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STANDSTILL AND GOVERNANCE AGREEMENT
CENTURY ALUMINUM COMPANY
dated as of July 7, 2008
TABLE OF CONTENTS
STANDSTILL AND GOVERNANCE AGREEMENT
STANDSTILL AND GOVERNANCE AGREEMENT dated as of July 7, 2008 between Century Aluminum Company, a Delaware corporation (the “ Company ”), and Glencore AG, a Swiss corporation (“ Glencore ”).
WHEREAS, the Company and Glencore Investment Pty Ltd (“Glencore Investment”), an affiliate of Glencore, concurrently herewith are entering into a Stock Purchase Agreement (the “ Stock Purchase Agreement ”), pursuant to which the Company will sell, upon the closing thereof (the “ Closing ”) to Glencore Investment and Glencore Investment will purchase (the “ Purchase ”) newly-issued shares of the Company’s Series A Preferred Stock, par value $0.01 per share (the “ Series A Preferred Shares ”);
WHEREAS, upon the consummation of the Closing, Glencore will Beneficially Own 11,706,307 shares of the outstanding Company Common Stock which will constitute approximately twenty-eight and one-half percent (28.5%) of the outstanding Company Common Stock; and
WHEREAS, the parties hereto desire to enter into this Agreement to establish certain arrangements with respect to the Company Common Stock and other Equity Securities to be Beneficially Owned by Glencore and its Affiliates following the Closing or upon conversion of the Series A Preferred Shares, as well as restrictions on certain activities in respect of the Company Common Stock, corporate governance and other related corporate matters.
NOW, THEREFORE, in consideration of the premises and of the mutual covenants and obligations hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1.1 Certain Defined Terms . As used herein, the following terms shall have the following meanings:
“ Affiliate ” means, with respect to any Person, any other Person that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with, such specified Person; provided , however , that solely for purposes of this Agreement, notwithstanding anything to the contrary set forth herein, neither the Company nor any of its Subsidiaries shall be deemed to be a Subsidiary or Affiliate of Glencore solely by virtue of Glencore’s ownership of the Series A Preferred Stock or Common Stock or any other action taken by Glencore or its Affiliates which is permitted under this Agreement, in each case in accordance with the terms and conditions of, and subject to the limitations and restrictions set forth in, this Agreement (and irrespective of the characteristics of the aforesaid relationships and actions under applicable law or accounting principles).
“ Agreement ” means this Standstill and Governance Agreement as it may be amended, supplemented, restated or modified from time to time.
“ Beneficial Ownership ” by a Person of any securities means that such Person has or shares, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, (i) voting power, which means the power to vote, or to direct the voting of, such security; and/or (ii) investment power, which means the power to dispose, or to direct the disposition of, such security; and shall otherwise be interpreted in accordance with the term “beneficial ownership” as defined in Rule 13d-3 adopted by the Commission under the Exchange Act; provided that for purposes of determining Beneficial Ownership, a Person shall be deemed to be the Beneficial Owner of any securities which may be acquired by such Person (irrespective of whether the right to acquire such securities is exercisable’ immediately or only after the passage of time, including the passage of time in excess of 60 days, the satisfaction of any conditions, the occurrence of any event or any combination of the foregoing) pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise. For purposes of this Agreement, a Person shall be deemed to Beneficially Own any securities Beneficially Owned by its Affiliates or any Group of which such Person or any such Affiliate is a member.
“ Board ” means the Board of Directors of the Company.
“ Business Combination Proposal ” means any proposal with respect to a merger, combination or consolidation in which the Company is a constituent corporation or a sale, lease, exchange or mortgage of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole and pursuant to any of which transactions all of the Company Common Stock (other than those, if any, which are Beneficially Owned by Glencore) would be exchanged for cash, securities or other property, or a tender or exchange offer for less than all of the outstanding Company Common Stock not Beneficially Owned by Glencore.
“ Business Day ” shall mean any day that is not a Saturday, a Sunday or other day on which banks are required or authorized by law to be closed in San Francisco, California or New York, New York.
“ By-Laws ” means the By-Laws of the Company, as amended or supplemented from time to time.
“ Capital Stock ” means, with respect to any Person at any time, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) of capital stock, partnership interests (whether general or limited) or equivalent ownership interests in or issued by such Person.
“ Certificate of Designation ” means the Certificate of Designation for the Series A Preferred Stock, the form of which is set forth in Exhibit A to the Stock Purchase Agreement, as amended or supplemented from time to time.
“ Change of Control ” means (i) any Person becomes the Beneficial Owner of more than 50% of the total voting power of the outstanding Voting Securities of the Company, (ii) during any period of two consecutive years, individuals who were either Independent Directors at the beginning of such period or whose election or nomination for election was approved by at least a majority of the Directors who were Independent Directors at the beginning of such period or who
subsequently became Independent Directors and whose election or nomination for election was approved by at least a majority of Independent Directors, cease for any reason to constitute a majority of the Independent Directors of the Company then in office, (iii) a merger or consolidation of the Company with or into another Person or the merger or consolidation of another Person into the Company, as a result of which transaction or series of related transactions (A) any Person becomes the Beneficial Owner of more than 50% of the total voting power of all Voting Securities of the Company (or, if the Company is not the surviving or transferee company of such transaction or transactions, of such surviving or transferee company) outstanding immediately after such transaction or transactions, or (B) the shares of Company Common Stock outstanding immediately prior to such transaction or transactions do not represent a majority of the voting power of all Voting Securities of the Company (or such surviving or transferee company, if not the Company) outstanding immediately after such transaction or transactions, (iv) the sale, lease, exchange or mortgage of all or substantially all of the assets of the Company and its Subsidiaries, or (v) the approval by the stockholders of the Company of a plan of liquidation or dissolution of the Company.
“ Commission ” means the United States Securities and Exchange Commission.
“ Company Common Stock ” means the common stock, par value $0.01 per share, of the Company and any securities issued in exchange or substitution therefor, including in any reclassification, recapitalization, merger, consolidation, exchange or other similar reorganization.
“ control ” (including the terms “ controlled by ” and “ under common control with ”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of a Person, whether through the ownership of voting securities or by contract or any other means.
“ Director ” means any member of the Board (other than any advisory, honorary or other non-voting member of the Board).
“ Equity Securities ” means any and all shares of Capital Stock of the Company, securities of the Company convertible into, or exchangeable for, such shares, and options, warrants or other rights to acquire such shares (regardless of whether such securities, options, warrants or other rights are then exercisable or convertible).
“ Exchange Act ” means the Securities Exchange Act of 1934, as amended (or any successor statute).
“ Group ” shall have the meaning assigned to it in Section 13(d)(3) of the Exchange Act.
“ Independent Director ” means (except as set forth in the proviso hereto) any Director who is not an Affiliate or a past or present officer, director or employee of, and was not nominated by, Glencore or any of its Affiliates, and is not associated with an entity that performs substantial services for any of the foregoing; provided that, solely when used with respect to any action to be taken by the Board relating to a transaction or proposed transaction with, or otherwise relating to any other holder of 10% or more of the outstanding Company Common Stock (or 10% or more of any other class of Voting Securities of the Company), the term
Independent Director shall mean any director who is not an Affiliate or a past or present officer, director or employee of, and was not nominated by, such stockholder (or other securityholder) or any of its Affiliates, and is not associated with an entity that performs substantial services for any of the foregoing.
“ Independent Investment Banking Firm ” means an investment banking firm of nationally recognized standing that is, in the reasonable judgment of the Person or Persons engaging such firm, independent of such Person or Persons and qualified to perform the task for which it has been engaged.
“ Ownership Percentage ” means, at any time, the ratio, expressed as a percentage, (i) of the total Equity Securities Beneficially Owned by Glencore and its Affiliates (excluding the Series A Preferred Shares) to (ii) the sum of (x) the total number of outstanding Company Common Stock and (y) any Company Common Stock that is issuable upon conversion, exchange or exercise of any Equity Securities included in clause (i).
“ Permitted Ownership Percentage ” means, immediately following the Closing and until April 7, 2009, an Ownership Percentage of twenty-eight and one-half percent (28.5%), and for the period of time from April 8, 2009 to January 7, 2010, an Ownership Percentage of forty-nine percent (49%).
“ Person ” means any individual, corporation, limited liability company, limited or general partnership, joint venture, association, joint-stock company, trust, unincorporated organization, other entity, government or any agency or political subdivision thereof or any Group comprised of two or more of the foregoing.
“ Qualifying Rights Plan ” means (i) a stockholders’ rights plan which (x) is triggered upon the acquisition of Beneficial Ownership of the Equity Securities of the Company representing 20% or more of the Voting Securities of the Company and would result in such Beneficial Ownership being materially and adversely economically diluted on terms substantially consistent with market practice, (y) does not contain exceptions from the definitions of “Acquiring Person”, “Triggering Event” or simila