COMMERCIAL METALS COMPANY and BROADRIDGE CORPORATE ISSUER SOLUTIONS, INC. Rights Agent Rights Agreement Dated as of July 30, 2011
Exhibit 1
COMMERCIAL METALS COMPANY
and
BROADRIDGE CORPORATE ISSUER SOLUTIONS, INC.
Rights Agent
Dated as of July 30, 2011
TABLE OF CONTENTS
Section | Page | |||
Section 1. Certain Definitions |
1 | |||
Section 2. Appointment of Rights Agent |
8 | |||
Section 3. Issuance of Rights Certificates |
8 | |||
(a) Distribution Date; Rights Certificates |
8 | |||
(b) Common Stock Certificates; Summary of Rights |
8 | |||
(c) Legend |
9 | |||
Section 4. Form of Rights Certificates |
10 | |||
(a) Form; Date |
10 | |||
(b) Acquiring Person Legend |
10 | |||
Section 5. Countersignature and Registration |
11 | |||
(a) Signatures |
11 | |||
(b) Registration and Transfer |
11 | |||
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates |
11 | |||
(a) Procedure |
11 | |||
(b) Issuance of New Rights Certificates |
12 | |||
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights |
12 | |||
(a) Exercise |
12 | |||
(b) Purchase Price |
13 | |||
(c) Rights Agent Actions |
13 | |||
(d) Partial Exercise |
13 | |||
(e) Termination of Acquiring Person’s Rights |
14 | |||
(f) Surrender of Rights Certificates; Identity of Beneficial Owner |
14 | |||
Section 8. Cancellation and Destruction of Rights Certificates |
14 | |||
Section 9. Reservation and Availability of Capital Stock |
15 | |||
(a) Reservation of Capital Stock |
15 | |||
(b) Listing |
15 | |||
(c) Registration under the Act |
15 | |||
(d) Covenant Regarding Capital Stock |
16 | |||
(e) Transfer Taxes and Charges |
16 | |||
Section 10. Preferred Stock Record Date |
16 | |||
Section 11. Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights |
17 | |||
(a) Certain Adjustments |
17 |
i
Section | Page | |||
(b) Purchase Price Adjustment — Capital Stock |
19 | |||
(c) Purchase Price Adjustment — Cash, Assets, etc. |
20 | |||
(d) Current Market Price |
20 | |||
(e) Purchase Price Adjustment Threshold |
22 | |||
(f) Equivalent Adjustments |
22 | |||
(g) Post-Adjustment Rights Issuances |
22 | |||
(h) Preferred Stock Anti-Dilution |
23 | |||
(i) Adjustment of Number of Rights |
23 | |||
(j) Rights Certificates |
23 | |||
(k) Adjustment Below Par Value |
24 | |||
(l) Adjustment Effective as of Future Date; Exercise |
24 | |||
(m) Tax Adjustments |
24 | |||
(n) Restriction on Certain Transactions |
24 | |||
(o) Restriction Against Diminishing Benefits of the Rights |
25 | |||
(p) Common Stock Adjustments |
25 | |||
Section 12. Certificate of Adjusted Purchase Price or Number of Shares |
25 | |||
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power |
26 | |||
(a) Flip-over Event |
26 | |||
(b) Principal Party |
27 | |||
(c) Supplemental Agreement |
28 | |||
Section 14. Fractional Rights and Fractional Shares |
29 | |||
(a) Fractional Rights |
29 | |||
(b) Fractional Shares of Preferred Stock |
29 | |||
(c) Fractional Shares of Common Stock |
30 | |||
(d) Waiver of Fractional Rights and Shares |
30 | |||
Section 15. Rights of Action |
30 | |||
Section 16. Agreement of Rights Holders |
30 | |||
Section 17. Rights Certificate Holder Not Deemed a Stockholder |
31 | |||
Section 18. Concerning the Rights Agent |
32 | |||
(a) Compensation |
32 | |||
(b) Reliance |
32 | |||
Section 19. Merger or Consolidation or Change of Name of Rights Agent |
32 | |||
(a) Successor |
32 | |||
(b) Prior Countersignatures |
32 | |||
Section 20. Duties of Rights Agent |
33 | |||
(a) Legal Counsel |
33 | |||
(b) Certification by the Company |
33 |
ii
Section | Page | |||
(c) Liability for Negligence, etc. |
33 | |||
(d) Statements of Fact or Recitals |
33 | |||
(e) Agreement; Adjustments |
33 | |||
(f) Further Assurances |
34 | |||
(g) Instructions |
34 | |||
(h) Dealing in Rights |
34 | |||
(i) Agents; Reasonable Care |
34 | |||
(j) Expenses; Repayment Assurances |
34 | |||
(k) Exercise of Rights; Consultation with Company |
34 | |||
Section 21. Change of Rights Agent |
35 | |||
Section 22. Issuance of New Rights Certificates |
35 | |||
Section 23. Redemption and Termination |
36 | |||
(a) Redemption |
36 | |||
(b) Effect of Redemption; Procedure |
36 | |||
Section 24. Exchange |
36 | |||
(a) Right to Exchange |
36 | |||
(b) Effect of Exchange; Procedure |
37 | |||
(c) Common Stock Equivalents |
38 | |||
(d) Insufficient Common Stock |
38 | |||
(e) Fractional Shares |
38 | |||
Section 25. Notice of Certain Events |
38 | |||
(a) Preferred Stock Transactions, etc. |
38 | |||
(b) Other Transactions |
39 | |||
Section 26. Notices |
39 | |||
Section 27. Supplements and Amendments |
40 | |||
Section 28. Successors |
41 | |||
Section 29. Determinations and Actions by the Board of Directors, etc. |
41 | |||
Section 30. Benefits of this Agreement |
41 | |||
Section 31. Severability |
41 | |||
Section 32. Governing Law; Submission to Jurisdiction |
42 | |||
Section 33. Counterparts |
42 | |||
Section 34. Descriptive Headings |
42 |
iii
Exhibit 1
|
Form of Certificate of Designations of Series B Junior Participating Preferred Stock | |
Exhibit 2
|
Form of Rights Certificate | |
Exhibit 3
|
Summary of Rights |
iv
RIGHTS AGREEMENT, dated as of July 30, 2011, between COMMERCIAL METALS COMPANY, a Delaware
corporation (the “Company”), and BROADRIDGE CORPORATE ISSUER SOLUTIONS, INC. (the “Rights Agent”).
On July 30, 2011 (the “Rights Dividend Declaration Date”), the Board of Directors of the
Company (i) authorized and declared a dividend distribution of one preferred share purchase right
(a “Right”) for each share of Common Stock (as hereinafter defined) of the Company outstanding at
the close of business on August 11, 2011 (the “Record Date”), each Right initially representing the
right to purchase one one-thousandth of a share of Series B Junior Participating Preferred Stock,
par value $1.00 per share, of the Company having the rights, powers and preferences set forth in
the Certificate of Designations of Series B Junior Participating Preferred Stock, attached hereto as
Exhibit 1, upon the terms and subject to the conditions hereinafter set forth, and (ii)
further authorized the issuance of one Right (as such number may be hereafter adjusted as provided
herein) for each share of Common Stock of the Company issued between the Record Date (whether
originally issued or delivered from the Company’s treasury) and the Distribution Date;
In consideration of the premises and the mutual agreements herein set forth, the parties
hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the following terms have the
meanings indicated:
(a) “Acquiring Person” shall mean any Person (as such term is hereinafter defined) who or
which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner
(as such term is hereinafter defined) of 10% or more of the shares of Common Stock then
outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the Company, (iii) any
employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to the terms of any such plan,
(iv) any Person who becomes an Acquiring Person solely as a result of a reduction in the number of
shares of Common Stock outstanding due to the repurchase of shares of Common Stock by the Company,
unless and until such Person shall purchase or otherwise become (as a result of actions taken by
such Person or its Affiliates or Associates) the Beneficial Owner of additional shares of Common
Stock constituting 1% or more of the then outstanding shares of Common Stock, or (v) any Person
who, as of immediately prior to the first public announcement of the adoption of this Agreement, is
the Beneficial Owner of 10% or more of the outstanding shares of Common Stock, until such time as
such Person shall become the Beneficial Owner (other than pursuant to a dividend or distribution
paid or made by the Company on the outstanding Common Stock or pursuant to a split or subdivision
of the
1
outstanding Common Stock) of any additional shares of Common Stock while such Person is the
Beneficial Owner of 10% or more of the outstanding shares of Common Stock. Notwithstanding the
foregoing, if (i) the Board of Directors of the Company determines in good faith that a Person who
would otherwise be an Acquiring Person, as defined pursuant to the foregoing provisions of this
paragraph, has become such inadvertently (including, without limitation, because (A) such Person
was unaware that it beneficially owned a percentage of Common Stock that would otherwise cause such
Person to be an Acquiring Person, or (B) such Person was aware of the extent of its Beneficial
Ownership of Common Stock but had no actual knowledge of the consequences of such Beneficial
Ownership under this Agreement) and without any intention of changing or influencing control of the
Company, and (ii) within ten Business Days of being requested by the Company to advise it regarding
the same, such Person certifies to the Company that such Person acquired shares of Common Stock in
excess of 9.99% (or, in the case of a Person described in clause (v) of this definition, any
additional shares of Common Stock while such Person is the Beneficial Owner of 10% or more of the
outstanding shares of Common Stock) inadvertently or without knowledge of the terms of the Rights
and who, together with all Affiliates and Associates, thereafter does not acquire additional shares
of Common Stock and within ten Business Days of being requested by the Company to do so disposes of
the portion of such shares of Common Stock in excess of 9.99% (or in the case of a Person described
in clause (v) of this definition, such additional shares), then such Person shall not be deemed to
be or to have become an Acquiring Person for any purposes of this Agreement; provided,
however, that if the Person requested to so certify fails to do so within ten Business Days
of the Company’s request or such Person fails to dispose of such shares of Common Stock in excess
of 9.99% (or in the case of a Person described in clause (v) of this definition, such additional
shares) within ten Business Days of the Company’s request, then such Person shall become an
Acquiring Person immediately after such ten Business Day period. The phrase “then outstanding,”
when used with reference to a Person’s Beneficial Ownership of securities of the Company, shall
mean the number of such securities then issued and outstanding together with the number of such
securities not then actually issued and outstanding which such Person would be deemed to own
beneficially hereunder.
(b) “Act” shall mean the Securities Act of 1933, as amended and in effect from time to time.
(c) “Adjustment Shares” shall have the meaning set forth in Section 11(a)(ii) (Adjustment
of Purchase Price; Number and Kind of Shares or Number of Rights — Certain
Adjustments).
(d) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act.
(e) “Agreement” shall mean this Rights Agreement as originally executed or as it may from time
to time be supplemented or amended pursuant to the applicable provisions hereof.
(f) A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to “beneficially
own,” any securities:
2
(ii) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of or has “beneficial ownership” of (as
determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Exchange
Act), including pursuant to any agreement, arrangement or understanding (whether or not in
writing); provided, however, that a Person shall not be deemed the
“Beneficial Owner” of, or to “beneficially own,” any security under this subparagraph (ii)
as a result of an agreement, arrangement or understanding to vote such security if such
agreement, arrangement or understanding (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable provisions of the General Rules and Regulations under the Exchange Act and
(B) is not also then reportable by such Person on Schedule 13D under the Exchange Act (or
any comparable or successor report);
(iii) which are beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person (or any of such Person’s Affiliates
or Associates) has any agreement, arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as
described in the proviso to subparagraph (ii) of this definition) or disposing of any voting
securities of the Company; or
(iv) that such Person or any of such Person’s Affiliates or Associates Constructively
Own;
provided, however, that nothing in this definition shall cause a Person engaged in
business as an underwriter of securities to be the “Beneficial Owner” of or to “beneficially own,”
any securities acquired through such Person’s participation in good faith in a firm commitment
underwriting
3
until the expiration of forty (40) calendar days after the date of such acquisition or such later
date as the Board may determine in any specific case.
Notwithstanding anything in this definition of Beneficial Ownership to the contrary, the
phrase “then outstanding,” when used with reference to a Person’s Beneficial Ownership of
securities of the Company, shall mean the number of such securities then issued and outstanding
together with the number of such securities not then actually issued and outstanding which such
Person would be deemed to beneficially own hereunder.
(g) “Board” means the Board of Directors of the Company.
(h) “Business Day” shall mean any day other than a Saturday, Sunday or a day on which banking
institutions in the State of Texas are authorized or obligated by law or executive order to close.
(i) “Close of Business” on any given date shall mean 5:00 P.M., Dallas, Texas time, on such
date; provided, however, that if such date is not a Business Day it shall mean 5:00
P.M., Dallas, Texas time, on the next succeeding Business Day.
(j) “Common Stock” shall mean the common stock, par value $0.01 per share, of the Company,
except that “Common Stock” when used with reference to any Person other than the Company shall mean
the capital stock of such Person with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of such Person.
(k) “Common Stock Equivalents” shall have the meaning set forth in Section 11(a)(iii)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights — Certain
Adjustments).
(l) “Company” shall mean the Person named as the “Company” in the first paragraph of this
Agreement until a successor corporation shall have become such, or until a Principal Party shall
assume, and thereafter be liable for, all obligations and duties of the Company hereunder, pursuant
to the applicable provisions of this Agreement, and thereafter “Company” shall mean such successor
corporation or Principal Party.
(m) A Person shall be deemed to “Constructively Own” shares of Common Stock in respect of
which such Person has or has the right to acquire a Synthetic Long Position, calculated in the
manner set forth below. The number of shares of Common Stock in respect of a Synthetic Long
Position that shall be deemed to be Constructively Owned is the notional or other number of shares
of Common Stock in respect of such Synthetic Long Position that is specified in a filing by such
Person or any of such Person’s Affiliates or Associates with the SEC or in the documentation
evidencing such Synthetic Long Position as the basis upon which the value or settlement amount of
such Synthetic Long Position, or the opportunity of the holder of such Synthetic Long Position to
profit or share in any profit, is to be calculated in whole or in part, and in any case (or if no
such number of shares of Common Stock is specified in any filing or
4
documentation), as determined by the Board of Directors in good faith to be the number of
shares of Common Stock to which such Synthetic Long Position relates.
(n) “Current Market Price” shall have the meaning set forth in Section 11(d) (Adjustment
of Purchase Price; Number and Kind of Shares or Number of Rights — Current Market
Price).
(o) “Current Value” shall have the meaning set forth in Section 11(a)(iii) (Adjustment of
Purchase Price; Number and Kind of Shares or Number of Rights — Certain Adjustments).
(p) “Derivative” shall mean any option, warrant, convertible security, stock appreciation
right, swap agreement or other security, contract right or derivative position other than any
interest, right, option or other security described in Rule 16a-1(c)(1)-(5) or (7) of the General
Rules and Regulations under the Exchange Act.
(q) “Distribution Date” shall have the meaning set forth in Section 3(a) (Issuance of
Rights Certificates — Distribution Date; Rights Certificates).
(r) “Equivalent Preferred Stock” shall have the meaning set forth in Section 11(b)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights —
Purchase Price Adjustment — Capital Stock).
(s) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended and in effect on
the date of this Agreement.
(t) “Exchange Ratio” shall have the meaning set forth in Section 24(a) (Exchange — Right
to Exchange).
(u) “Expiration Date” shall have the meaning set forth in Section 7(a) (Exercise of
Rights; Purchase Price; Expiration Date of Rights — Exercise).
(v) “Final Expiration Date” shall mean the Close of Business on August 1, 2014.
(w) “Flip-in Event” shall mean any event described in Section 11(a)(ii) (Adjustment of
Purchase Price; Number and Kind of Shares or Number of Rights — Certain Adjustments).
(x) “Flip-in Trigger Date” shall have the meaning set forth in Section 11(a)(iii)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights — Certain
Adjustments).
(y) “Flip-over Event” shall mean any event described in clauses (x), (y) or (z) of Section
13(a) (Consolidation, Merger or Sale or Transfer of Assets or Earning Power —
Flip-over Event).
5
(z) “Original Rights” shall have the meaning set forth in Section 1(f)(i) (Certain
Definitions).
(aa) “Person” shall mean any individual, firm, corporation, limited liability company,
partnership or other entity.
(bb) “Preferred Stock” shall mean the Series B Junior Participating Preferred Stock, par value
$1.00 per share, of the Company having the rights and preferences set forth in the form of
Certificate of Designations of Series B Junior Participating Preferred Stock attached hereto as
Exhibit 1, and, to the extent that there is not a sufficient number of shares of Series B
Junior Participating Preferred Stock authorized to permit the full exercise of the Rights, any
other series of preferred stock, par value $1.00 per share, of the Company designated for such
purpose containing terms substantially similar to the terms of the Series B Junior Participating
Preferred Stock.
(cc) “Principal Party” shall have the meaning set forth in Section 13(b) (Consolidation,
Merger or Sale or Transfer of Assets or Earning Power — Principal Party).
(dd) “Purchase Price” shall have the meaning set forth in Section 4(a) (Form of Rights
Certificates — Form; Date).
(ee) “Record Date” shall have the meaning set forth in the Recital at the beginning of the
Agreement.
(ff) “Redemption Date” shall have the meaning set forth in Section 23(a) (Redemption and
Termination — Redemption).
(gg) “Redemption Price” shall have the meaning set forth in Section 23(a) (Redemption and
Termination — Redemption).
(hh) “Rights” shall have the meaning set forth in the Recital at the beginning of the
Agreement.
(ii) “Rights Agent” shall mean the Person named as the “Rights Agent” in the first paragraph
of this Agreement until a successor Rights Agent shall have become such pursuant to the applicable
provisions hereof and thereafter “Rights Agent” shall mean such successor Rights Agent. If at any
time there is more than one Person appointed by the Company as Rights Agent pursuant to the
applicable provisions of this Agreement, “Rights Agent” shall mean and include each such Person.
(jj) “Rights Certificates” shall have the meaning set forth in Section 3(a) (Issuance of
Rights Certificates — Distribution Date; Rights Certificates).
(kk) “Rights Dividend Declaration Date” shall have the meaning set forth in the Recital at the
beginning of the Agreement.
6
(ll) “SEC” means the United States Securities and Exchange Commission.
(mm) “Spread” shall have the meaning set forth in Section 11(a)(iii) (Adjustment of
Purchase Price; Number and Kind of Shares or Number of Rights — Certain Adjustments).
(nn) “Stock Acquisition Date” shall mean the first date of public announcement (which, for
purposes of this definition, shall include, without limitation, a report filed or amended pursuant
to Section 13(d) under the Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such.
(oo) “Subsidiary” shall mean, with reference to any Person, any corporation or other entity of
which at least a majority of the voting power of equity securities or majority of the equity
interest is beneficially owned, directly or indirectly, by such Person, or otherwise controlled by
such Person.
(pp) “Substitution Period” shall have the meaning set forth in Section 11(a)(iii)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights — Certain
Adjustments).
(qq) “Synthetic Long Position” shall mean any Derivative, whether or not presently
exercisable, that has an exercise or conversion privilege or a settlement payment or mechanism at a
price related to the value of the Common Stock or a value determined in whole or in part with
reference to, or derived in whole or in part from, the value of the Common Stock and that increases
in value as the value of the Common Stock increases or that provides to the holder an opportunity,
directly or indirectly, to profit or share in any profit derived from any increase in the value of
the Common Stock, in any case without regard to whether (i) such Derivative conveys any voting
rights in the Common Stock to such Person or any of such Person’s Affiliates or Associates, (ii)
such Derivative is required to be, or capable of being, settled through delivery of Common Stock or
(iii) such Person or any of such Person’s Affiliates or Associates may have entered into other
transactions that hedge the economic effect of such Derivative.
(rr) “Trading Day” shall have the meaning set forth in Section 11(d)(i) (Adjustment of
Purchase Price; Number and Kind of Shares or Number of Rights — Current Market Price).
(ss) “Triggering Event” shall mean any Flip-in Event or any Flip-over Event.
(tt)
“Trust” shall have the meaning set forth in Section 24(b) (Exchange — Effect of
Exchange; Procedure).
(uu)
“Trust Agreement” shall have the meaning set forth in Section 24(b) (Exchange —
Effect of Exchange; Procedure).
7
Section 2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as
agent for the Company in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time appoint such Co-Rights Agents as
it may deem necessary or desirable.
Section 3. Issuance of Rights Certificates.
(a) Distribution Date; Rights Certificates. Until the earlier of (i) the Close of
Business on the tenth Business Day after the Stock Acquisition Date (or, if the tenth Business Day
after the Stock Acquisition Date occurs before the Record Date, the Close of Business on the Record
Date), or (ii) the Close of Business on the tenth Business Day (or such later date as the Board
shall determine prior to such time as any Person becomes an Acquiring Person) after the date that a
tender or exchange offer by any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to the terms of any such plan)
is first published or sent or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof such Person would be an Acquiring
Person (the earlier of (i) and (ii) being herein referred to as the “Distribution Date”), (x) the
Rights will be evidenced (subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock registered in the names of the holders of the Common Stock (which
certificates for Common Stock shall be deemed also to be certificates for Rights) and not by
separate certificates, and (y) the Rights will be transferable only in connection with the transfer
of the underlying shares of Common Stock (including a transfer to the Company, except pursuant to
the provision of Section 23 (Redemption and Termination)). As soon as practicable after the
Distribution Date, the Rights Agent will send by first-class, insured, postage prepaid mail, to
each record holder of the Common Stock as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, one or more rights certificates, in
substantially the form of Exhibit 2 hereto (the “Rights Certificates”), evidencing one
Right for each share of Common Stock so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of Common Stock has been made pursuant
to Section 11(p) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights — Common Stock Adjustments) at the time of distribution of the Rights
Certificates, the Company shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) (Fractional Rights and Fractional Shares — Fractional
Rights)) so that Rights Certificates representing only whole numbers of Rights are distributed
and cash is paid in lieu of any fractional Rights. As of and after the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates. The Company shall promptly notify the
Rights Agent in writing upon the occurrence of a Distribution Date. Until such notice is received
by the Rights Agent, the Rights Agent may presume conclusively for all purposes that a Distribution
Date has not occurred.
(b) Common Stock Certificates; Summary of Rights. The Company will make available, as promptly as practicable, a copy of a Summary of Rights,
in substantially the form attached as Exhibit 3 (the “Summary of Rights”), to any holder of
Rights who may so
8
request from time to time prior to the Expiration Date. With respect to
certificates for the Common Stock outstanding as of the Record Date or that become outstanding
subsequent to the Record Date, until the Distribution Date, the Rights associated with the Common
Stock represented by such certificates will be evidenced by such certificates alone and the
registered holders of such Common Stock shall also be the registered holders of the associated
Rights. Until the earlier of the Distribution Date or the Expiration Date, the transfer of any
certificates representing shares of Common Stock in respect of which Rights have been issued shall
also constitute the transfer of the Rights associated with such shares of Common Stock.
(c) Legend. Rights shall be issued in respect of all certificates for shares of Common
Stock which are issued (whether originally issued or from the Company’s treasury) after the Record
Date but prior to the earliest of the (i) Distribution Date, (ii) the Expiration Date, or (iii) the
Redemption Date, or, in certain circumstances provided in Section 22 (Issuance of New Rights
Certificates) after the Distribution Date. Certificates representing such shares of Common
Stock shall also be deemed to be certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder hereof to certain Rights as
set forth in the Rights Agreement dated as of July 30, 2011, by and between
Commercial Metals Company (the “Company”) and Broadridge Corporate Issuer Solutions,
Inc., as Rights Agent (the “Rights Agreement”), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the principal
offices of the Company. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and will no longer
be evidenced by this certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the date of mailing,
without charge promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued to, or held by, any
Person who is, was or becomes an Acquiring Person or any Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement), whether currently held
by or on behalf of such Person or by any subsequent holder, may become null and
void.
With respect to such certificates containing the foregoing legend, until the earliest of (i) the
Distribution Date, (ii) the Expiration Date, and (iii) the Redemption Date, (x) the Rights
associated with the Common Stock represented by such certificates shall be evidenced by such
certificates alone, (y) the registered holders of such Common Stock shall also be the registered
holders of the associated Rights, and (z) the transfer of any of such certificates shall also
constitute the transfer of the Rights associated with such shares of Common Stock. In the event
that the Company purchases, or acquires any shares of Common Stock after the Record Date but prior
to the Distribution Date, any rights associated with such shares of Common Stock shall be deemed
canceled and retired so that the Company shall not be entitled to exercise any Rights associated
with shares of Common Stock which are no longer outstanding. Notwithstanding this
Section 3(c), the omission of a legend shall not affect the enforceability of any part of this
Rights Agreement or the rights of any holder of the Rights.
9
Section 4. Form of Rights Certificates.
(a) Form; Date. The Rights Certificates (and the forms of election to purchase and of
assignment to be printed on the reverse thereof) shall each be substantially in the form set forth
in Exhibit 2 hereto and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation
of any stock exchange on which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 11 (Adjustment of Purchase Price; Number and Kind of
Shares or Number of Rights) and Section 22 (Issuance of New Rights Certificates), the
Rights Certificates, whenever distributed, shall be dated as of the Record Date or, in the case of
Rights with respect to shares of Common Stock issued or becoming outstanding after the Record Date,
the same date as the date of the stock certificate evidencing such shares, and on their face shall
entitle the holders thereof to purchase such number of one one-thousandths of a share of Preferred
Stock as shall be set forth therein at the price set forth therein (such exercise price per one
one-thousandth of a share is referred to herein as the “Purchase Price”), but the amount and type
of securities purchasable upon the exercise of each Right and the Purchase Price thereof shall be
subject to adjustment as provided herein.
The Rights represented by this Rights Certificate are or were beneficially owned by
a Person who was or became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement dated as of July
30, 2011, by and between Commercial Metals Company and
10
Broadridge Corporate Issuer
Solutions, Inc., as Rights Agent). Accordingly, this Rights Certificate and the
Rights represented hereby may become null and void in the circumstances specified in
Section 7(e) (Exercise of Rights; Purchase Price; Expiration Date of Rights
— Termination of Acquiring Person’s Rights) of such Agreement.
Section 5. Countersignature and Registration.
(b) Registration and Transfer. Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices designated as the appropriate place
for surrender of Rights Certificates upon exercise or transfer, books for registration and transfer
of the Rights Certificates issued hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of Rights evidenced on its face by each
of the Rights Certificates and the date of each of the Rights Certificates.
(a) Procedure. Subject to the provisions of Section 4(b) (Form of Rights
Certificates — Acquiring Person Legend), Section 7(e) (Exercise of Rights;
Purchase Price; Expiration Date of
Rights — Termination of Acquiring Person’s Rights) and Section 14
(Fractional Rights and Fractional Shares), at any time after the Close of Business on the
Distribution Date, and at or prior to the earlier of the Redemption Date or the Close of Business
on the Expiration Date, any Rights Certificate or Certificates may be transferred, split up,
combined or exchanged for another Rights Certificate or Certificates, entitling the registered
holder to purchase a like number of one one-thousandths of a share of Preferred Stock (or,
following a Triggering Event, Common Stock, other securities, cash or other assets, as the case may
be) as the Rights Certificate or Certificates surrendered then entitle such holder (or former
holder in the case of a transfer) to purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Rights Certificate or Certificates shall make such request in writing
11
delivered to the Rights Agent, and shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the principal office or offices of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be obligated to take
any action whatsoever with respect to the transfer of any such surrendered Rights Certificate until
the registered holder shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall reasonably request. Thereupon, the Rights Agent shall,
subject to Section 4(b), Section 7(e) and Section 14, countersign and deliver to the Person
entitled thereto a Rights Certificate or Rights Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or exchange of Rights
Certificates.
(b) Issuance of New Rights Certificates. Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation of a
Rights Certificate, and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and cancellation of the Rights
Certificate if mutilated, the Company will execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and delivery to the registered owner in lieu of the
Rights Certificate so lost, stolen, destroyed or mutilated.
Notwithstanding any other provisions hereof, the Company and the Rights Agent may amend this
Rights Agreement to provide for uncertificated Rights in addition to or in place of Rights
evidenced by Rights Certificates.
12
(b) Purchase Price. The Purchase Price for each one one-thousandth of a share of
Preferred Stock purchasable upon the exercise of a Right shall initially be $70.00, and shall be
subject to adjustment from time to time as provided in Section 11 (Adjustment of Purchase
Price; Number and Kind of Shares or Number of Rights) and Section 13(a) (Consolidation,
Merger or Sale or Transfer of Assets or Earning Power — Flip-over Event) and shall be
payable in accordance with paragraph (a) of this Section 7.
(d) Partial Exercise. In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate evidencing
13
Rights
equivalent to the Rights remaining unexercised shall be issued by the Rights Agent and delivered
to, or upon the order of the registered holder of such Rights Certificate, registered in such name
or names as may be designated by such holder, subject to the provisions of Section 14
(Fractional Rights and Fractional Shares).
Section 8. Cancellation and Destruction of Rights Certificates. All Rights Certificates
surrendered for the purpose of exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or any of its agents, be delivered to the Rights Agent for cancellation
or in canceled form, or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions
of this Agreement. The Company shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall so cancel and retire, any other Rights Certificate purchased or acquired
by the Company otherwise than upon the exercise thereof. The Rights Agent shall deliver all
canceled Rights Certificates to the Company, or shall, at the
14
written request of the Company,
destroy such canceled Rights Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
(a) Reservation of Capital Stock. The Company will use its best efforts to reserve and
keep available out of its authorized and unissued shares of Preferred Stock (and, following the
occurrence of a Triggering Event, out of its authorized and unissued shares of Common Stock and/or
other securities, as the case may be, or out of its authorized and issued shares held in its
treasury), the number of shares of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities, as the case may be) that, as provided in this
Agreement, including the rights of the Company under Section 11(a)(iii) (Adjustment of Purchase
Price; Number and Kind of Shares or Number of Rights — Certain Adjustments) will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) Listing. So long as the shares of Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities, as the case may be) issuable and
deliverable upon the exercise of the Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such exchange upon official
notice of issuance upon such exercise.
(c) Registration under the Act. The Company will use its best efforts to (i) file, as
soon as practicable following the earliest date after the first occurrence of a Flip-in Event on
which the consideration to be delivered by the Company upon exercise of the Rights has been
determined in accordance with Section 11(a)(iii) (Adjustment of Purchase Price; Number and Kind
of Shares or Number of Rights — Certain Adjustments), or as soon as is required by law
following the Distribution Date,
as the case may be, a registration statement on an appropriate form under the Act with respect
to the securities purchasable upon exercise of the Rights if then necessary to permit the issuance
of the securities upon exercise of the Rights, (ii) cause such registration statement to become
effective as soon as practicable after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the Act) until the
earlier of (A) the date as of which the Rights are no longer exercisable for such securities, and
(B) the Expiration Date. The Company will also take such action as may be appropriate under, or to
ensure compliance with, the securities or “blue sky” laws of the various states in connection with
the exercisability of the Rights. The Company may temporarily suspend, for a period of time not to
exceed ninety (90) calendar days after the date set forth in clause (i) of the first sentence of
this Section 9(c), the exercisability of the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been temporarily suspended,
as well as a public announcement at such time as the suspension is no longer in effect. In
addition, if the Company shall determine that a registration statement is required following the
Distribution Date and a Flip-in Event has not occurred, the Company may temporarily suspend the
exercisability of the Rights until such time as a registration statement has been declared
effective. Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction if the requisite
15
qualification or exemption in such jurisdiction
shall not have been obtained, the exercise thereof shall not be permitted under applicable law or a
registration statement shall not have been declared effective.
(d) Covenant Regarding Capital Stock. The Company will take all such action as may be
necessary to ensure that all one one-thousandths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, shares of Common Stock and/or other securities, as the case may
be) delivered upon exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price), be duly and validly authorized and issued and
fully paid and nonassessable.
(e) Transfer Taxes and Charges. The Company will pay when due and payable any and all
federal and state transfer taxes and charges which may be payable in respect of the issuance or
delivery of the Rights Certificates and of any certificates for a number of one one-thousandths of
a share of Preferred Stock (or Common Stock and/or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may
be payable in respect of any transfer or delivery of Rights Certificates to a Person other than, or
the issuance or delivery of a number of one one-thousandths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) in respect of a name other than, that of
the registered holder of the Rights Certificates evidencing Rights surrendered for exercise or to
issue or deliver any certificates for a number of one one-thousandths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) in a name other than that of the
registered holder upon the exercise of any Rights until such tax shall have been paid (any such tax
being payable by the holder of such Rights Certificate at the time of surrender) or until it has
been established to the Company’s satisfaction that no such tax is due.
16
Section 11. Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights. The
Purchase Price, the number and kind of shares covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A)
declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B)
subdivide or split the outstanding Preferred Stock, (C) combine the shares of the
outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its
capital stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation), except as otherwise provided in this Section 11(a) and
Section 7(e) (Exercise of Rights; Purchase Price; Expiration Date of Rights —
Termination of Acquiring Person’s Rights), the Purchase Price in effect at the time
of the record date for such dividend or of the effective date of such subdivision, split,
combination or reclassification, and the number and kind of shares of Preferred Stock or
capital stock, as the case may be, issuable on such date, shall be proportionately adjusted
so that the holder of any Right exercised after such time shall be entitled to receive, upon
payment of the aggregate adjusted Purchase Price then in effect necessary to exercise a
Right in full, the aggregate number and kind of shares of Preferred Stock or capital stock,
as the case may be, which, if such Right had been exercised immediately prior to such date
and at a time when the Preferred Stock (or other capital stock, as the case may be) transfer
books of the Company were open, such holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend, subdivision, split,
combination or reclassification. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii) the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 (Exchange), in the event any Person becomes an
Acquiring Person (such event, a “Flip-in Event”), then each holder of a Right (except as
provided below and in Section 7(e) (Exercise of Rights; Purchase Price; Expiration Date
of Rights — Termination of Acquiring Person’s Rights)) shall thereafter have
the right to receive, upon exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of the number of one one-thousandths of a share of
Preferred Stock, such number of shares of Common Stock as shall equal the result obtained by
(x) multiplying the then current Purchase Price by the then number of one one-thousandths of
a share of Preferred Stock for which a Right was exercisable immediately prior to the first
occurrence of a Flip-in Event, and (y) dividing that product (which, following such first
occurrence, shall thereafter be referred to as the “Purchase Price” for each Right and for
all purposes of this Agreement) by 50% of the Current Market Price per share of Common Stock
on the date of such first occurrence (such number of shares being referred to as the
“Adjustment Shares”). The Company shall
17
give the Rights Agent written notice of the
identity of any Acquiring Person, any Associate or Affiliate of such Acquiring Person, in
each case known to the Company.
(iii) In the event that the number of shares of Common Stock that are authorized by the
Company’s Restated Certificate of Incorporation, as amended, but not outstanding or reserved
for issuance for purposes other than upon exercise of the Rights is not sufficient to permit
the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of
this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Right (the “Current Value”) over (2) the
Purchase Price (such excess, the “Spread”), and (B) with respect to each Right, subject to
Section 7(e)(Exercise of Rights; Purchase Price; Expiration Date of Rights —
Termination of Acquiring Person’s Rights), make adequate provision to substitute for
the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred stock which the
Board has deemed to have substantially the same dividend, voting and liquidation rights as
shares of Common Stock and are deemed in good faith by the Board of Directors to have
substantially the same value as the shares of Common Stock (such shares of preferred stock
being referred to as “Common Stock Equivalents”)), (4) debt securities of the Company, (5)
other assets, or (6) any combination of the foregoing, having an aggregate value equal to
the Current Value (less the amount of any reduction in the Purchase Price), where such
aggregate value has been determined by the Board based upon the advice of a nationally
recognized investment banking firm selected by the Board; provided, however,
that if the Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) calendar days following the later of (x) the first
occurrence of a Flip-in Event and (y)
the date on which the Company’s right of redemption pursuant to Section 23(a)
(Redemption and Termination) expires (the later of (x) and (y) being referred to
herein as the “Flip-in Trigger Date”), then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring payment of the Purchase Price,
shares of Common Stock (to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If the Board shall determine in
good faith that it is likely that sufficient additional shares of Common Stock or other
equity securities could be authorized for issuance upon exercise in full of the Rights, the
thirty (30) calendar day period set forth above may be extended to the extent necessary, but
not more than ninety (90) calendar days after the Flip-in Trigger Date, in order that the
Company may seek stockholder approval for the authorization of such additional shares (such
period, the “Substitution Period”). To the extent that the Company determines that some
action need be taken pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company (x) shall provide, subject to Section 7(e), that such action shall
apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of distribution to be made pursuant
to such first sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the exercisability of
the Rights has been temporarily
18
suspended, as well as a public announcement at such time as
the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value
of the shares of Common Stock shall be the Current Market Price per share of the Common
Stock on the Flip-in Trigger Date and the value of any Common Stock Equivalent shall be
deemed to have the same value as the Common Stock on such date.
(iv) If the rules of the national securities exchange, registered as such pursuant to
Section 6 of the Exchange Act on which the Common Stock is principally traded would prohibit
such exchange from listing or continuing to list the Common Stock or other equity securities
of the Company if the Rights were to be exercised for shares of Common Stock in accordance
with subparagraph (ii) of this Section 11(a) because such issuance would nullify, restrict
or disparately reduce the per share voting rights of holders of Common Stock, the Company
shall: (A) determine the Spread, and (B) with respect to each Right, make adequate provision
to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1)
cash, (2) a reduction in the Purchase Price, (3) equity securities of the Company,
including, without limitation, Common Stock Equivalents, other than securities which would
have the effect of nullifying, restricting or disparately reducing the per share voting
rights of holders of Common Stock, (4) debt securities of the Company, (5) other assets, or
(6) any combination of the foregoing, having an aggregate value equal to the Current Value,
where such aggregate value has been determined by the Board based upon the advice of a
recognized investment banking firm selected by the Board; provided, however,
if the Company shall not have made adequate provision to deliver value pursuant to clause
(B) above within thirty (30) calendar days following the Flip-in Trigger Date, then the
Company shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, cash having an aggregate value equal to the
Spread. To the extent that the
Company determines that some action need be taken pursuant to the first sentence of
this Section 11(a)(iv), the Company (x) shall provide, subject to Section 7(e) (Exercise
of Rights; Purchase Price; Expiration Date of Rights — Termination of Acquiring
Person’s Rights), that such action shall apply uniformly to all outstanding Rights and
(y) may suspend the exercisability of the Rights, but not longer than ninety (90) calendar
days after the Flip-in Trigger Date, in order to decide the appropriate form of distribution
to be made pursuant to such first sentence and to determine the value thereof. In the event
of any such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect. For purposes of this
Section 11(a)(iv), the value of the shares of Common Stock shall be the Current Market Price
per share of the Common Stock on the Flip-in Trigger Date and the value of any Common Stock
Equivalent shall be deemed to have the same value as the Common Stock on such date.
19
Preferred
Stock”)) or securities convertible into Preferred Stock or Equivalent Preferred Stock at a price
per share of Preferred Stock or per share of Equivalent Preferred Stock (or having a conversion
price per share, if a security convertible into shares of Preferred Stock or Equivalent Preferred
Stock) less than the Current Market Price per share of Preferred Stock on such record date, the
Purchase Price to be in effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Preferred Stock outstanding on such record date, plus the
number of shares of Preferred Stock which the aggregate offering price of the total number of
shares of Preferred Stock and/or Equivalent Preferred Stock so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would purchase at such
Current Market Price, and the denominator of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional shares of Preferred Stock and/or
Equivalent Preferred Stock to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case such subscription price
may be paid by delivery of consideration part or all of which may be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Shares of Preferred Stock owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date is fixed, and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been fixed.
20
(i) For the purpose of any computation hereunder, other than computations made pursuant
to Section 11(a)(iii) (Adjustment of Purchase Price; Number and Kind of Shares or Number
of Rights — Certain Adjustments), the Current Market Price per share of Common
Stock on any date shall be deemed to be the average of the daily closing prices per share of
such Common Stock for the thirty (30) consecutive Trading Days immediately prior to such
date, and for purposes of computations made pursuant to Section 11(a)(iii) the Current
Market Price per share of Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock for the ten (10) consecutive Trading
Days immediately following such date; provided, however, that in the event
that the Current Market Price per share of the Common Stock is determined during a period
following the announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or securities
convertible into shares of such Common Stock (other than the Rights), or (B) any
subdivision, combination or reclassification of such Common Stock and the ex-dividend date
for such dividend or distribution, or the record date for such subdivision, combination or
reclassification shall not have occurred prior to the commencement of the requisite thirty
(30) Trading Day or ten (10) Trading Day period, as set forth above, then, and in each such
case, the Current Market Price shall be properly adjusted to take into account ex-dividend
trading. The closing price for each Trading Day shall be the last sale price, regular way,
or, in case no such sale takes place on such Trading Day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to trading on the
New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock
are not listed or admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the OTC Bulletin Board service or such other
quotation system then in use, or, if on any such date the shares of Common Stock are not
quoted by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common Stock selected by the
Board. If on any such date no market maker is making a market in the Common Stock, the fair
value of such shares on such date as determined in good faith by the Board shall be used.
The term “Trading Day” shall mean a day on which the principal national securities exchange
on which the shares of Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange, a Business Day. If the Common Stock is not
publicly held or not so listed or traded, Current Market Price per share shall mean the fair
value per share as determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for all
purposes.
(ii) For the purpose of any computation hereunder, the Current Market Price per share
of Preferred Stock shall be determined in the same manner as set forth
21
above for the Common
Stock in clause (i) of this Section 11(d) (other than the last sentence thereof). If the
Current Market Price per share of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held or listed or traded in a
manner described in clause (i) of this Section 11(d), the Current Market Price per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 1,000 (as such number
may be appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring after the date of this
Agreement) multiplied by the Current Market Price per share of the Common Stock. If neither
the Common Stock nor the Preferred Stock is publicly held or so listed or traded, Current
Market Price per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes. For all purposes of
this Agreement, the Current Market Price of one one-thousandth of a share of Preferred Stock
shall be equal to the Current Market Price of one share of Preferred Stock divided by 1,000.
22
(h) Preferred Stock Anti-Dilution. Unless the Company shall have exercised its election
as provided in Section 11(i) (Adjustment of Purchase Price; Number and Kind of Shares or Number
of Rights — Adjustment of Number of Rights), upon each adjustment of the Purchase
Price as a result of the calculations made in Section 11(b) (Adjustment of Purchase Price;
Number and Kind of Shares or Number of Rights — Purchase Price Adjustment — Capital
Stock) and Section 11(c) (Adjustment of Purchase Price; Number and Kind of Shares or Number
of Rights — Purchase Price Adjustment — Cash, Assets, etc.), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the right to purchase,
at the adjusted Purchase Price, that number of one one-thousandths of a share of Preferred Stock
(calculated to the nearest one-hundred-thousandth) obtained by (i) multiplying (x) the number of
one one-thousandths of a share covered by a Right immediately prior to this adjustment, by (y) the
Purchase Price in effect immediately prior to such adjustment of such Purchase Price, and (ii)
dividing the product so obtained by the Purchase Price in effect immediately after such adjustment
of such Purchase Price.
23
to express the
Purchase Price per one one-thousandth of a share of Preferred Stock and the number of one
one-thousandths of a share of such Preferred Stock which were expressed in the initial Rights
Certificates issued hereunder.
(k) Adjustment Below Par Value. Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par or stated value, if any, of the number of one
one-thousandths of a share of Preferred Stock issuable upon exercise of the Rights, the Company
shall take any corporate action which is or may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and nonassessable such number of
one one-thousandths of a share of Preferred Stock at such adjusted Purchase Price.
24
earning
power aggregating more than 50% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the Company and/or any
of its Subsidiaries in one or more transactions each of which complies with Section 11(o)), if (x)
at the time of or immediately after such consolidation, merger, statutory share exchange or similar
transaction, or sale there are any rights, warrants or other instruments or securities outstanding
or agreements in effect which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger, statutory share exchange or similar transaction, or sale, the
stockholders of the Person who constitutes, or would constitute, the “Principal Party” for purposes
of Section 13(a) (Consolidation, Merger or Sale or Transfer of Assets or Earning Power —
Flip-over Event) shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates.
(o) Restriction Against Diminishing Benefits of the Rights. The Company covenants and
agrees that, after the Distribution Date, it will not, except as permitted by Section 23
(Redemption and Termination), Section 24 (Exchange) or Section 27 (Supplements and
Amendments) take (or permit any Subsidiary to take) any action if
at the time such action is taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Common Stock Adjustments. Anything in this Agreement to the contrary notwithstanding,
in the event that the Company shall at any time after the Rights Dividend Declaration Date and
prior to the Distribution Date (i) declare a dividend on the outstanding shares of Common Stock
payable in shares of Common Stock, (ii) subdivide or split the outstanding shares of Common Stock,
or (iii) combine the outstanding shares of Common Stock into a smaller number of shares, the number
of Rights associated with each share of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be proportionately adjusted so that the number
of Rights thereafter associated with each share of Common Stock following any such event shall
equal the result obtained by multiplying the number of Rights associated with each share of Common
Stock immediately prior to such event by a fraction, the numerator of which shall be the total
number of shares of Common Stock outstanding immediately prior to the occurrence of the event and
the denominator of which shall be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event. The adjustments provided for in this Section
11(p) shall be made successively to the Common Stock whenever such a dividend is declared or paid
or such subdivision, combination or consolidation is effected on such Common Stock.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares. Whenever an adjustment
is made as provided in Section 11 (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights) and Section 13 (Consolidation, Merger or Sale or Transfer of Assets or
Earning Power) the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent, and with each transfer agent for the Preferred Stock and the Common Stock, a
copy of such certificate, and (c) if the Distribution Date has occurred, mail a brief summary
thereof to each holder of a Rights Certificate in accordance with Section 26 (Notices).
25
The
Rights Agent shall be fully protected in relying on any such certificate and on any adjustment
therein contained.
(a) Flip-over Event. In the event that, at any time after a Person has become an
Acquiring Person, directly or indirectly, through one or a series of transactions, (x) the Company
shall consolidate with, or merge with and into, or enter into a statutory stock exchange or similar
transaction with, any other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o)(Adjustment of Purchase Price; Number and Kind of Shares or Number
of Rights — Restriction Against Diminishing Benefits of the Rights)), and the Company
shall not be the continuing or surviving corporation of such consolidation, merger or statutory
share exchange or similar transaction, (y) any Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o)) shall consolidate with, or merge with or into, or
enter into a statutory stock exchange or similar transaction with, the Company, and the Company
shall be the
continuing or surviving corporation of such consolidation, merger or statutory share exchange
or similar transaction and, in connection with such consolidation, merger or statutory share
exchange or similar transaction, all or part of the outstanding shares of Common Stock shall be
changed into or exchanged for stock or other securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one transaction or a series of related transactions, assets,
cash flow or earning power aggregating more than 50% of the assets, cash flow or earning power of
the Company and its Subsidiaries (taken as a whole) to any Person or Persons (other than the
Company or any Subsidiary of the Company in one or more transactions each of which complies with
Section 11(o)), then, and in each such case, (i) proper provision shall be made so that: each
holder of a Right, except as provided in Section 7(e) (Exercise of Rights; Purchase Price;
Expiration Date of Rights — Termination of Acquiring Person’s Rights) shall thereafter
have the right to receive, upon the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share
of Preferred Stock, such number of validly authorized and issued, fully paid, nonassessable and
freely tradeable shares of Common Stock of the Principal Party, not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be equal to the result
obtained by (A) multiplying the then current Purchase Price by the number of one one-thousandths of
a share of Preferred Stock for which a Right is exercisable immediately prior to the first
occurrence of a Flip-over Event (or, if a Flip-in Event has occurred prior to the first occurrence
of a Flip-over Event, multiplying the number of such one one-thousandths of a share for which a
Right was exercisable immediately prior to the first occurrence of a Flip-in Event by the Purchase
Price in effect immediately prior to such first occurrence), and (B) dividing that product (which,
following the first occurrence of a Flip-over Event, shall be referred to as the “Purchase Price”
for each Right and for all purposes of this Agreement) by 50% of the Current Market Price per
share of the Common Stock of such Principal Party on the date of consummation of such Flip-over
Event; (ii) such Principal Party shall thereafter be liable for, and shall assume, by virtue of
such Flip-over Event, all the obligations and duties of the Company pursuant to this Agreement;
(iii) the term “Company” shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 (Adjustment of Purchase Price; Number
and Kind of Shares or Number of Rights) shall apply
26
only to such Principal Party following the
first occurrence of a Flip-over Event; (iv) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of shares of its Common Stock) in
connection with the consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may be, in relation to
its shares of Common Stock thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) (Adjustment of Purchase Price; Number and Kind of Shares or
Number of Rights — Certain Adjustments) hereof shall be of no effect following the
first occurrence of any Flip-over Event. Notwithstanding anything in this Agreement to the
contrary, if a Flip-over Event shall occur prior to the Distribution Date, then (i) the Rights
shall survive such Flip-over Event and shall not as a result thereof be cancelled, terminated or
otherwise cease to exist and (ii) the Distribution Date shall be deemed to have occurred on the day
immediately prior to the date of such Flip-over Event.
(b) Principal Party. “Principal Party” shall mean
(i) in the case of any transaction described in clause (x) or (y) of the first sentence
of Section 13(a) (Consolidation, Merger or Sale or Transfer of Assets or Earning
Power — Flip-over Event), the Person that is the issuer of any securities into
which the shares of Common Stock are converted in such consolidation, merger or statutory
share exchange or similar transaction, or, if there is more than one such issuer, the issuer
of the shares of Common Stock of which have the greatest aggregate market value of shares
outstanding and if no securities are so issued, (x) the Person that is the other party to
such consolidation, merger or statutory share exchange or similar transaction if the Person
survives the merger, or, if there is more than one such Person, the Person the shares of
Common Stock of which have the greatest aggregate market value of shares outstanding, or (y)
if the Person that is the other party to the merger does not survive the merger, the Person
that does survive the merger or (z) the Person resulting from the consolidation, and
(ii) in the case of any transaction described in clause (z) of the first sentence of
Section 13(a) (Consolidation, Merger or Sale or Transfer of Assets or Earning Power
— Flip-over Event), the Person that is the party receiving the greatest portion of
the assets, cash flow or earning power transferred pursuant to such transaction or
transactions, or, if each Person that is a party to such transaction or transactions
receives that same portion of the assets, cash flow or earning power so transferred or if
the Person receiving the greatest portion of the assets or earning power cannot be
determined, whichever of such Persons as is the issuer of Common Stock having the greatest
aggregate market value of shares outstanding;
provided, however, that in any such case, (1) if the Common Stock of such Person is
not at such time and has not been continuously over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and such Person is a direct or indirect Subsidiary
of another Person the Common Stock of which is and has been so registered, “Principal Party” shall
refer to such other Person; and (2) in case such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Stocks of two or more of which are and have been so registered,
27
“Principal Party” shall refer to whichever of such Persons is the issuer of the total outstanding
Common Stock having the greatest aggregate market value.
(i) prepare and file a registration statement under the Act, with respect to the Rights
and the securities purchasable upon exercise of the Rights on an appropriate form, and will
use its best efforts to cause such registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a prospectus at all times
meeting the requirements of the Act) until the Expiration Date and take all such other
action as may be necessary to enable the Principal Party to issue the securities purchasable
upon exercise of the Rights, including but not limited to the registration or qualification
of such securities under all requisite securities laws or jurisdictions of the various
states and the listing of such securities on such exchange and trading markets as may be
necessary or appropriate;
(ii) use its best efforts, if the Common Stock of the Principal Party shall be listed
or admitted to trading on the New York Stock Exchange or on another national securities
exchange, to list or admit to trading (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on the New York Stock Exchange or such
securities exchange, or, if the Common Stock of the Principal Party shall not be listed or
admitted to trading on the New York Stock Exchange or a national securities exchange, to
cause the Rights and the securities receivable upon exercise of the Rights to be reported by
such other system then in use;
(iii) deliver to holders of the Rights historical financial statements for the
Principal Party and each of its Affiliates which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or preemptive rights in respect of
the Common Stock of the Principal Party subject to purchase upon exercise of outstanding
Rights.
The provisions of this Section 13 (Consolidation, Merger or Sale or Transfer of Assets or
Earning Power) shall similarly apply to successive consolidations, mergers or statutory share
exchanges or similar transactions or sales or other transfers. In the event that a Flip-over Event
shall occur at any time after the occurrence of a Flip-in Event, the Rights which have not
28
theretofore been exercised shall thereafter become exercisable in the manner described in Section
13(a) (Consolidation, Merger or Sale or Transfer of Assets or Earning Power —
Flip-over Event).
Section 14. Fractional Rights and Fractional Shares.
(a) Fractional Rights. The Company shall not be required to issue fractions of Rights, except prior to the
Distribution Date as provided in Section 11(p) (Adjustment of Purchase Price; Number and Kind
of Shares or Number of Rights — Common Stock Adjustments), or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be
paid to the registered holders of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to the same fraction of the current
market value of a whole Right. For purposes of this Section 14(a), the current market value
of a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to
the date on which such fractional Rights would have been otherwise issuable. The closing price of
the Rights for any Trading Day shall be the last sale price, regular way, or, in case no such sale
takes place on such Trading Day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if the Rights are not
listed or admitted to trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted to trading, or if the
Rights are not listed or admitted to trading on any national securities exchange, the last quoted
price or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market as reported by the OTC Bulletin Board service or such other quotation
system then in use or, if on any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional market maker making a
market in the Rights selected by the Board. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in good faith by the
Board shall be used.
29
one-thousandth of a share of Preferred Stock shall be one
one-thousandth of the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii) (Adjustment of Purchase Price; Number and Kind of Shares or Number of
Rights — Current Market Price) for the Trading Day immediately prior to the date of
such exercise.
(c)
Fractional Shares of Common Stock. Following the occurrence of a Triggering Event, the Company shall not be required to issue
fractions of shares of Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of fractional shares of Common Stock, the
Company may pay to the registered holders of Rights Certificates
at the time such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one (1) share of Common Stock. For purposes of this
Section 14(c), the current market value of one share of Common Stock shall be the closing price of
one share of Common Stock (as determined pursuant to Section 11(d)(i) (Adjustment of Purchase
Price; Number and Kind of Shares or Number of Rights — Current Market Price) for the
Trading Day immediately prior to the date of such exercise.
(d) Waiver of Fractional Rights and Shares. The holder of a Right by the acceptance of the Right expressly waives his or her right to
receive any fractional Rights or any fractional shares upon exercise of a Right, except as
permitted by this Section 14 (Fractional Rights and Fractional Shares).
Section 15. Rights of Action. All rights of action in respect of this Agreement are vested in the respective registered
holders of the Rights Certificates (and, prior to the Distribution Date, the registered holders of
the Common Stock); and any registered holder of any Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of the Rights Agent or of the holder
of any other Rights Certificate (or, prior to the Distribution Date, of the Common Stock), may, in
his or her own behalf and for his or her own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in respect of, his or
her right to exercise the Rights evidenced by such Rights Certificate in the manner provided in
such Rights Certificate and in this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and shall be entitled to
specific performance of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by accepting the same consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable only in connection with
the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the principal office or offices of the
30
Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) (Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates — Procedure)
and Section 7(f) (Exercise of Rights; Purchase Price; Expiration Date of Rights —
Surrender of Rights Certificates; Identity of Beneficial Owner), the Company and the Rights
Agent may deem and treat the person in whose name a Rights Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is registered as the absolute owner
thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated Common Stock certificate made by anyone other than the Company or
the Rights Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent,
subject to the last sentence of Section 7(e) (Exercise of Rights; Purchase Price; Expiration
Date of Rights — Termination of Acquiring Person’s Rights), shall be required to be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction
or by a governmental, regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental authority, prohibiting or
otherwise restraining performance of such obligation; provided, however, the
Company must use its commercially reasonable efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Rights Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose to be the holder of the number of one one-thousandths of a share of
Preferred Stock or any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as such, any of the
rights of a stockholder of the Company or any right to vote for the election of directors or upon
any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting stockholders (except
as provided in Section 25 (Notice of Certain Events)), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions hereof.
31
Section 18. Concerning the Rights Agent.
(a) Compensation. The Company shall pay to the Rights Agent reasonable compensation for all services rendered
by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the preparation, delivery, amendment,
administration and execution of this Agreement and the exercise and performance of its duties
hereunder. The Company agrees to indemnify the Rights Agent for, and to hold it harmless against,
any loss, liability damage, judgment, fine, penalty, claim, demand, settlement, loss or expense,
including, without limitation, reasonable attorneys’ fees, incurred without gross negligence, bad
faith or willful misconduct (as determined by a court of competent jurisdiction) on the part of the
Rights Agent, for anything done or omitted to be done by the Rights Agent in connection with the
acceptance, administration, exercise and performance of its duties under this Agreement, including
the reasonable costs and expenses of defending against any claim of liability in connection
therewith.
(b) Reliance. The Rights Agent shall be protected and shall incur no liability for or in respect of any
action taken, suffered or omitted to be taken by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certificate for Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement or other paper or document
believed by it to be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the advice of counsel as set forth
in Section 20 (Duties of Rights Agent).
(a) Successor. Any corporation into which the Rights Agent or any successor Rights Agent may be merged or
with which it may be consolidated, or any corporation resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties hereto;
provided, however, that such corporation would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 (Change of Rights Agent). In case
at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any
of the Rights Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Rights Certificates either
in the name of the predecessor or in the name of the successor Rights Agent;
and in all such cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
(b) Prior Countersignatures. In case at any time the name of the Rights Agent shall be changed and at such time any of
the Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and
32
deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in its changed name; and
in all such cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) Legal Counsel. The Rights Agent may consult with legal counsel (who may be legal counsel for the Company),
and the opinion of such counsel shall be full and complete authorization and protection to the
Rights Agent as to any action taken or omitted to be taken by it in good faith and in accordance
with such opinion.
(c) Liability for Gross Negligence, etc. The Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or
willful misconduct (as determined by a court of competent jurisdiction).
(d) Statements of Fact or Recitals. The Rights Agent shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Rights Certificates or be required to verify the
same (except as to its countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) Agreement; Adjustments. The Rights Agent shall not be under any liability or responsibility in respect of the
validity of this Agreement or the execution and delivery hereof (except the due execution hereof by
the Rights Agent) or in respect of the validity or execution of any Rights Certificate (except its
countersignature); nor shall it be responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights Certificate; nor shall it be responsible for
any adjustment required under the provisions of Section 11 (Adjustment of Purchase Price;
Number and Kind of Shares or Number of Rights) or Section 13 (Consolidation, Merger or Sale
or Transfer of Assets or Earning Power) or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would require any such
adjustment (except with respect
33
to the exercise of Rights evidenced by Rights Certificates after
actual notice of any such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares of Common Stock or
Preferred Stock to be issued pursuant to this Agreement or any Rights Certificate or as to whether
any shares of Common Stock or Preferred Stock will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) Further Assurances. The Company will perform, execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other acts, instruments and assurances as
may reasonably be required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) Instructions. The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from the Chairman of the Board, the President, any Vice
President, the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of the
Company and to apply to such persons for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered to be taken by it in good faith in
accordance with the instructions of any such person.
(h) Dealing in Rights. The Rights Agent and any stockholder, director, officer or employee of the Rights Agent may
buy, sell or deal in any of the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not Rights Agent under
this Agreement. Nothing herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other legal entity.
(i) Agents; Reasonable Care. The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company or any Person resulting from any such
act, default, neglect or misconduct; provided, however, reasonable care was
exercised in the selection and continued employment thereof.
(j) Expenses; Repayment Assurances. No provision of this Agreement shall require the Rights Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder
or in the exercise of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not reasonably assured
to it.
(k) Exercise of Rights; Consultation with Company. If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate attached to the form of assignment or form of election to purchase, as
the case may be, has either not been completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with respect to such requested
exercise of transfer without first consulting with the Company.
34
Section 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from its duties
under this Agreement upon thirty (30) calendar days’ notice in writing mailed to the Company, and
to each transfer agent of the Common Stock and Preferred Stock, by registered or certified mail,
and to the holders of the Rights Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent upon thirty (30) calendar days’ notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock and Preferred Stock, by registered or certified mail, and to the holders
of the Rights Certificates by first-class mail. If the Rights Agent shall resign or be removed or
shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights
Agent. If the Company shall fail to make such appointment within a period of thirty (30) calendar
days after giving notice of such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate for inspection by
the Company), then the registered holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be (a) a Person organized and doing
business under the laws of the United States or of any State of the United States, in good
standing, which is authorized under such laws to exercise stock transfer or corporate trust powers,
is subject to supervision or examination by federal or state authority and has at the time of its
appointment as Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an
Affiliate of a Person described in clause (a) of this sentence. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Stock
and Preferred Stock, and mail a notice thereof in writing to the registered holders of the Rights
Certificates. Failure to give any notice provided for in this Section 21 (Change of Rights
Agent), or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment of the
successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of the provisions of this Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Rights Certificates evidencing Rights in such form as may
be approved by the Board to reflect any adjustment or change in the Purchase Price and the number
or kind or shares or other securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to shares of Common Stock so issued
or sold pursuant to the exercise of stock options or under any employee plan or arrangement, or
upon the exercise, conversion or exchange of securities hereafter issued by the Company, in either
case outstanding as of the Distribution Date, and (b) may, in any other case, if deemed necessary
or appropriate by the Board, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided, however, that (i) no
such Rights Certificate
35
shall be issued if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material, adverse tax consequences to
the Company or the Person to whom such Rights Certificate would be issued, and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption and Termination.
(a) Redemption. The Company may, at its option, at any time prior to the earlier of (i) the Close of
Business on the tenth day following the Stock Acquisition Date (or, if the Stock Acquisition Date
shall have occurred prior to the Record Date, the Close of Business on the tenth day following the
Record Date) or (ii) the Final Expiration Date, redeem (the date of such redemption being referred
to herein as the “Redemption Date”) all but not less than all of the then outstanding Rights at a
redemption price of $0.001 per Right, as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the “Redemption Price”). Notwithstanding anything contained
in this Agreement to the contrary, the Rights shall not be exercisable after the first occurrence
of a Flip-in Event until such time as the Company’s right of redemption hereunder has expired. The
Company may, at its option, pay the Redemption Price in cash, shares of Common Stock (based on the
Current Market Price of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by Board. The redemption of the Rights by the Board may be made
effective at such time, on such basis and with such conditions as the Board in its sole discretion
may establish.
Section 24. Exchange.
(a) Right to Exchange. The Board may, at its option, at any time and from time to time after the first occurrence
of a Flip-in Event, exchange all or part of the then outstanding and exercisable Rights (other than
Rights which have become void as provided in Section 7(e) (Exercise of Rights; Purchase Price;
Expiration Date of Rights — Termination of Acquiring Person’s Rights)) for shares of
Common Stock at an exchange ratio of one share of
36
Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the “Exchange Ratio”). Notwithstanding the
foregoing, the Board shall not be empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any employee benefit plan of the Company or
any such Subsidiary or any entity holding shares of Common Stock for or pursuant to any such plan),
together with all Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the shares of Common Stock then outstanding. The exchange of the Rights by the Company
pursuant to this Section 24 may be made effective at such time, on such basis and with such
conditions as the Board in its sole discretion may establish.
(b) Effect of Exchange; Procedure. Immediately upon the action of the Board ordering the exchange of any Rights pursuant to
paragraph (a) of this Section 24, evidence of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right to exercise such Rights will terminate
and the only right thereafter of a holder of such Rights shall be to receive that number of shares
of Common Stock equal to the number of such Rights held by such holder multiplied by the Exchange
Ratio. Promptly after the action of the Board ordering the exchange of the Rights, the Company
shall (i) file evidence of such action with the Rights Agent, (ii) give public notice of such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange, and (iii) mail notice of such exchange to
the holders of such Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange will state the method
by which the exchange will be effected and, in the event of any partial exchange, the number of
Rights which will be exchanged. Any partial exchange of Rights shall be effected pro rata
based on the number of Rights (other than Rights which have become void as provided in Section 7(e)
(Exercise of Rights; Purchase Price; Expiration Date of Rights — Termination of
Acquiring Person’s Rights)) held by each holder of Rights. Before effecting an exchange
pursuant to this Section 24, the Board may direct the Company to enter into a Trust Agreement in
such form and with such terms as the Board shall then approve (the “Trust Agreement”). If the Board
so directs, the Company shall enter into the Trust Agreement and shall issue to the trust created
by such agreement (the “Trust”) all or some (as designated by the Board) of the shares of Common
Stock (or other securities) issuable pursuant to the exchange, and all or some (as designated by
the Board) holders of Rights entitled to receive shares pursuant to the exchange shall be entitled
to receive such shares (and any dividends paid or distributions made thereon after the date on
which such shares are deposited in the Trust) only from the trust and solely upon compliance with
the relevant terms and provisions of the Trust Agreement. Prior to effecting an exchange and
registering shares of Common Stock (or other such securities) in any Person’s name, including any
nominee or transferee of a Person, the Company may require (or cause the trustee of the Trust to
require), as a condition thereof, that any holder of Rights provide evidence, including, without
limitation, the identity of the Beneficial Owners thereof and their Affiliates and Associates (or
former Beneficial Owners thereof and their Affiliates and Associates) as the Company shall
reasonably request in order to determine if such Rights are null and void. If any Person shall fail
to comply with such request, the Company shall be entitled conclusively to deem the Rights formerly
held by such Person to be null and void pursuant to Section 7(e)
37
(Exercise of Rights; Purchase
Price; Expiration Date of Rights — Termination of Acquiring Person’s Rights) and not
transferable or exercisable or exchangeable in connection herewith.
(c) Common Stock Equivalents. In any exchange pursuant to this Section 24, the Company, at its option, may substitute
Common Stock Equivalents for Common Stock exchangeable for Rights, at the initial rate of one
Common Stock Equivalent for each share of Common Stock, as appropriately adjusted to reflect
adjustments in the voting rights of the Common Stock pursuant to the Company’s Restated Certificate
of Incorporation, as amended, so that the Common Stock Equivalent delivered in lieu of each share
of Common Stock shall have the same voting rights as one share of Common Stock.
(d) Insufficient Common Stock. In the event that the number of shares of Common Stock which are authorized by the
Company’s Restated Certificate of Incorporation, as amended, but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights is not sufficient to permit any
exchange of such Rights for Common Stock in accordance with this Section 24, the Company may, at
its option, take all such action as may be necessary to authorize additional shares of Common Stock
for issuance upon such exchange.
(e) Fractional Shares. Upon the action of the Company ordering the exchange of any Rights pursuant to paragraph
(a) of this Section 24, the Company shall not be required to issue fractions of shares of Common
Stock or to distribute certificates which evidence fractional shares of Common Stock. In lieu of
such fractional shares, the Company may pay to the registered holders of the
Rights Certificates with regard to which such fractional shares would otherwise be issuable an
amount in cash equal to the same fraction of the current market value of one share of Common Stock.
For purposes of this Section 24, the current market value of one share of Common Stock shall be the
closing price of one share of Common Stock (as determined pursuant to Section 11(d)(i)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights — Current
Market Price)) for the Trading Day immediately prior to the date of exchange pursuant to this
Section 24, and the value of any Common Stock Equivalent shall be deemed to have the same current
market value as the Common Stock on such date.
(a) Preferred
Stock Transactions, etc. In case the Company shall propose, at any time after the Distribution Date, (i) to pay any
dividend payable in stock of any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a regular quarterly cash dividend out of
earnings or retained earnings of the Company); (ii) to offer to the holders of Preferred Stock
rights or warrants to subscribe for or to purchase any additional shares of Preferred Stock or
shares of stock of any class or any other securities, rights or options; (iii) to effect any
reclassification of its Preferred Stock (other than a reclassification involving only the
subdivision of outstanding shares of Preferred Stock); (iv) to effect any consolidation with,
merger into or with, or statutory share exchange or similar transaction with, any other Person
(other than a Subsidiary of the Company in a transaction which complies with Section 11(o)
(Adjustment of Purchase Price; Number and Kind of Shares or Number of Rights —
Restriction against Diminishing Benefits of the Rights)), or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or other
38
transfer), in
one transaction or a series of related transactions, of more than 50% of the assets, cash flow or
earning power of the Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o)); (v) to effect the liquidation, dissolution or winding up of the
Company, or (vi) to declare or pay any dividend on the shares of Common Stock payable in Common
Stock or to effect a subdivision, combination or consolidation of the shares of Common Stock (by
reclassification or otherwise than by payment of dividends in Common Stock), then, in each such
case, the Company shall give to each holder of a Rights Certificate, to the extent feasible and in
accordance with Section 26 (Notices), a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend, distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, statutory share exchange or similar
transaction, sale, transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the shares of Preferred Stock, if any such date is to be
fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii)
above at least twenty (20) calendar days prior to the record date for determining holders of the
shares of Preferred Stock for purposes of such action, and in the case of any such other action, at
least twenty (20) calendar days prior to the date of the taking of such proposed action or the date
of participation therein by the holders of the shares of Preferred Stock, whichever shall be the
earlier.
Section 26. Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or
by the holder of any Rights Certificate to or on the Company shall be sufficiently given or made if
sent by facsimile (with receipt confirmed) or by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent) as follows:
Commercial Metals Company
0000 X. XxxXxxxxx Xxxx.
Xxxxxx, Xxxxx 00000
Attention: General Counsel and Corporate Secretary
Fax: (000) 000-0000
0000 X. XxxXxxxxx Xxxx.
Xxxxxx, Xxxxx 00000
Attention: General Counsel and Corporate Secretary
Fax: (000) 000-0000
39
with a copy to:
Sidley Austin LLP
Xxx Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxx
Xxxx X. Xxxx
Fax: (000) 000-0000
Xxx Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxx
Xxxx X. Xxxx
Fax: (000) 000-0000
Subject to the provisions of Section 21 (Change of Rights Agent), any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if sent by facsimile
(with receipt confirmed) or by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Broadridge Corporate Issuer Solutions, Inc.
00 X. Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: General Manager
Fax: (000) 000-0000
00 X. Xxxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: General Manager
Fax: (000) 000-0000
with a copy to:
Broadridge Financial Solutions, Inc.
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
Attn: General Counsel
Fax: (000) 000-0000
0000 Xxxxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
Attn: General Counsel
Fax: (000) 000-0000
Notices or demands authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Rights Certificate (or, if prior to the Distribution Date, to the holder
of certificates representing shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the time that any Person becomes an Acquiring
Person, the Company may, and the Rights Agent shall, if the Company so directs, supplement or amend
any provision of this Agreement without the approval of any holders of certificates representing
shares of Common Stock or, on and after the Distribution Date, the holders of Rights Certificates.
At any time after any Person becomes an Acquiring Person, the Company and the Rights Agent shall,
if the Company so directs, supplement or amend this Agreement without the approval of any holders
of Rights Certificates; provided, however, that no such supplement or amendment may
(i) adversely affect the interests of the holders of Rights Certificates (other than an Acquiring
Person or an Affiliate or Associate of any such Person) or, prior to the Distribution Date, holders
of certificates representing shares of Common Stock; (ii) cause this Agreement again to become
amendable other than in accordance with this sentence; or
40
(iii) cause the Rights again to become redeemable. Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall execute such supplement or
amendment. Prior to the Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock. Notwithstanding anything in this
Section 27 (Supplements and Amendments) to the contrary, the Rights Agent shall have the right to consent, such consent not to be unreasonably withheld, delayed or conditioned, to the entry into any
supplement or amendment that materially alters the Rights Agent’s obligations or liability under this Agreement.
Section 28. Successors. All the covenants and provisions of this Agreement by or for the benefit
of the Company or the Rights Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall be construed to give to
any Person other than the Company, the Rights Agent and the registered holders of the Rights
Certificates (and, prior to the Distribution Date, registered holders of the Common Stock) any
legal or equitable right, remedy or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date, registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the contrary,
if any such term, provision,
covenant or restriction is held by such court or authority to be invalid, void or
unenforceable and the Board determines in its good faith judgment that severing the invalid
language from this Agreement would adversely affect the purpose or effect of this
41
Agreement, the right of
redemption set forth in Section 23 (Redemption and Termination) shall be reinstated and
shall not expire until the Close of Business on the tenth Business Day following the date of such
determination by the Board.
Section 32. Governing Law; Submission to Jurisdiction. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed in accordance with the laws of
such State applicable to contracts made and to be performed entirely within such State. The
Company and each holder of Rights hereby irrevocably submits to the exclusive jurisdiction of the
Court of Chancery of the State of Delaware, or, if such court shall lack subject matter
jurisdiction, the United States District Court for the District of Delaware, over any suit, action
or proceeding arising out of or relating to this Agreement. The Company and each holder of Rights
acknowledge that the forum designated by this Section 32 has a reasonable relation to this
Agreement and to such Persons’ relationship with one another. The Company and each holder of
Rights hereby waive, to the fullest extent permitted by applicable law, any objection which they
now or hereafter have to personal jurisdiction or to the laying of venue of any such suit, action
or proceeding brought in any court referred to in this Section 32. The Company and each
holder of Rights undertake not to commence any action subject to this Agreement in any forum other
than the forum described in this Section 32. The Company and each holder of Rights agree
that, to the fullest extent permitted by applicable law, a final and non-appealable judgment in any
such suit, action or proceeding brought in any such court shall be conclusive and binding upon such
Persons.
Section 33. Counterparts. This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several Sections of this Agreement
are inserted for convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
42
COMMERCIAL METALS COMPANY |
||||
By: | /s/ Xxxxxx X. XxXxxxx | |||
Name: | Xxxxxx X. XxXxxxx | |||
Title: | Chairman and Chief Executive Officer | |||
BROADRIDGE CORPORATE ISSUER SOLUTIONS, INC. |
||||
By: | /s/ Xxxxxxxx Xxxxxxx | |||
Name: | Xxxxxxxx Xxxxxxx | |||
Title: | VP and Director of Operations |
43
Exhibit 1
FORM OF CERTIFICATE OF DESIGNATIONS
OF
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
OF
COMMERCIAL METALS COMPANY
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
General Corporation Law of the State of Delaware
The undersigned do hereby certify that the following resolution was duly adopted by the Board
of Directors of Commercial Metals Company, a Delaware corporation (the “Corporation”), as
of July 30, 2011:
RESOLVED, that pursuant to the authority vested in the Board of Directors of the Corporation
(the “Board of Directors”) by the Restated Certificate of Incorporation, as amended (the
“Charter”), the Board of Directors does hereby create, authorize and provide for the issue
of a series of Preferred Stock, par value $1.00 per share, of the Corporation, to be designated
“Series B Junior Participating Preferred Stock” (hereinafter referred to as the “Series B
Preferred Stock”), initially consisting of 200,000 shares, and to the extent that the
designations, powers, preferences and relative and other special rights and the qualifications,
limitations or restrictions of the Series B Preferred Stock are not stated and expressed in the
Charter, does hereby fix and herein state and express such designations, powers, preferences and
relative and other special rights and the qualifications, limitations and restrictions thereof, as
follows (all terms used herein that are defined in the Charter shall be deemed to have the meanings
provided therein):
Section 1. Designation and Amount. The shares of such series shall be designated as
“Series B Junior Participating Preferred Stock,” and the number of shares constituting such series
shall be 200,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any shares of any series of
Preferred Stock ranking prior and superior to the shares of Series B Preferred Stock
with respect to dividends, the holders of shares of Series B Preferred Stock shall be entitled
to receive, when, as and if declared by the Board of Directors out of funds legally available for
the purpose, quarterly dividends payable in cash on the last business day of March, June, September
and December in each year (each such date being referred to herein as a “Quarterly Dividend
Payment Date”), commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series B Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share amount of all cash dividends,
plus 1,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions other than a dividend payable in shares of common stock, par value $0.01 per
share, of the Corporation (the “Common Stock”) or a subdivision of the outstanding shares
of Common Stock (by reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a share of Series B
Preferred Stock. In the event the Corporation shall at any time after July 30, 2011 (the
“Rights Declaration Date”) (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each case the amount to which holders of shares of
Series B Preferred Stock were entitled immediately prior to such event under clause (b) of the
preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series B Preferred Stock
as provided in paragraph (A) above immediately after it declares a dividend or distribution on the
Common Stock (other than a dividend payable in shares of Common Stock); provided,
however, that, in the event no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, subject to the prior and superior rights of the holders of any
shares of any series of Preferred Stock ranking prior to and superior to the shares of Series B
Preferred Stock with respect to dividends, a dividend of $1.00 per share on the Series B Preferred
Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series B
Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such
shares of Series B Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly
Dividend Payment Date or is a date after the record date for the determination of holders of shares
of Series B Preferred Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to accrue and be
cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series B Preferred Stock in an amount less than the
total amount of such dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of
shares of Series B Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than sixty (60) days prior to the date fixed
for the payment thereof.
Section 3. Voting Rights.
The holders of shares of Series B Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each share of Series B
Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters submitted to a vote
of the stockholders of the Corporation. In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding Common Stock into a
smaller number of shares, then in each such case the number of votes per share to which holders of
shares of Series B Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the holders of shares of Series B
Preferred Stock and the holders of shares of Common Stock shall vote collectively as one class on
all matters submitted to a vote of stockholders of the Corporation. Except as otherwise provided
herein or as required by law, the holders of shares of Series B Preferred Stock shall not be
entitled to vote as a separate class on any matters submitted to a vote of the stockholders.
(C) (i) If at any time dividends on any Series B Preferred Stock shall be in arrears in an
amount equal to six (6) quarterly dividends thereon, the occurrence of such contingency shall xxxx
the beginning of a period (herein called a “default period”) which shall extend until such
time when all accrued and unpaid dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series B Preferred Stock then outstanding shall
have been declared and paid or set apart for payment. During each default period, all holders of
Preferred Stock (including holders of the Series B Preferred Stock) with dividends in arrears in an
amount equal to six (6) quarterly dividends thereon, voting as a class, irrespective of series,
shall have the right to elect two (2) Directors.
(ii) | During any default period, such voting right of the holders of Series B Preferred Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at any annual meeting of stockholders, and thereafter at annual meetings of stockholders, provided that such voting right shall not be exercised unless the holders of ten percent (10%) in number of shares of Preferred Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Preferred Stock of such voting rights. At any meeting at which the holders of Preferred Stock shall exercise such voting right initially during an existing default period, they shall have the right, voting as a class, to elect Directors to fill such vacancies, if any, in the Board of Directors as may then exist up to two (2) Directors or, if such right is exercised at an annual meeting, to elect two (2) Directors. If the |
number which may be so elected at any special meeting does not amount to the required number, the holders of the Preferred Stock shall have the right to make such increase in the number of Directors as shall be necessary to permit the election by them of the required number. After the holders of the Preferred Stock shall have exercised their right to elect Directors in any default period and during the continuance of such period, the number of Directors shall not be increased or decreased except by vote of the holders of Preferred Stock as herein provided or pursuant to the rights of any equity securities ranking senior to or pari passu with the Series B Preferred Stock. | |||
(iii) | Unless the holders of Preferred Stock shall, during an existing default period, have previously exercised their right to elect Directors, the Board of Directors may order, or any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding, irrespective of series, may request, the calling of special meeting of the holders of Preferred Stock, which meeting shall thereupon be called by the Chairman of the Board, the Chief Executive Officer, the President or any Senior Vice President of the Corporation. Notice of such meeting and of any annual meeting at which holders of Preferred Stock are entitled to vote pursuant to this paragraph (C)(iii) shall be given to each holder of record of Preferred Stock by mailing a copy of such notice to him or her at his or her last address as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier than ten (10) days and not later than fifty (50) days after such order or request, or in default of the calling of such meeting within fifty (50) days after such order or request, such meeting may be called on similar notice by any stockholder or stockholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding. Notwithstanding the provisions of this paragraph (C)(iii), no such special meeting shall be called during the period within fifty (50) days immediately preceding the date fixed for the next annual meeting of the stockholders. | ||
(iv) | In any default period, the holders of Common Stock, and, if applicable, other classes of capital stock of the Corporation, shall continue to be entitled to elect the whole number of Directors until the holders of Preferred Stock shall have exercised their right to elect two (2) Directors voting as a class, after the exercise of which right (x) the Directors so elected by the holders of Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the default period, and (y) any vacancy in the Board of Directors may (except as provided in paragraph (C)(ii) of this Section 3) be filled by vote of a majority of the remaining Directors theretofore elected by the holders of the class of capital stock which elected the Director whose office shall have become vacant. References in this paragraph (C) to Directors elected by the holders of a particular class of stock shall include Directors appointed by such Directors to fill vacancies as provided in clause (y) of the foregoing sentence. |
(v) | Immediately upon the expiration of a default period, (x) the right of the holders of Preferred Stock as a class to elect Directors shall cease, (y) the term of any Directors elected by the holders of Preferred Stock as a class shall terminate, and (z) the number of Directors shall be such number as may be provided for in the Charter or the Corporation’s by-laws irrespective of any increase made pursuant to the provisions of paragraph (C)(ii) of this Section 3 (such number being subject, however, to change thereafter in any manner provided by law or in the Charter or the Corporation’s by-laws). Any vacancies in the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining Directors. |
(D) Except as set forth herein, holders of Series B Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions payable on the Series B
Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued
and unpaid dividends and distributions, whether or not declared, on shares of Series B Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) | declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of capital stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series B Preferred Stock; | ||
(ii) | declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B Preferred Stock, except dividends paid ratably on the Series B Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled; | ||
(iii) | redeem or purchase or otherwise acquire for consideration shares of any capital stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series B Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any capital stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series B Preferred Stock; or | ||
(iv) | purchase or otherwise acquire for consideration any shares of Series B Preferred Stock, or any shares of capital stock ranking on a parity with the Series B Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors, after |
consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes. |
(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 4, purchase or otherwise acquire such shares at
such time and in such manner.
Section 5. Reacquired Shares.
Any shares of Series B Preferred Stock purchased or otherwise acquired by the Corporation in
any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All
such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock
and may be reissued as part of a new series of Preferred Stock to be created by resolution or
resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set
forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of capital stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the Series B Preferred
Stock unless, prior thereto, the holders of shares of Series B Preferred Stock shall have received
$1,000 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment (the “Series B Liquidation
Preference”). Following the payment of the full amount of the Series B Liquidation Preference,
no additional distributions shall be made to the holders of shares of Series B Preferred Stock
unless, prior thereto, the holders of shares of Common Stock shall have received an amount per
share (the “Common Adjustment”) equal to the quotient obtained by dividing (i) the Series B
Liquidation Preference by (ii) 1,000 (as appropriately adjusted as set forth in subparagraph (C)
below to reflect such events as stock splits, stock dividends and recapitalizations with respect to
the Common Stock) (such number in clause (ii), the “Adjustment Number”). Following the
payment of the full amount of the Series B Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series B Preferred Stock and Common Stock, respectively, and
the payment of liquidation preferences of all other shares of capital stock which rank prior to or
on a parity with Series B Preferred Stock, holders of Series B Preferred Stock and holders of
shares of Common Stock shall receive their ratable and proportionate share of the remaining assets
to be distributed in the ratio of the Adjustment Number to 1 with respect to such Preferred Stock
and Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets available to permit payment
in full of the Series B Liquidation Preference and the liquidation preferences of all other series
of Preferred Stock, if any, which rank on a parity with the Series B Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of such parity shares in proportion to
their respective liquidation preferences. In the event, however, that there are not sufficient
assets available to permit payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the Rights Declaration Date (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the Adjustment Number in effect immediately prior to such event
shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 7. Consolidation, Merger, etc.
In case the Corporation shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of Series B Preferred
Stock shall at the same time be similarly exchanged or changed into an amount per share (subject to
the provision for adjustment hereinafter set forth) equal to 1,000 times the aggregate amount of
capital stock, securities, cash and/or any other property (payable in kind), as the case may be,
for which or into which each share of Common Stock is exchanged or changed. In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, then in each such case the
amount set forth in the preceding sentence with respect to the exchange or change of shares of
Series B Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator
of which is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. No Redemption.
The shares of Series B Preferred Stock shall not be redeemable.
Section 9. Ranking.
The Series B Preferred Stock shall rank junior to all other series of the Corporation’s
Preferred Stock as to the payment of dividends and the distribution of assets, whether or not upon
the dissolution, liquidation or winding up of the Corporation, unless the terms of any such series
shall provide otherwise.
Section 10. Amendment.
The Charter shall not be amended in any manner which would materially alter or change the
powers, preferences or special rights of the Series B Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of two-thirds of the outstanding shares of
Series B Preferred Stock, voting separately as a class.
Section 11. Fractional Shares.
Series B Preferred Stock may be issued in fractions of a share which shall entitle
the holder, in proportion to such holder’s fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of all other rights of
holders of Series B Preferred Stock.
* * * * * * *
COMMERCIAL METALS COMPANY |
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By: | ||||
Name: | ||||
Title: |
Exhibit 2
[Form of Rights Certificate]
Certificate No. R____ ______ Rights
NOT EXERCISABLE AFTER THE EARLIER OF AUGUST 1, 2014, OR SUCH DATE AS THE RIGHTS REPRESENTED HEREBY
ARE REDEEMED BY COMMERCIAL METALS COMPANY (THE “CORPORATION”). THE RIGHTS REPRESENTED BY THIS
RIGHTS CERTIFICATE ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE CORPORATION, AT $0.001 PER RIGHT
AND EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT DATED AS OF JULY 30, 2011, BY AND
BETWEEN THE CORPORATION AND BROADRIDGE CORPORATE ISSUER SOLUTIONS, INC., AS RIGHTS AGENT (THE
“RIGHTS AGREEMENT”). UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
(AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY
BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) (EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS —
TERMINATION OF ACQUIRING PERSON’S RIGHTS) OF SUCH AGREEMENT.]1
Rights Certificate
COMMERCIAL METALS COMPANY
COMMERCIAL METALS COMPANY
This certifies that ____________________________, or its, his or her registered assigns, is
the registered owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights Agreement, dated as of July
30, 2011 (the “Rights Agreement”), between Commercial Metals Company, a Delaware corporation (the
“Corporation”), and Broadridge Corporate Issuer Solutions, Inc. (the “Rights Agent”), to purchase
from the Corporation at any time prior to 5:00 P.M. (Dallas, Texas time) on August 1, 2014 at the
office or offices of the Rights Agent designated for such purpose, or its successors as Rights
Agent, one one-thousandth (1/1,000) of a fully paid, nonassessable share of Series B Junior
Participating Preferred Stock (the “Series B Junior Participating Preferred Stock”) of the
Corporation, at a purchase price of $70.00 per one one-thousandth (1/1,000) of a share (the
“Purchase Price”), upon presentation and surrender of this Rights Certificate with the
1 | The portion of the legend in brackets shall be inserted only if applicable and shall replace the preceding sentence. |
Form of Election to Purchase and related Certificate duly executed. The number of Rights
evidenced by this Rights Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price
as of ____________, ____, based on the Series B Junior Participating Preferred Stock as constituted
at such date. The Corporation reserves the right to require prior to the occurrence of a
Triggering Event (as such term is defined in the Rights Agreement) that upon any exercise of
Rights, a number of Rights be exercised so that only whole shares of Series B Junior Participating
Preferred Stock would be issued.
Upon the occurrence of a Flip-in Event (as such term is defined in the Rights Agreement), if
the Rights evidenced by this Rights Certificate are beneficially owned by (i) an Acquiring Person
or an Associate or Affiliate or any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person or its Associate or Affiliate, or (iii)
under certain circumstances specified in the Rights Agreement, a transferee of an Acquiring Person
or its Associate or Affiliate who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such, such Rights shall become null and void and no holder hereof shall have any
right with respect to such Rights from and after the occurrence of such Flip-in Event.
As provided in the Rights Agreement, the Purchase Price and the number and kind of shares of
Series B Junior Participating Preferred Stock or other securities, which may be purchased upon the
exercise of the Rights evidenced by this Rights Certificate are subject to modification and
adjustment upon the happening of certain events, including Triggering Events (as such term is
defined in the Rights Agreement).
This Rights Certificate is subject to all of the terms, provisions and conditions of the
Rights Agreement, which terms, provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Corporation and the holders of the Rights Certificates, which limitations of
rights include the temporary suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the Rights Agreement are on file at the
above-mentioned office of the Rights Agent and are also available upon written request to the
Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon surrender at the
principal office or offices of the Rights Agent designated for such purpose, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of one one-thousandths of a share of
Series B Junior Participating Preferred Stock as the Rights evidenced by the Rights Certificate or
Rights Certificates surrendered shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be entitled to receive upon surrender
hereof another Rights Certificate or Rights Certificates for the number of whole Rights for which
this Rights Certificate is not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
(i) may be redeemed by the Corporation at its option at a redemption price of $0.001 per Right and
(ii) may be exchanged in whole or in part for Preferred Stock, shares of the Corporation’s Common
Stock, par value $0.01 per share, other property or any combination thereof.
In addition, subject to the provisions of the Rights Agreement, at any time and from time to
time after the first occurrence of a Flip-in Event, the Rights may be exchanged, in whole or in
part, for shares of the Common Stock, or shares of Common Stock equivalents of the Corporation
having substantially the same dividend, voting and liquidation rights as shares of Common Stock and
are deemed in good faith by the Board of Directors to have substantially the same value as the
shares of Common Stock. Immediately upon the action of the Board of Directors of the Corporation
authorizing any such exchange, and without any further action or any notice, the Rights (other than
Rights which are not subject to such exchange) will terminate and the Rights will only enable
holders to receive the shares issuable upon such exchange.
No fractional shares of Series B Junior Participating Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are integral multiples
of one one-thousandth (1/1,000) of a share of Series B Junior Participating Preferred Stock, which
may, at the election of the Corporation, be evidenced by depositary receipts), but a cash payment
will be made in lieu thereof, as provided in the Rights Agreement.
No holder of this Rights Certificate shall be entitled to vote, receive dividends or be deemed
for any purpose the holder of shares of Series B Junior Participating Preferred Stock or of any
other securities of the Corporation which may at any time be issuable on the exercise hereof, nor
shall anything contained in the Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the Corporation or any right to vote for the
election of directors or upon any matter submitted to stockholders of the Corporation at any
meeting thereof, or to give or withhold consent to any corporate action or to receive notice of
meetings or other actions affecting stockholders of the Corporation (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by this Rights Certificate shall have been exercised as provided in the Rights
Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until it shall have
been countersigned manually or by facsimile signature by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Corporation and its
corporate seal.
Dated as of _________________
ATTEST: | COMMERCIAL METALS COMPANY | ||||||
By: | By: | ||||||
Secretary | Title: | ||||||
Countersigned: | |||||||
RIGHTS AGENT | |||||||
By: | |||||||
Authorized Signature | |||||||
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED, |
||||
hereby sells, assigns and transfers unto | ||||
this Rights Certificate, together with all right, title and interest therein, and does hereby
irrevocably constitute and appoint ______________ Attorney, to transfer the within Rights
Certificate on the books of the within-named Corporation, with full power of substitution.
Dated:
|
||
Signature |
Signature Guaranteed:
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and transferred by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of an Acquiring
Person (as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated:
|
||
Signature |
Signature Guaranteed:
The signature to the foregoing Assignment and Certificate must correspond to the name as
written upon the face of this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
To: COMMERCIAL METALS COMPANY
The undersigned hereby irrevocably elects to exercise _______________ Rights represented by
this Rights Certificate to purchase the shares of Series B Junior Participating Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the Corporation or of any
other person which may be issuable upon the exercise of the Rights) and requests that certificates
for such shares be issued in the name of and delivered to:
Please insert social security or other identifying number
If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a
new Rights Certificate for the balance of such Rights shall be registered in the name of and
delivered to:
Please insert social security or other identifying number
Dated:
|
||
Signature |
Signature Guaranteed:
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not being acquired or
exercised by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Rights Certificate from any Person who is, was or became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated:
|
||
Signature |
Signature Guaranteed:
The signature to the foregoing Election to Purchase and Certificate must correspond to the
name as written upon the face of this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
Exhibit 3
On July 30, 2011, the Board of Directors (the “Board”) of Commercial Metals Company (the
“Company”) declared a dividend distribution to its stockholders of record at the close of business
on August 11, 2011, of one preferred stock purchase right (a “Right”) for each outstanding share of
Common Stock, par value $0.01 per share (the “Common Stock”), that will entitle the registered
holder to purchase from the Company one one-thousandth (1/1,000) of a share of Series B Junior
Participating Preferred Stock, par value $1.00 (the “Preferred Stock”), at a purchase price of
$70.00 per one one-thousandth (1/1,000) of a share, subject to adjustment. The description and
terms of the Rights are set forth in a Rights Agreement (the “Rights Agreement”) between the
Company and Broadridge Corporate Issuer Solutions, Inc., as Rights Agent (the “Rights Agent”).
Initially capitalized terms used but not defined herein have the meanings set forth in the Rights
Agreement.
Separation and Distribution of Rights; Exercisablility. Initially, the Rights will be
evidenced by the certificates representing shares of Common Stock then outstanding, and no separate
Rights certificates will be distributed. Subject to certain exceptions, the Rights will become
exercisable and trade separately from the Common Stock upon the earlier of:
• | ten (10) business days following a public announcement that a person or group of affiliated or associated persons has acquired, or obtained the right to acquire, beneficial ownership of 10% or more of the shares of Common Stock then outstanding (subject to certain exceptions discussed below and as set forth in the Rights Agreement) (such person is referred to as an “Acquiring Person”); or | ||
• | ten (10) business days (or some later date as determined by the Board in accordance with the Rights Agreement) following the commencement of a tender or exchange offer that would result in a person or group beneficially owning 10% or more of the shares of Common Stock then outstanding (subject to exceptions as set forth in the Rights Agreement). |
The date the Rights separate from the Common Stock is referred to as the “Distribution Date.”
Beneficial ownership generally includes ownership of options, warrants, convertible securities,
stock appreciation rights, swap agreements or other securities, contract rights or derivative
positions, whether or not presently exercisable.
Until the Distribution Date, (i) the Rights will be evidenced by and transferred with, and
only with, the Common Stock certificates, (ii) new Common Stock certificates issued after August
11, 2011 will contain a notation incorporating the Rights Agreement by reference, and (iii) the
surrender for transfer of any certificates for Common Stock outstanding will also constitute the
transfer of the Rights associated with the Common Stock represented by those certificates.
Pursuant to the Rights Agreement, the Company reserves the right to require prior to the occurrence
of a Triggering Event (as hereinafter defined) that, upon any exercise of
Rights, a number of Rights be exercised so that only whole shares of Preferred Stock will be
issued.
The Rights are not exercisable until the Distribution Date and will expire at the close of
business on August 1, 2014, unless earlier redeemed by the Company as described below.
As soon as practicable after the Distribution Date, separate Rights certificates will be
mailed to the holders of record of Common Stock as of the close of business on the Distribution
Date and, after that, the separate Rights certificates will represent the Rights. Except as
otherwise provided in the Rights Agreement, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
Flip-in Event. In the event (a “Flip-in Event”) a person or group becomes an Acquiring
Person, each holder of a Right (other than the Acquiring Person and any associate or affiliate
thereof) will have the right to receive, upon exercise, a number of shares of Common Stock (or, in
some circumstances, cash, property or other securities of the Company) equal to the then current
purchase price of the Right multiplied by the then number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a
Flip-in Event, and dividing that product by 50% of the current market price per share of Common
Stock. If an insufficient number of shares of Common Stock is available for issuance, then the
Board would be required to substitute cash, property or other securities of the Company for the
Common Stock. Notwithstanding the foregoing, following the occurrence of the event described in
this paragraph, all Rights that are, or (under some circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null and void.
For example, at a purchase price of $70.00 per Right, each Right not owned by an Acquiring
Person (or by some related parties or transferees) following an event set forth in the preceding
paragraph would entitle its holder to purchase $140.00 worth of Common Stock (or other
consideration, as noted above) for $70.00.
Flip-over Events. At any time following a public announcement that a person has become an
Acquiring Person, each holder of a Right (except Rights which previously have been voided as set
forth above) will have the right to receive, upon exercise, a number of shares of common stock of
an acquiring company equal to the then current purchase price of the Right multiplied by the then
number of one one-thousandths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the first occurrence of a Flip-over Event (or, if a Flip-in Event has occurred
prior to the first occurrence of a Flip-over Event, multiplied by the then number of one
one-thousandths of a share of Preferred Stock for which a Right was exercisable immediately prior
to the first occurrence of such Flip-in Event), and dividing that product by 50% of the current
market price per share of common stock of the acquiring company if any of the following occur:
• | the Company enters into a merger in which the Company is not the surviving corporation; |
• | the Company is the surviving corporation in a merger pursuant to which all or part of the outstanding shares of Common Stock are changed into or exchanged for stock or other securities of any other person or cash or any other property; or |
• | more than 50% of the combined assets, cash flow or earning power of the Company and its subsidiaries is sold or transferred (in each case other than certain consolidations with, mergers with and into, or sales of assets, cash flow or earning power by or to subsidiaries of the Company as specified in the Rights Agreement). |
The events described in this paragraph are referred to as “Flip-over Events.” Flip-in Events and
Flip-over Events are referred to collectively as “Triggering Events.”
Anti-dilution Adjustments; Fractional Shares. The applicable purchase price payable, the
number of shares of Preferred Stock or other securities or property issuable upon the exercise of
the Rights, and the number of applicable Rights outstanding are subject to adjustment from time to
time to prevent dilution:
• | in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Preferred Stock; | ||
• | if the holders of Preferred Stock are granted certain rights, options or warrants to subscribe for the applicable Preferred Stock or securities convertible into the applicable Preferred Stock at less than the current market price of the applicable Preferred Stock; or | ||
• | upon the distribution to holders of Preferred Stock of evidences of indebtedness, cash (excluding regular quarterly cash dividends), assets (other than dividends payable in Preferred Stock) or subscription rights or warrants (other than those referred to in the bullet point immediately above). |
The number of outstanding Rights are also subject to adjustment in the event of a stock dividend
on, or a subdivision or combination of Common Stock. With some exceptions, no adjustment in the
purchase price relating to a Right will be required until cumulative adjustments amount to at least
one percent (1%) of the purchase price relating to the Right.
No fractional shares of Preferred Stock are required to be issued (other than fractions which
are integral multiples of one one-thousandth (1/1,000) of a share of Preferred Stock) and, in lieu
of the issuance of fractional shares, the Company may make an adjustment in cash based on the
market price of the Preferred Stock on the trading date immediately prior to the date of exercise.
Dividend and Liquidation Rights of the Preferred Stock. Each share of Preferred Stock will be
entitled, when, as and if declared, to a minimum preferential quarterly dividend payment equal to
the greater of $1.00 per share and an aggregate amount of 1,000 times the dividend declared per
share of Common Stock (other than stock dividends payable in Common Stock).
Upon liquidation, the holders of Preferred Stock will be entitled to a minimum preferential
liquidation payment of $1,000 per share (plus any accrued but unpaid dividends). Each share of
Preferred Stock will have 1,000 times the number of votes each share of the Common Stock has on
matters the respective class is entitled to vote on, which will be voted together with Common
Stock. Upon any merger, consolidation or other transaction in which shares of Common Stock are
converted or exchanged, each share of Preferred Stock will be entitled to receive 1,000 times the
amount received per share of Common Stock. These rights are protected by customary antidilution
provisions.
Because of the nature of the dividend, liquidation and voting rights of Preferred Stock, the
value of the one one-thousandth interest in a share of Preferred Stock purchasable upon exercise of
each Right should approximate the value of one share of Common Stock.
Redemption of the Rights. At any time until the tenth day after a person has become an
Acquiring Person, the Company may redeem all, but not less than all, of the Rights at a price of
$0.001 per Right (payable in cash, shares of Common Stock or other consideration deemed appropriate
by the Board and subject to adjustment). Immediately upon the action of the Board ordering
redemption of the Rights, the Rights will terminate and the only right of the holders of these
Rights will be to receive the $0.001 redemption price.
No Rights as Stockholder. Until a Right is exercised, the holder will have no rights as a
stockholder of the Company, including, without limitation, the right to vote or to receive
dividends.
Amendment of the Rights Agreement. Any of the provisions of the Rights Agreement may be
amended by the Board at any time before a person becomes an Acquiring Person. At any time after a
person becomes an Acquiring Person, the provisions of the Rights Agreement may be amended by the
Board only if the amendment does not adversely affect the interest of holders of Rights (excluding
the interest of any Acquiring Person) or cause the Rights to become redeemable again.
Certain Anti-takeover Effects. The Rights may have the effect of rendering more difficult or
discouraging an acquisition of the Company deemed undesirable by the Board. The Rights may cause
substantial dilution to a person or group that attempts to acquire the Company on terms or in a
manner not approved by the Board, except pursuant to an offer conditioned upon the negation,
purchase or redemption of the Rights.
The Rights are not intended to prevent all takeovers of the Company and will not do so.
Since, subject to the restrictions described above, the Company may redeem the Rights prior to
the Distribution Date, the Rights should not interfere with any merger or business combination
approved by the Board.
A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as
an Exhibit to a Registration Statement on Form 8-A filed on _______ __, ___. A copy of the Rights
Agreement is available free of charge from the Rights Agent. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by reference to the Rights
Agreement, which is incorporated herein by reference.