Document k9Zmmgzr0wvEeZvdXw2bmDQXy

24 Additional Description of Koppers Business Pending Legal Proceedings The Company has received a number of notices and citations from local and Federal agencies alleging violation of health stanaards and of air and water pollution control laws and regulations. Most of the citations have been settled by conciliation and. m some cases, by payment of small fines. Negotiations are m process at several plants `or permits or variances from various effluent control programs or for agreements con cerning health standards. Tyco Laboratories. Inc. has initiated a lawsuit m the Federal District Court in Mil waukee. Wisconsin against Koppers and the directors of Cutler-Hammer. Inc. Among those named is omund 8. Fitzgerald, who is chairman of Cutler-Hammer, vice chair man of the Board ol Directors of Eaton Cor poration and a director of Koppers. In that lawsuit. Tyco filed an amended complaint on November 6, 1978 alleging that the directors of Cutler-Hammer, in a civil conspiracy with Koppers. attempted to "chill the market" for Cutler-Hammer common stock owned or controlled by Tyco m order to deter further ourcnases by Tyco ana thus to entrench the existing management of Cutler-Hammer. Tyco asserts that this alleged conduct causec it to suffer monetary damages in connection with its purchase and ultimate sale of its interest in Cutler-Hammer. Tyco's amended compiamt further sets forth a class action alleging mat the same parlies unlaw fully conspired to issue Cutler-Hammer pre ferred stock to Koppers for inadequate con sideration. and that, this had the effect of diluting the value of the Cutler-Hammer com mon stock owned or controlled by Tyco and others similarly situated. Koppers manage ment holds the view that this litigation, which is in the discovery stage, will not result m any material liability to Koppers. On May 2. 1978, Koppers entered into an agreement regarding its St. Paul. Minne sota coke plant with the Minnesota Pollution Control Agency (MPCA). Under that agree ment. Koppers will take interim pollution abatement measures pending the permanent snutdown of the plant, which will occur no later than April 1, 1981. (The St. Paul coke plant is the oldest sucn operated by Koppers, wmch is of the view that shutdown will not have any material adverse effect upon its operations or financial condition. Koopers has recently ourchased a coke plant in Toledo. Ohio with production capac ity substantially ecuivaiem to that of the St. Paul plant.! As a cart cl me agreement with ViPCA. Kopcers agreed to pay a $63,000 civil penalty for alleged past violations of the applicable air pollution control code and a Sl.OOO-a-day penalty for any violations that may occur in the future, and further agreeo to a schedule for quarterly "delayed compli ance" penalties beginning on July 1. 1979 should they be necessary. A S4,000,000 letter of credit has been delivered to MPCA. sublet to forfeit if the St. Paul plant is not shut down by the date agreed upon. The U.S. Environmental Protection Agency (EPA) has expressed dissatisfaction with the agree ment on the basis of its opinion that, under the Clean Air Act Amendments of 1977. a fa cility must be on a compliance schedule or shut down no later than July. 1979. EPA therefore regards as unacceptable noncompliance of the St. Paul plant beyond that date. Koppers is currently negotiating with both agencies to resolve the conflict. Commencing in 1976 and continuing into 1978, a total of 23 women nave filed five different lawsuits claiming damages in connection with the deaths of their husbanos allegedly induced by emissions from coke ovens built by Koppers for its customers be tween 1918 and 1958. Such lawsuits have been filed m The Court of Common Pleas of Allegheny County, Pennsylvania. Koppers is being charged with negligence for improper design of the ovens and for failure to warn the plaintiffs of risks inherent in working on or about the ovens, with breach of express and implied warranties that the ovens were fit to work on, and with absolute liability in tori. Both compensatory and punitive dam ages are sought. Koppers insurance carrier is defending the suits with reservations of coverage. Koppers believes that it has valid defenses to these claims (particularly since Koppers never operaied the ovens) or, alter natively. that it has insurance coverage. Properties The Company has 279 operating locations, as follows: Organic Materials, 40: Road Ma terials, 139: Forest Products. 87: and Engi neered Metal Products. 13. Engineering, drafting, estimating, procurement and sched uling personnel for the Engineering and Con struction business segment are headquar tered in Pittsburgh, Pennsylvania. Field forces are employed as required for particu lar projects.