(Mark One) | ||
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the fiscal year ended August 31, 2009 | ||
or
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
|
For the transition period from to |
Delaware
(State or other jurisdiction of incorporation or organization) |
75-0725338
(I.R.S. Employer Identification No.) |
|
6565 MacArthur Blvd,
Irving, TX (Address of principal executive offices) |
75039
(Zip Code) |
Title of Each Class
|
Name of Each Exchange on Which Registered
|
|
Common Stock, $0.01 par value
|
New York Stock Exchange |
Large accelerated filer þ | Accelerated filer o | Non-accelerated filer o | Smaller reporting company o |
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
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5 steel mills, commonly referred to as minimills or in the case of the Arizona mill
a micro mill that produce one or more of reinforcing bar, angles, flats, rounds, small
beams, fence-post sections and other shapes;
a copper tube minimill; and
one scrap metal shredder processing facility that directly supports the adjoining steel minimill.
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2009
2008
2007
1,599,000
2,396,000
2,121,000
1,478,000
2,101,000
1,957,000
1,736,000
2,528,000
2,250,000
melt shop with electric arc furnace that melts ferrous scrap metal;
continuous casting equipment that shape the molten metal into billets;
reheating furnace that prepares billets for rolling;
rolling mill that forms products from heated billets;
mechanical cooling bed that receives hot product from the rolling mill;
finishing facilities that cut, straighten, bundle and prepare products for shipping; and
supporting facilities such as maintenance, warehouse and office areas.
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steel plants that bend, cut, weld and fabricate steel, primarily reinforcing bar and angles;
warehouses that sell or rent products for the installation of concrete;
plants that produce special sections for floors and ceiling support;
plants that produce steel fence posts; and
plants that treat steel with heat to strengthen and provide flexibility.
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create liens;
enter into transactions with affiliates;
sell assets;
in the case of some of our subsidiaries, guarantee debt; and
consolidate or merge.
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political, military, terrorist or major pandemic events;
legal and regulatory requirements or limitations imposed by foreign governments
(particularly those with significant steel consumption or steel related production
including China, Brazil, Russia and India) including quotas, tariffs or other protectionist
trade barriers, adverse tax law changes, nationalization or currency restrictions;
disruptions or delays in shipments caused by customs compliance or government agencies;
and
potential difficulties in staffing and managing local operations.
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21
22
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
(c) Total
(d) Maximum
Number of
Number (or Approximate
Shares (or Units)
Dollar Value) of
Purchased
Shares (or Units) that
As Part of
May Yet Be
Publicly
Purchased
(a) Total Number of
(b) Average
Announced
Under the
Shares (or Units)
Price Paid
Plans or
Plans or
Period
Purchased
Per Share (or Unit)
Programs
Programs (1)
1,866
$
15.59
8,259,647
(1)
4,500
$
17.29
8,259,647
(1)
18,158
$
17.49
8,259,647
(1)
24,524
$
17.31
8,259,647
(1)
(1)
Shares available to be purchased under the Companys Share Repurchase Program publically
announced October 31, 2008.
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OF COMMON STOCK
2009
FISCAL
QUARTER
HIGH
LOW
CASH DIVIDENDS
$
25.76
$
6.25
12 cents
14.37
8.50
12 cents
17.53
8.83
12 cents
18.54
13.18
12 cents
2008
FISCAL
QUARTER
HIGH
LOW
CASH DIVIDENDS
$
35.89
$
27.18
9 cents
33.35
20.85
12 cents
36.98
27.13
12 cents
39.80
24.63
12 cents
A.
B.
C.
NUMBER OF SECURITIES
REMAINING AVAILABLE FOR FUTURE
NUMBER OF SECURITIES
ISSUANCE UNDER EQUITY
TO BE ISSUED
WEIGHTED-AVERAGE
COMPENSATION PLANS
UPON EXERCISE OF
EXERCISE PRICE OF
(EXCLUDING SECURITIES
OUTSTANDING OPTIONS,
OUTSTANDING OPTIONS,
REFLECTED IN COLUMN
PLAN CATEGORY
WARRANTS AND RIGHTS
WARRANTS AND RIGHTS
(A))
5,427,552
$
21.36
2,459,893
5,427,552
$
21.36
2,459,893
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Among
Commercial Metals Company, The S&P 500 Index
And The S&P Steel Index
8/04
8/05
8/06
8/07
8/08
8/09
100.00
172.69
251.09
340.03
310.78
209.08
100.00
112.56
122.56
141.11
125.38
102.50
100.00
130.83
224.53
310.76
313.15
185.82
23
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(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
2009
2008
2007
2006
2005
$
6,793,396
$
10,427,378
$
8,329,016
$
7,212,152
$
6,260,338
20,802
231,966
355,431
356,347
285,781
0.18
1.97
2.92
2.89
2.32
3,687,556
4,746,371
3,472,663
2,898,868
2,332,922
1,529,693
1,638,383
1,548,567
1,220,104
899,561
1,181,740
1,197,533
706,817
322,086
386,741
0.48
0.45
0.33
0.17
0.12
1.20
4.78
11.16
14.80
12.43
*
Excludes the net sales of a division classified as discontinued operations.
absence of global economic recovery or possible recession relapse;
solvency of financial institutions and their ability or willingness to lend;
success or failure of governmental efforts to stimulate the economy including restoring
credit availability and confidence in a recovery;
customer non-compliance with contracts;
construction activity;
decisions by governments affecting the level of steel imports, including tariffs and
duties;
ability to integrate acquisitions into operations;
litigation claims and settlements;
difficulties or delays in the execution of construction contracts resulting in cost
overruns or contract disputes;
unsuccessful implementation of new technology;
metals pricing over which we exert little influence;
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increased capacity and product availability from competing steel minimills and other
steel suppliers including import quantities and pricing;
execution of cost minimization strategies;
court decisions;
industry consolidation or changes in production capacity or utilization;
global factors including political and military uncertainties;
currency fluctuations;
interest rate changes;
scrap metal, energy, insurance and supply prices; and
the pace of overall economic activity, particularly in China.
steel mills, commonly referred to as minimills, that produce reinforcing bar, angles,
flats, rounds, fence post sections and other shapes; and
a copper tube minimill. Our copper tube minimill is aggregated with the Companys steel
minimills because it has similar economic characteristics.
steel fabrication and processing plants that bend, weld, cut, fabricate, distribute and
place steel, primarily reinforcing bar and angles;
warehouses that sell or rent products for the installation of concrete;
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plants that produce special sections for floors and support for ceilings and floors;
plants that produce steel fence posts; and
plants that treat steel with heat to strengthen and provide flexibility.
a rolling mill that produces primarily reinforcing bar and high quality merchant
products;
a rolling mill that produces primarily wire rod;
our scrap processing facilities that directly support the CMCZ minimill; and
an electric arc furnace based steel pipe manufacturer.
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Year ended August 31,
(in millions except share data)
2009
2008
2007
$
6,793
$
10,427
$
8,329
20.8
232.0
355.4
0.18
1.97
2.92
275.2
531.4
671.0
2,978
4,937
3,397
44
%
47
%
41
%
(208.4
)
209.1
33.3
(1.83
)
1.78
0.27
*
Excludes the net sales of a division classified as discontinued operations.
**
Last in, first out inventory valuation method.
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(in millions)
2009
2008
2007
$
20.8
$
232.0
$
355.4
77.6
59.5
37.3
13.7
104.8
171.0
163.1
135.1
107.3
$
275.2
$
531.4
$
671.0
2.8
3.2
(3.3
)
$
272.4
$
528.2
$
674.3
*
Includes asset impairment charges.
1.
Overall, net sales decreased 35% due to a significant reduction in prices and volume.
2.
In response to price declines, demand destruction, and a global liquidity crisis, we
recorded the following consolidated expenses during 2009: lower of cost or market inventory
adjustments of $127.1 million, other charges relating to contractual noncompliance of $19.3
million, bad debt expense of $33.7 million and severance costs of $12.5 million.
3.
We recorded after-tax LIFO income of $208.4 ($1.83 per diluted share) compared to LIFO
expense of $209.1 million ($1.78 per diluted share) in 2008.
4.
Net sales of the Americas Recycling segment decreased significantly during 2009 as a
result of weak demand causing a decline in both prices and shipments as well as an adjusted
operating loss of $89.6 million.
5.
Net sales of the Americas Mills segment decreased 36% from 2009 due to the decrease in
the average selling price and a decline in shipments, while adjusted operating profit
increased 27% from 2008 due mainly to pre-tax LIFO income.
6.
Our Americas Fabrication and Distribution segment showed a 12% decrease in sales
primarily from a decline in shipments but achieved a $179.4 million increase in adjusted
operating profit (loss) over 2008 attributable to pre-tax LIFO income of $125.2 million and
margin expansion from the deflation in material costs.
7.
Our International Mills segment reported a decline in net sales and adjusted operating
profit (loss) compared to 2008 due primarily from rapidly falling sales prices within weak
international steel markets, metal margin compression, mill start-up costs and lower of
cost or market inventory adjustments.
8.
Our International Fabrication and Distribution segment incurred an adjusted operating
loss of $4.3 million due primarily from reductions in market demand and inventory
valuations adjustments caused by declining prices.
9.
Significant construction projects in 2009, which are as follows: caster upgrades at
CMCS which were completed in August 2009, micro mill in Arizona with a start-up date of
September 2009, new flexible
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section mill in CMCZ with expected completion in January 2010 and melt shop upgrades at CMCS
with expected completion in February 2010.
10.
Expense of $49.1 million and capital expenditures of $29.8 million were recorded during
2009 as compared to expense of $53.7 million and capital expenditures of $49.9 million
recorded during 2008 related to the global implementation of SAP. At August 31, 2009, we
successfully ended the project phase of our deployment of SAP, returned significant
personnel resources back to our operating units, and combined SAP expertise with our IT
organization. We will continue the deployment of SAP on a more measured pace and enhance
our supply chain management benefits by optimizing the use of the system. As a result, SAP
will no longer be reported as a separate project.
11.
We finished winding down the operations of our discontinued operation in 2009 resulting
in a slight gain.
Year ended August 31,
(in millions)
2009
2008
2007
$
785
$
2,189
$
1,801
1,253
1,966
1,540
2,528
2,875
2,587
682
1,156
777
2,516
3,781
2,762
(11
)
(2
)
11
(960
)
(1,538
)
(1,149
)
(89.6
)
145.8
113.0
263.4
207.8
259.4
111.6
(67.5
)
100.0
(77.4
)
96.8
112.4
(4.3
)
124.3
73.7
(94.8
)
(99.5
)
(72.0
)
7.5
0.1
(7.6
)
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Three Months Ended
Twelve Months Ended
August 31,
August 31,
(in thousands)
2009
2008
2009
2008
$
(8,253
)
$
5,094
$
27,049
$
(16,894
)
(8,713
)
(40,152
)
135,541
(109,809
)
52,007
(100,945
)
125,152
(197,435
)
2,478
(3,893
)
32,853
2,398
$
37,519
$
(139,896
)
$
320,595
$
(321,740
)
*
LIFO income or (expense) includes a division classified as discontinued operations.
Decrease
2009
2008
Amount
%
$
181
$
346
$
(165
)
(48
%)
$
1,824
$
3,037
$
(1,213
)
(40
%)
1,817
3,053
(1,236
)
(40
%)
203
305
(102
)
(33
%)
2,033
3,391
(1,358
)
(40
%)
Increase (Decrease)
2009
2008
Amount
%
$
662
$
723
$
(61
)
(8
%)
642
691
(49
)
(7
%)
254
350
(96
)
(27
%)
388
341
47
14
%
195
329
(134
)
(41
)%
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Decrease
2009
2008
Amount
%
1,599
2,396
(797
)
(33
%)
1,478
2,101
(623
)
(30
%)
1,736
2,528
(792
)
(31
%)
Decrease
(pounds in millions)
2009
2008
Amount
%
48.2
52.3
(4.1
)
(8
%)
45.5
46.8
(1.3
)
(3
%)
$
2.90
$
4.34
$
(1.44
)
(33
%)
$
1.89
$
3.22
$
(1.33
)
(41
%)
$
1.01
$
1.12
$
(0.11
)
(10
%)
$
2.07
$
3.38
$
(1.31
)
(39
%)
Increase
Average selling price*
2009
2008
Amount
%
$
980
$
909
$
71
8
%
1,464
1,309
155
12
%
3,037
2,697
340
13
%
956
834
122
15
%
1,524
1,324
200
15
%
* Excludes stock and buyout sales.
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Decrease
Tons shipped (in thousands)
2009
2008
Amount
%
1,010
1,061
(51
)
(5
%)
153
244
(91
)
(37
%)
70
90
(20
)
(22
%)
69
106
(37
)
(35
%)
122
225
(103
)
(46
%)
Decrease
2009
2008
Amount
%
1,269
1,502
(233
)
(16
%)
997
1,100
(103
)
(9
%)
1,258
1,434
(176
)
(12
%)
1,351
PLN
1,698
PLN
(347
) PLN
(20
%)
785
PLN
1,039
PLN
(254
) PLN
(24
%)
566
PLN
659
PLN
(93
) PLN
(14
%)
613
PLN
905
PLN
(292
) PLN
(32
%)
$
457
$
744
$
(287
)
(39
%)
$
255
$
441
$
(186
)
(42
%)
$
202
$
303
$
(101
)
(33
%)
$
202
$
396
$
(194
)
(49
%)
PLN - Polish zlotys
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Increase (Decrease)
2008
2007
Amount
%
$
346
$
222
$
124
56
%
$
3,037
$
2,920
$
117
4
%
3,053
2,842
211
7
%
305
350
(45
)
(13
%)
3,391
3,220
171
5
%
Increase
2008
2007
Amount
%
$
723
$
587
$
136
23
%
691
566
125
22
%
350
233
117
50
%
341
333
8
2
%
329
211
118
56
%
Increase
2008
2007
Amount
%
2,396
2,121
275
13
%
2,101
1,957
144
7
%
2,528
2,250
278
12
%
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Increase (Decrease)
(pounds in millions)
2008
2007
Amount
%
52.3
52.5
(0.2
)
46.8
50.4
(3.6
)
(7
%)
$
4.34
$
4.06
$
0.28
7
%
$
3.22
$
2.99
$
0.23
8
%
$
1.12
$
1.07
$
0.05
5
%
$
3.38
$
3.09
$
0.29
9
%
Increase
Average selling price*
2008
2007
Amount
%
$
909
$
831
$
78
9
%
1,309
1,184
125
11
%
2,697
2,364
333
14
%
834
720
114
16
%
1,324
N/A
**
N/A
N/A
*
Excludes stock and buyout sales.
**
Average sales price not presented as deck operation represents minimal activity during 2007.
Increase (Decrease)
Tons shipped (in thousands)
2008
2007
Amount
%
1,061
1,014
47
5
%
244
340
(96
)
(28
%)
90
84
6
7
%
106
103
3
3
%
225
54
171
317
%
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Increase (Decrease)
2008
2007
Amount
%
1,502
1,458
44
3
%
1,100
1,130
(30
)
(3
%)
1,434
1,366
68
5
%
1,698
PLN
1,575
PLN
123
8
%
1,039
PLN
876
PLN
163
19
%
659
PLN
699
PLN
(40
)
(6
%)
905
PLN
780
PLN
125
16
%
$
744
$
542
$
202
37
%
$
441
$
302
$
139
46
%
$
303
$
240
$
63
26
%
$
396
$
268
$
128
48
%
PLN - Polish zlotys
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Total Facility
Availability
$
405,603
$
N/A
806,536
N/A
400,000
372,100
100,000
100,000
198,746
105,049
1,082,170
808,037
1,204,945
**
**
As required
9,597
*
The commercial paper program is supported by our $400 million unsecured revolving credit
agreement. The availability under the revolving credit agreement is reduced by $27.9 million
of stand-by letters of credit issued as of August 31, 2009. The revolving credit agreement
matures on May 23, 2010 and the Company intends to renegotiate and extend the facility during
fiscal year 2010.
**
With our investment grade credit ratings we believe we have access to additional financing
and refinancing, if needed.
decreased accounts receivable decreased sales and prices during 2009;
decreased inventories decreased inventory on hand and lower inventory costs; and
decreased accounts payable and accrued expenses more cash being used during 2009 as
current liabilities increased at the end of 2008 as a result of higher volume. Lower
volume in 2009 led to less purchasing of material and reduced accounts payable.
Additionally, accrued expenses were reduced as a result of minimal amounts accrued for
bonus and profit sharing during 2009.
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Payments Due By Period*
Less than
More than
Contractual Obligations:
Total
1 Year
1-3 Years
3-5 Years
5 Years
$
1,214,542
$
32,802
$
59,310
$
222,381
$
900,049
1,759
1,759
594,038
79,787
154,288
139,741
220,222
172,235
40,930
62,866
37,607
30,832
904,765
751,956
81,396
50,362
21,051
$
2,887,339
$
907,234
$
357,860
$
450,091
$
1,172,154
*
We have not discounted the cash obligations in this table.
(1)
Total amounts are included in the August 31, 2009 consolidated balance sheet. See Note 6,
Credit Arrangements, to the consolidated financial statements.
(2)
Interest payments related to our short-term debt are not included in the table as they do not
represent a significant obligation as of August 31, 2009.
(3)
Includes minimum lease payment obligations for non-cancelable equipment and real-estate
leases in effect as of August 31, 2009. See Note 12, Commitments and Contingencies, to the
consolidated financial statements.
(4)
Approximately 79% of these purchase obligations are for inventory items to be sold in the
ordinary course of business. Purchase obligations include all enforceable, legally binding
agreements to purchase goods or services that specify all significant terms, regardless of the
duration of the agreement. Agreements with variable terms are excluded because we are unable
to estimate the minimum amounts. Another significant obligation relates to capital
expenditures.
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Functional Currency
Foreign Currency
U.S.
Amount
Amount
Range of
Equivalent
Type
(in thousands)
Type
(in thousands)
Hedge Rates*
(in thousands)
176
EUR
101
0.57 0.59
$
144
40
GBP
20
0.50
33
158,312
USD
128,766
0.51 0.84
128,766
359
USD
513
1.43
513
4,106
EUR
4,775
0.85 0.88
6,726
1,319
USD
2,177
1.64 1.65
2,177
42,567
EUR
5,620
7.15 7.76
8,096
41,686
USD
7,243
5.15 5.81
7,243
363,033
EUR
91,748
3.80 4.57
124,249
232,148
USD
76,908
2.85 3.31
76,908
2,314
USD
1,600
1.45
1,600
5,618
EUR
3,945
1.38 1.43
5,618
23,676
GBP
14,490
1.63
23,676
1,833
JPY
174,755
94.62 99.60
1,833
686
PLN
2,063
2.87 3.22
686
$
388,268
*
Substantially all foreign currency exchange contracts mature within one year. The range of
hedge rates represents functional to foreign currency conversion rates.
**
Singapore dollar
Range or
Total Contract
Amount of
Value at
Long/
# of
Standard
Total
Hedge Rates
Inception
Terminal Exchange
Metal
Short
Lots
Lot Size
Weight
Per MT/lb.
(in thousands)
Aluminum
Long
229
25
MT
5,725
MT
$
1,920.00 2,340.00
$
12,460
Aluminum
Short
6
25
MT
150
MT
5,067.50 5,098.50
762
Copper
Long
47
25
MT
1,175
MT
6,251.00 6,475.42
7,462
Copper
Short
38
25
MT
950
MT
4,899.50 6,402.00
5,347
Zinc
Long
2
25
MT
50
MT
1,900.75 1,948.00
70
Copper
Long
134
25,000
lbs.
3,350,000
lbs.
170.00 292.00
8,533
Copper
Short
588
25,000
lbs.
14,700,000
lbs.
195.70 298.45
38,039
Natural Gas
Long
7
10,000
MMBtu
70,000
MMBtu
3.95 4.90
322
$
72,995
MT = Metric Ton
MMBtu = One million British thermal units
Table of Contents
Table of Contents
Commercial Metals Company
Irving, Texas
Dallas, Texas
October 30, 2009
Table of Contents
Commercial Metals Company
Irving, Texas
Dallas, Texas
October 30, 2009
Table of Contents
CONSOLIDATED STATEMENTS OF EARNINGS
Year ended August 31,
(in thousands, except share data)
2009
2008
2007
$
6,793,396
$
10,427,378
$
8,329,016
6,013,335
9,325,724
7,167,989
671,202
707,786
583,810
76,998
58,263
36,334
6,761,535
10,091,773
7,788,133
31,861
335,605
540,883
12,734
103,886
172,769
19,127
231,719
368,114
(550
)
538
9,587
19,677
231,181
358,527
2,064
1,706
(4,827
)
939
921
(1,731
)
1,125
785
(3,096
)
$
20,802
$
231,966
$
355,431
$
0.18
$
2.01
$
3.04
0.01
0.01
(0.03
)
$
0.19
$
2.02
$
3.01
$
0.17
$
1.96
$
2.95
0.01
0.01
(0.03
)
$
0.18
$
1.97
$
2.92
Table of Contents
CONSOLIDATED BALANCE SHEETS
August 31,
(in thousands, except share data)
2009
2008
$
405,603
$
219,026
731,282
1,369,453
678,541
1,400,332
182,126
228,632
1,997,552
3,217,443
87,530
84,539
502,031
462,186
1,395,104
1,292,832
380,185
256,156
2,364,850
2,095,713
(1,013,461
)
(941,391
)
1,351,389
1,154,322
74,236
84,837
264,379
289,769
$
3,687,556
$
4,746,371
August 31,
(in thousands, except share data)
2009
2008
$
344,355
$
838,777
109,210
192,492
327,212
563,424
156
1,759
31,305
32,802
106,327
815,338
1,732,481
44,564
50,160
113,850
124,171
1,181,740
1,197,533
2,155,492
3,104,345
2,371
3,643
1,290
1,290
380,737
371,913
34,257
112,781
1,438,205
1,471,542
1,854,489
1,957,526
(324,796
)
(319,143
)
1,529,693
1,638,383
$
3,687,556
$
4,746,371
Table of Contents
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended August 31,
(in thousands)
2009
2008
2007
$
20,802
$
231,966
$
355,431
154,679
135,069
107,305
(550
)
538
9,587
33,733
4,478
(370
)
17,475
18,996
12,499
2,795
749
474
127,056
8,468
1,004
3,400
692,386
(287,052
)
(39,695
)
(129,227
)
45,348
115,672
533,896
(414,556
)
(10,381
)
93,257
(177,510
)
(89,332
)
(691,912
)
395,987
(22,179
)
(49,066
)
(4,379
)
(10,603
)
(7,256
)
5,906
29,482
806,536
(43,456
)
461,290
(369,694
)
(355,041
)
(206,262
)
(6
)
(169
)
(62,104
)
2,620
1,791
1,470
(900
)
(228,422
)
(164,017
)
(367,980
)
(581,841
)
(430,913
)
(83,282
)
39,061
11,718
(26,244
)
(1,427
)
(62,088
)
(132,496
)
(6,053
)
(72,282
)
64,014
596,669
400,504
3,284
8,910
10,849
(18,514
)
(172,312
)
(59,169
)
(54,139
)
(52,061
)
(39,254
)
926
10,982
16,894
(246,451
)
423,769
207,172
(5,528
)
1,279
1,007
186,577
(200,249
)
238,556
219,026
419,275
180,719
$
405,603
$
219,026
$
419,275
Table of Contents
CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
Accumulated
Common Stock
Additional
Other
Treasury Stock
Number of
Paid-In
Comprehensive
Retained
Number of
(in thousands, except share data)
Shares
Amount
Capital
Income (Loss)
Earnings
Shares
Amount
Total
129,060,664
$
1,290
$
346,994
$
33,239
$
980,454
(11,179,504
)
$
(141,873
)
$
1,220,104
355,431
355,431
24,892
24,892
7,074
7,074
(753
)
(753
)
386,644
(39,254
)
(39,254
)
(2,116,975
)
(59,169
)
(59,169
)
(16,593
)
2,603,880
27,442
10,849
(2,876
)
206,482
2,876
12,564
(8,166
)
(65
)
12,499
16,894
16,894
129,060,664
$
1,290
$
356,983
$
64,452
$
1,296,631
(10,494,283
)
$
(170,789
)
$
1,548,567
(4,994
)
(4,994
)
231,966
231,966
57,245
57,245
(7,866
)
(7,866
)
(1,050
)
(1,050
)
280,295
(52,061
)
(52,061
)
(6,212,238
)
(172,312
)
(172,312
)
(11,921
)
1,277,417
20,831
8,910
(3,315
)
163,770
3,315
19,184
(18,178
)
(188
)
18,996
10,982
10,982
129,060,664
$
1,290
$
371,913
$
112,781
$
1,471,542
(15,283,512
)
$
(319,143
)
$
1,638,383
20,802
20,802
(89,110
)
(89,110
)
11,034
11,034
(448
)
(448
)
(57,722
)
(54,139
)
(54,139
)
(1,752,900
)
(18,514
)
(18,514
)
(9,776
)
561,800
13,060
3,284
17,674
(12,619
)
(199
)
17,475
926
926
129,060,664
$
1,290
$
380,737
$
34,257
$
1,438,205
(16,487,231
)
$
(324,796
)
$
1,529,693
Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7 to 40 years
3 to 25 years
3 to 15 years
2 to 25 years
Table of Contents
2009
2008
Gross
Gross
Carrying
Accumulated
Carrying
Accumulated
(in thousands)
Amount
Amortization
Net
Amount
Amortization
Net
$
66,227
$
14,107
$
52,120
$
55,271
$
5,036
$
50,235
11,200
6,016
5,184
12,371
4,343
8,028
5,880
380
5,500
7,325
388
6,937
5,214
4,637
577
5,467
229
5,238
3,198
3,198
2,815
1,023
1,792
1,596
296
1,300
553
134
419
$
93,315
$
28,634
$
64,681
$
83,802
$
11,153
$
72,649
Year
(in thousands)
$
11,991
11,170
9,609
7,903
7,864
Table of Contents
2009
2008
2007
1.24
%
2.93
%
4.98
%
3.88
years
4.38
years
4.58
years
60
%
43
%
34
%
1.1
%
1.1
%
1.1
%
2009
1.37
%
2.64
years
69
%
2.9
%
Table of Contents
(in thousands)
2009
2008
$
31,557
$
120,667
4,951
(6,083
)
(2,251
)
(1,803
)
$
34,257
$
112,781
Table of Contents
On September 19, 2007, the Company acquired all of the outstanding shares of Valjaonica
Cijevi Sisak (VCS) from the Croatian Privatization Fund and Croatian government. VCSs
name has been changed to CMC Sisak d.o.o. (CMCS). CMCS is an electric arc furnace based
steel pipe manufacturer located in Sisak, Croatia with annual capacity estimated of 336,000
short tons.
On September 19, 2007, the Company acquired the operating assets of Economy Steel, Inc.
of Las Vegas, Nevada. The acquired assets operate under the name of CMC Economy Steel. This
operation is a rebar fabricator, placer, construction-related products supplier and steel
service center. The acquisition supports the development and success of the Companys mill
in Arizona.
On December 31, 2007, the Company acquired a 70% interest in a newly incorporated
business, CMC Albedo Metals which acquired an existing metals recycling business in
Singapore. On April 16, 2008, the Company acquired the remaining 30% interest in CMC Albedo
Metals. CMC Albedo Metals name has been changed to CMC Recycling Singapore.
On April 29, 2008, the Company acquired the operating assets of Rebar Services and
Supply Company of Fort Worth, Texas. The acquired assets operate under the name of CMC
Rebar, as part of CMC Americas Fabrication and Distribution Segment.
On June 5, 2008, the Companys subsidiary, CMC Poland, completed the acquisition of
substantially all the outstanding shares of PHP NIKE S.A. (PHP Nike). PHP Nike is a
producer of welded steel meshes, cold rolled wire rod and cold rolled rebar in Poland with
annual production capacity of 100,000 short tons.
On July 1, 2008, the Company completed the acquisition of substantially all of the
operating assets of ABC Coating Companies and affiliates (ABC Coating). ABC Coating is
involved in rebar fabrication and epoxy
Table of Contents
coated reinforcing bar servicing the Southwest,
Midwest and Southeast U.S. with an annual capacity of 150,000 short tons. ABC Coating is
included as part of CMC Americas Fabrication and Distribution segment.
On August 29, 2008, the Company completed the acquisition of substantially all of the
operating assets of Reinforcing Post-Tensioning Services, Inc. and affiliates (RPS). RPS
is a fabricator and installer of concrete reinforcing steel, post-tensioning cable and
related products for commercial and public construction projects with an annual capacity of
approximately 150,000 tons. RPS is included as part of CMC Americas Fabrication and
Distribution segment.
(in thousands)
Total
$
20,415
78,087
7,589
112,077
53,405
49,047
10,294
(99,377
)
$
231,537
On August 24, 2007, the Company completed the acquisition of substantially all of the
operating assets of Mayfield Salvage, Inc., a scrap recycling business located in Alexander
City, Alabama.
On August 15, 2007, the Company completed the acquisition of substantially all the
operating assets of Conesco, Inc., with facilities in Salt Lake City, Utah and Boise,
Idaho. Conesco, Inc. is a supplier of concrete equipment, forms and accessories.
On April 17, 2007, the Company completed the acquisition of substantially all the
operating assets of the related companies consisting of Nicholas J. Bouras, Inc., United
Steel Deck, Inc., The New Columbia Joist Company, and ABA Trucking Corporation. The
acquisition establishes CMC as a manufacturer of steel deck.
On January 4, 2007, the Company completed the acquisition of the operating assets and
inventory of Bruhler Stahlhandel GmbH steel fabrication business in Rosslau/Saxony-Anhalt
in eastern Germany. The acquisition was made by CMCs subsidiary Commercial Metals
Deutschland GmbH.
Table of Contents
(in thousands)
Total
$
88,315
10
64,943
1,959
10,991
1,556
(2,812
)
$
164,962
Table of Contents
(in thousands)
2009
2008
2007
$
555
$
83,048
$
93,385
1,494
2,650
1,795
6,543
31,258
34,889
580
874
90,037
337,178
422,136
2,064
1,706
(4,827
)
Table of Contents
(in thousands)
2009
2008
$
$
100,000
200,000
200,000
400,000
400,000
500,000
500,000
104,945
77,037
17,608
9,597
9,215
1,214,542
1,303,860
32,802
106,327
$
1,181,740
$
1,197,533
Table of Contents
(in thousands)
$
32,802
29,656
29,654
22,130
1,100,300
$
1,214,542
Cash and cash equivalents
Accounts receivable/payable
Trade financing arrangements
Term note CMCZ
August 31,
(in thousands)
2009
2008
$
1,181,740
$
1,197,533
1,173,280
1,177,442
Table of Contents
Derivatives Not Designated as Hedging Instruments
Location
2009
Cost of goods sold
$
14,666
Net sales
532
Cost of goods sold
26
SG&A expenses
(9,816
)
Cost of goods sold
(941
)
SG&A expenses
97
$
4,564
Derivatives Designated as Fair Value Hedging Instruments
Location
2009
SG&A expenses
$
43,185
$
43,185
Hedged (Underlying) Items Designated as Fair Value Hedging Instruments
Location
2009
Net sales
$
32
SG&A expenses
(43,212
)
$
(43,180
)
Effective Portion of Derivatives Designated as Cash Flow Hedging Instruments
2009
$
(360
)
11,446
$
11,086
Effective Portion of Derivatives Designated as Cash Flow Hedging Instruments
Location
2009
Cost of goods sold
$
(284
)
SG&A expenses
(122
)
Interest expense
458
Gain reclassified from accumulated other comprehensive income (loss) into operations, net of taxes
$
52
Derivative Assets:
August 31, 2009
$
13
2,948
3,823
4,678
$
11,462
Table of Contents
Derivative Liabilities
August 31, 2009
$
35
8,895
6,421
1,420
$
16,771
*
Derivative assets and liabilities disclosed under SFAS 161 do not include the hedged
(underlying) items designated as fair value hedges.
Fair Value Measurements at Reporting Date Using
Quoted Prices in
Active Markets for
Significant Other
Significant
August 31,
Identical Assets
Observable Inputs
Unobservable Inputs
(in thousands)
2009
(Level 1)
(Level 2)
(Level 3)
$
357,723
$
357,723
$
$
11,462
2,948
8,514
55,596
55,596
16,711
8,895
7,876
96,904
96,904
*
The Company provides a nonqualified benefit restoration plan to certain eligible executives
equal to amounts that would have been available under tax qualified ERISA plans but for
limitations of ERISA, tax laws and regulations. Though under no obligation to fund this plan,
the Company has segregated assets in a trust. The plan assets and liabilities consist of
securities included in various mutual funds.
Table of Contents
Year ended August 31,
(in thousands)
2009
2008
2007
$
45,691
$
66,923
$
137,566
(4,537
)
44,267
32,244
20,902
17,332
13,583
62,056
128,522
183,393
(48,383
)
(23,715
)
(12,355
)
$
13,673
$
104,807
$
171,038
939
921
(1,731
)
$
12,734
$
103,886
$
172,769
August 31,
(in thousands)
2009
2008
$
56,703
$
51,454
42,152
15,453
18,722
27,546
14,563
5,752
10,115
5,934
3,758
2,111
18,809
3,914
$
164,822
$
112,164
$
87,709
$
53,413
1,673
2,434
31,174
9,717
8,533
$
99,099
$
95,554
$
65,723
$
16,610
August 31,
(in thousands)
2009
2008
$
61,142
$
32,170
49,145
34,709
109
44,564
50,160
$
65,723
$
16,610
Table of Contents
Year ended August 31,
2009
2008
2007
35.0
%
35.0
%
35.0
%
33.3
2.5
1.6
(9.8
)
(1.0
)
(0.6
)
77.7
(5.7
)
(4.1
)
(86.9
)
(9.0
)
0.3
40.3
%
31.1
%
31.9
%
U.S. States 2005 and forward
Foreign 2002 and forward
Table of Contents
2009
2008
2007
1,234,080
489,510
497,520
$
7.94
$
23.48
$
21.86
7,530
441,770
704,220
$
9.90
$
21.69
$
12.72
108,574
Table of Contents
Weighted
Average
Price
Exercise
Range
Number
Price
Per Share
7,485,348
$
8.06
$
2.75-24.71
6,178,200
5.90
2.75-13.58
1,403,520
34.28
31.75-34.28
(2,380,238
)
5.28
2.75-24.57
(27,722
)
13.44
2.94-24.57
6,480,908
$
14.74
$
2.94-34.28
4,333,089
7.65
2.94-24.71
1,062,670
35.37
32.82-35.38
(1,247,477
)
7.24
2.94-34.28
(74,695
)
29.97
12.31-35.38
6,221,406
$
19.60
$
3.64-35.38
4,057,115
11.96
3.64-34.28
126,000
11.00
11.00
(813,271
)
5.00
3.64-12.31
(106,583
)
30.85
7.78-35.38
5,427,552
$
21.36
$
3.64-35.38
4,240,734
18.27
3.64-35.38
Outstanding
Exercisable
Weighted
Average
Weighted
Weighted
Range of
Remaining
Average
Aggregate
Average
Aggregate
Exercise
Number
Contractual
Exercise
Intrinsic
Number
Exercise
Intrinsic
Price
Outstanding
Life (Years)
Price
Value
Outstanding
Price
Value
$
3.64 - 3.78
462,392
0.4
$
3.65
462,392
$
3.65
7.53 - 7.78
1,266,692
1.5
7.76
1,266,692
7.76
11.00 - 13.58
818,761
3.3
12.13
692,761
12.34
21.81 - 24.71
547,310
3.5
24.52
547,310
24.52
31.75 - 35.38
2,332,397
5.0
34.76
1,271,579
34.60
$
3.64 - 35.38
5,427,552
3.4
$
21.36
$
21,679,852
4,240,734
$
18.27
$
20,932,672
Weighted Average
Grant - Date
Shares
Fair Value
636,967
$
17.86
206,482
32.93
(280,859
)
16.72
(8,166
)
18.27
554,424
$
24.04
163,770
$
32.90
(327,030
)
20.42
(18,178
)
24.30
372,986
$
31.09
403,000
$
8.89
(213,767
)
29.32
(12,619
)
33.20
549,600
$
15.45
Table of Contents
Real
(in thousands)
Equipment
Estate
$
16,500
$
24,430
13,545
19,946
10,566
18,809
6,686
14,968
2,635
44,150
$
49,932
$
122,303
Table of Contents
2009
2008
2007
112,391,180
115,048,512
118,014,149
1,489,195
2,637,241
3,667,581
113,880,375
117,685,753
121,681,730
Table of Contents
August 31,
(in thousands)
2009
2008
$
67,425
$
198,000
47,253
60,918
34,007
50,630
24,492
41,206
20,030
5,535
17,540
13,683
16,771
28,447
9,875
10,869
8,088
7,894
6,879
6,828
2,941
51,750
71,911
87,664
$
327,212
$
563,424
Table of Contents
Americas
International
Fabrication
Fabrication
Eliminations/
and
and
Discontinued
Recycling
Mills
Distribution
Mills
Distribution
Corporate
Operations
Consolidated
$
625,858
$
773,965
$
2,516,229
$
497,553
$
2,480,437
$
(10,609
)
$
(90,037
)
$
6,793,396
159,530
479,433
11,933
184,102
35,281
(870,279
)
785,388
1,253,398
2,528,162
681,655
2,515,718
(10,609
)
(960,316
)
6,793,396
(89,576
)
263,393
111,604
(77,421
)
(4,341
)
(94,813
)
7,538
116,384
198
(6,994
)
(996
)
1,894
6,864
76,596
77,562
28,281
122,719
18,637
143,040
20,606
36,411
369,694
21,352
38,543
58,715
24,235
4,732
15,570
163,147
7,467
95
58,878
956
6,840
74,236
257,084
585,763
980,957
572,658
635,786
655,308
3,687,556
$
1,820,607
$
1,387,290
$
2,859,816
$
970,923
$
3,727,775
$
(1,855
)
$
(337,178
)
$
10,427,378
369,112
578,980
14,778
184,748
53,141
(1,200,759
)
2,189,719
1,966,270
2,874,594
1,155,671
3,780,916
(1,855
)
(1,537,937
)
10,427,378
145,751
207,756
(67,471
)
96,838
124,338
(99,481
)
133
407,864
(5,426
)
(10,329
)
25,029
9,406
13,563
27,245
59,488
52,299
78,319
45,545
106,356
10,715
61,807
355,041
19,129
35,340
39,906
28,207
3,962
8,525
135,069
7,467
68,398
1,176
7,796
84,837
435,008
630,612
1,447,767
634,027
1,167,020
431,937
4,746,371
$
1,550,014
$
1,144,869
$
2,580,880
$
737,066
$
2,727,502
$
10,821
$
(422,136
)
$
8,329,016
250,633
394,794
5,896
40,142
35,040
(726,505
)
1,800,647
1,539,663
2,586,776
777,208
2,762,542
10,821
(1,148,641
)
8,329,016
113,037
259,368
100,032
112,379
73,709
(71,971
)
(7,627
)
578,927
(6,021
)
(15,685
)
27,413
1,140
14,418
15,992
37,257
26,023
79,027
33,433
30,325
5,844
31,610
206,262
16,425
32,332
29,089
25,390
2,659
1,410
107,305
7,467
28,484
1,892
37,843
337,869
533,794
1,053,594
332,084
698,232
517,090
$
3,472,663
*
Includes intercompany interest expense (income) in the segments.
**
Includes asset impairment charges.
Year ended August 31,
(in thousands)
2009
2008
2007
$
20,802
$
231,966
$
355,431
(550
)
538
9,587
13,673
104,807
171,038
77,562
59,488
37,257
4,897
11,065
5,614
$
116,384
$
407,864
$
578,927
2,628
2,949
(3,474
)
$
113,756
$
404,915
$
582,401
Table of Contents
Year ended August 31,
(in thousands)
2009
2008
2007
$
4,713,749
$
6,594,553
$
5,274,686
885,333
1,247,907
773,859
411,503
1,006,602
1,106,669
288,707
327,732
265,654
260,755
861,106
448,999
150,461
273,790
376,563
82,888
115,688
82,586
$
6,793,396
$
10,427,378
$
8,329,016
$
4,059,197
$
5,833,116
$
4,932,097
1,272,621
2,399,859
1,720,771
727,681
955,800
918,483
533,528
636,763
472,583
200,369
601,840
285,082
$
6,793,396
$
10,427,378
$
8,329,016
*
Excludes a division classified as discontinued operations. See Note 5.
Year ended August 31,
(in thousands)
2009
2008
2007
$
1,186,624
$
1,132,775
$
825,393
462,412
356,667
158,852
19,286
19,164
15,296
21,682
20,322
14,270
$
1,690,004
$
1,528,928
$
1,013,811
Three Months Ended 2009
Nov. 30
Feb. 28
May 31
Aug. 31
$
2,372,830
$
1,618,170
$
1,340,580
$
1,461,816
266,684
162,945
192,736
157,696
62,006
(35,307
)
(13,077
)
7,180
0.55
(0.32
)
(0.12
)
0.06
0.54
(0.32
)
(0.12
)
0.06
Three Months Ended 2008
Nov. 30
Feb. 29
May 31
Aug. 31
$
2,116,004
$
2,254,168
$
2,910,730
$
3,146,476
260,624
237,771
293,498
309,761
69,164
39,775
59,484
63,543
0.59
0.35
0.52
0.56
0.57
0.34
0.51
0.55
Three Months Ended 2007
Nov. 30
Feb. 28
May 31
Aug. 31
$
1,892,719
$
1,908,314
$
2,244,041
$
2,283,942
287,537
252,077
313,210
308,203
85,350
65,921
99,441
104,719
0.73
0.56
0.84
0.88
0.71
0.54
0.82
0.86
Table of Contents
*
Excludes the operations of a division classified as discontinued operations. See Note
5.
Year ended August 31,
(in thousands)
2009
2008
2007
$
275,012
$
396,739
$
311,968
338,877
420,909
381,779
Year ended August 31,
(in thousands)
2009
2008
$
12,664
$
46,594
17,012
35,314
Table of Contents
NAME
CURRENT TITLE & POSITION
AGE
OFFICER SINCE
Vice President, General Counsel and Corporate Secretary
44
2009
Treasurer
61
1979
Senior Vice President and Chief Financial Officer
56
1995
President, Chief Executive Officer and Chairman of the
Board of Directors
61
1995
Vice President and Chief Information Officer
51
1999
President CMC Americas
51
2002
Controller
58
2006
President CMC International
61
2004
Table of Contents
(a)
The following documents are filed as a part of this report:
1.
All financial statements are included at Item 8 above.
2.
Financial statement schedule: The following financial
statement schedule is attached to this report.
Schedule II Valuation and Qualifying Accounts and
Reserves
All other financial statement schedules have been omitted because they are not applicable, are not
required, or the required information is shown in the financial statements or notes thereto.
3.
The following is a list of the Exhibits required to be filed by Item 601 of Regulation S-K:
EXHIBIT
NO.
DESCRIPTION
Underwriting Agreement, dated July 30, 2008 among Commercial Metals Company and
Banc of America Securities LLC and J.P. Morgan Securities Inc., as
Representatives of the several underwriters named therein (filed as Exhibit 1.1
to Commercial Metals Form 8-K filed August 5, 2008 and incorporated herein by
reference).
Restated Certificate of Incorporation (filed herewith).
Certificate of Amendment of Restated Certificate of Incorporation dated February
1, 1994 (filed herewith).
Certificate of Amendment of Restated Certificate of Incorporation dated February
17, 1995 (filed herewith).
Certificate of Amendment of Restated Certificate of Incorporation dated January
26, 2006 (filed as Exhibit 3(i) to Commercial Metals Form 10-Q for the quarter
ended February 28, 2006 and incorporated herein by reference).
Table of Contents
EXHIBIT
NO.
DESCRIPTION
Certificate of Designation, Preferences and Rights of Series A Preferred Stock
(filed as Exhibit 2 to Commercial Metals Form 8-A filed August 3, 1999 and
incorporated herein by reference).
Amended and Restated Bylaws (filed herewith).
Indenture between Commercial Metals and Chase Manhattan Bank dated as of July 31,
1995 (filed as Exhibit 4.1 to Commercial Metals Registration Statement No.
33-60809 on July 18, 1995 and incorporated herein by reference).
Form of Note for Commercial Metals 5.625% Senior Notes due 2013 (filed as
Exhibit 4(i)(j) to Commercial Metals Registration Statement No. 33-112243 on
January 27, 2004 and incorporated herein by reference).
Form of Note for Commercial Metals 6.50% Senior Notes due 2017 (filed as Exhibit
4(i)e to Commercial Metals Form 10-K for the fiscal year ended August 31, 2007
and incorporated herein by reference).
Form of Note for Commercial Metals 7.35% Senior Notes due 2018 (filed as Exhibit
4(i)(g) to Commercial Metals Form 10-K for the fiscal year ended August 31, 2008
and incorporated herein by reference).
Supplemental Indenture, dated as of November 12, 2003, to Indenture dated as of
July 31, 1995, by and between Commercial Metals and JPMorgan Chase Bank (filed
herewith).
Supplemental Indenture, dated as of July 17, 2007, to Indenture dated as of July
31, 1995, by and between Commercial Metals and The Bank of New York Trust
Company, N. A. (filed as Exhibit 4.1 to Commercial Metals Form 8-K filed July
17, 2007 and incorporated herein by reference).
Supplemental Indenture, dated as of August 4, 2008, to Indenture dated as of July
31, 1995, by and between Commercial Metals and The Bank of New York Mellon Trust
Company, N. A. (filed as Exhibit 4.1 to Commercial Metals Form 8-K filed August
5, 2008 and incorporated herein by reference).
Purchase and Sale Agreement dated June 20, 2001, between various entities listed
on Schedule 1 as Originators and CMC Receivables, Inc. (filed herewith).
Second Amended and Restated Receivables Purchase Agreement dated as of April 30,
2008, among CMC Receivables, Inc., as Seller, Liberty Street Funding LLC as a
Buyer, Gotham Funding Corporation, as a Buyer,,The Bank of Nova Scotia as a
Managing Agent, and the Administrative Agent, The Bank of Tokyo-Mitsubishi UFJ,
LTD., New York Branch, as a Managing Agent, and Commercial Metals Company as
Servicer (filed as Exhibit 10.1 to Commercial Metals Form 8-K filed May 2, 2008
and incorporated herein by reference).
Amendment to Purchase and Sale Agreement dated April 22, 2004, among CMC
Receivables, Inc., CMC Steel Fabricators, Inc., Commercial Metals Company, Howell
Metal Company, Owen Electric Steel Company of South Carolina, SMI Steel Inc. and
Structural Metals, Inc. (filed herewith).
Amendment to the Second Amended and Restated Receivables Purchase Agreement,
dated April 24, 2009,among CMC Receivables Inc., the Company, Liberty Street
Funding LLC, Gotham Funding Corporation, The Bank of Nova Scotia and The Bank of
Tokyo-Mitsubishi UFJ, LTD., New York Branch (filed as Exhibit 10.1 to Commercial
Metals Form 8-K filed April 28, 2009 and incorporated herein by reference).
Amendment to the Second Amended and Restated Receivables Purchase Agreement,
dated May 26, 2009, among CMC Receivables Inc., the Company, Liberty Street
Funding LLC, Gotham Funding Corporation, The Bank of Nova Scotia and The Bank of
Tokyo-Mitsubishi UFJ, LTD., New York Branch (filed as Exhibit 10.1 to Commercial
Metals Form 8-K filed May 26, 2009 and incorporated herein by reference).
Table of Contents
EXHIBIT
NO.
DESCRIPTION
Amendment to the Second Amended and Restated Receivables Purchase Agreement,
dated June 12, 2009, among CMC Receivables Inc., the Company, Liberty Street
Funding LLC, Gotham Funding Corporation, The Bank of Nova Scotia and The Bank of
Tokyo-Mitsubishi UFJ, LTD., New York Branch (filed as Exhibit 10.1 to Commercial
Metals Form 8-K filed June 15, 2009 and incorporated herein by reference).
First Amended and Restated $400,000,000 3 Year Credit Agreement, dated May 23,
2005, by and among Commercial Metals, Bank of America, N.A., The Bank of
Tokyo-Mitsubishi, Ltd., ABN AMRO Bank N.V., Mellon Bank, N.A., BNP Paribas, Banc
of America Securities LLC and the other lending parties listed therein (filed as
Exhibit 10.4 to Commercial Metals Form 8-K filed May 26, 2005 and incorporated
herein by reference).
Employment Agreement of Murray R. McClean dated May 23, 2005 (filed as Exhibit
10.1 to Commercial Metals Form 8-K filed May 26, 2005 and incorporated herein by
reference).
First Amendment to Employment Agreement of Murray R. McClean, dated September 1,
2006 (filed as Exhibit 99.1 to Commercial Metals Form 8-K filed September 1,
2006 and incorporated herein by reference).
Second Amendment to Employment Agreement of Murray R. McClean, dated April 7,
2009 (filed as Exhibit 10.1 to Commercial Metals Form 10-Q filed April 8, 2009
and incorporated herein by reference.
Key Employee Long-Term Performance Plan description (filed herewith).
Key Employee Annual Incentive Plan description (filed herewith).
Amended and Restated 1999 Non-Employee Director Stock Option Plan (filed as
Exhibit 10(iii)(a) to Commercial Metals Form 10-Q for the quarter ending
February 28, 2007 and incorporated herein by reference).
Employment Agreement between Commercial Metals (International) AG and Hanns
Zoellner dated January 2, 1998 (filed herewith).
Commercial Metals Company 1996 Long-Term Incentive Plan (filed as Exhibit 10.1 to
Commercial Metals Form 10-Q for the quarter ending February 28, 2005 and
incorporated herein by reference).
Commercial Metals Company 2006 Long-Term Equity Incentive Plan (filed as Exhibit
10(iii)(b) to Commercial Metals Form 10-Q for the quarter ending February 28,
2007 and incorporated herein by reference).
Form of Commercial Metals Company 1996 Long-Term Incentive Plan Restricted Stock
Award Agreement (filed as Exhibit 10.2 to Commercial Metals Form 8-K filed May
26, 2005 and incorporated herein by reference).
Form of Commercial Metals Company 1996 Long-Term Incentive Plan Stock
Appreciation Rights Agreement (filed as Exhibit 10.3 to Commercial Metals Form
8-K filed May 26, 2005 and incorporated herein by reference).
Commercial Metals Company 2006 Cash Incentive Plan (filed as Exhibit 10(iii)(c)
to Commercial Metals Form 10-Q for the quarter ending February 28, 2007 and
incorporated herein by reference).
Form of Non-Employee Director Restricted Stock Award Agreement (filed as Exhibit
10.1 to Commercial Metals Form 8-K filed January 27, 2005 and incorporated herein
by reference).
Form of Executive Employment Continuity Agreement (filed as Exhibit 10.1 to
Commercial Metals Form 10-Q for the quarter ended February 28, 2006 and
incorporated herein by reference)
Table of Contents
EXHIBIT
NO.
DESCRIPTION
Form of Restricted Stock Unit Award Agreement (filed as Exhibit 10.2 to
Commercial Metals Form 8-K filed May 26, 2009 and incorporated herein by
reference)
Retirement and Consulting Agreement, between Commercial Metals Company and David
M. Sudbury, dated as of May 28, 2009 (filed as Exhibit 10.1 to Commercial Metals
Form 8-K filed May 29, 2009 and incorporated herein by reference)
Form of Non-Employee Director Stock Appreciation Rights Agreement (filed herewith)
Statement re computation of earnings to fixed charges (filed herewith).
Subsidiaries of Registrant (filed herewith).
Consent of Independent Registered Public Accounting Firm to incorporation by
reference of report dated October 30, 2009, accompanying the consolidated
financial statements and financial statement schedule of Commercial Metals Company and subsidiaries for the year
ended August 31, 2009, into previously filed Registration Statements No. 333-141663, No. 333-141662, No. 333-90726, No. 333-90724, No.
033-61073, No. 033-61075, No. 333-27967 and No. 333-42648 on Form S-8 and
Registration Statements No. 333-144500 on Form S-3
(filed herewith).
Certification of Murray R. McClean, President and Chief Executive Officer of
Commercial Metals Company, pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 (filed herewith).
Certification of William B. Larson, Vice President and Chief Financial Officer of
Commercial Metals Company, pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 (filed herewith).
Certification of Murray R. McClean, President and Chief Executive Officer of
Commercial Metals Company, pursuant to 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
Certification of William B. Larson, Vice President and Chief Financial Officer of
Commercial Metals Company, pursuant to 18 U.S.C. 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith).
*
Denotes management contract or compensatory plan.
**
Does not contain Schedules or exhibits. A copy of any such Schedules or exhibits will be
furnished to the Securities and Exchange Commission upon request.
Table of Contents
(in thousands)
Additions
Deductions
Balance at
Charged to
Charged
Charged to
Charged to
Balance at
Beginning
Costs and
to Other
Costs and
Other
End of
Description
of Period
Expenses
Accounts
Expenses
Accounts
Period
$
17,652
33,733
3,448
(1)
(12,699
)(2)
$
42,134
$
16,495
4,478
7,048
(1)
(10,369
)(2)
$
17,652
$
16,075
4,020
(1)
(370
)
(3,230
)(2)
$
16,495
(1)
Acquisitions and recoveries.
(2)
Uncollectable accounts charged to the allowance and translation adjustments.
Table of Contents
/s/ Murray R. McClean
President, Chief Executive Officer,
and Chairman of the Board of Directors
Date: October 30, 2009
/s/ Robert D. Neary
Robert D. Neary, October 30, 2009
and Chairman of the Board of Directors
Director
/s/ Dorothy G. Owen
Dorothy G. Owen, October 30, 2009
Director
/s/ J. David Smith
J. David Smith, October 30, 2009
Director
/s/ Robert R. Womack
Robert R. Womack, October 30, 2009
Director
/s/ William B. Larson
William B. Larson, October 30, 2009
Senior Vice President and Chief Financial Officer
/s/ Leon K. Rusch
Leon K. Rusch, October 30, 2009
Controller
EXHIBIT 3(i)
RESTATED
CERTIFICATE OF INCORPORATION
OF
COMMERCIAL METALS COMPANY
COMMERCIAL METALS COMPANY, a corporation duly organized and existing
under the laws of the State of Delaware, DOES HEREBY CERTIFY:
THAT the original Certificate of Incorporation of Commercial Metals Company was filed with the Secretary of State of the State of Delaware on the twenty-ninth day of August, 1946, at 10:00 A.M.;
THAT this Restated Certificate of Incorporation of Commercial Metals Company was duly adopted by the Board of Directors of Commercial Metals Company in accordance with the provisions of Section 245 of the General Corporation Laws of the State of Delaware;
THAT this Restated Certificate of Incorporation only restates and integrates and does not further amend the provisions of the Certificate of Incorporation of Commercial Metals Company as heretofore amended and supplemented; and
THAT there is no discrepancy between the provisions of the Certificate of Incorporation of Commercial Metals Company as heretofore amended and supplemented and the provisions of this Restated Certificate of Incorporation.
* * * * * * *
FIRST. The name of the corporation is COMMERCIAL METALS COMPANY.
SECOND. Its principal office in the State of Delaware is located at 1209 Orange Street, Corporation Trust Center, Wilmington, Delaware 19801. The name and address of its resident agent is The Corporation Trust Company, 1209 Orange Street, Corporation Trust Center, Wilmington, Delaware 19801.
THIRD. The nature of the business, or objects of purposes to be transacted, promoted or carried on are:
To buy, sell and generally deal in and with ferrous and non-ferrous metals.
To buy and sell goods, wares and merchandise of any description, by wholesale or wholesale and retail.
To manufacture, buy, sell, import, export, construct, erect, fabricate, treat and generally deal and traffic in and with iron and steel, and the products and by-products thereof of every kind and description; and to manufacture, buy, sell, deal in, and traffic in all or any articles, commodities, devices or things consisting or partly consisting of iron, steel, carbon, tungsten, silicon, manganese, copper, zinc, tin, aluminum, lead and other metals and all alloys or any products and by-products thereof.
To buy, lease, construct, own, control, operate, and maintain mills, works, and plants for the crushing, sampling, milling, smelting, reduction, and concentration of minerals and metal-bearing ores, and the extraction therefrom of all kinds of metals and mineral products and by-products, on its own account and as factor and agent for others.
To carry on the business of mining, milling, concentrating, converting, smelting, treating, preparing for market, reducing, buying, selling, and merchandising in iron, steel, and other metals and metallic compounds, coal, coke, charcoal, and other fuels, and all products and by-products of all ores and minerals.
To engage in the business of fabricating, stamping, pressing, drawing and spinning, heating, treating, annealing, hardening and working of metals and metallic compounds.
To receive on consignment or commission, and to sell, rent, lease, license the use of, handle, pledge, mortgage or otherwise utilize, prepare for market and market or in any way dispose of any and all of the above mentioned articles of commerce.
To purchase or otherwise acquire, lease, build, construct, improve, maintain, manage, develop, control, operate, sell or otherwise dispose of, let, license to use, and mortgage, mills, smelters, factories, furnaces, plants, warehouses, shops, buildings, boats, ships, barges and all other works and conveniences necessary or incident to carrying out the objects and purposes of this corporation.
To acquire, and pay for in cash, stock or bonds of this corporation or otherwise, the good will, rights, assets and property, and to undertake or assume the whole or any part of the obligations or liabilities of any person, firm, association or corporation.
To acquire, hold, use, sell, assign, lease, grant licenses in respect of, mortgage or otherwise dispose of letters patent of the United States or any foreign country, patent rights, licenses and privileges, inventions, improvements and processes, copyrights, trade-marks and trade names, relating to or useful in connection with any business of this corporation.
To acquire by purchase, subscription or otherwise, and to receive, hold, own, guarantee, sell, assign, exchange, transfer, mortgage, pledge or otherwise dispose of or deal in and with any of the shares of the capital stock, or any voting trust certificates in respect of the shares of capital stock, scrip, warrants, rights, bonds, debentures, notes, trust receipts, and other securities, obligations, choses in action and evidences of indebtedness or interest issued or created by any corporation, joint stock companies, syndicates, associations, firms, trusts or persons, public or private, or by the government of the United States of America, or by any foreign government, or by any state, territory, province, municipality or other political subdivision or by any governmental agency, and as owner thereof to possess and exercise all the rights, powers and privileges of ownership, including the right to execute consents and vote thereon, and to do any and all acts and things necessary or advisable for the preservation, protection, improvement and enhancement in value thereof.
To enter into, make and perform contracts of every kind and description with any person, firm, association, corporation, municipality, county, state, body politic or government or colony or dependency thereof.
To borrow or raise moneys for any of the purposes of the corporation and, from time to time, without limit as to amount to draw, make, accept, endorse, execute and issue promissory notes, drafts, bills of exchange, warrants, bonds, debentures and other negotiable or non-negotiable instruments and evidences of indebtedness, and to secure the payment of any thereof and of the interest thereon by mortgage upon or pledge, conveyance or assignment in trust of the whole or any part of the property of the corporation, whether at the time owned or thereafter acquired, and to sell, pledge or otherwise dispose of such bonds or other obligations of the corporation for its corporate purposes.
To buy, sell or otherwise deal in notes, open accounts, and other similar evidences of debt, or to loan money and take notes, open accounts, and other similar evidences of debt as collateral security therefor.
To purchase, hold, sell and transfer the shares of its own capital stock; provided it shall not use its funds or property for the purchase of its own shares of capital stock when such use would cause any impairment of its capital except as otherwise permitted by law, and provided further that shares of its own capital stock belonging to it shall not be voted upon directly or indirectly.
To have one or more offices, to carry on all or any of its operations and business and without restriction or limit as to amount to purchase or otherwise acquire, hold, own, mortgage, sell, convey, or otherwise dispose of real and personal property of every class and description in any of the States, Districts, Territories or Colonies of the United States, and in any and all foreign countries, subject to the laws of such State, District, Territory, Colony or Country.
In general, to carry on any other business in connection with the foregoing, and to have and exercise all the powers conferred by the laws of Delaware upon corporations formed under the General Corporation Law of the State of Delaware, and to do any or all of the things hereinbefore set forth to the same extent as natural persons might or could do.
The objects and purposes specified in the foregoing clauses shall, except where otherwise expressed, be in nowise limited or restricted by reference to, or inference from, the terms of any other clause in this certificate of incorporation, but the objects and purposes specified in each of the foregoing clauses of this article shall be regarded as independent objects and purposes.
FOURTH. The aggregate number of shares of capital stock which the corporation shall have authority to issue is Twenty-two Million (22,000,000) of which Twenty Million (20,000,000) shares shall be common stock at the par value of Five Dollars ($5.00) per share and Two Million (2,000,000) shares shall be preferred stock of the par value of the One Dollar ($1.00) per share.
Shares of Preferred Stock may be issued from time to time in one or more series, each such series to have such distinctive designation or title as may be fixed by the Board of Directors
prior to the issuance of any shares thereof. Each share of any series of Preferred Stock shall be identical with all other shares of such series, except as to the date from which accumulated preferred dividends, if any, shall be cumulative. Each such series shall have such voting powers, if any, and such preferences and relative, participating, optional or other special rights, with such qualifications, limitations or restrictions of such preferences and/or rights as shall be stated in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series of Preferred Stock, including, but without limiting the generality of the foregoing, the following:
(a) The rate and times at which, and the terms and conditions on which; dividends on Preferred Stock or series thereof shall be paid;
(b) The right, if any, of the holders of Preferred Stock or series thereof to convert the same into or exchange the same for, shares of other classes or series of stock of the corporation and the terms and conditions of such conversion or exchange;
(c) The redemption price or prices and the time or times at which, and the terms and conditions on which, Preferred Stock or series thereof may be redeemed;
(d) The rights of the holders of Preferred Stock or series thereof upon the voluntary or involuntary liquidation, merger, consolidation, distribution or sale of assets, dissolution or winding-up, of the corporation; and
(e) The terms of the sinking fund or redemption or purchase account, if any, to be provided for the Preferred Stock or series thereof.
After the requirements with respect to preferential dividends on the Preferred Stock (fixed in accordance with the provisions of this Article Fourth) shall have been met and after the corporation shall have complied with all the requirements, if any, with respect to the setting aside of sums as sinking funds or redemption or purchase accounts (fixed in accordance with the provisions of this Article Fourth), then and not otherwise the holders of Common Stock shall be entitled to receive such dividends as may be declared from time to time by the Board of Directors.
After distribution in full of the preferential amount (fixed in accordance with the provisions of this Article Fourth) to be distributed to the holders of Preferred Stock in the event of the voluntary or involuntary liquidation, distribution or sale of assets, dissolution or winding-up, of the corporation, the holders of the Common Stock shall be entitled to receive ratably all of the remaining assets of the corporation available for distribution to stockholders.
Except as may otherwise be required by law, each holder of Common Stock shall have one vote in respect of each share of stock held by him on all matters voted upon by stockholders.
No holder of stock of any class of the corporation shall be entitled as of right to subscribe for or purchase any shares of stock of any class whether now or hereafter authorized, or any bonds, debentures, or other evidences of indebtedness whether or not convertible into or exchangeable for stock.
FIFTH. The minimum amount of capital with which the corporation will commence business is One Thousand Dollars ($1,000.00).
SIXTH. The names and places of residence of the incorporators are as follows:
NAMES RESIDENCES ----- ---------- Walter Lenz Wilmington, Delaware S. M. Brown Wilmington, Delaware H. K. Webb Wilmington, Delaware |
SEVENTH. The corporation is to have perpetual existence.
EIGHTH. The private property of the stockholders shall not be subject to the payment of corporate debts to any extent whatever.
NINTH. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized:
To make, alter or repeal the by-laws of the corporation.
To authorize and cause to be executed mortgages and liens upon the real and personal property of the corporation.
To set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper purpose and to abolish any such reserve in the manner in which it was created.
By resolution or resolutions passed by a majority of the whole board, to designate one or more committees, each committee to consist of two or more of the directors of the corporation, which, to the extent provided in said resolution or resolutions or in the by-laws of the corporation, shall have and may exercise the powers of the Board of Directors in the management of the business and affairs of the corporation, and may have power to authorize the seal of the corporation to be affixed to all papers which may require it. Such committee or committees shall have such name or names as may be stated in the by-laws of the corporation or as may be determined from time to time by resolution adopted by the Board of Directors.
When and as authorized by the affirmative vote of the holders of a majority of the stock issued and outstanding having voting power given at a stockholders' meeting duly called for that purpose, or when authorized by the written consent of the holders of a majority of the voting stock issued and outstanding, to sell, lease or exchange all of the property and assets of the corporation, including its good will and its corporate franchises, upon such terms and conditions and for such consideration, which may be in whole or in part shares of stock in, and/or other securities of, any other corporation or corporations, as its Board of Directors shall deem expedient and for the best interests of the corporation.
TENTH. Whenever a compromise or arrangement is proposed between this corporation and its creditors or any class of them, and/or between this corporation and its stockholders or any class of them, any court of equitable jurisdiction within the State of Delaware may, on the application in a summary way of this corporation or of any creditor or stockholder thereof, or on the application of any receiver or receivers appointed for this corporation under the provisions of Section 3883 of the Revised Code of 1915 of said State, or on the application of trustees in
dissolution or of any receiver or receivers appointed for this corporation under the provisions of Section 43 of the General Corporation Law of the State of Delaware, order a meeting of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, to be summoned in such manner as the said Court directs. If a majority in number representing three fourths in value of the creditors or class of creditors, and/or of the stockholders or class of stockholders of this corporation, as the case may be, agree to any compromise or arrangement and to any reorganization of this corporation as consequence of such compromise or arrangement, the said compromise or arrangement and the said reorganization shall, if sanctioned by the Court to which the said application has been made, be binding on all the creditors or class of creditors, and/or on all the stockholders or class of stockholders, of this corporation as the case may be, and also on this corporation.
ELEVENTH. Meetings of stockholders may be held without the State of Delaware, if the by-laws so provide. The books of the corporation may be kept (subject to any provisions contained in the statutes) outside of the State of Delaware at such place or places as may be from time to time designated by the Board of Directors or in the by-laws of the corporation.
TWELFTH. Notwithstanding any other provisions of this Restated Certificate of Incorporation or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any affirmative vote of the holders of any particular class or series of capital stock of the corporation entitled to vote generally in the election of directors (hereinafter referred to as the "Voting Stock") required by law or this Restated Certificate of Incorporation, the affirmative vote of the holders of at least 70% of the voting power of all of the then-outstanding shares of the Voting Stock, voting together as a single class, shall be required to alter, amend, repeal, or adopt any provision inconsistent with Article Fifteenth, Article Sixteenth, Article Seventeenth, or this Article Twelfth; except that an amendment to extend the duration of Article Seventeenth may be adopted by the affirmative vote of the holders of at least a majority of such voting power.
THIRTEENTH. (a) The corporation shall indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that he is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful; provided, however, that in any action brought by or in the right of the corporation, there shall be no indemnification in respect of any claim, issue or matter as to which such person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation unless and only to the extent that the Court of Chancery or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or is equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) Any indemnification under subarticle (a) (unless ordered by a court) shall be made by the corporation only as authorized in the specific case upon a determination that indemnification of the director, officer, employee or agent is proper in the circumstances because he has met the applicable standard of conduct set forth in subarticle (a). Such determination shall be made (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to such action, suit or proceeding, or (2) if such a quorum is not obtainable, or, even if obtainable a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or (3) by the stockholders.
(c) Expenses incurred in defending a civil or criminal action, suit or proceeding may be paid by the corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of the director, officer, employee or agent to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the corporation as authorized in this Article.
(d) The indemnification provided for in this Article shall not be deemed exclusive of any other rights to which those indemnified may be entitled, under any by-law, agreement, vote of stockholders, or otherwise.
FOURTEENTH. To the fullest extent permitted by the Delaware General Corporation Law, as it now exists or may hereafter be amended, a director of the Corporation shall not be liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director. Any repeal or modification of this Article by the stockholders of the Corporation shall be prospective only and shall not adversely affect any limitation on the personal liability of a director of the Corporation existing at the time of such repeal or modification.
FIFTEENTH. Except as otherwise fixed by or pursuant to the provisions of Article Fourth of the Restated Certificate of Incorporation relating to the rights of the holders of the Preferred Stock to elect additional directors under specified circumstances, the number of directors which shall constitute the whole Board of Directors shall be not less than three and shall be fixed from time to time exclusively by the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in the previously authorized directorships at the time any such resolution is presented to the Board of Directors for adoption). At the Annual Meeting of Stockholders at which this Article is adopted, the directors shall be divided into three classes, designated Class I, Class II and Class III (which at all times shall be as nearly equal in number as possible), with the term of office of Class I directors to expire at the 1990 Annual Meeting of Stockholders, the term of office of Class II directors to expire at the 1991 Annual Meeting of Stockholders, and the term of office of Class III directors to expire at the 1992 Annual Meeting of Stockholders. At each annual meeting of stockholders following such initial classification and election, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election.
Subject to the right of the holders of any class or series of Voting Stock then outstanding, any director, or the entire board of directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least a majority of the voting power of all of the then-outstanding shares of the Voting Stock, voting together as a single class. Except as may otherwise be provided by law, cause for removal shall be construed to exist only if the director whose removal is proposed has been convicted of a felony by a court of competent jurisdiction and such conviction is no longer subject to direct appeal, has failed to attend twelve consecutive meetings of the Board of Directors, or has been adjudged by a court of competent jurisdiction to be liable for negligence or misconduct in the performance of his duty to the corporation in a matter of substantial importance to the corporation, and such adjudication is no longer subject to direct appeal.
Subject to the rights of the holders of any class or series of the Voting Stock then outstanding, newly created directorships resulting from any increase in the authorized number of directors or any vacancies on the Board of Directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled by a majority vote of the directors then in office, though less than a quorum, and directors so chosen shall hold office for a term expiring at the annual meeting of stockholders at which the term of office of the class to which they have been elected expires. No decrease in the number of authorized directors constituting the entire Board of Directors shall shorten the term of any incumbent director.
Notwithstanding the foregoing, whenever the holders of the Preferred Stock shall have the right to elect directors at an annual or special meeting of stockholders, the election, term of office, filling of vacancies, and other features of such directorships shall be governed by the terms of this Restated Certificate of Incorporation applicable thereto, and such directors so elected shall not be divided into classes pursuant to this Article unless expressly provided by such terms.
SIXTEENTH. Any action required or permitted to be taken by the stockholders of the corporation must be effected at a duly called annual or special meeting of stockholders of the corporation and may not be effected by any consent in writing by such stockholders. Special meetings of stockholders of the corporation may be called only by the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time such resolution is presented to the Board for adoption), by holders of not less than a majority of the voting power of all of the then-outstanding shares of Voting Stock or by The Jacob Feldman and Sara B. Feldman Grantor Trust Dated September 24, 1985 and the trustees of that trust acting solely in their capacities as trustees of that trust (collectively, the "Trust") as long as the Trust is the beneficial owner of ten percent or more of the corporation's Voting Stock.
SEVENTEENTH. The stockholder vote required to approve any Business Combination (as hereinafter defined) shall be as set forth in this Article Seventeenth.
(a) (1) Except as otherwise expressly provided in paragraph (b) of this Article Seventeenth:
(A) Any merger or consolidation of the corporation or any Subsidiary (as hereinafter defined) with (i) any Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate (as hereinafter defined) of an Interested Stockholder; or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of the corporation or any Subsidiary having an aggregate Fair Market Value (as hereinafter defined) of $25,000,000 or more; or
(C) the issuance or transfer by the corporation or any Subsidiary (in one transaction or a series of transactions) of any securities of the corporation or any Subsidiary to any Interested Stockholder or any affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate Fair Market Value of $25,000,000 or more; or
(D) the adoption of any plan or proposal for the liquidation or dissolution of the corporation proposed by or on behalf of any Interested Stockholder or any Affiliate of any Interested Stockholder; or
(E) any reclassification of securities (including any reverse stock split) or recapitalization of the corporation, or any merger or consolidation of the corporation with any of its Subsidiaries or any other transaction (whether or not with or into or otherwise involving any Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the corporation or any Subsidiary which is directly or indirectly owned by any Interested Stockholder or any Affiliate of any Interested Stockholder;
shall require the affirmative vote of the holders of at least 70% of the voting power of all of the then-outstanding shares of the Voting Stock, voting together as a single class (it being understood that for purposes of this Article Seventeenth, each share of the Voting Stock shall have the number of votes granted to it pursuant to Article Fourth of this Restated Certificate of Incorporation). Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or in any agreement with any national securities exchange or otherwise, and shall be required in addition to any affirmative vote of the holders of any particular class or series of Voting Stock required by law or this Restated Certificate of Incorporation.
(2) The term "Business Combination" as used in this Article Seventeenth shall mean any transaction which is referred to in any one or more of subsections (A) through (E) of subparagraph (1) of this section (a).
(b) The provisions of section (a) of this Article Seventeenth shall not be applicable to any particular Business Combination, and such Business Combination shall require only such affirmative vote as is required by law, by any other provision of this Restated Certificate of Incorporation or by any agreement with any national securities exchange, if, in the case of a Business Combination that does not involve any cash or other consideration being received by the stockholders of the corporation, solely in their respective capacities as stockholders of the corporation, the condition specified in the following subparagraph (1) is met, or in the case of any other Business Combination, the conditions specified in either of the following subparagraphs (1) or (2) are met:
(1) The Business Combination shall have been approved by a majority of the Disinterested Directors (as hereinafter defined), it being understood that this condition shall not be capable of satisfaction unless there is at least one Disinterested Director.
(2) All of the following conditions shall have been met:
(A) The consideration to be received by holders of shares of a particular class of outstanding Voting Stock shall be in cash or in the same form as the Interested Stockholder has paid for shares of such class of Voting Stock within the two-year period ending on and including the date on which the Interested Stockholder became an Interested Stockholder (the "Determination Date"). If, within such two-year period, the Interested Stockholder has paid for shares of any class of Voting Stock with varying forms of consideration, the form of consideration to be received per share by holders of shares of such class of Voting Stock shall be either cash or the form used to acquire the larger number of shares of such class of Voting Stock acquired by the Interested Stockholder within such two-year period.
(B) The aggregate amount of (x) the cash and (y) the Fair Market Value, as of the date (the "Consummation Date") of the consummation of the Business Combination, of the consideration other than cash to be received per share by holders of Common Stock in such Business Combination shall be at least equal to the higher of the following (it being intended that the requirements of this subparagraph (2)(B) shall be required to be met with respect to all shares of Common Stock outstanding whether or not the Interested Stockholder has previously acquired any shares of Common Stock):
(i) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the Interested Stockholder for any shares of Common Stock acquired by it within the two-year period immediately prior to the date of the first public announcement of the proposal of the Business Combination (the "Announcement Date") or in the transaction in which it became an Interested Stockholder, whichever is higher, plus interest compounded annually from the Determination Date through the Consummation Date at the prime rate of interest of Citibank, N.A. (or such other bank as may be selected by the Disinterested Directors), in effect from time to time, less the aggregate amount of any cash dividends paid, and the Fair Market Value of any dividends paid in other than cash, on each share of Common Stock from the Determination Date through the Consummation Date, in an amount up to but not exceeding the amount of interest so payable per share of Common Stock; or
(ii) The Fair Market Value per share of Common Stock on the Announcement Date.
(C) The aggregate amount of (x) the cash and (y) the Fair Market Value, as of the Consummation Date, of the consideration other than cash to be received per share by holders of shares of any class, other than Common Stock, of outstanding Voting Stock shall be at least equal to the highest of the following (it being intended that the requirements of this subparagraph (2)(C) shall be required to be met with respect to every such class of outstanding Voting Stock, whether or not the Interested Stockholder has previously acquired any shares of a particular class of Voting Stock):
(i) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the Interested
Stockholder for any shares of such class of Voting Stock acquired by it within the two-year period immediately prior to the Announcement Date or in the transaction in which it became an Interested Stockholder, whichever is higher, plus interest compounded annually from the Determination Date through the Consummation Date at the prime rate of interest of Citibank, N.A. (or such other bank as may be selected by the Disinterested Directors), in effect from time to time, less the aggregate amount of any cash dividends paid, and the Fair Market Value of any dividends paid in other than cash, on each share of such class of Voting Stock from the Determination Date through the Consummation Date in an amount up to but not exceeding the amount of interest so payable per share of such class of Voting Stock; or
(ii) the Fair Market Value per share of such class of Voting Stock on the Announcement Date; or
(iii) the highest preferential amount per share to which the holders of shares of such class of Voting Stock are entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of the corporation.
(D) After such Interested Stockholder has become an Interested Stockholder and prior to the consummation of such Business Combination: (x) except as approved by a majority of the Disinterested Directors, there shall have been no failure to declare and pay at the regular date therefor any full quarterly dividends (whether or not cumulative) on any outstanding Preferred Stock; (y) there shall have been (i) no reduction in the annual rate of dividends paid on the Common Stock (except as necessary to reflect any subdivision of the Common Stock), except as approved by a majority of the Disinterested Directors, and (ii) an increase in such annual rate of dividends as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of outstanding shares of the Common Stock, unless the failure so to increase such annual rate is approved by a majority of the Disinterested Directors; and (z) such Interested Stockholder shall have not become the beneficial owner of any additional shares of Voting Stock except as part of the transaction which results in such Interested Stockholder's becoming an Interested Stockholder.
(E) After such Interested Stockholder has become an Interested Stockholder, such Interested Stockholder shall not have received the benefit, directly or indirectly (except proportionately as a stockholder of the corporation), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages, provided by the corporation, whether in anticipation of or in connection with such Business Combination or otherwise.
(F) A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent provisions replacing such Act, rules or regulations) shall be mailed to all stockholders of the corporation at least 30 days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act or subsequent provisions).
(c) For the purposes of this Article Seventeenth:
(1) A "person" shall mean any individual, firm, corporation or other entity.
(2) "Interested Stockholder" shall mean any person (other than the corporation or any Subsidiary) who or which:
(A) is the beneficial owner, directly or indirectly, of more than 10% of the voting power of the outstanding Voting Stock; or
(B) is an Affiliate of the corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then-outstanding Voting Stock; or
(C) is an assignee of or has otherwise succeeded to any shares of Voting Stock which were at any time within the two-year period immediately prior to the date in question beneficially owned by an Interested Stockholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933.;
provided that the Trust shall not be an Interested Stockholder until such time as the Trust shall become the beneficial owner of any shares of Voting Stock in addition to the shares of Voting Stock of which it was the beneficial owner on January 26, 1989; provided further that the Trust shall not become an Interested Stockholder solely as a result of action taken solely by the corporation that benefits all holders of Voting Stock pro rata based on their ownership of Voting Stock.
(3) A person shall be a "beneficial owner" of any Voting Stock:
(A) which such person or any of its Affiliates or Associates (as hereinafter defined) beneficially owns, directly or indirectly; or
(B) which such person or any of its Affiliates or Associates has (x) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (y) the right to vote pursuant to any agreement, arrangement or understanding; or
(C) which are beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of Voting Stock.
(4) For the purposes of determining whether a person is an Interested Stockholder pursuant to subparagraph (2) of this paragraph (c), the number of shares of Voting Stock deemed to be outstanding shall include shares deemed owned through application of subparagraph (3) of this paragraph (c), but shall not include any other shares of Voting Stock which may be issuable pursuant to any agreement, arrangement, or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.
(5) "Affiliate" or "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 in effect on January 1, 1989.
(6) "Subsidiary" means any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the corporation; provided, however, that for the purposes of the definition of Interested Stockholder set forth in subparagraph (2) of this paragraph (c), the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the corporation.
(7) "Disinterested Director" means any member of the Board of Directors of the corporation (the "Board") who is unaffiliated with the Interested Stockholder and was a member of the Board prior to the time that the Interested Stockholder became an Interested Stockholder, and any successor of a Disinterested Director who is unaffiliated with the Interested Stockholder and is recommended to succeed a Disinterested Director by a majority of Disinterested Directors then on the Board.
(8) "Fair Market Value" means: (x) in the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the Composite Tape for New York Stock Exchange - Listed Stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Securities Act of 1934 on which such stock is listed, or, if such stock is not listed on any such exchange, on the National Market System of the National Association of Securities Dealers, Inc. Automated Quotations System, or if such stock is not quoted on the National Market System, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or, if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by the Board in good faith; and (y) in the case of property other than cash or stock, the fair market value of such property on the date in question as determined by the Board in good faith.
(9) In the event of any Business Combination in which the corporation survives, the phrase "consideration other than cash to be received" as used in subparagraphs (2)(A) and (2)(C) of paragraph (b) of this Article Seventeenth shall include the shares of Common Stock and/or the shares of any other class of outstanding Voting Stock retained by the holders of such shares.
(d) A majority of the total number of Disinterested Directors (whether or not there exist any vacancies in previously authorized directorships at the time any such determination as is hereinafter in this paragraph (d) specified is to be made by the Board) shall have the power and duty to determine, on the basis of information known to them after reasonable inquiry, all facts necessary to determine compliance with this Article Seventeenth, including, without limitation, (1) whether a person is an Interested Stockholder, (2) the number of shares of Voting Stock beneficially owned by any person, (3) whether a person is an Affiliate or Associate of another, (4) whether the applicable conditions set forth in subparagraph (2) of paragraph (b) have been met with respect to any Business Combination, and (5) whether the assets which are the subject of any Business Combination have, or the consideration to be received for the issuance or transfer of securities by the corporation or any Subsidiary in any Business Combination has, an aggregate Fair Market Value of $25,000,000 or more.
(e) Nothing contained in this Article Seventeenth shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law.
(f) Unless extended pursuant to Article Twelfth of this Restated Certificate of Incorporation, the provisions of this Article Seventeenth shall expire and no longer be of any effect after 12 noon Central time on January 27, 1994.
IN WITNESS WHEREOF, the said Commercial Metals Company has caused this Restated Certificate of Incorporation of Commercial Metals Company to be signed by Stanley A. Rabin, its President, and attested by David M. Sudbury, its Secretary, on this 2nd day of March, 1989.
COMMERCIAL METALS COMPANY
/s/ Stanley A. Rabin --------------------------------- Stanley A. Rabin President ATTEST: /s/ David M. Sudbury -------------------------------------- David M. Sudbury Secretary |
STATE OF TEXAS
COUNTY OF DALLAS
BE IT REMEMBERED that on this 2nd day of March, 1989, personally came before me, a Notary Public in and for the State of Texas and County of Dallas, Stanley A. Rabin, President of Commercial Metals Company, a corporation duly organized and existing under the laws of the State of Delaware, and he duly executed the Restated Certificate of Incorporation of Commercial Metals Company before me and acknowledged that the said certificate be his act and deed of the said corporation and the facts stated therein are true, that the seal affixed to the said certificate and attested by the Secretary of the said corporation is the common or corporate seal of the said corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of office the day and year aforesaid.
EXHIBIT 3(i)a
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
COMMERCIAL METALS COMPANY
COMMERCIAL METALS COMPANY, a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation", DOES
HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, at a meeting duly held, adopted resolutions setting forth the following amendment to the Corporation's Restated Certificate of Incorporation, declaring this amendment to be advisable and designating the next annual meeting of the stockholders of the Corporation for consideration thereof:
The present Article Seventeenth of the Corporation's Restated Certificate of Incorporation shall be replaced in its entirety by the following:
SEVENTEENTH: The stockholder vote required to approve any Business Combination (as hereinafter defined) shall be as set forth in this Article Seventeenth:
(a)(1) Except as otherwise expressly provided in paragraph (b) of this Article Seventeenth:
(A) Any merger or consolidation of the corporation or any Subsidiary (as hereinafter defined) with (i) any Interested Stockholder (as hereinafter defined) or (ii) any other corporation (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate (as hereinafter defined) of an Interested Stockholder; or
(B) any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder or any Affiliate of any Interested Stockholder of any assets of the corporation or any
Subsidiary having an aggregate Fair Market Value (as hereinafter defined) of $25,000,000 or more; or
(C) the issuance or transfer by the corporation or any Subsidiary (in one transaction or a series of transactions) of any securities of the corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate Fair Market Value of $25,000,000 or more; or
(D) the adoption of any plan or proposal for the liquidation or dissolution of the corporation proposed by or on behalf of any Interested Stockholder or any Affiliate of any Interested Stockholder; or
(E) any reclassification of securities (including any reverse stock split) or recapitalization of the corporation, or any merger or consolidation of the corporation with any of its Subsidiaries or any other transaction (whether or not with or into or otherwise involving any Interested Stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the corporation or any Subsidiary which is directly or indirectly owned by any Interested Stockholder or any Affiliate of any Interested Stockholder;
shall require the affirmative vote of the holders of at least 70% of the voting power of all of the then-outstanding shares of the Voting Stock, voting together as a single class (it being understood that for purposes of this Article Seventeenth, each share of the Voting Stock shall have the number of votes granted to it pursuant to Article Fourth of this Restated Certificate of Incorporation). Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or in any agreement with any national securities exchange or otherwise, and shall be required in addition to any affirmative vote of the holders of any particular class or series of Voting Stock required by law or this Restated Certificate of Incorporation.
(2) The term "Business Combination" as used in this Article Seventeenth shall mean any transaction which is referred to in any one or more of subsections (A) through (E) of subparagraph (1) of this section (a).
(b) The provisions of section (a) of this Article Seventeenth shall not be applicable to any particular Business Combination, and such Business Combination shall require only such affirmative vote as is required by law, by any other provision of this Restated Certificate of Incorporation or by any agreement with any national securities exchange, if, in the case of a Business Combination that does not involve any cash or other consideration being received by the stockholders of the corporation, solely in their respective capacities as stockholders of the corporation, the condition specified in the following subparagraph (1) is met, or, in the case of any other Business Combination, the conditions specified in either of the following subparagraphs (1) or (2) are met:
(1) The Business Combination shall have been approved by a majority of the Disinterested Directors (as hereinafter defined), it being understood that this condition shall not be capable of satisfaction unless there is at least one Disinterested Director.
(2) All of the following conditions shall have been met:
(A) The consideration to be received by holders of shares of a particular class of outstanding Voting Stock shall be in cash or in the same form as the Interested Stockholder has paid for shares of such class of Voting Stock within the two-year period ending on and including the date on which the Interested Stockholder became an Interested Stockholder (the "Determination Date"). If, within such two-year period, the Interested Stockholder has paid for shares of any class of Voting Stock with varying forms of consideration, the form of consideration to be received per share by holders of shares of such class of Voting Stock shall be either cash or the form used to acquire the largest number of shares of such class of Voting stock acquired by the Interested Stockholder within such two-year period.
(B) The aggregate amount of (x) the cash and (y) the Fair Market Value, as of the date (the "Consummation Date") of the consummation of the Business Combination, of the consideration other than cash to be received per share by holders of Common Stock in such Business Combination shall be at least equal to the higher of the following (it being intended that the requirements of this subparagraph (2)(B) shall be required to be met with respect to all shares of Common Stock outstanding whether or not the Interested Stockholder has previously acquired any shares of Common Stock):
(i) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the Interested Stockholder for any shares of Common Stock acquired by it within the two-year period immediately prior to the date of the first public announcement of the proposal of the Business Combination (the "Announcement Date") or in the transaction in which it became an Interested Stockholder, whichever is higher, plus interest compounded annually from the Determination Date through the Consummation Date at the prime rate of interest of Citibank, N.A. (or such other bank as may be selected by the Disinterested Directors), in effect from time to time, less the aggregate amount of any cash dividends paid, and the Fair Market Value of any dividends paid in other than cash, on each share of Common Stock from the Determination Date through the Consummation Date, in an amount up to but not exceeding the amount of interest so payable per share of Common Stock; or
(ii) the Fair Market Value per share of Common Stock on the Announcement Date.
(C) The aggregate amount of (x) the cash and (y) the Fair Market Value, as of the Consummation Date, of the consideration other than cash to be received per share by holders of shares of any class, other than Common Stock, of outstanding Voting Stock shall be at least equal to the highest of the following (it being intended that the requirements of this subparagraph (2)(C) shall be required to be met with respect to every such class of outstanding Voting Stock, whether or not the Interested Stockholder has previously acquired any shares of a particular class of Voting Stock):
(i) (if applicable) the highest per share price (including any brokerage commissions, transfer taxes and soliciting dealers' fees) paid by the Interested Stockholder for any shares of such class of Voting Stock acquired by it within the two-year period immediately prior to the Announcement Date or in the transaction in which it became an Interested Stockholder, whichever is higher, plus interest compounded annually from the Determination Date through the Consummation Date at the prime rate of interest of Citibank, N.A. (or such other bank as may be selected by the Disinterested Directors), in effect from time to time, less the aggregate amount of any cash dividends paid, and the Fair Market Value of any dividends paid in other than cash, on each share of such class of Voting Stock from the Determination Date through the Consummation Date in an amount up to but not exceeding the amount of interest so payable per share of such class of Voting Stock; or
(ii) the Fair Market Value per share of such class of Voting Stock on the Announcement Date; or
(iii) the highest preferential amount per share to which the holders of shares of such class of Voting Stock are entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of the corporation.
(D) After such Interested Stockholder has become an Interested Stockholder and prior to the consummation of such Business Combination: (x) except as approved by a majority of the Disinterested Directors, there shall have been no failure to declare and pay at the regular date therefor any full quarterly dividends (whether or not cumulative) on any outstanding Preferred Stock; (y) there shall have been (i) no reduction in the annual rate of dividends paid on the Common Stock (except as necessary to reflect any subdivision of the Common Stock), except as approved by a majority of the Disinterested Directors, and (ii) an increase in such annual rate of dividends as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of outstanding shares of the Common Stock, unless the failure so to increase such annual rate is approved by a majority of the Disinterested Directors; and (z) such Interested Stockholder shall have not become the beneficial owner of any
additional shares of Voting Stock except as part of the transaction which results in such Interested Stockholder's becoming an Interested Stockholder.
(E) After such Interested Stockholder has become an Interested Stockholder, such Interested Stockholder shall not have received the benefit, directly or indirectly (except proportionately as a stockholder of the corporation), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the corporation, whether in anticipation of or in connection with such Business Combination or otherwise.
(F) A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent provisions replacing such Act, rules or regulations) shall be mailed to all stockholders of the corporation at least 30 days prior to the consummation of such Business Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act or subsequent provisions).
(c) For the purposes of this Article Seventeenth:
(1) A "person" shall mean any individual, firm, corporation or other entity.
(2) "Interested Stockholder" shall mean any person (other than the corporation or any Subsidiary) who or which:
(A) is the beneficial owner, directly or indirectly, of more than 10% of the voting power of the outstanding Voting Stock; or
(B) is an Affiliate of the corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of 10% or more of the voting power of the then-outstanding Voting Stock; or
(C) is an assignee of or has otherwise succeeded to any shares of Voting Stock which were at any time within the two-year period immediately prior to the date in question beneficially owned by an Interested Stockholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933;
provided that the Trust shall not be an Interested Stockholder until such time as the Trust shall become the beneficial owner of any shares of Voting Stock in addition to the shares of Voting Stock of which it was the beneficial owner on January 27, 1994; provided further that the Trust shall not become an Interested Stockholder solely as a result of action taken solely by the corporation that benefits all holders of Voting Stock pro rata based on their ownership of Voting Stock.
(3) A person shall be a "beneficial owner" of any Voting Stock:
(A) which such person or any of its Affiliates or Associates (as hereinafter defined) beneficially owns, directly or indirectly; or
(B) which such person or any of its Affiliates or Associates has (x) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (y) the right to vote pursuant to any agreement, arrangement or understanding; or
(C) which are beneficially owned, directly or indirectly, by any other person with which such person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of Voting Stock.
(4) For the purposes of determining whether a person is an
Interested Stockholder pursuant to subparagraph (2) of this paragraph
(c), the number of shares of Voting Stock deemed to be outstanding
shall include shares deemed owned through application of subparagraph
(3) of this paragraph (c), but shall not include any other shares of
Voting Stock which may be issuable pursuant to any agreement,
arrangement, or understanding, or upon exercise of conversion rights,
warrants or options, or otherwise.
(5) "Affiliate" or "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 in effect on January 1, 1994.
(6) "Subsidiary" means any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the corporation; provided, however, that for the purposes of the definition of Interested Stockholder set forth in subparagraph (2) of this paragraph (c), the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the corporation.
(7) "Disinterested Director" means any member of the board of directors of the corporation (the "Board") who is unaffiliated with the Interested Stockholder and was a member of the Board prior to the time that the Interested Stockholder became an Interested Stockholder, and any successor of a Disinterested Director who is unaffiliated with the Interested Stockholder and is recommended to succeed a Disinterested Director by a majority of Disinterested Directors then on the Board.
(8) "Fair Market Value" means: (x) in the case of stock, the highest closing sales price during the 30-day period immediately preceding the date in question of a share
of such stock on the Composite Tape for New York Stock Exchange-Listed Stocks, or, if such stock is not quoted on the Composite Tape, on the New York Stock Exchange, or, if such stock is not listed on such Exchange, on the principal United States securities exchange registered under the Securities Exchange Act of 1934 on which such stock is listed, or, if such stock is not listed on any such exchange, on the National Market System of the National Association of Securities Dealers, Inc. Automated Quotations System, or if such stock is not quoted on the National Market System, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc. Automated Quotations System or any system then in use, or, if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by the Board in good faith; and (y) in the case of property other than cash or stock, the fair market value of such property on the date in question as determined by the Board in good faith.
(9) In the event of any Business Combination in which the corporation survives, the phrase "consideration other than cash to be received" as used in subparagraphs (2) (A) and (2) (C) of paragraph (b) of this Article Seventeenth shall include the shares of Common Stock and/or shares of any other class of outstanding Voting Stock retained by the holders of such shares.
(d) A majority of the total number of Disinterested Directors (whether or not there exist any vacancies in previously authorized directorships at the time any such determination as is hereinafter in this paragraph (d) specified is to be made by the Board) shall have the power and duty to determine, on the basis of information known to them after reasonable inquiry, all facts necessary to determine compliance with this Article Seventeenth, including, without limitation, (1) whether a person is an Interested Stockholder, (2) the number of shares of Voting Stock beneficially owned by any person, (3) whether a person is an Affiliate or Associate of another, (4) whether the applicable conditions set forth in subparagraph (2) of paragraph (b) have been met with respect to any Business Combination, and (5) whether the assets which are the subject of any Business Combination have, or the consideration to be received for the issuance or transfer of securities by the corporation or any Subsidiary in any Business Combination has, an aggregate Fair Market Value of $25,000,000 or more.
(e) Nothing contained in this Article Seventeenth shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law.
(f) Unless extended pursuant to Article Twelfth of this Restated Certificate of Incorporation, the provisions of this Article Seventeenth shall expire and no longer be of any effect after 12 noon, Central time, on January 28, 1999.
SECOND: That thereafter, pursuant to a resolution of the Board of Directors of the Corporation, an annual meeting of stockholders of the Corporation was duly called and held, upon notice in accordance with Section 222 of the General Corporation Law of the State of
Delaware, at which meeting the necessary number of shares as required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the applicable provisions of Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed by Stanley A. Rabin, its President, and attested by David M. Sudbury, its Secretary this 1st day of February, 1994.
COMMERCIAL METALS COMPANY
By: /s/ Stanley A. Rabin ------------------------------- Stanley A. Rabin President ATTEST: By: /s/ David M. Sudbury ----------------------------------- David M. Sudbury Secretary |
EXHIBIT (3)(i)(b)
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF INCORPORATION
OF
COMMERCIAL METALS COMPANY
COMMERCIAL METALS COMPANY, a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"), DOES
HEREBY CERTIFY:
FIRST: That the Board of Directors of the Corporation, at a meeting duly held, adopted resolutions setting forth the following amendment to the Corporation's Restated Certificate of Incorporation, declaring this amendment to be advisable and designating the next annual meeting of the stockholders of the Corporation for consideration thereof:
The first paragraph of the present Article Fourth of the Corporation's Restated Certificate of Incorporation shall be replaced in its entirety by the following paragraph with the remainder of the present Article Fourth remaining unchanged:
FOURTH: The aggregate number of shares of capital stock which the corporation shall have authority to issue is Forty Two Million (42,000,000) of which Forty Million (40,000,000) shares shall be Common Stock at the Par Value of Five Dollars ($5.00) per share and Two Million (2,000,000) shares shall be Preferred Stock of the Par Value of One Dollar ($1.00).
SECOND: That thereafter, pursuant to a resolution of the Board of Directors of the Corporation, an annual meeting of stockholders of the Corporation was duly called and held,
upon notice in accordance with Section 222 of the General Corporation Law of the State of Delaware, at which meeting necessary number of shares as required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the applicable provisions of Section 242 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be signed by Stanley A. Rabin, its President, and attested by David M. Sudbury, its Secretary this 17th day of February, 1995.
COMMERCIAL METALS COMPANY
By: /s/ Stanley A. Rabin ------------------------------- Stanley A. Rabin President ATTEST: By: /s/ David M. Sudbury ------------------------------------ David M. Sudbury Secretary |
EXHIBIT 3(ii)
AMENDED AND RESTATED BYLAWS
OF
COMMERCIAL METALS COMPANY
ARTICLE I
OFFICES
Section 1. Principal Office.
The principal and registered office shall be in the City of Wilmington,
County of New Castle, State of Delaware.
Section 2. Other Offices.
The corporation may also have offices in the City of Dallas, State of
Texas, and also offices at such other places as the board of directors may from
time to time determine or the business of the corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section
1. Place of Meetings.
All meetings of the shareholders shall be held at the office of the
corporation in Dallas, Texas, or at such other place as shall be determined by
the board of directors and stated in the notice of the meeting or in a duly
executed waiver of notice thereof. The board of directors may, in its sole
discretion, determine that the meeting shall not be held at any place but may
instead be held solely by means of remote communication. Shareholders and
proxyholders not physically present at a meeting of shareholders may, by means
of remote communication, participate in a meeting of shareholders and be deemed
present in person and vote at a meeting of shareholders whether such meeting is
to be held at a designated place or solely by means of remote communication
provided (a) the corporation shall implement reasonable measures to verify that
each person deemed present and permitted to vote by remote communication is a
shareholder or proxyholder, (b) the corporation shall implement reasonable
measures to provide such shareholders and proxyholders a reasonable opportunity
to participate in the meeting and to vote on matters submitted to the
shareholders, including an opportunity to read or hear the proceedings, and (c)
if any shareholder or proxyholder votes or takes other action at the meeting by
means of remote communication, a record of such vote or other action shall be
maintained by the corporation.
Section 2. Annual Meeting.
An annual meeting of shareholders, commencing with the year 1947, shall be
held on the fourth Thursday of January in each year if not a legal holiday, and
if a legal holiday, then on the next full
business day following, at 10:00 A.M., at which the shareholders shall elect a board of directors and transact such other business as may properly be brought before the meeting. All election of directors shall be by written ballot. The board of directors may authorize that the requirement of a written ballot shall be satisfied by a ballot submitted by electronic transmission, provided that any such electronic transmission must either set forth or be submitted with information from which it can be determined that the electronic transmission was authorized by the shareholder or proxyholder.
Section 3. Notice of Annual Meeting.
Written or printed notice of the annual meeting, stating the place, if any, date and hour thereof, and means of remote communication, if any, by which shareholders and proxyholders may be deemed to be present in person and vote at such meeting shall be given to each shareholder entitled to vote at such meeting not less than ten days nor more than sixty days before the date of the meeting. Any notice given to the shareholders by the corporation under the restated certificate of incorporation or these bylaws shall be effective if given by a form of electronic transmission consented to by the shareholder to whom notice is given. The consent shall be revocable by the shareholder by written notice to the corporation. Any such consent shall be deemed revoked if (a) the corporation is unable to deliver by electronic transmission two consecutive notices given by the corporation in accordance with such consent and (b) such inability becomes known to the secretary or an assistant secretary of the corporation or to the transfer agent or other person responsible for the giving of notice. Inadvertent failure to treat such inability as a revocation shall not invalidate any meeting or other action. Notice by electronic transmission shall be deemed given (a) if by facsimile telecommunication, when directed to a number at which the shareholder has consented to receive notice; (b) if by electronic mail, when directed to an electronic mail address at which the shareholder has consented to receive notice; (c) if by posting on an electronic network together with separate notice to the shareholder of such specific posting, upon the later of (i) such posting and (ii) the giving of such separate notice; and (d) if by any other form of electronic transmission, when directed to the shareholder.
Section 4. Special Meetings.
Special meetings of shareholders of the corporation, for any purpose or purposes, unless otherwise prescribed by statute or the restated certificate of incorporation, may be called only by the board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time such resolutions presented to the board for adoption), by the holders of no less than a majority of the voting power of all of the then-outstanding shares of any class or series of capital stock of the corporation entitled to vote generally in the election of directors ( Voting Stock ), or by The Jacob Feldman and Sara B. Feldman Grantor Trust dated September 24, 1985 and the trustees of that trust acting solely in their capacities as trustees of that trust (collectively, the Trust ), as long as the Trust is the beneficial owner of ten percent or more of the Voting Stock. As a prerequisite to calling a special meeting, the holders of a majority of the voting power of the Voting Stock or the Trust must submit a request in writing to the president or secretary of the corporation stating the purpose or purposes of the proposed meeting.
Section 5. Notice of Special Meeting.
Written or printed notice of a special meeting of shareholders, stating the place, day and hour, and purpose or purposes thereof, shall be served upon or mailed to each shareholder entitled to vote thereat at such address as appears on the books of the corporation, not less than ten days nor more than fifty days before the date of the meeting.
Section 6. Business at Special Meeting.
Business transacted at all special meetings shall be confined to the purpose or purposes stated in the notice.
Section 7. Shareholder List.
The officer of the corporation who has charge of the stock ledger of the corporation shall prepare and make, at least ten (10) days before each meeting of shareholders, a complete list of the shareholders entitled to vote at such meeting, or any adjournment thereof, arranged in alphabetical order, and showing the address of each shareholder and the number of shares registered in the name of each shareholder. Such list shall be open to the examination of any shareholder, for any purpose germane to the meeting, for a period of at least ten days prior to the meeting, (a) on a reasonably accessible electronic network, provided that the information required to gain access to such list is provided with the notice of the meeting, or (b) during ordinary business hours, at the principal place of business of the corporation. If the list is made available on an electronic network, the corporation shall take reasonable steps to ensure that the information is available only to shareholders of the corporation. If the meeting is to be held at a place, the list shall be produced and kept at the time and place of the meeting during the whole time thereof, and may be inspected by any shareholder of the corporation who is present. If the meeting is to be held solely by means of remote communication, then the list shall be open to the examination of any shareholder during the whole time of the meeting on a reasonably accessible electronic network, and the information required to access such a list shall be provided with the notice of the meeting.
Section 8. Quorum.
The holders of a majority of the shares of capital stock issued and outstanding and entitled to vote thereat, represented in person or by proxy, shall constitute a quorum at all meetings of the shareholders for the transaction of business except as otherwise provided by statute, the restated certificate of incorporation, or these bylaws. The shareholders present may adjourn the meeting despite the absence of a quorum. When a meeting is adjourned for less than thirty days in any one adjournment, it shall not be necessary to give any notice of the adjourned meeting if the time and place to which the meeting is adjourned are announced at the meeting at which the adjournment is taken, and of the adjourned meeting any business may be transacted that might have been transacted on the original date of the meeting. When a meeting is adjourned for thirty days or more, notices of the adjourned meeting shall be given as in the case of an original meeting.
Section 9. Majority Vote.
When a quorum is present at any meeting, the vote of the holders of a majority of the shares having voting power represented in person or by proxy shall decide any question brought before such meeting, unless the question is one upon which, by express provision of statute, the restated certificate of incorporation, or these bylaws, a different vote is required, in which case such express provision shall govern and control the decision of such question.
Section 10. Proxies.
At any meeting of the shareholders every shareholder having the right to vote shall be entitled to vote in person or by proxy appointed by an instrument in writing subscribed by such shareholder or his duly authorized attorney in fact and bearing a date net more than eleven months prior to said meeting, unless said instrument provides for a longer period.
Section 11. Voting.
Unless otherwise provided by statute, the restated certificate of incorporation, or these bylaws, each shareholder shall have one vote for each share of stock having voting power, registered in his name on the books of the corporation.
Section 12. No Action By Written Consent.
Any action required or permitted to be taken by the stockholders of the corporation must be effected at a duly called annual or special meeting of stockholders of the corporation and may not be effected by any consent in writing by such stockholders.
Section 13. Meeting by Remote Communication.
Shareholders may participate in and hold a meeting by means of remote communication, including conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, provided that (a) the corporation implements reasonable measures to verify that each person deemed present and permitted to vote at the meeting by means of remote communication is a shareholder or proxyholder, (b) the corporation implements reasonable measures to provide such shareholders and proxyholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the shareholders, including an opportunity to read or hear the proceedings of the meeting substantially concurrently with such proceedings, and (c) if any shareholder or proxyholder votes or takes other action at the meeting by means of remote communication, a record of such vote or other action shall be maintained by the corporation. Participation in a meeting by such means shall constitute presence in person at the meeting.
ARTICLE III
BOARD OF DIRECTORS
Section 1. Powers.
The business and affairs of the corporation shall be managed by a board of directors. The board may exercise all such power of the corporation and do all such lawful acts and things as are not by statute, by the restated certificate of incorporation, or these bylaws directed to be exercised or done by the shareholders.
Section 2. Number of Directors.
Except as otherwise fixed by or pursuant to the provisions of Article Fourth of the restated certificate of incorporation relating to the rights of the holders of the preferred stock to elect additional directors under specified circumstances, the number of directors which shall constitute the whole board of directors shall be not less than three and shall be fixed from time to time exclusively by the board of directors pursuant to a resolution adopted by a majority of the total number of authorized directors (whether or not there exist any vacancies in previously authorized directorships at the time any such resolution is presented to the board of directors for adoption).
Section 3. Election and Term.
The board of directors shall be divided into three classes serving for those initial terms as provided in Article Fifteenth of the restated certificate of incorporation. Except as provided in Section 4 of this Article III, at each annual meeting of shareholders following such initial classification and election, directors elected to succeed those directors whose terms expire shall be elected for a term of
office to expire at the third succeeding annual meeting of shareholders. Directors need not be shareholders. Notwithstanding any provision of this Section 3 or Section 4 of this Article, holders of the preferred stock shall have the right to elect annual or special meeting of stockholders, the election term of office, filling of vacancies, and other features of such directorships shall be terms of the restated certificate of incorporation applicable and such directors so elected shall not be divided into classes to Article Fifteenth of the restated certificate of incorporation unless expressly provided by the terms of the preferred stock.
Section 4. Vacancies and Newly Created Directorships.
Subject to the rights of the holders of any class or series of Voting Stock then outstanding, newly created directorships resulting from any increase in the authorized number of directors, or any vacancies on the board of directors resulting from death, resignation, retirement, disqualification, removal from office or other cause may be filled by a majority vote of the directors then in office, though less than a quorum, and directors so chosen shall hold office for a term expiring at the annual meeting of shareholders at which the term of office of the class to which they have been elected expires. No decrease in the number of authorized directors constituting the entire board of directors shall shorten the term of any incumbent director.
Section 5. Resignation, Removal.
Any director may resign at any time. Subject to the right of the holders of any class or series of Voting Stock then outstanding, any director, or the entire board of directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least a majority of the voting power of all of the then-outstanding shares of the Voting Stock, voting together as a single class. Except as may otherwise be provided by law, cause for removal shall exist only if the director whose removal is proposed has been convicted of a felony by a court of competent jurisdiction and such conviction is no longer subject to direct appeal, has failed to attend twelve consecutive meetings of the board of directors, or has been adjudged by a court of competent jurisdiction to be liable for negligence or misconduct in the performance of his duty to the corporation in a matter of substantial importance to the corporation, and such adjudication is no longer subject to direct appeal.
ARTICLE IV
MEETINGS OF THE BOARD
Section l. First Meeting.
The first meeting of each newly elected board shall be held at the location of and immediately following the annual meeting of shareholders, and no notice of such meeting shall be necessary to the newly elected directors in order legally to constitute the meeting provided a quorum shall be present; or the board may meet at such place and time as shall be fixed by the consent in writing of all the directors.
Section 2. Regular Meeting.
Regular meetings of the board may be held at such time and place either within or without of the State of Delaware and with such notice as shall be determined from time to time by the board.
Section 3. Special Meetings.
Special meetings of the board may be called by the chairman of the board or the president, at any time, if notice to each director is given, either personally, or by mail, by telephone, by facsimile or electronic transmission in accordance with Section 2 of Article VII hereof. Special meetings shall be called
by the chairman of the board, the president or the secretary in like manner and on like notice on the written request of any two directors.
Section 4. Quorum and Voting.
At all meetings of the board a majority of the directors shall be necessary and sufficient to constitute a quorum for the transaction of business; and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the board of directors, except as may be otherwise specifically provided by statute, the restated certificate of incorporation, or these bylaws. If a quorum shall not be present at any meeting of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall be present.
Section 5. Telephone Meetings.
Members of the board of directors of the corporation, or any committee designated by the board of directors, may participate in a meeting of the board of directors or such committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 5 shall constitute presence in person at such meeting.
Section 6. Action by Written Consent.
Any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting, if all the members of the board of directors or committee, as the case may be, consent thereto in writing, or by electronic transmission and the writing or writings or electronic transmission or electronic transmissions are filed with the minutes of proceedings of the board of directors or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.
ARTICLE V
COMMITTEES
Section 1. Standing Committees.
The board of directors, by resolution adopted by a majority of the whole board, shall designate directors to serve on the audit committee, the compensation committee, and the nominating and corporate governance committee of the board, which committees shall constitute the standing committees of the board.
Section 2. Other Committees.
The board of directors may similarly create other committees for such terms and with such powers and duties as the board deems appropriate.
ARTICLE VI
COMPENSATION OF DIRECTORS
The board of directors shall have the authority to fix the compensation of the directors and the members of committees of the board of directors. The compensation of the directors need not be uniform as between directors, and the compensation of the members of the committees of the board need not be uniform either as between members of a committee or as between committees. The directors shall be reimbursed for expenses incurred in attending meetings of the board or committees thereof.
ARTICLE VII
NOTICES
Section 1. Methods of Notice to Shareholders.
Whenever any notice is required to be given to any shareholder under the provisions of any statute, the restated certificate of incorporation, or these bylaws, it shall not be construed to require personal notice, but such notice may be given in writing by mail addressed to such shareholder at such address as appears on the books of the corporation, and such notice shall be deemed to be given at the time when the same shall be deposited in the United States mail with postage thereon prepaid. Without limiting the manner by which notice may otherwise be given effectively to shareholders, any notice to shareholders may be given by electronic transmission in the manner provided in Section 232 of the Delaware General Corporation Law.
Section 2. Methods of Notice to Directors or Members of a Committee.
Whenever any notice is required to be given to any director or member of a committee under the provisions of any statute, the restated certificate of incorporation, or these bylaws, it may be given either personally, or by mail, by telephone, by facsimile or electronic transmission directed to each director at the directors address, telephone number, facsimile number or electronic mail address, as the case may be, as shown on the corporations records. If the notice is (i) delivered personally by hand, by courier or by telephone, (ii) sent by facsimile or (iii) sent by electronic transmission, it shall be delivered or sent at least twenty-four (24) hours before the time of the holding of the meeting. If notice is sent by United States mail, it shall be deposited in the United States mail at least four days before the time of the holding of the meeting. The notice need not specify the place of the meeting (if the meeting is to be held at the corporations principal executive office) nor the purpose of the meeting.
Section 3. Waiver of Notice.
Whenever any notice is required to be given to any shareholder, member of a committee, or director under the provisions of any statute, the restated certificate of incorporation, or these bylaws, a waiver thereof in writing signed by the person or persons entitled to said notice, or a waiver by electronic transmission by the person entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice. Attendance at any meeting shall constitute a waiver of notice thereof except as provided by statute.
ARTICLE VIII
OFFICERS
Section 1. Executive Officers.
The officers of the corporation shall consist of a president, a vice president, a secretary, and a treasurer, each of whom shall be elected by the board of directors. The board of directors may also elect a chairman of the board, additional vice presidents, and one or more assistant secretaries assistant treasurers.
Section 2. Election and Qualification.
The board of directors at its first meeting after each annual meeting of shareholders shall elect the president, one or more vice presidents, a secretary, and a treasurer, none of whom need to be a member of the board.
Section 3. Other Officers and Agents.
The board may elect or appoint such other officers and agents as it shall deem necessary, who shall hold their offices for such terms and shall exercise such powers and perform such duties as may be determined from time to time by the board.
Section 4. Salaries.
The salaries of all officers of the corporation shall be fixed by the board of directors except as provided by the charter of the compensation committee of the board or as otherwise directed by the board.
Section 5. Term, Removal, and Vacancies.
The officers of the corporation shall hold office until their successors are chosen and qualify. Any officer, agent or member of the executive committee elected or appointed by the board of directors may be removed, with or without cause, at any time by the board of directors. If any such office becomes vacant for any reason, the vacancy shall be filled by the board of directors.
Section 6. President.
The president shall be the chief executive officer of the corporation. He shall preside at all meetings of the shareholders and the board of directors unless such duties shall have been assigned to a chairman of the board by the board of directors. He shall have general powers of oversight, supervision and management of the business and affairs of the corporation, and shall see that all orders and resolutions of the board of directors are carried into effect.
Section 7. Vice Presidents.
The vice presidents in the order determined by the board of directors shall, in the absence or disability of the president, perform the duties and exercise the powers of the president, and shall perform such other duties as the board of directors and president may prescribe.
Section 8. Secretary.
The secretary shall attend all meetings of the board of directors and all meetings of the shareholders and record all votes and the minutes of all proceedings in a book to be kept for that purpose and shall perform like duties for the standing committees when required. He shall give, or cause to be given, notice of all meetings of the shareholders and special meetings of the board of directors, and shall perform such other duties as may be prescribed by the board of directors and president. He shall keep in safe custody the seal of the corporation and, when authorized by the board, affix the same to any instrument requiring it, and when so affixed it shall be attested by his signature or by the signature of the assistant secretary.
Section 9. Assistant Secretaries.
The assistant secretaries in the order determined by the board of directors shall, in the absence or disability of the secretary, perform the duties and exercise the powers of the secretary and shall perform such other duties as the board of directors and president may prescribe.
Section 10. Treasurer.
The treasurer shall have the custody of the corporate funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the corporation and shall deposit all monies and other valuable effects in the name and to the credit of the corporation in such depositories as may be designated by the board of directors. He shall disburse the funds of the corporation as may be ordered by the board, taking proper vouchers for such disbursements, and shall render to the board of directors and president, whenever they may require it, an account of all of his transactions as treasurer and of the financial condition of the corporation.
Section 11. Assistant Treasurers.
The assistant treasurers in the order determined by the board of directors shall, in the absence or disability of the treasurer, perform the duties and exercise the powers of the treasurer and shall perform such other duties as the board of directors and president may prescribe.
Section 12. Officers Bond.
If required by the board of directors, any officer shall give the corporation a bond (which shall be renewed as the board may require) in such sum and with such surety or sureties as shall be satisfactory to the board for the faithful performance of the duties of his office and for the restoration to the corporation, in case of his death, resignation, retirement, or removal from office, of all books, papers, vouchers, money, and other property of whatever kind in his possession or under his control belonging to the corporation.
ARTICLE IX
SHARES AND SHAREHOLDERS
Section 1. Certificates Representing Shares.
The shares of the corporation shall be evidenced by certificates in such form as the appropriate officers of the corporation may from time to time prescribe; provided that the board of directors may provide by resolution or resolutions that some or all of the shares of classes or series of stock of the corporation may be represented by uncertificated shares. Notwithstanding the foregoing, each holder of uncertificated shares shall be entitled, upon request, to a certificate representing such shares. Shares
represented by certificates shall be numbered and registered in a share register as they are issued. Share certificates shall exhibit the name of the registered holder and the number and class of shares and the series, if any, represented thereby and the par value of each share or a statement that such shares are without par value as the case may be. Except as otherwise provided by law, the rights and obligations of the holders of uncertificated shares and the rights and obligations of the holders of certificated shares of the same class and series shall be identical.
Section 2. Transfer of Shares.
Subject to valid transfer restrictions and to stop-transfer orders directed in good faith by the corporation to any transfer agent to prevent possible violations of federal or state securities laws, rules or regulations, or for any other lawful purpose, upon surrender to the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignment, or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate and record the transaction upon its books. The board of directors may also make such additional rules and regulations as it may deem expedient concerning the issue, transfer and registration of shares of stock of the corporation and concerning the registration of pledges of uncertificated shares.
Section 3. Fixing Record Date.
For the purpose of determining shareholders entitled to notice of or to vote at any meeting of shareholders or any adjournment thereof, or entitled to receive payment of any dividend, or in order to make a determination of shareholders for any other proper purpose, the board of directors may provide that the stock transfer books shall be closed for a stated period but not to exceed, in any case, sixty days. If the stock transfer books shall be closed for the purpose of determining shareholders entitled to notice of or to vote at a meeting of shareholders, such books shall be closed for at least ten days immediately preceding such meeting. In lieu of closing the stock transfer books, the board of directors may fix in advance a date as the record date for any such determination of shareholders, such date, in any case, to be not more than sixty days and, in case of a meeting of shareholders, not less than ten days prior to the date on which the particular action requiring such determination of shareholders is to be taken. If the stock transfer books are not closed and no record date is fixed, the record date for the determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be the date next preceding the date on which the notice is mailed, and the record date for the determination of shareholders for any other purpose shall be the date on which the board of directors adopts the resolution relating thereto. When a determination of shareholders entitled to vote at any meeting of shareholders has been made as herein provided, such determination may apply to any adjournment thereof except where the determination has been made through the closing of stock transfer books and the stated period of closing has expired.
Section 4. Registered Shareholders.
The corporation shall be entitled to recognize the exclusive right of a person (including any shareholder registered in a book-entry or direct registration system maintained by the corporation or by a transfer agent or by a registrar designated by the board of directors) as the owner of the share or shares to receive dividends, and to vote as such owner, and for all other purposes as such owner; and the corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.
Section 5. Lost Certificate.
The board of directors may direct a new certificate or certificates to be issued or may register uncertificated shares in place of any certificate or certificates theretofore issued by the corporation alleged
to have been lost or destroyed, upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost or destroyed. When authorizing such issue of a new certificate or certificates, the board of directors may, in its discretion and as a condition precedent to the issuance thereof, require the owner of such lost or destroyed certificate or certificates, or his legal representative, to advertise the same in such manner as it shall require and/or corporation a bond in such sum as it may direct as indemnity that may be made against the corporation with respect to the alleged loss or destruction of any such certificate, the issuance of such new certificate or the registration of such uncertificated shares.
ARTICLE X
GENERAL
Section 1. Dividends.
The board of directors may from time to time declare, and the corporation may pay, dividends on its outstanding shares of capital stock in cash, in property, or in its own shares, except when the declaration or payment thereof would be contrary to statute or the restated certificate of incorporation. Such dividends may be declared at any regular or special meeting of the board, and the declaration and payment shall be subject to all applicable provisions of law, the restated certificate of incorporation, and these bylaws.
Section 2. Reserves.
Before payment of any dividend, there may be set aside out of any funds of the corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, deem proper as a reserve fund to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the corporation, or for such other purpose as the directors shall think conducive to the interest of the corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.
Section 3. Annual Statement.
The chairman of the board, the president or the board of directors shall present at each annual meeting and when called for by vote of the shareholders at any special meeting of the shareholders, a full and clear statement of the business and condition of the corporation.
Section 4. Checks.
All checks or demands for money and notes of the corporation shall be signed by such officer or officers or such other person or persons as the board of directors may from time to time designate.
Section 5. Corporate Records.
The corporation shall keep at its registered office or principal place of business, or at the office of its transfer agent or registrar, a record of its shareholders giving the names and addresses of all shareholders and the number and class of shares held by each. All other books and records of the corporation may be kept at such place or places within or without the State of Delaware as the board of directors may from time to time determine.
Section 6. Seal.
The corporate seal shall have inscribed thereon the name of the corporation. The seal may be used by causing it or a facsimile thereof to be impressed, affixed or reproduced.
Section 7. Amendment.
These bylaws may be altered, amended or repealed, or new bylaws may be adopted at any annual meeting of the shareholders or at any special meeting of the shareholders at which a quorum is present or represented, by the affirmative vote of the holders of a majority of the shares entitled to vote at such meeting and present or represented thereat, or by the affirmative vote of a majority of the board of directors at any regular meeting of the board or at any special meeting of the board. Notwithstanding the foregoing, the affirmative vote of the holders of at least seventy percent (70%) of the voting power of all of the Voting Stock then outstanding, voting together as a single class, shall be required to alter, amend, repeal, or adopt any provision inconsistent with Section 4 of Article II , Section 12 of Article II , Section 2 of Article III , Section 3 of Article III , Section 4 of Article III , Section 5 of Article III , this Section 7 of Article X , or Article Twelfth, Article Fifteenth, Article Sixteenth, or Article Seventeenth of the restated certificate of incorporation; except that an amendment to extend the duration of Article Seventeenth may be adopted by the affirmative vote of the holders of at least a majority of such voting power.
EXHIBIT 4(i)(e)
COMMERCIAL METALS COMPANY
AND
JPMORGAN CHASE BANK
TRUSTEE
DATED AS OF NOVEMBER 12, 2003
TO
INDENTURE
DATED AS OF JULY 31, 1995
5.625% SENIOR NOTES DUE 2013
TABLE OF CONTENTS
PAGE ---- ARTICLE ONE DEFINITION OF TERMS.......................................................... 1 Section 101. Definitions................................................ 1 ARTICLE TWO GENERAL TERMS AND CONDITIONS OF THE NOTES.................................... 3 Section 201. Designation................................................ 3 Section 203. Denomination............................................... 3 Section 204. Redemption................................................. 3 Section 205. Additional Notes........................................... 3 Section 206. Appointment of Agents...................................... 4 ARTICLE THREE REDEMPTION OF THE NOTES...................................................... 4 Section 301. Optional Redemption by Company............................. 4 Section 302. No Sinking Fund............................................ 5 ARTICLE FOUR SUPPLEMENTAL INDENTURES...................................................... 5 Section 401. Supplemental Indentures with Consent of Securityholders.... 5 ARTICLE FIVE REMEDIES ........................................................... 6 Section 501. Events of Default.......................................... 6 ARTICLE SIX COVENANTS ........................................................... 6 Section 601. Available Information...................................... 6 ARTICLE SEVEN MISCELLANEOUS ........................................................... 6 Section 701. Ratification of Indenture.................................. 6 Section 702. Trustee Makes No Representations........................... 6 Section 703. Governing Law.............................................. 6 Section 704. Severability............................................... 7 Section 705. Counterparts............................................... 7 |
SUPPLEMENTAL INDENTURE, dated as of November 12, 2003 (the "SUPPLEMENTAL INDENTURE"), between Commercial Metals Company, a corporation duly organized and existing under the laws of the State of Delaware, having its principal office at 6565 N. MacArthur, Irving, Texas (the "COMPANY"), and JPMorgan Chase Bank, a New York banking corporation, as trustee (the "TRUSTEE") under the Indenture (as hereinafter defined).
RECITALS
WHEREAS, the Company executed and delivered the Indenture, dated as of July 31, 1995, to JPMorgan Chase Bank (formerly The Chase Manhattan Bank (successor by merger to The Chase Manhattan Bank, N.A.)), as trustee (the "EXISTING INDENTURE," and as heretofore supplemented, the "INDENTURE"), to provide for the issuance of the Company's unsecured debentures, notes or other evidences of indebtedness (the "SECURITIES"), in one or more series;
WHEREAS, pursuant to Section 901 of the Existing Indenture, the Company desires to provide for the issuance of a new series of its Securities to be known as its 5.625% Senior Notes due 2013 (the "NOTES"), and to establish the forms thereof, as in Section 201 of the Existing Indenture provided, and to set forth the terms thereof, as in Section 301 of the Existing Indenture provided;
WHEREAS, the Board of Directors of the Company, pursuant to resolutions duly adopted by the Board of Directors on October 31, 2003 and resolutions duly adopted by the Pricing Committee on November 6, 2003, has duly authorized the issuance of up to $200,000,000 aggregate principal amount of Securities, and has authorized the appropriate officers of the Company to execute any and all appropriate documents necessary or appropriate to effect such issuance;
WHEREAS, the Company has requested that the Trustee execute and deliver this Supplemental Indenture; and
WHEREAS, all things necessary to make this Supplemental Indenture a valid agreement of the Company, in accordance with its terms, and to make the Notes, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company, have been done;
NOW THEREFORE, in consideration of the premises and the purchase and acceptance of the Notes by the Holders thereof, and for the purpose of setting forth, as provided in the Indenture, the forms and terms of the Notes, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Notes as follows:
ARTICLE ONE
DEFINITION OF TERMS
Section 101. Definitions.
Unless the context otherwise requires:
(a) each term defined in the Indenture has the same meaning when used in this Supplemental Indenture;
(b) each term defined anywhere in this Supplemental Indenture has the same meaning throughout;
(c) the singular includes the plural and vice versa;
(d) headings are for convenience of reference only and do not affect interpretation; and
(e) the following terms, as used herein, have the following meanings:
"Additional Notes" means, subject to Section 205 of this Supplemental Indenture, 5.625% Senior Notes due 2013 issued from time to time after the date of this Supplemental Indenture under the terms of the Existing Indenture and this Supplemental Indenture (other than pursuant to Section 304, 305, 306, 906 or 1107 of the Existing Indenture and other than Exchange Notes issued pursuant to an exchange offer for other Notes outstanding under the Indenture).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Notes" means the Notes issued pursuant to the Indenture and this Supplemental Indenture in connection with an Exchange Offer pursuant to the Registration Rights Agreement.
"Exchange Offer" has the meaning specified in the Registration Rights Agreement.
"Existing Indenture" has the meaning specified in the first recital of this Supplemental Indenture.
"Initial Notes" means all Notes other than Exchange Notes.
"Initial Purchasers" means Goldman, Sachs & Co., Banc of America Securities LLC, ABN AMRO Incorporated and Tokyo-Mitsubishi International plc.
"Notes" has the meaning stated in the second recital of this Supplemental Indenture.
"Registration Rights Agreement" means that certain Exchange and Registration Rights Agreement, dated as of November 12, 2003, among the Company and the Initial Purchasers.
"Rule 144A" means Rule 144A under the Securities Act, as the same may be amended from time to time.
"Securities" has the meaning specified in the first recital of this Supplemental Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Special Interest" has the meaning specified in the Registration Rights Agreement.
ARTICLE TWO
GENERAL TERMS AND CONDITIONS OF THE NOTES
Section 201. Designation.
There is hereby authorized and established a series of Securities under the Indenture. Such series of Securities is hereby designated as the "5.625% Senior Notes due 2013." The aggregate principal amount of the Notes to be issued on the date hereof shall be $200,000,000.
Section 202. Form.
Provisions relating to the Initial Notes and the Exchange Notes are set forth in Appendix A hereto. The Initial Notes and the Trustee's certificate of authentication thereon shall be substantially in the form of Exhibit 1 to Appendix A. The Exchange Notes and the Trustee's certificate of authentication thereon shall be substantially in the form of Exhibit 2 to Appendix A. The Notes may have notations, legends or endorsements required by law, stock exchange rule and agreements to which the Company is subject, if any, or usage. Each Note shall be dated the date of its authentication. The terms of the Notes set forth in Appendix A are hereby incorporated in and expressly made part of this Supplemental Indenture.
Section 203. Denomination.
The Company will issue the Notes in denominations of $1,000 and integral multiples of $1,000 in excess thereof; provided, however, that any Notes issued in certificated form to IAIs (as defined in Appendix hereto) shall be in denominations of $100,000 and integral multiples of $1,000 in excess thereof.
Section 204. Redemption.
The Notes are subject to redemption at the option of the Company as described in Article Three hereof.
Section 205. Additional Notes.
(a) The Company shall be entitled, subject to its compliance with this
Section 205, to issue Additional Notes under the Indenture. Additional Notes
shall have the same terms and conditions as the Initial Notes issued on the date
of this Supplemental Indenture or Exchange Notes, except for issue date, issue
price, pre-issuance accrued interest and first interest payment date. The
Initial Notes, any Additional Notes and all Exchange Notes shall be treated as a
single class for all purposes under the Indenture, including waivers,
amendments, redemptions and offers to purchase, but may be treated as separate
classes, with, among other things, separate issue prices, for United States
federal tax purposes.
(b) With respect to any issuance of Additional Notes, the Company shall deliver to the Trustee a Board Resolution or an Officers' Certificate, and, if the Company elects, a supplemental indenture, which shall together provide the following information:
(1) the aggregate principal amount of such Additional Notes to be authenticated and delivered pursuant to the Indenture;
(2) the issue date, issue price, pre-issuance accrued interest and first interest payment date, and the CUSIP number of such Additional Notes; and
(3) whether such Additional Notes shall be Transfer Restricted Securities and issued in the form of Initial Notes as set forth in Exhibit 1 to Appendix A or shall be issued in the form of Exchange Notes as set forth in Exhibit 2 to Appendix A.
Section 206. Appointment of Agents.
The Trustee will initially be the Security Registrar and Paying Agent for the Notes and will act as such only at its offices in New York, New York.
ARTICLE THREE
REDEMPTION OF THE NOTES
Section 301. Optional Redemption by Company.
(a) The Notes may be redeemed, as a whole or in part, at any time and
from time to time, at the sole election of the Company, upon notice as provided
in the Indenture (except that, notwithstanding the provisions of Section 1104 of
the Indenture, any notice of redemption for the Notes given pursuant to said
Section need not set forth the Redemption Price but only the manner of
calculation thereof), at a Redemption Price equal to the greater of (1) 100% of
the principal amount of the Notes being redeemed and (2) the sum of the present
values, calculated as of the Redemption Date, of the remaining scheduled
payments of principal and interest on the Notes to be redeemed (exclusive of
interest accruing on the Redemption Date) discounted to the Redemption Date on a
semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at
the then current Treasury Rate plus 20 basis points, plus, in each case, accrued
and unpaid interest on the principal amount being redeemed to the Redemption
Date.
"Comparable Treasury Issue" means the United States Treasury security selected by an Independent Investment Banker as having a maturity comparable to the remaining term ("Remaining Life") of the Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the Notes.
"Comparable Treasury Price" means, with respect to any redemption date,
(1) the average of the Reference Treasury Dealer Quotations for such Redemption
Date, after excluding the highest and lowest Reference Treasury Dealer
Quotations, or (2) if the Trustee obtains fewer than four such Reference
Treasury Dealer Quotations, the average of all such quotations.
"Independent Investment Banker" means one of the Reference Treasury Dealers appointed by the Company to act as the Independent Investment Banker from time to time.
"Reference Treasury Dealer" means each of Goldman, Sachs & Co. and Banc of America Securities LLC and their respective successors, and two other firms that are primary U.S.
Government securities dealers (each a "Primary Treasury Dealer") which the Company shall specify from time to time; provided, however, that if any of them ceases to be a Primary Treasury Dealer, then the Company shall substitute another Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any Redemption Date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date.
"Treasury Rate" means, with respect to any Redemption Date, the rate per annum equal to: (1) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" or any successor publication which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities," for the maturity corresponding to the Comparable Treasury Issue; provided that, if no maturity is within three months before or after the Remaining Life of the Notes to be redeemed, yields for the two published maturities most closely corresponding to the Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from those yields on a straight line basis, rounding to the nearest month, or (2) if such release (or any successor release) is not published during the week preceding the calculation date or does not contain such yields, the rate per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Redemption Date. The Treasury Rate shall be calculated on the third Business Day preceding the Redemption Date.
(b) At or prior to the time of giving of any notice of redemption to the Holders of any Notes to be redeemed, the Company shall deliver an Officers' Certificate to the Trustee setting forth the calculation of the Redemption Price applicable to such redemption. The Trustee shall be under no duty to inquire into, may conclusively presume the correctness of, and shall be fully protected in relying upon, the Redemption Price as so calculated and set forth in such Officers' Certificate.
Section 302. No Sinking Fund.
The Notes are not entitled to the benefit of any sinking fund.
ARTICLE FOUR
SUPPLEMENTAL INDENTURES
Section 401. Supplemental Indentures with Consent of Securityholders.
No indenture supplemental to this Supplemental Indenture shall, without the consent of the Holder of each Outstanding Note, modify the obligation of the Company to deliver information as set forth in Section 601 of this Supplemental Indenture.
ARTICLE FIVE
REMEDIES
Section 501. Events of Default.
Pursuant to Section 501 of the Existing Indenture, an "Event of Default" with respect to the Notes shall also mean a default in the payment of Special Interest when it becomes due and payable, and continuance of such default for a period of 30 days.
ARTICLE SIX
COVENANTS
Section 601. Available Information.
Until such time as all Outstanding Notes are freely transferable
without restriction under the Securities Act, the Company (i) will use its
reasonable best efforts to be subject to the reporting requirements of Section
13 or Section 15(d) of the Exchange Act and to file in a timely manner all
reports and other documents required to be filed pursuant thereto or in
connection therewith and (ii) will take all actions necessary to permit resales
of the Notes pursuant to Rule 144A, including furnishing to any Holder (or owner
of a beneficial interest in a Note), or to any prospective purchaser designated
by such Holder or beneficial owner, upon request of such Holder or beneficial
owner, financial and other information required to be delivered under paragraph
(d)(4) of Rule 144A.
ARTICLE SEVEN
MISCELLANEOUS
Section 701. Ratification of Indenture.
The Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified and confirmed and all the terms, conditions and provisions thereof shall remain in full force and effect. This Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided.
Section 702. Trustee Makes No Representations.
The Trustee makes no representation as to the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely.
Section 703. Governing Law.
THIS SUPPLEMENTAL INDENTURE AND EACH NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES OF SUCH STATE THAT WOULD REQUIRE THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION.
Section 704. Severability.
In case any one or more of the provisions contained in this Supplemental Indenture or in the Notes shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Supplemental Indenture or of the Notes, but this Supplemental Indenture and the Notes shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein.
Section 705. Counterparts.
This Supplemental Indenture may be executed in any number of counterparts each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture 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.
COMMERCIAL METALS COMPANY
By: /s/ William B. Larson ------------------------------------- Name: William B. Larson Title: Vice President and Chief Financial Officer Attest: /s/ David M. Sudbury ------------------------------------ Name: David M. Sudbury Title: Vice President, Secretary and General Counsel |
JPMORGAN CHASE BANK
By: /s/ William G. Keenan ----------------------- Name: William G. Keenan Title: Vice President Attest: /s/ James D. Heaney -------------------- Name: James D. Heaney Title: Vice President |
APPENDIX A
PROVISIONS RELATING TO INITIAL NOTES
AND EXCHANGE NOTES
1. Definitions.
For the purposes of this Appendix A the following terms shall have the meanings indicated below; capitalized terms used and not defined in this Appendix A shall have the meanings ascribed to such terms in the Indenture:
"Agent Member" means any member of, or participant in, the Depository.
"Definitive Note" means a certificated Initial Note or Exchange Note bearing, if required, the restricted securities legend set forth in Section 2.3(d).
"Depository" means The Depository Trust Company, its nominees and their respective successors.
"Exchange Notes" means (1) the 5.625% Senior Notes due 2013 issued pursuant to the Indenture and the Supplemental Indenture in connection with a Registered Exchange Offer pursuant to the Registration Rights Agreement, and (2) Additional Notes, if any, issued pursuant to a registration statement filed with the Commission under the Securities Act.
"Global Note" means a global Initial Note or Exchange Note bearing the global securities legend set forth in Exhibit 1 or Exhibit 2 to this Appendix A, as the case may be, and, if required, the restricted securities legend set forth in Section 2.3(d).
"IAI" means an institutional "accredited investor" as described in Rule
501(a)(1), (2), (3) or (7) under the Securities Act
"Initial Purchasers" means (1) with respect to the Initial Notes issued as of the date of this Supplemental Indenture, Goldman, Sachs & Co., Banc of America Securities LLC, ABN AMRO Incorporated and Tokyo-Mitsubishi International plc., and (2) with respect to each issuance of Additional Notes, the Persons purchasing such Additional Notes under the related Purchase Agreement.
"Initial Notes" means (1) the 5.625% Senior Notes due 2013 issued under the Indenture and the Supplemental Indenture on about the date hereof, and (2) Additional Notes, if any, issued in a transaction exempt from the registration requirements of the Securities Act.
"Purchase Agreement" means(1) with respect to the Initial Notes issued as of the date of this Supplemental Indenture, the Purchase Agreement, dated November 6, 2003, among the Company and the Initial Purchasers, and (2) with respect to each issuance of Additional Notes, the purchase agreement or underwriting agreement among the Company and the Persons purchasing such Additional Notes.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registered Exchange Offer" means (1) with respect to the Initial Notes issued as of the date of this Supplemental Indenture, the offer by the Company, pursuant to the Registration Rights Agreement, to certain Holders of Initial Notes, to issue and deliver to such Holders, in exchange for the Initial Notes, a like aggregate principal amount of Exchange Notes registered under the Securities Act, (2) with respect to each issuance of Additional Notes issued in a transaction exempt from the registration requirements of the Securities Act, the registration rights agreement, if any, among the Company and the Persons purchasing such Additional Notes under the related Purchase Agreement.
"Registration Rights Agreement" means the Exchange and Registration Rights Agreement, dated November 12, 2003, among the Company and the Initial Purchasers, as such may be amended from time to time.
"Rule 144A" means Rule 144A under the Securities Act (including any successor rule thereto), as the same may be amended from time to time.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Registration Statement" means the registration statement filed by the Company in connection with the offer and sale of Initial Notes pursuant to the Registration Rights Agreement.
"Transfer Restricted Securities" means Notes that bear or are required to bear the legend set forth in Section 2.3(d) hereto.
2. The Notes.
2.1 Form and Dating.
(a) General. The Initial Notes are being offered and sold by the Company pursuant to the Purchase Agreement. The Initial Notes will be resold initially only to (1) QIBs in reliance on Rule 144A and (2) IAIs in transactions exempt from the registration requirements of the Securities Act. Initial Notes resold to QIBs in reliance on Rule 144A shall be issued initially in the form of one or more permanent Global Notes in definitive, fully registered form, which shall be deposited on behalf of the purchasers of the Initial Notes represented thereby with the Trustee, as custodian for the Depository (or with such other custodian as the Depository may direct), and registered in the name of the Depository or a nominee of the Depository, duly executed by the Company and authenticated by the Trustee as provided in the Indenture. The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a Global Note deposited with or on behalf of the Depository.
The Company shall execute and the Trustee shall, in accordance with this Section 2.1(b) and pursuant to a Company Order, authenticate and deliver initially one or more Global Notes that (i) shall be registered in the name of the Depository for such Global Note or Global Notes or the nominee of such Depository and (ii) shall be delivered by the Trustee to such Depository or pursuant to such Depository's instructions or held by the Trustee as custodian for the Depository.
Agent Members shall have no rights under the Indenture and the Supplemental Indenture with respect to any Global Note held on their behalf by the Depository, or by the Trustee as the custodian of the Depository, or under any Global Note, and the Company, the Trustee and any agent of the Company or the Trustee shall be entitled to treat the Depository or its nominee, as the case may be, as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee from giving effect to any written certification, proxy or other authorization furnished by the Depository or impair, as between the Depository and its Agent Members, the operation of customary practices of such Depository governing the exercise of the rights of a holder of a beneficial interest in any Global Note.
Ownership of beneficial interests in any Global Notes will be shown on, and transfers thereof will be effected only through, records maintained by the Depository or its nominee (with respect to interests of Agent Members) and the records of the Agent Members (with respect to interests of Persons other than Agent Members). None of the Company, the Trustee, any Paying Agent or the Security Registrar will have any responsibility of liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a Global Note or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
(c) Definitive Notes. Except as provided in this Section 2.1, Section 2.3 or Section 2.4, owners of beneficial interests in Global Notes shall not be entitled to receive physical delivery of certificated Securities. Purchasers of Initial Notes who are IAIs and are not QIBs will receive Definitive Notes; provided, however, that upon transfer of such Definitive Note to a QIB, such Definitive Note will, unless the Global Note has previously been exchanged, be exchanged for an interest in a Global Note pursuant to the provisions of Section 2.3.
2.2 Authentication. The Trustee shall authenticate and deliver:
(1) as of the date of the Supplemental Indenture, Initial Notes for original
issue in an aggregate principal amount of $200,000,000, (2) from time to time,
any Additional Notes for original issue in aggregate principal amounts specified
in an Officers' Certificate pursuant to Section 205 of the Supplemental
Indenture, and (3) Exchange Notes for issue only in exchange for Initial Notes
surrendered in a Registered Exchange Offer pursuant to the Registration Rights
Agreement, for a like principal amount of Initial Notes, in each case upon a
Company Order. Such order shall specify the amount of the Notes to be
authenticated and the date on which the original issue of Notes is to be
authenticated.
2.3 Transfer and Exchange.
(a) Transfer and Exchange of Definitive Notes. When Definitive Notes are presented to the Security Registrar with a request:
(x) to register the transfer of such Definitive Notes; or
(y) to exchange such Definitive Notes for an equal principal amount of Definitive Notes of other authorized denominations,
the Security Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the Definitive Notes surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Security Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing; and
(ii) if such Definitive Notes are required to bear a restricted securities legend, they are being transferred or exchanged pursuant to an effective registration statement under the Securities Act, pursuant to Section 2.3(b) or pursuant to clause (A), (B) or (C) below, and are accompanied by the following additional information and documents, as applicable:
(A) if such Definitive Notes are being delivered to the Security Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect;
(B) if such Definitive Notes are being transferred to the Company, a certification to that effect; or
(C) if such Definitive Notes are being transferred
(x) pursuant to an exemption from registration in accordance
with Rule 144A or Rule 144; or (y) in reliance upon another
exemption from the requirements of the Securities Act: (i) a
certification to that effect (in the form set forth on the
reverse of the Note) and (ii) if the Company so requests, an
opinion of counsel or other evidence reasonably satisfactory
to it as to the compliance with the restrictions set forth in
the legend set forth in Section 2.3(d)(i).
(b) Restrictions on Transfer of a Definitive Note for a Beneficial Interest in a Global Note. A Definitive Note may not be exchanged for a beneficial interest in a Global Note except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by appropriate instruments of transfer, in form satisfactory to the Trustee, together with:
(i) certification, in the form set forth on the reverse of the Note, that such Definitive Note is being transferred to a QIB in accordance with Rule 144A; and
(ii) written instructions directing the Trustee to make, or to direct the custodian of the Notes to make, an adjustment on its books and records with respect to such Global Note to reflect an increase in the aggregate principal amount of the Notes represented by the Global Note, such instructions to contain information regarding the Depository account to be credited with such increase;
then the Trustee shall cancel such Definitive Note and cause, or direct the custodian of the Notes to cause, in accordance with the standing instructions and procedures existing between the Depository and the custodian, the aggregate principal amount of Notes represented by the Global Note to be increased by the aggregate principal amount of the Definitive Note to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Global Note equal to the principal amount of the Definitive Note so canceled. If no Global Note is then outstanding and the Global Note has not been previously exchanged pursuant to Section 2.4, the Company shall issue and the Trustee shall authenticate, upon a Company Order, a new Global Note in the appropriate principal amount.
(c) Transfer and Exchange of Global Notes.
(i) The transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depository, in accordance with this Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depository therefor. A transferor of a beneficial interest in a Global Note shall deliver to the Security Registrar a written order given in accordance with the Depository's procedures containing information regarding the participant account of the Depository to be credited with a beneficial interest in the Global Note. The Security Registrar shall, in accordance with such instructions instruct the Depository to credit to the account of the Person specified in such instructions a beneficial interest in the Global Note and to debit the account of the Person making the transfer the beneficial interest in the Global Note being transferred.
(ii) If the proposed transfer is a transfer of a beneficial interest in one Global Note to a beneficial interest in another Global Note, the Security Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Note to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Security Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of the Global Note from which such interest is being transferred.
(iii) Notwithstanding any other provisions of this Appendix A (other than the provisions set forth in Section 2.4), a Global Note may not be transferred as a whole except by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository.
(iv) In the event that a Global Note is exchanged for Definitive Notes pursuant to Section 2.4 of this Appendix A, prior to the consummation of a Registered Exchange Offer or the effectiveness of a Shelf Registration Statement with respect to such Notes, such Notes may be exchanged only in accordance with such procedures as are substantially consistent with the provisions of this Section 2.3 (including the certification requirements set forth on the reverse of the Initial Notes intended to ensure that such transfers comply with Rule 144A) and such other procedures as may from time to time be adopted by the Company.
(d) Legend.
(i) Except as permitted by the following paragraphs (ii),
(iii) and (iv), each Note certificate evidencing the Global Notes and
the Definitive Notes (and all Notes issued in exchange therefor or in
substitution thereof) shall bear a legend in substantially the
following form:
THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) BY THE INITIAL INVESTORS
(1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) TO AN INSTITUTIONAL ACCREDITED INVESTOR IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (3) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (4) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) BY SUBSEQUENT INVESTORS, AS SET FORTH IN (A) ABOVE, IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES.
Each Definitive Note will also bear the following additional legend:
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE SECURITY REGISTRAR SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH SECURITY REGISTRAR MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.
(ii) Upon any sale or transfer of a Transfer Restricted Note
(including any Transfer Restricted Note represented by a Global Note)
pursuant to Rule 144 under the Securities Act, the Security Registrar
shall permit the transferee thereof to exchange such Transfer
Restricted Note for a certificated Note that does not bear the legend
set forth above and rescind any restriction on the transfer of such
Transfer Restricted Note, if the transferor thereof certifies in
writing to the Security Registrar that such sale or transfer was made
in reliance on Rule 144 (such certification to be in the form set forth
on the reverse of the Note).
(iii) After a transfer of any Initial Notes pursuant to and during the period of the effectiveness of a Shelf Registration Statement with respect to such Initial Notes all requirements pertaining to legends on such Initial Note will cease to apply, the requirements requiring any such Initial Note issued to certain Holders be issued in global form will cease to apply, and a certificated Initial Note or an Initial Note in global form, in each case without restrictive transfer legends, will be available to the transferee of the Holder of such Initial Notes upon exchange of such transferring Holder's certificated Initial Note or directions to transfer such Holder's interest in the Global Note, as applicable.
(iv) Upon the consummation of a Registered Exchange Offer with respect to the Initial Notes, all requirements pertaining to such Initial Notes that Initial Notes issued to certain Holders be issued in global form will still apply with respect to Holders of such Initial Notes that do not exchange their Initial Notes, and Exchange Notes in certificated or global form will be available to Holders that exchange such Initial Notes in such Registered Exchange Offer.
(e) Cancellation or Adjustment of Global Note. At such time as all beneficial interests in a Global Note have either been exchanged for Definitive Notes, redeemed, repurchased or canceled, such Global Note shall be returned to the Depository for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for Definitive Notes, redeemed, repurchased or canceled, the principal amount of Notes represented by such Global Note shall be reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the custodian for such Global Note) with respect to such Global Note, by the Trustee or the custodian, to reflect such reduction.
(f) Obligations with Respect to Transfers and Exchanges of Notes.
(i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Definitive Notes and Global Notes at the Security Registrar's request.
(ii) No service charge shall be made for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax, assessments or similar governmental charge payable in connection therewith.
(iii) The Security Registrar shall not be required to register the transfer of or exchange of (a) any Definitive Note selected for redemption in whole or in part pursuant to Article 3 of this Indenture, except the unredeemed portion of any Definitive Note being redeemed in part, or (b) any Note for a period beginning 15 days before the mailing of a notice of an offer to repurchase or redeem Notes or 15 days before an interest payment date.
(iv) Prior to the due presentation for registration of transfer of any Note, the Company, the Trustee, the Paying Agent, or the Security Registrar may deem and treat the Person in whose name a Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and premium, if any, and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Company, the Trustee, the Paying Agent, or the Security Registrar shall be affected by notice to the contrary.
(v) All Notes issued upon any transfer or exchange pursuant to the terms of this Indenture shall evidence the same debt and shall be entitled to the same benefits under this Indenture as the Notes surrendered upon such transfer or exchange.
(g) No Obligation of the Trustee.
(i) The Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depository or other Person with respect to the accuracy of the records of the Depository or its nominee or of any participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depository) of any notice (including any notice of redemption) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to or upon the order of the registered Holders
(which shall be the Depository or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depository subject to the applicable rules and procedures of the Depository. The Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its members, participants and any beneficial owners.
(ii) The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
2.4 Definitive Notes.
(a) A Global Note deposited with the Depository or with the Trustee as custodian for the Depository pursuant to Section 2.1 shall be transferred to the beneficial owners thereof in the form of Definitive Notes in an aggregate principal amount equal to the principal amount of such Global Note, in exchange for such Global Note, only if such transfer complies with Section 2.3 and (i) the Depository notifies the Company that it is unwilling or unable to continue as Depository for such Global Note or if at any time such Depository ceases to be a "clearing agency" registered under the Exchange Act and a successor Depository is not appointed by the Company within 90 days of such notice, or (ii) an Event of Default has occurred and is continuing or (iii) the Company, in its sole discretion, notifies the Trustee in writing that it elects to cause the issuance of Definitive Notes under this Indenture.
(b) Any Global Note that is to be transferred to the beneficial owners thereof pursuant to this Section 2.4 shall be surrendered by the Depository to the Trustee located at its principal corporate trust office, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations. Any portion of a Global Note transferred pursuant to this Section 2.4 shall be executed, authenticated and delivered only in denominations of $1,000 principal amount and any integral multiple thereof and registered in such names as the Depository shall direct. Any Definitive Note delivered in exchange for an interest in a Transfer Restricted Note shall, except as otherwise provided by Section 2.3(d), bear the restricted securities legend set forth therein.
(c) Subject to the provisions of Section 2.4(b), the registered Holder of a Global Note shall be entitled to grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under this Indenture or the Notes.
(d) In the event of the occurrence of one of the events specified in Section 2.4(a)(i), (ii) or (iii), the Company shall promptly make available to the Trustee a reasonable supply of Definitive Notes in definitive, fully registered form without interest coupons.
EXHIBIT 10(i)(a)
PURCHASE AND SALE AGREEMENT
DATED AS OF JUNE 20, 2001
BETWEEN
VARIOUS ENTITIES LISTED ON SCHEDULE I,
AS THE ORIGINATORS
AND
CMC RECEIVABLES, INC.
THIS PURCHASE AND SALE AGREEMENT (this "Agreement"), dated as of June 20, 2001, is entered into between VARIOUS ENTITIES LISTED ON SCHEDULE I (each, an "Originator"; and collectively, the "Originators"), and CMC RECEIVABLES, INC., a Delaware corporation (the "Company").
DEFINITIONS
Unless otherwise indicated herein, capitalized terms used in this Agreement are defined in the Receivables Purchase Agreement dated of even date herewith (as the same may be amended, supplemented or otherwise modified from time to time, the "Receivables Purchase Agreement") among the Company, as Seller, Three Rivers Funding Corporation, as Buyer (the "Buyer"), and Commercial Metals Company (herein sometimes referred to as CMC ("CMC")), as Servicer. All references herein to months are to calendar months unless otherwise expressly indicated.
BACKGROUND:
1. The Company is a special purpose corporation, all of the issued and outstanding shares of which are owned by CMC;
2. The Originators generate Receivables in the ordinary course of their businesses;
3. The Originators, in order to finance their respective businesses, wish to sell certain of their Receivables to the Company, and the Company is willing to purchase such Receivables from the Originators, on the terms and subject to the conditions set forth herein; and
4. The Originators and the Company intend this transaction to be a true sale of certain Receivables by each Originator to the Company, providing the Company with the full benefits of ownership of such Receivables, and the Originators and the Company do not intend the transactions hereunder to be characterized as loans from the Company to any Originator.
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the parties hereto hereby agree as follows:
ARTICLE I
AGREEMENT TO PURCHASE AND SELL
SECTION 1.1 Agreement To Purchase and Sell. On the terms and subject to the conditions set forth in this Agreement, each Originator, severally and for itself, agrees to sell to the Company, and the Company agrees to purchase from such Originator, from time to time on or after the Closing Date, but before the Purchase and Sale Termination Date, all of such Originator's right, title and interest in and to:
(a) each Receivable of such Originator (but only if, in the
case of CMC, such Receivable was generated by or owing to an Operating Division,
and only if, in the case of CMC Steel Fabricators, Inc., such Receivable was
generated by the sale of goods or services by its Hope, Arkansas facility),
other than Receivables generated by any Obligor that (i) is a government or a
government subdivision, affiliate, or agency, (ii) is not a U.S. resident, or
(iii) is listed on Schedule 1.1 attached hereto, which, so long as no
Termination Event or Potential Termination Event under the Receivable Purchase
Agreement shall have occurred and be continuing, may be amended or supplemented
from time to time by any Originator in a writing delivered by the Originator to
the Company and the Buyer setting forth the reasons for such amendment or
supplement (each such Receivable, a "Purchased Receivable"), that existed and
was owing to such Originator at the closing of such Originator's business on May
31, 2001 (the "Cut-off Date"); any Receivable once purchased by the Company will
continue to be owned by the Company, notwithstanding any subsequent listing of
the Receivable's Obligor on Schedule 1.1 (it being understood and agreed that
the effect of listing on Schedule 1.1 pursuant to any such amendment or
supplement an Obligor the Receivables of which were previously included in the
pool of Purchased Receivables, together with all such previous listings pursuant
to amendments or supplements to Schedule 1.1, will not result in the pool of
Purchased Receivables, taken as a whole, having credit or collection
characteristics which, based solely on the facts known to the Company and the
applicable Originator at the time of such amendment or supplement, are
reasonably anticipated to be materially worse than those which would have
prevailed in the absence of such amendments and supplements; provided, that this
parenthetical shall not apply to an amendment or supplement if, after giving
effect to the exclusion of all Receivables of Obligors listed on Schedule 1.1
from the existing pool of Purchased Receivables as of the last day of the most
recently completed Accounting Period, the aggregate Account Balances of all
Purchased Receivables which constitute Eligible Receivables would equal or
exceed $200,000,000 and the Buyer's Allocation would be less than or equal to
80%);
(b) each Purchased Receivable generated by such Originator from and including the Cut-off Date to and including the Purchase and Sale Termination Date;
(c) all monies due or to become due to such Originator with respect to any of the foregoing;
(d) all books and records of such Originator related to any of the foregoing, and all Purchase Documents to which such Originator is a party, together with all rights (but not obligations) of such Originator thereunder; and
(e) all products and proceeds of any of the foregoing, including, without limitation, (i) all funds received by such Originator, the Company or CMC, as Servicer (as defined in the Receivables Purchase Agreement and herein so called), from or on behalf of the Obligors in payment of any amounts owed (including, without limitation, invoice price, finance charges, interest and all other charges) in respect of Purchased Receivables; (ii) all amounts (including any insurance proceeds) to be applied by the Company or the Servicer to any amount owed in respect of any Purchased Receivable; and (iii) all net proceeds of sale or other disposition of repossessed goods or
other collateral or property of the Obligors in respect of Purchased Receivables or any other parties directly or indirectly liable for payment of such Purchased Receivables.
All purchases shall be made without recourse, but shall be made pursuant to, and in reliance upon, the representations, warranties and covenants of the Originators set forth in this Agreement and in each other Purchase Document. No obligation or liability to any Obligor on any Purchased Receivable is intended to be assumed by the Company hereunder, and any such assumption is expressly disclaimed. The Company's foregoing commitment to purchase Purchased Receivables and the proceeds and rights described in clauses (c) through (e) (collectively, the "Related Rights") is herein called the "Purchase Facility."
SECTION 1.2 Timing of Purchases.
(a) Closing Date Purchases. Each Purchased Receivable and Related Rights generated by each Originator prior to the Cut-off Date shall be deemed to have been sold by such Originator to the Company on the Closing Date.
(b) Subsequent Purchases. After the Closing Date, until the Purchase and Sale Termination Date, each Purchased Receivable and the Related Rights generated by each Originator shall be deemed to have been sold by such Originator to the Company immediately (and without further action) upon the creation of such Purchased Receivable.
SECTION 1.3 Consideration for Purchases. On the terms and subject to the conditions set forth in this Agreement, the Company agrees to make Purchase Price payments to the Originators in accordance with Article III.
SECTION 1.4 Purchase and Sale Termination Date. The "Purchase and Sale Termination Date" shall be the earliest to occur of (a) the date the Purchase Facility is terminated pursuant to Section 8.2 and (b) the Payment Date 10 days following the day on which Originators shall have given written notice to the Company at or prior to 10:00 a.m. (Dallas, Texas time) that the Originators desire to terminate this Agreement; provided, that in either case the Company shall have satisfied all of its obligations under the Receivables Purchase Agreement and such agreement shall have been terminated in accordance with its terms.
SECTION 1.5 Intention of the Parties. It is the express intent of the
parties hereto that the sale and transfers of the Purchased Receivables and
Related Rights by the Originators to the Company, as contemplated by this
Agreement, shall be treated as sales (without recourse except as provided
herein) of all of the Originators' right, title and interest in, to and under
the Purchased Receivables and Related Rights, and not as loans secured by the
Purchased Receivables and Related Rights. If, however, notwithstanding the
intent of the parties, such transactions are deemed to be loans, each Originator
hereby grants to the Company a first priority security interest in all of such
Originator's right, title and interest in and to (i) the Purchased Receivables
and the Related Rights now existing and hereafter created by such Originator,
(ii) all monies due or to become due and all
amounts received with respect thereto, (iii) all books and records of such Originator related to any of the foregoing, and all Purchase Documents to which such Originator is a party, together with all rights (but not obligations) of such Originator thereunder, and (iv) all products and proceeds of any of the foregoing.
SECTION 1.6 Additional Originators. Additional Persons may be added as Originators hereunder, with the prior written consent of the Company and Mellon Bank, N.A. (the "Administrator"), which consent may be given or withheld in each of the Company's and the Administrator's sole discretion; provided, that the following conditions are satisfied on or before the date of such addition:
(a) The Servicer shall have given the Administrator and the Company at least ten Business Days prior written notice of such proposed addition and the identity of the proposed additional Originator and shall have provided such other information with respect to such proposed additional Originator as the Administrator may reasonably request;
(b) such proposed additional Originator has executed and delivered to the Company and the Administrator an agreement substantially in the form attached hereto as Exhibit C (a "Joinder Agreement");
(c) such proposed additional Originator has delivered to the Company and the Administrator each of the documents with respect to such Originator described in Sections 4.1 and 4.2;
(d) the receivables intended to be sold by such additional Originator to the Company hereunder shall be Purchased Receivables; and
(e) no Purchase and Sale Termination Event shall have occurred and be continuing.
ARTICLE II
PURCHASE REPORT; CALCULATION OF PURCHASE PRICE
SECTION 2.1 Purchase Report. On the Closing Date and at least two (2) Business Days prior to each Settlement Date, the Servicer shall deliver to the Company and each Originator a report in substantially the form of Exhibit A (each such report being herein called a "Purchase Report") setting forth, among other things:
(a) Purchased Receivables purchased by the Company from each Originator on the Closing Date (in the case of the Purchase Report to be delivered on the Closing Date);
(b) Purchased Receivables purchased by the Company from each Originator during the most recently completed Accounting Period;
(c) the calculation of the Purchase Price for all Purchased Receivables; and
(d) the calculation of any reductions of the Purchase Price for any Purchased Receivables as provided in Sections 3.3 (a), (b) and (c).
SECTION 2.2 Calculation of Purchase Price. The "Purchase Price" to be paid to each Originator for each Purchased Receivable that is purchased hereunder from such Originator shall be equal to the product of (a) the Account Balance of such Purchased Receivable on the relevant Payment Date and (b) the difference, expressed as a percentage, of (i) one minus (ii) the Fair Market Value Discount on the relevant Payment Date.
As used herein, "Fair Market Value Discount" means 2.0094%, as such percentage may be increased, decreased or otherwise adjusted by the Company from time to time (without retroactive effect) and with the prior consent of each Originator, such consent not to be unreasonably withheld; and "Payment Date" means (i) the Closing Date and (ii) each Business Day thereafter that Originators are open for business.
SECTION 2.3 Payment of Fees. Each Originator hereby agrees to pay to the Company its Pro Rata Share of all reasonable fees and expenses now or hereafter incurred by the Company in connection with this Agreement, including but not limited to all attorneys', directors' and facility fees and expenses (including without limitation any Program Fees and other costs, indemnities, and expenses incurred by the Company under, and any "deemed collections" of the Company pursuant to Sections 5.03(c) or 6.04 of, the Receivables Purchase Agreement).
As used herein, "Pro Rata Share" means, at any time as to any Originator, the ratio of (i) the sum of the Account Balances of the Purchased Receivables from such Originator, to (ii) the aggregate Account Balances of all Purchased Receivables from all Originators.
ARTICLE III
PAYMENT OF PURCHASE PRICE
SECTION 3.1 Initial Purchase Price Payment. On the terms and subject to the conditions set forth in this Agreement, the Company agrees to pay to each Originator the Purchase Price for the purchase to be made from such Originator on the Closing Date partially in cash (in an amount to be agreed between the Company and such Originator and set forth in the initial Purchase Report) and partially by issuing a promissory note in the form of Exhibit B to such Originator with an initial principal balance equal to the remaining Purchase Price (each such promissory note, as it may be amended, supplemented, endorsed or otherwise modified from time to time, together with all promissory notes issued from time to time in substitution therefor or renewal thereof in accordance with the Purchase Documents, being herein called a "Company Note").
SECTION 3.2 Subsequent Purchase Price Payments. On each Payment Date subsequent to the Closing Date, on the terms and subject to the conditions set forth in this Agreement, the Company shall pay to each Originator the Purchase Price for the Purchased Receivables generated by such Originator on such Payment Date:
(a) First, in cash to the extent the Company has cash available therefor; and
(b) Second, to the extent any portion of the Purchase Price remains unpaid, the principal amount outstanding under the applicable Company Note shall be increased by an amount equal to such remaining Purchase Price.
The Servicer shall make all appropriate record keeping entries with respect to each of the Company Notes to reflect the foregoing payments and reductions made pursuant to Section 3.3, and the Servicer's books and records shall constitute rebuttable presumptive evidence of the principal amount of, and accrued interest on, each Company Note at any time. Furthermore, the Servicer shall hold the Company Notes for the benefit of the applicable Originator. Each Originator hereby irrevocably authorizes the Servicer to mark the Company Notes "CANCELED" and to return such Company Notes to the Company upon the final payment thereof after the Purchase and Sale Termination Date.
SECTION 3.3 Settlement as to Specific Purchased Receivables and Dilution.
(a) If, on the day of purchase of any Purchased Receivable from an Originator hereunder, any of the representations or warranties set forth in Sections 5.4, 5.12 and 5.21 are not true with respect to such Purchased Receivable or as a result of any action or inaction of such Originator, on any subsequent day, any of such representations or warranties set forth in Sections 5.4, 5.12 and 5.21 is no longer true with respect to such Purchased Receivable, then the Purchase Price with respect to such Purchased Receivable shall be reduced by an amount equal to the Account Balance of such Purchased Receivable and shall be accounted to such Originator as provided in clause (d) below; provided, that if the Company thereafter receives payment on account of Collections due with respect to such Purchased Receivable, the Company promptly shall deliver such funds to such Originator.
(b) If, on any day, the Account Balance of any Purchased Receivable purchased hereunder is reduced or adjusted as a result of any defective, rejected, returned goods or services, or any discount or other adjustment made by any Originator, the Company or the Servicer or any setoff or dispute between any Originator or the Servicer and an Obligor as indicated on the books of the Company (or, for periods prior to the Closing Date, the books of such Originator), then the Purchase Price with respect to such Purchased Receivable shall be reduced by the amount of such net reduction and shall be accounted to such Originator as provided in clause (d) below.
(c) If, on any day, the Company incurs any costs, indemnities, expenses or deemed collections set forth in Section 2.3 herein, then the Purchase Price of the Purchased
Receivables shall be reduced with respect to each Originator in an amount equal to such Originator's Pro Rata Share of such reduction or, in the case of a reduction that is solely attributable to an Originator, shall be reduced with respect to such Originator, and shall be accounted to any such Originator as provided in clause (d) below.
(d) Any reduction in the Purchase Price of any Purchased Receivable pursuant to clause (a), (b) or (c) above shall be applied as a credit for the account of the Company against the Purchase Price of Receivables subsequently purchased by the Company from such Originator hereunder; provided, however if there have been no purchases of Purchased Receivables from such Originator (or insufficiently large purchases of Purchased Receivables) to create a Purchase Price sufficient to so apply such credit against, the amount of such credit shall be deemed to be a payment under, and shall be deducted from the principal amount outstanding under, the Company Note payable to such Originator.
SECTION 3.4 Reconveyance of Purchased Receivables. In the event that an Originator has paid to the Company the full Account Balance of any Purchased Receivable pursuant to Section 3.3, the Company shall reconvey such Purchased Receivable to such Originator, without representation or warranty, but free and clear of all liens, security interests, charges, and encumbrances created by the Company.
ARTICLE IV
CONDITIONS OF PURCHASES
SECTION 4.1 Conditions Precedent to Initial Purchase. The initial purchase hereunder is subject to the condition precedent that the Servicer (on the Company's behalf) shall have received, on or before the Closing Date, the following, each (unless otherwise indicated) dated the Closing Date, and each in form and substance satisfactory to the Servicer (acting on the Company's behalf):
(a) A copy of the resolutions of the Board of Directors of each Originator approving the Purchase Documents to be delivered by it and the transactions contemplated hereby and thereby, certified by the Secretary or Assistant Secretary of such Originator;
(b) Good standing certificates for each Originator issued as of a recent date acceptable to the Servicer by the Secretary of State of the jurisdiction of such Originator's incorporation;
(c) A certificate of the Secretary or Assistant Secretary of each Originator certifying the names and true signatures of the officers authorized on such Person's behalf to sign the Purchase Documents to be delivered by it (on which certificate the Servicer and the Company may conclusively rely until such time as the Servicer shall receive from such Person a revised certificate meeting the requirements of this clause (d));
(d) The certificate or articles of incorporation of each Originator, together with a copy of the by-laws of such Originator, each duly certified by the Secretary or an Assistant Secretary of such Originator;
(e) Originals of the proper financing statements (Form UCC-1) that have been duly executed and name each Originator as the debtor/seller and the Company as the secured party/purchaser (and Three Rivers Funding Corporation, as assignee of the Company) of the Purchased Receivables generated by such Originator as may be necessary or desirable under the UCC of all appropriate jurisdictions to perfect the Company's ownership interest in all Purchased Receivables and such other rights, accounts, instruments and moneys in which an ownership or security interest may be assigned to it hereunder;
(f) A written search report from a Person satisfactory to the Servicer listing all effective financing statements that name the Originators as debtors or sellers and that are filed in the jurisdictions in which filings were made pursuant to the foregoing clause (f), together with copies of such financing statements (none of which, except for those described in the foregoing clause (f), shall cover any Purchased Receivable or any Related Rights which are to be sold to the Company hereunder), and tax and judgment lien search reports from a Person satisfactory to the Servicer showing no evidence of such liens filed against any Originator;
(g) Favorable opinions of (a) David M. Sudbury, General Counsel of CMC, and (b) Haynes and Boone, LLP, counsel to the Originators and the Company, in form and substance satisfactory to the Servicer and the Administrator; and
(h) A Company Note in favor of each Originator, duly executed by the Company.
SECTION 4.2 Certification as to Representations and Warranties. Each Originator, by accepting the Purchase Price related to each purchase of Purchased Receivables generated by such Originator and listed in a Purchase Report, shall be deemed to have certified that the representations and warranties contained in Article V are true and correct on and as of such day, with the same effect as though made on and as of such day.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE ORIGINATOR
In order to induce the Company to enter into this Agreement and to make purchases hereunder, each Originator hereby makes, with respect to itself, the representations and warranties set forth in this Article V.
SECTION 5.1 Organization and Good Standing. Such Originator has been duly incorporated and is validly existing as a corporation, in good standing under the laws of its jurisdiction of incorporation, with power and authority to own its properties and to conduct its business as such properties are presently owned and such business is presently conducted.
SECTION 5.2 Due Qualification. Such Originator is located and is qualified to transact business as a foreign corporation and is in good standing in all jurisdictions in which (a) the ownership or lease of its property or the conduct of its business requires such licensing or qualifica tion and (b) the failure to be so licensed or qualified could have a Material Adverse Effect.
SECTION 5.3 Power and Authority; Due Authorization. Such Originator has
(a) all necessary power, authority and legal right to (i) execute and deliver,
and perform its obligations under, each Purchase Document to which it is a party
and (ii) generate, own, sell, contribute and assign Receivables on the terms and
subject to the conditions herein and therein provided, and (b) duly authorized
such execution and delivery and such sale and assignment and the performance of
such obligations by all necessary corporate action.
SECTION 5.4 Valid Sale; Binding Obligations. Each sale of Purchased Receivables made by such Originator pursuant to this Agreement shall constitute a valid sale, transfer, and assignment of Purchased Receivables to the Company, enforceable against creditors of, and purchasers from, such Originator; and this Agreement constitutes, and each other Purchase Document to be signed by such Originator, when duly executed and delivered, will constitute, a legal, valid, and binding obligation of such Originator, enforceable in accordance with its terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization, or other similar laws affecting the enforcement of creditors' rights generally and by general principles of equity, regardless of whether such enforceability is considered in a proceeding in equity or at law.
SECTION 5.5 No Violation. The consummation of the transactions contemplated by this Agreement and the other Purchase Documents, and the fulfillment of the terms hereof or thereof, will not (a) conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under (i) such Originator's certificate or articles of incorporation or bylaws, or (ii) any indenture, loan agreement, mortgage, deed of trust, or other agreement or instrument to which it is a party or by which it is bound, (b) result in the creation or imposition of any Adverse Claim upon any of its properties pursuant to the terms of any such indenture, loan agreement, mortgage, deed of trust, or other agreement or instrument, other than the Purchase Documents, or (c) violate any law or any order, rule or regulation applicable to it of any court or of any state or foreign regulatory body, administrative agency, or other governmental instru mentality having jurisdiction over it or any of its properties that could have a material adverse effect on such Originator's ability to perform its obligations under this Agreement (a "Material Adverse Effect").
SECTION 5.6 Proceedings. Except as set forth in Schedule 5.6 or as otherwise disclosed in CMC's public filings with the Securities and Exchange Commission, there is no action, suit, proceeding or investigation pending before any court, regulatory body, arbitrator, administrative agency, or other tribunal or governmental instrumentality (a) asserting the invalidity of any Purchase Document, (b) seeking to prevent such Originator from transferring any Purchased Receivable hereunder (or in the case such transfer does not constitute a sale under any applicable law, from
granting or maintaining the security interest in any Purchased Receivable) to the Purchaser or the consummation of any of the transactions contemplated by any Purchase Document, or (c) seeking any determination or ruling that could have a Material Adverse Effect.
SECTION 5.7 Bulk Sales Acts. No transaction contemplated hereby requires compliance with, or will be subject to avoidance under, any bulk sales act or similar law.
SECTION 5.8 Government Approvals. Except for the filing of the UCC financing statements referred to in Article IV, all of which, at the time required in Article IV, shall have been duly made and shall be in full force and effect, no authorization or approval or other action by, and no notice to or filing with, any governmental authority or regulatory body is required for each Originator's due execution, delivery and performance of any Purchase Document to which it is a party.
SECTION 5.9 Financial Condition.
(a) Material Adverse Effect. Since February 28, 2001, no event has occurred that has had, or is reasonably likely to have, a Material Adverse Effect.
(b) Solvent. On the date hereof, and on the date of each
purchase hereunder (both before and after giving effect to such purchase), (i)
the fair market value of such Originator's assets exceeds its liabilities
(whether contingent, subordinated, unmatured, unliquidated or otherwise), (ii)
such Originator has sufficient cash flow to enable it to pay its debt as it
matures, and (iii) such Originator does not have unreasonably small capital to
conduct its business.
SECTION 5.10 Licenses, Contingent Liabilities, and Labor Controversies.
(a) Such Originator has not failed to obtain any licenses, permits, franchises or other governmental authorizations necessary to the ownership of its properties or to the conduct of its business, which violation or failure to obtain could have a Material Adverse Effect.
(b) There are no labor controversies pending against such Originator that have had (or could have) a Material Adverse Effect.
SECTION 5.11 Margin Regulations. No use of any funds acquired by Originator under this Agreement will conflict with or contravene any of Regulations, T, U and X promulgated by the Federal Reserve Board from time to time.
SECTION 5.12 Quality of Title.
(a) Each Purchased Receivable of such Originator (together with the Related Rights with respect to such Purchased Receivable) which is to be sold to the Company hereunder is or shall be owned by such Originator, free and clear of any lien, security interest or other charge
or encumbrance, or any other type of preferential arrangement (each, an "Adverse Claim"), except as provided herein and in the Receivables Purchase Agreement. Whenever the Company makes a purchase hereunder, it shall have acquired and shall continue to have maintained a valid and perfected ownership interest (free and clear of any Adverse Claim) in all Purchased Receivables generated by such Originator and all Collections related thereto, and in Originator's entire right, title and interest in and to the Related Rights with respect thereto.
(b) No effective financing statement or other instrument similar in effect covering any Purchased Receivable generated by such Originator or any Related Rights is on file in any recording office except such as may be filed in favor of the Company or the Originators, as the case may be, in accordance with this Agreement or in favor of Three Rivers Funding Corporation in accordance with the Receivables Purchase Agreement.
(c) Each Purchased Receivable purchased hereunder is on the date of purchase an Eligible Receivable.
SECTION 5.13 Accuracy of Information. All factual written information heretofore or contemporaneously furnished (and prepared) by such Originator to the Company, the Administrator or the Buyer for purposes of or in connection with any Purchase Document or any transaction contemplated hereby or thereby is, and all other such factual written information hereafter furnished by such Originator to the Company or the Administrator pursuant to or in connection with any Purchase Document will be, true and accurate in all material respects on the date as of which such information is dated or certified.
SECTION 5.14 Offices. Such Originator's principal place of business and chief executive office is located at the address set forth in Schedule 5.14A, and the offices where such Originator keeps all its books, records and documents evidencing its Purchased Receivables, the related Contracts and all other agreements related to such Purchased Receivables are located at the addresses specified in Schedule 5.14B (or at such other locations, notified to the Servicer and the Buyer in accordance with Section 6.1(f), in jurisdictions where all action required by Section 7.3 has been taken and completed).
SECTION 5.15 Trade Names. Such Originator does not use any trade name
other than its actual corporate name and the trade names set forth in Schedule
5.15. From and after the date that fell five (5) years before the date hereof,
except as set forth in Schedule 5.15, such Originator has not been known by any
legal name other than its corporate name as of the date hereof, nor has such
Originator been the subject of any merger or other corporate reorganization.
SECTION 5.16 Taxes. Such Originator has filed all tax returns and reports required by law to have been filed by it and has paid all taxes and governmental charges thereby shown to be owing, except any such taxes or charges which are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books.
SECTION 5.17 Compliance with Applicable Laws. Such Originator is in compliance with the requirements of all applicable laws, rules, regulations and orders of all governmental authorities, a breach of any of which, individually or in the aggregate, could have a Material Adverse Effect.
SECTION 5.18 Reliance on Separate Legal Identity. Such Originator acknowledges that Three Rivers Funding Corporation is entering into the Receivables Purchase Agreement in reliance upon the Company's identity as a legal entity separate from such Originator.
SECTION 5.19 No Termination Event. No event has occurred and is continuing and no condition exists which constitutes a Termination Event or a Potential Termination Event under the Receivables Purchase Agreement.
SECTION 5.20 Not an Investment Company. Each Originator is not, and will not become as a result of the transactions contemplated by the Purchase Documents, an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended.
SECTION 5.21 Account Balances; Purchase Notice. The Account Balances related to the sale of the Purchased Receivables are the respective amounts set forth in the Purchase Report, and all information set forth therein, is true and correct in all material respects as of such Settlement Date.
SECTION 5.22 Consideration. Each Originator has sold the Purchased Receivables in exchange for payment (made by the Company in accordance with the provisions herein) in an amount which constitutes fair consideration and approximate market value for the Purchased Receivables and in a sale the terms and conditions of which (including, without limitation, the purchase price thereof) reasonably approximate an arm's-length transaction between unaffiliated parties. No such sale has been made for or on account of an antecedent debt owed to the Company and no such sale is or may be voidable or subject to avoidance under any section of the U.S. Bankruptcy Code.
SECTION 5.23 Data Processing Legends. Each Originator and the Servicer have placed on the most recent, and have taken all steps reasonably necessary to ensure that there shall be placed on each subsequent, data processing report generated for such Originator which are of the type that a proposed purchaser or lender would use to evaluate the Purchased Receivables, the following legend (or the substantive equivalent thereof): "CERTAIN OF THE RECEIVABLES DESCRIBED HEREIN HAVE BEEN SOLD PURSUANT TO A PURCHASE AND SALE AGREEMENT DATED AS OF JUNE 20, 2001, AS THE SAME MAY FROM TO TIME TO TIME BE AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED, BETWEEN CERTAIN ENTITIES LISTED ON SCHEDULE I THERETO AND CMC RECEIVABLES, INC., AND AN UNDIVIDED, FRACTIONAL OWNERSHIP INTEREST IN SUCH RECEIVABLES
DESCRIBED HEREIN HAS BEEN SOLD TO THREE RIVERS FUNDING CORPORATION PURSUANT TO THE RECEIVABLES PURCHASE AGREEMENT DATED AS OF JUNE 20, 2001, AS THE SAME MAY FROM TO TIME TO TIME BE AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED, AMONG CMC RECEIVABLES, INC., THREE RIVERS FUNDING CORPORATION AND COMMERCIAL METALS COMPANY."
ARTICLE VI
COVENANTS OF THE ORIGINATORS
SECTION 6.1 Affirmative Covenants. From the date hereof until the first day following the Purchase and Sale Termination Date, each Originator will, unless the Company, acting in a manner consistent with its duties and responsibilities under the Receivables Purchase Agreement shall otherwise consent:
(a) Compliance with Laws, Etc. Comply in all material respects with all applicable laws, rules, regulations and orders with respect to the Purchased Receivables generated by it and the Contracts and other agreements related thereto.
(b) Preservation of Corporate Existence. Preserve and maintain its existence as a corporation, and all rights, franchises and privileges in the jurisdiction of its incorporation, and qualify and remain qualified in good standing as a foreign corporation in each jurisdiction where the failure to preserve and maintain such existence, rights, franchises, privileges and qualification could have a Material Adverse Effect.
(c) Receivables Examinations. (i) At any time and from time to
time during regular business hours, upon reasonable prior notice, and at each
Originator's expense, as applicable, permit the Company or the Administrator, or
their respective agents or representatives, (A) to examine and make copies of
and abstracts from all books, records and documents (including, without
limitation, computer tapes, disks and other electronic media) in possession or
under the control of each Originator relating to Purchased Receivables,
including, without limitation, the related Contracts and purchase orders and
other agreements related thereto, and (B) to visit the offices and properties of
such Originator for the purpose of examining such materials described in clause
(i)(A) next above and to discuss matters relating to Purchased Receivables
originated by it or the performance hereunder with any of the officers or
employees of each Originator having knowledge of such matters, and (ii) without
limiting the foregoing clause (i) above, from time to time on reasonable request
of the Administrator, permit certified public accountants or other auditors
acceptable to the Company and Administrator to conduct, at the Company's
expense, certain agreed upon procedures with regard to such Originator's books
and records pertaining to such Purchased Receivables.
(d) Keeping of Records and Books of Account. Maintain and implement administrative and operating procedures (including, without limitation, an ability to re-create records evidencing Purchased Receivables it generates in the event of the destruction of the originals
thereof), and keep and maintain all documents, books, records and other information reasonably necessary or advisable for the collection of such Purchased Receivables (including, without limitation, records adequate to permit the daily identification of each new Purchased Receivable and all Collections of and adjustments to each existing Purchased Receivable).
(e) Performance and Compliance with Purchased Receivables and Contracts. Timely and fully perform and comply, in all material respects, with all provisions, covenants and other promises required to be observed by it under the Contracts and all other agreements related to the Purchased Receivables that it generates.
(f) Location of Records. Keep its principal place of business and chief executive office, and the offices where it keeps its records concerning or related to Purchased Receivables, at the address(es) referred to in Schedule 5.14 or, upon 15 days' prior written notice to the Company and the Administrator, at such other locations in jurisdictions where all action required by Section 7.3 shall have been taken and completed.
(g) Credit and Collection Policies. Comply in all material respects with its Credit and Collection Policy in connection with the Purchased Receivables that it generates and all Contracts and other agreements related thereto.
(h) Purchase Documents. Comply in all material respects with the Purchase Documents to which it is a party.
(i) Notice of Material Adverse Change. Promptly upon becoming aware thereof, each Originator shall give the Company and the Buyer notice of any material adverse change in the business, operations or financial condition of such Originator which could affect adversely the collectibility of the Purchased Receivables or the ability to service the Purchased Receivables.
(j) Customer List. Each Originator shall at all times maintain (or cause the Servicer to maintain) a current list (which may be stored on magnetic tapes or disks or other form of electronic media) of all Obligors under Contracts related to Purchased Receivables, including the name, address, telephone number and account number of each such Obligor, Such Originator shall deliver or cause to be delivered a copy of such list to the Buyer as soon as practicable following the their request.
(k) Notice of Relocation. Each Originator shall give the Buyer sixty (60) days' prior written notice of any relocation of its Chief Executive Office if, as a result of such relocation, the applicable provisions of the Uniform Commercial Code of any applicable jurisdiction or other applicable Laws would require the filing of any amendment of any previously filed financing statement or continuation statement or of any new financing statement. Each Originator will at all times maintain its Chief Executive Office within a jurisdiction in the United States in which Article Nine of the Uniform Commercial Code (1972 or later revision) is in effect.
(l) Administrative and Operating Procedures. Each Originator shall maintain and implement administrative and operating procedures adequate to permit the identification of the Receivables Pool and all collections and adjustments attributable to each Receivables Pool.
(m) Certificates of Title.
(A) If any amount payable under or in connection with any Purchased Receivable shall be or become evidenced by any promissory note, chattel paper or other instrument, such note, chattel paper or instrument shall be duly endorsed in a manner satisfactory to the Company and delivered to the Company or its agent.
(B) Each Originator shall deliver to the Company any certificate of title or other evidence of ownership issued by the United States or any state or any political subdivision thereof relating to any chattel held as security for any amount payable under or in connection with any Purchased Receivable, with evidence of perfection of the security interest in such property noted thereon, if such notation is required under the laws of the jurisdiction in which such property is located in order to perfect a security interest in such property.
(C) If the Contract relating to any Purchased Receivable requires the related Obligor to maintain insurance upon the chattel security relating to such Contract, such Originator shall deliver to the Company all documents or certificates relating to such insurance.
(D) Such Originator shall deliver to the Company any other document required by the terms of the related Contracts.
SECTION 6.2 Reporting Requirements. From the date hereof until the first day following the Purchase and Sale Termination Date, each Originator will, unless the Servicer (on behalf of the Company) and the Buyer shall otherwise consent in writing, furnish to the Company and the Buyer:
(a) Purchase and Sale Termination Events. As soon as possible after the Originator has knowledge of the occurrence of, and in any event within three Business Days after the Originator has knowledge of the occurrence of, each Purchase and Sale Termination Event or each event which, with the giving of notice or the passage of time, or both, would constitute a Purchase and Sale Termination Event (a "Potential Purchase and Sale Termination Event") in respect of such Originator, the statement of the chief financial officer or chief accounting officer of such Originator describing such Purchase and Sale Termination Event or Potential Purchase and Sale Termination Event, and the action that such Originator proposes to take with respect thereto, in each case in reasonable detail;
(b) Proceedings. As soon as possible and in any event within three Business Days
after Originator otherwise has knowledge thereof, written notice of (i) material litigation, investigation or proceeding of the type described in Section 5.6 not previously disclosed to the Company and (ii) all adverse developments that have occurred with respect to any previously disclosed litigation, proceedings and investigations that could have a Material Adverse Effect; and
(c) Other. Promptly, from time to time, such other information, documents, records or reports respecting the Purchased Receivables as the Administrator may from time to time reasonably request in order to protect the interests of the Company, the Buyer or the Administrator with respect to the Purchased Receivables.
SECTION 6.3 Negative Covenants. From the date hereof until the date following the Purchase and Sale Termination Date, each Originator agrees that, unless the Servicer (on behalf of the Company and acting in a manner consistent with its duties and responsibilities under the Receivables Purchase Agreement), shall otherwise consent, it shall not:
(a) Sales, Liens, Etc. Except as otherwise provided herein or in any other Purchase Document, sell, assign (by operation of law or otherwise) or otherwise dispose of, or create or suffer to exist any Adverse Claim or any Collections with respect to any Purchased Receivable, or assign any right to receive income in respect thereof.
(b) Extension or Amendment of Purchased Receivables. Extend, amend or otherwise modify the terms of any Purchased Receivable in any material respect generated by it, or amend, modify or waive, in any material respect, any Contract related thereto (which term or condition relates to payments under, or the enforcement of, such Contract), except for any extension, amendment or modification that is permitted under the Receivables Purchase Agreement and is consistent with its Credit and Collection Policy.
(c) Change in Business or Credit and Collection Policy. Make any change in the character of its business or materially alter its Credit and Collection Policy, which change or alteration could, in either case, materially adversely change the credit standing required of particular Obligors or potential Obligors or impair the collectibility of a material portion of Purchased Receivables generated by it.
(d) Purchased Receivables Not to be Evidenced by Promissory Notes or Chattel Paper. Take any action to cause or permit any Purchased Receivable generated by it to become evidenced by any "instrument" or "chattel paper" (as defined in the applicable UCC).
(e) Mergers, Acquisitions, Sales, etc. (i) Be a party to any
merger or consolidation, except a merger or consolidation where such Originator
is the surviving entity or is merged or consolidated with another Originator, or
(ii) directly or indirectly sell, transfer, assign, convey or lease (other than
to another Originator or wholly-owned subsidiary thereof) (A) whether in one or
a series of transactions, all or substantially all of its assets or (B) any
Purchased Receivables or any interest therein (other than pursuant to this
Agreement).
SECTION 6.4 Permitted Lockbox Banks. Make any changes in its instructions to Obligors regarding Collections or add or terminate any bank as a Permitted Lockbox Bank unless the requirements of Section 9.02(f) of the Receivables Purchase Agreement have been met.
SECTION 6.5 Accounting for Purchases. Account for or treat the transactions contemplated hereby in any manner other than as sales of the Purchased Receivables and Related Rights by such Originator to the Company.
SECTION 6.6 Substantive Consolidation. Each Originator hereby acknowledges that this Agreement and the other Purchase Documents are being entered into in reliance upon the Company's identity as a legal entity separate from such Originator and its Affiliates. Therefore, from and after the date hereof, each Originator shall take all reasonable steps necessary (including without limitation all of the steps set forth in Section 9.01(f) of the Receivables Purchase Agreement) to make it apparent to third Persons that the Company is an entity with assets and liabilities distinct from those of such Originator and any other Person, and is not a division of such Originator, its Affiliates or any other Person. Without limiting the generality of the foregoing and in addition to and consistent with the other covenants set forth herein, such Originator shall take such actions as shall be required in order that:
(a) such Originator shall not be involved in the day to day management of the Company;
(b) such Originator shall maintain separate corporate records and books of account from the Company and otherwise will observe corporate formalities;
(c) the financial statements and books and records of such Originator shall be prepared after the date of creation of the Company to reflect and shall reflect the separate existence of the Company;
(d) except as permitted by the Receivables Purchase Agreement,
(i) such Originator shall maintain its assets separately from the assets of the
Company, and (ii) the Company's assets, and records relating thereto, have not
been, are not, and shall not be, commingled with those of the Company;
(e) all of the Company's business correspondence and other communications shall be conducted in the Company's own name and on its own stationery;
(f) such Originator shall not act as an agent for the Company, other than as Servicer or its subservicer under the Receivables Purchase Agreement, and in connection therewith, shall present itself to the public as an agent for the Company and a legal entity separate from the Company;
(g) such Originator shall not conduct any of the business of the Company in its own name;
(h) such Originator shall not pay any liabilities of the Company out of its own funds or assets;
(i) such Originator shall maintain an arm's-length relationship with the Company;
(j) such Originator shall not assume or guarantee or become obligated for the debts of the Company or hold out its credit as being available to satisfy the obligations of the Company;
(k) such Originator shall not acquire obligations of the Company;
(l) such Originator shall allocate fairly and reasonably overhead or other expenses that are properly shared with the Company, including, without limitation, shared office space;
(m) such Originator shall identify and hold itself out as a separate and distinct entity from the Company;
(n) such Originator shall not enter into, or be a party to, any transaction with the Company, except in the ordinary course of its business and on terms which are intrinsically fair and not less favorable to it than would be obtained in a comparable arm's-length transaction with an unrelated third party; and
(o) such Originator shall not pay the salaries of the Company's employees, if any.
ARTICLE VII
ADDITIONAL RIGHTS AND OBLIGATIONS IN
RESPECT OF PURCHASED RECEIVABLES
SECTION 7.1 Rights of the Company. Each Originator hereby authorizes the Company, the Servicer or their respective designees to take any and all steps in such Originator's name necessary or desirable, in their respective determination, to collect all amounts due under any and all Purchased Receivables, including, without limitation, indorsing the name of such Originator on checks and other instruments representing Collections and enforcing such Purchased Receivables and the provisions of the related Contracts that concern payment and/or enforcement of rights to payment.
SECTION 7.2 Responsibilities of the Originators. Anything herein to the contrary notwithstanding:
(a) Collection Procedures. Each Originator agrees to direct its respective Obligors to make payments of Purchased Receivables directly to a post office box related to the relevant Lockbox Account at a Permitted Lockbox Bank. Each Originator further agrees to transfer any Collections that it receives directly to the Servicer (for the Company's account) within one (1) Business Day of receipt thereof, and agrees that all such Collections shall be deemed to be received in trust for the Company and shall be maintained and segregated separate and apart from all other funds and monies of Originator until transfer of such Collections to the Servicer.
(b) Each Originator shall perform its obligations hereunder, and the exercise by the Company or its designee of its rights hereunder shall not relieve such Originator from such obligations.
(c) None of the Company, the Servicer or the Administrator shall have any obligation or liability to any Obligor or any other third Person with respect to any Purchased Receivables, Contracts related thereto or any other related agreements, nor shall the Company, the Servicer, the Buyer or the Administrator be obligated to perform any of the obligations of such Originator thereunder.
(d) Each Originator hereby grants to the Servicer an irrevocable power of attorney, with full power of substitution, coupled with an interest, to take in the name of such Originator all steps necessary or advisable to endorse, negotiate or otherwise realize on any writing or other right of any kind held or transmitted by such Originator or transmitted or received by the Company (whether or not from such Originator) in connection with any Purchased Receivable.
SECTION 7.3 Further Action Evidencing Purchases. Each Originator agrees that from time to time, at its expense, it will promptly execute and deliver all further instruments and documents, and take all further action that the Servicer may reasonably request in order to perfect, protect or more fully evidence the Purchased Receivables and Related Rights purchased by the Company hereunder, or to enable the Company to exercise or enforce any of its rights hereunder or under any other Purchase Document. Without limiting the generality of the foregoing, upon the request of the Servicer, such Originator will:
(a) execute and file such financing or continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate; and
(b) mark the master data processing records that evidence or list (i) such Purchased Receivables and (ii) related Contracts with the legend set forth in Section 5.23.
Each Originator hereby authorizes the Company or its designee to file one or more financing or continuation statements, and amendments thereto and assignments thereof, relative to all or any of the Purchased Receivables and Related Rights now existing or hereafter generated by Originator. If any Originator fails to perform any of its agreements or obligations under this Agreement, the
Company or its designee may (but shall not be required to) itself perform, or cause the performance of, such agreement or obligation, and the expenses of the Company or its designee incurred in connection therewith shall be payable by Originator as provided in Section 9.1.
SECTION 7.4 Application of Collections. Any payment by an Obligor in respect of any indebtedness owed by it to any Originator in connection with a Purchased Receivable shall, except as otherwise specified by such Obligor or required by applicable law and unless otherwise instructed by the Servicer (with the prior written consent of the Administrator) or the Administrator, be applied as a Collection of any such Purchased Receivable of such Obligor to the extent of any amounts then due and payable thereunder before being applied to any other indebtedness of such Obligor.
ARTICLE VIII
PURCHASE AND SALE TERMINATION EVENTS
SECTION 8.1 Purchase and Sale Termination Events. Each of the following events or occurrences described in this Section 8.1 shall constitute a "Purchase and Sale Termination Event":
(a) A Termination Event shall have occurred and, except for the Termination Event described in Section 10.01(j) of the Receivables Purchase Agreement, the Buyer shall have declared the Purchase and Sale Termination Date to have occurred; or
(b) Any Originator shall fail to make any payment or deposit to be made by it hereunder when due; or
(c) Any representation or warranty made or deemed to be made by any Originator (or any of its officers) under or in connection with this Agreement, any other Purchase Documents, or any other information or report delivered pursuant hereto or thereto shall prove to have been false or incorrect in any material respect when made or deemed made; or
(d) Any Originator shall fail to perform or observe any other term, covenant or agreement contained in this Agreement on its part to be performed or observed and such failure shall remain unremedied for 20 days after written notice thereof shall have been given by the Servicer to such Originator.
SECTION 8.2 Remedies.
(a) Optional Termination. Upon the occurrence of a Purchase and Sale Termination Event, the Company (but not the Servicer) shall have the option, by notice to the Originators (with a copy to the Administrator), to declare the Purchase Facility as terminated; provided, that the Company shall have satisfied all of its obligations under the Receivables Purchase Agreement and such agreement shall have been terminated in accordance with its terms.
(b) Remedies Cumulative. Upon any termination of the Purchase Facility pursuant to Section 8.2(a), the Company shall have, in addition to all other rights and remedies under this Agreement, all other rights and remedies provided under the UCC of each applicable jurisdiction and other applicable laws, which rights shall be cumulative.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Indemnities by the Originators. Without limiting any other rights which the Company may have hereunder or under applicable law, each Originator, severally and for itself alone hereby agrees to indemnify the Company and each of its officers, directors, employees and agents (each of the foregoing Persons being individually called a "Purchase and Sale Indemnified Party"), forthwith on demand, from and against any and all damages, losses, claims, judgments, liabilities and related costs and expenses, including reasonable attorneys' fees and disbursements (all of the foregoing being collectively called "Purchase and Sale Indemnified Amounts") awarded against or incurred by any of them arising out of or as a result of the failure of such Originator to perform its obligations under this Agreement or any other Purchase Document, or arising out of the claims asserted against a Purchase and Sale Indemnified Party relating to the transactions contemplated herein or therein or the use of proceeds thereof or therefrom, INCLUDING PURCHASE AND SALE INDEMNIFIED AMOUNTS RESULTING FROM THE NEGLIGENCE OF THE PURCHASE AND SALE INDEMNIFIED PARTIES, but excluding, however, (i) Purchase and Sale Indemnified Amounts to the extent resulting from gross negligence or willful misconduct on the part of such Purchase and Sale Indemnified Party, (ii) any indemnification which has the effect of recourse for non-payment of the Purchased Receivables to any indemnitor (except as otherwise specifically provided under this Section 9.1) and (iii) any tax based upon or measured by net income, property or gross receipts. Without limiting the foregoing, each Originator, severally for itself alone, shall indemnify each Purchase and Sale Indemnified Party for Purchase and Sale Indemnified Amounts relating to or resulting from:
(a) the transfer by such Originator of an interest in any Purchased Receivable to any Person other than the Company;
(b) the breach of any representation or warranty made by such Originator (or any of its officers) under or in connection with this Agreement or any other Purchase Document, or any information or report delivered by Originator pursuant hereto or thereto, which shall have been false or incorrect in any material respect when made or deemed made;
(c) the failure by such Originator to comply with any applicable law, rule or regulation with respect to any Purchased Receivable generated by such Originator or the related Contract, or the nonconformity of any Purchased Receivable generated by such Originator or the related Contract with any such applicable law, rule or regulation;
(d) the failure to vest and maintain vested in the Company an ownership interest in the Purchased Receivables generated by such Originator free and clear of any Adverse Claim, other than an Adverse Claim arising solely as a result of an act of the Company or the Administrator, whether existing at the time of the purchase of such Purchased Receivables or at any time thereafter;
(e) the failure to file, or any delay in filing, financing statements or other similar instruments or documents under the UCC of any applicable jurisdiction or other applicable laws with respect to any Purchased Receivables or purported Purchased Receivables generated by such Originator, whether at the time of any purchase or at any subsequent time;
(f) any dispute, claim, offset or defense (other than discharge in bankruptcy) of the Obligor to the payment of any Purchased Receivable or purported Purchased Receivable generated by such Originator (including, without limitation, a defense based on such Purchased Receivable's or the related Contract's not being a legal, valid and binding obligation of such Obligor enforceable against it in accordance with its terms), or any other claim resulting from the services related to any such Purchased Receivable or the furnishing of or failure to furnish such services, and any claim for indemnification by the Buyer or any Affected Party under the Receivables Purchase Agreement arising out of any action or inaction by or the Receivables of such Originator, including without limitation under Sections 11.03 and 11.04 thereof;
(g) any product liability claim arising out of or in connection with services that are the subject of any Purchased Receivable generated by such Originator; and
(h) any tax or governmental fee or charge (other than any tax excluded pursuant to clause (iii) in the proviso to the preceding sentence), all interest and penalties thereon or with respect thereto, and all out-of-pocket costs and expenses, including the reasonable fees and expenses of counsel in defending against the same, which may arise by reason of the purchase or ownership of the Purchased Receivables generated by such Originator.
If for any reason the indemnification provided above in this Section 9.1 is unavailable to a Purchase and Sale Indemnified Party or is insufficient to hold such Purchase and Sale Indemnified Party harmless, then each of the Originators, severally and for itself, shall contribute to the amount paid or payable by such Purchase and Sale Indemnified Party to the maximum extent permitted under applicable law.
ARTICLE X
MISCELLANEOUS
SECTION 10.1 Amendments, etc.
(a) The provisions of this Agreement may from time to time be amended, modified or waived, if such amendment, modification or waiver is in writing and executed by the Company and each Originator (with the prior written consent of the Buyer, which consent shall not be unreasonably withheld).
(b) No failure or delay on the part of the Company, the Servicer, any Originator or any third party beneficiary in exercising any power or right hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power or right preclude any other or further exercise thereof or the exercise of any other power or right. No notice to or demand on the Company, the Servicer or any Originator in any case shall entitle it to any notice or demand in similar or other circumstances. No waiver or approval by the Company or the Servicer under this Agreement shall, except as may otherwise be stated in such waiver or approval, be applicable to subsequent transactions. No waiver or approval under this Agreement shall require any similar or dissimilar waiver or approval thereafter to be granted hereunder.
(c) The Purchase Documents contain a final and complete integration of all prior expressions by the parties hereto with respect to the subject matter thereof and shall constitute the entire agreement among the parties hereto with respect to the subject matter thereof, superseding all prior oral or written understandings.
SECTION 10.2 Notices, etc. All notices and other
communications provided for hereunder shall, unless otherwise stated herein, be
in writing (including facsimile communication) and shall be personally delivered
or sent by certified mail, postage prepaid, or by facsimile, to the intended
party at the mailing address or facsimile number of such party set forth under
its name on the signature pages hereof or at such other address or facsimile
number as shall be designated by such party in a written notice to the other
parties hereto. All such notices and communications shall be effective (i) if
personally delivered, when received, (ii) if sent by certified mail three (3)
Business Days after having been deposited in the mail, postage prepaid, and
(iii) if transmitted by facsimile, when sent, receipt confirmed by telephone or
electronic means.
SECTION 10.3 No Waiver; Cumulative Remedies. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. Without limiting the foregoing, each Originator hereby authorizes the Company, at any time and from time to time, to the fullest extent permitted by law, to set off, against any obligations of such Originator to the Company arising in connection with the Purchase Documents (including, without limitation, amounts payable pursuant to Section 9.1) that are then due and payable or that are not then due and payable but are accruing in respect of the then current Settlement Period, any and all indebtedness at any time owing by the Company to or for the credit or the account of such Originator.
SECTION 10.4 Binding Effect; Assignability. This Agreement shall be binding upon and inure to the benefit of the Company and each Originator and their respective successors and permitted assigns. Each of the Administrator and the Buyer is a third party beneficiary of all of the provisions of this Agreement, entitled to enforce such provisions directly against the parties hereto. No Originator may assign any of its rights hereunder or any interest herein without the prior written consent of the Company, except as otherwise herein specifically provided. This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms,
and shall remain in full force and effect until such time as the parties hereto shall agree.
SECTION 10.5 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS.
SECTION 10.6 Costs, Expenses and Taxes. In addition to the obligations of the Originators under Article IX, each Originator, severally and for itself alone, agrees to pay on demand:
(a) to the Company (and any successor and permitted assigns thereof) all costs and expenses incurred by such Person in connection with the enforcement of this Agreement and the other Purchase Documents; and
(b) all stamp and other taxes and fees payable or determined to be payable in connection with the execution, delivery, filing and recording of this Agreement or the other Purchase Documents to be delivered hereunder, and agrees to indemnify each Purchase and Sale Indemnified Party against any liabilities with respect to or resulting from any delay in paying or omission to pay such taxes and fees.
SECTION 10.7 SUBMISSION TO JURISDICTION. EACH PARTY HERETO HEREBY IRREVOCABLY (a) SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF THE STATE OF NEW YORK OR ANY FEDERAL COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY PURCHASE DOCUMENT; (b) AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH STATE OR UNITED STATES FEDERAL COURT; (c) WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING; (d) IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH PERSON AT ITS ADDRESS SPECIFIED IN SECTION 10.2; AND (e) AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS SECTION 10.7 SHALL AFFECT THE COMPANY'S RIGHT TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING ANY ACTION OR PROCEEDING AGAINST ANY ORIGINATOR OR ITS PROPERTY IN THE COURTS OF ANY OTHER JURISDICTIONS.
SECTION 10.8 WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR RELATING TO THIS AGREEMENT, ANY OTHER PURCHASE DOCUMENT, OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR ARISING FROM ANY RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER PURCHASE DOCUMENT, AND AGREES THAT (a) ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND (b) ANY PARTY HERETO (OR ANY ASSIGNEE OR THIRD PARTY BENEFICIARY OF THIS AGREEMENT) MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF ANY OTHER PARTY OR PARTIES HERETO TO WAIVER OF ITS OR THEIR RIGHT TO TRIAL BY JURY.
SECTION 10.9 Captions and Cross References; Incorporation by
Reference. The various captions (including, without limitation, the table of
contents) in this Agreement are included for convenience only and shall not
affect the meaning or interpretation of any provision of this Agreement.
References in this Agreement to any underscored Section or Exhibit are to such
Section or Exhibit of this Agreement, as the case may be. The Exhibits hereto
are hereby incorporated by reference into and made a part of this Agreement.
SECTION 10.10 Execution in Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Agreement.
SECTION 10.11 Acknowledgment and Agreement. By execution below, each Originator expressly acknowledges and agrees that all of the Company's rights, title, and interests in, to, and under this Agreement (but not its obligations), shall be assigned by the Company pursuant to the Receivables Purchase Agreement, and each Originator consents to such assignment. Each of the parties hereto acknowledges and agrees that the Administrator is a third party beneficiary of the rights of the Company arising hereunder and under the other Purchase Documents to which any Originator is a party.
SECTION 10.12 No Proceeding. Each Originator hereby agrees that it will not institute, or join any other Person in instituting, against the Company any insolvency proceeding so long as any of the Company Notes remains outstanding and for at least one year and one day following the later of (i) the day on which the aggregate outstanding principal amount of each Company Note is paid in full and (ii) the day on which all of the obligations of the Company under the Receivables Purchase Agreement are paid in full.
SECTION 10.13 Limited Recourse. Except as explicitly set forth herein, the obligations of the Company under this Agreement or any other Purchase Documents to which it is a party are solely the obligations of the Company. No recourse under any Purchase Document shall be had against, and no liability shall attach to, any officer, employee, director, or beneficiary, whether directly or indirectly, of the Company.
[SIGNATURE PAGES FOLLOW]
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective officers thereunto duly authorized as of the date first above written.
CMC STEEL FABRICATORS, INC.
D/B/A/ SMI JOIST COMPANY,
as an Originator
Address: 7800 Stemmons Freeway, 10th Floor Dallas, Texas 75247 Attention: Louis A. Federle Telephone: 214-689-4370 Facsimile: 214-689-4320 |
COMMERCIAL METALS COMPANY,
as an Originator
Address: 7800 Stemmons Freeway, 10th Floor Dallas, Texas 75247 Attention: Louis A. Federle Telephone: 214-689-4370 Facsimile: 214-689-4320 |
HOWELL METAL COMPANY,
as an Originator
Address: 7800 Stemmons Freeway, 10th Floor Dallas, Texas 75247 Attention: Louis A. Federle Telephone: 214-689-4370 Facsimile: 214-689-4320 |
OWEN ELECTRIC STEEL COMPANY
OF SOUTH CAROLINA D/B/A
SMI STEEL SOUTH CAROLINA,
as an Originator
Address: 7800 Stemmons Freeway, 10th Floor Dallas, Texas 75247 Attention: Louis A. Federle Telephone: 214-689-4370 Facsimile: 214-689-4320 |
SMI STEEL INC.,
as an Originator
Address: 7800 Stemmons Freeway, 10th Floor Dallas, Texas 75247 Attention: Louis A. Federle Telephone: 214-689-4370 Facsimile: 214-689-4320 |
STRUCTURAL METALS, INC.,
as an Originator
Address: 7800 Stemmons Freeway, 10th Floor Dallas, Texas 75247 Attention: Louis A. Federle Telephone: 214-689-4370 Facsimile: 214-689-4320 |
CMC RECEIVABLES, INC.
Address: 7800 Stemmons Freeway, 10th Floor Dallas, Texas 75247 Attention: Louis A. Federle Telephone: 214-689-4370 Facsimile: 214-689-4320 |
EXHIBIT 10(i)(c)
AMENDMENT TO PURCHASE AND SALE AGREEMENT
AMENDMENT TO PURCHASE AND SALE AGREEMENT dated as of April 22, 2004
(the "Amendment") among CMC Receivables, Inc. (the "Company"), CMC Steel
Fabricators, Inc. d/b/a SMI Joist Company ("CMC Steel"), Commercial Metals
Company ("Commercial Metals"), Howell Metal Company ("Howell"), Owen Electric
Steel Company of South Carolina d/b/a SMI Steel South Carolina ("Owen"), SMI
Steel Inc. ("SMI"), Structural Metals, Inc. ("Structural" and together with CMC
Steel, Commercial Metals, Howell, Owen and SMI, the "Originators").
W I T N E S S E T H:
WHEREAS, the Company and the Originators are parties to a Purchase and Sale Agreement dated as of June 20, 2001 (the "PSA");
WHEREAS, the Company, Commercial Metals Company and Three Rivers Funding Corporation ("TRFCO") are parties to a Receivables Purchase Agreement dated as of June 20, 2001 (the "RPA");
WHEREAS, the Company, Commercial Metals Company, TRFCO, Liberty Street Funding Corp. ("Liberty"), The Bank of Nova Scotia ("Scotia") and Mellon Bank, N.A. ("Mellon"), as managing agent and administrative agent, are parties to an Amended and Restated Receivables Purchase Agreement dated as of April 22, 2004;
WHEREAS, the parties hereto desire to amend the PSA;
NOW, THEREFORE, the parties agree as follows:
SECTION 1. DEFINITIONS
Defined terms used herein and not defined herein shall have the meanings assigned to such terms in the PSA.
SECTION 2. AMENDMENT OF PSA
As of the date hereof, the RPA has been amended and restated to add Liberty Street Funding Corp. ("Liberty") as an additional Buyer under the RPA and to add each of The Bank of Nova Scotia ("Scotia") and Mellon Bank, N.A. ("Mellon") as parties to the RPA in their capacities as Managing Agents under the RPA and to add Mellon in its capacity as Administrative Agent under the RPA. Accordingly, the PSA is hereby amended such that all references to the Buyer in the PSA are deemed to also refer to Liberty in addition to TRFCO, and each of Liberty, Scotia and Mellon are added as third party beneficiaries of all of the rights of the
Company arising under the PSA and the other Purchase Documents to which any Originator is a party, entitled to enforce the provisions of the PSA directly against the parties to the PSA.
SECTION 3. CONDITIONS PRECEDENT
The occurrence of the effective date shall be subject to the conditions precedent that this Amendment shall have been executed by each party hereto.
SECTION 4. GOVERNING LAW
THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES THEREOF.
SECTION 5. EXECUTION IN COUNTERPARTS
This Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same Amendment. Delivery of an executed counterpart of a signature page to this Amendment by facsimile shall be effective as delivery of a manually executed counterpart of this Amendment.
SECTION 6. CONFIRMATION OF AGREEMENT
Each of the parties to the PSA agree that, except as amended hereby, the PSA continues in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their authorized officers as of the day and year first above written.
CMC RECEIVABLES, INC.
By: /s/ Stanley A. Rabin Authorized Signatory CMC STEEL FABRICATORS, INC., D/B/A/ SMI JOIST COMPANY By: /s/ Stanley A. Rabin Authorized Signatory COMMERCIAL METALS COMPANY By: /s/ Stanley A. Rabin Authorized Signatory HOWELL METAL COMPANY By: /s/ Stanley A. Rabin Authorized Signatory OWEN ELECTRIC STEEL COMPANY OF SOUTH CAROLINA D/B/A SMI STEEL SOUTH CAROLINA By: /s/ Stanley A. Rabin Authorized Signatory SMI STEEL INC. By: /s/ Stanley A. Rabin Authorized Signatory STRUCTURAL METALS, INC. By: /s/ Stanley A. Rabin Authorized Signatory |
EXHIBIT 10(iii)(d)
COMMERCIAL METALS COMPANY KEY EMPLOYEE
LONG-TERM PERFORMANCE PLAN
PURPOSE
The objectives for the Long-Term Performance Plan are to:
o Link compensation to the long-term financial success and performance of the Company, focusing on factors which help drive shareholder value creation;
o Provide a greater long-term orientation and competitiveness to total compensation for executives, by establishing a performance-based component in addition to the existing stock-option plan;
o By focusing on long-term performance and success, provide a balance to the short-term focus of the Annual Incentive Plan in the decision-making process of management;
o Encourage senior management to promote the interests of the Company as a whole by linking compensation to longer-term, company-wide results;
o Enable the Company to meet competitive total compensation needs in attracting and retaining superior executive talent; and
o Fund payouts from the plan through improved business results.
STRUCTURE
The Long-Term Performance Plan is a cash plan, with awards that are contingent
on the attainment of multi-year performance goals. At the beginning of the
performance period, goals are established which are designed to measure the
degree of business success over the timeframe. The compensation committee
reviews and approves goals that are recommended by management. At the end of the
period, performance against the goals is assessed and payouts are determined.
Business results for the Company will be measured over a three-year period. Grants for the plan will be made annually, with new overlapping award cycles beginning each year. To phase in the plan, three performance cycles will begin on September 1, 2001: a one-year cycle, a two-year cycle, and a "normal" three-year cycle. Thereafter, a new three-year performance cycle will begin each year.
ELIGIBILITY
Participation in the plan is limited to key executives and employees of the
Company and its subsidiaries, who impact organization-wide results. Participants
in the plan will be nominated by management and approved by the compensation
committee. All executive officers of the Company participate in the plan.
TARGET AWARD OPPORTUNITIES
Target award opportunities will be established for each participant at the
beginning of the performance period. The target award will be calculated as a
percentage of base salary. The target
award represents the payout the participant may receive if targeted performance has been achieved at the end of the performance period.
In addition, threshold and maximum award levels will be established as a percent of target, defining payout parameters for performance that exceeds or falls below targeted levels.
Awards for the one- and two-year phase-in cycles will be 1/3 and 2/3 of these "normal" target levels respectively.
PERFORMANCE MEASUREMENT
At the beginning of each performance cycle, senior management will establish and
communicate the specific range of performance objectives for the Company. The
goals will be reviewed and the key performance factors approved by the
compensation committee.
At the end of the performance cycle, actual relative performance against these goals will be measured, and the resulting awards will be calculated and paid subject to review and approval by the compensation committee.
PERFORMANCE MEASURES
Growth in earnings before interest, taxes, depreciation, and amortization
(EBITDA) over the performance period will be the specific performance measure
used in the plan. Target performance achievement levels will be established
using the Company's actual historical EBITDA performance as a baseline. EBITDA
growth is measured against the highest EBITDA dollar amount prior to the
three-year measurement period. Therefore awards are earned only if previous
records are exceeded by threshold amounts.
PERFORMANCE WEIGHTINGS
Corporate performance will determine 100 percent of the award for all plan
participants.
EXHIBIT 10(iii)(e)
COMMERCIAL METALS COMPANY KEY EMPLOYEE
ANNUAL INCENTIVE PLAN
PURPOSE
The objectives for the Annual Incentive Plan are to:
o Pay for short-term results which help drive longer term shareholder value creation for Commercial Metals Company including achieving annual business and financial performance targets;
o Encourage senior management to promote the interests of the Company and subsidiaries by linking compensation to the Company's consolidated financial results;
o Maintain an entrepreneurial culture among key management employees by linking compensation to results for their business unit or area of responsibility;
o Communicate expectations, results, and incentive payouts in a clear, unambiguous way;
o Provide total cash compensation levels that are competitive with or above the market, especially with high performance; and
o Fund the incentive payouts from results achieved consistent with acceptable returns for shareholders.
PARTICIPANTS
Those executive officers of the Company and selected other senior managers as
approved by the compensation committee.
AWARD OPPORTUNITIES
Each eligible plan participant has a target award opportunity, expressed as a
percentage of base salary. The target award represents the level of bonus
payment the participant may earn in the event financial performance is achieved
at targeted levels and acceptable organizational standards are met.
In addition, a threshold and superior award level will be established bounding payouts for performance levels that exceed or fall below the target level. Total bonus awards by segment for all eligible employees (including those bonuses paid to participants in the annual incentive plan) are subject to a 20% ceiling limitation of operating profit.
PERFORMANCE MEASUREMENT
At the beginning of each fiscal year, senior management will establish and
communicate the specific range of performance objectives for the Company and
business units/individuals. The objective will reflect the key strategic goals
of the Company and will be aligned and supportive of higher level plans, and be
realistic and attainable stretch goals. The goals will be reviewed and the key
performance factors approved by the compensation committee; the review process
will consider the goals in light of the external environment and shareholder
return and are subject to modification by the committee.
At the end of the fiscal year, actual relative performance against these goals will be measured, and the resulting incentive amounts will be calculated. The compensation committee will approve final awards and may consider factors other than financial performance and unforeseen issues.
PERFORMANCE MEASURE
The primary performance measure of the Annual Incentive Plan is operating profit
defined as FIFO operating profit before taxes but after interest expense
(income).
WEIGHTING OF CORPORATE, BUSINESS UNIT, AND INDIVIDUAL PERFORMANCE
Based on a participant's function and position level, the award opportunity is
proportionally weighted by the results of Commercial Metals Company's
consolidated performance and its underlying segments. For instance, the CEO's
award performance is based entirely on the consolidated performance of the
Company. The President of the Marketing and Trading division's award performance
is based 70% on the Marketing and Trading segment performance and 30% on
consolidated performance.
EXHIBIT 10(iii)(g)
EMPLOYMENT CONTRACT
THIS CONTRACT is made and entered into on this 2nd day of January, 1998, by and between
COMMERCIAL METALS (INTERNATIONAL) AG, at Baarerstrasse 14, 6301 Zug, Switzerland (hereinafter styled Company)
and Dr. Hanns Zöllner, Zimmelstr. 68, 6314 Unterägeri, Switzerland (hereinafter styled Employee)
WITNESSETH
WHEREAS, the Company is duly incorporated and existing under the laws of Switzerland;
WHEREAS, the Company desires to retain the services of the Employee;
WHEREAS, the Employee desires to perform services for the Company;
and
WHEREAS, the Company has determined what a reasonable compensation will be for the Employee and has offered to the Employee continuing employment in consideration of such compensation and other benefits of employment, and the Employee is willing to accept continuing employment under the terms hereof;
NOW, THEREFORE, for and in consideration of the mutual covenants and promises herein contained, the parties agree as follows:
1. | Employment | |||
The Company hereby continues to employ the Employee and the Employee hereby accepts continued employment from the Company under the terms and conditions herein specified. | ||||
2. | Term | |||
The term of this employment agreement will continue for 96 months from 2nd January, 1998, thereafter and after expiration of the 96 months period for an unspecified period of time unless either party gives notice to the other party to terminate the employment in accordance with the conditions of the Schweizerischen Obligationenrecht. |
Page 1
2a. | Termination Clause | |
In the event that the Company wishes to terminate the employment of
the employee prior to the expiration of the first 96 months and
for
other reasons than stipulated in Clause 9, the Company shall pay to the employee a severance payment as follows: |
(i) | Up until 31 December, 2000, two years (24 months) salary based on the salary at time of termination. | |||
(ii) | From 1 January, 2001 - 31 December, 2005, one year (12 months) salary based on the salary at time of termination. |
This Termination Clause is not valid should the company wish the employee to relocate to a Western country location where CMC has an office such as Dallas, New York, London, Sydney or similar cities and the employee without good reason chooses not to relocate. | ||||
3. | Compensation | |||
For all services rendered by the Employee under this contract, the Company shall pay to the Employee SFr. 380,000 per year in 12 equal monthly installments. The said salary may be increased, but not decreased, as the Company may from time to time determine. In addition, the Employee may be paid cash bonuses in such amount and at such times and on such basis as the Company may from time to time, at its sole and absolute discretion, determine. | ||||
3a. | Special Discretionary Bonus | |||
The Company will review the performance of the employee in July each year and will recommend a Special Discretionary Bonus to be paid to the employee for performance based on the employees contribution to Commercial Metals Company (the Corporation). | ||||
The Corporation at its sole discretion will approve the Special Discretionary Bonus in October of each year. | ||||
4. | Other Benefits | |||
The Employee will continue to participate in the Pension Fund, and Death and Disability Insurance as per the Reglement der Personalfürsorgestiftung der Commercial Metals Company, Zug. | ||||
In addition, the Employee is covered by the Companys Group Accident Insurance. The Company pays all insurance premiums of the Group Accident Insurance. |
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5. | Duties | |||
The Employee is employed to exclusively perform services for the Company in the Capacity as a Member of the management as further specified in a job description. The Company shall have the power to determine not only what specific duties shall be performed by the Employee, but also the means and manner by which those duties shall be performed by the Employee. Additionally, the Company shall have the power to determine when such services shall be performed as well as to determine the days and hours during which the Employee shall perform his duties; provided, however, that the Employee shall not be compelled to work longer than a normal working week. The Employee will be entitled to 20 working days paid holidays per year which should be taken in agreement with the requirements of the Company. | ||||
6. | Title | |||
The Employee will have the titles of Managing Director of Commercial Metals (International) AG, and Managing Director of CMC Trading AG, and will report directly to the President International Division of Commercial Metals Company. | ||||
7. | Exclusive Service | |||
The Employee shall devote his full time and attention to the performance of his services to and for the Company. He shall carry out such duties in a manner that best serves the interests of the Company a determination which is to be made by the Company at its sole and absolute discretion and faithful compliance with all policies, standards, regulations and rules of the Company now or hereafter promulgated. | ||||
8. | Non Compete Covenant | |||
As Executive Officer the Employee will be privy to the names of customers and to trade secrets. The use of this knowledge after termination of the employment could cause substantial damages to the Company. | ||||
The Employee hereby undertakes that after the termination of the employment by the Employee, he will not within two years after termination solely or jointly with any other person whether as principal, agent, director, executive officer, employee, shareholder, partner, joint venture, member, adviser, consultant or otherwise howsoever directly or indirectly be engaged, involved in the Canton of Zug, Zurich, Baselland, Baselstadt, Luzern, Genf, Tessin, Waadt, where the main competitors of the Company are domiciled, be associated with any trade or business trading in iron, steel, steel semi-finished products and/or steel finished products and aluminium and aluminium semi-finished products and be engaged in project financing and financial services in competition with the Company or any of its related corporations. | ||||
The Employer can demand restitution of damages caused and can demand the termination of the infringements of this Non Compete Covenant. |
Page 3
9. | Involuntary Termination | |||
This contract shall be deemed to be terminated and the employment
relationship between the Employee and the Company shall be deemed
to be terminated upon occurrence of any of the following: |
A) | Upon the death of the Employee, during employment, as laid down in the Schweizerischem Obligationenrecht. | |||
B) | The Employee refuses to faithfully and diligently perform the usual customary duties of his employment and to adhere to provisions of this contract. | |||
C) | The Employee fails or refuses to comply with the reasonable policies, standards, regulations and rules of the Company, which from time to time may be established. | |||
D) | The Employee conducts himself in an unethical, immoral or fraudulent manner, or in a manner that is contrary to the Policy of Business Conduct of the Commercial Metals Company and its subsidiaries; or is found guilty of unethical conduct by any board, institution or organisation having any privilege, right or jurisdiction to pass judgement upon the conduct of the Employee; or the Employees conduct discredits the Company or is detrimental to the reputation, character and standing of the Company. | |||
E) | The Company or the Employee terminates the employment for reasons as stipulated in Article 337 of the Schweizerischem Obligationenrecht. |
10. | Relationship of the Parties | |||
The parties recognize that the Company shall be responsible for the management of its business affairs, and that the relationship between the Company and the Employee shall be that of an employer and an employee. All fees, compensation and other things of value, charged by the Company and received or realized as a result of the rendering of services by the Employee shall belong to and be paid and delivered forthwith to the Company by the Employee. | ||||
11. | All other conditions of this employment are subject to the conditions of the Schweizerischem Obligationenrecht. |
IN WITNESS WHEREOF, the parties hereto have set their hands on the day, month and year first above written.
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COMMERCIAL METALS (INTERNATIONAL) AG | |||
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/s/
DR. HANNS ZÖLLNER
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/s/ MURRAY MCCLEAN | |||
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Dr. Hanns Zöllner
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Murray McClean,
CHAIRMAN |
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COMPANY:
COMMERCIAL METALS COMPANY Murray R. McClean President & Chief Executive Officer PARTICIPANT: |
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Signature | ||||
Name (print): | ||||
Address: | ||||
5
2009 | 2008 | 2007 | 2006 | 2005 | ||||||||||||||||
EARNINGS:*
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EARNINGS BEFORE INCOME TAXES
|
$ | 33,925 | $ | 337,311 | $ | 536,056 | $ | 554,493 | $ | 443,033 | ||||||||||
INTEREST EXPENSE
|
77,562 | 59,488 | 37,257 | 29,569 | 31,187 | |||||||||||||||
INTEREST IMPUTED ON RENT
|
22,780 | 21,217 | 12,082 | 8,293 | 6,258 | |||||||||||||||
AMORTIZATION OF CAPITALIZED INTEREST
|
899 | 728 | 655 | 1,224 | 1,224 | |||||||||||||||
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TOTAL EARNINGS
|
135,166 | 418,744 | 586,050 | 593,579 | 481,702 | |||||||||||||||
FIXED CHARGES:*
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||||||||||||||||||||
INTEREST EXPENSE
|
77,562 | 59,488 | 37,257 | 29,569 | 31,187 | |||||||||||||||
INTEREST CAPITALIZED
|
12,638 | 6,877 | 3,198 | 2,256 | 1,302 | |||||||||||||||
INTEREST IMPUTED ON RENT
|
22,780 | 21,217 | 12,082 | 8,293 | 6,258 | |||||||||||||||
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TOTAL FIXED CHARGES
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112,980 | 87,582 | 52,537 | 40,118 | 38,747 | |||||||||||||||
RATIO OF EARNINGS TO FIXED CHARGES
|
1.20 | 4.78 | 11.16 | 14.80 | 12.43 |
* | Earnings and fixed charges include a division classified as discontinued operations. |
JURISDICTION OF | PERCENTAGE | |||||
NAME OF SUBSIDIARY | INCORPORATION | OWNED | ||||
AHT, Inc.
|
Pennsylvania | 100 | ||||
CMC Centrozlom-Katowice Sp.z o.o.
|
Poland | 100 | ||||
Centrum Zawiercie Sp.z o.o.
|
Poland | 52 | ||||
CMC Australia Pty., Limited
|
Australia | 100 | ||||
CMC (Beijing) International Trade Company Ltd.
|
China | 100 | ||||
CMC China Guangzhou International Trade Co., Ltd.
|
China | 100 | ||||
CMC Commercial Metals de Mexico S de RL de CV
|
Mexico | 100 | ||||
CMC Europe AG
|
Switzerland | 100 | ||||
CMC Fareast Limited
|
Hong Kong | 100 | ||||
CMC International AG
|
Switzerland | 100 | ||||
CMC International S.E. Asia Pte., Limited
|
Singapore | 100 | ||||
CMC Oil Company
|
Texas | 100 | ||||
CMC Poland S.A.
|
Poland | 100 | ||||
CMC Putex Sp.z o.o.
|
Poland | 100 | ||||
CMC Receivables, Inc.
|
Delaware | 100 | ||||
CMC Recycling Singapore
|
Singapore | 100 | ||||
CMC Service Sp.z o.o.
|
Poland | 99 | ||||
CMC Sisak d.o.o.
|
Croatia | 100 | ||||
CMC Steel Holding Company
|
Delaware | 100 | ||||
CMC Steel Fabricators, Inc.
|
Texas | 100 | ||||
CMC UK Limited
|
England | 100 | ||||
CMC Zawiercie SA
|
Poland | 99 | ||||
Coil Steels Group Pty Limited
|
Australia | 100 | ||||
Coil Steels Properties Pty Limited
|
Australia | 100 | ||||
Cometals China, Inc.
|
Texas | 100 | ||||
Cometals Far East, Inc.
|
Texas | 100 | ||||
Cometals Tianjin International Trade Co., Limited
|
China | 100 | ||||
Commercial Metals Deutschland GmbH
|
Germany | 100 | ||||
Commercial Metals International AG
|
Switzerland | 100 | ||||
Commercial Metals SF/JV Company
|
Texas | 100 | ||||
Commonwealth Metal China Inc.
|
Texas | 100 | ||||
Howell Metal Company
|
Virginia | 100 | ||||
Lofland Company Dallas
|
Texas | 100 | ||||
Lofland Company Midwest
|
Delaware | 100 | ||||
The Lofland Company of Texas
|
Texas | 100 | ||||
Lofland Fabricators, Inc.
|
Delaware | 100 | ||||
Owen Electric Steel Company of South Carolina
|
South Carolina | 100 | ||||
Owen Industrial Products, Inc.
|
South Carolina | 100 | ||||
Scrapena S.A.
|
Poland | 51 | ||||
Scrap-Service Sp.z o.o.
|
Poland | 51 | ||||
SMI-Owen Steel Company, Inc.
|
South Carolina | 100 | ||||
SMI Steel Inc.
|
Alabama | 100 | ||||
Southmet PTY, Limited
|
Australia | 100 | ||||
Steel Products de Mexico, S.A. de C.V.
|
Mexico | 100 | ||||
Structural Metals, Inc.
|
Texas | 100 | ||||
CMC Cometals Processing, Inc.
|
Texas | 100 |
/s/ Murray R. McClean
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||
Chairman of the Board,
President and Chief Executive Officer
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Date: October 30, 2009
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/s/ William B. Larson
Senior Vice President and Chief Financial Officer |
/s/ Murray R. McClean
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Chairman of the Board
President and Chief Executive Officer
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/s/ William B. Larson
|
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Senior Vice President and Chief Financial Officer
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