EXHIBIT A
TO RIGHTS AGREEMENT
UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN THE RIGHTS AGREEMENT (AS
REFERRED TO BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS
OR THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND VOID AND
MAY NOT BE TRANSFERRED TO ANY PERSON.
OREGON STEEL XXXXX, INC.
SUMMARY OF RIGHTS TO PURCHASE
PARTICIPATING PREFERRED STOCK
On December 23, 1999, the Board of Directors of Oregon Steel Xxxxx,
Inc. (the "Corporation") declared a dividend distribution of one preferred stock
purchase right (a "Right") for each outstanding share of Common Stock, $0.01 par
value per share (the "Common Stock"), of the Corporation held by stockholders of
record on January 12, 2000 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Corporation one one-thousandth (1/1,000)
of a share of preferred stock of the Corporation, designated as Participating
Preferred Stock (the "Preferred Stock") at a price of $42.00 per one
one-thousandth (1/1,000) of a share (the "Exercise Price"). The description and
terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement"), dated as of December 23, 1999, between the Corporation and
ChaseMellon Shareholder Services, LLC, as Rights Agent (the "Rights Agent").
As discussed below, initially the Rights will not be exercisable,
certificates will not be sent to stockholders and the Rights will automatically
trade with the Common Stock.
The Rights, unless earlier redeemed by the Board of Directors or by the
stockholders pursuant to a Qualifying Offer (as defined below), become
exercisable upon the Close of Business on the day (the "Distribution Date")
which is the earlier of (i) the tenth day following the first date (the "Stock
Acquisition Date") on which there is a public announcement that a person or
group of affiliated or associated persons (an "Acquiring Person"), with certain
exceptions set forth below, has acquired beneficial ownership of 15% or more of
the outstanding voting stock of the Corporation or such earlier or later date
(not beyond the thirtieth day after the Stock Acquisition Date) as the Board of
Directors may determine or (ii) the tenth business day (or such later date as
may be determined by the Board of Directors prior to such time as any person or
group of affiliated or associated persons becomes an Acquiring Person) after the
date of the commencement or announcement of a person's or group's intention to
commence a tender or exchange offer the consummation of which would result in
the ownership of 15% or more of the Corporation's outstanding voting stock (even
if no shares are actually purchased pursuant to
1 - EXHIBIT A
such offer); prior thereto, the Rights will not be exercisable, will not be
represented by a separate certificate, and will not be transferable apart from
the Common Stock, but will instead be evidenced, (i) with respect to any of the
shares of Common Stock held in uncertificated book-entry form (a "Book-Entry")
outstanding as of the Record Date, by such Book-Entry and (ii) with respect to
the shares of Common Stock evidenced by Common Stock certificates outstanding as
of the Record Date, by such Common Stock certificate, together with a copy of
this Summary of Rights. An Acquiring Person does not include (A) the
Corporation, (B) any subsidiary of the Corporation, (C) any employee benefit
plan or employee stock plan of the Corporation or of any subsidiary of the
Corporation, or any trust or other entity organized, appointed, established or
holding Common Stock for or pursuant to the terms of any such plan, (D) any
person or group becomes the beneficial owner of 15% or more of the voting stock
of the Corporation then outstanding as a result of the acquisition of such stock
directly from the Corporation, or (E) any person or group whose ownership of 15%
or more of the shares of voting stock of the Corporation then outstanding solely
by reason of (i) any action or transaction or transactions approved by the Board
of Directors before such person or group became an Acquiring Person or (ii) a
reduction in the number of outstanding shares of voting stock of the Corporation
pursuant to a transaction or transactions approved by the Board of Directors
(provided that any person or group that does not become an Acquiring Person by
reason of clause (i) or (ii) above shall become an Acquiring Person upon
acquisition of an additional 1% or more of the Corporation's voting stock then
outstanding, unless such acquisition of additional voting stock will not result
in such person or group becoming an Acquiring Person by reason of such clause
(i) or (ii). For purposes of the foregoing, outstanding voting stock of the
Corporation includes voting stock that trades on a "when issued" basis on a
national securities exchange or on the National Association of Securities
Dealers, Inc. Automated Quotation System ("NASDAQ").
In the event that (i) the Corporation receives a Qualifying Offer from
any Offeror (as such terms are defined below), and (ii) within 60 days after
such receipt (such sixtieth day being referred to as the "Offer Date"), the
Board of Directors has not either (x) redeemed all but not less than all of the
then outstanding rights or (y) approved an alternative transaction which the
Board of Directors has determined to be financially superior for the holders of
shares of Common Stock other than the Offeror and its affiliates, the Board of
Directors shall call a special meeting of stockholders (the "Special Meeting")
for the purpose of voting on a resolution requesting the Board of Directors to
redeem the Rights or to make the Rights Plan inapplicable to the Qualifying
Offer, as such Qualifying Offer may be amended or revised by the Offeror from
time to time (the "Resolution"). Notwithstanding the foregoing, no Special
Meeting shall be held from and after such time as any Person becomes an
Acquiring Person, and any Special Meeting scheduled prior to such time and not
theretofore held shall be cancelled.
If at the Special Meeting, the Resolution receives the affirmative vote
of a majority of the shares of Common Stock outstanding as of the record date of
the Special Meeting, not including the shares of the Offeror and its Affiliates,
then the Rights Plan shall be inapplicable to the Qualifying Offer or Other
Offer (as defined below), or all of the rights shall be redeemed by such
stockholder action, effective immediately prior to the consummation of the
Qualifying Offer or any Other Offer. An "Other Offer" means another tender or
exchange offer to purchase all of the shares of Common Stock held by Persons
other than such Offeror and its Affiliates at a price per share in cash and/or
at an exchange ratio which is equal to or financially superior to the cash price
and/or the exchange ratio contained in the Resolution approved at the Special
Meeting;
2 - EXHIBIT A
provided, however, that the rights under the Rights Plan shall not be
redeemed at any time from and after such time as any Person becomes an Acquiring
Person.
A "Qualifying Offer" is defined in the Rights Agreement to mean and
all-cash tender offer for all outstanding shares of Common Stock which meets all
of the following requirements:
(a) FULLY FINANCED. The person or group making the tender offer must,
prior to or upon commencing the offer, have provided the Corporation firm
written commitments from responsible financial institutions, accepted by such
person or group, to provide funds for the offer which, when added to the amount
of cash and cash equivalents which such person or group then has available and
has irrevocably committed to be used for the purpose, will be sufficient to pay
for all shares outstanding on a fully diluted basis and all related expenses.
The financing commitments must be subject only to customary terms and
conditions, which may not include (i) conditions requiring access by the
financial institutions to non-public information to be provided by the
Corporation, (ii) conditions based on the accuracy of any information concerning
the Corporation other than such as would be the subject of representations in a
public financing by the Corporation, or (iii) conditions requiring the
Corporation to make any representations, warranties or covenants in connection
with the financing.
(b) TWO-THIRDS REQUIREMENT. The person or group making the tender offer
must own, immediately after consummating the offer, at least two-thirds of the
then outstanding shares of Common Stock.
(c) 35% PREMIUM. The price per share offered in the offer must be at
least the greater of (a) 35% above the average closing price of the Common Stock
for the 20 consecutive trading days ending on the fourth trading day preceding
the commencement of the offer, or (b) the highest price at which the Common
Stock has traded during the period 12 months immediately preceding the offer
date. If another tender offer is commenced during the pendency of a Qualifying
Offer, the competing offer will constitute a Qualifying Offer if the per share
price offered is at least 10% higher than the price offered in the first offer
and the other requirements for a Qualifying Offer are satisfied.
(d) DURATION AND CONDITIONS. The offer must remain open for at least 60
business days and must be extended for at least 20 business days after the last
increase in the price offered and after any bona fide higher alternative offer
is made. The offer must be subject only to customary terms and conditions, which
may in no event include any satisfaction of any conditions relating to the
business, financial condition, results of operations or prospects of the
Corporation other than such as are based on information publicly disclosed by
the Corporation.
(e) SECOND STEP COMMITMENT. The person or group making the tender offer
must irrevocably commit, prior to or upon commencement of the offer, (i) to
consummate promptly upon completion of the offer an all-cash transaction whereby
all shares not tendered in the offer will be acquired at the same price per
share paid pursuant to the offer, and otherwise not to purchase any shares of
Common Stock following completion of the offer, (ii) that such person or group
will not materially amend the terms of the offer (other than an increase in the
price offered), and (iii) that such person or group will not make an offer for
any equity securities of the Corporation for six months after the commencement
of the original offer if the original offer
3 - EXHIBIT A
does not result in the tender of the required minimum of two-thirds of the
outstanding shares, except in certain circumstances involving the making by an
unrelated party of a competing offer which constitutes a Qualifying Offer under
the provisions described in paragraph (c) above.
(f) OTHER CONDITIONS. The offer must (i) not be subject to any
financing, funding or similar condition, nor any condition relating to
completion of or satisfaction with any due diligence or similar investigation
and otherwise provide for usual and customary terms and conditions, (ii) be
accompanied by an opinion from a nationally recognized investment bank that the
price specified in the Qualifying Offer is fair to the stockholders of the
Corporation, which opinion explains with particularity how such investment bank
defines the term "fair" and the basis for its conclusion that the Qualifying
Offer is fair, (iii) request the Corporation to call a special meeting of the
holders of Common Stock for the purpose of voting on a resolution requesting the
Board of Directors to either redeem the Rights or adopt such Qualifying Offer,
and (iv) contain a written agreement of the Offeror to pay (or share with any
other Offeror) the Corporation's costs of the Special Meeting (inclusive of the
Corporation's costs of preparing and mailing proxy material for its own
solicitation but exclusive of the fees and expenses of the Corporation's own
financial and legal advisors, and proxy solicitor).
Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Stock certificates issued after January 12, 2000 will
contain a legend incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), transfer
on the Corporation's registration system of any Common Stock represented by a
Book-Entry or a certificate outstanding as of January 12, 2000, and, in each
case, with or without a copy of this Summary of Rights attached thereto, will
also constitute the transfer of the Rights associated with the Common Stock
represented by such Book-Entry or certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate Rights Certificates
alone will evidence the Rights from and after the Distribution Date.
The Rights are not exercisable until the Distribution Date. Unless
earlier redeemed by the Corporation as described below, the Rights will expire
at the Close of Business on December 22, 2009 (the "Expiration Date") (or, if
the Distribution Date shall have occurred before December 22, 2009, at the Close
of Business on the 90th day following the Distribution Date).
The Preferred Stock is nonredeemable and, unless otherwise provided in
connection with the creation of a subsequent series of preferred stock (i)
subordinate to any other series of the Corporation's preferred stock and (ii)
senior to the Common Stock. The Preferred Stock may not be issued except upon
exercise of Rights. Each share of Preferred Stock will be entitled to receive
when, as and if declared, a quarterly dividend in an amount equal to (i) 1,000
times the cash dividends declared on the Corporation's Common Stock, and (ii) a
preferential cash dividend, if any, in preference to holders of Common Stock in
an amount equal to $.01 per share of Preferred Stock less the per share amount
of all cash dividends declared on the Preferred Stock pursuant to clause (i)
since the immediately preceding quarterly dividend payment date. In addition,
Preferred Stock is entitled to 1,000 times any noncash dividends (other than
dividends payable in equity securities) declared on the Common Stock, in like
kind. In the event of the liquidation of the Corporation, the holders of
Preferred Stock will be entitled to receive, for each
4 - EXHIBIT A
share of Preferred Stock, a payment in an amount equal to the greater of $1.00
per one one-thousandth (1/1,000) of a share plus accrued and unpaid dividends
and distributions thereon or 1000 times the payment made per share of Common
Stock. Each share of Preferred Stock will have 1000 votes, voting together with
the Common Stock. In the event of any merger, consolidation or other transaction
in which Common Stock is exchanged, each share of Preferred Stock will be
entitled to receive 1,000 times the amount received per share of Common Stock.
The rights of Preferred Stock as to dividends, liquidation and voting are
protected by anti-dilution provisions. If the dividends accrued on the Preferred
Stock for four or more quarterly dividend periods, whether consecutive or not,
shall not have been declared and paid or irrevocably set aside for payment, the
holders of record of the Preferred Stock of the Corporation of all series
(including the Preferred Stock) will have the right to elect two members to the
Corporation's Board of Directors.
The number of shares of Preferred Stock issuable upon exercise of the
Rights is subject to certain adjustments from time to time in the event of a
stock dividend on, or a subdivision or combination of, the Common Stock. The
Exercise Price for the Rights is subject to adjustment in the event of
extraordinary distributions of cash or other property to holders of Common
Stock.
Unless the Rights are earlier redeemed, in the event that, after the
time that a Person becomes an Acquiring Person, the Corporation were to be
acquired in a merger or other business combination (in which any shares of
Common Stock are changed into or exchanged for other securities or assets) or
more than 50% of the assets or earning power of the Corporation and its
subsidiaries (taken as a whole) were to be sold or transferred in one or a
series of related transactions, the Rights Agreement provides that proper
provision will be made so that each holder of record, other than the Acquiring
Person, of a Right will from and after such date have the right to receive, upon
payment of the Exercise Price, that number of shares of common stock of the
acquiring company having a market value at the time of such transaction equal to
two times the Exercise Price.
In addition, unless the Rights are earlier redeemed, in the event that
a person or group becomes an Acquiring Person, the Rights Agreement provides
that proper provision will be made so that each holder of record of a Right,
other than the Acquiring Person (whose Rights will thereupon become null and
void), will thereafter have the right to receive, upon payment of the Exercise
Price, that number of one one-thousandth (1/1,000) of a share of Preferred Stock
having a market value at the time of the transaction equal to two times the
Exercise Price (such market value to be determined with reference to the market
value of the Corporation's Common Stock as provided in the Rights Agreement).
At any time after any person or group becomes an Acquiring Person and
prior to the acquisition by such person or group of 50% or more of the
outstanding voting stock, the Board of Directors of the Corporation may exchange
the Rights (other than Rights owned by such person or group which will have
become void), in whole or in part, at an exchange ratio of one share of Common
Stock per Right (subject to adjustment).
Fractions of shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share) may, at the election of the
Corporation, be evidenced by
5 - EXHIBIT A
depositary receipts. The Corporation may also issue cash in lieu of fractional
shares which are not integral multiples of one one-thousandth (1/1,000) of a
share.
At any time on or prior to the Close of Business on the earlier of (i)
the tenth day after the Stock Acquisition Date (or such later date as a majority
of the Board of Directors may determine) or (ii) the Expiration Date, the
Corporation may redeem the Rights in whole, but not in part, at a price of
$0.001 per Right (the "Redemption Price"). Immediately upon the effective time
of the action of the Board of Directors of the Corporation authorizing
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
For as long as the Rights are then redeemable, the Corporation may
amend the Rights in any manner, including an amendment to extend the time period
in which the Rights may be redeemed. At any time when the Rights are not then
redeemable, the Corporation may amend the Rights in any manner that does not
materially adversely affect the interests of holders of the Rights as such.
Until a Right is exercised, the holder, as such, will have no rights as
a stockholder of the Corporation, including, without limitation, the right to
vote or to receive dividends.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to any person or group that attempts to acquire the
Corporation, other than pursuant to a Qualifying Offer, without the approval of
the Corporation's Board of Directors. Because the Corporation's Board of
Directors can redeem the Rights or approve an offer, the Rights should not
interfere with a merger or other business combination approved by the
Corporation's Board of Directors.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Corporation's report on Form 8-K dated
December 23, 1999. A copy of the Rights Agreement is available free of charge
from the Corporation. 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 in this summary description herein by reference.
6 - EXHIBIT A
