444, 450-451). He also stated that the major shareholder (AMAX) had requested him to become chairman of the international corporation. (PX-13).
22. On December 11, the RST board met and unanimously approved Prain's recommendations. Ian MacGregor, who is Chief Executive Officer of AMAX and a director of RST, was present at that meeting and approved such resolution. (PX-3; PX-27; Uncontested Fact No. 16, in part).
23. On December 22, 1969, a committee of the directors of RST approved the agreement between and among the Republic of Zambia, INDECO and RST. (Uncontested Fact No. 18).
Under the agreement between the Zambian Government and RST dated December 24, 1969 INDECO will acquire at book value a 51% interest in the operating copper properties controlled by RST, in exchange for compensation in the form of bonds to be issued by INDECO and to be guaranteed by the Republic of Zambia. Among other things, the agreement provides that contracts will be entered into whereby RST or a company nominated by it will continue to act for a period of ten years as manager and sales agent of the operations. The agreement also states that the possessor of the management contract must hold not less than 24 percent (later negotiated to 20 percent) of the RCM stock.
The Zambian properties will be held by a Zambian company known as RCM (Roan Consolidated Mines, Ltd.), but referred to in the agreements as OPCO, hereinafter referred to as RCM, in which the Government will own a 51% stock interest, RST 36.75% and the remaining 12.25% will be owned by the Anglo-American Group which now holds a minority interest in RST's Zambian properties.
In addition, the agreement permits the assets of RST, not required for Zambian copper producing, smelting and refining, including the bonds and RCM stock referred to, to be received as compensation from INDECO, to be transferred to holders outside Zambia.
This characterization of the agreement is not intended to be complete and the agreement contains other important provisions. (Uncontested Fact No. 19, in part; N.T. 187).
D. ACQUISITION OF RST BY AMAX.
24. In mid-December 1969, Ian MacGregor, RST director and Chief Ex-executive Officer of AMAX, proposed to RST an amalgamation of RST and AMAX. His purpose in doing so was to protect AMAX's investment in RST (N.T. 386).
25. On December 19, 1969, RST's management retained N. M. Rothschild & Sons, London merchant bankers, to assist it in discussions with AMAX. (N.T. 192-93), 160-61). On January 17, 1970, RST retained Kuhn, Loeb & Co., New York investment bankers, to work jointly with Rothschild's. (N.T. 503-08).
26. The two persons who were authorized by AMAX to negotiate on behalf of AMAX were MacGregor and Donahue (President of AMAX), who were and are members of the RST board (PX-7). At these negotiations, MacGregor felt that the other shareholders (i.e. non-AMAX shareholders) of RST "were being more than amply represented by directors other than myself." (N.T. 395). Indeed, MacGregor stated, "I have only one company, American Metal Climax." (N.T. 386).
27. After several months of negotiations, in which Rothschild's and Kuhn, Loeb represented and advised RST (N.T. 163), the Agreement in Principle for the amalgamation of AMAX and RST, dated March 5, 1970 (PX-9) was entered into. (Uncontested Fact No. 25). In essence, the agreement provides for the consolidation of RST's Zambian operating assets into Roan Consolidated Mines, Limited ("RCM"), a Zambian corporation, 51% of which will be sold to INDECO for INDECO bonds, pursuant to the agreement of December 24, 1969 with the Government of Zambia; pro rata distribution to all RST shareholders of the INDECO bonds thus acquired; pro rata distribution to all RST shareholders of RST's shares of Botswana RST Limited; pro rata distribution to all RST shareholders of the shares in RCM, except to the extent that the Zambian Government has required 20% of the RCM shares to be retained by RST, and acquisition of the remainder of RST by AMAX, for which AMAX will pay to other RST shareholders approximately $76.2 million principal amount of 8% AMAX subordinated debentures with common stock warrants attached and $6.3 million in cash. (PX-9).
28. More specifically the agreement in principle provides for the following (PX-6; PX-9; DX-6A);
Non-AMAX shareholders of RST, who own 25.4 million or 57.7% of the total RST shares, will receive the following in complete redemption of their shares:
(a) $6.3 million in cash, representing $.25 per RST share.
(b) Their approximate pro rata share ($2 principal amount per RST share) of the 6% Zimco bonds.