Exhibit 10.9
CONTROL OPTION AGREEMENT
Control Option
Agreement, dated as of November 1, 2003 (the
“Agreement”), between Lafarge North America Inc., a
Maryland corporation (the “Company”), and Lafarge S.A.,
a French corporation (the “Parent”).
Whereas , the Company currently has outstanding Common
Stock, $1.00 par value (“Common Stock”), and Voting
Stock, $0.0001 par value (“Voting Stock”);
Whereas , the Company’s subsidiary, Lafarge Canada
Inc. (“LCI”), currently has outstanding Exchangeable
Preference shares (“Exchangeable Shares”);
Whereas , the holders of Exchangeable Shares, through a
trust holding Voting Stock (“Exchange Trust”), vote as
a class with the holders of Common Stock and any other class or
series of capital stock of the Company having general voting rights
in the Company;
Whereas , the Parent directly and indirectly holds as of
October 31, 2003 such number of Exchangeable Shares and shares
of Common Stock so that the Parent is entitled to cast, either
directly or indirectly, approximately 53% of the total votes
available to be cast at a meeting of the Company’s
stockholders on that date;
Whereas , by virtue of its ownership of Common Stock and
Exchangeable Shares, the Parent has the power to elect all of the
directors of the Company and to control decisions to be voted upon
by stockholders, except as otherwise provided by law;
Whereas , the loss of such voting control could have adverse
consequences for the Parent and the Company under certain laws of
France, Canada and the United States, as well as certain of the
Company’s credit agreements, and the Parent has informed the
Company of its intention to maintain such voting control for the
foreseeable future;
Whereas , the Parent, in consideration for benefits
conferred upon the Company by the Parent, has requested that the
Company agree as set forth herein;
Now, Therefore , in consideration of the premises and the
mutual and dependent promises hereinafter set forth, the parties
hereto agree as follows:
Section 1. Definitions
“
Applicable Interest Rate ” shall mean for each
calendar quarter or part thereof the three month London Interbank
Offered Rate for the first business day of such calendar quarter as
reported in the next business day’s Wall Street
Journal , plus that number of basis points charged or
chargeable to the Company on such day under the Company’s
then existing committed credit facilities above the London
Interbank Offered Rate then applicable under such credit
facilities.
“
Convertible Securities ” shall mean Relevant Voting
Securities which are not entitled to vote but which
(i) entitle the holder thereof (or which the holder thereof
may
exercise) to purchase from the
Company Relevant Voting Securities having the right to vote or
(ii) which are convertible by the holder thereof into Relevant
Voting Securities having the right to vote.
“
Includible Voting Securities ” shall mean all Voting
Securities other than (i) Common Stock issuable upon exercise
of the exchange rights of Exchangeable Shares or upon exercise of
the conversion, exchange or similar rights of other Includible
Voting Securities, (ii) securities reserved for issuance under
any Stock Plan and (iii) securities covered by options under
employee Stock Plans.
“
Relevant Voting Security ” shall mean any Voting
Security other than (i) Common Stock issuable upon exercise of the
exchange rights of Exchangeable Shares, (ii) Common Stock or
other Voting Securities issuable upon exercise of conversion or
similar rights of an outstanding Includible Voting Security,
(iii) Voting Securities issued, or reserved for issuance,
pursuant to a Stock Plan, as defined above, (iv) securities
covered by outstanding options under any Stock Plan which is an
employee Stock Plan, and (v) Voting Stock issued to the
trustee under the Exchange Trust as a consequence of the issuance
of additional Exchangeable Shares.
“ Stock
Plan ” shall mean any employee stock purchase plan,
profit sharing plan, incentive, compensation or bonus plan,
dividend reinvestment plan, optional stock dividend plan, stock
option plan or any other similar plan either (i) approved by
the Company’s Board of Directors pursuant to which any
securities are issued by the Company to its stockholders or to
employees of the Company or a subsidiary, or (ii) approved by
the Board of Directors of LCI pursuant to which any securities are
issued by LCI to its employees or stockholders.
“ Total
Voting Power ” shall mean the total number of votes
attributable to all Includible Voting Securities of the
Company.
“
Underlying Securities ” shall mean Relevant Voting
Securities having the right to vote which a holder of Convertible
Securities is entitled to receive pursuant to the terms of or upon
the exercise or conversion of Convertible Securities.
“ Voting
Securities ” shall mean all shares of Common Stock,
Voting Stock, and any other securities of the Company or of a
subsidiary of the Company (such as Exchangeable Shares) entitled to
vote (regardless of whether such voting rights (i) are
presently exercisable or (ii) directly appertain to such
securities or (iii) are only available upon subsequent
conversion, option or warrant exercise, exchange or other
disposition of such securities) on all matters with holders of
Common Stock and Voting Stock at meetings of the stockholders of
the Company.
Section 2. Issuance of Relevant
Voting Securities
(a) If
the Company shall from time to time issue to any person other than
the Parent any Relevant Voting Securities, as defined above, the
Parent shall have the right to purchase from the Company up to the
amount of such Relevant Voting Securities as shall be necessary to
permit the Parent to achieve (on a basis assuming the exercise of
all
2
conversion, exchange and similar
rights of outstanding securities except employee stock options) a
control margin of up to 1,000,000 votes in excess of 50% of the
total Voting Power, as defined above, to be represented by all
Includible Voting Securities, as defined above, to be outstanding
(or deemed to be outstanding) after such issuances by the Company
and purchases by the Parent and the other purchaser(s).
For
purposes of this Section 2(a), the issuance by a subsidiary of
the Company (to a person other than the Company) of securities
which have the rights of or are convertible into or exchangeable
for Voting Securities, and the sale by the Company of any
securities issued by a subsidiary with the aforesaid
characteristics, shall be deemed to constitute an issuance of
Voting Securities by the Company.
Nothing in this
Agreement shall be construed to prevent or constrain the Parent
from acquiring outstanding shares of Common Stock, Exchangeable
Shares or any other securities of the Company or of any subsidiary
on the open market or otherwise.
(b) The
Company shall notify the Parent in writing sufficiently in advance
of any proposed issue of any Relevant Voting Security covered by
the right to purchase granted to the Parent in Section 2(a) so
that the Parent, after its receipt of such notice but prior to any
such issuance, shall have a period of at least 15 days (the
“Notice Period”) to determine whether to exercise its
right to purchase shares of such Relevant Voting Security. The
Company’s notice, to the extent information is known or
reasonably subject to estimation, shall include information as to
the estimated nature and date of the proposed issue and the
estimated price and amount of securities to be issued. If the
Parent, within the Notice Period, notifies the Company (which
notice shall specify whether the Parent intends to purchase all or
only a specified portion of the shares it could elect to acquire)
of its intention to exercise this right, then, simultaneously with,
or immediately prior to, the issue of such Relevant Voting
Securities, the Parent shall purchase from the Company, and the
Company shall issue and sell to the Parent, the number of shares of
the Relevant Voting Security determined as provided above in
Section 2(a) (or such reduced amount as may be specified in
the Parent’s notice to the Company) at a price per share
determined as provided in Section 2(c) below.
(c)(1) If the
Company issues Relevant Voting Securities for cash in a public
offering subject to a registration statement filed with the U.S.
Securities and Exchange Commission and/or a comparable filing with
the Canadian provincial securities administration, the price at
which the Parent shall be entitled to purchase shares of Relevant
voting Securities shall be the price at
