Exhibit 10.3

 

 

 

 

SHAREHOLDERS’ AGREEMENT

 

by and between

FMC CORPORATION

and

LIVENT CORPORATION

Dated as of October 15, 2018

 

 

 

 

 

 

TABLE OF CONTENTS
_______________________

 PAGE

ARTICLE I DEFINITIONS   Section 1.01.  Certain Definitions 1     ARTICLE II
GOVERNANCE MATTERS   Section 2.01.  Charter; By-Laws 3 Section 2.02.  Board
Representation 3 Section 2.03.  Exemption from Corporate Governance Rules 3    
ARTICLE III MATTERS RELATED TO THE OPERATION OF THE LITHIUM BUSINESS   Section
3.01.  No Restriction on Competition 3 Section 3.02.  Non-Solicitation; No-Hire
4 Section 3.03.  Additional Covenants 4 Section 3.04.  Directors’ and Officers’
Insurance 6     ARTICLE IV FINANCIAL COVENANTS AND INFORMATION RIGHTS   Section
4.01.  Disclosure and Financial Controls 6 Section 4.02.  Information Rights 9
Section 4.03.  Press Releases 10 Section 4.04.  Cooperation on Parent Filings 10
Section 4.05.  Auditors and Audits; Annual Statements and Accounting 11    
ARTICLE V ADDITIONAL TERMS   Section 5.01.  Applicability of Rights in the Event
of an Acquisition of the Company 13 Section 5.02.  Termination 13 Section
5.03.  Confidentiality 13 Section 5.04.  Transfer of Parent’s Rights 15 Section
5.05.  Interpretation; Incorporation of Terms by Reference 15

 

 

 

SHAREHOLDERS’ AGREEMENT

 

THIS SHAREHOLDERS’ AGREEMENT, dated as of October 15, 2018, is by and between
FMC CORPORATION, a Delaware corporation (“Parent”) and LIVENT CORPORATION, a
Delaware corporation (the “Company”).

 

R E C I T A L S

 

WHEREAS, Parent beneficially owns approximately [—] percent ([—]%) of the issued
and outstanding Company Common Stock, and the Company is a part of Parent’s
“affiliated group” of companies for federal income tax purposes as of the date
hereof;

 

WHEREAS, the Company has issued shares of Company Common Stock to the public in
an initial public offering (the “IPO”) pursuant to a registration statement on
Form S-1 (the “IPO Registration Statement”) under the Securities Act;

 

WHEREAS, after the IPO, Parent may transfer shares of Company Common Stock to
stockholders of Parent by means of one or more distributions by Parent to its
stockholders of shares of Company Common Stock, one or more offers to
stockholders of Parent to exchange their Parent Common Stock for shares of
Company Common Stock (any combination thereof, the “Distribution”), or,
alternatively, Parent may effect a disposition of its Company Common Stock
pursuant to one or more public or private offerings, equity for debt exchanges
or other similar transactions, or Parent (or its transferees) may continue to
hold its interest in shares of Company Common Stock; and

 

WHEREAS, the parties desire to enter into this Agreement to set forth their
agreements regarding the relationship between Parent, the Company and their
respective Subsidiaries following the IPO.

 

NOW, THEREFORE, in consideration of the mutual agreements, provisions and
covenants contained in this Agreement, the parties, intending to be legally
bound, hereby agree as follows:

 

Article I
Definitions

 

Section 1.01. Certain Definitions. For the purposes of this Agreement the
following terms shall have the following meanings; provided that capitalized
terms used but not otherwise defined in this ‎Section 1.01 shall have the
respective meanings ascribed to such terms in the Separation and Distribution
Agreement:

 

“Agreement” means this Shareholders’ Agreement, including all of the schedules
and exhibits hereto.

 

“Applicable Period” has the meaning set forth in ‎Section 4.01.

 

“By-Laws” has the meaning set forth in ‎Section 2.01.

 

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“Charter” has the meaning set forth in ‎Section 2.01.

 

“Company” has the meaning set forth in the preamble hereto.

 

“Company Auditors” has the meaning set forth in ‎Section 4.05(a).

 

“Company Directors” has the meaning set forth in ‎Section 2.02(a).

 

“Company Public Documents” has the meaning set forth in ‎Section 4.02(a).

 

“Disclosing Party” has the meaning set forth in ‎Section 5.03(a).

 

“Distribution” has the meaning set forth in the recitals.

 

“Financial Reporting Timeline” means Parent’s standard financial reporting
timeline, as in effect as of the Separation Date or as modified by Parent
thereafter (with notice to the Company), for the provision of consolidated
financial information and financial statements to be included in Parent’s Form
10-Q, 10-K or other document to be filed with the SEC, as applicable.

 

“Financial Statements” has the meaning set forth in ‎Section 4.01(d).

 

“IPO” has the meaning set forth in the recitals.

 

“IPO Registration Statement” has the meaning set forth in the recitals.

 

“Parent” has the meaning set forth in the preamble hereto.

 

“Parent Auditors” has the meaning set forth in ‎Section 4.05(b).

 

“Parent Financial Statements” has the meaning set forth in ‎Section 4.01(f).

 

“Parent Public Filings” has the meaning set forth in ‎Section 4.04.

 

“Parent Transaction” has the meaning set forth in ‎Section 5.03(d).

 

“Parent Transferee” has the meaning set forth in ‎Section 5.04.

 

“Receiving Party” has the meaning set forth in ‎Section 5.03(a).

 

“Separation and Distribution Agreement” means the Separation and Distribution
Agreement, dated on or about the date hereof, by and between Parent and the
Company, as amended, modified or supplemented from time to time.

 

“Voting Stock” has the meaning set forth in ‎Section 2.03.

 

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Article II
Governance Matters

 

Section 2.01. Charter; By-Laws. Prior to the effectiveness of the IPO
Registration Statement, Parent and the Company will each take all actions that
may be required to provide for the adoption by the Company of an amended and
restated certificate of incorporation of the Company, substantially in the form
approved by Parent in its sole discretion and attached as an exhibit to the IPO
Registration Statement (the “Charter”), and amended and restated by-laws of the
Company, substantially in the form approved by Parent in its sole discretion and
attached as an exhibit to the IPO Registration Statement (the “By-Laws”).

 

Section 2.02. Board Representation. (a) The parties agree that the Company Board
shall have no less than three (3) and no greater than fifteen (15) members at
any given time (as determined in the sole discretion of the Company Board in
accordance with the Charter and the By-Laws), and as of the Separation Date, the
Company Board shall consist of seven (7) members (the “Company Directors”), each
of whom shall have been designated by Parent and duly elected prior to the
Separation Date. In accordance with the Charter and the By-Laws, the Company
Board will consist of three (3) classes of directors and any vacancies on the
Company Board, including as a result of any increase in the number of Company
Directors in accordance with the Charter, the By-Laws and this ‎Section 2.02,
shall be filled by the Company Board in accordance with the Charter and the
By-Laws.

 

Section 2.03. Exemption from Corporate Governance Rules. For so long as the
Parent Group beneficially owns a majority of the total voting power of all
classes of then-outstanding capital stock of the Company entitled to vote
generally with respect to the election of directors (“Voting Stock”), the
Company shall use reasonable best efforts to exempt itself, as applicable, from
compliance with corporate governance requirements under any applicable Law or
rule of any securities exchange or otherwise that relates to director
independence (including in respect of requirements to have independent directors
on any applicable committee of the Company Board).

 

Article III
Matters Related to the Operation of the Lithium Business

 

Section 3.01. No Restriction on Competition. Without limiting any provision of
the Charter or the By-Laws, it is the explicit intent of each of the parties
hereto that the provisions of this Agreement, the Separation and Distribution
Agreement and the Ancillary Agreements shall not include any non-competition or
other similar restrictive arrangements with respect to the range of business
activities which may be conducted by the parties hereto or the members of their
respective Groups. Accordingly, each of the parties hereto acknowledges and
agrees that nothing set forth in this Agreement, the Separation and Distribution
Agreement or any Ancillary Agreement shall be construed to create any explicit
or implied restriction or other limitation on (i) the ability of any party
hereto or any member of its respective Group to engage in any business or other
activity

 

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which competes with the business of any other party hereto or any members of its
respective Group or (ii) the ability of any party hereto or any member of its
respective Group to engage in any specific line of business or engage in any
business activity in any specific geographic area.

 

Section 3.02. Non-Solicitation; No-Hire. Until the date that is the twelve-
(12)-month anniversary of the date on which Parent and its Affiliates cease to
hold a majority of the Voting Stock, none of Parent, the Company or any member
of their respective Groups will, without the prior written consent of the other
applicable party, either directly or indirectly, on their own behalf or in the
service of or on behalf of others, solicit, aid, induce or encourage any
employee of the other party or any member of its respective Group to leave his
or her employment, or hire any such employee; provided that (a) following the
Distribution Date, the provisions of this ‎Section 3.02 shall not apply to any
employee who was not an employee of either Group on or prior to the Distribution
Date, and (b) nothing in this ‎Section 3.02 shall restrict or preclude the
rights of Parent, the Company or any member of their respective Groups from
soliciting or hiring (i) any employee who responds to a general solicitation or
advertisement that is not specifically targeted or focused on the employees
employed by any other party’s respective Group or the engagement of search firms
to engage in such searches; provided however, that the applicable party has not
encouraged or advised such firm to approach any such employee; (ii) any employee
whose employment has been terminated by the other party or any member of its
respective Group; or (iii) any employee whose employment has been terminated by
such employee after ninety (90) days from the date of termination of such
employee’s employment.

 

Section 3.03. Additional Covenants. Without limiting any other covenants,
undertakings or agreements contained in this Agreement, the Separation and
Distribution Agreement or any Ancillary Agreement, after the Separation Date and
for so long as Parent owns at least a majority of the Voting Stock, the Company
shall not, and shall not permit any member of the Lithium Group to, without
Parent’s prior written consent:

 

(a)       take, or cause to be taken, directly or indirectly, any action,
including making or failing to make any election under any applicable Law, which
has the effect, directly or indirectly, of restricting or limiting the ability
of Parent to freely sell, transfer, assign, pledge or otherwise dispose of
shares of Company Common Stock or would restrict or limit the rights of any
transferee of Parent as a holder of Company Common Stock, including, without
limitation, (i) adopting or thereafter amending, supplementing, restating,
modifying or altering any stockholder rights plan in any manner that would
result in (x) an increase in the ownership of Company Common Stock by Parent
causing the rights thereunder to detach or become exercisable and/or (y) Parent
and its transferees not being entitled to the same rights thereunder as other
holders of Company Common Stock, or (ii) the taking of any action, or the taking
of any action to recommend to the Company’s stockholders any action, which would
among other things, limit the legal rights of, or deny any benefit to, Parent as
a Company stockholder either (x) solely as a result of the amount of Company
Common Stock owned by Parent or (y) in a manner not applicable to Company
stockholders generally;

 

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(b)       to the extent that Parent is or becomes a party to any Contract
(including any Contract relating to any Parent Credit Facility) or incurs any
Indebtedness the terms of which, in either case, provide that certain actions or
inactions of Affiliates of Parent or any member of the Parent Group (which for
purposes of such Contract or Indebtedness includes any member of the Lithium
Group) may result in Parent or any member of the Parent Group being in breach of
or default under such Contract or Indebtedness and Parent has advised the
Company of the existence, and has furnished the Company with a copy, of such
Contract (or the relevant portions thereof) or of the terms (or the relevant
portions thereof) of such Indebtedness, the Company will not take or fail to
take, as applicable, and the Company will cause the members of the Lithium Group
not to take or fail to take, as applicable, any actions that reasonably could
result in Parent or any member of the Parent Group being in breach of or in
default under any such Contract or Indebtedness; provided that the parties
acknowledge and agree that from time to time Parent or any member of the Parent
Group may in good faith (and not solely with the intention of imposing
restrictions on the Company or any member of the Lithium Group pursuant to this
covenant) enter into additional Contracts (or amendments to existing Contracts)
or incur any Indebtedness the terms of which, in either case, provide that
certain actions or inactions of Subsidiaries or Affiliates of Parent (including,
for purposes of this ‎Section 3.03(b), members of the Lithium Group) may result
in Parent or a member of the Parent Group being in breach of or in default under
such Contract or Indebtedness, and in such event, the Company will not
thereafter take or fail to take, as applicable, and the Company will cause the
members of the Lithium Group not to take or fail to take, as applicable, any
actions that reasonably could result in Parent or any member of the Parent Group
being in breach of or in default under any such additional Contracts (or
amendments to existing Contracts) or Indebtedness (provided that Parent has
notified the Company of such additional Contracts (or amendments to existing
Contracts) or the terms of any such Indebtedness); provided, further that in the
event that the Company or any member of the Lithium Group unknowingly takes any
action, or fails to take any action, that would require the Parent’s consent
hereunder, such action or inaction shall not constitute a breach of this
‎Section 3.03(b) so long as promptly upon written notice thereof by Parent, the
Company remedies or cures such breach of or default under such Contract or
Indebtedness;

 

(c)       issue any shares of the capital stock of the Company or of any member
of the Lithium Group, including any Company Common Stock, or any rights,
warrants or options to acquire the Company capital stock (including, without
limitation, securities convertible into or exchangeable for the Company capital
stock), or any other equity security of the Company, other than (i) Company
Common Stock issued in connection with the IPO (including in connection with the
exercise by the Underwriters of any over-allotment option) or (ii) any equity
securities issued pursuant to any employee benefit or other plan approved in
connection with the IPO or the other Transactions;

 

(d)       dispose of, or agree to dispose of, any of the assets, other than
sales of inventory in the ordinary course of business, held by any member of the
Lithium Group with an aggregate value in excess of $5,000,000 in any one such
disposition, or $25,000,000 in the aggregate;

 

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(e)       acquire, or agree to acquire, any businesses or assets for aggregate
consideration in excess of $50,000,000;

 

(f)       acquire, or agree to acquire, any equity securities, debt securities
or other interest in any Person, whether by way of a purchase of stock or
securities, contributions to capital, or otherwise, for aggregate consideration
in excess of $25,000,000 in any such acquisition, or $50,000,000 in the
aggregate;

 

(g)       incur or make, or agree to incur or make, any capital expenditures in
excess of $10,000,000, or $50,000,000 in the aggregate, other than in accordance
with any capital expenditure plan set forth on Schedule 3.03(g);

 

(h)       incur any Indebtedness, other than (i) pursuant to the Company
Financing Arrangements or (ii) as would not exceed $50,000,000, in the aggregate
with all other Indebtedness of the Company (excluding any Indebtedness of the
Company incurred pursuant to the Company Financing Arrangements as of the
Separation Date);

 

(i)       settle, discharge or otherwise propose to settle or discharge any
Action (i) for which the amount in controversy is in excess of $25,000,000, in
the aggregate, (ii) that is seeking any equitable or injunctive relief or (iii)
that relates to this Agreement, the Separation and Distribution Agreement, any
Ancillary Agreement or the Transactions; or

 

(j)       any action the taking of which by the Company or any member of the
Lithium Group would be restricted by, or otherwise require the consent of any
Person pursuant to, any Company Financing Agreement.

 

Section 3.04. Directors’ and Officers’ Insurance. Until the Trigger Time, each
of the directors and officers of the Company and the members of the Lithium
Group shall be covered under Parent’s directors’ and officers’ insurance
program. The Company shall take commercially reasonable steps to secure,
effective as of the Trigger Time, directors’ and officers’ insurance coverage
for the directors and officers of the Company and the members of the Lithium
Group that is substantially similar to the directors’ and officers’ insurance
policies and programs of Parent as in effect as of the Trigger Time, subject to
such adjustments to such directors’ and officers’ insurance policies and
programs as the Board of Directors of the Company may determine, in its sole
discretion, are appropriate for the market capitalization, revenues and other
characteristics of the Lithium Business following the Separation Date.

 

Article IV
Financial Covenants and Information Rights

 

Section 4.01. Disclosure and Financial Controls. The Company agrees that, for so
long as Parent is required to consolidate the results of operations and
financial position of the Company and any other members of the Lithium Group or
to account for its investment in the Company under the equity method of
accounting (determined in accordance with GAAP and consistent with SEC reporting
requirements) (the “Applicable Period”):

 

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(a)       The Company will, and will cause each other member of the Lithium
Group to, maintain, as of and after the Separation Date, disclosure controls and
procedures and internal control over financial reporting as defined in Exchange
Act Rule 13a-15; the Company will cause each of its principal executive and
principal financial officers to sign and deliver certifications to the Company’s
periodic reports and will include the certifications in the Company’s periodic
reports, as and when required pursuant to Exchange Act Rule 13a-14 and Item 601
of Regulation S-K; the Company will cause its management to evaluate the
Company’s disclosure controls and procedures and internal control over financial
reporting (including any change in internal control over financial reporting) as
and when required pursuant to Exchange Act Rule 13a-15; the Company will
disclose in its periodic reports filed with the SEC information concerning the
Company management’s responsibilities for and evaluation of the Company’s
disclosure controls and procedures and internal control over financial reporting
(including, without limitation, the annual management report and attestation
report of the Company’s independent auditors relating to internal control over
financial reporting) as and when required under Items 307 and 308 of Regulation
S-K and other applicable SEC rules; and, without limiting the generality of the
foregoing, the Company will, and will cause each member of the Lithium Group to,
maintain as of and after the Separation Date disclosure controls and procedures
that are consistent in all respects with (or more robust than) such disclosure
controls and procedures of Parent as in effect as of the Separation Date, in
each case except as otherwise may be consented to by Parent in its sole
discretion.

 

(b)       The Company will, and will cause each member of the Lithium Group
organized in the U.S. to, maintain a fiscal year that commences and ends on the
same calendar days as Parent’s fiscal year commences and ends, and to maintain
monthly and quarterly accounting periods that commence and end on the same
calendar days as Parent’s monthly and quarterly accounting periods commence and
end. The Company will cause each member of the Lithium Group organized in any
jurisdiction outside the U.S. to maintain a fiscal year that commences and ends
on the same calendar days as the fiscal year of the members of the corresponding
Parent Group organized in such jurisdiction outside the U.S. commences and ends,
and to maintain monthly and quarterly accounting periods that commence and end
on the same calendar days as the monthly and quarterly accounting periods of
members of the corresponding Parent Group organized in such jurisdiction outside
the U.S. commence and end.

 

(c)       The Company and each of its Subsidiaries and Affiliates will deliver
to Parent an income statement and balance sheet on a monthly basis for the
Company for such period in such format and detail as Parent shall request. The
Company will be responsible for reviewing its results and data and for informing
Parent immediately of any post-closing adjustments that come to its attention.

 

(d)       For each annual and quarterly accounting period after the Separation
Date, the Company shall deliver to Parent, in accordance with the Financial
Reporting Timeline, drafts of (A) the consolidated financial statements of the
Company Group (and notes thereto) for such periods and, in the case of each
quarterly period, for the period from the beginning of the current fiscal year
to the end of such quarter, setting forth in each case in comparative form for
each such fiscal year or quarter of the Company the

 

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consolidated figures (and notes thereto) for the corresponding year or quarter,
as applicable, and other periods of the previous fiscal year and all in
reasonable detail and prepared in accordance with Article 10 of Regulation S-X
and GAAP, and (B) a discussion and analysis by management of the Lithium Group’s
financial condition and results of operations for such fiscal period, including,
without limitation, an explanation of any material period-to-period change and
any off-balance sheet transactions, all in reasonable detail and prepared in
accordance with Regulation S-K. The information set forth in (A) and (B) above
is referred to in this Agreement as the “Financial Statements.” In accordance
with the Financial Reporting Timeline, the Company shall deliver to Parent the
final form of the applicable Financial Statements and certifications thereof by
the principal executive officer and the principal financial officer of the
Company in substantially the forms required under SEC rules for periodic reports
and in form and substance satisfactory to Parent; provided, however, that the
Company may continue to revise such Financial Statements prior to the filing
thereof in order to make corrections, updates and changes which corrections,
updates and changes shall (i) if substantive, be delivered by the Company to
Parent as soon as practicable, and in any event not less than twenty-four (24)
hours prior to the filing of such Financial Statements with the SEC and (ii) in
all other cases, be delivered by the Company to Parent as soon as practicable
after making any such corrections, updates or changes; provided, further, that
Parent’s and the Company’s financial representatives shall actively consult with
each other regarding any changes (whether or not substantive) which the Company
may consider making to its Financial Statements and related disclosures prior to
any anticipated filing with the SEC, with particular focus on any changes that
would have an effect upon Parent’s financial statements or related disclosures.

 

(e)       Without limiting the Company’s obligations with respect to the
Financial Statements pursuant to ‎Section 4.01(d), each annual and quarterly
accounting period after the Separation Date, the Company shall deliver to
Parent, in accordance with the Financial Reporting Timeline, an income statement
and balance sheet and supplemental data related to cash flows and other
necessary disclosures for such applicable period in such format and detail as
Parent may request.

 

(f)       Without limiting the Company’s obligations with respect to the
Financial Statements pursuant to ‎Section 4.01(d), in accordance with the
Financial Reporting Timeline, the Company will deliver to Parent, not later than
fifteen (15) Business Days prior to the date Parent has notified the Company
that it intends to file any applicable annual or quarterly financial statements
(the “Parent Financial Statements”), any financial and other information and
data with respect to the Lithium Group and its business, properties, financial
position, results of operations and prospects as is reasonably requested by
Parent in connection with the preparation of the applicable Parent Financial
Statements and annual and quarterly reports on Form 10-K and Form 10-Q, as
applicable.

 

(g)       The Company will deliver to Parent all quarterly and annual financial
statements of each Company Affiliate which is itself required to file financial
statements with the SEC or otherwise make such financial statements publicly
available, with such financial statements to be provided in the same manner and
detail and on the same time

 

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schedule as Financial Statements required to be delivered to Parent pursuant to
‎Section 4.01(d).

 

(h)       All information provided by any member of the Lithium Group to Parent
or filed with the SEC pursuant to ‎Section 4.01(c) through ‎(g) inclusive will
be consistent in terms of format and detail and otherwise with Parent’s policies
with respect to the application of GAAP and practices in effect on the
Separation Date with respect to the provision of such financial information by
such member of the Lithium Group to Parent (and, where appropriate, as presently
presented in financial reports to the Parent Board), with such changes therein
as may be requested by Parent from time to time consistent with changes in such
accounting principles and practices. Notwithstanding anything to the contrary in
this ‎Section 4.01, the Company will not file any applicable Financial
Statements with the SEC prior to the time that Parent files the corresponding
Parent Financial Statements with the SEC unless otherwise required by applicable
Law.

 

(i)       No later than ten (10) Business Days prior to the taking of any
action, or the failure to take any action, or the date of occurrence of any
facts or circumstances known to the Company or any member of the Lithium Group,
or as soon as practicable in the event of any unplanned actions or
circumstances, in each case that would be reasonably likely to give rise to an
obligation of Parent or any member of the Parent Group to file with the SEC a
Current Report on Form 8-K, the Company shall deliver to Parent all information
and data with respect to such action, or such facts or circumstances, as Parent
may reasonably request in connection with the preparation of Parent’s Current
Report on Form 8-K.

 

Section 4.02. Information Rights. For the Applicable Period and without limiting
any of the rights and obligations of the parties pursuant to ‎Section 4.01, the
Company will deliver to Parent as soon as practicable such financial and other
information and data with respect to the Lithium Group and its business,
properties, financial positions, results of operations and prospects as from
time to time may be reasonably requested by Parent. Without limiting the
foregoing:

 

(a)       the Company shall, and shall cause each member of the Lithium Group
that files information with the SEC to, deliver to Parent (i) substantially
final drafts, as soon as the same are prepared, of (x) all reports, notices and
proxy and information statements to be sent or made available by such Lithium
Group member to its respective security holders, (y) all regular, periodic and
other reports to be filed or furnished under Sections 13, 14 and 15 of the
Exchange Act (including reports on Forms 10-K, 10-Q and 8-K and annual reports
to shareholders), and (z) all registration statements and prospectuses to be
filed by the Company or any member of the Lithium Group with the SEC or any
securities exchange pursuant to the listed company manual (or similar
requirements) of such exchange (collectively, the documents identified in
clauses (x), (y) and (z) are referred to in this Agreement as “Company Public
Documents”); and (ii) as soon as practicable, but in no event later than ten
(10) Business Days (other than with respect to Form 8-Ks) prior to the earliest
of the dates the same are printed, sent or filed, current drafts of all such
Company Public Documents and, with respect to Form 8-Ks, as soon as practicable;
provided, however, that the Company may continue to revise such Company

 

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Public Documents prior to the filing thereof in order to make corrections and
non-substantive changes which corrections and changes will be delivered by the
Company to Parent as soon as practicable; provided, further, that Parent and the
Company financial representatives will actively consult with each other
regarding any changes (whether or not substantive) which the Company may
consider making to any of its Company Public Documents and related disclosures
prior to any anticipated filing with the SEC, with particular focus on any
changes which would have an effect upon the Parent Financial Statements or
related disclosures; and

 

(b)       the Company shall, as promptly as practicable and in accordance with
the Financial Reporting Timeline, deliver to Parent copies of all annual budgets
and financial projections (consistent in terms of format and detail mutually
agreed upon by the parties) relating to the Company on a consolidated basis and
will provide Parent an opportunity to meet with management of the Company to
discuss such budgets and projections.

 

Section 4.03. Press Releases. For the Applicable Period, the Company and Parent
will consult with each other as to the timing of their annual and quarterly
earnings releases and any interim financial guidance for a current or future
period and will give each other the opportunity to review the information
therein relating to the Lithium Group and to comment thereon. Parent and the
Company will make reasonable efforts to issue their respective annual and
quarterly earnings releases at approximately the same time on the same date.
Parent and the Company shall coordinate the timing of their respective earnings
release conference calls such that the Company shall be permitted to hold such
calls prior to those of Parent. No later than 72 hours prior to the time and
date that a party intends to publish its regular annual or quarterly earnings
release or any financial guidance for a current or future period, such party
will deliver to the other party copies of substantially final drafts of all
related press releases and other statements to be made available by any member
of that party’s Group to employees of any member of that party’s Group (other
than, for the avoidance of doubt, employees participating in the preparation or
review thereof) or to the public concerning any matters that could be reasonably
likely to have a material financial impact on the earnings, results of
operations, financial condition or prospects of any Lithium Group member. In
addition, prior to the issuance of any such press release or public statement
that meets the criteria set forth in the preceding two sentences, the issuing
party will consult with the other party regarding any changes (other than
typographical or other similar minor changes) to such substantially final
drafts. Immediately following the issuance thereof, the issuing party will
deliver to the other party copies of final versions of all press releases and
other public statements. For the Applicable Period, the Company shall consult
with Parent prior to issuing any press releases or otherwise making public
statements with respect to the Transactions and prior to making any filings with
any Governmental Authority with respect thereto.

 

Section 4.04. Cooperation on Parent Filings. For the Applicable Period, the
Company will cooperate fully, and cause the Company Auditors to cooperate fully,
with Parent to the extent requested by Parent in the preparation of Parent’s
public earnings or other press releases, quarterly reports on Form 10-Q, annual
reports to shareholders, annual reports on Form 10-K, any current reports on
Form 8-K and any other proxy,

 

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information and registration statements, reports, notices, prospectuses and any
other filings made by Parent with the SEC, any national securities exchange or
otherwise made publicly available (collectively, the “Parent Public Filings”).
The Company agrees to provide to Parent all information that Parent reasonably
requests in connection with any Parent Public Filings or that, in the judgment
of Parent, is required to be disclosed or incorporated by reference therein
under any Law, rule or regulation. The Company will provide such information in
a timely manner on the dates requested by Parent (which may be earlier than the
dates on which the Company otherwise would be required hereunder to have such
information available) to enable Parent to prepare, print and release all Parent
Public Filings on such dates as Parent may reasonably determine but in no event
later than as required by applicable Law. The Company will use its commercially
reasonable efforts to cause the Company Auditors to consent to any reference to
them as experts in any Parent Public Filings required under any Law, rule or
regulation. If and to the extent requested by Parent, the Company will
diligently and promptly review all drafts of such Parent Public Filings and
prepare in a diligent and timely fashion any portion of such Parent Public
Filing pertaining to the Company. Unless required by Law, rule or regulation,
the Company will not publicly release any financial or other information which
conflicts with the information with respect to the Company or any member of the
Lithium Group or the Lithium Business that is included in any Parent Public
Filing without Parent’s prior written consent. Prior to the release or filing
thereof, Parent will provide the Company with a draft of any portion of a Parent
Public Filing containing information relating to the Lithium Group and will give
the Company an opportunity to review such information and comment thereon;
provided that Parent will determine in its sole and absolute discretion the
final form and content of all Parent Public Filings.

 

Section 4.05. Auditors and Audits; Annual Statements and Accounting. For the
Applicable Period (provided that the Company’s obligations pursuant to ‎Section
4.05(d) and ‎Section 4.05(e) shall continue beyond the Applicable Period to the
extent any amendments to, or restatements or modifications of, Parent Public
Filings are necessary with respect to the Applicable Period):

 

(a)       Unless required by Law, the Company will not select a different
accounting firm than KPMG (or its affiliate accounting firms) (unless so
directed by Parent in accordance with a change by Parent in its accounting firm)
to serve as its (and the Company Affiliates’) independent certified public
accountants (“Company Auditors”) without Parent’s prior written consent;
provided, however, that, to the extent any such Company Affiliates are currently
using a different accounting firm to serve as their independent certified public
accountants, such Company Affiliates may continue to use such accounting firm
provided such accounting firm is reasonably satisfactory to Parent.

 

(b)       The Company will use its reasonable best efforts to enable the Company
Auditors to complete their audit or review (in the case of Parent’s quarterly
financial statements) such that they will date their opinion or review on the
applicable Financial Statements on the same date that Parent’s independent
certified public accountants (“Parent Auditors”) date their opinion or review on
the corresponding Parent Financial Statements, and to enable Parent to meet its
timetable for the printing, filing and public

 

11 

 

dissemination of any Parent Financial Statements, all in accordance with
‎Section 4.01 hereof and as required by applicable Law.

 

(c)       The Company shall provide to Parent on a timely basis all information
reasonably required by Parent to meet Parent’s schedule for the preparation,
printing, filing, and public dissemination of the Parent Financial Statements in
accordance with ‎Section 4.01 hereof and as required by applicable Law. Without
limiting the generality of the foregoing, the Company will provide all required
financial information with respect to the Lithium Group to the Company Auditors
in a sufficient and reasonable time and in sufficient detail to permit the
Company Auditors to take all steps and perform all reviews necessary to provide
sufficient assistance to the Parent Auditors with respect to information to be
included or contained in the Parent Financial Statements.

 

(d)       The Company will authorize the Company Auditors to make available to
the Parent Auditors both the personnel who performed, or are performing, the
annual audit and quarterly reviews of the Company and work papers related to the
annual audit and quarterly reviews of the Company, in all cases within a
reasonable time prior to the Company Auditors’ opinion date, so that the Parent
Auditors are able to perform the procedures they consider necessary to take
responsibility for the work of the Company Auditors as it relates to the Parent
Auditors’ report on Parent’s statements, all within sufficient time to enable
Parent to meet its timetable for the printing, filing and public dissemination
of the Parent Financial Statements.

 

(e)       At Parent’s request, the Company will provide the Parent Auditors with
access to the books and records of the Company and the members of the Lithium
Group so that Parent may conduct reasonable audits relating to the financial
statements provided by the Company under this Agreement as well as relating to
the internal accounting controls and operations of the Lithium Group, including
in the event Parent determines in good faith that there may be some inaccuracy
in any financial statements of the Company or any member of the Lithium Group
provided to Parent pursuant to this Agreement or any deficiency in the internal
accounting controls or operations of the Company or any member of the Lithium
Group that could materially impact the Parent Financial Statements.

 

(f)       The Company will give Parent as much prior notice as reasonably
practicable of, and consult with Parent and, at Parent’s request, the Parent
Auditors concerning, any proposed determination of, or any significant change
in, the Company’s accounting estimates from those in effect on the Separation
Date. The Company will not make any such determination or change without
Parent’s prior written consent if such a determination or change would be
sufficiently material to be required to be disclosed in the Company’s or
Parent’s financial statements as filed with the SEC or otherwise publicly
disclosed therein. Notwithstanding the foregoing, the Company shall make any
changes in its accounting estimates that are requested by Parent in order for
the Company’s accounting estimates to be consistent with those of Parent.

 

(g)       The Company shall not, without Parent’s prior written consent, make,
or cause to be made, any modification or change to the accounting practices or
principles of

 

12 

 

the Company as in effect as of the Separation Date; provided that the Company
shall make any changes in its accounting practices or principles that are
requested by Parent in order for the Company’s accounting practices and
principles to be consistent with those of Parent.

 

(h)       The Company will report in reasonable detail to Parent the following
events or circumstances promptly after any executive officer of the Company or
any member of the Company Board becomes aware of such matter: (A) all
significant deficiencies and material weaknesses in the design or operation of
internal control over financial reporting which are reasonably likely to
adversely affect the Company’s ability to record, process, summarize and report
financial information; (B) any fraud, whether or not material, that involves
management or other employees who have a significant role in the Company’s
internal control over financial reporting; (C) any illegal act within the
meaning of Section 10A(b) and (f) of the Exchange Act; and (D) any report of a
material violation of Law that an attorney representing any Lithium Group member
has formally made to any officers or directors of the Company pursuant to the
SEC’s attorney conduct rules (17 C.F.R. Part 205).

 

Article V
Additional Terms

 

Section 5.01. Applicability of Rights in the Event of an Acquisition of the
Company. In the event the Company merges into, consolidates, sells substantially
all of its assets to or otherwise becomes an Affiliate of a Person (other than
Parent), pursuant to a transaction or series of related transactions in which
Parent or any member of the Parent Group receives equity securities of such
Person (or of any Affiliate of such Person) in exchange for Company Common Stock
held by Parent or any member of the Parent Group, all of the rights of Parent
set forth in this Agreement shall continue in full force and effect and shall
apply to the Person the equity securities of which are received by Parent
pursuant to such transaction or series of related transactions (it being
understood that all other provisions of this Agreement will apply to the Company
notwithstanding this ‎Article V). The Company agrees that, without the consent
of Parent, it will not enter into any Contract which will have the effect set
forth in the first clause of the preceding sentence, unless such Person agrees
to be bound by the foregoing provision.

 

Section 5.02. Termination. This Agreement shall be effective as of the
Separation Date and shall continue in full force and effect until the earliest
of (a) the date on which the parties hereto mutually agree in writing to
terminate this Agreement and (b) the date on which all of the rights of Parent
(or any Parent Transferee) pursuant to this Agreement shall have expired in
accordance with the terms hereof. Notwithstanding the foregoing sentence, any
breach of any of the terms of this Agreement shall survive the time at which it
would otherwise terminate pursuant to the preceding sentence, and shall continue
to be in full force and effect to the extent thereof for the applicable statute
of limitations.

 

Section 5.03. Confidentiality. (a) Subject to ‎Section 5.03(b), each of Parent
and the Company (each, a “Receiving Party”), on behalf of itself and each Person
in its

 

13 

 

respective Group, agree (x) to hold, and to cause its respective directors,
officers, employees, agents, accountants, counsel and other advisors and
representatives to hold in strict confidence, with at least the same degree of
care that applies to the confidential and proprietary information of Parent
pursuant to policies in effect as of the Separation Date, all Information
furnished pursuant to this Agreement by any party hereto or the members of its
respective Group (such party, the “Disclosing Party”) to any Receiving Party or
that is otherwise accessible to, in the possession of, or furnished to the
Receiving Party’s respective directors, officers, employees, agents,
accountants, counsel and other advisors and representatives at any time pursuant
to this Agreement or otherwise and (y) not to use any such Information for any
purpose other than in accordance with this Agreement, including for the purpose
of trading in any securities of the Company or otherwise, except, in each case,
to the extent that such Information (i) is or becomes part of the public domain
through no breach of this Agreement by the Receiving Party or any member of its
Group, its respective directors, officers, employees, agents, accountants,
counsel and other advisors and representatives, (ii) was independently developed
following the Separation Date by employees or agents of the Receiving Party or
any Person in its respective Group, its respective directors, officers,
employees, agents, accountants, counsel and other advisors and representatives
who have not accessed or otherwise received the applicable Information (provided
that such independent development can be demonstrated by competent,
contemporaneous written records of the Receiving Party or any Person in its
respective Group), or (iii) becomes available to the Receiving Party or any
Person in its respective Group following the Separation Date on a
non-confidential basis from a third party who is not bound directly or
indirectly by a duty of confidentiality to the Disclosing Party.

 

(b)       In the event that the Receiving Party or any Person in its Group
either determines on the advice of its counsel that it is required to disclose
any Information pursuant to applicable Law (including the rules and regulations
of the SEC or any national securities exchange) or receives any request or
demand from any Governmental Authority to disclose or provide Information of the
Disclosing Party (or any Person in the Disclosing Party’s Group) that is subject
to the confidentiality provisions hereof, such party shall notify the other
party prior to disclosing or providing such Information and shall cooperate at
the expense of such other party in seeking any reasonable protective
arrangements (including by seeking confidential treatment of such Information)
requested by such other party. Subject to the foregoing, the Person that
received such a request or determined that it is required to disclose
Information may thereafter disclose or provide Information to the extent
required by such Law (as so advised by counsel) or requested or required by such
Governmental Authority; provided, however, that such Person provides the other
party, to the extent legally permissible, upon request with a copy of the
Information so disclosed.

 

(c)       Upon the written request of a party, the other party shall promptly
destroy any copies of such confidential or proprietary Information (including
any extracts therefrom) specifically identified by the requesting party to be
destroyed. Upon the written request of such requesting party, the other party
shall cause one of its duly authorized officers to certify in writing to such
requesting party that the requirements of the preceding sentence have been
satisfied in full.

 

14 

 

(d)       Notwithstanding the foregoing, no provision of this Agreement,
including this ‎Section 5.03, shall be interpreted or construed to in any manner
limit or restrict the ability of Parent to disclose any Information concerning
the Company or the members of the Lithium Group or the Lithium Business,
including Information in Parent’s possession or which Parent is entitled to
receive or have access to pursuant to the terms of this Agreement, to any third
party in connection with (i) any potential transaction between Parent and such
third party with respect to Parent’s equity ownership of the Company (whether
structured as a merger, sale or transfer of equity securities, sale of assets or
otherwise) or (ii) a potential transaction with respect to Parent and such third
party (whether structured as a merger, sale or transfer of equity securities,
sale of assets or otherwise) (any such transaction described in ‎(i) or ‎(ii), a
“Parent Transaction”), or to use such Information described herein in connection
with any Parent Transaction, in each case subject to a customary confidentiality
agreement between Parent and such third party in respect of such Parent
Transaction.

 

Section 5.04. Transfer of Parent’s Rights. Notwithstanding anything to the
contrary in this Agreement, the Separation Agreement or any Ancillary Agreement,
Parent may transfer all or any portion of its rights under this Agreement to a
transferee of any Company Common Stock from any member of the Parent Group (a
“Parent Transferee”) holding at least 10% of the Voting Stock. Parent shall give
written notice to the Company of its transfer of rights under this ‎Section 5.04
no later than thirty (30) days after Parent enters into a binding agreement for
such transfer of rights. Such notice shall state the name and address of the
Parent Transferee and identify the amount of Voting Stock transferred and the
scope of rights being transferred under this ‎Section 5.04. In connection with
any such transfer, the term “Parent” as used in this Agreement shall, where
appropriate to give effect to the assignment of rights and obligations hereunder
to such Parent Transferee, be deemed to refer to such Parent Transferee. Parent
and any Parent Transferee may exercise the rights under this Agreement in such
priority, as among themselves, as they shall agree upon among themselves, and
the Company shall observe any such agreement of which it shall have notice as
provided above.

 

Section 5.05. Interpretation; Incorporation of Terms by Reference. This
Agreement is an “Ancillary Agreement” as such term is defined in the Separation
and Distribution Agreement and shall be interpreted in accordance with the terms
of the Separation and Distribution Agreement in all respects; provided that in
the event of any conflict or inconsistency between the terms of this Agreement
and the terms of the Separation and Distribution Agreement in respect of the
subject matter of this Agreement, the terms of this Agreement shall control in
all respects. Sections 9.03, 9.04, 9.05, 9.06, 9.07 (other than 9.07(d)), 9.08,
9.09 (without limiting ‎Section 5.04 in any respect), 9.10, 9.11, 9.12, 9.13,
9.15, 9.16 and 9.17 (subject to the immediately preceding sentence) of the
Separation and Distribution Agreement shall each be incorporated herein by
reference, mutatis mutandis, as if set forth in full herein.

 

* * * * *

 

15 

 

IN WITNESS WHEREOF, the parties have caused this Shareholders’ Agreement to be
executed by their duly authorized representatives.

 

  FMC CORPORATION                 By: /s/ Pierre Brondeau       Name:  Pierre
Brondeau       Title:    Chief Executive Officer  

 

 

  LIVENT CORPORATION                 By: /s/ Paul Graves       Name:  Paul
Graves       Title:    Chief Executive Officer and President  

 

 

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