As filed with the Securities and Exchange Commission on March 5, 1998
Registration No. 333-43867
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
Amendment No. 1 to
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------------
WHEELING-PITTSBURGH CORPORATION
WHEELING-PITTSBURGH STEEL CORPORATION
CONSUMERS MINING CORPORATION
WHEELING-EMPIRE COMPANY
MINGO OXYGEN COMPANY
PITTSBURGH-CANFIELD COMPANY
WHEELING CONSTRUCTION PRODUCTS, INC.
WP STEEL VENTURE CORPORATION
CHAMPION METAL PRODUCTS, INC.
(Exact name of Registrants as specified in their charters)
Delaware 3312 55-0309927
Delaware (Primary Standard Industrial Classification 55-0703273
Pennsylvania Code Number) 55-0149670
Delaware 25-1450838
Ohio 55-6018996
Pennsylvania 34-1016803
Delaware 55-0721401
Delaware 55-0737095
Delaware 55-0754536
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Wheeling-Pittsburgh Corporation
1134 Market Street
Wheeling, West Virginia 26003
(304) 234-2400
(Address and telephone number of registrants' principal executive offices)
------------------------------------
John R. Scheessele
Wheeling-Pittsburgh Corporation
1134 Market Street
Wheeling, West Virginia 26003
(304) 234-2424
(Name, address and telephone number of agent for service for registrants)
------------------------------------
Copy to:
Steven Wolosky, Esq.
Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, New York 10022
(212) 753-7200
------------------------------------
Approximate date of commencement of proposed exchange offer: As soon as
practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
<PAGE>
------------------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================================================
Title of Each Class of Amount to be Proposed Maximum Proposed Maximum Amount of
Securities to be Registered Registered Offering Price Per Note Aggregate Offering Price Registration Fee
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
9 1/4% Senior Exchange Notes Due 2007(1) $275,000,000 $1,000 $275,000,000 $83,333.33(1)
- -----------------------------------------------------------------------------------------------------------------------------------
Wheeling-Pittsburgh Steel Corporation -- -- -- --
Guarantee of 9 1/4% Senior Exchange Notes due 2007
(2)
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Consumers Mining Corporation -- -- -- --
Guarantee of 9 1/4% Senior Exchange Notes due 2007 (2)
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Wheeling-Empire Company -- -- -- --
Guarantee of 9 1/4% Senior Exchange Notes due 2007 (2)
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Mingo Oxygen Company -- -- -- --
Guarantee of 9 1/4% Senior Exchange Notes due 2007 (2)
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Pittsburgh-Canfield Company -- -- -- --
Guarantee of 9 1/4% Senior Exchange Notes due 2007 (2)
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Wheeling Construction Products, Inc. -- -- -- --
Guarantee of 9 1/4% Senior Exchange Notes due 2007 (2)
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WP Steel Venture Corporation -- -- -- --
Guarantee of 9 1/4% Senior Exchange Notes due 2007 (2)
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Champion Metal Products, Inc. -- -- -- --
Guarantee of 9 1/4% Senior Exchange Notes due 2007 (2)
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Total $83,333.33(1)
===================================================================================================================================
</TABLE>
(1) Such fee was paid with the initial filing of the Registration Statement.
(2) No additional consideration is to be received for the guarantee.
The registrants hereby amend this Registration Statement on such date
or dates as may be necessary to delay its effective date until the registrants
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to buy nor shall there
be any sale of these securities in any state in which such offer, solicitation
or sale would be unlawful prior to registration or qualification under the
securities laws of any such state.
Prospectus (Subject to Completion)
Dated March 5, 1998
OFFER TO EXCHANGE
9 1/4% Senior Exchange Notes Due 2007
for
all outstanding
9 1/4% Senior Notes Due 2007
($275,000,000 aggregate principal amount outstanding)
of
WHEELING-PITTSBURGH CORPORATION
which are unconditionally and irrevocably guaranteed by all
of the present and future operating subsidiaries
of Wheeling-Pittsburgh Corporation, consisting of
Wheeling-Pittsburgh Steel Corporation
Consumers Mining Corporation
Wheeling-Empire Company
Mingo Oxygen Company
Pittsburgh-Canfield Company
Wheeling Construction Products, Inc.
WP Steel Venture Corporation
Champion Metal Products, Inc.
THE EXCHANGE OFFER
WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME
ON __________ __, 1998, UNLESS EXTENDED
--------------
See "Risk Factors" immediately following the Prospectus Summary for a
discussion of certain information that should be considered in connection with
the Exchange Offer and an investment in the New Notes.
If any holder of Old Notes is an affiliate of the Company, is engaged
in or intends to engage in or has any arrangement or understanding with any
person to participate in the distribution of the New Notes to be acquired in the
Exchange Offer, such holder (i) could not rely on the applicable interpretations
of the Commission and (ii) must comply with the registration requirements of the
Securities Act in connection with any resale transaction.
--------------
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR BY ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
--------------
The date of this Prospectus is _________, 1998
(Continued on next page)
<PAGE>
(Cover page continued)
Wheeling-Pittsburgh Corporation, a Delaware corporation (the
"Company"), hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and the accompanying Letter of Transmittal (the
"Exchange Offer"), to exchange $1,000 principal amount of its 9 1/4% Senior
Exchange Notes Due 2007 (the "New Notes") for each $1,000 principal amount of
its outstanding 9 1/4% Senior Notes Due 2007 (the "Old Notes"). The offer and
sale of the New Notes have been registered under the Securities Act of 1933, as
amended (the "Securities Act"), pursuant to the Registration Statement (as
defined herein) of which this Prospectus constitutes a part. As of March __,
1998, $275,000,000 aggregate principal amount of the Old Notes was outstanding.
The Exchange Offer is being made pursuant to the terms of the registration
rights agreement (the "Registration Rights Agreement") dated November 20, 1997,
by and between the Company, Donaldson, Lufkin & Jenrette Securities Corporation
("Donaldson, Lufkin & Jenrette") and Citicorp Securities, Inc. ("Citicorp,"
together with Donaldson, Lufkin & Jenrette, the "Initial Purchasers"), pursuant
to the terms of the Purchase Agreement dated November 20, 1997, by and between
the Company and the Initial Purchasers. The New Notes and the Old Notes are
collectively referred to herein as the "Notes." As used herein, the term
"Holder" means a holder of the Notes.
The Notes are senior unsecured obligations of the Company. The Notes
are unconditionally and irrevocably guaranteed (the "Subsidiary Guarantees") by
all of the Company's present and future operating subsidiaries (the
"Guarantors"). The Subsidiary Guarantees rank pari passu in right of payment to
all existing and future senior indebtedness of the Guarantors. The Notes will be
effectively junior to secured indebtedness of the Company and its subsidiaries,
including borrowings under the Revolving Credit Facility (as defined), to the
extent of the assets securing such indebtedness. At December 31, 1997, the Notes
were subordinated to the $90.9 million of secured indebtedness of the Company
and its subsidiaries and the Notes were pari passu with $75.0 million of
borrowings under the Term Loan Agreement (as defined).
The Company will accept for exchange any and all Old Notes that are
validly tendered and not withdrawn on or prior to 5:00 p.m., New York City time,
on the date the Exchange Offer expires, which will be __________ __, 1998 [20
BUSINESS DAYS AFTER COMMENCEMENT OF THE EXCHANGE OFFER], unless the Exchange
Offer is extended (the "Expiration Date"). Tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date. The
Exchange Offer is not conditioned upon any aggregate minimum principal amount of
Old Notes being tendered for exchange. However, the Exchange Offer is subject to
certain conditions, which may be waived by the Company, and to the terms and
provisions of the Registration Rights Agreement. Old Notes may be tendered only
in denominations of $1,000 aggregate principal amount and integral multiples
thereof. The Company has agreed to pay the expenses of the Exchange Offer. See
"The Exchange Offer."
Any waiver, extension or termination of the Exchange Offer will be
publicly announced by the Company through a release to the Dow Jones News
Service and as otherwise required by applicable law or regulations.
The Notes were issued in a private placement (the "November Offering")
under an indenture (the "Indenture"), dated as of November 26, 1997, by and
among the Company and Bank One Trust Company, N.A. (in such capacity, the
"Trustee"). The New Notes will be obligations of the Company and are entitled to
the benefits of the Indenture, including the accrual of interest from the time
of their issuance. The net proceeds of the November Offering, together with the
borrowings under the Term Loan Agreement, were used to defease the Company's 9
3/8% Senior Notes due 2003 (the "9 3/8% Notes") pursuant to the terms of the
indenture under which the 9 3/8% Notes were issued and to reduce outstanding
borrowings under the Revolving Credit Facility.
The form and terms of the New Notes are identical in all material
respects to the form and terms of the Old Notes, except that the offer and sale
of the New Notes have been registered under the Securities Act. Any Old Notes
not tendered and accepted in the Exchange Offer will remain outstanding and will
be entitled to all the rights and preferences and will be subject to the
limitations applicable thereto under the Indenture. Following consummation of
the Exchange Offer, the Holders of Old Notes will continue to be subject to the
existing restrictions upon transfer thereof and the Company will have no further
obligation to such Holders to provide for the registration under the Securities
Act of the offer and sale of the Old Notes held by them. Following the
<PAGE>
completion of the Exchange Offer, none of the Notes will be entitled to the
contingent increase in interest rate provided pursuant to the Registration
Rights Agreement. See "The Exchange Offer."
The Notes will mature on November 15, 2007. Interest on the Notes will
be paid in cash at a rate of 9 1/4% per annum on each May 15 and November 15,
commencing May 15, 1998.
The Notes will be redeemable at the option of the Company whole or in
part, on or after November 15, 2002, initially at 104.625% of their principal
amount, plus accrued and unpaid interest, declining to 100% of their principal
amount, plus accrued and unpaid interest on or after November 15, 2005. In
addition, upon a Change of Control (as hereinafter defined), the Company will be
required to make an offer to purchase the Notes at a purchase price equal to
101% of their principal amount plus accrued and unpaid interest and liquidated
damages, if any. See "Description the New Notes -- Mandatory Redemption," "--
Optional Redemption," and "-- Repurchase at the Option of Holders."
Based on no-action letters issued by the staff of the Securities and
Exchange Commission (the "Commission") to third parties, the Company believes
that New Notes issued pursuant to this Exchange Offer in exchange for Old Notes
may be offered for resale, resold and otherwise transferred by a Holder thereof
other than (i) a broker-dealer who purchased such Old Notes directly from the
Company to resell pursuant to Rule 144A or any other available exemption under
the Securities Act or (ii) a person that is an "affiliate" (within the meaning
of Rule 405 of the Securities Act) of the Company, without compliance with the
registration and prospectus delivery provisions of the Securities Act, provided
that the Holder is acquiring the New Notes in the ordinary course of its
business and is not participating, and has no arrangement or understanding with
any person to participate, in the distribution of the New Notes. Holders of Old
Notes who tender in the Exchange Offer with the intention to participate in a
distribution of the New Notes may not rely upon the position of the staff of the
Commission enunciated in the above-referenced no-action letters, and, in the
absence of an exemption, must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with a secondary
resale transaction. Holders of Old Notes wishing to participate in the Exchange
Offer must represent to the Company in the Letter of Transmittal that such
conditions have been met.
Each broker-dealer (other than an "affiliate" of the Company) that
receives New Notes for its own account pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in connection with any resale of
such New Notes. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an "underwriter" within the meaning of the Securities Act. This Prospectus, as
it may be amended or supplemented from time to time, may be used by a
broker-dealer in connection with resales of New Notes received in exchange for
Old Notes where such Old Notes were acquired by such broker-dealer as a result
of market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the consummation of the Exchange Offer, it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution." Any broker-dealer who is an
affiliate of the Company may not rely on such no-action letters and must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with a secondary resale transaction.
The New Notes constitute a new issue of securities with no established
trading market.
This Prospectus, together with the Letter of Transmittal, is being sent
to all registered Holders of Old Notes as of _____________ __, 1998.
The Company will not receive any proceeds from the Exchange Offer. No
dealer-manager is being used in connection with this Exchange Offer. See "Use of
Proceeds" and "Plan of Distribution."
No person has been authorized to give any information or to make any
representations in connection with the Exchange Offer other than those contained
in this Prospectus and the Letter of Transmittal and, if given or made, such
information or representation must not be relied upon as having been authorized
by the Company or the Exchange Agent (as defined herein). This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy the New
Notes in any jurisdiction to any person to whom it is unlawful to make such
offer or
<PAGE>
solicitation in such jurisdiction. The delivery of this Prospectus shall not,
under any circumstances, create any implication that the information herein is
correct at any time subsequent to its date.
---------------------------
TABLE OF CONTENTS
Page
----
AVAILABLE INFORMATION....................................................2
PROSPECTUS SUMMARY.......................................................4
THE EXCHANGE OFFER..................................................... 23
USE OF PROCEEDS........................................................ 29
PLAN OF DISTRIBUTION....................................................93
BUSINESS............................................................... 39
DESCRIPTION OF PRINCIPAL
INDEBTEDNESS .......................................................... 62
DESCRIPTION OF THE NEW NOTES........................................... 64
CERTAIN U.S. FEDERAL INCOME TAX
CONSEQUENCES........................................................... 89
PLAN OF DISTRIBUTION................................................... 93
LEGAL MATTERS.......................................................... 93
EXPERTS................................................................ 93
INDEX TO FINANCIAL STATEMENTS..........................................F-1
<PAGE>
---------------------------
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement on
Form S-4 under the Securities Act with respect to the New Notes offered in the
Exchange Offer. For the purposes hereof, the term "Registration Statement" means
the original Registration Statement and any and all amendments thereto. In
accordance with the rules and regulations of the Commission, this Prospectus
does not contain all of the information set forth in the Registration Statement
and the schedules and exhibits thereto. Each statement made in this Prospectus
concerning a document filed as an exhibit to the Registration Statement is
qualified in its entirety by reference to such exhibit for a complete statement
of its provisions, although all material terms of such documents are set forth
herein. For further information pertaining to the Company and the New Notes
offered in the Exchange Offer, reference is made to such Registration Statement,
including the exhibits and schedules thereto and the financial statements, notes
and schedules filed as a part thereof. The Registration Statement (and the
exhibits and schedules thereto) may be inspected and copied at the public
reference facilities maintained by the Commission at its principal office at
Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, or
at its regional offices at 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661 and at Seven World Trade Center, Suite 1300, New York, New York
10048. Any interested party may obtain copies of all or any portion of the
Registration Statement and the exhibits thereto at prescribed rates from the
Public Reference Section of the Commission at its principal office at Judiciary
Plaza, 450 Fifth Street, Room 1024, Washington, D.C. 20549. In addition,
registration statements and other filings made with the Commission through its
Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system are publicly
available through the Commission's site on the Internet's World Wide Web,
located at http://www.sec.gov.
Upon effectiveness of this Registration Statement the Company and each
of the Subsidiary Guarantors will be subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith file reports and other information with the Commission.
Such reports and other information can be inspected and copied at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549; 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661; and Seven World Trade Center, Suite 1300, New York, New
York 10048. Copies of such material can be obtained from the Public Reference
Section of the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates.
The Indenture requires the Company to file with the Commission the
annual, quarterly and other reports required by Sections 13(a) and 15(d) of the
Exchange Act. The Company will supply without cost to each Holder of Notes, and
file with the Trustee under the Indenture, copies of the audited financial
statements, quarterly reports and other reports that the Company is required to
file with the Commission pursuant to Sections 13(a) and 15(d) of the Exchange
Act.
----------------------------------
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer made hereby, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company. This Prospectus does not constitute an offer to sell, or a
solicitation of an offer to buy, the securities offered hereby to any person in
any state or other jurisdiction in which such offer or solicitation is unlawful.
The delivery of this Prospectus at any time does not imply that information
contained herein is correct as of any time subsequent to its date.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE COMPANY ACCEPT SURRENDERS
FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN WHICH THE
EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE
SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
-2-
<PAGE>
This Prospectus incorporates documents by reference which are not
presented herein or delivered herewith. These documents are available upon
request from the Company at 1134 Market Street, Wheeling, West Virginia 26003,
Attention: Vice President, Assistant Secretary and Treasurer, (304) 234-2460. In
order to ensure timely delivery of the documents, any request should be made
________, 1998 [five business days prior to the date on which the final
investment decision must be made].
-3-
<PAGE>
PROSPECTUS SUMMARY
The following is qualified in its entirety by reference to, and should
be read in conjunction with, the more detailed information and consolidated
financial statements (including notes thereto) appearing elsewhere in this
Prospectus. All references to operating and financial data and other information
of Wheeling-Pittsburgh Corporation ("WPC," and together with its consolidated
subsidiaries, the "Company") for the years ended December 31, 1996 and 1997,
respectively, reflect the adverse impact of a ten-month strike against the
Company which commenced October 1, 1996 and was settled August 12, 1997 (the
"Strike").
The Company
General
The Company is a vertically integrated manufacturer of predominantly
value-added flat rolled steel products. The Company sells a broad array of
value-added products, including cold rolled steel, tin- and zinc-coated steels
and fabricated steel products. The Company's products are sold to steel service
centers, converters, processors, the construction industry, and the container,
automotive and appliance industries. During 1997 , the Company had revenues of
approximately $489.7 million on shipments of approximately 850.5 thousand tons
of steel and an operating loss of $287.1 million. These results reflect the
effects of the Strike.
The Company believes that it is one of the low cost domestic flat
rolled steel producers. The Company's low cost structure is the result of: (i)
the restructuring of its work rules and manning requirements under its new
five-year collective bargaining agreement (the "New Labor Agreement") with the
United Steelworkers of America ("USWA"), which settled the Company's ten-month
Strike in August 1997; (ii) the strategic balance between its basic steel
operations and its finishing and fabricating facilities; and (iii) its efficient
production of low cost, high quality metallurgical coke.
The new work rule package affords the Company substantially greater
flexibility in down-sizing its overall workforce and assigning and scheduling
work, thereby reducing costs and increasing efficiency. Furthermore, the Company
expects to maintain pre-Strike steel production levels with 850 fewer employees
(a reduction of approximately 20% in its hourly workforce). Finally, the Company
believes the five year term provides the Company with a significant advantage
since a majority of the Company's integrated steel competitors have labor
contracts that will expire in 1999.
The Company has structured its operations so that its hot strip mill
and downstream operations have greater capacity than do its raw steel making
operations. The Company therefore can purchase slabs and ship at greater than
100% of its internal production capacity in periods of high demand, while
maintaining the ability to curtail such purchases and still operate its basic
steel facilities at or near capacity during periods of lower demand. The Company
believes this flexibility results in enhanced profitability throughout an
economic cycle. The Company also believes that it produces metallurgical coke at
a substantially lower cost than do other coke manufacturers because of its
proximity to high quality coal reserves and its efficient coke producing plant.
This reduces the Company's costs and, if coke demand remains high, allows the
Company to sell coke profitably in the spot and contract markets.
The Company conducts its operations primarily through two business
units, the Steel Division and Wheeling Corrugating Company ("Wheeling
Corrugating"). The Steel Division sells flat rolled steel products such as hot
rolled, cold rolled, coated and tin mill steel to third parties, and cold rolled
and coated steel substrate to Wheeling Corrugating. Wheeling Corrugating, the
Company's primary downstream operation, is a fabricator of roll-formed products
primarily for the construction and agricultural industries. As part of the
Company's strategy to expand its downstream operations, the Company has acquired
several fabricating facilities in order to enhance profit margins and reduce
exposure to downturns in steel demand. Other important examples of the Company's
downstream operations are its joint venture interests in Wheeling-Nisshin, Inc.
("Wheeling-Nisshin") and Ohio Coatings Company ("OCC"). Wheeling-Nisshin, in
which the Company owns a 35.7% interest, produces and ships from its
state-of-the-art production facility a diverse line of galvanized, galvannealed,
galvalume and aluminized products, principally to steel service centers and the
construction and automotive industries. OCC, in which the Company owns a 50%
interest, operates a new tin coating facility that commenced commercial
production in January 1997. The Company has long-term contracts to supply up to
75% of Wheeling-Nisshin's steel requirements and almost
-4-
<PAGE>
100% of OCC's. These downstream operations and joint ventures are integral to
the Company's strategy of increasing shipments of higher value-added steel
products while decreasing dependence on hot rolled coils, a lower-margin
commodity steel product.
Subsidiary Guarantors
Wheeling-Pittsburgh Steel Corporation is the Company's wholly-owned
operating subsidiary and produces flat rolled steel products.
Consumers Mining Corporation holds royalty interests in coal deposits.
Wheeling-Empire Company holds a 12.5% ownership interest in the Empire
Iron Mining partnership, which operates an iron ore mine in Michigan.
Mingo Oxygen Company produces oxygen and other gasses for use in steel
making operations.
Pittsburgh-Canfield Company produces electrogalvanized steel products.
Wheeling Construction Products, Inc. produces fabricated steel
products.
WP Steel Venture Corporation holds the Company's 50% interest in a
joint venture in Wheeling-Ispat Partners.
Champion Metal Products, Inc. produces fabricated steel products.
All of the Company's raw steel producing facilities have been restarted
as of September 30, 1997, and the Company expects to be at pre-Strike production
and shipment levels during the second quarter of 1998.
Business Strategy
The Company's business strategy includes the following initiatives:
Improve Cost Structure. The New Labor Agreement has allowed the Company
to eliminate 850 hourly positions (approximately 20% of its pre-Strike hourly
workforce). The Company believes that these reductions, combined with the
significantly more flexible work rules under the New Labor Agreement, will allow
it to operate at pre-Strike levels with 850 fewer employees. As a result, the
Company anticipates substantial cost savings and productivity improvements once
pre-Strike production levels are reached. In addition, the Company has directed
its capital expenditures towards upgrading and modernizing its steelmaking
facilities, with a goal toward increasing productivity. These expenditures
include modernization of its hot and cold rolling facilities and a major reline
in 1995 of its No. 5 blast furnace located in Steubenville, Ohio. This reline
increased productivity and provided the Company with the ability to produce 100%
of the hot metal necessary to satisfy caster production requirements from two
rather than three blast furnaces. The Company's ability to produce low cost,
high quality metallurgical coke helps the Company maintain lower costs than
those of many of its competitors. In addition, during periods of high demand the
Company is able to profitably sell coke produced in excess of its internal
needs.
Expand Production of Value-Added Products. The Company intends to
continue to expand its sale of value-added products such as coated and
fabricated steels in order to improve profit margins and reduce its exposure to
commodity steel market volatility. This strategy is evidenced by the Company's
expansion of Wheeling Corrugating and its emphasis on joint ventures, such as
Wheeling-Nisshin and OCC, which give the Company access to downstream markets
through long-term supply contracts. The Company's shipments of
Wheeling-Corrugating products increased approximately 22.7% from 1993 to 1997.
Shipments of other value-added products were lower due to the Strike. The
Company will continue to target strategic acquisitions and joint ventures that
support the Company's sales of value-added products.
-5-
<PAGE>
Recent Developments
In November 1997, the Company sold $275,000,000 of the Old Notes
pursuant to the Old Indenture in the November Offering. Concurrently with the
consummation of the November Offering, the Company entered into a Term Loan
Agreement with DLJ Capital Funding, Inc., as syndication agent, Donaldson,
Lufkin & Jenrette Securities Corporation, as arranger, Citicorp USA, Inc., as
documentation agent, National City Bank, as administrative agent, and the
lenders party thereto (the "Term Loan Agreement"). Pursuant to the Term Loan
Agreement, the Company borrowed an aggregate of $75.0 million, the net proceeds
of which were, together with the proceeds of the November Offering, used to
defease the 9 3/8% Notes and reduce outstanding borrowings under the Revolving
Credit Facility. See "Use of Proceeds."
WPC is a wholly-owned subsidiary of WHX Corporation ("WHX"), a publicly
traded company listed on the New York Stock Exchange, Inc. ("NYSE"). The Company
comprises the majority of the operating assets of WHX. The principal executive
offices of the Company are located at 1134 Market Street; Wheeling, West
Virginia 26003; its telephone number is (304) 234-2400.
-6-
<PAGE>
Summary of the Terms of the Exchange Offer
The Exchange Offer...................Pursuant to the Exchange Offer, New Notes
will be issued in exchange for outstanding
Old Notes validly tendered and not
withdrawn. The aggregate principal amount
of the New Notes will be equal to that of
the Old Notes and will be issued in
denominations of $1,000 in principal amount
and any integral multiple of $1,000 in
excess thereof. The Company will issue New
Notes to tendering Holders of Old Notes as
promptly as practicable after the
Expiration Date.
Resale ............................Based on an interpretation by the staff of
the Commission set forth in no-action
letters issued to third parties, The
Company believes that the New Notes issued
pursuant to the Exchange Offer in exchange
for Old Notes may be offered for resale,
resold and otherwise transferred by any
Holder thereof (other than broker-dealers,
as set forth below, and any such Holder
that is an "affiliate" (within the meaning
of Rule 405 under the Securities Act) of
the Company) without compliance with the
registration and prospectus delivery
provisions of the Securities Act, provided
that such New Notes are acquired in the
ordinary course of such Holder's business
and that such Holder has no arrangement or
understanding with any person to
participate in the distribution of such New
Notes. Each broker-dealer (other than an
affiliate of the Company) that receives New
Notes for its own account in exchange for
Old Notes that were acquired as a result of
market-making or other trading activity
must acknowledge that it will deliver a
prospectus in connection with any resale of
such New Notes. The Letter of Transmittal
states that by so acknowledging and
delivering a prospectus, such broker-dealer
will not be deemed to admit that it is an
"underwriter" within the meaning of the
Securities Act. This Prospectus, as it may
be amended or supplemented from time to
time, may be used by such broker- dealer in
connection with resales of New Notes
received in exchange for Old Notes where
such New Notes were acquired by such
broker-dealer as a result of market-making
activities or other trading activities. The
Company has agreed that, for a period of
180 days after the Expiration Date, it will
make this Prospectus available to any such
broker-dealer for use in connection with
any such resale. See "Plan of
Distribution." Any Holder who tenders in
the Exchange Offer with the intention to
participate, or for the purpose of
participating, in a distribution of the New
Notes or who is an affiliate of the Company
may not rely on the position of the staff
of the Commission enunciated in Exxon
Capital Holdings Corporation (available May
13, 1988) or similar no-action letters and,
in the absence of an exemption therefrom,
must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with a
secondary resale transaction. Failure to
comply with such requirements in such
instance may result in such Holder
incurring liabilities under the Securities
Act for which the Holder is not indemnified
by the Company.
-7-
<PAGE>
The Exchange Offer is not being made to,
nor will the Company accept surrenders for
exchanges from, Holders of Old Notes in any
jurisdiction in which this Exchange Offer
or the acceptance thereof would not be in
compliance with the securities or blue sky
laws of such jurisdiction.
Expiration Date......................5:00 p.m., New York City time, on _______
__, 1998 [20 BUSINESS DAYS AFTER
COMMENCEMENT OF THE EXCHANGE OFFER], unless
the Exchange Offer is extended, in which
case the term "Expiration Date" means the
latest date and time to which the Exchange
Offer is extended. Any extension, if made,
will be publicly announced through a
release to the Dow Jones News Service and
as otherwise required by applicable law or
regulations.
Conditions to the
Exchange Offer.....................The Exchange Offer is subject to certain
conditions, which may be waived by the
Company. See "The Exchange Offer Conditions
to the Exchange Offer." The Exchange Offer
not conditioned upon any minimum principal
amount of Old Notes being tendered.
Procedures for Tendering Old Notes...Each Holder of Old Notes wishing to accept
the Exchange Offer must complete, sign and
date the Letter of Transmittal, or a
facsimile thereof, in accordance with the
instructions contained herein and therein,
and mail or otherwise deliver the Letter of
Transmittal, or a facsimile thereof,
together with the Old Notes to be exchanged
and any other required documentation to
Bank One, N.A., as Exchange Agent, at the
address set forth herein and therein. By
executing a Letter of Transmittal, each
Holder will represent to the Company that,
among other things, the New Notes acquired
pursuant to the Exchange Offer are being
obtained in the ordinary course of business
of the person receiving such New Notes,
whether or not such person is the Holder,
that neither the Holder nor any such other
person has any arrangement or understanding
with any person to participate in the
distribution of such New Notes and that
neither the Holder nor any such other
person is an "affiliate," as defined in
Rule 405 under the Securities Act, of the
Company.
Special Procedures for
Beneficial Owners..................Any beneficial owner whose Old Notes are
registered in the name of a broker, dealer,
commercial bank, trust company or other
nominee and who wishes to tender in the
Exchange Offer should contact such
registered Holder promptly and instruct
such registered Holder to tender on such
beneficial owner's behalf. If such
beneficial owner wishes to tender on his
own behalf, such beneficial owner must,
prior to completing and executing the
Letter of Transmittal and delivering his
Old Notes, either make appropriate
arrangements to register ownership of the
Old Notes in such owner's name or obtain a
properly completed bond power from the
registered Holder. The transfer of
registered ownership may take considerable
time and may not be able to be completed
prior to the Expiration Date.
-8-
<PAGE>
Guaranteed Delivery Procedures.......Holders of Old Notes who wish to tender
such Old Notes and whose Old Notes are not
immediately available or who cannot deliver
their Old Notes and a properly completed
Letter of Transmittal or any other
documents required by the Letter of
Transmittal to the Exchange Agent prior to
the Expiration Date may tender their Old
Notes according to the guaranteed delivery
procedures set forth in "The Exchange Offer
-- Procedures for Tendering."
Acceptance of Old Notes and
Delivery of New Notes..............Subject to certain conditions (as described
more fully in "The Exchange Offer --
Conditions to the Exchange Offer"), the
Company will accept for exchange any and
all Old Notes that are properly tendered in
the Exchange Offer and not withdrawn, prior
to 5:00 p.m., New York City time, on the
Expiration Date. The New Notes issued
pursuant to the Exchange Offer will be
delivered as promptly as practicable
following the Expiration Date.
Withdrawal Rights....................Subject to the conditions set forth herein,
tenders of Old Notes may be withdrawn at
any time prior to 5:00 p.m., New York City
time, on the Expiration Date. See "The
Exchange Offer -- Withdrawal of Tenders."
Certain United States Federal
Income Tax Considerations..........The exchange pursuant to the Exchange Offer
should not constitute a taxable exchange
for United States federal income tax
purposes. Each such New Note should be
treated as having been originally issued at
the time the Old Note exchanged therefor
was originally issued. See "Certain United
States Federal Income Tax Considerations."
Exchange Agent.......................Bank One, N.A., the Trustee under the
Indenture, is serving as exchange agent
(the "Exchange Agent") in connection with
the Exchange Offer. For information with
respect to the Exchange Offer, the
telephone number for the Exchange Agent is
(614) 248-5811 and the facsimile number for
the Exchange Agent is (614) 248-2566.
See "The Exchange Offer" for more detailed information concerning the terms of
the Exchange Offer.
-9-
<PAGE>
Summary Description of the New Notes
The Exchange Offer applies to $275,000,000 aggregate principal amount
of Old Notes. The form and terms of the New Notes will be the same in all
material respects as the form and terms of the Old Notes, except that the offer
and sale of the New Notes will be registered under the Securities Act and,
therefore, the New Notes will not bear legends restricting the transfer thereof.
Upon consummation of the Exchange Offer, none of the Notes will be entitled to
registration rights under the Registration Rights Agreement. The New Notes will
evidence the same debt as the Old Notes, will be entitled to the benefits of the
Indenture and will be treated as a single class thereunder with any Old Notes
that remain outstanding. See "Description of the New Notes."
Securities Offered.................$275,000,000 principal amount of 9 1/4%
Senior Exchange Notes due 2007.
Maturity Date......................November 15, 2007.
Interest and Payment Dates.........The Notes bear interest at the rate of 9 1/4%
per annum, payable semi-annually on May 15
and November 15 of each year, commencing May
15, 1998.
Optional Redemption................The Notes are redeemable at the option of the
Company, in whole or in part, on or after
November 15, 2002, at the redemption prices
set forth herein, together with accrued and
unpaid interest and Liquidated Damages, if
any, thereon to the date of redemption. The
Company has the option, at any time prior to
November 15, 2002, to redeem the Notes, in
whole but not in part, at a redemption price
equal to 100% of the principal amount thereof
plus the Applicable Premium, together with
accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of
redemption. In addition, at any time on or
prior to November 15, 2000 in the event of
one or more Public Equity Offerings the
Company may, subject to certain requirements,
redeem up to 35% of the original aggregate
principal amount of the Notes with the net
cash proceeds thereof at a redemption price
equal to 109.25% of the principal amount
thereof, together with accrued and unpaid
interest and Liquidated Damages, if any,
thereon to the date of redemption; provided
that at least 65% of the original aggregate
principal amount of the Notes remains
outstanding immediately after such
redemption. See "Description of the New
Notes--Optional Redemption."
Change of Control..................Upon the occurrence of a Change of Control,
the Company is required to make an offer to
repurchase all or a portion of such holder's
Notes at a price of 101% of the principal
amount thereof plus accrued interest and
Liquidated Damages, if any, thereon to the
date of repurchase. If a Change of Control
were to occur, it is unlikely that the
Company would be able to both repay all of
its obligations under the Revolving Credit
Facility and repay other indebtedness,
including borrowings under the Term Loan
Agreement that would become payable upon the
occurrence of such Change of Control, unless
it could obtain alternate financing. See
"Risk Factors --Possible Need to Obtain
Alternate Financing Upon a Change in Control"
and "Description of the New Notes--
Repurchase at the Option of Holders--Change
of Control."
Subsidiary Guarantees..............The Notes are unconditionally and irrevocably
guaranteed on a senior basis by the
Guarantors, which consist of all of the
Company's present and future Subsidiaries
(excluding Unrestricted Subsidiaries). The
Subsidiary Guarantees may be released under
certain circumstances. See "Description of
the New Notes--Guarantees."
Asset Sale Proceeds...............The Company is obligated in certain
circumstances to make an offer to purchase
the Notes at a purchase price equal to 100%
of the principal amount thereof, plus accrued
and unpaid interest and Liquidated Damages,
if any, thereon to the repurchase date with
the net cash proceeds of certain sales or
other dispositions
-10-
<PAGE>
of assets. See "Description of the New
Notes--Repurchase at the Option of
Holders--Asset Sales."
Ranking ..........................The Notes are unsecured obligations of the
Company, ranking senior in right of payment
to all existing and future subordinated
indebtedness of the Company and pari passu
with all existing and future senior unsecured
indebtedness of the Company, including
borrowings under the Term Loan Agreement. The
Notes will be effectively junior to secured
indebtedness of the Company and its
subsidiaries, including borrowings under the
Revolving Credit Facility, to the extent of
the assets securing such indebtedness. As of
September 30, 1997, on a pro forma basis
giving effect to the November Offering, the
borrowings under the Term Loan Agreement and
the use of proceeds therefrom, there would
have been an aggregate of $405.7 million of
indebtedness of the Company and its
Subsidiaries, the Notes would have been
effectively subordinated to $56.8 million of
secured indebtedness of the Company and its
Subsidiaries, additional availability of
approximately $94.5 million would have
existed under the Revolving Credit Facility
and the Notes would have been pari passu with
$75.0 million of borrowings under the Term
Loan Agreement.
Certain Covenants..................The Indenture pursuant to which the Notes are
issued (the "Indenture") contains certain
covenants, including, but not limited to,
covenants with respect to: (i) limitations on
indebtedness; (ii) limitations on restricted
payments; (iii) limitations on transactions
with affiliates; (iv) limitations on liens;
(v) limitations on sale of assets; (vi)
limitations on issuance and sale of capital
stock of subsidiaries; (vii) limitations on
dividends and other payment restrictions
affecting subsidiaries; and (viii)
restrictions on consolidations, mergers and
sales of assets. The Company may incur
Indebtedness if the Consolidated Interest
Coverage Ratio for the Company's most
recently ended four full fiscal quarters for
which internal financial statements are
available immediately preceding the date on
which such additional Indebtedness is
incurred would have been at least 2.00 to 1,
on a pro forma basis (including a pro forma
application of the net proceeds therefrom),
as if the additional Indebtedness had been
incurred at the beginning of such
four-quarter period. At December 31, 1997,
the Company could not incur additional
indebtedness under this formula.
Notwithstanding the foregoing, the Company
may incur specific indebtedness including
Permitted Capital Expenditure Indebtedness of
the Company and its Restricted Subsidiaries
and Existing Indebtedness (other than
Permitted Working Capital Indebtedness and
Indebtedness under the Letter of Credit
Facility). See "Description of the New
Notes--Certain Covenants."
Events of Default..................The Indenture provides that each of the
following constitutes an Event of Default:
(a) default in the payment when due of
interest or Liquidated Damages on the Notes
and such default continues for 30 days; (b)
default in payment when due of the principal
of or premium (if any) on the Notes; (c)
failure by the Company to comply with the
provisions described under the captions
"Description of the New Notes--Repurchase at
the Option of Holders--Change of Control,"
"--Asset Sales," "--Certain
Covenants--Restricted Payments," "--
Incurrence of Indebtedness and Issuance of
Preferred Stock" or "--Merger, Consolidation
or Sale of Assets"; (d) failure by the
Company for 30 days after notice to comply
with any of its other agreements in the
Indenture or the Notes; (e) default under any
mortgage, indenture or instrument under which
there may be issued or by which there may be
secured or evidenced any Indebtedness for
money borrowed by the Company or any of its
Restricted Subsidiaries (or the payment of
which is guaranteed by the Company or any of
its Restricted Subsidiaries), whether such
Indebtedness or guarantee now exists or is
created after the date of the Indenture,
which default (i) is a Payment Default (as
-11-
<PAGE>
defined) or (ii) results in the acceleration
of such Indebtedness prior to its express
maturity and, in each case, the principal
amount of any such Indebtedness, together
with the principal amount of any other such
Indebtedness under which there has been a
Payment Default or the maturity of which has
been so accelerated, aggregates $10.0 million
or more; (f) failure by the Company or any of
its Restricted Subsidiaries to pay final
judgments aggregating in excess of $10.0
million, which judgments are not paid,
discharged or stayed for a period of 60 days;
(g) failure by any Guarantor to perform any
covenant set forth in its Subsidiary
Guarantee, or the repudiation by any
Guarantor of its obligations under its
Subsidiary Guarantee or the unenforceability
of any Subsidiary Guarantee against a
Guarantor for any reason, unless, in each
such case, such Guarantor and its
Subsidiaries have no Indebtedness outstanding
at such time or at any time thereafter; and
(h) certain events of bankruptcy or
insolvency with respect to the Company or any
of its Restricted Subsidiaries. See "Risk
Factor--Cross Default Provisions" and
"Description of the New Notes--Events of
Default and Remedies."
Settlement at DTC..................Transfers of Notes between participants in
The Depository Trust Company ("DTC") will be
effected in the ordinary way in accordance
with DTC rules and will be settled in
next-day funds.
Risk Factors
For a discussion of risks that should be considered by prospective
purchasers in connection with an investment in the Notes, including risks
relating to sensitivity of results of operations to realized steel prices;
impact of strike; resumption of operations, significant outstanding indebtedness
of the Company, cross-default provisions , joint venture obligations, ranking;
holding company structure, substantial capital expenditure requirements,
substantial employee post retirement obligations, uncertainty of impact of
future collective bargaining agreements; possibility of strikes, control by WHX;
conflicts of interest; transactions with WHX, fraudulent conveyance; possible
invalidity of Subsidiary Guarantees and need to obtain alternate financing upon
a Change of Control, see "Risk Factors."
-12-
<PAGE>
Summary Consolidated Financial Data
The following table sets forth certain summary consolidated financial
data of the Company for each of the five years in the period ended December 31,
1997. Such information is derived from the consolidated financial statements of
the Company which have been audited by Price Waterhouse LLP, independent
accountants. EBITDA is operating income plus depreciation, amortization and
special charges. The Company has included EBITDA because it is commonly used by
certain investors and analysts to analyze and compare companies on the basis of
operating performance, leverage and liquidity and to determine a company's
ability to service debt. EBITDA does not represent cash flows as defined by
generally accepted accounting principles and does not necessarily indicate that
cash flows are sufficient to fund all of the Company's cash needs. EBITDA should
not be considered in isolation or as a substitute for net income (loss), cash
flows from operating activities or other measures of liquidity determined in
accordance with generally accepted accounting principles. This information
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the consolidated financial
statements and related consolidated notes thereto included elsewhere herein.
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
-------------------------------------------------------------------------
1993 1994 1995 1996 1997(6)
----- ---- ---- ---- --------
(in thousands)
<S> <C> <C> <C> <C> <C>
Net sales............ $1,046,795 $1,193,878 $1,267,869 $1,110,684 $489,662
Cost of products sold
(excluding depreciation
and profit sharing) 876,814 980,044 1,059,622 988,161 585,609
Depreciation.......... 57,069 61,094 65,760 66,125 46,203
Profit sharing........ 4,819 9,257 6,718 -- --
Selling, administrative and
general expenses... 58,564 60,832 55,023 54,903 52,222
Special charges(1).... -- -- -- -- 92,701
------- ------- ------- ------- ---------
Operating income (loss) 49,529 82,651 80,746 1,495 (287,073)
Interest expense...... 21,373 22,581 22,431 23,763 27,204
Other income (expense) 11,965 6,731 3,234 9,476 (221)
B & LE lawsuit settlement -- 36,091 -- -- --
------- -------- ------- ------- -------
Income (loss) before
taxes, extraordinary
items and cumulative
effect of change in
accounting method.. 40,121 102,892 61,549 (12,792) (314,498)
Tax provision (benefit) 9,400 21,173 3,030 (7,509) (110,035)
-------- ------- ------- -------- ---------
Income (loss) before
extraordinary items an
cumulative effect of
change in accounting
method (2)......... $ 30,721 $81,719 $ 58,519 $ (5,283) $ (204,463)
======== ======== ======== ========== ===========
Other Data:
EBITDA................ $106,598 $143,745 $146,506 $ 67,620 (148,169)
Capital expenditures.. 73,652 69,139 81,554 31,188 33,755
Depreciation.......... 57,069 61,094 65,760 66,125 46,203
Selected Operating Data:
Tons shipped (000's).. 2,251 2,397 2,385 2,105 851
Percent value-added
products........... 67.9% 68.6% 70.1% 71.9% 67.9%
Dollars per shipped ton:
Sales.............. $465 $498 $532 $528 $576
Cost of products sold
(excluding
depreciation and
profit sharing) 390 409 444 469 689
Gross profit (loss) 75 89 88 59 (113)
EBITDA............. 47 60 61 32 (174)
Operating income
(loss)........... 22 34 34 1 (338)
Average number of active
employees(3)...... 5,381 5,402 5,333 5,228 3,878
Man-hours per net ton
shipped(4)......... 4.91 4.58 4.62 4.54 4.95
</TABLE>
-13-
<PAGE>
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
-------------------------------------------------------------------------
1993 1994 1995 1996 1997(6)
----- ---- ---- ---- --------
Raw steel production
<S> <C> <C> <C> <C> <C>
(000's of tons).... 2,260 2,270 2,200 1,780 663
Capacity utilization.. 94% 95% 92% 74% 28%
</TABLE>
<TABLE>
<CAPTION>
As of December 31, 1997(5)
-----------------------------
(in thousands)
<S> <C>
Balance Sheet Data:
Cash, cash equivalents and short-term investments............................ $ 0
Working capital (excluding cash, cash equivalents and short-term investments) 9,169
Property, plant and equipment, net............................................ 694,108
Total assets................................................................. 1,424,568
Total debt (including current portion)........................................ 439,903
Stockholder's equity.......................................................... 114,712
</TABLE>
(1) Includes a special charge for benefits included in the New Labor
Agreement related to enhanced retirement benefits, 1997 bonuses and
special assistance payments for those not returning to work
immediately.
(2) The Company adopted Statement of Financial Accounting Standard No. 112,
"Accounting for Post-employment Benefits" in 1994 and recorded a charge
of $12.2 million ($10.0 million net of tax). These benefits include,
among others, disability, severance and workmen's compensation.
(3) "Average number of active employees" is calculated for each period as
the quotient of: the sum of total salaried and hourly employees paid
for one pay period of each month, as determined from the mid-month
salaried and hourly payroll registers, divided by the total number of
months in the respective period.
(4) "Man-hours per net ton shipped" is calculated for each period as the
quotient of: the sum of total hours worked for all union and non-union
employees for the related period plus an estimated amount of 173 hours
worked per month for each of the Company's salaried employees, divided
by the sum of total tons shipped .
(5) The Balance Sheet Data gives effect to the November Offering and the
use of proceeds therefrom.
(6) On a pro forma basis, if the borrowings under the Term Loan Agreement
had been incurred and the Old Notes had been issued as of January 1,
1997, the net loss would have increased by $5.9 million due to
additional interest expense of $9.1 million (pre-tax) and stockholder's
equity would have been $5.9 million less.
-14-
<PAGE>
RISK FACTORS
Prospective investors should carefully consider the following risk
factors set forth below as well as the other information set forth in this
Prospectus.
Factors Relating to the Company
Sensitivity of Results of Operations to Realized Steel Prices
The Company's results of operations are significantly affected by
relatively small variations (on a percentage basis) in the realized sales prices
of its products, which, in turn, depend upon both the prevailing prices for
steel and the demand for particular products. During the first nine months of
1996, the Company shipped approximately 1.9 million tons, and realized an
average sales price per ton of approximately $514. A one percent decrease in
this average realized price would have resulted in a decrease in net sales and
operating income of approximately $9.8 million. The Company sells approximately
75% of its products at spot prices (including shipments to Wheeling-Nisshin and
OCC under supply contracts at prices approximating spot prices, see "Business--
Wheeling-Nisshin" and "--Ohio Coatings Company"). The Company believes its
percentage of sales at spot prices is higher than that of many of its domestic
integrated competitors. The Company therefore may be affected by price decreases
more quickly than many of such competitors.
Impact of Strike; Resumption of Operations
The Strike has had a material adverse effect on the Company's results
of operations and may continue to adversely affect the Company in the short-run.
The Company reported losses for the fourth quarter of 1996 and the first three
quarters of 1997 of $30.9 million, $40.3 million, $34.6 million and $96.8
million, respectively. Included in the loss for the third quarter of 1997 is a
pre-tax charge of $88.9 million primarily associated with the costs attributable
to the New Labor Agreement. The Company anticipates that it will continue
reporting losses until shipments return to pre-Strike levels, which is
anticipated to occur during the first half of 1998, although there can be no
assurance that delays will not occur. Until the Company's operations are fully
resumed, the Company anticipates that it will need to invest substantial
resources to rebuild inventories and generate accounts receivable. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources." In addition, there can be no
assurance that the Company will return to pre-Strike shipment levels or that the
Company will otherwise operate profitably.
Significant Outstanding Indebtedness of the Company
The Company has, and after giving effect to the November Offering and
the use of proceeds therefrom, will continue to have substantial indebtedness
and debt service requirements. At December 31, 1997, after giving effect to the
November Offering, the borrowings under the Term Loan Agreement and the use of
proceeds therefrom, the Company's total indebtedness was $439.9 million and its
stockholder's equity was $114.7 million.
The Company's current annual debt service requirement is $32.2 million.
The Company's level of indebtedness will have several important effects
on its future operations, including the following: (a) a significant portion of
the Company's cash flow from operations will be dedicated to the payment of
interest on and principal of its indebtedness and will not be available for
other purposes; (b) the financial covenants and other restrictions contained in
the Company's existing $150.0 million revolving credit agreement (the "Revolving
Credit Facility") require the Company to meet certain financial tests and limit
its ability to borrow additional funds or to dispose of assets; and (c) the
Company's ability to obtain additional financing in the future for working
capital, postretirement health care and pension funding, capital expenditures,
acquisitions, general corporate purposes or other purposes may be impaired.
Additionally, the Company's ability to meet its debt service obligations and to
reduce its total debt will be dependent upon the Company's future performance,
which will be
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<PAGE>
subject to general economic conditions and to financial, business and other
factors affecting the operations of the Company, many of which are beyond its
control. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations--Liquidity and Capital Resources" and "Description of
Principal Indebtedness."
There can be no assurance that the Company's business will generate
sufficient cash flow from operations or that future borrowings will be available
under the Revolving Credit Facility in an amount sufficient to enable the
Company to service its indebtedness, including the Notes and the Term Loan
Agreement, or to make anticipated capital expenditures. If the Company is unable
to draw amounts under the Revolving Credit Facility in the future, such
inability could have a material adverse effect on the financial condition and
results of operations of the Company. Moreover, an inability of the Company to
meet the financial covenants contained in the Revolving Credit Facility or other
indebtedness could result in an acceleration of amounts due thereunder. In the
event the Company is unable to make required payments or otherwise comply with
the terms of its indebtedness, including borrowings under the Revolving Credit
Facility and the Term Loan Agreement, the holders of such indebtedness could
accelerate the obligations of the Company thereunder, which could result in the
Company being forced to seek protection under applicable bankruptcy laws or in
an involuntary bankruptcy proceeding being brought against the Company. Under
such circumstances, the holders of the Notes may be adversely affected. If it
becomes necessary for the Company to refinance all or a portion of the principal
of the Notes on or prior to maturity there can be no assurance that the Company
will be able to effect such refinancing on commercially reasonable terms or at
all.
A portion of the Company's outstanding indebtedness, including all
borrowings under the Revolving Credit Facility and the Term Loan Agreement,
bears interest at floating rates. As a result, the Company's results of
operations and ability to service its indebtedness will be affected by future
fluctuations in interest rates.
For further information on the Company's outstanding indebtedness and
Receivables Facility (as defined herein), see "Description of Principal
Indebtedness," "Description of Receivables Facility" and "Indemnification and
Intercreditor Agreement."
Cross-default Provisions
Wheeling-Pittsburgh Steel Corporation ("WPSC") is the borrower under
the Revolving Credit Facility, which is guaranteed by WPC, two subsidiaries of
the Company and Unimast Incorporated ("Unimast"), a wholly-owned subsidiary of
WHX. Unimast's inventory is included in the borrowing base under the Revolving
Credit Facility, and Unimast receives advances from WPSC of funds borrowed by
WPSC under the Revolving Credit Facility. Under the Indenture, such advances may
not exceed $40 million at any time outstanding and must be repaid not later than
the first anniversary of the date of the Indenture. Unimast is also a
participant in the Receivables Facility, and its receivables are included in the
pool of receivables sold. Unimast, WHX and the Company entered into an
intercreditor agreement upon the consummation of the November Offering which
provides, among other things, that Unimast and WHX will be solely responsible
for repayment of any funds advanced by WPSC to Unimast in respect of borrowings
under the Revolving Credit Facility and have agreed to indemnify the Company if
a default occurs under the Revolving Credit Facility or if the Receivables
Facility is terminated as a result of a breach of either of such agreements by
Unimast or WHX. In addition, the Company is solely responsible for repayment of
its borrowings under the Revolving Credit Facility and has agreed to indemnify
WHX and Unimast if a default occurs under the Revolving Credit Facility or if
the Receivables Facility is terminated as a result of a breach of either of such
agreements by the Company. There can be no assurance, however, that in the event
of a default by Unimast or WHX, that either Unimast or WHX will be able to make
any payments to the Company required by such intercreditor agreement. In
addition, in the event Unimast or WHX causes a default under the Revolving
Credit Facility, the amounts due thereunder for all participants including the
Company could be accelerated (which could lead to an event of default under the
Notes) and the Company's ability to borrow additional funds under the Revolving
Credit Facility could be terminated. In the event such acceleration occurs,
there can be no assurance that the Company will be able to refinance such
borrowings. A failure by the Company to refinance such borrowings would have a
material adverse effect on the Company. See "Description of Principal
Indebtedness."
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<PAGE>
Joint Venture Obligations
WPC has certain commitments and contingent obligations with respect to
the OCC joint venture including the following: (i) WPC is required, along with
Dong Yang Tinplate Ltd. ("Dong Yang"), to contribute additional funds to OCC to
cover its pro rata share of any cost overruns and working capital needs of OCC
to the extent that OCC is unable to otherwise finance such amounts (the Company
anticipates that its pro rata share of such funding obligations will be between
$5.0 million and $10.0 million through December 31, 1998); and (ii) WPC is
jointly and severally liable, together with Dong Yang, to contribute to OCC,
either as a loan or a capital contribution, amounts sufficient to cure certain
defaults and violations of certain financial covenants of OCC under OCC's
borrowing facility, which currently has a maximum availability of $17.0 million.
OCC is negotiating to increase such borrowing facility from $17.0 million to
$20.0 million, and in connection therewith Dong Yang and the Company may agree
to jointly and severally guarantee all of such obligations. In addition, WPC
also has certain commitments and contingent obligations under the
Wheeling-Nisshin joint venture including the following: (i) WPC is required,
along with Nisshin Steel, to contribute additional funds to Wheeling-Nisshin to
cover its pro rata share of working capital needs of Wheeling-Nisshin, to the
extent Wheeling-Nisshin is unable to cover its working capital needs or
Wheeling-Nisshin is unable to finance such needs; and (ii) WPC has agreed to
indemnify WHX for WHX's agreement with Nisshin Steel to contribute in proportion
to WPC's interest in Wheeling-Nisshin to the repayment of outstanding borrowings
of Wheeling-Nisshin should Wheeling-Nisshin be unable to repay its debt
obligations. There can be no assurance that the Company will be able to make any
such required payments or if made, that they will not have a material adverse
effect upon the Company. If the Company is unable to make any of such required
payments, it would be a breach of the Company's joint venture agreements.
Ranking; Holding Company Structure
The Notes are unsecured obligations of the Company, ranking senior in
right of payment to all existing and future subordinated indebtedness of the
Company, and pari passu with all existing and future senior unsecured
indebtedness of the Company, including borrowings under the Term Loan Agreement.
The Subsidiary Guarantees rank pari passu in right of payment with all existing
and future senior indebtedness of the Guarantors, including the obligations of
the Guarantors under the Revolving Credit Facility, any successor credit
facility and the Term Loan Agreement. At December 31, 1997, the borrowings under
the Term Loan Agreement and the use of proceeds therefrom, the aggregate
principal amount of indebtedness (excluding trade payables, other accrued
liabilities and the Notes) of the Company and its subsidiaries is approximately
$165.9 million, all of which would have ranked effectively senior to the Notes.
Although the Notes constitute senior obligations of the Company, the holders of
secured indebtedness would have a prior claim to the assets securing such
indebtedness. The Revolving Credit Facility is secured by the inventory of WPSC,
two of the Company's Subsidiaries, and Unimast, and certain other assets. In
addition, pursuant to the Receivables Facility, WPSC sells an undivided
percentage ownership in a designated pool of accounts receivable generated by
it, two of the Company's Subsidiaries, and Unimast. See "Description of
Principal Indebtedness" and "Description of Receivables Facility."
The Company is a holding company that conducts substantially all of its
business operations through its subsidiaries. Consequently, the Company's
operating cash flow and its ability to service its indebtedness, including the
Notes, is dependent upon the cash flow of its subsidiaries and the payment of
funds by such subsidiaries to the Company in the form of loans, dividends or
otherwise. The Company's subsidiaries are separate and distinct legal entities
apart from the Company and each operating subsidiary has agreed to guarantee
payment of the Notes on a senior basis. The Indenture contains financial and
restrictive covenants that limit the ability of the Company and its subsidiaries
to, among other things, borrow additional funds, dispose of assets, pay cash
dividends or make certain restricted payments. See "Description of
Notes--Certain Covenants" and "Description of Principal Indebtedness."
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Substantial Capital Expenditure Requirements
The Company operates in a capital intensive industry. From 1993 through
1997, the Company's capital expenditures totalled approximately $289.3 million.
This level of capital expenditures was used to maintain productive capacity,
improve productivity and upgrade selected facilities to meet competitive
requirements and maintain compliance with environmental laws and regulations,
including the Clean Air Act of 1990. The Company anticipates funding its capital
expenditures in 1998 from cash on hand and funds generated by operations. Prior
to the resolution of the Strike, the Company had delayed most capital
expenditures at the Strike-affected plants. The Company anticipates that capital
expenditures will approximate depreciation, on average, over the next few years.
There can be no assurance that the Company will have adequate funds from
operations to make all required capital expenditures or that the amount of
future capital expenditures will be commensurate with historical averages.
Substantial Employee Postretirement Obligations
The Company has substantial financial obligations related to its
employee and retiree postretirement plans for medical and life insurance and
pensions. Statement of Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other than Pensions" ("SFAS 106")
requires accrual of retiree medical and life insurance benefits rather than
recognition of costs as claims are paid. In accordance with SFAS 106, a
liability has been established for the present value of the estimated future
unfunded medical obligations. In addition, in accordance with the Statement of
Financial Accounting Standards No. 87, "Employers' Accounting for Pensions," the
Company has recognized a liability equal to its unfunded accumulated pension
benefit obligations. As of December 31, 1997, the Company had an unfunded
accumulated postretirement benefit obligation for retiree health care of
approximately $301.0 million. In addition, the Company had recorded an unfunded
accumulated pension benefit obligation for the recently implemented defined
benefit pension plan ("DB Plan") of approximately $167.3 million, of which
approximately 75% must be funded over the next five years.
Uncertainty of Impact of Future Collective Bargaining Agreements; Possibility of
Strikes
As of December 31, 1997, the USWA represented approximately 73% of the
Company's employees. In August 1997, the Company entered into the New Labor
Agreement with the USWA, which expires on September 1, 2002. There can be no
assurance as to the results of negotiations of future collective bargaining
agreements, whether future collective bargaining agreements will be negotiated
without production interruptions or the possible impact of future collective
bargaining agreements, or the negotiations thereof, on the Company's financial
condition and results of operations. In addition, there can be no assurance that
strikes will not occur in the future in connection with labor negotiations or
otherwise.
Control by WHX; Conflicts of Interest; Transactions with WHX
The Company is a wholly-owned subsidiary of WHX and all directors are
elected at the direction of WHX. See "Management." The Company believes that WHX
will not be prohibited from acting in its own self interest in respect of, among
other things, approval of various corporate activities and the voting or
disposition of the shares of Common Stock owned by it. The ongoing relationship
between the Company and WHX could result in conflicts of interest between the
Company and WHX. Also, WHX and the Company have entered into certain agreements,
which were not the result of arms-length negotiations between independent
parties, providing for indemnification and certain other rights and obligations
for each of them after consummation of the November Offering.
In addition, as a subsidiary of WHX, the Company has had the financial
resources of WHX available to meet its liquidity needs. The Notes are not an
obligation of WHX and are stand-alone obligations of WPC. WHX is not obligated
to provide funds to the Company, and the Company will in the future have to rely
on its own resources and third-party credit to meet its cash requirements. WHX
and WPC are jointly and severally obligated to make certain payments to WPSC
pursuant to the terms of a keepwell agreement entered into in connection with
the Revolving Credit Facility to maintain certain financial ratios of the
Company. The Company has agreed to
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indemnify WHX with respect to any payments made by WHX on account of WHX's
obligations under such keepwell agreement. See "Certain Relationships and
Related Transactions; Transactions between the Company and WHX."
From time to time, WHX has made advances to the Company, principally to
fund working capital needs and interest payments on debt. The Company also has
made advances to WHX, from time to time, principally to fund the payment by WHX
of dividends on its outstanding preferred stock and the working capital needs of
Unimast. As of December 31, 1997, the Company had made advances to WHX in the
net amount of $28.0 million. All advances are repayable upon demand and do not
bear interest. To the extent the Company has net outstanding advances from WHX,
the Company's obligation to repay such advances will be subordinated to the
repayment obligations on the Notes.
Fraudulent Conveyance; Possible Invalidity of Subsidiary Guarantees
Under applicable provisions of the United States Bankruptcy Code or
comparable provisions of state fraudulent transfer or conveyance laws, if the
Company, at the time it issues the Notes, or any one of the Guarantors, at the
time it issues its Subsidiary Guarantee, (a) incurs such indebtedness with the
intent to hinder, delay or defraud creditors, or (b)(i) receives less than
reasonably equivalent value or fair consideration for incurring such
indebtedness and (ii)(A) is insolvent at the time of the incurrence, (B) is
rendered insolvent by reason of such incurrence (after the application of the
proceeds of the November Offering), (C) is engaged or is about to engage in a
business or transaction for which the assets that will remain with the Company
or such Guarantor constitute unreasonably small capital to carry on its
business, or (D) intends to incur, or believes that it will incur, debts beyond
its ability to pay such debts as they mature, then, in each such case, a court
of competent jurisdiction could avoid, in whole or in part, the Notes or such
Subsidiary Guarantee. The measure of insolvency for purposes of the foregoing
will vary depending upon the law applied in such case. Generally, however, the
Company or any Guarantor would be considered insolvent if the sum of its debts,
including contingent liabilities, was greater than all of its assets at fair
valuation or if the present fair saleable value of its assets was less than the
amount that would be required to pay the probable liability on its existing
debts, including contingent liabilities, as they become absolute and matured.
To the extent any Subsidiary Guarantee were to be avoided as a
fraudulent conveyance or held unenforceable for any other reason, holders of the
Notes would cease to have any claim in respect of such Guarantor and would be
creditors solely of the Company and any Guarantor whose Subsidiary Guarantee was
not avoided or held unenforceable. In such event, the claims of the holders of
the Notes against the issuer of an invalid Subsidiary Guarantee would be subject
to the prior payment of all other liabilities of such Guarantor. There can be no
assurance that, after providing for all prior claims, there would be sufficient
assets to satisfy the claims of the holders of the Notes relating to any avoided
Subsidiary Guarantee. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Description of the New Notes."
Need to Obtain Alternate Financing Upon a Change of Control
The Indenture provides that, upon the occurrence of any Change of
Control, the Company will be required to make a Change of Control Offer (as
defined) to purchase all or any part of each holder's Notes issued and then
outstanding under the Indenture at a purchase price equal to 101% of the
principal amount thereof, plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase. The Revolving Credit Facility
prohibits the Company from purchasing any Notes prior to their stated maturity
and also provides that certain Change of Control events would constitute a
default thereunder. In addition, any future credit or other borrowing agreements
may contain similar restrictions. Finally, the Company's ability to pay cash to
the holders of Notes upon a repurchase may be limited by the Company's then
existing financial resources. See "Description of Principal Indebtedness" and
"Description of the New Notes--Repurchase at the Option of Holders--Change of
Control."
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If a Change of Control were to occur, it is unlikely that the Company
would be able to both repay all of its obligations under the Revolving Credit
Facility and repay other indebtedness, including borrowings under the Term Loan
Agreement that would become payable upon the occurrence of such Change of
Control, unless it could obtain alternate financing. There can be no assurance
that the Company would be able to obtain any such financing on commercially
reasonable terms or at all, and consequently no assurance can be given that the
Company would be able to purchase any of the Notes tendered pursuant to a Change
of Control Offer.
Factors Relating to the Industry
Cyclicality
Historically, steel industry performance has been cyclical in nature,
reflecting changes in industry capacity as well as the cyclicality of many of
the principal markets it serves, including the automotive, appliance and
construction industries. Although total domestic steel industry capacity was
substantially reduced during the 1980s through extensive restructuring, and
demand has been particularly strong since 1993, with domestic steel industry
earnings strong during the 1994-1996 period, there can be no assurance that
demand will continue at current levels or that the addition of new minimills and
recent restarts of previously idled domestic facilities will not adversely
impact pricing and margins.
Possible Fluctuations in the Cost of Raw Materials
The Company's operations require substantial amounts of raw materials,
including various types of iron ore pellets, steel scrap, coal, zinc, oxygen,
natural gas and electricity. The price and availability of these raw materials
are subject to steel industry and general market conditions affecting supply and
demand. Furthermore, worldwide competition in the steel industry has frequently
limited the ability of steel producers to raise finished product prices to
recover higher raw material costs. The Company's future profitability may be
adversely affected to the extent it is unable to pass on higher raw material
costs to its customers.
Competition
The domestic steel industry is highly competitive. Despite significant
reductions in raw steel production capacity by major domestic producers in the
1980s, partially offset by the recent minimill capacity additions and joint
ventures, the domestic industry continues to be threatened by excess world
capacity.
The Company faces increasing competitive pressures from other domestic
integrated producers, minimills and processors. Processors compete with the
Company in the areas of slitting, cold rolling and coating. Minimills are
generally smaller volume steel producers that use ferrous scrap metals as their
basic raw material. Compared to integrated producers, minimills, which rely on
less labor and capital intensive hot metal sources, have certain advantages.
Since minimills typically are not unionized, they have more flexible work rules
that have resulted in lower employment costs per net ton shipped. Since 1989,
significant flat rolled minimill capacity has been constructed and these
minimills now compete with integrated producers in product areas that
traditionally have not faced significant competition from minimills. In
addition, there is significant additional flat rolled minimill capacity under
construction or announced with various planned commissioning dates in 1997
through 1999. Near term, these minimills are expected to compete with the
Company primarily in the commodity flat rolled steel market, and processors are
expected to compete with the Company in the flat rolled and cold rolled steel
market. In the long-term, such minimills may also compete with the Company in
producing value-added products. In addition, the increased competition in
commodity product markets may influence certain integrated producers to increase
product offerings to compete with the Company's custom products.
During the early 1990s, the domestic steel market experienced
significant increases in imports of foreign produced flat rolled products. The
level of imports, however, declined somewhat in late 1995 and early 1996. During
the same period, exports of domestically produced flat rolled steel increased
significantly. In recent months,
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there has been an increase in imports of flat rolled products, and a decrease in
exports of flat rolled steel products. The strength of the U.S. dollar and
economy, as well as the strength of foreign economies, can significantly affect
the import/export trade balance for flat rolled steel products. The status of
the trade balance may significantly affect the ability of the new minimill
capacity to come on-line without disrupting the domestic flat rolled steel
market.
Wheeling Corrugating and the Company's other fabricating operations
compete in a large number of regional markets with numerous other fabricating
operations, most of which are independent of the major integrated manufacturers.
Independent fabricators generally are able to acquire flat rolled steel
products, their basic raw material, at prevailing market prices. There are few
barriers to entry into the manufacture of fabricated products in certain
individual markets currently served by Wheeling Corrugating (although the
geographic breadth of the markets served by Wheeling Corrugating would be hard
to replicate). Other competitors, including domestic integrated producers and
minimills, may decide to manufacture fabricated products and compete with
Wheeling Corrugating in its markets. Such competition may negatively affect
prices that may be obtained in certain markets by the Company for its fabricated
products. Many of Wheeling Corrugating's competitors do not have a unionized
workforce and, therefore, may have lower operating costs than Wheeling
Corrugating.
Materials such as aluminum, cement, composites, glass and plastics
compete as substitutes for steel in many markets.
Costs of Complying with Environmental Standards
The Company and other steel producers have become subject to
increasingly stringent environmental standards imposed by Federal, state and
local environmental laws and regulations. The Company has expended, and can be
expected to be required to expend in the future, significant amounts for
installation of environmental control facilities, remediation of environmental
conditions and other similar matters. The costs of complying with such stringent
environmental standards as the new ambient air quality standards for ozone and
PM2.5 as well as the climate change treaty negotiations may cause the Company
and other domestic steel producers to be competitively disadvantaged vis-a-vis
foreign steel producers and producers of steel substitutes, who may be subject
to less stringent standards. The Company has also been identified as a
potentially responsible party at five "Superfund" sites and has been alleged to
be a potentially responsible party at two other "Superfund" sites. The Superfund
law imposes strict joint and several liability upon potentially responsible
parties. See "Legal Proceedings-- Environmental Matters."
Lack of a Public Market
The New Notes will constitute a new issue of securities with no
established trading market. The Company does not intend to list the New Notes on
any United States securities exchange or to seek approval for quotation through
any automated quotation system. The Company has been advised by the Initial
Purchasers that following completion of the Exchange Offer, the Initial
Purchasers intend to make a market in the New Notes. However, the Initial
Purchasers are not obligated to do so and any market-making activities with
respect to the New Notes may be discontinued at any time without notice.
Accordingly, no assurance can be given that an active public or other market
will develop for the New Notes or as to the liquidity of or the trading market
for the New Notes. If a trading market does not develop or is not maintained,
Holders of the New Notes may experience difficulty in reselling the New Notes or
may be unable to sell them at all. If a market for the New Notes develops, any
such market may cease to continue at any time. If a public trading market
develops for the New Notes, future trading prices of the New Notes will depend
on many factors, including, among other things, prevailing interest rates, the
Company's results of operations and the market for similar securities and other
factors, including the financial condition of the Company.
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Consequences of the Exchange Offer to Non-Tendering Holders of the Old Notes
In the event the Exchange Offer is consummated, the Company will not be
required to register any Old Notes not tendered and accepted in the Exchange
Offer. In such event, Holders of Old Notes seeking liquidity in their investment
would have to rely on exemptions to the registration requirements under the
Securities Act. Following the Exchange Offer, none of the Notes will be entitled
to the contingent increase in interest rate provided for (in the event of a
failure to consummate the Exchange Offer in accordance with the terms of the
Registration Rights Agreement) pursuant to the Registration Rights Agreement.
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THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
The Old Notes were sold by the Company on November 26, 1997 to the
Initial Purchasers, which placed the Old Notes with certain institutional
investors in reliance on Section 4(2) of, and Rule 144A under, the Securities
Act. In connection with the sale of the Old Notes, the Company entered into the
Registration Rights Agreement, pursuant to which the Company agreed to use its
best efforts to consummate an offer to exchange the Old Notes for the New Notes
pursuant to an effective registration statement on or before April 10, 1998. A
copy of the Registration Rights Agreement has been filed as an exhibit to this
Registration Statement. Unless the context requires otherwise, the term "Holder"
with respect to the Exchange Offer means any person in whose name Old Notes are
registered on the books of the Company or any other person who has obtained a
properly completed bond power from the registered Holder, or any person whose
Old Notes are held of record by DTC who desires to deliver such Old Notes by
book-entry transfer at DTC.
The Company has not requested, and does not intend to request, an
interpretation by the staff of the Commission with respect to whether the New
Notes issued pursuant to the Exchange Offer in exchange for the Old Notes may be
offered for sale, resold or otherwise transferred by any Holder without
compliance with the registration and prospectus delivery provisions of the
Securities Act. Based on interpretations by the staff of the Commission set
forth in no-action letters issued to third parties, the Company believes that
New Notes issued pursuant to the Exchange Offer in exchange for Old Notes may be
offered for resale, resold and otherwise transferred by any Holder of such New
Notes (other than any such Holder that is an "affiliate" of the Company, within
the meaning of Rule 405 under the Securities Act and except in the case of
broker-dealers, as set forth below) without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such New
Notes are acquired in the ordinary course of such Holder's business and such
Holder has no arrangement or understanding with any person to participate in the
distribution of such New Notes. Any Holder who tenders in the Exchange Offer for
the purpose of participating in a distribution of the New Notes or who is an
affiliate of the Company may not rely on such interpretation by the staff of the
Commission and must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any secondary resale
transaction. Each broker-dealer that receives New Notes for its own account in
exchange for Old Notes, where such Old Notes were acquired by such broker-dealer
as a result of market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any resale of
such New Notes. See "Plan of Distribution."
By tendering in the Exchange Offer, each Holder of Old Notes will
represent to the Company that, among other things, (i) the New Notes acquired
pursuant to the Exchange Offer are being obtained in the ordinary course of
business of the person receiving such New Notes, whether or not such person is
such Holder, (ii) neither the Holder of Old Notes, nor any such other person,
has an arrangement or understanding with any person to participate in the
distribution of such New Notes, (iii) if the Holder is not a broker-dealer, or
is a broker-dealer but will not receive New Notes for its own account in
exchange for Old Notes, neither the Holder, nor any such other person, is
engaged in or intends to participate in the distribution of such New Notes and
(iv) neither the Holder nor any such other person is an "affiliate" of the
Company within the meaning of Rule 405 under the Securities Act or, if such
Holder is an "affiliate," that such Holder will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent applicable.
Following the consummation of the Exchange Offer, Holders of Old Notes
not tendered will not have any further registration rights and the Old Notes
will continue to be subject to certain restrictions on transfer. Accordingly,
the liquidity of the market for the Old Notes could be adversely affected.
Terms of the Exchange Offer
Upon the terms and subject to the conditions set forth in this
Prospectus and in the Letter of Transmittal, the Company will accept any and all
Old Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City
time, on the Expiration Date. Subject to the minimum denomination requirements
of the New Notes, the Company will issue $1,000 principal amount of New Notes in
exchange for each $1,000 principal amount of
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outstanding Old Notes accepted in the Exchange Offer. Holders may tender some or
all of their Old Notes pursuant to the Exchange Offer. However, Old Notes may be
tendered only in integral multiples of $1,000 principal amount.
The forms and terms of the New Notes will be identical in all material
respects to the forms and terms of the corresponding Old Notes, except that the
offer and sale of the New Notes will have been registered under the Securities
Act and, therefore, the New Notes will not bear legends restricting the transfer
thereof. The Exchange Offer is not conditioned upon any minimum aggregate
principal amount of Old Notes being tendered for exchange. As of _______, 1998,
$275,000,000 aggregate principal amount of the Old Notes were outstanding. This
Prospectus, together with the Letter of Transmittal, is being sent to all
Holders as of ________, 1998. Holders of Old Notes do not have any appraisal or
dissenters' rights under the Indenture in connection with the Exchange Offer.
The Company intends to conduct the Exchange Offer in accordance with the
applicable requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder.
The Company shall be deemed to have accepted validly tendered Old Notes
when, as and if the Company has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering Holders
for the purpose of receiving the New Notes from the Company. If any tendered Old
Notes are not accepted for exchange because of an invalid tender, the occurrence
of certain other events set forth herein or otherwise, such unaccepted Old Notes
will be returned, without expense, to the tendering Holder thereof as promptly
as practicable after the Expiration Date.
Holders who tender Old Notes in the Exchange Offer will not be required
to pay brokerage commissions or fees or, subject to the instructions in the
Letter of Transmittal, transfer taxes with respect to the exchange of Old Notes
pursuant to the Exchange Offer. The Company will pay all charges and expenses,
other than certain applicable taxes, in connection with the Exchange Offer. See
" -- Fees and Expenses."
Expiration Date; Extensions; Amendments
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
_____________, 1998, [20 BUSINESS DAYS AFTER THE COMMENCEMENT OF THE EXCHANGE
OFFER] unless the Company in its sole discretion, extends the Exchange Offer, in
which case the term "Expiration Date" shall mean the latest date and time to
which the Exchange Offer is extended. Although the Company has no current
intention to extend the Exchange Offer, the Company reserves the right to extend
the Exchange Offer at any time and from time to time by giving oral or written
notice to the Exchange Agent and by timely public announcement communicated,
unless otherwise required by applicable law or regulation, by making a release
to the Dow Jones News Service. During any extension of the Exchange Offer, all
Old Notes previously tendered pursuant to the Exchange Offer and not withdrawn
will remain subject to the Exchange Offer. The date of the exchange of the New
Notes for Old Notes will be the first AMEX trading day following the Expiration
Date.
The Company expressly reserves the right to (i) terminate the Exchange
Offer and not accept for exchange any Old Notes if any of the events set forth
below under " -- Conditions to the Exchange Offer" shall have occurred and shall
not have been waived by the Company and (ii) amend the terms of the Exchange
Offer in any manner that, in its good faith judgment, is advantageous to the
Holders of the Old Notes, whether before or after any tender of the Old Notes.
Should the Company materially amend the terms of the Exchange Offer, all Holders
who had previously tendered their Old Notes will be resolicited as may be
required by applicable law.
Procedures for Tendering
The tender to the Company of Old Notes by a Holder thereof pursuant to
one of the procedures set forth below will constitute an agreement between such
Holder and the Company in accordance with the terms and subject to the
conditions set forth herein and in the Letter of Transmittal signed by such
holder. A Holder of the Old Notes may tender such Old Notes by (i) properly
completing and signing a Letter of Transmittal or a facsimile thereof (all
references in this Prospectus to a Letter of Transmittal shall be deemed to
include a facsimile thereof) and delivering the same, together with any
corresponding certificate or certificates representing the Old Notes being
tendered (if in certificated form) and any required signature guarantees, to the
Exchange Agent at its address set forth in the
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Letter of Transmittal on or prior to the Expiration Date (or complying with the
procedure for book-entry transfer described below) or (ii) complying with the
guaranteed delivery procedures described below.
If tendered Old Notes are registered in the name of the signer of the
Letter of Transmittal and the New Notes to be issued in exchange therefor are to
be issued (and any untendered Old Notes are to be reissued) in the name of the
registered holder (which term, for the purposes described herein, shall include
any participant in DTC whose name appears on a security listing as the owner of
Old Notes), the signature of such signer need not be guaranteed. In any other
case, the tendered Old Notes must be endorsed or accompanied by written
instruments of transfer in form satisfactory to the Company and duly executed by
the registered Holder and the signature on the endorsement or instrument of
transfer must be guaranteed by a member firm of a registered national securities
exchange or of the National Association of Securities Dealers, Inc., a
commercial bank or trust company having an office or correspondent in the United
States or an "eligible guarantor institution" as defined by Rule 17Ad-15 under
the Exchange Act (any of the foregoing hereinafter referred to as an "Eligible
Institution"). If the New Notes and/or the Old Notes not exchanged are to be
delivered to an address other than that of the registered Holder appearing on
the register for the Old Notes, the signature in the Letter of Transmittal must
be guaranteed by an Eligible Institution.
THE METHOD OF DELIVERY OF OLD NOTES, LETTER OF TRANSMITTAL AND ALL
OTHER DOCUMENTS IS AT THE ELECTION AND RISK OF THE HOLDER. IF SUCH DELIVERY IS
BY MAIL, IT IS RECOMMENDED THAT REGISTERED MAIL, PROPERLY INSURED, WITH RETURN
RECEIPT REQUESTED, BE USED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO
ASSURE TIMELY DELIVERY. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO
THE COMPANY.
The Company understands that the Exchange Agent will make a request
promptly after the date of this Prospectus to establish an account with respect
to the Old Notes at DTC for the purpose of facilitating the Exchange Offer, and
subject to the establishment thereof, any financial institution that is a
participant in DTC's system may make book-entry delivery of Old Notes by causing
DTC to transfer such Old Notes into the Exchange Agent's account with respect to
the Old Notes in accordance with DTC's procedure for such transfer. Although
delivery of the Old Notes may be effected through book-entry transfer into the
Exchange Agent's account at DTC, an appropriate Letter of Transmittal with any
required signature guarantee and all other revised documents must in each case
be transmitted to and received or confirmed by the Exchange Agent at the address
set forth in the Letter of Transmittal on or prior to the Expiration Date, or,
if the guaranteed delivery procedures described below are complied with, within
the time period provided under such procedures.
If the Holder desires to accept the Exchange Offer and time will not
permit a Letter of Transmittal or Old Notes to reach the Exchange Agent before
the Expiration Date or the procedure for book-entry transfer cannot be completed
on a timely basis, a tender may be effected if the Exchange Agent has received
at its office, on or prior to the Expiration Date, a letter, telegram or
facsimile transmission from an Eligible Institution setting forth the name and
address of the tendering Holder, the name(s) in which the Old Notes are
registered and the certificate number(s) of the Old Notes to be tendered, and
stating that the tender is being made thereby and guaranteeing that, within
three AMEX trading days after the date of execution of such letter, telegram or
facsimile transmission by the Eligible Institution, such Old Notes, in proper
form for transfer (or a confirmation of book-entry transfer of such Old Notes
into the Exchange Agent's account at DTC), will be delivered by such Eligible
Institution together with a properly completed and duly executed Letter of
Transmittal (and any other required documents). Unless Old Notes being tendered
by the above-described method are deposited with the Exchange Agent within the
time period set forth above (accompanied or preceded by a properly completed
Letter of Transmittal and any other required documents), the Company may, at its
option, reject the tender. Copies of a Notice of Guaranteed Delivery, which may
be used by Eligible Institutions for the purposes described in this paragraph,
are available from the Exchange Agent.
A tender will be deemed to have been received as of the date when (i)
the tendering Holder's properly completed and duly signed Letter of Transmittal
accompanied by the Old Notes (or a confirmation of book-entry transfer of such
Old Notes into the Exchange Agent's account at DTC), is received by the Exchange
Agent or (ii) a Notice of Guaranteed Delivery or letter, telegram or facsimile
transmission to similar effect (as provided above) from an Eligible Institution
is received by the Exchange Agent. Issuances of New Notes in exchange for Old
Notes
-25-
<PAGE>
tendered pursuant to a Notice of Guaranteed Delivery or letter, telegram or
facsimile transmission to similar effect (as provided above) by an Eligible
Institution will be made only against submission of a duly signed Letter of
Transmittal (and any other required documents) and deposit of the tendered Old
Notes.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance for exchange of any tender of Old Notes will be
determined by the Company, whose determination will be final and binding. The
Company reserves the absolute right to reject any or all tenders not in proper
form or the acceptance for exchange of which may, in the opinion of the
Company's counsel, be unlawful. The Company also reserves the absolute right to
waive any of the conditions of the Exchange Offer or any defect or irregularity
in the tender of any Old Notes. None of the Company, the Exchange Agent or any
other person will be under any duty to give notification of any defects or
irregularities in tenders or will incur any liability for failure to give any
such notification. Any Old Notes received by the Exchange Agent that are not
validly tendered and as to which the defects or irregularities have not been
cured or waived, or if Old Notes are submitted in an aggregate principal amount
greater than the aggregate principal amount of Old Notes being tendered by such
tendering Holder, will be returned by the Exchange Agent to the tendering
holders, unless otherwise provided in the Letter of Transmittal, as soon as
practicable following the Expiration Date.
In addition, the Company reserves the right in its sole discretion to
(a) purchase or make offers for any Old Notes that remain outstanding subsequent
to the Expiration Date and (b) to the extent permitted by applicable law,
purchase Old Notes in the open market, in privately negotiated transactions or
otherwise. The terms of any such purchases or offers will differ from the terms
of the Exchange Offer.
Terms and Conditions of the Letter of Transmittal
The Letter of Transmittal contains, among other things, the following
terms and conditions, which are part of the Exchange Offer.
The party tendering Old Notes for exchange (the "Transferor")
exchanges, assigns and transfers the Old Notes to the Company and irrevocably
constitutes and appoints the Exchange Agent as the Transferor's agent and
attorney-in-fact to cause the Old Notes to be assigned, transferred and
exchanged. The Transferor represents and warrants that it has full power and
authority to tender, exchange, assign and transfer the Old Notes and to acquire
New Notes issuable upon the exchange of such tendered Old Notes, and that, when
the same are accepted for exchange, the Company will acquire good and
unencumbered title to the tendered Old Notes, free and clear of all liens,
restrictions, charges and encumbrances and not subject to any adverse claim. The
Transferor also warrants that it will, upon request, execute and deliver any
additional documents deemed by the Company to be necessary or desirable to
complete the exchange, assignment and transfer of tendered Old Notes or transfer
ownership of such Old Notes on the account books maintained by DTC. All
authority conferred by the Transferor will survive the death, bankruptcy or
incapacity of the Transferor and every obligation of the Transferor will be
binding upon the heirs, legal representatives, successors, assigns, executors
and administrators of such Transferor.
By executing a Letter of Transmittal, each Holder will make to the
Company the representations set forth above under the heading " -- Purpose and
Effect of the Exchange Offer."
Withdrawal of Tenders
Tenders of Old Notes pursuant to the Exchange Offer are irrevocable,
except that Old Notes tendered pursuant to the Exchange Offer may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date.
To be effective, a written, telegraphic or facsimile transmission
notice of withdrawal must be timely received by the Exchange Agent at the
address set forth in the Letter of Transmittal prior to 5:00 p.m., New York City
time on the Expiration Date. Any such notice of withdrawal must specify the
holder named in the Letter of Transmittal as having tendered Old Notes to be
withdrawn, the certificate numbers and designation of Old Notes to be withdrawn,
the principal amount of Old Notes delivered for exchange, a statement that such
Holder is withdrawing his election to have such Old Notes exchanged, and the
name of the registered Holder of such Old
-26-
<PAGE>
Notes, and must be signed by the Holder in the same manner as the original
signature on the Letter of Transmittal (including any required signature
guarantees) or be accompanied by evidence satisfactory to the Company that the
person withdrawing the tender has succeeded to the beneficial ownership of the
Old Notes being withdrawn. The Exchange Agent will return the properly withdrawn
Old Notes promptly following receipt of notice of withdrawal. If Old Notes have
been tendered pursuant to the procedure for book-entry transfer, any notice of
withdrawal must specify the name and number of the account at DTC to be credited
with the withdrawn Old Notes or otherwise comply with DTC procedure. All
questions as to the validity of notices of withdrawal, including time of
receipt, will be determined by the Company, and such determination will be final
and binding on all parties.
Conditions to the Exchange Offer
Notwithstanding any other provision of the Exchange Offer, or any
extension of the Exchange Offer, the Company will not be required to issue New
Notes in exchange for any properly tendered Old Notes not theretofore accepted
and may terminate the Exchange Offer, or, at its option, modify or otherwise
amend the Exchange Offer, if either of the following events occur:
(a) any statute, rule or regulation shall have been enacted, or any
action shall have been taken by any court or governmental authority
which, in the sole judgment of the Company, would prohibit, restrict or
otherwise render illegal consummation of the Exchange Offer, or
(b) there shall occur a change in the current interpretation by the
staff of the Commission which, in the Company's sole judgment, might
materially impair the Company's ability to proceed with the Exchange
Offer.
The Company expressly reserves the right to terminate the Exchange
Offer and not accept for exchange any Old Notes upon the occurrence of either of
the foregoing conditions (which represent all of the material conditions to the
acceptance by the Company of properly tendered Old Notes).
The foregoing conditions are for the sole benefit of the Company and
may be waived by the Company, in whole or in part, in its sole discretion. The
foregoing conditions must be either satisfied or waived prior to termination of
the Exchange Offer. Any determination made by the Company concerning an event,
development or circumstance described or referred to above will be final and
binding on all parties.
Exchange Agent
Bank One, N.A. has been appointed as Exchange Agent for the Exchange
Offer. Questions and requests for assistance, requests for additional copies of
this Prospectus or of the Letter of Transmittal and requests for Notices of
Guaranteed Delivery should be directed to the Exchange Agent addressed as
follows:
By Mail (registered or certified mail recommended):
Bank One, N.A.
100 E. Broad Street
Columbus, Ohio 43215-3607
By Overnight Courier:
Bank One, N.A.
100 E. Broad Street
Columbus, Ohio 43215-3607
By Hand Delivery:
Bank One, N.A.
100 E. Broad Street
Columbus, Ohio 43215-3607
-27-
<PAGE>
By Facsimile: (614) 248-2566 Confirm by Telephone: (614) 248-5811
(For Eligible Institutions Only)
Fees and Expenses
The expense of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitations
may be made by telegraph, telephone or in person by officers and regular
employees of the Company and its affiliates. No additional compensation will be
paid to any such officers and employees who engage in soliciting tenders.
The Company has not retained any dealer-manager or other soliciting
agent in connection with the Exchange Offer and will not make any payments to
brokers, dealers or others soliciting acceptances of the Exchange Offer. The
Company, however, will pay the Exchange Agent reasonable and customary fees for
its services and will reimburse it for its reasonable out-of-pocket expenses in
connection therewith. The Company may also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this Prospectus, the Letter of
Transmittal and related documents to the beneficial owners of the Old Notes and
in handling or forwarding tenders for exchange.
The expenses to be incurred in connection with the Exchange Offer,
including fees and expenses of the Exchange Agent and Trustee and accounting and
legal fees of the Company, will be paid by the Company.
The Company will pay all transfer taxes, if any, applicable to the
exchange of Old Notes pursuant to the Exchange Offer. If, however, New Notes, or
Old Notes for principal amounts not tendered or accepted for exchange, are to be
delivered to, or are to be issued in the name of, any person other than the
registered Holder of the Old Notes tendered or if a transfer tax is imposed for
any reason other than the exchange of Old Notes pursuant to the Exchange Offer,
then the amount of any such transfer taxes (whether imposed on the registered
Holder or any other persons) will be payable by the tendering Holder. If
satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering Holder.
Accounting Treatment
The New Notes will be recorded at the same carrying value as the Old
Notes as reflected in the Company's accounting records on the date of the
exchange because the exchange of the Old Notes for the New Notes is the
completion of the selling process contemplated in the issuance of the Old Notes.
Accordingly, no gain or loss for accounting purposes will be recognized. The
expenses of the Exchange Offer and the unamortized expenses related to the
issuance of the Old Notes will be amortized over the term of the New Notes.
Other
Participation in the Exchange Offer is voluntary and Holders should
carefully consider whether to accept. Holders of the Old Notes are urged to
consult their financial and tax advisors in making their own decisions on what
action to take.
No person has been authorized to give any information or to make any
representations in connection with the Exchange Offer other than those contained
in this Prospectus. If given or made, such information or representations should
not be relied upon as having been authorized by the Company. Neither the
delivery of this Prospectus nor any exchange made hereunder shall, under any
circumstances, shall create any implication that there has been no change in the
affairs of the Company since the respective dates as of which information is
given herein. The Exchange Offer is not being made to (nor will tenders be
accepted from or on behalf of) Holders of Old Notes in any jurisdiction in which
the making of the Exchange Offer or the acceptance thereof would not be in
compliance with the laws of such jurisdiction. However, the Company may, at its
discretion, take such action as it may deem necessary to make the Exchange Offer
in any such jurisdiction and extend the Exchange Offer to Holders of Old Notes
in such jurisdiction.
-28-
<PAGE>
As a result of the making of the Exchange Offer, the Company will have
fulfilled a covenant contained in the Registration Rights Agreement. Holders of
the Old Notes who do not tender their Old Notes in the Exchange Offer will
continue to hold such Old Notes and will be entitled to all the rights and
limitations applicable thereto under the Indenture except for any such rights
under the Registration Rights Agreement and except that the Old Notes will not
be entitled to the contingent increase in interest rate provided for in the Old
Notes. All untendered Old Notes will continue to be subject to the restrictions
on transfer set forth in the Indenture and the Old Notes. To the extent that Old
Notes are tendered and accepted in the Exchange Offer, the trading market, if
any, for untendered Old Notes could be adversely affected.
USE OF PROCEEDS
The Company will not receive any cash proceeds from the issuance of the
New Notes offered hereby. In consideration for issuing the New Notes as
contemplated in this Prospectus, the Company will receive in exchange Old Notes
in like principal amount, the terms of which are identical in all material
respects to the New Notes, except that the offer and sale of such New Notes will
be registered under the Securities Act and, therefore, will not bear legends
restricting the transfer thereof. Old Notes surrendered in exchange for New
Notes will be retired and canceled and cannot be reissued. Accordingly, issuance
of the New Notes will not result in a change in the indebtedness of the Company.
The Company received gross proceeds of approximately $275.0 million
from the November Offering. Additionally, the Company borrowed an aggregate of
$75.0 million pursuant to the Term Loan Agreement, the net proceeds of which
were, together with the proceeds of the November Offering, used to defease the
93/8% Notes, which 93/8% Notes have a maturity date of November 15, 2003 and
reduce outstanding borrowings under the Revolving Credit Facility , which
matures on May 3, 1999 and bears interest at the Citibank prime rate plus 1.0%
and/or a Eurodollar rate margin plus 2.25%.
-29-
<PAGE>
CAPITALIZATION
The following table sets forth short-term debt and the current portion
of long-term debt and the consolidated capitalization of the Company as of
December 31, 1997 which gives effect to the November Offering and the
application of the net proceeds therefrom. See "Use of Proceeds," "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Selected Consolidated Financial Data." This table should be read in conjunction
with the Consolidated Financial Statements included elsewhere in this
Prospectus.
As of December 31, 1997
------------------------
Actual
(in thousands)
Short-term debt....................................... $ 89,800
Current portion of long-term debt 199
Long-term debt:
9 1/4% Senior Notes offered hereby.............. 273,966
Term Loan....................................... 75,000
93/8% Senior Notes.............................. --
Other debt...................................... 938
---------
Total long-term debt......................... 349,904
---------
Stockholder's equity:
Common stock.......................................... --
Additional paid-in capital........................... 272,065
Accumulated earnings (deficit)(1)..................... (157,353)
---------
Total stockholder's equity................... 114,712
---------
Total capitalization.................................. $554,615
=========
See Notes H and I of Notes to Consolidated Financial Statements.
(1) On a pro forma basis, if the borrowings under the Term Loan Agreement
had been incurred and the Old Notes had been issued as of January 1,
1997, the accumulated deficit in earnings would have been $5.9 million
higher and stockholder's equity would have been $5.9 million lower, due
to additional interest expense of $9.1 million (pre-tax).
-30-
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth selected consolidated financial data of
the Company for each of the five years in the period ended December 31, 1997.
Such information is derived from the consolidated financial statements of the
Company which have been audited by Price Waterhouse LLP, independent
accountants. EBITDA is operating income plus depreciation, amortization and
special charges. The Company has included EBITDA because it is commonly used by
certain investors and analysts to analyze and compare companies on the basis of
operating performance, leverage and liquidity and to determine a company's
ability to service debt. EBITDA does not represent cash flows as defined by
generally accepted accounting principles and does not necessarily indicate that
cash flows are sufficient to fund all of the Company's cash needs. EBITDA should
not be considered in isolation or as a substitute for net income (loss), cash
flows from operating activities or other measures of liquidity determined in
accordance with generally accepted accounting principles. This information
should be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and the consolidated financial
statements and related consolidated notes thereto included elsewhere herein.
<TABLE>
<CAPTION>
Fiscal Year Ended December 31,
-------------------------------------------------------------------------------
1993 1994 1995 1996 1997(6)
----- ---- ---- ---- -----
(in thousands)
<S> <C> <C> <C> <C> <C>
Net Sales................... $1,046,795 $1,193,878 $1,267,869 $1,110,684 $489,662
Cost of products sold (excluding
depreciation and profit sharing) 876,814 980,044 1,059,622 988,161 585,609
Depreciation................ 57,069 61,094 65,760 66,125 46,203
Profit sharing.............. 4,819 9,257 6,718 -- --
Selling, administrative and general
expenses................. 58,564 60,832 55,023 54,903 52,222
Special charges(1).......... -- -- -- -- 92,701
------- ------- ------- ------- ---------
Operating income (loss)..... 49,529 82,651 80,746 1,495 (287,073)
Interest expense............ 21,373 22,581 22,431 23,763 27,204
Other income (expense)...... 11,965 6,731 3,234 9,476 (221)
B & LE lawsuit settlement... -- 36,091 -- -- --
------- -------- ------- ------- --------
Income (loss) before taxes,
extraordinary items and
cumulative effect of change in
accounting method........ 40,121 102,892 61,549 (12,792) (314,498)
Tax provision (benefit)..... 9,400 21,173 3,030 (7,509) (110,035)
-------- ------- ------- -------- ---------
Income (loss) before extraordinary
items and cumulative effect of
change in accounting method
(2)...................... $ 30,721 $81,719 $ 58,519 $ (5,283) $ (204,463)
======== ======== ======== ========== ============
Financial Ratios and Other Data:
EBITDA...................... $106,598 $143,745 $146,506 $ 67,620 (148,169)
Capital expenditures........ 73,652 69,139 81,554 31,188 33,755
Depreciation................ 57,069 61,094 65,760 66,125 46,203
Ratio of earnings to fixed
charges(3)............... 2.0x 3.7x 2.5x -- --
Selected Operating Data:
Tons shipped (000's)........ 2,251 2,397 2,385 2,105 851
Percent value-added products 67.9% 68.6% 70.1% 71.9% 67.9%
Dollars per shipped ton:
Sales.................... $465 $498 $532 $528 $576
Cost of products sold
(excluding depreciation and
profit sharing) 390 409 444 469 689
Gross profit............. 75 89 88 59 (113)
EBITDA.................. 47 60 61 32 (174)
Operating income (loss).. 22 34 34 1 (338)
Average number of active
employees(4)............. 5,381 5,402 5,333 5,228 3,878
Man-hours per net ton shipped(5) 4.91 4.58 4.62 4.54 4.95
Raw steel production (000's of
tons).................... 2,260 2,270 2,200 1,780 663
Capacity utilization........ 94% 95% 92% 74% 28%
</TABLE>
-31-
<PAGE>
<TABLE>
<CAPTION>
As of December 31,
--------------------------------------------------------------------------------
1993 1994 1995 1996 1997
----- ---- ---- ----- ----
(in thousands)
Balance Sheet Data:
<S> <C> <C> <C> <C> <C>
Cash, cash equivalents and
short term investments...... $279,856 $12,778 $42,826 $35,950 $ 0
Working capital (excluding
cash, cash equivalents
and short-term
investments)............. 118,195 129,137 104,973 73,072 9,169
Property, plant and
equipment, net........... 748,673 732,615 748,999 710,999 694,108
Total assets................ 1,491,600 1,266,372 1,340,035 1,245,892 1,424,568
Total debt (including
current portion)......... 350,279 292,825 288,740 269,414 439,903
Stockholder's equity........ 432,283 246,194 343,770 338,487 114,712
</TABLE>
- ----------------------
(1) Includes a special charge for benefits included in the New Labor
Agreement related to enhanced retirement benefits, 1997 bonuses and
special assistance payments for those not returning to work
immediately.
(2) The Company adopted Statement of Financial Accounting Standard No. 112,
"Accounting for Post-employment Benefits" in 1994 and recorded a charge
of $12.2 million ($10.0 million net of tax). These benefits include,
among others, disability, severance and workmen's compensation.
(3) For the purpose of computing the ratio of earnings to fixed charges,
earnings consist of earnings before income taxes, extraordinary items
and fixed charges. Fixed charges consist of interest expense and the
portion of rental expense deemed representative of the interest factor.
For the years ended December 31, 1996 and December 31, 1997, earnings
were not sufficient to cover fixed charges. Additional earnings of
$24.8 million for 1996 and $315.5 for 1997 would have been required to
achieve a ratio of 1.0 for such periods.
(4) "Average number of active employees" is calculated for each period as
the quotient of: the sum of total salaried and hourly employees paid
for one pay period of each month, as determined from the mid-month
salaried and hourly payroll registers, divided by the total number of
months in the respective period.
(5) "Man-hours per net ton shipped" is calculated for each period as the
quotient of: the sum of total hours worked for all union and non-union
employees for the related period plus an estimated amount of 173 hours
worked per month for each of the Company's salaried employees, divided
by the sum of total tons.
(6) On a pro forma basis, if the borrowings under the Term Loan Agreement
had been incurred and the Old Notes had been issued as of January 1,
1997, the net loss would have increased by $5.9 million due to
additional interest expense of $9.1 million (pre-tax) and stockholder's
equity would have been $5.9 million less.
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<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Introduction
OVERVIEW
The Company was reorganized on January 3, 1991 with a business strategy
of shifting its product mix to value-added products through downstream expansion
and acquisitions. In July 1994, a new holding company, WHX, which separated the
steel related operations from non-steel related businesses, was created. The
Company comprises primarily all of the steel related operations of WHX.
On August 12, 1997, the Company and the USWA entered into the New Labor
Agreement which settled the Strike. The Strike directly affected facilities
accounting for approximately 80% of the Company's steel shipments on an annual
basis. The Company believes the five year term of the New Labor Agreement
provides the Company with a significant competitive advantage since a majority
of the Company's integrated steel competitors have labor contracts that expire
in 1999. The New Labor Agreement provides for a restructuring of work rules and
manning requirements and a reduction in the expense associated with retiree
healthcare costs. The improved work rules allow the Company to eliminate 850
hourly jobs (approximately 20% of the work force) which the Company believes
will materially reduce its labor costs. Partially offsetting these savings are
wage increases and the costs of the DB Plan, which includes a retirement
incentive. Based on actual wage and certain direct employee benefits costs
during the first nine months of 1996 for employees represented by the USWA, the
elimination of 850 USWA-represented employees working a standard number of hours
per year would have resulted in estimated annual labor cost savings of
approximately $45.0 million.
All of the Company's production facilities resumed operations as of
September 30, 1997. Raw steel production achieved 90% of capacity in the fourth
quarter of 1997. The Company expects to achieve pre-Strike levels of raw steel
production and increased shipments of a higher value-added product mix during
the first half of 1998.
1997 Compared to 1996
Net sales for the year ended December 31, 1997 totaled $489.7 million
on shipments of 850.5 thousand tons of steel products, compared to $1,110.7
million on shipments of 2.1 million tons in the year ended December 31, 1996.
The decrease in sales and tons shipped is primarily attributable to the Strike
at eight plants located in Ohio, Pennsylvania and West Virginia. Production and
shipment of steel products at these plants ceased on October 1, 1996 and the
Strike continued to August 12, 1997. Average net sales per ton increased 9.1%
from $528 per ton shipped to $576 because higher value-added products continued
to be shipped during the strike from other locations.
Cost of products sold increased to $689 per ton shipped in 1997 from
$469 in 1996. This increase reflects the effect of high fixed cost and low
capacity utilization and higher levels of external steel purchases due to the
work stoppage, higher costs for natural gas and a higher value-added product
mix. In addition, cost of products sold were adversely affected by a door
rehabilitation program at the Company's number 8 coke battery. The operating
rate for 1997 was 27.6%. The operating rate for the nine months prior to the
Strike was 98.9%, but dropped to 74.0% for 1996. Raw steel production was 100%
continuous cast.
Depreciation expense decreased 30.1% to $46.2 million in 1997,
compared to $66.1 million in 1996, due to lower levels of raw steel production
and its effect on units of production depreciation methods. Raw steel production
decreased by 62.8%.
-33-
<PAGE>
Selling, administrative and general expense decreased 4.9% to $52.2
million in 1997, from $54.9 million in 1996. The decrease is due to the reduced
level of operations.
In 1997 the Company recorded a special charge of $92.7 million related
to the New Labor Agreement. The special charge included $66.7 million for
enhanced retirements, $15.5 million for signing and retention bonuses, $3.8
million for special assistance payments and other employee benefits and $6.7
million for a grant of one million stock options to WPN Corp. ("WPN") for its
performance in negotiating the new labor agreement.
Interest expense increased to $27.2 million in 1997 from $23.8 million
in 1996. The increase is due primarily to higher levels of borrowings under the
Revolving Credit Facility.
Other income/expense decreased to expense of $.2 million in 1997 from
income of $9.5 million in 1996. The decrease is due to recognition of an equity
loss for the OCC joint venture in 1997 totaling $8.5 million. Equity losses on
joint ventures totaled $1.2 million in 1997 compared to income of $9.5 million
in 1996. Interest and investment income totaled $4.2 million in 1997 and $3.9
million in 1996. Accounts receivable securitization fees totaled $3.8 million in
1997 compared to $4.9 million in 1996 due to lower activity during the Strike
period.
The tax benefits for 1997 and 1996 were $110.0 million and $7.5
million, respectively, before recording a tax benefit related to extraordinary
charges in 1997.
Income (loss) before extraordinary items in 1997 totaled $(204.5)
million, compared to $(5.3) million in 1996.
The 1997 extraordinary charge of $40.0 million ($26.0 million net of
tax) reflects the premium and interest of $37.4 million on the legal defeasance
of long term debt, and $2.6 million for coal miner retiree medical expense
attributable to the allocation of additional retirees to the Company by the
Social Security Administration (SSA).
Net loss totaled $230.5 million in 1997, compared to net loss of $5.3
million in 1996.
1996 Compared to 1995
Net sales for the year ended December 31, 1996 totaled $1,110.7 million
on shipments of 2.1 million tons of steel products. Net sales for the year ended
December 31, 1995 totaled $1,267.9 million on shipments of 2.4 million tons. The
decrease in sales and tons shipped is primarily attributable to the Strike at
eight plants located in Ohio, Pennsylvania and West Virginia. Production and
shipment of steel products at these plants ceased on October 1, 1996 . Shipments
in the fourth quarter of 1996 decreased to 207,000 tons compared to 582,000 tons
shipped in the fourth quarter of 1995. Also, steel prices declined 3.8% in 1996
compared to the prior year, but were partially offset by a higher value-added
product mix. Average sale price per ton decreased to $528 per ton in the year
ended December 31, 1996 from $532 per ton in the year ended December 31, 1995.
Cost of products sold increased to $469 in the year ended December 31,
1996 from $444 per ton shipped in the year ended December 31, 1995 . This
increase reflects the volume effect of lower production on fixed cost absorption
and higher levels of external steel purchases due to the Strike, higher costs
for coal, ore and natural gas and a higher value-added product mix. The
operating rate for the nine months prior to the Strike was 98.9%, but dropped to
74.0% for the full twelve months of 1996 compared to 91.6% in 1995. Raw steel
production is 100% continuous cast.
Depreciation expense increased to $66.1 million in the year ended
December 31, 1996 from $65.8 million in the year ended December 31, 1995.
Increased depreciation attributable to higher amounts of depreciable property
were partially offset by lower levels of raw steel production and its effect on
units of production depreciation method.
No profit sharing was earned in the year ended December 31, 1996 as a
result of the Strike and its impact on pre-tax income. Profit sharing totaled
$6.7 million in the year ended December 31, 1995.
-34-
<PAGE>
Selling, administrative and general expense remained stable, decreasing
to $54.9 million in the year ended December 31, 1996 compared to $55.0 million
in the year ended December 31, 1995.
Interest expense increased to $23.8 million in the year ended December
31, 1996 from $22.4 million in the year ended December 31, 1995 due to a
reduction in capitalized interest from $6.4 million in the year ended December
31, 1995 to $2.5 million in the year ended December 31, 1996. The reduction in
capitalized interest reflects lower amounts of capital expenditures and shorter
construction periods in the year ended December 31, 1996.
Other income increased to $9.5 million in the year ended December 31,
1996 from $3.2 million in the year ended December 31, 1995. The increase is
principally due to a $4.6 million improvement in equity income from investments
.
The tax provision for the year ended December 31, 1996 and the year
ended December 31, 1995 was a $7.5 million benefit and $3.0 million provision,
respectively, before recording a tax benefit related to extraordinary charges in
the year ended December 31, 1995. The tax provision (benefit) was calculated on
an alternative minimum tax basis. The 1995 provision includes the effect of
recognizing $58.0 million of deferred tax assets, but excludes the benefit of
applying $30.2 million of pre-reorganization tax benefits, which are direct
additions to paid-in-capital. There were no pre-reorganization tax benefits
applied in 1996.
Income before extraordinary charges in the year ended December 31, 1995
totaled $58.5 million. The 1995 extraordinary charge of $4.7 million ($3.0
million net of tax) reflects additional liability for coal miner retiree medical
expense attributable to the allocation of additional retirees to the Company by
the Social Security Administration.
Net loss in the year ended December 31, 1996 totaled $5.3 million. Net
income in the year ended December 31, 1995 totaled $55.5 million.
Liquidity and Capital Resources
The Company will require additional working capital to continue to fund
the re-start of its production facilities and its re-entry into the marketplace.
The Company expects that the sale during 1998 of the coke produced during the
Strike, the sale of receivables under the Receivables Facility and availability
under the Revolving Credit Facility will be adequate to fund such re-start. As
of December 31, 1997, the Company's liquidity from the above sources was in
excess of $120 million.
Net cash flow used in operating activities for 1997 totaled $175.5
million reflecting losses of $201.6 million before depreciation, taxes and a
special charge. Working capital accounts (excluding cash, short term borrowings
and current maturities of long-term debt) used $23.1 million of funds,
principally due to the prolonged Strike and related start-up cost resulting from
its labor settlement on August 12, 1997. Accounts receivable increased $19.8
million (excluding $24 million sale of trade receivables under the
securitization agreement) due to increased sales reflecting resolution of the
Strike. Inventories valued principally by the LIFO method for financial
reporting purposes, totaled $255.9 million at December 31, 1997, an increase of
$62.5 million from the prior year end. The increase in inventories is due to
increases in furnace coke (as a result of continuing coke production by salaried
workers during the Strike) and contractual commitments for iron ore pellets.
Trade payables and accruals increased $65.1 million due to higher operating
levels. Net cash flow used in investing activities for 1997 totaled $37.2
million including capital expenditures of $33.8 million. Net cash flow from
financing activities totaled $176.7 million including borrowings under the
Revolving Credit Facility of $89.8 million and net intercompany advances of
$30.6 million.
For the year ended December 31, 1997, the Company spent $33.8 million
(including capitalized interest) on capital improvements, including $12.4
million on environmental control projects. Capital expenditures were
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<PAGE>
lower than in recent years due to the Strike. Non-current accrued environmental
liabilities totaled $7.8 million at December 31, 1996 and $10.6 million at
December 31, 1997. These liabilities were determined initially in January 1991,
based on all available information, including information provided by third
parties, and existing laws and regulations then in effect, and are reviewed and
adjusted quarterly as new information becomes available. The Company does not
anticipate that assessment and remediation costs resulting from the Company's
status as a potentially responsible party will have a material adverse effect on
its financial condition or results of operations. However, as further
information comes into the Company's possession, it will continue to reassess
such evaluations. The Clean Air Act Amendment of 1990 is expected to increase
the Company's cost related to environmental compliance; however, such an
increase in cost is not reasonably estimable, but is not anticipated to have a
material adverse effect on the consolidated financial condition of the Company.
Net cash flow from operating activities for 1996 totaled $92.3 million.
Working capital accounts (excluding cash, short term investments, short term
borrowings and current maturities of long-term debt) provided $42.6 million of
funds, principally due to the Strike at eight of the Company's facilities.
Accounts receivable decreased $50.1 million (excluding $22 million payment on
trade receivable securitization transactions) due to a lower level of sales
during the Strike. Inventories valued principally by the LIFO method for
financial reporting purposes, totaled $193.3 million at December 31, 1996, a
decrease of $73.2 million from the prior year end. Trade payables and accruals
decreased $64.5 million due to lower operating levels.
For the year ended December 31, 1996, the Company spent $31.2 million
(including capitalized interest) on capital improvements, including $6.8 million
on environmental control projects. Capital expenditures were lower than in prior
years due to the Strike. Non-current accrued environmental liabilities totaled
$7.3 million at December 31, 1995 and $7.8 million at December 31, 1996.
Continuous and substantial capital and maintenance expenditures will be
required to maintain and, where necessary, upgrade operating facilities to
remain competitive, and to comply with environmental control requirements. It is
anticipated that necessary capital expenditures, including required
environmental expenditures, in future years should approximate depreciation
expense and represent a material use of operating funds. The Company anticipates
funding its capital expenditures in 1998 from cash on hand, the sale of
receivables under the Receivables Facility, availability under the Revolving
Credit Facility, and funds generated from operations.
The Company has a commitment to fund the working capital requirements
of each of OCC and Wheeling-Nisshin in proportion to its ownership interest if
cash requirements of such joint ventures are in excess of internally-generated
and available borrowed funds. The Company anticipates that Wheeling-Nisshin will
not have such funding requirements for the foreseeable future. As of December
31, 1997, the Company's investment in OCC is $20.8 million, $7.2 million of
which was invested in 1997. The Company anticipates that through December 31,
1998 additional funding requirements from the Company will be between $5.0
million and $10.0 million. OCC may also require future working capital
contributions from its equity partners; however, the Company does not believe
that any such required funding will be material to the Company's liquidity.
In August 1994 the Company entered into the Receivables Facility,
whereby it agreed to sell up to $75 million on a revolving basis, an undivided
percentage ownership in a designated pool of accounts receivable generated by
WPSC and two of the Company's subsidiaries, Wheeling Construction Products, Inc.
("WCP") and Pittsburgh-Canfield Company ("PCC") (the "Receivables Facility").
The Receivables Facility expires in August 1999. In July 1995, WPSC amended such
agreement to sell an additional $20 million on similar terms and conditions. In
October 1995, WPSC entered into an agreement to include the receivables
generated by Unimast in the pool of accounts receivable sold. Accounts
receivable at December 31, 1997, exclude $69.0 million representing accounts
receivable sold with recourse limited to the extent of uncollectible balances.
Fees paid by WPSC under the Receivables Facility range from 5.76% to 8.50% of
the outstanding amount of receivables sold. Based on the Company's collection
history, the Company believes that credit risk associated with the above
arrangement is immaterial.
WPSC has a Revolving Credit Facility with Citibank, N.A. as agent. The
Revolving Credit Facility provides for borrowing for general corporate purposes
of up to $150 million, and with a $35 million sublimit for Letters of Credit.
Interest is calculated at a Citibank prime rate plus 1.0% and/or a Eurodollar
rate plus 2.25%.
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<PAGE>
The Revolving Credit Facility expires May 3, 1999. Borrowings under the
Revolving Credit Facility are secured primarily by inventory of WPSC, PCC and
WCP, subsidiaries of the Company, and Unimast. The terms of the Revolving Credit
Facility contain various restrictive covenants, limiting among other things,
dividend payments or other distributions of assets, as defined in the Revolving
Credit Facility. Certain financial covenants associated with leverage, net
worth, capital spending, cash flow and interest coverage must also be
maintained. The Company, PCC, WCP and Unimast have each guaranteed all of the
obligations of WPSC under the Revolving Credit Facility. Borrowings outstanding
against the Revolving Credit Facility at December 31, 1997 totaled $89.8
million.
WPSC also has a separate facility with Citibank, N.A. for letters of
credit up to $50 million. At December 31, 1997 letters of credit totaling $9.3
million were outstanding under this facility. The letters of credit are
collateralized at 105% with U.S. Government securities owned by the Company, and
are subject to an administrative charge of .4% per annum on the amount of
outstanding letters of credit.
WPSC is the borrower under the Revolving Credit Facility, which is
guaranteed by WPC, two subsidiaries of the Company and Unimast, a wholly-owned
subsidiary of WHX. Unimast is also a participant in the Receivables Facility,
and its receivables are included in the pool of receivables sold. Unimast, WHX
and the Company entered into an intercreditor agreement upon the consummation of
the November Offering which provides, among other things, that Unimast and WHX
will be solely responsible for repayment of any of Unimast's borrowings under
the Revolving Credit Facility and have agreed to indemnify the Company if a
default occurs under the Revolving Credit Facility or if the Receivables
Facility is terminated as a result of a breach of either of such agreements by
Unimast. In addition, the Company is solely responsible for repayment of its
borrowings under the Revolving Credit Facility and has agreed to indemnify WHX
and Unimast if a default occurs under the Revolving Credit Facility or if the
Receivables Facility is terminated as a result of a breach of either of such
agreements by the Company. There can be no assurance, however, that in the event
of a default by Unimast or WHX, that either Unimast or WHX will be able to make
any payments to the Company required by such intercreditor agreement. In
addition, in the event Unimast causes a default under the Revolving Credit
Facility, the amounts due thereunder for all participants including the Company
could be accelerated (which could lead to an event of default under the Notes)
and the Company's ability to borrow additional funds under the Revolving Credit
Facility could be terminated. In the event such acceleration occurs, there can
be no assurance that the Company will be able to refinance such borrowings. A
failure by the Company to refinance such borrowings would have a material
adverse effect on the Company.
On November 20, 1997, the Company issued the Notes pursuant to the
November Offering. In addition, on November 20, 1997 the Company entered into
the Term Loan Agreement with DLJ Capital Funding Inc., as syndication agent,
pursuant to which the Company borrowed $75 million. Interest on the Term Loan
Agreement is payable on March 15, June 15, September 15 and December 15 as to
Base Rate Loans, and with respect to LIBOR loans on the last day of each
applicable interest period, and if such interest period shall exceed three
months, at intervals of three months after the first day of such interest
period. The Term Loan Agreement will mature on November 15, 2006. Amounts
outstanding under the Term Loan Agreement bear interest at the Base Rate (as
defined therein) plus 2.25% or the LIBOR Rate (as defined therein) plus 3.25%.
The Company's obligations under the Term Loan Agreement are guaranteed by its
operating subsidiaries. The Company may prepay the obligations under the Term
Loan Agreement beginning on November 15, 1998, subject to a premium of 2.0% of
the principal amount thereof. Such premium declines to 1.0% on November 15, 1999
with no premium on or after November 15, 2000.
The proceeds from the Notes and the Term Loan Agreement were used to
defease $266.2 million of 93/8% Notes and to pay down borrowings under the
Revolving Credit Facility.
The Company recorded an extraordinary charge of $40.0 million ($26.0
million net of tax) to cover the premium and interest of $37.4 million on the
legal defeasance of long term debt and $2.6 million for coal miner retiree
medical benefits.
Under the terms of the New Labor Agreement, the Company established a
DB Plan covering its hourly employees. In addition, the Company had recorded an
unfunded accumulated pension benefit obligation for the
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<PAGE>
recently implemented DB Plan of approximately $167.3 million, of which
approximately 75% must be funded over the next five years. In accordance with
ERISA regulations, the Company does not anticipate having to make significant
contributions to fund the obligations of the new plan in 1998, but will fund
approximately $80 million in 1999 ($40 million in the first quarter). As of
December 31, 1997, the Company had an unfunded accumulated postretirement
benefit obligation for retiree health care of approximately $301.0 million.
In 1997 the Company recorded a special charge of $92.7 million related
to the New Labor Agreement. The special charge included $66.7 million for
enhanced retirements, $15.5 million for signing and retention bonuses, $3.8
million for special assistance payments and other employee benefits and $6.7
million for a grant of one million stock options to WPN Corp. ("WPN") for its
performance in negotiating the new labor agreement.
The Company began a Year 2000 compliance project in July 1995. This
project encompasses business systems, mainframe processor systems, plant
operating systems, end-user computing systems, wide-area and voice networks, and
building and plant environmental systems. Included in the project plan is a
review of Year 2000 compliance assurance program with customers, suppliers, and
other constituents. System inventories for all affected systems are being
reviewed and work is in progress to ensure that such systems are Year 2000
compliant. Management believes, based on a current review and the ongoing
effort, that all relevant computer systems will be Year 2000 compliant by the
second quarter of 1999. Management believes that the cost of the Year 2000
project will not be material to the Company's financial position or results of
operations.
Short-term liquidity is dependent, in large part, on cash on hand,
investments, availability under the Revolving Credit Facility, sale of
receivables under the Receivables Facility, general economic conditions and
their effect on steel demand and prices. Long-term liquidity is dependent upon
the Company's ability to sustain profitable operations and control costs during
periods of low demand or pricing in order to sustain positive cash flow. The
Company believes that, based on current levels of operations and anticipated
improvements in operating results, cash flows from operations and borrowings
available under the Revolving Credit Facility will enable the Company to fund
its liquidity and capital expenditure requirements for the foreseeable future,
including scheduled payments of interest on the Notes and payments of interest
and principal on the Company's other indebtedness, including borrowings under
the Term Loan Agreement. However, external factors, such as worldwide steel
production and demand and currency exchange rates could materially affect the
Company's results of operations and financial condition. There can be no
assurance that the Company will be able to maintain its short-term and/or its
long-term liquidity. A failure by the Company to maintain its liquidity could
have a material adverse effect on the Company.
When used in the Management's Discussion and Analysis, the words
"anticipate", "estimate" and similar expressions are intended to identify
forward-looking statements within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act, which are intended to be covered by the
safe harbors created thereby. Investors are cautioned that all forward-looking
statements involve risks and uncertainty, including without limitation, the
ability of the Company to develop market and sell its products, the effects of
competition and pricing and Company and industry shipment levels. Although the
Company believes that the assumptions underlying the forward-looking statements
are reasonable, any of the assumptions could be inaccurate, and therefore, there
can be no assurance that the forward-looking statements included herein will
prove to be accurate.
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<PAGE>
BUSINESS
General
The Company is a vertically integrated manufacturer of predominantly
value-added flat rolled steel products. The Company sells a broad array of
value-added products, including cold rolled steel, tin- and zinc-coated steels
and fabricated steel products. The Company's products are sold to steel service
centers, converters, processors, the construction industry, and the container,
automotive and appliance industries. During 1997 the Company had revenues of
approximately $489.7 million on shipments of 850.5 thousand tons of steel and an
operating loss of $287.1 million. These results reflect the effects of the
Strike.
The Company believes that it is one of the low cost domestic flat
rolled steel producers. The Company's low cost structure is the result of: (i)
the restructuring of its work rules and manning requirements under its five-year
New Labor Agreement with the USWA, which settled the Company's ten-month Strike
in August 1997; (ii) the strategic balance between its basic steel operations
and its finishing and fabricating facilities; and (iii) its efficient production
of low cost, high quality metallurgical coke.
The new work rule package affords the Company substantially greater
flexibility in down-sizing its overall workforce, and assigning and scheduling
work, thereby reducing costs and increasing efficiency. Furthermore, the Company
expects to maintain pre-Strike steel production levels with 850 fewer employees
(a reduction of approximately 20% in its hourly workforce). Finally, the Company
believes the five year term provides the Company with a significant advantage
since a majority of the Company's integrated steel competitors have labor
contracts that will expire in 1999.
The Company has structured its operations so that its hot strip mill
and downstream operations have greater capacity than do its raw steel making
operations. The Company therefore can purchase slabs and ship at greater than
100% of its internal production capacity in periods of high demand, while
maintaining the ability to curtail such purchases and still operate its basic
steel facilities at or near capacity during periods of lower demand. The Company
believes this flexibility results in enhanced profitability throughout an
economic cycle. The Company also believes that it produces metallurgical coke at
a substantially lower cost than do other coke manufacturers because of its
proximity to high quality coal reserves and its efficient coke producing plant.
This reduces the Company's costs and, if coke demand remains high, allows the
Company to sell coke profitably in the spot and contract markets.
The Company conducts its operations primarily through two business
units, the Steel Division and Wheeling Corrugating. The Steel Division sells
flat rolled steel products such as hot rolled, cold rolled, coated and tin mill
steel to third parties, representing 77.8% and 73.3% of the Company's net sales
in 1995 and 1996, respectively. The Steel Division sells cold rolled and coated
steel substrate to Wheeling Corrugating for further processing. Wheeling
Corrugating, the Company's primary downstream operation, is a fabricator of
roll-formed products primarily for the construction and agricultural industries.
As part of the Company's strategy to expand its downstream operations, the
Company has acquired several fabricating facilities to enhance profit margins
and reduce exposure to downturns in steel demand. Other important examples of
the Company's downstream operations are its joint venture interests in
Wheeling-Nisshin and OCC. Wheeling-Nisshin, in which the Company owns a 35.7%
interest, produces and ships from its state-of-the-art production facility a
diverse line of galvanized, galvannealed, galvalume and aluminized products,
principally to steel service centers and the construction and automotive
industries. OCC, in which the Company owns a 50% interest, operates a new tin
coating facility that commenced commercial production in January 1997. The
Company has long-term contracts to supply up to 75% of Wheeling-Nisshin's steel
requirements and almost 100% of OCC's. These downstream operations and joint
ventures are integral to the Company's strategy of increasing shipments of
higher value-added steel products while decreasing dependence on hot rolled
coils, a lower-margin commodity steel product.
All of the Company's raw steel producing facilities have been restarted
as of September 30, 1997, and the Company expects to be at pre-Strike production
and shipment levels during the first half of 1998 although the Company does not
anticipate the purchase and processing of steel slabs in 1998.
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<PAGE>
Business Strategy
The Company's business strategy includes the following initiatives:
Improve Cost Structure. The New Labor Agreement has allowed the Company
to eliminate 850 hourly positions (approximately 20% of its pre-Strike hourly
workforce). The Company believes that these reductions, combined with the
significantly more flexible work rules under the New Labor Agreement, will allow
it to operate at pre-Strike levels with 850 fewer employees. As a result, the
Company anticipates substantial cost savings and productivity improvements once
pre-Strike production levels are reached. In addition, the Company has directed
its capital expenditures towards upgrading and modernizing its steelmaking
facilities, with a goal toward increasing productivity. These expenditures
include modernization of its hot and cold rolling facilities and a major reline
in 1995 of its No. 5 blast furnace located in Steubenville, Ohio. This reline
increased productivity and provided the Company with the ability to produce 100%
of the hot metal necessary to satisfy caster production requirements from two
rather than three blast furnaces. The Company's ability to produce low cost,
high quality metallurgical coke, helps the Company maintain lower costs than
those of many of its competitors. In addition, during periods of high demand the
Company is able to profitably sell coke produced in excess of its internal
needs.
Expand Production of Value-Added Products. The Company intends to
continue to expand its sale of value-added products such as coated and
fabricated steels in order to improve profit margins and reduce its exposure to
commodity steel market volatility. This strategy is evidenced by the Company's
expansion of Wheeling Corrugating and its emphasis on joint ventures, such as
Wheeling-Nisshin and OCC, which give the Company access to downstream markets
through long-term supply contracts. The Company will continue to target
strategic acquisitions and joint ventures that support the Company's sales of
value-added products.
Product Mix
The tables below reflect the historical product mix of the Company's
shipments, expressed in tons. The Company has realized increases in the
percentage of higher value products during the 1990's as (i) the operations of
Wheeling Corrugating were expanded and (ii) Wheeling-Nisshin's second coating
line increased its requirements for cold rolled coils from WPSC. Additionally,
the OCC joint venture should enable the Company to increase tin mill product
shipments up to an additional 91,000 tons compared to 1996 levels.
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<PAGE>
Historical Product Mix
<TABLE>
<CAPTION>
Year Ended December 31,
------------------------------------------------------------
1993 1994 1995 1996(1) 1997(1)
--------- --------- ----------- ------------- -------------
Product Category:
Higher Value-Added Products:
<S> <C> <C> <C> <C> <C>
Cold Rolled Products--Trade 11.1% 10.5% 7.9% 8.4% 5.6%
Cold Rolled Products--Wheeling-Nisshin 15.6 17.3 18.9 16.6 7.7
Coated Products 20.4 21.7 21.3 21.5 12.3
Tin Mill Products 8.8 7.2 7.1 7.5 3.3
12.0 11.9 14.9 17.9 39.0
Fabricated Products (Wheeling Corrugating) --------- --------- ----------- ------------- --------------
Higher Value-Added Products as a Percentage
of Total Shipments 67.9 68.6 70.1 71.9 67.9
Hot Rolled Products 31.2 31.4 29.9 28.1 20.0
0.9 -- -- -- 12.1
Semi-Finished --------- --------- ----------- ------------- --------------
100.0% 100.0 % 100.0% 100.0% 100.0%
Total ========= ========= =========== ============= ==============
Average Net Sales per Ton $ 465 $ 498 $ 532 $ 528 $ 576
</TABLE>
- ------------------
(1) The allocation among product categories was affected by the Strike at
eight of the Company's facilities.
Steel Division
The Steel Division is the Company's primary steelmaking operation.
Products produced by the Steel Division are described below. These products are
transferred to Wheeling Corrugating for further processing and are sold directly
to third party customers, and to Wheeling-Nisshin and OCC pursuant to long-term
supply agreements between the Company and such entities .
Cold Rolled Products. Cold rolled coils are manufactured from hot
rolled coils by employing a variety of processing techniques, including
pickling, cold reduction, annealing and temper rolling. Cold rolled processing
is designed to reduce the thickness and improve the shape, surface
characteristics and formability of the product. In its finished form, the
product may be sold to service centers and to a variety of end users such as
appliance or automotive manufacturers or further processed internally into
corrosion-resistant coated products including hot dipped galvanized,
electrogalvanized, or tin mill products. In recent years, the Company has
increased its cold rolled production to support increased sales to
Wheeling-Nisshin and the expansion of Wheeling Corrugating, which are labeled as
separate product categories above.
Coated Products. The Company manufactures a number of
corrosion-resistant, zinc-coated products including hot dipped galvanized and
electrogalvanized sheets for resale to trade accounts and to support the
fabricating operations of Wheeling Corrugating. The coated products are
manufactured from a steel substrate of cold rolled or hot rolled pickled coils
by applying zinc to the surface of the material to enhance its corrosion
protection. The Company's trade sales of galvanized products are heavily
oriented to unexposed applications, principally in the appliance, construction,
service center and automotive markets. Typical industry applications include
auto underbody parts, culvert pipe, refrigerator backs and heating/air
conditioning ducts. Over 30% of hot dipped galvanized production tonnage is
transferred to Wheeling Corrugating for further processing and reported under
the fabricated products category. The Company sells electrogalvanized products
for application in the appliance and construction markets.
Tin Mill Products. Tin mill products consist of blackplate and
tinplate. Blackplate is a cold rolled substrate (uncoated), the thickness of
which is less than .0142 inches, and is utilized in the manufacture of pails,
shelving and sold to OCC for the manufacture of tinplate products. Tinplate is
produced by the electro-deposition of tin to a blackplate substrate and is
utilized principally in the manufacture of food, beverage, general line and
aerosol containers. While the majority of the Company's sales of these products
is concentrated in a variety of container markets, the Company also markets
products for automotive applications, such as oil filters and gaskets. The
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<PAGE>
Company has phased out its existing tin mill facilities and will produce all of
its tin coated products through OCC. The Company expects that its participation
in OCC will enable it to expand the Company's presence in the tin plate market.
OCC's $69 million tin coating mill, which commenced commercial operations in
January 1997, will have a nominal annual capacity of 250,000 net tons. The
Company will supply up to 230,000 tons of the substrate requirements of the
joint venture subject to quality requirements and competitive pricing. The
Company and Nittetsu Shoji America, a major Japanese trading company's U.S.
based operation, will act as the distributors of the joint venture's product,
with the Company selling between 81% and 85% of production based on volume.
Hot Rolled Products. Hot rolled coils represent the least processed of
the Company's finished goods. Approximately 68% of the Company's 1997 production
of hot rolled coils was further processed internally into value-added finished
products. The balance of the tonnage is sold as hot rolled black or pickled
(acid cleaned) coils to a variety of consumers such as converters/processors,
steel service centers and the automotive and appliance industries. The
converters/processors transform the hot rolled coil into a finished product such
as pipe and tubing, while the service centers typically slit or cut the material
to size for resale to the end user.
Fabricated Products
(Wheeling Corrugating)
Fabricated products represented 55.1% or $269.7 million of the
Company's net sales in 1997 and 26.7% or $296.7 million of the Company's net
sales in 1996. Fabricated products consist of cold rolled or coated products
further processed mainly via roll forming. The Company intends to increase sales
of fabricated products through expansion, selective acquisitions of fabricating
facilities and new product development. Wheeling Corrugating markets exclusively
value-added products.
Wheeling Corrugating is a fabricator of roll-formed products for the
construction, highway, and agricultural products industries. In conjunction with
the Company's business strategy of expanding its sales of higher value-added
products, Wheeling Corrugating has increased its shipments of fabricated
products by approximately 23% since 1993. Following the establishment of its
Lenexa, Kansas and Minneapolis, Minnesota locations, Wheeling Corrugating
expanded its regional operations, through acquisitions, in Wilmington, North
Carolina (1993), Gary, Indiana, Warren, Ohio (1994) and Brooks, Medford and
Klamath Falls, Oregon (1996). The regional presence of certain of these
facilities has enabled Wheeling Corrugating to take advantage of low-cost barge
freight from the Company's Ohio Valley plants and to provide customers in the
outlying areas with competitive services through "just-in-time delivery." In
some of its product lines, Wheeling Corrugating has substantial market share and
therefore has increased opportunity to pursue higher profit margins. The Company
believes that it would be difficult for a competitor to replicate Wheeling
Corrugating's geographical breadth.
The following table sets forth certain shipment information relating to
Wheeling Corrugating's product categories:
Net Tons Shipped by Wheeling Corrugating
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------
1993 1994 1995 1996 1997
----------- ----------- ----------- ----------- -----------
(tons in thousands)
<S> <C> <C> <C> <C> <C>
Construction Products 146.2 151.7 205.6 213.5 198.1
Agricultural Products 100.7 113.6 125.7 142.8 122.4
Highway Products 19.5 16.4 20.0 16.8 11.4
Other 4.0 4.0 3.9 3.6 --
----------- ----------- ----------- ----------- -----------
Total Net Tons Shipped 270.4 285.7 355.2 376.7 331.9
=========== =========== =========== =========== ===========
</TABLE>
Construction Products. Construction products consist of roll-formed
sheets, which are utilized in sectors of the non-residential building market
such as commercial, institutional and manufacturing. They are classified into
three basic categories: roof deck; form deck; and composite floor deck. Roof
deck is a formed steel sheet, painted
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<PAGE>
or galvanized, which provides structural support in non-residential roofing
systems. Form deck is a formed steel sheet, painted, galvanized or uncoated,
that provides structural form support for structural or insulating concrete
slabs in non-residential floor or roofing systems. Composite floor deck is a
formed steel sheet, painted, galvanized or uncoated, that provides structural
form support and positive reinforcement for structural concrete slabs in
non-residential floor systems.
Agricultural Products. Agricultural products consist of roll-formed,
corrugated sheets which are used as roofing and siding in the construction of
barns, farm machinery enclosures and light commercial buildings and certain
residential roofing applications. These products can be manufactured from hot
dipped or painted hot dipped galvanized coils. Historically, these products have
been sold primarily in rural areas. In recent years, however, such products have
found increasing acceptance in light commercial buildings.
Highway Products. Highway products consist of bridge form, which is
roll-formed corrugated sheets that are swedged on both ends and are utilized as
concrete support forms in the construction of highway bridges.
Wheeling-Nisshin
The Company has a 35.7% equity interest in Wheeling-Nisshin, which is
a joint venture between the Company and Nisshin Holding, Incorporated, a
wholly-owned subsidiary of Nisshin Steel Co., Ltd. Wheeling-Nisshin is a
state-of-the-art processing facility located in Follansbee, West Virginia which
produces among the lightest gauge galvanized steel products available in the
United States. Shipments by Wheeling-Nisshin of hot dipped galvanized,
galvanneal, galvalume and aluminized products, principally to the construction
industry, have increased from 158,600 tons in 1988 to 686,100 tons in 1997.
Wheeling-Nisshin products are marketed through trading companies, and its
shipments are not consolidated into the Company's shipments.
Wheeling-Nisshin began commercial operations in 1988 with an initial
capacity of 360,000 tons. In March 1993, Wheeling-Nisshin added a second hot
dipped galvanizing line, which increased its capacity by approximately 80%, to
over 660,000 annual tons and allows Wheeling-Nisshin to offer the lightest-gauge
galvanized sheet products manufactured in the United States for construction,
heating, ventilation and air-conditioning and after-market automotive
applications. Wheeling-Nisshin has been profitable every year since inception.
Wheeling-Nisshin's results of operations for the years ended December 31, 1996
and 1997 were negatively impacted by the Strike, principally due to the
Company's inability to supply cold rolled coils to Wheeling-Nisshin during the
period of the Strike, which caused Wheeling-Nisshin to purchase cold rolled
coils in the spot market at higher prices.
The Company's amended and restated supply agreement with
Wheeling-Nisshin expires in 2013. Pursuant to the amended supply agreement, the
Company will provide not less than 75% of Wheeling-Nisshin's steel substrate
requirements, up to an aggregate maximum of 9,000 tons per week subject to
product quality requirements. Pricing under the supply agreement is negotiated
quarterly based on a formula which gives effect to competitive market prices.
Shipments of cold rolled steel in 1997 by the Company to Wheeling-Nisshin were
approximately 64,500 tons, or 7.8% of the Company's total tons shipped and
approximately 351,900 tons, or 16.8%, in 1996. This decrease reflects the effect
of the Strike on the Company's shipping level.
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<PAGE>
The following chart provides certain financial and operating data for
Wheeling-Nisshin:
<TABLE>
<CAPTION>
Year Ended December 31,
-------------------------------------------------------------
1993 1994 1995 1996 1997
----------- ----------- ----------- ----------- -----------
(tons in thousands, dollars in millions)
<S> <C> <C> <C> <C> <C>
Tons sold 467.2 628.8 651.2 665.8 686.1
Revenues $264.2 $374.6 $389.7 $375.7 $396.3
EBITDA(1) 27.6 35.6 47.8 47.0 37.8
Net income 7.1 10.4 18.0 21.6 16.1
The Company's pro rata share:
Cash dividends received -- 2.5 2.5 2.5 2.5
Equity income 1.8 3.7 6.4 7.7 5.7
</TABLE>
<TABLE>
<CAPTION>
As of December 31,
-------------------------------------------------------------
1993 1994 1995 1996 1997
----------- ----------- ----------- ----------- -----------
(dollars in millions)
<S> <C> <C> <C> <C> <C>
Total assets $253.2 $241.4 $205.5 $219.4 $212.8
Total debt 95.7 68.7 36.7 25.3 18.5
Stockholders' equity 106.1 109.5 120.6 135.2 144.2
</TABLE>
(1) EBITDA is operating income plus depreciation and amortization. The
Company has included EBITDA because it is commonly used by certain
investors and analysts to analyze and compare companies on the basis of
operating performance, leverage and liquidity and to determine a
company's ability to service debt. EBITDA does not represent cash flows
as defined by generally accepted accounting principles and does not
necessarily indicate that cash flows are sufficient to fund all of the
Company's cash needs. EBITDA should not be considered in isolation or
as a substitute for net income (loss), cash flows from operating
activities or other measures of liquidity determined in accordance with
generally accepted accounting principles.
Ohio Coatings Company
The Company has a 50% equity interest in OCC, which is a joint venture
between the Company and Dong Yang, a leading South Korea-based tin plate
producer. Nittetsu Shoji America ("Nittetsu"), a U.S. based tin plate importer,
holds non-voting preferred stock in OCC and will act, together with the Company,
as a distributor of OCC's products. OCC completed construction of a $69 million
state-of-the-art tin coating mill in 1996 and commenced commercial operations in
January 1997. The OCC tin coating line is the most modern domestic facility of
its kind constructed in the last 30 years and is positioned to become a premier
supplier of tin plate to the container and automotive industries. The OCC tin
coating line is anticipated to have a nominal annual capacity of 250,000 net
tons, and shipped approximately 71,000 tons in 1997. The Company has phased out
its existing tin coating facilities and will produce all of its tin coated
products through OCC. The Company's participation in OCC will enable it to
expand the Company's presence in the tin plate market and convert more hot
rolled sheet into tin mill products. As part of the joint venture agreement, the
Company has the right to supply up to 230,000 tons of the substrate requirements
of OCC, subject to quality requirements and competitive pricing. The Company
will market between 81% and 85% of OCC's products. In 1997, OCC had operating
losses of $14.3 million, which were negatively impacted by the Strike.
Other Steel Related Operations of the Company
The Company owns an electrogalvanizing facility which had revenues of
$34.8 million in 1997 and $47.1 million in 1996, while providing an outlet for
approximately 60,000 tons of steel in a normal year and a facility that produces
oxygen and other gases used in the Company's steel-making operations. The
Company is also a 12 1/2% equity partner in an iron ore mining partnership.
-44-
<PAGE>
Customers
The Company markets an extensive mix of products to a wide range of
manufacturers, converters and processors. The Company's 10 largest customers
(including Wheeling-Nisshin) accounted for approximately 35.4% of its net sales
in 1995, 34.9% in 1996 , and 30.2% in 1997. Wheeling-Nisshin was the only
customer to account for more than 10% of net sales. Wheeling-Nisshin accounted
for 15.2% and 12.7% of net sales in 1995, and 1996, respectively.
Geographically, the majority of the Company's customers are located within a
350-mile radius of the Ohio Valley. However, the Company has taken advantage of
its river-oriented production facilities to market via barge into more distant
locations such as the Houston, Texas and St. Louis, Missouri areas. As discussed
above, Wheeling Corrugating has acquired regional facilities to service an even
broader geographical area.
The Company's shipments historically have been concentrated within
seven major market segments: construction industry, steel service centers,
converters/processors, agriculture, container, auto, and appliances. The
Company's overall participation in the construction and the
converters/processors markets substantially exceeds the industry average and its
reliance on automotive shipments as a percentage of total shipments is
substantially less than the industry average.
<TABLE>
<CAPTION>
Percent of Total Net Tons Shipped
Year Ended December 31,
----------------------------------------------------------------
Major Customer Category: 1993 1994 1995 1996 (1) 1997(1)
----------- ----------- ----------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Steel Service Centers 33% 32% 29% 26% 32%
Converters/Processors(2) 26 28 28 25 16
Construction 18 18 18 22 31
Agriculture 5 5 6 7 14
Containers(2) 7 6 6 7 2
Automotive 6 6 5 5 2
Appliances 3 3 4 4 2
Exports -- -- 1 1 --
Other 2 2 3 3 1
----------- ----------- ----------- ------------- -------------
Total 100% 100% 100% 100% 100%
=========== =========== =========== ============= =============
</TABLE>
(1) The allocation among customer categories was affected by the Strike at
eight of the Company's facilities.
(2) Products shipped to Wheeling-Nisshin and OCC are included primarily in
the Converters/Processors and Containers markets, respectively.
Set forth below is a description of the Company's major customer
categories:
Steel Service Centers. The Company's shipments to steel service centers
are heavily concentrated in the areas of hot rolled and hot dipped galvanized
coils. Due to increased in-house costs to steel companies during the 1980's for
processing services such as slitting, shearing and blanking, steel service
centers have become a major factor in the distribution of hot rolled products to
ultimate end users. In addition, steel service centers have become a significant
factor in the sale of hot dipped galvanized products to a variety of small
consumers such as mechanical contractors, who desire not to be burdened with
large steel inventories.
Converters/Processors. The growth of the Company's shipments to the
converters/processors market is principally attributable to the increase in
shipments of cold rolled products to Wheeling-Nisshin, which uses cold rolled
coils as a substrate to manufacture a variety of coated products, including hot
dipped galvanized and aluminized coils for the automotive, appliance and
construction markets. As a result of the second line expansion, the Company's
shipments to Wheeling-Nisshin increased significantly beginning in 1993. The
converters/processors
-45-
<PAGE>
industry also represents a major outlet for the Company's hot rolled products,
which are converted into finished commodities such as pipe, tubing and cold
rolled strip.
Construction. The Company's shipments to the construction industry are
heavily influenced by the sales of Wheeling Corrugating. Wheeling Corrugating
services the non-residential and agricultural building and highway industries,
principally through shipments of hot dipped galvanized and painted cold rolled
products. With its acquisitions during the 1980's and early 1990's of regional
facilities, Wheeling Corrugating has doubled its shipments and has been able to
market its products into broad geographical areas. The Company expects these
acquisitions will mitigate the effects of regional economic downturns in the
construction business. In December 1996 the Company, through Wheeling
Corrugating, acquired the assets of Champion Metal Co., a rollformer, which has
three locations in Oregon.
Agriculture. The Company's shipments to the agricultural market are
principally sales of Wheeling Corrugating roll-formed, corrugated sheets which
are used as roofing and siding in the construction of barns, farm machinery
enclosures and light commercial buildings.
Containers. The vast majority of the Company's shipments to the
container market are concentrated in tin mill products, which are utilized
extensively in the manufacture of food, aerosol, beverage and general line cans.
The container industry has represented a stable market. The balance of the
Company's shipments to this market consists of cold rolled products for pails
and drums. As a result of the OCC joint venture, the Company phased out its
existing tin mill production facilities in 1996, and has begun to distribute
products produced by OCC. The Company has the right to supply up to 230,000 tons
of the substrate requirements of OCC until January 1, 2012.
Automotive. Unlike the majority of its competitors, the Company is not
heavily dependent on shipments to the automotive industry. However, the Company
has established a variety of higher value-added niches in this market,
particularly in the area of hot dipped galvanized products for deep drawn
automotive underbody parts. In addition, the Company has been a supplier of tin
mill products for automotive applications, such as oil filters and gaskets. A
third niche has been the Company's participation in painted electrogalvanized
products for auto draft stripping applications. As a result of the Strike, the
Company was unable to secure automotive contracts for 1998. The Company
anticipates it will be in a favorable position to compete for automotive
contracts in future periods.
Appliance. The Company's shipments to the appliance market are
concentrated in hot dipped galvanized, electrogalvanized and hot rolled coils.
These products are furnished directly to appliance manufacturers as well as to
blanking, drawing and stamping companies. Additional shipments are furnished to
service centers and converters/processors for ultimate appliance applications.
The Company has concentrated on niche product applications primarily used in
washer/dryer, refrigerator/freezer and range appliances. The Company anticipates
that it will retain a portion of its appliance contracts for 1998. However, due
to the Strike, the Company will not be able to secure a full level of shipments
comparable to those achieved in 1996. The Company expects to be in a favorable
position to compete for contracts to supply appliance manufacturers in 1999.
Manufacturing Process
In the Company's primary steelmaking process, iron ore pellets, coke,
limestone, sinter and other raw materials are consumed in the blast furnace to
produce hot metal. Hot metal is further converted into liquid steel through its
basic oxygen furnace ("BOF") process where impurities are removed, recycled
scrap is added and metallurgical properties for end use are determined on a
batch-by-batch (heat) basis. The Company's BOF has two vessels, each with a
steelmaking capacity of 285 tons per heat. From the BOF, the heats of steel are
sent to the ladle metallurgy facility ("LMF"), where the temperature and
chemistry of the steel are adjusted to precise tolerances. Liquid steel from the
LMF then is formed into slabs through the process of continuous casting. After
continuous casting, slabs are reheated, reduced and finished by extensive
rolling, shaping, tempering and, in certain cases, by the application of
coatings at the Company's downstream operations. Finished products are normally
shipped to customers in the form of coils or fabricated products. The Company
has linked its steelmaking and rolling equipment with a computer based
integrated manufacturing control system to coordinate production tracking and
sales activities.
-46-
<PAGE>
Raw Materials
The Company has a 12.5% ownership interest in Empire Iron Mining
Partnership ("Empire") which operates a mine located in Palmer, Michigan. The
Company is obligated to purchase approximately 12.5% or 1.0 million gross tons
per year (at current production levels) of the mine's annual ore output.
Interest in related ore reserves as of December 31, 1997, is estimated to be
21.1 million gross tons. The Company generally consumes approximately 2.4
million gross tons of iron ore pellets in its blast furnaces. The Company's pro
rata cash operating cost of Empire currently approximates the market price of
ore. The Company obtains approximately half of its iron ore from spot and
medium-term purchase agreements at prevailing world market prices. It has
commitments for the majority of its blast furnace iron ore pellet needs through
1999 from suppliers in North America.
In November 1993, the Company sold the operating assets of its coal
company to an unrelated third party. The Company also entered into a long-term
supply agreement with such third party to provide the Company with a substantial
portion of the Company's coal requirements at competitive prices. The Company's
operations require a substantial amount of coking coal.
The Company currently produces all of its coke requirements and
typically consumes generally all of the resultant by-product coke oven gas. In
1997, approximately .9 million tons of coking coal were consumed in the
production of blast furnace coke by the Company. The Company may continue to
sell its excess coke and coke oven by-products to third-party trade customers.
During the Strike, the Company continued to produce coke at its Follansbee
facility. The Company has entered into a contract with a major domestic
integrated steel producer for the sale of coke produced by the Company during
the Strike.
The Company's operations require material amounts of other raw
materials, including limestone, oxygen, natural gas and electricity. These raw
materials are readily available and are purchased on the open market. The
Company is presently dependent on external steel scrap for approximately 8% of
its steel melt. The cost of these materials has been susceptible in the past to
price fluctuations, but worldwide competition in the steel industry has
frequently limited the ability of steel producers to raise finished product
prices to recover higher material costs. Certain of the Company's raw material
supply contracts provide for price adjustments in the event of increased
commodity or energy prices.
Backlog
Order backlog was 368,025 net tons at December 31, 1997, compared to
158,751 net tons at December 31, 1996 and 400,624 tons at December 31, 1995. The
Company believes that the December 31, 1997 order backlog will be shipped by the
end of the 1998 first half. The Company is vigorously pursuing customers lost to
competitors during the Strike and anticipates rebuilding its order backlog to
historic levels.
Capital Investments
The Company believes that it must continuously strive to improve
productivity, product quality and control manufacturing costs in order to remain
competitive. Accordingly, the Company is committed to continuing to make
necessary capital investments with the objective of reducing manufacturing costs
per ton, improving the quality of steel produced and broadening the array of
products offered to the Company's served markets. The Company's capital
expenditures (including capitalized interest) for 1997 were approximately $33.8
million, including $12.4 million on environmental projects. Capital expenditures
in 1996 and 1997 were lower than in recent years due to the Strike. From 1993 to
1997, such expenditures aggregated approximately $289.3 million. This level of
capital expenditures was needed to maintain productive capacity, improve
productivity and upgrade selected facilities to meet competitive requirements
and maintain compliance with environmental laws and regulations. The capital
expenditure program has included improvements to the Company's infrastructure,
blast furnaces, steel-making facilities, 80-inch hot strip mill and finishing
operations, and has resulted in improved shape, gauge, surface and physical
characteristics for its products. In particular, the quality improvements
completed at the Allenport cold rolling facility in 1992 and the installation of
automatic gauge controls at the Yorkville tandem mill in 1993 have enhanced
productivity and improved the quality of substrate provided to Wheeling-Nisshin
and other customers. Continuous and substantial capital and maintenance
expenditures will be required to maintain operating facilities, modernize
finishing facilities to remain competitive and to comply with environmental
control requirements. The Company anticipates funding its capital expenditures
in 1998 from cash on hand and funds generated by operations,
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<PAGE>
sale of receivables under the Receivables Facility and funds available under the
Revolving Credit Facility. During the Strike, the Company had delayed
substantially all capital expenditures at the Strike-affected plants. The
Company anticipates that capital expenditures will approximate depreciation on
average, over the next few years.
Energy Requirements
During 1997 coal constituted approximately 76% of the Company's total
energy consumption, natural gas 20% and electricity 4%. Many of the Company's
major facilities that use natural gas have been equipped to use alternative
fuels. The Company continually monitors its operations regarding potential
equipment conversion and fuel substitution to reduce energy costs.
Employment
Total active employment of the Company at December 31, 1997 totaled
4,011 employees, of which 2,928 were represented by the USWA, and 114 by other
unions. The remainder consisted of 874 salaried employees and 95 non-union
operating employees.
On August 12, 1997, the Company and the USWA entered into the New Labor
Agreement. Set forth below is a summary of terms of the New Labor Agreement.
Term
The contract has a five year term with no mid-term renegotiation
provisions ("reopeners").
Work Force Reduction
The Company has implemented its immediate and unilateral right to
reduce its hourly work force by 850 employees (from its pre-Strike level of
approximately 4,090). The Company has no obligation to replace workers upon
retirement. The average all-in cost per job eliminated is $55,000 per year in
wages and benefits. Based on actual wage and certain direct employee benefit
costs during the first nine months of 1996 for employees represented by the
USWA, the elimination of 850 USWA-represented employees working a standard
number of hours per year would have resulted in estimated annual labor cost
savings of approximately $45 million .
Work Rule Modernization
The above mentioned job reductions are made possible by a dramatic
restructuring of the Company's work rules, including, among other things,
provisions for: (i) mandatory multi-crafting which requires participation of all
hourly craftsmen under the age of 55 and is expected to result in a more highly
skilled and flexible work force; (ii) a new "equipment tender" position, which
allows for craftsmen to operate, maintain and repair their own equipment and is
expected to reduce the need for dedicated maintenance crews; and (iii) enhanced
maintenance flexibility, which allows for greater freedom in assignment of
non-craft jobs and permits craftsmen to assist each other in performing
maintenance functions.
Wage and Bonus
The Company paid a bonus of $2,000 per hourly employee upon
ratification of the New Labor Agreement. In addition, the Company agreed to
increase hourly wage rates (currently averaging $17.00/hour) as follows: (i)
25(cent) per hour on June 1, of each of 1998, 1999 and 2000; and (ii) 37.5(cent)
per hour on each of June 1, 2001 and March 1, 2002.
Trust for Retiree Medical Obligations
The New Labor Agreement gives the Company the right to pay up to $11
million of retiree medical expenses using previous contributions to a trust
established for the benefit of future retirees. Such payments would otherwise be
funded out of the Company's operating cash flows. Furthermore, the Company is
relieved of its
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<PAGE>
obligation to make certain future annual contributions (aggregating $16 million)
to the trust. The Company will make one payment (estimated to be $4 million) to
the trust in July 2002. Finally, the Company's obligation to pay retiree medical
costs beyond the term of its pension agreement is limited on a per capita basis.
Pension Plan (summary of terms)
The Company agreed to provide a DB Plan for its hourly employees. The
DB Plan has an eight year term, without reopeners, and provides for monthly cash
benefits as follows: (i) for employees who retire prior to May 31, 2003, $40
times years of service; or (ii) for those who retire on or after May 31, 2003,
$44 times years of service.
The DB Plan has certain early retirement provisions which are either
similar to or less costly than those of the typical USWA-bargained plans. In
addition, the DB Plan provides for certain incentives to accelerate the rate of
retirement of hourly employees. The Company has offered to pay either a $25,000
lump sum, or $400 per month until age 62, to the first 818 eligible employees
who opt to retire.
The Company is no longer obliged to make contributions (which averaged
$9.2 million per year for the period from 1985 to 1996) to its Defined
Contribution Plan ("DC Plan") for USWA-represented employees. The approximately
$121.3 million in assets in the DC Plan (as of December 31, 1997) are available
to fund individuals' retirement benefits under the new DB Plan. The actuarially
determined unfunded accumulated benefit obligation for all benefits under the DB
Plan totals $167.3 million as of December 31, 1997. Under ERISA, the Company is
subject to annual minimum cash funding requirements to satisfy its obligations
under the DB Plan.
Other Provisions
The requirement to have a USWA representative on the WHX board of
directors was eliminated and the number of representatives on the WPSC board of
directors was reduced from two to one. Certain aspects of the Company's Medical
Benefit Plans were amended with the effect of encouraging employees to elect the
Company's managed care medical plan option. A new gain sharing arrangement was
implemented which supplants profit sharing under certain circumstances.
Competition
The steel industry is cyclical in nature and has been marked
historically by overcapacity, resulting in intense competition among domestic
integrated steel producers, minimills and processors. The market for flat rolled
steel in the United States is supplied principally by domestic integrated steel
producers, domestic steel minimills and processors and foreign steel producers.
Integrated producers produce steel from a combination of iron ore, coke and
steel scrap using blast furnaces and basic oxygen furnaces.
The Company faces increasing competitive pressures from other domestic
integrated producers, minimills and processors. Processors compete with the
Company in the areas of slitting, cold rolling and coating. Minimills are
generally smaller volume steel producers that use ferrous scrap metals as their
basic raw material. Compared to integrated producers, minimills, which rely on
less capital intensive hot metal sources, have certain advantages. Since
minimills typically are not unionized, they have more flexible work rules that
have resulted in lower employment costs per net ton shipped. Since 1989,
significant flat rolled minimill capacity has been constructed and these
minimills now compete with integrated producers in product areas that
traditionally have not faced significant competition from minimills. In
addition, there is significant additional flat rolled minimill capacity under
construction or announced with various planned commissioning dates in 1997
through 1999. Near term, these minimills are expected to compete with the
Company primarily in the commodity flat rolled steel market and processors are
expected to compete with the Company in the flat rolled and cold rolled steel
market. In the long-term, such minimills may also compete with the Company in
producing value-added products. In addition, the increased competition in
commodity product markets influence certain integrated producers to increase
product offerings to compete with the Company's custom products.
As the single largest steel consuming country in the western world, the
United States has long been a favorite market of steel producers in Europe and
Japan. Steel producers from emerging economic powers such as
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<PAGE>
Korea, Taiwan, and Brazil, and non-market economies such as Russia and China,
have also recognized the United States as a target market.
Total annual steel consumption in the United States has fluctuated
between 88 million and slightly over 117 million tons since 1991. A number of
steel substitutes, including plastics, aluminum, composites and glass, have
reduced the growth of domestic steel consumption.
Steel imports of flat rolled products as a percentage of domestic
apparent consumption, excluding semi-finished steel, have been approximately 18%
in 1995, 19% in 1996, and 20.4% in 1997. World steel demand, world export
prices, U.S. dollar exchange rates and the international competitiveness of the
domestic steel industry have all been factors in these import levels.
Properties
The Company has one raw steel producing plant and various other
finishing and fabricating facilities. The Steubenville complex is an integrated
steel producing facility located at Steubenville and Mingo Junction, Ohio and
Follansbee, West Virginia. The Steubenville complex includes a sinter plant,
coke oven batteries that produce all coke requirements, three blast furnaces
(two operating), two basic oxygen furnaces, a two-strand continuous slab caster
with an annual slab production capacity of approximately 2.4 million tons, an
80-inch hot strip mill and pickling and coil finishing facilities. The Ohio and
West Virginia locations, which are separated by the Ohio River, are connected by
a railroad bridge owned by the Company. A pipeline is maintained for the
transfer of coke oven gas for use as fuel from the coke plant to several other
portions of the Steubenville complex. The Steubenville complex primarily
produces hot rolled products, which are either sold to third parties or shipped
to other of the Company's facilities for further processing into value-added
products.
The following table lists the other principal plants of the Company and
the annual capacity of the major products produced at each facility:
<TABLE>
<CAPTION>
Other Major Facilities
Location and Operations Capacity Tons/Year Major Products
- ------------------------------------------------------- ---------------------- -----------------------------------
Allenport, Pennsylvania:
<S> <C> <C>
Continuous pickler, tandem mill, temper
mill and annealing 950,000 Cold rolled sheets
Beech Bottom, West Virginia:
Painted steel in coil form and
Paint line and roll-forming equipment 120,000 formed steel products
Canfield, Ohio:
Electrogalvanizing line, paint line, ribbon Electrolytic galvanized sheet and
and oscillating rewind slitters 65,000 strip
Martins Ferry, Ohio:
Temper mill, zinc coating lines and roll Hot dipped galvanized sheets and
forming equipment 750,000 coils and formed steel products
Yorkville, Ohio:
Continuous pickler, tandem mill, temper
mills and annealing lines 660,000 Black plate and cold rolled sheets
</TABLE>
Wheeling Corrugating fabricates products at Fort Payne, Alabama;
Houston, Texas; Lenexa, Kansas; Louisville, Kentucky; Minneapolis, Minnesota;
Warren, Ohio; Gary, Indiana; Wilmington, North Carolina and Klamath Falls,
Medford and Brooks, Oregon. The Fort Payne, Houston and Wilmington facilities
were acquired in 1986, 1989 and 1993, respectively. The Gary facility was
acquired in 1994. The Oregon facilities were acquired in 1996.
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<PAGE>
The Company maintains five regional sales offices for flat-rolled and
tin mill products and nine sales offices and/or warehouses for Wheeling
Corrugating products.
All of the above facilities currently owned by the Company are
regularly maintained in good operating condition. However, continuous and
substantial capital and maintenance expenditures are required to maintain the
operating facilities, to modernize finishing facilities in order to remain
competitive and to meet environmental control requirements.
All of the above facilities and substantially all of the other real
property of the Company are owned in fee by the Company (exclusive of coal lands
held by subsidiaries or corporations in which the Company has an interest) and
are subject to the first lien that secures the $9.2 million face amount (as of
December 31, 1997) of Tax Benefit Transfer Letters of Credit issued to support
the sale of tax benefits associated with the construction of the slab caster
located at the Company's Steubenville complex.
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<PAGE>
LEGAL PROCEEDINGS
Environmental Matters
The Company, as are other industrial manufacturers, is subject to
increasingly stringent standards relating to the protection of the environment.
In order to facilitate compliance with these environmental standards, the
Company has incurred capital expenditures for environmental control projects
aggregating $5.9 million, $6.8 million and $12.4 million for 1995 , 1996 and
1997, respectively. The Company anticipates spending approximately $41.3 million
in the aggregate on major environmental compliance projects through the year
2000, estimated to be spent as follows: $13.4 million in year 1998, $15.9
million in 1999, and $12.0 million in 2000. Due to the possibility of
unanticipated factual or regulatory developments, the amount and timing of
future expenditures may vary substantially from such estimates.
The Company has been identified as a potentially responsible party
under the Comprehensive Environmental Response, Compensation and Liability Act
("Superfund") or similar state statutes at several waste sites. The Company is
subject to joint and several liability imposed by Superfund on potentially
responsible parties. Due to the technical and regulatory complexity of remedial
activities and the difficulties attendant to identifying potentially responsible
parties and allocating or determining liability among them, the Company is
unable to reasonably estimate the ultimate cost of compliance with Superfund
laws. The Company believes, based upon information currently available, that the
Company's liability for clean up and remediation costs in connection with the
Buckeye Reclamation will be between $3.0 million and $4.0 million; at six other
sites (MIDC Glassport, United Scrap Lead, Tex-Tin, Breslube Penn, Four County
Landfill and Beazor) the Company estimates costs to aggregate up to $700,000.
The Company is currently funding its share of remediation costs.
The Clean Air Act Amendments of 1990 (the "Clean Air Act") directly
affect the operations of many of the Company's facilities, including coke ovens.
Under the Clean Air Act, coke ovens generally will be required to comply with
progressively more stringent standards which will result in an increase in
environmental capital expenditures and costs for environmental compliance. Most
of the forecasted environmental expenditures will be spent on projects relating
to compliance with these standards. Upon completion of the capital projects, the
Company anticipates that its batteries will meet the applicable Clean Air Act
standard.
In March 1993 the EPA notified the Company of Clean Air Act violations,
alleging particulate matter and hydrogen sulfide emissions in excess of
allowable concentrations, at the Company's Follansbee Coke Plant. The parties
have entered into a consent decree settling the civil penalties related to this
matter for $700,000 and the Company completed payment of all civil penalties in
January 1997.
In an action brought in 1985 in the U.S. District Court for the
Northern District of West Virginia, the EPA claimed violations of the Solid
Waste Disposal Act at a surface impoundment area at the Follansbee facility. The
Company and the EPA entered into a consent decree in October 1989 whereby soil
and groundwater testing and monitoring procedures are required. The surface
impoundment has been closed, and the Company is waiting for approval from the
USEPA. Until the USEPA responds to the Company, the full extent and cost of
remediation cannot be ascertained.
In June of 1995 the USEPA informally requested corrective action
affecting other areas of the Follansbee facility. The USEPA is seeking to
require the Company to perform a site investigation of the Follansbee plant. The
Company has actively contested the USEPA's jurisdiction to require a site
investigation. One of two appeals was dismissed by the court, but the Company is
continuing with the second appeal.
On December 20, 1995 the Department of Justice notified the Company of
its intention to bring proceedings seeking civil penalties for alleged
violations of the Clean Water Act (1991-94) and Resource Conservation and
Recovery Act ("RCRA") (1990-91) at the Company's Follansbee facility. Suit was
filed February 5, 1996 in the U.S. District Court, Eastern District of West
Virginia (Civil Action #5-96CV20). A consent decree has been entered and the
matter has been settled for $200,000.
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<PAGE>
In addition, the West Virginia Department of Environmental Protection
("WVDEP") sought civil penalties for violations of a NPDES permit at the
Company's Follansbee plant. A settlement has been proposed by the WVDEP in which
the Company would pay approximately $100,000 in settlement of this matter.
By letter dated March 15, 1994 the Ohio Attorney General advised the
Company of its intention to file suit on behalf of the Ohio EPA for alleged
hazardous waste violations at the Company's Steubenville, Mingo Junction,
Martins Ferry and Yorkville facilities. In subsequent correspondence the State
of Ohio demanded a civil penalty of approximately $300,000 in addition to
injunctive relief. The demand for injunctive relief consists of remedial
activities at each facility aggregating less than $125,000, the initiation of a
waste minimization program at the affected facilities and a company-wide
compliance assessment. The Company is in the process of conducting settlement
negotiations.
In January 1998 the Ohio Attorney General notified the Company of a
draft consent order and initial civil penalties in the amount of $1.0 million
for various air violations at the Company's Steubenville and Mingo Junction
facilities occurring from 1992 through 1996. The Company anticipates entering
into discussions with the Ohio Environmental Enforcement Section to resolve
these issues.
The Company is currently operating in substantial compliance with three
consent decrees (two with the EPA and one with the Pennsylvania Department of
Environmental Resources) with respect to wastewater discharges at Allenport,
Pennsylvania and Mingo Junction, Steubenville, and Yorkville, Ohio. All of the
foregoing consent decrees are nearing expiration and petition to terminate them
will be filed in the near future.
The Company is aware of potential environmental liabilities resulting
from operations, including leaking underground and aboveground storage tanks,
and the disposal and storage of residuals on its property. Each of these
situations is being assessed and remediated in accordance with regulatory
requirements.
Non-current accrued environmental liabilities totaled $7.8 million at
December 31, 1996 and $10.6 million at December 31, 1997. These accruals were
initially determined by the Company in January 1991, based on all then available
information. As new information becomes available including information provided
by third parties, and changing laws and regulation, the liabilities are reviewed
and the accruals adjusted quarterly. Management believes, based on its best
estimate, that the Company has adequately provided for its present environmental
obligations.
Based upon information currently available, including the Company's
prior capital expenditures, anticipated capital expenditures, consent agreements
negotiated with Federal and state agencies and information available to the
Company on pending judicial and administrative proceedings, the Company does not
expect its environmental compliance costs, including the incurrence of
additional fines and penalties, if any, relating to the operation of its
facilities, to have a material adverse effect on the financial condition or
results of operations of the Company. However, as further information comes into
the Company's possession, it will continue to reassess such evaluations.
General Litigation
The Company is a party to various litigation matters including general
liability claims covered by insurance. In the opinion of management, such claims
are not expected to have a material adverse effect on the financial condition or
results of operations of the Company.
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<PAGE>
MANAGEMENT
Directors and Executive Officers
The following table sets forth information regarding the Company's
directors and executive officers:
Name Age Position
- -------------------- ------ ---------------------------------------------
John R. Scheessele 50 President
Paul J. Mooney 46 Executive Vice President and Chief Financial
Officer
James T. Gibbons 46 Vice President--Mergers and Acquisitions
Thomas R. Notaro 47 Vice President--Comptroller
John W. Testa 61 Vice President, Assistant Secretary and
Treasurer
Ronald LaBow 63 Director
Robert A. Davidow 55 Director
Marvin L. Olshan 70 Director and Secretary
The business experience, principal occupations and employment as well
as the periods of service of each of the directors and executive officers of the
Company during the last five years are set forth below.
John R. Scheessele has been President of the Company, a Director and
President of WHX and Chairman of the Board, President and Chief Executive
Officer of WPSC since March 1997. Prior to such time, Mr. Scheessele was
President and Chief Executive Officer of The SKD Company, a privately held
supplier of original equipment to the automotive industry, from February 1996 to
February 1997. From October 1995 until January 1996, Mr. Scheessele was an
independent consultant. Prior to such time, Mr. Scheessele was President and
Chief Executive Officer of WCI Steel, Inc. ("WCI") from November 1994 to
September 1995, Executive Vice President and Chief Financial Officer of WCI from
November 1993 to November 1994 and Chief Financial Officer of WCI from October
1988 to November 1993.
Paul J. Mooney has been Executive Vice President and Chief Financial
Officer of WHX, the Company and WPSC since November 1997. Prior to joining the
Company, Mr. Mooney was a partner with Price Waterhouse LLP where he served in a
variety of positions including National Director of Cross Border Filing Services
with the Accounting, Auditing and SEC Services department since July 1, 1996,
Accounting and Business Advisory Services Department--Pittsburgh Site Leader
since 1988 and Client Service and Engagement Partner since 1985.
James T. Gibbons has been Vice President--Mergers and Acquisitions of
the Company since October 1997, and of WPSC since February 1994; Vice
President--Planning & Development of WPSC from April 1991 to February 1994;
Director--Reorganization Planning of WPSC from July 1987 to April 1991.
Thomas R. Notaro has been Vice President--Comptroller of the Company
since October 1997, and of WPSC since March 1997; Vice President--Information
Services and Assistant to the President of WPSC from February 1995 to March
1997; Vice President--Purchasing and Information Services of WPSC from February
1994 to February 1995; Vice President--Comptroller of WPSC from May 1993 to
February 1994; Comptroller of WPSC from July 1990 to May 1993.
John W. Testa has been Vice President, Assistant Secretary and
Treasurer of the Company since October 1997, and of WPSC since February 1994;
Vice President--Treasurer of WPSC since 1980.
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<PAGE>
Ronald LaBow has been a director of the Company since 1991. Mr. LaBow
has also been President of Stonehill Investment Corp. since February 1990. Mr.
LaBow is also a director of Regency Equities Corp., a real estate company, and
is Chairman of the Board of Directors of WHX.
Robert A. Davidow has been a private investor since January 1990. Mr.
Davidow is also a director of Arden Group, Inc. and WHX.
Marvin L. Olshan has been a director and Secretary of the Company since
1991 and a partner of Olshan Grundman Frome & Rosenzweig LLP since 1956. Mr.
Olshan is also a director of WHX.
The Company anticipates adding one independent director in the near
future, who will not be affiliated with WHX. Directors do not currently receive
any compensation for serving as directors.
In addition, the following table sets forth information regarding the
officers of WPSC:
Name Age Position
- -------------------- ----- ------------------------------------------
John R. Scheessele 50 Chairman, President and Chief Executive
Officer
Paul J. Mooney 46 Chief Financial Officer
James H. Bischoff 58 Vice President--Commercial
James E. Muldoon 54 Vice President--Purchasing
James T. Gibbons 46 Vice President--Mergers and Acquisitions
Daniel C. Keaton 47 Vice President--Human Resources
Paul K. Morrison 54 Vice President--Engineering and
Environmental Controls
Thomas R. Notaro 47 Vice President--Comptroller
Tom Patrick 58 Vice President--Wheeling Corrugating
Company
John W. Testa 61 Vice President, Secretary and Treasurer
The business experience, principal occupations and employment as well
as the periods of service of each of the officers of WPSC during the last five
years, who are not also officers of WPC, are set forth below.
James H. Bischoff has been Vice President--Commercial since August
1997. Mr. Bischoff was previously employed as Vice President--Sales and
Marketing for Quanex Corporation, a metal manufacturing and processing company,
since 1993. Prior to 1993, Mr. Bischoff was employed by Bethlehem Steel
Corporation for 32 years, most recently as District Sales Manager.
James E. Muldoon has been Vice President--Purchasing since October
1997. Mr. Muldoon was previously employed with U.S. Steel Group of USX
Corporation for 34 years most recently as General Manager of Purchasing.
Daniel C. Keaton has been Vice President--Human Resources since
February 1994; Vice President-- Employee Relations from April 1992 to February
1994; Director, Labor Relations from May 1991 to April 1992.
Paul K. Morrison has been Vice President--Engineering and Environmental
Controls since October 1990; Vice President--Engineering from February 1990 to
October 1990.
Tom Patrick has been Vice President--Wheeling Corrugating since
February 1994; Vice President-- Operations from November 1992 to February 1994;
Vice President and General Manager--Finishing Operations from March 1990 to
November 1992.
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<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table.
The following table sets forth, for the fiscal years indicated, all
compensation awarded to, earned by or paid to (i) the chief executive officer
("CEO") of the Company for the fiscal year ended December 31, 1997 (Mr. James L.
Wareham, the President of the Company until February 1997 and Mr. John R.
Scheessele, the current President of the Company) and (ii) the four most highly
compensated executive officers of the Company other than the CEO whose salary
and bonus exceeded $100,000 with respect to the fiscal year ended December 31,
1997 and who were employed by the Company on December 31, 1997 (together with
the CEO, the "Named Executive Officers").
<TABLE>
<CAPTION>
Summary Compensation Table(1)
Annual Compensation Long Term Compensation
------------------- ----------------------
Other Annual Securities All other
Name and Principal Salary Bonus Compensation Underlying Compensation
Position Year ($) ($)(2) ($)(3) Options (#) ($)(4)
---------- ---- ----- ------- -------- ----------- ------------------
<S> <C> <C> <C> <C> <C> <C>
John R. Scheessele, 1997 358,974 -- 133,250(6) 240,000 49,333(7)
President (5) 1996 -- -- -- -- --
1995 -- -- -- -- --
James L. Wareham, 1997 66,667 -- 9,001(9) -- 4,260
President (8) 1996 400,000 -- -- -- 47,140(10)
1995 400,000 90,000 -- -- 46,825(10)
James G. Bradley, 1997 133,333 53,333(13) -- 65,000 5,260
Vice President(11) 1996 160,000 -- -- 10,000 2,922
1995 40,000(12) -- -- -- --
James T. Gibbons, 1997 101,200 25,300(13) -- -- 5,111
Vice President 1996 101,200 -- -- -- 3,613
1995 101,200 15,872 -- -- 3,421
John W. Testa, 1997 99,000 23,500(13) -- 15,000 18,040
Vice President 1996 94,000 -- -- -- 14,013
1995 94,000 14,742 -- -- 13,231
Thomas R. Notaro, 1997 95,700 23,925(13) -- 15,000 5,493
Vice President 1996 95,700 -- -- -- 5,354
1995 95,700 14,232 -- -- 3,622
</TABLE>
- ----------------------------
(1) All compensation data include compensation received by such executive
officer for services rendered to the Company, WHX and WPSC. Option
data reflect options to purchase shares of WHX Common Stock.
(2) Includes bonuses paid in 1996 for services rendered in the prior year
pursuant to the WPSC Management Incentive Program ("WPSC Management
Incentive Program") covering officers and salaried employees of WPSC.
Mr. Wareham was not eligible to participate in the WPSC Management
Incentive Program. Mr. Wareham's employment agreement provides for an
annual bonus to be awarded in the sole discretion of the Company. Mr.
Wareham was granted a bonus in 1996 for services rendered in the prior
year. All bonus amounts have been attributed to the year in which the
services were performed.
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<PAGE>
(3) Excludes perquisites and other personal benefits unless the aggregate
amount of such compensation exceeds the lesser of either $50,000 or 10%
of the total of annual salary and bonus reported for such named
executive officer.
(4) Amounts shown, unless otherwise noted, reflect employer contributions
to WPSC Salaried Employees Pension Plan.
(5) Employment with the Company commenced in February 1997.
(6) Includes relocation allowance of $87,865 and membership dues of
$37,930.
(7) Includes insurance premiums paid by the Company in 1997 of $45,000.
(8) Resigned from employment with the Company in February 1997.
(9) Includes dues of $3,849 and financial planning fees of $4,081.
(10) Includes insurance premiums paid by the Company in 1996 and 1995 of
$40,000 annually.
(11) Resigned Chief Financial Officer position with the Company in October
1997.
(12) Employment with the Company commenced in October 1995.
(13) Represents retention bonus paid upon conclusion of the Strike.
Aggregated Option Exercises and Fiscal Year-End Option Value Table.
The following table sets forth certain information concerning
unexercised stock options held by the Named Executive Officers as of December
31, 1997.
Option Grants Table. The following table sets forth certain
information regarding stock option grants made to each of the Named Executive
Officers during the fiscal year ended December 31, 1997.
<TABLE>
<CAPTION>
Option Grants in Last Fiscal Year
Potential Realizable
Value at Assumed Annual Rates
of Stock Price Appreciation for
Individual Grants Option Term
----------------- -------------------------------
% of Total
Options
Number of Securities Granted to Exercise
Underlying Options Employees in Price Expiration
Name Granted (#) Fiscal Year ($/Sh) Date 5%($) 10%($)
---- ------------ ------------- ------- ------ ----- ------
<S> <C> <C> <C> <C> <C> <C>
John R. Scheessele 240,000 22.6% 13.8125 9/25/07 2,084,760 5,283,257
James L. Wareham 0 0% -- -- 0 0
James G. Bradley 65,000 6.1% 13.8125 9/25/07 564,623 1,430,882
James T. Gibbons 0 0% -- -- 0 0
John W. Testa 15,000 1.4% 13.8125 9/25/07 125,799 330,204
Thomas R. Notaro 15,000 1.4% 13.8125 9/25/07 125,799 330,204
</TABLE>
- -------------------
All options are to purchase shares of WHX Common Stock and were granted under
WHX's 1991 Incentive and Nonqualified Stock Option Plan and vest ratably over a
three-year period. This period commenced September 25, 1997.
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<PAGE>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values(1)
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised In-
Underlying Unexercised the-Money Options at
Options at 1997 Fiscal 1997 Fiscal Year-
Year-End(#) Exercisable/ End($)(1) Exercisable/
Unexercisable Unexercisable
Name -------------------------- ---------------------------
- ----
<S> <C> <C>
John R. Scheessele 0/240,000 0/0
James L. Wareham 0/0 0/0
James G. Bradley 0/65,000 0/0
James T. Gibbons 14,003/0 47,385/0
John W. Testa 8,753/15,000 28,447/0
Thomas R. Notaro 12,253/15,000 39,822/0
</TABLE>
- ------------------
(1) On December 31, 1997, the last reported sales price of the Common Stock
of WHX as reported on the New York Stock Exchange Composite Tape was
$12.00.
Long-Term Incentive and Pension Plans.
The Company does not have any long-term incentive or defined benefit
pension plans.
Deferred Compensation Agreements.
Certain key employees of the Company were parties to deferred
compensation agreements and/or severance agreements. The deferred compensation
agreements generally provide that the employee is entitled to receive, over a
fifteen-year period commencing at the later of age 65 or termination of
employment, an amount equal to twice his base salary for the most recent
twelve-month period of his employment prior to January 3, 1996. The annual
benefits payable to Messrs. Gibbons, Testa and Notaro upon retirement was
$13,493, $12,533 and $12,760, respectively. Certain other deferred compensation
payments are payable by WPSC in certain circumstances, such as a demotion in job
status without good cause, death or as a result of a change of control of the
Company. Each of Messrs. Gibbons, Testa and Notaro is a party to a deferred
compensation agreement such as is described above. Except as described in this
paragraph, and in the next several paragraphs with respect to the employment
agreement of Messrs. Scheessele, Wareham and Mooney, no plan or arrangement
exists which results in compensation to a Named Executive Officer in excess of
$100,000 upon such officer's future termination of employment or upon a
change-of-control.
Employment Agreements.
Mr. John R. Scheessele commenced employment as President of the
Company, President of WHX and President, Chairman of the Board and Chief
Executive Officer of WPSC pursuant to a three-year employment agreement, dated
as of February 7, 1997, which is automatically extended for successive
three-year periods unless earlier terminated pursuant to the provisions of such
agreement. The agreement provides for an annual salary to Mr. Scheessele of
$400,000 and an annual bonus to be awarded in the sole discretion of the
Company. The Company will consider several factors in determining whether to pay
a bonus to Mr. Scheessele including the performance of Mr. Scheessele and the
resulting benefits to the Company and the overall performance of the
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<PAGE>
Company as measured by the guidelines specified in the employment agreement that
are used to determine the bonuses of other senior executives of the Company. In
addition, the employment agreement provides for Mr. Scheessele to receive the
cash surrender value of life insurance contracts purchased by the Company upon
termination of his employment. The employment agreement provides that in the
event Mr. Scheessele's employment is terminated without cause or Mr. Scheessele
voluntarily terminates his employment due to a material change in the nature and
scope of his authorities and duties after a change in control of the Company
occurs, he will be entitled to receive a payment of $1,200,000, and other
specified benefits for a period of one year from the date of termination.
Specified benefits under Mr. Scheessele's employment agreement will be forfeited
under certain circumstances.
Mr. Wareham was employed pursuant to an agreement that provided for an
annual salary to Mr. Wareham of $400,000 and an annual bonus awarded in the sole
discretion of the Company. In addition, the employment agreement provided for
Mr. Wareham to receive the cash surrender value of life insurance contracts
purchased by the Company upon termination of his employment. In February 1997,
Mr. Wareham resigned from his positions with the Company and was succeeded by
Mr. John R. Scheessele.
In November 1997, Mr. Frederick G. Chbosky resigned from his positions
as Chief Financial Officer of each of the Company, WHX and WPSC. In 1998, Mr.
Chbosky will receive from WPSC a severance payment of $128,100.
Mr. Paul J. Mooney commenced employment as Executive Vice President and
Chief Financial Officer of each of the Company, WHX and WPSC pursuant to a
three-year employment agreement, dated as of October 17, 1997, which is
automatically extended for successive three-year periods unless earlier
terminated pursuant to the provisions of such agreement. The agreement provides
for an annual salary to Mr. Mooney of $200,000 and an annual bonus to be awarded
in the sole discretion of the Company. The Company will consider several factors
in determining whether to pay a bonus to Mr. Mooney including the performance of
Mr. Mooney and the resulting benefits to the Company and the overall performance
of the Company as measured by the guidelines specified in the employment
agreement that are used to determine the bonuses of other senior executives of
the Company. In addition, the employment agreement provides for Mr. Mooney to
receive the cash surrender value of life insurance contracts purchased by the
Company upon termination of his employment. The employment agreement provides
that in the event Mr. Mooney's employment is terminated without cause or Mr.
Mooney voluntarily terminates his employment due to a material change in the
nature and scope of his authorities and duties after a change in control of the
Company occurs, he will be entitled to receive a payment of $600,000, and other
specified benefits for a period of one year from the date of termination.
Specified benefits under Mr. Mooney's employment agreement will be forfeited
under certain circumstances.
Compensation Committee Interlock and Insider Participation.
The Board of Directors of the Company is responsible for determining
compensation of the Company's executive officers. Mr. Olshan is a member of
Olshan Grundman Frome & Rosenzweig LLP, which has been retained as outside
general counsel to the Company since January 1991. Fees received from the
Company by such firm during the fiscal year ended December 31, 1997 did not
exceed 5% of the Company's or the firm's revenues.
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<PAGE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS;
TRANSACTIONS BETWEEN THE COMPANY AND WHX
John R. Scheessele, President of the Company and WPSC and a director of
the Company and WPSC, and Akimune Takewaka, a director of WPSC, are directors of
Wheeling-Nisshin. Mr. Takewaka is also Chairman of the Board of
Wheeling-Nisshin. James D. Hesse, a former Vice President of the Company, is
President, Chief Executive Officer and a director of Wheeling-Nisshin. The
Company currently holds a 35.7% equity interest in Wheeling-Nisshin.
Marvin L. Olshan, a director and Secretary of the Company, is a member
of Olshan Grundman Frome & Rosenzweig LLP, which firm has been retained as
outside general counsel to the Company since January 1991. Fees received from
the Company by such firm during the fiscal year ended December 31, 1997 did not
exceed 5% of the Company's revenues.
The Company and WHX and WHX's affiliates have in the past entered into
intercompany transactions and agreements incident to their respective
businesses, and the Company and WHX may enter into material transactions and
agreements from time to time in the future. In connection with the November
Offering, the Company and WHX amended certain existing agreements, and also
entered into agreements with respect to the respective obligations that will be
assumed by each party. These agreements were not the result of arm's length
negotiations between the parties. It is possible that conflicts of interest
could arise between the Company and WHX in certain circumstances.
The following is a summary of certain agreements, arrangements and
transactions between the Company and WHX.
Indemnification and Intercreditor Agreement
Pursuant to the Indemnification Agreement (as defined), the Company has
agreed to indemnify WHX and hold WHX harmless from all liabilities relating to
the operations of the Company whether relating to or arising out of occurrences
prior to, on or after the closing ("Closing") of the November Offering, and
other obligations assumed at the Closing. Similarly, WHX has agreed to indemnify
the Company and hold the Company harmless from all liabilities relating to the
operations of the business of WHX, other than the business of the Company,
whether relating to or arising out of occurrences prior to, on or after the
Closing. To the extent WHX is called upon to make payments under its guarantees
of certain of the Company's indebtedness, the Company will indemnify it in
respect of such payments. To the extent the Company's actions cause a default
under the Revolving Credit Facility or the termination of the Receivables
Facility or a default under any other debt instrument of WHX or Unimast, the
Company will indemnify WHX and Unimast in respect of any incremental costs and
expenses suffered by WHX or Unimast on account thereof. The Company's
obligations under the Indemnification Agreement will be subordinate to the
Company's obligations under the Notes and the Term Loan Agreement. To the extent
WHX's or Unimast's actions cause a default under the Revolving Credit Facility
or the termination of the Receivables Facility or a default under any other debt
instrument of the Company, WHX and Unimast will indemnify the Company in respect
of any incremental costs and expenses and damages suffered by the Company on
account thereof. See "Indemnification and Intercreditor Agreement."
Tax Sharing Agreement
The Company will be included in the consolidated federal income tax
returns filed by WHX during all periods in which it has been or will be a
wholly-owned subsidiary of WHX ("Affiliation Year"). The Company and WHX have
entered into an agreement (the "Tax Sharing Agreement") providing for the manner
of determining payments with respect to federal income tax liabilities and
benefits arising in Affiliation Years. Under the Tax Sharing Agreement, the
Company will pay to WHX an amount equal to the share of WHX's consolidated
federal income tax liability, generally determined on a separate return basis,
and WHX will pay the Company for any reduction in WHX's consolidated federal
income tax liability resulting from utilization or deemed utilization of
deductions, losses, and credits arising which are attributable to the Company,
in each case net of any amounts theretofore paid or credited by WHX or the
Company to the other with respect thereto. In the event that WHX's consolidated
federal income tax liability for any Affiliation Year is adjusted upon audit or
otherwise, the Company
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<PAGE>
will bear any additional liability or receive any refund which is attributable
to adjustments of items of income, deduction, gain, loss or credit of the
Company. WHX shall permit the Company to participate in any audits or litigation
with respect to Affiliation Years, but WHX will otherwise have exclusive and
sole responsibility and control over any such proceedings.
Advances
From time to time WHX has made advances to the Company, principally to
fund working capital needs and interest payments on debt. The Company also has
made advances to WHX, from time to time, principally to fund the payment by WHX
of dividends on its outstanding preferred stock and the working capital needs of
Unimast. As of December 31, 1997, the Company had made advances to WHX in the
net amount of $28.0 million. All advances were repayable upon demand and did not
bear interest. To the extent the Company has net outstanding advances from WHX,
the Company's obligations to repay such advances will be subordinated to the
repayment obligations on the Notes.
Management Agreement
Pursuant to a management agreement, as amended, between WHX and WPN ,
of which Ronald LaBow, the Chairman of the Board of the Company is the sole
stockholder and an officer and director, WPN provides financial, management,
advisory and consulting services to WHX and the Company, subject to the
supervision and control of the independent directors of WHX. In 1996 and 1997,
WPN received a monthly fee of $458,333.33, with total payments of $5,500,000 in
1996 and 1997. Commencing on January 1, 1998, the Company has agreed to
contribute $2.5 million towards the payment of such annual fee in consideration
of services to be rendered to the Company.
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<PAGE>
DESCRIPTION OF PRINCIPAL INDEBTEDNESS
Revolving Credit Facility
WPSC has a Revolving Credit Facility with Citibank, N.A. as agent. The
Revolving Credit Facility provides for borrowing for general corporate purposes
of up to $150 million, and with a $35 million sublimit for Letters of Credit.
The Revolving Credit Facility expires May 3, 1999. Borrowings under the
Revolving Credit Facility are secured primarily by inventory of the Company,
WPSC, PCC and WCP, subsidiaries of the Company, and Unimast. The terms of the
Revolving Credit Facility contain various restrictive covenants, limiting among
other things, dividend payments or other distributions of assets, as defined in
the Revolving Credit Facility. Certain financial covenants associated with
leverage, net worth, capital spending, cash flow and interest coverage must also
be maintained. The Company, PCC, WCP and Unimast have each guaranteed all of the
obligations of WPSC under the Revolving Credit Facility. Borrowings outstanding
against the Revolving Credit Facility at December 31, 1997 totaled $89.8
million.
The Revolving Credit Facility bears interest, payable monthly in
arrears, at the Citibank prime rate plus 1.0% and/or a Eurodollar rate margin
plus 2.25%, but the margin over the prime rate and the Eurodollar rate can
fluctuate up or down based upon performance. The maximum prime rate margin is
1.00% and the maximum Eurodollar margin is 2.25%. The letter of credit fee is
2.25% and is also performance-based.
WPSC also has a separate facility with Citibank, N.A. for letters of
credit up to $50 million. At December 31, 1997 letters of credit totaling $9.3
million were outstanding under this facility. The letters of credit are
collateralized at 105% with U.S. Government securities owned by the Company, and
are subject to an administrative charge of .4% per annum on the amount of
outstanding letters of credit.
Term Loan Agreement
The Company entered into the Term Loan Agreement with DLJ Capital
Funding, Inc., as syndication agent, Donaldson, Lufkin & Jenrette Securities
Corporation, as arranger, Citicorp USA, Inc., as documentation agent, a
financial institution to be named as administrative agent and the lenders party
thereto on November 20, 1997, pursuant to which the Company borrowed $75.0
million. The net proceeds of the Term Loan Agreement were used, together with
the net proceeds of the November Offering, to defease the Old Notes and to
reduce borrowings under the Revolving Credit Facility.
The Term Loan Agreement matures on November 15, 2006. Amounts
outstanding under the Term Loan Agreement are expected to bear interest at
either (i) the Alternate Base Rate (as defined therein) plus 2.25% or (ii) the
LIBOR Rate (as defined therein) plus 3.25%, determined at the Company's option.
The Company's obligations under the Term Loan Agreement will be guaranteed by
the Company's Restricted Subsidiaries. The Company may prepay the obligations
under the Term Loan Agreement beginning on November 15, 1998, subject to a
premium of 2.0% of the principal amount thereof. Such premium declines to 1.0%
on November 15, 1999 with no premium on or after November 15, 2000.
The Term Loan Agreement contains customary representations and
warranties. Covenants and events of default under the Term Loan Agreement are
substantially similar to those described under "Description of the New
Notes--Certain Covenants" and "--Events of Default and Remedies." Lenders under
the Term Loan Agreement have customary voting, participation and assignment
rights.
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DESCRIPTION OF RECEIVABLES FACILITY
In August 1994 WPSC entered into an agreement to sell, up to $75
million on a revolving basis, an undivided percentage ownership in a designated
pool of accounts receivable generated by WPSC and two of its affiliates, WCP and
PCC. The agreement expires in August 1999. In July 1995, WPSC amended such
agreement to sell an additional $20 million on similar terms and conditions. In
October 1995, WPSC entered into an agreement to include the receivables
generated by Unimast, in the pool of accounts receivable sold. Accounts
receivable at December 31, 1996, exclude $45 million representing accounts
receivable sold with recourse limited to the extent of uncollectible balances.
As of December 31, 1997, fees paid by the Company ranged from 7.42% to 8.50% of
the outstanding amount of receivables sold. Based on the Company's collection
history, the Company believes that credit risk associated with the above
arrangement is immaterial. Accounts receivable sold pursuant to the Receivables
Facility at December 31, 1997 aggregated $69.0 million.
INDEMNIFICATION AND INTERCREDITOR AGREEMENT
Unimast, WHX and the Company entered into an intercreditor,
indemnification and subordination agreement (the "Indemnification Agreement")
upon the consummation of the November Offering which provides, among other
things, that Unimast and WHX will be responsible to the Company for repayment of
any of Unimast's borrowings under the Revolving Credit Facility and have agreed
to indemnify the Company if a default occurs under the Revolving Credit Facility
or if the Receivables Facility is terminated as a result of a breach of either
of such agreements by Unimast. In addition, the Company is solely responsible
for repayment of its borrowings under the Revolving Credit Facility and has
agreed to indemnify WHX and Unimast if a default occurs under the Revolving
Credit Facility or if the Receivables Facility is terminated as a result of a
breach of either of such agreements by the Company. The Company's obligations
under the Indemnification Agreement will be subordinate to the Company's
obligations under the Notes. See "Risk Factors--Cross-default Provisions."
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DESCRIPTION OF THE NEW NOTES
The Old Notes were issued under the Indenture among the Company, the
Guarantors and Bank One, N.A., as Trustee (in such capacity, the "Trustee"). The
New Notes will be issued under the Indenture, which will be qualified under the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), upon the
effectiveness of the Registration Statement of which this Prospectus is a part.
The form and terms of the New Notes are the same in all material respects as the
form and terms of the Old Notes, except that the offer and sale of the New Notes
will have been registered under the Securities Act and, therefore, the New Notes
will not bear legends restricting transfer thereof. Upon the consummation of the
Exchange Offer, Holders of Notes will not be entitled to registration rights
under, or the contingent increase in interest rate provided pursuant to, the
Registration Rights Agreement. The New Notes will evidence the same debt as the
Old Notes and will be treated as a single class under the Indenture with any Old
Notes that remain outstanding.
The terms of the Notes include those stated in the Indenture and those
made part of the Indenture by reference to the Trust Indenture Act as in effect
on the date of the Indenture. The Notes are subject to all such terms and
reference is made to the Indenture and the Trust Indenture Act for a statement
thereof. A copy of the Indenture has been filed with the Commission as an
exhibit to the Registration Statement of which this Prospectus forms a part. The
following summary, which describes certain provisions of the Indenture and the
Notes, does not purport to be complete, although all material terms of such
documents are set forth herein, and is subject to, and is qualified in its
entirety by reference to, the Indenture and the Notes, including the definitions
therein of terms not defined herein and those terms made a part thereof by the
Trust Indenture Act. Whenever particular defined terms of the Indenture not
otherwise defined herein are referred to, such defined terms are incorporated
herein by reference.
Principal, Maturity and Interest
The Notes are or will be senior unsecured obligations of the Company,
limited in aggregate principal amount to $275,000,000 and will mature on
November 15, 2007. Interest on the Notes will accrue at the rate of 9 1/4% per
annum and will be payable semi-annually in arrears on May 15 and November 15
(each, an "Interest Payment Date"), commencing on May 15, 1998, to holders of
record on the immediately preceding May 1 and November 1. Interest on the Notes
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of original issuance. Interest will be
computed on the basis of a 360-day year comprised of twelve 30-day months.
Principal of and interest, premium (if any) and Liquidated Damages (if any) on
the Notes will be payable at the office or agency of the Company maintained for
such purpose or, at the option of the Company, payment may be made by check
mailed to holders of the Notes at their respective addresses set forth in the
register of holders; provided, however, that all payments with respect to Notes
the holders of which have given wire transfer instructions to the Company will
be required to be made by wire transfer of immediately available funds to the
accounts specified by the holders thereof. Until otherwise designated by the
Company, the Company's office or agency will be the office of the Trustee
maintained for such purpose. The Notes will be issued in denominations of $1,000
and integral multiples thereof.
Ranking
The Notes are or will be unsecured obligations of the Company, ranking
senior in right of payment to all existing and future subordinated indebtedness
of the Company and pari passu with all existing and future senior unsecured
indebtedness of the Company, including borrowings under the Term Loan Agreement.
The Notes will be effectively junior to secured indebtedness of the Company to
the extent of the assets securing the indebtedness, and to secured indebtedness
of Subsidiaries of the Company, to the extent of the assets of such
subsidiaries. See "--Guarantees." At December 31, 1997, the borrowings under the
Term Loan Agreement and the use of proceeds therefrom, there would have been an
aggregate of $56.8 million of indebtedness of Subsidiaries of the Company. In
addition, the Company would have had the ability to borrow an additional
approximately $94.5 million under the Revolving Credit Facility at December 31,
1997. Except to the extent of the Subsidiary Guarantees, holders of the Notes
would have been effectively subordinated to all such indebtedness of
Subsidiaries and trade payables of WPSC.
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Guarantees
The Company's payment obligations under the Notes are jointly and
severally guaranteed on a senior basis by all of the Company's present and
future Subsidiaries (excluding Unrestricted Subsidiaries) (the "Guarantors")
pursuant to the Subsidiary Guarantees. The Subsidiary Guarantees rank pari passu
in right of payment to all existing and future senior Indebtedness of the
Guarantors, including the Guarantors' obligations under the Revolving Credit
Facility, any successor credit facility and the Term Loan Agreement. Each
Subsidiary Guarantee is an unconditional and irrevocable guarantee of the
obligations of the Company under the Notes and the Indenture. The obligations of
each Guarantor under its Subsidiary Guarantee is limited to the maximum amount
that may be paid thereunder without resulting in such Subsidiary Guarantee being
deemed to constitute a fraudulent conveyance or a fraudulent transfer under
applicable law. See "Risk Factors--Fraudulent Conveyances; Possible Invalidity
of Subsidiary Guarantees." Each Guarantor that makes a payment or distribution
under its Subsidiary Guarantee shall be entitled to a contribution from each
other Guarantor so long as exercise of such right does not impair the rights of
holders of Notes under any Subsidiary Guarantee.
The Indenture provides that no Guarantor may consolidate with or merge
with or into (whether or not such Guarantor is the surviving person) or sell all
or substantially all of its assets to, another corporation, person or entity
whether or not affiliated with such Guarantor unless (a) subject to the
provisions of the following paragraph, the person formed by or surviving any
such consolidation or merger (if other than such Guarantor) assumes all of the
obligations of such Guarantor, pursuant to a supplemental indenture in form and
substance reasonably satisfactory to the Trustee, under the Subsidiary Guarantee
of such Guarantor and the Indenture; (b) immediately after giving effect to such
transaction, no Default or Event of Default exists; (c) such Guarantor, or any
Person formed by or surviving any such consolidation or merger, would have
Consolidated Net Worth (immediately after giving effect to such transaction),
equal to or greater than the Consolidated Net Worth of the Guarantor immediately
preceding the transaction; and (d) the Company would be permitted, immediately
after giving effect to such transaction, to incur at least $1.00 of additional
Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth
in the covenant described under the caption "--Certain Covenants--Incurrence of
Indebtedness and Issuance of Preferred Stock." Notwithstanding the provisions of
this paragraph, the Indenture will not prohibit the merger of two of the
Guarantors or the merger of a Guarantor into the Company.
The Indenture provides that, in the event of a sale or other
disposition of all of the capital stock of any Guarantor (including by way of
merger or consolidation) or all of the assets of such Guarantor, then such
Guarantor (in the event of a sale or other disposition of all of the capital
stock of such Guarantor) or the corporation acquiring the property (in the event
of a sale or other disposition of all of the assets of such Guarantor) will be
released and relieved of any obligations under its Subsidiary Guarantee;
provided, however, that the Net Proceeds of such sale or other disposition are
applied in accordance with the applicable provisions of the Indenture. See
"--Repurchase at the Option of Holders--Asset Sales." In addition, the Indenture
will provide that, in the event the Board of Directors of the Company designates
a Guarantor to be an Unrestricted Subsidiary, then such Guarantor will be
released and relieved of any obligations under its Subsidiary Guarantee;
provided, however, that such designation is conducted in accordance with the
applicable provisions of the Indenture.
Optional Redemption
The Notes will not be redeemable at the Company's option prior to
November 15, 2002. Thereafter, the Notes will be subject to redemption at any
time at the option of the Company, in whole or in part, upon not less than 30 or
more than 60 days' notice to each holder of Notes to be redeemed, at the
redemption prices (expressed as percentages of principal amount) set forth
below, plus accrued and unpaid interest and Liquidated Damages, if any, thereon
to the applicable redemption date, if redeemed during the 12-month period
beginning on November 15 of the years indicated below:
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Year Percentage
---- ----------
2002...................... 104.625%
2003...................... 103.083%
2004...................... 101.542%
2005 and thereafter....... 100.000%
Notwithstanding the foregoing, on or prior to November 15, 2000, the
Company may redeem up to 35% of the aggregate principal amount of Notes
originally issued at a redemption price (expressed as a percentage of principal
amount) of 109.25% of the principal amount thereof, plus accrued and unpaid
interest and Liquidated Damages, if any, thereon to the redemption date, with
the net cash proceeds of one or more Public Equity Offerings; provided, however,
that (a) at least 65% of the aggregate principal amount of Notes initially
issued remains outstanding immediately after the occurrence of each such
redemption and (b) such redemption occurs no later than 30 days following the
date of the consummation of such Public Equity Offering.
At any time prior to November 15, 2002, the Notes may also be redeemed
as a whole but not in part at the option of the Company, upon not less than 30
nor more than 60 days prior notice mailed by first-class mail to each Holder's
registered address, at a redemption price equal to 100% of the principal amount
thereof plus the Applicable Premium, accrued interest and Liquidated Damages, if
any, thereon to the redemption date (subject to the right of Holders of record
on the relevant record date to receive interest due on the relevant interest
payment date).
"Applicable Premium" means, with respect to a Note at any redemption
date, the greater of (i) 1.0% of the principal amount of such Note and (ii) the
excess of (A) the present value at such time of (1) the redemption price of such
Note at November 15, 2002 plus (2) all required interest payments due on such
Note through November 15, 2002, computed using a discount rate equal to the
Treasury Rate plus 50 basis points, over (B) the then outstanding principal
amount of such Note.
"Treasury Rate" means the yield to maturity at the time of computation
of United States Treasury securities with a constant maturity (as compiled and
published in the most recent Federal Reserve Statistical Release H.15 (519)
which has become publicly available at least two business days prior to the
Redemption Date (or, if such Statistical Release is no longer published, any
publicly available source or similar market data)) most nearly equal to the
period from the redemption date to November 15, 2002; provided, however, that if
the period from the redemption date to November 15, 2002 is not equal to the
constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from the redemption date to November 15, 2002
is less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
Selection and Notice
In the event that less than all of the Notes are to be redeemed at any
time, selection of Notes for redemption will be made by the Trustee in
compliance with the requirements of the principal national securities exchange,
if any, on which the Notes are listed, or, if the Notes are not so listed, on a
pro rata basis, by lot or by such method as the Trustee shall deem fair and
appropriate; provided, however, that no Note shall be redeemed in a principal
amount that is less than $1,000. Notices of redemption shall be mailed by first
class mail at least 30 but not more than 60 days before the redemption date to
each holder of Notes to be redeemed at its registered address. If any Note is to
be redeemed in part only, the notice of redemption that relates to such Note
shall state the portion of the principal amount thereof to be redeemed and a new
Note in principal amount equal to the unredeemed portion of the original Note
shall be issued in the name of the holder thereof upon cancellation of the
original Note. On and after the redemption date, interest ceases to accrue on
Notes or portions of them called for redemption.
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Mandatory Redemption
Except as set forth below under "--Repurchase at the Option of
Holders," the Company is not required to make any mandatory redemption of or
sinking fund payments with respect to the Notes.
Repurchase at the Option of Holders
Change of Control
Upon the occurrence of a Change of Control, the Company will be
required to make an offer (a "Change of Control Offer") to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each holder's Notes at
an offer price in cash equal to 101% of the aggregate principal amount thereof,
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
date of repurchase (the "Change of Control Payment"). Within 30 days following a
Change of Control, the Company will mail a notice to each holder of Notes
describing the transaction that constitutes the Change of Control and offering
to repurchase Notes on the date specified in such notice, which date shall be no
earlier than 30 days and no later than 60 days from the date such notice is
mailed (the "Change of Control Payment Date"), pursuant to the procedures
required by the Indenture and described in such notice. The Company will comply
with the requirements of Rule 14e-1 under the Exchange Act and any other
securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Notes as a
result of a Change of Control.
On or before the Change of Control Payment Date, the Company will, to
the extent lawful, (a) accept for payment all Notes or portions thereof properly
tendered pursuant to the Change of Control Offer, (b) deposit with the Paying
Agent an amount equal to the Change of Control Payment in respect of all Notes
or portions thereof so tendered and (c) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an officer's certificate stating the
aggregate principal amount of Notes or portions thereof being purchased by the
Company. The Paying Agent will promptly mail to each holder of Notes so tendered
the Change of Control Payment for such Notes, and the Trustee will promptly
authenticate and mail (or cause to be transferred by book entry) to each holder
a new Note equal in principal amount to any unpurchased portion of the Notes
surrendered, if any; provided, however, that each such new Note will be in a
principal amount of $1,000 or an integral multiple thereof. The Company will
publicly announce the results of the Change of Control Offer on or as soon as
practicable after the Change of Control Payment Date.
Except as described above with respect to a Change of Control, the
Indenture does not contain provisions that permit the holders of the Notes to
require that the Company repurchase or redeem the Notes in the event of a
takeover, recapitalization or similar transaction. In addition, the Company
could enter into certain transactions, including acquisitions, refinancings or
other recapitalizations, that could affect the Company's capital structure or
the value of the Notes, but that would not constitute a Change of Control. The
Company's ability to repurchase Notes following a Change of Control may also be
limited by the Company's then existing financial resources.
The Company will not be required to make a Change of Control Offer
following a Change of Control if a third party makes the Change of Control Offer
in the manner, at the times and otherwise in compliance with the requirements
set forth in the Indenture applicable to a Change of Control Offer made by the
Company and purchases all Notes validly tendered and not withdrawn under such
Change of Control Offer.
A "Change of Control" will be deemed to have occurred upon the
occurrence of any of the following: (a) the sale, lease, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all of the assets of the
Company and its Restricted Subsidiaries, taken as a whole, to any person (as
such term in used in Section 13(d)(3) of the Exchange Act), (b) the adoption of
a plan relating to the liquidation or dissolution of the Company, (c) the
consummation of any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" or "group" (as such
terms are used in Section 13(d)(3) of the Exchange Act) other than WHX or an
underwriter or group of underwriters in an underwritten public offering becomes
the "beneficial owner" (as such term is defined in Rule 13d-3 and Rule 13d-5
under the Exchange Act), directly or indirectly through one or more
intermediaries, of at least 50% of the voting power of the outstanding voting
stock of the Company, (d) the merger or consolidation
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of the Company with or into another corporation with the effect that the then
existing stockholders of the Company hold less than 50% of the combined voting
power of the then outstanding voting securities of the surviving corporation of
such merger or the corporation resulting from such consolidation or (e) the
first day on which more than a majority of the members of the Board of Directors
of the Company are not Continuing Directors.
"Continuing Directors" means, as of any date of determination, any
member of the Board of Directors of the Company who (a) was a member of the
Board of Directors of the Company on the date of original issuance of the Notes
or (b) was nominated for election to the Board of Directors of the Company with
the approval of, or whose election to the Board of Directors of the Company was
ratified by, at least a majority of the Continuing Directors who were members of
the Board of Directors of the Company at the time of such nomination or election
or by WHX so long as WHX owns a majority of the Capital Stock of the Company.
Asset Sales
The Indenture provides that the Company will not, and will not permit
any of its Restricted Subsidiaries to, consummate an Asset Sale unless (a) the
Company or such Restricted Subsidiary, as the case may be, receives
consideration at the time of such Asset Sale at least equal to the fair market
value (evidenced by a resolution of the Board of Directors of the Company set
forth in an officer's certificate delivered to the Trustee) of the assets or
Equity Interests issued or sold or otherwise disposed of and (b) at least 80% of
the consideration therefor received by the Company or such Restricted Subsidiary
is in the form of cash; provided, however, that the amount of (i) any
liabilities (as shown on the Company's or such Restricted Subsidiary's most
recent balance sheet) of the Company or such Restricted Subsidiary (other than
contingent liabilities and liabilities that are by their terms subordinated to
the Notes or any guarantee thereof) that are assumed by the transferee of any
such assets pursuant to a customary novation agreement that releases the Company
or such Restricted Subsidiary from further liability and (ii) any securities,
notes or other obligations received by the Company or such Restricted Subsidiary
from such transferee that are converted by the Company or such Restricted
Subsidiary within 30 days of receipt into cash (to the extent of the cash
received) shall be deemed to be cash for purposes of this provision.
Within 270 days after the receipt of any Net Proceeds from an Asset
Sale, the Company or any such Restricted Subsidiary shall apply such Net
Proceeds to reduce Indebtedness under the Revolving Credit Facility or other
pari passu Indebtedness (and, in the case of such other pari passu Indebtedness,
to correspondingly reduce commitments with respect thereto). To the extent such
Net Proceeds are not utilized as contemplated in the preceding sentence, such
Net Proceeds may, within 270 days after receipt thereof, be utilized to acquire
Replacement Assets. Pending the final application of any such Net Proceeds, the
Company or any such Restricted Subsidiary may otherwise invest such Net Proceeds
in any manner that is not prohibited by the Indenture. Any Net Proceeds from
Asset Sales that are not applied or invested as provided in this paragraph will
be deemed to constitute "Excess Proceeds."
When the aggregate amount of Excess Proceeds exceeds $20 million, the
Company will be required to make an offer to all holders of Notes (an "Asset
Sale Offer") to purchase the maximum principal amount of Notes that may be
purchased out of the Note Pro Rata Share of Excess Proceeds at an offer price in
cash in an amount equal to 100% of the principal amount thereof, plus accrued
and unpaid interest and Liquidated Damages, if any, thereon to the date of
purchase, in accordance with the procedures set forth in the Indenture. To the
extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the amount that the Company is required to repurchase, the
Company may use any remaining Excess Proceeds for general corporate purposes. If
the aggregate amount of Notes surrendered by holders thereof exceeds the amount
that the Company is required to repurchase, the Trustee shall select the Notes
to be purchased on a pro rata basis. Upon completion of such offer to purchase,
the amount of Excess Proceeds shall be reset at zero.
Certain Covenants
Restricted Payments
The Indenture provides that the Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, (a) declare or
pay any dividend or make any other payment or distribution on account of
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the Company's or any of its Restricted Subsidiaries' Equity Interests
(including, without limitation, any payment in connection with any merger or
consolidation involving the Company) or to the direct or indirect holders of the
Company's Equity Interests in their capacity as such (other than dividends or
distributions payable in Equity Interests (other than Disqualified Stock) of the
Company); (b) purchase, redeem or otherwise acquire or retire for value
(including without limitation, in connection with any merger or consolidation
involving the Company) any Equity Interests of the Company (other than any such
Equity Interests owned by the Company or any Wholly Owned Restricted Subsidiary
of the Company); (c) make any payment on or with respect to, or purchase,
redeem, defease or otherwise acquire or retire for value, any Indebtedness that
is subordinated in right of payment to the Notes, except a payment of interest
or principal at Stated Maturity; or (d) make any Restricted Investment (all such
payments and other actions set forth in clauses (a) through (d) above being
collectively referred to as "Restricted Payments"), unless, at the time of and
after giving effect to such Restricted Payment:
(i) no Default or Event of Default shall have occurred and be
continuing or would occur as a consequence thereof;
(ii) the Company would, at the time of such Restricted Payment
and after giving pro forma effect thereto as if such Restricted Payment
had been made at the beginning of the applicable four-quarter period,
have been permitted to incur at least $1.00 of additional Indebtedness
pursuant to the Consolidated Interest Coverage Ratio test set forth in
the first paragraph of the covenant described under the caption "--
Incurrence of Indebtedness and Issuance of Preferred Stock"; and
(iii) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the date of the Indenture, is less than
the sum of (A) 50% of the Consolidated Net Income of the Company for
the period (taken as one accounting period) commencing April 1, 1998 to
the end of the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period
is a deficit, less 100% of such deficit), plus (B) 100% of the
aggregate Net Cash Proceeds received by the Company from the issue or
sale since the date of the Indenture of Equity Interests of the Company
(other than Disqualified Stock) or of Disqualified Stock or debt
securities of the Company that have been converted into such Equity
Interests (other than any such Equity Interests, Disqualified Stock or
convertible debt securities sold to a Restricted Subsidiary of the
Company and other than Disqualified Stock or convertible debt
securities that have been converted into Disqualified Stock), plus (C)
to the extent that any Restricted Investment that was made after the
date of the Indenture is sold for cash or otherwise liquidated or
repaid for cash, the sum of (x) the initial amount of such Restricted
Investment and (y) 50% of the aggregate Net Proceeds received by the
Company or any Restricted Subsidiary in excess of the initial amount of
such Restricted Investment, plus (D) $10 million.
The foregoing provisions do not prohibit (a) the payment of any
dividend within 60 days after the date of declaration thereof, if at said date
of declaration such payment would have complied with the provisions of the
Indenture; (b) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests of the Company
in exchange for, or out of the net cash proceeds of the substantially concurrent
sale (other than to a Restricted Subsidiary of the Company) of, other Equity
Interests of the Company (other than any Disqualified Stock); provided that the
amount of any such Net Cash Proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition shall be excluded from
clause (iii) (B) of the preceding paragraph; (c) the defeasance, redemption,
repurchase, retirement or other acquisition of subordinated Indebtedness with
the Net Cash Proceeds from an incurrence of, or in exchange for, Permitted
Refinancing Indebtedness; (d) the payment of any dividend by a Restricted
Subsidiary of the Company to the holders of its Equity Interests on a pro rata
basis; (e) so long as no Default or Event of Default shall have occurred and be
continuing, the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company held by any member of the Company's
or any of its Restricted Subsidiaries' management upon the death, disability or
termination of employment of such member of management; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $500,000 in any calendar year and $2.5 million
in the aggregate; (f) loans or advances to Unimast by the Company or WPSC prior
to the first anniversary of the date of the Indenture of amounts borrowed by
WPSC under the Revolving Credit Facility provided (i) such loans or advances do
not exceed $40 million at any time outstanding, (ii) Unimast pays interest
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to WPSC on such loans or advances in an amount equal to the interest payable by
WPSC on such amounts pursuant to the Revolving Credit Facility and (iii) such
loans and advances are repaid in full on or prior to the first anniversary of
the date of the Indenture; (g) the payment by the Company of management fees to
WHX not to exceed $2.5 million in any calendar year, in exchange for services
provided to it by WPN pursuant to the management agreement between WHX and WPN ;
and (h) payments permitted under the WHX Agreements.
In determining the amount of Restricted Payments permissible under
clause (iii) of the first paragraph of this covenant, amounts expended pursuant
to clauses (a) and (e) of the immediately preceding paragraph shall be included
as Restricted Payments for purposes of such clause (iii).
The Board of Directors of the Company may designate any Restricted
Subsidiary to be an Unrestricted Subsidiary if such designation would not cause
a Default. For purposes of making such determination, all outstanding
Investments by the Company and its Restricted Subsidiaries (except to the extent
repaid in cash) in the Subsidiary so designated will be deemed to be Restricted
Payments at the time of such designation. All such outstanding Investments will
be deemed to constitute Investments in an amount equal to the greater of (a) the
net book value of such Investments at the time of such designation and (b) the
fair market value of such Investments at the time of such designation. Such
designation will be permitted only if such Restricted Payment would be permitted
at such time and if such Restricted Subsidiary otherwise meets the definition of
an Unrestricted Subsidiary.
The amount of all Restricted Payments (other than cash) shall be the
fair market value on the date of the Restricted Payment of the asset(s) or
securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any non-cash Restricted Payment shall be determined by
the Board of Directors of the Company whose resolution with respect thereto
shall be delivered to the Trustee. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an officer's
certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by the covenant described in this
section were computed.
Incurrence of Indebtedness and Issuance of Preferred Stock
The Indenture provides that the Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, create, incur,
issue, assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Indebtedness) and that the Company will not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that the Company may incur Indebtedness if the
Consolidated Interest Coverage Ratio for the Company's most recently ended four
full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
would have been at least 2.00 to 1, on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred at the beginning of such four-quarter period.
Notwithstanding the foregoing, the Company and, to the extent set forth
below, its Restricted Subsidiaries may incur the following (each of which shall
be given independent effect):
(a) Indebtedness of the Company under the Notes and the
Indenture;
(b) Permitted Working Capital Indebtedness of the Company and
its Restricted Subsidiaries;
(c) Existing Indebtedness (other than Permitted Working
Capital Indebtedness and Indebtedness under the Letter of Credit
Facility);
(d) Indebtedness of the Company and its Restricted
Subsidiaries under the Letter of Credit Facility;
(e) Capital Expenditure Indebtedness, Capitalized Lease
Obligations and purchase money Indebtedness of the Company and its
Restricted Subsidiaries in an aggregate principal amount not to exceed
$50 million at any time outstanding;
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(f) (i) Hedging Obligations of the Company and its Restricted
Subsidiaries covering Indebtedness of the Company or such Restricted
Subsidiary (which Indebtedness is otherwise permitted to be incurred
under this covenant) to the extent the notional principal amount of any
such Hedging Obligation does not exceed the principal amount of the
Indebtedness to which such Hedging Obligation relates; or (ii)
repurchase agreements, reverse repurchase agreements or similar
agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by
any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition; provided that the terms of such agreements comply with the
guidelines set forth in Federal--Financial Agreements of Depository
Institutions with Securities and Others (or any successor guidelines),
as adopted by the Comptroller of the Currency;
(g) Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount not to exceed $30 million
at any time outstanding;
(h) Indebtedness of the Company representing guarantees of
Indebtedness incurred by one of its Restricted Subsidiaries pursuant
to, and in compliance with, another provision of this covenant;
(i) Indebtedness of the Company or any of its Restricted
Subsidiaries representing guarantees of a portion of the Indebtedness
of Wheeling-Nisshin which is not greater than the Company's or such
Restricted Subsidiary's pro rata ownership of the outstanding Equity
Interests in Wheeling-Nisshin; provided, however, that (i) such
Indebtedness is expressly subordinated to the prior payment in full in
cash of all Obligations with respect to the Notes and (ii) at the time
of incurrence and after giving effect to the Indebtedness of
Wheeling-Nisshin which is being guaranteed, the Consolidated Interest
Coverage Ratio of Wheeling-Nisshin for its most recently ended four
full fiscal quarters for which internal financial statements are
available would have been at least 2.00 to 1, determined on a pro forma
basis as if any additional Indebtedness had been incurred at the
beginning of such four quarter period;
(j) Indebtedness of the Company or its Restricted Subsidiaries
representing guarantees of Indebtedness of Wheeling-Nisshin required to
be made pursuant to the Letter of Undertaking not to exceed $10
million;
(k) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Wholly Owned Restricted Subsidiaries; provided, however,
that (i) if the Company is the obligor on such Indebtedness, such
Indebtedness is expressly subordinated to the prior payment in full in
cash of all Obligations with respect to the Notes and (ii) (A) any
subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than the Company or a
Wholly Owned Restricted Subsidiary and (B) any sale or other transfer
of any such Indebtedness to a Person that is not either the Company or
a Wholly Owned Restricted Subsidiary shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be;
(l) Indebtedness under the Term Loan Agreement; and
(m) any Permitted Refinancing Indebtedness representing a
replacement, renewal, refinancing or extension of Indebtedness
permitted under the first paragraph and clauses (c) and (l) of this
covenant.
Liens
The Indenture provides that the Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, create, incur,
assume or suffer to exist any Lien on any asset now owned or hereafter acquired,
or any income or profits therefrom or assign or convey any right to receive
income therefrom, without making effective provision for all payments due under
the Indenture and the Notes and the Subsidiary Guarantees to be directly secured
on an equal and ratable basis with the obligations so secured or, in the event
such Indebtedness is subordinate in right of payment to the Notes or the
Subsidiary Guarantees, prior to such Indebtedness, in each case until such time
as such obligations are no longer secured by a Lien.
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Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may create, incur, assume or suffer to exist (each of which shall
be given independent effect):
(a) Permitted Liens;
(b) Liens to secure the payment of Capital Expenditure
Indebtedness and Capitalized Lease Obligations, provided that (i) the
aggregate principal amount of Indebtedness secured by such Liens shall
not exceed the lesser of cost or Fair Market Value of the assets or
property acquired, constructed or improved with the proceeds of such
Indebtedness and (ii) such Liens shall not encumber any other assets or
property of the company and its Subsidiaries;
(c) Liens secured by the Capital Stock or assets of
Wheeling-Nisshin or Ohio Coatings Company to the extent required under
agreements as existing on the date of the Indenture; and
(d) Liens on accounts receivable, inventory, intangibles
necessary or useful for the sale of such inventory, and other current
assets of the Company or any Restricted Subsidiary or on Capital Stock
of Subsidiaries, in each case incurred to secure Permitted Working
Capital Indebtedness.
Dividend and Other Payment Restrictions Affecting Subsidiaries
The Indenture provides that the Company will not, and will not permit
any of its Restricted Subsidiaries to, directly or indirectly, create or
otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any Restricted Subsidiary to (a) (i) pay dividends
or make any other distributions to the Company or any of its Restricted
Subsidiaries on its Capital Stock or with respect to any other interest or
participation in, or measured by, its profits, or (ii) pay any indebtedness owed
to the Company or any of its Restricted Subsidiaries, (b) make loans or advances
to the Company or any of its Restricted Subsidiaries or (c) transfer any of its
properties or assets to the Company or any of its Restricted Subsidiaries,
except for such encumbrances or restrictions existing under or by reason of (1)
Existing Indebtedness as in effect on the date of the Indenture including,
without limitation, restrictions under the Revolving Credit Facility, as in
effect on the date of the Indenture and any refinancings, amendments,
restatements, renewals or replacements thereof; provided, however, that the
agreements governing such contain restrictions that are not more restrictive,
taken as a whole, than those contained in the agreement governing the
Indebtedness being so refinanced, amended, restated, renewed or replaced (2) the
Indenture, the Notes and the Subsidiary Guarantees, (3) applicable law, (4) any
instrument governing Indebtedness or Capital Stock of a person acquired by the
Company or any of its Restricted Subsidiaries as in effect at the time of such
acquisition (except to the extent such Indebtedness was incurred in connection
with or in contemplation of such acquisition), which encumbrance or restriction
is not applicable to any person, or the properties or assets of any person,
other than the person, or the property or assets of the person, so acquired,
provided that, in the case of Indebtedness, such Indebtedness was permitted by
the terms of the Indenture to be incurred, (5) customary non-assignment
provisions in leases entered into in the ordinary course of business and
consistent with past practices, (6) purchase money obligations for property
acquired in the ordinary course of business that impose restrictions of the
nature described in clause (c) above on the property so acquired, (7) customary
provisions in bona fide contracts for the sale of property or assets, or (8)
Permitted Refinancing Indebtedness, provided that the restrictions contained in
the agreements governing such Permitted Refinancing Indebtedness are not more
restrictive, taken as a whole, than those contained in the agreements governing
the Indebtedness being refinanced.
Merger, Consolidation or Sale of Assets
The Indenture provides that the Company may not consolidate or merge
with or into (whether or not the Company is the surviving corporation), or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its properties or assets in one or more related transactions, to another
corporation, person or entity unless (a) the Company is the surviving
corporation or the entity or the person formed by or surviving any such
consolidation or merger (if other than the Company) or to which such sale,
assignment, transfer, lease, conveyance or other disposition shall have been
made is a corporation organized or existing under the laws of the United States,
any state thereof or the District of Columbia, (b) the entity or person formed
by or surviving any
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such consolidation or merger (if other than the Company) or the entity or person
to which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made assumes all the obligations of the Company under the Notes
and the Indenture pursuant to a supplemental indenture in a form reasonably
satisfactory to the Trustee, (c) immediately after such transaction no Default
or Event of Default exists and (d) except in the case of a merger of the Company
with or into a Wholly Owned Restricted Subsidiary of the Company, the Company or
the entity or person formed by or surviving any such consolidation or merger (if
other than the Company), or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made (A) will have Consolidated
Net Worth immediately after the transaction equal to or greater than the
Consolidated Net Worth of the Company immediately preceding the transaction and
(B) will, at the time of such transaction and after giving pro forma effect
thereto as if such transaction had occurred at the beginning of the applicable
four-quarter period, be permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Consolidated Interest Coverage Ratio test set forth
in the first paragraph of the covenant described above under the caption
"--Incurrence of Indebtedness and Issuance of Preferred Stock."
Transactions with Affiliates
The Indenture provides that the Company will not, and will not permit
any of its Restricted Subsidiaries to, make any payment to, or sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate or any officer, director or employee of the Company
(each of the foregoing, an "Affiliate Transaction"), unless (a) such Affiliate
Transaction is on terms that are no less favorable to the Company or the
relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated person or, if there is no such comparable transaction, on terms that
are fair and reasonable to the Company, and (b) the Company delivers to the
Trustee (i) with respect to any Affiliate Transaction or series of related
Affiliate Transactions involving aggregate consideration in excess of $2.0
million, either (A) a resolution of the Board of Directors of the Company set
forth in an officer's certificate certifying that such Affiliate Transaction
complies with clause (a) above and that such Affiliate Transaction has been
approved by a majority of the disinterested members of the Board of Directors of
the Company or (B) if there are no disinterested members of the Board of
Directors of the Company, an opinion as to the fairness to the Company of such
Affiliate Transaction from a financial point of view issued by an accounting,
appraisal or investment banking firm of national standing and (ii) with respect
to any Affiliate Transaction or series of related Affiliate Transactions
involving aggregate consideration in excess of $5.0 million, an opinion as to
the fairness to the Company of such Affiliate Transaction from a financial point
of view issued by an accounting, appraisal or investment banking firm of
national standing; provided, however, that the following shall be deemed not to
be Affiliate Transactions: (v) customary directors' fees, indemnification or
similar arrangements or any employment agreement or other compensation plan or
arrangement entered into by the Company or any of its Restricted Subsidiaries in
the ordinary course of business and consistent with the past practice of the
Company or such Restricted Subsidiary; (w) transactions between or among the
Company and/or its Wholly-Owned Restricted Subsidiaries; (x) transactions
pursuant to the WHX Agreements or agreements with or applicable to any of
Wheeling-Nisshin, Ohio Coatings Company, the Empire-Iron Mining Partnership or
W-P Coal Company, in each case as in effect on the date of the Indenture; (y)
the purchase of accounts receivable from Unimast for immediate resale on the
same terms pursuant to the Receivables Facility; and (z) Restricted Payments
that are permitted pursuant to clauses (e), (f), (g) and (h) of the second
paragraph of the covenant described under the heading "--Restricted Payments"
and Indebtedness permitted to be incurred pursuant to clauses (i) and (j) of the
second paragraph of the covenant described under the heading "--Incurrence of
Indebtedness and Issuance of Preferred Stock."
Sale and Leaseback Transactions
The Indenture provides that the Company will not, and will not permit
any of its Restricted Subsidiaries to, enter into any sale and leaseback
transaction; provided, however, that the Company may enter into a sale and
leaseback transaction if (a) the Company could have (i) incurred Indebtedness in
an amount equal to the Attributable Indebtedness relating to such sale and
leaseback transaction pursuant to the Consolidated Interest Coverage Ratio test
set forth in the first paragraph of the covenant described under the heading
"--Incurrence of Indebtedness and Issuance of Preferred Stock" and (ii) incurred
a Lien to secure such Indebtedness pursuant to the covenant described
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above under the heading "--Liens," (b) the gross cash proceeds of such sale and
leaseback transaction are at least equal to the fair market value (as determined
in good faith by the Board of Directors of the Company and set forth in an
officer's certificate delivered to the Trustee) of the property that is the
subject of such sale and leaseback transaction and (c) the transfer of assets in
such sale and leaseback transaction is permitted by, and the Company applies the
Net Cash Proceeds of such transaction in compliance with, the covenant described
under the heading "--Repurchase at the Option of Holders--Asset Sales."
Issuances and Sales of Capital Stock of Subsidiaries
The Indenture provides that the Company (a) will not permit any Wholly
Owned Restricted Subsidiary of the Company to issue any of its Equity Interests
to any person other than to the Company or a Wholly Owned Restricted Subsidiary
of the Company, and (b) will not, and will not permit any Wholly Owned
Restricted Subsidiary of the Company to, transfer, convey, sell, lease or
otherwise dispose of any Capital Stock of any Wholly Owned Restricted Subsidiary
of the Company to any person (other than the Company or any Wholly Owned
Restricted Subsidiary of the Company) unless (i) such transfer, conveyance,
sale, lease or other disposition is of all of the Capital Stock of such Wholly
Owned Restricted Subsidiary and (ii) the Net Proceeds from such transfer,
conveyance, sale, lease or other disposition are applied in accordance with the
covenant described under the caption "--Repurchase at the Option of
Holders--Asset Sales"; provided that this clause (b) shall not apply to any
pledge of Capital Stock of any Wholly Owned Restricted Subsidiary of the Company
permitted pursuant to clause (d) of the covenant described under the caption
"--Liens."
Additional Subsidiary Guarantees
The Indenture provides that if the Company or any of its Restricted
Subsidiaries shall, after the date of the Indenture, acquire, create or
designate another Restricted Subsidiary, then such newly acquired, created or
designated Restricted Subsidiary shall execute a Subsidiary Guarantee and
deliver an opinion of counsel in accordance with the terms of the Indenture.
Payment for Consent
The Indenture provides that neither the Company nor any of its
Restricted Subsidiaries will, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any holder
of any Notes for or as an inducement to any consent, waiver or amendment of any
of the terms or provisions of the Indenture or the Notes unless such
consideration is offered to be paid or is paid to all holders of the Notes that
consent, waive or agree to amend in the timeframe set forth in the solicitation
statement documents relating to such consent, waiver or agreement.
Reports
The Indenture provides that, whether or not the Company is required to
do so by the rules and regulations of the Commission, the Company will file with
the Commission (unless the Commission will not accept such a filing) and, within
15 days of filing, or attempting to file, the same with the Commission, furnish
to the holders of the Notes (a) all quarterly and annual financial and other
information with respect to the Company and its Subsidiaries that would be
required to be contained in a filing with the Commission on Forms 10-Q and 10-K
if the Company were required to file such forms, including a "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and,
with respect to the annual information only, a report thereon by the Company's
certified independent accountants, and (b) all current reports that would be
required to be filed with the Commission on Form 8-K if the Company were
required to file such reports. In addition, the Company and the Guarantors will
furnish to the holders of the Notes, prospective purchasers of the Notes and
securities analysts, upon their request, the information, if any, required to be
delivered pursuant to Rule 144A(d)(4) under the Securities Act.
Events of Default and Remedies
The Indenture provides that each of the following constitutes an Event
of Default: (a) default in the payment when due of interest or Liquidated
Damages on the Notes and such default continues for 30 days; (b) default in
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payment when due of the principal of or premium (if any) on the Notes; (c)
failure by the Company to comply with the provisions described under the
captions "--Repurchase at the Option of Holders--Change of Control," "--Asset
Sales," "--Certain Covenants--Restricted Payments," "--Incurrence of
Indebtedness and Issuance of Preferred Stock" or "--Merger, Consolidation or
Sale of Assets"; (d) failure by the Company for 30 days after notice to comply
with any of its other agreements in the Indenture or the Notes; (e) default
under any mortgage, indenture or instrument under which there may be issued or
by which there may be secured or evidenced any Indebtedness for money borrowed
by the Company or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries), whether such
Indebtedness or guarantee now exists or is created after the date of the
Indenture, which default (i) is caused by a failure to pay principal of or
premium (if any) or interest on such Indebtedness prior to the expiration of any
grace period provided in such Indebtedness (a "Payment Default") or (ii) results
in the acceleration of such Indebtedness prior to its express maturity and, in
each case, the principal amount of any such Indebtedness, together with the
principal amount any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$10.0 million or more; (f) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $10.0 million,
which judgments are not paid, discharged or stayed for a period of 60 days; (g)
failure by any Guarantor to perform any covenant set forth in its Subsidiary
Guarantee, or the repudiation by any Guarantor of its obligations under its
Subsidiary Guarantee or the unenforceability of any Subsidiary Guarantee against
a Guarantor for any reason, unless, in each such case, such Guarantor and its
Subsidiaries have no Indebtedness outstanding at such time or at any time
thereafter; and (h) certain events of bankruptcy or insolvency with respect to
the Company or any of its Restricted Subsidiaries.
If any Event of Default occurs and is continuing, the Trustee or the
holders of at least 25% in principal amount of the then outstanding Notes may
declare all the Notes to be due and payable immediately. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency with respect to the Company, any Significant Subsidiary
or any group of Restricted Subsidiaries that, taken together, would constitute a
Significant Subsidiary, all outstanding Notes will become due and payable
without further action or notice. Holders of the Notes may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power.
In the case of any Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes pursuant to the
optional redemption provisions of the Indenture, an equivalent premium shall
also become and be immediately due and payable to the extent permitted by law
upon the acceleration of the Notes. If an Event of Default occurs prior to
November 15, 2002 by reason of any willful action (or inaction) taken (or not
taken) by or on behalf of the Company with the intention of avoiding the
prohibition on redemption of the Notes prior to such date, then the premium
specified in the Indenture shall also become immediately due and payable to the
extent permitted by law upon the acceleration of the Notes.
The holders of a majority in aggregate principal amount of the Notes
then outstanding by notice to the Trustee may on behalf of the holders of all of
the Notes waive any existing Default or Event of Default and its consequences
under the Indenture except a continuing Default or Event of Default in the
payment of the principal of or interest or Liquidated Damages on the Notes.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture, and the Company is required upon
becoming aware of any Default or Event of Default, to deliver to the Trustee a
statement specifying such Default or Event of Default.
No Personal Liability of Directors, Officers, Employees and Stockholders
No director, officer, employee, incorporator or stockholder of the
Company, as such, shall have any liability for any obligations of the Company
under the Notes or the Indenture or for any claim based on, in respect of, or by
reason of, such obligations or their creation. Each holder of Notes by accepting
a Note waives and releases all such liability. The waiver and release are part
of the consideration for issuance of the Notes. Such waiver may
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not be effective to waive liabilities under the federal securities laws and it
is the view of the Commission that such a waiver is against public policy.
Legal Defeasance and Covenant Defeasance
The Company may, at its option and at any time, elect to have all of
its obligations discharged with respect to the outstanding Notes ("Legal
Defeasance") except for (a) the rights of holders of outstanding Notes to
receive payments in respect of the principal of and interest, premium (if any)
and Liquidated Damages (if any) on such Notes when such payments are due from
the trust referred to below, (b) the Company's obligations with respect to the
Notes concerning issuing temporary Notes, registration of Notes, mutilated,
destroyed, lost or stolen Notes and the maintenance of an office or agency for
payment and money for security payments held in trust, (c) the rights, powers,
trusts, duties and immunities of the Trustee, and the Company's obligations in
connection therewith and (d) the Legal Defeasance provisions of the Indenture.
In addition, the Company may, at its option and at any time, elect to have the
obligations of the Company released with respect to certain covenants that are
described in the Indenture ("Covenant Defeasance") and thereafter any omission
to comply with such obligations shall not constitute a Default or Event of
Default with respect to the Notes. In the event Covenant Defeasance occurs,
certain events (not including non-payment, bankruptcy, receivership,
rehabilitation and insolvency events) described under "--Events of Default and
Remedies" will no longer constitute an Event of Default with respect to the
Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance,
(i) the Company must irrevocably deposit with the Trustee, in trust, for the
benefit of the holders of the Notes, cash in U.S. dollars, non-callable
Government Securities, or a combination thereof, in such amounts as will be
sufficient, in the opinion of a nationally recognized firm of independent public
accountants, to pay the principal of and interest, premium (if any) and
Liquidated Damages (if any) on the outstanding Notes on the stated maturity or
on the applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a particular
redemption date, (ii) in the case of Legal Defeasance, the Company shall have
delivered to the Trustee an opinion of counsel in the United States reasonably
acceptable to the Trustee confirming that (A) the Company has received from, or
there has been published by, the Internal Revenue Service a ruling or (B) since
the date of the Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
opinion of counsel shall confirm that, the holders of the outstanding Notes will
not recognize income, gain or loss for federal income tax purposes as a result
of such Legal Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such Legal Defeasance had not occurred, (iii) in the case of Covenant
Defeasance, the Company shall have delivered to the Trustee an opinion of
counsel in the United States reasonably acceptable to the Trustee confirming
that the holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant Defeasance and
will be subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Covenant Defeasance
had not occurred, (iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event of Default
resulting from the borrowing of funds to be applied to such deposit), (v) such
Legal Defeasance or Covenant Defeasance will not result in a breach or violation
of, or constitute a default under any material agreement or instrument (other
than the Indenture) to which the Company or any of its Restricted Subsidiaries
is a party or by which the Company or any of its Restricted Subsidiaries is
bound, (vi) the Company must have delivered to the Trustee an opinion of counsel
to the effect that the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting
creditors' rights generally, (vii) the Company must deliver to the Trustee an
officer's certificate stating that the deposit was not made by the Company with
the intent of preferring the holders of Notes over the other creditors of the
Company with the intent of defeating, hindering, delaying or defrauding
creditors of the Company or others and (viii) the Company must deliver to the
Trustee an officer's certificate and an opinion of counsel, each stating that
all conditions precedent provided for relating to the Legal Defeasance or the
Covenant Defeasance have been complied with.
Transfer and Exchange
A holder of Notes may transfer or exchange Notes in accordance with the
Indenture. The registrar and the Trustee may require a holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a holder to pay any taxes and fees required by law or
permitted by the Indenture. The
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Company is not required to transfer or exchange any Note selected for
redemption. Also, the Company is not required to transfer or exchange any Note
for a period of 15 days before a selection of Notes to be redeemed.
The registered holder of a Note will be treated as the owner of it for
all purposes.
Amendment, Supplement and Waiver
Except as provided below, the Indenture or the Notes may be amended or
supplemented with the consent of the holders of at least a majority in principal
amount of the Notes then outstanding (including, without limitation, consents
obtained in connection with a purchase of, or tender offer or exchange offer
for, Notes), and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the holders of a
majority in principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for Notes).
Without the consent of each holder affected, an amendment or waiver may
not (with respect to any Notes held by a non-consenting Holder): (a) reduce the
principal amount of Notes whose holders must consent to an amendment, supplement
or waiver, (b) reduce the principal of or change the fixed maturity of any Note
or alter the provisions with respect to the redemption of the Notes (including
as described under the caption "--Repurchase at the Option of Holders"), (c)
reduce the rate of or change the time for payment of interest on any Note, (d)
waive a Default or Event of Default in the payment of principal of or interest,
premium (if any) or Liquidated Damages (if any) on the Notes (except a
rescission of acceleration of the Notes by the holders of at least a majority in
aggregate principal amount of the Notes and a waiver of the payment default that
resulted from such acceleration), (e) make any Note payable in money other than
that stated in the Notes, (f) make any change in the provisions of the Indenture
relating to waivers of past Defaults or the rights of holders of Notes to
receive payments of principal of or interest, premium (if any) or Liquidated
Damages (if any) on the Notes, (g) waive a redemption payment with respect to
any Note (including a payment as described under the caption "--Repurchase of
the Option of Holders"), (h) make any change in the foregoing amendment and
waiver provisions, (i) modify the ranking or priority of the Notes or the
Subsidiary Guarantees in any manner adverse to the Holders or (j) except as
provided in the Indenture, release any Guarantor from its obligations under its
Subsidiary Guarantee, or change any Subsidiary Guarantee in any manner that
would adversely affect the Holders.
Notwithstanding the foregoing, without the consent of any holder of
Notes, the Company and the Trustee may amend or supplement the Indenture or the
Notes to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to holders of Notes in
the case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the holders of Notes or that does not adversely
affect the legal rights under the Indenture of any such holder, or to comply
with requirements of the Commission in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
Concerning the Trustee
The Indenture contains certain limitations on the rights of the
Trustee, should it become a creditor of the Company, to obtain payment of claims
in certain cases, or to realize on certain property received in respect of any
such claim as security or otherwise. The Trustee will be permitted to engage in
other transactions; however, if it acquires any conflicting interest it must
eliminate such conflict within 90 days and apply to the Commission for
permission to continue or resign.
The holders of a majority in principal amount of the then outstanding
Notes will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that in case an Event of Default
shall occur (which shall not be cured), the Trustee will be required, in the
exercise of its power to use the degree of care of a prudent man in the conduct
of his own affairs. Subject to such provisions, the Trustee will be under no
obligation to exercise any of its rights or powers under the Indenture at the
request of any holder of Notes, unless such holder shall have offered to the
Trustee security and indemnity satisfactory to it against any loss, liability or
expense.
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Additional Information
Anyone who receives this Prospectus may obtain a copy of the form of
Indenture and Registration Rights Agreement without charge by writing to
Wheeling-Pittsburgh Corporation, attention: Treasurer.
Certain Definitions
Set forth below are certain defined terms used in the Indenture.
Reference is made to the Indenture for a full disclosure of all such terms, as
well as any other capitalized terms used herein for which no definition is
provided.
"Acquired Indebtedness" means, with respect to any specified person,
(i) Indebtedness of any other person existing at the time such other person is
merged with or into or became a Restricted Subsidiary of such specified person,
including, without limitation, Indebtedness incurred in connection with, or in
contemplation of, such other person merging with or into or becoming a
Restricted Subsidiary of such specified person, and (ii) Indebtedness secured by
a Lien encumbering an asset acquired by such specified person at the time such
asset is acquired by such specified person.
"Affiliate" of any specified Person means any other Person which,
directly or indirectly, controls, is controlled by or is under direct or
indirect common control with, such specified Person. For the purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
provided that beneficial ownership of 10% or more of the voting securities of a
person shall be deemed to be control, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Asset Sale" means the sale, lease, conveyance, disposition or other
transfer (a "disposition") of any properties, assets or rights (including,
without limitation, a sale and leaseback transaction or the issuance, sale or
transfer by the Company of Equity Interests of a Restricted Subsidiary) whether
in a single transaction or a series of related transactions; provided, however,
that the following transactions will be deemed not to be Asset Sales: (a) sales
of inventory in the ordinary course of business; (b) a disposition of assets by
the Company to a Wholly Owned Restricted Subsidiary or by a Wholly Owned
Restricted Subsidiary of the Company to the Company or to another Wholly Owned
Restricted Subsidiary of the Company; (c) a disposition of Equity Interests by a
Wholly Owned Restricted Subsidiary of the Company to the Company or to another
Wholly Owned Restricted Subsidiary of the Company; (d) a Permitted Investment or
Restricted Payment that is permitted by the Indenture; (e) the issuance by the
Company of Equity Interests; (f) the disposition of properties, assets or rights
in any fiscal year the aggregate Net Proceeds of which are less than $1 million;
and (g) the sale of accounts receivable pursuant to the Receivables Facility.
"Attributable Indebtedness" in respect of a sale and leaseback
transaction means, at the time of determination, the present value (discounted
at the rate of interest implicit in such transaction, determined in accordance
with GAAP) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended).
"Capital Expenditure Indebtedness" means Indebtedness incurred by any
Person to finance the purchase or construction of any property or assets
acquired or constructed by such Person which have a useful life of more than one
year so long as (a) the purchase or construction price for such property or
assets is included in "addition to property, plant or equipment" in accordance
with GAAP, (b) the acquisition or construction of such property or assets is not
part of any acquisition of a Person or line of business and (c) such
Indebtedness is incurred within 90 days of the acquisition or completion of
construction of such property or assets.
"Capital Lease Obligation" means, at the time any determination thereof
is to be made, the amount of the liability in respect of a capital lease that
would at such time be required to be capitalized on a balance sheet in
accordance with GAAP.
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"Capital Stock" means (a) in the case of a corporation, corporate
stock, (b) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or limited) and (d) any
other interest or participation that confers on a person the right to receive a
share of the profits and losses of, or distributions of assets of, the issuing
person.
"Cash Equivalents" means (a) United States dollars, (b) securities
issued or directly and fully guaranteed or insured by the United States
government or any agency or instrumentality thereof having maturities of not
more than six months from the date of acquisition, (c) certificates of deposit
and eurodollar time deposits with maturities of six months or less from the date
of acquisition, bankers' acceptances with maturities not exceeding six months
and overnight bank deposits, in each case with any domestic commercial bank
having capital and surplus in excess of $500 million, (d) repurchase obligations
with a term of not more than thirty days for underlying securities of the types
described in clauses (b) and (c) above entered into with any financial
institution meeting the qualifications specified in clause (c) above, (d)
commercial paper having the highest rating obtainable from Moody's Investors
Service, Inc. or Standard & Poor's Rating Service and in each case maturing
within six months after the date of acquisition and (e) money market mutual
funds substantially all of the assets of which are invested primarily of the
type described in the foregoing clauses (a) through (d).
"Consolidated Cash Flow" means, with respect to any person for any
period, the Consolidated Net Income of such person for such period plus, without
duplication (a) provision for taxes based on income or profits of such person
and its Restricted Subsidiaries, to the extent that such provision for taxes was
included in computing Consolidated Net Income, plus (b) Consolidated Interest
Expense of such person and its Restricted Subsidiaries for such period, whether
paid or accrued and whether or not capitalized (including, without limitation,
amortization of debt issuance costs and original issue discount, non-cash
interest payments, the interest component of any deferred payment obligations,
the interest component of all payments associated with Capital Lease
Obligations, commissions discounts and other fees and charges incurred in
respect of letter of credit or bankers' acceptance financings, and net payments
(if any) pursuant to Hedging Obligations), to the extent that any such expense
was deducted in computing Consolidated Net Income, plus (c) depreciation and
amortization (including amortization of goodwill and other intangibles but
excluding amortization of prepaid cash expenses that were paid, outside of the
ordinary course of business, in a prior period) and other non-cash charges of
such person and its Restricted Subsidiaries for such period, to the extent that
such depreciation, amortization and other non-cash charges were deducted in
computing Consolidated Net Income, minus (d) non-cash items increasing
consolidated revenues in determining Consolidated Net Income for such period to
the extent not already reflected as an expense in computing Consolidated Net
Income, minus (e) all cash payments during such period relating to non-cash
charges and other non-cash items that were or would have been added back in
determining Consolidated Cash Flow for any prior period, in each case, on a
consolidated basis and determined in accordance with GAAP.
"Consolidated Interest Coverage Ratio" means with respect to any person
for any period, the ratio of the Consolidated Cash Flow of such person for such
period to the Consolidated Interest Expense of such person for such period;
provided, however, that the Consolidated Interest Coverage Ratio shall be
calculated giving pro forma effect to each of the following transactions as if
each such transaction had occurred at the beginning of the applicable
four-quarter reference period: (a) any incurrence, assumption, guarantee or
redemption by the Company or any of its Restricted Subsidiaries of any
Indebtedness (including revolving credit borrowings based on the average daily
balance outstanding during the relevant period) subsequent to the commencement
of the period for which the Consolidated Interest Coverage Ratio is being
calculated but prior to the date on which the event for which the calculation of
the Consolidated Interest Coverage Ratio is made (the "Calculation Date"); (b)
any acquisition that has been made by the Company or any of its Restricted
Subsidiaries, or approved and expected to be consummated within 30 days of the
Calculation Date, including, in each case, through a merger or consolidation,
and including any related financing transactions, during the four-quarter
reference period or subsequent to such reference period and on or prior to the
Calculation Date (in which case Consolidated Cash Flow for such reference period
shall be calculated to include the Consolidated Cash Flow of the acquired
entities and without giving effect to clause (c) of the proviso set forth in the
definition of Consolidated Net Income); and (c) any other transaction that may
be given pro forma effect in accordance with Article 11 of Regulation S-X as in
effect from time to time; and provided, further, that (i) the Consolidated Cash
Flow attributable to discontinued operations, as determined in accordance with
GAAP, and operations or businesses disposed of prior to the Calculation Date,
shall be excluded and (ii) the
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Consolidated Interest Expense attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded, but only to the extent that
the obligations giving rise to such Consolidated Interest Expense will not be
obligations of the referent person or any of its Restricted Subsidiaries
following the Calculation Date.
"Consolidated Interest Expense" means, with respect to any person for
any period, the sum, without duplication, of (a) the consolidated interest
expense of such person and its Restricted Subsidiaries for such period, whether
paid or accrued (including, without limitation, amortization of debt issuance
costs and original issue discount, non-cash interest payments, the interest
component of any deferred payment obligations, the interest component of all
payments associated with Capital Lease Obligations, commissions, discounts and
other fees and charges incurred in respect of letter of credit or bankers'
acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), (b) any interest expense on Indebtedness of another person that is
guaranteed by such person or one of its Restricted Subsidiaries or secured by a
Lien on assets of such person or one of its Restricted Subsidiaries (whether or
not such guarantee of Lien is called upon), (c) the consolidated interest
expense of such person and its Restricted Subsidiaries that was capitalized
during such period and (d) the product of (i) all cash dividend payments on any
series of preferred stock of such person, times (ii) a fraction, the numerator
of which is one and the denominator of which is one minus the then current
combined federal, state and local statutory tax rates of such person, expressed
as a decimal, in each case, on a consolidated basis and in accordance with GAAP.
"Consolidated Net Income" means, with respect to any person for any
period, the aggregate of the Net Income of such person and its Restricted
Subsidiaries for such period, on a consolidated basis, determined in accordance
with GAAP; provided that (a) the Net Income (but not loss) of any person that is
not a Restricted Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends or
distributions paid in cash to the referent person or a Wholly Owned Restricted
Subsidiary thereof, (b) the Net Income of any Restricted Subsidiary shall be
excluded to the extent that the declaration or payment of dividends or similar
distributions by that Restricted Subsidiary of that Net Income is not at the
date of determination permitted without any prior governmental approval (that
has not been obtained) or, directly or indirectly, by operation of the terms of
its charter or any agreement, instrument, judgment, decree, order, statute, rule
or governmental regulation applicable to that Restricted Subsidiary or its
stockholders, (c) the Net Income of any person acquired in a pooling of
interests transaction for any period prior to the date of such acquisition shall
be excluded and (d) the cumulative effect of a change in accounting principles
shall be excluded.
"Consolidated Net Worth" means, with respect to any person as of any
date, the sum of (a) the consolidated equity of the common stockholders of such
person and its consolidated Restricted Subsidiaries as of such date plus (b) the
respective amounts reported on such person's balance sheet as of such date with
respect to any series of preferred stock (other than Disqualified Stock) that by
its terms is not entitled to the payment of dividends unless such dividends may
be declared and paid only out of net earnings in respect of the year of such
declaration and payment, but only to the extent of any cash received by such
person upon issuance of such preferred stock, less (i) all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within 12 months after the acquisition
of such business) subsequent to the date of the Indenture in the book value of
any asset owned by such person or a consolidated Restricted Subsidiary of such
person, (ii) all investments as of such date in unconsolidated Restricted
Subsidiaries and in persons that are not Subsidiaries and (iii) all unamortized
debt discount and expense and unamortized deferred charges as of such date, in
each case determined in accordance with GAAP; provided, however, that any
changes after the date of the Indenture in the liabilities of such person and
its Restricted Subsidiaries in respect of other post-retirement employee
benefits or pension benefits that would be reflected on a consolidated balance
sheet of such person and its Restricted Subsidiaries in accordance with GAAP
shall be excluded.
"Default" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"Disqualified Stock" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures (excluding any
maturity as a result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, on or
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prior to the date that is 91 days after the date on which the Notes mature or
are redeemed or retired in full; provided, that any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof (or of any
security into which it is convertible or for which it is exchangeable) have the
right to require the issuer to repurchase such Capital Stock (or such security
into which it is convertible or for which it is exchangeable) upon the
occurrence of an Asset Sale or a Change of Control shall not constitute
Disqualified Stock if such Capital Stock (and all such securities into which it
is convertible or for which it is exchangeable) provides that the issuer thereof
will not repurchase or redeem any such Capital Stock (or any such security into
which it is convertible or for which it is exchangeable) pursuant to such
provisions prior to compliance by the Company with the provisions of the
Indenture described under the caption "--Repurchase at the Option of
Holders--Change of Control" or "--Asset Sales," as the case may be.
"Equity Interests" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"Existing Indebtedness" means Indebtedness of the Company and its
Restricted Subsidiaries in existence on the date of the Indenture, including,
without limitation, the Obligations of the Company and its Restricted
Subsidiaries under (i) the Close Corporation and Shareholders Agreement of Ohio
Coatings Company as existing on the date of the Indenture and the guarantee by
the Company or any Restricted Subsidiary of up to $20 million of Indebtedness of
Ohio Coatings Company under the Credit Agreement between Ohio Coatings Company
and National City Bank, Northeast, or (ii) the Keepwell Agreement, dated
December 28, 1995, between the Company, WPSC, WHX and the lenders party thereto
as existing on the date of the Indenture to the extent permitted by the WHX
Agreements, until such amounts are repaid.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect from time to time.
"guarantee" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"Hedging Obligations" means, with respect to any person, the
obligations of such person under interest rate swap agreements, interest rate
cap agreements, interest rate collar agreements and other agreements or
arrangements designed to protect such person against fluctuations in interest
rates.
"Indebtedness" means, with respect to any person, any indebtedness of
such person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, debentures or similar instruments or letters of
credit (or reimbursement agreements in respect thereof) or banker's acceptances
or representing Capital Lease Obligations or the balance deferred and unpaid of
the purchase price of any property or representing any Hedging Obligations,
except any such balance that constitutes an accrued expense or trade payable, if
and to the extent any of the foregoing indebtedness (other than letters of
credit and Hedging Obligations) would appear as a liability upon a balance sheet
of such person prepared in accordance with GAAP, as well as Indebtedness of
others secured by a Lien on any asset of such person (whether or not such
Indebtedness is assumed by such person) and, to the extent not otherwise
included, the guarantee by such person of any Indebtedness of any other person.
The amount of any Indebtedness outstanding as of any data shall be (a) the
accreted value thereof, in the case of any Indebtedness that does not require
current payments of interest and (b) the principal amount thereof, in the case
of any other Indebtedness.
"Investments" means, with respect to any person, all investments by
such person in other persons (including Affiliates) in the forms of direct or
indirect loans (including guarantees by the referent person of, and Liens on any
assets of the referent person securing, Indebtedness or other obligations of
other persons), advances or capital contributions (excluding commission, travel
and similar advances to officers and employees made in the ordinary course of
business), purchases or other acquisitions for consideration of Indebtedness,
Equity Interests or other securities, together with all items that are or would
be classified as investments on a balance sheet prepared in
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accordance with GAAP. If the Company or any Restricted Subsidiary of the Company
sells or otherwise disposes of any Equity Interests of any direct or indirect
Restricted Subsidiary of the Company such that, after giving effect to any such
sale or disposition, such person is no longer a Restricted Subsidiary of the
Company, the Company shall be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Equity
Interests of such Restricted Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of the covenant described above
under the caption "--Certain Covenants--Restricted Payments."
"Letter of Credit Facility" means the Letter of Credit Agreement, dated
as of August 22, 1994, among WPSC and Citibank, N.A., as the same may be
amended, supplemented or otherwise modified including any refinancing,
refunding, replacement or extension thereof and whether by the same or any other
lender or group of lenders, provided, that the aggregate amount of letters of
credit available may not exceed $50,000,000.
"Letter of Undertaking" means that certain letter of undertaking dated
July 21, 1997 from WHX to The Sanwa Bank, Limited, as existing on the date of
the Indenture.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement, any lease in
the nature thereof, any option or other agreement to sell or give a security
interest in and any filing of or agreement to give any financing statement under
the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).
"Net Cash Proceeds" means, with respect to any issuance or sale of
common stock of the Company, means the cash proceeds of such issuance or sale
net of attorneys' fees, accountants' fees, underwriters' fees, broker's
commissions and consultant and any other fees actually incurred in connection
with such issuance or sale.
"Net Income" means, with respect to any person, the net income (loss)
of such person, determined in accordance with GAAP and before any reduction in
respect of preferred stock dividends, excluding, however, (a) any gain (but not
loss), together with any related provision for taxes on such gain (but not
loss), realized in connection with (i) any Asset Sale (including, without
limitation, dispositions pursuant to sale and leaseback transactions) or (ii)
the disposition of any securities by such person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such person or any of
its Restricted Subsidiaries and (b) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by the
Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
(without duplication) (a) the direct costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees,
sales commissions, recording fees, title transfer fees, title insurance
premiums, appraiser fees and costs incurred in connection with preparing such
asset for sale) and any relocation expenses incurred as a result thereof, (b)
taxes paid or estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements), (c) amounts required to be applied to the repayment of
Indebtedness (other than Permitted Working Capital Indebtedness) secured by a
Lien on the asset or assets that were the subject of such Asset Sale, (d) any
reserve established in accordance with GAAP or any amount placed in escrow, in
either case for adjustment in respect of the sale price of such asset or assets,
until such time as such reserve is reversed or such escrow arrangement is
terminated, in which case Net Proceeds shall include only the amount of the
reserve so reversed or the amount returned to the Company or its Restricted
Subsidiaries from such escrow arrangement, as the case may be.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the
Company nor any of its Restricted Subsidiaries (a) provides credit support of
any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or otherwise) or (c) constitutes the lender, and (ii) with respect to which no
default (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other
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Indebtedness of the Company or any of its Restricted Subsidiaries to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity.
"Note Pro Rata Share" means with respect to Excess Proceeds, the amount
equal to the product of (a) Excess Proceeds and (b) the fraction determined by
dividing (i) the aggregate principal amount of Notes then outstanding by (ii)
the sum of the aggregate principal amount of Notes then outstanding and the
aggregate amount of borrowings under the Term Loan Agreement then outstanding.
"Obligations" means any principal, interest, penalties, fees,
indemnification, reimbursements, damages and other liabilities payable under the
documentation governing any Indebtedness.
"Permitted Investments" means (a) any Investment in the Company or in a
Wholly Owned Restricted Subsidiary of the Company, (b) any Investment in Cash
Equivalents, (c) any Investment by the Company or any Restricted Subsidiary of
the Company in a person that is engaged in the same line of business as the
Company and its Restricted Subsidiaries were engaged in on the date of the
Indenture or a line of business or manufacturing or fabricating operation
reasonably related thereto (including any downstream steel manufacturing or
processing operation or manufacturing or fabricating operation in the
construction products business) if as a result of such Investment (i) such
person becomes a Wholly Owned Restricted Subsidiary of the Company and a
Guarantor or (ii) such person is merged, consolidated or amalgamated with or
into, or transfers of conveys substantially all of its assets to, or is
liquidated into, the Company or a Wholly Owned Restricted Subsidiary of the
Company, (d) any Investment made as a result of the receipt of non-cash
consideration from (i) an Asset Sale that was made pursuant to and in compliance
with the covenant described above under the caption "--Repurchase at the Option
of Holders-- Asset Sales" or (ii) a disposition of assets that does not
constitute an Asset Sale, (e) any Investment acquired solely in exchange for
Equity Interests (other than Disqualified Stock) of the Company, (f) Investments
existing as of the date of the Indenture and (g) other Investments in any person
that is engaged in the same line of business as the Company and its Restricted
Subsidiaries were engaged in on the date of the Indenture or a line of business
or manufacturing or fabricating operation reasonably related thereto (including
any downstream steel manufacturing or processing operation or manufacturing or
fabricating operation in the construction products business) which Investment
has a fair market value (as determined by a resolution of the Board of Directors
of the Company and set forth in an officer's certificate delivered to the
Trustee), when taken together with all other investments made pursuant to this
clause (g) that are at the time outstanding, not to exceed $10.0 million.
"Permitted Liens" means (a) Liens existing as of the date of the
Indenture; (b) Liens in favor of the Company and its Subsidiaries; (c) Liens on
property of a person existing at the time such person is merged into or
consolidated with the Company or any Subsidiary of the Company, provided that
such Liens were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the person
merged into or consolidated with the Company or any of its Subsidiaries; (d)
Liens on property existing at the time of acquisition thereof by the Company or
any Subsidiary of the Company, provided that such Liens were in existence prior
to the contemplation of such acquisition; (e) pledges or deposits under
workmen's compensation laws, unemployment insurance laws or similar legislation,
or good faith deposits in connection with bids, tenders, contracts (other than
for the payment of Indebtedness) or leases to which such person is a party, or
deposits to secure public statutory obligations of such person or deposits of
cash or United States Government bonds to secure surety or appeal bonds to which
such person is a party, or deposits as security for contested taxes or import
duties or for the payment of rent in each case incurred in the ordinary course
of business (f) Liens for taxes, assessments or governmental charges or claims
that are not yet delinquent or that are being contested in good faith by
appropriate proceedings promptly instituted and diligently pursued, provided
that any reserve or other appropriate provision as shall be required in
conformity with GAAP shall have been made therefor; (g) Liens incurred in the
ordinary course of business of the Company or any Restricted Subsidiary of the
Company with respect to obligations that do not exceed $10.0 million at any one
time outstanding and that (1) are not incurred in connection with the borrowing
of money or the obtaining of advances or credit (other than trade credit in the
ordinary course of business) and (2) do not in the aggregate materially detract
from the value of the property or materially impair the use thereof in the
operation of business by the Company or such Restricted Subsidiary; (h) Liens
securing Permitted Refinancing Indebtedness, provided that the Company was
permitted to incur such Liens with respect to the Indebtedness so refinanced;
and (i) minor encroachments, encumbrances, easements or reservations of, or
rights of others for, rights-of-way, sewers, electric lines, telegraph and
telephone lines and other similar purposes, or zoning or other
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restrictions as to the use of real properties all of which do not materially
impair the value or utility for its intended purposes of the real property to
which they relate or Liens incidental to the conduct of the business of such
Person or to the ownership of its properties.
"Permitted Refinancing Indebtedness" means any Indebtedness of the
Company or any of its Restricted Subsidiaries issued in exchange for, or the net
proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness (other than Indebtedness under the Revolving Credit
Agreement) of the Company or any of its Restricted Subsidiaries; provided that
(a) the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount of (or accreted
value, if applicable), plus premium, if any, and accrued interest on, the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded
(plus the amount of reasonable expenses incurred in connection therewith), (b)
such Permitted Refinancing Indebtedness has a final maturity date no earlier
than the final maturity date of, and has a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded, (c) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Notes, such
Permitted Refinancing Indebtedness is subordinated in right of payment to the
Notes on terms at least as favorable, taken as a whole, to the holders of Notes
as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded and such
Indebtedness shall not have any scheduled principal payment prior to the 91st
day after the final maturity date of the Notes and (d) such Indebtedness is
incurred either by the Company or by the Restricted Subsidiary who is the
obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; provided, however, that a Restricted Subsidiary may
guarantee Permitted Refinancing Indebtedness incurred by the Company, whether or
not such Restricted Subsidiary was an obligor or guarantor of the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; and
provided, further, that if such Permitted Refinancing Indebtedness is
subordinated to the Notes, such guarantee shall be subordinated to such
Restricted Subsidiary's Subsidiary Guarantee to at least the same extent.
"Permitted Working Capital Indebtedness" means Indebtedness of the
Company and its Restricted Subsidiaries under the Revolving Credit Facility and
under any other agreement, instrument, facility or arrangement that is intended
to provide working capital financing or financing for general corporate purposes
(including any asset securitization facility involving the sale of accounts
receivable); provided that the aggregate outstanding amount of such Indebtedness
of the Company and its Restricted Subsidiaries, at the time of incurrence, shall
not exceed greater of (a) the sum of (i) 50% of the net aggregate book value of
all inventory of the Company and its Restricted Subsidiaries at such time and
(ii) 80% of the net aggregate book value of all accounts receivable (net of bad
debt expense) of the Company and its Restricted Subsidiaries at such time and
(b) $175 million.
"Public Equity Offering" means an underwritten offering of common stock
of the Company meeting the registration requirements of the Securities Act.
"Receivables Facility" means the program for the issuance and placement
from time to time of trade receivable backed adjustable rate securities, all as
contemplated by that certain Pooling and Servicing Agreement, dated as of August
1, 1994, between Wheeling-Pittsburgh Funding, Inc., WPSC, Bank One, Columbus,
N.A. and Wheeling-Pittsburgh Trade Receivable Master Trust and that certain
Receivables Purchase Agreement, dated as of August 1, 1994, between WPSC and
Wheeling-Pittsburgh Funding, Inc., as each may be amended, supplemented or
otherwise modified including any refunding, replacement or extension thereof.
"Replacement Assets" means (x) properties and assets (other than cash
or any Capital Stock or other security) that will be used in a business of the
Company and its Subsidiaries conducted on the date of the Indenture or in a line
of business or manufacturing or fabricating operation reasonably related thereto
(including any downstream steel processing or manufacturing operation or
manufacturing or fabricating operation in the construction products business) or
(y) Capital Stock of any person that will become on the date of the acquisition
thereof a Wholly Owned Restricted Subsidiary of the Company as a result of such
acquisition.
"Restricted Investment" means an Investment other than a Permitted
Investment.
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"Restricted Subsidiary" of a person means any Subsidiary of such person
that is not an Unrestricted Subsidiary.
"Revolving Credit Facility" means the Second Amended and Restated
Credit Agreement, dated as of December 28, 1995, among WPSC, the lenders party
thereto and Citibank, N.A. as agent, as the same may be amended, supplemented or
otherwise modified including any refinancing, refunding, replacement or
extension thereof and whether by the same or any other lender or groups of
lenders.
"Significant Subsidiary" means any Restricted Subsidiary that would be
a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the date hereof.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which such payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and shall not include any contingent obligations to
repay, redeem or repurchase any such interest or principal prior to the date
originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any person, (a) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of Capital Stock entitled (without regard to the occurrence of
any contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by such
person or one or more of the other Subsidiaries of that person (or a combination
thereof) and (b) any partnership (i) the sole general partner or the managing
general partner of which is such person or a Subsidiary of such person or (ii)
the only general partners of which are such person or of one or more
Subsidiaries of such person (or any combination thereof).
"Tax Sharing Agreement" means the Tax Sharing Agreement between the
Company and WHX as in effect on the date of the Indenture.
"Term Loan Agreement" means the Term Loan Agreement dated as of the
date of the Indenture, between the Company, DLJ Capital Funding, Inc., as
syndication agent, Donaldson, Lufkin & Jenrette Securities Corporation, as
arranger, Citicorp USA, Inc., as documentation agent, a financial institution to
be determined as administrative agent and the lenders party thereto.
"Unimast" means Unimast, Inc., an Ohio corporation.
"Unrestricted Subsidiary" means any Subsidiary that is designated by
the Board of Directors of the Company as an Unrestricted Subsidiary pursuant to
a resolution of the Board of Directors of the Company, but only to the extent
that such Subsidiary (a) has no Indebtedness other than Non-Recourse Debt, (b)
is not party to any agreement, contract, arrangement or understanding with the
Company or any Restricted Subsidiary of the Company unless such agreement,
contract, arrangement or understanding does not violate the terms of the
Indenture described under the caption "--Certain Covenants--Transactions with
Affiliates," (c) is a person with respect to which neither the Company nor any
of its Restricted Subsidiaries has any direct or indirect obligation (i) to
subscribe for additional Equity Interests or (ii) to maintain or preserve such
person's financial condition or to cause such person to achieve any specified
levels of operating results, in each case, except to the extent otherwise
permitted by the Indenture. Any such designation by the Board of Directors of
the Company shall be evidenced to the Trustee by filing with the Trustee a
certified copy of the resolution giving effect to such designation and an
officers' certificate certifying that such designation complied with the
foregoing conditions and was permitted by the covenant described above under the
caption "--Certain Covenants--Restricted Payments." If, at any time, any
Unrestricted Subsidiary would fail to meet the foregoing requirements as an
Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary
shall be deemed to be incurred by a Restricted Subsidiary of the Company as of
such date (and, if such Indebtedness is not permitted to be incurred as of such
date under the covenant described under the caption "--Incurrence of
Indebtedness and Issuance of Preferred Stock," the Company shall be in default
of such covenant). The Board of Directors of the Company may at any time
designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided,
however, that such designation shall be deemed to be an incurrence of
Indebtedness by a Restricted Subsidiary of the Company of any
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outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if (A) such Indebtedness is permitted under the covenant
described under the caption "--Incurrence of Indebtedness and Issuance of
Preferred Stock," calculated on a pro forma basis as if such designation had
occurred at the beginning of the four-quarter reference period, and (B) no
Default or Event of Default would be in existence following such designation.
"U.S. Government Obligations" means direct, fixed-rate obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged, which are not callable and which mature (or may be put to the issuer
by the holder at no less than par) no later than the maturity date of the Notes.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Indebtedness.
"Wheeling-Nisshin" means Wheeling-Nisshin, Inc., a Delaware
corporation.
"Wholly Owned Restricted Subsidiary" of any person means a Restricted
Subsidiary of such person all of the outstanding Capital Stock or other
ownership interests of which (other than directors' qualifying shares) shall at
the time be owned by such person or by one or more Wholly Owned Restricted
Subsidiaries of such person.
"WHX" means WHX Corporation, a Delaware corporation.
"WHX Agreements" mean (i) the Intercreditor, Indemnification and
Subordination Agreement by and among the Company, WHX, WPSC and Unimast and (ii)
the Tax Sharing Agreement, in each case as in effect on the date of this
Indenture.
Book-Entry; Delivery and Form
The certificates representing the Notes are issued in fully registered
form without interest coupons. Notes sold in offshore transactions in reliance
on Regulation S under the Securities Act will initially be represented by one or
more temporary global Notes in definitive, fully registered form without
interest coupons (each a "Temporary Regulation S Global Note") and will be
deposited with the Trustee as custodian for, and registered in the name of a
nominee of, DTC for the accounts of Euroclear and Cedel Bank. The Temporary
Regulation S Global Note will be exchangeable for one or more permanent global
Notes (each a "Permanent Regulation S Global Note"; and together with the
Temporary Regulation S Global Notes, the "Regulation S Global Note") on or after
the 40th day following the Closing Date upon certification that the beneficial
interests in such global Note are owned by non-U.S. persons. Prior to the 40th
day after the Closing Date, beneficial interests in the Temporary Regulation S
Global Note may be held only through Euroclear or Cedel Bank and any resale or
other transfer of such interests to U.S. persons shall not be permitted during
such period unless such resale or transfer is made pursuant to Rule 144A or
Regulation S and in accordance with the requirements described below.
Notes sold in reliance on Rule 144A will be represented by one or more
permanent global Notes in definitive, fully registered form without interest
coupons (each a "Restricted Global Note"; and together with the Regulation S
Global Note, the "Global Notes") and will be deposited with the Trustee as
custodian for, and registered in the name of a nominee of, DTC.
Each Global Note (and any Notes issued for exchange therefor) will be
subject to certain restrictions on transfer set forth therein as described under
"Transfer Restrictions."
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Notes originally purchased by or transferred to Institutional
Accredited Investors who are not qualified institutional buyers ("Non-Global
Purchasers") will be issued Notes in registered form without interest coupons
("Certificated Notes"). Upon the transfer of Certificated Notes initially issued
to a Non-Global Purchaser to a qualified institutional buyer or in accordance
with Regulation S, such Certificated Notes will, unless the relevant Global Note
has previously been exchanged in whole for Certificated Notes, be exchanged for
an interest in a Global Note. For a description of the restrictions on the
transfer of Certificated Notes, see "Transfer Restrictions."
The Global Notes. Ownership of beneficial interests in a Global Note
will be limited to persons who have accounts with DTC ("participants") or
persons who hold interests through participants. Ownership of beneficial
interests in a Global Note will be shown on, and the transfer of that ownership
will be effected only through, records maintained by DTC or its nominee (with
respect to interests of participants) and the records of participants (with
respect to interests of persons other than participants). Qualified
institutional buyers may hold their interests in a Restricted Global Note
directly through DTC if they are participants in such system, or indirectly
through organizations which are participants in such system.
Investors may hold their interests in a Regulation S Global Note
directly through Cedel Bank or Euroclear, if they are participants in such
systems, or indirectly through organizations that are participants in such
system. Cedel Bank and Euroclear will hold interests in the Regulation S Global
Notes on behalf of their participants through DTC.
So long as DTC, or its nominee, is the registered owner or holder of a
Global Note, DTC or such nominee, as the case may be, will be considered the
sole owner or holder of the Notes represented by such Global Note for all
purposes under the Indenture and the Notes. No beneficial owner of an interest
in a Global Note will be able to transfer that interest except in accordance
with the applicable procedures of DTC, in addition to those provided for under
the Indenture and, if applicable, those of Euroclear and Cedel Bank.
Payments of the principal of, and interest on, a Global Note will be
made to DTC or its nominee, as the case may be, as the registered owner thereof.
Neither the Issuer, the Trustee nor any Paying Agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a Global Note or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Issuer expects that DTC or its nominee, upon receipt of any payment
of principal or interest in respect of a Global Note, will credit participants'
accounts with payments in amounts proportionate to their respective beneficial
interests in the principal amount of such Global Note as shown on the records of
DTC or its nominee. The Issuer also expects that payments by participants to
owners of beneficial interests in such Global Note held through such
participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers registered
in the names of nominees for such customers. Such payments will be the
responsibility of such participants.
Transfers between participants in DTC will be effected in the ordinary
way in accordance with DTC rules and will be settled in same-day funds.
Transfers between participants in Euroclear and Cedel Bank will be effected in
the ordinary way in accordance with their respective rules and operating
procedures.
The Issuer expects that DTC will take any action permitted to be taken
by a holder of Notes (including the presentation of Notes for exchange as
described below) only at the direction of one or more participants to whose
account the DTC interests in a Global Note is credited and only in respect of
such portion of the aggregate principal amount of Notes as to which such
participant or participants has or have given such direction. However, if there
is an Event of Default under the Notes, DTC will exchange the applicable Global
Note for Certificated Notes, which it will distribute to its participants and
which may be legended as set forth under the heading "Transfer Restrictions."
The Issuer understands that: DTC is a limited purpose trust company
organized under the laws of the State of New York, a "banking organization"
within the meaning of New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the Uniform Commercial
Code and a "Clearing
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Agency" registered pursuant to the provisions of Section 17A under the Exchange
Act. DTC was created to hold securities for its participants and facilitate the
clearance and settlement of securities transactions between participants through
electronic book-entry changes in accounts of its participants, thereby
eliminating the need for physical movement of certificates and certain other
organizations. Indirect access to the DTC system is available to others such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a participant, either directly or indirectly
("indirect participants").
Although DTC, Euroclear and Cedel Bank are expected to follow the
foregoing procedures in order to facilitate transfers of interests in a Global
Note among participants of DTC, Euroclear and Cedel Bank, they are under no
obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time. Neither the Issuer nor the Trustee
will have any responsibility for the performance by DTC, Euroclear or Cedel Bank
or their respective participants or indirect participants of their respective
obligations under the rules and procedures governing their operations.
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CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
While all material tax consequences of the Notes are discussed below,
persons considering the purchase of Notes should consult their own tax advisors
concerning the application of United States federal income tax laws, as well as
the laws of any state, local, or other taxing jurisdiction applicable to their
particular situations.
Non- U.S. Holders
In the opinion of Olshan Grundman Frome & Rosenzweig LLP, the United
States tax counsel to the Company, subject to the limitations set forth herein,
the following is an accurate summary of the material United States federal
income tax consequences of the purchase, ownership and disposition of the Notes.
The discussion below is based upon the provisions of the Internal Revenue Code
of 1986, as amended (the "Code"), and regulations, rulings and judicial
decisions thereunder as of the date hereunder, and such authorities may be
repealed, revoked or modified so as to result in U.S. federal income tax
consequences different from those discussed below. The following discussion is
limited to the U.S. federal income tax consequences relevant to a holder of a
Note that is not (i) a citizen or resident of the United States, (ii) a
corporation organized under the laws of the United States or any political
subdivision thereof or therein, (iii) an estate, the income of which is subject
to U.S. federal income tax regardless of the source, or (iv) a trust if a court
within the United States is able to exercise primary supervision of the
administration of the trust and one or more U.S. persons have the authority to
control all substantial decisions of the trust (a "Non-U.S. Holder").
The discussion does not consider all aspects of U.S. federal income and
estate taxation that may be relevant to the purchase, ownership or disposition
of the Notes by a particular Non-U.S. Holder in light of such Holder's personal
circumstances, including holding the Notes through a partnership. For example,
persons who are partners in foreign partnerships and beneficiaries of foreign
trusts or estates who are subject to U.S. federal income tax because of their
own status, such as United States residents or foreign persons engaged in a
trade or business in the United States, may be subject to U.S. federal income
tax even though the entity is not subject to income tax on the disposition of
its Note.
For purposes of the following discussion, interest and gain on the
sale, exchange or other disposition of a Note will be considered "U.S. trade or
business income" if such income or gain is (i) effectively connected with the
conduct of a U.S. trade or business or (ii) in the case of a treaty resident,
attributable to a U.S. permanent establishment (or to a fixed base) in the
United States.
Stated Interest. Generally, any interest paid to a Non-U.S. Holder of a
Note that is not U.S. trade or business income will not be subject to United
States tax if the interest qualified as "portfolio interest." Generally,
interest on the Notes will qualify as portfolio interest if (i) the Non-U.S.
Holder does not actually or constructively own 10% or more of the total voting
power of all voting stock of the Company and is not a "controlled foreign
corporation" with respect to which the Company is a "related person" within the
meaning of the Code, (ii) the beneficial owner, under penalty of perjury,
certifies that the beneficial owner is not a United States person and such
certificate provides the beneficial owner's name and address on Form W-8 or, at
the option of the withholding agent, on a substitute form substantially similar
to Form W-8, and (iii) the Non-U.S. Holder is not a bank receiving interest on
an extension of credit made pursuant to a loan agreement entered into in the
ordinary course of its trade or business. A holder must notify the Company in
writing on a timely basis of any change affecting the validity of the Form W-8.
The gross amount of payments to a Non-U.S. Holder of interest that do
not qualify for the portfolio interest exception and that are not U.S. trade or
business income will be subject to U.S. federal income tax at the rate of 30%,
unless a U.S. income tax treaty applies to reduce or eliminate withholding. U.S.
trade or business income will be taxed on a net basis at regular U.S. rates
rather than the 30% gross rate. To claim the benefit of a tax treaty or to claim
exemption from withholding because the income is U.S. trade or business income,
the Non-U.S. Holder must provide a properly executed Internal Revenue Service
Form 1001 or 4224 (or such successor forms as the United States Internal Revenue
Service designates), as applicable, prior to the payment of interest. These
forms must
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be periodically updated. Recently adopted Treasury Regulations which are not yet
in effect (the "Final Regulations") would alter the foregoing rules in certain
respects. In general, the Final Regulations are effective January 1, 1999. Under
the Final Regulations, a Non-U.S. Holder that is seeking an exemption from
withholding tax on account of a treaty or on account of the Notes being held in
connection with a U.S. trade or business generally would be required to provide
Internal Revenue Service Form W-8. If the Notes are not actively traded, the
Non-U.S. Holder also would be required to provide a taxpayer identification
number, and may be required to provide other documentary evidence of foreign
status. The Final Regulations also contain rules concerning payments through
intermediaries. Non-U.S. Holders should consult their tax advisors concerning
the application of the Final Regulations in light of their own circumstances.
Sale, Exchange or Redemption of Notes. Except as described below and
subject to the discussion concerning backup withholding, any gain realized by a
Non-U.S. Holder on the sale, exchange or redemption of a Note generally will not
be subject to U.S. federal income tax, unless (i) such gain is U.S. trade or
business income, (ii) subject to certain exceptions, the Non-U.S. Holder is an
individual who holds the Note as a capital asset and is present in the United
States for 183 days or more in the taxable year of the disposition, or (iii) the
Non-U.S. Holder is subject to tax pursuant to the provisions of U.S. tax law
applicable to certain U.S. expatriates.
Federal Estate Tax. Notes held (or treated as held) by an individual
who is a Non-U.S. Holder at the time of his or her death will not be subject to
U.S. federal estate tax, provided that the individual does not actually or
constructively own 10% or more of the total voting power of all voting stock of
the Company and income on the Notes was not U.S. trade or business income.
Information Reporting and Backup Withholding. The Company must report
annually to the United States Internal Revenue Service and to each Non-U.S.
Holder any interest that is subject to withholding or that is exempt from U.S.
withholding tax pursuant to a tax treaty or the portfolio interest exception.
Copies of these information returns may also be made available under the
provisions of a specific treaty or agreement to the tax authorities of the
country in which the Non-U.S. Holder resides.
Under certain circumstances, the United States Internal Revenue Service
requires information reporting and backup withholding of United States federal
income tax at a rate of 31% with respect to payments to certain non-corporate
Non-U.S. Holders (including individuals). Information reporting and backup
withholding will apply unless such non-corporate Non-U.S. Holders certify to the
withholding agent that the beneficial owner of the Note is not a U.S. Holder.
This certification requirement will generally be satisfied by the certification
provided to avoid the 30% withholding tax (described above).
The payment of the proceeds of a disposition of a Note by a Non-U.S.
Holder to or through the United States office of a broker or through a
non-United States branch of a United States broker generally will be subject to
information reporting and backup withholding at a rate equal to 31% of the gross
proceeds unless the Non-U.S. Holder certifies on Internal Revenue Service Form
W-8 that the beneficial owner of the Note is not a U.S. Holder or otherwise
establishes an exemption. The payment of the proceeds of a disposition of a Note
by a Non-U.S. Holder to or through a non-United States office of a non-United
States broker will not be subject to backup withholding or information reporting
unless the non-United States broker has certain United States relationships or
connections.
In the case of the payment of proceeds from the disposition of Notes to
or through a non-U.S. office of a broker that is either a U.S. person or a U.S.
related person, the regulations require information reporting on the payment
unless the broker has documentary evidence in its files that the owner is a
Non-U.S. Holder and the broker has no knowledge to the contrary. Backup
withholding will not apply to payments made through foreign offices of a broker
that is a U.S. person or a U.S. related person (absent actual knowledge that the
payee is a U.S. person).
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Any amount withheld under the backup withholding rules from a payment
to a Non-U.S. Holder will be allowed as a refund or a credit against such
Non-U.S. Holder's U.S. federal income tax liability, provided that the requisite
procedures are followed.
U.S. Holders
Subject to the discussion below, stated interest payable on to the
Notes will be taxable to a U.S. Holder as ordinary income when received or
accrued in accordance with such holder's regular method of tax accounting.
Market Discount. If a U.S. Holder purchases a Note for an amount that
is less than its stated principal amount, the amount of such difference will be
treated as "market discount" for U.S. federal income tax purposes, unless such
difference is less than a specified de minimis amount. Under the market discount
rules, a U.S. Holder will be required to treat any principal payment on, or any
gain on the sale, exchange, retirement or other disposition of, a Note as
ordinary income to the extent of the market discount which has not previously
been included in income and is treated as having accrued on such Note at the
time of such payment or disposition. If a U.S. Holder makes a gift of a Note,
accrued market discount, if any, will be recognized as if such U.S. Holder had
sold such Note for a price equal to its fair market value. In addition, the U.S.
Holder may be required to defer, until the maturity of the Note or, in certain
circumstances, the earlier disposition of the Note in a taxable transaction, the
deduction of a portion of the interest expense on any indebtedness incurred or
continued to purchase or carry such Note.
Any market discount will be considered to accrue on a straight-line
basis during the period from the date of acquisition to the maturity date of the
Note, unless the U.S. Holder elects to accrue market discount on a constant
interest method. A U.S. Holder of a Note may elect to include market discount in
income currently as it accrues (on either a straight-line basis or constant
interest method), in which case the rules described above regarding the deferral
of interest deductions will not apply. This election to include market discount
in income currently, once made, is irrevocable and applies to all market
discount obligations acquired on or after the first day of the first taxable
year to which the election applies and may not be revoked without the consent of
the Service.
Amortizable Bond Premium. A U.S. Holder that purchases a Note for an
amount in excess of the sum of all amounts payable on the Note after the
purchase date other than stated interest will be considered to have purchased
the Note at a "premium." A U.S. Holder may generally elect to amortize the
premium over the remaining term of the Note on a constant yield method. The
amount amortized in any year will be treated as a reduction of the U.S. Holder's
interest income from the Note. A U.S. Holder who elects to amortize bond premium
must reduce its tax basis in the related obligation by the amount of premium
amortized during its holding period. Bond premium on a Note held by a U.S.
Holder that does not make such an election will decrease the gain or increase
the loss otherwise recognized on disposition of the Note. The election to
amortize premium on a constant yield method once made applies to all debt
obligations held or subsequently acquired by the electing U.S. Holder on or
after the first day of the first taxable year to which the election applies and
may not be revoked without the consent of the IRS.
Treasury regulations recently have been issued that require a U.S.
Holder that purchases a Note on or after March 2, 1998, or any subsequent
taxable year, at a premium, and elects to amortize such premium, must amortize
such premium under a constant yield method. However, a U.S. Holder may elect to
apply the new rules to all Notes held on or after the first day of the taxable
year containing March 2, 1998.
Sale or Other Disposition. In general, a U.S. Holder of Notes will
recognize gain or loss upon the sale, exchange, redemption, or other taxable
disposition of such Notes measured by the difference between (a) the amount of
cash and the fair market value of property received (except to the extent
attributable to accrued interest on the Notes previously taken into account) and
(b) the U.S. Holder's tax basis in the Notes, and market discount previously
included in income by the U.S. Holder and decreased by amortizable bond premium,
if any, deducted over the term of the Notes. Subject to the market discount
rules discussed above, any such gain or loss will generally be (x) long-term
capital gain or loss, provided the Notes have been held for more than 18 months,
(y) mid-term capital gain or loss, provided the Notes have been held for more
than 12 months but not more than 18 months and (z) short-term capital gain or
loss, provided the Notes have been held for not more than 12 months. The excess
of net long-term capital gains over net short-term capital losses is taxed at a
lower rate than ordinary
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income for certain non-corporate taxpayer. The distinction between capital gain
or loss and ordinary income or loss is also relevant for purposes of, among
other things, limitations on the deductibility of capital losses.
In general, an exchange of outstanding bonds such as the Old Notes for
newly issued bonds such as the New Notes is treated as tax free to exchanging
creditors and the debtor. In this case, a U.S. Holder's basis in the New Notes
is generally the same as his basis in the Old Notes and the U.S. Holder's
holding period in the New Notes includes the period for which the Old Notes had
been held. Although no gain or loss would be recognized to an exchanging U.S.
Holder under these circumstances, if the exchange of the Old Notes for the New
Notes were deemed to constitute an exchange of a debt instrument for a modified
debt instrument that differed materially in kind or in extent, and the issue
price of the New Notes (which would be their publicly-traded fair market value
on the date on which a substantial amount of the New Notes is issued) was less
than that of the Old Notes, original issue discount could arise to a U.S.
Holder.
Backup Withholding. "Backup" withholding and information reporting
requirements may apply to certain payments of principal and interest on a Note
and to certain payments of proceeds of the sale or retirement of a Note. The
Company, any agent thereof, a broker, the Trustee or any paying agent, as the
case may be, will be required to withhold tax from any payment that is subject
to backup withholding at a rate of 31% of such payment if the U.S. Holder fails
to furnish his taxpayer identification number (social security number or
employer identification number), to certify that such U.S. Holder is not subject
to backup withholding, or to otherwise comply with the applicable requirements
of the backup withholding rules. Certain U.S. Holders (including, among others,
all corporations) are not subject to the backup withholding and reporting
requirements.
-92-
<PAGE>
PLAN OF DISTRIBUTION
Except as described below, (i) a broker-dealer may not participate in
the Exchange Offer in connection with a distribution of the New Notes, (ii) such
broker-dealer would be deemed an underwriter in connection with such
distribution and (iii) such broker-dealer would be required to comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any secondary resale transactions. A broker-dealer may, however,
receive New Notes for its own account pursuant to the Exchange Offer in exchange
for Old Notes when such Old Notes were acquired as a result of market-making
activities or other trading activities. Each such broker-dealer must acknowledge
that it will deliver a prospectus in connection with any resale of such New
Notes. This Prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer (other than an "affiliate" of the Company) in
connection with resales of such New Notes. The Company has agreed that for a
period of 180 days after the Expiration Date, it will make this Prospectus, as
amended or supplemented, available to any such broker-dealer for use in
connection with any such resale.
The Company will not receive any proceeds from any sale of New Notes by
broker-dealers. New Notes received by broker-dealers for their own account
pursuant to the Exchange Offer may be sold from time to time in one or more
transactions in the over-the-counter market, in negotiated transactions, through
the writing of options on the New Notes or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or negotiated prices. Any such resale may be made
directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such New Notes. Any broker-dealer
that resells New Notes that were received by it for its own account pursuant to
the Exchange Offer may be deemed to be an "underwriter" within the meaning of
the Securities Act and any profit on any such resale of New Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
For a period of 180 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in a Letter of Transmittal. The Company has agreed to pay all expenses incident
to the Exchange Offer other than commissions or concessions of any brokers or
dealers and transfer taxes and will indemnify the Holders of the Old Notes
(including any broker-dealers) against certain liabilities, including
liabilities under the Securities Act.
The Initial Purchasers have indicated to the Company that they intend
to effect offers and sales of the New Notes in market-making transactions at
negotiated prices related to prevailing market prices at the time of sale, but
is not obligated to do so and such market-making activities may be discontinued
at any time. The Initial Purchasers may act as principal or agent in such
transactions. There can be no assurance that an active market for the New Notes
will develop.
LEGAL MATTERS
Certain legal matters in connection with the Notes offered hereby will
be passed upon for the Company by Olshan Grundman Frome & Rosenzweig LLP, New
York, New York. Marvin L. Olshan, a member of Olshan Grundman Frome & Rosenzweig
LLP, is a director and Secretary of the Company.
EXPERTS
The consolidated financial statements of Wheeling-Pittsburgh
Corporation and its subsidiaries as of December 31, 1997 and 1996 and for each
of the three years in the period ended December 31, 1997, included in this
Prospectus have been so included in reliance on the report of Price Waterhouse
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.
-93-
<PAGE>
The financial statements of Wheeling-Nisshin as of December 31, 1997
and 1996 , and for each of the three years ended December 31, 1997 included in
this Prospectus have been audited by Coopers & Lybrand LLP, independent
accountants, as stated in their report appearing herein.
-94-
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of Price Waterhouse LLP, Independent Accountants.........................................................F-2
Consolidated Statements of Operations of WPC for the years ended December 31,
1997, 1996 and 1995....................................................................................... F-3
Consolidated Balance Sheets of WPC as of December 31, 1997 and 1996 ............................................F-4
Consolidated Statements of Cash Flows of WPC for the years ended December 31,
1997, 1996 and 1995....................................................................................... F-5
Notes to Consolidated Financial Statements of WPC...............................................................F-6
Report of Coopers & Lybrand LLP, Independent Accountants......................................................F-25
Financial Statements of Wheeling-Nisshin, Inc..................................................................F-26
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and
Stockholders of Wheeling-Pittsburgh Corporation
(a wholly-owned subsidiary of WHX Corporation)
In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations and of cash flows present fairly,
in all material respects, the financial position of Wheeling-Pittsburgh
Corporation and its subsidiaries (the "Company") at December 31, 1997 and 1996 ,
and the results of their operations and their cash flows for each of the three
years in the period ended December 31, 1997, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the Company's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and the significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Pittsburgh, Pennsylvania
February 10, 1998
F-2
<PAGE>
WHEELING-PITTSBURGH CORPORATION
(a wholly-owned subsidiary of WHX Corporation)
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------------------
1995 1996 1997
(Dollars in thousands)
----------------------------------------------------
Revenues:
<S> <C> <C> <C>
Net sales..................................................... $ 1,267,869 $ 1,110,684 $ 489,662
Cost and expenses:
Cost of products sold, excluding
depreciation and profit sharing............................. 1,059,622 988,161 585,609
Depreciation.................................................. 65,760 66,125 46,203
Profit sharing................................................ 6,718 -- --
Selling, administrative and general expense................... 55,023 54,903 52,222
Special charge................................................ -- -- 92,701
----------------- ----------------- -----------------
1,187,123 1,109,189 776,735
----------------- ----------------- -----------------
Operating income (loss)....................................... 80,746 1,495 (287,073)
Interest expense on debt...................................... 22,431 23,763 27,204
Other income (loss)........................................... 3,234 9,476 (221)
----------------- ----------------- -----------------
Income (loss) before taxes
and extraordinary item...................................... 61,549 (12,792) (314,498)
Tax provision (benefit)....................................... 3,030 (7,509) (110,035)
----------------- ----------------- -----------------
Income (loss) before
extraordinary item......................................... 58,519 (5,283) (204,463)
Extraordinary charge--net of tax.............................. (3,043) -- (25,990)
----------------- ----------------- -----------------
Net income (loss) ............................................ $ 55,476 $ (5,283) $ (230,453)
================- ================= =================
</TABLE>
See Notes to Consolidated Financial Statements
F-3
<PAGE>
WHEELING-PITTSBURGH CORPORATION
(a wholly-owned subsidiary of WHX Corporation)
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
December 31,
------------
1996 1997
(Dollars in thousands)
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents..................................................... $ 35,950 $ 0
Trade receivables, less allowances for doubtful
accounts of $1,149 and $1,108............................................... 24,789 44,569
Inventories................................................................... 193,329 255,857
Prepaid expenses and deferred charges......................................... 13,366 24,938
----------------- -----------------
Total current assets.................................................... 267,434 325,364
Investment in associated companies.............................................. 65,297 68,742
Property, plant and equipment, at cost less
accumulated depreciation and amortization..................................... 710,999 694,108
Deferred income taxes........................................................... 100,157 196,966
Intangible asset-pension........................................................ -- 76,714
Due from affiliates............................................................. 58,522 27,955
Deferred charges and other assets............................................... 43,483 34,719
----------------- -----------------
$ 1,245,892 $ 1,424,568
================= =================
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
<S> <C> <C>
Trade payables................................................................ $ 51,500 $ 116,559
Short term borrowings......................................................... -- 89,800
Payroll and employee benefits................................................. 57,094 56,212
Federal, state and local taxes................................................ 9,083 11,875
Deferred income taxes--current................................................ 30,649 32,196
Interest and other............................................................ 8,067 9,354
Long-term debt due in one year................................................ 2,019 199
----------------- -----------------
Total current liabilities............................................... 158,412 316,195
Long-term debt................................................................. 267,395 349,904
Other employee benefit liabilities.............................................. 435,502 427,125
Pension liability............................................................... -- 166,652
Other liabilities............................................................... 46,096 49,980
----------------- -----------------
907,405 1,309,856
================= =================
STOCKHOLDER'S EQUITY:
Common Stock $.01 par value; 100 shares issued and outstanding................. -- --
Additional paid-in capital...................................................... 265,387 272,065
Accumulated earnings (deficit)................................................. 73,100 (157,353)
----------------- -----------------
338,487 114,712
----------------- -----------------
$ 1,245,892 $ 1,424,568
================= =================
</TABLE>
See Notes to Consolidated Financial Statements
F-4
<PAGE>
WHEELING-PITTSBURGH CORPORATION
(a wholly-owned subsidiary of WHX Corporation)
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------------------
1995 1996 1997
(Dollars in thousands)
Cash flows from operating activities:
<S> <C> <C> <C>
Net income (loss)............................................. $ 55,476 $ (5,283 ) $ (230,453)
Items not affecting cash from operating activities:
Depreciation and amortization............................... 65,760 66,125 46,203
Other postretirement benefits............................... 5,522 3,505 2,322
Coal retirees' medical benefits (net of tax)................ 3,043 -- 1,700
Premium on early debt retirement (net of tax)............... -- -- 24,290
Income taxes................................................ (5,530) (6,572) (94,029)
Special charges (net of current portion).................... -- -- 69,137
Pension expense............................................. -- -- 9,327
Equity (income) loss in affiliated companies................ (4,845) (9,495) 1,206
Decrease (increase) in working capital elements:
Trade receivables........................................... 33,365 50,061 (43,780)
Trade receivables sold...................................... 22,000 (22,000) 24,000
Inventories................................................. (5,412) 73,247 (62,528)
Trade payables.............................................. (10,736) (48,721) 65,059
Other current assets........................................ (6,311) 4,033 (11,572)
Other current liabilities................................... (10,060) (13,973) 4,744
Other items--net.............................................. 4,297 1,355 18,868
----------------- ----------------- -----------------
Net cash flow provided by (used in) operating activities...... 146,569 92,282 (175,506)
----------------- ----------------- -----------------
Cash flows from investing activities:
Plant additions and improvements............................ (81,554) (31,188) (33,755)
Investments in affiliates................................... (7,353) (17,240) (7,150)
Proceeds from sales of assets............................... -- 1,425 1,217
Dividends from affiliated companies......................... 2,500 2,500 2,500
----------------- ----------------- -----------------
Net cash used in investing activities......................... (86,407) (44,503) (37,188)
----------------- ----------------- -----------------
Cash flows from financing activities:
Long-term debt proceeds (net of issuance cost)............. -- -- 340,270
Long-term debt retirement................................... (4,085) (15,153) (268,277)
Premium on early debt retirement............................ -- -- (32,600)
Short term debt borrowings.................................. -- -- 89,800
Letter of credit collateralization.......................... 1,094 384 16,984
Receivables from affiliates................................. (27,123) (39,886) 30,567
----------------- ----------------- -----------------
Net cash provided by (used in) financing activities........... (30,114) (54,655) 176,744
----------------- ----------------- -----------------
Increase (decrease) in cash and cash equivalents.............. 30,048 (6,876) (35,950)
Cash and cash equivalents at beginning of year................ 12,778 42,826 35,950
----------------- ----------------- -----------------
Cash and cash equivalents at end of year...................... $ 42,826 $ 35,950 $ --
================- ================= ==================
</TABLE>
See Notes to Consolidated Financial Statements
F-5
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Accounting Policies
The accounting policies presented below have been followed in preparing
the accompanying consolidated financial statements.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Principles of Consolidation
The consolidated financial statements include the accounts of all
subsidiary companies. All significant intercompany accounts and transactions are
eliminated in consolidation. The Company uses the equity method of accounting
for investments in unconsolidated companies owned 20% or more.
Earnings Per Share
Presentation of earnings per share is not meaningful since the Company
is a wholly owned subsidiary of WHX Corporation. See Note A--Corporate
Reorganization.
Business Segment
The Company is primarily engaged in one line of business and has one
industry segment, which is the making, processing and fabricating of steel and
steel products. The Company's products include hot rolled and cold rolled sheet,
and coated products such as galvanized, prepainted and tin mill sheet. The
Company also manufactures a variety of fabricated steel products including roll
formed corrugated roofing, roof deck, form deck, floor deck, culvert, bridge
form and other products used primarily by the construction, highway and
agricultural markets.
Through an extensive mix of products, the Company markets to a wide
range of manufacturers, converters and processors. The Company's 10 largest
customers (including Wheeling-Nisshin) accounted for approximately 35.4% of its
net sales in 1995 , 34.9% in 1996 and 30.2% in 1997. Wheeling-Nisshin was the
only customer to account for more than 10% of net sales in 1995 and 1996. No
single customer accounted for more than 10% of net sales in 1997.
Wheeling-Nisshin accounted for 15.2% and 12.7% of net sales in 1995 and 1996,
respectively. Geographically, the majority of the Company's customers are
located within a 350-mile radius of the Ohio Valley.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and on deposit and
highly liquid debt instruments with original maturities of three months or less.
Inventories
Inventories are stated at cost which is lower than market. Cost is
determined by the last-in first-out ("LIFO") method for substantially all
inventories.
F-6
<PAGE>
Property, Plant and Equipment
Depreciation is computed on the straight line and the modified units of
production methods for financial statement purposes and accelerated methods for
income tax purposes. The modified units of production method adjusts the
straight line method based on an activity factor for operating assets. Adjusted
annual depreciation is not less than 60% nor more than 110% of straight line
depreciation. Accumulated depreciation after adjustment is not less than 75% nor
more than 110% of straight line depreciation. Interest cost is capitalized for
qualifying assets during the assets' acquisition period. Capitalized interest
cost is amortized over the life of the related asset.
Maintenance and repairs are charged to income. Renewals and betterments
made through replacements are capitalized. Profit or loss on property
dispositions is credited or charged to income.
Pensions, Other Postretirement and Postemployment Plans
The Company has a tax qualified defined benefit pension plan covering
USWA - represented hourly employees and a tax qualified defined contribution
pension plan covering substantially all salaried employees. The defined benefit
plan provides for a defined monthly benefit based on years of service. The
defined contribution plan provides for contributions based on a percentage of
compensation for salaried employees . Costs for the defined contribution plan
are being funded currently. Unfunded accumulated benefit obligations under the
defined benefit plan are subject to annual minimum cash funding requirements
under the Employees Retirement Income Security Act ("ERISA").
The Company sponsors medical and life insurance programs for
substantially all employees. Similar group medical programs extend to pensioners
and dependents. The management plan provides basic medical and major medical
benefits on a non-contributory basis through age 65.
Income Taxes
The Company accounts for income taxes in accordance with Statement of
Financial Accounting Standards No. 109 ("SFAS 109"), Accounting for Income
Taxes. Recognition is given in the accounts for the income tax effect of
temporary differences in reporting transactions for financial and tax purposes
using the deferred liability method. Tax provisions and the related tax payments
or refunds have been reflected in the Company's financial statements in
accordance with a tax sharing agreement between WHX and the Company.
Environmental Matters
The Company accrues for losses associated with environmental
remediation obligations when such losses are probable and reasonably estimable.
Accruals for estimated losses from environmental remediation obligations
generally are recognized no later than completion of the remedial feasibility
study.
Such accruals are adjusted as further information develops or
circumstances change. Costs of future expenditures for environmental remediation
obligations are not discounted to their present value. Recoveries of
environmental remediation costs from other parties are recorded as assets when
their receipt is deemed probable.
F-7
<PAGE>
NOTE A--Corporate Reorganization
Formation of WHX Corporation
On July 26, 1994 the Company and its subsidiaries were reorganized and
a new holding company, WHX Corporation ("WHX"), was formed. Upon effectiveness
of the merger each share of Wheeling-Pittsburgh Corporation ("WPC"), WPC Series
A Preferred Stock and each WPC Warrant were converted into a share of WHX Common
Stock, WHX Series A Preferred Stock and a WHX Warrant, respectively. WHX also
assumed the obligation to purchase the Redeemable Common Stock of the ESOP and
guaranteed substantially all of the Company's outstanding indebtedness. See Note
H.
The merger was accounted for as a reorganization of entities under
common control whereby the basis of assets and liabilities were unchanged.
Pursuant to the merger agreement the Company contributed the capital stock of
the following subsidiaries to WHX: WP Land Company, Wheeling-Pittsburgh Radio
Corporation (and its subsidiaries) and Wheeling-Pittsburgh Capital Corporation.
Additionally, the Company contributed the cash and marketable securities and
certain real property and leasehold interests to WHX. WPC retained the capital
stock of the remaining steel-related subsidiaries and equity investments.
Prior to the Corporate Reorganization, the operations of the non-steel
subsidiaries, and the income and gains and losses from the cash, marketable
securities and real estate were included in the consolidated results of
operations of the Company. Following the Corporate Reorganization, such results
were included only in the consolidated results of WHX.
At December 31, 1996 and 1997, amounts due from affiliates totaled
$58.5 million and $28.0 million, respectively. These amounts reflect cash
advances between affiliates, dividends paid by WPC on behalf of WHX,
intercompany tax allocations and Unimast working capital advances.
NOTE B -- Collective Bargaining Agreement
The Company's prior labor agreement with the USWA expired on October 1,
1996. On August 1, 1997 the Company and the USWA announced that they had reached
a tentative agreement on the terms of a new collective bargaining agreement. The
tentative agreement was ratified on August 12, 1997 by USWA-represented
employees, ending a ten month strike. The new collective bargaining agreement
provides for a defined benefit pension plan, a retirement enhancement program,
short-term bonuses and special assistance payments for employees not immediately
recalled to work and $1.50 in hourly wage increases over its term of not less
than five years. It also provides for the reduction of 850 jobs, mandatory
multicrafting as well as modification of certain work practices.
NOTE C -- Special Charge - New Labor Agreement
The Company recorded a special charge of $92.7 million in 1997. The
special charge is primarily related to certain benefits included in its new
collective bargaining agreement.
The special charges include enhanced retirement benefits to be paid
under the defined benefit pension program which totaled $66.7 million and were
recorded under the provisions of Statement of Financial Accounting Standard
No.88, Employers' Accounting For Settlements and Curtailments of Defined Benefit
Pension Plans and for Termination Benefits, and various other charges which
totaled $26.0 million. These charges include $15.5 million for signing and
retention bonuses, $3.8 million for special assistance payments to laid-off
employees and other employee benefits and $6.7 million for the fair value of a
stock option grant to WPN Corp. for its performance in negotiating a new labor
agreement.
F-8
<PAGE>
NOTE D--Pensions, Other Postretirement and Postemployment Benefits
Pension Programs
The Company provides defined contribution pension programs for both
hourly and salaried employees, and prior to August 12, 1997 also provided a
defined contribution pension program for USWA-represented employees. Tax
qualified defined contribution plans provide in the case of hourly employees an
increasing company contribution per hour worked based on the age of its
employees. A similar tax qualified plan for salaried employees provides defined
company contributions based on a percentage of compensation.
On August 12, 1997 the Company established a defined benefit pension
plan for USWA - represented employees pursuant to a new labor agreement. The
plan includes individual participant accounts of USWA represented employees from
the hourly defined contribution plan and merges the assets of those accounts
into the defined benefit plan.
As of December 31, 1997, $127.0 million of fully vested funds are held
in trust for benefits earned under the hourly defined contribution pension plan.
Approximately 59% of the trust assets are invested in equities and 41% in fixed
income investments.
As of December 31, 1997, $35.0 million of fully vested funds are held
in trust for benefits earned under the salaried employees defined contribution
plan. Approximately 57% of the assets are invested in equities and 43% are in
fixed income investments . All plan assets are invested by professional
investment managers.
All pension provisions charged against income totaled $10.8 million,
$9.3 million and $12.6 million in 1995, 1996 and 1997, respectively. In 1997,
the Company also recorded a $66.7 million charge for enhanced retirement
benefits paid under the defined benefit pension plan, pursuant to a new labor
agreement.
Defined Benefit Plan
The plan was established pursuant to a collective bargaining agreement
ratified on August 12, 1997. Prior to that date, benefits were provided through
a defined contribution plan, the Wheeling-Pittsburgh Steel Corporation
Retirement Security Plan ("Retirement Security Plan").
The defined benefit pension plan covers employees represented by the
USWA. The plan also includes individual participant accounts from the Retirement
Security Plan. The assets of the Retirement Security Plan were merged into this
Bargaining Unit Pension Plan as of December 1, 1997.
Since the plan includes the account balances from the Retirement
Security Plan, the plan includes both defined benefit and defined contribution
features. The gross benefit, before offsets, is calculated based on years of
service and the current benefit multiplier under the plan. This gross amount is
then offset for benefits payable from the Retirement Security Plan and benefits
payable by the Pension Benefit Guaranty Corporation from previously terminated
plans. Individual employee accounts established under the Retirement Security
Plan are maintained until retirement. Upon retirement, the account balances are
converted into monthly benefits that serve as an offset to the gross benefit, as
described above. Aggregate account balances held in trust at December 31, 1997
total $121.3 million.
As part of the bargaining agreement, the Company offered a limited
program of Retirement Enhancements. The Retirement Enhancement program provides
for unreduced retirement benefits to the first 850 employees who retire after
October 1, 1996. In addition, each retiring participant can elect a lump sum
payment of $25,000 or a $400 monthly supplement payable until age 62. More than
850 employees applied for retirement under this program prior to December 31,
1997.
F-9
<PAGE>
The Retirement Enhancement program represented a Curtailment and
Special Termination Benefits under SFAS No. 88. The Company recorded a charge of
$66.7 million in 1997 to cover the retirement enhancement program.
The Company's funding policy is to contribute annually an amount that
satisfies the minimum funding standards of ERISA.
The following table sets forth the reconciliation of the projected
benefit obligation ("PBO") to the accrued obligation included in the Company's
consolidated balance sheet at December 31, 1997.
December 31,
1997
-------------------
(Dollars in thousands)
Vested benefit obligation $(127,457)
Non-vested benefit (44,974)
---------
Projected benefit obligation (172,431)
Plan assets at fair value 5,179
----------
Obligations in excess of plan assets (167,252)
Unrecognized prior service cost 76,714
---------
Accrued pension costs (90,538)
Additional minimum pension liability (76,714)
---------
Total pension liability $(167,252)
=========
Net Periodic Pension Cost:
Service cost $2,278
Interest cost 4,172
Return on assets --
Amortization of prior service cost 2,877
--------
Net periodic pension cost 9,327
Recognition of retirement enhancement program 66,676
Total pension cost $76,003
Assumptions and Methods
Discount Rate: 7%
Long Term Rate of Return on Plan Assets: 8%
Assets: Market Value
Participant Census: Projected from January 1, 1997
401-K Plan
Effective January 1, 1994 the Company began matching salaried employee
contributions to the 401(K) plan with shares of the Company's Common Stock. The
Company matches 50% of the employees contributions. The employer contribution is
limited to a maximum of 3% of an employee's salary. Matching contributions of
WHX Common Stock pursuant to the 401(k) plan are charged to WPC at market value
through the intercompany accounts. At December 31, 1995 , 1996 and 1997, the
401(K) plan held 115,151 shares, 190,111 shares and 275,537 shares of WHX Common
Stock, respectively.
F-10
<PAGE>
Postemployment Benefits
The Company provides benefits to former or inactive employees after
employment but before retirement. Those benefits include, among others,
disability, severance and workers' compensation. The assumed discount rate used
to measure the benefit liability was 7.5% at December 31, 1996 and 7.0% at
December 31, 1997.
Other Postretirement Benefits
The Company sponsors postretirement benefit plans that cover both
management and hourly retirees and dependents. The plans provide medical
benefits including hospital, physicians' services and major medical expense
benefits and a life insurance benefit. The hourly employees' plans provide
non-contributory basic medical and a supplement to Medicare benefits, and major
medical coverage to which the Company contributes 50% of the insurance premium
cost. The management plan has provided basic medical and major medical benefits
on a non-contributory basis through age 65.
The Company accounts for these benefits in accordance with SFAS No.
106. The cost of postretirement medical and life benefits for eligible employees
are accrued during the employee's service period through the date the employee
reaches full benefit eligibility. The Company defers and amortizes recognition
of changes to the unfunded obligation that arise from the effects of current
actuarial gains and losses and the effects of changes in assumptions. The
Company funds the plans as current benefit obligations are paid. Additionally,
in 1994 the Company began funding a qualified trust in accordance with its
collective bargaining agreement . The new collective bargaining agreement
provides for the use of those funds to pay current benefit obligations and
suspends additional funding until 2002. The following table sets forth the
reconciliation of the Accumulated Postretirement Benefit Obligation ("APBO") to
the accrued obligation included in the Company's consolidated balance sheet at
December 31, 1996 and 1997.
<TABLE>
<CAPTION>
December 31,
----------------------------------
1996 1997
(Dollars in thousands)
<S> <C> <C>
Active employees not eligible for retirement.................................... $ 85,030 $ 54,443
Active employees eligible to retire............................................. 68,300 51,841
Retirees and beneficiaries...................................................... 208,011 202,528
----------------- -----------------
Accumulated postretirement benefit obligation.................................. 361,341 308,812
Plan assets at fair market value................................................ 13,010 7,795
----------------- -----------------
Obligations in excess of plan assets............................................ 348,331 301,017
Unamortized reduction in prior service cost..................................... 1,806 40,486
Unamortized gain................................................................ 64,303 71,942
----------------- -----------------
Accrued postretirement benefit obligation....................................... $ 414,440 $ 413,445
================= =================
</TABLE>
At December 31, 1997 plan assets consisted primarily of short term
corporate notes.
F-11
<PAGE>
The following table sets forth the components of the recorded net
periodic postretirement benefit costs.
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------------------
1995 1996 1997
(Dollars in thousands)
Net periodic postretirement benefit cost:
<S> <C> <C> <C>
Service cost.................................................. $ 3,563 $ 3,953 $ 2,488
Interest cost................................................. 26,757 23,982 20,950
Other......................................................... (3,570) (3,888) (7,490)
----------------- ----------------- -----------------
Total........................................................ $ 26,750 $ 24,047 $ 15,948
================- ================= =================
Assumptions:
Discount rate................................................. 7.0% 7.0% 7.0%
Health care cost trend rate................................... 10.5% 9.5% 9.0%
Return on assets.............................................. 8.0 % 8.0% 8.0%
</TABLE>
For measurement purposes, medical costs are assumed to increase at
annual rates as stated above and declining gradually to 4.5% in 2004 and beyond.
The health care cost trend rate assumption has significant effect on the costs
and obligation reported. A 1% increase in the health care cost trend rate in
each year would result in approximate increases in the accumulated
postretirement benefit obligation of $25.1 million, and net periodic benefit
cost of $4.3 million.
Coal Industry Retiree Health Benefit Act
The Coal Industry Retiree Health Benefit Act of 1992 (the "Act")
created a new United Mine Workers of America postretirement medical and death
benefit plan to replace two existing plans which had developed significant
deficits. The Act assigns companies the remaining benefit obligations for former
employees and beneficiaries, and a pro rata allocation of benefits related to
unassigned beneficiaries ("orphans"). The Company's obligation under the Act
relates to its previous ownership of coal mining operations .
In 1995 the Social Security Administration (SSA) assigned additional
retirees and orphans to the Company. Based on the information obtained over the
past several years the Company believed the liability had been
reasonably determined and valued the liability at its net present value using a
7.5% discount rate. After discounting the liability to present value, the net
charge to income in 1995 totaled $3.0 million. At December 31, 1997 the
actuarially determined accrued liability discounted at 7% covering 532 assigned
retirees and dependents and 133 orphans, totaled $10.8 million. The Company
recorded an extraordinary charge of $1.7 million (net of tax) in 1997 related to
assignment of additional orphans.
NOTE E--Income Taxes
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------------------
1995 1996 1997
(Dollars in thousands)
Income Taxes Before Extraordinary Items
Current
<S> <C> <C> <C>
Federal tax provision....................................... $ 7,810 $ (1,317) $ 0
State tax provision......................................... 750 380 460
----------------- ----------------- -----------------
Total income taxes current.................................... 8,560 (937) 460
----------------- ----------------- -----------------
</TABLE>
F-12
<PAGE>
<TABLE>
<CAPTION>
Year ended December 31,
----------------------------------------------------
1995 1996 1997
(Dollars in thousands)
Deferred
<S> <C> <C> <C>
Federal tax provision (benefit)............................. (35,684) (6,572) (110,495)
Pre-reorganization tax benefits 30,154 -- --
recorded directly to equity............................... ----------------- ----------------- -----------------
Income tax provision (benefit)................................ $ 3,030 $ (7,509) $ (110,035)
================= ================= =================
Total Income Taxes
Current
Federal tax provision....................................... $ 7,810 $ (1,317) $ --
State tax provision......................................... 750 380 460
----------------- ----------------- -----------------
Total income taxes current.................................... 8,560 (937) 460
----------------- ----------------- -----------------
Deferred
Federal tax provision (benefit)............................. (37,322) (6,572) (124,490)
Pre-reorganization tax benefits 30,154 -- --
recorded directly to equity............................... ----------------- ----------------- -----------------
Income tax provision (benefit)................................ $ 1,392 $ (7,509) $ (124,030)
================- ================= =================
Components of Total Income Taxes
Operations.................................................... $ 3,030 $ (7,509) $ (110,035)
Extraordinary items........................................... (1,638) -- (13,995)
----------------- ----------------- -----------------
Income tax provision (benefit)................................ $ 1,392 $ (7,509) $ (124,030)
================= ================= =================
</TABLE>
Deferred income taxes result from temporary differences in the financial basis
and tax basis of assets and liabilities. Deferred taxes for WHX as common parent
and all subsidiaries at least 80% owned (the "Consolidated Group") are recorded
on the books of WPC. Deferred tax assets and/or liabilities attributable to WHX
are not material for the periods presented. The type of differences that give
rise to deferred income tax liabilities or assets are shown in the following
table:
<TABLE>
<CAPTION>
Deferred Income Tax Sources
December 31,
----------------------------------
1996 1997
(Dollars in millions)
Assets
<S> <C> <C>
Postretirement and postemployment employee benefits............................. $147.1 $147.7
Operating loss carryforward (expiring in 2005 to 2012)......................... 8.0 76.7
Minimum tax credit carryforwards (indefinite carryforward)...................... 49.5 49.5
Provision for expenses and losses............................................... 43.3 87.0
Leasing activities.............................................................. 25.2 23.8
State income taxes............................................................. 6.0 1.4
Miscellaneous other............................................................. 7.7 7.5
----------------- -----------------
Deferred tax assets........................................................ 286.8 393.6
----------------- -----------------
</TABLE>
F-13
<PAGE>
<TABLE>
<CAPTION>
Liabilities
<S> <C> <C>
Property plant and equipment.................................................... (157.1) (166.1)
Inventory....................................................................... (34.4) (34.9)
State income taxes.............................................................. (1.0)
(4.9)
Miscellaneous other............................................................. (.9) (6.8)
----------------- -----------------
Deferred tax liability..................................................... (197.3) (208.8)
Valuation allowance............................................................. (20.0) (20.0)
----------------- -----------------
Deferred income tax asset--net.................................................. $ 69.5 $ 164.8
================== =================
</TABLE>
As of December 31, 1997, for financial statement reporting purposes a
balance of approximately $29.0 million of prereorganization tax benefits exist.
These benefits will be reported as a direct addition to equity as they are
recognized. In 1995 tax benefits of $42.1 million were recognized as a direct
addition to equity of which $30.2 million was recognized by the Company and
$11.9 million was recognized by the common parent of the Consolidated Group.
This $11.9 million was charged to the common parent pursuant to the tax sharing
agreement and is part of the "Due From Affiliate". The decrease in the valuation
allowance in 1995 reflects the recognition of these tax benefits. No
prereorganization tax benefits were recognized in 1996 and 1997.
During 1994, the Company experienced an ownership change as defined by
Section 382 of the Internal Revenue Code. As the result of this event, the
Company will be limited in its ability to use net operating loss carryforwards
and certain other tax attributes to reduce subsequent tax liabilities. The
amount of taxable income that can be offset by pre-change tax attributes in any
annual period is limited to approximately $32 million per year.
A tax sharing agreement between the Company and WHX determines the tax
provision and related tax payments or refunds allocated to the Company in years
in which they are combined in a consolidated federal income tax return. The tax
sharing agreement stipulates that Wheeling-Pittsburgh Steel Corporation
("WPSC"), a wholly-owned subsidiary (and principal operating subsidiary) of
Wheeling-Pittsburgh Corporation ("WPC") shall be deemed to have succeeded to the
portion of the net operating loss and credit carryovers attributable to the
steel group on December 31, 1990.
Total federal and state income taxes paid in 1995 , 1996 and 1997 were
$18.0 million, $3.5 million and $0.7 million, respectively.
Federal tax returns have been examined by the Internal Revenue Service
("IRS") through 1987. The statute of limitations has expired for years through
1993; however, the IRS can review prior years to adjust any NOL's incurred in
such years and carried forward to offset income in subsequent open years.
Management believes it has adequately provided for all taxes on income.
The provision for income taxes differs from the amount of income tax
determined by applying the applicable U.S. statutory federal income tax rate to
pretax income as follows:
F-14
<PAGE>
<TABLE>
<CAPTION>
December 31,
----------------------------------------------------
1995 1996 1997
(Dollars in thousands)
<S> <C> <C> <C>
Income (loss) before taxes and extraordinary $ 61,549 $ (12,792) $ (314,498)
item........................................................ ================= ================= =================
Tax provision (benefit) at statutory rate..................... $ 21,542 $ (4,477) $ (110,074)
Increase (reduction) in tax due to:
Percentage depletion........................................ (973) (1,027) (1,092)
Equity earnings............................................. (1,288) (2,408) 338
State income tax net of federal effect...................... 1,624 260 299
Alternative minimum tax rate differential................... -- -- --
Reduction in valuation allowance net of
equity adjustment......................................... (16,300) -- --
(1,575) 143 494
Other miscellaneous......................................... ----------------- ----------------- -----------------
Tax provision (benefit)....................................... $ 3,030 $ (7,509) $ (110,035)
================ ================= ==================
</TABLE>
<TABLE>
<CAPTION>
Note F--Inventories
December 31,
----------------------------------
1996 1997
(Dollars in thousands)
<S> <C> <C>
Finished products............................................................... $ 44,621 $ 42,810
In-process...................................................................... 59,984 106,740
Raw materials................................................................... 80,147 103,735
Other materials and supplies.................................................... 19,476 19,811
----------------- -----------------
204,228 273,096
LIFO reserve................................................................... (10,899) (17,239)
----------------- -----------------
$ 193,329 $ 255,857
================= =================
</TABLE>
During 1996 and 1997, certain inventory quantities were reduced,
resulting in liquidations of LIFO inventories, the effect of which decreased
income by approximately $1.2 million in 1996, and increased income by
approximately $0.6 million in 1997.
NOTE G--Property, Plant and Equipment
<TABLE>
<CAPTION>
December 31,
----------------------------------
1996 1997
(Dollars in thousands)
<S> <C> <C>
Land and mineral properties..................................................... $ 7,121 $ 7,071
Buildings, machinery and equipment.............................................. 1,021,435 1,034,189
Construction in progress....................................................... 18,023 21,741
--------------- -----------------
1,046,579 1,063,001
Accumulated depreciation and amortization....................................... 335,580 368,893
----------------- -----------------
$ 710,999 $ 694,108
================= =================
</TABLE>
F-15
<PAGE>
The Company utilizes the modified units of production method of
depreciation which recognizes that the depreciation of steelmaking machinery is
related to the physical wear of the equipment as well as a time factor. The
modified units of production method provides for straight line depreciation
charges modified (adjusted) by the level of raw steel production. In 1996 and
1997 depreciation under the modified units of production method was $7.6 million
or 13.4% and $21.6 million or 40.0%, respectively, less than straight line
depreciation. The 1996 and 1997 reductions in depreciation primarily reflect the
ten-month strike which began October 1, 1996.
NOTE H--Long-Term Debt
<TABLE>
<CAPTION>
December 31,
----------------------------------
1996 1997
(Dollars in thousands)
<S> <C> <C>
Senior Unsecured Notes due 2007, 9 1/4%......................................... $ -- $ 273,966
Term Loan Agreement due 2006, floating rate..................................... -- 75,000
Senior Unsecured Notes due 2003, 93/8%:........................................ 266,155 --
IRS pension tax note due 1997, 8%............................................... 1,833 --
Other........................................................................... 1,426 1,137
----------------- -----------------
269,414 350,103
Less portion due within one year................................................ 2,019 199
----------------- -----------------
Total Long-Term Debt(1)................................................... $ 267,395 $ 349,904
================= =================
</TABLE>
(1) The fair value of long-term debt at December 31, 1996 and December 31,
1997 was $269.1 million and $350.1 million, respectively. Fair value of
long-term debt is estimated based on trading in the public market.
Long-term debt maturing in each of the next five years is as follows:
1998, $199; 1999, $219; 2000, $217 ; 2001, $233 and 2002, $259.
A summary of the financial agreements at December 31, 1997 follows:
Revolving Credit Facility:
On December 28, 1995, WPSC entered into a Second Amended and Restated
Revolving Credit Facility ("RCF") with Citibank, N.A. as agent. The RCF provides
for borrowings for general corporate purposes up to $150 million and a $35
million sub-limit for Letters of Credit.
The Credit Agreement expires May 3, 1999. Interest rates are based on
the Citibank prime rate plus 1.0% and/or a Eurodollar rate plus 2.25%, but, the
margin over the prime rate and the Eurodollar rate can fluctuate based upon
performance. A commitment fee of .5% is charged on the unused portion. The
letter of credit fee is 2.25% and is also performance based .
F-16
<PAGE>
Borrowings are secured primarily by 100% of the eligible inventory of
WPSC, Pittsburgh-Canfield Corporation ("PCC"), Wheeling Construction Products,
Inc. ("WCPI") and Unimast, and the terms of the RCF contain various restrictive
covenants, limiting among other things dividend payments or other distribution
of assets, as defined in the RCF. The Company and Unimast, Inc., are
wholly-owned subsidiaries of WHX. WPSC, PCC and WCPI are wholly-owned
subsidiaries of the Company. Certain financial covenants associated with
leverage, net worth, capital spending, cash flow and interest coverage must be
maintained. WPC, PCC, WCPI and Unimast have each guaranteed all of the
obligation's of WPSC under the Revolving Credit Facility. Borrowings outstanding
against the RCF at December 31, 1997 totaled $89.8 million. No letters of credit
were outstanding under the RCF.
In August 1994 WPSC entered into a separate facility for letters of
credit up to $50 million. At December 31, 1997 letters of credit totaling $9.3
million were outstanding under this facility. The letters of credit are
collateralized at 105% with U.S. Government securities owned by the Company, and
are subject to an administrative charge of .4% per annum on the amount of
outstanding letters of credit.
9 3/8% Senior Notes Due 2003:
On November 23, 1993 WPC issued $325.0 million of 9 3/8% Senior Notes.
Interest on the Senior Notes is payable semiannually on May 15 and November 15
of each year, commencing May 15, 1994. The Senior Notes mature on November 15,
2003. During 1994, the Company repurchased $54.3 million of its outstanding 9
3/8% Senior Notes at an average price of 94% of the related outstanding
principal amount.
During 1996, $4.2 million of the Senior Notes were retired via the
issuance by WHX Corporation shares of its common stock pursuant to the terms of
the Senior Notes Indenture agreement. The Company issued warrants to its common
shareholders in 1991. The warrants expired on January 3, 1996. Pursuant to the
Corporate Reorganization, WHX became the publicly-held issuer of the common and
preferred stock and the warrants. The warrants provided that holders could
tender lawful debt of the Company at face value to pay for exercise of warrants.
Certain investors bought the notes at a discount and used them to exercise
warrants.
The surrender of the notes and reduction of WPC debt was charged to WPC
through the intercompany account.
On November 26, 1997, the Company, under the terms of the 9 3/8%
Indenture, defeased the remaining $266.2 million 93/8% Senior Notes outstanding
at a total cost of $298.8 million. The 93/8% Senior Notes were placed into
trusteeship where they will be held until the November 15, 2000 redemption.
9 1/4% Senior Notes Due 2007:
On November 26, 1997 the Company issued $274 million of 9 1/4% Senior
Notes. Interest on the Senior Notes is payable semi-annually on May 15 and
November 15 of each year, commencing May 15, 1998. The Senior Notes mature on
November 15, 2007.
The 9 1/4% Senior Notes are redeemable at the option of the Company, in
whole or in part, on or after November 15, 2002 at specified redemption prices,
plus accrued interest and liquidated damages, if any, thereon to the date of
redemption.
Upon the occurrence of a Change of Control (as defined), the Company
will be required to make an offer to repurchase all or any part of each holder's
Notes at 101% of the principal amount thereof, plus accrued and unpaid interest
and Liquidated Damages, if any, thereon to the date of repurchase.
F-17
<PAGE>
The 9 1/4% Senior Notes are unsecured obligations of the Company,
ranking senior in right of payment to all existing and future subordinated
indebtedness of the Company, and pari passu with all existing and future senior
unsecured indebtedness of the Company, including borrowings under the Term Loan
Agreement.
The 9 1/4% Senior Notes are unconditionally and irrevocably guaranteed
on a senior basis by the guarantors, which consist of all of the Company's
present and future operating subsidiaries.
The 9 1/4% Senior Notes indenture contains certain covenants,
including, but not limited to, covenants with respect to : (i) limitations on
indebtedness; (ii) limitations on restricted payments; (iii) limitations on
transactions with affiliates; (iv) limitations on liens; (v) limitations on sale
of assets; (vi) limitations on issuance and sale of capital stock of
subsidiaries; (vii) limitations on dividends and other payment restrictions
affecting subsidiaries; and (viii) restrictions on consolidations, mergers and
sales of assets.
The Company has agreed to file a registration statement relating to an
exchange offer for the 9 1/4% Senior Notes under the Securities Act of 1993, as
amended. The Notes are eligible for trading in the Private Offerings, Resales
and Trading through Automated Linkages ("PORTAL") market.
Term Loan Agreement
On November 26, 1997 the Company entered into the Term Loan Agreement
with DLJ Capital Funding, Inc., as syndication agent pursuant to which the
Company borrowed $75 million.
Interest on the term loan is payable on March 15, June 15, September 15
and December 15 as to Base Rate Loans, and with respect to LIBOR loans on the
last day of each applicable interest period, and if such interest period shall
exceed three months, at intervals of three months after the first day of such
interest period. Amounts outstanding under the Term Loan Agreement bear interest
at the Base Rate (as defined therein) plus 2.25% or the LIBOR Rate (as defined
therein) plus 3.25%.
The Company's obligations under the Term Loan Agreement are guaranteed
by its present and future operating subsidiaries. The Company may prepay the
obligations under the Term Loan Agreement beginning on November 15, 1998,
subject to a premium of 2.0% of the principal amount thereof. Such premium
declines to 1.0% on November 15, 1999 with no premium on or after November 15,
2000.
Interest Cost
Aggregate interest costs on long-term debt and amounts capitalized
during the three years ended December 31, 1997, are as follows:
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
(Dollars in thousands)
<S> <C> <C> <C>
Aggregate interest expense on long-term debt............. $28,793 $26,263 $29,431
Less: Capitalized interest............................... 6,362 2,500 2,227
----------------- ----------------- -----------------
Interest expense......................................... $22,431 $23,763 $27,204
================= ================= =================
Interest Paid........................................... $27,873 $27,660 $29,515
================= ================= =================
</TABLE>
F-18
<PAGE>
NOTE I--Stockholder's Equity
Prior to the Corporate Reorganization discussed in Note A, the
authorized capital stock of WPC consisted of 60,000,000 shares of Common Stock,
$.01 par value and 10,000,000 shares of Preferred Stock, $0.10 par value.
Pursuant to a reorganization of the Company effective on July 26, 1994, WPC
became a wholly-owned subsidiary of WHX. WHX, a new holding company, became the
publicly held issuer for all of the outstanding Common and Preferred Stock and
outstanding warrants of WPC and assumed WPC's rights and obligations with
respect to WPC's option plans, all as described below.
Changes in capital accounts are as follows:
<TABLE>
<CAPTION>
Convertible
Common Stock Preferred Accumulated Capital in
Earnings Excess of Par
Shares Amount Shares Amount (Deficit) Value
------------ ------------ -------- ---------- ----------- --------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance January 1, 1995......... 100 $0 0 $0 $ 22,907 $223,287
Pre-reorg. tax benefits......... -- -- -- -- -- 42,100
Net income....................... -- -- -- -- 55,476 --
------------ ------------ -------- ---------- ------------- -------------
Balance December 31, 1995........ 100 0 0 0 78,383 265,387
Net income (loss)................ -- -- -- -- (5,283 ) --
------------ ------------ -------- ---------- ------------- -------------
Balance December 31, 1996........ 100 0 0 0 73,100 265,387
Net income (loss)................ -- -- -- -- (230,453) --
WPN stock option................. -- -- -- -- -- 6,678
------------ ------------ -------- ---------- ------------- -------------
Balance December 31, 1997........ 100 $ 0 0 $ 0 $ (157,353) $272,065
============ ============ ======== ========== ============= =============
</TABLE>
Pursuant to a corporate reorganization of the Company effective July
26, 1994, WHX assumed the rights and obligations of WPC under WPC's stock option
plans and WHX Common Stock is issuable in lieu of each share of WPC Common Stock
required by the plans.
On August 4, 1997 the compensation committee of the Board of Directors
of WHX granted an option to purchase 1,000,000 shares of WHX Common Stock to WPN
Corp, at the then market price per share, subject to stockholder approval, for
its performance in negotiating a five year labor agreement. The Board of
Directors approved such grant on September 25, 1997, and the stockholders
approved it on December 1, 1997 (measurement date).
The WPN options are exercisable with respect to one-third of the shares
of Common Stock issuable upon the exercise thereunder at any time on or after
the date of stockholder approval of the Option Grants. The options with respect
to an additional one-third of the shares of Common Stock may be exercised on the
first and second anniversaries of the Approval Date, respectively. The options,
to the extent not previously exercised, will expire on August 4, 2007.
The Company is required to record a charge for the fair value of the
1997 option grants under SFAS 123. The fair value of the option grant is
estimated on the measurement date using the Black--Scholes option-pricing
model. The following assumptions were used in the Black--Scholes calculation:
expected volatility of 48.3%, risk- free interest rate of 5.83%, an expected
life of 5 years and a dividend yield of zero. The resulting estimated fair value
of the shares granted in 1997 was $6.7 million which was recorded as part of the
special charge related to the new labor agreement.
F-19
<PAGE>
NOTE J --Related Party Transaction
The Chairman of the Board of WHX is the President and sole shareholder
of WPN Corp. Pursuant to a management agreement effective as of January 3, 1991,
as amended January 1, 1993 and April 11, 1994, approved by a majority of the
disinterested directors of WHX, WPN Corp. provides certain financial, management
advisory and consulting services to WHX. Such services include, among others,
identification, evaluation and negotiation of acquisitions, responsibility for
financing matters for WHX and its subsidiaries, review of annual and quarterly
budgets, supervision and administration, as appropriate, of all WHX's accounting
and financial functions and review and supervision of reporting obligations
under Federal and state securities laws. In exchange for such services, WPN
Corp. received a fixed monthly fee of $458,333 in 1996 and 1997 from WHX. In
1998, the Company will pay a monthly fee of $208,333 and WHX will pay $250,000
per month for these services. In addition to the fixed monthly fee, WHX paid a
$300,000 bonus to WPN Corp. for its services in obtaining a new five-year labor
contract with significant job reductions. The Management Agreement has a two
year term and is renewable automatically for successive one year periods, unless
terminated by either party upon 60 day's prior written notice.
The WHX stockholders approved a grant of an option to purchase
1,000,000 shares of Common Stock to WPN Corp. for their performance in obtaining
a new labor agreement. The options were valued using the Black--Scholes formula
at $6.7 million and recorded as a special charge related to the labor contract.
Pursuant to an indemnification agreement, the Company has agreed to
indemnify WHX and hold WHX harmless from all liabilities relating to the
operations of the Company whether relating to or arising out of occurrences
prior to, on or after the closing of the November Offering, and other
obligations assumed at the Closing. Similarly, WHX has agreed to indemnify the
Company and hold the Company harmless from all liabilities relating to the
operations of the business of WHX, other than the business of the Company,
whether relating to or arising out of occurrences prior to, on or after the
closing of the November Offering. To the extent WHX is called upon to make
payments under its guarantees of certain of the Company's indebtedness, the
Company will indemnify it in respect of such payments. To the extent the
Company's actions cause a default under the Revolving Credit Facility or the
termination of the Receivables Facility or a default under any other debt
instrument of WHX or Unimast, the Company will indemnify WHX and Unimast in
respect of any incremental costs and expenses suffered by WHX or Unimast on
account thereof. The Company's obligations under the Indemnification Agreement
will be subordinate to the Company's obligations under the 9 1/4% Senior Notes
and the Term Loan Agreement. To the extent WHX's or Unimast's actions cause a
default under the Revolving Credit Facility or the termination of the
Receivables Facility or a default under any other debt instrument of the
Company, WHX and Unimast will indemnify the Company in respect of any
incremental costs and expenses and damages suffered by the Company on account
thereof.
NOTE K-Commitments and Contingencies
Environmental Matters
The Company has been identified as a potentially responsible party
under the Comprehensive Environmental Response, Compensation and Liability Act
("Superfund") or similar state statues at several waste sites. The Company is
subject to joint and several liability imposed by Superfund on potentially
responsible parties. Due to the technical and regulatory complexity of remedial
activities and the difficulties attendant to identifying potentially responsible
parties and allocating or determining liability among them, the Company is
unable to reasonably estimate the ultimate cost of compliance with Superfund
laws. The Company believes, based upon information currently available, that the
Company's liability for clean up and remediation costs in connection with the
Buckeye reclamation will be between $3.0 and $4.0 million. At six other sites
(MIDC Glassport, United Scrap Lead, Tex-Tin, Breslube Penn, Four County Landfill
and Beazor) the Company estimates costs to aggregate up to $700,000. The Company
is currently funding its share of remediation costs.
F-20
<PAGE>
The Company, as are other industrial manufacturers, is subject to
increasingly stringent standards relating to the protection of the environment.
In order to facilitate compliance with these environmental standards, the
Company has incurred capital expenditures for environmental control projects
aggregating $5.9 million, $6.8 million and $12.4 million for 1995, 1996 and
1997, respectively. The Company anticipates spending approximately $41.3 million
in the aggregate on major environmental compliance projects through the year
2000, estimated to be spent as follows: $13.4 million in 1998, $15.9 million in
1999 and $12.0 million in 2000. Due to the possibility of unanticipated factual
or regulatory developments, the amount of future expenditures may vary
substantially from such estimates.
Non-current accrued environmental liabilities totaled $7.8 million at
December 31, 1996 and $10.6 million at December 31, 1997. These accruals were
initially determined by the Company in January 1991, based on all then available
information. As new information becomes available including information provided
by third parties, and changing laws and regulations , the liabilities are
reviewed and the accruals adjusted quarterly. Management believes, based on its
best estimate, that the Company has adequately provided for its present
environmental obligations and that complying with existing government
regulations will not materially impact the Company's financial position, or
results of operations. Based upon information currently available, including the
Company's prior capital expenditures, anticipated capital expenditures, consent
agreements negotiated with Federal and state agencies and information available
to the Company on pending judicial and administrative proceedings, the Company
does not expect its environmental compliance costs, including the incurrence of
additional fines and penalties, if any, relating to the operation of its
facilities, to have a material adverse effect on the financial condition or
results of operations of the Company. However, as further information comes into
the Company's possession, it will continue to reassess such evaluations.
NOTE L--Other Income
<TABLE>
<CAPTION>
December 31,
---------------------------------------------------------
1995 1996 1997
----------------- ------------------- -------------------
(Dollars in thousands)
<S> <C> <C> <C>
Interest and investment income........................... $ 3,106 $ 3,948 $ 4,189
Equity income (loss)..................................... 4,845 9,495 (1,206)
Receivables securitization fees.......................... (4,283) (4,934) (3,826)
Other, net............................................... (434) 967 622
----------------- ------------------- -------------------
$ 3,234 $ 9,476 $ (221)
================= =================== ===================
</TABLE>
NOTE M--Sale of Receivables
In 1994, a special purpose wholly-owned subsidiary of WPSC, entered
into an agreement to sell (up to $75 million on a revolving basis) an undivided
percentage ownership in a designated pool of accounts receivable
F-21
<PAGE>
generated by WPSC, WCPI and PCC. The agreement expires in August 1999. In July
1995 WPSC amended such agreement to sell an additional $20 million on similar
terms and conditions. In October 1995 WPSC entered into an agreement to include
the receivable generated by Unimast, in the pool of accounts receivable sold.
Accounts receivable at December 31, 1996 and 1997 exclude $45 million and $69
million, respectively, representing uncollected accounts receivable sold with
recourse limited to the extent of uncollectible balances. Fees paid by WPSC
under this agreement range from 5.76% to 8.50% of the outstanding amount of
receivables sold. Based on the Company's collection history, the Company
believes that credit risk associated with the above arrangement is immaterial.
The Company adopted Statement of Financial Accounting Standards No.
125 Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities (SFAS 125), effective January 1, 1997. The
adoption of SFAS 125 did not have a material effect on the Company's financial
position or results of operations for the year ended December 31, 1997.
Note N--Separate Financial Statements of Subsidiaries not consolidated and 50
percent or less owned persons.
The Company owns 35.7% of Wheeling-Nisshin, Inc. (Wheeling-Nisshin").
Wheeling-Nisshin had total debt outstanding at December 31, 1996 and 1997 of
approximately $25.3 million and $18.5 million, respectively. The Company derived
approximately 15.2% and 12.7%of its revenues from sale of steel to
Wheeling-Nisshin in 1995 and 1996, respectively. The decrease in revenue
reflects the effect of the Strike on Company shipments to Wheeling-Nisshin. The
Company received dividends of $2.5 million annually from Wheeling-Nisshin from
1995 through 1997. Audited financial statements of Wheeling-Nisshin are
presented at page F-25 because it is considered a significant subsidiary of the
Company under SEC regulations.
Note O -- Extraordinary Charges
<TABLE>
<CAPTION>
1995 1996 1997
---- ---- ----
(Dollars in thousands)
<S> <C> <C>
Premium on early debt retirement -- -- $32,600
Unamortized debt issuance cost -- -- 4,770
Coal retiree medical benefits 4,681 -- 2,615
Income tax effect (1,638) -- (13,995)
------- --- --------
$3,043 -- $25,990
====== === =======
</TABLE>
In November 1997 the Company paid a premium of $32.6 million to defease
the remaining $266.2 million of the 93/8 Senior Notes at a total cost of $298.8
million.
In 1997, a 7% discount rate was used to calculate the actuarially
determined coal retiree medical benefits liability. In 1996 and 1995 the
discount rate was 7.5%. In 1997 the Company also incurred higher premiums for
additional retirees and orphans assigned in 1995. See Note D.
F-22
<PAGE>
Note P--Quarterly Information (Unaudited)
Financial results by quarter for the two fiscal years ended December
31, 1996 and 1997 are as follows:
<TABLE>
<CAPTION>
Earnings (Loss)
Per Share Before Earnings
Gross Profit Extraordinary Net Income Extraordinary (Loss) Per
Net Sales (Loss) Charge (Loss) (Loss) Charge Share
----------- ----------- ----------------- ------------ ----------------- -----------
(Dollars in thousands)
1996:
<S> <C> <C> <C> <C> <C> <C>
1st Quarter............... $287,846 $ 38,720 -- $ 1,389 * *
2nd Quarter............... 328,457 55,342 -- 11,020
3rd Quarter............... 359,906 57,986 -- 13,223
4th Quarter(1)............ 134,475 (29,525) -- (30,915)
1997(1):
1st Quarter............... 79,014 (34,139) -- (40,251) * *
2nd Quarter............... 87,878 (20,825) -- (34,584)
3rd Quarter............... 103,217 (31,621) -- (96,785)
4th Quarter............... 219,553 (9,362) (25,990) (58,833)
</TABLE>
* Earnings per share are not meaningful because the Company is a
wholly-owned subsidiary of WHX Corporation.
(1) The financial results of the Company for the fourth quarter of 1996 and
all four quarters of 1997 were adversely affected by the Strike.
Negative impacts of the Strike included the volume effect of lower
production on fixed cost absorption, higher levels of external steel
purchases, start-up costs and a higher- cost mix of products shipped.
F-23
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors of
Wheeling-Nisshin, Inc.:
We have audited the accompanying balance sheets of Wheeling-Nisshin,
Inc. (the Company) as of December 31, 1997 and 1996 , and the related statements
of income, shareholders' equity and cash flows for each of the three years in
the period ended December 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Wheeling-Nisshin,
Inc. as of December 31, 1997 and 1996 , and the results of its operations and
its cash flows for each of the three years in the period ended December 31, 1997
in conformity with generally accepted accounting principles.
/s/ COOPERS & LYBRAND LLP
-------------------------
COOPERS & LYBRAND LLP
Pittsburgh, Pennsylvania
February 12, 1998
F-24
<PAGE>
WHEELING-NISSHIN, INC.
BALANCE SHEETS
December 31, 1997 and 1996
(Dollars in thousands)
<TABLE>
<CAPTION>
1997 1996
----------------- -----------------
ASSETS
Current assets:
<S> <C> <C>
Cash and cash equivalents..................................................... $ 22,313 $ 19,017
Investments................................................................... 28,500 19,900
Trade accounts receivable, net of allowance for
bad debts of $250 in 1997 and 1996......................................... 16,364 19,765
Inventories (Note 3).......................................................... 16,793 22,233
Prepaid income taxes.......................................................... 139 --
Deferred income taxes (Note 6)................................................ 2,342 2,337
622 819
Other current assets.......................................................... ----------------- -----------------
Total current assets.................................................... 87,073 84,071
Property, plant and equipment, net (Note 4)..................................... 124,787 134,174
Debt issuance costs, net of accumulated amortization
of $1,704 in 1997 and $1,617 in 1996........................................ 197 284
719 851
Other assets.................................................................... ----------------- -----------------
Total assets........................................................... $ 212,776 $ 219,380
================= =================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable.............................................................. $ 10,684 $ 21,226
Due to affiliates (Note 8).................................................... 3,356 --
Accrued interest.............................................................. 367 497
Accrued income taxes.......................................................... -- 3,183
Other accrued liabilities..................................................... 3,260 3,388
Accrued profit sharing........................................................ 4,644 6,505
6,835 6,828
Current portion of long-term debt (Note 5).................................... ----------------- -----------------
Total current liabilities............................................... 29,146 41,627
Long-term debt, less current portion (Note 5)................................... 11,645 18,487
Deferred income taxes (Note 6).................................................. 25,262 24,116
2,500 --
Other long-term liabilities (Note 9)............................................ ----------------- -----------------
Total liabilities....................................................... 68,553 84,230
Contingencies (Note 9).......................................................... ----------------- -----------------
Shareholders' equity:
Common stock, no par value; authorized, issued
and outstanding, 7,000 shares............................................... 71,588 71,588
Retained earnings............................................................ 72,635 63,562
----------------- -----------------
Total shareholders' equity.................................................. 144,223 135,150
----------------- -----------------
Total liabilities and shareholders' equity.............................. $ 212,776 $ 219,380
================= =================
</TABLE>
The accompanying notes are an integral part of the
financial statements.
F-25
<PAGE>
WHEELING-NISSHIN, INC.
STATEMENTS OF INCOME
For the years ended December 31, 1997, 1996 and 1995
(Dollars in thousands)
<TABLE>
<CAPTION>
1997 1996 1995
----------------- ----------------- -----------------
<S> <C> <C> <C>
Net Sales.................................................... $396,278 $375,658 $389,704
Cost of goods sold (Note 8)................................... 365,967 335,071 349,429
----------------- ----------------- -----------------
Gross profit............................................. 30,311 40,587 40,275
Selling, general and administrative expenses.................. 5,608 6,546 8,676
----------------- ----------------- -----------------
Operating profit.......................................... 24,703 34,041 31,599
----------------- ----------------- -----------------
Other income (expense):
Interest and other income................................... 2,203 2,539 1,717
Interest expense........................................... (1,398) (1,909) (3,729)
----------------- ----------------- -----------------
805 630 (2,012)
----------------- ----------------- -----------------
Income before income taxes............................... 25,508 34,671 29,587
Provision for income taxes (Note 6).......................... 9,435 13,110 11,538
----------------- ----------------- -----------------
Net income............................................... $16,073 $21,561 $18,049
---------------- ----------------- -----------------
Earnings per share (Note 2)................................... $2.30 $3.08 $2.58
================- ================= =================
</TABLE>
The accompanying notes are a integral part of the
financial statements.
F-27
<PAGE>
WHEELING-NISSHIN, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
For the years ended December 31, 1997, 1996 and 1995
(Dollars in thousands)
<TABLE>
<CAPTION>
Common Retained
Stock Earnings Total
----------------- ----------------- -----------------
<S> <C> <C> <C>
Balance at December 31, 1994................................. $ 71,588 $ 37,952 $ 109,540
Net income.................................................... -- 18,049 18,049
-- (7,000) (7,000)
Cash dividends ($1 per share)................................. ----------------- ----------------- -----------------
Balance at December 31, 1995.................................. 71,588 49,001 120,589
Net income.................................................... -- 21,561 21,561
-- (7,000) (7,000)
Cash dividends ($1 per share)................................. ----------------- ----------------- -----------------
Balance at December 31, 1996.................................. 71,588 63,562 135,150
Net income.................................................... -- 16,073 16,073
-- (7,000) (7,000)
Cash dividends ($1 per share)................................. ----------------- ----------------- -----------------
$ 71,588 $ 72,635 $ 144,223
Balance at December 31, 1997 ================= ================= =================
</TABLE>
The accompanying notes are a integral part of the financial statements.
F-28
<PAGE>
WHEELING-NISSHIN, INC.
STATEMENTS OF CASH FLOWS
For the years ended December 31, 1997, 1996 and 1995
(Dollars in thousands)
<TABLE>
<CAPTION>
1997 1996 1995
----------------- ----------------- -----------------
Cash flows from operating activities:
<S> <C> <C> <C>
Net income.................................................. $ 16,073 $ 21,561 $ 18,049
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization............................. 13,065 12,952 16,210
Deferred income taxes.................................... 1,141 5,330 5,449
Net change in operating assets and liabilities:
Decrease (increase) in trade accounts receivable....... 3,401 (730) (602)
Decrease (increase) in inventories..................... 5,440 (3,467) 5,161
(Increase) decrease in prepaid and accrued
income taxes ......................................... (3,322) (51) 1,368
Decrease (increase) in other assets.................... 197 (636) 42
(Decrease) Increase in accounts payable................. (10,542) 12,846 179
Increase (decrease) in due to affiliates................ 3,356 (6,036) (25,233)
Decrease in accrued interest........................... (130) (173) (312)
(1,989) 945 4,843
(Decrease) increase in other accrued liabilities........ ----------------- ----------------- -----------------
26,690 42,541 25,154
Net cash provided by operating activities............ ----------------- ----------------- -----------------
Cash flows from investing activities:
Capital expenditures, net................................... (959) (1,173) (1,029)
Purchase of investments.................................... (43,700) (19,900) --
35,100 -- --
Sale of investments......................................... ----------------- ----------------- -----------------
(9,559) (21,073) (1,029)
Net cash used in investing activities................ ----------------- ----------------- -----------------
Cash flows from financing activities:
Payments on long-term debt.................................. (6,835) (11,361) (32,145)
(7,000) (7,000) (7,000)
Payment of dividends...................................... ----------------- ----------------- -----------------
(13,835) (18,361) (39,145)
Net cash used in financing activities................. ----------------- ----------------- -----------------
Net increase (decrease) in cash and
cash equivalents............................................ 3,296 3,107 (15,020)
Cash and cash equivalents:
19,017 15,910 30,930
Beginning of the year....................................... ----------------- ----------------- -----------------
$ 22,313 $ 19,017 $ 15,910
End of the year............................................ ----------------- ----------------- -----------------
Supplemental cash flow disclosures:
Cash paid during the year for:
Interest.................................................. $ 1,528 $ 2,082 $ 4,041
----------------- ----------------- -----------------
Income taxes.............................................. $ 11,616 $ 7,831 $ 4,968
----------------- ----------------- -----------------
Supplemental schedule of noncash investing
and financing activities:
Acquisition of property, plant and equipment
included in other long-term liabilities (Note 9)......... $ 2,500 $ -- $ 290
================- ================= =================
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-29
<PAGE>
WHEELING-NISSHIN, INC.
NOTES TO FINANCIAL STATEMENTS
(Dollars in thousands)
1. Description of Business
Wheeling-Nisshin, Inc. (the Company) is engaged in the production and
marketing of galvanized and aluminized steel products at a manufacturing
facility in Follansbee, West Virginia. Principally all of the Company's sales
are to ten trading companies located primarily in the United States. At December
31, 1997, Nisshin Holding Incorporated, a wholly-owned subsidiary of Nisshin
Steel Co., Ltd.,(Nisshin) and Wheeling-Pittsburgh Corporation
(Wheeling-Pittsburgh) owned 64.3% and 35.7% of the outstanding common stock of
the Company, respectively.
2. Summary of Significant Accounting Policies
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements. Estimates also affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents:
Cash and cash equivalents consist of general cash accounts and highly
liquid debt instruments with maturities of three months or less when purchased.
Substantially all of the Company's cash and cash equivalents are maintained at
one financial institution. No collateral or other security is provided on these
deposits, other than $100 of deposits insured by the Federal Deposit Insurance
Corporation.
Investments:
Effective January 1, 1996, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt
and Equity Securities." This statement requires that securities be classified as
trading, held-to-maturity, or available-for-sale. The Company's investments,
which consist of certificates of deposit and commercial paper, are classified as
held-to-maturity and are recorded at cost . The certificates of deposit amounted
to $28,500 and $15,000 at December 31, 1997 and 1996, respectively, and are
maintained at one financial institution. Commercial paper amounted to $4,900 at
December 31, 1996.
Inventories:
Inventories are stated at the lower of cost or market. Cost is
determined by the last-in, first-out (LIFO) method.
Property, Plant and Equipment:
Property, plant and equipment is stated at cost less accumulated
depreciation and amortization.
Major renewals and improvements are charged to the property accounts,
while replacements, maintenance and repairs which do not improve or extend the
useful lives of the respective assets are expensed. Upon disposition or
retirement of property, plant and equipment, the cost and the related
accumulated depreciation or amortization are removed from the accounts. Gains or
losses on sales are reflected in other income.
F-30
<PAGE>
Depreciation and amortization are provided using the straight-line
method over the estimated useful lives of the assets.
Deferred Pre-Operating Costs:
Certain costs directly related and incremental to the Company's second
production line were deferred until commencement of commercial operations in
March 1993. These costs, which were an integral part of the process of bringing
the new line into commercial production and, therefore, benefited future
periods, were being amortized using the straight-line method over a three-year
period. In 1995, management determined that they had fully recovered the
deferred pre-operating costs related to the new production line. Accordingly,
the remaining unamortized cost at December 31, 1995 of $390 was charged to
operations in 1995.
Debt Issuance Costs:
Debt issuance costs associated with long-term debt secured to finance
the construction of the Company's original manufacturing facility and the second
production line were capitalized and are being amortized using the effective
interest method over the term of the related debt.
Income Taxes:
The Company uses SFAS 109, "Accounting for Income Taxes" to recognize
deferred tax liabilities and assets for the difference between the financial
statement carrying amounts and the tax basis of assets and liabilities using
enacted tax rates in effect in the years in which the differences are expected
to reverse. Valuation allowances are established when necessary to reduce
deferred tax assets to the amount expected to be realized.
Earnings Per Share:
The Company has adopted SFAS No. 128, "Earnings Per Share" issued in
February 1997. This statement requires the disclosure of basic and diluted
earnings per share and revises the method required to calculate these amounts.
The adoption of this standard did not impact previously reported earnings per
share amounts.
Earnings per share is calculated by dividing net income by the weighted
average number of shares of common stock outstanding during each period.
Reclassification:
In 1997, the Company reclassified cash discounts previously reported
within selling, general and administrative expense to net sales. Previous years
financial statements have been restated to conform to 1997 presentation. Cash
discounts were approximately, $1,917, $1,842, and $1,873 in 1997, 1996 and 1995,
respectively.
3. Inventories
Inventories consist of the following at December 31:
<TABLE>
<CAPTION>
1997 1996
----------------- -----------------
<S> <C> <C>
Raw materials................................................................... $ 6,089 $ 10,645
Finished goods.................................................................. 10,704 11,588
----------------- -----------------
$ 16,793 $ 22,233
================= =================
</TABLE>
Had the Company used the first-in, first-out (FIFO) method to value
inventories, the cost of inventories would have been $1,343 lower than the LIFO
value at December 31, 1997 and $12 lower than the LIFO value
F-31
<PAGE>
at December 31, 1996. During 1997, certain inventory quantities were reduced,
resulting in liquidation of LIFO inventories, the effect of which increased net
income by approximately $839.
4. Property, Plant and Equipment
Property, plant and equipment consists of the following at December 31:
<TABLE>
<CAPTION>
1997 1996
----------------- -----------------
<S> <C> <C>
Buildings.......................................................................$ 34,665 $ 34,665
Land improvements............................................................... 3,097 3,097
Machinery and equipment........................................................ 164,893 161,723
Office equipment................................................................ 3,725 3,436
----------------- -----------------
206,380 202,921
Less accumulated depreciation and amortization.................................. (82,625) (69,779)
----------------- -----------------
123,755 133,142
Land............................................................................ 1,032 1,032
----------------- -----------------
$ 124,787 $ 134,174
================= =================
</TABLE>
Depreciation expense was $12,846, $12,715 and $13,651 in 1997, 1996,
and 1995, respectively.
5. Long-Term Debt
Long-term debt consists of the following at December 31:
<TABLE>
<CAPTION>
1997 1996
------------------ -----------------
<S> <C> <C>
Industrial revenue bonds for the second production line accruing interest at
.625% over the LIBOR rate, as adjusted for periods ranging from three months
to one year, as elected by the Company. The interest rate on the bonds at
December 31, 1997 was 6.53%. The bonds are payable in 17 equal semi-annual
installments
of $3,353 plus interest through March 2000 ..................................$ 18,235 $ 24,941
West Virginia Economic Development Authority (WVEDA) loan accruing interest at
4%, payable in monthly installments of $2 including interest
through January 2001.......................................................... 67 90
Capital lease obligations accruing interest at rates
ranging from 10% to 13.8%, payable in monthly 178 284
installments through January 2000.............................................----------------- -----------------
18,480 25,315
6,835 6,828
Less current portion............................................................ ---------------- -----------------
$ 11,645 $ 18,487
================ =================
</TABLE>
The industrial revenue bonds are collateralized by substantially all
property, plant and equipment and are guaranteed by Nisshin. In addition, the
industrial revenue bonds provide that dividends may not be declared or paid
without the prior written consent of the lender. Such approval was obtained for
the dividends paid in years 1997, 1996 and 1995.
F-32
<PAGE>
The annual maturities on all long-term debt for each of the five years
ending December 31 are: $6,835 in 1998; $6,784 in 1999; $4,848 in 2000 ; $13 in
2001 and $0 in 2002.
F-33
<PAGE>
6. Income Taxes
The provision for income taxes for the years ended December 31 consist
of:
<TABLE>
<CAPTION>
1997 1996 1995
----------------- ----------------- -----------------
Current:
<S> <C> <C> <C>
U.S. Federal................................................ $ 7,771 $ 7,366 $ 5,838
State...................................................... 523 414 251
Deferred..................................................... 1,141 5,330 5,449
----------------- ----------------- -----------------
$ 9,435 $ 13,110 $ 11,538
================= ================= =================
</TABLE>
Reconciliation of the federal statutory and effective tax rates for
1997, 1996 and 1995 are as follows:
<TABLE>
<CAPTION>
1997 1996 1995
----------------- ----------------- -----------------
<S> <C> <C> <C>
Federal statutory rate....................................... 35.0% 35.0% 35.0%
State income taxes............................................ 1.5 1.2 0.8
Other, net................................................... 0.5 1.6 3.2
----------------- ----------------- -----------------
37.0% 37.8% 39.0%
================= ================= =================
</TABLE>
The deferred tax assets and liabilities recorded on the balance sheets
as of December 31 are as follows:
<TABLE>
<CAPTION>
1997 1996
----------------- -----------------
Deferred tax assets:
<S> <C> <C>
Accrued expenses............................................................. $ 1,120 $ 1,376
Other......................................................................... 1,222 961
----------------- -----------------
2,342 2,337
----------------- -----------------
Deferred tax liabilities:
Depreciation and amortization................................................. 23,781 22,491
Other......................................................................... 1,481 1,625
----------------- -----------------
25,262 24,116
----------------- -----------------
$ 22,920 $ 21,779
================= =================
</TABLE>
The Company has available tax credit carryforwards of approximately
$60,000 which may be used to offset up to 80% of future West Virginia state
income tax liabilities through 2003. A valuation allowance for the entire amount
of the credit has been recognized in the accompanying financial statements.
Accordingly, as the credit is utilized, a benefit is recognized through a
reduction of the current state income tax provision. Such benefit amounted to
approximately $864 in 1997, $998 in 1996 and $640 in 1995 .
7. Employee Benefit Plans
Retirement Plan:
The Company has a noncontributory, defined contribution plan which
covers eligible employees. The plan provides for Company contributions ranging
from 2% to 6% of the participant's annual compensation based on their years of
service. The Company's contribution to the plan was $415 in 1997, $336 in 1996
and $266 in 1995 .
F-34
<PAGE>
Profit-Sharing Plan:
The Company has a nonqualified profit-sharing plan for eligible
employees, providing for cash distributions to the participants in years when
income before income taxes is in excess of $500. These contributions are based
on an escalating scale from 5% to 15% of income before income taxes.
Profit-sharing expense was $4,644 in 1997, $6,505 in 1996 and $5,546 in 1995 .
Postretirement Benefits:
In December 1996, the Company adopted a defined benefit postretirement
plan which covers eligible employees. Generally, the plan calls for a stated
percentage of medical expenses reduced by deductibles and other coverages. The
plan is currently unfunded. The postretirement benefit expense was $68 for 1997
and 1996. Accrued postretirement benefits was approximately $144 and $68 at
December 31, 1997 and 1996, respectively.
8. Related Party Transactions
The Company has an agreement with Wheeling-Pittsburgh under which the
Company has agreed to purchase a specified portion of its required raw materials
through the year 2013. The Company purchased $24,533, $161,380 and $187,548 of
raw materials and processing services from Wheeling-Pittsburgh in 1997, 1996 and
1995, respectively. The amounts due Wheeling-Pittsburgh for such purchases are
included in due to affiliates in the accompanying balance sheets.
The Company sells products to Wheeling-Pittsburgh. Such sales totaled
$6,408, $6,511, and $5,693 in 1997, 1996, and 1995, respectively, of which $880
and $901 remained unpaid at December 31, 1997 and 1996, respectively, and are
included in trade accounts receivable in the accompanying balance sheets. The
Company also sells product to Unimast, Inc., an affiliate of
Wheeling-Pittsburgh. Such sales totaled $435, $1,537 and $1,389 in 1997, 1996
and 1995, respectively, of which $10 and $358 remained unpaid at December 31,
1997 and 1996, respectively, and were included in trade accounts receivable in
the accompanying balance sheets.
9. Legal Matters
The Company is a party to a dispute for final settlement of charges
related to the construction of its second production line. The Company had
claims asserted against it in the amount of approximately $6,900 emerging from
civil actions alleging delays on the project. In connection with the dispute,
the Company filed a separate claim for alleged damages that it had sustained in
the amount of approximately $400.
The claims were litigated in the Court of Common Pleas of Allegheny
County, Pennsylvania in a jury trial, which commenced on January 5, 1996. A
verdict in the amount of $6,700 plus interest of $1,900 was entered against the
Company on October 2, 1996. After the verdict, the plaintiffs requested the
trial court to award counsel fees in the amount of $2,422 against the Company .
The motions for counsel fees plus interest were granted by the court to the
plaintiffs in June 1997.
The Company filed appeals from the judgments to the Superior Court of
Pennsylvania in 1997. Post- judgment interest will accrue during the appeal
period. Additionally, the Company has posted a bond in the amount approximating
$12,000 that will be held by the court pending the appeals. Although the Company
has been advised by its Special Counsel that it has various legal bases for
relief, litigation is subject to many uncertainties and, as such, the Company is
presently unable to predict the outcome of its appeals. The Company has recorded
a liability in the amount of $2,500 at December 31, 1997 related to these
matters, which has been capitalized in property, plant and equipment as cost
overruns in the accompanying 1997 balance sheet. If the Company is unsuccessful
in these appeals, it is at least reasonably possible that the ultimate
resolution of these matters may have a material effect on the Company's results
of operations or cash flows in the year of final determination. Any portion of
the ultimate resolution for interest, penalties and counsel fees will be charged
to results of operations.
F-35
<PAGE>
10. Fair Value of Financial Investments
The estimated fair values and the methods used to estimate those values
are disclosed below:
Investments:
The fair values of commercial paper and certificates of deposit were
$28,890 and $20,145 at December 31, 1997 and 1996, respectively. These amounts
were determined based on the investment cost plus interest receivable at
December 31, 1997 and 1996.
Long-Term Debt:
Based on borrowing rates currently available to the Company for bank
loans with similar terms and maturities, fair value approximates the carrying
value.
F-36
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers.
The General Corporation Law of the State of Delaware (the "Delaware
Law") permits indemnification of directors, employees and agents of corporations
under certain conditions and subject to certain limitations. Pursuant to the
Delaware Law, the Company has included in its Certificate of Incorporation and
bylaws a provision to eliminate the personal liability of its directors for
monetary damages for breach or alleged breach of their duty of care to the
fullest extent permitted by the Delaware Law and to provide that the Company
shall indemnify its directors and officers to the fullest extent permitted by
the Delaware Law.
Item 21. Exhibits and Financial Statement Schedules.
(a) The following is a complete list of Exhibits filed as a part of this
Registration Statement, which are incorporated herein:
**1 Purchase Agreement dated November 20, 1997, by and among the
Company, and the Initial Purchasers.
*2.1 Amended and Restated Shareholders Agreement dated as of
November 12, 1995, between Nisshin Steel Co., Ltd. and
Wheeling-Pittsburgh Steel Corporation.
*2.2 Close Corporation and Shareholder's Agreement effective as of
March 24, 1994, by and among Dong Yang Tinplate America Corp.,
the Company, Nittetsu Shoji America, Inc. and Ohio Coatings
Company.
*3.1 Certificate of Incorporation of the Company.
*3.2 By-laws of the Company.
*3.3 Certificate of Incorporation of Wheeling-Pittsburgh Steel
Corporation.
*3.4 By-laws of Wheeling-Pittsburgh Steel Corporation.
*3.5 Certificate of Incorporation of Consumers Mining Corporation.
*3.6 By-laws of Consumers Mining Corporation.
*3.7 Certificate of Incorporation of Wheeling-Empire Company.
*3.8 By-laws of Wheeling-Empire Company.
*3.9 Certificate of Incorporation of Mingo Oxygen Company.
*3.10 By-laws of Mingo Oxygen Company.
*3.11 Certificate of Incorporation of Pittsburgh-Canfield Company.
*3.12 By-laws of Pittsburgh-Canfield Company.
*3.13 Certificate of Incorporation of Wheeling Construction
Products, Inc.
*3.14 By-laws of Wheeling Construction Products, Inc.
*3.15 Certificate of Incorporation of WP Steel Venture Corporation.
*3.16 By-laws of WP Steel Venture Corporation.
*3.17 Certificate of Incorporation of Champion Metal Products, Inc.
II-1
<PAGE>
*3.18 By-laws of Champion Metal Products, Inc.
*4.1 Indenture dated as of November 26, 1997, by and among the
Company and Bank One, N.A.
***5 Opinion of Olshan Grundman Frome & Rosenzweig LLP.
***8 Opinion of Olshan Grundman Frome & Rosenzweig LLP (included in
Exhibit 5 to this Registration Statement).
*23.1 Consent by Price Waterhouse LLP.
*23.2 Consent by Coopers & Lybrand LLP.
***23.4 Consent of Olshan Grundman Frome & Rosenzweig LLP (included in
Exhibit 5 to this Registration Statement).
*25 Statement of eligibility of trustee.
*99.1 Registration Rights Agreement dated November 26, 1997, by and
among the Company and the Initial Purchasers.
**99.3 Form of Letter of Transmittal for Tender of all outstanding 9
1/4% Senior Notes Due 2007 in exchange for 9 1/4% Senior
Exchange Notes Due 2007 of the Company.
**99.4 Form of Tender for all outstanding 9 1/4% Senior Notes Due
2007 in exchange for 9 1/4% Senior Exchange Notes Due 2007 of
the Company.
**99.5 Form of Instruction to Registered Holder from Beneficial Owner
of 9 1/4% Senior Notes due 2007 of the Company.
**99.6 Form of Notice of Guaranteed Delivery for outstanding 9 1/4%
Senior Notes Due 2007 in exchange for 9 1/4% Senior Exchange
Notes Due 2007 of the Company.
- ----------------------
* Filed herewith.
** Previously filed.
*** To be filed by amendment.
Item 22. Undertakings.
(a) The undersigned registrants hereby undertake:
(1) That prior to any public reoffering of the securities registered
hereunder through the use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c) under the Securities Act of 1933, as amended (the
"Securities Act"), the issuer undertakes that such reoffering prospectus will
contain the information called for by the applicable registration form with
respect to reofferings by persons who may be deemed underwriters, in addition to
the information called for by the other Items of the applicable form.
II-2
<PAGE>
(2) That every prospectus (i) that is filed pursuant to paragraph (1)
immediately preceding, or (ii) that purports to meet the requirements of section
10(a)(3) of the Securities Act and is used in connection with an offering of
securities subject to Rule 415 under the Securities Act, will be filed as a part
of an amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrants pursuant to the foregoing provisions, or otherwise, the registrants
have been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
enforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrants of expenses incurred or
paid by a director, officer or controlling person of the registrants in the
successful defense of any action, suit or proceedings) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
(c) The undersigned registrants hereby undertake to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(d) The undersigned registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(e) The undersigned registrants hereby undertake that, for purposes of
determining any liability under the Securities Act, each filing of the
registrants' annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Wheeling-Pittsburgh Corporation has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Wheeling, State of West Virginia on March 4, 1998.
WHEELING-PITTSBURGH CORPORATION
By: /s/ John R. Scheessele
-------------------------------------
John R. Scheessele
President and Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act, as amended, this
Registration Statement has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ John R. Scheessele
- ------------------------ President and Chief Executive March 4, 1998
John R. Scheessele Officer (Principal Executive Officer)
/s/ Paul J. Mooney Executive Vice President and Chief March 4, 1998
- ------------------------ Financial Officer (Principal Financial
Paul J. Mooney Officer and Principal Accounting
Officer)
/s/ * Ronald LaBow Director March 4, 1998
- ------------------------
Ronald LaBow
/s/ * Robert A. Davidow Director March 4, 1998
- ------------------------
Robert A. Davidow
/s/ * Marvin L. Olshan Director March 4, 1998
- -------------------------
Marvin L. Olshan
_________________
* By Power of Attorney
</TABLE>
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Wheeling-Pittsburgh Steel Corporation has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Wheeling, State of West Virginia on March 4, 1998.
WHEELING-PITTSBURGH STEEL CORPORATION
By: /s/ John R. Scheessele
-------------------------------------
John R. Scheessele
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints John
R. Scheessele and Paul J. Mooney, and each of them singly, as his true and
lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him, and his name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
and supplements to this Registration Statement, and to file the same, with all
exhibits thereto, and all other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as full to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or their substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, as amended, this
Registration Statement has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ John R. Scheessele President and Chief Executive March 4, 1998
- ---------------------------- Officer (Principal Executive Officer)
John R. Scheessele
/s/ Paul J. Mooney Executive Vice President and Chief March 4, 1998
- ---------------------------- Financial Officer (Principal Financial
Paul J. Mooney Officer and Principal Accounting
Officer)
Director March 4, 1998
- ----------------------------
Robert L. Dobson
/s/ Ronald LaBow Director March 4, 1998
- ----------------------------
Ronald LaBow
Director March 4, 1998
- ----------------------------
Keith K. Kappmeyer
/s/ Stewart E. Tabin Director March 4, 1998
- ----------------------------
Stewart E. Tabin
/s/ Akimune Takewaka Director March 4, 1998
- ----------------------------
Akimune Takewaka
/s/ Neale X. Trangucci Director March 4, 1998
- ----------------------------
Neale X. Trangucci
</TABLE>
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Consumers Mining Corporation has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Wheeling, State of West Virginia on March 4, 1998.
CONSUMERS MINING CORPORATION
By: /s/ John R. Scheessele
-----------------------------------------
John R. Scheessele
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints John
R. Scheessele and Paul J. Mooney, and each of them singly, as his true and
lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him, and his name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
and supplements to this Registration Statement, and to file the same, with all
exhibits thereto, and all other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as full to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or their substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, as amended, this
Registration Statement has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ John R. Scheessele President and Chief Executive March 4, 1998
- ------------------------------- Officer (Principal Executive Officer)
John R. Scheessele
/s/ Paul J. Mooney Executive Vice President and Chief March 4, 1998
- -------------------------------
Paul J. Mooney Financial Officer (Principal Financial
Officer and Principal Accounting
Officer)
/s/ James E. Muldoon Director March 4, 1998
- -------------------------------
James E. Muldoon
</TABLE>
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Wheeling Empire Company has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Wheeling, State of West Virginia on March 4, 1998.
WHEELING EMPIRE COMPANY
By: /s/ John R. Scheessele
-------------------------------------
John R. Scheessele
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints John
R. Scheessele and Paul J. Mooney, and each of them singly, as his true and
lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him, and his name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
and supplements to this Registration Statement, and to file the same, with all
exhibits thereto, and all other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as full to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or their substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, as amended, this
Registration Statement has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ John R. Scheessele President and Chief Executive March 4, 1998
- ------------------------- Officer (Principal Executive Officer)
John R. Scheessele
/s/ Paul J. Mooney Executive Vice President and Chief March 4, 1998
- -------------------------
Paul J. Mooney Financial Officer (Principal Financial
Officer and Principal Accounting
Officer)
/s/ James E. Muldoon Director March 4, 1998
- -------------------------
James E. Muldoon
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Mingo Oxygen Company has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Wheeling, State of West Virginia on March 4, 1998.
MINGO OXYGEN COMPANY
By: /s/ John R. Scheessele
--------------------------------------
John R. Scheessele
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints John
R. Scheessele and Paul J. Mooney, and each of them singly, as his true and
lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him, and his name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
and supplements to this Registration Statement, and to file the same, with all
exhibits thereto, and all other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as full to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or their substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, as amended, this
Registration Statement has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ John R. Scheessele President and Chief Executive March 4, 1998
- --------------------------- Officer (Principal Executive Officer)
John R. Scheessele
/s/ Paul J. Mooney Executive Vice President and Chief March 4, 1998
- ---------------------------
Paul J. Mooney Financial Officer (Principal Financial
Officer and Principal Accounting
Officer)
/s/ James E. Muldoon Director March 4, 1998
- ---------------------------
James E. Muldoon
/s/ Thomas A. Helinski Director March 4, 1998
- ---------------------------
Thomas A. Helinski
/s/ John W. Testa Director March 4, 1998
- ---------------------------
John W. Testa
</TABLE>
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Pittsburgh-Canfield Company has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Wheeling, State of West Virginia on March 4, 1998.
PITTSBURGH-CANFIELD COMPANY
By:/s/ John R. Scheessele
-------------------------------------
John R. Scheessele
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints John
R. Scheessele and Paul J. Mooney, and each of them singly, as his true and
lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him, and his name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
and supplements to this Registration Statement, and to file the same, with all
exhibits thereto, and all other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as full to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or their substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, as amended, this
Registration Statement has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ John R. Scheessele President and Chief Executive March 4, 1998
- ---------------------------- Officer (Principal Executive Officer)
John R. Scheessele
/s/ Paul J. Mooney Executive Vice President and Chief March 4, 1998
- ----------------------------
Paul J. Mooney Financial Officer (Principal Financial
Officer and Principal Accounting
Officer)
/s/ James E. Muldoon Director March 4, 1998
- ----------------------------
James E. Muldoon
/s/ John W. Testa Director March 4, 1998
- ----------------------------
John W. Testa
</TABLE>
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Wheeling-Construction Products, Inc. has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Wheeling, State of West Virginia on March 4, 1998.
WHEELING-CONSTRUCTION PRODUCTS, INC.
By: /s/ John R. Scheessele
------------------------------------------
John R. Scheessele
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints John
R. Scheessele and Paul J. Mooney, and each of them singly, as his true and
lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him, and his name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
and supplements to this Registration Statement, and to file the same, with all
exhibits thereto, and all other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as full to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or their substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, as amended, this
Registration Statement has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ John R. Scheessele President and Chief Executive March 4, 1998
- ---------------------------- Officer (Principal Executive Officer)
John R. Scheessele
/s/ Paul J. Mooney Executive Vice President and Chief March 4, 1998
- -----------------------------
Paul J. Mooney Financial Officer (Principal Financial
Officer and Principal Accounting
Officer)
/s/ Tom Patrick Director March 4, 1998
- ---------------------------
Tom Patrick
</TABLE>
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
WP Steel Venture Corporation has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Wheeling, State of West Virginia on March 4, 1998.
WP STEEL VENTURE CORPORATION
By: /s/ John R. Scheessele
-------------------------------------
John R. Scheessele
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints John
R. Scheessele and Paul J. Mooney, and each of them singly, as his true and
lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him, and his name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
and supplements to this Registration Statement, and to file the same, with all
exhibits thereto, and all other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as full to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or their substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, as amended, this
Registration Statement has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ John R. Scheessele President and Chief Executive March 4, 1998
- -------------------------- Officer (Principal Executive Officer)
John R. Scheessele
/s/ Paul J. Mooney Executive Vice President and Chief March 4, 1998
- -------------------------
Paul J. Mooney Financial Officer (Principal Financial
Officer and Principal Accounting
Officer)
/s/ James E. Muldoon Director March 4, 1998
- -------------------------
James E. Muldoon
</TABLE>
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Champion Metal Products, Inc. has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Wheeling, State of West Virginia on March 4, 1998.
CHAMPION METAL PRODUCTS, INC.
By: /s/ John R. Scheessele
-------------------------------------
John R. Scheessele
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints John
R. Scheessele and Paul J. Mooney, and each of them singly, as his true and
lawful attorneys-in-fact and agents with full power of substitution and
resubstitution, for him, and his name, place and stead, in any and all
capacities to sign any and all amendments (including post-effective amendments)
and supplements to this Registration Statement, and to file the same, with all
exhibits thereto, and all other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as full to all intents and purposes as he
might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or their substitute or substitutes may lawfully do
or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, as amended, this
Registration Statement has been signed by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ John R. Scheessele President and Chief Executive March 4, 1998
- ------------------------ Officer (Principal Executive Officer)
John R. Scheessele
/s/ Paul J. Mooney Executive Vice President and Chief March 4, 1998
- ------------------------ Financial Officer (Principal Financial
Paul J. Mooney Officer and Principal Accounting
Officer)
/s/ Tom Patrick Director March 4, 1998
- -------------------------
Tom Patrick
</TABLE>
II-12
SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT
SECOND AMENDED AND RESTATED SHAREHOLDERS AGREEMENT dated as of November
12, 1990 between NISSHIN STEEL CO., LTD., a Japanese corporation ("NSK"), and
WHEELING-PITTSBURGH STEEL CORPORATION, a Delaware corporation ("W-P").
W I T N E S S E T H:
WHEREAS, NSK and W-P entered into an Amended and Restated Shareholders
Agreement dated as of December 17, 1985 (the "Prior Shareholders Agreement")
with respect to WHEELING-NISSHIN, INC., a Delaware corporation ("W-N"), which
they desire to amend and restate in its entirety as more fully set forth herein;
WHEREAS, the authorized capital stock of W-N consists of 1,000 shares
of common stock, without par value, all of which is of the same class (the
authorized capital stock of W-N from time to time, the "W-N Stock");
WHEREAS, NSK owns 670 shares of W-N Stock and W-P owns 330 shares of
W-N Stock;
WHEREAS, W-P and W-N entered into a Raw Materials Supply Agreement
dated as of March 5, 1986, which the parties hereto desire shall be amended as
set forth in Exhibit 4.8 (such amendment, the "Supply Agreement Amendment," and
such Supply Agreement, as may be amended and/ore restated from time to time, the
"Supply Agreement");
WHEREAS, W-N operates a coated steel products manufacturing facility in
Follansbee, West Virginia (the "Current Facility"),
<PAGE>
and the parties desire that W-N add a second steel coating line (the "Second
Line") at or near the Current Facility (the products to be manufactured at the
Current Facility and Second Line referred to as the "Products"); and
WHEREAS, W-P is currently a debtor-in-possession in proceedings (the
"Pending Chapter 11 Proceedings") under Chapter 11 of Title 11 of the United
States Code pending before the United States Bankruptcy Court for the Western
District of Pennsylvania (the "Bankruptcy Court");
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree to
amend and restate the Prior Shareholders Agreement to read in its entirety as
set forth in this Second Amended and Restated Shareholders Agreement:
ARTICLE I
CAPITALIZATION AND SHARE ISSUANCE
1.1. Authorized Shares. The total authorized capital stock of W-N shall
consist of 7,000 shares of common stock, without par value, all of which shall
be of the same class. NSK and W-P shall vote their shares of W-N Stock, and use
their best efforts, to amend the certificate of incorporation of W-N to provide
for such authorized shares.
1.2. Sale of Additional Shares of W-N Stock. Subject to the terms and
conditions set forth in this Agreement:
(a) On such date as the parties shall agree, but in any event not later
than January 17, 1991, (1) W-N shall sell and
-2-
<PAGE>
issue to NSK, and NSK shall purchase from W-N, 2,000 shares of W-N Stock, and
(2) W-N shall sell and issue to W-P, and W-P shall purchase from W-N, 625 shares
of W-N Stock.
(b) On such date as the parties shall agree, but in any event not later
than March 29, 1991, (1) W-N shall sell and issue to NSK, and NSK shall purchase
from W-N, 1,830 shares of W-N Stock, and (2) W-N shall sell and issue to W-P,
and W-P shall purchase from W-N, 170 shares of W-N Stock.
(c) On such date as W-P and W-N shall agree, but in any event not later
than the date which is 183 days after the second anniversary of the completion
of the Second Line, W-N shall sell and issue to W-P, and W-P shall purchase from
W-N, an aggregate of 450 shares of W-N Stock; provided, however, that such
shares may be purchased and sold in installments from time to time during such
period at such times and in such amounts as W-P and W-N may agree. For purposes
of this paragraph, "completion of the Second Line" means the occurrence of (1)
the completion of the Second Line substantially in accordance with the plans and
specifications therefor and (2) the Second Line first becoming operational, and,
as soon as practicable after such completion occurs, W-N shall notify NSK and
W-P of the date of such completion.
(d) On such date as W-P and W-N shall agree, but in any event not later
than the date which is 183 days after the second anniversary of the date by
which all 450 shares of W-N Stock were purchased by W-P pursuant to paragraph
(c) of this Section 1.2,
-3-
<PAGE>
W-N shall sell and issue to W-P, and W-P shall purchase from W-N, an aggregate
of 925 shares of W-N Stock; provided, however, that such shares may be purchased
and sold in installments from time to time during such period at such times and
in such amounts as W-P and may agree.
(e) Until the earliest of (1) the purchase by W-P of all shares of W-N
Stock to be purchased by it pursuant to this Section 1.2, (2) the date which is
183 days after the second anniversary of the date by which all 450 shares of W-N
Stock were purchased by W-P pursuant to paragraph (c) of this Section 1.2, (3)
if all such 450 shares were not purchased pursuant to such paragraph (c), the
date which is 183 days after the second anniversary of the completion of the
Second Line, (4) a determination by W-N not to proceed with the Second Line, or
(5) the termination of the provisions of this Section 1.2, W-N shall neither
declare nor pay any dividends or other distributions in respect of shares of W-N
Stock without the unanimous approval of the W-N Board of Directors.
1.3. Purchase Price. (a) Each of NSK and W-P, in consideration for the
sale of shares of W-N Stock to it pursuant to Section 1.2(a) or (b), shall pay
to W-N on the date provided therein for such sale the price of $10,000 per
share.
(b) W-P, in consideration for the sale of shares of W-N Stock to it
pursuant to Section 1.2(c) or (d), shall pay to W-N on the date provided therein
for such sale the price per share equal to the sum of (l) $10,000 and (2)
interest on such $10,000
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from the date of the sale of shares of W-N Stock pursuant to Section 1.2(b)
until the date the purchase price provided in this paragraph (b) is paid at a
rate equal to the interest rate paid by W-N from time to time during such period
on its prime borrowings. For purposes of this paragraph, W-N shall determine the
amount of such interest and, as soon as practicable prior to such a sale, W-
shall notify NSK and W-P of such amount.
1.4. Closings. (a) The sales referred to in Section 1.2 shall take
place at the offices of W-N or such other place as the parties may agree. (The
date each such sale occurs is referred to as a "Closing Date" and the
consummation of such a sale is referred to as a "Closing".)
(b) At each Closing, W-N shall deliver to the purchaser thereof a
certificate for the shares being purchased against (1) payment to W-N by such
purchaser of the price to be paid by it pursuant to Section 1.3 either by wire
transfer of immediately available funds to an account of W-N designated by it or
by certified or official bank check payable to W-N, and (2) delivery by such
purchaser (A) to the parties to this Agreement (which may be waived by NSK, if
W-P is to be such purchaser, or by W-P, if NSK is to be such purchaser) of a
certificate of such purchaser to the effect that the conditions to such purchase
provided in this Agreement have been satisfied or waived, and (B) to W-N of such
instruments or documents as W-N may have reasonably requested to permit the sale
of such shares to such purchaser without registration under applicable
securities laws; provided,
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however, that certificates for shares of W-N Stock to be issued and delivered to
W-P shall initially be delivered to and held by NSK subject to the pledge of
such shares provided in Section 1.5.
1.5. Pledge of W-N Stock. W-P hereby pledges to NSK all shares of W-N
Stock owned from time to time by W-P to secure its obligations under this
Agreement. Such pledge shall continue in effect until (a) W-P shall (1) have
assumed the full financial responsibility for the Current Facility, Second Line
and working capital of W-N provided in Sections 4.3 and 4.4 which is to be
assumed by it upon the purchase of all shares of W-N Stock to be purchased by it
pursuant to Section 1.2, (2) have performed its other obligations provided in
Sections 1.2, 1.3, 4.3, 4.4, 4.6, 4.7 and 4.8, (3) have satisfied all Full
Reimbursement Obligations (hereinafter defined), if any, and all Full Credit
Obligations (hereinafter defined), if any, and satisfied any other obligations
which it may have and which may be due or payable in respect of its financial
responsibility for the Current Facility, Second Line or working capital of W-N,
and (4) not be in default on any of its obligations to or with respect to NSK or
W-N (including without limitation the Supply Agreement) or otherwise be in
breach of any of its agreements with NSK or W-N, and (b) an order of the
Bankruptcy Court confirming a plan of reorganization pursuant to Section 1129 of
Title 11 of the United States Code, as amended, shall have been entered, and
such order shall not have been stayed, the time to appeal or seek review or
rehearing of such order shall have expired and no appeal or
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petition for review or rehearing of such order shall have been taken or be
pending. W-P shall execute and deliver such instruments and documents, and take
such other actions, as NSK may reasonably require to effect, evidence and
perfect such pledge.
1.6. Repurchase. If W-N determines not to proceed with the Second Line
at any time after shares of W-N Stock have been issued pursuant to Section 1.2,
W-N shall, promptly after such determination, repurchase such shares for an
amount as follows:
(a) In the case of such shares purchased by NSK, an amount equal to the
aggregate price paid for-such shares by NSK pursuant to Section 1.3 less 64.3%
of the aggregate expenses incurred by W-N with respect to the Second Line; and
(b) In the case of such shares purchased by W-P, an amount equal to the
aggregate price paid for such shares by W-P pursuant to Section 1.3 less 35.7%
of the aggregate expenses incurred by W-N with respect to the Second Line. If
W-N has insufficient surplus to repurchase such shares, then W-N shall, from
time to time as it has sufficient surplus to do so, effect such repurchases from
NSK and W-P pro rata in proportion to the aggregate number of shares to be
repurchased by W-N pursuant to this Section 1.6.
ARTICLE II
BOARD OF DIRECTORS
2.1. Board of Directors; Voting. NSK and W-P shall use their best
efforts to cause the Board of Directors of W-N to
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consist of six members, four of whom shall be nominees of NSK and two of whom
shall be nominees of W-P; provided, however, that at any time, NSK may propose
to increase the size of the Board of Directors so that NSK and W-P shall each be
entitled to nominate a number of directors such that the percentage of the
entire Board so nominated by it shall be approximately the same as its
percentage ownership (from time to time) of shares of W-N Stock and in such
event, NSK and W-P shall vote their shares of W-N Stock for such proposal. NSK
and W-P shall vote their shares of W-N Stock for such nominees.
ARTICLE III
TRANSFER RESTRICTIONS
3.1. General. Except as provided in this Agreement, neither NSK nor W-P
shall sell, mortgage, hypothecate, transfer, pledge, create a security interest
in or lien on, encumber, give, place in trust (voting or other) or otherwise
dispose of (collectively, to "Dispose" or a "Disposition") any W-N Stock.
3.2. Sale of W-N Shares. Neither NSK nor W-P shall Dispose of any of
its W-N Stock at any time that it has not satisfied all of its Full
Reimbursement Obligations and Full Credit Obligations or at any time that it is
in default on any of its obligations, financial or otherwise, to, or otherwise
in breach of any of its agreements with, W-P or NSK, as the case may be, or W-N.
Except as provided in Section 3.6, neither NSK nor W-P may Dispose of any W-N
Stock prior to the first shipment of Product by W-N from the Second Line.
Subject to the provisions of this Section 3.2,
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if either NSK or W-P (an "Offeror") proposes to sell some or all of its W-N
Stock (the "Offered Shares"), it shall first negotiate in good faith with the
other shareholder of W-N (an "Offeree") for such sale. If such negotiations do
not result in an agreement for the sale of such Offered Shares, then,
notwithstanding the provisions of Section 3.1, such Offeror shall have the right
to sell, transfer and assign such Offered Shares to a third person; provided,
however, that, prior to committing to sell such Offered Shares to any third
person, such Offeror shall first offer to sell, transfer and assign such Offered
Shares to such Offeree at a per share price and on such terms (such price and
terms collectively, the "Proposed Purchase Terms") as such Offeror shall specify
in such offer. (The date such offer was given to such Offeree is referred to as
the "Offer Date".) Such Offeree shall have the right to purchase all the Offered
Shares by notifying such Offeror of its acceptance of such offer within 30 days
after the Offer Date. If such Offeree shall not timely accept such offer or
shall fail to purchase such Offered Shares in accordance with such accepted
offer, such Offeror may, within 90 days thereafter (the "90-Day Period"), sell
such Offered Shares to a third person, provided that (a) the terms of such sale
shall be no more favorable to the purchaser of such Offered Shares than the
Proposed Purchase Terms, (b) not later than the third full day after such sale,
such Offeror shall notify such Offeree and W-N of the final terms of such sale,
and (c) such purchaser shall have complied with Section 3.3. Such Offered
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Shares not sold within such 90-Day Period shall thereafter again be subject to
this Section 3.2.
3.3. Agreement Required. The provisions of this Article III shall apply
to any person who acquires any shares of W-N Stock from either NSK or W-P (an
"Acquiring Person"). It shall be a condition of NSK's or W-P's Disposition of
any shares of W-N Stock to an Acquiring Person that such Person shall have
delivered to W-N and the Offeree an agreement, in form and substance reasonably
satisfactory to W-N and the Offeree, (a) assuming (in proportion to the number
of shares of W-N Stock acquired by such Acquiring Person from the Offeror) all
obligations of the Offeror under this Agreement other than those provided in
Sections 4.3(b), 4.5, 4.6, 4.8, 4.10 and 4.11, (b) agreeing to abide by the
applicable provisions of this Agreement including, without limitation, this
Article III, and (c) further agreeing, for purposes of Article II only, to vote
the shares of W-N Stock acquired by it as such shares would have been voted by
the Offeror had such Disposition not occurred. In connection with such a
Disposition, such Offeror shall cause such number of directors of W-N as were
nominated by it to resign from such office in order to permit the fulfillment of
the provisions of Article II and this Section 3.3.
3.4. Certain Events. (a) Subject to the provisions of Section 3.4(c),
in the event (1) either NSK or W-P shall (A) voluntarily commence any proceeding
or file any petition seeking relief under title 11 of the United States Code or
any other
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Federal, state or foreign bankruptcy, insolvency or similar law, (B) consent to
the institution of, or fail to controvert in a timely and appropriate manner,
any such previous filing of any such petition, (C) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator or similar official
for itself or for a substantial part of its property, (D) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (E) make a general assignment for the benefit of creditors, (F)
apply for or consent to its winding-up or liquidation, or (G) take corporate
action for the purpose of effecting any of the foregoing; or (2) an involuntary
proceeding results in the ordering of (A) relief in respect of such party, or of
a substantial part of its property, under title 11 of the United States Code or
any other Federal, state or foreign bankruptcy, insolvency or similar law, (B)
the appointment of a receiver, trustee, custodian, sequestrator or similar
official for such party or for a substantial part of its property, or (C) the
winding-up or liquidation of such party, (each of the foregoing events being
referred to as an "Event of Bankruptcy" and the party with respect to which the
event occurred being referred to as the "Bankrupt Party"), the other shareholder
of W-N ("Other Party") shall thereupon have the right, exercisable at any time
by giving notice thereof (the "Determination Notice") to the Bankrupt Party by
personal delivery prior to 180 days after the last to occur of such Event of
Bankruptcy or the giving of notice thereof by the Bankrupt
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Party, to cause the Fair Value of the Bankrupt Party's shares of W-N Stock and
rights to purchase shares of W-N Stock as set forth in Section 1.2 (to the
extent any of such shares have not been purchased by such Bankrupt Party or such
rights have not been terminated) to be determined as provided in Section 3.5 as
of the time such Determination Notice is given. Upon such determination, without
limitation of any other rights or remedies which may be available to the Other
Party under this Agreement or otherwise upon the occurrence of such Event of
Bankruptcy, the Other Party shall have the right and option to purchase for cash
all (but not less than all) of the shares of W-N Stock, and outstanding rights,
if any, to purchase shares of W-N Stock pursuant to Section 1.2, of the Bankrupt
Party as of the time such Determination Notice was given for a purchase price
equal to such Fair Value by giving notice (the "Purchase Notice") to the
Bankrupt Party within 30 days following such determination of Fair Value.
(b) If the Other Party elects to exercise the right and option provided
for in paragraph (a) of this Section 3.4, the Other Party shall pay to the
Bankrupt Party the full purchase price by wire transfer of immediately available
funds or by certified or official bank check against delivery of the Bankrupt
Party's W-N Stock at the office of W-N on a date not later than 60 days
following the date of the Purchase Notice.
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(c) No event occurring prior to the date of this Agreement shall be
deemed an Event of Bankruptcy for the purposes of this Agreement.
(d) Without limiting the generality of the foregoing provisions of this
Section 3.4, the appointment of a trustee in the Pending Chapter 11 Proceedings
or the conversion of the Pending Chapter 11 Proceedings to proceedings under
chapter 7 of title 11 of the United States Code or the commencement of the
liquidation of the debtor estate within the Pending Chapter 11 Proceedings shall
constitute an Event of Bankruptcy for the purposes of this Agreement.
3.5. Definition and Determination of "Fair Value". For purposes of this
Agreement, the "Fair Value" of the W-N Stock (and, if applicable, outstanding
rights, if any, to purchase W-N Stock pursuant to Section 1.2) at any time shall
mean the actual value of such Stock (and rights) at such time. The Fair Value of
such W-N Stock (and rights), to the extent possible, shall be determined by the
agreement of NSK and W-P. In the event that NSK and W-P shall not agree as to
the Fair Value of such W-N Stock (and rights) within 30 days after a request for
such determination has been made, NSK and W-P shall appoint an independent
appraiser to make such determination. The appraiser shall have full and complete
access to all financial statements, records, books of account and other
information of W-N material to its determination. The appraiser's determination
shall be binding upon the parties.
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3.6. Permitted Dispositions. Subject to Section 3.3, but
notwithstanding any other provision of this Agreement, (a) NSK shall be entitled
to Dispose of any and all of its W-N Stock, at any time or from time to time, to
(1) any subsidiary of NSK, (2) any Japanese trading company, or any subsidiary
of any such trading company, and (3) any corporation jointly owned by NSK and
any such trading company, provided, however, that a Disposition pursuant to such
clause (2) or (3) shall not be permitted to the extent that such Disposition
would reduce the number of shares of W-N Stock directly or indirectly owned by
NSK and any of its subsidiaries to less than 25% of the total amount of W-N
Stock outstanding at the time of such Disposition, and (b) W-P shall be entitled
to Dispose of any and all of its W-N Stock, at any time or from time to time, to
any subsidiary or any parent of W-P. Any of the foregoing persons to whom W-N
Stock has been Disposed shall have the right at any time or from time to time to
Dispose of any and all of its W-N Stock, in the case of a person referred to in
clause (a) of this Section 3.6 to any other person referred to therein, and in
the case of a person referred to in clause (b) of this Section 3.6 to any person
referred to therein, by complying with Section 3.3. For the purposes of this
Agreement, a subsidiary of a specified corporation is a corporation 80% or more
of the common voting stock of which is directly owned by such specified
corporation or by one or more subsidiaries thereof, and a parent of a specified
corporation is a corporation
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which directly owns more than 80% of the common voting stock of such specified
corporation.
ARTICLE IV
COVENANTS
4.1. Preservation of Corporate Existence and Compliance with Laws and
Regulations. NSK and W-P shall cause to be done all things necessary to
preserve, renew and keep in full force and effect and good standing the
corporate existence, rights, licenses, permits and franchises of W-N, and shall
cause W-N to comply in all material respects with all applicable laws and
regulations.
4.2. Separate Business of Venture. NSK and W-P shall cause W-N to
conduct its business and carry on its operations in accordance with operating
standards determined from time to time by its Board of Directors, such business
activities and operations to be conducted, except as may otherwise be provided
in this Agreement, independent of and separate from the business activities and
operations of NSK and W-P. Nothing contained in this Agreement shall prohibit or
restrict the parties from engaging in any independent business activity,
including activities in competition with those of any other party.
4.3. Financing of Current Facility and Second Line. (a) The parties
shall use their best efforts to cause the Second Line to be financed as follows:
(1) $38,300,000 from the sale of 3,830 shares of W-N Stock to NSK as provided in
Section 1.2(a) and (b), (2) $7,950,000 from the sale of 795 shares of W-N Stock
to W-P as
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provided in Section 1.2(a) and (b), and (3) the balance from the most desirable
form of financing available. NSK and W-P agree to bear responsibility for the
financing (other than equity contributions) of the Current Facility and Second
Line in proportion to their respective percentage ownership of W-N Stock from
time to time. If guarantees or other security or commitments have been or are
required to obtain or maintain such financing, NSK shall attempt to provide such
guarantees or other security or commitments. W-P hereby pledges its continuing
undertaking to provide NSK with W-P's guarantee of a fluctuating percentage,
which shall be equal to W-P's percentage ownership of W-N Stock from time to
time, of the guarantees or other security or commitments that have been or may
be required to obtain or maintain such financing. At the request of NSK, W-P
shall use its best efforts to assume directly such financial responsibility
proportionate to its percentage ownership of W-N Stock (from time to time) in a
manner which is satisfactory to any lender or provider of financing to W-N and
is reasonably satisfactory to NSK. In the event that NSK is called upon to make
a payment pursuant to any such guarantee, security or commitment prior to the
direct assumption and performance of the full financial responsibility by W-P
for the Current Facility and Second Line which is to be assumed by W-P upon the
purchase of all shares of W-N Stock to be purchased by it pursuant to Section
1.2, W-P shall be obligated to reimburse NSK for that percentage of such payment
equal to W-P's percentage ownership of W-N Stock at the
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time W-P shall make such reimbursement plus interest thereon calculated at the
prime interest rate as announced by Citibank, N.A. from time to time during the
period commencing upon the date on which NSK became obligated to make such
payment and concluding upon the date on which W-P satisfies its obligation to
make such reimbursement: provided, however, that if from time to time thereafter
W-P proposes to purchase additional shares of W-N Stock pursuant to Section 1.2,
then, as a condition, and at the time, of each such purchase, W-P shall
reimburse NSK in an amount equal to the excess of (l) that percentage of such
payment made by NSK equal to the percentage of W-N Stock W-P will own upon such
purchase over (2) the principal amounts of reimbursement theretofore paid by W-P
to NSK pursuant to this paragraph in respect of such payment made by NSK, plus
interest on such excess calculated at the prime interest rate as announced by
Citibank, N.A. from time to time during the period commencing upon the date on
which NSK became obligated to make such payment and concluding upon the date on
which W-P satisfies its obligation to pay such excess. (At any time, such
aggregate reimbursement obligation and the interest thereon are referred to as
the "Reimbursement Obligation". Such aggregate reimbursement and interest
thereon which W-P would be obligated to pay upon the purchase by it of all
shares of W-N Stock to be purchased by it pursuant to Section 1.2 are referred
to as the "Full Reimbursement Obligation".) Any payment made by W-N to NSK (a
"Repayment") with respect to any such amounts paid by NSK pursuant to such
guarantee, security or
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commitment shall reduce the principal amount of W-P's Reimbursement Obligation
by an amount equal to the amount of such Repayment multiplied by W-P's
percentage ownership of W-N Stock (as of the time such payment was made by W-N).
NSK shall have the right to receive a lien on the assets of W-N securing an
amount equal to any such payment made by NSK. At such time as W-P shall have
satisfied its Reimbursement Obligation, it shall have the right to share such
lien with NSK to secure an amount equal to W-P's payment of the principal amount
only of the Reimbursement Obligation.
(b) If it is determined that a portion of the financing of the Second
Line should include financing provided by the U.S. Department of Housing and
Urban Development ("HUD Financing"), then W-P shall use its best efforts to
obtain such HUD Financing on behalf of W-N.
4.4. Working Capital. (a) NSK and W-P shall arrange to obtain a
revolving line of credit for W-N in the initial amount of approximately
$15,000,000 to be secured by the accounts receivable and inventories of W-N. In
the event that the working capital of W-N, including the revolving line of
credit at the amount initially proposed, is insufficient to satisfy W-N's
working capital requirements, NSK and W-P shall use their best efforts to
increase the amount of the revolving line of credit to the extent necessary to
provide adequate working capital, and if, despite the best efforts of NSK and
W-P, such line of credit cannot be increased to an extent sufficient to
eliminate working
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capital deficiencies, then NSK and W-P shall provide W-N with (A) raw materials
on consignment, extended payment terms, or other terms that will defer payment
of raw materials until they have been processed into finished goods and sold
(collectively, "Credit Terms"), (B) cash loans or (C) additional capital
contributions; provided, however, that such Credit Terms, cash loans or
additional capital contributions shall be made by NSK and W-P in proportion to
their respective percentage ownership of W-N Stock from time to time.
Notwithstanding any other provision of this paragraph (a), until such time as
W-P shall have purchased all 450 shares of W-N Stock pursuant to Section 1.2(c),
W-P shall continue to supply W-N's requirements for raw materials pursuant to
the Supply Agreement on Credit Terms which are no less favorable than those
provided prior to the date of this Agreement.
(b) In the event that Credit Terms, cash loans or additional capital
contributions are required and one of the parties (the "Non-Advancing Party") is
unable to provide its share of the Credit Terms, cash loans or additional
capital contributions as provided in paragraph (a) of this Section 4.4, the
other party (the "Advancing Party") may, at its option, provide the required
Credit Terms, cash loans or additional capital contributions on behalf of the
Non-Advancing Party. In such event, the Non-Advancing Party shall be obligated
to reimburse the Advancing Party for that percentage of the aggregate amount so
advanced by the Advancing Party (for itself and the Non-Advancing Party)
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equal to the Non-Advancing Party's percentage ownership of W-N Stock at the time
the Non-Advancing Party shall make such reimbursement plus interest thereon,
calculated at the prime interest rate as announced by Citibank, N.A. from time
to time; provided, however, that if from time to time thereafter the
Non-Advancing Party proposes to purchase additional shares of W-N Stock pursuant
to Section 1.2, then, as a condition, and at the time, of each such purchase,
the Non-Advancing Party shall reimburse the Advancing Party in an amount equal
to the excess of (1) that percentage of such amount so advanced by the Advancing
Party equal to the percentage of W-N Stock the Non-Advancing Party will own upon
such purchase over (2) the principal amounts of reimbursement theretofore paid
by the Non-Advancing Party to the Advancing Party pursuant to this paragraph in
respect of such advance made by the Advancing Party, plus interest on such
excess calculated at the prime interest rate as announced by Citibank, N.A. from
time to time during the period commencing upon the date on which the Advancing
Party made such advance and concluding upon the date on which the Non-Advancing
Party satisfies its obligation to pay such excess. (At any time, such aggregate
reimbursement obligation and the interest thereon are referred to as the "Credit
Obligation". Such aggregate reimbursement and interest thereon which the
Non-Advancing Party would be obligated to pay upon the purchase by it of all
shares of W-N Stock to be purchased by it pursuant to Section 1.2 are referred
to as the "Full Credit Obligation".) The Non-Advancing Party shall provide
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to the Advancing Party, to secure the Full Credit Obligation, a lien on the W-N
Stock owned by the Non-Advancing Party (the "Collateral"). When the
Non-Advancing Party satisfies the Full Credit Obligation, the Collateral shall
be released to the Non-Advancing Party, except as may be otherwise required by
the pledge referred to in Section 1.5. If the Non-Advancing Party has not
satisfied the Full Credit Obligation within one year from the date of the
Advancing Party's provision of the Credit Terms, cash loans or additional
capital contributions, such failure shall, at the election of the Advancing
Party, be deemed a breach of this Agreement and the Advancing Party may, without
limitation of any other remedies available to it under this Agreement or
otherwise upon a default under or breach of this Agreement by the Non-Advancing
Party and whether or not the Advancing Party has elected to treat such failure
as a breach, proceed against the Collateral to satisfy the Full Credit
Obligation. If the amount of the Full Credit Obligation exceeds the amount
realized by the Advancing Party as a result of such proceeding against the
Collateral, the Non-Advancing Party shall remain obligated for the balance of
the Full Credit Obligation. If the amount of the Full Credit Obligation is less
than the amount realized by the Advancing Party as a result of such proceeding
against the Collateral, the Advancing Party shall pay the difference to the
Non-Advancing Party.
4.5. Governmental Incentives. W-P shall use its best efforts to provide
W-N with assistance in obtaining favorable
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treatment from federal, state or local agencies including, without limitation,
favorable tax treatment and training grants.
4.6. W-P Plant Upgrade. W-P shall make the improvements to its
facilities described in Exhibit 4.6 in accordance with the schedule therefor set
forth in such Exhibit 4.6. W-P shall maintain its facilities in sufficient
operating condition to be able to perform its obligations under the Supply
Agreement.
4.7. Marketing. W-P shall enter into an agreement with W-N to market a
percentage of the Products based on the framework described in Exhibit 4.7. Such
marketing agreement shall consist of a toll-coating program and a purchase and
resale program for the distribution of the Products. Such agreement shall
terminate if at any time W-P and its subsidiaries and parent, if any, in the
aggregate own less than 20% of the outstanding shares of W-N Stock.
4.8. Raw Materials. W-P shall enter into the Supply Agreement Amendment
with W-N, and shall perform its obligations under the Supply Agreement.
4.9. Technology and Engineering. (a) The parties acknowledge that NSK
and W-N have entered into an agreement pursuant to which NSK provides or makes
available to W-N patented technology and technical know-how in the production of
aluminized coated steel products, makes its engineers available for consultation
with W-N personnel and provides a training program in Japan for W-N personnel.
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(b) NSK (in addition to the agreement described in paragraph (a) of
this Section 4.9), for consideration to be determined in the future on the
equivalent of an arms' length basis, will enter into agreements pursuant to
which NSK will provide design, engineering and consulting services to W-N in
connection with the construction, installation and start up of the Second Line.
4.10. Temper Rolling and Shipping. W-P, for consideration to be
determined in the future, shall provide services to temper roll and ship
portions of the Products as requested by W-N.
4.11. General and Administrative Services. When requested by W-N, W-P
shall provide to W-N certain services which shall include, but not be limited
to: (a) consultations regarding labor relations, including the negotiation of
labor agreements and the settlement of labor disputes, (b) consultations
regarding selection, training and coordination of the work of employees and (c)
making recommendations with respect to and supervising consultants, agents,
representatives and contractors.
4.12. Confidentiality. Each of the parties hereby covenants and agrees
(a) not to disclose, except as required by law, regulation or legal process or
in accordance with any future agreements made by it with the other parties
respecting such disclosures, to any person other than the parties, any
information acquired by it in its dealings with the other parties, and (b) to
exercise due care when exchanging or in any way transferring information
proprietary to any party. Each of NSK and W-P also shall cause its directors and
officers appointed
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by it to serve W-N to treat all proprietary information of any party with the
utmost care and, except as required by law, regulation or legal process,
confidentiality. In furtherance of the foregoing, if any party or such a
director or officer (any of the foregoing, a "Disclosing Person") is requested
pursuant to, or required by, law, regulation or legal process to disclose any
such confidential information, such Disclosing Person shall provide prompt
notice to W-N and the other parties of each such request or requirement to
enable any of them to seek an appropriate protective order or to secure or
effect another reasonable remedy or means to protect the confidentiality of such
information, and such Disclosing Person shall comply with such order, remedy or
means. If such protective order or other remedy or means is not obtained,
secured or effected, such Disclosing Person shall furnish only that portion of
the confidential information which, in the opinion of counsel, it is legally
compelled to disclose and shall use its best efforts to obtain assurances that,
if possible, confidential treatment will be accorded such information. In
recognition of the importance of the confidentiality agreement contained in this
Section 4.12, each party shall have the right to enforce its rights under this
Section 4.12 by means of an action for injunctive relief and for specific
performance as well as to pursue any other remedy or remedies available to it in
any action at law or at equity.
4.13. Responsibility of Parties. The parties shall cooperate in
effectuating the purposes of this Agreement and in
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<PAGE>
supporting the operations and activities of W-N as contemplated in :his
Agreement. The parties shall also negotiate the specific provisions of the
various agreements to be entered into as provided in Article IV expeditiously
and in good faith, it being understood that the provisions of Article IV set
forth only the principal substantive provisions of such agreements.
4.14. Additional Obligations of W-P. Without imitation of any earlier
date provided in this Agreement for the performance thereof, as of each Closing,
W-P shall satisfy all of its Reimbursement and Credit Obligations, if any, then
outstanding and satisfy all of its other obligations, if any, to be performed at
or prior to such Closing pursuant to this Agreement or any of its other
agreements which it may have entered into with NSK or W-N.
4.15. Collateral. W-P shall supply such collateral as all be mutually
satisfactory to NSK and W-P (in addition to that otherwise contemplated by this
Agreement or the Supply Agreement) secure the performance of W-P's obligations
under this Agreement and the Supply Agreement.
ARTICLE V
MISCELLANEOUS
5.1. Stock Certificate Legend. All certificates representing shares of
W-N Stock shall have endorsed upon them a legend substantially as follows:
"The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended, or under any state
securities law, and may not be sold or otherwise transferred in the
absence of such registration or
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<PAGE>
an exemption therefrom under such Act or applicable state law. Further,
such shares may be sold or otherwise transferred only in compliance
with the conditions specified in an Agreement dated as of November 12,
1990 between Nisshin Steel Co., Ltd. and Wheeling-Pittsburgh Steel
Corporation, a complete and correct copy of which is available for
inspection at the principal office of the Corporation."
5.2. Remedies. If W-P shall default in any of its obligations under, or
otherwise be in breach of, this Agreement or the Supply Agreement, NSK may
enforce the pledge of W-N shares referred to in Section 1.5, exercise its
remedies with respect to other collateral provided by W-P pursuant to Sections
4.4 and 4.15, obtain specific performance or an injunction, obtain damages and
exercise any other remedies available to it pursuant to this Agreement or
otherwise. In addition, (a) the provisions of Section 1.2, to the extent any
shares of W-N Stock have not theretofore been purchased as provided therein,
shall terminate, (b) NSK shall have the right either to buy and W-P shall sell
to NSK or to such other party as shall have been designated by NSK all of the
W-N shares owned by W-P, or to sell to W-P and W-P shall buy from NSK all of the
W-N shares owned by NSK, at their Fair Value (as defined in Section 3.5), and
(c) if W-P's default or breach shall be with respect to any of its obligations
provided in Section 1.2, W-N shall have the right to modify or terminate, in
whole or in part, the Supply Agreement and/or any marketing agreement it may
have with W-P. The rights and remedies provided by this Agreement are cumulative
and the use of any one right or remedy by any party shall not preclude or waive
its right to use any or all other remedies. Such rights and remedies
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<PAGE>
are given in addition to any other rights and remedies such party may have by
law, statute, ordinance or otherwise.
5.3. Notices. All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been given upon acknowledgment
of receipt of transmission by telex, telegram or other means of electronic
communication, or ten days following first class certified airmail posting,
addressed (a) if to NSK, at 4-1 Marunouchi 3-chome, Chiyoda-ku, Tokyo, Japan,
Attention: General Manager, Overseas Project Department, with a copy to Webster
& Sheffield, 237 Park Avenue, New York, New York 10017, Attention: Mark A.
Rosenbaum, Esq., or to such other persons or addresses as NSK shall have
furnished to W-P and W-N in writing, (b) if to W-P, at 1134 Market Street,
Wheeling, West Virginia 26003, Attention: Chief Executive Officer, or to such
other persons or addresses as W-P shall have furnished to NSK and W-N in
writing, and (c) if to W-N, at Penn and Main Streets, Follansbee, West Virginia
26037, Attention: Chief Executive Officer, or to such other persons or addresses
as W-N shall have furnished to NSK or W-P.
5.4. Prior Agreements; Construction; Entire Agreement. This Agreement
constitutes the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior agreements and understandings among them
as to such subject matter. Notwithstanding the preceding sentence, it is the
intention of the parties that certain matters referenced in this Agreement shall
be the subject of further negotiation and
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<PAGE>
specification and shall be recorded in subsequent written agreements. The
headings contained in this Agreement are for convenience only and shall not in
any way affect the meaning or interpretation of any term or provision of this
Agreement. References to Articles, Sections and Exhibits in this Agreement are
to Articles and Sections of this Agreement and to Exhibits attached to this
Agreement. The Exhibits are part of this Agreement. Unless the context otherwise
requires, references to "parties" in this Agreement are to the parties to this
Agreement. In this Agreement, to the extent the context requires, the use of any
personal pronoun, whether used in the masculine, feminine or neuter gender,
includes all other genders. The word "person" as used in this Agreement
includes, without limitation, an individual, corporation, partnership, trust,
association, business, firm or other entity.
5.5. Waivers and Further Agreements. The waiver of any term or
condition of this Agreement or default or breach thereof shall not operate as a
waiver of such term or condition except to the extent provided in such waiver or
of any other term, condition, default or breach of this Agreement, nor shall any
failure to enforce any provision hereof operate as a waiver of such provision or
of any other provision hereof.
5.6. Amendments. This Agreement may not be amended nor shall any
waiver, change, modification, consent or discharge be effected except by an
instrument in writing executed by and on
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<PAGE>
behalf of the party against whom enforcement of any amendment, waiver, change,
modification, consent or discharge is sought.
5.7. Assignment; Successors and Assigns. Each party enters into this
Agreement in reliance upon each other party's specific personal qualities
including ability, skill, trust, experience, character and judgment, and no
party shall assign (except in connection with a permitted Disposition of W-N
Stock), mortgage or pledge this Agreement or any of the rights or obligations
contained in this Agreement. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns.
5.8. Severability. If any provision of this Agreement shall be held or
deemed to be invalid, such circumstance shall not have the effect of rendering
any other provision or provisions herein contained invalid, inoperative or
unenforceable, but this Agreement shall be construed as if such invalid,
inoperative or unenforceable provision had never been contained herein so as to
give full force and effect to the remaining such terms and provisions.
5.9. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.10. Governing Law. This Agreement shall be governed by and construed,
interpreted and enforced in accordance with the
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<PAGE>
law of the State of New York without regard to the law of the conflicts of law
of said state.
5.11. No Rights of Third Parties. This Agreement sets forth the
relationship between the parties, and shall not confer any rights or privileges
on any third parties.
5.12. Costs Incurred. All administrative costs and expenses, including
legal fees and out-of-pocket expenses, incurred by each party with respect to
this Agreement shall be for the sole account of such party, it being the desire
and intention of each party not to seek any reimbursement of any such costs and
expenses incurred by it.
5.13. Certain Regulatory Matters. Each of the parties shall use its
best efforts to obtain all governmental approvals in the United States and Japan
required for the consummation of the transactions contemplated by this
Agreement.
5.14. Books and Records. Each of NSK and W-P, upon reasonable notice to
W-N, shall have access to the books and records of W-N, with reasonable
frequency, for the purpose of examination and inspection during normal business
hours at the offices where such books and records are maintained.
5.15. Further Assurances. At any time and from time to time, each
party, without further consideration, shall cooperate, take such further action
and execute and deliver such further instruments and documents as may be
reasonably requested by any other party in order to carry out the provisions and
purposes of this Agreement.
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<PAGE>
5.16. Conditions Precedent. Notwithstanding any other provision of this
Agreement, the obligations of the parties hereunder, including, without
limitation, their obligation to sell or purchase shares of W-N Stock pursuant to
Section 1.2, and the obligations of any party under any agreement which may be
entered into with any other party pursuant to or in connection with this
Agreement, (a) shall be subject to the occurrence prior to January 17, 1991 of
W-P's obtaining from the Bankruptcy Court, to the extent deemed necessary by NSK
or W-P, approval of, and authorization to enter into and perform, this Agreement
and such other agreements, and (b) shall be subject to the occurrence prior to
January 17, 1991 of (1) the obtaining of all governmental approvals in the
United Sates and Japan required for the parties to enter into this Agreement and
such other agreements and to fulfill their obligations hereunder and thereunder,
and (2) the execution and delivery of all the agreements to be entered into
Between or among any of the parties pursuant to or in connection with this
Agreement. In the event the conditions precedent set forth in this Section 5.16
shall not have been timely satisfied, any party may terminate this Agreement by
notice to each other party whereupon there shall be no further liability
hereunder of ny party to the other parties.
5.17. Termination of Agreement. This Agreement shall terminate upon the
occurrence of any of the following events:
(a) Complete liquidation or dissolution of W-N; (b) Agreement of NSK
and W-P to terminate this Agreement; or
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(c) W-N's having only one shareholder (whether as a result of the
operation of any of the provisions of this Agreement or otherwise).
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
NISSHIN STEEL CO., LTD.
Attest: By:__________________________________
Name:
Title:
WHEELING-PITTSBURGH STEEL
CORPORATION
Attest: By:___________________________________
Name:
Title:
The undersigned agrees to be
bound by or comply with
Sections 1.2, 1.3, 1.4, 1.6,
3.5, 4.3, 4.7, 4.8, 4.12 and
4.13 and Article V of this
Agreement:
WHEELING-NISSHIN, INC.
By:________________________________ Attest:____________________________
Name: Michio Kubota
Title: Chairman of the Board
and Chief Executive Officer
By:__________________________________
Name: John E. Wright, III
Title: President and Chief
Operating Officer
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CLOSE CORPORATION AND SHAREHOLDERS' AGREEMENT
This Close Corporation and Shareholder's Agreement (the
"Agreement") made to be effective as of the 24th day of March, 1994, by and
among Dong Yang Tinplate America Corp. ("Dong Yang America"), a California
corporation, Wheeling-Pittsburgh Corporation ("Wheeling-Pittsburgh"), a Delaware
corporation, Nittetsu Shoji America, Inc. ("Nittetsu"), a California
corporation, and Ohio Coatings Company ("Coating Company"), an Ohio corporation.
RECITALS:
(A) The Shareholders own all 100% of the issued and
outstanding Common and Preferred Shares of the Coating Company and are its only
Shareholders. Dong Yang America owns 600 shares of common, Wheeling-Pittsburgh
owns 600 shares of common and Nittetsu owns 300 preferred shares.
(B) The Shareholders desire to enter into an agreement
regulating certain aspects of (i) the internal affairs of the Coating Company,
(ii) the operations of the Coating Company and (iii) the relations among the
Shareholders, directors and officers of the Coating Company and each other
person who may thereafter become the holder of Shares of the Coating Company.
(C) The Shareholders and the Coating Company further desire to
enter into an agreement in respect of the issuance, sale, transfer,
distribution, encumbrance or other distribution of Shares of the Coating
Company.
<PAGE>
NOW, THEREFORE, in consideration of the premises and of their
mutual covenants set forth hereinafter, and subject to the fulfillment of the
remaining terms and conditions precedent set forth in the Letter of Intent dated
June 21, 1994, the parties hereto make the following agreement, intending to be
legally bound thereby.
ARTICLE ONE
Definitions
Section 1.01. Defined Terms. Each term with the initial letter
capitalized in this Agreement shall have the meaning specified herein, when used
in this Agreement, including the exhibits and schedules hereto.
Section 1.02. Articles. "Articles" means the Articles of
Incorporation of the Coating Company as in effect from time to time.
Section 1.03. Change in Control. "Change in Control" means,
with respect to Wheeling-Pittsburgh, the transfer to persons other than a
holding company of a majority of the capital stock of Wheeling-Pittsburgh Steel
Corporation or any transfer of substantially all of the assets of
Wheeling-Pittsburgh Steel Corporation, and means, with respect to Dong Yang
America or its parent, Dong Yang Tinplate Ind. Co., Ltd. ("Dong Yang"), the
transfer to persons who are not immediate members of the Sohn family of a
majority of the capital stock of Dong Yang, any transfer of substantially all of
the assets of Dong Yang, or a change in ownership of Dong Yang America.
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Section 1.04. Code of Regulations. "Regulations" means the
Code of Regulations of the Coating Company as in effect from time to time.
Section 1.05. Impasse. "Impasse" means the inability of Dong
Yang America and Wheeling-Pittsburgh to agree on a Major Corporate Decision as
contemplated by Section 3.05(C) after the procedures set forth in this Section
1.05 have been exhausted:
A. If Wheeling-Pittsburgh and Dong Yang America disagree on a
Major Corporate Decision in the Coating Company's business, either may give
notice to the other that it believes that an Impasse is possible, whereupon
Wheeling-Pittsburgh and Dong Yang shall through their designees negotiate in
good faith, for a period of thirty (30) days from the date such notice was
given, a resolution of their disagreement.
B. If the disagreement has not been resolved within such
thirty (30) day period, then either:
(1) Wheeling-Pittsburgh and Dong Yang America shall
agree to defer the decision giving rise to the disagreement for a fixed period
of time and extend (if necessary) the Raw Materials Supply Agreement or other
long term agreements in which event no Impasse shall be deemed to have occurred;
or
(2) Wheeling-Pittsburgh and Dong Yang America shall
select an independent mediator and attempt to resolve the disagreement through
mediation. If the disagreement has not been resolved within seventy-five (75)
days after notice was given under Section 1.05(A), an Impasse shall be deemed to
have occurred.
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<PAGE>
Section 1.06. Fair Market Value. "Fair Market Value" means a
value or price negotiated at arm's length between the affected parties. If the
parties cannot agree on a Fair Market Value for purposes of Sections 6.02 and
6.03, then it shall be determined by a certified appraiser selected by the
parties and, if the parties cannot agree, then by the Arbitrator.
Section 1.07. Shareholder. "Shareholder" means Dong Yang
America, Nittetsu and Wheeling-Pittsburgh, or their successors or assigns, but
excludes a purported transferee of any Shares of the Coating Company pursuant to
any transaction that contravenes the terms and conditions of this Agreement and
"Shareholders" means more than one Shareholder.
Section 1.08. Share. "Share" means any share of any class of
shares of the Coating Company.
Section 1.09. Common Share. "Common Share" means any of the
common Shares of the Coating Company.
Section 1.10. Preferred Share. "Preferred Share" means any
share of the non-voting (cumulative) preferred shares of the Coating Company.
Section 1.11. Substrate. "Substrate" shall mean the black
plate or cold rolled steel coils which will be converted to tin mill product by
the Coating Company.
Section 1.12. Toll Processing. "Toll Processing" means the
process of coating steel or other metal coils of another for a service charge.
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Section 1.13. Raw Materials Supply Agreement. "Raw Materials
Supply Agreement" refers to a long term agreement by the Coating Company to
purchase a substantial amount of its substrate requirements from
Wheeling-Pittsburgh Steel Corporation.
Section 1.14. Start-Up Date. The Start-Up Date shall mean the
date on which the line is first in service, producing commercially acceptable
product.
Section 1.15. Wheeling-Pittsburgh. "Wheeling-Pittsburgh"
means Wheeling-Pittsburgh Corporation, its subsidiaries, affiliates
and related entities.
Section 1.16. Out-of-Pocket Expenses. For purposes of Section
4.04, the term "Out-of-Pocket Expenses" shall mean the ordinary and necessary
business expenses incurred by personnel incident to their performance of
services, but shall not include normal living expenses.
ARTICLE TWO
Close Corporation Agreement
Section 2.01. Close Corporation Agreement. This Agreement is
to be a close corporation instrument governed by Section 1701.591 of the Ohio
Revised Code, and is a close corporation agreement as that term is defined in
Section 1701.01(X) of the Ohio Revised Code. This Agreement shall regulate
aspects of the internal affairs of the Coating Company and the relations of the
Shareholders, Directors and Officers of the Coating Company between themselves
to the extent set forth herein and, if the Articles or Regulations of Coating
Company shall be inconsistent
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<PAGE>
with this Agreement, such inconsistent provision of the Articles and the
Regulations shall be suspended during the term of this Agreement and the
provisions of this Agreement shall be controlling. To the extent not
inconsistent with the provisions of this Agreement, the Articles and Regulations
of the Coating Company, as amended from time to time, shall regulate aspects of
the internal affairs of the Coating Company and the relations of the
Shareholders and Directors of the Coating Company among themselves.
ARTICLE THREE
Corporate Governance
Section 3.01. Shareholders' Authority. The Shareholders and
the Coating Company agree that there shall be one (1) regular meeting of the
Shareholders of the Coating Company to be held within three (3) months of the
end of the Coating Company's fiscal year. The parties to this Agreement agree to
hold other Shareholders meetings only when requested in writing by one of the
Common Shareholders or only when required by the Ohio Revised Code.
Section 3.02. Directors' Authority. The parties agree that
there shall be two (2) regular meetings of the board of directors ("Board") of
the Coating Company held semi-annually. Other meetings shall be held only upon
the written request of four or more directors ("Directors") of the Coating
Company. All actions of the Board shall require the affirmative vote of five (5)
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members in order for the action to be effective. The Directors of the Coating
Company shall exercise the authority of Coating Company as provided in the Ohio
Revised Code, subject to the terms and conditions of this Agreement, including,
but not limited to, the requirement that all actions require five (5)
affirmative votes of the members of the Board.
If any action proposed by any member of the Board concerning
the operations of the Coating Company, other than the Major Corporate Decisions
described in Section 3.05(C) hereof, does not receive five (5) affirmative
votes, any four (4) directors may request arbitration of this action as provided
in Section 11.16 hereof.
Section 3.03. Election and Number of Directors. The Board of
the Coating Company shall be comprised of eight (8) Directors. No action shall
be taken by the Board of the Coating Company except at a meeting of the
Directors at which a quorum of the Directors are present, or, alternatively,
pursuant to a unanimous action in writing as provided in the Ohio Revised Code.
Dong Yang America shall have the right to elect four (4) Directors of the
Coating Company and Wheeling-Pittsburgh shall have the right to elect four (4)
Directors of the Coating Company. Any Director appointed or selected by a
Shareholder(s) may be removed by that Shareholder at any time with or without
cause. Any vacancy on the Board shall be filled within thirty (30) days after it
occurs, by the Shareholder(s) who originally designated the Director whose seat
on the Board is vacant.
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<PAGE>
Section 3.04. Selection of Officers and Authority of Officers.
Notwithstanding any provision of the Ohio Revised Code to the contrary, the
officers of the Coating Company and their duties, responsibilities and authority
shall be as follows:
A. The Chairman of the Board shall be elected by Dong
Yang America and shall chair the meetings of the
Board.
B. The President and Chief Executive Officer shall be
elected by Wheeling-Pittsburgh and shall have the
authority to conduct the day-to-day operations of the
business as is consistent with the normal authority
of a President of a corporation.
C. An Executive Vice President elected by Dong Yang
America to whom the Vice President of Administration
and Treasurer and Secretary will report. D. A Vice
President of Administration and Treasurer shall be
elected by Wheeling-Pittsburgh and shall have such
authority and responsibility for the administrative,
human resources, accounting and financial affairs of
the Coating Company as the President shall prescribe
through the Executive Vice President. E. A Secretary
and Assistant Secretary shall be elected by
Wheeling-Pittsburgh and Dong Yang America
respectively and shall be responsible for
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maintaining the business and corporate records of the
Coating Company and shall report to the Executive
Vice President.
Section 3.05. Director Authority and Major Corporate
Decisions.
A. Limitation on Officers. No officer shall have the
authority to exercise any Director's Authority
(hereinafter defined) including but not limited to
any activity outside the ordinary course of the
business of the Coating Company which has not been
previously approved by the Directors of the Coating
Company.
B. Action by a Majority of the Directors. Except as
provided in Section 3.05(C) hereof, the Board by the
affirmative vote of five (5) members may authorize
the taking of any Director Authority or any action of
the Coating Company not specifically prohibited by
subparagraph (C) of Section 3.05 hereof. Director
Authority shall mean all authority of the Board as
provided in the Ohio Revised Code except for the
actions described in subparagraph (C) of Section 3.05
hereof.
C. Major Corporate Decisions. (a) All major corporate
decisions (as hereinafter defined) shall require the
affirmative vote of Common Shareholders owning
sixty-six and two-thirds percent (66 2/3%) of the
voting power of the Common Shares.
(b) For the purposes of this Agreement,
"Major Corporate Decisions" shall be the following:
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i. A decision to engage in any business other
than the manufacture for sale or Toll
Processing of tin mill products for
customers, including, but not limited to,
the decision to add additional coating lines
or engage in a different line of product or
business;
ii. Selling, leasing, assigning, exchanging,
disposing or transferring all or
substantially all of the assets, with or
without goodwill, of the Coating Company;
iii. Acquiring all or substantially all of the
assets or stock of another corporation or
business entity, merging or consolidating
with another corporation or business entity,
or entering into any other business
combination with another corporation or
business entity;
iv. Dissolving or liquidating the Coating
Company;
v. Selling or issuance by the Coating Company
of any of its Shares or other securities,
including treasury Shares, or creating or
issuing new classes of Shares or other
securities;
vi. Amending the Coating Company's Articles or
Regulations, provided, however, that no
amendment to Article 4 purporting to change
the rights of Preferred Shareholders shall
be
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made without the consent of the preferred
shareholders;
vii. Assigning, transferring, settling,
compromising, cancelling or releasing any
claim of, or debt owed to, the Coating
Company in excess of Two Hundred Fifty
Thousand Dollars ($250,000) (in the
aggregate in any one calendar year) or any
customer debt in excess of five percent (5%)
of the Coating Company's gross revenues for
any one calendar year without receiving full
payment by the Coating Company;
viii. Making, executing or delivering any general
assignment for the benefit of creditors or
any bond, guaranty, indemnity bond, or
surety bond, or filing any petition for
bankruptcy or similar proceeding under any
state law or deciding not to contest any
involuntary petition in bankruptcy;
ix. Confessing a judgment;
x. Providing for or changing the compensation,
including bonuses, of any officer or
Director of the Coating Company;
xi. Authorizing any stock split, including any
reverse stock split;
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xii. Authorizing, approving or entering into any
agreement or agreements with or for the
benefit of any Shareholder, Director or
officer of the Coating Company, or any
person who is related to or affiliated,
directly or indirectly, with any
Shareholder, Director or officer of the
Coating Company;
xiii. Creating, continuing or contributing to any
pension or profit sharing plan;
xiv. Incurring or modifying the terms of any
bank, governmental or other debt;
xv. Agreeing to cease doing business or dissolve
the Coating Company;
xvi. Purchasing any Shares of the Coating Company
from any Shareholder;
xvii. Entering into any agreement that provides
for any of the matters described in
Paragraphs (i) through (xvi) above.
Section 3.06. Effect of Bankruptcy.
Notwithstanding anything to the contrary stated hereinabove,
in the event that a party files a petition of bankruptcy, Chapter 7 or 11, or
insolvency or similar process and consequently thereafter rejects its
obligations hereunder and fails to perform, then the other party shall have the
power to appoint any and all directors and officers of the corporation.
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ARTICLE FOUR
Agreements Concerning Construction, Development,
Operation and Funding of the Coating Company
Section 4.01. Funding and Contribution of Land Equipment, etc.
A. Wheeling-Pittsburgh Contributions. Depending upon the best
tax consequences, Wheeling-Pittsburgh shall either contribute or lease to the
Coating Company the land necessary to develop the Coating Company and the
processing equipment it currently owns. The land and equipment are described on
Exhibit 4.01 hereof and shall be contributed at their fair market value as
determined by an arms-length appraisal. The land and equipment described on
Exhibit 4.01 shall be part of Wheeling- Pittsburgh's capital contribution to the
Coating Company and Wheeling-Pittsburgh shall contribute the difference between
the fair market value of the land and equipment and Six Million Dollars
($6,000,000) in cash as its additional share of the capital of the Coating
Company. These contributions of assets and cash shall be Wheeling-Pittsburgh's
total equity contribution to the Coating Company and shall entitle
Wheeling-Pittsburgh to fifty percent (50%) of the 1200 Common Shares of the
Coating Company.
B. Dong Yang America's Contributions. Dong Yang America shall
contribute Six Million Dollars ($6,000,000) in cash to the Coating Company as
its share of the capital of the Coating Company and shall be entitled to fifty
percent (50%) of the 1200 Common Shares of the Coating Company.
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C. Nittetsu's Contributions. Nittetsu shall contribute Three
Million Dollars ($3,000,000) in cash to the Coating Company as its share of
capital and shall be entitled to 100% of the 300 non-voting cumulative Preferred
Shares of the Coating Company.
Section 4.02. Guaranty and Other Securitization of Loans and
Financing. The parties acknowledge and agree that the development of the
tinplating line by the Coating Company shall cost approximately Sixty-Eight
Million Dollars ($68,000,000). In addition to the capital contributions
described in Section 4.01 hereof, the parties acknowledge and agree that they
will attempt to obtain a Ten Million Dollar ($10,000,000) loan from the State of
Ohio (secured by a lien on the land and building of the Coating Company), a
Sixteen Million Five Hundred Thousand Dollar ($16,500,000) loan provided by or
through Dong Yang America, and an additional Sixteen Million Five Hundred
Thousand Dollar ($16,500,000) loan provided by or through Wheeling-Pittsburgh.
Both Dong Yang America and Wheeling-Pittsburgh shall be responsible for securing
or guaranteeing their respective loans described in the preceding sentence if
required. Additional financing in approximately the amount of Ten Million
Dollars ($10,000,000) secured, if necessary, by liens on the Coating Company's
equipment will be sought from other sources.
In addition to the capital contributions described above,
Wheeling-Pittsburgh and Dong Yang America agree to contribute any additional
funds (to cover cost overruns) and working capital (by capital contribution or
loan) that the Coating Company is unable to
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<PAGE>
secure independently from third parties. Such additional contributions or loans
shall be made in proportion to their ownership of Common Shares.
Section 4.03. Design of Line, Provision of Expertise, Purchase
of Equipment, Etc.. Dong Yang America and Wheeling- Pittsburgh agree (i) to be
responsible for designing the tin mill line (the "Line") to be constructed by
the Coating Company and (ii) to provide whatever additional expertise is
required to design the Line, purchase the equipment and materials to develop the
Line, and install and operate the Line.
The Line shall be designed to produce tin mill products within
the ranges specified in Exhibit 4.03.
Section 4.04. Construction of the Facility. Dong Yang America
and Wheeling-Pittsburgh agree to designate a project manager for the development
of the building, the Line and the improvements necessary to develop the Line
(the "Facility) and he will have responsibility and authority to develop the
Facility. Both Dong Yang America and Wheeling-Pittsburgh agree to provide,
during the construction phase, management and technical assistance to the
Coating Company by contributing qualified personnel at no charge. Only the
actual Out-of-Pocket Expenses incurred by the personnel so contributed shall be
reimbursed by the Coating Company. All Out-of-Pocket Expenses will be subject to
audit by the Coating Company.
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ARTICLE FIVE
Restrictions on Transfer, Issuance
or Repurchase of Shares
Section 5.01. Shareholder Transfer Restrictions. In addition
to the requirements of Article NINE, no Shareholder shall, except as otherwise
expressly provided elsewhere in this Agreement, pledge, hypothecate, otherwise
encumber, give, sell, transfer or otherwise distribute (hereinafter collectively
"Transfer"), any Shares of the Coating Company unless such Transfer shall have
been previously approved by the holders of Shares entitling them to exercise not
less than sixty-six and two-thirds percent (66 2/3%) of the voting power of the
Common Shares of the Coating Company.
Section 5.02. Issuance Restriction on the Coating Company. The
Coating Company shall not issue, sell or otherwise distribute ("Issuance") any
of its Shares (whether authorized but unissued Shares or treasury Shares) to any
person, firm, corporation, partnership, trust or other entity unless (i) such
Issuance shall have been previously approved by the holders of not less than
sixty-six and two-thirds percent (66 2/3%) of the issued and outstanding Common
Shares of the Coating Company and (ii) such person shall simultaneously become
bound by the terms and conditions of this Agreement by executing an amendment to
this Agreement satisfactory to all of the Common Shareholders.
Section 5.03. Repurchase Restrictions. The Coating Company
shall not purchase, and no Shareholder shall sell to the Coating Company, any of
Coating Company's own Shares, whether pursuant to the exercise by the Coating
Company of a purchase right
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or otherwise, if immediately thereafter, its assets would be less than its
liabilities plus its stated (paid in) capital, if any, or if it is insolvent, or
if there is a reasonable ground to believe by such persons it would be rendered
insolvent. For the purposes of this Section 5.03, the term "Insolvent" means
that the Coating Company is unable to pay its obligations as they become due in
the usual course of its business.
Section 5.04. Reasonable Restriction. Each Shareholder and the
Coating Company agree and acknowledge that the restrictions on Transfer and
Issuance imposed by this Agreement are imposed to accomplish legitimate purposes
of the Coating Company, and that such restrictions are not more restrictive than
necessary to accomplish those purposes.
Section 5.05. Unauthorized Transfers are Null and Void. If any
Shareholder shall make a purported Transfer of all or any part of the Shares of
the Coating Company held by it in a transaction that contravenes this Agreement
(hereinafter called the "Breach Shares"), such purported Transfer ("Breach")
shall be void and of no effect whatsoever.
ARTICLE SIX
Share Purchase Option After a Change in Control,
Buyout Offer After an Impasse, and Preferred Share Buyback
Section 6.01. Notice of Change in Control. Promptly after a
Change in Control has occurred with respect to Wheeling- Pittsburgh,
Wheeling-Pittsburgh shall notify Dong Yang America in writing of such
occurrence. Promptly after a Change in Control has
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occurred with respect to Dong Yang America or its parent company, Dong Yang
America shall notify Wheeling-Pittsburgh in writing of such occurrence.
Section 6.02. Purchase Option After a Change in Control. For
forty-five (45) days after a party receives notice from the other party pursuant
to Section 6.01 hereof that a Change in Control of the other party has occurred,
the party receiving the notice shall have the right and option to purchase all,
but not less than all, of the Shares owned by the other party at a price equal
to the original Purchase Price of $10,000 per share plus (a) 10% interest
compounded from the date of original issuance of the Shares to be purchased, or
(b) Fair Market Value, whichever is greater. The holder of the option shall
exercise it by providing to the other party written notice, as provided in this
Agreement, of such exercise within such forty-five (45) day period.
Section 6.03. Buyout Offer After an Impasse. If an Impasse
shall be deemed to have occurred, then Dong Yang America and Wheeling-Pittsburgh
shall each have the right to negotiate a buyout of the other's Shares on terms
that are mutually acceptable to both. Both Dong Yang America and
Wheeling-Pittsburgh recognize that any buyout offer made pursuant to this
Section 6.03 must be based on a Purchase Price of $10,000 per share plus (a) 10%
interest compounded from the date of original issuance of the Common Shares to
be purchased, or (b) Fair Market Value, whichever is greater.
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Section 6.04. Buyback of Preferred Shares. If (a) Nittetsu, in
its capacity as distributor, terminates its Distribution Agreement with Coating
Company pursuant to Section 4(a) thereof, or (b) the Coating Company elects not
to renew Nittetsu's Distribution Agreement after the expiration of the original
term or any renewal term, or (c) Nittetsu elects not to renew the Distribution
Agreement after the expiration of the original term or any renewal term, then,
in any event, Coating Company shall buy back Nittetsu's Preferred Shares. The
obligation to repurchase under parts (a) and (b) of this Section becomes
effective when the event of termination or expiration becomes effective. The
obligation to repurchase under part (c) of this Section becomes effective two
(2) years after the placement of the last purchase order. The buyback price
shall be equal to the initial purchase price plus accumulated dividends payable
in accordance with Article 4 of Coating Company's Articles of Incorporation.
Once effective, the buyback shall be carried out within 90 days of the
qualifying event.
Section 6.05. Payment Term. The payment terms for the purchase
of Shares pursuant to Article Six shall be as provided in Article Eight of this
Agreement.
Section 6.06. Closing. The closing of the purchase of Shares
pursuant to Article Six shall be held in Martins Ferry, Ohio on or before sixty
(60) days after the date written notice of exercise of the option or impasse is
given.
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ARTICLE SEVEN
Purchase Price
Section 7.01. Purchase Price. The initial purchase price to be
paid for each Common Share of the Coating Company pursuant to this Agreement
shall be Ten Thousand Dollars ($10,000.00) per Share. The initial purchase price
to be paid for each Preferred Share shall be Ten Thousand Dollars ($10,000) per
Preferred Share.
Section 7.02. Books and Records. The Coating Company shall
maintain its books and records of account in accordance with generally accepted
accounting principles, consistently applied, subject to the continuation of any
such accounting practices as are approved by all (100%) of the Common
Shareholders.
ARTICLE EIGHT
Payment for Shares
Section 8.01. Payment Terms. The initial share purchases shall
be made in accordance with Schedule A attached hereto. Unless otherwise agreed
by the purchaser and the seller, payment for all Shares subsequently purchased
pursuant to this Agreement shall be made in full at the closing in either cash
or other immediately available funds.
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ARTICLE NINE
Securities Law Restrictions and Provisions
Section 9.01. Restrictive Legend. Except as provided in
Section 9.02 of this Agreement, each certificate representing (a) the Shares and
(b) any other securities issued in respect of the Shares upon any stock split,
stock dividend, merger, recapitalization, consolidation or similar event shall
bear a legend in substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR
UNDER THE SECURITIES LAW OF ANY STATE AND MAY NOT BE SOLD,
ASSIGNED, CONVEYED, PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED EXCEPT: (1) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT REGISTERING THE SHARES UNDER APPLICABLE SECURITIES
LAWS; OR (2) PURSUANT TO AN OPINION OF COUNSEL, WHICH HAS BEEN
OBTAINED BY THE HOLDER AND WHICH IS IN ALL RESPECTS
SATISFACTORY TO THE COATING COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED FROM SUCH HOLDER TO LAWFULLY EFFECT SUCH SALE,
ASSIGNMENT, CONVEYANCE, PLEDGE, HYPOTHECATION OR OTHER
TRANSFER.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS, PROVISIONS AND RESTRICTIONS (INCLUDING RESTRICTIONS ON
TRANSFER) CONTAINED IN THE AMENDED AND RESTATED CLOSE
CORPORATION AND SHAREHOLDER'S AGREEMENT DATED AS OF MARCH 24,
1994 AS THE SAME MAY BE AMENDED FROM TIME TO TIME WHICH WAS
DULY ASSENTED TO BY ALL THE SHAREHOLDERS OF THE CORPORATION AS
PROVIDED IN SECTION 1701.591 OF THE OHIO REVISED CODE.
THE CORPORATION WILL MAIL TO THE HOLDER OF THE SHARES
REPRESENTED BY THIS CERTIFICATE A COPY OF THE CLOSE
CORPORATION AND SHAREHOLDER'S AGREEMENT AND OF THE EXPRESS
TERMS OF THE SHARES REPRESENTED BY THE CERTIFICATE AND OF THE
OTHER CLASS OR CLASSES AND OF SERIES SHARES, IF ANY, WHICH THE
COATING COMPANY IS AUTHORIZED TO ISSUE, WITHIN FIVE (5) DAYS
AFTER RECEIPT OF WRITTEN REQUEST THEREFOR.
THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS
AGREEMENT HAS NO BEEN QUALIFIED WITH THE
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COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND
THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF
ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH
QUALIFICATION IS LAWFUL, UNLESS THE SALE OF SECURITIES IS
EXEMPT FROM THE QUALIFICATION BY SECTION 25100, 25102 OR 25105
OF THE CALIFORNIA SECURITIES ACT. THE RIGHTS OF ALL PARTIES TO
THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH
QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE
NOT BEEN REGISTERED UNDER THE DELAWARE SECURITIES ACT AND MAY
NOT BE SUBSEQUENTLY TRANSFERRED OR SOLD UNLESS SUCH TRANSFER
OR SALE IS PROPERLY REGISTERED OR EXEMPTED UNDER THE DELAWARE
SECURITIES ACT.
Each Shareholder consents to the Coating Company making a notation on its
records and giving instructions to any transfer agent of the Shares in order to
implement the restrictions on transfer established in this Agreement.
Section 9.02. Exception to Legend Requirement. A certificate
representing Shares shall not be required to bear the portion of the restrictive
legend relating to the securities law as set forth in Section 9.01 if, in the
opinion of counsel for the Coating Company, such legend is not required in order
to establish compliance with the Securities Act of 1933, as amended (the
"Securities Act") and applicable state securities law.
Section 9.03. Notice of Proposed Transfer. Unless there is in
effect a registration statement under the Securities Act or under the applicable
state securities law, prior to making any transfer of Shares bearing the legend
specified in 9.01, the Shareholder shall at its expense provide the Coating
Company: (i) an unqualified written opinion of legal counsel (which shall be,
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reasonably satisfactory to the Coating Company) addressed to the Coating Company
and to the effect that such Transfer may be effected without registration under
the Securities Act and under applicable state securities laws; and (ii) such
other information as the Coating Company may reasonably request regarding the
proposed Transfer.
ARTICLE TEN
Voting of Shares Subject to Purchase Rights
Section 10.01. Voting of Shares Subject to Purchase Rights.
Any Shareholder or its legal representative whose Shares are being purchased
pursuant to the exercise of one or more of the purchase rights provided for in
this Agreement shall promptly cause each Share certificate evidencing any such
Shares to be appropriately endorsed and delivered to the purchaser thereof.
During the period commencing on the exercise of one or more of such purchase
rights and ending upon the delivery of the Share certificate or certificates
and/or upon delivery of the documents required by the regulations for a lost or
destroyed certificate, each of such Shares evidenced by a certificate which
shall not have been so endorsed and delivered shall be voted by the purchaser
thereof as if he had received the certificates. In connection with such
determination any resulting fractional Share votes shall be counted and given
effect rather than rounded.
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ARTICLE ELEVEN
Miscellaneous
Section 11.01. Financial Information. Upon the request of any
Shareholder, the Coating Company will deliver the following reports to such
Shareholder, provided, however, that no Shareholder shall be provided with any
confidential or proprietary commercial information such as customer lists or
marketing plans:
(a) As soon as practicable after the end of each fiscal year
but, in any event, within 90 days thereafter, consolidated balance sheets of the
Coating Company and its subsidiaries, if any, as of the end of such fiscal year,
and consolidated statements of income, consolidated statements of shareholders'
equity and consolidated statements of cash flow of the Coating Company and its
subsidiaries, if any, for such year, prepared in accordance with the accrual
method of accounting and setting forth in each case in comparative form the
figures for the previous fiscal year, all in reasonable detail. These statements
shall be audited by independent, certified public accountants.
(b) As soon as practicable after the end of the first, second
and third quarterly accounting periods in each fiscal year of the Coating
Company but, in any event, within forty-five (45) days thereafter, consolidated
statements of income and consolidated statements of cash flows, of the Coating
Company and its subsidiaries, if any, for such period and for the current fiscal
year to date, prepared in accordance with the accrual method of accounting and
setting forth in each case in comparative form the
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figures for the corresponding period during the previous fiscal year, all in
reasonable detail.
(c) Within thirty (30) days prior to the beginning of each
fiscal year, an annual plan approved by the Directors of the Coating Company as
provided in Section 3.02 hereof, setting forth full and complete forecasted
consolidated balance sheets, consolidated statements of income, and consolidated
statements of cash flow for such fiscal year and for each quarter within that
year and summarizing the marketing, production, research and development,
organization and staffing, and financial strategies which support the annual
plan's forecasted figures.
Section 11.02. Additional Information. Upon the request of any
Shareholder, the Coating Company will deliver or provide to such Shareholder:
(a) With reasonable promptness, such other information and
data with respect to the Coating Company and its subsidiaries, if any, as any
such Shareholder may from time to time reasonably request, provided, however,
that no Shareholder shall be provided with any confidential or proprietary
commercial information such as customer lists or marketing plans.
(b) The right, at its expense, no more often than one time per
calendar quarter, to visit and inspect any of the property of the Coating
Company, to examine and copy its books of account and records, and to discuss
its affairs, finances and accounts with the Coating Company officers, all at
such reasonable times with reasonable notice.
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<PAGE>
Section 11.03. Notices. Any notices, demands or other
communications (collectively, "Notices") required or permitted to be given by
any party to another under this Agreement shall be in writing, either delivered
by hand to the other party at that party's address set forth below, or sent by
postage prepaid certified mail, return receipt requested, or sent via facsimile
transmission, or by courier to the other party at that party's address set forth
below. A Notice delivered by hand shall be deemed to have been given when it is
received by the party to whom it is being given. A Notice sent by certified mail
or courier shall be deemed to have been given upon the signing of the notice of
receipt or refusal after such Notice has been mailed/sent to the Notice address
of the recipient. The facsimile copy shall be deemed received when acknowledged
by the receiver. The Notice addresses of the parties are as follows:
If to the Coating Company:
Ohio Coatings Company
P. O. Box 339
Martins Ferry, Ohio 43935
If to Dong Yang America:
Dong Yang Tinplate America Corp.
880 West First Street, Suite 525
Los Angeles, CA 90012
If to Wheeling-Pittsburgh:
Attn: President
Wheeling-Pittsburgh Corporation
110 East 59th Street, 30th Floor
New York, New York 10022
with a copy to:
Attn: James T. Gibbons
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<PAGE>
Wheeling-Pittsburgh Steel Corporation
1134 Market Street
Wheeling, West Virginia 26003
If to Nittetsu:
Nittetsu Shoji America, Inc.
Citicorp Plaza, Suite 1860
725 S. Figueroa Street
Los Angeles, CA 90017
Any change in the Notice address of a party for the purpose of Notice under this
Section 11.03 may be effected only by Notice given to all of the other parties.
Section 11.04. Successors, Assigns, etc. The terms and
provisions hereof shall bind and inure to the benefit of the parties and their
respective heirs, successors and permitted assigns (including successive, as
well as immediate, successors and assigns).
Section 11.05. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Ohio.
Section 11.06. Waiver. The failure of any party hereto to
enforce at any time any of the provisions of this Agreement shall in no way be
construed to be a waiver of any such provision, nor in any way affect the
validity of this Agreement or any part hereof or the right of such party
thereafter to enforce each and every such provision. No waiver of any breach of
or non-compliance with this Agreement shall be held to be a waiver of any other
or subsequent breach or non-compliance.
Section 11.07. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed
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<PAGE>
to be an original, but all of which together shall constitute one and the same
agreement.
Section 11.08. Tolling of Time. The running of any period of
time during which, under this Agreement, any right may be exercised or any
obligation must be performed shall be tolled for as long as the order of any
court shall prohibit the exercise of any such right or the performance of any
such obligation.
Section 11.09. Amendment or Termination of this Agreement;
Action by Shareholders. Without the written consent of Shareholders owning at
least eighty percent (80%) of the Shares then outstanding, (i) this Agreement
may not be amended or terminated, provided, however, that no section of this
Agreement describing the rights and/or obligations of Preferred Shareholders
shall be amended or terminated without the consent of such Preferred
Shareholder. Neither the Coating Company nor any shareholder shall do or cause
to be done anything that would result in the invalidation of this Agreement,
including causing the Coating Company to become a public company.
Section 11.10. Entire Agreement. This Agreement along with the
Letter of Intent dated June 21, 1994, which refers to the Raw Materials Supply
Agreement, Equipment Supply Agreement, the loan agreements provided for in
Section 4.02 and Distribution Agreement(s) are the entire and exclusive
statement of the parties' agreement and they supersede all prior agreements,
understandings, negotiations and discussions among the parties, whether oral or
written, including, without limitation, prior letters of intent.
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Section 11.11. Provisions Severable. If any provision of this
Agreement or the application of any such provision to any person or any
circumstance shall be determined to be invalid or unenforceable, then such
determination shall not affect any other provisions of this Agreement or the
application of such provisions to any other person or circumstance, all of which
other provisions shall remain in full force and effect; and, if any provision of
this Agreement is capable of two constructions, one of which would render the
provision invalid, then such provision shall have the meaning which renders it
valid.
Section 11.12. Effect of Invalidation and Termination. If all
of the terms and conditions precedent set forth in the Letter of Intent dated
June 21, 1994 have not been satisfied or waived prior to the expiration date set
forth therein, or any extensions thereof, then this Shareholder's Agreement
shall terminate and the Coating Company shall unwind all prior transactions and
return all equity contributions to their respective contributors.
In the event of any invalidation of this Agreement pursuant to
the provisions of Section 1701.591 of the Ohio Revised Code or the termination
of this Agreement pursuant to any provision set forth herein, the entire
Agreement shall be of no further effect and all aspects of the internal affairs
of the Coating Company and the regulations of the holders of the Common Shares
and Preferred Shares among themselves shall be governed by the Articles and
Regulations of the Corporation as then in effect.
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Section 11.13. Pronouns. When used in this Agreement, each
pronoun and the term "Person" shall be deemed to mean one or more individuals,
firms, corporations (non-profit or for profit), trusts, partnerships,
unincorporated societies or associations, governmental bodies or any agency or
subdivision thereof, or any other entities, as the context or circumstances may
indicate.
Section 11.14. Captions. The captions contained in this
Agreement were included only for convenience or reference and do not define,
limit, explain or modify this Agreement or its interpretation, construction or
meaning and are in no way to be construed as a part of this Agreement.
Section 11.15. Exhibits Incorporated by Reference. All
exhibits attached hereto are incorporated by reference as if fully rewritten
herein.
Section 11.16. Mandatory Arbitration. Any dispute that may
arise regarding the rights or duties of the parties established pursuant to the
provisions of this Agreement, except pursuant to the provisions of Section
3.05(C)(b)(1), or regarding the enforcement of such provisions, shall be subject
to the provisions of this Section 11.16. In the event that any such dispute
shall arise, the parties shall in good faith attempt to amicably resolve said
dispute. In the event that a resolution cannot be reached within fifteen (15)
days, any party to the dispute may submit such dispute to arbitration in
Pittsburgh, Pennsylvania or in another mutually acceptable location in
accordance with the rules of the American Arbitration Association then
prevailing; provided,
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however, such dispute shall be arbitrated and a decision rendered within a sixty
(60) day period. The arbitrator may issue any order or provide any remedy
existing in law or equity and his or her decision shall be final and binding.
Each party to the arbitration shall be responsible for its pro rata share of the
arbitration costs, including the fee of the arbitrator.
Section 11.17. Approval of Agreement. The effectiveness of
this agreement is subject to the approval of the respective Boards of Directors
of each of Dong Yang, Wheeling-Pittsburgh, Nittetsu Shoji and the Coating
Company on or before September 21, 1994.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by its duly authorized officer to be effective as of
the date first above written.
WITNESSETH: DONG YANG TINPLATE AMERICA CORP.
______________________ By:________________________________
Its:
Date: February 21, 1995
WHEELING-PITTSBURGH CORPORATION
______________________ By:________________________________
James L. Wareham
Its: President
Date: February 21, 1995
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NITTETSU SHOJI AMERICA, INC.
______________________ By:________________________________
Its:
Date: February 21, 1995
OHIO COATINGS COMPANY
______________________ By:________________________________
Its: President & CEO
Date: February 21, 1995
STATE OF WEST VIRGINIA,
COUNTY OF OHIO:
I, Diane Y. Duncan, Notary of said County and State, do
certify that _________________________, who signed the writing hereto annexed
bearing date the _______ day of ________________, 1995, for DONG YANG TINPLATE
AMERICA CORP., has this day acknowledged the said writing to be the act and deed
of said corporation.
Given under my hand and official seal this _______ day of
________________, 1995.
--------------------------------
Notary Public
My Commission Expires:
October 28, 1997
STATE OF WEST VIRGINIA,
COUNTY OF OHIO:
I, Diane Y. Duncan, Notary of said County and State, do
certify that James L. Wareham, who signed the writing hereto
annexed bearing date the _______ day of ________________, 1995, for
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WHEELING-PITTSBURGH CORPORATION has this day acknowledged the said writing to be
the act and deed of said corporation.
Given under my hand and official seal this _______ day of
________________, 1995.
--------------------------------
Notary Public
My Commission Expires:
October 28, 1997
STATE OF WEST VIRGINIA,
COUNTY OF OHIO:
I, Diane Y. Duncan, Notary of said County and State, do
certify that , who signed the writing hereto annexed bearing date the _______
day of ________________, 1995, for NITTETSU SHOJI AMERICA, INC., has this day
acknowledged the said writing to be the act and deed of said corporation.
Given under my hand and official seal this _______ day of
________________, 1995.
--------------------------------
Notary Public
My Commission Expires:
October 28, 1997
STATE OF WEST VIRGINIA,
COUNTY OF OHIO:
I, Diane Y. Duncan, Notary of said County and State, do
certify that ____________________________, who signed the writing hereto annexed
bearing date the _______ day of ________________, 1995, for OHIO COATINGS
COMPANY, has this day acknowledged the said writing to be the act and deed of
said corporation.
Given under my hand and official seal this _______ day of
________________, 1995.
--------------------------------
Notary Public
My Commission Expires:
October 28, 1997
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INDEX
Page
----
ARTICLE ONE Definitions.......................................... 2
Section 1.01 Defined Terms........................................ 2
Section 1.02 Articles............................................. 2
Section 1.03 Change in Control.................................... 2
Section 1.04 Code of Regulations.................................. 3
Section 1.05 Impasse.............................................. 3
Section 1.06 Fair Market Value.................................... 4
Section 1.07 Shareholder.......................................... 4
Section 1.08 Share................................................ 4
Section 1.09 Common Share......................................... 4
Section 1.10 Preferred Share...................................... 4
Section 1.11 Substrate............................................ 4
Section 1.12 Toll Processing...................................... 4
Section 1.13 Raw Materials Supply Agreement....................... 5
Section 1.14 Start-Up Date........................................ 5
Section 1.15 Wheeling-Pittsburgh.................................. 5
Section 1.16 Out-of-Pocket Expenses............................... 5
ARTICLE TWO Close Corporation Agreement.......................... 5
Section 2.01 Close Corporation Agreement.......................... 5
ARTICLE THREE Corporate Governance................................. 6
Section 3.01 Shareholders' Authority.............................. 6
Section 3.02 Directors' Authority................................. 6
Section 3.03 Election and Number of
Directors............................................ 7
Section 3.04 Selection of Officers and
Authority of Officers................................ 8
Section 3.05 Director Authority and Major
Corporate Decisions.................................. 9
Section 3.06 Effect of Bankruptcy.................................12
ARTICLE FOUR Agreements Concerning Construction,
Development, Operation and Funding
of the Coating Company...............................13
Section 4.01 Funding and Contribution of
Land Equipment, etc.................................13
Section 4.02 Guaranty and Other Securi-
tization of Loans and
Financing...........................................14
Section 4.03 Design of Line, Provision of
Expertise, Purchase of
Equipment, Etc......................................15
Section 4.04 Construction of the Facility.........................15
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Page
----
ARTICLE FIVE Restrictions on Transfer, Issuance
or Repurchase of Shares..............................16
Section 5.01 Shareholder Transfer
Restrictions........................................16
Section 5.02 Issuance Restriction on the
Coating Company.....................................17
Section 5.03 Repurchase Restrictions..............................17
Section 5.04 Reasonable Restriction...............................18
Section 5.05 Unauthorized Transfers are Null
and Void............................................18
ARTICLE SIX Share Purchase Option After a Change
in Control and Buyout Offer After an
Impasse..............................................18
Section 6.01 Notice of Change in Control..........................18
Section 6.02 Purchase Option After a
Change in Control...................................18
Section 6.03 Buyout Offer After an
Impasse.............................................19
Section 6.04 Buyback of Preferred Shares..........................19
Section 6.05 Payment Term.........................................20
Section 6.06 Closing..............................................20
ARTICLE SEVEN Purchase Price.......................................20
Section 7.01 Purchase Price.......................................20
Section 7.02 Books and Records....................................20
ARTICLE EIGHT Payment for Shares...................................21
Section 8.01 Payment Terms........................................21
ARTICLE NINE Securities Law Restrictions and
Provisions..........................................21
Section 9.01 Restrictive Legend...................................21
Section 9.02 Exception to Legend Requirement......................23
Section 9.03 Notice of Proposed Transfer..........................23
ARTICLE TEN Voting of Shares Subject to Purchase
Rights...............................................23
Section 10.01 Voting of Shares Subject to
Purchase Rights.....................................23
ARTICLE ELEVEN Miscellaneous........................................24
Section 11.01 Financial Information................................24
Section 11.02 Additional Information...............................25
Section 11.03 Notices..............................................26
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Section 11.04 Successors, Assigns, etc.............................28
Section 11.05 Governing Law........................................28
Section 11.06 Waiver...............................................28
Section 11.07 Counterparts.........................................28
Section 11.08 Tolling of Time......................................28
Section 11.09 Amendment or Termination of
this Agreement; Action by
Shareholders.........................................29
Section 11.10 Entire Agreement.....................................29
Section 11.11 Provisions Severable.................................29
Section 11.12 Effect of Invalidation and
Termination.........................................30
Section 11.13 Pronouns.............................................30
Section 11.14 Captions.............................................30
Section 11.15 Exhibits Incorporated by
Reference...........................................31
Section 11.16 Mandatory Arbitration................................31
Section 11.17 Approval of Agreement................................31
EXHIBITS
4.01 Description of Non-Cash Contributions
4.03 Description of Product Ranges
SCHEDULES
A. Initial Equity Contributions
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CLOSE CORPORATION
AND SHAREHOLDERS' AGREEMENT
between
Dong Yang Tinplate America Corp.
and
Nittetsu Shoji America, Inc.
and
Wheeling-Pittsburgh Corporation
and
Ohio Coatings Company
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DESCRIPTION OF NON-CASH CONTRIBUTIONS
Exhibit 4.01
to the
CLOSE CORPORATION
AND SHAREHOLDERS' AGREEMENT
between
Dong Yang Tinplate America Corp.
and
Nittetsu Shoji America, Inc.
and
Wheeling-Pittsburgh Corporation
and
Ohio Coatings Company
<PAGE>
DESCRIPTION OF PRODUCT RANGES
Exhibit 4.03
to the
CLOSE CORPORATION
AND SHAREHOLDERS' AGREEMENT
between
Dong Yang Tinplate America Corp.
and
Nittetsu Shoji America, Inc.
and
Wheeling-Pittsburgh Corporation
and
Ohio Coatings Company
<PAGE>
EQUITY CONTRIBUTION SCHEDULE
Schedule A
to the
CLOSE CORPORATION
AND SHAREHOLDERS' AGREEMENT
between
Dong Yang Tinplate America Corp.
and
Nittetsu Shoji America, Inc.
and
Wheeling-Pittsburgh Corporation
and
Ohio Coatings Company
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
WHEELING-PITTSBURGH STEEL CORPORATION
Wheeling-Pittsburgh Steel Corporation, a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware which was originally incorporated under the name of Wheeling Street
Corporation, does hereby certify:
1. (a) The present name of the corporation (hereinafter the
"Corporation") is Wheeling-Pittsburgh Steel Corporation.
(b) the date of filing of the original certificate of
incorporation of the Corporation with the Secretary of State of Delaware is June
21, 1920.
2. The certificate of incorporation of the Corporation, as amended, is
hereby amended and restated in its entirety as set forth in the Amended and
Restated Certificate of Incorporation hereinafter provided for.
3. The amendment and restatement of the Certificate of Incorporation
herein certified have been duly adopted by the board of directors of the
Corporation in connection with the Amended Joint Plan of Reorganization of
Wheeling-Pittsburgh Steel Corporation, et al, dated October 18, 1990, as amended
and modified. Provision for the amendment and restatement of the Certificate of
Incorporation is contained in an Order of Court, dated December 18, 1990, of the
United States Bankruptcy Court for the Western District of Pennsylvania, under
whose jurisdiction the Corporation is being reorganized pursuant to Title 11 of
the United States Code.
4. The effective time of the amendment and restated certificate of
incorporation shall be upon filing with the Secretary of State of the State of
Delaware.
5. The certificate of incorporation of the Corporation, as amended and
restated herein, shall at the effective time of this Amended and Restated
Certificate of Incorporation read as follows:
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
WHEELING-PITTSBURGH STEEL CORPORATION
FIRST: The name of the Corporation is Wheeling- Pittsburgh
Corporation.
<PAGE>
SECOND: The address of the Corporation's registered office int
he State of Delaware is 1209 Orange Street in the City of Wilmington,
County of New Castle. The name of the Corporation's registered agent at
such address is The Corporation Trust Company.
THIRD: The purpose of the Corporation shall be to engage in
any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware (the "GCL").
FOURTH: The total number of shares of all classes of capital
stock which the Corporation shall have authority to issue is 70,000,000
of which 10,000,000 shares shall be Preferred Stock of the par value of
$0.10 per share and 60,000,000 shares shall be Common Stock of the par
value of $0.01 per share.
A. Preferred Stock. The Board of Directors is expressly
authorized to provide for the issue of all or any shares of the
Preferred Stock, in one or more series, and to fix for each such series
such voting powers. full or limited, and such designations, preferences
and relative, participating, opt on all or other special rights and
such qualifications, limitations or restrictions thereof as shall be
stated and expressed in the resolution or resolutions adopted b he
Board of Directors providing for the issue of such series (a "Preferred
Stock Designation") and as may be permitted by the GCL. The number of
authorized shares of Preferred Stock may be increase or decreased (but
not below the number of shares thereof then outstanding) by the
affirmative vote of the holders of a majority of the voting power of
all of the then outstanding shares of the capital stock of the
Corporation entitled to vote generally in the election of directors
(the "Voting Stock"), voting together as a single class, without a
separate vote of the holders of the Preferred Stock, or any series
thereof, unless a vote of any such holders is required pursuant to any
Preferred Stock Designation. All Preferred Stock shall contain adequate
provisions or the election of directors representing such class of
Preferred Stock in the event of default in payment of dividends on such
Preferred Stock.
B. Common Stock. Except as otherwise required by law or as
otherwise provided in any Preferred Stock Designation, the holders of
the Common Stock shall exclusively possess all voting power and each
share of Common Stock shall have one vote.
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FIFTH: The Corporation is to have perpetual existence.
SIXTH: A. Number, election and terms of directors. Subject to
the rights of the holders of any series of Preferred Stock to elect
additional directors under specified circumstances, the number of
directors shall be fixed from time t time exclusively by the Board of
Directors pursuant to aa resolution adopted by a majority of the total
number of directors which the Corporation would have if there were no
vacancies (the "Whole Board"). Commencing with the Effective Date of
the Corporation's Amended Joint Plan of Reorganization under Title 11
of the United States Code, directors shall be elected at each annual
meeting of stockholders by a plurality of the votes cast and shall hold
office until the next annual meeting of stockholders and until the
election and qualification of their respective successors, subject to
the provisions of Section C of this Article SIXTH.
B. Newly created directorships and vacancies. Subject to the
rights of the holders of any series of Preferred Stock, newly created
directorships resulting from any increase in the authorized number of
directors or any vacancies of the Board of Directors resulting from
death, resignation, retirement, disqualification, removal from office
or other cause (other than a vacancy resulting from removal by the
stockholders, in which case such vacancy shall be filled by the
stockholders) shall be filled only by a majority vote of the directors
then in office, though less than a quorum, and directors so chosen
shall hold office for a term expiring at the next annual meeting of
stockholders and until such director's successor shall have been duly
elected and qualified. No decrease in the numbers of authorized
directors constituting the entire Board of Directors shall shorten the
term of any incumbent director.
C. Removal. Subject to the rights of the holders of any series
of Preferred Stock, any director, or the entire Board of Directors, may
be removed from office at any time, with or without cause and only by
the affirmative vote of the holders of a majority of the voting power
of all the then outstanding shares of the Voting Stock, voting together
as a single class.
EIGHTH: Subject to the rights of the holders of any series of
Preferred Stock, (A) any action required or permitted to be taken by
the stockholders of the Corporation may be effected at an annual or
special meeting of stockholders of the Corporation and may also
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be effected by any consent in writing by such stockholders in
accordance with the provisions of this Article EIGHTH and (B) special
meetings of stockholders of the Corporation may be called by the
Chairman of the Board, by the Board of Directors pursuant to a
resolution adopted by a majority of the Whole Board or by the Secretary
at the direction of a majority of the voting power of all the then
outstanding shares of the Voting Stock, voting together as a single
class. Unless otherwise provided in this Certificate of Incorporation,
any actin required to be taken at any annual or special meeting of
stockholders of the Corporation may be taken without a meeting, without
prior notice and without a vote, if a consent or consents in writing,
setting forth the action so taken, shall be signed by the holders of
outstanding Voting Stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and
voted.
NINTH: A. In addition to any affirmative vote required by law,
by this Amended and Restated Certificate of Incorporation or by any
Preferred Stock Designation, any merger or consolidation of the
Corporation (other than a merger not requiring a vote of the
stockholders of the Corporation under Section 251(f), Section 252(e) or
Section 253 of the GCL) or any sale, lease or exchange of all or
substantially all of the property and assets of the Corporation,
requiring the authorization or consent of the stockholders under
Section 271 of the GCL or the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation requiring a vote of the
stockholders of the Corporation under Section 275 of the GCL shall
require the affirmative vote of the holders of at least two-thirds of
the voting power of all of the then outstanding shares of the Voting
Stock, voting together as a single class. Such affirmative vote shall
be required notwithstanding any other provisions of this Amended and
Restated Certificate of Incorporation or any provision of law or of any
agreement with any national securities exchange or otherwise which
might otherwise permit a lesser vote.
B. Notwithstanding any other provisions of this Amended an
Restated Certificate of Incorporation or any provision of law which
might otherwise permit a lesser vote or no vote, but in addition to any
affirmative vote of the holders of any particular class or series of
the Voting Stock required by law, this Certificate of Incorporation or
any Preferred Stock Designation, the affirmative vote of the
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holders of at least eighty percent (80%) of the voting power of all the
then outstanding shares of the Voting Stock, voting together as a
single class, shall be required to alter, amend or repeal this Article
NINTH.
TENTH: A. A director of the Corporation shall not 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 of the GCL, or (iv) for any transaction
from which the director derived an improper personal benefit. If the
GCL is amended to authorize corporate action further elimination or
limiting the personal liability of director, then the liability of a
director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the GCL as so amended. Any repeal or
modification of the Section A by the stockholders of the Corporation
shall not adversely affect any right or protection of the director of
the Corporation with respect to events occurring prior to the time of
such repeal or modification.
B. (1) Each person who was or is made a party or is threatened
to be made a party to or is involved in any action, suit, or
proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she or a
person of whom he or she is the legal representative is or was a
director, officer, employee or agent of the Corporation or is or was
serving at the request of the Corporation, as a director, officer or
employee or agent of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to
employee benefit plans, whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or
indemnified and held harmless by the Corporation to the fullest extent
authorized by the GCL as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification
rights than said law permitted the Corporation to provide prior to such
amendment), against all expense, liability and loss (including
attorneys' fees, judgments, fines ERISA excise taxes or penalties and
amounts paid or to be paid in settlement) reasonably incurred or
suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a
director, officer employee or agent and shall inure to the benefit of
his or her heirs, executors and
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<PAGE>
administrators; provided, however, that except as provided in paragraph
(2) of this Section B with respect to proceedings seeking to enforce
rights to indemnification, the Corporation shall indemnify any such
person seeking indemnification in connection with the proceeding (or
part thereof) initiated by such person only if such proceeding (or part
thereof) was authorized by the Board of Directors of the Corporation.
The right to indemnification conferred in this Section B shall be a
contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding n
advance of its final disposition; provided, however, that if the GCL
requires, the payment of such expenses incurred by a director or
officer in his or her capacity as a director or officer (and not in any
other capacity in which service was or is rendered by such person while
a director or officer, including without limitation, service to an
employee benefit plan) in advance of the final disposition of a
proceeding, shall be made only upon delivery to the Corporation of an
undertaking by or on behalf of such director of officer, to repay all
amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this
Section B or otherwise.
(2) if a claim under paragraph (1) of this Section B is not
paid in full by the Corporation within thirty days after a written
claim has been received by the Corporation, the claimant may at any
time thereafter bring suit against the Corporation to recover the
unpaid amount of the claim and, if successful in whole or in part, the
claimant shall be entitled to be paid also the expense of prosecuting
such claim. It shall be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending
any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the Corporation)
that the claimant has not met the standards of conduct which make it
permissible under the GCL for the Corporation to indemnify the claimant
for the amount claimed, but the burden of proving such defense shall be
on the Corporation. Neither the failure of the Corporation (including
its Board of Directors, independent legal counsel or stockholders) to
have made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because
he or she has met the applicable standard of conduct set forth in the
GCL, nor an actual determination by the Corporation (including its
Board of Directors, independent legal counsel or stockholders) that the
claimant has not met such applicable standard of conduct, shall be a
defense to the action or create a presumption that the claimant has not
met the applicable standard of conduct.
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(3) The right to indemnification and the payment of expense
incurred in defending a proceeding in advance of its final deposition
conferred in this Section B shall not be exclusive of any other right
which any person may have or hereafter acquire under any statute,
provision of the certificate of incorporation, By-Law, agreement, vote
of stockholders or disinterested directors or otherwise.
(4) The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust
or other enterprise against any expense, liability or loss, whether or
not the Corporation would have the power to indemnify such person
against such expense, liability or loss under the GCL.
(5) The Corporation may, to the extent authorized from time to
time by the Board of Directors, grant rights to indemnification, and
rights to be paid by the Corporation the expenses incurred in defending
any proceeding in advance of its final disposition, to any agent to the
Corporation to the fullest extent of the provisions of this Section B
with respect to the indemnification and advancement of expenses of
directors, officers and employees of the Corporation.
ELEVENTH: In addition to any other considerations which the
Board of Directors may lawfully take into account, in determining
whether to take or to refrain from taking corporate action on any
matter, including proposing any matter to the stockholders of the
Corporation, the Board of Directors may take into account the long-term
as well as short-term interests of the Corporation and its stockholders
(including the possibility that these interests may be best served by
the continued independence of the Corporation), the interests of
creditors, customers, employees and other constituencies of the
Corporation and its subsidiaries and the effect upon communities in
which the Corporation and its subsidiaries do business.
TWELFTH: In furtherance and not in limitation of the powers
conferred by law or in this Amended and Restated Certificate of
Incorporation, the Board of Directors (and any committee of the Board
of Directors) is expressly authorized, to the extent permitted by law,
to take such action or actions as the Board or such committee may
determine to be reasonably necessary or desirable to (A) encourage any
person to enter into negotiations with the Board of Directors and
management of the Corporation with respect to any transaction which may
result in a change in control of the Corporation which is proposed or
initiated by such person or (B) contest or oppose any such transaction
which the Board of Directors or such committee determines to
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be unfair, abusive or otherwise undesirable with respect to the
Corporation and its business, assets or properties or the stockholders
of the Corporation, including, without limitation, the adoption of
plans or the issuance of rights, options, capital stock, notes,
debentures or other evidences of indebtedness or other securities of
the Corporation, which rights, options , capital stock, notes,
evidences of indebtedness and other securities (i) may be exchangeable
for or convertible into cash or other securities on such terms and
conditions as may be determined by the Board of such committee and (ii)
may provide for the treatment of any holder or class of holders thereof
designated by the Board of Directors of any such committee in respect
of the terms conditions, provisions and right of such securities which
is different from, and unequal to the terms, conditions, provisions and
rights applicable to all other holders thereof.
THIRTEENTH: The Corporation reserves the right to amend,
alter, change or repeal any provision contained in this Amended and
Restated Certificate of Incorporation, and any other provisions
authorized by the laws of the State of Delaware at the time in force
may be added or inserted, in the manner now or hereafter provided
herein by statute, and all rights, preferences and privileges of
whatsoever nature conferred upon stockholders, directors or any other
persons whomsoever by and pursuant to this Amended and Restated
Certificate of Incorporation in its present form or as amended are
granted subject to the rights reserved in this Article THIRTEENTH.
Signed and attested on this ____ day of December, 1990.
By:____________________________
D. Leonard Wise, Chairman
and Chief Executive Officer
[SEAL]
ATTEST:
________________________
Robert Duval, Secretary
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BY-LAWS
of
WHEELING-PITTSBURGH CORPORATION
Incorporated under the Laws of the State of Delaware
ARTICLE I
OFFICES AND RECORDS
SECTION 1.1 Delaware Office. The principal office of the Corporation in
the State of Delaware shall be located in the City of Wilmington, County of New
Castle, and the name and address of its registered agent is The Corporation
Trust Company, 1209 Orange Street, Wilmington, Delaware.
SECTION 1.2 Other Offices. The Corporation may have such other offices,
either within or without the State of Delaware, as the Board of Directors may
designate or as the business of the Corporation may from time to time require.
SECTION 1.3 Books and Records. The books and records of the Corporation
may be kept inside or outside the State of Delaware at such place or places as
may from time to time be designated by the Board of Directors.
ARTICLE II
STOCKHOLDERS
SECTION 2.1 Annual Meeting. The annual meeting of the stockholders of
the Corporation shall be held on the last Friday in April of each year, if not a
legal holiday, and if a legal holiday then on the next succeeding business day,
at 10:00 A.M., local time, at the principal executive offices of the
Corporation, or at such other date, place and/or time as may e fixed by
resolution of the Board of Directors adopted at least ten (10) days prior to the
date so fixed for the purpose of electing directors and for the transaction of
such other business as may properly come before the meeting.
SECTION 2.2 Special Meeting. Subject to the rights of the holders of
any class of Preferred Stock, special meetings of the stockholders may be called
by the Chairman of the Board, by the Board of Directors pursuant to a resolution
adopted by a majority of the total number of directors which the Corporation
would have if there were no vacancies (the "Whole Board") and shall be called by
the Secretary at the request of the holders of a majority of the voting power of
all of the then outstanding
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shares of the Voting Stock (as defined in Article FOURTH of the Certificate of
Incorporation), voting together as a single class.
SECTION 2.3 Place of Meeting. The Board of Directors may designate the
place of meeting for any annual meeting of the stockholders called by the Board
of Directors. If no designation is made by the Board of Directors, or if a
special meeting be otherwise called, the place of meeting shall be the principal
office of the Corporation.
SECTION 2.4 Notice of Meeting. Written or printed notice, stating the
place, day and hour of the meeting and the purpose or purposes for which the
meeting is called, shall be delivered not less than ten (10) days nor more than
sixty (60) days before the date of the meeting, either personally or by mail, to
each stockholder of record entitled to vote at such meeting. If mailed, such
motion shall be deemed to be delivered when deposited in the United States mail
with postage thereon prepaid, addressed to the stockholder at his address as it
appears on the stock transfer books of the Corporation. Such further notice
shall be given as may be required by law. Business transacted at any special
meeting shall be confined to the purpose or purposes stated in the notice of
such special meeting. Meetings may be held without notice if all stockholders
entitled to vote are present, or if notice is waived by those not present.
SECTION 2.5 Quorum. Except as otherwise provided by law or by the
Certificate of Incorporation, a majority of the outstanding shares of the
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders, except that when specified
business is to be voted on by a class or series voting as a class, the holder of
a majority of the shares of such class or series shall constitute a quorum of
such class or series for the transaction of such business. The chairman of the
meeting or a majority of the shares so represented may adjourn the meeting from
time to time, whether or not there is such a quorum. No notice of the time and
place of adjourned meetings need be given except as required by law. The
stockholders present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than quorum.
SECTION 2.6 Proxies. At all meetings of stockholders, a stockholder may
vote by proxy executed in writing by the stockholder, or by his duly authorized
attorney-in-fact. Such proxy must be filed with the Secretary of the Corporation
or his representative at or before the time of the meeting. No proxy shall be
valid after eleven (11) months from the date of its execution, unless the proxy
shall otherwise provide.
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SECTION 2.7 Judges of Election. The Board of Directors shall, in
advance of each meeting of stockholders, elect three (3) judges of election to
serve with respect to such meeting of stockholders, and if any judge so elected
shall refuse to serve or shall not be present at such stockholders' meeting, he
shall be replaced by the Board of Directors in advance of such meeting or by the
Chairman of such meeting in advance of any voting at such meeting. All voting at
stockholders' meetings shall be conducted solely under the direction of the
judges, and the decision of a majority of the judges. Any competent person over
the age of twenty-one (21) may be appointed as a judge of election, other than
any director or candidate for the office of director.
SECTION 2.8 Procedure for Election of Directors. Election of all
directors at all meetings of the stockholders at which directors are to be
elected shall be by ballot, and, except as otherwise set forth in any Preferred
Stock designation (as defined in Article FOURTH of the Certificate of
Incorporation) with respect to the right of the holders of any class or series
of Preferred Stock to elect additional directors under specified circumstances,
a plurality of the votes cast thereat shall elect. Except as otherwise provided
by law, the Certificate of Incorporation, any Preferred Stock Designation, the
By-Laws of the Corporation or resolution adopted by the Whole Board, all matters
other than the election of directors submitted to the stockholders at any
meeting shall be decided by a majority of the votes cast with respect thereto.
SECTION 2.9 Action by Written Consent. Whenever the vote of
stockholders at a meeting thereof is required, or permitted to be taken for or
in connection with any corporate action, the meeting and vote of stockholders
may be dispensed with if all of the stockholders who would have been entitled to
vote upon the action if such meeting were held shall consent in writing to such
corporate action bering taken; or if the Certificate of Incorporation authorizes
the action to be taken with the written consent of the holders of less than all
of the Voting Stock who would have been entitled to vote upon the action if a
meeting were held, then on the written consent of the stockholders having not
less than such percentage of the total number of votes as may be authorized in
the Certificate of Incorporation; provide that in no case shall the written
consent be by the holders of stock having less than the minimum percentage of
the total required by statute for the proposed corporate action, and provided
that prompt notice must be given to all stockholders of the taking of
corporation action without a meeting and by less than unanimous written consent.
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ARTICLE III
BOARD OF DIRECTORS
SECTION 3.1 General Powers. The business and affairs of the Corporation
shall be managed by or under the direction of its Board of Directors. In
addition to the powers and authorities by these By-Laws expressly conferred upon
them, the Board of Directors may exercise all such powers of the Corporation and
do all such lawful acts and things as are not be statute or by the Certificate
of Incorporation or by these By-Laws required to be exercised or done by the
stockholders.
SECTION 3.2 Number, Tenure and Qualifications. Subject to the rights of
the holders of any class or series of Preferred Stock to elect directors under
specified circumstances, the number of directors shall be fixed from time to
time exclusively pursuant to a resolution adopted by a majority of the Whole
Board. Commencing with the Effective Date of the Corporation's Amended Joint
Plan of Reorganization under Title 11 of the United States Code, directors shall
be elected at each annual meeting of stockholders by a plurality few the votes
cast and shall hold office until the next annual meeting of stockholders an
until the election and qualification few their respective successors, subject to
the provisions of Section C of Article SIXTH of the Certificate of
Incorporation.
SECTION 3.3 Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this By-Law immediately after,
and at the same place as, the Annual Meeting of Stockholders. The Board of
Directors may, by resolution provide the time and place for the holding of
additional regular meetings without other notice than such resolution.
SECTION 3.4 Special Meetings. Special meetings of the Board of
Directors shall be called at thee request of the Chairman of the Board or a
majority of the Board of Directors. The person or persons authorized to call
special meetings of the Board of Directors may fix the place and time of the
meetings.
SECTION 3.5 Notice. Notice of any special meeting shall be given to
each director at his business or residence in writing or by telegram or by
telephone communication. If mailed, such notice shall be deemed adequately
delivered when deposited in the United States mails so addressed, with postage
thereon prepaid, at least five (5) days before such meeting. If by telegram,
such notice shall be deemed adequately delivered when the telegram is delivered
to the telegraph company at least twenty-four (24) hours before such meeting. If
by telephone, the notice shall be given at least twelve (12) hours prior to the
time set for the
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meeting. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors meed to specified in the
notice of such meeting, except for amendments to those By-Laws, as provided
under Article XII Section 7.1. A meeting may be held at any time without notice
if all the directors are present or if those not present waive notice of the
meeting in writing, either before or after such meeting.
SECTION 3.6 Quorum. A whole number of directors equal to at least a
majority of the Whole Board shall constitute a quorum for the transaction few
business, but if at any meeting of the Board of Directors there shall be less
than a quorum present, a majority of the directors present may adjourn the
meeting from time to time without further notice. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors. The directors present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough directors to leave less than a quorum.
SECTION 3.7 Vacancies. Subject to the rights of the holders of any
class or series of Preferred Stock, vacancies resulting from death, resignation,
retirement, disqualification, removal from office or other cause (other than
vacancy resulting from removal by the stockholders which shall be filled by the
stockholders), and newly created directorships resulting from any increase in
the authorized number of directors may be filled only by the affirmative vote of
a majority of the remaining directors, though less than a quorum of the Board of
Directors, and directors so chosen shall hold office for a term expiring at the
next annual meeting of stockholders and until such director's successor shall
have been duly elected and qualified. No decrease in the number of authorized
directors constituting the Whole Board shall shorten the term of any incumbent
director.
SECTION 3.8 Executive Committee. The Board of Directors, as soon as
practicable following the Effective Date of the Corporation's Amended Joint Plan
of Reorganization under Title 11 of the United States Code, and immediately
following each annual meeting of stockholders or a special meeting of the same
held for the election of a majority of directors, shall meet and shall appoint
from its number by a majority vote of the Whole Board an Executive Committee of
such number of members as from time to time may be selected by the Board, to
serve until the next annual or special meeting at which a majority of directors
is elected or until the respective successor of each is duly appointed. The
Executive Committee shall possess and may exercise all the powers and authority
of the Board of Directors in the management and direction few the business and
affairs of the Corporation, except as limited by law and except for the power to
change the membership or to fill vacancies in Board or said Committee. The
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Board shall have the power at any time to change the membership of said
Committee, to fill vacancies in it, to make rules for the conduct of its
business, or to dissolve it.
SECTION 3.9 Removal. Subject to the rights of the holders of any class
or series of Preferred Stock, any director, or the entire Board of Directors,
may be removed from office at any time, with or without cause by the affirmative
vote of the holders of at least a majority of the voting power of all the
then-outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (the "Voting Stock"), voting together as
a single class.
ARTICLE IV
OFFICERS
SECTION 4.1 Elected Officers. The elected officers of the Corporation
shall be a Chairman of the Board of Directors, a Secretary, a Treasurer, and
such other officers (including, without limitation, a President) as the Board of
Directors from time to time may deem proper. The Chairman of the Board of
Directors shall be chosen from the directors. all officers chosen by the Board
of Directors shall each have such powers and duties as generally pertain to
their respective offices, subject to the specific provisions of this ARTICLE IV.
Such officers shall also have such powers and duties as from time to time may be
conferred by the Board of Directors or by any Committee thereof.
SECTION 4.2 Election and Term of Office. The elected officers of the
Corporation shall be elected annually by the Board of Directors at the regular
meeting of the Board of Directors held after each annual meeting of the
stockholders. If the election of officers shall not be held at such meeting,
such election shall be held as soon thereafter as convenient. each officer shall
hold office until his successor shall have been duly elected and shall have
qualified or until his death or until he shall resign, but any officer may be
removed from office at any time by the affirmative vote of a majority of the
members of the Whole Board.
SECTION 4.3 Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the stockholders and of the Board of Directors. The
Chairman of the Board shall have responsibility for overseeing the general
management of the affairs of the Corporation and shall perform all duties
incidental to his office which may be required by law and all such other duties
as are properly required of him by the Board of Directors. Except where by law
the signature of the President (if any) is required, the chairman of the Board
shall possess the
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<PAGE>
same power as the President to sign all certificates, contracts, and other
instruments of the Corporation which may be authorized by the Board of
Directors. He shall make reports to the Board of Directors and the stockholders,
and shall perform all such other duties as are properly required of him by the
Board of Directors. He shall see that all orders and resolutions of the Board of
Directors and of any committee thereof are carried into effect.
SECTION 4.4 President. The President (if one shall have been chosen by
the Board of Directors) shall act in a general executive capacity and shall
assist the Chairman of the Board in the administration and operation of the
Corporation's business and general supervision of its policies and affairs. The
President shall, in the absence of or because of the inability to act as the
Chairman of the Board, perform all duties of the Chairman of the Board and
preside at all meetings of stockholders and of the Board of Directors. The
President may sign with the Secretary, or an Assistant Secretary, or any other
proper officer of the Corporation authorized by the Board of Directors,
certificates, contracts, and other instruments of the Corporation as authorized
by the Board of Directors. In the event of the death, inability or refusal to
act of the President, the Board of Directors shall promptly meet for the purpose
of electing his successor.
SECTION 4.5 Removal. Any officer elected by Board of Directors may be
removed by a majority of the members of the Whole Board whenever, in their
judgment, the best interests of the Corporation would be served thereby. No
elected officer shall have any contractual rights against the Corporation for
compensation by virtue of such election beyond the date of the election of his
successor, his death, his resignation or his removal, whichever event shall
first occur, except as otherwise provided in an employment contract or under an
employee deferred compensation plan.
SECTION 4.6 Vacancies. A newly created office and a vacancy in any
office because of death, resignation, or removal may be filled by the Board of
Directors for the unexpired portion of the term at any meeting of the Board of
Directors.
ARTICLE V
STOCK CERTIFICATES AND TRANSFERS
SECTION 5.1 Stock Certificates and Transfers. The interest of each
stockholder of the Corporation shall be evidenced by certificates for shares of
stock in such form as the appropriate officers of the Corporation may from time
to time prescribes. The shares of the stock of the Corporation shall be
transferred on the books of the Corporation b the holder thereof in person or
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<PAGE>
by his attorney, upon surrender for cancellation of certificates for the same
number of shares, with an assignment and power of transfer endorsed thereon or
attached thereto, duly executed, with such proof of the authenticity of the
signature as the Corporation or its agents may reasonably require.
The certificates of stock shall be signed, countersigned and registered
in such manner as the Board of Directors may be resolution prescribe, which
resolution may permit all or any of the signatures on such certificates to be in
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate has ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue.
ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.1 Fiscal Year. The fiscal year of the Corporation shall begin
on the first day of January and end on the last day of December of each year, or
shall begin and end on such other days as shall be fixed by resolution of the
Board of Directors.
SECTION 6.2 Dividends. The Board of Directors may from time tot time
declare, and the Corporation may pay, dividends on its outstanding shares in the
manner and upon the terms and conditions provided by law.
SECTION 6.3 Seal. The corporate seal may bear in the center the emblem
of some object, and shall have inscribed thereunder the words "Corporate Seal"
and around the margin thereof the words "Wheeling-Pittsburgh Corporation -
Delaware
1990."
SECTION 6.4 Waiver of Notices. Whenever any notice is required to be
given to any stockholder or director of the Corporation under the provisions of
the General Corporation Law of the State of Delaware, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether before
or after the time stated thereon, shall be deemed equivalent to the giving of
such notice. Neither the business to be transacted at, nor the purpose of, any
annual or special meeting of the stockholders or the Board of Directors need be
specified in any waiver of notice of such meeting.
SECTION 6.5 Audits. The accounts, books and records of the Corporation
shall be audited upon the conclusion of each fiscal
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<PAGE>
year by an independent certified public accountant selected by the Board of
Directors to cause such audit to be made annually.
SECTION 6.6 Resignations. Any director or any officer, whether elected
or appointed, may resign at any time by serving written notice of such
resignation on the Chairman of the Board, the President, or the Secretary, and
such resignation shall be deemed to be effective as of the close of business on
the date and notice is received by the Chairman of the Board, the President, or
the Secretary. No formal action shall be required of the Board of Directors or
the stockholders to make any such resignation effective.
SECTION 6.7 Indemnification of Directors, Officers, Employees and
Agents. The Corporation shall provide indemnification as set forth in Article
TENTH of the Certificate of Incorporation.
ARTICLE VII
AMENDMENTS
SECTION 7.1 Amendments. These By-Laws may be amended, added to,
rescinded or repealed at any meeting of the Board of Directors or of the
stockholders, provided notice of the proposed change was given in the notice of
the meeting and, in the case of a meeting of the Board of Directors, in a notice
given not less than two days prior to the meeting.
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CERTIFICATE OF INCORPORATION
OF
W-P STEEL CORPORATION
------------------------------------
FIRST. The name of this corporation is W-P STEEL CORPORATION.
SECOND. The address of the corporation's registered office in the
State of Delaware is No. 1209 Orange Street, in the City of Wilmington, County
of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
THIRD. The nature of the business, objects and purposes proposed
to be transacted, promoted and carried on includes any lawful act or activity
for which corporations may be organized under the General Corporation Law of the
State of Delaware, unless expressly limited herein.
FOURTH. The total number of shares of all classes of stock which
the corporation shall have authority to issue is 100 shares, of the par value of
$0.01 per share, Common Stock. The holders of the Common Stock shall exclusively
possess all voting power and each share shall have one vote.
FIFTH. The name and mailing address of the incorporator is Robert
Duval, 1134 Market Street, Wheeling, West Virginia.
SIXTH. The corporation is to have perpetual existence.
SEVENTH (a) Unless expressly provided in this certificate of
incorporation or applicable law, any provision for the management of the
business and for the conduct of the affairs of the corporation, including any
business and for the conduct of the affairs of the corporation, including any
provision creating, defining, limiting and regulating the powers of the
corporation, its stockholders, directors and officers, shall be stated in the
by-laws or if not so stated are reserved for action by the Board of Directors.
(b) The by-laws of the corporation may be altered, amended and
repealed, and new by-laws may be adopted by the Board of Directors at any
regular or special meeting, subject to the power of the holders of the capital
stock of the corporation to alter, amend or repeal the by-laws.
(c) All of the objects specified in this certificate of
incorporation shall be construed both as objects and as powers, and their
enumeration shall not be held to limit in
<PAGE>
any manner the general powers now or hereafter conferred on this corporation by
any other clause of this certificate of incorporation or by the laws of the
State of Delaware.
EIGHTH. A director of the corporation shall not 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 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived any
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. Any repeal or modification of the
foregoing paragraph by the stockholders of the corporation shall be prospective
only and shall not adversely affect any right or protection of a director of the
corporation existing at the time of such repeal or modification.
NINTH. Election of directors need not be by written ballot.
TENTH. The corporation reserves the right to amend, alter, change
or repeal any provision contained in this Certificate of Incorporation, and as
it may hereinafter be altered, changed or amended, in any manner now or
hereafter provided by the laws of the State of Delaware.
D. Leonard Wise Four Gateway Center
Pittsburgh, Pennsylvania 15222
James L. Wareham 1134 Market Street
Wheeling, West Virginia 26003
Michio Kubota Penn and Main Street
Follansbee, West Virginia 26037
Frederick G. Chbosky 1134 Market Street
Wheeling, West Virginia 26003
I, Robert Duval, being the sole incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Delaware, do make this certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are true, and
accordingly have hereunto set my hand this 19th day of November, 1990.
___________________________________
Robert Duval
Sole Incorporator
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<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
W-P STEEL CORPORATION
BEFORE PAYMENT OF CAPITAL
Pursuant to Section 241 of Title 8 of the Delaware Code
of 1953, as amended
We, the undersigned, being all of the Directors of W-P Steel
Corporation, a corporation organized and existing under and by virtue of the
General Corporation Law of the State of Delaware, DO HEREBY CERTIFY:
FIRST: That pursuant to a unanimous written consent of the
Board of Directors of W-P Steel Corporation, resolutions were adopted setting
forth a proposed amendment to the Certificate of Incorporation of said
corporation and declaring said amendment advisable. The resolution setting forth
the proposed amendment is as follows:
IT IS HEREBY RESOLVED, that Article FIRST of the Certificate
of Incorporation of the Corporation be amended in its entirety
to read as follows:
FIRST: The name of this corporation is Wheeling-Pittsburgh
Steel Corporation.
SECOND: That no part of the capital of said corporation having
been paid, this certificate is filed pursuant to Section 241 of Title 8 of the
Delaware Code, as amended.
IN WITNESS WHEREOF, we have hereunto set our respective hands
this __ day of December, 1990.
-----------------------------
D. Leonard Wise
-----------------------------
James L. Wareham
-----------------------------
Michio Kubota
------------------------------
Frederick G. Chbosky
BY-LAWS
OF
WHEELING-PITTSBURGH STEEL CORPORATION
(DELAWARE)
As Amended through January 3, 1991
ARTICLE I
STOCKHOLDERS
SECTION 1.01. Annual Meetings. Each annual meeting of the stockholders
shall be held at such date and time, and at such place as may be fixed by
resolution of the Board of Directors.
SECTION 1.02. Special Meetings. Special meetings of the stockholders
may be called at any time by the Chairman of the Board of Directors or the Board
of Directors or the Secretary at the request of the holders of a majority of the
voting power of all the then outstanding shares of voting stock. Special
meetings shall be held at such time and place as may be designated in the call.
SECTION 1.03. Notice of Meetings. Except as otherwise provided by law,
written notice of each meeting of stockholders, whether annual or special. shall
be given at least ten and not more than sixty days prior to the date on which
the meeting is to be held to each stockholder of record entitled to vote
thereat. Each such notice shall specify the place, day and hour of the meeting
and, in the case of a special meeting, shall briefly state the purpose or
purposes for which the meeting is called. A written waiver of notice, signed
either before or after the date and time fixed for the meeting by the person or
persons entitled to such notice, shall be deemed the equivalent of such notice.
Neither the business to be transacted at nor the purpose of the meeting need be
specified in a waiver of notice of such meeting.
SECTION 1.04. Quorum. A quorum for the transaction of business is a
majority of all of the shares entitled to vote, in person or represented by
proxy. The stockholders present at a duly organized meeting can continue to do
business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum. Any meeting may be adjourned to a
designated time and place, by vote of those present, whether or not there by a
quorum, without further notice than announcement at the meeting at which
adjournment is taken.
SECTION 1.05. Voting. At every meeting of stockholders each holder of
record of issued and outstanding shares of voting stock of the corporation
entitled to vote at such meeting shall be entitled to vote in person or by proxy
and, except where a date has been fixed as the record date for the determination
of stockholders entitled to notice of or to vote at such meeting,
<PAGE>
no holder of record of a share of stock which has been transferred on the books
of the corporation within ten days next preceding the date of such meeting shall
be entitled to notice of or to vote at such meeting in respect of such share so
transferred. In all cases, any action of the stockholders at a meeting shall be
taken and be valid upon majority vote of the shares present or represented by
proxy, except as otherwise expressly provided by law or by the certificate of
incorporation.
SECTION 1.06. Action by Written Consent. Whenever the vote of
stockholders at a meeting thereof is required or permitted to be taken, such
action may be taken without a meeting, without prior notice and without a vote,
if a consent or consents in writing, setting forth the actions taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting. Where corporate action is taken in such manner by less than unanimous
written consent, prompt notice of the taking of such action shall be given to
all stockholders who have not consented in writing thereto.
ARTICLE II
DIRECTORS
SECTION 2.01. Number and Election. The number of directors which shall
constitute the full Board of Directors shall be fixed from time to time by
resolution of the Board of Directors but shall be not less than three nor more
than fifteen. Directors need not be stockholders.
SECTION 2.02. Regular and Annual Meetings. An annual meeting of the
Board of Directors shall be held immediately after, and at the same place as,
the annual meeting of stockholders. Other meetings may be held at such intervals
and at such time and place as shall from time to time be determined by the Board
of Directors without other notice than such resolution.
SECTION 2.03. Special Meetings. Special meetings of the Board of
Directors may be called at any time by the Chairman of the Board or by a
majority of the Board of Directors, to be held on such day and at such time and
place as shall be specified by the person or persons calling the meeting.
SECTION 2.04. Notice of Meetings. Except as otherwise expressly
required by law, notice of the annual meeting or of any regular meeting of the
Board of Directors need not be given. Except as otherwise expressly required by
law, notice of every special meeting of the Board of Directors shall be given
specifying the place, day and time thereof and the general nature of the
business to be transacted thereat, either by being mailed on at least the third
day prior to the date of the meeting or by being given personally or by
telephone or other electronic means on at least the day prior to the date of the
meeting. A written waiver of notice of a special meeting, signed by the person
or persons entitled to such notice, whether before or after the time stated
therein, shall be deemed the equivalent of such notice, and attendance of a
director
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<PAGE>
at a meeting shall constitute a waiver of notice of such meeting except when the
director attends the meeting for the express purpose of objecting, when he
enters the meeting, to the transaction of any business because the meeting is
not lawfully called or convened.
SECTION 2.05. Quorum and Manner of Acting. A quorum for the transaction
of business is a majority of the full Board of Directors. If a quorum is not
present at commencement of any meeting, the meeting may be adjourned from time
to time by a majority of the directors present until a quorum shall be present.
The directors present at a duly organized meeting may continue to do business
notwithstanding the withdrawal of directors to leave less than a quorum present.
Any matter shall carry upon majority affirmative vote of the members voting,
with abstentions considered as not voting.
SECTION 2.06. Resignations. A director may resign by submitting his
written resignation to the Chairman of the Board of Directors or to the
Secretary. Unless otherwise specified therein the resignation of a director need
not be accepted to make it effective.
SECTION 2.07. Removal of Directors. The entire Board of Directors or
any individual director may be removed at any time with or without cause by
majority vote of the issued and outstanding shares of voting stock of the
corporation.
SECTION 2.08. Vacancies. Any vacancy that shall occur in the Board of
Directors by reason of death, resignation, removal, increase in the number of
directors or any other cause whatever shall be filled by vote of the Board of
Directors, whether or not a quorum, and each person so elected shall be a
director until he or his successor is elected by the stockholders at a meeting
called for the purpose of electing directors, or until his prior death,
resignation or removal.
SECTION 2.09. Compensation of Directors. The Corporation may allow
compensation to its directors who shall not otherwise be in the employ of the
corporation or any of its subsidiaries for their services, as determined from
time to time by resolution adopted by the Board of Directors.
SECTION 2.10. Committees. The Board of Directors may, by resolution
adopted by a majority of the whole Board, designate one or more committees,
consisting of directors, to have and exercise such authority of the Board of
Directors in the business and affairs of the corporation as the resolution of
the Board of Directors creating such committee may specify. In the absence or
disqualification of any member of such committee or committees, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another director
to act at the meeting in the place of such absent or disqualified member. The
Chairman of the Board shall be an ex-officio, non-voting member of each
committee.
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<PAGE>
ARTICLE III
OFFICERS
SECTION 3.01. Executive Officers. The executive officers of the
corporation shall be a Chairman of the Board, who shall be Chief Executive
Officer, a President, who shall be Chief Operating Officer, such number of
Executive Vice Presidents and Vice Presidents as may be determined by the Board
of Directors, a Secretary, a Treasurer and a Comptroller, all of whom shall be
elected by the Board of Directors. Any two or more offices may be held by the
same person except the offices of Chief Executive Officer and Secretary and
except the offices of Treasurer and Comptroller. Each executive officer shall be
elected by and hold office at the pleasure of the Board of Directors, and his
compensation shall be fixed from time to time by the Board of Directors.
SECTION 3.02. Additional and Assistant Officers. The Board of Directors
from time to time may elect such additional officers and such assistant officers
to serve at will or for such periods, have such authority and perform such
duties, as shall be determined by the Board of Directors.
SECTION 3.03. The Chairman of the Board. The Chairman of the Board
shall preside at all meetings of the Board of Directors. In addition, the
Chairman of the Board shall have and exercise such further powers and duties as
from time to time may be prescribed in these by-laws or by the Board of
Directors. In his capacity as Chief Executive Officer he shall, subject to the
direction of the Board of Directors, have supervision of and responsibility for
all the property, business and affairs of the corporation and shall see that the
policies and programs adopted or approved by the Board of Directors are carried
out.
SECTION 3.04. The President. The President shall have and exercise such
powers and duties as from time to time may be prescribed in these by-laws or by
the Board of Directors. In his capacity as Chief Operating Officer he shall,
subject to the control of the Board of Directors and the Chief Executive
Officer, have active management and supervision over the business of the
corporation and shall see that the policies and programs adopted or approved by
the Board are carried out.
SECTION 3.05. The Executive Vice Presidents, Vice Presidents and
Assistant Vice Presidents. Each Executive Vice President and each Vice President
shall have and exercise such powers and duties as from time to time may be
conferred upon them by the Board of Directors or by the Chief Executive Officer.
One or more Assistant Vice Presidents, if elected by the Board of
Directors, shall assist any Vice President in the performance of his duties and
shall also exercise such further powers and duties as from time to time may be
conferred upon or assigned to them or any of them by the Board of Directors or
the Chief Executive Officer of the corporation.
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<PAGE>
SECTION 3.06. The Secretary and Assistant Secretary. It shall be the
duty of the Secretary (a) to keep or cause to be kept an original or duplicate
record of the proceedings of the stockholders and the Board of Directors and a
copy of the certificate of incorporation of the corporation and of these
by-laws; (b) to attend to the giving of notices of the corporation as may be
required by law or these by-laws; (c) to be custodian of the corporation's
contracts, policies, leases, deeds and other indicia of title, and all other
non-financial business records; (d) to be custodian of the seal of the
corporation and see that the seal is affixed to such documents as may be
required; (e) to have charge of and keep at the principal executive office of
the corporation, or cause to be kept at the office of a transfer agent or
registrar, the stock books of the corporation, and an original or duplicate
stock ledger, giving the names of the stockholders in alphabetical order and
showing their respective addresses, the number and classes of shares held by
each, the number and date of each certificate issued for shares and the date of
cancellation of every certificate surrendered for cancellation; and (f) to
perform all duties incident to the office of Secretary and such other duties as
may from time to time be prescribed by the Board of Directors or the Chief
Executive Officer.
One or more Assistant Secretaries, if elected by the Board of
Directors, shall assist the Secretary in the performance of his duties and shall
also exercise such further powers and duties as from time to time may be
conferred upon or assigned to them by the Board of Directors or the Chief
Executive Officer of the corporation. At the discretion of the Secretary or in
his absence or disability an Assistant Secretary shall perform the duties of the
Secretary.
SECTION 3.07. The Treasurer and Assistant Treasurer. It shall be duty
of the Treasurer (a) to be the principal officer of the corporation in charge of
financial matters other than those for which the Comptroller is responsible; (b)
to have charge and custody of and be responsible for the corporation's funds,
securities and investments; (c) to receive, endorse for collection and give
receipts for checks, notes, obligations, funds and securities of the corporation
and to deposit moneys and other valuable effects in the name and to the credit
of the corporation in such depositories as shall be designated by the Board of
Directors; (d) to cause to be disbursed the funds of the corporation by payment
in cash or by checks or drafts upon the authorized depositories of the
corporation and to cause to be taken and preserved proper vouchers for such
disbursements; (e) to see that the reports, statements, certificates and other
documents required by law to be filed with public and other bodies are properly
prepared and filed; (f) to render to the Chief Executive Officer and the Board
of Directors whenever they may require it an account of all his transactions as
Treasurer; and (g) to perform all duties incident to the office of Treasurer and
such other duties as may from time to time be prescribed by the Board of
Directors or the Chief Executive Officer.
One or more Assistant Treasurers, if elected by the Board of Directors,
shall assist the Treasurer in the performance of his duties and shall also
exercise such further powers and duties as from time to time may be conferred
upon or assigned to them or any of them by the Board of Directors or the Chief
Executive Officer of the corporation. At the discretion of the Treasurer or in
his absence or disability an Assistant Treasurer shall perform the duties of the
Treasurer.
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<PAGE>
SECTION 3.08. The Comptroller and Assistant Comptroller. The
Comptroller shall be responsible for the keeping of complete and accurate
records of the business, assets, liabilities and transactions of the
corporation, for the preparation of such financial statements of the corporation
as may be required by law or requested by the Board of Directors or the Chief
Executive Officer, for the supervision on behalf of the corporation of the
audits made by independent accountants of the corporation's books, records and
financial statements, and for all matters relating to the accounting by the
corporation for its operations and financial position. The Comptroller shall
perform such other duties as may from time to time be prescribed by the Board of
Directors or the Chief Executive Officer.
One or more Assistant Comptrollers, if elected by the Board of
Directors, shall assist the Comptroller in the performance of his duties and
shall also exercise such further powers and duties as from time to time may be
conferred upon or assigned to them or any of them by the Board of Directors or
the Chief Executive Officer of the corporation. At the discretion of the
Comptroller or in his absence or disability an Assistant Comptroller shall
perform the duties of the Comptroller.
SECTION 3.09. Removal of Officers. Any officer of the corporation may
be removed,either for cause or without cause, by affirmative vote of a majority
of the full Board of Directors.
SECTION 3.010. Vacancies. Vacancy in any office or position by reason
of death, resignation, removal, or any other cause shall be filled in the manner
provided in this Article III for regular election or appointment to such office
or position.
ARTICLE IV
CONTRACTS AND OTHER INSTRUMENTS
SECTION 4.01. All contracts and other instruments requiring execution
by the corporation may be executed and delivered by any officer or assistant
officer, subject to any limitation which may be expressed by resolution of the
Board of Directors. Any person having authority to sign on behalf of the
corporation may delegate, from time to time, by instrument in writing, all or
any part of such authority to any person or persons if authorized so to do by
the Board of Directors.
ARTICLE V
SHARES OF CAPITAL STOCK
SECTION 5.01. Stock Certificates and Transfers. The interest of each
stockholder of the corporation shall be evidenced by certificates for shares of
stock in such form as the appropriate officers of the corporation may from time
to time prescribe. The shares of the stock of the corporation shall be
transferred on the books of the corporation by the holder thereof in person or
by his attorney, upon surrender for cancellation of certificates for the same
number of shares, with an assignment and power of transfer endorsed thereon or
attached thereto, duly
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<PAGE>
executed, with such proof of the authenticity of the signature as the
corporation or its agents may reasonably require.
The certificates of stock shall be signed, countersigned and registered
in such manner as the Board of Directors may by resolution prescribe, which
resolution may permit all or any of the signatures on such certificates to be in
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate has ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.01. Offices. The executive office of the corporation shall be
at such place as the Board of Directors may designate.
SECTION 6.02. Corporate Seal. The Board of Directors shall prescribe
the form of a suitable corporate seal, which shall contain the full name of the
corporation and the year and state of incorporation. Such seal may be used by
causing it or a facsimile or reproduction thereof to be affixed to or placed
upon the document to be sealed.
SECTION 6.03. Fiscal Year. The fiscal year of the corporation shall
begin on the first day of January and end on the last day of December in each
year, or shall begin and end on such other days as shall be fixed by resolution
of the Board of Directors.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS,
OFFICERS AND EMPLOYEES
(1) Each person who was or is made a party or is threatened to be made
a party to or is involved in any action, suit, or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she or a person of whom he or she is the legal
representative is or was a director, officer or employee of the corporation or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in an official
capacity as a director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent, shall be indemnified
and held harmless by the corporation to the fullest extent authorized by the
laws of Delaware as the same exist or may hereafter be amended (but, in the case
of any such amendment, only to the extent that such amendment permits the
corporation to provider broader indemnification rights than said law permitted
the corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA exercise
taxes or penalties and
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<PAGE>
amounts paid or to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith and such indemnification shall continue as
to a person who had ceased to be a director, officer, employee or agent and
shall inure to the benefit of his or her heirs, executors and administrators;
provided, however, that except as provided in paragraph (2) of this Article VII
with respect to proceedings seeking to enforce rights to indemnification, the
corporation shall indemnify any such person seeking indemnification in
connection with a proceeding (or part thereof) initiated by such person only if
such proceeding (or part thereof) was authorized by the Board of Directors of
the corporation. The right to indemnification conferred in this Article VII
shall be a contract right and shall include the right to be paid by the
corporation the expenses incurred by a director or officer in his or her
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding, shall be made only upon delivery to
the corporation of an undertaking by or on behalf of such director or officer,
to repay all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this Article VII or
otherwise.
(2) If a claim under paragraph (1) of this Article VII is not paid in
full by the corporation within thirty days after a written claim has been
received by the corporation, the claimant may at any time thereafter bring suit
against the corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the corporation) that the
claimant has not met the standards of conduct which make it permissible under
the GCL for the corporation to indemnify the claimant for the amount claimed,
but the burden of proving such defense shall be on the corporation. Neither the
failure of the corporation (including its Board of Directors, independent legal
counsel or stockholders) to have made a determination prior to the commencement
of such action that indemnification of the claimant is proper in the
circumstances because he or she has not the applicable standard of conduct set
forth in the GCL, nor an actual determination by the corporation (including its
Board of Directors, independent legal counsel or stockholders) that the claimant
has not met such applicable standard of conduct, shall be a defense to the
action or create a presumption that the claimant has not met the applicable
standard of conduct.
(3) The right to indemnification and the payment of expenses incurred
in defending a proceeding in advance of its final disposition conferred in this
Article VII shall not be exclusive of any other right which any person may have
or hereafter acquire under any statute, provision of the certificate of
incorporation, by-laws, agreement, vote of stockholders or disinterested
directors or otherwise.
(4) The corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the
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<PAGE>
corporation would have the power to indemnify such person against such expense,
liability or loss under the General Corporation Law of the State of Delaware.
(5) The corporation may, to the extent authorized from time to time by
the Board of Directors, grant rights to indemnification, and rights to be paid
by the corporation the expenses incurred in defending any proceeding in advance
of its final disposition, to any agent of the corporation to the fullest extent
of the provisions of this Article VII with respect to the indemnification and
advancement of expenses of directors, officers and employees of the corporation.
The indemnification provided by this Article VII shall not be
deemed exclusive of any other rights to which a person seeking indemnification
may be entitled under the certificate of incorporation, any agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent of the type referred to above and shall inure to the
benefit of the heirs, executors and administrators of such a person.
ARTICLE VIII
AMENDMENTS
These by-laws may be altered, amended and repealed, and new by-laws may
be adopted at any meeting of the Board of Directors or as provided in the
certificate of incorporation or as otherwise provided by law.
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To the Governor of the Commonwealth of Pennsylvania:
Sir: -- In compliance with the requirements of an act of the General
Assembly of the Commonwealth of Pennsylvania, entitled "An act to provide for
the Incorporation and regulation of certain corporations," approved the 29th day
of April A.D. 1874, and the several supplements thereto, the undersigned,
________________ all ____________ of whom are citizens of Pennsylvania, having
associated themselves together for the purpose hereinafter specified, and
desiring that they may be incorporated, and that letters patent may issue to
them and their successors according to law, do hereby certify:
1. The name of the proposed corporation is Consumers Mining Company.
2. Said corporation is formed for the purpose of mining and producing
coal and manufacturing coke and the by-products of coal and coke; buying,
transporting, marketing and selling coal and coke, and the by-products thereof;
and in connection therewith purchasing, leasing and acquiring in fee simple, or
otherwise, real estate, coal and coal rights, buildings, improvements, dwelling,
houses, machinery and appliances, and holding, selling, leasing, exchanging or
otherwise disposing of the same.
3. The business of said corporation is to be transacted in the City of
Pittsburgh, County of Allegheny and State of Pennsylvania.
<PAGE>
4. Said corporation is to exist perpetually.
5. The names and residences of the subscribers and the number of shares
subscribed by each, are as follows:
Name Residence No. of Shares
Charles M. Thorp Pittsburgh, Pa. 248
S. Leo Ruslander " " 1
George K. Warn " " 1
================================================================================
6. The number of directors of said corporation is fixed at three, and
the names and residences of the directors chosen for the first year are as
follows:
Name Residence
Charles M. Thorp Pittsburgh, Pa.
S. Leo Ruslander " "
George K. Warn " "
7. The amount of capital stock of said corporation is twenty-five
thousand ($25,000) dollars, divided into two hundred fifty (250) shares of the
par value of one hundred ($100) dollars each, and Twenty-five hundred ($2,500)
dollars being ten (10%) percent of said capital stock, has been paid to the
treasurer of said corporation, whose name and residence are:
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<PAGE>
D. A. Burt, Steubenville, Ohio.
8. The power is hereby given to the board of directors of said
corporation to sell, release and convey, from time to time, the real estate of
said corporation or any part thereof.
Charles M. Thorp (SEAL)
S. Leo Ruslander (SEAL)
George K. Warn (SEAL)
State of Pennsylvania )
) ss:
County of Allegheny )
Before me a Notary Public in and for the county aforesaid, personally
came Charles M. Thorp, S. Leo Ruslander and George K. Warn who in due form of
law acknowledged the foregoing instrument to be their net and deed for the
purposes therein specified.
Witness my hand and seal of office, this 3rd day of May, 1918.
(SEAL)
State of Pennsylvania ) Anna L. Norton, Notary Public
) ss:
County of Allegheny ) My commission expires February 21,
1919.
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<PAGE>
Personally appeared before me this 3rd day of May, 1918.
Charles M. Thorp, S. Leo Ruslander and George K. Warn
who being duly sworn, according to law depose and say that the statements
contained in the foregoing instrument are true.
Sworn to and subscribed before me, the day and year aforesaid
Anna L. Norton, Notary Public Charles M. Thorp
(SEAL) S. Leo Ruslander
My commission expires February 21, 1919 George K. Warn
APPLICATION OF CONSUMERS MINING CO.
EXECUTIVE CHAMBER
Harrisburg, Pa. May 29, 1918
To the Secretary of the Commonwealth
Having examined the within application and found it to be in proper
form, and within the purposes [??] of the class of corporations specified in
section two of the act, entitled "An act to provide for the incorporation and
regulation of certain corporation," approved April 30th, A.D. 1874, and the
several supplement thereto, I hereby approve the same, and direct that letters
patent issue according to law.
Martin G. Brumbaugh
-------------------------------
Governor
SECRETARY'S OFFICE
PENNSYLVANIA, SS:
Enrolled in Charter Book, No. 173 page 46.
Witness my hand and seal of Office, at Harrisburg, this 29th day of May
A.D. 1918.
Frederick A. [Text Illegible]
Secretary of the Commonwealth
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<PAGE>
CONSUMERS MINING COMPANY
JOINT AGREEMENT OF MERGER AND CONSOLIDATION made and entered into as of
this 21st[??] day of May, 1930, by and between CONSUMERS MINING COMPANY, a
corporation of the Commonwealth of Pennsylvania, and the Directors thereof,
parties of the first part, LA BELLE COKE COMPANY, a corporation of the
Commonwealth of Pennsylvania, and the Directors thereof, parties of the second
part, and WHEELING COKE COMPANY, a corporation of the Commonwealth of
Pennsylvania, and the Directors thereof, parties of the third part:
WHEREAS the principal and registered offices of the Consumers Mining
Company, of the La Belle Coke Company and of the Wheeling Coke Company in the
Commonwealth of Pennsylvania are at Pittsburgh, Pennsylvania, and
WHEREAS the Consumers Mining Company, under the Certificate of
Incorporation of said Company filed in the office of the Secretary of the
Commonwealth of Pennsylvania, on or about the 29th day of May, 1918, has an
authorized capital stock of twenty-five thousand dollars ($25,000.00), divided
into two hundred and fifty (250) shares of the par value of one hundred dollars
($100.00) each, all of which are common stock; and there have been duly issued
and are now outstanding certificates for two hundred and fifty (250) shares of
said common stock, and
WHEREAS La Belle Coke Company, under the Certificate of Incorporation
of said Company filed and recorded in the office of the Secretary of the
Commonwealth of Pennsylvania on or about the 8th day of December, 1903, has an
authorized capital stock of thirty thousand dollars ($30,000.00) divided into
three hundred (300) shares of the par value
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<PAGE>
of one hundred dollars ($100.00) each, all of which are common stock; and there
have been duly issued and are now outstanding certificates for three hundred
(300) shares of said common stock, and
WHEREAS Wheeling Coke Company, under the Certificate of Incorporation
of said Company filed and recorded in the office of the Secretary of the
Commonwealth of Pennsylvania on or about the 14th day of April, 1903, has an
authorized capital stock of thirty thousand dollars ($30,000.00) divided into
three hundred (300) shares of the par value of one hundred dollars ($100.00)
each, all of which are common stock; and there have been duly issued and are now
outstanding certificates for three hundred (300) shares of said common stock,
and
WHEREAS the above-mentioned corporations are transacting the same or a
similar line of business, and
WHEREAS the respective Boards of Directors of said corporations deem it
advisable, to the end that greater efficiency and economy of management may be
accomplished and otherwise and generally to the advantage and welfare of said
corporations and their several[??] and respective stockholders, to merge and
consolidate said corporations under and pursuant to the provisions of an act of
the General Assembly of the Commonwealth of Pennsylvania, entitled "An Act
authorizing the merger and consolidation of certain corporations," approved May
3, 1909, and of such other statutes of the Commonwealth of Pennsylvania as may
be applicable thereto.
[Text illegible] [NOW???,] THEREFORE, in consideration of the premises
and the mutual agreements, provisions, covenants and grants here in contained,
it is hereby agreed by
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<PAGE>
and between the said parties hereto, and in accordance with said statutes, that
the property, corporate rights, franchises, powers and privileges of La Belle
Coke Company and Wheeling Coke Company shall be and they are hereby are merged
and consolidated with and into those of Consumers Mining Company and shall be
transferred to and vested in said last mentioned corporation, upon the consent
thereto by the stockholders of each of said corporations and the filing of
certificates thereof, and the certificate of the Auditor General required by law
in such cases, with a copy of this agreement, in the office of the Secretary of
the Commonwealth, and upon the approval of the Governor and of such other
governmental authorities as may have jurisdiction; and the said parties hereto
do hereby prescribe the following terms and conditions for said merger and
consolidation, and the mode of carrying the same into effect:
ARTICLE I. The name of the consolidated corporation is and shall be and
remain CONSUMERS MINING COMPANY, the same being hereinafter called the
"Consolidated Corporation."
ARTICLE II. The number of directors shall be three, and the names and
places of residence of the first directors of said Consolidated Corporation, who
shall hold office until their successors be chosen or appointed according to the
by-laws of said corporation, are as follows:
NAME RESIDENCE
Isaac M. Scott Wheeling, West Virginia
Alex Glass Wheeling, West Virginia
Geo. W. Gehres Pittsburgh, Pennsylvania
The first officers of said Consolidated Corporation shall be a
President, Vice-President, Treasurer, Assistant Treasurer, Secretary and
Assistant Secretary; and their names and places of residence are as follows:
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<PAGE>
OFFICE NAME RESIDENCE
------ ---- ---------
President Isaac M. Scott Wheeling, West Virginia
Vice-President and Treasurer W. H. Manning Wheeling, West Virginia
Secretary H. P. Beswick Wheeling, West Virginia
Assistant Secretary and L. W. Fransheim Wheeling, West Virginia
Assistant Treasurer
ARTICLE III. The directors shall be chosen annually by the stockholders
at the time fixed by the by-laws of the consolidation corporation.
The officers of the Consolidated Corporation shall be chosen by the
Board of Directors in the manner and at such time as shall be prescribed by the
by-laws of the Consolidated Corporation.
ARTICLE IV. The authorized capital stock of said Consolidated
Corporation is and shall be eighty-five thousand dollars ($85,000.00), divided
into eight hundred and fifty (850) shares of the par value of one hundred
dollars ($100.00) each, all of which are and shall be common stock. The rights,
terms, and conditions of the shares of said common stock issued and to be issued
shall be the same as those of the shares of the common stock of the present
CONSUMERS MINING COMPANY, now outstanding, as set forth in the Certificate of
Incorporation filed in the office of the Secretary of the Commonwealth of
Pennsylvania, on or about May 29, 1918.
ARTICLE V. The manner of converting the capital stock of the
constituent corporations, parties hereto, into the capital stock of the
Consolidated Corporations, shall be as follows:
All the present holders of stock of Consumers Mining Company shall
continue to hold the same certificates of stock which they now hold and
each certificates shall represent
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<PAGE>
a like number of shares of the common stock of the Consolidated
Corporation. Each and every of the outstanding shares of stock of the
La Belle Coke Company and Wheeling Coke Company shall be forthwith
exchangeable for, and convertible into, the stock of the Consolidated
Corporation in the proportion and the manner following, namely:
Each holder of one share of stock of La Belle Coke Company,
upon the surrender of the certificate therefor, duly endorsed in blank
for transfer, at the office of the Consolidated Corporation,
Harmarville, Pennsylvania, shall receive one (1) share of stock of said
Consolidated Corporation.
Each holder of one share of stock of Wheeling Coke Company,
upon the surrender of the certificate therefor, duly indorsed in blank
for transfer, at the office of the Consolidated Corporation,
Harmarville, Pennsylvania, shall receive one (1) share of the stock of
said Consolidated Corporation. ARTICLE VI. Except insofar as
hereinafter otherwise specifically set forth, or as
provided by statute, the corporate name, franchise, rights and organization of
said Consumers Mining Company shall remain intact, and said Consolidated
Corporation shall notice the powers, privileges and rights granted by and shall
be governed by and be subject to the certificate of incorporation of Consumers
Mining Company.
The corporate names and organization of La Belle Coke Company and
Wheeling Coke Company, except insofar as the same shall continue by Statute or
may be requisite for carrying out the purposes of this agreement, shall cease
upon the filing of this agreement in
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<PAGE>
the office of the Secretary of the Commonwealth of Pennsylvania, when adopted by
the stockholders as hereinafter provided.
ARTICLE VII. The by-laws of the said Consolidated Corporation shall be
the present by-laws of the said Consumers Mining Company until changed or
amended as provided therein.
ARTICLE VIII. Upon the consummation of the act of merger and
consolidation herein provided for, all and singular the rights, privileges,
powers and franchises of each of said corporations and all property, real,
personal and mixed, and all debts due on whatever accounts, as well as for stock
subscriptions, and all other things in action or belonging to each of said
corporations, shall be vested in the Consolidated Corporation; and all property,
rights, privileges, powers and franchises, and all and every other interest of
the three corporations, parties hereto, shall hereafter be as effectually the
property of the said Consolidated Corporation as they were of the several and
respective corporations, parties hereto, and the title to any and all real
estate, whether by deed or otherwise vested in any of said corporations, shall
not revert or be in any way impaired by reason of the said merger and
consolidation; provided that all rights of creditors and all liens upon the
property of any and all of said corporations, parties hereto, shall be preserved
unimpaired, and the respective corporations, parties hereto, may be deemed to
continue in existence in order to preserve the same; and all debts, liabilities
and duties of either of said corporations, parties hereto, shall forthwith
attach to said Consolidated Corporation and may be enforced against it to the
same extent as if said debts, liabilities and duties had been incurred or
contracted by it, it being expressly provided that the merger and consolidation
of the corporations, parties hereto, shall
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<PAGE>
not in any manner impair the rights of any creditor or creditors of any of said
corporations. If at any time said Consolidated Corporation shall deem or be
advised that any further assignments, assurances in the law, or things are
necessary or desirable to vest in the said Consolidated Corporation, the title
to any property of either of said constituent corporations, the proper officers
and directors of such constituent corporation shall and will execute all
property assignments and assurances in the law, and do all things necessary or
proper to vest title to such property in the said Consolidated Corporation and
otherwise to carry out the purposes of this agreement.
It is expressly declared that said Consolidated Corporation shall be
and said Consumers Mining Company hereby covenants that, as consolidated, it
shall be subject to the remedies and liabilities in such case prescribed in the
said Act entitled "An Act Authorizing The Merger and Consolidation of Certain
Corporations" and the said several supplements to and amendments thereof.
ARTICLE IX. The Consolidated Corporation shall pay all expenses of
merger and consolidation.
ARTICLE X. The principal and registered office of said Consolidate
Corporation in the Commonwealth of Pennsylvania shall be in the City of
Harmarville, County of Allegheny.
ARTICLE XI. This agreement shall be submitted to the stockholders of
each of the corporations, parties hereto, as provided by law and shall take
effect and be deemed and taken to be the agreement and act of merger and
consolidation of said corporations upon the adoption thereof by the votes of the
holders of a majority in amount of the entire capital stock of each of said
corporations upon the doing of such other acts and things as shall be required
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<PAGE>
by said "Act Authorizing the Merger and Consolidation of Certain Corporations,"
and the several supplements thereto and acts amendatory thereof.
IN WITNESS WHEREOF, and as signifying to agreement of their respective
Boards of Directors hereto, the said corporations, parties to this agreement,
have caused these presents to be executed in their respective corporate names by
their respective Presidents or Vice- Presidents and their respective corporate
seals to be hereunto affixed and attested by their respective Secretaries or
Assistant Secretaries, the day and year first above written.
CONSUMERS MINING COMPANY
ATTEST: By Isaac M. Scott,
H. P. Beswick, President
(Seal) Secretary
Isaac M. Scott
Alex. Glass
Geo. W. Gehres
Directors
LA BELLE COKE COMPANY
ATTEST: By W.H. Manning,
H. P. Beswick, Vice-President
(Seal) Secretary
Isaac M. Scott
Alex. Glass
Geo. W. Gehres
Directors
WHEELING COKE COMPANY
ATTEST: By Isaac M. Scott,
H. P. Beswick, President
(Seal) Secretary
Isaac M. Scott
Alex. Glass
Geo. W. Gehres
Directors
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<PAGE>
STATE OF WEST VIRGINIA )
) SS:
COUNTY OF OHIO )
Be it Remembered, that on this 24th day of September, 1932, before me,
the ________________, a Notary Public in and for the said State and County,
personally appeared H. P. Beswick.
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<PAGE>
EXHIBIT A
TO CONSUMERS MINING COMPANY
ARTICLES OF AMENDMENT
NOW THEREFORE, BE IT RESOLVED, that Article 7 of the Corporation's
Letters Patent, now known as Articles of Incorporation, filed on May 29, 1918,
as amended by Article IV of the Corporation's Joint Agreement of Merger and
Consolidation, now known as Articles of Merger, filed on September 13, 1932, be
and hereby is amended by adding at the end of said Article the following:
No nonvoting equity securities shall be issued. Any preferred stock
that may hereafter be authorized by these Articles of Incorporation
shall contain adequate provisions for the election of directors
representing such class of preferred stock in the event of default in
payment of dividends on such preferred stock.
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CONSUMERS MINING COMPANY
* * * * *
BY - LAWS
* * * * *
OFFICES
Section 1. The principal office or place of business shall be
in the City of Pittsburgh, County of Allegheny, Commonwealth of Pennsylvania and
the corporation may also have offices at such other places as the board of
directors may from time to time determine or the business of the corporation may
require.
STOCKHOLDERS' MEETINGS
Section 2. Regular meetings of the stockholders shall be held
at the office of the corporation in Pittsburgh, Pennsylvania. Special meetings
of the stockholders may be held at such place and time as shall be stated in the
notice of the meeting or in a duly executed waiver of notice thereof.
Section 3. The annual meeting of stockholders shall be held on
the second Wednesday of February in each year if not a legal holiday, and if a
legal holiday, then on the next secular day following, at 11:00 A.M., when they
shall elect by a plurality vote, a board of directors, and transact such other
business as may properly be brought before the meeting.
<PAGE>
Section 4. Written notice of the annual meeting shall be
served upon or mailed to each stockholder entitled to vote thereat at such
address as appears on the stock book of the corporation, at least thirty days
prior to the meeting.
Section 5. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or the agreement of
incorporation may be called by the board of directors, the president and
secretary or any number of stockholders owning in the aggregate at least
one-tenth of the number of shares outstanding.
Section 6. Written notice of a special meeting of
stockholders, stating the time and place thereof, and the business to be
transacted thereat, shall be served upon or mailed, postage prepaid, to each
stockholder entitled to vote thereat at such address as appears on the books of
the corporation, at least one day before such meeting. No business other than
that included in the notice or incidental thereto shall be transacted at such
meeting.
Section 7. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person, or represented by
proxy, shall be requisite and shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise provided by
statute, by the agreement of incorporation or by these by-laws. If, however,
such majority shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in person, or
represented by proxy, shall have power to adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present, or represented. At such adjourned meeting at which
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<PAGE>
a quorum shall be present or represented any business may be transacted which
might have been transacted at the meeting as originally notified.
Section 8. When a quorum is present at any meeting, the vote
of the holders of a majority of the stock having voting power present in person
or represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the agreement of incorporation or of these by-laws, a different vote is
required, in which case such express provision shall govern and control the
decision of such question.
Section 9. At any meeting of the stockholders every
stockholder having the right to vote shall be entitled to vote in person, or by
proxy appointed by an instrument in writing subscribed by such stockholder and
bearing a date not more than three years prior to said meeting, unless said
instrument specifically confers the right to vote for a longer period. Each
stockholder shall have one vote for each share of stock having voting power,
registered in his name on the books of the corporation, except where the
transfer books of the corporation shall have been closed or a date shall have
been fixed as a record date for the determination of its stockholders entitled
to vote, and in all elections of directors may cast one vote for each such share
for as many persons as there are directors to be elected, or may cumulate such
votes and give one candidate as many votes as the number of directors to be
elected multiplied by the number of such shares of stock shall equal, or to
distribute them on the same principal among as many candidates as he shall
desire, and the directors shall not be elected in any other manner.
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<PAGE>
DIRECTORS
Section 10. The number of directors which shall constitute the
whole board shall be four. The directors shall be elected at the annual meeting
of the stockholders, and each director shall be elected to serve until his
successor shall be elected and shall qualify. Directors need not be stockholders
nor residents of the Commonwealth of Pennsylvania.
Section 11. The directors shall have power from time to time,
and at any time, when the stockholders, as such, are not assembled in a meeting,
regular or special, to increase their own number to not more than five and
forthwith appoint and elect any other person, or persons, to be directors, to
hold office until the next annual election and until their successors are
elected and qualify.
Section 12. The directors may hold their meetings and keep the
books of the corporation at the principal office within the City of Pittsburgh,
Commonwealth of Pennsylvania, or at such other place as they may from time to
time determine.
Section 13. If the office of any director or directors become
vacant by reason of death, resignation, retirement, disqualification, removal
from office, or otherwise, a majority of the remaining directors, though less
than a quorum, shall choose a successor or successors, who shall hold office for
the unexpired term in respect to which such vacancy occurred or until the next
election of directors.
Section 14. No director shall vote on a question in which he
is interested other than as a stockholder, except the election of a president or
other officer or employee, or be
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<PAGE>
present at the meeting of the board while the same is being considered; but if
his retirement from the board in such case reduces the number present below a
quorum, the question may nevertheless be decided by those who remain. On any
question the names of those voting each way shall be entered on the record of
their proceedings, if any director at the time so requires.
Section 15. The property and business of the corporation shall
be managed by its board of directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or by
the agreement of incorporation or by these by-laws directed or required to be
exercised or done by the stockholders.
COMMITTEES OF DIRECTORS
Section 16. The board of directors may, by resolution or
resolutions passed by a majority of the whole board, designate one or more
committees, each committee to consist of two or more of the directors of the
corporation, which, to the extent provided in said resolution or resolutions,
shall have and may exercise the powers of the board of directors in the
management of the business and affairs of the corporation, and may have power to
authorize the seal of the corporation to be affixed to all papers which may
require it. In the absence or disqualification of any member of any such
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the board of directors to act at the
meeting in the place of any such absent or disqualified member. Such committee
or committees shall have such name or names as may be determined from time to
time by resolution adopted by the board of directors.
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<PAGE>
Section 17. The committees shall keep regular minutes of their
proceedings and report the same to the board when required.
COMPENSATION OF DIRECTORS
Section 18. Directors, as such, shall not receive any stated
salary for their services, but by resolution of the board, a fixed sum and
expenses of attendance, if any, may be allowed for attendance at each regular or
special meeting of the board; provided, that nothing herein contained shall be
construed to preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
Section 19. Members of special or standing committees may be
allowed like compensation for attending committee meetings.
MEETINGS OF THE BOARD
Section 20. The first meeting of each newly elected board
shall be held at such place and time either within or without the Commonwealth
of Pennsylvania as shall be fixed by the vote of the stockholders at the annual
meeting, and no notice of such meeting shall be necessary to the newly elected
directors in order legally to constitute the meeting; provided, a quorum shall
be present, or they may meet at such place and time as shall be fixed by the
consent in writing of all the directors.
Section 21. Regular meetings of the board may be held without
notice at such time and place either within or without the Commonwealth of
Pennsylvania as shall from time to time be determined by the board.
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Section 22. Special meetings of the board of directors may be
called by the president, vice-president, or any two of the directors, on one
day's notice to each director, either personally or by mail or by telegram.
Section 23. At all meetings of the board, a majority of the
directors shall be necessary and sufficient to constitute a quorum for the
transaction of business, and the act of a majority of the directors present at
any meeting at which there is a quorum shall be the act of the board of
directors, except as may be otherwise specifically provided by statute or by the
agreement of incorporation or by these by-laws. If a quorum shall not be present
at any meeting of directors the directors present thereat may adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present.
NOTICES
Section 24. Whenever, under the provisions of the statutes or
of the agreement of incorporation or of these by-laws, notice is required to be
given to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at such address as appears on the books of the
corporation, and such notice shall be deemed to be given at the time when the
same shall be thus mailed.
Section 25. Notice of the time, place and purpose of any
meeting of stockholders or directors whether required by the provisions of the
statute, the agreement of incorporation or these by-laws may be dispensed with
if every stockholder shall attend either in person or by
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proxy, or if every director shall attend in person, of or every absent
stockholder or director shall in writing, filed with the records of the meeting
either before or after the holding thereof, waive such notice.
ACTION BY STOCKHOLDERS AND DIRECTORS WITHOUT MEETING
Section 26. Whenever the vote of stockholders at a meeting
thereof is required or permitted to be taken in connection with any corporate
action by any provisions of the statutes or of the agreement of incorporation or
of these by-laws, the meeting and vote of stockholders may be dispensed with, if
all the stockholders who would have been entitled to vote upon the action, if
such meeting were held, shall agree in writing to such corporate action being
taken. Whenever the vote of directors at a meeting thereof is required or
permitted to be taken in connection with any corporate action by any provisions
of the statutes or of the agreement of incorporation or of these by-laws, the
meeting and vote of directors may be dispensed with if all the directors agree
in writing to such corporate action being taken.
OFFICERS
Section 27. The officers of the corporation shall be chosen by
the directors and shall be a president, vice-president, secretary, comptroller
and treasurer. The board of directors may also choose additional
vice-presidents, assistant secretaries and assistant treasurers. Any two of the
above named offices, except those of president and vice-president may be held by
the same person, but no officer shall execute, acknowledge or verify any
instrument in more than one capacity, if such instrument is required by law or
by these by-laws to be executed, acknowledged, verified or countersigned by two
or more officers.
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Section 28. The board of directors at its first meeting after
each annual meeting of stockholders shall choose a president from their own
number, and one or more vice-presidents, a secretary, comptroller and a
treasurer, none of whom need be a member of the board.
Section 29. The board may appoint such other officers and
agents as it shall deem necessary, who shall hold their offices from such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board.
Section 30. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
Section 31. The officers of the corporation shall hold office
until their successors are chosen and qualify in their stead. Any officer
elected or appointed by the board of directors may be removed at any time by the
affirmative vote of a majority of the whole board of directors. If the office of
any officer becomes vacant for any reason, the vacancy shall be filled by the
board of directors.
THE PRESIDENT
Section 32. The president shall be the chief executive office
of the corporation; he shall preside at all meetings of the stockholders and
directors, shall be ex officio a member of all standing committees, shall have
general and active management of the business of the corporation, and shall see
that all orders and resolutions of the board are carried into effect.
Section 33. He shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise
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signed and executed and except where the signing and execution thereof shall be
expressly delegated by the board of directors to some other officer or agent of
the corporation.
VICE-PRESIDENTS
Section 34. The vice-presidents in the order of their
seniority shall, in the absence or disability of the president, perform the
duties and exercise the powers of the president, and shall perform such other
duties as the board of directors shall prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 35. The secretary shall attend all sessions of the
board and all meetings of the stockholders and record all votes and the minutes
of all proceedings in a book to be kept for that purpose and shall perform like
duties for the standing committees when required. He shall give, or cause to be
given, notice of all meetings of the stockholders and special meetings of the
board of directors, and shall perform such other duties as may be prescribed by
the board of directors or president, under whose supervision he shall be. He
shall keep in safe custody the seal of the corporation and, when authorized by
the board, affix the same to any instrument requiring it, and when so affixed,
it shall be attested by his signature or by the signature of the treasurer or an
assistant secretary.
Section 36. The assistant secretaries in the order of their
seniority shall, in the absence or disability of the secretary, perform the
duties and exercise the powers of the secretary, and shall perform such other
duties as the board of directors shall prescribe.
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THE COMPTROLLER AND ASSISTANT COMPTROLLER
Section 37. The comptroller shall be responsible for the
keeping of complete and accurate records of the business, assets, liabilities
and transactions of the corporation, for the preparation of such financial
statements of the corporation as may be required by law or requested by the
board of directors or the chief executive officer, for the supervision on behalf
of the corporation of the audits made by independent accountants of the
corporation's books, records and financial statements, and for all matters
relating to the accounting by the corporation for its operations and financial
position. The comptroller shall report directly to and be subject to the
supervision of the chief executive officer, and shall perform such other duties
as may from time to time be prescribed by the board of directors the chief
executive officer.
One or more assistant comptrollers, if elected by the board of
directors, shall assist the comptroller in the performance of his duties and
shall also exercise such further powers and duties as from time to time may be
conferred upon or assigned to them or any of them by the board of directors or
the chief executive officer of the corporation. At the discretion of the
comptroller or in his absence or disability an assistant comptroller shall
perform the duties of the comptroller.
THE TREASURER AND ASSISTANT TREASURERS
Section 38. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the board of
directors.
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Section 39. He shall disburse the funds of the corporation as
may be ordered by the board, taking proper vouchers for such disbursements, and
shall render to the president and directors, at the regular meetings of the
board, or whenever they may require it, an account of all his transactions as
treasurer and of the financial condition of the corporation.
Section 40. If required by the board of directors he shall
give the corporation a bond in a sum, and with such surety or sureties as may be
satisfactory to the board for the faithful performance of the duties of his
office, and for the restoration to the corporation, in case of his death,
resignation, retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in his possession or under his control
belonging to the corporation.
Section 41. The assistant treasurers in the order of their
seniority shall, in the absence or disability of the treasurer, perform the
duties and exercise the powers of the treasurer and shall perform such other
duties as the board of directors shall prescribe.
CERTIFICATE OF STOCK
Section 42. The certificate of stock of the corporation shall
be numbered and shall be entered in the books of the corporation as they are
issued. They shall exhibit the holder's name and number of shares and shall be
signed by the president or a vice-president and the treasurer or an assistant
treasurer, or the secretary or an assistant secretary. If any stock certificate
is signed by a transfer agent or an assistant transfer agent or a transfer clerk
acting on behalf of the corporation, and a registrar, the signature of any such
officer may be facsimile. No
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certificate for any share of stock shall be issued or delivered to any
stockholder until his subscription or sale price for such share is paid in full.
TRANSFER OF STOCK
Section 43. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
CLOSING OF TRANSFER BOOKS
Section 44. The board of directors may fix the time, not
exceeding forty days preceding the date of any meeting of the stockholders or
any dividend payment date or any date for the allotment of rights, during which
the books of the corporation shall be closed against the transfer of stock; or,
in lieu of providing for the closing of the books against transfers of stock,
may fix a date not exceeding forty days preceding the date of any meeting of the
stockholders, any dividend payment date or any date for the allotment of rights,
as a record date for the determination of the stockholders entitled to notice
of, or to vote at such meeting, and/or entitled to receive such dividend payment
or rights, as the case may be, and only stockholders of record on such data
shall be entitled to notice of and/or to vote at such meeting or to receive such
dividend payment or rights.
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REGISTERED STOCKHOLDERS
Section 45. The corporation shall be entitled to treat the
holder of record of any share or shares of stock as the holder in fact thereof
and, accordingly, shall not be bound to recognize any equitable or other claim
to or interest in such share on the part of any person, whether or not it shall
have express or other notice thereof, save as expressly provided by the laws of
Pennsylvania.
LOSS CERTIFICATE
Section 46. The board of directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been lost or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost or destroyed. When authorizing such issue of
a new certificate or certificates, the board of directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of the
lost or destroyed certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require, and/or give the
corporation a bond, in such sum as it may direct to indemnify the corporation
against any claim that may be made against it with respect to the certificate
alleged to have been lost or destroyed.
DIVIDENDS
Section 47. Dividends upon the capital stock of the
corporation, subject to the provisions of the agreement of incorporation, if
any, may be declared by the board of directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock.
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Section 48. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve fund to meet contingencies, or for equalizing dividends, or
for repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interests of the
corporation, and the directors may abolish any such reserve in the manner in
which it was created.
Section 49. If any stockholder be indebted to the corporation,
any dividend payable to such stockholders, or so much thereof as is necessary,
may be applied to the payment of such indebtedness if then due and payable.
ANNUAL STATEMENT
Section 50. The president shall annually prepare a full and
true statement of the affairs of the corporation, which shall be submitted at
the annual meeting and filed within twenty days thereafter at the principal
office in Pennsylvania, where it shall, during the usual business hours of each
secular day be open for inspection by any stockholder.
CHECKS
Section 51. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
FISCAL YEAR
Section 52. The fiscal year shall begin the first day of
January in each year.
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SEAL
Section 53. The corporate seal shall have inscribed thereon
the name of the corporation, the year of its organization and the words "Seal.
Pennsylvania."
AMENDMENTS
Section 54. These by-laws may be altered or repealed at any
regular meeting of the stockholders or at any special meeting of the
stockholders at which a quorum is present or represented provided notice of the
proposed alteration or repeal be contained in the notice of such special
meeting, by the affirmative vote of a majority of the issued and outstanding
stock entitled to vote at such meeting and present and represented thereat, or
by the affirmative vote of a majority of the board of directors at any regular
meeting of the board, or at any special meeting of the board if notice of the
proposed alteration or repeal be contained in the notice of such special
meeting.
CERTIFICATION
I, the undersigned, do hereby certify that I am Secretary of
Consumers Mining Company, incorporated under the laws of the Commonwealth of
Pennsylvania; that the foregoing is a true, correct and complete copy of the
By-Laws of said Company, and that said By-Laws have been duly adopted and are
now in full force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the seal of said Company this 4th day of August, 1975.
--------------------------------------
David S. Dennison, Secretary
(SEAL)
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AMENDMENT TO THE BY-LAWS OF
CONSUMERS MINING COMPANY
DATED NOVEMBER 17, 1997
The following section of the By-laws is hereby amended in its
entirety to read as follows:
"Section 10. The number of directors which shall
constitute the whole board shall be three. The directors shall
be elected at the annual meeting of the stockholders, and each
director shall be elected to serve until his successor shall
be elected and shall qualify. Directors need not be
stockholders nor residents of the Commonwealth of
Pennsylvania."
CERTIFICATE OF INCORPORATION
OF
WHEELING-EMPIRE COMPANY
The undersigned, for the purpose of forming a corporation
pursuant to the General Corporation Law of Delaware, does hereby certify:
FIRST: The name of this corporation is WHEELING-EMPIRE COMPANY
(hereinafter called the "Corporation").
SECOND: The address of the Corporation's registered office in
Delaware is 100 West Tenth Street, New Castle County, Wilmington, Delaware, and
the name of its registered agent at such address is The Corporation Trust
Company.
THIRD: The purposes for which this Corporation shall be
organized are:
(a) To hold a partnership interest in
Wheeling-Pittsburgh/Cliffs Partnership, a Michigan general
partnership; and
(b) To engage in any lawful act or activity for which
corporations may be organized under the General Corporation
Law of Delaware.
FOURTH: The aggregate number of shares which the Corporation
shall have authority to issue is ten (10) shares, all of which shall be of one
class (Common Stock) and shall be of no par value.
FIFTH: The name and mailing address of the Incorporator is:
Wheeling-Pittsburgh Steel Corporation
1900 Four Gateway Center
Pittsburgh, Pennsylvania 15222
IN WITNESS WHEREOF, the undersigned has signed and
acknowledged this Certificate of Incorporation this 4th day of November, 1983.
ATTEST WHEELING-PITTSBURGH STEEL
CORPORATION
By:__________________________________ By__________________________________
Elliot Gill George Raynovich, Jr.
Assistant Secretary Vice-President
WHEELING-EMPIRE COMPANY
By-Laws
ARTICLE I
Shareholders
Section 1.01. Annual Meetings. Annual Meetings of the
shareholders shall be held on the first Monday of June in each year if not a
legal holiday, and if a legal holiday, then on the next succeeding day which is
not a legal holiday, at 10:00 o'clock A.M., at the principal business office of
the Corporation, or at such other date, time or place as may fixed by the Board
of Directors. Written notice of the annual meeting shall be given at lest ten
days prior to the meeting to each shareholder entitled to vote thereat. Any
business may be transacted at the annual meeting irrespective of whether or not
the notice calling such meeting shall contain a reference thereto, except as
otherwise expressly required herein or by law.
Section 1.02. Special Meetings. Special meetings of the
shareholders may be called at any time, for the purpose or purposes set forth in
the call, by the President, the Board of Directors, or the holders of at least
one-fifth of all the shares outstanding and entitled to vote thereat, by
delivering a written request to the Secretary. Special meetings shall be held at
the registered office of the Corporation, or at such other place as may be fixed
by the Board of Directors. Written notice of special meetings shall be given at
least ten days prior to the meeting to each shareholder entitled to vote
thereat. No business may be transacted at any special meeting other than that
stated in the notice of meeting, and business which is germane thereto.
<PAGE>
Section 1.03. Organization. The Chairman of the Board, if one
has been elected and is present, or if not, the President, or in his absence the
Vice President having the greatest seniority, shall preside, and the Secretary,
or in his absence any Assistant Secretary, shall take the minutes at all
meetings of the shareholders.
ARTICLE II
DIRECTORS
Section 2.01. Number, Election and Term of Office. The number
of Directors which shall constitute the full Board of Directors shall be such
number, not less than three, as shall be fixed by the Board of Directors;
provided, however, that if all the shares of the Corporation shall be owned
beneficially and of record by either one or two shareholders, the number of
Directors may be less than three but not less than the number of shareholders. A
full Board of Directors shall be elected at each annual meeting of shareholders.
Each Director shall hold office from the time of his election, but shall be
responsible as a director from such time only if he consents to his election;
otherwise from the time he accepts office or attends his first meeting of the
Board. Each Director shall serve until the next annual meeting of shareholders,
and thereafter until his successor is duly elected and qualifies, or until his
earlier death, resignation or removal.
Section 2.02. Regular Meetings; Notice. Regular meetings of
the Board of Directors shall be held at such time and place as shall be
designated by the Board of Directors from time to time. Notice of such regular
meetings of the Board shall not be required to be given, except as otherwise
expressly required herein or by law, and except that whenever the time
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or place of regular meetings shall be initially fixed or changed, notice of such
action shall be given promptly by telephone or otherwise to each Director not
participating in such action. Any business may be transacted at any regular
meeting.
Section 2.03. Annual Meeting of the Board. The annual meeting
of the Board of Directors shall be held immediately after the annual meeting of
the shareholders and shall be the annual organization meeting of the
Directors-elect, at which meeting the new Board shall organize itself and elect
the executive officers of the Corporation for the ensuing year, and may transact
any other business.
Section 2.04. Special Meeting; Notice. Special meetings of the
Board may be called at any time by the Board itself by vote at a meeting, or by
the Chairman, the President or any Director, to be held at such place and day
and hour as shall be specified by the person calling the meeting. Notice of
every special meeting of the Board of Directors, stating the place, day and hour
thereof, shall be given to each Director by being mailed or by being sent by
telegraph or given personally by telephone at least 24 hours before the time at
which the meeting is to be held. Any business may be transacted at any special
meeting.
Section 2.05. Organization. At all meetings of the Board of
Directors, the presence of at least a majority of the Directors at the time in
office shall be necessary and sufficient to constitute a quorum for the
transaction of business. If a quorum is not present at any meeting, the meeting
may be adjourned from time to time by a majority of the Directors present, until
a quorum as aforesaid shall be present; but notice of the time and place to
which such meeting is adjourned shall be given to any Directors not present
either by being sent by telegraph or given
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personally or by telephone at least 8 hours prior to the hour of reconvening.
Resolutions of the Board shall be adopted, and any action of the Board at a
meeting upon any matter shall be valid and effective, with the affirmative vote
of at least a majority of the Directors present at a meeting duly convened. The
Chairman of the Board, if one has been elected and is present, or if not, the
President, shall preside at each meeting of the Board. In the absence of the
President, the Directors present shall designate one of their number to preside
at the meeting. The Secretary, or in his absence any Assistant Secretary, shall
take the minutes at all meetings of the Board of Directors. In the absence of
the Secretary and an Assistant Secretary, the presiding officer shall designate
any person to take the minutes of the meeting.
Section 2.06. Meetings by Telephone. One or more of the
Directors may participate in any regular or special meeting of the Board of
Directors or of a committee of the Board of Directors by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting are able to hear each other.
Section 2.07. Presumption of Assent. Minutes of each meeting
of the Board shall be made available to each Director at or before the next
succeeding meeting. Each Director shall be presumed to have assented to such
minutes and agreed to the action taken thereat unless his objection thereto
shall be made to the Secretary within two days after such meeting.
Section 2.08. Catastrophe. Notwithstanding any other
provisions of law, the Articles of these By-Laws, during any emergency period
caused by a national catastrophe or local disaster, a majority of the surviving
members (or the sole survivor) of the Board of Directors who have not been
rendered incapable of acting because of incapacity or the difficulty of
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communication or transportation to the place of meeting shall constitute a
quorum for the sole purpose of electing directors to fill such emergency
vacancies; and a majority of the directors present at such a meeting may act to
fill such vacancies. Directors so elected shall serve until such absent
directors are able to attend meetings or until the shareholder act to elect
directors for such purpose. During such an emergency period, if the Board is
unable to or fails to meet, any action appropriate to the circumstances may be
taken by such officers of the Corporation as may be present and able. Questions
as to the existence of a national catastrophe or local disaster and the number
of surviving members capable of acting shall be conclusively determined at the
time by the Board of Directors or the officers so acting.
Section 2.09. Resignations. Any Director may resign by
submitting to the Chairman of the Board, if one has been elected, or to the
President or the Secretary, his resignation, which shall become effective upon
its receipt by such officer or as otherwise specified therein.
Section 2.10. Committees. Standing or temporary committees may
be appointed from its own number by the Board of Directors from time to time and
the Board may from time to time invest committees with such power and authority,
subject to such conditions, as it may see fit. An Executive Committee may be
appointed by a majority of the full Board; it shall have the powers and exercise
all the authority of the Board in the management of the business and affairs of
the Corporation except as specifically limited by the Board. The Board may
designate one or more Directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting; and in the event of
such absence or disqualification, the
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member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another director to act at the meeting in the place of any such absent or
disqualified member. Any action taken by any committee shall be subject to
alteration or revocation by the Board of Directors; provided, however, that
third parties shall not be prejudiced by such alteration or revocation.
ARTICLE III
OFFICERS AND EMPLOYEES
Section 3.01. Executive Officers. The Executive Officers of
the Corporation shall be the President, a Secretary, a Treasurer and a
Comptroller and may include a Chairman of the Board and one or more Vice
Presidents as the Board may from time to time determine, all of whom shall be
elected by the Board of Directors. Any two or more offices may be held by the
same person. Each Executive Officer shall hold office until the next succeeding
annual meeting of the Board of Directors and thereafter until his successor is
duly elected and qualifies, or until his earlier death, resignation or removal.
Section 3.02. Additional Officers; Other Agents and Employees.
The Board of Directors may from time to time appoint or hire such additional
officers, assistant officers, agents, employees and independent contractors as
the Board deems advisable; and the Board or the President shall prescribe their
duties, conditions of employment and compensation. Subject to the power of the
Board, the President may employ from time to time such other agents, employees,
and independent contractors as he may deem advisable for the prompt and orderly
transaction of the business of the Corporation, and he may prescribe their
duties and the
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conditions of their employment, fix their compensation and dismiss them, without
prejudice to their contract rights, if any.
Section 3.03. The Chairman. If there shall be a Chairman of
the Board, he shall be elected from among the Directors, shall preside at all
meetings of the shareholders and of the Board, and shall have such other powers
and duties as from time to time may be prescribed by the Board.
Section 3.04. The President. The President shall be the chief
executive officer of the Corporation. Subject to the control of the Board of
Directors, the President shall have general policy supervision of and general
management and executive powers over all the property, business, operations and
affairs of the Corporation, and shall see that the policies and programs adopted
or approved by the Board are carried out. The President shall exercise such
further powers and duties as from time to time may be prescribed in these
By-Laws or by the Board of Directors.
Section 3.05. The Vice Presidents. The Vice Presidents may be
given by resolution of the Board general executive powers, subject to the
control of the President, concerning one or more or all segments of the
operations of the Corporation. The Vice Presidents shall exercise such further
powers and duties as from time to time may be prescribed in these By-Laws or by
the Board of Directors or by the President. At the request of the President or
in his absence or disability, the senior Vice President shall exercise all the
powers and duties of the President.
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Section 3.06. The Secretary and Assistant Secretaries. It
shall be the duty of the Secretary (a) to keep or cause to be kept at the
principal business office of the Corporation an original or duplicate record of
the proceedings of the shareholders and the Board of Directors, and a copy of
the Articles and of the By-Laws; (b) to attend to the giving of notices of the
Corporation as may be required by law or these By-Laws; (c) to be custodian of
the corporate records and of the seal of the Corporation and see that the seal
is affixed to such documents as may be necessary or advisable; (d) to have
charge of and keep at the principal business office of the Corporation the stock
books of the Corporation, and an original or duplicate share register, giving
the names of the shareholders in alphabetical order, and showing their
respective addresses, the number and classes of shares held by each, the number
and date of certificates issued for the shares, and the date of cancellation of
every certificate surrendered for cancellation; and (e) to exercise all powers
and duties incident to the office of Secretary, and such other powers and duties
as may be prescribed by the Board of Directors or by the President from time to
time. The Assistant Secretaries shall assist the Secretary in the performance of
his duties and shall also exercise such further powers and duties as from time
to time may be assigned to them by the Board of Directors, the President or the
Secretary. At the direction of the Secretary or in his absence or disability, an
Assistant Secretary shall perform the duties of the Secretary.
Section 3.07. The Treasurer and Assistant Treasurers. The
Treasurer shall be the principal officer in charge of financial matters,
including financial planning and budgeting. The Treasurer shall (a) see the
lists, books, reports, statements, certificates and other documents and records
required by law are properly prepared, kept and filed; and (b) oversee the
proper keeping of complete and accurate books or records of account of all the
Corporation's business and
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transactions. The Treasurer shall also perform such other duties as may be
prescribed by the Board of Directors or the President from time to time. The
Assistant Treasurer shall assist the Treasurer in the performance of his duties
and shall also exercise such further powers and duties as from time to time may
be conferred upon or assigned to them by the Board of Directors or by the
President. At the direction of the Treasurer or in his absence or disability, an
Assistant Treasurer shall perform the duties of the Treasurer.
Section 3.08. The Comptroller and Assistant Comptrollers. The
Comptroller shall be the principal officer in charge of accounting matters,
including the proper keeping of complete and accurate books or records of
account of all the Corporation's business and transactions. The Comptroller
shall (a) be in charge of the general offices of the Corporation, and have
custody of the contracts, insurance policies, leases, deeds and other business
records; (b) have charge and custody of and be responsible for the corporate
funds, securities and investments; (c) receive, endorse for collection and give
receipts for checks, notes, obligations, funds and securities of the
Corporation, and deposit monies and other valuable effects in the name and to
the credit of the Corporation, in such depositories as shall be designated by
the Board of Directors; (d) subject to the provisions of Section 5.01 of the
By-Laws, cause to be disbursed the funds of the Corporation by payment in cash
of by checks or drafts upon the authorized depositories of the Corporation, and
cause to be taken and preserved proper vouchers for such disbursements; and (e)
render whatever reports as to the financial positions and operations of the
Corporation may be required by the Board of Directors and officers. The
Comptroller shall also perform such other duties as may be prescribed by the
Board of Directors or the President from time to time. The Assistant Comptroller
shall assist the Comptroller in the performance of his duties as from time to
time
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<PAGE>
may be conferred upon or assigned to them by the Board of Directors or by the
President. At the direction of the Comptroller or in his absence or disability,
an Assistant Comptroller shall perform the duties of the Comptroller.
Section 3.09. Vacancies. Vacancy in any office or position by
reason of death, resignation, removal, disqualification, disability or other
cause, shall be filled in the manner provided in this Article III for regular
election or appointment to such office.
Section 3.10. Delegation of Duties. The Board of Directors may
in its discretion delegate for the time being the powers and duties, or any of
them, of any officer to any other person whom it may select.
ARTICLE IV
SHARES OF CAPITAL STOCK
Section 4.01 Share Certificates. Every holder of fully-paid
stock of the Corporation shall be entitled to a certificate or certificates, to
be in such form as the Board of Directors may from time to time prescribe, and
signed (in facsimile or otherwise, as permitted by law) by the President or a
Vice President and the Secretary or the Treasurer or an Assistant Secretary or
an Assistant Treasurer, which shall represent and certify the number of shares
of stock owned by such holder. The Board may authorize the issuance of
certificates for fractional shares or, in lieu thereof, scrip or other evidence
of ownership, which may (or may not) as determined by the Board entitle the
holder thereof to voting, dividends or other rights of shareholders.
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<PAGE>
Section 4.02. Transfer of Shares. Transfers of shares of stock
of the Corporation shall be made on the books of the Corporation only upon
surrender to the Corporation of the certificate or certificates for such shares
properly endorsed, by the shareholder or by his assignee, agent or legal
representative, who shall furnish proper evidence of assignment, authority or
legal succession, or by the agent of one of the foregoing thereunto duly
authorized by an instrument duly executed and filed with the Corporation, in
accordance with regular commercial practice.
Section 4.03. Lost, Stolen, Destroyed or Mutilated
Certificates. New certificates for shares of stock may be issued to replace
certificates lost, stolen, destroyed or mutilated upon such conditions as the
Board of Directors may from time to time determine.
Section 4.04. Regulations Relating to Shares. The Board of
Directors shall have power and authority to make all such rules and regulations
not inconsistent with these By-Laws as it may deem expedient concerning the
issue, transfer and registration of certificates representing shares of the
Corporation.
Section 4.05. Holders of Record. The Corporation shall be
entitled to treat the holder of record of any share or shares of stock of the
Corporation as the holder and owner in fact thereof for all purposes and shall
not be bound to recognize any equitable or other claim to or interest in such
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise expressly provided by the laws of
Delaware.
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<PAGE>
ARTICLE V
MISCELLANEOUS CORPORATE TRANSACTIONS AND DOCUMENTS
Section 5.01 Notes, Checks, etc. All notes, bonds, drafts,
acceptances, checks, endorsements (other than for deposit), guarantees and all
evidences of indebtedness of the Corporation whatsoever, shall be signed by such
officers or agents of the Corporation, subject to such requirements as to
countersignature or other conditions, as the Board of Directors from time to
time may determine. Facsimile signatures on checks may be used if authorized by
the Board of Directors.
Section 5.02. Execution of Instruments Generally. Except as
provided in Section 5.01, all deeds, mortgages, contracts and other instruments
requiring execution by the Corporation may be signed by the President, any Vice
President or the Treasurer; and authority to sign any such contracts or
instruments, which may be general or confined to specific instances, may be
conferred by the Board of Directors upon any other person or persons. Any person
having authority to sign on behalf of the Corporation may delegate, from time to
time, by instrument in writing, all or any part of such authority to any person
or persons if authorized so to do by the Board of Directors.
Section 5.03. Voting Securities Owned by Corporation.
Securities having voting power in any other corporation owned by this
Corporation shall be voted by the President, unless the Board confers authority
to vote with respect thereto, which may be general or confined to specific
investments, upon some other person. Any person authorized to vote securities
shall have the power to appoint proxies, with general power of substitution.
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<PAGE>
ARTICLE VI
GENERAL PROVISIONS
Section 6.01. Offices. The principal business office of the
Corporation shall be at 1900 Four Gateway Center, Pittsburgh, Pennsylvania
15230. The Corporation may also have offices at such other places within or
without the State of Delaware as the business of the Corporation may require.
Section 6.02. Corporate Seal. The Board of Directors shall
prescribe the form of a suitable corporate seal, which shall contain the full
name of the Corporation and the year and state of incorporation.
Section 6.03. Fiscal Year. The initial fiscal year of the
Corporation shall be November 7, 1983 through December 31, 1983. Thereafter the
fiscal year shall begin on January 1, and end the following December 31.
Section 6.04. Financial Reports to Shareholders. The Board
shall have discretion to determine whether financial reports shall be sent to
shareholders, what such reports shall contain, and whether they shall be audited
or accompanied by the report of an independent or certified public accountant.
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ARTICLE VII
VALIDATION OF CERTAIN CONTRACTS
Section 7.01. No contract or other transaction between the
Corporation and another person shall be invalidated or otherwise adversely
affected by the fact that any one or more shareholders, directors or officers of
the Corporation ---
(i) is pecuniarily or otherwise interested in or is a
shareholder, director, officer or member of, such other
person, or
(ii) is a party to, or is in any other way
pecuniarily or otherwise interested in, the contract or other
transaction, or
(iii) is in any way connected with any person
pecuniarily or otherwise interested in such contract or other
transaction,
provided the fact of such interest shall be disclosed or known to be Board of
Directors or the shareholders, as the case may be; and in any action of the
shareholders or of the Board of Directors of the Corporation authorizing or
approving any such contract or other transaction, any and every shareholder or
director may be counted in determining the existence of a quorum, and in
determining the effectiveness of action taken, with like force and effect as
though he were not so interested, or were not such a shareholder, director,
member or officer, or were not such a party, or were not so connected. Such
director, shareholder or officer shall not be liable to account to the
Corporation for any profit realized by him from or through any such contract or
transaction approved or authorized as aforesaid. As used herein, the term
"person" includes a corporation, partnership, firm, association or other legal
entity.
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ARTICLE VIII
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 8.01. Directors and officers of the Corporation shall
be indemnified as of right to the fullest extent now or hereafter permitted by
law in connection with any actual or threatened civil, criminal, administrative
or investigative action, suit or proceeding (whether brought by or in the name
of the Corporation or otherwise) arising out of their service to the Corporation
or to another organization at the Corporation's request. Persons who are not
directors or officers of the Corporation may be similarly indemnified in respect
of such service to the extent authorized at any time by the Board of Directors.
The Corporation may maintain insurance to protect itself and any such director,
officer or other person against any liability, cost or expense incurred in
connection with any such action, suit or proceeding.
ARTICLE IX
AMENDMENTS
Section 9.01 Amendments. These By-Laws may be amended, altered
and repealed, and new By-Laws may be adopted, by the shareholders of the
Corporation at any regular or special meeting. No provision of these By-laws
shall vest any property or contract right in any shareholder.
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ARTICLES OF INCORPORATION
OF
MINGO OXYGEN COMPANY
The undersigned, a majority of which are citizens of the
United States, desiring to form a corporation, for profit, under Sections
1701.01 et seq. of the Revised Code of Ohio, do hereby certify:
FIRST. The name of this corporation is MINGO OXYGEN COMPANY.
SECOND. The place in Ohio where the principal office of the
corporation is to be located is Union Commerce Building, in the City of
Cleveland, County of Cuyahoga.
THIRD. The purpose for which the corporation is formed as
follows:
To acquire, hold, vote, mortgage, pledge, exchange, sell,
assign, and transfer stocks, bonds, or other securities or evidences of
indebtedness issued by or on account of any corporation, firm, syndicate, or
individual.
To form, acquire, obtain and control subsidiary companies in
the United States of America or elsewhere, and to aid them by guarantees or
otherwise.
To act as underwriter, trustee, or guarantor, in whole or in
part, of any securities, obligations, dividends, or contracts in which, or in
the maker of which, it has an interest, direct or indirect.
To issue bonds or other obligations, to any amount and at any
price and to secure the same, by lien on any of its property, or in any other
manner.
<PAGE>
To draw, make, accept, endorse, guarantee, discount, and issue
promissory notes, drafts, bulls of exchange, warrants, acceptances, debentures,
and any other instruments of a negotiable or transferable character.
To make and perform contracts of every kind, for any lawful
purpose and without limit as to amount, with any person, firm, corporation,
municipality, or other private or public body in the United States of America or
elsewhere.
To purchase, acquire, hold, mortgage, pledge, sell assign,
transfer, and re-issue its own shares, but not to purchase such shares if after
such purchase the assets of the corporation would be less than its liabilities
plus stated capital, or if the corporation is insolvent, or if there is
reasonable ground to believe that by such purchase the corporation would be
rendered insolvent.
To make special provision for the sale of its securities to
persons employed by it or by any of its subsidiaries.
To acquire, hold, register, use, operate under, develop,
improve, license under, mortgage, pledge, sell, assign, and dispose of letters
patent of the United States or of any foreign country, patent rights, licenses,
and privileges, inventions, improvements, and processes, copyrights, trademarks,
and trade names.
To establish and construct laboratories for experimentation,
research, and production.
And to transact any other business which may be appropriate
for a holding company.
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Also to transact any business which may be appropriate for an
operating company, including the following further objects and purposes:
To acquire, own, hold, manage, mortgage, subdivide, improve,
lease, sell, exchange, convey, and transfer real estate, wherever situated.
To produce, manufacture, drill for, mine, quarry, remove,
melt, refine, distill, buy store, supply, mortgage, pledge, transport, sell,
exchange, deal in, and dispose of oxygen, argon, steel, iron, tin, zinc, copper,
lead, manganese, polybedeum, glass, limestone, coal, coke, oil, gasoline,
chemicals, greases, drugs, dyes, and other gases, liquids, and solids.
To buy, acquire, hold, develop, improve, mortgage, encumber,
sell, lease out, and deal in timber lands, growing timber, and timber privileges
and leasehold rights therein; to operate the same; to acquire, manufacture,
treat, distill, transport, mortgage, sell, and deal in lumber, bark, pulp wood,
and other lumber products.
To construct, acquire, improve, develop, equip, maintain,
operate, mortgage, sell, encumber, lease out, and dispose of manufacturing,
mining, milling, reduction, and refining plants of all kinds, also dwelling
houses, stores, warehouses, storage tanks, sewerage plants, and systems and
other structures, buildings, and improvements, and leasehold interests therein.
To manufacture, acquire, construct, assemble, store, mortgage,
pledge, sell assign, transfer, and dispose of, and to invest, trade, and deal in
merchandise and personal property of every kind.
And generally to have offices and to conduct its operations,
exercise its powers, and promote its objects, without restrictions as to place
or amount, to carry on any other business in connection therewith, and to do as
principal, agent, contractor, trustee, or otherwise, either
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alone or in company with others, any or all of the things herein set forth, not
less fully then natural persons could do.
FOURTH. The total number of shares which the corporation shall
have authority to issue is three hundred (300) of which fifty (50) shall be
shares with a par value of $7 each of a class designated Class A Shares, one
hundred (100) shall be shares with a par value of $7 each of a class designated
Class B Shares, and one hundred fifty (150) shall be shares with a par value of
$7 each of a class designated Class C Shares.
The express terms of said shares are as hereinafter set forth.
Class A Shares, Class B Shares, and Class C Shares shall share
equally, share and share alike, in the distribution of any and all dividends and
in the destruction or assets in the event of liquidation, whether voluntary or
involuntary, and shall be alike in all other respects, except that the holders
of Class A Shares (hereinafter called "the Class A Shareholders"), voting as a
class, shall be entitled to elect two of the eight directors and their
respective successors, the holders of class B Shares (hereinafter called "the
Class B Shareholders"), voting as a class, shall be entitled to elect two of the
eight directors and their respective successors, and the holders of Class C
Shares (hereinafter called "the Class C Shareholders"), voting as a class, shall
be entitled to elect four of the eight directors and their respective
successors. Any vacancy in the office of a director elected by the Class A
Shareholders shall be filled by the Class A Shareholders, any vacancy in the
office of a director elected by the Class B Shareholders shall be filled by the
Class B Shareholders and any vacancy in the office of a director elected by the
Class C Shareholders shall be filled by the Class C Shareholders.
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<PAGE>
No holder of any shares of the corporation shall, as such
holder, have any right to purchase or subscribe for any shares of the
corporation or any obligations or instruments which the corporation may issue or
sell that shall be convertible into or exchangeable for or entitle the holder
thereof to subscribe for or purchase any shares of the corporation, other than
such right, if any, as the board of directors may determine.
Without action by or consent of the shareholders, the board of
directors may issue all or any part of the shares of the corporation for such
lawful consideration as it may fix from time to time, and any and all such
shares so issued, when the consideration thereafter has been fully paid or
delivered, shall be full paid shares and not liable to any further call or
assessment thereon.
FIFTH. The amount of state capital with which the corporation
shall begin business is Two Thousand One Hundred Dollars ($2,100).
SIXTH. The number of directors of the corporation is hereby
fixed at eight.
SEVENTH. No contract or other transaction between the
corporation and any other corporation shall in any way be affected or
invalidated by the fact that any one or more of the directors of the corporation
are pecuniarily or otherwise interested in, or are directors or officers of,
such other corporation. Any director of the corporation individually, or any
firm or association of which any director may be a member, may be a party to, or
may be pecuniarily or otherwise interested in, any contract or transaction of
the corporation, provided that the fact that he individually or such firm or
association is so interested shall be disclosed or shall be known, at the time
such contract or transaction is authorized or ratified by the board of
directors, to all members of the board of directors or to such members thereof
(constituting not less than
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a majority of the entire authorized number of members thereof) as shall vote to
authorize or ratify such contrast or transaction, and any director of the
corporation who is also a director or officer of such other corporation or who
is so interested may be counted in determining the existence of a quorum at any
meeting of the board of directors which shall authorize or ratify any such
contract or transaction, and may vote thereat to authorize or ratify and such
contract or transaction, with like force and effect as if he were not such
director or officer of such other corporation or not so interested.
EIGHTH. Any contract, transaction or act of the corporation or
of the board of directors which shall be ratified by a majority of a quorum of
the shareholders of the corporation at any annual meeting, or at any special
meeting called for such purpose, shall, in so far as permitted by law or by the
articles of incorporation of the corporation, be as valid and as binding as
though ratified by every shareholder of the corporation; provided, however, that
any failure of the shareholders to approve or ratify any such contract,
transaction or act, when and if submitted, shall not be deemed in any way to
invalidate the same or deprive the corporation, its directors, officers, or
employees, of its or their right to proceed with such contract, transaction or
act.
NINTH. All of the purposes specified in these articles of
incorporation shall be construed both as purposes and as powers, and their
enumeration shall not be held to limit in any manner the general powers now or
hereafter conferred on the corporation by any other clause of these articles of
incorporation or by the laws of Ohio.
TENTH. The corporation reserves the right to amend or repeal
any provision contained in these articles of incorporation in any manner
permitted by law and all rights
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conferred on officers, directors, and shareholders of the corporation shall at
all times be subject to this reservation.
IN WITNESS WHEREOF, we have hereunto subscribed our names,
this 5th day of June, 1959.
MINGO OXYGEN COMPANY
__________________________________
William J. Renhart
__________________________________
Theodorus V.W. Cushny
__________________________________
John M. [text illegible]
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<PAGE>
Certificate of Amendment
By Shareholders
to the Articles of Incorporation of
Mingo Oxygen Company
T.A. Danjczek, who is President
Robert Duval, who is Secretary
of the above named Ohio corporation for profit with its principal location at CT
Corporation System, 815 Superior Avenue N.E., Cleveland Ohio 441 [text
illegible] (check the appropriate box and complete the appropriate [text
illegible])
[ ] a meeting of the shareholders was duly called for the purpose of
adopting this amendment and held on _______________, 19___ at which
meeting a quorum of the shareholders was present in person or by proxy,
and by the affirmative vote of the holders of shares entitling them to
exercise ____________% of the voting power of the corporation.
[X] In a writing signed by all of the shareholders who would be entitled to
notice of a meeting held for that purpose.
the following resolution to amend the articles was adopted:
See Exhibit A attached hereto which is incorporated herein by
reference.
IN WITNESS WHEREOF, the above named officers, acting for and of the
behalf of the corporation have hereto subscribed their names this 31st day of
December, 1990.
By_______________________________________
By_______________________________________
NOTE: Ohio law does not permit one officer to sign in two capacities. Two
separate signatures are required, even if this necessitates the
election of a second officer before the filing can be made.
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<PAGE>
EXHIBIT A
TO MINGO OXYGEN COMPANY
ARTICLES OF AMENDMENT
NOW THEREFORE, BE IT RESOLVED, that Article Fourth of the
Corporation's Articles of Incorporation be and hereby is amended by adding
thereto below the last paragraph of said Article Fourth the following paragraph:
No nonvoting equity securities shall be issued. Any preferred
stock that may hereafter be authorized by these Articles of
Incorporation shall contain adequate provisions for the
election of directors representing such class of preferred
stock in the event of default in payment of dividends on such
preferred stock.
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Certificate of Amendment
By Shareholders of the Articles of Incorporation of
Mingo Oxygen Company
T.A. Danjczek, who is President
and
Robert Duval, who is Secretary
of the above named Ohio corporation for profit do hereby certify that: (check
the appropriate box and complete the appropriate statements)
[ ] a meeting of the shareholders was duly called for the purpose of
adopting the amendment and held on _______________, 19___ at which
meeting a quorum of the shareholders was present in person or by proxy,
and by the affirmative vote of the holders of shares entitling them to
exercise ____________% of the voting power of the corporation.
[X] In a writing signed by all of the shareholders who would be entitled to
notice of a meeting held for that purpose, the following resolution to
amend the articles was adopted:
IT IS HEREBY RESOLVED, that Article Sixth of the Corporation's Articles
of Incorporation is hereby amended and restate in its entirety to read:
SIXTH. The number of directors which shall constitute the whole Board
shall not be less than four nor more than eight.
IN WITNESS WHEREOF, the above named officers, acting for and on the
behalf of the corporation have hereto subscribed the names this 11th day of
April, 1991.
By_______________________________________
President
By_______________________________________
Secretary
NOTE: Ohio law does not permit one officer to sign in two capacities. Two
separate signatures are required, even if this necessitates the
election of a second officer before the filing can be made.
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MINGO OXYGEN COMPANY
* * * *
CODE OF REGULATIONS
* * * *
OFFICES
Section 1. The principal office of place of business shall be in the
City of Pittsburgh, County of Allegheny, Commonwealth of Pennsylvania and the
corporation may also have offices at such other places as the board of directors
may from time to time determine or the business of the corporation may require.
STOCKHOLDERS' MEETINGS
Section 2. Regular meetings of the stockholders shall be held at the
office of the corporation in Pittsburgh, Pennsylvania. Special meetings of the
stockholders may be held at such place and time as shall be stated in the notice
of the meeting or in a duly executed waiver of notice thereof.
Section 3. The annual meeting of stockholders shall be held on the
first Monday of June in each year if not a legal holiday, and if a legal
holiday, then on the next secular day following, at 11:00 A.M., when they shall
elect by a plurality vote, a board of directors, and transact such other
business as may properly be brought before the meeting.
Section 4. Written notice of the annual meeting shall be served upon or
mailed to each stockholder entitled to vote
<PAGE>
thereat at such address as appears on the stock book of the corporation, at
least thirty days prior to the meeting.
Section 5. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or the agreement of
incorporation may be called by the board of directors, the president and
secretary or any number of stockholders owning in the aggregate at least
one-tenth of the number of shares outstanding.
Section 6. Written notice of a special meeting of stockholders, stating
the time and place thereof, and the business to be transacted thereat, shall be
served upon or mailed, postage prepaid, to each stockholder entitled to vote
thereat at such address as appears on the books of the corporation, at least one
day before such meeting. No business other than that included in the notice or
incidental thereto shall be transacted at such meeting.
Section 7. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person, or represented by
proxy, shall be requisite and shall constitute a quorum at all meetings of the
stockholders for the transaction of business except as otherwise provided by
statute, by the agreement of incorporation or by these regulations. If, however,
such majority shall not be present or represented at any meeting of the
stockholders, the stockholders entitled to vote thereat, present in person, or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present
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in person, or represented by proxy, shall have power to adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present, or represented. At such adjourned meeting at which a
quorum shall be represent or represented any business may be transacted which
might have been transacted at the meeting as originally notified.
Section 8. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the agreement of incorporation or of these regulations, a different vote is
required, in which case such express provision shall govern and control the
decision of such question.
Section 9. At any meeting of the stockholders every stockholder having
the right to vote shall be entitled to vote in person, or by proxy appointed by
an instrument in writing subscribed by such stockholder and bearing a date not
more than three years prior to said meeting, unless said instrument specifically
confers the right to vote for a longer period. Each stockholder shall have one
vote for each share of stock having voting power, registered in his name on the
books of the corporation except where the transfer books of the corporation
shall have been closed or a date shall have been fixed as a record date for the
determination of its stockholders entitled to vote, and in all elections of
directors may cast one vote for
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each such share for as many persons as there are directors to be elected, or may
cumulate such votes and give one candidate as many votes as the number of
directors to be elected multiplied by the number of such shares of stock shall
equal, or to distribute them on the same principal among as many candidates as
he shall desire, and the directors shall not be elected in any other manner.
DIRECTORS
Section 10. The number of directors which shall constitute the whole
board shall be five. The directors shall be elected at the annual meeting of the
stockholders, and each director shall be elected to serve until his successor
shall be elected and shall qualify. Directors need not be stockholders.
Section 11. The directors shall have power from time to time, and at
any time, when the stockholders, as such, are not assembled in a meeting,
regular or special, to increase their own number to not more than six and
forthwith appoint and elect any other person, or persons, to be directors, to
hold office until the next annual election and until their successors are
elected and qualify.
Section 12. The directors may hold their meetings and keep the books of
the corporation at the principal office within the City of Pittsburgh,
Commonwealth of Pennsylvania or at such other place as they may from time to
time determine.
Section 13. If the office of any director or directors becomes vacant
by reason of death, resignation, retirement,
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disqualification, removal from office, or otherwise, a majority of the remaining
directors, through less than a quorum, shall choose a successor or successors,
who shall hold office for the unexpired term in respect to which such vacancy
occurred or until the next election of directors.
Section 14. No director shall vote on a question in which he is
interested other than as a stockholder, except the election of a president or
other officer or employee, or be present at the meeting of the board while the
same is being considered; but if his retirement from the board in such case
reduces the number present below a quorum, the question may nevertheless be
decided by those who remain. On any question the names of those voting each way
shall be entered on the record of their proceedings, if any director at the time
so requires.
Section 15. The property and business of the corporation shall be
managed by its board of directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or by
the agreement of incorporation or by these regulations directed or required to
be exercised or done by the stockholders.
COMMITTEES OF DIRECTORS
Section 16. The board of directors may, by resolution or resolutions
passed by a majority of the whole board, designate one or more committees, each
committee to consist of two or more of the directors of the corporation, which,
to the extent provided in said resolution or resolutions, shall have and may
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exercise the powers of the board of directors in the management of the business
and affairs of the corporation, and may have power to authorize the seal of the
corporation, and may have power to authorize the seal of the corporation to be
affixed to all papers which may require it. In the absence or disqualification
of any member of any such committee, the members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a quorum,
may unanimously appoint another member of the board of directors to act at the
meeting in the place of any such absent or disqualified member. Such committee
or committees shall have such name or names as may be determined from time to
time by resolution adopted by the board of directors.
Section 17. The committees shall keep regular minutes of their
proceedings and report the same to the board when required.
COMPENSATION OF DIRECTORS
Section 18. Directors, as such shall not receive any stated salary for
their services, but by resolution of the board, a fixed sum and expenses of
attendance, if any, may be allowed for attendance at each of regular or special
meeting of the board, provided, that nothing herein contained shall be construed
to preclude any director from serving the corporation in any other capacity and
receiving compensation therefor.
Section 19. Members of special or standing committees may be allowed
like compensation for attending committee meetings.
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<PAGE>
MEETINGS OF THE BOARD
Section 20. The first meeting of each newly elected board shall be held
at such place and time either within or without the Commonwealth of Pennsylvania
as shall be fixed by the vote of the stockholders at the annual meeting, and no
notice of such meeting shall be necessary to the newly elected directors in
order legally to constitute the meeting; provided, a quorum shall be present, or
they may meet at such place and time as shall be fixed by the consent in writing
of all the directors.
Section 21. Regular meetings of the board may be held without notice at
such time and place either within or without the Commonwealth of Pennsylvania as
shall from time to time be determined by the board.
Section 22. Special meetings of the board of directors my be called by
the president, vice-president, or any two of the directors, on one day's notice
to each director, either personally or by mail or by telegram.
Section 23. At all meetings of the board, a majority of the directors
shall be necessary and sufficient to constitute a quorum for the transaction of
business, and the act of the majority of the directors present at any meeting at
which there is a quorum shall be the act of the board of directors, except as
may be otherwise specifically provided by statute or by the agreement of
incorporation or by these regulations. If a quorum shall not be present at any
meeting of directors the directors present thereat may adjourn the meeting from
time to time,
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<PAGE>
without notice other than announcement at the meeting, until a quorum shall be
present.
NOTICES
Section 24. Whenever, under the provisions of the statutes or of the
agreement of incorporation or of these regulations, notice is required to be
given to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at such address as appears on the books of the
corporation, and such notice shall be deemed to be given at the time when the
same shall be thus mailed.
Section 25. Notice of the time, place and purpose of any meeting of
stockholders or directors whether required by the provisions of the statute, the
agreement of incorporation or these regulations may be dispensed with if every
stockholder shall attend either in person or by proxy, or if every director
shall attend in person, or if every absent stockholder or director shall, in
writing, filed with the records of the meeting either before or after the
holding thereof, waive such notice.
ACTION BY STOCKHOLDERS AND DIRECTORS WITHOUT MEETING
Section 26. Whenever the vote of stockholders at a meeting thereof is
required or permitted to be taken in connection with any corporate action by any
provisions of the statute or of the agreement of incorporation or of these
regulations, the meeting and vote of stockholders may be dispensed with, if all
the stockholders who would have been
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<PAGE>
entitled to vote upon the action, if such meeting were held, shall agree in
writing to such corporate action being taken. Whenever the vote of directors at
a meeting thereof is required or permitted to be taken in connection with any
corporate action by any provisions of the statutes or of the agreement of
incorporation or of these regulations, the meeting and vote of directors may be
dispensed with if all the directors agree in writing to such corporate action
hereby taken.
OFFICERS
Section 27. The officers of the corporation shall be chosen by the
directors and shall be a president, vice-president, secretary, comptroller and
treasurer. The board of directors may also choose additional vice-presidents,
assistant secretaries and assistant treasurers. Any two of the above named
offices, except those of president and vice-president may be held by the same
person, but no officer shall execute, acknowledge or verify any instrument in
more than one capacity, if such instrument is required by law or by these
regulations to be executed, acknowledged, verified or countersigned by two or
more officers.
Section 28. The board of directors at its first meeting after each
annual meeting of stockholders shall choose a president from their own number,
and one or more vice-presidents, a secretary, comptroller and a treasurer, none
of whom need be a member of the board.
Section 29. The board may appoint such other officers and agents as it
shall deem necessary, who shall hold their offices
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for such terms and shall exercise such powers and perform such duties as shall
be determined from time to time by the board.
Section 30. The salaries of all officers and agents of the corporation
shall be fixed by the board of directors.
Section 31. The officers of the corporation shall hold office until
their successors are chosen and qualify in their stead. Any officer elected or
appointed by the board of directors may be removed at any time by the
affirmative vote of a majority of the whole board of directors. If the office of
any officer becomes vacant for any reason, the vacancy shall be filled by the
board of directors.
THE PRESIDENT
Section 32. The president shall be the chief executive officer of the
corporation; he shall preside at all meetings of the stockholders and directors,
shall be ex officio a member of all standing committees, shall have general and
active management of the business of the corporation, and shall see that all
orders and resolutions of the board are carried into effect.
Section 33. He shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the board of
directors to some other officer or agent of the corporation.
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<PAGE>
VICE-PRESIDENTS
Section 34. The vice-presidents in the order of their seniority shall,
in the absence or disability of the president, perform the duties and exercise
the powers of the president, and shall perform such other duties as the board of
directors shall prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 35. The secretary shall attend all sessions of the board and
all meetings of the stockholders and record all votes and the minutes of all
proceedings in a book to be kept for that purpose and shall perform like duties
for the standing committees when required. He shall give, or cause to be given
notice of all meetings of the stockholders and special meetings of the board of
directors, and shall perform such other duties as may be prescribed by the board
of directors or president, under whose supervision he shall be. He shall keep in
safe custody the seal of the corporation and, when authorized by the board,
affix the same to any instrument requiring it, and when so affixed, it shall be
attested by his signature or by the signature of the treasurer or an assistant
secretary.
Section 36. The assistant secretaries in the order of their seniority
shall, in the absence or disability of the secretary, perform the duties and
exercise the powers of the secretary, and shall perform such other duties as the
board of directors shall prescribe.
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<PAGE>
THE COMPTROLLER AND ASSISTANT COMPTROLLER
Section 37. The comptroller shall be responsible for the keeping of
complete and accurate records of the business, assets, liabilities and
transactions of the corporation, for the preparation of such financial
statements of the corporation as may be required by law or requested by the
board of directors or the chief executive officer, for the supervision on behalf
of the corporation of the audits made by independent accountants of the
corporation's books, records and financial statements, and for all matters
relating to the accounting by the corporation for its operations and financial
position. The comptroller shall report directly to and be subject to the
supervision of the chief executive officer, and shall perform such other duties
as may from time to time be prescribed by the board of directors or the chief
executive officer.
One or more assistant comptrollers, if elected by the board of
directors, shall assist the comptroller in the performance of his duties and
shall also exercise such further powers and duties as from time to time may be
conferred upon or assigned to them or any of them by the board of directors or
the chief executive officer of the corporation. At the direction of the
comptroller or in his absence or disability an assistant comptroller shall
perform the duties of the comptroller.
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<PAGE>
THE TREASURER AND ASSISTANT TREASURERS
Section 38. The treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 39. He shall disburse the funds of the corporation as may be
ordered by the board, taking proper vouchers for such disbursements, and shall
render to the president and directors, at the regular meetings of the board, or
whenever they may require it, an account of all his transactions as treasurer
and of the financial condition of the corporation.
Section 40. If required by the board of directors he shall give the
corporation a bond in a sum, and with such surety or sureties as may be
satisfactory to the board for the faithful performance of the duties of his
office, and for the restoration to the corporation, in case of his death,
resignation, retirement or removal from office, of all books, papers, vouchers,
money and other property of whatever kind in his possession or under his control
belonging to the corporation.
Section 41. The assistant treasurers in the order of their seniority
shall, in the absence or disability of the treasurer, perform the duties and
exercise the powers of the treasurer and shall perform such other duties as the
board of directors shall prescribe.
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<PAGE>
CERTIFICATES OF STOCK
Section 42. The certificates of stock of the corporation shall be
numbered and shall be entered in the books of the corporation as they are
issued. They shall exhibit the holder's name and number of shares and shall be
signed by the president or a vice-president and the treasurer or an assistant
treasurer, or the secretary or an assistant secretary. If any stock certificate
is signed by a transfer agent or an assistant transfer agent or a transfer clerk
acting on behalf of the corporation, and a registrar, the signature of any such
officer may be facsimile. No certificate for any share of stock shall be issued
or delivered to any stockholder until his subscription or sale price for such
share is paid in full.
TRANSFER OF STOCK
Section 43. Upon surrender to the corporation of the transfer agent of
the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succussion, assignment or authority to transfer, it shall be
the duty of the corporation to issue a new Certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
CLOSING OF TRANSFER BOOKS
Section 44. The board of directors may fix the time, not exceeding
forty days preceding the date of any meeting of the stockholders or any dividend
payment date or any date for the allotment of rights, during which the books of
the corporation
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<PAGE>
shall be closed against the transfer of stock; or, in lieu of providing for the
closing of the books against transfers of stock, may fix a date not exceeding
forty days preceding the date of any meeting of the stockholders, any dividend
payment date or any date for the allotment of rights, as a record date for the
determination of the stockholders entitled to notice of, or to vote as such
meeting, and/or entitled to receive such dividend payment or rights, as the case
may be, and only stockholders of record on such date shall be entitled to notice
of and/or to vote at such meeting or to receive such dividend payment or rights.
REGISTERED STOCKHOLDERS
Section 45. The corporation shall be entitled to treat the holder of
record of any share or shares of stock as the holder in fact thereof and,
accordingly, shall not be bound to recognize any equitable or other claim to or
interest in such share on the part of any person, whether or not it shall have
express or other notice thereof, save as expressly provided by the laws of
Pennsylvania.
LOST CERTIFICATE
Section 46. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost or destroyed,
upon the making of an affidavit of that fact by the person claiming the
certificate of stock to be lost or destroyed. When authorizing such issue of a
new certificate or certificates, the board of directors may, in
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its discretion and as a condition precedent to the issuance thereof, require the
owner of the lost or destroyed certificate or certificates, or his legal
representative, to advertise the same in such manner as it shall require, and/or
give the corporation a bond, in such sum as it may direct to indemnify the
corporation against any claim that may be made against it with respect to the
certificate alleged to have been lost or destroyed.
DIVIDENDS
Section 47. Dividends upon the capital stock of the corporation,
subject to the provisions of the agreement of incorporation, if any, may be
declared by the board of directors at any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property, or in shares of the capital
stock.
Section 48. Before payment of any dividend, there may be set aside out
of any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve fund to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interests of the
corporation, and the directors may abolish any such reserve in the manner in
which it was created.
Section 49. If any stockholder be indebted to the corporation, any
dividend payable to such stockholders, or so
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<PAGE>
much thereof as is necessary, may be applied to the payment of such indebtedness
if then due and payable.
ANNUAL STATEMENT
Section 50. The president shall annually prepare a full and true
statement of the affairs of the corporation, which shall be submitted at the
annual meeting and filed within twenty days thereafter at the principal office
in Pennsylvania, where it shall during the usual business hours of each secular
day be open for inspection by any stockholder.
CHECKS
Section 51. All checks or demand for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.
FISCAL YEAR
Section 52. The fiscal year shall begin the first day of January in
each year.
SEAL
Section 53. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its organization and the words "Seal, Ohio."
AMENDMENTS
Section 54. These regulations may be altered or repealed at any regular
meeting of the stockholders or at any special meeting of the stockholders at
which a quorum is present or represented provided notice of the proposed
alteration or repeal
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<PAGE>
be contained in the notice of such special meeting, by the affirmative vote of a
majority of the issued and outstanding stock entitled to vote at such meeting
and present and represented thereat, or by the affirmative vote of a majority of
the board of directors at any regular meeting of the board, or at any special
meeting of the board if notice of the proposed alteration or repeal be contained
in the notice of such special meeting.
CERTIFICATION
I, the undersigned, do hereby certify that I am Secretary of Mingo
Oxygen Company, incorporated under the laws of the State of Ohio; that the
foregoing is a true, correct and complete copy of the Code of Regulations of
said Company, and that said Regulations have been duly adopted and are now in
full force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of
said Company this 23rd day of June, 1975.
___________________________________
Jack N. Thompson, Secretary
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ARTICLES OF INCORPORATION
3-1267.14 1196
1. Name
PITTSBURGH-CANFIELD CORPORATION
2. Address of Registered Office
1600 Grant Building
Pittsburgh, Pennsylvania 15219
3. Purpose(s) of Corporation (additional pages may be attached)
The Corporation is organized under the Act of 1933, P.L. 364,
as amended, for the following purposes:
(a) To manufacture and sell iron, steel and any other metal
and any article of commerce made therefrom, and to process and sell the
by-products of such manufacturer, and to serve as a holding company for
corporate securities of all kind;
(b) To engage in and to do any lawful act concerning any or
all lawful business for which corporations may be incorporated under
said Act.
4. Type of existence
Perpetual
5. Stock (additional pages may be attached)
1000 shares of Common Stock, par value $1.00 per share
6. First Directors
Name Address
---- -------
Charles C. Cohen 747 Union Trust Building
Pittsburgh, Pennsylvania 15219
John H. Scott, Jr. 747 Union Trust Building
Pittsburgh, Pennsylvania 15219
Harry H. Weil 747 Union Trust Building
Pittsburgh, Pennsylvania 15219
<PAGE>
7. _________________
Name Address No & Class of Shares
---- ------- --------------------
Common Stock
Charles C. Cohen 747 Union Trust Building 1
Pittsburgh, Pennsylvania 15219
John H. Scott, Jr. 747 Union Trust Building 1
Pittsburgh, Pennsylvania 15219
Harry H. Weil 747 Union Trust Building 1
Pittsburgh, Pennsylvania 15219
8. Signed and Sealed this 20th day of May 1967.
________________________________ (Seal) _________________________________(Seal)
________________________________ (Seal) _________________________________(Seal)
9. Date approved:
May 22, 1967
10. APPROVED: Secretary of the Commonwealth
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<PAGE>
EXHIBIT A
TO PITTSBURGH-CANFIELD CORPORATION
ARTICLES OF AMENDMENT
NOW THEREFORE, BE IT RESOLVED, that Article 5 of the
Corporation's Articles of Incorporation be and hereby is amended and restated in
its entirety to read as follows:
5. The Corporation shall have the authority to issue
1,000 shares of Common Stock, par value $1.00 per
share. Each share of Common Stock shall have one
vote. No nonvoting equity securities shall be issued.
Any preferred stock that may hereafter be authorized
by these Articles of Incorporation shall contain
adequate provisions for the election of directors
representing such class of preferred stock in the
event of default in payment of dividends on such
preferred stock.
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PITTSBURGH-CANFIELD CORPORATION
BYLAWS
ARTICLE I
SHAREHOLDERS
Section 1.01. Annual Meetings. Annual meetings of the
shareholders shall be held, commencing in 1968, on the first Tuesday in June of
each year at 10:30 a.m., local time, at the registered office of the
corporation, or at such other time, place and/or date as may be fixed by
resolution of the Board of Directors adopted at least 30 days prior to the date
of such meeting.
Section 1.02. Special Meetings. Special meetings of the
shareholders may be called at any time by the President, by a majority of the
Board of Directors or by the holders of a majority of the outstanding shares
entitled to vote for the purpose or purposes set forth in the call. At any time,
upon written request of any person or persons who have duly called a special
meeting, it shall be the duty of the Secretary to fix the date of the meeting,
to be held not more than sixty days after receipt of the request, and to give
due notice thereof. Special meetings shall be held at the registered office of
the corporation or at such other place as may be designated in the call.
Section 1.03. Notice of Annual and Special Meetings. Except as
otherwise expressly required by law, notice of each meeting of shareholders,
whether annual or special, shall be given at least ten days prior to the date on
which the meeting is to be held to each shareholder of record entitled to vote
thereat by delivery of a notice thereof to him personally or by sending a copy
thereof through the mail or by telegram, charges prepaid, to his address
appearing on the books of the corporation or as supplied by him to the
corporation for the purpose of notice. Each such notice shall specify the place,
day, and hour of the meeting and, in the case of a special meeting, the general
nature of the business to be transacted. A written waiver of notice, signed by
the person or persona entitled to such notice, whether before or after the time
stated therein, shall be deemed the equivalent of such notice. Except in the
case of a special meeting, neither the business to be transacted at nor the
purpose of the meeting need be specified in the waiver of notice of such
meeting.
<PAGE>
Section 1.04. Quorum. A shareholders' meeting duly called
shall not be organized for the transaction of business unless a quorum is
present. At any meeting the presence in person or by proxy of shareholders
entitled to cast at least a majority of the votes which all shareholders are
entitled to cast on the particular matter shall constitute a quorum for the
purpose of considering such matter, except as otherwise expressly provided by
law or by the Articles of Incorporation or Bylaws of the corporation. The
shareholders present at a duly organized meeting can continue to do business
until adjournment, notwithstanding the withdrawal of enough shareholders to
leave less than a quorum. If a meeting cannot be organized because a quorum has
not attended, those present may adjourn the meeting from time to time to such
time and place as they may determine, without notice other than by announcement
at the meeting of the time and place of the adjourned meeting; and in the case
of any meeting called for the election of directors, those who attended the
second of such adjourned meetings, although holding less than a majority of the
outstanding shares entitled to vote, shall nevertheless constitute a quorum for
the purpose of electing directors.
Section 1.05. Voting. At every meeting of shareholders each
holder of record of the issued and outstanding stock of the corporation entitled
to vote at such meeting shall be entitled to vote in person or by proxy and,
except where a date has been fixed as the record date for the determination of
shareholders entitled to notice or to vote at such meeting, no holder of record
of a share of stock which has been transferred on the books of the corporation
within ten days next preceding the date of such meeting shall be entitled to
notice of or to vote at such meeting in respect of such share so transferred. In
all elections of directors, voting shall be conducted accordingly to the
principles of cumulative voting. In all other cases resolutions of the
shareholders shall be adopted, and any action of the shareholders at a meeting
upon any matter shall be taken and be valid, only with the affirmative vote of
at least a majority of the outstanding shares entitled to vote, except as
otherwise expressly provided by law or by the Articles of Incorporation or
Bylaws of the corporation. The President (if present) shall be chairman, and the
Secretary (if present) shall act as secretary, at all meetings of the
shareholders. In the absence of the President, a Vice President shall be
chairman; and in the absence of the President and all the Vice Presidents, the
chairman shall be designated by the Board of Directors or if not so designated
shall be selected by the shareholders present; and in the absence of the
Secretary, the chairman of the meeting shall designate any person to act as
secretary of the meeting.
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<PAGE>
ARTICLE II
DIRECTORS
Section 2.01. Number, Election and Term of Office. The number
of directors which shall constitute the full Board of Directors shall be three
but may from time to time be increased or decreased to not less than three by
resolution of the Board of Directors. Each director shall hold office for the
term for which he is elected and thereafter until his successor is duly elected
and qualifies, or until his death, resignation or removal.
Directors need not be shareholders.
Section 2.02. Annual Meeting. A regular annual meeting of the
Board of Directors shall be held each year at the same place as and immediately
after the annual meeting of shareholders, or at such other place and time as
shall be fixed by consent of all the directors. At its regular annual meeting
the Board of Directors shall organize itself and elect the officers of the
corporation for the ensuing year, and may transact any other business.
Section 2.03. Regular Meetings. Regular Meetings of the Board
of Directors may be held at such time and place as shall from time to time be
determined by the Board of Directors. After there have been such determination
and notice thereof has been once given to each member of the Board of Directors,
regular meetings may be held without further notice being given.
Section 2.04. Special Meetings. Special meetings of the Board
of Directors may be called at any time by the Board of Directors by vote at a
meeting, or by the President, to be held at such place and day and hour as shall
be specified by the person or persons calling the meetings.
Section 2.05. Notice of Annual and Special Meetings. Except as
otherwise expressly required by law, notice of the annual meeting of the Board
of Directors need not be given. Except as otherwise expressly required by law,
notice of every special meeting of the Board of Directors specifying the place,
day and hour thereof and the general nature of the business to be transacted
thereat shall be given to each director either by being mailed on at least the
third day prior to the date of the meeting or by being sent by telegraph or
given personally or by telephone on at least the second day prior to the date of
the meeting. A written waiver of notice of a special meeting specifying the
business to be transacted thereat, signed by the person or persons entitled to
such notice, whether before or after the time stated therein, shall be deemed
the equivalent of such notice.
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<PAGE>
Section 2.06. Quorum and Manner of Acting. At all meetings of
the Board of Directors, except as otherwise expressly provided by law or by the
Articles of Incorporation or Bylaws of the corporation, the presence of a
majority of the full Board of Directors shall be necessary and sufficient to
constitute a quorum for the transaction of business. If a quorum is not present
at any meeting, the meeting may be adjourned from time to time by a majority of
the directors present until a quorum as aforesaid shall be present; but notice
of the time and place to which such meeting is adjourned shall be given to any
directors not present either by being sent by telegraph or given personally or
by telephone on at least the day prior to the date of reconvening. Resolutions
of the Board of Directors shall be adopted, and any action of the Board of
Directors at a meeting upon any matter shall be taken and be valid, only with
the affirmative vote of at least a majority of the full Board of Directors,
except as otherwise provided herein. The President (if present) shall be
chairman, and the Secretary (if present) shall act as secretary, at all meetings
of the board of Directors. In the absence of the President, the directors
present shall select a member of the Board to be chairman; and in the absence of
the Secretary, the chairman of the meeting shall designate any person to act as
secretary of the meeting.
Section 2.07. Resignations. A director may resign by
submitting his written resignation to the President or the Secretary. Unless
otherwise specified therein the resignation of a director need not be accepted
to make it effective and shall be effective immediately upon its receipt by such
officer.
Section 2.08. Removal of Directors. The entire Board of
Directors or any individual director may be removed at any time either for cause
or without cause by the vote of shareholders entitled to cast at least a
majority of the votes which all shareholders would be entitled to cast at any
annual election of directors, given at a special meeting of the shareholders
called for the purpose. Unless the entire Board of Directors be removed, not
more than on director at a time may be removed by any one vote of shareholders
and no individual director shall be removed in case the votes of a sufficient
number of shares are cast against the resolution for his removal which if
cumulatively voted at an annual election would be sufficient to elect at least
one director. The vacancy or vacancies caused in the Board of Directors by such
removal may be filled by such shareholders at such meeting.
Section 2.09. Vacancies. Any vacancy that shall occur in the
Board of Directors by reason of death, resignation, disqualification, removal,
increase in the number of directors or any other cause whatever shall, unless
filled as provided in Section 2.08 of this Article II, be filled by a majority
of the remaining members of the Board of Directors though less than a
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<PAGE>
quorum and each person so elected shall be a director until his successor is
elected by the shareholders at a meeting called for the purpose of electing
directors, or until his death, resignation or removal.
Section 2.10. Compensation of Directors. The corporation may
allow compensation to its directors for their services, as determined from time
to time by resolution adopted by the Board of Directors.
[Section 2.11. Added 11/30/90]
ARTICLE III
OFFICERS AND EMPLOYEES
Section 3.01. Principal Officers. The principal officers of
the corporation shall be a President (who shall be a director), one or more Vice
Presidents (as may be determined by the Board of Directors), a Secretary and a
Treasurer, all of whom shall be elected by the Board of Directors. Any two or
more offices may be held by the same person except the offices of President and
Secretary. Each such officer shall hold office until the next succeeding annual
meeting of the Board of Directors and thereafter until his successor is duly
elected and qualifies, or until his death, resignation or removal.
Section 3.02. Additional and Assistant Officers, Agents and
Employees. The Board of Directors from time to time may appoint such additional
officers and such assistant officers, agents and employees, to serve at will or
for such periods, have such authority and perform such duties, as shall be
determined by the Board of Directors. Subject to the power of the Board of
Directors, the President may appoint from time to time such other agents and
employees as he may deem advisable for the prompt and orderly transaction of the
business of the corporation, prescribe their duties and the conditions of their
employment, fix their compensation and dismiss them.
Section 3.03. President. The President shall be the chief
executive and administrative officer of the corporation and as such direct the
policy of the corporation on behalf of the Board of Directors and exercise
general and active administrative supervision over all the property, business
and affairs of the corporation. The President shall, subject to the control of
the Board of Directors, have and exercise direct control and general and active
management supervision over all the property, business and affairs of the
corporation. The President shall have the power to sign and execute all
authorized contracts, instruments or documents on behalf of the corporation and,
together with the
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<PAGE>
Treasurer or the Secretary, all conveyances of real estate, satisfaction pieces,
assignments of mortgages paid off and all other contracts, instruments or
documents to which the seal of the corporation is affixed. The President shall
have and exercise all powers and duties incident to the office of President and
such further powers and duties as from time to time may be prescribed by the
Board of Directors.
Section 3.04. The Vice President. The seniority of Vice
Presidents shall be in the order designated at the time of their election. Each
Vice President shall have and exercise such powers and duties as from time to
time may be conferred upon him by the Board of Directors or by the President. At
the request of the President, or in the event of the absence or disability of
the President, a Vice President designated by the Board of Directors or in the
order of their seniority shall perform the duties of President and act in his
place and assume his duties as chief executive and administrative officer of the
corporation.
Section 3.05. The Secretary and Assistant Secretary. It shall
be the duty of the Secretary (a) to keep or cause to be kept at the registered
office of the corporation an original or duplicate record of the proceedings of
the shareholders and the Board of Directors and a copy of the charter of the
corporation and of these By-Laws; (b) to attend to the giving of notices of the
corporation as may be required by law or these By-Laws; (c) to be custodian of
the corporate records and of the seal of the corporation and see that the seal
is affixed to such documents as may be required; (d) to have charge of and keep
at the registered office of the corporation, or cause to be kept at the office
of a transfer agent or registrar within the Commonwealth of Pennsylvania, the
stock books of the corporation, and an original or duplicate share register,
giving the name of the shareholders in alphabetical order and showing their
respective addresses, the number and classes of shares held by each, the number
and date of certificates issued for the shares and the date of cancellation of
every certificate surrendered for cancellation; and (e) to perform all duties
incident to the office of Secretary and such other duties as may from time to
time be prescribed by the Board of Directors or the President.
One or more Assistant Secretaries, if appointed by the Board
of Directors, shall assist the Secretary in the performance of his duties and
shall also exercise such further powers and duties as from time to time may be
conferred upon or assigned to them by the board of Directors or any of the
principal officers of the corporation. At the direction of the Secretary in the
performance of his duties and shall also exercise such further powers and duties
as from time to time may be conferred upon or assigned to them by the Board of
Directors or any of the principal officers of the corporation. At the direction
of the
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Secretary or in his absence or disability an Assistant Secretary shall perform
the duties of the Secretary.
Section 3.06. The Treasurer and Assistant Treasurers. It shall
be the duty of the Treasurer (a) to be custodian of the corporation's contracts,
policies, leases, deeds and other indicia of title, and all other business
records, financial documents and accounting records; (b) to see that the lists,
books, reports, statements, tax returns, certificates and other documents and
records required by law are properly prepared, kept and filed; (c) to be the
principal officer in charge of financial matters and of the accounting
department of the corporation; (d) to have charge and custody of and be
responsible for the corporate funds, securities and investments; (e) to receive,
endorse for collection and give receipts for checks, notes, obligations, funds
and securities of the corporation and to deposit moneys and other valuable
effects in the name and to the credit of the corporation in such depositories as
shall be designated by the Board of Directors; (f) subject to the provisions of
Section 4.02 of Article IV of the By-Laws, to cause to be disbursed the funds of
the corporation by payment in cash or by checks or drafts upon the authorized
depositories of the Corporation and to cause to be taken and preserved proper
vouchers for such disbursements; (g) to cause to be kept appropriate, complete
and accurate books or records of account of all its business and transactions;
(h) to render to the President and the Board of Directors whenever they may
require it an account of all his transactions as Treasurer and a report as to
the financial position and operations of the corporation; and (i) to perform all
duties incident to the office of Treasurer and such other duties as may from
time to time be prescribed by the Board of Directors or the President.
One or more Assistant Treasurers, if appointed by the Board of
Directors, shall assist the Treasurer in the performance of his duties and shall
also exercise such further powers and duties as from time to time may be
conferred upon or assigned to them or any of them by the Board of Directors or
any of the principal officers of the corporation. At the direction of the
Treasurer or in his absence or disability an Assistant Treasurer shall perform
the duties of the Treasurer.
Section 3.07. Removal of Officers. Any principal officer of
the corporation may be removed, either for cause or without cause, at a special
meeting of the Board of Directors called for the purpose, by the affirmative
vote of a majority of the full Board of Directors. Other officers and agents may
be removed, either for cause or without cause, at any meeting of the Board of
Directors, or by the President.
Section 3.08. Vacancies. Vacancy in any office or position by
reason of death, resignation, removal,
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<PAGE>
disqualification or any other cause shall be filled in the manner provided in
this Article III for regular election or appointment to such office.
ARTICLE IV
LOANS, NOTES, CHECKS
CONTRACTS AND THE INSTRUMENTS
Section 4.01. Loans. No loans shall be contracted on behalf of
the corporation unless authorized by the Board of Directors. Such authority may
be general or confined to specific instances.
Section 4.02. Notes Checks, Etc. All notes, drafts,
acceptances, checks, endorsements (other than for deposit) and all evidences of
indebtedness of the corporation whatsoever shall be signed by such on or more
officers or agents of the corporation, and subject to such requirements as to
counter-signature or other conditions, as the Board of Directors from time to
time may designate. Facsimile signatures on checks may be used if authorized by
the Board of Directors.
Section 4.03. Execution of Instruments Generally. Except as
provided in Section 4.02 of this Article IV, all contracts and other instruments
requiring execution by the corporation may be executed and delivered by the
President and authority to sign any such contracts or instruments, which may be
general or confined to specific instances, may be conferred by the Board of
Directors upon any other person or persons. Any person having authority to sign
on behalf of the corporation may delegate, from time to time, by instrument in
writing, all or any part of such authority to any person or persons if
authorized so to do by the Board of Directors.
ARTICLE V
DIVIDENDS AND FINANCE
Section 5.01. Dividends. Dividends, to be paid out of the
surplus of the corporation, may be declared from time to time by resolution of
the Board of Directors; but no dividend shall be paid that will impair the
capital of the corporation.
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<PAGE>
ARTICLE VI
GENERAL PROVISIONS
Section 6.01. Offices. The principal office of the corporation
shall be at 1600 Grant Building, Pittsburgh, Allegheny County, Pennsylvania. The
corporation may also have offices at such other places within or without the
Commonwealth of Pennsylvania as the business of the corporation may require.
Section 6.02. Corporate Seal. The Board of Directors shall
prescribe the form of a suitable corporate seal, which shall contain the full
name of the corporation and the year and state of incorporation.
Section 6.03. Fiscal Year. The fiscal year of the corporation
shall begin on the first day of January and end on the last day of December in
each year, or shall begin and end on such other days as shall be fixed by
resolution of the Board of Directors.
Section 6.04. Financial Reports to Shareholders. The Board of
Directors may cause to be sent to the shareholders of the corporation prior to
the time of the annual meeting of shareholders a financial report as of the end
of the preceding fiscal year. Such report need not be examined or reported upon
by an independent certified public accountant.
ARTICLE VII
SHARES OF CAPITAL STOCK
Section 7.01. Share Certificates. Every holder of stock in the
corporation shall be entitled to a certificate or certificates, consecutively
numbered, to be in such form as the Board of Directors may from time to time
prescribe, signed by the President and by the Secretary, and where signed by a
transfer agent or an assistant transfer agent or by a registrar the signatures
of such President and Secretary may be facsimile. Each such certificate shall
exhibit the name of the registered holder thereof, the number and class of
shares and the designation of the series, if any, which the certificate
represents Directors may, if it so determines, direct that certificates for
shares of stock of the corporation be signed by a transfer agent and/or
registered by a registrar, in which case such certificates will not be valid
until so signed and/or registered.
In case any officer of the corporation who shall have signed,
or whose facsimile signature shall have been used on, any certificate for shares
of stock of the corporation shall cease to
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<PAGE>
be such officer, whether because of death, resignation or otherwise, before such
certificate shall have been delivered by the corporation, such certificate shall
nevertheless be deemed to have been adopted by the corporation and may be issued
and delivered as though the person who signed such certificate or whose
facsimile signature shall have been used thereon had not ceased to be such
officer.
Section 7.02. Transfer of Shares. Transfers of shares of stock
of the corporation shall be made only on the books of the corporation by the
registered holder thereof or by his attorney thereunto authorized on surrender
of the certificate or certificates for such shares properly endorsed and the
payment of all taxes thereon. Every certificate surrendered for transfer shall
be cancelled and no new certificate or certificates shall be issued in exchange
for any existing certificate until such existing certificate shall have been so
cancelled.
Section 7.03. Transfer Agents and Registrars. The Board of
Directors may appoint any one or more qualified banks, trust companies or other
corporations organized under any law of any state of the United States or under
the laws of the United States as agent or agents for the corporation in the
transfer of the stock of the corporation and likewise may appoint any one or
more qualified banks, trust companies or other corporations as registrar or
registrars of the stock of the corporation.
Section 7.04. Lost, Stolen, Destroyed or Mutilated
Certificates. New Certificates for shares of stock may be issued to replace
certificates lost, stolen, destroyed or mutilated upon such terms and
conditions, including the giving of a satisfactory bond of indemnity, as the
Board of Directors may from time to time determine.
Section 7.05. Regulations Relating to Shares. The Board of
Directors shall have power and authority to make rules and regulations not
inconsistent with these By-Laws as it may deem expedient concerning the issue,
transfer and registration of certificates representing shares of stock of the
corporation.
Section 7.06. Holders of Record. The corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder and owner in fact thereof and shall not be bound to recognize any
equitable or other claim to or interest in such shares on the part of any other
person, whether or not it shall have express or other notice thereof, except as
otherwise expressly provided by the laws of Pennsylvania.
Section 7.07. Treasury Shares. Shares of the corporation's
stock held in its treasury shall not be voted, directly or indirectly, at any
meeting.
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<PAGE>
Section 7.08. Fixing of Record Date; Closing of Transfer
Books. The Board of Directors may fix a time, not more than fifty days prior to
the date of any meeting of shareholders, or the date fixed for the payment of
any dividend or distribution, or the date for the allotment of rights, or the
date when any change or conversion or exchange of shares will be made or go into
effect, as a record date for the determination of the shareholders entitled to
notice of, or to vote at, any such meeting, or entitled to receive payment of
any such dividend or distribution, or to receive any such allotment of rights,
or to exercise the rights in respect to any such change, conversion, or exchange
of shares. In such case, only such shareholders as shall be shareholders of
record on the date so fixed shall be entitled to notice of, or to vote at, such
meeting or to receive payment of such dividend, or to receive such allotment of
rights, or to exercise such rights, as the case may be, notwithstanding any
transfer of any shares on the books of the corporation after any records date
fixed, as aforesaid. The Board of Directors may close the books of the
corporation against transfers of shares during the whole or any part of such
period, and in such case written or printed notice thereof shall be mailed at
least ten days before the closing thereof to each shareholder of record at the
address appearing on the records of the corporation or supplied by him to the
corporation for the purpose of notice. While the stock transfer books of the
corporation are closed no transfer of shares shall be made thereon.
ARTICLE VIII
INDEMNIFICATION OF
DIRECTORS, OFFICERS AND EMPLOYEES
Each director, officer and employee (and his heirs, executors
and administrators) shall be indemnified by the corporation against all expenses
and liabilities reasonably incurred by or imposed upon him in connection with or
arising from any action, suit or proceeding in which he may be involved by
reason of his being or having been a director, officer or employee of the
corporation (whether or not he continues to be a director, officer or employee
at the time of incurring such expenses or liabilities and whether or not the
action or omission to act on the part of such director, officer or employee
which is the basis of such suit or proceeding occurred before or after the
adoption of this Article of the By-Laws). Such expenses and liabilities shall
include, but shall not be limited to, judgments, court costs and attorneys' fees
and the cost of reasonable settlements. The corporation shall not, however,
indemnify such director, officer or employee with respect to matters as to which
he shall have been finally adjudged in such suit, action or proceeding to have
been liable for negligence or
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<PAGE>
wilful misconduct in the performance of his duty as such director, officer or
employee. In the event that a settlement or a compromise shall be effected,
indemnification may be had only if the Board shall have been furnished with an
opinion of counsel for the corporation to the effect that such settlement or
compromise is in the best interests of the corporation and that such director,
officer or employee is not liable for negligence or wilful misconduct in the
performance of his duties with respect to such matters, and if the Board of
Directors shall have adopted a resolution approving such settlement or
compromise.
Every person (including a director, officer or employee of the
corporation) who, at the request of the corporation, acts as a director, officer
or employee of another corporation, shall be indemnified by the corporation to
the same extent and subject to the same conditions that the directors, officers
and employees of the corporation are indemnified under the first paragraph of
this Article.
The foregoing rights of indemnification shall not be exclusive
of other rights to which any director, officer or employee may be entitled as a
matter of law.
ARTICLE IX
AMENDMENTS
These By-Laws may be altered, amended and repealed, and new
By-Laws may be adopted, by the Board of Directors at any regular or special
meeting duly convened after notice to the directors of that purpose, subject
always to the power of the shareholders to change such action.
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<PAGE>
PITTSBURGH-CANFIELD CORPORATION
ANNUAL MEETING OF STOCKHOLDERS
The regular annual meeting of stockholders was held June 5,
1973, at the principal office of the Company, Four Gateway Center, Pittsburgh,
Pa., pursuant to due call and in accordance with the By-Laws of the Company.
The meeting was called to order at 10:30 a.m.
James S. Howard acted as Chairman and Francis St.C. O'Leary as
Secretary of the meeting.
The Chairman announced that there were represented at the
meeting, either in person or by proxy, three shares, being all of the shares
issued and outstanding.
The Chairman submitted to the meeting the Financial Statement
of the Corporation for the fiscal year ended December 31, 1972, and, upon
motion, duly seconded, the report was unanimously approved and ordered filed.
The Chairman then stated that the notice to stockholders
calling the Annual Meeting included a proposal to amend Article II Section 2.01
of the By-Laws of the Corporation. The Secretary read to the meeting the
proposed resolution.
Upon motion, duly seconded and unanimously carried, it
was
RESOLVED: That Article II Section 2.01 of the By-Laws
of the Corporation be amended to read as follows:
Section 2.01. Number, Election and Term of
Office. The number of directors which shall
constitute the full Board of Directors shall
be four but may from time to time be
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increased or decreased to not less than three by
resolution of the Board of Directors. Each director
shall hold office for the term for which he is
elected and thereafter until his successor is duly
elected and qualifies, or until his death,
resignation or removal. Directors need not be
shareholders.
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<PAGE>
PITTSBURGH-CANFIELD CORPORATION
Minute of Action Taken by the Board of Directors
by Consent Without a Meeting Pursuant to
Section 402(7) of the Business Corporation Law
The following action was hereby taken by the Board of
Directors by unanimous consent of the undersigned without a meeting of this 1st
day of October, 1973:
RESOLVED: That ARTICLE II Section 2.01 of
the By-Laws of the Corporation be amended to
read as follows:
"Section 2.01. Number, Election and Term of
Office. The number of directors which shall
constitute the full Board of Directors
shall be five but may from time to time be
increased or decreased to not less than
three by resolution of the Board of
Directors. Each director shall hold office
for the term for which he is elected and
thereafter until his successor is duly
elected and qualifies, or until his death,
resignation or removal. Directors need not
be shareholders";
RESOLVED, FURTHER: That Albert Lami be, and
he hereby is designated a member of the Board
of Directors of Pittsburgh-Canfield
Corporation, to fill the vacancy created by
the resignation of N.W. Hocking, Jr., and
that R. E. Lauterbach be designated a member
of the Board of Directors;
RESOLVED, FURTHER: That R. E. Lauterbach be,
and he hereby is, elected President of
Pittsburgh-Canfield Corporation, to fill the
vacancy created by the resignation of N.W.
Hocking, Jr.
The following being all the remaining Directors of the
Corporation hereby consent to the above actions.
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<PAGE>
AMENDMENT TO THE BY-LAWS OF
PITTSBURGH-CANFIELD CORPORATION
DATED NOVEMBER 11, 1997
The By-laws are hereby amended as follows:
That the first sentence of Section 2.01 of ARTICLE II of the
By-laws be amended to read as follows:
"The number of directors which shall constitute the
full Board of Directors shall be four."
That Section 2.08 of ARTICLE II of the By-laws be amended to
read as follows:
"Section 2.08. Removal of Directors. The entire Board
of Directors or any individual director may be removed at any
time either for cause or without cause by the vote of
shareholders entitled to cast at least a majority of the votes
which all shareholders would be entitled to cast at any annual
election of directors. The vacancy or vacancies caused in the
Board of Directors by such removal may be filled by such
shareholders at such meeting."
That the By-laws of the corporation are hereby amended, by
adding to ARTICLE II thereof, a new section numbered 2.11, and reading as
follows:
"Section 2.11. Written Action. Any
action required or permitted to be taken at
any meeting of the Stockholders or Board of
Directors may be taken without a meeting if
all Stockholders or members of the Board, as
the case may be, consent thereto in writing,
and the writing or writings are filed with the
minutes of proceedings of the Stockholders or
the Board of Directors."
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<PAGE>
That the first sentence of Section 3.01 of ARTICLE III of the
By-laws be amended to read as follows:
"The principal officers of the corporation shall be a
President, one or more Vice Presidents (as may be determined
by the Board of Directors), a Secretary and a Treasurer, all
of whom shall be elected by the Board of Directors."
That Section 3.07 of ARTICLE III of the By-laws be amended to
read as follows:
"Section 3.07. Removal of Officers. Any
principal officer of the corporation may be removed,
either for cause or without cause, by the
affirmative vote of a majority of the full Board of
Directors. All other officers and agents may be
removed, either for cause or without cause, at any
meeting of the Board of Directors, or by the
President."
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CERTIFICATE OF INCORPORATION
OF
Wheeling Construction Products, Inc.
* * * * *
1. The name of the corporation is
Wheeling Construction Products, Inc.
2. The address of its registered office in the State of
Delaware is Corporation Trust Center, 1209 Orange Street, in the City of
Wilmington, County of New Castle. The name of its registered agent at such
address is The Corporation Trust
Company.
3. The nature of the business or purposes to be conducted or
promoted is to engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.
4. The total number of shares of stock which the corporation
shall have authority to issue in One Hundred (100) and the par value of each of
such shares is One Cent ($0.01) amounting in the aggregate to One Dollar
($1.00).
5A. The name and mailing address of each incorporator is as
follows:
<PAGE>
NAME MAILING ADDRESS
- ---- ---------------
M. A. Brzoska Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
K. A. Widdoes Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
L. J. Vitalo Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
5B. The name and mailing address of each person who is to
serve as a director until the first annual meeting of the stockholders or until
a successor is elected and qualified, is as follows:
NAME MAILING ADDRESS
- ---- ---------------
James L. Wareham 1134 Market St.
Wheeling, WV 26003
James W. Raymond 1134 Market St.
Wheeling, WV 26003
Frederick G. Chbosky 1134 Market St.
Wheeling, WV 26003
Francis P. Massco 1134 Market St.
Wheeling, WV 26003
6. The corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers
conferred by statute, the board of directors is expressly authorized to make,
alter or repeal the by-laws of the corporation.
8. Elections of directors need not be by written ballot unless
the by-laws of the corporation shall so provide.
Meetings of stockholders may be held within or without the
State of Delaware, as the by-laws may provide. The books of the corporation may
be kept (subject to any provision contained in the statutes) outside the State
of Delaware at such place or places as may be designated from time to time by
the board of directors or in the by-laws of the corporation.
9. The corporation reserves the right to amend, alter, change
or repeal any provision contained in this
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<PAGE>
Certificate of Incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are granted subject
to this reservation.
10. A director of the corporation shall not 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 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived any
improper personal benefit.
WE, THE UNDERSIGNED, being each of the incorporators
hereinbefore named, for the purpose of forming a corporation pursuant to the
General Corporation Law of the State of Delaware, do make this certificate,
hereby declaring and certifying that this is our act and deed and the facts
herein stated are true, and accordingly have hereunto set our hands this 11th
day of January, 1993.
___________________________________
___________________________________
___________________________________
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BY-LAWS
OF
WHEELING CONSTRUCTION PRODUCTS, INC.
(DELAWARE)
ARTICLE I
STOCKHOLDERS
SECTION 1.01. Annual Meetings. Each annual meeting of the stockholders
shall be held at such date and time, and at such place as may be fixed by
resolution of the Board of Directors.
SECTION 1.02. Special Meetings. Special meetings of the stockholders
may be called at any time by the Chairman of the Board of Directors or the Board
of Directors or the Secretary at the request of the holders of a majority of the
voting power of all the then outstanding shares of voting stock. Special
meetings shall be held at such time and place as may be designated in the call.
SECTION 1.03. Notice of Meetings. Except as otherwise provided by law,
written notice of each meeting of stockholders, whether annual or special, shall
be given at least ten and not more than sixty days prior to the date on which
the meeting is to be held to each stockholder of record entitled to vote
thereat. Each such notice shall specify the place, day and hour of the meeting
and, in the case of a special meeting, shall briefly state the purpose or
purposes for which the meeting is called. A written waiver of notice, signed
either before or after the date and time fixed for the meeting by the person or
persons enticed to such notice, shall be deemed the equivalent of such notice.
Neither the business to be transacted at nor the purpose of the meeting need be
specified in a waiver of notice of such meeting.
SECTION 1.04. Quorum. A quorum for the transaction of business is a
majority of all of the shares entitled to vote, in person or represented by
proxy. The stockholders present at a duly organized meeting can continue to do
business until
<PAGE>
adjournment, notwithstanding the withdrawal of enough stockholders to leave less
than a quorum. Any meeting may be adjourned to a designated time and place, by
vote of those present, whether or not there be a quorum, without further notice
than announcement at the meeting at which adjournment is taken.
SECTION 1.05. Voting. At every meeting of stockholders each holder of
record of issued and outstanding shares of voting stock of the corporation
entitled to vote at such meeting shall be entitled to vote in person or by proxy
and, except where a date has been fixed as the record date for the determination
of stockholders entitled to notice of or to vote at such meeting, no holder of
record of a share of stock which has been transferred on the books of the
corporation within ten days next preceding the date of such meeting shall be
entitled to notice of or to vote at such meeting in respect of such share so
transferred. In all cases, any action of the stockholders at a meeting shall be
taken and be valid upon majority vote of the shares present or represented by
proxy, except as otherwise expressly provided by law or by the certificate of
incorporation.
SECTION 1.06. Action by Written Consent. Whenever the vote of
stockholders at a meeting thereof is required or permitted to be taken, such
action may be taken without a meeting, without prior notice and without a vote,
if a consent or consents in writing, setting forth the actions taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting. Where corporate action is taken in such manner by less than unanimous
written consent, prompt notice of the taking of such action shall be given to
all stockholders who have not consented in writing thereto.
ARTICLE II
DIRECTORS
SECTION 2.01. Number and Election. The number of directors which shall
constitute the full Board of Directors shall be fixed from time to time by
resolution of the Board of Directors but shall be not less than three nor more
than fifteen. Directors need not be stockholders.
SECTION 2.02. Regular Annual Meetings. An annual meeting of the Board
of Directors shall be held immediately after, and at the same place as, the
annual meeting of stockholders. Other meetings may be held at such intervals and
at such time and place as shall from time to time be determined by the Board of
Directors without other notice than such resolution.
SECTION 2.03. Special Meetings. Special meetings of the Board of
Directors may be called at any time by the Chairman of the Board or by a
majority of the Board of Directors, to be held
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<PAGE>
on such day and at such time and place as shall be specified by the person or
persons calling the meeting.
SECTION 2.04. Notice of Meetings. Except as otherwise expressly
required by law, notice of the annual meeting or of any regular meeting of the
Board of Directors need not be given. Except as otherwise expressly required by
law, notice of every special meeting of the Board of Directors shall be given
specifying the place, day and time thereof and the general nature of the
business to be transacted thereat, either by being mailed on at least the third
day prior to the date of the meeting or by being given personally or by
telephone or other electronic means on at least the day prior to the date of the
meeting. A written waiver of notice of a special meeting, signed by the person
or persons entitled to such notice, whether before or after the time stated
therein, shall be deemed the equivalent of such notice, and attendance of a
director at a meeting shall constitute a waiver of notice of such meeting except
when the director attends the meeting for the express purpose of objecting when
he enters the meeting, to the transaction of any business because the meeting is
not lawfully called or convened.
SECTION 2.05. Quorum and Manner of Acting. A quorum for the transaction
of business is a majority of the full Board of Directors. If a quorum is not
present at commencement of any meeting, the meeting may be adjourned from time
to time by a majority of the directors present until a quorum shall be present.
The directors present at a duly organized meeting may continue to do business
notwithstanding the withdrawal of directors to leave less than a quorum present.
Any matter shall carry upon majority affirmative vote of the members voting,
with abstentions considered as not voting.
SECTION 2.06. Resignations. A director may resign by submitting his
written resignation to the Chairman of the Board of Directors or to the
Secretary. Unless otherwise specified therein the resignation of a director need
not be accepted to make it effective.
SECTION 2.07. Removal of Directors. The entire Board of Directors or
any individual director may be removed at any time with or without cause by
majority vote of the issued and outstanding shares of voting stock of the
corporation.
SECTION 2.08. Vacancies. Any vacancy that shall occur in the Board of
Directors by reason of death, resignation, removal, increase in the number of
directors or any other cause whatever shall be filled by vote of the Board of
Directors, whether or not a quorum, and each person so elected shall be a
director until he or his successor is elected by the stockholders at a meeting
called for the purpose of electing directors, or until his prior death,
resignation or removal.
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<PAGE>
SECTION 2.09. Compensation of Directors. The corporation may allow
compensation to its directors who shall not otherwise be in the employ of the
corporation or any of its subsidiaries for their services, as determined from
time to time by resolution adopted by the Board of Directors.
SECTION 2.10. Committees. The Board of Directors may, by resolution
adopted by a majority of the whole Board, designate one or more committees,
consisting of directors, to have and exercise such authority of the Board of
Directors in the business and affairs of the corporation as the resolution of
the Board of Directors creating such committee may specify. In the absence or
disqualification of any member of such committee or committees, the member or
members thereof present at any meeting and not disqualified from voting, whether
or not he or they constitute a quorum, may unanimously appoint another director
to act at the meeting in the place of such absent or disqualified member. The
Chairman of the Board shall be an ex-officio, non-voting member of each
committee.
ARTICLE III
OFFICERS
SECTION 3.01. The President. The President shall have and exercise such
powers and duties as from time to time may be prescribed in these by-laws or by
the Board of Directors. In his capacity as Chief Operating Officer he shall,
subject to the control of the Board of Directors and the Chief Executive
Officer, have active management and supervision over the business of the
corporation and shall see that the policies and programs adopted or approved by
the Board are carried out.
SECTION 3.02. The Executive Vice Presidents, Vice Presidents and
Assistant Vice Presidents. Each Executive Vice President and each Vice President
shall have and exercise such powers and duties as from time to time may be
conferred upon them by the Board of Directors or by the Chief Executive Officer.
One or more Assistant Vice Presidents, if elected by the Board of
Directors, shall assist any Vice President in the performance of his duties and
shall also exercise such further powers and duties as from time to time may be
conferred upon or assigned to them or any of them by the Board of Directors or
the Chief Executive Officer of the corporation.
SECTION 3.03. The Secretary and Assistant Secretary. It shall be the
duty of the Secretary (a) to keep or cause to be kept an original or duplicate
record of the proceedings of the stockholders and the Board of Directors and a
copy of the certificate of incorporation of the corporation and of these
by-laws; (b) to attend to the giving of notices of the corporation as may be
required by law or these by-laws; (c) to be
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<PAGE>
custodian of the corporation's contracts, policies, leases, deeds and other
indicia of title, and all other non-financial business records; (d) to be
custodian of the seal of the corporation and see that the seal is affixed to
such documents as may be required; (e) to have charge of and keep at the
principal executive office of the corporation, or cause to be kept at the office
of a transfer agent or registrar, the stock books of the corporation, and an
original or duplicate stock ledger, giving the names of the stockholders in
alphabetical order and showing their respective addresses, the number and
classes of shares held by each, the number and date of each certificate issued
for shares and the date of cancellation of every certificate surrendered for
cancellation; and (f) to perform all duties incident to the office of Secretary
and such other duties as may from time to time be prescribed by the Board of
Directors or the Chief Executive Officer.
One or more Assistant Secretaries, if elected by the Board of
Directors, shall assist the Secretary in the performance of his duties and shall
also exercise such further powers and duties as from time to time may be
conferred upon or assigned to them by the Board of Directors or the Chief
Executive Officer of the corporation. At the direction of the Secretary or in
his absence or disability an Assistant Secretary shall perform the duties of the
Secretary.
SECTION 3.04. The Treasurer and Assistant Treasurer. It shall be the
duty of the Treasurer (a) to be the principal officer of the corporation in
charge of all financial matters; (b) to have charge and custody of and be
responsible for the corporation's funds, securities and investments; (c) to
receive, endorse for collection and give receipts for checks, notes,
obligations, funds and securities of the corporation and to deposit moneys and
other valuable effects in the name and to the credit of the corporation in such
depositories as shall be designated by the Board of Directors; (d) to cause to
be disbursed the funds of the corporation by payment in cash or by checks or
drafts upon the authorized depositories of the corporation and to cause to be
taken and preserved proper vouchers for such disbursements; (e) to see that the
reports, statements, certificates and other documents required by law to be
filed with public and other bodies are properly prepared and filed; (f) to
render to the Chief Executive Officer and the Board of Directors whenever they
may require it an account of all his transactions as Treasurer, and (g) to
perform all duties incident to the office of Treasurer and such other duties as
may from time to time be prescribed by the Board of Directors or the Chief
Executive Officer.
One or more Assistant Treasurers, if elected by the Board of Directors,
shall assist the Treasurer in the performance of his duties and shall also
exercise such further powers and duties as
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<PAGE>
from time to time may be conferred upon or assigned to them or any of them by
the Board of Directors or the Chief Executive Officer of the corporation. At the
direction of the Treasurer or in his absence or disability an Assistant
Treasurer shall perform the duties of the Treasurer.
SECTION 3.05. Additional and Assistant Officers. Board of Directors
from rime to time may elect such additional officers and such assistant officers
to serve at will or for such periods, have such authority and perform such
duties, as shall be determined by the Board of Directors.
SECTION 3.06. Removal of Officers. Any officer of the corporation may
be removed, either for cause or without cause, by affirmative vote of a majority
of the full Board of Directors.
SECTION 3.09. Vacancies. Vacancy in any office or position by reason of
death, resignation. removal. or any other cause shall be filled in the manner
provided in this Article III for regular election or appointment to such office
or position.
ARTICLE IV
CONTRACTS AND OTHER INSTRUMENTS
SECTION 4.01. All contracts and other instruments requiring execution
by the corporation may be executed and delivered by any officer or assistant
officer, subject to any limitation which may be expressed by resolution of the
Board of Directors. Any person having authority to sign on behalf of the
corporation may delegate, from time to time, by instrument in writing, all or
any part of such authority to any person or persons if authorized so to do by
the Board of Directors.
ARTICLE V
SHARES OF CAPITAL STOCK
SECTION 5.01. Stock Certificates and Transfers. The interest of each
stockholder of the corporation shall be evidenced by certificates for shares of
Stock in such form as the appropriate officers of the corporation may from time
to time prescribe. The shares of the stock of the corporation shall be
transferred on the books of the corporation by the holder thereof in person or
by his attorney, upon surrender for cancellation of certificates for the same
number of shares, with an assignment and power of transfer endorsed thereon or
attached thereto, duly executed, with such proof of the authenticity of the
signature as the corporation of its agents may reasonably require.
The certificates of stock shall be signed, countersigned and registered
in such manner as the Board of Directors may by resolution prescribe, which
resolution may permit all or any of the signatures on such certificates to be in
facsimile. In case
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any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate has ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the corporation with the same effect as if he were such officer, transfer
agent or registrar at the date of issue.
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.01. Offices. The executive office of the corporation shall be
at such place as the Board of Directors may designate.
SECTION 6.02. Corporate Seal. The Board of Directors shall prescribe
the form of a suitable corporate seat which shall contain the full name of the
corporation and the year and state of incorporation. Such seal may be used by
causing it or a facsimile or reproduction thereof to be affixed to or placed
upon the document to be sealed.
SECTION 6.03. Fiscal Year. The fiscal year of the corporation shall
begin on the first day of January and end on the last day of December in each
year, or shall begin and end on such other days as shall be fixed by resolution
of the Board of Directors.
ARTICLE VII
INDEMNIFICATION OF DIRECTORS,
OFFICERS AND EMPLOYEES
(1) Each person who was or is made a party or is threatened to be made
a party to or is involved in any action, suit, or proceeding, whether civil,
criminal, administrative or investigative (hereinafter a "proceeding"), by
reason of the fact that he or she or a person of whom he or she is the legal
representative is or was a director, officer or employee of the corporation or
is or was serving at the request of the corporation as a director, officer,
employee or agent of another corporation or of a partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether the basis of such proceeding is alleged action in an official
capacity as a director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent, shall be indemnified
and held harmless by the corporation to the fullest extent authorized by the
laws of Delaware as the same exist or may hereafter be amended (but, in the case
of any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than said law permitted
the corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA
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<PAGE>
excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that except as provided in
paragraph (2) of this Article VII with respect to proceedings seeking to enforce
rights to indemnification, the corporation shall indemnify any such person
seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the corporation. The right to
indemnification conferred in this Article VII shall be a contract right and
shall include the right to be paid by the corporation the incurred in defending
any such proceeding in advance of its final disposition; provided, however, that
if the GCL requires, the payment of such expenses incurred by a director or
officer in his or her capacity as a director or officer (and not in any other
capacity in which service was or is rendered by such person while a director or
officer, including, without limitation, service to an employee benefit plan) in
advance of the final disposition of a proceeding, shall be made only upon
delivery to the corporation of an undertaking by or on behalf of such director
or officer, to repay all amounts so advanced if it shall ultimately be
determined that such director or officer is not entitled to be indemnified under
this Article VII or otherwise.
(2) If a claim under paragraph (1) of this Article VII is not paid in
full by the corporation within thirty days after a written claim has been
received by the corporation, the claimant may at any time thereafter bring suit
against the corporation to recover the unpaid amount of the claim and, if
successful in whole or in part, the claimant shall be entitled to be paid also
the expense of prosecuting such claim. It shall be a defense to any such action
(other than an action brought to enforce a claim for expenses incurred in
defending any proceeding in advance of its final disposition where the required
undertaking, if any is required, has been tendered to the corporation) that the
claimant has not met the standards of conduct which make it permissible under
the GCL for the corporation to indemnify the claimant for the amount claimed,
but the burden of proving such defense shall be on the corporation. Neither the
failure of the corporation (including its Board of Directors, independent legal
counsel or stockholders) to have made a determination prior to the commencement
of such action that indemnification of the claimant is proper in the
circumstances because he or she has met the applicable standard of conduct set
forth in the GCL nor an actual determination by the corporation (including in
Board of Directors, independent legal counsel or stockholders) that the claimant
has not met such applicable standard of conduct, shall
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<PAGE>
be a defense to the action or create a presumption that the claimant has not met
the applicable standard of conduct.
(3) The right to indemnification and the payment of expenses incurred
in defending a proceeding in advance of its final disposition conferred in this
Article VII shall not be exclusive of any other right which any person may have
or hereafter acquire under any statute, provision of the certificate of
incorporation, by-laws, agreement, vote of stockholders or disinterested
directors or otherwise.
(4) The corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss whether or not the corporation would have
the power to indemnity such person against such expense, liability or loss under
the General Corporation Law of the State of Delaware.
(5) The corporation may, to the extent authorized from time to time by
the Board of Directors, grant rights to indemnification, and rights to be paid
by the corporation the expenses incurred in defending any proceeding in advance
of its final disposition, to any agent of the corporation to the fullest extent
of the provisions of this Article VII with respect to the indemnification and
advancement of expenses of directors officers and employees of the corporation.
The indemnification provided by this Article VII shall not be deemed
exclusive of any other rights to which a person seeking indemnification may be
entitled under the certificate of incorporation, any agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent of the type referred to above and shall inure to the
benefit of the heirs, executors and administrators of such a person.
ARTICLE VIII
AMENDMENTS
These by-laws may be altered, amended and repealed, and new by-laws may
be adopted at any meeting of the Board of Directors or as provided in the
certificate of incorporation or as otherwise provided by law.
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Certificate of Incorporation
of
WP Steel Venture Corporation
FIRST: The name of the Corporation is: WP Steel Venture
Corporation (the "Corporation").
SECOND: The registered office of the corporation and
registered agent in the State of Delaware is to be located at 32 Loockerman
Square, Suite L-100 in the City of Dover, County of Kent. The name of its
registered agent is The Prentice-Hall Corporation System, Inc.
THIRD: The nature of the business, and the objects and
purposes proposed to be transacted, promoted and carried on, are to do any and
all things herein mentioned, as fully and to the same extent as natural persons
might or could do, and in any part of the world, viz:
To do any lawful act or thing for which a corporation may be
organized under the General Corporation Law of the State of Delaware (the
"GCL").
FOURTH: The aggregate number of shares of stock which the
Corporation shall have authority to issue is One Thousand (1,000) with a par
value of one cent ($.01) per share, all of which shall be designated "Common
Stock".
FIFTH: The name and mailing address of the Incorporator is:
Adam Finerman
c/o Olshan Grundman Frome & Rosenzweig
505 Park Avenue
New York, New York 10022
SIXTH: A. A director of the Corporation shall not 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 directors' 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 of the GCL, or
(iv) for any transaction from which the director derived an improper personal
benefit. If the GCL 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 GCL, as so amended. Any repeal or modification of this
Paragraph A by the stockholders of the
<PAGE>
Corporation shall not adversely affect any right or protection of a director of
the Corporation with respect to events occurring prior to the time of such
repeal or modification.
B. (1) Each person who was or is made a
party or is threatened to be made a party to or is involved in any action, suit,
or proceeding, whether civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she or a person
of whom he or she is the legal representative is or was a director, officer,
employee or agent of the Corporation or is or was serving at the request of the
Corporation, as a director, officer or employee or agent of another corporation
or of a partnership, joint venture, trust or other enterprise, including service
with respect to employee benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director, officer, employee or agent
or in any other capacity while serving as a director, officer, employee or
agent, shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the GCL as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the Corporation to provide broader indemnification rights than said law
permitted the Corporation to provide prior to such amendment), against all
expense, liability and loss (including attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that except as provided in
paragraph (2) of this Paragraph B with respect to proceedings seeking to enforce
rights to indemnification, the Corporation shall indemnify any such person
seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board of Directors of the Corporation. The right to
indemnification conferred in this Paragraph B shall be a contract right and
shall include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition; provided,
however, that if the GCL requires, the payment of such expenses incurred by a
director or officer in his or her capacity as a director or officer (and not in
any other capacity) in which service was or is rendered by such person while a
director or officer, including, without limitation, service to an employee
benefit plan) in advance of the final disposition of a proceeding, shall be made
only upon delivery to the Corporation of an undertaking by or on behalf of such
director or officer to repay all amounts so advanced if it shall ultimately be
determined that such director or officer is not entitled to be indemnified under
this Paragraph B or otherwise.
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<PAGE>
(2) If a claim under paragraph (1) of this Paragraph
B is not paid in full by the Corporation within thirty days after a written
claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount of
the claim and, if successful in whole or in part, the claimant shall be entitled
to be paid also the expense of prosecuting such claim. It shall be a defense to
any such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any is required, has been tendered to the
Corporation) that the claimant has not met the standards of conduct which make
it permissible under the GCL for the Corporation to indemnify the claimant for
the amount claimed but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including its Board of
Directors, independent legal counsel or stockholders) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the GCL, nor an actual determination
by the Corporation (including its Board of Directors, independent legal counsel
or stockholders) that the claimant has not met such applicable standard of
conduct, shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
(3) The right to indemnification and the payment of
expenses incurred in defending a proceeding in advance of its final disposition
conferred in this Paragraph B shall not be exclusive of any other right which
any person may have or hereafter acquire under any statute, provision of the
certificate of incorporation, By-Laws, agreement, vote of stockholders or
disinterested directors or otherwise.
(4) The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the GCL.
(5) The Corporation may, to the extent authorized
from time to time by the Board of Directors, grant rights to indemnification,
and rights to be paid by the Corporation for the expenses incurred in defending
any proceeding in advance of its final disposition, to any agent of the
Corporation to the fullest extent of the provisions of this Paragraph B with
respect to the indemnification and advancement of expenses of directors,
officers and employees of the Corporation.
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<PAGE>
SEVENTH: In addition to any other considerations which the
Board of Directors may lawfully take into account, in determining whether to
take or to refrain from taking corporate action on any matter, including
proposing any matter to the stockholders of the Corporation, the Board of
Directors may take into account the long-term as well as short-term interests of
the Corporation and its stockholders (including the possibility that these
interests may be best served by the continued independence of the Corporation),
the interests of creditors, customers, employees and other constituencies of the
Corporation and its subsidiaries and the effect upon communities in which the
Corporation and its subsidiaries do business.
EIGHTH: In furtherance and not in limitation of the powers
conferred by law or in this Certificate of Incorporation, the Board of Directors
(and any committee of the Board of Directors) is expressly authorized, to the
extent permitted by law, to take such action or actions as the Board or such
committee may determine to be reasonably necessary or desirable to (A) encourage
any person to enter into negotiations with the Board of Directors and management
of the Corporation with respect to any transaction which may result in a change
in control of the Corporation which is proposed or initiated by such person or
(B) contest or oppose any such transaction which the Board of Directors or such
committee determines to be unfair, abusive or otherwise undesirable with respect
to the Corporation and its business, assets or properties or the stockholders of
the Corporation, including, without limitation, the adoption of plans or the
issuance of rights, options, capital stock, notes, debentures or other evidences
of indebtedness or other securities of the Corporation, which rights, options,
capital stock, notes, evidences of indebtedness and other securities (i) may be
exchangeable for or convertible into cash or other securities on such terms and
conditions as may be determined by the Board or such committee and (ii) may
provide for the treatment of any holder or class of holders thereof designated
by the Board of Directors or any such committee in respect of the terms,
conditions, provisions and rights of such securities which is different from,
and unequal to, the terms, conditions, provisions and rights applicable to all
other holders thereof.
NINTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of Incorporation,
and any other provisions authorized by the laws of the State of Delaware at the
time in force may be added or inserted, subject to the limitations set forth in
this Certificate of Incorporation and in the manner now or hereafter provided
herein by statute, and all rights, preferences and privileges of whatsoever
nature conferred upon stockholders, directors or any other persons whomsoever by
and pursuant to this
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<PAGE>
Certificate of Incorporation in its present form or as amended are granted
subject to the rights reserved in this Article NINTH.
IN WITNESS WHEREOF, I have hereunto set my hand this 20th day
of September, 1994.
/s/ Adam Finerman
-----------------------------
Name: Adam Finerman
Sole Incorporator
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----------------------
BY-LAWS
OF
WP STEEL VENTURE CORPORATION
---------------------
ARTICLE I
STOCKHOLDERS
SECTION 1.1. Annual Meetings. An annual meeting of
stockholders to elect directors and transact such other business as may properly
be presented to the meeting shall be held at such place as the Board of
Directors may from time to time fix, if that day shall be a legal holiday in the
jurisdiction in which the meeting is to be held, then on the next day not a
legal holiday or as soon thereafter as may be practical, determined by the Board
of Directors.
SECTION 1.2. Special Meetings. A special meeting of
stockholders may be called at any time by the Board of Directors or the Chairman
and shall be called by any of them or by the Secretary upon receipt of a written
request to do so specifying the matter or matters, appropriate for action at
such a meeting, proposed to be presented at the meeting and signed by holders of
record of a majority of the shares of stock that would be entitled to be voted
on such matter or matters if the meeting were held on the day such request is
received and the record date for such meeting were the close of business on the
preceding day. Any such meeting shall be held at such time and at such place,
within or without the State of Delaware, as shall be determined by the body or
person calling such meeting and as shall be stated in the notice of such
meeting.
SECTION 1.3. Notice of Meeting. For each meeting of
stockholders written notice shall be given stating the place, date and hour and,
in the case of a special meeting, the purpose or purposes for which the meeting
is called. Except as otherwise provided by Delaware law, the written notice of
any meeting shall be given not less than 10 or more than 60 days before the date
of the meeting to each stockholder entitled to vote at such meeting. If mailed,
notice shall be deemed to be given when deposited in the United States mail,
postage prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation.
<PAGE>
SECTION 1.4. Quorum. Except as otherwise required by Delaware
law or the Certificate of Incorporation, the holders of record of a majority of
the shares of stock entitled to be voted present in person or represented by
proxy at a meeting shall constitute a quorum for the transaction of business at
the meeting, but in the absence of a quorum the holders of record present or
represented by proxy at such meeting may vote to adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
is obtained. At any such adjourned session of the meeting at which there shall
be present or represented the holders of record of the requisite number of
shares, any business may be transacted that might have been transacted at the
meeting as originally called.
SECTION 1.5. Chairman and Secretary at Meeting. At each
meeting of stockholders the Chairman, or in his absence the person designated in
writing by the Chairman, or if no person is so designated, then a person
designated by the Board of Directors, shall preside as chairman of the meeting;
if no person is so designated, then the meeting shall choose a chairman by
plurality vote. The Secretary, or in his absence a person designated by the
chairman of the meeting, shall act as secretary of the meeting.
SECTION 1.6. Voting; Proxies. Except as otherwise provided by
Delaware law or the Certificate of Incorporation, and subject to the provisions
of Section 1.10:
(a) Each stockholder shall at every meeting of the
stockholders be entitled to one vote for each share of capital stock held by
him.
(b) Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy, but no such proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period.
(c) Directors shall be elected by a plurality vote.
(d) Each matter, other than election of directors,
properly presented to any meeting shall be decided by a majority of the votes
cast on the matter.
(e) Election of directors and the vote on any other
matter presented to a meeting shall be by written ballot only if so ordered by
the chairman of the meeting or if so requested by any stockholder present or
represented by proxy at the meeting entitled to vote in such election or on such
matter, as the case may be.
SECTION 1.7. Adjourned Meetings. A meeting of stockholders may
be adjourned to another time or place as provided
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in Section 1.4 or 1.6(d). Unless the Board of Directors fixes a new record date,
stockholders of record for an adjourned meeting shall be as originally
determined for the meeting from which the adjournment was taken. If the
adjournment is for more than 30 days, or if after the adjournment a new record
date is fixed for the adjourned meeting, a notice of the adjourned meeting shall
be given to each stockholder of record entitled to vote. At the adjourned
meeting any business may be transacted that might have been transacted at the
meeting as originally called.
SECTION 1.8. Consent of Stockholders in Lieu of Meeting. Any
action that may be taken at any annual or special meeting of stockholders may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Notice of the taking of such
action shall be given promptly to each stockholder that would have been entitled
to vote thereon at a meeting of stockholders and that did not consent thereto in
writing.
SECTION 1.9. List of Stockholders Entitled to Vote. At least
10 days before every meeting of stockholders a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order and showing the
address of each stockholder and the number of shares registered in the name of
each stockholder, shall be prepared and 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 10 days prior to the meeting, at a place within
the city where the meeting is to be held. Such list shall be produced and kept
at the time and place of the meeting during the whole time thereof and may be
inspected by any stockholder who is present.
SECTION 1.10. Fixing of Record Date. 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, or to express consent to
corporate action in writing without a meeting, or entitled to receive payment of
any dividend or other distribution or allotment of any rights, or 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 of Directors may fix, in
advance, a record date, which shall not be more than 60 or less than 10 days
before the date of such meeting, nor more than 60 days prior to any other
action. If no record date is fixed, 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 is given,
or, if notice is waived, at the close of business on the day next preceding the
day on which the meeting is held; the
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record date for determining stockholders entitled to express consent to
corporate action in writing without a meeting, when no prior action by the Board
of Directors is necessary, shall be the day on which the first written consent
is expressed; and the record date for any other purpose shall be at the close of
business on the day on which the Board of Directors adopts the resolution
relating thereto.
ARTICLE II
DIRECTORS
SECTION 2.1. Number; Term of Office; Qualifications;
Vacancies. The number of directors that shall constitute the whole Board of
Directors shall be three, which number may be changed from time to time as
determined by action of the Board of Directors taken by the affirmative vote of
a majority of the whole Board of Directors. Directors shall be elected at the
annual meeting of stockholders to hold office, subject to Sections 2.2 and 2.3,
until the next annual meeting of stockholders and until their respective
successors are elected and qualified. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, although less than a quorum, or
by the sole remaining director, and the directors so chosen shall hold office,
subject to Sections 2.2 and 2.3, until the next annual meeting of stockholders
and until their respective successors are elected and qualified.
SECTION 2.2. Resignation. Any director of the Corporation may
resign at any time by giving written notice of such resignation to the Board of
Directors, the Chairman or the Secretary of the Corporation. Any such
resignation shall take effect at the time specified therein or, if no time be
specified, upon receipt thereof by the Board of Directors or one of the
above-named officers; and, unless specified therein, the acceptance of such
resignation shall not be necessary to make it effective. When one or more
directors shall resign from the Board of Directors effective at a future date, a
majority of the directors then in office, including those who have so resigned,
shall have power to fill such vacancy or vacancies, the vote thereon to take
effect when such resignation or resignations shall become effective, and each
director so chosen shall hold office as provided in these By-Laws in the filling
of other vacancies.
SECTION 2.3. Removal. Any one or more directors may be
removed, with or without cause, by the vote or written consent of the holders of
a majority of the shares entitled to vote at an election of directors.
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SECTION 2.4. Regular and Annual Meetings; Notice. Regular
meetings of the Board of Directors shall be held at such time and at such place,
within or without the State of Delaware, as the Board of Directors may from time
to time prescribe. No notice need be given of any regular meeting, and a notice,
if given, need not specify the purposes thereof. A meeting of the Board of
Directors may be held without notice immediately after an annual meeting of
stockholders at the same place as that at which such meeting was held.
SECTION 2.5. Special Meetings; Notice. A special meeting of
the Board of Directors may be called at any time by the Board of Directors, its
Chairman, the Executive Committee, the President or any person acting in the
place of the President and shall be called by any one of them or by the
Secretary upon receipt of a written request to do so specifying the matter or
matters, appropriate for action at such a meeting, proposed to be presented at
the meeting and signed by at least two directors. Any such meeting shall be held
at such time and at such place, within or without the State of Delaware, as
shall be determined by the body or person calling such meeting. Notice of such
meeting stating the time and place thereof shall be given (a) by deposit of the
notice in the United States mail, first class, postage prepaid, at least two
days before the day fixed for the meeting addressed to each director at his
address as it appears on the Corporation's records or at such other address as
the director may have furnished the Corporation for that purpose, or (b) by
delivery of the notice similarly addressed for dispatch by telegraph, cable or
radio or by delivery of the notice by telephone or in person, in each case at
least 24 hours before the time fixed for the meeting.
SECTION 2.6. Chairman of the Board; Presiding Officer and
Secretary at Meetings. The Board of Directors may elect one of its members to
serve at its pleasure as Chairman of the Board. Each meeting of the Board of
Directors shall be presided over by the Chairman of the Board or in his absence
by the President, if a director, or if neither is present by such member of the
Board of Directors as shall be chosen at the meeting. The Secretary, or in his
absence an Assistant Secretary, shall act as secretary of the meeting, or if no
such officer is present, a secretary of the meeting shall be designated by the
person presiding over the meeting.
SECTION 2.7. Quorum. A majority of the whole Board of
Directors shall constitute a quorum for the transaction of business, but in the
absence of a quorum a majority of those present (or if only one be present, then
that one) may adjourn the meeting, without notice other than announcement at the
meeting,
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until such time as a quorum is present. Except as otherwise required by the
Certificate of Incorporation or the By-Laws, the vote of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors.
SECTION 2.8. Meeting by Telephone. Members of the Board of
Directors or of any committee thereof may participate in meetings of the Board
of Directors or of such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation shall constitute presence in
person at such meeting.
SECTION 2.9. Action Without Meeting. Unless otherwise
restricted by the Certificate of Incorporation, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all members of the Board of Directors or of
such committee, as the case may be, consent thereto in writing and the writing
or writings are filed with the minutes of proceedings of the Board of Directors
or of such committee.
SECTION 2.10. Executive and Other Committees. The Board of
Directors may, by resolution passed by a majority of the whole Board of
Directors, designate an Executive Committee and one or more other committees,
each such committee to consist of one or more directors as the Board of
Directors may from time to time determine. Any such committee, to the extent
provided in such resolution or resolutions, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the Corporation, including the power to authorize the seal of the
Corporation to be affixed to all papers that may require it but no such
committee shall have such power of authority in reference to amending the
Certificate of Incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, recommending to the
stockholders a dissolution of the Corporation or a revocation of a dissolution,
or amending the By-Laws; and unless the resolution shall expressly so provide,
no such committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock. In the absence or disqualification of a member
of a committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Each such
committee other than the Executive Committee shall have such name as may be
determined from time to time by the Board of Directors.
SECTION 2.11. Compensation. No director shall receive any
stated salary for his services as a director or as a member of a committee but
shall receive such sum, if any, as may from time to time be fixed by the action
of a majority of the stockholders.
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ARTICLE III
OFFICERS
SECTION 3.1. Election; Qualification. The officers of the
Corporation shall be a President, one or more Vice Presidents, a Secretary and a
Treasurer, each of whom shall be selected by the Board of Directors. The Board
of Directors may elect a Controller, one or more Assistant Secretaries, one or
more Assistant Treasurers, one or more Assistant Controllers and such other
officers as it may from time to time determine. Two or more offices may be held
by the same person.
SECTION 3.2. Term of Office. Each officer shall hold office
from the time of his election and qualification to the time at which his
successor is elected and qualified, unless he shall die or resign or shall be
removed pursuant to Section 3.4 at any time sooner.
SECTION 3.3. Resignation. Any officer of the Corporation may
resign at any time by giving written notice of such resignation to the Board of
Directors, the President or the Secretary of the Corporation. Any such
resignation shall take effect at the time specified therein or, if no time be
specified, upon receipt thereof by the Board of Directors or one of the
above-named officers; and, unless specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 3.4. Removal. Any officer may be removed at any time,
with or without cause, by the vote of two directors if there are three directors
or less, or the vote of a majority of the whole Board of Directors if there are
more than three directors.
SECTION 3.5. Vacancies. Any vacancy however caused in any
office of the Corporation may be filled by the Board of Directors.
SECTION 3.6. Compensation. The compensation of each officer
shall be such as the Board of Directors may from time to time determine.
SECTION 3.7. Chairman of the Board. The Chairman of the Board
shall be the chairman of all meetings of the Board of Directors. He shall keep
in close touch with the administration of the affairs of the Corporation and
supervise its general policies.
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He shall see that the acts of the executive officers conform to the policies of
the Corporation as determined by the Board and shall perform such other duties
as may from time to time be designated to him by the Board.
SECTION 3.8. President. The President shall be the chief
executive officer of the Corporation and shall have general charge of the
business and affairs of the Corporation, subject however to the right of the
Board of Directors to confer specified powers on officers and subject generally
to the direction of the Board of Directors and the Executive Committee, if any.
SECTION 3.9. Vice President. Each Vice President shall have
such powers and duties as generally pertain to the office of Vice President and
as the Board of Directors or the President may from time to time prescribe.
During the absence of the president or his inability to act, the Vice President,
or if there shall be more than one Vice President, then that one designated by
the Board of Directors, shall exercise the powers and shall perform the duties
of the President, subject to the direction of the Board of Directors and the
Executive Committee, if any.
SECTION 3.10. Secretary. The Secretary shall keep the minutes
of all meetings of stockholders and of the Board of Directors. He shall be
custodian of the corporate seal and shall affix it or cause it to be affixed to
such instruments as require such seal and attest the same and shall exercise the
powers and shall perform the duties incident to the office of Secretary, subject
to the direction of the Board of Directors and the Executive Committee, if any.
SECTION 3.11. Other Officers. Each other officer of the
Corporation shall exercise the powers and shall perform the duties incident to
his office, subject to the direction of the Board of Directors and the Executive
Committee, if any.
ARTICLE IV
CAPITAL STOCK
SECTION 4.1. Stock Certificates. The interest of each holder
of stock of the Corporation shall be evidenced by a certificate or certificates
in such form as the Board of Directors may from time to time prescribe. Each
certificate shall be signed by or in the name of the Corporation by the
Chairman, the President or a Vice President and by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary. Any of or all the
signatures appearing on such certificate or certificates may be a facsimile. If
any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a
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<PAGE>
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.
SECTION 4.2. Transfer of Stock. Shares of stock shall be
transferable on the books of the Corporation pursuant to applicable law and such
rules and regulations as the Board of Directors shall from time to time
prescribe.
SECTION 4.3. Holders of Record. Prior to due presentment for
registration of transfer the Corporation may treat the holder of record of a
share of its stock as the complete owner thereof exclusively entitled to vote,
to receive notifications and otherwise entitled to all the rights and powers of
a complete owner thereof, notwithstanding notice to the contrary.
SECTION 4.4. Lost, Stolen, Destroyed or Mutilated
Certificates. The Corporation shall issue a new certificate of stock to replace
a certificate theretofore issued by it alleged to have been lost, destroyed or
wrongfully taken, if the owner or his legal representative (i) requests
replacement, before the Corporation has notice that the stock certificate has
been acquired by a bona fide purchaser; (ii) files with the Corporation a bond
sufficient to indemnify the Corporation against any claim that may be made
against it on account of the alleged loss or destruction of any such stock
certificate or the issuance of any such new stock certificate; and (iii)
satisfies such other terms and conditions as the Board of Directors may from
time to time prescribe.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Indemnity. (a) The Corporation shall indemnify,
subject to the requirements of subsection (d) of this Section, any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation),
by reason of the fact that he is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation and, with respect to any criminal action
or proceeding,
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had no reasonable cause to believe his conduct was unlawful. 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 did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(b) The Corporation shall indemnify, subject to the
requirements of subsection (d) of this Section, any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer, employee
or agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Corporation unless and only to the extent that
the Court of Chancery of the State of Delaware or the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
the Court of Chancery of the State of Delaware or such other court shall deem
proper.
(c) To the extent that a director, officer, employee
or agent of the Corporation, or a person serving in any other enterprise at the
request of the Corporation, has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsection (a) and (b)
of this Section, or in defense of any claim, issue or matter therein, the
Corporation shall indemnify him against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b)
of this Section (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 in the
circumstances because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of this Section. Such determination shall be made (1) by
the
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Board of Directors by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (2) if such a quorum is
not obtainable, or, even if obtainable a quorum of disinterested directors, or
(3) by independent legal counsel in a written opinion, or (4) by the
stockholders.
(e) Expenses incurred by a director, officer,
employee or agent in defending a civil or criminal 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 upon receipt
of an undertaking by or on behalf of the director, officer, employee or agent to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Corporation as authorized in this Section.
(f) The indemnification and advancement of expenses
provided by or granted pursuant to, the other subsections of this Section shall
not limit the Corporation from providing any other indemnification or
advancement of expenses permitted by law nor shall it be deemed exclusive of any
other rights to which those seeking indemnification may be entitled under any
by-law, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office.
(g) The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or who is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Section.
(h) The indemnification and advancement of expenses
provided by, or granted pursuant to this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(i) For the purposes of this Section, 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 separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees or
agents, so that any person who is or was a director, officer, employee or agent
of such constituent corporation, or is or was
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<PAGE>
serving at the request of such constituent corporation as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, shall stand in the same position under the provisions of this
Section with respect to the resulting or surviving corporation as he would have
with respect to such constituent corporation if its separate existence had
continued.
(j) This Section 5.1 shall be construed to give the
Corporation the broadest power permissible by the Delaware General Corporation
Law, as it now stands and as heretofore amended.
SECTION 5.2. Waiver of Notice. Whenever notice is required by
the Certificate of Incorporation, the By-Laws or any provision of the General
Corporation Law of the State of Delaware, a written waiver thereof, signed by
the person entitled to notice, whether before or after the time required for
such notice, shall be deemed equivalent to notice. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the stockholders, directors or
members of a committee of directors need be specified in any written waiver of
notice.
SECTION 5.3. Fiscal Year. The fiscal year of the Corporation
shall start on such date as the Board of Directors shall from time to time
prescribe.
SECTION 5.4. Corporate Seal. The corporate seal shall be in
such form as the Board of Directors may from time to time prescribe, and the
same may be used by causing it or a facsimile thereof to be impressed or affixed
or in any other manner reproduced.
ARTICLE VI
AMENDMENT OF BY-LAWS
SECTION 6.1. Amendment. The By-Laws may be altered, amended or
repealed by the stockholders or by the Board of Directors by a majority vote.
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CERTIFICATE OF INCORPORATION
OF
CHAMPION METAL PRODUCTS, INC.
The undersigned, a natural person, for the purpose of
organizing a corporation for conducting the business and promoting the purposes
hereinafter stated, under the provisions of and subject to the requirements of
the laws of the State of Delaware (particularly Chapter 1, Title 8 of the
Delaware Code and the acts amendatory thereof and supplemental thereto, and
known, identified and referred to as the "General Corporation Law of the State
of Delaware"), hereby certifies that:
FIRST: The name of the corporation (hereinafter sometimes
called the "Corporation") is Champion Metal Products, Inc.
SECOND: The address, including street, number, city and county
of the registered office of the Corporation in the State of Delaware is 32
Loockerman Square, Suite L-100, Dover, Delaware 19904, County of Kent; and the
name of the registered agent of the Corporation in the State of Delaware at such
address is The Prentice-Hall Corporation System, Inc.
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 the State of Delaware.
FOURTH: The total number of shares of stock which the
Corporation shall have the authority to issue is one thousand (1000) all of
which are one cent ($.01) par value. All such shares are of one class and are
Common Stock.
FIFTH: The name and the mailing address of the incorporator is
as follows:
Gary Weston
Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, New York 10022
SIXTH: The Corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed
between the Corporation and its creditors or any class of them and/or between
the Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in a
summary way of the Corporation or of any creditor or stockholder thereof or on
the
<PAGE>
application of any receiver or receivers appointed for the Corporation under the
provisions of Section 291 of Title 8 of the Delaware Code or on the application
of trustees in dissolution under Section 279 of Title 8 of the Delaware Code
order a meeting of the creditors or class of creditors, and/or the stockholders
or class of stockholders of the Corporation, as the case may be, to be summoned
in such manner as the said court directs. If a majority in number representing
three-fourths in value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of the Corporation, as the case may be,
agree to any compromise or arrangement and to any reorganization of the
Corporation, as the case may be, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of the Corporation, as the case
may be, and also on the Corporation.
EIGHTH: For the management of the business and for the conduct
of the affairs of the Corporation, and in further definition, limitation and
regulation of the powers of the Corporation and of its directors and its
stockholders or any class thereof, as the case may be, it is further provided:
1. The management of the business and the
conduct of the affairs of the Corporation,
including the election of the Chairman of
the Board of Directors, if any, the
President, the Treasurer, the Secretary, and
other principal officers of the Corporation,
shall be vested in its Board of Directors.
The number of directors which shall
constitute the whole Board of Directors
shall be fixed by, or in the manner provided
in, the By- Laws. The phrase "whole Board"
and the phrase "total number of directors"
shall be deemed to have the same meaning, to
wit, the total number of directors which the
Corporation would have if there were no
vacancies. No election of directors need be
by written ballot.
2. The original By-Laws of the Corporation
shall be adopted by the incorporator unless
the Certificate of Incorporation shall name
the initial Board of Directors therein.
Thereafter, the power to make, alter, or
repeal the By-Laws, and to adopt any new By-
Law, except a By-Law classifying directors
for election for staggered terms, shall be
vested in the Board of Directors.
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3. Whenever the Corporation shall be authorized
to issue only one class of stock, each
outstanding share shall entitle the holder
thereof to notice of, and the right to vote
at, any meeting of stockholders. Whenever
the Corporation shall be authorized to issue
more than one class of stock, no outstanding
share of any class of stock which is denied
voting power under the provisions of the
Certificate of Incorporation shall entitle
the holder thereof to notice of, and the
right to vote at, any meeting of
stockholders, except as the provisions of
paragraph (b) (2) of Section 242 of the
General Corporation Law shall otherwise
require.
NINTH: The personal liability of the directors of the
corporation is hereby eliminated to the fullest extent permitted by paragraph
(7) of subsection (b) of Section102 of the General Corporation Law of the State
of Delaware, as same may be amended and supplemented.
TENTH: The Corporation shall, to the fullest extent permitted
by Section 145 of the General Corporation Law of the State of Delaware, as the
same may be amended and supplemented, indemnify any and all persons whom it
shall have power to indemnify under said section from and against any and all of
the expenses, liabilities or other matters referred to in or covered by said
section, and the indemnification provided for herein shall not be deemed
exclusive of any other rights to which those indemnified may be entitled under
any By-Law, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in their official capacities and as to action in
another capacity while holding such offices, and shall continue as to a person
who has ceased to be a director, officer, employee or agent and shall inure to
the benefit of the heirs, executors and administrators of such a person.
ELEVENTH: From time to time any of the provisions of this
Certificate of Incorporation may be amended, altered or repealed, and other
provisions authorized by the laws of the State of Delaware at the time in force
may be added or inserted in the manner and at the time prescribed by said laws,
and all rights at any time conferred upon the stockholders of the
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Corporation by this Certificate of Incorporation are granted subject to the
provisions of this Article ELEVENTH.
Dated: December 3, 1996.
--------------------------------------
Gary Weston, Incorporator
Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, New York 10022
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BY-LAWS
OF
CHAMPION METAL PRODUCTS, INC.
ARTICLE I
STOCKHOLDERS
SECTION 1.1. Annual Meetings. An annual meeting of
stockholders to elect directors and transact such other business as may properly
be presented to the meeting shall be held at such place as the Board of
Directors may from time to time fix, if that day shall be a legal holiday in the
jurisdiction in which the meeting is to be held, then on the next day not a
legal holiday or as soon thereafter as may be practical, determined by the Board
of Directors.
SECTION 1.2. Special Meetings. A special meeting of
stockholders may be called at any time by the Board of Directors or the Chairman
and shall be called by any of them or by the Secretary upon receipt of a written
request to do so specifying the matter or matters, appropriate for action at
such a meeting, proposed to be presented at the meeting and signed by holders of
record of a majority of the shares of stock that would be entitled to be voted
on such matter or matters if the meeting were held on the day such request is
received and the record date for such meeting were the close of business on the
preceding day. Any such meeting shall be held at such time and at such place,
within or without the State of Delaware, as shall be determined by the body or
person calling such meeting and as shall be stated in the notice of such
meeting.
SECTION 1.3. Notice of Meeting. For each meeting of
stockholders written notice shall be given stating the place, date and hour and,
in the case of a special meeting, the purpose or purposes for which the meeting
is called. Except as otherwise provided by Delaware law, the written notice of
any meeting shall be given not less than 10 or more than 60 days before the date
of the meeting to each stockholder entitled to vote at such meeting. If mailed,
notice shall be deemed to be given when deposited in the United States mail,
postage prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation.
<PAGE>
SECTION 1.4. Quorum. Except as otherwise required by Delaware
law or the Certificate of Incorporation, the holders of record of a majority of
the shares of stock entitled to be voted present in person or represented by
proxy at a meeting shall constitute a quorum for the transaction of business at
the meeting, but in the absence of a quorum the holders of record present or
represented by proxy at such meeting may vote to adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
is obtained. At any such adjourned session of the meeting at which there shall
be present or represented the holders of record of the requisite number of
shares, any business may be transacted that might have been transacted at the
meeting as originally called.
SECTION 1.5. Chairman and Secretary at Meeting. At each
meeting of stockholders the Chairman, or in his absence the person designated in
writing by the Chairman, or if no person is so designated, then a person
designated by the Board of Directors, shall preside as chairman of the meeting;
if no person is so designated, then the meeting shall choose a chairman by
plurality vote. The Secretary, or in his absence a person designated by the
chairman of the meeting, shall act as secretary of the meeting.
SECTION 1.6. Voting; Proxies. Except as otherwise provided by
Delaware law or the Certificate of Incorporation, and subject to the provisions
of Section 1.10:
(a) Each stockholder shall at every meeting of the
stockholders be entitled to one vote for each share of capital stock held by
him.
(b) Each stockholder entitled to vote at a meeting of
stockholders or to express consent or dissent to corporate action in writing
without a meeting may authorize another person or persons to act for him by
proxy, but no such proxy shall be voted or acted upon after three years from its
date, unless the proxy provides for a longer period.
(c) Directors shall be elected by a plurality vote.
(d) Each matter, other than election of directors,
properly presented to any meeting shall be decided by a majority of the votes
cast on the matter.
(e) Election of directors and the vote on any other
matter presented to a meeting shall be by written ballot only if so ordered by
the chairman of the meeting or if so requested by any stockholder present or
represented by proxy at the meeting entitled to vote in such election or on such
matter, as the case may be.
SECTION 1.7. Adjourned Meetings. A meeting of stockholders may
be adjourned to another time or place as provided in Section 1.4 or 1.6(d).
Unless the Board of Directors fixes a new record date, stockholders of record
for an adjourned meeting shall be as originally determined for the meeting from
which the adjournment was taken. If the adjournment is for more than 30 days, or
if after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote. At the adjourned meeting any business may be transacted that
might have been transacted at the meeting as originally called.
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SECTION 1.8. Consent of Stockholders in Lieu of Meeting. Any
action that may be taken at any annual or special meeting of stockholders may be
taken without a meeting, without prior notice and without a vote, if a consent
in writing, setting forth the action so taken, shall be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Notice of the taking of such
action shall be given promptly to each stockholder that would have been entitled
to vote thereon at a meeting of stockholders and that did not consent thereto in
writing.
SECTION 1.9. List of Stockholders Entitled to Vote. At least
10 days before every meeting of stockholders a complete list of the stockholders
entitled to vote at the meeting, arranged in alphabetical order and showing the
address of each stockholder and the number of shares registered in the name of
each stockholder, shall be prepared and 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 10 days prior to the meeting, at a place within
the city where the meeting is to be held. Such list shall be produced and kept
at the time and place of the meeting during the whole time thereof and may be
inspected by any stockholder who is present.
SECTION 1.10. Fixing of Record Date. 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, or to express consent to
corporate action in writing without a meeting, or entitled to receive payment of
any dividend or other distribution or allotment of any rights, or 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 of Directors may fix, in
advance, a record date, which shall not be more than 60 or less than 10 days
before the date of such meeting, nor more than 60 days prior to any other
action. If no record date is fixed, 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 is given,
or, if notice is waived, at the close of business on the day next preceding the
day on which the meeting is held; the record date for determining stockholders
entitled to express consent to corporate action in writing without a meeting,
when no prior action by the Board of Directors is necessary, shall be the day on
which the first written consent is expressed; and the record date for any other
purpose shall be at the close of business on the day on which the Board of
Directors adopts the resolution relating thereto.
ARTICLE II
DIRECTORS
SECTION 2.1. Number; Term of Office; Qualifications;
Vacancies. The number of directors that shall constitute the whole Board of
Directors shall be three (3), which number may be changed from time to time as
determined by action of the Board of Directors taken by the affirmative vote of
a majority of the whole Board of Directors. Directors shall be elected at the
annual meeting of stockholders to hold office, subject to Sections 2.2 and 2.3,
until the next annual meeting of stockholders and until their respective
successors are elected and
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qualified. Vacancies and newly created directorships resulting from any increase
in the authorized number of directors may be filled by a majority of the
directors then in office, although less than a quorum, or by the sole remaining
director, and the directors so chosen shall hold office, subject to Sections 2.2
and 2.3, until the next annual meeting of stockholders and until their
respective successors are elected and qualified.
SECTION 2.2. Resignation. Any director of the Corporation may
resign at any time by giving written notice of such resignation to the Board of
Directors, the Chairman or the Secretary of the Corporation. Any such
resignation shall take effect at the time specified therein or, if no time be
specified, upon receipt thereof by the Board of Directors or one of the
above-named officers; and, unless specified therein, the acceptance of such
resignation shall not be necessary to make it effective. When one or more
directors shall resign from the Board of Directors effective at a future date, a
majority of the directors then in office, including those who have so resigned,
shall have power to fill such vacancy or vacancies, the vote thereon to take
effect when such resignation or resignations shall become effective, and each
director so chosen shall hold office as provided in these By-Laws in the filling
of other vacancies.
SECTION 2.3. Removal. Any one or more directors may be
removed, with or without cause, by the vote or written consent of the holders of
a majority of the shares entitled to vote at an election of directors.
SECTION 2.4. Regular and Annual Meetings; Notice. Regular
meetings of the Board of Directors shall be held at such time and at such place,
within or without the State of Delaware, as the Board of Directors may from time
to time prescribe. No notice need be given of any regular meeting, and a notice,
if given, need not specify the purposes thereof. A meeting of the Board of
Directors may be held without notice immediately after an annual meeting of
stockholders at the same place as that at which such meeting was held.
SECTION 2.5. Special Meetings; Notice. A special meeting of
the Board of Directors may be called at any time by the Board of Directors, its
Chairman, the Executive Committee, the President or any person acting in the
place of the President and shall be called by any one of them or by the
Secretary upon receipt of a written request to do so specifying the matter or
matters, appropriate for action at such a meeting, proposed to be presented at
the meeting and signed by at least two directors. Any such meeting shall be held
at such time and at such place, within or without the State of Delaware, as
shall be determined by the body or person calling such meeting. Notice of such
meeting stating the time and place thereof shall be given (a) by deposit of the
notice in the United States mail, first class, postage prepaid, at least two
days before the day fixed for the meeting addressed to each director at his
address as it appears on the Corporation's records or at such other address as
the director may have furnished the Corporation for that purpose, or (b) by
delivery of the notice similarly addressed for dispatch by telegraph, cable or
radio or by delivery of the notice by telephone or in person, in each case at
least 24 hours before the time fixed for the meeting.
SECTION 2.6. Chairman of the Board; Presiding Officer and
Secretary at Meetings. The Board of Directors may elect one of its members to
serve at its pleasure as Chairman of the Board. Each meeting of the Board of
Directors shall be presided over by the Chairman of the Board or in his absence
by the President, if a director, or if neither is present
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by such member of the Board of Directors as shall be chosen at the meeting. The
Secretary, or in his absence an Assistant Secretary, shall act as secretary of
the meeting, or if no such officer is present, a secretary of the meeting shall
be designated by the person presiding over the meeting.
SECTION 2.7. Quorum. A majority of the whole Board of
Directors shall constitute a quorum for the transaction of business, but in the
absence of a quorum a majority of those present (or if only one be present, then
that one) may adjourn the meeting, without notice other than announcement at the
meeting, until such time as a quorum is present. Except as otherwise required by
the Certificate of Incorporation or the By-Laws, the vote of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors.
SECTION 2.8. Meeting by Telephone. Members of the Board of
Directors or of any committee thereof may participate in meetings of the Board
of Directors or of such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation shall constitute presence in
person at such meeting.
SECTION 2.9. Action Without Meeting. Unless otherwise
restricted by the Certificate of Incorporation, any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee thereof
may be taken without a meeting if all members of the Board of Directors or of
such committee, as the case may be, consent thereto in writing and the writing
or writings are filed with the minutes of proceedings of the Board of Directors
or of such committee.
SECTION 2.10. Executive and Other Committees. The Board of
Directors may, by resolution passed by a majority of the whole Board of
Directors, designate an Executive Committee and one or more other committees,
each such committee to consist of one or more directors as the Board of
Directors may from time to time determine. Any such committee, to the extent
provided in such resolution or resolutions, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the Corporation, including the power to authorize the seal of the
Corporation to be affixed to all papers that may require it but no such
committee shall have such power of authority in reference to amending the
Certificate of Incorporation, adopting an agreement of merger or consolidation,
recommending to the stockholders the sale, lease or exchange of all or
substantially all of the Corporation's property and assets, recommending to the
stockholders a dissolution of the Corporation or a revocation of a dissolution,
or amending the By-Laws; and unless the resolution shall expressly so provide,
no such committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock. In the absence or disqualification of a member
of a committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not he or they constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Each such
committee other than the Executive Committee shall have such name as may be
determined from time to time by the Board of Directors.
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SECTION 2.11. Compensation. No director shall receive any
stated salary for his services as a director or as a member of a committee but
shall receive such sum, if any, as may from time to time be fixed by the action
of a majority of the stockholders.
ARTICLE III
OFFICERS
SECTION 3.1. Election; Qualification. The officers of the
Corporation shall be a President, one or more Vice Presidents, a Secretary and a
Treasurer, each of whom shall be selected by the Board of Directors. The Board
of Directors may elect a Controller, one or more Assistant Secretaries, one or
more Assistant Treasurers, one or more Assistant Controllers and such other
officers as it may from time to time determine. Two or more offices may be held
by the same person.
SECTION 3.2. Term of Office. Each officer shall hold office
from the time of his election and qualification to the time at which his
successor is elected and qualified, unless he shall die or resign or shall be
removed pursuant to Section 3.4 at any time sooner.
SECTION 3.3. Resignation. Any officer of the Corporation may
resign at any time by giving written notice of such resignation to the Board of
Directors, the President or the Secretary of the Corporation. Any such
resignation shall take effect at the time specified therein or, if no time be
specified, upon receipt thereof by the Board of Directors or one of the
above-named officers; and, unless specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 3.4. Removal. Any officer may be removed at any time,
with or without cause, by the vote of two directors if there are three directors
or less, or the vote of a majority of the whole Board of Directors if there are
more than three directors.
SECTION 3.5. Vacancies. Any vacancy however caused in any
office of the Corporation may be filled by the Board of Directors.
SECTION 3.6. Compensation. The compensation of each officer
shall be such as the Board of Directors may from time to time determine.
SECTION 3.7. Chairman of the Board. The Chairman of the Board
shall be the chairman of all meetings of the Board of Directors. He shall keep
in close touch with the administration of the affairs of the Corporation and
supervise its general policies. He shall see that the acts of the executive
officers conform to the policies of the Corporation as determined by the Board
and shall perform such other duties as may from time to time be designated to
him by the Board.
SECTION 3.8. President. The President shall be the chief
executive officer of the Corporation and shall have general charge of the
business and affairs of the Corporation,
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subject however to the right of the Board of Directors to confer specified
powers on officers and subject generally to the direction of the Board of
Directors and the Executive Committee, if any.
SECTION 3.9. Vice President. Each Vice President shall have
such powers and duties as generally pertain to the office of Vice President and
as the Board of Directors or the President may from time to time prescribe.
During the absence of the president or his inability to act, the Vice President,
or if there shall be more than one Vice President, then that one designated by
the Board of Directors, shall exercise the powers and shall perform the duties
of the President, subject to the direction of the Board of Directors and the
Executive Committee, if any.
SECTION 3.10. Secretary. The Secretary shall keep the minutes
of all meetings of stockholders and of the Board of Directors. He shall be
custodian of the corporate seal and shall affix it or cause it to be affixed to
such instruments as require such seal and attest the same and shall exercise the
powers and shall perform the duties incident to the office of Secretary, subject
to the direction of the Board of Directors and the Executive Committee, if any.
SECTION 3.11. Other Officers. Each other officer of the
Corporation shall exercise the powers and shall perform the duties incident to
his office, subject to the direction of the Board of Directors and the Executive
Committee, if any.
ARTICLE IV
CAPITAL STOCK
SECTION 4.1. Stock Certificates. The interest of each holder
of stock of the Corporation shall be evidenced by a certificate or certificates
in such form as the Board of Directors may from time to time prescribe. Each
certificate shall be signed by or in the name of the Corporation by the
Chairman, the President or a Vice President and by the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary. Any of or all the
signatures appearing on such certificate or certificates may be a facsimile. If
any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be such
officer, transfer agent or registrar before such certificate is issued, it may
be issued by the Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
SECTION 4.2. Transfer of Stock. Shares of stock shall be
transferable on the books of the Corporation pursuant to applicable law and such
rules and regulations as the Board of Directors shall from time to time
prescribe.
SECTION 4.3. Holders of Record. Prior to due presentment for
registration of transfer the Corporation may treat the holder of record of a
share of its stock as the complete owner thereof exclusively entitled to vote,
to receive notifications and otherwise entitled to all the rights and powers of
a complete owner thereof, notwithstanding notice to the contrary.
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SECTION 4.4. Lost, Stolen, Destroyed or Mutilated
Certificates. The Corporation shall issue a new certificate of stock to replace
a certificate theretofore issued by it alleged to have been lost, destroyed or
wrongfully taken, if the owner or his legal representative (i) requests
replacement, before the Corporation has notice that the stock certificate has
been acquired by a bona fide purchaser; (ii) files with the Corporation a bond
sufficient to indemnify the Corporation against any claim that may be made
against it on account of the alleged loss or destruction of any such stock
certificate or the issuance of any such new stock certificate; and (iii)
satisfies such other terms and conditions as the Board of Directors may from
time to time prescribe.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. Indemnity. (a) The Corporation shall indemnify,
subject to the requirements of subsection (d) of this Section, any person who
was or is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation),
by reason of the fact that he is or was a director, officer, employee or agent
of the Corporation, or is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. 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 did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) The Corporation shall indemnify, subject to the
requirements of subsection (d) of this Section, any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer, employee
or agent of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Corporation unless and only to the extent that
the Court of Chancery of the State of Delaware or the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably
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entitled to indemnity for such expenses which the Court of Chancery of the State
of Delaware or such other court shall deem proper.
(c) To the extent that a director, officer, employee
or agent of the Corporation, or a person serving in any other enterprise at the
request of the Corporation, has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to in subsection (a) and (b)
of this Section, or in defense of any claim, issue or matter therein, the
Corporation shall indemnify him against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(d) Any indemnification under subsections (a) and (b)
of this Section (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 in the
circumstances because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of this Section. Such determination shall be made (1) by
the Board of Directors by a majority vote of a quorum consisting of directors
who were not parties to such action, suit or proceeding, or (2) if such a quorum
is not obtainable, or, even if obtainable a quorum of disinterested directors,
or (3) by independent legal counsel in a written opinion, or (4) by the
stockholders.
(e) Expenses incurred by a director, officer,
employee or agent in defending a civil or criminal 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 upon receipt
of an undertaking by or on behalf of the director, officer, employee or agent to
repay such amount if it shall ultimately be determined that he is not entitled
to be indemnified by the Corporation as authorized in this Section.
(f) The indemnification and advancement of expenses
provided by or granted pursuant to, the other subsections of this Section shall
not limit the Corporation from providing any other indemnification or
advancement of expenses permitted by law nor shall it be deemed exclusive of any
other rights to which those seeking indemnification may be entitled under any
by-law, agreement, vote of stockholders or disinterested directors or otherwise,
both as to action in his official capacity and as to action in another capacity
while holding such office.
(g) The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee or
agent of the Corporation, or who is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Section.
(h) The indemnification and advancement of expenses
provided by, or granted pursuant to this section shall, unless otherwise
provided when authorized or ratified, continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
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(i) For the purposes of this Section, 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 separate existence had continued, would
have had power and authority to indemnify its directors, officers, employees or
agents, so that any person who is or was a director, officer, employee or agent
of such constituent corporation, or is or was serving at the request of such
constituent corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, shall stand
in the same position under the provisions of this Section with respect to the
resulting or surviving corporation as he would have with respect to such
constituent corporation if its separate existence had continued.
(j) This Section 5.1 shall be construed to give the
Corporation the broadest power permissible by the Delaware General Corporation
Law, as it now stands and as heretofore amended.
SECTION 5.2. Waiver of Notice. Whenever notice is required by
the Certificate of Incorporation, the By-Laws or any provision of the General
Corporation Law of the State of Delaware, a written waiver thereof, signed by
the person entitled to notice, whether before or after the time required for
such notice, shall be deemed equivalent to notice. Attendance of a person at a
meeting shall constitute a waiver of notice of such meeting, except when the
person attends a meeting for the express purpose of objecting, at the beginning
of the meeting, to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the stockholders, directors or
members of a committee of directors need be specified in any written waiver of
notice.
SECTION 5.3. Fiscal Year. The fiscal year of the Corporation
shall start on such date as the Board of Directors shall from time to time
prescribe.
SECTION 5.4. Corporate Seal. The corporate seal shall be in
such form as the Board of Directors may from time to time prescribe, and the
same may be used by causing it or a facsimile thereof to be impressed or affixed
or in any other manner reproduced.
ARTICLE VI
AMENDMENT OF BY-LAWS
SECTION 6.1. Amendment. The By-Laws may be altered, amended or
repealed by the stockholders or by the Board of Directors by a majority vote.
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This Indenture, dated as of November 26, 1997, is among
Wheeling-Pittsburgh Corporation, a Delaware corporation (the "Company"), the
guarantors listed on the signature pages hereto (each, a "Guarantor" and,
collectively, the "Guarantors") and Bank One, N.A., a national banking
association, as trustee (the "Trustee").
The Company, the Guarantors and the Trustee agree as follows
for the benefit of each other and for the equal and ratable benefit of the
Holders of the 9 1/4% Series A Senior Notes due 2007 (the "Series A Notes") and
the 9 1/4% Series B Senior Notes due 2007 (the "Series B Notes" and, together
with the Series A Notes, the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.
"144A Global Note" means a permanent global senior note that
contains the paragraph referred to in footnote 1 and the additional schedule
referred to in footnote 3 to the form of the Note attached hereto as Exhibit
A-1, and that is deposited with the Note Custodian and registered in the name of
the Depository, representing a series of Notes sold in reliance on Rule 144A or
another exemption from the registration requirements of the Securities Act,
other than Regulation S.
"Acquired Indebtedness" means, with respect to any specified
Person, (i) Indebtedness of any other Person existing at the time such other
Person is merged with or into or became a Restricted Subsidiary of such
specified Person, including, without limitation, Indebtedness incurred in
connection with, or in contemplation of, such other Person merging with or into
or becoming a Restricted Subsidiary of such specified Person, and (ii)
Indebtedness secured by a Lien encumbering an asset acquired by such specified
Person at the time such asset is acquired by such specified Person.
"Affiliate" of any specified Person means any other Person
which, directly or indirectly, controls, is controlled by or is under direct or
indirect common control with, such specified Person. For the purposes of this
definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
provided that beneficial ownership of 10% or more of the voting securities of a
Person shall be deemed to be control, and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Applicable Premium" means, with respect to a Note at any
redemption date, the greater of (i) 1.0% of the principal amount of such Note
and (ii) the excess of (A) the present value at such time of (1) the redemption
price of such Note at November 15, 2002, plus (2) all required interest payments
due on such Note through November 15, 2002, computed
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using a discount rate equal to the Treasury Rate plus 50 basis points, over (B)
the then outstanding principal amount of such Note.
"Applicable Procedures" means, with respect to any transfer or
exchange of beneficial interests in a Global Note, the rules and procedures of
the Depository that apply to such transfer and exchange.
"Asset Sale" means the sale, lease, conveyance, disposition or
other transfer (a "disposition") of any properties, assets or rights (including,
without limitation, a sale and leaseback transaction or the issuance, sale or
transfer by the Company of Equity Interests of a Restricted Subsidiary) whether
in a single transaction or a series of related transactions; provided, however,
that the following transactions will be deemed not to be Asset Sales: (a) sales
of inventory in the ordinary course of business; (b) a disposition of assets by
the Company to a Wholly Owned Restricted Subsidiary or by a Wholly Owned
Restricted Subsidiary of the Company to the Company or to another Wholly Owned
Restricted Subsidiary of the Company; (c) a disposition of Equity Interests by a
Wholly Owned Restricted Subsidiary of the Company to the Company or to another
Wholly Owned Restricted Subsidiary of the Company; (d) a Permitted Investment or
Restricted Payment that is permitted by this Indenture; (e) the issuance by the
Company of Equity Interests; (f) the disposition of properties, assets or rights
in any fiscal year the aggregate Net Proceeds of which are less than $1.0
million; and (g) the sale of accounts receivable pursuant to the Receivables
Facility. The fair market value of any non-cash proceeds of a sale of assets
shall be determined by the Board of Directors of the Company, whose resolution
with respect thereto shall be delivered to the Trustee.
"Attributable Indebtedness" in respect of a sale and leaseback
transaction means, at the time of determination, the present value (discounted
at the rate of interest implicit in such transaction, determined in accordance
with GAAP) of the obligation of the lessee for net rental payments during the
remaining term of the lease included in such sale and leaseback transaction
(including any period for which such lease has been extended or may, at the
option of the lessor, be extended).
"Bankruptcy Law" means Title 11, United States Code, or any
similar federal or state law for the relief of debtors.
"Board of Directors" means, with respect to any Person, the
Board of Directors of such Person, or any authorized committee of the Board of
Directors of such Person.
"Business Day" means any day other than a Legal Holiday.
"Capital Expenditure Indebtedness" means Indebtedness incurred
by any Person to finance the purchase or construction of any property or assets
acquired or constructed by such Person which have a useful life of more than one
year so long as (a) the purchase or construction price for such property or
assets is included in "addition to property, plant or equipment" in accordance
with GAAP, (b) the acquisition or construction of such property or assets is not
part of any acquisition of a Person or line of business and (c) such
Indebtedness is incurred within 90 days of the acquisition or completion of
construction of such property or assets.
<PAGE>
"Capital Lease Obligation" means, at the time any
determination thereof is to be made, the amount of the liability in respect of a
capital lease that would at such time be required to be capitalized on a balance
sheet in accordance with GAAP.
"Capital Stock" means (a) in the case of a corporation,
corporate stock, (b) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents (however
designated) of corporate stock, (c) in the case of a partnership or limited
liability company, partnership or membership interests (whether general or
limited) and (d) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means (a) United States dollars, (b)
securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof having maturities of
not more than six months from the date of acquisition, (c) certificates of
deposit and eurodollar time deposits with maturities of six months or less from
the date of acquisition, bankers' acceptances with maturities not exceeding six
months and overnight bank deposits, in each case with any domestic commercial
bank having capital and surplus in excess of $500 million, (d) repurchase
obligations with a term of not more than seven days for underlying securities of
the types described in clauses (b) and (c) above entered into with any financial
institution meeting the qualifications specified in clause (c) above, (d)
commercial paper having the highest rating obtainable from Moody's Investors
Service, Inc. or Standard & Poor's Rating Service and in each case maturing
within six months after the date of acquisition and (e) money market mutual
funds substantially all of the assets of which are of the type described in the
foregoing clauses (a) through (d).
"Cedel" means Cedel Bank, societe anonyme.
"Change of Control" means any of the following: (a) the sale,
lease, transfer, conveyance or other disposition (other than by way of merger or
consolidation), in one or a series of related transactions, of all or
substantially all of the assets of the Company and its Restricted Subsidiaries,
taken as a whole, to any Person (as such term in used in Section 13(d)(3) of the
Exchange Act), (b) the adoption of a plan relating to the liquidation or
dissolution of the Company, (c) the consummation of any transaction (including,
without limitation, any merger or consolidation) the result of which is that (i)
any "Person" or "group" (as such terms are used in Section 13(d)(3) of the
Exchange Act) other than WHX or an underwriter or group of underwriters in an
underwritten public offering becomes the "beneficial owner" (as such term is
defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act), directly or
indirectly through one or more intermediaries, of at least 50% of the voting
power of the outstanding voting stock of the Company, (d) the merger or
consolidation of the Company with or into another corporation with the effect
that the existing stockholders of the Company hold less than 50% of the combined
voting power of the then outstanding voting securities of the surviving
corporation of such merger or the corporation resulting from such consolidation
or (e) the first day on which more than a majority of the members of the Board
of Directors of the Company are not Continuing Directors.
"Consolidated Cash Flow" means, with respect to any Person for
any period, the Consolidated Net Income of such Person for such period plus (a)
provision for taxes based on income or profits of such Person and its Restricted
Subsidiaries, to the extent that such
<PAGE>
provision for taxes was included in computing Consolidated Net Income, plus (b)
Consolidated Interest Expense of such Person and its Restricted Subsidiaries for
such period, whether paid or accrued and whether or not capitalized (including,
without limitation, amortization of debt issuance costs and original issue
discount, non-cash interest payments, the interest component of any deferred
payment obligations, the interest component of all payments associated with
Capital Lease Obligations, commissions discounts and other fees and charges
incurred in respect of letter of credit or bankers' acceptance financings, and
net payments (if any) pursuant to Hedging Obligations), to the extent that any
such expense was deducted in computing Consolidated Net Income, plus (c)
depreciation and amortization (including amortization of goodwill and other
intangibles but excluding amortization of prepaid cash expenses that were paid
in a prior period) and other non-cash charges of such Person and its Restricted
Subsidiaries for such period, to the extent that such depreciation, amortization
and other non-cash charges were deducted in computing Consolidated Net Income,
minus (d) non-cash items increasing consolidated revenues in determining
Consolidated Net Income for such period to the extent not already reflected as
an expense in computing Consolidated Net Income, minus (e) all cash payments
during such period relating to non-cash charges and other non-cash items that
were or would have been added back in determining Consolidated Cash Flow for any
prior period, in each case, on a consolidated basis and determined in accordance
with GAAP.
"Consolidated Interest Coverage Ratio" means with respect to
any Person for any period, the ratio of the Consolidated Cash Flow of such
Person for such period to the Consolidated Interest Expense of such Person for
such period; provided, however, that the Consolidated Interest Coverage Ratio
shall be calculated giving pro forma effect to each of the following
transactions as if each such transaction had occurred at the beginning of the
applicable four-quarter reference period: (a) any incurrence, assumption,
guarantee or redemption by the Company or any of its Restricted Subsidiaries of
any Indebtedness (including revolving credit borrowings based on the average
daily balance outstanding during the relevant period) subsequent to the
commencement of the period for which the Consolidated Interest Coverage Ratio is
being calculated but prior to the date on which the event for which the
calculation of the Consolidated Interest Coverage Ratio is made (the
"Calculation Date"); (b) any acquisition that has been made by the Company or
any of its Restricted Subsidiaries, or approved and expected to be consummated
within 30 days of the Calculation Date, including, in each case, through a
merger or consolidation, and including any related financing transactions,
during the four-quarter reference period or subsequent to such reference period
and on or prior to the Calculation Date (in which case Consolidated Cash Flow
for such reference period shall be calculated to include the Consolidated Cash
Flow of the acquired entities and without giving effect to clause (c) of the
proviso set forth in the definition of Consolidated Net Income); and (c) any
other transaction that may be given pro forma effect in accordance with Article
11 of Regulation S-X as in effect from time to time; and provided, further, that
(i) the Consolidated Cash Flow attributable to discontinued operations, as
determined in accordance with GAAP, and operations or businesses disposed of
prior to the Calculation Date, shall be excluded and (ii) the Consolidated
Interest Expense attributable to discontinued operations, as determined in
accordance with GAAP, and operations or businesses disposed of prior to the
Calculation Date, shall be excluded, but only to the extent that the obligations
giving rise to such Consolidated Interest Expense will not be obligations of the
referent Person or any of its Restricted Subsidiaries following the Calculation
Date.
<PAGE>
"Consolidated Interest Expense" means, with respect to any
Person for any period, the sum, without duplication, of (a) the consolidated
interest expense of such Person and its Restricted Subsidiaries for such period,
whether paid or accrued (including, without limitation, amortization of debt
issuance costs and original issue discount, non-cash interest payments, the
interest component of any deferred payment obligations, the interest component
of all payments associated with Capital Lease Obligations, commissions,
discounts and other fees and charges incurred in respect of letter of credit or
bankers' acceptance financings, and net payments (if any) pursuant to Hedging
Obligations), (b) any interest expense on Indebtedness of another Person that is
guaranteed by such Person or one of its Subsidiaries or secured by a Lien on
assets of such Person or one of its Restricted Subsidiaries (whether or not such
guarantee of Lien is called upon), (c) the consolidated interest expense of such
Person and its Restricted Subsidiaries that was capitalized during such period
and (d) the product of (i) all cash dividend payments on any series of preferred
stock of such Person, times (ii) a fraction, the numerator of which is one and
the denominator of which is one minus the then current combined federal, state
and local statutory tax rates of such Person, expressed as a decimal, in each
case, on a consolidated basis and in accordance with GAAP.
"Consolidated Net Income" means, with respect to any Person
for any period, the aggregate of the Net Income of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; provided that (a) the Net Income (but not loss) of any
Person that is not a Restricted Subsidiary or that is accounted for by the
equity method of accounting shall be included only to the extent of the amount
of dividends or distributions paid in cash to the referent Person or a Wholly
Owned Restricted Subsidiary thereof, (b) the Net Income of any Restricted
Subsidiary shall be excluded to the extent that the declaration or payment of
dividends or similar distributions by that Restricted Subsidiary of that Net
Income is not at the date of determination permitted without any prior
governmental approval (that has not been obtained) or, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders, (c) the Net Income of any Person
acquired in a pooling of interests transaction for any period prior to the date
of such acquisition shall be excluded and (d) the cumulative effect of a change
in accounting principles shall be excluded.
"Consolidated Net Worth" means, with respect to any Person as
of any date, the sum of (a) the consolidated equity of the common stockholders
of such Person and its consolidated Restricted Subsidiaries as of such date plus
(b) the respective amounts reported on such Person's balance sheet as of such
date with respect to any series of preferred stock (other than Disqualified
Stock) that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred stock, less (i) all
write-ups (other than write-ups resulting from foreign currency translations and
write-ups of tangible assets of a going concern business made within 12 months
after the acquisition of such business) subsequent to the date of this Indenture
in the book value of any asset owned by such Person or a consolidated Restricted
Subsidiary of such Person, (ii) all investments as of such date in
unconsolidated Restricted Subsidiaries and in Persons that are not Subsidiaries
and (iii) all unamortized debt discount and expense and unamortized deferred
charges as of such date, in each case determined in accordance with GAAP;
provided, however, that any changes after the date of the Indenture in the
liabilities of
<PAGE>
such Person and its Restricted Subsidiaries in respect of other post-retirement
employee benefits or pension benefits that would be reflected on a consolidated
balance sheet of such Person and its Restricted Subsidiaries in accordance with
GAAP shall be excluded.
"Continuing Directors" means, as of any date of determination,
any member of the Board of Directors of the Company who (a) was a member of the
Board of Directors of the Company on the date of original issuance of the Notes
or (b) was nominated for election to the Board of Directors of the Company with
the approval of, or whose election to the Board of Directors of the Company was
ratified by, at least two-thirds of the Continuing Directors who were members of
the Board of Directors of the Company at the time of such nomination or election
or by WHX so long as WHX owns a majority of the Capital Stock of the Company.
"Corporate Trust Office of the Trustee" shall be at the
address of the Trustee specified in Section 11.02 hereof or such other address
as to which the Trustee may give notice to the Company.
"Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
"Default" means any event that is or with the passage of time
or the giving of notice or both would be an Event of Default.
"Definitive Notes" means Notes that are in the form of Exhibit
A-1 attached hereto (but without including the text referred to in footnotes 1
and 3 thereto).
"Depository" means, with respect to the Notes issuable or
issued in whole or in part in global form, the Person specified in Section 2.03
hereof as the Depository with respect to the Notes, until a successor shall have
been appointed and become such pursuant to the applicable provision of this
Indenture, and, thereafter, "Depository" shall mean or include such successor.
"Disqualified Stock" means any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, matures (excluding any
maturity as a result of an optional redemption by the issuer thereof) or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
redeemable at the option of the holder thereof, in whole or in part, on or prior
to the date that is 91 days after the date on which the Notes mature or are
redeemed or retired in full; provided, that any Capital Stock that would
constitute Disqualified Stock solely because the holders thereof (or of any
security into which it is convertible or for which it is exchangeable) have the
right to require the issuer to repurchase such Capital Stock (or such security
into which it is convertible or for which it is exchangeable) upon the
occurrence of an Asset Sale or a Change of Control shall not constitute
Disqualified Stock if such Capital Stock (and all such securities into which it
is convertible or for which it is exchangeable) provides that the issuer thereof
will not repurchase or redeem any such Capital Stock (or any such security into
which it is convertible or for which it is exchangeable) pursuant to such
provisions prior to compliance by the Company with Section 4.10 or 4.15 hereof,
as the case may be.
<PAGE>
"Equity Interests" means Capital Stock and all warrants,
options or other rights to acquire Capital Stock (but excluding any debt
security that is convertible into, or exchangeable for, Capital Stock).
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Offer" means the offer that is required to be made
by the Company pursuant to the Registration Rights Agreement to exchange Series
B Notes for Series A Notes.
"Existing Indebtedness" means Indebtedness of the Company and
its Subsidiaries in existence on the date of this Indenture including, without
limitation, the Obligations of the Company and its Restricted Subsidiaries under
(i) the Close Corporation and Shareholders Agreement of Ohio Coatings Company as
existing on the date of the Indenture and the guarantee by the Company or any
Restricted Subsidiary of up to $20 million of Indebtedness of Ohio Coatings
Company under the Credit Agreement between Ohio Coatings Company and National
City Bank, Northeast, or (ii) the Keepwell Agreement, dated December 28, 1995,
between the Company, WPSC, WHX and the lenders party thereto as existing on the
date of the Indenture to the extent permitted by the WHX Agreements, until such
amounts are repaid.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as have been approved by a significant segment
of the accounting profession, which are in effect from time to time.
"Global Note" means, individually and collectively, the
Regulation S Global Note and the 144A Global Note.
"guarantee" means a guarantee (other than by endorsement of
negotiable instruments for collection in the ordinary course of business),
direct or indirect, in any manner (including, without limitation, letters of
credit and reimbursement agreements in respect thereof), of all or any party of
any Indebtedness.
"Hedging Obligations" means, with respect to any Person, the
obligations of such Person under interest rate swap agreements, interest rate
cap agreements, interest rate collar agreements and other agreements or
arrangements designed to protect such Person against fluctuations in interest
rates.
"Holder" means a Person in whose name a Note is registered.
"Indebtedness" means, with respect to any Person, any
indebtedness of such Person, whether or not contingent, in respect of borrowed
money or evidenced by bonds, notes, debentures or similar instruments or letters
of credit (or reimbursement agreements in respect thereof) or banker's
acceptances or representing Capital Lease Obligations or the balance
<PAGE>
deferred and unpaid of the purchase price of any property or representing any
Hedging Obligations, except any such balance that constitutes an accrued expense
or trade payable, if and to the extent any of the foregoing indebtedness (other
than letters of credit and Hedging Obligations) would appear as a liability upon
a balance sheet of such Person prepared in accordance with GAAP, as well as
Indebtedness of others secured by a Lien on any asset of such Person (whether or
not such Indebtedness is assumed by such Person) and, to the extent not
otherwise included, the guarantee by such Person of any Indebtedness of any
other Person. The amount of any Indebtedness outstanding as of any date shall be
(a) the accredit value thereof, in the case of any Indebtedness that does not
require current payments of interest and (b) the principal amount thereof, in
the case of any other Indebtedness.
"Indenture" means this Indenture, as amended or supplemented
from time to time.
"Indirect Participant" means a Person who holds an interest
through a Participant.
"Initial Purchasers" means Donaldson, Lufkin & Jenrette
Securities Corporation and Citicorp Securities, Inc.
"Institutional Accredited Investor" means an "accredited
investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act.
"Investments" means, with respect to any Person, all
investments by such Person in other Persons (including Affiliates) in the forms
of direct or indirect loans (including guarantees by the referent Person of, and
Liens on any assets of the referent Person securing, Indebtedness or other
obligations of other Persons), advances or capital contributions (excluding
commission, travel and similar advances to officers and employees made in the
ordinary course of business), purchases or other acquisitions for consideration
of Indebtedness, Equity Interests or other securities, together with all items
that are or would be classified as investments on a balance sheet prepared in
accordance with GAAP. If the Company or any Restricted Subsidiary of the Company
sells or otherwise disposes of any Equity Interests of any direct or indirect
Restricted Subsidiary of the Company such that, after giving effect to any such
sale or disposition, such Person is no longer a Restricted Subsidiary of the
Company, the Company shall be deemed to have made an Investment on the date of
any such sale or disposition equal to the fair market value of the Equity
Interests of such Restricted Subsidiary not sold or disposed of in an amount
determined as provided in the final paragraph of Section 4.07 hereof.
"Legal Holiday" means a Saturday, a Sunday or a day on which
banking institutions in the City of New York or at a place of payment are
authorized by law, regulation or executive order to remain closed. If a payment
date is a Legal Holiday at a place of payment, payment may be made at that place
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period.
"Letter of Credit Facility" means the Letter of Credit
Agreement, dated as of August 22, 1994, among WPSC and Citibank, N.A., as the
same may be amended, supplemented or otherwise modified including any
refinancing, refunding, replacement or
<PAGE>
extension thereof and whether by the same or any other lender or group of
lenders, provided, that the aggregate amount of letters of credit available
thereunder may not exceed $50,000,000.
"Letter of Undertaking" means that certain letter of
undertaking dated July 21, 1997 from WHX to The Sanwa Bank, Limited, as existing
on the date of the Indenture.
"Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in and any filing of or agreement to give any financing
statement under the Uniform Commercial Code (or equivalent statutes) of any
jurisdiction).
"Liquidated Damages" means all liquidated damages then owing
pursuant to Section 5 of the Registration Rights Agreement.
"Net Cash Proceeds" means with respect to any issuance or sale
of common stock of the Company, the cash proceeds of such issuance or sale net
of attorneys' fees, accountants' fees, underwriters' fees, broker's commissions
and consultant and any other fees actually incurred in connection with such
issuance or sale.
"Net Income" means, with respect to any Person, the net income
(loss) of such Person, determined in accordance with GAAP and before any
reduction in respect of preferred stock dividends, excluding, however, (a) any
gain (but not loss), together with any related provision for taxes on such gain
(but not loss), realized in connection with (i) any Asset Sale (including,
without limitation, dispositions pursuant to sale and leaseback transactions) or
(ii) the disposition of any securities by such Person or any of its Restricted
Subsidiaries or the extinguishment of any Indebtedness of such Person or any of
its Restricted Subsidiaries and (b) any extraordinary or nonrecurring gain (but
not loss), together with any related provision for taxes on such extraordinary
or nonrecurring gain (but not loss).
"Net Proceeds" means the aggregate cash proceeds received by
the Company or any of its Restricted Subsidiaries in respect of any Asset Sale
(including, without limitation, any cash received upon the sale or other
disposition of any non-cash consideration received in any Asset Sale), net of
(without duplication) (a) the direct costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees,
sales commissions, recording fees, title transfer fees, title insurance
premiums, appraiser fees and costs incurred in connection with preparing such
asset for sale) and any relocation expenses incurred as a result thereof, (b)
taxes paid or estimated to be payable as a result thereof (after taking into
account any available tax credits or deductions and any tax sharing
arrangements), (c) amounts required to be applied to the repayment of
Indebtedness (other than Permitted Working Capital Indebtedness) secured by a
Lien on the asset or assets that were the subject of such Asset Sale and (d) any
reserve established in accordance with GAAP or any amount placed in escrow, in
either case for adjustment in respect of the sale price of such asset or assets,
until such time as such reserve is reversed or such escrow arrangement is
terminated, in which case Net Proceeds shall include only the amount of the
reserve so reversed or the amount returned to the Company or its Restricted
Subsidiaries from such escrow arrangement, as the case may be.
<PAGE>
"Non-Recourse Debt" means Indebtedness (i) as to which neither
the Company nor any of its Restricted Subsidiaries (a) provides credit support
of any kind (including any undertaking, agreement or instrument that would
constitute Indebtedness), (b) is directly or indirectly liable (as a guarantor
or otherwise) or (c) constitutes the lender, and (ii) with respect to which no
default (including any rights that the Holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any Holder of any other Indebtedness of the
Company or any of its Restricted Subsidiaries to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its stated maturity.
"Note Custodian" means the Trustee, as custodian with respect
to the Notes in global form, or any successor entity thereto.
"Non-U.S. Person" means a Person who is not a U.S. Person as
defined in Section 902(o) of the Securities Act.
"Note Obligations" means all Obligations of the Company with
respect to the Notes.
"Note Pro Rata Share" means with respect to Excess Proceeds,
the amount equal to the product of (a) Excess Proceeds and (b) the fraction
determined by dividing (i) the aggregate principal of Notes then outstanding by
(ii) the sum of the aggregate principal amount of Notes then outstanding and the
aggregate amount of borrowings under the Term Loan Agreement then outstanding.
"Obligations" means any principal, interest, penalties, fees,
indemnification, reimbursements, damages and other liabilities payable under the
documentation governing any Indebtedness.
"Offering" means the offering of the Notes by the Company.
"Officer" means, with respect to any Person, the Chairman of
the Board, the Chief Executive Officer, the President, the Chief Operating
Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer,
the Controller, the Secretary or any Vice-President of such Person.
"Officer's Certificate" means a certificate signed on behalf
of the Company by the principal executive officer, the principal financial
officer, the treasurer or the principal accounting officer of the Company, that
meets the requirements of Section 11.05 hereof.
"Opinion of Counsel" means an opinion from legal counsel who
is reasonably acceptable to the Trustee, that meets the requirements of Section
11.05 hereof. The counsel may be an employee of or counsel to the Company, any
Restricted Subsidiary of the Company or the Trustee.
"Participant" means with respect to DTC, Euroclear or Cedel, a
Person who has an account with DTC, Euroclear or Cedel, respectively (and, with
respect to DTC, shall include Euroclear and Cedel).
<PAGE>
"Permitted Investments" means (a) any Investment in the
Company or in a Wholly Owned Restricted Subsidiary of the Company, (b) any
Investment in Cash Equivalents, (c) any Investment by the Company or any
Restricted Subsidiary of the Company in a Person that is engaged in the same
line of business as the Company and its Restricted Subsidiaries were engaged in
on the date of this Indenture or a line of business or manufacturing or
fabricating operation reasonably related thereto (including any downstream steel
manufacturing or processing operation or manufacturing or fabricating operation
in the construction products business) if as a result of such Investment (i)
such Person becomes a Wholly Owned Restricted Subsidiary of the Company and a
Guarantor or (ii) such Person is merged, consolidated or amalgamated with or
into, or transfers or conveys substantially all of its assets to, or is
liquidated into, the Company or a Wholly Owned Restricted Subsidiary of the
Company, (d) any Investment made as a result of the receipt of non-cash
consideration from (i) an Asset Sale that was made pursuant to and in compliance
with Section 4.10 hereof or (ii) a disposition of assets that does not
constitute an Asset Sale, (e) any Investment acquired solely in exchange for
Equity Interests (other than Disqualified Stock) of the Company, (f) Investments
existing as of the date of the Indenture and (g) other Investments in any Person
that is engaged in the same line of business as the Company and its Restricted
Subsidiaries were engaged in on the date of the Indenture or a line of business
or manufacturing or fabricating operation reasonably related thereto (including
any downstream steel manufacturing or processing operation or manufacturing or
fabricating operation in the construction products business) which Investment
has a fair market value (as determined by a resolution of the Board of Directors
of the Company and set forth in an officer's certificate delivered to the
Trustee), when taken together with all other investments made pursuant to this
clause (g) that are at the time outstanding, not to exceed $10.0 million.
"Permitted Liens" means (a) Liens existing as of the date of
this Indenture; (b) Liens in favor of the Company and its Subsidiaries; (c)
Liens on property of a Person existing at the time such Person is merged into or
consolidated with the Company or any Subsidiary of the Company, provided that
such Liens were in existence prior to the contemplation of such merger or
consolidation and do not extend to any assets other than those of the Person
merged into or consolidated with the Company or any of its Restricted
Subsidiaries; (d) Liens on property existing at the time of acquisition thereof
by the Company or any Restricted Subsidiary of the Company, provided that such
Liens were in existence prior to the contemplation of such acquisition; (e)
pledges or deposits under workmen's compensation laws, unemployment insurance
laws or similar legislation, or good faith deposits in connection with bids,
tenders, contracts (other than for the payment of Indebtedness) or leases to
which such Person is a party, or deposits to secure public statutory obligations
of such Person or deposits of cash or United States Government bonds to secure
surety or appeal bonds to which such Person is a party, or deposits as security
for contested taxes or import duties or for the payment of rent in each case
incurred in the ordinary course of business (f) Liens for taxes, assessments or
governmental charges or claims that are not yet delinquent or that are being
contested in good faith by appropriate proceedings promptly instituted and
diligently pursued, provided that any reserve or other appropriate provision as
shall be required in conformity with GAAP shall have been made therefor, (g)
Liens incurred in the ordinary course of business of the Company or any
Restricted Subsidiary of the Company with respect to obligations that do not
exceed $10.0 million at any one time outstanding and that (1) are not incurred
in connection with the borrowing of money or the obtaining of advances or credit
(other than trade credit in the ordinary course of business) and (2) do not in
the aggregate materially detract from the value of
<PAGE>
the property or materially impair the use thereof in the operation of business
by the Company or such Restricted Subsidiary; (h) Liens securing Permitted
Refinancing Indebtedness, provided that the Company was permitted to incur such
Liens with respect to the Indebtedness so refinanced; and (i) minor
encroachments, encumbrances, easements or reservations of, or rights of others
for, rights-of-way, sewers, electric lines, telegraph and telephone lines and
other similar purposes, or zoning or other restrictions as to the use of real
properties all of which do not materially impair the value or utility for its
intended purposes of the real property to which they relate or Liens incidental
to the conduct of the business of such Person or to the ownership of its
properties.
"Permitted Refinancing Indebtedness" means any Indebtedness of
the Company or any of its Restricted Subsidiaries issued in exchange for, or the
net proceeds of which are used to extend, refinance, renew, replace, defease or
refund other Indebtedness (other than Indebtedness under the Revolving Credit
Facility) of the Company or any of its Restricted Subsidiaries; provided that
(a) the principal amount (or accreted value, if applicable) of such Permitted
Refinancing Indebtedness does not exceed the principal amount of (or accreted
value, if applicable), plus premium, if any, and accrued interest on, the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded
(plus the amount of reasonable expenses incurred in connection therewith); (b)
such Permitted Refinancing Indebtedness has a final maturity date no earlier
than the final maturity date of, and has a Weighted Average Life to Maturity
equal to or greater than the Weighted Average Life to Maturity of, the
Indebtedness being extended, refinanced, renewed, replaced, defeased or
refunded; (c) if the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded is subordinated in right of payment to the Notes, such
Permitted Refinancing Indebtedness is subordinated in right of payment to the
Notes on terms at least as favorable, taken as a whole, to the Holders of Notes
as those contained in the documentation governing the Indebtedness being
extended, refinanced, renewed, replaced, defeased or refunded and such
Indebtedness shall not have any scheduled principal payment prior to the 91st
day after the final maturity date of the Notes and (d) such Indebtedness is
incurred either by the Company or by the Restricted Subsidiary who is the
obligor on the Indebtedness being extended, refinanced, renewed, replaced,
defeased or refunded; provided, however, that a Restricted Subsidiary may
guarantee Permitted Refinancing Indebtedness incurred by the Company, whether or
not such Restricted Subsidiary was an obligor or guarantor of the Indebtedness
being extended, refinanced, renewed, replaced, defeased or refunded; and
provided, further, that if such Permitted Refinancing Indebtedness is
subordinated to the Notes, such guarantee shall be subordinated to such
Restricted Subsidiary's Subsidiary Guarantee to at least the same extent.
"Permitted Working Capital Indebtedness" means Indebtedness of
the Company and its Restricted Subsidiaries under the Revolving Credit Facility
and under any other agreement, instrument, facility or arrangement that is
intended to provide working capital financing or financing for general corporate
purposes (including any asset securitization facility involving the sale of
accounts receivable); provided that the aggregate outstanding amount of such
Indebtedness of the Company and its Restricted Subsidiaries, at the time of
incurrence, shall not exceed greater of (a) the sum of (i) 50% of the net
aggregate book value of all inventory of the Company and its Restricted
Subsidiaries at such time and (ii) 80% of the net aggregate book value of all
accounts receivable (net of bad debt expense) of the Company and its Restricted
Subsidiaries at such time and (b) $175 million.
<PAGE>
"Person" means any individual, corporation, partnership,
limited liability company, joint venture, association, joint-stock company,
trust, unincorporated organization or government or agency or political
subdivision thereof (including any subdivision or ongoing business of any such
entity or substantially all of the assets of any such entity, subdivision or
business).
"Public Equity Offering" means an underwritten offering of
common stock of the Company registered under of the Securities Act.
"QIB" means a "qualified institutional buyer" as defined in
Rule 144A under the Securities Act.
"Receivables Facility" means the program for the issuance and
placement from time to time of trade receivable-backed adjustable rate
securities, all as contemplated by that certain Pooling and Servicing Agreement,
dated as of August 1, 1994, between Wheeling- Pittsburgh Funding, Inc., WPSC,
Bank One, Columbus, N.A. and Wheeling-Pittsburgh Trade Receivable Master Trust
and that certain Receivables Purchase Agreement, dated as of August 1, 1994,
between WPSC and Wheeling-Pittsburgh Funding, Inc., as each may be amended,
supplemented or otherwise modified including any refunding, replacement or
extension thereof.
"Replacement Assets" means (x) properties and assets (other
than cash or any Capital Stock or other security) that will be used in a
business of the Company and its Subsidiaries conducted on the date of this
Indenture or in a line of business or manufacturing or fabricating operation
reasonably related thereto (including any downstream steel processing or
manufacturing operation or manufacturing or fabricating operation in the
construction products business) or (y) Capital Stock of any Person that will
become on the date of the acquisition thereof a Wholly Owned Restricted
Subsidiary of the Company as a result of such acquisition.
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of November 26, 1997, by and among the Company, the
Guarantors and the Initial Purchasers, as such agreement may be amended,
modified or supplemented from time to time.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Note" means one of the Regulation S
Temporary Global Note or the Regulation S Permanent Global Note, as appropriate.
"Regulation S Permanent Global Note" means a permanent global
note issued following the 40-day restricted period (as defined in Regulation S)
that contains the paragraph referred to in footnote 1 and the additional
schedule referred to in footnote 3 to the form of the Note attached hereto as
Exhibit A-1, and that is deposited with the Note Custodian and registered in the
name of the Depository, representing a series of Notes sold in reliance on
Regulation S.
"Regulation S Temporary Global Note" means a single temporary
global note in the form of the Note attached hereto as Exhibit A-2 that is
deposited with the Note Custodian
<PAGE>
and registered in the name of the Depository for the accounts of Euroclear and
Cedel, representing a series of Notes sold in reliance on Regulation S.
"Responsible Officer," when used with respect to the Trustee,
means any officer within the Corporate Trust Department of the Trustee (or any
successor department of the Trustee) or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Restricted Beneficial Interest" means any beneficial interest
of a Participant or Indirect Participant in the 144A Global Note or the
Regulation S Global Note.
"Restricted Definitive Notes" means the Definitive Notes that
must bear the legend set forth in Section 2.06(f) hereof.
"Restricted Global Notes" means the 144A Global Note and the
Regulation S Global Note, each of which shall bear the legend set forth in
Section 2.06(f) hereof.
"Restricted Investment" means an Investment other than a
Permitted Investment.
"Restricted Subsidiary" of a Person means any Subsidiary of
such Person that is not an Unrestricted Subsidiary.
"Revolving Credit Facility" means the Second Amended and
Restated Credit Agreement, dated as of December 28, 1995, among WPSC, the
lenders party thereto and Citibank, N.A. as agent, as the same may be amended,
supplemented or otherwise modified including any refinancing, refunding,
replacement or extension thereof and whether by the same or any other lender or
groups of lenders.
"Rule 144A" means Rule 144A promulgated under the Securities
Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of
Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation
is in effect on the date hereof.
"Stated Maturity" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"Subsidiary" means, with respect to any Person, (a) any
corporation, association or other business entity of which more than 50% of the
total voting power of shares of Capital
<PAGE>
Stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of that Person (or a combination thereof) and (b) any partnership
(i) the sole general partner or the managing general partner of which is such
Person or a Subsidiary of such Person or (ii) the only general partners of which
are such Person or of one or more Subsidiaries of such Person (or any
combination thereof).
"Subsidiary Guarantees" means the joint and several guarantees
of the Company's payment obligations under the Notes issued by all of the
Company's present and future Restricted Subsidiaries (the "Guarantors").
"Tax Sharing Agreement" means the Tax Sharing Agreement
between the Company and WHX as in effect on the date of this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
SectionSection 77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA.
"Term Loan Agreement" means the Term Loan Agreement, dated as
of the date of this Indenture, between the Company, DLJ Capital Funding, Inc.,
as syndication agent, Donaldson, Lufkin & Jenrette Securities Corporation, as
arranger, Citicorp USA, Inc., as documentation agent, a financial institution to
be determined as administrative agent and the lenders party thereto.
"Transfer Restricted Securities" means securities that bear or
are required to bear the legend set forth in Section 2.06(f) hereof.
"Treasury Rate" means the yield to maturity at the time of
computation of United States Treasury securities with a constant maturity (as
compiled and published in the most recent Federal Reserve Statistical Release
H.15 (519) which has become publicly available at least two business days prior
to the Redemption Date (or, if such Statistical Release is no longer published,
any publicly available source or similar market data)) most nearly equal to the
period from the redemption date to November 15, 2002; provided, however, that if
the period from the redemption date to November 15, 2002 is not equal to the
constant maturity of a United States Treasury security for which a weekly
average yield is given, the Treasury Rate shall be obtained by linear
interpolation (calculated to the nearest one-twelfth of a year) from the weekly
average yields of United States Treasury securities for which such yields are
given, except that if the period from the redemption date to November 15, 2002
is less than one year, the weekly average yield on actually traded United States
Treasury securities adjusted to a constant maturity of one year shall be used.
"Trustee" means the party named as such above until a
successor replaces it in accordance with the applicable provisions of this
Indenture and thereafter means the successor serving hereunder.
"Unimast" means Unimast, Inc., an Ohio corporation.
"Unrestricted Global Notes" means one or more Global Notes
that do not and are not required to bear the legend set forth in Section 2.06(f)
hereof.
<PAGE>
"Unrestricted Subsidiary" means any Subsidiary that is
designated by the Board of Directors of the Company as an Unrestricted
Subsidiary pursuant to a resolution of the Board of Directors of the Company,
but only to the extent that such Subsidiary (a) has no Indebtedness other than
Non-Recourse Debt, (b) is not party to any agreement, contract, arrangement or
understanding with the Company or any Restricted Subsidiary of the Company
unless such agreement, contract, arrangement or understanding does not violate
the terms of Section 4.11 hereof, (c) is a Person with respect to which neither
the Company nor any of its Restricted Subsidiaries has any direct or indirect
obligation (i) to subscribe for additional Equity Interests or (ii) to maintain
or preserve such Person's financial condition or to cause such Person to achieve
any specified levels of operating results, in each case, except to the extent
otherwise permitted by the Indenture. Any such designation by the Board of
Directors of the Company shall be evidenced to the Trustee by filing with the
Trustee a certified copy of the resolution giving effect to such designation and
an officers' certificate certifying that such designation complied with the
foregoing conditions and was permitted under Section 4.07 hereof. If, at any
time, any Unrestricted Subsidiary would fail to meet the foregoing requirements
as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted
Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary
shall be deemed to be incurred by a Restricted Subsidiary of the Company as of
such date (and, if such Indebtedness is not permitted to be incurred as of such
date under Section 4.09 hereof, the Company shall be in default of such
covenant). The Board of Directors of the Company may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided, however, that
such designation shall be deemed to be an incurrence of Indebtedness by a
Restricted Subsidiary of the Company of any outstanding Indebtedness of such
Unrestricted Subsidiary and such designation shall only be permitted if (A) such
Indebtedness is permitted under the covenant described under Section 4.09
hereof, calculated on a pro forma basis as if such designation had occurred at
the beginning of the four-quarter reference period, and (B) no Default or Event
of Default would be in existence following such designation.
"U.S. Government Obligations" means direct, fixed-rate
obligations (or certificates representing an ownership interest in such
obligations) of the United States of America (including any agency or
instrumentality thereof) for the payment of which the full faith and credit of
the United States of America is pledged, which are not callable and which mature
(or may be put to the issuer by the Holder at no less than par) no later than
the maturity date of the Notes.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the sum
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (b) the then outstanding principal
amount of such Indebtedness.
"Wheeling-Nisshin" means Wheeling-Nisshin, Inc., a Delaware
corporation.
"Wholly Owned Restricted Subsidiary" of any Person means a
Restricted Subsidiary of such Person all of the outstanding Capital Stock or
other ownership interests of
<PAGE>
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Restricted Subsidiaries of such
Person.
"WPSC" means Wheeling-Pittsburgh Steel Corporation, a Delaware
corporation.
"WHX" means WHX Corporation, a Delaware corporation.
"WHX Agreements" mean (i) the Intercreditor, Indemnification
and Subordination Agreement by and among the Company, WHX, WPSC and Unimast and
(ii) the Tax Sharing Agreement, in each case as in effect on the date of this
Indenture.
Section 1.02. Other Definitions.
Defined in
Term Section
"40-day Restricted Period"........................... 2.01
"Affiliate Transaction".............................. 4.11
"Asset Sale Offer"................................... 3.09
"Change of Control Offer"............................ 4.15
"Change of Control Payment".......................... 4.15
"Change of Control Payment Date"..................... 4.15
"Covenant Defeasance"................................ 8.03
"DTC"................................................ 2.03
"Event of Default"................................... 6.01
"Excess Proceeds".................................... 4.10
"incur".............................................. 4.09
"Legal Defeasance" .................................. 8.02
"Offer Amount"....................................... 3.09
"Offer Period"....................................... 3.09
"Paying Agent"....................................... 2.03
"Payment Default".................................... 6.01
"Purchase Date"...................................... 3.09
"Registrar".......................................... 2.03
"Restricted Payments"................................ 4.07
Section 1.03. Incorporation by Reference of Trust Indenture
Act.
Whenever this Indenture refers to a provision of the TIA, the
provision is as and to the extent required incorporated by reference in and made
a part of this Indenture. Any terms incorporated in this Indenture that are
defined by the TIA, defined by TIA reference to another statute or defined by
SEC rule under the TIA have the meanings so assigned to them.
Section 1.04. Rules of Construction.
Unless the context otherwise requires:
<PAGE>
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the
plural include the singular;
(5) provisions apply to successive events and transactions;
and
(6) references to sections of or rules under the Securities
Act shall be deemed to include substitute, replacement of successor
sections or rules adopted by the SEC from time to time.
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating.
The Notes and the Trustee's certificate of authentication
shall be substantially in the form of Exhibit A-1 or Exhibit A-2 hereto. The
Notes may have notations, legends or endorsements required by law, stock
exchange rule or usage. Each Note shall be dated the date of its authentication.
The Notes shall be issued in denominations of $1,000 and integral multiples
thereof.
The terms and provisions contained in the Notes shall
constitute, and are hereby expressly made, a part of this Indenture and the
Company, the Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.
(a) Global Notes. Notes offered and sold in connection with
the Offering by the Initial Purchasers to QIBs in reliance on Rule 144A
otherwise than in reliance on Regulation S, shall be issued initially in the
form of 144A Global Notes, which shall be deposited on behalf of the purchasers
of the Notes represented thereby with the Trustee, as custodian of the
Depository, and registered in the name of the Depository or a nominee of the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of the 144A Global Notes
may from time to time be increased or decreased by adjustments made on the
records of the Trustee and the Depository or its nominee as hereinafter
provided.
Notes offered and sold in connection with the Offering by the
Initial Purchaser in reliance on Regulation S, if any, shall be issued initially
in the form of the Regulation S Temporary Global Note, which shall be deposited
on behalf of the purchasers of the Notes represented thereby with the Trustee,
as custodian for the Depository, and registered in the name of the Depository or
the nominee of the Depository for the accounts of designated agents
<PAGE>
holding on behalf of Euroclear or Cedel, duly executed by the Company and
authenticated by the Trustee as hereinafter provided. Until termination of the
"40-day restricted period" (as defined in Regulation S) ownership of beneficial
interests in the Regulation S Temporary Global Note will be limited to Persons
that have accounts with Euroclear or Cedel or Persons who hold interests through
Euroclear or Cedel, and any resale or transfer of such interests to U.S. Persons
(within the meaning of Regulation S) shall not be permitted during the 40-day
restricted period unless such resale or transfer is made pursuant to Rule 144A
or Regulation S. The 40- day restricted period shall be terminated upon the
receipt by the Trustee of (i) a written certificate from the Depository,
together with copies of certificates from Euroclear and Cedel certifying that
they have received certification of non-United States beneficial ownership of
100% of the aggregate principal amount of the Regulation S Temporary Global Note
(except to the extent of any beneficial owners thereof who acquired an interest
therein pursuant to another exemption from registration under the Securities Act
and who will take delivery of a beneficial ownership interest in a 144A Global
Note, all as contemplated by Section 2.06(a)(ii) hereof), and (ii) an Officer's
Certificate from the Company. Within a reasonable period of time following the
expiration of the 40-day restricted period, beneficial interests in the
Regulation S Temporary Global Note shall be exchanged for beneficial interests
in the Regulation S Permanent Global Note upon delivery to DTC of certification
of compliance with the transfer restrictions applicable to the Notes and
pursuant to Regulation S under the Securities Act as hereinafter provided.
Following the termination of the 40-day restricted period, beneficial interests
in the Regulation S Permanent Global Note may also be held through organizations
other than Cedel or Euroclear that are Participants. The aggregate principal
amount of the Regulation S Temporary Global Note and the Regulation S Permanent
Global Notes may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depository or its nominee, as the case may
be, in connection with transfers of interest as hereinafter provided.
Each Global Note shall represent such of the outstanding Notes
as shall be specified therein and each shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be reduced or increased, as appropriate, to reflect exchanges,
redemptions and transfers of interests. Any endorsement of a Global Note to
reflect the amount of any increase or decrease in the amount of outstanding
Notes represented thereby shall be made by the Trustee or the Note Custodian, at
the direction of the Trustee, in accordance with instructions given by the
Holder thereof as required by Section 2.06 hereof.
The provisions of the "Operating Procedures of the Euroclear
System" and "Terms and Conditions Governing Use of Euroclear" and the
"Management Regulations" and "Instructions to Participants" of Cedel shall be
applicable to interests in the Regulation S Global Note, if any, that are held
by Participants through Euroclear or Cedel. Neither the Company nor the Trustee
shall have any obligation to notify Holders of any such procedures or to monitor
or enforce compliance with the same.
Except as set forth in Section 2.06 hereof, the Global Notes
may be transferred, in whole and not in part, only to another nominee of the
Depository or to a successor of the Depository or its nominee.
<PAGE>
(b) Book-Entry Provisions. This Section 2.01(b) shall apply
only to 144A Global Notes and Regulation S Global Notes deposited with or on
behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance
with this Section 2.01(b), authenticate and deliver the Global Notes that (i)
shall be registered in the name of the Depository or the nominee of the
Depository and (ii) shall be delivered by the Trustee to the Depository or
pursuant to the Depository's instructions or held by the Trustee as custodian
for the Depository.
Participants shall have no rights either under this Indenture
with respect to any Global Note held on their behalf by the Depository or by the
Note Custodian as custodian for the Depository or under such Global Note, and
the Depository may be treated by the Company, the Trustee and any Agent of the
Company or the Trustee as the absolute owner of such Global Note for all
purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent
the Company, the Trustee or any Agent of the Company or the Trustee from giving
effect to any written certification, proxy or other authorization furnished by
the Depository or impair, as between the Depository and its Participants, the
operation of customary practices of such Depository governing the exercise of
the rights of an owner of a beneficial interest in any Global Note.
(c) Definitive Notes. Notes issued in certificated form shall
be substantially in the form of Exhibit A-1 attached hereto (but without
including the text referred to in footnotes 1 and 3 thereto).
Section 2.02. Execution and Authentication.
Two Officers shall sign the Notes for the Company by either
manual or facsimile signature. The Company's seal shall be reproduced,
impressed, affixed or imprinted on the Notes and may be in facsimile form.
If an Officer whose signature is on a Note no longer holds
that office at the time a Note is authenticated or at any time thereafter, the
Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual
signature of the Trustee. Such signature shall be conclusive evidence that the
Note has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Notes shall be substantially as
set forth in Exhibit A-1 or Exhibit A-2 hereto.
The Trustee shall, upon a written order of the Company signed
by two Officers, authenticate Notes for original issue up to the aggregate
principal amount stated in paragraph 4 of the Notes. The aggregate principal
amount of Notes outstanding at any time may not exceed such amount except as
provided in Section 2.07 hereof.
The Trustee may appoint an authenticating agent acceptable to
the Company to authenticate Notes. An authenticating agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the Company,
any Guarantor or an Affiliate of the Company.
<PAGE>
Section 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Notes may
be presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Notes may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Notes and of their transfer and exchange.
The Company may appoint one or more co-registrars and one or more additional
paying agents. The term "Registrar" includes any co-registrar and the term
"Paying Agent" includes any additional paying agent. The Company may change any
Paying Agent or Registrar without notice to any Holder. The Company shall notify
the Trustee in writing of the name and address of any Agent not a party to this
Indenture. If the Company fails to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such. The Company shall
enter into an appropriate agency agreement with any Agent not a party to this
Indenture, and such agreement shall incorporate the TIA's provisions of this
Indenture that relate to such Agent. The Company or any of its Restricted
Subsidiaries may act as Paying Agent or Registrar.
The Company initially appoints The Depository Trust Company
("DTC") to act as Depository with respect to the Global Notes.
The Company initially appoints the Trustee to act as the
Registrar and Paying Agent and to act as Note Custodian with respect to the
Global Notes.
Section 2.04. Paying Agent to Hold Money in Trust.
Each Paying Agent other than the Trustee shall agree in
writing that the Paying Agent will hold in trust for the benefit of Holders or
the Trustee all money held by the Paying Agent for the payment of principal of
or premium, interest or Liquidated Damages, if any, on the Notes, and will
notify the Trustee of any default by the Company (or any other obligor of the
Notes) in making any such payment. While any such default continues, the Trustee
may require a Paying Agent to pay all money held by it to the Trustee. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than
the Company or a Subsidiary) shall have no further liability for the money. If
the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in
a separate trust fund for the benefit of the Holders all money held by it as
Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the
Company, the Trustee shall serve as Paying Agent for the Notes.
Section 2.05. Holder Lists.
The Trustee shall preserve in as current a form as is
reasonably practicable the most recent list available to it of the names and
addresses of all Holders and shall otherwise comply with TIA Section 312(a). If
the Trustee is not the Registrar, the Company shall furnish to the Trustee at
least five Business Days before each interest payment date and at such other
times as the Trustee may request in writing, a list in such form and as of such
date as the Trustee may reasonably require of the names and addresses of the
Holders of Notes and the Company shall otherwise comply with TIA Section 312(a).
<PAGE>
Section 2.06. Transfer and Exchange.
(a) Transfer and Exchange of Global Notes. The transfer and
exchange of Global Notes or beneficial interests therein shall be effected
through the Depository, in accordance with this Indenture and the procedures of
the Depository therefor, which shall include restrictions on transfer comparable
to those set forth herein to the extent required by the Securities Act.
Beneficial interests in a Global Note may be transferred to Persons who take
delivery thereof in the form of a beneficial interest in the same Global Note in
accordance with the transfer restrictions set forth in the legend in subsection
(f) of this Section 2.06. Only Persons who acquire Notes in transfers made
pursuant to Rule 144A, Rule 144 under the Act or pursuant to an effective
registration statement under the Securities Act and in accordance with any
applicable securities laws of any state of the United States or any other
applicable jurisdiction are permitted to take delivery in the form of a
beneficial interest in a Rule 144A Global Note. Only Persons who acquire Notes
in transfers made pursuant to Regulation S are permitted to take delivery in the
form of a beneficial interest in a Regulation S Global Note. Persons who acquire
Notes pursuant to an exemption under the Securities Act other than Rule 144A,
Rule 144 or Regulation S are required to take delivery in the form of Definitive
Notes in accordance with the procedures set forth in Section 2.06(c) hereof and
are not permitted to take delivery in the form of a beneficial interest in a
Global Note. Transfers of beneficial interests in the Global Notes to Persons
required to take delivery thereof in the form of an interest in another Global
Note shall be permitted as follows:
(i) 144A Global Note to Regulation S Global Note. If,
at any time, an owner of a beneficial interest in a 144A Global Note
deposited with the Depository (or the Trustee as custodian for the
Depository) wishes to transfer its beneficial interest in such 144A
Global Note to a Person who is required or permitted to take delivery
thereof in the form of an interest in a Regulation S Global Note, such
owner shall, subject to the Applicable Procedures, exchange or cause
the exchange of such interest for an equivalent beneficial interest in
a Regulation S Global Note as provided in this Section 2.06(a)(i). Upon
receipt by the Trustee of (A) instructions given in accordance with the
Applicable Procedures from a Participant directing the Trustee to
credit or cause to be credited a beneficial interest in the Regulation
S Global Note in an amount equal to the beneficial interest in the 144A
Global Note to be exchanged, (B) a written order given in accordance
with the Applicable Procedures containing information regarding the
Participant account of the Depository and the Euroclear, Cedel or other
Participant account to be credited with such increase, and (C) a
certificate in the form of Exhibit B-1 hereto given by the owner of
such beneficial interest stating that the transfer of such interest has
been made in compliance with the transfer restrictions applicable to
the Global Notes and pursuant to and in accordance with Rule 903 or
Rule 904 of Regulation S, then the Trustee, as Registrar, shall
instruct the Depository to reduce or cause to be reduced the aggregate
principal amount of the applicable 144A Global Note and to increase or
cause to be increased the aggregate principal amount of the applicable
Regulation S Global Note by the principal amount of the beneficial
interest in the 144A Global Note to be exchanged or transferred, to
credit or cause to be credited to the account of the Person specified
in such instructions, a beneficial interest in the Regulation S Global
Note equal to the reduction in the aggregate principal amount at
maturity of the 144A Global Note, and to debit, or cause
<PAGE>
to be debited, from the account of the Person making such exchange or
transfer of the beneficial interest in the 144A Global Note that is
being exchanged or transferred.
(ii) Regulation S Global Note to 144A Global Note.
If, at any time, an owner of a beneficial interest in a Regulation S
Global Note deposited with the Depository or with the Trustee as
custodian for the Depository wishes to transfer its beneficial interest
in such Regulation S Global Note to a Person who is required or
permitted to take delivery thereof in the form of an interest in a 144A
Global Note, such owner shall, subject to the Applicable Procedures,
exchange or cause the exchange of such interest for an equivalent
beneficial interest in a 144A Global Note as provided in this Section
2.06(a)(ii). Upon receipt by the Trustee of (A) instructions from
Euroclear, Cedel or another participant, if applicable, and the
Depository, directing the Trustee, as Registrar, to credit or cause to
be credited a beneficial interest in the 144A Global Note equal to the
beneficial interest in the Regulation S Global Note to be exchanged,
such instructions to contain information regarding the Participant
account with the Depository to be credited with such increase, (B) a
written order given in accordance with the Applicable Procedures
containing information regarding the Participant account of the
Depository and (C) a certificate in the form of Exhibit B-2 attached
hereto given by the owner of such beneficial interest stating (1) if
the transfer is pursuant to Rule 144A, that the Person transferring
such interest in a Regulation S Global Note reasonably believes that
the Person acquiring such interest in a 144A Global Note is a QIB and
is obtaining such beneficial interest in a transaction meeting the
requirements of Rule 144A, (2) that the transfer complies with the
requirements of Rule 144 under the Securities Act, or (3) that the
transfer is being effected pursuant to an effective registration
statement under the Securities Act and in each case of clause (1), (2)
or (3) above, in accordance with any applicable securities laws of any
state of the United States or any other applicable jurisdiction, then
the Trustee, as Registrar, shall instruct the Depository to reduce or
cause to be reduced the aggregate principal amount at maturity of such
Regulation S Global Note and to increase or cause to be increased the
aggregate principal amount at maturity of the applicable 144A Global
Note by the principal amount at maturity of the beneficial interest in
the Regulation S Global Note to be exchanged or transferred, and the
Trustee, as Registrar, shall instruct the Depository, concurrently with
such reduction, to credit or cause to be credited to the account of the
Person specified in such instructions a beneficial interest in the
applicable 144A Global Note equal to the reduction in the aggregate
principal amount at maturity of such Regulation S Global Note and to
debit or cause to be debited from the account of the Person making such
transfer the beneficial interest in the Regulation S Global Note that
is being exchanged or transferred.
(b) Transfer and Exchange of Definitive Notes. When Definitive
Notes are presented by a Holder to the Registrar with a request to register the
transfer of the Definitive Notes or to exchange such Definitive Notes for an
equal principal amount of Definitive Notes of other authorized denominations,
the Registrar shall register the transfer or make the exchange as requested only
if the Definitive Notes are presented or surrendered for registration of
transfer or exchange, are endorsed or accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by such Holder or
by his attorney and contains a signature guarantee, duly authorized in writing
and the Registrar received the following documentation (all of which may be
submitted by facsimile):
<PAGE>
(i) in the case of Definitive Notes that are Transfer
Restricted Securities, such request shall be accompanied by the
following additional information and documents, as applicable:
(A) if such Transfer Restricted Security is
being delivered to the Registrar by a Holder for registration
in the name of such Holder, without transfer, or such Transfer
Restricted Security is being transferred to the Company or any
of its Subsidiaries, a certification to that effect from such
Holder (in substantially the form of Exhibit B-3 hereto);
(B) if such Transfer Restricted Security is
being transferred to a QIB in accordance with Rule 144A under
the Securities Act or pursuant to an exemption from
registration in accordance with Rule 144 under the Securities
Act or pursuant to an effective registration statement under
the Securities Act, a certification to that effect from such
Holder (in substantially the form of Exhibit B-3 hereto);
(C) if such Transfer Restricted Security is
being transferred to a Non-U.S. Person in an offshore
transaction in accordance with Rule 904 under the Securities
Act, a certification to that effect from such Holder (in
substantially the form of Exhibit B-3 hereto);
(D) if such Transfer Restricted Security is
being transferred to an Institutional Accredited Investor in
reliance on an exemption from the registration requirements of
the Securities Act other than those listed in subparagraphs
(B) or (C) above, a certification to that effect from such
Holder (in substantially the form of Exhibit B-3 hereto), a
certification substantially in the form of Exhibit C hereto
from the transferee, and, if such transfer is in respect of an
aggregate principal amount of Notes of less than $100,000, an
Opinion of Counsel acceptable to the Company that such
transfer is in compliance with the Securities Act and any
applicable blue sky laws of any state of the United States; or
(E) if such Transfer Restricted Security is
being transferred in reliance on any other exemption from the
registration requirements of the Securities Act, a
certification to that effect from such Holder (in
substantially the form of Exhibit B-3 hereto) and an Opinion
of Counsel from such Holder or the transferee reasonably
acceptable to the Company and to the Registrar to the effect
that such transfer is in compliance with the Securities Act
and any applicable blue sky laws of any state of the United
States.
(c) Transfer of a Beneficial Interest in a 144A Global Note or
Regulation S Global Note for a Definitive Note.
(i) Any Person having a beneficial interest in a 144A
Global Note and, after the termination of the 40-day restricted period,
any Person having a beneficial interest in a Regulation S Permanent
Global Note may upon request, subject to the Applicable Procedures,
exchange such beneficial interest for a Definitive Note,
<PAGE>
upon receipt by the Trustee of written instructions or such other form
of instructions as is customary for the Depository (or Euroclear, Cedel
or another Participant, if applicable), from the Depository or its
nominee on behalf of any Person having a beneficial interest in a 144A
Global Note or Regulation S Permanent Global Note, and, in the case of
a Transfer Restricted Security, the following additional information
and documents (all of which may be submitted by facsimile):
(A) if such beneficial interest is being
transferred to the Person designated by the Depository as
being the beneficial owner or to the Company or any of its
Subsidiaries, a certification to that effect from such Person
(in substantially the form of Exhibit B-4 hereto);
(B) if such beneficial interest is being
transferred to a QIB in accordance with Rule 144A under the
Securities Act or pursuant to an exemption from registration
in accordance with Rule 144 under the Securities Act or
pursuant to an effective registration statement under the
Securities Act, a certification to that effect from the
transferor (in substantially the form of Exhibit B-4 hereto);
(C) if such beneficial interest is being
transferred to an Institutional Accredited Investor, pursuant
to a private placement exemption from the registration
requirements of the Securities Act (and based on an opinion of
counsel if the Company so requests) other than those listed in
subparagraph (B) above, a certification to that effect from
such Holder (in substantially the form of Exhibit B-4 hereto)
and a certification from the applicable transferee (in
substantially the form of Exhibit C hereto) and, if such
transfer is in respect of an aggregate principal amount of
Notes of less than $100,000, an Opinion of Counsel acceptable
to the Company that such transfer is in compliance with the
Securities Act and any applicable blue sky laws of any state
of the United States; or
(D) if such beneficial interest is being
transferred in reliance on any other exemption from the
registration requirements of the Securities Act, a
certification to that effect from the transferor (in
substantially the form of Exhibit B-4 hereto) and an Opinion
of Counsel from the transferee or the transferor reasonably
acceptable to the Company and to the Registrar to the effect
that such transfer is in compliance with the Securities Act
and any applicable blue sky laws of any state of the United
States,
in which case the Trustee or the Note Custodian, at the direction of
the Trustee, shall, in accordance with the standing instructions and
procedures existing between the Depository and the Note Custodian,
cause the aggregate principal amount of 144A Global Notes or Regulation
S Permanent Global Notes, as applicable, to be reduced accordingly and,
following such reduction, the Company shall execute and, the Trustee
shall authenticate and deliver to the transferee a Definitive Note in
the appropriate principal amount.
<PAGE>
(ii) Definitive Notes issued in exchange for a
beneficial interest in a 144A Global Note or Regulation S Global Note,
as applicable, pursuant to this Section 2.06(c) shall be registered in
such names and in such authorized denominations as the Depository,
pursuant to instructions from its Participants or Indirect Participants
or otherwise, shall instruct the Trustee. The Trustee shall deliver
such Definitive Notes to the Persons in whose names such Notes are so
registered.
(d) Restrictions on Transfer and Exchange of Global Notes.
Notwithstanding any other provision of this Indenture (other than the provisions
set forth in subsection (g) of this Section 2.06), a Global Note may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.
(e) Authentication of Definitive Notes in Absence of
Depository. If at any time:
(i) the Depository for the Notes notifies the Company
that the Depository is unwilling or unable to continue as Depository
for the Global Notes and a successor Depository for the Global Notes is
not appointed by the Company within 90 days after delivery of such
notice; or
(ii) the Company, at its sole discretion, notifies
the Trustee in writing that it elects to cause the issuance of
Definitive Notes under this Indenture,
then the Company shall execute, and the Trustee shall, upon receipt of an
authentication order in accordance with Section 2.02 hereof, authenticate and
deliver, Definitive Notes in an aggregate principal amount equal to the
principal amount of the Global Notes in exchange for such Global Notes.
(f) Legends.
(i) Except as permitted by the following paragraphs
(ii), (iii) and (iv), each Note certificate evidencing a Global Note
and a Definitive Note (and all Notes issued in exchange therefor or
substitution thereof) shall bear a legend in substantially the
following form:
"THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH
IN THE SECOND SENTENCE HEREOF. BY ITS ACQUISITION HEREOF OR OF
A BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT
(A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR (B) IT IS
ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH
<PAGE>
REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL
NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON WHOM THE
SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE TRANSACTION
MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE SECURITIES
ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144
UNDER THE SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES
ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE
COMPANY) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER
APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION" AND
"UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS
A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY
TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING."
(ii) Upon any sale or transfer of a Transfer
Restricted Security (including any Transfer Restricted Security
represented by a Global Note) pursuant to Rule 144 under the Securities
Act or pursuant to an effective registration statement under the
Securities Act:
(A) in the case of any Transfer Restricted
Security that is a Definitive Note, the Registrar shall permit
the Holder thereof to exchange such Transfer Restricted
Security for a Definitive Note that does not bear the legend
set forth in (i) above and rescind any restriction on the
transfer of such Transfer Restricted Security upon
certification from the transferring Holder substantially in
the form of Exhibit B-3 hereto; and
(B) in the case of any Transfer Restricted
Security represented by a Global Note, such Transfer
Restricted Security shall not be required to bear the legend
set forth in (i) above, but shall continue to be subject to
the provisions of Section 2.06(a) and (c) hereof; provided,
however, that with respect to any request for an exchange of a
Transfer Restricted Security that is represented by a Global
Note or a Definitive Note that does not bear the legend set
forth in (i) above, which request is made in reliance upon
Rule 144 or pursuant to an effective registration statement,
the Holder thereof shall certify in writing to the Registrar
that such request is being made pursuant
<PAGE>
to Rule 144 or pursuant to an effective registration statement
(such certification to be substantially in the form of Exhibit
B-4 hereto).
(iii) Upon any sale or transfer of a Transfer
Restricted Security (including any Transfer Restricted Security
represented by a Global Note) in reliance on any exemption from the
registration requirements of the Securities Act (other than exemptions
pursuant to Rule 144 under the Securities Act) in which the Holder or
the transferee provides an Opinion of Counsel to the Company and the
Registrar in form and substance reasonably acceptable to the Company
and the Registrar (which Opinion of Counsel shall also state that the
transfer restrictions contained in the legend are no longer
applicable):
(A) in the case of any Transfer Restricted
Security that is a Definitive Note, the Registrar shall permit
the Holder thereof to exchange such Transfer Restricted
Security for a Definitive Note that does not bear the legend
set forth in (i) above and rescind any restriction on the
transfer of such Transfer Restricted Security; and
(B) in the case of any Transfer Restricted
Security represented by a Global Note, such Transfer
Restricted Security shall not be required to bear the legend
set forth in (i) above, but shall continue to be subject to
the provisions of Section 2.06(a) and (c) hereof.
(iv) Notwithstanding the foregoing, upon consummation
of the Exchange Offer, the Company shall issue and, upon receipt of an
authentication order in accordance with Section 2.02 hereof, the
Trustee shall authenticate (A) one or more Unrestricted Global Notes in
aggregate principal amount equal to the principal amount of the
Restricted Beneficial Interests accepted for exchange in the Exchange
Offer and (B) Definitive Notes that do not bear the legend set forth in
this Section 2.06(f) in an aggregate principal amount equal to the
principal amount of the Restricted Definitive Notes accepted for
exchange in the Exchange Offer, in each case tendered for acceptance by
Persons that are not (1) broker-dealers, (2) Persons participating in
the distribution of the Series B Notes or (3) Persons who are
Affiliates of the Company. Concurrently with the issuance of such
Notes, the Trustee shall cause the aggregate principal amount of the
applicable Restricted Global Notes to be reduced accordingly and the
Company shall execute and the Trustee shall authenticate and deliver to
the Persons designated by the Holders of Definitive Notes so accepted
Definitive Notes in the appropriate principal amount.
(g) Cancellation and/or Adjustment of Global Notes. At such
time as all beneficial interests in Global Notes have been exchanged for
Definitive Notes, redeemed, repurchased or cancelled, all Global Notes shall be
returned to or retained and cancelled by the Trustee in accordance with Section
2.11 hereof. At any time prior to such cancellation, if any beneficial interest
in a Global Note is exchanged for Definitive Notes, redeemed, repurchased or
cancelled, the principal amount of Notes represented by such Global Note shall
be reduced accordingly and an endorsement shall be made on such Global Note, by
the Trustee or the Notes Custodian, at the direction of the Trustee, to reflect
such reduction.
<PAGE>
(h) General Provisions Relating to Transfers and Exchanges.
(i) To permit registrations of transfers and
exchanges, subject to this Section 2.06, the Company shall execute and,
upon the written order of the Company signed by two Officers of the
Company, the Trustee shall authenticate Definitive Notes and Global
Notes at the Registrar's request.
(ii) No service charge shall be made to a Holder for
any registration of transfer or exchange, but the Company may require
payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any
such transfer taxes or similar governmental charge payable upon
exchange or transfer pursuant to Sections 3.07, 4.10, 4.15 and 8.05
hereof).
(iii) The Registrar shall not be required to register
the transfer of or exchange any Note selected for redemption in whole
or in part, except the unredeemed portion of any Note being redeemed in
part.
(iv) All Definitive Notes and Global Notes issued
upon any registration of transfer or exchange of Definitive Notes or
Global Notes shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture,
as the Definitive Notes or Global Notes surrendered upon such
registration of transfer or exchange.
(v) The Company and the Registrar shall not be required:
(A) to issue, to register the transfer of or
to exchange Notes during a period beginning at the opening of
business 15 days before the day of any selection of Notes for
redemption under Section 3.02 hereof and ending at the close
of business on the day of selection;
(B) to register the transfer of or to
exchange any Note so selected for redemption in whole or in
part, except the unredeemed portion of any Note being redeemed
in part;
(C) to register the transfer of or to
exchange a Note between a record date and the next succeeding
interest payment date; or
(D) to register the transfer of a Note other
than in amounts of $1,000 or multiple integrals thereof.
(vi) Prior to due presentment for the registration of
a transfer of any Note, the Trustee, any Agent and the Company may deem
and treat the Person in whose name any Note is registered as the
absolute owner of such Note for the purpose of receiving payment of
principal of and interest on such Notes, and neither the Trustee, any
Agent nor the Company shall be affected by notice to the contrary.
(vii) The Trustee shall authenticate Definitive Notes
and Global Notes in accordance with the provisions of Section 2.02
hereof.
<PAGE>
Section 2.07. Replacement Notes.
If any mutilated Note is surrendered to the Trustee or the
Company, or the Trustee receives evidence to its satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee,
upon the written order of the Company signed by two Officers of the Company,
shall authenticate a replacement Note if the Trustee's requirements are met. If
required by the Trustee or the Company, an indemnity bond must be supplied by
the Holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any Agent and any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company may
charge for its and the Trustee's expenses in replacing a Note.
Every replacement Note is an additional obligation of the
Company and shall be entitled to all of the benefits of this Indenture equally
and proportionately with all other Notes duly issued hereunder.
Section 2.08. Outstanding Notes.
The Notes outstanding at any time are all the Notes
authenticated by the Trustee except for those cancelled by it, those delivered
to it for cancellation, those reductions in the interest in a Global Note
effected by the Trustee in accordance with the provisions hereof, and those
described in this Section as not outstanding. Except as set forth in Section
2.09 hereof, a Note does not cease to be outstanding because the Company or an
Affiliate of the Company holds the Note.
If a Note is replaced pursuant to Section 2.07 hereof, it
ceases to be outstanding unless the Trustee receives proof satisfactory to it
that the replaced Note is held by a bona fide purchaser.
If the entire principal of and interest, premium, if any, and
Liquidated Damages, if any, on any Note is considered paid under Section 4.01
hereof, it ceases to be outstanding and interest and Liquidated Damages, if any,
on it ceases to accrue.
If the Paying Agent (other than the Company, a Subsidiary of
the Company or an Affiliate) holds, on a redemption date or maturity date, money
sufficient to pay Notes payable on that date, then on and after that date such
Notes shall be deemed to be no longer outstanding and shall cease to accrue
interest and Liquidated Damages, if any.
Section 2.09. Treasury Notes.
In determining whether the Holders of the required principal
amount of Notes have concurred in any direction, waiver or consent, Notes owned
by the Company, a Subsidiary of the Company or an Affiliate, shall be considered
as though not outstanding, except that for the purposes of determining whether
the Trustee shall be protected in relying on any such direction, waiver or
consent, only Notes that a Trustee knows are so owned shall be so disregarded.
Notwithstanding the foregoing, Notes that the Company, a Subsidiary of the
Company or an Affiliate offers to purchase or acquires pursuant to an offer,
exchange offer, tender offer or otherwise shall not be deemed to be owned by the
Company, a Subsidiary of the
<PAGE>
Company or an Affiliate until legal title to such Notes passes to the Company,
such Subsidiary or such Affiliate as the case may be.
Section 2.10. Temporary Notes.
Until definitive Notes are ready for delivery, the Company may
prepare and the Trustee shall authenticate temporary Notes upon a written order
of the Company signed by two Officers of the Company. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Company considers appropriate for temporary Notes and as shall be reasonably
acceptable to the Trustee. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate definitive Notes in exchange for temporary
Notes. Until such exchange, Holders of temporary Notes shall be entitled to all
of the benefits of this Indenture.
Section 2.11. Cancellation.
The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment. The
Trustee and no one else shall cancel all Notes surrendered for registration of
transfer, exchange, payment, replacement or cancellation and, at the request of
the Company, shall destroy cancelled Notes (subject to the record retention
requirement of the Exchange Act). Certification of the destruction of all
cancelled Notes shall be delivered to the Company. The Company may not issue new
Notes to replace Notes that it has paid or redeemed or that have been delivered
to the Trustee for cancellation, other than as contemplated by the Exchange
Offer.
Section 2.12. Defaulted Interest.
If the Company defaults in a payment of interest on the Notes,
it shall pay the defaulted interest in any lawful manner plus, to the extent
lawful, interest payable on the defaulted interest, to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in
writing of the amount of defaulted interest proposed to be paid on each Note and
the date of the proposed payment. The Company shall fix or cause to be fixed
each such special record date and payment date, provided that no such special
record date shall be less than 10 days prior to the related payment date for
such defaulted interest. At least 15 days before the special record date, the
Company (or, upon the written request of the Company, the Trustee in the name
and at the expense of the Company) shall mail or cause to be mailed to Holders a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
<PAGE>
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.
If the Company elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 30 days but not more than 60 days before a redemption date, an
Officer's Certificate setting forth (i) the clause of this Indenture pursuant to
which the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Notes to be redeemed and (iv) the redemption price.
Section 3.02. Selection of Notes to Be Redeemed.
If less than all of the Notes are to be redeemed at any time,
the Trustee shall select the Notes to be redeemed among the Holders of the Notes
in compliance with the requirements of the principal national securities
exchange, if any, on which the Notes are listed or, if the Notes are not so
listed, on a pro rata basis, by lot or in accordance with any other method the
Trustee considers fair and appropriate. In the event of partial redemption by
lot, the particular Notes to be redeemed shall be selected, unless otherwise
provided herein, not less than 30 days nor more than 60 days prior to the
redemption date by the Trustee from the outstanding Notes not previously called
for redemption.
The Trustee shall promptly notify the Company in writing of
the Notes selected for redemption and, in the case of any Note selected for
partial redemption, the principal amount thereof to be redeemed. Notes and
portions of Notes selected shall be in amounts of $1,000 or whole multiples of
$1,000. Provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.
Section 3.03. Notice of Redemption.
Subject to the provisions of Section 3.09 hereof, at least 30
days but not more than 60 days before a redemption date, the Company shall mail
or cause to be mailed, by first class mail, a notice of redemption to each
Holder whose Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall
state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the
redemption date upon surrender of such Note, a new Note or Notes in a
principal amount equal to the unredeemed portion shall be issued upon
cancellation of the original Note;
(d) the name and address of the Paying Agent;
<PAGE>
(e) that Notes called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(f) that, unless the Company defaults in making such
redemption payment, interest on Notes called for redemption ceases to
accrue on and after the redemption date;
(g) the paragraph of the Notes and/or Section of this
Indenture pursuant to which the Notes called for redemption are being
redeemed; and
(h) that no representation is made as to the correctness or
accuracy of the CUSIP number, if any, listed in such notice or printed
on the Notes.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense; provided, however, that the
Company shall have delivered to the Trustee, at least 45 days prior to the
redemption date, an Officer's Certificate requesting that the Trustee give such
notice and setting forth the information to be stated in such notice as provided
in the preceding paragraph (unless a shorter notice shall have been agreed to by
the Trustee in writing).
Section 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed in accordance with Section
3.03 hereof, Notes called for redemption become irrevocably due and payable on
the redemption date at the redemption price. A notice of redemption may not be
conditional.
Section 3.05. Deposit of Redemption Price.
One Business Day prior to the redemption date, the Company
shall deposit with the Paying Agent money sufficient to pay the redemption price
of and accrued interest and Liquidated Damages, if any, on all Notes to be
redeemed on that date. The Paying Agent shall promptly return to the Company any
money deposited with the Paying Agent by the Company in excess of the amounts
necessary to pay the redemption price of and accrued interest and Liquidated
Damages, if any, on all Notes to be redeemed.
If the Company complies with the provisions of the preceding
paragraph, on and after the redemption date, interest and Liquidated Damages, if
any, shall cease to accrue on the Notes or the portions of Notes called for
redemption. If a Note is redeemed on or after an interest record date but on or
prior to the related interest payment date, then any accrued and unpaid interest
and Liquidated Damages, if any, shall be paid to the Person in whose name such
Note was registered at the close of business on such record date. If any Note
called for redemption shall not be so paid upon surrender for redemption because
of the failure of the Company to comply with the preceding paragraph, interest
shall be paid on the unpaid principal, from the redemption date until such
principal is paid, and to the extent lawful on any interest and Liquidated
Damages, if any, not paid on such unpaid principal, in each case at the rate
provided in the Notes and in Section 4.01 hereof.
<PAGE>
Section 3.06. Notes Redeemed in Part.
Upon surrender of a Note that is redeemed in part, the Company
shall issue and, upon the written order of the Company signed by two Officers of
the Company, the Trustee shall authenticate for the Holder at the expense of the
Company a new Note equal in principal amount to the unredeemed portion of the
Note surrendered.
Section 3.07. Optional Redemption.
(a) Except as set forth in clauses (b) and (c) of this Section
3.07, the Company shall not have the option to redeem the Notes pursuant to this
Section 3.07 prior to November 15, 2002. Thereafter, the Company shall have the
option to redeem the Notes, in whole or in part, at the redemption prices
(expressed as percentages of principal amount) set forth below plus accrued and
unpaid interest and Liquidated Damages, if any, thereon, to the applicable
redemption date, if redeemed during the twelve-month period beginning on
November 15 of the years indicated below:
Year Percentage
---- ----------
2002............................................ 104.625%
2003 ........................................... 103.083%
2004............................................ 101.542%
2005 and thereafter............................. 100.000%
(b) Notwithstanding the provisions of clause (a) of this
Section 3.07, at any time prior to November 15, 2000, the Company may redeem up
to 35% of the aggregate principal amount of Notes originally issued at a
redemption price of 109.25% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the redemption date,
with the net cash proceeds of one or more Public Equity Offerings; provided,
however, that (i) at least 65% of the aggregate principal amount of Notes
initially issued remains outstanding immediately after the occurrence of each
such redemption and (ii) such redemption occurs no later than 30 days following
the date of the consummation of such Public Equity Offering.
(c) Notwithstanding the provisions of clause (a) of this
Section 3.07, at any time prior to November 15, 2002, the Notes may also be
redeemed as a whole but not in part at the option of the Company at a redemption
price equal to 100% of the principal amount thereof plus the Applicable Premium,
accrued interest and Liquidated Damages, if any, thereon to the redemption date.
(d) Any redemption pursuant to this Section 3.07 shall be made
pursuant to the provisions of Section 3.01 through Section 3.06 hereof.
Section 3.08. Mandatory Redemption.
Except as set forth under Sections 4.10 and 4.15 hereof, the
Company shall not be required to make mandatory redemption payments with respect
to the Notes.
<PAGE>
Section 3.09. Offer to Purchase by Application of Excess
Proceeds.
In the event that, pursuant to Section 4.10 hereof, the
Company shall be required to commence an offer to all Holders to purchase Notes
(an "Asset Sale Offer"), it shall follow the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20
Business Days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the "Offer Period"). No
later than five Business Days after the termination of the Offer Period (the
"Purchase Date"), the Company shall purchase the principal amount of Notes
required to be purchased pursuant to Section 4.10 hereof (the "Offer Amount")
or, if less than the Offer Amount has been tendered, all Notes validly tendered
in response to the Asset Sale Offer. Payment for any Notes so purchased shall be
made in the same manner as interest payments are made.
If the Purchase Date is on or after an interest record date
and on or before the related interest payment date, any accrued and unpaid
interest and Liquidated Damages, if any, shall be paid to the Person in whose
name a Note is registered at the close of business on such record date, and no
additional interest or Liquidated Damages, if any, shall be payable to Holders
who tender Notes pursuant to the Asset Sale Offer.
Upon the commencement of an Asset Sale Offer, the Company
shall send, by first class mail, a notice to the Trustee and each of the
Holders, with a copy to the Trustee. The notice shall contain all instructions
and materials necessary to enable such Holders to tender Notes pursuant to the
Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice,
which shall govern the terms of the Asset Sale Offer, shall state:
(a) that the Asset Sale Offer is being made pursuant to this
Section 3.09 and Section 4.10 hereof and the length of time the Asset
Sale Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase
Date;
(c) that any Note not tendered or accepted for payment shall
continue to accrue interest;
(d) that, unless the Company defaults in making such payment,
any Note accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest and Liquidated Damages after the Purchase
Date;
(e) that Holders electing to have a Note purchased pursuant to
an Asset Sale Offer may only elect to have all of such Note purchased
and may not elect to have only a portion of such Note purchased;
(f) that Holders electing to have a Note purchased pursuant to
any Asset Sale Offer shall be required to surrender the Note, with the
form entitled "Option of Holder to Elect Purchase" on the reverse of
the Note completed, or transfer by book-entry transfer, to the Company,
a depositary, if appointed by the Company, or a Paying Agent at the
address specified in the notice at least three days before the Purchase
Date;
<PAGE>
(g) that Holders shall be entitled to withdraw their election
if the Company, the depositary or the Paying Agent, as the case may be,
receives, not later than the expiration of the Offer Period, a
telegram, telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount of the Note the Holder
delivered for purchase and a statement that such Holder is withdrawing
his election to have such Note purchased;
(h) that, if the aggregate principal amount of Notes
surrendered by Holders exceeds the Offer Amount, the Trustee shall
select the Notes to be purchased on a pro rata basis (with such
adjustments as may be deemed appropriate by the Trustee so that only
Notes in denominations of $1,000, or integral multiples thereof, shall
be purchased); and
(i) that Holders whose Notes were purchased only in part shall
be issued new Notes equal in principal amount to the unpurchased
portion of the Notes surrendered (or transferred by book-entry
transfer).
On or before the Purchase Date, the Company shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent necessary,
the Offer Amount of Notes or portions thereof tendered pursuant to the Asset
Sale Offer, or if less than the Offer Amount has been tendered, all Notes
tendered, and shall deliver to the Trustee an Officer's Certificate stating that
such Notes or portions thereof were accepted for payment by the Company in
accordance with the terms of this Section 3.09. The Company, the Depository or
the Paying Agent, as the case may be, shall promptly (but in any case not later
than five days after the Purchase Date) mail or deliver to each tendering Holder
an amount equal to the purchase price of the Notes tendered by such Holder and
accepted by the Company for purchase, and the Company shall promptly issue a new
Note, and the Trustee, upon the written order of the Company signed by two
Officers of the Company, shall authenticate and mail or deliver such new Note to
such Holder, in a principal amount equal to any unpurchased portion of the Note
surrendered. Any Note not so accepted shall be promptly mailed or delivered by
the Company to the Holder thereof. The Company shall publicly announce the
results of the Asset Sale Offer on the Purchase Date.
Other than as specifically provided in this Section 3.09, any
purchase pursuant to this Section 3.09 shall be made pursuant to the provisions
of Section 3.01 through Section 3.06 hereof.
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes.
The Company shall pay or cause to be paid the principal of and
premium, interest and Liquidated Damages, if any, on the Notes on the dates and
in the manner provided in the Notes. Principal, interest, premium, if any, and
Liquidated Damages, if any, shall be considered paid on the date due if the
Paying Agent, if other than the Company or a Subsidiary thereof, holds as of
10:00 a.m. New York time on the due date money deposited by the
<PAGE>
Company in immediately available funds and designated for and sufficient to pay
all principal, premium, interest and Liquidated Damages, if any, then due.
The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal at the
rate equal to the interest rate on the Notes to the extent lawful; it shall pay
interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest and Liquidated Damages, if
any (without regard to any applicable grace period), at the same rate to the
extent lawful.
Section 4.02. Maintenance of Office or Agency.
The Company shall maintain an office or agency (which may be
an office of the Trustee or an affiliate of the Trustee, Registrar or
co-registrar) where Notes may be surrendered for registration of transfer or for
exchange and where notices and demands to or upon the Company in respect of the
Notes and this Indenture may be served. The Company shall give prompt written
notice to the Trustee of the location, and any change in the location, of such
office or agency. If at any time the Company shall fail to maintain any such
required office or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may be made or
served at the Corporate Trust Office of the Trustee.
The Company may also from time to time designate one or more
other offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency for such
purposes. The Company shall give prompt written notice to the Trustee of any
such designation or rescission and of any change in the location of any such
other office or agency.
The Company hereby initially designates the Corporate Trust
Office of the Trustee as one such office or agency of the Company in accordance
with Section 2.03.
Section 4.03. Reports.
(a) Whether or not the Company is required to do so by the
rules and regulations of the SEC, the Company will file with the SEC (unless the
SEC will not accept such a filing) and, within 15 days of filing, or attempting
to file, the same with the SEC, furnish to the Holders of the Notes (i) all
quarterly and annual financial and other information with respect to the Company
and its Subsidiaries that would be required to be contained in a filing with the
SEC on Forms 10-Q and 10-K if the Company were required to file such forms,
including a "Management's Discussion and Analysis of Financial Condition and
Results of Operations" and, with respect to the annual information only, a
report thereon by the Company's certified independent accountants, and (ii) all
current reports that would be required to be filed with the SEC on Form 8-K if
the Company were required to file such reports. The Company shall at all times
comply with TIA Section 314(a).
<PAGE>
(b) The Company and the Guarantors shall furnish to the
Holders of the Notes, prospective purchasers of the Notes and securities
analysts, upon their request, the information, if any, required to be delivered
pursuant to Rule 144A(d)(4) under the Securities Act.
Section 4.04. Compliance Certificate.
(a) The Company shall deliver to the Trustee, within 90 days
after the end of each fiscal year, an Officer's Certificate stating that a
review of the activities of the Company and its Subsidiaries during the
preceding fiscal year has been made under the supervision of the signing
Officers with a view to determining whether the Company has kept, observed,
performed and fulfilled its obligations under this Indenture, and further
stating, as to each such Officer signing such certificate, that to the best of
his or her knowledge the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default shall have occurred, describing
all such Defaults or Events of Default of which he or she may have knowledge and
what action the Company is taking or proposes to take with respect thereto) and
that to the best of his or her knowledge no event has occurred and remains in
existence by reason of which payments on account of the principal of or
interest, if any, on the Notes is prohibited or if such event has occurred, a
description of the event and what action the Company is taking or proposes to
take with respect thereto.
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified Public Accountants, the
year-end financial statements delivered pursuant to Section 4.03(a) above shall
be accompanied by a written statement of the Company's independent public
accountants (who shall be a firm of established national reputation) that in
making the examination necessary for certification of such financial statements,
nothing has come to their attention that would lead them to believe that the
Company has violated any provisions of Article 4 or Article 5 hereof or, if any
such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge of any such
violation.
(c) The Company shall, so long as any of the Notes are
outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware
of any Default or Event of Default, an Officer's Certificate specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
Section 4.05. Taxes.
The Company shall pay, and shall cause each of its
Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and
governmental levies except such as are contested in good faith and by
appropriate proceedings or where the failure to effect such payment is not
adverse in any material respect to the Holders of the Notes.
<PAGE>
Section 4.06. Stay, Extension and Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it shall not at any time insist upon, plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay, extension or
usury law wherever enacted, now or at any time hereafter in force, that may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it shall not, by resort to any
such law, hinder, delay or impede the execution of any power herein granted to
the Trustee, but shall suffer and permit the execution of every such power as
though no such law has been enacted.
Section 4.07. Restricted Payments.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, (a) declare or pay any
dividend or make any other payment or distribution on account of the Company's
or any of its Restricted Subsidiaries' Equity Interests (including, without
limitation, any payment in connection with any merger or consolidation involving
the Company) or to the direct or indirect holders of the Company's Equity
Interests in their capacity as such (other than dividends or distributions
payable in Equity Interests (other than Disqualified Stock) of the Company); (b)
purchase, redeem or otherwise acquire or retire for value (including without
limitation, in connection with any merger or consolidation involving the
Company) any Equity Interests of the Company (other than any such Equity
Interests owned by the Company or any Wholly Owned Restricted Subsidiary of the
Company); (c) make any payment on or with respect to, or purchase, redeem,
defease or otherwise acquire or retire for value, any Indebtedness that is
subordinated in right of payment to the Notes, except a payment of interest or
principal at Stated Maturity; or (d) make any Restricted Investment (all such
payments and other actions set forth in clauses (a) through (d) above being
collectively referred to as "Restricted Payments"), unless, at the time of and
after giving effect to such Restricted Payment:
(i) no Default or Event of Default shall have occurred and
be continuing or would occur as a consequence thereof;
(ii) the Company would, at the time of such Restricted
Payment and after giving pro forma effect thereto as if such Restricted
Payment had been made at the beginning of the applicable four-quarter
period, have been permitted to incur at least $1.00 of additional
Indebtedness pursuant to the Consolidated Interest Coverage Ratio test
set forth in the first paragraph of Section 4.09 hereof; and
(iii) such Restricted Payment, together with the aggregate
amount of all other Restricted Payments made by the Company and its
Restricted Subsidiaries after the date of this Indenture, is less than
the sum of (A) 50% of the Consolidated Net Income of the Company for
the period (taken as one accounting period) commencing April 1, 1998 to
the end of the Company's most recently ended fiscal quarter for which
internal financial statements are available at the time of such
Restricted Payment (or, if such Consolidated Net Income for such period
is a deficit, less 100% of such deficit), plus (B) 100% of the
aggregate Net Cash Proceeds received by the Company from the issue or
sale since the date of this Indenture of Equity Interests of the
Company (other than
<PAGE>
Disqualified Stock) or of Disqualified Stock or debt securities of the
Company that have been converted into such Equity Interests (other than
any such Equity Interests, Disqualified Stock or convertible debt
securities sold to a Restricted Subsidiary of the Company and other
than Disqualified Stock or convertible debt securities that have been
converted into Disqualified Stock), plus (C) to the extent that any
Restricted Investment that was made after the date of this Indenture is
sold for cash or otherwise liquidated or repaid for cash, the sum of
(x) the initial amount of such Restricted Investment and (y) 50% of the
aggregate Net Proceeds received by the Company or any Restricted
Subsidiary in excess of the initial amount of such Restricted
Investment, plus (D) $10 million.
The foregoing provisions will not prohibit (a) the payment of
any dividend within 60 days after the date of declaration thereof, if at said
date of declaration such payment would have complied with the provisions of this
Indenture; (b) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness or Equity Interests of the Company
in exchange for, or out of the Net Cash Proceeds of the substantially concurrent
sale (other than to a Restricted Subsidiary of the Company) of, other Equity
Interests of the Company (other than any Disqualified Stock); provided that the
amount of any such Net Cash Proceeds that are utilized for any such redemption,
repurchase, retirement, defeasance or other acquisition shall be excluded from
clause (iii) (B) of the preceding paragraph; (c) the defeasance, redemption,
repurchase, retirement or other acquisition of subordinated Indebtedness with
the Net Cash Proceeds from an incurrence of, or in exchange for, Permitted
Refinancing Indebtedness; (d) the payment of any dividend by a Restricted
Subsidiary of the Company to the holders of its Equity Interests on a pro rata
basis; (e) so long as no Default or Event of Default shall have occurred and be
continuing, the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of the Company held by any member of the Company's
or any of its Restricted Subsidiaries' management upon the death, disability or
termination of employment of such member of management; provided that the
aggregate price paid for all such repurchased, redeemed, acquired or retired
Equity Interests shall not exceed $500,000 in any calendar year and $2.5 million
in the aggregate; (f) loans or advances to Unimast by the Company or WPSC prior
to the first anniversary of the date of the Indenture of amounts borrowed by
WPSC under the Revolving Credit Facility provided (i) such loans or advances do
not exceed $40 million at any time outstanding, (ii) Unimast pays interest to
WPSC on such loans or advances in an amount equal to the interest payable by
WPSC on such amounts pursuant to the Revolving Credit Facility and (iii) such
loans and advances are repaid in full on or prior to the first anniversary of
the date of the Indenture; (g) the payment by the Company of management fees to
WHX not to exceed $2.5 million in any calendar year, in exchange for services
provided to it by WPN Corp. pursuant to the management agreement between WHX and
WPN Corp.; and (h) payments permitted under the WHX Agreements.
In determining the amount of Restricted Payments permissible
under clause (iii) of the first paragraph of this covenant, amounts expended
pursuant to clauses (a) and (e) of the immediately preceding paragraph shall be
included as Restricted Payments for purposes of such clause (iii).
The Board of Directors of the Company may designate any
Restricted Subsidiary to be an Unrestricted Subsidiary if such designation would
not cause a Default. For purposes of making such determination, all outstanding
Investments by the Company and its
<PAGE>
Restricted Subsidiaries (except to the extent repaid in cash) in the Subsidiary
so designated will be deemed to be Restricted Payments at the time of such
designation. All such outstanding Investments will be deemed to constitute
Investments in an amount equal to the greater of (a) the net book value of such
Investments at the time of such designation and (b) the fair market value of
such Investments at the time of such designation. Such designation will be
permitted only if such Restricted Payment would be permitted at such time and if
such Restricted Subsidiary otherwise meets the definition of an Unrestricted
Subsidiary.
The amount of all Restricted Payments (other than cash) shall
be the fair market value on the date of the Restricted Payment of the asset(s)
or securities proposed to be transferred or issued by the Company or such
Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment.
The fair market value of any non-cash Restricted Payment shall be determined by
the Board of Directors of the Company whose resolution with respect thereto
shall be delivered to the Trustee. Not later than the date of making any
Restricted Payment, the Company shall deliver to the Trustee an officer's
certificate stating that such Restricted Payment is permitted and setting forth
the basis upon which the calculations required by this Section 4.07 were
computed.
Section 4.08. Dividend and Other Payment Restrictions
Affecting Subsidiaries.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective any encumbrance or restriction on the
ability of any Restricted Subsidiary to (a) (i) pay dividends or make any other
distributions to the Company or any of its Restricted Subsidiaries on its
Capital Stock or with respect to any other interest or participation in, or
measured by, its profits, or (ii) pay any indebtedness owed to the Company or
any of its Restricted Subsidiaries, (b) make loans or advances to the Company or
any of its Restricted Subsidiaries or (c) transfer any of its properties or
assets to the Company or any of its Restricted Subsidiaries, except for such
encumbrances or restrictions existing under or by reason of (1) Existing
Indebtedness as in effect on the date of this Indenture, including, without
limitation, restrictions under the Revolving Credit Facility, as in effect on
the date of this Indenture and any refinancings, amendments, restatements,
renewals or replacements thereof; provided, however, that the agreements
governing such contain restrictions that are not more restrictive, taken as a
whole, than those contained in the agreement governing the Indebtedness being so
refinanced, amended, restated, renewed or replaced, (2) this Indenture, the
Notes and the Subsidiary Guarantees, (3) applicable law, (4) any instrument
governing Indebtedness or Capital Stock of a Person acquired by the Company or
any of its Restricted Subsidiaries as in effect at the time of such acquisition
(except to the extent such Indebtedness was incurred in connection with or in
contemplation of such acquisition), which encumbrance or restriction is not
applicable to any Person, or the properties or assets of any Person, other than
the Person, or the property or assets of the Person, so acquired, provided that,
in the case of Indebtedness, such Indebtedness was permitted by the terms of the
Indenture to be incurred, (5) customary non-assignment provisions in leases
entered into in the ordinary course of business and consistent with past
practices, (6) purchase money obligations for property acquired in the ordinary
course of business that impose restrictions of the nature described in clause
(c) above on the property so acquired, (7) customary provisions in bona fide
contracts for the sale of property or assets, or (8) Permitted Refinancing
Indebtedness, provided that the restrictions contained in the agreements
governing such Permitted Refinancing Indebtedness are not more restrictive,
taken
<PAGE>
as a whole, than those contained in the agreements governing the Indebtedness
being refinanced.
Section 4.09. Incurrence of Indebtedness and Issuance of
Preferred Stock.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise become directly or indirectly liable,
contingently or otherwise, with respect to (collectively, "incur") any
Indebtedness (including Acquired Indebtedness) and that the Company will not
permit any of its Restricted Subsidiaries to issue any shares of preferred
stock; provided, however, that the Company may incur Indebtedness if the
Consolidated Interest Coverage Ratio for the Company's most recently ended four
full fiscal quarters for which internal financial statements are available
immediately preceding the date on which such additional Indebtedness is incurred
would have been at least 2.00 to 1 on a pro forma basis (including a pro forma
application of the net proceeds therefrom), as if the additional Indebtedness
had been incurred at the beginning of such four-quarter period.
Notwithstanding the foregoing, the Company and, to the extent
set forth below, its Restricted Subsidiaries may incur the following (each of
which shall be given independent effect):
(a) Indebtedness of the Company under the Notes and this
Indenture;
(b) Permitted Working Capital Indebtedness of the Company and
its Restricted Subsidiaries;
(c) Existing Indebtedness (other than Permitted Working
Capital Indebtedness or Indebtedness under the Letter of Credit
Facility);
(d) Indebtedness of the Company and its Restricted
Subsidiaries under the Letter of Credit Facility;
(e) Capital Expenditure Indebtedness, Capital Lease
Obligations and purchase money Indebtedness of the Company and its
Restricted Subsidiaries in an aggregate principal amount not to exceed
$50 million at any time outstanding;
(f) (i) Hedging Obligations of the Company and its Restricted
Subsidiaries covering Indebtedness of the Company or such Restricted
Subsidiary (which Indebtedness is otherwise permitted to be incurred
under this covenant) to the extent the notional principal amount of any
such Hedging Obligation does not exceed the principal amount of the
Indebtedness to which such Hedging Obligation relates; or (ii)
repurchase agreements, reverse repurchase agreements or similar
agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by
any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition; provided that the terms of such agreements comply with the
guidelines set forth in Federal-Financial Agreements of Depository
Institutions with Securities and Others (or any successor guidelines),
as adopted by the Comptroller of the Currency;
<PAGE>
(g) Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount not to exceed $30 million
at any time outstanding;
(h) Indebtedness of the Company representing guarantees of
Indebtedness incurred by one of its Restricted Subsidiaries pursuant
to, and in compliance with, another provision of this covenant;
(i) Indebtedness of the Company or any of its Restricted
Subsidiaries representing guarantees of a portion of the Indebtedness
of Wheeling-Nisshin which is not greater than the Company's or such
Restricted Subsidiary's pro rata ownership of the outstanding Equity
Interests in Wheeling-Nisshin; provided, however, that (i) such
Indebtedness is expressly subordinated to the prior payment in full in
cash of all Obligations with respect to the Notes and (ii) at the time
of incurrence and after giving effect to the Indebtedness of
Wheeling-Nisshin which is being guaranteed, the Consolidated Interest
Coverage Ratio of Wheeling-Nisshin for its most recently ended four
full fiscal quarters for which internal financial statements are
available would have been at least 2.00 to 1, determined on a pro forma
basis as if any additional Indebtedness had been incurred at the
beginning of such four-quarter period;
(j) Indebtedness of the Company or its Restricted Subsidiaries
representing guarantees of Indebtedness of Wheeling-Nisshin required to
be made pursuant to the Letter of Undertaking not to exceed $10
million;
(k) the incurrence by the Company or any of its Restricted
Subsidiaries of intercompany Indebtedness between or among the Company
and any of its Wholly Owned Restricted Subsidiaries; provided, however,
that (i) if the Company is the obligor on such Indebtedness, such
Indebtedness is expressly subordinated to the prior payment in full in
cash of all Obligations with respect to the Notes and (ii) (A) any
subsequent issuance or transfer of Equity Interests that results in any
such Indebtedness being held by a Person other than the Company or a
Wholly Owned Restricted Subsidiary and (B) any sale or other transfer
of any such Indebtedness to a Person that is not either the Company or
a Wholly Owned Restricted Subsidiary shall be deemed, in each case, to
constitute an incurrence of such Indebtedness by the Company or such
Restricted Subsidiary, as the case may be; and
(l) Indebtedness under the Term Loan Agreement; and
(m) any Permitted Refinancing Indebtedness representing a
replacement, renewal, refinancing or extension of Indebtedness
permitted under the first paragraph and clauses (c) and (l) of this
covenant.
In the event that the incurrence of any Indebtedness would be
permitted by the first paragraph set forth above or one or more of the
provisions set forth in the second paragraph above, the Company may designate
(in the form of an officer's certificate delivered
<PAGE>
to the Trustee) the particular provision of this Indenture pursuant to which it
is incurring such Indebtedness.
Section 4.10. Asset Sales.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, consummate an Asset Sale unless (a) the Company or
such Restricted Subsidiary, as the case may be, receives consideration at the
time of such Asset Sale at least equal to the fair market value (evidenced by a
resolution of the Board of Directors of the Company set forth in an officer's
certificate delivered to the Trustee) of the assets or Equity Interests issued
or sold or otherwise disposed of and (b) at least 80% of the consideration
therefor received by the Company or such Restricted Subsidiary is in the form of
cash; provided, however, that the amount of (i) any liabilities (as shown on the
Company's or such Restricted Subsidiary's most recent balance sheet) of the
Company or such Restricted Subsidiary (other than contingent liabilities and
liabilities that are by their terms subordinated to the Notes or any guarantee
thereof) that are assumed by the transferee of any such assets pursuant to a
customary novation agreement that releases the Company or such Restricted
Subsidiary from further liability and (ii) any securities, notes or other
obligations received by the Company or such Restricted Subsidiary from such
transferee that are converted by the Company or such Restricted Subsidiary
within 30 days of receipt into cash (to the extent of the cash received) shall
be deemed to be cash for purposes of this provision.
Within 270 days after the receipt of any Net Proceeds from an
Asset Sale, the Company or any such Restricted Subsidiary may apply such Net
Proceeds to reduce Indebtedness under the Revolving Credit Facility or other
pari passu Indebtedness (and in the case of such pari passu Indebtedness, to
correspondingly reduce commitments with respect thereto). To the extent such Net
Proceeds are not utilized as contemplated in the preceding sentence, such Net
Proceeds may, within 270 days after receipt thereof, be utilized to acquire
Replacement Assets. Pending the final application of any such Net Proceeds, the
Company or any Restricted Subsidiary may otherwise invest such Net Proceeds in
any manner that is not prohibited by this Indenture. Any Net Proceeds from Asset
Sales that are not applied or invested as provided in the first two sentences of
this paragraph will be deemed to constitute "Excess Proceeds." Within 30 days of
each date on which the aggregate amount of Excess Proceeds exceeds $20.0
million, the Company shall commence a pro rata Asset Sale Offer pursuant to
Section 3.09 hereof to purchase the maximum principal amount of Notes that may
be purchased out of the Note Pro Rata Share of Excess Proceeds at an offer price
in cash in an amount equal to 100% of the principal amount thereof plus accrued
and unpaid interest and Liquidated Damages, if any, thereon to the date of
purchase in accordance with the procedures set forth in Section 3.09 hereof. To
the extent that the aggregate amount of Notes tendered pursuant to an Asset Sale
Offer is less than the amount that the Company is required to repurchase, the
Company may use any remaining Excess Proceeds for general corporate purposes. If
the aggregate amount of Notes surrendered by Holders thereof exceeds the amount
that the Company is required to repurchase, the Trustee shall select the Notes
to be purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Trustee so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased). Upon completion of such offer
to purchase, the amount of Excess Proceeds shall be reset at zero.
<PAGE>
Section 4.11. Transactions with Affiliates.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or
otherwise dispose of any of its properties or assets to, or purchase any
property or assets from, or enter into or make or amend any transaction,
contract, agreement, understanding, loan, advance or guarantee with, or for the
benefit of, any Affiliate (each of the foregoing, an "Affiliate Transaction"),
unless (a) such Affiliate Transaction is on terms that are no less favorable to
the Company or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person or, if there is no such comparable
transaction, on terms that are fair and reasonable to the Company, and (b) the
Company delivers to the Trustee (i) with respect to any Affiliate Transaction or
series of related Affiliate Transactions involving aggregate consideration in
excess of $2.0 million, either (A) a resolution of the Board of Directors of the
Company set forth in an Officer's Certificate certifying that such Affiliate
Transaction complies with clause (a) above and that such Affiliate Transaction
has been approved by a majority of the disinterested members of the Board of
Directors of the Company or (B) if there are no disinterested members of the
Board of Directors of the Company, an opinion as to the fairness to the Company
of such Affiliate Transaction from a financial point of view issued by an
accounting, appraisal or investment banking firm of national standing and (ii)
with respect to any Affiliate Transaction or series of related Affiliate
Transactions involving aggregate consideration in excess of $5.0 million, an
opinion as to the fairness to the Company of such Affiliate Transaction from a
financial point of view issued by an accounting, appraisal or investment banking
firm of national standing; provided, however, that the following shall be deemed
not to be Affiliate Transactions: (v) customary directors' fees, indemnification
or similar arrangements or any employment agreement or other compensation plan
or arrangement entered into by the Company or any of its Restricted Subsidiaries
in the ordinary course of business and consistent with the past practice of the
Company or such Restricted Subsidiary; (w) transactions between or among the
Company and/or its Wholly-Owned Restricted Subsidiaries; (x) transactions
pursuant to the WHX Agreements or agreements with or applicable to any of
Wheeling-Nisshin, Ohio Coatings Company, the Empire-Iron Mining Partnership or
W-P Coal Company, in each case as in effect on the date of the Indenture; (y)
the purchase of accounts receivable from Unimast for immediate resale on the
same terms pursuant to the Receivables Facility; and (z) Restricted Payments
that are permitted pursuant to clauses (e), (f) and (g) of the second paragraph
of Section 4.07 hereof and Indebtedness permitted to be incurred pursuant to
clauses (i) and (j) of the second paragraph of Section 4.09 hereof.
Section 4.12. Liens.
The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
suffer to exist any Lien on any asset now owned or hereafter acquired, or any
income or profits therefrom or assign or convey any right to receive income
therefrom, without making effective provision for all payments due under the
Indenture and the Notes and the Subsidiary Guarantees to be directly secured on
an equal and ratable basis with the obligations so secured or, in the event such
Indebtedness is subordinate in right of payment to the Notes or the Subsidiary
Guarantees, prior to such Indebtedness, in each case until such time as such
obligations are no longer secured by a Lien.
<PAGE>
Notwithstanding the foregoing, the Company and its Restricted
Subsidiaries may create, incur, assume or suffer to exist (each of which shall
be given independent effect):
(a) Permitted Liens;
(b) Liens to secure the payment of Capital Expenditure
Indebtedness and Capital Lease Obligations, provided that (i) the
aggregate principal amount of Indebtedness secured by such Liens shall
not exceed the lesser of cost or Fair Market Value of the assets or
property acquired, constructed or improved with the proceeds of such
Indebtedness and (ii) such Liens shall not encumber any other assets or
property of the company and its Subsidiaries;
(c) Liens secured by the Capital Stock or assets of
Wheeling-Nisshin or Ohio Coatings Company to the extent required under
agreements as existing on the date of the Indenture; and
(d) Liens on accounts receivable, inventory, intangibles
necessary or useful for the sale of such inventory and other current
assets of the Company or any Restricted Subsidiary or on Capital Stock
Subsidiaries, in each case incurred to secure Permitted Working Capital
Indebtedness.
Section 4.13. Additional Subsidiary Guarantees.
If the Company or any of its Restricted Subsidiaries shall,
after the date of this Indenture, acquire, create or designate another
Restricted Subsidiary, then such newly acquired, created or designated
Restricted Subsidiary shall execute a Subsidiary Guarantee and deliver an
opinion of counsel in accordance with the terms of Section 10.02 of this
Indenture.
Section 4.14. Corporate Existence.
Subject to Article 5 hereof, the Company shall do or cause to
be done all things necessary to preserve and keep in full force and effect its
corporate existence, and the corporate, partnership or other existence of each
of its Restricted Subsidiaries, in accordance with the respective organizational
documents (as the same may be amended from time to time) of the Company or any
such Restricted Subsidiary; provided, however, that the Company shall not be
required to preserve the existence of any of its Restricted Subsidiaries, if the
Board of Directors of the Company shall determine that the preservation thereof
is no longer desirable in the conduct of the business of the Company and its
Restricted Subsidiaries, taken as a whole.
Section 4.15. Offer to Repurchase Upon Change of Control.
(a) Upon the occurrence of a Change of Control, the Company
shall make an offer (a "Change of Control Offer") to repurchase all or any part
(equal to $1,000 or an integral multiple thereof) of each Holder's Notes at an
offer price in cash equal to 101% of the aggregate principal amount thereof,
plus accrued and unpaid interest and Liquidated Damages, if any, thereon to the
date of repurchase (the "Change of Control Payment"). Within 30 days following
any Change of Control, the Company shall mail a notice to each Holder and the
Trustee stating: (1) that the Change of Control Offer is being made pursuant to
this Section
<PAGE>
4.15 and that all Notes validly tendered and not withdrawn will be accepted for
payment; (2) the purchase price and the purchase date, which shall be no earlier
than 30 days but no later than 60 days from the date such notice is mailed (the
"Change of Control Payment Date"); (3) that any Note not tendered will continue
to accrue interest; (4) that, unless the Company defaults in the payment of the
Change of Control Payment, all Notes accepted for payment pursuant to the Change
of Control Offer shall cease to accrue interest after the Change of Control
Payment Date; (5) that Holders electing to have any Notes purchased pursuant to
a Change of Control Offer will be required to surrender the Notes, properly
endorsed for transfer, together with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed and such customary
documents as the Company may reasonably request, to the Paying Agent at the
address specified in the notice prior to the close of business on the third
Business Day preceding the Change of Control Payment Date; (6) that Holders will
be entitled to withdraw their election if the Paying Agent receives, not later
than the close of business on the second Business Day preceding the Change of
Control Payment Date, a telegram, telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes delivered
for purchase, and a statement that such Holder is withdrawing his election to
have the Notes purchased; and (7) that Holders whose Notes are being purchased
only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered, which unpurchased portion must be
equal to $1,000 in principal amount or an integral multiple thereof. The Company
shall comply with the requirements of Rule 14e-1 under the Exchange Act and any
other securities laws and regulations thereunder to the extent such laws and
regulations are applicable in connection with the repurchase of Notes as a
result of a Change of Control.
(b) On or before 10:00 a.m. New York time on the Change of
Control Payment Date, the Company shall, to the extent lawful, (a) accept for
payment all Notes or portions thereof properly tendered pursuant to the Change
of Control Offer, (b) deposit with the Paying Agent an amount equal to the
Change of Control Payment in respect of all Notes or portions thereof so
tendered and (c) deliver or cause to be delivered to the Trustee the Notes so
accepted together with an Officer's Certificate stating the aggregate principal
amount of Notes or portions thereof being purchased by the Company. The Paying
Agent shall promptly mail to each Holder of Notes so tendered the Change of
Control Payment for such Notes, and the Trustee shall promptly authenticate and
mail (or cause to be transferred by book entry) to each Holder a new Note equal
in principal amount to any unpurchased portion of the Notes surrendered, if any;
provided, however, that each such new Note will be in a principal amount of
$1,000 or an integral multiple thereof. The Company shall publicly announce the
results of the Change of Control Offer on or as soon as practicable after the
Change of Control Payment Date.
Section 4.16. Sale and Leaseback Transactions.
The Company shall not, and will not permit any of its
Restricted Subsidiaries to, enter into any sale and leaseback transaction;
provided, however, that the Company may enter into a sale and leaseback
transaction if (a) the Company could have (i) incurred Indebtedness in an amount
equal to the Attributable Indebtedness relating to such sale and leaseback
transaction pursuant to the Consolidated Interest Coverage Ratio test set forth
in the first paragraph of Section 4.09 hereof and (ii) incurred a Lien to secure
such Indebtedness
<PAGE>
pursuant to Section 4.12 hereof, (b) the gross cash proceeds of such sale and
leaseback transaction are at least equal to the fair market value (as determined
in good faith by the Board of Directors of the Company and set forth in an
Officer's Certificate delivered to the Trustee) of the property that is the
subject of such sale and leaseback transaction and (c) the transfer of assets in
such sale and leaseback transaction is permitted by, and the Company applies the
Net Cash Proceeds of such transaction in compliance with, Section 4.10 hereof.
Section 4.17. Issuances and Sales of Capital Stock of
Subsidiaries.
The Company (a) shall not permit any Wholly Owned Restricted
Subsidiary of the Company to issue any of its Equity Interests to any Person
other than to the Company or a Wholly Owned Restricted Subsidiary of the
Company, and (b) shall not, and shall not permit any Wholly Owned Restricted
Subsidiary of the Company to, transfer, convey, sell, lease or otherwise dispose
of any Capital Stock of any Wholly Owned Restricted Subsidiary of the Company to
any Person (other than the Company or any Wholly Owned Restricted Subsidiary of
the Company) unless (i) such transfer, conveyance, sale, lease or other
disposition is of all of the Capital Stock of such Wholly Owned Restricted
Subsidiary and (ii) the Net Proceeds from such transfer, conveyance, sale, lease
or other disposition are applied in accordance with Section 4.10 hereof;
provided that this clause (b) shall not apply to any pledge of Capital Stock of
any Wholly Owned Restricted Subsidiary of the Company permitted pursuant to
clause (d) of the second paragraph of Section 4.12 hereof.
The Company shall not, and shall not permit any of its
Subsidiaries to, engage, directly or indirectly, in any business other than a
business of the Company or its Subsidiaries conducted on the date of the
Indenture or in a line of business or manufacturing or processing operation
reasonably related thereto (including any downstream steel manufacturing or
processing operation or manufacturing or fabricating operation in the
construction products business).
Section 4.18. Payment for Consent.
Neither the Company nor any of its Restricted Subsidiaries
shall, directly or indirectly, pay or cause to be paid any consideration,
whether by way of interest, fee or otherwise, to any Holder of any Notes for or
as an inducement to any consent, waiver or amendment of any of the terms or
provisions of the Indenture or the Notes unless such consideration is offered to
be paid or is paid to all Holders of the Notes that consent, waive or agree to
amend in the time frame set forth in the solicitation statement documents
relating to such consent, waiver or agreement.
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets.
The Company shall not consolidate or merge with or into
(whether or not the Company is the surviving corporation), or sell, assign,
transfer, lease, convey or otherwise
<PAGE>
dispose of all or substantially all of its properties or assets in one or more
related transactions, to another corporation, Person or entity unless (a) the
Company is the surviving corporation or the entity or the Person formed by or
surviving any such consolidation or merger (if other than the Company) or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made is a corporation organized or existing under the laws of
the United States, any state thereof or the District of Columbia, (b) the entity
or Person formed by or surviving any such consolidation or merger (if other than
the Company) or the entity or Person to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made assumes all the
obligations of the Company under the Notes and the Indenture pursuant to a
supplemental indenture in a form reasonably satisfactory to the Trustee, (c)
immediately after such transaction no Default or Event of Default exists and (d)
except in the case of a merger of the Company with or into a Wholly Owned
Restricted Subsidiary of the Company, the Company or the entity or Person formed
by or surviving any such consolidation or merger (if other than the Company), or
to which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made (A) will have Consolidated Net Worth immediately after the
transaction equal to or greater than the Consolidated Net Worth of the Company
immediately preceding the transaction and (B) will, at the time of such
transaction and after giving pro forma effect thereto as if such transaction had
occurred at the beginning of the applicable four-quarter period, be permitted to
incur at least $1.00 of additional Indebtedness pursuant to the Consolidated
Interest Coverage Ratio test set forth in the first paragraph of Section 4.09
hereof.
Section 5.02. Successor Corporation Substituted.
Upon any consolidation or merger, or any sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the assets of the Company in accordance with Section 5.01 hereof, the successor
corporation formed by such consolidation or into or with which the Company is
merged or to which such sale, assignment, transfer, lease, conveyance or other
disposition is made shall succeed to, and be substituted for (so that from and
after the date of such consolidation, merger, sale, lease, conveyance or other
disposition, the provisions of this Indenture referring to the "Company" shall
refer instead to the successor corporation and not to the Company), and may
exercise every right and power of the Company under this Indenture with the same
effect as if such successor Person had been named as the Company herein;
provided, however, that the predecessor Company shall not be relieved from the
obligation to pay the principal of and interest on the Notes except in the case
of a sale of all of the Company's assets that meets the requirements of Section
5.01 hereof.
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default.
An "Event of Default" occurs if:
(a) the Company defaults in the payment when due of interest
on, or Liquidated Damages, if any, with respect to, the Notes, and such
default continues for a period of 30 days;
<PAGE>
(b) the Company defaults in the payment when due of principal
of or premium, if any, on the Notes when the same becomes due and
payable at maturity, upon redemption (including in connection with an
offer to purchase) or otherwise;
(c) the Company fails to comply with any of the provisions of
Sections 4.07, 4.09, 4.10, 4.15 or Article V hereof;
(d) the Company fails to observe or perform any other
covenant, representation, warranty or other agreement in this Indenture
or the Notes for 30 days after notice to the Company by the Trustee or
to the Company and the Trustee by the Holders of at least 25% in
principal amount of the Notes then outstanding of such failure;
(e) a default occurs under any mortgage, indenture or
instrument under which there may be issued or by which there may be
secured or evidenced any Indebtedness for money borrowed by the Company
or any of its Restricted Subsidiaries (or the payment of which is
guaranteed by the Company or any of its Restricted Subsidiaries),
whether such Indebtedness or guarantee now exists, or is created after
the date of this Indenture, which default (i) is caused by a failure to
pay principal of or premium or interest on such Indebtedness prior to
the expiration of any grace period provided in such Indebtedness (a
"Payment Default") or (ii) results in the acceleration of such
Indebtedness prior to its express maturity and, in each case, the
principal amount of any such Indebtedness, together with the principal
amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated,
aggregates $10.0 million or more;
(f) a final judgment or final judgments for the payment of
money are entered by a court or courts of competent jurisdiction
against the Company or any of its Subsidiaries and such judgment or
judgments are not paid or discharged for a period (during which
execution shall not be effectively stayed by reason of pending appeal
or otherwise) of 60 days, provided that the aggregate of all such
undischarged judgments exceeds $10.0 million;
(g) the failure of any Guarantor to perform any covenant set
forth in its Subsidiary Guarantee or the repudiation by any Guarantor
of its obligations under its Subsidiary Guarantee or the
unenforceability of any Subsidiary Guarantee against a Guarantor for
any reason, unless, in each such case, such Guarantor and its
Subsidiaries have no Indebtedness outstanding at such time or at any
time thereafter;
(h) the Company or any of its Restricted Subsidiaries pursuant
to or within the meaning of Bankruptcy Law:
(i) commences a voluntary case,
(ii) consents to the entry of an order for relief
against it in an involuntary case,
<PAGE>
(iii) consents to the appointment of a custodian of it
or for all or substantially all of its property,
(iv) makes a general assignment for the benefit of its
creditors, or
(v) generally is not paying its debts as they become
due; or
(i) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law that:
(i) is for relief against the Company or any of its
Restricted Subsidiaries in an involuntary case;
(ii) appoints a Custodian of the Company or any of
its Restricted Subsidiaries or for all or substantially all of
the property of the Company or any of its Restricted
Subsidiaries; or
(iii) orders the liquidation of the Company or any of
its Restricted Subsidiaries;
and the order or decree remains unstayed and in effect for 60
consecutive days; provided, however, that if the entry of such order or
decree is appealed and dismissed on appeal then the Event of Default
hereunder by reason of the entry of such order or decree shall be
deemed to have been cured.
Section 6.02. Acceleration.
If any Event of Default occurs and is continuing, the Trustee
or the Holders of at least 25% in principal amount of the then outstanding Notes
may declare all the Notes to be due and payable immediately. Upon any such
declaration, the Notes shall become due and payable immediately. Notwithstanding
the foregoing, if an Event of Default specified in clause (i) or (j) of Section
6.01 hereof occurs with respect to the Company, any of its Significant
Subsidiaries or any group of Restricted Subsidiaries that, taken as a whole,
would constitute a Significant Subsidiary, all outstanding Notes shall be due
and payable immediately without further action or notice. The Holders of a
majority in aggregate principal amount of the then outstanding Notes by written
notice to the Trustee may on behalf of all of the Holders rescind an
acceleration and its consequences if the rescission would not conflict with any
judgment or decree and if all existing Events of Default (except nonpayment of
principal, interest, premium or Liquidated Damages, if any, that has become due
solely because of the acceleration) have been cured or waived.
If an Event of Default occurs by reason of any willful action
(or inaction) taken (or not taken) by or on behalf of the Company with the
intention of avoiding payment of the premium that the Company would have had to
pay if the Company then had elected to redeem the Notes pursuant to Section 3.07
hereof, then, upon acceleration of the Notes, an equivalent premium shall also
become and be immediately due and payable, to the extent permitted by law,
anything in this Indenture or in the Notes to the contrary notwithstanding.
<PAGE>
Section 6.03. Other Remedies.
If an Event of Default occurs and is continuing, the Trustee
may pursue any available remedy to collect the payment of principal of and
premium, interest and Liquidated Damages, if any, on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.
The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder of a Note in exercising any right
or remedy accruing upon an Event of Default shall not impair the right or remedy
or constitute a waiver of or acquiescence in the Event of Default. All remedies
are cumulative to the extent permitted by law.
Section 6.04. Waiver of Past Defaults.
Holders of a majority in aggregate principal amount of the
then outstanding Notes by notice to the Trustee may on behalf of the Holders of
all of the Notes waive an existing Default or Event of Default and its
consequences hereunder, except a continuing Default or Event of Default in the
payment of the principal of or interest, premium, if any, or Liquidated Damages,
if any, on the Notes (including in connection with an offer to purchase);
provided, however, that the Holders of a majority in aggregate principal amount
of the then outstanding Notes may rescind an acceleration and its consequences,
including any related payment default that resulted from such acceleration in
accordance with Section 6.02. Upon any such waiver, such Default shall cease to
exist, and any Event of Default arising therefrom shall be deemed to have been
cured for every purpose of this Indenture; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereon.
Section 6.05. Control by Majority.
Holders of a majority in principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee or exercising any
trust or power conferred on it. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or that the Trustee
determines may be unduly prejudicial to the rights of other Holders of Notes or
that may involve the Trustee in Personal liability.
Section 6.06. Limitation on Suits.
A Holder of a Note may pursue a remedy with respect to this
Indenture or the Notes only if:
(a) the Holder of a Note gives to the Trustee written notice
of a continuing Event of Default;
(b) the Holders of at least 25% in principal amount of the
then outstanding Notes make a written request to the Trustee to pursue
the remedy;
<PAGE>
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee indemnity satisfactory to the Trustee
against any loss, liability or expense;
(d) the Trustee does not comply with the request within 60
days after receipt of the request and the offer and, if requested, the
provision of indemnity; and
(e) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Notes do not give the Trustee
a direction inconsistent with the request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
Section 6.07. Rights of Holders of Notes to Receive Payment.
Notwithstanding any other provision of this Indenture, the
right of any Holder of a Note to receive payment of principal of and interest,
premium, if any, and Liquidated Damages, if any, on the Note, on or after the
respective due dates expressed in the Note (including in connection with an
offer to purchase), or to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
Section 6.08. Collection Suit by Trustee.
If an Event of Default specified in Section 6.01(a) or (b)
occurs and is continuing, the Trustee is authorized to recover judgment in its
own name and as trustee of an express trust against the Company for the whole
amount of principal of, interest, premium, if any, and Liquidated Damages, if
any, remaining unpaid on the Notes and interest on overdue principal and, to the
extent lawful, interest and Liquidated Damages, if any, and such further amount
as shall be sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
Section 6.09. Trustee May File Proofs of Claim.
The Trustee is authorized to file such proofs of claim and
other papers or documents as may be necessary or advisable in order to have the
claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
the Holders of the Notes allowed in any judicial proceedings relative to the
Company (or any other obligor upon the Notes), its creditors or its property and
shall be entitled and empowered to collect, receive and distribute any money or
other property payable or deliverable on any such claims and any custodian in
any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due to it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 7.07 hereof. To the extent that the payment of any such
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under Section 7.07 hereof out
of the estate in any such
<PAGE>
proceeding, shall be denied for any reason, payment of the same shall be secured
by a Lien on, and shall be paid out of, any and all distributions, dividends,
money, securities and other properties that the Holders may be entitled to
receive in such proceeding whether in liquidation or under any plan of
reorganization or arrangement or otherwise. Nothing herein contained shall be
deemed to authorize the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such proceeding.
Section 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07 hereof, including payment of all compensation, expense
and liabilities incurred, and all advances made, by the Trustee and the
Trustee's costs and expenses of collection;
Second: to Holders of Notes for amounts due and unpaid on the
Notes for principal, interest, premium, if any, and Liquidated Damages, if any,
ratably, without preference or priority of any kind, according to the amounts
due and payable on the Notes for principal, interest, if any, and Liquidated
Damages, if any, respectively; and
Third: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any
payment to Holders of Notes pursuant to this Section 6.10.
Section 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under
this Indenture or in any suit against the Trustee for any action taken or
omitted by it as a Trustee, a court in its discretion may require the filing by
any party litigant in the suit of an undertaking to pay the costs of the suit,
and the court in its discretion may assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section does not apply to a suit by the Trustee, a suit by a
Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more
than 10% in principal amount of the then outstanding Notes.
<PAGE>
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in its exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined
solely by the express provisions of this Indenture and the Trustee need
perform only those duties that are specifically set forth in this
Indenture and no others, and no implied covenants or obligations shall
be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements
of this Indenture.
(c) The Trustee may not be relieved from liabilities for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of
paragraph (b) of this Section;
(ii) the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or incur any liability. The Trustee shall be
under no obligation to exercise any of its rights and powers under this
Indenture at the request of any Holders, unless such Holder shall have offered
to the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
<PAGE>
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
Section 7.02. Rights of Trustee.
(a) The Trustee may conclusively rely upon any document
believed by it to be genuine and to have been signed or presented by the proper
Person. The Trustee need not investigate any fact or matter stated in the
document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officer's Certificate or Opinion of Counsel. The Trustee may
consult with counsel and the written advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection from liability
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within the
rights or powers conferred upon it by this Indenture.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders unless such Holders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities that might be incurred by it in compliance with such request or
direction.
Section 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become
the owner or pledgee of Notes and may otherwise deal with the Company, any
Guarantor or any Affiliate of the Company with the same rights it would have if
it were not Trustee. However, in the event that the Trustee acquires any
conflicting interest it must eliminate such conflict within 90 days, apply to
the SEC for permission to continue as trustee or resign. Any Agent may do the
same with like rights and duties. The Trustee is also subject to Sections 7.10
and 7.11 hereof.
Section 7.04. Trustee's Disclaimer.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture or the Notes, it
shall not be accountable for the
<PAGE>
Company's use of the proceeds from the Notes or any money paid to the Company or
upon the Company's direction under any provision of this Indenture, it shall not
be responsible for the use or application of any money received by any Paying
Agent other than the Trustee, and it shall not be responsible for any statement
or recital herein or any statement in the Notes or any other document in
connection with the sale of the Notes or pursuant to this Indenture other than
its certificate of authentication.
Section 7.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and
if it is known to the Trustee, the Trustee shall mail to Holders of Notes a
notice of the Default or Event of Default within 90 days after it occurs.
Section 7.06. Reports by Trustee to Holders of the Notes.
Within 60 days after each May 15 beginning with the May 15
following the date of this Indenture, and for so long as Notes remain
outstanding, the Trustee shall mail to the Holders of the Notes a brief report
dated as of such reporting date that complies with TIA Section 313(a) (but if no
event described in TIA Section 313(a) has occurred within the twelve months
preceding the reporting date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail
all reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the
Holders of Notes shall be mailed to the Company and filed with the SEC and each
stock exchange on which the Notes are listed in accordance with TIA Section
313(d). The Company shall promptly notify the Trustee when the Notes are listed
on any stock exchange.
Section 7.07. Compensation and Indemnity.
The Company shall pay to the Trustee from time to time
reasonable compensation for its acceptance of this Indenture and services
hereunder. The Trustee's compensation shall not be limited by any law on
compensation of a trustee of an express trust. The Company shall reimburse the
Trustee promptly upon request for all reasonable disbursements, advances and
expenses incurred or made by it in addition to the compensation for its
services. Such expenses shall include the reasonable compensation, disbursements
and expenses of the Trustee's agents and counsel.
The Company and the Guarantors shall indemnify the Trustee
against any and all losses, liabilities or expenses incurred by it arising out
of or in connection with the acceptance or administration of its duties under
this Indenture, including the costs and expenses of enforcing this Indenture
against the Company (including this Section 7.07) and defending itself against
any claim (whether asserted by the Company, any Guarantor or any Holder or any
other Person) or liability in connection with the exercise or performance of any
of its powers or duties hereunder, except to the extent any such loss, liability
or expense may be attributable to its negligence, bad faith or willful
misconduct. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company or the Guarantors of their obligations hereunder. The
Company
<PAGE>
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its consent, which consent shall not be unreasonably withheld.
The obligations of the Company and the Guarantors under this
Section 7.07 shall survive the satisfaction and discharge of this Indenture.
To secure the Company's payment obligations in this Section,
the Trustee shall have a Lien prior to the Notes on all money or property held
or collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(i) or (j) hereof occurs, the expenses
and the compensation for the services (including the fees and expenses of its
agents and counsel) are intended to constitute expenses of administration under
any Bankruptcy Law.
The Trustee shall comply with the provisions of TIA Section
313(b)(2) to the extent applicable.
Section 7.08. Replacement of Trustee.
A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
The Trustee may resign in writing at any time and be
discharged from the trust hereby created by so notifying the Company. The
Holders of Notes of a majority in principal amount of the then outstanding Notes
may remove the Trustee by so notifying the Trustee and the Company in writing.
The Company may remove the Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee
or its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Company shall promptly appoint a
successor Trustee. Within one year after the successor Trustee takes office, the
Holders of a majority in principal amount of the then outstanding Notes may
appoint a successor Trustee to replace the successor Trustee appointed by the
Company.
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If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Company, or the Holders of Notes of at least 10% in principal amount of the then
outstanding Notes may petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If the Trustee, after written request by any Holder of a Note
who has been a Holder of a Note for at least six months, fails to comply with
Section 7.10 hereof, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Holders of the Notes. The retiring Trustee shall promptly transfer
all property held by it as Trustee to the successor Trustee, provided all sums
owing to the Trustee hereunder have been paid and subject to the Lien provided
for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant
to this Section 7.08, the Company's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
Section 7.09. Successor Trustee by Merger, etc.
If the Trustee consolidates, merges or converts into, or
transfers all or substantially all of its corporate trust business to, another
corporation, the successor corporation without any further act shall be the
successor Trustee.
Section 7.10. Eligibility; Disqualification.
There shall at all times be a Trustee hereunder that is a
corporation organized and doing business under the laws of the United States of
America or of any state thereof that is authorized under such laws to exercise
corporate trustee power, that is subject to supervision or examination by
federal or state authorities and that has a combined capital and surplus of at
least $100 million as set forth in its most recent published annual report of
condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to
TIA Section 310(b).
Section 7.11. Preferential Collection of Claims Against
Company.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein.
<PAGE>
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant
Defeasance.
The Company may, at the option of its Board of Directors
evidenced by a resolution set forth in an Officer's Certificate, at any time,
exercise its rights under either Section 8.02 or 8.03 hereof with respect to all
outstanding Notes upon compliance with the conditions set forth below in this
Article Eight.
Section 8.02. Legal Defeasance and Discharge.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.02, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to
have discharged its obligations with respect to all outstanding Notes, and each
Guarantor shall be deemed to have discharged its obligations with respect to its
Guarantee, on the date the conditions set forth in Section 8.04 below are
satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance
means that the Company shall be deemed to have paid and discharged the entire
Indebtedness represented by the outstanding Notes, and each Guarantor shall be
deemed to have paid and discharged its Guarantee (which in each case shall
thereafter be deemed to be "outstanding" only for the purposes of Section 8.05
hereof and the other Sections of this Indenture referred to in (a) and (b)
below) and to have satisfied all its other obligations under such Notes and this
Indenture (and the Trustee, on demand of and at the expense of the Company,
shall execute proper instruments acknowledging the same), except for the
following provisions which shall survive until otherwise terminated or
discharged hereunder: (a) the rights of Holders of outstanding Notes to receive
solely from the trust fund described in Section 8.04 hereof, and as more fully
set forth in such Section, payments in respect of the principal of and interest,
premium, if any, and Liquidated Damages, if any, on such Notes when such
payments are due, (b) the Company's obligations with respect to such Notes under
Sections 2.03, 2.04, 2.07, 2.10 and 4.02 hereof, (c) the rights, powers, trusts,
duties and immunities of the Trustee hereunder and the Company's obligations in
connection therewith and (d) this Article Eight. Subject to compliance with this
Article Eight, the Company may exercise its option under this Section 8.02
notwithstanding the prior exercise of its option under Section 8.03 hereof.
Section 8.03. Covenant Defeasance.
Upon the Company's exercise under Section 8.01 hereof of the
option applicable to this Section 8.03, the Company shall, subject to the
satisfaction of the conditions set forth in Section 8.04 hereof, be released
from its obligations under the covenants contained in Article 4 (other than
those in Sections 4.01, 4.02, 4.06 and 4.14) and Section 5.01 hereof on and
after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Notes shall thereafter be deemed not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants, but shall continue to be deemed "outstanding" for all other purposes
hereunder (it being understood that such Notes shall not be deemed outstanding
for accounting purposes). For this purpose, Covenant Defeasance means that, with
<PAGE>
respect to the outstanding Notes, the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such covenant or by reason of any reference in any such
covenant to any other provision herein or in any other document and such
omission to comply shall not constitute a Default or an Event of Default under
Section 6.01 hereof, but, except as specified above, the remainder of this
Indenture and such Notes shall be unaffected thereby. In addition, upon the
Company's exercise under Section 8.01 hereof of the option applicable to this
Section 8.03 hereof, subject to the satisfaction of the conditions set forth in
Section 8.04 hereof, Sections 6.01(c) through 6.01(g) hereof shall not
constitute Events of Default.
Section 8.04. Conditions to Legal or Covenant Defeasance.
In order to exercise either Legal Defeasance or Covenant
Defeasance:
(a) the Company must irrevocably deposit with the Trustee, in
trust, for the benefit of the Holders, cash in United States dollars,
non-callable U.S. Government Obligations, or a combination thereof, in
such amounts as will be sufficient, in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal
of and interest, premium, if any, and Liquidated Damages, if any, on
the outstanding Notes on the stated maturity thereof or on the
applicable redemption date, as the case may be, and the Company must
specify whether the Notes are being defeased to maturity or to a
particular redemption date;
(b) in the case of an election under Section 8.02 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in
the United States reasonably acceptable to the Trustee confirming that
(A) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (B) since the date of this
Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Holders of the outstanding Notes
will not recognize income, gain or loss for federal income tax purposes
as a result of such Legal Defeasance and will be subject to federal
income tax on the same amounts, in the same manner and at the same
times as would have been the case if such Legal Defeasance had not
occurred;
(c) in the case of an election under Section 8.03 hereof, the
Company shall have delivered to the Trustee an Opinion of Counsel in
the United States reasonably acceptable to the Trustee confirming that
the Holders of the outstanding Notes will not recognize income, gain or
loss for federal income tax purposes as a result of such Covenant
Defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such Covenant Defeasance had not occurred;
(d) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event
of Default resulting from the incurrence of Indebtedness, all or a
portion of the proceeds of which will be used to defease the Notes
pursuant to this Article 8 concurrently with such incurrence or within
30 days thereof);
<PAGE>
(e) such Legal Defeasance or Covenant Defeasance shall not
result in a breach or violation of, or constitute a default under, any
material agreement or instrument (other than this Indenture) to which
the Company or any of its Restricted Subsidiaries is a party or by
which the Company or any of its Restricted Subsidiaries is bound;
(f) the Company shall have delivered to the Trustee an Opinion
of Counsel (which may be based on such solvency certificates or
solvency opinions as counsel deems necessary or appropriate) to the
effect that the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws
affecting creditors' rights generally;
(g) the Company shall have delivered to the Trustee an
Officer's Certificate stating that the deposit was not made by the
Company with the intent of preferring the Holders over any other
creditors of the Company or with the intent of defeating, hindering,
delaying or defrauding creditors of the Company or others; and
(h) the Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for or relating to the Legal Defeasance
or the Covenant Defeasance have been complied with.
Section 8.05. Deposited Money and Government Securities to be
Held in Trust; Other Miscellaneous Provisions.
Subject to Section 8.06 hereof, all money and non-callable
Government Securities (including the proceeds thereof) deposited with the
Trustee pursuant to Section 8.04 hereof in respect of the outstanding Notes
shall be held in trust and applied by the Trustee, in accordance with the
provisions of such Notes and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as Paying Agent) as the
Trustee may determine, to the Holders of such Notes of all sums due and to
become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required
by law.
The Company shall pay and indemnify the Trustee against any
tax, fee or other charge imposed on or assessed against the cash or non-callable
U.S. Government Obligations deposited pursuant to Section 8.04 hereof or the
principal and interest received in respect thereof other than any such tax, fee
or other charge which by law is for the account of the Holders of the
outstanding Notes.
Anything in this Article 8 to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon the
request of the Company any money or non-callable Government Securities held by
it as provided in Section 8.04 hereof which, in the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee (which may be the opinion
delivered under Section 8.04(a) hereof), are in excess of the amount thereof
that would then be required to be deposited to effect an equivalent Legal
Defeasance or Covenant Defeasance.
<PAGE>
Section 8.06. Repayment to Company.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, or
interest, premium, if any, or Liquidated Damages, if any, on any Note and
remaining unclaimed for two years after such principal, interest, premium, if
any, or Liquidated Damages, if any, has become due and payable shall be paid to
the Company on its request or (if then held by the Company) shall be discharged
from such trust; and the Holder of such Note shall thereafter, as a secured
creditor, look only to the Company for payment thereof, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in the
New York Times and The Wall Street Journal (national edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
Section 8.07. Reinstatement.
If the Trustee or Paying Agent is unable to apply any United
States dollars or non-callable Government Securities in accordance with Section
8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee
or Paying Agent is permitted to apply all such money in accordance with Section
8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company
makes any payment of principal of, or interest, premium, if any, or Liquidated
Damages, if any, on any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes.
Notwithstanding Section 9.02 of this Indenture, the Company,
the Guarantors and the Trustee may amend or supplement this Indenture or the
Notes without the consent of any Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
<PAGE>
(c) to provide for the assumption of the Company's obligations
to the Holders of the Notes in the case of a merger or consolidation
pursuant to Article 5 hereof;
(d) to make any change that would provide any additional
rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights hereunder of any Holder of the Note;
(e) to comply with Section 10.02 hereof; or
(f) to comply with requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA.
Upon the request of the Company and the Guarantors accompanied
by resolutions of the Boards of Directors of the Company and the Guarantors
authorizing the execution of any such amended or supplemental indenture, and
upon receipt by the Trustee of the documents described in Section 7.02 hereof,
the Trustee shall join with the Company and the Guarantors in the execution of
any amended or supplemental indenture authorized or permitted by the terms of
this Indenture and to make any further appropriate agreements and stipulations
that may be therein contained, but the Trustee shall not be obligated to enter
into such amended or supplemental Indenture that affects its own rights, duties
or immunities under this Indenture or otherwise.
Section 9.02. With Consent of Holders of Notes.
Except as provided below in this Section 9.02, the Company,
the Guarantors and the Trustee may amend or supplement this Indenture and the
Notes may be amended or supplemented with the consent of the Holders of at least
a majority in principal amount of the Notes then outstanding (including, without
limitation, consents obtained in connection with a purchase of, or tender offer
or exchange offer for the Notes), and, subject to Sections 6.04 and 6.07 hereof,
any existing Default or compliance with any provision of this Indenture or the
Notes may be waived with the consent of the Holders of a majority in principal
amount of the then outstanding Notes (including consents obtained in connection
with a tender offer or exchange offer for the Notes).
Upon the request of the Company and the Guarantors accompanied
by a resolution of the Board of Directors authorizing the execution of any such
amended or supplemental indenture, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Holders of Notes as
aforesaid, and upon receipt by the Trustee of the documents described in Section
7.02 hereof, the Trustee shall join with the Company and the Guarantors in the
execution of such amended or supplemental indenture unless such amended or
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such amended or
supplemental indenture.
It shall not be necessary for the consent of the Holders of
Notes under this Section 9.02 to approve the particular form of any proposed
amendment or waiver, but it shall be sufficient if such consent approves the
substance thereof.
<PAGE>
After an amendment, supplement or waiver under this Section
becomes effective, the Company shall mail to the Holders of Notes affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amended or
supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the
Holders of a majority in aggregate principal amount of the Notes then
outstanding may waive compliance in a particular instance by the Company with
any provision of this Indenture or the Notes. However, without the consent of
each Holder affected, an amendment or waiver may not (with respect to any Notes
held by a non-consenting Holder):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of
any Note or alter any of the provisions with respect to the redemption
of the Notes (including as provided in Section 4.10 and 4.15 hereof);
(c) reduce the rate of or change the time for payment of
interest on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or interest, premium, if any, or Liquidated Damages, if
any, on the Notes (except a rescission of acceleration of the Notes by
the Holders of at least a majority in aggregate principal amount of the
Notes and a waiver of the payment default that resulted from such
acceleration);
(e) make any Note payable in money other than that stated in
the Notes;
(f) make any change in the provisions of this Indenture
relating to waivers of past Defaults or the rights of Holders of Notes
to receive payments of principal of or interest, premium, if any, or
Liquidated Damages, if any, on the Notes (except as permitted in clause
(g) below);
(g) waive a redemption payment with respect to any Note
(including a payment required by Section 4.10 and 4.15 hereof); or
(h) make any change in the foregoing amendment and waiver
provisions.
Section 9.03. Compliance with Trust Indenture Act.
Every amendment or supplement to this Indenture or the Notes
shall be set forth in an amended or supplemental Indenture that complies with
the TIA as then in effect.
Section 9.04. Revocation and Effect of Consents.
Until an amendment, supplement or waiver becomes effective, a
consent to it by a Holder of a Note is a continuing consent by the Holder of a
Note and every subsequent Holder of a Note or portion of a Note that evidences
the same debt as the consenting Holder's
<PAGE>
Note, even if notation of the consent is not made on any Note. However, any such
Holder of a Note or subsequent Holder of a Note may revoke the consent as to its
Note if the Trustee receives written notice of revocation before the date the
waiver, supplement or amendment becomes effective. An amendment, supplement or
waiver becomes effective in accordance with its terms and thereafter binds every
Holder.
Section 9.05. Notation on or Exchange of Notes.
The Trustee may place an appropriate notation about an
amendment, supplement or waiver on any Note thereafter authenticated. The
Company in exchange for all Notes may issue and the Trustee shall authenticate
new Notes that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note
shall not affect the validity and effect of such amendment, supplement or
waiver.
Section 9.06. Trustee to Sign Amendments, etc.
The Trustee shall sign any amended or supplemental indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Company and the Guarantors may not sign an amendment or supplemental
indenture until their Boards of Directors approve it. In executing any amended
or supplemental indenture, the Trustee shall be entitled to receive and (subject
to Section 7.01) shall be fully protected in relying upon, an Officer's
Certificate and an Opinion of Counsel stating that the execution of such amended
or supplemental indenture is authorized or permitted by this Indenture.
ARTICLE 10
GUARANTEE OF NOTES
Section 10.01. Subsidiary Guarantee.
Subject to Section 10.05 hereof, the Guarantors hereby,
jointly and severally, unconditionally guarantee to each Holder of a Note
authenticated and delivered by the Trustee and to the Trustee and its successors
and assigns, irrespective of the validity and enforceability of this Indenture,
the Notes held thereby and the Obligations of the Company hereunder and
thereunder, that: (a) the principal of and interest, premium, if any, and
Liquidated Damages, if any, on the Notes will be promptly paid in full when due,
subject to any applicable grace period, whether at maturity, by acceleration,
redemption or otherwise, and interest on the overdue principal (to the extent
permitted by law), interest on any interest, if any, premium, if any, and
Liquidated Damages, if any, on the Notes, and all other payment Obligations of
the Company to the Holders or the Trustee hereunder or thereunder will be
promptly paid in full and performed, all in accordance with the terms hereof and
thereof; and (b) in case of any extension of time of payment or renewal of any
Notes or any of such other Obligations, the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
subject to any applicable grace period, whether at stated maturity, by
acceleration, redemption or otherwise. Failing payment when so due of any amount
so
<PAGE>
guaranteed or any performance so guaranteed for whatever reason, the Guarantors
will be jointly and severally obligated to pay the same immediately. An Event of
Default under this Indenture or the Notes shall constitute an event of default
under the Subsidiary Guarantees, and shall entitle the Holders to accelerate the
Obligations of the Guarantors hereunder in the same manner and to the same
extent as the Obligations of the Company. The Guarantors hereby agree that their
Obligations hereunder shall be unconditional, irrespective of the validity,
regularity or enforceability of the Notes or this Indenture, the absence of any
action to enforce the same, any waiver or consent by any Holder with respect to
any provisions hereof or thereof, the recovery of any judgment against the
Company, any action to enforce the same or any other circumstance which might
otherwise constitute a legal or equitable discharge or defense of a Guarantor.
Each Guarantor hereby waives diligence, presentment, demand of payment, filing
of claims with a court in the event of insolvency or bankruptcy of the Company,
any right to require a proceeding first against the Company, protest, notice and
all demands whatsoever and covenants that this Subsidiary Guarantee will not be
discharged except by complete performance of the Obligations contained in the
Notes and this Indenture. If any Holder or the Trustee is required by any court
or otherwise to return to the Company, the Guarantors, or any Note Custodian,
Trustee, liquidator or other similar official acting in relation to either the
Company or the Guarantors, any amount paid by the Company or any Guarantor to
the Trustee or such Holder, the Subsidiary Guarantees, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Guarantor agrees
that it shall not be entitled to, and hereby waives, any right of subrogation in
relation to the Holders in respect of any Obligations guaranteed hereby. Each
Guarantor further agrees that, as between the Guarantors, on the one hand, and
the Holders and the Trustee, on the other hand, (a) the maturity of the
Obligations guaranteed hereby may be accelerated as provided in Article 6 hereof
for the purposes of its Subsidiary Guarantee, notwithstanding any stay,
injunction or other prohibition preventing such acceleration in respect of the
Obligations guaranteed thereby, and (b) in the event of any declaration of
acceleration of such Obligations as provided in Article 6 hereof, such
Obligations (whether or not due and payable) shall forthwith become due and
payable by the Guarantor for the purpose of its Subsidiary Guarantee. The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Subsidiary Guarantees.
Section 10.02. Execution and Delivery of Subsidiary Guarantee.
To evidence its Subsidiary Guarantee set forth in Section
10.01 hereof, each Guarantor hereby agrees that a notation of such Subsidiary
Guarantee substantially in the form of Exhibit D hereto shall be endorsed by
manual or facsimile signature by an Officer of such Guarantor on each Note
authenticated and delivered by the Trustee and that this Indenture shall be
executed on behalf of such Guarantor, by manual or facsimile signature, by an
Officer of such Guarantor.
After the date of this Indenture, if the Company or any or its
Restricted Subsidiaries shall acquire, create or designate a Restricted
Subsidiary, then the Company shall cause such Restricted Subsidiary to execute a
Subsidiary Guarantee substantially in the form of Exhibit D. Such Subsidiary
Guarantee shall be accompanied by a supplemental indenture substantially in the
form of Exhibit E, along with such other opinions, certificates and documents
required under this Indenture.
<PAGE>
Each Guarantor hereby agrees that its Subsidiary Guarantee
shall remain in full force and effect notwithstanding any failure to endorse on
each Note a notation of such Subsidiary Guarantee.
If an Officer whose signature is on this Indenture or on the
Subsidiary Guarantee no longer holds that office at the time the Trustee
authenticates the Note on which a Subsidiary Guarantee is endorsed, the
Subsidiary Guarantee shall be valid nevertheless.
The delivery of any Note by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Subsidiary Guarantee set forth in this Indenture on behalf of the Guarantors.
Section 10.03. Guarantors May Consolidate, etc., on Certain
Terms.
(a) Except as set forth in Articles 4 and 5 hereof, nothing
contained in this Indenture shall prohibit a merger between a Guarantor and
another Guarantor or a merger between a Guarantor and the Company.
(b) No Guarantor shall consolidate with or merge with or into
(whether or not such Guarantor is the surviving Person) or sell all or
substantially all of its assets to, another corporation, Person or entity
whether or not affiliated with such Guarantor unless, other than with respect to
a merger between a Guarantor and another Guarantor or a merger between a
Guarantor and the Company, (i) subject to the provisions of Section 10.04
hereof, the Person formed by or surviving any such consolidation or merger (if
other than such Guarantor) assumes all the obligations of such Guarantor,
pursuant to a supplemental indenture substantially in the form of Exhibit E
hereto, under the Subsidiary Guarantee of such Guarantor and this Indenture;
(ii) immediately after giving effect to such transaction, no Default or Event of
Default exists; (iii) such Guarantor, or any Person formed by or surviving any
such consolidation or merger, would have Consolidated Net Worth (immediately
after giving effect to such transaction), equal to or greater than the
Consolidated Net Worth of such Guarantor immediately preceding the transaction;
and (iv) the Company would be permitted, immediately after giving effect to such
transaction, to incur at least $1.00 of additional Indebtedness pursuant to the
Consolidated Interest Coverage Ratio test set forth in the first paragraph of
Section 4.09 hereof.
(c) In the case of any such consolidation, merger, sale or
conveyance and upon the assumption by the successor Person, by supplemental
indenture, executed and delivered to the Trustee and substantially in the form
of Exhibit F hereto, of the Subsidiary Guarantee endorsed upon the Notes and the
due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Guarantor, such successor Person shall succeed
to and be substituted for the Guarantor with the same effect as if it had been
named herein as a Guarantor; provided that, solely for purposes of computing
Consolidated Net Income for purposes of clause (b) of the first paragraph of
Section 4.07 hereof, the Consolidated Net Income of any Person other than the
Company and its Restricted Subsidiaries shall only be included for periods
subsequent to the effective time of such merger, consolidation, combination or
transfer of assets. Such successor Person thereupon may cause to be signed any
or all of the Subsidiary Guarantees to be endorsed upon all of the Notes
issuable hereunder which theretofore shall not have been signed by the Company
and delivered to the
<PAGE>
Trustee. All of the Subsidiary Guarantees so issued shall in all respects have
the same legal rank and benefit under this Indenture as the Subsidiary
Guarantees theretofore and thereafter issued in accordance with the terms of
this Indenture as though all of such Subsidiary Guarantees had been issued at
the date of the execution hereof.
Section 10.04. Releases Following Sale of Assets.
In the event of a sale or other disposition of all of the
assets of any Guarantor, by way of merger, consolidation or otherwise, or a sale
or other disposition of all of the capital stock of any Guarantor, then such
Guarantor (in the event of a sale or other disposition, by way of such a merger,
consolidation or otherwise, of all of the capital stock of such Guarantor) or
the corporation acquiring the property (in the event of a sale or other
disposition of all of the assets of such Guarantor) shall be released and
relieved of any obligations under its Subsidiary Guarantee; provided, however,
that (i) in the event of an Asset Sale, the Net Proceeds from such sale or other
dispositions are treated in accordance with the provisions of Section 4.10
hereof and (ii) the Company is in compliance with all other provisions of this
Indenture applicable to such disposition. Upon delivery by the Company to the
Trustee of an Officer's Certificate to the effect of the foregoing, the Trustee
shall execute any documents reasonably required in order to evidence the release
of any Guarantor from its Obligation under its Subsidiary Guarantee. Any
Guarantor not released from its Obligations under its Subsidiary Guarantee shall
remain liable for the full amount of principal of and premium, interest and
Liquidated Damages, if any, on the Notes and for the other Obligations of such
Guarantor under this Indenture as provided in this Article 10.
Section 10.05. Limitation on Guarantor Liability.
For purposes hereof, each Guarantor's liability shall be
limited to the lesser of (a) the aggregate amount of the Obligations of the
Company under the Notes and this Indenture and (b) the amount, if any, which
would not have (i) rendered such Guarantor "insolvent" (as such term is defined
in the Bankruptcy Law) or (ii) left such Guarantor with unreasonably small
capital at the time its Subsidiary Guarantee was entered into; provided,
however, that, it will be a presumption in any lawsuit or other proceeding in
which a Guarantor is a party that the amount guaranteed pursuant to the
Subsidiary Guarantee is the amount set forth in clause (a) above unless any
creditor, or representative of creditors of such Guarantor, or debtor in
possession or trustee in bankruptcy of the Guarantor, otherwise proves in such a
lawsuit that the aggregate liability of the Guarantor is the amount set forth in
clause (b) above. In making any determination as to solvency or sufficiency of
capital of a Guarantor in accordance with the previous sentence, the right of
such Guarantor to contribution from other Guarantors, and any other rights such
Guarantor may have, contractual or otherwise, shall be taken into account.
Section 10.06. "Trustee" to Include Paying Agent.
In case at any time any Paying Agent other than the Trustee
shall have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article 10 shall in each case (unless the context
shall otherwise require) be construed as extending to and including such Paying
Agent within its meaning as fully and for all intents and purposes as if such
Paying Agent were named in this Article 10 in place of the Trustee.
<PAGE>
Section 10.07. Priority of Subsidiary Guarantee.
The Subsidiary Guarantees rank pari passu in right of payment
with all existing and future senior indebtedness of the Guarantors, including
the obligations of the Guarantors under the Revolving Credit Facility and any
successor credit facility. For purposes of the foregoing sentence, the Trustee
and the Holders shall have the right to receive and/or retain payments by any of
the Guarantors only at such times as they may receive and/or retain payments in
respect of the Notes pursuant to this Indenture, including this Article 10.
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or
conflicts with the duties imposed by TIA Section318(c), the imposed duties shall
control.
Section 11.02. Notices.
Any notice or communication by the Company or the Trustee to
the others is duly given if in writing and delivered in Person or mailed by
first class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
others' address:
If to the Company or the Guarantors:
Wheeling-Pittsburgh Corporation
1134 Market Street
Wheeling, West Virginia 26003
Telecopier No.: (305) 234-2261
Attention: Chief Financial Officer
Wheeling-Pittsburgh Corporation
110 East 59th Street
New York, New York 10022
Attention: Secretary
With copies to:
Olshan Grundman From & Rosenzweig LLP
505 Park Avenue
New York, New York 10022
Telecopier No.: (212) 980-7177
Attention: Steven Wolosky, Esq.
<PAGE>
If to the Trustee:
Bank One Trust Company, N.A.
Corporate Trust Account Administration
P.O. Box 710380
Columbus, Ohio 43271-0380
Telecopier No.: (614) 244-5785
The Company or the Trustee, by notice to the others may
designate additional or different addresses for subsequent notices or
communications.
All notices and communications (other than those sent to
Holders) shall be deemed to have been duly given: at the time delivered by hand,
if Personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by
first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA Section 313(c), to the extent required by
the TIA. Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders.
If a notice or communication is mailed in the manner provided
above within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Company mails a notice or communication to Holders, it
shall mail a copy to the Trustee and each Agent at the same time.
Section 11.03. Communication by Holders of Notes with Other
Holders of Notes.
Holders may communicate pursuant to TIA Section 312(b) with
other Holders with respect to their rights under this Indenture or the Notes.
The Company, the Trustee, the Registrar and anyone else shall have the
protection of TIA Section 312(c).
Section 11.04. Certificate and Opinion as to Conditions
Precedent.
Upon any request or application by the Company to the Trustee
to take any action under this Indenture, the Company shall furnish to the
Trustee:
(a) an Officer's Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 11.05 hereof) stating that, in the opinion of the
signers, all conditions precedent and covenants, if any, provided for
in this Indenture relating to the proposed action have been satisfied;
and
<PAGE>
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 11.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
Section 11.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:
(a) a statement that the Person making such certificate or
opinion has read such covenant or condition;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been satisfied; and
(d) a statement as to whether or not, in the opinion of such
Person, such condition or covenant has been satisfied.
Section 11.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or at a
meeting of Holders. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
Section 11.07. No Personal Liability of Directors, Officers,
Employees and Stockholders.
No past, present or future director, officer, employee,
incorporator or stockholder of the Company, as such, shall have any liability
for any obligations of the Company under the Notes, this Indenture or for any
claim based on, in respect of, or by reason of, such obligations or their
creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for issuance of
the Notes.
Section 11.08. Governing Law.
THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN
AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE
SUBSIDIARY GUARANTEES.
<PAGE>
Section 11.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret any other
indenture, loan or debt agreement of the Company or its Subsidiaries or of any
other Person. Any such indenture, loan or debt agreement may not be used to
interpret this Indenture.
Section 11.10. Successors.
All agreements of the Company and the Guarantors in this
Indenture and the Notes shall bind their respective successors. All agreements
of the Trustee in this Indenture shall bind its successors.
Section 11.11. Severability.
In case any provision in this Indenture or in the Notes shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
Section 11.12. Counterpart Originals.
The parties may sign any number of copies of this Indenture.
Each signed copy shall be an original, but all of them together represent the
same agreement.
Section 11.13. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table and Headings of
the Articles and Sections of this Indenture have been inserted for convenience
of reference only, are not to be considered a part of this Indenture and shall
in no way modify or restrict any of the terms or provisions hereof.
[Signatures on following pages]
<PAGE>
SIGNATURES
Dated as of November 26, 1997 WHEELING-PITTSBURGH CORPORATION
By:_________________________________
Name:
Title:
WHEELING-PITTSBURGH STEEL CORPORATION
By:__________________________________
Name:
Title:
CONSUMERS MINING COMPANY
By:__________________________________
Name:
Title:
WHEELING-EMPIRE COMPANY
By:__________________________________
Name:
Title:
MINGO OXYGEN COMPANY
By:__________________________________
Name:
Title:
<PAGE>
PITTSBURGH-CANFIELD CORPORATION
By:__________________________________
Name:
Title:
WHEELING CONSTRUCTION PRODUCTS, INC.
By:___________________________________
Name:
Title:
WP STEEL VENTURE CORPORATION
By:___________________________________
Name:
Title:
CHAMPION METAL PRODUCTS, INC.
By:___________________________________
Name:
Title:
Dated as of November 26, 1997 BANK ONE, N.A., as trustee
By:___________________________________
Name: Ted J. Kravits
Title: Authorized Signatory
<PAGE>
Exhibit A-1
(Face of Note)
9 1/4% [Series A] [Series B] Senior Notes due 2007
No. $_______________
CUSIP NO. 96 3142A53
WHEELING-PITTSBURGH CORPORATION
promises to pay to Cede & Co. or registered assigns, the principal sum of
___________ Dollars on ____ __, 2007.
Interest Payment Dates: May 15 and November 15
Record Dates: May 1 and November 1
Dated: ____ __, 1997
WHEELING-PITTSBURGH CORPORATION
By:________________________________
Name:
Title:
(SEAL)
This is one of the [Global]
Notes referred to in the
within-mentioned Indenture:
Dated: November 26, 1997
Bank One, N.A.
as Trustee
By:_____________________________
A-1-1
<PAGE>
(Back of Note)
9 1/4% [Series A][Series B] Senior Notes due 2007
[Unless and until it is exchanged in whole or in part for
Notes in definitive form, this Note may not be transferred except as a whole by
the Depository to a nominee of the Depository or by a nominee of the Depository
to the Depository or another nominee of the Depository or by the Depository or
any such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.]1
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND,
ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.
PERSONS, EXCEPT AS SET FORTH IN THE SECOND SENTENCE HEREOF. BY ITS
ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT)(A "QIB") OR (B) IT IS ACQUIRING
THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY OF ITS
SUBSIDIARIES, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QIB PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF THE
SECURITIES ACT, (D) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144 UNDER THE SECURITIES ACT, (E) IN ACCORDANCE WITH ANOTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE
WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES
OR ANY OTHER APPLICABLE JURISDICTION AND (3) AGREES THAT IT WILL
DELIVER TO EACH PERSON TO WHOM THIS
- --------
1 This paragraph should be included only if the Note is issued in global form.
A-1-2
<PAGE>
NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION"
AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS NOTE IN VIOLATION OF THE FOREGOING.2
1. Interest. Wheeling-Pittsburgh Corporation, a Delaware
corporation (the "Company"), promises to pay interest on the principal amount of
this Note at 9 1/4% per annum from November 26, 1997 until maturity and shall
pay the Liquidated Damages, payable pursuant to Section 5 of the Registration
Rights Agreement referred to below. The Company will pay interest and Liquidated
Damages semi-annually on May 15 and November 15 of each year, or if any such day
is not a Business Day, on the next succeeding Business Day (each an "Interest
Payment Date"). Interest on the Notes will accrue from the most recent date to
which interest has been paid or, if no interest has been paid, from the date of
original issuance. The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal and
premium, if any, from time to time on demand at a rate that is the rate then in
effect; it shall pay interest (including post-petition interest in any
proceeding under any Bankruptcy Law) on overdue installments of interest and
Liquidated Damages (without regard to any applicable grace periods) from time to
time on demand at the same rate to the extent lawful. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
2. Method of Payment. The Company will pay interest on the
Notes (except defaulted interest) and Liquidated Damages to the Persons who are
registered Holders of Notes at the close of business on the May 1 or November 1
next preceding the Interest Payment Date, even if such Notes are cancelled after
such record date and on or before such Interest Payment Date, except as provided
in Section 2.12 of the Indenture with respect to defaulted interest. The Notes
will be payable as to principal, interest, premium, if any, and Liquidated
Damages, if any, at the office or agency of the Company maintained for such
purpose within or without the City and State of New York, or, at the option of
the Company, payment of interest and Liquidated Damages, if any, may be made by
check mailed to the Holders at their addresses set forth in the register of
Holders, and provided that payment by wire transfer of immediately available
funds will be required with respect to principal of and interest, premium, if
any, and Liquidated Damages, if any, on, all Global Notes and all other Notes
the Holders of which shall have provided wire transfer instructions to the
Company or the Paying Agent. Such payment shall be in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
3. Paying Agent and Registrar. Initially, Bank One, N.A., the
Trustee under the Indenture, will act as Paying Agent and Registrar. The Company
may change any Paying Agent or
- ----------------
2. This paragraph should be removed upon the exchange of Series A Notes for
Series B Notes in the Exchange Offer or upon the transfer of the Series A Notes
that have been sold pursuant to the terms of the Shelf Registration contemplated
by the Registration Rights Agreement.
A-1-3
<PAGE>
Registrar without notice to any Holder. The Company or any of its Subsidiaries
may act in any such capacity.
4. Indenture. The Company issued the Notes under an Indenture
dated as of November 26, 1997 ("Indenture") among the Company, the Guarantors
and the Trustee. The terms of the Notes include those stated in the Indenture
and those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S. Code SectionSection 77aaa-77bbbb). The Notes are
subject to all such terms, and Holders are referred to the Indenture and such
Act for a statement of such terms. The Notes are senior unsecured obligations of
the Company limited to $275,000,000 aggregate principal amount.
5. Optional Redemption.
(a) Except as set forth in subparagraphs (b) and (c) of this
Paragraph 5, the Company shall not have the option to redeem the Notes prior to
November 15, 2002. Thereafter, the Company shall have the option to redeem the
Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice,
at the redemption prices (expressed as percentages of principal amount) set
forth below plus accrued and unpaid interest and Liquidated Damages, if any,
thereon to the applicable redemption date, if redeemed during the twelve-month
period beginning on November 15 of the years indicated below:
Year Percentage
---- ----------
2002.................................... 104.625%
2003 ................................... 103.083%
2004 ................................... 101.542%
2005 and thereafter..................... 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this
Paragraph 5, at any time prior to November 15, 2002, the Company may redeem up
to 35% of the aggregate principal amount of Notes originally issued at a
redemption price of 109.25% of the principal amount thereof, plus accrued and
unpaid interest and Liquidated Damages, if any, thereon to the redemption date,
with the net cash proceeds of one or more Public Equity Offerings; provided,
however, that (a) at least 65% of the aggregate principal amount of Notes
initially issued remains outstanding immediately after the occurrence of each
such redemption and (b) such redemption shall occur within 30 days following the
date of the consummation of such Public Equity Offering.
(c) At any time prior to November 15, 2002, the Notes may also
be redeemed as a whole but not in part at the option of the Company, upon not
less than 30 nor more than 60 days prior notice mailed by first-class mail to
each Holder's registered address, at a redemption price equal to 100% of the
principal amount thereof plus the Applicable Premium, accrued interest and
Liquidated
A-1-4
<PAGE>
Damages, if any, thereon to the redemption date (subject to the right of Holders
of record on the relevant record dated to receive interest due on the relevant
interest payment date).
6. Mandatory Redemption.
Except as set forth in paragraph 7 below, the Company shall not be
required to make mandatory redemption payments with respect to the Notes.
7. Repurchase at Option of Holder.
(a) If there is a Change of Control, the Company shall be
required to make an offer (a "Change of Control Offer") to repurchase all or any
part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at
a purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest and Liquidated Damages, if any, thereon to the date
of purchase (the "Change of Control Payment"). Within 30 days following any
Change of Control, the Company shall mail a notice to each Holder describing the
transaction that constitutes the Change of Control and setting forth the
procedures governing the Change of Control Offer as required by the Indenture.
(b) If the Company or a Restricted Subsidiary consummates any
Asset Sales, within 30 days of each date on which the aggregate amount of Excess
Proceeds exceeds $20 million, the Company shall commence an offer to all Holders
of Notes (as "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to
purchase the maximum principal amount of Notes that may be purchased out of the
Excess Proceeds at an offer price in cash in an amount equal to 100% of the
principal amount thereof plus accrued and unpaid interest and Liquidated
Damages, if any, thereon to the date of purchase, in accordance with the
procedures set forth in the Indenture. To the extent that the aggregate amount
of Notes tendered pursuant to an Asset Sale Offer is less than the Excess
Proceeds, the Company (or such Subsidiary) may use such deficiency for general
corporate purposes. If the aggregate principal amount of Notes surrendered by
Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select
the Notes to be purchased on a pro rata basis (with such adjustments as may be
deemed appropriate by the Trustee so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased). Holders of Notes that are
the subject of an offer to purchase will receive an Asset Sale Offer from the
Company prior to any related purchase date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
on the reverse of the Notes.
8. Notice of Redemption. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes in
denominations larger than $1,000 may be redeemed in part but only in whole
multiples of $1,000, unless all of the Notes held by a Holder are to be
redeemed. On and after the redemption date interest ceases to accrue on Notes or
portions thereof called for redemption.
9. Denominations, Transfer, Exchange. The Notes are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Notes may be
A-1-5
<PAGE>
registered and Notes may be exchanged as provided in the Indenture. The
Registrar and the Trustee may require a Holder, among other things, to furnish
appropriate endorsements and transfer documents and the Company may require a
Holder to pay any taxes and fees required by law or permitted by the Indenture.
The Company need not exchange or register the transfer of any Note or portion of
a Note selected for redemption, except for the unredeemed portion of any Note
being redeemed in part. Also, it need not exchange or register the transfer of
any Notes for a period of 15 days before a selection of Notes to be redeemed or
during the period between a record date and the corresponding Interest Payment
Date.
10. Persons Deemed Owners. The registered Holder of a Note may
be treated as its owner for all purposes.
11. Amendment, Supplement and Waiver. Subject to certain
exceptions, the Indenture or the Notes may be amended or supplemented with the
consent of the Holders of at least a majority in principal amount of the then
outstanding Notes, and any existing default or compliance with any provision of
the Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture or the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.
12. Defaults and Remedies. Events of Default include: (i)
default for 30 days in the payment when due of interest or Liquidated Damages on
the Notes; (ii) default in payment when due of the principal of or premium, if
any, on the Notes; (iii) failure by the Company to comply with Sections 4.07,
4.09, 4.10 and 4.15 and Article V of the Indenture; (iv) failure by the Company
for 30 days after notice to comply with any of its other agreements in the
Indenture or the Notes; (v) default under any mortgage, indenture or instrument
under which there may be issued or by which there may be secured or evidenced
any Indebtedness for money borrowed by the Company or any of its Subsidiaries
(or the payment of which is guaranteed by the Company or any of its Restricted
Subsidiaries), whether such Indebtedness or guarantee now exists or is created
after the date of the Indenture, which default (a) is caused by a failure to pay
principal of or premium or interest on such Indebtedness prior to the expiration
of any grace period provided in such Indebtedness (a "Payment Default") or (b)
results in the acceleration of such Indebtedness prior to its express maturity
and, in each case, the principal amount of any such Indebtedness, together with
the principal amount of any other such Indebtedness under which there has been a
Payment Default or the maturity of which has been so accelerated, aggregates
$10.0 million or more; (vi) failure by the Company or any of its Restricted
Subsidiaries to pay final judgments aggregating in excess of $10.0 million,
which judgments are not paid, discharged or stayed for a period of 60 days;
(vii) failure by any Guarantor to perform any covenant set forth in its
Subsidiary Guarantee, or the repudiation by any Guarantor of its obligations
under its Subsidiary Guarantee or the
A-1-6
<PAGE>
unenforceability of any Subsidiary Guarantee against a Guarantor for any reason,
unless, in each such case, such Guarantor and its Restricted Subsidiaries have
no Indebtedness outstanding at such time or at any time thereafter; and (viii)
certain events of bankruptcy or insolvency with respect to the Company or any of
its Restricted Subsidiaries. If any Event of Default occurs and is continuing,
the Trustee or the Holders of at least 25% in principal amount of the then
outstanding Notes may declare all the Notes to be due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
certain events of bankruptcy or insolvency, all outstanding Notes will become
due and payable without further action or notice. Holders may not enforce the
Indenture or the Notes except as provided in the Indenture. Subject to certain
limitations, Holders of a majority in principal amount of the then outstanding
Notes may direct the Trustee in its exercise of any trust or power. The Holders
of a majority in aggregate principal amount of the Notes then outstanding by
notice to the Trustee may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest on,
or the principal of, the Notes. The Company is required to deliver to the
Trustee annually a statement regarding compliance with the Indenture, and the
Company is required upon becoming aware of any Default or Event of Default, to
deliver to the Trustee a statement specifying such Default or Event of Default.
13. Defeasance. The Notes are subject to defeasance upon the
terms and conditions specified in the Indenture.
14. Trustee Dealings with Company. The Trustee, in its
individual or any other capacity, may make loans to, accept deposits from, and
perform services for the Company or its Affiliates, and may otherwise deal with
the Company or its Affiliates, as if it were not the Trustee.
15. No Recourse Against Others. A director, officer, employee,
incorporator or stockholder, of the Company, as such, shall not have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
16. Authentication. This Note shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating agent.
17. Abbreviations. Customary abbreviations may be used in the
name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
18. Additional Rights of Holders of Transfer Restricted
Securities. In addition to the rights provided to Holders of Notes under the
Indenture, Holders of Transferred Restricted Securities shall have all the
rights set forth in the Registration Rights Agreements, dated as of November 26,
1997,
A-1-7
<PAGE>
among the Company and the other parties named on the signature pages thereof
(the "Registration Rights Agreement").
19. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Company has
caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP
numbers in notices of redemption as a convenience to Holders. No representation
is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the
other identification numbers placed thereon.
The Company will furnish to any Holder upon written request
and without charge a copy of the Indenture and/or the Registration Rights
Agreement. Requests may be made to:
Wheeling-Pittsburgh Corporation
1134 Market Street
Wheeling, West Virginia 26003
Telecopier No.: (304) 234-2261
Attention: Chief Financial Officer
A-1-8
<PAGE>
Assignment Form
To assign this Note, fill in the form below: (I) or (we) assign and
transfer this Note to
- --------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint_________________________________________________________
to transfer this Note on the books of the Company. The agent may substitute
another to act for him.
- --------------------------------------------------------------------------------
Date:___________________
Your Signature:_____________________________
(Sign exactly as your name appears on
the face of this Note)
Signature Guarantee:
A-1-9
<PAGE>
Option of Holder to Elect Purchase
If you want to elect to have this Note purchased by the
Company pursuant to Section 4.10 or 4.15 of the Indenture, check the box below:
/ / Section 4.10 / / Section 4.15
If you want to elect to have only part of the Note purchased
by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state
the amount you elect to have purchased:
$___________
Date:__________________________ Your Signature:_______________________________
(Sign exactly as your name
appears on the Note)
Tax Identification No.:_______________________
Signature Guarantee.
A-1-10
<PAGE>
SCHEDULE OF EXCHANGES OF NOTES3
The following exchanges of a part of this Global Note for other Notes have been
made:
Date of Amount of Amount of Principal Signature of
Exchange decrease in increase in Amount of authorized
- -------- Principal Principal this Global officer of
Amount of this Amount of this Note Trustee or Note
Global Note Global Note following Custodian
-------------- -------------- such ---------------
decrease
(or
increase)
---------
- --------
(3) This should be included only if the Note is issued in global form.
A-1-11
<PAGE>
Exhibit A-2
(Face of Regulation S Temporary Global Note)
9 1/4% Series A Senior Notes due 2007
No. $_______________
CUSIP NO. 496301AA1
WHEELING-PITTSBURGH CORPORATION
promises to pay to Cede & Co. or registered assigns, the principal sum of
___________ Dollars on ____ __, 2007.
Interest Payment Dates: May 15 and November 15
Record Dates: May 1 and November 1
Dated: ____ __, 1997
WHEELING-PITTSBURGH CORPORATION
By:_________________________________
Name:
Title:
(SEAL)
This is one of the Global
Notes referred to in the
within-mentioned Indenture:
Dated: November 26, 1997
Bank One, N.A.
as Trustee
By:__________________________
A-2-1
<PAGE>
(Back of Regulation S Temporary Global Note)
9 1/4% Series A Senior Notes due 2007
Unless and until it is exchanged in whole or in part for Notes
in definitive form, this Note may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository. Unless this certificate is presented by an authorized representative
of The Depository Trust Company (55 Water Street, New York, New York) ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or such other
name as may be requested by an authorized representative of DTC (and any payment
is made to Cede & Co. or such other entity as may be requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL in as much as the registered owner
hereof, Cede & Co., has an interest herein.
THIS NOTE (OR ITS PREDECESSOR) HAS NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR
THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH
IN THE SECOND SENTENCE HEREOF. BY ITS ACQUISITION HEREOF OR
OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED
IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB") OR (B) IT IS
ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT, (2) AGREES THAT
IT WILL NOT RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)
TO THE COMPANY OR ANY OF ITS SUBSIDIARIES, (B) TO A PERSON
WHOM THE SELLER REASONABLY BELIEVES IS A QIB PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (C) IN AN OFFSHORE
TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR 904 OF
THE SECURITIES ACT, (D) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (E) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION
OF COUNSEL ACCEPTABLE TO THE COMPANY) OR (F) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN
ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE
OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND
(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION" AND "UNITED STATES" HAVE THE
MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE
SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING
A-2-2
<PAGE>
THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE
IN VIOLATION OF THE FOREGOING.
Subject to the provisions hereof, Wheeling-Pittsburgh
Corporation, a Delaware corporation (the "Company"), promises to pay
_____________ the principal sum of ____________ UNITED STATES DOLLARS (U.S.
$___________) on November 15, 2007, and to pay interest on the principal amount
of this Note at the rate of 9 1/4% per annum. Interest shall be paid in cash
semi-annually in arrears on May 15 and November 15 or if any such day is not a
Business Day, on the next succeeding Business Day (each an "Interest Payment
Date"); provided that the first Interest Payment Date shall be May 15, 1998.
Interest on the Notes will accrue from the most recent date to which interest
has been paid or, if no interest has been paid, from the date of original
issuance. Interest will be computed on the basis of a 360-day year comprised of
twelve 30-day months.
This Regulation S Temporary Global Note is issued in respect
of an issue of 9 1/4% Series A Senior Notes due 2007 (the "Notes") of the
Company, limited to the aggregate principal amount of U.S. $275,000,000 issued
pursuant to an Indenture (the "Indenture") dated as of November 26, 1997, among
the Company, the Guarantors party thereto and Bank One, N.A. as trustee (the "
Trustee"), and is governed by the terms and conditions of the Indenture
governing the Notes, which terms and conditions are incorporated herein by
reference and, except as otherwise provided herein, shall be binding on the
Company and the Holder hereof as if fully set forth herein. Unless the context
otherwise requires, the terms used herein shall have the meanings specified in
the Indenture.
Until this Regulation S Temporary Global Note is exchanged for
Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to
receive payments of interest hereon although interest will continue to accrue;
until so exchanged in full, this Regulation S Temporary Global Note shall in all
other respects be entitled to the same benefits as other Notes under the
Indenture.
This Regulation S Temporary Global Note is exchangeable in
whole or in part for one or more Regulation S Permanent Global Notes or Rule
144A Global Notes only (i) on or after the termination of the 40-day restricted
period (as defined in Regulation S) and (ii) upon presentation of certificates
(accompanied by an Opinion of Counsel, if applicable) required by Article 2 of
the Indenture. Upon exchange of this Regulation S Temporary Global Note for one
or more Regulation S Permanent Global Notes or Rule 144A Global Notes, the
Trustee shall cancel this Regulation S Temporary Global Note.
This Regulation S Temporary Global Note shall not become valid
or obligatory until the certificate of authentication hereon shall have been
duly manually signed by the Trustee in accordance with the Indenture. This
Regulation S Temporary Global Note shall be governed by and construed in
accordance with the laws of the State of New York. All references to "$,"
"Dollars," "dollars" or "U.S. $" are to such coin or currency of the United
States of America as at the time shall be legal tender for the payment of public
and private debts therein.
A-2-3
<PAGE>
SCHEDULE OF EXCHANGES FOR GLOBAL NOTES
The following exchanges of a part of this Regulation S Temporary Global Note for
other Global Notes have been made:
Date of Amount of Amount of Principal Signature of
Exchange decrease in increase in Amount of authorized
- -------- Principal Principal this Global officer of
Amount of this Amount of this Note Trustee or
Global Note Global Note following Note Custodian
-------------- -------------- such decrease --------------
(or increase)
-------------
A-2-4
<PAGE>
Exhibit B-1
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM 144A GLOBAL NOTE TO REGULATION S GLOBAL NOTE
(Pursuant to Section 2.06(a)(i) of the Indenture)
[REGISTRAR]
Re: 9 1/4% Senior Notes due 2007 of Wheeling-Pittsburgh
Corporation.
Reference is hereby made to the Indenture, dated as of
November 26, 1997 (the "Indenture"), among Wheeling-Pittsburgh Corporation (the
"Company"), the Guarantors named therein (the "Guarantors") and Bank One, N.A.,
as trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $ _______________ principal amount of
Notes which are evidenced by one or more 144A Global Notes and held with the
Depository in the name of_____________ (the "Transferor"). The Transferor has
requested a transfer of such beneficial interest in the Notes to a Person who
will take delivery thereof in the form of an equal principal amount of Notes
evidenced by one or more Regulation S Global Notes, which amount, immediately
after such transfer, is to be held with the Depository through Euroclear or
Cedel or both.
In connection with such request and in respect of such Notes,
the Transferor hereby certifies that such transfer has been effected in
compliance with the transfer restrictions applicable to the Global Notes and
pursuant to and in accordance with Rule 903 or Rule 904 under the United States
Securities Act of 1933, as amended (the "Securities Act"), and accordingly the
Transferor hereby further certifies that:
(1) The offer of the Notes was not made to a Person in the United
States;
(2) either:
(a) at the time the buy order was originated, the
transferee was outside the United States or the
Transferor and any Person acting on its behalf
reasonably believed and believes that the transferee
was outside the United States; or
B-1-1
<PAGE>
(b) the transaction was executed in, on or through the
facilities of a designated offshore securities market
and neither the Transferor nor any Person acting on
its behalf knows that the transaction was prearranged
with a buyer in the United States;
(3) no directed selling efforts have been made in contravention of
the requirements of Rule 904(b) of Regulation S;
(4) the transaction is not part of a plan or scheme to evade the
registration provisions of the Securities Act; and
(5) upon completion of the transaction, the beneficial interest
being transferred as described above is to be held with the
Depository through Euroclear, Cedel or another Participant.
Upon giving effect to this request to exchange a beneficial
interest in a 144A Global Note for a beneficial interest in a Regulation S
Global Note, the resulting beneficial interest shall be subject to the
restrictions on transfer applicable to Regulation S Global Notes pursuant to the
Indenture and the Securities Act.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and the Guarantors. Terms used
in this certificate and not otherwise defined in the Indenture have the meanings
set forth in Regulation S under the Securities Act.
[Insert Name of Transferor]
By:________________________
Name:
Title:
Dated:
cc: Wheeling-Pittsburgh Corporation
B-1-2
<PAGE>
Exhibit B-2
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM REGULATION S GLOBAL NOTE TO 144A GLOBAL NOTE
(Pursuant to Section 2.06(a)(ii) of the Indenture)
[REGISTRAR]
Re: 9 1/4% Senior Notes due 2007 of Wheeling-Pittsburgh
Corporation.
Reference is hereby made to the Indenture dated as of November
26, 1997 (the "Indenture"), among Wheeling-Pittsburgh Corporation (the
"Company"), the guarantors named therein (the "Guarantors") and Bank One, N.A.,
as trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $_________ principal amount of Notes
which are evidenced by one or more Regulation S Global Notes and held with the
Depository through Euroclear or Cedel in the name of ________ (the
"Transferor"). The Transferor has requested a transfer of such beneficial
interest in the Notes to a Person who will take delivery thereof in the form of
an equal principal amount of Notes evidenced by one or more 144A Global Notes,
to be held with the Depository.
In connection with such request and in respect of such Notes,
the Transferor hereby certifies that:
B-2-1
<PAGE>
[CHECK ONE]
/ / such transfer is being effected pursuant to and in accordance with Rule
144A under the United States Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, the Transferor hereby further
certifies that the Notes are being transferred to a Person that the
Transferor reasonably believes is purchasing the Notes for its own
account, or for one or more accounts with respect to which such Person
exercises sole investment discretion, and such Person and each such
account is a "qualified institutional buyer" within the meaning of Rule
144A in a transaction meeting the requirements of Rule 144A;
or
/ / such transfer is being effected pursuant to and in accordance with Rule
144 under the Securities Act;
or
/ / such transfer is being effected pursuant to an effective registration
statement under the Securities Act;
or
and such Notes are being transferred in compliance with any applicable blue sky
securities laws of any state of the United States or any other applicable
jurisdiction.
Upon giving effect to this request to exchange a beneficial
interest in Regulation S Global Notes for a beneficial interest in 144A Global
Notes, the resulting beneficial interest shall be subject to the restrictions on
transfer applicable to 144A Global Notes pursuant to the Indenture and the
Securities Act.
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and the Guarantors.
[Insert Name of Transferor]
By:________________________
Name:
Title:
Dated:
cc: Wheeling-Pittsburgh Corporation
B-2-2
<PAGE>
Exhibit B-3
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
OF DEFINITIVE NOTES
(Pursuant to Section 2.06(b) of the Indenture)
[REGISTRAR]
Re: 9 1/4% Senior Notes due 2007 of Wheeling-Pittsburgh
Corporation
Reference is hereby made to the Indenture dated as of November
26, 1997 (the "Indenture"), among Wheeling-Pittsburgh Corporation (the
"Company"), the guarantors named therein (the "Guarantors") and Bank One, N.A.,
as trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This relates to $________ principal amount of Notes which are
evidenced by one or more Definitive Notes in the name of _________ (the
"Transferor"). The Transferor has requested an exchange or transfer of such
Definitive Note(s) in the form of an equal principal amount of Notes evidenced
by one or more Definitive Notes, to be delivered to the Transferor or, in the
case of a transfer of such Notes, to such Person as the Transferor instructs the
Trustee.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange (the "Surrendered Notes"), the
Holder of such Surrendered Notes hereby certifies that:
B-3-1
<PAGE>
[CHECK ONE]
/ / the Surrendered Notes are being acquired for the Transferor's own
account, without transfer;
or
/ / the Surrendered Notes are being transferred to the Company or one of
its Subsidiaries;
or
/ / the Surrendered Notes are being transferred pursuant to and in
accordance with Rule 144A under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the Surrendered Notes are
being transferred to a Person that the Transferor reasonably believes
is purchasing the Surrendered Notes for its own account, or for one or
more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A, in
each case in a transaction meeting the requirements of Rule 144A;
or
/ / the Surrendered Notes are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
or
/ / the Surrendered Notes are being transferred pursuant to an exemption
under the Securities Act other than Rule 144A, Rule 144 or Rule 904 to
Person who is an Institutional Accredited Investor and the Transferor
further certifies that the Transfer complies with the transfer
restrictions applicable to beneficial interests in Global Notes and
Definitive Notes bearing the legend set forth in Section 2.06(f) of the
Indenture and the requirements of the exemption claimed, which
certification is supported by (a) if such transfer is in respect of a
principal amount of Notes at the time of Transfer of $100,000 or more,
a certificate executed by the Transferee in the form of Exhibit C to
the Indenture, or (b) if such Transfer is in respect of a principal
amount of Notes at the time of transfer of less than $100,000, (i) a
certificate executed in the form of Exhibit C to the Indenture and (ii)
an Opinion of Counsel provided by the Transferor or the Transferee (a
copy of which the Transferor has attached to this certification) in
form reasonably acceptable to the Company and to the Registrar, to the
effect that (1) such Transfer is in compliance with the Securities Act
and (2) such Transfer complies with any applicable blue sky securities
laws of any state of the United States;
or
B-3-2
<PAGE>
/ / the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
/ / such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A,
Rule 144, or Rule 904 and the Transferor hereby further certifies that
the Notes are being transferred in compliance with the transfer
restrictions applicable to beneficial interests in the Global Notes and
Definitive Notes bearing the legend set forth in Section 2.06(f) of the
Indenture and in accordance with the requirements of the exemption
claimed, which certification is supported by an Opinion of Counsel,
provided by the transferor or the transferee (a copy of which the
Transferor has attached to this certification) in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act and any applicable
blue sky laws of any state of the United States;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States or any
other applicable jurisdiction.
B-3-3
<PAGE>
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and the Guarantors.
[Insert Name of Transferor]
By:________________________
Name:
Title:
Dated:
cc: Wheeling-Pittsburgh Corporation
B-3-4
<PAGE>
Exhibit B-4
FORM OF CERTIFICATE FOR EXCHANGE OR REGISTRATION OF TRANSFER
FROM 144A GLOBAL NOTE OR REGULATION S
PERMANENT GLOBAL NOTE
TO DEFINITIVE NOTE
(Pursuant to Section 2.06(c) of the Indenture)
[REGISTRAR]
Re: 9 1/4% Senior Notes due 2007 of Wheeling-Pittsburgh
Corporation
Reference is hereby made to the Indenture, dated as of
November 26, 1997 (the "Indenture"), among Wheeling-Pittsburgh Corporation (the
"Company"), the guarantors named therein (the "Guarantors") and Bank One, N.A.,
as trustee (the "Trustee"). Capitalized terms used but not defined herein shall
have the meanings given to them in the Indenture.
This letter relates to $__________ principal amount of Notes
which are evidenced by a beneficial interest in one or more 144A Global Notes or
Regulation S Global Notes in the name of _______________ (the "Transferor"). The
Transferor has requested an exchange or transfer of such beneficial interest in
the form of an equal principal amount of Notes evidenced by one or more
Definitive Notes, to be delivered to the Transferor or, in the case of a
transfer of such Notes, to such Person as the Transferor instructs the Trustee.
In connection with such request and in respect of the Notes
surrendered to the Trustee herewith for exchange (the "Surrendered Notes"), the
Holder of such Surrendered Notes hereby certifies that:
B-4-1
<PAGE>
[CHECK ONE]
/ / the Surrendered Notes are being transferred to the beneficial owner of
such Notes;
or
/ / the Surrendered Notes are being transferred pursuant to and in
accordance with Rule 144A under the United States Securities Act of
1933, as amended (the "Securities Act"), and, accordingly, the
Transferor hereby further certifies that the Surrendered Notes are
being transferred to a Person that the Transferor reasonably believes
is purchasing the Surrendered Notes for its own account, or for one or
more accounts with respect to which such Person exercises sole
investment discretion, and such Person and each such account is a
"qualified institutional buyer" within the meaning of Rule 144A, in
each case in a transaction meeting they requirements of Rule 144A;
or
/ / the Surrendered Notes are being transferred in a transaction permitted
by Rule 144 under the Securities Act;
or
/ / the Surrendered Notes are being transferred pursuant to an effective
registration statement under the Securities Act;
or
/ / the Surrendered Notes are being transferred pursuant to an exemption
under the Securities Act other than Rule 144A, Rule 144 or Rule 904 to
a Person who is an Institutional Accredited Investor and the Transferor
further certifies that the Transfer complies with the transfer
restrictions applicable to beneficial interests in Global Notes and
Definitive Senior Notes bearing the legend set forth in Section 2.06(f)
of the Indenture and the requirements of the exemption claimed, which
certification is supported by (a) if such transfer is in respect of a
principal amount of Notes at the time of Transfer of $100,000 or more,
a certificate executed by the Transferee in the form of Exhibit C to
the Indenture, or (b) if such Transfer is in respect of a principal
amount of Notes at the time of transfer of less than $100,000, (i) a
certificate executed in the form of Exhibit C to the Indenture and (ii)
an Opinion of Counsel provided by the Transferor or the Transferee (a
copy of which the Transferor has attached to this certification) in
form reasonably satisfactory to the Company and to the Registrar, to
the effect that (1) such Transfer is in compliance with the Securities
Act and (2) such Transfer complies with any applicable blue sky
securities laws of any state of the United States;
or
B-4-2
<PAGE>
/ / such transfer is being effected pursuant to an exemption from the
registration requirements of the Securities Act other than Rule 144A,
Rule 144 or Rule 904, and the Transferor hereby further certifies that
the Notes are being transferred in compliance with the transfer
restrictions applicable to beneficial interests in the Global Notes and
Definitive Notes bearing the legend set forth in Section 2.06(f) of the
Indenture and in accordance with the requirements of the exemption
claimed, which certification is supported by an Opinion of Counsel,
provided by the transferor or the transferee (a copy of which the
Transferor has attached to this certification) in form reasonably
acceptable to the Company and to the Registrar, to the effect that such
transfer is in compliance with the Securities Act and any applicable
blue sky securities laws of any state of the United States;
and the Surrendered Notes are being transferred in compliance with any
applicable blue sky securities laws of any state of the United States or any
other applicable jurisdiction.
B-4-3
<PAGE>
This certificate and the statements contained herein are made
for your benefit and the benefit of the Company and the Guarantors.
[Insert Name of Transferor]
By:________________________
Name:
Title:
Dated:
cc: Wheeling-Pittsburgh Corporation
B-4-4
<PAGE>
Exhibit C
FORM OF CERTIFICATE TO BE DELIVERED BY
INSTITUTIONAL ACCREDITED INVESTORS
---------------, -----
Bank One, N.A., as Registrar
Attention: Corporate Trust Department
Ladies and Gentlemen:
We are delivering this letter in connection with the purchase
of 9 1/4% Senior Notes due 2007 (the "Notes") of Wheeling-Pittsburgh
Corporation, a Delaware corporation (the "Company").
(i) we are an "accredited investor" within the meaning of
Rule 501(a)(1), (2), (3) or (7) under the Securities Act of 1933, as
amended (the "Securities Act"), or an entity in which all of the equity
owners are accredited investors within the meaning of Rule 501(a)(1),
(2), (3) or (7) under the Securities Act (an "Institutional Accredited
Investor");
(ii) any purchase of Notes by us will be for our own account
or for the account of one or more other Institutional Accredited
Investors;
(iii) in the event that we purchase any Notes, we will acquire
Notes having a minimum purchase price of at least $100,000 for our own
account and for each separate account for which we are acting;
(iv) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks
of purchasing Notes;
(v) we are not acquiring Notes with a view to any
distribution thereof in a transaction that would violate the Securities
Act or the securities laws of any State of the United States or any
other applicable jurisdiction; provided that the disposition of our
property and the property of any accounts for which we are acting as
fiduciary shall remain at all times within our control; and
(vi) we have received a copy of the Offering Memorandum
relating to the initial offering of the Notes and acknowledge that we
have had access to such financial and other information, and have been
afforded the opportunity to ask such questions of representatives of
the Company and receive answers thereto, as we deem necessary in
connection with our decision to purchase Notes.
C-1
<PAGE>
We understand that the Notes are being offered in a
transaction not involving any public offering within the meaning of the
Securities Act and that the Notes have not been registered under the Securities
Act, and we agree, on our own behalf and on behalf of each account for which we
acquire any Notes, that such Notes may be offered, resold, pledged or otherwise
transferred only (i) to a Person whom we reasonably believe to be a qualified
institutional buyer (as defined in Rule 144A under the Securities Act) in a
transaction meeting the requirements of Rule 144A under the Securities Act, in a
transaction meeting the requirements of Rule 144 under the Securities Act,
outside the United States in a transaction meeting the requirements of Rule 904
under the Securities Act, or in accordance with another exemption from the
registration requirements of the Securities Act (and based upon an opinion of
counsel if the Company so requests), (ii) to the Company or (iii) pursuant to an
effective registration statement under the Securities Act, and in each case, in
accordance with any applicable securities laws of any State of the United States
or any other applicable jurisdiction. We understand that the registrar will not
be required to accept for registration of transfer any Notes, except upon
presentation of evidence satisfactory to the Company that the foregoing
restrictions on transfer have been complied with.
We acknowledge that you and the Company will rely upon our
confirmations, acknowledgements and agreements set forth herein, and we agree to
notify you promptly in writing if any of our representations or warranties
herein ceases to be accurate and complete.
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
___________________________
[Name of Purchaser]
By:________________________
Name:
Title:
Address:
C-2
<PAGE>
Exhibit D
SUBSIDIARY GUARANTEE
Subject to Section 10.05 of the Indenture, each Guarantor
hereby, jointly and severally, unconditionally guarantees to each Holder of a
Note authenticated and delivered by the Trustee and to the Trustee and its
successors and assigns, irrespective of the validity and enforceability of the
Indenture, the Notes and the Obligations of the Company under the Notes or under
the Indenture, that: (a) the principal of, interest, premium, if any, and
Liquidated Damages, if any, on the Notes will be promptly paid in full when due,
subject to any applicable grace period, whether at maturity, by acceleration,
redemption or otherwise, and interest on overdue principal (to the extent
permitted by law), interest on any interest, if any, premium, if any, and
Liquidated Damages, if any, on the Notes and all other payment Obligations of
the Company to the Holders or the Trustee under the Indenture or under the Notes
will be promptly paid in full and performed, all in accordance with the terms
thereof; and (b) in case of any extension of time of payment or renewal of any
Notes or any of such other Obligations, the same will be promptly paid in full
when due or performed in accordance with the terms of the extension or renewal,
subject to any applicable grace period, whether at stated maturity, by
acceleration, redemption or otherwise. Failing payment when so due of any amount
so guaranteed or any performance so guaranteed for whatever reason, the
Guarantors will be jointly and severally obligated to pay the same immediately.
An Event of Default under the Indenture or the Notes shall constitute an event
of default under this Subsidiary Guarantee, and shall entitle the Holders to
accelerate the Obligations of the Guarantors hereunder in the same manner and to
the same extent as the Obligations of the Company. The Guarantors hereby agree
that their Obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Notes or the Indenture, the
absence of any action to enforce the same, any waiver or consent by any Holder
with respect to any provisions hereof or thereof, the recovery of any judgment
against the Company, any action to enforce the same or any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
Guarantor. Each Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or bankruptcy
of the Company, any right to require a proceeding first against the Company,
protest, notice and all demands whatsoever and covenants that this Subsidiary
Guarantee will not be discharged except by complete performance of the
Obligations contained in the Notes and the Indenture. If any Holder or the
Trustee is required by any court or otherwise to return to the Company, the
Guarantors, or any Note Custodian, Trustee, liquidator or other similar official
acting in relation to either the Company or the Guarantors, any amount paid by
the Company or any Guarantor to the Trustee or such Holder, this Subsidiary
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Guarantor agrees that it shall not be entitled to, and
hereby waives, any right of subrogation in relation to the Holders in respect of
any Obligations guaranteed hereby. Each Guarantor further agrees that, as
between the Guarantors, on the one hand, and the Holders and the Trustee, on the
other hand, (a) the maturity of the Obligations guaranteed hereby may be
accelerated as provided in Article 6 of the Indenture for the purposes of this
Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed thereby,
and (b) in the event of any declaration of acceleration of such Obligations as
provided in Article 6 of the Indenture, such Obligations (whether or not due and
payable) shall forthwith become due and
D-1
<PAGE>
payable by the Guarantor for the purpose of this Subsidiary Guarantee. The
Guarantors shall have the right to seek contribution from any non-paying
Guarantor so long as the exercise of such right does not impair the rights of
the Holders under the Subsidiary Guarantees.
The obligations of the Guarantor to the Holders and to the
Trustee pursuant to this Subsidiary Guarantee and the Indenture are expressly
set forth in Article 10 of the Indenture, and reference is hereby made to such
Indenture for the precise terms of this Subsidiary Guarantee. The terms of
Articles 10 of the Indenture are incorporated herein by reference. This
Subsidiary Guarantee is subject to release as and to the extent provided in
Sections 10.03 and 10.04 of the Indenture.
This is a continuing Guarantee and shall remain in full force
and effect and shall be binding upon each Guarantor and its respective
successors and assigns to the extent set forth in the Indenture until full and
final payment of all of the Company's Obligations under the Notes and the
Indenture and shall inure to the benefit of the successors and assigns of the
Trustee and the Holders and, in the event of any transfer or assignment of
rights by any Holder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such transferee
or assignee, all subject to the terms and conditions hereof. This is a
Subsidiary Guarantee of payment and not a guarantee of collection.
This Subsidiary Guarantee shall not be valid or obligatory for
any purpose until the certificate of authentication on the Note upon which this
Subsidiary Guarantee is noted shall have been executed by the Trustee or an
authenticating agent under the Indenture by the manual signature of one of its
authorized officers.
For purposes hereof, each Guarantor's liability shall be
limited to the lesser of (i) the aggregate amount of the Obligations of the
Company under the Notes and the Indenture and (ii) the amount, if any, which
would not have (A) rendered such Guarantor "insolvent" (as such term is defined
in the Bankruptcy Law and in the Debtor and Creditor Law of the State of New
York) or (B) left such Guarantor with unreasonably small capital at the time its
Subsidiary Guarantee of the Notes was entered into; provided that, it will be a
presumption in any lawsuit or other proceeding in which a Guarantor is a party
that the amount guaranteed pursuant to the Subsidiary Guarantee is the amount
set forth in clause (i) above unless any creditor, or representative of
creditors of such Guarantor, or debtor in possession or trustee in bankruptcy of
such Guarantor, otherwise proves in such a lawsuit that the aggregate liability
of the Guarantor is limited to the amount set forth in clause (ii) above. The
Indenture provides that, in making any determination as to the solvency or
sufficiency of capital of a Guarantor in accordance with the previous sentence,
the right of such Guarantors to contribution from other Guarantors and any other
rights such Guarantors may have, contractual or otherwise, shall be taken into
account.
D-2
<PAGE>
Capitalized terms used herein have the same meanings given in
the Indenture unless otherwise indicated.
WHEELING-PITTSBURGH STEEL CORPORATION
By:__________________________________
Name:
Title:
CONSUMERS MINING COMPANY
By:__________________________________
Name:
Title:
WHEELING-EMPIRE COMPANY
By:__________________________________
Name:
Title:
MINGO OXYGEN COMPANY
By:__________________________________
Name:
Title:
PITTSBURG-CANFIELD CORPORATION
By:__________________________________
Name:
Title:
WHEELING CONSTRUCTION PRODUCTS
By:__________________________________
Name:
Title:
D-3
<PAGE>
WP STEEL VENTURE CORPORATION
By:__________________________________
Name:
Title:
CHAMPION METAL PRODUCTS, INC.
By:__________________________________
Name:
Title:
D-4
<PAGE>
Exhibit E
================================================================================
WHEELING-PITTSBURGH CORPORATION
AND
THE GUARANTORS NAMED HEREIN
----------------------------------------
SERIES A AND SERIES B
9 1/4% SENIOR NOTES DUE 2007
----------------------------------------
-------------------
FORM OF SUPPLEMENTAL INDENTURE
AND AMENDMENT -- SUBSIDIARY GUARANTEE
DATED AS OF ________ ___, ____
-------------------
Bank One, N.A.
Trustee
================================================================================
E-1
<PAGE>
This Supplemental Indenture, dated as of __________ ___, ____,
among Wheeling-Pittsburgh Corporation, a Delaware corporation (the "Company"),
each of the parties identified under the caption "Guarantors" on the signature
pages hereto (the "Guarantors") and Bank One, N.A., a national banking
association, as Trustee.
RECITALS
WHEREAS, the Company, the Guarantors and the Trustee entered
into an Indenture, dated as of November 26, 1997 (the "Indenture"), pursuant to
which the Company issued $275,000,000 in principal amount of 9 1/4% Senior Notes
due 2007 (the "Notes"); and
WHEREAS, Section 9.01(e) of the Indenture provides that the
Company and the Trustee may amend or supplement the Indenture in order to
execute a guarantee (a "Subsidiary Guarantee") to comply with Section 10.02
thereof without the consent of the Holders of the Notes; and
WHEREAS, all acts and things prescribed by the Indenture, by
law and by the Certificate of Incorporation and the Bylaws of the Company, of
the Guarantors and of the Trustee necessary to make this Supplemental Indenture
a valid instrument legally binding on the Company, the Guarantors and the
Trustee, in accordance with its terms, have been duly done and performed;
NOW, THEREFORE, to comply with the provisions of the Indenture
and in consideration of the above premises, the Company, the Guarantors and the
Trustee covenant and agree for the equal and proportionate benefit of the
respective Holders of the Notes as follows:
ARTICLE 1
Section 1.01. This Supplemental Indenture is supplemental to
the Indenture and does and shall be deemed to form a part of, and shall be
construed in connection with and as part of, the Indenture for any and all
purposes.
Section 1.02. This Supplemental Indenture shall become
effective immediately upon its execution and delivery by each of the Company,
the Guarantors and the Trustee.
ARTICLE 2
From this date, in accordance with Section 10.02 and by
executing this Supplemental Indenture and the accompanying Subsidiary Guarantee
(a copy of which is attached hereto), the Guarantors whose signatures appear
below are subject to the provisions of the Indenture to the extent provided for
in Article 10 thereunder.
E-2
<PAGE>
ARTICLE 3
Section 3.01. Except as specifically modified herein, the
Indenture and the Notes are in all respects ratified and confirmed (mutatis
mutandis) and shall remain in full force and effect in accordance with their
terms with all capitalized terms used herein without definition having the same
respective meanings ascribed to them as in the Indenture.
Section 3.02. Except as otherwise expressly provided herein,
no duties, responsibilities or liabilities are assumed, or shall be construed to
be assumed, by the Trustee by reason of this Supplemental Indenture. This
Supplemental Indenture is executed and accepted by the Trustee subject to all
the terms and conditions set forth in the Indenture with the same force and
effect as if those terms and conditions were repeated at length herein and made
applicable to the Trustee with respect hereto.
Section 3.03. THE INTERNAL LAW OF THE STATE OF NEW YORK
SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE,
THE NOTES AND THE SUBSIDIARY GUARANTEES.
Section 3.04. The parties may sign any number of copies of
this Supplemental Indenture. Each signed copy shall be an original, but all of
such executed copies together shall represent the same agreement.
[SIGNATURE ON FOLLOWING PAGES]
E-3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the date first written above.
WHEELING-PITTSBURGH CORPORATION
By:_______________________________
Name:
Title:
[GUARANTORS]
[ ]
By:_______________________________
Name:
Title:
Bank One, N.A., as trustee
By:_______________________________
Name: Ted J. Kravits
Title: Authorized Signatory
E-4
<PAGE>
================================================================================
WHEELING-PITTSBURGH CORPORATION
AND
THE GUARANTORS NAMED ON THE SIGNATURE PAGES HERETO
SERIES A AND SERIES B
9 1/4% SENIOR NOTES DUE 2007
-----------------
INDENTURE
Dated as of November 26, 1997
-----------------
-----------------
Bank One, N.A.
-----------------
Trustee
================================================================================
<PAGE>
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
----------- -----------------
310 (a)(1)................................................ 7.10
(a)(2)................................................ 7.10
(a)(3)................................................ N.A.
(a)(4)................................................ N.A.
(a)(5)................................................ 7.10
(b)................................................... 7.10
(c)................................................... N.A.
311 (a)................................................... 7.11
(b)................................................... 7.11
(c)................................................... N.A.
312 (a)................................................... 2.05
(b)................................................... 11.03
(c)................................................... 11.03
313 (a)................................................... 7.06
(b)(1)................................................ N.A.
(b)(2)................................................ 7.06;7.07
(c)................................................... 7.06;11.02
(d)................................................... 7.06
314 (a)................................................... 4.03
(b)................................................... N.A.
(c)(1)................................................ 11.04
(c)(2)................................................ 11.04
(c)(3)................................................ N.A.
(d)................................................... N.A.
(e)................................................... 11.05
(f)................................................... N.A.
315 (a)................................................... 7.01
(b)................................................... 7.05,11.02
(c)................................................... 7.01
(d)................................................... 7.01
(e)................................................... 6.11
316 (a)(last sentence).................................... 2.09
(a)(1)(A)............................................. 6.05
(a)(1)(B)............................................. 6.04
(a)(2)................................................ N.A.
(b)................................................... 6.07
(c)................................................... N.A.
317 (a)(1)................................................ 6.08
(a)(2)................................................ 6.09
(b) .................................................. 2.04
318 (a)................................................... 11.01
(b)................................................... N.A.
(c)................................................... 11.01
N.A. means not applicable.
*This Cross-Reference Table is not part of the Indenture.
i
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
Section 1.01. Definitions.................................................1
Section 1.02. Other Definitions..........................................19
Section 1.03. Incorporation by Reference of Trust Indenture Act..........19
Section 1.04. Rules of Construction......................................19
ARTICLE 2
THE NOTES
Section 2.01. Form and Dating............................................20
Section 2.02. Execution and Authentication...............................22
Section 2.03. Registrar and Paying Agent.................................23
Section 2.04. Paying Agent to Hold Money in Trust........................23
Section 2.05. Holder Lists...............................................24
Section 2.06. Transfer and Exchange......................................24
Section 2.07. Replacement Notes..........................................33
Section 2.08. Outstanding Notes..........................................33
Section 2.09. Treasury Notes.............................................34
Section 2.10. Temporary Notes............................................34
Section 2.11. Cancellation...............................................34
Section 2.12. Defaulted Interest.........................................35
ARTICLE 3
REDEMPTION AND PREPAYMENT
Section 3.01. Notices to Trustee.........................................35
Section 3.02. Selection of Notes to Be Redeemed..........................35
Section 3.03. Notice of Redemption.......................................36
Section 3.04. Effect of Notice of Redemption.............................37
Section 3.05. Deposit of Redemption Price................................37
Section 3.06. Notes Redeemed in Part.....................................37
Section 3.07. Optional Redemption........................................37
Section 3.08. Mandatory Redemption.......................................38
Section 3.09. Offer to Purchase by Application of Excess Proceeds........38
i
<PAGE>
Page
----
ARTICLE 4
COVENANTS
Section 4.01. Payment of Notes...........................................40
Section 4.02. Maintenance of Office or Agency............................41
Section 4.03. Reports....................................................41
Section 4.04. Compliance Certificate.....................................42
Section 4.05. Taxes......................................................43
Section 4.06. Stay, Extension and Usury Laws.............................43
Section 4.07. Restricted Payments........................................43
Section 4.08. Dividend and Other Payment Restrictions Affecting
Subsidiaries...............................................45
Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.46
Section 4.10. Asset Sales................................................48
Section 4.11. Transactions with Affiliates...............................49
Section 4.12. Liens......................................................50
Section 4.13. Additional Subsidiary Guarantees...........................51
Section 4.14. Corporate Existence........................................51
Section 4.15. Offer to Repurchase Upon Change of Control.................51
Section 4.16. Sale and Leaseback Transactions............................52
Section 4.17. Issuances and Sales of Capital Stock of Subsidiaries.......53
Section 4.18. Payment for Consent........................................53
ARTICLE 5
SUCCESSORS
Section 5.01. Merger, Consolidation, or Sale of Assets...................54
Section 5.02. Successor Corporation Substituted..........................54
ARTICLE 6
DEFAULTS AND REMEDIES
Section 6.01. Events of Default..........................................55
Section 6.02. Acceleration...............................................57
Section 6.03. Other Remedies.............................................57
Section 6.04. Waiver of Past Defaults....................................58
Section 6.05. Control by Majority........................................58
Section 6.06. Limitation on Suits........................................58
Section 6.07. Rights of Holders of Notes to Receive Payment..............59
Section 6.08. Collection Suit by Trustee.................................59
Section 6.09. Trustee May File Proofs of Claim...........................59
Section 6.10. Priorities.................................................60
Section 6.11. Undertaking for Costs......................................60
ii
<PAGE>
Page
----
ARTICLE 7
TRUSTEE
Section 7.01. Duties of Trustee..........................................61
Section 7.02. Rights of Trustee..........................................62
Section 7.03. Individual Rights of Trustee...............................63
Section 7.04. Trustee's Disclaimer.......................................63
Section 7.05. Notice of Defaults.........................................63
Section 7.06. Reports by Trustee to Holders of the Notes.................63
Section 7.07. Compensation and Indemnity.................................64
Section 7.08. Replacement of Trustee.....................................65
Section 7.09. Successor Trustee by Merger, etc...........................66
Section 7.10. Eligibility; Disqualification..............................66
Section 7.11. Preferential Collection of Claims Against Company..........66
ARTICLE 8
LEGAL DEFEASANCE AND COVENANT DEFEASANCE
Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance...66
Section 8.02. Legal Defeasance and Discharge.............................66
Section 8.03. Covenant Defeasance........................................67
Section 8.04. Conditions to Legal or Covenant Defeasance.................68
Section 8.05. Deposited Money and Government Securities to be Held in
Trust; Other Miscellaneous Provisions......................69
Section 8.06. Repayment to Company.......................................70
Section 8.07. Reinstatement..............................................70
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
Section 9.01. Without Consent of Holders of Notes........................70
Section 9.02. With Consent of Holders of Notes...........................71
Section 9.03. Compliance with Trust Indenture Act........................73
Section 9.04. Revocation and Effect of Consents..........................73
Section 9.05. Notation on or Exchange of Notes...........................73
Section 9.06. Trustee to Sign Amendments, etc............................73
ARTICLE 10
GUARANTEE OF NOTES
Section 10.01. Subsidiary Guarantee......................................74
Section 10.02. Execution and Delivery of Subsidiary Guarantee............75
Section 10.03. Guarantors May Consolidate, etc., on Certain Terms........75
Section 10.04. Releases Following Sale of Assets.........................76
iii
<PAGE>
Page
----
Section 10.05. Limitation on Guarantor Liability.........................77
Section 10.06. "Trustee" to Include Paying Agent.........................77
Section 10.07. Priority of Subsidiary Guarantee..........................77
ARTICLE 11
MISCELLANEOUS
Section 11.01. Trust Indenture Act Controls..............................78
Section 11.02. Notices...................................................78
Section 11.03. Communication by Holders of Notes with Other
Holders of Notes..........................................79
Section 11.04. Certificate and Opinion as to Conditions Precedent........79
Section 11.05. Statements Required in Certificate or Opinion.............80
Section 11.06. Rules by Trustee and Agents...............................80
Section 11.07. No Personal Liability of Directors, Officers,
Employees and Stockholders................................80
Section 11.08. Governing Law.............................................81
Section 11.09. No Adverse Interpretation of Other Agreements.............81
Section 11.10. Successors................................................81
Section 11.11. Severability..............................................81
Section 11.12. Counterpart Originals.....................................81
Section 11.13. Table of Contents, Headings, etc..........................81
EXHIBITS
Exhibit A-1 Form of Note............................................A-1-1
Exhibit A-2 Form of Regulation S Temporary Note.....................A-2-1
Exhibit B-1 Certificate of Transferor from 144A Global
Note to Regulation S Global Note........................B-1-1
Exhibit B-2 Certificate of Transferor from Regulation S
Global Note to 144A Global Note.........................B-2-1
Exhibit B-3 Certificate of Transferor of Definitive Notes...........B-3-1
Exhibit B-4 Certificate of Transferor from Global Note to
Definitive Note.........................................B-4-1
Exhibit C Certificate of Institutional Accredited Investor........C-1
Exhibit D Form of Subsidiary Guarantee............................D-1
Exhibit E Form of Supplemental Indenture..........................E-1
iv
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Prospectus constituting part of this
Registration Statement on Form S-4 of Wheeling-Pittsburgh Corporation of our
report dated February 10, 1998 relating to the financial statements of
Wheeling-Pittsburgh Corporation and its subsidiaries, which appears in such
Prospectus. We also consent to the reference to us under the headings "Experts,"
"Summary Consolidated Financial Data," and "Selected Consolidated Financial
Data" in such Prospectus. However, it should be noted that Price Waterhouse LLP
has not prepared or certified such "Summary Consolidated Financial Data" or such
"Selected Consolidated Financial Data."
Price Waterhouse LLP
Pittsburgh, Pennsylvania
March 4, 1998
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Amendment No. 1 to
Form S-4 (File No. 333-43867) for Wheeling-Pittsburgh Corporation's $275 million
9.25% Senior Notes of our report dated February 12, 1998, on our audits of the
financial statements of Wheeling- Nisshin, Inc. We also consent to the
references to our firm under the caption "Experts."
Coopers & Lybrand LLP
Pittsburgh, Pennsylvania
March 4, 1998
Registration No. 33-60067
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
BANK ONE, N.A. f/k/a BANK ONE, COLUMBUS, N.A.
Not Applicable 31-4148768
(State of Incorporation (I.R.S. Employer
if not a national bank) Identification No.)
100 East Broad Street, Columbus, Ohio 43271-0181
(Address of trustee's principal (Zip Code) executive offices)
Jon Beacham
c/o Bank One Trust Company, NA
100 East Broad Street
Columbus, Ohio 43271-0181
(614) 248-6229
(Name, address and telephone number of agent for service)
Wheeling-Pittsburgh Corporation
(Exact name of obligor as specified in its charter)
Delaware 55-0309927
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
1134 Market Street 26003
Wheeling, West Virginia (Zip Code)
(Address of principal executive
office)
9 1/4% SENIOR EXCHANGE NOTES DUE 2007
(Title of the Indenture securities)
<PAGE>
GENERAL
1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Comptroller of the Currency, Washington, D.C.
Federal Reserve Bank of Cleveland, Cleveland, Ohio
Federal Deposit Insurance Corporation, Washington, D.C.
The Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
The trustee is authorized to exercise corporate trust
powers.
2. Affiliations with Obligor and Underwriters.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
The obligor is not an affiliate of the trustee.
16. List of Exhibits
List below all exhibits filed as a part of this statement of
eligibility and qualification. (Exhibits identified in parentheses, on
file with the Commission, are incorporated herein by reference as
exhibits hereto.)
Exhibit 1 - A copy of the Articles of Association of the trustee as now in
effect.
Exhibit 2 - A copy of the Certificate of Authority of the trustee to commence
business, see Exhibit 2 to Form T-1, filed in connection with Form S-3 relating
to Wheeling-Pittsburgh Corporation 9 3/8% Senior Notes due 2003, Securities and
Exchange Commission File No. 33-50709.
Exhibit 3 - A copy of the Authorization of the trustee to exercise corporate
trust powers, see Exhibit 3 to Form T-1, filed in connection with Form S-3
relating to Wheeling-Pittsburgh Corporation 9 3/8% Senior Notes due 2003,
Securities and Exchange Commission File No. 33-50709.
Exhibit 4 - A copy of the Bylaws of the trustee as now in effect.
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Exhibit 5 - Not applicable.
Exhibit 6 - The consent of the trustee required by Section 321(b) of the Trust
Indenture Act of 1939, as amended.
Exhibit 7 - Report of Condition of the trustee as of the close of business on
June 30, 1997, published pursuant to the requirements of the Comptroller of the
Company, see Exhibit 7 to Form T-1, filed in connection with Form S-4 relating
to National Energy Group, Inc.10 3/4% Senior Notes due 2006, Securities and
Exchange Commission File No. 333-38075.
Exhibit 8 - Not applicable.
Exhibit 9 - Not applicable.
Items 3 through 15 are not answered pursuant to General Instruction B which
requires responses to Item 1, 2 and 16 only, if the obligor is not in default.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the Trustee, Bank One, NA, a national banking association organized
under the National Banking Act, has duly caused this statement of eligibility
and qualification to be signed on its behalf by the undersigned, thereunto duly
authorized, all in Columbus, Ohio, on January 12, 1998.
Bank One, NA
By: /s/ Jon Beacham
-------------------------------
Jon Beacham
Authorized Signer
<PAGE>
Exhibit 1
BANK ONE, COLUMBUS, NATIONAL ASSOCIATION
ARTICLES OF ASSOCIATION
For the purpose of organizing an association to carry on the business of
banking under the laws of the United States, the following Articles of
Association are entered into:
FIRST. The title of this Association shall be BANK ONE, COLUMBUS, NATIONAL
ASSOCIATION.
SECOND. The main office of the Association shall be in Columbus, County of
Franklin, State of Ohio. The general business of the Association shall be
conducted at its main office and its branches.
THIRD. The Board of Directors of this Association shall consist of not
less than five nor more than twenty-five Directors, the exact number of
Directors within such minimum and maximum limits to be fixed and determined from
time-to-time by resolution of the shareholders at any annual or special meeting
thereof, provided, however, that the Board of Directors, by resolution of a
majority thereof, shall be authorized to increase the number of its members by
not more than two between regular meetings of the shareholders. Each Director,
during the full term of his directorship, shall own, as qualifying shares, the
minimum number of shares of either this Association or of its parent bank
holding company in accordance with the provisions of applicable law. Unless
otherwise provided by the laws of the United States, any vacancy in the Board of
Directors for any reason, including an increase in the number thereof, may be
filled by action of the Board of Directors.
<PAGE>
FOURTH. The annual meeting of the shareholders for the election of
Directors and the transaction of whatever other business may be brought before
said meeting shall be held at the main office of this Association or such other
place as the Board of Directors may designate, on the day of each year specified
therefor in the By-Laws, but if no election is held on that day, it may be held
on any subsequent business day according to the provisions of law; and all
elections shall be held according to such lawful regulations as may be
prescribed by the Board of Directors.
FIFTH. The authorized amount of capital stock of this Association shall be
2,073,750 shares of common stock of the par value of Ten Dollars ($10) each; but
said capital stock may be increased or decreased from time-to-time, in
accordance with the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the
Association shall have the preemptive or preferential right of subscription to
any share of any class of stock of this Association, whether now or hereafter
authorized or to any obligations convertible into stock of this Association,
issued or sold, nor any right of subscription to any thereof other than such, if
any, as the Board of Directors, in its discretion, may from time-to-time
determine and at such price as the Board of Directors may from time-to-time fix.
This Association, at any time and from time-to-time, may authorize
and issue debt obligations, whether or not subordinated, without the approval of
the shareholders.
SIXTH. The Board of Directors shall appoint one of its members President
of the Association, who shall be Chairman of the Board, unless the Board
appoints another director to be the Chairman. The Board of Directors shall have
the power to appoint one or more Vice Presidents and to appoint a Secretary and
such other officers and employees as may be required to transact the business of
this Association.
The Board of Directors shall have the power to define the duties
of the officers and employees of this Association; to fix the salaries to be
paid to them; to dismiss them; to require bonds from them and to fix the penalty
thereof; to regulate the manner in which any increase of the capital of this
Association shall be made; to manage and administer
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the business and affairs of this Association; to make all By-Laws that it may be
lawful for them to make; and generally to do and perform all acts that it may be
legal for a Board of Directors to do and perform.
SEVENTH. The Board of Directors shall have the power to change the
location of the main office to any other place within the limits of the City of
Columbus, Ohio, without the approval of the shareholders but subject to the
approval of the Comptroller of the Currency; and shall have the power to
establish or change the location of any branch or branches of this Association
to any other location, without the approval of the shareholders but subject to
the approval of the Comptroller of the Currency.
EIGHTH. The corporate existence of this Association shall continue until
terminated in accordance with the laws of the United States.
NINTH. The Board of Directors of this Association, or any three or more
shareholders owning, in the aggregate, not less than 10 percent of the stock of
this Association, may call a special meeting of shareholders at any time. Unless
otherwise provided by the laws of the United States, a notice of the time, place
and purpose of every annual and special meeting of the shareholders shall be
given by first-class mail, postage prepaid, mailed at least ten days prior to
the date of such meeting to each shareholder of record at his address as shown
upon the books of this Association.
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TENTH. Every person who is or was a Director, officer or employee of the
Association or of any other corporation which he served as a Director, officer
or employee at the request of the Association as part of his regularly assigned
duties may be indemnified by the Association in accordance with the provisions
of this paragraph against all liability (including, without limitation,
judgments, fines, penalties and settlements) and all reasonable expenses
(including, without limitation, attorneys' fees and investigative expenses) that
may be incurred or paid by him in connection with any claim, action, suit or
proceeding, whether civil, criminal or administrative (all referred to hereafter
in this paragraphs as "Claims") or in connection with any appeal relating
thereto in which he may become involved as a party or otherwise or with which he
may be threatened by reason of his being or having been a Director, officer or
employee of the Association or such other corporation, or by reason of any
action taken or omitted by him in his capacity as such Director, officer or
employee, whether or not he continues to be such at the time such liability or
expenses are incurred, provided that nothing contained in this paragraph shall
be construed to permit indemnification of any such person who is adjudged guilty
of, or liable for, willful misconduct, gross neglect of duty or criminal acts,
unless, at the time such indemnification is sought, such indemnification in such
instance is permissible under applicable law and regulations, including
published rulings of the Comptroller of the Currency or other appropriate
supervisory or regulatory authority, and provided further that there shall be no
indemnification of directors, officers, or employees against expenses,
penalties, or other payments incurred in an administrative proceeding or action
instituted by an appropriate regulatory agency which proceeding or action
results in a final order assessing civil money penalties or requiring
affirmative action by an individual or individuals n the form of payments to the
Association. Every person who may be indemnified under the provisions of this
paragraph and who has been wholly successful on the merits with respect to any
Claim shall be entitled to indemnification as of right. Except as provided in
the preceding sentence, any indemnification under this paragraph shall be at the
sole discretion of the Board of Directors and shall be made only if the Board of
Directors or the Executive Committee acting by a quorum consisting of
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Directors who are not parties to such Claim shall find or if independent legal
counsel (who may be the regular counsel of the Association) selected by the
Board of Directors or Executive Committee whether or not a disinterested quorum
exists shall render their opinion that in view of all of the circumstances then
surrounding the Claim, such indemnification is equitable and in the best
interests of the Association. Among the circumstances to be taken into
consideration in arriving at such a finding or opinion is the existence or
non-existence of a contract of insurance or indemnity under which the
Association would be wholly or partially reimbursed for such indemnification,
but the existence or non-existence of such insurance is not the sole
circumstance to be considered nor shall it be wholly determinative of whether
such indemnification shall be made. In addition to such finding or opinion, no
indemnification under this paragraph shall be made unless the Board of Directors
or the Executive Committee acting by a quorum consisting of Directors who are
not parties to such Claim shall find or if independent legal counsel (who may be
the regular counsel of the Association) selected by the Board of Directors or
Executive Committee whether or not a disinterested quorum exists shall render
their opinion that the Director, officer or employee acted in good faith in what
he reasonably believed to be the best interests of the Association or such other
corporation and further in the case of any criminal action or proceeding, that
the Director, officer or employee reasonably believed his conduct to be lawful.
Determination of any Claim by judgment adverse to a Director, officer or
employee by settlement with or without Court approval or conviction upon a plea
of guilty or of nolocontendere or its equivalent shall not create a presumption
that a Director, officer or employee failed to meet the standards of conduct set
forth in this paragraph. Expenses incurred with respect to any Claim may be
advanced by the Association prior to the final disposition thereof upon receipt
of an undertaking satisfactory to the Association by or on behalf of the
recipient to repay such amount unless it is ultimately determined that he is
entitled to indemnification under this paragraph. The rights of indemnification
provided in this paragraph shall be in addition to any rights to which any
Director, officer or employee may otherwise be entitled by contract or as a
matter of law.
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<PAGE>
Every person who shall act as a Director, officer or employee of this
Association shall be conclusively presumed to be doing so in reliance upon the
right of indemnification provided for in this paragraph.
ELEVENTH. These Articles of Association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this Association, unless the vote of the holders of a
greater amount of stock is required by law, and in that case by the vote of the
holders of such greater amount.
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<PAGE>
Exhibit 4
BY-LAWS
OF
BANK ONE, COLUMBUS, NATIONAL ASSOCIATION
ARTICLE I
MEETING OF SHAREHOLDERS
SECTION 1.01. ANNUAL MEETING. The regular annual meeting of the Shareholders of
the Bank for the election of Directors and for the transaction of such business
as may properly come before the meeting shall be held at its main banking house,
or other convenient place duly authorized by the Board of Directors, on the
third Monday of January of each year, or on the next succeeding banking day, if
the day fixed falls on a legal holiday. If from any cause, an election of
directors is not made on the day fixed for the regular meeting of shareholders
or, in the event of a legal holiday, on the next succeeding banking day, the
Board of Directors shall order the election to be held on some subsequent day,
as soon thereafter as practicable, according to the provisions of law; and
notice thereof shall be given in the manner herein provided for the annual
meeting. Notice of such annual meeting shall be given by or under the direction
of the Secretary or such other officer as may be designated by the Chief
Executive Officer by first-class mail, postage prepaid, to all shareholders of
record of the Bank at their respective addresses as shown upon the books of the
Bank mailed not less than ten days prior to the date fixed for such meeting.
SECTION 1.02. SPECIAL MEETINGS. A special meeting of the shareholders of this
Bank may be called at any time by the Board of Directors or by any three or more
shareholders owning, in the aggregate, not less than ten percent of the stock of
this Bank. The notice of any special meeting of the shareholders called by the
Board of Directors, stating the time, place and purpose of the meeting, shall be
given by or
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<PAGE>
under the direction of the Secretary, or such other officer as is designated by
the Chief Executive Officer, by first-class mail, postage prepaid, to all
shareholders of record of the Bank at their respective addresses as shown upon
the books of the Bank, mailed not less than ten days prior to the date fixed for
such meeting.
Any special meeting of shareholders shall be conducted and its proceedings
recorded in the manner prescribed in these By-Laws for annual meetings of
shareholders.
SECTION 1.03. SECRETARY OF SHAREHOLDERS' MEETING. The Board of Directors may
designate a person to be the Secretary of the meetings of shareholders. In the
absence of a presiding officer, as designated in these By-Laws, the Board of
Directors may designate a person to act as the presiding officer. In the event
the Board of Directors fails to designate a person to preside at a meeting of
shareholders and a Secretary of such meeting, the shareholders present or
represented shall elect a person to preside and a person to serve as Secretary
of the meeting.
The Secretary of the meetings of shareholders shall cause the returns made
by the judges and election and other proceedings to be recorded in the minute
book of the Bank. The presiding officer shall notify the directors-elect of
their election and to meet forthwith for the organization of the new board.
The minutes of the meeting shall be signed by the presiding officer and
the Secretary designated for the meeting.
SECTION 1.04. JUDGES OF ELECTION. The Board of Directors may appoint as many as
three shareholders to be judges of the election, who shall hold and conduct the
same, and who shall, after the election has been held, notify, in writing over
their signatures, the secretary of the shareholders' meeting of the result
thereof and the names of the Directors elected; provided, however, that upon
failure for any reason of any judge or judges of election, so appointed by the
directors, to serve, the presiding
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officer of the meeting shall appoint other shareholders or their proxies to fill
the vacancies. The judges of election at the request of the chairman of the
meeting, shall act as tellers of any other vote by ballot taken at such meeting,
and shall notify, in writing over their signatures, the secretary of the Board
of Directors of the result thereof.
SECTION 1.05. PROXIES. In all elections of Directors, each shareholder of
record, who is qualified to vote under the provisions of Federal Law, shall have
the right to vote the number of shares of record in his name for as many persons
as there are Directors to be elected, or to cumulate such shares as provided by
Federal Law. In deciding all other questions at meetings of shareholders, each
shareholder shall be entitled to one vote on each share of stock of record in
his name. Shareholders may vote by proxy duly authorized in writing. All proxies
used at the annual meeting shall be secured for that meeting only, or any
adjournment thereof, and shall be dated, and if not dated by the shareholder,
shall be dated as of the date of receipt thereof. No officer or employee of this
Bank may act as proxy.
SECTION 1.06. QUORUM. Holders of record of a majority of the shares of the
capital stock of the Bank, eligible to be voted, present either in person or by
proxy, shall constitute a quorum for the transaction of business at any meeting
of shareholders, but shareholders present at any meeting and constituting less
than a quorum may, without further notice, adjourn the meeting from time to time
until a quorum is obtained. A majority of the votes cast shall decide every
question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Articles of Association.
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<PAGE>
ARTICLE II
DIRECTORS
SECTION 2.01. MANAGEMENT OF THE BANK. The business of the Bank shall be managed
by the Board of Directors. Each director of the Bank shall be the beneficial
owner of a substantial number of shares of BANC ONE CORPORATION and shall be
employed either in the position of Chief Executive Officer or active leadership
within his or her business, professional or community interest which shall be
located within the geographic area in which the Bank operates, or as an
executive officer of the Bank. A director shall not be eligible for nomination
and re-election as a director of the Bank if such person's executive or
leadership position within his or her business, professional or community
interests which qualifies such person as a director of Bank terminates. The age
of 70 is the mandatory retirement age as a director of the Bank. When a person's
eligibility as director of the Bank terminates, whether because of change in
share ownership, position, residency or age, within 30 days after such
termination, such person shall submit his resignation as a director to be
effective at the pleasure of the Board provided, however, that in no event shall
such person be nominated or elected as a director. Provided, however, following
a person's retirement or resignation as a director because of the age
limitations herein set forth with respect to election or re-election as a
director, such person may, in special or unusual circumstances, and at the
discretion of the Board, be elected by the directors as a Director Emeritus of
the Bank for a limited period of time. A Director Emeritus shall have the right
to participate in board meetings but shall be without the power to vote and
shall be subject to re-election by the Board at its organizational meeting
following the Bank's annual meeting of shareholders.
SECTION 2.02. QUALIFICATIONS. Each director shall have the qualification
prescribed by law. No person elected a director may exercise any of the powers
of his office until he has taken the oath of such office.
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SECTION 2.03. TERM OF OFFICE/VACANCIES. A director shall hold office until the
annual meeting for the year in which his term expires and until his successor
shall be elected and shall qualify, subject, however, to his prior death,
resignation, or removal from office. Whenever any vacancy shall occur among the
directors, the remaining directors shall constitute the directors of the Bank
until such vacancy is filled by the remaining directors, and any director so
appointed shall hold office for the unexpired term of his or her successor.
Notwithstanding the foregoing, each director shall hold office and serve at the
pleasure of the Board.
SECTION 2.04. ORGANIZATION MEETING. The directors elected by the shareholders
shall meet for organization of the new board at the time fixed by the presiding
officer of the annual meeting. If at the time fixed for such meeting there is no
quorum present, the Directors in attendance may adjourn from time to time until
a quorum is obtained. A majority of the number of Directors elected by the
shareholders shall constitute a quorum for the transaction of business.
SECTION 2.05. REGULAR MEETINGS. The regular meetings of the Board of Directors
shall be held on the third Monday of each calendar month excluding March and
July, which meeting will be held at 4:00 p.m. When any regular meeting of the
Board falls on a holiday, the meeting shall be held on such other day as the
Board may previously designate or should the Board fail to so designate, on such
day as the Chairman of the Board of President may fix. Whenever a quorum is not
present, the directors in attendance shall adjourn the meeting to a time not
later than the date fixed by the Bylaws for the next succeeding regular meeting
of the Board.
SECTION 2.06. SPECIAL MEETINGS. Special meetings of the Board of Directors shall
be held at the call of the Chairman of the Board or President, or at the request
of two or more Directors. Any special meeting may be held at such place in
Franklin County, Ohio, and at such time as may be fixed in the call. Written or
oral notice shall be given to each Director not later than the day next
preceding the day on which special meeting is to be held, which notice may be
waived in writing.
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The presence of a Director at any meeting of the Board shall be deemed a waiver
of notice thereof by him. Whenever a quorum is not present the Directors in
attendance shall adjourn the special meeting from day to day until a quorum is
obtained.
SECTION 2.07. QUORUM. A majority of the Directors shall constitute a quorum at
any meeting, except when otherwise provided by law; but a lesser number may
adjourn any meeting, from time-to-time, and the meeting may be held, as
adjourned, without further notice. When, however, less than a quorum as herein
defined, but at least one-third and not less than two of the authorized number
of Directors are present at a meeting of the Directors, business of the Bank may
be transacted and matters before the Board approved or disapproved by the
unanimous vote of the Directors present.
SECTION 2.08. COMPENSATION. Each member of the Board of Directors shall receive
such fees for, and transportation expenses incident to, attendance at Board and
Board Committee Meetings and such fees for service as a Director irrespective of
meeting attendance as from time to time are fixed by resolution of the Board;
provided, however, that payment hereunder shall not be made to a Director for
meetings attended and/or Board service which are not for the Bank's sole benefit
and which are concurrent and duplicative with meetings attended or board service
for an affiliate of the Bank for which the Director receives payment; and
provided further, that payment hereunder shall not be made in the case of any
Director in the regular employment of the Bank or of one of its affiliates.
SECTION 2.09. EXECUTIVE COMMITTEE. There shall be a standing committee of the
Board of Directors known as the Executive Committee which shall possess and
exercise, when the Board is not in session, all powers of the Board that may
lawfully be delegated. The Executive Committee shall also exercise the powers of
the Board of Directors in accordance with the Provisions of the "Employees
Retirement Plan" and the "Agreement and Declaration of Trust" as the same now
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exist or may be amended hereafter. The Executive Committee shall consist of not
fewer than four board members, including the Chairman of the Board and President
of the Bank, one of whom, as hereinafter required by these By-laws, shall be the
Chief Executive Officer. The other members of the Committee shall be appointed
by the Chairman of the Board or by the President, with the approval of the Board
and shall continue as members of the Executive Committee until their successors
are appointed, provided, however, that any member of the Executive Committee may
be removed by the Board upon a majority vote thereof at any regular or special
meeting of the Board. The Chairman or President shall fill any vacancy in the
Committee by the appointment of another Director, subject to the approval of the
Board of Directors. The regular meetings of the Executive Committee shall be
held on a regular basis as scheduled by the Board of Directors. Special meetings
of the Executive Committee shall be held at the call of the Chairman or
President or any two members thereof at such time or times as may be designated.
In the event of the absence of any member or members of the Committee, the
presiding member may appoint a member or members of the Board to fill the place
or places of such absent member or members to serve during such absence. Not
fewer than three members of the Committee must be present at any meeting of the
Executive Committee to constitute a quorum, provided, however that with regard
to any matters on which the Executive Committee shall vote, a majority of the
Committee members present at the meeting at which a vote is to be taken shall
not be officers of the Bank and, provided further, that if, at any meeting at
which the Chairman of the Board and President are both present, Committee
members who are not officers are not in the majority, then the Chairman of the
Board or President, which ever of such officers is not also the Chief Executive
Officer, shall not be eligible to vote at such meeting and shall not be
recognized for purposes of determining if a quorum is present at such meeting.
When neither the Chairman of the Board nor President are present, the Committee
shall appoint a presiding officer. The Executive Committee shal keep a record of
its proceedings and report its proceedings and the action taken by it to the
Board of Directors.
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SECTION 2.10 COMMUNITY REINVESTMENT ACT AND COMPLIANCE POLICY COMMITTEE. There
shall be a standing committee of the Board of Directors known as the Community
Reinvestment Act and Compliance Policy Committee the duties of which shall be,
at least once in each calendar year, to review, develop and recommend policies
and programs related to the Bank's Community Reinvestment Act Compliance and
regulatory compliance with all existing statutes, rules and regulations
affecting the Bank under state and federal law. Such Committee shall provide and
promptly make a full report of such review of current Bank policies with regard
to Community Reinvestment Act and regulatory compliance in writing to the Board,
with recommendations, if any, which may be necessary to correct any
unsatisfactory conditions. Such Committee may, in its discretion, in fulfilling
its duties, utilize the Community Reinvestment Act officers of the Bank, Banc
One Ohio Corporation and Banc One Corporation and may engage outside Community
Reinvestment Act experts, as approved by the Board, to review, develop and
recommend policies and programs as herein required. The Community Reinvestment
Act and regulatory compliance policies and procedures established and the
recommendations made shall be consistent with, and shall supplement, the
Community Reinvestment Act and regulatory compliance programs, policies and
procedures of Banc One Corporation and Banc One Ohio Corporation. The Community
Reinvestment Act and Compliance Policy Committee shall consist of not fewer than
four board members, one of whom shall be the Chief Executive Officer and a
majority of whom are not officers of the Bank. Not fewer than three members of
the Committee, a majority of whom are not officers of the Bank, must be present
to constitute a quorum. The Chairman of the Board or President of the Bank,
whichever is not the Chief Executive Officer, shall be an ex officio member of
the Community Reinvestment Act and Compliance Policy Committee. The Community
Reinvestment Act and Compliance Policy Committee, whose chairman shall be
appointed by the Boad, shall keep a record of its proceedings and report its
proceedings and the action taken by it to the Board of Directors.
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SECTION 2.11. TRUST COMMITTEES. There shall be two standing Committees known as
the Trust Management Committee and the Trust Examination Committee appointed as
hereinafter provided.
SECTION 2.12. OTHER COMMITTEES. The Board of Directors may appoint such special
committees from time to time as are in its judgment necessary in the interest of
the Bank.
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ARTICLE III
OFFICERS, MANAGEMENT STAFF AND EMPLOYEES
SECTION 3.01. OFFICERS AND MANAGEMENT STAFF.
(a) The officers of the Bank shall include a President, Secretary and
Security Officer and may include a Chairman of the Board, one or
more Vice Chairmen, one or more Vice Presidents (which may include
one or more Executive Vice Presidents and/or Senior Vice
Presidents) and one or more Assistant Secretaries, all of whom
shall be elected by the Board. All other officers may be elected
by the Board or appointed in writing by the Chief Executive
Officer. The salaries of all officers elected by the Board shall
be fixed by the Board. The Board from time-to-time shall designate
the President or Chairman of the Board to serve as the Bank's
Chief Executive Officer.
(b) The Chairman of the Board, if any, and the President shall be
elected by the Board from their own number. The President and
Chairman of the Board shall be re-elected by the Board annually at
the organizational meeting of the Board of Directors following the
Annual Meeting of Shareholders. Such officers as the Board shall
elect from their own number shall hold office from the date of
their election as officers until the organization meeting of the
Board of Directors following the next Annual Meeting of
Shareholders, provided, however, that such officers may be
relieved of their duties at any time by action of the Board in
which event all the powers incident to their office shall
immediately terminate.
(c) Except as provided in the case of the elected officers who are
members of the Board, all officers, whether elected or appointed,
shall hold office at the pleasure of the Board. Except as
otherwise limited by law or these By-laws, the Board assigns to
Chief Executive Officer and/or his
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designees the authority to appoint and dismiss any elected or
appointed officer or other member of the Bank's management staff
and other employees of the Bank, as the person in charge of and
responsible for any branch office, department, section, operation,
function, assignment or duty in the Bank.
(d) The management staff of the Bank shall include officers elected by
the Board, officers appointed by the Chief Executive Officer, and
such other persons in the employment of the Bank who, pursuant to
written appointment and authorization by a duly authorized officer
of the Bank, perform management functions and have management
responsibilities. Any two or more offices may be held by the same
person except that no person shall hold the office of Chairman of
the Board and/or President and at the same time also hold the
office of Secretary.
(e) The Chief Executive Officer of the Bank and any other officer of
the Bank, to the extent that such officer is authorized in writing
by the Chief Executive Officer, may appoint persons other than
officers who are in the employment of the Bank to serve in
management positions and in connection therewith, the appointing
officer may assign such title, salary, responsibilities and
functions as are deemed appropriate by him, provided, however,
that nothing contained herein shall be construed as placing any
limitation on the authority of the Chief Executive Officer as
provided in this and other sections of these By-Laws.
SECTION 3.02. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer of the Bank
shall have general and active management of the business of the Bank and shall
see that all orders and resolutions of the Board of Directors are carried into
effect. Except as otherwise prescribed or limited by these By-Laws, the Chief
Executive Officer shall have full right, authority and power to control all
personnel, including elected and appointed officers, of the Bank, to employ or
direct the
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employment of such personnel and officers as he may deem necessary, including
the fixing of salaries and the dismissal of them at pleasure, and to define and
prescribe the duties and responsibility of all Officers of the Bank, subject to
such further limitations and directions as he may from time-to-time deem proper.
The Chief Executive Officer shall perform all duties incident to his office and
such other and further duties, as may, from time-to-time, be required of him by
the Board of Directors or the shareholders. The specification of authority in
these By-Laws wherever and to whomever granted shall not be construed to limit
in any manner the general powers of delegation granted to the Chief Executive
Officer in conducting the business of the Bank. The Chief Executive Officer or,
in his absence, the Chairman of the Board or President of the Bank, as
designated by the Chief Executive Officer, shall preside at all meetings of
shareholders and meetings of the Board. In the absence of the Chief Executive
Officer, such officer as is designated by the Chief Executive Officer shall be
vested with all the powers and perform all the duties of the Chief Executive
Officer as defined by these By-Laws. When designating an officer to serve in his
absence, the Chief Executive Officer shall select an officer who is a member of
the Board of Directors whenever such officer is available.
SECTION 3.03. POWERS OF OFFICERS AND MANAGEMENT STAFF. The Chief Executive
Officer, the Chairman of the Board, the President, and those officers so
designated and authorized by the Chief Executive Officer are authorized for an
on behalf of the Bank, and to the extent permitted by law, to make loans and
discounts; to purchase or acquire drafts, notes, stock, bonds, and other
securities for investment of funds held by the Bank; to execute and purchase
acceptances; to appoint, empower and direct all necessary agents and attor-
neys; to sign and give any notice required to be given; to demand payment and/or
to declare due for any default any debt or obligation due or payable to the Bank
upon demand or authorized to be declared due; to foreclose any mort- gages, to
exercise any option, privilege or election to forfeit, terminate, extend or
renew any lease; to authorize and direct any proceedings for the collection of
any money or for the enforcement
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of any right or obligation; to adjust, settle and compromise all claims of every
kind and description in favor of or against the Bank, and to give receipts,
releases and discharges therefor; to borrow money and in connection therewith to
make, execute and deliver notes, bonds or other evidences of indebtedness; to
pledge or hypothe- cate any securities or any stocks, bonds, notes or any
property real or personal held or owned by the Bank, or to rediscount any notes
or other obligations held or owned by the Bank, to employ or direct the
employment of all personnel, including elected and appointed officers, and the
dismissal of them at pleasure, and in furtherance of and in addition to the
powers hereinabove set forth to do all such acts and to take all such
proceedings as in his judgment are necessary and incidental to the operation of
the Bank.
Other persons in the employment of the Bank, including but not limited to
officers and other members of the management staff, may be authorized by the
Chief Executive Officer, or by an officer so designated and authorized by the
chief Executive Officer, to perform the powers set forth above, subject,
however, to such limitations and conditions as are set forth in the
authorization given to such persons.
SECTION 3.04. SECRETARY. The Secretary or such other officers as may be
designated by the Chief Executive Officer shall have supervision and control of
the records of the Bank and, subject to the direction of the Chief Executive
Officer, shall undertake other duties and functions usually performed by a
corporate secretary. Other officers may be designated by the Chief Executive
Officer or the Board of Directors as Assistant Secretary to perform the duties
of the Secretary.
SECTION 3.05. EXECUTION OF DOCUMENTS. The Chief Executive Officer, Chairman of
the Board, President, any officer being a member of the Bank's management staff
who is also a person in charge of and responsible for any department within the
Bank and any other officer to the extent such officer is so designated and
authorized by the Chief Executive Officer, the Chairman of the
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Board, the President, or any other officer who is a member of the Bank's
management staff who is in charge of and responsible for any department within
the Bank, are hereby authorized on behalf of the Bank to sell, assign, lease,
mortgage, transfer, deliver and convey any real or personal property now or
hereafter owned by or standing in the name of the Bank or its nominee, or held
by this Bank as collateral security, and to execute and deliver such deeds,
contracts, leases, assignments, bills of sale, transfers or other papers or
documents as may be appropriate in the circumstances; to execute any loan
agreement, security agreement, commitment letters and financing statements and
other documents on behalf of the Bank as a lender; to execute purchase orders,
documents and agreements entered into by the Bank in the ordinary course of
business, relating to purchase, sale, exchange or lease of services, tangible
personal property, materials and equipment for the use of the Bank; to execute
powers of attorney to perform specific or general functions in the name of or on
behalf of the Bank; to execute promissory notes or other instruments evidencing
debt of the Bank; to execute instruments pledging or releasing securities for
public funds, documents submitting public fund bids on behalf of the Bank and
public fund contracts; to purchase and acquire any real or personal property
including loan portfolios and to execute and deliver such agreements, contracts
or other papers or documents as may be appropriate in the circumstances; to
execute any indemnity and fidelity bonds, proxies or other papers or documents
of like or different character necessary, desirable or incidental to the conduct
of its banking business; to execute and deliver settlement agreements or other
papers or documents as may be appropriate in connection with a dismissal
authorized by Section 3.01(c) of these By-laws; to execute agreements,
instruments, documents, contracts or other papers of like or difference
character necessary, desirable or incidental to the conduct of its banking
business; and to execute and deliver partial releases from and discharges or
assignments of mortgages, financing statements and assignments or surrender of
insurance policies, now or hereafter held by this Bank.
The Chief Executive Officer, Chairman of the Board, President, any officer
being a member of the Bank's management staff who is also a person in charge of
and
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responsible for any department within the Bank, and any other officer of the
Bank so designated and authorized by the Chief Executive Officer, Chairman of
the Board, President or any officer who is a member of the Bank's management
staff who is in charge of and responsible for any department within the Bank are
authorized for and on behalf of the Bank to sign and issue checks, drafts, and
certificates of deposit; to sign and endorse bills of exchange, to sign and
countersign foreign and domestic letters of credit, to receive and receipt for
payments of principal, interest, dividends, rents, fees and payments of every
kind and description paid to the Bank, to sign receipts for property acquired by
or entrusted to the Bank, to guarantee the genuineness of signatures on
assignments of stocks, bonds or other securities, to sign certifications of
checks, to endorse and deliver checks, drafts, warrants, bills, notes,
certificates of deposit and acceptances in all business transactions of the
Bank.
Other persons in the employment of the Bank and of its subsidiaries,
including but not limited to officers and other members of the management staff,
may be authorized by the Chief Executive Officer, Chairman of the Board,
President or by an officer so designated by the Chief Executive Officer,
Chairman of the Board, or President to perform the acts and to execute the
documents set forth above, subject, however, to such limitations and conditions
as are contained in the authorization given to such person.
SECTION 3.06. PERFORMANCE BOND. All officers and employees of the Bank shall be
bonded for the honest and faithful performance of their duties for such amount
as may be prescribed by the Board of Directors.
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ARTICLE IV
TRUST DEPARTMENT
SECTION 4.01. TRUST DEPARTMENT. Pursuant to the fiduciary powers granted to this
Bank under the provisions of Federal Law and Regulations of the Comptroller of
the Currency, there shall be maintained a separate Trust Department of the Bank,
which shall be operated in the manner specified herein.
SECTION 4.02. TRUST MANAGEMENT COMMITTEE. There shall be a standing Committee
known as the Trust Management Committee, consisting of at least five members, a
majority of whom shall not be officers of the Bank. The Committee shall consist
of the Chairman of the Board who shall be Chairman of the Com- mittee, the
President, and at least three other Directors appointed by the Board of
Directors and who shall continue as members of the Committee until their
successors are appointed. Any vacancy in the Trust Management Committee may be
filled by the Board at any regular or special meeting. In the event of the
absence of any member or members, such Committee may, in its discretion, appoint
members of the Board to fill the place of such absent members to serve during
such absence. Three members of the Committee shall constitute a quorum. Any
member of the Committee may be removed by the Board by a majority vote at any
regular or special meeting of the Board. The Committee shall meet at such times
as it may determine or at the call of the Chairman, or President or any two
members thereof.
The Trust Management Committee, under the general direction of the Board
of Directors, shall supervise the policy of the Trust Department which shall be
formulated and executed in accordance with Law, Regulations of the Comptroller
of the Currency, and sound fiduciary principles.
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SECTION 4.03. TRUST EXAMINATION COMMITTEE. There shall be a standing Committee
known as the Trust Examination Committee, consisting of three directors
appointed by the Board of Directors and who shall continue as members of the
committee until their successors are appointed. Such members shall not be active
officers of the Bank. Two members of the Committee shall constitute a quorum.
Any member of the Committee may be removed by the Board by a majority vote at
any regular or special meeting of the Board. The Committee shall meet at such
times as it may determine or at the call of two members thereof.
This Committee shall, at least once during each calendar year and within
fifteen months of the last such audit, or at such other time(s) as may be
required by Regulations of the Comptroller of the Currency, make suitable audits
of the Trust Department or cause suitable audits to be made by auditors
responsible only to the Board of Directors, and at such time shall ascertain
whether the Department has been administered in accordance with Law, Regula-
tions of the Comptroller of the Currency and sound fiduciary principles.
The Committee shall promptly make a full report of such audits in writing
to the Board of Directors of the Bank, together with a recommendation as to what
action, if any, may be necessary to correct any unsatisfactory condition. A
report of the audits together with the action taken thereon shall be noted in
the Minutes of the Board of Directors and such report shall be a part of the
records of this Bank.
SECTION 4.04. MANAGEMENT. The Trust Department shall be under the management and
supervision of an officer of the Bank or of the trust affiliate of the Bank
designated by and subject to the advice and direction of the Chief Executive
Officer. Such officer having supervisory responsibility over the Trust
Department shall do or cause to be done all things necessary or proper in
carrying on the business of the Trust Department in accordance with provi- sions
of law and applicable regulations.
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SECTION 4.05. HOLDING OF PROPERTY. Property held by the Trust Department may be
carried in the name of the Bank in its fiduciary capacity, in the name of Bank,
or in the name of a nominee or nominees.
SECTION 4.06. TRUST INVESTMENTS. Funds held by the Bank in a fiduciary capacity
awaiting investment or distribution shall not be held uninvested or
undistributed any longer than is reasonable for the proper management of the
account and shall be invested in accordance with the instrument establishing a
fiduciary relationship and local law. Where such instrument does not specify the
character or class of investments to be made and does not vest in the Bank any
discretion in the matter, funds held pursuant to such instrument shall be
invested in any investment which corporate fiduciaries may invest under local
law.
The investments of each account in the Trust Department shall be kept
separate from the assets of the Bank, and shall be placed in the joint custody
or control of not less than two of the officers or employees of the Bank or of
the trust affiliate of the Bank designated for the purpose by the Trust
Management Committee.
SECTION 4.07. EXECUTION OF DOCUMENTS. The Chief Executive Officer, Chairman of
the Board, President, any officer of the Trust Department, and such other
officers of the trust affiliate of the Bank as are specifically designated and
authorized by the Chief Executive Officer, the President, or the officer in
charge of the Trust Department, are hereby authorized, on behalf of this Bank,
to sell, assign, lease, mortgage, transfer, deliver and convey any real property
or personal property and to purchase and acquire any real or personal property
and to execute and deliver such agreements, contracts, or other papers and
documents as may be appropriate in the circumstances for property now or
hereafter owned by or standing in the name of this Bank, or its nominee, in any
fiduciary capacity, or in the name of any principal for whom this Bank may now
or hereafter be acting under a power of attorney, or as agent and to execute and
deliver partial releases from
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any discharges or assignments or mortgages and assignments or surrender of
insurance policies, to execute and deliver deeds, contracts, leases,
assignments, bills of sale, transfers or such other papers or documents as may
be appropriate in the circumstances for property now or hereafter held by this
Bank in any fiduciary capacity or owned by any principal for whom this Bank may
now or hereafter be acting under a power of attorney or as agent; to execute and
deliver settlement agreements or other papers or documents as may be appropriate
in connection with a dismissal authorized by Section 3.01(c) of these By-laws;
provided that the signature of any such person shall be attested in each case by
any officer of the Trust Department or by any other person who is specifically
authorized by the Chief Executive Officer, the President or the officer in
charge of the Trust Department.
The Chief Executive Officer, Chairman of the Board, President, any officer
of the Trust Department and such other officers of the trust affiliate of the
Bank as are specifically designated and authorized by the Chief Executive
Officer, the President, or the officer in charge of the Trust Department, or any
other person or corporation as is specifically authorized by the Chief Executive
Officer, the President or the officer in charge of the Trust Department, are
hereby authorized on behalf of this Bank, to sign any and all pleadings and
papers in probate and other court proceedings, to execute any indemnity and
fidelity bonds, trust agreements, proxies or other papers or documents of like
or different character necessary, desirable or incidental to the appointment of
the Bank in any fiduciary capacity and the conduct of its business in any
fiduciary capacity; also to foreclose any mortgage, to execute and deliver
receipts for payments of principal, interest, dividends, rents, fees and
payments of every kind and description paid to the Bank; to sign receipts for
property acquired or entrusted to the Bank; also to sign stock or bond
certificates on behalf of this Bank in any fiduciary capacity and on behalf of
this Bank as transfer agent or registrar; to guarantee the genuineness of
signatures on assignments of stocks, bonds or other securities, and to
authenticate bonds, debentures, land or lease trust certificates or other forms
of security issued pursuant to any indenture under which this Bank now or
hereafter is acting as
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Trustee. Any such person, as well as such other persons as are specifically
authorized by the Chief Executive Officer or the officer in charge of the Trust
Department, may sign checks, drafts and orders for the payment of money executed
by the Trust Department in the course of its business.
SECTION 4.08. VOTING OF STOCK. The Chairman of the Board, President, any officer
of the Trust Department, any officer of the trust affiliate of the Bank and such
other persons as may be specifically authorized by Resolution of the Trust
Management Committee or the Board of Directors, may vote shares of stock of a
corporation of record on the books of the issuing company in the name of the
Bank or in the name of the Bank as fiduciary, or may grant proxies for the
voting of such stock of the granting if same is permitted by the instrument
under which the Bank is acting in a fiduciary capacity, or by the law applicable
to such fiduciary account. In the case of shares of stock which are held by a
nominee of the Bank, such shares may be voted by such person(s) authorized by
such nominee.
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ARTICLE V
STOCKS AND STOCK CERTIFICATES
SECTION 5.01. STOCK CERTIFICATES. The shares of stock of the Bank shall be
evidenced by certificates which shall bear the signature of the Chairman of the
Board, the President, or a Vice President (which signature may be engraved,
printed or impressed), and shall be signed manually by the Secretary, or any
other officer appointed by the Chief Executive Officer for that purpose.
In case any such officer who has signed or whose facsimile signature has
been placed upon such certificate shall have ceased to be such before such
certificate is issued, it may be issued by the Bank with the same effect as if
such officer had not ceased to be such at the time of its issue. Each such
certificate shall bear the corporate seal of the Bank, shall recite on its fact
that the stock represented thereby is transferable only upon the books of the
Bank properly endorsed and shall recite such other information as is required by
law and deemed appropriate by the Board. The corporate seal may be facsimile
engraved or printed.
SECTION 5.02. STOCK ISSUE AND TRANSFER. The shares of stock of the Bank shall be
transferable only upon the stock transfer books of the Bank and except as
hereinafter provided, no transfer shall be made or new certificates issued
except upon the surrender for cancellation of the certificate or certificates
previously issued therefor. In the case of the loss, theft, or destruction of
any certificate, a new certificate may be issued in place of such certificate
upon the furnishing of any affidavit setting forth the circumstances of such
loss, theft, or destruction and indemnity satisfactory to the Chairman of the
Board, the President, or a Vice President. The Board of Directors, or the Chief
Executive Officer, may authorize the issuance of a new certificate therefor
without the furnishing of indemnity. Stock Transfer Books, in which all
transfers of stock shall be recorded, shall be provided.
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The stock transfer books may be closed for a reasonable period and under
such conditions as the Board of Directors may at any time determine for any
meeting of shareholders, the payment of dividends or any other lawful purpose.
In lieu of closing the transfer books, the Board may, in its discretion, fix a
record date and hour constituting a reasonable period prior to the day
designated for the holding of any meeting of the shareholders or the day
appointed for the payment of any dividend or for any other purpose at the time
as of which shareholders entitled to notice of and to vote at any such meeting
or to receive such dividend or to be treated as shareholders for such other
purpose shall be determined, and only shareholders of record at such time shall
be entitled to notice of or to vote at such meeting or to receive such dividends
or to be treated as shareholders for such other purpose.
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ARTICLE VI
MISCELLANEOUS PROVISIONS
SECTION 6.01. SEAL. The impression made below is an impression of the seal
adopted by the Board of Directors of BANK ONE, COLUMBUS, NATIONAL ASSOCIATION.
The Seal may be affixed by any officer of the Bank to any document executed by
an authorized officer on behalf of the Bank, and any officer may certify any
act, proceedings, record, instrument or authority of the Bank.
SECTION 6.02. BANKING HOURS. Subject to ratification by the Executive Committee,
the Bank and each of its Branches shall be open for business on such days and
during such hours as the Chief Executive Officer of the Bank shall, from time to
time, prescribe.
SECTION 6.03. MINUTE BOOK. The organization papers of this Bank, the Articles of
Association, the returns of the judges of elections, the By-Laws and any
amendments thereto, the proceedings of all regular and special meetings of the
shareholders and of the Board of Directors, and reports of the committees of the
Board of Directors shall be recorded in the minute book of the Bank. The minutes
of each such meeting shall be signed by the presiding Officer and attested by
the secretary of the meetings.
SECTION 6.04. AMENDMENT OF BY-LAWS. These By-Laws may be amended by vote of a
majority of the Directors.
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EXHIBIT 6
Securities and Exchange Commission
Washington, D.C. 20549
CONSENT
The undersigned, designated to act as Trustee under the Indenture for Ameritech
Capital Funding Corporation described in the attached Statement of Eligibility
and Qualification, does hereby consent that reports of examinations by Federal,
State, Territorial, or District Authorities may be furnished by such authorities
to the Commission upon the request of the Commission.
This Consent is given pursuant to the provision of Section 321(b) of the Trust
Indenture Act of 1939, as amended.
Bank One, NA
Dated: January 12, 1998 By: /s/ Jon Beacham
----------------
Jon Beacham
Authorized Signer
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EXECUTION COPY
A/B EXCHANGE
REGISTRATION RIGHTS AGREEMENT
Dated as of November 26, 1997
by and among
WHEELING-PITTSBURGH CORPORATION
WHEELING-PITTSBURGH STEEL CORPORATION
CONSUMERS MINING COMPANY
WHEELING-EMPIRE COMPANY
MINGO OXYGEN COMPANY
PITTSBURGH-CANFIELD CORPORATION
WHEELING CONSTRUCTION PRODUCTS, INC.
WP STEEL VENTURE CORPORATION
CHAMPION METAL PRODUCTS, INC.
and
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
CITICORP SECURITIES, INC.
================================================================================
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EXECUTION COPY
This Registration Rights Agreement (this "Agreement") is made
and entered into as of November 26, 1997 by and among Wheeling-Pittsburgh
Corporation, a Delaware corporation (the "Company"), Wheeling-Pittsburgh Steel
Corporation, a Delaware corporation, Consumers Mining Company, a Pennsylvania
corporation, Wheeling-Empire Company, a Delaware corporation, Mingo Oxygen
Company, an Ohio corporation, Pittsburgh-Canfield Corporation, a Pennsylvania
corporation, Wheeling Construction Products, Inc., a Delaware corporation, WP
Steel Venture Corporation, a Delaware corporation and Champion Metal Products,
Inc., a Delaware corporation (collectively, the "Guarantors"), and Donaldson,
Lufkin & Jenrette Securities Corporation and Citicorp Securities, Inc. (each an
"Initial Purchaser" and, collectively, the "Initial Purchasers"), each of whom
has agreed to purchase the Company's 9 1/4% Series A Senior Notes due 2007 (the
"Series A Notes") pursuant to the Purchase Agreement (as defined below).
This Agreement is made pursuant to the Purchase Agreement,
dated November 20, 1997 (the "Purchase Agreement"), by and among the Company,
the Guarantors and the Initial Purchasers. In order to induce the Initial
Purchasers to purchase the Series A Notes, the Company has agreed to provide the
registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchasers set
forth in Section 2 of the Purchase Agreement. Capitalized terms used herein and
not otherwise defined shall have the meaning assigned to them in the Indenture,
dated as of November 26, 1997, between the Company and Bank One, N.A., as
Trustee, relating to the Series A Notes and the Series B Notes (the
"Indenture").
The parties hereby agree as follows:
SECTION 1. DEFINITIONS
As used in this Agreement, the following capitalized terms
shall have the following meanings:
Act: The Securities Act of 1933, as amended.
Affiliate: As defined in Rule 144 of the Act.
Broker-Dealer: Any broker or dealer registered under the
Exchange Act.
Certificated Securities: Definitive Notes, as defined in the
Indenture.
Closing Date: The date hereof.
Commission: The Securities and Exchange Commission.
Consummate: An Exchange Offer shall be deemed "Consummated"
for purposes of this Agreement upon the occurrence of (a) the filing and
effectiveness under the
<PAGE>
EXECUTION COPY
Act of the Exchange Offer Registration Statement relating to the Series B Notes
to be issued in the Exchange Offer, (b) the maintenance of such Exchange Offer
Registration Statement continuously effective and the keeping of the Exchange
Offer open for a period not less than the period required pursuant to Section
3(b) hereof and (c) the delivery by the Company to the Registrar under the
Indenture of Series B Notes in the same aggregate principal amount as the
aggregate principal amount of Series A Notes tendered by Holders thereof
pursuant to the Exchange Offer.
Effectiveness Deadline: As defined in Section 3(a) and 4(a)
hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Offer: The exchange and issuance by the Company of a
principal amount of Series B Notes (which shall be registered pursuant to the
Exchange Offer Registration Statement) equal to the outstanding principal amount
of Series A Notes that are tendered by such Holders in connection with such
exchange and issuance.
Exchange Offer Registration Statement: The Registration
Statement relating to the Exchange Offer, including the related Prospectus.
Exempt Resales: The transactions in which the Initial
Purchasers propose to sell the Series A Notes to certain "qualified
institutional buyers," as such term is defined in Rule 144A under the Act and
pursuant to Regulation S under the Act.
Filing Deadline: As defined in Sections 3(a) and 4(a) hereof.
Holders: As defined in Section 2 hereof.
Indemnified Holder: As defined in Section 8(a) hereof.
Prospectus: The prospectus included in a Registration
Statement at the time such Registration Statement is declared effective, as
amended or supplemented by any prospectus supplement and by all other amendments
thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.
Recommencement Date: As defined in Section 6(d) hereof.
Registration Default: As defined in Section 5 hereof.
Registration Statement: Any registration statement of the
Company and the Guarantors relating to (a) an offering of Series B Notes
pursuant to an Exchange Offer or (b) the registration for resale of Transfer
Restricted Securities pursuant to the Shelf Registration Statement, in each
case, (i) that is filed pursuant to the provisions of this Agreement and (ii)
including the Prospectus included therein, all amendments and supplements
thereto (including post-effective amendments) and all exhibits and material
incorporated by reference therein.
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EXECUTION COPY
Regulation S: Regulation S promulgated under the Act.
Restricted Broker-Dealer: Any Broker-Dealer that holds Series
B Notes that were acquired in the Exchange Offer in exchange for Series A Notes
that such Broker-Dealer acquired for its own account as a result of market
making activities or other trading activities (other than Series A Notes
acquired directly from the Company or any of its affiliates).
Rule 144: Rule 144 promulgated under the Act.
Series B Notes: The Company's 9 1/4% Series B Senior Notes due
2007 to be issued pursuant to the Indenture: (i) in the Exchange Offer or (ii)
as contemplated by Section 4 hereof.
Shelf Registration Statement: As defined in Section 4 hereof.
Suspension Notice: As defined in Section 6(d) hereof.
TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb) as in effect on the date of the Indenture.
Transfer Restricted Securities: Each Note, until the earliest
to occur of (a) the date on which such Note is exchanged in the Exchange Offer
and entitled to be resold to the public by the Holder thereof without complying
with the prospectus delivery requirements of the Act, (b) the date on which such
Note has been disposed of in accordance with a Shelf Registration Statement, (c)
the date on which such Note is disposed of by a Broker-Dealer pursuant to the
"Plan of Distribution" contemplated by the Exchange Offer Registration Statement
(including delivery of the Prospectus contained therein) or (d) the date on
which such Note is distributed to the public pursuant to Rule 144 under the Act.
SECTION 2. HOLDERS
A Person is deemed to be a holder of Transfer Restricted
Securities (each, a "Holder") whenever such Person owns Transfer Restricted
Securities.
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EXECUTION COPY
SECTION 3. REGISTERED EXCHANGE OFFER
(a) Unless the Exchange Offer shall not be permitted by
applicable federal law (after the procedures set forth in Section 6(a)(i) below
have been complied with), the Company and the Guarantors shall (i) cause the
Exchange Offer Registration Statement to be filed with the Commission as soon as
practicable after the Closing Date (the "Exchange Offer Filing Date"), but in no
event later than 45 days after the Closing Date (such 45th day being the "Filing
Deadline"), (ii) use its best efforts to cause such Exchange Offer Registration
Statement to become effective at the earliest possible time, but in no event
later than 135 days after the Closing Date (such 135th day being the
"Effectiveness Deadline"), (iii) in connection with the foregoing, (A) file all
pre-effective amendments to such Exchange Offer Registration Statement as may be
necessary in order to cause it to become effective, (B) file, if applicable, a
post-effective amendment to such Exchange Offer Registration Statement pursuant
to Rule 430A under the Act and (C) cause all necessary filings, if any, in
connection with the registration and qualification of the Series B Notes to be
made under the Blue Sky laws of such jurisdictions as are necessary to permit
Consummation of the Exchange Offer, and (iv) upon the effectiveness of such
Exchange Offer Registration Statement, commence and Consummate the Exchange
Offer. The Exchange Offer shall be on the appropriate form permitting
registration of the Series B Notes to be offered in exchange for the Series A
Notes that are Transfer Restricted Securities and to permit resales of Series B
Notes by Broker-Dealers that tendered into the Exchange Offer for Series A Notes
that such Broker-Dealer acquired for its own account as a result of market
making activities or other trading activities (other than Series A Notes
acquired directly from the Company or any of its Affiliates) as contemplated by
Section 3(c) below.
(b) The Company and the Guarantors shall use their respective
best efforts to cause the Exchange Offer Registration Statement to be effective
continuously, and shall keep the Exchange Offer open for a period of not less
than the minimum period required under applicable federal and state securities
laws to Consummate the Exchange Offer; provided, however, that in no event shall
such period be less than 20 Business Days. The Company and the Guarantors shall
cause the Exchange Offer to comply with all applicable federal and state
securities laws. No securities other than the Series B Notes shall be included
in the Exchange Offer Registration Statement. The Company and the Guarantors
shall use their respective best efforts to cause the Exchange Offer to be
Consummated on the earliest practicable date after the Exchange Offer
Registration Statement has become effective, but in no event later than 30
Business Days thereafter.
(c) The Company shall include a "Plan of Distribution" section
in the Prospectus contained in the Exchange Offer Registration Statement and
indicate therein that any Broker-Dealer who holds Transfer Restricted Securities
that were acquired for the account of such Broker-Dealer as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company or any Affiliate of the
Company), may exchange such Transfer Restricted Securities pursuant to the
Exchange Offer; however, such Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the
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Act and must, therefore, deliver a prospectus meeting the requirements of the
Act in connection with its initial sale of any Series B Notes received by such
Broker-Dealer in the Exchange Offer and that the Prospectus contained in the
Exchange Offer Registration Statement may be used to satisfy such prospectus
delivery requirement. Such "Plan of Distribution" section shall also contain all
other information with respect to such sales by such Broker- Dealers that the
Commission may require in order to permit such sales pursuant thereto, but such
"Plan of Distribution" shall not name any such Broker-Dealer or disclose the
amount of Transfer Restricted Securities held by any such Broker-Dealer, except
to the extent required by the Commission as a result of a change in policy,
rules or regulations after the date of this Agreement.
To the extent necessary to ensure that the Exchange Offer
Registration Statement is available for sales of Series B Notes by
Broker-Dealers, the Company and the Guarantors agree to use their respective
best efforts to keep the Exchange Offer Registration Statement continuously
effective, supplemented and amended as required by the provisions of Section
6(c) hereof and in conformity with the requirements of this Agreement, the Act
and the policies, rules and regulations of the Commission as announced from time
to time, for a period of one year from the date on which the Exchange Offer is
Consummated, or such shorter period as will terminate when all Transfer
Restricted Securities covered by such Registration Statement have been sold
pursuant thereto. The Company and the Guarantors shall promptly provide
sufficient copies of the latest version of such Prospectus to such
Broker-Dealers promptly upon request, and in no event later than one day after
such request, at any time during such period.
SECTION 4. SHELF REGISTRATION
(a) Shelf Registration. If (i) the Exchange Offer is not
permitted by applicable law (after the Company and the Guarantors have complied
with the procedures set forth in Section 6(a)(i) below) or (ii) if any Holder of
Transfer Restricted Securities shall notify the Company within 20 Business Days
following the Consummation of the Exchange Offer that (A) such Holder was
prohibited by law or Commission policy from participating in the Exchange Offer
or (B) such Holder may not resell the Series B Notes acquired by it in the
Exchange Offer to the public without delivering a prospectus and the Prospectus
contained in the Exchange Offer Registration Statement is not appropriate or
available for such resales by such Holder or (C) such Holder is a Broker-Dealer
and holds Series A Notes acquired directly from the Company or any of its
Affiliates, then the Company and the Guarantors shall:
(x) cause to be filed, on or prior to 45 days after the earlier of (i)
the date on which the Company determines that the Exchange Offer Registration
Statement cannot be filed as a result of clause (a)(i) above and (ii) the date
on which the Company receives the notice specified in clause (a) (ii) above,
(such earlier date, the "Filing Deadline"), a shelf registration statement
pursuant to Rule 415 under the Act (which may be an amendment to the Exchange
Offer Registration Statement (the "Shelf Registration Statement")), relating to
all Transfer Restricted Securities, and
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(y) shall use their respective best efforts to cause such Shelf
Registration Statement to become effective on or prior to 60 days after the
Filing Deadline (such 60th day the "Effectiveness Deadline").
If, after the Company has filed an Exchange Offer Registration
Statement that satisfies the requirements of Section 3(a) above, the Company is
required to file and make effective a Shelf Registration Statement solely
because the Exchange Offer is not permitted under applicable federal law, then
the filing of the Exchange Offer Registration Statement shall be deemed to
satisfy the requirements of clause (x) above; provided that, in such event, the
Company shall remain obligated to meet the Effectiveness Deadline set forth in
clause (y).
The Company and the Guarantors shall use their respective best
efforts to keep any Shelf Registration Statement required by this Section 4(a)
continuously effective, supplemented and amended as required by and subject to
the provisions of Sections 6(b) and (c) hereof to the extent necessary to ensure
that it is available for sales of Transfer Restricted Securities by the Holders
thereof entitled to the benefit of this Section 4(a), and to ensure that it
conforms with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a
period of at least two years (as extended pursuant to Section 6(c)(i)) following
the date on which such Shelf Registration Statement first becomes effective
under the Act, or such shorter period as will terminate when all Transfer
Restricted Securities covered by such Registration Statement have been sold
pursuant thereto.
(b) Provision by Holders of Certain Information in Connection
with the Shelf Registration Statement. No Holder of Transfer Restricted
Securities may include any of its Transfer Restricted Securities in any Shelf
Registration Statement pursuant to this Agreement unless and until such Holder
furnishes to the Company in writing, within 20 days after receipt of a request
therefor, the information specified in Item 507 or 508 of Regulation S-K, as
applicable, of the Act for use in connection with any Shelf Registration
Statement or Prospectus or preliminary Prospectus included therein. No Holder of
Transfer Restricted Securities shall be entitled to liquidated damages pursuant
to Section 5 hereof unless and until such Holder shall have provided all such
information. Each selling Holder agrees to promptly furnish additional
information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.
SECTION 5. LIQUIDATED DAMAGES
If (i) any Registration Statement required by this Agreement
is not filed with the Commission on or prior to the applicable Filing Deadline,
(ii) any such Registration Statement has not been declared effective by the
Commission on or prior to the applicable Effectiveness Deadline, (iii) the
Exchange Offer has not been Consummated within 30 Business Days after the
Exchange Offer Registration Statement is first declared effective by the
Commission or (iv) any Registration Statement required by this Agreement is
filed and declared effective but shall thereafter cease to be effective or fail
to be usable for its intended purpose without being
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succeeded immediately by a post-effective amendment to such Registration
Statement that cures such failure and that is itself declared effective
immediately (each such event referred to in clauses (i) through (iv), a
"Registration Default"), then the Company and the Guarantors hereby jointly and
severally agree to pay to each Holder of Transfer Restricted Securities affected
thereby liquidated damages in an amount equal to $.05 per week per $1,000 in
principal amount of Transfer Restricted Securities held by such Holder for each
week or portion thereof that the Registration Default continues for the first
90-day period immediately following the occurrence of such Registration Default.
The amount of the liquidated damages shall increase by an additional $.05 per
week per $1,000 in principal amount of Transfer Restricted Securities with
respect to each subsequent 90-day period until all Registration Defaults have
been cured, up to a maximum amount of liquidated damages of $.50 per week per
$1,000 in principal amount of Transfer Restricted Securities; provided that the
Company and the Guarantors shall in no event be required to pay liquidated
damages for more than one Registration Default at any given time.
Notwithstanding anything to the contrary set forth herein, (1) upon filing of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (i) above, (2) upon the effectiveness of
the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (ii) above, (3) upon Consummation of the
Exchange Offer, in the case of (iii) above, or (4) upon the filing of a
post-effective amendment to the Registration Statement or an additional
Registration Statement that causes the Exchange Offer Registration Statement
(and/or, if applicable, the Shelf Registration Statement) to again be declared
effective or made usable in the case of (iv) above, the liquidated damages
payable with respect to the Transfer Restricted Securities as a result of such
clause (i), (ii), (iii) or (iv), as applicable, shall cease.
All accrued liquidated damages shall be paid to the Holders
entitled thereto, in the manner provided for the payment of interest in the
Indenture, on each Interest Payment Date, as more fully set forth in the
Indenture and the Notes. All obligations of the Company and the Guarantors set
forth in the preceding paragraph that are outstanding with respect to any
Transfer Restricted Security at the time such security ceases to be a Transfer
Restricted Security shall survive until such time as all such obligations with
respect to such security shall have been satisfied in full.
SECTION 6. REGISTRATION PROCEDURES
(a) Exchange Offer Registration Statement. In connection with
the Exchange Offer, the Company and the Guarantors shall comply with all
applicable provisions of Section 6(c) below, shall use their respective best
efforts to effect such exchange and to permit the resale of Series B Notes by
Broker-Dealers that tendered in the Exchange Offer Series A Notes that such
Broker-Dealer acquired for its own account as a result of its market making
activities or other trading activities (other than Series A Notes acquired
directly from the Company or any of its Affiliates) being sold in accordance
with the intended method or methods of distribution thereof, and shall comply
with all of the following provisions:
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(i) If, following the date hereof there has been
announced a change in Commission policy with respect to exchange offers
such as the Exchange Offer, that in the reasonable opinion of counsel
to the Company raises a substantial question as to whether the Exchange
Offer is permitted by applicable federal law, the Company and the
Guarantors hereby agree to seek a no-action letter or other favorable
decision from the Commission allowing the Company and the Guarantors to
Consummate an Exchange Offer for such Transfer Restricted Securities.
The Company and the Guarantors hereby agree to pursue the issuance of
such a decision to the Commission staff level. In connection with the
foregoing, the Company and the Guarantors hereby agree to take all such
other actions as may be requested by the Commission or otherwise
required in connection with the issuance of such decision, including
without limitation (A) participating in telephonic conferences with the
Commission, (B) delivering to the Commission staff an analysis prepared
by counsel to the Company setting forth the legal bases, if any, upon
which such counsel has concluded that such an Exchange Offer should be
permitted and (C) diligently pursuing a resolution (which need not be
favorable) by the Commission staff.
(ii) As a condition to its participation in the
Exchange Offer, each Holder of Transfer Restricted Securities
(including, without limitation, any Holder who is a Broker Dealer)
shall furnish, upon the request of the Company, prior to the
Consummation of the Exchange Offer, a written representation to the
Company and the Guarantors (which may be contained in the letter of
transmittal contemplated by the Exchange Offer Registration Statement)
to the effect that (A) it is not an Affiliate of the Company, (B) it is
not engaged in, and does not intend to engage in, and has no
arrangement or understanding with any person to participate in, a
distribution of the Series B Notes to be issued in the Exchange Offer
and (C) it is acquiring the Series B Notes in its ordinary course of
business. Each Holder using the Exchange Offer to participate in a
distribution of the Series B Notes hereby acknowledges and agrees that,
if the resales are of Series B Notes obtained by such Holder in
exchange for Series A Notes acquired directly from the Company or an
Affiliate thereof, it (1) could not, under Commission policy as in
effect on the date of this Agreement, rely on the position of the
Commission enunciated in Morgan Stanley and Co., Inc. (available June
5, 1991) and Exxon Capital Holdings Corporation (available May 13,
1988), as interpreted in the Commission's letter to Shearman & Sterling
dated July 2, 1993, and similar no-action letters (including, if
applicable, any no-action letter obtained pursuant to clause (i)
above), and (2) must comply with the registration and prospectus
delivery requirements of the Act in connection with a secondary resale
transaction and that such a secondary resale transaction must be
covered by an effective registration statement containing the selling
security holder information required by Item 507 or 508, as applicable,
of Regulation S-K.
(iii) Prior to effectiveness of the Exchange Offer
Registration Statement, the Company and the Guarantors shall provide a
supplemental letter to the Commission (A) stating that the Company and
the Guarantors are registering the Exchange Offer in reliance on the
position of the Commission enunciated in Exxon Capital Holdings
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Corporation (available May 13, 1988), Morgan Stanley and Co., Inc.
(available June 5, 1991) as interpreted in the Commission's letter to
Shearman & Sterling dated July 2, 1993, and, if applicable, any
no-action letter obtained pursuant to clause (i) above, (B) including a
representation that neither the Company nor any Guarantor has entered
into any arrangement or understanding with any Person to distribute the
Series B Notes to be received in the Exchange Offer and that, to the
best of the Company's and each Guarantor's information and belief, each
Holder participating in the Exchange Offer is acquiring the Series B
Notes in its ordinary course of business and has no arrangement or
understanding with any Person to participate in the distribution of the
Series B Notes received in the Exchange Offer and (C) any other
undertaking or representation required by the Commission as set forth
in any no-action letter obtained pursuant to clause (i) above, if
applicable.
(b) Shelf Registration Statement. In connection with the Shelf
Registration Statement, the Company and the Guarantors shall comply with all the
provisions of Section 6(c) below and shall use their respective best efforts to
effect such registration to permit the sale of the Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof (as indicated in the information furnished to the Company
pursuant to Section 4(b) hereof), and pursuant thereto the Company and the
Guarantors will prepare and file with the Commission a Registration Statement
relating to the registration on any appropriate form under the Act, which form
shall be available for the sale of the Transfer Restricted Securities in
accordance with the intended method or methods of distribution thereof within
the time periods and otherwise in accordance with the provisions hereof.
(c) General Provisions. In connection with any Registration
Statement and any related Prospectus required by this Agreement, the Company and
the Guarantors shall:
(i) use their respective best efforts to keep such
Registration Statement continuously effective and provide all requisite
financial statements for the period specified in Section 3 or 4 of this
Agreement, as applicable. Upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained
therein (A) to contain a material misstatement or omission or (B) not
to be effective and usable for resale of Transfer Restricted Securities
during the period required by this Agreement, the Company and the
Guarantors shall file promptly an appropriate amendment to such
Registration Statement curing such defect, and, if Commission review is
required, use their respective best efforts to cause such amendment to
be declared effective as soon as practicable;
(ii) prepare and file with the Commission such
amendments and post-effective amendments to the applicable Registration
Statement as may be necessary to keep such Registration Statement
effective for the applicable period set forth in Section 3 or 4 hereof,
as the case may be; cause the Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed
pursuant to Rule 424 under the Act, and to comply fully with Rules 424,
430A and 462, as applicable, under the Act in a timely manner; and
comply with the provisions of the
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Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with
the intended method or methods of distribution by the sellers thereof
set forth in such Registration Statement or supplement to the
Prospectus;
(iii) advise the selling Holders promptly and, if
requested by such Persons, confirm such advice in writing, (A) when the
Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to any applicable Registration Statement
or any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus
or for additional information relating thereto, (C) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto or any document
incorporated by reference therein untrue, or that requires the making
of any additions to or changes in the Registration Statement in order
to make the statements therein not misleading, or that requires the
making of any additions to or changes in the Prospectus in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading. If at any time the Commission
shall issue any stop order suspending the effectiveness of the
Registration Statement, or any state securities commission or other
regulatory authority shall issue an order suspending the qualification
or exemption from qualification of the Transfer Restricted Securities
under state securities or Blue Sky laws, the Company and the Guarantors
shall use their respective best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time;
(iv) subject to Section 6(c)(i), if any fact or event
contemplated by Section 6(c)(iii)(D) above shall exist or have
occurred, prepare a supplement or post-effective amendment to the
Registration Statement or related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of Transfer
Restricted Securities, the Prospectus will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(v) furnish to the Initial Purchasers and each
selling Holder named in any Registration Statement or Prospectus in
connection with such sale, if any, before filing with the Commission,
copies of any Registration Statement or any Prospectus included therein
or any amendments or supplements to any such Registration Statement or
Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review and
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comment of such Holders in connection with such sale, if any, for a
period of at least five Business Days, and the Company will not file
any such Registration Statement or Prospectus or any amendment or
supplement to any such Registration Statement or Prospectus (including
all such documents incorporated by reference) to which the selling
Holders of the Transfer Restricted Securities covered by such
Registration Statement in connection with such sale, if any, shall
reasonably object within five Business Days after the receipt thereof.
A selling Holder shall be deemed to have reasonably objected to such
filing if such Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed, contains a material
misstatement or omission or fails to comply with the applicable
requirements of the Act;
(vi) promptly prior to the filing of any document
that is to be incorporated by reference into a Registration Statement
or Prospectus, provide copies of such document to the selling Holders
in connection with such sale, if any, make the Company's and the
Guarantors' representatives available for discussion of such document
and other customary due diligence matters, and include such information
in such document prior to the filing thereof as such selling Holders
may reasonably request;
(vii) make available at reasonable times for
inspection by the selling Holders participating in any disposition
pursuant to such Registration Statement and any attorney or accountant
retained by such selling Holders, all financial and other records,
pertinent corporate documents of the Company and the Guarantors and
cause the Company's and the Guarantors' officers, directors and
employees to supply all information reasonably requested by any such
selling Holder, attorney or accountant in connection with such
Registration Statement or any post-effective amendment thereto
subsequent to the filing thereof and prior to its effectiveness;
(viii) if requested by any selling Holders in
connection with such sale, if any, promptly include in any Registration
Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders may
reasonably request to have included therein, including, without
limitation, information relating to the "Plan of Distribution" of the
Transfer Restricted Securities; and make all required filings of such
Prospectus supplement or post-effective amendment as soon as
practicable after the Company is notified of the matters to be included
in such Prospectus supplement or post-effective amendment;
(ix) furnish to each selling Holder in connection
with such sale, if any, without charge, at least one copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by
reference);
(x) deliver to each selling Holder, without charge,
as many copies of the Prospectus (including each preliminary
prospectus) and any amendment or supplement
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thereto as such Persons reasonably may request; the Company and the
Guarantors hereby consent to the use (in accordance with law) of the
Prospectus and any amendment or supplement thereto by each of the
selling Holders in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto;
(xi) upon the request of any selling Holder, enter
into such agreements (including underwriting agreements) and make such
representations and warranties and take all such other actions in
connection therewith in order to expedite or facilitate the disposition
of the Transfer Restricted Securities pursuant to any applicable
Registration Statement contemplated by this Agreement as may be
reasonably requested by any Holder of Transfer Restricted Securities in
connection with any sale or resale pursuant to any applicable
Registration Statement and in such connection, the Company and the
Guarantors shall:
(A) upon request of any selling Holder, furnish (or
in the case of paragraphs (2) and (3), use its best efforts to
cause to be furnished) to each selling Holder, upon the
effectiveness of the Shelf Registration Statement or upon
Consummation of the Exchange Offer, as the case may be:
(1) a certificate, dated such date, signed on behalf
of the Company and each Guarantor by (x) the President or any
Vice President and (y) a principal financial or accounting
officer of the Company and such Guarantor, confirming, as of
the date thereof, the matters set forth in paragraphs (a)
through (d) of Section 9 of the Purchase Agreement and such
other similar matters as the selling Holders may reasonably
request;
(2) an opinion, dated the date of Consummation of the
Exchange Offer, or the date of effectiveness of the Shelf
Registration Statement, as the case may be, of counsel for the
Company and the Guarantors covering matters similar to those
set forth in paragraph (e) of Section 9 of the Purchase
Agreement and such other matter as the selling Holders may
reasonably request, and in any event including a statement to
the effect that such counsel has participated in conferences
with officers and other representatives of the Company and the
Guarantors, representatives of the independent public
accountants for the Company and the Guarantors and have
considered the matters required to be stated therein and the
statements contained therein, although such counsel has not
independently verified the accuracy, completeness or fairness
of such statements; and that such counsel advises that, on the
basis of the foregoing (relying as to materiality to the
extent such counsel deems appropriate upon the statements of
officers and other representatives of the Company and the
Guarantors and without independent check or verification), no
facts came to such counsel's attention that caused such
counsel to believe that the applicable Registration Statement,
at the time such Registration Statement or any post-effective
amendment thereto became effective and, in the case of the
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Exchange Offer Registration Statement, as of the date of
Consummation of the Exchange Offer, contained an untrue
statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus
contained in such Registration Statement as of its date and,
in the case of the opinion dated the date of Consummation of
the Exchange Offer, as of the date of Consummation, contained
an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading. Without limiting the foregoing,
such counsel may state further that such counsel assumes no
responsibility for, and has not independently verified, the
accuracy, completeness or fairness of the financial
statements, notes and schedules and other financial data
included in any Registration Statement contemplated by this
Agreement or the related Prospectus; and
(3) a customary comfort letter, dated the date of
Consummation of the Exchange Offer, or as of the date of
effectiveness of the Shelf Registration Statement, as the case
may be, from the Company's independent accountants, in the
customary form and covering matters of the type customarily
covered in comfort letters to underwriters in connection with
underwritten offerings, and affirming the matters set forth in
the comfort letters delivered pursuant to Section 8(g) of the
Purchase Agreement; and
(B) deliver such other documents and certificates as
may be reasonably requested by the selling Holders to evidence
compliance with clause (A) above and with any customary
conditions contained in the any agreement entered into by the
Company and the Guarantors pursuant to this clause (xi);
(xii) prior to any public offering of Transfer
Restricted Securities, cooperate with the selling Holders and their
counsel in connection with the registration and qualification of the
Transfer Restricted Securities under the securities or Blue Sky laws of
such jurisdictions as the selling Holders may request and do any and
all other acts or things necessary or advisable to enable the
disposition in such jurisdictions of the Transfer Restricted Securities
covered by the applicable Registration Statement; provided, however,
that neither the Company nor any Guarantor shall be required to
register or qualify as a foreign corporation where it is not now so
qualified or to take any action that would subject it to the service of
process in suits or to taxation, other than as to matters and
transactions relating to the Registration Statement, in any
jurisdiction where it is not now so subject;
(xiii) issue, upon the request of any Holder of
Series A Notes covered by any Shelf Registration Statement contemplated
by this Agreement, Series B Notes having an aggregate principal amount
equal to the aggregate principal amount of Series A Notes surrendered
to the Company by such Holder in exchange therefor or being sold by
such Holder; such Series B Notes to be registered in the name of such
Holder
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or in the name of the purchaser(s) of such Series B Notes, as the case
may be; in return, the Series A Notes held by such Holder shall be
surrendered to the Company for cancellation;
(xiv) in connection with any sale of Transfer
Restricted Securities that will result in such securities no longer
being Transfer Restricted Securities, cooperate with the selling
Holders to facilitate the timely preparation and delivery of
certificates representing Transfer Restricted Securities to be sold and
not bearing any restrictive legends; and to register such Transfer
Restricted Securities in such denominations and such names as the
selling Holders may request at least two Business Days prior to such
sale of Transfer Restricted Securities;
(xv) use their respective best efforts to cause the
disposition of the Transfer Restricted Securities covered by the
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
seller or sellers thereof to consummate the disposition of such
Transfer Restricted Securities, subject to the proviso contained in
clause (xii) above;
(xvi) provide a CUSIP number for all Transfer
Restricted Securities not later than the effective date of a
Registration Statement covering such Transfer Restricted Securities and
provide the Trustee under the Indenture with printed certificates for
the Transfer Restricted Securities which are in a form eligible for
deposit with the Depository Trust Company;
(xvii) otherwise use their respective best efforts to
comply with all applicable rules and regulations of the Commission, and
make generally available to its security holders with regard to any
applicable Registration Statement, as soon as practicable, a
consolidated earnings statement meeting the requirements of Rule 158
(which need not be audited) covering a twelve-month period beginning
after the effective date of the Registration Statement (as such term is
defined in paragraph (c) of Rule 158 under the Act);
(xviii) make appropriate officers of the Company
available to the selling Holders for meetings with prospective
purchasers of the Transfer Restricted Securities and prepare and
present to potential investors customary "road show" material in a
manner consistent with other new issuances of other securities similar
to the Transfer Restricted Securities;
(xix) cause the Indenture to be qualified under the
TIA not later than the effective date of the first Registration
Statement required by this Agreement and, in connection therewith,
cooperate with the Trustee and the Holders to effect such changes to
the Indenture as may be required for such Indenture to be so qualified
in accordance with the terms of the TIA; and execute and use its best
efforts to cause the Trustee to execute, all documents that may be
required to effect such changes and all other forms
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and documents required to be filed with the Commission to enable such
Indenture to be so qualified in a timely manner; and
(xx) provide promptly to each Holder upon request
each document filed with the Commission pursuant to the requirements of
Section 13 or Section 15(d) of the Exchange Act.
(d) Restrictions on Holders. Each Holder agrees by acquisition
of a Transfer Restricted Security that, upon receipt of the notice referred to
in Section 6(c)(iii)(C) or any notice from the Company of the existence of any
fact of the kind described in Section 6(c)(iii)(D) hereof (in each case, a
"Suspension Notice"), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to the applicable Registration Statement
until (i) such Holder's has received copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is
advised in writing by the Company that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus (in each case, the "Recommencement
Date"). Each Holder receiving a Suspension Notice hereby agrees that it will
either (i) destroy any Prospectuses, other than permanent file copies, then in
such Holder's possession which have been replaced by the Company with more
recently dated Prospectuses or (ii) deliver to the Company (at the Company's
expense) all copies, other than permanent file copies, then in such Holder's
possession of the Prospectus covering such Transfer Restricted Securities that
was current at the time of receipt of the Suspension Notice. The time period
regarding the effectiveness of such Registration Statement set forth in Section
3 or 4 hereof, as applicable, shall be extended by a number of days equal to the
number of days in the period from and including the date of delivery of the
Suspension Notice to the date of delivery of the Recommencement Date.
SECTION 7. REGISTRATION EXPENSES
(a) All expenses incident to the Company's and the Guarantors'
performance of or compliance with this Agreement will be borne by the Company,
regardless of whether a Registration Statement becomes effective, including
without limitation: (i) all registration and filing fees and expenses; (ii) all
fees and expenses of compliance with federal securities and state Blue Sky or
securities laws; (iii) all expenses of printing (including printing certificates
for the Series B Notes to be issued in the Exchange Offer and printing of
Prospectuses), messenger and delivery services and telephone; (iv) all fees and
disbursements of counsel for the Company and the Guarantors; (v) all application
and filing fees in connection with listing the Series B Notes on a national
securities exchange or automated quotation system pursuant to the requirements
hereof; and (vi) all fees and disbursements of independent certified public
accountants of the Company and the Guarantors (including the expenses of any
special audit and comfort letters required by or incident to such performance).
The Company will, in any event, bear its and the Guarantors'
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees
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performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company or the Guarantors.
Each Holder shall pay all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of
such Holder's securities.
(b) In connection with any Registration Statement required by
this Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company and the Guarantors
will reimburse the Purchasers and the Holders of Transfer Restricted Securities
being tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
Weil, Gotshal & Manges LLP, unless another firm shall be chosen by the Holders
of a majority in principal amount of the Transfer Restricted Securities for
whose benefit such Registration Statement is being prepared.
SECTION 8. INDEMNIFICATION
(a) The Company and the Guarantors agree, jointly and
severally, to indemnify and hold harmless (i) each Holder and (ii) each person,
if any, who controls (within the meaning of Section 15 of the Act or Section 20
of the Exchange Act) any Holder (any of the persons referred to in this clause
(ii) being hereinafter referred to as a "controlling person") and (iii) the
respective officers, directors, partners, employees, representatives and agents
of any Holder or any controlling person (any person referred to in clause (i),
(ii) or (iii) may hereinafter be referred to as an "Indemnified Holder"), from
and against any and all losses, claims, damages, liabilities, judgments,
(including without limitation, any legal or other expenses incurred in
connection with investigating or defending any matter, including any action that
could give rise to any such losses, claims, damages, liabilities or judgments)
caused by any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, preliminary prospectus or Prospectus
(or any amendment or supplement thereto) provided by the Company to any holder
or any prospective purchaser of Series B Notes, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or judgments are caused by an untrue
statement or omission or alleged untrue statement or omission that is based upon
information relating to any of the Holders furnished in writing to the Company
by any of the Holders.
(b) Each Holder of Transfer Restricted Securities agrees,
severally and not jointly, to indemnify and hold harmless the Company and the
Guarantors, and their respective directors and officers, and each person, if
any, who controls (within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act) the Company, or the Guarantors to the same extent as the
foregoing indemnity from the Company and the Guarantors to each of the
Indemnified Holders, but only with reference to information relating to such
Indemnified
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Holder furnished in writing to the Company by such Indemnified Holder expressly
for use in any Registration Statement. In no event shall any Indemnified Holder
be liable or responsible for any amount in excess of the amount by which the
total amount received by such Indemnified Holder with respect to its sale of
Transfer Restricted Securities pursuant to a Registration Statement exceeds (i)
the amount paid by such Indemnified Holder for such Transfer Restricted
Securities and (ii) the amount of any damages that such Indemnified Holder has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.
(c) In case any action shall be commenced involving any person
in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b)
(the "indemnified party"), the indemnified party shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying person") in
writing and the indemnifying party shall assume the defense of such action,
including the employment of counsel reasonably satisfactory to the indemnified
party and the payment of all fees and expenses of such counsel, as incurred
(except that in the case of any action in respect of which indemnity may be
sought pursuant to both Sections 8(a) and 8(b), an Indemnified Holder shall not
be required to assume the defense of such action pursuant to this Section 8(c),
but may employ separate counsel and participate in the defense thereof, but the
fees and expenses of such counsel, except as provided below, shall be at the
expense of the Indemnified Holder). Any indemnified party shall have the right
to employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
the indemnified party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party, (ii) the
indemnifying party shall have failed to assume the defense of such action or
employ counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the indemnifying party (in which case the indemnifying party shall
not have the right to assume the defense of such action on behalf of the
indemnified party). In any such case, the indemnifying party shall not, in
connection with any one action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel) for all indemnified parties
and all such fees and expenses shall be reimbursed as they are incurred. Such
firm shall be designated in writing by a majority of the Indemnified Holders, in
the case of the parties indemnified pursuant to Section 8(a), and by the
Company, in the case of parties indemnified pursuant to Section 8(b). The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if the settlement is entered into more
than twenty business days after the indemnifying party shall have received a
request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party
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shall, without the prior written consent of the indemnified party, effect any
settlement or compromise of, or consent to the entry of judgment with respect
to, any pending or threatened action in respect of which the indemnified party
is or could have been a party and indemnity or contribution may be or could have
been sought hereunder by the indemnified party, unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability on claims that are or could have been the subject
matter of such action and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.
(d) To the extent that the indemnification provided for in
this Section 8 is unavailable to an indemnified party in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities or judgments (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company and
the Guarantors, on the one hand, and the Holders, on the other hand, from their
sale of Transfer Restricted Securities or (ii) if the allocation provided by
clause 8(d)(i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
8(d)(i) above but also the relative fault of the Company and the Guarantors, on
the one hand, and of the Indemnified Holder, on the other hand, in connection
with the statements or omissions which resulted in such losses, claims, damages,
liabilities or judgments, as well as any other relevant equitable
considerations. The relative fault of the Company and the Guarantors, on the one
hand, and of the Indemnified Holder, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or such Guarantor, on the one
hand, or by the Indemnified Holder, on the other hand, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by a party as a result of
the losses, claims, damages, liabilities and judgments referred to above shall
be deemed to include, subject to the limitations set forth in the second
paragraph of Section 8(a), any legal or other fees or expenses reasonably
incurred by such party in connection with investigating or defending any action
or claim.
The Company, the Guarantors and each Holder agree that it
would not be just and equitable if contribution pursuant to this Section 8(d)
were determined by pro rata allocation (even if the Holders were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to in the immediately
preceding paragraph. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages, liabilities or judgments referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any matter,
including any action that could have given rise to such losses, claims, damages,
liabilities or judgments. Notwithstanding the provisions of this Section 8, no
Holder or its related Indemnified Holders shall be required to contribute, in
the aggregate, any amount in excess of the amount by which the total received by
such Holder
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with respect to the sale of its Transfer Restricted Securities pursuant to a
Registration Statement exceeds the sum of (A) the amount paid by such Holder for
such Transfer Restricted Securities plus (B) the amount of any damages which
such Holder has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders' obligations to contribute pursuant to
this Section 8(c) are several in proportion to the respective principal amount
of Transfer Restricted Securities held by each of the Holders hereunder and not
joint.
SECTION 9. RULE 144A
The Company and each Guarantor hereby agrees with each Holder,
for so long as any Transfer Restricted Securities remain outstanding and during
any period in which the Company or such Guarantor is not subject to Section 13
or 15(d) of the Securities Exchange Act, to make available, upon request of any
Holder of Transfer Restricted Securities, to any Holder or beneficial owner of
Transfer Restricted Securities in connection with any sale thereof and any
prospective purchaser of such Transfer Restricted Securities designated by such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under
the Act in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144A.
SECTION 10. MISCELLANEOUS
(a) Remedies. The Company and the Guarantors acknowledge and
agree that any failure by the Company and/or the Guarantors to comply with their
respective obligations under Sections 3 and 4 hereof may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the Initial
Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Company's and the Guarantors' obligations under
Sections 3 and 4 hereof. The Company and the Guarantors further agree to waive
the defense in any action for specific performance that a remedy at law would be
adequate.
(b) No Inconsistent Agreements. Neither the Company nor any
Guarantor will, on or after the date of this Agreement, enter into any agreement
with respect to its securities that is inconsistent with the rights granted to
the Holders in this Agreement or otherwise conflicts with the provisions hereof.
Neither the Company nor any Guarantor has previously entered into any agreement
granting any registration rights with respect to its securities to any Person.
The rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's and
the Guarantors' securities under any agreement in effect on the date hereof.
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(c) Amendments and Waivers. The provisions of this Agreement
may not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given unless (i) in the case of
Section 5 hereof and this Section 10(c)(i), the Company has obtained the written
consent of Holders of all outstanding Transfer Restricted Securities and (ii) in
the case of all other provisions hereof, the Company has obtained the written
consent of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities (excluding Transfer Restricted Securities held by the
Company of its Affiliates). Notwithstanding the foregoing, a waiver or consent
to departure from the provisions hereof that relates exclusively to the rights
of Holders whose securities are being tendered pursuant to the Exchange Offer
and that does not affect directly or indirectly the rights of other Holders
whose securities are not being tendered pursuant to such Exchange Offer may be
given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities subject to such Exchange Offer.
(d) Third Party Beneficiary. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Company and the
Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and
shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect its rights or the rights
of Holders hereunder.
(e) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, first-class
mail (registered or certified, return receipt requested), telex, telecopier, or
air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the
records of the Registrar under the Indenture, with a copy to the
Registrar under the Indenture; and
(ii) if to the Company or the Guarantors:
Wheeling-Pittsburgh Corporation
1134 Market Street
Wheeling, West Virginia 26003
Telecopier No.: (304) 234-2555
Attention: John W. Testa, Treasurer
and
WHX Corporation
110 East 59th Street, 30th Floor
New York, New York 10022
Telecopier No.: (212) 355-5336
Attention: Stewart E. Tabin,
Assistant Treasurer
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With a copy to:
Olshan Grundman Frome & Rosenzweig LLP
505 Park Avenue
New York, New York 10022
Telecopier No.: (212) 755-1467
Attention: Steven Wolosky, Esq.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when receipt acknowledged, if telecopied; and on the next business day, if
timely delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications
shall be concurrently delivered by the Person giving the same to the Trustee at
the address specified in the Indenture.
Upon the date of filing of the Exchange Offer or a Shelf
Registration Statement, as the case may be, notice shall be delivered to c/o
Donaldson, Lufkin & Jenrette Securities Corporation, on behalf of the Initial
Purchasers (in the form attached hereto as Exhibit A) and shall be addressed to:
Attention: Louise Guernari (Compliance Department), 277 Park Avenue, New York,
New York 10172.
(f) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided, that
nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Transfer Restricted Securities in violation of the terms hereof
or of the Purchase Agreement or the Indenture. If any transferee of any Holder
shall acquire Transfer Restricted Securities in any manner, whether by operation
of law or otherwise, such Transfer Restricted Securities shall be held subject
to all of the terms of this Agreement, and by taking and holding such Transfer
Restricted Securities such Person shall be conclusively deemed to have agreed to
be bound by and to perform all of the terms and provisions of this Agreement,
including the restrictions on resale set forth in this Agreement and, if
applicable, the Purchase Agreement, and such Person shall be entitled to receive
the benefits hereof.
(g) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
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(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
(k) Entire Agreement. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein. There are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted with respect to the
Transfer Restricted Securities. This Agreement supersedes all prior agreements
and understandings between the parties with respect to such subject matter.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
WHEELING-PITTSBURGH CORPORATION
By:______________________________________
Name:
Title:
WHEELING-PITTSBURGH STEEL CORPORATION
By:______________________________________
Name:
Title:
CONSUMERS MINING COMPANY
By:___________________________________
Name:
Title:
WHEELING-EMPIRE COMPANY
By:______________________________________
Name:
Title:
MINGO OXYGEN COMPANY
By:______________________________________
Name:
Title:
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PITTSBURGH-CANFIELD CORPORATION
By:______________________________________
Name:
Title:
WHEELING CONSTRUCTION PRODUCTS, INC.
By:______________________________________
Name:
Title:
WP STEEL VENTURE CORPORATION
By:______________________________________
Name:
Title:
CHAMPION METAL PRODUCTS, INC.
By:______________________________________
Name:
Title:
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
By: _________________________
Name:
Title:
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CITICORP SECURITIES, INC.
By:_______________________________
Name:
Title:
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EXHIBIT A
NOTICE OF FILING OF
A/B EXCHANGE OFFER REGISTRATION STATEMENT
To: Donaldson, Lufkin & Jenrette Securities Corporation
Citicorp Securities, Inc.
c/o Donaldson, Lufkin & Jenrette Securities Corporation
277 Park Avenue
New York, New York 10172
Attention: Louise Guernari (Compliance Department)
Fax: (212) 892-7272
From: Wheeling-Pittsburgh Corporation
9 1/4% Series A Senior Notes due 2007
Date: __________________, 199_
For your information only (NO ACTION REQUIRED):
Today, ________________, 199_, we filed [an A/B Exchange Registration
Statement/a Shelf Registration Statement] with the Securities and Exchange
Commission. We currently expect this registration statement to be declared
effective within ____ business days of the date hereof.
