On behalf
of the Board of Directors of A.M. Castle & Co., a Maryland corporation (“Castle,” the
“Company,” “we,” “us” or “our”), we invite you to join us at a special
meeting of stockholders of the Company, which will be held on May 6, 2016, at 11:00 a.m., Central Time, at 1420
Kensington Road, Suite 220, Oak Brook, Illinois 60523 (the “Special Meeting”).
In January 2016,
the Company entered into separate Transaction Support Agreements (as amended, modified or supplemented to the date hereof, the
“Support Agreements”) with holders (the “Supporting Holders”) of 89.7% of the aggregate principal amount
of the Company’s 7.00% Convertible Senior Notes due 2017 (the “Existing Convertible Notes”) providing for the
terms of exchanges (the “Exchanges”) of the Existing Convertible Notes for new 5.25% Senior Secured Convertible Notes
due 2019 (the “New Convertible Notes”). Pursuant to the Support Agreements, the Supporting Holders agreed to participate
in the Exchanges and vote any shares of common stock of the Company they may hold in favor of the proposals described herein.
Additionally,
the Company entered into agreements with affiliates of W.B. & Co. and FOM Corporation (collectively, the
“Significant Equity Holders”), pursuant to which the Significant Equity Holders have agreed to vote all of their
shares of common stock in favor of the proposals contained herein. Collectively, the Significant Equity Holders and
the Supporting Holders hold approximately 48% of the outstanding shares of the Company’s common stock as of the Record
Date (as defined below).
Pursuant to the
Support Agreements, for each $1,000 principal amount of Existing Convertible Notes validly exchanged in the Exchanges, an exchanging
holder of Existing Convertible Notes will receive $700 principal amount of New Convertible Notes, plus accrued and unpaid interest.
The New Convertible Notes are convertible, under certain circumstances, into cash, shares of our common stock, or a combination
of cash and shares of our common stock, at our election, at an initial conversion rate of 444.444 shares of common stock per $1,000
principal amount (equivalent to an initial conversion price of $2.25 per share of common stock), subject to adjustments, which,
after completion of the Exchanges, could result in the issuance of an aggregate of approximately 17.9 million shares of the Company’s
common stock, which shares are in excess of 20% of the number of shares of the Company’s common stock outstanding prior to
such issuance and will have in excess of 20% of the voting power in the Company before such issuance.
In addition, an
affiliate of the Company, Raging Capital Management, LLC and certain of its affiliates (the “Raging Capital Group”),
will hold $2.94 million in aggregate principal amount of the New Convertible Notes following the Exchanges, which could result
in the issuance of approximately 1.3 million shares of the Company’s common stock upon conversion, which is in excess of
1% of the number of shares of Company’s common stock outstanding prior to such issuance.
Because the Company’s
common stock is listed on the New York Stock Exchange (the “NYSE”), the Company is subject to the NYSE’s rules
and regulations. Rule 312.03(c) of the NYSE Listed Company Manual (“NYSE Rule 312.03(c)”) requires stockholder approval
prior to the issuance of common stock, or securities convertible into or exercisable for common stock, in any transaction or series
of transactions if (i) the common stock to be issued has, or will have upon issuance, voting power equal to or in excess of 20%
of the voting power outstanding before the issuance of such stock or of securities convertible into or exercisable for common stock,
or (ii) the number of shares of common stock to be issued is, or will be upon issuance, equal to or in excess of 20% of the number
of shares of common stock outstanding before the issuance of the common stock or of securities convertible into or exercisable
for common stock (the “20% Issuance Approval”).
Further, Rule
312.03(b) of the NYSE Listed Company Manual (“NYSE Rule 312.03(b)” and together with NYSE Rule 312.03(c), “NYSE
Rule 312”) requires stockholder approval prior to the issuance of common stock, or of securities convertible into common
stock, in any transaction or series of related transactions, to (1) a director, officer or substantial security holder of the company
(each a “Related Party”); (2) a subsidiary, affiliate or other closely-related person of a Related Party; or (3) any
company or entity in which a Related Party has a substantial direct or indirect interest, if the number of shares of common stock
to be issued, or if the number of shares of common stock into which the securities may be convertible, exceeds either 1% of the
number of shares of common stock or 1% of the voting power outstanding before the issuance (the “Related Party Approval”
and together with the 20% Issuance Approval, the “Issuance Proposal”).
At the special meeting,
in accordance with NYSE Rule 312, you will be asked to consider and vote on a proposal to approve the Issuance Proposal.
The proxy statement
attached to this letter provides you with information about the Issuance Proposal and the Special Meeting of the Company’s
stockholders. We encourage you to read the entire proxy statement carefully. You may also obtain more information about the Company
from documents we have filed with the U.S. Securities and Exchange Commission. See “Where You Can Find Additional Information” in the accompanying proxy statement.
Regardless of the
number of shares of our common stock you own, your vote is important. Whether or not you plan to attend the Special Meeting, please
take the time to submit a proxy by following the instructions on your proxy card as soon as possible. You may do so
by completing,
signing, dating, and returning the enclosed proxy card by mail, or you may submit your proxy by telephone or electronically through
the Internet, as further described on the proxy card. If your shares of common stock are held in an account at a broker, dealer,
commercial bank, trust company, or other nominee, you should instruct such broker or other nominee how to vote in accordance with
the voting instruction form furnished by such broker or other nominee.
Voting by proxy
will not prevent you from voting your shares in person if you subsequently choose to attend the Special Meeting.
THE
ACCOMPANYING PROXY STATEMENT IS DATED APRIL
15, 2016 AND IS FIRST BEING MAILED TO
STOCKHOLDERS ON OR
ABOUT APRIL 22, 2016.
NOTICE
OF SPECIAL MEETING OF STOCKHOLDERS
To Be Held on May
6,
2016
To the Stockholders of A.M. Castle &
Co.:
Notice is
hereby given that a special meeting of stockholders of A.M. Castle & Co. will be held on May
6, 2016, at 11:00 a.m., Central Time, at
1420 Kensington Road, Suite 220, Oak Brook, Illinois 60523:
1. To consider
and vote on a proposal to approve, as required pursuant to Rule 312 of the New York Stock Exchange Listed Company Manual, the
issuance of our common stock upon the conversion of our New Convertible Notes (the “Issuance Proposal”);
2. To consider
and vote on a proposal to adjourn or postpone the Special Meeting, if necessary, to solicit additional proxies (the “Adjournment
Proposal” and together with the Issuance Proposal, the “Proposals”); and
3. To transact
such other business as may properly come before the Special Meeting and any adjournments or postponements thereof.
The Company’s
Board of Directors recommends that stockholders vote “FOR” each of the Issuance Proposal and the Adjournment Proposal.
Only
stockholders of record of our common stock as of the close of business on April 15, 2016, the “Record Date,”
are entitled to receive notice of, and to vote at, the Special Meeting and at any adjournment or postponement of the
Special Meeting.
The approval of
the Issuance Proposal requires the affirmative vote of a majority of the shares of our common stock voting thereon at a meeting
at which a quorum is present. The approval of the Adjournment Proposal requires the affirmative vote of a majority of the shares
of our common stock present and entitled to vote at the Special Meeting, whether or not a quorum is present.
Even if you plan
to attend the Special Meeting in person, we request that you submit a proxy by following the instructions on your proxy card as
soon as possible and thus ensure that your shares will be represented at the Special Meeting if you are unable to attend. Please
do so by completing, signing, dating, and returning the enclosed proxy card by mail, or you may submit your proxy by telephone
or electronically through the Internet, as further described on the proxy card. If you sign, date, and return your proxy card without
indicating how you wish to vote, your vote will be counted as a vote “FOR” the Issuance Proposal (and, if necessary
and appropriate, the Adjournment Proposal). If your shares are held in an account at a broker, dealer, commercial bank, trust company,
or other nominee, you should instruct such broker or other nominee how to vote in accordance with the voting instruction form furnished
by such broker or other nominee.
Whether you attend
the Special Meeting or not, any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before
it is voted. A proxy may be revoked in writing to the Company’s Corporate Secretary, at or before taking of the vote at the
Special Meeting. A written notice of revocation or a duly executed proxy, in either case dated later than the prior proxy relating
to the same shares will be treated as the final vote.
A proxy may also
be revoked by attending the Special Meeting and voting in person, although attendance at the Special Meeting will not itself revoke
a proxy. Any written notice of revocation or subsequent proxy should be sent so as to be delivered to A.M. Castle & Co., 1420
Kensington Road, Suite 220, Oak Brook, Illinois 60523, Attention: Corporate Secretary, or hand delivered to the Corporate Secretary,
at or before the taking of the vote at the Special Meeting.
If you hold your
shares through a broker, dealer, commercial bank, trust company or other nominee, you should follow the instructions of such broker
or other nominee regarding revocation of proxies.
Your vote is
important. Whether or not you plan to attend the Special Meeting in person, it is important that your shares be represented. We
ask that you vote your shares as soon as possible.
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By Order of the Board of Directors,
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Marec E. Edgar
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Executive Vice President, General Counsel,
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Secretary & Chief Administrative Officer
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Oak Brook, Illinois
April
15, 2016
Important Notice Regarding the Availability
of Proxy Materials for the Stockholders Special Meeting To Be Held on May 6, 2016: This proxy statement for the Special Meeting
to be held on May 6, 2016, is available free of charge at http://materials.proxyvote.com/148411.
SUMMARY VOTING INSTRUCTIONS
Ensure
that your shares of our common stock can be voted at the Special Meeting by submitting your proxy or contacting your broker, dealer,
commercial bank, trust company, or other nominee.
If your shares are
registered directly in your name with the Company’s transfer agent, American Stock Transfer and Trust Company, you are considered
a stockholder of record with respect to those shares. If your shares are held in a bank or brokerage account, you are considered
the beneficial owner of those shares.
If you are a stockholder
of record, you will receive only one notice or proxy card for all the shares you hold in certificate form, book-entry form, and
in any Company benefit plan.
If you are a
participant in any of the Company’s 401(k) or employee benefit plans, your proxy card will represent the number of
shares allocated to your account under the plans and will serve as a direction to the plan’s trustee as to how the
shares in your account are to be voted. To allow sufficient time for voting by the plan’s trustee, your voting
instructions must be received by May
4,
2016.
If you are a beneficial
owner, you will receive voting instruction information from the bank, broker or other nominee through which you own your shares
of common stock.
If you sign,
date, and return your proxy card without indicating how you wish to vote, your vote will be counted as a vote “FOR”
the Issuance Proposal and, if necessary and appropriate, the Adjournment Proposal.
For
additional questions regarding the Issuance Proposal, assistance in submitting proxies or voting shares of our common stock,
or to request additional copies of the proxy statement or the enclosed proxy card, please contact Investor Relations, A.M.
Castle & Co., 1420 Kensington Road, Suite 220, Oak Brook, IL 60523, telephone: (847) 455-7111.
TABLE OF CONTENTS
Page
Important Notice
Regarding the Availability of Proxy Materials for the Special
Meeting of Stockholders to be Held on May 6, 2016
This Proxy Statement
is available, free of charge, at https://materials.proxyvote.com/148411.
PROXY STATEMENT
This proxy
statement sets forth information relating to the solicitation of proxies by the Board of Directors of A.M. Castle & Co.
(the “Company”) in connection with the Company’s Special Meeting or any adjournment or postponement of the
Special Meeting. This proxy statement is being furnished by our Board of Directors for use at the Special Meeting of
stockholders to be held at 1420 Kensington Road, Suite 220, Oak Brook, Illinois 60523, on May 6, 2016 at
11:00 a.m., Central Time. This proxy statement and form of proxy are first being mailed to stockholders on or about April 22,
2016, to our stockholders of record as of the close of business on April
15, 2016 (the
“Record Date”).
QUESTIONS
AND ANSWERS ABOUT THE SPECIAL MEETING
AND THE PROPOSALS
The following questions
and answers address briefly some questions you may have regarding the Special Meeting and the Proposals. These questions and answers
may not address all questions that may be important to you as a stockholder of the Company. Please refer to the more detailed information
contained elsewhere in this proxy statement and the documents referred to or incorporated by reference in this proxy statement.
Q: Why did I receive these proxy
materials?
A: We are providing these proxy materials
in connection with the solicitation by our Board of Directors of proxies to be voted at the Special Meeting in connection with
the issuance of common stock upon the conversion of our New Convertible Notes.
In January 2016, the
Company entered into separate Support Agreements with Supporting Holders of 89.7% of the aggregate principal amount of the Company’s
Existing Convertible Notes providing for the terms of Exchanges of the Existing Convertible Notes for New Convertible Notes.
Pursuant to the Support Agreements, the Supporting Holders agreed to participate in the Exchanges and vote any shares of common
stock of the Company they may hold in favor of the proposals described herein.
Additionally,
the Company entered into agreements with the Significant Equity Holders, pursuant to which the Significant Equity
Holders have agreed to vote all of their shares of common stock in favor of the proposals contained herein. Collectively, the
Significant Equity Holders and the Supporting Holders hold approximately 48% of the outstanding shares of the Company’s
common stock as of the Record Date.
Pursuant to the
Support Agreements, for each $1,000 principal amount of Existing Convertible Notes validly exchanged in the Exchanges, an exchanging
holder of Existing Convertible Notes will receive $700 principal amount of New Convertible Notes, plus accrued and unpaid interest.
The New Convertible Notes are convertible, under certain circumstances, into cash, shares of our common stock, or a combination
of cash and shares of our common stock, at our election, at an initial conversion rate of 444.444 shares of common stock per $1,000
principal amount (equivalent to an initial conversion price of $2.25 per share of common stock), subject to adjustments, which,
after completion of the Exchanges, could result in the issuance of an aggregate of approximately 17.9 million shares of the Company’s
common stock, which shares are in excess of 20% of the number of shares of the Company’s common stock outstanding prior to
such issuance and will have in excess of 20% of the voting power in the Company before such issuance.
In addition, an affiliate of the Company,
the Raging Capital Group, will hold $2.94 million in aggregate principal amount of the New Convertible Notes following the Exchanges,
which could result in the issuance of approximately 1.3 million shares of the Company’s common stock upon conversion, which
is in excess of 1% of the number of shares of Company’s common stock outstanding prior to such issuance.
Because the
Company’s common stock is listed on the NYSE, the Company is subject to the NYSE’s rules and regulations. NYSE
Rule 312.03(c) requires stockholder approval prior to the issuance of common stock, or of securities convertible into or
exercisable for common stock, in any transaction or series of transactions if (i) the common stock to be issued has, or will
have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of such
stock or of securities convertible into or exercisable for common stock, or (ii) the number of shares of common stock to be
issued is, or will be upon issuance, equal to or in excess of 20% of the number of shares of common stock outstanding before
the issuance of the common stock or of securities convertible into or exercisable for common stock (the “20% Issuance
Approval”).
Further, NYSE Rule
312.03(b) requires stockholder approval prior to the issuance of common stock, or of securities convertible into common stock,
in any transaction or series of related transactions, to (1) a Related Party; (2) a subsidiary, affiliate or other closely-related
person of a Related Party; or (3) any company or entity in which a Related Party has a substantial direct or indirect interest,
if the number of shares of common stock to be issued, or if the number of shares of common stock into which the securities may
be convertible, exceeds either 1% of the number of shares of common stock or 1% of the voting power outstanding before the issuance
(the “Related Party Approval” and together with the 20% Issuance Approval, the “Issuance Proposal”).
At the Special Meeting,
in accordance with NYSE Rule 312, you will be asked to consider and vote on a proposal to approve the Issuance Proposal.
Our Board of Directors believes that
the Issuance Proposal is in the best interests of the Company and its stockholders and, therefore, recommends that you vote “FOR”
the Issuance Proposal.
Q: What items of business will be
voted on at the Special Meeting?
A: The business expected to be voted
on at the Special Meeting is considering approval of the following proposals:
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To consider and vote on a proposal to approve, as required pursuant to NYSE Rule 312, the Issuance
Proposal;
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To consider and vote on the Adjournment Proposal, as necessary and appropriate; and
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To consider and transact such other business as may properly come before the Special Meeting and
any adjournments or postponements thereof.
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Q: Where and when is the Special
Meeting?
A: The Special Meeting will be
held at 1420 Kensington Road, Suite 220, Oak Brook, Illinois 60523 at on May 6, 2016 at 11:00 a.m.,
Central Time.
Q: Who can attend and vote at the
Special Meeting?
A: You are entitled to receive
notice of and to attend and vote at the Special Meeting, or any postponement or adjournment thereof, if, as of the close of
business on April
15,
2016 the Record Date, you were a holder of record of our common stock.
As of the Record Date, there were issued
and outstanding 23,794,390
shares of our common stock, each of which is entitled to one vote on each matter to come before the Special Meeting.
If you wish to attend the Special Meeting
and your shares are held in an account at a broker, dealer, commercial bank, trust company, or other nominee (i.e., in “street
name”), you will need to bring a copy of your voting instruction card or statement reflecting your share ownership as of
the Record Date. “Street name” holders who wish to vote at the Special Meeting will need to obtain a proxy from the
broker, dealer, commercial bank, trust company, or other nominee that holds their shares.
Q: What do I need to bring in order
to attend the Special Meeting?
A: If you are a stockholder
of record, you must bring proof of identification. If you hold your shares through a broker, bank, or other nominee, you
will need to provide proof of ownership by bringing either a copy of the voting instruction form provided by your broker,
or a copy of a brokerage statement showing your share ownership as of April 15, 2016.
Q: How many shares must be present
to conduct business at the Special Meeting?
A: A quorum is necessary to hold
a valid meeting of stockholders. For each of the Proposals to be presented at the Special Meeting, the holders of shares of
our common stock outstanding on the Record Date, representing at least a majority of the votes must be present at the Special
Meeting, in person or by proxy. If you vote—including by Internet, telephone or proxy card—your shares voted will
be counted towards the quorum for the Special Meeting. Abstentions are counted as present for the purpose of determining a
quorum; broker non-votes are not counted for the purpose of determining the presence of a quorum at the Special Meeting as
the Proposals to be considered would not be evaluated as routine by the NYSE.
Q: What are my voting choices?
A: You may vote “FOR” or
“AGAINST” or you may “ABSTAIN” from voting on any Proposal to be voted on at the Special Meeting. Your
shares will be voted as you specifically instruct. If you sign your proxy or voting instruction card without giving specific instructions,
your shares will be voted in accordance with the recommendations of our Board of Directors and in the discretion of the proxy holders
on any other matters that properly come before the meeting.
Q: What vote is required to approve
the Proposals?
A: The Issuance Proposal requires the
affirmative vote of a majority of the shares of our common stock voting thereon at a meeting at which a quorum is present. Under
applicable NYSE Rules, abstentions are counted as present for purposes of determining a quorum and are also counted as shares voted
with respect to such proposal, and therefore, if you return your proxy card and “ABSTAIN” from voting, it will have
the same effect as a vote against the Issuance Proposal. The Adjournment Proposal requires the affirmative vote of a majority of
the shares of our common stock present and entitled to vote at the Special Meeting, whether or not a quorum is present.
Q: What will I receive in the Issuance
Proposal?
A: You will not receive any consideration
in the Issuance Proposal. Your shares of common stock will remain outstanding following the approval of the Issuance Proposal and
the accompanying issuance of our common stock to holders of the New Convertible Notes upon conversion, and you will continue to
participate as a stockholder by virtue of your shares of our common stock.
Q: What percentage of the Company’s
voting stock will the holders of New Convertible Notes (the “New Convertible Noteholders”) own upon conversion of all
of the New Convertible Notes?
A: Based upon the number of
shares of our common stock outstanding on the Record Date, upon conversion of all of the New Convertible Notes, the New
Convertible Noteholders will hold in the aggregate approximately 55% of the total voting power of the Company’s capital
stock, including any shares of common stock held by the New Convertible Noteholders prior to the issuance of the New
Convertible Notes.
Q: What will happen if the Issuance
Proposal is not approved?
A: If the Issuance Proposal is not
approved on or prior to June 30, 2016, Additional Interest (as defined below) shall be paid on the New Convertible Notes,
beginning on July 1, 2016, until Stockholder Approval (as defined herein) has been obtained. “Additional
Interest” means, initially, 2.00% per annum, increasing to 4.00% per annum beginning on October 1, 2016.
Q: How does the Company’s Board
of Directors recommend that I vote?
A: Our Board of Directors, after careful
consideration, unanimously recommends that our stockholders vote
“FOR”
the approval of the Issuance Proposal
and
“FOR”
the Adjournment Proposal.
Q: What do I need to do now?
A: We urge you to read this proxy statement
carefully and to consider how approving the Proposals affects you. Then simply mail your completed, dated and signed proxy card
in the enclosed return envelope as soon as possible so that your shares can be voted at the Special Meeting of our stockholders.
Holders of record may also vote by telephone or the Internet by following the instructions on the proxy card.
Q: What happens if I do not respond
or if I respond and fail to indicate my voting preference or if I abstain from voting?
A: If you fail to sign, date, and return
your proxy card or fail to vote by telephone or Internet as provided on your proxy card, your shares will not be counted towards
establishing a quorum for the Special Meeting, which requires holders representing a majority of the outstanding shares of our
common stock to be present in person or by proxy. If you respond and do not indicate your voting preference, we will count your
proxy as a vote in favor of the approval of each of the Proposals.
Q: If my shares are held in “street
name” by my broker, dealer, commercial bank, trust company, or other nominee, will such broker or other nominee vote my shares
for me?
A: You should instruct your broker or
other nominee on how to vote your shares using the instructions provided by such broker or other nominee. Absent specific voting
instructions, brokers or other nominees who hold shares of Company common stock in “street name” for customers are
prevented by the NYSE Rules from exercising voting discretion in respect of non-routine or contested matters. The Company expects
that when the NYSE evaluates the Proposals to be voted on at the Special Meeting to determine whether each Proposal is a routine
or non-routine matter, the Proposals would not be evaluated as routine. Shares not voted by a broker or other nominee because such
broker or other nominee does not have instructions or cannot exercise discretionary voting power with respect to one or more Proposals
are referred to as “broker non-votes”. Such broker non-votes may not be counted for the purpose of determining the
presence of a quorum at the Special Meeting in the absence of a routine proposal. It is important that you instruct your broker
or other nominee on how to vote your shares of Company common stock held in “street name” in accordance with the voting
instructions provided by such broker or other nominee.
Q: How do I vote?
A: If you are a
registered
stockholder
(i.e., you hold your shares in your own name through our transfer agent, American Stock Transfer and Trust
Company and not through a broker, bank, or other nominee that holds shares for your account in “street name”),
you may vote by proxy via the Internet, by telephone, or by mail by following the instructions provided on the proxy card.
Proxies submitted by telephone or through the Internet must be received by 11:59 p.m., Central Time, on May
4, 2016. Please
see the proxy card provided to you for instructions on how to submit your proxy by telephone or the Internet. Stockholders of
record who attend the Special Meeting may vote in person by obtaining a ballot from the inspector of elections.
If you are a
beneficial owner
of shares (i.e., your shares are held in the name of a brokerage firm, bank or a trustee), you may vote by proxy by following the
instructions provided in the vote instruction form or other materials provided to you by the brokerage firm, bank, or other nominee
that holds your shares. To vote in person at the Special Meeting, you must obtain a legal proxy from the brokerage firm, bank,
or other nominee that holds your shares.
Q: How do I vote my shares held in
the Company’s 401(k) or Employee Benefit Plans?
A: If you are a participant in any
of the Company’s 401(k) or employee benefit plans, your proxy card will represent the number of shares allocated to
your account under the plans and will serve as a direction to the plan’s trustee as to how the shares in your account
are to be voted. To allow sufficient time for voting by the plan’s trustee, your voting instructions must be received
by May 4, 2016.
Q: Can I change my vote after I have
mailed my proxy card?
A: Yes. Whether you
attend the Special Meeting or not, any proxy given pursuant to this solicitation may be revoked by the person giving it at any
time before it is voted. A proxy may be revoked in writing to the Company’s Corporate Secretary, at or before taking of the
vote at the Special Meeting. A written notice of revocation or a duly executed proxy, in either case later dated than the prior
proxy relating to the same shares, will be treated as the final vote.
A proxy may also be
revoked by attending the Special Meeting and voting in person, although attendance at the Special Meeting will not itself revoke
a proxy. Any written notice of revocation or subsequent proxy should be sent so as to be delivered to A.M. Castle & Co., 1420
Kensington Road, Suite 220, Oak Brook, Illinois 60523, Attention: Corporate Secretary, or hand delivered to the Corporate Secretary,
at or before the taking of the vote at the Special Meeting.
If you hold your shares
through a broker, dealer, commercial bank, trust company, or other nominee, you should follow the instructions of such broker or
other nominee regarding revocation of proxies.
Q: Am I entitled to appraisal rights?
A: No. You will have no right under
Maryland law to seek appraisal of your shares of our common stock in connection with the Proposals.
Q: Where can I find the results of
the voting?
A: We intend to announce preliminary
voting results at the Special Meeting and will publish final results through a Current Report on Form 8-K to be filed with the
U.S. Securities and Exchange Commission (“SEC”) within four business days after the Special Meeting. The Current Report
on Form 8- K will be available on the Internet at our website, www.castlemetals.com/investors/sec-filings.
Q: Who will pay for the cost of soliciting
proxies?
A: We will pay for the cost of soliciting
proxies. Our directors, officers, and other employees, without additional compensation, may solicit proxies personally, in writing,
by telephone, by email, or otherwise. As is customary, we will reimburse brokerage firms, fiduciaries, voting trustees, and other
nominees for forwarding our proxy materials to each beneficial owner of common stock or preferred stock held of record by them.
Q: What is “householding”
and how does it affect me?
A: The SEC has adopted rules that permit
companies and intermediaries, such as brokers, to satisfy the delivery requirements for proxy statements with respect to two or
more stockholders sharing the same address by delivering a single proxy statement addressed to those stockholders. This process,
which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings
for companies.
If you receive notice from your broker
that it will be householding communications to your address, householding will continue until you are notified otherwise or until
you revoke your consent. If, at any time, you no longer wish to participate in householding and would prefer to receive a separate
proxy statement, please notify your broker directly or direct your written request to: Corporate Secretary, A.M. Castle & Co.,
1420 Kensington Road, Suite 220, Oak Brook, Illinois 60523, or by phone at (847) 455-7111.
Q: Can I obtain an electronic copy
of proxy material?
A: Yes, this proxy statement, the accompanying
notice of Special Meeting and the proxy card are available on the Internet at https://materials.proxyvote.com/148411.
Q: What happens if the Special Meeting
is adjourned or postponed?
A: Although it is not expected, the
Special Meeting may be adjourned or postponed for the purpose of soliciting additional proxies. Any adjournment or postponement
may be made without notice, other than by an announcement made at the Special Meeting, by approval of the holders of a majority
of the outstanding shares of our common stock present in person or represented by proxy at the Special Meeting, whether or not
a quorum exists. Any signed proxies received by the Company will be voted in favor of an adjournment or postponement in these circumstances.
Any adjournment or postponement of the Special Meeting for the purpose of soliciting additional proxies will allow Company stockholders
who have already sent in their proxies to revoke them at any time prior to their use.
Q: Who can help answer my other questions?
A: If you have more questions about
the Proposals or voting, you should contact Investor Relations, A.M.
Castle & Co., 1420 Kensington Road, Suite 220, Oak Brook, IL 60523, telephone: (847) 455-7111.
ISSUANCE PROPOSAL—APPROVAL
OF THE ISSUANCE OF
COMPANY COMMON STOCK UPON CONVERSION OF
THE NEW CONVERTIBLE NOTES
In January 2016,
the Company entered into separate Support Agreements with Supporting Holders of 89.7% of the aggregate principal amount of the
Company’s Existing Convertible Notes providing for the terms of Exchanges of the Existing Convertible Notes for New Convertible
Notes. Pursuant to the Support Agreements, the Supporting Holders agreed to participate in the Exchanges and vote any shares of
common stock of the Company they may hold in favor of the proposals described herein.
Additionally,
the Company entered into agreements with the Significant Equity Holders, pursuant to which the Significant Equity Holders
have agreed to vote all of their shares of common stock in favor of the proposals contained herein. Collectively,
the Significant Equity Holders and the Supporting Holders hold approximately 48% of the outstanding shares of the
Company’s common stock as of the Record Date.
Pursuant to the
Support Agreements, for each $1,000 principal amount of Existing Convertible Notes validly exchanged in the Exchanges, an exchanging
holder of Existing Convertible Notes will receive $700 principal amount of New Convertible Notes, plus accrued and unpaid interest.
The New Convertible Notes are convertible, under certain circumstances, into cash, shares of our common stock, or a combination
of cash and shares of our common stock, at our election, at an initial conversion rate of 444.444 shares of common stock per $1,000
principal amount (equivalent to an initial conversion price of $2.25 per share of common stock), subject to adjustments, which,
after completion of the Exchanges, could result in the issuance of an aggregate of approximately 17.9 million shares of the Company’s
common stock, which shares are in excess of 20% of the number of shares of the Company’s common stock outstanding prior to
such issuance and will have in excess of 20% of the voting power in the Company before such issuance.
In addition, an
affiliate of the Company, the Raging Capital Group, will hold $2.94 million in aggregate principal amount of the New Convertible
Notes following the Exchanges, which could result in the issuance of approximately 1.3 million shares of the Company’s common
stock upon conversion, which is in excess of 1% of the number of shares of Company’s common stock outstanding prior to such
issuance.
Because the
Company’s common stock is listed on the NYSE, the Company is subject to the NYSE’s rules and regulations. NYSE
Rule 312.03(c) requires stockholder approval prior to the issuance of common stock, or of securities convertible into or
exercisable for common stock, in any transaction or series of transactions if (i) the common stock to be issued has, or will
have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of such
stock or of securities convertible into or exercisable for common stock, or (ii) the number of shares of common stock to be
issued is, or will be upon issuance, equal to or in excess of 20% of the number of shares of common stock outstanding before
the issuance of the common stock or of securities convertible into or exercisable for common stock.
Further, NYSE Rule
312.03(b) requires stockholder approval prior to the issuance of common stock, or of securities convertible into common stock,
in any transaction or series of related transactions, to (1) a Related Party; (2) a subsidiary, affiliate or other closely-related
person of a Related Party; or (3) any company or entity in which a Related Party has a substantial direct or indirect interest,
if the number of shares of common stock to be issued, or if the number of shares of common stock into which the securities may
be convertible, exceeds either 1% of the number of shares of common stock or 1% of the voting power outstanding before the issuance.
In order to enable
the Company to avoid being forced to make a cash payment upon conversion and to instead have the flexibility to satisfy its conversion
obligations fully in shares of common stock, which the Company currently intends to do, the Company is asking its stockholders
to approve the issuance of the full amount of common stock issuable upon conversion of the New Convertible Notes. If the Issuance
Proposal is not approved and the Company is required to make a cash payment upon conversion, even in part, it could, depending
on timing and circumstances, have a material adverse impact on the Company’s cash flow and liquidity.
At the Special Meeting,
in accordance with NYSE Rule 312, you will be asked to consider and vote on a proposal to approve the Issuance Proposal.
If the Issuance
Proposal is not approved on or prior to June 30, 2016, Additional Interest shall be paid on the New Convertible Notes, beginning
on July 1, 2016, until Stockholder Approval has been obtained. “Additional Interest” means, initially, 2.00% per annum,
increasing to 4.00% per annum beginning on October 1, 2016.
Required Vote
The Issuance Proposal
requires the affirmative vote of a majority of the shares of our common stock voting thereon at a meeting at which a quorum is
present. Under applicable NYSE Rules, abstentions are counted as shares voted with respect to such proposal, and therefore, if
you return your proxy card and “ABSTAIN” from voting, it will have the same effect as a vote against the Issuance Proposal.
The Adjournment Proposal requires the affirmative vote of a majority of the shares of our common stock present and entitled to
vote at the Special Meeting, whether or not a quorum is present.
Recommendation
The Board of Directors unanimously
recommends that you vote “FOR” the Issuance Proposal.
Description of the New Convertible
Notes
The following is
a summary of the principal terms of the New Convertible Notes that will be issued in connection with the Exchanges.
The New Convertible
Notes to be issued will mature on December 31, 2019 and will pay interest at a rate of 5.25% per annum, payable semi-annually in
cash. For each $1,000 principal amount of Existing Convertible Notes validly exchanged in the Exchanges, an exchanging holder of
Existing Convertible Notes (an “Exchanging Convertible Noteholder”) shall receive $700 principal amount of New Convertible
Notes, plus accrued and unpaid interest. All current and future guarantors of the Company’s 12.75% Senior Secured Notes due
2018 (the “Senior Secured Notes”), the Existing Convertible Notes, the Company’s
senior secured credit facility and any other material indebtedness of the Company will guarantee the New Convertible Notes. The
New Convertible Notes will be secured on a “silent” third-priority basis by the same collateral that secures the Senior
Secured Notes and the senior secured credit facility.
The New Convertible
Notes will initially be convertible into shares of the Company’s common stock at a conversion price (the “Conversion
Price”) per share of $2.25. The Conversion Price shall be subject to the same adjustment provisions contained in the Existing
Convertible Notes, subject to certain exceptions; provided that, to the extent the Company’s common stock (or derivatives)
is issued in respect of any Existing Convertible Notes after the completion of the Exchanges at an issue price (or exercise or
Conversion Price, as the case may be) per share that is lower than the Conversion Price then in effect, (i) the Conversion Price
shall be adjusted to the lower of (x) the lowest issue price per share of the Company’s common stock so issued and (y) the
lowest conversion or exercise price per share of any such derivatives, and (ii) the Conversion Price shall have the benefit of
any adjustment provision applicable to the conversion or exercise price of such derivatives, to the extent such provision is more
favorable than that applicable to the Conversion Price.
Following the
issue date, the holders of New Convertible Notes will be able to convert the New Convertible Notes, from time to time, in whole
or in part, into shares of the Company’s common stock, at the then-applicable Conversion Price. The conversion may be settled
in the form of cash, shares of the Company’s common stock, or a combination of both, in the Company’s sole discretion.
The value of shares
of the Company’s common stock for purposes of the settlement of the conversion right will be calculated as provided in the
indenture for the Existing Convertible Notes, using a 20 trading day period rather than a 40 trading day period for the observation
period. Upon such conversion, the converting holder also shall be entitled to receive an amount equal to the Make-Whole Premium
(as defined below), payable in the form of cash, shares of the Company’s common stock, or a combination of both, in the Company’s
sole discretion. The value of shares of the Company’s common stock for purposes of calculating the Make-Whole Premium upon
conversion will be based on the greater of (x) 130% of the conversion price then in effect and (y) the volume weighted average
price (“VWAP”) of such shares for the relevant observation period (using a 20 trading day period), as provided in the
indenture for the Existing Convertible Notes.
If a conversion
occurs in connection with a fundamental change, for each $1,000 principal amount of New Convertible Notes, the number of shares
of the Company’s common stock issuable upon conversion shall equal the greater of (A) $1,000 plus the amount of a Make-Whole
Premium divided by the then applicable Conversion Price and (B) $1,300 divided by the price per share of the Company’s common
stock paid in connection with the fundamental change. Settlement upon conversion in connection with a fundamental change shall
be in the form of cash, shares of the Company’s common stock, or a combination of both, in the Company’s sole discretion.
The value of shares of the Company’s common stock for purposes of the settlement of such conversion will be based on the
VWAP of such shares for the 20 trading days immediately preceding the date of conversion. The New Convertible Notes will not contain
provisions analogous to those applicable to the Existing Convertible Notes that require the issuance of additional shares in connection
with a fundamental change.
Upon 20 trading
days’ notice, if the daily VWAP of the Company common stock has been at least 130% of the Conversion Price then in effect
for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period ending on, and including,
the trading day immediately preceding the date on which such notice of redemption is provided, the Company shall, from time to
time, have the right to redeem any or all of the New Convertible Notes at a price equal to (A) 100.0% of the aggregate principal
amount thereof plus (B) the Make-Whole Premium. The redemption price can be paid in the form of cash, shares of the Company’s
common stock, or a combination of both, in the Company’s sole discretion. The value of shares of the Company’s common
stock will be based on the VWAP of such shares for the 20 trading days immediately preceding the date of redemption. Prior to the
third trading day prior to the date of any such redemption, any New Convertible Notes called for redemption may be converted into
shares of the Company’s common stock at the Conversion Price then in effect.
In addition, the
Company shall pay, on the relevant redemption date (whether a conversion date or a fundamental change settlement date), in cash,
all accrued and unpaid interest on the New Convertible Notes to be redeemed to, but not including the relevant redemption date
(or conversion date or fundamental change settlement date, as the case may be) (the “Accrued Interest Amount”).
“Make-Whole
Premium” means, with respect to each $1,000 in principal amount of New Convertible Notes, an amount equal to the present
values of all scheduled payments of interest on the New Convertible Notes to be redeemed from the relevant redemption date (or
conversion date, in the case of a conversion) to (and including) the earlier of (x) the fourth interest payment date after such
redemption date (or conversion date, as the case may be) and (y) December 31, 2019 (excluding the Accrued Interest Amount), computed
using a discount rate equal to the yield on the U.S. treasury security whose tenor most nearly approximates the time until each
such interest payment plus 0.50%.
Delisting from the
NYSE or NASDAQ will not be an event of default or fundamental change, but the Company shall use all commercially reasonable efforts
to remain listed on either the NYSE or NASDAQ. The Company and the guarantors of the New Convertible Notes may not incur additional
debt secured by liens that rank equally with the liens securing the New Convertible Notes, other than additional New Convertible
Notes issued in exchange for Existing Convertible Notes that have not been exchanged in the Exchanges, on terms no more advantageous
to the holders of such Existing Convertible Notes than the terms of the Exchanges are to the Supporting Holders. The Company shall
not refinance the Existing Convertible Notes or any of its remaining 12.75% Senior Secured Notes due 2016 with any indebtedness
(i) that is senior (either in right of payment or as to security) to the New Convertible Notes, (ii) as to which a person other
than the Company or a guarantor of the New Convertible Notes is an obligor or provides credit support or (iii) that has any scheduled
amortization payments or a maturity date that is earlier than 91 days after the maturity date of the New Convertible Notes.
Any shares of
common stock issuable in respect of the New Convertible Notes issued in the Exchanges will be subject to registration
rights under a customary registration rights agreement (the “Registration Rights Agreement”). Accordingly, on
March 22, 2016, the Company filed a registration statement on Form S-3 (the “Registration Statement”), which has
not yet been declared effective by the SEC. The Company shall pay the holders of registrable securities under the
Registration Rights Agreement a fee in cash equal to 5.00% of the aggregate principal amount of such holders’ New
Convertible Notes if it fails to have the Registration Statement declared effective at or prior to the settlement of the
Exchanges and an additional fee of 0.50% of the aggregate principal amount of such holders’ New Convertible Notes for
each period of 30 days thereafter that the Registration Statement has not been declared effective.
Until stockholder
approval under the NYSE rules is obtained for the issuance of all of the common stock issuable upon conversion (the “Stockholder
Approval”), the aggregate number of shares of the Company’s common stock that may be issued upon the conversion of
the New Convertible Notes will not exceed a number equal to 19.99% of the outstanding shares of Company common stock as of the
date of the Exchanges. Prior to Stockholder Approval and upon either (i) a fundamental change or (ii) the Company’s exercise
of its optional redemption rights, the Company’s right to settle in the Company’s common stock (including upon a conversion
in connection therewith) shall be capped at 19.99% of the then outstanding shares of the Company’s common stock, with the
remainder payable in cash. In addition, the aggregate number of shares of our common stock to be issued to affiliates of the Company
upon conversion of the New Convertible Notes may not exceed 0.99% of either (x) the total number of shares of our common stock
outstanding or (y) the total voting power of our securities outstanding that are entitled to vote on a matter being voted on by
holders of our common stock unless and until we have obtained Stockholder Approval.
To the extent the
Stockholder Approval has not been obtained on or prior to June 30, 2016, Additional Interest shall be paid on the New Convertible
Notes, beginning on July 1, 2016, until Stockholder Approval has been obtained. “Additional Interest” means, initially,
2.00% per annum, increasing to 4.00% per annum beginning on October 1, 2016.
The conversion right
will also be limited so that, while the shares of the Company’s common stock are registered under the Exchange Act, no holder
(or group of affiliated holders) may convert its New Convertible Notes into a number of shares of the Company’s common stock
that exceeds the number that would cause such holder (or group of affiliated holders) to beneficially own more than 9.99% of the
outstanding shares of Company common stock, except in connection with an issuance of Company common stock pursuant to, or upon
a conversion in connection with, (i) the Company’s optional redemption rights or (ii) a fundamental change.
The foregoing description
of the terms of the New Convertible Notes is not complete and is qualified in its entirety by reference to the text of the Form
of Transaction Support Agreement filed as Exhibit 10.1 to the Company’s Form 8-K filed on January 15, 2016, the Form of
First Amendment to Transaction Support Agreement filed as Exhibit 10.3 to the Company’s Form 8-K filed on February 3, 2016
and the Form of Amended and Restated Transaction Support Agreement filed as Exhibit 10.1 to the Company’s
Form 8-K filed on March 22, 2016.
Any reference to
the Exchanges is for informational purposes only and does not constitute an offer to sell or the solicitation of any offer to buy
any New or Existing Convertible Notes. Consummation of the Exchanges is subject to, among other things, definitive documentation.
There can be no assurance if or when the Company will consummate any such transaction or the terms thereof. In the event such transactions
are completed, they will be effected pursuant to separate documentation and any such securities may not be offered or sold in the
United States absent registration or an applicable exemption from registration requirements.
ADJOURNMENT PROPOSAL—APPROVAL
OF THE ADJOURNMENT OR
POSTPONEMENT OF THE SPECIAL MEETING
The Company’s
stockholders are being asked to consider and vote on a proposal to adjourn or postpone the Special Meeting, if necessary, to solicit
additional proxies. The Board of Directors believes this proposal to be in the best interests of the Company’s stockholders
because it gives the Company flexibility to solicit the vote of additional holders of the Company’s voting securities to
vote on matters the Board of Directors deems important to the Company. Additionally, the Company will be subject to monetary penalties
if the Issuance Proposal is not approved by the Company’s stockholders. If the Issuance Proposal is not approved on or prior
to June 30, 2016, Additional Interest shall be paid on the New Convertible Notes, beginning on July 1, 2016, until Stockholder
Approval has been obtained.
The Board of Directors of the Company recommends that stockholders vote “FOR” the Proposal
to adjourn or postpone the Special Meeting, if necessary, to solicit additional proxies.