holding more than 66-2/3% of the
Total Commitments, provided, however, that if the Commitments shall have been
terminated in full, "Required Banks" shall mean Banks holding more than 66 2/3%
of the then aggregate unpaid principal amount of the Loans.
"Restatement Effective Date" shall mean the date on which the
conditions precedent set forth in Section 3.1 have been satisfied.
"Restructuring" means the series of transactions contemplated by the
Merger Agreement which will result upon completion in Holdings owing all of the
outstanding capital stock of Borrower.
"Revolving Loan Commitment" shall mean on any date, for any Bank, the
amount set forth opposite such Bank's name on Annex I hereto under the heading
"Revolving Loan Commitment," in the column pertaining to such date as such
amount may be reduced from time to time pursuant to Sections 2.11 and 9.4.
"Revolving Loans" shall have the meaning provided in Section 2.1(a).
"Revolving Notes" shall have the meaning provided in Section 2.6(a).
"S&P" means Standard & Poor's Corporation.
"Senior Debt" shall mean, at any time, the aggregate outstanding
principal amount of the Loans.
"Subsidiary" of any Person shall mean and include (i) any corporation
more than 50% of whose stock
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<PAGE> 24
of any class or classes having by the terms thereof ordinary voting power to
elect a majority of the directors of such corporation (irrespective of whether
or not at the time stock of any class or classes of such corporation shall have
or might have voting power by reason of the happening of any contingency) is at
the time owned by such Person directly or indirectly through Subsidiaries and
(ii) any partnership, association or other entity in which such Person,
directly or indirectly through Subsidiaries, is either a general partner or has
greater than a 50% equity interest at the time. Unless the context otherwise
requires, references herein to "Subsidiary" shall mean the direct and indirect
Subsidiaries of Holdings, including the Borrower.
"Swingline Commitment" shall mean an aggregate principal amount of
$10,000,000, as such amount may be reduced from time to time pursuant to
Sections 2.11 and 9.4.
"Swingline Lender" shall mean Chase in its capacity as lender of
Swingline Loans.
"Swingline Loans" shall have the meaning ascribed thereto in Section
2.2.
"Tangible Net Worth" shall mean, at any time, the total assets of
Holdings, on a consolidated basis, as determined in accordance with GAAP, less
the total liabilities of Holdings, on a consolidated basis, as determined in
accordance with GAAP, less the book value of all assets of Holdings, on a
consolidated basis, that would be treated as intangibles in accordance with GAAP
other than deferred tax assets.
"Termination Event" shall mean (i) the initiation of any action by
Holdings, the Borrower, any member of their ERISA Controlled Group or any ERISA
Plan fiduciary to terminate an ERISA Plan or the treatment of an amendment to an
ERISA Plan as a termination under ERISA, or (ii) the institution of proceedings
by the PBGC under Section 4042 of ERISA to terminate an ERISA Plan or to appoint
a trustee to administer any ERISA Plan.
"Total Commitment" shall mean, at any time, the sum of the Revolving
Loan Commitments of all the Banks at
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<PAGE> 25
such time, which, on the Closing Date, shall be $100,000,000.
"Total Debt" shall mean, without duplication: (i) all obligations of
Holdings and any of its consolidated Subsidiaries for borrowed money and for the
deferred purchase price of property or services (other than trade payables
incurred in the ordinary course of business), and obligations (including the
current portion thereof) evidenced by bonds, debentures, notes or other similar
instruments; (ii) all Contingent Obligations of Holdings and any of its
consolidated Subsidiaries (including, without limitation, obligations in respect
of take-or-pay contracts at the time Holdings, the Borrower or any other
Subsidiary incurs, or has reason to believe, that any payment obligation
thereunder arises, or will arise, as a result of Holdings', the Borrower's or
such Subsidiary's failure, or intended failure, to take the product or service
intended to be provided thereunder); (iii) indebtedness of others secured by any
lien upon property owned by Holdings or any of its consolidated Subsidiaries,
whether or not assumed, but only to the extent of such property's fair market
value; (iv) all payment obligations of Holdings or any of its consolidated
Subsidiaries under any Interest Rate Protection Agreements; and (v) all
obligations in respect of the redemption of any preferred stock of Holdings, the
Borrower or any of its other consolidated Subsidiaries and all non-cash
cumulative dividends payable in respect of such preferred stock, provided that
Non-Recourse Debt shall be excluded for purposes of this definition.
"Total Liabilities" shall mean, at any time, all consolidated
liabilities of Holdings, as determined in accordance with GAAP, and in any event
including all reserves, all deferred taxes, all minority interests in net assets
of consolidated Subsidiaries and other deferred items.
"Transfer Supplement" shall have the meaning provided in Section
9.4(c).
"Transferee" shall have the meaning provided in Section 9.4(d).
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<PAGE> 26
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or a LIBOR Loan.
"Unfunded Benefit Liabilities" means with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all benefit
liabilities under such Plan as defined in Section 4001(a)(16) of ERISA, exceeds
(ii) the fair market value of all Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plan (on the basis
of assumptions used in the most recent actuarial valuation required in
connection with Internal Revenue Service Form 5500).
Section 1.2 Terms Generally. The definitions in Section 1.1 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed to be references to Articles and Sections of, and Exhibits and Schedules
to, this Agreement unless the context shall otherwise require. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP as
in effect from time to time; provided, however, that for purposes of making any
determination required by the definition of Applicable Margin or Section 6, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP as in effect on
the date of this Agreement applied on a basis consistent with the application
used in the financial statements referred to in Section 4.5.
SECTION 2. AMOUNT AND TERMS OF CREDIT FACILITIES
Section 2.1 Revolving Loans. (a) Subject to and upon the terms and
conditions herein set forth, each Bank severally and not jointly agrees, at any
time and from time to time on and after the Restatement Effective
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<PAGE> 27
Date to the Business Day immediately preceding the Maturity Date, to make
revolving loans (collectively, "Revolving Loans") to the Borrower, which
Revolving Loans shall not exceed in aggregate principal amount at any time
outstanding the Revolving Loan Commitment of such Bank at such time.
(b) Revolving Loans may be voluntarily prepaid pursuant to Section
2.12, and, subject to the other provisions of this Agreement, any amounts so
prepaid may be reborrowed. Each Revolving Loan Bank's Revolving Loan Commitment
shall expire, and each Revolving Loan shall mature on, the Maturity Date,
without further action on the part of the Banks or the Agent.
(c) Each Borrowing of Revolving Loans shall be in the aggregate
minimum amount of $1,000,000 or any integral multiple of $100,000 in excess
thereof.
(d) Notwithstanding anything contained herein to the contrary, at
no time shall the aggregate principal amount of the sum of (i) Revolving Loans
outstanding, plus (ii) the Letter of Credit Outstandings, plus (iii) the
outstanding Swingline Loans plus (iv) the outstanding Competitive Bid Loans
exceed the Total Commitment then in effect.
Section 2.2 Swingline Loans. (a) Subject to and upon the terms and
conditions herein set forth, the Swingline Lender agrees to make at any time and
from time to time on or after the Restatement Effective Date to the Business Day
immediately preceding the Maturity Date, a loan or loans to the Borrower (each a
"Swingline Loan," and, collectively, the "Swingline Loans"), which Swingline
Loans (i) shall be made and maintained solely as Base Rate Loans, (ii) may be
repaid and reborrowed in accordance with the provisions hereof and (iii) shall
not exceed in aggregate principal amount at any time outstanding the lesser of
(x) $10,000,000 and (y) the difference between (A) the Total Commitment then in
effect and (B) the sum of the aggregate principal amount of Revolving Loans
outstanding plus the Competitive Bid Loans outstanding plus the Letter of Credit
Outstandings. The Swingline Lender will not make a Swingline Loan after it has
received written notice from the Required Banks that one or more of the
applicable conditions to Borrowings specified in Section 3.2 are not then satis-
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fied, or the Agent has given written notice of such matters (or of the
occurrence of an Event of Default) to the Swingline Lender.
(b) In the event that any Swingline Loan remains outstanding for
more than five (5) Business Days, The Swingline Lender may, thereafter, in its
sole discretion, give notice to the Banks that its outstanding Swingline Loans
shall be funded with a Borrowing of Revolving Loans (provided that each such
notice shall be deemed to have been automatically given upon the occurrence of
an Event of Default under Section 7.1(e) or upon the exercise of any of the
remedies provided in Section 7.2), in which case a Borrowing of Revolving Loans
constituting Base Rate Loans (each such Borrowing, a "Mandatory Borrowing")
shall be made on the immediately succeeding Business Day by all Banks pro rata
based on each Bank's Pro Rata Share, and the proceeds thereof shall be applied
directly to repay the Swingline Lender for such outstanding Swingline Loans.
Each Bank hereby irrevocably agrees to make Base Rate Loans upon one Business
Day's notice pursuant to each Mandatory Borrowing in the amount and in the
manner specified in the preceding sentence and on the date specified in writing
by the Swingline Lender notwithstanding (i) that the amount of the Mandatory
Borrowing may not comply with the minimum borrowing amount otherwise required
hereunder (provided that such Mandatory Borrowing shall be subject to each
Bank's Revolving Loan Commitment then in effect except to the extent set forth
in subclause (iv) of this Section 2.2(b)), (ii) whether any conditions specified
in Section 3.2 are then satisfied, (iii) whether a Default or an Event of
Default has occurred and is continuing and (iv) any reduction in the Total
Commitment after any such Swingline Loans were made. In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code in respect of the Borrower), each Bank
(other than the Swingline Lender) hereby agrees that it shall forthwith purchase
from the Swingline Lender (without recourse or warranty) such assignment of the
outstanding Swingline Loans as shall be necessary to cause the Banks to share in
such Swingline Loans ratably based upon their respective Pro Rata Shares,
provided that all interest payable on the Swingline Loans shall be for the
account of the Swingline Lender until the date the re-
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spective assignment is purchased and, to the extent attributable to the
purchased assignment, shall be payable to the Bank purchasing same from and
after such date of purchase.
Section 2.3 Competitive Bid Loans.
(a) The Competitive Bid Option. In addition to Revolving Loans
pursuant to Section 2.1 and Swingline Loans pursuant to Section 2.2, the
Borrower may, as set forth in this Section 2.3, request the Banks during the
period from and including the Restatement Effective Date to but not including
the Business Day immediately preceding the Maturity Date to make offers to make
Competitive Bid Loans to the Borrower. The Banks may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept any such offers in the manner set forth in this Section
2.3. The Competitive Bid Loans may be Competitive Bid Absolute Rate Loans or
Competitive Bid LIBOR Loans (each a "type" of Competitive Bid Loan).
(b) Competitive Bid Quote Request. When the Borrower wishes to
request offers to make Competitive Bid Loans, it shall transmit to the Agent a
request substantially in the form of Exhibit B hereto (a "Competitive Bid Quote
Request"), together with the payment of a non-refundable administrative fee of
$1,500 for the account of the Agent, so as to be received (x) no later than
10:00 a.m. New York time on the fourth Business Day prior to the date of
borrowing proposed therein, in the case of a LIBOR Auction or (y) no later than
10:00 a.m. New York time on the Business Day prior to the date of borrowing
proposed therein, in the case of an Absolute Rate Auction specifying:
(A) the proposed date of borrowing, which shall be a Business
Day;
(B) the aggregate amount of such borrowing, which shall be in
a minimum amount of $5,000,000 or a larger whole multiple of $1,000,000 up
to a maximum amount of $25,000,000 in the aggregate for Competitive Bid
Loans outstanding at any one time;
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(C) the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period; and
(D) whether the Competitive Bid Quotes requested are to set
forth a Competitive Bid Margin or a Competitive Bid Absolute Rate.
The Borrower may request offers to make Competitive Bid Loans for more than one
but no more than three Interest Periods in a single Competitive Bid Quote
Request.
(c) Invitation for Competitive Bid Quotes. Promptly upon receipt of
a Competitive Bid Quote Request, the Agent shall send to the Banks an Invitation
for Competitive Bid Quotes, which shall constitute an invitation by the Borrower
to each Bank to submit Competitive Bid Quotes offering to make the Competitive
Bid Loans to which such Competitive Bid Quote Request relates in accordance with
this Section 2.3.
(d) Submission and Contents of Competitive Bid Quotes.
(i) Each Bank may submit a Competitive Bid Quote containing
an offer or offers to make Competitive Bid Loans in response to any
Invitation for Competitive Bid Quotes. Each Competitive Bid Quote must
comply with the requirements of this Section 2.3(d) and must be submitted
to the Agent no later than (A) 9:30 a.m. New York time on the third
Business Day prior to the proposed date of borrowing in the case of a LIBOR
Auction or (B) 9:30 a.m. New York time on the proposed date of borrowing,
in the case of an Absolute Rate Auction; provided, that Competitive Bid
Quotes submitted by the Agent in its capacity as a Bank may be submitted,
and may only be submitted, if the Agent notifies the Borrower of the terms
of the offer or offers contained therein not later than (A) 9:00 a.m. New
York time on the third Business Day prior to the proposed date of
borrowing, in the case of a LIBOR Auction or (B) 9:00 a.m. New York time
on the proposed date of borrowing, in the case of an Absolute Rate Auction.
Subject to Sections 2.17 and 3.2, any Competitive Bid Quote so made shall
be irrevocable except with the written consent of the Agent given on the
instructions of
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the Borrower. Any Bank electing not to submit a Competitive Bid Quote
shall notify the Agent at least one hour before the deadline for submitting
Competitive Bid Quotes of its election not to do so; provided, that any
Bank which fails to submit a Competitive Bid Quote by the applicable
deadline referred to in this Section 2.3(d) shall be deemed to have so
notified the Agent.
(ii) A Competitive Bid Quote may set forth up to five separate
offers by the quoting Bank with respect to each Interest Period specified
in the related Invitation for Competitive Bid Quotes. Each Competitive Bid
Quote shall specify:
(1) the proposed date of borrowing and the Interest Period
therefor;
(2) the principal amount of the Competitive Bid Loan for
which each such offer is being made, which principal amount (i) may be
equal to, greater than or less than the Revolving Loan Commitment of the
quoting Bank, (ii) must be $5,000,000 or a larger whole multiple of
$1,000,000, (iii) may not exceed the principal amount of Competitive Bid
Loans for which offers were requested, and (iv) may be subject to an
aggregate limitation as to the principal amount of Competitive Bid Loans
for which offers being made by such quoting Bank may be accepted;
(3) in the case of a LIBOR Auction, the margin above or
below applicable LIBOR Rate (the "Competitive Bid Margin") offered for each
such Competitive Bid Loan, expressed as a percentage (specified to the
nearest 1/1,000th of 1%) to be added to or subtracted from applicable LIBOR
Rate;
(4) in the case of an Absolute Rate Auction, the rate of
interest per annum (specified to the nearest 1/1,000th of 1%) (the "
Competitive Bid Absolute Rate") offered for each such Competitive Bid Loan;
and
(5) the identity of the quoting Bank.
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(iii) Any Competitive Bid Quote shall be disregarded if it:
(i) is not substantially in conformity with the
format described in the relevant Invitation for Competitive Bid Quotes or
does not specify all of the information required by Section 2.3(d)(ii);
(ii) contains qualifying, conditional or similar
language, except as permitted in Section 2.3(d)(ii)(2)(iv);
(iii) proposes terms other than or in addition to
those set forth in the applicable Invitation for Competitive Bid Quotes; or
(iv) arrives after the time set forth in Section
2.3(d)(i).
(e) Notice to Borrower. Not later than (i) 10:00 a.m. New York
time on the third Business Day prior to the proposed date of borrowing in the
case of a LIBOR Auction or (ii) 10:00 a.m. New York time on the proposed date of
borrowing in the case of an Absolute Rate Auction, the Agent shall promptly
notify the Borrower of the terms of (x) any Competitive Bid Quote submitted by
any Bank that is in accordance with Section 2.3(d) and (y) any Competitive Bid
Quote that amends, modifies or is otherwise inconsistent with a previous
Competitive Bid Quote submitted by such Bank with respect to the same
Competitive Bid Quote Request. Any such subsequent Competitive Bid Quote shall
be disregarded by the Agent unless such subsequent Competitive Bid Quote is
submitted solely to correct a manifest error in such former Competitive Bid
Quote. The Agent's notice to the Borrower shall specify (A) the aggregate
principal amount of Competitive Bid Loans for which offers have been received
for each Interest Period specified in the related Competitive Bid Quote Request,
(B) the respective principal amounts and Competitive Bid Margins or Competitive
Bid Absolute Rates, as the case may be, so offered and (C) if applicable,
limitations on the aggregate principal amount of Competitive Bid Loans for which
offers in any single Competitive Bid Quote may be accepted.
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<PAGE> 33
(f) Acceptance and Notice by Borrower. Not later than (i) 10:45
a.m. New York time on the third Business Day prior to the proposed date of
borrowing, in the case of a LIBOR Auction or (ii) 10:45 a.m. New York time on
the proposed date of borrowing, in the case of an Absolute Rate Auction, the
Borrower shall notify the Agent of its acceptance or non-acceptance of the
offers so notified to it pursuant to Section 2.3(e) substantially in the form of
Exhibit E hereto (a "Notice of Acceptance/Non-Acceptance") (and the Agent shall
so notify each Bank making an offer); provided, that if the Borrower shall fail
to so notify the Agent by the times set forth above, the Borrower shall be
deemed to have notified the Agent of its non-acceptance of each such offer. In
the case of acceptance, each such notice shall specify the aggregate principal
amount of offers for each Interest Period that are accepted. The Borrower may
accept any Competitive Bid Quote in whole or in part; provided that:
(A) the aggregate principal amount of each borrowing of
Competitive Bid Loans may not exceed the applicable amount set forth in the
related Competitive Bid Quote Request;
(B) the principal amount of each borrowing of
Competitive Bid Loans must be $5,000,000 or a larger whole multiple of
$1,000,000;
(C) acceptance of offers may only be made on the basis
of ascending Competitive Bid Margins or Competitive Bid Absolute Rates, as
the case may be; and
(D) the Borrower may not accept any offer that is
described in Section 2.3(d)(iii) or that otherwise fails to comply with the
requirements of this Agreement.
(g) Allocation. If offers are made by two or more Banks with the
same Competitive Bid Margins or Competitive Bid Absolute Rates, as the case may
be, for a greater aggregate principal amount than the amount in respect of which
such offers are accepted for the related Interest Period, the principal amount
of Competitive Bid Loans in respect of which such offers are accepted shall be
allocated by the Borrower among such Banks as nearly
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<PAGE> 34
as possible (in such multiples, not greater than $1,000,000, as the Borrower
may deem appropriate) in proportion to the aggregate principal amounts of such
offers. The Borrower shall promptly notify the Agent, and the Agent shall
promptly notify each such Bank, of any allocation pursuant to this Section
2.3(g).
(h) Maximum Amounts. Notwithstanding anything to the contrary set
forth herein, in no event shall the aggregate outstanding principal amount of
Competitive Bid Loans exceed the lesser of (i) $25,000,000 and (ii) the
difference between (A) the Total Commitment then in effect and (B) the sum of
the aggregate principal amount of Revolving Loans outstanding plus the Swingline
Loans outstanding plus the Letter of Credit Outstandings.
(i) Copies to Banks. Upon written request by a Bank to the Agent,
the Agent shall, in connection with Borrower's acceptance of the offers to make
Competitive Bid Loans pursuant to a Notice of Acceptance/Non-Acceptance, provide
such Bank with the range of the quotes received in connection therewith.
Section 2.4 Notice of Borrowing. (a) Whenever the Borrower
desires to borrow Revolving Loans hereunder, it shall give the Agent at the
Agent's Office prior to 10:00 A.M., New York City time, written notice on the
date of each requested Base Rate Loan, and at least three Business Days' prior
written notice of each LIBOR Loan to be made hereunder. Each such notice (a
"Notice of Borrowing") shall be irrevocable and shall specify (i) the aggregate
principal amount of the requested Loans, (ii) the date of Borrowing (which shall
be a Business Day), and (iii) whether such Loans shall consist of Base Rate
Loans or LIBOR Loans and, if LIBOR Loans, the initial Interest Period to be
applicable thereto (provided, that no Loans may be requested or made when any
Default or Event of Default has occurred and is continuing). If a Notice of
Borrowing fails to specify the type of Loans to be made, such Loans shall be
made as Base Rate Loans.
(b) Promptly after receipt of a Notice of Borrowing, the Agent
shall provide each Bank with a copy thereof and inform each Bank as to its Pro
Rata Share of the Revolving Loans requested thereunder.
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(c) Whenever the Borrower desires to make a Borrowing of
Swingline Loans hereunder, it shall give the Swingline Lender not later than
3:00 P.M. (New York time) on the day such Swingline Loan is to be made, written
notice (or telephonic notice promptly confirmed in writing) of each Swingline
Loan to be made hereunder. Each such notice shall be irrevocable and shall
specify in each case (x) the date of such Borrowing (which shall be a Business
Day) and (y) the aggregate principal amount of the Swingline Loan to be made
pursuant to such Borrowing.
Section 2.5 Disbursement of Funds. (a) (i) No later than 1:00
P.M., New York City time, on the date specified in each Notice of Borrowing,
each Bank will make available its Pro Rata Share of the Revolving Loans
requested to be made on such date, in U.S. dollars and immediately available
funds, at the Agent's Office, provided that all Swingline Loans shall be made
available by the Swingline Lender no later than 5:00 P.M. (New York time) on the
date so requested. After the Agent's receipt of the proceeds of such Loans, the
Agent will make available to the Borrower by depositing in the Borrower's
account at the Agent's Office the aggregate of the amounts so made available in
the type of funds actually received.
(ii) No later than 1:00 P.M., New York City time, on the date
specified in each Competitive Bid Quote Request, the Bank making such
Competitive Bid Loan pursuant to Section 2.3 will make available such
Competitive Bid Loan to be made on such date, in U.S. dollars and immediately
available funds, at the Agent's Office. After the Agent's receipt of the
proceeds of such Loan, the Agent will make available to the Borrower by
depositing in the Borrower's account at the Agent's Office the aggregate of the
amounts so made available in the type of funds actually received.
(b) Unless the Agent shall have been notified by any Bank
prior to the date of a Borrowing that such Bank does not intend to make
available to the Agent its portion of the Loans to be made on such date, the
Agent may assume that such Bank has made such amount available to the Agent on
such date and the Agent in its sole discretion may, in reliance upon such
assumption, make available to the Borrower a corresponding amount.
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If such corresponding amount is not in fact made available to the Agent by such
Bank and the Agent has made such amount available to the Borrower, the Agent
shall be entitled to recover such corresponding amount on demand from such
Bank. If such Bank does not pay such corresponding amount forthwith upon the
Agent's demand therefor, the Agent shall promptly notify the Borrower and the
Borrower shall immediately repay such corresponding amount to the Agent. The
Agent shall also be entitled to recover from such Bank or the Borrower, as the
case may be, interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the Agent to the
Borrower to the date such corresponding amount is recovered by the Agent, at a
rate per annum on such corresponding amount equal to (x) if paid by such Bank,
the overnight Federal Funds Rate or (y) if paid by the Borrower, the then
applicable rate of interest, calculated in accordance with Section 2.7, for the
Revolving Loans. Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its commitments hereunder or to prejudice any rights
which the Borrower may have against any Bank as a result of any default by such
Bank hereunder.
Section 2.6 Notes. (a) The Borrower's obligation to pay the
principal of, and interest on, each Bank's Loans shall be evidenced by (i) in
the case of a Bank's Revolving Loans, a promissory note (a "Revolving Note")
duly executed and delivered by the Borrower substantially in the form of Exhibit
A-1 hereto with blanks appropriately completed in conformity herewith; (ii) in
the case of a Bank's Competitive Bid Loan, a promissory note (a "Competitive Bid
Note") duly executed and delivered by the Borrower substantially in the form of
Exhibit A-2 hereto with blanks appropriately completed in conformity herewith;
and (iii) in the case of the Swingline Lender's Swingline Loans, a promissory
note (a "Swingline Note") duly executed and delivered by the Borrower
substantially in the form of Exhibit A-3 hereto in a principal amount equal to
the Swingline Lender's Swingline Commitment, with blanks appropriately completed
in conformity herewith. Each Note issued to a Bank shall (x) be payable to the
order of such Bank, (y) be dated the Restatement Effective Date, and (z) mature
on the Maturity Date or the end of the Interest Period for such Competitive Bid
Loan, as applicable.
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(b) Each Bank is hereby authorized, at its option,
either (i) to endorse on the schedule attached to its Note (or on a continuation
of such schedule attached to such Note and made a part thereof) an appropriate
notation evidencing the date and amount of each Loan evidenced thereby and the
date and amount of each principal and interest payment in respect thereof, or
(ii) to record such Loans and such payments in its books and records. Such
schedule or such books and records, as the case may be, shall constitute prima
facie evidence of the accuracy of the information contained therein, provided
that the failure of such Bank to make any such endorsement or recordation shall
not affect the obligations of the Borrower hereunder or under the Notes.
Section 2.7 Interest. (a) The Borrower agrees to pay interest
in respect of the unpaid principal amount of each Base Rate Loan from the date
of the making of such Loan until such Loan shall be paid in full at a rate per
annum which shall be equal to the sum of the Applicable Margin plus the Base
Rate in effect from time to time, such rate to change as and when the Base Rate
or Applicable Margin changes, such interest to be computed on the basis of a
year of 365 or 366 days, as the case may be.
(b) The Borrower agrees to pay interest in respect of
the unpaid principal amount of each LIBOR Loan for each Interest Period therefor
from the date of the making of such Loan until such Loan shall be paid in full
at a rate per annum which shall be equal to the sum of the Applicable Margin
plus the relevant LIBOR Rate for such Interest Period, such interest to be
computed on the basis of a 360-day year. Changes in the Applicable Margin with
respect to LIBOR Loans shall be effective only as to LIBOR Loans borrowed on or
after the effective date of such change, or in the case of LIBOR Loans continued
pursuant to Section 2.10, only to such Loans continued on or after the
effective date of such change or in the case of Loans converted into LIBOR
Loans, only to such Loans converted on or after the effective date of such
change.
(c) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Competitive Bid LIBOR Loan from the date of the
making of such Loan until such Loan is paid in full at a rate equal to
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LIBOR Rate for such Loan for the Interest Period therefor plus or minus the
Competitive Bid Margin quoted by the Bank making such Loan in accordance with
Section 2.3(d).
(d) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Competitive Bid Absolute Rate Loan from the date of the
making of such Loan until such Loan is paid in full at a rate equal to the
Competitive Bid Absolute Rate for such Loan for the Interest Period therefor
quoted by the Banks making such Loan in accordance with Section 2.3(d).
(e) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan shall bear interest at a rate per annum (the
"Default Rate") equal to the sum of two percent (2%) plus the interest rate
otherwise applicable hereunder to such principal amount in effect from time to
time (or, if such overdue payment is not relating to a Loan, 2% above the Base
Rate then in effect).
(f) Interest on any Loan shall accrue from and including the date
of the Borrowing thereof to but excluding the date of any repayment thereof
(provided that any Loan borrowed and repaid on the same day shall accrue one
day's interest) and shall be payable (i) in respect of each Base Rate Loan, in
arrears on each Payment Date, (ii) in respect of each LIBOR Loan and Competitive
Bid Loan, on the last day of each Interest Period applicable to such Loan and,
in the case of an Interest Period of six months, on the date occurring three
months from the first day of such Interest Period and on the last day of such
Interest Period and (iii) in the case of all Loans, on any prepayment or
conversion (on the amount prepaid or converted), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(g) The Agent shall, upon determining the LIBOR Rate for any
Interest Period, promptly notify the Borrower and the Banks thereof.
(h) Each Reference Bank agrees to make the quotes available to the
Agent to permit the Agent to determine the LIBOR Base Rate.
Section 2.8 Interest Periods. (a) The Borrower shall, in any Notice
of Borrowing, in any Competi-
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tive Bid Quote Request in respect of the making of a LIBOR Loan or of a
Competitive Bid Loan or in any Notice of Conversion or Continuation in respect
of the conversion into or continuation of a LIBOR Loan, select the interest
period (each an "Interest Period") applicable to such Loan, which Interest
Period shall, at the option of the Borrower, be either a one-month, two-month,
three-month or six-month period for LIBOR Loans or Competitive Bid LIBOR Loans
or any period not exceeding 360 days for Competitive Bid Absolute Rate Loans,
provided that:
(i) the initial Interest Period for any LIBOR Loan,
Competitive Bid Absolute Rate Loan or Competitive Bid LIBOR Loan shall
commence on the date of the making of such Loan (including the date of any
conversion from a Base Rate Loan) and each Interest Period occurring
thereafter shall commence on the date on which the next preceding Interest
Period expires, provided that each Competitive Bid Absolute Rate Loan and
Competitive Bid LIBOR Loan shall mature and be due and payable at the end
of the Interest Period applicable thereto;
(ii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided, however, that if any Interest Period
would otherwise expire on a day which is not a Business Day but is a day of
the month after which no further Business Day occurs in such month, such
Interest Period shall expire on the next preceding Business Day;
(iii) if any Interest Period begins on a day for which
there is no numerically corresponding day in the calendar month at the end
of such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iv) no Interest Period in respect of any Loan shall extend
beyond the Maturity Date; and
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(v) if upon the expiration of any Interest Period, the
Borrower has failed to elect a new Interest Period to be applicable to the
respective LIBOR Loan as provided above, the Borrower shall be deemed to
have elected to convert such LIBOR Loans into Base Rate Loans effective as
of the expiration date of such current Interest Period.
Section 2.9 Minimum Amount of LIBOR Loans. All borrowings,
conversions, continuations, payments, prepayments (other than prepayments made
pursuant to Section 2.13) and selections of Interest Periods hereunder shall be
made or selected so that, after giving effect thereto, (i) the aggregate
principal amount of any Borrowing comprised of LIBOR Loans shall not be less
than $1,000,000 or an integral multiple of $100,000 in excess thereof, and (ii)
there shall be no more than eight (8) Borrowings comprised of LIBOR Loans
outstanding at any time.
Section 2.10 Conversion or Continuation. (a) Subject to the other
provisions hereof, the Borrower shall have the option (i) to convert at any time
all or any part of outstanding Base Rate Loans (other than Swingline Loans and
Competitive Bid Absolute Rate Loans) to LIBOR Loans, or (ii) to convert all or
any part of outstanding LIBOR Loans which comprise part of the same Borrowing to
Base Rate Loans, on the expiration date of the Interest Period applicable
thereto, or (iii) to continue all or any part of outstanding LIBOR Loans which
comprise part of the same Borrowing as LIBOR Loans for an additional Interest
Period, on the expiration of the Interest Period applicable thereto; provided
that (A) no Loan may be continued as, or be converted into, a LIBOR Loan when
any Default or Event of Default has occurred and is continuing and (B) no
Competitive Bid Loans may be so converted or continued.
(b) In order to elect to convert or continue a Loan
under this Section 2.10, the Borrower shall deliver irrevocable written notice
thereof (a "Notice of Conversion or Continuation") to the Agent no later than
10:00 A.M., New York City time, (i) at least one Business Day in advance of the
proposed conversion date in the case of a
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conversion to a Base Rate Loan and (ii) at least three Business Days in advance
of the proposed conversion or continuation date in the case of a conversion to,
or a continuation of, a LIBOR Loan. A Notice of Conversion or Continuation
shall specify (w) the requested conversion or continuation date (which shall be
a Business Day), (x) the Borrowing to be converted or continued, (y) whether a
conversion or continuation is requested, and (z) in the case of a conversion
to, or a continuation of, a LIBOR Loan, the requested Interest Period.
Promptly after receipt of a Notice of Conversion or Continuation under this
Section 2.10(b), the Agent shall provide each Bank with a copy thereof.
Section 2.11 Voluntary Reduction of Commitments. Upon at least three
Business Days' prior irrevocable written notice to the Agent (which notice the
Agent shall promptly transmit to each of the Banks), the Borrower shall have the
right, without premium or penalty, to permanently terminate each Bank's Pro Rata
Share of the unutilized portion of the Total Commitment, in part or in whole,
provided that any such partial reduction shall be in the minimum aggregate
amount of $1,000,000 or any integral multiple of $100,000 in excess thereof;
provided, however, that the Total Commitment may at no time be reduced to an
amount less than the sum of the outstanding Swingline Loans, Competitive Bid
Loans and Letter of Credit Outstandings.
Section 2.12 Voluntary Prepayments. The Borrower shall have the
right to prepay, without premium or penalty, the Loans in whole or in part from
time to time on the following terms and conditions: (i) the Borrower shall give
the Agent written notice, which notice shall be irrevocable, of its intent to
prepay the Loans, at least three Business Days prior to a prepayment of LIBOR
Loans and at least one Business Day prior to a prepayment of Base Rate Loans,
which notice shall specify the amount of such prepayment and what Types and
Facilities of Loans are to be prepaid and, in the case of LIBOR Loans, the
specific Borrowing(s) pursuant to which made, and which notice the Agent shall
promptly transmit to each of the Banks, (ii) each prepayment shall be in an
aggregate principal amount of $1,000,000 or any integral multiple of $100,000 in
excess thereof, and (iii) prepayments of LIBOR Loans and Competitive Bid LIBOR
Loans made pursuant to this Section may only be made on the last day of an
Interest Period applicable thereto unless accompanied by such amounts required
pursuant to Section 2.18. Notice having thus been given the amount of any such
prepayment
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shall mature and become due and payable on the date specified in such notice.
Section 2.13 Mandatory Prepayments.
(a) On each date on which the amount of aggregate outstanding
Revolving Loans plus the outstanding Competitive Bid Loans, plus the outstanding
Swingline Loans, plus the Letter of Credit Outstandings exceeds the Total
Commitment then in effect (including any such date on which the Total Commitment
is reduced or terminated pursuant to Section 2.11 after giving effect to such
reduction or termination), the Borrower shall immediately prepay Loans to the
extent of such excess.
(b) Each Competitive Bid Loan shall mature and be due and
payable at the end of the Interest Period applicable thereto.
Section 2.14 Application of Prepayments. All prepayments of the
Loans required by Section 2.13(a) shall be applied (in each case accompanied by
prepayment of all interest accrued on the amount prepaid) first, to prepay the
Swingline Loans until such Swingline Loans shall have been repaid in full,
second, to prepay the Revolving Loans until such Revolving Loans shall have been
repaid in full, which prepayments shall be applied first to Base Rate Loans and
then LIBOR Loans and third, to all other outstanding Obligations then due and
payable.
Section 2.15 Method and Place of Payment. (a) Except as otherwise
specifically provided herein, all payments and prepayments under this Agreement
and the Notes shall be made to the Agent for the account of the Banks entitled
thereto not later than 12:00 noon, New York City time, on the date when due and
shall be made in lawful money of the United States of America in immediately
available funds at the Agent's Office, and any funds received by the Agent after
such time shall, for all purposes hereof (including the following sentence), be
deemed to have been paid on the next succeeding Business Day. Except as
otherwise specifically provided herein, the Agent shall thereafter cause to be
promptly distributed to each such Bank in like funds its Pro Rata Share of
payments so received.
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(b) Whenever any payment to be made hereunder or under any
Note shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
(c) All payments made by the Borrower hereunder and under the
other Loan Documents shall be made irrespective of, and without any reduction
for, any setoff or counterclaim.
Section 2.16 Fees. The Borrower agrees to pay to the Agent for the
account of each Bank a facility fee, computed at the per annum rate of 1/5 of 1%
on such Bank's Revolving Loan Commitment, from and including the Restatement
Effective Date to but not including the Maturity Date, payable quarterly in
arrears on each Payment Date and on the Maturity Date or such earlier date, if
any, on which the Revolving Loan Commitment shall terminate in accordance with
the terms hereof. Such fees shall be computed on the basis of a 360-day year.
Section 2.17 Interest Rate Unascertainable, Increased Costs,
Illegality. (a) In the event that the Agent, in the case of clause (i) below,
or any Bank, in the case of clauses (ii) and (iii) below, shall have determined
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto):
(i) on any date for determining the LIBOR Rate for any
Interest Period, that by reason of any changes arising after the
Restatement Effective Date affecting the interbank LIBOR market, adequate
and fair means do not exist for ascertaining the applicable interest rate
on the basis provided for in the definition of LIBOR Rate; or
(ii) at any time that the relevant LIBOR Rate applicable to
any of its Loans shall not represent the effective pricing to such Bank for
funding or maintaining a LIBOR Loan or Competitive Bid LIBOR Loan, or such
Bank shall incur increased costs or reductions
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in the amounts received or receivable hereunder in respect of any LIBOR
Loan, in any such case because of any change since the Restatement
Effective Date in any applicable law or governmental rule, regulation,
guideline or order or any interpretation thereof or any directive or
request related thereto and including the introduction of any new law or
governmental rule, regulation, guideline or order (such as for example but
not limited to a change in official reserve requirements, but, in all
events, excluding reserves required under Regulation D of the Federal
Reserve Board to the extent included in the computation of the LIBOR Rate)
whether or not having the force of law and/or any other circumstances
affecting such Bank or the interbank LIBOR market or the position of such
Bank in such market as a result of any such change; or
(iii) at any time that the making or continuance by any Bank of
any LIBOR Loan or Competitive Bid LIBOR Loan has become unlawful by
compliance by such Bank in good faith with any law or governmental rule,
regulation, guideline or order;
then, and in any such event, the Agent or such Bank shall, promptly after
making such determination, give notice (by telephone promptly confirmed in
writing) to the Borrower and (if applicable) the Agent of such determination
(which notice the Agent shall promptly transmit to each of the Banks).
Thereafter (x) in the case of clause (i) above, the Borrower's right to request
LIBOR Loans or Competitive Bid LIBOR Loans shall be suspended, and any Notice
of Borrowing given by the Borrower with respect to any Borrowing of LIBOR Loans
or Competitive Bid LIBOR Loans or any Notice of Conversion or Continuation
given by the Borrower with respect to any Borrowing of LIBOR Loans, in each
case which has not yet been made shall be deemed cancelled and rescinded by the
Borrower, (y) in the case of clause (ii) above, the Borrower shall upon notice
by the Bank in accordance with Section 2.21 pay to such Bank, such additional
amounts (in the form of an increased rate of interest, or a different method of
calculating interest, or otherwise, as such Bank in its reasonable discretion
shall determine) as shall be re-
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quired to compensate such Bank for such increased costs or reduction in amounts
received or receivable hereunder and (z) in the case of clause (iii) above, the
Borrower's right to request LIBOR Loans or Competitive Bid LIBOR Loans
thereafter shall be suspended, and Borrower shall take one of the actions
specified in clause (b) below as promptly as possible and, in any event, within
the time period required by law.
(b) In the case of any LIBOR Loan or requested LIBOR Loan or
Competitive Bid LIBOR Loan affected by the circumstances described in clause
(a)(ii) above, the Borrower may, and in the case of any LIBOR Loan or
Competitive Bid LIBOR Loan affected by the circumstances described in clause
(a)(iii) above the Borrower shall, either (x) if any such LIBOR Loan or
Competitive Bid LIBOR Loan has not yet been made but is then the subject of a
Notice of Borrowing or a Notice of Conversion or Continuation, be deemed to have
cancelled and rescinded such notice, or (y) if any such LIBOR Loan or
Competitive Bid LIBOR Loan is then outstanding, require the affected Bank to
convert each such LIBOR Loan or Competitive Bid LIBOR Loan into a Base Rate Loan
at the end of the applicable Interest Period or such earlier time as may be
required by law, in each case by giving the Agent notice (by telephone promptly
confirmed in writing) thereof on the Business Day that the Borrower was notified
by the Bank pursuant to clause (a) above; provided, however, that all Banks
whose LIBOR Loans or Competitive Bid LIBOR Loan are affected by the
circumstances described in clause (a) above shall be treated in the same manner
under this clause (b).
(c) In the event that the Agent determines at any time
following its giving of notice based on the conditions described in clause
(a)(i) above that none of such conditions exist, the Agent shall promptly give
notice thereof to the Borrower and the Banks, whereupon the Borrower's right to
request LIBOR Loans and Competitive Bid LIBOR Loans from the Banks and the
Banks' obligation to make LIBOR Loans shall be restored (it being acknowledged
that the Banks have no obligation to make Competitive Bid LIBOR Loans).
(d) In the event that a Bank determines at any time following
its giving of a notice based on the conditions described in clause (a)(iii)
above that none
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of such conditions exist, such Bank shall promptly give notice thereof to the
Borrower and the Agent, whereupon the Borrower's right to request LIBOR Loans
and Competitive Bid LIBOR Loans from such Bank and such Bank's obligation to
make LIBOR Loans shall be restored (it being acknowledged that the Banks have
no obligation to make Competitive Bid LIBOR Loans).
Section 2.18 Funding Losses. The Borrower shall compensate each
Bank, upon its written request (which request shall set forth the basis for
requesting such amounts), for all reasonable losses, expenses and liabilities
(including, without limitation, lost profits, any loss, expense or liability
incurred by such Bank in connection with the liquidation or reemployment of
deposits or funds required by it to make or carry its LIBOR Loans or Competitive
Bid Rate LIBOR Loans), that such Bank sustains: (i) if for any reason (other
than a default by such Bank) including, without limitation, the failure of any
conditions precedent specified in Section 3 to be satisfied, a Borrowing of, or
conversion from or into, or a continuation of, LIBOR Loans does not occur on a
date specified therefor in a Notice of Borrowing or Notice of Conversion or
Continuation (whether or not rescinded, cancelled or withdrawn or deemed
rescinded, cancelled or withdrawn, pursuant to Section 2.17(a) or 2.17(b) or
otherwise), (ii) if any repayment (including, without limitation, payment after
acceleration) or conversion of any of its LIBOR Loans or Competitive Bid Rate
LIBOR Loans occurs on a date which is not the last day of the Interest Period
applicable thereto or (iii) if any prepayment of any of its Loans is not made on
any date specified in a notice of prepayment given by the Borrower.
Section 2.19 Increased Capital. If any Bank, the Swingline Lender or
the Issuing Bank shall have determined that compliance with any applicable law,
rule, regulation, guideline, request or directive (whether or not having the
force of law) of any governmental authority, central bank or comparable agency
adopted after the Restatement Effective Date, or any change after the
Restatement Effective Date in any such law, rule, regulation, guideline, request
or directive which was in effect on the Restatement Effective Date has or would
have the effect of reducing the rate of return on the capital or assets of such
Bank or any Person controlling such Bank
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as a consequence of its commitments or obligations hereunder (including,
without limitation, its obligations to make Loans, issue Letters of Credit or
participate in Letters of Credit), then from time to time upon notice by the
Bank in accordance with Section 2.21, the Borrower shall pay to such Bank,
Swingline Lender or Issuing Bank, as the case may be, such additional amount or
amounts as will compensate such Bank or Person for such reduction.
Section 2.20 Taxes. (a) All payments made by the Borrower under
this Agreement shall be made free and clear of, and without reduction or
withholding for or on account of, any present or future income, stamp or other
taxes, levies, imposts, duties, charges, fees, deductions or withholdings, now
or hereafter imposed, levied, collected, withheld or assessed by any
governmental authority excluding, in the case of the Agent and each Bank, net
income and franchise taxes imposed on the Agent or such Bank by the jurisdiction
under the laws of which the Agent or such Bank is organized or any political
subdivision or taxing authority thereof or therein, or by any jurisdiction in
which such Bank's Domestic Lending Office or LIBOR Lending Office, as the case
may be, is located or any political subdivision or taxing authority thereof or
therein (all such non-excluded taxes, levies, imposts, deductions, charges or
withholdings being hereinafter called "Taxes"). If any Taxes are required to be
withheld from any amounts payable to the Agent or any Bank hereunder or under
the Notes, the amounts so payable to the Agent or such Bank shall be increased
to the extent necessary to yield to the Agent or such Bank (after payment of all
Taxes on any amounts payable under this Section 2.20) interest on any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the Notes. Whenever any Taxes are payable by the Borrower, as
promptly as possible thereafter, the Borrower shall send to the Agent for its
own account or for the account of such Bank, as the case may be, a certified
copy of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent the required receipts or other
required documentary evidence, the Borrower shall indemnify the Agent and the
Banks for any incremental taxes, interest or penalties that may become payable
by the Agent or any Bank as a result of any such failure. The agreements in
this Section 2.20
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shall survive the termination of this Agreement and the payment of the Notes
and all other Obligations.
(b) Each Bank that is not incorporated under the laws of the
United States of America or a state thereof (including each Purchasing Bank that
becomes a party to this Agreement pursuant to Section 9.4) agrees that, prior to
the first date on which any payment is due to it hereunder, it will deliver to
the Borrower and the Agent (i) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or successor applicable form, as the
case may be, certifying in each case that such Bank is entitled to receive
payments under this Agreement and the Notes payable to it, without deduction or
withholding of any United States federal income taxes, and (ii) an Internal
Revenue Service Form W-8 or W-9 or successor applicable form, as the case may
be, to establish an exemption from United States backup withholding tax. Each
Bank which delivers to the Borrower and the Agent a Form 1001 or 4224 and Form
W-8 or W-9 pursuant to the preceding sentence further undertakes to deliver to
the Borrower and the Agent two further copies of the said letter and Form 1001
or 4224 and Form W-8 or W-9, or successor applicable forms, or other manner of
certification, as the case may be, on or before the date that any such letter or
form expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent letter and form previously delivered by it to the
Borrower, and such extensions or renewals thereof as may reasonably be requested
by the Borrower, certifying in the case of a Form 1001 or 4224 that such Bank is
entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless in any such case,
any change in treaty, law or regulation after the Restatement Effective Date (or
the date any Purchasing Bank became a party hereto) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Bank from duly completing
and delivering any such letter or form with respect to it and such Bank advises
the Borrower that it is not capable of receiving payments without any deduction
or withholding of United States federal income tax, and in the case of a Form
W-8 or W-9, establishing an exemption from United States backup withholding tax.
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Section 2.21 Mitigation; Calculations. (a) In the event that any
Bank shall have delivered a notice pursuant to Section 2.17(a)(ii), 2.17(a)(iii)
or 2.19 or any L/C Participant shall have delivered a notice pursuant to Section
2A.5, or the Borrower shall be required to make additional payments to any Bank
under Section 2.20, the Borrower shall have the right, but not the obligation,
at its own expense (including with respect to the processing and recordation fee
referred to in Section 9.4(c)), upon notice to such Bank and the Agent, to
replace such Bank with an assignee (in accordance with and subject to the
restrictions contained in Section 9.4(c)) approved by the Agent (which approval
shall not be unreasonably withheld), and such Bank hereby agrees to transfer and
assign without recourse (in accordance with and subject to the restrictions
contained in Section 9.4(c)) all its interests, rights and obligations under
this Agreement to such assignee; provided, however, that no Bank shall be
obligated to make any such assignment unless (i) such assignment shall not
conflict with any law or any rule, regulation or order of any Governmental
Authority, (ii) such assignee shall pay to the affected Bank in immediately
available funds on the date of such assignment the principal of the Loans made
by such Bank hereunder and (iii) the Borrower shall pay to the affected Bank in
immediately available funds on the date of such assignment the interest accrued
to the date of payment on the Loans made by such Bank hereunder and all other
amounts accrued for such Bank's account or owed to it hereunder.
(b) A certificate of each Bank, the Swingline Lender, any L/C
Participant or the Issuing Bank setting forth such amount or amounts as shall be
necessary to compensate such Bank, the Swingline Lender or the Issuing Bank or
its holding company, if any, as specified in Section 2.17, 2.19, 2.20 or 2A.5,
as the case may be, and setting forth in reasonable detail an explanation of the
basis of requesting such compensation in accordance with such Sections,
including calculations in reasonable detail, shall be delivered to the Borrower
and shall be conclusive absent manifest error. The Borrower shall pay each
Bank, the Swingline Lender or the Issuing Bank the amount shown as due on any
such certificate delivered by it within 10 Business Days after its receipt of
the same.
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Section 2.22 Use of Proceeds. The proceeds of the Revolving Loans
shall be used for the Borrower's general corporate purposes.
SECTION 2A. LETTERS OF CREDIT
Section 2A.1 Issuance of Letters of Credit. (a) Subject to and upon
the terms and conditions herein set forth, the Borrower may request the Issuing
Bank from time to time on any Business Day from the Restatement Effective Date
until the Business Day immediately preceding the Maturity Date to issue, and
subject to and upon the terms and conditions herein set forth, the Issuing Bank
shall issue, for the account of the Borrower, any Letter of Credit.
(b) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued if the issuance of such Letter of Credit would cause the
aggregate amount outstanding at any time of all Letter of Credit Outstandings to
exceed the lesser of (x) the Total Commitment then in effect minus the aggregate
principal amount of the Revolving Loans, Swingline Loans and Competitive Bid
Loans then outstanding and (y) $10,000,000; (ii) each Letter of Credit shall at
all times be in an amount not less than $100,000; (iii) each Letter of Credit
shall by its terms terminate not later than 365 days after the date of issuance
thereof and in any event not later than the Maturity Date; (iv) each Letter of
Credit shall by its terms only be drawable in U.S. Dollars; (v) each Letter of
Credit shall expressly provide at least two Business Days' notice of drawing
before payment under such Letter of Credit shall be due; and (vi) each stand-by
Letter of Credit shall expressly provide that if an Event of Default shall have
occurred and be continuing, the Issuing Bank shall have the right to terminate
such Letter of Credit upon 30 days' notice to the beneficiary thereof during
which period of time such beneficiary shall have the right to make a single
drawing under such Letter of Credit in an amount not to exceed the lesser of (x)
the face amount of such Letter of Credit at such time and (y) the outstanding
Indebtedness supported by such Letter of Credit.
(c) Whenever the Borrower desires that a Letter of Credit be
issued pursuant to Section 2A.1, the
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Borrower shall give the Issuing Bank not less than 10 Business Days' notice of
the date of the proposed date of issuance of such Letter of Credit and the
Issuing Bank shall give to each Bank prompt notice of such Letter of Credit
Request. Each such notice (a "Letter of Credit Request") shall be made by
telephone, telecopy, telex or cable, confirmed immediately in writing, in
substantially the form of Exhibit F hereto, together with a signed letter of
credit application on the Issuing Bank's then-standard form (or other form
acceptable to the Issuing Bank and appropriate, in the sole opinion of the
Issuing Bank, in the circumstances), and may be cancelled by notice thereof
prior to issuance of such Letter of Credit by telephone, telecopy, telex or
cable, confirmed immediately in writing, to the Issuing Bank, which shall give
to each Bank prompt notice of such cancellation.
Section 2A.2 Participation in Letters of Credit. Effective upon the
issuance by the Issuing Bank of any Letter of Credit hereunder, each Bank
severally (and not jointly), irrevocably and unconditionally agrees to purchase
and receive, and does purchase and receive from the Issuing Bank, without
recourse or warranty, an undivided participation interest in such Letter of
Credit in a percentage equal to such Bank's Pro Rata Share.
Section 2A.3 Reimbursement of Letter of Credit Drawings. (a) In the
event that any drawing shall be made under a Letter of Credit, by demand or
claim (including, without limitation, draft), the Issuing Bank shall notify the
Borrower of such drawing and the Borrower shall reimburse the Issuing Bank in
immediately available funds for any amount paid by the Issuing Bank under such
Letter of Credit on the date of such payment, with interest on the amount so
paid or disbursed by the Issuing Bank, to the extent not reimbursed prior to
12:00 noon, New York City time, on the date of such payment or disbursement,
from and including the date paid or disbursed to (but not including the date, if
received by the Issuing Bank prior to 12:00 noon, New York City time) the date
the Issuing Bank was reimbursed therefor, at a rate per annum which shall be
equal to the Base Rate plus 2%, all such interest to be payable on demand.
Notwithstanding the first sentence of this Section 2A.3(a) in the event that any
drawing under a Letter of Credit is not reimbursed by the Borrower on the date
of payment by the Issuing Bank, and, pursuant to Sections 2.1 and 3.2 of
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this Agreement, the Borrower is then permitted to obtain Revolving Loans under
this Agreement (without regard to the limitations set forth in Section 2.1(c)),
the Borrower shall be deemed to have requested a Borrowing of Revolving Loans
consisting of Base Rate Loans in an aggregate amount equal to such unreimbursed
payment. The Banks shall make the requested Revolving Loans as of the date of
such payment by the Issuing Bank, and the proceeds of such Revolving Loans
shall be paid to the Issuing Bank to reimburse the Issuing Bank for such
drawing in full. In the event that any drawing under a Letter of Credit is not
reimbursed by the Borrower on the date of payment by the Issuing Bank and,
because of the failure of the Borrower to meet the conditions set forth in
Sections 2.1 and 3.2 of this Agreement, the Borrower is then not permitted to
obtain Revolving Loans thereunder, a default specified in Section 7.1(a) shall
have occurred and the Issuing Bank shall promptly notify each Bank.
Immediately upon receipt of such notice, the Revolving Loan Banks will pay to
the Issuing Bank the amount of their respective participations in the Letter of
Credit. In the event that any Bank fails timely to make the Revolving Loan or
pay the amount of its participation as required by this Section 2A.3(a),
interest shall accrue thereon at the overnight Federal Funds Rate from the date
of payment by the Issuing Bank to the date of repayment thereof by such Bank.
(b) The obligations of the Borrower and the Banks under
Section 2A.3(a) shall be absolute, unconditional and irrevocable, and shall be
performed strictly in accordance with the terms thereof, under all circumstances
whatsoever, including the circumstances listed below:
(i) any setoff, counterclaim or defense to payment which
the Borrower may have or has had against the Issuing Bank or Banks;
(ii) any lack of validity or enforceability of any Letter
of Credit, any drawings thereunder or any related contract;
(iii) any statement or any other document presented under
any Letter of Credit that proves to be forged, fraudulent or invalid or
insufficient in any respect or any
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statement therein that proves to be untrue or inaccurate in any
respect whatsoever; or
(iv) payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate or other document that
does not comply with the terms of such Letter of Credit unless such
payment by the Issuing Bank constituted gross negligence or willful
misconduct of the Issuing Bank.
(c) Any action taken or omitted to be taken by the Issuing Bank
under or in connection with any Letter of Credit, if taken or omitted to be
taken in the absence of gross negligence or willful misconduct, shall not put
the Issuing Bank under any resulting liability to any Bank or relieve that Bank
of its obligations hereunder to the Issuing Bank. In determining whether to pay
under any Letter of Credit, the Issuing Bank shall have no obligation to the
Banks other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
comply on their face with the requirements of such Letter of Credit.
Section 2A.4 Letter of Credit Fee. The Borrower agrees to pay to the
Issuing Bank its standard issuance and negotiation fees, plus a letter of credit
fee of 1/4% per annum of the face amount of each Letter of Credit for the term
of each Letter of Credit for the account of, and to be distributed by the Agent
to, each Bank participating in such Letter of Credit according to its Pro Rata
Share of each such Letter of Credit, plus an additional fee of 1/4 of 1% per
annum of the face amount of each solely for the account of the Issuing Bank.
Such letter of credit fees shall be nonrefundable and shall be payable quarterly
in arrears on each Payment Date. All such fees shall be calculated on the basis
of a 360 day year.
Section 2A.5 Increased Costs, Illegality. (a) In the event that the
Issuing Bank or any L/C Participant shall have determined (which determination
shall, absent manifest error, be final and conclusive and binding upon all
parties hereto) at any time that it shall incur increased costs or reductions in
the amounts received or receivable hereunder in respect of any Letter of Credit,
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in any such case because of any change since the date hereof in any applicable
law or governmental rule, regulation, guideline or order or any interpretation
thereof or any directive or request related thereto and including the
introduction of any new law or governmental rule, regulation, guideline or
order (such as, for example but not limited to, a change in official reserve
requirements), whether or not having the force of law and/or other
circumstances affecting the Issuing Bank or such L/C Participant as a result of
any such change; then, and in any such event, the Issuing Bank or such L/C
Participant shall, promptly after making such determination, give notice (by
telephone promptly confirmed in writing) to the Borrower and (if applicable)
the Issuing Bank of such determination (which notice the Issuing Bank shall
promptly transmit to each of the Banks). Thereafter, the Borrower shall pay to
the Issuing Bank or such L/C Participant, upon notice by the Issuing Bank or
L/C Participant, as the case may be, in accordance with Section 2.21 therefor,
such additional amounts (in the form of an increased rate of interest, or a
different method of calculating interest, or otherwise, as the Issuing Bank or
such L/C Participant in its reasonable discretion shall determine) as shall be
required to compensate the Issuing Bank or such L/C Participant for such
increased costs or reduction in amounts received or receivable hereunder.
(b) In the case of any Letter of Credit or requested
Letter of Credit affected by the circumstances described above, the Borrower
may, if any such Letter of Credit has not yet been issued but is then the
subject of a Letter of Credit Request, be deemed to have cancelled and rescinded
such Request, provided, however, that all L/C Participants whose participation
in such Letter of Credit are affected by the circumstances described in clause
(a) above shall be treated in the same manner under this clause (b).
SECTION 3. CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to Effectiveness. The
effectiveness of this Agreement and the obligation of each Bank to make Loans
hereunder, the obligation of the Swingline Lender to make Swingline Loans
hereunder and the obligation of the Issuing Bank to
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issue any Letter of Credit hereunder are subject to the satisfaction on or
prior to the Restatement Effective Date of the following conditions precedent:
(a) Loan Documents.
(i) Credit Agreement. The Borrower and Holdings
shall have executed and delivered this Amended and Restated Credit
Agreement to the Agent and each of the Banks.
(ii) Notes. The Borrower shall have executed and
delivered to each Bank the Notes payable to such Bank.
(iii) Guaranty. Holdings shall have executed and
delivered the Holdings Guaranty to the Agent.
(b) Opinions of Counsel.
The Agent and the Banks shall have received legal opinions,
dated the Restatement Effective Date, from (i) Rogers & Wells, special New
York counsel to the Borrower, substantially in the form set forth as
Exhibit G-1 and (ii) Skadden, Arps, Slate, Meagher & Flom LLP, special
counsel to the Agent, substantially in the form set forth as Exhibit G-2.
(c) Corporate Documents. The Agent and the Banks shall
have received the Certificate of Incorporation (or its equivalent) of Holdings
and the Borrower, as amended, modified or supplemented to the Restatement
Effective Date, certified to be true, correct and complete by the appropriate
Secretary of State as of the Restatement Effective Date or a recent date prior
to the Restatement Effective Date, together with a good standing certificate
from such Secretary of State and a good standing certificate from the
Secretaries of State (or the equivalent thereof) of each other State in which
the Borrower is required to be qualified to transact business, each to be dated
the Restatement Effective Date or a recent date prior to the Restatement
Effective Date.
(d) Certified Resolutions, etc. The Agent shall have
received a certificate of the Secretary
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or Assistant Secretary of each of Holdings and the Borrower dated the
Restatement Effective Date certifying (i) the names and true signatures of
their respective incumbent officers authorized to sign the applicable Loan
Documents and act as its representative for the purposes of signing documents
and giving notices and communications in connection therewith, (ii) their
respective By-Laws as in effect on the Restatement Effective Date, (iii) the
resolutions of their respective Boards of Directors approving and authorizing
the execution, delivery and performance of all Loan Documents to which it is a
party, and (iv) that there have been no changes in their respective
Certificates of Incorporation since the date of the certification thereof by
the appropriate Secretary of State referred to in clause (c) above.
(e) Insurance. The Agent and the Banks shall have received a
certificate of an Authorized Officer of the Borrower certifying that all
policies of insurance as required pursuant to Section 5.3 are in full force and
effect and not subject to cancellation.
(f) Liens, etc. The Agent and the Banks shall have received
evidence satisfactory to the Agent and the Required Banks of the status of
Uniform Commercial Code liens, tax liens, judgments and outstanding litigation
with respect to Holdings and its Subsidiaries in the States of Michigan and
Minnesota.
(g) Solvency Certificate. The Agent and the Banks shall have
received a certificate signed by the chief financial officer of each of Holdings
and the Borrower (which may be a single certificate signed by such officer on
behalf of both Holdings and the Borrower), in form and substance satisfactory to
the Agent and the Banks, containing conclusions as to the solvency, adequacy of
capital, and ability to pay its debts of Holdings (on a consolidated basis) and
the Borrower after giving effect to the transactions contemplated hereby.
(h) Environmental Matters. The Agent and the Banks shall be
satisfied in their sole discretion that neither Holdings, the Borrower nor any
other Subsidiary is subject to any present or contingent environmental liability
which could have a Material Adverse Effect.
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(i) Fees and Expenses. Chase shall have received, for its
account and for the account of each Bank, as applicable, all Fees and other fees
and expenses due and payable hereunder on or before the Restatement Effective
Date.
(j) Additional Matters. The Agent and the Banks shall have
received such other certificates, opinions, documents and instruments relating
to this Agreement, the other Loan Documents and the transactions contemplated by
this Agreement as may have been reasonably requested by the Agent or any Bank,
and all corporate and other proceedings and all other documents (including,
without limitation, all documents referred to herein and not appearing as
exhibits hereto), and all matters in connection with this Agreement, the other
Loan Documents and the transactions contemplated by this Agreement (including,
without limitation, legal, tax, labor, benefit and environmental matters) shall
be satisfactory to the Agent and the Banks.
Section 3.2 Conditions Precedent to All Loans and Issuance of
Letters of Credit. The obligation of each Bank to make any Loan, the obligation
of the Swingline Lender to make any Swingline Loan and the obligation of the
Issuing Bank to issue any Letter of Credit is subject to the satisfaction on or
prior to the date such Loan is made or such Letter of Credit is issued, as the
case may be, of the following conditions precedent:
(a) Representations and Warranties. The representations and
warranties contained herein and in the other Loan Documents (other than
representations and warranties which expressly speak only as of a specific date)
shall be true and correct in all material respects on the date such Loan is made
or on the date such Letter of Credit is issued, as the case may be, both before
and after giving effect to the making of such Loan or the issuance of such
Letter of Credit, as the case may be.
(b) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such date, either before or
after giving effect to the making of such Loan or the issuance of such Letter of
Credit, as the case may be.
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(c) No Injunction. No law or regulation shall have been
adopted, and no order, judgment or decree of any governmental authority shall
have been issued, which would enjoin, prohibit or restrain the making or
repayment of the Loans, the issuance of or the reimbursement for the Letters of
Credit.
(d) Notice of Borrowing. In the case where any Loan is to be
made, the Agent and the Banks shall have received a fully executed Notice of
Borrowing in respect of the Loans to be made on such date in accordance with
Section 2.1, 2.2 or 2.3, as appropriate.
(e) Letter of Credit Request. In the case where any Letter
of Credit is to be issued, the Issuing Bank shall have received a fully executed
Letter of Credit Request in respect of the Letter of Credit to be issued on such
date in accordance with Section 2A.1(a).
The acceptance of the proceeds of each Loan or the issuance of each
Letter of Credit shall constitute a representation and warranty by Holdings and
the Borrower to each of the Banks or the Issuing Bank, as the case may be, that
all of the conditions required to be satisfied under this Section 3 in
connection with the making of such Loan or the issuance of each Letter of Credit
have been satisfied.
In the case where any Loan is to be made, all of the Notes,
certificates, agreements, legal opinions and other documents and papers referred
to in this Section 3, unless otherwise specified, shall be delivered to the
Agent, for the account of each of the Banks and, except for the Notes, in
sufficient counterparts for each of the Banks, and shall be satisfactory in form
and substance to each of the Banks; and in the case where a Letter of Credit is
to be issued, all of the certificates, agreements, legal opinions and other
documents and papers referred to in this Section 3, unless otherwise specified,
shall be delivered to the Issuing Bank, in sufficient counterparts for each of
the Issuing Bank and the L/C Participants, and shall be satisfactory in form and
substance to the Issuing Bank and each of the L/C Participants.
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SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Agreement, to make the
Loans and to issue the Letters of Credit, Holdings and the Borrower make the
following representations and warranties, which shall survive the execution and
delivery of this Agreement and the Notes, the making of the Loans and the
issuance of the Letters of Credit until all Obligations are indefeasibly repaid
in full and this Agreement and the Commitments are terminated:
Section 4.1 Corporate Status. Holdings, the Borrower and each of
their respective Subsidiaries (i) is a duly organized and validly existing
corporation in good standing under the laws of the jurisdiction of its
organization, (ii) has the power and authority to own its property and assets
and to transact the business in which it is engaged or presently proposes to
engage and (iii) has duly qualified and is authorized to do business and is in
good standing in every jurisdiction in which it owns or leases real property or
in which the nature of its business requires it to be so qualified.
Section 4.2 Corporate Power and Authority. Each of Holdings and
the Borrower has the corporate power and authority to execute, deliver and carry
out the terms and provisions of each of the Loan Documents to which it is a
party and each other agreement or instrument to be executed and delivered by it
in connection with the Restructuring and has taken all necessary corporate
action to authorize the execution, delivery and performance by it of such Loan
Documents and other agreements or instruments in connection with the
Restructuring. Each of Holdings and the Borrower has duly executed and
delivered each such Loan Document to which it is a party, and each such Loan
Document constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms subject, as to enforcement, to
bankruptcy, insolvency, moratorium or other similar laws at the time in effect
relating to the enforceability of the rights of creditors generally and to
general principles of equity.
Section 4.3 No Violation. None of the execution, delivery or
performance by Holdings or the Borrower of the Loan Documents to which it is a
party, compliance by it with the terms and provisions thereof or the con-
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summation of the transactions contemplated thereby, including without
limitation, the Restructuring (i) will contravene any applicable provision of
any law, statute, rule or regulation or any applicable order, writ, injunction
or decree of any court or governmental instrumentality or (ii) will conflict or
be inconsistent with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any of the property or assets of Holdings, the Borrower or any other Subsidiary
pursuant to the terms of any indenture, mortgage, deed of trust, or other
material agreement or other instrument to which Holdings, the Borrower or any
such Subsidiary is a party or by which it or any of its property or assets is
bound or to which it may be subject, or (iii) will violate any provision of the
Certificate of Incorporation or By-Laws of Holdings or the Borrower.
Section 4.4 Litigation. There are no actions, charges,
grievances, arbitrations, claims, suits or proceedings pending or, to Holdings
or the Borrower's knowledge, threatened (including any condemnation or similar
proceeding) (i) with respect to any of the Loan Documents or (ii) except as set
forth in Schedule 4.4, that could, individually or in the aggregate, result in a
Material Adverse Effect.
Section 4.5 Financial Statements; Financial Condition; etc. The
Borrower has no material liability (contingent or otherwise) forward or
long-term commitments or anticipated losses from any unfavorable commitments not
reflected in the financial statements most recently made a part of the
Borrower's Annual Report filed on Form 10-K for the fiscal year ended December
31, 1996 and the Quarterly Report filed on Form 10-Q for the fiscal quarter
ended March 31, 1997 or in the notes thereto or on any other financial
statements subsequently filed with the annual or quarterly reports of Holdings
on Forms 10-K or 10-Q, as the case may be.
Section 4.6 Projections. The most recent projections delivered
pursuant to Section 5.1(k) of the Existing Credit Agreement have been prepared
on the basis of the assumptions accompanying them, and such projections and
assumptions, as of the date of preparation thereof and as of the Restatement
Effective Date, are
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reasonable and represent the Borrower's good faith estimate of its future
financial performance, it being understood that nothing contained in this
Section 4.6 shall constitute a representation or warranty that such future
financial performance or results of operations will in fact be achieved.
Section 4.7 Material Adverse Change. Since March 31, 1997, there
has occurred no material adverse change in the condition (financial or
otherwise), operation, assets, nature of assets, liabilities or prospects of
Holdings, the Borrower and their respective Subsidiaries, taken as a whole.
Section 4.8 Use of Proceeds; Margin Regulations. All proceeds of
each Loan will be used by the Borrower only in accordance with the provisions of
Section 2.22. No part of the proceeds of any Loan will be used by the Borrower
to purchase or carry any Margin Stock or to extend credit to others for the
purpose of purchasing or carrying any Margin Stock. Neither the making of any
Loan nor the use of the proceeds thereof will violate or be inconsistent with
the provisions of Regulation G, T, U or X of the Federal Reserve Board.
Section 4.9 Governmental Approvals. No order, consent, approval,
license, authorization, or validation of, or filing, recording or registration
with, or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection with
(i) the execution, delivery and performance by Holdings or the Borrower of any
Loan Document or the consummation of any of the transactions contemplated
thereby, (ii) the legality, validity, binding effect or enforceability of any
Loan Document with respect to Holdings or the Borrower or (iii) the
Restructuring, except those that have already been duly made or obtained and
remain in full force and effect.
Section 4.10 Tax Returns and Payments. Each of Holdings, the
Borrower and the other Subsidiaries has filed all tax returns required to be
filed by it and has paid all taxes and assessments payable by it which have
become due, other than those not yet delinquent or those that are reserved
against in accordance with GAAP which are being diligently contested in good
faith by appropriate proceedings.
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Section 4.11 ERISA. Schedule 4.11 lists, as of the Restatement
Effective Date, all Plans. No accumulated funding deficiency (as defined in
Section 412 of the Code or Section 302 of ERISA) or Reportable Event has
occurred with respect to any Plan that could have a Material Adverse Effect.
There are no Unfunded Benefit Liabilities under any Plan that are reasonably
expected by Holdings or the Borrower to result in a Material Adverse Effect
within the next two calendar years from the date this representation and
warranty is made. Holdings, the Borrower and each member of their ERISA
Controlled Group have complied with the requirements of Section 515 of ERISA
with respect to each Multiemployer Plan and is not in "default" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
that could have a Material Adverse Effect. The aggregate potential total
withdrawal liability, and the aggregate potential annual withdrawal liability
payments of the Borrower and the members of its ERISA Controlled Group as
determined in accordance with Title IV of ERISA as if the Borrower and the
members of its ERISA Controlled Group had completely withdrawn from all
Multiemployer Plans is not greater than $3,000,000 and $1,000,000, respectively.
To the best knowledge of Holdings and the Borrower, no Multiemployer Plan is or
is likely to be in reorganization (as defined in Section 4241 of ERISA or
Section 418 of the Code) or is insolvent (as defined in Section 4245 of ERISA),
in either case which could reasonably be expected to result in a Material
Adverse Effect. No material liability to the PBGC (other than required premium
payments) or to any Multiemployer Plan on account of a complete or partial
withdrawal therefrom has been, or is expected by Holdings and the Borrower to
be, incurred by Holdings and the Borrower or any member of their ERISA
Controlled Group, which could result in a Material Adverse Effect. No lien under
Section 412(n) of the Code or 302(f) of ERISA or requirement to provide security
under Section 401(a)(29) of the Code or Section 307 of ERISA has been or is
reasonably expected by Holdings and the Borrower to be imposed on the assets of
Holdings or the Borrower or any member of their ERISA Controlled Group.
Section 4.12 Investment Company Act; Public Utility Holding Company
Act. Neither Holdings nor the Borrower is (x) an "investment company" or a
company "controlled" by an "investment company," within the
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meaning of the Investment Company Act of 1940, as amended, (y) a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within the meaning of the
Public Utility Holding Company Act of 1935, as amended, or (z) subject to any
other federal or state law or regulation which purports to restrict or regulate
its ability to borrow money.
Section 4.13 No Material Adverse Effect as of Restatement Effective
Date. As of the Restatement Effective Date, there is no fact, event or
condition known to Holdings or the Borrower which constitutes or could
reasonably be expected to have a Material Adverse Effect.
Section 4.14 Corporate Structure; Capitalization. Schedule 4.14
hereto sets forth, as of the Restatement Effective Date, the number of
authorized and issued shares of capital stock or other equity interests, as the
case may be, of each of Holdings' and the Borrower's Subsidiaries and the Double
Eagle, the par value thereof and the registered owner(s) thereof. All of such
stock has been duly and validly issued and is fully paid and non-assessable.
Section 4.15 Environmental Matters. (a) Except as set forth in
Schedule 4.15, (i) each of Holdings and the Borrower, the other Subsidiaries
and, to the best of the Holdings' and Borrower's knowledge, their respective
Environmental Affiliates are in compliance with all applicable Environmental
Laws except where noncompliance could not have a Material Adverse Effect, (ii)
each of Holdings, the Borrower and the other Subsidiaries and, to the best of
Holdings' and the Borrower's knowledge, their respective Environmental
Affiliates have all material Environmental Approvals required to operate their
businesses as presently conducted or as reasonably anticipated to be conducted
which the failure to have could reasonably be expected to have a Material
Adverse Effect, (iii) none of Holdings, the Borrower or any of the other
Subsidiaries, or, to the best of Holdings' and the Borrower's knowledge, any of
their respective Environmental Affiliates has received any written
communication, whether from a governmental authority, citizens group, employee
or otherwise, that alleges that Holdings, the Borrower, any other such
Subsidiary or such Environmental Affiliate is not in full compliance with
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all Environmental Laws, which noncompliance could reasonably be expected to
have a Material Adverse Effect, and (iv) to Holdings' and the Borrower's best
knowledge after due inquiry, there are no circumstances that may prevent or
interfere with such full compliance in the future, except such noncompliance
which could not reasonably be expected to have a Material Adverse Effect.
(b) Except as set forth in Schedule 4.15, to the best of Holdings'
and the Borrower's knowledge after due inquiry, there is no Environmental Claim
pending or threatened against Holdings, the Borrower, any of the other
Subsidiaries or any of their respective Environmental Affiliates which could
reasonably be expected to have a Material Adverse Effect.
(c) Except as set forth in Schedule 4.15, there are no past or
present actions, activities, circumstances, conditions, events or incidents,
including, without limitation, the release, emission, discharge or disposal of
any Material of Environmental Concern, that could form the basis of any
Environmental Claim against Holdings or the Borrower, any of the other
Subsidiaries or, to the best of Holdings' and the Borrower's knowledge, any of
their respective Environmental Affiliates, which Environmental Claim could
reasonably be expected to have a Material Adverse Effect.
Section 4.16 Patents, Trademarks, etc. Holdings, the Borrower and
each of the other Subsidiaries have obtained and hold in full force and effect
all patents, trademarks, servicemarks, trade names, copyrights and other such
rights, free from burdensome restrictions, which are necessary for the operation
of its business as presently conducted and which the failure to hold could
reasonably be expected to result in a Material Adverse Effect. To the best of
Holdings' and the Borrower's knowledge, no material product, process, method,
substance, part or other material presently sold by or employed by Holdings or
the Borrower or the other Subsidiaries in connection with such business
infringes any patent, trademark, service mark, trade name, copyright, license or
other right owned by any other Person, which infringement could reasonably be
expected to result in a Material Adverse Effect. There is not pending or, to
Holdings' and the Borrower's knowledge, overtly threatened, any claim or
litigation against or affecting Hold-
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ings, the Borrower or any of the other Subsidiaries contesting its right to
sell or use any such product, process, method, substance, part or other
material.
Section 4.17 Ownership of Property. Holdings, the Borrower and each
of the other Subsidiaries have good and valid title to or valid leasehold
interests in all of their material real property and good title to all of their
personal property subject to no Lien of any kind except Liens permitted hereby.
Holdings, the Borrower and each of the other Subsidiaries enjoy peaceful and
undisturbed possession under all of their material respective leases.
Section 4.18 No Default. None of Holdings, the Borrower or any other
Subsidiary is in default under or with respect to any agreement, instrument or
undertaking to which it is a party or by which it or any of its property is
bound in any respect, which default could reasonably be expected to result in a
Material Adverse Effect.
Section 4.19 Licenses, etc. Each of Holdings, the Borrower and the
other Subsidiaries have obtained and hold in full force and effect, all material
franchises, licenses, permits, certificates, authorizations, qualifications,
accreditations, easements, rights of way and other rights, consents and
approvals which are necessary for the operation of their respective businesses
as presently conducted and which the failure to hold in full force and effect
could reasonably be expected to have a Material Adverse Effect.
Section 4.20 Compliance with Law. Holdings, the Borrower and each
other Subsidiary is in compliance with all laws, rules, regulations, orders,
judgments, writs and decrees except to the extent such non-compliance,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
Section 4.21 No Burdensome Restrictions. None of Holdings, the
Borrower nor any other Subsidiary is a party to any agreement or instrument or
subject to any other obligation or any charter or corporate restriction which
could reasonably be expected to have a Material Adverse Effect.
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Section 4.22 Property Rights, Services, etc. All services, means of
transportation, facilities and other materials necessary for the operation of
the Plant and the Power Plant at their designed capacities (including, without
limitation, as necessary, gas, electrical, water and sewage services and
facilities) are available to the Plant and the Power Plant and, to the extent
appropriate, arrangements have been made on commercially reasonable terms for
such services, means of transportation, facilities and other materials.
Section 4.23 Merger and Restructuring . The Merger and Restructuring
have been consummated in accordance with all applicable laws and are in full
force and effect.
SECTION 5. AFFIRMATIVE COVENANTS.
Each of Holdings and the Borrower covenants and agrees that on and
after the Restatement Effective Date, until the Total Commitment has terminated
and the Obligations are paid in full:
Section 5.1 Information Covenants. Holdings and/or the Borrower
will furnish to each Bank:
(a) Quarterly Financial Statements. Within forty-five (45)
days after the close of each of the first three quarterly accounting periods in
each fiscal year of Holdings, the consolidated balance sheet of Holdings as at
the end of such quarterly period and the related consolidated statements of
operations, stockholders' equity (or deficiency) and cash flow for such
quarterly period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly period, and in each case setting forth comparative
figures for the related periods in the prior fiscal year.
(b) Annual Financial Statements. Within ninety (90) days
after the close of each fiscal year of Holdings, the consolidated balance sheet
of Holdings as at the end of such fiscal year and the related consolidated
statements of operations, stockholders' equity (or deficiency) and cash flow for
such fiscal year, certified without qualification by Price Waterhouse or other
independent certified public accountants of recognized na-
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tional standing reasonably acceptable to the Required Banks, in each case
together with a report of such accounting firm stating that in the course of
its regular audit of the consolidated financial statements of Holdings, which
audit was conducted in accordance with generally accepted auditing standards,
such accounting firm has obtained no knowledge of any Default or Event of
Default, or if in the opinion of such accounting firm such a Default or Event
of Default has occurred and is continuing, a statement as to the nature
thereof.
(c) Management Letters. Promptly after Holdings' or the
Borrower's receipt thereof, a copy of any "management letter" or other material
report received by Holdings or the Borrower from its independent certified
public accountants.
(d) Budgets. Within sixty (60) days after the commencement
of each fiscal year of Holdings, a budget and financial forecast of results of
operations and sources and uses of cash (in form reasonably satisfactory to the
Required Banks) prepared by Holdings for such fiscal year (and, in any event,
covering the Borrower and each of the other Subsidiaries of Holdings),
accompanied by a written statement of the assumptions used in connection
therewith, together with a certificate of the chief financial officer of
Holdings to the effect that such budget and financial forecast and assumptions
are reasonable and represents Holding's good faith estimate of its future
financial requirements and performance.
(e) Officer's Certificates. At the time of the delivery of
the financial statements under clauses (a) and (b) above, a certificate of the
chief financial officer of Holdings which certifies (x) that such financial
statements fairly present the financial condition and the results of operations
of Holdings on the dates and for the periods indicated, subject, in the case of
interim financial statements, to normally recurring year-end adjustments and (y)
that such officer has reviewed the terms of the Loan Documents and has made, or
caused to be made under his or her supervision, a review in reasonable detail of
the business and condition of Holdings, the Borrower and the other Subsidiaries
during the accounting period covered by such financial statements, and that as a
result of such review such officer has
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concluded that no Default or Event of Default has occurred during the period
commencing at the beginning of the accounting period covered by the financial
statements accompanied by such certificate and ending on the date of such
certificate or, if any Default or Event of Default has occurred, specifying the
nature and extent thereof and, if continuing, the action Holdings or the
Borrower proposes to take in respect thereof. Such certificate shall set forth
the calculations required to establish (i) whether Holdings was in compliance
with the provisions of Section 6.1 during (with respect to Sections 6.1(a),
6.1(c), 6.1(d) and 6.1(e)) and as at the end of (with respect to Section
6.1(b)) the accounting period covered by the financial statements accompanied
by such certificate, and (ii) a calculation of the Leverage Ratio for the last
fiscal quarter covered by such financial statements.
(f) Notice of Default or Litigation. Promptly, and in any
event within three Business Days after Holdings or the Borrower obtains
knowledge thereof, notice of (i) the occurrence of any Default or Event of
Default, (ii) any litigation or governmental proceeding pending or threatened,
or any material development in any such litigation or proceeding, against the
Borrower which could result in a Material Adverse Effect and (iii) any other
event, act or condition which could reasonably be expected to result in a
Material Adverse Effect.
(g) ERISA. (i) As soon as possible and in any event within
10 days after Holdings or the Borrower knows, or has reason to know, that:
(A) any Termination Event or Reportable Event with respect
to an ERISA Plan has occurred or will occur which, in either case, could
reasonably be expected to result in a Material Adverse Effect, or
(B) any condition exists with respect to an ERISA Plan
other than a Multiemployer Plan which presents a material risk of termination of
the Plan or imposition of an excise tax or other liability on Holdings or the
Borrower or any member of their ERISA Controlled Group which could, in any such
case, reasonably be expected to result in a Material Adverse Effect, or
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(C) Holdings, the Borrower or any member of their ERISA
Controlled Group has applied for a waiver of the minimum funding standard under
Section 412 of the Code or Section 302 of ERISA, or
(D) the aggregate present value of the Unfunded Benefit
Liabilities under all ERISA Plans is in any year an amount in excess of 10% of
the Plan Assets, or
(E) any condition exists with respect to a Multiemployer Plan
which presents a material risk of a partial or complete withdrawal (as described
in Section 4203 or 4205 of ERISA) by Holdings or the Borrower or any member of
their ERISA Controlled Group from a Multiemployer Plan which could result in a
Material Adverse Effect, or
(F) the potential withdrawal liability (as determined in
accordance with Title IV of ERISA) of Holdings or the Borrower and the members
of their ERISA Controlled Group with respect to all Multiemployer Plans is an
amount in excess of $1,000,000, or
(G) there is an action brought against Holdings, the Borrower or
any member of their ERISA Controlled Group under Section 502 of ERISA with
respect to its failure to comply with Section 515 of ERISA which could result in
a Material Adverse Effect;
a certificate of the president or chief financial officer of Holdings and the
Borrower setting forth the details of each of the events described in clauses
(A) through (G) above as applicable and the action which Holdings and the
Borrower or the applicable member of their ERISA Controlled Group proposes to
take with respect thereto, together with a copy of any notice or filing from
the PBGC or which may be required by the PBGC or other agency of the United
States government with respect to each of the events described in clauses (A)
through (G) above, as applicable shall be promptly delivered to the Agent and
the Banks.
(ii) As soon as possible and in any event within three Business
Days after the receipt by Holdings, the Borrower or any member of their ERISA
Controlled Group of a demand letter from the PBGC notifying Holdings
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or the Borrower or such member of their ERISA Controlled Group of its final
decision finding liability and the date by which such liability must be paid, a
copy of such letter, together with a certificate of the president or chief
financial officer of Holdings and the Borrower setting forth the action which
Holdings and the Borrower or such member of their ERISA Controlled Group
proposes to take with respect thereto.
(h) SEC Filings. Promptly after the filing thereof, copies
of all regular and periodic financial information, proxy materials and other
information and reports described on Schedule 5.1(h), if any, which Holdings or
the Borrower or any other Subsidiary shall file with the Securities and Exchange
Commission or any governmental agency substituted therefor or which Holdings,
the Borrower or any such other Subsidiary shall send to its stockholders
generally.
(i) Environmental Notices. Promptly, and in any event within
ten Business Days after becoming aware of the existence of any of the following
conditions, a certificate of the chief executive officer or chief financial
officer of Holdings or the Borrower specifying in detail the nature of such
condition and the proposed response thereto: (i) the receipt by Holdings, the
Borrower or any other Subsidiary or any of their respective Environmental
Affiliates of any written communication that alleges that Holdings, the Borrower
or such Subsidiary or such Environmental Affiliate is not in compliance with
applicable Environmental Laws, which noncompliance could reasonably be expected
to have a Material Adverse Effect, (ii) Holdings, the Borrower or any other
Subsidiary or any of their respective Environmental Affiliates shall obtain
actual knowledge that there exists any Environmental Claim pending or threatened
against such Person, which could reasonably be expected to have a Material
Adverse Effect, or (iii) any release, emission, discharge or disposal of any
Material of Environmental Concern that could form the basis of any Environmental
Claim against Holdings, the Borrower or any other Subsidiary or any of their
respective Environmental Affiliates, which Environmental Claim could reasonably
be expected to have a Material Adverse Effect.
(j) Annual Environmental Reporting. Within thirty (30) days
of the end of each fiscal year of
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Holdings, Holdings and the Borrower shall submit to the Agent a report on the
status of environmental compliance. The report shall include the following
with respect to Holdings, the Borrower, each other Subsidiary and each
Environmental Affiliate, as applicable:
(i) the status of all matters with respect to which notices were
required to have been given pursuant to Section 5.1(i);
(ii) the cause or causes of any such matters;
(iii) the actions taken to address such matters;
(iv) plans to resolve or eliminate the reasons such notices were
required to be given and, as applicable, to prevent the recurrence of such
problems;
(v) the costs that are reasonably anticipated to be associated with
actions described in such report and the statutory penalties, if any, and other
potential liabilities that could be associated with such problems; and
(vi) the status of applicable Environmental Approvals, including
without limitation dates of permit renewals, applications and expiration.
(k) Projections. By November 1 of each year, projections
(prepared in a manner consistent with the projections delivered pursuant to
Section 4.6 hereof) for the next succeeding 5 year period.
(l) Other Information. From time to time, such other information
or documents (financial or otherwise) as any Bank may reasonably request.
Section 5.2 Books, Records and Inspections. Holdings and the
Borrower shall, and shall cause each other Subsidiary to, keep proper books of
record and account in which full, true and correct entries in conformity with
GAAP and all requirements of law shall be made of all dealings and transactions
in relation to its business and activities. Holdings and the Borrower shall,
and shall cause each other Subsidiary to, permit
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officers and designated representatives of the Agent and any Bank to visit and
inspect any of the properties of Holdings, the Borrower or any other
Subsidiary, and to examine the books of record and accounts of Holdings and the
Borrower or any other Subsidiary, and discuss the affairs, finances and
accounts of Holdings, the Borrower or any other Subsidiary with, and be advised
as to the same by, its and their officers and independent accountants, all upon
reasonable prior notice and at such reasonable times as the Agent or such Bank
may desire.
Section 5.3 Maintenance of Insurance. Holdings and the Borrower
shall, and shall cause each other Subsidiary to, maintain in effect the
insurance listed on Schedule 5.3 hereto with financially sound and reputable
insurance companies. The insurance policies and coverage listed and described
thereon shall not be altered or cancelled without the prior consent of the
Required Banks if, as a result thereof, Holdings and the Borrower shall fail to
maintain insurance with such coverages as is customary for companies in the same
general area engaged in the same or similar business.
Section 5.4 Taxes. Holdings and the Borrower shall pay or cause
to be paid, and shall cause each other Subsidiary to pay or cause to be paid,
when due, all taxes, charges and assessments and other lawful claims required to
be paid by Holdings, the Borrower or any such other Subsidiary, except as
contested in good faith and by appropriate proceedings diligently conducted, if
adequate reserves have been established with respect thereto in accordance with
GAAP.
Section 5.5 Corporate Franchises. Holdings and the Borrower
shall, and shall cause each other Subsidiary to, do or cause to be done, all
things necessary to preserve and keep in full force and effect its existence and
its patents, trademarks, service marks, trade names, copyrights, franchises,
licenses, permits, certificates, authorizations, qualifications, accreditations,
easements, rights of way and other rights, consents and approvals except where
the failure to so preserve any of the foregoing could not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect.
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Section 5.6 Compliance with Law. Holdings and the Borrower
shall, and shall cause each other Subsidiary to and shall use their best efforts
to cause Double Eagle to, comply with all applicable laws, rules, statutes,
regulations, decrees and orders of, and all applicable restrictions imposed by,
all governmental bodies, domestic or foreign, in respect of the conduct of their
business and the ownership of their property, including, without limitation, all
Environmental Laws, except such non-compliance as could not, individually or in
the aggregate, reasonably be expected to result in a Material Adverse Effect.
Section 5.7 Performance of Obligations. Holdings and the
Borrower shall, shall cause each other Subsidiary to and shall use their best
efforts to cause Double Eagle to, perform in all material respects all of their
respective obligations and preserve and protect in all material respects its
rights under the terms of each mortgage, indenture, security agreement, debt
instrument, lease, undertaking and contract by which it or any of its properties
is bound or to which it is a party if the failure to so perform could,
individually or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.
Section 5.8 Maintenance of Properties. Holdings and the Borrower
shall, shall cause each other Subsidiary to and shall use its best efforts to
cause Double Eagle to, ensure that its material properties used or useful and
necessary in its business are kept in good repair, working order and condition,
normal wear and tear excepted, provided that neither Holdings, the Borrower nor
any other Subsidiary shall be required to maintain, repair or improve any such
property which in its good faith opinion is obsolete, surplus, unfit for use or
cannot be advantageously employed in the conduct of its business.
Section 5.9 Environmental Matters. (a) Upon the occurrence of
any release, emission, discharge or disposal of any Material of Environmental
Concern which could reasonably be expected to form the basis of an Environmental
Claim against Holdings, the Borrower, any other Subsidiary or any Environmental
Affiliate, which occurrence could reasonably be expected to result in a Material
Adverse Effect, Holdings and the Borrower shall,
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and shall cause each such other Subsidiary or Environmental Affiliate to, (i)
take all necessary steps and actions to initiate and expeditiously complete all
required remedial actions in connection therewith, and (ii) keep the Agent
informed of such actions and the results thereof.
(b) Obtain and keep in full force and effect all Environmental
Approvals necessary or required for the management, use, control, ownership or
operations of its business, property or assets, unless the failure to so obtain
and keep in full force and effect any such Environmental Approval could not
reasonably be expected to have a Material Adverse Effect.
SECTION 6. NEGATIVE COVENANTS
The Borrower covenants and agrees that on and after the Closing Date,
until the Total Commitment has terminated and the Obligations are paid in full:
Section 6.1 Financial Covenants.
(a) Current Ratio. Holdings shall not at any time permit its
Current Ratio to be less than 1.50:1.
(b) Debt Service Coverage Ratio. Holdings shall not for any
fiscal quarter of Holdings, permit the Debt Service Coverage Ratio for the
immediately preceding four fiscal quarters to be less than 3.00 to 1 provided
that, for purposes of this Section 6.1(h), for the period prior to the first
four fiscal quarters of Holdings ending after the Restatement Effective Date,
such Debt Service Coverage Ratio shall be calculated based on (i) as at the end
of the first fiscal quarter ended after the Restatement Effective Date, the
preceding fiscal quarter of Holdings and the preceding three fiscal quarters of
the Borrower prior to the Restatement Effective Date, (ii) as at the end of the
first two fiscal quarters following the Restatement Effective Date, the
preceding two fiscal quarters of Holdings and the preceding two fiscal quarters
of the Borrower prior to the Restatement Effective Date and (iii) as at the end
of the first three fiscal quarters following the Restatement Effective Date, the
preceding three fiscal quarters of Holdings and the preceding one fiscal quarter
of the Borrower prior to the Restatement Effective Date.
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(c) Leverage Ratio. Holdings shall not at any time permit
its Leverage Ratio to be greater than 1.75 to 1.00.
(d) Total Debt Ratio. Holdings shall not at any time permit
its ratio of Total Debt to the sum of Total Debt plus Tangible Net Worth to be
greater than 0.30 to 1.00.
(e) Tangible Net Worth. Holdings shall not at any time
permit its Tangible Net Worth to be less than an amount equal to $417,265,000
(as at December 31, 1996) plus the aggregate of the Annual Increase for each
fiscal year of Holdings that shall have elapsed during the period from January
1, 1997 through the date as at which compliance with this subsection (e) is
being determined.
Section 6.2 Liens. Holdings and the Borrower shall not, and
shall not permit any other Subsidiary to, create, incur, assume or suffer to
exist, directly or indirectly, any Lien on any of its property now owned or
hereafter acquired, other than:
(a) Liens existing on the Restatement Effective Date and set
forth on Schedule 6.2 hereto [SUBJECT TO RESULTS OF LIEN SEARCH];
(b) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings diligently conducted and with respect
to which adequate reserves are being maintained in accordance with GAAP;
(c) Statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other Liens arising by operation of
Law, in each case created in the ordinary course of business for amounts not yet
due or which are being contested in good faith by appropriate proceedings
diligently conducted and with respect to which adequate reserves have been
established;
(d) Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment insurance and
other types of social security, or to secure the performance of tenders,
statutory obligations, surety and appeal bonds,
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bids, leases, government contracts, performance and return-of-money bonds and
other similar obligations (exclusive of obligations for the payment of borrowed
money);
(e) Easements, rights-of-way, zoning and similar restrictions
and other similar charges or encumbrances not interfering with the ordinary
conduct of the business of Holdings, the Borrower or any other Subsidiary and
which do not detract materially from the value of the property to which they
attach or impair materially the use thereof by Holdings, the Borrower or any
such Subsidiary;
(f) Liens created pursuant to Capitalized Leases to the
extent the Borrower is in compliance with Section 6.1, provided that such Liens
are only in respect of the property or assets subject to, and secure only, the
respective Capitalized Lease;
(g) subject to compliance with Section 6.1, Liens existing on
property or assets of a Person immediately prior to its becoming a Subsidiary of
Holdings or the Borrower and which Lien was not created, incurred or assumed by
such Person in anticipation thereof, provided that such Lien shall at all times
be confined solely to the property subject thereto at the time such Person
becomes a Subsidiary of Holdings or the Borrower;
(h) Liens securing Indebtedness of the Borrower or any other
Subsidiary (and any refinancings, refundings, renewals or extensions thereof on
terms no less favorable (taken as a whole) to the Borrower or such other
Subsidiary, as the case may be, provided that the principal amount of such
Indebtedness is not increased) incurred after the Restatement Effective Date
solely for the purpose of financing an acquisition by the Borrower or such other
Subsidiary of real or personal property or the cost of construction or
improvements to or on such property, or Liens existing on such property so
acquired at the time of acquisition thereof, provided that:
(a) each such Lien shall at all times be confined solely to the
property so acquired;
(b) the principal amount of Indebtedness secured by each such
Lien shall at no time
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exceed the lesser of (A) the cost to such Person of the property
subject thereto or (B) the fair value of such property (as
determined in good faith by the Board of Directors of the
Borrower or such other Subsidiary, as the case may be) at the
time of the acquisition thereof or completion of construction
thereon;
(c) the aggregate principal amount of all Indebtedness secured by all
such Liens shall not exceed $10,000,000; and
(i) Liens not otherwise permitted pursuant to subclauses (a)
through (h) above securing Indebtedness not in excess of $10,000,000 in the
aggregate at any time outstanding; and
(j) Liens securing Non-Recourse Debt, provided such Liens do
not secure in excess of $30,000,000 aggregate principal amount of Non-Recourse
Debt (plus accrued interest thereon).
Section 6.3 Restriction on Fundamental Changes.
(a) Holdings and the Borrower shall not, and shall not permit
any other Subsidiary to, enter into any merger or consolidation, or liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution), discontinue its
business or convey, lease, sell, transfer or otherwise dispose of, in one
transaction or series of transactions, all or substantially all of its assets,
whether now or hereafter acquired, except as otherwise permitted under Section
6.4, provided that (x) Holdings or the Borrower may consolidate or merge with
any other Person if (i) Holdings or the Borrower, as the case may be, shall be
the surviving or continuing entity, (ii) at the time of such consolidation or
merger and after giving effect thereto, no Default shall have occurred and be
continuing, (iii) such other Person shall be primarily engaged in the business
of manufacturing and/or processing steel or steel-related products and (iv) the
Agent and the Banks shall have received a certificate from an Authorized Officer
of the Borrower certifying that, after giving effect to such merger or
consolidation, there is no reasonable likelihood of a Material Adverse Effect
re-
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sulting therefrom, and (y) any Subsidiary of Holdings (other than the Borrower)
may merge with or into any other Subsidiary of Holdings (other than the
Borrower).
(b) Holdings and the Borrower shall not, and shall not permit
any other Subsidiary to, (i) acquire, by purchase or otherwise any other Person
(regardless of whether such transaction is structured as a sale of stock or
assets) or (ii) enter into any partnership or joint venture (other than any
partnership or joint venture in existence on the Restatement Effective Date),
provided that Holdings, the Borrower or any other Subsidiary may (x) so acquire
any other Person if (i) at the time of such acquisition and after giving effect
thereto, no Default or Event of Default shall have occurred and be continuing,
(ii) the Person which is being acquired shall be primarily engaged in the
business of manufacturing and/or processing steel or steel-related products and
(iii) there is no reasonable likelihood of a Material Adverse Effect resulting
therefrom and (y) enter into a partnership or joint venture if such partnership
or joint venture (each, a "New JV") shall be primarily engaged in the business
of manufacturing and/or processing steel or steel-related products and that,
after giving effect to such New JV, there is no reasonable likelihood of a
Material Adverse Effect resulting therefrom.
(c) Holdings and the Borrower shall not, and shall not permit
any other Subsidiary to, amend or modify its certificate of incorporation or
by-laws or, in the case of the Double Eagle, its Joint Venture Agreement if such
amendment or modification could have a Material Adverse Effect.
(d) Holdings and the Borrower shall not, and shall not permit
any other Subsidiary to, be or become a "holding company" or a "subsidiary
company" of a "holding company" or a "subsidiary company" within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
(e) Neither Holdings nor the Borrower shall have or create
any Subsidiaries except those set forth on Schedule 6.3(e) or otherwise
permitted to be formed pursuant to, and subject to the terms and provisions of,
Section 6.6(i).
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Section 6.4 Sale of Assets. Holdings and the Borrower shall not,
and shall not permit any other Subsidiary to, convey, lease, sell, transfer or
otherwise dispose of (or agree to do so at any future time) all or any part of
its property or assets and shall not enter into, or agree to, any transaction
involving or in connection with the sale and/or securitization of any of its
receivables, except (i) sales of inventory in the ordinary course of business,
(ii) sales of equipment or other assets which are uneconomic, obsolete or no
longer useful in its business, (iii) sales of assets described on Schedule 6.4
hereof for not less than the fair market value (as determined by Holdings' or
the Borrower's Board of Directors in good faith), (iv) the sale or other
disposition of other assets in an aggregate amount not to exceed $25,000,000
(based on the fair market value of such assets at the time of such sale or other
disposition) during the term of this Agreement and until all Obligations are
paid in full and (v) the Borrower may transfer all of its interests in any joint
venture or Subsidiary, including Double Eagle, existing on the Restatement
Effective Date to Holdings or to any wholly- owned Subsidiary of Holdings.
Section 6.5 Dividends. Holdings and the Borrower shall not, and
shall not permit any other Subsidiary to, declare or pay any dividends (other
than dividends payable solely in common stock), or return any capital to, its
stockholders or authorize or make any other distribution, payment or delivery of
property or cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, any shares of any class of its
capital stock now or hereafter outstanding (or any options or warrants issued
with respect to its capital stock), or set aside any funds for any of the
foregoing purposes (all the foregoing "Dividends"), except that if no Default or
Event of Default shall have occurred and shall be continuing after giving effect
thereto, (i) dividends may be made on Holdings' common stock in an aggregate
amount in any fiscal year, when added to any dividends made on the Borrower's
common stock pursuant to the subclause (i) of Section 6.5 of the Existing Credit
Agreement in such fiscal year, do not exceed the greater of (A) $8,000,000 and
(B) 50% of the cumulative consolidated Net Income (if positive) of Holdings for
the immediately preceding four fiscal quarters, (ii) dividends may be made to
Holdings
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by the Borrower or any other Subsidiary, (iii) dividends may be made on any
preferred stock issued by Holdings or the Borrower, if in each case, after
giving effect thereto, Holdings and the Borrower shall be in compliance with
Section 6.1, (iv) Holdings may make purchases of its common stock in the open
market at the then prevailing market prices solely for the purposes of matching
contributions of any employee benefit or other similar type plan now or
hereafter maintained by the Borrower, and (v) Holdings and the Borrower may
repurchase shares of its common stock and options and warrants thereon granted
to employees and directors of Holdings and the Borrower in accordance with the
terms of any employee benefit or other similar type plan now or hereafter
maintained by Holdings and the Borrower.
Section 6.6 Advances, Investments and Loans. Holdings and the
Borrower shall not, and shall not permit any other Subsidiary to, lend money or
credit or make advances to any Person, or directly or indirectly purchase or
acquire any stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any Person, except that the following shall be
permitted:
(a) accounts receivable, if created or acquired in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms;
(b) loans and advances to Holdings or any of its Subsidiaries
by any of its Subsidiaries;
(c) loans and advances by Holdings to any of its
Subsidiaries;
(d) loans and advances in cash to, or the provision of credit
in the nature of guarantees for the benefit of, Double Eagle and any New JV in
an aggregate outstanding amount not to exceed the greater of (i) $55,000,000 and
(ii) 10% of Tangible Net Worth;
(e) loans and advances by Holdings or any Subsidiary to their
employees in the ordinary course of its business not exceeding $250,000 in the
aggregate at any one time outstanding;
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(f) Holdings, the Borrower and the other Subsidiaries may
acquire and hold Cash Equivalents;
(g) transactions permitted pursuant to Sections 6.3(a) and
6.3(b);
(h) capital contributions by Holdings to Double Eagle to the
extent necessary to fund its operating expenses incurred in the ordinary course
of business and to fund capital expenditures of the Double Eagle; and
(i) capital contributions solely in cash to any newly formed
Subsidiary, provided, however, that if any such capital contributions exceeds
$10,000,000 in the aggregate to all such Subsidiaries, Holdings shall cause each
such Subsidiary to guaranty the Obligations to the extent of the total amount of
capital contributions to any such Subsidiary, and Holdings shall cause to be
delivered to the Agent a guaranty agreement in form and substance satisfactory
to the Agent and the Banks, together with such other documents and opinions of
counsel in connection with the foregoing as may be reasonably requested by the
Agent or its counsel.
Section 6.7 Transactions with Affiliates. Holdings and the
Borrower shall not, shall not permit any other Subsidiary to and shall use their
best efforts to not permit Double Eagle or any New JV, to enter into any
transaction or series of related transactions, whether or not in the ordinary
course of business, with any Affiliate (other than Worthington, Double Eagle or
any New JV), other than on terms and conditions at least as favorable to
Holdings or the Borrower or such Subsidiary as would be obtainable by Holdings
or the Borrower or such Subsidiary at the time in a comparable arm's-length
transaction with a Person other than an Affiliate, except as set forth in
Schedule 6.7 and except that the Borrower may purchase pellets from Eveleth
Mines for use in the Borrower's business.
Section 6.8 Changes in Business. Holdings and the Borrower shall
not, shall not permit any other Subsidiary to and shall use its best efforts to
not permit Double Eagle or any New JV to, enter into any business which is
substantially different from that conducted by Holdings, the Borrower, such
Subsidiary, Double Eagle or
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any New JV which is in existence on the Restatement Effective Date, as the case
may be, on the Restatement Effective Date.
Section 6.9 Certain Restrictions. Holdings and the Borrower
shall not, shall not permit any other Subsidiary to, and shall use their best
efforts to not permit Double Eagle or any New JV to, enter into any agreement
which restricts the ability of Holdings, the Borrower, any Subsidiary, any such
New JV or the Double Eagle, as the case may be, to (a) enter into amendments,
modifications or waivers of the Loan Documents, (b) sell, transfer or otherwise
dispose of its assets, (c) create, incur, assume or suffer to exist any Lien
upon any of its property, (d) create, incur, assume, suffer to exist or
otherwise become liable with respect to any Indebtedness, or (e) pay any
Dividend; provided, however, (i) agreements governing Indebtedness secured by
any Lien permitted pursuant to Section 6.2(a), (f), (g), (h) or (j) which
contain restrictions of the types referred to in clauses (b) or (c) with respect
to the property secured thereby shall be permitted and (ii) any such agreements
may contain the restriction of the types referred to herein to the extent such
restrictions are not more restrictive to Holdings, the Borrower, its
Subsidiaries, such New JV or Double Eagle than those set forth in this
Agreement.
Section 6.10 Fiscal Year; Fiscal Quarter. Holdings and the Borrower
shall not, and shall not permit any Subsidiary to, change its fiscal year or any
fiscal quarter.
Section 6.11 Plans. Holdings and the Borrower shall not, and shall
not permit any member of their ERISA Controlled Group to, take any action which
would increase the aggregate present value of the Unfunded Benefit Liabilities
under all Plans to an amount in excess of 10% of Plan Assets.
SECTION 7. EVENTS OF DEFAULT
Section 7.1 Events of Default. Each of the following events,
acts, occurrences or conditions shall constitute an Event of Default under this
Agreement, regardless of whether such event, act, occurrence or
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condition is voluntary or involuntary or results from the operation of law or
pursuant to or as a result of compliance by any Person with any judgment,
decree, order, rule or regulation of any court or administrative or
governmental body:
(a) Failure to Make Payments. The Borrower shall default in
the payment when due of any principal of or interest on the Loans, or fail to
reimburse the Issuing Bank for any payment or disbursement made by the Issuing
Bank under any Letter of Credit on the date so made in accordance with Section
2A, or any Fees or any other amounts owing hereunder or under any other Loan
Document; and such default (except in the case of a failure to make payment of
any principal on the Loans and to reimburse for the drawings made under any
Letter of Credit) shall continue unremedied for a period of five (5) days.
(b) Breach of Representation or Warranty. Any representation
or warranty made by Holdings or the Borrower herein or in any other Loan
Document or in any certificate or statement delivered pursuant hereto or thereto
shall prove to be false or misleading in any material respect on the date as of
which made or deemed made.
(c) Breach of Covenants.
(i) Holdings or the Borrower shall fail to perform or observe
any agreement, covenant or obligation arising under Sections 5.1(f), 5.9 and 6.1
through 6.11.
(ii) Holdings or the Borrower shall fail to perform or observe
any agreement, covenant or obligation arising under this Agreement (except those
described in clauses (a), (b) and (c)(i) above), and such failure shall continue
for thirty (30) days.
(iii) Holdings, the Borrower or any other Subsidiary shall fail
to perform or observe any agreement, covenant or obligation arising under any
provision of the Loan Documents other than this Agreement, which failure shall
continue after the end of the applicable grace period provided, if any, therein.
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(d) Default Under Other Agreements. Holdings or the Borrower
shall default in the payment when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), of any amount owing in respect
of any Indebtedness (other than the Obligations) which, individually or in the
aggregate, equals or exceeds $5,000,000; or Holdings or the Borrower shall
default in the performance or observance of any obligation or condition with
respect to any such Indebtedness or any other event shall occur or condition
shall exist, if the effect of such default or event or condition is to
accelerate the maturity of any such Indebtedness or to permit (after giving
effect to any applicable grace period) the holder or holders thereof, or any
trustee or agent for such holders, to accelerate the maturity of any such
Indebtedness, or any such Indebtedness shall become or be declared to be due and
payable prior to its stated maturity.
(e) Bankruptcy, etc. (i) Holdings, the Borrower or any other
Subsidiary shall commence a voluntary case concerning itself under the
Bankruptcy Code; or (ii) an involuntary case is commenced against Holdings, the
Borrower or any other Subsidiary and the petition is not dismissed within 60
days after commencement of the case; or (iii) a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or substantially all
of the property of Holdings, the Borrower or any other Subsidiary or Holdings,
the Borrower or any other Subsidiary commences any other proceedings under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to Holdings, the Borrower or such Subsidiary or
there is commenced against Holdings, the Borrower or any other Subsidiary any
such proceeding which remains undismissed for a period of 60 days; or (iv) any
order of relief or other order approving any such case or proceeding is entered;
or (v) Holdings, the Borrower or any other Subsidiary is adjudicated insolvent
or bankrupt; or (vi) Holdings, the Borrower or any other Subsidiary suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 60 days; or (vii)
Holdings, the Borrower or any other Subsidiary makes a general assignment for
the benefit of creditors; or (viii) Holdings, the Borrower or any other
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Subsidiary shall fail to pay, or shall state in writing that it is unable to
pay, or shall be unable to pay, its debts generally as they become due; or (ix)
Holdings, the Borrower or any other Subsidiary shall by any act or failure to
act consent to, approve of or acquiesce in any of the foregoing; or (x) any
corporate action is taken by Holdings, the Borrower or any other Subsidiary for
the purpose of effecting any of the foregoing.
(f) ERISA. (i) Any Termination Event shall occur, or (ii)
any Plan (other than a Multiemployer Plan) shall incur an "accumulated funding
deficiency" (as defined in Section 412 of the Code or Section 302 of ERISA),
whether or not waived or (iii) Holdings, the Borrower or a member of their ERISA
Controlled Group shall have engaged in a transaction which is prohibited under
Section 4975 of the Code or Section 406 of ERISA which would result in the
imposition of liability in excess of $100,000 on Holdings, the Borrower or any
member of their ERISA Controlled Group, or (iv) Holdings, the Borrower or any
member of their ERISA Controlled Group shall fail to pay when due an amount
which it shall have become liable to pay to the PBGC, any Plan or a trust
established under Title IV of ERISA, or (v) a condition shall exist by reason of
which the PBGC would then be entitled to obtain a decree adjudicating that an
ERISA Plan must be terminated or have a trustee appointed to administer any
ERISA Plan, or (vi) Holdings, the Borrower or a member of their ERISA Controlled
Group suffers a partial or complete withdrawal from a Multiemployer Plan; where
the events or conditions described in the preceding clauses (i) through (vi)
individually or in the aggregate would result in liability of $5,000,000 or
more.
(g) Change in Control. A Change in Control has occurred.
(h) Judgments. One or more judgments or decrees (including
those resulting from an Environmental Claim) in an aggregate amount of
$5,000,000 or more shall be entered by a court or courts of competent
jurisdiction against Holdings, the Borrower or any other Subsidiary (other than
any judgment as to which, and to the extent, a reputable insurance company has
acknowledged coverage of such claim in writing) and (i) any such judgment or
decree shall not be stayed, discharged, paid, bonded or vacated within 30 days
thereof or (ii) enforcement pro-
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ceedings shall be commenced by any creditor on any such judgment or decree and
such proceedings shall not be stayed or bonded within 5 days.
(i) Guaranty. The Holdings Guaranty, or any other guaranaty
agreement delivered pursuant to the terms of Section 6.6(i) of this Agreement,
shall cease to be in full force and effect and enforceable or Holdings, or any
other guarantor party to any such guaranty agreement, as the case may be, shall
disaffirm or disavow its obligations thereunder.
Section 7.2 Rights and Remedies. Upon the occurrence of any
Event of Default described in Section 7.1(e), the Commitments shall
automatically and immediately terminate and the unpaid principal amount of and
any and all accrued interest on the Loans and any and all accrued Fees and other
Obligations shall automatically become immediately due and payable, with all
additional interest from time to time accrued thereon and without presentation,
demand, or protest or other requirements of any kind (including, without
limitation, valuation and appraisement, diligence, presentment, notice of intent
to demand or accelerate and notice of acceleration), all of which are hereby
expressly waived by Holdings and the Borrower, and the obligation of each Bank
to make any Loan hereunder shall thereupon terminate; and upon the occurrence
and during the continuance of any other Event of Default, the Agent shall at the
request, or may with the consent, of the Required Banks, by written notice to
the Borrower, (i) declare that the Revolving Loan Commitments are terminated,
whereupon the Revolving Loan Commitments and the obligation of each Bank to make
any Loan hereunder shall immediately terminate, (ii) declare the unpaid
principal amount of and any and all accrued and unpaid interest on the Loans and
any and all accrued Fees and other Obligations to be, and the same shall
thereupon be, immediately due and payable with all additional interest from time
to time accrued thereon and without presentation, demand, or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and notice of acceleration), all of which are hereby expressly waived by the
Borrower, (iii) terminate any stand-by Letter of Credit upon 30 days' written
notice to the Borrower and the beneficiary thereunder, and (iv) demand the
Borrower
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to deposit (and the Borrower agrees that upon receipt of such demand it will
promptly deposit) with the Agent cash or Cash Equivalents of the type described
in subclauses (i), (ii) and (iv) of the definition of Cash Equivalents in an
amount equal to the Letter of Credit Outstandings, which deposit shall be held
by the Agent for the benefit of the Issuing Bank as security for, and to
provide for the payment of, the Letter of Credit Outstandings.
SECTION 8. THE AGENT
Section 8.1 Appointment. Each Bank hereby irrevocably designates
and appoints The Chase Manhattan Bank as the Agent of such Bank under this
Agreement, each other Loan Document to take such action on its behalf under the
provisions of this Agreement, each other Loan Document and to exercise such
powers and perform such duties as are expressly delegated to the Agent by the
terms of this Agreement, each other Loan Document, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Bank, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities on the part of the Agent
shall be read into this Agreement or otherwise exist against the Agent. The
provisions of this Section are solely for the benefit of the Agent, and the
Banks and the Borrower and the Borrower's Subsidiaries shall not have any rights
as a third party beneficiary or otherwise under any of the provisions hereof.
In performing its functions and duties hereunder and under the other Loan
Documents, the Agent shall act solely as the agent of the Banks and does not
assume (and shall not be deemed to have assumed) any obligation of relationship
of trust or agency with or for the Borrower, its Subsidiaries or any of their
respective successors and assigns.
Section 8.2 Delegation of Duties. The Agent may execute any of
its duties under this Agreement, the other Loan Documents by or through agents
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct
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of any agents or attorneys-in-fact selected by it with reasonable care.
Section 8.3 Exculpatory Provisions. The Agent shall not be (i)
liable for any action lawfully taken or omitted to be taken by it or any Person
described in Section 8.2 under or in connection with this Agreement, any other
Loan Document (except for its or such Person's own gross negligence or willful
misconduct), or (ii) responsible in any manner to any of the Banks for any
recitals, statements, representations or warranties made by the Borrower or any
of its Subsidiaries contained in this Agreement, any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received under or in connection with, this Agreement, any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement, any other Loan Document or for any failure of
the Borrower or any of its Subsidiaries to perform their obligations hereunder
or thereunder. The Agent shall not be under any obligation to any Bank to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, any other Loan
Document, or to inspect the properties, books or records of the Borrower or any
of its Subsidiaries. This Section is intended solely to govern the relationship
between the Agent, on the one hand, and the Banks, on the other.
Section 8.4 Reliance by the Agent. The Agent shall be entitled
to rely, and shall be fully protected in relying, upon any Note, writing,
resolution, notice, consent, certificate, affidavit, letter, cablegram,
telegram, telecopy, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower or any of its Subsidiaries), independent accountants and other experts
selected by the Agent. The Agent may deem and treat the payee of any Note as
the owner thereof for all purposes unless it shall have received an executed
Transfer Supplement in respect thereof. The Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Required Banks as
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it deems appropriate or it shall first be indemnified to its satisfaction by
the Banks against any and all liability and expense which may be incurred by it
by reason of taking or continuing to take any such action. The Agent shall
each in all cases be fully protected in acting, or in refraining from acting,
under this Agreement and the other Loan Documents in accordance with a request
of the Required Banks, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Banks and all future holders of
the Notes.
Section 8.5 Notice of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
unless it has received notice from a Bank or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, it shall promptly give notice thereof to the other Banks. The Agent
shall take such action with respect to such Default or Event of Default as shall
be directed by the Required Banks; provided that unless and until the Agent
shall have received such directions, it may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable and in the best interests of the
Banks.
Section 8.6 Non-Reliance on the Agent and Other Banks. Each Bank
expressly acknowledges that neither the Agent nor any of their respective
officers, directors, employees, agents, attorneys-in-fact or affiliates has made
any representations or warranties to it and that no act by the Agent hereafter
taken, including, without limitation, any review of the affairs of any Loan
Party, shall be deemed to constitute any representation or warranty by the
Agent. Each Bank represents and warrants to the Agent that it has,
independently and without reliance upon the Agent or any other Bank and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
prospects, financial and other conditions and creditworthiness of the Borrower
and made its own decision to make its Loans hereunder and enter into this
Agreement. Each Bank also represents that it will, independently and without
reliance upon the Agent or any other Bank, and based on such documents and
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information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, prospects, financial and other
condition and creditworthiness of the Borrower. Except for notices, reports
and other documents expressly required under the Loan Documents, to be
furnished to the Banks by the Agent, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the business, operations, property, prospects, financial and other
condition or creditworthiness of the Borrower which may come into the
possession of the Agent or any of its respective officers, directors,
employees, agents, attorneys-in-fact or affiliates.
Section 8.7 Indemnification. The Banks agree to indemnify the
Agent and its respective officers, directors, employees, representatives and
agents (to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their Pro Rata
Shares, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever (including, without limitation, the fees and
disbursements of counsel for the Agent or such Person in connection with any
investigative, administrative or judicial proceeding commenced or threatened,
whether or not the Agent or such Person shall be designated a party thereto)
that may at any time (including, without limitation, at any time following the
payment of the Obligations) be imposed on, incurred by or asserted against the
Agent or such Person as a result of, or arising out of, or in any way related to
or by reason of, the Loans, Letters of Credit or any of the other transactions
contemplated hereby or the execution, delivery or performance of any Loan
Document (but excluding any such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
solely from the gross negligence or willful misconduct of the Agent or such
Person as finally determined by a court of competent jurisdiction).
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Section 8.8 The Agent in Its Respective Individual Capacity. The
Agent and its respective affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower as though the Agent
were not the Agent hereunder. With respect to Loans made or renewed by it and
any Note issued to it, the Agent shall have the same rights and powers under
this Agreement as any Bank and may exercise the same as though they were not the
Agent and the terms "Bank" and "Banks" shall include each of the Agent in its
individual capacity.
Section 8.9 Successor Agent. The Agent may resign as Agent upon
30 days' notice to the Borrower and the Banks. The Agent may be removed at any
time, with or without cause, upon 30 days' notice from the Required Banks. If
the Agent shall resign or be removed as Agent under this Agreement, then the
Required Banks during such 30-day period shall appoint from among the Banks a
successor administrative agent, whereupon such successor administrative agent
shall succeed to the rights, powers and duties of the Agent and the term "Agent"
shall mean such successor administrative agent effective upon its appointment,
and the former Agent's rights, powers and duties as Agent shall be terminated,
without any other or further act or deed on the part of such former Agent or any
of the parties to this Agreement or any holders of the Notes. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Section 8 and Section 9.1 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement.
SECTION 9. MISCELLANEOUS
Section 9.1 Payment of Expenses, Indemnity, etc.
(a) Whether or not the Restatement Effective Date occurs, any
Loans are made, any Letters of Credit are issued or the transactions
contemplated hereby are consummated, the Borrower shall pay all reasonable
out-of-pocket costs, fees and expenses of the Agent in connection with the
negotiation, preparation, execution and delivery of the Loan Documents and the
documents and instruments each referred to therein and the satisfaction
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of the conditions precedent with respect thereto and any amendment, waiver or
consent relating to any of the Loan Documents (including, without limitation,
as to each of the foregoing, the reasonable fees and disbursements of Skadden,
Arps, Slate, Meagher & Flom LLP, special counsel to the Agent) and of the Agent
and each Bank in connection with the preservation of rights under, and
enforcement of, the Loan Documents and the documents and instruments each
referred to therein or in connection with any workout, restructuring or
rescheduling of the Obligations (including, without limitation, the reasonable
fees and disbursements of counsel for the Agent and for each of the Banks).
(b) Whether or not the Restatement Effective Date occurs, any
Loans are made, any Letters of Credit are issued or the transactions
contemplated hereby are consummated, the Borrower shall pay, and hold the Agent,
and each of the Banks harmless from and against, any and all present and future
stamp, excise and other similar taxes with respect to the foregoing matters and
hold the Agent, and each Bank harmless from and against any and all liabilities
with respect to or resulting from any delay or omission (other than to the
extent attributable to the Agent or such Bank) to pay such taxes.
(c) Whether or not the Restatement Effective Date occurs, any
Loans are made, any Letters of Credit are issued or the transactions
contemplated hereby are consummated, the Borrower shall indemnify the Agent and
each Bank, their respective officers, directors, employees, representatives and
agents (each an "Indemnitee") from, and hold each of them harmless against, any
and all losses, liabilities, claims, damages, expenses, obligations, penalties,
actions, judgments, suits, costs or disbursements of any kind or nature
whatsoever (including, without limitation, the reasonable fees and disbursements
of counsel for such Indemnitee in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
such Indemnitee shall be designated a party thereto) that may at any time
(including, without limitation, at any time following the payment of the
Obligations) be imposed on, asserted against or incurred by any Indemnitee as a
result of, or arising out of, or in any way related to or by reason of, (i) the
making of any Loans, issuance of any Letters of Credit, any of the transactions
contem-
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plated hereby or the execution, delivery or performance of any Loan
Document, (ii) any violation by Holdings, the Borrower or any other Subsidiary
or their respective Environmental Affiliates of any applicable Environmental
Law, (iii) any Environmental Claim arising out of the management, use, control,
ownership or operation of property or assets by Holdings, the Borrower or any
other Subsidiary or any of their respective Environmental Affiliates, including,
without limitation, all on-site and off-site activities involving Materials of
Environmental Concern and all activities related to matters disclosed in
Schedule 4.15 and (iv) the breach of any environmental representation or
warranty set forth in Section 4.15 (but excluding, as to all of the foregoing,
any such losses, liabilities, claims, damages, expenses, obligations, penalties,
actions, judgments, suits, costs or disbursements incurred solely by reason of
the gross negligence or willful misconduct of the Indemnitee as finally
determined by a court of competent jurisdiction).
If and to the extent that the obligations of the Borrower under
this Section are unenforceable for any reason, the Borrower agrees to make the
maximum contribution to the payment and satisfaction of such obligations which
is permissible under applicable law. The Borrower's obligations under this
Section shall survive the termination of this Agreement and the payment of the
Obligations.
Section 9.2 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance of
any Event of Default, each Bank is hereby authorized at any time or from time to
time, without presentment, demand, protest or other notice of any kind to
Holdings, the Borrower or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and apply any and all deposits
(general or special, time or demand, provisional or final) and any other
indebtedness at any time held or owing by such Bank (including, without
limitation, by branches and agencies of such Bank wherever located) to or for
the credit or the account of Holdings or the Borrower against and on account of
the Obligations of Holdings or Borrower to such Bank under this Agreement and
under any of the other Loan Documents, including, without limitation, all inter-
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ests in Obligations purchased by such Bank pursuant to Section 9.7, and all
other claims of any nature or description arising out of or connected with this
Agreement, any other Loan Document, irrespective of whether or not such Bank
shall have made any demand hereunder and although said Obligations, liabilities
or claims, or any of them, shall be contingent or unmatured. After the
exercise of any right of set off by any Bank in accordance with the terms
hereof, such Bank shall notify Holdings or the Borrower, as the case may be, of
such exercise, provided, however, that the failure of such Bank to give any
such notice shall in no event affect in any manner the obligations of Holdings
or the Borrower hereunder or under any other Loan Document or the rights and
remedies of the Agent or such Bank hereunder or under any other Loan Document.
Section 9.3 Notices. Except as otherwise expressly provided
herein, all notices, requests and demands to or upon the respective parties
hereto to be effective shall be in writing (including by telecopy, telex or
nationally recognized overnight courier service), and shall be deemed to have
been duly given or made when delivered by hand, or five days after being
deposited in the United States mail, postage prepaid, or, in the case of telex
notice, when sent, answerback received, or, in the case of telecopy notice, when
sent with receipt confirmed, or, in the case of a nationally recognized
overnight courier service, one Business Day after delivery to such courier
service, addressed, in the case of each party hereto, at its address specified
opposite its signature below, or to such other address as may be designated by
any party in a written notice to the other parties hereto, provided that notices
and communications to the Agent pursuant to Section 2 shall not be effective
until received by the Agent.
Section 9.4 Successors and Assigns; Participations; Assignments.
(a) Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of Holdings, the Borrower, the Banks, the Agent,
all future holders of the Notes and their respective successors and assigns,
except that neither Holdings nor the Borrower may assign or transfer any of its
rights or obligations under this Agreement without the prior written consent of
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each Bank. No Bank may participate, assign or sell any of its Credit Exposure
(as defined in clause (b) below) except as required by operation of law, in
connection with the merger, consolidation or dissolution of any Bank or as
otherwise provided in this Section 9.4.
(b) Participations. Any Bank may at any time sell to one or
more banks or other entities (each a "Participant") participating interests in
any Loan owing to such Bank, any Note held by such Bank, the Revolving Loan
Commitment of such Bank and or any other interest of such Bank hereunder (all of
the foregoing in respect of any such Bank, its "Credit Exposure").
Notwithstanding any such sale by a Bank of participating interests to a
Participant, such Bank's rights and obligations under this Agreement shall
remain unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any such Note for all purposes
under this Agreement, and the Borrower and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. The Borrower agrees that if any Obligations
are due and unpaid, or shall have been declared or shall have become due and
payable upon the occurrence and during the continuance of an Event of Default,
each Participant shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement and any Note to the
same extent as if the amount of its participating interest were owing directly
to it as a Bank under this Agreement or any Note, provided that such right of
setoff shall be subject to the obligations of such Participant to share with the
Banks, and the Banks agree to share with such Participant, as provided in
subsection 9.7. The Borrower also agrees that each Participant shall be
entitled to the benefits of Sections 2.17, 2.18 and 2.19, provided that no such
Participant shall be entitled to receive any greater amount pursuant to such
Sections than the transferor Bank would have been entitled to receive in respect
of the amount of the participation transferred by such transferor Bank to such
Participant had no such transfer occurred. Each Bank agrees that any agreement
between such Bank and any such Participant in respect of such participating
interest shall not restrict such Bank's right to agree to any amendment,
supplement, waiver or modification to this Agreement, or any other Loan
Document, except where the result of any of the
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<PAGE> 96
foregoing would be to extend the final maturity of any Obligation, reduce the
rate or extend the time of payment of interest thereon, reduce the principal
amount thereof, reduce the amount of any fees payable hereunder, or amend this
Section 9.4(b).
(c) Assignments to Purchasing Banks. Subject to the prior
written consent of the Borrower and Issuing Bank (which consent, in each case,
shall not be unreasonably withheld), any Bank may at any time and from time to
time assign to one or more additional banks or financial institutions
("Purchasing Banks") all or any part (in the amount of at least $10,000,000 or
integral multiples of $1,000,000 in excess thereof or, if less, the entire
amount of such Bank's Credit Exposure) of its Credit Exposure pursuant to a
supplement to this Agreement, substantially in the form of Exhibit H hereto (a
"Transfer Supplement"), executed by such Purchasing Bank, such transferor Bank,
and the Agent. Upon (i) such execution of such Transfer Supplement, (ii)
delivery of an executed copy thereof to the Borrower and the Agent, (iii)
payment by such Purchasing Bank to such transferor Bank of an amount equal to
the purchase price agreed between such transferor Bank and such Purchasing Bank
and (iv) payment by the transferor Bank to the Agent of a non-refundable
assignment fee of $2,500, such transferor Bank shall be released from its
obligations hereunder to the extent of such assignment and such Purchasing Bank
shall for all purposes be a Bank party to this Agreement to the extent of such
assignment and shall have all the rights and obligations of a Bank under this
Agreement to the same extent as if it were an original party hereto, and no
further consent or action by the Borrower, the Banks or the Agent shall be
required. Such Transfer Supplement shall be deemed to amend this Agreement to
the extent, and only to the extent, necessary to reflect the addition of such
Purchasing Bank as a Bank and the resulting adjustment of the Revolving Loan
Commitments, if any, arising from the purchase by such Purchasing Bank of all or
a portion of the Credit Exposure of such transferor Bank. Promptly after the
consummation of any transfer to a Purchasing Bank pursuant hereto, the
transferor Bank, the Agent and the Borrower shall make appropriate arrangements
so that a replacement Note is issued to such transferor Bank and a new Note,
dated the date of such transfer, is issued to such Purchasing Bank, in each case
in principal amounts reflecting such transfer.
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Notwithstanding the foregoing, any Bank may at any time assign and pledge all
or any portion of its Loans and Notes to a Federal Reserve Bank as collateral
in accordance with Regulation A of the Board of Governors of the Federal
Reserve System and any operating circular issued by such Federal Reserve Bank.
(d) Disclosure of Information. Holdings and the Borrower
authorize each Bank to disclose to any Participant or Purchasing Bank (each, a
"Transferee") and any prospective Transferee any and all financial and other
information in such Bank's possession concerning Holdings and the Borrower which
has been delivered to such Bank by Holdings and the Borrower pursuant to this
Agreement or which has been delivered to such Bank by Holdings and the Borrower
in connection with such Bank's credit evaluation of Holdings and the Borrower
prior to entering into this Agreement, provided that any such Transferee shall
be subject to the provisions of Section 9.17.
Section 9.5 Amendments and Waivers. Neither this Agreement, any
Note, any other Loan Document, nor any terms hereof or thereof may be amended,
supplemented, modified or waived except in accordance with the provisions of
this Section. The Required Banks, Holdings and the Borrower may, from time to
time, enter into written amendments, supplements, modifications or waivers for
the purpose of adding, deleting, changing or waiving any provisions to this
Agreement, the Notes, or the other Loan Documents to which Holdings and/or the
Borrower is a party, provided, that no such amendment, supplement, modification
or waiver shall (a) extend either the Maturity Date or reduce the rate of
interest or extend the time of payment of interest or principal on any
Obligations, or reduce the principal amount of any Obligations or reduce any fee
payable to the Banks hereunder, or change the amount of any Revolving Loan
Commitment of any Bank, or increase the payment obligation of any Bank to the
Swingline Lender under Section 2.2(b) hereof or amend, modify or waive any
provision of this Section 9.5 or the definition of Required Banks, or consent to
or permit the assignment or transfer by Holdings or the Borrower of any of its
rights and obligations under this Agreement or any other Loan Document in each
case without the written consent of all the Banks, or (b) amend, modify or waive
any provision of Section 8 or any other
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<PAGE> 98
provision of any Loan Document if the effect thereof is to affect the rights or
duties of the Agent, without the written consent of the then Agent. Any such
amendment, supplement, modification or waiver shall apply to each of the Banks
equally and shall be binding upon the Borrower, the Banks, the Agent and all
future holders of the Notes. In the case of any waiver, Holdings, the
Borrower, the Banks and the Agent shall be restored to their former position
and rights hereunder and under the outstanding Notes, and any Default or Event
of Default waived shall be deemed to be cured and not continuing, but no such
waiver shall extend to any subsequent or other Default or Event of Default, or
impair any right consequent thereon.
Section 9.6 No Waiver; Remedies Cumulative. No failure or delay
on the part of the Agent or any Bank or any holder of a Note in exercising any
right, power or privilege hereunder, under any other Loan Document and no course
of dealing between Holdings, the Borrower and the Agent or any Bank or the
holder of any Note shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, power or privilege hereunder or under any other
Loan Document preclude any other or further exercise thereof of the exercise of
any other right, power or privilege hereunder or thereunder. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Agent or any Bank or the holder of any Note would
otherwise have. No notice to or demand on the Borrower in any case shall
entitle Holdings or the Borrower to any other or further notice or demand in
similar or other circumstances (except to the extent such notice or demand is
expressly provided hereunder or required under applicable law) or constitute a
waiver of the rights of the Agent, the Banks or the holder of any Note to take
any other or further action in any circumstances without notice or demand.
Section 9.7 Sharing of Payments. Each of the Banks agrees that
if it should receive any amount hereunder (whether by voluntary payment, by
realization upon security, by the exercise of the right of setoff or banker's
lien, by counterclaim or cross action, by the enforcement of any right under the
Loan Documents or otherwise) which is applicable to the payment of any Loans or
other Obligations, of a sum which with respect to the related sum or sums
received by other Banks is in
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a greater proportion than the total of such Loans or other Obligations then
owed and due to such Bank bears to the total of such Loans or other Obligations
then owed and due to all of the Banks immediately prior to such receipt, then
such Bank receiving such excess payment shall purchase for cash without
recourse or warranty from the other Banks an interest in such Loans or other
Obligations owing to such Banks in such amount as shall result in a
proportional participation by all of the Banks then owed such Loans or other
Obligations in such amount; provided that if all or any portion of such excess
amount is thereafter recovered from such Bank, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, but without
interest.
Section 9.8 Governing Law; Submission to Jurisdiction;
Appointment of Agent.
(a) THIS AGREEMENT, THE OTHER LOAN DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
(b) Any legal action or proceeding with respect to this
Agreement, any other Loan Document and any action for enforcement of any
judgment in respect thereof may be brought in the courts of the State of New
York or of the United States of America for the Southern District of New York,
and, by execution and delivery of this Agreement, Holdings and the Borrower each
hereby accepts for itself and in respect of its property, generally and
unconditionally, the non-exclusive jurisdiction of the aforesaid courts and
appellate courts from any thereof. Holdings and the Borrower each irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to Holdings or the Borrower, as the case may
be, at its address set forth opposite its signature below.
(c) Each of Holdings and the Borrower hereby irrevocably
waives any objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in
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<PAGE> 100
connection with this Agreement or any other Loan Document brought in the courts
referred to above and hereby further irrevocably waives and agrees not to plead
or claim in any such court that any such action or proceeding brought in any
such court has been brought in an inconvenient forum. Nothing herein shall
affect the right of the Agent, any Bank or any holder of a Note to serve
process in any other manner permitted by law or to commence legal proceedings
or otherwise proceed against Holdings or the Borrower in any other
jurisdiction.
Section 9.9 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument.
Section 9.10 Headings Descriptive. The headings of the several
Sections and subsections of this Agreement are inserted for convenience only and
shall not in any way affect the meaning or construction of any provision of this
Agreement.
Section 9.11 Marshalling; Recapture. Neither the Agent, nor any Bank
shall be under any obligation to marshall any assets in favor of Holdings or the
Borrower or any other party or against or in payment of any or all of the
Obligations. To the extent any Bank receives any payment by or on behalf of
Holdings or the Borrower, which payment or any part thereof is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to Holdings or the Borrower or its respective estate, trustee,
receiver, custodian or any other party under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such payment
or repayment, the obligation or part thereof which has been paid, reduced or
satisfied by the amount so repaid shall be reinstated by the amount so repaid
and shall be included within the liabilities of Holdings or the Borrower to such
Bank as of the date such initial payment, reduction or satisfaction occurred.
Section 9.12 Severability. In case any provision in or obligation
under this Agreement or the Notes or the other Loan Documents shall be invalid,
illegal or unenforceable in any jurisdiction, the validity, legality
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<PAGE> 101
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
Section 9.13 Survival. All indemnities set forth herein including,
without limitation, in Sections 2.17, 2.18, 2.19, 2.20, 8.7 and 9.1 shall
survive the execution and delivery of this Agreement and the Notes and the
making and repayment of the Loans hereunder.
Section 9.14 Domicile of Loans. Each Bank may transfer and carry its
Loans at, to or for the account of any branch office, subsidiary or affiliate of
such Bank.
Section 9.15 Limitation of Liability. No claim may be made by the
Borrower or any other Person against the Agent, or any Bank or their Affiliates,
directors, officers, employees, attorneys or agents of any of them for any
special, indirect, consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and each of Holdings and the Borrower hereby
waives, releases and agrees not to sue upon any claim for any such damages,
whether or not accrued and whether or not known or suspected to exist in its
favor.
Section 9.16 Waiver of Trial by Jury. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF HOLDINGS, THE BORROWER, THE AGENT AND THE BANKS HEREBY
IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR ANY MATTER ARISING HEREUNDER OR THEREUNDER.
Section 9.17 Confidentiality. Each Bank agrees that it will not
disclose Confidential Information (as hereinafter defined) to any person other
than (a) as may be consented to by Holdings and the Borrower, (b) as may be
required by law or pursuant to legal process and (c) to prospective Participants
and Purchasing Banks and those of such Bank's directors, officers, employee,
examiners and professional advisors who have a need to know the Confidential
Information in accordance with
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<PAGE> 102
customary banking practices and who receive the Confidential Information having
been made aware of the restrictions of this subsection 9.17. As used herein,
the term "Confidential Information" means all information contained in
materials relating to Holdings, the Borrower and any other Subsidiary provided
to the Banks by Holdings, the Borrower or its representatives or agents other
than (i) information which is at the time so provided or thereafter becomes
generally available to the public other than as a result of a disclosure by one
or more Banks and (ii) information which was available to any Bank prior to its
disclosure to the Banks by Holdings, the Borrower, its representatives or
agents.
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<PAGE> 103
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
ROUGE INDUSTRIES, INC.
By: /s/ Gary P. Latendresse
-----------------------------------
Name: Gary P. Latendresse
Title: Vice President and Chief
Financial Officer
Notice Address:
3001 Miller Road
P.O. Box 1699
Dearborn, Michigan 48121
Telephone: (313) 323-2170
Facsimile: (313) 323-2270
ROUGE STEEL COMPANY
By: /s/ Gary P. Latendresse
-----------------------------------
Name: Gary P. Latendresse
Title: Vice President and Chief
Financial Officer
Notice Address:
3001 Miller Road
P.O. Box 1699
Dearborn, Michigan 48121
Telephone: (313) 323-2170
Facsimile: (313) 323-2270
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<PAGE> 104
THE CHASE MANHATTAN BANK,
as Agent, as Issuing Bank, and
individually as a Bank
By: /s/ James H. Ramage
------------------------------------
Name: James H. Ramage
Title: Vice President
Notice Address:
One Chase Manhattan Plaza
Fifth Floor
New York, New York 10081
Telephone: (212) 552-7784
Facsimile: (212) 552-5555
Attention: James Ramage
NBD BANK
By: /s/ William H. Canney
---------------------------------
Name: William H. Canney
Title: Vice President
Notice Address:
Michigan Banking Division
611 Woodward Avenue
Detroit, Michigan 48226
Telephone: (313) 225-3489
Facsimile: (313) 225-1671
COMERICA BANK
By: /s/ Louis A. Zedan
---------------------------------
Name: Louis A. Zedan
Title: Vice President
Notice Address:
Michigan Corporate Banking
One Detroit Center
P.O. Box 75000
Detroit, Michigan 48275-3265
Telephone: (313) 222-0267
Facsimile: (313) 222-9516
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<PAGE> 105
NATIONAL CITY BANK
By: /s/ Renold D. Thompson, Jr.
----------------------------
Name: Renold D. Thompson, Jr.
Title: Vice President
Notice Address:
National City Center
1900 E. Ninth Street
Cleveland, Ohio 44114
Telephone: (216) 575-3275
Facsimile: (216) 575-9396
<PAGE> 1
EXHIBIT 10.2
- --------------------------------------------------------------------------------
GUARANTY
Dated as of July 30, 1997
by
ROUGE INDUSTRIES, INC.
as Guarantor,
in favor of
THE CHASE MANHATTAN BANK,
as Agent
- --------------------------------------------------------------------------------
<PAGE> 2
GUARANTY
GUARANTY dated as of July 30, 1997 (this "Guaranty"), by Rouge
Industries, Inc., a Delaware corporation ("Holdings" and a "Guarantor") in
favor of The Chase Manhattan Bank, as agent for the Banks referred to below (in
such capacity, together with its successors in such capacity, the "Agent").
W I T N E S S E T H
WHEREAS, pursuant to the terms of the Amended and Restated
Credit Agreement dated as of the date hereof (as the same may be further
amended, supplemented, restated or otherwise modified from time to time, the
"Credit Agreement") among Holdings, Rouge Steel Company, a Delaware corporation
(the "Borrower"), the financial institutions which are or may become a party
thereto (individually a "Bank" and collectively the "Banks") and the Agent, the
Banks have agreed to make Loans (as defined in the Credit Agreement) and to
issue Letters of Credit (as defined in the Credit Agreement) for the account of
the Borrower;
WHEREAS, in connection with a restructuring of the Borrower's
consolidated group, Guarantor has become the owner of all of the outstanding
capital stock of the Borrower and will derive economic benefit from the
proceeds of the Loans and the issuance of Letters of Credit; and
WHEREAS, it is a condition precedent to each of the
above-described extensions of credit to the Borrower that the Guarantor shall
have executed and delivered to the Agent, for the benefit of the Banks, this
Guaranty; and
WHEREAS, the Guarantor desires to execute and deliver this
Guaranty to satisfy the conditions described in the preceding paragraph.
NOW, THEREFORE, in consideration of the premises and for other
good and valuable consideration the
<PAGE> 3
receipt and sufficiency of which are hereby acknowledged and in order to induce
the Banks to make Loans under and issue Letters of Credit pursuant to the
Credit Agreement, the Guarantor agrees with and for the benefit of the Agent
and the Banks, as follows:
Section 1. Definitions. Unless otherwise defined herein, all
capitalized terms used herein and not otherwise defined herein shall have the
meanings set forth in the Credit Agreement. "Guaranteed Parties" shall mean,
collectively, the Agent and the Banks.
Section 2. Guarantee.
A. Guarantee. The Guarantor hereby absolutely,
unconditionally and irrevocably guarantees to each Bank and the Agent and their
respective successors and assigns (as primary obligor and not merely as surety)
the prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the principal of and interest on the Loans made
by the Banks to the Borrower, all reimbursement obligations in respect of
Letters of Credit and all other amounts, including, but not limited to, Fees
and other expenses, from time to time owing to the Banks or the Agent by the
Borrower under the Credit Agreement and all other Loan Documents (the
obligations so described and guaranteed hereunder being herein collectively
called the "Guaranteed Obligations"). The Guarantor hereby further agrees that
if the Borrower shall fail to pay when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, the Guarantor
will promptly pay the same, without any demand or notice whatsoever, and that
in the case of any extension of time of payment or renewal of any of the
Guaranteed Obligations, the same will be promptly paid in full when due
(whether at the extended maturity, by acceleration or otherwise) in accordance
with the terms of such extension or renewal. Any and all payments by the
Guarantor hereunder shall be made free and clear of and without deduction for
any set-off or counterclaim.
B. Obligations Unconditional. The obligations of the
Guarantor under Section 2.A are absolute and unconditional, irrespective of any
lack of value, genuineness, authorization, legality, validity, regularity or
enforceability of the Credit Agreement or the Notes exe-
2
<PAGE> 4
cuted and delivered by the Borrower thereunder, any other Loan Document or any
Letter of Credit (said documents, agreements and instruments being herein
collectively called the "Guaranteed Instruments"), and irrespective of any lack
of value, genuineness, validity, regularity or enforceability of any other
instrument executed and delivered in connection with the Guaranteed
Instruments, or any substitution, release or exchange of any other guarantee or
security for any of the Guaranteed Obligations, and, to the fullest extent
permitted by applicable law, irrespective of any other circumstance whatsoever
which might otherwise constitute a legal or equitable discharge or defense of a
surety or guarantor, it being the intent of this Section 2.B that the
obligations of the Guarantor under Section 2.A shall be absolute and
unconditional under any and all circumstances. Without limiting the generality
of the foregoing, it is agreed that the occurrence of any one or more of the
following shall not affect the liability of the Guarantor hereunder:
(i) at any time or from time to time,
without notice to the Guarantor, the time for any performance of or
compliance with any of the Guaranteed Obligations shall be extended,
or such performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the
provisions of the Guaranteed Instruments shall be done or omitted;
(iii) the maturity of any of the Guaranteed
Obligations shall be accelerated, or any of the Guaranteed Obligations
shall be modified, supplemented or amended in any respect, or any
right under the Guaranteed Instruments shall be waived or any other
guarantee of any of the Guaranteed Obligations or any security
therefor shall be released or exchanged in whole or in part or
otherwise dealt with;
(iv) any lien or security interest granted
to, or in favor of, the Agent or any Bank as security for any of the
Guaranteed
3
<PAGE> 5
Obligations shall fail to be valid or perfected;
(v) any bankruptcy, insolvency,
reorganization, arrangement, readjustment, liquidation or similar
proceeding with respect to the Borrower or any of its respective
properties, or any action taken by any trustee or receiver or by any
court in any such proceeding;
(vi) the disaffirmance or rejection or
purported disaffirmance or purported rejection of any of the
Guaranteed Instruments in any insolvency, bankruptcy or reorganization
proceeding relating to the Guarantor or the Borrower or otherwise;
(vii) whether the Agent or any Bank shall
have taken or failed to have taken any steps to collect or enforce any
obligation or liability from the Borrower or shall have taken any
actions to mitigate its damages;
(viii) whether the Agent or any Bank shall
have taken or failed to have taken any steps to collect or enforce any
guaranty or to proceed against any security for any Guaranteed
Obligation;
(ix) any law, regulation or decree now or
hereafter in effect which might in any manner affect any of the
provisions of this Guaranty, the Credit Agreement, the Notes, any
Letter of Credit or any other Loan Document, or any of the rights,
powers or remedies hereunder or thereunder of the Agent and/or the
Banks, or which might cause or permit to be invoked any alteration in
the time, amount or manner of payment or performance of the
Guarantor's or Borrower's obligations and liabilities hereunder or
thereunder;
(x) any merger or consolidation of either
the Borrower or the Guarantor into or with any other Person or any
sale, lease or transfer of all or any of the assets of either
4
<PAGE> 6
the Borrower or the Guarantor to any other Person;
(xi) any change in the ownership of any
shares of capital stock of either the Borrower or the Guarantor;
(xii) to the extent as may be waived by
applicable law, the benefit of all principles or provisions of law,
statutory or otherwise, which may be in conflict with the terms
hereof;
(xiii) any circumstances which might
otherwise constitute a defense available to or a discharge of the
Guarantor in respect of its obligations or liabilities hereunder or
under the Guaranteed Instruments.
(xiv) any failure on the part of either the
Guarantor or the Borrower to comply with the re- quirements of law,
regulation or order of any governmental authority, political
subdivision or agency thereof.
C. Reinstatement. The obligations of the Guarantor
under this Section 2 shall be automatically reinstated if and to the extent
that for any reason any payment by the Borrower or on behalf of the Borrower
(by the Guarantor or any other Person) is rescinded or must be otherwise
restored by any holder of any of the Guaranteed Obligations, whether as a
preferential or fraudulent transfer under the Bankruptcy Code, any applicable
state insolvency law, or any other similar federal or state law now or
hereafter in effect or otherwise and the Guarantor agrees that it will
indemnify the Agent and each Bank on demand for all reasonable costs and
expenses (including, without limitation, fees of counsel) incurred by the Agent
or such Bank in connection with such rescission or restoration.
D. Subrogation. The Guarantor hereby waives, until the
Credit Agreement and all other Loan Documents are terminated and all
Obligations have been indefeasibly paid in full, any claim, right or remedy
that the Guarantor may now have or hereafter acquire against the Borrower that
arises hereunder including, without limitation,
5
<PAGE> 7
any claim, remedy or right of subrogation, reimbursement, exoneration,
contribution or participation in any claim, right or remedy of subrogation,
reimbursement, exoneration, contribution or participation in any claim, right
or remedy of such Guarantor against the Borrower whether or not such claim,
right or remedy arises in equity, under contract, by statute, under common law
or otherwise. If any amount shall erroneously be paid to the Guarantor on
account of such subrogation, contribution, reimbursement, indemnity and similar
rights, such amount shall be held in trust for the benefit of the Banks and
shall forthwith be paid to the Agent to be credited against the payment of the
Guaranteed Obligations, whether matured or unmatured, in accordance with the
terms of the Loan Documents.
E. Remedies. The Guarantor agrees that, as between the
Guarantor and the Banks, the obligations of the Borrower under the Guaranteed
Instruments may be declared to be forthwith due and payable as provided in the
Credit Agreement (and shall be deemed to have become automatically due and
payable in the circumstances provided in the Credit Agreement) for purposes of
Section 2.A hereof notwithstanding any stay, injunction or other prohibition
preventing such declaration as against the Borrower and that, in the event of
such declaration (or such obligations from becoming automatically due and
payable), such obligations (whether or not due and payable by the Borrower)
shall forthwith become due and payable by the Guarantor for purposes of Section
2.A hereof.
F. Continuing Guarantees. The guarantees in this
Section 2 are continuing guarantees and shall apply to all Guaranteed
Obligations whenever arising.
G. Waiver of Demands, Notices, etc. The Guarantor
hereby unconditionally and irrevocably waives, to the extent permitted by
applicable law, (i) notice of any of the matters referred to in this Section 2;
(ii) all notices which may be required by statute, rule or law or otherwise,
now or hereafter in effect, to preserve any rights against the Guarantor
hereunder, including, without limitation, any demand, proof or notice of
non-payment of the Guaranteed Obligations; (iii) acceptance of this Guaranty,
demand, protest, presentment, notice of default or dishonor and any requirement
of diligence; (iv) any requirement to exhaust any remedies or to miti-
6
<PAGE> 8
gate any damages resulting from a default by the Borrower under the Credit
Agreement; (v) any requirement that any Guaranteed Party protect, secure,
perfect or insure any security interest in or any Lien on any property subject
thereto or exhaust any right or take any action against the Borrower, the
Guarantor, any other guarantor of the Guaranteed Obligations or any other
Person or any collateral or security or any balance of any deposit accounts or
credit on the books of any Bank in favor of the Borrower, the Guarantor or any
other Person; and (vi) any other circumstance whatsoever which might otherwise
constitute a legal or equitable discharge, release or defense of a guarantor or
surety, or which might otherwise limit recourse against the Guarantor.
H. Severability. The Guarantor hereby further agrees
that the Guaranteed Parties may pursue their rights and remedies under this
Guaranty and shall be entitled to payment of the full amount owing hereunder
notwithstanding any other guarantee of or security, in favor of the Guaranteed
Parties or any lack of validity or enforceability thereof, or any failure to
perfect or to exercise any right, remedy, power or privilege with respect to
such security, if any, or any payment received thereunder.
Section 3. Covenants.
The Guarantor agrees to perform, comply with and be bound by,
for the benefit of the Agent and each of the Banks, each of the covenants,
agreements and obligations contained in Sections 5 and 6 of the Credit
Agreement as amended, modified, restated and supplemented and in effect from
time to time which are applicable to it.
Section 4. Miscellaneous.
A. No Waiver. No failure on the part of the Agent or
any of its agents to exercise, and no course of dealing with respect to, and no
delay in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by the Agent or any of
its agents of any right, power or remedy hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or remedy.
The remedies herein are cumulative and are not exclusive of any remedies
provided by law.
7
<PAGE> 9
B. Expenses. The Guarantor agrees to pay to the Agent
all out-of-pocket expenses (including, but not limited to, reasonable expenses
for legal services of every kind) of, or incident to, the enforcement of any of
the provisions of this Guaranty.
C. Further Assurances. The Guarantor agrees that, from
time to time upon the written request of the Agent, the Guarantor will execute
and deliver such further documents and do such other acts and things as the
Agent may reasonably request in order fully to effect the purposes of this
Guaranty.
D. GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. THE
GUARANTOR HEREBY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE
COURT SITTING IN NEW YORK CITY FOR THE PURPOSES OF ALL LEGAL PROCEEDINGS
ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED
HEREBY. THE GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE
VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY
SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM. THE GUARANTOR AND THE AGENT HEREBY IRREVOCABLY WAIVE, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
E. Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied or delivered to the intended
recipient at its address or telecopier number as specified on the signature
pages hereto and shall be deemed to have been given at the times specified in
Section 9.3 of the Credit Agreement.
F. Waivers, Amendments, etc. The terms of this Guaranty
may be waived, altered or amended only by an instrument in writing duly
executed by the Guarantor and the Agent (in accordance with the provisions
specified in Section 9.5 of the Credit Agreement). Any such amendment or
waiver shall be binding upon the Guarantor, the Agent, each Bank and each
subsequent holder of any Guaranteed Obligation.
8
<PAGE> 10
G. Successors and Assigns. This Guaranty shall be
binding upon and inure to the benefit of the respective successors and assigns
of the Guarantor, the Agent, each Bank and each subsequent holder of the
Guaranteed Obligations; provided, however, that the Guarantor shall not assign
or transfer its rights hereunder without the prior written consent of the
Agent.
H. Termination. The guarantee made hereunder shall
terminate when all the Guaranteed Obligations have been indefeasibly paid in
full and the Banks have no further commitment to lend under the Credit
Agreement, the Letters of Credit Outstanding have been reduced to zero and the
Issuing Bank has no further obligation to issue Letters of Credit under the
Credit Agreement and shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of any Guaranteed
Obligation is rescinded or must otherwise be restored by any Bank or the
Guarantor upon the bankruptcy or reorganization of the Borrower, the Guarantor
or otherwise.
I. Counterparts. This Guaranty may be executed in one
or more counterparts and all of such counterparts taken together shall
constitute one and the same instrument.
9
<PAGE> 11
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to
be duly executed by its officer thereunto duly authorized as of the date first
above written.
ROUGE INDUSTRIES, INC.,
as Guarantor
By: /s/ Gary P. Latendresse
------------------------------------
Name: Gary P. Latendresse
Title: Vice President and Chief
Financial Officer
Notice Address:
3001 Miller Road
P.O. Box 1699
Dearborn, Michigan
Telephone: (313) 323-2170
Facsimile: (313) 323-2270
THE CHASE MANHATTAN BANK,
as Agent
By: /s/ James H. Ramage
------------------------------------
Name: James H. Ramage
Title: Vice President
Notice Address:
One Chase Manhattan Plaza
Fourth Floor
New York, New York 10081
Telephone: (212) 552-2395
Facsimile: (212) 552-7773
<PAGE> 1
EXHIBIT 10.29
ROUGE STEEL COMPANY SAVINGS PLAN
FOR
SALARIED EMPLOYEES
This Plan has been established by the Company to encourage and facilitate
systematic savings and investment by eligible Employees. It also is intended
to permit a broad group of eligible employees to invest in Rouge Steel Company
or its parent company. All references in the Plan to Paragraphs, Subparagraphs
or other subdivisions are to Paragraphs, Subparagraphs or other subdivisions of
this Plan unless otherwise specified. The original effective date of the Plan
is April 1, 1991. The Plan was last amended and restated effective October 1,
1996, except as provided therein. The effective date of this amended and
restated Plan is January 1, 1997, except as otherwise expressly indicated
herein.
I. DEFINITIONS.
As herein used:
1. "Affiliate" means (a) all corporations that are members of a controlled
group of corporations within the meaning of Code Section 1563(a) (determined
without regard to Code Sections 1563(a)(4) and 1563(e)(3)(c)) and of which the
Company is then a member, (b) all trades or businesses, whether or not
incorporated, that, under the regulations prescribed by the Secretary of the
Treasury pursuant to Code Section 414(c), are then under common control with
the Company, (c) all organizations, whether or not incorporated, which are
members of an affiliated service group (as defined in Code Section 414(m))
which includes the Company, and (d) all other entities required to be
aggregated with the Company pursuant to regulations under Code Section 414(o).
2. "Affiliated Corporation" means (a) the Company, and (b) any corporation
not less than a majority of the voting stock of which is owned directly or
indirectly by the Company or Rouge Industries, Inc., and that has been approved
by the Committee as an Affiliated Corporation for purposes of the Plan.
3. "Average Regular Savings Contribution Percentage" means the average of
the Regular Savings Contribution Percentages of the eligible Employees in a
group.
4. "Average Tax-Efficient Savings Contribution Percentage" means the
average of the Tax-Efficient Savings Contribution Percentages of the eligible
Employees in a group.
5. "Code" means the Internal Revenue Code of 1986, as amended.
6. "Committee" means the Savings Plan Committee created by the Company
under Paragraph XXVI.
<PAGE> 2
7. "Company" means Rouge Steel Company.
8. "Company Matching Contributions" means and includes (a) amounts
contributed by or on behalf of the Company to the Plan under Subparagraph 1 of
Paragraph V and (b) amounts credited to Company Matching Contributions Accounts
resulting from transfers from the Ford SSIP to this Plan.
9. "Company Matching Contributions Account" means an account of an
Employee under the Plan to which are credited Company Matching Contributions in
respect of Tax-Efficient Savings Contributions or certain Employee Regular
Savings Contributions and earnings thereon.
10. "Composite Quotation Listing" means a composite listing of market
prices of securities supplied by a reputable financial statistical service
selected by the Trustee, which listing includes the prices at which securities
are traded on national securities exchanges located in the United States.
11. "Current Market Value" means, with reference to Rouge Stock or Ford
Stock, the market price obtained on the day in question or, if after 2:00 p.m.
on the day in question or no sales were made on that date, at the closing
market price obtained on the next following day on which sales were made, in
either case as reported in the Composite Quotation Listing.
12. "Earnings" means income or loss resulting from an investment or
reinvestment and any increment thereof and shall include interest, dividends
and other distributions on investments.
13. "Employee" means each person who is employed at a Salary by a
Participating Company or an Affiliated Corporation and is enrolled on the
active employment rolls, maintained in the United States, of the Participating
Company or Affiliated Corporation, including without limitation any such person
who also is an officer or director of the Company.
14. "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
15. "Ford" means the Ford Motor Company.
16. "Ford SSIP" means the Ford Motor Company Savings and Stock Investment
Plan for Salaried Employees.
17. "Ford Stock" means Common Stock of Ford Motor Company.
18. "Highly Compensated Employee" means any Employee described in Code
Section 414(q) and prior to January 1, 1997, generally means an Employee who
performed services for the Company during the "determination year" and is in
one or more of the following groups:
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<PAGE> 3
(a) Employees who at any time during the "determination year" or a
"look-back year" were "five percent owners" of the Company. "Five percent
owner" means any person who owns (or is considered as owning within the
meaning of Code Section 318) more than five percent of the outstanding stock
of the Company possessing more than five percent of the total combined
voting power of all stock of the Company. In determining the percentage
ownership hereunder, employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate employers.
(b) Employees who received Compensation during the "look-back year"
from the Company in excess of $99,000.
(c) Employees who received Compensation during the "look-back year"
from the Company in excess of $66,000 and were in the "Top Paid Group of
Employees" for the Plan Year. "Top Paid Group" means the top 20 percent of
Employees who performed services for the Company during the applicable year,
ranked according to the amount of Compensation received from the Company
during the year. For the purpose of determining the number of active
Employees in any year, Employees with less than six (6) months of service
shall be excluded; however, those Employees shall still be considered for
the purpose of identifying the particular Employees in the Top Paid Group.
(d) Employees who during the "look-back year" were officers of the
Company (as that term is defined within the meaning of the Regulations under
Code Section 416) and received Compensation during the "look-back year" from
the Company greater than 50 percent of the limit in effect under Code
Section 415(b)(1)(A) for that Plan Year. The number of officers shall be
limited to the lesser of (i) 50 employees; or (ii) the greater of 3
employees or 10 percent of all employees. For the purpose of determining
the number of officers, Employees with less than six (6) months service
shall be excluded, but those Employees shall still be considered for the
purpose of identifying the particular Employees who are officers. If the
Company does not have at least one officer whose annual Compensation is in
excess of 50 percent of the Code Section 415(b)(1)(A) limit, then the
highest paid officer of the Company will be treated as a Highly Compensated
Employee.
(e) Employees who are in the group consisting of the 100 Employees paid
the greatest Compensation during the "determination year" and are also
described in (b), (c) or (d) above when these paragraphs are modified to
substitute "determination year" for "look-back year."
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<PAGE> 4
For purposes of the determination of Highly Compensated Employees,
Compensation means compensation as defined in Subparagraph 4 of Paragraph XXXI,
plus Tax-Efficient Savings Contributions. If a Member is either a "five
percent owner" of the Company or one of the ten (10) Highly Compensated
Employees paid the greatest compensation during the Plan Year, then prior to
January 1, 1997, family member aggregation rules apply. As used herein, family
member shall mean with respect to any Member, the Member's spouse, lineal
descendants and ascendants and their spouses, as provided under Code Section
414(q)(6)(B). However, in applying the $150,000 limit on compensation as
adjusted for Plan years beginning after December 31, 1993, under Code Section
401(a)(17), family members shall include only the affected Member's spouse and
any lineal descendants who have not attained age 19 before the close of the
Plan Year.
Additionally, the dollar threshold amounts specified in (b) and (c) above
applicable for 1994 shall be adjusted at the time and in the manner as is
provided under the Code and applicable regulations. In the case of an
adjustment, the dollar limits which shall be applied are those for the calendar
year in which the "determination year" or "look-back year" begins.
In determining who is a Highly Compensated Employee, all Affiliates shall
be taken into account as a single employer and leased employees within the
meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered Employees
unless the leased employees are covered by a plan described in Code Section
414(n)(5) and are not covered in any qualified plan maintained by the Company.
"Highly Compensated Former Employees" shall be treated as Highly
Compensated Employees without regard to whether they performed services during
the "determination year." "Highly Compensated Former Employee" means a former
employee who had a separation year prior to the "determination year" and was a
Highly Compensated Employee in the year of the separation from service or in
any "determination year" after attaining age 55. Notwithstanding the
foregoing, an Employee who separated from service prior to 1987 will be treated
as a Highly Compensated Former Employee only if during the separation year (or
the year preceding the separation year) or any year after the Employee attains
age 55 (or the last year ending before the Employee's birthday), the Employee
either received Compensation in excess of $50,000 or was a "five percent
owner." For purposes of this paragraph, "determination year," Compensation and
"five percent owner" shall be determined in accordance with the above
provisions of this definition. Highly Compensated Former Employees shall be
treated as Highly Compensated Employees.
19. "Member" means (a) an Employee who shall have elected to participate
in the Plan and, in the case of an Employee of a Participating Company, shall
have filed a payroll deduction authorization or a Salary Reduction Agreement
then outstanding
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<PAGE> 5
under the Plan, or, in the case of an Employee of an Affiliated Corporation,
shall have filed an undertaking then outstanding
under the Plan to make Regular Savings Contributions or to have
Tax-Efficient Savings Contributions made to the Plan by a method the Committee
may have designated, and (b) a person who has assets in an account under the
Plan.
20. "Participating Company" means the Company, and with the consent of the
Company, Rouge Industries, Inc., and each Subsidiary of the Company or
Subsidiary of Rouge Industries, Inc. that shall have elected to participate in
the Plan with the consent of the Company. "Subsidiary of the Company" means a
domestic corporation not less than a majority of the voting stock of which is
owned directly or indirectly by the Company. "Subsidiary of Rouge Industries,
Inc." means a domestic corporation not less than a majority of the voting stock
of which is owned directly or indirectly by Rouge Steel Industries, Inc.
21. "Plan" means the savings plan described herein, which is designated a
profit sharing plan pursuant to Code Section 401(a)(27)(B).
22. "Plan Year" means a calendar year.
23. "Profit Sharing Plan" means the Rouge Steel Company Profit Sharing
Plan for Salaried Employees.
24. "Profits" means profits, as defined in the Profit Sharing Plan, for a
Quarterly Determination Period, to the extent that such profits are taken into
account in determining the total profit share under the Profit Sharing Plan for
such Quarterly Determination Period.
25. "Quarterly Contribution Period" means any one of successive periods of
three consecutive calendar months, the first of which shall begin with the
month of May, during which the percentage for Company Matching Contributions
shall be as provided in Subparagraph 1 of Paragraph V.
26. "Quarterly Determination Period" means any one of successive periods
of three consecutive calendar months, the first of which begins with the month
of January. "Applicable Quarterly Determination Period" means the Quarterly
Determination Period with respect to which Profits as a percent of Sales shall
determine the percentage for Company Matching Contributions, pursuant to
Subparagraph 1 of Paragraph V, for the next following Quarterly Contribution
Period, as follows:
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<PAGE> 6
Shall determine the percentage
for Company Matching
Profits as a Contributions, pursuant to
percent of Sales Subparagraph 1 of Paragraph V,
for this Quarterly for this next following
Determination Period Quarterly Contribution Period
---------------------- ------------------------------------
January through March May through July
April through June August through October
July through September November through January
October through December February through April
27. "Regular Savings Account" means an account of an Employee under the
Plan to which are credited Regular Savings Contributions made by the Employee
and earnings thereon.
28. "Regular Savings Contributions" means (a) amounts contributed by an
Employee to the Plan from his or her Salary as provided in Paragraph IV and (b)
an Employee's regular savings contributions under the Ford SSIP for months
prior to April 1991 if the Employee's regular savings account under the Ford
SSIP shall have been transferred to this Plan.
29. "Regular Savings Contribution Percentage" means the ratio (expressed
as a percentage) of the sum of Employee Regular Savings and Company Matching
Contributions under the Plan on behalf of the eligible Employee for the year to
the eligible Employee's compensation for the year. "Compensation" means, for
purposes of this paragraph, compensation paid by the Company to the Employee
during the year which is required to be reported as wages on the Employee's
Form W-2, plus Tax-Efficient Savings Contributions, but excludes amounts in
excess of $150,000 as adjusted for Plan years beginning after December 31,
1993, in accordance with Code Section 401(a)(17), for the Plan Year. Prior to
January 1, 1997, if a Member is either a "five percent owner" of the Company or
one of the ten (10) Highly Compensated Employees paid the greatest compensation
during the Plan Year, family member aggregation rules shall apply. As used
herein, family member shall mean with respect to any Member, the Member's
spouse, lineal descendants and ascendants and their spouses, as provided under
Code Section 414(q)(6)(B). However, in applying the limit to compensation,
family members shall include only the affected Member's spouse and any lineal
descendants who have not attained age 19 before the close of the Plan Year.
The Regular Savings Contribution Percentage of a Highly Compensated Employee
subject to the family member aggregation rules shall be the Regular
Savings Contribution Percentage for the family group (which shall be treated as
one Highly Compensated Employee) determined by aggregating the Regular Savings
Contributions, Company Matching Contributions and compensation of all eligible
family members (including Highly Compensated Employees).
The Regular Savings Contributions, Company Matching Contributions and the
compensation of all family members shall be
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<PAGE> 7
disregarded for purposes of determining the Regular Savings
Contributions Percentage for the non-Highly Compensated Employee group except
to the extent taken into account under the above family member aggregation
rules for determining the Regular Savings Contribution Percentage. If a Member
is required to be aggregated with more than one family group in the Plan, all
Members who are members of those family groups that include the Member are
aggregated as one family group in accordance with the above family member
aggregation rules for determining the Regular Savings Contribution Percentage.
The determination of the Regular Savings Contribution Percentage and the
treatment of Regular Savings Contributions shall satisfy other requirements as
may be prescribed by the Secretary of the Treasury pursuant to the Code.
30. "Rollover Contribution" means an amount contributed by an Employee
pursuant to Subparagraph 5 of Paragraph V.
31. "Rouge Stock" means prior to 11:59 p.m., July 30, 1997, the Common
Stock of Rouge Steel Company, and on and after 11:59 p.m., July 30, 1997, the
Common Stock of Rouge Industries, Inc.
32. "Salary" means the regular base salary to which an Employee of a
Participating Company is entitled prior to giving effect to any Salary
Reduction Agreement except that "Salary" shall not include any amount subject
to a Salary Reduction Agreement to the extent the amount cannot be contributed
to the Employee's account as a Tax-Efficient Savings Contribution because of
the applicable limitation set forth in Paragraph XXXI. In the case of an
Employee of an Affiliated Corporation who is eligible to make Regular Savings
Contributions to the Plan, as provided in Paragraph II, "Salary" means the
Employee's last salary at the Participating Company from which he is on leave
of absence. "Salary" shall not include any supplemental compensation, pension,
retirement or salaried income security plan payment, retainer, commission, fee,
overtime or shift payment, cost-of-living allowance, or any other special
remuneration. Salary in excess of $150,000, as adjusted for Plan years
beginning after December 31, 1993, at the same time and in the same manner as
permitted under Code Section 401(a)(17), shall be disregarded.
33. "Salary Reduction Agreement" means (a) an agreement between an
Employee and a Participating Company or its designee to have the Employee's
Salary reduced by an amount specified by the Employee and to have an amount
equal to the Salary reduction contributed by the Participating Company to the
Plan on behalf of the Employee, pursuant to Code Section 401(k) and
Subparagraph 2 of Paragraph V; provided, however, that the amount shall not
exceed 15% of the Employee's Salary or a lesser amount as may be permitted
under Subparagraph 3 of Paragraph V and (b) any such agreement in effect under
the Ford SSIP as of March 31, 1991, on behalf of a Member of this Plan.
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<PAGE> 8
34. "Sales" means sales, as defined in the Profit Sharing Plan, for a
Quarterly Determination Period.
35. "Tax-Efficient Savings Account" means an account of an Employee under
the Plan to which are credited Tax-Efficient Savings Contributions made on
behalf of the Employee, any Rollover Contribution made by the Employee and
earnings on each.
36. "Tax-Efficient Savings Contributions" means (a) amounts contributed by
the Company to the Plan on behalf of an Employee, pursuant to a Salary
Reduction Agreement, as provided in Subparagraph 2 of Paragraph V or pursuant
to an election with respect to amounts from the Profit Sharing Plan and (b)
amounts contributed by Ford or by the Company to the Ford SSIP for months prior
to April 1991 pursuant to a Salary Reduction Agreement or election with respect
to profit sharing amounts under the Ford SSIP on behalf of a Member whose
tax-efficient savings account under the Ford SSIP shall have been transferred
to this Plan.
37. "Tax-Efficient Savings Contribution Percentage" means the ratio
(expressed as a percentage) of Tax-Efficient Savings Contributions under the
Plan on behalf of the eligible Employee for the year to the eligible Employee's
compensation for the year. "Compensation" means, for the purposes of this
paragraph, compensation paid by the Company to the Employee during the year
which is required to be reported as wages on the Employee's Form W-2, plus
Tax-Efficient Savings Contributions, but excludes amounts in excess of $150,000
as adjusted for Plan years beginning after December 31, 1993, in accordance
with Code Section 401(a)(17) for the Plan Year. Prior to January 1, 1997, if a
Member is either a "five percent owner" of the Company or one of the ten (10)
Highly Compensated Employees paid the greatest compensation during the Plan
Year, family member aggregation rules apply. As used herein, family member
shall mean with respect to any Member, the Member's spouse, lineal descendants
and ascendants and their spouses, as provided under Code Section 414(q)(6)(B).
However, in applying the limit to compensation, family members shall include
only the affected Member's spouse and any lineal descendants who have not
attained age 19 before the close of the Plan Year. The Tax-Efficient Savings
Contribution Percentage of a Highly Compensated Employee subject to the family
member aggregation rules shall be the Tax-Efficient Savings Contribution
Percentage for the family group (which shall be treated as one Highly
Compensated Employee) determined by aggregating Tax-Efficient Savings
Contributions and compensation of all eligible family members (including Highly
Compensated Employees).
The Tax-Efficient Savings Contributions and compensation of all family
members shall be disregarded for purposes of determining the Tax-Efficient
Savings Contributions Percentage of the non-Highly Compensated Employee group
except to the extent taken into account under the above family member
aggregation rules for determining the Tax-Efficient Savings Contribution
Percentage. If a Member is required to be aggregated with more than one family
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<PAGE> 9
group in a plan, all Members who are members of those family groups that
include the Member are aggregated as one family group in accordance with the
above family member aggregation rules for determining the Tax-Efficient Savings
Contribution Percentage.
The determination of the Tax-Efficient Savings Contribution Percentage and
the treatment of Tax-Efficient Savings Contributions shall satisfy other
requirements as may be prescribed by the Secretary of the Treasury pursuant to
the Code.
38. "Tax-Efficient Savings Program" means the Plan provisions under which
Tax-Efficient Savings Contributions and Rollover Contributions are made to,
invested and held in, and withdrawn or distributed from, the Plan.
39. "Trustee" means the trustee or trustees appointed by the Company under
Paragraph XXI.
II. ELIGIBILITY.
1. Except as provided in Subparagraph 2 below, each Employee of a
Participating Company shall be eligible for membership in, and to make Regular
Savings Contributions, and to have Tax-Efficient Savings Contributions made, to
the Plan if the Employee satisfies one of following:
(a) The Employee shall have completed at least a one-year period of
service, as defined under Paragraph VII.2(a). If the Employee has a period
of severance, as defined at Paragraph VII.2(e), of at least one year before
the Employee has completed a one-year period of service, the Employee must
again satisfy the one-year period of service requirement based upon the
Employee's reemployment commencement date.
(b) The Employee is reemployed after a period of severance, if the
Employee previously had become eligible under clause (a).
The Company may in its discretion determine, in the event of the
acquisition by a Participating Company or Affiliated Corporation (by purchase,
merger or otherwise) of all or part of the assets of another corporation, that
the service of a person as an employee of the other corporation shall be
included in ascertaining whether he has had the service as required under
clause (a) or (b) above for eligibility, provided that he or she shall have
become an Employee in connection with the acquisition.
An Employee of a Participating Company who shall have been granted a
leave of absence to become an Employee of an Affiliated Corporation and who
becomes an Employee of the Affiliated Corporation shall be eligible for
membership in, and to make Regular Savings Contributions or to have
Tax-Efficient Savings Contributions made to, the Plan while he is on the leave
of absence and is so employed, provided that (i) he shall have the
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<PAGE> 10
service as required under clause (a) or (b) above for eligibility,
including service with the Affiliated Corporation, (ii) he shall not be a
participant in any profit sharing plan, or stock bonus plan, and trust of the
Affiliated Corporation qualifying for exemption from taxation under Code
Sections 401(a) and 501(a) or any other applicable section of the Federal tax
laws, as at the time in effect, and (iii) his or her eligibility, under the
provisions of this sentence, to make Regular Savings Contributions or to have
Tax-Efficient Savings Contributions made while an Employee of the Affiliated
Corporation shall terminate at the end of the two-year period commencing with
the date his or her leave of absence commences, or at the termination of his or
her leave of absence, or upon the date the Affiliated Corporation becomes a
Participating Company, whichever first shall occur.
2. An Employee shall not be eligible to make Regular Savings Contributions
or a Rollover Contribution or to have Tax-Efficient Savings Contributions made
if the Employee meets the conditions of either clause (a) or (b) below.
(a) The Employee shall be within a collective bargaining unit for which
a labor organization is recognized as collective bargaining agent by any
Participating Company, except that, upon approval of the Company, the
foregoing provisions of this Subparagraph shall not affect the eligibility
of the Employee to make Regular Savings Contributions or to have
Tax-Efficient Savings Contributions made to the Plan with respect to any
Plan Year, if, prior to the first day of the Plan Year, the Participating
Company shall have requested and received from the labor organization a
waiver, in terms acceptable to the Participating Company, of all rights of
and claims of right by the labor organization to bargain collectively with
respect to the Plan or any substantially similar plan or program or to
compel the Participating Company to do so, but only so long as the waiver
shall remain in effect.
(b) The Employee is a "Leased Employee." Effective on and after
February 1, 1995, for purposes of the Plan, a "Leased Employee" means any
person (other than an employee of the recipient) who pursuant to an
agreement between the recipient and any other person ("leasing
organization") has performed services for the recipient (or for the
recipient and related persons determined in accordance with Section
414(n)(6) of the Code) on a substantially full-time basis for a period of at
least 1 year, which services are of a type historically performed by
employees in the business field of the recipient employer; provided,
however, that if the Internal Revenue Service issues any change in
regulations governing the definition of leased employee, the term "Leased
Employee" shall, as of the effective date of such change, be defined in
accordance with such regulations. Contributions or benefits provided a
Leased Employee by the leasing organization which are attributable to
services performed for
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<PAGE> 11
the recipient employer shall be treated as provided by the recipient
employer.
3. Notwithstanding any of the preceding provisions of this Subparagraph,
an Employee shall be eligible for membership in and to have Tax-Efficient
Savings Contributions made to, the Plan if the Employee shall have attained
eligibility under the Plan as of the end of the 1994 Plan Year prior to the
amendment and restatement of the Plan effective as of February 1, 1995.
III. MEMBERSHIP.
Membership of any Employee in the Plan shall be entirely voluntary. An
eligible Employee may elect membership in the Plan (1) prior to October 1,
1996, as of the first day of any month with respect to Regular Savings
Contributions or the Tax-Efficient Savings Program by delivering to the Company
on or before the 23rd day (or a different day as the Committee from time to
time may determine) of the month preceding that date a notice of election to
participate and, in the case of an Employee of a Participating Company, a
payroll deduction authorization or a Salary Reduction Agreement hereunder, or
in the case of an Employee of an Affiliated Corporation, an undertaking to make
Regular Savings Contributions or to have Tax-Efficient Savings Contributions
made to the Plan by a method as the Committee may have designated; and (2) on
and after October 1, 1996, as of the first day of any pay period with respect
to Regular Savings Contributions or Tax-Efficient Savings Contributions by
electing to the Committee or its delegate on such day as the Committee from
time to time may determine (but prior to the first day of such pay period) to
participate (in the form designated by the Committee) and, in the case of an
Employee of a Participating Company, a payroll deduction authorization or a
Salary Reduction Agreement hereunder, or in the case of an Employee of an
Affiliated Corporation, an undertaking to make Regular Savings Contributions or
to have Tax-Efficient Savings Contributions made to the Plan by a method as the
Committee may have designated.
Notwithstanding the preceding paragraph, an Employee shall automatically
have become a Member of this Plan on April 1, 1991, through transfer of his or
her accounts under the Ford SSIP, including any loan subaccounts and related
promissory notes, to this Plan.
A newly hired Employee of a Participating Company may elect membership in
the Plan prior to the date on which the Employee would otherwise become
eligible for membership in the Plan for the limited purpose of making a
Rollover Contribution to the Plan as hereinafter provided.
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<PAGE> 12
IV. EMPLOYEE REGULAR SAVINGS CONTRIBUTIONS.
Each eligible Employee may make Regular Savings Contributions to the Plan
from his or her Salary for each pay period by payroll deductions in an amount
the Employee may authorize not to exceed 10% of the Employee's Salary and to be
in a full percentage amount of Salary, the amount to be rounded down to the
nearest full dollar.
Each eligible Employee also may elect to make regular savings adjustment
contributions to the Plan from the Employee's Salary for each pay period by
payroll deductions in an amount necessary for continuation of monthly Company
Matching Contributions related to Tax-Efficient Savings Contributions, as
hereinafter provided, in the event that the Employee's Tax-Efficient Savings
Contributions for any year exceed $9,240 as adjusted annually after 1994, in
accordance with Code Section 402(g) (subject to reduction as provided under
Subparagraph 3(b) of Paragraph V for a Member who has received a hardship
withdrawal under Paragraph XV or under the Ford SSIP).
Notwithstanding the preceding two paragraphs, a Member who has received a
hardship distribution pursuant to Paragraph XV or who has made a withdrawal
under this Plan with respect to which Subparagraph 3 of Paragraph XIV shall
apply, shall not be permitted to make Regular Savings Contributions for a
12-month period following the effective date of the distribution or withdrawal.
The total amount of Regular Savings Contributions for any year by any
Employee who is a Highly Compensated Employee aggregated with Company Matching
Contributions for the year for the Employee shall also be limited as determined
in accordance with Subparagraph 3 of Paragraph V.
The payroll deduction for Regular Savings Contributions authorized by an
Employee may be increased, decreased, or stopped by him or her (1) prior to
October 1, 1996, as of the first day of any month by delivering to the Company
on or before the 23rd day (or a different day as the Committee from time to
time may determine) of the preceding month a notice of the change; and (2) on
and after October 1, 1996, as of the first day of the first pay period
following notice to the Committee or its delegate of change on or before such
day as the Committee shall determine and in a method determined by the
Committee or its delegate. If an Employee shall become ineligible to make
Regular Savings Contributions to the Plan, his or her payroll deduction
authorization shall terminate forthwith. If the payroll deduction
authorization of an Employee shall terminate for any reason, the Employee
thereafter may, subject to the eligibility provisions of the Plan, resume
contributing to the Plan, (3) prior to October 1, 1996, as of the first day of
any month by delivering to the Company on or before the 23rd day (or a
different day as the Committee from time to time may determine) of the
preceding month
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<PAGE> 13
a payroll deduction authorization hereunder; and (4) on and
after October 1, 1996, as of the first day of the first pay period following
delivery to the Committee or its delegate of a payroll deduction authorization
on or before such day as the Committee shall determine in a method determined
by the Committee or its delegate.
An Employee shall not be entitled to make Regular Savings Contributions to
the Plan, and no deduction shall be made pursuant to his or her payroll
deduction authorization, in or for any period in which he is not receiving a
Salary.
A payroll deduction authorization for purposes of the Plan shall include
any such authorization in effect under the Ford SSIP as of March 31, 1991, on
behalf of a Member of this Plan.
The Committee may require Employees of an Affiliated Corporation who elect
to make Regular Savings Contributions to the Plan to contribute by payroll
deductions or by any other method the Committee may designate. If the
Committee shall designate a method other than payroll deductions, the Committee
shall adopt rules applying, as nearly as practicable, to that method of making
Regular Savings Contributions the provisions of this Paragraph IV relating to
payroll deductions.
V. OTHER CONTRIBUTIONS.
1. Company Matching Contributions.
Except as may be hereinafter provided, a Company Matching Contribution
will be made to the Plan (a) prior to October 1, 1996 for each month an amount
equal to a percentage, as hereinafter provided, of the aggregate of the amount
of Employee Regular Savings Contributions and Tax-Efficient Savings
Contributions (but excluding any Profit Sharing Plan or Rollover
Contributions,) and (b) on and after October 1, 1996, for each pay period, an
amount equal to a percentage, as hereinafter provided, of the aggregate amount
of Employee Regular Savings Contributions and Tax-Efficient Savings
Contributions (but excluding any Profit Sharing Plan Contributions or rollover
contributions). For each pay period beginning in a month in a Quarterly
Contribution Period, the Company's contribution percentage shall be
as determined by Profits as a percent of Sales for the Applicable Quarterly
Determination Period for such Quarterly Contribution Period in accordance with
the following table:
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<PAGE> 14
If Profits as a
percent of Sales for The percentage to be used for
the Applicable Quarterly each month in the Quarterly
Determination Period Contribution Period shall be
------------------------- -----------------------------------
Do not exceed 2.3 percent 0 percent
Exceed 2.3 percent but
do not exceed 4.6 percent 25 percent
Exceed 4.6 percent but
do not exceed 6.9 percent 50 percent
Exceed 6.9 percent but
do not exceed 9.2 percent 75 percent
Exceed 9.2 percent 100 percent
Provided, however, that for purposes of this Subparagraph 1, any portion of the
aggregate of an Employee's Regular Savings Contributions and Tax-Efficient
Savings Contributions that exceeds 10% of the Employee's Salary shall not be
taken into account (or, if a Participating Company so elects, any portion that
exceeds 5% of the Salary of an Employee of the Participating Company shall not
be taken into account).
The total amount of Company Matching Contributions for any year for any
Employee who is a Highly Compensated Employee aggregated with Regular Savings
Contributions by the Employee for the year shall also be limited as determined
in accordance with Subparagraph 3 of this Paragraph V.
If the Internal Revenue Service determines with respect to the Plan's
initial qualification that the trust fund does not constitute an exempt trust,
or refuses, in writing, to issue a determination as to whether the trust fund
is an exempt trust, the Company's Matching Contributions made to the Plan on or
after the date on which the determination or refusal is applicable shall be
returned to the Company without interest within one year of the determination
or refusal, provided the application for the determination is made by the time
prescribed by law for filing the Company's return for the taxable year in which
the plan was adopted, or such later date as the Secretary of the Treasury may
prescribe. If all or part of the Company's deductions under Code Section 404
for Company Matching Contributions to the Plan are disallowed by the Internal
Revenue Service, the portion of the contributions to which the disallowance
applies shall be returned without interest within one year of the disallowance.
The Company or Participating Company may recover, without interest, the
contributions to the Plan made on account of a mistake in fact, provided that
the recovery is made within one year after the date of the contribution. Any
recovery of contributions to the Plan
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<PAGE> 15
shall not exceed the value at the time of recovery of assets acquired
with the contributions and with earnings thereon.
2. Tax-Efficient Savings Contributions.
Each eligible Employee, by electing with the Company to enter into a
Salary Reduction Agreement in such form and manner prescribed by the Committee,
may elect to have contributed to the Plan on the Employee's behalf for each pay
period, beginning (a) prior to October 1, 1996, with the first day of the first
month following the filing of the agreement, on or before the 23rd day (or a
different day as the Committee from time to time may determine) of the month
preceding that day, and (b) on and after October 1, 1996, as of the first day
of the first pay period following such agreement provided it is entered into on
or before such day as the Committee shall determine, a Tax-Efficient Savings
Contribution in an amount the Employee may authorize not in excess of 15% of
the Employee's Salary for the pay period. The Salary Reduction Agreement shall
specify that those contributions are to be made in a full percentage amount of
Salary, the amounts to be rounded down to the nearest full dollar.
Subject to the foregoing provisions of this Subparagraph 2, the rate of
Tax-Efficient Savings Contributions with respect to Salary of an Employee may
be increased, decreased or stopped by the Employee only (a) prior to October 1,
1996, as of the first day of any month by delivering to the Company on or
before the 23rd day (or a different day as the Committee from time to time may
determine) of the month preceding that date a notice of the change, and (b) on
and after October 1, 1996, as of the first day of the first pay period
following delivery to the Committee or its delegate of notice of the change on
or before such day as the Committee shall determine. If an Employee shall
become ineligible to make Regular Savings Contributions to the Plan, his or her
Salary Reduction Agreement shall terminate forthwith. If the Salary Reduction
Agreement of an Employee shall terminate for any reason, the Employee
thereafter may, subject to the eligibility provisions of the Plan, resume the
making of Tax-Efficient Savings Contributions to the Plan, (a) prior to October
1, 1996, as of the first day of any month by delivering to the Company on or
before the 23rd day (or a different day as the Committee from time to time may
determine) of the month preceding that date a Salary Reduction Agreement
hereunder, and (b) on and after October 1, 1996, as of the first day of the
first pay period following filing with the Committee or its delegate a Salary
Reduction Agreement on or before such day as the Committee shall determine.
A Member who has received a hardship distribution pursuant to Paragraph
XV, or who has made a withdrawal under this Plan with respect to which
Subparagraph 3 of Paragraph XIV shall apply, shall not be permitted to make
Tax-Efficient Savings Contributions for a 12-month period following the date of
receipt of the hardship distribution or withdrawal.
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<PAGE> 16
The Company shall contribute to the Plan, prior to October 1, 1996 each
month an amount equal to the aggregate of the amounts of Tax-Efficient Savings
Contributions to be contributed by the Company on behalf of Employees pursuant
to the elections of those Employees under Salary Reduction Agreements with
respect to the month; and, on and after October 1, 1996 within a reasonable time
after each applicable pay period an amount equal to the aggregate of the amounts
of Tax-Efficient Savings Contributions to be contributed by the Company on
behalf of Employees pursuant to the elections of those Employees under Salary
Reduction Agreements with respect to the pay period.
In addition, and subject to procedures that the Committee from time to
time may prescribe, each eligible Employee may elect to have contributed to the
Plan on the Employee's behalf, as Tax-Efficient Savings Contributions, amounts
from the Profit Sharing Plan that would otherwise be distributed directly to the
Employee; provided, however, that for purposes of this provision an Employee
shall not be eligible unless the Employee is enrolled on the active employment
rolls of a Participating Company or an Affiliated Corporation, or is on
short-term disability leave from a Participating Company or an Affiliated
Corporation, at the date of making the election.
The total amount of Tax-Efficient Savings Contributions allowable for
any Employee for any calendar year shall not exceed $9,240, adjusted after 1994
in accordance with Code Section 402(g)(5), (subject to reduction, as provided
under Subparagraph 3(b) of this Paragraph for a Member who has received a
hardship withdrawal pursuant to Paragraph XV) and for an Employee who is a
Highly Compensated Employee for the year, shall also be limited as provided
under Subparagraph 3, below.
3. Limitations on Regular Savings and Company Matching Contributions and
on Tax-Efficient Savings Contributions.
(a) The Regular Savings Contribution Percentage and the Tax-Efficient
Savings Contribution Percentage for any eligible Employee who is a Highly
Compensated Employee for the year shall be limited to the extent required
under the following tables:
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<PAGE> 17
REGULAR SAVINGS CONTRIBUTION PERCENTAGE LIMITATION
If the Average
Regular Savings The allowable Average
Contribution Percentage Regular Savings
of eligible Employees Contribution Percentage for
who are not Highly eligible Employees who are
Compensated Employees Highly Compensated Employees
for the year is: shall not exceed:
- ------------------------------ ------------------------------------------------
(i) 2% or less (i) 2.0 multiplied by the Average
Regular Savings Contribution Percentage
for eligible Employees who are not Highly
Compensated Employees.
(ii) over 2 % but not (ii) 2.0 percentage points
added to the Average Regular Savings
more than 8% Contribution Percentage for eligible
Employees who are not Highly Compensated
Employees.
(iii) more than 8% (iii) 1.25 multiplied by the Average
Regular Savings Contribution Percentage
for eligible Employees who are not
Highly Compensated Employees.
or, in any case, a lesser amount as provided by Treasury Regulation
Section 1.401(m)-2, which is hereby incorporated by reference, to prevent the
multiple use of parts (i) or (ii) of this limitation with respect to any Highly
Compensated Employee.
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<PAGE> 18
TAX-EFFICIENT SAVINGS CONTRIBUTION PERCENTAGE LIMITATION
If the Average
Tax-Efficient Savings The allowable Average
Contribution Percentage Tax-Efficient Savings
of eligible Employees Contribution Percentage for
who are not Highly eligible Employees who are
Compensated Employees Highly Compensated Employees
for the year is: shall not exceed:
----------------------------- ---- --------------------------------
(i) 2% or less (i) 2.0 multiplied by the Average
Tax-Efficient Savings
Contribution Percentage for
eligible Employees who are not
Highly Compensated Employees.
(ii) over 2% but not (ii) 2.0 percentage points
added to the Average
more than 8% Tax-Efficient Savings
Contribution Percentage for
eligible Employees who are not
Highly Compensated Employees.
(iii) more than 8 % (iii) 1.25 multiplied by the
Average Tax-Efficient Savings
Contribution Percentage for
eligible Employees who are not
Highly Compensated Employees.
or, in any case, a lesser amount as provided by Treasury Regulation
1.401(m)-2, which is hereby incorporated by reference, to prevent the
multiple use of parts (i) or (ii) of this limitation with respect to any
Highly Compensated Employee.
The Committee shall, to the extent necessary to conform to the
foregoing limitations, reduce the amounts of allowable Regular Savings and
Company Matching Contributions, and Tax-Efficient Savings Contributions,
respectively, for the year with respect to any or all eligible Highly
Compensated Employees. Any such reductions by the Committee shall be made
in such manner as the Committee from time to time may prescribe.
-18-
<PAGE> 19
(b) A Member who has received a hardship withdrawal pursuant to
Paragraph XV shall not be permitted to make Regular Savings Contributions or
Tax-Efficient Savings Contributions for his or her taxable year immediately
following the taxable year of the hardship distribution in excess of the
$9,240 limit (as adjusted annually after 1994 in accordance with Code
Section 402(g)(5)) for that year less the amount of that Member's Regular
Savings Contributions or Tax-Efficient Savings Contributions for the taxable
year of the hardship distribution.
4. Return of Tax-Efficient Savings, Regular Savings and Company Matching
Contributions in Excess of Limitations.
(a) A Member's Tax-Efficient Savings Contributions and similar
contributions (as defined in Code Section 402(g)(3)) cumulatively may not
exceed, in any calendar year, $9,240 (as adjusted annually after 1994 in
accordance with Code Section 402(g)(5)). A Member shall not be permitted to
make such contributions to this Plan or any other plan of a Participating
Company or Affiliate in excess of that limit. Subject to regulations as the
Committee from time to time may prescribe, a Member whose contributions to
this Plan, another plan of a Participating Company and any other plan,
including a plan of an employer which is unrelated to a Participating
Company, in the aggregate exceeds that limit may request and receive the
return of any excess Tax-Efficient Savings Contributions made to this Plan
for that year and earnings thereon by submitting a request for return of the
excess in this Plan to the Committee in a form as shall be acceptable to the
Committee. The amounts shall be returned to the Member no later than April
15 of the following year to Members who submit the requests to the Committee
no later than the immediately preceding March 1. A return of excess
Tax-Efficient Contributions under this clause shall include income and gains
and losses allocable thereto. The amount of a corrective distribution
pursuant to this clause (a), excluding allocable income and gains and
losses, for a taxable year may not exceed the Member's Tax-Efficient
Contributions under the Plan for that taxable year. Any distribution to a
Member under this clause on or before the last day of the Member's taxable
year shall satisfy each of the following conditions: (i) the Member shall
have designated the distribution as being excess Tax-Efficient
Contributions, (ii) the distribution must be made after the date on which
the Plan received the excess Tax-Efficient Contributions, and (iii) the Plan
shall designate the distribution as a distribution of excess Tax-Efficient
Contributions.
(b) In the event that the Average Tax-Efficient Savings Contribution
Percentage for the Highly Compensated Employee group does not satisfy the
applicable test in Subparagraph 3 above, the Committee shall adjust excess
Tax-Efficient
-19-
<PAGE> 20
Savings Contributions as set forth below or in another manner as shall
satisfy the requirements of the Secretary of the Treasury pursuant
to the Code:
(i) On or before the fifteenth day of the third month following
the end of each Plan Year, the Highly Compensated Employee having the
highest Tax-Efficient Savings Contribution Percentage shall have his
or her portion of the excess Tax-Efficient Savings Contributions
distributed to him or her until either the applicable allowable
Average Tax-Efficient Savings Contribution Percentage test set forth
in Subparagraph 3 above is met or until that Highly Compensated
Employee's Tax-Efficient Savings Contribution Percentage equals the
Tax-Efficient Savings Contribution Percentage of the next highest
Highly Compensated Employee. If, after the distribution set forth in
the prior sentence, the applicable Average Tax-Efficient Savings
Contribution Percentage test is still not met, then the aforementioned
two Highly Compensated Employees shall have distributed to them the
portions of their excess Tax-Efficient Savings Contributions as are
necessary either to meet the applicable allowable Average
Tax-Efficient Savings Contribution Percentage test or until the Highly
Compensated Employees' Tax-Efficient Savings Contribution Percentages
equal the Tax-Efficient Savings Contribution Percentage of the next
highest Highly Compensated Employee. The procedures described in the
prior two sentences shall be repeated until the applicable allowable
Average Tax-Efficient Savings Contribution Percentage test is met. In
determining the amount of excess Tax-Efficient Savings Contributions
to be distributed with respect to an affected Highly Compensated
Employee as determined herein, the amounts shall be reduced by any
excess Tax-Efficient Savings Contributions previously distributed to
the affected Highly Compensated Employee for his or her taxable year
ending with or within that Plan Year.
(ii) The distribution of excess Tax-Efficient Savings
Contributions shall be accompanied by a pro rata share of the income
thereon determined as provided by Regulations under Code Section
401(k).
(iii) The distribution shall be designated by the Company as a
distribution of excess Tax-Efficient Savings Contributions and income.
(iv) Any distribution of Tax-Efficient Savings Contributions
under this clause will also be effective for purposes of determining
the amount of Company Matching Contributions to be made on behalf of
the affected Employee.
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<PAGE> 21
(v) The determination and correction of excess Tax-Efficient
Savings Contributions of a Highly Compensated Employee whose
Tax-Efficient Savings Contribution Percentage is determined under the
family aggregation rules described herein shall be accomplished by
reducing the Tax-Efficient Savings Contribution Percentage as required
and the excess Tax-Efficient Savings Contributions for the family unit
shall be allocated among the family members in proportion to the
Tax-Efficient Savings Contributions of each family member that were
combined to determine the group Tax-Efficient Savings Contribution
Percentage.
(c) In the event that the Average Regular Savings Contribution
Percentage for the Highly Compensated Employee group does not satisfy the
applicable test in Subparagraph 3 of this Paragraph, the Committee shall
adjust excess Regular Savings Contributions and Company Matching
Contributions as set forth below or in another manner as shall satisfy the
requirements of the Secretary of the Treasury pursuant to the Code:
(i) On or before the fifteenth day of the third month following
the end of each Plan Year, the Highly Compensated Employee having the
highest Regular Savings Contribution Percentage shall have his or her
portion of excess Regular Savings Contributions distributed to him or
her, or excess Company Matching Contributions forfeited, until either
the applicable allowable Average Regular Savings Contribution
Percentage test set forth in Subparagraph 3 of this Paragraph is
met or until that Highly Compensated Employee's Regular Savings
Contribution Percentage equals the Regular Savings Contribution
Percentage of the next highest Highly Compensated Employee. If, after
the distribution or forfeiture set forth in the prior sentence, the
applicable allowable Average Regular Savings Contribution Percentage
test is still not met, then the aforementioned two Highly Compensated
Employees shall have the portions of their excess Regular Savings
Contributions distributed to them, or excess Company Matching
Contributions forfeited, as are necessary either to meet the applicable
allowable Average Regular Savings Contribution Percentage test or until
the Highly Compensated Employees' Regular Savings Contribution
Percentages equal the Regular Savings Contribution Percentage of the
next highest Highly Compensated Employee. The procedures described in
the prior two sentences shall be repeated until the applicable
allowable Average Regular Savings Contribution Percentage test is met.
In determining the amount of excess Regular Savings Contributions to be
distributed of Company Matching Contributions to be forfeited with
respect to an affected Highly Compensated Employee as
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<PAGE> 22
determined herein, the amounts shall be reduced by any excess
Regular Savings Contributions previously distributed to or Company
Matching Contributions previously forfeited by the affected Highly
Compensated Employee for his or her taxable year ending with or within
that Plan Year.
(ii) The adjustments required under (i) above shall be made first
by distributions of excess Regular Savings Contributions and then by
forfeiture of excess Company Matching Contributions.
(iii) The distribution of excess Regular Savings Contributions
shall be designated by the Company as a distribution of excess Regular
Savings Contributions. Forfeitures of excess Company Matching
Contributions shall be treated in accordance with Paragraph XXII;
however, no such forfeiture may be allocated to a Highly Compensated
Employee whose contributions are reduced pursuant to this Clause.
(iv) The distribution of excess Regular Savings Contributions or
forfeiture of Company Matching Contributions shall be accompanied by a
pro rata share of the income thereon determined as provided by
Regulations under Code Section 401(m).
(v) Excess Company Matching Contributions forfeited under this
clause shall continue to be treated as Company contributions for
purposes of Code Sections 404 and 415 following the forfeiture.
(vi) The determination and correction of excess Regular Savings
Contributions or Company Matching Contributions of a Highly
Compensated Employee whose Regular Savings Contribution Percentage is
determined under the family aggregation rules described herein shall
be accomplished by reducing the Regular Savings Contribution
Percentage as required and the excess Regular Savings Contributions
and Company Matching Contributions for the family unit shall be
allocated among the family members in proportion to the Regular
Savings Contributions and Company Matching Contributions of each
family member that were combined to determine the group Regular
Savings Contribution Percentage.
(d) The Regular Savings Contribution Percentage or Tax-Efficient
Savings Contribution Percentage for any eligible Employee who is a Highly
Compensated Employee for the year and who is eligible to have Regular
Savings Contributions or Tax-Efficient Savings Contributions allocated to
his or her account under two or more plans described in Code Section 401(a)
or arrangements described in Code Section 401(k) that are maintained by the
Company or an Affiliate shall be
-22-
<PAGE> 23
determined as if all those contributions were made under a single plan.
(e) Effective on and after February 1, 1995, in the event that this
Plan satisfies the requirements of Sections 401(k), 401(m), 401(a)(4) or
410(b) of the Code only if aggregated with one or more other Plans, or if
one or more other Plans satisfy the requirements of such section of the Code
only if aggregated with this Plan, then this section shall be applied by
determining the Regular Savings Contribution Percentage or Tax-Efficient
Savings Contribution Percentage, as applicable, of employees as if all such
plans were a single plan; provided, Plans may be aggregated in order to
satisfy Section 401(k) or 401(m) of the Code only if they have the same Plan
Year.
5. Rollover Contributions.
An Employee of a Participating Company may make a Rollover Contribution,
in an amount and form as permitted under Code Section 402 and qualifying as an
eligible rollover distribution transferred in a direct rollover to this Plan by
another qualified plan or as an amount received by an Employee from another
qualified plan transferred by the Employee to this Plan within 60 days
following receipt thereof, in any event provided such transferring plan is a
plan qualifying under Code Section 401(a) maintained by his or her immediately
preceding former employer and provided that the Rollover Contribution does not
jeopardize the Tax-exempt status of the Plan and Trust or create adverse tax
consequences for the Company. Rollover Contributions shall be fully vested and
invested in accordance with the provisions of Paragraph VIII as the Employee
shall elect.
VI. MEMBER'S ACCOUNT IN TRUST FUND.
At such times as the Trustee shall require in connection with the
Trustee's purchases of Rouge Stock or Ford Stock pursuant to the provisions of
Paragraph XXII, but (i) prior to October 1, 1996, not later than 30 days after
the last day of each month, the Company shall pay to the Trustee (a) the
Regular Savings Contributions for that month, (b) the Company Matching
Contributions for that month less any amount then to be applied to reduce
Company Matching Contributions pursuant to Paragraph XXIII, (c) the
Tax-Efficient Savings Contributions for that month, and (d) the amounts of
payments by Members with respect to loans and interest thereon pursuant to
Subparagraph 5 of Paragraph XIII, and (ii) on and after October 1, 1996 the
Company shall pay to the Trustee, as soon as practicable following the
respective pay period (a) the Regular Savings Contributions less any amounts
then to be applied under Paragraph XXIII, (b) the Company Matching
Contributions for that pay period, less any amount then to be applied to reduce
Company Matching Contributions pursuant to Paragraph XXIII, (c) the
Tax-Efficient Savings contributions, and (d) the amounts of payments by Members
with respect to loans and
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<PAGE> 24
interest thereon pursuant to subparagraph 5 of Paragraph XIII; provided,
however, that Employee Regular Savings Contributions, Tax-Efficient Savings
Contributions and loan and interest payments to be invested in specific assets,
specific funds or other investments permitted under the Plan other than
investments in Rouge Stock or Ford Stock shall be paid to the Trustee (iii)
prior to October 1, 1996 on or as soon as practicable after the last day of the
applicable month; and (iv) on and after October 1, 1996 as soon as practicable
after the applicable pay period. Upon receipt of those payments by the
Trustee, the aggregate amount of those payments (and earnings thereon, as from
time to time received by the Trustee) together with any Rollover Contributions
shall be credited to the respective accounts of the Members, and the Trustee
shall hold, invest and dispose of the same as provided in the Plan. Amounts
credited to a Member's Company Matching Contributions Account for a month or
payroll period, as applicable, shall be credited first to any Tax-Efficient
Savings Contributions as shall have been made for the Member and then, to the
extent that the amount so credited does not equal the total amount to be
credited to the Member's Company Matching Contributions Account, the remainder
shall be credited to the Member's Regular Savings Contributions as shall have
been made by the Member. A Member shall not have any interest or right in, or
power over, Company Matching Contributions or earnings thereon, whether or not
credited to his or her account, except as provided in the Plan.
VII. VESTING.
1. A Member shall be fully vested in the amount credited to the Member's
Regular Savings Account and Tax-Efficient Savings Account and no portion
thereof shall be subject to forfeiture for any reason whatsoever.
2. Except as provided in this or the following Subparagraph, a Member
shall have no vested interest in any amount credited to the Member's Company
Matching Contributions Account. Upon a Member's completion of a four-year
period of service, determined as hereafter provided in this Subparagraph, or
the Member's reaching age 65, if earlier, the amount credited to the Member's
Company Matching Contributions Account shall be fully vested and no portion
thereof shall be subject to forfeiture for any reason whatsoever.
(a) A Member shall be credited with a one-year period of service for
each anniversary following the Member's initial employment commencement date
until the Member has a severance from service date. The employment
commencement date is the date on which the Employee first performs an hour
of service, with one or more of the following: a Participating Company or
an Affiliated Corporation. The severance from service date is the earlier
of (i) the date the Employee quits, retires, is discharged or dies, or (ii)
the first anniversary of the first date of a period in
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which an Employee remains absent from service (with or without pay) or,
if later, the date upon which an Employee ceases accruing service under a
specific policy of the Company, following an absence from service with a
Participating Company or an Affiliated Corporation for any reason other than
quit, retirement, discharge or death, such as vacation, holiday,
sickness, disability, leave of absence or layoff.
(b) For purposes of clause (a) above, an hour of service means: (i) an
hour for which a Member is directly or indirectly compensated or entitled to
compensation from the Company for the performance of duties as an employee,
(ii) an hour for which a Member is directly or indirectly compensated or
entitled to compensation from the Company as an Employee (irrespective of
whether the employment relationship has terminated) for reasons, other than
performance of duties as in the case of layoff, release-continued disability
after expiration of medical leave of absence or medical, maternity, adoption
or personal leave of absence (excluding educational and public office leave
of absence), and (iii) an hour for which back pay is awarded by the Company.
(c) Periods of service for an Employee who shall have nonsuccessive
periods of service must be aggregated so that 365 days of service shall
equal a whole year period of service.
(d) If an Employee severs from service by reason of quit, discharge or
retirement and the employee then performs an hour of service within 12
months of the severance from service date, the period of severance shall be
counted as a period of service.
If an Employee severs from service by reason of quit, discharge or
retirement during an absence from service of 12 months or less for any
reason other than a quit, discharge, retirement or death, and then performs
an hour of service within 12 months of the date on which the employee was
first absent from service, the period of severance shall be counted as a
period of service.
(e) For purposes of this Paragraph, an Employee shall incur a one-year
period of severance on the first anniversary following the Employee's
severance from service date if the Employee did not complete any hour of
service following the severance from service. Notwithstanding 2(a)(ii) of
this Paragraph, an Employee who is absent from service beyond the first
anniversary of the first date of absence by reason of maternity or paternity
absence shall incur a severance from service date only upon the second
anniversary of the first date of the absence. The period between the first
and the second anniversaries of the first date of absence from work is
neither a period of service nor a period of severance.
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An Employee shall incur a Plan break-in-service after five consecutive
one-year periods of severance. If a former Member incurs a Plan
break-in-service, and later returns to employment with the Company or an
Affiliate, his or her years of periods of service as of the date he or she
ceased to be an Employee in connection with the break-in-service shall be
disregarded in determining his or her years of service for vesting purposes.
Once a person shall have qualified under this Subparagraph 2 for full
vesting in his or her Company Matching Contributions Account, the person
shall not thereafter for any reason whatsoever be subject to
loss or forfeiture of his or her right to full vesting. Any such person who
terminates employment or ceases to be a Member while in employment, upon
becoming a Member following a later return to employment or upon resuming
membership, shall automatically qualify for immediate full vesting in his or
her Company Matching Contributions Account.
3. Notwithstanding any provisions of Subparagraph 2 above to the contrary,
(a) amounts credited to a Member's Company Matching Contributions Account that
are attributable to company matching contributions made for years before 1990
(applicable to a Member whose accounts under the Ford SSIP shall have been
transferred to this Plan pursuant to Paragraph III) shall be fully vested, and
(b) on and after March 1, 1996, amounts credited to the Company Matching
Contribution Account of a terminated Member immediately accepting employment
with an unrelated company as part of the sourcing of a Company activity or
operation pursuant to a written sourcing agreement with such unrelated company,
as contemplated in the Rouge Steel Company Directive "Salaried Personnel
Matters Affected By Changes In Corporate Structure," as amended from time to
time, upon such subsequent employment shall be fully vested.
4. Notwithstanding Subparagraph 2 above, including the incorporation of
the elapsed time, period of service, method for determination of a Member's
vested service, a Member's service for vesting purposes shall not be less than
the Member's vested level attained under the Plan as of the end of the 1994
Plan Year, prior to the amendment and restatement of the Plan effective
February 1, 1995. A Member's years of service for purposes of this
Subparagraph shall include the Member's years of service and years of service
with (i) a participating company, or a subsidiary or affiliate thereof, under
the Ford SSIP for years before January 1, 1990, and (ii) an Affiliate.
5. A Member who has at least three years of service for vesting purposes
under the Plan as of the end of the 1994 Plan Year, prior to the amendment and
restatement of the Plan effective February 1, 1995, shall be credited with
vesting years of service as determined using the method for crediting vesting
service under the Plan before February 1, 1995, or period of service as
provided
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under this Paragraph, whichever provides the Member with the greatest
vesting service.
VIII. MEMBER'S ELECTION AS TO INVESTMENT OF FUNDS.
Subject to the restrictions provided under this Paragraph, the Committee
in its sole discretion, may determine from time to time the specific assets,
specific funds or other investments that shall be permitted for the investment
of contributions under the Plan. Included under this Committee power is the
right to add to, delete from, or substitute for, specific assets, specific
funds or other investments that are then currently permitted for investment of
contributions under the Plan, except that the Committee may not delete the
Rouge Stock investment which is a power exercisable only by the Board of
Directors of the Company or to another party as the Board may delegate.
1. A Member's Regular Savings Contributions, Tax-Efficient Savings
Contributions or Rollover Contribution each shall be invested in one of the
following ways as the Member shall elect with respect to each:
(a) 100 percent in Rouge Stock, or any other specific assets, specific
funds or other permitted investments under the Plan; or
(b) Any combination of Rouge Stock, or any other specific assets,
specific funds or other permitted investments, in whole percentage multiples
as the Committee shall determine from time to time.
A Member's initial investment election for Regular Savings Contributions
or for Tax-Efficient Savings Contributions with respect to Salary shall be
stated in his or her statement of election to participate or Salary Reduction
Agreement, respectively. Each initial investment election shall remain in
effect until changed by the Member, and prior to October 1, 1996, may be
changed effective the first day of any month in respect of Regular Savings
Contributions and Tax-Efficient Savings Contributions made thereafter by
delivering a notice to the Company on or before the 23rd day (or a different
day as the Committee from time to time may determine) of the preceding month,
and on and after October 1, 1996, may be changed by the Member in accordance
with procedures as the Committee may from time to time prescribe.
Each investment election stated in a Member's election to have quarterly
profit sharing amounts that would otherwise be distributed directly to the
Member contributed to the Plan as Tax-Efficient Savings Contributions shall
remain in effect for all subsequent profit sharing amounts (as defined in the
Profit Sharing Plan) except as the investment election may be changed by the
Member in accordance with procedures as the Committee from time to time may
prescribe.
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A Member's Company Matching Contributions initially shall be invested in
Rouge Stock.
IX. TRANSFER OF ASSETS.
Subject to the restrictions provided under this Paragraph, a Member may
elect, at such times, in the manner, and to the extent as the Committee from
time to time may determine, to have all or a portion of the amount in the
Member's Regular Savings Account, Tax-Efficient Savings Account, or Company
Matching Contributions Account, invested other than as Regular Savings
Contributions, Tax-Efficient Savings Contributions, Company Matching
Contributions or Rollover Contributions may be invested pursuant to Paragraph
VIII.
1. A Member may not transfer amounts in his or her Company Matching
Contributions Account that shall not have vested.
2. During the two Plan Years immediately following the year for which
Company Matching Contributions are made, a Member, except for a Member who has
terminated employment after his or her Company Matching Contributions Account
has fully vested pursuant to Subparagraphs 2 or 3 of Paragraph VII, may not
transfer amounts in his or her Company Matching Contributions Account that
shall have vested but are attributable to those contributions.
3. All transfer elections shall be subject to any other procedures or
restrictions the Committee may adopt, including, among other things,
application procedures, minimum and maximum amounts that may be transferred,
procedures for determining the value of assets the subject of a transfer
election and other matters which may include conditions or restrictions
applicable to transfer elections.
X. INVESTMENT OF DIVIDENDS, INTEREST, ETC.
Subject to the restrictions provided under this Paragraph, the Committee
from time to time may determine the manner and the extent of the investment of
cash dividends and the cash proceeds of any other distribution in respect of
specific assets, specific funds or other investments that shall be permitted
for the investment of contributions under the Plan.
1. Cash dividends and the cash proceeds of any other distribution received
on Rouge Stock shall be invested in Rouge Stock.
XI. DISTRIBUTION UPON ATTAINMENT OF AGE 70-1/2.
Notwithstanding any other provision in the Plan, in the case of a Member
who has attained age seventy and one-half (70-1/2) and who has not terminated
employment, distribution of the amounts in the Member's accounts shall begin
not later than April 1 of the calendar year following the calendar year in
which the Member
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attains age seventy and one-half (70-1/2) and shall be made
over a period of 15 years; upon termination of the Member's employment, the
assets remaining in the Member's accounts shall be distributed. Effective on
and after February 1, 1995, the distribution shall be made in accordance with
Code Section 401(a)(9) and regulations prescribed by the Secretary of the
Treasury and subject to any requirements the Committee may adopt.
XII. DISTRIBUTION OF ASSETS AT OR AFTER TERMINATION OF EMPLOYMENT.
Except as otherwise provided in Paragraphs XI, XIII, XIV, and XV,
distribution of all assets in a Member's accounts shall be governed by the
following provisions. After a Member's termination of employment, the amounts
in his or her accounts shall be distributed as follows:
1. Termination of Employment. In the case of a Member's termination of
employment for any reason (whether voluntary or by discharge with or without
cause), the amounts in the Member's Regular Savings Account, Tax-Efficient
Savings Account, and the portion, if any, of the Member's Company Matching
Contributions Account which shall have vested pursuant to Paragraph VII, shall
be delivered to the Member as soon as practicable after the earlier of
(a) receipt by the Company of a request for distribution made by the
Member at or after termination of employment, or
(b) the end of the year in which the Member attains age 65 or the date
on which the Member attains age 70 if the Member shall have so elected or,
if later, the date of termination of employment of the Member.
Unless the Member otherwise elects as provided under (b) above,
distribution shall be made no later than the 60th day after the later of the
close of the year in which the Member attains age 65 or terminates employment.
In the event of termination of employment by death or death after other
termination of employment and prior to distribution pursuant to (a) or (b)
above, distribution of the amounts in the Member's Regular Savings Account,
Tax-Efficient Savings Account, and the portion, if any, of the Member's Company
Matching Contributions Account which shall have vested pursuant to Paragraph
VII, shall be made to the Member's beneficiaries hereunder as soon as
practicable after notice of the Member's death is received by the Company.
2. For purposes of any distribution of assets in a Member's Tax-Efficient
Savings Account pursuant to Subparagraph 1 of this Paragraph, the amount in his
or her Tax-Efficient Savings Account shall be reduced by the balance of any
loan made to the Member as
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provided in Paragraph XIII and interest thereon that is unpaid at the
effective date of the distribution.
3. Subject to the provisions of Paragraph XXII, and subject to any
regulations as the Committee from time to time may prescribe, a Member
receiving a distribution pursuant to Subparagraph 1 of this Paragraph may agree
to the sale for purposes of the Plan of all full shares of Rouge Stock or Ford
Stock covered by his or her distribution, the sale to be at a price per share
equal to the Current Market Value of the stock on the effective date of the
distribution. The Member so agreeing shall pay all applicable transfer taxes
incident to the sale of the shares, and the amount thereof may be deducted from
the payment made by the Trustee to the Member.
4. If a Member terminates employment with the Company or an Affiliate at a
time when any portion of the Member's Company Matching Contributions Account is
less than fully vested as determined under Paragraph VII, the unvested portion
of the amount in that account will remain credited to the Member's account
until the Member has incurred a Plan break-in-service, as determined under
Subparagraph 2(e) of Paragraph VII or until assets in the Member's accounts in
which the Member is fully vested shall have been distributed, whichever shall
occur first. Upon such a Plan break-in-service or distribution, the unvested
portion of the account shall be forfeited by the Member. The amount of the
forfeiture will be applied as provided in Subparagraph 1 of Paragraph XXIII.
XIII. LOANS.
Subject to the requirements of this Paragraph XIII and to any regulations
the Committee from time to time may prescribe, a Member prior to termination of
employment may apply for and receive a loan from the Plan. All requirements
shall be applicable on a uniform and non-discriminatory basis to Members who
apply for loans.
1. All loans shall (a) be available to all Members on a reasonably
equivalent basis, (b) be adequately secured, and (c) bear a reasonable rate of
interest.
2. A loan shall not exceed the lesser of:
(a) the amount, at the time of the loan, of the Member's Tax-Efficient
Savings Account (subject to any reduction provided under Subparagraph 3 of
this Paragraph),
(b) fifty percent of the value, at the time of the loan, of the amount
in the Member's Regular Savings Account, Tax-Efficient Savings Account, and
the portion, if any, of the Member's Company Matching Contributions Account
which shall have vested pursuant to Paragraph VII, or
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(c) $50,000 reduced by the highest balance of any loans from this Plan
or any other plan maintained by the Company outstanding to the Member during
the 12-month period ending on the day before the date on which the loan is
made.
3. The Committee shall have the power to designate, from time to time,
the method by which the assets in a Member's Tax-Efficient Savings Account to be
used to provide the amount of the loan are determined or to otherwise restrict
the assets categories from which loans can be made.
4. The amount of a loan must be at least $1,000.
5. The entire amount of the loan and all amounts of related interest must
be repaid (a) in substantially level amortization (with payments no less
frequently than quarterly) over a term not to exceed 60 months (or, when
permitted by law, in another manner and over a longer term as the Committee may
determine) after the month in which the loan is effective, and (b) in full upon
commencement of distribution of a Participant's Plan assets after his
separation from service. Repayments shall be made by a Member from the
Member's salary by payroll deductions or in another manner as the Committee may
prescribe.
6. The Committee shall have the power to designate, from time to time, the
method by which the amounts paid by a Member, including interest payments, with
respect to a loan shall be invested.
7. The loan shall bear interest at a rate, determined by the Committee,
that provides the Plan with a return commensurate with the interest rates
charged by persons in the business of lending money for loans which would be
made under similar circumstances. The Committee shall not discriminate among
Members in determining the interest rate. Notwithstanding the foregoing, loans
granted at different times may bear different interest rates if, in the opinion
of the Committee, the difference in rates is justified by changes in general
economic conditions in the community.
8. In the event the borrowing Member fails to pay the entire amount of any
loan balance due after final demand for payment at the maturity date of the
loan, the loan will be declared in default and will be treated as a taxable
event for Federal income tax purposes, as provided in applicable law.
XIV. PERMISSIBLE WITHDRAWAL OF ASSETS ATTRIBUTABLE TO REGULAR SAVINGS
CONTRIBUTIONS AND COMPANY MATCHING CONTRIBUTIONS PRIOR TO TERMINATION OF
EMPLOYMENT.
At any time or from time to time prior to termination of employment, a
Member may withdraw the portion of the amount in his or her Regular Savings
Account, and in that portion of his or her Company Matching Contributions
Account that shall have vested
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pursuant to Paragraph VII, as the Member shall designate in accordance
with the following:
1. Each withdrawal shall be made (a) prior to October 1, 1996, effective
as of the last day of a calendar month, upon the Member's written request
delivered to the Company on or before the 23rd day (or a different day as the
Committee may from time to time determine) of the month and (b) on and after
October 1, 1996, effective as of receipt by the Trustee of the Member's written
valid request for withdrawal. The amount being withdrawn shall be delivered to
the Member as soon as practicable after the effective date of the withdrawal.
2. Upon and in accordance with each request for withdrawal, there shall be
delivered to the Member the amount in the Member's Regular Savings Account and
in that portion, if any, of his or her Company Matching Contributions Account
that (i) shall have, vested pursuant to Paragraph VII and (ii) is attributable
to Regular Savings Contributions or Tax-Efficient Savings Contributions for
years that are separated by two or more Plan years from the year of withdrawal.
Prior to October 1, 1996, to the extent that any non-vested amount in a
Member's Company Matching Contributions Account shall have been credited in
respect of Regular Savings Contributions which shall be withdrawn by the
Member, that non-vested amount shall be forfeited and shall be applied as
provided in Subparagraph 1 of Paragraph XXIII.
3. If, during the two Plan Years immediately following the year for which
Company Matching Contributions are made in respect of a Member's Regular
Savings Contributions, the Member shall withdraw the assets from his or her
Regular Savings Account that are attributable to such Regular Savings
Contributions, the Member shall not be permitted to make Regular Savings
Contributions or Tax Efficient Savings Contributions for a 12-month period
after the effective date of the withdrawal.
4. Subject to the provisions of Paragraph XXII, and subject to any
regulations the Committee shall from time to time prescribe, a Member
requesting withdrawal pursuant to this Paragraph may agree to the sale for
purposes of the Plan of all full shares of Rouge Stock or Ford Stock covered by
his or her withdrawal request, the sale to be at a price per share equal to the
Current Market Value of the stock on the effective date of the withdrawal. The
Member so agreeing shall pay all applicable transfer taxes incident to the sale
and the amount thereof may be deducted from the payment made by the Trustee to
the Member.
XV. PERMISSIBLE WITHDRAWAL OF ASSETS ATTRIBUTABLE TO TAX-EFFICIENT SAVINGS
CONTRIBUTIONS PRIOR TO TERMINATION OF EMPLOYMENT.
Prior to termination of employment, and subject to Paragraph XVIII, a
Member shall be permitted to withdraw all or any portion
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of the amount in the Member's Tax-Efficient Savings Account subject to
the following provisions of this Paragraph.
1. A Member shall be permitted to make a withdrawal from his or her
Tax-Efficient Savings Account (a) if the Committee determines that either (i)
the Member shall have attained age fifty-nine and one-half (59-1/2) or (ii) the
Member shall not have attained age fifty-nine and one-half (59-1/2),
but there exists a financial hardship with respect to the Member sufficient in
any event under United States Treasury Regulations in effect at that time to
allow the amount to be withdrawn without loss of qualification for the Plan
under Code Section 401(k); and (b) following the withdrawal, the aggregate
amount of all withdrawals by a Member on account of financial hardship do not
exceed the sum of the dollar amounts of Tax-Efficient Savings Contributions
made to the account of the Member and of earnings allocable thereto credited as
of December 31, 1988. Any withdrawal of assets pursuant to Subparagraph
1(a)(ii) above shall be made as of the date specified by the Committee in its
determination of the existence of a financial hardship. The assets so
withdrawn shall be delivered to the Member as soon as practicable after the
effective date of the withdrawal.
2. Withdrawals based on financial hardship under Subparagraph 1(a)(ii) of
this Paragraph shall be subject to the provisions of this Subparagraph 2. A
financial hardship withdrawal must be made on account of an immediate and heavy
financial need of the Member as determined in accordance with Subparagraph 2(a)
of this Paragraph XV and must be necessary to satisfy the immediate and heavy
financial need as determined in accordance with Subparagraph 2(b) of this
Paragraph XV.
(a) The determination of whether an immediate and heavy financial need
exists shall be based on all relevant facts and circumstances. A financial
need shall not be disqualified because it was reasonably foreseeable or
voluntarily incurred. An immediate and heavy financial need shall be deemed
to exist if the distribution, among other causes, is for:
(i) Medical expenses described in Code Section 213(d) incurred
(or necessary to obtain medical care) by the Member, a Member's spouse
or any other dependents of the Member (as defined in Code Section
152);
(ii) The purchase (excluding mortgage payments) of a principal
residence for the Member;
(iii) Funeral expenses for a member of the Member's family;
(iv) Payment of tuition for the next twelve months of
post-secondary education for the Member, or the Member's spouse,
children or dependents;
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(v) The need to prevent the eviction of the Member from his or
her principal residence or foreclosure on the mortgage of the Member's
principal residence; or
(vi) An expense of $500 or more approved by the Committee as
constituting an immediate and heavy financial need of the Member.
(b) The Committee shall determine, based upon the Member's
representation and other facts as are known to the Committee, that all of
the following conditions are satisfied:
(i) The distribution is not in excess of the amount for the
immediate and heavy financial need of the Member; and
(ii) The Member has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently available
under all plans maintained by the Company.
3. A Member who shall make a withdrawal pursuant to Subparagraph 1(a)(ii)
of this Paragraph shall not be permitted to make Regular Savings Contributions
or Tax-Efficient Savings Contributions to any plan of the Company for a
12-month period after the effective date of the withdrawal.
4. If, during the two Plan Years immediately following the year for which
Company Matching Contributions are made in respect of a Member's Tax-Efficient
Savings Contributions, the Member shall withdraw, in accordance with
Subparagraph 1(a)(i) of this Paragraph, assets from his or her Tax-Efficient
Savings Account that are attributable to such Tax-Efficient Savings
Contributions, the Member shall not be permitted to make Regular Savings
Contributions or Tax-Efficient Savings Contributions for a 12-month period
after the effective date of the withdrawal.
5. Prior to October 1, 1996, to the extent that any non-vested amount in a
Member's Company Matching Contributions Account shall have been credited in
respect of Tax-Efficient Savings Contributions which shall be withdrawn by the
Member pursuant to this Paragraph, that non-vested amount shall be forfeited
and shall be applied as provided in Subparagraph 1 of Paragraph XXIII.
6. Subject to the provisions of Paragraph XXII, and subject to any
regulations the Committee shall from time to time prescribe, a Member
requesting withdrawal pursuant to this Paragraph may agree to the sale for
purposes of the Plan of all full shares of Rouge Stock or Ford Stock covered by
his or her withdrawal request, the sale to be at a price per share equal to the
Current Market Value of the stock on the effective date of the withdrawal. The
Member so agreeing shall pay all applicable
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transfer taxes incident to the sale, and the amount thereof may be
deducted from the payment made by the Trustee to the Member.
XVI. QUALIFIED DOMESTIC RELATIONS ORDERS.
Notwithstanding any other provision of the Plan, any account of a Member
may be apportioned between the Member and an alternate payee (as defined in
Code Section 414(p)(8)) either through separate accounts or by providing the
alternate payee a percentage of the Member's accounts. The Committee may
direct a distribution to an alternate payee pursuant to a qualified domestic
relations order as defined in Code Section 414(p)(1)(A) provided that the
Committee has properly notified the affected Member and each alternate payee of
the order and has determined that the order is a qualified domestic relations
order as defined in the Code. A distribution to an alternate payee may be made
prior to the date on which the Member attains the earliest retirement age, as
defined by Code Section 414(p)(4)(B), provided that the alternate payee shall
be paid in a lump sum his or her portion of the Member's accounts.
XVII. DISTRIBUTION IN KIND.
Distributions pursuant to Paragraph XII, XIV or XV which are attributable
to amounts invested in Rouge Stock or Ford Stock shall be distributed in the
form of that stock unless the Member has agreed to sell the same pursuant
Paragraphs XII, XIV or XV and XXII. All other distribution amounts shall be in
cash.
Rouge Stock held in and distributed from the Plan and Participants holding
such stock are subject to applicable securities law limitations, as well as
such other rules and limitations as the Committee may from time to time
prescribe on a uniform basis that does not discriminate against non-Highly
Compensated Employees.
XVIII. FURTHER WITHDRAWALS.
On and after March 1, 1996, a terminated Member immediately accepting
employment with an unrelated company as part of the sourcing of a Company
activity or operation pursuant to a written sourcing agreement with such
unrelated company, as contemplated in the Rouge Steel Company Directive
"Salaried Personnel Matters Affected By Changes In Corporate Structure," as
amended from time to time, shall be entitled, at any time following such
sourcing and provided such Member is at least age 59-1/2, pursuant to the same
terms as a withdrawal under subparagraph 1(a)(i) of Paragraph XV, to a total
distribution of the amounts in the Member's Regular Savings Account,
Tax-Efficient Savings Account, and the portion, if any, of the Member's Company
Matching Contributions Account which shall have vested; and
On and after January 1, 1997, a terminated Member immediately accepting
employment with an unrelated company as part of the
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sourcing agreement with such unrelated company, as contemplated in the
Rouge Steel Company Directive "Salaried Personnel Matters Affected By Changes In
Corporate Structure," as amended from time to time, and who has not separated
from service for purposes of Section 401(k) of the Code shall be entitled at any
time on and after January 1, 1997, to a distribution based on financial hardship
from his or her Plan account on the same terms and conditions as set forth in
Paragraph XV.
XIX. MEMBER'S SEMIANNUAL STATEMENT.
As soon as practicable after June 30 and December 31 of each year, there
shall be furnished to each Member a statement as of June 30 and December 31 of
the year of the specific assets, specific funds and other investments permitted
under the Plan and in the Member's accounts as of the midyear and year-end
valuation dates, respectively. The Committee may determine, from time to time,
to cause other information, including price and valuation information, to be
included in the statements. The statements shall be deemed to have been
accepted by the Member and the Member's beneficiaries designated hereunder as
correct unless written notice to the contrary shall be received by the Company
within 30 days after the mailing of the statement to the Member. The Committee
may provide, from time to time, for additional statements to Members. The
Committee also may, after having previously increased the number of statements,
reduce the number of statements; but it may not terminate the statements as of
June 30 and December 31.
XX. NOTICES, ETC.
All notices, statements and other communications from the Trustee or a
Participating Company to an Employee, Member or designated beneficiary required
or permitted hereunder shall be deemed to have been duly given, furnished,
delivered or transmitted, as the case may be, when delivered to (or when mailed
by first-class mail, postage prepaid and addressed to) the Employee, Member or
beneficiary at his or her address last appearing on the books of the
Participating Company or, in the case of an Employee, delivered to the Employee
at his or her normal work station.
All notices, instructions and other communications from an Employee or
Member to the Company or Trustee required or permitted hereunder (including,
without limitation, payroll deduction authorizations, Salary Reduction
Agreements and changes and terminations thereof, investment and other
elections, requests for withdrawal or loans and designations of beneficiaries
and revocations and changes thereof) shall be in the respective form from time
to time prescribed therefor by the Committee, shall be mailed by first-class
mail or delivered to a location as shall be specified in regulations or upon
the forms or in the form prescribed by the Committee and shall be deemed to
have been duly
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given and delivered upon receipt by the Company or Trustee in
such form, as the case may be, at that location.
From time to time as necessary to facilitate the administration of the
Plan and the trust created thereunder, the Company, the Trustee and the
Committee shall deliver to each other copies or consolidations of the notices,
instructions or other communications in respect of the Plan or the trust as it
may receive from Employees, Members or beneficiaries.
XXI. TRUSTEE.
The Company shall appoint one or more individuals or corporations to act
as Trustee under the Plan, and at any time may remove the Trustee and appoint a
successor Trustee. The Company may, without reference to or action by any
Employee, Member or beneficiary or any other Participating Company, enter into
a Trust Agreement with the Trustee and from time to time enter into further
agreements with the Trustee or other parties, make amendments to the Trust
Agreement or further agreements and take other steps and execute other
instruments as the Company in its sole discretion may deem necessary or
desirable to carry the Plan into effect or to facilitate its administration.
The Trustee and the Company may by mutual agreement in writing arrange for
the delegation by the Trustee to the Committee of any of the functions of the
Trustee, except for the custody of assets, the voting of Rouge Stock and Ford
Stock held by the Trustee and the purchase and sale or redemption of
securities.
XXII. PURCHASES OF SECURITIES BY THE TRUSTEE.
Regular Savings Contributions, Tax-Efficient Savings Contributions,
Company Matching Contributions, Rollover Contributions and earnings thereon in
the accounts of Members shall be invested by the Trustee as soon as practicable
after receipt thereof by the Trustee, subject to the following provisions of
this Paragraph and as the Committee may determine, from time to time, with
respect to specific assets, specific funds or other investments permitted under
the Plan.
Any current cash balance in a Member's account or accounts after the
investing of contributions for the last month of a Plan Year shall be invested
pursuant to the Plan related trust. At any time or from time to time, the
Committee may adopt regulations or practices as it may deem appropriate with
respect to the minimum fractional interest in a share of Rouge Stock and in
other designated specific assets, specific funds or other investments permitted
under the Plan in which the cash in a Member's account shall be invested.
The shares of Rouge Stock from time to time required for purposes of the
Plan shall be purchased by the Trustee from a stock exchange or in any other
manner the Committee from time to
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time in its sole discretion may designate or prescribe; provided,
however, that prior to October 1, 1996, the Trustee at all times may purchase
such shares from Members who have agreed to sell the same to the Trustee
pursuant to the provisions of Paragraphs XII, XIV and XV; and provided, further,
that the Trustee at all times may use for purposes of the Plan the shares which
are removed from a Member's account pursuant to the Member's election to have an
amount equal to the value of such shares transferred pursuant to Paragraph IX,
and the Trustee shall treat those shares as having been purchased by it at a
price equal to that amount; and provided, further, that except as required by
any such designation by the Committee, such shares shall be purchased by the
Trustee from any source and in any manner as the Trustee from time to time in
its sole discretion may determine. Any shares so purchased from the Company or
Rouge Industries, Inc. may be either treasury stock or newly issued stock, and
if so shall be purchased at a price per share equal to the average of the
highest price and the lowest price at which shares of Rouge Stock are sold on
the date preceding the date of purchase or, if no sales were made on that date,
on the next preceding day on which there were sales, in either case as reported
in the Composite Quotation Listing. All funds in the accounts of the several
Members that become available simultaneously for investment in Rouge Stock may
be invested simultaneously or over a period of time, but funds that become
available first shall be invested first. If the funds that become available
simultaneously for investment are used to purchase shares of Rouge Stock at more
than one price, the total number of shares so purchased shall be allocated on a
full or fractional share basis, or both, as the case may be, to the respective
accounts of the Members ratably in accordance with the respective amounts of
funds in their accounts so used.
Anything herein to the contrary notwithstanding, the Trustee shall not
invest any of the funds in the Members' accounts in any shares of Rouge Stock,
unless at the time of purchase thereof by the Trustee the shares shall be
listed on the New York Stock Exchange.
The shares of Rouge Stock held by the Trustee under the Plan shall be
registered in the name of the Trustee or its nominee, but shall not be voted by
the Trustee or the nominee except as provided in Paragraph XXIV.
In the sole discretion of the Trustee, investments in Rouge Stock in
respect of the accounts of more than one Member may be represented by a single
certificate.
In the event that any option, right or warrant shall be received by the
Trustee on Rouge Stock to the credit of one or more Members' accounts, the
Trustee shall sell the same, at public or private sale and at a price and upon
other terms as it may determine, and credit the proceeds thereof to the
respective accounts of the Members, ratably in accordance with their interests
therein, unless the Committee shall determine that the
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option, right or warrant should be exercised, in which case the Trustee
shall exercise the same upon terms and conditions as the Committee may
prescribe.
The provisions of this Paragraph shall also apply independently to
transactions in Ford Stock, except that Ford Stock may not be acquired from the
Company.
XXIII. FORFEITED COMPANY MATCHING CONTRIBUTIONS.
1. Any amount attributable to Company Matching Contributions or earnings
thereon, which shall be forfeited in a Member's Company Matching Contributions
account pursuant to Subparagraph 4 of Paragraph V, Subparagraph 4 of Paragraph
XII, Subparagraph 2 of Paragraph XIV, or Subparagraph 5 of Paragraph XV shall
be applied, as soon as practicable, first, to the payment of certain expenses
for administration of the Plan, as described in the eighth paragraph of
Paragraph XXVI, and thereafter, to reduce the amount of any Company Matching
Contributions under the Plan or, if the Plan shall be terminated, any amount
not so applied from time to time shall be credited ratably to the respective
Company Matching Contributions Accounts of the Members in the Plan as of the
day immediately following the date of forfeiture. In the latter case, any
amounts so credited to a Member's Company Matching Contributions Account, and
any increment thereof, shall, at the time of distribution or withdrawal
thereof, be deemed to have vested in such account, the provisions of Paragraph
VII notwithstanding. The Rouge Stock or Ford Stock applied to reduce the
amount of the Company Matching Contribution, or applied to the payment of
certain expenses for administration of the Plan, pursuant to the provisions of
this Paragraph XXIII, shall be valued at a price per share equal to the average
of the highest price and the lowest price at which shares of Rouge Stock or
Ford Stock, respectively, are sold on the date of such application or, if no
sales were made on that date, on the next preceding day on which there were
sales, in either case as reported in the Composite Quotation Listing.
2. If (a) a Member's accounts are distributed to him or her pursuant to
the provisions of Paragraph XII or (b) if a Member shall make a withdrawal from
his or her Regular Savings Account pursuant to the provisions of Paragraph XIV
or from his or her Tax-Efficient Savings Account pursuant to Paragraph XV prior
to October 1, 1996, and prior to the date on which related Company Matching
Contributions and Earnings thereon have vested, as determined pursuant to the
provisions of Paragraph VII, the Member may subsequently elect, subject to the
limitations hereinafter provided, to return to the Plan in a lump sum in cash
the value as of the effective date of the distribution or withdrawal of the
securities and cash delivered pursuant to the distribution or withdrawal and
thereby have restored to his or her Company Matching Contributions Account
securities and cash having a value equal to the value, as of the effective
date of the distribution or withdrawal, of the securities and cash
attributable to Company
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Matching Contributions and Earnings thereon that had been forfeited.
Any such return may be made only while the Member is an Employee of a
Participating Company and may not be made later than the end of the five-year
period beginning with the effective date of the withdrawal or in the case of a
distribution pursuant to Paragraph XII following termination of employment, not
later than five years after the date the Member shall have been reemployed by a
Participating Company.
If any such return is made on or before December 31 of the year in which
the effective date of the distribution or withdrawal falls, the amount of
forfeitures to be restored which is attributable to the returned amount shall
be included in the same Plan Year as the effective date of the distribution or
withdrawal and if made after that December 31, in the Plan Year which succeeds
the Plan Year in which the effective date of the distribution or withdrawal
fell by one Plan Year for each December 31 that occurs on or after the
effective date of distribution or withdrawal and prior to the date of such
return.
Amounts so returned shall be treated as attributable to Regular Savings
Contributions for all purposes of the Plan. Amounts so restored shall vest as
provided in Paragraph VII and shall be treated as attributable to Company
Matching Contributions for all purposes of the Plan.
Amounts so returned and amounts so restored shall be invested in Rouge
Stock, specific assets, specific funds and other investments permitted under
the Plan according to the values of the investments in the securities and cash
distributed to or withdrawn by the Member on the effective date thereof (or in
accordance with a method determined by the Committee in case an intervening
change in the permitted investments has terminated an investment alternative),
at the same time the Trustee invests contributions made during the month in
which the return is made.
XXIV. VOTING OF ROUGE AND FORD STOCK.
The Trustee, itself or by its nominee, shall be entitled to vote, and
shall vote, shares of Rouge Stock in the accounts of Members or otherwise held
by the Trustee under the Plan as follows:
1. The Company shall adopt reasonable measures to notify the Member of the
date and purposes of each meeting of stockholders of the Company or Rouge
Industries, Inc., at which holders of shares of Rouge Stock shall be entitled
to vote, and to request instructions from the Member to the Trustee as to the
voting at the meeting of full shares of Rouge Stock and fractions thereof in
any account of the Member.
2. In each case, the Trustee, itself or by proxy, shall vote full shares
of Rouge Stock and fractions thereof in the
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account or accounts of the Member in accordance with the instructions of
the Member.
3. If prior to the time of a meeting of stockholders the Trustee shall not
have received instructions from the Member in respect of any shares of Rouge
Stock in the account or accounts of the Member, and if the Trustee otherwise
holds shares of Rouge Stock under the Plan, the Trustee shall vote thereat the
shares proportionately in the same manner as the Trustee votes thereat the
aggregate of all shares of Rouge Stock with respect to which the Trustee has
received instructions from Members.
The provisions of this Paragraph shall also apply independently to voting
of Ford Stock.
XXV. CASH ADJUSTMENTS ON ACCOUNT OF FRACTIONAL INTEREST IN SECURITIES.
Any fractional interest in a share of Rouge Stock, Ford Stock or any other
security in any account of a Member shall not be subject to distribution or
withdrawal, but the value thereof shall be subject to transfer pursuant to
Paragraph IX. Settlement for any fractional interest in the security, upon
distribution or withdrawal thereof, shall be made in cash based on the Current
Market Value or any applicable current redemption value of the security, as of
the date of distribution or withdrawal, as the case may be. The Trustee for
the purpose of providing cash for settlements pursuant to the provisions of
this Paragraph XXV may in its discretion obtain the cash from contributions
under the Plan. In that event, the Trustee, with respect to the shares of
Rouge Stock or Ford Stock which otherwise would have been sold to provide cash
for the settlements, shall retain and reallocate interest in the same among the
accounts of Members in the Plan entitled thereto and at the Current Market
Value of the shares for purposes of the cash settlements.
XXVI. OPERATION AND ADMINISTRATION.
Pursuant to ERISA the Company shall be a named fiduciary with respect to
the Plan and shall have authority to control and manage the operation and
administration of the Plan.
In addition to other duties provided elsewhere in the Plan, the Board of
Directors shall have the authority, on behalf of the Company, to do the
following: appoint and remove trustees as provided under Paragraph XXI; to
approve policies relating to the allocation of contributions and the
distribution of assets among trustees; to approve Plan amendments; to appoint
investment managers, auditors and other professionals under the Plan; to
appoint the members of the Committee as hereafter provided for in this
Paragraph; and to determine prior service for eligibility purposes under the
Plan in the event of acquisition by a Participating Company (by purchase,
merger, or otherwise) of all or part of the assets of another corporation.
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The Board of Directors shall have the authority to designate other persons
to carry out specific responsibilities on behalf of the Company and may
authorize those persons and their designees to further delegate some or all of
those specific responsibilities; provided, however, that the actions of those
persons shall be consistent with ERISA, the Code and the Plan.
Any Company director, officer or employee who shall have been expressly
designated pursuant to the Plan, including delegations of responsibilities
authorized thereunder, to carry out specific Company responsibilities shall be
acting on behalf of the Company. Any person or group of persons may serve in
more than one capacity with respect to the Plan and may employ one or more
persons to render advice with regard to any responsibilities such person has
under the Plan.
The Company shall create a Savings Plan Committee consisting of at least
three members. The Company shall from time to time designate the members of
the Committee. The Committee shall appoint its own Chairperson and Secretary,
and shall act by a majority of its members with or without a meeting. The
Secretary or the Vice President-Finance and Controller of the Company shall
from time to time notify the Trustee of the appointment of members of the
Committee and alternates and of the appointment of the Chairperson and
Secretary of the Committee, upon which notices the Trustee shall be entitled to
rely.
The Committee shall have full power and authority to administer the Plan
and to interpret its provisions. Any interpretation of the provisions of the
Plan by the Committee shall be final and conclusive, and shall bind and may be
relied upon by the several Participating Companies, each of their Employees,
the Trustee and all other parties in interest.
No member of the Committee or director, officer or employee of any
Participating Company shall be liable for any action or failure to act under or
in connection with the Plan, except for his or her own bad faith; provided,
however, that nothing herein shall be deemed to relieve any such person from
responsibility or liability for any obligation or duty under ERISA. Each
director, officer, or employee of the Company who is or shall have been
designated to act on behalf of the Company and each person who is or shall have
been a member of the Committee, or a director, officer or employee of any
Participating Company, as such, shall be indemnified and held harmless by the
Company against and from any and all loss, cost, liability or expense that may
be imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan and against and from any and all amounts paid by
him or her in settlement thereof (with the Company's written approval) or paid
by him or her in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment in favor of the Company
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based upon a finding of his or her bad faith; subject, however, to the
condition that, upon the assertion or institution of any such claim, action,
suit or proceeding against him or her, he or she shall in writing give the
Company an opportunity, at its own expense, to handle and defend the same before
he or she undertakes to handle and defend it on his or her own behalf. The
foregoing right of indemnification shall not be exclusive of any other right to
which such person may be entitled as a matter of law or otherwise, or any power
that a Participating Company may have to indemnify him or her or hold him or her
harmless.
Brokerage commissions and transfer taxes on the purchase and sale of
specific assets, specific funds or other investments permitted under the Plan,
including Ford Stock but excluding Rouge Stock, shall be paid from Fund assets
by the Trustee, and the expenses of any collective, common or commingled asset,
fund or investment shall be paid from the respective assets in the collective,
common or commingled asset, fund or investment. Earnings credited to the
account of the Trustee under any specific assets, specific funds or other
investments permitted under the Plan may be net of those charges as approved by
the Committee. All other expenses of administration of the Plan, including
brokerage commissions and fees incurred in connection with the purchase and
sale of Rouge Stock, fees of investment advisors and other expenses charged or
incurred by the Trustee or the Company, shall be borne by the Company and upon
request from time to time, the Company shall reimburse the Trustee for expenses
incurred by it. Taxes, if any, on any specific assets, specific funds or other
investments permitted under the Plan held by the Trustee or income therefrom
which are payable by the Trustee shall be charged against the Members' accounts
as the Trustee and the Committee shall determine.
If the Member or beneficiary to whom benefits are to be distributed cannot
be located, and reasonable efforts have been made to find him or her, including
the sending of notification by certified or registered mail to his or her last
known address, the Committee may direct the Trustee to distribute the benefits
in question to an interest bearing savings account established in the name of
the Member or beneficiary; or, if the benefits are payable to a Member, the
Committee may instruct the Trustee to distribute the funds to the Member by
purchasing U.S. Savings Bonds in the Member's name and holding them for the
Member.
Each Employee at or before the time of electing to participate in the Plan
shall be given a summary plan description of the Plan, and if the Employee so
requests, a copy of the Plan, as in effect at the time. As a condition of
membership, an Employee may be required to sign an instrument in form
prescribed by the Committee evidencing the fact that he or she accepts and
agrees to all provisions of the Plan.
Profits and Sales, for purposes of the Plan, shall be conclusively
determined by the Company, and the Committee may rely
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on that determination. The records of the Trustee, the Committee and any
Participating Companies shall be conclusive in respect of all matters involved
in the administration of the Plan.
The Plan shall be governed by and construed in accordance with the laws of
the State of Michigan.
XXVII. TERMINATION, SUSPENSION AND MODIFICATION.
The Company, by action of its Board of Directors, may terminate or modify
the Plan or suspend the operation of any provision of the Plan, as follows:
1. The Company may terminate the Plan at any time or may at any time or
from time to time modify the Plan, in its entirety or in respect of the
Employees of one or more of the Participating Companies. The Company may at
any time or from time to time terminate or modify the Plan or suspend for any
period the operation of any provision thereof, in respect of any Employees
located in one or more States or countries, if in the judgment of the Committee
compliance with the laws of such State or country would involve
disproportionate expense and inconvenience to a Participating Company. Any
modification that affects the rights or duties of the Trustee may be made only
with the consent of the Trustee. Any such termination, modification or
suspension of the Plan may affect Members in the Plan at the time thereof, as
well as future Members, but may not affect the rights of a Member as to (a) the
distribution or withdrawal of the amount in the accounts of the Member as of
the effective date of the termination, modification or suspension, or (b) the
vesting or continuance of vesting of the securities and cash attributable to
Company contributions or earnings thereon. Any termination or modification of
the Plan or suspension of any provision thereof shall be effective as of the
date as the Company may determine, but not earlier than the date on which the
Company shall give notice of the termination, modification or suspension to the
Trustee and to the Participating Companies any of the Employees of which are
affected thereby.
2. The provisions of the foregoing Subparagraph 1 notwithstanding, the
Company, by action of its Board of Directors, or by action of persons
authorized by the Board of Directors, at any time or from time to time may
modify any of the provisions of the Plan in any respect retroactively, if and
to the extent necessary or appropriate in the judgment of the Board of
Directors of the Company to qualify or maintain the Plan and the trust fund
established thereunder as a plan and trust meeting the requirements of Code
Sections 401(a), 401(k) and 501 (a), as now in effect or hereafter amended, or
any other applicable provisions of Federal tax laws or other legislation, as
now in effect or hereafter amended or adopted, and the regulations thereunder
at the time in effect.
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3. Anything herein to the contrary notwithstanding, no termination or
modification of the Plan or suspension of any provision thereof may diminish
the amount in the accounts of a Member as of the effective date of the
termination, modification or suspension.
4. In the event of any merger or consolidation with, or transfer of assets
or liabilities to, any other plan, each Employee, Member, former Employee,
former Member, beneficiary or estate eligible under the Plan shall, if the Plan
is then terminated, have a benefit immediately after the merger, consolidation
or transfer, which is equal to the benefit he or she would have been entitled
to immediately before the merger, consolidation or transfer if the Plan had
then terminated.
XXVIII. CONDITIONS ON PARTICIPATION OF SUBSIDIARIES OF THE COMPANY.
The consent of the Company to the participation in the Plan of any
subsidiary of the Company may be conditioned upon provisions the Company may
prescribe, including, without limitation, conditions as to (a) the instruments
to be executed and delivered by the Participating Company to the Trustee, (b)
the extent to which the Company shall act as the representative of the
Participating Company under the Plan, (c) the rights of the Participating
Company to withdraw from participation in the Plan and the effect of the
withdrawal upon the memberships and accounts in the Plan of Employees of the
Participating Company, and (d) reimbursement of the Company on account of
Company Matching Contributions.
XXIX. MEMBER'S RIGHTS NOT TRANSFERABLE.
No right or interest of any Member under the Plan or in his or her
accounts shall be assignable or transferable, in whole or in part, either
directly or by operation of law or otherwise, including, without limitation by
execution, levy, garnishment, attachment, pledge or in any other manner, except
in accord with the provisions of a qualified domestic relations order as
defined by Code Section 414(p) and further excluding devolution by death or
mental incompetency; no attempted assignment or transfer thereof shall be
effective; and no right or interest of any Member under the Plan or in his or
her accounts shall be liable for, or subject to, any obligation or liability of
the Member.
XXX. DESIGNATION OF BENEFICIARIES.
1. Except as provided in Subparagraph 2 of this Paragraph for a married
Member, a Member shall be deemed to have designated as beneficiary or
beneficiaries under the Plan the person or persons who are entitled in the
event of the Member's death to receive the proceeds under the Company's Group
Life Insurance Plan if the Member is covered under that Plan at the date of his
or her death. A Member may in any event file with the Company a written
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designation of a beneficiary or beneficiaries (subject to limitations as to the
classes and numbers of beneficiaries and contingent beneficiaries as the
Committee from time to time may prescribe) to receive the amount in the
accounts of the Member in the Plan. A Member may from time to time revoke or
change his or her designation of beneficiary. Any designation of beneficiary
under the Plan shall be controlling over any testamentary or other disposition.
In the event of the death of a Member, any amount in his or her accounts under
the Plan in respect of which the Member shall have designated or be deemed to
have designated one or more beneficiaries hereunder shall be delivered to the
beneficiaries who shall survive the Member, in accordance with the designation
(to the extent effective and enforceable at the time of the Member's death) and
the provisions of the Plan, subject to regulations the Committee from time to
time may prescribe in respect of distributions to minors; provided, however,
that if the Trustee or the Committee shall be in doubt as to the right of any
beneficiary to receive any amount, the Trustee may deliver the same to the
estate of the Member, in which case the Trustee, the several Participating
Companies and the Committee and the several members thereof and alternates for
members shall not be under any further liability to anyone. Except as
hereinabove provided, in the event of the death of a Member, the amount in his
or her accounts under the Plan shall be delivered to his or her estate.
2. A married Member shall be deemed to have designated his or her
surviving spouse as beneficiary to receive the amount in the Member's accounts
under the Plan unless the Member shall have filed with the Company a written
designation of a different beneficiary pursuant to Subparagraph 1 above,
together with the written consent of the spouse to the designation, witnessed
by a Plan representative or a notary public.
XXXI. LIMITATION ON CONTRIBUTIONS UNDER CODE SECTION 415.
1. Limitation.
Notwithstanding any other provision of this Plan, the sum of the Annual
Additions (as defined in Subparagraph 2 of this Paragraph) in respect of any
Employee for any Limitation Year (as defined in Subparagraph 3 of this
Paragraph) shall not exceed the lesser of:
(a) 25 % of the Employee's Compensation (as defined in Subparagraph 4
of this Paragraph), or
(b) $30,000 (or, if greater, one quarter of the dollar limitation in
effect under Code Section 415(b)(1)(A) as adjusted for inflation by the
Secretary of the Treasury pursuant to Code 415(d) relating to cost-of-living
increases).
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2. Annual Additions.
The Annual Addition in respect of any Employee for any Limitation Year
(as defined in Subparagraph 3 of this Paragraph) shall mean the sum for the year
of:
(a) Company Matching Contributions and Tax-Efficient Savings
Contributions in respect of the Employee under this Plan and any other
defined contribution plan sponsored by the Company, plus
(b) the sum of:
(i) the Employee's contribution under the Company's Salaried
Employee Retirement Plan (or any similar plan of an Affiliate),
(ii) the Employee's Regular Savings Contributions that are
matched by Company Matching Contributions pursuant to Subparagraph 1
of Paragraph V, and
(iii) the Employee's Regular Savings Contributions that are not
matched by Company Matching Contributions.
(c) effective on and after February 1, 1995, forfeitures, if any,
credited to the Employees' accounts under the Plans.
3. Limitation Year.
For purposes of this Paragraph, Limitation Year shall mean the calendar
year.
4. Compensation
As used in Clause 1(a) of this Paragraph, Compensation shall mean the
compensation (as defined by Code Section 415(c)(3) and Treasury Regulation
Section 1.415-2(d)) paid or made available to an Employee during the Limitation
Year in question. Compensation in excess of $150,000, as adjusted annually for
Plan years beginning after December 31, 1993, as provided under Code Section
401(a)(17), shall be disregarded.
5. Order of Application of Limitations.
Effective on and after February 1, 1995, if, as a result of the
allocation of forfeitures, a reasonable error in estimating a participant's
annual compensation, a reasonable error in determining the amount of elective
deferrals (within the meaning of Code Section 402(g)(3)) that may be made with
respect to any individual under the limits of Section 415, or under other
limited facts and circumstances that the Commissioner of the Internal Revenue
Service finds justify the availability of the rules set
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forth in Regulation 1.415-6(b)(6), the Annual Addition taken into
account under subparagraph 2 of this paragraph shall exceed, or shall be
reasonably projected to exceed, the limitation of the Annual Addition required
by subparagraph 1 of this paragraph, any necessary or appropriate reduction in
Employee Regular Savings Contributions, Company Matching Contributions or
Tax-Efficient Savings Contributions shall be applied: first, by reducing
amounts contributed as Tax-Efficient Savings Contributions pursuant to
subparagraph 2 of paragraph V from the Profit Sharing Plan and gains
attributable thereto; second, by reducing the Employee's Regular Savings
Contributions taken into account under subparagraph 2(b)(iii) and gains
attributable thereto of this paragraph; third, by reducing the Employee's
Regular Savings Contributions taken into account under subparagraph 2(b)(ii) of
this paragraph and gains attributable thereto, and related Company Matching
Contributions (in the same ratio as the average percentage for Company Matching
Contributions as projected or determined for a Plan Year in accordance with the
provisions of subparagraph 1 of paragraph V); fourth, by reducing Tax-Efficient
Savings Contributions and gains attributable thereto that are not matched by
Company Matching Contributions; and, fifth by reducing Tax-Efficient Savings
Contributions and gains attributable thereto that are matched by Company
Matching Contributions pursuant to subparagraph 1 of paragraph V and related
Company Matching Contributions (in the same ratio as the average percentage for
Company Matching Contributions as projected or determined for a Plan Year in
accordance with the provisions of subparagraph 1 of paragraph V).
Notwithstanding any other provision of the Plan, in conforming to the
limitations of this Paragraph XXXI the aforementioned reductions in Regular
Savings Contributions, Company Matching Contributions and Tax-Efficient Savings
Contributions may be made in less than a full percentage amount and may be
rounded down to the nearest full dollar. Any reduction pursuant to this
Paragraph may be effected (a) before the Annual Addition reaches the limitation
required by Subparagraph 1 of this Paragraph in order to carry out the ordering
rule of this Subparagraph and (b) retroactively as provided in Section
1.415-6(b)(6)(iv) of the Treasury Regulations: first, by returning amounts
contributed as Regular Savings Contributions taken into account under
subparagraph 2(b)(iii) and gains attributable thereto; second, by returning
amounts contributed as Regular Savings Contributions taken into account under
subparagraph 2(b)(ii) of this paragraph and gains attributable thereto; third,
by distributing Tax-Efficient Savings Contributions that are not matched by
Company Matching Contributions, and gains attributable thereto; and fourth, by
distributing Tax-Efficient Savings Contributions that are matched by Company
Matching Contributions, and gains attributable thereto, all as are necessary to
reduce the Annual Addition to the limitation.
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6. Participants in Plans of Affiliates.
If a Member at any time during the Limitation Year, was a participant
under any defined contribution plan (as the term is used in Code Section
415(c)) or defined benefit plan (as that term is used in Code Section 415(b))
of an Affiliate of the Company (other than an employee stock ownership plan
described in Code Section 415(c)(6)), all such plans being referred to herein
collectively as "affiliate plans," then the determination of the Annual
Addition in respect of such member for such Limitation Year as described in
Subparagraph 3 of this Paragraph shall be modified as provided in this
Subparagraph:
(a) any employer contributions (as the term is used in Code Section
415(c)(2)(A)) and any forfeitures allocated during the year for the account
of the Member under all affiliate defined contribution plans in respect of
services performed prior to the Member's commencement of
participation under this Plan shall be added to the amount determined under
Subparagraph 2(a) of this Paragraph; and
(b) any employee contributions (as that term is used in Code Section
415(c)(2)(B)) by the Member during the year under all affiliate defined
contribution or defined benefit plans in respect of services performed prior
to the Member's commencement of participation under this Plan shall be taken
into account for purposes of Subparagraph 2(b) of this Paragraph.
7. Combined Limitation.
If the Member is, or was, covered under a defined benefit plan and
defined contribution plan maintained by the Company, the sum of the Member's
defined benefit plan fraction and defined contribution plan fraction may not
exceed 1.0 in any Limitation Year.
The defined benefit plan fraction is a fraction, the numerator of which
is the sum of the Member's projected annual benefits under all defined benefit
plans (whether or not terminated) maintained by the Company and the denominator
of which is the lesser of (i) 1.25 times the dollar limitation of Code Section
415(b)(1)(A) in effect for the Limitation Year, or (ii) 1.4 times the Member's
average Compensation for the three consecutive years that produces the highest
average.
The defined contribution plan fraction is a fraction, the numerator of
which is the sum of the Annual Additions to the Member's account under all
defined contribution plans maintained by the Company (whether or not
terminated) for the current and all prior Limitation Years, and the denominator
of which is the sum of the lesser of the following amounts determined for that
Year and for each prior year of service with the employer: (i) 1.25 times the
dollar limitation in effect under Code Section 415(c)(1)(A)
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<PAGE> 50
for that Year, or (ii) 1.4 times the amount which may be taken into
account under Code Section 415(c)(1)(B).
The Annual Addition for any year prior to 1987 shall not be recomputed
to treat all Employee contributions as an Annual Addition. If the plan
satisfied the applicable requirements of Code Section 415 as in effect for all
Limitation Years prior to 1987, an amount shall be subtracted from the numerator
of the defined contribution plan fraction (not exceeding the numerator) as
prescribed by the Secretary of the Treasury so that the sum of the defined
benefit plan fraction and defined contribution plan fraction does not exceed 1.0
for that Limitation Year.
Projected annual benefit means the annual benefit to which the Member
would be entitled under the terms of the plan, if the participant continued
employment until normal retirement age (or current age, if later) and the
Member's Compensation for the Limitation Year and all other relevant factors
used to determine the benefit remained constant until normal retirement age (or
current age, if later).
If, in any Limitation year, the sum of the defined benefit plan fraction
and the defined contribution plan fraction will exceed 1.0, the rate
of benefit accruals under the defined benefit plan will be reduced so that the
sum of the fractions equals 1.0.
8. References to Code.
In applying this Paragraph at any time or from time to time, the
references herein to specific provisions of the Code shall be regarded as
references to those provisions as now in effect or hereafter amended, and to
the regulations thereunder at the time in effect.
XXXII. EFFECT OF TERMINATION.
Upon any termination or partial termination of the Plan or the complete
discontinuance of contributions thereunder, within the meaning of Section
411(d)(3)(A) and (B) of the Code, the amount in the Company Matching
Contributions Account of any affected Employee within the meaning of Code
Section 411(d)(3) shall be deemed to have vested in his or her account and
shall be nonforfeitable as of the date of the termination, partial termination
or complete discontinuance of contributions.
For purposes of this Paragraph, the determination as to whether there is a
termination or partial termination of the Plan or a complete discontinuance of
contributions thereunder and the date thereof and as to the Employees affected
thereby shall be made by the Company; provided, however, that the determination
shall be in accordance with the applicable provisions of the Code. In
determining the applicability of the Code provisions, the Company may rely upon
an opinion of counsel.
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<PAGE> 51
XXXIII. TOP-HEAVY RULES.
If the Plan is or becomes top-heavy in any Plan Year, the provisions of
this Paragraph shall supersede for that Plan Year any conflicting provision of
the Plan. This Plan is top-heavy in any Plan Year if the top-heavy ratio on the
determination date for the year for the required aggregation group of plans
exceeds 60%.
1. Definitions.
(a) Top-heavy ratio:
(i) The top-heavy ratio is a fraction, the numerator of which is
the sum of account balances for all key employees under the defined
contribution plans of the Company and Affiliates and the present value
of accrued benefits for all key employees under the defined benefit
plans of the Company and Affiliates, and the denominator of which is
the sum of the account balances for all participants under the defined
contribution plans of the Company and Affiliates and the present value
of accrued benefits for all participants under defined benefit plans
of the Company and Affiliates. Both the numerator and denominator of
the top-heavy ratio are adjusted for any distribution of an account
balance or an accrued benefit made in the five-year period ending on
the determination date and any contribution due but unpaid as of the
determination date.
(ii) For purposes of (i) above, the value of account balances and
the present value of accrued benefits will be determined as of the
most recent determination date. The account balances and accrued
benefits of a participant (1) who is not a key employee but who was a
key employee in a prior year or (2) who has not been credited with at
least one hour of service at any time during the five-year period
ending on the determination date will be disregarded. The calculation
of the top-heavy ratio and the extent to which distributions,
rollovers, and transfers are taken into account will be made in
accordance with Code Section 416 and the regulations thereunder.
(iii) Solely for the purpose of determining if the Plan, or any
other plan included in a required aggregation group of which this Plan
is a part, is top-heavy (within the meaning of Code Section 416(g))
the accrued benefit of an Employee other than a key employee (within
the meaning of Code Section 416(i)(1)) shall be determined under (a)
the method, if any, that uniformly applies for accrual purposes under
all plans maintained by the Company and Affiliates, or (b) of there is
no such method, as if the benefit accrued not more rapidly
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than the slowest accrual rate permitted under the fractional
accrual rate of Code Section 411(b)(1)(C).
(b) Required aggregation group of plans: (i) each qualified plan of the
Company or an Affiliate in which at least one key employee participates, and
(ii) any other qualified plan of the Company or an Affiliate which enables a
plan described in (i) to meet the requirements of Code Sections 401(a)(4) or
410.
(c) Key employee: Any Employee or former Employee (and the
beneficiaries of such Employee) who at any time during the Plan Year
containing the determination date for the Plan Year in question or the four
preceding Plan Years was an officer of the Company having annual
compensation during a Plan Year greater than 50% of the dollar limitation in
effect under Code Section 415(b)(1)(A); one of the ten Employees having
annual compensation during a Plan Year greater than the dollar limitation in
effect under Code Section 415(c)(1)(A) and owning both more than a .5%
interest and one of the ten largest interests in the Company; a 5% owner of
the Company; or a 1% owner of the Company having annual compensation of more
than $150,000. For this purpose, annual compensation will equal wages
reported on the Employee's Form W-2 from the Company for the Plan Year. The
determination of who is a key employee will be made in accordance with Code
Section 416(i)(1) and the regulations thereunder.
(d) Present value: Present value shall be based on the interest and
mortality rates used to determine actuarial equivalence under the defined
benefit plans.
(e) Determination date: The determination date is the last day of the
preceding Plan Year.
2. Minimum allocation.
(a) Except as otherwise provided in (c) below, the Company
contributions and forfeitures allocated on behalf of any Member who is not a
key employee shall not be less than 3% of the Member's compensation, or if
less than 3%, the percentage at which contributions are made under the Plan
for the year for the key employee for whom such percentage is the highest
for the year. Effective on and after February 1, 1995, the percentage at
which contributions are made for a key employee shall be determined by
dividing the contributions (including Company Matching Contributions and
elective contributions pursuant to Treasury Regulations 1.416-1M-19 and
1.416-1M-20) for and forfeitures allocated on behalf of any such key
employee by so much of his or her total compensation for the year as does
not exceed $150,000, as adjusted for Plan Years beginning after December 31,
1993, as provided under Code Section 401(a)(17). The minimum
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allocation is determined without regard to any Social Security
contribution. The minimum allocation shall be made even though, under other
Plan provisions, the participant would not otherwise be entitled to receive
an allocation, or would have received a lesser allocation for the year
because of (i) the Member's failure to complete 1,000 hours of service (or
any equivalent provided in the Plan), or (ii) the Member's failure to make
mandatory employee contributions to the Plan, or (iii) compensation less than
a stated amount.
(b) For purposes of computing the minimum allocation, compensation will
equal the wages reported on the Employee's Form W-2 from the Company for the
year.
(c) The provisions in (a) above shall not apply to any Member who was
not employed by the Company or an Affiliate on the last day of the Plan
Year.
(d) The provision in (a) above shall not apply to any Member to the
extent the Member is covered under a defined benefit plan of the Company or
an Affiliate and, in lieu of that allocation, such a Member shall accrue an
annual benefit under the defined benefit plan (to be provided solely by
Company contributions and expressed as a life annuity commencing at normal
retirement age) of not less than two percent of his or her highest average
compensation for the five consecutive years for which the Member had the
highest compensation. The minimum accrual under the defined benefit plan is
to be determined without regard to any contribution under the Federal Social
Security Act.
3. Nonforfeitability. The minimum allocation required (to the extent
required to be nonforfeitable under Code Section 416(b)) may not be forfeited
under Code Sections 41 l(a)(3)(B) or 41 l(a)(3)(D).
4. Vesting. For any Plan Year in which this Plan is top-heavy, an
Employee who has completed at least three years of service with the Company or
an Affiliate will have a nonforfeitable right to 100% of his or her account
balance attributable to Company contributions. This minimum vesting schedule
applies to all benefits within the meaning of Code Section 411(a)(7) except
those attributable to Employee contributions, including benefits accrued before
the effective date of Section 416 and benefits accrued before the Plan became
top-heavy. Further, no reduction in vested benefits may occur in the event the
Plan's status as top-heavy changes for any Plan Year. However, this
Subparagraph does not apply to the account balances of any Employee who does
not have an hour of service after the Plan has initially become top-heavy and
the Employee's account balance attributable to employer contributions and
forfeitures will be determined without regard to this Subparagraph.
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<PAGE> 54
5. Combined Limitation. For any Plan Year in which this plan is
top-heavy, the limitation in Subparagraph 7 of Paragraph XXXI shall be computed
by substituting the number 1.0 for the number 1.25 wherever the latter number
appears in that Subparagraph.
XXXIV. DIRECT ROLLOVERS.
1. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Paragraph, a distributee
may elect, at the time and in the manner prescribed by the Committee, to have
any portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
(a) An eligible rollover distribution is any distribution of all or any
portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any distribution that is
one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a specified
period of ten years or more; any distribution to the extent such
distribution is required under Code Section 401(a)(9); and the portion of
any distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) An eligible retirement plan is an individual retirement account
described in Code Section 408(a), an individual retirement annuity described
in Code Section 408(b), an annuity plan described in Code Section 403(a), or
a qualified trust described in Code Section 401(a), that accepts the
distributee's eligible rollover distribution. However, in the case of an
eligible rollover distribution to the surviving spouse, an eligible
retirement plan is an individual retirement account or individual retirement
annuity.
(c) A distributee includes a Member; in addition, a Member's surviving
spouse and the Member's spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in Code Section
414(p), are distributees with regard to the interest of the spouse or former
spouse.
(d) A direct rollover is a payment plan to the eligible retirement plan
specified by the distributee.
2. If a distribution is one to which Code Sections 401(a)(11) and 417 do
not apply, the distribution may commence
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less than 30 days after the notice required under Treasury Regulation
Section 1.411(a)-11(c) is given, provided that: (a) the Committee clearly
informs the Member that the Member has a right to a period of at least 30 days
after receiving the notice to consider the decision of whether or not to elect a
distribution (and, if applicable, a particular distribution option), and (b) the
Member after receiving the notice, affirmatively elects a distribution.
XXXV. QUALIFIED MILITARY SERVICE
Effective on and after December 12, 1994, notwithstanding any provision of
this Plan to the contrary, contributions, benefits and service credit with
respect to qualified military service will be provided in accordance with
Section 414(u) of the Code. Loan repayments will be suspended under this Plan
as permitted under Section 414(u)(4) of the Code.
Date: July 23, 1997 ROUGE STEEL COMPANY
By: /s/ William E. Hornberger
------------------------------
William E. Hornberger
Its: Vice President, Employee
Relations and Public Affairs
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<PAGE> 1
EXHIBIT 10.30
ROUGE STEEL COMPANY
TAX-EFFICIENT SAVINGS PLAN
FOR HOURLY EMPLOYEES
This Plan has been established by the Company to encourage and facilitate
systematic savings and investment by eligible Employees. It also is intended
to permit a broad group of eligible employees to invest in Rouge Steel Company
or its parent company. Unless otherwise noted, references to Paragraphs and
Subparagraphs are references to the provisions of the Plan. All references in
the Plan to Paragraphs, Subparagraphs or other subdivisions are to Paragraphs,
Subparagraphs or other subdivisions of this Plan unless otherwise specified.
The original effective date of the Plan is April 1, 1991. The Plan was last
amended and restated effective October 1, 1996, except as provided therein.
The effective date of this amended and restated Plan is January 1, 1997, except
as expressly indicated herein.
I. DEFINITIONS.
As herein used:
1. "Affiliate" means (a) all corporations that are members of a controlled
group of corporations within the meaning of Code Section 1563(a) (determined
without regard to Code Sections 1563(a)(4) and 1563(e)(3)(c)) and of which the
Company is a member; (b) all trades or businesses, whether or not incorporated,
which are under common control with the Company as provided by Code Section
414(c); (c) all organizations, whether or not incorporated, which are members
of an affiliated service group as provided by Code Section 414(m) and of which
the Company is a member; and (d) all other entities required to be aggregated
with the Company pursuant to Code Section 414(o).
2. "Average Company Matching Contributions Percentage" means the average
of the Company Matching Contributions Percentages of the eligible Employees in
a group.
3. "Average Tax-Efficient Savings Contributions Percentage" means the
average of the Tax-Efficient Savings Contribution Percentages of the eligible
Employees in a group.
4. "Code" means the Internal Revenue Code of 1986, as amended. References
to specific provisions of the Code shall be regarded as references to those
provisions and to any Treasury Regulations thereunder in effect at the time.
5. "Collective Bargaining Agreement" means the Collective Bargaining
Agreement currently effective as between the Company and the International
Union, United Automobile, Aerospace and Agriculture Implement Workers of
America, UAW, (the "Union").
<PAGE> 2
6. "Committee" means the Tax-Efficient Savings Plan Committee created by
the Company pursuant to the provisions of Paragraph XX.
7. "Company" means Rouge Steel Company.
8. "Company Matching Contributions" means and includes amounts contributed
by or on behalf of the Company to the Plan under Subparagraph 2 of Paragraph
IV.
9. "Company Matching Contributions Account" means an account of an
Employee under the Plan to which are credited Company Matching Contributions in
respect of certain Employee Tax-Efficient Savings Contributions and earnings
thereon.
10. "Company Matching Contribution Percentage" means the ratio (expressed
as a percentage) of the Company Matching Contributions under the Plan on behalf
of the eligible Employee for the year to the eligible Employee's compensation
for the Plan Year. "Compensation" means, for purposes of this paragraph,
compensation paid by the Company to the Employee during the year which is
required to be reported as wages on the Employee's Form W-2, plus Tax-Efficient
Savings Contributions, but excludes amounts in excess of $150,000 as adjusted
for Plan Years beginning after 1995, in accordance with Code Section
401(a)(17), for the Plan Year. Prior to January 1, 1997, if a Member is one of
the ten (10) Highly Compensated Employees paid the greatest compensation during
the Plan Year, family member aggregation rules shall apply. As used herein,
family member shall mean with respect to any Member, the Member's spouse,
lineal descendants and ascendants and their spouses, as provided under Code
Section 414(q)(6)(B). However, in applying the limit to compensation, family
members shall include only the affected Member's spouse and any lineal
descendants who have not attained age 19 before the close of the Plan Year.
The Company Matching Contribution Percentage of a Highly Compensated Employee
subject to the family member aggregation rules shall be the Company Matching
Contribution Percentage for the family group (which shall be treated as one
Highly Compensated Employee) determined by aggregating the Company Matching
Contributions and compensation of all eligible family members (including Highly
Compensated Employees).
The Company Matching Contributions and the compensation of all family
members shall be disregarded for purposes of determining the Company Matching
Contributions percentage for the non-Highly Compensated Employee group except
to the extent taken into account under the above family member aggregation
rules for determining the Company Matching Contribution Percentage. If a
Member is required to be aggregated with more than one family group in the
Plan, all Members who are members of those family groups that include the
Member are aggregated as one family group in accordance with the above family
member aggregation rules for determining the Company Matching Contribution
Percentage.
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<PAGE> 3
The determination of the Company Matching Contribution Percentage shall
satisfy other requirements as may be prescribed by the Secretary of the
Treasury pursuant to the Code.
11. "Composite Quotation Listing" means a composite listing of market
prices of securities supplied by a reputable financial statistical service
selected by the Trustee, which listing includes the prices at which securities
are traded on national securities exchanges located in the United States.
12. "Current Market Value" means, with reference to Rouge Stock or Ford
Stock, the market price obtained on the day in question or, if after 2:00 p.m.
on the day in question or no sales were made on that date, at the market price
obtained on the next following day on which sales are made, in either case as
reported in the Composite Quotation Listing.
13. "Earnings" means income or loss resulting from an investment or
reinvestment and any increment thereof and shall include interest, dividends
and other distributions on the investment.
14. "Employee" means each person who is employed at an hourly rate by a
Participating Company and is enrolled on the active employment rolls,
maintained in the United States, of that Participating Company.
15. "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
16. "Ford" means the Ford Motor Company.
17. "Ford Stock" means Common Stock of Ford Motor Company.
18. "Ford-TESPHE" means the Ford Motor Company Tax-Efficient Savings Plan
for Hourly Employees.
19. "Highly Compensated Employee" means any Employee described in Code
Section 414(q) and prior to January 1, 1997, generally means an Employee who
performed services for the Company during the "determination year" and is in
one or more of the following groups:
(a) Employees who at any time during the "determination year" or a
"look-back year" were "five percent owners" of the Company. "Five percent
owner" means any person who owns (or is considered as owning within the
meaning of Code Section 318) more than five percent of the outstanding stock
of the Company possessing more than five percent of the total combined
voting power of all stock of the Company. In determining the percentage
ownership hereunder, employers that would otherwise be aggregated under Code
Sections 414(b), (c), (m) and (o) shall be treated as separate employers.
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<PAGE> 4
(b) Employees who received Compensation during the "look-back year"
from the Company in excess of $99,000.
(c) Employees who received Compensation during the "look-back year"
from the Company in excess of $66,000 and were in the "Top Paid Group of
Employees" for the Plan Year. "Top Paid Group" means the top 20 percent of
Employees who performed services for the Company during the applicable year,
ranked according to the amount of Compensation received from the Company
during the year. For the purpose of determining the number of active
Employees in any year, Employees with less than six (6) months of service
shall be excluded; however, those Employees shall still be considered for
the purpose of identifying the particular Employees in the Top Paid Group.
(d) Employees who are in the group consisting of the 100 Employees paid
the greatest Compensation during the "determination year"
and are also described in (b) or (c) above when these paragraphs are
modified to substitute "determination year" for "look-back year."
The "determination year" shall be the Plan Year for which testing
is being performed, and the "look-back year" shall be the immediately preceding
twelve-month period.
"Compensation" for this purpose means compensation paid by the Company to
the Employee during the year which is required to be reported as wages on the
Employee's Form W-2, plus Tax-Efficient Savings Contributions but excludes
amounts in excess of $150,000, as adjusted for Plan Years beginning after 1995,
in accordance with Code Section 401(a)(17), for the Plan Year.
Additionally, the dollar threshold amounts specified in (b) and (c) above
shall be adjusted for inflation at the time and in the manner as is provided in
the Code and applicable regulations. In the case of an adjustment, the dollar
limits which shall be applied are those for the calendar year in which the
"determination year" or "look-back year" begins.
In determining who is a Highly Compensated Employee, all Affiliates shall
be taken into account as a single employer and leased employees within the
meaning of Code Sections 414(n)(2) and 414(o)(2) shall be considered Employees
unless the leased employees are covered by a plan described in Code Section
414(n)(5) and are not covered in any qualified plan maintained by the Company.
"Highly Compensated Former Employees" shall be treated as Highly
Compensated Employees without regard to whether they performed services during
the "determination year." "Highly Compensated Former Employee" means a former
employee who had a separation year prior to the "determination year" and was a
Highly Compensated Employee in the year of the separation from service or
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<PAGE> 5
in any "determination year" after attaining age 55. Notwithstanding the
foregoing, an Employee who separated from service prior to 1987 will be treated
as a Highly Compensated Former Employee only if during the separation year (or
the year preceding the separation year) or any year after the Employee attains
age 55 (or the last year ending before the Employee's birthday), the Employee
either received Compensation in excess of $50,000 or was a "five percent
owner." For purposes of this Subparagraph, "determination year," Compensation
and "five percent owner" shall be determined in accordance with the above
provisions of this Subparagraph. Highly Compensated Former Employees shall be
treated as Highly Compensated Employees.
20. "Member" means and includes (a) an Employee who shall have elected to
participate in the Plan and, in the case of an Employee of a Participating
Company, shall have filed a Tax-Efficient Savings Agreement then outstanding
under the Plan, and (b) a person who has assets in an account under the Plan.
21. "Participating Company" means and includes the Company and with the
consent of the Company, Rouge Industries, Inc., and each Subsidiary of the
Company or Subsidiary of Rouge Industries, Inc. that shall have elected to
participate in the Plan with the consent of the Company. "Subsidiary of the
Company" means a domestic corporation not less than a majority of the voting
stock of which is owned directly or indirectly by the Company. "Subsidiary of
Rouge Industries, Inc." mean a domestic corporation not less than a majority of
the voting stock of which is owned directly or indirectly by Rouge Industries,
Inc.
22. "Plan" means the Rouge Steel Company Tax-Efficient Savings Plan for
Hourly Employees described herein, which is designated a profit sharing plan
pursuant to Code Section 401(a)(27)(B).
23. "Plan Year" means a twelve-month period starting on the first day of
the first pay period commencing in a calendar year and ending on the last day
of the last pay period commencing in that calendar year.
24. "Profit Sharing Distribution" means an amount distributed to an hourly
employee under the Profit Sharing Plan.
25. "Profit Sharing Plan" means the Rouge Steel Company Profit Sharing
Plan for Hourly Employees.
26. "Profits" means profits, as defined in the Profit Sharing Plan, for a
Quarterly Determination Period, to the extent that the profits are taken into
account in determining the total profit share under the Profit Sharing Plan for
a Quarterly Determination Period.
27. "Quarterly Contribution Period" means any one of successive periods of
three consecutive calendar months, the first
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<PAGE> 6
of which shall begin with the month of May, during which the percentage for
Company Matching Contributions shall be as provided in Subparagraph 2 of
Paragraph IV.
28. "Quarterly Determination Period" means any one of successive periods
of three consecutive calendar months, the first of which begins with the month
of January. "Applicable Quarterly Determination Period" means the Quarterly
Determination Period with respect to which Profits as a percent of Sales shall
determine the percentage for Company Matching Contributions, pursuant to
Subparagraph 2 of Paragraph IV, for the next following Quarterly Contribution
Period, as follows:
<TABLE>
<S> <C>
Shall determine the percentage
for Company Matching
Profits as a Contributions, pursuant to
percent of Sales Subparagraph 2 of Paragraph IV,
for this Quarterly for this next following
Determination Period Quarterly Contribution Period
-------------------- -----------------------------
January through March May through July
April through June August through October
July through September November through January
October through December February through April
</TABLE>
29. "Rouge Stock" means prior to 11:59 p.m., July 30, 1997, Common Stock
of Rouge Steel Company and on or after 11:59 p.m., July 30, 1997, the Common
Stock of Rouge Industries, Inc.
30. "Sales" means sales, as defined in the Profit Sharing Plan, for a
Quarterly Determination Period.
31. "Tax-Efficient Savings Account" means an account of a Member under the
Plan to which are credited Tax-Efficient Savings Contributions on behalf of
that Employee, any rollover contribution made by the Employee and earnings on
each.
32. "Tax-Efficient Savings Agreement" means and includes (a) an agreement
between an Employee and a Participating Company or its designee to have the
Employee's Wages or Profit Sharing Distributions reduced by an amount specified
by the Employee and to have an amount equal to that reduction contributed by
the Participating Company to the Plan on behalf of the Employee, pursuant to
Code Section 401(k) and Paragraph IV; provided, however, that the amount shall
be at a rate of not less than one percent nor more than eighteen percent
(fifteen percent prior to January 1, 1997) of the Employee's Wages and at a
rate of not less than ten percent nor more than 100 percent, in multiples of
ten percent, of the Employee's Profit Sharing Distributions or such lesser
amounts as may be determined as provided in Paragraphs IV and XXV and (b) a
tax-efficient savings agreement in effect under the Ford-TESPHE as of March 31,
1991, on behalf of a Member of this Plan.
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<PAGE> 7
33. "Tax-Efficient Savings Contributions" mean and include (a) amounts
contributed by a Participating Company to the Plan on behalf of an Employee,
pursuant to a Tax-Efficient Savings Agreement, as provided in Paragraph IV, and
(b) amounts contributed for months before April 1, 1991, by Ford or by the
Company to the Ford-TESPHE pursuant to a Tax-Efficient Savings Agreement under
the Ford-TESPHE on behalf of an Employee whose tax-efficient savings account
under the Ford-TESPHE shall have been transferred to this Plan.
34. "Tax-Efficient Savings Contribution Percentage" means the ratio
(expressed as a percentage) of Tax-Efficient Savings Contributions under the
Plan on behalf of the eligible Employee for the year to the eligible Employee's
compensation for the year. "Compensation" for this purpose means compensation
paid by the Company to the Employee during the year which is required to be
reported as wages on the Employee's Form W-2, plus Tax-Efficient Savings
Contributions but excludes amounts in excess of $150,000, as adjusted for Plan
Years beginning after December 31, 1993, in accordance with Code Section
401(a)(17), for the Plan Year. The determination of the Tax-Efficient Savings
Contribution Percentage and the treatment of Tax-Efficient Savings
Contributions shall satisfy other requirements as may be prescribed by the
Secretary of the Treasury pursuant to the Code. Prior to January 1, 1997, if a
Member is one of the ten (10) Highly Compensated Employees paid the greatest
compensation during the Plan Year, family member aggregation rules shall apply.
As used herein, family member shall mean with respect to any Member, the
Member's spouse, lineal descendants and ascendants and their spouses, as
provided under Code Section 414(q)(6)(B). However, in applying the limit to
compensation, family members shall include only the affected Member's spouse
and any lineal descendants who have not attained age 19 before the close of the
Plan Year. The Tax-Efficient Savings Contribution Percentage of a Highly
Compensated Employee subject to the family member aggregation rules shall be
the Tax-Efficient Savings Contribution Percentage for the family group (which
shall be treated as one Highly Compensated Employee) determined by aggregating
Tax-Efficient Savings Contributions and compensation of all eligible family
members (including Highly Compensated Employees).
The Tax-Efficient Savings Contributions and compensation of all family
members shall be disregarded for purposes of determining the Tax-Efficient
Savings Contributions percentage of the non-Highly Compensated Employee group
except to the extent taken into account under the above family member
aggregation rules for determining the Tax-Efficient Savings Contribution
Percentage. If a Member is required to be aggregated with more than one family
group in a plan, all Members who are members of those family groups that
include the Member are aggregated as one family group in accordance with the
above family member aggregation rules for determining the Tax-Efficient Savings
Contribution Percentage.
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<PAGE> 8
35. "Trustee" means the trustee or trustees appointed by the Company
pursuant to Paragraph XVI.
36. "Wages" mean the regular base pay for straight-time hours, including
holiday pay, vacation pay (including the related excused absence allowance),
incentive pay, bereavement pay, jury duty pay and short-term military duty pay
and the straight-time portion of any overtime hours paid, up to a total of 40
hours in a week, to which an Employee of a Participating Company is entitled
prior to giving effect to any Tax-Efficient Savings Agreement. "Wages" does
not include any other category of compensation (e.g., overtime premium pay,
Saturday and Sunday premium pay, holiday premium pay, cost-of-living allowance,
call-in pay, shift premium pay, seven-day premium pay, grievance awards, moving
allowances, supplemental unemployment benefit payments under the Company's
Supplemental Unemployment Benefit Plan (including automatic short-week benefit
payments), suggestion awards, tool allowances, apprentice training incentives,
the cost to the Participating Company of providing Group Life and Survivor
Income Benefit coverages in excess of $50,000 (or any other imputed income as
may be designated by law), pension or retirement plan payments, or any other
special remuneration.
II. ELIGIBILITY.
1. Except as hereinafter provided, each Employee of a Participating
Company shall be eligible for membership in, and to have Tax-Efficient Savings
Contributions made, to the Plan if the Employee satisfies at least one of
following:
(a) The Employee has attained seniority with one or more of the
Participating Companies, or an Affiliate, or with a participating company
or an affiliate thereof as those terms are defined under the Ford-TESPHE.
(b) The Employee shall have completed at least a one-year period of
service, as defined under Paragraph VI.2(a). If the Employee has a
period of severance, as defined at Paragraph VI.2(e), of at least one year
before the Employee has completed a one-year period of service, the
Employee must again satisfy the one-year period of service requirement
based upon the Employee's reemployment commencement date.
(c) The Employee is reemployed after a period of severance, if the
Employee previously had become eligible under clause (a) or (b).
(d) The Employee shall have attained eligibility under the Plan as of
the end of January 1995, prior to the amendment and restatement of the
Plan effective as of February 1, 1995.
The Company may in its discretion determine, in the event of the
acquisition by a Participating Company or Affiliated
-8-
<PAGE> 9
Corporation (by purchase, merger or otherwise) of all or part of the assets of
another corporation, that the service of a person as an employee of the other
corporation shall be included in ascertaining whether he or she has had the
service as required under clause (a), (b) or (c) above for eligibility,
provided that he or she shall have become an Employee in connection with the
acquisition.
2. Notwithstanding an Employee's eligibility for membership in, and to
have Tax-Efficient Savings Contributions made to, the Plan, an Employee shall
be eligible for Company Matching Contributions only if the Employee shall have
satisfied the conditions of Subparagraph 1(b). If an Employee is reemployed
after a period of severance, the Employee immediately shall be eligible for
Company Matching Contributions if the Employee had become eligible for Company
Matching Contributions due to satisfaction of clause (b) prior to the period of
severance.
III. MEMBERSHIP.
Membership of any Employee in the Plan shall be entirely voluntary. An
eligible Employee may elect membership in the Plan (a) prior to October 1,
1996, (1) as of the first pay period commencing in any month, or (2) as of the
date of the Employee's first quarterly Profit Sharing Distribution made with
respect to a plan year (as defined in the Profit Sharing Plan), and (b) on and
after October 1, 1996, as of the first day of any pay period (1) with respect
to Tax-Efficient Savings Contributions by electing to the Committee or its
delegate on such day as the Committee from time to time may determine (but
prior to the first day of such pay period) to participate and a Tax-Efficient
Savings Agreement in accordance with Paragraph IV hereunder (in the form
designated by the Committee), or (2) subject to procedures and in the form the
Committee may from time to time prescribe, as of the date of the Employees'
first Profit Sharing Distribution, by delivery to the Committee or its delegate
on such day as the Committee from time to time may determine (but prior to such
distribution) notice of election to participate and a Tax-Efficient Savings
Agreement in accordance with Paragraph IV hereunder.
Any person who shall have automatically become a Member of this Plan on
April 1, 1991, through transfer of his or her tax-efficient savings account
under the Ford TESPHE, including any loan subaccount and related promissory
note, to this Plan.
A newly hired Employee of a Participating Company may elect membership in
the Plan prior to the date on which the Employee would otherwise become
eligible for membership in the Plan for the limited purposes of making a
rollover contribution to the Plan as hereinafter provided.
-9-
<PAGE> 10
IV. TAX-EFFICIENT SAVINGS CONTRIBUTIONS AND COMPANY MATCHING CONTRIBUTIONS.
1. Tax-Efficient Savings Contributions.
Each eligible Employee, by electing with the Company to enter into a Tax
Efficient Savings Agreement in such form and manner as the Committee may
prescribe, may elect to have contributed to the Plan on his or her behalf:
(a) For each pay period, beginning prior to October 1, 1996, with the
first day of the first pay period commencing in the first month following
the filing of the agreement on or before the 23rd day (or a different day as
the Committee from time to time may determine) of the month preceding that
day, and on and after October 1, 1996, as of the first day of any pay period
following the filing of the agreement on such day as the Committee may
determine (but prior to the first day of such pay period), a Tax-Efficient
Savings Contribution in an amount as he or she may authorize at a rate of
not less than one percent nor more than 18 percent (15 percent prior to
January 1, 1997) of his or her Wages for the pay period.
(b) For each Profit Sharing Distribution (as defined in the Profit
Sharing Plan), following the filing of the agreement in accordance with
limitations on the timing and frequency of the filing as the Committee from
time to time may determine, a Tax-Efficient Savings Contribution in an
amount as he or she may authorize at a rate of not less than ten percent nor
more than 100 percent, in multiples of ten percent (five percent increments
on and after October 1, 1996), of each Profit Sharing Distribution; and
The Tax-Efficient Savings Agreement shall specify that Tax-Efficient
Savings Contributions are to be made in a full percentage amount of Wages or
Profit Sharing Distributions, the amounts to be rounded down to the nearest
full dollar.
Subject to the foregoing provisions of this Subparagraph 1, the rate of
Tax-Efficient Savings Contributions with respect to Wages of an Employee may,
prior to October 1, 1996, be decreased, increased or stopped by him or her only
as of the first day of the first pay period commencing in any month by
delivering to the Company on or before the 23rd day (or a different day as the
Committee from time to time may determine) of the month preceding that date a
notice of the change, and on and after October 1, 1996, as of the first day of
the first payroll period (which is determined practical by the Committee)
following delivery to the Committee or its delegate of a notice of the change
on or before such day as the Committee may determine.
The Tax-Efficient Savings Contributions of an eligible Employee who
shall have made an election in accordance with (b) above may be terminated or
otherwise modified by him or her by
-10-
<PAGE> 11
delivering notice to the Company in accordance with limitations on the timing
and frequency of such filings as the Committee from time to time may determine.
Upon receipt of the notice as provided above, the termination shall be
effective as of the first day of the next following calendar quarter with
respect to subsequent Profit Sharing Distributions.
If an Employee shall become ineligible to have Tax-Efficient Savings
Contributions made to the Plan, his or her Tax-Efficient Savings Agreement(s)
shall terminate forthwith. If the Tax-Efficient Savings Agreement of an
Employee shall terminate for any reason, the Employee thereafter may, subject
to the eligibility provisions of the Plan, resume the making of Tax-Efficient
Savings Contributions to the Plan in accordance with the foregoing provisions
of this Subparagraph 1.
A Member who has received a hardship distribution pursuant to Paragraph
XII of this Plan shall not be permitted to elect to have Tax-Efficient Savings
Contributions made on his or her behalf for a 12-month period following the
date of receipt of the hardship distribution.
The Company shall contribute to the Plan (i) prior to October 1, 1996,
each month an amount equal to the aggregate of the amounts of Tax-Efficient
Savings Contributions to be contributed by the Company on behalf of Employees
pursuant to the elections of those Employees under Tax-Efficient Savings
Agreements with respect to that month, and (ii) on and after October 1, 1996,
within a reasonable time after each applicable pay period an amount equal to
the aggregate of the amounts of Tax-Efficient Savings Contributions to be
contributed by the Company on behalf of Employees pursuant to the elections of
those Employees under Tax-Efficient Savings Agreements with respect to that pay
period.
The total amount of Tax-Efficient Savings Contributions allowable under
Tax-Efficient Savings Agreements for any Employee for any calendar year shall
not exceed the lesser of $9,240, as adjusted after 1994 in accordance with Code
Section 402(g)(5) (subject to reduction, as provided below, for a Member who
has received a hardship withdrawal pursuant to Paragraph XII) or 18 percent (15
percent prior to January 1, 1997) of the Employee's Wages for that year plus
100 percent of the Profit Sharing Distributions payable to the Employee during
that year. In addition, the total amount of Tax-Efficient Savings
Contributions for any Plan Year for an Employee who is a Highly Compensated
Employees shall also be limited in accordance with Subparagraph 3 of this
Paragraph.
-11-
<PAGE> 12
2. Company Matching Contributions.
Except as may be hereinafter provided, a Company Matching contribution
will be made to the Plan (a) prior to October 1, 1996 for each month an amount
equal to a percentage, as hereinafter provided, of the aggregate of the amount
of Employee Tax-Efficient Savings Contributions (but excluding any Profit
Sharing Plan or rollover contributions) made for the month on behalf of those
Members eligible for Company Matching Contributions under Subparagraph 2 of
Paragraph II, and (b) on and after October 1, 1996, for a pay period an amount
equal to a percentage, as hereinafter provided, of the aggregate of the amount
of Employee tax-Efficient Savings Contributions and excluding any profit
sharing plan or rollover contributions made for such pay period. For each pay
period beginning in a month in a Quarterly Contribution Period, the Company's
contribution percentage shall be as determined by Profits as a percent of Sales
for the Applicable Quarterly Determination Period for such Quarterly
Contribution Period in accordance with the following table:
<TABLE>
<S> <C>
If Profits as a
percent of Sales for The percentage to be used for
the Applicable Quarterly each month in the Quarterly
Determination Period Contribution Period shall be
------------------------- -----------------------------------
Do not exceed 2.3 percent 0 percent
Exceed 2.3 percent but
do not exceed 4.6 percent 25 percent
Exceed 4.6 percent but
do not exceed 6.9 percent 50 percent
Exceed 6.9 percent but
do not exceed 9.2 percent 75 percent
Exceed 9.2 percent 100 percent
</TABLE>
Provided, however, that for purposes of this Subparagraph 2, any portion of the
aggregate of an Employee's Tax-Efficient Savings Contributions that exceeds 5%
of the Employee's Wages shall not be taken into account.
The total amount of Company Matching Contributions for any year for an
Employee who is a Highly Compensated Employee shall also be limited in
accordance with Subparagraph 3 of this Paragraph.
If the Internal Revenue Service determines with respect to the Plan's
initial qualification that the trust fund does not constitute an exempt trust,
or refuses, in writing, to issue a determination as to whether the trust fund
is an exempt trust, the
-12-
<PAGE> 13
Company's Matching Contributions made to the Plan on or after the date on which
the determination or refusal is applicable shall be returned to the Company
without interest within one year of the determination or refusal, provided the
application for the determination is made by the time prescribed by law for
filing the Company's return for the taxable year in which the plan was adopted,
or such later date as the Secretary of the Treasury may prescribe. If all or
part of the Company's deductions under Code Section 404 for Company Matching
Contributions to the Plan are disallowed by the Internal Revenue Service, the
portion of the contributions to which the disallowance applies shall be
returned without interest within one year of the disallowance. The Company or
Participating Company may recover, without interest, the amount of its
contributions to the Plan made on account of a mistake in fact, provided that
the recovery is made within one year after the date of the contribution. Any
recovery of contributions to the Plan shall not exceed the value at the time of
recovery of assets acquired with the Company's contributions and with earnings
thereon.
3. Limitation on Tax-Efficient Savings Contributions and Company Matching
Contributions.
(a) Effective on and after February 1, 1995 the Tax-Efficient Savings
Contribution Percentage and the Company Matching Contribution Percentage for
any eligible Employee who is a Highly Compensated Employee for the year
shall be limited to the extent required under the following tables:
TAX-EFFICIENT SAVINGS CONTRIBUTION PERCENTAGE LIMITATION
<TABLE>
If the Average
Tax-Efficient Savings The allowable Average
Contribution Percentage Tax-Efficient Savings
of eligible Employees Contribution Percentage
who are not Highly
for eligible Employees who are
Compensated Employees Highly Compensated Employees
for the year is: shall not exceed:
----------------------------- ----------------------------
<S> <C>
(i) 2% or less (i) 2.0 multiplied by the Average
Tax-Efficient Savings Contribution Percentage
for eligible Employees who are not Highly
Compensated Employees.
</TABLE>
-13-
<PAGE> 14
<TABLE>
<S> <C>
(ii) over 2% but not (ii) 2.0 percentage points
added to
more than 8% the Average Tax-Efficient Savings Contribution
Percentage for eligible Employees who are not
Highly Compensated Employees.
(iii) more than 8% (iii) 1.25 multiplied by the Average Tax-Efficient
Savings Contribution Percentage for eligible
Employees who are not Highly Compensated
Employees.
</TABLE>
or, in any case, a lesser amount as provided by Treasury Regulation
1.401(m)-2, which is hereby incorporated by reference, to prevent the
multiple use of parts (i) or (ii) of this limitation with respect to any
Highly Compensated Employee.
COMPANY MATCHING CONTRIBUTION PERCENTAGE LIMITATION
<TABLE>
<S> <C>
If the Average
Company Matching The allowable Average
Contribution Percentage Company Matching
of eligible Employees Contribution Percentage for
who are not Highly eligible Employees who are
Compensated Employees Highly Compensated
for the year is: shall not exceed:
- -----------------------------------------------------------------------------------
(i) 2% or less (i) 2.0 multiplied by the
Average Company
Matching Contribution
Percentage for
eligible Employees
who are not Highly
Compensated
Employees.
(ii) over 2% but not (ii) 2.0 percentage points
added to
more than 8% the Average Company
Matching Contribution
Percentage for eligible
</TABLE>
-14-
<PAGE> 15
<TABLE>
<S> <C>
Employees who are not
Highly Compensated
Employees.
(iii) more than 8% (iii) 1.25 multiplied by
the Average Company
Matching Contribution
Percentage for
eligible Employees
who are not Highly
Compensated
Employees.
</TABLE>
or, in any case, a lesser amount as provided by Treasury Regulation Section
1.401(m)-2, which is hereby incorporated by reference, to prevent the
multiple use of parts (i) or (ii) of this limitation with respect to any
Highly Compensated Employee.
The Committee shall, to the extent necessary to conform to the
foregoing limitations, reduce the amounts of allowable Tax-Efficient Savings
Contributions for the year with respect to any or all eligible Employees.
Any such reductions by the Committee shall be done in the manner as the
Committee from time to time may prescribe.
(b) A Member who has received a hardship withdrawal pursuant to
Paragraph XII shall not be permitted to elect to have Tax-Efficient Savings
Contributions made on his or her behalf for the taxable year immediately
following the taxable year of the hardship distribution in excess of the
$9,240 limit (as adjusted annually after 1994 in accordance with Code
Section 402(g)(5)) for that year less the amount of that Member's
Tax-Efficient Savings Contributions for the taxable year of the hardship
distribution.
4. Return of Tax-Efficient Savings, and Company Matching Contributions in
Excess of Limitations.
(a) A Member's Tax-Efficient Savings Contributions and similar
contributions (as defined in Code Section 402(g)(3)) cumulatively may not
exceed, in any calendar year, $9,240 (as adjusted annually after 1994 in
accordance with Code Section 402(g)(5)). A Member shall not be permitted to
make such contributions to this Plan or any other plan of a Participating
Company or Affiliate in excess of that limit. Subject to regulations as the
Committee from time to time may prescribe, a Member whose contributions to
this Plan, another plan of a Participating Company and any other plan,
including a plan of an employer which is unrelated to a Participating
Company, in the aggregate exceeds that limit may request and receive the
return of any excess Tax-Efficient Savings
-15-
<PAGE> 16
Contributions made to this Plan for that year and earnings thereon by
submitting a request for return of the excess in this Plan to the Committee
in a form as shall be acceptable to the Committee. The amounts shall be
returned to the Member no later than April 15 of the following year to
Members who submit the requests to the Committee no later than the
immediately preceding March 1. A return of excess Tax-Efficient
Contributions under this clause shall include income and gains and losses
allocable thereto. The amount of a corrective distribution pursuant to this
clause (a), excluding allocable income and gains and losses, for a taxable
year may not exceed the Member's Tax-Efficient Contributions under the Plan
for that taxable year. Any distribution to a Member under this clause on or
before the last day of the Member's taxable year shall satisfy each of the
following conditions: (i) the Member shall have designated the distribution
as being excess Tax-Efficient Contributions, (ii) the distribution must be
made after the date on which the Plan received the excess Tax-Efficient
Contributions, and (iii) the Plan shall designate the distribution as a
distribution of excess Tax-Efficient Contributions.
(b) In the event that the Average Tax-Efficient Savings Contribution
Percentage for the Highly Compensated Employee group does not satisfy the
applicable test in Subparagraph 3 above, the Committee shall adjust excess
Tax-Efficient Savings Contributions as set forth below or in another manner
as shall satisfy the requirements of the Secretary of the Treasury pursuant
to the Code:
(i) On or before the fifteenth day of the third month following
the end of each Plan Year, the Highly Compensated Employee having the
highest Tax-Efficient Savings Contribution Percentage shall have his
or her portion of the excess Tax-Efficient Savings Contributions
distributed to him or her until either the applicable allowable
Average Tax-Efficient Savings Contribution Percentage test set forth
in Subparagraph 3 above is met or until that Highly Compensated
Employee's Tax-Efficient Savings Contribution Percentage equals the
Tax-Efficient Savings Contribution Percentage of the next highest
Highly Compensated Employee. If, after the distribution set forth in
the prior sentence, the applicable Average Tax-Efficient Savings
Contribution Percentage test is still not met, then the aforementioned
two Highly Compensated Employees shall have distributed to them the
portions of their excess Tax-Efficient Savings Contributions as are
necessary either to meet the applicable allowable Average
Tax-Efficient Savings Contribution Percentage test or until the Highly
Compensated Employees' Tax-Efficient Savings Contribution Percentages
equal the Tax-Efficient Savings Contribution Percentage of the next
highest Highly
-16-
<PAGE> 17
Compensated Employee. The procedures described in the prior two
sentences shall be repeated until the applicable allowable Average
Tax-Efficient Savings Contribution Percentage test is met. In
determining the amount of excess Tax-Efficient Savings Contributions to
be distributed with respect to an affected Highly Compensated Employee
as determined herein, the amounts shall be reduced by any excess
Tax-Efficient Savings Contributions previously distributed to the
affected Highly Compensated Employee for his or her taxable year ending
with or within that Plan Year.
(ii) The distribution of excess Tax-Efficient Savings
Contributions shall be accompanied by a pro rata share of the income
thereon determined as provided by Regulations under Code Section
401(k).
(iii) The distribution shall be designated by the Company as a
distribution of excess Tax-Efficient Savings Contributions and income.
(iv) Any distribution of Tax-Efficient Savings Contributions
under this clause will also be effective for purposes of determining
the amount of Company Matching Contributions to be made on behalf of
the affected Employee.
(v) The determination and correction of excess Tax-Efficient
Savings Contributions of a Highly Compensated Employee whose
Tax-Efficient Savings Contribution Percentage is determined under the
family aggregation rules described herein shall be accomplished by
reducing the Tax-Efficient Savings Contribution Percentage as required
and the excess Tax-Efficient Savings Contributions for the family unit
shall be allocated among the family members in proportion to the
Tax-Efficient Savings Contributions of each family member that were
combined to determine the group Tax-Efficient Savings Contribution
Percentage.
(c) In the event that the Average Company Matching Contribution
Percentage for the Highly Compensated Employee group does not satisfy the
applicable test in Subparagraph 3 of this Paragraph, the Committee shall
adjust excess Company Matching Contributions as set forth below or in
another manner as shall satisfy the requirements of the Secretary of the
Treasury pursuant to the Code:
(i) On or before the fifteenth day of the third month following
the end of each Plan Year, the Highly Compensated Employee having the
highest Company Matching Contribution Percentage shall have his or her
portion of excess Company Matching Contributions forfeited, until
either the applicable allowable Average Company Matching
-17-
<PAGE> 18
Contribution Percentage test set forth in Subparagraph 3 of this
Paragraph is met or until that Highly Compensated Employee's Company
Matching Contribution Percentage equals the Company Matching
Contribution Percentage of the next highest Highly Compensated
Employee. If, after the forfeiture set forth in the prior sentence,
the applicable allowable Average Company Matching Contribution
Percentage test is still not met, then the aforementioned two Highly
Compensated Employees shall have the portions of their excess Company
Matching Contributions forfeited as are necessary either to meet the
applicable allowable Average Company Matching Contribution Percentage
test or until the Highly Compensated Employees' Company Matching
Contribution Percentages equal the Company Matching Contribution
Percentage of the next highest Highly Compensated Employee. The
procedures described in the prior two sentences shall be repeated until
the applicable allowable Average Company Matching Contribution
Percentage tests is met. In determining the amount of excess Company
Matching Contributions to be forfeited with respect to an affected
Highly Compensated Employee as determined herein, the amounts shall be
reduced by any excess Company Matching Contributions previously
forfeited by the affected Highly Compensated Employee for his or her
taxable year ending with or within that Plan Year.
(ii) Forfeitures of excess Company Matching Contributions shall
be treated in accordance with Paragraph XXVI; however, no
such forfeiture may be allocated to a Highly Compensated Employee
whose contributions are reduced pursuant to this Clause.
(iii) The forfeiture of Company Matching Contributions shall be
accompanied by a pro rata share of the income thereon determined as
provided by Regulations under Code Section 401(m).
(iv) Excess Company Matching Contributions forfeited under this
clause shall continue to be treated as Company contributions for
purposes of Code Sections 404 and 415 following the forfeiture.
(v) The determination and correction of excess Company Matching
Contributions of a Highly Compensated Employee whose Company Matching
Contribution Percentage is determined under the family aggregation
rules described herein shall be accomplished by reducing the Company
Matching Contribution Percentage as required and the excess Company
Matching Contributions for the family unit shall be allocated among
the family members in proportion to the Company Matching Contributions
of each
-18-
<PAGE> 19
family member that were combined to determine the group Company
Matching Contribution Percentage.
(d) The Tax-Efficient Savings Contribution Percentage or Company
Matching Contribution Percentage for any eligible Employee who is a Highly
Compensated Employee for the year and who is eligible to have Tax-Efficient
Savings Contributions allocated to his or her account under two or more
plans described in Code Section 401(a) or arrangements described in Code
Section 401(k) that are maintained by the Company or an Affiliate shall be
determined as if all those contributions were made under a single plan.
(e) Effective on and after February 1, 1995, in the event that this
Plan satisfies the requirements of Sections 401(k), 401(m), 401(a)(4) or
410(b) of the Code only if aggregated with one or more other Plans, or if
one or more other Plans satisfy the requirements of such section of the Code
only if aggregated with this Plan, then this section shall be applied by
determining the Company Matching Contribution Percentage or Tax-Efficient
Savings Contribution Percentage, as applicable, of employees as if all such
plans were a single plan; provided, Plans may be aggregated in order to
satisfy Section 401(k) or 401(m) of the Code only if they have the same Plan
Year.
5. Rollover Contributions.
An Employee of a Participating Company may make a rollover contribution,
in an amount and form as permitted under Code Section 402 and qualifying as an
eligible rollover distribution transferred in a direct rollover to this Plan by
another qualified plan or as an amount received by an Employee from another
qualified plan transferred by the Employee to this Plan within 60 days
following receipt thereof, to the Plan in any event provided such transferring
plan is a plan qualifying under Code Section 401(a) and maintained by his or
her immediately preceding former employer and provided the rollover
contribution does not jeopardize the tax-exempt status of the Plan and Trust or
create adverse tax consequences for the Company. Rollover
contributions shall be fully vested and invested in accordance with the
provisions of Paragraph VII as the Employee shall elect.
V. MEMBER'S ACCOUNT IN TRUST FUND.
Prior to October 1, 1996, at such times as the Trustee shall require in
connection with the Trustee's purchases of Rouge Stock or Ford Stock pursuant
to Paragraph XVII, but not later than 30 days after the last day of each month,
the Company shall pay to the Trustee (a) the Tax-Efficient Savings
Contributions for that month, (b) the Company Matching Contributions for that
month less any amount then to be applied to reduce Company Matching
Contributions pursuant to Paragraph XXVI, and (c) the amounts of payments by
Members with respect to loans and interest thereon
-19-
<PAGE> 20
pursuant to Paragraph XI, and on and after October 1, 1996, the Company shall
pay to the Trustee, as soon as practicable following the respective pay period
(a) the Tax-Efficient Savings Contributions, and (b) the Company Matching
contributions for that period less any amount then to be applied to reduce
Company matching Contributions pursuant to Paragraphs XXVI and (c) the amounts
of payments by Members with respect to loans and interest thereon pursuant to
Paragraph XI.; provided, however, that Tax-Efficient Savings Contributions and
loan and interest payments to be invested in specific assets, specific funds or
other investments permitted under the Plan other than investments in Rouge Stock
or Ford Stock shall be paid to the Trustee (i) prior to October 1, 1996 on or as
soon as practicable after the last day of the applicable month, and (ii) on and
after October 1, 1996 as soon as practicable after the applicable pay period.
Upon receipt of those payments by the Trustee, the aggregate amount of the
payments (and earnings thereon, as from time to time received by the Trustee)
together with any rollover contributions shall be credited to the respective
accounts of the Members, and the Trustee shall hold, invest and dispose of the
same as provided in the Plan. A Member shall not have any interest or right in,
or power over, Company Matching Contributions or earnings thereon, whether or
not credited to his or her account, except as provided in the Plan.
VI. VESTING.
1. A Member shall be fully vested in the amount credited to the Member's
Tax-Efficient Savings account and no portion thereof shall be subject to
forfeiture for any reason whatsoever.
2. Except as provided in this or the following Subparagraph, a Member
shall have no vested interest in any amount credited to the Member's Company
Matching Contributions Account. Upon a Member's completion of a four-year
period of service, determined as hereafter provided in this Subparagraph, or
the Member's reaching age 65, if earlier, the amount credited to the Member's
Company Matching Contributions Account shall be fully vested and no portion
thereof shall be subject to forfeiture for any reason whatsoever.
(a) A Member shall be credited with a one-year period of service for
each anniversary following the Member's initial employment commencement
date until the Member has a severance from service date. The employment
commencement date is the date on which the Employee first performs an hour
of service, with one or more of the following: a Participating Company or
an Affiliated Corporation. The severance from service date is the
earlier of (i) the date the Employee quits, retires, is discharged or dies,
or (ii) the first anniversary of the first date of a period in which an
Employee remains absent from service (with or without pay) or, if later,
the date upon which an Employee ceases seniority following an absence from
service, with a
-20-
<PAGE> 21
Participating Company or an Affiliated Corporation for any reason other
than quit, retirement, discharge or death, such as vacation, holiday,
sickness, disability, leave of absence or layoff.
(b) For purposes of clause (a) above, an hour of service means: (i) an
hour for which a Member is directly or indirectly compensated or entitled to
compensation from the Company for the performance of duties as an employee,
(ii) an hour for which a Member is directly or indirectly compensated or
entitled to compensation from the Company as an Employee (irrespective of
whether the employment relationship has terminated) for reasons other than
performance of duties as in the case of layoff, release-continued disability
after expiration of medical leave of absence or medical, maternity, adoption
or personal leave of absence (excluding educational and public office leave
of absence), and (iii) an hour for which back pay is awarded by the Company.
(c) Periods of service for an Employee who shall have nonsuccessive
periods of service must be aggregated so that 365 days of service shall
equal a whole year period of service.
(d) If an Employee severs from service by reason of quit, discharge or
retirement and the employee then performs an hour of service within 12
months of the severance from service date, the period of severance shall be
counted as a period of service.
If an Employee severs from service by reason of quit, discharge or
retirement during an absence from service of 12 months or less for any
reason other than a quit, discharge, retirement or death, and then performs
an hour of service within 12 months of the date on which the employee was
first absent from service, the period of severance shall be counted as a
period of service.
(e) For purposes of this Paragraph, an Employee shall incur a one-year
period of severance on the first anniversary following the Employee's
severance from service date if the Employee did not complete any hour of
service following the severance from service. Notwithstanding 2(a)(ii) of
this Paragraph, an Employee who is absent from service beyond the first
anniversary of the first date of absence by reason of maternity or paternity
absence shall incur a severance from service date only upon the second
anniversary of the first date of the absence. The period between the first
and the second anniversaries of the first date of absence from work is
neither a period of service nor a period of severance.
An Employee shall incur a Plan break-in-service after five
consecutive one-year periods of severance. If a former Member incurs a Plan
break-in-service, and later
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returns to employment with the Company or an Affiliate, his or her years
of periods of service as of the date he or she ceased to be an Employee in
connection with the break-in-service shall be disregarded in
determining his or her years of service for vesting purposes.
Once a person shall have qualified under this Subparagraph 2 for full
vesting in his or her Company Matching Contributions Account, the person
shall not thereafter for any reason whatsoever be subject to loss or
forfeiture of his or her right to full vesting. Any such person who
terminates employment or ceases to be a Member while in employment, upon
becoming a Member following a later return to employment or upon resuming
membership, shall automatically qualify for immediate full vesting in his
or her Company Matching Contributions Account.
3. Notwithstanding Subparagraph 2 of this Paragraph, a Member's years of
service for purposes of this Subparagraph shall include, determined through
application of the preceding clauses of Subparagraph 2, the Member's periods of
service with (i) a participating company, or a subsidiary or affiliate thereof,
under the Ford-TESPHE for years before January 1, 1990, and (ii) an Affiliate.
VII. MEMBER'S ELECTION AS TO INVESTMENT OF FUNDS.
Subject to the restrictions provided under this Paragraph, the Committee
in its sole discretion, may determine from time to time the specific assets,
specific funds or other investments that shall be permitted for the investment
of contributions under the Plan. Included under this Committee power is the
right to add to, delete from, or substitute for, specific assets, specific
funds or other investments that are then currently permitted for investment of
contributions under the Plan, except that the Committee may not delete the
Rouge Stock investment which is a power exercisable only by the Board of
Directors of the Company or to another party as the Board may delegate.
1. A Member's Tax-Efficient Savings Contributions or rollover contribution
each shall be invested in one of the following ways as the Member shall elect
with respect to each:
(a) 100 percent in Rouge Stock, or any other specific assets, specific
funds or other permitted investments under the Plan; or
(b) Any combination of Rouge Stock, or any other specific assets,
specific funds or other permitted investments, in whole percentage multiples
as the Committee shall determine from time to time.
A Member's initial investment election for Tax-Efficient Savings
Contributions with respect to Wages shall be stated in his
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or her Tax-Efficient Savings Agreement. Each initial investment election shall
remain in effect until changed by the Member, and prior to October 1, 1996 may
be changed effective the first day of the first pay period commencing in
respect of Tax-Efficient Savings Contributions made thereafter by delivering a
notice to the Company on or before the 23rd day (or a different day as
the Committee from time to time may determine) of the preceding month; and on
and after October 1, 1996 may be changed by a Member in accordance with
procedures as the Committee may from time to time prescribe.
Each investment election stated in a Tax-Efficient Savings Agreement filed
with respect to the Member's Profit Sharing Distributions (as
defined in the Profit Sharing Plan) shall remain in effect for all such
subsequent distributions, except as each such election may be changed, in
respect of subsequent Profit Sharing Distributions, by the Member by delivering
a notice to the Committee or its delegate. Each investment election stated in
a Member's election to have quarterly profit sharing amounts that would
otherwise be distributed directly to the Member contributed to the Plan as
Tax-Efficient Savings Contributions shall remain in effect for all subsequent
profit sharing amounts (as defined in the Profit Sharing Plan) except as the
investment election may be changed by the Member in accordance with procedures,
including limitations on permissible frequency of such changes, as the
Committee from time to time may prescribe.
A Member's Company Matching Contributions initially shall be invested in
Rouge Stock.
VIII. TRANSFER OF ASSETS.
Subject to the restrictions provided under this Paragraph, a Member may
elect, at such times, in the manner, and to the extent as the Committee from
time to time may determine, to have all or a portion of the amount in the
Member's Tax-Efficient Savings Account, or Company Matching Contributions
Account invested other than as Tax-Efficient Savings Contributions, Company
Matching Contributions or rollover contributions are invested pursuant to
Paragraph VII.
1. A Member may not transfer amounts in his or her Company Matching
Contributions Account that shall not have vested.
2. During the two Plan Years immediately following the year for which
Company Matching Contributions are made, a Member, except for a Member who has
terminated employment after his or her Company Matching Contributions Account
has fully vested pursuant to Paragraph VI, may not transfer amounts in his or
her Company Matching Contributions Account that shall have vested but are
attributable to those contributions.
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3. All transfer elections shall be subject to any other procedures or
restrictions the Committee may adopt, including, among other things,
application procedures, minimum and maximum amounts that may be transferred,
procedures for determining the value of assets the subject of a transfer
election and other matters which may include conditions or restrictions
applicable to transfer elections.
IX. INVESTMENT OF DIVIDENDS, INTEREST, ETC.
Subject to the restrictions provided under this Paragraph, the Committee
from time to time may determine the manner and the extent of the investment of
cash dividends and the cash proceeds of any other distribution in respect of
specific assets, specific funds or other investments that shall be permitted
for the investment of contributions under the Plan.
1. Cash dividends and the cash proceeds of any other distribution received
on Rouge Stock shall be invested in Rouge Stock.
X. DISTRIBUTION OF ASSETS.
Except as otherwise provided in Paragraphs XI and XII, distribution of all
assets in a Member's accounts shall be governed by the following provisions.
1. Termination of Employment
In the case of a Member's termination of employment for any reason
(whether voluntary or by discharge, with or without cause), the amounts in the
Member's Tax-Efficient Savings Account, and the portion, if any, of the
Member's Company Matching Contributions Account which shall have vested
pursuant to Paragraph VI, shall be delivered to the Member as soon as
practicable after the earlier of
(a) receipt by the Company of a request for distribution made by the
Member at or after termination of employment, or
(b) the end of the year in which the Member attains age sixty-five (65)
or the date on which the Member attains age 70 if the Member shall have
so elected, or, if later, the date the Member's employment terminates;
provided, however, that in the case of a Member who has attained age
sixty-five (65), distribution shall be made no later than the 60th day
after the later of the close of the year in which the Member attains age
sixty-five (65) or terminates employment, unless the Member elects
otherwise. In the event of death of the Member, distribution shall be made
to the Member's beneficiaries hereunder as soon as practicable after notice
of the Member's death is received by the Company.
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2. Attainment of Age 70-1/2
In the case of a Member who has attained age seventy and one-half
(70-1/2) and who has not terminated employment, distribution of the amounts in
the Member's accounts shall begin not later than April 1 of the calendar year
following the calendar year in which the Member attains age seventy and one-half
(70-1/2) and shall be made over a period of fifteen (15) years; upon termination
of the Member's employment, the assets remaining in the Member's account shall
be distributed. Effective on and after February 1, 1995, the distribution shall
be made in accordance with Code Section 401(a)(9) and regulations prescribed by
the Secretary of the Treasury and subject to regulations as the Committee may
adopt.
3. Miscellaneous
For purposes of any distribution of assets in a Member's Tax-Efficient
Savings Account pursuant to Subparagraph 1 of this Paragraph, the amount in his
or her Tax-Efficient Savings Account shall be reduced by the balance of any loan
made to the Member as provided in Paragraph XI and interest thereon that is
unpaid at the effective date of the distribution.
Subject to the provisions of Paragraph XVII, and subject to regulations
as the Committee from time to time may prescribe, a Member receiving a
distribution pursuant to this Paragraph X may agree to the sale for
purposes of the Plan of all full shares of Rouge Stock or Ford Stock covered by
his or her distribution, the sale to be at a price per share equal to the
Current Market Value of the stock on the effective date of the distribution.
The Member so agreeing shall pay all applicable transfer taxes incident to the
sale of the shares, and the amount thereof may be deducted from the payment
made by the Trustee to the Member.
Assets held for the benefit of an alternate payee pursuant to a
qualified domestic relations order as defined by Code Section 414(p) and ERISA
Section 206(d) shall be distributed prior to the date on which assets would be
distributed to a Member if the order so requires provided that the order
requires distribution in a single payment of all assets held for the benefit of
the alternate payee.
If a Member terminates employment with the Company or an Affiliate at a
time when any portion of the Member's Company Matching Contributions Account is
less than fully vested as determined under Paragraph VI, the unvested portion of
the amount in that account will remain credited to the Member's account until
the Member has incurred a Plan break-in-service, as determined under Paragraph
VI or until assets in the Member's accounts in which the Member is fully vested
shall have been distributed, whichever shall occur first. Upon a Plan
break-in-service or distribution, the unvested portion of the account shall be
forfeited by the Member. The amount of the forfeiture will be
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applied as provided in Subparagraph 1 of Paragraph XXVI.
If the Member or beneficiary to whom benefits are to be distributed
cannot be located, and reasonable efforts have been made to find him or her,
including the sending of notification by certified or registered mail to his or
her last known address, the Committee may direct the Trustee to distribute the
benefits in question to an interest bearing savings account established in the
name of the Member or beneficiary; or, if the benefits are payable to a Member,
the Committee may instruct the Trustee to distribute the funds to the Member by
purchasing U.S. Savings Bonds in the Member's name and holding them for the
Member.
4. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Section, a distributee may
elect, at the time and in the manner prescribed by the Committee, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
(a) An eligible rollover distribution is any distribution of all or any
portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any distribution that is
one of a series of substantially equal periodic payments (not less
frequently than annually) made for the life (or life expectancy) of the
distributee or the joint lives (or joint life expectancies) of the
distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent the
distribution is required under Code Section 401(a)(9); and the portion of
any distribution that is nor includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to
employer securities).
(b) An eligible retirement plan is an individual retirement account
described in Code Section 408(a), an individual retirement annuity
described in Code Section 408(b), an annuity plan described in Code Section
403(a), or a qualified trust described in Code Section 401(a), that accepts
the distributee's eligible rollover distribution. However, in the
case of an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or individual
retirement annuity.
(c) A distributee includes any Member (including any employee or former
employee with an account under the Plan). In addition, a Member's
surviving spouse and a Member's spouse or former spouse who is the
alternate payee under a qualified domestic relations order, as defined in
Code Section 414(p), are distributees with regard to the interest of
the spouse or former spouse.
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(d) A direct rollover is a payment by the plan to the eligible
retirement plan specified by the distributee.
5. If a distribution is one to which Code Sections 401(a)(11) and 417 do
not apply, the distribution may commence less than 30 days after the notice
required under Treasury Regulation Section 1.411(a)-11(c) is given, provided
that: (1) the Committee clearly informs the Member that the Member has a right
to a period of at least 30 days after receiving the notice to consider the
decision of whether or not to elect a distribution (and, if applicable, a
particular distribution option), and (2) the Member after receiving the notice,
affirmatively elects a distribution.
XI. BORROWINGS WITH RESPECT TO ASSETS ATTRIBUTABLE TO TAX-EFFICIENT SAVINGS
CONTRIBUTIONS.
Subject to the requirements of this Paragraph XI and to regulations as the
Committee from time to time may prescribe, a Member prior to termination of
employment may apply for and receive a loan from the Plan. All the
requirements shall be applicable on a uniform and non-discriminatory basis to
all Members who apply for loans.
1. All loans shall (a) be available to all Members on a reasonably
equivalent basis, (b) be adequately secured, and (c) bear a reasonable rate of
interest.
2. A loan shall not exceed the lesser of:
(a) the amount, at the time of the loan, of the Member's Tax-Efficient
Savings Account (subject to any reduction provided under Subparagraph 3 of
this Paragraph),
(b) fifty percent of the value, at the time of the loan, of the amount
in the Member's Tax-Efficient Savings Account, and the portion, if any, of
the Member's Company Matching Contributions Account which shall have vested
pursuant to Paragraph VI, or
(c) $50,000 reduced by the highest balance of any loans from this Plan
or any other plan maintained by the Company outstanding to the
Member during the 12-month period ending on the day before the date on
which the loan is made.
3. The Committee shall have the power to designate, from time to time, the
method by which the assets in a Member's Tax-Efficient Savings Account to be
used to provide the amount of the loan are determined or to otherwise restrict
the assets categories from which loans can be made.
4. The amount of a loan must be at least $1,000.
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5. The entire amount of the loan and all amounts of related interest must
be repaid (a) in substantially level amortization (with payments no less
frequently than quarterly) over a term not to exceed 60 months (or, when
permitted by law, in another manner and over a longer term as the Committee may
determine) after the month in which the loan is effective, and (b) in full upon
commencement of distribution of a Member's Plan assets after separation from
service. Repayments shall be made by a Member from his or her wages by payroll
deductions or in another manner as the Committee may prescribe.
6. The Committee shall have the power to designate, from time to time, the
method by which the amounts paid by a Member, including interest payments, with
respect to a loan shall be invested.
7. The loan shall bear interest at a rate, determined by the Committee,
that provides the Plan with a return commensurate with the interest rates
charged by persons in the business of lending money for loans which would be
made under similar circumstances. The Committee shall not discriminate among
Members in determining the interest rate. Notwithstanding the foregoing, loans
granted at different times may bear different interest rates if, in the opinion
of the Committee, the difference in rates is justified by changes in general
economic conditions in the community.
8. In the event the borrowing Member fails to pay the entire amount of any
loan balance due after final demand for payment at the maturity date of the
loan, the loan will be declared in default and will be treated as a taxable
event for Federal income tax purposes, as provided in applicable law.
XII. WITHDRAWAL OF ASSETS.
1. Permissible Withdrawal of Assets Attributable to Tax-Efficient Savings
Contributions Prior to Termination of Employment.
Subject to the following provisions of this Subparagraph, prior to
termination of employment a Member shall not be permitted to withdraw all or any
portion of the amount in the Member's Tax-Efficient Savings Account.
(a) A Member shall be permitted to make a withdrawal from his or her
Tax-Efficient Savings Account (i) if the Committee determines that either
(A) the Member shall have attained age 59-1/2 or (B) the Member shall not
have attained age 59-1/2, but that there exists a financial hardship with
respect to the Member sufficient in any event under United States Treasury
Regulations in effect at that time to allow the amount to be withdrawn
without loss of qualification for the Plan under Code Section 401(k); and
(ii) following the withdrawal, the aggregate amount of all withdrawals by a
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Member on account of financial hardship do not exceed the sum of the
dollar amounts of Tax-Efficient Savings Contributions made to the account
of the Member and of earnings allocable thereto credited as of
December 31, 1988. Any withdrawal of assets shall be made as of the date
specified by the Committee in its determination of the existence of a
financial hardship. The assets so withdrawn shall be delivered to the
Member as soon as practicable after the effective date of the withdrawal.
(b) Withdrawals based on financial hardship under Subparagraph
1(a)(i)(B) of this Paragraph XII shall be subject to the provisions of this
Subparagraph 1(b). A financial hardship withdrawal must be made on account
of an immediate and heavy financial need of the Member as determined in
accordance with Subparagraph 1(b)(i) of this Paragraph XII and must be
necessary to satisfy the immediate and heavy financial need as determined
in accordance with Subparagraph 1(b)(ii) this Paragraph XII.
(i) The determination of whether an immediate and heavy financial
need exists shall be based on all relevant facts and circumstances. A
financial need shall not be disqualified because it was reasonably
foreseeable or voluntarily incurred. An immediate and heavy financial
need shall be deemed to exist if the distribution, among other causes,
is for:
(A) Medical expenses described in Code Section 213(d)
incurred (or necessary to obtain medical care) by the Member, a
Member's spouse or any other of dependents of the Member (as
defined in Code Section 152);
(B) The purchase (excluding mortgage payments) of a
principal residence for the Member;
(C) Funeral expenses for a member of the Member's family;
(D) Payment of tuition for the next twelve (12) months of
post-secondary education for the Member, or the Member's spouse,
children or dependents;
(E) The need to prevent the eviction of the Member from his
principal residence or foreclosure on the mortgage of the
Member's principal residence; or
(F) An expense of $500 or more is approved by the Committee
as constituting an immediate and heavy financial need of the
Member.
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(ii) The Committee shall determine, based upon the Member's
representation and other facts as are known to the Committee, that all
of the following conditions are satisfied:
(A) The distribution is not in excess of the amount for the
immediate and heavy financial need of the member; and
(B) The Member has obtained all distributions, other than
hardship distributions, and all nontaxable loans currently
available under all plans maintained by the Company.
(c) A Member who shall make a withdrawal pursuant to Subparagraph
1(a)(i)(B) of this Paragraph shall not be permitted to make Tax-Efficient
Savings Contributions for a 12-month period to any plan of the Company after
the effective date of the withdrawal.
(d) The annual limit on Tax-Efficient Savings Contributions in the
taxable year of enrollment following a withdrawal is reduced by the amount
of Tax-Efficient Savings Contributions made in the withdrawal year.
(e) If, during the two Plan Years immediately following the year for
which Company Matching Contributions are made in respect of a Member's
Tax-Efficient Savings Contributions, the Member shall withdraw, in
accordance with Subparagraph 1(a)(i)(A) of this Paragraph, assets from his
or her Tax-Efficient Savings Account that are attributable to such
Tax-Efficient Savings Contributions, the Member shall not be permitted to
make Tax-Efficient Savings Contributions for a 12-month period after the
effective date of the withdrawal.
(f) Prior to October 1, 1996, to the extent that any non-vested amount
in a Member's Company Matching Contributions Account shall have been
credited in respect of Tax-Efficient Savings Contributions which shall be
withdrawn by the Member pursuant to this Paragraph, that non-vested amount
shall be forfeited and shall be applied as provided in Subparagraph 1 of
Paragraph XXVI.
(g) Subject to the provisions of Paragraph XVII, and subject to
regulations as the Committee from time to time may prescribe, a Member
requesting a withdrawal may agree to the sale for purposes of the Plan of
all full shares of Rouge Stock or Ford Stock covered by his or her
withdrawal request, the sale to be at a price per share equal to the Current
Market Value of the stock on the effective date of the withdrawal. The
Member so agreeing shall pay all applicable transfer taxes incident to the
sale of the shares, and the amount thereof may be deducted from the payment
made by the Trustee to the Member.
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2. Permissible Withdrawal of Assets Attributable to Company Matching
Contributions Prior to Termination of Employment.
At any time or from time to time prior to termination of employment, a
Member may withdraw the portion of the amount in his or her Company Matching
Contributions Account that shall have vested pursuant to Paragraph VI, as the
Member shall designate in accordance with the following:
(a) Each withdrawal shall be made (i) prior to October 1, 1996,
effective as of the last day of a calendar month, or a different date as
specified by the Committee, from time to time, upon the Member's written
request delivered to the Company on or before the 23rd day (or a different
day as the Committee may from time to time determine) of the
month, and (ii) on and after October 1, 1996, effective as of the receipt by
the Trustee of the Member's written valid request for withdrawal. The
amount being withdrawn shall be delivered to the Member as soon as
practicable after the effective date of the withdrawal.
(b) Upon and in accordance with each request for withdrawal, there
shall be delivered to the Member the portion, if any, of his or her Company
Matching Contributions Account that (i) shall have vested pursuant to
Paragraph VI and (ii) is attributable to Tax-Efficient Savings Contributions
for years that are separated by two or more Plan Years from the year of
withdrawal.
(c) Subject to the provisions of Paragraph XVII, and subject to any
regulations the Committee shall from time to time prescribe, a Member
requesting withdrawal pursuant to this Paragraph may agree to the sale of
all full shares of Rouge Stock or Ford Stock covered by his or her
withdrawal request, the sale to be at a price per share equal to the Current
Market Value of the stock on the effective date of the withdrawal. The
Member so agreeing shall pay all applicable transfer taxes incident to the
sale of the shares to the Trustee and the amount thereof may be deducted
from the payment made by the Trustee to the Member.
XIII. DISTRIBUTION IN KIND.
Distributions pursuant to Paragraphs X or XII which are attributable to
amounts invested in Rouge Stock or Ford Stock shall be distributed in the form
of that stock unless the Member has agreed to sell the same pursuant to
Paragraphs X or XII and XVII. All other distribution amounts shall be in cash.
Rouge Stock held in the Plan and distributed from the Plan are subject to
applicable securities law limitations.
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XIV. MEMBER'S SEMIANNUAL STATEMENT.
As soon as practicable after June 30 and December 31 of each year, there
shall be furnished to each Member a statement as of June 30 and December 31 of
the year of the specific assets, specific funds and other investments permitted
under the Plan and in the Member's accounts as of the midyear and year-end
valuation dates, respectively. The Committee may determine, from time to time,
to cause other information, including price and valuation information, to be
included in the statements. The statements shall be deemed to have been
accepted by the Member and the Member's beneficiaries designated hereunder as
correct unless written notice to the contrary shall be received by the Company
within 30 days after the mailing of the statement to the Member. The Committee
may provide, from time to time, for additional statements to Members. The
Committee also may, after having previously increased the number of statements,
reduce the number of statements; but it may not terminate the statements as of
June 30 and December 31.
XV. NOTICES, ETC.
All notices, statements and other communications from the Trustee or a
Participating Company to an Employee, Member or designated beneficiary required
or permitted hereunder shall be deemed to have been duly given, furnished,
delivered or transmitted, as the case may be, when delivered to (or when mailed
by first-class mail, postage prepaid and addressed to) the Employee, Member or
beneficiary at his or her address last appearing on the books of such
Participating Company or, in the case of an Employee, delivered to the Employee
at his or her normal work station.
All notices, instructions and other communications from an Employee or
Member to the Company or Trustee required or permitted hereunder (including,
without limitation, authorizations, Tax-Efficient Savings Agreements and
terminations thereof, investment and other elections, requests for withdrawal
or loans and designations of beneficiaries and revocations and changes thereof)
shall be in the respective form from time to time prescribed therefor by the
Committee, shall be mailed by first-class mail or delivered to such location as
shall be specified in regulations or upon the forms or in the form prescribed
by the Committee and shall be deemed to have been duly given and delivered upon
receipt by the Company or Trustee in such form, as the case may be, at such
location.
From time to time as necessary to facilitate the administration of the
Plan and the trust created thereunder, the Company, the Trustee and the
Committee shall deliver to each other copies or consolidations of such notices,
instructions or other communications in respect of the Plan or such trust as it
may receive from Employees, Members or beneficiaries.
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XVI. TRUSTEE.
The Company shall appoint one or more individuals or corporations to act
as Trustee under the Plan, and at any time may remove the Trustee and appoint a
successor Trustee. The Company may, without reference to or action by any
Employee, Member or beneficiary or any other Participating Company, enter into
a Trust Agreement with the Trustee and from time to time enter into further
agreements with the Trustee or other parties, make amendments to the Trust
Agreement or further agreements and take other steps and execute other
instruments as the Company in its sole discretion may deem necessary or
desirable to carry the Plan into effect or to facilitate its administration.
The Trustee and the Company may by mutual agreement in writing arrange for
the delegation by the Trustee to the Committee of any of the functions of the
Trustee, except for the custody of assets, the voting of Rouge Stock and Ford
Stock held by the Trustee and the purchase and sale or redemption of
securities.
XVII. PURCHASES OF SECURITIES BY THE TRUSTEE.
Tax-Efficient Savings Contributions, Company Matching Contributions,
rollover contributions and earnings thereon in the accounts of Members shall be
invested by the Trustee as soon as practicable after receipt thereof by the
Trustee, subject to the following provisions of this Paragraph and as the
Committee may determine, from time to time, with respect to specific assets,
specific funds or other investments permitted under the Plan.
Any current cash balance in a Member's account or accounts after the
investing of contributions for the last month of a Plan Year shall be invested
pursuant to the Plan related Trust Agreement. At any time or from time to
time, the Committee may adopt regulations or practices as it may deem
appropriate with respect to the minimum fractional interest in a share of Rouge
Stock and in other designated specific assets, specific funds or other
investments permitted under the Plan in which the cash in a Member's account
shall be invested.
The shares of Rouge Stock from time to time required for purposes of the
Plan shall be purchased by the Trustee from a stock exchange or in any other
manner the Committee from time to time in its sole discretion may designate or
prescribe; provided, however, that prior to October 1, 1996, the Trustee at all
times may purchase such shares from Members who have agreed to sell the same to
the Trustee pursuant to the provisions of Paragraphs X and XII; and provided,
further, that the Trustee at all times may use for purposes of the Plan the
shares which are removed from a Member's account pursuant to the Member's
election to have an amount equal to the value of such shares transferred
pursuant to Paragraph VIII, and the Trustee shall treat those shares as having
been purchased by it at a price equal to that amount; and provided, further,
that except as required by any such designation
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by the Committee, such shares shall be purchased by the Trustee from any source
and in any manner as the Trustee from time to time in its sole discretion may
determine. Any shares so purchased from the Company or Rouge Industries, Inc.
may be either treasury stock or newly issued stock, and if so shall be purchased
at a price per share equal to the average of the highest price and the lowest
price at which shares of Rouge Stock are sold on the date preceding the date of
purchase or, if no sales were made on that date, on the next preceding day on
which there were sales, in either case as reported in the Composite Quotation
Listing. All funds in the accounts of the several Members that become available
simultaneously for investment in Rouge Stock may be invested simultaneously or
over a period of time, but funds that become available first shall be invested
first. If the funds that become available simultaneously for investment are
used to purchase shares of Rouge Stock at more than one price, the total number
of shares so purchased shall be allocated on a full or fractional share basis,
or both, as the case may be, to the respective accounts of the Members ratably
in accordance with the respective amounts of funds in their accounts so used.
Anything herein to the contrary notwithstanding, the Trustee shall not
invest any of the funds in the Members' accounts in any shares of Rouge Stock,
unless at the time of purchase thereof by the Trustee the shares shall be
listed on the New York Stock Exchange.
The shares of Rouge Stock held by the Trustee under the Plan shall be
registered in the name of the Trustee or its nominee, but shall not be voted by
the Trustee or the nominee except as provided in Paragraph XVIII.
In the sole discretion of the Trustee, investments in Rouge Stock in
respect of the accounts of more than one Member may be represented by a single
certificate.
In the event that any option, right or warrant shall be received by the
Trustee on Rouge Stock to the credit of one or more Members' accounts, the
Trustee shall sell the same, at public or private sale and at a price and upon
other terms as it may determine, and credit the proceeds thereof to the
respective accounts of the Members, ratably in accordance with their interests
therein, unless the Committee shall determine that the option, right or warrant
should be exercised, in which case the Trustee shall exercise the same upon
terms and conditions as the Committee may prescribe.
The provisions of this Paragraph shall also apply independently to
transactions in Ford Stock, except that Ford Stock may not be acquired from the
Company.
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XVIII. VOTING OF ROUGE AND FORD STOCK.
The Trustee, itself or by its nominee, shall be entitled to vote, and
shall vote, shares of Rouge Stock in the accounts of Members or otherwise held
by the Trustee under the Plan as follows:
1. The Company shall adopt reasonable measures to notify the Member of the
date and purposes of each meeting of stockholders of the Company or Rouge
Industries, Inc., at which holders of shares of Rouge Stock shall be entitled
to vote, and to request instructions from the Member to the Trustee as to the
voting at the meeting of full shares of Rouge Stock and fractions thereof in
any account of the Member.
2. In each case, the Trustee, itself or by proxy, shall vote full shares
of Rouge Stock and fractions thereof in the account or accounts of the Member
in accordance with the instructions of the Member.
3. If prior to the time of a meeting of stockholders the Trustee shall not
have received instructions from the Member in respect of any shares of Rouge
Stock in the account or accounts of the Member, and if the Trustee otherwise
holds shares of Rouge Stock under the Plan, the Trustee shall vote thereat the
shares proportionately in the same manner as the Trustee votes thereat the
aggregate of all shares of Rouge Stock with respect to which the Trustee has
received instructions from Members.
The provisions of this Paragraph shall also apply independently to
voting of Ford Stock.
XIX. CASH ADJUSTMENTS ON ACCOUNT OF FRACTIONAL INTEREST IN SECURITIES.
Any fractional interest in a share of Rouge Stock, Ford Stock or any other
security in any account of a Member shall not be subject to distribution or
withdrawal, but the value thereof shall be subject to transfer pursuant to
Paragraph VIII. Settlement for any fractional interest in the security, upon
distribution or withdrawal thereof, shall be made in cash based on the Current
Market Value or any applicable current redemption value of the security, as of
the date of distribution or withdrawal, as the case may be. The Trustee for
the purpose of providing cash for settlements pursuant to the provisions of
this Paragraph XIX may in its discretion obtain the cash from contributions
under the Plan. In that event, the Trustee, with respect to the shares of
Rouge Stock or Ford Stock which otherwise would have been sold to provide cash
for the settlements, shall retain and reallocate interest in the same among the
accounts of Members in the Plan entitled thereto and at the Current Market
Value of the shares for purposes of the cash settlements.
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XX. OPERATION AND ADMINISTRATION.
Pursuant to ERISA the Company shall be a named fiduciary with respect to
the Plan and shall have authority to control and manage the operation and
administration of the Plan.
In addition to other duties provided elsewhere in the Plan, the Board of
Directors shall have the authority, on behalf of the Company, to do the
following: appoint and remove trustees as provided under Paragraph XVI; approve
policies relating to the allocation of contributions and the distribution of
assets among trustees; to approve Plan amendments; to appoint investment
managers, auditors and other professionals under the Plan; to appoint the
members of the Committee as hereafter provided for in this Paragraph; and to
determine prior service for eligibility purposes under the Plan in the event of
acquisition by a Participating Company (by purchase, merger, or otherwise) of
all or part of the assets of another corporation.
The Board of Directors shall have the authority to designate other persons
to carry out specific responsibilities on behalf of the Company and may
authorize those persons and their designees to further delegate some or all of
those specific responsibilities; provided, however, that the actions of those
persons shall be consistent with ERISA, the Code and the Plan.
Any Company director, officer or employee who shall have been expressly
designated pursuant to the Plan, including delegations of responsibilities
authorized thereunder, to carry out specific Company responsibilities shall be
acting on behalf of the Company. Any person or group of persons may serve in
more than one capacity with respect to the Plan and may employ one or more
persons to render advice with regard to any responsibilities such person has
under the Plan.
The Company shall create a Tax-Efficient Savings Plan Committee consisting
of at least three members. The Company shall from time to time designate the
members of the Committee. The Committee shall appoint its own Chairperson and
Secretary, and shall act by a majority of its members with or without a
meeting. The Secretary or the Vice President-Finance and Controller of the
Company shall from time to time notify the Trustee of the appointment of
members of the Committee and alternates and of the appointment of the
Chairperson and Secretary of the Committee, upon which notices the Trustee
shall be entitled to rely.
The Committee shall have full power and authority to administer the Plan
and to interpret its provisions. Any interpretation of the provisions of the
Plan by the Committee shall be final and conclusive, and shall bind and may be
relied upon by the several Participating Companies, each of their Employees,
the Trustee and all other parties in interest.
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No member of the Committee or director, officer or employee of any
Participating Company shall be liable for any action or failure to act under or
in connection with the Plan, except for his or her own bad faith; provided,
however, that nothing herein shall be deemed to relieve any such person from
responsibility or liability for any obligation or duty under ERISA. Each
director, officer, or employee of the Company who is or shall have been
designated to act on behalf of the Company and each person who is or shall have
been a member of the Committee, or a director, officer or employee of any
Participating Company, as such, shall be indemnified and held harmless by the
Company against and from any and all loss, cost, liability or expense that may
be imposed upon or reasonably incurred by him or her in connection with or
resulting from any claim, action, suit or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action taken or
failure to act under the Plan and against and from any and all amounts paid by
him or her in settlement thereof (with the Company's written approval) or paid
by him or her in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment in favor of the Company based upon a finding of
his or her bad faith; subject, however, to the condition that, upon the
assertion or institution of any such claim, action, suit or proceeding against
him or her, he or she shall in writing give the Company an opportunity, at its
own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf. The foregoing right of
indemnification shall not be exclusive of any other right to which such person
may be entitled as a matter of law or otherwise, or any power that a
Participating Company may have to indemnify him or her or hold him or her
harmless.
Brokerage commissions and transfer taxes on the purchase and sale of
specific assets, specific funds or other investments permitted under the Plan,
including Ford Stock but excluding Rouge Stock, shall be paid from Fund assets
by the Trustee, and the expenses of any collective, common or commingled asset,
fund or investment shall be paid from the respective assets in the collective,
common or commingled asset, fund or investment. Earnings credited to the
account of the Trustee under any specific assets, specific funds or other
investments permitted under the Plan may be net of those charges as approved by
the Committee. All other expenses of administration of the Plan, including
brokerage commissions and transfer taxes on the purchase and sale of Rouge
Stock, fees of investment advisors and other expenses charged or incurred by
the Trustee or the Company, shall be borne by the Company and upon request from
time to time, the Company shall reimburse the Trustee for expenses incurred by
it. Taxes, if any, on any specific assets, specific funds or other investments
permitted under the Plan held by the Trustee or income therefrom which are
payable by the Trustee shall be charged against the Members' accounts as the
Trustee and the Committee shall determine.
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Each Employee at the time of electing to participate in the Plan shall be
offered a copy of the Plan as in effect at the time, and as a condition of
membership shall sign an instrument in form prescribed by the Committee
evidencing the fact that he or she accepts and agrees to all provisions of the
Plan.
The records of the Trustee, the Committee and the several Participating
Companies shall be conclusive in respect of all matters involved in the
administration of the Plan.
The Plan shall be governed by and construed in accordance with the laws of
the State of Michigan.
XXI. TERMINATION, SUSPENSION AND MODIFICATION.
The Company, by action of its Board of Directors, may terminate or modify
the Plan or suspend the operation of any provision of the Plan, as follows:
1. The Company may terminate the Plan at any time or may at any time or
from time to time modify the Plan, in its entirety or in respect of the
Employees of one or more of the Participating Companies. The Company may at
any time or from time to time terminate or modify the Plan or suspend for any
period the operation of any provision thereof, in respect of any Employees
located in one or more states or countries, if in the judgment of the Committee
compliance with the laws of such state or country would involve
disproportionate expense and inconvenience to a Participating Company. Any
modification that affects the rights or duties of the Trustee may be made only
with the consent of the Trustee. Any termination, modification or suspension
of the Plan may affect Members in the Plan at the time thereof, as well as
future Members, but may not affect the rights of a Member as to (a) the
distribution or withdrawal of the amount in the accounts of the Member as of
the effective date of the termination, modification or suspension and earnings
thereon; provided, however, that the Company may, in the event of a termination
of the Plan, direct the Trustee to distribute the assets in the accounts of
Members in the Plan to the Members, or (b) the vesting or continuance of
vesting of the assets attributable to Company Matching Contributions or
earnings thereon. Any termination or modification of the Plan or suspension of
any provision thereof shall be effective as of such date as the Company may
determine, but not earlier than the date on which the Company shall give notice
of the termination, modification or suspension to the Trustee and to the
Participating Companies any of the Employees of which are affected thereby.
2. The provisions of the foregoing Subparagraph 1 notwithstanding, the
Company, by action of its Board of Directors, or by action of persons
authorized by the Board of Directors, at any time or from time to time may
modify any of the provisions of the Plan in any respect retroactively, if and
to the extent necessary or appropriate in the judgment of the Board of
Directors
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of the Company to qualify or maintain the Plan and the trust fund
established thereunder as a plan and trust meeting the requirements of Code
Sections 401(a), 401(k), 401(m) and 501(a), or any other applicable provisions
of Federal tax laws or other legislation, as now in effect or hereafter amended
or adopted, and the regulations thereunder at the time in effect.
3. Anything herein to the contrary notwithstanding, no such termination or
modification of the Plan or suspension of any provision thereof may diminish
the amount in the accounts of a Member as of the effective date of such
termination, modification or suspension.
4. In the event of any merger or consolidation with, or transfer of assets
or liabilities to, any other plan, each Member or Member's beneficiary or
estate shall, if the Plan is then terminated, have a benefit immediately after
the merger, consolidation or transfer, which is equal to the benefit he or she
would have been entitled to immediately before the merger, consolidation or
transfer if the Plan had then terminated.
5. Effective on and after February 1, 1995, upon any termination or
partial termination of the Plan, the amount in the Company Matching
Contributions Account of any affected Employee shall be deemed to have vested
in his or her account and shall be nonforfeitable as of the date of the
termination or partial termination.
XXII. CONDITIONS ON PARTICIPATION OF SUBSIDIARIES OF THE COMPANY.
The consent of the Company to the participation in the Plan of any
subsidiary of the Company may be conditioned upon such provisions as the
Company may prescribe, including, without limitation, conditions as to (a) the
instruments to be executed and delivered by such Participating Company to the
Trustee, (b) the extent to which the Company shall act as the representative of
the Participating Company under the Plan, (c) the rights of the Participating
Company to withdraw from participation in the Plan and the effect of the
withdrawal upon the memberships and accounts in the Plan of Employees of the
Participating Company, and (d) reimbursement of the Company on account of
Company Matching Contributions.
XXIII. MEMBER'S RIGHTS NOT TRANSFERABLE.
No right or interest of any Member under the Plan or in his or her
accounts shall be assignable or transferable, in whole or in part, either
directly or by operation of law or otherwise, including, without limitation by
execution, levy, garnishment, attachment, pledge or in any other manner, except
in accord with provisions of a qualified domestic relations order as defined by
Code Section 414(p) and Section 206(d) of ERISA, and further excluding
devolution by death or mental incompetency; no attempted
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assignment or transfer thereof shall be effective; and no right or interest of
any Member under the Plan or in his or her accounts shall be liable for, or
subject to, any obligation or liability of the Member.
XXIV. DESIGNATION OF BENEFICIARIES.
1. A Member may file with the Company a written designation of a
beneficiary or beneficiaries with respect to all or apart of the assets in the
Member's accounts. In the case of a married Member who dies, the amount in the
Member's accounts shall be delivered to the Member's surviving spouse unless
the written designation of beneficiary designating a person or persons other
than the spouse with respect to all or part of the assets in the Member's
accounts includes the written consent of the spouse, witnessed by a notary
public. A Member, with, if married, written consent of the spouse, may from
time to time revoke or change any designation of beneficiary.
2. In the case of an unmarried Member who does not file a written
designation of beneficiary, the Member shall be deemed to have designated as
beneficiary or beneficiaries under the Plan the person or persons who are
entitled in the event of the Member's death to receive the proceeds under the
Company's Group Life and Disability Insurance Program if the Member is covered
under that Program at the date of his death.
3. In the event of the death of a Member, any amount in his or her
accounts under the Plan shall be delivered to, as applicable, the spouse or
beneficiaries who shall survive the Member, in accordance with the applicable
designation (to the extent effective and enforceable at the time of the
Member's death) and the provisions of the Plan, subject to regulations as the
Committee from time to time may prescribe in respect of distributions to
minors; provided, however, that if the Trustee or the Committee shall be in
doubt as to the right of any person to receive any amount, the Trustee may
deliver the same to the estate of the Member, in which case the Trustee, the
several Participating Companies and the Committee and the several members
thereof and alternates for members shall not be under any further liability to
anyone. Except as hereinabove provided, in the event of the death of a Member,
the amount in his or her accounts under the Plan shall be delivered to his or
her estate.
XXV. LIMITATION ON CONTRIBUTIONS UNDER CODE SECTION 415.
1. Limitation.
Notwithstanding any other provision hereof, the sum of the Annual
Additions (as defined in Subparagraph 2 of this Paragraph) in respect of any
Employee for any Limitation Year (as defined in Subparagraph 3 of this
Paragraph) shall not exceed the lesser of:
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(a) 25 % of the Employee's Compensation (as defined in Subparagraph 4
of this Paragraph), or
(b) $30,000 (or, if greater, one quarter of the dollar limitation in
effect under Code Section 415(b)(1)(A) as adjusted for inflation by the
Secretary of the Treasury pursuant to Code Section 415(d) relating to
cost-of-living increases).
2. Annual Additions.
Effective on and after February 1, 1995, the Annual Addition in respect
of any Employee for any Limitation Year (as defined in Subparagraph 3 of this
Paragraph) shall mean the sum for the year of:
(a) Tax-Efficient Savings Contributions and Company Matching
Contributions in respect of the Employee under this Plan and any other
defined contribution plan sponsored by the Company, plus
(b) Any Employee contributions (as determined under Subparagraph 6(b)
of this Paragraph) under any other defined contribution plan sponsored by
the Company, plus
(c) Forfeitures, if any, credited to the Employee's accounts under this
Plan.
3. Limitation Year.
For purposes of this Paragraph, Limitation Year shall mean the
twelve-month period beginning April 1 and ending March 31.
4. Compensation
As used in this Paragraph, Compensation shall mean the compensation (as
defined by Code Section 415(c)(3) and Section 1.415-2(d) of Treasury
Regulations) paid or made available to an Employee during the Limitation Year
in question.
5. Order of Application of Limitations.
Effective on and after February 1, 1995 if, as a result of the
allocation of forfeitures, a reasonable error in estimating a participant's
annual compensation, a reasonable error in determining the amount of elective
deferrals (within the meaning of Code Section 402(g)(3)) that may be made with
respect to any individual under the limits of Section 415, or under other
limited facts and circumstances that the Commissioner of the Internal Revenue
Service finds justify the availability of the rules set forth in Regulation
1.415-6(b)(6), the Annual Addition taken into account under subparagraph 2 of
this paragraph shall exceed, or shall be reasonably projected to exceed, the
limitation of the
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Annual Addition required by subparagraph 1 of this paragraph, any necessary or
appropriate reduction in Company Matching Contributions or Tax-Efficient Savings
Contributions shall be applied: first, by reducing amounts contributed as
Tax-Efficient Savings Contributions pursuant to subparagraph 1 of paragraph IV
from Profit Sharing Distributions and gains attributable thereto; second,
by reducing the Employee's Tax-Efficient Savings Contributions and gains
attributable thereto that are not matched by Company Matching Contributions;
and, third, by reducing Tax-Efficient Savings Contributions and gains
attributable thereto that are matched by Company Matching Contributions and
related Company Matching Contributions (in the same ratio as the average
percentage for Company Matching Contributions as projected or determined for a
Plan Year in accordance with the provisions of subparagraph 2 of paragraph IV).
Notwithstanding any other provision of the Plan, in conforming to the
limitations of this Paragraph the aforementioned reductions in Tax-Efficient
Savings Contributions and Company Matching Contributions may be made in less
than a full percentage amount and may be rounded down to the nearest full
dollar. Any reduction pursuant to this Paragraph may be effected (a) before the
Annual Addition reaches the limitation required by Subparagraph 1 of this
Paragraph in order to carry out the ordering rule of this Subparagraph and (b)
retroactively as provided in Section 1.415-6(b)(6)(iv) of the Treasury
Regulations: first, by distributing Tax-Efficient Savings Contributions that are
not matched, and gains attributable thereto; and second, by distributing
Tax-Efficient Savings Contributions that are matched, and gains attributable
thereto, all as are necessary to reduce the Annual Addition to the limitation.
6. Participants in Plans of Subsidiaries or Affiliates.
If a Member at any time during the Limitation Year, was a participant
under any defined contribution plan (as the term is used in Code Section 415(c))
or defined benefit plan (as that term is used in Code Section 415(b)) of an
Affiliate of the Company (other than an employee stock ownership plan described
in Code Section 415(c)(6)), all such plans being referred to herein collectively
as "affiliate plans," then the determination of the Annual Addition in respect
of the member for the Limitation Year as described in Subparagraph 3 of this
Paragraph shall be modified as provided in this Subparagraph:
(a) any employer contributions (as the term is used in Code Section
415(c)(2)(A)) and any forfeitures allocated during the year for the accounts
of the Member under all affiliate defined contribution plans in respect of
services performed prior to the Member's commencement of participation under
this Plan shall be added to the amount determined under Subparagraph 2(a) of
this Paragraph; and
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(b) any employee contributions (as that term is used in Code Section
415(c)(2)(B)) by the Member during the year under all affiliate plans in
respect of services performed prior to the Member's commencement of
participation under this Plan shall be taken into account for purposes of
Subparagraph 2(b) of this Paragraph.
7. Combined Limitation.
If the Member is, or was, covered under a defined benefit plan and
defined contribution plan maintained by the Company, the sum of the Member's
defined benefit plan fraction and defined contribution plan fraction may not
exceed 1.0 in any Limitation Year.
The defined benefit plan fraction is a fraction, the numerator of which
is the sum of the Member's projected annual benefits under all defined benefit
plans (whether or not terminated) maintained by the Company and the denominator
of which is the lesser of (i) 1.25 times the dollar limitation of Code Section
415(b)(1)(A) in effect for the Limitation Year, or (ii) 1.4 times the member's
average Compensation for the three consecutive years that produces the highest
average.
The defined contribution plan fraction is a fraction, the numerator of
which is the sum of the Annual Additions to the Member's account under all
defined contribution plans maintained by the Company (whether or not terminated)
for the current and all prior Limitation Years, and the denominator of which is
the sum of the lesser of the following amounts determined for the Year and for
each prior year of service with the employer: (i) 1.25 times the dollar
limitation in effect for that Year under Code Section 415(c)(1)(A), or (ii) 1.4
times the amount which may be taken into account under Code Section
415(c)(1)(B).
The Annual Addition for any year prior to 1987 shall not be recomputed
to treat all employee contributions as an Annual Addition. If the plan
satisfied the applicable requirements of Code Section 415 as in effect for all
Limitation Years prior to 1987, an amount shall be subtracted from the numerator
of the defined contribution plan fraction (not exceeding such numerator) as
prescribed by the Secretary of the Treasury so that the sum of the defined
benefit plan fraction and defined contribution plan fraction does not exceed 1.0
for that Limitation Year.
Projected annual benefit means the annual benefit to which the Member
would be entitled under the terms of the plan, if the participant continued
employment until normal retirement age (or current age, if later) and the
Member's Compensation for the Limitation Year and all other relevant factors
used to determine the benefit remained constant until normal retirement age (or
current age, if later).
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If, in any Limitation Year, the sum of the defined benefit plan fraction
and the defined contribution plan fraction will exceed 1.0, the rate of benefit
accruals under the defined benefit plan will be reduced so that the sum of the
fractions equals 1.0.
XXVI. FORFEITED COMPANY MATCHING CONTRIBUTIONS.
1. Any amount attributable to Company Matching Contributions or earnings
thereon, which shall be forfeited in a Member's Company Matching Contributions
Account pursuant to Subparagraph 4 of Paragraph IV, Subparagraph 3 of Paragraph
X or Subparagraph 2 of Paragraph XII, shall be applied, as soon as practicable,
first, to the payment of certain expenses for administration of the Plan, as
described in Paragraph XX, and thereafter, to reduce the amount of any Company
Matching Contributions under the Plan or, if the Plan shall be terminated, any
amount not so applied from time to time shall be credited ratably to the
respective Company Matching Contributions Accounts of the Members in the Plan
as of the day immediately following the date of forfeiture. In the latter
case, any amounts so credited to a Member's Company Matching Contributions
Account, and any increment thereof, shall, at the time of distribution or
withdrawal thereof, be deemed to have vested in such account, the provisions of
Paragraph VI notwithstanding. The Rouge Stock or Ford Stock applied to reduce
the amount of the Company Matching Contribution, or applied to the payment of
certain expenses for administration of the Plan, pursuant to the provisions of
this Paragraph XXVI, shall be valued at a price per share equal to the average
of the highest price and the lowest price at which shares of Rouge Stock or
Ford Stock, respectively, are sold on the date of such application or, if no
sales were made on that date, on the next preceding day on which there were
sales, in either case as reported in the Composite Quotation Listing.
2. If (a) a Member's accounts are distributed to him or her pursuant to
the provisions of Paragraph X, or (b) if a Member shall make a withdrawal from
his or her Tax-Efficient Savings Account pursuant to Paragraph XII prior to
October 1, 1996 and prior to the date on which related Company Matching
Contributions and Earnings thereon have vested, as determined pursuant to the
provisions of Paragraph VI, the Member may subsequently elect, subject to the
limitations hereinafter provided, to return to the Plan in a lump sum in cash
the value as of the effective date of the distribution or withdrawal of the
securities and cash delivered pursuant to the distribution or withdrawal and
thereby have restored to his or her Company Matching Contributions Account
securities and cash having a value equal to the value, as of the effective date
of the distribution or withdrawal, of the securities and cash attributable to
Company Matching Contributions and Earnings thereon that had been forfeited.
Any such return may be made only while the Member is an Employee of a
Participating Company and may not be made later than the end of the five-year
period beginning with the effective date of the withdrawal or in
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the case of a distribution pursuant to Paragraph X following termination of
employment, not later than five years after the date the Member shall have been
reemployed by a Participating Company.
If any such return is made on or before the last day of the Plan Year in
which the effective date of the distribution or withdrawal falls, the amount of
forfeitures to be restored which is attributable to the returned amount shall be
included in the same Plan Year as the effective date of the distribution or
withdrawal and if made after the Plan Year, in the Plan Year which succeeds the
Plan Year in which the effective date of the distribution or withdrawal fell by
one Plan Year for each anniversary of the Plan Year end that occurs on or after
the effective date of distribution or withdrawal and prior to the date of the
return.
Amounts so restored shall vest as provided in Paragraph VI and shall be
treated as attributable to Company Matching Contributions for all purposes of
the Plan.
Amounts so returned and amounts so restored shall be invested in Rouge
Stock, specific assets, specific funds and other investments permitted under the
Plan according to the values of the investments in the securities and cash
distributed to or withdrawn by the Member on the effective date thereof (or in
accordance with a method determined by the Committee in case an intervening
change in the permitted investments has terminated an investment alternative),
at the same time the Trustee invests contributions made during the month in
which the return is made.
XXVII. QUALIFIED MILITARY SERVICE
Effective on and after December 12, 1994, notwithstanding any provision
of this Plan to the contrary, contributions, benefits and service credit with
respect to qualified military service will be provided in accordance with
Section 414(u) of the Code. Loan repayments will be suspended under this Plan
as permitted under Section 414(u)(4) of the Code.
Dated: July 23, 1997 ROUGE STEEL COMPANY
By: /s/ William E. Hornberger
-----------------------------------
William E. Hornberger
Its: Vice President, Employee
Relations and Public Affairs
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EXHIBIT 10.32
ROUGE STEEL COMPANY
STOCK INCENTIVE PLAN
(AS AMENDED AND RESTATED EFFECTIVE JULY 30, 1997)
WHEREAS, Rouge Steel Company, a Delaware corporation, adopted the
Rouge Steel Company Stock Incentive Plan (the "Plan") to align the interests of
certain officers and employees of Rouge Steel Company with those of
shareholders by rewarding long-term growth and profitability of the Company;
and
WHEREAS, the Plan was last amended and restated by Resolution of its
Board of Directors, effective March 6, 1997, except as otherwise provided
therein; and
WHEREAS, effective July 30, 1997, Rouge Steel Company will reorganize
and pursuant to the reorganization, Rouge Steel Company will become the wholly
owned subsidiary of Rouge Industries, Inc. (the "Reorganization"); and
WHEREAS, the common stock of Rouge Steel Company is to be exchanged on
an equal basis for the common stock of Rouge Industries, Inc. on the effective
date of the Reorganization; and
WHEREAS, Rouge Industries, Inc., pursuant to the Reorganization
assumes sponsorship of the Plan and desires to amend and restate the Plan to
reflect the Reorganization.
NOW, THEREFORE, in consideration of the premises, the Plan is hereby
amended and restated, effective July 30, 1997, except as otherwise expressly
provided therein, in its entirety as follows:
SECTION 1. PURPOSE.
The purpose of this Stock Incentive Plan is to align the interests of
certain officers and employees of Rouge Steel Company with those of
shareholders of the Company by rewarding long-term growth and profitability of
the Company. Accordingly, certain officers and employees may be granted Stock
Options, Stock Appreciation Rights, Restricted Stock and Performance Share
Awards. Ownership of stock assists in the attraction and retention of
qualified employees and provides them with additional incentive to devote their
best efforts to pursue and sustain the Company's financial success through the
achievement of corporate goals.
SECTION 2. DEFINITIONS.
A. "Agreement" shall mean a written agreement, in a form
approved by the Committee, which sets forth the terms and
conditions of an Award. Agreements shall be subject to
the express terms and conditions set forth herein, and to
such other terms and conditions not
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inconsistent with the Plan as the Committee shall deem
appropriate.
B. "Award" shall mean an Option (which may be designed as a
Nonqualified Stock Option or an Incentive Stock Option), a
Stock Appreciation Right (which may be designated as a
Freestanding SAR or Tandem SAR), a Restricted Stock Award
or a Performance Share Award, in each case granted under
this Plan. Each Award shall be evidenced by an Agreement.
C. "Beneficiary" shall mean (i) any transferee of an
Employee's right, interests, Options or SARs, subject to
Section 13B of the Plan or (ii) the person, persons, trust
or trusts designated by an Employee, or if no designation
has been made, the person, persons, trust or trusts
entitled by will, any trust agreement or the laws of
descent and distribution, to receive the benefits
specified under this Plan in the event of an Employee's
death, and, if necessary, for purposes of exercise of any
Option or SAR, the term shall include the Employee's
executor, administrator or personal representative.
D. "Board" shall mean the Board of Directors of the Company.
E. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
F. "Committee" shall mean the Compensation Committee of the
Board. All Directors serving on the Committee at any
given time shall be (i) "Non-Employee Directors" as that
term is used in Rule 16b-3 of the Securities and Exchange
Commission, and (ii) "outside directors" as that term is
used in Section 162(m) of the Code (except to the extent
not necessary for Section 162(m) Relief or Section 162(m)
Relief is not sought). The number of Directors serving on
the Committee at any given time shall be no less than the
number then required by Rule 16b-3 and by Section 162(m)
(except to such extent not necessary for Section 162(m)
Relief or Section 162(m) Relief is not sought).
G. "Common Stock" shall mean shares of $0.01 par value Class A
Common Stock of the Company, subject to adjustment
pursuant to Section 11.
H. "Company" shall mean (i) prior to 11:59 p.m., July 30,
1997, Rouge Steel Company, a Delaware corporation, and
(ii) on and after 11:59 p.m., July 30, 1997, Rouge
Industries, Inc, a Delaware corporation.
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I. "Disabled" or "Disability" shall mean eligible to receive a
benefit under the Long-Term Disability Plan of Rouge Steel
Company.
J. "Employee" shall mean an Employee of Rouge Steel Company,
whether or not an officer thereof, and shall include any
such Employee who is also a director of Rouge Steel
Company.
K. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
L. "Exercise Price" shall mean, with respect to each share of
Common Stock subject to an option, the price fixed by the
Committee at which such share may be purchased from the
Company pursuant to the exercise of such Option, which
price may not be less than 100% of the Fair Market Value
of such share on the date the Option is granted.
M. "Fair Market Value" shall mean the closing price of the
Common Stock on the New York Stock Exchange as reported on
the Composite Tape, or if it is not listed on the New York
Stock Exchange, the closing price on the exchange on which
the Common Stock is then listed, or if not listed on any
exchange, the closing price reported on the NASDAQ
National market System over-the-counter market; if,
however, there is no trading of the Common Stock on the
date in question, then the closing price of the Common
Stock, as so reported, on the last preceding date on which
there was trading shall instead be used to determine Fair
Market Value. If Fair Market Value for any date in
question cannot be determined as hereinabove provided,
Fair Market Value shall be determined by the Committee by
whatever method or means the members, in the good faith
exercise of their discretion, at that time shall deem
appropriate.
N. "Freestanding SAR" shall mean a right, granted pursuant to
this Plan without reference or relationship to any Option,
of a holder to receive cash, shares of Common Stock, or a
combination thereof, as the case may be, having an
aggregate value equal to the excess of the Fair Market
Value of one share of Common Stock on the date of exercise
of such SAR over the Fair Market Value of one such share
on the date of grant of such SAR.
O. "Incentive Stock Option" or "ISO" shall mean an Option that
meets the requirements of Section 422 of the Code, or any
successor provision, and that is intended by the Committee
to constitute an ISO. Any ISO granted hereunder must be
granted within ten
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years from the date the Plan becomes effective and the
aggregate Fair Market Value (determined at the time of
grant of any ISO) of the Common Stock for which ISOs are
granted under the Plan which are exercisable by an
Employee for the first time during any calendar year may
not exceed $100,000. If for any reason an Option (or any
portion thereof) intended by the Committee to be an ISO
nevertheless does not so qualify as an ISO under the Code,
either at the time of grant or subsequently, such failure
to qualify shall not invalidate the Option (or any portion
thereof) and instead the nonqualified portion (or, if
necessary, the entire Option) shall be deemed to have been
granted as a Nonqualified Stock Option irrespective of the
manner in which it is designated in the Option Agreement.
P. "Legal Representative" shall mean the guardian or legal
representative of the Employee who, upon the Disability or
incapacity of an Employee, shall have acquired on behalf
of the Employee, by legal proceeding or otherwise, the
right to exercise the Employee's rights and receive his or
her benefits under the Plan.
Q. "Nonqualified Stock Option" or "NQSO" shall mean an Option
that is not an ISO.
R. "Option" shall mean the right, granted pursuant to this
Plan, of a holder to purchase shares of Common Stock at a
price and upon terms to be specified by the Committee.
The term shall include a Nonqualified Stock Option or an
Incentive Stock Option.
S. "Performance Measures" shall mean, with respect to each
Performance Share Award or any Restricted Stock Award, the
criteria and objectives, determined by the Committee,
which must be met during the applicable Performance Period
or Restriction Period, as the case may be: (i) for any
Performance Share Award, the conditions established upon
the holder's receipt of the Award; or (ii) for any
Restricted Stock Award, the lapse of restrictions with
respect to the Award. Such criteria and objectives may
include, but shall not be limited to, earnings per share,
total return on Common Stock, and Company return on equity
compared to a peer group's return on equity. To the
extent Section 162(m) Relief is sought, the Committee
shall take into account the provisions of Section 162(m)
of the Code with respect to the timing of the
establishment of the Performance Measures. The
Performance Measures pertinent to any Performance Share
Award or Restricted Stock Award shall be established at
the time of such Award and set forth
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in the applicable Agreement, but may be revised by the
Committee thereafter if and whenever its members determine
that, in light of events occurring or circumstances
arising after the date of such Award, such revision is
necessary or appropriate to afford the recipient benefits
substantially similar to those originally intended with
respect to such Award; provided that, to the extent
Section 162(m) Relief is sought, the Committee shall take
in to account the requirements of Section 162(m) of the
Code in making any such revision. Anything herein to the
contrary notwithstanding, to the extent Section 162(m)
Relief is sought, (i) the Committee shall provide that no
compensation shall be payable under the Plan in connection
with a Performance Measure (or the satisfaction or
attainment thereof) unless the applicable Performance
Measure has been disclosed to and approved by the
shareholders to the extent required to qualify for Section
162(m) Relief; and (ii) no such compensation shall be
payable in the absence of such disclosure and approval.
T. "Performance Period" shall mean the period designated by
the Committee during which the Performance Measures
applicable to a Performance Share Award shall be measured.
The Performance Period shall be established at the time of
such Performance Share Award, and shall not be less than
three (3) nor more than five (5) years in duration. The
duration of Performance Periods may vary.
U. "Performance Share Award" shall mean an award of the right,
contingent upon attainment of Performance Measures within
a Performance Period, to receive a specified number of
Performance Shares or, in lieu of all or any portion of
such Performance Shares, their Fair Market Value in cash,
as more specifically provided in Section 9.
V. "Performance Shares" shall mean those shares of Common
Stock issuable pursuant to a Performance Share Award.
W. "Plan" shall mean the Rouge Steel Company Stock Incentive
Plan.
X. "Restriction Period" shall mean the period designated by
the Committee during which Restricted Stock may not be
sold, exchanged, assigned, transferred, pledged,
hypothecated or otherwise encumbered or disposed of except
as otherwise provided in the Plan, which period shall not
be less than three (3) years nor more than five (5) years
from the date of grant.
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<PAGE> 6
Y. "Restricted Stock" shall mean any shares of Common Stock
issued pursuant to the Plan subject to the restriction
that they may not be sold, exchanged, assigned,
transferred, pledged, hypothecated or otherwise encumbered
or disposed of except as otherwise provided in the Plan,
prior to termination of a Restriction Period. Restricted
Stock shall constitute issued and outstanding shares of
Common Stock for all corporate purposes.
Z. "Restricted Stock Award" shall mean an award of Restricted
Stock pursuant to the Plan.
AA. "Retirement" shall mean retirement of an Employee from the
employ of Rouge Steel Company as described in the Rouge
Steel Company Salaried Employee Retirement Plan.
BB. "Rule 16b-3" means Rule 16b-3 of the Securities and
Exchange Commission (or any successor regulation) as in
effect with respect to the Company at a given time.
CC. "Section 162(m) Relief" shall mean such exception as may be
available pursuant to Section 162(m) of the Code from the
limitation on tax deductibility provided for thereunder.
DD. "Stock Appreciation Right" or "SAR" shall mean any
Freestanding SAR or Tandem SAR.
EE. "Tandem SAR" shall mean a right, granted under this Plan,
pursuant to which a holder may elect to surrender an
Option, or any portion thereof, which is then exercisable,
and receive in exchange therefor shares of Common Stock,
cash, or a combination thereof, as the case may be with an
aggregate value equal to the excess of the Fair Market
Value of one share of Common Stock at the time of exercise
over the per share Exercise Price specified in such
Option, multiplied by the number of shares of Common Stock
covered by such Option, or portion thereof, which is so
surrendered.
FF. "Tax Withholding Date" shall mean the date the withholding
tax obligation first arises with respect to an Award.
SECTION 3. STOCK SUBJECT TO THE PLAN.
Shares of Common Stock issuable as or pursuant to Awards granted under
the Plan must be authorized and issued shares of Common Stock. Subject to
adjustment as provided in Section 11, at any given time, the maximum number of
shares of Common Stock which
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<PAGE> 7
may be issued as Restricted Stock and made subject to future issuance in
settlement of Performance Awards or pursuant to the exercise of Options or SARs
hereunder shall be 500,000 shares, reduced by the number of shares of Common
Stock reserved for issuance under the Rouge Steel Company Outside Director
Equity Plan, except that the following shall also be available hereunder: (i)
shares as to which Options granted during the Granting Period have since
expired, terminated, or been cancelled for any reason other than exercise of
such Options (or of related Tandem SARs); (ii) the excess (if any) of the
number of shares subject to Tandem SARs both granted and exercised during the
Granting Period over the number of shares issued or to be issued (or withheld
or to be withheld for purposes of tax withholding) in connection with the
exercise of such SARs; (iii) the excess (if any) of the number of Freestanding
SARs both granted and exercises during the Granting Period over the number of
shares issued or to be issued (or withheld or to be withheld for tax
withholding purposes) in connection with the exercise of such SARs; (iv) the
number of shares subject to Performance Share Awards both granted and forfeited
during the Granting Period; (v) with respect to Performance Share Awards
granted during the Granting Period which have been determined to have been
earned, the excess (if any) of the number of shares so determined to have been
earned over the number of shares issued or to be issued (or withheld or to be
withheld for tax withholding purposes) in settlement of such Performance Share
Awards; and (vi) to the extent permitted by Rule 16b-3, shares of Restricted
Stock that are forfeited.
In addition to the foregoing, in no event may the total number of
shares covered by outstanding ISOs plus the number of shares issued in
settlement of exercised ISOs, whenever granted, exceed 400,000 shares, and in
no event may Freestanding SARs exercisable only for cash be granted at any time
at which this Section would not permit the grant of Freestanding SARs which
could be settled in shares. In no event may any Employee receive Options,
SARs, Restricted Stock Awards, Performance Share Awards or any combination of
each for more than 50,000 shares of Common Stock over the life of the Plan.
SECTION 4. ADMINISTRATION.
The Plan shall be administered by the Committee. In addition to any
implied powers and duties that may be needed to carry out the provisions of the
Plan, the Committee shall have all the powers vested in it by the terms of the
Plan, including exclusive authority to grant Awards under the Plan, to select
the employees to receive such Awards, to determine the type, size and terms of
the Awards to be made to each Employee selected (which Awards need not be
uniform), to determine the time when Awards will be granted (to the extent
Section 162(m) Relief is sought, taking into account the provisions of Section
162(m) of the Code), and to prescribe the form of the Agreements embodying
Awards made under the Plan. The Committee shall be authorized to interpret the
Plan and the Awards granted under the Plan, to establish, amend and
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<PAGE> 8
rescind any rules and regulations relating to the Plan, to make any other
determinations which it believes necessary or advisable for the administration
of the Plan, and to correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Award in the manner and to the extent the
Committee deems desirable to carry it into effect.
All Committee determinations shall, unless otherwise determined by the
Board, be final, conclusive and binding on the Company, any Employee,
Beneficiary, Legal Representative, and any other interested parties. The
Committee may authorize any one or more of their number, or any officer of the
Company, to execute and deliver documents on behalf of the Committee.
SECTION 5. ELIGIBILITY.
All Employees are eligible for selection by the Committee to receive
an Award, except Employees covered by a Collective Bargaining Agreement with
the Company which does not provide for coverage under this Plan.
SECTION 6. STOCK OPTIONS.
A. Terms and Conditions.
1. Type of Option. Each Option Agreement shall
specify whether the pertinent Option is intended as a
Nonqualified Stock Option or an Incentive Stock Option.
2. Number of Shares Covered. Each Option Agreement
shall specify the number of shares of Common Stock subject
to the pertinent Option.
3. Exercise Period.
a. In General. Each Option Agreement shall specify
the period (or periods) during which the pertinent
Option (or portions thereof) may be exercised, and
shall provide that the Option (or such portion)
shall expire at the end of such period (or
periods). Except as otherwise provided herein, any
Option must be exercised during the period of the
Employee's employment with Rouge Steel Company. No
Option may be exercised later than ten (10) years
from the date it is granted.
b. Retirement. In the event of the Retirement of the
Optionee, his/her Option shall be exercisable for a
period of three (3) years after the date of
Retirement (or, in the case of any ISO held by an
Optionee who is not Disabled, three (3) months
after such date), or during the remainder of the
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<PAGE> 9
original term of the Option, whichever is shorter.
c. Disability. In the event of the cessation of the
Employee's employment by reason of Disability, the Option
shall be exercisable for a period of three (3) years after
the date of cessation of such employment (or, in the case
of any ISO held by an Optionee who is Disabled, one (1)
year after such date), or during the remainder of the
original term of the Option, whichever period is shorter.
d. Termination of Employment. In the event of the
cessation of the Optionee's employment for any reason
other than Retirement, Disability or death, the Option
shall expire on the date of termination of employment from
Rouge Steel Company, if not earlier expired in accordance
with its terms.
e. Death. In the event of the Optionee's death (whether
during his or her employment with Rouge Steel Company or
during any applicable post-termination exercise period),
the Option shall be exercisable by the Beneficiary(ies) of
the decedent for a period of one (1) year after the date
of the Employee's death (or, in the case of ISOs, for a
period of three (3) months after the Employee's death),
or, if the decedent's death occurs subsequent to his or
her Retirement, Disability or termination of employment
for any other reason, during the period the decedent would
have been permitted to exercise the Option (had he or she
survived), if that period is shorter. Notwithstanding the
foregoing, however, in no event may any Option be
exercised after its original term.
f. Extension or Reduction of Exercise Period. In the
circumstances set forth in subsections "b" through "e" of
this Section, the Committee may extend or reduce the
length of the exercise period, but may not extend any such
period beyond the original term of the Option (or, insofar
as this paragraphs related to Freestanding SARs pursuant
to Section 7, the SAR). Further, with respect to ISOs, as
a condition of any such extension, the holder shall be
required to deliver to the Company a release which
provides that such holder holds the Company and Rouge
Steel Company harmless with respect to any adverse tax
consequences the holder may suffer by reason of any such
extension.
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<PAGE> 10
4. Exercise Price. The Exercise Price shall be
determined by the Committee at the time any Option is
granted, and shall be set forth in the Option Agreement.
5. Manner of Exercise. The specified number of
shares with respect to which an Option is exercised will,
subject to applicable tax withholding, be issued following
receipt by the Company of (i) written notice of such
exercise from the optionee (in such form as the Committee
shall have specified in the Option Agreement or otherwise)
of an Option delivered to the Corporate Secretary or the
Vice President and Treasurer of the Company, and (ii)
payment to the Company, as provided herein, of the
Exercise Price.
6. Payment for Shares. The Exercise Price for the
number of shares of Common Stock with respect to which an
Option is exercised shall be paid in full when the Option
is exercised. Unless otherwise provided in the Option
Agreement, the Exercise Price may be paid, in whole or in
part, in (i) cash, (ii) whole shares of Common Stock,
valued at their then Fair Market Value, (iii) if permitted
in the sole discretion of the Committee (taking into
account, without limitation, Section 16 of the Exchange
Act), through the withholding of shares issuable upon
exercise of the Option valued at their then Fair Market
Value, or (iv) by a combination of such methods of
payment. The Company may enter into any arrangement
permitted under applicable laws to facilitate the
"cashless" exercise of any Option.
B. Effect of Exercise of Option on Tandem SAR.
Upon the exercise of an Option with respect to which a Tandem SAR has
been granted, the number of shares of Common Stock with respect to which the
SAR shall be exercisable shall be reduced by the number of shares with respect
to which the Option has been exercised.
SECTION 7. STOCK APPRECIATION RIGHTS.
A. Terms and Conditions.
1. Type of SAR. Each SAR Agreement shall specify
whether it relates to a Tandem SAR or to Freestanding SARs.
2. Number of Optioned Shares or Freestanding SARs.
In the case of any Tandem SAR, the SAR Agreement shall
specify the Option and the number of shares of Common
Stock subject thereto to which the SAR
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<PAGE> 11
relates. Any SAR Agreement relating to Freestanding SARs
shall specify the number of such SARs to which it relates.
3. Exercise Period. Each SAR Agreement shall specify
the period during which the pertinent SAR(s) may be
exercised and shall provide that the SAR(s) shall expire
at the end of each period (or periods). For a
Freestanding SAR, such expiration date shall be no later
than ten (10) years from the date of grant thereof. For
Tandem SARs, such expiration date(s) shall be no later
than the date(s) of expiration of the related Option and a
Tandem SAR shall be exercisable during its term only when
and to the extent the related Option is exercisable. A
Freestanding SAR shall be exercisable only during the
period of the grantee's employment with Rouge Steel
Company and for such post-termination exercise period as
would apply under the provisions of Section 6(A)(3)(b)-(f)
had the Freestanding SAR Award to the grantee instead been
an Award of NQSOs.
4. Manner of Exercise. A SAR granted under the Plan
shall be exercised by the holder by delivery to the
Corporate Secretary or the Vice President and Treasurer of
the Company of written notice of exercise in such form as
the Company shall have specified in the SAR Agreement or
otherwise.
5. Payment to Holder. If the form of consideration
to be received upon exercise of the SAR is not specified
in the Agreement governing the SAR, upon the exercise
thereof, the holder may request the form of consideration
he or she wishes to receive in satisfaction of such SAR,
which may be in shares of Common Stock (valued at Fair
Market Value on the date of exercise of the SAR), or in
cash, or partly in cash and partly in shares of Common
Stock, as the holder shall request; provided, however,
that the Committee, in its sole discretion (taking into
account, without limitation, Section 16 of the Exchange
Act), may consent to or disapprove any request of the
Employee to receive cash in full or partial settlement of
such SAR. Payment shall be subject to applicable tax
withholding.
B. Effect of Exercise of Tandem SAR on Related Option.
Upon the exercise of a Tandem SAR, the number of shares covered by the
related Option shall be reduced by the number of shares of Common Stock with
respect to which such SAR is exercised.
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<PAGE> 12
SECTION 8. RESTRICTED STOCK AWARDS.
A. Terms and Conditions.
The general terms and conditions of any Restricted Stock Award shall
be set forth in the applicable Agreement. Such Agreement shall specify the
number of shares of Common Stock subject to the Award, and the applicable
Restriction Period or Periods. Any such Agreement may (or, to the extent
Section 162(m) Relief is sought, shall) provide for forfeiture of shares
covered thereby if specified Performance Measures are not attained during a
Restriction Period and/or for termination of any Restriction Period upon
attainment of Performance Measures, but in no event may any such Agreement
permit termination of any Restriction Period earlier than three (3) years after
the date of grant of the pertinent Award.
B. Certificates Evidencing Ownership of Restricted Stock.
During the Restriction Period, a certificate representing the
Restricted Stock shall be registered in the recipient's name and bear a
restrictive legend to the effect that ownership of such Restricted Stock, and
the enjoyment of all rights appurtenant thereto, are subject to the
restrictions, terms, and conditions provided in the Plan and the applicable
Agreement.
Such certificate, the Restricted Stock certificate, shall be deposited
by the recipient with the Company, together with stock powers or other
instruments of assignment, each endorsed in blank, which will permit transfer
to the Company of all or any portion of the Restricted Stock evidenced by the
Restricted Stock certificate in the event it is forfeited. Upon the
termination of an applicable Restriction Period, and subject to remittance of
applicable withholding tax, a certificate or certificates evidencing ownership
of the number of shares of Common Stock theretofore evidenced by the Restricted
Stock certificate, free of restrictive legend (other than any relating to a
right of first refusal of the Company or required by any applicable securities
laws), shall be issued to the Employee, his or her Beneficiary(ies), or Legal
Representative, promptly after the expiration of the Restriction period.
C. Rights With Respect to Shares During Restriction Period.
Subject to the terms and conditions of the Agreement governing a
particular Restricted Stock Award, the Employee, as the owner of the Common
Stock issued as Restricted Stock, shall have all rights of a shareholder,
including, but not limited to, voting rights, the right to receive cash or
stock dividends thereon, and the right to participate in any capital adjustment
of the Company. The Committee may, at the time of grant and otherwise in its
sole discretion, provide for the deferral of the
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<PAGE> 13
payment of cash dividends otherwise payable until the expiration of the
applicable Restriction Period. Any distributions with respect to shares of
Restricted Stock other than in the form of cash shall be held by the Company,
and shall be subject to the same restrictions as the shares with respect to
which such distributions were made.
D. Reduction of Length of Restriction Period.
The Committee may, at any time, reduce the length of the Restriction
Period with respect to any shares comprising a Restricted Stock Award;
provided, however, that subject to the provisions of Section 13(J) hereof, in
no event shall such Restriction Period be less than three (3) years from the
date of grant of the Restricted Stock Award.
E. Effect of Termination of Employment by Recipient During
Restriction Period.
In the event the employment with Rouge Steel Company of a recipient of
a Restricted Stock Award shall terminate during the Restriction Period by
reason of death or Disability, the restrictions with respect to the shares
comprising such Award shall lapse, unless otherwise determined by the
Committee.
In the event the employment with Rouge Steel Company of a recipient of
a Restricted Stock Award shall terminate during the Restriction Period by
reason of the recipient's Retirement, or for any other reason other than death
or Disability, the shares comprising the Award shall be forfeited by such
Employee, unless otherwise determined by the Committee.
SECTION 9. PERFORMANCE SHARE AWARDS.
A. Terms and Conditions.
The general terms and conditions of any Performance Share Award shall
be set forth in the applicable Agreement. Such Agreement shall specify the
number of Performance Shares subject to the Award, the Performance Period(s)
and the Performance Measures applicable to the Award.
B. Following the end of a Performance Period applicable to a
granted Award, the Committee will determine the extent (if any) to which
Performance Measures established for the Award were attained and, accordingly,
the consideration (if any) to which the holder of the Award becomes entitled.
The Committee may, in its sole discretion, determine that such holder will be
entitled to less than the maximum permitted consideration pursuant to such
Award; provided, that the Committee has reserved unto itself this flexibility
at the time of grant. The Committee shall, where required for Section 162(m)
Relief and Section 162(m) Relief is sought, certify in writing, prior to
payment of the consideration, that the Performance Measures were in fact
satisfied.
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<PAGE> 14
C. Payment.
The Committee shall determine, in its sole discretion (taking into
account, without limitation, Section 16 of the Exchange Act), the manner of
payment upon attainment of Performance Measures during a Performance Period,
which may include (i) cash equal to the Fair Market Value (as of the end of the
Performance Period) of the Performance Shares, (ii) delivery of the Performance
Shares subject to the Performance Share Award, without restrictions, or subject
to any restrictions the Committee may impose, or (iii) a combination of cash
and Performance Shares. Payment to the recipient shall be subject to any
applicable withholding tax.
If, following the completion of a Performance Period, it is the
determination of the Committee that Performance Shares be delivered to the
Employee in the form of shares of Restricted Stock, the recipient must execute
a Restricted Stock Agreement as a condition of the issuance of such shares in
his or her name.
D. Effect of Termination of Employment During Performance
Period.
An Employee must be employed by Rouge Steel Company at the end of a
Performance Period to be entitled to settlement of the Performance Share Award
for such Period; provided, however, that in the event of an Employee's
termination of employment before the end of such Period, the Committee may, in
its sole discretion, limit any forfeiture in any manner it deems appropriate,
to the extent that, in its sole discretion, it determines doing so would be
equitable or in the best interests of the Company.
SECTION 10. WITHHOLDING TAXES.
The Company will, if required by applicable law, cause to be withheld
Federal, state and/or local taxes in connection with the exercise, vesting or
settlement of an Award. Unless otherwise provided in the applicable Agreement,
each Employee may satisfy any such tax withholding obligation by any of the
following means, or by a combination of such means: (i) a cash payment; (ii) by
delivery to the Company or Rouge Steel Company a number of shares of Common
Stock having a Fair Market Value, as of the Tax Withholding Date, sufficient to
satisfy the amount of the withholding tax obligation arising from an exercise,
vesting or settlement of an Award; (iii) if permitted in the sole discretion of
the Committee (taking into account, without limitation, Section 16 of the
Exchange Act), by authorizing the withholding from the shares of Common Stock
otherwise issuable to the Employee pursuant to the exercise or vesting of an
Award, a number of shares having a Fair Market Value, as of the Tax Withholding
Date, which will satisfy the amount of the withholding tax obligation; or (iv)
by a combination of such methods of payment. If the amount requested is not
paid, the Company may refuse to satisfy the Award.
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SECTION 11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION.
In the event of any change in the outstanding Common Stock by reason
of any stock split, stock dividend, recapitalization, merger, consolidation,
reorganization, combination, or exchange of shares, split-up, split-off,
spin-off, spin-away, liquidation or other similar change in capitalization, or
any distribution to common stockholders other than cash dividends, the number
or kind of shares that may be issued under the Plan pursuant to Section 3, and
the number or kind of shares subject to any outstanding Award, shall be
automatically adjusted, and the Committee shall be authorized to make such
other equitable adjustment of any Award or shares issuable pursuant thereto, or
in any Performance Measures related to any Award, so that the proportionate
interest of the Employee shall be maintained as before the occurrence of such
event. Any such adjustment shall be conclusive and binding for all purposes of
the Plan.
SECTION 12. AMENDMENT AND TERMINATION.
Subject to the following sentences of this Section 12, the Board or
the Compensation Committee may at any time terminate, modify or amend the Plan
in such respects as it shall deem advisable; provided, that the Board or the
Compensation Committee may not make any amendment in the Plan that would, if
such amendment were not approved by the shareholders, cause the Plan to fail to
comply with (A) Section 16 of the Exchange Act (or Rule 16b-3), (B) any other
requirement of applicable law or regulation, or (C) the requirements for
Section 162(m) Relief to the extent Section 162(m) Relief is sought, unless and
until the approval of the shareholders is obtained. Under no circumstances,
without shareholder approval, may the Plan be amended or modified to permit the
exercise of an Option at less than the Exercise Price. The termination or any
modification or amendment of the Plan shall not, without the consent of the
Employee, adversely affect his or her rights under an Award previously granted,
unless required by applicable law.
SECTION 13. MISCELLANEOUS PROVISIONS.
A. No Employee or other person shall have any claim or right
to be granted an Award under the Plan.
B. Effective on and after March 6, 1997, and except for ISOs
and related Tandem SARs which shall not be transferrable other than by will or
the laws of descent and distribution, (i) an Employee's Options or SARs may be
transferred, in whole or in part, either directly or by operation of law or
otherwise only to immediate family members of the Employee sharing the same
household, a trust established for the benefit of the Employee or immediate
family members of the Employee sharing the same household, or partnership in
which the Employee and immediate family members sharing the same household are
the only partners, and in any event only to the extent such transfer effects
only a
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<PAGE> 16
change in the form of beneficial ownership without changing an Employee's
pecuniary interest in such Options or SARs under the Plan and is not the
exercise (except in accordance with the terms of the Plan) or conversion of a
derivative security, or deposit or withdrawal from a voting trust to the extent
exempt pursuant to Rule 16a-13 of the Securities and Exchange Commission, as
then in effect, or (ii) an Employee's rights and interests under the Plan or
with respect to any Option, SAR or Performance Share Award may be transferred
pursuant to a domestic relations order to the extent exempt pursuant to Rule
16a-12 of the Securities and Exchange Commission, as then in effect; provided
further, however, an Employee's rights and interests under the Plan or with
respect to Options, SARs, or Performance Share Awards shall not otherwise be
assigned or transferred in whole or in part, either directly or by operation of
law, or otherwise except in the event of Employee's death, by will or the laws
of descent and distribution (including, without limitation, by way of
execution, levy, garnishment, attachment, pledge, bankruptcy or in any other
manner). An Option or SAR (and any right to satisfy tax withholding
obligations, or to pay any portion of an Exercise Price, through withholding of
shares otherwise issuable pursuant to the exercise or vesting of an Award)
shall be exercisable, during an Employee's lifetime, only by such Employee, his
or her Beneficiary or his or her Legal Representative. Grant of any Option,
SAR or Performance Share Award shall not confer upon the grantee any rights of
a shareholder with respect to any shares subject to such Award.
C. The Plan, the grant, exercise, vesting and/or settlement
of Awards thereunder, and the obligations of the Company to satisfy Awards
shall be subject to all applicable Federal and state laws, rules and
regulations and to such approvals by any government or regulatory agency as may
be required, and the Committee may impose any additional restrictions with
respect to Awards in order to comply with any legal requirements applicable to
Awards or to qualify for any exemption it may deem appropriate.
D. The expenses of the Plan shall be borne by the Company.
E. By accepting an Award under the Plan, each Employee and
each Legal Representative or Beneficiary shall be conclusively deemed to have
indicated his or her acceptance and ratification of, and consent to, any action
taken under the Plan by the Company or the Board.
F. Nothing in the Plan, or in any Agreement entered into
pursuant to the Plan, shall confer on an Employee any right to continue in the
employ of the Company or Rouge Steel Company, or in any way affect the
Company's or Rouge Steel Company's right to terminate the Employee's employment
without prior notice at any time for any reason or for no reason.
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G. Participation in the Plan shall not affect an Employee's
eligibility to participate in any other benefit or incentive plan of the
Company or Rouge Steel Company. Awards under the Plan are not considered
earnings for purposes of the Rouge Steel Company Savings Plan for Salaried
Employees, the Rouge Steel Company Salaried Employee Retirement Plan, Rouge
Steel Company insurance or other employee benefit programs.
H. With respect to shares acquired upon the exercise of
Options or Stock Appreciation Rights and with respect to shares acquired by an
individual under a Restricted Stock Award, Performance Share Award, or
otherwise under the Plan, the Company may reserve a "right of first refusal" to
purchase any such shares at Fair Market Value from the holder thereof. If such
right is reserved, the holder, prior to any disposition of such shares of
Common Stock, shall be required to first notify the Corporate Secretary or Vice
President and Treasurer of the Company or such other officer as may be
designated by the Committee, in writing in such form as the Committee may
prescribe, of his or her intention to dispose of any such shares, and the
Company will advise the holder within five (5) days whether it intends to
purchase such shares, for this purpose. Fair Market Value shall be determined
as of the date next preceding the date that the Company notifies the holder of
its intention to purchase such shares. The Committee will designate an officer
to decide whether to accept or reject such right of first refusal. If the
Company does not exercise its right to purchase the shares within such period,
the holder may freely dispose of the shares following expiration of such
period.
I. A breach by the Employee, his or her Beneficiary(ies), or
Legal Representative, of any restrictions, terms or conditions provided in the
Plan, the Agreement, or otherwise established by the Committee with respect to
any Award will, unless waived in whole or in part by the Committee, cause a
forfeiture of such Award.
J. Except to the extent preempted by Federal law, the
provisions of this Plan shall be interpreted and construed in accordance with
the internal laws of the State of Michigan.
K. It is the intention that the Plan at all times fully
satisfy the provisions and conditions of Rule 16b-3 applicable to a Plan of
this type. Accordingly, anything herein to the contrary notwithstanding, to
the extent that Rule 16b-3 at any given time would require that decisions
concerning the selection of Employees who are or become subject to reporting
requirements of Section 16 of the Exchange Act ("Section 16 Reporting Persons")
to be granted Awards hereunder, the timing, amounts, and other terms of such
Awards, and the form of settlement of any such Awards be made only by the
Committee, all such decisions by the Committee shall be final and conclusive
and not subject to reversal or modification by the Board. Moreover,
irrespective of any rights or discretionary power which a Section 16 Reporting
Person holding a
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pertinent Award otherwise would possess hereunder or under the Agreement
evidencing such Award concerning the timing of exercise of a SAR, the manner of
paying the Exercise Price for an exercised Option, a request or election
concerning the form of settlement of a SAR, or the manner of satisfying tax
withholding objections arising with respect to any Award, the Section 16
Reporting Person shall be entitled to exercise such rights and discretion only
at such times and manner and under such other conditions as at the time are
contemplated by the applicable provisions of Rule 16b-3 and any attempt
otherwise to exercise such rights or discretion shall be void and of no effect.
Date: July 23, 1997 ROUGE INDUSTRIES, INC.
By: /s/ William E. Hornberger
---------------------------------------
William E. Hornberger
Its: Vice President, Employee
Relations and Public Affairs
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<PAGE> 1
EXHIBIT 10.33
ROUGE STEEL COMPANY
OUTSIDE DIRECTOR EQUITY PLAN
(AS AMENDED AND RESTATED EFFECTIVE JULY 30, 1997)
WHEREAS, Rouge Steel Company, a Delaware corporation, adopted the Rouge
Steel Company Outside Director Equity Plan (the "Plan") for the purpose of
promoting the long-term growth and profitability of Rouge Steel Company by
attracting and retaining non-employee directors of outstanding ability; and
WHEREAS, the Plan was last amended and restated by Resolution of its Board
of Directors, effective March 6, 1997, except as otherwise expressly provided
therein; and
WHEREAS, effective July 30, 1997, Rouge Steel Company will reorganize and
pursuant to the reorganization, Rouge Steel Company will become the wholly
owned subsidiary of Rouge Industries, Inc. (the "Reorganization"); and
WHEREAS, the common stock of Rouge Steel Company is to be exchanged on an
equal basis for the common stock of Rouge Industries, Inc. on the effective
date of the Reorganization; and
WHEREAS, Rouge Industries, Inc., pursuant to the Reorganization assumes
sponsorship of the Plan and desires to amend and restate the Plan to reflect
the Reorganization.
NOW, THEREFORE, in consideration of the premises, the Plan is hereby
amended and restated, effective July 30, 1997, except as otherwise expressly
provided therein, in its entirety as follows:
Section 1. Purpose.
The purpose of this Outside Director Equity Plan is to promote the
long-term growth and profitability of the Company by attracting and retaining
non-employee directors of outstanding ability. Accordingly, eligible outside
directors shall be granted Stock Awards under the Plan and shall have the
opportunity to elect to receive payment on all or a portion of their retainer
fees in the form of common stock of the Company. Ownership of the Company's
stock assists in the attraction and retention of qualified non-employee
directors and provides them with additional incentive to devote their best
efforts to pursue and sustain the
<PAGE> 2
Company's financial success through the achievement of corporate goals.
Section 2. Definitions.
A. "Beneficiary" shall mean (i) a transferee of an Eligible Director's
right, interests, and/or Stock Award under the Plan, subject to Section 10A of
the Plan, or (ii) the person, persons, trust or trusts designated by an
Eligible Director, or if no designation has been made, the person, persons,
trust or trusts entitled by will, any trust agreement or the laws of descent
and distribution, to receive the benefits specified under this Plan in the
event of an Eligible Director's death, and, if necessary, for purposes of any
Stock Award or Equity Fee Election, the term shall include the Eligible
Director's executor, administrator or personal representative.
B. "Board" shall mean the Board of Directors of the Company.
C. "Code" shall mean the Internal Revenue Code of 1986, as amended.
D. "Common Stock" shall mean shares of $0.01 par value Class A common
stock of the Company, subject to adjustment pursuant to Section 8.
E. "Company" shall mean (1) prior to 11:59 p.m., July 30, 1997, Rouge
Steel Company, a Delaware corporation, and (2) on and after 11:59 p.m., July
30, 1997, Rouge Industries, Inc., a Delaware corporation.
F. "Compensation Committee" shall mean the Compensation Committee of the
Board.
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<PAGE> 3
G. "Director Purchase Price" shall mean 100% of the Fair Market Value of
one share of Common Stock as of the Retainer Payment Date.
H. "Eligible Director" shall mean a member of the Board of Directors of
the Company who is not an employee of the Company, Rouge Steel Company, or an
affiliate of the Company (an "Outside Director"), except that an Eligible
Director who is an employee of an entity that is an affiliate of the Company or
Rouge Steel Company other than by virtue of Company or Rouge Steel Company
control of such entity shall participate herein if such director is otherwise
an Outside Director and participates in no equity-based plan (other than the
Plan) of the Company or any subsidiary thereof.
I. "Equity Fee Election" shall mean an irrevocable election, 6 months
prior to each Retainer Payment Date, to receive all or a portion of the
Retainer in the form of Common Stock.
J. "Equity Stock Grant" shall mean an award of Common Stock.
K. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
L. "Fair Market Value" shall mean the closing price of the Common Stock on
the New York Stock Exchange as reported on the Composite Tape, or if it is not
listed on the New York Stock Exchange, the closing price on the exchange on
which the Common Stock is then listed, or if not listed on any exchange, the
closing price reported on the NASDAQ National market System over-the-counter
market; if, however, there is no trading of the Common
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<PAGE> 4
Stock on the date in question, then the closing price of the Common Stock, as
so reported, on the last preceding date on which there was trading shall
instead be used to determine Fair Market Value. If Fair Market Value for any
date in question cannot be determined as hereinabove provided, Fair Market
Value shall be determined by the Plan Administrator by whatever method or means
the Plan Administrator, in the good faith exercise of its authority, at that
time shall deem appropriate.
M. "Legal Representative" shall mean the guardian or legal representative
of the Eligible Director who, upon the disability or incapacity of an Eligible
Director, shall have acquired on behalf of the Eligible Director, by legal
proceeding or otherwise, the right to exercise the Eligible Director's rights
and receive his or her benefits under the Plan.
N. "Option" shall mean the right, granted pursuant to this Plan, of a
holder to purchase shares of Common Stock at an Exercise Price and upon terms
specified by the Plan.
O. "Plan" shall mean the Rouge Steel Company Outside Director Equity Plan.
P. "Plan Administrator" shall mean the Compensation Committee so long as
it is composed solely of 2 or more Non-Employee Directors, as defined in Rule
16b-3, and if not so composed, it shall mean the Board.
Q. "Quarterly Return on Sales" shall mean, for each calendar quarter,
"Profits" (as defined in the Rouge Steel Company Profit Sharing Plan for
Salaried Employees (the "Profit Sharing
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<PAGE> 5
Plan")) for such calendar quarter as a percentage of "Sales" (as defined in the
Profit Sharing Plan) for such calendar quarter.
R. "Retainer" shall mean the amount paid, in quarterly installments, by
the Company to an Eligible Director as an annual retainer for services to be
rendered as a member of the Board during any fiscal year of the Company,
including retainers, meeting attendance fees and fees otherwise payable for
acting on or as a member of the Board or any committee thereof, but not
including reimbursements of expenses.
S. "Retainer Payment Date" shall mean the last day of the month
immediately following each calendar quarter (i.e., April 30, July 31, October
31 and January 31).
T. "Rule 16b-3" means Rule 16b-3 of the Securities and Exchange Commission
(or any successor regulation) as in effect with respect to the Company at a
given time.
U. "Stock Award" shall mean an Equity Stock Grant or an Option.
Section 3. Stock Subject to the Plan.
Shares of Common Stock granted under the Plan must be authorized and
issued shares of Common Stock. Subject to adjustment as provided in Section 8,
at any given time, the maximum number of shares of Common Stock which may be
issued pursuant to Stock Awards granted hereunder shall be 100,000 shares.
Section 4. Administration.
The Plan is intended to allow the Eligible Directors receiving Stock
Awards pursuant to it to be "Non-Employee
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<PAGE> 6
Directors" as defined in Rule 16b-3. The Plan shall be administered by the Plan
Administrator. In addition to any implied powers and duties that may be needed
to carry out the provisions of the Plan, the Plan Administrator shall have all
the powers vested in it by the terms of the Plan, including authority to
prescribe the forms of agreements hereunder. The Plan Administrator shall be
authorized to interpret the Plan, to establish, amend, and rescind any rules
and regulations relating to the Plan, to make any other determinations which it
believes necessary or advisable for administration of the Plan, and to correct
any defect or supply any omission or reconcile any inconsistency in the Plan or
in any Equity Stock Grant or Option grant in the manner and to the extent the
Plan Administrator deems desirable to carry it into effect.
All Plan Administrator determinations shall, unless otherwise determined
by the Board, be final, conclusive and binding on the Company, any Eligible
Director, Beneficiary, Legal Representative, and any other interested parties.
The Plan Administrator may authorize any one or more of its number, or any
officer of the Company, to execute and deliver documents on behalf of the Plan
Administrator.
Section 5. Eligibility.
All Eligible Directors shall receive Stock Awards and shall have the right
to make Equity Fee Elections pursuant to the terms of the Plan, as set forth
herein.
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<PAGE> 7
Section 6. Stock Awards.
A. Equity Stock Grants. Performance Formula. As of each Retainer Payment
Date, commencing April 30, 1995, each Eligible Director shall automatically
receive an Equity Stock Grant. The number of shares of Common Stock awarded
pursuant to an Equity Stock Grant shall be based on the Quarterly Return on
Sales for the most recently completed calendar quarter as follows:
Quarterly Return on Sales Number of Shares
------------------------- ----------------
0 to 2.3% 0
2.3 to 4.6% 83
4.6 to 6.9% 167
6.9% and above 250
B. Stock Options.
1. Type of Option. No Option shall be intended to qualify under Section
422 of the Code.
2. Awards of Options.
a. Initial Awards. If a person is elected, appointed or otherwise
becomes an Eligible Director on or prior to the date of the closing of
Rouge Steel Company's initial public offering of stock pursuant to the
registration statement filed by Rouge Steel Company with the Securities
and Exchange Commission (Registration No. 33-74698) (the "IPO"), then
such Eligible Director shall receive an Option to purchase shares of
Common Stock, pursuant to the formula set forth in Section 6.B.3 below,
on the date (the "IPO Pricing Date"), the per share offering price to the
public in connection with the IPO (the "IPO Price") is set; provided that
the IPO closes.
b. Subsequent Awards. As of the date of each of the Company's
annual meeting of the stockholders (the "Annual Meeting") after the IPO,
each Eligible Director shall automatically receive an Option to purchase
shares of Common Stock, pursuant to the formula set forth in Section
6.B.3 below; provided, however, that if a person is elected, appointed or
otherwise becomes an Eligible Director during the 60-day period prior to
the Annual Meeting in any year, then such Eligible Director shall not
receive any Options with respect to that Annual Meeting; and, provided,
further, that each Eligible Director receiving Options with respect to
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<PAGE> 8
an Annual Meeting continues to serve as a director of the Company after
such Annual Meeting.
3. Performance Formula. The number of shares of Common Stock
issuable pursuant to an Option shall be based on the Annual Return on
Sales (as defined below) as follows:
Annual Return on Sales Number of Shares
---------------------- ----------------
0 to 2.3% 0
2.3 to 4.6% 500
4.6 to 6.9% 1,000
6.9% and above 1,500
"Annual Return on Sales" shall mean, for the most recently completed
calendar year prior to the date of the award, Profits for such calendar year as
a percentage of Sales for such calendar year.
C. Exercise of Options.
1. Exercisability. Except as set forth in this Section 6, 25% of the
total number of the shares of Common Stock subject to an Option granted to an
Eligible Director shall first become exercisable on the date the Option is
granted and 25% on each succeeding December 31. The right to purchase shares
of Common Stock with respect to shares which have become exercisable shall be
cumulative during the term of the Option. An Option may be exercised by an
Eligible Director during the period that the Eligible Director remains a member
of the Board and for a period of five (5) years following retirement; provided,
that only those Options exercisable at the date of the Eligible Director's
retirement may be exercised during the period following retirement unless the
Plan Administrator determines all Options may be so exercised; and, provided,
further, that in no event shall the
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<PAGE> 9
Option be exercisable more than 10 years after the date of grant. In the event
of the death of an Eligible Director, the Option shall be exercisable only
within the 12 months next succeeding the date of death, and then only by the
Eligible Director's Beneficiary if and to the extent that the Eligible Director
was entitled to exercise the Option at the date of the Eligible Director's
death unless the Plan Administrator determines all Options may be so exercised;
provided, that in no event shall the Option be exercisable more than 10 years
after the date of grant.
2. Exercise Price. The Exercise Price shall be 100% of the Fair Market
Value of the Common Stock subject to an Option on the date the Option is
granted; provided, however, that the per share purchase price of Common Stock
subject to Options granted on the IPO Pricing Date shall be the IPO Price.
3. Manner of Exercise. The specified number of shares with respect to
which an Option is exercised will, subject to applicable tax withholding, if
any, be issued following receipt by the Company of (i) written notice of such
exercise from the Option holder (in such form as the Plan Administrator shall
have specified) of an Option delivered to the Corporate Secretary or the Vice
President and Treasurer of the Company, and (ii) payment to the Company, as
provided herein, of the Exercise Price.
4. Payment for Shares. The Exercise Price for the number of shares of
Common Stock with respect to which an Option is exercised shall be paid in full
when the Option is exercised. The Exercise Price may be paid, in whole or in
part, in (i) cash; (ii) whole shares of Common Stock, valued at their then Fair
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<PAGE> 10
Market Value; (iii) pursuant to an election prior to or coincidental with such
exercise to satisfy the Exercise Price through the withholding of shares
issuable upon exercise of the Option and valued at their then Fair Market
Value; or (iv) by a combination of such methods of payment. The Company may
enter into any arrangement permitted under applicable laws (but only to the
extent permitted under Rule 16b-3) to facilitate the "cashless" exercise of any
Option.
Section 7. Election to Receive Retainer in the Form of Common Stock.
A. An Eligible Director shall have the right to make an Equity Fee
Election. Such Equity Fee Election must set forth a percentage, up to 100%, of
such Retainer which shall be paid in the form of Common Stock. In the event
the Retainer of an Eligible Director is increased subsequent to the Equity Fee
Election, such election shall apply to the amount of such increase.
B. On the Retainer Payment Date, the Director will receive the number of
shares of Common Stock equal to (i) the portion of the Retainer specified in
the Equity Fee Election divided by (ii) the Director Purchase Price.
Section 8. Adjustments Upon Changes in Capitalization.
In the event of any change in the outstanding Common Stock by reason of
any stock split, stock dividend, recapitalization, merger, consolidation,
reorganization, combination, or exchange of shares, split-up, split-off,
spin-off, spin-away, liquidation or other similar change in capitalization, or
any distribution to
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<PAGE> 11
common stockholders other than cash dividends, the number or kind of shares
that may be issued under the Plan pursuant to Section 3 shall be automatically
adjusted, and the Plan Administrator shall be authorized to make such other
equitable adjustment of any Stock Award or shares issuable pursuant thereto, so
that the proportionate interest of the Eligible Director shall be maintained as
before the occurrence of such event. Any such adjustment shall be conclusive
and binding for all purposes of the Plan.
Section 9. Amendment and Termination.
The Board or the Plan Administrator may at any time terminate, suspend,
modify or amend the Plan in such respects as it shall deem advisable; provided,
that the Board or Plan Administrator may not make any amendment to the Plan
that would, if such amendment were not approved by the shareholders, cause the
Plan to fail to comply with Section 16 of the Exchange Act (or Rule 16b-3) or
any other requirement of applicable law or regulation, unless and until the
approval of the shareholders is obtained. Notwithstanding the foregoing, the
provisions of the Plan with respect to eligibility for participation or the
timing or amounts of grants of Stock Awards shall not be amended more than once
every 6 months (other than to comport with changes in the Code or the Employee
Retirement Income Security Act of 1974, as amended, or the regulations
thereunder). The termination or any modification or amendment of the Plan
shall not, without the consent of the Eligible Directors, adversely affect
their rights
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<PAGE> 12
under Stock Awards previously granted, unless required by applicable law.
Section 10. Miscellaneous Provisions.
A. (i) an Eligible Director's Options may be transferred in whole or in
part, either directly or by operation of law or otherwise only to immediate
family members of the Eligible Director sharing the same household, a trust
established for the benefit of the Eligible Director or immediate family
members of the Eligible Director sharing the same household, or partnership in
which the Eligible Director and immediate family members sharing the same
household are the only partners, and in any event only to the extent any such
transfer effects only a change in the form of beneficial ownership without
changing an Eligible Director's pecuniary interest in such Options under the
Plan and is not the exercise (except in accordance with the terms of the Plan)
or conversion of a derivative security, or deposit or withdrawal from a voting
trust, to the extent exempt pursuant to Rule 16a-13 of the Securities and
Exchange Commission, as then in effect, or (ii) an Eligible Director's rights
and interests under the Plan, or with respect to any Stock Award, may be
transferred pursuant to a domestic relations order to the extent exempt
pursuant to Rule 16a-12 of the Securities and Exchange Commission, as then in
effect; provided further, however, an Eligible Director's rights, interests and
Stock Awards under the Plan shall not otherwise be assigned or transferred in
whole or in part, either directly or by operation of law or otherwise, except
in the event of an Eligible Director's death, by will or the laws of
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<PAGE> 13
descent and distribution (including, without limitation, by way of execution,
levy, garnishment, attachment, pledge, bankruptcy or in any other manner), or
until, with respect to any Stock Award, the applicable common stock is
transferred as provided hereunder.
B. The Plan, grant of Stock Awards and Equity Fee Elections thereunder,
and the obligation of the Company to satisfy Stock Awards and Equity Fee
Elections shall be subject to all applicable Federal and state laws, rules and
regulations, and to such approvals by any government or regulatory agency as
may be required; and the Plan Administrator may impose any additional
restrictions with respect to Stock Awards or Equity Fee Elections in order to
comply with any legal requirements applicable to Stock Awards or Equity Fee
Elections or to qualify for any exemption it may deem appropriate.
C. To the extent (if any) required by applicable law, Federal, state
and/or local taxes shall be withheld in connection with the grant of a Stock
Award or Equity Fee Election.
D. The expenses of the Plan shall be borne by the Company.
E. By accepting a Stock Award or making an Equity Fee Election under the
Plan, each Eligible Director and each Legal Representative or Beneficiary shall
be conclusively deemed to have indicated his or her acceptance and ratification
of, and consent to, any action taken under the Plan by the Company or the
Board.
F. Nothing in the Plan shall confer on an Eligible Director any right to
continue as a member of the Board,or in any way affect any right to terminate
the Eligible Director's membership on the Board under applicable law.
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<PAGE> 14
G. Participation in the Plan shall not affect an Eligible Director's
eligibility to participate in any other benefit or incentive plan of the
Company or Rouge Steel Company. Options under the Plan are not considered
earnings for purposes of any Rouge Steel Company-sponsored savings plan, Rouge
Steel Company-sponsored retirement plan, insurance or other employee benefit
programs.
H. A breach by an Eligible Director, his or her Beneficiary(ies) or Legal
Representative, of any restrictions, terms or conditions provided in the Plan
or otherwise established by the Plan Administrator with respect to any Stock
Award or Equity Fee Election will, unless waived in whole or in part by the
Plan Administrator, cause a forfeiture of such Stock Award or cause such Equity
Fee Election to be void and of no effect.
I. Except to the extent preempted by Federal law, the provisions of this
Plan shall be interpreted and construed in accordance with the laws of the
State of Michigan.
J. It is the intention that the Plan at all times fully satisfy the
provisions and conditions of Rule 16b-3 applicable to a plan of this type.
Accordingly, irrespective of any rights or discretionary power which an
Eligible Director who is or becomes subject to the reporting requirements of
Section 16 of the Exchange Act (a "Section 16 Reporting Person") holding a
pertinent Stock Award or making an Equity Fee Election otherwise would possess
hereunder evidencing a Stock Award or Equity Fee Election, a Section 16
Reporting Person shall be entitled to exercise such rights and discretion only
at such times and manner and under such
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<PAGE> 15
other conditions as at the time are contemplated by the applicable provisions
of Rule 16b-3 and any attempt otherwise to exercise such rights or discretion
shall be void and of no effect.
Date: July 23, 1997 ROUGE INDUSTRIES, INC.
By: /s/ William E. Hornberger
----------------------------------
William E. Hornberger
Its: Vice President, Employee
Relations and Public Affairs
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<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF THE REGISTRANT
Name of Subsidiary State of Incorporation
- ------------------ ----------------------
Rouge Steel Company Delaware
QS Steel Inc. Michigan
Eveleth Mines LLC Minnesota
