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Exhibit 3.3
PENNSYLVANIA DEPARTMENT OF STATE 126
CORPORATION BUREAU
ROOM 308 NORTH OFFICE BUILDING
P.O. BOX 8722
HARRISBURG, PA 17105-8722
WERNER HOLDING CO. (PA), INC.
THE CORPORATION BUREAU IS HAPPY TO SEND YOU YOUR FILED DOCUMENT.
PLEASE NOTE THE FILE DATE AND THE SIGNATURE OF THE SECRETARY OF THE
COMMONWEALTH. THE CORPORATION BUREAU IS HERE TO SERVE YOU AND WANTS
TO THANK YOU FOR DOING BUSINESS IN PENNSYLVANIA. IF YOU HAVE ANY
QUESTIONS PERTAINING TO THE CORPORATION BUREAU, CALL (717) 787-1057.
ENTITY NUMBER: 0384101
MICROFILM NUMBER: 2000041
1535-1560
CSC NETWORKS
COUNTER
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________ _______
200041 - 1535
Microfilm Number Filed with the Department of State on May 25, 2000
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Entity Number 384101 Kim ??????
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SECRETARY OF THE COMMONWEALTH
ARTICLES OF AMENDMENT-DOMESTIC BUSINESS CORPORATION
DSCB:15-1915 (Rev 90)
In compliance with the requirements of 15 Pa.C.S. Sec. 1915
(relating to articles of amendment), the undersigned business corporation,
desiring to amend its Articles, hereby states that:
1. The NAME of the corporation is: Werner Holding Co. (PA), Inc.
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2. The (a) ADDRESS of this corporation's current registered office in this
Commonwealth or (b) NAME of its commercial registered office provider and the
county of venue is (the Department is hereby authorized to correct the following
information to conform to the records of the Department):
(a) 93 Werner Road Greenville PA 16125 Mercer
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Number and Street City State Zip County
(b) c/o:___________________________________________________________________
Name of Commercial Registered Office Provider County
For a corporation represented by a commercial registered office provider,
the county in (b) shall be deemed the county in which the corporation is located
for venue and official publication purposes.
3. The STATUTE by or under which it was incorporated is: PA BCL of 1933
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4. The DATE of its incorporation is: January 2, 1945
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5. (CHECK, AND IF APPROPRIATE COMPLETE, ONE OF THE FOLLOWING):
[X] The amendment shall be effective upon filing these Articles of Amendment
in the Department of State.
[ ] The amendment shall be effective on: ______________________ at _________
Date Hour
6. (CHECK ONE OF THE FOLLOWING):
[X] The amendment was adopted by the shareholders (or members) pursuant to
15 Pa.C.S. Sec. 1914(a) and (b).
[ ] The amendment was adopted by the board of directors pursuant to
15 Pa.C.S. Sec. 1914(c).
7. (CHECK, AND IF APPROPRIATE COMPLETE, ONE OF THE FOLLOWING):
[ ] The amendment adopted by the corporation, set forth in full, is as
follows:
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
[X] The amendment adopted by the corporation is set forth in full in
Exhibit A attached hereto and made a part hereof.
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________ ______
200041 - 1536
DSOB:15-1915 (Rev 90)-2
8. (CHECK IF THE AMENDMENT RESTATES THE ARTICLES):
[X] The restated Articles of Incorporation supersede the original Articles and
all amendments thereto.
IN TESTIMONY WHEREOF, the undersigned corporation has caused these Articles
of Amendment to be signed by a duly authorized officer thereof this 23rd day of
May, 2000.
WERNER HOLDING CO. (PA), INC.
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(Name of Corporation)
BY: /s/ Eric J. Werner
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(Signature)
TITLE: VP, Secretary & General Counsel
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AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
WERNER HOLDING CO. (PA), INC.
(Originally incorporated on January 2, 1945)
ARTICLE I - NAME
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The name of the corporation (hereinafter called the "Corporation") is
Werner Holding Co. (PA), Inc.
ARTICLE II - REGISTERED OFFICE
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The address of the registered office of the Corporation in the
Commonwealth of Pennsylvania is 93 Werner Road, Greenville, Pennsylvania 16125.
ARTICLE III - PURPOSE
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The purpose of the Corporation is to engage in any lawful act or the
activity for which corporations may be organized under the Business Corporation
Law of the Commonwealth of Pennsylvania (the "PBCL").
ARTICLE IV - CAPITALIZATION
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1. DEFINITIONS. As used in these Amended and Restated Articles of
Incorporation, the following terms shall have the following meanings:
"AFFILIATE", with respect to a Class D Shareholder that is not a
natural person, means (i) any Person which, directly or indirectly, is in
control of, is controlled by, or is under common control with, such Class D
Shareholder or (ii) any Person who is a director or officer (a) of such Class D
Shareholder, (b) of any subsidiary of such Class D Shareholder or (c) of any
Person described in clause (i) above. For purposes of this definition, "control"
of a Person shall mean the power, directly or indirectly, (i) to vote fifty
percent (50%) or more of the securities having ordinary voting power for the
election of directors of such Person whether by ownership of securities,
contract, proxy or otherwise, or (ii) to direct or cause the direction of the
management and policies of such Person whether by ownership of securities,
contract, proxy or otherwise.
"ARTICLES OF INCORPORATION" mean these Amended and Restated Articles of
Incorporation of the Corporation.
"BOARD" means the Board of Directors of the Corporation.
"BUSINESS DAY" means any day other than a Saturday, Sunday, federal
holiday or other day on which commercial banks in New York City are authorized
or required to close under the laws of the State of New York.
"CLASS A COMMON STOCK" has the meaning set forth in Section 2 of
Article IV.
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"CLASS B COMMON STOCK" has the meaning set forth in Section 2 of
Article IV.
"CLASS C COMMON STOCK" has the meaning set forth in Section 2 of
Article IV.
"CLASS E COMMON STOCK" has the meaning set forth in Section 2 of
Article IV.
"CLASS A SHAREHOLDER" means a record holder of one or more shares of
Class A Common Stock.
"CLASS B SHAREHOLDER" means a record holder of one or more shares of
Class B Common Stock.
"CLASS C SHAREHOLDER" means a record holder of one or more shares of
Class C Common Stock.
"CLASS D SHAREHOLDER" means a record holder of one or more shares of
Class D Common Stock.
"CLASS E SHAREHOLDER" means a record holder of one or more shares of
Class E Common Stock.
"COMMON STOCK" has the meaning set forth in Section 2 of Article IV.
"CONVERSION DATE" has the meaning set forth in Section 7 of Article IV.
"DIFFERENCE SHARES" has the meaning set forth in Section 6 of Article
IV.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"INITIAL PUBLIC OFFERING" means the effectiveness after November 24,
1997 of a registration statement under the Securities Act on any of Forms S-1,
S-2, S-3 or any similar successor form covering any of the Stock, and the
completion of a sale of such Stock thereunder, (i) following which the
Corporation is, or becomes, a reporting company under Section 12(b) or 12(g) of
the Exchange Act, and (ii) as a result of which the Stock is traded on the New
York Stock Exchange or the American Stock Exchange, or quoted on the NASDAQ
Stock Market or is traded or quoted on any other national stock exchange.
"INITIATING HOLDER" has the meaning set forth in Section 4(a) of
Article IV.
"IPO DATE" means the closing date of the Initial Public Offering.
"NON-REDEEMABLE SHARES" means all shares of Class A Common Stock, Class
B Common Stock, Class C Common Stock or Class E Common Stock that have been
previously sold (whether under Section 5 or Section 6(b) of Article IV) pursuant
to a Tag-Along Transfer other than pursuant to a Single Transaction Sale.
"NOTICE DATE" has the meaning set forth in Section 5(b) of Article IV.
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"OPTION" has the meaning set forth in Section 4(b) of Article IV.
"OTHER SHAREHOLDERS" has the meaning set forth in Section 5(a) of
Article IV.
"PERMITTED TRANSFEREE" with respect to a Transfer by a Class D
Shareholder, means (i) with respect to any Class D Shareholder who is a natural
person, a Transfer to (a) such Shareholder's spouse or issue, or (b) a trust the
beneficiaries of which, and a partnership the limited and general partners of
which, include only the Class D Shareholder, his spouse or issue; (ii) with
respect to any Class D Shareholder that is not a natural person, (a) a Transfer
to an Affiliate of such Class D Shareholder; or (b) a Transfer to another Class
D Shareholder or its Affiliates; PROVIDED such other Class D Shareholder
referenced in clauses (i) and (ii) did not acquire its shares of Class D Common
Stock pursuant to a Tag-Along Transfer.
"PERSON" means any natural person, partnership, limited liability
company, corporation (including the Corporation), trust or unincorporated
organization or a government or a political subdivision thereof.
"PROPOSED PURCHASE AMOUNT" has the meaning set forth in Section 5(a) of
Article IV.
"PROPOSED TRANSFEREE" has the meaning set forth in Section 5(a) of
Article IV.
"PROPOSED TRANSFEROR" has the meaning set forth in Section 5(a) of
Article IV.
"RECAPITALIZATION" means the transaction, approved by the Corporation's
shareholders, that occurred on or about November 24, 1997 pursuant to a
recapitalization agreement, as amended, entered into between the Corporation,
certain affiliates of Investcorp S.A. ("Investcorp") and certain other
international investors organized by Investcorp, whereby the Corporation (i)
amended and restated its articles of incorporation to reclassify its capital
stock, (ii) redeemed certain shares of its reclassified capital stock for cash
and the right to receive an additional payment pursuant to the terms of Exhibit
A hereto, and (iii) sold to the Investors shares of newly created Class C Common
Stock, Class D Common Stock, Class E Common Stock and the Warrant.
"REDEMPTION DATE" has the meaning set forth in Section 6(d) of Article
IV.
"SALE OF THE CORPORATION" means (i) the sale of one hundred percent
(100%) of the outstanding shares of Stock; (ii) a sale of all or substantially
all of the assets of the Corporation; or (iii) a merger, consolidation or
recapitalization of the Corporation as a result of which the ownership of the
Stock of the Corporation (or the voting stock of the surviving corporation, if
the Corporation is not the survivor) is changed to the extent of one hundred
percent (100%).
"SALE NOTICE" has the meaning set forth in Section 4(a) of Article IV.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
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"SHAREHOLDER" means a record holder of one or more shares of Class A
Common Stock, Class B Common Stock, Class C Common Stock, Class D Common Stock,
Class E Common Stock or Common Stock.
"SINGLE TRANSACTION SALE" means a Sale of the Corporation in a single
transaction.
"STAGGERED SALE" means a Sale of the Corporation in more than one
transaction, each such transaction also being referred to individually as a
"Staggered Sale".
"STOCK" has the meaning set forth in Section 2 of Article IV.
"SHAREHOLDER AGREEMENTS" means those certain Shareholder Agreements
entered into in connection with the Recapitalization of the Corporation among
the Corporation and certain Persons, as the same may be supplemented, modified,
amended and restated from time to time in the manner provided therein. A copy of
the Shareholder Agreements will be supplied by the Corporation to any
Shareholder party thereto upon written request made to the Corporation at its
registered office.
"TAG-ALONG ACCEPTANCE DATE" has the meaning set forth in Section 5(c)
of Article IV.
"TAG-ALONG NOTICE" has the meaning set forth in Section 5(c) of Article
IV.
"TAG-ALONG PRO RATA AMOUNT" has the meaning set forth in Section 5(a)
of Article IV.
"TAG-ALONG REDEMPTION PRICE" has the meaning set forth in Section 6(a)
of Article IV.
"TAG-ALONG TRANSFER" has the meaning set forth in Section 5(a) of
Article IV.
"TRANSFER", with respect to any share of Stock, means the sale,
assignment, pledge, hypothecation, gift or other disposition whatsoever (other
than pursuant to the Initial Public Offering or pursuant to the redemption by
the Corporation or the conversion by the Shareholder of any such share of Stock,
in either case in accordance with the terms of the Articles of Incorporation) of
such share, or the encumbrance or granting of any rights or interests whatsoever
in or with respect to such share, except with respect to any such encumbrance or
granting of rights or interests with respect to the Shareholder Agreements.
"TRANSFER NOTICE" has the meaning set forth in Section 5(b) of Article
IV.
"WARRANT" means the Class E Common Stock Purchase Warrant issued by the
Corporation in connection with the Recapitalization which entitles the Warrant
Holder(s), upon the occurrence of a Warrant Triggering Event, to purchase a
number of shares of Common Stock of the Corporation as specified therein.
"WARRANT DATE" means (i) if the Warrant Triggering Event is the Initial
Public Offering, the IPO Date, or (ii) if the Warrant Triggering Event is a Sale
of the Corporation, the closing date of (a) the Single Transaction Sale, if the
Sale of the Corporation is pursuant to a Single Transaction Sale, or (b) the
Staggered Sale that causes a Sale of the Corporation to occur, if the Sale of
the Corporation is pursuant to a series of Staggered Sales.
"WARRANT HOLDER(S)" means the holder(s) of the Warrants.
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"WARRANT REDEMPTION PRICE" has the meaning set forth in Section 6(b) of
Article IV.
"WARRANT SHARES" means the shares of Common Stock purchasable by the
Warrant Holder(s) pursuant to the exercise of the Warrants, which shall equal in
all cases the number of shares of Class E Common Stock redeemed in connection
with the exercise of such Warrant.
"WARRANT TRIGGERING EVENT" means the first to occur of (i) an Initial
Public Offering or (ii) a Sale of the Corporation, whether such sale occurs
pursuant to a Single Transaction Sale or a series of Staggered Sales.
2. DESIGNATION AND NUMBER. The total number of shares of all classes of
stock which the Corporation shall have authority to issue is 257,000. There
shall be six classes of stock of the Corporation. The first class of stock of
the Corporation shall have a par value of $0.01 per share and shall be
designated as "Class A Common Stock" and the number of shares constituting such
class shall be 5,000. The second class of stock of the Corporation shall have a
par value of $0.01 per share and shall be designated as "Class B Common Stock"
and the number of shares constituting such class shall be 25,000. The third
class of stock of the Corporation shall have a par value of $0.01 per share and
shall be designated as "Class C Common Stock" and the number of shares
constituting such class shall be 45,000. The fourth class of stock of the
Corporation shall have a par value of $0.01 per share and shall be designated as
"Class D Common Stock" and the number of shares constituting such class shall be
1,000. The fifth class of stock of the Corporation shall have a par value of
$0.01 per share and shall be designated as "Class E Common Stock" and the number
of share constituting such class shall be 50,000. The sixth class of stock of
the Corporation shall have a par value of $0.01 per share and shall be
designated as "Common Stock" and the number of shares constituting such class
shall be 131,000. The Class A Common Stock, Class B Common Stock, Class C Common
Stock, Class D Common Stock, Class E Common Stock and Common Stock are sometimes
referred to collectively herein as the "Stock". The Corporation may, by an
amendment to the Articles of Incorporation duly adopted, increase or decrease,
at any time and from time to time (but not below the number of shares of Class A
Common Stock, Class B Common Stock, Class C Common Stock, Class D Common Stock,
Class E Common Stock or Common Stock then outstanding), the number of authorized
shares of Class A Common Stock, Class B Common Stock, Class C Common Stock,
Class D Common Stock, Class E Common Stock or Common Stock, as the case may be.
Shares of Stock redeemed, purchased or otherwise acquired by the Corporation
pursuant to the terms hereof shall revert to authorized but unissued Class A
Common Stock, Class B Common Stock, Class C Common Stock, Class D Common Stock,
Class E Common Stock or Common Stock, as the case may be. Shares of any class of
stock may be issued in fractions of a share which shall entitle each holder
thereof, in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and have the benefit of
all other rights of holders of such class of stock.
3. RESTRICTIONS ON TRANSFER.
(a) Except for Transfers to a Permitted Transferee, no Class D
Shareholder shall Transfer any share of Class D Common Stock owned by such Class
D Shareholder except in accordance with the terms of the Articles of
Incorporation. Any Transfer or attempt to Transfer any share of Class D Common
Stock in violation of the terms and conditions of the Articles of
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Incorporation shall be null and void and of no force and effect, the transferee
thereof shall not be deemed to be the registered holder thereof nor entitled to
any rights with respect thereto, and the Corporation shall refuse to Transfer
any of such Class D Common Stock on its books to such alleged transferee.
(b) No Shareholder shall Transfer any shares of Stock unless such
Transfer complies with the conditions specified in this Section 3(b), which are
intended to ensure compliance with the provisions of the Securities Act. Prior
to any Transfer, the holder of the shares of Stock proposed to be Transferred
shall give written notice to the Corporation of such holder's intention to
effect such Transfer. Each such notice shall describe the manner and
circumstances of the proposed Transfer in sufficient detail. If the proposed
Transfer is not to (i) such Shareholder's spouse or issue, (ii) a trust the
beneficiaries of which, and a partnership the limited and general partners of
which, include only the Shareholder or his or her spouse or issue, (iii) a
foundation created or established by the Shareholder, (iv) a charitable
remainder trust for the benefit of the Shareholder or his or her spouse or
issue, (v) the executor, administrator, or personal representative of the estate
of the Shareholder or (vi) any guardian, trustee or conservator appointed with
respect to the assets of the Shareholder, each such notice, if requested by the
Corporation, shall be accompanied by either (i) a written opinion of legal
counsel who is reasonably satisfactory to the Corporation, addressed to the
Corporation and reasonably satisfactory in form and substance to the
Corporation's counsel, to the effect that the proposed Transfer may be effected
without registration under the Securities Act and qualification under applicable
state securities laws, or (ii) a "no action" letter from the SEC to the effect
that the Transfer of such securities without registration under the Securities
Act will not result in a recommendation by the staff of the SEC that action be
taken with respect thereof, or a combination of (i) and (ii) above, whereupon
the holder of such shares of Stock shall be entitled to Transfer such shares in
accordance with the terms of the Articles of Incorporation and the written
notice delivered by the holder to the Corporation. Each certificate evidencing
the shares of Stock Transferred as above provided shall bear the appropriate
restrictive legend set forth in Section 10 of Article IV, PROVIDED THAT,
following the Initial Public Offering, such certificates shall bear the legend
set forth in Section 10 of Article IV or another legend only if, in the opinion
of counsel to the Corporation, the imposition of such legend is required under
the Securities Act or other applicable law. Any purported Transfer in violation
of this Section 3(b) shall be null and void and of no force or effect, and the
Corporation shall not record any such Transfer on its stock transfer books. The
restrictions on Transfer contained in this Section 3(b) shall not apply to
Transfers of shares of Stock (i) in the Initial Public Offering; or (ii)
following the Initial Public Offering, PROVIDED THAT such Transfer is made in
compliance with the Securities Act and applicable state securities laws and in
accordance with any restrictions on transfer contained in any restrictive legend
set forth on the certificates representing such shares.
4. RIGHT OF FIRST OFFER ON CLASS A COMMON STOCK AND CLASS B COMMON
STOCK.
(a) At any time prior to an Initial Public Offering, if a Class A
Shareholder or a Class B Shareholder proposes to sell any Class A or Class B
Common Stock (the "Initiating Holder") to any Person (other than (i) (a) to such
Class A or Class B Shareholder's spouse or issue, (b) a trust the beneficiaries
of which, and a partnership the limited and general partners of which, include
only such Shareholder or his or her spouse or issue, (c) a foundation created or
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established by such Shareholder, (d) a charitable remainder trust for the
benefit of such Shareholder or his or her spouse or issue, (e) the executor,
administrator, or personal representative of the estate of such Shareholder or
(f) any guardian, trustee or conservator appointed with respect to the assets of
such Shareholder, (ii) upon a Tag-Along Transfer pursuant to Section 5 hereof or
(iii) a Sale of the Corporation), such Initiating Holder shall furnish to the
Corporation a written notice specifying the number of shares of such Class A or
Class B Common Stock proposed to be sold, the proposed sale price and all other
material terms and conditions of the proposed sale (a "Sale Notice").
(b) The Corporation shall then have the irrevocable option, exercisable
by written notice to the Initiating Holder within 20 days after receipt of a
Sale Notice, to purchase all (but not less than all) of the shares of Class A
Common Stock and Class B Common Stock covered by such Notice at the same price
and on the same terms and conditions as contained in such Notice (the "Option").
(c) In the event that the Corporation elects to exercise the Option,
the closing of the purchase or purchases pursuant to the exercise of such Option
shall occur at the offices of the Corporation on the date specified in the
notice of exercise, which date shall not be later than 30 days after receipt by
the Initiating Holder of such notice of exercise (or such earlier date, if any,
mutually agreed upon by the Initiating Holder and the Corporation). At such
closing, (i) the Initiating Holder shall deliver to the Corporation the stock
certificate or certificates evidencing such Class A Common Stock and/or Class B
Common Stock in valid form for transfer with appropriate and duly executed
assignments, stock powers or endorsements, as the case may be, bearing any
necessary documentary stamps and accompanied by such certificates of authority,
consents to transfer or other instruments or evidences of good title of the
Initiating Holder to such shares of Class A and/or Class B Common Stock, free
and clear of any and all claims, liens, pledges and encumbrances, as may
reasonably be requested by the Corporation, and (ii) the Corporation shall pay
to the Initiating Holder the applicable purchase price.
(d) If the Option is not validly exercised within the applicable option
period specified in Section 4(b) above or if prior to the expiration of such
option period the Corporation shall have given the Initiating Holder written
notice that it will not exercise the Option, then the Initiating Holder shall be
free, for a period of 90 days beginning on earlier of the day after the
expiration of such option period or the date on which the Initiating Holder
shall have received such notices of non-election, as applicable, to sell such
Class A Common Stock and/or Class B Common Stock to any other purchaser or
purchasers at prices, terms and conditions no less favorable to the Initiating
Holder than those contained in the Sale Notice. Upon expiration of such 90 day
period, the Initiating Holder shall again comply with the provisions of this
Section 4 if it desires to sell shares of Class A or Class B Common Stock before
an Initial Public Offering.
5. TAG-ALONG RIGHTS.
(a) TRANSFER BY CLASS D SHAREHOLDERS. If, other than in connection with
the Initial Public Offering, any Class D Shareholder or Shareholders (for
purposes of this Section 5, singularly or collectively, the "Proposed
Transferor"), at any time or from time to time in one transaction or in a series
of transactions, desires to enter into an agreement (whether oral or written) to
Transfer its shares of Class D Common Stock or any part thereof in a transaction
which is a sale to any Person other than a Permitted Transferee (the "Proposed
Transferee"), such
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proposed Transfer shall be deemed a "Tag-Along Transfer" and, each of the Class
A Shareholders, Class B Shareholders, Class C Shareholders and Class E
Shareholders (collectively, the "Other Shareholders") shall have the right, but
not the obligation, as a condition to such Tag-Along Transfer, to have the
Proposed Transferee purchase from each such Other Shareholder up to the number
of shares (the "Tag-Along Pro Rata Amount") of Class A Common Stock, Class B
Common Stock, Class C Common Stock or Class E Common Stock derived by
multiplying the total number of shares of Class A Common Stock, Class B Common
Stock, Class C Common Stock or Class E Common Stock exclusive of Non-Redeemable
Shares, as the case may be, owned by such Other Shareholder by a fraction, the
numerator of which is equal to the number of shares of Class D Common Stock that
is proposed to be Transferred by the Proposed Transferor to the Proposed
Transferee (the "Proposed Purchase Amount") and the denominator of which is the
total number of shares of Class D Common Stock (other than shares of Class D
Common Stock that have previously been Transferred pursuant to a Tag-Along
Transfer) outstanding as of the Notice Date (as defined in Section 5(b)). All
Tag-Along Transfers by Other Shareholders shall be on the same terms and
conditions (with such changes as are necessary to apply such terms and
conditions to a sale by such Other Shareholders) as the proposed Tag-Along
Transfer by the Proposed Transferor, PROVIDED THAT no Other Shareholder may be
required to make any representation or warranty in connection with the Tag-Along
Transfer other than as to its ownership and authority to Transfer the shares of
Stock to be Transferred by it, free and clear of any and all liens and
encumbrances (other than under the Articles of Incorporation) and in compliance
with all applicable laws.
(b) TRANSFER NOTICE. The Proposed Transferor participating in a
Tag-Along Transfer shall at least thirty (30) Business Days prior to the closing
date thereof provide the Corporation and the Other Shareholders with written
notice (the "Transfer Notice") of the proposed Tag- Along Transfer containing
the following:
(i) the name and address of the Proposed Transferor and the
Proposed Transferee;
(ii) the Proposed Purchase Amount;
(iii) the proposed amount to be paid for such shares of Class D
Common Stock, the terms and conditions of payment offered by the Proposed
Transferee, the closing date for the proposed Tag-Along Transfer and the
estimated expenses payable pursuant to Section 5(d);
(iv) the aggregate number of shares of Class A Common Stock, Class
B Common Stock, Class C Common Stock or Class E Common Stock as the case may be,
held of record as of the date the Transfer Notice is sent (the "Notice Date") by
the Other Shareholder to whom the notice is sent;
(v) the aggregate number of shares of Class A Common Stock, Class
B Common Stock, Class C Common Stock or Class E Common Stock as the case may be,
held of record as of the Notice Date by all Other Shareholders as a group;
(vi) the Tag-Along Pro Rata Amount; and
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(vii) a statement confirming that the Proposed Transferee has
agreed (i) to the tag-along rights, and (ii) pursuant to Section 6(c) of Article
IV, to purchase the number of shares of Stock redeemed pursuant to Section 6(a)
of Article IV.
Upon written request by the Proposed Transferor, the Corporation shall
provide to the Proposed Transferor the information referred to in (iv) and (v)
above for inclusion in the Transfer Notice and such other information as may be
required to enable the Proposed Transferor to comply with the terms of this
Section 5(b).
(c) TAG-ALONG NOTICE. Each Other Shareholder desiring to participate in
the proposed Tag-Along Transfer shall provide a written notice (the "Tag-Along
Notice") to the Proposed Transferor on or before the expiration of fifteen (15)
Business Days after the Notice Date (the "Tag-Along Acceptance Date") stating
the number of shares held by such Other Shareholder (up to its Tag-Along Pro
Rata Amount) to be included in the proposed Tag-Along Transfer on the terms and
conditions specified in the Transfer Notice. The Tag-Along Notice given by each
Other Shareholder shall include and constitute such Other Shareholder's binding
agreement to include a number of shares equal to its Tag-Along Pro Rata Amount
(or such lesser amount as stated in the Tag-Along Notice) in the Tag-Along
Transfer on the terms and conditions specified in the Transfer Notice and in the
Articles of Incorporation. If the Proposed Transferee does not purchase all of
the shares of Stock of the Proposed Transferor and the Other Shareholders
included in such proposed Tag-Along Transfer, as well as shares to be issued
under Section 6(b) of Article IV in connection with the Tag-Along Transfer, then
the proposed Tag- Along Transfer to such Proposed Transferee shall be prohibited
and any attempt to consummate the proposed Tag-Along Transfer shall be null and
void and of no force and effect.
(d) Each Proposed Transferor and each Other Shareholder whose shares
are sold in a Tag-Along Transfer shall be entitled to receive the proceeds of
such Tag-Along Transfer less its pro rata share, based on the number of shares
included in such Tag-Along Transfer, of the expenses of the transaction
including, without limitation, legal, accounting and investment banking fees and
expenses, such determination of expenses to be made in the sole discretion of
the Board.
(e) The provisions of this Section 5 shall not apply to a subsequent
Transfer of any share of Class D Common Stock that has previously been the
subject of a completed Tag-Along Transfer which complied with the provisions of
this Section 5.
6. REDEMPTION.
(a) The number of shares of Class A Common Stock, Class B Common Stock,
Class C Common Stock or Class E Common Stock equal to the difference
("Difference Shares") between (i) the number of shares included in any Tag-Along
Transfer by the Class A Shareholder, Class B Shareholder, Class C Shareholder or
Class E Shareholder pursuant to Section 5 of Article IV and (ii) the Tag-Along
Pro Rata Amount for each such Class A Shareholder, Class B Shareholder, Class C
Shareholder or Class E Shareholder shall be redeemed by the Corporation, to the
extent it is lawfully permitted to do so, out of funds legally available
therefor PRO RATA, based on the number of Difference Shares held by such
Shareholders, from each of the Class A Shareholders, Class B Shareholders, Class
C Shareholders and Class E Shareholders who elected to include in the Tag-Along
Transfer a number of shares of Stock less than the number of shares that
constitute their Tag-Along Pro Rata Amount or any such Shareholders that did not
elect to participate in a Tag-Along Transfer at a redemption price (the
9
<PAGE> 13
"Tag-Along Redemption Price") for each share of Class A Common Stock, Class B
Common Stock, Class C Common Stock so redeemed in cash equal to the per share
price paid for the Class D Common Stock by the Proposed Transferee (provided
that, if the consideration to be paid by the Proposed Transferee includes any
non-cash consideration, the per share amount to be paid in such redemption shall
be the fair value of the per share consideration to be paid by such Proposed
Transferee as determined in good faith by the Board) less such Other
Shareholder's PRO RATA share, based on the number of shares of Stock so redeemed
from such Other Shareholder, of the expenses of the Tag-Along Transfer
including, without limitation, legal, accounting and investment banking fees and
expenses, such determination of expenses to be made in the sole discretion of
the Board. The provisions of this Section 6(a) shall not apply to the Non-
Redeemable Shares. Redemption under this subsection is conditioned upon the
contemporaneous purchase by the Proposed Transferee of the shares issuable under
Section 6(c) in connection with the applicable Tag-Along Transfer.
(b) If the Warrant Holder(s) exercise(s) the Class E Warrant, the
Corporation shall redeem, to the extent it is lawfully permitted to do so, from
the Class E Shareholders, PRO RATA based on the number of shares of such Class E
Common Stock then owned by each such Shareholder, out of funds legally available
therefor, a number of shares of Class E Common Stock equal to the number of
Warrant Shares at a redemption price (the "Warrant Redemption Price") equal to
the par value of each share of Class E Common Stock so redeemed. The provisions
of this Section 6(b) shall not apply to the Non-Redeemable Shares. If a
redemption pursuant to this Section 6(b) occurs as a result of a Sale of the
Corporation, such redemption shall occur, immediately prior to any redemption
pursuant to Section 6(a) hereof. Redemption under this subsection is conditioned
upon the contemporaneous purchase of the Warrant Shares by the Warrant Holder(s)
pursuant to the Class E Warrant.
(c) The shares of Class E Common Stock redeemed by the Corporation
pursuant to a Section 6(b) mandatory redemption shall, on the Redemption Date
(as defined in Section 6(d)), be retired and upon such retirement shall
automatically revert to authorized but unissued shares of Class E Common Stock,
and the Corporation shall, on the Redemption Date, but immediately after such
redemption, issue, to the extent it is lawfully permitted to do so, to the
Warrant Holder(s) a number shares of Common Stock equal to the number of Warrant
Shares. The shares of Class A Common Stock, Class B Common Stock, Class C Common
Stock or Class E Common Stock redeemed by the Corporation pursuant to a Section
6(a) mandatory redemption pursuant to a Tag-Along Transfer shall, on the
Redemption Date, be retired and upon such retirement shall automatically revert
to authorized but unissued shares of Class A Common Stock, Class B Common Stock,
Class C Common Stock or Class E Common Stock, as relevant, and the Corporation
shall, on the Redemption Date, but immediately after such redemption, issue, to
the extent it is lawfully permitted to do so, to the Proposed Transferee a
number of shares of Class A Common Stock, Class B Common Stock, Class C Common
Stock or Class E Common Stock equal to the number of shares of such classes of
Stock so redeemed. Upon any issuance of shares of Class A Common Stock, Class B
Common Stock, Class C Common Stock or Class E Common Stock equal to the number
of shares of such class of Stock redeemed pursuant to a Section 6(a) mandatory
redemption (and as a condition to such issuance), the Corporation shall receive
from the Proposed Transferee as the purchase price for such shares an amount
equal to the Tag-Along Redemption Price.
(d) The Corporation shall give to each holder of record the shares of
Class A Common Stock, Class B Common Stock, Class C Common Stock or Class E
Common Stock to be redeemed pursuant to the terms of this Section 6 prior
written notice of such redemption not
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<PAGE> 14
less than two Business Days prior to the date of such shares will be redeemed
(the "Redemption Date") which (i) in the case of a redemption pursuant to
Section 6(a) shall be the closing date of the Tag-Along Transfer and (ii) in the
case of a redemption pursuant to Section 6(b) shall be the Warrant Date. Each
such notice shall state: (A) the Redemption Date; (B) the total number of shares
of the Class A Common Stock, Class B Common Stock, Class C Common Stock or Class
E Common Stock to be redeemed and, if fewer than all the shares held by such
holder are to be redeemed, the number of such shares to be redeemed from such
holder; (C) the Tag-Along Redemption Price or the Warrant Redemption Price, as
relevant; and (D) the fact that the certificates for the shares subject to
redemption are to be surrendered in exchange for payment of the Tag-Along
Redemption Price or Warrant Redemption Price, as relevant, at the principal
office of the Corporation or at such other place as the Corporation shall
designate.
(e) On the Redemption Date, the shares of Class A Common Stock, Class B
Common Stock, Class C Common Stock or Class E Common Stock required to be
redeemed pursuant to the terms of this Section 6 shall be deemed to have been so
redeemed, notwithstanding that the certificates representing such Class A Common
Stock, Class B Common Stock, Class C Common Stock or Class E Common Stock shall
not have been surrendered at the principal office of the Corporation or such
other place as the Corporation may have designated or that notice from the
Corporation shall not have been given by the Corporation or, if given, shall not
have been received by any holder of Class A Common Stock, Class B Common Stock,
Class C Common Stock or Class E Common Stock whose shares of Stock are to be so
redeemed. All certificates representing the redeemed shares of Class A Common
Stock, Class B Common Stock, Class C Common Stock or Class E Common Stock,
including all certificates not so delivered by such Class A Shareholders, Class
B Shareholders, Class C Shareholders or Class E Shareholders, shall be, or shall
be deemed to be, canceled by the Corporation as of the Redemption Date and shall
thereafter no longer be of any force or effect.
7. CONVERSION.
If the Initial Public Offering or a Sale of the Corporation (whether
pursuant to a Single Transaction Sale or a series of Staggered Sales) occurs,
each issued and outstanding share of Class A Common Stock, Class B Common Stock,
Class C Common Stock, Class D Common Stock and Class E Common Stock, not
otherwise redeemed by the Corporation pursuant to the mandatory redemption
provisions of Section 6(a) or 6(b) hereof shall automatically convert into one
share of Common Stock effective on the Redemption Date (or, in the case of an
Initial Public Offering in which no Redemption Date occurs, the IPO Date, or, in
the case of a Sale of the Corporation in which no Redemption Date occurs, then
effective immediately prior to the consummation of such Sale of the
Corporation), but immediately after the redemptions and issuances described in
Section 6 of Article IV (the "Conversion Date"). Prior to or on the Conversion
Date, each Class A Shareholder, Class B Shareholder, Class C Shareholder, Class
D Shareholder and Class E Shareholder shall surrender such holder's certificates
evidencing such shares at the principal office of the Corporation or at such
other place as the Corporation shall designate to such holder in writing at
least ten (10) Business Days prior to the Conversion Date, and shall, within ten
(10) Business Days after the Conversion Date, be entitled to receive from the
Corporation certificates evidencing the number of shares of Common Stock into
which such shares of Class A Common Stock, Class B Common Stock, Class C Common
Stock, Class D Common Stock or Class E Common Stock are converted. On the
Conversion Date, each Class A Shareholder, Class B Shareholder, Class C
Shareholder, Class D Shareholder or Class E Shareholder shall be deemed to be a
holder of record of the Common Stock issuable upon such conversion,
notwithstanding that the certificates representing such Class A Common Stock,
Class B Common Stock, Class C Common Stock, Class
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<PAGE> 15
D Common Stock or Class E Common Stock shall not have been surrendered at the
principal office of the Corporation or such other place as the Corporation may
have designated, that notice from the Corporation shall not have been given or,
if given, shall not have been received by any Class A Shareholder, Class B
Shareholder, Class C Shareholder, Class D Shareholder or Class E Shareholder, or
that the certificates evidencing such shares of Common Stock shall not then be
actually delivered to such holder. All certificates representing the converted
shares of Class A Common Stock, Class B Common Stock, Class C Common Stock,
Class D Common Stock or Class E Common Stock, including all certificates not so
delivered by such Class A Shareholder, Class B Shareholder, Class C Shareholder,
Class D Shareholder or Class E Shareholder, shall be, or shall be deemed to be,
canceled by the Corporation as of the Conversion Date and shall thereafter no
longer be of any force or effect and the Corporation shall not thereafter issue
any such shares of Class A Common Stock, Class B Common Stock, Class C Common
Stock, Class D Common Stock or Class E Common Stock.
8. VOTING RIGHTS.
(a) Holders of shares of Class A Common Stock, Class B Common Stock and
Common Stock shall be entitled to one vote and holders of Class D Common Stock
shall be entitled to 50.6818 votes, for each share of such stock held on all
matters as to which Shareholders may be entitled to vote pursuant to the PBCL.
(b) Except as otherwise required by the PBCL, holders of Class C Common
Stock or Class E Common Stock shall not have any voting rights.
(c) The Shareholders of the Corporation shall not have the right to
cumulate their votes for the election of directors of the Corporation.
(d) Except as otherwise required by the PBCL, the Shareholders entitled
to vote on any matter submitted to the Shareholders for a vote shall vote
together as a single group and not as separate classes.
9. LIQUIDATION RIGHTS.
(a) Any distribution made upon the liquidation, dissolution or winding
up of the affairs of the Corporation, whether voluntary or involuntary, shall be
allocated PRO RATA based upon the number of shares of Stock held by each
Shareholder.
(b) None of the sale, transfer, conveyance or lease of all or
substantially all of the property or business of the Corporation, the merger or
consolidation of the Corporation into or with any other corporation or the
merger or consolidation of any other corporation into or with the Corporation
shall be deemed to be a dissolution, liquidation or winding up, voluntary or
involuntary, for the purposes of this Section 9.
10. LEGEND.
(a) All certificates representing shares of Class A Common Stock and
Class B Common Stock of the Corporation shall, in addition to other legends that
may be required by state or federal securities laws, bear the following legend:
12
<PAGE> 16
"THESE SECURITIES ARE SUBJECT TO A RIGHT OF FIRST OFFER IN FAVOR OF THE
CORPORATION UPON ANY PROPOSED SALE OF THESE SECURITIES. THE CORPORATION WILL
FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS THE POWERS,
DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL
RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF AND THE QUALIFICATIONS,
LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR RIGHTS."
(b) All certificates representing shares of Class A Common Stock, Class
B Common Stock, Class C Common Stock and Class E Common Stock of the Corporation
shall, in addition to other legends that may be required by state or federal
securities laws, bear the following legend:
"THESE SECURITIES ARE SUBJECT TO MANDATORY REDEMPTION BY THE
CORPORATION. THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO
SO REQUESTS THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING,
OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF AND
THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND/OR
RIGHTS."
and the certificates representing shares of Class A Common Stock and Class B
Common Stock of the Corporation held by officers and directors of the
Corporation and shares of Class C Common Stock and Class E Common Stock of the
Corporation shall bear the following additional legend:
"AS SPECIFIED IN THE ARTICLES OF INCORPORATION OF THE CORPORATION, THE
TRANSFERABILITY OF THESE SECURITIES IS SUBJECT TO RESTRICTION. THESE SECURITIES
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS
OF ANY STATE AND MAY BE REOFFERED AND SOLD ONLY IF SO REGISTERED OR IF AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE."
(c) All certificates representing shares of Class D Common Stock in the
Corporation shall, in addition to other legends that may be required by state or
federal securities laws, bear the following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY BE REOFFERED AND SOLD ONLY IF
SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE."
"AS SPECIFIED IN THE ARTICLES OF INCORPORATION OF THE CORPORATION, THE
TRANSFERABILITY OF THESE SECURITIES IS SUBJECT TO RESTRICTION. THE CORPORATION
WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS THE POWERS,
DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL
RIGHTS OR EACH CLASS OF STOCK OR SERIES THEREOF AND THE QUALIFICATIONS
LIMITATIONS OR RESTRICTIONS OR SUCH PREFERENCES AND/OR RIGHTS."
(d) All certificates representing shares of Common Stock in the
Corporation shall, in addition to other legends that may be required by state or
federal securities laws, bear the following legend:
13
<PAGE> 17
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY BE REOFFERED AND SOLD ONLY IF
SO REGISTERED OR IF AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE."
"THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO
REQUESTS THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATION,
OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF AND
THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OR SUCH PREFERENCES AND/OR
RIGHTS."
PROVIDED THAT, as specified in Section 3(b) hereof, following the Initial Public
Offering, such certificates shall bear the first legend set forth in this
Section 10(d) above or another legend similar to it only if, in the opinion of
counsel to the Corporation, the imposition of such legend is required under the
Securities Act or other applicable law and, to the extent applicable, the second
and third legends.
(e) All certificates representing shares of Stock shall bear such
additional legends as may be required pursuant to the Shareholder Agreements.
11. RECORD HOLDERS. The Corporation shall be entitled to recognize the
exclusive right of a person registered in its records as the holder of shares of
Class A Common Stock, Class B Common Stock, Class C Common Stock, Class D Common
Stock, Class E Common Stock or Common Stock and such record holders shall be
deemed the holders of such shares for all purposes.
ARTICLE V - MANAGEMENT OF BUSINESS AND AFFAIRS
----------------------------------------------
For the management of the business and for the conduct of the affairs
of the Corporation, and in further definition, limitation and regulation of the
powers of the Corporation and of its directors and of its Shareholders or any
class thereof, as the case may be, it is further provided:
1. The management of the business and the conduct of the affairs of the
Corporation shall be vested in its Board. The number of directors which shall
constitute the whole Board shall be fixed by, or in the manner provided in, the
Bylaws. The phrase "whole Board" and the phrase "total number of directors"
shall be deemed to have the same meaning, to wit, the total number of directors
which the Corporation would have if there were no vacancies. No election of
directors need be by written ballot.
2. After the original or other Bylaws of the Corporation have been
adopted, amended, or repealed, as the case may be, in accordance with the
provisions of Section 1504 of the PBCL, and, after the Corporation has received
any payment for any of its stock, the power to adopt, amend, or repeal the
Bylaws of the Corporation may be exercised by the Board.
ARTICLE VI - DIRECTOR LIABILITY
-------------------------------
1. To the fullest extent that the laws of the Commonwealth of
Pennsylvania permit elimination or limitation of the liability of directors, no
director of the Corporation shall be
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<PAGE> 18
personally liable for monetary damages as such for any action taken, or any
failure to take any action, as a director.
2. The provisions of this Article and of Article VII shall be deemed to
be a contract with each director of the Corporation who serves as such at any
time while this Article is in effect and each such director shall be deemed to
be so serving in reliance on the provisions of this Article. Any amendment or
repeal of this Article or adoption of any by-law or other provision of the
Articles of the Corporation which has the effect of increasing director
liability shall operate prospectively only and shall not have any effect with
respect to any action taken, or any failure to act, by a director prior to the
adoption of such amendment, repeal, by-law or other provision.
ARTICLE VII - INDEMNIFICATION
-----------------------------
1. Except as prohibited by law, every director and officer of the
Corporation shall be entitled as of right to be indemnified by the Corporation
against expenses and any liability paid or incurred by such person in connection
with any actual or threatened claim, action, suit or proceeding, civil,
criminal, administrative, investigative or other, whether brought by or in the
right of the Corporation or otherwise, in which he or she may be involved in any
manner, as a party, witness or otherwise, or is threatened to be made so
involved, by reason of such person being or having been a director or officer of
the Corporation or of a subsidiary of the Corporation or by reason of the fact
that such person is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary or other representative of another
corporation, partnership, joint venture, trust, employee benefit plan or other
entity (such claim, action, suit or proceeding hereinafter being referred to as
"Action"); provided, that, no such right of indemnification shall exist with
respect to an Action initiated by an indemnitee (as hereinafter defined) against
the Corporation (an "Indemnitee Action") except as provided in the last sentence
of this Section (1). Persons who are not directors or officers of the
Corporation may be similarly indemnified in respect of the Corporation to the
extent the Board at any time denominates any of such persons as entitled to the
benefits of this Article VII. As used in this Article, "indemnitee" shall
include each director and officer of the Corporation and each other person
denominated by the Board as entitled to the benefits of this Article, "expenses"
shall include fees and expenses of counsel selected by an indemnitee, and
"liability" shall include amounts of judgments, excise taxes, fines, penalties
and amounts paid in settlement. An indemnitee shall be entitled to be
indemnified pursuant to this Section (1) for expenses incurred in connection
with any Indemnitee Action only (i) if the indemnitee is successful, as provided
in Section (3) of this Article, (ii) if the indemnitee is successful in whole or
in part in another Indemnitee Action for which expenses are claimed or (iii) if
the indemnification for expenses in included in a settlement of, or is awarded
by a court in, such Indemnitee Action.
2. Every indemnitee shall be entitled as of right to have his or her
expenses in defending any Action, in initiating and pursuing any Indemnitee
Action for indemnity or advancement or expenses under Section (3) of this
Article VII, paid in advance by the Corporation prior to final disposition of
such Action or Indemnitee Action, provided that the Corporation receives a
written undertaking by or on behalf of the indemnitee to repay the amount
advanced if it should ultimately be determined that the indemnitee is not
entitled to be indemnified for such expenses.
3. If a written claim under Section (1) or Section (2) of this Article
VII is not paid in full by the Corporation within thirty days after such claim
has been received by the Corporation, the indemnitee may at any time thereafter
initiate an Indemnitee Action to recover the unpaid amount of the claim and, if
successful in whole or in part, the indemnitee shall also be entitled to be paid
the
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<PAGE> 19
expense of prosecuting such Indemnitee Action. The only defense to an Indemnitee
Action to recover on a claim for indemnification under Section (1) of this
Article shall be that the indemnitee's conduct was such that under Pennsylvania
law the Corporation is prohibited from indemnifying the indemnitee for the
amount claimed, but the burden of proving such defense shall be on the
Corporation. Neither the failure of the Corporation (including the Board,
independent legal counsel and its shareholders) to have made a determination
prior to the commencement of such Indemnitee Action that indemnification of the
indemnitee is proper in the circumstances, nor an actual determination by the
Corporation (including the Board, independent legal counsel or its shareholder)
that the indemnitee's conduct was such that indemnification is prohibited by
Pennsylvania law, shall be a defense to such Indemnitee Action or create a
presumption that the indemnitee's conduct was such that indemnification is
prohibited by Pennsylvania law. The only defense to an Indemnitee Action to
recover a claim for advancement of expenses under Section (2) of this Article
VII shall be the indemnitee's failure to provide the undertaking required by
Section (2) of this Article VII.
4. The Corporation may purchase and maintain insurance to protect
itself and any person eligible to be indemnified hereunder against any liability
or expense asserted or incurred by such person in connection with any Action,
whether or not the Corporation would have the power to indemnify such person
against such liability or expense by law or under the provisions of this Article
VII. The Corporation may create a trust fund, grant a security interest, cause a
letter of credit to be issued or use other means (whether or not similar to the
foregoing) to ensure the payment of such sums as may become necessary to effect
indemnification as provided herein.
5. The rights to indemnification and advancement of expenses provided
for in this Article VII shall (i) not be deemed exclusive of any other rights,
whether now existing or hereafter created, to which any indemnitee may be
entitled under any agreement or by-law, charter provision, vote of shareholders
or directors or otherwise, (ii) be deemed to create contractual rights in favor
of each indemnitee who serves the Corporation at any time while this Article is
in effect (and each such indemnitee shall be deemed to be so serving in reliance
on the provisions of this Article) and (iii) continue as to each indemnitee who
has ceased to have the status pursuant to which he or she was entitled or was
denominated as entitled to indemnification under this Article and shall inure to
the benefit of the heirs and legal representatives of each indemnitee. Any
amendment or repeal of this Article or adoption of any by-law or other provision
of the Articles of Incorporation which limits in any way the right to
indemnification or the right to advancement of expenses provided for in this
article shall operate prospectively only and shall not affect any action taken,
or failure to act, by an indemnitee prior to the adoption of such amendment,
repeal, by-law or other provision.
6. If an indemnitee is entitled under any provision of this Article VII
to indemnification by the Corporation for some or a portion of the expenses or a
liability paid or incurred by the indemnitee in the preparation, investigation,
defense, appeal or settlement of any Action or Indemnitee Action but not,
however, for the total amount thereof, the Corporation shall indemnify the
indemnitee for the portion of such expenses or liability to which the indemnitee
is entitled.
ARTICLE VIII - AMENDMENTS
-------------------------
From time to time any of the provisions of the Articles of
Incorporation may be amended, altered or repealed, and other provisions
authorized by the laws of the Commonwealth of Pennsylvania at the time in force
may be added or inserted in the manner and at the time prescribed
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<PAGE> 20
by said laws, and all rights at any time conferred upon the Shareholders of the
Corporation by the Articles of Incorporation are granted subject to the
provisions of this Article.
ARTICLE IX - TERM
-----------------
The term of the Corporation is perpetual.
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<PAGE> 21
IN WITNESS WHEREOF, the Corporation has duly adopted these Amended and
Restated Articles of Incorporation, which restates and supersedes the provisions
of the Articles of Incorporation of the Corporation, in accordance with Sections
1914 and 1912 of the Business Corporation Law, and has caused this certificate
to be executed by its duly authorized officer this 23rd day of May, 2000.
WERNER HOLDING CO. (PA), INC.
By: ________________________________
Name: Eric J. Werner
Title: Secretary
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<PAGE> 22
________ ________
200041 - 1555
Exhibit A
to Articles of Incorporation
----------------------------
Terms of Market Participation Payment
(a) Subject to the provisions of section (e) below, if (i) a Liquidity Event
shall first occur on or prior to November 24, 2007 and (ii) at the time of such
Liquidity Event, the Final Equity Value shall equal or exceed the Targeted
Equity Value, each Person entitled to receive on the Special Redemption Date a
portion of the redemption price which is payable as of such date (the "Initial
Payment") or a Permitted Transferee of such Person (each, a "Recipient") shall
be entitled to receive from the Corporation a percentage of the Market
Participation Payment equal to the percentage of the total Initial Payments
payable as of the Special Redemption Date which such Person or its transferor,
as the case may be, was entitled to receive as of such date. The Market
Participation Payment shall constitute a contractual right of each Recipient and
shall not entitle such Recipient to any voting or other right which might be
applicable to holders of securities of the Corporation. The Market Participation
Payment shall be payable in cash, provided that the Corporation, in its
discretion, may substitute for up to half of the Market Participation Payment
notes or similar obligations with a maturity date of not more than 7 years and
interest and other market terms which the Board of Directors of the Corporation
in good faith believes, after consulting with a nationally recognized
securities organization, will provide equivalent value. Any substitution of
notes or similar obligations shall be effected on a proportionate basis to all
Recipients. Notwithstanding anything contained herein to the contrary, no Market
Participation Payment shall be payable if (i) a Liquidity Event has occurred and
the Final Equity Value at the time of the Liquidity Event does not equal or
exceed the Targeted Equity Value at such time, (ii) more than ten years shall
have elapsed from the date of the Recapitalization to the date of the first
occurrence of a Liquidity Event or (iii) prohibited by applicable law (in which
event the payment shall be made if and when permitted by applicable law).
<PAGE> 23
_______ ________
200041 - 1556
(b} The Market Participation Payment shall be payable promptly following
the occurrence of a Liquidity Event and a determination by the Board of the
Directors of the Corporation of the amount of the Market Participation Payment.
Any determination made by the Board of Directors of the Corporation in good
faith with respect to the Market Participation Payment shall be final and
binding absent manifest error. The Corporation shall promptly notify the
Recipients of the Board's determination, which notice shall include setting
forth in reasonable detail the basis of the Board's determination. At the
request of Recipients entitled to not less than 25% of the Market Participation
Payment, the Corporation shall have the Board's determination confirmed by a
nationally recognized accounting firm.
(c) The Corporation shall treat each Person entitled to receive an Initial
Payment as the Recipient, unless and until the Corporation shall have received
sufficient notice (as determined in good faith by the Corporation) that such
Person has transferred all or a part of his, her or its rights to the Market
Participation Payment to a Permitted Transferee in accordance with this Exhibit
B. In such event, the Corporation shall treat the Permitted Transferee as the
Recipient of the relevant share of the Market Participation Payment to the
extent of the interest so transferred. The rights granted pursuant to this
Exhibit B may not be transferred to any Person other than a Permitted
Transferee.
(d) The Corporation shall maintain a register of Recipients. The
Corporation shall mail to each Recipient a check and, if appropriate, a note or
other obligation representing the portion of the Market Participation Payment
which such Person is entitled, at the address set forth in the register
maintained by the Corporation as of the Special Redemption Date or as changed by
such Person in writing signed by such Person and delivered to the corporate
secretary of the Corporation. The Corporation shall have no obligation to use
any other address or to confirm or make any investigation of any Recipient's
address other than as set forth in the preceding sentence. Once the Corporation
has delivered a Recipient's portion of the Market Participation Payment as set
forth above, the Corporation shall have no obligation to maintain any funds or
reserves in respect of the amount of the portion of such payment which is made
by check beyond three months after the date of delivery of such check, and in
respect of the
2
<PAGE> 24
_______ _______
200041 - 1557
amount of the portion of such payment which is made by note or other
obligation beyond three months after the maturity date of such note or
obligation.
(e) Notwithstanding anything contained herein to the contrary, the
obligations of the Corporation hereunder, and the rights of a Recipient to a
portion of the Market Participation Payment, shall not be modified without (i)
the written consent to such modification of Recipients who would at the time be
entitled to receive a majority of the Market Participation Payment and (ii) the
approval of the Board of Directors of the Corporation.
(f) For purposes of this Exhibit B, the following terms shall have
following meanings.
"AFFILIATE" means, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. A Person will be deemed to control a corporation if
such Person possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such corporation, whether through
the ownership of voting securities, by contract or otherwise.
"COMPANY COMMON STOCK" means any and all classes of common stock of the
Corporation.
"FINAL EQUITY VALUE" means an aggregate amount equal to: (i) (A) the
aggregate value of the equity of the Corporation outstanding immediately prior
to consummation of the Liquidity Event determined by multiplying the total
number of shares of Company Common Stock outstanding immediately prior to the
Liquidity Event (utilizing the treasury method of accounting to treat options to
purchase shares of any class of Company Common Stock) by the Terminal Per Share
Value, PLUS (B) an amount equal to amounts paid in dividends (other than
dividends payable in additional shares of Company Common Stock) on shares of
Company Common Stock outstanding immediately after the Recapitalization or
issued with respect thereto pursuant to a stock split, stock dividend or other
similar transaction ("Original Shares"), or for Original Shares repurchased
since the Recapitalization and prior to the Liquidity Event, compounded at an
annual rate equal to the Targeted Return Rate from the date of any such payment,
MULTIPLIED by (ii) a fraction the numerator of which shall be the total number
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200041 - 1558
of Original Shares (treating as outstanding any Original Shares repurchased),
and the denominator of which shall be a number equal to the sum of the total
number of shares of Common Stock outstanding immediately prior to the Liquidity
Event and the total number of Original Shares repurchased, less (iii) the amount
of the Market Participation Payment.
"INITIAL EQUITY VALUE" means the product of the number of shares of
Common Stock outstanding immediately following the Recapitalization multiplied
by $2,421.29.
"INVESTCORP SHAREHOLDERS" means the entities listed in Schedule 1 to the
Recapitalization Agreement, any Affiliate of such entities and any other
investor with whom Investcorp Bank E.C. or any Affiliate thereof has an
administrative relationship.
"LIQUIDITY EVENT" means consummation of either (i) an initial
underwritten public offering of shares of Company Common Stock after which a
number of shares of Company Common Stock representing at least 10% of the
outstanding shares of Company Common Stock (calculated on a fully diluted basis)
are publicly held and the Company Common Stock is listed or admitted for trading
on a national securities exchange or quoted in the National Association of
Securities Dealers Automated Quotations National Market System or traded in the
over-the-counter market or (ii) a sale (either in one transaction or a series of
related transactions) by the Investcorp Shareholders to a non-Investcorp
Shareholder of a number of shares representing in the aggregate at least a
majority of the shares originally held by the Investcorp Shareholders (in either
instance adjusted for stock splits, stock dividends or other similar
transactions).
"MARKET PARTICIPATION PAYMENT" means an aggregate amount equal to 5% of
the Final Equity Value (determined without excluding the amounts referred to in
clause (iii) of the definition of the term "Final Equity Value").
"PERMITTED TRANSFEREE" means (i) such Recipient's spouse or issue (each
a "Family Member"), (ii) the trustee or trustees of a trust solely (except for
remote contingent interests) for the benefit of the Recipient and/or one or more
Family Members, (iii) a foundation created or established by the Recipient, (iv)
a charitable remainder trust for the benefit of the Recipient and/or one or more
Family
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200041 - 1559
Members and/or designated charities, (v) a partnership of which the Recipient
or a Family Member owns all of the partnership interests, (vi) the executor,
administrator, or personal representative of the estate of the Recipient, (vii)
any guardian, trustee or conservator appointed with respect to the assets of the
Recipient, (viii) any person who succeeds to the rights of the Recipient under
this Exhibit B by the laws of descent and distribution, (ix) any beneficiary of
a trust or partnership which is a Recipient as of the Special Redemption Date or
which becomes a Recipient following the Special Redemption Date in accordance
with the preceding clauses (ii) or (v), and (x) any Person which is of a type or
category deemed by the Board of Directors of the Corporation to be consistent
with the intent of the preceding clauses (i) through (ix) and approved by the
Board of Directors of the Corporation.
"PERSON" means any natural person, partnership, limited liability
company, corporation (including the Corporation), trust or unincorporated
organization or a government or a political subdivision thereof.
"RECAPITALIZATION" has the meaning set forth in the preamble of the
Recapitalization Agreement.
"RECAPITALIZATION AGREEMENT" means the Recapitalization Agreement, dated
as of October 8, 1997 and as amended from time to time, by and among Werner
Holding Co. (PA), Inc. and the Investcorp Shareholders.
"RECIPIENT" means any Person that is entitled to receive a portion of
the Market Participation Payment in accordance with this Exhibit B.
"SPECIAL REDEMPTION DATE" means the date prior to March 31, 1998 on
which Class A-1 Stock and Class B-1 Stock of the Corporation is redeemed by the
Corporation.
"TARGETED RETURN RATE" means a compounded annual rate of return from the
date of the Recapitalization until the date of a Liquidity Event corresponding
to the following rates and years:
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200041 - 1560
Year Following Recapitalization
During Which Liquidity Event Occurs Rate
----------------------------------- ----
1st 40.0%
2nd 32 5%
3rd 27.5%
4th 25.0%
5th 25.0%
6th 25.0%
7th 22.5%
8th 20.0%
9th 20.0%
10th 20.0%
"TARGETED EQUITY VALUE" means the dollar amount at the time of a
Liquidity Event that is equal to the Initial Equity Value compounded annually at
the Targeted Return Rate.
"TERMINAL PER SHARE VALUE" means (i) with respect to an initial public
offering, the average closing price per share of the publicly traded Company
Common Stock over the first 30 trading days after the initial public offering as
reported in the Wall Street Journal or any other comparable source selected in
good faith by the Board of Directors of the Corporation, and (ii) with respect
to the sale of Investcorp Shareholders of shares of Company Common Stock, the
per share price paid for the Investcorp Shareholders' shares in the sale
transaction.
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