Capital Stock

12 Months Ended

Dec. 31, 2019

Dividends

The Company declared and paid cash dividends per share during the periods presented below:



2019:	Dividends per share		Amount (in thousands)
1st quarter	$	0.45	$	7,839
2nd quarter	0.45		7,425
3rd quarter	0.45		7,000
4th quarter	0.45		7,956
Total cash dividends declared and paid	$	1.80	$	30,220

2018:	Dividends per share		Amount (in thousands)
1st quarter	$	0.40	$	8,335
2nd quarter	0.40		7,998
3rd quarter	0.40		7,633
4th quarter	0.40		7,303
Total cash dividends declared and paid	$	1.60	$	31,269

Future dividend declarations will be subject to ongoing Board review and authorization will be based on a number of factors, including business and market conditions, the Company’s future financial performance and other capital priorities.

Share Repurchase Program

During April 2019, the Board of Directors of Arch Coal, Inc. approved an incremental $250 million to the share repurchase program bringing the total authorization to $1.05 billion. Below is a table showing the share repurchase activity during the periods presented below:



2019:	Number of Shares	Average Repurchase Price per Share		Amount (in thousands)
1st quarter	872,317	$	89.70	$	78,249
2nd quarter	697,255	90.92		63,393
3rd quarter	1,169,597	78.11		91,357
4th quarter	133,379	78.72		10,499
Total shares repurchased	2,872,548	$	84.77	$	243,498

2018:	Number of Shares	Average Repurchase Price per Share		Amount (in thousands)
1st quarter	407,091	$	94.79	$	38,588
2nd quarter	960,105	81.54		78,287
3rd quarter	870,538	87.59		76,248
4th quarter	1,000,881	88.57		88,651
Total shares repurchased	3,238,615	$	87.00	$	281,774

The timing of any future share repurchases, and the ultimate number of shares purchased, will depend on a number of factors, including business and market conditions, the Company’s future financial performance and other capital priorities. The shares will be acquired in the open market or through private transactions in accordance with the Securities and Exchange Commission requirements. The share repurchase program has no termination date, but may be amended, suspended or discontinued at any time and does not commit the Company to repurchase shares of its common stock. The actual number and value of the shares to be purchased will depend on the performance of the Company’s stock price and other market conditions.

Outstanding Warrants

On the Effective Date, the Company entered into a warrant agreement (the “Warrant Agreement”) with American Stock Transfer & Trust Company, LLC as warrant agent and, pursuant to the terms of the Plan, issued warrants (“Warrants”) to purchase up to an aggregate of 1,914,856 shares of Class A Common Stock, par value $0.01 per share, of Arch Coal (the “Class A Common Stock”) to holders of claims arising under the Cancelled Notes (as defined below). Each Warrant expires on October 5, 2023, and is initially exercisable for one share of Class A Common Stock at an initial exercise price of $57.00 per share. The Warrants are exercisable by a holder paying the exercise price in cash or on a cashless basis, at the election of the holder. The Warrants contain anti-dilution adjustments for stock splits, reverse stock splits, stock dividends, dividends and distributions of cash, other securities or other property, spin-offs and tender and exchange offers by Arch Coal or its subsidiaries to purchase Class A Common Stock at above-market prices.

If, in connection with a merger, recapitalization, business combination, transfer to a third party of substantially all of Arch Coal’s consolidated assets or other transaction that results in a change to the Class A Common Stock (each, a “Transaction”), (i) the Transaction is consummated prior to the fifth anniversary of the Effective Date and the Transaction consideration to holders of Class A Common Stock is 90% or more listed common stock or common stock of a company that provides publicly available financial reporting, and holds management calls regarding the same, no less than quarterly (“Reporting Stock”) or (ii) regardless of the consideration, the Transaction is consummated on or after the fifth anniversary of the Effective Date, the Warrants will be assumed by the surviving company and will become exercisable for the consideration that the holders of Class A Common Stock receive in such Transaction; provided that if the consideration such holders receive consists solely of cash, then upon the consummation of such Transaction, Arch Coal will pay for each Warrant an amount of cash equal to the greater of (i) (x) the amount of cash payable with respect to the number of shares of Class A Common Stock underlying the Warrant minus (y) the exercise price per share then in effect multiplied by the number of shares of Class A Common Stock underlying the Warrant and (ii) $0.

If a Transaction is consummated prior to the fifth anniversary of the Effective Date in which the Transaction consideration is less than 90% Reporting Stock, a portion of the Warrants corresponding to the portion of the Transaction consideration that is Reporting Stock will be assumed by the surviving company and will become exercisable for the Reporting Stock consideration that the holders of Class A Common Stock receive in such Transaction, and the portion of the Warrants corresponding to the portion of the Transaction consideration that is not Reporting Stock will, at the option of each holder, (i) be assumed by the surviving company and will become exercisable for the consideration that the holders of Class A Common Stock receive in such Transaction or (ii) be redeemed by Arch Coal for cash in an amount equal to the Black Scholes Payment (as defined in the Warrant Agreement).

During 2019, holders of warrants had exercised 386 of the warrants, leaving 1,845,568 warrants outstanding at December 31, 2019.

As provided in ASC 825-20, “Financial Instruments,” the warrants are considered equity because they can only be physically settled in Company shares, can be settled in unregistered shares, the Company has adequate authorized shares to settle the outstanding warrants and each warrant is fixed in terms of settlement to one share of Company stock subject only to remote contingency adjustment factors designed to assure the relative value in terms of shares remains fixed.