SHAREHOLDER'S AGREEMENT

Exhibit 10.2

 

 

SHAREHOLDERS’ AGREEMENT

 

BY AND BETWEEN

 

I.P. CONTAINER HOLDINGS (SPAIN) S.L.

 

AND

 

COFIPAC

 

DATED SEPTEMBER 15, 2005

 

TABLE OF CONTENTS

 

 

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THIS SHAREHOLDERS’ AGREEMENT (this “Agreement”)

 

BY AND BETWEEN:

 

I.P. CONTAINER HOLDINGS (Spain) S.L. , a corporation organized and existing under the laws of Spain with capital of EUR 6,000, having its registered office at 20, General Yagüe, Madrid, 28020, Spain and currently undergoing registration of its company number, duly represented by Mr. Marc Van Lieshout (“ IP ”), and

 

COFIPAC , a société anonyme (corporation) with managing board and supervisory board, organized and existing under the laws of Morocco with a share capital of MAD 490,000,000, having its registered office in Casablanca at 67, avenue de l’Armée Royale and registered under number 126.553 with the Registry of Commerce of Casablanca, duly represented by Mr. Aziz Qadiri (“ COFIPAC ”),

 

(IP and COFIPAC, collectively, the “ Parties ”, and each, individually, a “ Party ”).

 

RECITALS

 

WHEREAS , COFIPAC is a wholly-owned subsidiary of FINANCIERE PAPIER ET CARTON KADIRIA, abbreviated as FINAPACK, a société anonyme (corporation) with managing board and supervisory board, organized and existing under the laws of Morocco with a share capital of MAD 226,000,000, having its registered office at Casablanca (Aïn Sebaâ) – Route Secondaire 110, boulevard Chefchaouni and registered under number 93.957 with the Registry of Commerce of Casablanca (“ FINAPACK ”);

 

WHEREAS , IP is a wholly-owned subsidiary of International Paper Company (“IPC”), a US corporation having its head office at 400 Atlantic Street, Stamford, Connecticut 06921, USA;

 

WHEREAS , FINAPACK and IP have entered into that Share Purchase Agreement of even date herewith (the “ SPA ”), pursuant to the terms and subject to the conditions of which FINAPACK has agreed to sell to IP and IP has agreed to purchase from FINAPACK 51% of the equity and voting rights of GROUPE CMCP, a société anonyme organized and existing under the laws of Morocco with a share capital being reduced to MAD 448,220,000, divided into 4,482,200 shares with a nominal value of MAD 100 each, with its registered office in Kénitra in the Industrial Quarter, and registered with the Registry of Commerce of Kénitra under number 9.919 (“ CMCP ”);

 

WHEREAS, IP has also agreed under a separate agreement to acquire from various shareholders a number of shares representing 15.49% of the equity and voting rights of CMCP, following which IP shall own 2,980,551 shares representing 66.49% of the

 

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outstanding shares of CMCP (the “ Shares ”) and COFIPAC shall own the remaining 1,501,649 Shares, or 33.51% of the Shares;

 

WHEREAS , the Parties desire to enter into this Agreement to set forth certain terms and conditions concerning their relationship as shareholders in CMCP and to provide for the orderly governance and management of CMCP following the consummation of the transactions contemplated by the SPA;

 

NOW , THEREFORE , in consideration of the premises and covenants set forth below and intending to be legally bound, the Parties agree as follows:

 

ARTICLE I

DEFINITIONS

 

Section 1.1 Certain Defined Terms For the purposes of this Agreement, unless the context requires otherwise, the following terms shall have the following meanings:

 

“ Affiliate ” shall mean, with respect to any Person: (a) any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with, such first Person. The term “control” (including its correlative meanings “controlled by” and “under common control with”) shall have the meaning ascribed thereto in Article L. 233-3 of the French Commercial Code (Code de Commerce), or (b) any Person that serves as a director or officer of such specified Person.

 

“ Business Day ” shall mean any day other than a Saturday, Sunday or other days on which banking institutions are authorized or obligated by law to be closed in Casablanca or Paris, as the case may be.

 

“ Cause ” shall mean, in connection with the removal of a Director or senior manager of CMCP, such Person’s (i) willful and continued failure to perform his or her duties as a Director or senior manager of CMCP, (ii) gross negligence that results in a material financial injury to CMCP or any of its Subsidiaries, (iii) bankruptcy or other insolvency proceeding or (iv) involvement in any criminal charges.

 

“ Closing ” and “ Closing Date ” shall have the respective meanings ascribed thereto in the SPA.

 

“ Control ” shall have the meaning ascribed thereto in Article L.233-3 of the French Commercial Code ( Code de Commerce ).

 

“ Equity Securities ” with respect to any Person, shall mean: (i) any common and preferred shares; (ii) any other instruments convertible, exercisable or exchangeable for common or preferred shares; (iii) any other equity or equity-linked security issued from time to time; and (iv) any rights to acquire common or preferred shares or any other equity or equity-linked security which may be issued in the future.

 

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“ Fair Market Value ” with respect to any property, shall mean, as of a particular date, a good faith determination of the amount that a willing and informed buyer would pay a willing seller in an arm’s length transaction, to acquire such property; provided , that for purposes of any Share Transfer contemplated by this Agreement, the fair market value of the Shares to be transferred shall be determined on the basis of the value of CMCP without taking into account any premium or discount (subject to the provisions of Section 6.2(ii)). In the event that the Parties cannot agree on such an amount within thirty (30) days of either Party’s notice to that effect to the other, Fair Market Value shall be finally determined within ninety (90) days of appointment by the Moroccan subsidiary of an investment bank of international standing independent of the Parties and jointly appointed by them (or, failing such joint appointment, by the President of the Tribunal de Commerce de Paris at the request of the most diligent Party), using customary valuation techniques. The fees and expenses of such investment bank shall be shared equally between the Parties.

 

“ Governmental Authority ” shall mean any government or any subdivision of the foregoing, authority, agency, commission, or other similar body including any control commission or similar regulatory body, or any court, tribunal, or judicial or arbitral body of any jurisdiction.

 

“ Permitted Transfer ” shall mean any Transfer pursuant to Section 4.2 .

 

“ Permitted Transferee ” shall mean any transferee pursuant to a Permitted Transfer.

 

“ Person ” shall mean any natural person, corporation, general or limited partnership, limited liability company, proprietorship, other business organization or entity, trust, union, unincorporated association, Governmental Authority or other organization.

 

“ Representative ” shall mean, with respect to any Person, the officers, directors, managers, employees, agents or other representatives (including any investment banker, attorney or accountant retained by such Person) acting on behalf of such Person.

 

“ Shareholder ” shall mean each of IP or COFIPAC.

 

“ Shares ” shall mean the shares, par value of one hundred (100) dirhams per share, of CMCP, or, in the event of any change in the number or character of any of the foregoing by reason of any merger, stock dividend or split, combination of shares or similar event, any securities replacing the foregoing, subject to any appropriate adjustments to fairly and equitably preserve the economic benefits and original rights and obligations of their holders.

 

“ Subsidiary ” shall mean, with respect to any Person, any other Person Controlled by such first Person (either alone or through or together with any other Subsidiary).

 

“ Third Party ” shall mean any Person that is not a Party hereto.

 

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“ Transfer ” shall mean, with respect to any Shares, (i) when used as a verb, to sell, give, bequeath, transfer, exchange, assign, pledge or in any other way whatsoever encumber or dispose of such Shares or any participation or interest therein, whether directly or indirectly (including by way of the Transfer of such Shares to any Subsidiary of any Person that is subsequently Transferred in whole or in part to any other Person), or to enter into any contract, option, or other arrangement, commitment or understanding to do any of the foregoing actions, and (ii) when used as a noun, any indirect or direct sale, gift, bequest, transfer, exchange, assignment, pledge or any other encumbrance or disposal whatsoever of such Shares or any participation or interest therein or any contract, option, or other arrangement, commitment or understanding to effect any of the foregoing.

 

“ Voting Rights ” shall mean the voting rights attached to any Equity Securities that entitle the holder thereof to vote at the shareholder’s meetings of the issuer of such Equity Securities.

 

Section 1.2 Presumption and Headings

 

The Parties acknowledge that each Party and its counsel have reviewed and revised this Agreement and that in the event an ambiguity or question of intent or interpretation arises regarding this Agreement, this Agreement (including any Exhibits) shall be construed as if drafted jointly by the Parties, and no presumption or burden of proof shall arise favoring or disfavoring either Party to this Agreement by virtue of the authorship of any provisions to this Agreement. The Article headings contained in this Agreement are inserted for convenience of reference only and shall not affect the meaning or interpretation of this Agreement.

 

ARTICLE II

GOVERNANCE AND MANAGEMENT OF CMCP

 

Section 2.1 General

 

(a) CMCP shall generally be governed in accordance with the applicable provisions of Moroccan corporate law, except as provided in this Agreement.

 

(b) The day-to-day management of CMCP shall be the responsibility of its chairman (the “ Chairman ”) and its senior managers, under the overall direction and supervision of CMCP’s Board of Directors (the “ Board ”).

 

Section 2.2 Business and Financial Plans

 

(a) It is the intention of the Parties to operate the business of CMCP through business plans (the “ Business Plans ”) outlining the customers and products targeted for sale by CMCP, and financial plans (the “ Financial Plans ”) outlining the source and application of all capital, including capital budgeting, expense budgeting, compensation of key employees and operating forecast. Preparation of Business Plans and Financial Plans shall be the responsibility of the Chairman, and on such a calendar basis as he shall determine, subject to the approval of the Board and consistent with IP’s reporting requirements. The parties agree that the Financial Plan should include reasonable contingencies for the expenditure of less than material unbudgeted capital items and expense items, so that the Chairman shall have

 

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the authority to continue operations without seeking the approval of the Parties for such expenditures.

 

(b) From the effective date of this Agreement, CMCP shall be run in accordance with the business plan attached hereto as Exhibit I as amended on two points as per the Parties’ agreement (the “ Initial Business Plan ”) and any subsequent Business Plans adopted by the Board of Directors.

 

Section 2.3 The Board of Directors

 

The Shareholders shall take, or cause to be taken, all necessary action as may be required under applicable Moroccan law from and after the Closing, to cause the Board to have the composition and powers set forth in this Section 2.3 .

 

(a) Composition . For so long as (i) COFIPAC shall own no less than 24.5% of the outstanding Shares of CMCP and (ii) Messrs. Aziz Qadiri and Hicham Qadiri shall remain part of the senior management of CMCP, the Board shall be composed of seven (7) directors (the “ Directors ”), four (4) of which shall be nominated by IP (the “ IP Directors ”), and three (3) of which shall be nominated by COFIPAC (the “ COFIPAC Directors ”), including Mr. Aziz Qadiri who shall act as Chairman. In case of impediment of the latter, Mr. Hicham Qadiri shall act as Chairman. The Chairman of the Board of Directors shall not have a casting vote. The Vice Chairman of the Board of Directors shall be the Vice President of International Paper Company’s European Container Division, an IP Director.

 

(b) Removal . The Parties agree that, if a board member may be revoked at any time by a resolution of a shareholders meeting and the Chairman of the Board of Directors may be revoked by the Board of Directors, they shall not vote for the removal of any Director, including the Chairman, and they shall not vote any of their Shares in favor of the removal of any Director designated pursuant to Section 2.3(a) , unless such removal shall be for Cause or the Shareholder entitled to designate such Director shall have consented to such removal in writing; provided , however, that IP shall have the right to cause any IP Director to be removed from the Board at any time and COFIPAC shall have the right to cause any COFIPAC Director to be removed from the Board at any time, in each case with or without Cause and at the relevant Shareholder’s sole discretion.

 

(c) Vacancies . If a vacancy of a seat on the Board occurs at any time as a result of the death, disability, resignation, retirement, or removal of any Director, the Shareholder that designated the Director whose death, disability, resignation, retirement or removal caused the vacancy shall have the right to designate a replacement Director for appointment or election and the vacancy shall be filled within five (5) Business Days of its occurrence. If at any time there is a vacancy, the Board shall not conduct any further business until a replacement Director has been appointed or elected to the Board in accordance with this Section; provided , however, that the foregoing restriction shall not apply, and the Board may continue to conduct business, in the event that a vacancy has continued for longer than five (5) Business Days after the event giving rise to such vacancy.

 

(d) Board Meetings . The Board shall meet as often as required by the operations and affairs of CMCP and at least quarterly. Board meetings shall be convened by the Chairman, either acting in its sole initiative or upon the request of any Shareholder, by notice to each Director (by facsimile or electronic transmission) to be received not later than

 

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three (3) Business Days before the meeting, stating the date, time and place of such meeting and the agenda of business to be conducted thereat. A Board meeting may be held without the foregoing notice thereof, if all Directors are present and agree to hold a meeting. Meetings may from time to time be held outside of the Morocco.

 

(e) Quorum . At all meetings of the Board, the actual presence of half of the members of the entire Board, among which no less than two (2) IP Directors and no less than one (1) COFIPAC Director, shall be required to constitute a quorum for the transaction of business. To the extent permitted by applicable Moroccan law, a Director may participate in any meeting of the Board by means of an audio or video conference or other communications equipment that allows all Directors participating in such meeting to hear each other; participation in any such meeting by such means shall constitute presence in person for all purposes (including the satisfaction of any quorum requirement) of this Agreement.

 

(f) Action by the Board . All actions of the Board shall require the affirmative vote of at least a majority of the Directors present or represented at a duly-convened meeting of the Board held in accordance with Sections 2.3(d) and 2.3(e) , including no less than two (2) IP Directors and no less than one (1) COFIPAC Director.

 

(g) Proxy . Each Director may hold a proxy for one (1) other Director to vote at a Board meeting in accordance with applicable Moroccan law.

 

(h) Language . The Board meetings shall be held in French and English and the minutes shall be drafted in French and translated to English as needed.

 

Section 2.4 Management

 

(a) The Board shall appoint the Chairman and the other senior managers of CMCP, who shall hold their offices for such terms and shall perform such duties as the Board shall determine from time to time. From an operational standpoint, the Chairman shall report to the Vice President of the European Container Division of International Paper, to which CMCP shall belong. Any senior manager may be removed at any time, in compliance with applicable law, by the affirmative vote of the Board and any vacancy occurring among the senior managers shall be filled by the Board. The salaries and other compensation of the senior managers shall be determined by the Board.

 

(b) The Parties agree that the management of CMCP immediately from and after the Closing shall be Mr. Aziz Qadiri, acting as Chairman, and Mr. Hicham Qadiri, acting as General Manager in charge of Sales and Marketing, each of whom have separately agreed to assume these positions for three years following the Closing. The former members of the managing board of CMCP shall have, like Mr. Hicham Qadiri, upon the adoption by CMCP of the form of a corporation with a board of directors, the authority of general managers, provided , however, that they shall only bind the company with the joint signature of Mr. Aziz Qadiri or Mr. Hicham Qadiri, and subject to the limitations to be determined by the Board, and which shall be reflected in CMCP’s by-laws. IP shall designate the CFO/Controller of CMCP, who may be entitled to the benefits reserved to International Paper Company’s expatriates, provided that International Paper Company shall bear the additional cost pertaining to these benefits. Management shall act in accordance with the annual Financial Plans and Business Plans approved by the Board and in compliance with the

 

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provisions of Section 2.5 below. It will regularly inform the Board of Directors of any change or planned change in Morocco’s legislative or regulatory environment.

 

Section 2.5 Strategic Decisions

 

CMCP and its management shall take no action with respect to any of the following matters (and shall cause the Subsidiaries of CMCP not to take any action with respect to any of the following matters) without such action being submitted to, and authorized in advanced by, a duly-convened meeting of the Board held in accordance with Sections 2.3(d) , (e) and (f) :

 

(i) the adoption of a business plan subsequent to the Initial Business Plan;

 

(ii) any material departures from an approved business plan;

 

(iii) the adoption or modification of any annual Financial Plan;

 

(iv) the appointment, removal and management compensation of senior managers and officers (including facility managing directors, manufacturing / mills managers and sales managers;

 

(v) sales compensation structure and incentive payout approval;

 

(vi) any amendment to any existing Affiliates transaction or any approval of any new Affiliates transaction;

 

(vii) any transaction outside the ordinary course of business, including any (A) merger, statutory share exchange or consolidation or similar corporate transaction proposal, (B) sale or other disposition, directly or indirectly, of all or substantially all of the assets of CMCP, (C) acquisition of the stock of any other Person, (D) joint venture or partnership, (E) incurrence of indebtedness for borrowed money or guarantee of any such indebtedness of another Person, (F) issuance or sale of any debt securities or warrants or rights to acquire any debt securities or any guarantee of any debt securities of another Person, or (G) sale or disposition of any material assets of CMCP not held for sale in the ordinary course;

 

(viii) any new transaction or new series of related transactions involving (A) export sales of an annual amount in excess of the equivalent in MAD of two hundred fifty thousand US dollars (USD 250,000) or (B) capital expenditures in excess of the equivalent in MAD of three hundred thousand US dollars (USD 300,000);

 

(ix) any loan or series of related loans (other than any loan to a wholly-owned Subsidiary of CMCP) in excess of three hundred thousand US dollars (USD 300,000);

 

(x) the adoption or amendment of treasury management policies;

 

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(xi) any plan for the creation or dissolution of Subsidiaries;

 

(xii) any proposal for the appointment or removal of the statutory auditors of CMCP, or the change or adoption of material accounting principles;

 

(xiii) any proposal for action to be submitted to the Shareholders meeting;

 

(xiv) any filing for bankruptcy, voluntary winding up or liquidation or reduction in the share capital of CMCP or any arrangement having the same economic effect as the foregoing;

 

(xv) internal policies and decisions in respect of safety, environment, human resources and IT; and

 

(xvi) the grant of authority to any Person to act for or on behalf of CMCP or any of its Subsidiaries in any material way.

 

Section 2.6 Constituent Documents

 

As between Shareholders, in the event of any conflict between this Agreement and the bylaws ( statuts ) of CMCP, this Agreement shall prevail.

 

Section 2.7 No Conflicting Agreements

 

No Shareholder shall grant any proxy or enter into or agree to be bound by any stockholder agreement or like arrangements of any kind (including any arrangement or agreement with respect to the acquisition, disposition or voting of any Shares) with any Person (including another Shareholder) that is inconsistent with any of the provisions of this Agreement.

 

ARTICLE III

FINANCING

 

Section 3.1 Dividend Policy

 

CMCP’s dividend policy shall be determined by CMCP’s Board, it being understood that the Parties have agreed that as a general rule fifty percent (50%) of the distributable earnings of each financial year shall be distributed to all of the shareholders as dividends.

 

Section 3.2 Loans

 

With the approval of the Board, funding for CMCP may be obtained by loans from commercial or government lending institutions, or from the Parties. Any of such loans shall bear market interest rates. Neither Party shall be required to guarantee loans obtained by CMCP.

 

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Section 3.3 New Capital Requirements

 

The Parties shall ensure that the capital of CMCP always remains at an adequate level according to its needs. In any event, COFIPAC undertakes not to oppose a capital increase of CMCP when such capital increase results from a legal or regulatory requirement or from an increase of CMCP liabilities or a decrease in CMCP