Transaction Valuation* | Amount of Filing Fee** | ||||||
$3,044,605,405.88
|
$ | 353,478.69 | |||||
* | The transaction valuation is an estimate calculated solely for purposes of determining the amount of the filing fee. The transaction valuation is equal to the sum of (a) an amount equal to $14.60, the per share tender offer price, multiplied by the sum of (1) 204,175,202, the number of shares of common stock issued and outstanding (including 1,099,651 shares of restricted stock and not including 96,914 shares of common stock held in treasury), and (2) 353,927, the number of shares of common stock subject to issued and outstanding restricted share unit awards, plus (b) an amount equal to 6,315,348, the number of shares of common stock subject to outstanding stock options with an exercise price less than $14.60, multiplied by the difference of $14.60 and $5.34, the average weighted exercise price of the outstanding stock options with exercise prices less than $14.60. The share figures in this transaction valuation are as of May 12, 2011, the most recent practicable date. | |
** | The amount of the filing fee is calculated in accordance with Rule 0-11 of the Securities Exchange Act of 1934, as amended, and Fee Advisory #5 for fiscal year 2011, issued December 22, 2010, by multiplying the transaction valuation by 0.0001161. | |
þ | Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
o | Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer. |
þ | third-party tender offer subject to Rule 14d-1. | ||
o | issuer tender offer subject to Rule 13e-4. | ||
o | going-private transaction subject to Rule 13e-3. | ||
o | amendment to Schedule 13D under Rule 13d-2. |
Year Ending December 31, | ||||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |||||||||||||||||||
Total Revenue |
$ | 1,278 | $ | 1,406 | $ | 1,576 | $ | 1,872 | $ | 2,048 | $ | 2,129 | ||||||||||||
EBITDA(1) |
257 | 312 | 365 | 574 | 693 | 711 | ||||||||||||||||||
Capital Expenditures |
230 | 241 | 204 | 198 | 196 | 117 | ||||||||||||||||||
Operating Statistics |
||||||||||||||||||||||||
Total Tons Sold (mm) |
16.5 | 17.0 | 18.8 | 21.0 | 22.1 | 22.3 | ||||||||||||||||||
Total Average Price per Ton ($) |
$ | 72.78 | $ | 78.03 | $ | 80.16 | $ | 85.88 | $ | 90.02 | $ | 92.89 | ||||||||||||
Total Cost per Ton ($) |
$ | 55.88 | $ | 58.48 | $ | 59.10 | $ | 56.97 | $ | 56.98 | $ | 59.25 |
Year Ending December 31, | ||||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |||||||||||||||||||
Total Revenue |
$ | 1,352 | $ | 1,573 | $ | 1,756 | $ | 2,071 | $ | 2,267 | $ | 2,354 | ||||||||||||
EBITDA(1) |
323 | 453 | 513 | 746 | 886 | 912 | ||||||||||||||||||
Capital Expenditures |
242 | 249 | 206 | 199 | 197 | 118 | ||||||||||||||||||
Operating Statistics |
||||||||||||||||||||||||
Total Tons Sold (mm) |
16.6 | 17.3 | 19.1 | 21.4 | 22.5 | 22.7 | ||||||||||||||||||
Total Average Price per Ton ($) |
$ | 76.55 | $ | 86.50 | $ | 88.10 | $ | 93.68 | $ | 98.26 | $ | 101.35 | ||||||||||||
Total Cost per Ton ($) |
$ | 55.90 | $ | 59.13 | $ | 59.71 | $ | 57.20 | $ | 57.18 | $ | 59.39 |
(1) | EBITDA is a non-GAAP measure and is used by ICGs management to measure the operating performance of its business. ICG defines EBITDA as net income or loss attributable to ICG before deducting interest, income taxes, depreciation, depletion and amortization. We have been advised that management of ICG believes EBITDA is a useful measure as it is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in ICGs industry, substantially all of which present EBITDA or Adjusted EBITDA when reporting their results. |
Year Ending December 31, | ||||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |||||||||||||||||||
Net Income |
$ | 81 | $ | 116 | $ | 134 | $ | 256 | $ | 307 | $ | 328 | ||||||||||||
Reconciling Items: |
||||||||||||||||||||||||
Depreciation, Depletion and Amortization |
121 | 128 | 151 | 181 | 221 | 203 | ||||||||||||||||||
Interest Expense, net |
33 | 36 | 42 | 46 | 53 | 52 | ||||||||||||||||||
Income Tax Expense |
22 | 32 | 38 | 91 | 112 | 128 | ||||||||||||||||||
EBITDA |
$ | 257 | $ | 312 | $ | 365 | $ | 574 | $ | 693 | $ | 711 | ||||||||||||
Year Ending December 31, | ||||||||||||||||||||||||
2011 | 2012 | 2013 | 2014 | 2015 | 2016 | |||||||||||||||||||
Net Income |
$ | 144 | $ | 231 | $ | 251 | $ | 384 | $ | 447 | $ | 472 | ||||||||||||
Reconciling Items: |
||||||||||||||||||||||||
Depreciation, Depletion and Amortization |
107 | 123 | 151 | 180 | 223 | 204 | ||||||||||||||||||
Interest Expense, net |
31 | 35 | 41 | 45 | 52 | 52 | ||||||||||||||||||
Income Tax Expense |
41 | 64 | 70 | 137 | 164 | 184 | ||||||||||||||||||
EBITDA |
$ | 323 | $ | 453 | $ | 513 | $ | 746 | $ | 886 | $ | 912 | ||||||||||||
Exhibit No. | Description | |
(a)(5)(E) | Memorandum of Understanding, dated as of May 26, 2011. |
|
(d)(6) | Amendment to Agreement and Plan of Merger, dated as of May
26, 2011 among Arch Coal, Inc., Atlas Acquisition Corp. and
International Coal Group, Inc. |
Date: May 27, 2011 ATLAS ACQUISITION CORP. |
||||
By: | /s/ John W. Eaves | |||
Name: | John W. Eaves | |||
Title: | President | |||
ARCH COAL, INC. |
||||
By: | /s/ John W. Eaves | |||
Name: | John W. Eaves | |||
Title: | President and Chief Operating Officer | |||
Exhibit No. | Description | |
(a)(1)(A) | Offer to Purchase dated May 16, 2011.* |
|
(a)(1)(B) | Letter of Transmittal (including Form W-9).* |
|
(a)(1)(C) | Notice of Guaranteed Delivery.* |
|
(a)(1)(D) | Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees.* |
|
(a)(1)(E) | Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust Companies and Other
Nominees.* |
|
(a)(1)(F) | Summary Newspaper Advertisement published in The Wall Street Journal on May 16, 2011.* |
|
(a)(5)(A) | Joint Press Release issued by Arch Coal, Inc. and International Coal Group, Inc. on May 2,
2011 (incorporated in this Schedule TO by reference to the Current Report on Form 8-K
filed by Arch Coal, Inc. on May 3, 2011). |
|
(a)(5)(B) | Transcript of Investor Call regarding announcement of Merger Agreement (incorporated in
this Schedule TO by reference to the Schedule TO-C filed by Arch Coal, Inc. on May 3,
2011). |
|
(a)(5)(C) | Investor Presentation (incorporated in this Schedule TO by reference to the Schedule TO-C
filed by Arch Coal, Inc. on May 3, 2011). |
|
(a)(5)(D) | Joint Press Release issued by Arch Coal, Inc. and International Coal Group, Inc. on May
16, 2011.* |
|
(a)(5)(E) | Memorandum of Understanding, dated as of May 26, 2011. |
|
(b)(1) | Debt Commitment Letter dated as of May 2, 2011 by and among Morgan Stanley Senior Funding,
Inc., PNC Bank, National Association, PNC Capital Markets LLC and Arch Coal, Inc.
(incorporated in this Schedule TO by reference to the Schedule TO-C filed by Arch Coal,
Inc. on May 3, 2011). |
|
(d)(1) | Agreement and Plan of Merger dated as of May 2, 2011 among Arch Coal, Inc., Atlas
Acquisition Corp. and International Coal Group, Inc. (incorporated in this Schedule TO by
reference to the Current Report on Form 8-K filed by Arch Coal, Inc. on May 3, 2011). |
|
(d)(2) | Tender and Voting Agreement dated as of May 2, 2011 by and among Arch Coal, Inc., Atlas
Acquisition Corp. and certain stockholders of International Coal Group, Inc. (incorporated
in this Schedule TO by reference to the Current Report on Form 8-K filed by Arch Coal,
Inc. on May 3, 2011). |
|
(d)(3) | Tender and Voting Agreement dated as of May 2, 2011 by and among Arch Coal, Inc., Atlas
Acquisition Corp. and certain stockholders of International Coal Group, Inc. (incorporated
in this Schedule TO by reference to the Current Report on Form 8-K filed by Arch Coal,
Inc. on May 3, 2011). |
|
(d)(4) | Non-Disclosure Agreement dated as of February 25, 2011 between International Coal Group,
Inc. and Arch Coal, Inc.* |
|
(d)(5) | Letter Agreement dated as of March 15, 2011 between International Coal Group, Inc. and
Arch Coal, Inc.* |
|
(d)(6) | Amendment to Agreement and Plan of Merger, dated as of May 26, 2011 among Arch Coal,
Inc., Atlas Acquisition Corp. and International Coal Group, Inc. |
|
(g) | Not applicable. |
|
(h) | Not applicable. |
* | Previously filed. |
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1. | Supplemental Disclosures and Merger Agreement Revisions. In consideration for the full settlement and release of all of the Released Claims (defined below) and as a result of the pendency and prosecution of the Consolidated Delaware Action, ICG will make additional disclosures identified in the document attached hereto as Exhibit A (the Supplemental Disclosures) in an amendment to the 14D-9 to be filed with the SEC no later than May 27, 2011 and to revise the Proposed Transaction Merger Agreement to reduce the Company Termination Fee (the Termination Fee) by $10 million, to $105 million. | |
2. | Confirmatory Discovery. Plaintiffs in the Consolidated Delaware Action shall have the right to conduct additional discovery to confirm the fairness of the Settlement as reasonable and necessary, the scope of which shall be agreed upon by the parties. | |
3. | Certification of Class. The Settlement Agreement shall provide for the conditional certification in the Consolidated Delaware Action, for settlement purposes only, of a non-opt-out class pursuant to Court of Chancery Rules 23(a), 23(b)(1) and 23(b)(2) that includes any and all record holders and beneficial owners of ICG common stock who held any such share(s) at any time between and including May 2, 2011 and the effective date of consummation of the Proposed Transaction, and their respective successors in interest, successors, predecessors in interest, predecessors, representatives, trustees, executors, administrators, heirs, assigns or transferees, immediate and remote, and any person or entity acting for or on behalf of, or claiming under, any of them, and each of them, together with their predecessors and successors and assigns, but excluding the specifically named Defendants (the Class). | |
4. | Representations of the Parties and Counsel. Defendants deny and continue to deny that they have committed or aided or abetted in the commission of any unlawful or wrongful act alleged in the Consolidated Delaware Action or the West Virginia Actions, maintain that they diligently and scrupulously complied with their fiduciary duties (to the extent such duties exist), that the 14D-9 contains all material information necessary for ICG stockholders to make a fully-informed decision on the Proposed Transaction and deny that any additional disclosure (including without limitation the Supplemental Disclosure described in Paragraph |
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1 hereof) is necessary, and Defendants are entering into this MOU solely because the proposed settlement will eliminate the burden of litigation. Plaintiffs Co-Lead Counsel believe that Defendants would assert significant legal and factual defenses to Plaintiffs claims made in the Consolidated Delaware Action and, as a result, that the terms of this MOU and the terms of the Proposed Transaction are fair, reasonable, adequate, and in the best interest of all members of the Class. Plaintiffs Co-Lead Counsel further represent that none of the Released Claims or causes of action referred to in this MOU have been assigned, encumbered, or otherwise transferred, in whole or in part. Teri Kirby, Hillary Kramer and/or Isak Isakov, who will seek to be class representative(s) in connection with the approval of the proposed settlement (Lead Plaintiffs), each represent and warrant that they have been a shareholder in ICG throughout the period referenced in Paragraph 3 and that they have not assigned, encumbered, or in any manner transferred in whole or in part the claims in the Consolidated Delaware Action. Each of the undersigned attorneys affirms that he or she has been duly empowered and authorized to enter into this MOU. | ||
5. | Modifications to Proposed Transaction. Plaintiffs acknowledge and agree that Purchaser and/or ICG may make further amendments or modifications to the Proposed Transaction not described here prior to the effective date of the Proposed Transaction to facilitate the consummation of the Proposed Transaction. Plaintiffs agree that they will not challenge or object to any such amendments or modifications so long as they are not inconsistent with the material terms of the Settlement set forth in this MOU or the fiduciary duties, if any, of any defendants. | |
6. | Stay Pending Court Approval. Pending negotiation, execution and Final Approval (defined below) of the Settlement Agreement and Settlement by the Delaware Court, Lead Plaintiffs agree to stay the proceedings in the Consolidated Delaware Action and to stay and not to initiate any other proceedings other than those incident to the Settlement itself and, if necessary, request and stipulate that the Delaware Court enter an order staying the Consolidated Delaware Action. Upon the execution of this MOU, the parties agree that, except as provided herein, all outstanding discovery obligations (including non-party discovery obligations) will be stayed without date and to jointly request that the Court stay any further proceedings in the Action pending submission of the Settlement for the Courts approval. Counsel to the parties further agree not to initiate any proceedings other than those incident to effecting the Settlement itself, not to seek any interim relief in favor of any member of the Class, and to seek to remove or withdraw any pending requests for interim relief (including, but not limited to, preliminary injunction motions in the Action). The Parties respective deadlines to respond to any filed or served pleadings or discovery requests are extended indefinitely. As used in this MOU, the term Final Approval of the Settlement means that the Delaware Court has entered a final order and judgment certifying the Class, approving the Settlement, dismissing the Consolidated Delaware Action with prejudice on the merits and with each party to bear its own costs (except those costs set forth in paragraphs 8 and 9 below) and providing for such release language as set forth in paragraph 7 below, and that such final order and judgment is final and no longer subject to further appeal or review, whether by affirmance on or exhaustion of any possible appeal or review, writ of |
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certiorari, lapse of time or otherwise; provided, however, and notwithstanding any provision to the contrary in this MOU, Final Approval shall not include (and the Settlement is expressly not conditioned on) the approval of attorneys fees and the reimbursement of expenses to Plaintiffs Co-Lead Counsel as provided in paragraph 9 below, and any appeal related thereto. The Parties also agree to use their best efforts to prevent, stay or seek dismissal of or oppose entry of any interim or final relief in favor of any member of the Class in any other litigation against any of the Parties to this MOU which challenges the Settlement, the Proposed Transaction, including any transactions contemplated thereby, or otherwise involves, directly or indirectly, a Released Claim (defined below). | ||
7. | Dismissal With Prejudice, Waiver & General Release. The Settlement Agreement shall expressly provide, among other things: |
a) | for the full and complete discharge, dismissal with prejudice on the merits, settlement and release of, and a permanent injunction barring, any and all manner of claims, demands, rights, liabilities, losses, obligations, duties, damages, costs, debts, expenses, interest, penalties, sanctions, fees, attorneys fees, actions, potential actions, causes of action, suits, agreements, judgments, decrees, matters, issues and controversies of any kind, nature or description whatsoever, whether known or unknown, disclosed or undisclosed, accrued or unaccrued, apparent or not apparent, foreseen or unforeseen, matured or not matured, suspected or unsuspected, liquidated or not liquidated, fixed or contingent, including Unknown Claims (defined below), that Plaintiffs or any or all members of the Class ever had, now have, or may have, or otherwise could, can or might assert, whether direct, derivative, individual, class, representative, legal, equitable or of any other type, or in any other capacity, against any of the Released Parties (defined below), whether based on state, local, foreign, federal, statutory, regulatory, common or other law or rule (including but not limited to any claims under federal securities laws or state disclosure law or any claims that could be asserted derivatively on behalf of ICG), which, now or hereafter, are based upon, arise out of, relate in any way to, or involve, directly or indirectly, any of the actions, transactions, occurrences, statements, representations, misrepresentations, omissions, allegations, facts, practices, events, claims or any other matters, things or causes whatsoever, or any series thereof, that were, could have been, or in the future can or might be alleged, asserted, set forth, claimed, embraced, involved, or referred to in, or related to, directly or indirectly, the Consolidated Delaware Action or the subject matter of the Consolidated Delaware Action in any court, tribunal, forum or proceeding, including, without limitation, any and all claims which are based upon, arise out of, relate in any way to, or involve, directly or indirectly, (i) the Proposed Transaction or the issuance of any securities in connection therewith, (ii) any deliberations or negotiations in |
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connection with the Proposed Transaction, including the process of deliberation or negotiation by each of Purchaser and/or ICG and any of their respective officers, directors or advisors, (iii) the consideration to be received by Class members in connection with the Proposed Transaction, (iv) the 14D-9, the Supplemental Disclosures or any other disclosures, SEC filings, public filings, periodic reports, press releases, proxy statements or other statements issued, made available or filed relating, directly or indirectly, to the Proposed Transaction, including without limitation claims under any and all federal securities laws (including those within the exclusive jurisdiction of the federal courts), (v) the fiduciary obligations of the Released Parties (defined below) in connection with the Proposed Transaction, (vi) the fees, expenses or costs incurred in prosecuting, defending, or settling the Consolidated Delaware Action except for the Fee Application as described in paragraph 9 below, (vii) any of the allegations in any complaint or amendment(s) thereto filed in the Consolidated Delaware Action; or (viii) any deliberations, negotiations, representations, omissions or other conduct leading to the execution of this MOU or the Settlement Agreement (collectively, the Released Claims); provided, however, that the Released Claims shall not include (x) the right to enforce this MOU, the Settlement or the Settlement Agreement or (y) claims for statutory appraisal in connection with the Proposed Transaction by ICG stockholders who properly perfect such appraisal claims and do not otherwise waive their appraisal rights; | |||
b) | that Released Parties means, whether or not each or all of the following persons or entities were named, served with process or appeared in the Consolidated Delaware Action, (i) International Coal Group, Inc., Arch Coal, Inc., Atlas Acquisition Corp., Wilbur L. Ross, Jr., Bennett K. Hatfield, Cynthia B. Bezik, Maurice E. Carino, Jr., William J. Catacosinos, Stanley N. Gaines, Samuel A. Mitchell, Wendy L. Teramoto, (ii) any person or entity which is, or was related to or affiliated with any or all of them or in which any or all of them has or had a controlling interest, and (iii) the respective past and present family members, spouses, heirs, trusts, trustees, executors, estates, administrators, beneficiaries, distributees, foundations, agents, employees, fiduciaries, partners, partnerships, general or limited partners or partnerships, joint ventures, member firms, limited liability companies, corporations, parents, subsidiaries, divisions, affiliates, associated entities, shareholders, principals, officers, directors, managing directors, members, managers, managing members, managing agents, predecessors, predecessors-in-interest, successors, successors-in-interest, assigns, advisors, consultants, bankers, entities providing any fairness opinion, underwriters, brokers, dealers, lenders, attorneys, personal or legal |
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representatives, accountants, insurers, co-insurers, reinsurers, and associates, of each and all of the foregoing; | |||
c) | that Unknown Claims means any claim that Lead Plaintiffs or any member of the Class do not know or suspect exists in his, her or its favor at the time of the release of the Released Claims as against the Released Parties, including without limitation those which, if known, might have affected the decision to enter into the Settlement. With respect to any of the Released Claims, the Parties stipulate and agree that upon Final Approval of the Settlement, Lead Plaintiffs shall expressly and each member of the Class shall be deemed to have, and by operation of the final order and judgment by the Delaware Court shall have, expressly waived, relinquished and released any and all provisions, rights and benefits conferred by or under Cal. Civ. Code § 1542 or any law of the United States or any state of the United States or territory of the United States, or principle of common law, which governs or limits a persons release of unknown claims and/or is similar, comparable or equivalent to Cal. Civ. Code § 1542, which provides: |
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. | |||
Plaintiffs acknowledge, and the members of the Class by operation of law shall be deemed to have acknowledged, that they may discover facts in addition to or different from those now known or believed to be true with respect to the Released Claims, but that it is the intention of Lead Plaintiffs, and by operation of law the members of the Class, to completely, fully, finally and forever extinguish any and all Released Claims, known or unknown, suspected or unsuspected, which now exist, or heretofore existed, or may hereafter exist, and without regard to the subsequent discovery of additional or different facts. Lead Plaintiffs acknowledge, and the members of the Class by operation of law shall be deemed to have acknowledged, that the inclusion of Unknown Claims in the definition of Released Claims was separately bargained for and was a material element of the Settlement and was relied upon by each and all of Defendants in entering into the Settlement Agreement; |
d) | that Defendants release all claims against Lead Plaintiffs, members of the Class, and their counsel arising out of or relating to the institution, prosecution, and resolution of the Consolidated Delaware Action (the Release of Plaintiffs); provided, however, that the Release of Plaintiffs |
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shall not include the right to enforce the confidentiality stipulation agreed upon by the Parties, this MOU or the Settlement Agreement; | |||
e) | that all Defendants have vigorously denied, and continue to vigorously deny, any wrongdoing or liability with respect to all claims asserted in the Consolidated Delaware Action, including that they have committed any violations of law, that they have acted improperly in any way, that they have any liability or owe any damages of any kind to Lead Plaintiffs and/or the Class, and that any additional disclosures (including the additional disclosures made in the Supplemental Disclosures) are required under any applicable rule, regulation, statute, or law, but are entering into this MOU and will execute the Settlement Agreement solely because they consider it desirable that the Consolidated Delaware Action be settled and dismissed with prejudice in order to, among other things, (i) eliminate the burden, inconvenience, expense, risk and distraction of further litigation, (ii) finally put to rest and terminate all the claims which were or could have been asserted against Defendants in the Consolidated Delaware Action, and (iii) thereby permit the Proposed Transaction to proceed without risk of injunctive or other relief; | ||
f) | that all Defendants shall have the right to withdraw from the Settlement in the event that (i) any court temporarily, preliminarily or permanently enjoins or otherwise precludes the Proposed Transaction or any part thereof, or (ii) any claim related to the subject matter of the Consolidated Delaware Action, the Proposed Transaction, or the Released Claims is commenced or prosecuted against any of the Released Parties in any court prior to Final Approval of the Settlement, and (following a motion by any Released Party) any such claim is not dismissed with prejudice or stayed in contemplation of dismissal with prejudice following Final Approval. In the event that any such claim is commenced or prosecuted against any of the Released Parties, the Plaintiffs will cooperate with Defendants in Defendants efforts to secure the dismissal with prejudice (or a stay in contemplation of dismissal with prejudice, following Final Approval of the Settlement) thereof; | ||
g) | for entry of a final and binding judgment dismissing the Consolidated Delaware Action with prejudice (whether voluntary or involuntary) and, except as set forth in paragraphs 8 and 9 herein, without costs to any Party; | ||
h) | that the Settlement and the payment of any attorneys fees awarded by the Delaware Court is expressly conditioned upon the Proposed Transaction becoming effective under Delaware law; and |
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i) | that in the event the Settlement does not become final for any reason, Defendants reserve the right to oppose certification of any plaintiff class in future proceedings. |
8. | Notice. ICG shall be responsible for providing notice of the Settlement to the members of the Class and ICG or its successor(s) in interest shall pay all reasonable costs and expenses incurred in providing notice of the Settlement to the members of the Class. | |
9. | Fees. Plaintiffs and Plaintiffs Co-Lead Counsel intend to petition the Delaware Court for an award of fees and expenses in connection with the Consolidated Delaware Action (the Fee Application). Defendants reserve all rights with respect to the Fee Application. The Fee Application shall be Plaintiffs and/or Plaintiffs Co-Lead Counsels sole application for an award of fees or expenses in connection with any litigation concerning the Proposed Transaction. Final resolution by the Delaware Court of the Fee Application shall not be a precondition to the dismissal of the Consolidated Delaware Action in accordance with the Settlement Agreement, and the Settlement Agreement shall provide that the Fee Application may be considered separately from the proposed Settlement. The Parties acknowledge and agree that ICG or its successor(s) in interest shall cause to be paid on behalf of the ICG directors and ICG, any fees and expenses awarded by the Delaware Court to Plaintiffs Co-Lead Counsel. Subject to the terms and conditions of this MOU, and the terms and conditions of the Settlement contemplated hereby, ICG or its successor(s) in interest shall, within ten (10) business days after the date of any order awarding attorneys fees and/or expenses to Plaintiffs Co-Lead Counsel becomes final and no longer subject to further appeal or review, whether by affirmance on or exhaustion of any possible appeal or review, writ of certiorari, lapse of time or otherwise (the Fee Payment Date), pay or cause to be paid the amount of such award to Faruqi & Faruqi for distribution to and among Plaintiffs Co-Lead Counsel. Notwithstanding any other provision of this MOU, no fees or expenses shall be due or payable to Plaintiffs Co-Lead Counsel in the absence of consummation of the Proposed Transaction, Final Approval of a final order and judgment entered by the Delaware Court which contains a release of the Released Claims, and dismissal with prejudice of the claims asserted against the Defendants in the Consolidated Delaware Action. Any such payment shall be made subject to Plaintiffs Co-Lead Counsels joint and several obligations to make refunds or repayment to ICG (or any successor entity) if any specified condition to the Settlement is not satisfied or, as a result of any appeal and/or further proceedings on remand, or successful collateral attack, any dismissal order is reversed or the fee or costs award is reduced or reversed. | |
10. | Approval. The Settlement Agreement is subject to Delaware Court approval, including the Fee Application referred to in foregoing paragraph; provided, however, that the Delaware Courts approval of the Settlement is not contingent on its approval of the Fee Application. The Parties will attempt in good faith and use their best efforts to negotiate and mutually agree promptly upon the content and form of all documentation as may be required to obtain Final Approval of the Settlement and dismissal of the Consolidated Delaware Action. |
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11. | Binding Effect. This MOU is subject to the following, which the Parties agree to use their best efforts to achieve: (a) the drafting and execution of a definitive Settlement Agreement by the Parties (and such other documentation as may be required to obtain final approval by the Delaware Court of the Settlement); (b) Final Approval of the Settlement by the Court; (c) dismissal with prejudice of the Consolidated Delaware Action as to all members of the Class (including Lead Plaintiffs) and entry by the Delaware Court of a final order and judgment containing such release language as is contained in the Settlement Agreement; and (d) the consummation of the Proposed Transaction. This MOU shall be rendered null and void and of no force and effect in the event that Final Approval of the Settlement fails to occur, any court temporarily, preliminarily or permanently enjoins or otherwise precludes the Proposed Transaction or any part thereof or the Proposed Transaction is not consummated for any reason. Additionally, all Defendants may, but are not obligated to, render this MOU null and void in the event that any Released Claims are prosecuted against any of the Released Parties and (subject to a motion by such defendant Released Party(ies)) such claims are not dismissed with prejudice or stayed in contemplation of dismissal of the Consolidated Delaware Action. In any event of nullification of this MOU, the Parties shall be deemed to be in the position they were in prior to the execution of this MOU and the statements made herein and in connection with the negotiation of the MOU or the Settlement shall not be deemed to prejudice in any way the positions of the Parties with respect to the Consolidated Delaware Action, or to constitute an admission of fact of wrongdoing by any Party, shall not be used by or entitle any Party to recover any fees, costs or expenses incurred in connection with the Consolidated Delaware Action, and neither the existence of this MOU nor its contents nor any statements made in connection with the negotiation of this MOU or any settlement communications shall be admissible in evidence or shall be referred to for any purpose in the Consolidated Delaware Action, or in any other litigation or judicial proceeding. | |
12. | Return of Documents. Plaintiffs Co-Lead Counsel agree that within ten (10) days of Final Approval of the Settlement, they will return to the producing party all discovery material obtained from the producing party, including all documents produced by and/or deposition testimony given by, any of Defendants (including, without limitation, their employees, affiliates, agents, representatives, attorneys, and third party advisors) and any materials containing or reflecting discovery material (herein Discovery Material), or certify in writing that such Discovery Material has been destroyed; provided, however, that Plaintiffs Co-Lead Counsel shall be entitled to retain all filings, court papers, and attorney work product containing or reflecting Discovery Material, subject to the requirement that Plaintiffs Co-Lead Counsel shall not disclose any Discovery Material contained or referenced in such materials to any person except pursuant to court order or agreement with Defendants. The Parties agree to submit to the Delaware Court any dispute concerning the return or destruction of Discovery Material. | |
13. | No Admission. The fact of and provisions contained in this MOU, and all negotiations, discussions, actions and proceedings in connection with this MOU shall not be deemed or constitute a presumption, concession or an admission by any Party, any signatory hereto or |
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any Released Party of any fault, liability or wrongdoing or lack of any fault, liability or wrongdoing, as to any facts or claims alleged or asserted in the Consolidated Delaware Action or any other actions or proceedings, and shall not be interpreted, construed, deemed, involved, invoked, offered or received in evidence or otherwise used by any person in the Consolidated Delaware Action or any other action or proceeding, whether civil, criminal or administrative, except in connection with any proceeding to enforce the terms of this MOU. The fact of and provisions contained in this MOU, and all negotiations, discussions, actions and proceedings leading up to the execution of this MOU, are confidential and intended for settlement discussions only. If the Settlement does not receive Final Approval, the Parties shall revert to their respective litigation positions as if this MOU never existed. | ||
14. | Choice of Law and Forum Selection. This MOU, the Settlement Agreement and Settlement contemplated by it, and any dispute arising out of or relating in any way to this MOU, the Settlement Agreement or the Settlement, whether in contract, tort or otherwise, shall be governed by and construed in accordance with the laws of the state of Delaware, without regard to conflict of laws principles. Each of the Parties (a) irrevocably submits to the personal jurisdiction of any state court sitting in Wilmington, Delaware, as well as to the jurisdiction of all courts to which an appeal may be taken from such courts, in any suit, action or proceeding arising out of or relating to this MOU, the Settlement and/or the Settlement Agreement, (b) agrees that all claims in respect of such suit, action or proceeding shall be brought, heard and determined exclusively in the Delaware Court of Chancery (provided that, in the event that subject matter jurisdiction is unavailable in that court, then all such claims shall be brought, heard and determined exclusively in any other state court sitting in Wilmington, Delaware), (c) agrees that it shall not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from such court, (d) agrees not to bring any action or proceeding arising out of or relating to this MOU, the Settlement and/or the Settlement Agreement in any other court, and (e) expressly waives, and agrees not to plead or to make any claim that any such action or proceeding is subject (in whole or in part) to a jury trial. Each of the Parties waives any defense of inconvenient forum to the maintenance of any action or proceeding brought in accordance with this paragraph. Each of the Parties further agrees to waive any bond, surety or other security that might be required of any other party with respect to any action or proceeding, including an appeal thereof. Each of the Parties further consents and agrees that process in any suit, action or proceeding may be served on such Party by certified mail, return receipt requested, addressed to such Party or such Partys registered agent in the state of its incorporation or organization, or in any other manner provided by law, and in the case of Plaintiffs by giving such written notice to James C. Strum, 20 Montchanin Road, Suite 145, Wilmington, DE 19807. | |
15. | Execution by Counterparts. The Parties may execute this MOU in multiple counterparts, each of which constitutes an original, and all of which, collectively, constitute only one agreement. The signatures of all of the Parties need not appear on the same counterpart, and delivery of an executed counterpart signature page by facsimile or electronic mail is as effective as executing and delivering this MOU in the presence of all other Parties. |
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16. | Severability. Should any part of this MOU be rendered or declared invalid by a court of competent jurisdiction, such invalidation of such part or portion of this MOU should not invalidate the remaining portions thereof, and they shall remain in full force and effect. | |
17. | Miscellaneous. This MOU constitutes the entire agreement among the Parties with respect to the subject matter hereof, supersedes all written or oral communications, agreements or understandings that may have existed prior to the execution of this MOU, and may be modified or amended only by a writing signed by the signatories hereto. This MOU shall be binding upon and inure to the benefit of the Parties and their respective agents, executors, heirs, successors and assigns; provided, that no party shall assign or delegate its rights or responsibilities under this MOU without the prior written consent of the other Parties. The Released Parties who are not signatories hereto shall be third party beneficiaries under this MOU entitled to enforce this MOU in accordance with its terms. |
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OF COUNSEL: GARDY & NOTIS, LLP Mark C. Gardy James S. Notis Jennifer Sarnelli 560 Sylvan Avenue Englewood Cliffs, NJ 07632 (201) 567-7377 |
ROSENTHAL, MONHAIT & GODDESS, P.A. /s/ CARMELLA P. KEENER P. Bradford deLeeuw (#3569) ROSENTHAL, MONHAIT & GODDESS, P.A. 919 N. Market Street, Suite 1401 P.O. Box 1070 Wilmington, DE 19899 (302) 656-4433 Counsel for Plaintiff Hillary Kramer |
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OF COUNSEL: FARUQI & FARUQI, LLP Nadeem Faruqi Juan E. Monteverde 369 Lexington Avenue, 10th Floor New York, NY 10017 (212) 983-9330 |
FARUQI & FARUQI, LLP /s/ JAMES P. MCEVILLY James P. Mcevilly, III (De Bar No. 4807) 20 Montchanin Road, Suite 145 Wilmington, DE 19807 (302) 482-3182 Counsel for Plaintiff Teri Kirby and Isak Isakov |
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OF COUNSEL: JONES DAY Robert C. Micheletto William J. Hine 222 E. 41st Street New York, NY 10017 (212) 326-3690 |
MORRIS, NICHOLS, ARSHT & TUNNELL LLP /s/ WILLIAM LAFFERTY S. Michael Sirkin (#5389) 1201 N. Market Street P.O. Box 1347 Wilmington, DE 19899-1347 (302) 658-9200 Attorneys for Defendants International Coal Group, Inc., Wilbur L. Ross, Jr., Bennett K. Hatfield, Wendy L. Teramoto, Samuel A. Mitchell, Cynthia B. Bezik, William J. Catacosinos, Maurice E. Carino and Stanley N. Gaines |
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OF COUNSEL: SIMPSON THACHER & BARTLETT LLP Paul Curnin George Wang 425 Lexington Avenue New York, NY 10017 (212) 455-2000 Dated: May 26, 2011 |
RICHARDS LAYTON & FINGER, P.A. /s/ MARGOT F. ALICKS Margot F. Alicks (#5127) One Rodney Square 920 North King Street Wilmington, DE 19801 (302) 651-7700 Attorneys for Defendants Arch Coal, Inc. and Atlas Acquisition Corp. |
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ARCH COAL, INC. |
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By: | /s/ John Eaves | |||
Name: | John Eaves | |||
Title: | President and Chief Operating Officer | |||
ATLAS ACQUISITION CORP. |
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By: | /s/ John Eaves | |||
Name: | John Eaves | |||
Title: | President | |||
INTERNATIONAL COAL GROUP, INC. |
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By: | /s/ Bennett K. Hatfield | |||
Name: | Bennett K. Hatfield | |||
Title: | President and Chief Executive Officer |
Re: | International Coal Group, Inc. | |||
Amendment No. 1 to Schedule TO filed on May 20, 2011 | ||||
Schedule TO-T filed on May 16, 2011 | ||||
Schedule TO-C filed on May 3, 2011 | ||||
Filed by Atlas Acquisition Corp. and Arch Coal, Inc. | ||||
File No. 5-81154 |
1. | Please revise to omit the reference to the Private Securities Litigation Reform Act of 1995, |
Securities and Exchange Commission | 2 | May 27, 2011 |
since the safe harbor is not available for statements made in connection with a tender offer. Refer to Section 27A(b)(2)(C) of the Securities Act and Section 21E(b)(2)(C) of the Exchange Act. Please also refrain from making further references to the PLSRA or its safe harbor provisions in any future press release or other communications relating to this offer. |
2. | We note that Arch will obtain funds from the issuance of notes or shares, other indebtedness or some combination. To the extent that Arch is unable to issue the notes, shares or loans for the entire $3.8 billion amount, Arch has a commitment letter for a bridge facility. We note, however, that the entire $3.8 billion in proceeds of the bridge facility may not be available to pay for all of the shares tendered in the offer. In this regard, we note that the bridge facility will be used first to repay or redeem outstanding indebtedness and then will be available to fund only part of the cash consideration for the offer. Generally, when an offer is not financed, or when an offerors ability to obtain financing is uncertain, a material change will occur in the information previously disclosed when the offer becomes fully financed. Under Rule 14d-3(b)(1), an offeror is required to promptly file an amendment to its Schedule TO disclosing this material change. Please confirm that the offerors will disseminate the disclosure of this change in a manner reasonably calculated to inform security holders as required by Rule 14d-4(d). In addition, please confirm that five business days will remain in the offer following disclosure of the change or that the offer will be extended so that at least five business days remain in the offer. Refer to Exchange Act Release Nos. 23421 (July 11, 1986 at footnote 70) and 24296 (April 3, 1987). |
Securities and Exchange Commission | 3 | May 27, 2011 |
3. | Please revise to quantify the amount available under the bridge facility to pay for the shares tendered in the offer. In addition, please revise to summarize the terms of the bridge facility. Refer to Item 1007(d) of Regulation M-A. |
4. | We note that in the first paragraph on page 13 and in the letter of transmittal the disclosure states that the bidders reserve the right to transfer or assign the right to purchase securities in this offer. Please confirm your understanding that any entity to which the bidders assign the right to purchase shares in this offer must be included as a bidder in this offer. Adding additional bidders may require the dissemination of additional offer materials and an extension of the term of the offer. |
5. | Please explain to us the purpose of the language that your interpretation of the terms of the offer will be final and binding. Please disclose that only a court of competent jurisdiction can make a determination that will be final and binding upon the parties. In addition, please disclose that security holders may challenge your determinations. |
Securities and Exchange Commission | 4 | May 27, 2011 |
6. | We note that you have included non-GAAP financial measures in this section. Please advise us as to the consideration given to whether these non-GAAP projections would require additional disclosure pursuant to Rule 100(a) of Regulation G. We may have additional comments after we review your response. |
7. | We note the bidders right to waive conditions. If the bidders decide to waive any material conditions, please note that they must expressly announce their decision in a manner reasonably calculated to inform security holders of the waiver. In this regard, it appears that the waiver of the minimum condition or the HSR condition would constitute a material change requiring that at least five business days remain in the offer after such waiver. Please provide us with the bidders views on this issue. See Rule 14d-4(d). |
8. | We note that any condition may be waived at any time and from time to time. All conditions to the tender offer, other than those dependent upon the receipt of any governmental approvals necessary to consummate the offer, must be satisfied or waived on or before the expiration of the offer. Please revise this language to clarify the disclosure. |
9. | Please refer to disclosure relating to the bidders failure to exercise any of the rights described in the last sentence under this section. This language implies that once a condition is triggered, you must decide whether or not to assert it. Please note that when a condition is triggered and you decide to proceed with the offer anyway, the staff believes that this constitutes a waiver of the triggered condition. Depending on the materiality of the waived condition and the number of days remaining in the offer, you may be required to extend the offer and redisseminate new disclosure to security holders. You may not, as this language suggests, simply fail to assert a triggered condition and effectively waive it without officially doing so. Please confirm your understanding supplementally, or revise your disclosure. |
Securities and Exchange Commission | 5 | May 27, 2011 |
| the Filing Persons are responsible for the adequacy and accuracy of the disclosure in the filings; | ||
| Staff comments or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filings; and | ||
| the Filing Persons may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. |
cc: | Robert Jones (Arch Coal, Inc.) Roger Nicholson (International Coal Group, Inc.) Randi Strudler (Jones Day) |