RIGHTS AGREEMENT between SCHNITZER STEEL INDUSTRIES, INC. and WELLS FARGO BANK, N.A., Rights Agent Dated as of March 21, 2006
EXHIBIT
4.1
between
SCHNITZER
STEEL INDUSTRIES, INC.
and
▇▇▇▇▇
FARGO BANK, N.A.,
Rights
Agent
Dated
as
of March 21, 2006
| Page | |
|
Section
1. Certain Definitions
|
1
|
|
Section
2. Appointment of Rights Agent
|
6
|
|
Section
3. Issue of Right Certificates
|
7
|
|
Section
4. Form of Right Certificates
|
8
|
|
Section
5. Countersignature and Registration
|
9
|
|
Section
6. Transfer, Split Up, Combination, and Exchange of Right Certificates;
Mutilated, Destroyed, Lost, or Stolen Right Certificates
|
10
|
|
Section
7. Exercise of Rights; Purchase Price; Expiration Date of
Rights
|
10
|
|
Section
8. Cancellation and Destruction of Right Certificates
|
12
|
|
Section
9. Reservation and Availability of Series A Shares;
▇▇▇▇▇▇▇▇▇▇▇▇
|
▇▇
|
|
▇▇▇▇▇▇▇
▇▇. Series A Shares Record Date
|
14
|
|
Section
11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of
Rights
|
14
|
|
Section
12. Certificate of Adjusted Purchase Price or Number of
Shares
|
21
|
|
Section
13. Consolidation, Merger, or Sale or Transfer of Assets or Earning
Power
|
21
|
|
Section
14. Fractional Rights and Fractional Shares
|
24
|
|
Section
15. Rights of Action
|
25
|
|
Section
16. Agreement of Right Holders
|
25
|
|
Section
17. Right Certificate Holder Not Deemed a Shareholder
|
26
|
|
Section
18. Concerning the Rights of Agent
|
26
|
|
Section
19. Merger or Consolidation or Change of Name of Rights
Agent
|
27
|
|
Section
20. Duties of Rights Agent
|
27
|
|
Section
21. Change of Rights Agent
|
29
|
|
Section
22. Issuance of New Rights Certificates
|
30
|
|
Section
23. Redemption and Termination
|
31
|
|
Section
24. Exchange
|
31
|
|
Section
25. Notice of Certain Events
|
32
|
|
Section
26. Notices
|
33
|
|
Section
27. Supplements and Amendments
|
34
|
|
Section
28. Successors
|
34
|
|
Section
29. Determination and Actions by the Board
|
34
|
|
Section
30. Benefits of this Agreement
|
35
|
|
Section
31. Severability
|
35
|
|
Section
32. Governing Law
|
35
|
|
Section
33. Counterparts
|
35
|
|
Section
34. Descriptive Headings
|
35
|
|
Exhibits
|
|
|
A.
|
Form
of Articles of Amendment for Series A Participating Preferred
Stock
|
|
B.
|
Form
of Class A Right Certificate
|
|
C.
|
Form
of Class B Right Certificate
|
|
D.
|
Summary
of Rights to Purchase Series A
Shares
|
This
Rights Agreement, dated as of March 21, 2006 (the “Agreement”),
by
and between Schnitzer Steel Industries, Inc., an Oregon corporation (the
“Company”),
and
▇▇▇▇▇ Fargo Bank, N.A. (the “Rights
Agent”).
The
Board
of Directors of the Company has authorized and declared a dividend of one
preferred share purchase right (a “Class A
Right”)
for
each Class A Common Share (as hereinafter defined) of the Company
outstanding at the close of business on April 4, 2006 (the “Record
Date”)
and
one preferred share purchase right (a “Class B
Right”)
for
each Class B Common Share (as hereinafter defined) of the Company
outstanding at the Record Date (the Class A Rights and Class B Rights
together, the “Rights”),
each
Right representing the right to purchase one one-thousandth of a share of Series
A Participating Preferred Stock, par value $1.00 per share, of the Company
(“Series
A Preferred Stock”)
having
the rights and preferences set forth in the form of Articles of Amendment to
the
Restated Articles of Incorporation of the Company with respect to the Series
A
Preferred Stock, a copy of which is attached hereto as Exhibit A and
incorporated herein. The Board of Directors has further authorized the issuance
of one Class A Right (as such number may hereinafter be adjusted pursuant
to the provisions of Section 11(p) hereof) with respect to each Class A
Common Share and one Class B Right (as such number may hereinafter be
adjusted pursuant to the provisions of Section 11(p) hereof) with respect to
each Class B Common Share that shall become outstanding (whether originally
issued or delivered from the Company’s treasury) after the Record Date and on or
prior to the earliest of the Distribution Date, the Redemption Date, or the
Final Expiration Date.
Accordingly,
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 (as such terms are hereinafter defined)
of
such Person, shall after the date hereof become the Beneficial Owner (as such
term is hereinafter defined) of Common Shares (as such term is hereinafter
defined) representing either (x) 15% or more of the Voting Power or (y) 15%
or
more of the aggregate outstanding Common Shares. Notwithstanding the foregoing,
the following Persons shall not be Acquiring Persons for purposes of this
Agreement:
(i) the
Company, any Subsidiary (as such term is hereinafter defined) of the Company,
any employee benefit plan of the Company or any Subsidiary of the Company,
or
any Person or entity organized, appointed, or established by the Company for
or
pursuant to any such plan;
(ii) the
Schnitzer Steel Industries, Inc. Voting Trust (the “Schnitzer
Voting Trust”),
a
voting trust governed by the Schnitzer Steel Industries, Inc. 2001 Restated
Voting Trust and Buy-Sell Agreement, dated as of March 26, 2001
(the
“Voting
Trust Agreement”),
and
any trustee of the Schnitzer Voting Trust in his or her capacity as such (each,
a “Trustee”);
and
(iii) any
Person (other than the Schnitzer Voting Trust or any Trustee in his or her
capacity as such) that, together with all Affiliates and Associates of such
Person, is, as of the date hereof, the Beneficial Owner of Common Shares
representing either (x) 15% or more of the Voting Power or (y) 15% or more
of
the aggregate outstanding Common Shares (an “Existing
Holder”),
unless and until such time as such Existing Holder, or such Existing Holder’s
Affiliates or Associates, shall, after the date hereof, become the Beneficial
Owner of one or more additional Common Shares of the Company (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding Common Shares in Common Shares or pursuant to a split or subdivision
of the outstanding Common Shares), unless, upon becoming the Beneficial Owner
of
such additional Common Share, such Existing Holder is not then the Beneficial
Owner of Common Shares representing either (x) 15% or more of the Voting Power
or (y) 15% or more of the aggregate outstanding Common Shares.
Notwithstanding
the foregoing, no Person or group shall become an “Acquiring Person” as the
result of either (A) an acquisition of Common Shares by the Company which,
by
reducing the outstanding number or Voting Power of Common Shares, either (x)
increases the Voting Power of the Common Shares Beneficially Owned by such
Person or group to 15% or more of the Voting Power or (y) increases the
percentage Beneficially Owned by such Person or group to 15% or more of the
outstanding Common Shares, (B) the elimination of the special 10:1 voting rights
of the Class B Common Shares in accordance with the Company’s Restated Articles
of Incorporation, as amended from time to time which, by reducing the Voting
Power of the Class B Common Shares increases the Voting Power of the Common
Shares Beneficially Owned by such Person or group to 15% or more of the Voting
Power or (C) pursuant to the exercise of an option to purchase Class B Common
Shares in accordance with Section 2.3 of the Voting Trust Agreement (each of
(A), (B) and (C), an “Excluded
Event”);
provided,
however,
that if
a Person or group shall become the Beneficial Owner of Common Shares
representing either (x) 15% or more of the Voting Power or (y) 15% or more
of
the aggregate outstanding Common Shares by reason of an Excluded Event and
shall, after such Excluded Event, become the Beneficial Owner of one or more
additional Common Shares of the Company (other than pursuant to the exercise
of
any option to purchase Class B Common Shares in accordance with Section 2.3
of
the Voting Trust Agreement), then such Person or group shall be deemed to be
an
“Acquiring Person” unless, upon becoming the Beneficial Owner of such additional
Common Share, such Existing Holder is not then the Beneficial Owner of Common
Shares representing either (x) 15% or more of the Voting Power or (y) 15% or
more of the outstanding Common Shares.
Notwithstanding
the foregoing, if the Board determines that a person who would otherwise be
an
“Acquiring Person,” as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently, and such Person divests as
promptly as practicable a sufficient number of Common Shares so that such Person
would no longer be an “Acquiring Person,” as defined pursuant to the foregoing
provisions of this
paragraph
(a), then such Person shall not be deemed to be an “Acquiring Person” for any
purposes of this Agreement.
(b) “Affiliate”
and
“Associate”
shall
have the respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934, as amended
(the
“Exchange
Act”),
as in
effect on the Record Date.
(c) A
Person
shall be deemed the “Beneficial
Owner”
of
and
shall be deemed to “Beneficially Own” any securities:
(i) which
such Person or any of such Person’s Affiliates or Associates Beneficially Owns,
directly or indirectly;
(ii) which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement, or understanding (whether or not in writing) or upon the exercise
of conversion rights, exchange rights, rights (other than the Rights at any
time
before the occurrence of a Triggering Event (as defined in Section 1(n) below)
but thereafter including Rights acquired from and after the Distribution Date
(as defined in Section 3(a) below) other than Rights acquired pursuant to
Section 3(a), Section 11(i), or Section 22 hereof), warrants, or options, or
otherwise; provided,
however,
that a
Person shall not be deemed to be the Beneficial Owner of, or to Beneficially
Own, securities tendered pursuant to a tender or exchange offer made by or
on
behalf of such Person or any of such Person’s Affiliates or Associates until
such tendered securities are accepted for purchase or exchange, and provided,
further,
that a
person shall not be deemed to be the Beneficial Owner of, or to Beneficially
Own, securities that such Person has the right to acquire (whether such right
is
exercisable immediately or only after the passage of time) upon the exercise
of
conversion rights conferred in any class or series of preferred stock, par
value
$1.00 per share, of the Company issued prior to the Distribution Date (as
defined in Section 3(a) hereof) if the resolutions of the Board (as hereafter
defined) providing for the issuance of such class or series of preferred Stock
shall specifically refer to this Rights Agreement and provide that the right
to
acquire securities upon the exercise of conversion rights so conferred shall
not
be deemed to constitute beneficial ownership of such securities;
(iii) which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to vote or dispose or has “beneficial ownership” (as
determined pursuant to Rule 13d-3 of the General Rules and Regulations under
the
Exchange Act, as in effect on the Record Date) of (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 (iii) 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, (B) is not also then
reportable by such person on Schedule 13D under the Exchange Act (or any
comparable successor report) and (C) does not constitute a trust, proxy, power
of attorney or other device with the purpose or effect of allowing two or more
persons, acting in concert, to avoid being deemed “beneficial owners” of such
security or otherwise avoid the status of “Acquiring Person” under the terms of
this Agreement or as part of a plan or scheme to evade the reporting
requirements under Schedule 13D or Section 13(d) or 13(g) of the Exchange Act;
or
(iv) 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, or with respect to, acquiring,
holding, voting (except pursuant to a revocable proxy as described in the
proviso to subparagraph (iii) of this paragraph (c)), or disposing of any voting
securities of the Company, provided,
however,
that
nothing in this paragraph (c) 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 until the expiration of 40 days after the
date
of such acquisition, and then only if such securities continue to be owned
by
such Person at such expiration of forty days;
provided,
that no
Person (other than the Voting Trust and the Trustees in their capacity as
Trustees) shall be deemed to Beneficially Own or be the Beneficial Owner of
securities solely as a result of such Person being a party to or bound by the
Voting Trust Agreement.
(d) “Board”
means
the Board of Directors of the Company.
(e) “Business
Day”
shall
mean any day other than a Saturday, Sunday, or a day on which banking
institutions in the State of New York, the State of Oregon or the State in
which
the Rights Agent maintains its principal place of business are authorized or
obligated by law or
executive order to close.
(f) “Close
of business”
on
any
given date shall mean 5:00 P.M.,
New
York City time, on such date; provided,
however,
that if
such date is not a Business Day it shall mean 5:00 P.M., New York City time,
on
the next succeeding Business Day.
(g) “Class A
Common Shares”
when
used with reference to the Company shall mean shares of Class A Common
Stock, par value $1.00 per share, of the Company.
(h) “Class B
Common Shares”
when
used with reference to the Company shall mean shares of Class B Common
Stock, par value $1.00 per share, of the Company.
(i) “Common
Shares”
when
used
with reference to the Company shall mean the Class A Common Shares and/or
Class B Common Shares. “Common
Shares”
or“common
shares”
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.
(j) “Person”
shall
mean any individual, firm, corporation, partnership or other entity and shall
include any successor (by merger or otherwise) of such entity.
(k) “Section
11(a)(ii) Event”
shall
mean the event described in Section 11(a)(ii).
(l) “Section
13(a) Event”
shall
mean any event described in clause (x),
(y)
or
(z) of Section 13(a).
(m) “Series
A Shares”
shall
mean shares of Series A Participating Preferred Stock, par value $1.00 per
share, of the Company, including any authorized fraction of a Series A Share,
unless the context otherwise requires.
(n) “Shares
Acquisition Date”
shall
mean the first date of public announcement (including, without limitation,
a
report filed pursuant to Section 13(d) or 14(d) under the Exchange Act) by
the
Company or an Acquiring Person indicating that an Acquiring Person has become
such, or such earlier date as a majority of the Board shall become aware of
the
existence of an Acquiring Person.
(o) “Subsidiary”
shall
mean, with reference to any Person, any corporation of which an amount of voting
securities sufficient to elect at least a majority of the directors of such
corporation is beneficially owned, directly or indirectly, by such Person,
or
otherwise controlled by such Person.
(p) “Triggering
Event”
shall
mean any Section 11(a)(ii) Event or Section 13(a) Event.
(q) “Voting
Power”
shall
mean the total number of votes generally entitled to be cast for the election
of
directors of the Company by the holders of the Common Shares of the Company
then
outstanding.
The
following terms shall have the meanings indicated in the following Sections
of
this Agreement:
(i) “Act”
—
Section
9(c).
(ii) “Adjustment
Shares”
—
Section 11(a)(ii).
(iii) “Agreement”
—
Preamble.
(iv) “Class A
Right”
—
Preamble.
(v) “Class A
Rights Certificate”
—
Section 3(a).
(vi) “Class B
Right”
—
Preamble.
(vii) “Class B
Rights Certificate”
—
Section 3(a).
(viii) “Company”
—
Preamble
and Section 13(a).
(ix) “Current
Value”
—
Section 11(a)(iii).
(x) “Distribution
Date”
—
Section 3(a).
(xi) “equivalent
preference shares”
—
Section 11(b).
(xii) “Exchange
Ratio”
—
Section 24(a).
(xiii) “Existing
Holder”
—
Section 1(a).
(xiv) “Final
Expiration Date”
—
Section 7(a).
(xv) “NASDAQ”
—
Section 11(d)(i).
(xvi) “Principal
Party”
—
Section 13(b).
(xvii) “Purchase
Price”
—
Sections 4(a), 11(a)(ii) and 13(a).
(xviii) “Record
Date”
—
Preamble.
(xix) “Redemption
Date”
—
Section 7(a).
(xx) “Redemption
Price”
—
Section 23(a).
(xxi) “Right”
—
Preamble.
(xxii) “Rights
Agent”
—
Preamble.
(xxiii) “Rights
Certificate”
—
Section 3(a).
(xxiv) “Series
A Preferred Stock”
—
Preamble.
(xxv) “Spread”
—
Section 11(a)(iii).
(xxvi) “Substitution
Period”
—
Section 11(a)(iii).
(xxvii) “Summary
of Rights”
—
Section 3(b).
(xxviii) “Trading
Day”
—
Section 11(d)(i).
Section
2. Appointment
of Rights Agent.
The
Company hereby appoints the Rights Agent to act as agent for the Company and
the
holders of the Rights (who, in accordance
with
Section 3 hereof, shall prior to the Distribution Date also be the holders
of
the Common Shares) in accordance with the terms and conditions hereof, and
the
Rights Agent hereby accepts such appointment and agrees to act as Rights Agent
under this Agreement. The Company may from time to time appoint such co-rights
agents as it may deem necessary or desirable.
Section
3. Issue
of Right Certificates.
(a)
Until
the earlier of (i) the close of business on the tenth day after the Shares
Acquisition Date (or if such tenth day after the Shares 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 may be
determined by the Board) after the date on which 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 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 commenced 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 become 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 Common Shares registered in the names of
the
holders thereof (which certificates shall also be deemed to be certificates
for
Rights) and not by separate certificates, and (y) the right to receive Right
Certificates (as hereinafter defined) will be transferable only in connection
with the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Rights Agent will send, by first-class, insured,
postage-prepaid mail, (i) to each record holder of Class A Common Shares 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 certificates for Class A
Rights, in substantially the form of Exhibit B hereto (the “Class
A Rights
Certificates”),
evidencing one Class A Right for each Class A Common Share so held,
subject to adjustment as provided herein and (ii) to each record holder of
Class B Common Shares 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
certificates for Class B Rights, in substantially the form of Exhibit C
hereto (the “Class B Rights
Certificates”
and
together with the Class A Rights Certificates, the “Rights
Certificates”),
evidencing one Class B Right for each Class B Common Share so held,
subject to adjustment as provided herein. In the event that an adjustment in
the
number of Rights per Common Share has been made pursuant to Section 11(p)
hereof, at the time of distribution of the Right Certificates, the Company
shall
make the necessary and appropriate rounding adjustments (in accordance with
Section 14(a) hereof) so that Right 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
Right Certificates.
(b) As
soon
as practicable following the Record Date, the Company will send a copy of a
Summary of Rights to Purchase Series A Preferred Stock, in substantially the
form attached hereto as Exhibit D (the “Summary
of Rights”),
by
first-class, postage-prepaid mail, to each record holder of Common Shares as
of
the close of business on the Record Date, at the address of such holder shown
on
the records of the Company. With respect to certificates for Common Shares
outstanding as of the Record Date, until the earliest of the Distribution Date,
Redemption Date, or Final Expiration Date, the Rights will be evidenced by
such
certificates registered in the names of the holders thereof and the registered
holders of the Common Shares shall also be the registered holders of the
associated Rights. Until the earliest of the Distribution
Date,
the
Redemption Date, or the Final Expiration Date, the surrender for transfer of
any
certificate for Common Shares outstanding on the Record Date, shall also
constitute the transfer of the Rights associated with such Common
Shares.
(c) Rights
shall be issued in respect of all Common Shares which are issued (whether
originally issued or from the Company’s treasury) after the Record Date but
prior to the earlier of the Distribution Date, Redemption Date or Final
Expiration Date. Certificates for Common Shares issued after the Record Date
but
prior to the earliest of the Distribution Date, the Redemption Date, or the
Final Expiration Date shall have impressed on, printed on, written on, or
otherwise affixed to them the following legend:
This
certificate also evidences and entitles the holder hereof to certain Rights
as
set forth in a Rights Agreement between Schnitzer Steel Industries, Inc. and
▇▇▇▇▇ Fargo Bank, N.A., dated as of March 21, 2006 (the “Rights
Agreement”),
the
terms of which are hereby incorporated herein by reference and a copy of which
is on file at the principal executive offices of Schnitzer Steel Industries,
Inc. and the Rights Agent. 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 or the Rights
Agent, ▇▇▇▇▇ Fargo Bank, N.A., or its successors and assigns, will mail to
the
holder of this certificate a copy of the Rights Agreement without charge
promptly following 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 earlier
of (i) the Distribution Date or (ii) the Final Expiration Date, the Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Shares
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Shares represented by such certificates.
Section
4. Form
of Right Certificates.
(a)
The
Right Certificates (and the forms of election to purchase Series A Shares and
of
assignment to be printed on the reverse thereof) shall be substantially the
same
as Exhibit B and Exhibit C 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 and Section 22 hereof,
the Right Certificates, whenever distributed, shall be dated as
of
the
Record Date and on their face shall entitle the holders thereof to purchase
such
number of one one-thousandths of a share of Series A Participating Preferred
Stock as shall be set forth therein at the price per one one-thousandth of
a
Series A Share set forth therein (the “Purchase
Price”),
but
the amount and kind of the securities purchasable upon the exercise of each
Right and the Purchase Price thereof shall be subject to adjustment as provided
herein.
(b) Any
Right
Certificate issued pursuant to Section 3(a), Section 11(i) or Section 22 hereof
that represents Rights Beneficially Owned by (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or
such Associate or Affiliate) who becomes a transferee before or concurrently
with the Acquiring Person’s becoming such and receives such Rights pursuant to
either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person
with whom the Acquiring Person has any continuing agreement, arrangement, or
understanding regarding the transferred Rights or (B) a transfer which the
Board
has determined is part of a plan, arrangement, or understanding which has,
as a
primary purpose or effect, avoidance of Section 7(e) hereof, and any Right
Certificate issued pursuant to Section 6 or Section 11 hereof upon transfer,
exchange, replacement, or adjustment of any other Right Certificate referred
to
in this sentence, shall contain (to the extent feasible) the following
legend:
The
Rights represented by this Right 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 Right Certificate and the Rights represented hereby may become
void in the circumstances specified in Section 7(e) of such
Agreement.
Section
5. Countersignature
and Registration.
(a)
The
Right Certificates shall be executed on behalf of the Company by its President
or any Vice President, either manually or by facsimile signature, and shall
have
affixed thereto the Company’s seal or a facsimile thereof, attested by the
Secretary or any Assistant Secretary of the Company, or shall bear a facsimile
thereof. The Right Certificates shall not be valid for any purpose unless
countersigned (manually or by facsimile) by the Rights Agent. In case any
officer of the Company who shall have signed any of the Right Certificates
shall
cease to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and issued and delivered
by the Company with the same force and effect as though the person who signed
such Right Certificates had not ceased to be such officer of the Company. Any
Right Certificate may be signed on behalf of the Company by any person who,
at
the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date
of
the execution of this Rights Agreement any such person was not such an
officer.
(b) Following
the Distribution Date, the Rights Agent will keep or cause to be kept, at its
principal offices, books for registration and transfer of the Right Certificates
issued
or
to be
issued hereunder. Such books shall show the names and addresses of the
respective holders of the Right Certificates, the number of Rights evidenced
on
its face by each of the Right Certificates, the certificate number of each
of
the Right Certificates, and the date of each of the Right
Certificates.
Section
6. Transfer,
Split Up, Combination, and Exchange of Right Certificates; Mutilated, Destroyed,
Lost, or Stolen Right Certificates.
(a)
Subject
to the provisions of Sections 4(b), 7(e), and 14 hereof, at any time after
the
close of business on the Distribution Date, and at or prior to the close of
business on the earlier of the Redemption Date or the Final Expiration Date,
any
Right Certificate or Right Certificates (other than Rights Certificates
representing Rights that may have been exchanged pursuant to Section 24 hereof)
may be transferred, split up, combined, or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to purchase
a
like number of Series A Shares (or, following a Triggering Event, Class A
Common Shares, Class B Common Shares, other securities or property, as the
case may be) as the Right Certificate or Right Certificates surrendered then
entitled 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
Right Certificate shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined, or exchanged at the principal office 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 Right Certificate until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Right 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 Sections 4(b),
7(e), 14 and 24 hereof, countersign and deliver to the person entitled thereto
a
Right Certificate or Right 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 Right Certificates.
(b) Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction, or mutilation of a Right Certificate,
and, in case of loss, theft, or destruction, of indemnity or security reasonably
satisfactory to them, and, at the Company’s request, 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 Right Certificate
if
mutilated, the Company will execute and deliver a new Right Certificate of
like
tenor to the Rights Agent for countersignature and delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed, or
mutilated.
Section
7. Exercise
of Rights; Purchase Price; Expiration Date of Rights.
(a)
Subject
to Section 7(e) hereof, the registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability set forth
in
Sections 9(c), 11(a)(iii) and 23(a) hereof) in whole or in part at any time
after the Distribution Date upon surrender of the Right Certificate, with the
form of election to purchase on the reverse side thereof duly executed, to
the
Rights Agent at the principal office of the Rights Agent designated for such
purpose, together with payment of the
Purchase
Price for each one one-thousandth of a Series A Share as to which the Rights
are
exercised, at or prior to the close of business on the earliest of (i) March
21,
2016 (the “Final
Expiration Date”),
or
(ii) the date on which the Rights are redeemed or exchanged as provided in
Sections 23 and 24 hereof (the “Redemption
Date”).
(b) The
Purchase Price for each one one-thousandth of a Series A Share pursuant to
the
exercise of a Right shall initially be One Hundred Ten Dollars ($110.00), shall
be subject to adjustment from time to time as provided in Sections 11 and 13
hereof and shall be payable in lawful money of the United States of America
in
accordance with paragraph (c) below.
(c) Upon
receipt of a Right Certificate representing exercisable Rights, with the form
of
election to purchase duly executed, accompanied by payment of the Purchase
Price
for the Series A Shares (or other shares, securities, or property, as the case
may be) to be purchased and an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in accordance with
Section 9 hereof, in cash, or by certified check or cashier’s check payable to
the order of the Company, the Rights Agent shall, subject to Section 20(k)
hereof, thereupon promptly (i)(A) requisition from any transfer agent of the
Series A Shares (or make available, if the Rights Agent is the transfer agent
for such shares) certificates for the number of Series A Shares to be purchased
(and the Company hereby irrevocably authorizes its transfer agent to comply
with
all such requests), or (B) if the Company shall have elected to deposit the
Series A Shares issuable upon exercise of the Rights hereunder with a depositary
agent, requisition from the depositary agent depositary receipts representing
such number of one one-thousandths of a Series A Share as are to be purchased
(in which case certificates for the Series A Shares represented by such receipts
shall be deposited by the transfer agent with the depositary agent), and the
Company hereby directs the depositary agent to comply with such request, (ii)
when appropriate, requisition from the Company the amount of cash to be paid
in
lieu of issuance of fractional shares in accordance with Section 14 hereof,
(iii) promptly after receipt of such certificates or depositary receipts, cause
the same to be delivered to or, upon the order of the registered holder of
such
Right Certificate, registered in such name or names as may be designated by
such
holder, and (iv) when appropriate, after receipt, promptly deliver such cash
to
or upon the order of the registered holder of such Right Certificate. In the
event that the Company is obligated to issue other securities (including Common
Shares) or assets pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities or assets are available
for
distribution by the Rights Agent, if and when appropriate. The Company reserves
the right to require before the occurrence of a Triggering Event that, upon
any
exercise of Rights, a number of Rights be exercised so that only whole shares
of
Preferred Stock would be issued.
(d) In
case
the registered holder of any Right Certificate shall exercise less than all
the
rights evidenced thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the Rights Agent to
the
registered holder of such Right Certificate or to his duly authorized assigns
subject to the provisions of Section 14 hereof.
(e) Notwithstanding
anything in this Agreement to the contrary, from and after the first occurrence
of a Section 11(a)(ii) Event, any Rights Beneficially Owned by (i) an Acquiring
Person or an Associate or Affiliate of an Acquiring Person, (ii) a transferee
from an
Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person
(or such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or
to
any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
that the Board has determined is part of a plan, arrangement, or understanding
that has, as a primary purpose or effect, the avoidance of this Section 7(e),
shall become null and void without any further action, and any holder of such
Rights shall thereupon have no rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The Company shall
use all reasonable efforts to insure that the provisions of this Section 7(e)
and Section 4(b) hereof are complied with, but shall have no liability to any
holder of Right Certificates or other Person as a result of its failure to
make
any determinations with respect to an Acquiring Person or its Affiliates,
Associates, or transferees hereunder.
(f) Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent nor the
Company shall be obligated to undertake any action with respect to a registered
holder of any Right Certificate upon the occurrence of any purported exercise
as
set forth in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Right Certificate surrendered
for
such exercise, and (ii) 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.
Section
8. Cancellation
and Destruction of Right Certificates.
All
Right Certificates surrendered for the purpose of exercise, transfer, split
up,
combination, or exchange shall, if surrendered to the Company or to 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 Right
Certificates shall be issued in lieu thereof except as expressly permitted
by
any of the provisions of this Rights Agreement. The Company shall deliver to
the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. In accordance with applicable
law and regulation, the Rights Agent shall maintain, in a retrievable database,
electronic records of all cancelled or destroyed rights certificates which
have
been cancelled or destroyed by the Rights Agent. The Rights Agent shall maintain
such electronic records or physical records for the time period required by
applicable law and regulation. Upon written request of the Company, the Rights
Agent shall provide to the Company, copies of such electronic records or
physical records relating to rights certificates cancelled or destroyed by
the
Rights Agent.
Section
9. Reservation
and Availability of Series A Shares; Registration.
(a)
The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued Series A Shares and authorized
and
issued shares of Series A Shares held in its treasury the number of Series
A
Shares that will be sufficient to permit the exercise in full of all outstanding
Rights. Prior to the occurrence of a Triggering Event, the Company shall not
be
obliged to cause to be reserved and kept available out of its authorized and
unissued
Common
Shares or shares of preference stock (other than Series A Shares), any Common
Shares or any shares of preference stock (other than the Series A Shares) to
permit exercise of outstanding Rights.
(b) If
the
Series A Shares issuable upon the exercise of 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) If
then
required by applicable law, the Company shall use its best efforts to (i) file,
as soon as practicable following the earliest date after the first occurrence
of
a Section 11(a)(ii) Event as to which the consideration to be delivered by
the
Company upon exercise of the Rights has been determined pursuant to this
Agreement, or as soon as is required by law following the Distribution Date,
as
the case may be, a registration statement under the Securities Act of 1933
(the
“Act”),
with
respect to the securities purchasable upon exercise of the Rights on an
appropriate form, (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 date of the
expiration of the Rights. If then required by applicable law, 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 90 days after the date set forth in clause (i) 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 or comply with such
state securities or “blue sky” laws. 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. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification 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) The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all Series A Shares (and, following the occurrence
of a
Triggering Event, Common Shares and/or other securities) 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,
issued and fully paid and nonassessable shares.
(e) The
Company covenants and agrees that it 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 Right Certificates or of any Series A Shares
(or
Common Shares 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
that
may be payable in respect of any transfer or delivery of Right Certificates
to a
person other than, or the issuance or delivery of certificates for the Series
A
Shares (or Common Shares and/or other securities, as the case may be) in a
name
other than that of the registered holder of the Right Certificate evidencing
Rights surrendered for
exercise
or to issue or deliver any certificates for Series A Shares (or Common Shares
and/or other securities, as the case may be) upon the exercise of any Rights
until any such tax shall have been paid (any such tax being payable by the
holder of such Right Certificate at the time of surrender) or until it has
been
established to the Company’s satisfaction that no such tax is due.
Section
10. Series
A Shares Record Date.
Each
person in whose name any certificate for Series A Shares (or Common Shares
and/or other securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record
of
the Series A Shares (or Common Shares and/or other securities, as the case
may
be) represented thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made;
provided,
however,
that if
the date of such surrender and payment is a date upon which the Series A Shares
(or Common Shares and/or other securities, as the case may be) transfer books
of
the Company are closed, such person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated, the next
succeeding Business Day on which the Series A Shares (or Common Shares and/or
other securities, as the case may be) transfer books of the Company are open.
Before the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled (in such holder’s capacity as such) to any
rights of a shareholder of the Company with respect to shares for which the
Rights shall be exercisable, including, without limitation, the right to vote
any shares, to receive dividends or other distributions with respect to any
shares or to exercise any preemptive rights with respect to any shares, and
shall not be entitled to receive any notice of any proceedings of the Company,
except as provided herein.
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.
(a) (i)
In
the event the Company shall, at any time after the date of this Agreement,
(A)
declare a dividend on the Series A Shares payable in Series A Shares, (B)
subdivide the outstanding Series A Shares, (C) combine the outstanding Series
A
Shares into a smaller number of Series A Shares, or (D) issue any shares of
its
capital stock in a reclassification of the Series A Shares (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) hereof, the Purchase Price
in
effect at the time of the record date for such dividend or of the effective
date
of such subdivision, combination, or reclassification, and the number and kind
of shares of capital stock issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of capital stock,
which, if such Right had been exercised immediately prior to such date and
at a
time when the Series A Shares 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, combination, or reclassification. If
an
event occurs that requires 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) In
the
event that 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 entity organized, appointed, or established by the Company for or pursuant
to the terms of any such plan), alone or together with its Affiliates and
Associates, shall on or after the date hereof become an Acquiring Person, unless
the event causing such person to become an Acquiring Person is a transaction
set
forth in Section 13(a) hereof, then, in such case, proper provision shall be
made so that each holder of a Right, except as provided below and in Section
7(e) hereof, shall thereafter have a right to receive, upon exercise thereof
at
the then current Purchase Price in accordance with the terms of this Agreement,
in lieu of Series A Shares, and subject to the provisions of Section 11(a)(iii)
below, such number of Class A Common Shares of the Company (if such Right
is a Class A Right) or Class B Common Shares (if such Right is a
Class B Right) as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the then number of one one-thousandths of a
Series A Share for which a Right was exercisable immediately prior to the first
occurrence of an event set forth in this Section 11(a)(ii), and dividing that
product (which product, following such first occurrence, shall be referred
to as
the “Purchase
Price”
for
each Right and for all purposes of this Agreement) by (y) 50% of the current
per
share market price of the Common Shares (determined pursuant to Section 11(d)
hereof), but not less than the par value thereof, on the date of such first
occurrence (such number of shares, being referred to herein as the “Adjustment
Shares”).
(iii) In
the
event that the total of the Common Shares that are issued but not outstanding
and authorized but unissued (excluding Common Shares reserved for issuance
pursuant to the specific terms of any indenture, option plan, or other
agreement) is not sufficient to permit the exercise in full of the Rights in
accordance with Section 11(a)(ii) hereof, then the Board shall: (A) determine
the excess of (1) the value of the Adjustment Shares issuable upon the exercise
of a Right under Section 11(a)(ii)) hereof (the “Current
Value”)
over
(2) the Purchase Price (such excess, the “Spread”),
and
(B) with respect to each Right (subject to Section 7(e) hereof), make adequate
provision to substitute for, or provide an election to acquire in lieu of,
the
Adjustment Shares, upon payment of the applicable Purchase Price (as such price
may thereafter be reduced pursuant to this Section 11(a)(iii), as set forth
below) any combination of the following having an aggregate value equal to
the
Current Value (such aggregate value to be determined by the Board based upon
the
advice of a nationally-recognized investment banking firm selected by the
Board): (1) common stock, preferred stock, notes, and/or other securities of
one
or more Subsidiaries of the Company, (2) a reduction in the current Purchase
Price, (3) Common Shares, preferred shares and/or other equity securities of
the
Company, and/or (4) debt securities, cash, and/or other assets of the Company;
provided,
however,
if this
Section 11(a)(iii) is applicable and the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within 30 days following
the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y)
the
date on which the Company’s right of redemption pursuant to Section 23(a)
expires, then the Company shall be obligated to deliver, upon the surrender
for
exercise
of
a
Right and without requiring payment of the Purchase Price, Class A Common
Shares and/or Class B Common Shares, as applicable (in each case, to the
extent available), and then, if necessary, cash in an aggregate amount equal
to
the Spread. If the Board shall determine in good faith that it is likely that
sufficient additional Common Shares could be authorized for issuance upon
exercise in full of the Rights, the 30-day period set forth above may be
extended to the extent necessary, but not more than 90 days following the first
occurrence of a Section 11(a)(ii) Event, in order that the Company may seek
shareholder approval for the authorization of such additional shares (such
period, as it may be extended, 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) hereof, 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 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 Common Shares shall be the current per share market price (as
determined pursuant to Section 11(d) hereof) of the Common Shares on the date
of
the first occurrence of a Section 11(a)(ii) Event. The provisions of this
Section 11(a)(iii) shall apply only to Class A Common Shares and
Class B Common Shares of the Company and shall not apply to the securities
of any other Person.
(b) In
case
the Company shall fix a record date for the issuance of rights, options, or
warrants to all holders of Series A Shares entitling them (for a period expiring
within 45 calendar days after such record date) to subscribe for or purchase
Series A Shares (or shares having the same rights, privileges, and preferences
as the Series A Shares (“equivalent
preference shares”))
or
securities convertible into Series A Shares or equivalent preference shares
at a
price per Series A Share or equivalent preference share (or having a conversion
price per share, if a security convertible into Series A Shares or equivalent
preference shares) less than the current per share market price of the Series
A
Shares (as defined in Section 11(d) hereof) 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 Series A Shares
outstanding on such record date plus the number of Series A Shares which the
aggregate offering price of the total number of Series A Shares and/or
equivalent preference shares 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
Series A Shares outstanding on such record date plus the number of additional
Series A Shares and/or equivalent preference shares 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
in a consideration part or all of which shall 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 holders of the Rights. Series A Shares 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 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.
(c) In
case
the Company shall fix a record date for the distribution to all holders of
the
Series A Shares (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing corporation)
of
any debt securities, cash, or assets (other than a regular periodic cash
dividend or a dividend payable in Series A Shares) or subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), 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 current per share market price
of
the Series A Shares (as defined in Section 11(d) hereof) on such record date,
less the fair market value (as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent
and
binding on the holders of Rights) of the portion of the cash, assets, or debt
securities so to be distributed or of such subscription rights or warrants
applicable to one Series A Share and the denominator of which shall be such
current per share market price of the Series A Shares (as determined pursuant
to
Section 11(d) hereof). Such adjustments shall be made successively whenever
such
a record date is fixed; and in the event that such distribution is not so made,
the Purchase Price shall again be adjusted to be the Purchase Price that would
then be in effect if such record date had not been fixed.
(d) (i)
For the
purpose of any computation hereunder, other than computations made pursuant
to
Section 11(a)(iii) hereof, the “current per share market price” of the Common
Shares on any date shall be deemed to be the average of the daily closing prices
per Class A Common Share for the 30 consecutive Trading Days immediately
prior to such date, and for purposes of computations made pursuant to Section
11(a)(iii) hereof, the “current per share market price” of a Common Share on any
date shall be deemed to be the average of the daily closing prices per
Class A Common Share for the ten (10) consecutive Trading Days immediately
following such date; provided,
however,
that in
the event that the current per share market price of the Common Shares is
determined during a period following the announcement by the issuer of such
Common Shares of a dividend or distribution on such Common Shares payable in
such Common Shares or securities convertible into such Common Shares (other
than
the Rights), or any subdivision, combination, or reclassification of such Common
Shares, and prior to the expiration of the requisite 30 Trading Day or 10
Trading Day period after the ex-dividend date for such dividend or distribution
or the record date for such subdivision, combination, or reclassification,
then,
and in each such case, the “current per share market price” shall be
appropriately adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such 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 on the principal
national securities exchange, if any, on which the Class A Common Shares
are then listed or admitted to trading or, if the Class A
Common
Shares 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
National Association of Securities Dealers, Inc., Automated Quotations System
(“NASDAQ”)
or
such other system then in use, or, if on any such date the Class A Common
Shares 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 Class A Common Shares selected by the Board. If on any such date no
market maker is making a market in Class A Common Shares, 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
Class A Common Shares are listed or admitted to trading is open for the
transaction of business or, if the Class A Common Shares are not listed or
admitted to trading on any national securities exchange, a Business Day. If
the
Class A Common Shares are not publicly held or not so listed or traded,
“current per share market price” 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 per share market price” of
the Series A Shares shall be determined in the same manner as set forth above
for Common Shares in clause (i) of this Section 11(d). If the current per share
market price of the Series A Shares cannot be determined in the manner provided
above, the “current per share market price” of the Series A Shares shall be
conclusively deemed to be the current per share market price of the Common
Shares, multiplied by one thousand (appropriately adjusted to reflect any stock
split, stock dividend, or similar transaction occurring after the date hereof).
If neither the Common Shares nor the Series A Shares are publicly held or so
listed or traded, “current per share market price” 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 binding on the holders
of Rights.
(e) No
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent in the Purchase Price;
provided,
however,
that
any adjustments which by reason of this Section 11(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or the nearest ten-thousandth of a Common Share or other share or
one-millionth of a Series A Share, as the case may be. Notwithstanding the
first
sentence of this Section 11(e), any adjustment provided for in this Section
11
shall be made no later than the earlier of (i) three years from the date of
the
transaction which requires such adjustment or (ii) the date of the expiration
of
the right to exercise any Rights.
(f) If,
as a
result of an adjustment made pursuant to Section 11(a)(ii) or Section 13(a)
hereof, the holder of any Right thereafter exercised shall become entitled
to
receive any property, other securities (other than shares of capital stock
of
the Company), or shares of capital stock of the Company other than Series A
Shares, thereafter the amount of such property, other securities (other than
shares of capital stock of the
Company)
and the number of such other shares of capital stock so receivable upon exercise
of any Right (as well as any consideration to be paid therefor), shall be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Series A Shares
(and the Purchase Price) contained in this Section 11, and the provisions of
Sections 7, 9, 10, 13, and 14 with respect to the Series A Shares shall apply
on
like terms to any such property, other securities and other shares of capital
stock.
(g) All
Rights originally issued by the Company subsequent to any adjustment made to
the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted
Purchase Price, the number of Series A Shares purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless
the Company shall have exercised its election as provided in Section 11(i)
hereof, upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c) hereof, 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 Series A Share (calculated to the nearest one one-millionth
of a Series A Share) 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 the Purchase Price and (ii) dividing the product so obtained
by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The
Company may elect on or after the date of any adjustment of the Purchase Price
to adjust the number of Rights, in substitution for any adjustment in the number
of Series A Shares purchasable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be exercisable
for the number of one one-thousandths of a Series A Share for which a Right
was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become the number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing
the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to adjust
the number of Rights, indicating the record date for the adjustment, and, if
known at the time, the amount of the adjustment to be made. This record date
may
be the date on which the Purchase Price is adjusted or any day thereafter,
but,
if the Right Certificates have been issued, shall be at least 10 days later
than
the date of the public announcement. If Right Certificates have been issued,
upon each adjustment of the number of Rights pursuant to this Section 11(i),
the
Company shall, as promptly as practicable, cause to be distributed to holders
of
record of Right Certificates on such record date Right Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date
of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such
adjustment.
Right Certificates so to be distributed shall be issued, executed, and
countersigned in the manner provided for herein (and may bear at the option
of
the Company, the adjusted Purchase Price) and shall be registered in the names
of the holders of record of Right Certificates on the record date specified
in
the public announcement.
(j) Irrespective
of any adjustment or change in the Purchase Price or the number of Series A
Shares issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase Price
per
one one-thousandth of a share and the number of shares which were expressed
in
the initial Right Certificates issued hereunder.
(k) Before
taking any action that would cause an adjustment reducing the Purchase Price
below one one-thousandth of the then stated value, if any, of the Series A
Shares issuable upon exercise of the Rights, the Company shall take any
corporate action that may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue fully paid and nonassessable
Series A Shares at such adjusted Purchase Price.
(l) In
any
case in which this Section 11 requires that an adjustment in the Purchase Price
be made effective as of a record date for a specified event, the Company may
elect to defer until the occurrence of such event the issuing to the holder
of
any Right exercised after such record date of the Series A Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the Series A Shares and other capital stock or securities of
the
Company, if any, issuable upon such exercise on the basis of the Purchase Price
in effect prior to such adjustment; provided,
however,
that
the Company shall deliver to such holder a due ▇▇▇▇ or other appropriate
instrument evidencing such holder’s right to receive such additional shares upon
the occurrence of the event requiring such adjustment.
(m) Anything
in this Section 11 to the contrary notwithstanding, the Company shall be
entitled to make such reductions in the Purchase Price, in addition to those
adjustments expressly required or permitted by this Section 11, as and to the
extent that in its good faith judgment the Board shall determine to be advisable
in order that any (i) consolidation or subdivision of the Series A Shares,
(ii)
issuance wholly for cash of any of the Series A Shares at less than the current
market price, (iii) issuance wholly for cash of Series A Shares or securities
which by their terms are convertible into or exchangeable for Series A Shares,
(iv) dividends on Series A Shares payable in Series A Shares or (v) issuance
of
rights, options, or warrants referred to in this Section 11, hereafter made
by
the Company to holders of its Series A Shares shall not be taxable to such
shareholders.
(n) The
Company covenants and agrees that it shall not, at any time after the
Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary
of
the Company in a transaction that complies with Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one or
more
transactions, assets or earning power aggregating more than 50% of the assets
or
earning power of the Company and its Subsidiaries (taken as a
whole)
to
any other Person (other than the Company and/or any of its Subsidiaries in
one
or more transactions each of which complies with Section 11(o) hereof) if (x)
at
the time of or immediately after such consolidation, merger 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) before, simultaneously
with or immediately after such consolidation, merger or sale, the shareholders
of the person who constitutes, or would constitute, the “Principal Party” for
purposes of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such person or any of its Affiliates and
Associates.
(o) The
Company covenants and agrees that, after the Distribution Date, it shall not,
except as permitted by Section 23 or 27 hereof, take (or permit any Subsidiary
to take) any action which at the time it is reasonably foreseeable will diminish
substantially or otherwise eliminate the benefits intended to be afforded by
the
Rights.
(p) Anything
in this Agreement to the contrary notwithstanding, in the event that, at any
time after the Record Date and prior to the Distribution Date, the Company
shall
(i) declare or pay any dividend on the Common Shares payable in Common Shares,
or (ii) effect a subdivision, combination or consolidation of the Common Shares
(by reclassification or otherwise than by payment of dividends in Common Shares)
into a greater or lesser number of Common Shares, then, in any such case, (A)
the number of one one-thousandths of a Series A Share purchasable after such
event upon proper exercise of each Right shall be determined by multiplying
the
number of one one-thousandths of a Series A Share so purchasable immediately
prior to such event by a fraction, the numerator of which is the number of
Common Shares outstanding immediately before such event and the denominator
of
which is the number of Common Shares outstanding immediately after such event,
and (B) each Common Share outstanding immediately after such event shall have
issued with respect to it that number of Rights which each Common Share
outstanding immediately prior to such event had issued with respect to it.
The
adjustments provided for in this Section 11(p) shall be made successively
whenever such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.
Section
12. Certificate
of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Sections 11 and 13 hereof, 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 Common Shares
or
the Series A Shares a copy of such certificate, and (c) mail a brief summary
thereof to each holder of a Right Certificate (or, if prior to the Distribution
Date, to each holder of a certificate representing Common Shares) in accordance
with Section 25 hereof. The Rights Agent shall be fully protected in relying
on
any such certificate and on any adjustment therein contained and shall not
be
obligated or responsible for calculating any adjustment nor shall it be deemed
to have knowledge of such adjustment unless and until it shall have received
such certificate.
Section
13. Consolidation,
Merger, or Sale or Transfer of Assets or Earning Power.
(a)
In the
event that, following the Shares Acquisition Date, directly or indirectly (x)
the
Company
shall consolidate with, or merge with and into, any other Person (other than
a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof) and the Company shall not be the continuing or surviving corporation
of
such consolidation or merger, (y) any Person (other than a Subsidiary of the
Company in a transaction that complies with Section 11(o) hereof) shall
consolidate with, or merge with or into, the Company, and the Company shall
be
the continuing or surviving corporation of such consolidation or merger and,
in
connection with such consolidation or merger, all or part of the Common Shares
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 a single transaction or a series of related transactions, assets or earning
power aggregating more than 50% of the assets or earning power of the Company
and its Subsidiaries (taken as a whole) to any Person or group of related
Persons (other than the Company or any Subsidiary of the Company in one or
more
transactions each of which complies with Section 11(o) hereof), then, and in
each such case (except as may be contemplated by Section 13(d) hereof), proper
provision shall be made so that (i) each holder of a Right, except as provided
in Section 7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof at the current Purchase Price, such number of validly
authorized and issued, fully paid, nonassessable and freely tradable Common
Shares of the Principal Party (as hereinafter defined), free and clear of liens,
encumbrances, or other adverse claims and not subject to any rights of call
or
first refusal, redemption, or repurchase, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the number of
one
one-thousandths of a share of Series A Shares for which a Right was exercisable
immediately prior to the first occurrence of a Section 13(a) Event (or if a
Section 11(a)(ii) Event has occurred prior to the occurrence of a Section 13(a)
Event, multiplying the number of such one-thousandths of a share of Series
A
Shares for which a Right is exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence) and dividing the product (which
product, following such first occurrence, shall be referred to as the “Purchase
Price” for each Right and for all purposes of this Agreement) by (2)
50%
of the current per share market price (determined pursuant to Section 11(d)
hereof) per Common Share of such Principal Party on the date of consummation
of
such Section 13(a) Event; (ii) such Principal Party shall thereafter be liable
for, and shall assume, by virtue of such Section 13(a) 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 hereof shall apply only to such
Principal Party following the first occurrence of a Section 13(a) Event; (iv)
such Principal Party shall take such- steps (including, but not limited to,
the
reservation of a sufficient number of its Common Shares) 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 Common Shares thereafter deliverable upon the exercise
of
the Rights; and (v) the provisions of Section 11(a)(ii) hereof shall thereafter
be of no effect following the first occurrence of a Section 13(a)
Event.
(b) “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), the Person that is the issuer of any securities into which Common
Shares of the Company are converted in such merger or
consolidation,
and if no securities are so issued, the Person that is the other party to such
merger or consolidation; and
(ii) in
the
case of any transaction described in clause (z) of the first sentence of Section
13(a), the Person that is the party receiving the greatest portion of the assets
or earning power transferred pursuant to such transaction or
transactions;
provided,
however,
that in
any such case in subsections (b)(i) or (ii) of this Section 13: (1) if the
Common Shares of such Person are not at such time and have 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 Shares of which are and have been so registered, “Principal
Party” shall refer to such other Person; (2) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Shares
of two or more of which are and have been so registered, “Principal Party” shall
refer to whichever of such Persons is the issuer of the Common Shares having
the
greatest aggregate market value; and (3) in case such Person is owned, directly
or indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the requirements set forth
in
clauses (1) and (2) of this subsection (b), above, shall apply to each of the
chains of ownership having an interest in such joint venture as if such party
were a “subsidiary” of both or all of such joint venturers, and the Principal
Parties in each such chain shall bear the obligations set forth in this Section
13 in the same ratio as their direct or indirect interests in such joint venture
bear to the total of such interests.
(c) The
Company shall not consummate any such consolidation, merger, sale, or transfer
unless the Principal Party shall have a sufficient number of authorized Common
Shares, which have not been issued or reserved for issuance, to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any consolidation, merger, or
sale of assets mentioned in paragraph (a) of this Section 13, the Principal
Party will:
(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
Final Expiration Date;
(ii) 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 of jurisdictions of the various states and the listing of such
securities on such exchanges and trading markets as may be necessary or
appropriate; and
(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 under the Exchange Act.
The
provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that one of the
transactions described in Section 13(a) hereof shall occur at any time after
the
occurrence of a transaction described in Section 11(a)(ii) hereof, the Rights
which have not theretofore been exercised shall thereafter become exercisable
in
the manner described in Section 13(a).
Section
14. Fractional
Rights and Fractional Shares.
(a)
The
Company shall not be required to issue fractions of Rights except prior to
the
Distribution Date as provided in Section 11(p) hereof, or to distribute Right
Certificates that evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Right 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 the 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 for any day shall be the last sale price, regular
way, or, in case no such sale takes place on such 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 on the principal national securities exchange, if any, on which the
Rights are then 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 NASDAQ or such other 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.
(b) The
Company shall not be required to issue fractions of Series A Shares (other
than
fractions which are integral multiples of one one-thousandth of a Series A
Share) upon exercise of the Rights or to distribute certificates that evidence
fractional Series A Shares (other than fractions which are integral multiples
of
one one-thousandth of a Series A Share). Fractions of Series A Shares in
integral multiples of one one-thousandth of a Series A Share may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it,
provided that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges, and preferences to which they
are entitled as beneficial owners of the Series A Shares. In lieu of fractional
Series A Shares that are not integral multiples of one one-thousandth of a
Series A Share, the Company shall pay to the registered holders of Right
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 Series
A
Share. For purposes of this Section 14(b), the current market value of a Series
A Share shall be the closing price of a Series A Share (as determined pursuant
to Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date
of such exercise.
(c) Following
the occurrence of a Triggering Event, the Company shall not be required to
issue
fractions of Common Shares upon exercise of the Rights or to distribute
certificates that evidence fractional Common Shares. In lieu of fractional
Common Shares, the Company may pay to the registered holders of Right
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 Common
Share. For purposes of this Section 14(c), the current market value of one
Common Share shall be the closing price of one Common Share (as determined
pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior
to
the date of such exercise.
(d) The
holder of a Right, by the acceptance of the Rights, expressly waives his right
to receive any fractional Rights or any fractional shares upon exercise of
a
Right, except as otherwise set forth herein.
Section
15. Rights
of Action.
All
rights of action in respect of this Agreement, except the rights of action
given
to the Rights Agent under Section 18 hereof, are vested in the respective
registered holders of the Right Certificates (and, prior to the Distribution
Date, the registered holders of the Common Shares); and any registered holder
of
any Right Certificate (or, prior to the Distribution Date, of the Common
Shares), without the consent of the Rights Agent or of the holder of any other
Right Certificate (or, prior to the Distribution Date, of the Common Shares),
may, in his own behalf and for his 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 right to exercise the Rights evidenced by
such
Right Certificate in the manner provided in such Right 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
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations
of
any Person subject to, this Agreement.
Section
16. Agreement
of Right 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) before
the Distribution Date, the Rights will be transferable only in connection with
the transfer of the Common Shares;
(b) after
the
Distribution Date, the Right Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the principal office of the Rights
Agent designated for such purpose, duly endorsed or accompanied by a proper
instrument of transfer and with appropriate forms and certificates fully
executed;
(c) subject
to Sections 6(a) and 7(f) hereof, the Company and the Rights Agent may deem
and
treat the person in whose name the Class A Right Certificate or
Class B Right Certificate (or, prior to the Distribution Date, the
associated Class A Common Share certificate or Class B Common Share
certificate, as the case may be) is registered as the absolute owner thereof
and
of the Rights evidenced thereby (notwithstanding any notations of ownership
or
writing on the Class A Right Certificate (or the
associated
Class A Common Share certificate) or Class B Right Certificate (or the
associated Class B Common Share certificate), as the case may be, made by
anyone other than the Company or the Rights Agent) for all purposes whatsoever,
and neither the Company nor the Rights Agent shall 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 having 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 best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
Section
17. Right
Certificate Holder Not Deemed a Shareholder.
No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends, or be deemed for any purpose the holder of the Series A Shares or
any
other securities of the Company that may at any time be issuable on the exercise
of the Rights represented thereby, nor shall anything contained herein or in
any
Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a shareholder of the Company or
any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section
18. Concerning
the Rights of Agent.
(a)
The
Company agrees to 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 administration and execution of this Agreement and the exercise
and performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability,
or
expense, incurred without negligence, bad faith, or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the Rights Agent
in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability in the
premises. The costs and expenses of enforcing this right of indemnification
shall also be paid by the Company. The indemnification provided for hereunder
shall survive the expiration of the Rights and termination of this
Agreement.
(b) The
Rights Agent shall be fully indemnified against, shall be protected from, and
shall incur no liability or expense (including without limitation, attorneys’
fees and expenses) for, or in respect of any action taken, suffered or omitted
by it in connection with, its administration of this Agreement in reliance
upon
any Right Certificate or certificate for the Series A Shares or Common Shares
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 its counsel as set forth in Section
20
hereof.
(c) Notwithstanding
anything in this Agreement to the contrary, in no event shall the Rights Agent
be liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits).
Section
19. Merger
or Consolidation or Change of Name of Rights Agent.
(a)
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
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 of 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 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any of
the
Right Certificates shall have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Right Certificates so countersigned; and in case at
that
time any of the Right Certificates shall not have been countersigned, any
successor Rights Agent may countersign such Right Certificates either in the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
(b) In
case
at any time the name of the Rights Agent shall be changed and at such time
any
of the Right Certificates shall have been countersigned but not delivered,
the
Rights Agent may adopt the countersignature under its prior name and deliver
Right Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its changed name; and
in
all such cases such Right Certificates shall have the full force provided in
the
Right 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 Right Certificates, by their acceptance thereof, shall be
bound:
(a) 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 by it in good faith and in accordance with such opinion.
(b) Whenever
in the performance of its duties under this Agreement the Rights Agent shall
deem it necessary or desirable that any fact or matter (including, without
limitation, the identity of any Acquiring Person and the determination of
“current per share market price”) be proved or established by the Company before
taking or suffering any action hereunder, such fact or matter (unless other
evidence in respect
thereof
be herein specifically prescribed) may be deemed to be conclusively proved
and
established by a certificate signed by the President or a Vice President and
by
the Secretary or an Assistant Secretary or the Treasurer or an Assistant
Treasurer of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance upon
such
certificate.
(c) The
Rights Agent shall be liable hereunder to the Company and any other Person
only
for its own negligence, bad faith, or willful misconduct.
(d) 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 Right Certificates
(except its countersignature thereof) or be required to verify the same, but
all
such statements and recitals are and shall be deemed to have been made by the
Company only.
(e) The
Rights Agent shall not be under any 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
Right Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it be responsible
for
any adjustment required under the provisions of Sections 11, 13 or 24 hereof
or
responsible for the manner, method, or amount of any such adjustment or the
ascertainment of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right 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 Series A Shares to be issued pursuant to this Agreement
or
any Right Certificate or as to whether any Series A Shares will, when issued,
be
validly authorized and issued, fully paid, and nonassessable.
(f) The
Company agrees that it 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) The
Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any one of the Chairman
of the Board, the President, the Executive Vice President, any Vice President,
the Secretary, or the Treasurer of the Company, and to apply to such officers
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 instructions of any such officer or for any delay in acting
while waiting for those instructions. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on or after which such action shall
be
taken or such omission shall be effective. The Rights Agent shall not be liable
for any action taken by, or
omission
of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date
shall
not be less than ten Business Days after the date any officer of the Company
actually receives such application, unless, any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such action
(or the effective date in the case of an omission), the Rights Agent shall
have
received written instructions in response to such application subject to the
proposed action or omission and/or specifying the action to be taken or
omitted.
(h) The
Rights Agent and any shareholder, 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
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) 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 resulting from any such act, default,
neglect, or misconduct, provided
that
reasonable care was exercised in the selection and continued employment
thereof.
(j) 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) If,
with
respect to any Right 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 on such certificate attached to the
form of assignment or form of election to purchase, the Rights Agent shall
not
take any further action with respect to such requested exercise or transfer
without first consulting with the Company.
(l) The
Rights Agent shall not be required to take notice or be deemed to have any
notice of any fact, event or determination (including, without limitation,
any
dates or events defined in this Agreement or the designation of any Person
as an
Acquiring Person, Affiliate or Associate) under this Agreement unless and until
the Rights Agent shall be specifically notified in writing by the Company of
such fact, event or determination.
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 30 days’ notice
in
writing mailed to the Company and to each transfer agent of the Common Shares
and Series A Shares by registered or certified mail, and to the holders of
the
Right Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 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 Shares and Series A Shares by registered or certified mail,
and to the holders of the Right 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 30 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
Right Certificate (who shall, with such notice, submit his Right Certificate
for
inspection by the Company), then the registered holder of any Right 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 corporation organized and doing business under the
laws
of the United States or any state of the United States, in good standing, which
is authorized under such laws to exercise corporate trust powers and is subject
to supervision or examination by federal or state authority and which has at
the
time of its appointment as Rights Agent a combined capital and surplus of at
least $100,000,000. 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 Shares and Series A Shares and mail a notice thereof in writing
to
the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, 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 Right Certificates evidencing Rights in such form as may
be
approved by the Board to reflect any adjustment or change in the Purchase Price
per share and the number or kind or class of shares or other securities or
property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement. In addition, in connection with the issuance,
sale, or delivery of Common Shares following the Distribution Date and prior
to
the redemption or expiration of the Rights, the Company (a) shall, with respect
to Common Shares so issued, sold, or delivered pursuant to the exercise of
stock
options or under any employee plan or arrangement outstanding, granted or
awarded as of the Distribution Date, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board, issue Right
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided,
however,
that
(i) no such Rights Certificate 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)
The
Board may, at its option, at any time prior to the earlier of (A) the time
at
which an Acquiring Person becomes such, or (B) the Final Expiration Date, redeem
all but not less than all the then outstanding Rights at a redemption price
of
$.001 per Right, 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”).
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.
(b) In
the
case of a redemption permitted under Section 23 hereof, immediately upon the
action of the Board ordering the redemption of the Rights, evidence of which
shall have been filed promptly with the Rights Agent, and without any further
action and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to receive
the
Redemption Price. Within ten days after the action of the Board ordering the
redemption of the Rights under Section 23(a) hereof, the Company shall give
notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the Transfer Agent for the Common Shares. 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 redemption shall state
the Redemption Date and the method by which the payment of the Redemption Price
will be made. The Company may, at its option, discharge all of its obligations
with respect to providing such notice to Rights holders by (i) issuing a press
release announcing the manner of redemption of the Rights, (ii) depositing
with
a bank or trust company in New York, New York or Portland, Oregon, having a
capital and surplus of at least $100,000,000, funds necessary for such
redemption, in trust, to be applied to the redemption of the Rights so called
for redemption and (iii) arranging for the mailing of the Redemption Price
to
the registered holders of the Rights.
Section
24. Exchange.
(a)
The
Board may, at its option, at any time after any Person becomes an Acquiring
Person, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the provisions
of Section 7(e) hereof) for Common Shares at an exchange ratio of one
Class A Common Share per Class A Right and one Class B Common
Share per Class B Right, respectively, in each case, 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 Person or entity organized, appointed or established by the Company for
or
pursuant to any such plan), together with all Affiliates and Associates of
such
Person, becomes the Beneficial Owner of Common Shares representing a majority
of
the Voting Power then outstanding.
(b) Immediately
upon the action of the Board ordering the exchange of any Rights pursuant to
Section 24(a) hereof and without any further action and without any notice,
the
right to exercise such Rights shall terminate and (i) the only right thereafter
of a holder of such Rights shall be to receive that number of Class A
Common Shares or Class B Common Shares equal to the number of Class A
Rights or Class B Rights, as the case may be, held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public notice
of any such exchange; provided,
however,
that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such exchange
to all of 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 received the
notice. Each such notice of exchange will state the method by which the exchange
of the Class A Common Shares or Class B Common Shares for Class A
Rights or Class B Rights, as the case may be, will be effected. Any partial
exchange shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of Section 7(d)) held
by each holder of Rights.
(c) In
any
exchange pursuant to this Section 24, the Company, at its option, may substitute
Series A Shares (or equivalent preferred shares) for Common Shares exchangeable
for Rights, at the initial rate of one one-thousandth of a Series A Share (or
equivalent preferred share) for each Common Share, as appropriately adjusted
to
reflect stock splits, stock dividends and other similar transactions after
the
date hereof.
(d) The
Company shall not be required to issue fractions of Common Shares or to
distribute certificates which evidence fractional Series A Shares (except as
hereinafter provided) or fractional Common Shares, but if the exchange is for
Series A Shares, the Company shall be obligated to issue fractional shares
so
long as any fraction of a Series A Share so to be issued is at least equal
to
one one-thousandth of a Series A Share. In lieu of such fractional shares,
the
Company shall pay to the registered holders of the Right 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 a whole share.
For the purposes of this Section 24(d), (i) the current market value of a whole
Common Share shall be the closing price of a Common Share (as determined
pursuant to the second sentence of Section 11(d)(i) hereof) for the Trading
Day
immediately following the day of the public announcement by the Company that
an
exchange is to be effected pursuant to this Section 24, and (ii) the current
market value of a Series A Share or fraction of a Series A Share shall be the
current market value on such day of a Series A Share (or fraction of a Series
A
Share) as determined in accordance with Section 11(d).
Section
25. Notice
of Certain Events.
(a)
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 its Series A Shares
or to make any other distribution to the holders of its Series A Shares (other
than a regular quarterly cash dividend), or (ii) to offer to the holders of
its
Series A Shares rights or warrants to subscribe for or to purchase any
additional Series A Shares or shares of stock of any class or any other
securities, rights, or options, or (iii) to effect any reclassification of
its
Series A Shares (other than a reclassification involving only the subdivision
of
outstanding Series A Shares), or (iv) to effect any consolidation or merger
into
or with any other Person (other than a Subsidiary of the Company in a
transaction which complies with
Section
11(o) hereof), or to effect any sale or other transfer (or to permit one or
more
of its Subsidiaries to effect any sale or other transfer), in one or more
transactions, of more than 50% of the assets or earning power of the Company
and
its Subsidiaries (taken as a whole) to any other Person or related Person,
or
(v) to effect the liquidation, dissolution or winding up of the Company, then,
in each such case, the Company shall give to each holder of a Right Certificate,
to the extent feasible and in accordance with Section 26 hereof, a notice of
such proposed action, which shall specify the record date for the purposes
of
such stock dividend, or distribution of rights or warrants, or the date on
which
such reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and, if applicable, the date of
participation therein by the holders of the Common Shares and/or Series A
Shares, if any such date is to be fixed, and such notice shall be so given
in
the case of any such action covered by clause (i) or (ii) above at least 20
days
before the record date for determining holders of the Series A Shares for
purposes of such action, and in the case of any such other action, at least
20
days before the date of participation therein by the holders of the Common
Shares and/or Series A Shares, whichever shall be the earlier.
(b) In
case
of the occurrence of a Section 11(a)(ii) Event, then, in any such case, (i)
the
Company shall as soon as practicable thereafter give to each holder of a Right
Certificate, to the extent feasible and in accordance with Section 26 hereof,
a
notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii), and
(ii)
all references in the preceding paragraph to Series A Shares shall be deemed
thereafter to refer to Class A Common Shares with respect to holders of
Class A Rights, Class B Common Shares with respect to holders of
Class B Rights and/or, if appropriate, other securities.
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 Right Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent)
as
follows:
Schnitzer
Steel Industries, Inc.
▇▇▇▇
▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General
Counsel
with
a
copy to (which copy shall not constitute notice):
White
& Case LLP
▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇
▇▇▇▇▇
Subject
to the provisions of Section 21 hereof, any notice or demand authorized by
this
Agreement to be given or made by the Company or by the holder of any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address
is
filed in writing with the Company) as follows:
|
To:
|
▇▇▇▇▇
Fargo Bank, N.A.
Shareowner
Services
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇−1139
|
| Attention: | Manager of Account Management |
Notices
or demands authorized by this Agreement to be given or made by the Company
or
the Rights Agent to the holder of any Right Certificate 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
Rights Agent.
Section
27. Supplements
and Amendments.
For so
long as the Rights are redeemable, the Company may, in its sole and absolute
discretion, 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 Common Shares. From and after the time the Rights
are
no longer redeemable, the Company may, in its sole and absolute discretion,
and
the Rights Agent shall, if the Company shall so direct, supplement or amend
this
Agreement without approval of any holders of Right Certificates in order (i)
to
cure any ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision herein, or
(iii)
to change or supplement the provisions hereunder in any manner which the Company
may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Right Certificates (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person); provided
that no
such supplement or amendment may cause this Agreement to again become amendable
other than in accordance with this sentence or cause the Rights to again 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 Shares. Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment that changes the rights and duties of
the
Rights Agent under this Agreement will be effective against the Rights Agent
without the execution of such supplement or amendment by the Rights Agent.
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
29. Determination
and Actions by the Board.
For all
purposes of this Agreement, any calculation of the number of Common Shares
outstanding at any particular time and any determination of the particular
percentage of such outstanding Common Shares of which any Person is the
Beneficial Owner shall be made in accordance with the provisions of Rule
13d-
3(d)(1)(i)
of the General Rules and Regulations under the Exchange Act as in effect as
of
the date hereof. The Board shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board or the Company, or as may be necessary or advisable in
the
administration of this Agreement, including, without limitation, the right
and
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or
to
amend the Agreement). All such actions, calculations, interpretations, and
determinations (including, for purposes of clause (ii) below, all omissions
with
respect to the foregoing) which are done or made by the Board, in good faith,
shall (i) be final, conclusive and binding on the Company, the Rights Agent,
the
holders of the Right Certificates and all other parties, and (iii) not subject
the Board to any liability to the holders of the Right
Certificates.
Section
30. Benefits
of this Agreement.
Nothing
in this Agreement shall be construed to give to any person or corporation other
than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Shares) 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 Right Certificates (and, prior to the Distribution
Date, the Common Shares).
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,
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 Agreement, the right of redemption set
forth in Section 23 hereof shall be reinstated and shall not expire until the
close of business on the tenth day following the date of such determination
by
the Board.
Section
32. Governing
Law.
This
Agreement and each Right Certificate issued hereunder shall be deemed to be
a
contract made under the laws of the State of Oregon, 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;
provided,
however,
that
all provisions regarding the rights, duties and obligations of the Rights Agent
shall be governed by and construed in accordance with the laws of the State
of
New York applicable to contracts made and to be performed entirely within such
State.
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 of reference only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
|
Attest:
By
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title:
Secretary
|
SCHNITZER
STEEL INDUSTRIES, INC.
By
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
Name:
▇▇▇▇ ▇. ▇▇▇▇▇▇
Title:
President
|
|
[SEAL]
|
|
|
Attest:
By
/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Name:
▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice
President
|
▇▇▇▇▇
FARGO BANK, N.A.
By
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇
▇▇▇▇▇▇
Title: Vice
President
|
EXHIBIT
A
FORM
OF
ARTICLES
OF AMENDMENT
TO
THE
RESTATED
ARTICLES OF INCORPORATION
OF
SCHNITZER
STEEL INDUSTRIES, INC.
Pursuant
to Section 60.134 of the Oregon Revised Statutes
Pursuant
to Section 60.134 of the Oregon Revised Statutes, Schnitzer Steel Industries,
Inc., a corporation organized and existing under the laws of the State of Oregon
(the “Corporation”),
adopts the following Articles of Amendment to its Restated Articles of
Incorporation (this “Amendment”)
for the
purpose of creating a series of 100,000 shares of Preferred Stock designated
as
Series A Participating Preferred Stock:
1. The
name
of the Corporation is Schnitzer Steel Industries, Inc.
2. The
text
of the amendment determining the terms of the Series A Participating Preferred
Stock is attached hereto as Appendix
I.
3. This
Amendment was duly adopted by the Board of Directors of the Corporation on
March
21, 2006 without shareholder approval. No shareholder action was
required.
| SCHNITZER STEEL INDUSTRIES, INC. | ||
| |
|
|
| Dated: March __, 2006 | By: | /s/ |
|
Name: |
||
| Title: | ||
APPENDIX
I
DESIGNATION
OF TERMS
OF
SERIES
A PARTICIPATING PREFERRED STOCK
OF
SCHNITZER
STEEL INDUSTRIES, INC.
RESOLVED,
that pursuant to the authority vested in the Board of Directors of the
Corporation by the Corporation’s Restated Articles of Incorporation, a series of
Preferred Stock of the Corporation be and it hereby is created, no shares of
which have been heretofore issued, and that the designation and amount thereof
and the voting powers, preferences and relative, participating, optional and
other special rights of the shares of such series, and the qualifications,
limitations or restrictions thereof are as follows:
Section
1. Designation
and Amount.
The
shares of such series shall be designated as “Series A Participating Preferred
Stock”, par value $1.00 per share (the “Series
A Preferred Stock”),
and
the number of shares constituting such series shall be 100,000.
Section
2. Dividends
and Distributions.
(A) Subject
to the prior and superior rights of the holders of any shares of any series
of
stock ranking prior and superior to the shares of Series A Preferred Stock
with
respect to dividends, the holders of shares of Series A Preferred Stock, in
preference to the holders of Class A Common Stock, par value $1.00 per
share, of the Company (the “Class A
Common Stock”)
and
Class B Common Stock, par value $1.00 per share, of the Company (the
“Class B
Common Stock”)
and of
any other junior 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 first day of January, April,
July,
and
October 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 A 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, one thousand
(1000) times the aggregate per share amount of all cash dividends, and one
thousand (1000) times the aggregate per share amount (payable in kind) of all
non-cash dividends or other distributions, other than a dividend or distribution
payable in shares of Class A Common Stock or Class B Common Stock or a
subdivision of the outstanding shares of Class A Common Stock or
Class B Common Stock (by reclassification or otherwise), declared on the
Class A Common Stock or Class B 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 A Preferred Stock. Dividends on the Series A
Preferred Stock shall be paid out of funds legally available for such purpose.
In the event the Company shall at any time after March 21, 2006 (the
“Rights
Declaration Date”),
(i)
declare any dividend on Class A Common Stock or Class B Common Stock
payable in shares of Class A Common Stock or Class B Common Stock,
(ii) subdivide the outstanding Class A Common Stock or Class B Common
Stock, or (iii) combine the outstanding Class A Common Stock or
Class B Common Stock into a smaller number of shares, then in each such
case the amounts to which
holders
of shares of Series A Preferred Stock were entitled immediately prior to such
event under clause (b) of the preceding sentence shall be adjusted by
multiplying each such amount by a fraction the numerator of which is the number
of shares of Class A Common Stock and Class B Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Class A Common Stock and Class B Common Stock that were
outstanding immediately prior to such event.
(B) The
Company shall declare a dividend or distribution on the Series A Preferred
Stock
as provided in paragraph (A) of this Section immediately after it declares
a
dividend or distribution on the Class A Common Stock or Class B Common
Stock (other than a dividend or distribution payable in shares of Class A
Common Stock or Class B Common Stock); provided
that, in
the event no dividend or distribution shall have been declared on the
Class A Common Stock or Class B Common Stock during the period between
any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $1.00 per share on the Series A Preferred Stock
shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date; and provided
further,
that
nothing contained in this paragraph (B) shall be construed so as to conflict
with any provision relating to the declaration of dividends contained in the
Certificate.
(C) Dividends
shall begin to accrue and be cumulative on outstanding shares of Series A
Preferred Stock from the Quarterly Dividend Payment Date next preceding the
date
of issue of such shares of Series A 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 A 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 A 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 A Preferred Stock entitled to receive payment
of
dividend or distribution declared thereon, which record date shall be no more
than 30 days before the date fixed for the payment thereof.
Section
3. Voting
Rights.
The
holders of shares of Series A Preferred Stock shall have the following voting
rights:
(A) Subject
to the provision for adjustment hereinafter set forth, each share of Series
A
Preferred Stock shall entitle the holder thereof to 1,000 votes on all matters
submitted to a vote of the shareholders of the Company. In the event the Company
shall at any time following the Rights Declaration Date (i) declare any dividend
on Class A Common Stock or Class B Common Stock payable in shares of
Class A Common Stock or Class B Common Stock, (ii) subdivide the
outstanding shares of Class A Common Stock or Class B Common Stock or
(iii) combine the outstanding Class A Common Stock or Class B 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 A 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 votes entitled to be cast by the holders
of
shares of Class A Common Stock and Class B Common Stock outstanding
immediately after such event and the denominator of which is the number of
votes
entitled to be cast by the holders of shares of Class A Common Stock and
Class B 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 A Preferred
Stock and the holders of shares of Class A Common Stock and Class B
Common Stock shall vote together as one class on all matters submitted to a
vote
of shareholders of the Company.
(C) (i)
If at
any time dividends on any Series A Preferred Stock shall be in arrears in an
amount equal to six (6) quarterly dividends thereon, the occurrence of such
contingency shall ▇▇▇▇ 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 A 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 A 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 A 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 shareholders, and
thereafter at annual meetings of shareholders, provided
that
neither such voting right nor the right of the holders of any other series
of
Series A Preferred Stock, if any, to increase, in certain cases, the authorized
number of directors shall be exercised unless the holders of ten percent (10%)
in number of shares of Series A Preferred Stock outstanding shall be present
in
person or by proxy. The absence of a quorum of the holders of Class A
Common Stock and Class B Common Stock shall not affect the exercise by the
holders of Series A Preferred Stock of such voting right. At any meeting at
which the holders of Series A 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 Series A 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 Series A 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
Series A Preferred Stock as herein provided or pursuant to the rights of any
equity securities ranking senior to or pari passu with the Series A Preferred
Stock.
(iii) Unless
the holders of Series A Preferred Stock shall, during an existing default
period, have previously exercised their right to elect directors, the Board
of
Directors may order, or any shareholder or shareholders owning in the aggregate
not less than ten percent (10%) of the total number of shares of Series A
Preferred Stock outstanding, irrespective of series, may request, the calling
of
a special meeting of the holders of Series A Preferred Stock, which meeting
shall thereupon be called by the President, a Vice President or the Secretary
of
the Corporation. Notice of such meeting and of any annual meeting at which
holders of Series A Preferred Stock are entitled to vote pursuant to this
Paragraph (C)(iii) shall be given to each holder of record of Series A Preferred
Stock by mailing a copy of such notice to him at his last address as the same
appears on the books of the Corporation. Such meeting shall be called for a
time
not earlier than 20 days and not later than 60 days after such order or request
or, in default of the calling of such meeting within 60 days after such order
or
request, such meeting may be called on similar notice by any shareholder or
shareholders owning in the aggregate not less than ten percent (10%) of the
total number of shares of Series A Preferred Stock outstanding. Notwithstanding
the provisions of this Paragraph (C)(iii), no such special meeting shall be
called during the period within 60 days immediately preceding the date fixed
for
the next annual meeting of the shareholders.
(iv) In
any
default period, the holders of Class A Common Stock, Class B Common
Stock and other classes of stock of the Corporation if applicable, shall
continue to be entitled to elect the whole number of directors until the holders
of Series A 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 Series A 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 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 elected 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 Series
A Preferred Stock as a class to elect directors shall cease, (y) the term of
any
directors elected by the holders of Series A Preferred Stock as a class shall
terminate, and (z) the number of directors shall be such number as may be
provided for in the certificate of incorporation or 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 certificate of incorporation or 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 A 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 Class A Common Stock and Class B
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
A
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 A Preferred Stock outstanding shall have been paid in full,
the
Company 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 stock ranking junior (either
as to dividends or upon liquidation, dissolution, or winding up) to the Series
A
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 A Preferred Stock, except dividends paid ratably
on
the Series A 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 stock ranking
on a
parity (either as to dividends or upon liquidation, dissolution, or winding
up)
with the Series A Preferred Stock, provided
that the
Company may at any time redeem, purchase or otherwise acquire shares of any
such
parity stock in exchange for shares of any stock of the Company ranking junior
(either as to dividends or upon dissolution, liquidation or winding up) to
the
Series A Preferred Stock; or
(iv) purchase
or otherwise acquire for consideration any shares of Series A Preferred Stock,
or any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution, or winding up) with the Series A 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
Company shall not permit any subsidiary of the Company to purchase or otherwise
acquire for consideration any shares of stock of the Company unless the Company
could, under paragraph (A) of this Section 4, purchase or otherwise acquire
such
shares at such time and in such manner.
Section
5. Redemption.
The
Series A Preferred Stock shall not be redeemable.
Section
6. Reacquired
Shares.
Any
shares of Series A Preferred Stock purchased or otherwise acquired by the
Company in any manner whatsoever shall be retired and canceled 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
7. Liquidation,
Dissolution, or Winding Up.
(A) Upon
any
voluntary or involuntary liquidation, dissolution, or winding up of the Company,
no distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution, or winding up) to
the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A 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
A Liquidation Preference”).
Following the payment of the full amount of the Series A Liquidation Preference,
no additional distributions shall be made to the holders of shares of Series
A
Preferred Stock unless, prior thereto, the holders of shares of Class A
Common Stock and Class B Common Stock shall have received an amount per
share (the “Common
Adjustment”)
equal
to the quotient obtained by dividing (i) the Series A 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 Class A Common Stock and Class B Common Stock) (such
number in clause (ii) being the “Adjustment
Number”).
Following the payment of the full amount of the Series A Liquidation Preference
and the Common Adjustment in respect of all outstanding shares of Series A
Preferred Stock, Class A Common Stock and Class B Common Stock,
respectively, holders of Series A Preferred Stock, holders of shares of
Class A Common Stock and holders of shares of Class B Common Stock
shall receive their ratable and proportionate share of the remaining assets
to
be distributed in the ratio of the Adjustment Number to one with respect to
such
Preferred Stock, Class A Common Stock and Class B 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 A Liquidation Preference and the liquidation preferences
of all other series of preference stock, if any, which rank on a parity with
the
Series A Preferred Stock, then all such available assets shall be distributed
ratably to the holders of the Series A Preferred Stock and the holders of such
parity stock in proportion to their respective liquidation preferences. In
the
event that, after payment in full of the Series A Liquidation Preference, there
are not sufficient assets available to permit payment in full of the Common
Adjustment, then any such remaining assets shall be distributed ratably to
the
holders of Class A Common Stock and Class B Common Stock.
(C) In
the
event the Company shall at any time after the Rights Declaration Date, (i)
declare any dividend on Class A Common Stock or Class B Common Stock
payable in shares of Class A Common Stock or Class B Common Stock,
(ii) subdivide the outstanding Class A Common Stock or Class B Common
Stock, or (iii) combine the outstanding Class A Common Stock or
Class B 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 Class A Common Stock and Class B
Common Stock outstanding immediately after such event, and the denominator
of
which is the number of shares of Class A Common Stock and Class B
Common Stock that were outstanding immediately prior to such event.
Section
8. Consolidation,
Merger, etc.
In case
the Company shall enter into any consolidation, merger, combination, or other
transaction in which the shares of Class A Common Stock or Class B
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 A
Preferred Stock shall at the same time be similarly exchanged or changed in
an
amount per share (subject to the provision for adjustment hereinafter set forth)
equal to 1,000 times the aggregate amount of stock, securities, cash, and/or
any
other property (payable in kind), as the case may be, into which or for which
each share of Class A Common Stock and Class B Common Stock is changed
or exchanged. In the event the Company shall at any time after the Rights
Declaration Date: (i) declare or pay any dividend on Class A Common Stock
or Class B Common Stock payable in shares of Class A Common Stock or
Class B Common Stock, (ii) subdivide the outstanding shares of Class A
Common Stock or Class B Common Stock, or (iii) combine the outstanding
shares of Class A Common Stock or Class B 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 A Preferred
Stock shall be adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Class A Common Stock and Class B
Common Stock outstanding immediately after such event, and the denominator
of
which is the number of shares of Class A Common Stock and Class B
Common Stock that were outstanding immediately prior to such event.
Section
9. Ranking.
The
Series A Preferred Stock shall rank junior to all other series of the Company’s
Preferred Stock as to the payment of dividends and distribution of assets,
unless the term of any such series shall provide otherwise.
Section
10. Fractional
Shares.
The
Company may issue fractions and certificates representing fractions of a share
of Series A Preferred Stock in integral multiples of 1/1000th of a share of
Series A Preferred Stock (or in lieu thereof, at the election of the Board
of
Directors of the Company at the time of the first issue of any shares of Series
A Preferred Stock, and evidence such fractions by depositary receipts, pursuant
to an appropriate agreement between the Company and a depositary selected by
it,
provided
that
such agreement shall provide that the holders of such depositary receipts shall
have all rights, privileges and preferences to which they would be entitled
as
beneficial owners of shares of Series A Preferred Stock in the event that
fractional shares of Series A Preferred Stock are issued) which shall entitle
the holders thereof, in the proportion which such fraction bears to a full
share, to all the rights provided herein for holders of full shares of Series
A
Preferred Stock.
Section
11. Amendment.
At any
time when any shares of Series A Preferred Stock are outstanding, the
designation of terms of Series A Preferred Stock set forth in these Articles
of
Amendment shall not be amended in any manner that would materially alter or
change the powers, preferences, or special rights of the Series A Preferred
Stock so as to affect them adversely, without the affirmative vote of the
holders of a majority or more of the outstanding shares of Series A Preferred
Stock, voting together as a single class.
EXHIBIT
B
[FORM
OF
CLASS A RIGHT CERTIFICATE]
| Certificate No. R- | ___________________ Rights |
NOT
EXERCISABLE AFTER MARCH 21, 2016, UNLESS EXTENDED PRIOR THERETO BY THE BOARD
OF
DIRECTORS OR EARLIER IF EXCHANGED OR REDEEMED BY THE COMPANY. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.001 PER RIGHT AND UNDER CERTAIN CIRCUMSTANCES TO
EXCHANGE, IN EACH CASE AT THE OPTION OF THE COMPANY AND ON THE TERMS SET FORTH
IN THE RIGHTS AGREEMENT.
UNDER
CERTAIN CIRCUMSTANCES, CLASS A RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
(AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER
OF
SUCH CLASS A RIGHTS MAY BECOME NULL AND VOID. [THE CLASS A RIGHTS REPRESENTED
BY
THIS 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 CLASS A RIGHT
CERTIFICATE AND THE CLASS A RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*
Class A
Right Certificate
SCHNITZER
STEEL INDUSTRIES, INC.
This
certifies that __________________________, or registered assigns, is the
registered owner of the number of Class A 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 March 21, 2006 (the
“Rights
Agreement”),
between Schnitzer Steel Industries, Inc., an Oregon corporation (the
“Company”),
and
▇▇▇▇▇ Fargo Bank, N.A. (the “Rights
Agent”),
to
purchase from the Company at any time prior to 5:00 PM (New York City time)
on
March 21, 2016 (unless such date is extended prior thereto by the Board of
Directors) (the “Final
Expiration Date”),
at
the office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-thousandth of a fully paid, non-assessable
share of Series A Participating Preferred Stock, par value $1.00 per share
(“Series
A Preferred Stock”),
of
the Company, at a purchase price of One Hundred Ten Dollars ($110.00) per one
one-thousandth of a share (the “Purchase
Price”),
upon
presentation and surrender of this Class A Right Certificate with the Form
of Election to Purchase and related Certificate duly executed. Except as
otherwise provided in the Rights Agreement, the Purchase Price shall be paid
in
cash. The number of Class A Rights evidenced by this Class A Right
Certificate (and the number of fractional shares of Series A Preferred Stock
that may be purchased upon exercise thereof) set forth above, and
|
*
|
The
bracketed portion of the legend should be inserted only if
applicable.
|
the
Purchase Price per fractional share of Series A Preferred Stock set forth above,
are the number and Purchase Price as of April 4, 2006, based on the Series
A
Preferred Stock as constituted at such date. The Company reserves the right
to
require before the occurrence of a Triggering Event (as such term is defined
in
the Rights Agreement) that a number of Class A Rights be exercised so that
only whole shares of Preferred Stock will be issued.
Upon
the
occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights
Agreement), if the Class A Rights evidenced by this Class A Right
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate
or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate, or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Class A Rights shall become null and void and no holder hereof shall have
any right with respect to such Class A Rights from and after the occurrence
of any such Section 11(a)(ii) Event.
As
provided in the Rights Agreement, the Purchase Price, and the number and kind
of
shares of Series A Preferred Stock or other securities that may be purchased
upon the exercise of the Class A Rights evidenced by this Class A
Right 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
Class A Right 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 Company, and the holders of the Class A Right
Certificates, which limitations of rights include the temporary suspension
of
the exercisability of such Class A Rights under the specific circumstances
specified 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 Company.
This
Class A Right Certificate, with or without other Class A Right
Certificates, upon surrender at the principal office or offices of the Rights
Agent designated for such purpose, may be exchanged for another Class A
Right Certificate or Class A Right Certificates of like tenor and date
evidencing Class A Rights entitling the holder to purchase a like aggregate
number of shares of Series A Preferred Stock as the Class A Rights
evidenced by the Class A Right Certificate or Class A Right
Certificates surrendered shall have entitled such holder to purchase. If the
Class A Rights evidenced by this Class A Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Class A Right Certificate or Class A Right Certificates for
the number of whole Class A Rights not exercised.
Subject
to the provisions of the Rights Agreement, the Class A Rights evidenced by
this Class A Right Certificate may be redeemed by the Company at its option
at a redemption price of $.001 per Class A Right at any time prior to the
earlier of (i) the time at which an Acquiring Person becomes such, or (ii)
the
Final Expiration Date. In addition, under certain circumstances following the
time any Acquiring Person becomes such, the Class A Rights may
be
exchanged, in whole or in part, for Class A Common Shares (as defined in
the Rights Agreement) or shares of Series A Preferred Stock (or equivalent
preferred shares). Immediately upon the action of the Board of Directors of
the
Company authorizing exchange or redemption of the Class A Rights, the
Class A Rights will no longer be exercisable, and thereafter the only right
of the holders of the Class A Rights evidenced hereby will be to receive
the securities issuable on exchange or the redemption price.
The
Rights Agreement may be supplemented or amended without the approval of any
holder of the Class A Rights (or the Class A Common Shares) as set
forth in the Rights Agreement.
No
fractional shares of Series A Preferred Stock will be issued upon the exercise
of any Class A Right or Class A Rights evidenced hereby (other than
fractions that are integral multiples of one one-thousandth of a share of Series
A Preferred Stock, which may, at the election of the Company, be evidenced
by
depositary receipts), but in lieu thereof a cash payment will be made as
provided in the Rights Agreement. The Company, at its election, may require
that
a number of Class A Rights be exercised so that only whole shares of
Preferred Stock would be issued.
No
holder
of this Class A Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Series A Preferred
Stock or of any other securities of the Company (including Class A Common
Shares) that 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 shareholder of the Company
or
any right to vote for the election of directors or upon any matter submitted
to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Class A Rights
evidenced by this Class A Right Certificate shall have been exercised as
provided in the Rights Agreement and its corporate seal.
This
Class A Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS
the facsimile signature of the proper officers of the Company and its corporate
seal.
Dated
as
of _______________, 200__.
|
Countersigned
|
|
|
▇▇▇▇▇
FARGO BANK, N.A.
By
Authorized
Signature
|
SCHNITZER
STEEL INDUSTRIES, INC.
By
Title:
|
|
[SEAL]
|
Attest:
By
Title:
[SEAL]
|
[FORM
OF
REVERSE SIDE OF CLASS A RIGHT CERTIFICATE]
FORM
OF ASSIGNMENT
(To
be
executed by the registered holder if such
holder
desires to transfer the Class A Right Certificate.)
FOR
VALUE
RECEIVED ______________________________________ hereby sells, assigns,
or
transfers unto
(Please
print name and address of transferee)
this
Class A Right Certificate, together with all right, title, and interest
therein, and does hereby irrevocably constitute and appoint _________________
Attorney, to transfer the within Class A Right Certificate on the books of
the within-named Company, with full power of substitution.
Dated:
_________________, 200_
Signature
Signature
Medallion Guaranteed:
Certificate
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1)
this
Class A Rights Certificate [ ] is
[ ] is not being sold, assigned or transferred by
or on behalf of a Person who is or was an Acquiring Person or an Affiliate
or
Associate of any such Acquiring Person (as such terms are defined pursuant
to the Rights Agreement);
(2)
after
due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not
acquire the Class A Rights evidenced by this Class A Right Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
| Dated: _____________, 200_ | _______________________________
Signature
|
Signature
Medallion Guaranteed:
NOTICE
The
signature(s) to the foregoing Assignment and Certificate must correspond to
the
name(s) as written upon the face of this Class A Right 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
Class A
Rights represented by the Class A Right Certificate.)
To:
Schnitzer Steel Industries, Inc.
The
undersigned hereby irrevocably elects to exercise ____________ Class A
Rights represented by this Class A Right Certificate to purchase the shares
of Series A Shares issuable upon the exercise of the Class A Rights (Common
Shares or such other securities of the Company or of any other person which
may
be issuable upon the exercise of the Class A Rights) and requests that
certificates for such shares be issued in the name of:
_______________________
Please
insert social security
or
other
identifying number: ________________
(Please
print name and address)
If
such
number of Class A Rights shall not be all the Class A Rights evidenced
by this Class A Right Certificate, a new Class A Right Certificate for
the balance of such Class A Rights shall be registered in the name of and
delivered to: _______________________
Please
insert social security
or
other
identifying number: ________________
(Please
print name and address)
| Dated: _____________, 200_ | _______________________________
Signature
|
Signature
Medallion Guaranteed:
CERTIFICATE
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1) the
Class A Rights evidenced by this Class A Right Certificate
[ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person
or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after
due
inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not
acquire the Class A Rights evidenced by this Class A Right Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
| Dated: _____________, 200_ | _______________________________
Signature
|
Signature
Medallion Guaranteed:
NOTICE
The
signature(s) to the foregoing Election to Purchase and Certificate must
correspond to the name(s) as written upon the face of this Class A Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
EXHIBIT
C
[FORM
OF
CLASS B RIGHT CERTIFICATE]
| Certificate No. R- | ___________________ Rights |
NOT
EXERCISABLE AFTER MARCH 21, 2016, UNLESS EXTENDED PRIOR THERETO BY THE BOARD
OF
DIRECTORS OR EARLIER IF EXCHANGED OR REDEEMED BY THE COMPANY. THE RIGHTS ARE
SUBJECT TO REDEMPTION AT $.001 PER RIGHT AND UNDER CERTAIN CIRCUMSTANCES TO
EXCHANGE, IN EACH CASE AT THE OPTION OF THE COMPANY AND ON THE TERMS SET FORTH
IN THE RIGHTS AGREEMENT.
UNDER
CERTAIN CIRCUMSTANCES, CLASS B RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
(AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER
OF
SUCH CLASS B RIGHTS MAY BECOME NULL AND VOID. [THE CLASS B RIGHTS REPRESENTED
BY
THIS 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 CLASS B RIGHT
CERTIFICATE AND THE CLASS B RIGHTS REPRESENTED HEREBY MAY BECOME VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.]*
Class B
Right Certificate
SCHNITZER
STEEL INDUSTRIES, INC.
This
certifies that __________________________, or registered assigns, is the
registered owner of the number of Class B 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 March 21, 2006 (the
“Rights
Agreement”),
between Schnitzer Steel Industries, Inc., an Oregon corporation (the
“Company”),
and
▇▇▇▇▇ Fargo Bank, N.A. (the “Rights
Agent”),
to
purchase from the Company at any time prior to 5:00 PM (New York City time)
on
March 21, 2016 (unless such date is extended prior thereto by the Board of
Directors) (the “Final
Expiration Date”),
at
the office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-thousandth of a fully paid, non-assessable
share of Series A Participating Preferred Stock, par value $1.00 per share
(“Series
A Preferred Stock”),
of
the Company, at a purchase price of One Hundred Ten Dollars ($110.00) per one
one-thousandth of a share (the “Purchase
Price”),
upon
presentation and surrender of this Class B Right Certificate with the Form
of Election to Purchase and related Certificate duly executed. Except as
otherwise provided in the Rights Agreement, the Purchase Price shall be paid
in
cash. The number of Class B Rights evidenced by this Class B Right
Certificate (and the number of fractional shares of Series A Preferred Stock
that may be purchased upon exercise thereof) set forth above, and
|
*
|
The
bracketed portion of the legend should be inserted only if
applicable.
|
the
Purchase Price per fractional share of Series A
Preferred Stock set forth above, are the number and Purchase Price as of April
4, 2006, based on the Series A Preferred Stock as constituted at such date.
The
Company reserves the right to require before the occurrence of a Triggering
Event (as such term is defined in the Rights Agreement) that a number of
Class B Rights be exercised so that only whole shares of Preferred Stock
will be issued.
Upon
the
occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights
Agreement), if the Class B Rights evidenced by this Class B Right
Certificate are beneficially owned by (i) an Acquiring Person or an Affiliate
or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Associate, or
Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person, such
Class B Rights shall become null and void and no holder hereof shall have
any right with respect to such Class B Rights from and after the occurrence
of any such Section 11(a)(ii) Event.
As
provided in the Rights Agreement, the Purchase Price, and the number and kind
of
shares of Series A Preferred Stock or other securities that may be purchased
upon the exercise of the Class B Rights evidenced by this Class B
Right 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
Class B Right 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 Company, and the holders of the Class B Right
Certificates, which limitations of rights include the temporary suspension
of
the exercisability of such Class B Rights under the specific circumstances
specified 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 Company.
This
Class B Right Certificate, with or without other Class B Right
Certificates, upon surrender at the principal office or offices of the Rights
Agent designated for such purpose, may be exchanged for another Class B
Right Certificate or Class B Right Certificates of like tenor and date
evidencing Class B Rights entitling the holder to purchase a like aggregate
number of shares of Series A Preferred Stock as the Class B Rights
evidenced by the Class B Right Certificate or Class B Right
Certificates surrendered shall have entitled such holder to purchase. If the
Class B Rights evidenced by this Class B Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof
another Class B Right Certificate or Class B Right Certificates for
the number of whole Class B Rights not exercised.
Subject
to the provisions of the Rights Agreement, the Class B Rights evidenced by
this Class B Right Certificate may be redeemed by the Company at its option
at a redemption price of $.001 per Class B Right at any time prior to the
earlier of (i) the time at which an Acquiring Person becomes such, or (ii)
the
Final Expiration Date. In addition, under certain circumstances following the
time any Acquiring Person becomes such, the Class B Rights may
be
exchanged, in whole or in part, for Class B Common Shares (as defined in
the Rights Agreement) or shares of Series A Preferred Stock (or equivalent
preferred shares). Immediately upon the action of the Board of Directors of
the
Company authorizing exchange or redemption of the Class B Rights, the
Class B Rights will no longer be exercisable, and thereafter the only right
of the holders of the Class B Rights evidenced hereby will be to receive
the securities issuable on exchange or the redemption price.
The
Rights Agreement may be supplemented or amended without the approval of any
holder of the Class B Rights (or the Class B Common Shares) as set
forth in the Rights Agreement.
No
fractional shares of Series A Preferred Stock will be issued upon the exercise
of any Class B Right or Class B Rights evidenced hereby (other than
fractions that are integral multiples of one one-thousandth of a share of Series
A Preferred Stock, which may, at the election of the Company, be evidenced
by
depositary receipts), but in lieu thereof a cash payment will be made as
provided in the Rights Agreement. The Company, at its election, may require
that
a number of Class B Rights be exercised so that only whole shares of
Preferred Stock would be issued.
No
holder
of this Class B Right Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Series A Preferred
Stock or of any other securities of the Company (including Class B Common
Shares) that 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 shareholder of the Company
or
any right to vote for the election of directors or upon any matter submitted
to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Class B Rights
evidenced by this Class B Right Certificate shall have been exercised as
provided in the Rights Agreement and its corporate seal.
This
Class B Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS
the facsimile signature of the proper officers of the Company and its corporate
seal.
Dated
as
of _______________, 200__.
|
Countersigned
|
|
|
▇▇▇▇▇
FARGO BANK, N.A.
By
Authorized
Signature
|
SCHNITZER
STEEL INDUSTRIES, INC.
By
Title:
|
|
[SEAL]
|
Attest:
By
Title:
[SEAL]
|
[FORM
OF
REVERSE SIDE OF CLASS B RIGHT CERTIFICATE]
FORM
OF ASSIGNMENT
(To
be
executed by the registered holder if such
holder
desires to transfer the Class B Right Certificate.)
FOR
VALUE
RECEIVED ______________________________________ hereby sells, assigns, or
transfers unto
(Please
print name and address of transferee)
this
Class B Right Certificate, together with all right, title, and interest
therein, and does hereby irrevocably constitute and appoint _________________
Attorney, to transfer the within Class B Right Certificate on the books of
the within-named Company, with full power of substitution.
| Dated: _____________, 200_ | _______________________________
Signature
|
Signature
Medallion Guaranteed:
Certificate
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1)
this
Class B Rights Certificate [ ] is
[ ] is not being sold, assigned or transferred by
or on behalf of a Person who is or was an Acquiring Person or an Affiliate
or
Associate of any such Acquiring Person (as such terms are defined pursuant
to the Rights Agreement);
(2)
after
due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not
acquire the Class B Rights evidenced by this Class B Right Certificate
from any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
| Dated: _____________, 200_ | _______________________________
Signature
|
Signature
Medallion Guaranteed:
NOTICE
The
signature(s) to the foregoing Assignment and Certificate must correspond to
the
name(s) as written upon the face of this Class B Right 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
Class B
Rights represented by the Class B Right Certificate.)
To:
Schnitzer Steel Industries, Inc.
The
undersigned hereby irrevocably elects to exercise ____________ Class B
Rights represented by this Class B Right Certificate to purchase the shares
of Series A Shares issuable upon the exercise of the Class B Rights (Common
Shares or such other securities of the Company or of any other person which
may
be issuable upon the exercise of the Class B Rights) and requests that
certificates for such shares be issued in the name of:
_______________________
Please
insert social security
or
other
identifying number: ________________
(Please
print name and address)
If
such
number of Class B Rights shall not be all the Class B Rights evidenced
by this Class B Right Certificate, a new Class B Right Certificate for
the balance of such Class B Rights shall be registered in the name of and
delivered to: _______________________
Please
insert social security
or
other
identifying number: ________________
(Please
print name and address)
| Dated: _____________, 200_ | _______________________________
Signature
|
Signature
Medallion Guaranteed:
CERTIFICATE
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1) the
Class B Rights evidenced by this Class B Right Certificate
[ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person
or
an Affiliate or Associate of any such Acquiring Person (as such terms are
defined pursuant to the Rights Agreement);
(2) after
due
inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not
acquire the Class B Rights evidenced by this Class B Right Certificate
from any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
| Dated: _____________, 200_ | _______________________________
Signature
|
Signature
Medallion Guaranteed:
NOTICE
The
signature(s) to the foregoing Election to Purchase and Certificate must
correspond to the name(s) as written upon the face of this Class B Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
EXHIBIT
D
SUMMARY
OF RIGHTS TO PURCHASE
SERIES
A
SHARES
On
March
21, 2006, the Board of Directors of Schnitzer Steel Industries, Inc. (the
“Company”)
declared a dividend distribution of one preferred share purchase right (a
“Class A
Right”)
for
each share of Class A Common Stock, par value $1.00 per share, of the
Company (a “Class A
Common Share”)
outstanding at the close of business on April 4, 2006 (the “Record
Date”)
and
one preferred share purchase right (a “Class B
Right”)
for
each share of Class B Common Stock, par value $1.00 per share, of the
Company (a “Class B
Common Share” and
together with the Class A Common Shares, the “Common
Shares”)
outstanding at the Record Date (the Class A Rights and Class B Rights
together the “Rights”).
Except
as set forth below, each Right entitles the registered holder to purchase from
the Company one one-thousandth of a share (a “Unit”)
of
Series A Participating Preferred Stock, par value $1.00 per share, of the
Company (“Series
A Preferred Shares”),
at a
price of $110.00 (the “Purchase
Price”),
subject to adjustment. The Purchase Price shall be paid in cash, or by certified
check or cashier’s check payable to the order of the Company. The description
and terms of the Rights are set forth in a Rights Agreement (the “Rights
Agreement”)
between the Company and ▇▇▇▇▇ Fargo Bank, N.A., as Rights Agent.
Initially,
no separate Right Certificates will be distributed. Until the earlier to occur
of (i) 10 days following (A) a public announcement that, or (B) such earlier
date as a majority of the Company’s Board of Directors has become aware that, a
person or group of affiliated or associated persons (an “Acquiring
Person”)
has
acquired, or obtained the right to acquire, beneficial ownership of Common
Shares representing either (x) 15% or more of the total number of votes entitled
to be cast by the holders of the Common Shares of the Company then outstanding
or (y) 15% or more of the total number of outstanding Common Shares of the
Company (the earlier of the dates referred to in (A) and (B) being referred
to
as the “Shares
Acquisition Date”)
or
(ii) 10 Business Days (or such later date as the Board of Directors may
determine) following the commencement of a tender offer or exchange offer if,
upon consummation thereof, such person or group would become an Acquiring Person
(the earlier of such dates being called the “Distribution
Date”),
the
Rights will be evidenced, with respect to any Common Shares outstanding on
and
after the Record Date, by the certificates representing such Common Shares.
Under the Rights Agreement, the Schnitzer Steel Industries, Inc. Voting Trust
(the “Voting
Trust”)
governed by the Schnitzer Steel Industries, Inc. 2001 Restated Voting Trust
and
Buy-Sell Agreement, dated as of March 26, 2001 (the “Voting
Trust Agreement”)
and any
trustees thereof in their capacity as such (each, a “Trustee”)
are
excluded from the definition of Acquiring Person. No person, other than the
Voting Trust and the Trustees in their capacity as Trustees, shall be deemed
to
beneficially own any Common Shares as a result of being a party to or bound
by
the Voting Trust Agreement. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with Common
Share certificates. As soon as practicable following the Distribution Date,
separate certificates evidencing the rights (“Right
Certificates”)
will
be mailed to holders of record of the Common Shares as of the close of business
on the Distribution Date and, thereafter, such separate Right Certificates
alone
will evidence the Rights.
The
Rights are not exercisable until the Distribution Date and will expire on March
21, 2016, unless such date is extended or the Rights are earlier redeemed or
exchanged by the Company as described below.
If
a
person (other than the Company and certain other entities) becomes an Acquiring
Person, each holder of a Class A Right will thereafter have the right to
receive, upon the exercise thereof at the Purchase Price, Class A Common
Shares of the Company and each holder of a Class B Right will thereafter
have the right to receive, upon the exercise thereof at the Purchase Price,
Class B Common Shares of the Company, or, in certain circumstances, cash,
property or other securities of the Company, in each case, having a value equal
to two times the Purchase Price. Notwithstanding any of the foregoing, following
the occurrence of the event set forth above, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person will be null and void.
If,
at
any time following the Shares Acquisition Date, (i) the Company engages in
a
merger or other business combination transaction in which the Company is not
the
surviving corporation, or in which the Company is the surviving corporation
but
in which its Common Shares are changed or exchanged, or (ii) more than 50%
of
the Company’s assets or earning power is sold or transferred, the Rights
Agreement provides that proper provision shall be made so that each holder
of a
Right (other than Rights that previously have been voided as set forth above)
shall thereafter have the right to receive, upon the exercise thereof at the
Purchase Price, common shares of the acquiring company having a value equal
to
two times the Purchase Price.
The
Purchase Price payable, and the number of Units of Series A Preferred Shares
or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a
dividend of Series A Preferred Shares on, or a subdivision, combination or
reclassification of, the Series A Preferred Shares, (ii) upon the grant to
holders of the Series A Preferred Shares of certain rights or warrants to
subscribe for Series A Preferred Shares or securities convertible into Series
A
Preferred Shares, or (iii) upon the distribution to holders of the Series A
Preferred Shares of debt securities or assets (excluding regular quarterly
cash
dividends and dividends payable in Series A Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
With
certain exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments require an adjustment of at least 1% in such Purchase
Price. No fractional shares that are not integral multiples of one
one-thousandth of a Series A Share will be issued and, in lieu thereof, an
adjustment in cash will be made based on the market price of the Series A
Preferred Shares on the last trading date prior to the date of
exercise.
At
any
time after the date of the Rights Agreement until the date on which an Acquiring
Person becomes such, the Board of Directors may redeem the Rights in whole,
but
not in part, at a price of $.001 per Right, subject to adjustments (the
“Redemption
Price”).
At
any
time after a person becomes an Acquiring Person, provided
that the
Acquiring Person beneficially owns not more than 50% of the outstanding Common
Shares, the Board of Directors may, at its option, exchange all or part of
the
then outstanding and exercisable
Rights
for Common Shares at an exchange ratio of one Class A Common Share per
Class A Right and one Class B Common Share per Class B Right,
respectively.
Until
a
Right is exercised, the holder thereof, as such, will have no rights as a
shareholder of the Company. While the distribution of the Rights will not be
taxable to shareholders or to the Company, shareholders may, depending on the
circumstances, recognize taxable income in the event that the Rights become
exercisable for Class A Common Shares, Class B Common Shares (or other
consideration) of the Company or for common stock of the acquiring company
or in
the event of the redemption of the Rights.
Any
of
the provisions of the Rights Agreement may be amended by the Board of Directors
at any time the Rights are redeemable. Thereafter, the Rights Agreement may
be
amended to cure any ambiguity, to correct defects and inconsistencies or to
make
changes that do not adversely affect the interests of holders of the Rights
(other than an Acquiring Person); provided
that no
supplement or amendment may cause the Rights Agreement to again become amendable
other than in accordance with this sentence or to cause the Rights to again
become redeemable.
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. A copy of the Rights
Agreement is available free of charge from the Company or 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.