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and Franklin Mutual Advisers, LLC (“FMA”), as agent
for each of the funds listed on a signature page thereto (each, a
“Supporting Stockholder” and collectively the “Supporting Stockholders”) (the
“Support Agreement”), which is filed as Exhibit 2 hereto, and
incorporated by reference herein.
Pursuant to the Merger Agreement, after the
consummation of the Offer, and subject to the satisfaction or waiver of
certain conditions set forth in the Merger Agreement, the Purchaser will
merge with and into the Company (the “Merger”) and the Company will become an
indirect wholly-owned subsidiary of Severstal. At the effective time of the
Merger, each issued and outstanding Share (other than those owned by the
Company, Severstal, the Purchaser or any other wholly-owned subsidiary of
Severstal, and those held by stockholders who have perfected their statutory
rights of appraisal under Section 262 of the Delaware General
Corporation Law) will be automatically converted into the right to receive
the Offer price in cash, without interest.
As a condition and inducement to Severstal’s
entering into the Merger Agreement, FMA, as agent for the Supporting
Stockholders, entered into the Support Agreement with Severstal. The Supporting Stockholders own an
aggregate of 23,740,689 Shares, representing 60.1% of the Shares outstanding
as of the close of business on June 25, 2008.
Pursuant to the
Support Agreement, each Supporting Stockholder has agreed to validly tender
or cause to be tendered in the Offer, within five business days after the
date of the Supplement, all of such Supporting Stockholder’s Shares in
accordance with the terms of the Offer and, once such Supporting
Stockholder’s Shares are tendered (i) to promptly notify Severstal that
such Shares have been tendered and (ii) not to withdraw any of such
Shares from the Offer, unless the Offer or the Support Agreement has been
terminated. Each Supporting Stockholder has also agreed at every meeting of
stockholders of the Company called, and at every adjournment or postponement
thereof, to vote, or cause to be voted, all their Shares as follows:
·
in favor of (A) approval and adoption of the Merger
Agreement and each of the other transactions contemplated by the Merger
Agreement, and (B) approval of any proposal to adjourn or postpone the
meeting to a later date if there are not sufficient votes for the approval
and adoption of the Merger Agreement on the date on which such meeting is
held;
·
against (A) any agreement or arrangement related to or
in furtherance of any third party acquisition proposal, (B) any
liquidation, dissolution, recapitalization, extraordinary dividend or other
significant corporate reorganization of the Company or any of its
subsidiaries, (C) any other transaction the consummation of which would
reasonably be expected to impede or materially delay the Offer or the Merger
or that would reasonably be expected to dilute materially the benefits to
Severstal of the transactions contemplated by the Merger Agreement, or (D) any
action that would reasonably be expected to result in (x) a breach of
any covenant, representation or warranty or other obligation or agreement of
the Company under the Merger Agreement or of such Supporting Stockholder
under the Support Agreement or (y) the failure of any Offer condition to
be satisfied; and in favor of any other matter necessary for consummation of
the transactions contemplated by the Merger Agreement.
In addition, each of
the Supporting Stockholders has agreed pursuant to the Support Agreement
that, unless the Support Agreement shall have been terminated in accordance
with its terms, such Supporting Stockholder shall not:
·
directly or indirectly, (i) create or permit to exist
any encumbrance on any Shares, (ii) transfer record or beneficial
ownership (or both) of any Shares or any interest therein or enter into any
contract with respect to any transfer of any Shares or any interest therein, (iii) grant
or permit the grant of any proxy, power of attorney or other authorization in
or with respect to any Shares, (iv) deposit or permit the deposit of any
Shares into a voting trust or enter into a voting agreement or arrangement
with respect to such Shares or (v) take or permit any other action that
would in any way restrict, limit or interfere with the performance of its
obligations under the Support Agreement or otherwise make any representation
or warranty of such Supporting Stockholder untrue or incorrect; or exercise
any appraisal rights or dissenter’s rights in respect of its Shares that may
arise with respect to the Merger.
The Support Agreement
contains customary representations and warranties by the Supporting
Stockholders, including representations and warranties as to ownership of
Shares and power and authority of each Supporting
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