STANDSTILL AND GOVERNANCE AGREEMENT between CENTURY ALUMINUM COMPANY AND GLENCORE AG dated as of July 7, 2008
TABLE OF CONTENTS
| Page # | ||||||||
| ARTICLE 1 DEFINITIONS | 3 | |||||||
| SECTION 1.1 | Certain Defined Terms |
3 | ||||||
| SECTION 1.2 | Other Defined Terms |
7 | ||||||
| SECTION 1.3 | Other Definitional Provisions |
7 | ||||||
| SECTION 1.4 | Methodology for Calculations |
7 | ||||||
| ARTICLE 2 STANDSTILL | 8 | |||||||
| SECTION 2.1 | Acquisition of Additional Voting Securities |
8 | ||||||
| SECTION 2.2 | Certain Restrictions |
10 | ||||||
| SECTION 2.3 | Press Releases, etc |
12 | ||||||
| ARTICLE 3 TRANSFER RESTRICTIONS | 12 | |||||||
| SECTION 3.1 | General Transfer Restrictions |
12 | ||||||
| ARTICLE 4 VOTING | 13 | |||||||
| SECTION 4.1 | Voting on Certain Matters |
13 | ||||||
| SECTION 4.2 | Irrevocable Proxy |
13 | ||||||
| SECTION 4.3 | Quorum |
13 | ||||||
| ARTICLE 5 CORPORATE GOVERNANCE | 14 | |||||||
| SECTION 5.1 | Composition of the Board |
14 | ||||||
| ARTICLE 6 MISCELLANEOUS | 14 | |||||||
| SECTION 6.1 | Conflicting Agreements |
14 | ||||||
| SECTION 6.2 | Duration of Agreement |
14 | ||||||
| SECTION 6.3 | Ownership Information |
15 | ||||||
| SECTION 6.4 | Further Assurances |
15 | ||||||
| SECTION 6.5 | Amendment and Waiver |
16 | ||||||
| SECTION 6.6 | Severability |
16 | ||||||
| SECTION 6.7 | Entire Agreement |
16 | ||||||
| SECTION 6.8 | Successors and Assigns |
16 | ||||||
| SECTION 6.9 | Counterparts |
16 | ||||||
| SECTION 6.10 | Remedies |
16 | ||||||
| SECTION 6.11 | Notices |
16 | ||||||
| SECTION 6.12 | Governing Law; Arbitration |
18 | ||||||
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| Page # | ||||||||
| SECTION 6.13 | Legends |
18 | ||||||
| SECTION 6.14 | Interpretation |
19 | ||||||
| SECTION 6.15 | Effectiveness |
19 | ||||||
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STANDSTILL AND GOVERNANCE AGREEMENT dated as of July 7, 2008 between Century Aluminum Company,
a Delaware corporation (the “Company”), and Glencore AG, a Swiss corporation
(“Glencore”).
WHEREAS, the Company and Glencore Investment Pty Ltd (“Glencore Investment”), an affiliate of
Glencore, concurrently herewith are entering into a Stock Purchase Agreement (the “Stock
Purchase Agreement”), pursuant to which the Company will sell, upon the closing thereof (the
“Closing”) to Glencore Investment and Glencore Investment will purchase (the
“Purchase”) newly-issued shares of the Company’s Series A Preferred Stock, par value $0.01
per share (the “Series A Preferred Shares”);
WHEREAS, upon the consummation of the Closing, Glencore will Beneficially Own 11,706,307
shares of the outstanding Company Common Stock which will constitute approximately twenty-eight and
one-half percent (28.5%) of the outstanding Company Common Stock; and
WHEREAS, the parties hereto desire to enter into this Agreement to establish certain
arrangements with respect to the Company Common Stock and other Equity Securities to be
Beneficially Owned by Glencore and its Affiliates following the Closing or upon conversion of the
Series A Preferred Shares, as well as restrictions on certain activities in respect of the Company
Common Stock, corporate governance and other related corporate matters.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and obligations
hereinafter set forth, the parties hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1 Certain Defined Terms. As used herein, the following terms shall have the following meanings:
“Affiliate” means, with respect to any Person, any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by or is under common
control with, such specified Person; provided, however, that solely for purposes of
this Agreement, notwithstanding anything to the contrary set forth herein, neither the Company nor
any of its Subsidiaries shall be deemed to be a Subsidiary or Affiliate of Glencore solely by
virtue of Glencore’s ownership of the Series A Preferred Stock or Common Stock or any other action
taken by Glencore or its Affiliates which is permitted under this Agreement, in each case in
accordance with the terms and conditions of, and subject to the limitations and restrictions set
forth in, this Agreement (and irrespective of the characteristics of the aforesaid relationships
and actions under applicable law or accounting principles).
“Agreement” means this Standstill and Governance Agreement as it may be amended,
supplemented, restated or modified from time to time.
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“Beneficial Ownership” by a Person of any securities means that such Person has or
shares, directly or indirectly, through any contract, arrangement, understanding, relationship or
otherwise, (i) voting power, which means the power to vote, or to direct the voting of, such
security; and/or (ii) investment power, which means the power to dispose, or to direct the
disposition of, such security; and shall otherwise be interpreted in accordance with the term
“beneficial ownership” as defined in Rule 13d-3 adopted by the Commission under the Exchange Act;
provided that for purposes of determining Beneficial Ownership, a Person shall be deemed to
be the Beneficial Owner of any securities which may be acquired by such Person (irrespective of
whether the right to acquire such securities is exercisable’ immediately or only after the passage
of time, including the passage of time in excess of 60 days, the satisfaction of any conditions,
the occurrence of any event or any combination of the foregoing) pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants
or options, or otherwise. For purposes of this Agreement, a Person shall be deemed to Beneficially
Own any securities Beneficially Owned by its Affiliates or any Group of which such Person or any
such Affiliate is a member.
“Board” means the Board of Directors of the Company.
“Business Combination Proposal” means any proposal with respect to a merger,
combination or consolidation in which the Company is a constituent corporation or a sale, lease,
exchange or mortgage of all or substantially all of the assets of the Company and its Subsidiaries
taken as a whole and pursuant to any of which transactions all of the Company Common Stock (other
than those, if any, which are Beneficially Owned by Glencore) would be exchanged for cash,
securities or other property, or a tender or exchange offer for less than all of the outstanding
Company Common Stock not Beneficially Owned by Glencore.
“Business Day” shall mean any day that is not a Saturday, a Sunday or other day on
which banks are required or authorized by law to be closed in San Francisco, California or New
York, New York.
“By-Laws” means the By-Laws of the Company, as amended or supplemented from time to
time.
“Capital Stock” means, with respect to any Person at any time, any and all shares,
interests, participations or other equivalents (however designated, whether voting or non-voting)
of capital stock, partnership interests (whether general or limited) or equivalent ownership
interests in or issued by such Person.
“Certificate of Designation” means the Certificate of Designation for the Series A
Preferred Stock, the form of which is set forth in Exhibit A to the Stock Purchase Agreement, as
amended or supplemented from time to time.
“Change of Control” means (i) any Person becomes the Beneficial Owner of more than 50%
of the total voting power of the outstanding Voting Securities of the Company, (ii) during any
period of two consecutive years, individuals who were either Independent Directors at the beginning
of such period or whose election or nomination for election was approved by at least a majority of
the Directors who were Independent Directors at the beginning of such period or who
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subsequently became Independent Directors and whose election or nomination for election was
approved by at least a majority of Independent Directors, cease for any reason to constitute a
majority of the Independent Directors of the Company then in office, (iii) a merger or
consolidation of the Company with or into another Person or the merger or consolidation of another
Person into the Company, as a result of which transaction or series of related transactions (A) any
Person becomes the Beneficial Owner of more than 50% of the total voting power of all Voting
Securities of the Company (or, if the Company is not the surviving or transferee company of such
transaction or transactions, of such surviving or transferee company) outstanding immediately after
such transaction or transactions, or (B) the shares of Company Common Stock outstanding immediately
prior to such transaction or transactions do not represent a majority of the voting power of all
Voting Securities of the Company (or such surviving or transferee company, if not the Company)
outstanding immediately after such transaction or transactions, (iv) the sale, lease, exchange or
mortgage of all or substantially all of the assets of the Company and its Subsidiaries, or (v) the
approval by the stockholders of the Company of a plan of liquidation or dissolution of the Company.
“Commission” means the United States Securities and Exchange Commission.
“Company Common Stock” means the common stock, par value $0.01 per share, of the
Company and any securities issued in exchange or substitution therefor, including in any
reclassification, recapitalization, merger, consolidation, exchange or other similar
reorganization.
“control” (including the terms “controlled by” and “under common control
with”), with respect to the relationship between or among two or more Persons, means the
possession, directly or indirectly, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities or by contract or any
other means.
“Director” means any member of the Board (other than any advisory, honorary or other
non-voting member of the Board).
“Equity Securities” means any and all shares of Capital Stock of the Company,
securities of the Company convertible into, or exchangeable for, such shares, and options, warrants
or other rights to acquire such shares (regardless of whether such securities, options, warrants or
other rights are then exercisable or convertible).
“Exchange Act” means the Securities Exchange Act of 1934, as amended (or any successor
statute).
“Group” shall have the meaning assigned to it in Section 13(d)(3) of the Exchange Act.
“Independent Director” means (except as set forth in the proviso hereto) any Director
who is not an Affiliate or a past or present officer, director or employee of, and was not
nominated by, Glencore or any of its Affiliates, and is not associated with an entity that performs
substantial services for any of the foregoing; provided that, solely when used with respect
to any action to be taken by the Board relating to a transaction or proposed transaction with, or
otherwise relating to any other holder of 10% or more of the outstanding Company Common Stock (or
10% or more of any other class of Voting Securities of the Company), the term
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Independent Director shall mean any director who is not an Affiliate or a past or present
officer, director or employee of, and was not nominated by, such stockholder (or other
securityholder) or any of its Affiliates, and is not associated with an entity that performs
substantial services for any of the foregoing.
“Independent Investment Banking Firm” means an investment banking firm of nationally
recognized standing that is, in the reasonable judgment of the Person or Persons engaging such
firm, independent of such Person or Persons and qualified to perform the task for which it has been
engaged.
“Ownership Percentage” means, at any time, the ratio, expressed as a percentage, (i)
of the total Equity Securities Beneficially Owned by Glencore and its Affiliates (excluding the
Series A Preferred Shares) to (ii) the sum of (x) the total number of outstanding Company Common
Stock and (y) any Company Common Stock that is issuable upon conversion, exchange or exercise of
any Equity Securities included in clause (i).
“Permitted Ownership Percentage” means, immediately following the Closing and until
April 7, 2009, an Ownership Percentage of twenty-eight and one-half percent (28.5%), and for the
period of time from April 8, 2009 to January 7, 2010, an Ownership Percentage of forty-nine percent
(49%).
“Person” means any individual, corporation, limited liability company, limited or
general partnership, joint venture, association, joint-stock company, trust, unincorporated
organization, other entity, government or any agency or political subdivision thereof or any Group
comprised of two or more of the foregoing.
“Qualifying Rights Plan” means (i) a stockholders’ rights plan which (x) is triggered
upon the acquisition of Beneficial Ownership of the Equity Securities of the Company representing
20% or more of the Voting Securities of the Company and would result in such Beneficial Ownership
being materially and adversely economically diluted on terms substantially consistent with market
practice, (y) does not contain exceptions from the definitions of “Acquiring Person”, “Triggering
Event” or similar terms relating to the class of potential acquirors subject to the rights plan and
the events which would trigger the rights plan, respectively, for any Third Party or its
Affiliates, directors or officers as contemplated by Section 2.1(b) or Section 6.2(ii)(D), and
therefore would be triggered upon acquisition of aggregate Beneficial Ownership of Equity
Securities by such Third Party or its Affiliates, directors or executive officers beyond the
triggering level specified in the stockholders rights plan, and (z) would not be triggered in
connection with any transaction by Glencore or its Affiliates in accordance with Section 2.1(b),
but (ii) only so long as no order restraining, enjoining or otherwise prohibiting adoption or
requiring repeal thereof has been issued (and has not been immediately stayed pending appeal) or
such rights plan has not otherwise been repealed.
“Series A Preferred Stock” means the Series A Convertible Preferred Stock, par value
$0.01 per share, of the Company and any securities issued in exchange or substitution therefor,
including in any reclassification, recapitalization, merger, consolidation, exchange or other
similar reorganization.
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“Subsidiary” means, with respect to any Person, any corporation or other organization,
whether incorporated or unincorporated, of which (x) such Person or any other Subsidiary of such
Person is a general partner (excluding partnerships where the general partnership interests held by
such Person or any Subsidiary of such Person do not have a majority of the voting interests in such
partnership), or (y) at least a majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the board of directors or others performing similar
functions with respect to such corporation or other organization is directly or indirectly
Beneficially Owned by such Person and/or any one or more of its Subsidiaries.
“Transfer” means, directly or indirectly, to sell, transfer, assign or similarly
dispose of or pledge, mortgage or similarly encumber (by operation of law or otherwise), either
voluntarily or involuntarily.
“Voting Securities” means at any time shares of any class of Capital Stock or other
securities of the Company which are then entitled to vote generally in the election of Directors
and not solely upon the occurrence and during the continuation of certain specified events.
SECTION 1.2 Other Defined Terms. The following terms shall have the meanings defined for such terms in the Sections set
forth below:
| Term | Section | |
Acquisition Restrictions
|
Section 2.1(a) | |
Acquisition Restrictions Termination Events
|
Section 2.1(b) | |
Closing
|
Recitals | |
Company
|
Preamble | |
Company Transaction Proposal
|
Section 2.2(a)(ii) | |
Glencore
|
Preamble | |
Notice
|
Section 5.11 | |
Purchase
|
Preamble | |
Series A Preferred Shares
|
Recitals | |
Stock Purchase Agreement
|
Recitals | |
Term
|
Section 5.2 | |
Third Party
|
Section 2.1(b) |
SECTION 1.3 Other Definitional Provisions.
(a) The words “hereof,” “herein” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular provision of this
Agreement, and Article, Section, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally applicable to both the
singular and plural forms of such terms.
SECTION 1.4 Methodology for Calculations. For purposes of calculating the number of outstanding shares of Company Common Stock,
Equity Securities or Voting Securities and the number of shares of Company Common Stock, Equity
Securities or Voting Securities
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Beneficially Owned by Glencore and its Affiliates as of any date,
any Company Common Stock, Equity Securities or Voting Securities held in the Company’s treasury or
belonging to any Subsidiaries of the Company which are not entitled to be voted or counted for
purposes of determining the presence of a quorum pursuant to Section 160(c) of the Delaware General
Corporation Law (or any successor statute) shall be disregarded.
ARTICLE 2
STANDSTILL
SECTION 2.1 Acquisition of Additional Voting Securities.
(a) Except as provided in paragraphs (b) and (c) of this Section 2.1 and Section 2.2(c) below,
for a period ending January 7, 2010, Glencore covenants and agrees with the Company that it shall
not, directly or indirectly, including through any Affiliate, acquire, offer or propose to acquire
or agree to acquire, whether by purchase, tender or exchange offer, through the acquisition of
control of another Person (including by way of merger or consolidation), by joining a partnership,
syndicate or other Group or otherwise, the Beneficial Ownership of any Voting Securities (excluding
any acquisition through conversions of Series A Preferred Stock as permitted by the Certificate of
Designation or by way of stock dividends, stock reclassifications or other distributions or
offerings made available to holders of Company Common Stock generally) that would cause its
Beneficial Ownership of Voting Securities (including any Voting Securities previously acquired
through conversions of Series A Preferred Stock as permitted by the Certificate of Designation or
by way of stock dividends, stock reclassifications or other distributions or offerings made
available to holders of Company Common Stock generally) to exceed the applicable Permitted
Ownership Percentage (the “Acquisition Restrictions”). Notwithstanding the foregoing
provisions of this Section 2.1(a), if during the period from the Closing Date to April 7, 2009,
the Company shall make a widely-distributed public offering of Company Common Stock for cash and
shall determine not to afford to Glencore and its Affiliates the opportunity to purchase shares in
such offering in an amount which would maintain Glencore’s economic interest in the Company to a
level which is at least equal to forty-seven percent (47%) of the entire economic interests in the
Company, then Glencore may purchase in the open market such number of additional shares of Company
Common Stock as shall be sufficient to cause its aggregate economic interest in the Company to be
equal to forty-seven percent (47%); provided that any such additional shares of Company Common
Stock so acquired shall, for the period ending April 7, 2009, be subject to the provisions of
Section 2.1(c); and provided further, that any such shares so acquired shall be included in the
shares to be taken into account in determining Glencore’s compliance with the Permitted Ownership
Percentage requirement in respect of the period from April 8, 2009 to January 7, 2010. As used in
this section, the percentage of Glencore and its Affiliates “economic interests” will be calculated
as the total number of shares of Company Common Stock, plus the total number of shares of Company
Common Stock issuable upon conversion of then outstanding Series A Preferred Stock, in each case
held by them, compared to the total number of outstanding shares of Company Common Stock plus the
shares of Company Common Stock issuable upon conversion of the then outstanding Series A Preferred
Shares.
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(b) The foregoing Acquisition Restrictions will not apply if (i) a third party who is not an
Affiliate of Glencore (a “Third Party,” which term shall include any Group, other than a
Group which includes Glencore or any of its Affiliates as a member), commences a bona fide tender
or exchange offer for more than 50% of the outstanding Company Common Stock and (ii) the Board does
not both (x) recommend against the tender or exchange offer within ten Business Days after the
commencement thereof or such longer or shorter period as shall then be permitted under the
Commission’s rules and (y) within ten Business Days after the commencement thereof adopt (if the
Company does not then have one in effect) a Qualifying Rights Plan and no order restraining,
enjoining or otherwise prohibiting adoption or requiring repeal of such Qualifying Rights Plan is
issued and is not immediately stayed pending appeal and such Qualifying Rights Plan is not
otherwise repealed (the occurrence of both (i) and (ii), an “Acquisition Restrictions Termination
Event”); provided that if the Acquisition Restrictions terminate as a result an Acquisition
Restrictions Termination Event under this Section 2.1(b), Glencore may only acquire shares of
Voting Securities pursuant to (1) a tender or exchange offer in which Glencore offers to acquire
any and all of the outstanding Company Common Stock not Beneficially Owned by Glencore which if
consummated shall be followed by a merger in which any shares of Company Common Stock not tendered
or exchanged would be exchanged for the same consideration per share as offered in such tender or
exchange offer, except that Glencore will not be obligated to consummate any such merger if
holder(s) holding in the aggregate more than one and one half percent (1.5%) of the outstanding
Equity Securities of the Company demand (and do not withdraw or otherwise lose) appraisal rights
under Section 262 of the Delaware General Corporation Law in connection therewith, or (2) a
Business Combination Proposal for the Company so long as (A) such Business Combination Proposal is
made in writing delivered to the Independent Directors and (B) Glencore and its representatives
keep confidential and refrain from disclosing to any other Person (other than its advisors) the
fact that they have made any such Business Combination Proposal or any of the terms thereof until
such Business Combination Proposal is approved by at least a majority of the Independent Directors,
except as may be required by law. If the foregoing tender or exchange offer by a Third Party
referred to in this Section 2.1(b) shall have been terminated, consummated or expired prior to the
time that Glencore makes or announces its intention to make, such a bona fide tender or exchange
offer or a bona fide Business Combination Proposal, then the Acquisition Restrictions shall be
reinstated at the Permitted Ownership Percentage in effect prior to the termination of the
Acquisition Restrictions. Subject to the immediately preceding sentence, if an order is issued
restraining, enjoining or otherwise prohibiting adoption or requiring repeal of any Qualifying
Rights Plan adopted by the Company and is not immediately stayed pending appeal or such Qualifying
Rights Plan is otherwise repealed, an Acquisition Restrictions Termination Event shall have
occurred.
(c) If at any time Glencore or any of its Affiliates become aware that Glencore or any of its
Affiliates has acquired Voting Securities that causes Glencore to Beneficially Own more than the
Permitted Ownership Percentage in violation of this Agreement, then Glencore shall promptly notify
the Company in writing of such acquisition and, while its total Beneficial Ownership of Voting
Securities exceeds the then applicable Permitted Ownership Percentage, Glencore and its Affiliates
may not exercise voting rights in respect of a number of Voting Securities equal to the Voting
Securities so acquired unless otherwise authorized by the Board, in which case such Voting
Securities shall be voted as directed by the Board.
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(d) Any additional Equity Securities acquired by Glencore or any of its Affiliates or any
directors or senior policy-making officers of Glencore International AG and Glencore following the
Closing shall be subject to the restrictions contained in this Agreement as fully as if such Equity
Securities were acquired by Glencore pursuant to the Purchase, it being understood that any Company
Common Stock acquired by any Person who at the time of such acquisition was an officer, director or
employee of the Company or any of its Subsidiaries pursuant to options granted or any other
issuances of shares of Company Common Stock under any Company benefit plan shall not be deemed to
be subject to this Agreement.
SECTION 2.2 Certain Restrictions.
(a) Except as provided below, prior to April 8, 2009, Glencore agrees not to, and to cause
each of its Affiliates and the directors and senior policy-making officers of Glencore
International AG and Glencore not to, directly or indirectly, alone or in concert with others:
(i) initiate, propose or otherwise solicit securityholders of the Company for the
approval of one or more securityholder proposals or induce or attempt to induce any other
Person to initiate any securityholder proposal, or, subject to Glencore’s right to nominate
one director pursuant to Section 5.1(b), seek election to or seek to place a representative
or other Affiliate or nominee on the Board or seek removal of any member of the Board;
(ii) (A) except in the manner and to the extent permitted under Sections 2.1(b) or
2.2(c), propose or seek to effect a merger, consolidation, recapitalization, reorganization,
sale, lease, exchange or other disposition of substantially all assets or other business
combination involving, or a tender or exchange offer for securities of, the Company or any
of its Subsidiaries or any material portion of its or such Subsidiary’s business or assets
or any other type of transaction that would otherwise result in a Change of Control of the
Company or in any increase in the Ownership Percentage beyond the then existing Ownership
Percentage (any such action described in this clause (A), a “Company Transaction
Proposal”) or (B) seek to exercise any control over the management of the Company or the
Board or any of the businesses, operations or policies of the Company (which restriction
shall not apply to the Directors designated by Glencore, in their capacities as Directors,
and shall not prohibit Glencore from engaging in informal meetings or consultations with
members of the Board or management);
(iii) publicly suggest or announce its willingness or desire to engage in a transaction
or group of transactions or have another Person engage in a transaction or group of
transactions that constitute or could reasonably be expected to result in a Company
Transaction Proposal or in an increase in the Ownership Percentage or take any action that
might require the Company to make a public announcement regarding any such Company
Transaction Proposal;
(iv) initiate, request, induce, finance, encourage or attempt to induce or give
encouragement to any other Person to initiate, or otherwise knowingly provide assistance to
any Person who has made or is contemplating making, or enter into discussions or
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negotiations with any other Person with respect to, any proposal constituting or that
can reasonably be expected to result in a Company Transaction Proposal or in an increase in
the Ownership Percentage beyond the Permitted Ownership Percentage;
(v) solicit proxies (or written consents) or assist or participate in any other way,
directly or indirectly, in any solicitation of proxies (or written consents), or otherwise
become a “participant” in a “solicitation” or assist any “participant” in a “solicitation”
(as such terms are defined in Rule 14a-1 of Regulation 14A and Instruction 3 of Item 4 of
Schedule 14A, respectively, under the Exchange Act) in opposition to the recommendation or
proposal of the Board, or recommend or request or induce or attempt to induce any other
Person to take any such actions, or seek to advise, encourage or influence any other Person
with respect to the voting of (or the execution of a written consent in respect of) Voting
Securities;
(vi) except as otherwise expressly required, permitted or contemplated by this
Agreement form, join in or in any other way (including by deposit of Equity Securities)
participate in a partnership, pooling agreement, syndicate, voting trust or other Group with
respect to Equity Securities, or enter into any agreement or arrangement or otherwise act in
concert with any other Person, for the purpose of acquiring, holding, voting or disposing of
Equity Securities;
(vii) take any other actions, alone or in concert with any other Person, to seek to
effect a Change of Control of the Company or an increase in the Ownership Percentage beyond
the Permitted Ownership Percentage or otherwise seek to circumvent any of the limitations
set forth in this Section 2.2;
provided, however, that notwithstanding any provision of this Section 2.2(a) or
elsewhere in this Agreement, Glencore and its Affiliates shall have the right, exercisable in their
sole discretion: (i) to vote any Capital Stock owned by any of them, including in respect of any
Company Transaction Proposal or any other matter contemplated by this Section 2.2(a), except as
otherwise required in Section 4.1(a), and (ii) to tender any of their Capital Stock of the Company
in any tender or exchange offer conducted by any third party or otherwise participate in any such
tender or exchange offer on the terms thereof, or otherwise sell or dispose of any Capital Stock of
the Company.
(b) If any Acquisition Restrictions Termination Event occurs, the restrictions set forth in
paragraphs (i) through (vii) above will not apply to the extent (but only to the extent) necessary
to enable Glencore to make a Business Combination Proposal or other tender or exchange offer
permitted to be made under Section 2.1(b) hereof and subject to the terms and conditions relating
thereto.
(c) During the period commencing on the date hereof and ending January 7, 2010, Glencore or
any of its Affiliates may initiate, propose and consummate Company Transaction Proposals only if
the following conditions, as applicable, are met:
(i) During the period prior to April 8, 2009, Glencore and its Affiliates (A) may make
Company Transaction Proposals only if in writing and delivered to the
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Independent Directors in a manner which does not require public disclosure thereof, or
if a majority of the Independent Directors adopt a resolution inviting Glencore to do so,
and (B) may not consummate any Company Transaction Proposal if the terms of the Company
Transaction Proposal are not approved and recommended by a majority of the Independent
Directors.
(ii) During the period on or after April 8, 2009, Glencore and its Affiliates may not
consummate any Company Transaction Proposal if the terms of the Company Transaction Proposal
are not approved and recommended by a majority of the Independent Directors; it being
understood that the Board will, in good faith, consider any Company Transaction Proposal
submitted by Glencore during this period.
(iii) Glencore and its Affiliates may not submit to the Independent Directors any
Company Transaction Proposal prior to October 7, 2008 and after the initial submission of
any such Company Transaction Proposal which is not accepted by the Independent Directors,
Glencore may thereafter make Company Transaction Proposals no more frequently than once each
calendar quarter (and during the period prior to April 8, 2009, in compliance with Section
2.2(c)(i)).
In connection with any such Company Transaction Proposal, the Independent Directors may retain
an Independent Investment Banking Firm and outside legal counsel, the fees and expenses of which
shall be borne by the Company.
SECTION 2.3 Press Releases, etc. Unless otherwise required by applicable law, Glencore will not, and will not permit any of
its Affiliates to, issue any press release or make any public announcement or other communication
with respect to (x) any of the matters described in Section 2.1(b) (except following occurrence and
during continuation of an Acquisition Restrictions Termination Event) or (y) during the nine-month
period the restrictions in Section 2.2(a) apply, any of the matters described in Section 2.2(a),
without the prior written consent of the Chief Executive Officer of the Company or as authorized by
a resolution adopted by a majority of the Independent Directors.
ARTICLE 3
TRANSFER RESTRICTIONS
SECTION 3.1 General Transfer Restrictions. The right of Glencore and its Affiliates to Transfer any Series A Preferred Shares shall be
subject to the restrictions set forth in the Certificate of Designation.
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ARTICLE 4
VOTING
SECTION 4.1 Voting on Certain Matters.
(a) Prior to April 8, 2009, unless an Acquisition Restrictions Termination Event shall have
occurred and the Acquisition Restrictions have not been reinstated pursuant to the terms of this
Agreement (but only until such time, if any, as the Acquisition Restrictions shall have been
reinstated), Glencore shall, and shall cause each of its Affiliates who Beneficially Owns Voting
Securities to, at any annual or special meeting of securityholders at which members of the Board
are to be elected or in connection with a solicitation of consents through which members of the
Board are to be elected, to the extent it or any of them votes or causes to be voted (or act by
written consent with respect to) any Voting Securities Beneficially Owned by it or by any of them
with respect to such election, such Voting Securities shall be voted (or the written consents with
respect thereto shall be given) in the same proportion as the Voting Securities held by
stockholders of the Company other than Glencore and its Affiliates are voted, except that Glencore
and its Affiliates may vote all of their Voting Securities in favor of the election of the nominee
designated by them pursuant to Section 4.1(c).
(b) Except with respect to any vote or action by written consent for the election of members
of the Board as described in Section 4.1(a) above, Glencore and its Affiliates may, in connection
with any vote or action by written consent of the stockholders of the Company, vote or cause to be
voted (including through proxies granted by them) all Voting Securities Beneficially Owned by any
of them, as they shall elect in their sole discretion.
SECTION 4.2 Irrevocable Proxy. Unless an Acquisition Restrictions Termination Event shall have occurred and the
Acquisition Restrictions have not been reinstated pursuant to the terms of this Agreement, at least
five Business Days prior to any meeting of stockholders where the election of directors will occur,
Glencore shall, and shall cause each of its Affiliates who own Voting Securities to, deliver a duly
executed irrevocable proxy to the Company for the sole purpose of voting any Voting Securities
Beneficially Owned by them, that they are electing to vote in accordance with Section 4.1(a). Such
proxy shall appoint such officers of the Company as the Board shall designate as Glencore’s or such
Affiliates’ (as the case may be) true and lawful proxies and attorneys-in-fact and shall state that
it is irrevocable. Such proxy shall be coupled with an interest.
SECTION 4.3 Quorum. Glencore shall, and shall cause each of its Affiliates who hold Voting Securities to, be
present in person or represented by proxy at all meetings of securityholders of the Company at
which election of directors is to occur to the extent necessary so that all Voting Securities
Beneficially Owned by Glencore and its Affiliates shall be counted as present for the purpose of
determining the presence of a quorum at such meetings.
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ARTICLE 5
CORPORATE GOVERNANCE
SECTION 5.1 Composition of the Board.
(a) Following the Closing, the size of the Board may be increased or decreased as permitted by
the By-Laws and Certificate of Incorporation of the Company as in effect from time to time.
(b) Following the Closing, the Board shall include the Independent Directors, the present
Chief Executive Officer of the Company as long as he is the Chief Executive Officer of the Company
(and thereafter may include any successor to such officer) and the nominee of Glencore pursuant and
subject to the provisions of Section 5.1(c). Each Independent Director shall remain in office
until his or her successor as Independent Director has been duly nominated and elected or appointed
as a Director. Upon the resignation, retirement or other removal from office of any Independent
Director, the remaining Independent Directors shall as promptly as practicable designate and
nominate a new candidate (who must meet the requirements of an Independent Director) to fill such
office subject in each case to the consent of a majority of the Directors on the Nominating
Committee, which (subject to the exercise of their fiduciary duties) shall not be unreasonably
withheld.
(c) Following the Closing, Glencore shall have the right to submit to the Board the name of
one Class I nominee to stand for election to the Board at any Company annual meeting of
stockholders or at any special meeting at which Class I nominees, as the case may be, will stand
for election. With respect to any such annual meeting, Glencore shall provide the Board with
written notice of its nominee, and such other information as may be required by the Company’s
By-Laws or set forth in the Company’s proxy statement for the previous year’s annual meeting, at
least 120 days prior to the date the Company held the previous year’s annual meeting and shall
provide such information as soon as practicable in advance of any special meeting. Glencore’s
nominee shall be included in the Board’s slate, subject to the consent of a majority of the members
of the Board’s nominating committee, which consent shall be subject to the reasonable exercise of
the fiduciary duties of such members. If such consent shall not be given with respect to such
nominee, the Company shall give immediate notice to Glencore so that Glencore may submit another
nominee for consideration.
ARTICLE 6
MISCELLANEOUS
SECTION 6.1 Conflicting Agreements. Each party represents and warrants that it has not granted and is not a party to any proxy,
voting trust or other agreement that is inconsistent with or conflicts with any provision of this
Agreement.
SECTION 6.2 Duration of Agreement. Except as otherwise provided in this Agreement, (i) the rights and obligations of Glencore
and its Affiliates under Article V of this Agreement shall terminate at such time when the
Ownership Percentage shall be less than 10%
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for a period of three continuous months, and (ii) the
rights and obligations of Glencore and its Affiliates under Article II and Article IV of this
Agreement shall terminate at the earliest of the following: (A) the Ownership Percentage shall be
less than 10% for a period of three continuous months, (B) upon the consummation of a transaction
provided for in a Business Combination Proposal, a Company Transaction Proposal made pursuant to
and in accordance with Section 2.1(b), or a tender or exchange offer by Glencore otherwise
permitted under Section 2.1(b), (C) January 7, 2010, and (D) if a Third Party acquires Beneficial
Ownership of Equity Securities representing 20% or more of the outstanding Voting Securities of the
Company and (x) the Board does not, within four Business Days of the public disclosure or written
notice by such Third Party to the Company of such acquisition, adopt (if the Company does not then
have one in effect) a Qualifying Rights Plan, and (y) no order restraining, enjoining or otherwise
prohibiting adoption or requiring repeal of such Qualifying Rights Plan is issued and is not
immediately stayed pending appeal and such Qualifying Rights Plan is not otherwise repealed. If
either party has reason to believe that a Third Party has acquired Beneficial Ownership of Equity
Securities representing 20% or more of the outstanding Voting Securities of the Company, it must
immediately notify the other party, and the parties must expeditiously consult with each other in
good faith for two Business Days as to whether such acquisition has occurred. If the parties agree
that such acquisition has occurred, then clause (ii)(D) of Section 6.2 will apply. If the parties
agree that no such acquisition has occurred, Section 6.2 will not be implicated. If the parties are
unable to agree, and the Company does not adopt a Qualifying Rights Plan within two additional
Business Days (or an order is issued restraining, enjoining or otherwise prohibiting or repealing
any such Qualifying Rights Plan and any such order is not immediately stayed pending appeal, or
such Qualifying Rights Plan is otherwise repealed), then the restriction in Section 2.1(a) shall be
suspended, provided that until the earliest of such time as the Third Party publicly discloses such
acquisition, the Third Party notifies the Company in writing of such acquisition, and the parties
agree that such acquisition has occurred (in which case clause (ii)(D) of Section 6.2 will apply),
General may not exercise voting rights with respect to a number of Voting Securities equal to the
additional Voting Securities (if any) acquired by General as a result of such suspension of Section
2.1(a).
SECTION 6.3 Ownership Information.
(a) For purposes of this Agreement, Glencore, in determining the amount of outstanding Equity
Securities, may rely upon information set forth in the most recent quarterly or annual report, and
any current report subsequent thereto, filed by the Company with the Commission, unless the Company
shall have updated such information by delivery of notice to Glencore.
(b) Upon the reasonable request of the Company, Glencore shall deliver to the Company a
written notice specifying the amount of Equity Securities then Beneficially Owned by Glencore.
SECTION 6.4 Further Assurances. At any time or from time to time after the date hereof, the parties agree to cooperate with
each other, and to execute and deliver any further instruments or documents and to take all such
further action as the other party may reasonably request in order to evidence or effectuate the
consummation of the transactions contemplated hereby and to otherwise carry out the intent of the
parties hereunder.
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SECTION 6.5 Amendment and Waiver. Except as otherwise provided herein, no modification, amendment or waiver of any provision
of this Agreement, and no giving of any consent provided for hereunder, shall be effective against
the a party hereto unless such modification, amendment, waiver or consent is in writing and signed
by such party. The failure of any party to enforce any of the provisions of this Agreement shall
in no way be construed as a waiver of such provisions and shall not affect the right of such party
thereafter to enforce each and every provision of this Agreement in accordance with its terms.
SECTION 6.6 Severability. If any provision of this Agreement shall be declared by any court of competent jurisdiction
to be illegal, void or unenforceable, such declaration shall not affect any other provision of this
Agreement and all such other provisions shall remain in full force and effect.
SECTION 6.7 Entire Agreement. Except as otherwise expressly set forth herein, this Agreement and the Stock Purchase
Agreement, together with the several agreements and other documents and instruments referred to
herein and therein or annexed thereto, embody the complete agreement and understanding among the
parties hereto with respect to the subject matter hereof and supersede and preempt any prior
understandings, agreements or representations by or among the parties, written or oral, that may
have related to the subject matter hereof in any way. Without limiting the generality of the
foregoing, to the extent that any of the terms hereof are inconsistent with the rights or
obligations of Glencore under any other agreement with the Company, the terms of this Agreement
shall govern.
SECTION 6.8 Successors and Assigns. Neither this Agreement nor any of the rights or obligations of any party under this
Agreement shall be assigned, in whole or in part (except by operation of law pursuant to a merger
whose purpose is not to avoid the provisions of this Agreement), by any party without the prior
written consent of the other parties hereto. Subject to the foregoing, this Agreement shall bind
and inure to the benefit of and be enforceable by the parties hereto and their respective
successors and assigns.
SECTION 6.9 Counterparts. This Agreement may be executed in separate counterparts each of which shall be an original
and all of which taken together shall constitute one and the same agreement.
SECTION 6.10 Remedies. All rights, powers and remedies provided under this Agreement or otherwise available in
respect hereof at law or in equity shall be cumulative and not alternative, and the exercise or
beginning of the exercise of any thereof by any party shall not preclude the simultaneous or later
exercise of any other such right, power or remedy by such party.
SECTION 6.11 Notices. Any notice, request, claim, demand or other communication under this Agreement (each a
“Notice”) shall be in writing, shall be either personally delivered, sent by reputable overnight
courier service (charges prepaid), sent by facsimile to the address for such Person set forth below
or such other address as the recipient party has specified by prior written notice to the other
parties hereto and shall be deemed to have been given hereunder on (i) the date of delivery if sent
by messenger, (ii) on the Business Day following the Business Day
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on which delivered to a
recognized courier service if sent by overnight courier or (iii) upon confirmation of receipt, if
sent by fax.
If to the Company:
Office of the General Counsel
0000 Xxxxxx Xxxx
Xxxxxxxx X, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
0000 Xxxxxx Xxxx
Xxxxxxxx X, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Pillsbury Xxxxxxxx Xxxx Xxxxxxx LLP
00 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
00 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Glencore:
Glencore AG
Xxxxxxxxxxxxxxxxx 0
XX-0000 Xxxx, Xxxxxxxxxxx
Attn: Head of Aluminum Department
Telephone: x00-00-000-0000
Facsimile: x00-00-000-0000
Xxxxxxxxxxxxxxxxx 0
XX-0000 Xxxx, Xxxxxxxxxxx
Attn: Head of Aluminum Department
Telephone: x00-00-000-0000
Facsimile: x00-00-000-0000
with a copy to:
Glencore AG
Xxxxxxxxxxxxxxxxx 0
XX-0000 Xxxx, Xxxxxxxxxxx
Attn: Xxxxxxx Xxxxxxxx
Telephone: x00-00-000-0000
Facsimile: x00-00-000-0000
Xxxxxxxxxxxxxxxxx 0
XX-0000 Xxxx, Xxxxxxxxxxx
Attn: Xxxxxxx Xxxxxxxx
Telephone: x00-00-000-0000
Facsimile: x00-00-000-0000
with a copy to
Xxxxxx, Xxxxxx-Xxxxxxx, Colt & Mosle LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxx
Attn: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxx
Attn: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
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SECTION 6.12 Governing Law; Arbitration.
(a) This Agreement, the rights and obligations of the parties under this Agreement and any
claim or controversy directly or indirectly based upon or arising out of this Agreement (whether
based on contract, tort or any other theory), including all matters of construction, validity and
performance, shall in all respects be governed by and interpreted, construed and determined in
accordance with, the laws of the State of New York, without giving effect to any conflict of laws
rules that might lead to the application of the laws of any other jurisdiction.
(b) Any dispute, controversy or claim arising out of or relating to this Agreement, or the
breach thereof, shall be finally settled by binding arbitration in New York, New York administered
by the American Arbitration Association (AAA) under its Commercial Arbitration Rules, (the “AAA
Rules”) and judgment on the award rendered by the arbitrators may be entered in any court
having jurisdiction thereof. The arbitral tribunal shall be composed of three arbitrators,
selected in accordance with the AAA Rules. The language to be used in the arbitral proceedings
shall be in English. All arbitral proceedings conducted pursuant to this Section 6.12(b), all
information disclosed and all documents submitted or issued by or on behalf of any of the disputing
parties or the arbitrators in any such proceedings as well as all decisions and awards made or
declared in the course of any such proceedings shall be kept strictly confidential, except for any
disclosure as may be required by law, and may not be used for any other purpose than these
proceedings nor be disclosed to any third party without the prior written consent of the party to
which the information relates or, as regards to a decision or award, the prior written consent of
all the other disputing parties.
(c) The parties hereto agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that, notwithstanding Section 6.12(b), the parties
shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions hereof in any court having
jurisdiction, this being in addition to any other remedy to which they are entitled at law or
in equity.
SECTION 6.13 Legends.
(a) Any certificate issued representing any Voting Securities Beneficially Owned by Glencore
shall bear the following conspicuous legend:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO VOTING AGREEMENTS AND CERTAIN
OTHER LIMITATIONS SET FORTH IN A CERTAIN STANDSTILL AND GOVERNANCE AGREEMENT DATED AS OF
JULY 7, 2008 BETWEEN CENTURY ALUMINUM COMPANY (THE “COMPANY”) AND GLENCORE AG, AS
THE SAME MAY BE AMENDED FROM TIME TO TIME (THE “AGREEMENT”), COPIES OF WHICH
AGREEMENT ARE ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY. THE SECURITIES EVIDENCED BY
THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON VOTING PROVIDED
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FOR IN THE AGREEMENT AND NO
VOTE OF SUCH SECURITIES THAT CONTRAVENES SUCH AGREEMENT SHALL BE EFFECTIVE.”
(b) Upon any acquisition by Glencore of Beneficial Ownership of additional Voting Securities,
Glencore shall, and shall cause each of its Affiliates to, submit any and all certificates
representing such Voting Securities to the Company so that the legend required by this Section 6.13
may be placed thereon.
(c) Upon the request of Glencore in connection with the sale of any Voting Securities bearing
the legend described in Section 6.13(a) above, the Company shall cause the certificate(s) bearing
such legend to be promptly exchanged for one or more certificate(s) that do not bear such legend.
In addition, promptly after such time as Voting Securities represented by certificates bearing the
legend described in Section 6.13(a) above are no longer subject to this Agreement, upon the request
of Glencore, the Company will cause such certificate or certificates to be promptly exchanged for a
certificate or certificates that do not bear such legends.
SECTION 6.14 Interpretation. The table of contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the
words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be
followed by the words “without limitation.”
SECTION 6.15 Effectiveness. This Agreement shall become effective upon consummation of the purchase of the Series A
Preferred Stock and prior thereto shall be of no force or effect. If the Stock Purchase Agreement
shall be terminated in accordance with its terms without the Purchase having been completed, this
Agreement shall automatically be deemed to have been terminated and shall thereafter be of no force
or effect.
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IN WITNESS WHEREOF, the parties hereto have executed this Standstill and Governance Agreement
as of the date first written above.
| CENTURY ALUMINUM COMPANY |
||||
| By: | /s/ Xxxxxxx X. Bless | |||
| Name: | Xxxxxxx X. Bless | |||
| Title: | Executive Vice President and Chief Financial Officer |
|||
| Glencore AG |
||||
| By: | /s/ Xxxxxx Xxxxx | |||
| Name: | Xxxxxx Xxxxx | |||
| Title: | Officer | |||
| By: | /s/ Xxxxxxx Xxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxx | |||
| Title: | Director | |||
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